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HomeMy WebLinkAboutC-5888 - Pacific View Drive, 3443 (3300) - Parking Lot Lease Agreement 2014 - Big Canyon ReservoirAMENDMENT NO. ONE TO LEASE AGREEMENT BETWEEN THE CITY OF NEWPORT BEACH AND V HARBOR DAY SCHOOL This AMENDMENT NO. ONE TO LEASE AGREEMENT ("Amendment No. One") is made and entered into as of this 14th day of July, 2020 ("Effective Date"), by and between the City of Newport Beach, a California municipal corporation and charter city ("City"), and Harbor Day School, a California nonprofit corporation ("Tenant"). City and Tenant may be individually referred to herein as a "Party," and collectively referred to herein as the "Parties." RECITALS A. City is the owner of the property, structures, and improvements commonly known as Big Canyon Reservoir located at 3300 Pacific View Drive, Newport Beach, California [Assessor's Parcel Number 458-331- 01] ("Property"). The Property is approximately 4.68 acres and depicted on Exhibit "A" of the Lease Agreement, as defined herein. B. City owns the Property, subject to certain covenants, conditions, restrictions and easements, pursuant to that Indenture Agreement executed by and between the City and The Irvine Company ("Irvine"), dated December 18, 1957, recorded December 20, 1957, as Instrument No. 164527, in Book 4143, and Page 395, of the Official Records in the Office of the County Recorder, County of Orange, State of California ("Deed"). C. The Deed required the City to construct a reservoir on the Property and contained other covenants and restrictions regarding use of the Property which was subsequently amended to allow limited use of a portion of the Property by Tenant for a school drop-off and queuing area, pursuant to that Amendment to Indenture Covenants and Restrictions & Quitclaim of Road Easement dated October 7, 2013, and recorded August 26, 2014, as Instrument No. 2014000345410, in the Official Records in the Office of the County Recorder, County of Orange, State of California ("Amendment"). D. Tenant is the owner of the property, structures, and improvements commonly known as Harbor Day School, located at 3443 Pacific View Drive, Newport Beach, California ("Harbor Day School"). Harbor Day School is operated as a private school with instruction for kindergarten through eighth grade. E. On August 6, 2014, the City entered into that certain Lease Agreement with Tenant ("Lease Agreement"), concerning approximately 0.69 acres of the Property ("Premises") to construct a parking lot (including improvements reasonably related thereto, such as gates, bollards and driveways) for: (i) temporary parking for the dropping off and picking up students who attend Harbor Day School; (ii) parking for events associated with Harbor Day School activities; and (iii) incidental lighting related to such purposes so long as all lighting is screened to minimize glare to Harbor Day School Page 1 neighboring residents (collectively, "Parking Lot"). The Premises is depicted and legally described on Exhibit "B" of the Lease Agreement. F. Tenant is rebuilding Harbor Day School and requests a modification to the Lease Agreement to temporarily allow Harbor Day School employees to park at the Premises during construction. G. Irvine granted a Consent to Temporary Construction Uses Within the Big Canyon Reservoir Site amending the Deed to temporarily allow a modification to use of the Premises during construction. H. Tenant requested and the City agrees to enter into this Amendment No. One to amend the Lease Agreement to temporarily allow and add an Exhibit B-1, which is attached hereto and incorporated herein by reference subject to the following conditions. AGREEMENT NOW, THEREFORE, in consideration of the benefits set forth herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties mutually agree as follows: 1. A Section 5.2.1 is hereby added to the Lease Agreement with the following: 5.2.1. Temporary Operation of Premises. For three (3) years from the Effective Date of this Amendment No. One, Tenant may temporarily allow employees to park in the Parking Lot, while maintaining a revised queuing plan for student pick up and drop off, in connection with a redevelopment project at the Harbor Day School property, and conditionally approved by the City as described and depicted in Exhibit B-1, attached hereto and incorporated herein by reference. Tenant shall be responsible for temporarily re -striping the Parking Lot to accomplish a safe and harmonious use of the Parking Lot by those utilizing it for both parking and queuing. Upon the conclusion of the three years from the Effective Date of this Amendment No. One, Tenant shall be responsible for re -striping the Parking Lot to return the Parking Lot to its original condition that preceded this Amendment No. One, in accordance with Exhibit B and the Lease Agreement. All requirements of Section 5.2 ("Operation of Premises") of the Lease Agreement remain in full force and effect. Harbor Day School Page 2 2. A Section 8.9 is hereby added to the Lease Agreement with the following: 8.9. Costs of Temporary Construction. Tenant shall bear all costs and expenses of the design, construction, maintenance, and removal thereof associated with the temporary operation of the Premises, as described in Section 5.2.1, including but not limited to the temporary re -striping of the Parking Lot. Notwithstanding the terms set forth in Section 8.6 (Payment of Costs) of the Lease Agreement, City shall not be responsible for any costs or liability associated with temporary operation of or construction thereon the Premises. 3. A Section 8.10 is hereby added to the Lease Agreement with the following.- 8.10 ollowing: 8.10 Disposition of Temporary Construction and Alteration at Expiration or Amendment No. One Termination. All re - striping of the Parking Lot shall be complete and the original queueing plan as set forth in Exhibit B of the Lease Agreement shall resume on September 1, 2023. A true and correct copy of the original queueing plan from Exhibit B of the Lease Agreement is reproduced within Exhibit B-1 for ease of reference. 4. A Section 10.4 is hereby added to the Lease Agreement with the following: 10.4 Hold Harmless Clause for Temporary Operation of the Premises and Construction Thereon. In addition to the indemnification and insurance obligations set forth in Sections 10.1 through 10.3, Tenant agrees to indemnify, defend and hold harmless the City, its City Council, Boards, Commissions, Committees, officers, agents, volunteers, and employees (collectively, the "Indemnified Parties") from and against any and all claims (including, without limitation, claims for bodily injury death or damage to property), demands, obligations, damages, actions, causes of action, suits, losses, judgments, fines, penalties, liabilities, costs and expenses (including, without limitation, attorney's fees disbursements and court costs) of every kind and nature whatsoever (individually, a "Claim," collectively, "Claims"), which may arise from or in any manner relate (directly or indirectly) to Tenant's, Tenant's employees, contractor, subcontractor, agents, guests, invitees, in connection with the temporary Harbor Day School Page 3 queueing, re -striping, operation and construction contemplated under this Amendment No. One. 5. Except as expressly modified herein, all other provisions, terms, covenants and conditions set forth in the Lease Agreement shall remain unchanged and shall be in full force and effect. [Signatures on Next Page] Harbor Day School Page 4 IN WITNESS WHEREOF, the parties hereto have executed this Amendment No. One as of the dates written below. APPROVED AS TO FORM: CITY ATTORNEY'S OFFICE Date: By: _�_A C_b_� Aaron C. arp cnhoukvAlzo City Atto ey ATTEST: Date: 7, A. ;44 By. Leilani I. Brown City Clerk CITY: CITY OF NEWPORT BEACH, a California municipal corporation and charter city Date: 7- Z 6-20 By: Graceung City gnager TENANT: HARBOR DAY SCHOOL, a California nonprofit corporation Date: Signed in Counterpart By. Angela Evans Chief Executive Officer Date: Signed in Counterpart By: Mark Dubeau Chief Financial Officer [End of Signatures] Attachments: Exhibit B-1 — Interim Queueing Plan Harbor Day School Page 5 IN WITNESS WHEREOF, the parties hereto have executed this Amendment No. One as of the dates written below. APPROVED AS TO FORM: CITY ATTORNEY'S OFFICE Date: By: Aaron C. Harp City Attorney ATTEST: Date: Leilani I. Brown City Clerk CITY: CITY OF NEWPORT BEACH, a California municipal corporation and charter city Date: M Grace K. Leung City Manager TENANT: HARBOR DAY SCHOOL, a California nonprofit corporation Date: s.� z�, Angela Evans Chief Executive Officer Date: _(0 15.1 Zo By: W F, Z'5� h-', -hi Me -Z. Rwo i4eA A4- Pio axe o F [End of Signatures] Attachments: Exhibit B-1 — Interim Queueing Plan EXHIBIT B-1 INTERIM QUEUEING PLAN Drop-off and pick-up operations are proposed to remain unchanged: morning drop- off occurs from approximately 7:40 a.m. to 8:00 a.m. and afternoon pick-up occurs from approximately 2:55 p.m. to 3:20 p.m. The Interim Queueing Plan, as described and depicted herein, will function almost exactly the same as it has since inception, but it will allow for the parking of 34 staff vehicles during construction of the on-site parking lot. 2. When arriving to pick up students, cars will line up in four (4) lines in the Carpool Queueing Area. At 3:00 p.m., two (2) teachers (orange dots) will be positioned in the Carpool Queueing Area. Seven (7) teachers (red dots) and a Carpool Pickup Area Captain (magenta dot) will be positioned in the Pickup Area. The Queueing Captain will motion cars when it is safe and time to leave the Interim Queueing Area and enter the School Pickup Area. 3. Furthermore, the two (2) teachers (orange dots) that are positioned in the Carpool Queueing Area will manage the five (5) queueing lanes by directing each lane to filter through the queue and into the two (2) designated lanes in the Pickup Area when directed by the Queueing Captain. 4. Tenant is prepared to institute additional means and methods to mitigate congestion on Pacific View or Marguerite Avenue should an issue arise when the Interim Queueing Plan is in effect. 5. Tenant's faculty and staff will continue to monitor students exiting and loading into cars. They will also direct the traffic flow between the off-site and on-site parking lots, as queue vehicles cross Pacific View Drive from the Big Canyon Reservoir parking lot to the school parking lot. The temporary construction and operation of the Premises will not change the way carpool operations are currently managed. Harbor Day School Page B-1 Interim Queueing Plan- Effective July 2020 through August 30, 2023 INTERIM QUEUING PLAN J�P kt _ MEMO: � '- ��_ � �r..xu waul :wnll nwXs ..• •gXyf •w•s f ` I I Ir. �_. -__ -_ � �t�+-�ruaa � 1 •Lxli !PI IJt1 Ha111f r11 1 ;�1 I • J I - xIT xi•alua :••e•n T•r•1•o .arc 1 I . r[•. r it ISX11 CIILIIL IIYII 01[I 1i11i[LJil1 I r r Harbor Day School Page B-2 Original Queueing Plan: Effective prior to this Amendment No. One and August 2023 though termination of the Lease Agreement. (Reproduced from Exhibit B of the Lease Agreement). n Luz'•{ �� e Harbor Day School Page B-3 LEASE AGREEMENT BETWEEN THE CITY OF NEWPORT BEACH AND HARBOR DAY SCHOOL This Lease Agreement ("Agreement") is made and entered into as of the �O day of 2014 ("Effective Date'), by and between the City of Newport Beach, a California municipal corporation and charter city ("City"), and Harbor Day School, a California non-profit corporation ("Tenant"). RECITALS A. City is the owner of the property, structures, and improvements commonly known as Big Canyon Reservoir located at 3300 Pacific View Drive, Newport Beach, California [Assessor's Parcel Number 458-331-01] ("Property"). The Property is approximately 4.68 acres and depicted on Exhibit "A." B. City owns the Property pursuant to an Agreement between the City and the Irvine Company dated April 3, 1957, as amended ("Deed"), C. Tenant is the owner of the property, structures, and improvements commonly known as Harbor Day School, located at 3443 Pacific View Drive, Newport Beach, California ("Harbor Day School"). Harbor Day School is operated as a private school with instruction for kindergarten through eighth grade. D. Tenant proposes to lease approximately 0.69 acres of the Property ("Premises") to construct a parking lot (including improvements reasonably related thereto, such as gates, bollards and driveways) for: (i) temporary parking for the dropping off and picking up students who attend Harbor Day School; (ii) parking for events associated with Harbor Day School activities; and (iii) incidental lighting related to such purposes so long as all lighting is screened to minimize glare to neighboring residents (collectively, "Parking Lot"). The Premises is depicted and legally described on Exhibit "B." E. Pursuant to City Council Policy F-7(B), the City sought the assistance of an appraiser to determine the fair market value rent for the Premises. Under City Council Policy F-7(E)(1), the City did not conduct an open bid process because the Deed language prevents the City from using the Premises for any other purpose or renting to any other party. AGREEMENT NOW, THEREFORE, in consideration of the mutual covenants herein contained, City and Tenant hereby agree as follows: 1. DEFINITIONS 1.1 General Definitions. As used in this Agreement, the following words and phrases shall have the following meanings: (a) Alteration — any improvements, additions, alterations, changes, or modifications of the Premises made by Tenant, its employees, agents, and contractors. (b) Authorized City Representative — the City Manager or his/her designee. (c) Commencement Date — the date the City delivers possession of the Premises to Tenant in the condition provided in Section 8.1. (d) Expiration — the lapse of the time specified as the Term of this Agreement, including any extension of the Term resulting from the exercise of an option to extend. (e) Law(s) — any judicial decision, statute, constitution, ordinance, resolution, regulation, rule, administrative order, or other requirement of any municipal, county, state, federal, or other government agency or authority having jurisdiction over the parties hereto or the Premises. (f) Maintenance or Maintain — repairs, replacement, maintenance, striping, repainting, and cleaning. (g) Person — one (1) or more natural persons, or legal entities, including, without limitation, partnerships, corporations, trusts, estates, associations, or a combination of natural persons and legal entities. (h) Provision — any term, covenant, condition, or clause in this Agreement that defines, establishes, or limits the performance required or permitted by either party. (i) Rent — includes rent, taxes, and other similar charges payable by Tenant under the provisions of this Agreement. (j) Successor — assignee, transferee, personal representative, heir, or other Person succeeding lawfully, and pursuant to the provisions of this Agreement, to the rights or obligations of either party. (k) Term — the Initial Term, as the same may be extended by the Option Term pursuant to the provisions of this Agreement. (1) Termination — the termination of this Agreement, for any reason, prior to Expiration. Harbor Day School Page 2 1.2 Other Definitions. — The following additional terms are defined in the following sections of this Agreement: (a) Deed Recitals, §B (b) Rent §0 (c) Hazardous Materials §16 (d) Indemnified Parties §10.1 (e) Option Term(s) §3.2 (f) Parking Lot Recitals, §D (g) Property Recitals, §A (h) Premises Recitals, §D (i) Initial Term §3.1 2. PREMISES City finds it to be consistent with public facility uses to grant Tenant a right to construct and operate the Parking Lot on the Premises. Therefore, subject to the terms and conditions set forth herein and the language in the Deed, City hereby leases to Tenant and Tenant agrees to lease the Premises in an "as is" condition as tendered from City. Tenant agrees that no representations with respect to the condition or improvements of the Premises have been made by City except as specifically set forth in this Agreement. 3. TERM 3.1 Term of Aqreement. The initial term of this Agreement shall be twenty-five (25) years from the Commencement Date ("Initial Term"), unless terminated sooner as provided in this Agreement, or extended as provided in Section 3.2. 3.2 Option to Extend. Provided Tenant is not then in default under this Agreement beyond applicable notice and cure periods, and upon approval of the City, Tenant may extend the term of this Agreement for one (1) additional successive term of twenty-five (25) years (the "Option Term") commencing on Expiration of the Initial Term, on the same terms and conditions as contained in this Agreement. Tenant must exercise its option by giving City written notice of its intention to extend the Term at least six (6) months prior to Expiration of the Initial Term. 3.3 Hold Over. Should Tenant, with City's consent, hold over and continue in possession of the Premises after Expiration of the Term or any Option Term, Tenant's continued occupancy of the Premises shall be considered a month -to -month tenancy Harbor Day School Page 3 subject to all the terms and conditions of this Agreement, except the provisions of Sections 3.1 and 3.2. 3.4 Redevelopment of Property. Should City redevelop the Property or Premises during the term of this Agreement, or any extensions thereof, which will materially interfere with Tenant's ability to occupy or use all or a portion of the Premises, City shall provide Tenant with at least three hundred sixty-five (365) calendar days prior written notice of termination of this Agreement, and in no event shall City commence redevelopment of the Premises until at least three hundred sixty-five (365) calendar days after Tenant's receipt of such written notice. City will make all best efforts to perform such redevelopment so that Tenant may continue to use the Premises as the Parking Lot; however, the City cannot guarantee that space will be available. 3.5 Change in Use. Should Harbor Day School permanently cease to be used as a school (excluding any temporary closure of one twenty (120) calendar days or less due to the change in the school name and/or school operator), this Agreement shall automatically terminate as of the date of such permanent cessation, regardless of the remaining length of the Term or Option Term. 3.6 School Remodel. Notwithstanding any other provision in this Agreement, upon thirty (30) calendar days prior written notice to City the Tenant may temporarily close the school no more than one-time during the Term of this Agreement, including any Option Term, for up to twenty-four (24) consecutive months to allow for remodeling/reconstruction activities at the school, without being in default or risk termination. Tenant shall comply with all obligations provided in this Agreement during the closure (e.g., payment of rent, maintenance, insurance provisions, etc.). 4. RENT 4.1 Rent. Tenant shall commence payment of rent upon the Commencement Date. The "Rent", which includes the use of the Premises, shall be established at Eleven Thousand Four Hundred Forty Dollars and 00/100 Cents ($11,440.00) per year. Rent shall be paid, in advance, in equal monthly installments on the first day of each month (e.g., Nine Hundred Fifty -Three Dollars and 33/100 Cents ($953.33) per month). Rent for any partial month shall be prorated in accordance with the actual number of days in that month and shall be due on the first day of that month that falls within the Term. Rent due hereunder will be subject to the rent adjustment provisions of Section 4.2 below. Tenant shall send said rent to the mailing address or send an electronic fund transfer via the web address provided in Section 4.4. Tenant shall be responsible for any delays in the mode of sending the rent payment to City. 4.2 Rent Adiustments. Rent may be adjusted on the 1st anniversary of the Commencement Date and then on the 1st of each Lease Year thereafter (the term "Lease Year" as used herein refers to successive twelve (12) month periods, commencing with the Commencement Date of this Agreement) to reflect increases in Harbor Day School Page 4 the cost of living as indicated by the Consumer Price Index described below, except as set forth in Section 4.3. Rent may be adjusted if the Consumer Price Index for the Los Angeles — Orange County - Riverside Area, All Urban Consumers, All Items ("Index"), as published by the United States Department of Labor, Bureau of Labor Statistics ("Bureau"), increases over the Base Period Index. The initial "Base Period Index" shall be the Index for the calendar month which is four (4) months prior to the month of the Commencement Date. The initial Base Period Index shall be compared with the Index for the same calendar month for each subsequent Lease Year ("Comparison Index"). The Comparison Index used for a given year's adjustment calculation will become the Base Period Index for purposes of the next annual Rent adjustment calculation. If the Comparison Index is higher than the Base Period Index, then Rent for the next Lease Year shall be increased by the amount of such percentage change. Should the Bureau discontinue the publication of the above Index, or publish same less frequently, or alter same in some other manner, then the parties shall adopt a substitute Index or substitute procedure which reasonably reflects and monitors consumer prices. 4.3 Notwithstanding the Index adjustments described above, if City, in its sole and absolute discretion, believes that notwithstanding such adjustments pursuant to Section 4.2, Rent, as adjusted, does not accurately reflect the fair market rental value of the Premises, City may elect to adjust Rent at the commencement of the twenty-sixth (26t") Lease Year to reflect the fair market rental value of the Premises pursuant to this Section (which adjustment shall be in lieu of the adjustment pursuant to Section 4.2), should Tenant elect to exercise the Option Term. City will provide notice to Tenant not earlier than twelve (l2) months nor later than nine (9) months prior to the expiration of the twenty-fifth (25t ) Lease Year of City's election to adjust Rent pursuant to this Section. Within thirty (30) days thereafter, City and Tenant will attempt in good faith to agree upon an adjustment in Rent based upon the fair market rental value of the Premises. If City and Tenant are unable to agree within such thirty (30) day period, the Premises will be appraised to determine its fair market rental value in accordance with this Section, which appraisal shall be completed at least six (6) months prior to Expiration of the Initial Term. City shall, within ten (10) days after the expiration of such thirty (30) day period, submit to Tenant three (3) California licensed appraisers experienced in commercial real estate lease appraisal, and experience in commercial real estate in the Newport Beach, California area; Tenant shall select one (1) appraiser from the three (3) submitted appraisers to appraise the Premises. City shall pay all costs associated with the appraiser and the appraisal. The fair market rental value determined by the appraiser will constitute rent for the twenty-sixth (26th) Lease Year and each successive year remaining on the Agreement; provided, however, that in no event will rent so determined be less than that otherwise payable through the annual Index adjustments described above. 4.4 Payment Location. All payments of rent shall be made in lawful money of the United States of America and shall be paid to City in person or by United States' mail, or overnight mail service, at the Cashier's Office located at 100 Civic Center Drive, P.O. Box 1768, Newport Beach, California, 92658, or to such other address as City may from time to time designate in writing to Tenant. If requested by City, Tenant shall make payments electronically (at www.newportbeachca.gov) or by wire transfer (at Tenant's Harbor Day School Page 5 cost). Tenant assumes all risk of loss and responsibility for late charges and delinquency rates if payments are not timely received by City regardless of the method of transmittal. 4.5 Late Payment. Tenant hereby acknowledges that the late payment of rent or other sums due hereunder will cause City to incur costs not contemplated by this Agreement, the exact amount of which is extremely difficult to ascertain. Such costs include, but are not limited to, processing and accounting charges. Accordingly, any payment of any sum to be paid by Tenant not paid within five (5) calendar days of its due date shall be subject to a ten percent (10%) late charge. City and Tenant agree that this late charge represents a reasonable estimate of such costs and expenses and is fair compensation to City for its loss suffered by such late payment by Tenant. 4.6 Interest on Unpaid Sums. Unpaid sums due to either City or Tenant under this Agreement shall bear interest at the rate of ten percent (10%) per annum on the unpaid balance, including but not limited to late payment penalties, from the date due until paid. 4.7 Additional Rent. Any provision in this Agreement that requires Tenant to pay additional amounts classified as "additional rent" shall be paid within thirty (30) calendar days of City's written demand therefor (unless a different time for payment is expressly provided in this Agreement). Additional rent does not reduce or offset Tenant's obligations to pay rent. 5. BUSINESS PURPOSES AND USE OF PREMISES 5.1 Business Purposes. The Premises are to be used by Tenant for the construction, maintenance and operation of the Parking Lot and for no other use. The Tenant shall be responsible for obtaining all required permits and licenses for the construction, maintenance and operation of the Parking Lot and complying with all applicable conditions imposed by such permits and licenses. 5.2 Operation of Premises. Tenant shall operate and manage the Premises in a manner comparable to other high quality parking lots providing similar uses and services. Tenant may operate the Parking Lot Monday through Friday, during the period that begins one (1) hour prior to regular school hours (as adjusted for partial or extended days) and ends one (1) hour after regular school hours (as adjusted for partial or extended days), but no earlier than six o'clock in the morning (6:00 a.m.) and no later than six o'clock (6:00 p.m.) in the evening. Additionally, Tenant may operate the Parking Lot no more than ten (10) times per year for special events which fall outside of normal school hours. No ovemight parking is allowed on the Premises. Tenant must close and secure the entrance and exit to the Premises each night, no later than eight o'clock (8:00 p.m.) in the evening, and no later than eleven o'clock (11:00 p.m.) in the evening for special events which fall outside of normal school hours. Tenant shall comply with all conditions of approval placed upon the Parking Lot. Harbor Day School Page 6 5.3 Shared Driveway. City and Tenant will share a driveway entrance to the Property and Premises. Tenant shall ensure the driveway is kept free and clear of all vehicles and obstructions (other than any gates or bollards installed pursuant to this Agreement) to allow City access to and from the Property using the driveway; provided however that City shall use commercially reasonable efforts to not interfere with Tenant's operation and/or use of the Premises. City shall provide Tenant with at least five (5) business days prior notice (except no prior notice shall be required in the event of an emergency) of any extended use of the driveway that may materially impact Tenant's operation and/or use of the Premises, such as closures or other blockages, but does not include normal daily access to and from the Property. 5.4 Prohibited Uses. Tenant shall not use the Premises for any purpose other than the Parking Lot. The Parking Lot is for the exclusive use of the Tenant's employees, contractors, agents, volunteers, guests and invitees. Use of the Parking Lot for a temporary construction yard or any construction staging is strictly prohibited, except in connection with the construction of any tenant improvements in accordance with Section 8. Tenant shall not hold the lot open for use by the general public, nor collect any rate or charge for use of the Premises. Tenant shall not use or permit the use of the Premises in any manner that: (a) creates a nuisance; or (b) violates any Law. 5.5 Signage. Tenant may, at its own expense, place one (1) permanently installed identifying sign, as well as permanently installed directional signs in or upon the Premises subject to the prior written consent of the City as to the size, type, number, design and method of installation (which consent shall not be unreasonably withheld, conditioned or delayed) and in compliance with the City's sign code regulations and the Deed restrictions applicable to the Premises. Additionally, Tenant may, at its own expense, place temporary signs in or upon the Premises without the consent of the City, but otherwise in compliance with the City's sign code regulations and the Deed restrictions applicable to the Property and Premises, providing that Tenant shall remove all temporary signs at the end of each day, when the Parking Lot is closed. All signage placed by Tenant on, in or about the Premises shall remain the property of Tenant and shall be removed by Tenant upon termination or expiration of this Agreement at Tenant's expense, and any damage caused by removal shall be repaired at Tenant's expense. 5.6 Personnel. Tenant shall be responsible for hiring the necessary personnel to conduct the daily operation of Parking Lot. Tenant shall comply with all applicable federal, state, and local Laws related to minimum wage, Social Security, nondiscrimination, ADA, unemployment compensation and workers' compensation. 5.7 Independent Contractor. It is understood that Tenant is an independent contractor and not an agent or employee of City. The manner and means of operating the Parking Lot are under the control of Tenant, except to the extent they are limited by statute, rule or regulation and/or the expressed terms of this Agreement. No civil service status or other right of employment shall accrue to Tenant's employees. Nothing in this Agreement shall be deemed to constitute approval for Tenant or any of Harbor Day School Page 7 Tenant's employees or agents, to be the agents or employees of City. City acknowledges that is has no interest in the business of Tenant. 6. TAXES, LICENSES AND OTHER OBLIGATIONS 6.1 Payment of Taxes. Tenant shall pay directly to the appropriate taxing authorities all taxes applicable to this Agreement, fixtures and Tenant's personal property on the Premises, that are levied or assessed against Tenant during the Term. Taxes shall be paid before delinquency and before any fine, interest or penalty is due or imposed by operation of law. Tenant shall, upon request, promptly furnish to the City reasonably satisfactory evidence of payment. City hereby gives notice to Tenant, pursuant to Revenue and Tax Code Section 107.6, that this Agreement may create a possessory interest that is the subject of property taxes levied on such interest, the payment of which taxes shall be the sole obligation of Tenant. Tenant shall pay, before delinquency all taxes, assessments, license fees and other charges ("Taxes") that are levied or assessed against Tenant's interest in the Premises or any personal property installed on the Premises. 6.2 Payment of Obliqations. Tenant shall promptly pay, when due, any and all bills, debts, liabilities and obligations incurred by Tenant in connection with Tenant's occupation and use of the Premises. 6.3 Challenge to Taxes. Tenant shall have the right in good faith, at its sole cost and expense, to contest the amount or legality of any Taxes on or attributable to this Agreement, the Premises, Tenant's personal property, or Tenant's occupation and use of the Premises, including the right to apply for reduction. If Tenant seeks a reduction or contests such taxes, Tenant's failure to pay the Taxes shall not constitute a default under this Agreement as long as Tenant complies with the provisions of this Section. City shall not be required to join in any proceeding or contest brought by Tenant unless the provisions of any Law require that the proceeding or contest be brought by or in the name of City. In that case, City shall join in the proceeding or contest or permit it to be brought in City's name as long as City is not required to bear any cost. If requested by Tenant, City shall execute any instrument or document necessary or advisable in connection with the proceeding or contest. Tenant, on final determination of the proceeding or contest, shall immediately pay or discharge any decision or judgment rendered, together with all related costs, charges, interest and penalties. Tenant shall indemnify, defend and hold harmless the City, its council members, boards, commissions, committees, officers, employees, Authorized City Representatives, agents and volunteers ("Indemnified Parties") from and against any liability, claim, demand, penalty, cost or expense arising out of or in connection with any contest by Tenant pursuant to this Section. 6.4 No Rent Offset. Any payments under this Section 6 shall not reduce or offset rent payments. City has no liability for such payments. Harbor Day School Page 8 7. UTILITIES. Tenant shall be responsible for payment of all utilities furnished to or used on the Premises exclusively by Tenant, or Tenant's pro rata share of all utilities furnished to or used by Tenant on the Property. 8. ALTERATIONS TO THE PREMISES. 8.1 Tenant Improvements. City shall deliver possession of the Premises to Tenant free and clear of any prior tenants or occupants (including, without limitation, their equipment and personal property), generally free of any rubbish and debris, free of any construction materials and equipment, and otherwise in its "as -is" condition. Subject to compliance with all applicable laws, Tenant may construct improvements consistent with those shown on Exhibit "B," as may be revised or modified in order to obtain entitlements and/or building permits from the applicable local and state agencies. Subject to compliance with all applicable laws, all improvements by the Tenant must be submitted for review of improvement plans and permitting, and construction shall be subject to the prior written approval of the City Manager or his/her designee, which approval shall not be unreasonably withheld, conditioned or delayed so long as the improvements are consistent with those shown on Exhibit "B," as may be revised or modified as set forth above. Improvements shall be performed between 7:00 a.m. and 6:00 p.m. on non -holiday weekdays. Any contractors hired by Tenant shall be fully licensed and bonded. Tenant's contractors and any subcontractors shall obtain insurance in an amount and form to be approved by City's Risk Manager, including workers compensation insurance as required by law, general liability, automobile liability and builder's risk insurance covering improvements to be constructed, all pursuant to standard industry custom and practice. City shall be named as an additional insured on the contractor's and any subcontractor's policies. 8.2 Tenant's Architects and Contractors. All improvements and landscaping on the Premises and any subsequent repairs, alterations, additions or improvements to any of the foregoing shall be designed, selected or constructed, as applicable, by qualified and licensed (where required) architectural, design, engineering and construction firms selected by Tenant. 8.3 Costs of Construction. Tenant shall bear all costs and expenses associated with the design, construction and maintenance of the Parking Lot (except for any costs and expenses incurred as a result of any negligence or willful misconduct by City or any of its officers, agents, contractors, or employees), which costs and expenses include without limitation: (i) relocation of existing City facilities (e.g., driveways, points of access, etc.), utility relocation, hook-up, and connection fees and all distribution facilities, conduits, pipelines and cables required in connection with the development of the Parking Lot; (ii) all design, engineering, financing and construction costs; and (Hi) all necessary studies and appraisals, use permits or variances, and all grading, building and like permits required to construct and operate the Parking Lot, including any fees assessed on the Premises by any governmental, or quasi -governmental agency or Harbor Day School Page 9 authority in connection with any regional transportation or other public improvements and school district taxes, development fees and assessments. 8.4 Permits. Unless restricted by law, Tenant shall obtain, and be responsible for the costs for all building permits and other required permits necessary for the Parking Lot. If applicable, Tenant shall be responsible, at its sole cost and expense, for compliance with the California Environmental Quality Act ("CEQA") in connection with Tenant's operation and use of the Premises as the Parking Lot. 8.5 Quality of Work Performed. All construction, maintenance and other work shall be performed in a good and workmanlike manner, shall comply with the plans and specifications submitted to City, and shall comply with all applicable governmental permit requirements and Laws in force at the time permits are issued. 8.6 Payment of Costs. Tenant shall pay all costs related to the construction of the Parking Lot and any alterations by Tenant or its agents, except for any costs incurred as a result of any negligence or willful misconduct by City or any of its officers, agents, contractors, or employees. 8.7 Liens Prohibited: Tenant shall not permit to be imposed, recorded or enforced against the Premises, any portion thereof or any structure or Improvement thereon, any mechanics, materialmen's, contractors or other liens arising from, or any claims for damages growing out of, any work or repair, construction or alteration of improvements on the Premises. 8.7.1 Release/Removal of Liens: In the event any lien or stop notice is imposed or recorded on the Premises, or an improvement permanently affixed to the Premises, during the Term, Tenant shall pay or cause to be paid all such liens, claims or demands before any action is brought to enforce the same against the Premises or the improvement. Notwithstanding the foregoing, if Tenant legitimately contests the validity of such lien, claim or demand, then Tenant shall, at its expense, defend against such lien, claim or demand provided that it provide City the indemnity in this Agreement and provided Tenant shall pay and satisfy any adverse judgment that may be rendered before any enforcement against City or the Premises. 8.8 Disposition of Alterations at Expiration or Agreement Termination. Any alterations made to the Premises shall remain on, and be surrendered with, the Premises on expiration or termination of this Agreement (excluding Tenant's moveable personal property). Prior to expiration or within fifteen (15) calendar days after termination of this Agreement, Tenant may remove any moveable machinery, equipment, and other personal property installed by Tenant, provided that Tenant repairs any damage to the Premises caused by removal and restore the Premises to good condition. Harbor Day School Page 10 9. MAINTENANCE OF PREMISES 9.1 Maintenance and Repair by Tenant and City. Tenant agrees that it will keep the Premises in good condition, reasonable wear and tear and damage by casualty and condemnation excepted. City may perform maintenance or repairs in the event Tenant fails to commence any maintenance or repairs required to keep the Premises in the condition described in this Agreement within the time provided by City in the written notice requesting such maintenance or repair (which shall not be less than thirty (30) calendar days after the date of such notice). The cost of any maintenance or repairs performed by the City pursuant to this Section shall be payable as additional rent. City may perform required cleaning and charge the costs to Tenant if the Tenant fails to perform said cleaning within the time provided by City in the written notice requesting the cleaning (which shall not be less than ten (10) calendar days after the date of such notice) and if City performs such cleaning on Tenant's behalf more than two (2) times during the Term, City may take over such obligation by providing written notice thereof to Tenant and thereafter City shall continue to maintain the Premises as required by this Agreement. 9.2 Entry by City. City and its authorized City representative(s) may, upon one (1) business day prior notice to Tenant (except no prior notice shall be required in the event of an emergency), enter upon and inspect the Premises during normal business hours for any lawful purpose, provided that City shall use commercially reasonable efforts to not interfere with Tenant's operation and/or use of the Premises in performing any such entry and/or inspection. In case of emergency, City or its authorized City representative(s) may enter the Premises by whatever force reasonably necessary if Tenant is not present to open and permit an entry. Any entry to the Premises by City under this Agreement shall not be construed as a forcible or unlawful entry into, or a detainer of, the Premises, or an eviction of Tenant from the Premises or any portion thereof. Any damage caused to the Premises pursuant to this Section by the City shall be repaired or replaced by the City at the City's sole expense. 10. INDEMNITY AND EXCULPATION; INSURANCE 10.1 Hold -Harmless Clause. Tenant agrees to indemnify, defend and hold harmless the City, its City Council, Boards, Commissions, Committees, officers, agents, volunteers, and employees (collectively, the "Indemnified Parties") from and against any and all claims (including, without limitation, claims for bodily injury, death or damage to property), demands, obligations, damages, actions, causes of action, suits, losses, judgments, fines, penalties, liabilities, costs and expenses (including, without limitation, attorney's fees, disbursements and court costs) of every kind and nature whatsoever (individually, a "Claim;" collectively, "Claims"), which may arise from or in any manner relate (directly or indirectly) to Tenant's, Tenant's employees, contractor, subcontractor, agents, guests, invitees, occupation or use of the Premises, specifically including, without limitation, any claim, liability, loss or damage arising by reason of: Harbor Day School Page (a) The death or injury of any Person or damage to personal property caused or allegedly caused by the condition of the Premises or an act or omission of Tenant or an agent, contractor, subcontractor, supplier, employee, or servant Tenant; (b) Any work performed on the Premises or materials furnished to the Premises at the request of Tenant or any agent or employee of Tenant, with the exception of maintenance performed by City; and/or (c) Tenant's failure to perform any provision of this Agreement or to comply with any requirement of Law or any requirement imposed on the Premises by any duly authorized governmental agency or political subdivision. Tenant's obligations pursuant to this Subsection shall not extend to any Claim proximately caused by the negligence, willful misconduct, or unlawful or fraudulent conduct on the part of the Indemnified Parties. This indemnity shall apply to all claims and liability regardless of whether any insurance policies are applicable. 10.2 Exculpation of City. Except as otherwise expressly provided in this Agreement, City shall not be liable to Tenant for any damage to Tenant or Tenant's property from any cause other than the sole negligence, intentional or willful acts of the Indemnified Parties. Except as otherwise expressly provided in this Agreement, Tenant waives all claims against the Indemnified Parties arising for any reason other than the sole negligence, intentional or willful acts of the Indemnified Parties. City shall not be liable to Tenant for any damage to the Premises, Tenant's property, Tenant's goodwill, or Tenant's business income, caused in whole or in part by acts of nature. 10.3 Insurance. Tenant shall maintain insurance in the types and amounts specified in Exhibit "C." 11. DAMAGE OR DESTRUCTION OF PROPERTY/PREMISES 11.1 Destruction of Premises. If the Premises are totally or partially destroyed, rendering the Premises or any portion thereof totally or partially inaccessible or unusable, Tenant shall restore the Premises to substantially the same condition as immediately prior to such destruction (including all trade fixtures, personal property, improvements and Alterations as are installed by Tenant, which shall be replaced by Tenant at its expense). Alternatively, Tenant may elect to terminate this Agreement by giving notice of such election to City within sixty (60) calendar days after the date of the occurrence of any casualty if the cost of the restoration exceeds the amount of any available insurance proceeds, if the damage has been caused by an uninsured casualty or event, or if Tenant reasonably estimates that repairs of the Premises will take more than six (6) months. Upon such termination, insurance proceeds applicable to reconstruction of the Property (excluding Tenant's personal property therein) shall be paid to City and Tenant shall have no further liability or obligations under this Agreement. Harbor Day School Page 12 11.2 Destruction of Property. In the event that all or a portion of the Property is damaged, and the Premises or a material portion becomes inaccessible or commercially unusable, and the damage or destruction cannot reasonably be repaired within twelve (12) months after the date of the casualty, City shall have the right to either: (a) Terminate this Agreement by giving to Tenant written notice (which notice shall be given, if at all, within thirty (30) calendar days following the date of the casualty), in which case this Agreement shall be terminated thirty (30) calendar days following the date of the casualty; or (b) Give Tenant written notice of City's intention to repair such damage as soon as reasonably possible at City's expense, in which event this Agreement shall continue in full force and effect; however, rent shall be abated in accordance with the procedures set forth in Section 12. Tenant may terminate this Agreement by giving City written notice at any time prior to the commencement of repairs if City agrees to repair the Property pursuant to this Section and fails to commence repairs within one hundred twenty (120) calendar days after giving Tenant written notice of its intention to repair. In such event, this Agreement shall terminate as of the date of notice from Tenant to City, and City shall have no liability under this Agreement. 11.3 Condemnation. If the use or possession of the entire Premises or any material portion thereof shall be taken in condemnation proceedings, then this Agreement shall automatically terminate when a right to occupancy or possession is acquired by the condemning authority. If only a non -material portion of the Premises shall be taken in condemnation proceedings, then this Agreement shall continue in full force and effect; however, rent shall be proportionally abated in accordance with the procedures set forth in Section 12. 12. ABATEMENT OF RENT General Rule. In the event of damage or destruction of the Premises (or any portion thereof), or damage to the Property that impacts the Premises (or any portion thereof), or condemnation of the Premises (or any portion thereof), and this Agreement is not terminated, Tenant may continue to utilize the Premises for the operation of the Parking Lot to the extent it may be practicable and commercially reasonable, as determined in Tenant's reasonable judgment. Rent shall abate only in proportion to the area of the Premises that is rendered unusable (as determined in Tenant's reasonable judgment). The abatement of rent shall commence on the date that use of the Premises is impacted and continue until the completion of those repairs necessary to restore full use of the Premises, if any, and Tenant's re -opening of the Premises. Tenant's obligation to pay Taxes pursuant to this Agreement shall not be abated or reduced. Rent shall not abate if the damage or destruction to the Premises is the result of the negligence or willful conduct of Tenant or its employees, officers or agents. Harbor Day School Page 13 13. PROHIBITION AGAINST VOLUNTARY ASSIGNMENT, SUBLETTING AND ENCUMBERING Prohibition of Assiqnment. City and Tenant acknowledge that City is entering into this Agreement in reliance upon the experience and abilities of Tenant and pursuant to the restrictions in the Deed. Consequently, Tenant shall not assign, sublease or encumber its interest in this Agreement or in the Premises, or assign substantially all or any part of the Premises, or allow any other person or entity to occupy or use all or any part of the Premises other than for the uses permitted under this Agreement and with the City's prior written consent. Any assignment, sublease or transfer made without the City's written consent is null and void. 14. DEFAULT; REMEDIES 14.1 Default by Tenant. The occurrence of any one (1) or more of the following events shall constitute a default and material breach of this Agreement by Tenant: (a) The vacating or abandonment of the Premises by Tenant for a period of one hundred twenty (120) successive calendar days, without the prior permission of the City Manager or his/her designee, excluding closures during periods of casualty, condemnation or permitted closures set forth in this Agreement or during periods when the school is temporarily closed for routine breaks (e.g., Christmas break, spring break, summer break, etc.); (b) The failure by Tenant to make any payment of rent or any other payment required by this Agreement, as and when due, when such failure shall continue for a period of ten (10) calendar days after written notice of default from City to Tenant; (c) Except as specified in Subsection 14.1(b), the failure of Tenant to observe or perform any of the material covenants, conditions or provisions of this Agreement to be observed or performed by Tenant where such failure shall continue for a period of thirty (30) calendar days after written notice thereof from City to Tenant; provided, however, that if the nature of Tenant's default is such that more than thirty (30) calendar days are reasonably required for its cure, then Tenant shall not be deemed to be in default if Tenant commences such cure within said thirty (30) calendar day period and thereafter diligently prosecutes such cure to completion; (d) The making by Tenant of any general arrangement or assignment for the benefit of creditors; (e) Tenant becomes a "debtor" as defined in 11 U.S.C. Section 101 or any successor statute thereto (unless, in the case of a petition filed against Tenant, the same is dismissed within sixty (60) calendar days); (f) The appointment of a trustee or receiver to take possession of substantially all of Tenant's assets located at the Premises or of Tenant's interest in this Harbor Day School Page 14 Agreement, where such appointment is not discharged within sixty (60) calendar days; and (g) The attachment, execution or the judicial seizure of substantially all of Tenant's assets located at the Premises or of Tenant's interest in this Agreement, where such seizure is not discharged within sixty (60) calendar days. 14.2 Remedies for Default by Tenant. (a) Cumulative Nature of Remedies. If any default by Tenant shall continue without cure beyond the time permitted under this Agreement, City shall have the remedies described in this Section in addition to all other rights and remedies provided by law or equity, to which City may resort cumulatively or in the alternative. (1) Re-entry without Termination. City may re-enter the Premises, and, without terminating this Agreement, re -let all or a portion of the Premises. City may execute any agreements made under this provision in City's name and shall be entitled to all rents from the use, operation, or occupancy of the Premises. Tenant shall nevertheless pay to City on the dates specified in this Agreement the equivalent of all sums required of Tenant under this Agreement, plus City's reasonable expenses in conjunction with re -letting, less the proceeds of any re -letting or atonement. No act by or on behalf of City under this provision shall constitute a termination of this Agreement unless City gives Tenant specific written notice of termination. (2) City may terminate this Agreement by giving Tenant written notice of termination with a specified termination date. In the event City terminates this Agreement, City may recover possession of the Premises (which Tenant shall surrender and vacate upon demand in the condition required under this Agreement) and remove all persons and property. City shall be entitled to recover the following as damages; (A) The value of any unpaid rent or other charges that are unpaid at the time of termination (which value shall be computed by allowing interest at the rate of ten percent (10%) per annum). All Rent and other charges shall begin to accrue late charges from the date due or the date they would have accrued; (B) The value of the rent and other charges that would have accrued after termination less the amount of rent and charges the City received or could have received through the exercise of reasonable diligence as of the date of the termination (which value shall be computed by discounting such amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of termination plus one percent (1 %)); (C) Any other amount necessary to reasonably compensate City for the detriment proximately caused by Tenant's failure to perform its obligations under this Agreement; and (D) At City's election, such other amounts in addition to or in lieu of the foregoing as may be permitted from time -to -time by applicable California Harbor Day School Page 15 law. City shall be entitled to an award of the reasonable costs and expenses incurred by City in maintaining or preserving the Premises after default (after the expiration of all notice and cure periods), preparing the Premises for re -letting, or repairing any damage caused by an act or omission of Tenant. (b) City's Riqht to Cure Tenant's Default. Upon continuance of any material default beyond applicable notice and cure periods, City may, but is not obligated to, cure the default at Tenant's cost. If City pays any money or performs any act required of, but not paid or performed by, Tenant after notice, the payment and/or the reasonable cost of performance shall be due as additional Rent not later than ten (10) calendar days after service of a written demand accompanied by supporting documentation upon Tenant. No such payment or act shall constitute a waiver of default or of any remedy for default or render City liable for any loss or damage resulting from performance. 15. WASTE OR NUISANCE Tenant shall not commit or permit the commission of any waste on the Premises. Tenant shall not maintain, commit, or permit any nuisance as defined in Section 3479 of the California Civil Code on the Premises. Tenant shall not use or permit the use of the Premises for any unlawful purpose. 16. NO CONFLICTS OF USE, HAZARDOUS MATERIALS. From the Effective Date and throughout the Term, Tenant shall not use, occupy or permit any portion of the Premises to be used or occupied in violation of any Law. City represents and warrants that, to the best of City's knowledge: (i) Tenant's use of the Premises does not conflict with applicable Laws, and City knows of no reason why Tenant would be unable to obtain all required permits, licenses and approvals from the appropriate governmental authorities; and (ii) the Premises is not in violation of any applicable Law, rules or regulations and Tenant's contemplated uses will not cause any such violation. Provided Tenant did not bring, cause or allow such Hazardous Materials on the Premises, Tenant shall have the right (but not the obligation) to terminate this Agreement, upon thirty (30) calendar days advance written notice to City in the event that Hazardous Materials are detected at the Premises and the presence or the remediation (without any obligation of Tenant to perform remediation) materially affects Tenant's ability to operate the Parking Lot at the Premises. "Hazardous Materials" shall mean any oil, flammable explosives, asbestos, urea formaldehyde, radioactive materials or waste, or other hazardous, toxic, contaminated or polluting materials, substances or wastes, including, without limitation, any "hazardous substances," "hazardous wastes," "hazardous materials" or "toxic substances" under applicable federal, state and local laws, ordinances and regulations. 17. CITY'S DEFAULTS/TENANT'S REMEDIES. City shall be in default if it fails to perform, or commence performance if the obligation requires more than ten (10) calendar days to complete, any material Harbor Day School Page 16 obligation within ten (10) calendar days after receipt of written notice by Tenant to City specifying the nature of such default. City shall also be in default if it commences performance within ten (10) calendar days but fails to diligently complete performance. In the event of City's default, Tenant may: (a) Upon thirty (30) calendar days written notice to City, cure any such default, and City shall reimburse Tenant the amount of all reasonable costs and expenses incurred by Tenant in curing the default; or (b) Terminate this Agreement if City's default materially interferes with Tenant's use of the Premises for its intended purpose and City fails to cure such default within thirty (30) calendar days after a second written demand by Tenant. 18. EVENT OF BANKRUPTCY 18.1 if this Agreement is assigned to any person or entity pursuant to the provisions of the Bankruptcy Code, 11 U.S.C. Sections 101 et seq., or any similar or successor statute ("Bankruptcy Code'), any and all monies or other consideration payable or otherwise to be delivered in connection with such assignment shall be paid or delivered to City, shall be and remain the exclusive property of City and shall not constitute property of Tenant or of the estate of Tenant within the meaning of the Bankruptcy Code. Any and all monies or other consideration constituting City's property under this Section not paid or delivered to City shall be held in trust for the benefit of City and be promptly paid or delivered to City. 18.2 Any person or entity to which this Agreement is assigned pursuant to the provisions of the Bankruptcy Code shall be deemed without further act or deed to have assumed all of the obligations arising under this Agreement on and after the date of such assignment, including the obligation to operate the Parking Lot. 19. NOTICES Any notice, demand, request, consent, approval or communication that either party desires or is required to give shall be in writing and shall be deemed given three (3) calendar days after deposit into the United States registered mail, postage prepaid, by registered or certified mail, return receipt requested, or one (1) business day after deposit with a reputable overnight courier for overnight delivery. Unless notice of a different address has been given in accordance with this Section, all notices shall be addressed as follows: If to City, to: City of Newport Beach Attn: Real Property Administrator 100 Civic Center Drive P.O. Box 1768 Newport Beach, CA 92658 Harbor Day School Page 17 If to Tenant, to: 20. SURRENDER OF PREMISES Harbor Day School Attn: Headmaster 3443 Pacific View Drive Newport Beach, CA 92660 At the expiration or earlier termination of this Agreement, Tenant shall surrender to City the possession of the Premises. Tenant shall leave the surrendered Premises in good and broom -clean condition, reasonable wear and tear and damage by casualty and condemnation excepted. All property that Tenant is not required to surrender, but that Tenant does abandon for more than fifteen (15) calendar days after the expiration or termination of this Agreement, shall, at City's election, become City's property at expiration or termination. City shall owe no compensation to Tenant for any personal property, equipment or fixtures left at the Premises by Tenant more than fifteen (15) calendar days after the expiration or termination of this Agreement. 21. COMPLIANCE WITH ALL LAWS Tenant shall at its own cost and expense comply with all statutes, ordinances, regulations and requirements of all governmental entities, including federal, state, county or municipal, whether now in force or hereinafter enacted. In addition, all work prepared by Tenant shall conform to applicable City, county, state and federal laws, rules, regulations and permit requirements and be subject to approval of the City Manager or his/her designee. 22. WAIVERS The waiver by either party of any breach or violation of any term, covenant or condition of this Agreement, or of any ordinance, law or regulation, shall not be deemed to be a waiver of any other term, covenant, condition, ordinance, law or regulation, or of any subsequent breach or violation of the same or other term, covenant, condition, ordinance, law or regulation. The subsequent acceptance by either party of any fee, performance, or other consideration which may become due or owing under this Agreement, shall not be deemed to be a waiver of any preceding breach or violation by the other party of any term, condition, covenant of this Agreement or any applicable law, ordinance or regulation. 23. SEVERABILITY If any term or portion of this Agreement is held to be invalid, illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining provisions of this Agreement shall continue in full force and effect. Harbor Day School Page 18 24. CONFLICT In case of conflict, the more specific provision of this Agreement shall control. 25. APPLICABLE LAW This Agreement shall be construed in accordance with the laws of the State of California in effect at the time of the execution of this Agreement. Any action brought relating to this Agreement shall be adjudicated in a court of competent jurisdiction in the County of Orange. 26. ENTIRE AGREEMENT; AMENDMENTS 26.1 The terms and conditions of this Agreement, all exhibits attached, and all documents expressly incorporated by reference, represent the entire agreement of the parties with respect to the subject matter of this Agreement. 26.2 This Agreement shall supersede any and ali prior agreements, oral or written, regarding the subject matter between Tenant and City. 26.3 No other agreement, promise or statement, written or oral, relating to the subject matter of this Agreement, shall be valid or binding, except by way of a written amendment to this Agreement. 26.4 The terms and conditions of this Agreement shail not be altered or modified except by a written amendment to this Agreement signed by Tenant and the City Manager or his/her designee. 26.5 If any conflicts arise between the terms and conditions of this Agreement, and the terms and conditions of the attached exhibits or the documents expressly incorporated by reference, the terms and conditions of this Agreement shall control. 26.6 Any obligation of the parties relating to monies owed, as well as those provisions relating to limitations on liability and actions, shall survive termination or expiration of this Agreement. 26.7 The Recitals provided in this Agreement are true and correct and are incorporated into the substantive part of this Agreement. 26.8 Each party has relied on its own inspection of the Premises and examination of this Agreement, the counsel of its own advisors, and the warranties, representations, and covenants in this Agreement. The failure or refusal of either party to inspect the Premises, to read this Agreement or other documents, or to obtain legal or other advice relevant to this transaction constitutes a waiver of any objection, contention, or claim that might have been based on such reading, inspection, or advice. Harbor Day School Page 19 27. TIME IS OF THE ESSENCE Time is of the essence for this Agreement. 28. SUCCESSORS; BINDING EFFECT Subject to the provisions of this Agreement on assignment and subletting, each and all of the covenants and conditions of this Agreement shall be binding on and shall inure to the benefit of the heirs, successors, executors, administrators, assigns, and personal representatives of the respective parties. 29. INTERPRETATION The terms of this Agreement shall be construed in accordance with the meaning of the language used and shall not be construed for or against either party by reason of the authorship of this Agreement or any other rule of construction which might otherwise apply. 30. TABLE OF CONTENTS; HEADINGS The table of contents of this Agreement and the captions of the various sections of this Agreement are for convenience and ease of reference only and do not define, limit, augment, or describe the scope, content, or intent of this Agreement. 31. GENDER; NUMBER The neuter gender includes the feminine and masculine, the masculine includes the feminine and neuter, and the feminine includes the neuter, and each includes corporation, partnership, or other legal entity whenever the context requires. The singular number includes the plural whenever the context so requires. 32. EXHIBITS All exhibits to which reference is made in this Agreement are incorporated by reference. Any reference to "this Agreement" includes matters incorporated by reference. 33. CITY BUSINESS LICENSE Tenant shall obtain and maintain during the duration of this Agreement, a City business license as required by the Newport Beach Municipal Code. 34. NO ATTORNEYS' FEES The prevailing party in any action brought to enforce the terms and conditions of this Agreement, or arising out of the performance of this Agreement, shall not be entitled to recover its attorneys' fees. Harbor Day School Page 20 35. NONDISCRIMINATION Tenant, for itself and its successors, agrees that in the performance under this Agreement, Tenant shall not discriminate against any person because of the marital status or ancestry of that person or any characteristic listed or defined in Section 11135 of the Government Code. 36. MEMORANDUM OF LEASE AGREEMENT A Memorandum of Lease Agreement, in a form and content similar to that contained in Exhibit "D" shall be recorded by the parties promptly upon execution of this Agreement. Upon execution by both parties, the Memorandum of Lease Agreement shall be recorded against the Premises in the office of the Orange County Clerk - Recorder, as required by Government Code Section 37393. 37. NO THIRD PARTY BENEFICIARIES City (both as a lessor and as the City of Newport Beach) and Tenant do not intend, by any provision of this Agreement, to create in any third party, any benefit or right owed by one party, under the terms and conditions of this Agreement, to the other party. 38. CALIFORNIA LABOR LAWS It shall be the obligation of Tenant to comply with all laws, including, but not limited to, State of California labor laws, rules and regulations and the parties agree that the City shall not be liable for any violation by Tenant (or Tenant's agent, sublesse or any party affiliated with Tenant) thereof. 39. NO DAMAGES Tenant acknowledges that City would not enter into this Agreement if it were to be liable for damages (including, but not limited to, actual damages, economic damages, consequential damages, lost profits, loss of rents or other revenues, loss of business opportunity, loss of goodwill or loss of use) under, or relating to, this Agreement or any of the matters referred to in this Agreement, including, without limitation, any and all plans, permits, licenses or regulatory approvals, and CEQA documents related to the Premises. Accordingly, Tenant covenants and agrees on behalf of itself and its successors and assigns, not to sue City (either in its capacity as lessor in this Agreement or in its capacity as the City of Newport Beach) for damages (including, but not limited to, actual damages, economic damages, consequential damages, lost profits, loss of rents or other revenues, loss of business opportunity, loss of goodwill or loss of use) or monetary relief for any breach of this Agreement by City or for any dispute, controversy, or issue between City and Tenant arising out of or connected with this Agreement or any of the matters referred to in this Agreement, including, without limitation, any and all plans, permits, licenses or regulatory approvals, CEQA documents, or any future amendments or enactments thereto, the parties Harbor Day School Page 21 agreeing that declaratory relief, injunctive relief, mandate and specific performance shall be Tenant's sole and exclusive judicial remedies. Notwithstanding the foregoing, nothing in this Section 39 shall limit Tenant's remedies as expressly set forth in this Agreement. 40. GOVERNMENT CLAIMS ACT Tenant and City agree that in addition to any claims filing or notice requirements in this Agreement, Tenant shall file any claim that Tenant may have against City in strict conformance with the Government Claims Act (Government Code sections 900 et seq.), or any successor statute. [Signature page followsj Harbor Day School Page 22 EXHIBIT "A" Property Depiction Harbor Day School Page A-1 EXHIBIT "B" Premises' Depiction & Description Harbor Day School Page B-1 A� y ,.emt T PExN QLEANG PLAN HARJRCF JAY 4CHOUL 3443 +'AClfl '4EW =IPIvE IHWEE 41JMf rflJrRM �BkF Harbor Day School Page B-2 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the dates written below. APPROVED AS TO FORM: THE CITY ATTORNEY'S OFFICE Date: By: Aaron C.`Pt City Attorney ATTEST: �.1 Date: By: Leilani I. Brown City Clerk (for) CITY the City of Newport Beach, a Califomia municipal corporation Date: By: David KiT'' City Manager TENANT Harbor Day School, a California non-profit corporation Date: ' 2 3' By: Geoffrey on Der Ahe President, Board of Trustees Date: Dr. Daniel R. Greenwood Head of School [End of Signatures] Harbor Day School Page 23 Exhibit "C" Insurance Without limiting Tenant's indemnification of City, Tenant will obtain, provide and maintain at its own expense during the Term of this Agreement, a policy or policies of insurance of the type, amounts and form acceptable to City. The policy or policies shall provide, at a minimum, those items described below. 1. Provision of Insurance. Without limiting Tenant's indemnification of City, and prior to commencement of work on Premises by Tenant or Tenant's agents, representatives, consultants, contractors and/or subcontractors, Tenant shall obtain, provide and maintain at its own expense during the term of this Agreement policies of insurance of the type and amounts described below and in a form satisfactory to City. Tenant agrees to provide insurance in accordance with requirements set forth here. If Tenant uses existing coverage to comply and that coverage does not meet these requirements, Tenant agrees to amend, supplement or endorse the existing coverage. 2. Acceptable Insurers. All insurance policies shall be issued by an insurance company currently authorized by the insurance commissioner to transact business of insurance in the State of Califomia, with an assigned policyholders' rating of a- (or higher) and financial size category class vii (or larger) in accordance with the latest edition of best's key rating guide, unless otherwise approved by the City's Risk Manager. 3. Coverage Requirements. A. Workers' Compensation Insurance. Tenant and Tenant's agents, representatives, consultants, contractors and/or subcontractors, shall maintain Workers' Compensation Insurance, statutory limits, and Employer's Liability Insurance with limits of at least one million dollars ($1,000,000) each accident for bodily injury by accident and each employee for bodily injury by disease in accordance with the laws of the State of California, Section 3700 of the Labor Code. Tenant and Tenant's agents, representatives, consultants, contractors and/or subcontractors, shall submit to City, along with the certificate of insurance, a Waiver of Subrogation endorsement in favor of City, its officers, agents, employees and volunteers. B. General Liability Insurance. Tenant and Tenant's agents, representatives, consultants, contractors and/or subcontractors, shall maintain commercial general liability insurance, and if necessary umbrella liability insurance, with coverage at least as broad as provided by Insurance Services Office form CG 00 01, in an amount not less than ten million dollars ($10,000,000) per occurrence, ten million dollars ($10,000,000) general aggregate. The policy shall cover liability arising from premises, Harbor Day School Page C-1 operations, personal and advertising injury, and liability assumed under an insured contract (including the tort liability of another assumed in a business contract) with no endorsement or modification limiting the scope of coverage for liability assumed under a contract. C. Automobile Liability Insurance. Tenant and Tenant's agents, representatives, consultants, contractors and/or subcontractors, shall maintain automobile insurance at least as broad as Insurance Services Office form CA 00 01 covering bodily injury and property damage for all activities of Tenant arising out of or in connection with work to be performed at the Premises, including coverage for any owned, hired, non - owned or rented vehicles, in an amount not less than five million dollars ($5,000,000) combined single limit each accident. D. Professional Liability (Errors & Omissions) Insurance. Tenant shall require that Tenant's consultants, contractors and/or subcontractors providing any design, engineering, surveying or architectural services for the Premises maintain professional liability insurance that covers the services to be performed, in the minimum amount of one million dollars ($1,000,000) per claim and two million dollars ($2,000,000) in the aggregate. Any policy inception date, continuity date, or retroactive date must be before the Effective Date of this Agreement and Tenant shall require that Tenant's consultants, contractors and/or subcontractors agree to maintain continuous coverage through a period no less than three (3) years after completion of the services performed. E. Automobile Liability Insurance. Tenant and Tenant's consultants, contractors and/or subcontractors shall maintain automobile insurance at least as broad as Insurance Services Office form CA 00 01 covering bodily injury and property damage for all activities of Tenant or all activities of Tenant's consultants, contractors and/or subcontractors arising out of or in connection with work to be performed on the Premises, including coverage for any owned, hired, non -owned or rented vehicles, in an amount not less than five million dollars ($5,000,000) combined single limit each accident. F. Builder's Risk Insurance. During construction, Tenant shall require that Tenant's construction contractors and subcontractors maintain Builders Risk insurance or an installation floater as directed by City, covering damages to the work for "all risk" or special causes of loss form with limits equal to one hundred percent (100%) of the completed value of the work, with coverage to continue until final acceptance of the work by Tenant and City. City shall be included as an insured on such policy, and Tenant shall provide City with a copy of the policy. G. Pollution Liability Insurance. Tenant shall require that Tenant's construction contractors and subcontractors maintain a policy providing Harbor Day School Page C-2 contractor's pollution liability ("CPL") coverage with a total limit of Liability of no less than two million dollars ($2,000,000) per loss and in the aggregate per policy period dedicated to this project. The CPL shall be obtained on an occurrence basis for a policy term inclusive of the entire period of construction. If all or any portion of CPL coverage is available only on a claims -made basis, then a 10-year extended reporting period shall also be purchased. The CPL policy shall include coverage for cleanup costs, third -party bodily injury and property damage, including loss of use of damaged property or of property that has not been physically injured or destroyed, resulting from pollution conditions caused by contracting operations. Coverage as required in this paragraph shall apply to sudden and non -sudden pollution conditions resulting from the escape or release of smoke, vapors, fumes, acids, alkalis, toxic chemicals, liquids, or gases, waste materials, or other irritants, contaminants, or pollutants. The CPL shall also provide coverage for transportation and off - site disposal of materials. The policy shall not contain any provision or exclusion (including any so-called "insured versus insured" exclusion or "cross -liability" exclusion) the effect of which would be to prevent, bar, or otherwise preclude any insured or additional insured under the policy from making a claim which would otherwise be covered by such policy on the grounds that the claim is brought by an insured or additional insured against an insured or additional insured under the policy. 4. Endorsements: Policies shall contain or be endorsed to contain the following provisions: A. Additional Insured Status. City, its elected or appointed officers, officials, employees, agents and volunteers are to be covered as an additional insured under all general liability and pollution liability policies with respect to liability arising out of Tenant's activities related to this Agreement and with respect to use or occupancy of the Premises. B. Primary and Non Contributory. Policies shall be considered primary insurance as respects to City, its elected or appointed officers, officials, employees, agents and volunteers as respects to all claims, losses, or liability arising directly or indirectly from Tenant's operations. Any insurance maintained by City, including any self -insured retention City may have, shall be considered excess insurance only and not contributory with the insurance provided hereunder. C. Liability Insurance. Liability insurance shall act for each insured and additional insured as though a separate policy had been written for each, except with respect to the limits of liability of the insuring company. D. Waiver of Subroqation. All insurance coverage maintained or procured pursuant to this Agreement shall be endorsed to waive subrogation against City, its elected or appointed officers, agents, officials, employees Harbor Day School Page C-3 and volunteers or shall specifically allow Tenant or others providing insurance evidence in compliance with these requirements to waive their right of recovery prior to a loss. Tenant hereby waives its own right of recovery against City, and shall require similar written express waivers from each of its consultants, contractors or subcontractors. E. Reportinq Provisions. Any failure to comply with reporting provisions of the policies shall not affect coverage provided to City, its elected or appointed officers, officials, employees, agents or volunteers. F. Notice of Cancellation. The insurance required by this Agreement shall not be suspended, voided, canceled, or reduced in coverage or in limits except after thirty (30) calendar days (ten (10) calendar days written notice of non-payment of premium) written notice has been received by City. It is Tenant's obligation to ensure that provisions for such notice have been established. G. Loss Payee. City shall be included a loss payee under the commercial property insurance. 5. Additional Requirements. A. In the event City determines that (i) the Tenant's activities on the Property creates an increased or decreased risk of loss to the City, (ii) greater insurance coverage is required due to the passage of time, or (iii) changes in the industry require different coverage be obtained, Tenant agrees that the minimum limits of any insurance policy required to be obtained by Tenant or Tenant's consultants, contractors or subcontractors, may be changed accordingly upon receipt of written notice from City. With respect to changes in insurance requirements that are available from Tenant's then -existing insurance carrier, Tenant shall deposit certificates evidencing acceptable insurance policies with City incorporating such changes within thirty (30) calendar days of receipt of such notice. With respect to changes in insurance requirements that are not available from Tenant's then- existing insurance carrier, Tenant shall deposit certificates evidencing acceptable insurance policies with City, incorporating such changes, within ninety (90) calendar days of receipt of such notice. B. Any deductibles applicable to the commercial property or insurance purchased in compliance with the requirements of this section shall be approved by City. C. Tenant and Tenant's consultants, contractors and/or subcontractors shall be subject to the insurance requirements contained herein unless otherwise specified in the provisions above or written approval is granted by the City. Tenant shall verify that all consultants, contractors and/or subcontractors maintain insurance meeting all the requirements stated Harbor Day School Page C-4 herein, and Tenant shall ensure that City is an additional insured on insurance required from contractors. consultants and/or subcontractors. D. For General Liability coverage, contractors, consultants and/or subcontractors shall provide coverage with a format at least as broad as provided by Insurance Services Office form CG 203 80413. E. if Tenant maintains higher limits than the minimums shown above, the City requires and shall be entitled to coverage for the higher limits maintained by the tenant. Any available insurance proceeds in excess of the specified minimum limits of insurance and coverage shall be available to the City. Tenant shall give City prompt and timely notice of any claim made or suit instituted arising out of or resulting from Tenant or Tenant's agents, representatives, consultants, contractors or subcontractors performance under this Agreement. G. Tenant shall provide certificates of insurance, with original endorsements as required above, to City as evidence of the insurance coverage required herein. Insurance certificates must be approved by City prior to commencement of work or issuance of any permit. Current certification of insurance shall be kept on file with City at all times during the term of this Agreement. H. All required insurance shall be in force on the Effective Date, and shall be maintained continuously in force throughout the term of this Agreement. In addition, the cost of all required insurance shall be borne by Tenant or by Tenant's consultants, contractors or subcontractors. I. If Tenant or Tenant's consultants, contractors or subcontractors fail or refuse to maintain insurance as required in this Agreement, or fail to provide proof of insurance, City has the right to declare this Agreement in default without further notice to Tenant, and City shall be entitled to exercise all available remedies. J. Tenant agrees not to use the Premises in any manner, even if use is for purposes stated herein, that will result in the cancellation of any insurance City may have on the Premises or on adjacent premises, or that will cause cancellation of any other insurance coverage for the Premises or adjoining premises. Tenant further agrees not to keep on the Premises or permit to be kept, used, or sold thereon, anything prohibited by any fire or other insurance policy covering the Premises. Tenant shall, at its sole expense, comply with all reasonable requirements for maintaining fire and other insurance coverage on the Premises. Harbor Day School Page C-5 Exhibit "D" Memorandum of Lease Harbor Day School Page D-1 RECORDING REQUESTED AND WHEN RECORDED RETURN TO: Office of the City Clerk City of Newport Beach 100 Civic Center Drive PO Box 1768 Newport Beach, CA 92658 [Exempt from Recordation Fee - Govt. Code §§ 6103 & 27383] MEMORANDUM OF LEASE AGREEMENT This Memorandum of Lease Agreement ("Memorandum") is dated tajwk (ca 2014, and is made between City of Newport Beach, a California municipal corporation and charter city ("City') and Harbor Day School, a California non-profit corporation ("Tenant"), concerning the Premises described in Exhibit "A," attached hereto and by this reference made a part hereof. For good and adequate consideration, City leases the Premises to Tenant, and Tenant leases the Premises from City, for the term and on the provisions contained in the Agreement dated rkuMju.4t(® , 2014, including without limitation provisions prohibiting assignment, subleasing, and encumbering said leasehold without the express written consent of City in each instance, all as more specifically set forth in said Agreement, which said Agreement is incorporated in this Memorandum by this reference. The Agreement's term is twenty-five (25) years, beginning o�[OtPttk , and ending unless extended bythe parties. This Memorandum is not a complete summary of the Agreement. Provisions in this Memorandum shall not be used in interpreting the Agreement's provisions. In the event of conflict between this Memorandum and other parts of the Agreement, the other parts shall control. Execution hereof constitutes execution of the Agreement itself. [Signatures on the next page] Harbor Day School Page D-1 IN WITNESS WHEREOF, the parties hereto have executed this Memorandum of Lease as of the dates written below. APPROVED AS TO FORM: CITY the City of Newport Beach, THE CITY ATTO NEY'S OFFICE a California municipal corporation Date: ���8 �3 Date: By: Aaron C. Harp City Attorney EST: � Date: By: Leilani I. Brown City Clerk By: David Kiff City Manager TENANT Harbor Day School, a California non-profit corporation Date: 7- L3 17 By4 t Ge ffrey V B6uv. n Der Ahe President, Board of Trustees Date: Dr.`Daniel R. Greenwood Head of School NOTARY ACKNOWLEDGMENT State of California ) County of ORANGE ) On I\ULr 5 2ot'{ before mejU\ Yt\UuiclfVotary Public, personally appea?ed DAVE KIFF, who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity(es)rand that by his signature on the instrument the person, or the entity upon behalf of which the persons) acted, executed the instrument. 1 certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature State of California ) County of ORANGE ) (Seal) JENNIFER ANNMUWEY E Commission # 2045022 z Notary Public - California orange County MT Com j,Exelree Oct 12. 20171 NOTARY ACKNOWLEDGMENT On �JI�'�% 73 2 /4 before e, ��/� / Notary Public, personally peared i eo R1. ho proved to me on the basis of satisfactory evidence to be t - .;rsoWwhdse name is subs ribed to the within instrument and acknowledged0»one tha ?t executed the same irVtfTher authorized capacity(ies), and that by hlc/her signature on the instrument the person, or the entity upon behalf of which the person(s) acted, executed the instrument. 1 certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature ,l -tMxrt J!N 11 Commission 01941377 Notary Public California Orange County My Comm. Expires Jun 16, 201 z z