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HomeMy WebLinkAboutPCDC Resolution 2005-16 11/21/2005RESOLUTION 2005-16 PETALUM~4 COMMUNITY DEVELOPMENT COMMISSION A RESOLUTION OF THE PETALUMA COMMUNITY DEVELOPMENT COMMISSION APPROVING A SUBLEASE OF THE PASSENGER DEPOT BUILDING TO THE PETALUMA AREA CHAMBER OF COMMERCE FOR THE PETALUMA VISITOR'S PROGRAM WHEREAS, the Petaluma Community Development Commission ("PCDC") is the Lessee under that certain Commercial Lease (the "Master Lease") dated August 1, 2003 and execufied by and between Northwestern Pacific Railroad Authority, a public joint powers authority ("Northwestern") and PCDC; WHEREAS, the Sonoma Marin Area Rail Transit District ("SMART") is the successor in interest to Northwestern under the Master Lease; WHEREAS, pursuant to the Master Lease, PCDC leases fhe real property known as Sonoma County Assessor's Parcel No. 007-131-004 located on Lakeville Street between East Washington and D Streets in the City of Petaluma, including three buildings located thereon consisting of the "Passenger Depot," the "Baggage Shed" and the "Freight Shed" (collectively, the "Depot Property") for a term of ten (10) years with an option to renew for fifteen (15) additional years subject to SMART's right to terminate the Master Lease by giving one-year's notice if the property or portion thereof is required for transportation-related purposes; WHEREAS, PCDC desires to sublease the Passenger Depot to the Petaluma Area Chamber of Commerce (the "Chamber") for use by the Petaluma Visitor's Program, and the Chamber desires to sublease the Passenger Depot from PCDC for the purpose of establishing and operating q visitor's bureau serving current and prospective Petaluma businesses, residents, tourists and visitors, and for related administrative offices; WHEREAS, the Chamber's sublease of the Passenger Depot for such purposes will attract visitors traveling along the Lakeville/Washington/Bodega corridor and thereby benefit both the Petaluma Community Development Project Area and the Central Business. District Project Area and thereby will have a positive impact on the commerce and economic revitalization of both project areas and thereby aid the elimination of blight; and WHEREAS, PCDC has considered the Sublease Agreement attached hereto as Exhibit A (the "Sublease") at a public hearing following publication of notice as required by Health and Safety Code Section 33431. NOW, THEREFORE, BE IT RESOLVED that the Petaluma Community Development Commission hereby: PCDC Resolution 2005-16 Page 1 1. Finds that the proposed Sublease is consistent with Community Redevelopment Law, the redevelopment plans adopted for the project areas, and the implementation plans adopted in connection therewith. 2. Approves the Sublease and authorizes and directs the Executive Director to execute the Sublease substantially in the form attached hereto as Exhibit A. Adopted this 21 S' Day of November 2005 by the following vote: Commissioner Aye No Absent Abstain Canevaro X Chair Glass X Vice Chair Harris X Healy X Nau X O'Brien X Torliatt X ~ =~ i y~ ~j ~~ ~ ~ ~ ~_ 1 // / /fJ_- ~ " avid Glass, Chair - ATTEST: C~.~,c/~-~J Claire Cooper, Recording ecretary APPROVED AS TO FORM: . ~..._.-...-_-__1_~.. "" r i Richar R. Rind ~ ansk ~ Ge ral Counsel PCDC Resolution 2005-16 Page 2 Exhibit A SUBLEASE AGREEMENT THIS SUBLEASE AGREEMENT (this "Sublease") is entered into this 7th day of November, 2005 ("Effective Date"), by and between the Petaluma Community Development Commission ("Agency") and the Petaluma Area Chamber of Commerce, a California nonprofits corporation ("Sublessee"). Agency and Sublessee are hereinafter collectively referred to as the "Parties." WHEREAS, Agency is the Lessee under that certain Commercial Lease (the "Master Lease") dated August 1, 2003 and executed by and between Northwestern Pacific Railroad Authority, a public joint powers authority ("Northwestern") and Agency; WHEREAS, the Sonoma Marin Area Rail Transit District ("SMART") is the successor in interest to Northwestern under the Master Lease; WHEREAS, pursuant to the Master Lease, Agency leases the real property known as Sonoma County Assessor's Parcel No. 007-131-004 located on Lakeville Street between East Washington and D Streets in the City of Petaluma, including three buildings located thereon consisting of the "Passenger Depot," the "Baggage Shed" and the "Freight Shed" (collectively, the "Depot Property" and each more particularly described in the Master Lease) for a term of ten (10) years with an option to renew for fifteen (15) additional years subject to SMART's right to terminate the Master Lease by giving one-year's notice if the property or portion thereof is required for transportation-related purposes; and WHEREAS, the Agency desires to sublease the Passenger Depot (as more particularly described below) to Sublessee, and Sublessee desires to sublease the Passenger Depot from Agency pursuant to the terms and conditions set forth herein. NOW, THEREFORE, for good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows: 1. Sublessee Representations. Sublessee represents and warrants as follows: (i) Sublessee is a nonprofits corporation duly organized and in good standing under the laws of the State of California and exempt under Section 501(c) (b) of the Internal Revenue Code of 1986, as amended; (ii) Sublessee has full right, power and authority to undertake all obligations of Sublessee as provided herein, and the execution, performance and delivery of this Sublease by Sublessee has been duly authorized by all requisite actions; (iii) the persons executing this Sublease on behalf of Sublessee have been duly authorized to do so; and (iv) this Agreement constitutes a valid and binding obligation of Sublessee. 2. Leased Premises. Subject to the terms and conditions set forth in this Sublease, Agency hereby subleases to Sublessee, and Sublessee hereby subleases from Agency, the building located on Lakeville Street in the City of Petaluma consisting of approximately 2540 square feet, commonly known as the Passenger Depot, and more particularly described in Exhibit A attached hereto and incorporated herein (the "Leased Premises"). 3. Term; Termination; Waiver of Relocation Benefits. The term of this Sublease (the "Term") shall commence on November 7, 2005 (the "Commencement Date") and shall terminate on the eighth (8ih) anniversary thereof, unless this Sublease is sooner terminated as provided herein. The Parties acknowledge that pursuant to the Master Lease, SMART has the right to terminate the Master Lease or restrict Agency's use of the .Depot Property upon delivery PCDC Resolution 2005-1 b Page 3 to Agency of one-year's notice if the Depot Property or portion thereof is required for transportation-related purposes. The Parties agree that within thirty (30) days following Agency's receipt of any such notice which would affect the Leased Premises, Agency shall provide Sublessee with a copy of such notice together with (in Agency's sole discretion) a notice of termination or proposed modification of this Sublease. If Agency exercises its right to terminate this Sublease pursuant to this Section 3, it shall provide no less than ten months written notice to Sublessee, and Sublessee shall surrender the Leased Premises on the date specified in the notice ("Termination Date") and shall in all other respects comply with the provisions set forth in Section 3.1.1 below. Subject to Sublessee's rights under Section 3.1, if Agency or SMART requires only a portion of the Leased Premises, this Sublease shall continue in full force except that Rent shall be reduced in proportion to the portion of the Leased Premises rendered unusable by Sublessee for the conduct of its business compared to the total area of the Leased Premises. Sublessee, for itself and any subtenants, sublessees or other permittees knowingly waives any and all benefits, monetary or otherwise, under the California Relocation Assistance Law (Government Code Section 7260 et seq.) and the Federal Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (Title 42, U.S. Code Section 4601 of seq.) as such laws may be amended. Sublessee agrees to indemnify, defend and hold Indemnities (defined in Section 19) harmless from and against any Claims (defined in Section 19) arising in connection with or filed pursuant to the foregoing statutes by any subtenant, sublessee or permittee of Sublessee. Sublessee Initials 3.1 Cancellation Option. Sublessee shall have the right to cancel this lease ("Cancellation Right") subject to the terms of this Section 3.1 under the following circumstances: (a) Sublessee reasonably determines that funding for the Petaluma Visitor's Center falls to a level that is inadequate to allow continued operation of the Visitor's Center at the Leased Premises, or (b) pursuant to Section 3, Agency has delivered notice to Sublessee that a portion of the Leased Premises will no longer be available for Sublessee's occupancy. The Cancellation Right shall be exercised by Sublessee, if at all, only by delivery of written notice to Agency not less than six (b) months prior to Sublessee's proposed cancellation date ("Cancellation Date"). The Cancellation Right is personal to Sublessee and is not transferable or assignable to any assignee of this Sublease or any subtenant of all or any portion of the Leased Premises whether by voluntary or involuntary act or by operation of law or otherwise, and shall automatically lapse (and Sublessee shall have no further right to cancel this Sublease pursuant to this Section) upon any assignment of this Sublease or subletting of all or any portion of the Leased Premises. In addition, if an uncured Sublessee Default exists at the time of Sublessee's attempted exercise of the Cancellation Right or at any time thereafter prior to the Cancellation Date, then, at Agency's written election, the Cancellation Right shall lapse and this Sublease shall continue in full force and effect. 3.1.1 If Sublessee properly exercises the Cancellation Right or if Agency elects to terminate the Sublease pursuant to Section 3, then subject to the provisions of Section 3 and the subsections thereof: (i) this Sublease shall automatically terminate, as if it had expired pursuant to its terms effective as of the Cancellation Date or Termination Date as applicable, (ii) Sublessee shall continue to observe and perform all obligations under this Sublease through and including the Cancellation Date or the Termination Date, as applicable, including without limitation, its obligation to pay Rent hereunder, (iii) all obligations of Sublessee under this Sublease which by their terms are to survive the expiration or sooner termination of this Sublease shall survive such cancellation or termination, and (iv) Sublessee shall vacate and surrender possession of the Leased Premises to Agency on the Cancellation Date or the Termination Date, as applicable, in the condition required under this Sublease (and if Sublessee fails to so vacate PCDC Resolution 2005-16 Page 4 and surrender possession of the Leased Premises to Agency on the Cancellation Date or the Termination Date as applicable, such holdover shall be deemed to be without Agency's prior written consent. 4. Master Lease; Prior Rights. This Sublease is made subject and subordinate to the prior and continuing rights and obligations of Agency and SMART as described in the Master Lease, a copy of which is attached hereto as Exhibit B. This Sublease is made subject to all licenses, leases, easements, restrictions, conditions, covenants, encumbrances, liens, and claims of title that may affect the Leased Premises in effect as of the Effective Date. 5. Rent. Rent for the period commencing on the Commencement Date and ending on June 30, 2006 shall be One Dollar ($1.00) payable upon execution of this Sublease. Commencing on July 1, 2006, Sublessee shall pay to Agency as rent for the Leased Premises the sum of One Thousand Two Hundred Fifty Dollars ($1,250) per month, payable to the Agency at 1 1 English Street, Petaluma, California 94953 in advance on the first day of each and every month of the Term without deduction, setoff, prior notice or demand of any kind. 6. Late Charges; Interest. If any installment of rent or other sum due from Sublessee is not received by Agency within fifteen (15) days of the date it is due, then Sublessee shall pay to Agency a late charge equal to ten percent (10%) of such overdue amount. The parties hereby agree that such late charge represents a fair and reasonable estimate of the costs Agency will incur by reason of late payment by Sublessee which are impracticable to estimate. Acceptance by Agency shall in no event constitute a waiver of Sublessee's default or breach with respect to such overdue amount or prevent Agency from exercising any other rights and remedies granted herein. 7. Rent Adjustments. The monthly rent payable hereunder shall be adjusted effective as of July 1, 2007 and on July 1 of each succeeding year of the Term based upon the net percentage change in the Consumer Price Index, All Urban Consumers (All Items), for the San Francisco/Oakland Metropolitan Area as published by the U.S. Department of Labor Statistics ("Index") based upon the published index value for January of the year in which the adjustment is to be made. Changes in the Index of less than one full point (1.0) shall be rounded to the nearest full point, i.e., 1.50 to 1.99 shall be treated as 2.0; 1.01 to 1.49 shall be treated as 1.0. If the Index is not published in January of the year in which the adjustment is to be made, then Index values of the month immediately preceding that January shall be used. If the Index is discontinued, it shall be replaced by an index that most closely approximates the original Index as determined by the U.S. Bureau of Labor Statistics. 8. Security Deposit.. Upon execution of this Sublease, Sublessee shall post a security deposit with Agency in an amount equal to Three Thousand Seven Hundred Fifty Dollars ($3,750). Sublessee shall return the Leased Premises to Agency at the termination of this Sublease in the same condition as at the beginning of the Term, normal wear and tear excepted. In the event Agency is required to undertake repairs of the Leased Premises, the security deposit shall be applied toward any such repair costs. Any remaining balance shall be refunded to Sublessee following termination of this Sublease. No interest will be payable on the security deposit. 9. Permitted Use. The Leased Premises shall be used solely and exclusively for the purpose of operating a visitor's bureau serving current and prospective Petaluma businesses, residents, tourists and visitors, and for related administrative offices (collectively, "Permitted Use"). Sublessee shall not use the Leased Premises for any use other than the Permitted Use without Agency's prior written consent which consent may be withheld by Agency in its sole discretion. PCDC Resolution 2005-16 Page 5 10. Waiver of Nuisance Claims. Sublessee acknowledges that railroad tracks are, or may in the future, be located adjacent to the Leased Premises and that the operation of trains does and shall produce noise at levels that may be considered objectionable by Sublessee and its employees, agents and invitees. Sublessee agrees that no legal action or complaint of any kind shall be instituted against Agency or SMART by or on behalf of Sublessee as a result of such noise levels including any claims of nuisance or trespass. Sublessee shall indemnify, defend and save Indemnities harmless from and against any Claim arising as a result of or in connection with any such action being taken by Sublessee or its employees, agents, sublessees, subtenants, permittees or invitees. 1 1. Condition of Leased Premises. a. "AS-IS" Rental. Agency subleases the Leased Premises to Sublessee on an "AS IS" basis, and Sublessee acknowledges that Agency makes no representation or warranty of any kind, express or implied, in connection with soils, improvements, or physical condition of the Leased Premises or the Depot Property, or the suitability of the Leased Premises for Sublessee's intended use or otherwise bearing on Sublessee's use of the Leased Premises, or as to whether any Hazardous Materials are present upon, in, under, or about the Depot Property or the Leased Premises or whether such materials have been released from the Leased Premises or the Depot Property. As used in this Sublease, "Hazardous Materials" shall mean any hazardous or toxic substance, material, or waste at any concentration that is or becomes regulated by the United States, the State of California, or any governmental authority having jurisdiction over the Leased Premises or the Depot Property. b. Inspections. Sublessee shall be solely responsible for conducting any inspections it may deem necessary or appropriate in determining whether to enter this Sublease. Sublessee may examine and inspect all matters with respect to taxes, operating expenses, insurance costs, bonds, permissible uses, historical uses, zoning, covenants, conditions and restrictions and all other matters which in Sublessee's judgment might bear upon the value and suitability of the Leased Premises for Sublessee's purposes or Sublessee's willingness to enter into this Sublease. Sublessee acknowledges that Agency has made no representations and warranties regarding these matters, whether express or implied, and that Sublessee has relied on its own inspections and examinations in entering into this Sublease. As of the Effective Date, Sublessee shall be deemed fully satisfied with the results of all of the inspections and examinations contemplated in this Section 1 1, and Sublessee be deemed to have accept the Leased Premises "AS IS" with all faults. 12. Restrictions on Use; Environmental Matters. a. Sublessee shall not commit, nor permit .nor suffer the commitment by any sublessee, licensee, contractor, employee, agent, permittee, invitee, or guest of Sublessee, of damage, waste or nuisance in, on or about the Leased Premises or the Depot Property, nor shall it use or allow the Leased Premises or the Depot Property to be used in violation of federal, state, or local laws, ordinances or regulations. b. Sublessee shall not cause or permit the use or release of Hazardous Materials, including without limitation, any gasoline, diesel fuel, oil; other petroleum products, or any hazardous or explosive material, waste or substance in, on, under or from the Leased Premises or the Depot Property; provided however, the presence or use of Hazardous Materials in products required for the prudent and ordinary management and operation of the Leased Premises held and used strictly in accordance with applicable law and prudent standards of practice shall not violate this covenant. If Agency or any governmental enforcement agency PCDC Resolution 2005-16 Page 6 finds Sublessee to be in violation of this Section 12, then unless otherwise agreed upon by the Parties, Sublessee shall perform investigations, removal, or other remedial work required under applicable law. Sublessee may delay commencement of remedial work pending resolution of a good faith contest regarding the application, interpretation or validity of laws, orders, or agreements. Agency shall approve the remedial work, which approval shall not be unreasonably withheld or delayed. c. If during the term of this Sublease, Sublessee knows or has cause to believe that any Hazardous Materials, have come to be located in, on, under or about the Leased Premises, other than as previously consented to by Agency, Sublessee shall immediately give Agency written notice thereof, together with a copy of any statement, report, notice, registration, applications, permit, business plan, license, claim,. action or proceeding given to, or received from, any governmental authority or private party concerning said Hazardous Materials. Should any discharge, leakage, spillage, or emission of any Hazardous Materials, or pollution of any type occur upon or from the Leased Premises during the Term, Sublessee, at Sublessee's expense, shall clean all property affected thereby to the satisfaction of Agency (insofar as the property owned or controlled by Agency is concerned) and any governmental body having jurisdiction thereover. d. Sublessee shall indemnify, hold harmless, and defend each and all of the Indemnities from and against all liability, claims, costs and expenses (including, without limitation, any fines, penalties, judgments, litigation costs, attorneys' fees, and consulting, engineering and construction costs) incurred by such Indemnities or any of them as a result of Sublessee's breach of this Section 12, regardless of whether such liability, cost or expense arises during or after the Term, and regardless of whether such liability, cost or expense is contributed to or caused by the negligence, active or passive, of Agency. The provisions of this Section 12 shall survive the expiration or termination of this Sublease. 13. Holdover and Surrender. At the termination of this Sublease, Sublessee shall vacate the Leased Premises, leaving them in the same condition as existed as of the Effective Date, reasonable wear and tear excepted. Sublessee shall leave the Leased Premises free and clear of all rubbish upon vacating. If Sublessee holds over beyond the end of the Term with the written consent of Agency, such tenancy shall be deemed to be a month-to-month tenancy subject to all terms of this Sublease. 14. Alterations. Sublessee shall not make any alterations, renovations, installation of any fixtures, additions or improvements (collectively, "Alterations") to the Leased Premises without the prior written consent of Agency which Agency may withhold in its sole discretion. Sublessee acknowledges that the prior consent of SMART may also be required and that pursuant to the Master Lease, Agency and SMART may impose additional requirements in connection with or as a condition to approval of any proposed Alteration. Sublessee acknowledges that the Passenger Depot is eligible for inclusion on the National Register of Historic Places. Sublessee agrees that all Alterations must be conducted in accordance with the Secretary of the Interior's Guidelines for Historic Buildings and. applicable local building codes. Sublessee agrees that it shall not nominate the Leased Premises for inclusion on the National Register without the consent and cooperation of Agency and SMART. Unless Agency agrees otherwise in writing, Sublessee shall remove all Alternations at Sublessee's expense prior to termination of this Sublease and shall restore the Leased Premises to the same condition as at the beginning of the Term, normal wear and tear excepted. PCDC Resolution 2005-16 Page 7 15. Inspection/Maintenance/Restoration. a. Sublessee shall keep the Leased Premises in safe condition and good order, condition and repair at all times during the Term at Sublessee's sole cost and expense. Sublessee shall, at Sublessee's sole expense, repair any area damaged by Sublessee, its agents, employees and visitors and shall provide routine maintenance and repairs to the Leased Premises. Sublessee's obligations shall include, without limitation, ensuring that all plumbing, heating, air-conditioning, ventilation, and electrical systems that serve the Leased Premises, any plate glass, and any fixtures, are in operable condition and repair. Sublessee acknowledges that Agency is under no duty to repair or make improvements to the Leased Premises. If Sublessee fails to perform its obligations under this Section 15, Agency may enter upon the Leased Premises after 72 hours written notice (except in the case of emergency in which case no notice shall be required) and perform such obligations on Sublessee's behalf and expense, and in such case Agency's expenditures pursuant to this Section 15 shall be treated as additional rent, due and payable upon written notice. b. No loss or damage by fire or any other cause resulting in either partial or total destruction of the Leased Premises, or any fixtures, equipment or machinery used or intended to be used in connection with the Leased Premises shall operate to terminate this Sublease or the performance and observance of any of the agreements, covenants and conditions herein contained to be performed by the Parties, to the extent that restoration of the Leased Premises, to at least as good a condition as existed prior to the damage or destruction is practicable as mutually determined by Agency and Sublessee. Notwithstanding the foregoing, in the event of "Major Damage or Destruction" to the Leased Premises during the Term, if the Parties agree not to restore the Leased Premises, this Sublease shall terminate as of the date of the fire or other casualty. "Major Damage or Destruction" to the Leased Premises shall mean damage or destruction which constitutes twenty-five (250) percent or more of the replacement cost of all improvements on the Leased Premises, calculated on the basis of replacement cost as of the date of damage or destruction. The provisions of this Sublease, including this Section 15, constitute an express agreement between Agency and Sublessee with respect to any and all damage to, or destruction of, all or any part of the Leased Premises, and Agency and Sublessee agree that Sections 1932 and 1933 of the California Civil Code shall have no application to this Sublease or any damage or destruction to the Leased Premises. c. Exterior Common Area Maintenance; Structural Repairs. The Parties acknowledge and agree that Agency shall be responsible for maintenance of exterior common areas including landscaping, sidewalks and parking areas on the Depot Property and for structural repairs to the Passenger Depot. d. Parking. The Parties acknowledge that Sublessee and its employees, invitees and guests will be permitted to use parking spaces in the parking lot adjacent to the Passenger Depot. If the Agency leases the Freight Shed to a tenant that requires use of the parking lot, then the Agency will designate parking spaces in such parking lot for Sublessee use on a pro rata basis taking into consideration the square footage of the Passenger Depot and the Freight Shed. 16. Utilities. Sublessee will pay, prior to delinquency, any and all charges for utilities and other services supplied or charged to the Leased Premises., together with any taxes thereon. Such utilities and other services shall include, without limitation, all electricity, water, natural gas or other heating fuel, communications, use of storm and sanitary sewers, and refuse collection (collectively, "Utilities"). Agency shall have no obligation or responsibility to provide Utilities to the Leased Premises, and no failure or interruption of the same shall entitle Sublessee to PCDC Resolution 2005-16 Page 8 terminate this Sublease. In the event Agency shall for any reason pay any charges for Utilities, the amount of such payment shall, at the option of Agency, be additional rent, due and payable immediately upon written notice to Sublessee. 17. Liens. Sublessee shall not permit any mechanics' or materialmen's liens, stop orders or other liens or charges of any kind (collectively "Liens") to be filed against the Leased Premises, the Passenger Depot, Sublessee's leasehold interest in the Passenger Depot, or the Depot Property by reason of labor or materials furnished at Sublessee's instance or request or for any .other reason attributable to an action or inaction by or on behalf of Sublessee. If any such Liens are filed, Sublessee shall cause the same to be discharged either by payment of the claim or by posting and recording the bond contemplated by California Civil Code Section 3143, within twenty (20) days after demand by Agency. Sublessee shall indemnify, hold harmless, and defend Agency from and against any such Liens. 18. Compliance with Laws. Sublessee shall at all times during the Term, comply with all applicable federal; state and local laws, statutes, ordinances, rules, orders and regulations pertaining to the occupancy and use of the Leased Premises, including without limitation, those relating to signage, health, disability accommodation (including the Americans with Disabilities Act), safety, environmental protection, historic building codes and the Secretary of the Interior's Guidelines for Historic Buildings. Failure to comply with any of the foregoing shall constitute a material breach of this Sublease and shall be grounds for termination. 19. Indemnification; Insurance. a. Indemnification. To the maximum extent permitted by law, at Sublessee's sole expense and with counsel reasonably acceptable to Agency, Sublessee shall indemnify, defend, and hold harmless Agency, the City of Petaluma, Northwestern, SMART, the Golden Gate Bridge, Highway and Transportation District, the County of Marin, the North Coast Railroad Authority, the Union Pacific Railroad Company, the successors and assigns of each of the foregoing, and the respective elected and appointed officers, officials, directors, employees, agents, contractors and representatives of the foregoing (including but not limited to, any person that may be operating Northwestern's or SMART's railroad tracks and services) (all of the foregoing entities and individuals, collectively "Indemnities"), from and against all liability, loss, cost, claim, demand, action, suit, legal or administrative proceeding, penalty, deficiency, fine, damage and expense (including, without limitation, reasonable attorney's fees and costs of litigation) (all of the foregoing, collectively hereinafter "Claims") resulting from or arising in connection with (i} Sublessee's use or occupancy of the Leased Premises, (ii) any act or omission of Sublessee or Sublessee's officers, employees, agents, contractors, or visitor's, or (iii) any breach or default by Sublessee under this Sublease, except to the extent any such Claim arises as the result of the gross negligence or willful misconduct of the Indemnities. Sublessee's indemnification obligations set forth in this Section 19 shall survive the expiration or earlier termination of this Sublease. b. LiabilitX Insurance. Sublessee shall, at Sublessee's expense, procure and keep in force throughout the Term, a policy of comprehensive general liability insurance insuring Sublessee (and naming the Indemnities as additional insureds) written on an occurrence basis in an amount not less than Two Million Dollars ($2,000,000) combined single limit for bodily injury and property damage per occurrence including coverage for personal injury, contractual insurance and fire legal liability insurance. The policy shall contain a waiver of subrogation in favor of the Indemnities. c. Intentionally Omitted. PCDC Resolution 2005-16 Page 9 d. Workers' Compensation. Sublessee shall, at Sublessee's expense, procure and maintain in force throughout the Term, Workers' Compensation insurance in compliance with applicable law. e. Personal Property Insurance. Sublessee shall provide Agency with evidence of personal property insurance coverage. f. Evidence of Insurance; General Requirements. Prior to occupying the Leased Premises, Sublessee shall provide Agency with Certificate(s) of insurance evidencing the coverage and endorsements required hereunder ("Certificates"), and upon request shall provide Agency with a certified duplicate original of the required policies. All insurance policies required hereunder shall be issued by companies licensed to do business in the State of California and acceptable to Agency. The Certificates shall provide that (i) the insurance companies issuing such policies shall give Agency written notice of any material alteration, cancellation, nonrenewal or reduction in coverage, and shall provide at least 30 days' notice of cancellation; and (ii) the polic(ies) are primary and noncontributing with any insurance carried by the Indemnities. No later than 30 days prior to the expiration or termination of any insurance policy required hereunder, Sublessee shall furnish Agency with evidence of renewal or replacement. 20. Nondiscrimination. Sublessee covenants by and for itself, its assigns, and all persons claiming under or through Sublessee, and this Sublease is made and accepted upon and subject to the condition that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, sexual preference, marital status, disability, national origin or ancestry in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the Leased Premises ,nor shall Sublessee or any person claiming under or through Sublessee, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of lessees, sublessees or vendees in the Leased Premises . 21. Taxes and Assessments. Sublessee shall pay, before they become delinquent, all taxes (if applicable), charges, and assessments which are levied upon or assessed against any improvement or personal property placed upon the Leased Premises by Sublessee. Sublessee shall pay, before they become delinquent, any and all property taxes and/or possessory interest taxes, assessments and/or supplemental taxes which are levied or assessed by any governmental entity on the Leased Premises or Sublessee's possession and/or use thereof. In the event that any tax, assessment or charge that Sublessee is obligated to pay pursuant to this Section is not separately levied on the Passenger Depot or the Leased Premises, then Sublessee's payment obligations under this Section shall be a pro rata share based upon the ratio that the square footage of the Leased Premises (as such may be adjusted pursuant to Section 3) bears to the square footage of the land and improvements comprising the Depot Property (or portion thereof that is subject to tax, assessment or charge). In addition to the taxes and assessments specified above, Sublessee shall pay to Agency, if applicable, any privilege, sales, gross income or other tax (but not including federal or state income tax), imposed upon the Rent by any governmental entity. 22. Defaults. The occurrence of any of the following shall constitute a material breach and default ("Default") of this Sublease by Sublessee: Any failure by Sublessee to pay when due any rent or other charges payable hereunder by Sublessee; PCDC Resolution 2005-16 Page 10 A failure by Sublessee to observe or perform any other provision of this Sublease to be observed or performed by Sublessee when such failure is not corrected within ten (10) days after written notice thereof from Agency; or if such failure cannot be cured within this ten (10) day period, as determined by Agency in its reasonable discretion, if such cure is not commenced within thirty (30) days of Agency's written notice and thereafter diligently pursued to completion; The abandonment or the vacation of the Leased Premises by Sublessee for a period of more than fifteen (15) consecutive days; The happening of any of the following events: (a) the filing or institution by Sublessee of any proceeding under the Bankruptcy Act and any amendment thereto, or any other federal or state act now or hereafter relating to the subject of bankruptcy, insolvency, arrangement, reorganization, or other form of debtor relief, (b) the institution or filing of any involuntary proceeding against Sublessee under any of the aforementioned laws unless such proceeding is dismissed within thirty (30) days thereafter, (c) an adjudication of bankruptcy or a finding or judgment of insolvency of Sublessee, (d) an assignment for the benefit of creditors by Sublessee, (e) the levy of a writ of execution of the business of Sublessee or the assets of Sublessee located on the Leased Premises which is not discharged within ten (10) days after the date of said levy, or (f) the appointment of a receiver to take possession of any property of Sublessee. 23. Remedies. In the event of a Default by Sublessee, Agency, may at any time thereafter: a. Cure such Default at Sublessee's expense in which case Sublessee shall, upon demand, immediately reimburse Agency for the cost of such cure together with interest at the rate of 10~o per annum from the date of the expenditure therefor by Agency until such reimbursement is received by Agency. b. Maintain Sublessee's right to possession in which case this Sublease shall continue in effect whether or not Sublessee shall have vacated or abandoned the Leased Premises, in which event Agency shall be entitled to enforce all of Agency's rights and remedies under this Sublease, including the right to recover the Rent as it becomes due hereunder as provided in California Civil Code Section 1951.4. Acts of maintenance or preservation, efforts to re-let the Leased Premises, or the appointment of a receiver upon the initiative of Agency to protect Agency's interest under this Sublease shall not constitute a termination of Sublessee's right to possession. No act by Agency other than giving written notice to Sublessee will terminate this Sublease. c. Terminate Sublessee's right to possession of the Leased Premises by any lawful means, in which case this Sublease shall terminate and Sublessee shall immediately surrender possession of the Leased Premises to Agency. In such event Agency shall be entitled to recover from Sublessee the sum of all amounts set forth in California Civil Code Section 1951.2~a), including without limitation, the worth at the time of award of the amount by which all unpaid rent for the balance of the Term of this Sublease after the time of award exceeds the amount of such rental loss that Sublessee proves could be reasonably avoided, and all other damages incurred by Agency by reason of Sublessee's default including, without limitation, the cost of recovering possession of the Leased Premises, and expenses of re-letting such as renovation of the Leased Premises and real estate commissions and finder's fees actually paid for such re-letting. The "worth at the time of award" shall be computed in the manner provided in California Civil Code Section 1951.2~b) or its successor statute. For the purpose of determining unpaid rent under this paragraph, the rent reserved in this Sublease shall be deemed. to be the sum of all then unpaid monetary obligations owed under this Sublease. PCDC Resolution 2005-16 Page 1 1 d. Pursue any other remedy now or hereafter available to Agency under the laws of California. Termination of this Sublease under this Section 23 or for any reason whatsoever shall not release either party from any liability or obligation arising from an event which may have occurred before termination including, but not limited to payment of all Rent due but unpaid as of the date of termination), or from actions that, under the expressed terms of this Sublease, must be performed. 24. Subordination, Non-Disturbance and Attornment. a. Subordination. This Sublease shall be subject and subordinate to any mortgage, deed of trust or hypothecation or security device now or hereafter placed upon the Depot Property, to any and to all renewals, modifications and extensions thereof. Sublessee agrees that any lender under such security device shall have no liability or obligation to perform any of the obligations of the Agency under this Sublease. b. Non-disturbance. With respect to security devices entered into by Agency after the execution of this Sublease, Sublessee's subordination of this Sublease shall be subject to receiving a commercially reasonable non-disturbance agreement from the Lender which provides that Sublessee's possession of the Leased Premises and this Sublease will not be disturbed so long as Sublessee is not then in default and attorns to the record owner of the Leased Premises. c. Attornment. In the event that title to the Leased Premises is acquired by another party upon the foreclosure or termination of a security instrument to which this Sublease is subordinated: (a) subject to the non-disturbance provisions above, Sublessee shall attorn to such new owner, and (b) such new owner shall assume all of Agency's obligations hereunder and Agency shall thereafter be relieved of any further obligations hereunder. 25. Sublease or Assignment. Sublessee shall not sublease or assign its rights under this Sublease by operation of law or otherwise without the prior written consent of Agency. Any sublease or assignment by operation of law or otherwise absent Agency's prior written consent shall be void and of no effect. 26. Miscellaneous. 26.1 Attorney's Fees. In the event either party shall commence any legal action arising out of this Sublease or the performance thereof, the party prevailing in said action or proceeding shall be entitled to recover, in addition to its court costs, reasonable attorney's fees to be fixed by the court. 26.2 Notice. Except as otherwise specified herein, all notices to be sent pursuant to this Sublease shall be made in writing, and sent to the Parties at their respective addresses specified below or to such other address as a Party may designate by written notice delivered to the other Party in accordance with this Section. All such notices shall be sent by: a. personal delivery, in which case notice is effective upon delivery; b. certified or registered mail, return receipt requested, in which case notice shall be deemed delivered on receipt if delivery is confirmed by a return receipt; PCDC Resolution 2005-16 Page 12 c. nationally recognized overnight courier, with charges prepaid or charged to the sender' s account, in which case notice is effective on delivery if delivery is confirmed by the delivery service; d. facsimile transmission, in which case notice shall be deemed delivered upon transmittal, provided that (a) a duplicate copy of the notice is promptly delivered by first-class or certified mail or by overnight delivery, or (b) a transmission report is generated reflecting the accurate transmission thereof. Any notice given by facsimile shall be considered to have been received on the next business day if it is received after 5:00 p.m. recipient's time or on a nonbusiness day. Agency: Petaluma Community Development Commission 1 1 English Street Petaluma, CA 949532 Sublessee: Petaluma Area Chamber of Commerce b Petaluma Boulevard North, Suite A2 Petaluma, CA 94952 2b.3 Entire Agreement. This Sublease, together with the Exhibits attached hereto constitutes the entire agreement of the Parties with respect to the subject matter hereof and supersedes all prior negotiations and agreements with respect thereto. 26.4 No Waiver; Remedies Cumulative. No waiver of any provision of this Sublease shall be implied by any failure of Agency to enforce any remedy for the violation of that provision, even if that violation continues or is repeated. Any waiver by Agency of any provision of this Sublease must be in writing. Such written waiver shall affect only the provision specified and only for the time and in the manner stated in the writing. Except as otherwise expressly stated in this Sublease, the rights and remedies of the Parties hereunder are cumulative, and the exercise or failure to exercise one or more of such rights or remedies by either party shall not preclude the exercise by it, at the same time or different times, o.f any right or remedy for the same default or any other default. Failure of delay by either Party in providing a notice of default shall not constitute a waiver of any default. 26.5 Governing Law. This Sublease shall be governed by and construed in accordance with the laws of the State of California without regard to principles of conflicts of laws. 26.6 Interpretation; Captions. The section headings used herein are solely for convenience and shall not be used to interpret this Sublease. The Parties acknowledge that this Sublease is the product of negotiation and compromise on the part of both Parties, and the Parties agree, that since both Parties have participated in the negotiation and drafting of this Sublease, shall not be construed as if prepared by one of the Parties, but rather according to its fair meaning as a whole, as if both Parties had prepared it. 26.7 Third Party Beneficiaries. Except as expressly stated in this Section, nothing contained in this Sublease is intended by the Parties, nor shall any provision of this Sublease be deemed or construed by the Parties or by any third person, to be for the benefit of any third party, nor shall any third party have any right to enforce any provision of this Sublease or be entitled to damages for any breach by Agency or Sublessee of any of the provisions of this Sublease. Notwithstanding the foregoing, the Indemnities specified in Section 19 who are not expressly parties to this Sublease shall be deemed third party beneficiaries under this Sublease PCDC Resolution 2005-16 Page 13 for purposes of enforcing any rights to indemnification and insurance granted hereunder, and shall be entitled to seek attorneys fees and costs as provided hereunder in any dispute arising from the enforcement of such rights. 26.8 Amendments. This Sublease may be modified or amended only by an instrument in writing executed by the Parties. 26.9 Counterparts. This Sublease may be executed in multiple counterparts, each of which shall be an original, and all of which taken together shall constitute one agreement. 26.10 No Joint Venture. Nothing in this Sublease is intended to or does establish any of the parties as partners, co-venturers, or principal and agent with one another. 26.1 1 Severability. If any term, provision, or condition of this Sublease is held by a court of competent jurisdiction to be invalid or unenforceable, the remainder of this Sublease shall continue in full force and effect unless the rights and obligations of the Parties have been materially altered or abridged thereby 26.12 Non-Liability of Officials, Employees and Agents. No member, official, employee or agent of Agency or Sublessee shall be personally liable in the event of any default or breach hereunder by either Party. 26.13 Time of Essence. Time is of the essence of each provision of this Sublease. Any reference to "days" shall mean calendar days except as otherwise expressly provided in this Sublease. 26.14 Successors and Assiclns. Subject to the provisions of this Sublease relating to assignment and subletting, this Sublease shall bind the heirs, executors, administrators, successors and assigns of any and all of the parties hereto. 26.15 Action or Approval. Whenever action and/or approval by Agency is required under this Sublease, Agency's Executive Director or his or her designee may act on and/or approve such matter unless specifically provided otherwise, or unless the Executive Director determines in his or her discretion that such action or approval requires referral to Agency's Board for consideration. 26.16 Further Assurances. The Parties agree to execute such instruments and to undertake such actions, including without limitation the provision of estoppel certificates as may reasonably be requested by either Party, or as otherwise may be necessary to effectuate the intent of this Sublease. SIGNATURES ON FOLLOWING PAGE. PCDC Resolution 2005-16 Page 14 IN WITNESS WHEREOF, the Parties have executed this Sublease as of the date first written above. Approved as to form: Attest: City Attorney Approved: Administrative Services Director Approved: Risk Manager AGENCY Petaluma Community Development Commission By: Its: Executive Director City Clerk SUBLESSEE Petaluma Area Chamber of Commerce, a California nonprofits corporation By: PCDC Resolution 2005-16 Page 15