Agenda packet, first session — Los Gatos City Council, June 17, 2025 (part 5 of 7)

ITEM NO. 18.

Agreement for Consultant Services
Project Sentinel

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or personally delivered to Consultant to such address or such other address as Consultant designates in writing to Town.

4.7 Order of Precedence. In the event of any conflict, contradiction, or ambiguity between the terms and conditions of this Agreement with respect to the Products or Services and any attachments to this Agreement, then the terms and conditions of this Agreement shall prevail over attachments or other writings.

4.8 Entire Agreement. This Agreement, including all Exhibits, constitutes the complete and exclusive statement of the Agreement between the Town and Consultant. No terms, conditions, understandings or agreements purporting to modify or vary this Agreement, unless hereafter made in writing and signed by the party to be bound, shall be binding on either party.

IN WITNESS WHEREOF, the Town and Consultant have executed this Agreement.

Town of Los Gatos, by:

Chris Constantin, Town Manager

Recommended by:

Joel Paulson
Consultant, by:

Carol Conn, Executive Director
Project Sentinel
Community Development Director
Approved as to Form:

Gabrielle Whelan, Town Attorney
Attest:

Wendy Wood, CMC, Town Clerk

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ITEM NO. 18.
1 BUDGET SUMMARY

LOS GATOS RENTAL DISPUTE RESOLUTION ROGRAM
Agency name: Project Sentinel
Contact person: Isenia Macias, Dispute Resolutions Program Director Address: 1490 El Camino Real, Santa Clara, CA 95050
Phone number: 209-735-0549
E-mail: [email protected]
Executive Director: Carole Conn, 408-470-3739, [email protected] Financial POC: Deanne Komush, [email protected]
Sara Cottrell, 408-414-5310, [email protected]
COST OF SERVICES: July 1, 2025 - June 30, 2026
Proposed Town of Los Gatos Grant
Project Expenses
Salaries $ 25,700.00
Benefits $ 4,346.00
Office Supplies
Communication
Publications/Printing/Advertising
Travel
Rent/Lease/Mortgage
Utilities
Insurance
Equipment Rental/Maintenance,
Specify:

Other, Specify: Indirect cost rate 22% $ 5,654.00
Total Expenses $ 35,700.00
Exhibit A

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ITEM NO. 18.
2 PROJECT SENTINEL

PROPOSAL TO PROVIDE SERVICES FOR THE

LOS GATOS RENTAL DISPUTE RESOLUTION PROGRAM
July 1, 2025 – June 30, 2026
I. AGENCY DESCRIPTION
Project Sentinel is a nonprofit organization committed to addressing housing issues and ensuring fair housing access. Established in 1976 by community members concerned about barriers faced by minorities and other groups, the organization has grown significantly over the past four decades. Today, Project Sentinel serves a population of over 4.5 million with a staff of 44, operating out of seven offices in Redwood City, Santa Clara, Gilroy, Fremont, Sacramento, Milpitas, and Modesto. Its work is supported by numerous funding sources, including 19 contracts for housing information, counseling, and dispute resolution; 23 contracts for fair housing services; and multiple contracts and foundation grants supporting homeownership services such as foreclosure prevention and first-time homebuyer education.

Each year, the agency handles more than 16,000 inquiries, opens approximately 3,000 cases, delivers over 300 public presentations and workshops, and distributes thousands of multilingual educational materials. Project Sentinel has extensive experience managing rental housing dispute resolution and rent stabilization programs, administering three rent control ordinances for Mountain View, Hayward, and Los Gatos, as well as mandatory mediation programs in Palo Alto, Fremont and Campbell.

With a proven track record in fair housing and dispute resolution, Project Sentinel’s experienced team is well-equipped to continue administering the Rental Dispute Resolution Program for the Town of Los Gatos. The agency’s existing partnerships with cities, counties, and federal agencies ensure a stable financial foundation, and its long-standing reputation as a trusted nonprofit demonstrates its ability to sustain these services effectively.

The program’s primary objectives are to educate the community about housing rights and responsibilities, prevent minor disputes from escalating into major conflicts that could lead to eviction or homelessness, and facilitate impartial mediation. By promoting direct communication and providing neutral support, Project Sentinel empowers individuals to resolve their housing concerns constructively.

II. PROGRAM OPERATIONS – DIRECT SERVICES
In recent years, residential rental rates across Silicon Valley have remained high, driven by a persistent housing shortage, rising demand, and economic fluctuations. While some areas have experienced periods of housing stabilization, overall affordability remains a significant challenge, particularly for individuals and families whose incomes have not kept pace with increasing housing costs. The impact is especially severe for low- and middle-income households, many of whom face growing financial strain as rents continue to outpace wage growth.

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ITEM NO. 18.
3 Administration of Ordinances:

The Town of Los Gatos is part of the growing number of jurisdictions in Santa Clara County that maintains a Rent Control Ordinance as well as a Mobile Home Ordinance. Tenants are increasingly concerned about being forced out of their living arrangements due to increasing rents, while housing providers are anxious to use the Ordinance to meet their ultimate goal of bringing their rental units to “market level.” To meet the mounting needs of both these populations, owners and renters, Project Sentinel provides information, education and administers the rent dispute resolution services under these Ordinances.

In the 20+ years Project Sentinel has administered the Los Gatos Ordinance, and has provided ancillary services such as counseling, information, and appropriate referrals to all tenants and landlords, regardless of whether they are subject to the Ordinance.

A. Information & Education
Because lack of knowledge is one of the main generators of conflict, one of the primary ingredients of our conflict resolution program is to inform and educate tenants and landlords about their respective rights and responsibilities. Well-informed tenants and landlords can often avoid conflict, or, when in the midst of a conflict, are more apt at working towards realistic solutions. To achieve this result, we will perform the following activities and routine components of Project Sentinel’s information, education and outreach:

1. Website & Social Media. Project Sentinel offers a website, www.housing.org, which informs and educates members of the community on conflict resolution and other services.

Various forms and educational material are available on the site, such as flyers and publications, as well as links to helpful resources for tenants and landlords such as the Rental Dispute Resolution program of Los Gatos. Our office is available for e-mail communication and conducts a significant level of communication directly through phone calls and email. Through our social media accounts, we keep readers involved in the latest news and trends in the housing area.

2. Collaboration. The agency will pursue joint ventures with other community-based organizations, as well as providing quick and accurate referrals. The agency has a strong tie to other dispute resolution agencies such as the Peninsula Conflict Resolution Center and the Bay Area Coalition of Community Mediation. Project Sentinel works closely with a number of other organizations that serve minority, new immigrant and other underserved populations. The Asian Law Alliance provides Project Sentinel with translated materials on rental rights and responsibilities and is a source for legal referrals, along with the Law Foundation of Silicon Valley, when necessary.

3. Public presentations. Project Sentinel makes public presentations to the general community, housing industry and social service providers.

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ITEM NO. 18.
4 4. Literature distribution. Project Sentinel has developed brochures specific to the Los Gatos Rental Dispute Resolution Program. The brochures are distributed at the City Hall, Library, Senior & Community Center and various expos and fairs.

B. Rent Dispute Resolution
Project Sentinel will, upon receiving an inquiry from a Los Gatos resident, determine whether the housing problem is appropriate for the dispute resolution process. The process is as follows:

Step 1: Provide Information or referral services via telephone, email, mail or in person and advise all parties regarding Program procedures; Step 2: Provide conciliation services;
Step 3: Coordinate mediation when conciliation is not sufficient; Step 4: Coordinate arbitration when the dispute is not resolved at the mediation level.

1. Provide information to persons with questions about landlord and tenant relations for properties situated within the jurisdiction’s boundaries. Direct services will be delivered fulltime, five days a week during normal office hours, which are 9:00 am to 4:00 pm. The Director of Dispute Resolution Programs will personally oversee the initial telephone responses and subsequent case handling for this contract. All the specific requirements set forth in the Request for Proposals are currently being performed for the Town of Los Gatos. We offer a performance standard in which 75% of initial calls will be answered on the first call, 90% will be handled within 24 hours and 100% will normally be handled within 48 hours. Packets will be mailed within 24 hours of an appropriate request. Conciliations will be promptly addressed, and cases will be moved to mediation on a timely basis. Mediations will be scheduled at the convenience of the people involved in a dispute, which can include evenings and weekends.

2. Refer calls to appropriate agencies when the caller’s request falls outside the scope of Project Sentinel’s services. The effectiveness of the referrals will be ensured by Project Sentinel’s established network of resources and ongoing collaborations with other organizations.

3. Dispute resolution services of counseling, conciliation, mediation, and arbitration will be delivered by professional staff with some support by trained and experienced dispute resolution neutrals.

Enforcement of the rent control limits in the Ordinance and Regulations is not automatic. A rent increase will be reviewed only if an eligible tenant or tenants file a timely petition to dispute the increase. Generally, a petition challenging a 5% increase will not be accepted, unless the tenant or tenants allege a Service Reduction, which is a failure by the landlord to provide a basic service such as adequate plumbing.

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ITEM NO. 18.
5 Once a valid petition is received, there is a three-part dispute resolution process. At the first step, Project Sentinel staff contact both sides to resolve the dispute through telephone conciliation. The second step is mandatory attendance at a mediation session. If the case is not resolved at these two steps, the tenant can request binding arbitration. The content of all communications made by any party during the conciliation and mediation steps is maintained by Project Sentinel as confidential. Arbitration hearings are recorded. The recordings and the Arbitration Decision are available for review through the Town.

4. The Director or other agency staff will attend any necessary meetings with the Town of Los Gatos as requested by city officials.

5. Staff will maintain a database for easy retrieval of case handling, including the number and type of cases, client demographics, the nature of disputes, and their follow-up and resolution. This database includes information on agreement compliance. Evaluation forms will be collected from clients. The agency will provide quarterly and year-end reports including this information. The agency routinely maintains records of all telephone contacts, including the nature of the call, type of caller and referral sources. These activities are currently being performed for Los Gatos and other cities with which we contract. The agency has a separate dedicated telephone number for the Los Gatos program to ensure that residents of Los Gatos receive direct assistance quickly.

C. Advisory Role Activities

1. Project Sentinel will advise the Town from time to time and at its request, regarding the status of the Program and of the Los Gatos rental housing community.

2. Project Sentinel will coordinate with and assist the Town Attorney's office in any litigation arising out of any petition processed pursuant to the Program.

III. SUMMARY OF EXPERIENCE AND KNOWLEDGE
Project Sentinel has a long-standing track record of successfully providing administrative and hearing process services based on rent stabilization ordinances in the Bay Area. No other agency in this area has a similar record.

For several years, this agency has been administering the rent stabilization petition process in for the City of Mountain View, City of Hayward and Town of Los Gatos and rental mediation programs for the Cities of Palo Alto, Campbell and Fremont. In addition to these services, the agency serves as the first point of contact for many other jurisdictions throughout Santa Clara County, where it provides counseling on the tenant’s and landlord’s rights and responsibilities and administers voluntary and mandatory tenant-landlord mediation programs.

All staff members in the agency’s office are trained as mediators and are experienced in working with both volunteer and professional mediators in diverse capacities. The staff is

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ITEM NO. 18.
6 experienced in all stages of casework, including case development, and monitoring and evaluating compliance with cases that are conciliated or mediated. As one of the founding members of the Bay Area Coalition for Community Mediation (BACCM), Project Sentinel works closely with other organizations to implement the Dispute Resolution Programs Act in the Bay Area, and to promote dispute resolution as a recognized and effective means of resolving problems. Project Sentinel is an active member of the California and National Association for Community Mediation (NAFCM).

IV. STAFFING
Individuals seeking help in resolving rental housing problems are currently served by a staff of case managers who provide advice, referrals, and other information to help parties resolve their problems. The seasoned personnel of Project Sentinel, providing conflict resolution services, has completed one or more mediation courses involving a minimum of 40 hours of classroom and subsequent ongoing training. Following training, staff also participates in internal reviews, monitoring their performance. Staff are mentored by more experienced members of staff. The staff has Spanish bi-lingual capacity. In addition to our regular staff, volunteer members of the community occasionally help us to provide collateral services. In all cases, volunteers are closely supervised and mentored by members of our regular staff.

Project Sentinel is a HUD designated agency for Santa Clara County for the provision of housing counseling services. As such, the staff is knowledgeable of HUD regulations for subsidized property and in mortgage default and delinquency counseling.

Our Conflict Resolution Specialist, Jamila Ghanm, brings nearly two years of dedicated service to the Los Gatos tenant-landlord program, assisting with the administration of the city's ordinances, providing essential education and information, and facilitating rent dispute resolution. With an LLM in U.S. Law specializing in International Human Rights from Santa Clara University and a background in law from the University of Baghdad, she offers extensive experience in program management, advocacy, case management, and community outreach.

Her expertise in legal analysis and dispute resolution allows her to serve as a valuable advisor, ensuring tenants and landlords have the resources and guidance needed to navigate housing concerns effectively.

The Dispute Resolution Staff is supervised and managed by Isenia Macias, who is the Director of Dispute Resolution Programs. Isenia will provide direct service and supervision. Isenia brings both a social services and mediation background to the work of the Dispute Resolution department and conducts education seminars and workshops in both Spanish and English. She reports to the Executive Director of the agency, who in turn reports to Project Sentinel’s Board of Directors. The composition of the Board of Directors reflects the agency’s geographical diversity as well as its services.

Mediators appointed to Project Sentinel’s panel of mediators must have at least two years of mediation experience, and a minimum of 40 hours of training. They are also required to sign a

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ITEM NO. 18.
7 Code of Professional Conduct and Ethics for Mediators, and to follow Project Sentinel’s philosophy in dealing with cases. Project Sentinel’s arbitrators are highly skilled attorneys with significant prior experience in arbitration and dispute resolution.

V. AGENCY’S FINANCIAL AND ORGANIZATIONAL STRUCTURE
(1) Financial Structure
Financial Stability: This agency has been in existence since 1976 with a current annual budget in excess of two million dollars, funded by more than 30 contracts and with a reserve sufficient for reasonable cash flow. Project Sentinel has been providing dispute resolution services since 1992 and is currently funded to provide these services to 12 municipalities in Santa Clara County. Project Sentinel is subject to an annual audit by an outside CPA firm and for the past years has received no negative findings. The Health Trust's Financial and Administrative Support Services (FASS) provides accounting services to the agency. The FASS is known for its comprehensive and transparent financial services to nonprofit organizations.

Record Keeping: The agency maintains its accounts in accordance with the principles of fund accounting and reports income and expenses on the accrual basis of accounting. Fund groups are used as the basis for recording all financial transactions. The organization utilizes the following fund groups:
• Current Unrestricted Fund – represents sources over which the Board of Directors has discretionary control and is used to carry out operations of the organization in accordance with its by-laws.
• Current Restricted Fund – represents the resources currently available for use, but expendable only for those operating purposes specified by the contractor. Any program excess remains with the organization and is transferred to the unrestricted fund at year’s end. • Furniture and Equipment Fund is used for recording the cost of furniture and equipment and accumulated depreciation.

Internal controls such as personnel policies, personnel files, and time sheet maintenance are maintained in accordance with OMB Circular A-122.

Organizational functions and duties are structured to maintain a check-and-balance system by segregating responsibilities such as approving financial transactions, entering transactions, keeping control records, and inventories. All checks over $5,000 require two signatures. The only authorized signatures are those of the Executive Director, the HUD Housing Counseling Director and the Board President.

Contributions are recorded when cash is received and are considered to be available for unrestricted use unless specifically restricted by the donor.

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ITEM NO. 18.
8 Contract Revenue is recorded as revenue when the conditions of the contract are fulfilled, and the related costs have been incurred.

In compliance with federal regulations, Project Sentinel submits an annual financial audit. The fiscal year 2023-2024 audit was conducted by Armanino, and finalized with no findings. (2) Organizational Capacity
Organizational stability adds value to any service. Project Sentinel has over 30 years of experience in dispute resolution with a strong track record in working with local and regional governments.

Project Sentinel actively collaborates with courts, city departments, local businesses and other social service organizations to reach their client/member base. Currently Project Sentinel provides tenant/landlord counseling and dispute resolution services for Palo Alto, Los Altos, Sunnyvale, Cupertino, Milpitas, Santa Clara, Gilroy, Richmond, Merced and Unincorporated Areas of Santa Clara County as well as Fremont, Redwood City, City of San Jose, San Mateo County, and Stanislaus County. Project Sentinel administers mandatory mediation services or petition processes for local Rent Dispute Resolution and Rent Stabilization Programs in Campbell, Mountain View, Palo Alto, Hayward, and Los Gatos.

Agency’s ability to incorporate the operation into existing workload:
• Demonstrated ability to administer a complex Rental Dispute Ordinance.

Project Sentinel has a proven track record of servicing the Los Gatos ordinance which involves administrative complexity. The agency has a record of fast response to telephone inquiries and timely processing of cases through completion, with success rates resolving over 70% of filed petitions.
• Ability to provide both housing information and dispute resolution services.

Because of the technical nature of housing disputes, Project Sentinel has developed a two-step approach in assisting the community by (1) offering timely and technically accurate information, and (2) providing dispute resolution services with a team of trained, experienced staff and volunteer mediators, and professional, paid mediators and arbitrators. • Personalized service. Although some programs offer information through voicemail menu, all clients of Project Sentinel talk directly with a case manager and receive individualized answers to their questions. We believe that personal contact is particularly important to people who are involved in disputes that affect their homes, and that our housing counselors can help to diffuse tension and escalated emotions so that people can focus on solving their problems. Project Sentinel maintains a phone line dedicated to servicing Los Gatos residents. That phone line is attended to by the agency’s Director of Dispute Resolution and/or an experienced case manager.

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ITEM NO. 18.
9 • Rapid response capabilities. Project Sentinel provides immediate services without requiring burdensome paperwork. We have a stated goal of answering most initial calls immediately and, if necessary, returning messages within 24 hours or less. We have the ability to arrange mediations within a short time frame. All mediations are scheduled at the convenience of disputing parties. The panels of mediators and arbitrators used by the agency are composed of experienced dispute resolution specialists. • Housing industry support. Even if the Los Gatos Rent Dispute Resolution Program calls for mandatory mediation participation, it is still essential that all parties involved are willing to participate in the process. Because more than 85% of requests for assistance come from tenants, it is particularly important to ensure the willing participation of property owners in the process. Project Sentinel has established a solid working relationship with TriCounty Apartment Owners Association to deal with difficult landlords who are reluctant to participate in dispute resolution. Furthermore, Tri-County employees have directly solicited interpretations of the Los Gatos ordinance from Project Sentinel and have thanked the agency for its willingness to provide prompt and accurate responses. • Process and Compliance Evaluation. Project Sentinel strives for continuous quality improvement. The program maintains an extensive database on all cases, including demographics, types of disputes and their outcomes. Client surveys reveal a compliance rate over 90% with conciliated and mediated agreements and that over 90% of program participants would use the services again, if needed.

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ITEM NO. 18.

PREPARED BY: Holly Young
Senior Management Analyst
Reviewed by: Town Manager, Assistant Town Manager, Town Attorney, and Finance Director 110 E. Main Street Los Gatos, CA 95030 ● (408) 354-6832 www.losgatosca.gov

TOWN OF LOS GATOS

COUNCIL AGENDA REPORT
MEETING DATE: 06/17/2025
ITEM NO: 19
DATE: June 3, 2025
TO: Mayor and Town Council
FROM: Chris Constantin, Town Manager
SUBJECT: Authorize the Town Manager to Enter into a Five-Year Agreement for Cablecasting and Livestreaming Services with KCAT-TV, a Non-Profit Access Television Station
RECOMMENDATION:

Authorize the Town Manager to enter into a five-year agreement for cablecasting and livestreaming services with KCAT-TV, a non-profit access television station, for a minimum of $63,000 annually, in substantially the form presented.

FISCAL IMPACT:

The fiscal impact is anticipated to be a minimum of $63,000 annually for cablecasting and livestreaming services over the course of a five-year period. This amount may increase based on additional meetings held in excess of 60 meetings per year. Sufficient anticipated funds are available in the Town budget. KCAT will continue to receive 100% of PEG funding from the Town on a quarterly basis, provided the Town retains a PEG funds balance of $50,000 in an equipment reserve account. These funds will be made available, as approved by the Town, for major maintenance, replacement, or upgrading of the cablecast and related technology resources in the Town Council chambers. When funds in the equipment reserve account are spent, it will be replenished by the Town depositing 10% of the PEG funding received until the $50,000 is reached.

STRATEGIC PRIORITIES:

This agreement supports the Town’s core goal of Civic Engagement and supports public access to Town Council, Planning Commission, and Pension and OPEB Trusts Oversight Committee meetings.

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ITEM NO. 19.

PAGE 2 OF 3
SUBJECT: KCAT Agreement
DATE: June 17, 2025
BACKGROUND:

Since 2003, the Town has had an agreement with KCAT to provide cablecasting of Town meetings, including the recording and broadcasting of Town Council and Planning Commission meetings on local television channel 15. In 2010, the Town Council approved a five-year agreement to continue the cablecasting services and distribution of public, education, and government (PEG) funding. In 2015, the Town Council approved a five-year agreement to continue the public access funding and cablecasting services. In 2019, the Town Council approved a first amendment to that agreement to add livestreaming services, including streaming the live video feed to a Town-branded YouTube page, on-call engineering services to support technical issues, YouTube channel organization and management, and providing an mpg4 file to Town staff the day after the meeting occurs. In 2020, the Town Council approved the existing five-year agreement to continue cablecasting and livestreaming services at a flat annual rate, eliminating previous variable overtime charges. That existing agreement expires June 30, 2025, and is included as Attachment 1 for reference.

DISCUSSION:

In early 2025, Town staff and KCAT representatives began working together collaboratively to negotiate a new five-year agreement for the cablecasting and livestreaming of Town Brown Act meetings, including Council, Planning Commission, and Pension and OPEB Trusts Oversight Committee meetings. A draft agreement was reached and is available as Attachment 2 to this report.

Pursuant to the negotiated terms, beginning in Fiscal Year (FY) 2025-26 through FY 2030-31, KCAT will broadcast 60 regular Town Brown Act meetings per year on local television channel 15 and livestream on the Town-branded YouTube channel for an annual fee of $63,000, or $5,250 per month. This price includes cablecasting, livestreaming, and all related set-up, uploading/transferring, and data storage. Additional meetings will be charged at a flat fee of $1,000 per meeting. Other minor changes to the terms from the current agreement include the creation of an Equipment Inventory List and Replacement Plan for all equipment and a requirement for KCAT to submit a signed affidavit confirming that all PEG Funds received from the Town were used in compliance with all applicable regulations.

CONCLUSION:

KCAT’s ability to provide cablecasting on local television and livestreaming on YouTube of Town Council, Planning Commission, and Pension and OPEB Trusts Oversight Committee meetings is important to allow the public access to view these meetings live, as well as to access archived meetings. Staff recommends the Town Council authorize the Town Manager to enter into a five-year agreement for cablecasting and livestreaming services with KCAT.

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ITEM NO. 19.

PAGE 3 OF 3
SUBJECT: KCAT Agreement
DATE: June 17, 2025
COORDINATION:

This report has been prepared in coordination with Information Technology, the Clerk’s Office, the Town Attorney, and the Town Manager’s Office.

ENVIRONMENTAL ASSESSMENT:

This is not a project defined under CEQA, and no further action is required.

Attachments:

1. Current Agreement for Services with KCAT

2. Draft Five-Year Agreement for Services with KCAT

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ITEM NO. 19.

Agreement for Services with KCAT 2020/21 – 2024/25 Page 1 of 12

AGREEMENT FOR PUBLIC ACCESS FUNDING, CABLECASTING, AND LIVESTREAMING

SERVICES
THIS AGREEMENT is made and entered into on September 1, 2020 by and between TOWN OF LOS GATOS, a California municipal corporation, (“Town”) and KCAT-TV (“KCAT”), whose address is 20 High School Court, Los Gatos, CA 95030. This Agreement is made with reference to the following facts.

I. RECITALS

1.1 KCAT is a non-profit public access television station that serves the community of Los Gatos and Monte Sereno. KCAT can be viewed via Comcast Channel 15 by roughly 10,000 cable households in Los Gatos and Monte Sereno.

1.2 The Town has always supported public access television within its jurisdictional limits and seeks, in this Agreement to provide a more stable funding source to support public, educational, and governmental cablecasting.

1.3 The Agreement will serve as a contract with the Town to pay for KCAT services rendered to cablecast and livestream Town Brown Act meetings.

1.4 The parties to this Agreement replace and supersede all previous agreements between the parties related to public access television.

II. REPRESENTATIONS AND WARRANTIES OF KCAT

2.1 KCAT Status. KCAT shall be an independent contractor and not an agent or employee of the Town. KCAT shall be duly organized, validly existing and in good standing under the laws of the State of California and has the power to own its properties and to carry on its business as now owned and operated and as required by this Agreement.

2.2 KCAT Authorization. KCAT has the authority to enter into and perform its obligations under this Agreement. The Board of Directors and KCAT (or the shareholders, if necessary) have taken all actions required by law, its articles of incorporation, its bylaws, or otherwise to authorize the execution of this Agreement. The persons signing this Agreement on behalf of KCAT have the authority to do so.

2.3 Equal Employment Opportunity. KCAT warrants that it is an equal opportunity employer and shall comply with applicable regulations governing equal opportunity employment.

KCAT shall not discriminate against persons employed or seeking employment with them on the basis of age, sex, color, race, marital status, sexual orientation, ancestry, physical or mental disability, national origin, religion, or medical condition, unless based upon a bona fide occupational qualification pursuant to the California Fair Employment & Housing Act.

DocuSign Envelope ID: B2E48873-8602-4F61-95EE-5BD0590E0B66 Attachment 1
AGR 20.143 DocuSign Envelope ID: 76D1CBB9-AC64-4CD9-8BDB-8F161EE3C15F

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ITEM NO. 19.

Agreement for Services with KCAT 2020/21 – 2024/25 Page 2 of 12

2.4 Compliance with Laws and Regulations. KCAT shall comply with all existing and future Town, County, State, and Federal Laws, including all environmental laws.

2.5 Permits and Licenses. KCAT shall procure and maintain in force and effect all necessary governmental permits and licenses and give all notices necessary to the due and lawful performance of the work contemplated herein. KCAT shall pay the currently approved amount for an annual business license to operate in the Town as delineated in the Town code.

III. TERM OF AGREEMENT

3.1 Term of Agreement. The effective date of this Agreement shall be September 1, 2020. The term of this agreement shall be for a period of five years, commencing on September 1, 2020 and expiring at midnight on June 30, 2025. The Town shall, at its sole discretion, extend this Agreement on a year to year basis depending on the Town budget appropriations for these services. The terms and conditions of this Agreement, including compensation, shall be applicable during said extension unless the parties mutually agree on any changes.

IV. SCOPE OF AGREEMENT

4.1 Scope of Agreement. The Agreement granted to KCAT shall be for the video production of sixty (60) Regular Town Brown Act meetings per year. Production includes cablecast and live streaming services from the Town Council Chambers of, at a minimum:
 Town Council meetings, generally scheduled on the first and third Tuesday of each month,
 Planning Commission meetings, generally scheduled on the second and fourth Wednesdays of each month, and
 Pension and OPEB Trusts Oversight Committee meetings as scheduled.

Additional meetings may include special meetings, study sessions, and regular or continued meetings. The Town Manager or their designee shall have the authority to designate a Special Town Brown Act meeting or any other Committee/Board meeting in place of a regular Town Brown Act meeting.

4.2 Administration of Agreement. The Town Manager, and/or their designee, shall administer this Agreement and supervise KCAT compliance with the Agreement terms and conditions.

4.3 Ownership of Video Recorded Town Brown Act Meetings. All Town Brown Act meetings video recorded and live streamed by KCAT pursuant to this Agreement shall be property of the Town.

DocuSign Envelope ID: B2E48873-8602-4F61-95EE-5BD0590E0B66 DocuSign Envelope ID: 76D1CBB9-AC64-4CD9-8BDB-8F161EE3C15F

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ITEM NO. 19.

Agreement for Services with KCAT 2020/21 – 2024/25 Page 3 of 12 V. DIRECT SERVICES

5.1 General. The video production work to be done by KCAT pursuant to this Agreement shall include the furnishing of all labor, supervision, equipment, materials, supplies, and all other items necessary to perform the services required, except as provided elsewhere in this Agreement. KCAT shall, at all times during the term of this Agreement, provide quality, efficient, technical and professional service to the reasonable satisfaction of Town and shall perform all work required under this Agreement.

5.2 Video Production Schedules. Town shall provide a list of all anticipated regular Town Brown Act meetings, including the dates, times and locations for each meeting. KCAT shall establish schedules for video production of meetings, including set up and take down, and shall notify the Town of said schedules.

5.3 Operations and Equipment. KCAT shall be responsible for the management and operation of the video production services provided pursuant to this Agreement, including but not limited to training and meeting-to-meeting supervision of operations. KCAT will provide appropriate technical staff, temporary operators, and an in-chamber assistant trained in the specific aspects of meeting coverage and use of the audio and video systems. Technical staff, temporary operators, and the in-chamber assistant will demonstrate proficiency with all relevant broadcasting equipment.

KCAT will arrange for two (2) alternates to act as temporary operators, if KCAT cannot provide agreed upon services due to illness, emergency, or other reasonable circumstances. The two (2) alternates shall be mutually agreed upon by the KCAT and the Town. Alternates shall be both technically trained and competent to operate the Town’s video production equipment. In KCAT’s presence, alternates shall work a minimum of one (1) Council Meeting per year, not to exceed six (6) hours per year, per alternate, as training on the Town’s video production equipment.

The Town shall provide all equipment necessary at Council Chambers to record Brown Act meetings under this Agreement. KCAT will provide technical consultation for the repair, modification, and upgrade of the Town-owned video production equipment. KCAT shall provide all routine maintenance, repair, and replacement of all cablecasting equipment at the level necessary to permit the equipment to achieve its useful life. This maintenance does not include maintenance of the external cable link between Town Hall and KCAT. Said equipment shall be operated in a safe manner consistent with reasonable industry standards. KCAT will provide initial system checks, 60 (sixty) minutes prior to scheduled meetings to ensure that the video and sound production equipment is performing per specifications.

KCAT shall not use Town video broadcasting equipment for any other purpose other than this Agreement, unless written consent is given by the Town. Cablecasting and DocuSign Envelope ID: B2E48873-8602-4F61-95EE-5BD0590E0B66 DocuSign Envelope ID: 76D1CBB9-AC64-4CD9-8BDB-8F161EE3C15F

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ITEM NO. 19.

Agreement for Services with KCAT 2020/21 – 2024/25 Page 4 of 12 broadcasting equipment shall be operated at all times by the technical and temporary staff covered in this Agreement.

KCAT will provide gavel to gavel meeting coverage and is responsible for securing the video production equipment room after cablecasting, tape duplication, or other activities.

5.4 Livestreaming. KCAT’s livestreaming services include streaming the live video to the Town of Los Gatos branded YouTube page during the meeting, archiving the meeting recordings on the YouTube channel for viewing later, on-call engineering services to support technical issues, YouTube channel organization and management, and providing an mpg4 file to Town staff the day after the meeting occurs.

VI. OTHER SERVICES

6.1 Playback. KCAT will air previously recorded meetings covered by this agreement on its Community Access Channel (Channel 15/ KCAT) based on its program/schedule availability.

6.2 Special Events. KCAT will work cooperatively with Town staff regarding the live cablecast of any additional special events at a mutually agreed upon price, date, and time.

6.3 Liaison with Town. KCAT shall maintain an on-going liaison with the Town regarding all video production and insertion point activities, and any matters relating to the performance of this Agreement, including complaints.

6.4 Records. KCAT shall maintain a general ledger and detailed books of account showing the receipt and expenditure of all funds received from Town for not less than five (5) years following completion of the work, the receipt of funds and the expenditure of funds under this Agreement. KCAT shall make these records available to authorized personnel of the Town at KCAT's offices during business hours upon written request of the Town.

If an audit conducted by the Town demonstrates inappropriate expenditures of public funds by KCAT, including PEG funds, KCAT shall reimburse said expenditures and restore the funding as may be required. If any audit by Town discloses a discrepancy in allowed expenditures of more than five percent (5%) in any one year, KCAT shall reimburse Town for the cost of the audit, including any staff time contributed to the securing or management of the audit and/or the required follow-up actions.

KCAT shall maintain detailed records and books of account showing the receipt of and expenditure of all PEG Funding and Grant Funding received from Town. KCAT acknowledges that PEG funding is strictly limited to certain expenditures for capital costs, equipment, and facilities.

DocuSign Envelope ID: B2E48873-8602-4F61-95EE-5BD0590E0B66 DocuSign Envelope ID: 76D1CBB9-AC64-4CD9-8BDB-8F161EE3C15F

Page 498 ends

ITEM NO. 19.

Agreement for Services with KCAT 2020/21 – 2024/25 Page 5 of 12 On or before March 1st of each year, beginning with March 1, 2021, KCAT shall submit a written report and analysis of all funds received from Town in the prior calendar year and a listing of expenditures made with said funds or from the accumulation or interest/investment earnings on said funds. The report shall be submitted to the Town Manager.

6.5 Adjustments to Level of Video Production Services. The Town has the right to request additional video production services. Compensation for any additional video production service shall be pursuant to Article 7.1. Similarly, the Town has the right to reduce video production services in the event of budgetary reductions. Any reduction in compensation paid by TOWN would be negotiated and agreed upon by both parties.

VII. KCAT’S COMPENSATION

7.1 Compensation. The Town shall compensate KCAT in the amount of $60,000 per year or $5,000 per month for sixty (60) regular Town Brown Act meetings. This price includes $48,000 for annual cablecasting services and $12,000 for annual live streaming services.

This price includes set-up, testing, meeting time, transfer time, upload time, data storage fees, television programming, and site management. No overtime will be applicable. The Town Manager shall have the authority to designate a Special Town Brown Act meeting in place of a Regular Town Brown Act meeting.

The Town shall compensate KCAT for meetings exceeding the regular 60 Town Brown Act meetings or Special Meetings designated by the Town Manager at $1,000 per meeting.

This price includes $800 for cablecasting services and $200 for livestreaming services. Any such meeting above 60 shall be approved in writing by the Town Manager.

The Town will provide written notice to KCAT for additional meetings or cancellations as far in advance as is possible under the circumstances. The Town shall compensate KCAT a $235 flat fee for the cancelation of any meeting other than the 60 meetings.

KCAT will provide to the Town at no cost, two (2) recordings of all meetings covered by this Agreement on broadcast quality DVD. Recordings of meetings shall be given to the Town for its records. Any additional recording requests by the Town shall be paid a $20 per DVD duplication for meetings under two hours and $30 per DVD for meetings over three hours.

At the Town’s written request, KCAT will transfer any specified archived meeting recordings (years 2015 – 2018) to the Town-branded YouTube channel for a fee of $20 per meeting transfer/upload.

The base compensation amount shall be adjusted annually each year beginning July 1, 2021, and will be determined by multiplying the percentage change in the Consumer Price Index for the San Francisco Bay Area, California, USA, as determined by the United States Department of Labor. Any CPI adjustment will be annually calculated on each April 1 to DocuSign Envelope ID: B2E48873-8602-4F61-95EE-5BD0590E0B66 DocuSign Envelope ID: 76D1CBB9-AC64-4CD9-8BDB-8F161EE3C15F

Page 499 ends

ITEM NO. 19.

Agreement for Services with KCAT 2020/21 – 2024/25 Page 6 of 12 take effect July 1. The index used shall be the index for the most recent full twelve-month period for which the index is available. Any CPI adjustment can be a decrease as well as an increase based on the above-mentioned index used, not to exceed +/- 3% per year.

7.2 Public Access Funding. Town agrees to pay forward to KCAT any PEG funds within fifteen (15) days of receipt by Town. Said funds are to be used for public access television services in Town, provided the expenditure of PEG funds so received shall be made in strict compliance with the law relative to PEG funding, as it may be amended from time to time.

Notwithstanding the obligation to pay forward PEG funds to KCAT, Town shall at all times retain a PEG funds balance received by Town in the amount of $50,000 and said funds shall be placed in an equipment reserve account. These funds will be made available, as approved by the Town, for major maintenance, replacement or upgrading of the cablecast and related technology resources in the Town Council chambers. When money in the equipment reserve account is spent, it will be replenished by the Town depositing 10% of the PEG funding received until the $50,000 is reached.

7.3 Invoices. KCAT shall submit to the Town by the 15th of each month an invoice for the services provided during the previous month. Said invoice shall indicate at a minimum the work performed during the month and the monthly fee. Recorded meetings for the month invoiced shall be submitted to the Town prior to payment of the invoice. All invoices and statements to the Town shall be addressed as follows (email is the preferable method of delivery):

Invoices:

By email to: [email protected] or
Town of Los Gatos
Attn: Accounts Payable
P.O. Box 655
Los Gatos, CA 95031-0655

7.4 Payments. The Town shall pay monthly within twenty (20) days after receipt of a complete and accurate invoice and submission of the required number of recorded copies for Town meetings.

The Town reserves the right to withhold payment either wholly or partially if said electronically recorded audio/visual meeting content is not provided or if KCAT fails to provide on a consistent basis sufficient qualified personnel for video production activities.

VIII. INDEMNIFICATION, INSURANCE AND BOND

8.1 Indemnification. KCAT shall indemnify and hold harmless the Town and its officers, officials, employees and volunteers from and against all claims, damages, losses and DocuSign Envelope ID: B2E48873-8602-4F61-95EE-5BD0590E0B66 DocuSign Envelope ID: 76D1CBB9-AC64-4CD9-8BDB-8F161EE3C15F

Page 500 ends

ITEM NO. 19.

Agreement for Services with KCAT 2020/21 – 2024/25 Page 7 of 12 expenses including attorney’s fees and litigation expenses arising out of the performance of the work described herein, caused in whole or in part by any negligent act or omission of KCAT or anyone directly or indirectly employed by KCAT, except where caused by the active negligence, sole negligence, or willful misconduct of the Town. KCAT’s duty to indemnify and defend shall survive the expiration or earlier termination of the Agreement.

8.2 Insurance. Town requirements and such other insurance as required by law and to protect against loss from liability imposed by law for damages on account of bodily injury and property damage. The insurance shall name on the policy, as additional insured, the Town of Los Gatos, its officers, employees and agents. Insurance coverage with a minimum combined single limit in an amount established by the Town Attorney which must be maintained for the duration of this Agreement and the insurance company must provide the Town with thirty (30) days' written notice of cancellation of the policy. Coverage provisions, including limits, shall otherwise be in accordance with Town policy.

Lack of insurance does not negate the KCAT’s obligation under this Agreement. KCAT agrees that in the event of loss due to any of the perils for which it has agreed to provide insurance, KCAT shall look solely to its insurance for recovery, except where caused by the active negligence, sole negligence, or willful misconduct of the Town. KCAT hereby grants to the Town, on behalf of any insurer providing insurance to either KCAT or Town with respect to the services of KCAT herein, a waiver of any right to subrogation which any such insurer of said KCAT may acquire against the Town by virtue of the payment of any loss under such insurance.

Insurance shall be secured and approved by the Town Attorney prior to commencement of work according to this Agreement.

Maintenance of proper insurance coverage is a material element of this Agreement and failure to maintain or renew coverage or to provide evidence of coverage and/or renewal may be treated by the Town as a material breach of Agreement. KCAT shall forward the Town specifications and forms to KCAT for compliance.

IX. DEFAULTS AND REMEDIES

9.1 Events of Default. All provisions of this Agreement to be performed by KCAT are considered material. Each of the following shall constitute an event of default.

A. Fraud or Deceit. If KCAT practices, or attempts to practice, any fraud or deceit upon the Town.

B. Insolvency or Bankruptcy. If KCAT shall at any time during the term of this Agreement become insolvent, or if proceedings in bankruptcy shall be instituted by or against KCAT, or if KCAT shall be adjudged bankrupt or insolvent by any court, or if a receiver or trustee in bankruptcy or a receiver of any property of KCAT shall be appointed in any suit or proceeding brought by or against KCAT, or if KCAT shall DocuSign Envelope ID: B2E48873-8602-4F61-95EE-5BD0590E0B66 DocuSign Envelope ID: 76D1CBB9-AC64-4CD9-8BDB-8F161EE3C15F

Page 501 ends

ITEM NO. 19.

Agreement for Services with KCAT 2020/21 – 2024/25 Page 8 of 12 make an assignment for the benefit of creditors, then and in each and every such case, TOWN may at its sole discretion immediately terminate this Agreement upon written notice to KCAT and without the necessity of suit or other proceeding and avail itself of any of the various remedies set forth in Article 9.10 herein below or any other remedies provided by law. KCAT shall provide written notice to Town in a timely manner in the event KCAT files for bankruptcy or takes any other action as protection from creditors during the term of this Agreement.

C. Failure to Maintain Coverage. If KCAT fails to provide or maintain in full force and effect the insurance or performance surety requirements pursuant to Article 8.

D. Failure to Perform. If KCAT ceases to provide video production services as required under this Agreement for a period of two (2) meetings, for any reason within the control of KCAT.

E. Failure to Provide Recorded Meetings/Records. If KCAT fails to provide the required number of copies for each Town meeting recorded under this agreement and/or refuses to provide the Town with required information and/or records in a timely manner as provided for in the Agreement.

F. Acts or Omissions. Any other act or omission by KCAT which violates the terms, conditions, or requirements of this Agreement as it may be amended from time to time, or any order, directive, rule, or regulation issued thereunder and which is not corrected or remedied within the time set in the written notice of violation or, if KCAT cannot reasonably correct or remedy the breach within the time set forth in such notice, if KCAT should fail to commence to correct or remedy such violation within the time set forth in such notice and diligently effect such correction or remedy thereafter.

G. False or Misleading Statements. Any representation or disclosure made to the Town by KCAT in connection with or as an inducement to entering into this Agreement, or any future amendment to this Agreement, which proved to be false or misleading in any material respect as of the time such representation or disclosure is made, whether or not any such representation or disclosure appears as part of this Agreement.

9.2 Breach and Termination. All terms and conditions of this Agreement are material and binding, and failure by KCAT to perform any portion of the work described herein or any related covenants or agreements shall be considered a breach of this Agreement. In the event this Agreement is breached in any manner, Town may at its sole option terminate this Agreement no less than twenty (20) days after written notice is given to KCAT setting forth the breach and KCAT fails, neglects, or refuses to remedy said breach. KCAT shall thereafter have no further rights, powers, or privileges against Town under or arising out of this Agreement. In the event a breach does not result in termination, but does result in costs being incurred by Town, said costs shall be deducted from any amounts due or to become due to KCAT.

In addition to all other remedies and damages provided by law in the event of a breach of this Agreement, Town may, at its sole discretion, assess the actual damage caused by the DocuSign Envelope ID: B2E48873-8602-4F61-95EE-5BD0590E0B66 DocuSign Envelope ID: 76D1CBB9-AC64-4CD9-8BDB-8F161EE3C15F

Page 502 ends

ITEM NO. 19.

Agreement for Services with KCAT 2020/21 – 2024/25 Page 9 of 12 breach as the remedy and obtain said remedy through set-off against KCAT's invoice or by any other appropriate procedure, including but not limited to wholly or partially withholding payment of any amounts billed to Town by KCAT. Town may also provide, directly or through a contract, the services required under this Agreement and deduct actual costs to Town from any amounts due or to become due to KCAT, including but not limited to start-up costs, labor, material, and equipment. The provisions of this Article shall not be exclusive, but shall be cumulative and in addition to any other remedies provided herein or pursuant to law.

In the event Town terminates this Agreement as provided herein, KCAT shall meet all terms and conditions of this Agreement through the effective date of said termination. In the event there is a transition to a different KCAT, KCAT shall cooperate with Town and any successor KCAT the Town may select to provide the services required herein. In the event KCAT fails to comply with the conditions of this paragraph, Town may withhold any compensation due KCAT until KCAT complies.

X. GENERAL PROVISIONS

10.1 Relationship of Parties. KCAT shall be an independent contractor and not an agent or employee of TOWN. KCAT shall not represent that KCAT is an agent or employee of Town.

KCAT shall not give any person any reason to believe KCAT is an agent or employee of Town. No act of KCAT shall bind or obligate Town.

KCAT assumes full and sole responsibility for the payment of all compensation and all other expenses related to KCAT's personnel, including but not limited to state and federal income taxes, Social Security contributions, workers compensation, and disability and unemployment insurance contributions. KCAT shall be responsible for the payment of all required state and federal taxes. KCAT agrees Town shall not be requested or obligated to withhold from payments to KCAT Social Security contributions or state and federal income taxes.

KCAT and KCAT's employees shall not be entitled to any employment benefits provided by the Town to Town employees. In the event KCAT provides similar benefits to KCAT's employees, KCAT shall be fully responsible for purchasing said benefits separately and independently of the relationship established between Town and KCAT under this Agreement.

10.2 Governing Law. This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of California.

10.3 No Self Dealing. Due in-part to the public funding provided in this Agreement, no KCAT Board Member may be financially interested in any contract, expenditure, purchase, or grant made by KCAT. KCAT employees are likewise excluded from any financial interest in DocuSign Envelope ID: B2E48873-8602-4F61-95EE-5BD0590E0B66 DocuSign Envelope ID: 76D1CBB9-AC64-4CD9-8BDB-8F161EE3C15F

Page 503 ends

ITEM NO. 19.

Agreement for Services with KCAT 2020/21 – 2024/25 Page 10 of 12 any contract, expenditure, purchase, or grant by or from KCAT. For the purpose of this section, financial interest shall be determined pursuant to Government Code 1090, et. seq.

10.4 Project Manager. The Project Manager for KCAT for the work under this Agreement shall be Melissa Toren, KCAT-TV Executive Director, or an appropriate KCAT-TV Board designee.

Town shall designate a Town staff member to serve as a liaison to the Board and who will serve as an ex-officio board member. The ex-officio board member shall be entitled to, but not required to attend all meetings of the Board and be permitted to participate in all discussions, but not vote. The ex-officio member shall receive advance written notice of all meetings of the board.

10.5 Assignability and Subcontracting. The services to be performed under this Agreement are unique and personal to KCAT. No portion of these services shall be assigned or subcontracted without the written consent of the Town.

10.6 Transition to Next Contractor. If the transition of services to another Contractor occurs through expiration of term, default and termination, or otherwise, KCAT will cooperate with TOWN and subsequent Contractor(s) to assist in an orderly transition.

10.7 Reservation of Rights. It is hereby expressly agreed by and between the parties hereto that Town shall have, and there is hereby reserved unto Town and to its officers and officials, all rights, powers, and privileges which might be expressly set out in this Agreement in favor of Town and its officers. The express mention of certain rights, powers, and privileges in favor of Town is not intended to and shall not be deemed or construed to exclude any other right, power, or privilege in favor of Town that might be expressly reserved herein.

10.8 Non-Waiver. No acquiescence, failure, or neglect of either party to insist upon strict performance of any or all of the provisions of this Agreement shall be construed to constitute a waiver of any term, condition, or provision of this Agreement nor of any performance required hereunder, nor of any remedy, damages, or other liability arising as a result of any failure of performance, neglect, or inability to perform at any time.

10.9 Severability. If any term or provision of this Agreement shall to any extent be determined by a court of competent jurisdiction to be invalid or unenforceable, the remainder of this Agreement shall not be affected thereby, and each term and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law.

10.10 Survival. Upon the expiration or termination of this Agreement, each party shall be released from all obligations and liabilities to the other occurring or arising after the date of such expiration or termination, except that any expiration or termination of this Agreement shall not relieve KCAT of KCAT's obligations under Articles 8.1, nor shall any such expiration or termination relieve KCAT from any liability arising from any breach of this Agreement.

DocuSign Envelope ID: B2E48873-8602-4F61-95EE-5BD0590E0B66 DocuSign Envelope ID: 76D1CBB9-AC64-4CD9-8BDB-8F161EE3C15F

Page 504 ends

ITEM NO. 19.

Agreement for Services with KCAT 2020/21 – 2024/25 Page 11 of 12

10.11 Waiver of Performance. The parties to this Agreement shall be excused from performance hereunder during the time and to the extent that they are prevented from performing their respective responsibilities by an act of God, fire, strike, lockout, or commandeering of materials, products, plants, or facilities by the state or federal government, when satisfactory evidence therefore is presented to the other party, provided that it is satisfactorily established that the non-performance is not due to the fault or neglect of the party not performing.

10.12 Governing Law. This Agreement, regardless of where executed, shall be governed by and construed to the laws of the State of California. Venue for any action regarding this Agreement shall be in the Superior Court of the County of Santa Clara.

10.13 Disputes. In any dispute over any aspect of this Agreement, the prevailing party shall be entitled to reasonable attorney's fees, including costs of appeal.

10.14 Entire Agreement and Notice. This Agreement, together with the Exhibits attached hereto and incorporated herein by reference, contains the full, complete, and entire agreement between the parties and replaces and supersedes all previous agreements, understandings, and arrangements between the parties with respect to the subject matter hereto. This Agreement may not be modified except by written agreement expressly authorized by TOWN and as mutually agreed by the parties. All notices hereunder and communications with respect to this Agreement shall be in writing and shall be effective upon the mailing thereof by registered or certified mail, return receipt requested, and postage prepaid as follows:

To Town:

Town of Los Gatos
Town Manager
110 E. Main Street
Los Gatos, CA 95030
To KCAT:

KCAT-TV Station Manager
20 High School Court
Los Gatos, CA 95030
or personally delivered to KCAT to such address or such other address as KCAT designates in writing to Town.

DocuSign Envelope ID: B2E48873-8602-4F61-95EE-5BD0590E0B66 DocuSign Envelope ID: 76D1CBB9-AC64-4CD9-8BDB-8F161EE3C15F

Page 505 ends

ITEM NO. 19.

Agreement for Services with KCAT 2020/21 – 2024/25 Page 12 of 12 IN WITNESS WHEREOF, the Town and Consultant have executed this Agreement.

Town of Los Gatos by:

Laurel Prevetti, Town Manager

KCAT, by:

Printed Name and Title
Approved as to Form:

Robert Schultz, Town Attorney
Attest:

Shelley Neis, MMC, CPMC
Town Clerk
DocuSign Envelope ID: B2E48873-8602-4F61-95EE-5BD0590E0B66 Melissa Toren Executive Director
DocuSign Envelope ID: 76D1CBB9-AC64-4CD9-8BDB-8F161EE3C15F

Page 506 ends

ITEM NO. 19.

KCAT First Amendment to Agreement 20.143

FIRST AMENDMENT TO AGREEMENT
This FIRST AMENDMENT TO AGREEMENT is dated for identification this ____ day of April, 2021 and amends that certain Agreement for Public Access Funding, Cablecasting, and Livestreaming Services dated September 1, 2020, made by and between the Town of Los Gatos ("Town"), and KCAT-TV, a non-profit public access television station (“KCAT”).

RECITALS
A. Town and KCAT entered into an Agreement for Public Access Funding, Cablecasting, and Livestreaming Services on September 1, 2020 (“Agreement”), a copy of which is attached hereto and incorporated by reference as Attachment 1 to this Amendment.

FIRST AMENDMENT

1. Agreement 20.143 for Public Access Funding and Cablecasting Services is amended to include the following:

At the Town’s written request, KCAT will transfer any specified archived meeting recordings to the Town-branded YouTube channel for a fee of $20 per meeting transfer/upload.

KCAT will transfer 177 additional Town Council and Planning Commission meetings from previous fiscal years 2011/12 through 2014/15 for a total cost of $3,540 to be completed during fiscal year(s) 2020/21 and/or 2021/22.

2. All other terms and conditions of the Agreement remain in full force and effect.

IN WITNESS WHEREOF, the Town and KCAT have executed this Amendment.

Town of Los Gatos, by: KCAT-TV., by:
______________________________ ______________________________ Laurel Prevetti, Town Manager Melissa Toren, Station Manager Approved as to Form:
______________________________
Robert Schultz, Town Attorney
Attest:
______________________________
Shelley Neis, MMC, CPMC
Town Clerk
DocuSign Envelope ID: 76D1CBB9-AC64-4CD9-8BDB-8F161EE3C15F 23 4/23/2021
5/3/2021
5/3/2021
5/3/2021

Page 507 ends

ITEM NO. 19.

ATTACHMENT 2
Agreement for Services with KCAT 2025 - 2030 Page 1 of 13

AGREEMENT FOR PUBLIC ACCESS FUNDING, CABLECASTING, AND LIVESTREAMING

SERVICES
THIS AGREEMENT is made and entered into on July 1, 2025, by and between TOWN OF LOS GATOS, a California municipal corporation, (“Town”) and Los Gatos Public Media, inc., a California Nonprofit Corporation that operates KCAT-TV (“KCAT”), whose address is 20 High School Court, Los Gatos, CA 95030. This Agreement is made with reference to the following facts.

I. RECITALS

1.3 The Agreement will serve as a contract with the Town to pay for KCAT services rendered to cablecast and livestream Town Brown Act meetings.

1.4 The parties to this Agreement replace and supersede all previous agreements between the parties related to public access television.

II. REPRESENTATIONS AND WARRANTIES OF KCAT

2.3 Equal Employment Opportunity. KCAT warrants that it is an equal opportunity employer and shall comply with applicable regulations governing equal opportunity employment.

Page 508 ends

ITEM NO. 19.

ATTACHMENT 2
Agreement for Services with KCAT 2025 - 2030 Page 2 of 13

2.4 Compliance with Laws and Regulations. KCAT shall comply with all existing and future Town, County, State, and Federal Laws, including all environmental laws.

III. TERM OF AGREEMENT

3.1 Term of Agreement. The effective date of this Agreement shall be July 1, 2025. The term of this agreement shall be for a period of five years, commencing on July 1, 2025 and expiring at midnight on June 30, 2030.

IV. SCOPE OF AGREEMENT

4.2 Administration of Agreement. The Town Manager, and/or their designee, shall administer this Agreement and supervise KCAT compliance with the Agreement terms and conditions.

4.3 Ownership of Video Recorded Town Brown Act Meetings, Town-branded YouTube Channel, and Council Chambers Equipment. All Town Brown Act meetings video recorded and live streamed by KCAT pursuant to this Agreement shall be property of the Town.

The Town-branded YouTube channel referenced in this Agreement shall be property of the Town. Town staff shall be provided access and shall maintain access to the Town-branded YouTube channel in perpetuity.

Page 509 ends

ITEM NO. 19.

ATTACHMENT 2
Agreement for Services with KCAT 2025 - 2030 Page 3 of 13 All equipment located in the Council Chambers/lobby used to video record, cablecast, and livestream Town meetings pursuant to this Agreement shall remain on Town property for the Town’s public broadcasting use.

V. DIRECT SERVICES

As additional backup, KCAT will provide both in-person training and written standard operating procedures to Town staff regarding how to use all relevant equipment.

Page 510 ends

ITEM NO. 19.

ATTACHMENT 2
Agreement for Services with KCAT 2025 - 2030 Page 4 of 13 standards. KCAT will provide initial system checks, 60 (sixty) minutes prior to scheduled meetings to ensure that the video and sound production equipment is performing per specifications.

KCAT and Town staff will work together to maintain an Equipment Inventory List and Maintenance and Replacement Plan for all equipment on the list. KCAT and Town staff will work together to update the Equipment Inventory List and Maintenance and Replacement Plan on an annual basis by March 1 of every year.

KCAT and Town staff will work together to determine which new and/or replacement equipment to purchase. All purchases of equipment covered in this Agreement made by KCAT must be approved in writing by the Town prior to the purchase being made. In the event an emergency purchase is needed, KCAT may proceed with the purchase and seek approval from the Town after the fact. Purchases under $50 are exempt from requiring Town approval.

KCAT shall not use the Town’s video broadcasting equipment for any other purpose other than this Agreement, unless written consent is given by the Town. Cablecasting and broadcasting equipment shall be operated at all times by the technical and temporary staff covered in this Agreement.

KCAT will provide gavel to gavel meeting coverage and is responsible for securing the video production equipment room after cablecasting, tape duplication, or other activities.

5.4 Livestreaming. KCAT’s livestreaming services include streaming the live video to the Town of Los Gatos branded YouTube page and video conferencing platform during the meeting, archiving the meeting recordings on the YouTube channel for viewing later, on-call engineering services to support technical issues, YouTube channel organization and management, and providing an mpg4 file to Town staff the day after the meeting occurs.

VI. OTHER SERVICES

6.1 Playback. KCAT will air previously recorded meetings covered by this agreement on its Community Access Channel (Channel 15/ KCAT) based on its program/schedule availability.

6.2 Special Events. KCAT will work cooperatively with Town staff regarding the live cablecast of any additional special events at a mutually agreed upon price, date, and time.

Page 511 ends

ITEM NO. 19.

ATTACHMENT 2
Agreement for Services with KCAT 2025 - 2030 Page 5 of 13

6.4 Records. KCAT shall maintain a general ledger and detailed books of account showing the receipt and expenditure of all funds received from Town for not less than five (5) years following completion of the work, the receipt of funds and the expenditure of funds under this Agreement. KCAT shall make these records available to authorized personnel of the Town, an independent auditor, or other authorized party at KCAT's offices during business hours upon written request.

On or before March 1st of each year, beginning with March 1, 2026, KCAT shall submit to the Town the signed affidavit in Exhibit A to this Agreement confirming that all Public, Educational, and Governmental (PEG) Funds received from the Town were used in compliance with all applicable laws and regulations as they may be amended from time to time.

6.5 Adjustments to Level of Video Production Services. The Town has the right to request additional video production services. Compensation for any additional video production service shall be pursuant to Article 7.1. Similarly, the Town has the right to reduce video production services in the event of budgetary reductions. Any reduction in compensation paid by the Town would be negotiated and agreed upon by both parties.

VII. KCAT’S COMPENSATION

7.1 Compensation. The Town shall compensate KCAT in the amount of $63,000 per year or $5,250 per month for sixty (60) regular Town Brown Act meetings. This price includes cablecasting services and live streaming services. This price includes set-up, testing, meeting time, transfer time, upload time, data storage fees, television programming, and site management. No overtime will be applicable. The Town Manager, or their designee, shall have the authority to designate a Special Town Brown Act meeting in place of a Regular Town Brown Act meeting.

The Town shall compensate KCAT for meetings exceeding the regular 60 Town Brown Act meetings or Special Meetings designated by the Town Manager at $1,000 per meeting.

This price includes $800 for cablecasting services and $200 for livestreaming services. Any

Page 512 ends

ITEM NO. 19.

ATTACHMENT 2
Agreement for Services with KCAT 2025 - 2030 Page 6 of 13 such meeting above 60 shall be approved in writing by the Town Manager or their designee.

KCAT will provide to the Town at no cost, a copy of each recording of all meetings covered by this Agreement in a format approved by the Town. Recordings of meetings shall be provided to the Town for its records.

At the Town’s written request, KCAT will transfer any specified archived meeting recordings to the Town-branded YouTube channel for a fee of $20 per meeting transfer/upload.

7.2 Public, Educational, and Governmental (PEG) Funds. Town agrees to pay forward to KCAT any PEG funds within fifteen (15) days of receipt by Town. Said funds are to be used for public access television services in Town, provided the expenditure of PEG funds so received shall be made in strict compliance with the law relative to PEG funding, as it may be amended from time to time. Notwithstanding the obligation to pay forward PEG funds to KCAT, the Town shall at all times retain a PEG funds balance received by Town in the amount of $50,000 and said funds shall be placed in an equipment reserve account. These funds will be made available, as approved by the Town, for major maintenance, replacement or upgrading of the cablecast and related technology resources in the Town Council chambers. When money in the equipment reserve account is spent, it will be replenished by the Town depositing 10% of the PEG funding received until the $50,000 is reached.

Notwithstanding the obligation to pay forward PEG funds to KCAT, if additional funding related to equipment is required on an urgent or emergency basis, the Town will retain sufficient PEG funds to cover the purchase(s).

Invoices:

By email to: [email protected] or
Town of Los Gatos
Attn: Accounts Payable
P.O. Box 655

Page 513 ends

ITEM NO. 19.

Agreement for Services with KCAT 2025 - 2030 Page 7 of 13 Los Gatos, CA 95031-0655

7.4 Payments. The Town shall pay monthly within twenty (20) days after receipt of a complete and accurate invoice and submission of the recorded copies for Town meetings. An invoice will not be considered complete if services on the invoice have not yet been rendered.

VIII. INDEMNIFICATION AND INSURANCE

8.1 Indemnification. KCAT shall indemnify the Town its elected and appointed officials, employees and volunteers from all damages, liabilities, penalties, costs, or expenses in law or equity that may at any time arise or be set up because of damages to property or personal injury received by reason of, or in the course of performing work which may be occasioned by any act or omissions of KCAT, or any of KCAT’s officers, employees, or agents or any subconsultant. KCAT shall defend the Town against any such claims.

8.2 Minimum Scope of Insurance.
i. KCAT agrees to have and maintain, for the duration of the contract, General Liability insurance policies insuring him/her and his/her firm to an amount not less than: two million dollars ($2,000,000) combined single limit per occurrence for bodily injury, personal injury and property damage. ii. KCAT agrees to have and maintain for the duration of the contract, an Automobile Liability insurance policy ensuring him/her and his/her staff to an amount not less than one million dollars ($1,000,000) combined single limit per accident for bodily injury and property damage. iii. KCAT shall provide to the Town all certificates of insurance, with original endorsements effecting coverage. KCAT agrees that all certificates and endorsements are to be received and approved by the Town before work commences.
iv. KCAT agrees to have and maintain, for the duration of the contract, professional liability insurance in amounts not less than $1,000,000 which is sufficient to insure KCAT for professional errors or omissions in the performance of the particular scope of work under this agreement.

General Liability:

Page 514 ends

ITEM NO. 19.

Agreement for Services with KCAT 2025 - 2030 Page 8 of 13 i. The Town, its officers, officials, employees and volunteers are to be covered as insured as respects: liability arising out of activities performed by or on behalf of the KCAT; products and completed operations of KCAT, premises owned or used by the KCAT. This requirement does not apply to the professional liability insurance required for professional errors and omissions.
ii. KCAT's insurance coverage shall be primary insurance as respects the Town, its officers, officials, employees and volunteers. Any insurance or selfinsurances maintained by the Town, its officers, officials, employees or volunteers shall be excess of the KCAT's insurance and shall not contribute with it.
iii. Any failure to comply with reporting provisions of the policies shall not affect coverage provided to the Town, its officers, officials, employees or volunteers.
iv. KCAT's insurance shall apply separately to each insured against whom a claim is made, or suit is brought, except with respect to the limits of the insurer's liability.

8.3 All Coverages. Each insurance policy required in this item shall be endorsed to state that coverage shall not be suspended, voided, cancelled, reduced in coverage or in limits except after thirty (30) days' prior written notice by certified mail, return receipt requested, has been given to the Town. Current certification of such insurance shall be kept on file at all times during the term of this agreement with the Town Clerk.

8.4 Workers’ Compensation. In addition to these policies, KCAT shall have and maintain Workers' Compensation insurance as required by California law and shall provide evidence of such policy to the Town before beginning services under this Agreement. Further, KCAT shall ensure that all subcontractors employed by KCAT provide the required Workers' Compensation insurance for their respective employees.

IX. DEFAULTS AND REMEDIES

9.1 Events of Default. All provisions of this Agreement to be performed by KCAT are considered material. Each of the following shall constitute an event of default.

A. Fraud or Deceit. If KCAT practices, or attempts to practice, any fraud or deceit upon the Town.

Page 515 ends

ITEM NO. 19.

Agreement for Services with KCAT 2025 - 2030 Page 9 of 13 appointed in any suit or proceeding brought by or against KCAT, or if KCAT shall make an assignment for the benefit of creditors, then and in each and every such case, TOWN may at its sole discretion immediately terminate this Agreement upon written notice to KCAT and without the necessity of suit or other proceeding and avail itself of any of the various remedies set forth in Article 9.10 herein below or any other remedies provided by law. KCAT shall provide written notice to Town in a timely manner in the event KCAT files for bankruptcy or takes any other action as protection from creditors during the term of this Agreement.

C. Failure to Maintain Coverage. If KCAT fails to provide or maintain in full force and effect the insurance or performance surety requirements pursuant to Article 8.

D. Failure to Perform. If KCAT ceases to provide video production services as required under this Agreement for a period of two (2) meetings, for any reason within the control of KCAT.

E. Failure to Provide Recorded Meetings/Records/Access/Training. If KCAT fails to provide the required number of copies for each Town meeting recorded under this agreement and/or refuses to provide the Town with required information and/or refuses to provide ongoing access to the Town-branded YouTube channel and/or refuses to provide both in-person training and written standard operating procedures for all relevant equipment as provided for in the Agreement.

Page 516 ends

ITEM NO. 19.

Agreement for Services with KCAT 2025 - 2030 Page 10 of 13 In addition to all other remedies and damages provided by law in the event of a breach of this Agreement, Town may, at its sole discretion, assess the actual damage caused by the breach as the remedy and obtain said remedy through set-off against KCAT's invoice or by any other appropriate procedure, including but not limited to wholly or partially withholding payment of any amounts billed to Town by KCAT. Town may also provide, directly or through a contract, the services required under this Agreement and deduct actual costs to Town from any amounts due or to become due to KCAT, including but not limited to start-up costs, labor, material, and equipment. The provisions of this Article shall not be exclusive but shall be cumulative and in addition to any other remedies provided herein or pursuant to law.

9.3 Early Termination. The Town may terminate this agreement at any time upon six months written notice to KCAT.

9.4 Obligations Upon Termination. In the event Town terminates this Agreement as provided herein, KCAT shall meet all terms and conditions of this Agreement through the effective date of said termination. In the event there is a transition to a different cablecasting or livestreaming Contractor or to Town staff, KCAT shall cooperate with Town staff and/or any successor Contractor the Town may select to provide the services required herein. In the event KCAT fails to comply with the conditions of this paragraph, Town may withhold any compensation due KCAT until KCAT complies.

X. GENERAL PROVISIONS

10.1 Relationship of Parties. KCAT shall be an independent contractor and not an agent or employee of the Town. KCAT shall not represent that KCAT is an agent or employee of Town. KCAT shall not give any person any reason to believe KCAT is an agent or employee of Town. No act of KCAT shall bind or obligate Town.

KCAT assumes full and sole responsibility for the payment of all compensation and all other expenses related to KCAT's personnel, including but not limited to State and Federal income taxes, Social Security contributions, workers compensation, and disability and unemployment insurance contributions. KCAT shall be responsible for the payment of all required State and Federal taxes. KCAT agrees Town shall not be requested or obligated to withhold from payments to KCAT Social Security contributions or State and Federal income taxes.

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ITEM NO. 19.

Agreement for Services with KCAT 2025 - 2030 Page 11 of 13

10.2 No Self Dealing. Due in-part to the public funding provided in this Agreement, no KCAT Board Member may be financially interested in any contract, expenditure, purchase, or grant made by KCAT. KCAT employees are likewise excluded from any financial interest in any contract, expenditure, purchase, or grant by or from KCAT. For the purpose of this section, financial interest shall be determined pursuant to Government Code 1090, et. seq.

10.3 Project Manager. The Project Manager for KCAT for the work under this Agreement shall be Melissa Toren, KCAT-TV Executive Director, or an appropriate KCAT-TV Board designee.

10.4 Assignability and Subcontracting. The services to be performed under this Agreement are unique and personal to KCAT. No portion of these services shall be assigned or subcontracted without the written consent of the Town.

10.5 Transition to Next Contractor and/or Town staff. If the transition of services to another Contractor and/or Town staff occurs through expiration of term, default and termination, or otherwise, KCAT will cooperate with the Town and any subsequent Contractor(s) and/or Town staff to assist in an orderly transition.

10.6 Reservation of Rights. It is hereby expressly agreed by and between the parties hereto that Town shall have, and there is hereby reserved unto Town and to its officers and officials, all rights, powers, and privileges which might be expressly set out in this Agreement in favor of Town and its officers. The express mention of certain rights, powers, and privileges in favor of Town is not intended to and shall not be deemed or construed to exclude any other right, power, or privilege in favor of Town that might be expressly reserved herein.

10.7 Non-Waiver. No acquiescence, failure, or neglect of either party to insist upon strict performance of any or all of the provisions of this Agreement shall be construed to constitute a waiver of any term, condition, or provision of this Agreement nor of any performance required hereunder, nor of any remedy, damages, or other liability arising as a result of any failure of performance, neglect, or inability to perform at any time.

10.8 Severability. If any term or provision of this Agreement shall to any extent be determined by a court of competent jurisdiction to be invalid or unenforceable, the remainder of this Agreement shall not be affected thereby, and each term and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law.

10.9 Survival. Upon the expiration or termination of this Agreement, each party shall be released from all obligations and liabilities to the other occurring or arising after the date

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ITEM NO. 19.

Agreement for Services with KCAT 2025 - 2030 Page 12 of 13 of such expiration or termination, except that any expiration or termination of this Agreement shall not relieve KCAT of KCAT's obligations under Articles 8.1 and 4.3, nor shall any such expiration or termination relieve KCAT from any liability arising from any breach of this Agreement.

10.10 Waiver of Performance. The parties to this Agreement shall be excused from performance hereunder during the time and to the extent that they are prevented from performing their respective responsibilities by an act of God, fire, strike, lockout, or commandeering of materials, products, plants, or facilities by the state or federal government, when satisfactory evidence therefore is presented to the other party, provided that it is satisfactorily established that the non-performance is not due to the fault or neglect of the party not performing.

10.11 Governing Law. This Agreement, regardless of where executed, shall be governed by and construed to the laws of the State of California. Venue for any action regarding this Agreement shall be in the Superior Court of the County of Santa Clara.

10.12 Disputes. In any dispute over any aspect of this Agreement, the prevailing party shall be entitled to reasonable attorney's fees, including costs of appeal.

10.13 Entire Agreement and Notice. This Agreement, together with the Exhibits attached hereto and incorporated herein by reference, contains the full, complete, and entire agreement between the parties and replaces and supersedes all previous agreements, understandings, and arrangements between the parties with respect to the subject matter hereto. This Agreement may not be modified except by written agreement expressly authorized by the Town and as mutually agreed by the parties. All notices hereunder and communications with respect to this Agreement shall be in writing and shall be effective upon the mailing thereof by registered or certified mail, return receipt requested, and postage prepaid as follows:

To Town:

Town of Los Gatos
Town Manager
110 E. Main Street
Los Gatos, CA 95030
To KCAT:

KCAT-TV Station Manager
20 High School Court
Los Gatos, CA 95030
or personally delivered to KCAT to such address or such other address as KCAT designates in writing to Town.

IN WITNESS WHEREOF, the Town and KCAT have executed this Agreement.

Page 519 ends

ITEM NO. 19.

Agreement for Services with KCAT 2025 - 2030 Page 13 of 13 Town of Los Gatos by:

Chris Constantin, Town Manager

KCAT, by:

Printed Name and Title
Approved as to Form:

Gabrielle Whelan, Town Attorney
Attest:

Wendy Wood, CMC, Town Clerk

Page 520 ends

ITEM NO. 19.

PREPARED BY: Katy Nomura
Assistant Town Manager
Reviewed by: Town Manager, Town Attorney, and Finance Director 110 E. Main Street Los Gatos, CA 95030 ● (408) 354-6832 www.losgatosca.gov

TOWN OF LOS GATOS

COUNCIL AGENDA REPORT
MEETING DATE: 06/17/2025
ITEM NO: 20
DATE: June 6, 2025
TO: Mayor and Town Council
FROM: Chris Constantin, Town Manager
SUBJECT: Authorize the Town Manager to Negotiate and Execute a First Amendment to the Adult Recreation Center Lease and a Third Amendment to the Youth Recreation Center Lease with Los Gatos Saratoga Recreation RECOMMENDATION:

Authorize the Town Manager to negotiate and execute a First Amendment to the Adult Recreation Center (208 East Main Street) Lease and a Third Amendment to the Youth Recreation Center (123 East Main Street) Lease with Los Gatos Saratoga Recreation (LGSR), in substantially the form presented.

FISCAL IMPACT:

Under the current lease arrangement, LGSR pays the Town approximately $250,000 annually to rent the Adult Recreation Center (ARC). When considering market price rent along with other factors, this represents approximately a $290,000 annual subsidy from the Town. The ARC lease amendment includes $100,000 in reduced rent annually for the next three years unless the fiscal situation of LGSR improves to reduce the need. This would result in potentially a total of $300,000 in reduced lease revenue that the Town would receive. While reducing rent results in lower revenue, staff believe it is important to ensure the continuity of the services provided at the Adult Recreation Center, including the 55+ Program which aligns with the Town’s priority of meeting the needs of older adults. Staff will be working with LGSR to right-size the 55+ Program so that it is more fiscally sustainable and once this occurs, the reduced rent will cease and the lease will revert to full rent.

STRATEGIC PRIORITIES:

These lease amendments support the Town’s core goal of Civic Engagement and the strategic priority to engage community service providers to meet the needs of older adults.

Page 521 ends

ITEM NO. 20.

PAGE 2 OF 3
SUBJECT: Adult Recreation Center and Youth Recreation Center Lease Agreements with Los Gatos Saratoga Recreation
DATE: June 17, 2025
BACKGROUND:

In 2004, the Town entered into an agreement to lease the Youth Recreation Center (YRC) (123 East Main Street) to LGSR to provide educational and recreational services to Los Gatos area residents. Under the current lease arrangement, LGSR pays the Town approximately $30,000 annually for the YRC. In 2007, the lease was extended through June 2010. In 2010, the lease was extended through December 2011 and reverted to a month-to-month lease after 2011.

In 2009, the Town entered into an agreement to lease the Adult Recreation Center (ARC) (208 Main Street) to LGSR to provide additional educational and recreational services to the community, including senior services. Under the current lease arrangement, LGSR pays the Town approximately $250,000 annually for the ARC. This lease is set to expire in December 2029 with options to extend for two additional periods of five years each.

In 2024, LGSR requested the opportunity to renegotiate the ARC and YRC leases, expressing that the 55+ program for seniors at the ARC was operating at a loss and a reduction in rent was necessary for them to remain fiscally viable.

DISCUSSION:

Town staff and LGSR have worked collaboratively to negotiate amendments to both the ARC and YRC leases. The key provisions of those amendments are summarized below:
 ARC
o Reduce rent by $100,000 a year for three years starting in fiscal year (FY) 2025- 26, until such a time that the 55+ program has been rightsized or LGSR’s finances have improved to reduce this need.
o LGSR and the Town will work together to revise the list of senior programs outlined in the existing lease and come to an agreement, recognizing that LGSR is the subject matter expert.
 YRC
o Extend the agreement for three years with quarterly payments instead of month-to-month.

When revising the list of senior programs to right-size the 55+ program, Town staff will seek the input of the CHSSC for Council’s consideration.

CONCLUSION:

Supporting LGSR’s fiscal viability is important in order for them to continue providing educational and recreational services, including senior services, to the community. If LGSR were no longer able to sustain these services, the community would lose a valuable resource. For

Page 522 ends

ITEM NO. 20.

PAGE 3 OF 3
SUBJECT: Adult Recreation Center and Youth Recreation Center Lease Agreements with Los Gatos Saratoga Recreation
DATE: June 17, 2025
these reasons, staff recommends that the Town Council authorize the Town Manager to negotiate and execute these lease amendments.

COORDINATION:

This report has been prepared in coordination with LGSR, the Town Attorney, and the Town Manager’s Office.

ENVIRONMENTAL ASSESSMENT:

This is not a project defined under CEQA, and no further action is required.

Attachments:

1. Draft First Amendment to the Adult Recreation Center Lease Agreement with Exhibit A

2. Draft Third Amendment to the Youth Recreation Center Lease Agreement with Exhibits A, B, and C

Page 523 ends

ITEM NO. 20.
1 of 2
First Amendment to Lease Agreement between Town and LGS Rec re: 208 E Main St. ATTACHMENT 1

FIRST AMENDMENT TO LEASE AGREEMENT FOR THE ADULT RECREATION CENTER BY AND

BETWEEN THE TOWN OF LOS GATOS AND LOS GATOS-SARATOGA COMMUNITY

EDUCATION AND RECREATION
This AMENDMENT TO AGREEMENT is dated for identification this 1st day of July, 2025 and amends that certain Lease Agreement for the Adult Recreation Center between the Town of Los Gatos and Los Gatos-Saratoga Community Education and Recreation dated January 1, 2010, made by and between the Town of Los Gatos, ("Town,") and Los GatosSaratoga Community Education and Recreation, a Joint Powers Authority (“Tenant”).

RECITALS
A. The Town and Tenant entered into a Lease Agreement for the property located at 208 East Main Street, Los Gatos (Adult Recreation Center) effective January 1, 2010, and extending through December 31, 2029 (“ARC Lease Agreement”), a copy of which is attached hereto and incorporated by reference as Exhibit A to this Amendment.

B. The Town and Tenant entered into a separate Lease Agreement and three subsequent Amendments for the property located at 123 East Main Street, Los Gatos (Youth Recreation Center) effective October 1, 2004 and extending through December 31, 2029 (“YRC Lease Agreement”).

C. Now, therefore, the parties hereto agree as follows:

AMENDMENT

1. A new Section 3.6, “Temporary Lease Abatement,” is added to the ARC Lease Agreement to read as follows: “The Town will provide Tenant a $100,000 annual lease abatement (calculated by subtracting $100,000 from the annual rent, dividing by four, and invoicing quarterly for the remaining amount) either each year for the next three Fiscal Years (FY) as follows: (FY1) July 1, 2025 – June 30, 2026, (FY2) July 1, 2026 – June 30, 2027, and (FY3) July 1, 2027 – June 30, 2028, OR until Tenant’s senior services programming becomes financially sustainable as determined by the Town Manager or their designee, OR until the Tenant’s finances have improved to reduce this need as determined by the Town Manager or their designee, whichever occurs first.

The Town and LGS Rec will meet on an annual basis in March of each year to review LGS Rec’s finances including financial statements and revenues/expenses related to senior services and other LGS Rec programs.

2. Exhibit F to the ARC Lease Agreement, “Senior Services Scope of Work,” will be revised with mutual coordination between the Town and Tenant to be more financially stable and sustainable in the long term as determined by the Town Manager and the Executive Director. The Town and Tenant will need to come to a mutual agreement regarding the revisions, recognizing Tenant as the subject matter expert.

Page 524 ends

ITEM NO. 20.
1 of 2
First Amendment to Lease Agreement between Town and LGS Rec re: 208 E Main St.

3. The first sentence of Section 3.3 of the ARC Lease Agreement is amended to read as follows: “Rent is due and payable on the first day of each and every quarter (January 1, April 1, July 1, and October 1) in accordance with procedures set forth in Section

3.4.” The remainder of Section 3.3 remains in full force and effect except as expressly modified herein.

4. The second sentence of Section 3.4 of the ARC Lease Agreement is removed.

5. A new Section 11.3, “YRC Lease Agreement,”is added to the ARC Lease Agreement to read as follows: “In the event that the ARC Lease Agreement is terminated or modified, the Town shall have the right to unilaterally terminate or modify the YRC Lease Agreement. “

6. All other terms, covenants, and conditions of the original ARC Lease Agreement remain in full force and effect except as expressly modified herein.

IN WITNESS WHEREOF, TOWN OF LOS GATOS and LOS GATOS-SARATOGA COMMUNITY EDUCATION AND RECREATION have executed this FIRST LEASE AMENDMENT.

TOWN OF LOS GATOS LOS GATOS-SARATOGA

COMMUNITY EDUCATION AND

RECREATION
______________________________ ______________________________ Chris Constantin, Town Manager
______________________________
Printed Name and Title
APPROVED AS TO FORM:
______________________________
Gabrielle Whelan, Town Attorney

Page 525 ends

ITEM NO. 20.

OLERl,e DEPPAR'
AG ` l 114
IHH• k_' I_ 2
D _

LEASE AGREEMENT
OR
BETWEEN — —

TOWN OF LOS GATOS
RESO_ -
a
AND

LOS GATOS - SARATOGA COMMUNITY EDUCATION AND RECREATION

TABLE OF CONTENTS

LEASE PROVISIONS

1. PREMISES .......................................................................................... .............................. 1

2. TERM ................................................................................................... .............................. 1

3. RENT .................................................................................................. ............................... 2

4. USE OF PREMISES .......................................................................... ............................... 3

5. HAZARDOUS MATERIALS ........................................................... ............................... 5

6. UTILITIES AND OPERATING EXPENSES ................................. ............................... 7

7. TAXES ................................................................................................. .............................. 8

8. MAINTENANCE ................................................................................ ..............................9

9. TENANT IMPROVEMENTS .......................................................... ............................. 10

10. HOLD HARMLESS/ INDEMNIFICATION ................................... ............................. 11

11. DAMAGE, DESTRUCTION AND TERMINATION .................... ............................. 11

12. SIGNS AND MARKETING . ......................................................................................... 14

13. ASSIGNMENT AND SUBLETTING .............................................. ............................. 15

14. DEFAULTS; REMEDIES ................................................................. ............................. 15

15. INTEREST ON PAST - DUE OBLIGATIONS ................................ ............................. 17

16. HOLDING OVER .............................................................................. ............................. 17

17. TOWN' S ACCESS ............................................................................ ............................. 17

18. INSURANCE .................................................................................... ............................... 18

19. EMINENT DOMAIN ........................................................................ ............................. 19

20. DISPUTE RESOLUTION .............................................................. ............................... 20

21. NON - LIABILITY OF OFFICIALS AND EMPLOYEES OF THE TOWN............ 20

22. NON - DISCRIMINATION ................................................................ ............................. 20

23. INDEPENDENT CONTRACTOR ............................................... ............................... 211

24. CONFLICT OF INTEREST ........................................................... ............................... 21 Page i of ii

EXHIBIT A

Page 526 ends

ITEM NO. 20.

25. MEMORANDUM OF LEASE ....................................................... ............................... 21

26. ESTOPPEL CERTIFICATE .......................................................... ............................... 21

27. LIENS ................................................................................................. ............................. 21

28. VACATING ........................................................................................ ............................. 21

29. NOTICES ........................................................................................... .............................22

30. TIME ................................................................................................... ............................. 22

31. AMENDMENTS ................................................................................ ............................. 22

32. SIGNING AUTHORITY ................................................................. ............................... 22

33. CAPTIONS ......................................................................................... ............................. 22

34. SURRENDER OF LEASE NOT MERGER ................................. ............................... 23

35. INTEGRATED DOCUMENT ........................................................ ............................... 23

36. WAIVER ............................................................................................. ............................. 23

37. INTERPRETATIONS ..................................................................... ............................... 23

38. SEVERABILITY CLAUSE ............................................................ ............................... 23

39. GOVERNING LAW ........................................................................ ............................... 23

40. VENUE ................................................................................................ ............................. 24

41. COMPLIANCE WITH LAWS ....................................................... ............................... 24

42. BROKERS .......................................................................................... ............................. 24

43. ATTACHMENTS TO LEASE ....................................................... ............................... 24

EXHIBITS
A. DESCRIPTION OF SUBJECT PREMISES ................................. ............................... 26 B. INVENTORY OF FIXTURES ....................................................... ............................... 27 C. STANDARD INSURANCE REQUIREMENTS ........................... ............................... 30 D. LOS GATOS NEIGHBORHOOD CENTER POLICIES AND PROCEDURES ........ 33 E. LOS GATOS NEIGHBORHOOD CENTER PUBLIC USE RENTAL FEE
SCHEDULE............................................................. ............................. 40 F. SENIOR SERVICES SCOPE OF WORK ........................ ............................. 44 Page ii of ii

Page 527 ends

ITEM NO. 20.

LEASE AGREEMENT

BETWEEN

TOWN OF LOS GATOS
AND

LOS GATOS - SARATOGA COMMUNITY EDUCATION AND RECREATION This lease agreement ( herein " Lease ") is made and entered into this day of , 20_, by and between the Town of Los Gatos, a California municipal corporation ( herein "Town ") and Los Gatos- Saratoga Community Recreation and Education, a California joint powers agency ( herein Lessee "). Town and Lessee may be referred to individually as a " Party" or collectively as the Parties" or the " Parties to this Lease." The Town Manager serves as Contract Administrator for this Lease on behalf of the Town Council.

In consideration of these recitals and the following covenants, terms, and conditions, Lessee and Town mutually agree as follows:

LEASE PROVISIONS

1. PREMISES.

Town hereby leases to Lessee, certain real property located in the Town of Los Gatos, County of Santa Clara, State of California, commonly known as 208 East Main Street ( herein the " Premises ") and more particularly described in Exhibit A attached hereto and incorporated herein by reference.

The Premises consists of approximately twelve thousand (12, 000) square feet ofmeeting rooms and office space, except for the Inventory of Fixtures set forth in Exhibit B attached hereto and incorporated herein by reference. Unless specifically provided, Lessee accepts the Premises " as -is" on the date of execution ofthis Lease. Town represents that the Premises, but without regard to the use to which Lessee will put them, will be in compliance with all applicable governmental laws, rules and regulations on the Delivery Date ( as defined below). Ifit is determined that the foregoing representation is not true, then Town, at its expense, shall take such actions as are necessary to cause the Premises to be in compliance with such governmental laws, rules and regulations.

2. TERM.

2. 1 Original Term. Unless extended or sooner terminated, the term of this Lease shall be for twenty ( 20) years, commencing on January 1, 2010 ( " Delivery Date ") and ending on December 31, 2029. Lessee shall, at the expiration of the term of this Lease, or upon its earlier termination, surrender the Premises in as good condition as it is now at the date of this lease, reasonable wear and tear and damage by age and the elements excepted.

2. 2 Option to Extend. Provided Lessee is not in default hereunder, either at the time of exercise or at the time the extended term commences, Lessee shall have the option to extend the initial term ofthis Lease for two ( 2) additional periods of five ( 5) years ( " Option Period ")

Page 528 ends

ITEM NO. 20.
with the same terms, covenants and conditions provided herein, except that upon such renewal the Base Rent due hereunder shall be adjusted pursuant to Paragraph 3. 2. Lessee' s option shall be automatically exercised without prior notice unless one ofthe parties objects to either extension in writing no less than sixty ( 60) days prior to the expiration of the then current term, in which event this Lease shall terminate at the expiration of the then current term.

2. 3 Early Termination by Town. If Town in its sole discretion determines that it requires the Premises for any public purpose, Town may terminate this Lease upon one hundred eighty ( 180) days written notice. In the event of an emergency, Town may terminate this Lease upon five ( 5) days written notice. " Emergency," for the purposes of this paragraph, is defined as when the Town Council declares a State of Emergency. Upon termination of this Lease in the event of an emergency, Town and Lessee will work cooperatively to develop a written plan for transition of services and vacation ofPremises by Lessee.

2.4 Early Termination by the Parties. Either Party may choose to terminate this Lease upon one hundred eighty ( 180) days written notice to the other Party.

3. RENT.

3. 1 Base Rent. The rent to be paid by Lessee shall be calculated via multiplication of approximate size of Premises, twelve thousand ( 12, 000) square feet, by a percentage ofthe fair market rent for the Premises ( the " FMR "). The initial FMR shall be two dollars and fifty cents ($ 2. 50) per square foot. The initial rent to be paid by Lessee shall be seven thousand five hundred dollars ($ 7, 500) per month without reduction or offset ( except as otherwise provided in this Lease), calculated using twenty -five percent ( 25 %) ofFMR. The FMR shall be updated no less than once every five ( 5) years using an appraisal methodology satisfactory to the Parties. In addition, the FMR shall be adjusted annually based on the State of California Department of Industrial Relations, Division of Labor Statistics and Research' s Consumer Price Index, All Urban Consumers, All Items, San Francisco- Oakland - San Jose, California. The index for the quarter ending just prior to this lease date is established as the base index. Percentage and adjustments to the original lease payments shall be as indicated by percentage changes in said index.

3. 2 Annual Increase. During the Term of this Lease, including the Option Periods if the options are exercised, the Base Rent shall be increased effective on each anniversary of the Delivery Date as follows: Commencing on the first anniversary of the Delivery Date, the Base Rent shall increase then and on each anniversary ofthe Delivery Date thereafter by five 5) percent ofthe FMR until the fourth anniversary ofthe Delivery Date when the Base Rent shall have increased to forty -five (45) percent of the FMR.

3. 3 Payment Date /Late Charge. Rent shall be payable in accordance with the procedures set forth in Section 3. 4 on the first day of each and every month commencing on the Delivery Date. Lessee acknowledges late payment of rent will cause Town to incur costs not contemplated by this Lease, the exact amount of such costs being extremely difficult and 2

Page 529 ends

ITEM NO. 20.
impracticable to fix. Such costs include, without limitation, processing, accounting and late charges that may be imposed on Town. Therefore, ifTown does not receive any installment of rent due from Lessee within ten ( 10) days after the date such rent is due, Lessee shall pay to Town an additional sum of five percent ( 5 %) of the overdue rent as a late charge. The parties agree this late charge represents a fair and reasonable estimate of the costs Town will incur by reason oflate payment by Lessee. Acceptance of any late charge shall not constitute a waiver of Lessee' s default with respect to the overdue amount, nor prevent Town from exercising any ofthe other rights and remedies available to Town.

3. 4 Rent Payment Procedures. Lessee' s obligation to pay rent shall commence upon the Delivery Date of this Lease. Ifthe Delivery Date occurs on a date other than the first of any month, monthly rent for the first and last month ofthis Lease shall be prorated based on a 30- day month. Rent payments shall be delivered to Town Finance Department, 110 E. Main Street, P. O. Box 655, Los Gatos, CA 95030. The designated place of payment may be changed at any time by Town upon ten ( 10) days' written notice to Lessee. Lessee specifically agrees that acceptance of any late or incorrect rentals submitted by Lessee shall not constitute an acquiescence or waiver by Town and shall notprevent Town from enforcing Section 3. 3 ( Late Charge) or any other remedy provided in this Lease. Acceptance of rent shall not constitute approval of any unauthorized sublease or use, nor constitute a waiver of any non - monetary breach. Payments shall be effective upon receipt. Town may apply any payment received from Lessee at any time against any obligation due and owing by Lessee under this Lease, regardless of any statement appearing on or referred to in any remittance from Lessee or any prior application of such payments.

3. 5 Partial Payment. The receipt by Town of a partial payment of any amount due to Town endorsed as payment in full will be deemed to be a partial payment only. Town may accept and deposit said check without prejudice to its right to recover the balance. ' Any endorsements or statements on the check or any letter accompanying the check shall not be deemed an accord and /or satisfaction. Lessee' s obligation (without prior notice or demands) to pay rent and all other amounts due hereunder shall be absolute and unconditional, and not subject to any abatement, set off, defense, recoupment or reduction.

4. USE OF PREMISES.

4. 1 Required Uses. Throughout the term of this Lease, Lessee shall provide the following uses, services and activities ( " Required Uses "):

4. 1. 1 Services for senior citizens as listed in Exhibit F attached hereto.

4. 1. 2 Uses consistent with Lessee' s business purposes.

4. 1. 3 Until December 31, 2013, Sublease one thousand two hundred and sixty -two 1, 262) square feet of office space, including Room Nos. 203, 204, 205, 208, 211 and 212, to Town, rent to be determined as follows: The rent to be paid by Town (the Sublease Rent ") shall be calculated via multiplication of approximate size of the 3

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ITEM NO. 20.
subleased property, one thousand two hundred and sixty -two ( 1, 262) square feet, by a percentage ofthe fair market rent for the subleased property ( the " SUBFMR "). The initial SUBFMR shall be two dollars and fifty cents ($ 2. 50) per square foot. The initial rent to be paid by Town shall be seven hundred eighty -nine dollars ($789) per month without reduction or offset, calculated using twenty -five percent ( 25 %) of FMR. The SUBFMR shall be updated no less than once every five ( 5) years using an appraisal methodology satisfactory to the Parties. In addition, the SUBFMR shall be adjusted annually based on the State of California Department ofIndustrial Relations, Division of Labor Statistics and Research' s Consumer Price Index, All Urban Consumers, All Items, San Francisco- Oakland -San Jose, California. The index for the quarter ending just prior to this lease date is established as the base index.

Percentage and adjustments to the original lease payments shall be as indicated by percentage changes in said index. During the Term of this Lease, including the Option Periods if the options are exercised, the Sublease Rent shall be increased effective on each anniversary of the Delivery Date as follows: Commencing on the first anniversary of the Delivery Date, the Sublease Rent shall increase then and on each anniversary ofthe Delivery Date thereafter by five ( 5) percent ofthe SUBFMR until the fourth anniversary of the Delivery Date when the Base Rent shall have increased to forty -five (45) percent of the SUBFMR.

4. 1. 4 Rent meeting rooms for public use consistent with current Los Gatos Neighborhood Center Polices and Practices, Exhibit D attached hereto and incorporated herein by reference. Lessee shall adopt Town' s current fee schedule for public use of the Neighborhood Center, Exhibit E attached hereto and incorporated herein by reference, which may be evaluated and modified by Lessee after the first anniversary date of the Delivery Date.

4. 1. 5 Rent meeting rooms to the Alcoholics Anonymous and Narcotics Anonymous organizations for fifteen hundred ( 1, 500) hours per year at the rate charged those organizations for the rentals of the same meeting rooms as of the Delivery Date until December 31, 2013, after which ( commencing on January 1, 2014), the number of hours per year may be reduced to one thousand ( 1, 000) hours per year. Lessee may limit the availability of rooms for this use Monday through Friday, excluding holidays, during the hours of 8 a.m. to 5 p.m. The rate charged for both organizations for rentals ofmeeting rooms may be adjusted by Lessee on or after January 1, 2011.

4. 1. 6 Until December 31, 2013, based on availability as determined in Lessee' s sole judgment, allow Town free use ofmeeting rooms for Town business for no more than seven hundred ( 700) hours per year, which amount shall be no more than five hundred ( 500) hours per year commencing on January 1, 2014. Town shall also have free use of the large hall /meeting room on the north end of the first floor of the Premises for training purposes, based on availability as determined in Lessee' s sole judgment, and as needed in the event of an emergency. In all cases and at all times Town use of the facility, except in the event of an emergency as defined in this paragraph, shall be subordinate to Lessee' s use consistent with Lessee' s business in

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purposes. " Emergency," for the purposes of this paragraph, is defined as when the Town Council declares a State of Emergency. Town shall remove all EOC equipment from the large hall /meeting room by no later than June 30, 2010.

4. 1. 7 An annual report to the Town Council on the status of Lessee' s operations as related to this Lease.

4. 2 Prohibited Uses. Lessee shall not use Premises for any purpose not expressly permitted hereunder. Lessee shall not create, cause, maintain or permit any nuisance or waste in, on, or about the Premises, or permit or allow the Premises to be used for any unlawful or immoral purpose. Lessee shall not do or permit to be done anything in any manner which unreasonably disturbs the occupants of neighboring property. Specifically, and without limiting the above, Lessee agrees not to cause any unreasonable odor, noise, vibration, power emission, or other item to emanate from the Premises. No materials or articles of any nature shall be stored outside upon any portion of the Premises. Lessee will not use Premises in a manner that increases the risk of fire, cost of fire insurance or improvements thereon. No unreasonable sign or placard shall be painted, inscribed or placed in or on said Premises; and no tree or shrub thereon shall be destroyed or removed or other waste committed of said Premises. No bicycles, motorcycles, automobiles or other mechanical means of transportation shall be placed or stored anywhere on the Premises except for the garage or driveway. No repair, overhaul or modification of any motor vehicle shall take place on the Premises or the street in front of said Premises.

4.3 Condition, Use of Premises. Except as otherwise expressly stated in this Lease, Town makes no warranty or representation of any kind concerning the condition ofthe Premises, or the fitness of the Premises for the use intended by Lessee, and hereby disclaims any personal knowledge with respect thereto, it being expressly understood by the parties that Lessee has personally inspected the Premises, knows its condition, finds it fit for Lessee' s intended use, accepts it as is, and has ascertained that it can be used exclusively for the limited purposes specified in Section 5. 1.

5. HAZARDOUS MATERIALS.

5. 1 Hazardous Materials Defined. The term " Hazardous Material( s)" shall mean any toxic or hazardous substance, material or waste or any pollutant or contaminant, or infectious or radioactive material, including but not limited to, those substances, materials, or wastes regulated now or in the future under any of the following statutes or regulations and any and all of those substances included within the definitions of "hazardous substances," " hazardous waste," " hazardous chemical substance or mixture," " imminently hazardous chemical substance or mixture," " toxic substances," " hazardous air pollutant," " toxic pollutant" or solid waste" in the ( a) CERCLA or Superfund as amended by SARA, 42 U.S. C. Sec. 9601 et seq., ( b) RCRA, 42 U. S. C. Sec. 6901 et seq., ( c) CWA., 33 U. S. C. Sec. 1251 et seq., ( d) CAA, 42 U. S. C. 78401 et seq., ( e) TSCA, 15 U. S. C. Sec. 2601 et seq., ( f) The Refuse Act of 1899, 33 U. S. C. Sec. 407, ( g) OSHA, 29 U.S. C. 651 et seq. ( h) Hazardous Materials Transportation Act, 49 U.S. C. Sec. 1801 et seq., ( i) USDOT Table ( 40 CFR Part 302 and 5

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ITEM NO. 20.
amendments) or the EPA Table ( 40 CFR Part 302 and amendments), 0) California Superfund, Cal. Health & Safety Code Sec. 25300 et seq., ( k) Cal. Hazardous Waste Control Act, Cal. Health & Safety Code Section 25100 et seq., ( 1) Porter - Cologne Act, Cal. Water Code Sec. 13000 et seq., ( m) Hazardous Waste Disposal Land Use Law, Cal. Health & Safety Code Sec. 25220 et seq., ( n) Proposition 65„ Cal. Health and Safety Code Sec. 25249. 5 et seq., ( o) Hazardous Substances Underground Storage Tank Law, Cal. Health & Safety Code Sec. 25280 et seq., ( p) California Hazardous Substance Act, Cal. Health & Safety Code Sec. 28740 et seq., ( q) Air Resources Law, Cal. Health & Safety Code Sec. 39000 et seq., ( r) Hazardous Materials Release Response Plans and Inventory, Cal. Health & Safety Code Secs. 25500- 25541, ( s) TCPA, Cal. Health and Safety Code Secs. 25208 et seq., and ( t) regulations promulgated pursuant to said laws or any replacement thereof, or as similar terms are defined in the federal, state and local laws, statutes, regulations, orders or rules. Hazardous Materials shall also mean any and all other substances, materials, and wastes which are, or in the future become, regulated under applicable local, state or federal law for the protection of health or the environment, or which are classified as hazardous or toxic substances, materials or wastes, pollutants or contaminants, as defined, listed or regulated by any federal, state or local law, regulation or order or by common law decision, including without limitation: (i) trichloroethylene, tetracholoethylene, perchloroethylene and other chlorinated solvents; ( ii) any petroleum products or fractions thereof, ( iii) asbestos, iv) polychlorinated biphenyls; ( v) flammable explosives; ( vi) urea formaldehyde; and, ( vii) radioactive materials and waste.

5. 2. Compliance with Laws. Lessee shall not cause or permit any Hazardous Material ( as defined below) to be brought upon, kept or used in or about the Premises or Project by Lessee, its agents, employees, contractors or invitees; provided, that the foregoing shall not apply to, and Lessee shall be entitled to keep on the Premises, normal office products such as copier toner and limited quantities of office cleaning supplies and materials.

5. 3 Termination of Lease. Town shall have the right to terminate the Lease in Town' s sole and absolute discretion in the event that: ( i) any anticipated use of the Premises by Lessee involves the generation or storage, use, treatment, disposal, or release of Hazardous Material in a manner or for a purpose prohibited or regulated by any governmental agency, authority, or Hazardous Materials Laws; ( ii) Lessee has been required by any lender or governmental authority to take remedial action in connection with Hazardous Material contaminating the Premises, if the contamination resulted from Lessee0s action or use of the Premises; or iii) Lessee is subject to an enforcement order issued by any governmental authority in connection with the release, use, disposal, or storage of a Hazardous Material on the Premises.

5. 4 Assignment and Subletting. It shall not be unreasonable for Town to withhold its consent to an assignment or subletting to a proposed assignee or sublessee i£ ( i) any anticipated use of the Premises by any proposed assignee or sublessee involves the generation or storage, use, treatment, disposal, or release ofHazardous Material in a manner or for any purpose; ( ii) the proposed assignee or sublessees has been required by any prior landlord, lender, or governmental authority to take remedial action in connection with rel

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Hazardous Material contaminating a property, ifthe contamination resulted from such party' s action or use ofthe property in question; or, (iii) the proposed assignee or sublessee is subject to an enforcement order issued by any governmental authority in connection with the release, use, disposal or storage of a Hazardous Material.

5. 5 Hazardous Materials Indemnity. Each Party (an " Indemnifying Party) shall indemnify, defend (by counsel reasonably acceptable to the Indemnified Party), protect, and hold the other Party ( an " Indemnified Party) harmless from and against any and all claims, liabilities, penalties, forfeitures, losses, and /or expenses, including without limitation, diminution in value of the Premises, damages for the loss or restriction on use of the rentable or usable space or of any amenity of the Premises, damages arising from any adverse impact or marketing of the Premises and sums paid in settlement of claims, response costs, cleanup costs, site assessment costs, attorneys' fees, consultant and expert fees, judgments, administrative rulings or orders, fines, costs ofdeath of or injury to any person, or damage to any property whatsoever (including, without limitation, groundwater, sewer systems, and atmosphere), arising from, caused, or resulting, either prior to or during the Lease Term, in whole or in part, directly or indirectly, by the presence or discharge in, on, under, or about the Premises by the Indemnifying Party, its agents, employees, licensees, or invitees or at the Indemnifying Party' s direction, of Hazardous Material, or by the Indemnifying Party' s failure to comply with any Hazardous Materials Law, whether knowingly or by strict liability. For purposes ofthe indemnity provided herein, any acts or omissions ofan Indemnifying Party or its employees, agents, customers, sublessees ( other than the Town in the case where Tenant is the Indemnifying Party), assignees, contractors, or subcontractors ( whether or not they are negligent, intentional, willful or unlawful) shall be strictly attributable to the Indemnifying Party. Each Party' s indemnification obligations shall include, without limitation, and whether foreseeable or unforeseeable, all costs of any required or necessary Hazardous Materials management plan, investigation, repairs, cleanup or detoxification or decontamination of the Premises, and the presence and implementation of any closure, remedial action or other required plans, and shall survive the expiration of or early termination of the Lease Term.

5. 6 Town' s Right to Perform Tests. At any time prior to the expiration ofthe Lease Term, Town shall have the right to enter upon the Premises in order to conduct tests of water and soil. Before exercising such right, Town shall give Lessee not less than three ( 3) days prior notice. Town agrees to exercise such right in a manner which is reasonably calculated to cause as little disturbance as possible to Lessee and other occupants and users of the Premises.

6. UTILITIES AND OPERATING EXPENSES.

Lessee at Lessee' s sole expense shall fully and promptly pay for all expenses associated with the operation ofthe Premises, including but not limited to the furnishing of gas, water, sewer, electricity, telephone service, garbage pickup and disposal, other public utilities and custodial service. During the term ofthe subletting of space to Town as provided in Section 5. 1. 3, Town agrees to reimburse Lessee, within ten ( 10) days of written demand, a portion ofthe cost of the foregoing expenses, such 7

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ITEM NO. 20.
portion to be equal to the amount of such expenses multiplied by the percentage that the square footage ofthe space subleased by Town bears to the total square footage ofthe Premises. Town, at its sole expense, shall maintain all exterior landscaping in a good and attractive condition.

7. TAXES.

7. 1 Real PropertyTaxes Defined. The term " real property taxes" as used herein shall mean all taxes, assessments, levies and other charges, general and special, foreseen and unforeseen, now or hereafter imposed by any governmental or quasi - governmental authority or special district having the direct or indirect power to tax or levy assessments, which are levied or assessed against or with respect to: ( i) value, occupancy, use or possession ofthe Premises and /or the Improvements; ( ii) any improvements, fixtures, equipment and other real or personal property of Lessee that are an integral part of the Premises; or, ( iii) use of the Premises, Improvements public utilities or energy within the Premises. The term " real property taxes" shall also mean all charges, levies or fees imposed by reason of environmental regulation or other governmental control of the premises and /or the Improvements, new or altered excise, transaction, sales, privilege, assessment, or other taxes or charges now or hereafter imposed upon Town as a result of this Lease, and all costs and fees ( including attorneys' fees) incurred by Town in contesting any real property taxes and in negotiating with public authorities as to any real property taxes affecting the Premises ( but not to exceed an amount equal to the amount by which such contest or negotiation results in a reduction in real property taxes affecting the Premises). If any real property taxes are based upon property or rents unrelated to the Premises and /or the Improvements, then only that part of such tax that is fairly allocable to the Premises and /or the Improvements, as determined by Town, on the basis of the assessor' s worksheets or other available information, shall be included within the meaning of the term " real property taxes."

7. 2 Payment of Real Property Taxes. Lessee shall pay Lessee' s share of all real property taxes ( as defined in Section 8. 1 above) which become due and payable to Town on or before the later of ten ( 10) days prior to the delinquency thereof or ten ( 10) days after the date on which Lessee receives a copy ofthe tax bill and notice of Town' s determination hereunder.

Lessee' s liability to pay real property taxes shall be prorated on the basis of a three hundred sixty -five (365) day year to account for any fraction or portion of a tax year included in the Lease term at the commencement or expiration of the Lease.

7. 3 Revenue and Taxation Code. Lessee specifically acknowledges it is familiar with section 107. 6 of the California Revenue and Taxation Code. Lessee realizes that a possessory interest subject to property taxes may be created, agrees to pay any such tax, and hereby waives any rights Lessee may have under said California Revenue and Taxation Code section 107. 6.

7.4 Personal Proper Taxes. Except for real property taxes ( the payment of which is governed by Section 8. 2), Lessee shall pay before delinquent, or if requested by Town, reimburse Town for, any and all taxes, fees, and assessments associated with the Premises, the personal property contained in the premises and other taxes, fees, and assessments

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ITEM NO. 20.
regarding any activities which take place at the Premises.

8. MAINTENANCE.

8. 1 Town and Lessee Responsibilities. Lessee at Lessee' s expense, shall perform all interior maintenance and repairs, including all painting, necessary to keep the Premises in first -class order, repair, and condition, and shall keep the Premises in a safe, clean, wholesome, and sanitary condition in compliance with all applicable laws, throughout the term of this Lease; provided, that in complying with such laws, Lessee shall not be required to make structural repairs or replacements or repairs or replacements to building systems ( e. g., plumbing, electrical, water, sewer, etc.) unless the need for such repairs or replacements is due to the negligence or willful misconduct of Lessee. In addition, Lessee shall maintain, at Lessee' s expense, all equipment, furnishings and trade fixtures upon the Premises required for the maintenance and operation of first -class public services ofthe type to be conducted pursuant to this Lease. Town, at its expense, shall be responsible for the maintenance and repair of all structural portions ofthe Premises and main support systems, including, without limitation, roof, exterior wall and foundation repair, electrical system repair, HVAC, plumbing, fire sprinklers, exterior painting and all other structural repairs. Town, at its expense, shall maintain and repair the structure and the main support systems in a timely manner to enable continued operation of the facility with a minimum if any service interruption. Any event that interrupts the use by Lessee according to this Lease for a time greater than seventy -two 72) hours will result in a credit to Lessee on future rent payments based on a pro -rata allocation of the rent for that period for square footage of the space deemed unusable for Lessee business purposes.

8. 2 Waiver of Civil Code. Lessee expressly waives the benefit of any statute now or hereinafter in effect, including the provisions of sections 1941 and 1942 ofthe Civil Code of California, which would otherwise afford Lessee the right to make repairs at Town' s expense. Lessee further agrees that if and when any repairs shall be made by Lessee as required by Section 8. 1, Lessee shall promptly pay for all labor done or materials furnished and shall keep the Premises free and clear of any lien or encumbrance of any kind whatsoever; provided, that Lessee may contest and such lien by appropriate proceedings and in a manner which stays the enforcement of such lien. IfLessee fails to make any repairs or perform any maintenance work for which Lessee is responsible within a reasonable time ( as determined by the Town Manager in the Town Manager' s sole discretion) after demand by the Town, Town shall have the right, but not the obligation, to make the repairs at Lessee' s expense; within ten ( 10) days ofreceipt of a bill, Lessee shall reimburse Town for the cost of such repairs, including a fifteen percent ( 15 %) administrative overhead fee. The making of such repairs or performance of maintenance by Town shall in no event be construed as a waiver of the duty of Lessee to make repairs or perform maintenance as provided in this Section.

8. 3 Maintenance of Common Areas. Town, at its expense, shall maintain or cause to be maintained, including repair and replacement as necessary, the parking lot adjacent to the Premises.

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ITEM NO. 20.

9. TENANT IMPROVEMENTS.

9. 1 Improvements Permitted. Subject to prior written approval of the Town Manager, which shall not be unreasonably withheld, Lessee be entitled to install improvements in an efficient and workmanlike manner within the Premises, at no cost to Town.

9. 2 Cost of Improvements. All improvements shall be made at Lessee' s sole expense, but shall be subject to reimbursement by Town should Town exercise its right of early termination. The total cost of all approved improvements made by Lessee shall be determined by agreement ofthe Parties, and shall be amortized on a straight line basis from the date the improvement is completed to the end of the original term of the Lease. In the event of early termination, Lessee shall be entitled to be reimbursed the remaining value of all approved tenant improvements based on the number of years remaining in the original term of the Lease.

9. 3 Ownership ofImprovements. All improvements constructed, erected, or installed upon the Premises must be free and clear of all liens, claims, or liability for labor or material and shall become the property ofTown, at its election, upon expiration or earlier termination of this lease and upon Town's election, shall remain upon the Premises upon termination ofthis Lease. Title to all equipment, furniture, furnishings, and trade fixtures placed by Lessee upon the Premises shall remain in Lessee, and replacements, substitutions and modifications thereof maybe made by Lessee throughout the term ofthis Lease. Lessee may remove such fixtures and furnishings at any time during the term of this Lease and upon termination of this Lease if Lessee is not then in default under this Lease, provided that Lessee shall repair to the satisfaction of Town any damage to the Premises and improvements caused by such removal and provided that usual and customary lighting, plumbing and heating fixtures shall remain upon the Premises upon termination of this Lease.

9. 4 Indemnity for Claims Arising Out of Construction. Lessee shall defend and indemnify Town against all claims, liabilities, and losses of any type arising out of work performed on the Premises by Lessee, together with reasonable attorneys' fees and all costs and expenses reasonably incurred by Town in negotiating, settling, defending or otherwise protecting against such claims.

9. 5 Certificate ofInspection. Upon completion of construction of any building, Lessee shall submit to the Town Manager a Certificate ofInspection, verifying that the construction was completed in conformance with Title 20 of the California Code of Regulations for residential construction, or in conformance with Title 24 of the California Code of Regulations for nonresidential construction.

9. 6 As Built Plans. Lessee shall provide the Town Manager with a complete set of reproducible " as built plans" reflecting actual construction within or upon the Premises upon completion of any: ( i) new construction; ( ii) structural alterations; or, ( iii) non - structural alterations costing more than $25, 000.
10

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ITEM NO. 20.

10. HOLD HARMLESS / INDEMNIFICATION.

10. 1 Indemnification. To the extent permitted by law, each Party (an " Indemnifying Party") agrees to protect, defend, hold harmless and indemnify the other Party, its elected and appointed officials, commissions, officers, agents, volunteers, and employees ( the Indemnified Parties ") from and against any claim, injury, liability, loss, cost, and/or expense or damage, however same may be caused, including all costs and reasonable attorney' s fees in providing a defense to any claim arising therefrom for which the Indemnified Parties shall become legally liable arising from the Indemnifying Party' s negligent, reckless, or wrongful acts, errors, or omissions with respect to or in any way connected with this Lease. A Party claiming indemnity shall give the other Party immediate notice of any claim or liability hereby indemnified against. This indemnity shall be in addition to the Hazardous Materials indemnity contained in this Lease and shall survive shall survive the expiration of or early termination of the Lease. Term.

10. 2 Waiver of Claims. Each Party ( a " Waiving Party ") waives any claims against the other Party for injury to the Waiving Party' s business or any loss ofincome therefrom, for damage to the Waiving Party' s property, or for injury or death ofany person in or about the Premises or the Town Property, from any cause whatsoever, except to the extent caused by the Waiving Party' s negligence or willful misconduct.

11. DAMAGE, DESTRUCTION AND TERMINATION.

11. 1 Restoration ofPremises by Lessee.

11. 1. 1 Destruction Due to Risk Covered by Insurance. If, during the term, the Premises are totally or partially destroyed from a risk covered by the insurance described in Section 18 ( Insurance), rendering the Premises totally or partially inaccessible or unusable, Lessee shall restore the Premises to substantially the same condition as it was in immediately before destruction, to the extent possible based on the insurance proceeds received by Lessee, it being agreed that Lessee shall not be obligated to expend more than the amount of the insurance proceeds received in restoring the Premises. All applicable insurance proceeds must be directed toward this purpose. Such destruction shall not terminate this Lease. Ifthe laws existing at that time do not permit the restoration, either party can terminate this Lease immediately by giving notice to the other party.

A. Minor Loss. If, during the term ofthis Lease, the Premises are destroyed from a risk covered by the insurance described in Section 18 ( Insurance), and the total amount of loss does not exceed twenty thousand dollars ($ 20, 000), Lessee shall make the loss adjustment with the insurance company insuring the loss. The proceeds shall be paid directly to Lessee for the sole purpose of making the restoration ofthe Premises in accordance with this Lease.

B. Major Loss - Insurance Trustee. If, during the term of this Lease, the 11

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ITEM NO. 20.

Premises are destroyed from a risk covered by the insurance described in Section 18 ( Insurance), and the total amount of loss exceeds the amount set forth in paragraph ( A), Lessee shall make the loss adjustment with the insurance company insuring the loss and on receipt of the proceeds shall immediately pay them to an institutional lender or title company as may be jointly selected by the parties ( " the Insurance Trustee ").

11. 1. 2 Destruction Due to Risk Not Covered by Insurance. If, during the term, the Premises are totally or partially destroyed from a risk not covered by the insurance described in Section 18 ( Insurance), rendering the Premises totally or partially inaccessible or unusable, Lessee shall restore the Premises to substantially the same condition as it was in immediately before destruction, to the extent possible based on the insurance proceeds received by Lessee. All applicable insurance proceeds must be directed toward this purpose whether or not the insurance proceeds are sufficient to cover the actual cost of restoration. Such destruction shall not terminate this Lease. Ifthe laws existing at that time do not permit the restoration, either party can terminate this Lease immediately by giving notice to the other party.

Ifthe cost ofrestoration exceeds ten percent ( 10% o) ofthe then replacement value of the Premises totally or partially destroyed, Lessee can elect to terminate this Lease by giving notice to Town within sixty (60) days after determining the restoration cost and replacement value. IfLessee elects to terminate this Lease, Town, within thirty 30) days after receiving Lessee' s notice to terminate, can elect to pay to Lessee, at the time Town notifies Lessee of its election, the difference between ten percent 10 %) of the replacement value of the Premises and the actual cost of restoration, in which case Lessee shall restore the Premises. On Town' s making its election to contribute, each party shall deposit immediately the amount of its contribution with such institutional lender or title company as may be jointly selected by the parties the Insurance Trustee "). If the Destruction does not exceed ten percent ( 10 %) of the then replacement value of the Premises, Lessee shall immediately deposit the cost of restoration with the Insurance Trustee as provided in Exhibit ( c). This Lease shall terminate if Lessee elects to terminate this Lease and Town does not elect to contribute toward the cost of restoration as provided in this section.

If the Premises are destroyed from a risk not covered by the insurance described in Section 18 ( Insurance), and Lessee has the obligation to restore the Premises as provided in this section, both parties shall deposit with the Insurance Trustee their respective contributions toward the cost of restoration. All sums deposited with the Insurance Trustee shall be held for the following purposes and the Insurance Trustee shall have the following powers and duties:

The sums shall be paid in installments by the Insurance Trustee to the contractor retained by Lessee as construction progresses, for payment ofthe cost ofRestoration.

A 10% retention fund shall be established that will be paid to the contractor on completion of restoration, payment of all costs, expiration of all applicable lien 12

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ITEM NO. 20.
periods, and proof that the Premises are free of all mechanics' liens and lienable claims.

Payments shall be made on presentation of certificates or vouchers from the architect or engineer retained by Lessee showing the amount due. Ifthe Insurance Trustee, in its reasonable discretion, determines that the certificates or vouchers are being improperly approved by the architect or engineer retained by Lessee, the Insurance Trustee shall have the right to appoint an architect or an engineer to supervise construction and to make payments on certificates or vouchers approved by the architect or engineer retained by the Insurance Trustee. The reasonable expenses and charges of the architect or engineer retained by the Insurance Trustee shall be paid by the insurance trustee out of the trust fund. Both parties shall promptly execute all documents and perform all acts reasonably required by the Insurance Trustee to perform its obligations under this section.

Any undisbursed funds after compliance with the provisions ofthis section shall be delivered to Town to the extent ofTown' s contribution to the fund, and the balance, if any, shall be paid to Lessee. All actual costs and charges of the Insurance Trustee shall be paid by Lessee.

If the Insurance Trustee resigns or for any reason is unwilling to act or continue to act, Town shall substitute a new trustee in the place of the designated Insurance Trustee. The new trustee must be an institutional lender or title company.

11. 1. 3 Procedure for Restoring Premises. When Lessee is obligated to restore the Premises within sixty ( 60) days Lessee at its cost shall prepare final plans, specifications, and working drawings complying with applicable Laws that will be necessary for restoration of the Premises. The plans, specifications, and working drawings must be approved by Town, which approval will not be unreasonably withheld. Town shall have thirty ( 30) days after receipt of the plans and specifications and working drawings to either approve or disapprove the plans, specifications, and working drawings and return them to Lessee. If Town disapproves the plans, specifications, and working drawings, Town shall notify Lessee of its objections and Town' s proposed solution to each objection. Lessee acknowledges that the plans, specifications, and working drawings shall be subject to approval of the appropriate governmental bodies and that they will be prepared in such a manner as to obtain that approval.

The restoration shall be accomplished as follows:

A. Lessee shall complete the restoration within a reasonable time after final plans and specifications and working drawings have been approved by the appropriate governmental bodies, all required permits have been obtained subject to a reasonable extension for delays resulting from causes beyond Lessee' s reasonable control), and Lessee has received all insurance proceeds 13

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ITEM NO. 20.
payable as a result of the damage or destruction.

B. Lessee shall retain a licensed contractor that is bondable. The contractor shall be required to carry public liability and property damage insurance, standard fire and extended coverage insurance, with vandalism and malicious mischief endorsements, during the period of construction in accordance with Section 20 ( Insurance). Such insurance shall contain waiver of subrogation clauses in favor of Town and Lessee in accordance with the Provisions of Exhibit B.

C. Lessee shall notify Town of the date of commencement of the restoration at least ten ( 10) days before commencement of the restoration to enable Town to post and record notices of nonresponsibility. The contractor retained by Lessee shall not commence construction until a completion bond and a labor and materials bond have been delivered to Town to insure completion of the construction.

D. Lessee shall accomplish the restoration in a manner that will cause the least inconvenience, annoyance, and disruption at the Premises.

E. On completion of the restoration Lessee shall immediately record a notice of completion in the county in which the Premises are located.

F. The restoration shall not be commenced until sums sufficient to cover the cost of restoration are placed with the Insurance Trustee as provided in this section.

11. 2 Force Majeure. Prevention, delay or stoppage due to strikes, lockouts, labor disputes, Acts of God, inability to obtain labor, inability to obtain materials or reasonable substitutes, governmental restrictions, governmental regulation, governmental controls, judicial orders, enemy or hostile governmental actions, civil commotion, fire or other casualty, and other causes beyond the reasonable control of Lessee ( financial inability excepted), shall excuse the performance by Lessee for a period equal to the prevention, delay, or stoppage, except the obligations imposed with regard to rent to be paid by Lessee pursuant to this Lease. In the event any work performed by Lessee or Lessee' s contractors results in a strike, lockout, and/ or labor dispute, the strike, lockout, and /or labor dispute shall not excuse the performance by Lessee of the provisions of this Lease.

12. SIGNS AND MARKETING.

12. 1 Lessee shall not place, construct, maintain, or allow any signs upon the exterior of the Premises without prior written consent of the Town Manager, which consent will not be unreasonably withheld. Lessee shall include the Town logo on all signs and items marketing programs operated, conducted, sponsored, in whole or in part, by Lessee on the Premises. 14

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ITEM NO. 20.

12. 2 Town shall include references to Lessee on signs and marketing programs prepared by or for Town in association with Lessee' s operations on the Premises. 123 Town shall retain the right to rename the Premises, which, as of the Delivery Date, is named the " Los Gatos Senior and Adult Recreation Center."

12. 4 During the term ofthis Lease, including any Option Periods, Town shall have a non voting seat on Lessee' s governing board.

13. ASSIGNMENT AND SUBLETTING.

13. 1 Town' s Consent Required. Except as permitted or required by this Lease, Lessee shall not assign this Lease, nor any interest therein, and shall not sublet or encumber the Premises or any part thereof, nor any right or privilege appurtenant thereto, nor allow or permit any other person( s) to occupy or use the Premises, or any portion thereof, without the prior written consent ofTown, which consent will not be unreasonably withheld. This Lease shall be binding upon any permitted assignee or successor of Lessee. Consent by Town to one assignment, subletting, occupation or use by another person shall not be deemed to be consent to any subsequent assignment, subletting, occupation or use by another person. No assignment, subletting, or encumbrance by Lessee shall release it from or in any way alter any of Lessee' s obligations under this Lease. Lessee may have the Premises delivered to a subsidiary company of Lessee, but such arrangement shall in no way alter Lessee' s responsibilities hereunder with respect to the Premises. Any assignment, subletting, encumbrances, occupation, or use contrary to the provisions ofthis Lease shall be void and shall constitute breach of this Lease. Town may assign any of its rights hereunder without notice to Lessee, but Town shall not be released from any of its duties or obligations hereunder unless and until the assignee expressly assumes such duties and obligations for the benefit of Lessee.

13. 2 No Release of Lessee. No subletting or assignment as approved by Town shall release Lessee of Lessee' s obligation or alter the primary liability of Lessee to pay the rent and to perform all other obligations by Lessee hereunder. The acceptance ofrent by Town from any other person shall not be deemed to be a waiver by Town of any provision hereof. In the event of default by any assignee of Lessee or.any successor ofLessee in the performance of any of the terms hereof, Town may proceed directly against Lessee without the necessity of exhausting remedies against said assignee.

14. DEFAULTS; REMEDIES.

14. 1 Defaults. The occurrence of any one or more ofthe following events shall constitute a material default, or breach of this Lease, by Lessee:

14. 1. 1 Abandonment of the Premises by Lessee as defined by California Civil Code section 1951. 3;
15

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ITEM NO. 20.

14. 1. 2 Failure by Lessee to make any payment ofrent or any other payment required to be made by Lessee hereunder, as provided in this Lease, where such failure shall continue for a period of ten ( 10) business days after written notice thereof from Town to Lessee. In the event Town serves Lessee with a Notice to Pay Rent or Quit pursuant to applicable Unlawful Detainer statutes, such Notice to Pay Rent or Quit shall be in addition to the notice required by this subparagraph;

14. 1. 3 Failure by Lessee to observe or perform any ofthe covenants, conditions or provisions ofthis Lease in any material respect where such failure shall continue for a period of thirty ( 30) days after written notice thereof from Town to Lessee; provided, however, that ifthe nature of Lessee' s default is such that more than thirty 30) days are reasonably required for its cure, then Lessee shall not be deemed to be in default if Lessee commenced such cure within said thirty (30) day period and thereafter diligently prosecutes such cure to completion;

14. 1. 4 Making by Lessee of any general arrangement or assignment for the benefit of creditors; Lessee' s becoming a " debtor" as defined in 11 U. S. C. § 101 or any successor statute thereto ( unless, in the case of a petition filed against Lessee, the same is dismissed within sixty (60) days); the appointment of a bankruptcy trustee or receiver to take possession of all or substantially all of Lessee' s assets located at or on the Premises or ofLessee' s interest in this Lease where possession is not restored to Lessee within thirty ( 30) days; or the attachment, execution or other judicial seizure of all or substantially all of Lessee' s assets located at or on the Premises or of Lessee' s interest in this Lease, where such seizure is not discharged within thirty (30) days.

14. 2 Remedies. In the event of any material default or breach by Lessee, Town may at any time thereafter, following any notice required by statute, and without limiting Town in the exercise of any right or remedy which Town may have by reason of such default or breach:

14. 2. 1 Terminate Lessee' s right to possession of the Premises by any lawful means, in which case this Lease shall terminate and Lessee shall immediately surrender possession ofthe Premises and Improvements to Town. In such event, Town shall be entitled to recover from Lessee all damages incurred by Town by reason of Lessee' s default including but not limited to: the cost ofrecovering possession ofthe Premises and Improvements; expenses of reletting, including necessary renovation and alteration of the Premises and Improvements; reasonable attorneys' fees; the worth at the time of the award of the unpaid rent that had been earned at the time of termination of this Lease and the worth at the time of award ofthe amount by which the unpaid rent for the period of one hundred eighty ( 180) days after the time of such award exceeds the amount of such rental loss for the same period that Lessee proves could be reasonably avoided.

14. 2. 2 Maintain Lessee' s right to possession, in which case this Lease shall continue in effect whether or not Lessee shall have abandoned the Premises. In such event, DO

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ITEM NO. 20.

Town shall be entitled to enforce all ofTown' s rights and remedies under this Lease, including the right to recover rent and other payments as they become due hereunder.

14. 2. 3 Pursue any other remedy now or hereafter available to Town under the laws or judicial decisions of the State of California. Town shall have all remedies provided by law and equity.

14. 3 No Relief from Forfeiture After Default. Lessee waives all rights of redemption or relief from forfeiture under California Code of Civil Procedure sections 1174 and 1179, and any other present or future law, in the event Lessee is evicted or Town otherwise lawfully takes possession ofthe Premises by reason of any default or breach ofthis Lease by Lessee.

14.4 Disposition ofAbandoned Personal Property. Ifthe Lessee fails to remove any personal property belonging to Lessee from the Premises after forty -five (45) days ofthe expiration or termination ofthis Lease, such property shall at the option ofTown be deemed to have been transferred to Town. Town shall have the right to remove and to dispose of such property without liability to Lessee or to any person claiming under Lessee, and the Town shall have no need to account for such property.

15. INTEREST ON PAST -DUE OBLIGATIONS.

Except as expressly provided herein, any amount due Town when not paid when due shall bear interest at the lesser of ten percent ( 10 %) per year or the maximum rate then allowable by law from the date due.

16. HOLDING OVER.

IfLessee remains in possession ofthe Premises or any part thereof after the expiration of the term or option term hereof, such occupancy shall be a tenancy from month to month with all the obligations ofthis Lease applicable to Lessee and at a monthly rental obligation of the Rent in effect at the time of expiration. Nothing contained in this Lease shall give to Lessee the right to occupy the Premises after the expiration of the term, or upon an earlier termination for breach.

17. TOWN' S ACCESS.

17. 1 Access for Inspection. Town and Town' s agents shall have the right to enter the Premises at reasonable times, upon not less than twenty -four ( 24) hours prior notice to Lessee, for the purpose ofinspecting same, showing same to prospective purchasers, lenders or lessees, and making such alterations, repairs, improvements, or additions to the Premises as Town may deem necessary.

17. 2 Security Measures. Town shall have the right to require a reasonable security system, device, operation, or plan be installed and implemented to protect the Premises or the Improvements. Should Town, in its sole discretion, require Lessee to install such a security system, Lessee agrees to bear the sole cost and expense of any security system, device, 17

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ITEM NO. 20.
operation or plan and the installation and implementation thereof. Lessee shall obtain Town' s prior approval before installing, implementing or changing any Town approved security system, device, operation or plan.

17. 3 New Locks. Lessee may install new locks on all exterior doors. Lessee shall advise Town of such action and shall provide Town with keys to said locks. Lessee shall also deliver to Town the old locks with keys. Upon termination, Lessee shall leave new locks that shall become the property of Town.

18. INSURANCE.

Lessee's responsibility for the Premises begins immediately upon delivery and Lessee, at its sole cost and expense, and at no cost to Town, shall purchase and maintain in full force and effect during the entire term of this Lease insurance coverage in amounts and in a form acceptable to Town as set forth in Exhibit C attached hereto and incorporated herein by reference. Said policies shall be maintained with respect to Lessee' s employees, if any, and all vehicles operated on the Premises.

The policies shall include the required endorsements, certificates of insurance and coverage verifications as described in Exhibit C. Lessee also agrees to secure renter' s liability insurance or its equivalent.

Lessee shall deposit with the Town Manager, on or before the effective date ofthis Lease, certificates of insurance necessary to satisfy Town that the insurance provisions of this Lease have been complied with, and to keep such insurance in effect and the certificates therefore on deposit with Town during the entire term of this Lease. Should Lessee not provide evidence of such required coverage at least three ( 3) days prior to the expiration of any existing insurance coverage, Town may purchase such insurance, on behalf of and at the expense of Lessee to provide six months of coverage.

Town shall retain the right at any time to review the coverage, form, and amount of the insurance required hereby. If, in the opinion of the Town' s Risk Manager ( or comparable official), the insurance provisions in this Lease do not provide adequate protection for Town and for members of the public using the Premises, the Town Manager may require Lessee to obtain insurance sufficient in coverage, form, and amount to provide adequate protection as determined by the Risk Manager.

Town's requirements shall be reasonable and shall be designed to assure protection from and against the kind and extent of risk that exists at the time a change in insurance is required.

The Town Manager shall notify Lessee in writing of changes in the insurance requirements. If Lessee does not deposit copies of acceptable insurance policies with Town incorporating such changes within sixty ( 60) days of receipt of such notice, or in the event Lessee fails to maintain in effect any required insurance coverage, Lessee shall be in default under this lease without further notice to Lessee. Such failure shall constitute a material breach and shall be grounds for immediate termination of this Lease at the option of Town.

The procuring of such required policy or policies of insurance shall not be construed to limit Lessee' s liability hereunder nor to fulfill the indemnification provision and requirements of this IN

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ITEM NO. 20.

Lease. Notwithstanding the policy or policies ofinsurance, Lessee shall be obligated for the full and total amount of any damage, injury, or loss caused by or connected with this Lease or with use or occupancy ofthe Premises.

19. EMINENT DOMAIN.

19. 1 If all or any part ofthe Premises ( or the building in which the Premises are located) is condemned by a public entity in the lawful exercise of its power of eminent domain, this Lease shall cease as to the part condemned. The date of such termination shall be the effective date of possession of the whole or part of the Premises by the condemning public entity.

19. 2 If only a part is condemned and the condemnation of that part does not substantially impair the capacity of the remainder to be used by Lessee for the purposes required by this Lease, Lessee shall continue to be bound by the terms, covenants, and conditions of this Lease. However, the then monthly rent shall be reduced in proportion to the diminution in value ofthe Premises. Ifthe condemnation of a part of the Premises substantially impairs the capacity of the remainder to be used by Lessee for the purposes required by this Lease, Lessee may:

A. Terminate this Lease and thereby be absolved of obligations under this Lease which have not accrued as ofthe date ofpossession by the condemning public entity; or
B. Continue to occupy the remaining Premises and thereby continue to be bound by the terms, covenants and conditions of this Lease. If Lessee elects to continue in possession of the remainder of the Premises, the monthly rent shall be reduced in proportion to the diminution in value of the Premises.

C. Lessee shall provide Town with written notice advising Town of Lessee' s choice within thirty ( 30) days of possession of the part condemned by the condemning public entity.

19. 3 Town shall be entitled to and shall receive all compensation related to the condemnation, except that Lessee shall be entitled to: ( a) that portion of the compensation which represents the value for the remainder of the Lease term of any Lessee- constructed improvements taken by the condemning public entity, which amount shall not exceed the actual cost of such improvements reduced in proportion to the relationship of the date improvements were completed to the end of the then current Lease term, using a straight line approach; and ( b) any amount specifically designated as a moving allowance or as compensation for Lessee' s personal property. Lessee shall have no claim against Landlord for the value of any unexpired term of this Lease.
19

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ITEM NO. 20.

20. DISPUTE RESOLUTION.

20. 1 Unless otherwise mutually agreed to, any controversies between Lessee and Town regarding the construction or application ofthis Lease, and claims arising out ofthis Lease or its breach shall be submitted to mediation within thirty (30) days of the written request of one Party after the service ofthat request on the other Party.

20. 2 The Parties may agree on one mediator. Ifthey cannot agree on one mediator, the Party demanding mediation shall request the Superior Court of Santa Clara County to appoint a mediator. The mediation meeting shall not exceed one day (eight ( 8) hours). The Parties may agree to extend the time allowed for mediation under this Lease.

20. 3 The costs of mediation shall be borne by the Parties equally.

20. 4 Mediation under this section is a condition precedent to filing an action in any court. In the event of litigation arising out of any dispute related to this Lease, the Parties shall each pay their respective attorney' s fees, expert witness costs and cost of suit, regardless of the outcome of the litigation.

21. NON - LIABILITY OF OFFICIALS AND EMPLOYEES OF THE TOWN.

No official or employee ofTown or Lessee shall be personally liable for any default or liability under this Lease.

22. NON - DISCRIMINATION

22. 1 Non - discrimination in Lease Activities. Lessee agrees that in the performance of this Lease and in connection with all of the activities Lessee conducts on the Premises, it shall not discriminate against any employee or person because of the race, skin color, gender, age, religion, disability, national origin, ancestry, sexual orientation, housing status, marital status, familial status, weight or height of such person. Lessee acknowledges that is familiar with the provisions set forth in Section 2. 30. 510 of the Los Gatos Municipal Code relating to nondiscrimination in employment and Section 9. 73 ofthe Los Gatos Municipal Code relating to Town policy against arbitrary discrimination.

22. 2 Human Rights Policy. In connection with all activities that are conducted upon the Premises, Lessee agrees to accept and enforce the statements of policy set forth in Section

9. 73. 010 which provides: " It is the policy of the Town of Los Gatos to affirm, support and protect the human rights of every person within its jurisdiction. These rights include, but are not limited to, equal economic, political, and educational opportunity; equal accommodations in all business establishments in the Town; and equal service and protection by all public agencies of the Town."

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ITEM NO. 20.

23. INDEPENDENT CONTRACTOR.

It is agreed that Lessee shall act and be an independent contractor and not an agent nor employee of Town.

24. CONFLICT OF INTEREST.

Lessee shall at all times avoid conflict of interest or appearance of conflict of interest in performance of this agreement. Lessee warrants and covenants that no official or employee of Town nor any business entity in which any official or employee of Town is interested: ( 1) has been employed or retained to solicit or aid in the procuring of this agreement; or ( 2) will be employed in the performance of this agreement without the divulgence of such fact to Town. In the event that Town determines that the employment of any such official, employee or business entity is not compatible with such official' s or employee' s duties as an official or employee of Town, Lessee upon request of Town shall immediately terminate such employment. Violation of this provision constitutes a serious breach of this Lease and Town may terminate this Lease as a result of such violation.

25. MEMORANDUM OF LEASE.

Following execution of this Lease, either party, at its sole expense, shall be entitled to record a Memorandum of Lease in the official records of Santa Clara County. Upon termination or expiration of this Lease, Lessee shall execute and record a quitclaim deed as to its leasehold interest.

26. ESTOPPEL CERTIFICATE.

Each Party shall, from time to time, upon at least thirty (30) days prior written notice from the other Party, execute, acknowledge and deliver to the requesting Party a statement in writing: (i) certifying this Lease is unmodified and in full force and effect, or, if modified, stating the nature of the modification and certifying that the Lease, as modified, is in full force and effect, and the date to which the rental and other charges, if any, have been paid; and, ( ii) acknowledging that there are not to the responding Party' s knowledge, any defaults, or stating if any defaults are claimed. Any such statement may be relied upon by any prospective purchaser or encumbrancer ofthe Town Property or any prospective assignee or sublessee.

27. LIENS.

Lessee agrees at its sole cost and expense to keep the Premises free and clear of any and all claims, levies, liens, encumbrances or attachments; provided, that Lessee may contest and such claim, levy, lien, encumbrance or attachment by appropriate proceedings and in a manner which stays the enforcement of the same.

28. VACATING.

Upon termination ofthe tenancy, Lessee shall completely vacate the Premises, including the removal of any and all of its property. Before departure, Lessee shall return keys and personal property listed 21

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ITEM NO. 20.
on the inventory to Town in good, clean and sanitary condition, reasonable wear and tear excepted.

Lessee shall allow Town to inspect the Premises to verify the condition of the Premises and its contents.

29. NOTICES.

All notices to the Parties shall, unless otherwise requested in writing, be sent to Town addressed as follows:

Town of Los Gatos
Attention: Town Manager
110 E. Main Street
Los Gatos, CA 95030
And to Lessee addressed as follows:

Los Gatos - Saratoga Community Education and Recreation Attention: Executive Director
123 E. Main Street
Los Gatos, CA 95030
Notices may be served upon either Party in person, by first class mail, or by certified mail whether or not said mailing is accepted. Ifnotice is sent via facsimile, a signed, hard copy of the material shall also be mailed. The workday the facsimile was sent shall control the date notice was deemed given if there is a facsimile machine generated document on the date of transmission. A facsimile transmitted after 1: 00 p.m. on a Friday shall be deemed to have been transmitted on the following Monday. These addresses shall be used for service of process.

30. TIME.

Time shall be of the essence in this Lease.
31, AMENDMENTS.

It is mutually agreed that no oral Leases have been entered into and that no alteration or variation of the terms of this Lease shall be valid unless made in writing and signed by the Parties to this Lease.

32. SIGNING AUTHORITY.

If this Lease is not signed by all Lessees named herein, the person actually signing warrants that he /she has the authority to sign for the others.

33. CAPTIONS.

The captions of the various sections, paragraphs and subparagraphs ofthis Lease are for convenience 22

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ITEM NO. 20.
only and shall not be considered or referred to in resolving questions of interpretation.

34. SURRENDER OF LEASE NOT MERGER.

The voluntary or other surrender of this lease by Lessee, or a mutual cancellation thereof, shall not work a merger, and shall, at the option of Town, terminate all or any existing subleases or subtenancies, or may, at the option of Town, operate as an assignment of any and all such subleases or subtenancies.

35. INTEGRATED DOCUMENT.

This Lease, including any exhibits attached hereto, embodies the entire agreement between Town and Lessee. No other understanding, agreements, conversations or otherwise, with any officer, agent or employee of Town prior to execution of this Lease shall affect or modify any of the terms or obligations contained in any documents comprising this Lease. Any such verbal agreement shall be considered as unofficial information and in no way binding upon Town. All agreements with Town are subject to approval of the Town Council before Town shall be bound thereby.

36. WAIVER.

Waiver by Town of one or more conditions of performance or any breach of a condition under this Lease shall not be construed as a waiver of any other condition of performance or subsequent breaches. The subsequent acceptance by a Party of the performance of any obligation or duty by another Party shall not be deemed to be a waiver of any term or condition of this Lease. The exercise ofany remedy, right, option or privilege hereunder by Town shall not preclude Town from exercising the same or any and all other remedies, rights, options and privileges hereunder and Town's failure to exercise any remedy, right, option or privilege at law or equity, or otherwise which Town may have, shall not be construed as a waiver.

37. INTERPRETATIONS.

In construing or interpreting this Lease, the word " or" shall not be construed as exclusive and the word "including" shall not be limiting. The Parties agree that this Lease shall be fairly interpreted in accordance with its terms without any strict construction in favor of or against any other Party.

38. SEVERABILITY CLAUSE.

If any provision of this Lease is held to be illegal, invalid or unenforceable in full or in part, for any reason, then such provision shall be modified to the minimum extent necessary to make the provision legal, valid and enforceable, and the other provisions of this Lease shall not be affected thereby.

39. GOVERNING LAW.

This Lease shall be governed and construed in accordance with the statutes and laws of the State of California.
23

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ITEM NO. 20.

40. VENUE.

In the event that suit shall be brought by any Party to this Lease, the Parties agree that venue shall be exclusively vested in the state courts of the County of Santa Clara.

41. COMPLIANCE WITH LAWS.

The Parties hereto shall comply with all applicable laws, ordinances, codes and regulations of the federal, state and local governments in the performance of their rights, duties and obligations under this Lease.

42. BROKERS.

Each party represents that is has not had dealings with any real estate broker, finder, or other person, with respect to this lease in any manner. Each Party shall hold harmless the other party from all damages resulting from any claims that may be asserted against the other party by any broker, finder, or other person with whom the Indemnifying Party has or purportedly has dealt.

43. ATTACHMENTS TO LEASE.

The following exhibits are attached to and made a part ofthis Agreement:

A" — Description of Subject Premises
B" — Inventory of Fixtures
C" — Standard Insurance Requirements
D" — Los Gatos Neighborhood Center Policies and Procedures E" — Los Gatos Neighborhood Center Public Use Rental Fee Schedule F" — Senior Services Scope of Work
24

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ITEM NO. 20.

IN WITNESS WHEREOF, the parties have executed this Lease the day and year first above written.

TOWN:

Town of Los Gatos
Greg Larson, Town Manager a
ATTEST:

Jac ie Rose, Town Clerk Adminstrator
APPROVED AS TO FORM:
9-P, 1/
Korb, Town Attorney
25 LESSEE:

Los Gatos - Saratoga Community Education
And Recreation '
i
Steve Rauwolf, cutive Director

Page 552 ends

ITEM NO. 20.

LEASE AGREEMENT

BETWEEN

TOWN OF LOS GATOS
AND

LOS GATOS - SARATOGA COMMUNITY EDUCATION AND RECREATION

EXHIBIT A

DESCRIPTION OF SUBJECT PREMISES
A two -story office and public use building of approximately twelve thousand ( 12, 000) square feet in total with rooms including the following: On the first floor, two ( 2) large meeting rooms; five ( 5) smaller meeting rooms /offices; one multi -user men' s restroom and one multi -user women' s restroom; a kitchen facility with a commercial refrigerator, range /oven, microwave oven, and steam tray; a reception office; and a reception area. On the second floor, eight ( 8) meeting rooms /offices, two ( 2) single user unisex rest rooms, and a large storage area. 26

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ITEM NO. 20.

LEASE AGREEMENT

BY AND BETWEEN

TOWN OF LOS GATOS, CALIFORNIA
AND

LOS GATOS - SARATOGA COMMUNITY EDUCATION AND RECREATION

EXHIBIT B

INVENTORY OF FIXTURES
Following is a list of fixtures currently contained in the Facility, and their locations. Town and LGS Recreation agree that Town and LGS Recreation will agree cooperatively as to which of these fixtures may be used by LGS Recreation in its operation of the Facility, and which may be retained by Town for its use as sublessee. Town makes no warranty as to the condition of fixtures, and Town and LGS Recreation agree that Town will not replace any fixtures as they end their useful lives.

Quantity Description Quantity Description
Lobby
1 Wooden Bench 2 Wooden Arm Chair
1 Wooden Corner Table
Senior Center /Room 1
1 Typing table 1 Coffee maker
5 Arm chair 1 Keyboard tray
1 Corner table
Room 2
24 Stacking chair — blue 1 Folding card table
1 White board 4 6' table
Room 3
19 Stacking chair 1 White board
4 6' table
Lounge / Rooms 4 and 5
1 Sofa — 3 person 1 Coffee table
27

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ITEM NO. 20.

Quantity Description Quantity Description
3 Arm chair 57 Stacking chair
1 Corner table 2 Folding chess table
5 Folding card table 1 Big screen television
1 Small television 1 Sofa — 2 person
1 Partition door
Room 6
1 White board 8 Stacking chair — blue
2 Folding card table
Large Hall /Rooms 11 and 12
25 4' round table 12 8' rectangle table
13 4' rectangle table 95 Stacking chair
1 Podium 1 Large overhead screen
1 Piano 10 Faux trees
2 Piano bench 1 Partition door
Kitchen
1 Garbage disposal 1 Oven /range
1 Dishwasher 1 Refrigerator
1 Freezer 1 Microwave
3 Steam tray 3 Steam tray lid
Room 206
32 Stacking chair 7 Folding card table
Room 214
26 Conference chair 2 A crescent table
1 Projector screen 12 Conference tables

Page 555 ends

ITEM NO. 20.

Quantity Description Quantity Description
1 Chalkboard
Miscellaneous
2 Microphone 1 Television / vcr on cart
29

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ITEM NO. 20.

LEASE AGREEMENT

BY AND BETWEEN

TOWN OF LOS GATOS, CALIFORNIA
AND

LOS GATOS- SARATOGA COMMUNITY EDUCATION AND RECREATION

EXHIBIT C

STANDARD INSURANCE REQUIREMENTS
Insurance Requirements for Lessee:

Lessee shall purchase and maintain the insurance policies set forth below on all of its operations under this Lease at its sole cost and expense. Such policies shall be maintained for the full term of this Lease and the related warranty period ( if applicable). For purposes of the insurance policies required under this Lease, the term " Town" shall include the duly elected or appointed council members, commissioners, officers, agents, employees and volunteers of the Town of Los Gatos, California, individually or collectively.

Coverages ( RL 28. 1A) S
Minimum Scope of Insurance
Coverage shall be at least as broad as:
1) Insurance Services Office Commercial General Liability coverage ( occurrence form CG 0001).
2) Insurance Services Office form number CA 0001 ( Ed. 1/ 87) covering Automobile Liability, code 1 ( any auto).
3) Workers' Compensation insurance as required by the State of California and Employer's Liability Insurance (for lessees with employees). 4) Property insurance against all risks of loss to any tenant improvements or betterments The policy or policies of insurance maintained by Lessee shall provide the following limits and coverages:

POLICY
1) Commercial General Liability
2) Automobile Liability
Including Owned, Hired and
Non -Owned Automobiles
30 MINIMUM LIMITS OF LIABILITY
1, 000, 000 per each occurrence for bodily
injury, personal injury and property damage
1, 000, 000 Combined Single Limit

Page 557 ends

ITEM NO. 20.
3) Workers' Compensation Statutory
Employers Liability $ 1, 000,000 per accident for bodily injury or disease
4) Lessee' s Property Insurance
Lessee shall procure and maintain property insurance coverage for:
a) all office furniture, trade fixture, office equipment, merchandise, and all other items of Lessee' s property in, on, at, or about the premises and the building, include property installed by, for, or at the expense of Lessee;
b) all other improvements, betterments, alterations, and additions to the premises.

Lessee' s property insurance must fulfill the following requirements:
a) it must be written on the broadest available " all risk" policy form or an equivalent form acceptable to the Town of Los Gatos.
b) for no less than ninety percent ( 90 %) of the full
replacement cost ( new without deduction for depreciation) of the covered items and property; and
c) the amounts of coverage must meet any coinsurance
requirements of the policy or policies.

RL 28. 2)
Deductibles and Self - Insured Retentions
Any deductibles or self - insured retentions must be declared to and approved by the Town. At the option of the Town either: the insurer shall reduce or eliminate such deductibles or self - insured retentions as respects the Town, its officers, officials, employees and volunteers; or the Lessee shall procure a bond guaranteeing payment of losses and related investigations, claim administration and defense expenses.

Insurance shall be in full force and effect commencing on the first day of the term of this Lease.

Each insurance policy required by this Lease shall:

1. Be endorsed to state that coverage shall not be suspended, voided, canceled by either party, reduced in coverage or in limits except after thirty (30) days' prior written notice by certified mail, return receipt requested, has been given to the Town.

2. Include a waiver of all rights of subrogation against the Town and the members ofthe Town Council and elective or appointive officers or employees, and each party shall indemnify the other against any loss or expense including reasonable attorney fees, resulting from the failure to obtain such waiver. The Town waives this requirement so long as the Lessee continues to participate in a self insurance pool of public entities that reserves the right ofsubrogation. A waiver of all rights of subrogation shall be required immediately upon the Lessee obtaining insurance through a self 31

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ITEM NO. 20.
insurance pool that does not reserve the right of subrogation or the Lessee obtaining insurance in the private insurance market.

3. Name the Town of Los Gatos as a loss payee on the property policy.

4. Provide that the Town, its officers, officials, employees, agents and volunteers are to be covered as insureds as respects: liability arising out of activities performed by or on behalf of the Lessee; products and completed operations of the Lessee; premises owned, occupied or used by the Lessee; or automobiles owned, leased, hired or borrowed by the Lessee. The coverage limits defined in a memorandum of understanding of a self insurance pool of public entities through which Lessee obtains insurance coverage shall be acceptable in lieu of these requirements of this paragraph 4 which shall apply to coverage obtained in the private insurance market.

5. Provide that for any claims related to this Lease, the Lessee' s insurance coverage shall be primary insurance as respects the Town, its officers, officials, employees, agents and volunteers. Any insurance or self - insurance maintained by the Town, its officers, officials, employees, agents or volunteers shall be excess of the Lessee' s insurance and shall not contribute with it.

6. Provide that any failure to comply with reporting or other provisions of the policies including breaches ofwarranties shall not affect coverage provided to the Town, its officers, officials, employees, agents or volunteers.

7. Provide that Lessee' s insurance shall apply separately to each insured against whom claim is made or suit is brought, except with respect to the limits of the insurer' s liability.

8. Lessee agrees to promptly pay to Town as Additional Rent, upon demand, the amount of any increase in the rate of insurance on the Premises or on any other part of Building that results by reason of Lessee' s act( s) or Lessee' s permitting certain activities to take place.

Acceptability of Insurers
All insurance policies shall be issued by California- admitted carriers having current A.M. Best' s ratings of no lower than A -:VII.
32

Page 559 ends

ITEM NO. 20.

LEASE AGREEMENT

BETWEEN

TOWN OF LOS GATOS
AND

LOS GATOS - SARATOGA COMMUNITY EDUCATION AND RECREATION

EXHIBIT D

LOS GATOS NEIGHBORHOOD CENTER POLICIES AND PROCEDURES
33

Page 560 ends

ITEM NO. 20.

ADMINISTRATIVE MANUAL

TOWN OF LOS GATOS
Subject: Los Gatos Neighborhood Center Page: 1 of 4 Section Number:

Policies and Procedures
Effective Dat /
p
Revised Date: 04/ 15/ 05

PURPOSE
The purpose of this policy is to set forth guidelines for renting the Los Gatos Neighborhood Center.

SCOPE
This policy pertains to any person or group applying to rent the Neighborhood Center.

POLICY
The Neighborhood Center serves Los Gatos' senior citizens, youth, civic and service groups, and residents, As part of a comprehensive community strategy to meet the needs of Los Gatos citizens, the Neighborhood Center houses a variety of services and activities in such areas as education, creative arts, counseling, recreation, leadership development, health, nutrition, social work, and other supportive services. Programs held at the Neighborhood Center respond to individual differences in lifestyle, values, experiences, needs, interests, abilities, skills, age, and health status by providing opportunities for a variety of types and levels of involvement.

Rooms in the Neighborhood Center may be rented for community activities and private parties. This document defines policies and procedures for Neighborhood Center use and reservation requirements.

NEIGHBORHOOD CENTER
Room # Maximum Occupancy Room Description
11 - 12 200 people banquet style setting; or
365 people auditorium style setting
Multi- Purpose Auditorium
4 -5 49 people Lounge - informal setting
206 25 people Craft Room
208 25 people Conference Room ( no food or
beverages allowed)
214 25 people Conference Room ( no food or
beverages allowed)
N: \CSD \8020 \REPORTS \NC GUIDELNS.wpd
34 April 26, 2005

Page 561 ends

ITEM NO. 20.

PRIORITY
The Town reserves the right to reschedule or cancel any scheduled use of the Neighborhood Center as warranted by the needs of the Emergency Operations Center ( EOC). Mandatory EOC and emergency police matters take priority over any and all room reservations.

ELIGIBLE APPLICANTS
The Downtown Neighborhood Center may be reserved by the categories of users listed below.

Category I
Government Agencies and Senior Organizations:
a) Federal, state, county, and municipal agencies that provide Los Gatos citizens a service.
b) Nonprofit organizations that provide activities specifically for Los Gatos' s senior citizens, including but not limited to Los Gatos - Saratoga Community Education and Recreation.

Community Organizations:
a) Nonprofit organizations that have obtained 501( c) 3 ruling ( must be documented by a ruling letter from the California Secretary of State).

Category II
b) Service Groups which provide recreational, cultural, leisure, or other community service activities to Los Gatos residents, including the Los Gatos- Saratoga Community Education and Recreation.
c) Public elementary, middle, and high schools serving Los Gatos residents.

Other Applicants:

Applicants not qualifying under Categories I or II may be considered under Category III as " residents" or " non- residents."
a). Resident: Applicants must reside within incorporated Town of Los Gatos limits, or be employed by the Town of Los Gatos municipal government.

Category III Applicant must show proof of residency or employment by the Town. To qualify as a " resident" group, at least 51 percent of the Board of Directors or membership attending the function must be Los Gatos residents. b). Non - Resident: Applicants who do not meet the definition of a resident, above, including City of Monte Sereno and Santa Clara County residents with a Los Gatos address.

INELIGIBLE APPLICANTS
Use of the Neighborhood Center shall not be granted for:

1. Commercial use by private groups or individuals for the purpose of sales, promoting or negotiating for sales for profit.

2. Any group or individual, political or otherwise, that acknowledges its intent to use the facility NACSD \$ 020 \REP0RTS \ NC GUIDELNS. wpd
35 January 5, 2005

Page 562 ends

ITEM NO. 20.
to advocate the overthrow of the United States Government or the State of California by force or violence or other unlawful means or to violate any other County, State, or Federal rules, regulations, ordinances, or laws.

3. Uses which are deemed to be of a hazardous nature or of a nature which endangers property or which are not in the public interest.

4. Use by groups or individuals who interfere with the regular conduct of Town business.

DEFINITIONS
Building Attendant.

For the Neighborhood Center, a Building Attendant is required if alcohol is served. A Building Attendant is also required iffifty or more people are in attendance and the event is scheduled during non - business hours. The Town will schedule the Building Attendant.

Security Guard.

If alcohol is served, regardless of meeting size or time, a security guard is required. The security guard is hired directly by the applicant, subject to approval of qualification by the Town. Verification of services must be submitted to the Neighborhood Center no later than two weeks prior to the scheduled event.

RESERVATION PROCEDURES
To reserve a room at the Neighborhood Center, applicants must first verify the room is available and that they fall within one of the three categories of eligible users. Applicants may either call the Neighborhood Center at ( 408) 354 -6820 or stop by during normal business hours to verify availability.

I. A temporary hold may be put on a room for up to five working days without a signed application. The hold is automatically released on the fifth day, if an application is not received. 2, Reservations are processed on a " first come, first served" basis. A reservation may be made up to six months in advance by submitting an application, Release of Liability, and any deposit required. All applications must be submitted with original signatures.

3. The following documents must be submitted and approved no later than two weeks prior to the scheduled event:

Certificate of Insurance and Endorsement:
1, 000, 000 liability insurance is required for standard use and when alcohol is not served 2, 000, 000 liability insurance is required if alcohol is served Release of Liability, Assumption of Risk and Indemnity Agreement Complete payment for room and Building Attendant if required. The Town will issue an invoice for the balance due. All checks are to be made payable to " The Town of Los Gatos." The Town cannot accept credit card payments.

Proof of security guard services if required.

NACM802MEPORTSW GUIDELNS. wpd 3
January 5, 2005
36

Page 563 ends

ITEM NO. 20.

Copies of any and all flyers, invitations, and or advertisements if the party or meeting is open to the public.

Copies of all required permits and Police approvals.

5. If an event is to be held when the Neighborhood Center is normally closed, after 5: 00 p. m.

Monday through Friday or during the weekend, a key for the building may be picked up from the receptionist on the day of the event or on the Friday before the weekend by 4: 30 p. m. Persons picking up keys must sign for them and be at least 18 years of age. Keys are to be returned immediately following the event by using the drop -box located in the lobby of the Neighborhood Center.

6. The Building Attendant will open and close the facility ( see tJse Regulation regarding the Building Attendant, attached).

APPROVED AS TO FORM:

Town Attorney
NACSD \8020 \REP0RTS \NC GUIDELNS,wpd
37

Page 564 ends

ITEM NO. 20.

Attachment A

NEIGHBORHOOD CENTER USE REGULATIONS
Any person or persons violating the established policies or constituting a public nuisance may be required to leave the facilities. Misuse of the facilities or failure to conform with other applicable Town, state, or federal rules, regulations, ordinances, or laws will be sufficient reason for terminating the permit or event.

The Town Manager, or a duly authorized representative on duty, shall have the right to enter all facilities at all times during any and all occupancies.

Liability:

Applicant is liable for all damage to the facilities and equipment resulting from the applicant' s use.

Applicant will be charged for the re- keying of the building for lost keys, facility and equipment repair costs, or equipment replacement costs resulting from applicant' s use.

The Town of Los Gatos is not responsible for accidents, injuries, illnesses, or loss of group or individual property. The Town requires proof of insurance coverage. Applicants must provide a Certificate of Insurance and Endorsement.

Security Deposit:

If a reservation is canceled 14 or more days before the scheduled event, 100 percent of the security deposit and room rental fees which have been paid to the Town will be returned. If notice of cancellation is given 13 or fewer days before the scheduled event, 50 percent of the room rental fees paid to the Town will be refunded; none of the security deposit may be refunded with a notice of fewer than 14 days.

Time Limits:

The facility may be reserved for up to 10 hours per event Age Requirements:

Applicants must be 18 years of age or older ( 21 or older if alcohol is to be served at the event) and must be present during the reserved use of the facility.

Groups composed of minors must be supervised by at least 1 adult for every 10 children (under the age of 18) at all times while they are using the facilities.

Food & Beverages:

Food and beverages are allowed in the Hall ( Rooms 11 & 12) and Lounge ( Rooms 4 & 5), only,.

Absolutely no food or drink shall be taken into the upstairs conference rooms.

Smoking:

Smoking is not permitted in or near the Neighborhood Center facilities, including parking and exit areas.

Room Set -Up:

Applicants are responsible for all set -up before their event, including setting up tables and chairs, and installing decorations. Applicants are also responsible for all clean -up after their event, including stacking of tables and chairs, and removing all decorations, special preparations, and personal items. Any desired N:\ CSD \ 8020 \ REP0RTS \ NC GUIDELNS. wpd
Ri
BRAYIN. W7701 W101 _ PJ

Page 565 ends

ITEM NO. 20.
decorating, or changes to the facilities, must be discussed with the Town at the time of application.

Applicants must include set -up and clean -up time in the scheduled hours of use. The facility must be left secure, clean, and in good order, Any decorations and special preparations are subject to the following restrictions:
a. All decorations must be flame proof or fire retardant. b. All decorations must be applied with low -tack painter' s tape. Using cellophane adhesive tape, nails, staples, screws, etc., is NOT allowed. All tape must be removed from all surfaces at the conclusion of the event.
c. Decorations may NOT be hung from light fixtures, ceiling, smoke detectors, emergency lights, or acoustical wall / ceiling tiles.
d. Absolutely NO open flames are allowed, including candles. e. All plants, trees, and shrubs must be in waterproof containers and must be carefully placed so as not to damage the floor or block fire exits.
f. No foreign substance may be applied to the floor.
g. No rice, birdseed, confetti, or any similar substance, may be thrown in or around the Neighborhood Center ( e. g., during wedding receptions).

Licensing & Permits:

The applicant shall procure at his /her own cost and expense, all permits and licenses required for the intended use or activity at the Neighborhood Center. This includes, but is not limited to:

1. Sales of alcohol requires a one -day liquor license from the Alcoholic Beverage Control Board, 100 Pasco de San Antonio, San Jose 408 - 277 -1200.

2. Gambling or wagering at the Neighborhood Center is prohibited without a permit from the Los Gatos / Monte Sereno Police Department, 110 East Main Street, Los Gatos 408 - 354 -5257.

3. A dance that is open to the public ( attendance of 50 or more persons) must be approved by the Chief of Police. Evidence of approval must be submitted to the Neighborhood Center at least two weeks prior to the scheduled event.

Noise Level:

All Neighborhood Center users are to respect the individual rights and properties of neighbors and tenants located by, near, and on Town property, Noise level is to be kept at a minimum.

Equal OpporgMitx
Users may not restrict membership on the basis of age, sex, color, race, marital status, sexual orientation, ancestry, physical or mental disability, medical condition, religion, place of national origin, or any other basis prohibited by law. Furthermore, use of the Neighborhood Center will not be restricted because of age, sex, color, race, marital status, sexual orientation, ancestry, physical or mental disability, medical condition, religion, place of national origin, or any other basis prohibited by law.

Exceptions:

Any exceptions to these use regulations must be approved, in writing, by the Town Manager, NACSD \8020 \ REI' ORTS\ NC GUIDELNS. wpd
39 PA'wwal' kfium

Page 566 ends

ITEM NO. 20.

LEASE AGREEMENT

BETWEEN

TOWN OF LOS GATOS
AND

LOS GATOS- SARATOGA COMMUNITY EDUCATION AND RECREATION

EXHIBIT E

LOS GATOS NEIGHBORHOOD CENTER PUBLIC USE RENTAL FEE SCHEDULE

COMMUNITY SERVICE FEES
A. Los Gatos Downtown Neighborhood Center Fee Schedule
Rental fees may be paid at the time of the application or any time no less than two weeks before the scheduled date.
a. If rental fees are not paid at least two weeks prior to the event, then the application may be terminated.
b. If a reservation is cancelled at least two weeks before the scheduled event, 100 percent ofthe security deposit and room rental fees which may have been paid to the Town will be returned.

C. If notice is given to cancel an event less than two weeks before the scheduled event half of the room rental fees and none of the security deposit paid to the Town will be returned d. Any required security deposit must be paid at the time the reservation form is submitted to secure the reservation.

Conference
Hall Kitchen Lounge Room
Category I: Government Agencies, No No No No
Community Service Organizations Charge Charge Charge Charge Serving Los Gatos' Senior Citizens,
And Neighborhood Center Tenants
Category II: Community Service Groups

1. Activities (non - profits)
There is a 2 -hour minimum for all rental usage.
a. Resident 30. 00 /hr No Charge 15. 00 /hr 10.00mr
b. Non - Resident 100. 00 /hr No Charge 40. 00 /hr 30.00/hr c. Security Deposit 300. 00 No Charge 100. 00 100. 00
d. Security Deposit- alcohol 500. 00 No Charge 500. 00 500. 00 M

Page 567 ends

ITEM NO. 20.

2. Fees Charged for Fundraising Activities
100. 00 / hr No Charge 40. 00 / hr
There is a 2 -hour minimum for all rental usage.
b. Non - Resident 200. 00 / hr No Charge
a. Resident $ 100. 00 /hr No Charge 40. 00 /hr 30.O04Y
b. Non - resident $ 200. 00 /hr No Charge 80. 00 /hr 60.00/hr c. Security Deposit $ 300.00 No Charge 100. 00 100. 00
d. Security Deposit - alcohol $ 500.00 No Charge 500. 00 500.00 Conference
Hall Kitchen Lounge Room
Category III: Private Parties
There is a 2 -hour minimum for all rental usage.
a. Resident ( Including Town Employees) 100. 00 / hr No Charge 40. 00 / hr 30.00/hr b. Non - Resident 200. 00 / hr No Charge 80.00 /hr 60.00/hr c. Security Deposit 300. 00 No Charge 100. 00 100. 00
d. Security Deposit- alcohol 500. 00 No Charge 500. 00 500.00 Building Attendant:

A Building Attendant is required under any of the following circumstances:
alcohol is served
more than 50 people are in attendance
a meal is provided
Building Attendants are employed by the Town on behalf of the applicant. The cost paid by the applicant for the Building Attendant' s time is the prevailing wage set by the Town' s Salary Schedule, Time over 8 hours per day is charged at the prevailing overtime wage set by the Town' s Salary Schedule.

Security Guard:

Security Guards are hired directly by the applicant. Verification that services have been contracted for must be submitted to the Neighborhood Center office at least two weeks prior to the scheduled event. A Security Guard is required is required to be present at the facility under any of the following circumstances:
alcohol is served, and;
more than 75 people are in attendance
Applicants:

The Downtown Neighborhood Center may be scheduled by the categories of users listed below:

1. CateLyory I: Government Agencies; Senior Organizations, and Neighborhood Center Tenants. Groups qualifying as government agencies and senior organizations include the following:
41

Page 568 ends

ITEM NO. 20.

Federal, state, county, and municipal agencies that provide a community service for the citizens of Los Gatos.

Organizations, including the Los Gatos - Saratoga Department of Community Education and Recreation which provide activities specifically for Los Gatos'
senior citizens.

Neighborhood Center Tenants which provide a community service that does not involve fundraising.

Category II: Community Service Groups
Groups qualifying as community service groups include the following:

Nonprofit organizations, which have obtained 501( c) 3 ruling from the State must be documented by ruling letter from State).

Los Gatos Service and Community organizations - groups that provide recreational, cultural, leisure or other community service activities to Los Gatos residents, including the Los Gatos - Saratoga Department ofCommunity Education and Recreation.

Los Gatos Elementary School District and the Los Gatos Joint Union High School District.

Category III: Private parties
Resident
For private parties or wedding receptions to qualify for the resident fee, 60 /hr) the Neighborhood Center may be reserved either by a Los Gatos resident or by a non - resident's immediate family member who is a Los Gatos resident. An immediate family member is defined as: mother, father, sibling, and children of applicant, grandparents, stepchildren and parents.

Non - Resident
Applicants who do not meet above criteria.

Priority:

Category I applicants have priority over Category II and III applicants for use of the Center.

General Regulations:

1. Use is limited to ten hours.

2. If use exceeds hours on application form, then fee is charged at 1. 5 times the rate.

3. All checks made payable to the Town of Los Gatos

4. Refundable deposits are returned within forty- five days by the Town of Los Gatos. 42

Page 569 ends

ITEM NO. 20.

Definitions:

1. Resident
a. To qualify as a " resident" group, at least 51 percent of the Board of Directors or membership attending the function must be Los Gatos residents b. Documentation required for a. above: Drivers license or other personal picture identification, including the applicant' s address and telephone number.

2. Non - Resident
Non- resident" groups are those that meet all of the criteria of a community service group, but do not meet the definition of a " resident ".

3. Fundraising Activities
a. Community service groups applying for use of the facility to hold a fundraising activity or activity for which admission or a fee is charged must meet all of the criteria under a. above. Resident or non - resident rates are charged depending on the residence of members or activity attendees.
b. Tenants of the Town of Los Gatos applying for use of the facility to hold a fundraising activity will be required to pay the necessary fees under Category II.

B. Prouam Space for Non - Profit Agencies $ 1. 75 /sq. ft. /month Neighborhood Center tenants may schedule rooms in the facility for business purposes. Fees are not collected unless the value of the space scheduled exceeds $ 50 x sq. ft. leased on annual cumulative basis
43

Page 570 ends

ITEM NO. 20.

LEASE AGREEMENT

BETWEEN

TOWN OF LOS GATOS
AND

LOS GATOS- SARATOGA COMMUNITY EDUCATION AND RECREATION

EXHIBIT F

SENIOR SERVICES SCOPE OF WORK

DIRECT SERVICES
Los Gatos Community Education and Recreation shall ensure the provision of services /programs to include services /programs similar to the following list in scope and participation using its own staff or via contract:

1. Wednesday afternoon movies ( once per month)

2. Wednesday games program ( weekly)

3. Senior center dances ( once per quarter)

4. Bus trips ( once per quarter)

5. Senior Thanksgiving dinner ( one per year)

6. Senior picnic (one per year)

7. Senior show ( one per year)

8. Senior Center newsletter (bi- monthly)

9. Information and referral to other agencies ( ongoing)

10. Recreation classes will be expanded significantly as demand warrants. Examples include:
language, arts and crafts, computer, and other special interest classes.

INDIRECT SERVICES
Los Gatos Community Education and Recreation shall provide appropriate facility space and administrative support as needed for the following services, to be provided by outside agencies.

LGS Recreation is under no obligation to provide the services directly.

1. Health presentations ( once per month)

2. 55 -Alive driving class

3. Grief support group

4. Blood pressure screenings

5. Brown bag grocery distribution ( once per week)

6. Live Oak Senior Nutrition Program lunchtime meal service ( once per week)

7. Happy Hoofers walking group

8. Older Women' s group

9. HICAP insurance counseling ( by appointment)

10. Income tax preparation ( by appointment)

11. BART ticket sales ( ongoing)

12. Hosting and organizing new groups and affiliates as interests warrant. Examples include:
computer club, genealogy club, bridge club, etc.

Page 571 ends

ITEM NO. 20.
1 of 2
Third Amendment to Lease Agreement between Town and LGS Rec re: 123 E Main St.

ATTACHMENT 2

THIRD AMENDMENT TO LEASE AGREEMENT FOR THE YOUTH RECREATION CENTER BY

AND BETWEEN THE TOWN OF LOS GATOS AND LOS GATOS-SARATOGA COMMUNITY

EDUCATION AND RECREATION
This AMENDMENT TO AGREEMENT is dated for identification this 1st day of July, 2025 and amends that certain Lease Agreement for the Youth Recreation Center between the Town of Los Gatos and Los Gatos-Saratoga Community Education and Recreation dated October 1, 2004, made by and between the Town of Los Gatos, ("Town,") and Los GatosSaratoga Community Education and Recreation, a Joint Powers Authority (“Tenant”).

RECITALS
A. The Town and Tenant entered into a Lease Agreement for the property located at 123 East Main Street, Los Gatos (Youth Recreation Center) effective October 1, 2004, and extending through June 30, 2007 (“YRC Lease Agreement”), a copy of which is attached hereto and incorporated by reference as Exhibit A to this Amendment.

B. The Town and Tenant executed a First Amendment to the YRC Lease Agreement effective July 1, 2007, and extending through June 10, 2010 (“YRC First Amendment”), a copy of which is attached and incorporated by reference as Exhibit B to this Amendment.

C. The Town and Tenant executed a Second Amendment to the YRC Lease Agreement effective July 1, 2010 (“YRC Second Amendment”), a copy of which is attached and incorporated by reference as Exhibit C to this Amendment.

D. The Town and Tenant entered into a separate Lease Agreement for the property located at 208 East Main Street, Los Gatos (Adult Recreation Center) effective January 1, 2010, and extending through December 31, 2029 (“ARC Lease Agreement”).

E. Now, therefore, the parties hereto agree as follows:

AMENDMENT

1. Section 2 “Term” of YRC Lease Agreement shall be amended to read: The Lease Agreement term shall extend through December 31, 2029, subject to the termination provisions set forth in the Lease Agreement.

Page 572 ends

ITEM NO. 20.
1 of 2
Third Amendment to Lease Agreement between Town and LGS Rec re: 123 E Main St.

2. The first sentence of Section 3 (c) of the YRC Lease Agreement Section 3.c. is amended to read as follows: “Payment of rent and landscaping services fee shall be due and payable on the first day of each and every quarter (January 1, April 1, July 1, and October 1).” All other terms, covenants, and conditions of Section 3.c. of the YRC Lease Agreement remain in full force and effect except as expressly modified herein.

3. A Section 23 is added to read as follows: “Adult Recreation Center (ARC) Lease Agreement: In the event that the ARC Lease Agreement is terminated or modified, the Town shall have the right to unilaterally terminate or modify the YRC Lease Agreement.”

4. All other terms, covenants, and conditions of the original YRC Lease Agreement remain in full force and effect except as expressly modified herein.

IN WITNESS WHEREOF, TOWN OF LOS GATOS and LOS GATOS-SARATOGA COMMUNITY EDUCATION AND RECREATION have executed this THIRD LEASE AMENDMENT.

TOWN OF LOS GATOS LOS GATOS-SARATOGA

COMMUNITY EDUCATION AND

Page 573 ends

ITEM NO. 20.

RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:

Town of Los Gatos
Clerk Admjnistrator
PO Box 949
Los Gatos CA 95030

FREE RECORDING PURSUANT TO
GOVERNMENT CODE SECTION 6103
DOCUMENT: 18128636
\UIIII IHI 11 1 lrn Ill �

BRENDA DAVIS

SANTA CLARA COUNTY RECORDER
Recorded at the request of
City
Pages: 13
Fees... * No Fees
Taxes ...

Copies .. ___ _
AMT PAlD
RDE tt 003
12/06/2004
2:24 PM

CLERK DEPARTMENT
AGR _______ _
IHH _______ _
ORD __ �--=�;---"T--
REC�Q�f_,_, .=D..-B__,4i---
RESO _______ _

LEASE AGREEMENT BY AND BETWEEN

THE TOWN OF LOS GATOS AND

LOS GATOS-SARATOGA COMMUNITY

EDUCATION AND RECREATION
SEPARATE PAGE, PURSUANT TO GOVT. CODE 27361.6
N:CLK/RECORDINGS/Scparate Covcr.wpd

Page 574 ends

ITEM NO. 20.

EXHIBIT A AGR 04.185

Page 575 ends

ITEM NO. 20.
immediately previous.
b. Landscaping Services: The Town shall provide weekly landscaping services for the Building, consisting of maintenance of the lawn, trees, shrubbery, and irrigation system. Upon commence:µient of the lease term, TENANT shall pay the Town Two Hundred Dollars and No Cents ($200.00) per month to TOWN for these services. Additional services requested by TENANT, such as new plantings, may be performed at TOWN's discretion, at an additional price to be agreed upon by TOWN and TENANT. On each July 1 following the commencement of the lease te1m, the landscaping services fee shall be increased by a percentage equal to the percentage increase, if any, in the Consumer Price Index (CPI) - All Urban Consumers, for the San Francisco-Oakland-San Jose, CA area, from the June the previous year to the June immediately previous. c. Payment: Payment of rent and landscaping services fee shall be due and payable on the first day of each month. Payment shall be made payable to "Town of Los Gatos," and mailed to: Town of Los Gatos, Accounts Receivable, P.O. Box 697, Los Gatos, CA, 95031. Should the rent payment be thirty-one (31) or more days in arrears, a late fee of Fifty Dollars and No Cents ($50.00) per day shall be assessed for each day payment remains outstanding, in addition to the amount of rent and landscaping services fee due.

4. Possessory Interest Property Tax: Pursuant to Revenue and Taxation Code section 107 .6, TENANT is hereby notified thatthe property interest created by its lease may be subject to property taxation due to TENANT' s possessory interest in the Building. In such an event, TENANT is liable under this Lease for payment of such property tax.

5. Use of Premises: TENANT shall use said premises only for the purpose of providing educational and recreational services to Los Gatos area residents, and in connection therewith, shall comply with all governmental laws and regulations. Anticipated uses included recreational and informational activities, social events, and informal gatherings.

No alcohol may be served on the premises at any time without the prior written consent of the TOWN.

6. Signs: TENANT shall not place or permit to be placed in, upon, about or outside of said premises or any pmt of the building any sign without the prior written consent of the TOWN. All existing signs at the time of the commencement of this Agreement are considered approved at the signing of this lease Agreement.

7. Illegality Clause: TENANT shall not use the premises or suffer or permit anything to be done in or about the premises or the property which will be in conflict with any law, statute, zoning resti.i.ction, ordinance or governmental law, rule, regulation or requirement of public authority now in force or which may hereafter be enforced.

TENANT shall not commit any p1i.vate or public nuisance or any other act or thing which might or would disturb the quiet enjoyment of surrounding prope1ty. TOWN at its option may terminate this Lease by giving ten (10) days written notice of its election

Page 576 ends

ITEM NO. 20.
to terminate for any and all violations of the provisions contained herein.

8. Entry: TENANT shall pemrit TOWN, its agents or assigns to enter the premises at any time to inspect the premises or make repairs.

9. Assignment and Sub-Leasing: The terms and conditions ofthis Lease are based upon the unique and specific services to be offered by the TENANT and the TENANT's record of service in the community. TENANT shall neither assign this Lease, nor sublet the whole or any part thereof, without the prior written consent of TOWN.

10. Utilities: TENANT shall pay for all utilities including, but not limited to, water, gas, and electricity; but not including garbage removal and recycling services. TOWN shall contract for garbage removal and recycling services for Building, at no charge to TENANT.

11. Maintenance: TENANT shall maintain the interior of said premises. TENANT shall not make any structural alterations to the premises without the prior written consent of the TOWN. TOWN shall maintain the exterior of said premises and the grounds thereof, as agreed to in section 3 above. However, if repair is necessary due to the action or negligence of TENANT, its agents, assigns or clients, TENANT shall obtain those repairs at its own expense or pay the TOWN to repair at a charge to the TENANT of time and one-half for services rendered, and for the actual cost of materials.

12. Abandonment: If TENANT abandons or vacates the premises for any period in excess of thirty (30) days, TOWN may, at its option, tenninate this Lease and take possession of the property.

13. Insurance: TENANT shall procure and maintain with a reputable insurance company, insurance as set forth in Exhibit A, attached, and incorporated herein by reference.

14. Property Insurance: TOWN may or may not choose to obtain property insurance for the Building. However, TENANT is solely responsible for obtaining insurance to protect any personal property that it may choose to place in the Building under this Lease, and the TOWN shall not provide such insurance on this Lease.

15. Destruction of Premises:
a. If the structures on the leased premises are destroyed to an extent of more than fifty percent (50%) of the total floor area existing prior to the destruction, either party is entitled to terminate this Lease Agreement and TOWN is under no obligation to repair, replace, or restore any portion of the leased premises.

Tetmination of this Lease shall be by giving written notice of the termination to either party no later than ninety (90) days after the event causing the damage or destruction. The termination shall be effective on the date specified in the notice.

Upon termination of the Lease Agreement pursuant to this section, all insurance

Page 577 ends

ITEM NO. 20.
proceeds payable because of the damage or destruction of the structures on the leased premises shall be paid to and be the property of TOWN. b. If because of the destruction or damage to the leased premises, the leased premises are entirely unsuitable or inadequate for the use specified in Paragraph 5 above, all monthly rent shall temporarily abate effective the date o_fthe destruction or damage. If the damage or destruction to the leased premises only makes a portion of the leased premises unsuitable or inadequate for such use, then the monthly rent shall only be abated so· that the rent then due and payable shall be an amount equivalent to the floor area of the structures on the leased premises usable for the use specified divided by the total floor area of all structures prior to the damage or destruction, and then multiplied by the monthly rent in effect just prior to the damage or destruction.
c. Under no circumstances does the TOWN have any obligation to provide the TENANT with an alternative property to conduct its operations. d. TENANT agrees to fully cooperate with the TOWN in investigating the cause of any damage or destruction of the leased premises, and in permitting and allowing any repair or reconstruction to occur.

16. Indemnification: TENANT shall indemnify, save harmless, and defend TOWN from all liability from loss, damage, or injury to persons or property in any manner arising out of or incident the performance of this Lease, including without limitation all consequential damages.

17. Severability: The provisions of this Lease are declared to be severable, and if any provision is invalidated by any court, the remaining provisions shall not be affected and shall be fully enforceable, unless such enforcement would be unreasonable or would frustrate the purposes of this Lease.

18. Surrender of Premises: TENANT shall promptly surrender said premises to TOWN at the expiration of the term of this Lease, or any sooner termination thereof, in the same condition it was received, in good order and repair, reasonable wear and tear and damage by the elements excepted.

19. Termination: Either party may terminate this Lease without cause one hundred and eighty (180) days advance written notice. Such termination notice shall be sent to:

TOWN
Debra J. Figone, Town Manager
Town of Los Gatos
P.O. Box 949
Los Gatos, CA 95031
TENANT
Steve Rauwolf, Executive Director
Los Gatos-Saratoga Community Education
& Recreation
123 East Main Street
Los Gatos, CA 95030

Page 578 ends

ITEM NO. 20.

20. Scope of Lease: This Lease constitutes the entire agreement between the parties. This Lease may not be modified except by an agreement in writing signed by the party against whom the enforcement of any waiver, change, modification or discharge is sought. The covenants and conditions in the Lease shall bind the successors in interest of the party.

21. Disputes: In any dispute between the parties over this Lease, the prevailing party shall be entitled to costs and attorney's fees.

22. Equal Access and Opportunity: TENANT warrants that it shall comply with all applicable regulations and laws governing equal access to its programs and equal employment opportunity. Neither TENANT nor any of its officers, employees, volunteers, or agents shall discriminate in the employment in or access to any of TENANT's programs because of race, color, national origin, ancestry, physical or mental disability, marital status, sex, sexual orientation, or age unless based on a bona fide occupational qualification defined under the California Fair Employment and Housing Act.

Page 579 ends

ITEM NO. 20.

IN WITNESS WHEREOF, the parties have executed this Lease this .1.di__ day of /Yt,v ei11/;tt: , 2004.

TOWN OF LOS GATOS
APPROVED AS TO CONTENT:
kner, Community Services Director
APPROVED AS TO FORM:

ATTESTED TO:

LOS GATOS-SARATOGA

COMMUNITY EDUCATION AND

RECREATION

Page 580 ends

ITEM NO. 20.

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TOWN OF LOS GATOS, CALIFORNIA

ALL PURPOSE

ACKNOWLEDGMENT
State of California
County of Santa Clara
On 0tJD.bnb-W zJ , 2004, before me, MARLYN J. RASMUSSEN, CLERK ADMINISTRATOR, personally appeared DEBRA J. FIGONE, Town Manager, personally known to me to be the person whose name is subscribed to the within instrument and acknowledged to me that she executed the same in her authorized capacity, and that by her signature on the within instrument the entity upon behalf of which the person acted, The Town of Los Gatos, executed the instrument.

WITNESS my hand and official seal. �� Man.�yn J. Rad 1 u�en, CMC Clerk Administrntor, Los Gatos, California
CAPACITY CLAIMED BY SIGNER:

Municipal Officer of the Town of Los Gatos
DESCRIPTION OF ATTACHED DOCUMENT:

Title of Document: Lease/Town of Los Gatos/Los Gatos-Saratoga Community Education and Recreation
Number of Pages: 13
Date of Document I I jg /tJ 4-
f
Signer(s) Other than Named Above:

Steve Rauwolf, Executive Director, Los Gatos-Saratoga
Community Education and Recreation

Page 582 ends

ITEM NO. 20.

CLERK DEPARTMENT
AMENDMENT TO LEASE AGREEMENT AGR O `2 , O _ —
BY AND BETWEEN THE TOWN OF LOS GATO$HH
AND LOS GATOS - SARATOGA COMMUNITY EDUCATION AN41UCREATION RE
This AMENDMENT TO AGREEMENT is entered into this 0 day
and between the Town of Los Gatos, a municipal corporation of the State of Calfiorn lie- n -eT -"— y
referred to as " TOWN," and LOS GATOS - SARATOGA COMMUNITY EDUCATION AND RECREATION, a Joint Powers Authority, hereinafter referred to as " TENANT ".

RECITALS
WHEREAS, TOWN and TENANT executed a Lease Agreement effective October 1, 2004, and extending through June 30, 2007; and
WHEREAS, TOWN and TENANT wish to amend the Lease Agreement.

Now therefore, the parties hereto agree as follows:

1. Replace Section 2, " Term," of the Lease Agreement with the following: The lease term shall commence on July 1, 2007 and extend through June 30, 2010, and continue from month to month thereafter, subject to the termination provisions set forth in this Lease.

2. The terms and conditions of the Lease Agreement shall remain in full force and effect except as herein expressly amended.

In witness whereof, the parties have executed this Amendment to Lease Agreement on the date written above, effective July 1, 2007.

TOWN OF LOS GATOS
Urry- Korb, Town Attorney
Approved as to ontent:

Re ina . Falkner, Community Services Dir.

Debra Figone, Town Manager
ATTEST:

J ekie . Rose, Clerk Administrator j
w

LOS GATOS - SARATOGA COMMUNITY

EDUCATION AND RECREATION
Steve Rauwolf, Exe tive Director
NACSD \ Agreements \LG Rec Dept \FY2008toFY2010amendment. doc

EXHIBIT B

Page 583 ends

ITEM NO. 20.

CLE PART NT
AGR f
M
11 OLQ t
S

SECOND AMENDMENT TO LEASE AGREEME NT ORD

BY AND BETWEEN THE TOWN OF LOS GATOS REC
AND LOS GATOS - SARATOGA COMMUNITY EDUCATION AND *k"XFAM0Y This Amendment to Agreement is entered into this _ day of 1._ 2010, by and between the Town of Los Gatos, a municipal corporation of the State of Calif a, hereinafter referred to as "Town," and Los Gatos - Saratoga Community Education and Recreation, a Joint Powers Authority, hereinafter referred to as "Tenant."

RECITALS
WHEREAS, Town and Tenant executed a Lease Agreement effective October 1, 2004, and extending through June 30, 2007; and
WHEREAS, Town and Tenant executed an Amendment to Lease Agreement effective July 1, 2007 and extending through June 30, 2010; and
WHEREAS, Town and Tenant wish to again amend the Lease Agreement.

Now therefore, the parties hereto agree as follows:

1. Section 2, "Term," of the Lease Agreement shall be replaced with the following: The Lease term shall commence on July 1, 2010 and extend through December 31, 2011, and continue from month to month thereafter, subject to the termination provisions set forth in this Lease.

2. Section 3, "Lease Fees," Subsection a, "Rent," ofthe Lease Agreement shall be replaced with the following: Base Rent The rent to be paid by Tenant shall be calculated via multiplication of approximate size of Premises, six thousand four hundred seventy-nine 6,479) square feet, by a percentage ofthe fair market rent for the Premises (the "MW).

The initial FMR shall be two dollars and fifty cents ($2.50) per square foot. The initial rent to be paid by Tenant shall be one thousand six hundred nineteen dollars and seventyfive cents ($1, 75) 619.per month without reduction or offset (except as otherwise provided in this Lease), calculated using ten percent (10 %) of FMR. The FMR shall be adjusted annually on each January 1 based on the State of California Department of Industrial Relations, Division of Labor Statistics and Research'sConsumer Price Index, All Urban Consumers, All Items, San Francisco - Oakland -San Jose, California. The index for the final quarter of 2009 is established as the base index. Percentage and adjustments to the original lease payments shall be as indicated by percentage changes in said index.

3. Section 3, "Lease Fees," Subsection b, "Landscaping Services," of the Lease Agreement shall be replaced with the following: The Town shall provide weekly landscaping services for the Building, consisting of maintenance ofthe lawn, trees, shrubbery, and irrigation system. Upon commencement of the lease term, Tenant shall pay the Town two hundred fifty dollars and no cents ($250.00) per month for these services. Additional services requested by Tenant, such as new plantings, may be performed at Town's discretion, at an additional price to be agreed upon by Town and Tenant. The

EXHIBIT C

Page 584 ends

ITEM NO. 20.
landscaping services fee shall be adjusted annually on each January 1 based on the State of California Department of Industrial Relations, Division of Labor Statistics and Research's Consumer Price Index, All Urban Consumers, All Items, San FranciscoOakland-San Jose, California. The index for the final quarter of 2009 is established as the base index. Percentage and adjustments to the original lease payments shall be as indicated by percentage changes in said index.

4. The terms and conditions of the Lease Agreement shall remain in full force and effect except as herein expressly amended.

In witness whereof, the parties have executed this Amendment to Lease Agreement on the date written above, effective July 1, 2010.

TOWN:

Town of Los Gatos
Greg Larson, Town Manager
Regina A. Falkner, Community Services Director
APPROVED AS TO FORM:

ATTEST:

LESSEE:

Los Gatos-Saratoga Community Education
And Recreation
S��Director

Page 585 ends

ITEM NO. 20.

TOWN OF LOS GATOS

COUNCIL AGENDA REPORT
MEETING DATE: 06/17/2025
ITEM NO: 21
DATE: June 9, 2025
TO: Mayor and Town Council
FROM: Chris Constantin, Town Manager
SUBJECT: Authorize the Town Manager to Negotiate and Execute a Lease Agreement with Anwar and Masoma Shoja, for 45 North Santa Cruz Avenue RECOMMENDATION:

Authorize the Town Manager to Negotiate and Execute a Lease Agreement with Anwar and Masoma Shoja dba Franco Masoma, for 45 North Santa Cruz Avenue, in substantially the form presented.

FISCAL IMPACT:

This lease will generate approximately $40,000 in revenue annually. Income derived from this agreement will continue to be deposited to a Special Revenue Fund to be utilized for the ongoing capital needs of the Los Gatos Theatre.

STRATEGIC PRIORITIES:

This item is connected to the Town’s Core Goal of Community Character and the Strategic Priority of fostering the economic vitality of businesses in Town.

BACKGROUND:

On December 30, 2021, the Town completed the transfer of the Los Gatos Theatre property to the Town’s ownership. The property acquisition included assuming landlord oversight of the two leases for the existing retail properties at 41 and 45 North Santa Cruz Avenue.

On June 28, 2022, the Council authorized the Town Manager to execute a Lease Agreement with Anwar and Masoma Shoja dba Franco Masoma, for 45 North Santa Cruz Avenue,

Page 586 ends

ITEM NO. 21.

PAGE 2 OF 3
SUBJECT: Draft Lease Agreement 45 North Santa Cruz
DATE: June 17, 2025
commencing on July 1, 2022, and extending for a term of 36 months through June 30, 2025 (Attachment 1).

With the expiration of the current Lease Agreement, staff is bringing forward a new proposed lease agreement (Attachment 2).

The property consists of approximately four hundred twenty-five (425) square feet of space and is currently utilized for the sale of high-end designer clothing.

DISCUSSION:

Staff is recommending entering into another three-year agreement and keeping the terms of the current Lease Agreement, including the 3% escalator annually. The salient elements of the proposed Lease Agreement are as follows:

Agreement Elements Comments
Term Three (3) year initial agreement with one (2) two-year option.

Base Rent Schedule
(@ $7.65 per sq ft in first year)
Year Monthly Base
Rent
Annual Base
Rent
Year 1
(Months 1-12)
$3,251 $39,012
Year 2
(Months 13-24) $3,349 $40,188
Year 3
(Months 25-36) $3,449 $41,388
CONCLUSION:

The current tenant has an established business which complements the Los Gatos Theatre well.

Staff recommends maintaining Anwar and Masoma Shoja dba Franco Masoma, as tenants for 45 North Santa Cruz Avenue.

COORDINATION:

This staff report was coordinated with the Town Manager’s Office, Town Attorney’s Office, and Finance Department.

Page 587 ends

ITEM NO. 21.

PAGE 3 OF 3
SUBJECT: Draft Lease Agreement 45 North Santa Cruz
DATE: June 17, 2025
ENVIRONMENTAL ASSESSMENT:

In accordance with CEQA Guidelines Section 15301, this lease is categorically exempt from CEQA because it is a lease of an existing structure and will involve negligible expansion of an existing structure.

Attachments:

1. Current Lease Agreement

2. Proposed Lease Agreement

Page 588 ends

ITEM NO. 21.

Date June 22, 2022
1 LEASE AGREEMENT BETWEEN TOWN OF LOS GATOS AND
ANWAR and MASOMA SHOJA
Landlord: Town of Los Gatos
Tenant: Anwar and Masoma Shoja, as sole proprietors, dba Franco Masoma Premises: Approximately four hundred twentyfive (425) square feet of space within the Los Gatos Theatre Building (as more particularly defined in the Lease) comprising of 41, 43 and 45 N. Santa Cruz Avenue in Los Gatos, California 95030 in the Town of Los Gatos, Santa Clara County, California ("Property"). Consists of the area marked “New Retail Space” in Exhibit A.

Lease Term: 36 months
Lease Commencement Date: July 1, 2022
Rent Commencement Date: Rent shall begin on the date of lease commencement. Rent is established at $7.00 per square foot.

Base Rent Schedule:

Year Monthly Base Rent Annual Base Rent
Year 1
(Months 1-12) $2,975.00 $35,700.00
Year 2
(Months 13-24) $3,064.00 $36,768.00
Year 3
Months 25-36) $3,156.00 $37,872.00
Option to Extend: At the discretion of the Landlord, one (1) twenty-four (24) month option to extend at a 3% increase of prior base year, with at least 90-day written notice from the tenant asking for the extension.

Permitted Use: Retail
Landlord’s Address: The Town of Los Gatos – 110 E. Main Street, Los Gatos, California 95030, Attention: Finance Department
Landlord’s Telephone: 408-354-6836
Property Manager: Town of Los Gatos Attn: Arn Andrews Assistant Town Manager Tenant Address: TBD
Tenant Telephone: 408-595-1281
ATTACHMENT 1
DocuSign Envelope ID: 6C08F9EC-DA80-4D89-A5CC-56BB7F00A5BB

Page 589 ends

ITEM NO. 21.

Date June 22, 2022
2 Lease Exhibits:

Exhibit A: Premises
Exhibit B: Floor Plan
Town of Los Gatos ("Landlord") and Anwar and Masoma Shoja, as sole proprietors, dba Franco Masoma ("Tenant") agree as follows:

1. PROPERTY: Landlord rents to Tenant and Tenant rents from Landlord, an approximately four hundred twentyfive ( 425) square feet of space within the Los Gatos Theatre Building comprising 45 N. Santa Cruz Avenue in Los Gatos, California 95030 in the Town of Los Gatos, Santa Clara County, California ("Property"). Consists of the area marked “New Retail Space” in Exhibit A.

2. BASE RENT: Beginning on July 1, 2022, Tenant agrees to pay a monthly Base Rent (“Base Rent”) at the rate of $2,975 per month, with a 3 percent annual increase effective July 1 of each year. The base rent schedule shall be as follows:

Months Monthly Base Rent Annual Base
Rent
1-12 $2,975.00 $35,700.00
13-24 $3,064.00 $36,768.00
25-36 $3,156.00 $37,872.00

3. RENT:

A. Definition: "Rent" shall mean all monetary obligations of Tenant to Landlord under the terms of this Lease, except security deposit.

B. Payment: Rent shall be paid at Los Gatos Town Hall, Finance Department, or at any other location specified by Landlord in writing to Tenant.

C. Timing: Rent is payable in advance on the 1st day of each calendar month and is delinquent 10 days after.

4. TENANT OPERATING EXPENSES: Landlord shall provide, during normal business hours, to the extent applicable and not separately metered to the Premises, water, gas, power and electric current to the Premises. Tenant shall pay for all telephone, broadband, cable, security alarm services and other utilities and services specially or exclusively supplied and/or metered exclusively to the Premises or to Tenant, together with any taxes thereon. Under no circumstances shall Landlord be liable in damages or otherwise for any failure or interruption of any utility service being furnished to the Premises. No such failure or interruption shall entitle Tenant to terminate this Lease.

DocuSign Envelope ID: 6C08F9EC-DA80-4D89-A5CC-56BB7F00A5BB

Page 590 ends

ITEM NO. 21.

Date June 22, 2022
3 Tenant shall be responsible and directly pay for all other charges, including, but not limited to, Town permit fees, fees for any regulatory licenses or inspections, or other governmental charges such as unsecured business property tax, possessory interest tax, or ABC permits.

5. Taxes, Assessments, Fees, and Charges: The property interests created by this Lease may be subject to property taxation and Tenant, in whom the possessory interest is vested, will be responsible for the timely payment of any property taxes levied on such possessory interest. Tenant agrees to pay before delinquency all lawful taxes, assessments, fees or charges which at any time may be levied by the state, county, city or any tax or assessment levying body against the transfer of the leasehold interest hereunder upon recordation or otherwise, or upon any activity carried on under this Lease, any interest in this Lease or any possessory right which Tenant may have in or to the Premises by reason of its use or occupancy thereof or otherwise
Tenant specifically acknowledges that, in accordance with Revenue and Taxation Code Section 107.6, the Premises may be subject to possessory interest tax and that Tenant is responsible for any possessory interest tax levied on Tenant’s leasehold interest in the Premises.

6. TERM:

Lease: is for a term of 3 years (36 months) and terminates on June 30, 2025 at 6:00 PM.

7. EXTENSION OPTION: Provided Tenant has not been late in payment of rent more than 2 times in a calendar year, Tenant shall have one (1) option to extend the Term of the Lease beyond the expiration date for an additional period of twenty-four (24) months by giving Landlord and the Town’s Property Manager a written notice of such election no later than 90 days prior to the expiration of the Lease. The option to exercise the extension notice shall be given by certified or registered mail (return receipt requested) or by Federal Express, United Parcel Service or other overnight courier service which obtains personal signatures upon delivery. If Landlord does not receive the notification to extend the term within the time period provided above, all rights under the extension option shall terminate. Tenant shall have no right to exercise the extension option notwithstanding any provision to the contrary while Tenant is in default of the Lease beyond any applicable cure period.

A. Monthly Base Rent During Extended Term: Monthly Base Rent for the extended term shall be 3% increase of prior base year with annual increase of three percent 3% per year.

8. SECURITY DEPOSIT:

A. Tenant agrees to pay Landlord $4,000 as a security deposit.

Page 591 ends

ITEM NO. 21.

Date June 22, 2022
4 Premises, if necessary, upon termination of tenancy; and (iv) cover any other unfulfilled obligation of Tenant. SECURITY DEPOSIT SHALL NOT BE USED BY TENANT IN LIEU OF PAYMENT OF LAST MONTH'S RENT. If all or any portion of the security deposit is used during tenancy, Tenant agrees to reinstate the total security deposit within 5 days after written notice is delivered to Tenant.

Within 30 days after Landlord receives possession of the Premises, Landlord shall:
(i) furnish Tenant an itemized statement indicating the amount of any security deposit received and the basis for its disposition, and (ii) return any remaining portion of security deposit to Tenant.

C. No interest will be paid on security deposit.

9. PARKING: There shall be no assigned parking spaces associated with this Lease.

These costs may include, but are not limited to, processing, enforcement and accounting expenses, and late charges imposed on Landlord. Therefore, if Town does not receive any installment of rent due from Tenant within ten (10) days after the date such rent is due, Tenant shall pay to Town an additional sum of five percent (5%) of the overdue rent as a late charge. The parties agree this late charge represents a fair and reasonable estimate of the costs Town will incur by reason of late payment by Tenant. Acceptance of any late charge shall not constitute a waiver of Tenant's default with respect to the overdue amount, nor prevent Town from extending any of the other rights and remedies available to Town.

Landlord's right to collect a late charge or NSF fee shall not be deemed an extension of the date Rent is due under section 2.

11. CONDITION OF PREMISES: Landlord warrants that the Premises will be in the following condition on delivery:

Tenant acknowledges that Landlord has made no representation or warranty with respect to the Premises, or the suitability of the Premises for the conduct of the Tenant's business, nor has Landlord agreed to undertake any modification, alteration or improvement to the Premises except as provided in this Lease. The taking of possession of the Premises by Tenant shall conclusively establish that the Premises was at such time in satisfactory condition. Tenant shall be solely responsible for any and all costs and/or expenses associated with improvements to the Premises relative to this Lease.

Tenant has examined the Premises and acknowledges that Premises is clean and in operative condition.

Tenant is responsible for the immediate notification to Landlord of maintenance, loss, damage or any other issues related to the Premises as indicated:

Maintenance Issues, - Public Works, 408-399-5770
Claims - First, Tenant insurer as stated in Lease
DocuSign Envelope ID: 6C08F9EC-DA80-4D89-A5CC-56BB7F00A5BB

Page 592 ends

ITEM NO. 21.

Date June 22, 2022
5 Secondly, the Town Attorney’s Department, 408-354-6818 All other questions – Town Manager’s Office, 408-354-6836

12. ZONING AND LAND USE: Tenant accepts the Premises subject to all local, state and federal laws, regulations and ordinances ("Laws"). Landlord makes no representation or warranty that Premises are now or in the future will be suitable for Tenant's use. Tenant has made its own investigation regarding all applicable Laws.

13. USE: The Premises are for the sole use as specified:

A. Use of the Premises: Retail
B. Exclusive Use: Tenant shall have the right to use the Premises for the sale of high end designer clothing. Tenant shall have exclusive use of the Premises for the uses allowed under this Article, except that Landlord shall be allowed entry on the Premises to conduct necessary maintenance and repairs within its responsibility and as otherwise allowed under this Lease. No other use is permitted without Landlord's prior written consent. Tenant will comply with all Laws affecting its use of the Premises.

14. RULES/REGULATIONS: Tenant agrees to comply with all rules and regulations of Landlord that are at any time posted on the Premises or delivered to Tenant. Tenant shall not, and shall ensure that guests and licensees of Tenant do not, disturb, annoy, endanger, or interfere with other tenants of the building or neighbors, or use the Premises for any unlawful purposes, including, but not limited to, using, manufacturing, selling, storing, or transporting illicit drugs or other contraband, or violate any law or ordinance, or committing a waste or nuisance on or about the Premises. Tenant shall have access to operate the use upon the Premises twenty-four (24) hours a day, seven (7) days a week.

15. MAINTENANCE:

A. Tenant shall professionally maintain the interior of the Premises. If Tenant fails to maintain the interior of the Premises, Landlord may contract for or perform such maintenance, and charge Tenant for Landlord's cost. Tenant shall be responsible for all expenses for maintenance, repair, replacement and all other associated expenses for all interior tenant improvements in the Premises, including but not limited to floors, walls, and fixtures.

B. Landlord shall maintain the roof, foundation, exterior walls, common areas and exterior of the Premises and keep glass, windows and doors in operable and safe condition. Landlord will warrant the good operating condition of the HVAC and electrical systems serving the premises for the lease term.

16. LOSS OF KEY: Loss of any key will result in re-keying of lock with all costs to re-key paid for by Tenant.

17. TENANT IMPROVEMENTS: Tenant shall be responsible for all improvements essential to their business operation.

DocuSign Envelope ID: 6C08F9EC-DA80-4D89-A5CC-56BB7F00A5BB

Page 593 ends

ITEM NO. 21.

Date June 22, 2022
6 18. ALTERATIONS: Tenant shall not make any alterations in or about the Premises, including installation of trade fixtures and signs, without Landlord's prior written consent, which shall not be unreasonably withheld. Any alterations to the Premises shall be done according to law and with required permits. Tenant shall give Landlord advance notice of any planned alteration, so that Landlord, at its option, may post a Notice of NonResponsibility to prevent potential liens against Landlord's interest in the Premises.

Landlord may also require Tenant to provide Landlord with lien releases from any contractor performing work on the Premises. T h e Premises have been offered and accepted in an “as is” condition. Any Tenant alterations will be made at Tenant’s expense.

19. GOVERNMENT IMPOSED ALTERATIONS: Any alterations required by law as a result of Tenant's use shall be Tenant's responsibility. Landlord shall be responsible for any other alterations required by Law.

20. PREVAILING WAGES: Tenant understands that any improvements to the Premises paid for in whole or in part out of public funds will require the payment of prevailing wages in accordance with California Labor Code Sections 1720 et seq. and that, in the event that improvements are paid for in whole or in part out of public funds, Tenant will be responsible for compliance with state prevailing wage laws.

21. ENTRY: Tenant shall make Premises available to Landlord or Landlord's agent for the purpose of entering to make inspections, necessary or agreed repairs, alterations, or improvements, or to supply necessary or agreed services, or to show Premises to prospective or actual purchasers, tenants, mortgagees, lenders, appraisers, or contractors.

Landlord and Tenant agree that 24 hours’ notice (oral or written) shall be reasonable and sufficient notice. In an emergency, Landlord or Landlord's representative may enter Premises at any time without prior notice.

22. SIGNS: Tenant authorizes Landlord to place a FOR LEASE sign on the Premises within the 30 day period preceding the termination of the Lease. Tenant may install signs in conformance with the Town’s sign ordinance.

23. SUBLETTING/ASSIGNMENT: Tenant shall not sublet or encumber all or any part of Premises, or assign or transfer this Lease or any interest in it, without the prior written consent of Landlord, which shall not be unreasonably withheld. Unless such consent is obtained, any subletting, assignment, transfer, or encumbrance of the Premises, Lease, or tenancy, by voluntary act of Tenant, operation of law, or otherwise, shall be null and void, and, at the option of Landlord, terminate this Lease. Any proposed sublessee, assignee, or transferee shall submit to Landlord an application and credit information for Landlord's approval, and, if approved, sign a separate written Lease with Landlord and Tenant. Landlord's consent to any one sublease, assignment, or transfer, shall not be construed as consent to any subsequent sublease, assignment, or transfer, and does not release Tenant of Tenant's obligation under this Lease.

24. POSSESSION: If Landlord is unable to deliver possession of Premises on July 1, 2022, the rent commencement date shall be extended to the date on which possession is made available to Tenant. However, the expiration date shall remain the same as specified in section 5. If Landlord is unable to deliver possession within 90 calendar days after July 1, DocuSign Envelope ID: 6C08F9EC-DA80-4D89-A5CC-56BB7F00A5BB

Page 594 ends

ITEM NO. 21.

Date June 22, 2022
7 2022, Tenant may terminate this Lease by giving written notice to Landlord, and shall be refunded all Rent and security deposit paid.

25. TENANT'S OBLIGATIONS UPON VACATING PREMISES: Upon termination of this Lease, Tenant shall: (i) give Landlord all copies of all keys or opening devices to Premises, including restroom and any common areas; (ii) vacate Premises and surrender it to Landlord empty of all persons and personal property; (iv) deliver Premises to Landlord in the same condition as referenced in section 11; (v) clean Premises; and (vi) give written notice to Landlord of Tenant's forwarding address. All improvements installed by Tenant, with or without Landlord's consent, become the property of Landlord upon termination.

Landlord may nevertheless require Tenant to remove any such improvement that did not exist at the time possession was made available to Tenant.

26. DEFAULT:

A. Event of Default: The occurrence of any of the following shall constitute an Event of Default of this Lease by Tenant:
(i) The failure of Tenant to pay or cause to be paid within 10 days after receipt of written notice from Landlord, any Rent or charges required by this Lease to be paid by Tenant;
(ii) The abandonment of the Premises by Tenant;
(iii) The failure of Tenant to do or cause to be done any act, other than payment of rent, monies, or charges, required by this Lease within 30 days after written notice thereof to Tenant or such longer period as may be reasonably required to complete such cure so long as such cure is promptly commenced within such 30-day period and thereafter diligently and continuously prosecuted to completion;
(iv) Tenant causing, permitting, or suffering, without the prior written consent of Landlord, any act when this Lease requires Landlord’s prior written consent or prohibits such act, and failing to cure such act within 10 days after written notice thereof to Tenant; or
(v) Any act of bankruptcy caused, suffered, or permitted by Tenant that is not discharged within 60 days. For the purposes of this Lease, “act of bankruptcy” shall include any of the following: i) Any general assignment or general arrangement for the benefit of creditors; ii) The filing of any petition by or against Tenant to have Tenant adjudged a bankrupt; iii) The appointment of a trustee or receiver to take possession of substantially all of Tenant’s assets; iv) The attachment, execution, or other judicial seizure of substantially all of Tenant’s assets;
(vi) The failure of Tenant to maintain insurance coverage as defined in section 31 of this Lease.

DocuSign Envelope ID: 6C08F9EC-DA80-4D89-A5CC-56BB7F00A5BB

Page 595 ends

ITEM NO. 21.

Date June 22, 2022
8 B. In the event of a Tenant default in the payment of any installment of Rent, which default continues for ten (10) days after notice to Tenant and demand in writing by Landlord to correct such default, or, in the event of any other default which continues for thirty (30) days after notice from Landlord to Tenant, or if Tenant abandons the Premises prior to the expiration of the Term provided for in this Lease, the Landlord may at his option pursue the Default Remedies contained in this Lease.

C. Default Remedies: If an Event of Default shall occur and continue, then in addition to any other remedies available to Landlord at law or in equity, Landlord shall have the immediate option to terminate this Lease and bring suit against Tenant and recover as an award in such suit the following:
(i) the worth at the time of award of the unpaid Rent and all other sums due hereunder which had been earned at the time of termination; (ii) the worth at the time of award of the amount by which the unpaid Rent and all other sums due hereunder which would have been earned after termination until the time of award exceeds the amount of such rental loss that Tenant proves could have been reasonably avoided;
(iii) the worth at the time of award of the amount by which the unpaid Rent and all other sums due hereunder for the balance of the term after termination exceeds the amount of such rental loss that Tenant proves could be reasonably avoided;
(iv) any other amount necessary to compensate Landlord for all the detriment proximately caused by Tenant's failure to perform its obligations under this Lease; and
(v) such amounts in addition to or in lieu of the foregoing as may be permitted from time to time by applicable California law.

27. DAMAGE TO PREMISES: If, by no fault of Tenant, Premises are totally or partially damaged or destroyed by fire, earthquake, accident or other casualty, Landlord shall have the right to restore the Premises by repair or rebuilding. If Landlord elects to repair or rebuild, and is able to complete such restoration within 90 days from the date of damage, subject to the terms of this section, this Lease shall remain in full force and effect. If Landlord is unable to restore the Premises within this time, or if Landlord elects not to restore, then either Landlord or Tenant may terminate this Lease by giving the other written notice. Rent shall be abated as of the date of damage. The abated amount shall be the current monthly Rent prorated on a 30-day basis. If this Lease is not terminated, and the damage is not repaired, then Rent shall be reduced based on the extent to which the damage interferes with Tenant's reasonable use of Premises. If damage occurs as a result of an act of Tenant or Tenant's guests, only Landlord shall have the right of termination, and no reduction in Rent shall be made.

28. HAZARDOUS MATERIALS: Tenant shall not use, store, generate, release or dispose of any hazardous material on the Premises or the property of which the Premises are part.

However, Tenant is permitted to make use of such materials that are required to be used in the normal course of Tenant's business provided that Tenant complies with all applicable Laws related to the hazardous materials. Tenant is responsible for the cost of removal and remediation, or any clean-up of any contamination caused by Tenant.

DocuSign Envelope ID: 6C08F9EC-DA80-4D89-A5CC-56BB7F00A5BB

Page 596 ends

ITEM NO. 21.

Date June 22, 2022
9 29. CONDEMNATION: If all or part of the Premises is condemned for public use, either party may terminate this Lease as of the date possession is given to the condemner. All condemnation proceeds, exclusive of those allocated by the condemner to Tenant's relocation costs and trade fixtures, belong to Landlord.

30. INDEMNIFICATION: Tenant agrees to indemnify, and hold harmless Landlord, and its officers, officials, agents, and employees, from any and all liabilities, claims, demands, actions, losses, damages, and costs, including all costs of defense thereof and any award of attorney’s fees, caused by, arising out of, or in any way related to Tenant’s use or occupancy of the leased premises. Tenant agrees to defend Landlord against any such claims.

31. INSURANCE: Tenant shall procure and maintain for the duration of the Lease insurance against claims for injuries to persons or damages to property which may arise from or in connection with the Tenant’s operation and use of the Premises, as described in this section. The cost of such insurance shall be borne by the Tenant.

A. Minimum Scope Of Insurance:
• Insurance Services Office Commercial General Liability coverage (occurrence form CG 0001).
• Workers’ compensation insurance as required by the State of California and Employer’s Liability insurance (for tenants with employees). • Property insurance against all risks of loss to any tenant improvements or betterments.

B. Minimum Limits Of Insurance: Tenant shall maintain limits no less than:
• General liability: $2,000,000 per occurrence for bodily injury, personal injury and property damage. If Commercial General Liability Insurance or other form with a general aggregate limit is used, either the general aggregate limit shall apply separately to this project/location or the general aggregate limit shall be twice the required occurrence limit.
• Employer’s liability: $1,000,000 per accident for bodily injury or disease. • Property insurance: Full replacement cost with no coinsurance penalty provision.

C. Deductibles And Self-Insured Retentions: Any deductibles or self-insured retentions must be declared to and approved by the Landlord. At the option of the Landlord, either: The insurer shall reduce or eliminate such deductibles or selfinsured retentions as respects the Landlord, its officers, officials, agents, and employees; or the Tenant shall provide a financial guarantee satisfactory to the Landlord guaranteeing payment of losses and related investigations, claim administration, and defense expenses.

D. Other Insurance Provisions: The general liability policy is to contain, or be endorsed to contain, the following provisions:

DocuSign Envelope ID: 6C08F9EC-DA80-4D89-A5CC-56BB7F00A5BB

Page 597 ends

ITEM NO. 21.

Date June 22, 2022
10 • The Landlord, its officers, officials, agents, and employees are to be covered as insureds with respect to liability arising out of ownership, maintenance or use of that part of the premises leased to the Tenant.
• The Tenant’s insurance coverage shall be primary insurance as respects the Landlord, its officers, officials, agents, and employees. Any insurance or selfinsurance maintained by the Landlord, its officers, officials, agents and employees shall be excess of the Tenant’s insurance and shall not contribute with it. • Each insurance policy required by this clause shall be endorsed to state that coverage shall not be canceled, except after 30 days’ prior written notice by certified mail, return receipt requested, has been given to the Landlord.

E. Acceptability Of Insurer: Insurance is to be placed with insurers with a current A.M.

Best’s rating of no less than A:VII.

F. Verification Of Coverage: Tenant shall furnish Landlord with the original certificates and amendatory endorsements effecting coverage required by this clause. The endorsements should be on forms provided by the Landlord or on other than the Landlord’s forms, provided those endorsements or policies conform to the requirements. All certificates and endorsements are to be received and approved by the Landlord before taking possession of the Premises. The Landlord reserves the right to require complete, certified copies of all required insurance policies, including endorsements effecting the coverage required by these specifications at any time.

32. TENANT REPRESENTATIONS; CREDIT: Tenant warrants that all statements in Tenant's financial documents and rental application are accurate. Tenant authorizes Landlord to obtain Tenant's credit report at time of application and periodically during tenancy in connection with approval, modification, or enforcement of this Lease. Landlord may cancel this Lease: (i) before occupancy begins, upon disapproval of the credit report(s); or (ii) at any time, upon discovering that information in Tenant's application is false. A negative credit report reflecting on Tenant's record may be submitted to a credit reporting agency, if Tenant fails to pay Rent or comply with any other obligation under this Lease.

33. DISPUTE RESOLUTION:

D. Mediation: Tenant and Landlord agree to mediate any dispute or claim arising between them out of this Lease, or any resulting transaction, before resorting to court action, subject to subsection (1) below. Mediation fees, if any, shall be divided equally among the parties involved. If for any dispute or claim to which this paragraph applies, any party commences an action without first attempting to resolve the matter through mediation or refuses to mediate after a request has been made, then that party shall not be entitled to recover attorney fees, even if they would otherwise be available to that party in any such action. (1) Exclusions From Mediation: The following matters are excluded from Mediation hereunder:

DocuSign Envelope ID: 6C08F9EC-DA80-4D89-A5CC-56BB7F00A5BB

Page 598 ends

ITEM NO. 21.

Date June 22, 2022
11 (i) a judicial or non-judicial foreclosure or other action or proceeding to enforce a deed of trust, mortgage, or Installment land sale contract as defined in Civil Code §2985; (ii) an unlawful detainer action; (iii) the filing or enforcement of a mechanic's lien; (iv) any matter that is within the jurisdiction of a probate, small claims, or bankruptcy court; and (v) an action for bodily injury or wrongful death, or for latent or patent defects to which Code of Civil Procedure §337.1 or §337.15 applies. The filing of a court action to enable the recording of a notice of pending action, for order of attachment, receivership, injunction, or other provisional remedies, shall not constitute a violation of the mediation provision.

34. NOTICE: Notices may be served by certified mail, email, or courier at the following address or location or at any other location subsequently designated:

Landlord: Town of Los Gatos
Attn: Arn Andrews
Assistant City Manager
110 E. Main Street.,
Los Gatos, CA 95030
408-354-6836
Tenant: Franco Masoma
Attn: Anwar and
Masoma Shoja,
dba Franco
Masoma
TBD
Notice is deemed effective upon the earliest of the following: (i) personal receipt by either party or their agent; or (ii) written acknowledgement of notice.

35. WAIVER: The waiver of any Event of Default shall not be construed as a continuing waiver of the same Event of Default or a waiver of any subsequent Event of Default.

36. OTHER TERMS AND CONDITIONS/SUPPLEMENTS: Exhibit A – Leased Premises, Exhibit B – Floor Plan

37. NONDISCRIMINATION: The Tenant herein covenants by and for himself or herself, his or her heirs, executors, administrators, and assigns, and all persons claiming under or through him or her, and this Lease is made and accepted upon and subject to the following conditions: That there shall be no discrimination against or segregation of any person or group of persons, on account of race, color, creed, religion, sex, marital status, national origin, or ancestry, in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the Premises nor shall the Tenant himself or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy, of tenants, lessees, sublessees, subtenants, or vendees in the Premises.

38. ENTIRE CONTRACT: All prior agreements between Landlord and Tenant are incorporated in this Lease, which constitutes the entire contract. It is intended as a final expression of DocuSign Envelope ID: 6C08F9EC-DA80-4D89-A5CC-56BB7F00A5BB

Page 599 ends

ITEM NO. 21.

Date June 22, 2022
12 the parties' agreement, and may not be contradicted by evidence of any prior Lease or contemporaneous oral agreement. The parties further intend that this Lease constitutes the complete and exclusive statement of its terms, and that no extrinsic evidence whatsoever may be introduced in any judicial or other proceeding, if any, involving this Lease. Any amendment to this Lease must be in writing.

39. SEVERABILITY: Any provision of this Lease that is held to be invalid shall not affect the validity or enforceability of any other provision in this Lease.

40. BINDING ON SUCCESSORS: This Lease shall be binding upon, and inure to the benefit of, the heirs, assignees and successors to the parties.

41. GOVERNING LAW AND VENUE: This Lease is governed by the laws of the State of California and, in the event of litigation, venue will be in the County of Santa Clara.

IN WITNESS WHEREOF, TOWN OF LOS GATOS and ANWAR and MASOMA SHOJA have executed this LEASE.

LANDLORD TENANT
TOWN OF LOS GATOS ANWAR and MASOMA SHOJA
Laurel Prevetti, Town Manager Anwar Shoja
Masoma Shoja
APPROVED AS TO FORM:

Gabrielle Whelan, Town Attorney
DocuSign Envelope ID: 6C08F9EC-DA80-4D89-A5CC-56BB7F00A5BB 10/11/2022

Page 600 ends

ITEM NO. 21.

Date June 22, 2022
13 EXHIBIT A

PREMISES
Premises consist of the area marked
“New Retail”
DocuSign Envelope ID: 6C08F9EC-DA80-4D89-A5CC-56BB7F00A5BB

Page 601 ends

ITEM NO. 21.

Date June 22, 2022
14 EXHIBIT A

PREMISES

DocuSign Envelope ID: 6C08F9EC-DA80-4D89-A5CC-56BB7F00A5BB

Page 602 ends

ITEM NO. 21.

Date June 22, 2022
15 Exhibit B

FLOOR PLAN
DocuSign Envelope ID: 6C08F9EC-DA80-4D89-A5CC-56BB7F00A5BB

Page 603 ends

ITEM NO. 21.
16 DocuSign Envelope ID: 6C08F9EC-DA80-4D89-A5CC-56BB7F00A5BB

Page 604 ends

ITEM NO. 21.
1 ATTACHMENT 2

LEASE AGREEMENT BETWEEN TOWN OF LOS GATOS AND
ANWAR and MASOMA SHOJA
Landlord: Town of Los Gatos
Tenant: Anwar and Masoma Shoja, as sole proprietors, dba Franco Masoma Premises: Approximately four hundred twenty-five (425) square feet of space within the Los Gatos Theatre Building (as more particularly defined in the Lease) comprising of 41, 43 and 45 N. Santa Cruz Avenue in Los Gatos, California 95030 in the Town of Los Gatos, Santa Clara County, California ("Property"). Consists of the area marked “New Retail Space” in Exhibit A.

Lease Term: 36 months
Lease Commencement Date: July 1, 2025
Rent Commencement Date: Rent shall begin on the date of lease commencement. Rent is established at $7.65 per square foot, rounding to the nearest dollar for monthly rent, and increasing by 3% annually in July.

Base Rent Schedule:

Year Monthly Base Rent Annual Base Rent
Year 1
(Months 1-12)
$3,251 $39,012
Year 2
(Months 13-24) $3,349 $40,188
Year 3
(Months 25-36) $3,449 $41,388
Option to Extend: At the discretion of the Landlord, one (1) twenty-four (24) month option to extend at a 3% increase of prior base year, with at least 90-day written notice from the tenant asking for the extension.

Permitted Use: Retail
Landlord’s Address: The Town of Los Gatos – 110 E. Main Street, Los Gatos, California 95030, Attention: Finance Department

Page 605 ends

ITEM NO. 21.
2 ATTACHMENT 2
Landlord’s Telephone: 408-354-6836
Property Manager: Town of Los Gatos Attn: Katy Nomura, Assistant Town Manager Tenant Address: 77 N Almaden Ave, San Jose, CA 95110
Tenant Telephone: 408-828-7966
Lease Exhibits:

Exhibit A: Premises
Exhibit B: Floor Plan
Town of Los Gatos ("Landlord") and Anwar and Masoma Shoja, as sole proprietors, dba Franco Masoma ("Tenant") agree as follows:

1. PROPERTY: Landlord rents to Tenant and Tenant rents from Landlord, an approximately four hundred twenty-five ( 425) square feet of space within the Los Gatos Theatre Building comprising 45 N. Santa Cruz Avenue in Los Gatos, California 95030 in the Town of Los Gatos, Santa Clara County, California ("Property"). Consists of the area marked “New Retail Space” in Exhibit A.

2. BASE RENT: Beginning on July 1, 2025, Tenant agrees to pay a monthly Base Rent (“Base Rent”) at the rate of $3,251 per month, with a 3 percent annual increase effective July 1 of each year. The base rent schedule shall be as follows:

Months Monthly Base Rent Annual Base
Rent
1-12 $3,251 $39,012
13-24 $3,349 $40,188
25-36 $3,449 $41,388

3. RENT:

A. Definition: "Rent" shall mean all monetary obligations of Tenant to Landlord under the terms of this Lease, except security deposit.

Page 606 ends

ITEM NO. 21.
3 ATTACHMENT 2
B. Payment: Rent shall be paid at Los Gatos Town Hall, Finance Department, or at any other location specified by Landlord in writing to Tenant.

C. Timing: Rent is payable in advance on the 1st day of each calendar month and is delinquent 10 days after.

Tenant shall be responsible and directly pay for all other charges, including, but not limited to, Town permit fees, fees for any regulatory licenses or inspections, or other governmental charges such as unsecured business property tax, possessory interest tax, or ABC permits.

Tenant agrees to work cooperatively with the Landlord to reduce water, gas, and electricity expenses. Tenant will act in good faith to conserve energy and reduce these expenses.

5. TAXES, ASSESSMENTS, FEES, AND CHARGES: The property interests created by this Lease may be subject to property taxation and Tenant, in whom the possessory interest is vested, will be responsible for the timely payment of any property taxes levied on such possessory interest. Tenant agrees to pay before delinquency all lawful taxes, assessments, fees or charges which at any time may be levied by the state, county, city or any tax or assessment levying body against the transfer of the leasehold interest hereunder upon recordation or otherwise, or upon any activity carried on under this Lease, any interest in this Lease or any possessory right which Tenant may have in or to the Premises by reason of its use or occupancy thereof or otherwise
Tenant specifically acknowledges that, in accordance with Revenue and Taxation Code Section 107.6, the Premises may be subject to possessory interest tax and that Tenant is responsible for any possessory interest tax levied on Tenant’s leasehold interest in the Premises.

6. TERM:

Page 607 ends

ITEM NO. 21.
4 ATTACHMENT 2
Lease: is for a term of 3 years (36 months) and terminates on June 30, 2028 at 6:00 PM.

A. Monthly Base Rent During Extended Term: Monthly Base Rent for the extended term shall include a 3% increase of prior base year with an annual increase of three percent 3% per year.

8. SECURITYDEPOSIT:

A. Tenant agreesto pay Landlord $4,000 as a security deposit.

B. All or any portion of the security deposit may be used, as reasonably necessary, to:
(i) cure Tenant's default in payment of Rent, late charges, non-sufficient funds ("NSF") fees, or other sums due; (ii) repair damage, excluding ordinary wear and tear, caused by Tenant or by a guest or licensee of Tenant; (iii) broom clean the Premises, if necessary, upon termination of tenancy; and (iv) cover any other unfulfilled obligation of Tenant. SECURITY DEPOSIT SHALL NOT BE USED BY TENANT IN LIEU OF PAYMENT OF LAST MONTH'S RENT. If all or any portion of the security deposit is used during tenancy, Tenant agrees to reinstate the total security deposit within 5 days after written notice is delivered to Tenant.

C. No interest will be paid on security deposit.

9. PARKING: There shall be no assigned parking spaces associated with this Lease.

Page 608 ends

ITEM NO. 21.
5 ATTACHMENT 2

10. LATE CHARGE; INTEREST; NSF CHECKS: Tenant acknowledges that either late payment of Rent or issuance of a NSF check may cause Landlord to incur costs and expenses, the exact amount of which are extremely difficult and impractical to determine. These costs may include, but are not limited to, processing, enforcement and accounting expenses, and late charges imposed on Landlord. Therefore, if Town does not receive any installment of rent due from Tenant within ten (10) days after the date such rent is due, Tenant shall pay to Town an additional sum of five percent (5%) of the overdue rent as a late charge.

The parties agree this late charge represents a fair and reasonable estimate of the costs Town will incur by reason of late payment by Tenant. Acceptance of any late charge shall not constitute a waiver of Tenant's default with respect to the overdue amount, nor prevent Town from extending any of the other rights and remedies available to Town.

Landlord's right to collect a late charge or NSF fee shall not be deemed an extension of the date Rent is due under section 2.

11. CONDITIONOF PREMISES: Landlord warrantsthat the Premises will be in the following condition on delivery:

Tenant has examined the Premises and acknowledgesthat Premisesis clean and in operative condition.

Tenant isresponsible forthe immediate notification to Landlord of maintenance, loss, damage or any other issues related to the Premises as indicated:

Maintenance Issues, - Public Works, 408-399-5770 Claims - First, Tenant insurer as stated in Lease
Secondly, the Town Attorney’s Department, 408-354-6818
All other questions – Town Manager’s Office, 408-354-6836

Page 609 ends

ITEM NO. 21.
6 ATTACHMENT 2

13. USE: The Premises are for the sole use as specified:

15. MAINTENANCE:

A. Tenant shall professionally maintain the interior of the Premises. If Tenant fails to maintain the interior of the Premises, Landlord may contract for or perform such maintenance, and charge Tenant for Landlord's cost. Tenant shall be responsible for all expenses for maintenance, repair, replacement and all other associated expenses for all interior tenant improvementsin the Premises, including but not limited to floors, walls, and fixtures.

16. LOSS OF KEY: Loss of any key will result in re-keying of lock with all coststo re-key paid for by Tenant.

Page 610 ends

Los Gatos City CouncilJune 17, 2025

Los Gatos City Council
June 17, 2025