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HomeMy WebLinkAboutCC Resolution 12823 (1099 D Street)RESOLUTION NO. 12823 RESOLUTION OF THE SAN RAFAEL CITY COUNCIL AUTHORIZING THE CITY MANAGER TO EXECUTE A LEASE WITH THE PROPERTY OWNER OF 1099 D ST., LLC, LOCATED AT 1099 D STREET, SAN RAFAEL FOR A FIVE (5) YEAR LEASE BEGINNING FEBRUARY 1, 2010 FOR $10,000.00 PER MONTH WITH A 3% INCREASE IN RENT EACH YEAR AFTER. Whereas, the City of San Rafael currently has a lease with Gramercy Realty for a 5,854 square foot Police Department annex @ $12,271.15 per month that will expire on January 31, 2010; and Whereas, the City of San Rafael has a verbal agreement with 1099 D St., LLC, for a 6,070 square foot Police Department annex beginning February 1, 2010 for $10,000 per month with a 3% increase in rent each year after; and Whereas, the City of San Rafael has a verbal agreement with 1099 D St., LLC, that would give the City the first two months free of charge for a savings of $20,000 ; and Whereas, 1099 D St., LLC will build the interior of the Police Department annex to the City's specifications, and will provide an architect to assist the City with the design at no cost to the City. NOW, THEREFORE BE IT RESOLVED, that the City Council hereby authorizes the City Manager to execute a five (5) year lease, in a form to be approved by the City Attorney, with 1099 D St., LLC for a Police Department annex beginning February 1, 2010 for $10,000.00 per month with a 3% increase in rent each year after. I, Esther Beirne, Clerk of the City of San Rafael, hereby certify that the foregoing resolution was duly and regularly introduced and adopted at a regular meeting of the San Rafael City Council held on the 17th day of August, 2009 by the following vote, to wit: AYES: COUNCILMEMBERS NOES: COUNCILMEMBERS ABSENT: COUNCILMEMBERS Brockbank, Connolly, Heller, Miller & Mayor Boro None None s 4e-4 Ru -t Esther Beirne, City Clerk 1099 D STREET OFFICE BUILDING LEASE 1. PARTIES. This Lease, dated, for reference purposes only, Aueust 3, 2009 is made by and between 1099 D Street, LLC (herein called "Lessor") and Citv of San Rafael (herein called "Lessee"). 2. PREMISES. Lessor does hereby lease to Lessee and Lessee hereby leases from Lessor that certain office space (herein called "Premises") indicated on Exhibit "A" attached hereto and by reference made a part hereof, said Premises being agreed, for the purpose of this Lease, to have an area of approximately 6,070 rentable square feet and being situated on the I" & 2" `' floor(s) of that certain Building known as 1099 D Street, San Rafael, California. Premises shall be known as Suite 100 & Suite 205. Said Lease is subject to the terms, covenants and conditions herein set forth and the Lessee covenants as a material part of the consideration for this Lease to keep and perform each and all of said terms, covenants and conditions by it to be kept and perfornled and that this Lease is made upon the condition of said performance. 3. TERM. The terns of this Lease shall be for five (5) vears and two (2) months commencing on February 1, 2010 and ending March 31, 2015 . 4. POSSESSION. a. If the Lessor, for any reason whatsoever, cannot deliver possession of the said Premises to the Lessee at the commencement of the term hereof, this Lease shall not be void or voidable, nor shall Lessor be liable to Lessee for any loss or damage resulting therefronn, nor shall the expiration date of the above term be in any way extended, but in that event, all rent shall be abated during the period between the commencement of said term and the time when Lessor delivers possession. b. Lessor shall permit Lessee to occupy the Premises beginning January 1, 2010, for the purposes of installing furnishings and equipment, providing Lessee does not interfere with any improvement work. Such occupancy shall be subject to all the provisions of this Lease. Said early possession shall not advance the termination date hereinabove provided. 5. HOLDING OVER. Any holding over after the expiration of the said term, with or without the expressed consent of Lessor, shall be construed as a tenancy from month to month, and shall be on the terms and conditions herein specified, so far as applicable. Such holding over shall not constitute an extension of this Lease. During such holding over, Lessee shall pay rent at one hundred twenty-five percent (125%) of the highest monthly rent paid during the term of the Lease, and shall provide Lessor with written notice at least one month in advance of the date of temnination of such monthly tenancy of his intention to terminate such tenancy. 6. RENT. Lessee agrees to pay to Lessor as rental, without prior notice or demand, the sum of Ten Thousand Dollars and Zero Cents ($10,000.00) in advance, on or before the first (1st) day of each and every successive calendar month thereafter during the term hereof. exeept that the f rst paid anon:` ' . Rent for any period during the terni hereof which is for less than one (1) month shall be a prorated portion of the monthly installment herein, based upon a thirty (30) day month. Said rental shall be legal tender at the time of payment at die Office of the Building, or to such other person or at such other place as Lessor may from time to time designate in writing. The address of the Office of the Building shall be deemed to be P.O. Box 355, Kentfield, CA 94914. a. RENT ESCALATIONS Base Rent shall be as follows: February 1, 2010 through March 31, 2010 Free April 1, 2010 through March 31, 2011 $10,000.00 per month April 1, 2011 through March 31, 2012 $10,300.00 per month April 1, 2012 through March 31, 2013 $10,609.00 per month April 1, 2013 through March 31, 2014 $10,927.27 per month April 1, 2014 through March 31, 2015 $11,255.09 per month 7. SECURITY DEPOSIT. saws shag bL- held by LessOF as seeurity fOF the faithl6al peFfemianee by Lessee of all the temas, eevenants, and eenditions of this Lease to - be kept and peFfkmed by Lessee dufing the teFm hereof if Lessee defaults VA� Fespeet to any PFOViSiOR Of 41is Lease, ineluding, but not lin4ted to the payment efFent, Lessor may (but shall not be FequiFed to) use, apply OF Fetain all OF any part of this seeffity deposit for the pa5wiefit of any Fent E)F any E)theF SUM ifl ElefilUlt, or- foF the payment of aft), ame, -A4tieh LeSSOF fmy spend or- beeome obligated to spend by reason of Lessee's default, to eompensate LesseF for- any loss or- dafmge whieh Lessor- fmy stiffeF by reason of Lessee's default. if any portion of said deposit is so used or applied, Lessee shall vAthin five (5) da5s afteF written demand theFefi)r-, depesit eash %rith LeSSoF in an ameurA suffie tO FeStOFe —.e seeuFity deposit to its eFiginal amount and Lessee's failure to do so shall be a FflateFial breaeh of this Lease—. Lesser shall •req ..... �L:s sec .44y deposit separate .� its gefieral Ru%k; and 1,es tlerl to interest on sueh deposit. shmall fully and fai*.fully peffeFm of tWs Lease to be peFfeffmd by - it, the seruFity deposit o - areof shall be retumed to Lessee (OF, at Lessee's option, to the last assignee of - Lessee's interest hereunder-) at the expiration of the Lease temi: in the event of temiination of Lessoi4s interest in this Lease, Le....,,_ shall tmnsf ' said deposit to T e oF!s succeSSOFin inteFest7Intentionally Omitted. 8. OPERATING EXPENSE ADJUSTMENTS. For the purposes of this Article, the following terms are defined as follows: Base Year: The calendar year in which this lease term commences (provided, however, that the Base Year shall in no event be earlier than the first full calendar year following the date of initial occupancy by the fust occupant of said Building). Comparison Year: Each calendar year of the term after the Base Year. Direct Expenses: All direct costs of operation and maintenance, as determined by standard accounting practices, and shall include the following costs by way of illustration, but not be limited to: real property taxes and assessments; water and sewer charges; insurance premiums; utilities; janitorial services; labor; costs incurred in the management of the Building, if any; air-conditioning and heating; elevator maintenance; supplies; materials; equipment; and tools; including maintenance, costs, and upkeep of all parking and common areas. ("Direct Expenses" shall not include depreciation on the Building of which the Premises are a part or equipment therein, loan payments, executive salaries or real estate brokers' commissions.) If the Direct Expenses paid or incurred by the Lessor for the Comparison Year on account of the operation or maintenance of the Building of which the Premises are a part are in excess of the Direct Expenses paid or incurred for the Base Year, then the Lessee shall pay ( 23.22%) of the increase. This percentage is that portion of the total rentable area of the Building occupied by the Lessee hereunder. If, at any time, less than ninety-five percent (95%) of the rentable area of the building is occupied, Direct Expenses will be adjusted by Lessor to reasonably approximate the Direct Expenses that would have occurred if the Building were ninety-five percent (95%) occupied. Lessor shall endeavor to give to Lessee on or before the fust day of March of each year following the respective Comparison Year a statement of the increase in rent payable by Lessee hereunder, but failure by Lessor to give such statement by said date shall not constitute a waiver by Lessor of its right to require an increase in rent. Upon receipt of the statement for the fust Comparison Year, Lessee shall pay in full the total amount of increases due for the fust Comparison Year, and in addition for the then current year, the amount of any such increase shall be used as an estimate for said current year and this amount shall be divided into twelve (12) equal monthly installments and Lessee shall pay to Lessor, concurrently with the regular monthly rent payment next due following the receipt of such statement, an amount equal to one (1) monthly installment multiplied by the number of months from January in the calendar year in which said statement is submitted to the month of such payment, both months inclusive. Subsequent installments shall be payable concurrently 2 with the regular monthly rent payments for the balance of that calendar year and shall continue until the next Comparison Year's statement is rendered. If the next or any succeeding Comparison Year results in a greater increase in Direct Expenses, then upon receipt of a statement from Lessor, Lessee shall pay a lump sum equal to such total increase in Direct Expenses over the Base Year. The total of the monthly installments to be paid for the next year, following said Comparison Year, shall be adjusted to reflect such increase. If in any Comparison Year the Lessee's share of Direct Expenses be less than the preceding year, then upon receipt of Lessor's statement, any overpayment made by Lessee on the monthly installment basis provided above shall be credited towards the next monthly rent falling due and the estimated monthly installments of Direct Expenses to be paid shall be adjusted to reflect such lower Direct Expenses for the most recent Comparison Year. Even though the term has expired and Lessee has vacated the Premises, when the final determination is made of Lessee's share of Direct Expenses for the year in which this Lease terminates, Lessee shall immediately pay any increase due over the estimated expenses paid and conversely any overpayment made in the event said expenses decrease shall be immediately rebated by Lessor to Lessee. Notwithstanding anything contained in this Article, the rental payable by Lessee shall in no event be less than the rent specified in Article 6 hereinabove. Lessor shall keep true and correct records of any Direct Expenses, and within 30 days following Lessee's receipt of any statement from Lessor under this Article 8 for payment of an increased amount of Direct Expenses, Lessee may demand in writing to inspect Lessor's records supporting the increase requested by that statement. Within 30 days following Lessee's written request, Lessor shall make its records available for Lessee's inspection and copying at a mutually agreeable time during normal working hours. All information obtained by Lessee pursuant to this section shall, to the extent permitted by law, be treated as confidential except in any litigation or alternative dispute resolution proceedings between the parties. 9. USE. Lessee shall use the Premises for general office purposes of the SAN RAFAEL POLICE DEPARTMENT and shall not use or permit the Premises to be used for any other purpose without the prior written consent of Lessor. Lessee shall not do or permit anything to be done in or about the Premises nor bring or keep anything therein which will in any way increase the existing rate of or affect any fire or other insurance upon the Building or any of its contents, or cause cancellation of any insurance policy covering said Building or any part thereof or any of its contents. Lessee shall not do or permit anything to be done in or about the Premises which will in any way obstruct or interfere with the rights of other Lessees or occupants of the Building or injury or annoy them or use or allow the Premises to be used for any improper, immoral, unlawful or objectionable purpose, nor shall Lessee cause, maintain or permit any nuisance in, on or about the Premises. Lessee shall not commit or suffer to be committed any waste in or upon the Premises. 10. COMPLIANCE WITH LAW. Lessee shall not use the Premises or permit anything to be done in or about the Premises which will in any way conflict with any law, statute, ordinance or governmental rule or regulation now in force or which may hereafter be enacted or promulgated. Lessee shall, at its sole cost and expense, promptly comply with all laws, statutes, ordinances and governmental rules, regulations or requirements now in force or which may hereafter be in force, and with the requirements of any board of fire insurance underwriters or other similar bodies now or hereafter constituted, relating to, or affecting the condition, use or occupancy of the Premises, excluding structural changes not related to or affected by Lessee's improvements or acts. The judgment of any court of competent jurisdiction or the admission of Lessee in any action against Lessee, whether Lessor be a party thereto or not, that Lessee has violated any law, statute, ordinance or governmental rule, regulation or requirement, shall be conclusive of that fact as between the Lessor and Lessee. 11. ALTERATIONS AND ADDITIONS. Except as otherwise permitted in this Lease, Lessee shall not make or suffer to be made any alterations, additions or improvements to or of the Premises or any part thereof without the written consent of Lessor first had and obtained and any alterations, additions or improvements to or of said Premises, including, but not limited to, wall covering, paneling and built-in cabinet work, but excepting movable furniture and trade fixtures, shall on the expiration of the term become a part of the realty and belong to the Lessor and shall be surrendered with the Premises. In the event Lessor consents to the making of any alterations, additions or improvements to the Premises by Lessee, the same shall be made by Lessee at Lessee's sole cost and expense, and any contractor or person selected by Lessee to make the same must fust be approved of in writing by the Lessor. Upon the expiration or sooner termination of the term hereof, Lessee shall, upon written demand by Lessor, given at least thirty (30) days prior to the end of the term, at Lessee's sole cost and expense, forthwith and with all due diligence remove any alterations, additions, or improvements made by Lessee, designated by Lessor to be removed, and Lessee shall, forthwith and with all due diligence at its sole cost and expense, repair any damage to the Premises caused by such removal. 12. REPAIRS. a. LESSEE OBLIGATIONS: By taking possession of the Premises, Lessee shall be deemed to have accepted the Premises as being in good, sanitary order, condition and repair. . Lessee shall upon the expiration or sooner termination of this Lease hereof surrender the Premises to the Lessor in good condition, ordinary wear and tear and damage from causes beyond the reasonable control of Lessee excepted. Except as specifically provided in this Lease, Lessor shall have no obligation whatsoever to alter, remodel, improve, repair, decorate or paint the Premises or any part thereof and the parties hereto affirm that Lessor has made no representations to Lessee respecting the condition of the Premises or the Building except as specifically herein set forth. b. LESSOR OBLIGATIONS: Notwithstanding the provisions of Article 12.a. hereinabove, Lessor shall repair and maintain the structural portions of the Building, including the basic plumbing, air conditioning, heating, and electrical systems, installed or furnished by Lessor, unless such maintenance and repairs are caused in part or in whole by the act, neglect, fault or omission of any duty by the Lessee, its agents, servants, employees or invitees, in which case Lessee shall pay to Lessor the reasonable cost of such maintenance and repairs. Lessor shall not be liable for any failure to make any such repairs or to perform any maintenance unless such failure shall persist for an unreasonable time after written notice of the need of such repairs or maintenance is given to Lessor by Lessee. Except as provided in Article 23 hereof, there shall be no abatement of rent and no liability of Lessor by reason of any injury to or interference with Lessee's business arising from the making of any repairs, alterations or improvements in or to any portion of the Building or the Premises or in or to fixtures, appurtenances and equipment therein. Lessee waives the right to make repairs at Lessor's expense under any law, statute or ordinance now or hereafter in effect. 13. LIENS. Lessee shall keep the Premises and the property in which the Premises are situated free from any liens arising out of any work performed, materials furnished or obligations incurred by Lessee. Lessor may require, at Lessor's sole option, that Lessee shall provide to Lessor, at Lessee's sole cost and expense, a lien and completion bond in an amount equal to one and one-half (1.5) times any and all estimated cost of any improvements, additions, or alterations in the Premises, to insure Lessor against any liability for mechanics' and materialmen's liens and to insure completion of the work. 14. ASSIGNMENT AND SUBLETTING. Lessee shall not either voluntarily or by operation of law assign, transfer, mortgage, pledge, hypothecate or encumber this Lease or any interest therein, and shall not sublet the said Premises or any part thereof, or any right or privilege appurtenant thereto, or suffer any other person (the employees, agents, servants and invitees of Lessee excepted) to occupy or use the said Premises, or any portion thereof, without the written consent of Lessor first had and obtained, which consent shall not be unreasonably withheld, and a consent to one assignment, subletting, occupation or use by another person shall not be deemed to be a consent to any subsequent assignment, subletting, occupation or use by another person. Any such assignment or subletting without such consent shall be void, and shall, at the option of the Lessor, constitute a default under this Lease. Profits on any subletting shall be split 50/50 between Lessee and Lessor. 15. HOLD HARMLESS. Lessee shall indemnify and hold harmless Lessor against and from any and all claims arising from Lessee's use of Premises for the conduct of its business or from any activity, work, or other thing done, permitted or suffered by the Lessee in or about the Building, and shall further indemnify and hold hamiless Lessor against and from any and all claims arising from any breach or default in the performance of any obligation on Lessee's 4 part to be performed under the terms of this Lease, or arising from any act or negligence of the Lessee, or any officer, agent, employee, guest or invitee of Lessee, and from all and against all cost, attorney's fees, expenses and liabilities incurred in or about any such claim or any action or proceeding brought thereon, and, in any case, should action or proceeding be brought against Lessor by reason of any such claim, Lessee upon notice from Lessor shall defend the same at Lessee's expense by counsel reasonably satisfactory to Lessor. Lessee as a material part of the consideration to Lessor hereby assumes all risk of damage to property or injury to persons, in, upon or about the Premises, from any cause other than Lessor's negligence or willful misconduct, and Lessee hereby waives all claims in respect thereof against Lessor. Lessor or its agents shall not be liable for any damage to property entrusted to employees of the Building, nor for loss or damage to any property by theft or otherwise, nor for any injury to or damage to persons or property resulting from fire, explosion, falling plaster, steam, gas, electricity, water or rain which may leak from any part of the Building or from the pipes, appliances or plumbing works therein or from the roof, street or subsurface or from any other place resulting from dampness or any other cause whatsoever, unless caused by or due to the negligence of Lessor, its agents, servants or employees. Lessor or its agents shall not be liable for interference with the light or other incorporeal hereditament, loss of business by Lessee. Lessee shall give prompt notice to Lessor in case of fire or accidents in the Premises or in the Building or of defects therein or in the fixtures or equipment. 16. SUBROGATION. As long as their respective insurers so permit, Lessor and Lessee hereby mutually waive their respective rights of recovery against each other for any loss insured by fire, extended coverage and other property insurance policies existing for the benefit of the respective parties. Each party shall obtain any special endorsements, if required by their insurer to evidence compliance with the aforementioned waiver. 17. LIABILITY INSURANCE. Lessee shall, at Lessee's expense, obtain and keep in force during the term of this Lease a policy of Combined Single Limit Bodily Injury and Property Damage Insurance insuring Lessor and Lessee against any liability arising out of the ownership, use, occupancy or maintenance of the Premises and all areas appurtenant thereto. Such insurance shall be in an amount not less than $1,000,000 per occurrence, and with an annual aggregate of not less than $2,000,000. The limit of said insurance shall not, however, limit the liability of the Lessee hereunder. Lessee may carry said insurance under a blanket policy, providing, however, said insurance by Lessee shall have a Lessor's protective liability endorsement attached thereto. If Lessee shall fail to procure and maintain said insurance, Lessor may but shall not be required to, procure and maintain same, but at the expense of Lessee. Insurance required hereunder, shall be in companies rated A+, AAA or better in "Best's Insurance Guide". Lessor acknowledges that it has been advised that, as authorized under the California Government Code, Lessee is self-insured for general liability up to $500,000 and participates in a public entity excess liability pool for additional liability coverage of in excess of $500,000. Accordingly, Lessee may satisfy the insurance requirements of this section by providing Lessor with a certification of the amount for which the City is self-insured, and a certificate of coverage under its excess liability pool evidencing the coverage required under this section. Any such certificate of coverage shall name Lessor as an additional insured. 18. EVIDENCE OF INSURANCE. Lessee shall deliver to Lessor prior to occupancy of the Premises copies of policies of liability insurance required herein or certificates evidencing the existence and amounts of such insurance with loss payable clauses satisfactory to Lessor. No policy shall be cancelable or subject to reduction of coverage except after ten (10) days' prior written notice to Lessor. 19. SERVICES AND UTILITIES. Provided that Lessee is not in default hereunder, Lessor agrees to famish to the Premises during reasonable hours of generally recognized business days, to be determined by Lessor at his sole discretion, and subject to the rules and regulations of the Building of which the Premises are a part, electricity for normal lighting and fractional horsepower office machines, heat and air conditioning required in Lessor's judgment for the comfortable use and occupation of the Premises, and janitorial service. Lessor shall also maintain and keep lighted the common stairs, common entries and toilet rooms in the Building of which the Premises are a part. Lessor shall not be liable for, and Lessee shall not be entitled to, any reduction of rental by reason of Lessor's failure to furnish any of the foregoing when such failure is caused by accident, breakage, repairs, strikes, lockouts or other labor disturbances or labor disputes of any character, or by any other cause, similar or dissimilar, beyond the reasonable control of Lessor. Except where caused by negligence of Lessor, Lessor shall not be liable under any circumstances for a loss of or injury to property, however occurring, through or in connection with or incidental to failure to furnish any of the foregoing. Whenever heat generating machines or equipment are used in the Premises which affect the temperature otherwise maintained by the air conditioning system, after written notice to Lessee, Lessor reserves the right to install supplementary air conditioning units in the Premises and the reasonable cost thereof, including the reasonable cost of installation, and the reasonable cost of operation and maintenance thereof shall be paid by Lessee to Lessor upon demand by Lessor. Lessee will not, without written consent of Lessor, use any apparatus or device in the Premises, including, but without limitation thereto, electronic data processing machines, punch card machines, and machines using in excess of 120 volts, which will in any way increase the amount of electricity usually furnished or supplied for the use of the Premises as general office space; nor connect with electric current except through existing electrical outlets in the Premises, any apparatus or device, for the purpose of using electric current. If Lessee shall require water or electric current in excess of that usually furnished or supplied for the use of the Premises as general office space, Lessee shall fust procure the written consent of Lessor, which Lessor may reasonably refuse, to the use thereof and Lessor may cause a water meter or electrical current meter to be installed in the Premises, so as to measure the amount of water and electric current consumed for any such use. The cost of any such meters and of installation, maintenance and repair thereof shall be paid for by the Lessee and Lessee agrees to pay to Lessor promptly upon demand therefor by Lessor for all such water and electric current consumed as shown by said meters, at the rates charged for such services by the local public utility furnishing the same, plus any additional expense incurred in keeping account of the water and electric current so consumed. If a separate meter is not installed, such excess cost for such water and electric current will be established by an estimate made by a utility company or electrical engineer. 20. Intentionally Omitted. NOTE: CITY IS EXEMPT FROM PERSONAL PROPERTY TAXES. 21. RULES AND REGULATIONS. Lessee shall faithfully observe and comply with the rules and regulations that Lessor shall from time to time promulgate. Lessor reserves the right from time to time to make all reasonable modifications to said rules. The additions and modifications to those rules shall be binding upon Lessee upon delivery of a copy of them to Lessee. Lessor shall not be responsible for the nonperforinance of any said rules by any other Lessees or occupants; however, to the extent such non-performance by other tenants or occupants shall adversely affect Lessee's right to quiet enjoyment of the Premises and upon notice to that effect by Lessee, Lessor shall take all steps available to Lessor under its lease with such other tenant or occupant to restore Lessee's quiet enjoyment of the Premises. 22. ENTRY BY LESSOR. Lessor reserves and shall at any and all reasonable times have the right with at least twenty-four (24) hours notice to enter the Premises, inspect the same, supply janitorial service and any other service to be provided by Lessor to Lessee hereunder, to submit said Premises to inspection by prospective purchasers or Lessees, to post notices of non -responsibility, and to alter, improve or repair the Premises and any portion of the Building of which the Premises are a part that Lessor may deem necessary or desirable, without abatement of rent and may for that purpose erect scaffolding and other necessary structures where reasonably required by the character of the work to be performed, always providing that the entrance to the Premises shall not be blocked thereby, and further providing that the business of the Lessee shall not be interfered with unreasonably. Lessee hereby waives any claim for damages or for any injury or inconvenience to or interference with Lessee's business, any loss of occupancy or quiet enjoyment of the Premises, and any other loss occasioned thereby. For each of the aforesaid purposes, Lessee shall cooperate to provide Lessor with access to the Premises at a mutually agreeable time. 23. RECONSTRUCTION. In the event the Premises or the Building of which the Premises are a part are damaged by fire or other perils covered by extended coverage insurance, Lessor agrees to forthwith repair the same; and this Lease shall remain in full force and effect, except that Lessee shall be entitled to a proportionate reduction of the rent while such repairs are being made, such proportionate reduction to be based upon the extent to which the making of such repairs shall materially interfere with the business carried on by the Lessee in the Premises. If the damage is due to the fault or neglect of Lessee or its employees, there shall be no abatement of rent. 6 In the event the Premises or the Building of which the Premises are a part are damaged as a result of any cause other than the perils covered by fire and extended coverage insurance, then Lessor shall forthwith repair the same, provided the extent of the destruction be less than ten (10%) percent of the then full replacement cost of the Premises or the Building of which the Premises are a part. In the event the destruction of the Premises or the Building is to an extent greater than ten (10%) percent of the full replacement cost, then Lessor shall have the option; (1) to repair or restore such damage, this Lease continuing in full force and effect, but the rent to be proportionately reduced as hereinabove in this Article provided; or (2) give notice to Lessee at any time within sixty (60) days after such damage terminating this Lease as of the date specified in such notice, which date shall be no less than thirty (30) and no more than sixty (60) days after the giving of such notice. In the event of giving such notice, this Lease shall expire and all interest of the Lessee in the Premises shall terminate on the date so specified in such notice and the Rent, reduced by a proportionate amount, based upon the extent, if any, to which such damage materially interfered with the business carried on by the Lessee in the Premises, shall be paid up to the time of such termination. Notwithstanding anything to the contrary contained in this Article, Lessor shall not have any obligation whatsoever to repair, reconstruct or restore the Premises when the damage resulting from any casualty covered under this Article occurs during the last twelve (12) months of the term of this Lease or any extension thereof. Lessor shall not be required to repair any injury or damage by fire or other cause, or to make any repairs or replacements of any panels, decoration, office fixtures, railings, floor covering, partitions, or any other property installed in the Premises by Lessee. The Lessee shall not be entitled to any compensation or damages from Lessor for loss of the use of the whole or any part of the premises,Lessee's personal property or any inconvenience or annoyance occasioned by such damage, repair, reconstruction or restoration. 24. DEFAULT. The occurrence of any one or more of the following events shall constitute a default and breach of this Lease by Lessee. a. The vacating or abandonment of the Premises by Lessee. b. The failure by Lessee to make any payment of rent or any other payment required to be made by Lessee hereunder, as and when due, where such failure shall continue for a period of three (3) days after written notice thereof by Lessor to Lessee. C. The failure by Lessee to observe or perform any of the covenants, conditions or provisions of this Lease to be observed or performed by the Lessee, other than described in Article 24.b. above, where such failure shall continue for a period of thirty (30) days after written notice thereof by Lessor to Lessee; provided, however, that if the nature of Lessee's default is such that more than thirty (30) days are reasonably required for its cure, then Lessee shall not be deemed to be in default if Lessee commences such cure within said thirty (30) day period and thereafter diligently prosecutes such cure to completion. d. The making by Lessee of any general assignment or general arrangement for the benefit of creditors; or the filing by or against Lessee of a petition to have Lessee adjudged as bankrupt, or a petition or reorganization or arrangement under any law relating to bankruptcy (unless, in the case of a petition filed against Lessee, the same is dismissed within sixty (60) days); or the appointment of a trustee or a receiver to take possession of substantially all of Lessee's assets located at the Premises or of Lessee's interest in this Lease, where possession is not restored to Lessee within thirty (30) days; or the attachment, execution or other judicial seizure of substantially all of Lessee's assets located at the Premises or of Lessee's interests in this Lease, where such seizure is not discharged in thirty (30) days. 25. REMEDIES IN DEFAULT. In the event of any such material default or breach by Lessee, Lessor may at any time thereafter, with or without notice or demand and without limiting Lessor in the exercise of a right or remedy which Lessor may have by reason of such default or breach: a. Terminate Lessee's right to possession of the Premises by any lawful means, in which case this Lease shall terminate and Lessee shall immediately surrender possession of the Premises to Lessor. In such event Lessor shall be entitled to recover from Lessee all damages incurred by necessary renovation and alteration of the Premises, reasonable attorney's fees, any real estate commission actually paid; the worth at the time of award by the court having jurisdiction thereof of the amount by which the unpaid rent for the balance of the term after the time of such award exceeds the amount of such rental loss for the same period that Lessee proves could be reasonably avoided; that portion of the leasing commission paid by Lessor and applicable to the unexpired term of this Lease. Unpaid installments of rent or other sums shall bear interest from the date due at the rate of ten (10%) percent per annum In the event Lessee shall have abandoned the Premises, Lessor shall have the option of (a) taking possession of the Premises and recovering from Lessee the amount specified in this paragraph, or (b) proceeding under the provisions of the following Article 25.b. b. Maintain Lessee's right to possession, in which case this Lease shall continue in effect whether or not Lessee shall have abandoned the Premises. In such event Lessor shall be entitled to enforce all of Lessor's right and remedies under this Lease, including the right to recover the rent as it becomes due hereunder, subject, however, to Lessor's obligation at law to mitigate damages. C. Pursue any other remedy now or hereafter available to Lessor under the laws or judicial decision of the State in which the Premises are located. 26. EMINENT DOMAIN. If more than twenty-five (25%) percent of the Premises shall be taken or appropriated by any public or quasi -public authority under the power of eminent domain, either party hereto shall have the right, at its option, to terminate this Lease, and Lessor shall be entitled to any and all income, rent, award, or any interest therein whatsoever which may be paid or made in connection with such public or quasi -public use or purpose, and Lessee shall have no claim against Lessor for the value of any unexpired term of this Lease. If either less than or more than twenty-five (25%) percent of the Premises is taken, and neither party elects to terminate as herein provided, the rental thereafter to be paid shall be equitably reduced. If any part of the Building other than the Premises may be so taken or appropriated, Lessor shall have the right at its option to terminate this Lease and shall be entitled to the entire award as above provided. 27. OFFSET STATEMENT. Lessee shall at any time and from time to time upon not less than ten (10) days prior written notice from Lessor execute, acknowledge and deliver to Lessor a statement in writing, (a) certifying that this Lease is unmodified and in full force and effect (or, if modified, stating the nature of such modification and certifying that this Lease as so modified, is in full force and effect), and the date to which the rental and other charges are paid in advance, if any, and (b) acknowledge that there are not, to Lessee's knowledge, any uncured defaults on the part of the Lessor hereunder, or specifying such defaults if any are claimed. Any such statement may be relied upon by any prospective purchaser or encumbrancer of all or any portion of the real property of which the Premises are a part. 28. PARKING. Lessee shall have the right to use fifteen (15) reserved parking places designated for Tenant. 29. AUTHORITY OF PARTIES. a. Corporate Authority. If Lessee is a corporation, each individual executing this Lease on behalf of said corporation represents and warrants that he is duly authorized to execute and deliver this Lease on behalf of said corporation, in accordance with a duly adopted resolution of the board of directors of said corporation or in accordance with the by-laws of said corporation, and that this Lease is binding upon said corporation in accordance with its terms. 30. GENERAL PROVISIONS. a. Plats and Riders. Clauses, plats and riders, if any, signed by the Lessor and the Lessee and endorsed on or affixed to this Lease are a part hereof. b. Waiver. The waiver by Lessor of any term, covenant or condition herein contained shall not be deemed to be a waiver of such term, covenant or condition on any subsequent breach of the same or any other term, covenant or condition herein contained. The subsequent acceptance of rent hereunder by Lessor shall not be deemed to be a waiver of any preceding breach by Lessee of any term, covenant or condition of this Lease, other than the failure of the Lessee to pay the particular rental so accepted, regardless of Lessor's knowledge of such preceding breach at the time of the acceptance of such rent. C. Notices. All notices and demands which may or are to be required or permitted to be given by either party to the other hereunder shall be in writing. All notices and demands by the Lessor to the Lessee shall be sent by United States Mail, postage prepaid, addressed to the Lessee at the Premises, or to such other places as Lessee may from time to time designate in a notice to the Lessor. All notices and demands by the Lessee to the Lessor shall be sent by United States Mail, postage prepaid, addressed to the Lessor at the Office of the Building, or to such other person or place as the Lessor may from time to time designate in a notice to the Lessee. d. Right to Relocate. Lessor reserves the right to relocate Lessee, at Lessor's expense, to comparable space elsewhere in the building, and Lessee agrees to so relocate within sixty (60) days of receipt by Lessee of written notice from Lessor, providing said comparable space is not less suitable for Lessee's business. e. Joint Obligation. If there be more than one Lessee the obligations hereunder imposed upon Lessees shall be joint and several. f. Marginal Headings. The marginal headings and Article titles to the Articles of this Lease are not a part of this Lease and shall have no effect upon the construction or interpretation of any part hereof. g. Time Time is of the essence of this Lease and each and all of its provisions in which performance is a factor. h. Successors and Assigns. The covenants and conditions herein contained, subject to the provisions as to assignment, apply to and bind the heirs, successors, executors, administrators and assigns of the parties hereto. i. Recordation. Neither Lessor nor Lessee shall record this Lease or a short form memorandum hereof without the prior written consent of the other party. j. Quiet Possession. Upon Lessee paying the rent reserved hereunder and observing and performing all of the covenants, conditions and provisions on Lessee's part to be observed and performed hereunder, Lessee shall have quiet possession of the Premises for the entire term hereof, subject to all the provisions of this Lease. k. Late Charges. Lessee hereby acknowledges that late payment by Lessee to Lessor of rent or other sums due hereunder will cause Lessor to incur costs not contemplated by this Lease, the exact amount of which will be extremely difficult to ascertain. Such costs include, but are not limited to, processing and accounting charges, and late charges which may be imposed upon Lessor by terms of any mortgage or trust deed covering the Premises. Accordingly, if any installment of rent or a sum due from Lessee shall not be received by Lessor or Lessor's designee within ten (10) days after said amount is due, then Lessee shall pay to Lessor a late charge equal to -two (2%) percent of such overdue amount. The parties hereby agree that such late charges represent a fair and reasonable estimate of the cost that Lessor will incur by reason of the late payment by Lessee. Acceptance of such late charges by the Lessor shall in no event constitute a waiver of Lessee's default with respect to such overdue amount, nor prevent Lessor from exercising any of the other rights and remedies granted hereunder. 1. Guaranty. As material condition of this Lease and for valuable consideration, Lessee's performance of the conditions embodied in this Lease is hereby guaranteed by the undersigned. M. Prior Agreements. This Lease contains all of the agreements of the parties hereto with respect to any matter covered or mentioned in this Lease, and no prior agreements or understanding pertaining to any such matters shall be effective for any purpose. No provision of this Lease may be amended or added to except by an agreement in writing signed by the parties hereto or their respective successors in interest. This Lease shall not be effective or binding on any party until fully executed by both parties hereto. n. Inability to Perform. This Lease and the obligations of the Lessee hereunder shall not be affected or impaired because the Lessor is unable to fulfill any of its obligations hereunder or is delayed in doing so, if such inability or delay is caused by reason of strike, labor troubles, acts of God, or any other cause beyond the reasonable control of the Lessor. o. Attorneys' Fees. In the event of any action or proceeding brought by either party against the other under this Lease the prevailing party shall be entitled to recover all costs and expenses including the fees of its attorneys in such action or proceeding in such amount as the court may adjudge reasonable as attorneys' fees. P. Sale of Premises by Lessor. In the event of any sale of the Building, Lessor shall be and is hereby entirely freed and relieved of all liability under any and all of its covenants and obligations contained in or derived from this Lease arising out of any act, occurrence or omission occurring after the consummation of such sale; and the purchaser, at such sale or any subsequent sale of the Premises shall be deemed, without any further agreement between the parties or their successors in interest or between the parties and any such purchaser to have assumed and agreed to carry out any and all of the covenants and obligations of the Lessor under this lease. q. Subordination, Attomment. Upon request of the Lessor, Lessee will in writing subordinate its rights hereunder to the lien of any first mortgage, or first deed of trust to any bank, insurance company or other lending institution, now or hereafter in force against the land and Building of which the Premises are a part, and upon any buildings hereafter placed upon the land of which the Premises are a part, and to all advances made or hereafter to be made upon the security thereof. In the event any proceedings are brought for foreclosure, or in the event of the exercise of power of sale under any mortgage or deed of trust made by the Lessor covering the Premises, the Lessee shall attom to the purchaser upon any such foreclosure or sale and recognize such purchaser as the Lessor under this Lease. r. Name. Lessee shall not use the name of the Building or of the development in which the Building is situated for any purpose other than as an address of the business to be conducted by the Lessee in the Premises. S. Separability. Any provision of this Lease which shall prove to be invalid, void or illegal shall in no way effect, impair or invalidate any other provision hereof and such other provision shall remain in full force and effect. t. Cumulative Remedies. No remedy or election hereunder shall be deemed exclusive but shall, wherever possible, be cumulative with all other remedies at law or in equity. U. Choice of Law. This Lease shall be governed by the laws of the State of California. V. Signs and Auctions. Lessee shall not place any sign upon the Premises or Building or conduct any auction thereon without Lessor's prior written consent. 31. BROKERS. Lessor and Lessee warrant that each has had no dealings with any real estate broker or agents in connection with the negotiation of this Lease excepting only Keegan & Coppin Company, Inc., as Lessor's and Lessee's broker, and each knows of no other real estate broker or agents in connection with this Lease. 32. TENANT IMPROVEMENTS. Lessor shall complete all improvements to the Premises pursuant to a mutually agreeable space plan between parties (Exhibit A), and provide the Premises in "turn -key" condition. Lessor shall be solely responsible for the cost of the improvements, including but not limited to architectural/design costs, demolition costs, construction material, labor costs, and city permit costs. Lessee shall not be responsible for any cost associated with any building common area, bathroom, or parking lot modifications required by any governmental code requirement, even if said modifications are triggered by the improvement work to the Premises. 10 Lessee shall be solely responsible for all telephonetfax/data wiring costs and their installation. Lessee's contractors may work with Lessor's contractors to install the wiring in an efficient and timely matter during the improvement construction, providing Lessee's contractors do not interfere with said construction. All Tenant Improvement work completed shall be in accordance with Lessor's standard design and specifications of equipment and materials, and to locations of point of service determined by Lessor. 33. SIGNAGE: Lessor, at Lessor's sole cost, shall provide Lessee with standard building signage, including lobby directory and door plaque signage. Lessee, at Lessee's sole cost, may install other window signage on the Fifth Avenue entry doors providing Lessor has first approved the signage in writing. All signage shall meet city code requirements. 34. OPTION TO EXTEND. Lessee is given the option to extend the term on all the provisions contained in this Lease, except for rent, for two (2) five (5) year periods (the "extended terms)") following expiration of the initial term by giving written notice of exercise of the option ("option notice") to Lessor at least six (6) months and not earlier than nine (9) months before the expiration of the then current term; provided that, if Lessee is in default as of the date of giving the option notice, the option notice shall be ineffective, or if Lessee is in default as of the date the extended term is to commence, the extended term shall not commence and this Lease shall expire at the end of the initial term a. Rent. The minimum rent for the extended term(s) shall be 95% of the fair market rental value of the Premises as of the date of the exercise of the option to extend, which fair market rental value shall in no event be less than 103%, nor more than 1209"0, of the minimum rent in effect during the last year of the prior term and shall be determined in accordance with paragraph b, below. The operating expenses shall be as charged to the project as a whole on the date of expiration. Rent shall escalate annually by 3% per year during the extended term(s). b. Determination of Fair Market Rent. i. The parties shall endeavor by good faith negotiations to agree upon the fair market rental within fifteen (15) days after Lessor's receipt of the option notice. ii. In the event Lessor or Lessee cannot agree on the rent within fifteen (15) days after Lessor's receipt of the option notice, then within fifteen (15) days thereafter, each party, at its own cost and by giving notice to the other party, shall appoint a real estate broker with at least five (5) years' full time commercial leasing experience in the San Francisco Bay Area, to appraise and determine the fair market rental value of the Premises ("fair market rent"). If, in the time provided, only one party shall notice appointment of a broker, the single broker appointed shall determine the fair market rent. If two brokers are appointed by the parties, the two brokers shall independently, and without consultation between them, prepare an appraisal of the fair market rent within five (5) days. Each broker shall seal its respective appraisal after completion. After both appraisals are completed, the resulting estimates of the fair market rent shall be opened by Lessor and Lessee in the presence of each other and compared. If the value of the appraisals differs by no more than ten percent (10%) of the value of the higher appraisal, then the fair market rent shall be the average of the two appraisals. iii. If the values of the appraisals differ by more than ten percent (10%) of the value of the higher appraisal, the two brokers shall designate a third broker meeting the qualifications set forth in subparagraph (ii), above. If the two brokers have not agreed on a third broker after ten (10) days, either Lessor or Lessee, by giving five (5) days' notice to the other party, may apply to the then Presiding Judge of the Superior Court for the county in which the Building is located for the selection of a third broker who meets the qualifications set forth in subparagraph (ii), above. The third broker, however selected, shall be a person who has not previously acted in any capacity for either party. The third broker shall make an appraisal of the fair market rent within five (5) days after selection and without consultation with the fust two brokers. The three appraisals shall then be added together and their total divided by three, and the resulting quotient shall be the fair market rent. If, however, the low appraisal and/or the high appraisal 11 are/is more than fifteen percent (15%) lower and/or higher than the middle appraisal, the low appraisal and/or the high appraisal shall be disregarded. If one appraisal is disregarded, the remaining two appraisals shall be added together and their total divided by two, and the resulting quotient shall be the fair market rent. If both the low appraisal and the high appraisal are disregarded as provided in this subparagraph, the middle appraisal shall be the fair market rent. c. Delay. If the determination of the rent is delayed beyond the commencement of the extended term, Lessee shall pay rent based on the average of the appraisals received under subparagraphs b (i) and (ii), above, as of the extended term commencement until the fust day of the month following the determination of the rent. On the first day of the month following the determination of the rent, there shall be an adjustment made to the rent payment then due for the difference between the amount of rent Lessee has paid to Lessor since the extended term commencement and the amount that Lessee would have paid if the rent as adjusted pursuant to this subparagraph had been in effect as of the extended term commencement. d. Costs. Each party shall pay the fees and expenses of their own broker related to the appraisal, and 509/'u of the fees and expenses of the third broker. e. Criteria. The brokers shall determine the fair market rent using the "market comparison approach," with the relevant market being that for comparable office space in the central Marin area. The brokers shall use their best efforts to fairly and reasonably appraise and determine the fair market rental value of the Premises in accordance with the terms of the Lease, and shall not act as advocates for either Lessor or Lessee. f. No Further Extension. Lessee shall have no further option to extend the term of this Lease. 35. ATTACHMENTS: The following attachments are a part of this Lease: a. Rules and Regulations b. Exhibit A: Floor Plan c. Addendum 1: Standard Lease Conditions d. Addendum 2: Standard Lease Disclosure e. Addendum 3: Leasing Disclosure Regarding Real Estate Agency Relationship 36. CONTINGENCY: This Lease is expressly contingent upon Lessor's ability to successfully negotiate a termination of the existing Lease encumbering the Premises between Lessor and Countrywide Home Loans, Inc. within thirty (30) days after execution hereof. The parties hereto have executed this Lease at the place and on the dates specified immediately adjacent to their respective signatures. If this Lease has been filled in it has been prepared for submission to your attorney for approval. No representation or recommendation is made by the real estate broker or its agents or employees as to the legal sufficiency, legal effect, or tax consequences of this Lease or the transactions relating thereto. LESSOR -1099 D Street, LLC <E)I Signed on ............. ... } �. _. _ _ —.._ 20 .. . at K�.Ic T. Max Kniesche, III & Nancy A. Kniesche 12 LESSEE — City of San Rafael Signed on- AUGUST 31 at SAN RAFAEL, CALIFORNIA Attest: A � � By:�� K�ORDHOFF U Its: City Manager f-- C • 132-4 ,eu-c ' ESTHER C. BEIRNE, City Clerk Approved As To Form: ROBERT F. EPSTEIN, City Att mey It RULES AND REGULATIONS 1. No sign, placard, picture, advertisement, name or notice shall be inscribed, displayed or printed or affixed on or to any part of the outside or inside of the Building without the written consent of Lessor first had and obtained and Lessor shall have the right to remove any such sign, placard, picture, advertisement, name or notice without notice to and at the expense of Lessee. All approved signs or lettering on doors shall be printed, painted, affixed or inscribed at the expense of Lessee by a person approved of by Lessor. Lessee shall not place anything or allow anything to be placed near the glass of any window, door, partition or wall which may appear unsightly from outside the Premises; provided, however, that Lessor may finnish and install a Building standard window covering at all exterior windows. Lessee shall not without prior written consent of Lessor cause or otherwise sunscreen any window. 2. The sidewalks, halls, passages, exits, entrances, elevators and stairways shall not be obstructed by any of the Lessees or used by them for any purpose other than for ingress and egress from their respective Premises. Intentionally Omitted. 4. The toilet rooms, urinals, wash bowls and other apparatus shall not be used for any purpose other than that for which they were constructed and no foreign substance of any kind whatsoever shall be thrown therein and the expense of any breakage, stoppage, or damage resulting from the violation of this rule shall be borne by the Lessee who, or whose employees or invitees shall have caused it. Lessee shall not overload the floor of the Premises or in any way deface the Premises or any part thereof. 6. No furniture, freight or equipment of any kind shall be brought into the Building without the prior notice to Lessor and all moving of the same into or out of the Building shall be done at such time and in such manner as Lessor shall designate. Lessor shall have the right to prescribe the weight, size and position of all safes and other heavy equipment brought into the Building and also the times and manner of moving the same in and out of the Building. Safes or other heavy objects shall, if considered necessary by Lessor, stand on supports of such thickness as is necessary to properly distribute the weight. Lessor will not be responsible for loss of or damage to any such safe or property from any cause and all damage done to the Building by moving or maintaining any such safe or other property shall be repaired at the expense of the Lessee. 7. Lessee shall not use, keep or permit to be used or kept any foul or noxious gas or substance in the Premises, or permit or suffer the Premises to be occupied or used in a manner offensive or objectionable to the Lessor or other occupants of the Building by reason of noise, odors, electromagnetic radiation, and/or vibrations, or interfere in any way with other Lessees or those having business therein, nor shall any animals or birds be brought in or kept in or about the Premises or the Building. 8. No cooking appliances shall be used or permitted by any Lessee on the Premises, excepting only coffee makers and microwave ovens, nor shall the Premises be used for the storage of merchandise, for washing clothes, for lodging, or for any improper, objectionable or immoral purpose. 9. Lessee shall not use or keep in the Premises of the Building any kerosene, gasoline, or inflammable or combustible fluid or material, or use any method of heating or air conditioning other than that supplied by Lessor. 10. Lessor will direct electricians as to where and how telephone and telegraph wires are to be introduced. No boring or cutting for wires will be allowed without the consent of the Lessor. The location of telephones, call boxes and other office equipment affixed to the Premises shall be subject to the approval of Lessor. 11. On Sundays and legal holidays, Saturdays before 8:00 a.m. and after 1:00 p.m., and on other days between the hours of 7:00 p.m. and 7:00 a.m. the following day, access to the Building, or to the halls, corridors, elevators or 14 stairways in the Building, or to the Premises may be refused unless the person seeking access is known to the person or employee of the Building in charge and has a pass or is properly identified. The Lessor shall in no case be liable for damages for any error with regard to the admission to or exclusion from the Building of any person. In case of invasion, mob, riot, public excitement, or other commotion, the Lessor reserves the right to prevent access to the Building during the continuance of the same by closing of the doors or otherwise, for the safety of the Lessees and protection of property in the Building and the Building. 12. Lessor reserves the right to exclude or expel from the Building any person who, in the judgment of Lessor, is intoxicated or under the influence of liquor or drugs, or who shall in any manner do any act in violation of any of the rules and regulations of the Building. 13. No vending machine or machines of any description shall be installed, maintained or operated upon the Premises without the written consent of the Lessor. 14. Lessor shall have the right, exercisable without notice and without liability to Lessee, to change the name and street address of the Building of which the Premises are a part. 15. Lessee shall not disturb, solicit, or canvass any occupant of the Building and shall cooperate to prevent same. 16. Without the written consent of Lessor, Lessee shall not use the name of the Building in connection with or in promoting or advertising the business of Lessee except as Lessee's address. 17. Lessor shall have the right to control and operate the public portions of the Building, and the public facilities, and heating and air conditioning, as well as facilities furnished for the common use of the Lessees, in such manner as it deems best for the benefit of the Lessees generally. 18. All entrance doors in the Premises shall be left locked when the Premises are not in use, and all doors opening to public corridors shall be kept closed except for normal ingress and egress from the Premises. 19. No smoking will be permitted within the building of which Premises is a part at any time. 15 ADDENDUM 2 STANDARD LEASE DISCLOSURE ADDENDUM Notice to Owners, Buvers and Tenants Regarding Hazardous Wastes or Substances and Underground Storage Tanks Comprehensive federal and state laws and regulations have been enacted in the last few years in an effort to develop controls over the use, storage, handling, cleanup, removal and disposal of hazardous wastes or substances. Some of these laws and regulations, such as, for example, the so-called "Super Fund Act", provide for broad liability schemes wherein an owner, tenant or other user of the property may be liable for cleanup costs and damages regardless of fault. Other laws and regulations set standards for the handling of asbestos or establish requirements for the use, modification, abandonment, or closing of underground storage tanks. It is not practical or possible to list all such laws and regulations in this Notice. Therefore, lessors and lessees are urged to consult legal counsel to determine their respective rights and liabilities with respect to the issues described in this Notice as well as other aspects of the proposed transaction. If various materials that have been or may be in the future determined to be toxic, hazardous or undesirable, or are going to be used, stored, handled or disposed of on the property, or if the property has or may have underground storage tanks for storage of such hazardous materials, or that such materials may be in the equipment, improvements or soil, it is essential that legal and technical advice be obtained to determine, among other things, what permits and approvals have been or may be required, if any, the estimated costs and expenses associated with the use, storage, handling, cleanup, removal or disposal of the hazardous wastes or substances and what contractual provisions and protection are necessary or desirable. It may also be important to obtain expert assistance for site investigations and building inspections. The past uses of the property may provide valuable information as to the likelihood of hazardous wastes or substances, or underground storage tanks being on the property. The term "hazardous wastes or substances" is used in this Notice in its very broadest sense and includes, but is not limited to, all those listed under Proposition 65, petroleum base products, paints and solvents, lead, cyanide, DDT, printing inks, acids, pesticides, ammonium compounds, asbestos, PCBs and other chemical products. Hazardous wastes or substances and underground storage tanks may be present on all types of real property. This Notice is, therefore, meant to apply to any transaction involving any type of real property, whether improved or unimproved. Although Keegan & Coppin Co., Inc. or its salespeople, will disclose any knowledge it actually possesses with respect to the existence of hazardous wastes or substances, or underground storage tanks on the property, Keegan & Coppin Co., Inc. has not made investigations or obtained reports regarding the subject matter of this Notice, except as may be described in a separate written document, studies or investigation by experts. Therefore, unless there are additional documents or studies attached to this notice, lease or contract, this will serve as notification that Keegan & Coppin Co., Inc. or its salespeople make no representation regarding the existence or non-existence of hazardous wastes or substances, or underground storage tanks on the property. You should contact a professional, such as a civil engineer, geologist, industrial hygienist or other persons with experience in these matters to advise you concerning the property. Americans with Disabilities Act (ADA) On July 26, 1991, President Bush signed the federal legislation known as the Americans with Disabilities Act (ADA) into law. The purpose of the ADA is to integrate persons with disabilities into the economic and social mainstream of American life. Title III of the ADA applies to Lessors and Lessees of "places of public accommodation" and "commercial facilities", and requires that places of public accommodation undertake "readily achievable" removal of communication and access barriers to the disabled. This requirement of Title III of the ADA is effective January 26, 1992. It is important that building owners identify and undertake "readily achievable" removal of any such barriers in the common areas, sidewalks, parking lots and other areas of the building under their control. The lessor and lessee are responsible for compliance with ADA relating to removal of barriers within the workplace i.e., arrangement of interior furnishings and access within the premises, and any improvements installed by lessor and lessee. Keegan & Coppin Company, Inc. recommends that both parties seek expert advice regarding the implications of Page 1 of 2 the Act as it affects this agreer t. Natural Hazards Disclosure Act: "The property which is the subject of this contract may be situated in a Special Study Zone as designated under the Natural Hazards Disclosure Act, inclusive, of the California Public Resources Code; and, as such, the construction or development on this property of any structure for human occupancy may be subject to the findings of a geologic report prepared by a geologist registered in the State of California, unless such report is waived by the City or County under the terms of that act. No representations on the subject are made by the lessor or agent, and the lessee should make his own inquiry or investigation". Flood Hazard Area Disclosure: The subject property may be situated in a "Special Flood Hazard Area" as set forth on a Federal Emergency Management Agency (FEMA) "Flood Insurance Rate Map" (FIRM) or "Flood Hazard Boundary Map" (FHBM). The law provides that, as a condition of obtaining financing on most structures located in a "Special Floods Hazard Area", lender requires flood insurance where the property or its attachments are security for a loan. Lessee should consult with experts concerning the possible risk of flooding. Toxic Mold Disclosure (Pursuant to the Toxic Mold Protection Act of 2001) The Toxic Mold Protection Act of 2001 requires any person who sells, transfers or rents residential, commercial or industrial property to disclose if they have ACTUAL KNOWLEDGE of a mold condition on the property. The law also requires the California Department of Health Services to identify tolerable exposure limits and develop guidelines for toxic mold identification and remediation. Property owners will be required to provide a more detailed disclosure on toxic mold once the Department of Health Services develops and adopts standards for identifying, measuring and remediating toxic mold. The Toxic Mold Protection Act of 2001 does NOT require that a property owner have their property tested for toxic mold. It also does NOT require that an agent investigate a property for toxic mold. Property owners only need to disclose any ACTUAL KNOWLEDGE of a mold condition on their property until the above mentioned guidelines are developed and approved. This disclosure can be made on the Real Estate Transfer Disclosure Statement (TDS 11) Form. A chapter -discussing Mold has also been added to the Environmental Hazards: A Guide for Homeowners, Buyers, Landlords and Tenants booklet that must be provided to a buyer or tenant in the transaction. The chapter contains descriptions of mold, symptoms of mold exposure, and information on testing and cleanup procedures. The chapter also lists other publications available that discuss mold and indoor air quality. For local assistance, contact your county or city Department of Health, Housing, or Environmental Health. Explanation of Mold Conditions on Property: (to be completed by Transfer or if they have ACTUAL KNOWLEDGE of a mold condition on the property.) Acknowledgment: Lessee: Date: Less6i:- Date: Page 2 of 2 ADDENDUM 1 STANDARD LEASE CONDITIONS ADDENDUM To Lease dated Aueust 3, 2009 by and between Lessor 1099 D Street, LLC and Lessee Citv of San Rafael A. Tenant Improvement Scone Lessor and Lessee to approve plans and specifications covering the layout of the premises and the scope of responsibility of the Tenant Improvements between Lessor and Lessee as stipulated in the Lease. Said approval shall be forthcoming within fifteen (15) days after acceptance hereof. Lessor to install Tenant Improvements in a quality, good workmanlike manner in accordance with approved plans and specifications prior to the Commencement Date. Lessee shall inspect said premises within three (3) days of completion to ascertain that Tenant Improvements have been installed in accordance with plans and specifications. Lessee shall provide a "punch list" of items not in accordance with plans and specification or not installed in a good workmanlike manner. Lessor shall have thirty (30) days to correct said "punch list" items. If Lessee installs any portion of the Tenant Improvements, Lessee shall have the same responsibility as indicated above for Lessor. Additionally, Lessee shall remove all mechanic's liens to satisfy all claims, and meet all contract requirements with suppliers, contractors and employees arising out of said installation of improvements. Lessee shall have workman compensation and liability insurance with a minimum $500,000 per occurrence for said installation and shall name Lessor additional insured under the policy. Lessee shall indemnify and hold harmless Lessor for all claims of employees, invitees, materialmen, and/or suppliers arising out of said installation. B. Financial Information Lessor has reviewed and approves financial statements and credit reports regarding Lessee. Lessor may deliver such financial information in Lessor's possession to lending institutions, mortgage brokers, investors in the subject property, or prospective purchasers. Keegan & Coppin Company, Inc. is authorized to release deposits and fust month's rent to Lessor upon receipt of a fully executed Lease. C. Permits Lessee will obtain a use permit and a wastewater discharge permit (if required) from the appropriate municipality within thirty (30) days after acceptance hereof. Lessee shall use due diligence in pursuing such permits and pay all costs associated with them. Lessee shall have the responsibility to maintain any use permits and to comply with all temis and conditions of said use permits during the term of this Lease. If Lessee's application for a use permit is denied, Lessor or Lessee may declare this Lease void, in which event all deposits and prepaid rent shall be returned to Lessee. D. Hazardous Waste "If Lessee uses, stores, or becomes aware of any hazardous waste or substances as listed by Proposition 65, Lessee will advise Lessor within three (3) days of such existence, and either obtain approval from Lessor and the appropriate governing agencies within thirty (30) days from notice or remove and clean up said hazardous waste to standards required by the Lessor and the appropriate governing agencies within sixty (60) days from notice." "If Lessee, its invitees, employees, agents or associates cause or allow a spill or contamination of the premises, common area, soil or surrounding area, then it will be the responsibility of Lessee to clean up said hazard to the degree required and within the time frame set by any public entity which has jurisdiction and particularly in response to the Super Fund Act and Proposition 65." Page 1 of 2 Lessor is responsible for a hazardous waste violations, occurrences or clear n required prior to Lease commencement or caused by Lessor or othL .dnants during the Lease term without reimburser. , from Lessee. E. Area Measurement Lessee has reviewed and approves the system of measurement, the usable and rentable square footage amounts of the subject premises. F, Associations and Expenses Lessee shall review and approve any CC&R's, common area association dues, budgets, rules, and use conditions pertaining thereto within ten (10) days after acceptance hereof. Lessee shall review and approve the scope and delineation of Lessee's and Lessor's responsibilities for Lease expenses, including common area expenses, repairs and maintenance, taxes, insurance, capital replacements, base year expenses, or other assessments, including past experienced costs or future estimates under the subject Lease within ten (10) days or upon receipt from Lessor a summary of such responsibility. Lessor shall provide such information within five (5) days after mutual signing of this Lease, if applicable. G Lessee shall review and approve the physical condition of all systems that Lessee is responsible for maintaining, or replacements under the Lease, and as stipulated in the above scope of responsibilities including HVAC, electrical equipment, lighting, road surfaces, landscaping, sprinkler and/or other mechanical or electrical systems within ten (10) days after acceptance hereof. Agreed by: LESSOR —1099 D Street, LLC Signed on e2�P`r�,\Der ;F> 20C2F at By. T. Max Kniesche, III & Nancy A. Kniesche LESSEE — City of San Rafael Signed on AUGUST 31, 2009 at SAN RAFAEL, CALIFORNIA By: NORDHOFF Its: City Manager Attest: ESTHER C. BEIRNE, City Clerk Page 2 of 2 Approved As To Form: A AA ROBERT F. EPST IN, City ADDENDUM 3 LEASING DISCLOSURE REGARDING REAL ESTATE AGENCY RELATIONSHIP When you enter into a discussion with a real estate agent regarding a real estate transaction, you should from the outset understand what type of agency relationship or representation you wish to have with the agent in the transaction. LANDLORD'S AGENT A Landlord's agent under a listing agreement with the Landlord acts as the agent for the Landlord. A Landlord's agent or a subagent of that agent has the following affirmative obligations: To the Landlord: (a) A fiduciary duty of utmost care, integrity, honesty and loyalty in dealing with the Landlord. To the Tenant and the Landlord: (a) Diligeni exercise of reasonable skill and care in performance of the agent's duties. (b) A duty of honest and fair dealing and good faith. (c) A duty to disclose all facts known to the agent materially affecting the value or desirability of the property that are not known to, or within the diligent attention and observation of, the parties. An agent is not obligated to reveal to either party any confidential information obtained from the other party which does not involve the affirmative duties set forth above. TENANT'S AGENT A Tenant's agent can, with a Tenant's consent, agree to act as agent for the Tenant only. In these situations, the agent is not the Landlord's agent, even if by agreement the agent may receive compensation for services rendered, either in full or in part from the Landlord. An agent acting only for a Tenant has the following affirmative obligations. To the Tenant: (a) A fiduciary duty of utmost care, integrity, honesty and loyalty in dealings with the Tenant. To the Tenant and the Landlord: (a) Diligent exercise of reasonable skill and care in performance of the agent's duties. (b) A duty of honest and fair dealing and good faith. (c) A duty to disclose all facts known to the agent materially affecting the value or desirability of the property that are not known to, or within the diligent attention and observation of, the parties. An agent is not obligated to reveal to either party any confidential information obtained from the other party which does not involve the affirmative duties set forth above. AGENT REPRESENTING BOTH LANDLORD AND TENANT A real estate agent, either acting directly or through one or more associate licensees, can legally be the agent of both the Landlord and the Tenant in a transaction, but only with the knowledge and consent of both the Landlord and the Tenant. In a dual agency situation, the agent has the following affirmative obligations to both the Landlord and the Tenant. (a) A fiduciary duty of utmost care, integrity, honest and loyalty in the dealings with either Landlord or Tenant. (b) Other duties to the Landlord and the Tenant as stated above in their respective sections. In representing both Landlord and Tenant, the agent may not, without the express permission of the respective party, disclose to the other party that the Landlord will accept a rent less than the listed rent or that the Tenant will pay a rent greater than the rent offered. The above duties of the agent in a real estate transaction do not relieve a Landlord or Tenant from the responsibility to protect their own interests. You should carefully read all agreements to assure that they adequately express your understanding of the transaction. A real estate agent is a person qualified to advise about real estate. If legal or tax advice is desired, consult a competent professional. You should read its contents each time it is presented to you, considering the relationship between you and the real estate agent in your specific transaction. We acknowledge receipt of a copy of this disclosure. Landlor r� Tenant4 'eAll 11V �� City of`S�n Rafael, by Ken NordhofCity Manager Date .. Date 5/ -lU d7 Page 1 of 2 SIGN BELOW TO AUTHORIZE TYPE OF AGENCY Keegan & Coppin Co., Inc. is the agent of (check one): (Name of Listing Agent) The Landlord exclusively; or X Both the Tenant and Landlord CONFIRMED AND AUTHORIZED: Landlord: p^ Agent: 1 ¢G) rim. + /'A",14 (A3. I Iti.(�— By: Keegan & Coppin Co., Inc. is the agent of (check one): (Name of Tenant's agent) The Tenant exclusively; or X Both the Tenant and Landlord CONFIRMED AND AUTHORIZED: Tenant: kN-A �I p Agent: -% c i 1 co By: Page 2 of 2 Date: Date: 1-3-0% Date: D -5/ -"i -u Date: 1-3 - v 4 � � �� b r ,� � �. w.� �. ,., ,� � .�.�, ... & .,,..,