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Document Date: 10/24/2007
Document Type: Resolution
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Keywords(no more than 4): Picchetti Winery Lease
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Document No. 07-24
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RESOLUTION NO.-0:7-24
RESOLUTION OF THE BOARD OF DIRECTORS OF THE
MIDPENINSULA REGIONAL OPEN SPACE DISTRICT
APPROVING THE LEASE AGREEMENT WITH PICCHETTI WINERY, INC.,
A CALIFORNIA CORPORATION
(PICCHETTI RANCH OPEN SPACE PRESERVE)
The Board of Directors of the Midpeninsula Regional Open Space District does
resolve as follows:
Section One. The District may, under the provisions of Sections 5540 and 5563 of the
Public Resources Code, lease property owned by the District for a period of up to twenty-five
(25) years, and the Board of Directors finds that the premises to be leased for Historic
Preservation and Winery Operations is compatible with park and open space purposes and
considers the lease of such premises is in the public interest on the terms hereinafter set forth.
Section Two. The Board of Directors of the Midpeninsula Regional Open Space District
does hereby approve the Lease Agreement between the Midpeninsula Regional Open Space
District and Picchetti Winery, Inc., a copy of which is attached hereto and by reference made a
part hereof, and does hereby authorize the President of the Board of Directors or other
appropriate officer to execute said Lease Agreement on behalf of the District.
Section Three. The General Manager and General Counsel are authorized to approve
any technical revisions to the attached Lease Agreement and other related documents which do
not involve any material change to any term of the Agreement or other related documents, which
are necessary and appropriate for the implementation of this Lease Agreement.
Section Four. The General Manager of the District shall be authorized to approve any
Lease Agreement Extensions and report the Board of Directors at the following Board meeting.
The General Manager or the General Manager's designee is authorized to approve expenditures
of Improvements to the Historic Structures in accordance with the General Manager's spending
authority. The General Manager or the General Manager's designee is further authorized to sign
and approve all other documents necessary or appropriate to entering into the Lease Agreement.
RESOLUTION NO. 07- 94
PASSED AND ADOPTED by the Board of Directors of the Midpeninsula Regional Open Space
District on October 24, 2007 at a Regular and Special Meeting thereof, by the following vote:
AYES: Jed Cyr, Mary Davey, Nonette Hanko, Larry Hassett, Curt Riffle, Ken Nitz
NOES: None
ABSTAIN: None
ABSENT: Pete Siemens
ATTEST: APPROVED:
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l'VLG��c.�y
Secretary P ident
Board of Directors oard of Directors
I, the District Clerk of the Midpeninsula Regional Open Space District, hereby certify that
the above is a true and correct copy of a resolution duly adopted by the Board of Directors of
the Midpeninsula Regional Open Space District by the above vote at a meeting thereof duly
held and called on the above day.
District C
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Regional Open Space
MIDPEN|NSULA REGIONAL OPEN SPACE DISTRICT '
LEASE AGREEMENT |
Historic Picchetti Winery
1. EXHIBITS .......................................................................................................................... 2
2. PARTIES ............................................................................................................................ 3
3. PREMISES ......................................................................................................................... 3 .
4. TERM .................................................................................................................................4
5. RENT.................................................................................................................................. 5 |
� 0. USES................................................................................................................................... 6
7. LIABILITY INSURANCE-----.—.—.—.----_—..--.--,.,-----.--..._.. l1
8. FIRE .—..—.--.—.---.—..------ }l |
~`~~^��'C~ '--^—''—~^'—'—'—'—'''.—.''.' |
9. INDEMNIFICATION--.—.—.---,.—.----._.—...._..—.-----.---.-- l4
� 10. MANAGEMENT SERVICES...................................................................................... l4
� 18. CAPITAL RESERVE FUND....................................................................................... l5
12. IMPROVEMENTS AND ALTERATIONS—.—..—.--.—.—..-----.—.-----. l5
� 12. MAINTENANCE AND REPAIR................................................................................ l8
� 14[ UTILITIES.................................................................................................................... lg
15. OPERATION STANDARDS----.—.----.----------.---.-----.2U
16. HAZARDOUS MATERIALS....—.---..--.—.--..—.—.—.---.--.--.—.—.—.2l
87. TAXES, CHARGES, AND ASSESSMENTS..............................................................Z]
18L ASSIGNMENT AND SUBLETTING ----.—.-------..---.—.--.----24 �
89. EMINENT DOMAIN UC .—.---.—.--.—.---.------.—.25
20. RESTORATION AND SURRENDER QKr PREMISES..............................................25 �
21. DEFAULT....................................................................................................................26 �
22. GENERAL PROVISIONS ........................................................................................... 27
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This Lease(LEASE)is made by and between PICCHETTI WINERY, INC., a California
corporation(LESSEE), and the MIDPENINSULA REGIONAL OPEN SPACE District, a special
district of the State of California, (District), for the property known as the HISTORIC
PICCHETTI WINERY, as identified herein, on the terms, covenants, and conditions hereof.
RECITALS
WHEREAS District owns that certain real property commonly known as the Historic Picchetti
Winery ("PICCHETTI WINERY"), located within District's Picchetti Ranch Open Space
Preserve; and
WHEREAS, District desires to further its Mission and enhance the value of its open space lands
by providing for a visitor serving amenity at the PICCHETTI WINERY; and
WHEREAS, several of the historic structures at the PICCHETTI Winery are listed as significant
on the National Register of Historic Structures; and
WHEREAS the Winery, Stables and Blacksmith shop in particular have been partially
rehabilitated at public expense; and
WHEREAS LESSEE is in the business of producing, marketing and distributing fine wines; and
WHEREAS LESSEE has invested significant resources to promote and brand the Picchetti
Winery; and
WHEREAS LESSEE has provided these services since 1998 under District ownership of the
PICCHETTI WINERY property and such services have been a valuable visitor serving asset to
the District and the general public, and have provided enjoyment to the public and revenue to the
District; and
WHEREAS, LESSEE has operated under a twenty-five(25) year lease that commenced on
November 1, 1982 and expires on October 31, 2007; and
WHEREAS, District and LESSEE now wish to enter into a new lease agreement for the
PICCHETTI WINERY under the terms and conditions set out herein.
NOW THEREFORE THE PARTIES AGREE:
1. EXHIBITS
(A)Exhibit A: Map I — Location
Map 2—Site
(B)Exhibit B: Master Improvement and Implementation Site Plan ("Master Site Plan")
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2. PARTIES
District: Midpeninsula Regional Open Space District
330 Distel Circle
Los Altos, CA 94022-1404
Attn: General Manager
(650) 691-1200
(650) 691-0485 (facsimile)
LESSEE: Picchetti Winery, Inc.
13 100 Montebello Road
Cupertino, CA 95014
Attn: Ms. Leslie Pantling, President
(408) 741-1310
(408) 741-5213 (facsimile)
3. PREMISES
(A)Location. The Premises are within District's Picchetti Ranch Open Space Preserve and
are generally referred to as the "Historic Picchetti Winery". The general layout and
location of the Premises are depicted in Exhibit A, attached hereto and incorporated
herein.
(B)Historic Elements. The Premises include the historic homestead house and additional
significant structures and landscaping of the Picchetti family, early settlers in the Stevens
Creek area of the County of Santa Clara and pioneering valley vintners. Important
historic elements of the Premises include, as generally depicted and described in Exhibits
A and B, the Master Site Improvement and Implementation Plan ("Master Site Plan")
attached hereto and incorporated herein, without limitation, the following:
(C)Structures
(i) "Winery" (also known as the Tasting Room)
(ii) "Main House" (residential, also known as the Yellow House)
(iii) "Pressing and Fermentation Building" (winery operations)
(iv) "Garage" (LESSEE storage)
(v) "Wash House" (winery offices)
(vi) "Homestead House" (historic visual element)
(vii) "Blacksmith Shop" (winery bottling)
(viii) "Stables and Paddocks" (future historical display/LESSEE storage uses)
(ix) "Aviary" (visual element)
(x) "Chicken Coop" (visual element)
(xi) "Landscape elements", includes trees, waterways, picnic areas and the
preservation of both near and distant scenic vistas
(xii) 3 acres of vineyards, more or less("Vineyard")
(D)Utilities and Fixtures. Water systems, septic systems and two public restroorn facilities
as more fully described herein.
(E)Premises"As-Is"And Without Warranty. LESSEE currently occupies the Premises and
hereby acknowledges personal inspection of the Premises and the surrounding areas, and
accepts the Premises"as-is", without warranty of any kind. LESSEE agrees to make no
demands on District for any improvements or alterations to the Premises except as
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otherwise provided for herein. District offers no warranties for the condition of the
Premises, its buildings, soil, water, or utilities. LESSEE acknowledges that District has
made no representations, express or implied, about the Premises or its suitability for
LESSEE'S purposes. LESSEE accepts all aspects of the Premises, including, without
limitation:
(i) Any asbestos, PCBs, lead or other hazardous materials, as more fully defined
herein, in any structure, in the ground or in any ground water.
(ii) Zoning and any use restrictions that may be imposed by Santa Clara County.
(iii) Water availability or lack of availability
(iv) Existing and future ordinances, statutes, and regulations.
4. TERM
(A)Initial Term. The Initial Term of this Lease is ten(10) years, beginning at 12:00:01 A.M.
on November 1, 2007 (Commencement).
(B)Extension Terms. LESSEE may extend the Initial Term of this Lease for three (3)
periods of five (5) years each(Extension Terms) by giving District written notice
(Extension Notice)at least six(6)months, but not more than one year, before the end of
the then current Term. LESSEE may not exercise an Extension Term if LESSEE:
(i) Is in material default on the date the District receives the Extension Notice, or on
the date the Extension Term would otherwise begin.
(ii) Fails to reasonably satisfy District by meeting all the following performance
criteria measures:
(a) District's annual review of LESSEE's financial statements for overall
creditworthiness.
(b) Compliance with the District approved Master Site Plan(Exhibit B).
(c) Appropriate and ongoing recognition of District in advertising and signage.
(d) On-going satisfactory performance of the Management Services as more
particularly set out herein.
(e) District's reasonable determination that LESSEE is in sound financial condition
and is in compliance with the above identified criteria will be the basis for
approval or denial of LESSEE's exercise of each option. District will conduct
annual, on-site, inspections and a written report of that inspection shall be
provided to LESSEE within thirty days of such inspection.
(iii) LESSEE shall have the opportunity to correct any deficiencies in meeting the
performance criteria within a reasonable time following written notification.
(C)Term. Use of the word"Term" herein shall include the Initial Term and any exercised
Extension Terms, or portion thereof, unless otherwise specifically set forth.
(D)Termination by LESSEE. LESSEE may terminate this Lease at any time before the
expiration date of the Term, or of an Extension Term, by giving District written notice no
less than two-hundred-seventy (270) days before the voluntary termination date,
accompanied by a lease cancellation fee in the amount of$20,000.00 as liquidated
damages,the actual damages being difficult to determine and the parties agree that the
lease cancellation fee shall be the full and complete remedy of District for LESSEE's
early termination except as to other matters and remedies set forth herein as specifically
surviving such early termination. District shall promptly thereafter execute a release of
LESSEE from further obligations hereunder.
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(E)Termination by District. District may terminate this Lease for LESSEE'S default as
provided for in Section 21.
5. RENT
(A)Rent. Upon execution hereof, and thereafter on or before the first day of each calendar
month(Due Date), LESSEE shall pay Rent, as defined below, without demand, offset,
abatement, or deduction for any reason, except as may otherwise be specifically permitted
herein, in lawful money of the United States of America,to District at the address set
forth above.
(B)Initial Rent. LESSEE agrees to pay District Rent of$4,250.00 for each month of the first
year of the Initial Tenn.
(C)Annual Rent Adjustment. At the commencement of each of the second(2nd)through
ninth(9th) years of the Initial Term, LESSEE shall pay an adjusted monthly rent equal to
the then existing Rent, increased by the percentage increase (calculated to two decimal
places)reflected in the Consumer Price Index for All Urban Consumers(CPI-U), as
published by the United States Bureau of Labor Statistics, Washington, DC All Items,
San Jose-San Francisco-Oakland, 1982-1984=100 ("Index")] for the immediately
proceeding twelve month period, as measured by the latest available monthly calculation
of the annual rate, but in no event less than two percent(2%), or more than five percent
(5%), in any single adjustment. If the Index is discontinued or revised, 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.
(D)Extension Term Rent. Monthly Rent for any Extension Term shall be set by the annual
rental adjustment procedure set out above, with Rent for the first year of any such
Extension Term increased from the last year of the proceeding Term, and thereafter
adjusted annually in each of years two (2)through five (5)of such Extension Tenn.
(E) Liquidated Damages for Late Payments. The parties recognize that as time is of the
essence of this Lease, District will suffer financial losses if Rent is not received by the
Due Date. The parties further recognize the potential for delays, expense and difficulty
involved in proving District's actual losses in a legal proceeding. Accordingly, and
instead of requiring such proof of loss or damage, the parties agree, if District does not
receive payment within five (5) days of the Due Date, LESSEE shall pay, in addition to
the Rent due, liquidated damages in the amount of ten percent(10%) of the amount due,
or fifty dollars ($50.00), whichever is greater, together with ten percent(10%) interest
annualized commencing thirty(30) days following the Due Date in arrears, for all
amounts due for each such calendar day the Rent remains unpaid after Liquidated
Damages commence.
(F) No Waiver. Acceptance of any late charges shall not constitute a waiver of LESSEE'S
default. LESSEE'S obligation to pay the outstanding amounts of the Rent or Liquidated
Damages shall survive the end of this Lease regardless of any District right or remedy for
such nonpayment.
(G)Holdover. With prior written consent of District, exercisable at its sole discretion,
LESSEE may holdover, on a month-to-month basis, beyond the expiration of the Lease,
and only by tendering the Rent that would be due for the holdover period, calculated as if
the Lease Term had been extended. All other terms, conditions,restrictions and
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obligations of the Lease shall remain in full force and effect during any permitted
Holdover period.
(H)Security Deposit. During the Term of this Lease, including the Initial Term and
Extension Term(s) if applicable, District shall retain a Security Deposit of Five-Thousand
Dollars ($5,000.00).
(i) Application. District shall hold the Security Deposit without liability for interest
as security for LESSEE'S performance of LESSEE'S obligations under this Lease. It
is expressly understood that the Security Deposit shall not be considered an advance
payment of rent or a measure of District's damages in case of LESSEE'S default. If
LESSEE defaults on any obligation under this Lease, at District's option, District shall
provide LESSEE with written notice that District has elected to apply the Security
Deposit toward:
(a) Any Rent then due and owing, including Liquidated Damages due for late
payment; or
(b) Any other sums due for LESSEE'S damage to the Premises, or injury, expense, or
liability to District by such default without prejudice to any other remedy the
District may have.
(ii) Additions to Deposit. If the Security Deposit is used as cited above, LESSEE
shall pay District on demand the amount needed to restore the Security Deposit to its
original amount. District may require at any time that the security deposit be
increased in proportion to the amount that the Rent has increased during the Term.
(iii) Return or Transfer. At the end of this Lease, District shall return the balance of
the Security Deposit, if any, to LESSEE. If District transfers District's interest in the
Premises during the Lease Term, District may assign the Security Deposit to the
transferee and shall have no further liability for the return of the Security Deposit.
6. USES
(A)Purpose. District leases the Premises to LESSEE, and LESSEE leases the Premises from
District, only for purposes consistent with the uses described below and subject to the
provisions of this Lease. LESSEE shall at all times comply with all then current District
Regulations(Ordinance 93-1, as amended)unless otherwise specifically permitted herein.
(B)Winery Operation Use.
(i) LESSEE agrees to conduct operations only as permitted by the County of Santa
Clara under Zoning Ordinance Article 2, Wineries (Industrial), Limited, as now
enacted and as it may be amended hereafter, or by applicable successor regulations, in
a legal, safe and orderly manner.
Winery operations permitted hereunder are defined as use of the Premises for the
wholesale-oriented annual production of no more than 10,000 cases of wine,
including storage, bottling and distribution, related administrative offices and
functions, including on-site tasting, limited recreational yards and grounds, and retail
sales of wine and related or compatible products.
(iii) LESSEE shall use the Premises during the Term for the purpose of growing
grapes, making, storing, bottling,packaging, marketing, and distributing wine and
related products and providing for small group events of forty-nine (49) or fewer
people within the Winery (unless and until an expansion of visitor serving capacity is
duly approved by County and District) and the offering of winery related programs to
the public consistent with County ordinances and as set out in herein.
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(iv) LESSEE may reasonably restrict normal public access during the approximately
four weeks annually of high volume grape delivery, crushing and processing
activities,occurring generally between late August and the first week of November.
LESSEE shall be responsible for annually notifying District of the anticipated four(4)
week time frame for these high volume activities and the likely restrictions on normal
public access no less than two (2)weeks prior to such time period. LESSEE shall
post informational signs, subject to District's prior written approval, during any such
periods of restricted access to educate the public about the winery activities
necessitating the restrictions.
(C)Main House Residence Use. LESSEE expressly agrees during the Term of this Lease
that LESSEE will maintain as a Caretaker, an employee, who shall reside in the Main
House. To the extent permitted by law, LESSEE shall be the residential landlord for all
purposes under California law, including, but not limited to,the provisions of the Civil
Code. Any sublease or other rental agreement shall be subject to prior written approval
of District as set forth in Section 18(B) hereof. LESSEE shall be solely responsible for
setting and collecting any residential rents charged or for making such other arrangements
as may be appropriate under the circumstances. LESSEE shall be solely responsible for
maintaining the Main House in a habitable condition as defined under California law and
for making any necessary repairs in a timely and workmanlike manner. LESSEE or
Caretaker shall be available to respond to medical or other emergencies on the Premises
during regular business hours as part of the obligations of LESSEE hereunder.
(D)Vineyard Use. District and LESSEE agree to collaborate on a comprehensive Vineyard
Management Plan("Vineyard Plan") for the vineyard area of the Premises during the first
five years of the Term. Development of the Vineyard Plan will include study,evaluation
and design of site-specific agricultural practices emphasizing sustainability and
preservation of historic vines, maintenance of the entirety of the site, including service
(access) roads, infrastructure such as fencing and water systems, erosion control
practices, water quality and stream protection and disease prevention and control.
Additional planting of appropriate vines may be incorporated into the Vineyard Plan.
Normal vineyard management practices, including without limitation and except as
otherwise set forth herein,pruning, fertilizing, mowing, spraying, mulching, composting,
irrigating and removal of dead vines, are permitted activities, subject only to prior
notification of District and compliance with all applicable permits and regulations for the
burning of clippings in the Vineyard. LESSEE shall notify District whenever sufficient
quantities of material are ready for burning and shall coordinate any burning with
District. The Vineyard Plan shall also include elements to facilitate public viewing
opportunities and the provision of educational signage consistent with LESSEE's
operational requirements.
(E)Proposed Other Uses. LESSEE shall request prior written approval from District, for any
Use of the Premises not specifically allowed herein, no less than thirty (30) days prior to
the date desired for implementation of such proposed additional Use of the Premises.
District, in District's sole discretion, may authorize additional Uses of the Premises. Any
such authorization shall be valid only when in writing, and made prior to LESSEE's
beginning such additional Use.
(F) Special Use Permits. LESSEE shall submit an application for a District Special Use
Permit for any special event or activity that is either conducted on the Preserve outside
the Lease Premises, or that impacts general public open space activities, including
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parking spaces required to be kept available for Preserve visitors, as well as impacts
beyond the boundaries of the Premises to other areas of the Preserve. If District issues
the requested Permit, LESSEE shall comply with all terms and conditions of the Special
Use Permit.
(G)Expansion of Permitted Facilities. LESSEE and District agree that some expansion of the
capacity of the visitor serving portions of the Historic Picchetti Winery is in their mutual
best interest and hereby agree to fully cooperate in the planning, design and permitting of
future site improvements provided that such improvements do not negatively impact the
historic character of the Premises or surrounding natural resources of the Preserve, are
consistent with the Mission of the District, its purposes in providing Picchetti Ranch as a
visitor serving public amenity, and are developed with reasonable regard for the needs of
LESSEE's business operations. LESSEE shall be responsible for all construction
activities and costs, subject to the provisions of this Lease, or as such matters otherwise
may be hereafter separately negotiated, mutually agreed to, and memorialized by a
written Lease amendment hereto, duly made and executed by the parties. In no event
shall any such permitted expansion be designed for or permitted to exceed a capacity of
100 people in the Winery.
(H)Public Use and Access. LESSEE and District acknowledge and agree that public access
to the historic resources is mutually beneficial and in furtherance of the purposes of this
Lease. Unless otherwise specifically restricted by provisions of this Lease, or permitted
by prior written approval of District, all historic structures will be made accessible and
open to the public to the maximum extent feasible consistent with the provisions of this
Lease. In this regard, LESSEE and District will work together to increase the extent of
visitor serving destinations on the Premises with particular emphasis on structures
rehabilitated by public investment and conducive to displays of appropriate artifacts and
interpretive materials. Access consistent with the requirements of the Americans with
Disabilities Act(ADA) shall be a guiding principle in developing additional public access
areas.
(1) District Use.
(i) District reserves the use of, and LESSEE agrees to provide, no less than ten (10)
parking spaces for use by the general public within the Preserve parking area to be
available at all times.
(ii) District reserves the right to conduct a maximum of six (6)one-day open houses
or docent tours each calendar year as set forth herein. District also reserves the right
to utilize the Premises (including the Main House at least once a year) for a maximum
of eight(8) calendar days per year(District Use), limited to a maximum of four(4)
two-day weekends or eight(8)weekdays, with reserved weekends and weekdays not
necessarily consecutive. District shall request dates for such District Uses at least
sixty (60)days in advance of the proposed District Use and shall reasonably
coordinate any such tours with LESSEE. LESSEE shall approve District's request
unless LESSEE can reasonably demonstrate that the Premises have been booked, with
a deposit received,prior to the District's request. If District's request is made less than
sixty(60)days in advance of the proposed date for District's Use, LESSEE shall
provide District with list of available dates and LESSEE shall make the Premises
available for District Use any time there is no scheduled activity or booked event.
District's Use shall not be subject to LESSEE's customary rental fees or charges, and
District has the option of contracting with LESSEE for event services, or may bring in
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outside vendors. District agrees to indemnify, defend and hold LESSEE harmless
from any claim, loss, damage, liability and expense (including reasonable attorney's
fees)that LESSEE may incur or suffer to the extent such claim, loss, damage, liability
or expense arises out of the District's Use of the Premises as provided above.
(iii) Notwithstanding the foregoing, District shall not schedule a use permitted by this
section during the periods of high volume winery activities described in Section 6 (B)
(iv).
(J) Prohibited and Restricted Uses:
(i) Natural and Historic Resources. LESSEE shall cut no timber, conduct no mining
operations, remove no sand, gravel, or similar substances from the ground, commit no
waste of any kind, nor in any manner substantially change the contour or condition of
the Premises, except as may be authorized under this Lease. LESSEE shall not
import,plant, or install any soil, sand, gravel or other ground cover without District's
prior written approval. Except to the extent that it is beyond the reasonable control of
Lessee, LESSEE shall not intentionally or negligently permit the import of any
invasive species (generally defined as "non-native animal or plant species that take
over large areas and reduce biodiversity" and as identified by the California Invasive
Plant Council) without prior written approval of District. LESSEE shall not bring
straw or hay bales (or similar materials) onto the Premises unless such bales are
certified weed-free. LESSEE shall remove fallen or dead timber as required for
safety or aesthetic reasons and dispose of it or use it in any legal manner.
(ii) Permanent Residences. Except as specifically provided above, LESSEE shall not
permit any person to use any structure or facility on the Premises for a permanent,
full-time residence, or as a temporary residence without the express written, and sole
discretionary consent, of the District.
(iii) Water Pollution. There are multiple waterways on or near the Premises, including
both ephemeral and intermittent courses that together constitute a significant natural
resource of the Premises. LESSEE will, at all times, respect the restrictions on use
and access in the buffer areas along waterways as depicted on the Master Site Plan.
LESSEE shall at all times exercise due care for the protection of all such water
courses, including but not limited to, prohibiting human and domestic animal
intrusions. LESSEE shall not intentionally or negligently discharge or permit the
discharge of any substances, which will contaminate streams or other bodies of water,
or otherwise become a public nuisance. All applicable laws, regulations, conditions,
or instructions, now in effect or as and when prescribed by a federal, state or local
government with jurisdiction are a condition of this Lease. LESSEE shall comply
promptly with any regulations, conditions, or instructions affecting the activity
authorized if and when issued by the federal, state, interstate or local government
water pollution control agency having jurisdiction to abate or prevent water pollution.
(iv) Storage of Discarded Materials. LESSEE shall not store or accumulate discarded
equipment or materials for more than thirty (30)days. Pending disposal, such
material shall be stored out of the public's view. LESSEE shall not dispose of any
historic artifacts without prior written approval of District.
(v) Live Entertainment. LESSEE shall not host, market, promote or produce any live
music events or concerts on the Premises, provided that LESSEE shall be allowed to
have such live music as is incidental to permitted Uses. LESSEE shall not install,
use, or permit the installation or use on the Premises of any public address equipment,
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television equipment,juke-box, radio, loudspeaker, or any other equipment or device
producing noises that can be heard outside the Premises except by District Special
Permit.
(vi) Admission. LESSEE shall not charge or collect an "admission fee" for access to
the public areas of the Premises or for use of parking areas. Premises must remain
open to general public access during regular winery business hours except as
otherwise specified herein.
(vii) Smoking. No smoking is allowed on the Premises.
(viii) Dogs. Dogs are not permitted on the Premises, whether on leash or off except as
otherwise specifically provided for herein. Dogs may be left in vehicles in the
approved parking area of the Premises without such constituting a violation of this
provision. The Caretaker may keep a dog in and around the Main House subject to
the following restrictions: (1)the dog must be either on leash or within range of and
obedient to, voice commands at all times that it is not otherwise contained; (2)the dog
is not to be permitted in the Vineyard area or on areas of the Preserve outside the
Premises; and (3) permission to keep the dog is subject to revocation by District, in its
sole discretion, upon confirmation of a reasonable complaint about the dog, or due to
any other problem that is a result of the presence of the dog.
(ix) Bicycles. No bicycles may be used on the Premises. Any visitors arriving and
departing on bicycles shall be directed to at all time walk them while on the Premises
and to store them in District-approved designated storage areas.
(K)District Reservations for Patrol, Monitoring, Emergency Access and Display. District
reserves the right to enter the Premises at all reasonable times and with reasonable notice
for any purpose connected with District work, including monitoring Lease compliance
and health and safety inspections. District may enter to display the Premises to
prospective Lessees no sooner than six (6) months prior to Expiration of the Term or
following notice by LESSEE of an earlier termination. District shall have the right to
enter the Premises without notice at all times for any emergency. LESSEE shall provide
District with keys or combinations to entrances and doors on the Premises. LESSEE
shall provide District with new keys or combinations before any re-keying or changes of
such locks.
(L)Compliance with Laws. LESSEE shall not use the Premises or permit anything to be
done on, in or about the Premises which will in any way conflict with any law, statute,
ordinance or governmental rule or regulation now in force or hereinafter enacted or
promulgated, including without limitation, all building, plumbing, electrical, sanitary,
health, safety and similar codes. LESSEE shall, at its sole cost and expense, promptly
comply with all laws, statutes, ordinances and governmental rules, regulations and
requirements of any board of fire insurance underwriters or similar body now or hereafter
constituted relating to or affecting the condition, use or occupancy of the Premises. The
judgment of any court of competent jurisdiction or the admission of LESSEE,whether
District be a party thereto or not, that LESSEE has violated any law, statute, ordinance or
governmental rule, regulation or requirement, shall be conclusive of that fact as between
District and LESSEE.
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7. LIABILITY INSURANCE
During and throughout the Term of this Lease, LESSEE shall maintain in full force and effect the
following policies and insurance coverage with insurer(s) licensed to do business in California,
all at LESSEE'S sole cost and expense:
(A)Commercial General Liability Insurance coverage, using Insurance Services Office (ISO)
"Commercial General Liability"policy or policies Form CG 00 01, or the exact
equivalent, with a carrier acceptable to District, and limits of no less $5,000,000.00
general aggregate and no less than $1,000,000.00 per occurrence for all covered losses.
(B)Policies must include specific Liquor Liability coverage for alcohol sales, manufacture
and distribution with an aggregate limit of no less than$3,000,000.00 per occurrence.
(C)Business Automobile Liability coverage, including owned, non-owned and hired vehicles
in an amount of no less than $1,000,000.00 per occurrence.
(D)Defense costs must be payable in addition to policy limits.
(E)No cross liability exclusion for claims or suits by one insured against another.
(F) District must be named as an additional insured on each of the policies and each policy
must contain a provision that it may not be cancelled except following sixty (60) days
written notice to District as set out herein for notices. An authorized insurance agent or
broker must complete, execute and provide District with a Certificate of Insurance
(ACORD 25-5, or a successor or comparable form subject to prior approval by District)
naming District as an additional insured under such policy or polices before LESSEE
may engage in any activities pursuant to this Lease.
(G)All insurance coverage shall be endorsed to delete the subrogation condition to the
District, or must specifically allow the named insured to apply on a primary, non-
contributing basis, in relation to any other insurance or self-insurance available to District
and all policies will contain or be endorsed to contain such provisions.
(H)At the commencement of each Extension Term,the coverage amounts of insurance
required hereunder shall be adjusted by amount agreed upon by the parties which reflects,
at minimum an adjustment based on the CPI-U, generally as that calculation is set out in
Section 5(C)above, with adjustments for purposes of this paragraph calculated over the
number of years passing since either the Lease commencement or the prior adjustment, as
may be appropriate.
8. FIRE INSURANCE
(A)District shall, at its sole expense,obtain and maintain at all times during the Term, a
policy or policies providing adequate extended fire insurance coverage for the Premises.
District will pay all premiums when due for such coverage of the Premises and shall
submit to LESSEE an invoice for one half(V2) of the premiums paid annually for such
coverage. Within thirty (30)days of receipt of such invoice, LESSEE shall remit
reimbursement for such premium payments to District. District may, in its reasonable
discretion, elect to carry insurance coverage sufficient to "reproduce"historic structures
on the Premises rather than a lesser coverage to only"replace" such structures. LESSEE
shall pay for coverage as set forth herein whether or not District so elects.
(B)LESSEE shall fully cooperate with District and with all requirements of District's Insurer
in all aspects necessary to maintenance of such coverage, including without limitation,
ready access for scheduled inspections and primary responsibility for required warning
devices, such as smoke detectors and for emergency response provisions such as fire
extinguishers. If the Premises, or any portions thereof, are damaged or destroyed by fire
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or other covered casualty, District shall promptly make all claims, perform all acts and
provide all materials reasonably required by the Insurer for payment.
(C)The parties agree that the Winery,the Main House, the Pressing and Fermentation Barn,
and the Blacksmith Shop are essential components of the leasehold. As such, the parties
agree that it is their intent to use every reasonable effort to protect, maintain and repair
these structures. If the Winery is damaged by a covered event, the parties agree that the
Main House may be utilized for wine tasting and related retail during repairs or
rebuilding of the Winery. Any significant structural or visual modification of the Main
House to serve this purpose is subject to District review and approval as otherwise set
forth herein for proposed major and minor improvement projects, and shall be proposed
and subject to approval in light of the costs and feasibility of restoration when the
temporary commercial uses end. If the Main House is damaged beyond the reasonable
possibility of accurate restoration of that structure, the parties agree to confer in good
faith regarding the feasibility and appropriateness of constructing any reproduction or
replacement structure, taking into account the historic setting, including the structure's
size, Victorian-era style and its relationship to other visual elements of both the site and
the surrounding open space, the years remaining under the Lease Term (including
extensions), the parties' mutual interests in having a resident Caretaker, and the
availability and sources of sufficient funding for such purpose. If the Pressing and
Fermentation Barn or the Blacksmith Shop are damaged or destroyed, the parties agree
that replacement with buildings providing generally equivalent space and function will be
pursued subject to availability of insurance proceeds and any proposed contribution of the
parties, and to compliance with all applicable approvals,permits, site, and building codes.
(D)The parties agree that the Winery, Main House, Homestead House, and the Stables and
Paddock structures are important components of the historic setting and visual interest of
the Premises. It is therefore mutually agreed that historically accurate reproduction of
such structures is to be a material consideration in each parties' election to repair or
restore any damage or destruction and that, to the maximum extent feasible, the parties
will endeavor to restore or reproduce these structures with historical accuracy.
(E)Repair, replacement, reproduction or removal of the Homestead House, the Stables and
Paddock, the Garage, the Wash House, the Aviary, and the Chicken Coop, in the event of
damage or destruction and whether covered by insurance or not, shall be at the sole
discretion of District.
(F) Within thirty(30) days of the payment of insurance proceeds, LESSEE shall elect
whether or not to repair or replace a damaged or destroyed structure covered by the
provisions of Section 8(C). The provisions of this Lease relating to Major Improvements
shall apply. If LESSEE shall determine to repair or replace any structures covered by
available fire insurance, LESSEE shall submit comprehensive plans and specifications to
District for any restoration or repairs prior to commencing work, including application for
required County permits, within ninety (90)days of the payment of insurance proceeds.
If, in the parties' reasonable judgment, it is appropriate and desirable, in view of the
parties' investment in the damaged or destroyed structure(including the length of the
remaining Term),to make such restoration and repairs as proposed, and the same can be
reasonably completed within two (2)years in accordance with the laws and regulations of
the federal, State, County or other authorities with jurisdiction, this Lease shall remain in
full force and effect, and LESSEE shall immediately commence the repair or replacement
of such damage or loss, such that the Premises are restored or replaced to substantially the
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same condition as existed prior to such damage or destruction, or equal thereto. All of the
proceeds from said insurance policies, and all Assets of the Capital Reserve Fund as
hereinafter defined, shall be available to LESSEE for such purposes. If such proceeds
and Assets are insufficient, based on reasonable estimates by qualified professionals, to
complete the restoration or repairs according to LESSEE's proposal, LESSEE may
contribute such additional sums as are necessary to complete the restoration or repairs as
appropriate under Section 8(C)above. Should LESSEE elect to not contribute such
additional sums,the damage or destruction shall be treated as if it were not covered by
insurance under the provisions of Section 8(H) hereof.
(G)If LESSEE should determine not to repair and restore, then District shall, within sixty
(60) days of notice of such determination by LESSEE as provided for hereinabove, have
the right to determine whether to repair or restore the Premises. If the District determines
to proceed with repair and restoration of the Premises, all of the proceeds from said
insurance policies, and all assets of the Capital Reserve Fund as hereinafter defined, shall
be available to District for such'purposes, and, at the option of District, this Lease may be
terminated and all of LESSEE's rights in and to the Premises and the Lease shall cease if
so terminated. Other than the obligation to restore the Premises to the condition at Lease
Commencement, or as altered through permitted modification, LESSEE shall deliver to
District the Premises, and such Quitclaims and other documentation as is required by
Section 20 hereof. Upon such delivery LESSEE shall be relieved of all further
obligations and liabilities under this Lease except as to those matters otherwise expressly
surviving termination.
(H)If, during the Term,the Winery, Main House, Blacksmith Shop, or Pressing and
Fermentation Barn, are totally or partially destroyed by a risk not covered by insurance,
thus rendering the Premises totally or partially inaccessible or unusable for Lease
purposes, and if Fund Assets are insufficient to complete an appropriate restoration, as
generally set out in this Section, District may elect to terminate the Lease. If District
elects to terminate the Lease, LESSEE, within thirty (30) days after receiving District's
notice to terminate, may then elect to pay the amount by which the cost of restoration
exceeds the Assets available in the Fund in which case LESSEE shall restore the
Premises to the standards otherwise set out herein. If District elects to terminate this
Lease, and LESSEE does not elect to pay the cost of restoration as otherwise provided for
in this section, all of LESSEE's rights in and to the Premises and under the Lease shall
cease. Other than the obligation to restore the Premises(solely as to any such damaged
or destroyed structures) to the condition at Lease commencement, or as altered through
permitted modification, LESSEE shall deliver to District the Premises, and such
Quitclaims and other documentation as required by Section 20 hereof. Upon such
delivery LESSEE shall be relieved of all further obligations and liabilities under this
Lease except as to those matters otherwise expressly surviving termination. In the event
of termination under this Section, termination shall be the sole and absolute remedy for
each party.
(1) District and LESSEE hereby, respectively, release the other party, on behalf of
themselves and their respective insurers on policies of insurance required to be carried
hereunder, to the extent of insurance coverage of the releasing party, from any liability
for loss or damage caused by fire or any other of the extended coverage casualties
included in the releasing party's insurance policies, irrespective of the cause of such fire
or casualty.
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(J) LESSEE hereby waives the provisions of Sub-section 2 of Section 1932 and Sub-section
4 of Section 1933 of the California Civil Code.
9. INDEMNIFICATION
(A)LESSEE agrees to indemnify, hold harmless, defend, and protect District, its officers,
directors, agents and employees from any and all claims, losses, damages, demands,
liabilities, suits, costs, expenses (including all reasonable attorney's fees),penalties,
judgments or obligations whatsoever arising out of or in connection with any injury,
death, or damage to any person or property or pecuniary or monetary loss that results
from, arises out of, or in any way relates to the activities of LESSEE, including but not
limited to claims related to the presence, use or disposal of hazardous materials, except
for injury or damage resulting from the sole negligence or willful misconduct of District.
District shall indemnify, hold harmless, defend and protect LESSEE from any and all
claims, losses, damages, demands, liabilities, suits, costs, expenses(including all
reasonable attorney's fees), penalties,judgments or obligations arising from intentional or
negligent acts or omissions of District upon the Premises.
(B)In the event LESSEE becomes aware that a claim concerning the Lease or Premises has
been, or is likely to be, made against District, its officers, directors, agents or employees,
or LESSEE is named a co-defendant in any action, LESSEE shall immediately notify
District. LESSEE shall reimburse District for all legal expenses, including reasonable
attorney's fees, spent in representing District should a judge in a court of competent
jurisdiction adjudicate any such claim against LESSEE in favor of a third party and
relieving District of any liability therefore.
(C)In the event that a judge in a court of competent jurisdiction makes an apportionment of
liability between District and LESSEE, neither District nor LESSEE shall request that a
jury determine apportionment of liability. LESSEE shall indemnify and hold harmless
District as set forth above, unless the court determines that the injury or damage resulted
from the negligence or the intentional and willful misconduct of District in which event,
liability shall be apportioned as determined by the court or jury.
(D)To the maximum extent permitted by law, LESSEE hereby waives all claims and
recourse against District, including the right of contribution for loss or damage to
property, and hereby releases District from any and all liability related to or in any way
connected to LESSEE 's activities under the Lease or otherwise, or from LESSEE's use
of the Premises.
10. MANAGEMENT SERVICES
(A)LESSEE shall be responsible for unlocking and opening at sunrise, and closing and
locking one half hour after sunset,the Picchetti Ranch gates, seven days a week, 365 days
a year. Should LESSEE be unable, on an emergency basis, to meet this obligation,
LESSEE shall first notify District's Foothill Field Office by telephone at(650) 691-2165,
and by facsimile to (650) 988-9347, with a secondary notice to District's Administrative
Office at(650) 691-1200 and by facsimile to (650) 691-0485. If no personal contact is
made with a District employee at the Foothill Field Office, LESSEE shall notify
Mountain View Dispatch at(650) 968-4411 of the need for District response. For other
than emergency reasons, LESSEE may request District to cover gate operations only by
contacting District's Foothills Field Office no later than 72 hours in advance of the time
requested for such coverage. LESSEE may request this service of District no more often
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than once each calendar quarter. Changes to contact telephone numbers or procedures
may be made by providing notice to LESSEE as set forth herein.
(B)LESSEE shall be responsible for maintaining the public restrooms in a clean, functional
and sanitary condition, regularly stocked with appropriate restroom supplies.
(C)LESSEE shall be responsible for arranging for the regular removal of trash from the
Premises and shall not allow trash or debris to accumulate on the Premises.
(D)As otherwise set forth herein, LESSEE shall be responsible for maintaining and repairing
the building and grounds in a reasonably accurate historical condition.
(E)LESSEE shall be responsible for monitoring parking to assure safe and efficient use of
the authorized parking areas.
11. CAPITAL RESERVE FUND
(A)LESSEE shall establish an interest bearing account with a commercial bank, with
drawing rights requiring authorized signatures of both District and LESSEE, designated
"Historic Picchetti Winery Capital Reserve Fund" (Fund), and shall at all times maintain
adequate records for the Fund. Expenditures from the Fund are solely for capital
improvements to the historic structures on the Premises, as approved in advance by the
District. District shall reasonably approve expenditures from the Fund for all projects
that conform to the District's Mission and the "Improvements and Alterations" provisions
of this Lease.
(B)LESSEE shall contribute the sum of Five-Thousand Dollars ($5,000.00) yearly to the
Fund on or before the annual anniversary of the Commencement. District shall contribute
the sum of Five-Thousand Dollars ($5,000.00), within sixty(60)days following the most
recent anniversary of the Commencement. The Funds so contributed and held shall
constitute the"Fund Assets".
(C)No Fund projects shall start without District's prior written approval. Any unspent Fund
Assets at the end of the Lease or in case of default shall no longer be restricted to use for
the Premises and shall be paid to District as Additional Rent.
(D)To request approval for reimbursement from the Fund for project costs previously
approved and paid for by LESSEE, LESSEE shall submit all the following items:
(i) Copies of all invoices, payment records and time cards if reimbursement is for
LESSEE'S labor for the project.
(ii) Notice of completion for the project.
(iii) A summary of all project costs, including labor, materials, and costs for bonds,
insurance and overhead and profit, payments and final request for remaining unpaid
project costs.
12. IMPROVEMENTS AND ALTERATIONS
(A)LESSEE shall not make any capital improvements or alterations to the exterior or interior
appearance of any aspect of the Historic Resources, or additions to the Premises
(collectively, "LESSEE Improvement")without complying with the provisions of this
Section and without first obtaining the prior written approval of District. Should
LESSEE desire to propose such work, LESSEE shall notify District,timely and in writing
of such proposal, and District and LESSEE shall thereafter meet and confer in good faith
to develop an acceptable approach to address the identified purpose(s)to be served by the
proposed work. If the proposed LESSEE Improvement is approved by District, as
proposed or as modified, District AND LESSEE shall cooperate as co-applicants to the
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County of Santa Clara for any work that requires County approvals or permits to
authorize permanent change(s)to the Premises. LESSEE agrees that all costs in
complying with applicable laws, and obtaining any required permits or approvals, are the
sole responsibility of LESSEE. All LESSEE improvements to covered historic structures
must comply with the Secretary of the Interior's Standards for the Treatment of Historic
Structures and any applicable State of California, Santa Clara County or funding
mandates.
(B)District may, in its sole discretion, identify and apply for, or assist LESSEE in the
preparation and submission of applications for, grant opportunities to further repair or
rehabilitate portions of the Premises. To the extent such repairs or renovations constitute
a '*Minor*' Improvement as defined below, District may undertake all aspects of such
project provided that it does not unreasonably or permanently disrupt LESSEE's normal
operations. If an available grant is to be utilized for a "Major" Improvement as defined
below, LESSEE and District will collaborate to develop the project plans and
specifications, a project budget with each party's respective financial commitment,
reasonable construction timetables, and to identify permitting requirements and
responsibilities. LESSEE agrees to incorporate all reasonable requirements made as a
condition for receipt of the grant funding. LESSEE agrees that any grant funds so
obtained, unless otherwise restricted, shall be the property of District and shall only be
applied to the project as directed by District.
(C)Minor Improvements. For any LESSEE proposed Improvement on or to the Premises
costing less than $25,000.00 to complete, LESSEE shall submit to District for review and
approval under this Lease, not less than thirty (30) days prior to proposed commencement
date of the work, a reasonably detailed description of the work to be performed together
with documentation of the cost of completion. District shall require compliance with the
requirements of a "Major" Improvement, identified below, as District reasonably
determines necessary based on applicable regulations and the nature of the LESSEE
Improvement.
(D)Major Improvements. District and LESSEE have developed the Master Site Plan
(Exhibit B) to guide implementation of Major Improvement projects on the Premises.
For any proposed LESSEE Improvement on or to the Premises that is reasonably
anticipated to cost $25,000.00 or more to complete, or one which affects the exterior
appearance of a significant historic structure, LESSEE shall provide to District the
following:
(E) A specific Capital Improvement Project Plan ("Project Plan"), which shall show the
nature, extent, and sequence of the proposed LESSEE Improvements on the Premises.
The Project Plan shall include, at minimum, the following information and pages:
0) A scaled plan of the Premises showing the location of the existing site features
and including:
(ii) Surrounding land uses, ownerships and access to the Premises.
(iii) Plotting of existing vegetation, drainage and water features, utilities, and all
structures.
(iv) Roads, trails, parking, surfacing, and all other pertinent site circulation
information.
(v) A proposed overall amendment to the Master Site Plan of the Premises, using the
then current Master Site Plan as the basis, that depicts the location of existing and
proposed site features. The proposed amendment to the Master Site Plan must also
16
include a narrative portion describing the proposed improvements in greater detail
including discussion of how such improvements will be of benefit to both LESSEE
and District.
(F) LESSEE shall be responsible for all costs and expenses incurred by District in order to
comply with the requirements of the California Environmental Quality Act(CEQA),
including, but not limited to, preparation of all required environmental assessment
documentation associated with the proposed LESSEE Improvement.
(G)LESSEE shall comply with all District's then current contracting requirements relating
specifically to, but not thereby excluding any others that District may reasonably require,
insurance,performance bonds, labor and materials bonds, inspections and testing,
drawings, plans and specifications, quality of workmanship and materials, and all
construction standards, procedures and restrictions. LESSEE shall submit all proposed
contracts for LESSEE Improvements to District for prior written approval and shall not
execute any such contract until receipt of such District approval.
(H)All repairs, restoration or improvements to the covered structures shall comply with all
applicable Secretary of the Interior's Standards for the Treatment of Historic Structures,
and any State of California, Santa Clara County, or grant-mandated, standards.
(1) After District's written approval of the Capital Improvement Plan, LESSEE shall be
responsible for preparing detailed construction documents (Plans and Specifications) of
the proposed improvements on 24" x 36" plan sheets and provided electronically in both
its original format and as a Portable Document Format(".pdf') file(s). LESSEE shall
submit these documents to District before submission to the required permitting agencies.
LESSEE shall not formally request any regulatory permits until the District has
completed its review of the construction documents and provides written approval to
LESSEE to proceed with the permitting process (Construction Documents). District's
approval of the Construction Documents shall not constitute a waiver of any defect or any
condition of the Construction Documents.
(J) LESSEE shall be responsible for seeking approvals from, and adherence to, the
regulations of any permitting agency having jurisdiction over the Premises for the
installation of any improvements. Permits may include, but are not limited to, U. S.
Department of the Interior, U.S. Fish& Wildlife Service, U.S. Army Corps of Engineers,
California Department of Fish& Game, State Regional Water Quality Control Board,
Santa Clara Valley Water District, and Santa Clara County. LESSEE may not construct
any improvements until LESSEE obtains all of the necessary permits and provides
District with evidence of such approvals. District as landowner shall assist the LESSEE
with its applications for permits, if required, including executing documents for this
purpose. LESSEE shall pay any costs associated with gaining these agencies' approvals or
meeting their regulations. District will provide LESSEE with reasonable technical
assistance in the review of proposed permit applications.
(K)LESSEE shall be responsible for obtaining and delivering all water quality compliance
permits from the appropriate agencies to District before start of any construction. During
construction, LESSEE shall ensure that all of the requirements of the water quality
permits are met. LESSEE shall construct the improvements to minimize erosion and
water runoff into any waterways. LESSEE is responsible for taking any action required
by any federal, state, or regulatory agency to ensure water quality compliance.
LESSEE'S indemnification of the District shall include this obligation.
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(L)LESSEE shall use the services of a qualified consultant or knowledgeable resource
person to prepare the Capital Improvement Plan, Construction Documents, Permits, and
any other documents required for the LESSEE Improvement. For the purposes of this
section "qualified" shall include licensure in the applicable profession in the case of
architects or engineers, and a minimum of five (5) years experience with historic
structures, and, in the case of planners, appropriate planning certification. Architects and
engineers shall secure and provide the minimum insurance coverages set forth in this
Agreement. LESSEE shall obtain District's prior written approval of the qualifications of
the proposed consultant. LESSEE shall be solely responsible for the costs and expenses
of said services.
(M) No less than twenty (20) days before the Work is to commence, LESSEE shall
submit the following to District:
(i) County approved Construction Documents.
(ii) Name and address of proposed construction contractor(s) and evidence of
licensure for the proposed work, the construction contract(s) showing the proposed
scope of work, date work is to be commenced and time for completion of the work.
(iii) All required approvals and Permits for the construction from applicable
jurisdictions.
(iv) Evidence of all required insurance coverages and provisions.
(v) Labor and Materials Payment Bond and Performance Bonds for the full amount of
the work.
(vi) Certificates of Insurance naming District as an additional insured.
(vii) Evidence of financing sufficient for completion of the work.
(N)LESSEE shall allow, and include in any contract for construction, the requirement that
the contractor allow District's designated employee or agent to observe or inspect any
improvement project at District's expense.
(0)LESSEE and District shall establish reasonable restrictions on normal public access and
use during periods of construction on the Premises. LESSEE shall erect barricades
capable of separating construction areas from Preserve users.
(P) LESSEE shall be responsible for protecting District visitors, the Premises and adjacent
Preserve lands during construction.
(Q)LESSEE shall throughout the Term keep the Premises, and every part of it, free from any
liens arising out of any work performed, materials furnished or obligations incurred by
LESSEE. LESSEE shall not be in default under this Lease so long as it is contesting any
such lien with due diligence. LESSEE shall indemnify District for all expenses and costs
incurred by District arising from the lien, whether ultimately perfected or not.
(R)LESSEE agrees that all improvements made pursuant to this section shall become District
property at the end of the Lease, unless otherwise agreed in writing prior to District
approval of any construction.
13. MAINTENANCE AND REPAIR
(A)Condition of Premises. LESSEE shall keep and maintain all facilities, including without
limitation, the Winery, Main House, Pressing and Fermentation Barn, Garage, Wash
House, Homestead House, Blacksmith Shop, Stables, Aviary, and Chicken Coop, in good
and functional condition and repair so as to safely and effectively perform under this
Lease. All repairs must comply with applicable Secretary of the Interior's Standards for
the Treatment of Historic Structures and any State of California, Santa Clara County, or
18
grant-mandated standards. LESSEE shall endeavor to keep all facilities and grounds
clean and aesthetically pleasing at all times during the Term.
(B)LESSEE shall be solely responsible for maintenance and repair of all structures and the
grounds of the Premises consistent with this Lease, and except as otherwise specifically
set forth herein.
(C)Except as otherwise specifically set forth herein, LESSEE shall be solely responsible for
all Minor Improvements, including without limitation, costs, timeliness, completeness
and construction management, as herein defined and subject to District approvals as more
specifically set forth herein.
(D)LESSEE shall be solely responsible for all Major Improvements that are primarily for the
benefit of LESSEE's on-going winery operations and are of only incidental or peripheral
value to District's Mission, as determined in the District's reasonable discretion.
(E)LESSEE shall repaint all buildings and structures, which have painted surfaces, at least
once during the Term of the Lease in accordance with Site Plan.
(F) LESSEE shall maintain all paved, graveled and/or compacted areas of roadways and
parking lots on the following schedule, or more often if needed in the reasonable
determination of District:
(i) LESSEE shall make necessary or appropriate repairs(in and to areas with
potholes, rutting, depressions, root cracks, alligator cracking, etc.)annually before the
beginning of each winter season (October 15th).
(ii) LESSEE shall maintain all designated parking surfaces to a standard reasonably
acceptable to District.
(iii) LESSEE shall re-stripe, or otherwise refurbish, whatever parking space marking
system is utilized in the designated parking areas, at least once every year, or as
necessary to maintain clearly distinguishable parking spaces.
(G)Preventive Maintenance. LESSEE shall conduct preventive maintenance on a regular
schedule or as recommended by the manufacturer of the specific equipment.
(H)Capital Reserve Fund Limitation. Notwithstanding the foregoing, any expenditure for
repair or replacement of roofs, structural elements, foundations, exterior walls, or the
plumbing or electrical systems of any buildings or structures making up the Winery, Main
House, and/or Blacksmith Shop shall be made from, and be limited to, the Assets
available in the Fund and such contributions as the parties may voluntarily choose to
make. If such Assets and contributions (if any) are not sufficient to complete the
necessary repair or replacement, and the failure to perform such repair or replacement
would render the Premises unsuitable or inadequate for continued use as contemplated by
this Lease, the defective condition shall be deemed to be damage from a risk not covered
by insurance and the provisions of Section 8(H) shall apply.
14. UTILITIES
(A)Spring and Water Tank. Lease Premises includes a well, a spring, and two water tanks
(approximately 1600 gallons and 2500 gallons respectively), with associated pipelines
and an underground electrical system providing power for the well. LESSEE shall be
solely responsible for the maintenance, service and repair of this entire system. District
does not represent or warrant, in any regard, said system for the quantity or quality of the
water, including its potability, nor for the integrity or reliability of any of the elements.
(B)Septic System. Premises include three (3) septic systems with associated infrastructure
including leach fields as generally shown on the Master Site Plan. LESSEE shall be
19
solely responsible for the maintenance, service and repair of these systems and shall at all
times be in compliance with applicable health and safety laws, ordinances, regulations
and standards. Service shall include pump-out of the holding tanks not less than every
second year following Commencement. District does not represent or warrant, in any
regard, said systems for functionality or integrity.
(C)District shall not be liable for any damages resulting from any failure to furnish, or delay
in furnishing any utility service, including water and septic, when such failure or delay is
caused by any condition beyond district's reasonable control or occurs from the rationing
or other governmental restriction on any utility or resource serving the premises and
lessee waives all claims against district for any such failure. The rent obligation shall not
be changed because of such a failure. A temporary failure, defined as having a duration
of less than one week, to furnish any of the services shall not be considered or interpreted
as an eviction of lessee nor relieve lessee of any duty to fulfill any of the provisions of
this lease.
(D)Lessee shall contract directly with the appropriate utility for all water, gas, electricity,
telephone service, internet connection, garbage, and septic services, or other utility
furnished to or used by lessee at its sole cost and expense. Lessee shall indemnify and
hold harmless district from and against any charge for the installation, connection,
maintenance, and furnishing of all necessary utilities, meters and services. Lessee shall
provide for the extension of any utility service or distribution lines(water, gas, electricity,
telephone, internet, sewage, or otherwise)required to serve the premises at its sole cost
and expense, including the cost of under-grounding any of such utilities.
(E)Lessee shall comply with all government-mandated water and energy conservation
programs in fulfilling the obligations of this lease.
15. OPERATION STANDARDS
(A)Maintenance and Operation. LESSEE shall maintain and operate the facilities to ensure
public safety and enjoyment to the maximum extent feasible.
(B)Compliance with Laws. During the Term of this Lease, LESSEE shall comply with all
requirements of all federal, state, and municipal governments, agencies, courts,
commissions, boards, or any other body exercising authority over any aspect of the
Premises, including without limitation,the State of California Department of Forestry
(CalFire), for the operation of equipment to prevent fires. LESSEE acknowledges that
the County Fire Marshall has instructed LESSEE on minimum life safety requirements
necessary to conduct assemblies and activities in the historic structures.
(C)Agricultural Practices. LESSEE shall, to the maximum extent feasible, utilize integrated
pest management practices and sustainable agricultural practices in consultation with
District. LESSEE shall submit to District, the name of any pesticide and herbicide
proposed to be used on the Premises, for District's review and approval before applying
such substances on the Premises.
(D)Continuous Operation. Except as otherwise herein specifically provided for, LESSEE
agrees to continuously market and operate the Premises during the term of this Lease, and
hold them open to the public at the times and for the Uses set forth in Section 6 above. If
required by an approved LESSEE Improvement, District may provide LESSEE with prior
written authorization to temporarily close all or a portion of the Premises.
(E)Natural and Historic Resources. At all times LESSEE shall operate to provide, as a
priority, for the protection and preservation of the natural and historic resources located
20
on the Premises, including without limitation, structures, waterways, wetlands, native
wildlife and trees exceeding four inches diameter at breast height(4" dbh), and
topographic relief features, such as drainage swales and natural draws.
(F) Public Safety. LESSEE shall maintain and operate the facilities to afford the highest
practical degree of health, safety, and security for the public. LESSEE shall adhere to
minimum safety requirements as follows:
(G)LESSEE shall develop emergency preparedness procedures and post notices for
notification of fire, police, and public safety authorities.
(H)LESSEE shall provide and use adequate lighting, appropriate to the surrounding open
space resources (amber LED, LPS or other longer wavelength light source), and subject
to prior written District approval.
(1) LESSEE shall comply with the current edition of the Uniform Fire and Building Code
and requirements of the County Fire Marshal at its sole cost and expense.
(J) LESSEE shall comply with County Fire Prevention Operational Procedure guidelines
developed by the County.
(K)In the event of any accident or illness requiring emergency medical aid or treatment,
LESSEE shall use the "911"telephone system to summon assistance and promptly
thereafter notify District's Foothill Field Office by telephone at(650) 691-2165. If no
personal contact is made with a District employee at the Foothill Field Office, LESSEE
shall notify Mountain View Dispatch at(650) 968-4411 of the need for District response.
Changes to contact telephone numbers or procedures may be made by providing notice to
LESSEE as set forth herein.
(L)Personnel. All personnel of LESSEE on the Premises and acting within the scope of
LESSEE'S employment shall be generally clean and neat in appearance and shall be
instructed to be courteous at all times. No personnel employed on the Premises shall use
improper language, act in a loud, boisterous, or otherwise improper manner or be
permitted to solicit business not provided for in this Lease. LESSEE shall take proper
steps to prevent the occurrence or reoccurrence of acts of misconduct by any employee on
the Premises.
(M) Sign Approval. LESSEE shall secure District approval and shall fulfill District
sign standards for any signs to be placed on the Premises or anywhere else that refers to
the Premises consistent with District standards.
(N)Credit in Promotional Materials and Signs. LESSEE shall include the following, or
similar, recognition(consistent with District standards and subject to prior written
approval of District) in all promotional materials about LESSEE'S operations on the
Premises:
The "Historic Picchetti Winery" is a facility of the Midpeninsula Regional Open
Space District
The foregoing shall apply to signage or promotional materials created after the
Rent Commencement Date and shall not require LESSEE to change or replace
existing signage and promotional materials.
16. HAZARDOUS MATERIALS
(A)"Hazardous Materials" shall mean any hazardous or toxic substance, material, or waste,
which is or becomes regulated by any governing authority,e.g., local, State of California,
or United States governments. "Hazardous Materials" includes petroleum products and
21
byproducts, asbestos, polychlorinated biphenyls (PCB), and any material or substance
that is:
(i) Listed under Article 9 or defined as hazardous or extremely hazardous according
to Article 1, Title 22, California Administrative Code, Division 4, Chapter 20.
(ii) Defined as a"hazardous waster" according to Section 14 of the federal Resource
Conservation and Recovery Act, 42 U.S.C. §6901, et seq. (42 U.S.C. §6903).
(iii) Defined as a"hazardous substance"according to Section 10, Comprehensive
Environmental Response, Compensation and Liability Act, 42 U.S.C. §9601, et seq.
(42 U.S.C. 9601).
(iv) "Hazardous Materials Law" shall mean any statute, law,ordinance, or regulation
of any governmental body(including without limitation, the United States
Environmental Protection Agency,the California Regional Water Quality Control
Board, and the California Department of Toxic Substances Control) that regulates the
use, storage, release, or disposal of Hazardous Material.
(B)Hazardous Materials on Premises. Except as otherwise specifically provided herein,
LESSEE shall not permit any Hazardous Material to be generated, brought onto, used,
stored, or disposed of on the Premises by LESSEE, it agents, employees, contractors, sub-
lessees or invitees.
(i) LESSEE may permit limited quantities of standard janitorial, office, and
household supplies, which shall be stored in strict compliance with all applicable
environmental and safety laws.
(ii) LESSEE may bring onto, use in and store on the Premises such quantities of
agricultural chemicals or products as are reasonably appropriate for proper vineyard
management and are approved for such use by the California Department of Food and
Agriculture or successor agency. Such chemicals or other agricultural products shall
be applied according to all applicable regulations of the California Department of
Pesticide Regulation or successor agency.
(C)LESSEE Responsibility. LESSEE shall be solely responsible for all releases of
hazardous materials affecting the Premises from the date this Lease is executed except for
releases caused solely by District's actions or by a third party not connected to LESSEE
or to LESSEE's operations. LESSEE responsibilities include
(i) Notifying District in writing of-
(a) Any enforcement, cleanup, removal, or other governmental or regulatory actions
completed or threatened against LESSEE or the Premises according to any
applicable Hazardous Materials Laws.
(b) All claims made or threatened by any third party against LESSEE or the Premises
about damage, contribution, cost recovery, compensation, remediation, loss or
injury resulting from any Hazardous Materials.
(c) LESSEE's discovery of any Hazardous Materials on the Premises.
(d) LESSEE's discovery of any Hazardous Material on any adjoining property, which
LESSEE reasonably believes may affect the Premises.
(ii) Obtaining District's written approval to take any remedial action to respond to the
presence of any Hazardous Materials on the Premises (except for emergency
situations or as required by governmental agencies having jurisdiction), entering into
any settlement agreement, consent decree, or other compromise in any Hazardous
Materials claims.
22
(iii) After obtaining District's written approval, promptly taking any action necessary
at LESSEE's sole cost to investigate and remediate any contamination or
deterioration of water or soil resulting from the presence of Hazardous Materials at
levels established as greater than acceptable by any government agency having
jurisdiction over such contamination when the action would be required of the District
as owner of the Premises.
(iv) Ensuring that any handling,transportation, storage, treatment, disposal, or use of
Hazardous Materials on the Premises shall be carried out in compliance with all
applicable Hazardous Materials Laws and the provisions of this Lease.
(v) Ensuring that the Premises are in strict compliance with all Hazardous Materials
Laws at all times, including notification, record keeping and maintenance
requirements.
(D)Indemnity. LESSEE shall indemnify, defend upon demand with counsel reasonably
acceptable to District, and hold District harmless from any liabilities, losses, claims,
damages, lost profits, consequential damages, interest, penalties, fines, monetary
sanctions, attorneys' fees, experts' fees, court costs, remediation costs, investigation costs
and any other expenses which result in any way from any cause or source of Hazardous
Materials that LESSEE generated, brought onto, used, stored, or disposed of on the
Premises.
(E) Survival of Conditions. LESSEE's obligations under this Section shall survive the
expiration or other termination of this Lease. This Section establishes LESSEE's and
District's rights and obligations. If any inconsistency between this Section and any other
part of this Lease is found, the terms of this Section shall control.
(F) Notice. District and LESSEE shall each give written notice to the other as soon as
possible after discovery or receipt of knowledge of:
Any communication from any governmental authority about Hazardous Materials
that relates to the Premises.
(ii) Any contamination of the Premises by Hazardous Materials, which constitutes a
violation of any Hazardous Materials Law.
17. TAXES, CHARGES, AND ASSESSMENTS
(A)Obligation for Taxes. LESSEE agrees to pay any tax or charge which shall be levied,
imposed or assessed against LESSEE, LESSEE'S property, LESSEE'S interest in the
Premises or assets or for which LESSEE may become liable under the provisions of this
Lease before delinquency and without notice or demand. Any such payment made under
this Section shall not reduce the amount of the base or percentage rent or any other
monetary charge that LESSEE is required to pay to District under the provisions of this
Lease.
(B)Property or Possessory Interest Taxes. The terms of this Lease may result in the creation
of a taxable possessory interest. LESSEE shall be the party responsible for payment of
such possessory interest tax and shall timely pay all personal property taxes levied on
such interest. LESSEE shall pay, before delinquent, all taxes, assessments and fees
levied on LESSEE for the lease of the Premises or any interest in them, on any buildings,
structures, machines, appliances or other improvements, or on any interest in them, or by
reason of the business or other activities of the business in this Lease connected with the
Premises.
23
(C)Contest of Tax. If LESSEE wishes to contest or review, by appropriate legal or
administrative proceedings, any tax or other charge specified under the provisions of this
Section in good faith, LESSEE shall give District written notice of its intent to do so at
least ten(10)days before the delinquency of such tax or charge, or within the applicable
time period allowed by law. LESSEE may withhold payment of the tax being contested
only if nonpayment is allowed during the pendency of such proceedings without the
foreclosure of any tax lien or the imposition of any fine or penalty. The failure to pay any
tax or charge within ten (10) days of determination of the amount due and the expiration
of any appeal period shall constitute default, and the obligation to pay the same shall
survive the end of this Lease.
(D)Tax Indemnification. LESSEE agrees to indemnify and hold harmless District, the
Premises, and any improvements on the Premises from and against any liability, loss, or
damage resulting from such contest or proceeding or from any tax or charge required to
be paid by LESSEE, from any other sums imposed thereon, and from any proceedings to
enforce the collection of any tax or charge for which LESSEE may be liable.
18. ASSIGNMENT AND SUBLETTING
(A)Assignment by Lessee. LESSEE acknowledges that District has entered into this Lease
based on the qualifications and experience of Leslie Pantling. LESSEE shall not
voluntarily assign its interest in this Lease, without the District's prior written approval,
which consent may not be unreasonably withheld. District shall have the right to review
and approve any proposed assignment. Any proposed assignee must have an established
presence in the wine industry and must furnish copies of their two most recent years of
federal tax returns, a current Balance Sheet and a current Income Statement, for review
by District to be considered for such proposed assignment. Any dissolution, merger,
consolidation, or other reorganization of LESSEE, or the sale or other transfer of more
than fifty percent(50%) of the membership interests of LESSEE, or the sale of more than
fifty percent(50%) of the value of the assets of LESSEE shall be deemed a voluntary
assignment.
(B)Sublet by Lessee. LESSEE shall not sublet any part or all of the Premises without the
District 's prior written approval, which may not be unreasonably withheld for any
proposed subleasing that is consistent with the uses otherwise authorized hereunder. If
LESSEE requests subletting, LESSEE shall pay District's reasonable costs incurred in
evaluating such request, including, but not limited to, reasonable attorney's fees,whether
or not consent is ultimately given.
(C)LESSEE shall not voluntarily encumber its interest in this Lease, without District's prior
written approval, which may be withheld or given in District's reasonable discretion.
(D)Involuntary Assignment. No interest of LESSEE in this lease shall be assignable by
operation of law(except that the transfer of this Lease by testacy or intestacy shall be
considered a voluntary assignment). Each of the following acts shall be considered an
involuntary assignment:
(i) Bankruptcy. If LESSEE is or becomes bankrupt or insolvent, makes an
assignment for the benefit of creditors, or institutes a proceeding under the
Bankruptcy Act in which LESSEE is the bankrupt;
(ii) Partner's Bankruptcy. If LESSEE is a partnership or consists of more than one
person or entity, if any partner of the partnership or other person or entity is or
becomes bankrupt or insolvent, or makes an assignment for the benefit of creditors;
24
(iii) Writ. If a writ of attachment or execution is levied on this Lease;
(iv) Receiver. If, in any proceeding or action to which LESSEE is a party, a receiver
is appointed with authority to take possession of the Premises.
(v) Default and Cure. An involuntary assignment shall constitute a default by
LESSEE, and District shall have the right to elect to terminate this Lease, in which
case this Lease shall not be treated as an asset of LESSEE unless the involuntary
assignment is cured as follows:
(vi) Cure of Writ. If a writ of attachment or execution is levied on this Lease,
LESSEE shall have ten(10) days in which to cause the attachment or execution to be
removed.
(vii) Involuntary Proceeding. If any involuntary proceeding in bankruptcy is brought
against LESSEE, or if a receiver is appointed, LESSEE shall have sixty(60) days in
which to have the involuntary proceeding dismissed or the receiver removed.
(viii) Involuntary Assignment. Except as provided in(i) and(ii) above, LESSEE shall
have no right to cure any involuntary assignment.
19. EMINENT DOMAIN (CONDEMNATION)
(A)Effect of Condemnation on Leasehold. LESSEE shall have the right either to cancel this
Lease or to continue operations on the remainder of the Premises under this Lease's terms
if any public authority with power of eminent domain takes a sufficient part of the
Premises so as to materially interfere with and impair LESSEE'S operations on the
Premises. If such public authority takes any part of the Premises, this Lease shall end as
to the part taken without any right of recovery by LESSEE for such taking from the day
of possession. LESSEE shall pay all Lease Rent and fees due and owing up to that day.
(B)Condemnation Award. LESSEE's basis for damages against the condemning authority
shall be LESSEE's loss of its improvements, its leasehold estate, and any additional relief,
including loss of good will. If only one award is made to District as fee owner, the award
shall be divided between District and LESSEE by allocating to LESSEE the present value
of the remaining term of the leasehold estate, calculated by dividing the award by three
hundred(300) and multiplying that sum by the remaining number of full months under
the Lease and allocating such amount to LESSEE.
20. RESTORATION AND SURRENDER OF PREMISES
(A)Restoration. When the Lease ends for any reason, LESSEE shall vacate the Premises,
remove LESSEE's personal property, and repair any damage or injury to the Premises or
facility caused by LESSEE's operation or removal. LESSEE shall restore the Premises to
the same condition as when LESSEE took possession or as such may have been properly
and lawfully modified, or specifically excused, pursuant to the terms hereof, less
reasonable wear and tear. If LESSEE fails to remove said personal property within thirty
(30) days from termination, LESSEE shall be deemed to have abandoned the property not
so removed, at District's option. Said property shall become District's property without
compensation and District may cause it to be removed and sold or otherwise disposed of,
or may keep it for its own purposes and use. If LESSEE fails to timely and properly
restore the Premises as required herein, District may restore the Premises to the required
condition and LESSEE shall reimburse District for all costs related thereto.
(B)Surrender of Premises. No act by District, its elected officials, officers, agents, or
employees during the term granted shall be deemed an acceptance of a surrender of the
25
Premises, and no agreement to accept a surrender of the Premises shall be valid, unless it
is made in writing, addressed to LESSEE, and signed by District. Concurrent with
expiration or upon earlier termination, LESSEE shall execute a Quitclaim, in a form
reasonably acceptable to District, conveying all right, title and interest in the Lease, in the
Premises, including any fixtures the removal of which would cause significant damage or
destruction to the Premises unless LESSEE agrees to make repairs of any such damage or
destruction of the Premises to the reasonable satisfaction of District. Such conveyance
shall also quitclaim all personal property belonging to District and any personal property
intended by LESSEE to remain on the Premises, subject to the prior written acceptance of
such property by District. Thereafter LESSEE shall be relieved of all further obligations
hereunder except as to those matters specifically designated herein as surviving such
termination.
(C)Surrender of Name and Bonding Number. Upon expiration or any sooner termination of
this Lease, LESSEE shall surrender all right, title and interest LESSEE may have in the
"Picchetti"name and all "Picchetti"trade variants, and all rights of and to California
Bonded Winery Number 148.
(D)Waiver of Relocation Assistance. LESSEE, individually and for the business entity, and
for all persons and entities claiming any interest under this Lease, hereby waives and
forever relinquishes any right to claim or receive relocation assistance of any nature,
whether under federal or State law and except as to a condemnation award specifically
made to LESSEE.
21. DEFAULT
(A)Event of Default. Each of the following shall constitute an "event of default":
(i) Failure to pay any monetary obligations of LESSEE, including but not limited to
Rent, under this Lease and continuance of such failure for ten (10) days after
LESSEESs receipt of written notice specifying the non-payment.
(ii) Failure to maintain any insurance coverage as required herein
(iii) Use of water systems in violation of any conditions hereof.
(iv) Failure to comply with any requirements, procedures or restrictions of Sections
10, 12, and 13.
(v) Failure to comply with operational standards set forth in Section 15.
(vi) Voluntary or involuntary assignment of the Lease, or sublease without prior
written approval of District.
(vii) Failure to perform any other obligation under this Lease.
(viii) LESSEE's abandonment of the Premises for the time required for abandonment to
be legally recognized under California law.
(ix) The appointment of a receiver or custodian to take possession of substantially all
of LESSEE'S assets or of this Leasehold when this appointment is not withdrawn or
dismissed within sixty(60)days following such appointment.
(x) LESSEE becoming insolvent or declaring in writing that it is unwilling to pay its
debts as they become due, or the entry of any court decree or order directing the
winding up or liquidation of LESSEE (or substantially all of its assets), or LESSEE
taking any action toward the dissolution or winding up of its affairs of the end or
suspension of this use of the Premises.
26
(xi) Attachment, execution, or other judicial seizure of substantially all of LESSEE's
assets or this leasehold, which are not dismissed, bonded, or stayed within sixty(60)
days.
(B)Notice of Default. If LESSEE violates any of the conditions of this Lease, District shall
give LESSEE written notice of default, including as statement of the specific violation
and demand for correction. If LESSEE does not cure the default within thirty (30)days
(Cure Period), or commence to cure with diligent and good faith effort where the cure
cannot be completed within the Cure Period, District may terminate this Lease and pursue
all available remedies at law.
(C)District's Remedies for Default. District has the right to end this Lease and pursue all
lawful remedies if LESSEE does not correct a violation of the Lease or show reasonable
cause for not doing so within the Cure Period.
(D)LESSEE's Remedies for Default. If District defaults under this Lease, LESSEE shall give
District written notice requiring that District remedy the default. If District does not
remedy the default within sixty(60)days of such written notice, LESSEE may take
whatever action necessary to protect its interests. Such action may include LESSEE'S
cure of the default and right to reimbursement of such expenditure plus interest(at the
then current rate on District investment funds) from District within thirty(30) days after
sending District a statement of expenses or LESSEE may reduce Rent payments until
fully reimbursed.
(E)Liability for Breach. Termination for default shall not excuse LESSEE from any liability
for damages for breach of contract.
22. GENERAL PROVISIONS
(A)Attorney's Fees. If either party brings any action or proceeding in court to enforce any
provision of this Lease or for damages because of an alleged breach of any provision of
this Lease (except as may otherwise be specified herein), the prevailing party shall be
entitled to receive from the losing party the amount the court determines to be reasonable
attomey's fees for the prevailing party.
B Time. Time is of the essence to ever provision of this Lease to which time is a factor.
every
(C)Binding Effect. The terms, conditions and covenants of this Lease shall inure to the
benefit of, and bind the respective successors, assigns, heirs, and legal representatives of
the parties.
(D)Non-discrimination in Employment and Provision of Services. LESSEE shall not
intentionally discriminate against any person or persons as prohibited by federal or
California law, including in employment or use of facilities on the Premises, and
LESSEE shall indemnify and hold District harmless for any failure to so comply.
(E)Governing Law and Venue. This Lease shall in all respects be governed by and
construed consistent with California law and proper venue for all actions brought in
relation hereto shall be in the Superior Court in and for the County of Santa Clara.
(F) Entire Agreement. This Lease and any exhibits or addenda set forth all conditions and
understandings between District and LESSEE about the Premises. There are no
conditions or understandings, oral or written, between the parties other than those set
forth in the Lease.
(G)Changes. This Lease may be changed, waived, or added to, only by written amendment,
duly executed by an authorized person for each party charged with a responsibility, duty
or obligation contained therein.
27
(H)Notices. Communications relating to this Lease, to any subject, right or obligation arising
under it, or any other notice, demand, or request required or permitted hereunder, except
as to matters subject to the unlawful detainer statutes of California, shall be given in
writing at the addresses set forth in Section 2 hereof by any of the following means: (a)
personal service; (b)telephonic facsimile transmission; (c) nationally recognized
overnight commercial mail service; or(d) registered or certified, first class U.S. mail,
return receipt requested. Such addresses may be changed by notice given in the manner
provided herein. Any notice, demand or request sent pursuant to either clause(a) or(b),
above, shall be deemed received upon such personal service or upon dispatch by
electronic means (provided, however,that a dispatch by facsimile transmission that
occurs on any day other than a business day, or after 5:00 p.m. Pacific time, daylight or
standard time as the case may be, shall not be deemed received until 9:00 a.m. Pacific
time on the next business day). Any notice, demand, or request sent pursuant to clause
(c), above, shall be deemed received on the business day immediately following the day
of deposit with such commercial mail service prior to their last scheduled time for receipt
of mail for next-day delivery and, if sent pursuant to clause (d), above, shall be deemed
received ninety-six (96) hours following deposit in the U.S. mail. Any change in address
shall be sent by written notice to the other party and delivered according to this Section.
(1) Remedies Cumulative. All remedies conferred on District and LESSEE by this Lease and
by law shall be deemed cumulative. No one remedy shall be deemed to be exclusive of
the other, or of any other remedy conferred by this Lease, or by law.
(J) Severability. If any provision of this Lease or any specific application shall be deemed
invalid or unenforceable, the remainder of this Lease or the application of the provision in
other circumstances shall not be affected. Each provision of this Lease shall be valid and
enforceable to the fullest extent permitted by law.
(K)Any executed copy of this Agreement shall be deemed an original for all purposes. This
Agreement may be executed in counterparts, which counterparts shall together constitute
one agreement if signed by both parties.
(L)The language of this Agreement shall be construed as a whole according to its fair
meaning, and not strictly for or against either party.
M The captions used in this Agreement are for convenience only and shall not be
considered in the construction or interpretation of any provision hereof.
(N)When the context of this Agreement requires, the neuter gender includes the masculine,
the feminine, a partnership or corporation, trust or joint venture, the singular includes the
plural and the plural includes the singular.
(0)The terms"shall," "will" and "agree" are mandatory. The term "may" is permissive.
(P) When a party is required to do something by this Agreement, it shall do so at its sole cost
and expense without right to reimbursement from the other party unless specific provision
is made therefore. Where any party is obligated not to perform any act, such party is also
obligated to restrain any others within its control from performing such act, including its
agents, invitees, contractors, subcontractors and employees.
(Q)Text Prevails Over Headings. The captions and section headings appearing in this Lease
are included for convenience only and do not in any way limit or amplify the terms or
provisions of this Lease.
(R)Waiver. Waiver by District or LESSEE of any breach of any condition of this Lease shall
not be deemed to waive the same condition on a future occasion. District's acceptance of
Rent shall not be deemed a waiver of any preceding breach by LESSEE of any obligation
28
other than the failure of LESSEE to pay the Rent so accepted. No condition of this Lease
shall be waived by District or LESSEE, unless the waiver is in writing and signed by the
party making the waiver.
LESSEE and District, each by their execution below, agree to the terms of this Lease.
PICCHETT WINERY, C.
-a
By. G�✓ X-� Dated: V
Les] antling
President
MIDPENINS A IONAL OPEN SPACE DISTRICT
By:F' Dated: Q 2 T
Ke eth C. Nitz
esident
ATTEST: APPROVED AS TO FORM:
�p,�
By: — By: ���" '"(
Gregory Sam Susan M. Schectman
District Clerk General Counsel
29
Winery and Vineyard Lease Area
Picchetti Ranch Open Space Preserve
ello Ro
Picchetti Ranch
en S ace Preserve
Winery Complex
m/Tralf
Stevens
Creek
�i.• "' Reservoir
i�
s
Vineyard Area
Approx. 3 acres
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N
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Ste ens Creek
8 unty...Park
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Exhibit A.1 0 200 400 800
Produced by Midpeninsula Regional Open
Space District, September 2007 Feet
Picchetti Winery Lease Area
Master Site Improvement and Implementation Plan ("Site Plan")
eb
o�
oda
W shhouse
I>lul
S
31 Oardeh t
Im—
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Q` Pea Power role ut
c° ea •
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am yeA - G3
Vegetable
Garden
'Du ster �l>; Brick Oven
Blacksmith
Gi Gs Shop
Refuses Ir Refuse d
Area Area
Chicken Gi
Coop Lawn n
Culvert 104
yµi
Water —P ��/ Restrooms s
Bollard
to be Well Head _
installed I
Paddocks
046 Lawn 1-1
Water Tanks II01'1x es
o__
Picnic Area eo.
m
D
E
m
m ,
c
3
t
x
EA
Roads and Parking
Streams
' Structures ;J Major Trees
S Septic Tanks
Trails
co Leach Fields
Fences ■ Utilities
H Retaining Walls Disturbed Area Boundary
o �* Gates
a`
Exhibit A.2 0 50 100 200
Prepared by Midpeninsula Regional
Open Space District, September 2007 Feet
EXHIBIT B - MASTER IMPROVEMENT and IMPLEMENTATION SITE PLAN - Rev. Sept. 28, 2007
Picchetti Winery Premesis
i
Roads, Parking and Grounds schedule
Dh*id Planning
P• ri A &E iron. Design Im entatlon
NameReview
Required I
- Install a bollard sleeve and removable bollard on the inboard
Driveway side of Gate P104, in the center of the driveway;the intent of
Bollard Di the bollard is to prevent visitors and others from
Entrance Installation strict unintentionally and illegally driving through the secondary N-A N-A N-A By Mar-08
Gate P104 entrance to access the winery complex when the gate is
open.
Driveways Access Make necessary repairs to access roads including grading, Even numbered
and Access roads Tenant removal of ruts,addition of baserock,etc.,to maintain access Yes2 N-A N-A years or more, if
Road Repairs road in good condition necessary,during
the spring months
Parking Striping Tenant Yearly stripe parking area with chalk to delineate parking No N-A N-A Once a year after
spaces the rainy season
Construct refuse area enclosure in the southwestern corner of
Refuse Dumpster Tenant the parking;design to look rustic and blend with surrounding Yes2 N-A Jan-08- Apr-08-Jan-08
Enclosure historic area; relocate all refuse and recycle bins to this Mar-08
location.
Remove debris located within the creek drainage and within a
Cleanup and 15-foot buffer from the centerline of the drainage between the
Restoration Tenant water tanks and gate G1. Remove baserock,de-compact No N-A N-A Apr-08-Apr-09
ground,and re-vegetate disturbed areas located within 15-
Creek foot buffer on the winery complex side of creek.'
Demarcate a 15-foot buffer from centerline of drainage; Install Apr-08-
Protection District split-rail fencing as buffer line between protected culvert area N-A N-A Jun-08 Jul-08-Dec-08
and chicken coop area.
Page 1 of 4
EXHIBIT B - MASTER IMPROVEMENT and IMPLEMENTATION SITE PLAN - Rev. Sept. 28, 2007
Picchetti Winery Premesis
Site Cleanup and Storage Setwedule,
ReviewPlanning
•ftse I," rlp 100 ` &Environ. Design Implernentation
PANwinod "
Remove and properly store potential physical hazards and Within six months
reusable materials out of view and reach of the general
Cleanup Tenant N-A N-A N-A following execution
public. Dispose of all obsolete and out of service equipment
Homestead of new lease
House, and debris.
Blacksmith Storage All outside machinery and transport/storage containers to be
Shop, S Tenant covered with earthtone colored tarps when not in use. N-A N-A N-A Ongoing
Stables, Main
House Within six months
Storage Tenant No storage of damaged or out of service equipment, refuse or N-A N-A N-A following execution
junk of any kind permitted in these buildings.
of new lease
Below All green refuse to be either removed from site or chipped and
Blacksmith Cleanup Tenant distributed within 72 hours of accumulation/cutting as directed N-A N-A N-A Quarterly
Shop by District field staff.
Driveway
Temporary storage for damaged,servicable equipment;
Garage Storage Tenant longterm storage of supplies,operational equipment and N-A N-A N-A Ongoing
vehicles used exclusively for winery operations.
Clear brick oven area of stored material and equipment; Within six months
Homestead Cleanup Tenant maintain a 1-2 foot buffer clearance around the brick oven
House Storage and a Gear view of the brick oven for the public as seen from N-A N-A N-A following execution
the Homestead House interpretive sign.
of new lease
Blacksmith All pallettes to be stored out of view and reach of general Within six months
Shop Storage Tenant public. N-A N-A N-A following execution
of new lease
Maintain lease area premises clean and organized; remove unsightly equipment, supplies, and
• . material from public view or screen as appropriate, keep supplies and equipment well organized.
Make minor repairs as needed(e.g., repairs leaks, reinstall/tighten loose wood members; reattach
Sitewide hinges, repair picnic tables, repair and maintain irrigation lines,replace/repair damaged gates, Ongoing
clean ing/iinspecting septic tanks,etc.);All repairs to be aesthetically compatable with the historical
integrity of site and structures.
Page 2 of 4
EXHIBIT B - MASTER IMPROVEMENT and IMPLEMENTATION SITE PLAN - Rev. Sept. 28, 2007
Picchetti Winery Premesis
Site Restoration and Improvement Schedule
Prood �Review& Planning
At" ' Project Description &Environ. Design Implementation
NameApproval
Reaulred Review
Homestead Tenant
House, Reroof District Reroof structures Yes2 N-A N-A Expect need for
Blacksmith 50/50 new roof in 2015
Shop, Stables
Homestead
House, Exterior Tenant
Blacksmith Shop, Water District Water seal exterior of all currently clear-coated main buildings Yes2
Stables,Winery, Seal/Clear- 50/ i and decking. N-A N-A 2012 and 2017
Fermentation coat
Bldg.,Garage
Within six months
Repaint Tenant Repaint exterior of structure Yes2 N-A N-A following execution
of new lease
Wash House
Reroof Within six months
Gutters Tenant Reroof structure and replace all gutters and downspouts Yes2 N-A N-A following execution
of new lease
Reroof Paint Tenant Reroof and paint Yes2 N-A N-A 2009
Chicken Coop Replace planks and chicken wire sections that are in poor
Repair Tenant No N-A N-A 2009
condition
Aviary Reroof Paint Tenant Reroof and paint Yes2 N-A N-A 2012
Repaint Tenant Repaint structure No N-A N-A
White Fence Repair Tenant Repairs as necessary including replacement of rails, posts, No N-A N-A 2009
railin s to match existing fence
Relocate cleaning supplies into utility closet(some supplies Within six months
Restroom Utility Closet Tenant located in rear of restroom) No N-A N-A following execution
of new lease
Vineyard District During 1 st 5 years
Vineyard Management Tenant Develop vineyard management plan Yes Yes N-A
Plan of new lease
Page 3 of 4
EXHIBIT B - MASTER IMPROVEMENT and IMPLEMENTATION SITE PLAN - Rev. Sept. 28, 2007
Picchetti Winery Premesis
Signage Sctwdute
DROAd
Wing
Desadoom &Environ. Design Implementation
man A
LROQUIred
Restroom Restroom Tenant Reinstall restroom sign No N-A N-A N-A
Si n
District Supply tenant with"Authorized Personnel Only, No Public No N-A N-A By Jan-08
Authorized Entry"signs
Winery/ Personnel Post"Authorized Personnel Only, No Public Entry"signs at
Fermentation Sign Tenant key locations to keep the public away from closed areas. No N-A N-A As needed
Bldg.Area
Danger Remove"Danger: Restricted Area"signs posted to the north
Signs Tenant of the Homestead House and will replace with one No N-A N-A Jan-08
"Authorized Personnel Only, No Public Entry"
Private Work with tenant to place signs at key locations near Main
Main House Residence District House to discourage the public from accessing closed areas N-A N-A N-A Feb-08
Si ns and disturbing the caretaker
Tasting Add the following language: Wheelchair access to Winery
Winery Room sign Tenant available on right side of building,Ask for assistance No N-A N-A By end of 2008
Provide tenant with a"Private Driveway,Authorized Vehicles
Entry Private District Only"sign to be posted at the tenant driveway entrance to No N-A N-A by May-08
driveway Driveway discourage the general public from parking near the Main
Sign House
Tenant Install"Private Driveway,Authorized Vehicles Only" No N-A N-A By end of 2008
Allowable Di Work with tenant to develop an appropriate sign that outlines N-A May-08- Jul-08-
Winery Use sign strict accepted behavior within the winery complex Jun-08 Sep-08 Oct-08
1 District operations staff to assist with project at tenant's cost
2 All written District approvals include scope of work and materials
Page 4 of 4