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HomeMy WebLinkAbout2004-03-01 City Council (2)City of Palo Alto City Manager’s Report TO:HONORABLE CITY COUNCIL 12 FROM:CITY MANAGER DEPARTMENT: ADMINISTRATIVE SERVICES DATE:MARCH 1, 2004 CMR: 162:04 SUBJECT:LEASE OF SPACE AT THE CUBBERLEY COMMUNITY CENTER TO THE FRIENDS OF THE PALO ALTO LIBRARY RECOMMENDATION Staff recommends that Council approve the attached lease with the Friends of the Palo Alto Library (FOPAL) of two rooms, K6 and KT, at the Cubberley Community Center. BACKGROUND Since 1938, the Friends of the Palo Alto Library (FOPAL) has been the volunteer and funding support organization for the Palo Alto Library system. One element of FOPAL’s progam is a used bookselting and recycling operation that collects and sells used books that come from many sources, including City library discards and donations from other organizations and individuals. Through this operation, FOPAL has been able to contribute substantial funding to the Library system. FOPAL occupied space in the Terman branch library since its opening in 1985. In 1999, two classrooms in the adjacent wing of the Terman site were vacated, and FOPAL expanded its book selling operation into these rooms. In September 2000, three more classrooms were vacated, and FOPAL again expanded its operation into the entire wing of five classrooms.. Because the City was in the process of returning the Terman site to the Palo Alto Unified School District (PAUSD), FOPAL was not charged rent. With the additional space, FOPAL was able to expand its progam and thus increase its monetary contributions to the library. In 2003, the total amount contributed to the library was $120,000. CMR:162:04 Page 1 of 4 When PAUSD took ownership of the Terman site, FOPAL lost the use of the classrooms but remained in the branch library building. The City provided space for the group’s book sale operation at a new re-locatable building located on the Cubberley site. The cost to the City to install the building was approximately $90,000, plus an annual lease payment for the re-locatable building of $26,000. FOPAL reimburses the City a portion or all of the lease l~ayment depending on its total revenue generation each year.. The re-locatable building has provided sufficient room for FOPAL operations when combined with the space it occupied at the Terman Library. As of December 31, 2003, the group lost the use of the Terman Library space and has asked to lease two vacant classrooms on the Cubberley site. DISCUSSION On December 31, 2003, a non-profit tenant vacated rooms K6iK7, H6 and L1 at Cubberley. Because the mission of the FOPAL book selling operation is to provide funds for Library operational and capital uses, and because the loss of space at Terman has left it without enough appropriate space to conduct business operations, FOPAL has requested that the City grant a year-to-year lease to the organization for rooms K6 and KT, which total 1,700 square feet. Based on its free rent at Terman, FOPAL has also requested that it not be required to pay the same rental as other Cubberley non-profits ($1.00 per square foot mininmm) or, preferably, no rent at all. However, unlike the Terman site, which was owned by the City, the Cubberley site is leased. The City is obligated to make its payment to the School District, and any loss in revenue from City subtenants has to be made up from the General Fund. Therefore, staff negotiated with FOPAL a rent for the space starting at $.57 per square foot, the same rent rate applied to Cubberley resident artist studios. Other major terms of the lease include a term up to 6 years, renewable each year at FOPAL’s option conditioned upon the group using the space to provide funds for City libraries. Additional lease terms are summarized in Attachment B. RESOURCE IMPACT Prior to December 31, 2003, Cubberley rooms K6 and K7 were leased to a previous tenant at a rate of $1.68 per square foot for a total of $34,380 per year. At $0.57 per square foot, FOPAL will be paying $11,628 annually. Consequently, the net loss to Cubberley’s revenue is projected to be approximately $22,752. However, one of FOPAL’s core missions is to be a fundraising arm of the Library program and, as such, has contributed considerable funding to the Library’s operational budget and ca!~ital projects over many years. CMR: 162:04 Page 2 of 4 POLICY IMPLICATIONS The proposed lease is consistent with City Policies and Procedures 1-11, Leased Use of City Land/Facilities which requires that operation of facilities on city-owned property further a public use or provide a public benefit, that the leased use be compatible with the primary public use of the property, and that opportunities be provided to others to respond to possible use of the space.. In accordance with Section C, para~aph la, of the policy a notice of intent to award a lease was published in the Palo Alto weekly and mailed to residential property owners in-lieu of a Request for Proposal process to lease space The notice provided the public 30 days notice that a public hearing on award of the lease would be held before the Council on this date. However, the recommendation is not consistent with the current rental policy at Cubberley which indicates a rate of a minimum of $1.00 per square foot for non-profit ~oups. It should be noted that there are currently twelve interested parties, including day-care providers, on a waiting list for space in the K or L wings, and this space could be leased to another goup or organization for the same or higher rent as the previous tenant, $1.68 per square foot or $34,380 annually. In addition, FOPAL is the only "friends" group that requires space from the City to function. Over the past five years other groups such as the Art Center Foundation, Friends of the Jr. Museum and Friends of the Children’s Theatre have donated large sums of funding, without the use of City space. (As an example, the Arts Center Foundation has contributed $1.5 million over the past five years.) This recommendation may set a precedent that other similar groups may view as an opportunity to request space for its future operations. Such a situation could be devastating to Cubberley’s financial health, since one of Cubberley’s missions is to cover its direct operating costs thorough rentals and leases. ENVIRONMENTAL ASSESSMENT The project is categorically exempt from the requirements of the California Environmental Quality Act (CEQA) pursuant to Section 15301 (Existing Facilities) of the CEQA guidelines. ATTACHMENTS Attachment A Lease Sumrnary Attachment B: Lease Ageement CMR: 162:04 Page 3 of 4 PREPARED BY: MARTHA MILLER Financial Analyst DEPARTMENT HEAD APPROVAL:,~ATS ~’~. ~"~----- Director/Adminiiqtrative Services CITY MANAGER APPROVAL: HARRISON Assistant City Manager cc: Friends of the Palo Alto Libraw CMR: 162:04 Page 4 of 4 Attachment A Lease Summary, Friends of the Palo Alto Library (FOPAL) Book Selling Operation Cubberley Lease Points: The term of the lease will be up to six years, renewable annually conditioned upon the ~oup using the space to provide funds for City libraries and being able to afford the monthly rent obligation. 2.This monthly rate will be the same as the Cubberley artist’s rate, which is presently $0.57 per square foot. The rate will be linked directly to the artist’s rate and will increase at the same leve! as the artists’ rate. 3. The City can cancel the lease should FOPAL’s book selling operation terminate. 4.FOPAL will provide all necessary custodia! maintenance of the facilities they occupy. No structural improvements or facilities shall be constructed, erected, altered, or made within the premises without the prior written consent of the City Manager or his designee. FOPAL may, at any time and at its sole expense, install and place business fixtures and equipment within any building constructed by City, provided such fixtures and installation have been reviewed and approved by the Manager of the Cubberley Community Center, and are removed and all areas restored by FOPAL upon the termination of the lease. ATTACHMENT B FRIENDS OF THE PALO ALTO LIBRARY LEASE THIS LEASE is made this day of ,2004 by and between the City of Palo Alto, a municipal corporation, (CITY) and Friends of the Palo Alto Library, a non-profit organization (TENANT). RECITALS CITY desires to develop the CITY owned portion of the Cubberley site into a community facility. B.TENANT proposes to lease a portion of the Cubberley site (rooms K6 and KT). NOW THEREFORE, in consideration of these premises, the parties hereto mutually agee as follows: I.PREMISES (RL 3.0) S Subject to the terms and conditions set forth in this ageement, CITY LEASES to TENANT that certain property (PREMISES) described and shown in "EXHIBIT B". EXHIBIT B is attached to, and by this reference, made a part of this LEASE. Unless specifically provided elsewhere in this LEASE, TENANT accepts the PREMISES "as-is" on the date of this LEASE. II.PURPOSE (RL 4.0) S The purpose of this LEASE is to provide for the use of 1,700 square feet, identified as rooms K6 and K7 for storage, office space and book and other Library related sales and to provide funds for City Libraries. III. REQUIRED AND OPTIONAL SERVICES AND USES (RL 5.0) S In furtherance of the purposes stated above, the following required and optional services and uses shall be provided, permitted or prohibited: A. Required Services and Uses. Throughout the term of this LEASE TENANT shall provide the following services and activities: 1.Use space for storage, office space and book and other Library related sales. 2.TENANT may install wall hung bookcases. All wall holes will need to be patched upon expiration of this LEASE. 3.All boo’ks are to be at least three (3) feet from all breaker panels and water heater. 4.Sale activity need to be compatible with surrounding TENANTs activity (ie: Artist Open Studios, daycare providers and all other surrounding tenants). 5. All boo’ks and boxes need to be placed inside at the end of each day. B. Optional Services and Uses. Subject to the prior written approval of the City Manager, TENANT may also use the PREMISES to provide additional services and uses which are ancillary to and compatible with the required services and uses stated above and not in conflict with the required uses. Approval of optional services and uses shall be within the sole discretion of the City Manager. C. Prohibited Uses. The following uses are prohibited: 1) The serving and!or sale of alcoholic beverages; 2) conducting games of chance on the premises. IV. TERM (RL 6.0) S The term of this LEASE shal! be sLx years, commencing March __, 2004, renewable annually by TENANT conditioned upon TENANT using the space to provide funds for Cit3, libraries and being able to afr%rd the monthly rent obligation. V.CONSIDERATION RENT (~ 7.0) NS As consideration for TENANT’S use of the PREMISES in accordance with the terms and conditions of this LEASE, TENANT agees to pay to CITY $969.00 per month, due and payable in accordance with Clause VIII (RENT PAYMENT PROCEDURE). VI. REVISION OF RENTALS (RL 7.3) NS The rental specified in Clause V (CONSIDERATION/RENT shall be subject to automatic annual adjustments in proportion to changes in the Consumer Price Index, All Urban Consumers, (base years 1982- 1984 = 100) for San Francisco-Oakland-San Jose CMSA published by the U.S. Department of Labor, Bureau of Labor Statistics or any replacement index published by said Bureau. The automatic adjustment shall become effective on July 1, each year and shall be calculated in accordance with the fo!!owkng formu!a: x = A (B!C) Where: X =Adjusted rental. A =Rental at the Commencement of the LEASE. B =Average monthly index for the 12 calendar months ending with and including the index published just prior to the month in which each rental rate adjustment is to become effective. C = Average monthly index for the 12 calendar months ending with and including the index published just prior to commencement of this LEASE. VII.CHARGE FOR UNAUTHORIZED SERVICES AND USES (RL 7.4) S TENANT shal! pay CITY a sum equal to one hundred percent (100%) of the goss receipts derived from the use of these premises for an?, service or use that is not pe~qnitted or authorized by Clause IIt (REQUIRED & OPTIONAL USES). This payment is subject to the "due date" requirement provided in Clause 13( (CI-MJ1.GE FOR LATE PAY!vIF~NT). The existence of such charge or the pa.~,ment or receipt of money under this clause, does not constitute an authorization of a particular service or use and does not constitute a waiver of CITY’S right to terminate such service or use. VIII.RENT PAYMENT PROCEDURE (RL 10.0) S A. On or before the first day of each month; provided that the first month’s rent be pro-rated in accordance with the commencement of this LEASE. TENANT shall pay to CITY rent as set forth in Clause V (CONSIDERATION/RENT). ~rein ~1~a~1 cutmnence upon the commencement of this LEASE.x~-~ ~, ~ um~.auu~ to pay Should this LEASE commence on a date other than the first of any month, rent for the first and last month oftkis LEASE shall be prorated assuming a 30-day month. C. Rental pa.-vrnents shall be delivered to the Revenue Collections Division, 250 Hamilton Avenue, PO Box 10250, Palo Alto, CA 94303. The designated place of payment may be changed at any time by CITY upon ten (10) days written notice to TENANT. Rental payments may be made by check made payable to the City of Palo Alto, however, TENANT assumes all risk of loss if payments are made by mail. D. Acceptance of Late or Incorrect Rent: TENANT specifically agees that acceptance of any late or incorrect rentals submitted by TENANT shall not constitute an acquiescence or waiver by CITY and shall not prevent CITY from enforcing Clause IX (CHARGE FOR LATE PAYMENT) or any other remedy provided in this LEASE. IX. CHARGE FOR LATE PAY1V[ENT (RL 11.1) S If any payment of rent as specified in Clause V (CONSIDERATION/RENT) or of any other sum due CITY is not received by CITY, a late charge equal to one percent (1%) of the payment due and unpaid plus an administrative fee of $50.00 shall be added to the payment, and the total sum shall become immediately due and payable to CITY. Acceptance of late charges and/or an), portion of the overdue payment by CITY shall in no event constitute a waiver of TENANT’S default with respect to such overdue payment, nor prevent CITY from exercising any of the other rig_hts and remedies ganted hereunder or by any provision of law. X. SECURITY DEPOSIT (RL 13.0) S A securi~, deposit in the sum of $ 500.00 shall be provided to CITY by TENANT. The security deposit shall take one of the forms set out below and shall guarantee TENANT’S full and faithful performance of all the terms, covenants, and conditions of this LEASE. A.Cash. B. The assignment to CITY of a savings deposit held in a financial institution in Santa Clara or San Mateo Count?.; acceptable to CITY. At a minimum, such assignment shall be evidenced by the deliveR, to CITY of the original passbook reflecting the savings deposit and a written assi~rnent of said deposit to CITY in a form approved by the Real Property Manager. C. A Time Certificate of Deposit from a fmancial institution in Santa Clara or San Mateo County wherein the principal sum is made payable to CITY or order. Both the financial institution and the form of the certificate must be approved by the Real Property Manager. D. A Letter of Credit or other instrmnent of credit from a fmancial institution, subject to regulation by the state or federal government, pledging that fund necessmo, to secure performance of the LEASE terms, covenants, and conditions, are on deposit and guaranteed for payment, and a~eeing that the ftmds shall be trust funds securing TENANT’S performance and that all or an), part shall be paid to CITY or order upon demand by CITY. Both the financial institution(s) and the form of the instrument(s) must be approved by the Real Prope~, Manager. Regardless of the form in which TENANT elects to make said security deposit, all or any portion of the principal sum shall be available unconditionally to CITY for correcting any default or breach of this LEASE incurred by CITY as a result of the failure by TENANT, its successors or assigns, to faithfully perform all of the terms, covenants, and conditions of this LEASE. Should TENANT elect to provide a Time Certificate of Deposit, Letter of Credit, or other instrument of credit, hereinafter collectively referred to as "iNSTRD-M_~NT", to fuifiii the security deposit requirements of fhis LEASE, the INSTRUMENT shall contain a provision whereby the institution issuing the INSTRUMENT agees to provide CITY with written notice of its intent not to renew the INSTRUMENT at least thirty (30) days prior to expiration or termination of the INSTRUMENT. If TENANT has not provided CITY with an acceptable alternate form of securiD, deposit at least ten (10) days prior to expiration or termination of the INSTRUMENT, CITY may demand and obtain from the institution issuing the INSTRUMENT, the amount secured by the INSTRUMENT as satisfaction of the security deposit provision of this LEASE. Should TENANT elect to assign the savings deposit to CITY, or provide an alternate INSTRUMENT, to fulfill the security deposit requirements of this LEASE, the assig~-nent, or issuance of the INSTRUMENT shall have the effect of releasing the depositor or creditor therein from liability on account of the pa.vrnent of any or all of the principal sum to CITY or order upon demand of CITY. The ageement entered into by TENANT with a financial institution to establish the deposit necessary to permit assi~atment or issuance of a certificate as provided above, may a!low the payment of interest accruing on account of the deposit to TENANT, or order. TENANT shall maintain the required securib, deposit throug_hout the LEASE term. Failure to do so shall be deemed a default and may be gounds for immediate termination of this LEASE. The security deposit shall be rebated, reassi~maed, released, or endorsed to TENANT on order, as applicable, at the end of the LEASE term, provided TENANT has fully and faithfully performed each and ever?, term, covenant, and condition of-this LEASE. XI.MAINTENANCE AND REPAIR (RL 14.3) NS TENANT at its expense shall perform all interior maintenance and repairs including, but not limited to; plumbing, painting, li~-_Jat bulb and ballast replacement, window glass replacement,, floor treatment, draper?, and carpet cleaning, door and window hardware replacement, space heater or any other TENANT installed heating/air ~onditioning system, interior pest control and an?, special securi~, devises. CITY shall be responsible for exterior maintenance and repair of the structure and main support systems, including roof repair, main electrical system repair, exterior painting and structural repairs required to keep the PREMISES in a condition suitable to satisfy the purpose of the LEASE. However in the event that the estimated cost of repair exceeds rift), percent (50%) of the expected remaining future income to CITY under this LEASE, CITY may decide not to make such repairs. In the event CITY decides not to make such repairs, and if TENANT chooses not to make such necessary repairs, this ageement shall immediately terminate and TENANT shall forthwith vacate the PREMISES. CITY’S decision shall be given to TENANT in writing within ten (10) days from the occurrence of damage. TENANT shall not be ~anted relief from rent or be given other consideration if and when CITY performs maintenance and repair obligations as required herein. TENANT expressly agees to maintain the PREMISES in a safe, clean, wholesome, and sanitary, condition and in substantial repair to the complete satisfaction of CITY and in compliance with all applicable laws. TENANT further a~ees to provide approved containers for trash and garbage and to keep the PREMISES free and clear of rubbish and litter. CITY shall have the right to enter upon and inspect the PREiviISES at any time for cleanliness and safety. Notwithstanding the above provisions, TENANT shall be responsible for damage or repair to PREMISES or any of its support systems resulting from TENANT’S use of the PP,_EMISES and not occasioned by normal wear and tear, including glass breakage. TENANT shall design.mate in ~z~iting to CITY an on-site representative who shall be responsible for the day- to-day operation and level of maintenance, cleanliness, and general order. If TENANT fails to maintain or make repairs or replacements as required herein, CITY may noti~ TEN.aNT in writing of each failure. Should TENANT fail to correct the situation within a reasonable time thereafter, as established by the City Manager, the Real Property Manager may make, or cause to be made, the necessary corrections and the cost thereo~ including but not limited to the cost of labor, materials, and equipment and a fifteen percent (15%) charge for administration and overhead, shall be paid by TENANT within ten (10) days of receipt of a statement of the cost from the Real Property. Manager. CITY may, at its option, choose other remedies available herein, or available by law. XII.JANITORIAL AND LANDSCAPING SERVICE NS TENANT will provide janitorial service to the PREMISES and shall clean the windows inside and outside as needed. CITY shall maintain the landscaping, parking lots and walkw~,ays. XIII.TOXIC MATERIALS (ILL 14.5) S A. "Toxic Materials" for the purposes of this Section are defined as any hazardous, toxic, or radioactive materials, including, but not limited to, those materials identified in Sections 66680 throu~ 66685 of Title 22 of the California Administrative Code, Division 4, Chapter 30, as amended from time to time. B. TENANT shall indemnify and hold CITY harmless from an?, and all costs, claims, judgements, losses, demands, causes of action, proceedings or hearings, including CITY’S attorneys’ fees and court costs relating to the storage, placement, and use of Toxic Materials on or about the LEASED Site by TENANT. TENANT shall reimburse CITY for (i) all costs of clean-up or other alterations to the LEASED Site, or disposal of Toxic Materials; and (ii) any diminution in the fair market value of the LEASED Site caused by XIII shall survive the expiration of the LEASE term. XIV.CONSTRUCTION AND!OR ALTERATION BY TENANT (RL 15.1) NS A. CITY’S Consent. No structures, improvements, or facilities shall be constructed, erected, altered, or made within the PREMISES without the prior written consent of City Council if required by City, of Palo Alto procedures or ordinances, or other~,ise by the Cib, Manager. Major revisions will also require prior u~tten approval by DISTRICT and/or State Architect. An?, conditions relating to the manner, method, design, and construction of the structures, improvements, or facilities established by CITY, District and State Architect shall be conditions of this clause as thou~ originally stated herein. TENANT may, at an5’ time and at its sole expense, install and place business fixX-ures and equipment within any building constructed by CITY, provided such fixtures and installation have been reviewed and approved by the City Manager, or designee. B. Strict Compliance with Plans and Specifications. All improvements constructed by TENANT ~dthin the PREMISES shall be constructed in an efficient and workmanlike manner and in strict compliance with detailed plans and specifications approved by the City Council if required by City of Palo Alto procedures or ordinances or otherwise by the Cib, Manager, or DISTRICT designee, and applicable City of Palo Alto codes and ordinances. C. Certificate of Inspection. Upon completion of construction of any building, TENANT shall submit to the Real Property Manager, a Certificate of Inspection, verifying that the construction was completed in conformance with Title 20 of the California Code of Regulations for residential construction, or in conformance with Title 24 of the California Code of R%_~aiations for non-residential construction. All improvements constructed, erected or installed upon the PREMISES must be free and clear of all liens, claims, or IiabilJty for labor or material. CITY may at its option require TENANT to remove all TENANT- constructed improvements, including restroom facilities, upon termination of this LEASE. shall remain in TENANT, and replacements, substitutions and modifications thereof may be made by TENANT throughout the term of this LEASE. TENANT may remove such fixTares and furnishings upon termination of this LEASE, provided that TENANT shall repair to th.e satisfaction of the CITY an?, damage to the PREMISES and improvements caused by such removal and; provided that usual and customaD, ligJating, plumbing and heating fix~:ures may remain upon the PREMISES, should CITY elect to keep said improvements, upon ternaination of d3_is LEASE. D. Prior to commencement of any work, TENANT shall pay the amount of any increase in premiums on insurance policies provided for herein because of endorsements to be made covering the risk during the course of work. In addition, if the estimated cost of work shall exceed One Thousand Dollars ($1,000.00), TENANT shall, without cost to CITY, furnish CITY with a performance bond written by a surety acceptable to CITY in an amount equal to the estimated cost of the work, guaranteeing the completion of work, free and clear of liens, encumbrances, and security, interest, according to the approved plans and specifications. XV.UTILITIES (RL t7.1) NS CITY shall provide and pay for gas, electricity,, water, sewer and refuse collection services on PREMISES. xa, rI. INSURANCE (RL 18.0) NS TENANT shall maintain insurance acceptable to CITY in full force and effect throughout the term of this LEASE. Minimnm Scope ............ Coverage shall be at least as broad as: 1)Insurance Sen, ices Office Commercial General Liability coverage (occurrence form CG 0001). The policy or policies of insurance maintained by TENA_NT shall provide the following limits and coverages: POLICY MINIMUM LIMITS OF LIABILITY (;)COMlVmRCIAL GENERAL LIABILITY Including products and completed operations, broad form contractual, and personal injury. Bodily Injury Property Damage Personal Injury. $1,000,000 ea. person $1,000,000ea. occurrence $1,000,000 aggregate $1,000,000ea. occurrence $1,000,000ea. occurrence (2) PROPERTY Amount not less than 100% of actual replacement cost for the TENANT’S trade fixtures, merchandise, and other personal properb* providing protection against peril included with "Fire and Extended coverage." An}, deductibles or self-insured retentions must be declared to and approved by the CITY. At the option of the CITY either: the insurer shall reduce or eliminate such deductibles or self-insured retentions as respects the CITY, its officers, officials, employees and volunteers. Insurance shall be in full force and effect commencing on the first day of the term of this LEASE. Each insurance policy required by this LEASE sha!l contain the following clauses: "Each insurance policy required by this clause shall be endorsed to state that coverage shall not be suspended, voided, canceled by either part3,, .reduced in coverage or in limits except after thirty (30) days’ prior written notice by certified mail, return receipt requested, has been Nven to the CITY." "All rights of subrogation are hereby waived against the CITY OF PALO ALTO and the members of the City Council and elective or appointive officers or employees, when acting within the scope of their employment or appointment." The CITY OF PALO ALTO is named as an additional insured. "The CITY, its officers, officials, employees, agents and volunteers are to be covered as insureds as respects: liability arising out of activities performed by or on behalf of the TENANT; products and completed operations of the TENANT; premises owned, occupied or used by the TENANT; or automobiles owned, leased, hired or borrowed by the TENANT. The coverage shall contain no special limitations on the scope of "For any claims related to this LEASE, the TENANT’s insurance coverage shall be primary insurance as respects the CITY, its officers, officials, employees, agents and volunteers. Any insurance or self-insurance maintained by the CITY, its officers, officials, employees, agents or volunteers shall be excess of the TENANT’s insurance and shall not contribute with it." "Any failure to comply with reporting or other provisions of the policies including breaches of warranties shall not affect coverage provided to the CITY, its officers, officials, employees, agents or volunteers." Acceptabilitw of Insurers Insurance is to be placed with insurers with a current A.M. Best’s rating of no less than A:VII who are authorized to do business in California. XVII.INSURANCE (RL 18.2) TENANT agees to deposit with the Real Property Manager, on or before the effective date of this LEASE, certificates of insurance necessary to satisfy CITY that the insurance provisions of this LEASE have been complied with, and to keep such insurance in effect and the certificates therefore on deposit with CITY during the entire term of this LEASE. Should TENANT not provide evidence of such required coverage at least three (3) days prior to the expiration of any existing insurance coverage, CITY may purchase such insurance, on behalf of and at the expense of TENANT to provide six months of coverage. CITY shall retain the rig2at at aw time to review the coverage, form, and amount of the insurance required hereby. If, in the opinion of the Risk Manager, the insurance provisions in this LEASE do not provide adequate protection for CITY and for members of the public using the PREMISES, the Real Property ~,,’I,~.,ar,~,- may ,.~q~,irx~ Tg’NIz~’bJT ira aht~ain in<nrnnr’~ m~’]nlant in envo.rac, e. fnrrn, a~d amount to orovide adequate protection as determined by the Risk Manager. CITY’S requirements shall be reasonable and shall be designed to assure protection from and against the "kind and extent of risk which exists at the time a change in insurance is required. The Real Property Manager shall notify TENANT in writing of changes in the insurance requirements. If TENANT does not deposit copies of acceptable insurance policies with CITY incorporating such changes within sixty, (60) days of receipt of such notice, or in the event TENANT fails to maintain in effect any, required insurance coverage, TENANT shal! be in default under this LEASE without further notice to TENANT. Such failure shall constitute a material breach and shall be gounds for immediate termination of this LEASE at the option of CITY. The procuring of such required policy or policies of insurance shall not be construed to limit TENANT’S liability hereunder nor to fulfill the indemnification provision and requirements of this LEASE. Notwithstanding the policy or policies of insurance, TENANT shall be obligated for the full and total amount of any damage, injury, or loss caused by or connected with this LEASE or with use or occupancy of the PREMISES. XVIII. ASSIGNING, SUBLETTING, AND ENCUMBERING PROHIBITED (RL 19. !)NS Since CITY has relied on the specific backgound and capabilities of TENANT in awarding this LEASE, any mortgage, pledge, hypothecation, encumbrance, transfer, LEASE, or assi_~znent (collectively referred to as ENCUMBRANCE) of TENANT’S interest in the PREMISES, or any part or portion thereof, is prohibited, excepting any LEASE as noted in Exhibit C (Sabbatical/Professional Leave Time). Any attempted ENCUMBRANCE shall be null and void and shall confer no right, title, or interest in or to this If TENANT hereunder is a corporation or an unincorporated association or parmership, the ENCUMBRANCE of any stock or interest in the corporation, association, or parmership which, in the aggegate over any consecutive two-year period, exceeds twenty-five percent (25%) shall be deemed an assi~mn_ment within the meaning of this clause. XIX.DEFAULT IN TERMS OF THE LEASE BY TENANT (RL 20.0) S Should TENANT default in the performance of an?, covenant, condition, or a~eement contained in this LEASE and such default is not corrected within thirty (30) days of receipt of a notice of default fi’om CITY, CITY may: A. Terminate this LEASE and all rights of TENANT and those who claim under TENANT, stemming from this LEASE, shall end at the time of such termination; B. At CITY’S sole option, cure any such default by performance of any act, including pa.vment of money, and the cost thereo5 plus reasonable admJNstrative cost, shall become immediately due and payable by TENANT to CITY; C. Seek an action or suit in equity to enjoin any acts or things which may be unlawful or in violation of the ri~Jats of CITY; D. Seek a mandamus or other suit, action of proceeding at law or in equity to enforce its rights against TENANT and an?, of its officers, agents, and employees and its assi~s, and to compel it to perform and carry out its duties and obligations under the law and its covenants and ageements with CITY as provided herein; or E.Pursue an?, other remedy available by law or specifically provided in other clauses of this LEASE. t n? ~ rlo~e~It "~,hi,"h r’nnnr~t ron~annhly ho anrad within thi .rty (’q0) clays, TENANT shall have a reasonable period of time (as determined by the City Manager) to cure the default. Each and all of the remedies given to CITY hereunder or by any law now or hereafter enacted, are cumulative and the exercise of one rig.ht or remedy shall not impair the right to CITY to exercise any or all other remedies. In case any suit, action or proceeding to enforce an?, right or exercise any remedy shall be brought or taken and then discontinued or abandoned, then, and in every such case, CITY and TENANT shall be restored to its and their former position and rights and remedies as if no such suit, action or proceedings had been brought or taken. In addition to a violation or breach of an?, other provision of this LEASE, TENANT shall be considered to be in default under this LEASE should TENANT: A. voluntarily file or have involuntarily filed against it any petition under any bav2maptcy or insolvency act or law; B.be adjudicated a bank_’rupt; or C.attempt to make a general assi~ament for the benefit of its creditors. XX.LIMITATION OF THE LEASEHOLD (RL 22.0) S This LEASE and the rigJats and privileges ganted TENANT in and to the PREiV[ISES are subject to all covenants, conditions, restrictions, and physical or legal encumbrances, including those which are set out in the September 1, 1989, Lease and Covenant Not To Develop (LEASE) by and between DISTRICT AND CITY. (A cop5’ of the LEASE is on file at 250 Hamilton Avenue, City Hall, Real Estate Division, for your the conveyance to TENANVT of rights in the PREMISES which exceed those ov~med by CITY. X_’~. NOTICES (RL 23.0) S All notices, statements, demands, requests, consents, approvals, authorizations, offers, ageements, appointments or desi~maations hereunder given by either party to the other, shall be in m-iting and shall be sufficiently given and served upon the other parr5, if(l) personally served, (2) sent by United States Certified mail, postage, prepaid, (3) sent by express deliver?, service, or (4) in the case of a facsimile, if sent to the telephone number(s) set forth below during normal business hours of the receiving part3,, and followed within 48 hours by deliver), of hard copy of the material sent by facsimile, in accordance with (1), (2) or (3) above. Personal service shall include, without limitation, service by deliver?, sen,ice and service by facsimile transmission. Delivery of notices properly addressed shall be deemed complete when the notice is physically delivered to the Real Property Manager. All notices pursuant to this LEASE shall be addressed as set forth below or as either part)~ may subsequently desigllate by ~s~-itten notice. TO:CITY TO: TENANT Real Property Manager City of Palo Alto P.O. Box 10250 Palo Alto, CA 94303 FAX(650) 323-174 i Jeff Levinsk3,, President Friends of the Palo Alto Librala2 Box 41 Palo Alto, CA 94302 650/325-9483 with a copy to: City Clerk, City of Palo Alto P.O. Box 10250 250 Hamilton Avenue Palo Alto, CA 94303 FAX: (650) 329-2646 and City Attorney, City of Palo Alto P.O. Box 10250 250 Hamilton Avenue Palo Alto CA 94303 FAX: (650) 329-2646 XDAII. ATTACHMENT TO LEASE (RL 24.0) S This LEASE includes the following exhibits, which are attached hereto and by this reference incorporated into this LEASE: Exhibit A - General Conditions Exhibit B - Description of LEASED Premises The inclusion of clauses in Exhibit A (GENERAL CONDITIONS) is not in an5’ way intended to lessen the importance of these clauses, but is merely done to enhance the organization of various clauses and this LEASE. With respect to the existence or use of "Hazardous Materials" as defined in 3 I(A) of the General Conditions, CITY represents to TENANT to the best of CITY’S "knowledge as of the date of execution of this LEASE and based on no other inquiry, than (i) information received from the Palo Alto Unified School District, the master landlord of the LEASEd premises, and (ii) the making and examination of a study of the LEASEd premises undertaken by D.vnamac Corporation with respect to the existence or non-existence of friable and non-friable asbestos and asbestos-containing construction materials, that the LEASE premises is in compliance with all laws regulating the handling, transportation, storage, treatment, use and disposition of Hazardous Materials, including asbestos and asbestos-containing construction materials. IN V~qTNESS WHEREOF, the parties have executed this LEASE the day and year first above ~q-itten. CITY: CITY OF PALO ALTO (CITY) BY: Assistant City Manager TENANT: APPROVED AS TO FORM: By: Sr. Assistant Ciu~ Attorney RECOMMENDED AS TO FORM: By: ka~n~ Rea! Prope..rb RECO MEN-DED FOR .APPROVAL: By: Director, Community Services Department 10 EXHIBIT A GENERAL CONDITIONS 1. DEFINITIONS (RL 27.1) S CITY shall mean the City Council of the City of Palo Alto, a municipal corporation. The City Manager is hereby authorized to take an3, actions under this LEASE on behalf of CITY except for termination of this LEASE. Clauses in this LEASE refer to specific officers or employees of CITY. Should these positions be eliminated or the title changes, it is understood and ageed that such references shall be considered to be to the new title for renamed positions or to the replacement official designated with the responsibilities of any eliminated position. Any reference to a City. officer or employee includes a reference to the officer’s or employee’s designated representative. 2. PARTNERSHIP/CORPORATE AUTHORITY & LIABILITY (RL 27.2) S If TENANT is a partnership, each general partner: A.represents and warrants that the partnership is a duly qualified partnership authorized to do business in Santa Clara County; and B.shall be jointly and severally liable for performance of the terms and provisions of this LEASE. If TENANT is a corporation, each individual si~m~ing this LEASE on behalf of TENANT represents and warrants that; A. he is duly authorized to do so in accordance with an adopted Resolution of TENANT’S Board of Directors or in accordance with the Bylaws of the corporation; and B.TENANT is a duly qualified corporation authorized to do business in State of California. As used in this LEASE, the term "TENANT" shall include TENANT, its agents, sublessees, concessionaires, or licensees, or any person acting under contract with TENANT; however, the definition of TENANT used herein, shall not be construed to authorize or permit an?, LEASE or licenses not authorized or permit-ted elsewhere in this LEASE. 3 TIM2 (RL -7.~) S Time is of the essence of this LEASE. 4. ACCESS TO PREMISES NS TENANT agees not to unreasonably obstruct the sidewalks, entry passages, or halls and will not prevent from its respective ~eas. TE.N_~_NT ~nd its emp!oyees and invitees shall have the right, in common with other persons, to use driveways and parking areas located on the propert3, provided that such use shall be subject to such reasonable rules and reg~alations as may from time to time be adopted by CITY. 5.SIGNS (RL 27.4) S 1! TENANT a~ees not to construct, maintain, or allow any sign to be placed upon the PREMISES or within or around the Cubberley site, except as may be approved by CITY. Unapproved signs, banners, etc., will be removed by CITY. 6.PERMITS AND LICENSES (ILL 27.5) S TENANT shall be required to obtain any and all permits and!or licenses which may be required in connection with the operation of.. and any approved TENANT construction upon, the PREMISES as set forth in this LEASE. 7.MECHANICS LIENS (RL 27.6) S TENANT shall at all times indemnify and save CITY harmless from all claims for labor or materials supplied in connection with construction, repair, alteration, or installation of structures, improvements, equipmeng or facilities within the PREMISES, and from the cost of defending against such claims, including attorney fees. TENANT shall provide CITY with at least ten (10) days written notice prior to commencement of an3’ work which could give rise to a mechanics lien or stop notice. CITY reserves the ri~_ht to entei ...... "~ ~’~"~ lu~ mc pro-poses In the event a lien is imposed upon the PREMISES as a result of such construction, repair, alteration, or installation, TENANT shall either: A.Record a valid Release of Lien; or B. Deposit sufficient cash with CITY to cover the amount of the claim on the lien in question and authorize payment t° the extent of said deposit to any subsequent judgment holder that may arise as a matter of public record from litigation with regard to lienholder claim; or C. Procure and record a bond in accordance with Section 3143 of the Civil Code, which releases the PREMISES from the claim of the lien from an?; action brought to foreclose the lien. Should TENANT fail to accomplish one of the three optional actions within fifteen (15) days after the filing of such a lien, the LEASE shall be in default and may be subject to immediate termination. 8.LEASE ORGANIZATION AND RULES OF CONSTRUCTION (RL 27.7) S Words of the masculine gender shall be deemed and construed to include correlative words of the feminine and neuter genders. Unless the context otherwise indicates, words importing the singular number shall include the plural number and vice versa, and words importing persons shall include corporations and associations, including public bodies, as well as natural persons. "’e e’.x" ....The terms n r D,. "hereof". "hereto", "herein". "hereunder" and an?, similar terms, as used in this ageement, refer to this ageement. All the terms and provisions hereof shal! be construed to effectuate the purposes set forth herein, and to sustain the validity hereof. only, are not to be considered a part hereof and shall not in any way modi~, or restrict any of the terms of provisions hereof or be considered or given any effect in construing this ageement or an?, provision hereof in ascertaining intent, if any question of intent shall arise. 9.AM2E_NrDMENTS (RL 27.8) S 12 This LEASE sets forth all of the a~eements and understandings of the parties and an), modifications must be written and properly executed by both parties. 10.UNLAWFUL USE (RL 27.9) S TENANT agees that no improvements shall be erected, placed upon, operated, nor maintained within the PREMISES, nor any business conducted or carried on therein or therefrom, in violation of the terms of this LEASE, or of an?, regulation, order of law, statute, or ordinance of a governmental agency having jurisdiction over TENANT’S use of the PREMISES. 11.NONDISCRIMINATION (RL 27.10) S TENANT and its employees shall not discriminate against any person because of race, color, religion, ancestry, age, sex, national origin or physical handicap. TENANT shall not discriminate against any employee or applicant for emplo?~ent because of race, color, religion, ancestry, sex, age, national origin or physical handicap. TENANT covenants to meet all requirements of the Palo Alto Municipal Code pertaining to nondiscrimination in emplo,vment. If TENANT is found in violation of the nondiscrimination executive order in the conduct of its activities under this LEASE by the State of California Fair Employment Practices Commission or the equivalent federal agency or officer, it shall thereby be found in default under this LEASE, and such default sha!l constitute a material breach of this LEASE. CITY shall then have the power to cancel or suspend this LEASE in whole or in part. 12.INSPECTION (RL 27.11) S CITY’S employees and agents shall have the rigdat at all reasonable times to inspect the PREMISES to determine if the provisions of this LEASE are being complied with. 13.HOLD HARM~LESS (ILL 27.12) S TENANT hereby waives all claims, liability and recourse against CITY including the right of contribution for loss or damage of or to persons or properD.’ arising from, gowing out of or in any way connected with or related to this ageement. TENANT hereby a~ees to indemnify, hold harmless and defend CITY, its officers, agents, and employees against an), and all claims, liabilit3.,, demands, damages, cost, expenses or attorneys’ fees arising out of the operation or maintenance of the property described herein or TENANT’S performance or non performance of the terms of this LEASE. In the event CITY is named as co-defendant, TENANT shall notify CITY of such fact and shall represent CITY in such legal action unless CITY undertakes to represent itself as co-defendant in such legal action, in which event TENANT shall pay to CITY its litigation costs, expenses and attorneys’ fees. 14.TAXES AND ASSESSMENTS (RL 27.13) S This LEASE may create a possessor?, interest which is subject to the payment of taxes levied on such interest. It is understood and a~eed that all taxes and assessments (including but not limited to the possessory interest tax) which become due and payable upon the PREMISES or upon fLxa-ares, equipment, or other property, installed or constructed thereon, shall be the full responsibility of TENANT and TENANT shall pay the taxes and assessments prior to delinquency. 15.SUCCESSORS IN INTEREST (RL 27.14) S Unless otherwise provided in this LEASE, the terms, covenants, and conditions contained herein shall apply to and bind the heirs, successors, executors, administrators, and assL~ms of all the parties hereto, all of whom shall be jointly and severally liable hereunder. !6.CN.CUMSTANCES WHICH EXCUSE PERFORMANCE (FORCE ]VLa~JEURE)(RL 27.15) S 13 If either party, hereto shall be delayed or prevented from the performance of any act required hereunder by reason of acts of God, restrictive governmental laws or regulations, or other cause without fault and beyond the control of the part?, obligated (financial inabili~, excepted), performance of such act shall be excused for the period of the delay and the period for the performance of any such act shall be extended for a period equivalent to the period of such delay. 17.PARTIAL 1NVALDITY (IlL 27.16) S If any term, covenant, condition, or provision of this LEASE is determined to be invalid, void, or unenforceable, by a court of competent jurisdiction, the remainder of the provisions hereof shall remain in full force and effect and shall in no way be affected, impaired, or invalidated thereby,. 18.WAIVER OF RIGHTS (RL 27.17) S The failure of CITY or TENANT to insist upon strict performance of any of the terms, covenants, or have, ~d shall not be deemed a waiver of the ri~t to requke s~ct peffo~ce of all the te~s, covenant, and conditions of the LEASE therea~er, nor awaiver of ~y remedy for ~e subsequent breach or deNult of ~y te~, covenant, or condition of the LEASE. 19. COSTS OF SUSTAINKNG AN ACTION FOR BREACH OR DEFAULT (RL 27.18) S In the event either CITY or TENANT commences legal action against the other claiming a breach or default of this LEASE, the prevailing party in such litigation shall be entitled to recover from the other cost of sustaining such action, including reasonable attorney, fees, as may, be fixed by the Court. 20.RESERVATIONS TO CITY (RL 27.19) S The PREMISES are accepted "as is" and "where is" by, TENANT subject to any and all existing easements, and encumbrances. CITY reserves the ri~t to install, lay, construct,, maintain, repair, and operate such sanitary.; sewers, drains, storm water sewers, pipelines, manholes, and connections; water, oil, and gas pipelines; telephone and telegaph power lines; and the applications and appurtenances necessary or convenient for connection therewith, in, over, upon, through, across and along *the PREMISES or any, part thereof, and to enter the PREMISES for any and all such purposes. C!TY also reserves the right to ~ant franchises, easements, rig.hts of way, and permits, in, over, upon, through, across, and along any and all portions of the PREMISES. No right reserved by, C!TY in this clause shall be so exercised as to interfere unreasonably with TENANT’S operation hereunder. CITY a~ees that ri~_Jnts ~anted to third parties by reason of this clause shall contain provisions that the surface of the land shai1 be restored as nearly, as practicable to the original condition upon the completion of any construction. 21.HOLDING OVER (RL 27.20) S In the event TENANT shall continue in possession of the PREMISES after the term of the LEASE, such possession sha!! not be considered a renewal of this LEASE but a te_nancy from month to month and shall be governed by the conditions, and covenants contained in this LEASE. 22.CONDITION OF PREMISES AT THE TIME OF LEASE (NS) At the commencement of the LEASE, TENANT shaII accept the buildings and improvements and any equipment in their existing condition and state of repair, and TEN~JqT a~ees that no representations, statements, or warranties, express or implied, have been made by: or on behalf of CITY in respect thereto 14 except as contained in the provisions of this LEASE, and CITY shall in no event be liable for any latent defects. 23.CONDITION OF PREMISES UPON TERMINATION (RL 27.21) NS Upon termination of this LEASE, except as otherwise ageed to herein, TENANT shall redeliver possession of the PREMISES to CITY in substantially the same condition that existed immediately prior to TENANT’S occupancy, reasonable wear and tear, flood, earthquake, war, and an?, act of war excepted. Upon termination of this LEASE, CITY may require TENANT to remove interior walls or other TENANT constructed improvements. 24.DISPOSITION OF ABANDONED PERSONAL PROPERTY (RL 27.22) S If TENANT abandons the PREMISES or is dispossessed thereof by process of law or other~vise, title to an?, personal property belonging to TENANT and left on the PREMISES forty-five (45) days after such abandonment or dispossession shall be deemed to have been transferred to CITY. CITY shall have the right to remove and to dispose of such property without liabilib, therefor to TENANT or to an?, person 25. QUITCLAIM OF TENANT’S INTEREST UPON TERMINATION (RL 27.23) S Upon termination of this LEASE for any reason, including but not limited to termination because of default by TENANT, TENANT shall, at CITY’S request execute, adknowledge and deliver to CITY within five (5) days after receipt of written demand thereof, a good and sufficient deed whereby all rights, title, and interest of TENANT in the PREMISES, is quitclaimed to CITY. Should TENANT fail or refuse to deliver the required deed to CITY, CITY may prepare and record a notice reciting the failure of TENANT to execute, ac "knowledge and deliver such deed and the notice shall be conclusive evidence of the termination of this LEASE, and of all right of TENANT or those claiming under TENANT in and to the PREMISES. 26.CITY’S RIGHT TO RE-ENTER (RL 27.24) S TENANT agees to yield and peaceably deliver possession of the PREMISES to CITY on the date of termination of this LEASE, whatsoever the reason for such termination. Upon giving written notice of termination to TENANT, CITY shall have the rigJat to re-enter and take possession of the PREMISES on the date such termination becomes effective without further notice of any kind and without institution of regular legal proceedings. Termination of the LEASE and re-entry of the PREMISES by CITY shall in no way alter or diminish any obligation of TENANT under the LEASE terms and shall constitute an acceptance or surrender. TENANT waives any and all ri~ts of redemption under any existing or future law or statute in the event of eviction from or dispossession of the PREMISES for any reason or in the event CITY re-enters and lawfully re-takes possession of the PREIvIISES. 27. CONFLICT OF INTEREST (RL 27.25) S TENANT warrants and covenants that no official or employee of CITY nor an?, business entib, in which proc~Ng of this ageement; or (2) will be employed ~ ~e peffo~ce of~s ageement without ~e di~mlgence of such Nct to CITY. N the event that CI~ dete~es ~at the emplo?~ent of ~y such oNcial, employee or busNess enti~ is not compatible with such o~cial’s or employee’s duties as an oNcial or employee of CITY, TENET upon request of CITY shall ~ediately te~ate such emplo?~ent. Violation of this provision constitutes a serious breach of this LEASE ~d CITY may te~ate ~is LEASE as a result of such violation. 15 28.EMINENT DOMAIN (RL 27.26) S In the event the whole or any part of the PREMISES are condemned by a public emit3, in the lawful exercise of its power of eminent domain, this LEASE shall cease as to the part condemned. The date of such termination shall be the effective date of possession of the whole or part of the PREMISES by the condemning public entit3,. If only a part is condemned and the condemnation of that part does not substantially impair the capacity of the remainder to be used for the purposes required by this LEASE, TENANT shall continue to be bound by the terms, covenants and conditions of this LEASE. However, the then current minimum annual rent shall be reduced in proportion to the relationship that the compensation paid by the condemning public enti~.’ for the portion condemned bears to the value of the entire PREMISES as of the date of possession of the part condemned. If the condemnation of a part of the PREMISES substantially impairs the capacity of the remainder to be used for the purposes required by this LEASE, TENANT may: A. Terminate this LEASE and thereby be absolved of obligations under this LEASE which have not accrued as of the date of possession by the condemning public entity; or B. Continue to occupy the remaining PREMISES and thereby continue to be bound by the terms, covenants and conditions of this LEASE. If TENANT elects to continue in possession of the remainder of the PREMISES, the then current annual minimum rental shall be reduced in proportion to the relationship that the compensation paid by the condemning public entity for the part condemned bears to the value of the entire LEASED PREMISES as of the date of possession by the condemning public entit3,. TENANT shall provide CITY with written notice advising CITY of TENANT’S choice within thin)., (30) days of possession of the part condemned by the condemning public entit3’. CITY shall be entitled to and shall receive all compensation related to the condemnation of all or part of the PREMISES by the exercise of eminent domain except that TENANT shall be entitled to that portion of the compensation which represents the value of the TENANT constructed improvements for the remainder of the LEASE term. The amount to which TENANT shall be entitled shall not exceed the actua! cost of improvements constructed by TENANT reduced in proportion to the relationship of the remaining LEASE term to the original LEASE term, using a straight line approach. 29.CHANGES IN PRICE ~rDICES (RL 27.27) S Clauses contained in this LEASE may provide for adjustment based on the Consumer Price Index, component indices, or other indices. Should these indices be changed, altered or cease to be published, the following conditions shall apply: A. If the subject index is changed so that the base year differs from that used as of the month in which the term commences, the subject index shall be converted in accordance with the conversion factor published by the publisher of that index; B. If the subject index is discontinued or revised during the LEASE term, such index shall be replaced by another government index or computation which will obtain substantially the same result as would be obtained if the subject index had not been discontinued or revised. 30.POST-ACQUISITION TENANCY (RL 27.28) S TENANT hereby acknowledges that its occupancy of the PREMISES is subsequent to acquisition of the PREMISES by CITY. TENANT further understands and a~ees that as a post-acquisition tenant, TENANT is not eligible and furthermore waives all claims for relocation assistance and benefits under federal, state or local law. !6 31.HAZARDOUS SUBSTANCES (RL 27.29) S A. Definition. As used herein, the term "Hazardous Materials" means an?, substance or material which has been determined by an?, state, federal or local governmental authority to be capable of posing risk of injury to health, safety, and property, including petroleum and petroleum products and all of those materials and substances designated as hazardous or toxic by the U.S. Environmental Protection Agency, the California Water Quality Control Board, the U.S. Department of Labor, the California Department of Industrial Relations, the California Department of Health Services, the California Health and Welfare Agency in connection with the Safe Water and Toxic Enforcement Act of 1986, the U.S. Department of Transportation, the U.S. Department of Agiculture, the U.S. Consumer Product Safety Commission, the U.S. Department of Heatth and Human Services, the U.S. Food and Drug Administration or any other governmental agency now or hereafter authorized to regulate materials and substances in the environment. Without limiting the generality of the foregoing, the term "Hazardous Materials" shall include all of those materials and substances defined as "toxic materials" in Sections 66680 through 66685 of Title 22 of the California Code of Regulations, Division 4, Chapter 20, as the same may be amended from time to time. B.TENANT’S Use of PREMISES. During the term of this LEASE, TENANT shall abide and be i. TENANT shall comply with all laws now or hereafter in effect relating to the use of Hazardous Materials on, under or about the PREMISES, and TENANT shall not contaminate the PREMISES, or its subsurfaces, with an?, Hazardous Materials. ii.TENANT shall restrict its use of Hazardous Materials at the PREMISES to those "kinds of materials that are normally used in constructing the Project. Disposal of any Hazardous Materials at the Premises are strictly prohibited. Storage of such permissible Hazardous Materials is allowed only in accordance with all applicable laws now or hereafter in effect. All safety and monitoring features of any storage facilities shall be approved by CITY’S Fire Chief in accordance with all laws. iii. TENANT shall be solely and full?, responsible for the reporting of all Hazardous Materials releases to the appropriate punic agencies, when such releases are caused by or result from TENANT’S activities on the PREMISES. TENANT shall immediately inform CITY of any release of Hazardous Materials, whether or not the release is in quantities that would otherwise be reportable to a public agency. ix,. TENANT shall be solely and fully responsible and liable for such releases at the Premises, or into CITY’S sewage or storm drainage systems. TENANT shall take al! necessary precautions to prevent an?, of its Hazardous Materials from entering into any storm or sewage drain system or from being released on the Premises. TENANT shall remove releases of its Hazardous Materials in accordance with all laws. In. addition to all other rigkts and remedies of CITY hereunder, if the release of Hazardous Materials caused by TENANT is not removed by TEN.a2xTT within ninety., (90) days after discovery by TEN.&NT, CITY or an?, other third party, CITY may pay to have the same removed and TENANT shall reimburse CITY for such costs within five (5) days of CITY’S demand for pa?~ent. v. TENANT shall protect, defend, indemnif?, and hold harmless CITY from and against all loss, damage, or liability (including all foreseeable and unforeseeable consequential damages) and expenses (including, without limitation, the cost of an?, cleanup and remediation of Hazardous Materials) which CITY may sustain as a result of the presence or cleanup of Hazardous Materials on the PREMISES. vi.TENANT’S obligation under this Clause shall survive the expiration or earlier termination of this LEASE. 32. ALL COVENANTS ARE CONDITIONS (RL 27.30) S All provisions of the LEASE are expressly made conditions. !7 33.PARTIES OF INTEREST (RL 27.31) S Nothing in this ageement, expressed or implied, is intended to, or sha!l be construed to, confer upon or to give to any person or party other than CITY and TENANT the covenants, condition or stipulations hereof. All covenants, stipulations, promises and ageements in this LEASE shall be for the sole and exclusive benefit of CITY and TENANT. "~7 3934. RECORDATION OF LEASE (RL . . _) S Neither CITY nor TENANT shall record this LEASE; however, a short-form memorandum of LEASE may be recorded at CITY’S request. 18 ~VLJTDTT D ÷"