Attachment 05LEASE PROVISIONS
LEASE AGREEJ\IENT
BETWEEi\
TOWN OF LOS GATOS
ANO
LOS GATOS MUSEUM ASSOCIAT IO N
TABLE OF CONTE!\TS
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1111.__ •
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1:1 l
I 'I... -------·-
I. PRE!\'IJ SES ........................................................................................................................ I
2. TER!\1 ................................................................................................................................. I
3 . RENT ................................................................................................................................. 2
4. (reserved) ........................................................................................................................... 3
5. USE OF PREMISES and OPERATING HOURS ......................................................... 3
6. H1\ZARDOUS l\'IATERl.>\LS .......................................................................................... 6
7. UTILITIES AND OPERA TING EXPENSES ................................................................ 8
8. TAXES ............................................................................................................................... 8
9. l\·IAINTENANCE .............................................................................................................. 9
10. TENANT l!\IPROVEMENTS ....................................................................................... 10
11. ALTER . .\TIONS BY LESSEE ....................................................................................... IO
12. HOLD HARMLESS/INDEMNIFICATIOK ............................................................... 11
13 . DAMAGE, DESTRUCTION AND TER!\llNATION ................................................. 11
14. SIGNS AND 1\1..\RKETING .......................................................................................... 15
15. ASSIGNMENT AND SUBLETTING ........................................................................... 16
16. DEFAULTS; R E!\'IEDIES .............................................................................................. 16
17. INTEREST ON PAST-DUE OBLIGATIONS .........................................................•... 18
18. HOLDING O\,.ER ........................................................................................................... 18
19. TO\\.'N'S ACCESS ......................................................................................................... 18
20. li\SUR . .\:'llCE ................................................................................................................... 19
21. RESER\'ED ..................................................................................................................... 19
22. DISPL'TE RES0Ll1TIO:\' ............................................................................................. 19
23. '.\iON-LJABILITY OF OFFICIALS AND E'.\IPLO\'EES OF THE TOWN ............ 20
{ A'J T "f •:','!-.'NT 5 .,rt. M ..... l ... ~ L._.!
Pago: r uf 11
24. NON-DISCRll\1llNIA TION ........................................................................................... 20
25. INDEPENDENT CONTRACTOR ................................................................................ 20
26. CONFLICT OF INTEREST .......................................................................................... 21
27. MEl\'IORANDUM OF LEASE ...................................................................................... 21
28. ESTOPPEL CERTIFICATE ......................................................................................... 21
29. LIENS .............................................................................................................................. 21
30. VACATING ..................................................................................................................... 21
31. ABANDONMENT .......................................................................................................... 21
32. NOTICES ........................................................................................................................ 22
33. TIME ................................................................................................................................ 22
34. AI\1ENDMENTS ............................................................................................................. 22
35. SIGNING AUTHORITY ................................................................................................ 22
36. CAPTIONS ...................................................................................................................... 23
37. SURRENDER OF LEASE NOT MERGER ................................................................ 23
38. INTEGRATED DOCUMEN'f ....................................................................................... 23
39. WAIVER .......................................................................................................................... 23
40. INTERPRET . .<\ TIONS .................................................................................................... 23
41. SEVERABILITY CLAUSE ........................................................................................... 23
42. GOVERNING LAW ....................................................................................................... 23
43. VENUE ............................................................................................................................. 24
44. COMPLIANCE WITH LAWS ...................................................................................... 24
45. BROKERS ....................................................................................................................... 24
46. ATTACHi\IENTS TO LEASE ...................................................................................... 24
EXHIBITS
A DESCRIPTION OF SUBJECT PREMISES .................................................................... 26
B LIST OF IMPROVEMENTS ............................................................................................. 27
C STANDARD INSURANCE REQUIREMENTS .............................................................. 28
Page ii o f i i
LEASE AGREEMENT
BETWEEN
TOWN OF LOS GATOS
AND
LOS GATOS l\JUSEUl\I ASSOCIATIO~
This lease agreement (herein "Lease") is made and entered into this __ day of . 2013.
b y and between the Town of Los Gatos. a Cali fomia municipal corporation (herein "Town") and Los
Gatos Museum Association. a California nonprofit corporation (herein "Lessee"). Town and Lessee
may be r eferred to individually as a ·'Party" or collectively as the "Parties" or the "Parties to this
Lease." The Town Manager serves as Contract Administrator for this Lease on hehalfofthe Town
Council .
In considerati o n of these recitals and the following cm·enants, terms, and conditions. Lessee and
Town mutually agree as follows:
LEASE PRO\'ISIONS
J. PREMISES.
Town hereby leases to Lessee, ce11ain real property located in the Town of Los Gat os. County of
Sant a Clara. State of Californ ia. commonly kno wn as I 06 East Mai n Street (herein the "P rem ises")
and more particularly described in Exhi bit A attached hereto and incorporated herein by reference.
The Premises consists of approximately eleven thousand six hundred and four ( 11 ,604) square foci of
space for museum exhibit s, Town offices, storage, educational lab. kitchen facilities. bathrooms. and
a deck . Lessee accepts the Premises "as-is" on the date of execution of this Lease.
2. TER!\I.
2.1 Original Term. The term of thi s Lease shall be fr)r ten (I 0) years plus the initial peri od
of Town construction and improvements to the Premises. as set forth in paragraph 2.5.
commencing o n July I. 20 13 and ending ten (I 0) years from th e Delivery Date. as defined
below ("Term"). Lessee sh all. at th e expiration o f the tem1 of this Lease. or upon its earlier
termination . surrender the Premises in as good condition as it is now a t the date of this lease.
The Parties expect reasonable wear and tear.
2.2 Option to Extend . Prov ided Lessee is not in default hereunder. either at the time of
exercise or at the tim e the ex tended tenn commen~es. Le ssee shall have th e opti on to extend
the initial tenn of thi s Lease for two (2) additional period s of fi\'e (5) years each ( .. Optio n
Periods"') with the same tenns, covenants and conditions prcn i<lcd herein . except that upon
such renewal the Base Rent due hereunder shal I he adjusted purs uant to Paragraph 3 .
Lessee's option shall be exercised hy L~ssee providing Town with request for an extension in
writing nu lt:ss than si xty { 60) days prior to the expiration of the then current tcnn.
1 Rt'\ .runt' 201 3
2 .3 Early Terminatio n bv Either Party. If Town in its sole discreti o n determines that it
requires the Premises for any public purpose, Town may terminate this Lea se upon ninety
(90) days written notice. The Lessee may terminate the lease upon 90 d a ys written n o tice
should the Museums of Los Gatos cease operations.
2.4 Expansion. Lessee shall have the first right of refusal on the adjacent space
currentl y occupied by the Friends of the Library. In the event that Friend s of the Library
vacates its retail space, Town shall enter int o negotiations with Museums of Los Gatos
for that space at the then current full marke t value for rent, unless the Town Council
agrees to negotiate other terms.
2.5 Delivery Date. The Town will undertake initial improvements to the Premises a s
detennined by the Town at its sole di scretion and complete such improvements no later
than April 30. 2014. At the completion of those improvements, the Town will establish a
Delivery Date of the Premis e s to the Les see which will be the comme ncement date for the
Tenn. and rent and m o netary obligations of thi s Lease. If the Town is unable to establish
a Deli very Date prior to April 30. 20 14 , Lessee shall have the option to terminate thi s
Lease .
3. RENT and MONETARY OBLIGATIONS.
3.1 Base Rent. The b ase rent shall be in the amount of Fair Market Rate (FMR) of$2.50 per
square foo t per month without deduction or offset based on 11 ,604 square feet, not including
the conference room. Town office space, and exterior decks as shown on Exhibit A or as
memorialized in an Addendum to Lease following the detennination regarding the actual
space needed for the new HVA C system, which shall occur prior to the De li very Date. For
the fi rst three (3) years after the Deli very Date, Lessee shall p ay no Base Rent fo r the
Prem ises. The FMR shall b e updated no less than once every ten (I 0) years and at each
Opt ion Period us ing a n appraisal m e thodo logy satisfactory to th e Parties .
3 .2 Annual Increase. During the Tenn of thi s Lease. including each Option Period if an
option is exercised, the Base Re nt shall be increased effective on each anniver sary o f t he
Delivery Date as follows:
(a) Years 1-3
(b) Year 4
'c) Years 5
(d) Year 6
Not Applicable, No Rent
1.2 5 % of FMR
Year 4 + 1.25% of FMR
Year 5 + 1.25 % ofFM R
Despite the foregoing, in no event s hall Base Rent shall exceed Two Thousand Dollars
($2,000) per month during the initial I 0 year period.
Prior to the extension o f the Lease under th e Option Perio d s of th is Leas e. if an opti on is
exercised. the T own reserves the right to rev iew the accounts and financ ial records o f tht.:
Lessee and open negotiatio ns for a po t enti a l increase in Base Rent.
2 Rev . Jun e ~O 13
3 .3 Payment Date/late Charge. Rent shall be payable on the first day of each and c\'cry
month commencing on the Delivery Date, at Los Gatos Town Hall, Finance Department. or a
place as may be designated in writing from time to time by Town. Lessee acknowledges late
payment of rent may cause Town to incur costs not contemplated by thi s Lease. the exact
amount of such costs being extremely difficult and impracticable to fix . Such costs include.
without limitation. processing. accounting and late charges that may be imposed on Town .
Therefore, if Town does not receive any installment ofrenl due from Lessee within ten (I 0)
days after the date such rent is due. Lessee shall pay t o Town an additional sum of five
percent (5%) of the overdue r ent as a late charge. The parties agree this late charge represent s
a fair and reasonable estimate of the costs Town will incur by reason of late payment by
Lessee. Acceptance of any late charge shall not consti tut e a wai\·cr of Lessee's default'' i th
respect to the overdue amount, nor pre\ ent Town from exercising any of the o ther right s and
remedies available to Town.
3.4 Pavment Procedures. Lessee's obligation to pay rent shall commence upon the
Delivery Date. If the tenn commences or tenninates on a date other than the first of any
month , monthly rent for the first and last month of this Lease shall be prorated based on a 30-
day month . Payments shall be effecti ve upon receipt. Town may apply any payment
received from Lessee at any time against any obligation due and owing by Lessee under thi s
Lease. regardless o f any statement appearing on or referred to in any remittance from Lessee
or any prior application of such payments.
3.5 Partial Payment. The rec eipt by Town of a partial payment of any amount due to
Town endorsed as payment in full will be deemed to be a partial payment only. Town may
accept and deposit sai d check without prejudice to its right to recover the balance . Any
endorsements or statements on the check or any letter accompanying the check shall not be
deemt:d an accord and/or satisfaction. Lessee's ob ligation (without prior notice or demand s )
to pay rent and all other amounts due hereunder shall be absolute and uncondi tion al. and not
s ubj ect to any abatement, set off, deft:nse, recoupment or reduction.
3 .6 Reimbursement fo r Downstairs Restroom Project. Lessee shall contribute 50% of the
costs of downstairs restroom improvements. but in no e\·ent more than the sum ofTwenty-
Eight Thousand Dollars ($28,000) for Lessee's s hare of the restroom project for the
Prem ises. Such Payment shall be made commencing on th e fourth anni\'ersary of the
Delivery Date and on e:ich anni,·crsary of the Delivery Date th1.:reafter at th e rate of Four
Thousand Dollars {$-l.000) per year until the entire s um has been paid to the Town.
-t . r reserved]
5 . l!SE OF PRE'.\IISES and OPER.\Tl'.\fC HOURS .
5 . I Required Uses. Throughout the tcnn of this Lease. Lessee shall pHwidc the follm\ ing
Re\ Junl· 2013
uses, services and activities ("Required Uses"):
5.1. l Uses consistent with Lessee's business purposes and approved through a
Conditional Use Pennit.
5 .1.2 4,335 square feet of space on the upper level and 7,260 square feet of space on
the lower level of the old Town of Los Gatos Library located at 106 E . Main Street. Los
Gatos, CA. as shown on Exhibit A or as memorialized in an Addendum to Lease following
determination regarding the space needed for the new HY AC system, which shall occur prior
to the Deli very Date.
5 .1.3 Meeting rooms for public use consistent with current purposes of the Museums
of Los Gatos and authorized under a Conditional Use Permit. In addition, the Town Council
Chambers may be reserved in accordance with Town po li c ies at cost.
5.1.4. Lessee shall apply to the Community Develo pment Department of the Town of
Los Gatos for a Condition Use Permit (CUP) or other appropriate planning permit to allow
the requested uses on the Premises. Lessee shall pay one-half ( 1 /2) of all fees to Town for a
CUP, but may pay one-quarter (I /4) the fee at the time of filing the initial application and
one-quarter (I /4) of the fee at completion of CUP process.
5 .2 Hours of Operations.
5 .2.1 Public Hours. The Premises shall be closed to the Public on Wednesdays until
I :00 P.M . Public hours shall not exceed Monday through Sunday from 11 :00 A.M . to 7:00
P .M. Additional evening hours are allowed for special events. receptions, and
Board/Committee meetings so long as no Town meeting or event is scheduled . Additional
morning hours are allowed for visits by school children when those school children are
transported by a bus or other vehicles that do not park in any of the Civic Center lots or on
the streets immediately adjacent to the Civic Center. The Premises shall be open to the
public a minimum of 25 hours per week, unle ss Lessee is in the process of changing exhibits.
5.2 .2 Schedule. Lessee shall submit a calendar in advance ofall scheduled events on
a quarterly basis to Town Manager in order to avoid conflicts with Town e vent s and
meetings.
5.2.3 Staff Hours. The Premises shall remain closed to the public. but a vailable for
use for up to ·five (5) staff members on Wednesdays prior to I :00 P.M .
5 .2.4 Special Events. Lessee shall be obligated to appl y for a Special Event Penni! in
accordance with Town rules and regulations and pa y all associated cos ts and tees for any
event that meets the criteria set fr>rth by T o wn Code. For th ose events that do not meet the
criteria requiring a Special Event Pcnnit, but d o impact parking at the Civic Center. Les see
shall coordinate with the Town Manager's office to avoid conflicts during business hours or
4 Rev. June 201 J
when Town C\'ents or meetings are scheduled.
5.3 Prohibited Uses . Lessee shall not use Premi ses for an y purpose not expressly permitted
hereunder. Lessee shall not create. cause. maintain or pennit any nuisance or waste in. on. or
about the Premises. o r pennit or allow the Premises to be used for any unlawful or immoral
purpose. Lessee shall not do or pennit to be d o ne anything in any manner which
unreasonably disturbs the users of the Town Property or the occupants of neighb o r ing
property. Specifically. and without li miting the above. Lessee agrees not to ca use any
unreasonable odor, noise. vibration. power emission , o r other item to emanate from the
Premises. No materials or articles of any nature shall be stored outside upon any portion of
the Premises. Lessee will not use Premises in a manner th at increases the risk of fire. cost of
fire insurance or impro\'emcnts thereon . No unreasonable s ign or placard shall be painterl
inscribed or placed in or on said Premises; and no tree or shrub thereon shall be destroyed or
removed ur other waste committed of said Premises. No bicycles, motorcycles. automobiles
or other mechanical means of transportation shall be placed o r stored anywhere on the
Premises. No repair, overhaul or modification of any motor vehicle shall take place on the
Premises or the street in front of said Premises. Lessee, at his/her expense, shall keep the
Premises in as good condition as it was at the beginning of the te1m s hereof, except damage
occasioned by ordinary wear and tear, and except damage to the roof. sidewalks and
underground plumbing. which is not the fault of Lessee.
5.4 Condition. Use of Premises. The Premises are currently being used for public purposes
including meetings. and the Premises may be available for use exclusively for the limited
purposes specified in Section 5.1. Town makes no warranty or representation regarding the
condition of the Premises and ha s not conducted any inspections pri or to leasing the
Premises . Town has agreed to deli ver the Premises with improvements specified in Exhibit
8.
5 .5 Parking. Lessee shall be o bligated to purchase Oli\'e Zone parking pcnnits annually from
Town for all Lessee employees and shared park ing permits for volunteers working 20 hours
or more during weekdays. Lessee's employees and volunteers will comply with the same
parking requirements consistent with Town employees. In no e' ent shall any buses or
oversized ve hicles associated with visitors to the Premises park in any of the Civic Center
lots or on the streets immediately adjacent to the Civic Center.
5.6 Coordination with Town. Lessee shall schedule. attend. and fu ll y rarticipate in quarterly
meetings with Town Manager and/or Manager's designee to address any and all conditions of
this Agreement or any other matter '"'hich arises in conjuncti on with the use of the Premises.
Lessee sha ll also be required to participate in Town Emergency Preparedness training and
exercises.
5 . 7 Use of Alcohol. Any use nf alcohol will be subject to appnn·al and conditions conta in<.!d
in any Conditional Use Pennit obtained by Museums of Los Gatos and. limitt:d to beer and
wine only. If any use of alcohol requires additional regulatory pennits, including an ABC
license. Lessee sha ll bi: responsible for obtai ning such permit . paying all associated costs.
Ki:' Ju ne ~O 13
and notifying Town in writing of receipt of such permit.
5.8 Deliveries. Any and all deliveries shall be made between the hours of8:00 a .m and 8:00
p.m . No deliveries shall occur on Wednesdays prior to I :00 p.m . In no event shall deli very
vehicles block access to the parking lot, parked vehicles, or Civic Center buildings .
5 .9 Conference Room. The conference room as shown on Exhibit A shall be made available
by Town to Lessee on a shared basis. Town shall have exclusive right to schedule the
conference room on all week days during Town business hours. Lessee shall have priority
of use of the conference room on Saturday, Sundays and Town Holidays.
6 . HAZARDOUS MATERIALS.
6.4 Hazardous Materials Defined. The term "Hazardous Matcrial(s)" shall mean any toxic or
hazardous substance, material or waste or any pollutant or contaminant, or infectious or
radioactive material, including but not limited to, those substances, materials, or wastes
regulated now or in the future under any of the following statutes or regulations and any and
all of those substances included within the definitions of"hazardous substances," "hazardous
waste," "hazardous chemical substance or mixture," "imminently hazardous chemical
substance or mixture," "toxic substances," "hazardous air pollutant," "toxic pollutant" or
"solid waste" in the (a) CERCLA or Superfund as amended by SARA, 42 U.S.C. Sec. 960 I
et seq., (b) RCRA , 42 U.S.C. Sec. 6901 et seq., (c) CWA., 33 U.S.C. Sec. 1251 et seq .. (d)
CAA,42U.S.C. 78401etseq.,(e)TSCA,15U.S.C.Scc.2601 etseq.,(t)TheRefuseActof
1899, 33 U .S .C. Sec. 407, (g) OSHA, 29 U .S .C. 651 et seq. (h) Hazardous Materials
Transportation Act, 49 U .S .C . Sec. 180 I et seq., (i) US DOT Table ( 40 CFR Part 302 and
amendments) or the EPA Table (40 CFR Part 302 and amendments), {j) California
Supcrfun<l. Cal. Health & Safety Code Sec. 25300 ct seq., (k) Cal. Hazardous Waste Control
Act, Cal. Health & Safety Code Section 25100 et seq., (I) Porter-Colob'l1e Act , Cal. Water
Code Sec. 13000 et seq., (m) Hazardous Waste Disposal Land Use Law , Cal. Health &
Safety Code Sec. 25220 et seq .. (n) Proposition 65, Cal. Health and Safety Code Sec.
25249 .5 et seq., (o) Hazardous Substances Underground Storage Tank Law , Cal. Health &
Safety Code Sec. 25280 ct seq., (p) California Hazardous Substance Act, Cal. Health &
Safety Code Sec. 28740 et seq ., (q) Air Resources Law, Cal. Health & Safety Code Sec.
39000 et seq .. (r) Hazardous Materials Release Response Plans and Inventory. Cal. Health &
Safety Code Secs. 25500-25541, (s) TCPA. Cal. Health and Safoty Code Secs. 25208 et seq ..
and (t) regulations promulgated pursuant to said laws or any replacement thereof, or as
similar terms are defined in the federal , state and local laws, statutes , regulations. orders or
rules . Hazardous Materials shall also mean any and all other substances, materials, and
wastes which are, or in the future become. regulated under applicable local, state or federal
law for the protection of health or the environment. or which arc classi fie<l as hazardous or
toxic substances. materials or wastes. pollutants or contaminants, as defined, listed or
regulated by any federal , state or local law, regulation or order or by common law decision,
including without limitation: (i) trichloroethylcnc. tetracholoethylenc, perchloroethylene and
other chlorinated solvents; (ii) any petroleum products or fractions thereof; (iii) asbes tos.
(iv) polychlorinated biphenyls; (v) flammable explosives: (vi) urea formaldehyde : and, (vii)
6 RI:''. Jun e 201 3
radioactive materials and waste.
6.:!. Compliance with Laws. Lessee shall no t cause o r pem1it any Haza rd o us Material (as
defined below) to be brought upon . kept o r used in o r about the Premises o r Project by
Lessee. it s agents. employees. contractors or in v itees .
6.3 Tennination of Lease. Town shall have the right to tenninate th e Lea se in Town's so le
and absolute dis cretion in the event that : (i) any anticipated use of the Premises by Lessee
involves the generation or st orage. use, treatment, disposal , or release of Hazardous Material
in a m an ner o r for a purpose proh ibi t ed or regulated by any governmental agency. authority.
o r Hazardous Materials Laws: (ii) Lessee has been required by any lender or govemmentnl
authori ty to take remedial action in connection w ith Hazardo us Matetial contaminating th e
Premises, if the contamination resulted from Le ssee 's act ion or use of the Premi ses : o r
(iii) Lessee is su bject to an enforcement ord e r issued b y any governmental authorit y in
connection with the release . us e , dispos al , or sto rage of a Ha zardou s Material on th e
Premis es.
6.4 Ass ignment and Subletting. It shall not be unre asonable for Town to withhold its consent
to an assignment or subletting to such proposed assignee or s ublessee if: (i) any anticipated
use of the Premises b y any proposed assignee or sub le ss ee involves the generation or storage.
use. treatment. di s posal. o r relea se of Hazardous Material in a maimer or for any purpose : (ii)
th e proposed assignee or s ublc ssecs ha s been req uired by any prior landlord, lender. or
governmental authority to tak e remedial action in connection with Hazardous Material
contaminating a property. if the contamination re s ulted from s uch party's actio'n or use of the
property in ques tion ; or, (iii) the proposed assignee or s ublcssee is subject lo an enfurcement
o rd er issued b y any governmental autho rit y in connection w ith the release. use, di sposa l o r
s torage of a Ha za rd o us Material.
6.5 Hazardous Mate1i als lndl:!mnit v. Lessee s h a ll indemnify. defon d (by coun sel reasonabl y
acceptabk to Town). protec1 , and h o ld Landl o rd hannless from an d against any and all
claims, l iabilities, penalties, forfeitures, losses. and/or expenses, including w ithout lim itati on ,
diminutio n in va lue o f the Premises, damages for the loss or res triction o n use of the rentab le
or usable space o r o f any amenity of the Premi ses, damages arising from any ad,·erse impact
o r marketing of the Premises and sums paid in settlement of claims . re s ponse costs, cleanup
costs. si te assess ment costs. attorneys ' fee s, consultant and expert fees. judgments.
administrative rulings or orders, fin e s, costs of d eath of or injury to any person. o r dama ge to
a ny property whatsoever (including, wi th o ut limitati on. groundwater. sewer system s , and
atnwsphcre). arising frnm . caused. o r resu lting . either prior to or during th e Lease Tenn , in
\.vhole or in part. directly or indirectly . hy the presence or discharge in. o n. un der. or about the
Premi ses by Lessee. Lessee's agents. employees, licensees. or inv itees or a t Les sce·s
direction. of HaLard ous Material. o r by Lessee 's failure to com pl y w ith any Hazardous
Material s La w , whether kn owingly or by s trict liabi lit y. For purposes o f the in dem ni ty
provided herein. any act s o r o mi ss io ns of Lessee or it s em pl oyees . agents, customers .
sublessees . assignees. contra ctors . o r s ub contrac to rs of Lessee (whether or nl)t they are
negligent. intentional. wi llful o r unlawful) shall be strictl y attributable to L!.!s s ee. Lessee's
7 R..:v Jun ..: ~O 13
indemnification obligations shall include, without limitation, and whether foreseeable or
unforeseeable, all costs of any required or necessary Hazardous Materials management plan,
investigation, repairs, cleanup or detoxification or decontamination of the Premises, and the
presence and implementation of any closure, remedial action or other required plans, and
shall survive the expiration of or early termination of the Lease Term .
6 .6 Town's Right to Perfonn Tests. At any time prior to the expiration of the Lease Term,
Town shall have the right to enter upon the Premises in order to conduct tests of water and
soil.
7 . UT I LITIES AND OPER.\.T ING EXPENSES .
7.1 Lessee Obligations . Lessee at Lessee's sole expense shall fully and promptly pay for all
expenses associated with the operation of the Premises, including but not limited to the
furnishing of gas, water, sewer, electricity, telephone service, garbage pickup and di s posal ,
other public utilities and custodial service that relate to the Premises. Lessee shall be
obligated to pay a pro-rated share based on square footage for gas. water, sewer, electricity,
garbage service and other public utilities provided by or through the Town. Lessee shall be
obligated to pay their own direct costs for telephone, technology, audio-visual, custodial and
other specialized services, including any initial costs for those services. Town shall maintain
all exterior landscaping and integrated building HVAC system .
7 .2 Custodial Ser\tices. Lessee at Lesses's sole expense shall fully maintain and pay for all
custodial services to maintain the interior of the Premises, other than the Town occupied
space, in· a clean and safe manner. All wndors for custodial services shall be bonded,
insured, and the Town named as an additional insured . Proof ofbond and insurance including
the additional insured certificate shall be provided to Town prior to any custodial services
being performed .
8 . TAXES.
8.1 Payment of Real Property Taxes . Town shall pay Lessee's share of all real prope1ty taxes
relating to the Premises, if any.
8 .3 Revenue and Taxation Code. Lessee specifically acknowledges it is familiar with section
I 07.6 of the California Revenue and Taxation Code. Lessee reali z e s that a pos sessory
interest subject to property taxes may be created, agrees to pay any such tax , and hereby
waives any rights Lessee may ha ve under said California Revenue and Taxati o n Code section
107.6 .
8.4 Personal Property Taxes. Les see shall pay before delinquent, or if requested b y Town .
reimburse Town for. any and all taxes, fee s, and assessments associated with the Premises.
the personal propert y contained in the premises and other taxes. fees , and ass essments
regarding any activities which take place at the Premises. Lessee recogniz es and understand s
in accepting this Lease that it s interest therein may be subject to a poss ible possesso ry
8 Re ' . Jun~ 201 3
interest tax that Town or County may impose on such interest and that such tax pa yment s hall
not reduce any rent due Town hereunder and any such tax shall he the liability of and be paid
by Lessee.
9 . l\JAINTENANCE.
9.1 Town and Lessee Responsibilities. Lessee at Lessee's expense. shall perfonn all interior
maintenance and repairs , including al I painting. necessary to keep the Premises in reasonable
order, repair. and condition , and shall keep the Premises in a safe, clean , wholesome. and
sanitary condition to the reasonable satisfaction of Town. and in compliance with all
applicable laws, throughout the tenn of this Lease. In addition. Lessee shall maintain. at
Lessee 's expense, all equipment. furnishings and trade fixture s upon the Premises required
for the maintenance and operation of first-clas s public sen·ices of the ty]Je to be conducted
pursuant to this Lease. Routine interior p lumbing and electrical maintenance (e .g., plugged
toilets 'sinks. faulty switches/lights) will be the responsibility of the Lessee. Town shall be
responsible for the routine maintenance and repair of the exterior structure of the Premises
and main support systems. including roof repair, exterior paintrng and structural repairs.
sewer lines, water lines, and main electrical panel, excluding any maintenance or repairs
resulting from Lessee's actions or activities . External windows broken or cracked from the
exterior will be the responsibility of the Town, excluding broken windows resulting from
Lessee's actions or activities. while windows broken from the interior will be the
responsibility of the Lessee: when the source or cause of breakage is indetenninate, the costs
will be shared .
9.2 Waiver of Ci\'il Code. Les see expressly waives the benefit of any statute now or
hereinafter in effect, including the provisions of sections 194 l and 1942 of the Ci\"il Code of
California. which would otherwise afford Lessel..' the right to make repairs at Town's expense
or to terminate this Lease because of Town's failure to keep Premises in good order,
condition and repair. Lessee further agrees that if and when any repairs, alterations , additions
or hcttennents shall be made by Lessee as required by this paragraph. Lessee shall promptl y
pay for all labor done or materials furnished and shall keep the Premises free and clear of any
lien or encumbrance of any kind whatsoever. If Lessee fails to make any repairs or pcrfom1
any maintenance work for which Lessee is responsible within a reasonable time (as
detennined by the Town Manager in the Town Manager's sole discretion) after demanJ by
the Town. Town shall have the right, but not the obligation , to make the repairs at Lessee 's
expense: within ten (I 0) days of receipt o fa bill. Lessee shall reimburse Town for the cost of
uch repairs. including a ti ftecn percent ( 15° o ) administrati\'c overhead fee . The making of
such repairs or pcrfonnance of maintenance by Town shall in no e\'ent be construed as a
wai,·er of the duty of Lessee to make repairs or perfonn maintenance as prO\·ided in this
Section .
q _3 Maintenance of Common Arl.!a~. To" n shal l maintain or cause to be maint:.iineJ.
including repair and n:placement as necessary, the exterior grounds. exterior shared deck. and
the parking lot adjacent to the Premises. If Lessee uses thl' sh ared deck for acli\'itics nr a
9 Rl'.1 Jun..: 2013
special event, Lessee shall promptly remove all structures, accessories, decorations and trash
associated with the activity or event.
10. TENANT IMPROVEMENTS.
I 0.1 Improvements Pcnnittcd. Subject to prior written approval of the Town Manager,
which shall not be unreasonably withheld, Lessee shall be entitled to install improvements in
an efficient and workmanlike manner within the Premises. at no cost to Town. All costs of
plans, improvements, and permits shall be the sole responsibility of the Lessee. All structural
improvements and improvements in excess of $10,000 must be approved in writing by the
Town Manager.
I 0.2 Cost of Improvements. Except for the improvements set forth on Exhibit B , all
improvements shall be made at Lessee 's sole expense.
I 0.3 Ownership of Improvements. All improvements constructed, erected, or installed upun
the Premises must be free and clear of all liens, claims, or liability for labor or material and
shall become the property of Town, at its election, upon expiration or earlier termination of
this lease and upon Town's election, shall remain upon the Premises upon termination of this
Lease. Title to all free standing equipment, furniture, furnishings , and trade fixtures placed
by Lessee upon the Premises shall remain in Lessee 's ownership, and replacements.
substitutions and modifications thereof may be made by Lessee throughout the term of this
Lease.
I 0.4 Indemnity for Claims Arising Out of Construction. Lessee shall defend and indemnify
Town against all claims. liabilities, and losses of any type arising out of work perform ed on
the Premises by Lessee, together with reasonable attorneys' fees and all costs and expenses
reasonably incurred by Town in negotiating, settling, defending or otherwise protecting
against such claims.
10 .5 Certificate of Inspection . Upon completion of construction of any building, Lessee
shall submit to the Town Manager a Certificate of Inspection , verifying that the construction
was completed in confonnance with Title 20 of the California Code of Regulations for
residential construction, or in conformance with Title 24 of the California Code of
Regulations for non -residl.!ntial construction.
I 0 .6 As Built Plans. Ll.!ssee shall provide the Town Manager with a complete set of
reproducible "as built plans'' reflecting actual construction within or upon the Premises upon
completion of any: (i) new construction : (ii) stnictural alterations: or. (iii) non-structural
alterations costing more than $25.000.
11. AL TERA TIONS BY LESSEE
10 Re\ Jun e 2013
lessee shall not make any alterations or improvements to the Premi ses without obtaining the
prior written consent of the Town Manager. Lessee may. at any time and at it s sole expense.
in s tall and place business fixtures and equipment within the Premi s es . pro,·ided such fixture~
and installation have been re viewed and approved by the Town Manager.
12. HOLD HARMLESS/INDEMNIFICATION .
12 . 1 Indemnification . To the extent pem1itted by law. Le ssee agrees to protect , defend . hold
hannless and indemnify Town , its Town Council, commissions, otfo.:ers. agents. vo lunteers .
and employees from and against an y claim, injury, liability, lo ss, cost. and /o r expense or
damage. however same may be caused. including all cos ts and reasonable attorney's fees in
prov iding a defense to any claim arising therefrom for which Town s hall become legally
liable arising from Lessee's negligent, reckless , or wrongful acts , errors. or omissions with
respect to or in any way connected with this Lease . Lessee shall give Town immediate noti ce
of any claim or liability hereby indemnified against. This indemnit y shall be in addition w
the Ha z ardous Materials indemnity contained in this Lease and shall survive shall SUf\'i\'e the
expiration of or early termination of the Lease Tenn.
I 2.2 Waiver of Claims. Lessee "·aives any claims against Town for injury to lessee's
business or any loss of income therefrom, for damage to Lessee's property, or for injuty or
death of any person in or about the Premises or the Town Property. fr om any cause
whatsoever. except to the extent caused by T own 's active negligen ce or willful mi sconduct.
13 . DAMAGE, DESTRUCTION A~D TER\IJNATION.
I 3.1 Nontermination and Nonabatement. Except as provided herein. no destru cti o n or
damage to the Premises by fire . wind storm or other casualry, whether in sured o r unin s ured .
s hall entitle Lessee to tem1inate this Lease . Tow n and Lessee waive the pro vision s of an y
s tatutes which relate to tennination of a lea se when leased property is Jes troyed and agree
that such event shall be governed by the tenns of this Lease .
13.2 Force Majeure. Prevention. delay or s toppage due to strikes. locko ut s. labor di s putes.
Acts o f God. inabtlit y to obtain lahor. inabilit y 10 obtain materials or reasonable sub s titutes .
gO\ emme ntal re s trictions . go,·crnmental re gu lati on . go,·emmental controls, judicial orders.
enem y or hostile governmental action s. 1.:i\'il commotion. fire or other casualt y. and other
causes beyond the reaso nable control o f Les see (financial inabilit)' excepted). s hall excuse
th e perfonnancc by Lesse e for a period equal to the prevention. delay. or s toppage, except the
obligations imposed with regard to rent to be paid by Lessee purs uant to thi s Lt!a sc. In the
event any work pcrfonned by Le ssee or Le ssee · s co11tra1.:l ors results in a strike. lol:k o ut ,
and/or labor dispute. the s trike , lockout. and/or labor dispute sha ll not excuse the
pcrfonnance by Lessee of the prov isi ons o f this Lease.
13 .3 Rt!storation of Pre mi s1.:s bv Lessee.
I >J. I Destru1:1ion Due to Ri sk Coq~rcd by ln s uran1:e . If. during the term. th~
1 • !{ n June ~O IJ
Premises are totally or partially destroyed from a risk covered b y the
insurance described in Section 20 (Insurance), rendering the Premises totally
or partially inaccessible or unusable, Lessee shall restore the Premises to
substantially the same condition as it was in immediately before destruction.
whether or not the insurance proceeds are sufficient to cover the actual cost o f
restoration . Such destruction shall not terminate this Lease. If the laws
existing at that time do not pennit the restoration, either party can terminate
this Lease immediately by giving notice to the other party.
A. Minor Loss. If, during the tenn of this Lease, the Premises are destroyed
from a risk covered by the insurance described in Section 20 (Insurance). and
the total amount of loss does not exceed twenty thousand dollars ($20,000),
Lessee shall make the loss adjustment with the insurance company insuring
the loss. The proceeds shall be paid directly to Lessee for the sole purpose of
making the restoration of the Premises in accordance with this Lease.
B. Major Loss-Insurance Trustee. If, during the term of this Lease, the
Premises are destroyed from a risk covered by the insurance described in
Section 20 (Insurance), and the total amount ofloss exceeds the amount set
forth in paragraph ( l ). Lessee shall make the loss adjustment with the
insurance company insuring the loss and on receipt of the proceeds shall
immediately pay them to an institutional lender or title company as may be
jointly selected by the parties ("the Insurance Trustee").
13.3.2 Destruction Due to Risk Not Covered hy Insurance. It: during the lenn, the
Premises arc totally or partially destroyed from a risk covered by the
insurance described in Section 20 (Insurance), rendering the Premises totally
or partially inaccessible or unusable, Lessee shall restore the Premises to
substantially the same condition as it was in immediately before destruction,
whether or not the insurance proceeds are sufficient to cover the actual cost of
restoration . Such destruction shall not tenninate this Lease. If the laws
existing at that time do not permit the restoration. either party can terminate
this Lease imml.!diately by giving notice to the other party.
If the cost of restoration exceeds ten percent (I 0 %) of the then replacement
value of the Premises totally or partially destroyed, Lessee can elect to
tenninate this Lease by giving notice to Town within sixty (60) days after
detern1ining the res toration cost and replacement value. If Lessee elects to
terminate this Lease, Town, within thirty (30) days after receiving Lessee's
notice to terminate, can elect to pay to Lessee. at the time Town notifies
Lessee of it s election, the difference between ten percent (I 0%) of the
replacement value of the Premises and the actual cost o f restoration. in which
case Lessee shall restllrc the Premises . On Town's making its election to
contribute. each party shall deposit immediately the amount of its
contribution with s uch institutional lender or title company as may be jointly
12 ReY . June 2013
sele\;ted by the parties ("the Insurance Trustee"). If the Destruction do cs nn t
exceed ten percent {I 0%) of the then replacement value of the Premises.
Lessee shall immediately deposit the cost of restoration with the Insurance
Trus tee as provided in Exhibit C. Thi s Lease shall terminate if Less ee elects
to t enn in ate th is Lease and Town does not elect to contribute toward the cos t
of restoration as pro\'ided in this section .
If the Premises arc destroyed from a risk not co vered b y the in surance
described in Section 20 (Insurance), and Lessee has the obligati o n to restore
the Premises as provided in subsection (B), both parties shall deposit with the
Insurance Trustee their respective contributions toward the co st of
restoration. All sums deposited with the Insurance Tru stee shall be held for
the following purposes and the Insurance Trustee shall have the foll o wing
powers and duties:
The sums shall be paid in installments by the Ins urance Trustee to the
contractor retained by Lessee as construction progresses, for payment of the
cost of Restoration. A 10% retention fund shall be established that \\'ill be
paid to the contractor on completion o f restoration, payment of all costs,
expiration of all applicable lien periods, and proof that the Premi ses are free
of all mechanics' li en s and lienable claims.
Payments s h all be made on presentation of certificates or vouchers fro m the
archi tect or engineer retaineu by Lessee showing the amount due. If the
Insurance Trustee. in its reasonable discretion, detennines that the certificates
or \'Ouchers are being improperly approved by t he architect or engineer
retained by Lessee, the Insurance Trustee shall ha ve the right to appoint an
architect or an engineer to supervise ~onstruction and to mak e payments on
certificates or vouchers approved by the architect or engineer retained by the
Insur:rnce Trustee. The reasonable expenses and charges of the archi tect o r
engineer retained by the In surance Trustee shall be paid by the in s urance
trustee out of the trust fund . Bo th parties shall promptl y execute all
documents and perfonn all acts reasonabl y required by the In s uran ce T ru stee
to perfonn its obligations under thi s section .
If the sum s held b y the Insurance Trustee are not sufficient to pay the a dual
cost ofrestoration Lessee shall deposit the amount of the defici e ncy wi th the
In surance Trus tee within Ii ftccn ( 15) days a fter request b y the In surance
Trustee indicating the amount of the deiicicncy. Any undi s burscd fu nu s after
compl ian c e with the pro visions o f thi s section s hall be deli vered tu Town to
the extent ofTown's c n ntributinn tl) the fund . and the b a la nc e . ifany. s h a ll be
paid to Lc ss i:c . All a ctual ctis ts and charges of the In s urance T ru s ti.:c shall be
paid b y Le ssee.
If the ln s urarn:c Trus te e re s ign s o r for a n y reason is unwilling l o ad o r
R ~\ Ju nt' :!O I 3
continue to act, Town shall substitute a new trustee in the place of the
designated Insurance Trustee. The new trustee must be an institutional lender
or title company.
13 .3.3 Procedure for Restoring Premises . When Lessee is obligated to restore the
Premises within sixty (60) days Lessee at its cost shall prepare final plans.
specifications. and working drawings complying with applicable Laws that
will be necessary for restoration of the Premises. The plans, specifications,
and working drawings must be approved by Town. Town shall have thirty
(30) days after receipt of the plans and specifications and working drawings
to either approve or disapprove the plans, specifications. and working
drawings and return them to Lessee. If Town di sapproves the plans,
specifications, and working drawings, Town shall notify Lessee of its
objections and Town's proposed solution to each objection. Lessee
acknowledges that the plans, specifications, and working drawings shall be
subject to approval of the appropriate governmental bodies and that they will
be prepared in such a manner as to obtain that approval .
The restoration shall be accomplished as follows:
A . Lessee shall complete the restoration within 60 working days after final
plans and specifications and working drawings have been approved by the
appropriate governmental bodies and all required pennits have been obtained
(subject to a reasonable extension for delays resulting from causes beyond
Lessee's reaso nable control).
B. Lessee shall retain a licensed contractor that is bondablt:. The contractor
shall be required to carry public liability and property damage insurance.
standard fire and extended coverage insurance, with vandalism and m.alicious
mischief endorsements, during the period of construction in accordance with
Section 20 (Insurance). Such insurance shall contain waiver of s ubrogation
clauses in favor of Town and Lessee in accordance with the Provi sions of
Exhibit B.
C. Lessee shall notify Town of the date of commencement of the restoration
at least ten (I 0) days before commencement of the restoration to enable Town
to pos t and record notices of nonres pon s ibility. The contrac to r retained by
Lessee s hall not commence construction until a completion bond and a labor
and materials bond have been deli vered to Town to in s ure completion of the
construction.
D. Lessee s hall accomplish the re storation in a manner that will cause the
lea st inconvenience, annoyance. and disruption at the Premises .
14 Re\. June 20 13
E. On completion of the restoration Les see shall immediatdy record a notice
of completion in the county in which the Premise s are located.
F. The re storation shall not be commem:ed until s um s sufficient to cover the
cost of rest oration arc placed with the Insurance Trustee as prov ided in thi s
section.
14 . SIGNS AND MARKETING.
14.1 Lessee shall not place. construct , maintain. or allow any signs affixed to the building or
to the exterior of the Premises without prior written consent of the Town following Town
Council review and approval. Lessee shall be obligated to pay all costs associated with any
application process required to obtain approval for any signs .
14.2 Lessee shall not place. construct. maintain, or allow any other signs, including minor
ones, visible to the exterior of the Premises without prior written consent of the Town
Manager. Lessee shall submit an application to the Community Development Department
and. be obligated to pay all costs associa red with any application process required to obtain
appro\'al for any signs. Exterior or otherwise \·isible signagc shall be subject to 1he Town's
naming policy and donation policy.
14.3 The value of the Town's in-kind and other contributions to the operation of
Lessee will be reflected in all budgets and financial reports for Lessee. The contribution
value of the premises will be detennined by subtracting Lessee annual lease payments as
required under this agreement from the annual marker value of the premises as specified
or detem1ined through this lease. In addition, the Town's mitial capital investment in
facility impro\'ements will be rctlectcd and acknowledged in Lessee's capital campaign
for facility improvements, at Lessee·s option .
14.4 The Town will be included 111 all donor rep orts. listings and recognitions
reflet"ting the value of the Town ·s combined in-kind and monetary _brranls. if any. at the
appropriate ]c,·eJ for all donors. as agreed to b y the Town Manager.
14 .5 The Mayor and Co unc.;il. Chair ofrhe Arts & Culture Commiss ion. Tcn\n
Manager and Assistanl Tl)\\'11 Manager s hall be ill\ ited tl) all e\'ents.
14.4 The Town Logo . along with an optional dcsigna1ion as ··sustaining Sponsor"' or
equi\'alent as mutually agreed to by the Town and Lessee, will be included on all Lessee·s
marketing materials. irn.:luding catalogues. brochures. pro&rrams . fl yers. cards. banners.
ere .. for Lessee in general and/o r fl)r e\·ents. classes and exhibits at th e C i\'iC Center. The
Town logo will be in a prominent location The Town Manager. at the Town's so le
discretion, may "' ui' c or alter inclusion of the Town logo when l)thern isc required to be
included.
R i.:\ J une ~()U
15. ASSIGNMENT AND SUBLETTING.
15 . I Town's Consent Required . Lessee shall not assign thi s Lease, nor any interest therein,
and shall not sublet or encumber the Premises or any part thereof. nor any right o r privilege
appurtenant theret o, no r allow or permit any other perso n(s) to occupy or use the Premi ses. or
any portion thereof, without the prior written consent of Town. This Lease shall be binding
upon any permitted assignee or s uccessor of Le ssee. Consent by Town to one assignment,
subletting, occupation or use by another person shall not be deemed to be consent to any
subsequent assignment, subletting, occupation or use by another person. No assi!:,111ment.
s ubletting, or encumbrance by Lessee shall release it from or in any way alter any of Lessee's
obligations under thi s Lease. Lessee ma y ha ve the Premises delivered to a subsidiary
company of Lessee, but such arran gement shall in no way alter Lessee's responsibilities
hereunder with res pect to the Premises. Any assignment, subletting, encumbrances.
occupation, or use contrary to the provi sions of this Lease shall be void and shall constitute
breach of this Lease. Town may assign any of its rights hereunder without notice to Lessee.
15 .2 No Rel ease of Le ssee. No s ub letting or assignment as approved by Town shall releas e
Le ssee of Lessee's obligation or alter the primary liabilit y of Lessee to pay the rent and to
perfonn all other ob ligations by Lessee hereunder. The acceptance ofrent by Town from any
other person shall not be deemed to be a waiver by Town of any provi sion hereof In th e
event of default by any assignee of Les see or any successor of Lessee in the perfom1ance of
any of the term s hereof, Town may proceed direc tl y against Le ssee without the necessity of
exhausting remedies against said assi&rnce.
16 . DEFAULTS; REMEDIES.
16 . l Defaults . The occurrence of any one or more of the fo llowing events s hal l constitute a
material default, o r breach of thi s Lease. by Lessee :
16 .1.1 Abandonment of the Premises by Lcssc.;e as defined hy California Civil Code
section 1951.3:
16. I .2 Fai lure by Lessee to make any payment of r e nt or any other payment req uired
to be made by Lessee hereunder, as pro vided in thi s Lease , where s uch failure s hall
continue for a peri o d often (I 0) business days aft e r written noti ce thereof fr o m Town
to Lessee. In the event T own serves Lessee w ith a Notice to Pay Rent or Quit
pursuant to applicable Unlawful Detainer statutes, such Notice to Pay Rent o r Quit
shall also co nst it ute the notice required by this s ub paragraph ;
16 .1.3 Failure by Lessee to observe or per fonn any o f th e covenants, conditions or
16 R<!v. June .:!O 13
provisions of th is Lease in any material respect where such fa ilure shall continue for
a peri od of thirt y (30) days after wri tten no ti ce thereof from Town to Lessee:
provided . however. that if the nature of Lessee's default is such that more than thirty
(30) days are reaso nabl y required fo r its c ure. th en Lessee s hall not be deemed to be
in default if Less ee commenced such cure within sa id thirty (30) day period and
thereaft e r diligentl y prosecutes s uch cure to completion ;
16 .1 .4 Making by Le ssee o f any general arrangement or ass ignment for the benefit of
creditors; Lessee 's beco ming a "debtor" as defined in 11 U.S.C. §10 1 or any
successor sta tute theret o (unless. in the case of a petiti on filed agai nst Lessee. the
sa me is di sm i ssed wit hin si xty (60) da ys); the appointment of a bankruptcy trustee or
receiver to take possession of all or substantially all of Lessee's assets located at o r
on th e Premi ses or o f Lessee·s interest in thi s Lease where possession is no t restored
to Le ssee within thirt y (30) da ys; or the attachment execu ti on or o th er judicial
seizure of all or su bst antially all of Lessee·s assets located at oron the Premises o r of
Le ss ce·s interest in thi s Lea se, where s uch seiz ur e is not di scharged wit hin th irty (30)
days.
16.1 .5 Failure to mak e the Funding Commitm ent payments as required under thi s
Lease A!,,rreement for a period of six (6) months or more.
16 .2 Remedies. In t he event o f any material default or breach by Lessee. Town may a t an y
time therea ft e r, following an y notice required by statute. and witho ut limiting Town in th e
exercise of any ri g ht or re med y which Town may have by reason of suc h default or breach :
16.2.1 Tenninate Lessee 's right to possession of the Premises by any lawful means ,
in whi ch case thi s Lea se shall termin ate and Lessee s hall immediately surrender
possession of the Premises an d Improvement s to Town. In su ch eve nt. Town shall be
ent it led to re cover from Lessee al l dam ages incuned by Tow n by reason of Lessee's
default including but not lim ited to : th e cost of recoveri ng possession o f the Premi ses
an d Impmvement s; expenses of rc lctting, including ne cessary ren ovat ion and
alterati on of the Premi ses and Impro vement s: reasonable attorneys ' fee s: the wort h a t
the time of the award of the unpaid rent th at had been earned at the tim e of
tem1inati o n of thi s Lea se and the:: worth a t th e tim e of award of the amou nt by which
the unp aid r ent for th e balance of th e tenn after the time of s uch award exceeds the
am<)Lmt of such re nt al lo ss for the same petiod that Le ssee proves could be reasonably
a\·oided.
16 .2.2 Maintain Le ssee ·s right In possess ion. in whid1 case this Lease shall con tinue
in effect wheth er or not Lessee sha ll have aba nd oned the Premises . In such event.
Town s hall be entitled to enforce all of Town's righ ts a nd remedies under thi s Lease.
1ncluc.ling the right to rec.:o\ er rent and o ther payment s as the) hecome due hereunder.
16 .2 .3 Purs ut: an y 0 1h er remedy now or hereafter available to To \\ n under the la\\ s
or judicial dccisil)nS of t he Sta te of Cal ifornia. Town shall lrn\·e all remcd i e~
}{~' J un~ 20 13
provided by law and equity.
16.3 No Relief from Forfeiture After Default . Lessee waives all rights of redemption or
relief from forfeitureunderCalifomiaCodeofCivi l Procedure sections I 174and 1179,and
any other present or future Jaw , in the event Lessee is evicted or Town otherwise lawfully
takes possess ion of the Premises by reason of any default or breach of this Lease by Lessee .
16.4 Di s position of Abandoned Personal Propertv. If the Lessee fails to remove any personal
property belonging to Lessee from the Premises after forty-five (45) days of the expiration or
termination of this Lease, such property shall at the option of Town be deemed to have been
transferred to Town . Town shall have the right to remove and to dispose of such property
without liability to Lessee or to any person claiming under Lessee, and the Town shall have
no need to account for such property.
17 . INTEREST ON PAST-DUE OBLIGATIONS.
Except as expressly provided herein , any amount due Town when not paid when due s hall
bear interest at the lesser of ten percent (I 0%) per year or the maximum rate then allowable
by law from the date due.
18. HOLDING OVER.
If Lessee remains in possession of the Premises or any part thereof after the expiration of the
term o r option terms hereof, such occupancy shal I be a tenancy from month to month with all
the obligations of this Lease applicable to Lessee and at a monthly rental obligation of two
(2) times the Base Rent in effect at the time of expiration . Nothing contained in this Lease
shall give to Lessee the right to occupy the Premises atlcr the expiration of the tenn , or upon
an earlier termination for breach .
19 . T OWN 'S ACCESS.
19 .1 Access for Inspection . Town and Town 's agents shall have the right to enter the
Premises at reasonable times, upon not less than twenty-four (24 ) hours pri or notice to
Lessee, for the purpose of inspecting same, showing same to prospectiv e purchasers. lenders
or lessees, and making s uch alterations, repairs. improvements. or addition s to the Premises
as Town may deem necessary.
19 .2 Security Measures. Less ee s hall provide a reasonable sec urity system, device,
operation, and/or plan within and for Lessee to protect the Premises and the Ci vic Center.
Les see shall obtain Town's prior approval before ins talling, implementing o r changing any
security system , device, operation and/or plan.
19 .3 New Lock s. Lessee may not install new locks on any doors exterior doors without
express written consent by Town. Lessee shall advise Town of such action and s hall pro vi de
Town with keys to said loc k s. Less ee sha ll also deliver to Town the old locks with keys.
18 Re' . June ~O l 3
Upon tennination. Lessee shall leave ne w locks th at shall become the property of Town .
20. INSURANCE.
Lessee's responsibility for the Premises begins immediat ely upon delivery and Lessee . at its
sole cost and expense, and at no cost to Town. shall purchase and maintain in full force and
effect during th e entire tcnn of this Lease insurance coverage in amounts and in a fonn
accep table to Town as set forth in Exhibit C att ad1Cd hereto and incorporated herein by
reference . Said p o licies shall be maintained with respect to Lessee's employees. if any, and
all ve h icles operated on the Premises. The policies shall include the required endorsement s .
certificates of insurance and coverage verifications as described in Exhibit C. Lessee also
agrees to secure insurance coverage for all of its con te nts. museum collection. and perso nal
property maintained on the Premises .
Lessee shall deposit with the Town Manager, on or before th e effective date of thi s Lease.
certificates of insurance necessary to satisfy Town that the insurance provisions of this Lease
have been complied with . and to keep s uch in suran ce in effect and the certificates therefore
on deposit with Town during the entire tenn of this Lease. Should Lessee not provide
evidence of such required coverage at least three (3) days prior to the expira ti on of any
existing in surance coverage, Town may purchase such insurance, on behalf of and at the
expense of Lessee to provide six months of coverage.
Town shall retain the ri ght at any time lO review the coverage. form. and amount of the
insurance required hereby. 1t: in the opinion o f the Town 's Risk Manager (or comparable
official). the insurance provisions in th is Lease do not provide adequate protection for Tmvn
and for members of t he public using the Premises. the Town Manager may require Lessee to
obtain insurance sufficient in coverage, fonn , and amou nt to provide adequate pro tection as
detcnnined by the R isk Manager. Town's requirements s hall be reaso nable and shrill be
designed to assure protection from and against the kind and extent of risk that exists at the
time a change in insurance is required .
The Town Manager sha ll notify Lessee in writing of changes in the insurance requirements.
If Lessee doe s not depo s it copies of acceptable insurance pol icies with Town incorporating
such changes within sixty (60) da ys of receipt of such no tice. or in the C\'ent Lessee fails to
maint ai n in effect any required insuram:e coverage. Le ssee shall be in default under this lease
without further notice to Lessee . Such fai lur e shall constitute a material breach and shall be
!,'TOUnds for immediate tcnninati on of thi s Lease at the option ofT<w.-·n.
The procuring ofsui.:h required po licy or policies of insurance shall not he construed to limit
Le ss ee's liability hereunder nor to ful fill the indemniticati on provision and requiremen ts of
this Lease . Notwithstanding the policy or policies of in surarn:e. Le ssee s hall be obligated for
the full and total amount of any damage. injul). or loss caused hy or conncctc<l wi th this
Lease or with use or occupancy of the Premises .
2 I . f reserved J
i? R~·, Jum: 20 I J
22. DISPUTE RESO LUTION.
22.1 Unless otherwise mutuall y agreed to , any controversies between Lessee and Town
regarding the construction or application of this Lease, and claims ari sing out of this Lease or
its breach shall be submitted to mediation within thirty (30) days of the written request of
one Party after the service of that request on the other Party.
22.2 The Parties may agree on one mediator. If they cannot agree on one mediator, the Party
demanding mediation shall request the Superior Court of Santa Clara County to appoint a
mediator. The mediation meeting shall not exceed one day (eight (8) hours). The Parties may
a&JTee to extend the time all owed for mediation under thi s Lease .
22.3 The cost s of mediation shall be borne by the Parties equally.
22.4 Mediation under this section is a condition precedent to filing an actio n in any court. In
the event of litigation arising out of any dispute related to this Lease, the cost of attorney's
fees , expert witness costs and cost of suit shall be paid to the prevail ing p arty.
23. NON-LIABILITY OF OFFICIALS AND EMPLOYEES Of THE TOWN.
No o nicial o r employee of Town shall be perso nall y lia ble for any default or liability under thi s
agreement.
24 . NON-DISCRIMINATION
24.1 Non-discrimination in Lease Activities. Le ssee agrees that in the perfonnance of this
Lease and in connection with all o f the activities Lessee conducts on the Premises. i t s hall not
di scriminate against any empl oyee or person because of the race, skin color. gender, age, reli gion,
disability, national o rigin, ancestry, sexual orientation, housing status, marital status, familial status,
weight or height of s uch person. Les s ee acknowledges that is familiar with the provisions set forth in
Section 2.30.510 of the Los Gatos Municipal Code relating to nondi scri mination in employment and
Section 9 .73 of the Los Gatos Municipal Code relating to Town po li cy against arbitrary
discrimination.
24.2 Human Rights Policy. In connection with all acti v ities that are conducted upon the
Premi ses. Lessee agrees to ac cept and enforce the statements of policy s et fo rth in Section 9. 73.0 I 0
which provides: "It is th e policy of the Town of Los Gatos to a ffinn. s upport and protect th e human
rights o f every person within it s jurisdiction. These rights include, but are no t limite d to, equal
economic, political, and educational opportunity; equal accommodations in all busi ness
establ ishments in the Town: and equal servi ce and protection b y all public agencies of th e Town ."
25 . INDEPENDENT CONTRACTOR .
It is a&'Tecd that Lessee shall act and be an independ en t contractor a n d not a n agen t n o r employee of
20 Re v. Jurn.: 20 13
Town.
26. CONFLICT OF INTEREST.
Lessee s hall at all times avoid conflict of interest or appearance of conflict of interest in perfonnance
of this agreement. Lessee warrants and covenants that no official or employee of Town nor any
business entity in which any official or employee of Town is interested: (I) has been employed or
retained to solicit or aid in the procuring of this agreement; or (2) will be employed in the
performance of this agreement without the divulgence of such fact to Town. In the event that Town
determines that the employment of any such official, employee or business entity is not compatibl e
with such official's or employee's duties as an official or employee of Town, Lessee upon request of
Town shall immediately terminate such employment. Violation of this provision constitutes a
serious breach of this Lease and Town may terminate this Lease as a result of such violation.
27. MEMORANDUM OF LEASE.
Following execution of this Lease, Town shall be entitled to record a Memorandum of Lease in the
official records of Santa Clara County. Upon termination or expiration of this Lease, Lessee shall
execute and record a quitclaim deed as to its leasehold interest.
28. ESTOPPEL CERTIFICATE.
J.,essee shall, from time to time, upon at least thirty (30) days prior written notice from Town,
execute, acknowledge and deliver to Town a statement in writing: (i) certifying this Lease is
unmodified and in full force and effect , or, if modified , stating the nature of the modification and
certifying that the Lease, as modified, is in full force and effect, and the date to which the rental and
other charges, if any, have been paid ; and , (ii) acknowledging that there are not to Lessee's
knowledge, any defaults, or stating if any defaults are claimed, any statement may be relied upon by
any prospective purchaser or encumbrance of the Town Property.
29. LIENS.
Lessee agrees at its sole cost and expense to keep the Premises free and clear of any and all claims,
levies, liens, encumbrances or attachments.
30. VACATING .
Upon termination of the tenancy, Lessee shall completely vacate the Premises, including the removal
of any and all of its property. Before departure, Lessee shall return keys and personal property listed
on the inventory to Town in good, clean and sanitary condition , reasonable wear and tear excepted.
Lessee shall allow Town to inspect the Premises to verify the condition of the Premises and its
contents.
31. ABANDONMENT.
21 R ev. June 2 0 13
Lessee's absence from the Premises for thirty (30) consecutive days, without prior notice , during
which time rent or other charges are delinquent, shall be deemed abandonment of the Premises .
Such abandonment will be deemed cause for immediate termination without notice. Town shall
thereupon be authorized to enter and take possession and to remove and dispose of the property of
Lessee or its guests without any liability whatsoever to Town.
32. NOTICES.
All notices to the Parties shall , unless otherwise requested in writing, be sent to Town addressed as
follows:
Town of Los Gatos
Attention: Town Manager
110 E. Main Street
Los Gatos, CA 95030
E-Mail: Manager@LosGatosca.gov
And to Lessee addressed as follows :
Los Gatos Museum Association
Mary Ellen Comport, Pres ident
4 Tait Avenue
Los Gatos, CA 95030
E-mail: mecomport@comcast.net
Notices may be served upon Lessee in person, by first class mail, or by certified mail whether or not
said mailing is accepted by Lessee. If notice is sent via facsimile or e-mail, a signed , hard copy of
the material shall also be mailed. The workday the facsimile was sent shall control the date notice
was deemed given if there is a facsimile machine generated document on the date of transmission. A
facsimile transmitted after I :00 p .m. on a Friday shall be deemed to have been transmitted on the
following Monday. These addresses shall be used for service of process.
33. TIME.
Time shall be of the essence in this Lease .
34. AMENDMENTS .
It is mutually agreed that no oral Leases have been entered into and that no alteration or variation of
the terms of this Lease shall be valid unless made in writing and signed by the Parties to this Lease.
35. SIGNING AUTHORITY.
If this Lease is not signed by all Lessees named herein , the person actually signi ng warrants that
he/she has the authority to sign for the others.
22 Rev . Jun e 20 13
36. CAPTIONS.
The captions of the >various sections , paragraph s and s ubparagraphs of this Lease are for convenience
o nl y and s hall not he considered or refCrrcd to in resoh ing questions of interpretation .
37 . SURRENDER OF LEASE NOT l\IERGER.
The niluntary or other surre nder of this lease by Le ssee, or a mutual cancellation there of. shall not
work a merger, and s hall. at the option of Town . tenninate all or any existing subleases or
su btenancies. or may. at the option of Town. operate a5 an assignment of any and all such subleases
or subtenancies .
38 . INTEGR.\ TED DOCUMENT.
This Lease , including any exhibits attach~d hereto, embodies the entire agreement between Town
and Lessee . No other understanding. agreements. conn:rsations or otherwise. with any officer, agent
or employee of Town prior to execution of this Lease shall affect or modi~y any of the tenn s or
ob l igations contained in any documents compris ing this Lease . Any such verbal agreement shall be
considered as unofficial infonnation and in no way binding upon Town. All agreements with Town
are subject to apprO\'al of the Town Council before Town shall be bound thereby .
39 . WAIVER.
Wai\·e r by Tmrn of one or more conditions of pcrfomrnnce or any breach of a condition under this
Lease shall not be construed as a waiver of any other condition of perfomiance or subsequent
breaches. The subsequent acceptanct: by a Part y of the pcrfonnance of any obligation or duty by
another Part y shall not be deemed to he a v.:ain~r of any tem1 or condition of thi s Lease. The exercise
of any remedy. right , option or privilege hereunder by Town shall not preclude Town !Tom exerci si ng
the sa me or any and all other remedies. rights. op tion s and privileges hereunder and Town's failure to
exercise any remedy. right , option or privilege at lcrn or equity. or otherwise which Town may ha\·e.
shall not be construed as a waiver.
40. INTERPRETA T10NS.
In construing or interpreting thi s Lease. the \\Ord "o r " shall not be construed as e.xdusive and the
word "including" sha ll not be limit ing. The Parties agree that thi s Lea se sha ll be fairly inteIT>rcted in
acco rdanc e with it ~ tcnns withou t any strict construction in fa\'Or of or against any other Party.
41 . SE\'ERABILITY CLAVSE .
If an~ pnn is ion t)f this Lease is held tn be illegal. irwali<l or unenf(irccabk in full nr in part. for any
reason. then such prcn isi(ln s hall be moJitied to the minimum cxt1.:nt necessal)' to make the pro,·ision
legal. ''al id and enforce:ihk. and the oth1:r pro\·isinn s Llf thi .s Lease shall no t be affected thereby.
·C . COVER'.\' I NG LAW .
Re' Jun..: ~O 13
This Lease shall be governed and construed in accordance with the statutes and laws of the State of
California .
43 . VENUE.
In the event that suit shall be brought by any Party to this Lease, the Parties agree that venue shall be
exclusively vested in the state courts of the County of Santa Clara .
44 . COMPLIANCE WITH LAWS.
The Parties hereto shall comply with all applicable law s, ordinances, codes and regulati o ns of th e
federal , state and local governments in the performance of their rights, duties and obligations under
this Lease.
45 . BROKERS.
Each party represents that is has not had dealings with any real estate broker, finder, or other person,
with respect to this lease in any manner. Each Party shall hold hannless the other party from all
damages resulting from any claims that may be asserted against the other party by any broker, finder,
or other person with whom the Indemnifying Party has or purportedly has dealt.
46 . ATTACHMENTS TO LEAS E.
The following exhibits are attached to and made a part of this Agreement:
''A" -Description of Subject Premises
··B" -Description of Tenant Improvements by Town
"C" -Standard Insurance Re4uiremcnts
2 4 Rev . Jun e 20 13
JN WITNESS WHEREOF. the parties have executed this Lea se the day and year first a bove
written .
TOWN: TENANT:
TOWN OF LOS GATOS (LESSOR) MUSEUMS OF LOS GATOS
ATTEST:
Town Clerk Adm1rnstrator
APPROVED AS TO FORM:
Judith
25 Rt"'. June 20 13
LEASE AGREE.\f E~T
BET\\' EE~
TOW'.' OF LOS GATOS
A'.\D
.\ICSEL':\JS OF LOS GATOS
EXHIBIT A
DESCRJPTIO~ OF SLB.JECT PRE'.\llSES
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11 0 E . M ain Succt
Lo> GalO>. CA 950~(1
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LEASE AGREE!\IENT
BETWEEN
TOWN OF LOS GATOS
AND
!\IUSEUl\1S OF LOS GATOS
EXHIBIT B
LIST OF TOWN IMPROVEMENTS
To wn \·v iii make the fo ll owing imprLH'ement s l o the Premi ses:
Upstairs and downstairs restrooms
Integrated-Building HVAC system
Con stru c tion o f wall s for tw o Town Offa:cs and Conferern;e Roo m
Ele\'ator lmprc)\'cmcnt s
l t'JM! A g n:cm ~lll .H11se11111 .\ of Los Gato.,
(/.\SERT D -ffE TJ '/>EDJ
Pag e ?.7 t'f 30
LEASE AGREEMENT
BY AND BETWEEN
TOWN OF LOS GATOS, CALIFORNIA
AND
MUSEUMS OF LOS GATOS
EXHIBIT C
STANDARD INSURANCE REQUIREMENTS
Insurance Requirements for Lessee:
Lessee shall purchase and maintain the insurance policies set forth below on all of its operations
under this Lease at its sole cost and expense. Such policies shall be maintained for the full term of
this Lease and the related warranty period (if applicable). For puf1>o ses of the insurance policies
required under thi s Lease, the term "Town" shall include the duly elected or appointed council
members , commissioners, officers, agents , employees and volunteers of the Town of Los Gatos,
California. individually or collectively.
Coverages (RL 28.1 A) S
Minimum Scope of Insurance
Coverage shall be at least as broad as:
I) Insurance Services Ofiice Commen:ial General Liability coverage (occurrence fonn
CG 0001).
2) Insurance Services Office form number CA 0001 (Ed. 1/87) cove ring Automobile
Liability. code I (any auto).
3) Workers' Compensation insurance as required by the State of California and
Employer's Liability lnsuram;c (for lessees with employees).
4) Property insurance against all risks ofloss to any tenant impro vemen ts or bettennents
The policy or policies of insurance maintained by Lessee shall provide the following limits and
coverages :
POLICY
(I) Commercial General Liability
('.!)Automobile Liability
Lease Agree menu Museums of Lo s Gatos
-----____ (/.VSERT DATE)
MINIMUM LIMITS OF LIABILITY
S 1.000 .000 per ea1.:h occurrence for bodil y
injury, personal injury and property damage
$ 1,000.000 Co mbined Single Limit
bhibit C Page 28 of 30
Including Owned. H ired and
Non-Owned Automobi les
(3) Workers· Compensation
Emp loyers Liability
Statutory
$1 ,000.000 per accident for bodily inju ry o r
disease
(4) Lessee's Property In surance
Lessee shall procure and maintain property in surarn.:e co ve rage for:
(a) all office furniture , trade fixture. office equipment. merchand ise.
and all other items of Lessee's property in. on. at. or about the
premises and th e building. in c lude property installed by. for .
or at the expense of Le ssee:
(b) all o th er improvement s, bettennent s, alterations, and add it ions
to the premises.
Lessee's propeny insurance must fu lfill th e following requirements:
(RL 28.1)
(a) it must be wrirten on the broadest available "all risk" policy fonn or an
equi\·alent fonn acceptable Town of Los Garos. including earthquake sprinkler
leakage .
(b) for no less than ninety percent (90%) of the full
replacement cost (new without deduction for deprec i ati on)
of the covered items and property: and
(c) the amounts of coverage must meet any coinsurance
requirements of the policy or policies.
Deductibl es and Self-In sured R eten t ions
Any deductibles ur self-insured retention s m ust be declan:d to and approved by the Town . At rhe
o ption of the Tow n ei ther: th e insurer sh::ill reduce or eliminate such deductibles or self-insured
retenti o ns as re spects the Town. its oflicers, o fficial s. emp loyees and vo l unt eers; or the Lessee shall
procure a bond guaranteeing payment oflosses and re lated in\'estigati on s . claim admini s tration and
defense ex penses.
Insurance shall bt:: in full fore<: and effect commencing on the first day of !he term of this Lea se .
Each insurance policy rc4uircd by t hi s Lea se shall :
I . Be endorsed to sta te thut CO\'erage s h al I not be suspended. voided. canceled by eit her
pany. reduced in co\'eragc or in limir s except after thirt) (30) da ys' prior written
noricc by certi fied mail. n.:tu m receipt n!4ueste<l. has been gi\ en to the I own.
1 Include a wai ,·er o f all right s of subrogation against the Town arn.J !he membe rs of the
Town Council and i.:lcctivc o r ap poin rive officers or employees. and each run y s hall
I ~a ~e .·\grt•cmcn1 ·Museum~ of I o~ Gato~
(/,\SERT D..I TE)
E:<hihit c Pag e 29 o f J(I
indemnify the other against any loss or expense including reasonable attorney fees,
resulting from the failure to obtain such waiver.
3. Name the Town of Los Gatos as a loss payee on the property policy.
4. Provide that the Town, its officers. officials. employees, agents and volunteers are to
be covered as insureds as respects : liability arising out of activities perfonned by or
on behalf of the Lessee; products and completed operations of the Lessee; premi ses
owned, occupied or used by the Lessee; or automobiles owned, leased, hired or
borrowed by the Lessee. The coverage shall contain no special limitations on the
scope of protection afforded to the Town, its officers, officials, employees, agents or
volunteers.
5. Prov ide that for any claims related to this Lease, the Lessee's insurance coverage shall
be primary insurance as respects the Town, its officers, officials, employees, agents
and volunteers. Any insurance or self-insurance maintained by the Town, its officers,
officials, employees, agents or volunteers shall be excess of the Lessee's insurance
and shall not contribute with it.
6. Provide that any failure to comply with reporting or other provisions of the policies
including breaches of warranties shall not affect coverage provided to the Town, its
officers, ofticials. employees. agents or volunteers.
7. Provide that Lessee's insurance shall apply separately to each insured against whom
claim is made or suit is brought, except with respect to the limits of the insurer's
liability.
8 . Lessee ai:.rrees to promptly pay to Town as Additional Rent, upon demand, the amount
of any increase in the rate of in surance on the Premises or on any other part of
Building th at results by rea son of Lessee's act(s) or Lessee's permitting certain
activities to take place.
Acceptabilitv of Insurers
All insurance policies shall be issued by Califomia-a<lmitted carriers having current A .M. Best's
ratings of no lower than A-:Vll.
Lease Agn::e mt:tWMusc ums o f Lo s Gatos
(/]\'SERT DA Tt:)
L:.xhibit C Page 30 of ,3 0