SUBLEASE AGREEMENT
THIS SUBLEASE AGREEMENT (“Sublease”), is effective as of the date of the last signature below (“Effective Date”), and is by and between SIMPLOT AB RETAIL, INC., a Delaware Corporation with its principal address at 1099 West Front Street, Boise, ID 83702 (“Landlord”), and The City of Salinas, a California charter city and municipal corporation with its principal address at 200 Lincoln Ave., Salinas, CA 93901(“Tenant”). Tenant and Landlord are collectively referred to herein as “Parties” and individually as “Party.” For the rent, the use and occupancy of the premises described, and for other valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties agree as follows:
PREMISES. The premises consist of a portion of certain real property, including any improvements located thereon, located at 801 Abbott Street, Salinas, CA 93908, as specifically described and depicted in more detail on Exhibit A attached hereto and incorporated herein by reference (collectively the “Premises”).
MASTER LEASE. Landlord is the tenant of real property, including the Premises, pursuant to a Lease Agreement, dated May 10, 2021 (the “Master Lease”), between Landlord as tenant and Barone Living Trust dated December 6, 2000 as the owner and landlord which is attached hereto and incorporated herein as Exhibit B. This Sublease is and shall be at all times subject and subordinate to the Master Lease. As it relates to the Premises hereunder, Tenant agrees that, except to the extent that the provisions of the Master Lease are directly contradicted by this Sublease it shall perform and observe all of the terms, conditions, covenants and obligations, and be bound by all the limitations imposed on Landlord by the Master Lease as if Tenant were the “tenant” named in the Master Lease. Tenant shall not do or permit to be done any act or thing, or omit to do anything, which may constitute a breach or violation of any term, covenant, or condition of the Master Lease, notwithstanding if such act, thing, or omission is permitted under the terms of this Sublease.
USE. The Premises are hereby leased to Tenant for use solely by Tenant and its employees in the normal course of Tenant’s lawful business activities which are limited only to offices, a training classroom and a “fire museum”, which museum may include on old fire engine (“Permitted Use”). The Premises will not be open or accessible to the public. No equipment containing oil, fuel, or other liquids capable of potential leaking shall be stored inside. Any other use will require Landlord’s prior written consent. Any use inconsistent with this Sublease will be considered a default and breach of this Sublease.
TERM. The initial term of this Sublease will commence on May 1, 2022 and shall continue for three (3) years. The Term of this Sublease may be extended upon mutual written agreement of the Parties. As used in this Sublease, “Term” shall mean the initial term and any extensions thereof. If for any reason the Master Lease is terminated or expires prior to this Sublease, this Sublease shall automatically terminate and Landlord shall not be liable to Tenant for such termination.
RENT. Tenant shall pay $5,000 monthly in rent (“Rent”) for the Term of this Sublease. Tenant shall pay Rent to Landlord in advance on or before the fifth (5th) day of each calendar month, by wire transfer, direct deposit or other means acceptable to Landlord at Landlord’s address set forth above, or such other address as Landlord may from time to time designate in writing. All rent due hereunder shall be paid to Landlord without offset or prior notice or demand, in lawful money of the United States.
SECURITY DEPOSIT. None Required.
UTILITIES. Landlord will be responsible for the payment of the following utilities: electricity, natural gas (if available), sewer, water, and garbage service. Unless otherwise agreed upon, Tenant shall pay all monthly service costs for telephone and internet service at the Premises.
CONDITION OF PREMISES. Landlord has made no representation or warranty, expressed or implied, with respect to the condition of the Premises or the fitness of the Premises for any particular use. Tenant acknowledges that it has been given the opportunity to fully investigate the Premises and is familiar with the size, dimensions, physical condition, and zoning of the Premises. By occupying the Premises, Tenant will be deemed to have accepted the Premises “as is” and “where is” and with all faults, and without any warranty and specifically without warranty of merchantability, habitability, and fitness for a particular purpose. Landlord shall not be obligated to make any alteration or improvement to the Premises. Tenant hereby waives the provisions of California Civil Code Section 1932(1) due to an interruption, failure or inability to provide any services.
Pursuant to Section 1938 of the California Civil Code, the Premises has not undergone inspection by a Certified Access Specialist or CASp, which means any person who has been certified pursuant to Section 4459.5 of the California Government Code. California Civil Code Section 1938 provides that although state law does not require a CASp inspection of the Premises, Landlord may not prohibit Tenant from obtaining a CASp inspection of the Premises for the occupancy or potential occupancy of the Tenant, if requested by Tenant. Landlord and Tenant hereby agree that Tenant shall pay for the fee for the CASp inspection and for all costs of making any repairs necessary to correct violations of construction-related accessibility standards within the Premises.
POSSESSION; QUIET ENJOYMENT. Tenant will be entitled to possession of the Premises from the first day of the Term and will yield possession of the Premises to the Landlord on the last day of the Term, unless otherwise agreed in writing by both Parties. If and so long as no Tenant event of default shall have occurred and be continuing, Tenant shall peaceably and quietly have, hold and enjoy the Premises for the Term of this Sublease. At the expiration or earlier termination of this Sublease, Tenant shall surrender possession of the Premises to Landlord in as good condition as existed upon the Effective Date, reasonable wear and tear excepted. All property of Tenant remaining in or on the Premises after the last day of the Term, shall be deemed abandoned and may be removed by Landlord.
MAINTENANCE AND OPERATION OF THE PREMISES.
By Landlord. Landlord shall be responsible for maintaining, in the same condition and repair as existed at the start of this Sublease, reasonable wear and tear excepted, all structural portions of all improvements including the foundation, outside walls, roof, and roof membrane; sewer, water pipes, and other matters relating to plumbing including interior fixtures; electrical wiring and other electrical systems; air conditioning and heating systems; and all life safety systems (such as sprinkler systems); exclusive of doors and windows. In the event the Premises should become in need of repairs to be made by Landlord hereunder, Tenant shall give prompt written notice thereof. Tenant hereby waives any and all rights under and benefits of Sections 1941 and 1942 of the California Civil Code or under any similar law, statute, or ordinance now or hereafter in effect, and Tenant waives the right to make repairs at Landlord’s expense under Sections 1941 and 1942 of the California Civil Code, and under all other similar laws, statutes or ordinances now or hereafter in effect.
By Tenant. Tenant, at its expense, shall be responsible for all necessary routine maintenance and non-structural repairs, including doors and windows, to properly maintain the Premises, reasonable wear and tear excepted. Tenant shall keep and maintain adjoining areas, sidewalks and parking lots (if any) in a clean, safe and attractive condition and free from snow and ice. If Tenant refuses or neglects to perform such maintenance, or any part thereof, within a reasonable time after written notice from Landlord, Landlord may at its option perform such service on behalf of and for the account of Tenant and Tenant shall promptly pay as additional rent any sums so expended.
IMPROVEMENTS; SIGNAGE. All changes or additions to the Premises by Tenant, not including removable trade fixtures, shall require Landlord’s written consent and shall be solely at Tenant’s expense. All changes or additions made by Tenant to the Premises, other than Tenant’s trade fixtures and Tenant’s personal property, shall become the property of Landlord upon termination of this Sublease, unless Landlord requests that some or all of the same to be removed, in which event Tenant shall promptly remove such improvements made by Tenant and designated in the notice, and repair any structural damage caused thereby. Any improvements shall be properly installed and shall conform with all applicable laws, rules, ordinances, and regulations. Upon completion of any alterations which require Landlord’s prior approval, Tenant agrees to cause a Notice of Completion to be recorded in the office of the Recorder of the County of in which the Premises is located in accordance with Sections 8182, 8184, 9204 and 9208 of the Civil Code of the State of California or any successor statute. Tenant may, at its expense and in compliance with applicable law, rules, ordinances, and regulations, install new signs on the Premises as may be reasonable and which shall not damage or impair the attractiveness of the Premises. Such signs shall be approved by Landlord in advance, which approval shall not be unreasonably withheld, conditioned or delayed.
COMPLIANCE WITH LAWS. Tenant shall comply with all applicable federal, state, county, city and municipal laws, rules, regulations, ordinances and requirements applicable to Tenant, the Premises, or Tenant’s use or occupancy of the Premises, including, but not limited to, all zoning, fire, environmental (including those regarding Hazardous Materials or Hazardous Substances, as defined below) health or safety regulations. In the event of any change in applicable laws that require alteration to the Premises, Tenant will make the alterations at its cost and in compliance with all applicable laws, rules, ordinances and regulations.
HAZARDOUS MATERIALS. Tenant shall not accumulate, handle, use, or store on the Premises Hazardous Materials except in types and quantities reasonably used in household use. Tenant shall comply with any lawful order by an entity with authority to regulate the use, accumulation, storage or disposal of Hazardous Materials. Tenant hereby covenants and warrants that during the term of this Sublease, neither Tenant nor any other person or entity acting under Tenant’s control or authority shall discharge nor permit any discharge of any Hazardous Substances on, in or under the Premises. Tenant expressly assumes all liability for any such contamination, and Tenant shall indemnify, defend and hold harmless Landlord from and against all claims, damages, expenses or causes of action arising therefrom. As used herein, “Hazardous Material” or “Hazardous Substance” means and includes any of the substances, materials, elements or compounds that are contained in the list of hazardous substances adopted by the United States Environmental Protection Agency (EPA) and the list of toxic pollutants designated by the United States Congress or the EPA, or any substances, materials, elements or compounds affected by any other federal, state or local statute, law, ordinance, code, rule, regulation, order or decree now or at any time hereafter in effect regulating, relating to or imposing liability or standards of conduct concerning any hazardous, toxic, dangerous, restricted or otherwise regulated waste, substance or material, as of now or at any time hereafter in effect.
PERSONAL PROPERTY TAXES. Tenant shall pay before delinquency all taxes and other public charges levied upon or measured by the value of its business operation, and upon the furniture, fixtures, equipment or other property of Tenant located on the Premises, whether or not such charges are now customary.
INSURANCE.
Commercial General Liability. During the Term of this Sublease, Tenant and Landlord shall each maintain commercial general liability insurance in respect of the Premises in the amount of One Million Dollars ($1,000,000.00) per occurrence for bodily injury and property damage. Each shall cause the other to be named as additional insured thereunder.
Property Damage and Casualty Insurance. During the Term of this Sublease, Landlord will maintain and carry all-risk property damage and casualty insurance insuring against fire and other risks covered by a standard casualty insurance policy with an endorsement for extended coverage for the Premises. The insurance shall be maintained in an amount equal to the full replacement cost of the Premises and improvements. Landlord is not responsible for insuring Tenant’s personal property located on the Premises.
Renter’s Insurance. During the Term of this Sublease, Tenant shall obtain and maintain appropriate “renter’s insurance” on its personal property.
Self-Insurance. Landlord understands and acknowledges that the Tenant is self-insured for all forms of legal liability and that one or more policies of such self-insurance are sufficient to meet the requirements of this section." DEFAULTS. Time is of the essence in the performance of each Party’s obligations under this Sublease. A Party (each a “Defaulting Party”) shall be in default under any of the following circumstances (each a “Default Event”):
failure to fulfill any obligation by which it is bound, provided, however, except where the default is failure by Tenant to pay Rent, the Non-Defaulting Party will provide the Defaulting Party with thirty (30) days written notice and an opportunity to cure. No such notice and opportunity to cure shall be applicable to a default by Tenant in payment of Rent; or becoming a party to a voluntary or involuntary bankruptcy case, receivership, or other creditor remedial action, or making an assignment for the benefit of creditors; or abandonment or vacation of the Premises or the taking of this Sublease by any writ of execution.
Any notice periods provided in this Sublease are in lieu of, and not in addition to, any notice periods provided by law, including, without limitation, under California Code of Civil Procedure Section 1161 or any similar or successor law.
REMEDIES. Upon the occurrence of a Default Event, the following remedies shall be non-exclusive and cumulative:
Landlord’s Remedies. In the event Tenant is the Defaulting Party, then Landlord may:
Seek to collect past due rent and other past due obligations; Terminate this Sublease by written notice to Tenant and thereafter seek to repossess the Premises, through the appropriate judicial process, and Landlord shall be entitled to damages in an amount as set forth California Civil Code Section 1951.2; Elect to cure any Default Event and add the reasonable cost of such cure to the Tenant’s financial obligations under this Sublease; Maintain this Sublease in full force and effect, whether or not Tenant has abandoned the Premises, and recover all monetary sums due hereunder as they become due, in which event Landlord shall have the right to enter upon the Premises for the purpose of preserving and maintaining the same and to re-let the Premises upon terms acceptable to Landlord, including the right to remove property and persons from the Premises and to prepare the Premises for such re-letting, without being deemed to have terminated this Sublease. Any property of Tenant removed from the Premises may be stored at Tenant's cost, and if Tenant does not pay such storage, sold at public auction after not less than 10 days’ prior notice to Tenant, with the proceeds applied to sums due hereunder to Landlord. If such re-letting occurs, this Sublease shall automatically terminate upon the new tenant taking possession, but Tenant shall remain liable for damages, including but not limited to all monetary sums then due with interest, leasing commissions and alteration costs incurred by Landlord in securing the new Tenant, and the difference in rental rates between this Sublease and such re-letting if such re-letting is at a lesser rate; Tenant’s obligations hereunder shall be reduced by the difference in rental rates between this Sublease and such re-letting if such re-letting is at a higher rate; and/or Elect any other remedies available at law, in equity, or under this Sublease.
Tenant’s Remedies. In the event Landlord is the Defaulting Party, then Tenant may:
Terminate this Sublease and seek all remedies, legal and equitable, available to it hereunder or at law; or Elect to cure any Default Event as provided above and obtain from Landlord the reasonable cost of such cure.
Waiver. The failure of either party to insist on strict performance of any covenant or condition hereof, or to exercise any option herein contained, shall not be construed as a waiver of such covenant, condition or option in any other instance.
Force Majeure. The term force majeure, as used herein, means an uncontrollable event including an Act of God, and also, including without limitation, labor stoppages and governmental action other than changes in applicable tax laws, beyond the reasonable control of, and without the fault or negligence of, the Party claiming force majeure. Neither Party is liable, and each shall be excused, for delay or breaches, other than for the payment of Rent, caused by any force majeure event. Each party shall retain all rights arising from any breaches prior to the force majeure event. Tenant waives any and all rights and defenses to which it may be entitled pursuant to Section 1511 of the California Civil Code, and expressly assumes the risk of the impact of any pandemic, epidemic or other public health emergency in connection with the Sublease.
DESTRUCTION AND TAKING.
Destruction. Within thirty (30) days of any destruction of the Premises, whether by fire or other casualty, not attributable to Tenant, Landlord will provide Tenant written notification of whether Landlord, in its sole discretion, will (i) repair or restore the Premises to the condition immediately prior to such destruction or (ii) terminate this Sublease as of the date of such destruction. In the event Landlord decides to repair or restore the Premises, rent payable by Tenant shall be proportionally abated. In the event of termination, any unearned rent paid by Tenant will be pro-rated and refunded to Tenant. Notwithstanding anything to the contrary in this Section:
Landlord’s obligations to repair or restore the Premises shall be limited to the amount of insurance proceeds actually received under the policies of fire or extended coverage, provided, however, if the Premises are not fully restored to the condition immediately prior to such destruction, then Tenant may terminate this Sublease upon written notice; and Tenant shall bear all costs and expenses of repair and restoration as a result of damage caused by the intentional or negligent act or omission of Tenant, its employees, agents, guests, or invitees.
The provisions of this Sublease constitute an express agreement between Landlord and Tenant with respect to any and all damage to, or destruction of, all or any part of the Premises, and any statute or regulation of the State of California, including, without limitation, Sections 1932(2) and 1933(4) of the California Civil Code, with respect to any rights or obligations concerning damage or destruction in the absence of an express agreement between the parties, and any other statute or regulation, now or hereafter in effect, shall have no application to this Sublease or any damage or destruction to all or any part of the Premises.
Taking. If the Premises are acquired or damaged by the exercise of the right of eminent domain or if access to the Premises is materially damaged by the change of grade of adjacent street(s) or other activity by a public authority, whether or not such damage involves a physical taking of any portion of the Premises, this shall be considered a taking. If the Premises are taken in whole or in part, then this Sublease will terminate upon twenty (20) days written notice of such event by either Party. In any event, Landlord shall be entitled to receive the entire appropriation award or consideration paid by the condemning authority, and Tenant shall have no rights to or in such award. This section, not general principles of law or California Code of Civil Procedure Sections 1230.010 et seq., 1265.110 et seq., and 1265.130 et seq., shall govern the rights and obligations of Landlord and Tenant with respect to the condemnation of all or any portion of the Premises.
HOLDOVER. In the event Tenant maintains possession of the Premises after the end of the Term (“Holdover”), Tenant will continue to pay Rent to Landlord at a rate equal to one hundred and twenty percent (120%) of the most recent Rent amount preceding the Holdover. Such Holdover shall be considered a month-to-month tenancy subject to the same terms and conditions as provided herein other than the Term.
INSPECTION. Landlord shall have the right at all reasonable times, with twenty-four (24) hours’ advance written or verbal notice to Tenant, to enter the Premises to inspect the same, to make repairs or replacements as may be required or permitted by this Sublease, or for showing the Premises to prospective purchaser or tenants; provided, however, that Landlord shall use reasonable effort not to disturb Tenant’s use and occupancy of the Premises. In the event of an emergency, Landlord may enter the Premises without advance notice to Tenant. During the final 90 days of the Sublease Term, and during any month-to-month tenancy, Landlord may exhibit the Premises for lease to prospective tenants and may post “for rent” signs.
INDEMNIFICATION.
Tenant’s Indemnification. Tenant shall defend, indemnify, and hold Landlord harmless from and against any and all claims, demands, liabilities, damages, costs, or expenses, including reasonable attorney fees (collectively “Losses”), arising from the possession, use or misuse of the Premises by Tenant or its employees or invitees, except to the extent any Losses arise from Landlord’s grossly negligent acts or omissions. Tenant, as a material part of the consideration to Landlord, hereby assumes all risk of damage to its property or injury to persons in, upon or about the Premises from any cause, and Tenant hereby waives all claims in respect thereof against Landlord, except only those caused by Landlord's gross negligence.
Landlord’s Indemnification. Landlord shall defend, indemnify, and hold Tenant harmless from and against any and all Losses arising from the gross negligence of Landlord in or about the Premises, except to the extent any Losses arise from Tenant’s negligent acts or omissions.
LIENS. Tenant shall prevent any lien or obligation from being imposed upon the Premises as the result of its obligations or actions under this Sublease. Tenant agrees to pay and cause to be discharged any and all such liens for services rendered or materials furnished immediately after any liens occur or any such charges become due and payable. If Tenant fails to timely obtain the release and discharge of such liens, Landlord may, in its discretion (but without obligation to do so), obtain the release and discharge of such liens in a manner selected by Landlord. All sums paid by Landlord for the release of any lien, and all expenses (including reasonable attorney fees) incurred by Landlord in obtaining the release of any lien, together with interest at the rate of twelve percent (12%) per annum (or the maximum amount allowed by law, whichever is less), shall be payable by Tenant to Landlord on demand. Landlord may post on the Premises any notices it deems proper for the protection of itself and the Premises from liens.
SUBLETTING AND ASSIGNMENT. Tenant shall not assign, mortgage or encumber the Premises or this Sublease, nor sublet any part thereof, without the prior written consent of Landlord.
NOTICES. Notices under this Sublease will be valid when in writing and delivered personally or by nationally recognized overnight courier and, unless otherwise designated in writing, addressed to:
If to Landlord: SIMPLOT AB RETAIL, INC.
ATTN: LWAR
1099 West Front Street
Boise, ID 83702
If to Tenant: CITY OF SALINAS
ATTN: OFFICE OF THE CITY ATTORNEY
200 Lincoln Ave.
Salinas, CA 93901
CONFIDENTIALITY. Tenant understands and agrees that the terms of this Sublease are confidential in nature and that disclosure of these terms may jeopardize the Landlord’s business relationships with third parties. Therefore, Tenant agrees the terms of this Sublease shall remain strictly confidential and Tenant shall not use or disclose the terms herein, in whole or in part, to any third party without the prior written consent of Landlord. Tenant may disclose the terms of this Sublease (a) to its employees, accountants, tax advisors or attorneys who have a need to know and who have signed agreements with confidentiality obligations at least as restrictive as those provided herein, provided, however, Tenant shall be liable for any breach by said third parties, and (b) to the extent necessary to comply with applicable legal authorities.
MISCELLANEOUS.
Governing Law. This Sublease shall be interpreted and construed under the laws of the state in which the Premises is located.
Dispute Resolution. In the event a dispute arises under this Sublease, the Parties agree that the dispute shall first be resolved in an amicable, professional, and expeditious manner. If a resolution to a dispute cannot be resolved informally, the Parties agree to submit to litigation in a court of competent jurisdiction.
Waiver of Jury Trial. TO THE MAXIMUM EXTENT PERMITTED UNDER APPLICABLE LAW, THE PARTIES HEREBY KNOWINGLY, VOLUNTARILY, INTENTIONALLY, AND WITH BENEFIT OF COUNSEL WAIVE ANY RIGHT TO DEMAND OR OBTAIN A TRIAL BY JURY IN ANY ACTION, CASE, OR PROCEEDING ARISING FROM OR RELATED TO THIS SUBLEASE. THE SCOPE OF THIS WAIVER IS INTENDED TO ENCOMPASS ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS SUBLEASE, INCLUDING WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS.
Binding Effect. The provisions of this Sublease shall apply to, bind and inure to the benefit of Landlord and Tenant, and their respective successors, legal representatives and permitted assigns.
Modification. This Sublease may not be modified or altered unless in writing and signed by both Parties.
Survival. The representations, warranties, covenants, liability, indemnification, and other obligations of each Party, that, in order to give proper effect to its intent, should survive, shall survive expiration or termination.
Severability. If any provision of this Sublease is held illegal or unenforceable in a judicial proceeding, such provision shall be severed and shall be inoperative, and, provided that the fundamental terms and conditions of this Sublease remain legal and enforceable, the remainder of this Sublease shall remain operative and binding to the fullest extent permitted by law.
Real Estate Brokers. Each Party represents and warrants to the other that no real estate brokers have been retained or consulted in this transaction, and that it will indemnify, defend and hold harmless the other Party from and against any claim for any finder's or brokerage fees or commissions or other compensation asserted by any person, firm or corporation, retained by the Party making this representation and warranty, in connection with this Sublease.
Recording. A memorandum of this Sublease may be recorded only with Landlord’s prior written consent.
Counterparts. This Sublease may be executed in counterparts, each of which, whether an original or delivered by facsimile or electronically (including e-mail), shall be deemed an original, and all of which taken together, shall constitute one and the same.
Entire Agreement. This Sublease sets forth all the covenants, promises, agreements, conditions and understandings between Landlord and Tenant concerning the Premises or matters relating thereto, and there are no covenants, promises, agreements, conditions or understandings, either oral or written, between them other than as herein set forth.
Attorney Fees. If Tenant or Landlord shall bring any action for any relief against the other, declaratory or otherwise, arising out of this Sublease, the losing party shall pay the prevailing party a reasonable sum for attorney's fees as may be awarded by the court.
IN WITNESS WHEREOF, the Parties have executed this Sublease as evidenced by the signatures of their authorized representatives below.
LANDLORD: TENANT:
SIMPLOT AB RETAIL, INC. CITY OF SALINAS
By: ________________________________ ______________________________________ Name: ________________________________ Kimbley Craig, Mayor Title: ________________________________
Date: ________________________________ APPROVED AS TO FORM :
______________________________________
Christopher A. Callihan, City Attorney
ATTEST :
_______________________________________
Patricia M. Barajas, City Clerk
____________________
Date
Exhibit A
Premises Description
801 Abbott Street, Salinas City, Monterey County, California Exhibit B
Master Lease Agreement
(See Attached)
113552.0057\156645524.1
Sublease Agreement 1 of 10
113552.0057\156645524.1