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Attachment 05LEASE PROVISIONS LEASE AGREEJ\IENT BETWEEi\ TOWN OF LOS GATOS ANO LOS GATOS MUSEUM ASSOCIAT IO N TABLE OF CONTE!\TS 'HoJ( _ _j =! · .1 ._~ .~ 1111.__ • • •LI> 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 Lc;i~<' \;!ft't'111cn1 .\.J11.,e11111 .\ of Lo.\ Gatos 1 f.\SER TD -4 TE 1TPED1 -;-. j 0 ~ (;;· $' ~ ~ § ., ~ ;.J\_ ,0 I' ! ~--....-.----::. --..:;,,.:-;..:.,..-::. ---=--=RI. I - I z ~;; g.s. ::>'!?. " ,, ._ .......... "4to.l t .. . ------u------ if --- I I I I I I I I I I I I TOWS or LOS GATOS CIYIC CE~TER Fonner Library Space Rtno•·ation 11 0 E . M ain Succt Lo> GalO>. CA 950~(1 I I I I I 1, ,, 1. , H •i a ,. J I I I d-=-------- ----_-,,-..,..-----. i• ~t ....~ n ,~' ----i~ ... ~-. L ,~ I r '~ • ·.&. ·~--._ .. , ·•-C..O•Mlk ··--~ ,.,.,... -......... ., .. 1£/lA~ !";~~~~..:~!~~T~-~~~. :. .... ·.,"··-.. _oA , ..... D ., i · ••• 'I ;: I i L---- ,, __ n I r ____ JiJ i I ~ ~~ l ~1 I .1-.-r- • •Z: I ! . : . = 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