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HomeMy WebLinkAboutA Reason to Survive - Maintenance and Operating - ARTS Center - 2017-2021MAINTENANCE AND OPERATING AGREEMENT by and between CITY OF NATIONAL CITY and A REASON TO SURVIVE Dated as of December 5, 2017 SECTION HEADING Recitals ARTICLE 1 ARTICLE 2 ARTICLE 3 ARTICLE 4 ARTICLE 5 ARTICLE 6 ARTICLE 7 ARTICLE 8 ARTICLE 9 ARTICLE 10 ARTICLE 11 ARTICLE 12 ARTICLE 13 ARTICLE 14 ARTICLE 15 ARTICLE 16 ARTICLE 17 ARTICLE 18 ARTICLE 19 ARTICLE 20 ARTICLE 21 AR1TICLE 22 TABLE OF CONTENTS Terms of Agreement The Property Permitted Uses Utilities Repairs and Maintenance Improvements; Alterations Mechanics' Liens; Stop Notices Taxes Indemnifications and Insurance Termination Hazardous Materials Assignment; Third Party Use of Property Defaults by Arts or by City; Remedies Abandonment Damage or Destruction Eminent Domain Sale or Mortgage by City City's Right of Access Notices Non -Discrimination Records, Accounts, and Audits Administrative Provisions PAGE 2 2 3 5 6 6 7 8 8 11 12 14 14 15 15 16 16 16 17 18 18 18 MAINTENANCE AND OPERATING AGREEMENT BY AND BETWEEN THE CITY OF NATIONAL CITY AND A REASON TO SURVIVE This Maintenance and Operating Agreement (the "Agreement") is entered into as of December 5, 2017, by and between the CITY OF NATIONAL CITY, a municipal corporation (the "CITY"), and A REASON TO SURVIVE ("ARTS"), a California non-profit corporation. RECITALS A. WHEREAS, the CITY owns the improved real property commonly known as 200 East 12th Street, National City, California (the "Property"). The improvements on the Property are sometimes referred to as the "Arts Center" building. A description of the Property is attached hereto as Exhibit "A" and Exhibit `B", incorporated herein by reference. B. WHEREAS Article 11, Section 7 of the California Constitution empowers the City to provide for the health and welfare of its residents. C. WHEREAS, the CITY desires to enter into a Maintenance and Operating Agreement due to the special services to be performed under this Agreement for the City and to facilitate a more collaborative relationship between the CITY and the operator of the Premises. D. WHEREAS, one of the goals of the CITY's General Plan is to develop a cultural arts program that encourages and facilitates the development of art in public spaces and promotes greater public awareness of architectural, urban design, and cultural heritage of the CITY. E. WHEREAS, the CITY desires the services of an organization to maintain and operate the Property in a manner beneficial to the public. F. WHEREAS, ARTS has been a catalyst in delivering arts, culture and education programs and projects in National City, and has created a movement behind the importance of the arts as a prevention and intervention vehicle to create positive transformation in children and youth facing adversity. G. WHEREAS, the CITY has further determined that ARTS is skilled in creating Public Art (defined below), including capital art projects, which beautifies the community, and is capable of lifting the spirits of residents and visitors to National City. H. WHEREAS, the CITY wishes to have ARTS maintain and operate the Property as an arts center for the community's benefit, and ARTS is willing to operate and maintain the Property for such a purpose. Maintenance and Operating Agreement Page 1 of 20 City of National City and December 5, 2017 A Reason to Survive (ARTS) I. WHEREAS, the benefits of ARTS' continued work in National City, as explained in these Recitals, justifies ARTS' options to pay the Unpaid Rent (defined below) as provided in this Agreement. NOW, THEREFORE, in consideration of the foregoing facts, and in consideration of the promises and covenants hereinafter set forth, the parties agree as follows: ARTICLE 1 TERM OF AGREEMENT 1.1 Term. The term of this Agreement shall be thirty-six (36) months, commencing January 1, 2018 (the "Commencement Date") and expiring on December 31, 2021. 1.2 Option to Extend Term. If ARTS is not in default of any provision of this Agreement upon the expiration of the term described in Article 1.1, the City Manager or designee may extend the term for up to two (2) additional sixty (60) month periods. The initial thirty-six month term, and any extension pursuant to this Article 1.2, shall collectively be referred to hereafter as the "Term." ARTICLE 2 THE PROPERTY 2.1 License for Use of Property. For the purpose of operating the public arts center for the benefit of the residents and visitors of National City, the CITY grants ARTS a revocable license to enter and operate the Property, subject to the covenants and conditions hereinafter set forth, as of the Commencement Date. 2.1.1 Parking. ARTS shall neither have reserved parking nor exclusive on -site parking spaces. The CITY will maintain control of the public parking lot adjacent to the ARTS building. 2.2 Ownership of Personal Property and Improvements. The rights and obligations of the parties regarding the ownership of personal property and improvements on the Property shall be as follows: 2.2.1 Ownership of Personal Property. All improvements existing on the Property (Improvements), together with all fixtures permanently attached to the Property (Fixtures), as of the Commencement Date shall remain the property of the CITY during the Term. ARTS shall not remove any Improvements or Fixtures from the Property and shall also not waste, destroy, or modify any Improvements or Fixtures on the Property, except as permitted by this Agreement. 2.2.2 Ownership of Improvements and Equipment. All improvements made to the property by ARTS shall become the property of the CITY. Maintenance and Operating Agreement Page 2 of 20 City of National City and December 5, 2017 A Reason to Survive (ARTS) ARTICLE 3 PERMITTED USE 3.1 Purpose. It is the intention of the parties that operation of the Property by ARTS will encourage and foster arts education programming, creative youth development, project - based learning, and support services for the students and families at the ARTS Center Building, as well as the creation of public art projects in the community. 3.2 Projects and Programs. In exchange for its use of the Property, ARTS shall provide capital projects and programming services ("Projects") within National City's jurisdictional boundaries during the Term. Such Projects shall serve as consideration for the use of the Property and shall include: (a) capital improvements to the ARTS Center building; (b) the performance of works of authorship as described in Civil Code Articles 980-989 and in Articles 106A and Section113(d) of Title 17 of the United States Code (hereafter "Public Art"), throughout the community utilizing various media; (c) community event banners; (d) public gateway improvements, that may include aspects of Public Art; and (e) landscape, streetscape, and park improvements. The obligations described in this Article 3.2 are in addition to all other Property maintenance obligations more specifically described herein. 3.2.1. Value of Projects and Programs. The annual value of the Projects and Programs shall total at least one hundred twenty-five thousand dollars ($125,000.00). Of this $125,000, ARTS must obtain at least $25,000 for the Projects through fundraising. 3.2.2. Method of Determining Value of Projects and Programs. The value of all Projects shall be determined according to (a) the dollar value of each Project, as represented by a separate written agreement approved by the City Manager, or designee, or (b) copies of invoices, receipts, or bills demonstrating the dollar value of materials purchased for a Project. ARTS must promptly make all invoices, receipts, or bills demonstrating the dollar value of materials purchased for a Project available to the City Manager, or designee, upon written request. 3.2.2. Pre -Existing Balance. ARTS expressly acknowledges that, before the Term of this Agreement commenced, ARTS owed the CITY $112,500 in unpaid rent under the July 1, 2015 Lease Agreement ("Unpaid Rent"). The Unpaid Rent represents monthly rent accrued between October 1, 2015 and December 31, 2017. ARTS must either: pay the Unpaid Rent in one lump sum, or provide Projects to the CITY whose collective cost of completion equals the Unpaid Rent. No fundraising minimums will apply to ARTS' payment of the Unpaid Rent. If ARTS chooses to pay the Unpaid Rent pursuant to Article 3.2.2., ARTS must separately track and invoice the value of those Projects that will apply to pay off the $112,500 from other Projects intended to satisfy Article 3.2.1. Maintenance and Operating Agreement Page 3 of 20 City of National City and December 5, 2017 A Reason to Survive (ARTS) 3.2.3 Waiver of Artistic Rights. Consistent with Article 9.2, ARTS expressly waives and disclaims any residual rights in the Projects granted to ARTS by state or federal law, including Civil Code Articles 980 through 989 relating to intellectual property and artistic works, and 17 United States Code Section106A and Section113(d) relating to artists rights. 3.3 Hours of Operation. ARTS will open the Property to the public Monday through Friday from 9:00 a.m. to 5:00 p.m. 3.4 Service Fees. ARTS shall not provide any programs and services for profit. However, ARTS may charge user fees for classes and programs offered to school groups and the community to offset costs incurred by ARTS in its maintenance and operation of the Property. Any fees charged under this Article 3.4 must be approved by the City Manager or designee. There will be no fee for the public to gain access to the Property during those hours of operation listed in this Article 3. 3.5 Reporting by ARTS. ARTS shall provide quarterly reports to the City Manager, or designee, that provide Statistical Information (defined below) for the immediately preceding quarter. Each quarterly report shall contain, at a minimum, the total number of: (a) National City residents who participated in ARTS' Projects; (b) participants and volunteers who participated in ARTS' Projects; (c) events and programs coordinated; (d) and capital projects completed. The quarterly reports shall also include reports on ARTS' operating and maintenance plans, long-term and short-term goals, and any other pertinent statistics. The information required to appear in the quarterly reports by this Article 3.5 will be referred to as "Statistical Information." Each quarterly report will include all previous quarters' Statistical Information, if any. ARTS will deliver the quarterly report to the CITY at a mutually agreeable date and time. 3.6 Annual Budget. ARTS shall provide the CITY Manager, or designee, with a courtesy copy of the proposed budget for ARTS' estimated maintenance and operating expenses for the Property by July 1st of each year during the Term. ARTS shall provide to the City Manager, or designee, an audited financial report and tax return, forty-five (45) days following June 30 of each year during the Term. 3.7 Volunteer Management. ARTS may utilize volunteers to operate the Property, and in providing the Projects required by this Agreement. ARTS is responsible for recruiting, training, and managing all volunteers on the Property. Volunteers are considered the responsibility of ARTS for the purpose of workers compensation or general liability. 3.8 Alcohol Use. ARTS, or third parties with permission from ARTS, may, hold events on the Property where alcoholic beverages are served. Alcoholic beverages shall be served subject to the following requirements: • Alcohol will not be served during youth programming under any circumstances. • Alcohol will be served in limited areas of the Property, designated by ARTS in advance, and approved by the City Manager or designee. Maintenance and Operating Agreement Page 4 of 20 City of National City and December 5, 2017 A Reason to Survive (ARTS) • Alcoholic beverages must be served by a licensed bartender, with a copy of the bartender's license on the Property. • The event host must obtain approval from the state Department of Alcoholic Beverage Control to serve alcohol. • The event host is responsible for all guest behavior during and following the service of alcohol. • "Last call" for service of alcohol shall be at least thirty (30) minutes prior to the scheduled end of the event. When third parties (with permission from ARTS) serve alcoholic beverages, the following additional requirements shall apply: • The third party shall provide the CITY proof of liability insurance acceptable to the City's Risk Manager. • The third party shall provide two licensed security guard for every 100 guests registered to attend the event. • ARTS shall reserve the authority to immediately terminate an event if ARTS determines, in its sole discretion, the third party has not complied with any requirement of this Article 3.8. • ARTS shall provide the CITY a copy of their third party rental agreement template for approval. 3.9 Consideration. ARTS payment of $1.00 to the CITY, in addition to ARTS' provision of "Projects" under Article 3.2 and the mutual benefit to be derived from ARTS' performance under the remainder of this Agreement, shall serve as the sole consideration due the CITY for ARTS' license to use and operate the Premises. 3.10 Compliance with Laws. ARTS, at its sole expense, shall procure, maintain, and hold available for the CITY's inspection any governmental license or permit required for the proper and lawful conduct of ARTS' operation of the Property. ARTS shall not use the Property for any use or purpose in violation of the laws of the United States of America, or the laws, ordinances, regulations, orders, or requirements of the State of California, the County of San Diego, the CITY, or of other lawful authorities. ARTS shall, at its sole expense, comply with all applicable statutes, laws, ordinances, rules, regulations, orders, covenants and restrictions of record, and requirements in effect during the Term (Laws or Orders), regulating the use by ARTS of the Property. ARTICLE 4 UTILITIES 4.1 Utility Services. The CITY shall be responsible for maintaining reasonable utility services to the Property. The CITY shall pay for Twenty Thousand and no/100 Dollars ($20,000) worth of electricity and reasonable water usage at the Premises. ARTS shall pay for all costs of electricity that exceeds the sum listed in this Section 4.1. If the CITY Maintenance and Operating Agreement Page 5 of 20 City of National City and December 5, 2017 A Reason to Survive (ARTS) determines, in its sole discretion, that ARTS is negligent in its use of the utilities, including water usage, the CITY may hold a good faith meet and confer meeting with ARTS to discuss its utilities usage. ARTICLE 5 REPAIRS AND MAINTENANCE 5.1 ARTS' Repair and Maintenance Obligations. ARTS acknowledges that it has made a thorough inspection of the Property and that it accepts the Property "as -is" as of the Commencement Date. At ARTS' own cost and expense, ARTS shall repair, replace, and maintain the Property in good, tenable condition as necessary. ARTS shall not be obligated to repair or replace damage to the Property caused by ordinary wear and tear. ARTS shall maintain the Property in an accessible manner for use by individuals with disabilities and comply with federal and state law regarding accessibility, including but not limited to the Americans with Disabilities Act and California's Disabled Persons Act. Other than repair work in emergency situations not exceeding Three Thousand and no/100 Dollars ($3,000), ARTS shall not perform any repair work without the CITY's prior written consent. As used in this Article 5.1, "emergency" means a sudden, unexpected occurrence that poses a clear and imminent danger, requiring immediate action to prevent or mitigate the loss or impairment of life, health, property, or essential public services. All emergency repairs performed by the City on the Property are governed by Public Contract Code Section 22050. ARTS' obligations under this Article shall apply regardless of whether the repairs, restorations, and replacements are ordinary or extraordinary, foreseeable or unforeseeable, capital or noncapital, the fault or not the fault of ARTS, its agents, employees, volunteers, invitees, visitors, or contractors. All replacements made by the ARTS shall be of like size, kind, and quality to the items replaced. 5.2 CITY Repair and Maintenance Obligations. For any repair and maintenance work exceeding Three Thousand and no/100 Dollars ($3,000), the CITY will consider the nature and priority of the work and available funding to determine if and when such repairs will be completed. 5.3 CITY Right to Inspect; CITY Not Obligated to Repair or Maintain. ARTS shall permit the CITY to enter the Property at all times during usual hours of operation to inspect the Property. Any entry pursuant to this Article 5.3 shall not unreasonably interfere with ARTS' operation of the Property. However, nothing contained in this Article 5 shall create any duty on the part of the CITY to do any work which, under any provision of this Agreement, ARTS may be required to do. ARTICLE 6 IMPROVEMENTS; ALTERATIONS 6.1 Alterations. ARTS may alter, replace, add to, change, or construct additional improvements to the Property (collectively, "Alterations") as ARTS may find necessary or convenient for its operation of the Property. Any Alterations performed by ARTS Maintenance and Operating Agreement Page 6 of 20 City of National City and December 5, 2017 A Reason to Survive (ARTS) under this Article 6.1 shall be performed: (a) at ARTS' sole cost and expense; (b) with the CITY's prior written consent; and (c) in accordance with construction plans submitted to and approved by the CITY. 6.2 Construction Permits and Licenses. At all times during the Term, ARTS shall procure, at its sole cost and expense, all permits and licenses that are necessary or required from any local governmental agency for the proposed construction of any Alterations. The CITY may, in its sole discretion, waive CITY permitting fees where applicable. 6.3 Proposed Plans. In its sole discretion, the CITY may require ARTS to do any of the following: • Submit a complete set of proposed plans of any Alterations to the CITY; • Apply for and receive a permit from the Building Department to complete any Alterations; • Within sixty (60) days of a written request, furnish the CITY with a complete set of "as -built" plans for any CITY -approved Alterations. 6.4 Prevailing Wages. ARTS shall comply with prevailing wage statutes for any work not performed by volunteers. ARTICLE 7 MECHANICS' LIENS; STOP NOTICES 7.1 Mechanics' Liens; Stop Notices. ARTS shall pay, or cause to be paid, the total cost and expense of all works of improvement, as that phrase is defined in the Mechanics Lien Law in effect at time and place of construction, done by it, or caused to be done by it, on the Property, and for all materials furnished for or in connection with any such work. If any lien or stop notice is filed against the Property, ARTS shall cause the lien or stop notice to be discharged of record within one hundred eighty (180) days after it is filed. ARTS shall indemnify, defend, and hold the CITY harmless from any and all liability, loss, damage, costs, attorneys' fees, and all other expenses on account of claims of lien of laborers, materialmen, or others for work performed, or materials or supplies furnished for ARTS or persons claiming under ARTS. 7.2 Notice of Lien or Stop Notice. Should any claim of lien or stop notice related to ARTS' work of improvement of the Property be filed against the Property, or any action be filed against the Property, or any action affecting the title to the Property be commenced, the party receiving notice of such lien or stop notice or action shall immediately give the other party written notice thereof. 7.3 Notice of Non -Responsibility. The CITY or its representatives shall have the right to post and keep posted on the Property notices of non -responsibility or such other notices which the CITY may deem to be proper for the protection of the CITY's interest in the Maintenance and Operating Agreement Page 7 of 20 City of National City and December 5, 2017 A Reason to Survive (ARTS) Property. ARTS shall, before the commencement of any work which might result in any such lien or stop notice, give to the CITY written notice of its intention to do so with sufficient time to enable posting of such notices. ARTICLE 8 TAXES 8.1 Definition. "Taxes" shall mean all taxes, governmental bonds, special assessments, charges, or transfer taxes, license and transaction fees, including, but not limited to, (a) any state, local, federal income tax, or any real or personal property tax, (b) increases in taxes attributable to ARTS' operation of the Property, or (c) any taxes which are essentially payments to a governmental agency, other than the CITY, for the right to make improvements to the Property. 8.2 Possessory Interest. Notwithstanding Article 2.1, ARTS acknowledges that this Agreement may create a possessory interest subject to property taxation and that ARTS may be subject to the payment of taxes levied on such interest. ARTS shall pay, before delinquency, all taxes, assessments, and fees assessed or levied upon the Property. 8.3 Responsibility for Payment of Taxes. The CITY shall not be obligated to pay any Taxes accruing against any interest in ARTS' use of the Property at any time before or during the Term. ARTS shall pay any Taxes that accrue against any interest in ARTS' use of the Property. Additionally, ARTS shall pay any Taxes levied upon any Improvements, Fixtures, or Personal Property located on the Property to the extent such Taxes result from ARTS' operations or other activities held upon, or in connection with, the Property. ARTICLE 9 INDEMNIFICATION AND INSURANCE 9.1 ARTS Indemnity. The CITY shall not be liable for, and ARTS shall defend, indemnify, and hold harmless the CITY, its officers, officials, agents, employees, and volunteers from any and all claims, costs, liability, loss, damages to property, injuries to, or death of any person or persons, and all claims, demands, suits, actions, proceedings, reasonable attorneys' fees, and defense costs, of any kind or nature, including workers' compensation claims resulting from, related to, or arising out of ARTS' improvement, operation or use of the Property, or arising either directly or indirectly from any act, error, omission, or negligence of ARTS or its contractors, licensees, invitees, members, agents, servants or employees; provided, however, that this indemnification and hold harmless shall not include any claims or liability arising from the established sole negligence or willful misconduct of the City, its agents, officers, officials, employees, or volunteers. CITY will cooperate reasonably in the defense of any action, and ARTS shall employ competent counsel, reasonably acceptable to the CITY'S City Attorney. The indemnity, defense, and hold harmless obligations contained herein shall survive the termination of this Agreement for any alleged or actual omission, act, or negligence under this Agreement that occurred during the term of this Agreement. Maintenance and Operating Agreement Page 8 of 20 City of National City and December 5, 2017 A Reason to Survive (ARTS) 9.1.1 Third Party Indemnity. ARTS shall not invite third party organizations onto the Property until said third party organization furnishes CITY a written agreement in which it indemnifies and holds CITY harmless, upon terms satisfactory to CITY. 9.1.2 Waivers from Third Parties. ARTS agrees to obtain from all guests, invitees, or third party organizations whose participants visit the Property, a waiver of liability and hold harmless agreement upon terms satisfactory to the CITY. 9.2 Ownership Rights and Licenses to Artwork; Waiver. Through its provision of Projects to the CITY, ARTS makes an unconditional donation, in perpetuity, of all Public Art to the CITY. ARTS acknowledges that the CITY is authorized to accept donations of Public Art pursuant to Sections 37354 and 37355 of the Government Code. Before beginning each Project that contains Public Art, ARTS and all individuals participating in the Project must sign a CITY -approved waiver that expressly waives and disclaims any and all rights they each may have under the California Art Preservation Act, as set forth in Civil Code Section 980-989, and any rights under the Visual Artists Rights Act, as set forth at 17 U.S.C. Section106A and Section 113(d) to any Public Art created pursuant to this Agreement. ARTS, and all participants who create Public Art, shall not attempt to defeat Sections 3.2.3 and 9.2 by cooperating with any organization which seeks to bring an action under Civil Code Article 989 or any other applicable provision of law. 9.2.1. Ownership of Materials. Ownership of all materials and concepts produced for the CITY under this Agreement, including but not limited to completed Projects, and all rights to licensing and reproductions of Public Art, shall pass to and become the property of the CITY once the CITY accepts the completed Project. The CITY, at its option, will store all drawings and materials that may assist with future repairs. 9.2.2. Assignment of Rights. ARTS hereby assigns to the CITY all rights to produce, give, sell, and distribute still or motion images and models or other likeness of any kind of Public Art but shall exercise no rights thereto inconsistent with any provision of this Article 9.2. Any Memoranda, Reports, Maps, Drawings, Renderings, Photos, Plans, Specifications, and other documents prepared by ARTS for any Projects, whether paper or electronic, shall become the property of the CITY for use with respect to the specific Project provided to the CITY, and shall be turned over to the CITY upon completion of the Project, or any phase thereof, as contemplated by this Agreement. 9.2.3. Survival. The provisions of this Article 9.2 shall survive the termination of this Agreement. 9.3 Insurance. ARTS, at its sole cost and expense, shall purchase and maintain, and shall require its subcontractors, and third party organizations ARTS invites onto the Property, to purchase and maintain throughout the term of this Agreement, the following insurance policies: Maintenance and Operating Agreement Page 9 of 20 City of National City and December 5, 2017 A Reason to Survive (ARTS) 9.3.1 Commercial General Liability Insurance (CGL): Insurance Services Office Form CG 00 01 covering CGL on an "occurrence" basis, including products and completed operations, property damage, bodily injury and personal and advertising injury with minimum limits of $2,000,000 per occurrence and $4,000,000 aggregate, covering all bodily injury and property damage arising out of its operations under this Agreement. The policy shall name the CITY and its officers, agents, employees, and volunteers as additional insureds, and a separate additional insured endorsement shall be provided. The general aggregate limit must apply solely to this "project" or "location." The Commercial General Liability required by this Section must include Sexual Misconduct Liability coverage. 9.3.2 Automobile Insurance covering all bodily injury and property damage incurred during the performance of this Agreement, with a minimum coverage of $1,000,000 combined single limit per accident. Such automobile insurance shall include owned, non -owned, and hired vehicles ("Any Auto"). The policy shall name the CITY and its officers, agents, employees, and volunteers as additional insureds, and a separate additional insured endorsement shall be provided. 9.3.3 Workers' Compensation Insurance in an amount sufficient to meet statutory requirements covering all of ARTS' employees, and employers' liability insurance with limits of at least $1,000,000 per accident. In addition, the policy shall be endorsed with a waiver of subrogation in favor of the City. Said endorsement shall be provided prior to commencement of work under this Agreement. 9.3.4 Property insurance against all risks of loss to any improvements or betterments made by ARTS, or any third party with permission from ARTS, at full replacement cost with no coinsurance penalty provision. 9.3.5 The aforesaid policies shall constitute primary insurance, at least as broad as ISO CG 20 01 04 13, as to the CITY, its officers, employees, and volunteers, so that any other policies held by the CITY shall not contribute to any loss under said insurance. Said policies shall provide for thirty (30) days prior written notice to the CITY's Risk Manager, at the address listed in Article 9.3.7 below, of cancellation or material change. 9.3.6 If required insurance coverage is provided on a "claims made" rather than "occurrence" form, ARTS shall maintain such insurance coverage for three years after expiration of the term (and any extensions) of this Agreement. In addition, the "retro" date must be on or before the date of this Agreement. 9.3.7 The Certificate Holder for all policies of insurance required by this Article 9.3 shall be: Maintenance and Operating Agreement Page 10 of 20 City of National City and December 5, 2017 A Reason to Survive (ARTS) City of National City do Risk Manager 1243 National City Boulevard National City, CA 91950-4397 9.3.8 Insurance shall be written with only insurers authorized to conduct business in California that hold a current policy holder's alphabetic and financial size category rating of not less than A VIII according to the current Best's Key Rating Guide, or a company of equal financial stability that is approved by the CITY' S Risk Manager. In the event coverage is provided by non -admitted "surplus lines" carriers, they must be included on the most recent California List of Eligible Surplus Lines Insurers (LESLI list) and otherwise meet rating requirements. 9.3.9 This Agreement shall not take effect until certificate(s) or other sufficient proof that these insurance provisions have been complied with, are filed with and approved by the CITY'S Risk Manager. If ARTS does not keep all of such insurance policies in full force and effect at all times during the terms of this Agreement, the CITY may elect to treat the failure to maintain the requisite insurance as a breach of this Agreement and terminate the Agreement as provided herein. 9.3.10 All deductibles and self -insured retentions in excess of $10,000 must be disclosed to and approved by the CITY. CITY reserves the right to modify the insurance requirements of this Article 9.3, including limits, based on the nature of the risk, prior experience, insurer, coverage, or other special circumstances. 9.3.11 If ARTS maintains broader coverage or higher limits (or both) than the minimum limits shown above, the CITY requires and shall be entitled to the broader coverage or higher limits (or both) maintained by ARTS. Any available insurance proceeds in excess of the specified minimum limits of insurance and coverage shall be available to the CITY. ARTICLE 10 TERMINATION 10.1 This Agreement may be terminated with or without cause by the CITY. Termination without cause shall be effective only upon 60-day's written notice to ARTS. During said 60-day period, ARTS shall perform all services in accordance with this Agreement. This Agreement may also be terminated immediately by the CITY for cause in the event of a material breach of this Agreement, misrepresentation by ARTS in connection with the formation of this Agreement or the performance of services, or the failure to perform services as directed by the CITY. Termination with or without cause shall be effected by delivery of written Notice of Termination to ARTS as provided for herein. The CITY further reserves the right to immediately terminate this Agreement upon: (a) the filing of a petition in bankruptcy affecting ARTS; (b) a reorganization of ARTS for the benefit of creditors; or (c) a business reorganization, change in business name or change in business status of ARTS. Maintenance and Operating Agreement Page 11 of 20 City of National City and December 5, 2017 A Reason to Survive (ARTS) ARTICLE 11 HAZARDOUS MATERIALS Hazardous Materials Laws -Definition. As used in this Article, the term "Hazardous Materials' Laws" means any and all federal, state or local laws or ordinances, rules, decrees, orders, regulations or court decisions (including the so-called "common law") relating to hazardous substances, hazardous materials, hazardous waste, toxic substances, environmental conditions on, under, or about the Property, soil and ground water conditions, or other similar substances or conditions. The following legal authority is a non -exhaustive list of the legal authority that applies to the definition of the term "Hazardous Materials Laws": • the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended (42 U.S.C., Section 9601 et seq.) • the Hazardous Materials Transportation Act, as amended (49 U.S.C., Section 1801 et seq.), and • the Resource Conservation and Recovery Act of 1976, as amended (42 U.S.C., Section 6901 et seq.) 11.2 Hazardous Materials - Definition. As used in this Article the term "Hazardous Materials" means any chemical, compound, material, substance or other matter that: 11.2.1 is a flammable, explosive, asbestos, radioactive nuclear medicine, vaccine, bacteria, virus, hazardous waste, toxic, overtly injurious or potentially injurious material, whether injurious or potentially injurious by itself or in combination with other materials; 11.2.2 is controlled, referred to, designated in or governed by any Hazardous Materials Laws; 11.2.3 gives rise to any reporting, notice or publication requirements under any Hazardous Materials Laws, or; 11.2.4 is any other material or substance giving rise to any liability, responsibility or duty upon the CITY or the ARTS with respect to any third person under any Hazardous Materials Law. 11.3 ARTS Representations and Warranties. ARTS represents and warrants that, during the Term or any extension thereof, ARTS shall comply with the following provisions of this Article unless otherwise specifically approved in writing by the CITY, subject to the terms and conditions of the ARTS' maintenance obligations provided elsewhere in this Agreement: Maintenance and Operating Agreement Page 12 of 20 City of National City and December 5, 2017 A Reason to Survive (ARTS) 11.3.1 ARTS shall not cause or permit any Hazardous Materials to be brought, kept or used in or about the Property by ARTS, its agents, employees, assigns, contractors or invitees, except as required by ARTS' permitted use of the Property in the normal course of operations; 11.3.2 Any handling, transportation, storage, treatment, or usage by ARTS of Hazardous Materials that is to occur on the Property following the Commencement Date shall be in compliance with all applicable Hazardous Materials Laws; 11.3.3 Any leaks, spills, release, discharge, emission or disposal of Hazardous Materials which may occur on the Property following the Commencement Date shall be promptly and thoroughly cleaned and removed from the Property by ARTS at its sole expense, and any such discharge shall be promptly reported in writing to the CITY, and to any other appropriate governmental regulatory authorities; 11.3.4 No friable asbestos shall be constructed, placed on, deposited, stored, disposed of, or located by ARTS on the Property; 11.3.5 No underground improvements, including but not limited to treatment or storage tanks, or water, gas or oil wells shall be located by ARTS on the Property without the CITY's prior written consent; 11.3.6 ARTS shall promptly supply the CITY with copies of all notices, reports, correspondence, and submissions made by ARTS to the United States Environmental Protection Agency, the United Occupational Safety and Health Administration, and any other local, state or federal authority which requires submission of any information concerning environmental matters or hazardous wastes or substances pursuant to applicable Hazardous Materials' Laws; and 11.3.7 ARTS shall promptly notify the CITY of any liens threatened or attached against the Property pursuant to any Hazardous Materials' Law. If such a lien is filed against the Property, then, within the earlier of (i) twenty (20) days following such filing, or (ii) before any governmental authority commences proceedings to sell the Property pursuant to the lien, ARTS shall either: (a) pay the claim and remove the lien from the Property, or (b) furnish either: (1) a bond or cash deposit reasonably satisfactory to the CITY in an amount not less than the claim from which the lien arises, or; (2) other security satisfactory to the CITY in an amount not less than that which is sufficient to discharge the claim from which the lien arises. Maintenance and Operating Agreement Page 13 of 20 City of National City and December 5, 2017 A Reason to Survive (ARTS) 11.3.8 At the end of this Agreement, ARTS shall surrender the Property to the CITY free of any and all Hazardous Materials and in compliance with all Hazardous Materials' Laws affecting the Property. ARTICLE 12 ASSIGNMENT; THIRD PARTY USE OF PROPERTY 12.1 Assignment; CITY's Consent Required. ARTS shall not voluntarily or involuntarily assign or otherwise transfer all or any portion of its rights and duties under this Agreement without the CITY's prior written consent. Any attempted assignment or transfer without the CITY's prior written consent shall be void. 12.2 Third Party Use of the Property. ARTS may engage third party organizations to provide special services or programming at the Property if: 12.2.1 The CITY consents, in writing, to the third party organizations' proposed use of the Property and; 12.2.2 The third party organization obtains policies of insurance acceptable to the City's Risk Manager and Article 9.3 of this Agreement. ARTICLE 13 DEFAULTS BY ARTS OR BY CITY; REMEDIES 13.1 Events of Default; Remedies. The following sub -articles shall apply if either ARTS or the CITY neglects, fails to perform, or fails to observe any of their respective obligations under the terms, covenants, or conditions contained in this Agreement ("Default"): 13.1.1 Thirty -Day Correction of Default. If either ARTS or the CITY determines that the other party is in Default, then the non -defaulting party must provide the defaulting party written notice of the Default and thirty (30) days to correct the Default. 13.1.2 Extended Correction of Default. If the defaulting party determines that more than thirty (30) days is required to correct the Default, the defaulting party must provide the other party written notice of the reasons why additional time is required to correct such Default. The defaulting party must use diligent efforts to correct a Default under this Article 13.1.2 and, in any case, must correct such Default within ninety (90) days from the date of the written notice of default. 13.1.3 Remedies for Failure to Correct Default. If the defaulting party fails to comply with Article 13.1.1. or 13.1.2, then the non -defaulting party may immediately terminate this Agreement. The defaulting party shall be liable to the non -defaulting party for any and all damages sustained by the non -defaulting party as a result of the defaulting parties' breach. Maintenance and Operating Agreement Page 14 of 20 City of National City and December 5, 2017 A Reason to Survive (ARTS) ARTICLE 14 ABANDONMENT 14.1 Abandonment. ARTS shall not vacate or abandon the Property at any time during the Term nor permit the Property to remain unoccupied for a period of longer than five (5) consecutive days during the term of this Agreement. These provisions shall not apply if the Property is closed and operation is temporarily discontinued therein on account of strikes, lockouts, acts of nature, or similar causes beyond the reasonable control of ARTS. Any exceptions must be submitted in writing to the City Manager or designee for approval. ARTICLE 15 DAMAGE OR DESTRUCTION 15.1 ARTS' Duty to Repair Casualty. ARTS shall, as expeditiously as reasonably possible, repair any damages to the Property caused by fire, earthquake, or any other identifiable event of a sudden, unexpected, or unusual nature ("Casualty"), and repair, restore, and replace any such damaged or destroyed Fixtures, Improvements or Personal Property ("Casualty Repairs"). Any Casualty Repairs made under this Article 15 are: (a) To be performed at ARTS' sole cost and expense; (b) To be performed except as otherwise provided in this Article 15; and are (c) Subject to all other terms and conditions of this Agreement. 15.2 Construction Provisions. In the event of any reconstruction of the Property, Fixtures or Improvements required of ARTS pursuant to this Article, ARTS shall repair the Property, and repair or rebuild such Fixtures and Improvements, to substantially the same condition they were in immediately preceding such Casualty. 15.3 No Abatement. In the event of reconstruction, replacement, or repair by ARTS pursuant to this Article, ARTS shall continue its operations on the Property during any such period to the extent reasonably practicable from the standpoint of prudent business management, and in continuing compliance with applicable laws and regulations. ARTS shall not be entitled to any compensation or damages from CITY for: (a) loss of use of the whole or any part of the Property; (b) ARTS' Personal Property; or (c) any inconvenience or annoyance occasioned by such damage, reconstruction, or replacement. 15.4 Major Destruction. Notwithstanding any of the foregoing provisions of this Article to the contrary, if, at any time after the Commencement Date, (a) the Improvements are damaged or destroyed to the extent of more than twenty-five percent (25%) of their replacement cost, or (b) the damage is such that the Improvements cannot be repaired and restored within one hundred and eighty (180) days after the Casualty, then ARTS shall have the right to terminate this Agreement upon thirty (30) days' prior written notice to the CITY. Maintenance and Operating Agreement Page 15 of 20 City of National City and December 5, 2017 A Reason to Survive (ARTS) ARTICLE 16 EMINENT DOMAIN 16.1 Condemnation. ARTS may terminate this Agreement within twenty (20) days after the date that a condemning authority (by a party other than the CITY) takes possession of the Property by delivery of written notice of such condemnation if: (a) If all of the Property is taken under eminent domain proceedings; or (b) less than all of the Property is taken under such eminent domain proceeding and the part taken substantially impairs the ability of ARTS to use the remainder of the Property for the purposes permitted by this Agreement. In the absence of such written notice from a condemning authority, ARTS may terminate this Agreement within twenty (20) days after the condemning authority shall have taken possession. 16.2 Continuation of Operating Agreement after Condemnation. If this Agreement is not terminated by ARTS, it shall remain in full force and effect as to any portion of the Property remaining, and this Agreement will end as of the date possession of the part taken by the public entity as to the part of the Property that is taken. 16.3 Award. All monies awarded in any condemnation shall belong to the CITY. The CITY shall have no liability to ARTS for any award not provided by the condemning authority. ARTICLE 17 SALE OR MORTGAGE BY CITY 17.1 Sale or Mortgage. The CITY may, pursuant to existing and subsequently enacted CITY ordinances and State laws, at any time, and without the consent of ARTS, vacate, sell, purchase, exchange, transfer, assign, lease, encumber or convey the CITY's interest in whole or in part, in the Property (collectively referred to in this Article as a "Sale"). The CITY shall provide to ARTS written notice of the CITY's intent to a Sale or discontinuance pursuant to this Article at least ninety (90) days prior to said proposed transfer. 17.2 Release on Sale. From and after a Sale or discontinuance of the CITY's entire interest in the Property, the CITY shall be released from all liability to ARTS and ARTS successors and assigns arising from this Agreement because of any act, occurrence, or omission of the CITY occurring after such Sale. ARTICLE 18 CITY'S RIGHT OF ACCESS 18.1 Right of Entry. CITY, its agents, employees, and contractors may enter the Property at any time with or without notice to ARTS to: Maintenance and Operating Agreement Page 16 of 20 City of National City and December 5, 2017 A Reason to Survive (ARTS) (a) respond to health and safety concerns; (b) inspect the Property and Improvements; (c) determine whether ARTS is complying with its obligations in this Agreement (including its obligations with respect to compliance with Hazardous Materials Laws) (d) post notices of non -responsibility or similar notices (e) inspect the progress of construction of any improvement; or (f) make repairs that this Agreement requires or allows CITY to make, or make repairs to any adjoining space or utility services, or make repairs, alterations, or improvements to any other portion of the Property All work enumerated in this Article 18.1 must be done as promptly as reasonably possible and so as to cause as little interference to ARTS as reasonably possible. ARTICLE 19 NOTICES 19.1 Notices. Whenever in this Agreement it shall be required or permitted that notice or demand be given or served by either party to this Agreement to or on the other, such notice or demand shall be in writing, mailed or personally delivered to the other party at the addresses specified below. Mailed notices shall be sent by United States Postal Service, postage prepaid and shall be deemed to have been given, delivered, and received three (3) business days after the date such notice or other communication is posted by the United States Postal Service. All other such notices or other communications shall be deemed given, delivered, and received upon actual receipt. Either party may, by written notice delivered pursuant to this provision, at any time designate a different address to which notices shall be sent. CITY: City Manager City of National City 1243 National City Boulevard National City, CA 91950-4397 With a copy to: Community Services Recreation Superintendent City of National City 140 East 12th Street, Suite B National City, CA 91950 ARTS: A Reason to Survive, Inc. Executive Director 200 East 12th Street National City, CA 91950 Maintenance and Operating Agreement Page 17 of 20 City of National City and December 5, 2017 A Reason to Survive (ARTS) ARTICLE 20 NON-DISCRIMINATION 20.1 Non -Discrimination. ARTS hereby covenants by and for itself, its successors, assigns and all persons claiming under or through it, that this Agreement is made and accepted upon and subject to the condition that there shall be no discrimination against, or segregation of, any person or group of persons on account of race, age, color, creed, religion, sex, sexual orientation, marital status, national origin, physical handicap, medical condition or ancestry in the use, operation, or enjoyment of the Property. ARTICLE 21 RECORDS, ACCOUNTS, AND AUDITS 21.1 ARTS' Duty to Keep Records. ARTS shall, at all times during the Term, and for a period of five (5) years following expiration or earlier termination of this Agreement, keep or cause to be kept, true and complete books, records and accounts of all (a) construction undertaken pursuant to the rights conferred on ARTS under this Agreement, and (b) financial transactions in the operation of all business activities, of whatever nature, conducted pursuant to the rights granted by this Agreement. Such records shall also include the source and disposition of all trash and other waste collected and disposed of by ARTS in the operation of its business. Said records must be supported by source documents such as receipts, invoices, sales slips, cash register tapes, purchase invoices or other pertinent documents. 21.2 CITY's Right to Audit. All ARTS books, accounts, and records shall be kept and made available at one location within the limits of the County of San Diego. The CITY shall have the right at any reasonable time to examine and perform audits of ARTS' records pertaining to (a) construction undertaken pursuant to the rights conferred on ARTS under this Agreement, and (b) its operations on the Property, including, without limitation, any records pertaining to ARTS' use of utilities on the Property. The cost of said audits shall be borne by the CITY, except that ARTS shall provide to the CITY, at ARTS' expense, necessary data to enable the CITY to fully comply with each and every requirement of the State of California or by the United States of America for information or reports relating to this Agreement and to ARTS' use of the Property. ARTICLE 22 ADMINISTRATIVE PROVISIONS 22.1 Authority. ARTS represents and warrants that it has full power and authority to execute and fully perform its obligations under this Agreement pursuant to its governing instruments, without the need for any further action, and that the person executing this Agreement on behalf of ARTS is the duly designated agent of ARTS and is authorized to do so. Maintenance and Operating Agreement Page 18 of 20 City of National City and December 5, 2017 A Reason to Survive (ARTS) 22.2 Captions. The captions and headings appearing in this Operating Agreement are inserted for convenience only and in no way define, limit, construe, or describe the scope or intent of the provisions of this Agreement. 22.3 CITY Approval. Except where stated in this Agreement to the contrary, the phrases "CITY approval," and "CITY's written approval" or such similar phrases shall mean approval of the City Manager or designee, which approval shall not be unreasonably withheld. 22.4 Cumulative Remedies. In the event of a default under this Agreement, each party's remedies shall be limited to those remedies set forth in this Agreement. Any such remedies are cumulative and not exclusive of any other remedies under this Agreement to which the non -defaulting party may be entitled. 22.5 Entire Agreement. This Agreement, together with all addenda and exhibits attached hereto, constitutes the entire agreement between the parties with respect to the subject matter hereof, and all prior or contemporaneous agreements, understandings and representations, oral or written, are superseded. 22.6 Exhibits. All exhibits referred to herein are attached hereto and incorporated by reference: Exhibit "A": Legal description of the Property 22.7 Force Majeure. If either party is prevented or delayed from performing any act or discharging any obligation hereunder, because of any and all causes beyond either party's reasonable control, including unusual delays in deliveries, abnormally adverse weather conditions, unavoidable casualties, strikes, labor disputes, inability to obtain labor, materials or equipment, acts of God, governmental restrictions, regulations or controls, any hostile government actions, acts of terrorism, civil commotion and fire or other casualty, legal actions attacking the validity of this Agreement or the CITY or ARTS' operations of the Property, or any other casualties beyond the reasonable control of either party ("Force Majeure"), performance of such act shall be excused for the period of such delay, and the period for performance of such act shall be extended for a period equivalent to the period of such delay. Force Majeure shall not include any bankruptcy, insolvency, or other financial inability on the part of either party hereto. 22.8 Governing Law. This Agreement shall be governed, construed, and enforced in accordance with the laws of the State of California. 22.9 Independent Contractor. ARTS acknowledges that it is an independent contractor; that it alone retains control of the manner of conducting its activities in furtherance of this Agreement; and that it, as well as any persons, contractors or agents it may employ, are not employees of CITY for any purpose. 22.10 Interpretation. The provisions of this Agreement shall be liberally construed to effectuate its purpose. The language of all parts of this Agreement shall be construed simply according to its plain meaning and shall not be construed for or against either party. Maintenance and Operating Agreement Page 19 of 20 City of National City and December 5, 2017 A Reason to Survive (ARTS) 22.11 ARTS' Agreement Administration. ARTS confirms that ARTS' Agreement Administrator has been given full operational responsibility for compliance with the terms of this Agreement. ARTS shall provide the CITY with a written schedule of its normal hours of business operation on the Property, and ARTS' Agreement Administrator, or a representative designated thereby, shall be available to the CITY during ARTS' normal business hours, to resolve problems or answer question pertaining to this Agreement and ARTS' operations on the Property. 22.12 Modification. The provisions of this Agreement may not be modified, except by a written amendment signed by both parties. 22.13 Partial Invalidity. If any provision of this Agreement is determined by a court of competent jurisdiction to be invalid or unenforceable, the remainder of this Agreement shall not be affected thereby. Each provision shall be valid and enforceable to the fullest extent permitted by law. 22.14 Successors and Assigns. This Agreement shall be binding on and inure to the benefit of the parties and their successors and assigns, except as may otherwise be provided herein. ARTS shall not assign this agreement to any other party unless approved in writing by the CITY. 22.15 Time of Essence. Time is of the essence of each and every provision of this Agreement. 22.16 Waiver. No provision of this Operating Agreement or the breach thereof shall be deemed waived, except by written consent of the party against whom the waiver is claimed. IN WITNESS WHEREOF, the CITY and ARTS have duly executed this Agreement as of the day and year first above written. CITY OF NATIONAL CITY By: Ror�l4lorrison, Mayor APPROVED AS TO FORM: nail P. Morris -Jones By: Ro s erto M. Contreras Deputy City Attorney A REASON TO SURVIVE a California non-profit corporation, d.b.a. "ARTS" By: Fabienne Hanks, Board Chair Amanda Montgomery, Board Member Maintenance and Operating Agreement Page 20 of 20 City of National City and A Reason to Survive (ARTS) December 5, 2017 • 11— < Exhibit B Boundary of the ARTS MO Agreement �', AREASON-02 ACQRE:r CERTIFICATE OF LIABILITY INSURANCE `•-�'� CCHACON D IDDIYYYY) 091109/14412017 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER. IMPORTANT: If the certificate holder Is an ADDITIONAL INSURED, the policy(ies) must have ADDITIONAL INSURED provisions or be endorsed. If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder In lieu of such endorsement(s). PRODUCER HUB International Insurance Services Inc. 5731 Palmer Way, Suite D Carlsbad, CA 92010 NAME: PHC44E E 760 603-0131 FAx (ac, Na �): (AIC, No): loss• P 8URERfIlAFFORDING COVERAGE NAIC INSURER A : Philadelphia Indemnity insurance Company 18058 INSURED A Reason to Survive 200 E.12th. St National City, CA 91953 INSURER B : State Compensation Insurance Fund of California 35076 INsunia c : INSURER D ; INSURER E ; INSURER F : COVERAGES CERTIFICATE NUMBER: REVISION NUMBER: THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLIC ES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. INSR LTR TYPE OF INSURANCE AWL NOD SUER MD POLICY NUMBER POLICY EFF WM/DO/YYYY) 07101/2017 POLL EXP (M !YYYYI users A X COMMERCIAL GENERAL CLAMS -MADE LIABILITY X OCCUR X PHPK1512422 EACH OCCURRENCE $ 1,000,000 07/01/2018 DpITAAPE,A NTED I $ 100,000 MED EXP (MY one person) $ 5,000 PERSONAL&ADVINJURY $ 1,000,000 GEN L AGGREGATE LIMIT APPLIES PER: r I LOC GENERAL AGGREGATE $ 2,000,000 POLICY JECT PRODUCTS-COMP/OP AGO $ 2,000,000 OTHER: $ A AUTOMOBILE X LIABILITY ANY TO AUTOSDONLY AUTOS ONLY _ AUppTry06 PASTE AUTO fA_Y X PHPK1512422 07/D1/2017 OT10112018 COMBINED SINGLE LIMIT IEe ecddentl $ 1,000,000 BODILY INJURY on) S $ pBRODDiLYYII7NJURY(Peraccident) (Per eooidenl E - $ $ A X UMBRELLA LIAR IX EXCESS LIAB 1 I OCCUR CLAIMS-MADE PHUB545546 07/01/2017 07/01/2018 EACH OCCURRENCE $ 3,000,000 _AGGREGATE $ D [) R�FgTPNTTIION$ 10,000 Prod/Compl OpspT�. $ 3,000,000 B �pXI AANNDR MPLOYERS LIA Fltif YIN ANY PROPFBETORIPARTNERIEXECUTNE OFFICERAtiy 1EXCLUDED? N ( an Inn NNHH ryyee6 dsecruo under DESCRIPTION OF OPERATIONS below NIA x 4037947 12/20/2016 12/20/2017 X STATUTE ER EL EACH ACCIDENT 3 1,000,000 E.L DISEASE - EA EMPLOYEE $ 1'000'OOO E.L DISEASE - POLICY T LIMI $ 1,000,000 DESCRIPTION Of OPERATIONS! LOCATIONS J VEHICLES ,'tACORD 101, Add!tlorrel Rr`ne?t3 Schedule, meg be et ectwJ It more :pees a nquind) The City of National City, Its elected officials, officers, agents, employees end volunteers are named as additional Insured per General Liability form #PI-GLD-HS(1011), and Auto form #CA 20 48 02 99. When required by written contract. CERTIFICATE HOLDER City of National City do Risk Manager 1243 National City Blvd National City, CA 91950-4397 CANCELLATION SHOULD ANY OF THE ABOVE DESCRIBED POUCIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE POLICY PROVISIONS, ACORD 25 (2016/03) ®1988-2015 ACORD CORPORATION. All rights reserved. The ACORD name and logo are registered marks of ACORD PI-GLD-HS (10/11) THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. GENERAL LIABILITY DELUXE ENDORSEMENT: HUMAN SERVICES This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE It is understood and agreed that the following extensions only apply in the event that no other specific coverage for the indicated loss exposure Is provided under this policy. If such specific coverage applies, the terms, conditions and limits of that coverage are the sole and exclusive coverage applicable under this policy, unless otherwise noted on this endorsement. The following is a summary of the Limits of Insurance and additional coverages provided by this endorsement. For complete details on specific coverages, consult the policy contract wording. Coverage Applicable Limit of Insurance Page # Extended Property Damage Included 2 Limited Rental Lease Agreement Contractual Liability $50,000 limit 2 Non -Owned Watercraft Less than 58 feet 2 Damage to Property You Own, Rent, or Occupy $30,000 limit 2 Damage to Premises Rented to You $1,000,000 3 HIPAA Clarification 4 Medical Payments $20,000 5 Medical Payments — Extended Reporting Period 3 years 5 Athletic Activities Amended 5 Supplementary Payments — Ball Bonds $5,000 5 Supplementary Payment — Loss of Earnings $1,000 per day 5 Employee Indemnification Defense Coverage $25,000 5 Key and Lock Replacement — Janitorial Services Client Coverage $10,000 limit 6 Additional Insured — Newly Acquired Time Period Amended 6 Additional Insured — Medical Directors and Administrators included 7 Additional Insured — Managers and Supervisors (with Fellow Employee Coverage) Included 7 Additional Insured — Broadened Named Insured Included 7 Additional Insured — Funding Source Included 7 Additional Insured — Home Care Providers Included 7 Additional Insured — Managers, Landlords, or Lessors of Premises Included 7 Additional insured — Lessor of Leased Equipment Included 7 Additional Insured — Grantor of Permits Included 8 Additional Insured — Vendor Included 8 Additional Insured — Franchisor Included 9 Additional Insured — When Required by Contract Included 9 Additional Insured — Owners, Lessees, or Contractors included 9 Additional Insured — State or Political Subdivisions included 10 Page 1 of 12 Includes copyrighted material of Insurance Services Office, Inc., with its permission. © 2011 Philadelphia Indemnity Insurance Company Pl-GLD-HS (10/11) Duties in the Event of Occurrence, Claim or Suit Included 10 Unintentional Failure to Disclose Hazards Included 10 Transfer of Rights of Recovery Against Others To Us Clarification 10 Liberalization Included 11 Bodily Injury — includes Mental Anguish Included 11 Personal and Advertising Injury — includes Abuse of Process, Discrimination Included 11 A. Extended Property Damage SECTION I - COVERAGES, COVERAGE A BODILY INJURY AND PROPERTY DAMAGE LIABILITY, Subsection 2. Exclusions, Paragraph a. is deleted in its entirety and replaced by the following: a. Expected or Intended Injury "Bodily injury' or property damage" expected or intended from the standpoint of the insured. This exclusion does not apply to "bodily injury` or "property damage' resulting from the use of reasonable force to protect persons or property. B. Limited Rental Lease Agreement Contractual Liability SECTION I - COVERAGES, COVERAGE A. BODILY INJURY AND PROPERTY DAMAGE LIABILITY, Subsection 2. Exclusions, Paragraph b. Contractual Liability is amended to include the following: (3) Based on the named insured's request at the time of claim, we agree to indemnify the named insured for their liability assumed in a contract or agreement regarding the rental or lease of a premises on behalf of their client, up to $50,000. This coverage extension only applies to rental lease agreements. This coverage is excess over any renter's liability insurance of the client. C. Non -Owned Watercraft SECTION I - COVERAGES, COVERAGE A BODILY INJURY AND PROPERTY DAMAGE LIABILITY, Subsection 2. Exclusions, Paragraph g. (2) is deleted in its entirety and replaced by the following: (2) A watercraft you do not own that is: (a) Less than 58 feet long; and (b) Not being used to carry persons or property for a charge; This provision applies to any person, who with your consent, either uses or is responsible for the use of a watercraft. This insurance is excess over any other valid and collectible insurance available to the insured whether primary, excess or contingent. D. Damage to Property You Own, Rent or Occupy SECTION I - COVERAGES, COVERAGE A BODILY INJURY AND PROPERTY DAMAGE Page 2 of 12 Includes copyrighted material of Insurance Services Office, Inc., with its permission. © 2011 Philadelphia Indemnity Insurance Company PI-GLD-HS (10/11) LIABILITY, Subsection 2. Exclusions, Paragraph j. Damage to Property, Item (1) is deleted in its entirety and replaced with the following: (1) Property you own, rent, or occupy, including any costs or expenses Incurred by you, or any other person, organization or entity, for repair, replacement, enhancement, restoration or maintenance of such property for any reason, including prevention of injury to a person or damage to another's property, unless the damage to property is caused by your client, up to a $30,000 limit. A client is defined as a person under your direct care and supervision. E. Damage to Premises Rented to You 1. If damage by fire to premises rented to you is not otherwise excluded from this Coverage Part, the word "fire" is changed to "fire, lightning, explosion, smoke, or leakage from automatic fire protective systems" where it appears in: a. The last paragraph of SECTION I — COVERAGES, COVERAGE A BODILY INJURY AND PROPERTY DAMAGE LIABILITY, Subsection 2. Exclusions; is deleted in its entirety and replaced by the following: Exclusions c. through n. do not apply to damage by fire, lightning, explosion, smoke, or leakage from automatic fire protective systems to premises while rented to you or temporarily occupied by you with permission of the owner. A separate limit of insurance applies to this coverage as described in SECTION III — LIMITS OF INSURANCE. b. SECTION III — LIMITS OF INSURANCE, Paragraph 6. is deleted in its entirety and replaced by the following: Subject to Paragraph 5. above, the Damage To Premises Rented To You Limit is the most we will pay under Coverage A for damages because of "property damage" to any one premises, while rented to you, or in the case of damage by fire, lightning, explosion, smoke, or leakage from automatic fire protective systems while rented to you or temporarily occupied by you with permission of the owner. c. SECTION V — DEFINITIONS, Paragraph 9.a., is deleted in its entirety and replaced by the following: A contract for a lease of premises. However, that portion of the contract for a lease of premises that indemnifies any person or organization for damage by fire, lightning, explosion, smoke, or leakage from automatic fire protective systems to premises while rented to you or temporarily occupied by you with permission of the owner is not en "insured contract"; 2. SECTION IV — COMMERCIAL GENERAL LIABILITY CONDITIONS, Subsection 4. Other Insurance, Paragraph b. Excess insurance, (1) (a) (II) is deleted in its entirety and replaced by the following: That Is insurance for fire, lightning, explosion, smoke, or leakage from automatic fire protective systems for premises rented to you or temporarily occupied by you with permission of the owner; 3. The Damage To Premises Rented To You Limit section of the Declarations is amended to the greater of: Page 3 of 12 Includes copyrighted material of Insurance Services Office, Inc., with its permission. © 2011 Philadelphia Indemnity Insurance Company PI-GLD-HS (10/11) a. $1,000,000; or b. The amount shown in the Declarations as the Damage to Premises Rented to You Limit. This is the most we will pay for all damage proximately caused by the same event, whether such damage results from fire, lightning, explosion, smoke, or leaks from automatic fire protective systems or any combination thereof. F. HIPAA SECTION I — COVERAGES, COVERAGE B PERSONAL AND ADVERTISING INJURY LIABILITY is amended as follows: 1. Paragraph 1. Insuring Agreement is amended to include the following: We will pay those sums that the insured becomes legally obligated to pay as damages because of a "violation(s)" of the Health Insurance Portability and Accountability Act (HIPAA). We have the right and the duty to defend the insured against any "suit," 'investigation," or "civil proceeding" seeking these damages. However, we will have no duty to defend the insured against any "suit" seeking damages, "investigation,' or "civil proceeding" to which this insurance does not apply. 2. Paragraph 2. Exclusions is amended to include the following additional exclusions: This insurance does not apply to: a. Intentional, Willful, or Deliberate Violations Any willful, intentional, or deliberate 'violation(s)" by any insured. b. Criminal Acts Any 'violation" which results in any criminal penalties under the HIPAA. c. Other Remedies Any remedy other than monetary damages for penalties assessed. d. Compliance Reviews or Audits Any compliance reviews by the Department of Health and Human Services. 3. SECTION V — DEFINITIONS is amended to include the following additional definitions: a. "Civil proceeding" means an action by the Department of Health and Human Services (HHS) arising out of 'violations." b. 'Investigation' means an examination of an actual or alleged "violation(s)" by HHS. However, "investigation' does not include a Compliance Review. c. "Violation" means the actual or alleged failure to comply with the regulations Included in the HIPAA. Page 4 of 12 Includes copyrighted material of Insurance Services Office, Inc., with its permission. © 2011 Philadelphia Indemnity Insurance Company PI-GLD-HS (10/11) G. Medical Payments — Limit Increased to $20,000, Extended Reporting Period If COVERAGE C MEDICAL PAYMENTS is not otherwise excluded from this Coverage Part: 1. The Medical Expense Limit is changed subject to all of the terms of SECTION III - LIMITS OF INSURANCE to the greater of: a. $20,000; or b. The Medical Expense Limit shown in the Declarations of this Coverage Part. 2. SECTION I — COVERAGE, COVERAGE C MEDICAL PAYMENTS, Subsection 1. Insuring Agreement, a. (3) (b) is deleted in its entirety and replaced by the following: (b) The expenses are incurred and reported to us within three years of the date of the accident. H. Athletic Activities SECTION I — COVERAGES, COVERAGE C MEDICAL PAYMENTS, Subsection 2. Exclusions, Paragraph e. Athletic Activities is deleted in its entirety and replaced with the following: e. Athletic Activities To a person injured while taking part in athletics. I. Supplementary Payments SECTION I — COVERAGES, SUPPLEMENTARY PAYMENTS - COVERAGE A AND B are amended as follows: 1. b. is deleted in its entirety and replaced by the following: 1. b. Up to $5000 for cost of bail bonds required because of accidents or traffic law violations arising out of the use of any vehicle to which the Bodily Injury Liability Coverage applies. We do not have to furnish these. 1.d. is deleted in its entirety and replaced by the following: 1. d. All reasonable expenses incurred by the insured at our request to assist us in the investigation or defense of the claim or "suit", Including actual loss of earnings up to $1,000 a day because of time off from work. J. Employee Indemnification Defense Coverage SECTION I — COVERAGES, SUPPLEMENTARY PAYMENTS — COVERAGES A AND B the following is added: We will pay, on your behalf, defense costs incurred by an °employee" in a criminal proceeding occurring in the course of employment. The most we will pay for any "employee" who is alleged to be directly involved in a criminal proceeding Is $25,000 regardless of the numbers of "employees," claims or "suits' brought or persons or organizations making claims or bringing "suits. Page 5 of 12 Includes copyrighted material of Insurance Services Office, Inc., with its permission. © 2011 Philadelphia Indemnity Insurance Company PI-GLD-HS (10/11) K. Key and Lock Replacement — Janitorial Services Client Coverage SECTION I — COVERAGES, SUPPLEMENTARY PAYMENTS — COVERAGES A AND B is amended to include the following: We will pay for the cost to replace keys and locks at the °clients" premises due to theft or other loss to keys entrusted to you by your "client," up to a $10,000 limit per occurrence and $10,000 policy aggregate. We will not pay for loss or damage resulting from theft or any other dishonest or criminal act that you or any of your partners, members, officers, "employees°, "managers", directors, trustees, authorized representatives or any one to whom you entrust the keys of a `client' for any purpose commit, whether acting alone or in collusion with other persons. The following, when used on this coverage, are defined as follows: a. "Client" means an individual, company or organization with whom you have a written contract or work order for your services for a described premises and have billed for your services. b. "Employee" means: (1) Any natural person: (a) While in your service or for 30 days after termination of service; (b) Who you compensate directly by salary, wages or commissions; and (c) Who you have the right to direct and control while performing services for you; or (2) Any natural person who is furnished temporarily to you: (a) To substitute for a permanent 'employee" as defined in Paragraph (1) above, who is on leave; or (b) To meet seasonal or short-term workload conditions; while that person is subject to your direction and control and performing services for you. (3) "Employee" does not mean: (a) Any agent, broker, person leased to you by a labor leasing firm, factor, commission merchant, consignee, independent contractor or representative of the same general character; or (b) Any "manager," director or trustee except while performing acts coming within the scope of the usual duties of en "employee." c. "Manager" means a person serving in a directorial capacity for a limited liability company. L. Additional Insureds SECTION II — WHO IS AN INSURED is amended as follows: 1. If coverage for newly acquired or formed organizations is not otherwise excluded from this Page 6 of 12 Includes copyrighted material of Insurance Services Office, Inc., with its permission. © 2011 Philadelphia Indemnity Insurance Company PI-GLD-HS (10/11) Coverage Part, Paragraph 3.a. is deleted in its entirely and replaced by the following: a. Coverage under this provision is afforded until the end of the policy period. 2. Each of the following is also an insured: a. Medical Directors and Administrators — Your medical directors and administrators, but only while acting within the scope of and during the course of their duties as such. Such duties do not include the furnishing or failure to furnish professional services of any physician or psychiatrist in the treatment of a patient. b. Managers and Supervisors — Your managers and supervisors are also insureds, but only with respect to their duties as your managers and supervisors. Managers and supervisors who are your "employees' are also insureds for "bodily injury" to a co - "employee" while in the course of his or her employment by you or performing duties related to the conduct of your business. This provision does not change Item 2.a.(1)(a) as It applies to managers of a limited liability company. c. Broadened Named Insured — Any organization and subsidiary thereof which you control and actively manage on the effective date of this Coverage Part. However, coverage does not apply to any organization or subsidiary not named in the Declarations as Named Insured, if they are also insured under another similar policy, but for its termination or the exhaustion of its limits of insurance. d. Funding Source — Any person or organization with respect to their liability arising out of: (1) Their financial control of you; or (2) Premises they own, maintain or control while you lease or occupy these premises. This insurance does not apply to structural alterations, new construction and demolition operations performed by or for that person or organization. e. Home Care Providers — At the first Named Insured's option, any person or organization under your direct supervision and control while providing for you private home respite or foster home care for the developmentally disabled. f. Managers, Landlords, or Lessors of Premises — Any person or organization with respect to their liability arising out of the ownership, maintenance or use of that part of the premises leased or rented to you subject to the following additional exclusions: This insurance does not apply to: (1) Any "occurrence" which takes place after you cease to be a tenant in that premises; or (2) Structural alterations, new construction or demolition operations performed by or on behalf of that person or organization. g. Lessor of Leased Equipment — Automatic Status When Required In Lease Agreement With You — Any person or organization from whom you lease equipment when you and such person or organization have agreed in writing in a contract or agreement that such person or organization is to be added as an additional insured on your policy. Such person or Page 7 of 12 Includes copyrighted material of Insurance Services Office, Inc., with its permission. © 2011 Philadelphia Indemnity Insurance Company PI-GLD-HS (10/11) organization is an insured only with respect to liability for "bodily injury," "property damage" or "personal and advertising injury" caused, in whole or in part, by your maintenance, operation or use of equipment leased to you by such person or organization. A person's or organization's status as an additional insured under this endorsement ends when their contract or agreement with you for such leased equipment ends. With respect to the insurance afforded to these additional insureds, this insurance does not apply to any 'occurrence" which takes place after the equipment lease expires. h. Grantors of Permits — Any state or political subdivision granting you a permit in connection with your premises subject to the following additional provision: (1) This insurance applies only with respect to the following hazards for which the state or political subdivision has issued a permit in connection with the premises you own, rent or control and to which this insurance applies: (a) The existence, maintenance, repair, construction, erection, or removal of advertising signs, awnings, canopies, cellar entrances, coal holes, driveways, manholes, marquees, hoist away openings, sidewalk vaults, street banners or decorations and similar exposures; (b) The construction, erection, or removal of elevators; or (c) The ownership, maintenance, or use of any elevators covered by this insurance. Vendors — Only with respect to "bodily injury" or "property damage" arising out of "your products" which are distributed or sold in the regular course of the vendor's business, subject to the following additional exclusions: (1) The insurance afforded the vendor does not apply to: (a) "Bodily injury' or "property damage" for which the vendor is obligated to pay damages by reason of the assumption of liability in a contract or agreement. This exclusion does not apply to liability for damages that the vendor would have in the absence of the contract or agreement; (b) Any express warranty unauthorized by you; (c) Any physical or chemical change In the product made intentionally by the vendor; (d) Repackaging, except when unpacked solely for the purpose of inspection, demonstration, testing, or the substitution of parts under instructions from the manufacturer, and then rcpadcaged in the original container; (e) Any failure to make such inspections, adjustments, tests or servicing as the vendor has agreed to make or normally undertakes to make in the usual course of business, in connection with the distribution or sale of the products; (f) Demonstration, Installation, servicing or repair operations, except such operations performed at the vendor's premises in connection with the sale of the product; Page 8 of 12 Includes copyrighted material of Insurance Services Office, Inc., with its permission. © 2011 Philadelphia Indemnity Insurance Company PI-GLD-HS (10/11) (g) Products which, after distribution or sale by you, have been labeled or relabeled or used as a container, part or ingredient of any other thing or substance by or for the vendor; or (h) "Bodily injury" or "property damage" arising out of the sole negligence of the vendor for its own acts or omissions or those of Its employees or anyone else acting on its behalf. However, this exclusion does not apply to: (i) The exceptions contained in Sub -paragraphs (d) or (f); or (ii) Such inspections, adjustments, tests or servicing as the vendor has agreed to make or normally undertakes to make in the usual course of business, in connection with the distribution or sale of the products. (2) This insurance does not apply to any insured person or organization, from whom you have acquired such products, or any ingredient, part or container, entering into, accompanying or containing. J. Franchisor — Any person or organization with respect to their liability as the grantor of a franchise to you. k. As Required by Contract — Any person or organization where required by a written contract executed prior to the occurrence of a loss. Such person or organization is an additional insured for "bodily injury," "property damage" or "personal and advertising injury" but only for liability arising out of the negligence of the named insured. The limits of insurance applicable to these additional insureds are the lesser of the policy limits or those limits specified in a contract or agreement. These limits are included within and not in addition to the limits of insurance shown in the Declarations I. Owners, Lessees or Contractors — Any person or organization, but only with respect to liability for "bodily injury," "property damage" or "personal and advertising injury" caused, in whole or in part, by: (1) Your acts or omissions; or (2) The acts or omissions of those acting on your behalf; in the performance of your ongoing operations for the additional insured when required by a contract. With respect to the insurance afforded to these additional insureds, the following additional exclusions apply: This insurance does not apply to "bodily injury" or "property damage" occurring after: (a) All work, including materials, parts or equipment furnished in connection with such work, on the project (other than service, maintenance or repairs) to be performed by or on behalf of the additional insured(s) at the location of the covered operations has been completed; or (b) That portion of "your work" out of which the injury or damage arises has been put to its intended use by any person or organization other than another contractor or subcontractor engaged in performing operations for a principal as a part of the same project. Page 9 of 12 Includes copyrighted material of Insurance Services Office, Inc., with its permission. © 2011 Philadelphia Indemnity Insurance Company PI-GLD-HS (10/11) m. State or Political Subdivisions — Any state or political subdivision as required, subject to the following provisions: (1) This insurance applies only with respect to operations performed by you or on your behalf for which the state or political subdivision has Issued a permit, and is required by contract. (2) This insurance does not apply to: (a) "Bodily injury," "property damage" or "personal and advertising injury" arising out of operations performed for the state or municipality; or (b) "Bodily injury" or "property damage" included within the "products -completed operations hazard." M. Duties in the Event of Occurrence, Claim or Suit SECTION IV— COMMERCIAL GENERAL LIABILITY CONDITIONS, Paragraph 2. is amended as follows: a. is amended to include: This condition applies only when the "occurrence" or offense is known to: (1) You, if you are an individual; (2) A partner, if you are a partnership; or (3) An executive officer or insurance manager, if you are a corporation. b. is amended to include: This condition will not be considered breached unless the breach occurs after such claim or "suit" is known to: (1) You, if you are an individual; (2) A partner, if you are a partnership; or (3) An executive officer or Insurance manager, if you are a corporation. N. Unintentional Failure To Disclose Hazards SECTION IV — COMMERCIAL GENERAL UABILITY CONDITIONS, 6. Representations is amended to include the following: It is agreed that, based on our reliance on your representations as to existing hazards, if you should unintentionally fail to disclose all such hazards prior to the beginning of the policy period of this Coverage Part, we shall not deny coverage under this Coverage Part because of such failure. O. Transfer of Rights of Recovery Against Others To Us SECTION IV — COMMERCIAL GENERAL LIABILITY CONDITIONS, 8. Transfer of Rights of Page 10 of 12 Includes copyrighted material of Insurance Services Office, Inc., with its permission. © 2011 Philadelphia Indemnity Insurance Company PI-GLD-HS (10/11) Recovery Against Others To Us is deleted in its entirety and replaced by the following: If the insured has rights to recover all or part of any payment we have made under this Coverage Part, those rights are transferred to us. The insured must do nothing after loss to impair them. At our request, the insured will bring "suit" or transfer those rights to us and help us enforce them. Therefore, the insured can waive the insurer's rights of recovery prior to the occurrence of a loss, provided the waiver is made in a written contract. P. Liberalization SECTION IV — COMMERCIAL GENERAL LIABILITY CONDITIONS, is amended to include the following: If we revise this endorsement to provide more coverage without additional premium charge, we will automatically provide the additional coverage to all endorsement holders as of the day the revision is effective in your state. Q. Bodily Injury — Mental Anguish SECTION V — DEFINITIONS, Paragraph 3. Is deleted in its entirety and replaced by the following: "Bodily injury" means: a. Bodily injury, sickness or disease sustained by a person, and Includes mental anguish resulting from any of these; and b. Except for mental anguish, includes death resulting from the foregoing (Item a. above) at any time. R. Personal and Advertising Injury — Abuse of Process, Discrimination If COVERAGE B PERSONAL AND ADVERTISING INJURY LIABILITY COVERAGE is not otherwise excluded from this Coverage Part, the definition of "personal and advertising injury" is amended as follows: 1. SECTION V — DEFINITIONS, Paragraph 14.b. is deleted in its entirety and replaced by the following: b. Malicious prosecution or abuse of process; 2. SECTION V — DEFINITIONS, Paragraph 14. is amended by adding the following: Discrimination based on race, color, religion, sex, age or national origin, except when: a. Done intentionally by or at the direction of, or with the knowledge or consent of: (1) Any insured; or (2) Any executive officer, director, stockholder, partner or member of the insured; b. Directly or indirectly related to the employment, former or prospective employment, termination of employment, or application for employment of any person or persons by an insured; Page 11 of 12 Includes copyrighted material of Insurance Services Office, Inc., with its permission. © 2011 Philadelphia Indemnity Insurance Company PI-GLD-HS (10/11) c. Directly or indirectly related to the sale, rental, lease or sublease or prospective sales, rental, lease or sub -lease of any room, dwelling or premises by or at the direction of any insured; or d. Insurance for such discrimination is prohibited by or held in violation of law, public policy, legislation, court decision or administrative ruling. The above does not apply to fines or penalties imposed because of discrimination. Page 12 of 12 Includes copyrighted material of Insurance Services Office, Inc., with its permission. © 2011 Philadelphia Indemnity Insurance Company POLICY NUMBER: PHPK1648807 COMMERCIAL AUTO CA 20 48 02 99 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. DESIGNATED INSURED This endorsement modifies insurance provided under the following: BUSINESS AUTO COVERAGE FORM GARAGE COVERAGE FORM MOTOR CARRIER COVERAGE FORM TRUCKERS COVERAGE FORM With respect to coverage provided by this endorsement, the provisions of the Coverage Form apply unless modi- fied by this endorsement. This endorsement identifies person(s) or organization(s) who are "insureds° under the Who Is An Insured Provi- sion of the Coverage Form. This endorsement does not alter coverage provided in the Coverage Form. This endorsement changes the policy effective on the inception date of the policy unless another date is indicated below. Endorsement Effective: 7/01 /2017 Named Insured: A Reason to Survive Counter " (Authorized Representative) SCHEDULE Name of Person(s) or Organization(s): The City of National City, its elected officials, officers, agents, employees and volunteers (If no entry appears above, Information required to complete this endorsement will be shown in the Declarations as applicable to the endorsement.) Each person or organization shown in the Schedule is an "insured° for Liability Coverage, but only to the extent that person or organization qualifies as an Insured' under the Who Is An Insured Provision contained in Section ll of the Coverage Form. CA 20 48 02 99 Copyright, Insurance Services Office, Inc., 1998 Page 1 of 1 0 NAT f�foon�o� ?au -- City of National City (To be submitted only when there are no employees subject to Workers' Compensation) DECLARATION AND ADDENDUM TO ALL CONTRACTS AWARDED TO: i "-- 61 : 1.St/W / 0 .3 Lf /gti% v( (Company Name) or the purpose of inducing the City of National City to go forward with any contracts awarded to ie,,,,,'" o Sc-tievt v7� (Company), I declare as follows: 1, ,14,- 7 e S �A-u. I PA- ( (name) , 1 ryi"t f>i£(-4ci7 ar2[67p rle), am authorized to execute this document on behalf of _(company) with respect to compliance with the California Workers' Compensation and Labor laws. All work required will be performed personally and solely by volunteers of A /2r.C. 4 T e ,✓ v Src,ev/ via (company), who are independent contractors. If, however, --- /..( oA./ t o J1(QvIv4:: (company) shall Aver )e required to hire employees or Subcontractors to perform this contract, �fcJColJ'0Al 16 Sw, (//Vr (company) shall obtain Workers' Compensation Insurance and/or provide proof of Workers' Compensation Insurance coverage to the City of National City. • This document constitutes a declaration by ( %CJ►3 4 o Sc{ Q v/ via (company) against its financial interest, relative to any claims which may be asserted under the California Workers' Compensation and/or Labor laws against the City of National City relating to any bid or contract awarded f �( �= 10 „r 7Q _Cy (company). /C �9S �✓ /.. (company) will defend, indemnify, and hold harmless the City of National City, its officers and employees, from any and all claims and liability, including Workers' Compensation claims and liability that may be asserted or established by any party in the event it hires an employee in violation of this addendum or if a volunteer of the organization makes a claim against or alleges liability of the City of National City for Workers' Compensation, and it will further indemnify the City of National City, its officers and employees, for all damages the City thereby suffers. I agree that these declarations shall constitute an addendum to any bid or contract awarded to: _. X C/1-3'0 - / v 1E- (company). Dated: "` Rel,l,f 6 , 20 i) . (Insert company name in all ca By: , ,4 Ignature of Authorizid AIp1esentative) (Name and Title) 17C7DR, RESOLUTION NO. 2017 — 237 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NATIONAL CITY AUTHORIZING THE MAYOR TO EXECUTE A MAINTENANCE AND OPERATING AGREEMENT BY AND BETWEEN THE CITY OF NATIONAL CITY AND A REASON TO SURVIVE (ARTS), CONSISTING OF A TERM OF 36 MONTHS WITH AN OPTION TO EXTEND THE TERM FOR UP TO TWO ADDITIONAL 60 MONTH PERIODS FOR THE CITY -OWNED LAND AND BUILDING LOCATED AT 200 EAST 12TH STREET IN NATIONAL CITY WHEREAS, as part of the General Plan, the City's goal is to develop a cultural arts program to encourage and facilitate the development of art in public spaces and promote greater public awareness of architectural, urban design, and cultural heritage of the City; and WHEREAS, A Reason to Survive ("ARTS") has been a catalyst in establishing an arts, culture, and education district in the National City downtown area, and is dedicated to creating a movement to educate the public on the importance of the arts as a prevention and intervention vehicle to create positive transformation in children and youth facing adversity; and WHEREAS, the City owns the improved real property commonly known as 200 East 12th Street, National City (the "Property"); and WHEREAS, the improvements on the Property are sometimes referred to as the "Arts Center" building; and WHEREAS, the City desires the services of an organization to maintain and operate the Property in a manner beneficial to the culture and educational enrichment of the general public; and WHEREAS, the City has further determined that ARTS is skilled in creating public art, including capital art projects, that beautifies the community, and is capable of lifting the spirits of residents and visitors to National City ; and WHEREAS, ARTS and the City desire to enter into a Maintenance and Operating Agreement ("Agreement") for the Property with a term of thirty-six (36) months with an option to extend the term for up to two (2) sixty (60) month periods for ARTS to provide arts, culture, and education at the property located at 200 East 12th Street; and WHEREAS, ARTS will pay one dollar ($1) and deliver projects and programs in an annual value of $125,000 in consideration of the Agreement; and WHEREAS, as of December 31, 2017, ARTS will owe a balance of $112,500 in unpaid rent ("Unpaid Rent"); and WHEREAS, the Unpaid Rent will be paid off by the additional delivery of $112,500 in Projects and Programs during the initial thirty-six (36) month term; and NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of National City authorizes the Mayor to execute a Maintenance and Operating Agreement by and between the City and A Reason to Survive (ARTS), consisting of a term of 36 months with an option to extend the term for up to two additional 60 month periods for the City -owned land and building located at 200 East 12th Street in National City. Said Maintenance and Operating Agreement is on file in the office of the City Clerk. Resolution No. 2017 — 237 Page Two PASSED and ADOPTED this 5th day of December, 2017. Ron Morrison, Mayor ATTEST: Michael R. Dalla, Cl{y Clerk -Jones • Passed and adopted by the Council of the City of National City, California, on December 5, 2017 by the following vote, to -wit: Ayes: Councilmembers Mendivil, Morrison, Rios, Sotelo-Solis. Nays: Cano. Absent: None. Abstain: None. AUTHENTICATED BY: RON MORRISON Mayor of the City of National City, California /1 City Clerk of the City of IMational City, California By: Deputy I HEREBY CERTIFY that the above and foregoing is a full, true and correct copy of RESOLUTION NO. 2017-237 of the City of National City, California, passed and adopted by the Council of said City on December 5, 2017. City Clerk of the City of National City, California By: Deputy CITY OF NATIONAL CITY, CALIFORNIA COUNCIL AGENDA STATEMENT MEETING DATE: December 5, 2017 AGENDA ITEM NO. 15 TEM TITLE: Resolution of the City Council of the City of National City authorizing the Mayor to execute a Maintenance & Operating Agreement by and between the City and A Reason to Survive (ARTS), consisting of a term of 36 months with an option to extend the term for up to two additional 60 month periods for the city -owned land and building located at 200 East 12th Street in National City. PREPARED BY: Gregory Rose DEPARTMENT: Housing & Economic Deveapment Property Agent PHONE: 619 336-4266 EXPLANATION: (Please see attached background report). APPROVED FINANCIAL STATEMENT: APPROVED: ACCOUNT NO. APPROVED: See background report for financial statement. Finance MIS ENVIRONMENTAL REVIEW: The Maintenance & Operating Agreement is not considered a project as defined by the California Environmental Quality Act (CEQA), and is therefore not subject to CEQA. ORDINANCE: INTRODUCTION: FINAL ADOPTION: STAFF RECOMMENDATION: Approve the resolution. BOARD / COMMISSION RECOMMENDATION: N/A ATTACHMENTS: 1. Background Report 2. Maintenance & Operating Agreement Attachment No. 1 Background As part of the General Plan the City's goal is to develop a cultural arts program to encourage and facilitate the development of art in public spaces and promote greater public awareness of architectural, urban design and cultural heritage to the City. ARTS has been a catalyst in establishing an Arts, Culture and Education district in the downtown area. ARTS is dedicated to creating a movement behind the importance of the arts as a prevention and intervention vehicle to create positive transformation in children and youth facing adversity. They have become a part of the fabric of society in National City and continue to be motivated, flexible and a positive partner to work with. ARTS hopes to enter into a new Maintenance and Operating Agreement ("Agreement") with the City so they can continue to offer arts, culture and education to National City youth. First Lease Agreement with ARTS The original lease was entered into on July 1, 2012: • The term was for 36 months with an option to extend the lease for up to three (3) additional 12 month periods. • Rent was $50,000 per year in quarterly installments starting 10/1/2012. • ARTS ("Lessee") agreed to provide $30,000 in capital projects annually within the City of National City ("Lessor"), for each year of the lease. Examples of potential capital projects were capital improvements to the Arts Center building, public art throughout the community, event banners, gateway improvements, public signage, transit stop improvements, landscape, streetscape, and park improvements. Capital project values were calculated based on the direct out of pocket cost expended by Lessee on the project. Proposed projects were approved by the Lessor with an annual estimated budget that was verified annually within an annual report provided by the Lessee. • The Lessee provided quarterly reports to the City denoting National City participant numbers, total participant numbers, events coordinated, capital projects completed, community service hours completed in coordination with local schools, and any other pertinent statistics. Second Lease Agreement with ARTS In June of 2015 the City entered into a five year lease with ARTS, with an option to extend the lease for two additional 60 month periods. This lease included but was not limited to the following: • Rent was $50,000 per year and $75,000 per year in capital projects. • Expansion of the premises to include the basement and the south parking lot. The basement would be used for storage. The south parking lot would be used for storage and as a work area or extension of their prop shop. • ARTS agreed to increase the amount in capital projects provided annually within the City from $30,000 to $75,000 for each year of the lease. Attachment No. 1 • The City stated a willingness to undertake improvements so that all building/safety codes would be met in the basement and on the west side of the building. This includes installing electric power and life safety systems. • The City stated a willingness to improve the floors in the visual arts and music rooms to provide ADA compliance. However, the City's ability to undertake such improvements was dependent on the annually approved budget as well as the annually approved capital improvement program. • The City agreed to donate one or more City vehicles deemed as surplus to support ARTS public art and education programs. ARTS was responsible for all expenses to operate the vehicles. • ARTS agreed that upon completion of public art projects, the physical work of art would be transferred to the City and ARTS waived and released all rights of ownership to the work of art. Proposed Maintenance and Operating Agreement The City was approached by ARTS in June of 2017 to amend their lease to allow for more flexibility to fundraise and to further activate the building. The interim City Attorney suggested we enter into a Maintenance and Operating Agreement in lieu of a lease as it was more applicable for this relationship. A Maintenance and Operating Agreement makes the relationship more of a partnership, with ARTS assuming more responsibility for the day-to-day maintenance of the building. The new agreement will: • Make ARTS responsible for minor maintenance and repairs up to $3,000. The City will handle repairs over $3,000. • ARTS will be able to serve alcohol at ARTS hosted event. • ARTS will be able to rent the building out to third parties for events. • ARTS will provide capital improvements to the Arts Center building, projects and programing of at least $125,000 annually. • ARTS will pay the City $112,500 in unpaid rent in one lump sum, or provide Projects & programs to the CITY whose collective cost of completion equals the unpaid rent. Financial Statement for Propose Maintenance and Operating Agreement ARTS will be obligated to provide capital improvements to the Arts Center building, and projects & programing of at least $125,000 annually in lieu of a cash payment. The $125,000 per year toward projects and programs has to be completed on an annual basis. ARTS shall report progress, staff time and resources toward their goals on a quarterly basis. If ARTS is unable to prove progress towards their new annual commitment, the City reserves the right to cancel the Agreement after the initial 6 months of the Agreement. Repayment of the existing $112,500 debt will be tracked separately from the new annual requirement of $125,000. ARTS shall have until the end of the initial term to repay the existing debt or the Agreement's options will not be exercised. The CITY will pay for $20,000 worth of electricity and reasonable water usage at the Premises. ARTS shall pay for all costs of electricity that exceeds that sum. CALIFORNIA NATIONAL CITY INCORPORA'PED J MAINTENANCE AND OPERATING AGREEMENT by and between CITY OF NATIONAL CITY and A REASON TO SURVIVE Dated as of December, 2015 SECTION HEADING Recitals ARTICLE 1 ARTICLE 2 ARTICLE 3 ARTICLE 4 ARTICLE 5 ARTICLE 6 ARTICLE 7 ARTICLE 8 ARTICLE 9 ARTICLE 10 ARTICLE 11 ARTICLE 12 ARTICLE 13 ARTICLE 14 ARTICLE 15 ARTICLE 16 ARTICLE 17 ARTICLE 18 ARTICLE 19 ARTICLE 20 ARTICLE 21 AR1TICLE 22 TABLE OF CONTENTS Terms of Agreement The Property Permitted Uses Utilities Repairs and Maintenance Improvements; Alterations Mechanics' Liens; Stop Notices Taxes Indemnifications and Insurance Termination Hazardous Materials Assignment; Third Party Use of Property Defaults by Arts or by City; Remedies Abandonment Damage or Destruction Eminent Domain Sale or Mortgage by City City's Right of Access Notices Non -Discrimination Records, Accounts, and Audits Administrative Provisions PAGE 2 2 3 5 6 6 7 8 8 11 12 14 14 15 15 16 16 16 17 18 18 18 MAINTENANCE AND OPERATING AGREEMENT BY AND BETWEEN THE CITY OF NATIONAL CITY AND A REASON TO SURVIVE This Maintenance and Operating Agreement (the "Agreement") is entered into as of December 5, 2015, by and between the CITY OF NATIONAL CITY, a municipal corporation (the "CITY"), and A REASON TO SURVIVE ("ARTS"), a California non-profit corporation. RECITALS A. WHEREAS, the CITY owns the improved real property commonly known as 200 East 12th Street, National City, California (the "Property"). The improvements on the Property are sometimes referred to as the "Arts Center" building. A description of the Property is attached hereto as Exhibit "A" and Exhibit `B", incorporated herein by reference. B. WHEREAS Article 11, Section 7 of the California Constitution empowers the City to provide for the health and welfare of its residents. C. WHEREAS, the CITY desires to enter into a Maintenance and Operating Agreement due to the special services to be performed under this Agreement for the City and to facilitate a more collaborative relationship between the CITY and the operator of the Premises. D. WHEREAS, one of the goals of the CITY's General Plan is to develop a cultural arts program that encourages and facilitates the development of art in public spaces and promotes greater public awareness of architectural, urban design, and cultural heritage of the CITY. E. WHEREAS, the CITY desires the services of an organization to maintain and operate the Property in a manner beneficial to the public. F. WHEREAS, ARTS has been a catalyst in delivering arts, culture and education programs and projects in National City, and has created a movement behind the importance of the arts as a prevention and intervention vehicle to create positive transformation in children and youth facing adversity. G. WHEREAS, the CITY has further determined that ARTS is skilled in creating Public Art (defined below), including capital art projects, which beautifies the community, and is capable of lifting the spirits of residents and visitors to National City. H. WHEREAS, the CITY wishes to have ARTS maintain and operate the Property as an arts center for the community's benefit, and ARTS is willing to operate and maintain the Property for such a purpose. Page 1 of 20 City of National City and Maintenance and Operating Agreement , 2018 A Reason to Survive (ARTS) I. WHEREAS, the benefits of ARTS' continued work in National City, as explained in these Recitals, justifies ARTS' options to pay the Unpaid Rent (defined below) as provided in this Agreement. NOW, THEREFORE, in consideration of the foregoing facts, and in consideration of the promises and covenants hereinafter set forth, the parties agree as follows: ARTICLE 1 TERM OF AGREEMENT 1.1 Term. The term of this Agreement shall be thirty-six (36) months, commencing January 1, 2018 (the "Commencement Date") and expiring on December 31, 2021. 1.2 Option to Extend Term. If ARTS is not in default of any provision of this Agreement upon the expiration of the term described in Article 1.1, the City Manager or designee may extend the term for up to two (2) additional sixty (60) month periods. The initial thirty-six month term, and any extension pursuant to this Article 1.2, shall collectively be referred to hereafter as the "Term." ARTICLE 2 THE PROPERTY 2.1 License for Use of Property. For the purpose of operating the public arts center for the benefit of the residents and visitors of National City, the CITY grants ARTS a revocable license to enter and operate the Property, subject to the covenants and conditions hereinafter set forth, as of the Commencement Date. 2.1.1 Parking. ARTS shall neither have reserved parking nor exclusive on -site parking spaces. The CITY will maintain control of the public parking lot adjacent to the ARTS building. 2.2 Ownership of Personal Property and Improvements. The rights and obligations of the parties regarding the ownership of personal property and improvements on the Property shall be as follows: 2.2.1 Ownership of Personal Property. All improvements existing on the Property (Improvements), together with all fixtures permanently attached to the Property (Fixtures), as of the Commencement Date shall remain the property of the CITY during the Term. ARTS shall not remove any Improvements or Fixtures from the Property and shall also not waste, destroy, or modify any Improvements or Fixtures on the Property, except as permitted by this Agreement. 2.2.2 Ownership of Improvements and Equipment. All improvements made to the property by ARTS shall become the property of the CITY. Maintenance and Operating Agreement Page 2 of 20 City of National City and , 2018 A Reason to Survive (ARTS) ARTICLE 3 PERMITTED USE 3.1 Purpose. It is the intention of the parties that operation of the Property by ARTS will encourage and foster arts education programming, creative youth development, project - based learning, and support services for the students and families at the ARTS Center Building, as well as the creation of public art projects in the community. 3.2 Projects and Programs. In exchange for its use of the Property, ARTS shall provide capital projects and programming services ("Projects") within National City's jurisdictional boundaries during the Term. Such Projects shall serve as consideration for the use of the Property and shall include: (a) capital improvements to the ARTS Center building; (b) the performance of works of authorship as described in Civil Code Articles 980-989 and in Articles 106A and Section113(d) of Title 17 of the United States Code (hereafter "Public Art"), throughout the community utilizing various media; (c) community event banners; (d) public gateway improvements, that may include aspects of Public Art; and (e) landscape, streetscape, and park improvements. The obligations described in this Article 3.2 are in addition to all other Property maintenance obligations more specifically described herein. 3.2.1. Value of Projects and Programs. The annual value of the Projects and Programs shall total at least one hundred twenty-five thousand dollars ($125,000.00). Of this $125,000, ARTS must obtain at least $25,000 for the Projects through fundraising. 3.2.2. Method of Determining Value of Projects and Programs. The value of all Projects shall be determined according to (a) the dollar value of each Project, as represented by a separate written agreement approved by the City Manager, or designee, or (b) copies of invoices, receipts, or bills demonstrating the dollar value of materials purchased for a Project. ARTS must promptly make all invoices, receipts, or bills demonstrating the dollar value of materials purchased for a Project available to the City Manager, or designee, upon written request. 3.2.2. Pre -Existing Balance. ARTS expressly acknowledges that, before the Term of this Agreement commenced, ARTS owed the CITY $112,500 in unpaid rent under the July 1, 2015 Lease Agreement ("Unpaid Rent"). The Unpaid Rent represents monthly rent accrued between October 1, 2015 and December 31, 2017. ARTS must either: pay the Unpaid Rent in one lump sum, or provide Projects to the CITY whose collective cost of completion equals the Unpaid Rent. No fundraising minimums will apply to ARTS' payment of the Unpaid Rent. If ARTS chooses to pay the Unpaid Rent pursuant to Article 3.2.2., ARTS must separately track and invoice the value of those Projects that will apply to pay off the $112,500 from other Projects intended to satisfy Article 3.2.1. Maintenance and Operating Agreement Page 3 of 20 City of National City and , 2018 A Reason to Survive (ARTS) 3.2.3 Waiver of Artistic Rights. Consistent with Article 9.2, ARTS expressly waives and disclaims any residual rights in the Projects granted to ARTS by state or federal law, including Civil Code Articles 980 through 989 relating to intellectual property and artistic works, and 17 United States Code Section106A and Section113(d) relating to artists rights. 3.3 Hours of Operation. ARTS will open the Property to the public Monday through Friday from 9:00 a.m. to 5:00 p.m. 3.4 Service Fees. ARTS shall not provide any programs and services for profit. However, ARTS may charge user fees for classes and programs offered to school groups and the community to offset costs incurred by ARTS in its maintenance and operation of the Property. Any fees charged under this Article 3.4 must be approved by the City Manager or designee. There will be no fee for the public to gain access to the Property during those hours of operation listed in this Article 3. 3.5 Reporting by ARTS. ARTS shall provide quarterly reports to the City Manager, or designee, that provide Statistical Information (defined below) for the immediately preceding quarter. Each quarterly report shall contain, at a minimum, the total number of: (a) National City residents who participated in ARTS' Projects; (b) participants and volunteers who participated in ARTS' Projects; (c) events and programs coordinated; (d) and capital projects completed. The quarterly reports shall also include reports on ARTS' operating and maintenance plans, long-term and short-term goals, and any other pertinent statistics. The information required to appear in the quarterly reports by this Article 3.5 will be referred to as "Statistical Information." Each quarterly report will include all previous quarters' Statistical Information, if any. ARTS will deliver the quarterly report to the CITY at a mutually agreeable date and time. 3.6 Annual Budget. ARTS shall provide the CITY Manager, or designee, with a courtesy copy of the proposed budget for ARTS' estimated maintenance and operating expenses for the Property by July 1st of each year during the Term. ARTS shall provide to the City Manager, or designee, an audited financial report and tax return, forty-five (45) days following June 30 of each year during the Term. 3.7 Volunteer Management. ARTS may utilize volunteers to operate the Property, and in providing the Projects required by this Agreement. ARTS is responsible for recruiting, training, and managing all volunteers on the Property. Volunteers are considered the responsibility of ARTS for the purpose of workers compensation or general liability. 3.8 Alcohol Use. ARTS, or third parties with permission from ARTS, may, hold events on the Property where alcoholic beverages are served. Alcoholic beverages shall be served subject to the following requirements: • Alcohol will not be served during youth programming under any circumstances. • Alcohol will be served in limited areas of the Property, designated by ARTS in advance, and approved by the City Manager or designee. Maintenance and Operating Agreement Page 4 of 20 City of National City and , 2018 A Reason to Survive (ARTS) • Alcoholic beverages must be served by a licensed bartender, with a copy of the bartender's license on the Property. • The event host must obtain approval from the state Department of Alcoholic Beverage Control to serve alcohol. • The event host is responsible for all guest behavior during and following the service of alcohol. • "Last call" for service of alcohol shall be at least thirty (30) minutes prior to the scheduled end of the event. When third parties (with permission from ARTS) serve alcoholic beverages, the following additional requirements shall apply: • The third party shall provide the CITY proof of liability insurance acceptable to the City's Risk Manager. • The third party shall provide two licensed security guard for every 100 guests registered to attend the event. • ARTS shall reserve the authority to immediately terminate an event if ARTS determines, in its sole discretion, the third party has not complied with any requirement of this Article 3.8. • ARTS shall provide the CITY a copy of their third party rental agreement template for approval. 3.9 Consideration. ARTS payment of $1.00 to the CITY, in addition to ARTS' provision of "Projects" under Article 3.2 and the mutual benefit to be derived from ARTS' performance under the remainder of this Agreement, shall serve as the sole consideration due the CITY for ARTS' license to use and operate the Premises. 3.10 Compliance with Laws. ARTS, at its sole expense, shall procure, maintain, and hold available for the CITY's inspection any governmental license or permit required for the proper and lawful conduct of ARTS' operation of the Property. ARTS shall not use the Property for any use or purpose in violation of the laws of the United States of America, or the laws, ordinances, regulations, orders, or requirements of the State of California, the County of San Diego, the CITY, or of other lawful authorities. ARTS shall, at its sole expense, comply with all applicable statutes, laws, ordinances, rules, regulations, orders, covenants and restrictions of record, and requirements in effect during the Term (Laws or Orders), regulating the use by ARTS of the Property. ARTICLE 4 UTILITIES 4.1 Utility Services. The CITY shall be responsible for maintaining reasonable utility services to the Property. The CITY shall pay for Twenty Thousand and no/100 Dollars ($20,000) worth of electricity and reasonable water usage at the Premises. ARTS shall pay for all costs of electricity that exceeds the sum listed in this Section 4.1. If the CITY Maintenance and Operating Agreement Page 5 of 20 City of National City and , 2018 A Reason to Survive (ARTS) determines, in its sole discretion, that ARTS is negligent in its use of the utilities, including water usage, the CITY may hold a good faith meet and confer meeting with ARTS to discuss its utilities usage. ARTICLE 5 REPAIRS AND MAINTENANCE 5.1 ARTS' Repair and Maintenance Obligations. ARTS acknowledges that it has made a thorough inspection of the Property and that it accepts the Property "as -is" as of the Commencement Date. At ARTS' own cost and expense, ARTS shall repair, replace, and maintain the Property in good, tenable condition as necessary. ARTS shall not be obligated to repair or replace damage to the Property caused by ordinary wear and tear. ARTS shall maintain the Property in an accessible manner for use by individuals with disabilities and comply with federal and state law regarding accessibility, including but not limited to the Americans with Disabilities Act and California's Disabled Persons Act. Other than repair work in emergency situations not exceeding Three Thousand and no/100 Dollars ($3,000), ARTS shall not perform any repair work without the CITY's prior written consent. As used in this Article 5.1, "emergency" means a sudden, unexpected occurrence that poses a clear and imminent danger, requiring immediate action to prevent or mitigate the loss or impairment of life, health, property, or essential public services. All emergency repairs performed by the City on the Property are governed by Public Contract Code Section 22050. ARTS' obligations under this Article shall apply regardless of whether the repairs, restorations, and replacements are ordinary or extraordinary, foreseeable or unforeseeable, capital or noncapital, the fault or not the fault of ARTS, its agents, employees, volunteers, invitees, visitors, or contractors. All replacements made by the ARTS shall be of like size, kind, and quality to the items replaced. 5.2 CITY Repair and Maintenance Obligations. For any repair and maintenance work exceeding Three Thousand and no/100 Dollars ($3,000), the CITY will consider the nature and priority of the work and available funding to determine if and when such repairs will be completed. 5.3 CITY Right to Inspect; CITY Not Obligated to Repair or Maintain. ARTS shall permit the CITY to enter the Property at all times during usual hours of operation to inspect the Property. Any entry pursuant to this Article 5.3 shall not unreasonably interfere with ARTS' operation of the Property. However, nothing contained in this Article 5 shall create any duty on the part of the CITY to do any work which, under any provision of this Agreement, ARTS may be required to do. ARTICLE 6 IMPROVEMENTS; ALTERATIONS 6.1 Alterations. ARTS may alter, replace, add to, change, or construct additional improvements to the Property (collectively, "Alterations") as ARTS may find necessary or convenient for its operation of the Property. Any Alterations performed by ARTS Maintenance and Operating Agreement Page 6 of 20 City of National City and , 2018 A Reason to Survive (ARTS) under this Article 6.1 shall be performed: (a) at ARTS' sole cost and expense; (b) with the CITY's prior written consent; and (c) in accordance with construction plans submitted to and approved by the CITY. 6.2 Construction Permits and Licenses. At all times during the Term, ARTS shall procure, at its sole cost and expense, all permits and licenses that are necessary or required from any local governmental agency for the proposed construction of any Alterations. The CITY may, in its sole discretion, waive CITY permitting fees where applicable. 6.3 Proposed Plans. In its sole discretion, the CITY may require ARTS to do any of the following: • Submit a complete set of proposed plans of any Alterations to the CITY; • Apply for and receive a permit from the Building Department to complete any Alterations; • Within sixty (60) days of a written request, furnish the CITY with a complete set of "as -built" plans for any CITY -approved Alterations. 6.4 Prevailing Wages. ARTS shall comply with prevailing wage statutes for any work not performed by volunteers. ARTICLE 7 MECHANICS' LIENS; STOP NOTICES 7.1 Mechanics' Liens; Stop Notices. ARTS shall pay, or cause to be paid, the total cost and expense of all works of improvement, as that phrase is defined in the Mechanics Lien Law in effect at time and place of construction, done by it, or caused to be done by it, on the Property, and for all materials furnished for or in connection with any such work. If any lien or stop notice is filed against the Property, ARTS shall cause the lien or stop notice to be discharged of record within one hundred eighty (180) days after it is filed. ARTS shall indemnify, defend, and hold the CITY harmless from any and all liability, loss, damage, costs, attorneys' fees, and all other expenses on account of claims of lien of laborers, materialmen, or others for work performed, or materials or supplies furnished for ARTS or persons claiming under ARTS. 7.2 Notice of Lien or Stop Notice. Should any claim of lien or stop notice related to ARTS' work of improvement of the Property be filed against the Property, or any action be filed against the Property, or any action affecting the title to the Property be commenced, the party receiving notice of such lien or stop notice or action shall immediately give the other party written notice thereof. 7.3 Notice of Non -Responsibility. The CITY or its representatives shall have the right to post and keep posted on the Property notices of non -responsibility or such other notices which the CITY may deem to be proper for the protection of the CITY's interest in the Maintenance and Operating Agreement Page 7 of 20 City of National City and , 2018 A Reason to Survive (ARTS) Property. ARTS shall, before the commencement of any work which might result in any such lien or stop notice, give to the CITY written notice of its intention to do so with sufficient time to enable posting of such notices. ARTICLE 8 TAXES 8.1 Definition. "Taxes" shall mean all taxes, governmental bonds, special assessments, charges, or transfer taxes, license and transaction fees, including, but not limited to, (a) any state, local, federal income tax, or any real or personal property tax, (b) increases in taxes attributable to ARTS' operation of the Property, or (c) any taxes which are essentially payments to a governmental agency, other than the CITY, for the right to make improvements to the Property. 8.2 Possessory Interest. Notwithstanding Article 2.1, ARTS acknowledges that this Agreement may create a possessory interest subject to property taxation and that ARTS may be subject to the payment of taxes levied on such interest. ARTS shall pay, before delinquency, all taxes, assessments, and fees assessed or levied upon the Property. 8.3 Responsibility for Payment of Taxes. The CITY shall not be obligated to pay any Taxes accruing against any interest in ARTS' use of the Property at any time before or during the Term. ARTS shall pay any Taxes that accrue against any interest in ARTS' use of the Property. Additionally, ARTS shall pay any Taxes levied upon any Improvements, Fixtures, or Personal Property located on the Property to the extent such Taxes result from ARTS' operations or other activities held upon, or in connection with, the Property. ARTICLE 9 INDEMNIFICATION AND INSURANCE 9.1 ARTS Indemnity. The CITY shall not be liable for, and ARTS shall defend, indemnify, and hold harmless the CITY, its officers, officials, agents, employees, and volunteers from any and all claims, costs, liability, loss, damages to property, injuries to, or death of any person or persons, and all claims, demands, suits, actions, proceedings, reasonable attorneys' fees, and defense costs, of any kind or nature, including workers' compensation claims resulting from, related to, or arising out of ARTS' improvement, operation or use of the Property, or arising either directly or indirectly from any act, error, omission, or negligence of ARTS or its contractors, licensees, invitees, members, agents, servants or employees; provided, however, that this indemnification and hold harmless shall not include any claims or liability arising from the established sole negligence or willful misconduct of the City, its agents, officers, officials, employees, or volunteers. CITY will cooperate reasonably in the defense of any action, and ARTS shall employ competent counsel, reasonably acceptable to the CITY'S City Attorney. The indemnity, defense, and hold harmless obligations contained herein shall survive the termination of this Agreement for any alleged or actual omission, act, or negligence under this Agreement that occurred during the term of this Agreement. Maintenance and Operating Agreement Page 8 of 20 City of National City and , 2018 A Reason to Survive (ARTS) 9.1.1 Third Party Indemnity. ARTS shall not invite third party organizations onto the Property until said third party organization furnishes CITY a written agreement in which it indemnifies and holds CITY harmless, upon terms satisfactory to CITY. 9.1.2 Waivers from Third Parties. ARTS agrees to obtain from all guests, invitees, or third party organizations whose participants visit the Property, a waiver of liability and hold harmless agreement upon terms satisfactory to the CITY. 9.2 Ownership Rights and Licenses to Artwork; Waiver. Through its provision of Projects to the CITY, ARTS makes an unconditional donation, in perpetuity, of all Public Art to the CITY. ARTS acknowledges that the CITY is authorized to accept donations of Public Art pursuant to Sections 37354 and 37355 of the Government Code. Before beginning each Project that contains Public Art, ARTS and all individuals participating in the Project must sign a CITY -approved waiver that expressly waives and disclaims any and all rights they each may have under the California Art Preservation Act, as set forth in Civil Code Section 980-989, and any rights under the Visual Artists Rights Act, as set forth at 17 U.S.C. Section106A and Section 113(d) to any Public Art created pursuant to this Agreement. ARTS, and all participants who create Public Art, shall not attempt to defeat Sections 3.2.3 and 9.2 by cooperating with any organization which seeks to bring an action under Civil Code Article 989 or any other applicable provision of law. 9.2.1. Ownership of Materials. Ownership of all materials and concepts produced for the CITY under this Agreement, including but not limited to completed Projects, and all rights to licensing and reproductions of Public Art, shall pass to and become the property of the CITY once the CITY accepts the completed Project. The CITY, at its option, will store all drawings and materials that may assist with future repairs. 9.2.2. Assignment of Rights. ARTS hereby assigns to the CITY all rights to produce, give, sell, and distribute still or motion images and models or other likeness of any kind of Public Art but shall exercise no rights thereto inconsistent with any provision of this Article 9.2. Any Memoranda, Reports, Maps, Drawings, Renderings, Photos, Plans, Specifications, and other documents prepared by ARTS for any Projects, whether paper or electronic, shall become the property of the CITY for use with respect to the specific Project provided to the CITY, and shall be turned over to the CITY upon completion of the Project, or any phase thereof, as contemplated by this Agreement. 9.2.3. Survival. The provisions of this Article 9.2 shall survive the termination of this Agreement. 9.3 Insurance. ARTS, at its sole cost and expense, shall purchase and maintain, and shall require its subcontractors, and third party organizations ARTS invites onto the Property, to purchase and maintain throughout the term of this Agreement, the following insurance policies: Maintenance and Operating Agreement Page 9 of 20 City of National City and , 2018 A Reason to Survive (ARTS) 9.3.1 Commercial General Liability Insurance (CGL): Insurance Services Office Form CG 00 01 covering CGL on an "occurrence" basis, including products and completed operations, property damage, bodily injury and personal and advertising injury with minimum limits of $2,000,000 per occurrence and $4,000,000 aggregate, covering all bodily injury and property damage arising out of its operations under this Agreement. The policy shall name the CITY and its. officers, agents, employees, and volunteers as additional insureds, and a separate additional insured endorsement shall be provided. The general aggregate limit must apply solely to this "project" or "location." The Commercial General Liability required by this Section must include Sexual Misconduct Liability coverage. 9.3.2 Automobile Insurance covering all bodily injury and property damage incurred during the performance of this Agreement, with a minimum coverage of $1,000,000 combined single limit per accident. Such automobile insurance shall include owned, non -owned, and hired vehicles ("Any Auto"). The policy shall name the CITY and its officers, agents, employees, and volunteers as additional insureds, and a separate additional insured endorsement shall be provided. 9.3.3 Workers' Compensation Insurance in an amount sufficient to meet statutory requirements covering all of ARTS' employees, and employers' liability insurance with limits of at least $1,000,000 per accident. In addition, the policy shall be endorsed with a waiver of subrogation in favor of the City. Said endorsement shall be provided prior to commencement of work under this Agreement. 9.3.4 Property insurance against all risks of loss to any improvements or betterments made by ARTS, or any third party with permission from ARTS, at full replacement cost with no coinsurance penalty provision. 9.3.5 The aforesaid policies shall constitute primary insurance, at least as broad as ISO CG 20 01 04 13, as to the CITY, its officers, employees, and volunteers, so that any other policies held by the CITY shall not contribute to any loss under said insurance. Said policies shall provide for thirty (30) days prior written notice to the CITY's Risk Manager, at the address listed in Article 9.3.7 below, of cancellation or material change. 9.3.6 If required insurance coverage is provided on a "claims made" rather than "occurrence" form, ARTS shall maintain such insurance coverage for three years after expiration of the term (and any extensions) of this Agreement. In addition, the "retro" date must be on or before the date of this Agreement. 9.3.7 The Certificate Holder for all policies of insurance required by this Article 9.3 shall be: Maintenance and Operating Agreement Page 10 of 20 City of National City and , 2018 A Reason to Survive (ARTS) City of National City c/o Risk Manager 1243 National City Boulevard National City, CA 91950-4397 9.3.8 Insurance shall be written with only insurers authorized to conduct business in California that hold a current policy holder's alphabetic and financial size category rating of not less than A VIII according to the current Best's Key Rating Guide, or a company of equal financial stability that is approved by the CITY'S Risk Manager. In the event coverage is provided by non -admitted "surplus lines" carriers, they must be included on the most recent California List of Eligible Surplus Lines Insurers (LESLI list) and otherwise meet rating requirements. 9.3.9 This Agreement shall not take effect until certificate(s) or other sufficient proof that these insurance provisions have been complied with, are filed with and approved by the CITY'S Risk Manager. If ARTS does not keep all of such insurance policies in full force and effect at all times during the terms of this Agreement, the CITY may elect to treat the failure to maintain the requisite insurance as a breach of this Agreement and terminate the Agreement as provided herein. 9.3.10 All deductibles and self -insured retentions in excess of $10,000 must be disclosed to and approved by the CITY. CITY reserves the right to modify the insurance requirements of this Article 9.3, including limits, based on the nature of the risk, prior experience, insurer, coverage, or other special circumstances. 9.3.11 If ARTS maintains broader coverage or higher limits (or both) than the minimum limits shown above, the CITY requires and shall be entitled to the broader coverage or higher limits (or both) maintained by ARTS. Any available insurance proceeds in excess of the specified minimum limits of insurance and coverage shall be available to the CITY. ARTICLE 10 TERMINATION 10.1 This Agreement may be terminated with or without cause by the CITY. Termination without cause shall be effective only upon 60-day's written notice to ARTS. During said 60-day period, ARTS shall perform all services in accordance with this Agreement. This Agreement may also be terminated immediately by the CITY for cause in the event of a material breach of this Agreement, misrepresentation by ARTS in connection with the formation of this Agreement or the performance of services, or the failure to perform services as directed by the CITY. Termination with or without cause shall be effected by delivery of written Notice of Termination to ARTS as provided for herein. The CITY further reserves the right to immediately terminate this Agreement upon: (a) the filing of a petition in bankruptcy affecting ARTS; (b) a reorganization of ARTS for the benefit of creditors; or (c) a business reorganization, change in business name or change in business status of ARTS. Maintenance and Operating Agreement Page 1 1 of 20 City of National City and , 2018 A Reason to Survive (ARTS) ARTICLE 11 HAZARDOUS MATERIALS Hazardous Materials Laws -Definition. As used in this Article, the term "Hazardous Materials' Laws" means any and all federal, state or local laws or ordinances, rules, decrees, orders, regulations or court decisions (including the so-called "common law") relating to hazardous substances, hazardous materials, hazardous waste, toxic substances, environmental conditions on, under, or about the Property, soil and ground water conditions, or other similar substances or conditions. The following legal authority is a non -exhaustive list of the legal authority that applies to the definition of the term "Hazardous Materials Laws": • the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended (42 U.S.C., Section 9601 et seq.) • the Hazardous Materials Transportation Act, as amended (49 U.S.C., Section 1801 et seq.), and • the Resource Conservation and Recovery Act of 1976, as amended (42 U.S.C., Section 6901 et seq.) 11.2 Hazardous Materials - Definition. As used in this Article the term "Hazardous Materials" means any chemical, compound, material, substance or other matter that: 11.2.1 is a flammable, explosive, asbestos, radioactive nuclear medicine, vaccine, bacteria, virus, hazardous waste, toxic, overtly injurious or potentially injurious material, whether injurious or potentially injurious by itself or in combination with other materials; 11.2.2 is controlled, referred to, designated in or governed by any Hazardous Materials Laws; 11.2.3 gives rise to any reporting, notice or publication requirements under any Hazardous Materials Laws, or; 11.2.4 is any other material or substance giving rise to any liability, responsibility or duty upon the CITY or the ARTS with respect to any third person under any Hazardous Materials Law. 11.3 ARTS Representations and Warranties. ARTS represents and warrants that, during the Term or any extension thereof, ARTS shall comply with the following provisions of this Article unless otherwise specifically approved in writing by the CITY, subject to the terms and conditions of the ARTS' maintenance obligations provided elsewhere in this Agreement: Maintenance and Operating Agreement Page 12 of 20 City of National City and , 2018 A Reason to Survive (ARTS) 11.3.1 ARTS shall not cause or permit any Hazardous Materials to be brought, kept or used in or about the Property by ARTS, its agents, employees, assigns, contractors or invitees, except as required by ARTS' permitted use of the Property in the normal course of operations; 11.3.2 Any handling, transportation, storage, treatment, or usage by ARTS of Hazardous Materials that is to occur on the Property following the Commencement Date shall be in compliance with all applicable Hazardous Materials Laws; 11.3.3 Any leaks, spills, release, discharge, emission or disposal of Hazardous Materials which may occur on the Property following the Commencement Date shall be promptly and thoroughly cleaned and removed from the Property by ARTS at its sole expense, and any such discharge shall be promptly reported in writing to the CITY, and to any other appropriate governmental regulatory authorities; 11.3.4 No friable asbestos shall be constructed, placed on, deposited, stored, disposed of, or located by ARTS on the Property; 11.3.5 No underground improvements, including but not limited to treatment or storage tanks, or water, gas or oil wells shall be located by ARTS on the Property without the CITY's prior written consent; 11.3.6 ARTS shall promptly supply the CITY with copies of all notices, reports, correspondence, and submissions made by ARTS to the United States Environmental Protection Agency, the United Occupational Safety and Health Administration, and any other local, state or federal authority which requires submission of any information concerning environmental matters or hazardous wastes or substances pursuant to applicable Hazardous Materials' Laws; and 11.3.7 ARTS shall promptly notify the CITY of any liens threatened or attached against the Property pursuant to any Hazardous Materials' Law. If such a lien is filed against the Property, then, within the earlier of (i) twenty (20) days following such filing, or (ii) before any governmental authority commences proceedings to sell the Property pursuant to the lien, ARTS shall either: (a) pay the claim and remove the lien from the Property, or (b) furnish either: (1) a bond or cash deposit reasonably satisfactory to the CITY in an amount not less than the claim from which the lien arises, or; (2) other security satisfactory to the CITY in an amount not less than that which is sufficient to discharge the claim from which the lien arises. Maintenance and Operating Agreement Page 13 of 20 City of National City and , 2018 A Reason to Survive (ARTS) 11.3.8 At the end of this Agreement, ARTS shall surrender the Property to the CITY free of any and all Hazardous Materials and in compliance with all Hazardous Materials' Laws affecting the Property. ARTICLE 12 ASSIGNMENT; THIRD PARTY USE OF PROPERTY 12.1 Assignment; CITY's Consent Required. ARTS shall not voluntarily or involuntarily assign or otherwise transfer all or any portion of its rights and duties under this Agreement without the CITY's prior written consent. Any attempted assignment or transfer without the CITY's prior written consent shall be void. 12.2 Third Party Use of the Property. ARTS may engage third party organizations to provide special services or programming at the Property if: 12.2.1 The CITY consents, in writing, to the third party organizations' proposed use of the Property and; 12.2.2 The third party organization obtains policies of insurance acceptable to the City's Risk Manager and Article 9.3 of this Agreement. ARTICLE 13 DEFAULTS BY ARTS OR BY CITY; REMEDIES 13.1 Events of Default; Remedies. The following sub -articles shall apply if either ARTS or the CITY neglects, fails to perform, or fails to observe any of their respective obligations under the terms, covenants, or conditions contained in this Agreement ("Default"): 13.1.1 Thirty -Day Correction of Default. If either ARTS or the CITY determines that the other party is in Default, then the non -defaulting party must provide the defaulting party written notice of the Default and thirty (30) days to correct the Default. 13.1.2 Extended Correction of Default. If the defaulting party determines that more than thirty (30) days is required to correct the Default, the defaulting party must provide the other party written notice of the reasons why additional time is required to correct such Default. The defaulting party must use diligent efforts to correct a Default under this Article 13.1.2 and, in any case, must correct such Default within ninety (90) days from the date of the written notice of default. 13.1.3 Remedies for Failure to Correct Default. If the defaulting party fails to comply with Article 13.1.1. or 13.1.2, then the non -defaulting party may immediately terminate this Agreement. The defaulting party shall be liable to the non -defaulting party for any and all damages sustained by the non -defaulting party as a result of the defaulting parties' breach. Maintenance and Operating Agreement Page 14 of 20 City of National City and , 2018 A Reason to Survive (ARTS) ARTICLE 14 ABANDONMENT 14.1 Abandonment. ARTS shall not vacate or abandon the Property at any time during the Term nor permit the Property to remain unoccupied for a period of longer than five (5) consecutive days during the term of this Agreement. These provisions shall not apply if the Property is closed and operation is temporarily discontinued therein on account of strikes, lockouts, acts of nature, or similar causes beyond the reasonable control of ARTS. Any exceptions must be submitted in writing to the City Manager or designee for approval. ARTICLE 15 DAMAGE OR DESTRUCTION 15.1 ARTS' Duty to Repair Casualty. ARTS shall, as expeditiously as reasonably possible, repair any damages to the Property caused by fire, earthquake, or any other identifiable event of a sudden, unexpected, or unusual nature ("Casualty"), and repair, restore, and replace any such damaged or destroyed Fixtures, Improvements or Personal Property ("Casualty Repairs"). Any Casualty Repairs made under this Article 15 are: (a) To be performed at ARTS' sole cost and expense; (b) To be performed except as otherwise provided in this Article 15; and are (c) Subject to all other terms and conditions of this Agreement. 15.2 Construction Provisions. In the event of any reconstruction of the Property, Fixtures or Improvements required of ARTS pursuant to this Article, ARTS shall repair the Property, and repair or rebuild such Fixtures and Improvements, to substantially the same condition they were in immediately preceding such Casualty. 15.3 No Abatement. In the event of reconstruction, replacement, or repair by ARTS pursuant to this Article, ARTS shall continue its operations on the Property during any such period to the extent reasonably practicable from the standpoint of prudent business management, and in continuing compliance with applicable laws and regulations. ARTS shall not be entitled to any compensation or damages from CITY for: (a) loss of use of the whole or any part of the Property; (b) ARTS' Personal Property; or (c) any inconvenience or annoyance occasioned by such damage, reconstruction, or replacement. 15.4 Major Destruction. Notwithstanding any of the foregoing provisions of this Article to the contrary, if, at any time after the Commencement Date, (a) the Improvements are damaged or destroyed to the extent of more than twenty-five percent (25%) of their replacement cost, or (b) the damage is such that the Improvements cannot be repaired and restored within one hundred and eighty (180) days after the Casualty, then ARTS shall have the right to terminate this Agreement upon thirty (30) days' prior written notice to the CITY. Maintenance and Operating Agreement Page 15 of 20 City of National City and , 2018 A Reason to Survive (ARTS) ARTICLE 16 EMINENT DOMAIN 16.1 Condemnation. ARTS may terminate this Agreement within twenty (20) days after the date that a condemning authority (by a party other than the CITY) takes possession of the Property by delivery of written notice of such condemnation if: (a) If all of the Property is taken under eminent domain proceedings; or (b) less than all of the Property is taken under such eminent domain proceeding and the part taken substantially impairs the ability of ARTS to use the remainder of the Property for the purposes permitted by this Agreement. In the absence of such written notice from a condemning authority, ARTS may terminate this Agreement within twenty (20) days after the condemning authority shall have taken possession. 16.2 Continuation of Operating Agreement after Condemnation. If this Agreement is not terminated by ARTS, it shall remain in full force and effect as to any portion of the Property remaining, and this Agreement will end as of the date possession of the part taken by the public entity as to the part of the Property that is taken. 16.3 Award. All monies awarded in any condemnation shall belong to the CITY. The CITY shall have no liability to ARTS for any award not provided by the condemning authority. ARTICLE 17 SALE OR MORTGAGE BY CITY 17.1 Sale or Mortgage. The CITY may, pursuant to existing and subsequently enacted CITY ordinances and State laws, at any time, and without the consent of ARTS, vacate, sell, purchase, exchange, transfer, assign, lease, encumber or convey the CITY's interest in whole or in part, in the Property (collectively referred to in this Article as a "Sale"). The CITY shall provide to ARTS written notice of the CITY's intent to a Sale or discontinuance pursuant to this Article at least ninety (90) days prior to said proposed transfer. 17.2 Release on Sale. From and after a Sale or discontinuance of the CITY's entire interest in the Property, the CITY shall be released from all liability to ARTS and ARTS successors and assigns arising from this Agreement because of any act, occurrence, or omission of the CITY occurring after such Sale. ARTICLE 18 CITY'S RIGHT OF ACCESS 18.1 Right of Entry. CITY, its agents, employees, and contractors may enter the Property at any time with or without notice to ARTS to: Maintenance and Operating Agreement Page 16 of 20 City of National City and , 2018 A Reason to Survive (ARTS) (a) respond to health and safety concerns; (b) inspect the Property and Improvements; (c) determine whether ARTS is complying with its obligations in this Agreement (including its obligations with respect to compliance with Hazardous Materials Laws) (d) post notices of non -responsibility or similar notices (e) inspect the progress of construction of any improvement; or (f) make repairs that this Agreement requires or allows CITY to make, or make repairs to any adjoining space or utility services, or make repairs, alterations, or improvements to any other portion of the Property All work enumerated in this Article 18.1 must be done as promptly as reasonably possible and so as to cause as little interference to ARTS as reasonably possible. ARTICLE 19 NOTICES 19.1 Notices. Whenever in this Agreement it shall be required or permitted that notice or demand be given or served by either party to this Agreement to or on the other, such notice or demand shall be in writing, mailed or personally delivered to the other party at the addresses specified below. Mailed notices shall be sent by United States Postal Service, postage prepaid and shall be deemed to have been given, delivered, and received three (3) business days after the date such notice or other communication is posted by the United States Postal Service. All other such notices or other communications shall be deemed given, delivered, and received upon actual receipt. Either party may, by written notice delivered pursuant to this provision, at any time designate a different address to which notices shall be sent. CITY: With a copy to: ARTS: City Manager City of National City 1243 National City Boulevard National City, CA 91950-4397 Community Services Recreation Superintendent City of National City 140 East 12th Street, Suite B National City, CA 91950 A Reason to Survive, Inc. Executive Director 200 East 12th Street National City, CA 91950 Maintenance and Operating Agreement Page 17 of 20 City of National City and , 2018 A Reason to Survive (ARTS) ARTICLE 20 NON-DISCRIMINATION 20.1 Non -Discrimination. ARTS hereby covenants by and for itself, its successors, assigns and all persons claiming under or through it, that this Agreement is made and accepted upon and subject to the condition that there shall be no discrimination against, or segregation of, any person or group of persons on account of race, age, color, creed, religion, sex, sexual orientation, marital status, national origin, physical handicap, medical condition or ancestry in the use, operation, or enjoyment of the Property. ARTICLE 21 RECORDS, ACCOUNTS, AND AUDITS 21.1 ARTS' Duty to Keep Records. ARTS shall, at all times during the Term, and for a period of five (5) years following expiration or earlier termination of this Agreement, keep or cause to be kept, true and complete books, records and accounts of all (a) construction undertaken pursuant to the rights conferred on ARTS under this Agreement, and (b) financial transactions in the operation of all business activities, of whatever nature, conducted pursuant to the rights granted by this Agreement. Such records shall also include the source and disposition of all trash and other waste collected and disposed of by ARTS in the operation of its business. Said records must be supported by source documents such as receipts, invoices, sales slips, cash register tapes, purchase invoices or other pertinent documents. 21.2 CITY's Right to Audit. All ARTS books, accounts, and records shall be kept and made available at one location within the limits of the County of San Diego. The CITY shall have the right at any reasonable time to examine and perform audits of ARTS' records pertaining to (a) construction undertaken pursuant to the rights conferred on ARTS under this Agreement, and (b) its operations on the Property, including, without limitation, any records pertaining to ARTS' use of utilities on the Property. The cost of said audits shall be borne by the CITY, except that ARTS shall provide to the CITY, at ARTS' expense, necessary data to enable the CITY to fully comply with each and every requirement of the State of California or by the United States of America for information or reports relating to this Agreement and to ARTS' use of the Property. ARTICLE 22 ADMINISTRATIVE PROVISIONS 22.1 Authority. ARTS represents and warrants that it has full power and authority to execute and fully perform its obligations under this Agreement pursuant to its governing instruments, without the need for any further action, and that the person executing this Agreement on behalf of ARTS is the duly designated agent of ARTS and is authorized to do so. Maintenance and Operating Agreement Page 18 of 20 City of National City and , 2018 A Reason to Survive (ARTS) 22.2 Captions. The captions and headings appearing in this Operating Agreement are inserted for convenience only and in no way define, limit, construe, or describe the scope or intent of the provisions of this Agreement. 22.3 CITY Approval. Except where stated in this Agreement to the contrary, the phrases "CITY approval," and "CITY's written approval" or such similar phrases shall mean approval of the City Manager or designee, which approval shall not be unreasonably withheld. 22.4 Cumulative Remedies. In the event of a default under this Agreement, each party's remedies shall be limited to those remedies set forth in this Agreement. Any such remedies are cumulative and not exclusive of any other remedies under this Agreement to which the non -defaulting party may be entitled. 22.5 Entire Agreement. This Agreement, together with all addenda and exhibits attached hereto, constitutes the entire agreement between the parties with respect to the subject matter hereof, and all prior or contemporaneous agreements, understandings and representations, oral or written, are superseded. 22.6 Exhibits. All exhibits referred to herein are attached hereto and incorporated by reference: Exhibit "A": Legal description of the Property 22.7 Force Majeure. If either party is prevented or delayed from performing any act or discharging any obligation hereunder, because of any and all causes beyond either party's reasonable control, including unusual delays in deliveries, abnormally adverse weather conditions, unavoidable casualties, strikes, labor disputes, inability to obtain labor, materials or equipment, acts of God, governmental restrictions, regulations or controls, any hostile government actions, acts of terrorism, civil commotion and fire or other casualty, legal actions attacking the validity of this Agreement or the CITY or ARTS' operations of the Property, or any other casualties beyond the reasonable control of either party ("Force Majeure"), performance of such act shall be excused for the period of such delay, and the period for performance of such act shall be extended for a period equivalent to the period of such delay. Force Majeure shall not include any bankruptcy, insolvency, or other financial inability on the part of either party hereto. 22.8 Governing Law. This Agreement shall be governed, construed, and enforced in accordance with the laws of the State of California. 22.9 Independent Contractor. ARTS acknowledges that it is an independent contractor; that it alone retains control of the manner of conducting its activities in furtherance of this Agreement; and that it, as well as any persons, contractors or agents it may employ, are not employees of CITY for any purpose. 22.10 Interpretation. The provisions of this Agreement shall be liberally construed to effectuate its purpose. The language of all parts of this Agreement shall be construed simply according to its plain meaning and shall not be construed for or against either party. Maintenance and Operating Agreement Page 19 of 20 City of National City and , 2018 A Reason to Survive (ARTS) 22.11 ARTS' Agreement Administration. ARTS confirms that ARTS' Agreement Administrator has been given full operational responsibility for compliance with the terms of this Agreement. ARTS shall provide the CITY with a written schedule of its normal hours of business operation on the Property, and ARTS' Agreement Administrator, or a representative designated thereby, shall be available to the CITY during ARTS' normal business hours, to resolve problems or answer question pertaining to this Agreement and ARTS' operations on the Property. 22.12 Modification. The provisions of this Agreement may not be modified, except by a written amendment signed by both parties. 22.13 Partial Invalidity. If any provision of this Agreement is determined by a court of competent jurisdiction to be invalid or unenforceable, the remainder of this Agreement shall not be affected thereby. Each provision shall be valid and enforceable to the fullest extent permitted by law. 22.14 Successors and Assigns. This Agreement shall be binding on and inure to the benefit of the parties and their successors and assigns, except as may otherwise be provided herein. ARTS shall not assign this agreement to any other party unless approved in writing by the CITY. 22.15 Time of Essence. Time is of the essence of each and every provision of this Agreement. 22.16 Waiver. No provision of this Operating Agreement or the breach thereof shall be deemed waived, except by written consent of the party against whom the waiver is claimed. IN WITNESS WHEREOF, the CITY and ARTS have duly executed this Agreement as of the day and year first above written. CITY OF NATIONAL CITY A REASON TO SURVIVE a California non-profit corporation, d.b.a. "ARTS" By: Ron Morrison, Mayor APPROVED AS TO FORM: Angil P. Morris -Jones By: Roberto M. Contreras Deputy City Attorney Maintenance and Operating Agreement By: Fabienne Hanks, Board Chair By: Amanda Montgomery, Board Member Page 20 of 20 City of National City and , 2018 A Reason to Survive (ARTS) • < U Cli L.. RESOLUTION NO. 2017 — RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NATIONAL CITY AUTHORIZING THE MAYOR TO EXECUTE A MAINTENANCE AND OPERATING AGREEMENT BY AND BETWEEN THE CITY OF NATIONAL CITY AND A REASON TO SURVIVE (ARTS), CONSISTING OF A TERM OF 36 MONTHS WITH AN OPTION TO EXTEND THE TERM FOR UP TO TWO ADDITIONAL 60 MONTH PERIODS FOR THE CITY -OWNED LAND AND BUILDING LOCATED AT 200 EAST 12TH STREET IN NATIONAL CITY WHEREAS, as part of the General Plan, the City's goal is to develop a cultural arts program to encourage and facilitate the development of art in public spaces and promote greater public awareness of architectural, urban design, and cultural heritage of the City; and WHEREAS, A Reason to Survive ("ARTS") has been a catalyst in establishing an arts, culture, and education district in the National City downtown area, and is dedicated to creating a movement to educate the public on the importance of the arts as a prevention and intervention vehicle to create positive transformation in children and youth facing adversity; and WHEREAS, the City owns the improved real property commonly known as 200 East 12th Street, National City (the "Property"); and WHEREAS, the improvements on the Property are sometimes referred to as the "Arts Center" building; and WHEREAS, the City desires the services of an organization to maintain and operate the Property in a manner beneficial to the culture and educational enrichment of the general public; and WHEREAS, the City has further determined that ARTS is skilled in creating public art, including capital art projects, that beautifies the community, and is capable of lifting the spirits of residents and visitors to National City ; and WHEREAS, ARTS and the City desire to enter into a Maintenance and Operating Agreement ("Agreement") for the Property with a term of thirty-six (36) months with an option to extend the term for up to two (2) sixty (60) month periods for ARTS to provide arts, culture, and education at the property located at 200 East 12th Street; and WHEREAS, ARTS will pay one dollar ($1) and deliver projects and programs in an annual value of $125,000 in consideration of the Agreement; and WHEREAS, as of December 31, 2017, ARTS will owe a balance of $112,500 in unpaid rent ("Unpaid Rent"); and WHEREAS, the Unpaid Rent will be paid off by the additional delivery of $112,500 in Projects and Programs during the initial thirty-six (36) month term; and NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of National City authorizes the Mayor to execute a Maintenance and Operating Agreement by and between the City and A Reason to Survive (ARTS), consisting of a term of 36 months with an option to extend the term for up to two additional 60 month periods for the City -owned land and building located at 200 East 12th Street in National City. Said Maintenance and Operating Agreement is on file in the office of the City Clerk. Resolution No. 2017 — Page Two PASSED and ADOPTED this 5th day of December, 2017. Ron Morrison, Mayor ATTEST: Michael R. Dalla, City Clerk APPROVED AS TO FORM: Angil P. Morris -Jones City Attorney CITY OF NATIONAL CITY Office of the City Clerk 1243 National City Blvd., National City, California 91950-4397 619-336-4228 Michael R. Dalla, CMC - City Clerk February 20, 2018 James Halliday Interim Executive Director A Reason to Survive, Inc. 200 East 12th Street National City, CA 91950 Dear Mr. Halliday, On December 5th, 2017, Resolution No. 2017-237 was passed and adopted by the City Council of the City of National City, authorizing execution of a Maintenance and Operating Agreement with A Reason to Survive (ARTS). We are forwarding a certified copy of the above Resolution and a fully executed original Agreement. Sincerely, /elk%) N� Michael R. Dalla, CMC City Clerk Enclosures