HomeMy WebLinkAbout2021-06-15; City Council; ; Ground Lease Agreement with North County Transit District for Property Located between Carlsbad Village Drive and Grand Avenue, Commonly Known as the Depot Building and PMeeting Date: June 15, 2021
To: Mayor and City Council
From: Scott Chadwick, City Manager
Staff Contact: Curtis M. Jackson, Real Estate Manager
curtis.jackson@carlsbadca.gov, 760-434-2836
Subject: Ground Lease Agreement with North County Transit District for Property
Located between Carlsbad Village Drive and Grand Avenue, Commonly
Known as the Depot Building and Parking Lot (APN 203-296-12-00)
District: 1
Recommended Action
Adopt a resolution approving and authorizing the execution of a ground lease agreement with
the North County Transit District for property located between Carlsbad Village Drive and
Grand Avenue, commonly known as the Depot Building and Parking Lot.
Executive Summary
On March 15, 1963, the City of Carlsbad and the Atchinson, Topeka and Santa Fe Railway
Company entered into a rolling one-year ground lease for city use of railroad property for the
purpose of maintaining an office building and a memorial park, Washington Street Park. This
proposed ground lease agreement will replace and supersede all terms and conditions in the
original 1963 lease. The agreement covers the land directly under and immediately adjacent to
the depot building, five parking spaces, and the raised planter islands throughout the parking
lot east of the railroad tracks between Carlsbad Village Drive and Grand Avenue that is owned
by North County Transit District. The agreement does not include the Washington Street Park,
which has been under the control and maintenance of the transit district since 2014. The City
Council has not delegated authority to enter into lease agreements to the City Manager, so this
agreement is before the City Council for its review and approval.
Discussion
The property is located east of the railroad tracks between Carlsbad Village Drive and Grand
Avenue. It was originally leased to the city by the railroad for $1 per year for the purpose of
leasing the land below the depot building, as well as the Washington Street Park property located
on the west side of the railroad tracks. The building itself was donated to the city by the railroad
in 1963, while still owning the underlying land.
In 1992, the railroad sold a portion of its property, including the property subject to this ground
lease agreement, to North County Transit District. In 1993, the city transferred ownership of the
1963 lease agreement from the railroad to the district. The district resumed control of the
Washington Street Park portion of the 1963 ground lease agreement in 2014 under mutual
agreement. Additionally, sometime after 1963, the city assumed responsibility for the
CA Review AF
June 15, 2021 Item #1 Page 1 of 36
maintenance of the landscape planter islands throughout the district property on the east side of
the railroad tracks between Grand Avenue and Carlsbad Village Drive. The city has partnered
with Visit Carlsbad to operate the Carlsbad Visitor’s Center out of the depot building.
The intent of this new ground lease agreement is to clarify the city’s leasehold premises and
maintenance obligations on the property. The agreement is for one year, with rolling annual
renewals and covers the land directly under and immediately adjacent to the depot building, five
parking spaces, and the raised planter islands throughout the property owned by district.
Options
Staff provides the following three options for the City Council’s consideration:
1.Approve the ground lease agreement as recommended.
Pros:
•City would benefit from leasing the ground below the Depot Building and from
controlling maintenance of the landscaping within the NCTD parking lot.
•The new lease clarifies terms that have been informally amended from the
original 1963 ground lease agreement.
Cons:
•City will be responsible for the cost to maintain the leased property.
2.Provide specific direction and send back to staff to renegotiate the ground lease agreement
terms or provisions.
Pros:
•A ground lease agreement with different terms or provisions might be of greater
benefit the city.
Cons:
•Renegotiating new agreement would take additional staff resources.
3.Don’t lease property at all.
Pros:
•This would reduce city maintenance costs.
Cons:
•The Depot Building would need to be relocated and Visit Carlsbad would need to
find new home
Staff recommend Option 1, that the City Council authorize the City Manager to execute the
ground lease.
Fiscal Analysis
Under the terms of the original 1963 agreement, the city paid Atchinson, Topeka and Santa Fe
Railway Company $1 per year. Under the new agreement, the city will continue to pay the
North County Transit District $1 per year, as well as the costs associated with maintaining the
leasehold premises (the depot building, five parking spaces and landscaped planters).
June 15, 2021 Item #1 Page 2 of 36
Next Steps
The city will continue to own, maintain and lease the depot building to Visit Carlsbad and
maintain the landscaped planters and parking spaces serving the Depot Building.
Environmental Evaluation (CEQA)
This action is exempt from the California Environmental Quality Act under CEQA guidelines
15301 – Existing Facilities. Section 15301 exempts the leasing of property involving negligible of
no expansion of use beyond that existing at the time of the agency’s determination.
Public Notification
Public notice of this item was posted in keeping with the state's Ralph M. Brown Act and it was
available for public viewing and review at least 72 hours before the scheduled meeting date.
Exhibits
1. City Council resolution
June 15, 2021 Item #1 Page 3 of 36
RESOLUTION NO. 2021-142
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD,
CALIFORNIA, APPROVING AND AUTHORIZING THE EXECUTION OF A
GROUND LEASE AGREEMENT WITH THE NORTH COUNTY TRANSIT
DISTRICT FOR PROPERTY LOCATED BETWEEN CARLSBAD VILLAGE DRIVE
AND GRAND AVENUE, COMMONLY KNOWN AS THE DEPOT BUILDING
AND PARKING LOT
WHEREAS, on March 15, 1963, the Carlsbad City Council approved a ground lease agreement
with Atchinson, Topeka & Santa Fe (AT&SF) for the purpose of maintaining an office building (Depot
Building) and memorial park (Washington Street Park) on the property located adjacent to, and on
both sides of the railroad line between Carlsbad Village Drive and Grand Avenue (Property); and
WHEREAS, the Depot Building was donated to the City of Carlsbad by AT&SF on May 2, 1963,
whereby AT&SF transferred all of its rights, title and interest in the Depot Building, exclusive of the
land upon which the Depot Building is located to the city; and
WHEREAS, On Oct. 30, 1992, AT&SF sold a portion of its' property, including the property
subject to this ground lease agreement, to the North County Transit District (NCTD); and
WHEREAS, on Jan. 5, 1993, the city transferred ownership of the 1963 ground lease agreement
from ATS&F to NCTD; and
WHEREAS, in April 2014, NCTD formally resumed control of the Washington Street Park
portion of the 1963 ground lease agreement under mutual agreement. Additionally, sometime after
1963, the city assumed responsibility for the maintenance of the landscape planter areas throughout
the NCTD property on the east side of the railroad tracks between Grand Avenue and Carlsbad Village
Drive; and
WHEREAS, the city has partnered with Visit Carlsbad to operate the Carlsbad Visitor's Center
out of the Depot Building; and
June 15, 2021 Item #1 Page 4 of 36
WHEREAS, the city and NCTD desires to enter into a new indefinite term ground lease
agreement with a 180-day termination provision; and
WHEREAS, the city will pay rent of one dollar ($1.00) annually over the term of the Agreement;
and
WHEREAS, this new ground lease agreement will replace and supersede all terms and
conditions in the original 1963 lease agreement.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad, California, as
follows:
1.That the above recitations are true and correct.
2.That the Ground Lease Agreement, which is attached hereto as Attachment A, is
approved as to form, and the City Manager is hereby authorized and directed to
execute the Ground Lease Agreement_
3.The City Manager, or his designee, is hereby authorized to act on behalf of the City of
Carlsbad in all future decisions and actions necessary to implement the Ground Lease
Agreement with NCTD, and to do so in full compliance with the terms and conditions of
the Ground Lease Agreement and to the satisfaction of the City Attorney.
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June 15, 2021 Item #1 Page 5 of 36
PASSED, APPROVED AND ADOPTED at a Regular Meeting of the City Council of the City of
Carlsbad on the 15th day of June, 2021, by the following vote to wit:
AYES: Hall, Blackburn, Acosta, Bhat-Patel, Schumacher.
NAYS: None.
ABSENT: None.
MATT HALL, Mayor
BARBARA ENGLESON, City Clerk
(SEAL)
June 15, 2021 Item #1 Page 6 of 36
229.2-229.3-0521-GL-CSBD 1
AMENDED AND RESTATED
REAL PROPERTY GROUND LEASE
This Amended and Restate Ground Lease Agreement (“Lease”) is made and entered into as of _____ day
of ______________________, 2021 (“Effective Date”), by and between the NORTH COUNTY TRANSIT
DISTRICT, a public agency existing under the laws of the State of California, pursuant to California Public
Utility Code sections 125000, et seq. (“NCTD” or “Lessor”) and City of Carlsbad, a municipal corporation
(“City” or “Lessee”) (collectively, “Parties”).
RECITALS
A. NCTD, as successor in interest to The Atchison, Topeka and Santa Fe Railway Company (ATSF), and
City are parties to NCTD Agreement No. 229.39-963-OB-CSBD, Lease of Land (Short Term) dated
March 15, 1963, as amended (“Original Lease”), attached as Exhibit “C.” The Original Lease allowed
City use of two parcels of land for the purposes of an office building (“Depot Building” and memorial
park aka “Washington St. Park”).
B. The Depot Building is owned by the City of Carlsbad pursuant to ATSF’s May 2, 1963 donation and
transfer of all of its right, title and interest in the Depot Building and upon the station grounds, exclusive
of land.
C. NCTD resumed control of the Washington St. Park parcel in 2014 under mutual agreement of the
parties which is no longer part of the Leased Property. This Amended and Restated Ground Lease
shall codify the current extent of the Leased Property.
D. This Lease shall replace and supersede all terms and conditions of the Original Lease, as well as any
other contractual agreements pertaining to the Depot Building and Washington St. Park.
ARTICLE 1 – SUMMARY OF BASIC LEASE PROVISIONS
1.Basic Lease Provisions ("Basic Lease Provisions")
1.1. Lessor: NORTH COUNTY TRANSIT DISTRICT
Lessor’s Address for Notices:
Real Estate Department
810 Mission Avenue
Oceanside, CA 92054
1.2. Lessee: CITY OF CARLSBAD
Lessee’s Address for Notices:
Curtis M. Jackson, Esq., Real Estate Manager
1200 Carlsbad Village Drive
Carlsbad, CA 92008
1.3. Leased Property: Portion of Accessor’s Parcel Number 203-296-12-00, located in the City of
Carlsbad, County of San Diego, State of California, consisting of approximately 11,103 square
feet, more or less, as defined in Exhibit "A" hereto (the "Property").
1.4. Permitted Use: Lessee shall use the Property only for the purpose of accommodating the Depot
Building in order to operate the City of Carlsbad Visitor Center, and uses incident to that purpose
including landscaping, signage, parking spaces, and non-exclusive use of the driveway and
parking lot for ingress and egress purposes.
1.5. Term: Rental of the Property shall commence on the Effective Date indicated above
("Commencement Date") and end when this lease is terminated, as hereinafter provided.
Attachment A
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229.2-229.3-0521-GL-CSBD
1.6. Annual Rent: $1.00.
1.7. Security Deposit: None.
1.8. Utilities and Services Provided by NCTD: None.
1.9. Attachments. Attachments A through C constitute a part of this Lease and are incorporated as
though fully set forth herein.
ARTICLE 2 – PROPERTY
2. Property. NCTD leases to Lessee and Lessee leases from NCTD the Property for the term, at the
rental, and upon all of the conditions set forth in this Lease.
2.1. Acceptance of Property. Lessee accepts the Property in its present physical "as-is" condition,
and agrees to make no demands upon NCTD for any improvements or alterations. By signing this
Lease, Lessee represents and warrants that Lessee has independently inspected the Property
and the area immediately surrounding and made all investigations, tests, and observations
necessary to satisfy Lessee as to the condition of the Property, zoning and land use laws,
regulations, and ordinances affecting the Property, and all of the conditions, restrictions,
encumbrances, and other matters of record relating to the Property. Lessee agrees that Lessee
is relying solely on Lessee's independent inspection and that NCTD has made no warranty or
representation with regard to the Property except as expressly set forth in this Lease. NCTD shall
not be responsible for any latent defect or change in condition in the Property and Lessee's
obligations under this Lease shall not be diminished on account of any defect in the Property, any
change of condition, or any damages occurring on the Property except as expressly provided in
this Lease. Lessee hereby releases NCTD from all future claims, actions, or demands that Lessee
may have or may hereinafter have, known and unknown, in any way relating to the quality, fitness,
or condition of the Property, and Lessee specifically waives all rights under California Civil Code
section 1542, which provides as follows:
"A general release does not extend to claims which the creditor does not know or
suspect to exist in his or her favor at the time of executing the release, which if
known by him or her must have materially affected his or her settlement with the
debtor."
Lessee Initial: __________
2.2. Right to Enter. NCTD and NCTD's agents shall have the right to enter the Property at reasonable
times for the purpose of inspecting the Property, performing any services required of NCTD,
showing the Property to prospective purchasers, lenders, or Lessees, taking such safety measures
as NCTD may reasonably deem necessary or desirable, posting notices of non-responsibility, or
making repairs to NCTD's adjacent property and railroad right-of-way, and erecting, using and
maintaining of utilities, services, pipes and conduits through the Property and/or other property as
long as there is no material adverse effect to Lessee's use of the Property. NCTD will repair any
physical damage to the permanent improvements located on the Property resulting from NCTD
exercising the rights reserved in this section. Unless the entry is the result of an emergency
threatening life, health, or property, NCTD shall first give twenty-four (24) hours notice to Lessee
before entering the Property, excepting those areas open to the public.
2.3. Mineral and Water Rights. Excepted and reserved from the Property are all minerals and mineral
rights, water and water rights of every kind or nature located upon or below the surface of the
Property.
2.4. Quiet Possession. NCTD covenants that, subject to the limitations expressly set forth in this
Lease, Lessee, upon Lessee's timely payment of the rent and performance of Lessee's covenants
June 15, 2021 Item #1 Page 8 of 36
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229.2-229.3-0521-GL-CSBD
and obligations under this Lease, may quietly have, hold and enjoy the Property during the term
of this Lease, without hindrance or interruption by NCTD, subject to NCTD's right to enter upon
the Property as provided herein.
2.5. Representation. NCTD has made no representations or warranties, express or implied, with
respect to the Property and Lessee shall acquire no rights, easements or licenses in or to the
Property by implication or otherwise except as expressly set forth in this Lease. NCTD represents
that it has full authority and ability to enter into this Lease.
2.6. Easements. NCTD reserves to itself the right, from time to time, to grant such easements, rights
and dedications that NCTD deems necessary or desirable, and to cause the recordation of parcel
maps and restrictions, so long as such easements, rights, dedications, maps and restrictions do
not unreasonably interfere with the use of the Property by Lessee. Lessee shall sign any of the
aforementioned documents upon request of NCTD and failure to do so shall constitute a material
default of this Lease by Lessee without the need for further notice to Lessee.
ARTICLE 3 – TERM
3. Term. The term and Commencement Date of this Lease shall be as specified in section 1.5 of the Basic
Lease Provisions.
3.1. Termination Option. This Lease may be terminated at any time and for any reason by either Party
with one hundred eighty (180) day written notice.
ARTICLE 4 - RENT
4. Rent.
4.1. Annual Rent. Lessee shall pay to NCTD the Annual Rent for the Property set forth in section 1.6
of the Basic Lease Provisions in advance on the first day of each year, without deduction, setoff,
prior notice, or demand. Rent shall be payable in lawful money of the United States.
4.2. Additional Rent. All costs and expenses which Lessee assumes or agrees to pay under this
Lease, other than the Annual Rent, shall be deemed to be "Additional Rent." If Lessee defaults in
the making of any payment required under this Lease, or defaults in performing any obligation
under this Lease that can be performed by the expenditure of money, NCTD may, without
obligation to do so, make such payment or expenditure. The amount of such payment or
expenditure by NCTD shall be payable by Lessee as Additional Rent upon demand by NCTD.
The Annual Rent and Additional Rent are collectively called "Rent."
4.3. Late Charge. Lessee acknowledges that late payment by Lessee to NCTD of Annual Rent,
Additional Rent, or other sums due under this Lease will cause NCTD to incur costs not
contemplated by this Lease, the exact amount of which will be extremely difficult to ascertain.
Such costs include, but are not limited to, processing and accounting charges and late charges
which may be imposed on NCTD. Accordingly, if any installment of Annual Rent, Additional Rent,
or any other sum due from Lessee is not received by NCTD or NCTD's designee within ten (10)
days after such amount is due, then, without any requirement for notice to NCTD, Lessee shall
pay to NCTD a late charge equal to ten percent (10%) of such overdue amount. The parties
hereby agree that such late charge represents a fair and reasonable estimate of the costs NCTD
will incur by reason of late payment by Lessee. Acceptance of such late charge by NCTD shall in
no event constitute a waiver of Lessee's default with respect to such overdue amount, nor prevent
NCTD from exercising any of the other rights and remedies granted under this Lease or at law.
4.4. Payment of Rent. All Rent shall be made payable to North County Transit District at 810 Mission
Avenue, Oceanside, California 92054; provided that NCTD may by written notice to Lessee direct
that Rent be made payable to NCTD at such address as NCTD may designate in such notice, or
June 15, 2021 Item #1 Page 9 of 36
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229.2-229.3-0521-GL-CSBD
to such other person as NCTD may designate at such address as NCTD may designate in such
notice.
4.5. Failure to pay Rent. Failure to pay Rent on the due date which remains unpaid for more than
sixty (60) days shall be a non-curable event of default without the necessity of any notice or cure
period provided in Article 13. At NCTD’s sole discretion, immediately following such a non-curable
event of default, NCTD may terminate the Lease and seek any remedy available by this Lease or
at law. If Lessee tenders a check, which is dishonored by a banking institution, than the Lessee
shall tender cash or cashier’s check only for all future payments, which shall continue until such
time as written consent is obtained from NCTD. In addition, Lessee shall be liable in the sum of
$25 for each dishonored check that is returned to NCTD.
ARTICLE 5 – SECURITY DEPOSIT
5. Security Deposit. Intentionally Omitted.
ARTICLE 6 – PERMITTED USE
6. Use.
6.1. Permitted Use. The Property shall be used and occupied only for the purpose set forth in section
1.4 of the Basic Lease Provisions and for no other purpose.
6.2. Compliance with Laws. Lessee shall comply with all applicable laws and regulations concerning
the Property or Lessee's use of the Property, including, without limitation, the obligation at Lessee's
cost to alter, maintain, or restore the Property, or to construct improvements in or to the Property,
in compliance and conformity with all laws and government requirements relating to the condition,
use, or occupancy of the Property, or construction or land disturbance activities on the Property,
during the term of this Lease, whether foreseen or unforeseen, regardless of cost, and regardless
of when during the term the work is required.
6.3. Hazardous Materials. Lessee shall not cause or permit any Hazardous Material to be used,
stored, transported, generated, or disposed in or about the Property by Lessee, Lessee's agents,
employees, contractors, subLessees, licensees, or invitees. "Hazardous Material" means any
hazardous, toxic, or infectious substance, material, or waste which is or becomes regulated by
NCTD or any local governmental entity, the State of California, or the United States Government
under any law, regulation or ordinance regulating or controlling any Hazardous Material (the
"Hazardous Materials Laws"), including, without limitation, any material, or substance which is: (i)
defined as a "hazardous waste," "extremely hazardous waste" or "restricted hazardous waste"
under California Health and Safety Code §§ 25115, 25117 or 25122.7, or listed pursuant to
California Health and Safety Code § 25140, (ii) defined as a "hazardous substance" under
California Health and Safety Code § 25316, (iii) defined as a "hazardous material," "hazardous
substance" or "hazardous waste" under California Health and Safety Code § 25501 (iv) defined
as a "biohazardous waste" under California Health and Safety Code § 117635, (v) petroleum or
petroleum product, (vi) asbestos, (vii) designated as a "hazardous substance" pursuant to § 311
of the Federal Water Pollution Control Act, 33 U.S.C. 1251. et seq. (33 U.S.C. § 1317), (viii) defined
as a "hazardous waste" pursuant to § 1004 of the Federal Resource Conservation and Recovery
Act, 42 U.S.C. § 6901, et seq. (42 U.S.C. § 6903), or (ix) defined as a "hazardous substance"
pursuant to § 101 of the Comprehensive Environmental Response Compensation and Liability
Act, 42 U.S.C. § 9601 et seq. (42 U.S.C. § 9601).
6.3.1. Lessee shall immediately notify NCTD in writing of: (i) any enforcement, cleanup, removal
or other governmental, or regulatory action instituted, completed or threatened pursuant to
any Hazardous Materials Laws; (ii) any claim made or threatened by any person against
Lessee, any subLessee, or the Property relating to damage, contribution, cost recovery
compensation, loss or injury resulting from or claimed to result from any Hazardous
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Materials; and (iii) any reports made to any environmental agency arising out of or in
connection with any Hazardous Materials in or removed from the Property, including any
complaints, notices, warnings, or asserted violations in connection therewith. Lessee shall
also supply to NCTD as promptly as possible, and in any event within five (5) business
days after Lessee first receives or sends the same, with copies of all claims, reports,
complaints, notices, warnings, or asserted violations, relating in any way to the Property or
Lessee's use thereof. Lessee shall promptly deliver to NCTD copies of hazardous waste
manifests reflecting the legal and proper disposal of all Hazardous Materials removed from
the Property.
6.3.2. Lessee shall indemnify, defend (by counsel reasonably acceptable to NCTD), protect, and
hold NCTD and each of NCTD's employees, agents, attorneys, successors and assigns,
free and harmless from and against any and all claims, liabilities, penalties, forfeitures,
losses, or expenses (including attorneys' fees), or death of or injury to any person or
damage to any property whatsoever, arising from or caused in whole or in part, directly or
indirectly, by: (i) the presence in, on, under or about the Property or discharge in or from
the Property, of any Hazardous Materials; (ii) the use, analysis, storage, transportation,
disposal, release, threatened release, discharge or generation of Hazardous Materials to,
in, on, under, about, or from the Property by Lessee; or (iii) Lessee's failure to comply with
any Hazardous Materials Law. Lessee's obligations hereunder shall include, without
limitation, and whether foreseeable or unforeseeable, all costs of any required or necessary
repair, cleanup or detoxification, or decontamination of the Property, or the preparation and
implementation of any closure, remedial action, or other required plans in connection
therewith, and shall survive the expiration or earlier termination of the Lease. For purposes
of the release and indemnity provisions hereof, any acts or omissions of Lessee, or by
employees, agents, subLessees, assignees, contractors, or subcontractors of Lessee or
others acting for or on behalf of Lessee (whether or not they are negligent, intentional,
willful, or unlawful) shall be strictly attributable to Lessee.
6.3.3. Upon expiration or earlier termination of the Lease, Lessee shall cause all Hazardous
Materials to be removed from the Property and transported for use, storage or disposal in
accordance with and compliance with all applicable Hazardous Materials Laws. Lessee
shall not take any remedial action in response to the presence of any Hazardous Materials
in or about the Property, nor enter into any settlement agreement, consent decree, or other
compromise in respect to any claims relating to any Hazardous Materials in any way
connected with the Property, without first notifying NCTD of Lessee's intention to do so and
affording NCTD ample opportunity to appear, intervene, or otherwise appropriately assert
and protect NCTD's interest with respect thereto.
6.4. Storm Water Pollution Prevention: Compliance with Construction General Permit for the
Property.
6.4.1. If coverage under the Construction General Permit and/or NCTD MS4 Program
requirements (as defined in this section 6.4.1) pursuant to applicable NCTD, local, state,
and federal ordinances, laws, rules and regulations is required, Lessee shall prepare,
implement and monitor a Storm Water Pollution Prevention Plan ("SWPPP") that is
consistent with the current NCTD SWPPP template and is in compliance with the current
Construction General Permit for the purpose of preventing, among other things, the
discharge of pollutants into receiving waters. This includes elimination of non-storm water
pollution discharges such as improper dumping, spills or leakage from storage tanks or
transfer areas. If coverage under the Construction General Permit is required, in addition
to the requirements set forth in section 7.2, Lessee shall not perform or cause to be
performed any construction or demolition activities on the Property until Lessee obtains a
Waste Dischargers Identification number, as that term is defined in the Construction
General Permit. For purposes of this section 6.4, “Construction General Permit” shall
mean the State Water Resources Control Board (“SWRCB”) National Pollutant Discharge
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Elimination System (“NPDES”) General Permit for Waste Discharge Requirements for
Discharges of Storm Water Runoff Associated with Construction and Land Disturbance
Activities, as it may be amended or superseded, (currently Order No. 2012-0006-DWQ);
and MS4 Program shall mean the RWQCB issued Phase II Small Municipal Separate
Storm Sewer System (“MS4”) Program (currently Order No. 2013-0001-DWQ) as it may
be amended or superseded.
6.4.2. The Lessee shall prepare, implement and monitor an Erosion and Sediment Control Plan
("ESCP") consistent with the current NCTD ESCP template for the purpose of preventing
the discharge of pollutants into receiving waters for all construction or demolition activities
performed or caused to be performed by Lessee on the Property for activities not requiring
coverage under the Construction General Permit, industrial general permit or an individual
National Pollutant Discharge Elimination System permit, including activities that result in a
total land disturbance of less than one acre that are not part of a larger common plan of
development or sale. This includes elimination of non-storm water pollution discharges
such as improper dumping, spills or leakage from storage tanks or transfer areas.
6.4.3. Without limiting the provisions set forth in sections 6.2, 7.2 and Article 8, the Lessee shall
comply with the NCTD Storm Water Management Program and all NCTD, local, state and
federal ordinances, laws, rules and regulations governing storm water discharges,
including but not limited to those associated with construction and demolition activities such
as clearing, excavating, grading, demolition and other land disturbances.
6.4.4. The Lessee shall pay and be responsible for all fees, as applicable and as required by
SWRCB, during the term of this Lease.
6.4.5. The Lessee shall submit all SWRCB required documentation, as applicable and including
but not limited to Permit Registration Documents, as that term is defined in the Construction
General Permit, to the SWRCB through the SWRCB SMARTS online system and shall
provide a copy of such documentation and proof of submittal to NCTD.
6.4.6. Lessor may approve or disapprove any provision in the Permit Registration Documents or
ESCP or proposed work in Lessor’s sole and absolute discretion, as set forth further in
section 7.2, and Lessor may require such changes or impose such conditions as Lessor,
in its sole and absolute discretion, deems necessary or appropriate. Without limiting the
provisions set forth further in this Lease, including but not limited to section 7.2.1 and Article
8, Lessor and Lessor's employees, consultants, and agents assume no responsibility for
and make no representations or warranties, express or implied, as to the Permit
Registration Documents or ESCP or Lessee’s compliance with the same, including but not
limited to the design, condition, workmanship, or adequacy of the drawings, specifications,
construction documents, Permit Registration Documents, ESCP or work. No review,
comments, requirements, or inspection shall relieve Lessee or Lessee's engineers,
contractors, subcontractors, or consultants from its responsibility under the Construction
General Permit, including but not limited to errors or omissions in the drawings,
specifications, application, construction documents, Permit Registration Documents or
ESCP, or for the quality or adequacy of the work.
6.4.7. As required by NCTD’s Phase II MS4 Permit (Order No. 2013-0001-DWQ) (“MS4 Permit”),
NCTD may conduct periodic water sampling associated with any drainage facility installed
by Lessee within the Easement Area. Lessee shall be required to reimburse NCTD for
costs associated with collection, sampling and reporting. NCTD may require Lessee to
perform corrective actions, at Lessee's sole cost and expense, in order to meet the
requirements of the MS4 Permit.
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6.5. Storm Water Pollution Prevention: Compliance with Individual or Industrial National
Pollutant Discharge Elimination System Permit for the Property.
6.5.1. If coverage under an industrial general permit or individual National Pollutant Discharge
Elimination System (“NPDES”) permit is required pursuant to applicable NCTD, local, state,
and federal ordinances, laws, rules and regulations, Lessee shall obtain such coverage in
order to lawfully discharge storm water associated with its activity on the Property, prior to
conducting any activity on the Property triggering such permit, and shall comply with the
approved permit. Lessee shall submit to Lessor, for review and approval, a draft permit
application. Lessor may approve or disapprove any provision or proposed work in Lessor’s
sole and absolute discretion, as set forth further in section 7.2, and Lessor may require
such changes or impose such conditions as Lessor, in its sole and absolute discretion,
deems necessary or appropriate. Without limiting the provisions set forth herein, including
but not limited to section 7.2.1 and Article 8, Lessor and Lessor's employees, consultants,
and agents assume no responsibility for and make no representations or warranties,
express or implied, as to the application or Lessee’s compliance with the permit, including
but not limited to the design, condition, workmanship, or adequacy of the drawings,
specifications, construction documents, application or work. No review, comments,
requirements, or inspection shall relieve Lessee or Lessee's engineers, contractors,
subcontractors, or consultants from its responsibility under the NPDES permit, including
but not limited to errors or omissions in the drawings, specifications, application, or
construction documents, or for the quality or adequacy of the work.
6.6. Rail-related Conditions of Use. Lessee shall not encroach within twenty-five (25) feet of any rail
at any time. Lessee shall have no right to cross any rail to access the Property.
ARTICLE 7 – MAINTENANCE, REPAIRS,
ALTERATIONS AND COMMON AREA SERVICES
7. Maintenance, Repairs, Alterations and Common Area Services.
7.1. Maintenance and Repairs. Lessee shall keep the Property in good condition and repair; and
clean, sanitary, free of debris and graffiti. All graffiti will be removed within 24 hours of Lessee’s
knowledge of the graffiti. Lessee shall store any garbage and debris in appropriate metal
containers.
7.2. Alterations and Additions. Lessee shall not, without NCTD's prior written consent, make any
alterations, improvements, additions, Utility Installations in, on or about the Property. "Utility
Installation" means tower construction, power panels, electrical distribution systems, lighting
fixtures, telephone and telecommunications wiring and equipment. At the termination or expiration
of the term of this Lease, NCTD may require in its sole and absolute discretion, the removal of any
or all of alterations, improvements, additions, or Utility Installations, (collectively, "Improvements"),
and the restoration of the Property to its prior condition, at Lessee's expense.
7.2.1. Lessee shall deliver to NCTD drawings, specifications, and other construction documents
for any proposed Improvements, including but not limited to documents as required
pursuant to sections 6.4 and 6.5, all sufficient for NCTD to determine the scope and nature
of the proposed Improvements, for NCTD's review and approval to proceed with
Improvements. NCTD shall not be liable for and Lessee expressly agrees to indemnify,
defend and hold harmless NCTD for any claims made related to design or construction of
Improvements in accordance with the Indemnification provision set forth in Article 8. In
the event that NCTD approves proceeding with any proposed Improvements, Lessee shall
make the Improvements in substantial compliance with the construction documents
reviewed by NCTD and in compliance with all applicable federal, State, and local laws,
regulations, ordinances, codes, rules, and requirements. Lessee shall obtain all
necessary permits and approvals from the applicable governmental agencies and shall
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furnish a copy thereof to NCTD prior to the commencement of the work. Lessee shall use
only a contractor approved by NCTD. NCTD may require Lessee to provide NCTD, at
Lessee's sole cost and expense, a lien and completion bond in an amount equal to one
and one-half times the estimated cost of such Improvements, to insure NCTD against any
liability for mechanic's and materialmen's liens and to insure completion of the work.
Should Lessee make any Improvements without the prior approval of NCTD, NCTD may,
at any time during the term of this Lease, require Lessee remove any part or all of the
same.
7.2.2. Lessee shall carry out any construction, expansion and/or development of the Property in
conformity with all applicable federal and state labor laws (including, without limitation, if
applicable the requirement under California law to pay prevailing wages and to hire
apprentices). Lessee shall be solely responsible for determining and effectuating
compliance with applicable laws, and NCTD makes no representation as to the
applicability or non-applicability of the laws to any construction, expansion and/or
development of the Premises by Lessee. Lessee expressly acknowledges and agrees
that NCTD has not previously represented to the Lessee or its contractor(s), in writing or
otherwise, whether the construction, expansion and/or development of the Property is or
is not a “public work” as defined by section 1720 of the Labor Code. Lessee shall have
the sole obligation to provide any and all disclosures or identification as required by Labor
Code section 1781 and any other similar law, as the same may be amended from time to
time, if applicable.
7.2.3. Lessee shall pay, when due, all claims for labor or materials furnished or alleged to have
been furnished to or for Lessee at or for use in the Property. Lessee shall not permit any
mechanics' or other liens to be filed against the Property nor against Lessee's Leasehold
Interest. If any such lien is filed, Lessee shall cause the lien to be discharged of record,
either by payment of the claim or posting and recording the bond contemplated by Civil
Code section 3143 or any successor statute, within twenty (20) days after demand by
NCTD. Lessee shall indemnify, hold harmless, and defend NCTD from and against any
such lien.
7.2.4. Lessee shall give NCTD not less than ten (10) days' notice prior to the commencement of
any work in the Property by Lessee, and NCTD shall have the right to post notices of non-
responsibility in or on the Property as provided by law.
7.2.5. Lessee shall reimburse NCTD for all cost incurred as a result of any Improvements
including but not limited to plan design review, review of documents pursuant to sections
6.4 and 6.5, furnishing of any security, flag protection, inspectors, and for performing any
work, during the installation of any Improvements.
ARTICLE 8 – EXCULPATION, INSURANCE, AND INDEMNITY
8. Exculpation, Insurance, and Indemnity.
8.1. Exculpation of NCTD. NCTD shall not be liable to Lessee for any damage to Lessee or Lessee's
property from any cause. Lessee waives all claims against NCTD for damage to person or
property arising for any reason, except that NCTD shall be liable to Lessee for damage to Lessee
resulting from the sole negligence or willful misconduct of NCTD, its Board of Directors, agents,
officers, employees, volunteers and/or its authorized representatives. Lessee acknowledges that
railroad tracks are located adjacent to the Property and that operation of trains over the tracks
does and will produce vibrations and noise levels which may be considered objectionable by
Lessee or Lessee's employees, agents, sub-lessees, licensees, or invitees. With knowledge and
understanding of these facts, Lessee agrees that no legal action or complaint of any kind
whatsoever shall be instituted by Lessee or on Lessee's behalf as result of the vibrations or noise
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or as the result of the use of the railroad track in general, whether by NCTD or any other railroad
operation on the tracks.
8.2. Indemnity. NCTD shall not be liable for, and Lessee shall indemnify, defend and hold NCTD, its
Board of Directors, agents, officers, employees, volunteers and authorized representatives
harmless from and against any and all liabilities or claim of liability, losses, damages, expenses,
demands, judgments, fines, mechanics liens or other liens, labor disputes, charges or costs,
including defense costs and legal fees and claims for damages of whatsoever character, nature
and kind, whether directly or indirectly arising from or connected with (a) the use of the Premises
or improvements by Lessee, (b) any breach by Lessee of the terms or conditions of this Lease, or
(c) the sole or contributing acts or omissions of Lessee or the employees, agents, officers,
volunteers, patrons, or invitees of Lessee in, on or about the Property or improvements, except
that if the Lessor shall participate in any such contributing acts or omissions, then the loss, damage
or expense arising therefrom shall be borne by the parties in proportion to their established fault.
Nothing herein shall relieve any party indemnified hereunder from liability to the extent that such
liability arises from such party’s sole established gross negligence or willful misconduct.
This indemnity shall not require payment of a claim by NCTD or any of its officers, employees,
agents or volunteers as a condition precedent to NCTD’s recovery hereunder. Lessee’s obligation
to indemnify hereunder shall not be restricted to insurance proceeds, if any, received by NCTD
and its directors, officers, employees, agents and volunteers.
Nothing contained herein shall prohibit NCTD, in its sole discretion, from participating in the
defense of any demand, claim, action, proceeding, or litigation. In no event shall NCTD’s
participation in the defense of any demand claim, action, proceeding, or litigation affect the
obligations imposed upon Lessee herein.
This and all other Lessee indemnities shall survive the termination of this Lease and shall remain
in effect for as long as the underlying claim or action remains viable.
8.3. Insurance. Without limiting Lessee’s indemnification obligations to NCTD under this Lease,
Lessee shall provide and maintain during the Term and for other period required in this Lease, at
its sole expense, insurance in the amounts and form specified in Exhibit B, INSURANCE
REQUIREMENTS. Lessee shall name NCTD as an additional insured on each of the
aforementioned insurance policies and the policies shall state that they are primary and that any
policies NCTD maintains shall be noncontributory. Lessee shall provide NCTD with written
certificates of insurance evidencing such coverage. Said policies shall expressly provide that the
policies shall not be canceled or altered without at least thirty (30) days prior written notice to
NCTD. Said policies shall be with insurance companies with an A.M. Best rating of AVII or better.
Each policy limit herein shall be increased by Lessee, upon request by NCTD, to the amount
NCTD increases its policy limits for other contracts at Lessee’s sole cost.
NCTD takes no responsibility for the protection of Lessee’s property from acts of vandalism by
third parties. The insurance requirements may be changed by NCTD upon giving of notice to
Lessee; provided that the requirements set forth in Exhibit B shall be the minimum insurance
requirements during the Term.
ARTICLE 9 – DAMAGE OR DESTRUCTION
9. Damage or Destruction. If at any time during the term of this Lease the Property is damaged or
destroyed then, unless the damage is caused by the negligent or willful act of Lessee (in which event
Lessee shall make the repairs at Lessee's expense), NCTD may at NCTD's option either: (i) repair such
damage as soon as reasonably possible at NCTD's expense, in which event this Lease shall continue
in full force and effect, or (ii) give written notice to Lessee within thirty (30) days after the date of the
occurrence of such damage of NCTD's intention to cancel and terminate this Lease as of the date of
the occurrence of such damage, in which event this Lease shall terminate as of the date of the
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occurrence of such damage. In the event NCTD elects to repair or restore the Property, and any part
of the Property is not usable for the period during which such damage, repair, or restoration continues,
then Annual Rent shall be abated, provided: (1) the damage was not the result of the negligence of
Lessee, and (2) such abatement shall only be to the extent the operation and profitability of Lessee's
business as operated from the Property is adversely affected. Except for the abatement of Annual
Rent, if any, Lessee shall have no claim against NCTD for any damage suffered by reason of any such
damage, repair or restoration. NCTD and Lessee waive the provisions of any statutes which relate to
termination of leases when leased property is destroyed and agree that such event shall be governed
by the terms of this Lease.
ARTICLE 10 – TAXES AND ASSESSMENTS
10. Taxes and Assessments. Lessee shall pay before delinquency any and all real and personal property
taxes, general and special assessments, license fees, and other charges of any description including,
without limitation, any possessory interest tax, that are levied and assessed from the commencement
of this Lease until the expiration or termination of this Lease against the Property, Lessee's possessory
interest in the Property, Lessee's Leasehold Estate, any subleasehold estate, improvements located
on the Property, or personal property installed or located in or on the Property or improvements
(collectively, "Taxes and Assessments"), to the full extent of the installments of the Taxes and
Assessments falling due during the term of this Lease. All payments of Taxes and Assessments shall
be made directly to the taxing or charging authority. Lessee shall provide receipts or other proof of
payment of the Taxes and Assessments to NCTD prior to the date that the Taxes and Assessments
become delinquent.
10.1. Lessee's Right to Contest Taxes and Assessments. Lessee at its sole cost shall have the
right, at any time, to seek a reduction in the assessed valuation of the Property or to contest any
Taxes and Assessments that are to be paid by Lessee. If Lessee seeks a reduction of or
contests the Taxes and Assessments, the failure on Lessee's part to pay the Taxes and
Assessments shall not constitute a default as long as Lessee, before the delinquency date,
furnishes to NCTD a surety bond issued by an insurance company qualified to do business in
California in an amount equal to one hundred twenty-five percent (125%) of the total amount of
Taxes and Assessments in dispute. The bond shall hold NCTD and the Property harmless from
any damage arising out of the proceeding or contest and shall insure the payment of any
judgment that may be rendered. NCTD shall not be required to join in any proceeding or contest
brought by Lessee unless the provisions of any law require that the proceeding or contest be
brought by or in the name of NCTD. In that case NCTD shall join in the proceeding or contest
or permit it to be brought in NCTD's name as long as NCTD is not required to bear any cost.
Lessee, on final determination of the proceeding or contest, shall immediately pay or discharge
any decision or judgment rendered, together with all costs, charges, interest, and penalties
incidental to the decision or judgment.
10.2. Transfer Taxes. If a transfer tax is payable to any governmental agency or agencies as a result
of this Lease, Lessee shall pay such transfer tax directly to the taxing authority or authorities
when it is due.
10.3. Possessory Interest Tax Notice. Lessee acknowledges that NCTD has given notice to Lessee
that the property interest created by this Lease may be subject to property taxation pursuant to
Revenue and Taxation Code § 107.6 or other statutes, and that Lessee may be subject to the
payment of property taxes levied on the possessory interest created by this Lease.
10.4. Indemnification. NCTD shall not be liable for, and Lessee shall indemnify, defend and hold
NCTD and its directors, officers, employees, volunteers and agents and the Property and any
improvements now or hereafter located on the Property free and harmless from any claims,
demands, liabilities, judgments, fines, losses, damages, expenses, charges or costs of any kind
or character, including attorneys' fees and court costs, resulting from any Taxes and
Assessments required by this Article to be paid by Lessee, and from all interest, penalties, and
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other sums imposed thereon, and from any sale or other proceeding to enforce collection of any
Taxes and Assessments.
10.5. Payment by NCTD. Should Lessee fail to pay within the time specified in this Article any Taxes
and Assessments required by this Article to be paid by Lessee, NCTD may, without notice to or
demand on Lessee, pay, discharge, or adjust said Taxes and Assessments for the benefit of
Lessee. In such event, Lessee shall reimburse NCTD pursuant to section 4.2.
ARTICLE 11 – UTILITIES AND SERVICES
11. Utilities and Services. Except as set forth in section 1.8 of the Basic Lease Provisions, Lessee shall
arrange for and pay before delinquency all charges for utilities, including water, sewer, gas, electric,
heat, air conditioning, light, telephone, and communications, and all garbage, landscaping, janitorial,
security, and other services that are necessary or convenient for Lessee's use of the Property. Lessee
hereby acknowledges that NCTD shall have no obligation whatsoever to provide guard service or other
security measures for the benefit of the Property. Lessee assumes all responsibility for the protection
of Lessee, its agents, and invitees and the property of Lessee and of Lessee's agents and invitees from
acts of third parties.
ARTICLE 12 – ASSIGNMENT AND SUBLETTING
12. Assignment and Subletting.
12.1. NCTD's Consent Required. Lessee shall not voluntarily or by operation of law assign, transfer,
mortgage, sublet or otherwise transfer or encumber all or any part of Lessee's interest in the
Lease or in the Property, without NCTD's prior written consent. Any attempted assignment,
transfer, mortgage, encumbrance or subletting without such consent shall be void, and shall
constitute a material default and breach of this Lease without the need for notice to Lessee
under section 13.1. "Transfer" within the meaning of this Article 12 shall include the transfer or
transfers aggregating: (a) if Lessee is a corporation, more than twenty-five percent (25%) of the
voting stock of such corporation, or (b) if Lessee is a partnership, more than twenty-five percent
(25%) of the profit and loss participation in such partnership. Article 12 does not apply to leases
or subleases by Lessee of the Depot Building.
12.2. Lessee Affiliate. Notwithstanding the provisions of section 12.1 hereof, Lessee may assign or
sublet the Property, or any portion thereof, without NCTD's consent, to any corporation which
controls, is controlled by or is under common control with Lessee, or to any corporation resulting
from the merger or consolidation with Lessee, or to any person or entity which acquires all the
assets of Lessee as a going concern of the business that is being conducted on the Property,
all of which are referred to as "Lessee Affiliate," provided that before such assignment shall be
effective, (a) the proposed assignee shall assume, in full, the obligations of Lessee under this
Lease and (b) NCTD shall be given written notice of such assignment and assumption. Any
such assignment shall not, in any way, affect or limit the liability of Lessee under the terms of
this Lease even if after such assignment or subletting the terms of this Lease are materially
changed or altered without the consent of Lessee, the consent of whom shall not be necessary.
12.3. Terms and Conditions Applicable to Assignment and Subletting.
12.3.1. NCTD reserves the right to condition any approval to assign or sublet the Lease upon
NCTD's determination that (a) the proposed assignee or sub-lessee will conduct a
business on the Property of a quality substantially equal to that of Lessee, and (b) the
proposed assignee or sub-lessee is at least as financially responsible as Lessee was at
the time of the execution of this Lease or is of the date of such assignment or subletting,
whichever is greater.
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12.3.2. Regardless of NCTD's consent, no assignment or subletting shall release Lessee or
Lessee's obligations hereunder or alter the primary liability of Lessee to pay the Rent
and other sums due NCTD hereunder and to perform all other obligations to be
performed by Lessee hereunder.
12.3.3. NCTD may accept rent from any person other than Lessee pending approval or
disapproval of such assignment.
12.3.4. Neither a delay in the approval or disapproval of such assignment or subletting, nor the
acceptance of rent, shall constitute a waiver or estoppel of NCTD's right to exercise its
remedies for the breach of any of the terms of conditions of this Article 12 of this Lease.
12.3.5. If Lessee's obligations under this Lease have been guaranteed by third parties, then an
assignment or sublease, and NCTD's consent thereto, shall not be effective unless the
guarantors give their written consent to such assignment or sublease and the terms
thereof.
12.3.6. The consent by NCTD to any assignment or subletting shall not constitute consent to
any subsequent assignment or subletting by Lessee or to any subsequent or successive
assignment or subletting by the sub-lessee. However, NCTD may consent to
subsequent sublettings and assignments of the sublease or any amendments or
modifications thereto without notifying Lessee or anyone else liable on the Lease or
sublease and without obtaining their consent and such action shall not relieve such
persons from liability under the this Lease or the sublease; however, such persons shall
not be responsible to the extent any such amendment or modification enlarges or
increases the obligations of the Lessee or sub-lessee under this Lease or such
sublease.
12.3.7. In the event of any default under this Lease, NCTD may proceed directly against
Lessee, any guarantors, or anyone else responsible for the performance of this Lease,
including the sub-lessee, without first exhausting NCTD's remedies against any other
person or entity responsible therefor to NCTD, or any security held by NCTD or Lessee.
12.3.8. NCTD's written consent to any assignment or subletting of the Property by Lessee shall
not constitute an acknowledgment that no default then exists under this Lease of the
obligations to be performed by Lessee nor shall such consent be deemed a waiver of
any then existing default, except as may be otherwise stated by NCTD at the time.
12.3.9. The discovery of the fact that any financial statement relied upon by NCTD in giving its
consent to an assignment or subletting was materially false shall, at NCTD's election,
render NCTD's consent null and void.
12.4. NCTD's Expenses. In the event Lessee shall assign or sublet the Property or request the
consent of NCTD to any assignment or subletting or if Lessee shall request the consent of NCTD
for any act Lessee proposes to do then Lessee shall pay NCTD's processing fee and all
reasonable or actual costs and expenses incurred in connection therewith, including attorneys',
architects', engineers' or other consultants' fees.
ARTICLE 13 – DEFAULT AND REMEDIES
13. Default; Remedies.
13.1. Lessee's Default. The occurrence of any of the following shall constitute a default by Lessee:
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13.1.1. The failure of Lessee to pay Annual Rent when or any other amounts due to NCTD
hereunder, and said default shall continue for ten (10) days after the same becomes
due.
13.1.2. The abandonment and vacation of the Property.
13.1.3. The bankruptcy or insolvency of Lessee, Lessee's making of an assignment for the
benefit of creditors or institution of a proceeding under the Bankruptcy Act in which
Lessee is the bankrupt; or, if Lessee is a partnership or consists of more than one
person or entity, the occurrence of any of the foregoing with respect to any partner of
the partnership or other person or entity.
13.1.4. The levy of a writ of attachment or execution on this Lease.
13.1.5. The appointment of a receiver with authority to take possession of the Property in any
proceeding or action to which Lessee is a party.
13.1.6. Any assignment or subletting by Lessee in violation of the provisions of Article 12 of this
Lease.
13.1.7. The failure by Lessee to perform any other provision of this Lease if the failure to perform
is not cured within thirty (30) days after notice has been given to Lessee, or, if the default
cannot reasonably be cured within thirty (30) days, then within such additional time
period, not to exceed one hundred twenty (120) days, as is reasonably necessary to
cure such default provided that Lessee commences to cure the default within the thirty
(30) day period and diligently and in good faith continues to cure the default.
13.2. NCTD's Remedies. NCTD shall have the following remedies if Lessee commits a default.
These remedies are not exclusive; they are cumulative in addition to any remedies now or later
allowed by law.
13.2.1. NCTD may continue this Lease in full force and effect, and the Lease will continue in
effect until the Expiration Date as long as NCTD does not terminate Lessee's right to
possession, and NCTD shall have the right to collect Rent when due. During the period
Lessee is in default, NCTD can enter the Property and relet them, or any part of them,
to third parties for Lessee's account. Lessee shall be liable immediately to NCTD for all
costs NCTD incurs in reletting the Property, including, without limitation, brokers'
commissions, expenses of remodeling the Property required by the reletting, and like
costs. Reletting can be for a period shorter or longer than the remaining term of this
Lease. Lessee shall pay to NCTD the Rent due under this Lease on the dates the Rent
is due, less the rent NCTD receives from any reletting. No act by NCTD allowed by this
Article shall terminate this Lease unless NCTD notifies Lessee that NCTD elects to
terminate this Lease. After Lessee's default and for as long as NCTD does not terminate
Lessee's right to possession of the Property, if Lessee obtains NCTD's consent Lessee
shall have the right to assign or sublet its interest in this Lease, but Lessee shall not be
released from liability. NCTD's consent to a proposed assignment or subletting shall
not be unreasonably withheld. If NCTD elects to relet the Property as provided in this
Article, rent that NCTD receives from reletting shall be applied to the payment of: (1)
any indebtedness from Lessee to NCTD other than Rent due from Lessee; (2) all costs,
including for maintenance, incurred by NCTD in reletting; and (3) Rent due and unpaid
under this Lease. After deducting the payments referred to in this Article, any sum
remaining from the rent NCTD receives from reletting shall be held by NCTD and
applied in payment of future Rent as rent becomes due under this Lease. In no event
shall Lessee be entitled to any excess rent received by NCTD. If, on the date Rent is
due under this Lease, the rent received from the reletting is less than the Rent due on
that date, Lessee shall pay to NCTD, in addition to the remaining Rent due, all costs,
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including for maintenance, NCTD incurred in reletting that remain after applying the rent
received from the reletting as provided in this Article.
13.2.2. NCTD may terminate Lessee's right to possession of the Property at any time. No act
by NCTD other than giving notice to Lessee shall terminate this Lease. Acts of
maintenance, efforts to relet the Property, or the appointment of a receiver on NCTD's
initiative to protect NCTD's interest under this Lease shall not constitute a termination
of Lessee's right to possession. On termination, NCTD has the right to recover from
Lessee:
(a) The worth, at the time of termination, of the unpaid rent that had been earned at the
time of termination of this Lease;
(b) The worth, at the time of termination, of the amount by which the unpaid rent that would
have been earned after the date of termination of this Lease until the time of award
exceeds the amount of the loss of rent that Lessee proves could have been reasonably
avoided;
(c) The worth, at the time of the termination, of the amount by which the unpaid rent for the
balance of the Lease term after the time of award exceeds the amount of the loss of
rent that Lessee proves could have been reasonably avoided;
(d) Any other amount, and court costs, necessary to compensate NCTD for all detriment
proximately caused by Lessee's default; and
(e) "The worth, at the time of the termination," as used in (a) and (b) of this section 13.2.2,
is to be computed by allowing interest at the maximum rate an individual is permitted by
law to charge. "The worth, at the time of the termination," as referred to in (c) of this
section 13.2.2, is to be computed by discounting the amount at the discount rate of the
Federal Reserve Bank of San Francisco at the time of the award, plus one percent (1%).
13.2.3. NCTD, at any time after Lessee commits a default, may, but shall have no obligation to
cure the default at Lessee's cost. If NCTD at any time, by reason of Lessee's default,
pays any sum or does any act that requires the payment of any sum, the sum paid by
NCTD shall be due immediately from Lessee to NCTD at the time the sum is paid, and
if paid at a later date shall bear interest at the maximum rate an individual is permitted
by law to charge from the date the sum is paid by NCTD until NCTD is reimbursed by
Lessee. The sum, together with interest on it, shall be Additional Rent.
13.3. NCTD's Default. NCTD shall be in default under this Lease if NCTD fails or refuses to perform
any provision of this Lease that NCTD is obligated to perform if the failure to perform is not cured
within thirty (30) days after notice of the default has been given by Lessee to NCTD. If the
default cannot reasonably be cured within thirty (30) days, NCTD shall not be in default under
this Lease if NCTD commences to cure the default within the thirty (30) day period and diligently
and in good faith continues to cure the default. If NCTD is in default under this Lease and, as a
consequence, Lessee recovers a money judgment against NCTD, the judgment shall be limited
to the annual rent amount at the time of judgement or termination.
13.4. Delays in Performance; Force Majeure. The time within which the Parties hereto shall be
required to perform any act under this Lease, other than the payment of money, shall be
extended by a period of time equal to the number of days during which performance of such act
is delayed due to an act of God, fire, earthquake, flood, explosion, war, invasion, insurrection,
riot, mob violence, or any other cause similar to the foregoing.
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ARTICLE 14 - CONDEMNATION
14. Condemnation. If the whole of the Property is acquired or condemned by eminent domain, inversely
condemned, or sold in lieu of condemnation, for any public or quasi-public use or purpose ("Eminent
Domain"), then this Lease shall terminate as of the date of title vesting in such proceeding and the Rent
shall be adjusted to the date of termination. If any part of the Property is acquired or condemned by
Eminent Domain and such partial condemnation renders the Property unusable for the business of the
Lessee, then this Lease shall terminate as of the date of title vesting in such proceeding and Rent shall
be adjusted to the date of termination. If such condemnation is not extensive enough to render the
Property unusable for the business of Lessee, then this Lease shall continue in full force and effect,
except that after the date of such title vesting the Annual Rent shall be reduced to the extent that the
area of the Property is reduced.
14.1. Division of Condemnation Award. If the Property and improvements on the Property are
acquired or condemned in whole or in part by Eminent Domain, then the award paid for such
condemnation shall be the property of NCTD, whether such award shall be made as
compensation for diminution in value of the leasehold or for the taking of the fee, or as severance
damages.
14.2. Lessee's Award. Lessee shall have the right to claim and recover from the condemning
authority, but not from NCTD, such compensation as may be separately awarded or recoverable
by Lessee's own right on account of any and all costs or loss (including loss of business) to
which Lessee might be put in removing Lessee's merchandise, furniture, fixtures, leasehold
improvements, and equipment and moving Lessee's business to a new location, provided that
Lessee's award shall in no event reduce the amount of the award paid to NCTD.
14.3. Waiver of CCP 1265.130. Each party waives the provisions of Code of Civil Procedure §
1265.130 allowing either party to petition the superior court to terminate this Lease in the event
of a partial taking of the Property.
ARTICLE 15 – BROKERS’ FEES
15. Brokers' Fees. Lessee and NCTD each represent and warrant to the other that neither has had any
dealings with any person, firm, broker or finder in connection with the negotiation of this Lease and/or
the consummation of the transaction contemplated hereby, and no broker or other person, firm or entity
is entitled to any commission or finder's fee in connection with this Lease or transaction. Lessee and
NCTD do each hereby indemnify and hold the other harmless from and against any costs, expenses,
attorneys' fees or liability for compensation or charges which may be claimed by any broker, finder or
other similar party by reason of any dealings or actions of the indemnifying party.
ARTICLE 16 – SURRENDER OF PROPERTY
16. Surrender of Property. On the last day of the term of this Lease, or on any sooner termination, Lessee
shall surrender the Property to NCTD in the same condition as received, ordinary wear and tear
excepted, clean and free of debris. Any damage or deterioration of the Property shall not be deemed
ordinary wear and tear if the same could have been prevented by good maintenance practices by
Lessee. Lessee shall also remove all of Lessee's trade fixtures, alterations, furnishings, equipment,
and personal property from the Property and shall repair any damage to the Property occasioned by
the installation or removal of Lessee's trade fixtures, alterations, furnishings, equipment, and personal
property. On the expiration of this Lease, Lessee shall surrender to NCTD the Property and all
improvements on the Property in good condition within the time periods stated in this Article.
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ARTICLE 17 – SALE, TRANSFER OR ENCUMBRANCE OF PROPERTY
17. Sale, Transfer, or Encumbrance of Property.
17.1. Sale or Transfer. If NCTD sells or transfers all or any portion of the Property, NCTD, on
consummation of the sale or transfer, shall be released from any liability thereafter accruing
under this Lease. If any Deposit or prepaid Rent has been paid by Lessee, NCTD can transfer
the Deposit or prepaid Rent to NCTD's successor and on such transfer NCTD shall be
discharged from any further liability in reference to the Deposit or prepaid Rent.
17.2. Encumbrance of Property by NCTD. This Lease is and shall be prior to any encumbrance
recorded after the date of this Lease affecting NCTD's interest in the Property. If, however, a
lender requires that this Lease be subordinate to any such encumbrance, this Lease shall be
subordinate to that encumbrance if NCTD first obtains from the lender a written agreement that
provides that, as long as Lessee performs Lessee's obligations under this Lease, no foreclosure
of, deed given in lieu of foreclosure of, or sale under the encumbrance, and no steps or
procedures taken under the encumbrance, shall affect Lessee's rights under this Lease. Lessee
shall attorn to any purchaser at any foreclosure sale, or to any grantee or transferee designated
in any deed given in lieu of foreclosure. Lessee shall execute the written agreement and any
other documents required by the lender to accomplish the purposes of this Article.
17.3. Estoppel Certificate. Lessee, within ten (10) days after notice from NCTD, shall execute and
deliver to NCTD or NCTD's designee a certificate stating that this Lease is unmodified and in
full force and effect, or in full force and effect as modified, stating the modifications. The
certificate also shall state the amount of Annual Rent, the dates to which the Rent has been paid
in advance, and the amount of any Deposit or prepaid Rent. If Lessee's fails to deliver the
certificate within the ten (10) days, Lessee irrevocably constitutes and appoints NCTD as
Lessee's special attorney-in-fact to execute and deliver the certificate to any third party, and
such third party shall be entitled to rely upon the certificate executed by NCTD.
17.4. Relocation Assistance Benefits. Lessee is informed and acknowledges the following:
17.4.1. By entering into this Lease and becoming a tenant of NCTD, Lessee may become
entitled to receipt of “relocation assistance benefits” (“Relocation Benefits”) pursuant to
the Federal Uniform Relocation Assistance Act (42 U.S.C. § 4601 et seq.) and/or the
California Relocation Assistance Law (Cal. Gov. Code § 7270 et seq.) (collectively, the
“Relocation Statutes”), should NCTD at some time make use of the Property in such a
way as to “displace” Lessee from the Property. Pursuant to the Relocation Statutes,
NCTD may then become obligated to make payments to Lessee even where the
displacement of Lessee does not otherwise constitute a breach or default by NCTD of
its obligations pursuant to this Lease.
Under the Relocation Statutes in effect as of the Effective Date of this Lease, Relocation Benefits
may include payment to a “displaced person” of (i) the actual and reasonable expense
of moving himself or herself and a family, business, or farm operation, including
personal property, (ii) the actual direct loss of reestablishing a business or farm
operation, but not to exceed twenty-five thousand dollars ($25,000), or (iii) payment in
lieu of moving expenses of not less than one thousand dollars ($1,000) or more than
forty thousand dollars ($40,000).
17.4.2. Lessee’s Waiver and Release of Relocation Benefits. In consideration of NCTD’s
agreement to enter into this Lease, Lessee waives any and all rights it may now have,
or may subsequently obtain, to Relocation Benefits arising out of NCTD’s assertion or
exercise of its contractual rights to terminate this Lease pursuant to its terms, whether
or not the rights are contested by Lessee or any other entity, and releases NCTD from
any liability for payment of Relocation Benefits. Lessee does not waive its rights to
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Relocation Benefits to the extent that Lessee’s entitlement to Relocation Benefits may
arise out of any condemnation or pre-condemnation actions taken by NCTD or any other
public agency with respect to the Premises. Lessee shall in the future execute any
further documentation of the release and waiver provided by this Article as reasonably
required by NCTD.
ARTICLE 18 - NOTICE
18. Notices. Any notice required or permitted to be given hereunder shall be in writing and may be given
by personal delivery or by certified or registered mail, and shall be deemed sufficiently given if delivered
or addressed to Lessee at the address in section 1.1 of the Basic Lease Provisions or to NCTD 810
Mission Avenue, Oceanside, CA 92054, Attention: Real Estate Department. Mailed notices shall be
deemed given upon actual receipt at the address required, or forty-eight (48) hours following deposit in
the mail, postage prepaid, whichever first occurs. Either party may by notice to the other specify a
different address for notice purposes. A copy of all notices required or permitted to be given to NCTD
hereunder shall be concurrently transmitted to such party or parties at such addresses as NCTD may
from time to time hereafter designate by notice to Lessee.
ARTICLE 19 - NONDISCRIMINATION
19. Nondiscrimination. Lessee herein covenants by and for itself, its successors and assigns, and all
persons claiming under and through Lessee, and this Lease is made and accepted and subject to the
following conditions: There shall be no discrimination against or segregation of any person or group of
persons, on account of sex, marital status, race, color, religion, creed, ancestry, disability, medical
condition, genetic information, sexual orientation, gender identity or national origin in the leasing,
subleasing, renting, transferring, use, occupancy, tenure, or enjoyment of Property nor shall Lessee
itself, or any person claiming under or through Lessee, establish or permit such practice or practices of
discrimination or segregation with reference to the selection, location, number, or occupancy of
Lessees, lessees, or vendees in the Property.
ARTICLE 20 – GENERAL PROVISIONS
20. General Provisions.
20.1. Waiver. No delay or omission in the exercise of any right or remedy of NCTD on any default
by Lessee shall impair such a right or remedy or be construed as a waiver. The receipt and
acceptance by NCTD of delinquent Rent shall not constitute a waiver of any other default; it
shall constitute only a waiver of timely payment for the particular Rent payment involved.
NCTD's consent to or approval of any act by Lessee requiring NCTD's consent or approval
shall not be deemed to waive or render unnecessary NCTD's consent to or approval of any
subsequent act by Lessee. Any waiver by NCTD of any default must be in writing and shall
not be a waiver of any other default concerning the same or any other provision of this Lease.
20.2. Continuing Control. Lessee acknowledges that the Property is used in connection with NCTD’s
public purpose and other services to the public, and agrees that such uses by NCTD are
superior in all respects to all uses by Lessee. Lessee's use of the Property must not in any
way interfere with NCTD's continuing control over the Property or NCTD's expressed continued
ability to carry out its functions. NCTD shall have the right without further liability to Lessee to
terminate this Lease upon six-months written notice from NCTD (or less if six-months notice
cannot be reasonably given)in order to maintain continuing control over the Property or NCTD’s
expressed continued ability to carry out its functions.
20.3. Time of Essence. Time is of the essence for each and every provision of this Lease.
20.4. Successors. This Lease shall be binding on and inure to the benefit of the parties and their
successors and assigns, except as may otherwise be provided in this Lease.
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20.5. Modification. This Lease cannot be amended or modified except by a written agreement
signed by both parties.
20.6. Singular and Plural. When required by the context of this Lease, the singular shall include
the plural.
20.7. Joint and Several Obligations. If NCTD or Lessee is more than one person or entity, the
obligations imposed on that party shall be joint and several.
20.8. Severability. The unenforceability, invalidity, or illegality of any provision shall not render the
other provisions unenforceable, invalid, or illegal.
20.9. Captions. The captions, headings and index appearing in this Lease are inserted for
convenience only and in no way define, limit, construe, or describe the scope or intent of the
provisions of this lease.
20.10. Lease Administration. This Lease shall be administered on behalf of NCTD or a designee
(collectively, the “NCTD Lease Administrator”), and on behalf of Lessee by the City of Carlsbad
Real Estate Manager, or by another person designated in writing by Lessee (collective the
“Lessee’s Lease Administrator”).
20.11. NCTD Approval. Except where stated in this Lease to the contrary, the phrases “NCTD
approval”, and “NCTD written approval” or similar phrases shall mean approval of NCTD’s
Lease Administrator.
20.12. Lessee’s Lease Administration. Lessee confirms that Lessee’s Lease Administrator has
been given full operational responsibility for compliance with the terms of this Lease. Lessee
shall provide NCTD with written schedule of its normal hours of business operations on the
Premises, and Lessee’s Lease Administrator or a representative designated by Lessee shall
be (i) available to NCTD on a twenty-four (24) hour a day, seven (7) days a week, basis, and
(ii) present on the Premises during Lessee’s normal business hours, to resolve problems or
answer questions pertaining to this Lease and Lessee’s operations on the Premises.
20.13. Business Days. The term “business days” as used in this Lease means any calendar day
other than a Saturday, Sunday, or official NCTD holiday.
20.14. Cumulative Remedies. If a default under this Lease occurs, each party’s remedies shall be
limited to those remedies set forth in this Lease. The remedies under this Lease are cumulative
and not exclusive of any other remedies under this Lease to which the non-defaulting party
may be entitled.
20.15. Entire Agreement. This Lease, together with all attached addenda, exhibits and riders
attached to this Lease, constitutes the entire agreement between NCTD and Lessee with
respect to the subject matter of this Lease, and all prior or contemporaneous agreements,
understandings and representations, oral or written, are superseded.
20.16. Governing Law. This Lease shall be governed, construed and enforced in accordance with
the laws of the State of California.
20.17. Public Document. Lessee acknowledges that this Lease and all documents relating hereto
are “public records” (as defined in section 6252(e) of the California Government Code), except
for any documents relating to Tenant’s financial condition or otherwise exempt from such status
pursuant to law, and that public records, with limited exemptions, are subject to public
disclosure pursuant to the provisions of California Government Code, commencing with section
6250.
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20.18. Interpretation. The language of this Lease shall be construed simply according to its plain
meaning and shall not be construed for or against either party.
20.19. Authority. If Lessee is a corporation, trust, or general or limited partnership, Lessee, and each
individual executing this Lease on behalf of such entity represent and warrant that such
individual is duly authorized to execute and deliver this Lease on behalf of said entity. If Lessee
is a corporation, trust or partnership, Lessee shall, deliver to NCTD evidence of such authority
satisfactory to NCTD.
20.20. Counterparts. This instrument may be executed in any number of counterpart copies, each of
which counterpart copy shall be deemed an original for all purposes.
NCTD: LESSEE:
North County Transit District City of Carlsbad
By: By:
Name: Tracey Foster Name: Scott Chadwick
Title: Chief Development Officer Title: City Manager
Date: Date:
Approved as to Form and Legality
By:________________________________
Lori A. Winfree
General Counsel
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EXHIBIT B – INSURANCE REQUIREMENTS
Without limiting Lessee’s indemnification of NCTD as provided herein, Lessee shall provide and
maintain at its own expense during the term of this Lease the below listed and described policies of
insurance covering its operations hereunder. Evidence of such insurance satisfactory to NCTD along
with required endorsements will be delivered to NCTD concurrent with execution of this Lease. Such
evidence shall include certificate of insurance (Accord Form 25-S or equivalent). All evidence of
insurance shall be issued by a properly authorized officer, agent or qualified representative of the insurer
and shall certify the names of the insured, any additional primary insureds, where appropriate, the type
and amount of the insurance coverage, the location and operations to which the insurance applies and
the expiration date.
1. Commercial and General Liability: Lessee shall provide and maintain the following commercial
and general liability insurance:
A. Coverage for commercial general liability insurance shall be at least as broad as the Insurance
Services Office Commercial General Liability (occurrence form CG 0001) coverage.
B. Lessee shall maintain limits of no less than two million dollars ($2,000,000) per occurrence and
four million dollars ($4,000,000) aggregate limits for bodily injury, personal injury and property
damage, including injury or damage. The general liability policies are to be endorsed to contain
the following provisions:
a. NCTD, its Board of Directors, officers, employees, agents and volunteers are to be
covered as additional insureds as respects liability arising out of the Property/Right-of-
Way Leased by Lessee; The coverage shall contain no special limitations on the scope
of protection afforded to NCTD, its directors, officers, employees, agents and volunteers.
b. For any claims related to this Lease, Lessee’s insurance shall be primary insurance as
respects to NCTD, its Board of Directors, officers, employees, agents and volunteers.
Any insurance, pooled coverage or self-insurance maintained by NCTD, its directors,
officers, employees, agents and volunteers shall not be contributory.
c. Lessee’s insurance shall apply separately to each insured against whom claim is made or
suit is brought, except with respect to the limits of the insurer’s liability.
d. The liability insurance shall indemnify the Lessee and its contractors against loss from
liability imposed by law upon, or assumed under contract by the Lessee or its contractors
for damages on account of such bodily injury (including death), property damage,
personal injury and completed operations and products liability.
e. Any failure to comply with reporting or other provisions of the policies including breaches
of warranties shall not affect coverage provided to NCTD, its Board of Directors, officers,
employees, contractors, agents or volunteers.
f. The insurance shall be provided on a policy form written by underwriters through an
agency satisfactory to NCTD, which includes a cross-suit clause, and covers bodily injury
and property damage liability, owned and non-owned vehicles and equipment, blanket
contractual liability and completed operations liability.
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2. Railroad Protective Liability:
A. The Lessee shall obtain a railroad protective liability policy for work done within fifty (50) feet of
railroad tracks. The standard limits shall be three million dollars ($3,000,000) per occurrence limit
and six million dollars ($6,000,000) aggregate. NCTD reserves the right to increase these limits,
depending on the scope of work related to the Lease.
B. All work requiring railroad protective liability insurance shall name in the endorsement and
schedules as additional insureds the following entities, including their directors, officers, agents
and employees as their interests may appear:
a. North County Transit District (NCTD)
b. Burlington Northern Santa Fe Railway (BNSF)
c. National Railroad Passenger Corporation (AMTRAK)
3. Automobile Liability: Coverage for automobile liability insurance shall be at least as broad as
Insurance Services Office Automobile Liability Coverage (Form CA 0001). Limits shall be not less
than two million dollars ($2,000,000) for bodily injury and property damage each accident limit from
automobiles owned, leased, hired or borrowed by Lessee. The insurance shall indemnify against
loss from liability imposed by law for damages on account of bodily injury, property damage, and
personal injury. The automobile liability policy shall cover all owned, non-owned, leased and hired
automobiles.
4. Workers Compensation and Employer’s Liability: Lessee and its contractors and assigns shall
cover or under the applicable statutory California State or Federal laws relating to workers’
compensation insurance, all of their employees working on or about the Property/Right-of-Way, and
Lessee shall defend, protect and hold harmless NCTD, its Board of Directors, officers, employees,
agents and volunteers from and against all claims, suits, and actions arising from any failure of the
Lessee or any of Lessee’s contractors or assigns to maintain such insurance.
A. Lessee shall provide employer’s liability insurance in the amount of one million ($1,000,000) per
occurrence for bodily injury and disease.
B. Lessee shall provide NCTD with a certificate of Workers’ Compensation and Employer’s liability
insurance coverage.
C. Such insurance may include an insurer’s waiver of subrogation in favor of NCTD and will be in a
form and with insurance companies reasonably satisfactory to NCTD.
5. Property Insurance is Required: Lessee shall maintain property insurance covering the full
replacement cost of Lessee's personal property, fixtures, equipment, and improvements against the
hazards of fire, extended coverage/vandalism and malicious mischief, flood and other property-
related losses. Deductible limits should be no more than five thousand dollars ($5,000). However,
NCTD reserves the right to modify deductible limits.
6. All policies required shall be issued by insurance companies who are rated not less than "A VII" by
the latest A. M. Best Company Key Rating Guide, who are authorized to transact business in
California.
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7. NCTD makes no representation that the limits or forms of coverage of insurance specified in this
section are adequate to cover Lessee's property or obligations under this Lease. NCTD reserves
the right to raise or lower limit requirements at the time of request, based upon the scope of work.
8. Prior to execution of this Lease, Lessee shall file with NCTD a certificate of insurance signed by the
insurer’s representative. Such evidence shall also include confirmation that coverage includes or
has been modified to include required provisions as set forth herein. Lessee shall upon the
reasonable demand of NCTD, deliver to NCTD such policy or policies of insurance. Each
insurance policy required by this clause shall state or be endorsed to state that coverage shall not
be amended or cancelled, except after thirty (30) days prior notice by U.S. mail has been given to
NCTD.
9. If any insurance coverage is canceled or reduced, Lessee shall, within ten (10) days after receipt of
written notice of such cancellation or reduction of coverage, file with NCTD a certificate showing
that the required insurance has been reinstated or provided through another insurance company or
companies, and said policy shall be submitted for approval as herein provided. At least fifteen (15)
days prior to the expiration of any such policy, a certificate, showing that the insurance coverage
has been renewed or extended, shall be filed with NCTD.
10. Every contractor or subcontractor of Lessee entering upon, using or performing any work upon the
Right-of-Way/Property by or on behalf of Lessee shall provide evidence of insurance required
herein prior to entering upon the Right-of-Way/Property.
11. NCTD reserves the right to increase the limits for the insurance required herein to amounts
recommended by NCTD’s insurance risk manager or insurance representative.
12. Notwithstanding any other provision of this Lease, Lessee may self-insure for any risk set forth in
this section in the manner and to the extent that Lessee self-insures for similar risks with respect to
its operations, equipment and property. The manner in which such self-insured is provided and the
extent of such self-insurance shall be set forth in a letter of self-insurance, delivered to NCTD and
signed by an authorized representative of Lessee, which fully describes the self-insurance program
and how the program covers the risks set forth herein. Insurance provided by a joint powers
authority or insurance pool shall be considered self-insurance for the purpose of this paragraph. If,
at any time during the term of this Lease, Lessee elects not to self-insure, Lessee shall comply with
all applicable provisions herein to the extent Lessee does not so self-insure. NCTD reserves the
right to request Lessee financial statements for review prior to accepting self-insurance limits.
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EXHIBIT C
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