Cupertino City Council
February 6, 2024

CITY OF CUPERTINO

CITY COUNCIL
AGENDA
10350 Torre Avenue, Council Chamber and via Teleconference Tuesday, February 6, 2024
6:45 PM
Televised Regular Meeting (6:45)

IN-PERSON AND TELECONFERENCE / PUBLIC PARTICIPATION INFORMATION Members of the public wishing to observe the meeting may do so in one of the following ways:
1) Attend in person at Cupertino Community Hall, 10350 Torre Avenue. 2) Tune to Comcast Channel 26 and AT&T U-Verse Channel 99 on your TV. 3) The meeting will also be streamed live on and online at www.Cupertino.org/youtube and www.Cupertino.org/webcast
Members of the public wishing to comment on an item on the agenda may do so in the following ways:
1) Appear in person at Cupertino Community Hall.
2) E-mail comments by 4:00 p.m. on Tuesday, February 6 to the Council at [email protected]. These e-mail comments will also be forwarded to Councilmembers by the City Clerk’s office before the meeting and posted to the City’s website after the meeting.

Members of the public may provide oral public comments during the Meeting as follows:

Oral public comments will be accepted during the meeting. Comments may be made during “oral communications” for matters not on the agenda, and during the public comment period for each agenda item.

Oral public comments may be made during the public comment period for each agenda item.

Members of the audience who address the City Council must come to the lectern/microphone, and are requested to complete a Speaker Card and identify themselves.

1 CC 02-06-2024
1 of 723
City Council Agenda February 6, 2024
Completion of Speaker Cards and identifying yourself is voluntary and not required to attend the meeting or provide comments.
3) Teleconferencing Instructions
To address the City Council, click on the link below to register in advance and access the meeting:

Online
Register in advance for this webinar:
https://cityofcupertino.zoom.us/webinar/register/WN_GriZsTBcRS-M3GnNImQKHQ Phone
Dial: 669-900-6833 and enter Webinar ID: 958 8283 2855 (Type *9 to raise hand to speak, *6 to unmute yourself). Unregistered participants will be called on by the last four digits of their phone number.

Or an H.323/SIP room system:

H.323:
162.255.37.11 (US West)
162.255.36.11 (US East)
Meeting ID: 958 8283 2855
SIP: [email protected]
After registering, you will receive a confirmation email containing information about joining the webinar.

Please read the following instructions carefully:

1. You can directly download the teleconference software or connect to the meeting in your internet browser. If you are using your browser, make sure you are using a current and up-to-date browser: Chrome 30+, Firefox 27+, Microsoft Edge 12+, Safari 7+. Certain functionality may be disabled in older browsers, including Internet Explorer.

2. You will be asked to enter an email address and a name, followed by an email with instructions on how to connect to the meeting. Your email address will not be disclosed to the public. If you wish to make an oral public comment but do not wish to provide your name, you may enter “Cupertino Resident” or similar designation.

3. When the Mayor calls for the item on which you wish to speak, click on “raise hand,” or, if you are calling in, press *9. Speakers will be notified shortly before they are called to

2 CC 02-06-2024
2 of 723
City Council Agenda February 6, 2024
speak.

4. When called, please limit your remarks to the time allotted and the specific agenda topic.

5. Members of the public that wish to share a document must email [email protected] prior to speaking. These documents will be posted to the City’s website after the meeting.

CALL TO ORDER

PLEDGE OF ALLEGIANCE

ROLL CALL

CLOSED SESSION REPORT

CEREMONIAL ITEMS

1. Subject: Recognition of STEM Winners from the City of Cupertino who participated in the Santa Clara County 2023 Synopsys Championship Science Fair Recommended Action: Recognize STEM Winners from the City of Cupertino who participated in the Santa Clara County 2023 Synopsys Championship Science Fair A - Certificates

2. Subject: Recognition of February as Black History Month Recommended Action: Recognize February as Black History Month

POSTPONEMENTS AND ORDERS OF THE DAY

ORAL COMMUNICATIONS
This portion of the meeting is reserved for persons wishing to address the Council on any matter within the jurisdiction of the Council and not on the agenda for discussion, including informational items. The total time for Oral Communications will ordinarily be limited to one hour. Individual speakers are limited to three (3) minutes. As necessary, the Chair may further limit the time allowed to individual speakers, or reschedule remaining comments to the end of the meeting on a first come first heard basis, with priority given to students. In most cases, State law will prohibit the Council from discussing or making any decisions with respect to a matter not listed on the agenda. A councilmember may, however, briefly respond to statements made or questions posed by speakers. A councilmember may also ask a question for clarification, provide a reference for factual information, request staff to report back concerning a matter, or request that an item be added to a future City Council agenda in response to public comment.

CONSENT CALENDAR (Items 3-10)

3 CC 02-06-2024
3 of 723
City Council Agenda February 6, 2024
Items appearing on the Consent Calendar are considered routine City business and may be approved by one motion. Typical items may include meeting minutes, awards of contracts, the ratification of accounts payable, and second readings of ordinances. Any member of the Council may request to have an item removed from the Consent Calendar based on the rules set forth in the City Council Procedures Manual. Members of the public may provide input on one or more consent calendar items when the Mayor asks for public comments on the Consent Calendar.

3. Subject: Approve the December 19, 2023 (Closed Session) City Council minutes Recommended Action: Approve the December 19, 2023 (Closed Session) City Council minutes
A - Draft Minutes

4. Subject: Approve the January 12, 2024 City Council minutes Recommended Action: Approve the January 12, 2024 City Council minutes A - Draft Minutes

5. Subject: Approve the January 17, 2024 City Council minutes Recommended Action: Approve the January 17, 2024 City Council minutes A - Draft Minutes

6. Subject: Approve the January 29, 2024 (Closed Session) City Council minutes Recommended Action: Approve the January 29, 2024 (Closed Session) City Council minutes
A - Draft Minutes

7. Subject: Second reading of Municipal Code Amendment to Chapter 19.76 to allow privately operated educational uses and privately operated public serving uses in the BA zoning district. (Application No. MCA-2023-003; Applicant: City of Cupertino; Location: BA-zoned (Public Building) properties in Cupertino) Recommended Action: Conduct the second reading and enact Ordinance No. 23-2253:
“An Ordinance of the City Council of the City of Cupertino to amend Cupertino Municipal Code Chapter 19.76 (Table 19.76.030) to allow privately operated educational uses and privately operated public serving uses in the BA zoning district”.

Staff Report
A - Draft Ordinance

8. Subject: Second reading of amendments to Municipal Code Chapter 19.12, Chapter

19.28 and Chapter 19.112 regarding Two-Story Permit and Accessory Dwelling Unit (ADU) laws. (Application No. MCA-2023-002; Applicant: City of Cupertino; Location:

City-wide)

4 CC 02-06-2024
4 of 723
City Council Agenda February 6, 2024
Recommended Action: Conduct the second reading and enact Ordinance No. 23-2254:
“An Ordinance of the City Council of the City of Cupertino to amend Municipal Code Chapter 19.12, Chapter 19.28 and Chapter 19.112 regarding Two-Story Permit and Accessory Dwelling Unit (ADU) Laws.”
Staff Report
A – Draft Ordinance

9. Subject: Exclusive Negotiation Agreement (ENA) with an affordable housing developer on a City owned parcel within the Mary Avenue right-of-way (APN:
326-27-053)
Recommended Action: Consider the Draft Agreement attached (Attachment A) and decide whether to enter into the Agreement.

Staff Report
A – Draft Exclusive Negotiation Agreement
B - Draft Term Sheet

10. Subject: Approve a Cooperative Services Agreement with SHI International Corporation for Managed, Detection, and Response (MDR) Cybersecurity services, for a total not-to-exceed amount of $180,025.50.

Recommended Action: Authorize the City Manager to execute a Cooperative Services Agreement with SHI International Corp., for Managed, Detection, and Response (MDR) Cybersecurity services for a total not-to-exceed amount of $180,025.50.

Staff Report
A - DarkTrace via SHI International Corp., Base Cooperative Agreement B - Omnia Partners Cooperative Agreement no. 2018011-02 C - Amendment 4 to Omnia Partners Coop. Agreement no. 2018011-02 D - Draft Supplemental Agreement
PUBLIC HEARINGS - None
Effective January 1, 2023, Government Code Section 65103.5 (SB 1214) limits the distribution of copyrighted material associated with the review of development projects. Members of the public wishing to view plans that cannot otherwise be distributed under SB 1214 may make an appointment with the Planning Division to view them at City Hall by sending an email to [email protected]. Plans will also be made available digitally during the hearing to consider the proposal.

ACTION CALENDAR

11. Subject: Cessation of Hybrid Commission and Committee Meetings Recommended Action: Conduct City Council and Planning Commission meetings in a hybrid format while continuing to utilize in-person only meetings for all other Commissions and Committee meetings
Presenter: Bill Mitchell, Chief Technology Officer
Staff Report

5 CC 02-06-2024
5 of 723
City Council Agenda February 6, 2024

12. Subject: Cost Allocation Plan, User Fee Study, and Cost Recovery Policy Recommended Action: Receive and File Cost Allocation Plan and User Fee Study and provide direction on the components of a Cost Recovery Policy Presenter: Kristina Alfaro, Director of Administrative Services Staff Report
A - Cost Allocation Plan
B - User Fee Study Final Report

COUNCIL REPORTS AND COMMENTS

13. Subject: Councilmember Reports
A - Council Reports, Fruen
B - Council Reports, Mohan
C - Council Reports, Wei

CITY MANAGER REPORT

ORAL COMMUNICATIONS - CONTINUED
INFORMATIONAL ITEMS - None
Information items are intended to provide background information and routine reports to Councilmembers and the public, without discussion by Council. Members of the public wishing to comment on informational items should do so during oral communications.

COUNCIL AND STAFF COMMENTS AND FUTURE AGENDA ITEMS

ADJOURNMENT

14. Subject: Adjourn in memory of former Cupertino Mayor Philip Johnson Lobbyist Registration and Reporting Requirements: Individuals who influence or attempt to influence legislative or administrative action may be required by the City of Cupertino’s lobbying ordinance (Cupertino Municipal Code Chapter 2.100) to register and report lobbying activity. Persons whose communications regarding any legislative or administrative are solely limited to appearing at or submitting testimony for any public meeting held by the City are not required to register as lobbyists.

For more information about the lobbying ordinance, please contact the City Clerk’s Office at 10300 Torre Avenue, Cupertino, CA 95014; telephone (408) 777-3223; email [email protected]; and website: www.cupertino.org/lobbyist.

The City of Cupertino has adopted the provisions of Code of Civil Procedure §1094.6; litigation challenging a final decision of the City Council must be brought within 90 days after a decision is announced unless a shorter time is required by State or Federal law.

6 CC 02-06-2024
6 of 723
City Council Agenda February 6, 2024
Prior to seeking judicial review of any adjudicatory (quasi-judicial) decision, interested persons must file a petition for reconsideration within ten calendar days of the date the City Clerk mails notice of the City’s decision. Reconsideration petitions must comply with the requirements of Cupertino Municipal Code §2.08.096. Contact the City Clerk’s office for more information or go to http://www.cupertino.org/cityclerk for a reconsideration petition form.

In compliance with the Americans with Disabilities Act (ADA), anyone who is planning to attend this meeting who is visually or hearing impaired or has any disability that needs special assistance should call the City Clerk's Office at 408-777-3223, at least 48 hours in advance of the meeting to arrange for assistance. In addition, upon request, in advance, by a person with a disability, meeting agendas and writings distributed for the meeting that are public records will be made available in the appropriate alternative format.

Any writings or documents provided to a majority of the Cupertino City Council after publication of the packet will be made available for public inspection in the City Clerk’s Office located at City Hall, 10300 Torre Avenue, Cupertino, California 95014, during normal business hours; and in Council packet archives linked from the agenda/minutes page on the Cupertino web site.

IMPORTANT NOTICE: Please be advised that pursuant to Cupertino Municipal Code section

2.08.100 written communications sent to the Cupertino City Council, Commissioners or City staff concerning a matter on the agenda are included as supplemental material to the agendized item. These written communications are accessible to the public through the City’s website and kept in packet archives. Do not include any personal or private information in written communications to the City that you do not wish to make public, as written communications are considered public records and will be made publicly available on the City website.

7 CC 02-06-2024
7 of 723

CITY OF CUPERTINO
Agenda Item
23-12847 Agenda Date: 2/6/2024
Agenda #: 1.

Subject: Recognition of STEM Winners from the City of Cupertino who participated in the Santa Clara County 2023 Synopsys Championship Science Fair
Recognize STEM Winners from the City of Cupertino who participated in the Santa Clara County 2023 Synopsys Championship Science Fair
CITY OF CUPERTINO Page 1 of 1 Printed on 1/31/2024
powered by Legistar™ 8
CC 02-06-2024
8 of 723

VxÜà|y|vtàx Éy TÑÑÜxv|tà|ÉÇ
Presented to
Tt~tá{ ^âÅtÜ
February 6, 2024
In recognition of your performance in the Santa Clara County 2023 Synopsys Championship Science Fair. The City of Cupertino commends you for your achievement and wishes you the best of luck in your future endeavors. __________________________
The Honorable Sheila Mohan
Mayor, City of Cupertino
9 CC 02-06-2024
9 of 723

VxÜà|y|vtàx Éy TÑÑÜxv|tà|ÉÇ
Presented to
Tw{|Ñ etz{âÇtà{tÇ
February 6, 2024
In recognition of your performance in the Santa Clara County 2023 Synopsys Championship Science Fair. The City of Cupertino commends you for your achievement and wishes you the best of luck in your future endeavors. __________________________
The Honorable Sheila Mohan
Mayor, City of Cupertino
10 CC 02-06-2024
10 of 723

VxÜà|y|vtàx Éy TÑÑÜxv|tà|ÉÇ
Presented to
Tw|à| UtwÜ|ÑÜtátw
February 6, 2024
In recognition of your performance in the Santa Clara County 2023 Synopsys Championship Science Fair. The City of Cupertino commends you for your achievement and wishes you the best of luck in your future endeavors. __________________________
The Honorable Sheila Mohan
Mayor, City of Cupertino
11 CC 02-06-2024
11 of 723

VxÜà|y|vtàx Éy TÑÑÜxv|tà|ÉÇ
Presented to
Tw|à| itwâÜ|
February 6, 2024
In recognition of your performance in the Santa Clara County 2023 Synopsys Championship Science Fair. The City of Cupertino commends you for your achievement and wishes you the best of luck in your future endeavors. __________________________
The Honorable Sheila Mohan
Mayor, City of Cupertino
12 CC 02-06-2024
12 of 723

VxÜà|y|vtàx Éy TÑÑÜxv|tà|ÉÇ
Presented to
TÅtÇ}çÉà| `Ü|w{t
February 6, 2024
In recognition of your performance in the Santa Clara County 2023 Synopsys Championship Science Fair. The City of Cupertino commends you for your achievement and wishes you the best of luck in your future endeavors. __________________________
The Honorable Sheila Mohan
Mayor, City of Cupertino
13 CC 02-06-2024
13 of 723

VxÜà|y|vtàx Éy TÑÑÜxv|tà|ÉÇ
Presented to
TÅç k|Ççâ m{xÇz
February 6, 2024
In recognition of your performance in the Santa Clara County 2023 Synopsys Championship Science Fair. The City of Cupertino commends you for your achievement and wishes you the best of luck in your future endeavors. __________________________
The Honorable Sheila Mohan
Mayor, City of Cupertino
14 CC 02-06-2024
14 of 723

VxÜà|y|vtàx Éy TÑÑÜxv|tà|ÉÇ
Presented to
TÇwÜxã `âéx _|
February 6, 2024
In recognition of your performance in the Santa Clara County 2023 Synopsys Championship Science Fair. The City of Cupertino commends you for your achievement and wishes you the best of luck in your future endeavors. __________________________
The Honorable Sheila Mohan
Mayor, City of Cupertino
15 CC 02-06-2024
15 of 723

VxÜà|y|vtàx Éy TÑÑÜxv|tà|ÉÇ
Presented to
TÇ|~t `â~{xÜ}xx
February 6, 2024
In recognition of your performance in the Santa Clara County 2023 Synopsys Championship Science Fair. The City of Cupertino commends you for your achievement and wishes you the best of luck in your future endeavors. __________________________
The Honorable Sheila Mohan
Mayor, City of Cupertino
16 CC 02-06-2024
16 of 723

VxÜà|y|vtàx Éy TÑÑÜxv|tà|ÉÇ
Presented to
U{tätÇ ft| UtÄâáâ
February 6, 2024
In recognition of your performance in the Santa Clara County 2023 Synopsys Championship Science Fair. The City of Cupertino commends you for your achievement and wishes you the best of luck in your future endeavors. __________________________
The Honorable Sheila Mohan
Mayor, City of Cupertino
17 CC 02-06-2024
17 of 723

VxÜà|y|vtàx Éy TÑÑÜxv|tà|ÉÇ
Presented to
V{Ü|áàÉÑ{xÜ g fâÇ
February 6, 2024
In recognition of your performance in the Santa Clara County 2023 Synopsys Championship Science Fair. The City of Cupertino commends you for your achievement and wishes you the best of luck in your future endeavors. __________________________
The Honorable Sheila Mohan
Mayor, City of Cupertino
18 CC 02-06-2024
18 of 723

VxÜà|y|vtàx Éy TÑÑÜxv|tà|ÉÇ
Presented to
VÄt|Üx YtÇz kâ
February 6, 2024
In recognition of your performance in the Santa Clara County 2023 Synopsys Championship Science Fair. The City of Cupertino commends you for your achievement and wishes you the best of luck in your future endeavors. __________________________
The Honorable Sheila Mohan
Mayor, City of Cupertino
19 CC 02-06-2024
19 of 723

VxÜà|y|vtàx Éy TÑÑÜxv|tà|ÉÇ
Presented to
WtÇ|xÄ _|Ç
February 6, 2024
In recognition of your performance in the Santa Clara County 2023 Synopsys Championship Science Fair. The City of Cupertino commends you for your achievement and wishes you the best of luck in your future endeavors. __________________________
The Honorable Sheila Mohan
Mayor, City of Cupertino
20 CC 02-06-2024
20 of 723

VxÜà|y|vtàx Éy TÑÑÜxv|tà|ÉÇ
Presented to
XÄ|étuxà{ m{tÇz
February 6, 2024
In recognition of your performance in the Santa Clara County 2023 Synopsys Championship Science Fair. The City of Cupertino commends you for your achievement and wishes you the best of luck in your future endeavors. __________________________
The Honorable Sheila Mohan
Mayor, City of Cupertino
21 CC 02-06-2024
21 of 723

VxÜà|y|vtàx Éy TÑÑÜxv|tà|ÉÇ
Presented to
XätÇ `tàà{xã lâtÇ
February 6, 2024
In recognition of your performance in the Santa Clara County 2023 Synopsys Championship Science Fair. The City of Cupertino commends you for your achievement and wishes you the best of luck in your future endeavors. __________________________
The Honorable Sheila Mohan
Mayor, City of Cupertino
22 CC 02-06-2024
22 of 723

VxÜà|y|vtàx Éy TÑÑÜxv|tà|ÉÇ
Presented to
\á{t ^ÉàtÄãtÜ
February 6, 2024
In recognition of your performance in the Santa Clara County 2023 Synopsys Championship Science Fair. The City of Cupertino commends you for your achievement and wishes you the best of luck in your future endeavors. __________________________
The Honorable Sheila Mohan
Mayor, City of Cupertino
23 CC 02-06-2024
23 of 723

VxÜà|y|vtàx Éy TÑÑÜxv|tà|ÉÇ
Presented to
]t| f{tÜÅt
February 6, 2024
In recognition of your performance in the Santa Clara County 2023 Synopsys Championship Science Fair. The City of Cupertino commends you for your achievement and wishes you the best of luck in your future endeavors. __________________________
The Honorable Sheila Mohan
Mayor, City of Cupertino
24 CC 02-06-2024
24 of 723

VxÜà|y|vtàx Éy TÑÑÜxv|tà|ÉÇ
Presented to
^Ü|á{ TÜÉÜt
February 6, 2024
In recognition of your performance in the Santa Clara County 2023 Synopsys Championship Science Fair. The City of Cupertino commends you for your achievement and wishes you the best of luck in your future endeavors. __________________________
The Honorable Sheila Mohan
Mayor, City of Cupertino
25 CC 02-06-2024
25 of 723

VxÜà|y|vtàx Éy TÑÑÜxv|tà|ÉÇ
Presented to
`xz{tÇt fÉÅâ
February 6, 2024
In recognition of your performance in the Santa Clara County 2023 Synopsys Championship Science Fair. The City of Cupertino commends you for your achievement and wishes you the best of luck in your future endeavors. __________________________
The Honorable Sheila Mohan
Mayor, City of Cupertino
26 CC 02-06-2024
26 of 723

VxÜà|y|vtàx Éy TÑÑÜxv|tà|ÉÇ
Presented to
`Ü|wâÄt et}tzÉÑtÄtÇ
February 6, 2024
In recognition of your performance in the Santa Clara County 2023 Synopsys Championship Science Fair. The City of Cupertino commends you for your achievement and wishes you the best of luck in your future endeavors. __________________________
The Honorable Sheila Mohan
Mayor, City of Cupertino
27 CC 02-06-2024
27 of 723

VxÜà|y|vtàx Éy TÑÑÜxv|tà|ÉÇ
Presented to
`Ü|wâÄt fÜ|Ç|ätátÇ
February 6, 2024
In recognition of your performance in the Santa Clara County 2023 Synopsys Championship Science Fair. The City of Cupertino commends you for your achievement and wishes you the best of luck in your future endeavors. __________________________
The Honorable Sheila Mohan
Mayor, City of Cupertino
28 CC 02-06-2024
28 of 723

VxÜà|y|vtàx Éy TÑÑÜxv|tà|ÉÇ
Presented to
axàÜt ZtâÜtä ^{Éà
February 6, 2024
In recognition of your performance in the Santa Clara County 2023 Synopsys Championship Science Fair. The City of Cupertino commends you for your achievement and wishes you the best of luck in your future endeavors. __________________________
The Honorable Sheila Mohan
Mayor, City of Cupertino
29 CC 02-06-2024
29 of 723

VxÜà|y|vtàx Éy TÑÑÜxv|tà|ÉÇ
Presented to
a|ÜtÇ}tÇt ftÇ~tÜ
February 6, 2024
In recognition of your performance in the Santa Clara County 2023 Synopsys Championship Science Fair. The City of Cupertino commends you for your achievement and wishes you the best of luck in your future endeavors. __________________________
The Honorable Sheila Mohan
Mayor, City of Cupertino
30 CC 02-06-2024
30 of 723

VxÜà|y|vtàx Éy TÑÑÜxv|tà|ÉÇ
Presented to
bÜv{|àtV{t~ÜtuÉÜàç
February 6, 2024
In recognition of your performance in the Santa Clara County 2023 Synopsys Championship Science Fair. The City of Cupertino commends you for your achievement and wishes you the best of luck in your future endeavors. __________________________
The Honorable Sheila Mohan
Mayor, City of Cupertino
31 CC 02-06-2024
31 of 723

VxÜà|y|vtàx Éy TÑÑÜxv|tà|ÉÇ
Presented to
exät h~~twtÅ
February 6, 2024
In recognition of your performance in the Santa Clara County 2023 Synopsys Championship Science Fair. The City of Cupertino commends you for your achievement and wishes you the best of luck in your future endeavors. __________________________
The Honorable Sheila Mohan
Mayor, City of Cupertino
32 CC 02-06-2024
32 of 723

VxÜà|y|vtàx Éy TÑÑÜxv|tà|ÉÇ
Presented to
eÉ{tÇ f{t{
February 6, 2024
In recognition of your performance in the Santa Clara County 2023 Synopsys Championship Science Fair. The City of Cupertino commends you for your achievement and wishes you the best of luck in your future endeavors. __________________________
The Honorable Sheila Mohan
Mayor, City of Cupertino
33 CC 02-06-2024
33 of 723

VxÜà|y|vtàx Éy TÑÑÜxv|tà|ÉÇ
Presented to
ftÇ}tç V{tÇwÜtáx~tÜ
February 6, 2024
In recognition of your performance in the Santa Clara County 2023 Synopsys Championship Science Fair. The City of Cupertino commends you for your achievement and wishes you the best of luck in your future endeavors. __________________________
The Honorable Sheila Mohan
Mayor, City of Cupertino
34 CC 02-06-2024
34 of 723

VxÜà|y|vtàx Éy TÑÑÜxv|tà|ÉÇ
Presented to
f{|äxÇ U{tàà
February 6, 2024
In recognition of your performance in the Santa Clara County 2023 Synopsys Championship Science Fair. The City of Cupertino commends you for your achievement and wishes you the best of luck in your future endeavors. __________________________
The Honorable Sheila Mohan
Mayor, City of Cupertino
35 CC 02-06-2024
35 of 723

VxÜà|y|vtàx Éy TÑÑÜxv|tà|ÉÇ
Presented to
f{Ü|wâÄt fÜ|Ç|ätátÇ
February 6, 2024
In recognition of your performance in the Santa Clara County 2023 Synopsys Championship Science Fair. The City of Cupertino commends you for your achievement and wishes you the best of luck in your future endeavors. __________________________
The Honorable Sheila Mohan
Mayor, City of Cupertino
36 CC 02-06-2024
36 of 723

VxÜà|y|vtàx Éy TÑÑÜxv|tà|ÉÇ
Presented to
fÉÇ|t fãtÅç
February 6, 2024
In recognition of your performance in the Santa Clara County 2023 Synopsys Championship Science Fair. The City of Cupertino commends you for your achievement and wishes you the best of luck in your future endeavors. __________________________
The Honorable Sheila Mohan
Mayor, City of Cupertino
37 CC 02-06-2024
37 of 723

VxÜà|y|vtàx Éy TÑÑÜxv|tà|ÉÇ
Presented to
fÉÉÜt} içwçtÇtà{tÇ
February 6, 2024
In recognition of your performance in the Santa Clara County 2023 Synopsys Championship Science Fair. The City of Cupertino commends you for your achievement and wishes you the best of luck in your future endeavors. __________________________
The Honorable Sheila Mohan
Mayor, City of Cupertino
38 CC 02-06-2024
38 of 723

VxÜà|y|vtàx Éy TÑÑÜxv|tà|ÉÇ
Presented to
m|çt T{Åtw
February 6, 2024
In recognition of your performance in the Santa Clara County 2023 Synopsys Championship Science Fair. The City of Cupertino commends you for your achievement and wishes you the best of luck in your future endeavors. __________________________
The Honorable Sheila Mohan
Mayor, City of Cupertino
39 CC 02-06-2024
39 of 723

CITY OF CUPERTINO
Agenda Item
24-12920 Agenda Date: 2/6/2024
Agenda #: 2.

Subject: Recognition of February as Black History Month Recognize February as Black History Month
CITY OF CUPERTINO Page 1 of 1 Printed on 1/31/2024
powered by Legistar™ 40
CC 02-06-2024
40 of 723

CITY OF CUPERTINO
Agenda Item
24-12944 Agenda Date: 2/6/2024
Agenda #: 3.

Subject: Approve the December 19, 2023 (Closed Session) City Council minutes Approve the December 19, 2023 (Closed Session) City Council minutes CITY OF CUPERTINO Page 1 of 1 Printed on 1/31/2024
powered by Legistar™ 41
CC 02-06-2024
41 of 723

DRAFT MINUTES

CUPERTINO CITY COUNCIL
Tuesday, December 19, 2023
At 11:00 a.m., Mayor Sheila Mohan called the Special City Council Meeting to order in Cupertino City Hall Conference Room C, 10300 Torre Avenue.

ROLL CALL

Present: Mayor Sheila Mohan, Vice Mayor J.R. Fruen, and Councilmembers Kitty Moore and Hung Wei. Absent: Councilmember Liang Chao.

In open session prior to closed session, Mayor Mohan opened the public comment period regarding any item on the agenda. No members of the public requested to speak, and Mayor Mohan closed the public comment period.

CLOSED SESSION

1. Subject: Conference with legal counsel - existing litigation pursuant to Government Code § 54956.9 (City of Cupertino v. California Department of Tax & Fee Administration) Council conducted the conference with legal counsel regarding existing litigation (City of Cupertino v. California Department of Tax & Fee Administration).

CLOSED SESSION REPORT
City Attorney Jensen conducted the open session report regarding closed session. City Attorney Jensen reported that there was no reportable action.

ADJOURNMENT
At 12:28 p.m., Mayor Mohan adjourned the Special City Council Meeting.

Minutes prepared by:
_________________________
Kirsten Squarcia, City Clerk
42 CC 02-06-2024
42 of 723

CITY OF CUPERTINO
Agenda Item
23-12645 Agenda Date: 2/6/2024
Agenda #: 4.

Subject: Approve the January 12, 2024 City Council minutes Approve the January 12, 2024 City Council minutes
CITY OF CUPERTINO Page 1 of 1 Printed on 1/31/2024
powered by Legistar™ 43
CC 02-06-2024
43 of 723

DRAFT MINUTES

CUPERTINO CITY COUNCIL
Friday, January 12, 2024

SPECIAL MEETING
At 11:00 a.m., Mayor Sheila Mohan called the Special City Council Meeting to order in the Cupertino Library, Room 201, 10800 Torre Avenue.

ROLL CALL

Present: Mayor Sheila Mohan, Vice Mayor J.R. Fruen, and Councilmembers Liang Chao, Kitty Moore, and Hung Wei. Absent: none.

CITY COUNCIL TRAINING

1. Subject: City Council Training
Recommended Action: Conduct City Council Training
Written communications for this item included a staff presentation, printed Attachment B - Rosenberg's Rules of Order, and a Rosenberg's Rules of Order Cheat Sheet handout.

City Manager Pamela Wu introduced the item and discussed the following presentation items:
 City of Cupertino’s government structure
 City Commissions as Advisory Boards to Council
 Deputy City Manager, Economic Development Manager, and Emergency Services Manager roles and responsibilities
 Process of reimbursements for Council
 Update on 2024 Council Committee Assignments
 Types of City Council meetings
o Special Meetings versus Regular Meetings
o Closed Session meetings
o Study Session meetings providing information for Council  Future Agenda Setting
o Two or more councilmembers requesting agenda items
44 CC 02-06-2024
44 of 723

City Council Minutes January 12, 2024
 Draft City Council agenda review and finalization process  Staff preparation of answers to councilmember questions  Councilmember prep sessions prior to City Council meetings City Attorney Chris Jensen presented Rosenberg's Rules of Order, Simple Rules of Parliamentary Procedure for the 21st Century, including the following:
 Governing through the rule of majority and public participation  Council Procedures Manual as a supplement to Rosenberg's Rules of Order procedure
 The deliberation process as an opportunity for councilmembers to explain why they are voting the way they vote
 Process for discussing an agenda
 Allowance of up to three motions on the table
 Motion to Reconsider
 Point of Privilege
 Point of Order
 Call to Orders of the Day
 Withdrawing motions
 Critiques of Rosenberg's Rules
o Gives more authority to the Chair but Council Procedures Manual limits this o Dilutes clarity on body’s motion making
o Motion does not belong to the body, motion belongs to the maker o Only three motions on the floor
 Discussion during motions
 Clarification on motion format
Councilmembers asked questions and made comments.

Chief Technology Officer Bill Mitchell presented the following:
 Cyber Security Training
o The complexity and frequency of cyber-attacks
o Cities that were breached
o The City’s multi-tiered security architecture encompasses:
 Regular annual training sessions
 Scheduled phishing simulations
 Targeted remedial training for individuals
 City-issued Equipment
o Laptop and associated hardware and software
45 CC 02-06-2024
45 of 723

City Council Minutes January 12, 2024
o Cell phone with data plan
o Annual review conducted by IT
 Security and application patches
 Firmware updates
 Scans for malicious software
 Use of City Email
o Use of City Email account when sending messages pertaining to City business o Privacy expectations
o Subject to Public Records Act requests
 International Travel
o Procedure for network logins outside of the United States City Clerk Kirsten Squarcia presented the following:
 Reminders for ethics (AB 1234) and harassment prevention training and Statement of Economic Interests (Form 700) filing
 City Council meeting agenda items
o Deadlines for submitting councilmember questions to staff and Councilmember Activity Reports
o City Council meeting minutes format
o Supplemental Reports versus Desk Items
 Information on the number of City Council meetings held in 2023 and the number of Public Records Act requests processed in 2023
 Best Practices when participating in political activities  Political Reform Act update for Councilmember contributions Councilmembers asked questions and made comments.

Assistant City Manager Matt Morley reviewed the following City Department highlights:
 Administrative Services
o City Budget
o Fee Schedule
o Purchasing Policy
o Annual Comprehensive Financial Report (ACFR)
o Training standards for employees by classification
o Injury and Illness Prevention Policy
 Public Works
o Landfill Agreement
o Water Lease
46 CC 02-06-2024
46 of 723

City Council Minutes January 12, 2024
o CIP Projects including LED lighting transition and solar o Exploring opportunity for maintenance insourcing
o DOLA improvements at Linda Vista
 Community Development
o Vallco project, Housing Element, and Lehigh expected activity o Mary Avenue affordable housing next steps in the spring o Simian property and coordination with the County as the lead advancing this affordable housing project
o Zoning Code updates including removal of two-story permits, updating the tree list, review of parking standards, and objective design standards • Parks and Recreation
o Community Funding
o Fee adjustments and market rate analysis
o Sponsorship and Grant opportunities
• City Manager’s Office
o Leading Work Program efforts
o Adoption of Hazard Mitigation Plan
o Monitoring for State legislation and action where appropriate • Information and Technology
o Website Update
o Replacement of Server/Storage systems
o Augmented reality on flora and fauna at McClellan Ranch Deputy City Manager Tina Kapoor reviewed the following:
• Process for submitting proclamation requests and other ceremonial matters • Mayor as ceremonial spokesperson and Vice Mayor as designated alternate Councilmembers asked questions and made comments.

Executive Assistant to Council and City Manager Debra Nascimento presented the following:
• Supporting City Council, City Manager, and Assistant City Manager • Arrangement of various regularly scheduled meetings:
o Mayor’s Meeting with Commissioners
o Council meeting agenda review
o City Manager and Councilmember one-on-one meetings
• Registration for conferences and events
• Arrangement of travel
47 CC 02-06-2024
47 of 723

City Council Minutes January 12, 2024
Councilmembers asked questions and made comments.

Mayor Mohan opened the public comment period and the following people spoke.

Cathy Helgerson was concerned about discussions during special meeting closed sessions regarding litigation matters, meeting adjournments and continuations, and compliance with the Brown Act; and supported meetings that are held at Community Hall (submitted written comments).

Lisa Warren supported the session and was concerned about staff guidance and staff reports as the sole source of information for Councilmembers, and Councilmembers making their decisions before receiving public input.

Mayor Mohan closed the public comment period.

Council conducted the City Council training. Councilmember comments included the following:
 Would like to continue to have flexibility to ask questions after receiving public comments.
 For some agenda items, it doesn’t make sense to receive councilmember views on an item after a motion because once a motion is made, comments should be discussing the agenda item, not the motion.
 Support allowing councilmembers to explain how they made their decisions.  Consider listing only one agenda item instead of grouping multiple items in the item.
 Include agenda language for the public regarding instruction on the public comment process.
 Support this type of training to be audio/video recorded and with a hybrid option for the public.
 Appreciate the clarification on study sessions and when Council actions are taken.  Ensure City Commissions are given training on how to run a meeting.

ADJOURNMENT
At 1:08 p.m., Mayor Mohan adjourned the Special City Council Meeting.

Minutes prepared by:
48 CC 02-06-2024
48 of 723

City Council Minutes January 12, 2024
_________________________
Kirsten Squarcia, City Clerk
49 CC 02-06-2024
49 of 723

CITY OF CUPERTINO
Agenda Item
24-12913 Agenda Date: 2/6/2024
Agenda #: 5.

Subject: Approve the January 17, 2024 City Council minutes Approve the January 17, 2024 City Council minutes
CITY OF CUPERTINO Page 1 of 1 Printed on 1/31/2024
powered by Legistar™ 50
CC 02-06-2024
50 of 723

DRAFT MINUTES

CUPERTINO CITY COUNCIL
Wednesday, January 17, 2024

SPECIAL MEETING
At 5:00 p.m., Mayor Sheila Mohan called the Special City Council Meeting to order and led the Pledge of Allegiance in the Cupertino Community Hall Council Chamber, 10350 Torre Avenue and via teleconference.

ROLL CALL

Present: Mayor Sheila Mohan, Vice Mayor J.R. Fruen, and Councilmembers Liang Chao, Kitty Moore, and Hung Wei. Absent: none.

STUDY SESSION

1. Subject: Provide input to staff on potential service-level reductions for the FY 2024-25 Proposed and Final Budgets
Recommended Action: Provide input to staff on potential service-level reductions for the FY 2024-25 Proposed and Final Budgets
Presenter: Thomas Leung, Budget Manager
Written communications for this item included a staff presentation, a supplemental report with staff responses to councilmember question, an amended Attachment A - Potential Service-Level Reductions Summary, and emails to Council.

City Manager Pamela Wu and Administrative Services Director Kristina Alfaro gave a presentation.

Mayor Mohan opened the public comment period and the following people spoke.

Jennifer Griffin
Alyssa Sakkas (representing Rotary Club of Cupertino)
Jeff Moe (representing Rotary Club of Cupertino)
Louise Saadati
51 CC 02-06-2024
51 of 723
City Council Minutes January 17, 2024

Peggy Griffin
Jean Bedord
Rhoda Fry
Planning Commissioner Steven Scharf (representing self) Lisa Warren
Parks and Recreation Commissioner Jennifer Shearin (representing self) Mayor Mohan closed the public comment period.

Councilmembers asked questions and made comments.

Councilmembers provided the following input to staff on potential service-level reductions for the FY 2024-25 Proposed and Final Budgets:
 Operations and Maintenance:
o Confirm the City provides an ACH option so that customers are not forced to pay on credit cards only
o Provide information on costs to further reduce the Scene printed copy o Keep crossing guard services funding
o Keep staff conferences and training, as necessary
o Discuss enterprise funds for Blackberry Farm and Sports Center, in addition to Senior Center expenses
 Infrastructure:
o Provide more information on sidewalk maintenance and street tree maintenance and how programs would work
o Provide more information on school district ground maintenance o Research a potential fee or tax specific to the sidewalk and street tree programs
o Check-in with Cupertino Union School District to understand their budget impacts
 Fiscal Accountability: There was no Council follow-up for this item.  Community Benefit:
o Keep all programs but to look for potential sponsorships (excluding any previously defunded Fourth of July events)
At 6:35 p.m., Mayor Mohan recessed the meeting. The meeting reconvened at 6:45 p.m. with all Councilmembers present.
52 CC 02-06-2024
52 of 723
City Council Minutes January 17, 2024

CLOSED SESSION REPORT
City Attorney Chris Jensen reported that the City entered into a settlement agreement which resulted in a stipulated judgement in the action of California Housing Defense Fund v. City of Cupertino. The judgment was entered on January 8, 2024 and has resolved the matter.

CEREMONIAL ITEMS – None
POSTPONEMENTS AND ORDERS OF THE DAY – None

ORAL COMMUNICATIONS
Written communications for this item included emails to Council.

Mayor Mohan recognized the passing of former Cupertino Mayor William Reed Sparks.

The following people spoke:

Jennifer Griffin discussed Senate Bill 423.

Peggy Griffin discussed Housing Element strategies.

Angela discussed Cupertino Dog Off-Leash Areas (DOLAs) and a recent incident.

Rhoda Fry discussed the Housing Element, CDTFA sales tax audit, budget, potential revenue tax measures, and treasurer's reports.

J Huang discussed a Code Enforcement matter.

Louise Saadati discussed Cupertino DOLAs and a recent incident.

Lisa Warren discussed a DOLA incident, Council governance workshop, and Councilmember committee assignments.

San R discussed Cupertino DOLAs and an unhoused person by Target.

CONSENT CALENDAR (Items 2-9)
Mayor Mohan opened the public comment period and the following people spoke.

Jennifer Griffin provided comments on Item 5.
53 CC 02-06-2024
53 of 723
City Council Minutes January 17, 2024

Peggy Griffin provided comments on Items 7 and 8.

Mayor Mohan closed the public comment period.

MOTION: Fruen moved and Wei seconded to approve the items on the Consent Calendar as presented. The motion carried with the following vote: Ayes: Mohan, Fruen, Chao, Moore, and Wei. Noes: None. Abstain: None. Absent: None.

2. Subject: Approval of the December 5, 2023 City Council minutes Recommended Action: Approve the December 5, 2023 City Council minutes

3. Subject: Approval of the December 14, 2023 City Council minutes Recommended Action: Approve the December 14, 2023 City Council minutes

4. Subject: A resolution establishing the City Council meeting schedule through January 22, 2025
Recommended Action: Adopt Resolution 24-001 establishing the City Council meeting schedule through January 22, 2025

5. Subject: Appointment of 2024 Council Committee Assignments Recommended Action: Approve the draft 2024 Council Committee Assignments Written communications for this item included a supplemental report Attachment A - Draft 2024 Council Committee Assignments.

6. Subject: Ratifying Accounts Payable for the periods ending November 3, 2023; November 10, 2023; November 17, 2023; and November 24, 2023 Recommended Action: A. Adopt Resolution No. 24-002 ratifying Accounts Payable for the Period ending November 3, 2023;
B. Adopt Resolution No. 24-003 ratifying Accounts Payable for the Period ending November 10, 2023;
C. Adopt Resolution No. 24-004 ratifying Accounts Payable for the Period ending November 17, 2023; and
D. Adopt Resolution No. 24-005 ratifying Accounts Payable for the Period ending November 24, 2023

7. Subject: Ratifying Accounts Payable for the periods ending December 1, 2023; December 8, 2023; December 15, 2023; and December 22, 2023 Recommended Action: A. Adopt Resolution No. 24-006 ratifying Accounts Payable for the Period ending December 1, 2023;
B. Adopt Resolution No. 24-007 ratifying Accounts Payable for the Period ending 54 CC 02-06-2024
54 of 723
City Council Minutes January 17, 2024

December 8, 2023;
C. Adopt Resolution No. 24-008 ratifying Accounts Payable for the Period ending December 15, 2023; and
D. Adopt Resolution No. 24-009 ratifying Accounts Payable for the Period ending December 22, 2023

8. Subject: Award of a construction contract for the Blackberry Farms Accessibility Improvements Project to Selway Construction, Inc. in the amount of $289,601 for ADA and drainage improvements and approve an increase in the amount of $85,209 in the contract for the Blackberry Farm Pool Improvements Project with Adams Pool Solutions for required equipment replacement.

Recommended Action: 1. Award a construction contract for the Blackberry Farm Accessibility Improvements Project (budget unit 420-99-073) in the amount of $289,601 to Selway Construction, Inc.;

2. Authorize the City Manager to execute the contract with Selway Construction, Inc. when all conditions have been met;

3. Authorize the Director of Public Works to execute any necessary construction change orders with Selway Construction, Inc., up to a contingency amount of $28,960 (10%), for a total contract amount of $318,561; and

4. Authorize the City Manager to amend the contract amount with Adams Pool Solutions for the Blackberry Farm Pool Improvement Project (420-99-073, PO#2024-242) in the amount of $85,209, for a total contract amount of $437,880.

Written communications for this item included an email to Council.

9. Subject: Approve a First Amendment with ReDesign Group, for additional funds for City's server and storage infrastructure project, for a new total not-to-exceed amount of $447,867.70.

Recommended Action: Authorize the City Manager to execute a First Amendment with ReDesign Group for additional server and storage infrastructure funds, increasing the Contract amount by $58,175.10 for a new total not-to-exceed contract amount of $447,867.70.

PUBLIC HEARINGS

10. Subject: Public hearing on the abatement of public nuisance from weeds or other fire hazards pursuant to provisions of Cupertino Municipal Code Chapter 9.08 and Resolution No. 23-117
Recommended Action: Conduct hearing for impacted property owners to contest the matter of proposed abatement and adopt Resolution No. 24-010 ordering abatement of public nuisance from weeds or other fire hazards pursuant to provisions of Cupertino Municipal Code Chapter 9.08 and Resolution No. 23-117
55 CC 02-06-2024
55 of 723
City Council Minutes January 17, 2024

Presenter: Kirsten Squarcia, City Clerk
Written communications for this item included a staff presentation.

City Clerk Kirsten Squarcia gave a presentation.

Mayor Mohan opened the public hearing and the following people spoke.

Jennifer Menq, 20950 Stevens Creek Boulevard
Zerry-Kuen Huang, 891 S. Tantau Avenue
Ramya Krishan, 10365 Sterling Boulevard
Mayor Mohan closed the public hearing.

Councilmembers asked questions and made comments.

Moe Kumre, Santa Clara County Weed Abatement Manager, answered questions.

SUBSTITUTE MOTION: Chao moved and Moore seconded the staff recommendation to adopt Resolution No. 24-010 ordering abatement of public nuisance from weeds or other fire hazards pursuant to provisions of Cupertino Municipal Code Chapter 9.08 and Resolution No. 23-117, with an amendment to remove the two properties at 891 S.

Tantau Avenue and 10365 Sterling Boulevard. The substitute motion failed with the following vote: Ayes: Chao. Noes: Mohan, Fruen, Moore, and Wei. Abstain: None.

Absent: None.

MOTION: Fruen moved and Wei seconded to adopt Resolution No. 24-010 ordering abatement of public nuisance from weeds or other fire hazards pursuant to provisions of Cupertino Municipal Code Chapter 9.08 and Resolution No. 23-117.

FRIENDLY AMENDMENT: Chao made a friendly amendment to remove the two properties at 891 S. Tantau Avenue and 10365 Sterling Boulevard. (Fruen declined the friendly amendment and it was not included in the motion).

The motion carried with the following vote: Ayes: Mohan, Fruen, Chao, Moore, and Wei.

Noes: None. Abstain: None. Absent: None.

11. Subject: Application for a seven-unit townhome development and associated environmental review under the California Environmental Quality Act. (Application No(s): DP-2023-001, ASA-2023-002, TM-2023-001 & TR-2023-008; Applicant(s): Leon Hu of Top Mission Realty & Investment, Inc.; Location: 10046 Bianchi Way, APN:
359-07-021.)
Recommended Action: 1. Find the project exempt from the California Environmental 56 CC 02-06-2024
56 of 723
City Council Minutes January 17, 2024

Quality Act (CEQA) Guideline Sections 15332 (Infill Development Projects) and

2. Approve the following permits:
a. Adopt Resolution No. 24-011 approving the Development Permit (DP-2023-001) (Attachment A);
b. Adopt Resolution No. 24-012 approving the Architectural & Site Approval Permit (ASA-2023-002) (Attachment B);
c. Adopt Resolution No. 24-013 approving the Tentative Final Map (TM-2023-001) (Attachment C); and
d. Adopt Resolution No. 24-014 approving the Tree Removal Permit (TR-2023-008) (Attachment D).

Presenter: Danielle Condit, Associate Planner
Written communications for this item included a staff presentation and emails to Council.

Councilmembers disclosed any ex parte communications prior to deliberation in this matter.

Community Development Director Ben Fu gave a presentation.

Councilmembers asked questions and made comments.

Project Manager Mike Wilson, on behalf of applicant Leon Hu, provided a project update and answered questions.

Mayor Mohan opened the public hearing and the following people spoke.

Jennifer Griffin
Des Metcalf
Lynne Carlton
Sandhana Siva (representing Cupertino for All)
Peggy Griffin
Jean Bedord
Louis Saadati
Kamyab Mashian
Ava Chiao
Parks and Recreation Commissioner Jennifer Shearin (representing self) Shivani K
Harry Neil
Glenn Fishler
57 CC 02-06-2024
57 of 723
City Council Minutes January 17, 2024

Mayor Mohan closed the public hearing.

MOTION: Fruen moved and Moore seconded to:

1. Find the project exempt from the California Environmental Quality Act (CEQA) Guideline Sections 15332 (Infill Development Projects) and

2. Approve the following permits:
a. Adopt Resolution No. 24-011 approving the Development Permit (DP-2023-001); b. Adopt Resolution No. 24-012 approving the Architectural & Site Approval Permit (ASA-2023-002);
c. Adopt Resolution No. 24-013 approving the Tentative Final Map (TM-2023-001); and d. Adopt Resolution No. 24-014 approving the Tree Removal Permit (TR-2023-008).

The motion carried with the following vote: Ayes: Mohan, Fruen, Moore, and Wei. Noes:

None. Abstain: Chao. Absent: None.

At 9:16 p.m., Mayor Mohan recessed the meeting. The meeting reconvened at 9:24 p.m. with all Councilmembers present.

12. Subject: Proposed amendments to Municipal Code Chapter 19.12, Chapter 19.28 and Chapter 19.112 regarding Two-Story Permit and Accessory Dwelling Unit (ADU) laws. (Application No. MCA-2023-002; Applicant: City of Cupertino; Location: City-wide) Recommended Action: Conduct the first reading of Ordinance No. 23-2254: "An Ordinance of The City Council of the City of Cupertino to amend Municipal Code Chapter 19.12, Chapter 19.28 and Chapter 19.112 Regarding Two-Story Permit and Accessory Dwelling Unit (ADU) Laws" (Attachment A) to amend the following:
a. Chapter 19.12, Administration, and
b. Chapter 19.28 Single-Family Residential (R-1) Zones. c. Chapter 19.112, Accessory Dwelling Units (ADU)
Presenter: Gian Martire, Senior Planner
Written communications for this item included a staff presentation and emails to Council.

Senior Planner Gian Martire gave a presentation.

Councilmembers asked questions and made comments.

Mayor Mohan opened the public hearing and the following people spoke.

Jennifer Griffin
Peggy Griffin
Long Jiao (representing Cupertino Voice)
58 CC 02-06-2024
58 of 723
City Council Minutes January 17, 2024

Louise Saadati
Jean Bedord
Alison Cingolani
Ava Chiao
Kendra Rosenberg
Sandhana Siva (representing Cupertino for All)
Peggy Griffin
Kamyab Mashian
Glenn Fishler
Lisa Warren
Shivani K
Mayor Mohan closed the public hearing.

City Clerk Kirsten Squarcia read the title of Ordinance No. 23-2254: "An Ordinance of The City Council of the City of Cupertino to amend Municipal Code Chapter 19.12, Chapter 19.28 and Chapter 19.112 Regarding Two-Story Permit and Accessory Dwelling Unit (ADU) Laws."
MOTION: Moore moved and Wei seconded for the City Clerk to read the title of Ordinance No. 23-2254, that further reading of the Ordinance be waived, and that the City Council conduct the first reading of the Ordinance by title only.

Council did not vote on this motion.

SUBSTITUTE MOTION: Fruen moved and Wei seconded the approval of Ordinance No. 23-2254 as recommended by the Planning Commission with the following additional changes:

1. That Table 19.112.030(A)(2) be revised to allow any combination of ADUs by replacing the word "one" with the words "no more than three" on lots zoned for single-family use and with "no more than two" on lots zoned for duplexes; and that the title of Table 19.112.030 be revised to read "Site Development Regulations for Streamlined Accessory Dwelling Units and Junior Accessory Dwelling Units Associated with Single‐Family Residential Uses and Duplexes"; and

2. That further reading of the Ordinance be waived, and that the City Council conduct the first reading of the Ordinance by title only.

FRIENDLY AMENDMENT: Chao made a friendly amendment to add the following distance-to-transit restrictions (from the staff recommendation to the Planning Commission), which apply only to non-streamlined ADUs:
 Allowance for heights of 18 feet for a detached ADU within a half mile walking distance of a major transit stop or corridor, and 25 feet if attached to a principal dwelling unit;
59 CC 02-06-2024
59 of 723
City Council Minutes January 17, 2024

 Allowance for a second story on attached or detached ADUs if located within a half mile walking distance of a major transit stop of corridor. (Fruen and Wei accepted the friendly amendment).

Fruen’s substitute motion as amended carried with the following vote: Ayes: Mohan, Fruen, Chao, Moore, and Wei. Noes: None. Abstain: None. Absent: None.

MOTION: Wei moved and Fruen seconded to extend the meeting to 11:15 p.m. to continue discussion on this item. The motion carried with the following vote: Ayes:

Mohan, Fruen, Chao, Moore, and Wei. Noes: None. Abstain: None. Absent: None.

ADJOURNMENT

13. Subject: Adjourn in memory of former Cupertino Mayor William Reed Sparks Mayor Mohan adjourned the meeting in memory of former Cupertino Mayor William Reed Sparks.

At 11:05 p.m., Mayor Mohan adjourned the Special City Council Meeting per rule. There was no Council discussion on the remaining agenda items.

ACTION CALENDAR – None

COUNCIL REPORTS AND COMMENTS

14. Subject: Councilmember Reports
Written communications for this item included an updated Attachment C - Council Report for Councilmember Moore.

Councilmembers reported on their various committees and activities as provided in the published agenda.

CITY MANAGER REPORT
Council did not hear this item.

ORAL COMMUNICATIONS - CONTINUED – None

INFORMATIONAL ITEMS

15. Subject: 2023 Legislative Activity and Priorities update 60 CC 02-06-2024
60 of 723
City Council Minutes January 17, 2024

Recommended Action: Receive update on 2023 Legislative Activity and Priorities The information regarding the update on 2023 Legislative Activity and Priorities was provided as part of the published agenda.

16. Subject: Receive the Monthly Treasurer's Investment Report for November 2023 Recommended Action: Receive the Monthly Treasurer's Investment Report for November 2023
Written communications for this item included a supplemental report with staff responses to councilmember questions and emails to Council.

The information regarding the Monthly Treasurer's Investment Report for November 2023 was provided as part of the published agenda.

17. Subject: Receive the Monthly Treasurer's Report for November 2023 Recommended Action: Receive the Monthly Treasurer's Report for November 2023 Written communications for this item included a supplemental report with staff responses to councilmember questions and emails to Council.

The information regarding the Monthly Treasurer's Report for November 2023 was provided as part of the published agenda.

18. Subject: Receive the Monthly Treasurer's Investment Report for December 2023 Recommended Action: Receive the Monthly Treasurer's Investment Report for December 2023
Written communications for this item included a supplemental report with staff responses to councilmember questions.

The information regarding the Monthly Treasurer's Investment Report for December 2023 was provided as part of the published agenda.

19. Subject: Receive the Monthly Treasurer's Report for December 2023 Recommended Action: Receive the Monthly Treasurer's Report for December 2023 Written communications for this item included a supplemental report with staff responses to councilmember questions.

The information regarding the Monthly Treasurer's Report for December 2023 was provided as part of the published agenda.
61 CC 02-06-2024
61 of 723
City Council Minutes January 17, 2024

COUNCIL AND STAFF COMMENTS AND FUTURE AGENDA ITEMS
Council did not hear this item.

Minutes prepared by:
_________________________
Kirsten Squarcia, City Clerk
62 CC 02-06-2024
62 of 723

CITY OF CUPERTINO
Agenda Item
24-12945 Agenda Date: 2/6/2024
Agenda #: 6.

Subject: Approve the January 29, 2024 (Closed Session) City Council minutes Approve the January 29, 2024 (Closed Session) City Council minutes CITY OF CUPERTINO Page 1 of 1 Printed on 1/31/2024
powered by Legistar™ 63
CC 02-06-2024
63 of 723

DRAFT MINUTES

CUPERTINO CITY COUNCIL
Monday, January 29, 2024
At 5:00 p.m., Mayor Sheila Mohan called the Special City Council Meeting to order in Cupertino City Hall Conference Room C, 10300 Torre Avenue.

ROLL CALL

Present: Mayor Sheila Mohan, Vice Mayor J.R. Fruen, and Councilmembers Liang Chao, Kitty Moore, and Hung Wei. Absent: none.

In open session prior to closed session, Mayor Mohan opened the public comment period regarding any item on the agenda. No members of the public requested to speak, and Mayor Mohan closed the public comment period.

CLOSED SESSION

1. Subject: Conference with legal counsel - existing litigation pursuant to Government Code § 54956.9 (City of Cupertino v. California Department of Tax & Fee Administration) Council conducted the conference with legal counsel regarding existing litigation (City of Cupertino v. California Department of Tax & Fee Administration).

CLOSED SESSION REPORT
City Attorney Jensen conducted the open session report regarding closed session. City Attorney Jensen reported that there was no reportable action.

ADJOURNMENT
At 5:37 p.m., Mayor Mohan adjourned the Special City Council Meeting.

Minutes prepared by:
_________________________
Kirsten Squarcia, City Clerk
64 CC 02-06-2024
64 of 723

CITY OF CUPERTINO
Agenda Item
23-12783 Agenda Date: 2/6/2024
Agenda #: 7.

Subject: Second reading of Municipal Code Amendment to Chapter 19.76 to allow privately operated educational uses and privately operated public serving uses in the BA zoning district. (Application No. MCA-2023-003; Applicant: City of Cupertino; Location: BA-zoned (Public Building) properties in Cupertino)
Conduct the second reading and enact Ordinance No. 23-2253: “An Ordinance of the City Council of the City of Cupertino to amend Cupertino Municipal Code Chapter 19.76 (Table 19.76.030) to allow privately operated educational uses and privately operated public serving uses in the BA zoning district”.

CITY OF CUPERTINO Page 1 of 1 Printed on 1/31/2024
powered by Legistar™ 65
CC 02-06-2024
65 of 723

CITY COUNCIL STAFF REPORT
Meeting: February 6, 2024
Subject
Second reading of Municipal Code Amendment to Chapter 19.76 to allow privately operated educational uses and privately operated public serving uses in the BA zoning district. (Application No. MCA-2023-003; Applicant: City of Cupertino; Location: BA-zoned (Public Building) properties in Cupertino) Recommended Action
Conduct the second reading and enact Ordinance No. 23-2253: “An Ordinance of the City Council of the City of Cupertino to amend Cupertino Municipal Code Chapter 19.76 (Table 19.76.030) to allow privately operated educational uses and privately operated public serving uses in the BA zoning district”.

Discussion
During a regular City Council Meeting held on December 5, 2023, City Council conducted the first reading for Ordinance No. 23-2253. Staff presented details about the proposal to conditionally allow for privately operated educational and public serving uses on BA zoned sites. Staff clarified that the amendment would establish a clear process by which private uses that perform functions similar to public agencies, such as schools, can do so on a site that remains owned by the public entity, subject to appropriate conditions that safeguard the surrounding neighborhood.

If Council approves these changes today, the proposed ordinance will take effect after thirty (30) days on March 6, 2024.

Prepared by: Emi Sugiyama, Associate Planner
Reviewed by: Benjamin Fu, Director of Community Development Department Approved for Submission by: Matt Morley, Acting City Manager Christopher Jensen, City Attorney
Attachments:

A – Draft Ordinance No. 23-2253
66 CC 02-06-2024
66 of 723
Attachment A – Page 1
ORDINANCE NO. 23-2253

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF CUPERTINO AMENDING CITY CODE CHAPTER 19.76 (TABLE 19.76.030) TO ALLOW

PRIVATELY OPERATED EDUCATIONAL USES AND PRIVATELY OPERATED

PUBLIC SERVING USES IN THE BA ZONING DISTRICT
The City Council of the City of Cupertino finds that:

1. That the proposed zoning is in accord with Title 19 of the Municipal Code and the City's Comprehensive General Plan (Community Vision 2040) and the proposed amendments are internally consistent with Title 19 of the Municipal Code.

The proposed amendments have been adopted in accord with the requirements of Title 19, and the proposed amendments to Section 19.76.030 are proposed to achieve internal consistency. The amendments are consistent with the Recreation, Parks, and Community Servies Element of the General Plan, which in Strategy RPC-2.1.2 states that the City will Zone all public school sites for public use to allow for the public to use [the] sites, when not in use by schools, through shared arrangements. The proposed Ordinance is intended to update the City's conditionally allowed uses in the BA Zone, in accordance with historical practices, as described in the staff report presented to the Planning Commission and City Council.

2. The proposed zoning is in compliance with the provisions of the California Environmental Quality Act (CEQA).

The proposed amendment is categorically exempt from the CEQA pursuant to section 15301 (Existing Facilities) of the CEQA Guidelines because it can be seen that the regulations for use of existing public facilities for private operations, requiring a discretionary use permit, will result in negligible or no expansion of use and it can be seen with certainty that these regulations related to private uses on publicly owned property will have no possibility of a significant effect on the environment and none of the exceptions in CEQA Guidelines section 15300.2 apply.

3. The site is physically suitable (including, but not limited to, access, provision of utilities, compatibility with adjoining land uses, and absence of physical constraints) for the requested zoning designation(s) and anticipated land use development(s).

The proposed ordinance amendment is not being applied to any specific site. The modifications would be applied to sites in the BA Zone which are currently maintained as 67 CC 02-06-2024
67 of 723
MCA-2023-003 - Amendment to Chapter 19.76 - Page 2
publicly operated public serving uses. The expansion of allowed uses to privately operated public serving uses is not expected to result in a substantial change in operations and therefore, the sites in the BA zone are considered to be physically suitable for the anticipated uses.

4. The proposed zoning will promote orderly development of the City.

The proposed amendment is intended to promote the continued use of BA zoned properties for public serving uses with flexibility in operator. The amendment is not expected to result in significant modifications or physical changes to these sites which are currently used for public serving uses.

5. That the proposed zoning is not detrimental to the health, safety, peace, morals and general welfare of persons residing or working in the neighborhood of subject parcels.

The proposed ordinance amendment is not being applied to any specific site. The modifications would be applied to sites in the BA Zone which are currently maintained as publicly operated public serving uses. The expansion of allowed uses to privately operated public serving uses is not expected to result in a substantial change in operations. The effect of the private operation on the health, safety, peace, moral and general welfare of persons residing or working in the neighborhood of a site will be reviewed when an application is made for a specific site.

WHEREAS, Cupertino Municipal Code Chapter 19.76 outlines the requirements for uses proposed in the City’s Public Building (BA) zoning district; and WHEREAS, the maintenance and retention of public school sites as educational facilities is considered as being in the public interest; and WHEREAS, the City has certain General Plan Goals, Policies and Strategies that support the retention of publicly owned property, it does not have regulations that specifically address the private use of these properties, and that the amendments to Chapter 19.76 will provide a standard to review private operations on publicly owned property;
WHEREAS, the Ordinance amends the City's Municipal Code as set forth in Exhibit A to clarify the development standards to be applied to private uses on publicly owned land within BA Zones; and
WHEREAS, the Ordinance is consistent with the City's General Plan and the public health, safety, convenience, and general welfare; and
68 CC 02-06-2024
68 of 723
MCA-2023-003 - Amendment to Chapter 19.76 - Page 3
WHEREAS, adoption of the Ordinance is exempt from CEQA under Guidelines section 15301 because it can be seen that the regulations for use of existing public facilities for private operations, requiring a discretionary use permit, will result in negligible or no expansion of use and it can be seen with certainty that these regulations related to private uses on publicly owned property will have no possibility of a significant effect on the environment; and WHEREAS, following necessary public notices given as required by the procedural ordinances of the City of Cupertino and the Government Code, the Planning Commission held a public hearing on November 14, 2023 to consider the Ordinance; and
WHEREAS, on November 14, 2023, by Resolution 2023-14, the Planning Commission recommended on a unanimous vote that the City Council adopt the proposed Municipal Code Amendment to clarify development standards in the Public Building (BA) Zones; and
WHEREAS, the City Council of the City of Cupertino is the decision-making body for this Ordinance; and
WHEREAS, the City Council of the City of Cupertino held a duly noticed public hearing on December 5, 2023, and after considering all testimony and written materials provided in connection with that hearing introduced this ordinance and waived the reading thereof.

NOW, THEREFORE, THE CITY COUNCIL OF THE OF CITY OF CUPERTINO DOES ORDAIN AS FOLLOWS:

SECTION 1. Adoption.

The Cupertino Municipal Code is hereby amended as shown below. Text added to existing provisions is shown in bold double-underlined text (example) and text to be deleted in shown in strikethrough (example). Text in existing provisions is not amended or readopted by this Ordinance. Text in italics is explanatory and is not an amendment to the Code.

1. Table 19.76.030 in Section 19.76.030 of the Cupertino Municipal Code is hereby amended to read as follows:

Table 19.76.030 - Permitted, Conditional, and Excluded Uses in BA, BQ and T Zones Uses Zoning Districts

BA BQ T
69 CC 02-06-2024
69 of 723
MCA-2023-003 - Amendment to Chapter 19.76 - Page 4
Uses Zoning Districts

1. Buildings and other uses on land owned or utilized by a federal, State, county, or city government or authority, or by a special district created for public purposes under the laws of the State of California are permitted in a BA zone.

P - -

2. Privately operated educational uses and privately operated public serving uses, including, but not limited to, day care and private educational facilities, which, in the opinion of the Director of Community Development, are similar to the permitted uses in the BA zoning district, and which do not create significant adverse impacts to the surrounding area.(1) CUP -
PC

3. Rotating homeless shelter provided that the following conditions are met:
a. Shelter is located within an existing church structure; b. The number of occupants does not exceed twentyfive; c. The hours of operation do not exceed six p.m. to
seven a.m.;
d. Adequate supervision is provided;
e. Fire safety regulations are met; and
f. Operation period does not exceed two months in any
twelve-month period at any single location.
- P -

4. Permanent emergency shelter provided the following
conditions are met:
a. Section 19.76.030(2)(b), (d), (e);
b. A management plan is provided which includes a
detailed operation plan.
c. Shelter is available to any individual or household
regardless of their ability to pay; and
d. Occupancy is limited to six months or less.
- P -

5. Public utility companies regulated by the Public Utility Commission for uses restricted to administrative and office buildings, communication equipment buildings, including parking, landscaping and maintenance within an enclosed area or storage yard;
- CUP
- PC -

6. Religious, civic, and comparable organizations, for uses restricted to church buildings, community halls,
administrative buildings, schoolrooms, recreational facilities, and athletic fields, convents, seminaries, and similar uses customarily associated with churches, including parking and landscaping areas;
- CUP
- PC -
70 CC 02-06-2024
70 of 723
MCA-2023-003 - Amendment to Chapter 19.76 - Page 5
Uses Zoning Districts

7. Childcare facility, residential care facilities, congregate residence, hospitals, vocational and specialized schools; - CUP - PC -

8. Lodges, clubs, country clubs, including accessory uses such as swimming pools, picnic areas, golf courses, driving tees or ranges, miniature golf courses (all uses to be restricted to members of the above organizations and their guests);
- CUP
- PC -

9. Large-family daycare home; - CUP
- PC -

10. Airports, airfields and helicopter terminals, including administration and service buildings, maintenance and
storage yards;
- - CUP
- PC

11. Railroads, including terminals and stations, freight yards, marshaling yards, storage yards, administrative and service buildings;
- - CUP
- PC

12. Bus terminals and stations, including administration and service buildings, maintenance and storage yards; - - CUP - PC

13. Freeways, expressways, and other roads with limited or controlled access, including administrative buildings and maintenance yards.
- - CUP
- PC
Key:

P – Permitted Use
- – Not Allowed
CUP - Admin. – Conditional Use Permit issued by the Director of Community Development
CUP - PC – Conditional Use Permit issued by the Planning Commission CUP - CC – Conditional Use Permit issued by the City Council Ex – Excluded Uses
(1) Provided such use is conducted on property owned by a federal, State, county, or city government or authority, a special district created for public purposes under the laws of the State of California, or any other governmental agency, and leased for said uses.

SECTION 2: Severability and Continuity.

The City Council declares that each section, sub-section, paragraph, sub-paragraph, sentence, clause and phrase of this ordinance is severable and independent of every other section, sub-section, paragraph, sub-paragraph, sentence, clause and phrase of this ordinance. If any section, sub-section, paragraph, sub-paragraph, sentence, clause or phrase of this ordinance is held invalid, or its application to any person or 71 CC 02-06-2024
71 of 723
MCA-2023-003 - Amendment to Chapter 19.76 - Page 6
circumstance, be determined by a court of competent jurisdiction to be unlawful, unenforceable or otherwise void, the City Council declares that it would have adopted the remaining provisions of this ordinance irrespective of such portion, and further declares its express intent that the remaining portions of this ordinance should remain in effect after the invalid portion has been eliminated. To the extent the provisions of this Ordinance are substantially the same as previous provisions of the Cupertino Municipal Code, these provisions shall be construed as continuations of those provisions and not as an amendment to or readoption of the earlier provisions.

SECTION 3: California Environmental Quality Act.

The adoption of the Ordinance is exempt from the requirements of the California Environmental Quality Act, together with related State CEQA Guidelines (collectively, “CEQA”), under Guidelines section 15301 because CEQA applies only to actions which have the potential for causing a significant effect on the environment. Where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA. In this circumstance, the proposed action of enacting regulations for use of existing public facilities for private operations, requiring a discretionary use permit, would have no or only a de minimis effect on the environment because it would result in negligible or no expansion of use. The foregoing determination is made by the City Council in its independent judgment.

SECTION 4: Effective Date.

This Ordinance shall take effect thirty days after adoption as provided by Government Code Section 36937.

SECTION 5: Publication.

The City Clerk shall give notice of adoption of this Ordinance as required by law.

Pursuant to Government Code Section 36933, a summary of this Ordinance may be prepared by the City Clerk and published in lieu of publication of the entire text. The City Clerk shall post in the office of the City Clerk a certified copy of the full text of the Ordinance listing the names of the City Council members voting for and against the ordinance.

INTRODUCED at a regular meeting of the Cupertino City Council on December 5, 2023 and ENACTED at a regular meeting of the Cupertino City Council on February 6, 2024 by the following vote:

Members of the City Council
72 CC 02-06-2024
72 of 723
MCA-2023-003 - Amendment to Chapter 19.76 - Page 7
AYES:

NOES:

ABSENT:

ABSTAIN:

SIGNED:
______________________
Sheila Mohan, Mayor
City of Cupertino
________________________
Date
ATTEST:
_______________________
Kirsten Squarcia, City Clerk
________________________
Date
APPROVED AS TO FORM:
_______________________
Christopher D. Jensen, City Attorney
________________________
Date

73 CC 02-06-2024
73 of 723

CITY OF CUPERTINO
Agenda Item
23-12581 Agenda Date: 2/6/2024
Agenda #: 8.

Subject: Second reading of amendments to Municipal Code Chapter 19.12, Chapter 19.28 and Chapter 19.112 regarding Two‐Story Permit and Accessory Dwelling Unit (ADU) laws. (Application No. MCA‐2023‐002; Applicant: City of Cupertino; Location: City‐wide) Conduct the second reading and enact Ordinance No. 23‐2254: “An Ordinance of the City Council of the City of Cupertino to amend Municipal Code Chapter 19.12, Chapter 19.28 and Chapter 19.112 regarding Two‐Story Permit and Accessory Dwelling Unit (ADU) Laws.” CITY OF CUPERTINO Page 1 of 1 Printed on 1/31/2024
powered by Legistar™ 74
CC 02-06-2024
74 of 723

CITY COUNCIL STAFF REPORT
Meeting: February 6, 2024
Subject
Second reading of amendments to Municipal Code Chapter 19.12, Chapter 19.28 and Chapter 19.112 regarding Two-Story Permit and Accessory Dwelling Unit (ADU) laws. (Application No. MCA-2023-002; Applicant: City of Cupertino; Location: City-wide)
Recommended Action
Conduct the second reading and enact Ordinance No. 23-2254: “An Ordinance of the City Council of the City of Cupertino to amend Municipal Code Chapter 19.12, Chapter 19.28 and Chapter 19.112 regarding Two‐Story Permit and Accessory Dwelling Unit (ADU) Laws.”
Discussion
During a regular City Council Meeting held on January 17, 2024, City Council conducted the first reading for Ordinance No. 23-2254. Staff presented details about the need to streamline the development review process by eliminating the Two-Story Permit process, as well as updating Chapter 19.112, Accessory Dwelling Units, to keep consistent with the State of California’s various Assembly and Senate Bills affecting ADU production.

As part of the motion, City Council made the following revisions to Ordinance No. 23-2254:
 Allow any combination of ADUs on lots zoned for single-family use and with "no more than two" on lots zoned for duplexes.
 Table 19.112.030 be revised to read "Site Development Regulations for Streamlined Accessory Dwelling Units and Junior Accessory Dwelling Units Associated with Single‐Family Residential Uses and Duplexes"  For non-streamlined ADUs, an allowance for heights of 18 feet for a detached ADU within a half mile walking distance of a major transit stop or corridor, and 25 feet if attached to a principal dwelling unit;  For non-streamlined ADUs, an allowance for a second story on attached or detached ADUs if located within a half mile walking distance of a major transit stop of corridor.
75 CC 02-06-2024
75 of 723
If Council approves these changes today, the proposed ordinance will take effect after thirty (30) days on March 6, 2024.

Prepared by: Gian Paolo Martire, Senior Planner
Reviewed by: Benjamin Fu, Director of Community Development Department
Approved for Submission by: Matt Morley, Assistant City Manager Attachments:

A – Draft Ordinance No. 23-2254
76 CC 02-06-2024
76 of 723
ORDINANCE NO.

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF CUPERTINO TO AMEND MUNICIPAL CODE CHAPTER 19.12, CHAPTER 19.28 AND CHAPTER

19.112 REGARDING TWO‐STORY PERMIT AND ACCESSORY DWELLING UNIT (ADU) LAWS
The City Council of the City of Cupertino finds that:

1. An assessment of the City’s development review processes and requirements revealed that out of the 768 Planning permit applications that have been received since November of 2021, the City has taken in 98 Two‐Story Permit applications, the most of any codified permitting process. To improve efficiency, staff proposes to eliminate the discretionary Two‐Story Permit requirement, with the intended result to streamline the permitting process and save residents time and money when upgrading their homes.

2. State Law changes have rendered the City’s Accessory Dwelling Unit ordinance (CMC

19.112) obsolete and unenforceable.

3. The City Council of the City of Cupertino held a duly noticed public hearing on December 5, 2023, and after considering all testimony and written materials provided in connection with that hearing introduced this ordinance and waived the reading thereof.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF CUPERTINO DOES ORDAIN AS FOLLOWS:

SECTION 1. Adoption.

The Cupertino Municipal Code is further amended as set forth in Attachment A.

SECTION 2: Severability and Continuity.

The City Council declares that each section, sub‐section, paragraph, sub‐paragraph, sentence, clause and phrase of this ordinance is severable and independent of every other section, sub‐section, paragraph, sub‐paragraph, sentence, clause and phrase of this ordinance. If any section, sub‐section, paragraph, sub‐paragraph, sentence, clause or phrase of this ordinance is held invalid, or its application to any person or circumstance, be determined by a court of competent jurisdiction to be unlawful, unenforceable or otherwise void, the City Council declares that it would have adopted the remaining provisions of this ordinance irrespective of such portion, and further declares its express intent that the remaining portions of this ordinance should remain in effect after the invalid portion has been eliminated. To the extent the provisions of this Ordinance are substantially the same as previous provisions of the Cupertino Municipal Code, these 77 CC 02-06-2024
77 of 723
provisions shall be construed as continuations of those provisions and not as an amendment to or readoption of the earlier provisions.

SECTION 3: Effective Date.

This Ordinance shall take effect thirty days after adoption as provided by Government Code Section 36937.

SECTION 4: Publication.

The City Clerk shall give notice of adoption of this Ordinance as required by law.

Pursuant to Government Code Section 36933, a summary of this Ordinance may be prepared by the City Clerk and published in lieu of publication of the entire text. The City Clerk shall post in the office of the City Clerk a certified copy of the full text of the Ordinance listing the names of the City Council members voting for and against the ordinance.

INTRODUCED at a regular meeting of the Cupertino City Council on January 17, 2024 and ENACTED at a regular meeting of the Cupertino City Council on February 6, 2024 by the following vote:

Members of the City Council
AYES:

NOES:

ABSENT:
78 CC 02-06-2024
78 of 723

ABSTAIN
SIGNED:

Shelia Mohan, Mayor
City of Cupertino
Date
ATTEST:

Kirsten Squarcia, City Clerk Date
APPROVED AS TO FORM:

Christopher D. Jensen, City Attorney Date
79 CC 02-06-2024
79 of 723
80 CC 02-06-2024
80 of 723
Ordinance No.

ATTACHMENT A ‐ AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF CUPERTINO TO AMEND MUNICIPAL CODE CHAPTER 19.12, CHAPTER 19.28 AND CHAPTER 19.112 REGARDING TWO‐STORY PERMIT AND ACCESSORY

DWELLING UNIT (ADU) LAWS

1. Amendments to Title 19 concerning the Two‐Story Permit

19.12.030 Approval Authority.

Table 19.12.030 shows the approval authority, Noticing Radius, Expiration Date and Extension Dates for different types of Permits.

Attachment A‐ Page 6
81 CC 02-06-2024
81 of 723
Table 19.12.030 - Approval Authority
Type of Permit or Decision A, B
Administrative
Review
Arts and
Culture
Commission
Planning
Commission City Council
Public
Hearing/
Public
Meeting/
Comment
Period C
Noticing/ Noticing
Radius D
Posted
Site
Notice
Expirati
on
Date E
Chapter/ Findings
General Plan Amendment
Major F - R F PH CA. Govt. Code
65350-
65362
Yes - CA. Govt. Code
65350-
Minor G - R F PH Yes - 65362
Zoning Map Amendments
Major F - R F PH CA. Govt. Code
65853-
65857
Yes - 19.152.020
Minor G - R F PH Yes -
Zoning Text Amendments - R F PH
CA. Govt. Code
65853-
65857 - -

19.152.030
Specific Plans - R F PH
CA. Govt. Code
65350-
65362 - -

20.04.030
Development Agreements - R F PH CA. Govt. Code
65867 Yes - 19.144.120
Development Permits
Major F, H - F/R A1/F PM

19.12.110/300'
Yes 2 years

19.156.050
Minor G F A1 A2 PM Yes 2 years
Conditional Use Permits
Major F, H, I F A1/F/R A1/ A2/F PH CA. Govt. Code
65905
Yes 2 years

19.156.050
Minor G, I F A1/F/R A1/ A2/F PH Yes 2 years
Temporary F A1 A2 - None No 1 year None/ 19.160.030
Density Bonus (Residential) R F
Based on
concurrent
application

19.56 Adult-Oriented Commercial Activity (CUP) R F PH CA. Govt. Code 65905/300' Yes 2 years

19.128.030 &

19.128.040
Architectural and Site Approval
Major J F A1 A2 PM

19.12.110/
Yes 2 years

19.168.030
Minor K F A1 A2 PM Yes 2 years
Amendment
Major F, H - F A1 Varies L Yes 2 years 19.44,
Attachment A – Page 4
82 CC 02-06-2024
82 of 723
Ordinance No.

Table 19.12.030 - Approval Authority
Type of Permit or Decision A, B
Administrative
Review
Arts and
Culture
Commission
Planning
Commission City Council
Public
Hearing/
Public
Meeting/
Comment
Period C
Noticing/ Noticing
Radius D
Posted
Site
Notice
Expirati
on
Date E
Chapter/ Findings
Minor G F A1 A2 Varies L
Depends on permit
being amended L
Yes 2 years

19.144,

19.156,

19.164
Minor Modification F A1 A2 - None No 2 years 19.164
Hillside Exception/ Height Exception/ Heart
of the City Exception I
- F A1 PH 19.12.110/300' Yes 2 years

19.40.080,

19.24.070,

19.136.090
Variance F A1 A2 PH CA. Govt. Code
65905 Yes 2 years 19.156.060
Status of non- conforming Use - F A1 PH 19.12.110/300' Yes - 19.140.110 Wireless Antennas I
F
F/ A1 A2 Varies I
Depends on
application type Yes 2 years 19.136.090
Signs
Permits F A1 A2 - None No 1 year 19.104
Neon, Reader board & Freeway Oriented
Signs I
F - F/A1 A1/A2 PM 19.12.110/300’ No 1 year 19.104
Programs F A1 A2 - None No 1 year

19.104
Exceptions I
-
- F A1 PM 19.12.110/
Adjacent Yes 1 year 19.104.290
Parking Exceptions I FM - F/A1 A1
/A2 Varies M

19.12.110/
Adjacent/ 300’ N Yes 1 year 19.124.050
Fence Exceptions
F - A1 A2 L PM 19.12.110/
Adjacent Yes 1 year 19.48.060
Front Yard Interpretation F A1 A2 PM 19.12.110/
Adjacent Yes 1 year 19.08
R-1 Ordinance Permits
Residential Design Review I F - F/A1 A1 L/ A2 Varies I

19.12.110/
Adjacent
Yes 1 year 19.28.140
Minor Residential F A1 A2 CP No 1 year
Exceptions I
- - F A1 PM Yes 1 year
Miscellaneous Ministerial Permit F - - None Adjacent Yes 1 Year 19.28.150 and

19.40.090
Attachment A‐ Page 5
83 CC 02-06-2024
83 of 723
Ordinance No.

Table 19.12.030 - Approval Authority
Type of Permit or Decision A, B
Administrative
Review
Arts and
Culture
Commission
Planning
Commission City Council
Public
Hearing/
Public
Meeting/
Comment
Period C
Noticing/ Noticing
Radius D
Posted
Site
Notice
Expirati
on
Date E
Chapter/ Findings
Protected Trees
Tree Removal F A1 A2 CP Adjacent unless
exempt Yes 1 year 14.18.180
Heritage Tree Designation & Removal - F A1 PM 19.12.110/ 300' Yes - 14.18
Tree Management Plan F A1 A2 - None No - 14.18
Retroactive Tree Removal F A1 A2 - None No - 14.18
Reasonable Accommodation F A1 A2 - None No 1 year 19.52.050 Extensions O
Parking, Fence & Sign Exceptions & Front
Yard Interpretations F A1 A2 - None No 1 year
Neon, Reader board & Freeway Oriented
Signs F A1 A2 - None No 1 year
Two Story Permits, Minor Residential
Permits and Exceptions F A1 A2 - None No 1 year
Tree Removals F A1 A2 - - No 1 year
All other projects F A1 A2 -

19.12.110/
None No 2 years
Miscellaneous Ministerial Permit Not Allowed
Public Art Architectural and Site Approval Permits
Public Art
- F - A1 PM None None None 2.80 and 19.148
Art in lieu payment
- R - F PM None None None 2.80 and 19.148
KEY:

R—Review and recommendation body F—Final decision-making body unless appealed A1—Appeal Body on first appeal A2—Appeal body on second appeal PH—Public Hearing PM—Public Meeting
CP—Comment Period
Attachment A‐ Page 6
84 CC 02-06-2024
84 of 723
Notes:

A. Permits can be processed concurrently with other applications, at the discretion of the Director of Community Development.

B. Projects with combined applications shall be processed at the highest level of approval in conformance with Section 19.04.090.

C. Public Hearing: Projects types that need noticing pursuant to the CA Government Code; Public Meeting: Project types that need only a mailed notice and no newspaper notices; Comment Period: Project types that need only a mailed notice and do not need a public hearing or public meeting.

D. Noticing Radius of an application in a combined application shall correspond to the maximum noticing radius required for any one of the applications.

E. Expiration date of an application in a combined application shall correspond to the maximum expiration date allowed for any one of the development applications (not including Subdivision Map Act applications, General Plan Amendments and Zoning Map or Text Amendments.)
F. Major General Plan Amendment, Conditional Use Permit, Development Permit application ‐ for more than ten thousand square feet of commercial and/or industrial and/or office and/or other non‐residential use, or greater than six residential units.

G. Minor General Plan Amendment, Conditional Use Permit, Development Permit application ‐ for ten thousand square feet or less of commercial and/or industrial and/or office and/or other non‐residential use, or six or less residential units.

H. City Council review for applications with new development greater than fifty thousand square feet of commercial, and/or greater than one hundred thousand square feet of industrial and/or office and/or other non‐residential use, and/or greater than fifty residential units.

Planning Commission review for all other applications.

I. Please see specific zoning district regulations or chapters in this title that apply to the subject property or project for approval authority.

J. Major Architectural and Site Approval application ‐ architectural and site approval for all projects that are not a Minor Architectural and Site Approval application.

Attachment A – Page 7
85 CC 02-06-2024
85 of 723
K. Minor Architectural and Site Approval application ‐ single family home in a planned development zoning district, minor building architectural modifications, landscaping, signs and lighting for new development, redevelopment or modification in such zones where review is required and minor modifications of duplex and multi‐ family buildings.

L. Meeting type and noticing are dependent on the underlying permit being modified.

M. Parking Exceptions approved by the Director of Community Development need a comment period.

N. Parking Exceptions in Single‐family residential (R1) zones and Duplex (R2) zones need adjacent noticing.

All other Parking Exceptions need notices within three hundred feet of the exterior boundary of the subject property.

O. Application must be filed prior to expiration date of permit. Permit is extended until decision of the Approval Body on the extension.

19.12.110 Noticing.

A. Notice of Public Hearing: Noticing shall be provided in the following mannerfor applications that need a public hearing:

1. Notice of hearing shall be given by publication once in a local newspaper of general circulation not less than
ten days priorto the date of the hearing as provided in Section 65090 of the California Government Code;

2. The City shall mail written notice by first class mail to:
a. Each owner of record of real property within the noticing radius per Section 19.12.030 of the exterior boundary of the property for which the application is made as the owner of record is shown in the last tax assessment roll pursuant to Section 65091 of the California Government Code;
b. Owner(s) of subject site or his or her authorized agent c. Project applicant(s)
d. Local agencies expected to provide water, sewage, streets, roads, schools or other essential facilities or services to the proposed project;
e. Any individual or entity that has filed a written request with the City Clerk requesting notification of
public hearings.

3. If the number of owners to whom notice would be mailed or delivered pursuant to subsection A2 above is greaterthan one thousand, in lieu of mailed or delivered notice, the Director may provide published notice as provided in Government Code Section 65091(3). 86 CC 02-06-2024
86 of 723

4. The notice shall contain the following:
a. The exact address of the property, if known, orthe location of the property, if the exact address is not known;
b. The date on which action on the application will be taken; c. A brief description, the content of which shall be in the sole discretion of the City, of the proposed project;
d. Reference to the application on file for particulars; e. A statement that any interested person, or agent thereof, may contact the city for additional information and/or plan.

Typographical and/or publishing errors shall not invalidate the notice nor any City action related to the notice.

B. Notice of Public Hearing for Zoning Text Amendments:

1. For amendments to zoning regulations: Notice of such hearing (publication) shall be given in the manner prescribed in Section 19.12.110 A(1) of this chapter.

2. For amendments to permitted uses of real property: Notice (mailing or publication) shall be given pursuant to Sections 19.12.110 A(2) or A(3), as the case may be.

C. Notice of Public Meeting: For projects requiring notice of a public meeting, notice shall be mailed in accord with 19.12.110A(2) or A(3), as the case may be, at least ten days prior to the date of the meeting date.

D. Notice of Comment Period: For projects requiring notice of a comment period, notice shall be mailed in accord
with 19.12.110A(2) and A(5), fourteen calendar days prior to the date of action on the application.

1. For permits issued pursuant to Chapter 19.28, Single Family Residential, the mailed notice shall include a copy of the site plan and elevation plans of the proposed project.

2. For permits issued pursuant to Chapter 14.18, Protected Trees, the mailed notice shall include a copy of the site plan and tree replacement/mitigation plan.

E. The City may also give notice of public hearings/public meetings in any other manner it deems necessary or desirable. If the Director of Community Development believes the project may have impacts beyond the range of the mailed notice, particularly on nearby residential areas, the Director, in his or her discretion, may expand noticing beyond the stated requirements in Section

19.12.030.

Compliance with the procedures set forth in this section shall constitute a good‐faith effort to provide notice, and the failure to provide notice, and the failure of any to receive notice, shall not prevent the City from proceeding with a hearing, meeting or from taking any action nor affect the validity of any action.

F. Posted Site Notice:

1. Applicants shall install notice(s) on the subject site that is/are clearly visible and legible from the right‐of‐way in accord with the requirements of Table 19.12.030. a. Applicants must install a site notice in the front yard of the subject site. b. For all applications other than Residential Design Review, Miscellaneous Ministerial Permits, and Tree Removal applications in R1 or R2 zones, if the 87 CC 02-06-2024
87 of 723
subject site has more than one property line abutting a street, the applicant may be required to install more than one notice.

2. The notice shall be a weatherproof sign, firmly attached to 5 foot tall posts and:
a. For Residential Design Review, Miscellaneous Ministerial Permits, and Tree Removal applications in R1 or R2 zones, shall be at least 2 feet tall and 3 feet wide. b. For all other applications that need a site notice, shall be at least 4 feet tall and 6 feet wide.

3. The notice shall be placed at least 14 days prior to the decision/public hearing and shall remain in place until an action has been taken on the application and the appeal period, if any, has passed.

4. The notice shall contain the following:
a. The exact address of the property, if known, orthe location of the property, if the address is not known;
b. A brief description of the proposed project, the content of which shall be at the sole discretion of the City;
c. City contact information for public inquiries;
d. A deadline forthe submission of public comments;
e. If proposing a physical alteration to an existing building or new buildings, at least one of the following visual representations of the proposed project:
i. A color perspective drawing or three‐dimensional (3‐D) photographic simulation of the proposed project, in a size deemed appropriate by the Director of Community Development.
ii. For Residential Design Review Permit, and Miscellaneous Ministerial Permit applications, a color or black and white perspective drawing or three‐dimensional (3‐D) photographic simulation of the proposed project, at least 11 inches by 17 inches in size.
iii. Visual Representation is not required for applications that do not have a material change in the physical appearance of the property.

G. Miscellaneous Ministerial Permit: For projects requiring notice of a Miscellaneous Ministerial Permit, notice shall be mailed in accord with subsection 19.12.110A(4) and posted on the property, fourteen calendar days prior to the date of action on the application.

19.28.040 Permits Required for Development.

Table 19.28.040 sets forth the planning permits required for development in the Single‐ Family Residential district.

Table 19.28.040 Permits Required
Planning permit
required prior to
building permit
Type of Project Approval
Authority
application
88 CC 02-06-2024
88 of 723
A. None Single‐family projects that do not require
exception or variance from the requirements of this Admin.

B. Minor Residential
Permit, pursuant to

1. One‐story encroachment into a required rear yard
setback, subject to requirements of Section

19.28.070
Admin 2. One‐story extension of an existing side yard
nonconforming building wall line, subject to
requirements of Section

19.28.100 in all districts except R1‐a
Chapter 19.12,
Administration

3. One‐story project with a gable end of a roof
enclosing an attic space projecting outside the
building envelope, subject to requirements of
Section 19.28.070 or 19.28.080

4. New or expanded second story deck or balcony
with views into neighboring residential side or
rear yards in all districts except R1‐a or on any
project previously developed pursuant to
Government Code Section 65852.21

5. Any active or passive solar structure that requires
variation from the setback or height restrictions
of this chapter, provided that no such structure
shall infringe upon solar easements or adjoining
property owners

6. One or two‐story addition or new home on a
sloped single‐family residential lot with
development on building pads/graded areas with
actual slopes equal to or greater than 20% and
with total floor area ratio of all structures on the
lot greater than 35%
C. Director’s Minor
Modification, pursuant
to Chapter 19.12,
Administration
Encroachment of porch elements into the required
front yard setback in the R1‐a zone, subject to the
requirements of Section 19.28.100
Admin
89 CC 02-06-2024
89 of 723
D. Residential Design
Review, pursuant to
Chapter 19.12,
Administration
Two‐story addition or new two‐story home in all
districts except R1‐a where:

1. Second floor to first floor area ratio is greater
than 66%, except any second to first floor ratio
for development on building pads/graded
areas with actual slopes equal to or greater
than 20%; and/or

2. Where second story side yard setback(s) are
less than 15 feet to any interior side property
line
Admin. with
design review
Two‐story addition, new two‐story home, and/or
second story deck in the R1‐a zone
PC
E. Exception,
pursuant to
Chapter 19.12,
Administration &
Section 19.28.130 ,
Exceptions
One or two‐story project requesting an exception
from Sections 19.28.070 [Development Regulations
(Building)],

19.28.080 [Eichler R1‐e Building Design
Requirements], and/or 19.28.110 [Landscape
Requirements].

PC
F. Hillside Exception,
pursuant to Chapter

19.12,
Administration
Development (area greater than 500 square feet) on
slopes greater than 30%
G. Architectural and
Site Approval,
pursuant to Chapter

19.12,
Administration
One or two‐story addition or new home on a sloped
single‐family residential lot with development on
building pads/graded areas with actual slopes equal
to or greater than 20% and where the cut plus fill of
the site exceeds 2,500 cubic yards
H. Conditional Use
Permit, pursuant to
Chapter 19.12,
Administration
Two‐story addition or new two‐story home in an R1
zoning district with an “i” suffix
I. Single‐Story Overlay
District
Application,
pursuant to Chapter

19.12 ,
Administration
Establishment orremoval of a Single‐Story Overlay
District in a Single Family Residential District
(Addition or removal of the “I” suffix in an R1
zoning district)
CC
J. Miscellaneous
Ministerial Permit

1. New one or two‐story duplex project in an R1
zoning district pursuant to Government Code
Section 65852.21

2. New one or two‐story single‐family home,
secondary principal dwelling unit, ortwo‐story
addition in an R1 zoning district pursuant to
Government Code Section 65852.21
Admin

19.28.110 Single‐Family Residential Design Guidelines and Principles.

Any new single‐family residential house or addition to an existing house shall be generally consistent with the adopted single‐family residential guidelines in Sections 19.28.110(A) and (B). 90 CC 02-06-2024
90 of 723
A. Single‐Family Residential Design Guidelines for all projects.1, 2

1. There shall not be a three‐car wide driveway curb cut.

2. No more than fifty percent of the front elevation of a house shall consist of garage area, unless the lot is not wide enough to accommodate.
a. In the R1‐a zone, the maximum width of a garage on the front elevation shall be twenty‐ five feet, which will accommodate a two‐car garage. Additional garage spaces shall only be provided through the use of a tandem garage or a detached accessory structure at the rear of the property.2

3. Usable Living area shall be closer to the street, while garages should be set back more.

4. All roofs shall have at least a one‐foot overhang.

5. Mechanical, heating, or cooling equipment or associated piping installed on the roof shall be screened from the public right away, except in R1-e zones where roof top equipment is not allowed.

6. Porches are encouraged.
a. In the R1‐a zone, the following porch design guidelines apply2:
i. When viewed from the street, a porch shall appear proportionately greater in width than in height. A porch differs from an entry element, which has a proportionately greater height than its width.
ii. Structural supports shall be designed such that the appearance is not obtrusive or massive.
iii. The use of large columns or pillars is discouraged. iv. The eave height for a front porch shall not be significantly taller than the eave height of typical single‐story elements in the neighborhood.
v. Porch elements shall have detailing that emphasizes the base and caps for posts and fence elements.

7. In R1‐6e and R1‐a zones, entry features shall not be higher than fourteen feet from natural grade to plate.2

19.28.140 Findings.

Sections 19.28.140(A), (B), (C), (D), and (E) set forth the findings required for a Minor Residential Permit, Two‐ Story Permit, Residential Design Review, and R‐1 Exception approval.

A. Minor Residential Permit Findings.
91 CC 02-06-2024
91 of 723

1. The project is consistent with the Cupertino General Plan, any applicable specific plans, zoning ordinances and the purposes of this title.

2. The granting of the permit will not result in a condition that is detrimental or injurious to property or improvements in the vicinity, and will not be detrimental to the public health, safety or welfare.

3. The proposed project is harmonious in scale and design with the general neighborhood.

4. Adverse visual impacts on adjoining properties have been reasonably mitigated.

B. Residential Design Review Findings.

1. The project is consistent with the Cupertino General Plan, any applicable specific plans, zoning ordinance and the purposes of this title.

2. The granting of the permit will not result in a condition that is detrimental or injurious to property or improvements in the vicinity, and will not be detrimental to the public health, safety or welfare.

3. The project is harmonious in scale and design with the general neighborhood.

4. The project is consistent with the two‐story design principles and generally consistent with the single‐ family residential design guidelines.

5. Adverse visual impacts on adjoining properties have been reasonably mitigated.

C. Residential Design Review Findings, R1‐a zone.

1. The project is consistent with the Cupertino General Plan and Title 19 of the Cupertino Municipal Code.

2. The granting of this permit will notresult in detrimental orinjurious conditions to the property or improvements in the vicinity, or to the public health, safety, or welfare. 92 CC 02-06-2024
92 of 723
Ordinance No.

3. The project is generally compatible with the established pattern of building forms, building materials, and designs of homes in the neighborhood.

4. The project is generally compatible with the Cityʹs single‐family residential design guidelines and the guidelines in this chapter and any inconsistencies have been found to not result in impacts on neighbors.

5. Significant adverse visual and privacy impacts as viewed from adjoining properties have been mitigated to the maximum extent possible.

D. R‐1 Exception Findings.

1. The literal enforcement of this chapter will result in restrictions inconsistent with the spirit and intent of this chapter.

2. The proposed development will not be injurious to property or improvements in the area, nor be detrimental to the public safety, health and welfare.

3. The exception to be granted is one that will require the least modification of the prescribed design regulation and the minimum variance that will accomplish the purpose.

4. The proposed exception will not result in significant visual impact as viewed from abutting properties.

2. Amendments to Title 19 concerning Accessory Dwelling Units

19.112.010 Purpose; Incorporation by Reference; Consistency with State Law.

The purpose of this chapter is to promote the goal of affordable housing within the City through provision of additional housing in certain residential, agricultural residential, and mixed‐use zoning districts in a manner which minimizes adverse impacts of accessory dwelling units on neighborhoods. Unless otherwise defined in this Title, all terms used in this Chapter shall be defined and interpreted in accordance with Government Code Sections 65852.2 and 65852.22. In the event of a conflict between this Chapter and the requirements of State law, the requirements of State law, including the requirements of Government Code Sections 65852.2 and 65852.22, shall prevail.

19.112.020 Accessory Dwelling Unit Regulations.

Notwithstanding any provision of this title to the contrary:

1. Accessory dwelling units are permitted on lots within any residential or mixed‐use residential zoning district. The lot must have an existing single family dwelling unit or if zoned multi‐family or mixed use residential, at least one residential unit. If the lot is vacant, an accessory dwelling unit may only be proposed in conjunction with the development of at least one residential unit. Notwithstanding the underlying zoning, an accessory dwelling Attachment A‐ Page 15
93 CC 02-06-2024
93 of 723
Ordinance No.

unit developed pursuant to this chapter does not cause the lot upon which it is located to exceed its maximum the allowable density on the lot.

2. Accessory dwelling units must comply with the site development regulations and guideline specified in those zoning districts for dwelling units, including but not limited to: lot coverage; floor area ratio; height; setbacks; landscape; the regulations contained in this chapter; Chapter 19.100, Accessory Structures/Buildings; and Chapter 19.124, Parking; except as those standards are modified by this chapter.

3. No impact fees, as defined in Government Code Section 65852.2(f)(3)(B), shall be imposed on any accessory dwelling unit or junior accessory dwelling unit with a gross floor area of less than 750 square feet. Impact fees imposed on accessory dwelling units greater than or equal to 750 feet shall be charged proportionally in relation to the square footage of the primary dwelling unit in compliance with Government Code Section 65852.2(f)(3)(A).

4. Accessory dwelling units are permitted on lots within any residential or mixed‐use residential zoning district. The lot must have an existing single family dwelling unit or if zoned multi‐family or mixed use residential, at least one residential unit. If the lot is vacant, an accessory dwelling unit may only be proposed in conjunction with the development of at least one residential unit. Notwithstanding the underlying zoning, an accessory dwelling unit developed pursuant to this chapter does not cause the lot upon which it is located to exceed its maximum the allowable density on the lot.

5. Accessory dwelling units must comply with the site development regulations and guideline specified in those zoning districts for dwelling units, including but not limited to: lot coverage; floor area ratio; height; setbacks; landscape; the regulations contained in this chapter; Chapter 19.100, Accessory Structures/Buildings; and Chapter 19.124, Parking; except as those standards are modified by this chapter.

19.112.030 Site Development Regulations for Streamlined Accessory Dwelling Units & Junior Accessory Dwelling Units.

Pursuant to California Government Code Section 65852.2(e), the City shall approve the following streamlined accessory dwelling units if the specified development standards and use restrictions are met, as identified in:

A. Table 19.112.030A for single‐family residential uses and B. Table 19.112.030B for multi‐family residential uses.

Attachment A‐ Page 16
Table 19.112.030A: Site Development Regulations for Streamlined Accessory Dwelling Units and Junior Accessory Dwelling Units Associated with Single‐Family Residential Uses and Duplexes 94 CC 02-06-2024
94 of 723
Ordinance No.

Conversion of space within principal
dwelling unit or accessory structures
New Construction Attached or
Detached Accessory Dwelling
Unit ≤ 800 s.f.

1. Size of living space, exclusive of decks
a. Minimum
size
150 s.f.
b. Maximum
size
No size limitation as long as the unit:
i. Is wholly within the space of a proposed
or existing single‐family dwelling or the
existing space of an accessory structure,
and
ii. Does not require either:
• An addition of more than 150 square
feet to an existing accessory structure to
accommodate ingress and egress only, or
• Any addition to an existing single‐
family dwelling unit.
800 s.f.

2. Number of
Units
Maximum three ADUs per single-family residential lot, and maximum two ADUs per duplex lot, in any combination of the following:
 Attached ADU,
 Conversion of existing space ADU (whether in principal dwelling unit or existing accessory structure),
 Detached ADU, or
 Junior ADU

3. Setbacks Per the underlying zoning district
except that if the existing structures do
not meet these standards, the side and
rear setbacks shall be sufficient for fire
safety and life safety.
a. At least four feet from the
rear and side lot lines.
b. An applicant alternately may
elect to follow the setback
standards for accessory
structures in
Chapter 19.100.

Attachment A‐ Page 17
95 CC 02-06-2024
95 of 723
Ordinance No.

1 An additional two feet in height is permitted to accommodate a roof pitch on the accessory dwelling unit that is aligned with the roof pitch of the primary dwelling unit.

Attachment A‐ Page 18

4. Height The conversion shall not change the height
of the existing structure.
a. 18 feet for detached ADU
b. If accessory dwelling unit
attached to principal
dwelling, 25 feet or the
height limitations
applicable to the principal
dwelling, whichever is
lower.
c. An applicant alternatively
may elect to follow the
height standards for
accessory structures in
Chapter 19.100.

5. Second‐story
accessory
dwelling unit
Allowed if the unit is a conversion of
existing second story portion of the
principal dwelling unit.

Allowed

6. Parking for
accessory
dwelling unit
None

7. Direct outside
access
Independent outdoor access must be provided without going through the principal dwelling unit.

8. Separation
from principal
dwelling unit
The conversion must result in an
independent unit. With the exception of a
JADU that has a shared bathroom with the
principal dwelling unit, no interior doors or
other connections between the units are
permitted.

Detached from principal dwelling
unit
96 CC 02-06-2024
96 of 723
Ordinance No.

Attachment A‐ Page 19
Table 19.112.030B: Site Development Regulations for Streamlined Accessory Dwelling Units Associated with Existing Multi‐Family Residential Uses
Conversion of interior space within
multifamily dwelling structures
New Construction Detached
Accessory Dwelling Unit

1. Location Conversion of space within existing
dwelling structures that is not used as
livable space (e.g. existing units) including,
but not limited to, storage rooms, boiler
rooms, passageways, attics, basements, or
garages, as long as the unit meets building
standards for dwellings.

Detached from the multi‐family
dwelling structure(s)

2. Number of
Units
The greater of:
 25 percent of the existing number of
primary dwelling units, or
 One accessory dwelling unit.

No more than two units

3. Minimum Size 150 s.f.

4. Maximum Size No size limitation 1,200 s.f.

5. Setbacks The accessory dwelling unit shall not
increase the size of the existing structure.
a. Located at least four feet
from the side and rear lot
lines.
b. An applicant alternately may
elect to follow the setback
and height standards for
accessory structures in
Chapter 19.100.

6. Height The accessory dwelling unit shall not
increase the size of the existing structure.
a. 18 feet; or
b. An applicant alternatively
may elect to follow the
setback and height standards
for accessory structures in
Chapter 19.100.
97 CC 02-06-2024
97 of 723
Ordinance No.

7. Separation
from principal
dwelling units
The conversion must result in an
independent unit. No interior doors or
other connections between the units are
permitted.

Detached from principal dwelling
units.

19.112.040 Site Development Regulations for Non‐Streamlined Accessory Dwelling Units.

A. This section shall govern applications for ADUs and JADUs that do not qualify for approval under Section 19.112.030 or Government Code section 65852.2(e)(1) and for which the city may impose local standards pursuant to Government Code section 65852.2, subdivisions (a) through (d). Nothing in this section shall be interpreted to prohibit an ADU of up to 800 square feet, at the heights stated in Section 19.112.030(A) and .030(B), with a four‐foot side and rear setbacks.

B. The Development Standards for units governed by this section are provided in Section 19.112.040.

These regulations do not limit the height of existing structures converted into ADU/JADUs unless the envelope of the building is proposed to be modified beyond any existing legal, non‐conforming condition.

Table 19.112.040: Site Development Regulations for Non‐Streamlined Accessory Dwelling Units Created by New Construction and/or Additions to the Principal Dwelling Unit Attached >800s.f. Detached > 800 s.f.

A. Number of
Units
A maximum of three ADUs per single-family lot in any combination of the following, subject to the underlying zoning standards for lot coverage, floor area, open space, and setback:
o No more than one attached ADU
o No more than one conversion of existing space ADU (whether in principal dwelling unit or existing accessory structure), o No more than one detached ADU, or
o No more than one Junior ADU
Nothing in this Section shall permit the development of more than three ADUs or Junior ADUs on any single-family lot. Non-streamlined ADU provisions cannot be combined with streamlined provisions to add more than a total of three ADUs.

B. Size of living space, exclusive of decks

1. Minimum
size
150 s.f.
98 CC 02-06-2024
98 of 723
Ordinance No.

2. Maximum size a. Studios/one‐bedroom unit – 850 s.f.; two or more‐bedroom unit – 1,000 s.f.; and
b. Attached accessory dwelling units shall not exceed 50% of the existing primary dwelling.
c. Application of lot coverage, floor area, and open space standards:
i. Maximum size for units ≤ 800 s.f. shall not be limited by lot coverage, floor area ratio, and open space requirements per the underlying zoning.
ii. Maximum size for units > 800 s.f. is limited by lot coverage, floor area ratio, and open space requirements per the underlying zoning.

These standards shall apply to the gross floor area of the unit proposed. Notwithstanding application of these standards, an 800 s.f. detached accessory dwelling unit is permitted pursuant to Table

19.112.030A or an 800 s.f. attached accessory dwelling unit is permitted.

C. Setbacks Per the underlying zoning district,
except the required side and rear
setbacks are modified to four feet.

The proposed structure must comply
with the setback standards for
accessory structures in Chapter

19.100, except the street side setbacks
are modified to four feet.

D. Height Per the underlying zoning district,
except 25 feet or the height limitations
applicable to the principal dwelling,
whichever is lower, within half a mile of
a major transit stop or transit corridor.

The proposed structure must comply
with the height standards for
accessory structures in Chapter

19.100, except that a maximum height
of 18 feet is allowed within half a mile
of a major transit stop or transit
corridor.

E. Second‐story
accessory
dwelling units
Allowed within half a mile of a major transit stop or transit corridor.

F. Parking

1. Parking for
accessory
dwelling unit
One additional off‐street parking space shall be provided, if the principal dwelling unit has less than the minimum off‐street parking spaces for the applicable residential zoning district in which it is located, as required in Chapter 19.124 unless the accessory dwelling unit meets one of the following requirements:
a. Located within one‐half (1/2) mile of a public transit stop; or b. Located within one block of a car share vehicle pick‐up location; or 99 CC 02-06-2024
99 of 723
Ordinance No.

c. Located in an architecturally and historically significant historic district; or
d. The occupant of the unit is not allowed/offered a required on‐street parking permit; or
e. Is part of the proposed or existing primary residence or an accessory structure.

2. Replacement
parking spaces
for existing
covered,
uncovered or
enclosed parking
spaces
converted to an
accessory
dwelling unit
No replacement parking spaces are required.

G. Direct outside
access
Independent outdoor access must be provided without going through the principal dwelling unit.

H. Screening from
public street
All access to accessory dwelling units shall be on a different wall plane than the access to the principal dwelling unit.

I. Structure
Design
Should be compatible with the architectural style and materials of the principal structure.

J. Separation from
principal
dwelling unit
The ADU must be an independent unit.

No interior doors or other connections
between the ADU and the principal
dwelling unit are permitted.

Detached from principal dwelling
unit.

1. No setback is required for an accessory dwelling unit located within existing living area or an existing accessory structure, or an accessory dwelling unit that replaces an existing structure and is located in the same location and to the same dimensions as the structure being replaced.

19.112.050 Review Process.

Applications for accessory dwelling units conforming to the requirements of this chapter shall be reviewed ministerial without discretionary review and must be approved or denied within the time frame specified in Government Code Section 65852.2.

19.112.060 Accessory Dwelling Units Prohibited on Certain Lots.

Notwithstanding Government Code Section 65852.2 or 65852.22 or any provision of this Chapter, no accessory dwelling unit or a junior accessory dwelling unit shall be permitted on any lot in single‐ 100 CC 02-06-2024
100 of 723
Ordinance No.

family residence district (R‐1 or RHS) if a lot split has been approved pursuant to Section 18.12.70 and one or more residential units has been approved for construction pursuant to Section 19.28.150 or 19.40.090 ( Government Code Section 65852.21).
101
CC 02-06-2024
101 of 723

CITY OF CUPERTINO
Agenda Item
23-12641 Agenda Date: 2/6/2024
Agenda #: 9.

Subject: Exclusive Negotiation Agreement (ENA) with an affordable housing developer on a City owned parcel within the Mary Avenue right-of-way (APN: 326-27-053) Consider the Draft Agreement attached (Attachment A) and decide whether to enter into the Agreement.

CITY OF CUPERTINO Page 1 of 1 Printed on 1/31/2024
powered by Legistar™102
CC 02-06-2024
102 of 723

CITY COUNCIL STAFF REPORT
Meeting: February 6, 2024
Subject
Exclusive Negotiation Agreement (ENA) with an affordable housing developer on a City owned parcel within the Mary Avenue right-of-way (APN: 326-27-053) Recommended Action
Consider the Draft Agreement attached (Attachment A) and decide whether to enter into the Agreement.

Reasons for Recommendation
Background:

Since Fiscal Year (FY) 2020-21, the City of Cupertino’s City Work program prioritized engaging with philanthropic organizations to develop extremely low-income housing (ELI) for the intellectually and developmentally disabled (IDD) community. The FY 2021- 22 City Work Program narrowed down this item to excess City-owned property within the Mary Avenue right-of-way (the “Project Site”).

On August 18, 2022, the City of Cupertino issued a request for proposals (RFP) from qualified and experienced housing developers interested in developing an affordable housing project on a city-owned surplus property of approximately .79 acres. A Site Map of the Project, as well as a Vicinity Map, is provided as Figure 1. This RFP was a solicitation of competitive proposals to develop 100% affordable housing with a preference for the intellectually and developmentally disabled (IDD) populations. By the October 18, 2022, deadline, one developer had submitted a proposal.

Staff recommends entering into an Exclusive Negotiation Agreement (“ENA”) with the nonprofit public benefit corporations Cupertino Rotary Housing Corporation, Housing Choices Coalition for Persons with Developmental Disabilities, Inc., and Charities Housing Development Corporation of Santa Clara County (collectively, the “Developer”) to negotiate the terms of a ground lease at the City-owned properties located at APN: 326- 27-053.
103
CC 02-06-2024
103 of 723
Analysis
As part of the RFP process, respondents were required to demonstrate relevant experience, financial capabilities and conceptual development, financing and operations plans. The submittal requirements included the following:
 Statement of Interest
 Applicant Qualifications
 Project Description
 Financial Terms
 Other items, including, but not limited to, an outreach plan and proposed tenant selection plan.

The Developer Proposal
The Developer team consists of registered California non-profits focused on affordable housing development, both locally and regionally. Highlights of the Developer team include the following:
104
CC 02-06-2024
104 of 723
 Charities Housing:

A San Jose-based nonprofit 501(c) (3) public benefit corporation that for decades has developed, owned, and managed housing in Santa Clara County for extremely low and very low-income individuals, families, senior and folks with special needs, totaling over 1,400 units. In 2017, the City of Cupertino approved Charities Housing’s proposal for the Veranda, an affordable senior housing development on Stevens Creek Blvd that opened in 2019.
 The Cupertino Rotary Housing Corporation:

A Cupertino-based nonprofit 501(c) (3) public benefit corporation established for the purpose of developing low-income housing in Cupertino.  Housing Choices Coalition for Persons with Developmental Disabilities:

Housing Choices is a San Jose-based nonprofit 501 (c) (3) public benefit corporation that supports people with developmental and other disabilities with finding and retaining affordable housing in their community. Currently, they provide housing stability services at 18 different multi-family affordable housing properties, with nearly 300 units set-aside for households that include a person with a developmental or other disability. Housing Choices has additional commitments for another 364 rental units set-aside for people with developmental and other disabilities at 23 new affordable housing projects in differing stages of development.

The proposal envisions a 100% affordable, 40-unit, two-story, apartment development.

The individual apartments will be a mix of studio, one-, and two-bedroom units with one three-bedroom staff unit. The proposal is structured as a Special Needs project, using the Tax Credit criteria, which requires a minimum of 45% (18 units) to be reserved for a special needs population, in this case, IDD.

The remaining 21 apartments will serve extremely low and very low-income residents of the community. The affordability levels of the proposed units will range from 30% to 50% of the Area Median Income (AMI). The exact affordability mix by unit type is still to be determined, but the average affordability level for the entire development will not exceed 40% AMI. The applicant team has partnered with local architect Peter Ko of KO Architects.

If the ENA is approved by City Council, conceptual plans and drawings would be presented to the public for community input at future public meetings, which will further inform project design and scope as well as the necessary steps for environmental review.

Staff will continue to report the status of the proposal to City Council with updates as appropriate.

Exclusive Negotiation Agreement (“ENA”) Terms
The ENA establishes a one-year negotiation period between the City and the Developer.

While in effect, the City shall not negotiate with any other entity for the sale, lease, or development of the site. The Developer will hold public outreach meetings in coordination with the City, develop the scope, and present plans to the City for review 105
CC 02-06-2024
105 of 723
and approval. Both parties will work to develop the terms of a ground lease, disposition and development agreement (DDA), affordability covenants, and related documents. The City may terminate the ENA if the developer does not comply with or perform any provisions of this Agreement, or if progress is not being made in negotiations as determined by the City in good faith, but otherwise in the City’s sole and absolute discretion. The agreement authorizes the City Manager to extend the ENA period if it is determined that the Developer has met all its obligations pursuant to this Agreement and that the parties are making sufficient progress toward the negotiation of a mutually acceptable Disposition and Development Agreement and Ground Lease. A draft Term Sheet (Attachment B) has also been provided for City Council’s review.

Sustainability Impact
No sustainability impact.

Fiscal Impact
As stated in the Developer conceptual proposal, the City is proposed to contribute approximately $5 million in funding. However, this amount is subject to available funds in the City’s Below Market Rate fund, as well as the final scope of the project at the conclusion of the ENA period including commitments from the various funding sources, which could substantially decrease (or alternately increase) as a result. In addition to funding, the City may be asked to waive certain permitting and plan review fees. Such terms will be evaluated and negotiated during the ENA period and will be subject to City Council review and approval.

Finally, the City would contribute land for a nominal fee or limited ground lease payments over a 99-year ground lease term, which is common for 100% affordable projects.

The Mary Ave. parcel for ELI/Developmental Disability Housing Council work program item was originally adopted in Fiscal Year 2019-20 (FY20) at $150,000 (page 360 of FY20 Final Budget) in the Housing Services, BMR Affordable Housing budget as a special project (265-72-711 750-052). Those funds remained unspent and unencumbered for FY20 and FY21 and were carried over in both years. As part of the FY22 Final adopted budget (page 429) an additional $100,000 was allocated bringing total funding to date to $250,000.

This amount has been set aside to cover predevelopment costs such as creation of the new parcel and recording the map. To date a total of $14,703.62 has been spent or encumbered for Parcel Map and Legal Review.

California Environmental Quality Act
The execution of this agreement is not considered a project under CEQA. 106
CC 02-06-2024
106 of 723
_____________________________________
Prepared by: Gian Paolo Martire, Senior Planner
Reviewed by: Benjamin Fu, Director of Community Development Approved for Submission by: Matt Morley, Assistant City Manager Christophe Jensen, City Attorney
Attachments:

A - Draft Exclusive Negotiation Agreement
B - Draft Term Sheet
107
CC 02-06-2024
107 of 723
504.049/548061

EXCLUSIVE NEGOTIATING AGREEMENT
Mary Avenue
THIS EXCLUSIVE NEGOTIATING AGREEMENT ("Agreement") is entered into as of the date this Agreement is executed, as shown on the signature page hereof (the "Effective Date"), between the City of Cupertino, a General Law City ("City"), and the following California nonprofit public benefit corporations: Cupertino Rotary Housing Corporation, Housing Choices Coalition for Persons with Developmental Disabilities, Inc., and Charities Housing Development Corporation of Santa Clara County (collectively, the “Developer” and together with the City, the “Parties”) on the basis of the following purposes, intentions, and facts:

RECITALS
A. The City is the owner of that certain property located at _______, Cupertino, California (the "Property"). The City has determined that the Property can be used to provide housing affordable to extremely low and very low-income persons and families earning 30%-50% of Area Median Income.

B. The City issued a Request for Proposals ("RFP") for qualified developers to lease from the City the Property in accordance with the terms of a long-term ground lease, with a term of at least 99 years, and to develop and operate on the Property the most affordable housing units possible, in the most expedient manner.

C. The Developer submitted a proposal to lease and develop the Property dated October 18, 2022 (the "Proposal"), a copy of which is on file with the City. The Proposal includes the development of 40 units of housing of which 100% is proposed to be affordable to persons and families earning 30%-50% of Area Median Income, with 45% of the units intended for the intellectually and developmentally disabled (“IDD”) population (the "Project").

D. On the basis of the Proposal, the City has selected the Developer as the entity with which to negotiate a mutually acceptable Lease Disposition and Development Agreement ("LDDA") which will include, but not be limited to, terms and conditions on (i) the lease of the Property from the City to the Developer; (ii) the Developer's development of the Project on the Property; and (iii) affordability and occupancy restrictions that will apply to the Project. The LDDA will include as an exhibit a ground lease ("Ground Lease") to be entered into by the Parties in accordance with the terms of the LDDA.

E. The purpose of this Agreement is to establish procedures and standards for the negotiation by the City and the Developer of the LDDA and the Ground Lease. As more fully set forth in Section 3.1, the parties acknowledge and agree that this Agreement in itself does not grant the Developer the right to acquire the Property, nor does it obligate the Developer 108
CC 02-06-2024
108 of 723
504.049/548061 1
to any activities or costs to acquire the Property, other than the activities and costs reasonably necessary to discharge the Developer's obligations under this Agreement including the obligation to negotiate in good faith as contemplated by this Agreement.

NOW, THEREFORE, THE CITY AND THE DEVELOPER HEREBY AGREE AS FOLLOWS:

ARTICLE 1

EXCLUSIVE NEGOTIATIONS
Section 1.1 Good Faith Negotiations. The City and the Developer, acknowledging that time is of the essence, agree for the Negotiation Period set forth in Section 1.2 to negotiate diligently and in good faith to prepare and execute a LDDA, including a form of Ground Lease, in the manner set forth in this Agreement. For purposes of this Agreement a lack of diligent, good faith negotiations on the part of the Developer will include the Developer's failure to meet the Performance Benchmarks set forth in the Performance Schedule, subject to force majeure delays.

The LDDA and Ground Lease shall contain terms acceptable to the City and the Developer, in the respective exercise by each of its sole discretion. The LDDA shall include, without limitation, the conditions precedent to the City and the Developer entering into the Ground Lease, physical and land title conditions of the Property at the conveyance of the leasehold interest, including environmental conditions, the proposed development schedule for the Project and other matters that may be identified by either party during the course of completing the negotiations of the LDDA. The Ground Lease shall include, without limitation, the term of the Ground Lease, the ground rent and any ongoing obligations with regards to the development and operation of the Property. The RFP and the Proposal shall serve as the guide in the negotiation of the LDDA and the Ground Lease, although the parties recognize that review of additional information and further discussion may lead to refinement of the issues and concepts set forth in the RFP and the Proposal. Prior to the negotiation of the LDDA and the Ground Lease, the City and the Developer shall negotiate a non-binding term sheet ("Term Sheet") setting forth the principal terms to be included in the LDDA and the Ground Lease as more fully described below. During the Negotiation Period, the City will negotiate solely with the Developer with respect to lease and development of the Property.

Section 1.2 Negotiation Period. The negotiating period (the "Negotiation Period") shall commence on the Effective Date and shall expire one (1) year thereafter. The City Manager may, in her sole discretion, agree to extend the Negotiation Period if the City Manager determines that the Developer has met all of its obligations pursuant to this Agreement and that the Parties are making sufficient progress toward the negotiation of a mutually acceptable LDDA and Ground Lease. An extension shall be effective only if evidenced by an amendment executed by authorized representatives of the City and the Developer. 109
CC 02-06-2024
109 of 723
504.049/548061 2
The Developer acknowledges that time is of the essence to the City in negotiation of a LDDA and the Ground Lease. Accordingly, it is essential to the City that the parties negotiate in good faith and, if the parties do not succeed in timely negotiating a Term Sheet, LDDA and Ground Lease, that this Agreement expire as specified herein.

Section 1.3 Identity of Developer. The legal status of the Developer, its office address, and designated representatives to negotiate the LDDA and Ground Lease are as set forth in Exhibit B attached to this Agreement and incorporated herein by this reference.

ARTICLE 2

NEGOTIATION PROCESS AND RESPONSIBILITIES
Section 2.1 General Process.
(a) Negotiations Based on Proposal. The negotiations hereunder shall be based on a development concept generally as set forth in the RFP and the Proposal. During the Negotiation Period, the Developer may continue to develop the conceptual design and architecture of the Project, may continue to conduct marketing and feasibility analysis, and shall perform such other tasks as are reasonably necessary and appropriate to fulfill its obligation to negotiate in good faith with the City toward initially a mutually acceptable Term Sheet and ultimately an LDDA and Ground Lease.
(b) Reports, Studies, and Related Documents. The Developer shall provide the City with copies of all reports, studies, analyses, and similar documents in draft form, but excluding confidential information and communications with the Developer's legal counsel, prepared or commissioned by the Developer with respect to this Agreement and the lease and development of the Property, promptly upon their completion. The Developer shall not be deemed to make any representation to the City regarding the accuracy, completeness, methodology or current status of any such reports, studies or analysis, nor shall the Developer assume any liability with respect to any matter or information referred to or contained in such reports, nor shall the City have any claim against the Developer or any consultant of the Developer arising out of the contents of such reports.

While desiring to preserve its rights with respect to treatment of certain information on a confidential basis, the Developer acknowledges that the City will need sufficient, detailed information about the proposed lease and development of the Property (including, without limitation, financial information) to make informed decisions about the content and approval of the LDDA and Ground Lease.

The Developer acknowledges that the City is subject to the California Public Records Act ("Act"). The Act generally provides that written documents retained by the City are subject to disclosure upon the request of any third party except for specific limited exceptions provided for in the Act. The Developer acknowledges that the City will make information regarding the Project, the Property, the Proposal and this Agreement available to the public upon request as required by the Act. In order to successfully negotiate the LDDA and the Ground Lease, the parties believe that there will be specific documents that may be sensitive or contain proprietary 110
CC 02-06-2024
110 of 723
504.049/548061 3
information that they will want to exchange in order to review and understand the transaction.

The Developer shall designate as "Confidential" any information which the Developer provides to the City which the Developer desires to keep confidential and a statement as to why the request is consistent with the provisions of the Act. The City shall not be bound by the Developer's designation of records as "Confidential" or the reasoning therefore provided by the Developer, except as contained herein with respect for the procedure for the Developer filing a reverse-Public Records Act action.

If a request for disclosure of any information designated as "Confidential" by the Developer is made under the Act, the City shall timely notify the Developer in writing of the request to permit the Developer at its discretion and sole cost to file a reverse-Public Records Act action. If the Developer decides to file a reverse-Public Records Act action, it shall inform the City in writing of this intention within 10 days of the date of the request for disclosure of the specific Confidential documents that will be the subject of the action, and the date by which it shall file the action. The City shall withhold any such Confidential documents identified by the Developer until the date identified in writing by the Developer, and upon the filing of the Developer’s action shall continue to withhold those Confidential documents until a final decision is made by the Court with respect to disclosure, or the action is abandoned. If the Developer does not timely inform the City of its intention to file a reverse-Public Records Act action, does not file the reverse-Public Records Act action by the date indicated in its written notice to the City, or abandons the reverse-Public Records Act action prior to judgment, the City shall be free to disclose the Confidential documents at issue in accordance with its obligations under the Act, and shall be held harmless from any claims from the Developer regarding said disclosure. If a legal action is filed against the City seeking to compel disclosure of any information that the Developer has requested remain confidential, the City shall give prompt notice of the filing of such action to the Developer and the Developer shall defend and indemnify the City from all costs and expenses of such defense, including reasonable attorneys' fees of the City or attorneys' fees awarded by a court arising out of such action except to the extent liability arises solely out of the City's exercise of its sole discretion to disclose or not disclose records and/or the City’s willful misconduct.
(c) Quarterly Reports. The Developer shall prepare and submit to the City no later than the first day of each quarter during the Negotiation Period a meaningful summary of activities undertaken during the previous quarter to achieve each Performance Benchmark set forth in the Performance Schedule attached as Exhibit C. The first quarterly report shall be for the period from , 20 to , 20 and all subsequent reports will include the three months since the last report.

Section 2.3 Developer Due Diligence.

During the Negotiation Period the Developer shall undertake such due diligence as is necessary to determine the suitability of the Property for the Project as set forth below and within the times set forth in the Performance Schedule attached as Exhibit C:
(a) Due Diligence. During the Negotiation Period and within the time set forth in the Performance Schedule, the Developer shall conduct due diligence activities it deems necessary to provide the Developer with sufficient information to determine the feasibility of developing a 111
CC 02-06-2024
111 of 723
504.049/548061 4
Project on the Property. The Developer's due diligence activities may include but are not limited to a physical survey of the Property. The City shall provide the Developer all requested information regarding the Property in the City's possession in a timely fashion. The Developer shall be responsible for the costs of all such studies, surveys and investigations. If the Developer fails to provide notice to the City that it is infeasible to develop the Project on the Property or that the Property is physically inadequate for the development of the Project by the date set forth in the Performance Schedule, this condition shall be deemed satisfied and this Agreement will remain in effect.

Developer acknowledges and recognizes that regardless of the results of Developer's investigations of the Property, the Property will be leased to the Developer "As Is, Where Is, And With All Faults."
(b) Title Adequacy Determination. The City has provided the Developer with a Preliminary Title Report dated , Order No. (the “Title Report”) on the Property. If the Developer objects to any exception appearing on the Title Report or should any title exception arise after the date of the Title Report, the Developer may object to such exception, provided such objection is made to the City in writing on or before 5 P.M. on the thirtieth (30th) day following the Effective Date, or if the exception is a new exception arising after the date of the Title Report, within fifteen (15) days of receipt of notice of such new exception. If the Developer objects to any exception to title, the City, within fifteen (15) days of receipt of the Developer’s objection shall notify the Developer in writing whether the City elects to (i) cause the exception to be removed of record, (ii) obtain a commitment from the title company for an appropriate endorsement to the policy of title insurance to be issued to the Developer, insuring against the objectionable exception, or (iii) terminate this Agreement unless the Developer elects to take title subject to such exception. If the City fails to respond to the Developer, such failure shall constitute the City’s election to terminate this Agreement unless the Developer affirmatively elects to take title subject to such exception. If the City's elects not to remove any exception objected to by the Developer, the Developer may, within fifteen (15) days of receipt of the City's notice, elect to terminate this Agreement. If any Party elects to terminate this Agreement pursuant to this Section 2.3(b), no Party shall thereafter have any obligations to or rights against the others hereunder. If the Developer fails to provide any notification to the City regarding this matter prior to expiration of the time period set forth herein, the condition set forth in this Section 2.3(b) shall be deemed satisfied, this Agreement shall continue in effect, and the condition of title at closing under any executed LDDA shall be as set forth in the Title Report.

Section 2.4 Developer Obligations.

During the Negotiation Period, the Developer shall be responsible for completing the following tasks within the time set forth in the Performance Schedule attached as Exhibit C:
(a) Community Engagement Plan. Within the time set forth in the Performance Schedule the Developer shall submit to the City for its approval, a community engagement plan ("Community Engagement Plan") that includes the Developer's proposed plan for conducting outreach to community groups and stakeholders in the vicinity of the Project to educate the public with respect to the Project and seek input from the public with respect to the Project. The 112
CC 02-06-2024
112 of 723
504.049/548061 5
City shall approve or disapprove the Community Engagement Plan within thirty (30) days of receipt. If the City disapproves the Community Engagement Plan the City shall provide specific reasons for its disapproval. If the City disapproves the Community Engagement Plan, the Developer shall submit a revised Community Engagement Plan to the City within thirty (30) days of such disapproval and the submission and approvals periods set forth herein shall continue until the City approves the Community Engagement Plan, provided, however, if the City fails to approve a Community Engagement Plan after the second resubmission, the City may, in its discretion, elect to terminate this Agreement. Once the Community Engagement Plan is approved, the Developer shall be responsible for implementing the Community Engagement Plan during the Negotiation Period. (b) Financing Plan. Within the time set forth in the Performance Schedule, the Developer shall provide to the City for its approval a financing plan (“Financing Plan”) for the proposed development on the Property that will include proposed financing for all components of the development, identification of all proposed sources of subsidies for the housing affordable to extremely low and very low-income households, any proposed public financing and an analysis of the proposed development's competitiveness for such subsidy sources. The Financing Plan shall also include an operating pro forma including cash flows for all components of the Project and showing the Developer's proposed ground rent with sufficient detail for the City to evaluate the ground rent proposal. The Developer shall update the Financing Plan periodically to reflect changes to the Project during the entitlement process, information from the Developer's due diligence review of the Property, the results of market studies and other information. The City shall approve or disapprove the Financing Plan within thirty (30) days of receipt. If the City disapproves the Financing Plan the City shall provide a detailed explanation of the reasons for such disapproval. (c) Entitlements. During the Negotiation Period and within the time set forth in the Performance Schedule, the Developer, at its sole cost, shall be responsible for obtaining all land use entitlements and other governmental approvals from the City and other entities as may be necessary for the Developer's contemplated development on the Property. The City shall cooperate with the Developer's efforts to obtain such entitlement and shall sign necessary applications or other consents to applications, provided however, the City shall not be obligated to incur any costs associated with such cooperation.

Prior to submitting any applications to the City or other governmental entities, the Developer shall submit to the City the design and architecture of the Project, including the conceptual plans, elevations, the exterior design and layout and any other information that the Developer intends to submit as part of its entitlement application. In the exercise of its reasonable discretion, the City shall respond to the Developer's written request for approval of conceptual plans within thirty (30) business days of the Developer's request therefor or the items submitted for approval shall be deemed approved. If the City disapproves of the items submitted, it shall specifically state the reasons for such disapproval. The Developer shall not submit any applications for entitlements until the City has approved the conceptual plans and application materials.
(d) Environmental Documents. The Developer shall be responsible, at its sole cost, 113
CC 02-06-2024
113 of 723
504.049/548061 6
for preparation of any environmental documents required under the California Environmental Quality Act for (i) City approval of the LDDA and Ground Lease and (ii) approval of the Project. The City shall determine the appropriate environmental review required for approval of the Project and shall cooperate with the Developer in preparing environmental documents for which the Developer is responsible (if any) by supplying available technical data and other available information concerning the Property. The Developer shall be solely responsible for all costs associated with preparing any environmental documents necessary for the City's approval of the Project, inclusive of the LDDA and Ground Lease. The determination of the adequacy of the environmental review shall be in the sole discretion of the City.

2.5 Term Sheet. Developer shall provide a draft term sheet concurrently with City Council consideration of this Agreement for City Council review. During the Negotiation Period and within the time set forth in the Performance Schedule, the Developer and the City will negotiate the Term Sheet for the Project that is consistent with the Developer's Proposal as such Proposal is refined in accordance with this Agreement. The Term Sheet shall include the fundamental terms that will serve as a basis for the negotiation of the LDDA and the Ground Lease, including, but not limited to, the term of the Ground Lease, the proposed ground rent, the basic elements of the Project, the community benefits to be provided by the Project and a viable financial plan for the Project. If following good faith negotiations the Parties fail to agree on a mutually acceptable Term Sheet, either Party may terminate this Agreement, in which event no Party shall thereafter have any obligations to or rights against the others hereunder, except for those provisions that survive termination.

Notwithstanding anything to the contrary contained herein, including execution of the LDDA with the form of Ground Lease attached thereto, the Parties acknowledge and agree that the Project financing partners may have additional comments to the Ground Lease and the City and Developer shall work in good faith prior to the execution of such Ground Lease to incorporate any such reasonable comments.

2.6 Right of Entry.

During the Negotiation Period, the City grants to the Developer and the Developer's agents the right to enter upon the Property, subject to the terms and conditions of this Section 2.6, for the sole and exclusive purpose of conducting studies and investigations that will assist the Developer in negotiating a LDDA and Ground Lease and performing its obligations hereunder.

The Developer shall not interfere with any existing City operations or departments occupying the Property during any inspection or investigation of the Property. The Developer shall be responsible for obtaining any permits necessary for any studies or investigations to be conducted. Prior to conducting any destructive testing or any environmental testing involving drilling or borings, the Developer shall provide the City's Authorized Representative with written notification of the scope of such testing for the City's Authorized Representative's approval in his reasonable discretion. The Developer shall bear all costs of such studies and investigations and shall be responsible for restoring the Property to its original condition after completion of such studies and investigations. The Developer shall be responsible for repairing any damage to the Property caused by such investigations.

Prior to exercise of the right of entry granted in this Section 2.6, the Developer shall 114
CC 02-06-2024
114 of 723
504.049/548061 7
provide the City with satisfactory evidence, in the form of a certificate of insurance, that the Developer's agents who obtain access to the Property are insured under comprehensive general liability and automobile liability insurance policy or policies terminable only after ten (10) days' advance written notice to the City, each policy to be in an amount of not less than Two Million Dollars ($2,000,000) combined single limit per occurrence for bodily injury and property damage. Each insurance policy shall name the City as an additional insured and shall contain a waiver of any right of subrogation against the City.

The Developer shall protect, indemnify and defend (with counsel reasonably acceptable to the City) and hold harmless the City, and its respective Council members, officers, employees, and agents (collectively the "Indemnified Parties") against, and hold the Indemnified Parties and the Property harmless from and against, any and all costs, expenses (including, without limitation, reasonable attorneys' fees), damages, claims, liabilities, liens (including, without limitation, mechanics liens) encumbrances and charges arising out of or in any way related to any entry by the Developer or the Developer's agents upon the Property, unless such matters arise from the sole and active negligence or willful misconduct of the City or other Indemnified Party. The foregoing obligation of the Developer shall survive the expiration of this Agreement.

The provisions of this Section 2.6 to the contrary notwithstanding, the Developer shall not conduct any biological investigations or studies or any invasive investigation, inspection, or test on the Property without prior written notice to the City's Authorized Representative of the proposed investigation, study, inspection or test (including, with respect to any hazardous substances invasive testing, a written plan for such testing) and the City’s Authorized Representative's approval thereof, which will not be unreasonably withheld, conditioned or delayed and will be deemed given if the City's Authorized Representative has not given its approval or reasonable disapproval in writing within twenty (20) business days after receipt of the Developer’s notice of the proposed investigation, study, inspection or test (and any required written plan). Additionally, the Developer shall provide to the City for the City’s review and approval (which approval will not be unreasonably withheld, conditioned or delayed) copies of drafts of any reports prepared in connection with any such activities prior to the reports becoming final and submitted to third parties (including governmental agencies). The City's failure to disapprove of any draft report within twenty (20) business days of the City's receipt will conclusively be deemed approval by the City of the draft report in question.

Section 2.7 City Cooperation. The City shall reasonably cooperate in providing the Developer with information in the City's possession relevant to development of the Property.

ARTICLE 3

GENERAL PROVISIONS
Section 3.1 Limitation on Effect of Agreement. This Agreement shall not obligate either the City or the Developer to enter into an LDDA or Ground Lease or to enter into any other agreement. By execution of this Agreement, the City is not committing itself to or agreeing to undertake disposition of any property. Execution of this Agreement by the City is merely an agreement to conduct a period of exclusive negotiations in accordance with the terms hereof, reserving for subsequent City action the final discretion and approval regarding the execution of an LDDA and Ground Lease and all proceedings and decisions in connection 115
CC 02-06-2024
115 of 723
504.049/548061 8
therewith. Any LDDA and Ground Lease resulting from negotiations pursuant to this Agreement shall become effective only if and after such LDDA and Ground Lease have been considered and approved by the City Council following conduct of all legally required procedures. No agreement drafts, actions, deliverables or communications arising from the performance of this Agreement shall impose any legally binding obligation on either Party to enter into an LDDA or Ground Lease, nor shall any such documents, actions or communications constitute any oral or implied agreement by either Party to enter into any other agreement. The Parties acknowledge that the final form of any agreement governing the development of the Property may contain matters not covered in this Agreement, and the provisions herein are not intended to exclude or preclude any other issues that may arise during negotiations.

Section 3.2 Compliance with CEQA. Without limiting the generality of Section 3.1, the Developer expressly acknowledges that any agreement resulting from the negotiations contemplated hereby shall become effective only if the agreement is approved by the City Council following compliance with all applicable notice and hearing requirements and compliance with all other requirements of law, including without limitation, the requirements of the California Environmental Quality Act (“CEQA”). The Parties acknowledge that the Project described in the Proposal is preliminary in nature and shall be described in further detail in the LDDA to be negotiated during the Negotiation Period. Without limiting the foregoing, the Parties acknowledge that the City retains discretion to (i) modify the proposed development as the City may, in its discretion, determine to be necessary to comply with CEQA, (ii) select other feasible alternatives and/or impose mitigation measures to avoid or minimize significant environmental impacts; (iii) balance the benefits of the proposed development against any significant environmental impacts prior to taking final action, if such impacts cannot otherwise be avoided; and/or (iv) determine not to proceed with the proposed development of the Property.

Section 3.3 Notices. Each notice, request, demand, instruction or other document required or permitted to be given hereunder ("Notice") shall be in writing and shall be delivered personally (including messenger or courier service with evidence of receipt) or sent by depositing the same with the United States Postal Service, certified or registered mail, return receipt requested, with proper postage prepaid, addressed to the parties at the respective addresses set forth below and marked to the designated individual's attention. Each Notice shall be effective upon being so deposited, but the time period in which a response to any such Notice must be given or any action taken with respect thereto shall commence to run from the date of receipt of the Notice by the addressee thereof. Rejection or other refusal by the addressee to accept or the inability of any messenger, courier or the United States Postal Service to deliver because of a changed address of which no Notice was given shall be deemed to be the receipt of the Notice sent. Either party shall have the right from time to time to change the address to which a Notice to it shall be sent to another address in the continental United States (but not a post office box) by giving Notice to the other party of the changed address at least ten (10) days prior to such changes.

If to the City:

With copies to:
116
CC 02-06-2024
116 of 723
504.049/548061 9
If to the Developer: To the address specified in Exhibit B Section 3.4 Developer's Financial Capacity. Prior to the execution of the LDDA, Developer shall submit to the City evidence of its ability to finance development of the Property pursuant to the Proposal. Prior to execution of the LDDA, the City shall make a determination, the cost of which shall be advanced by Developer, that Developer has capacity to finance the development and complete the Project. City shall have the right to terminate this Agreement if Developer is unable to establish its financial capacity to the satisfaction of the City. The Developer shall maintain full disclosure to the City of its methods of financing to be used in the development of the Property, and shall promptly advise the City of any material adverse change in the Developer's financial status or ability to finance development of the Property.

Section 3.5 Costs and Expenses. Each party shall be responsible for its own costs and expenses in connection with any activities and negotiations undertaken in connection with this Agreement, and the performance of each party's obligations under this Agreement.

Section 3.6 Defaults and Remedies.
(a) Default. Failure by either party to negotiate in good faith as provided in this Agreement shall constitute an event of default hereunder. In addition, the failure of the Developer to meet any of the Performance Benchmarks by the date set forth in the Performance Schedule, subject to force majeure delays, shall constitute a Developer event of default. The non-defaulting party shall give written notice of a default to the defaulting party, specifying the nature of the default and the required action to cure the default. If a default remains uncured ten (10) days after receipt by the defaulting party of such notice, the non-defaulting party may exercise the remedies set forth in subsection (b).
(b) Remedies. In the event of an uncured default by the City, the Developer's sole remedy shall be to terminate this Agreement. Following such, neither party shall have any further right, remedy or obligation under this Agreement; provided, however, that the Developer's indemnification obligation pursuant to Sections 2.6 and 3.5 shall survive such termination.

In the event of an uncured default by the Developer, the City's sole remedy shall be to terminate this Agreement. Following such termination, neither party shall have any right, remedy or obligation under this Agreement; provided, however, that the Developer's indemnification obligation pursuant to Sections 2.6 and 3.5 shall survive such termination.

Except as expressly provided above, neither party shall have any liability to the other for damages or otherwise for any default, nor shall either party have any other claims with respect to 117
CC 02-06-2024
117 of 723
504.049/548061 10
performance under this Agreement. Each party specifically waives and releases any such rights or claims they may otherwise have at law or in equity.

Section 3.7 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California.

Section 3.8 Assignment. The Developer may not transfer or assign any or all of its rights or obligations hereunder except with the prior written consent of the City, which consent shall be granted or withheld in the City's sole discretion, and any such attempted transfer or assignment without the prior written consent of the City shall be void.

Notwithstanding the foregoing, Developer may assign its rights hereunder to a limited partnership where one or more of the Developers are the managing general partner (or the managing member of the managing general partner) thereof.

Section 3.9 No Third Party Beneficiaries. This Agreement is made and entered into solely for the benefit of the City and the Developer and no other person shall have any right of action under or by reason of this Agreement.

Section 3.10 Time. Time is of the essence of each and every provision of this Agreement in which time is a factor.

Section 3.11 No Agency, Joint Venture or Partnership. The City and the Developer hereby renounce the existence of any form of agency relationship, joint venture or partnership between the City and the Developer and agree that nothing contained herein or in any document executed in connection herewith shall be construed as creating any such relationship between the City and the Developer.

Section 3.12 Interpretation of Agreement. This Agreement constitutes the entire agreement between the parties and supersedes all prior discussions, negotiations, and agreements whether oral or written, except to the extent that the Proposal informs the negotiations contemplated in this Agreement. Any amendment to this Agreement, including an oral modification supported by new consideration, must be reduced to writing and signed by both parties before it will be effective. Both parties have had an equal opportunity to participate in the drafting of this Agreement. The usual construction of an agreement as to the drafting party shall not apply to this Agreement.

Section 3.13 Waiver of Lis Pendens. It is expressly understood and agreed by the Parties that no lis pendens shall be filed against any portion of the Property with respect to this Agreement or any dispute or act arising from it. This Section shall survive the expiration or termination of this Agreement.

Section 3.14 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same agreement.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date 118
CC 02-06-2024
118 of 723
504.049/548061 11
set opposite their signatures. The Effective Date of this Agreement shall be the date this Agreement is signed by the City.
"City"
, 202- City of Cupertino, a body corporate and politic
and a subdivision of the State
By:
"Developer"
, 202_
By:

Title:

APPROVED AS TO FORM:

By:

Christopher D. Jensen, Cupertino City Attorney
ATTEST:
119
CC 02-06-2024
119 of 723
504.049/548061 12
City Clerk
120
CC 02-06-2024
120 of 723
504.049/548061

EXHIBIT A

DESCRIPTION OF PROPERTY

THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF

CUPERTINO, COUNTY OF SANTA CLARA, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS:
1 121
CC 02-06-2024
121 of 723
504.049/548061
122
CC 02-06-2024
122 of 723
1 1855\03\2913920.5
504.049/548061

EXHIBIT B

DEVELOPER INFORMATION
Name:

Legal Status:

Address:

Negotiating Representative(s):
123
CC 02-06-2024
123 of 723
2 1855\03\2913920.5
504.049/548061

EXHIBIT C

PERFORMANCE SCHEDULE
Performance Benchmark Performance Date

1. Developer Due Diligence Activities (§2.3(a))

2. Developer determines title adequacy (§2.3(b))

3. Developer submits Community Engagement Plan to the City for approval (§2.4(a))

4. The City approves or disapproves the Community Engagement Plan (§2.4(a)).

Within 30 days of
submission

5. Developer submits Financing Plan to City (§2.4(b))

6. City approves or disapproves of the Financing Plan (§2.4(b)) Within 30 days of submission

7. City Council approves Term Sheet (§2.5) Can this be City the Manager? Council approves ENA and LDDA.

8. Developer shall submit concept plan and entitlement
application materials to the City for its approval prior to submitting applications for entitlements (§2.4(c))

9. City shall review and approve of disapprove design and architecture plans (§2.4(c))
Within 30 business days
of submission

10. Developer obtains entitlements for the Project (§2.4(c))

11. Developer obtains final CEQA review of Project (§2.4(d)) Concurrent with entitlements.
124
CC 02-06-2024
124 of 723
1 504.049/548727
Mary Avenue
Mary Avenue and Parkwood Drive, Cupertino
Basic Lease Information Sheet

8.02.2023
Effective Date: ___________________.

Tenant: A to be formed LP, with a to be formed LLC as managing general partner of the partnership with Charities Housing Development Corporation of Santa Clara County (“Charities Housing”), as its sole member and manager.

Developer/Sponsor: Charities Housing Development Corporation of Santa Clara County
Premises: That certain parcel of land including all improvements and buildings to be constructed thereon, located on approximately .79 acres within a portion of the Mary Avenue Right-of-Way in Cupertino. TBD
Use of Premises: Affordable Housing as defined herein containing approximately 32,326 gross square feet of residential and ancillary service space dedicated to directly serving the residents, including social service and property management offices, community rooms, lounge areas, laundry rooms etc., for the Term of the Lease.
"Affordable Housing" as defined herein means approximately thirty-nine (39) units of Affordable Housing for the Extremely Low and Very Low-Income households (as more particularly described below, at 30% and 50% of AMI). Nineteen (19) of these units are anticipated to provide housing for individuals who are Intellectually and Developmentally Disabled ( “IDD” ). In addition to the 39 residentail units,one (1) unrestricted staff unit will be provided.

The following is the unit mix for the Affordable Housing , in which the following rent and income restrictions based on percentage of Area Median Income (AMI) apply:

Unit Size
and
affordabilit
y
30%
AMI
50%
AMI
Unrestricte
d
(Managers)
Total
Studios 5 0 0 5
125
CC 02-06-2024
125 of 723
2 504.049/548727
1-BRs –
562 SF
11 8 0 19
2-BRs –
784 SF
4 11 1 16
Total 20 19 1 40
With the consent of the City, the unit mix and the affordability restrictions may be changed for the sole purpose of facilitating the financing and development of the Project.

It is proposed that 47.5% of the units will be reserved for individuals or families with at lease one member living with an intellectual or developmental disability (IDD). The developers expect that 14 of these households will be extremely low income (ELI) and 5 will be very low income (VLI). Potential tenants for the IDD units will be referred by Housing Choices Coalition through their memorandum of understanding with the San Andreas Regional Center (“SARC”). Resident services and coordination for these units will be overseen by Housing Choices Coalition and funded by SARC.

Sponsor/Developer shall construct an anticipated total of 40 units in a single phase. Construction of the Affordable Housing will occur within seven (7) years of the execution of this Term Sheet by both Parties.

Building: Not Applicable
Term: The Term shall commence on the Term Commencement Date and expire at 11:59pm Pacific Coast Time eighty-five (85) years thereafter (“Initial Term”). Tenant will have one (1) option to renew the Lease, subject to City advance approval on terms acceptable to the City for a total maximum Term of no more than ninety-nine (99) years.

Delivery Date: The date on which Landlord grants possession of the Premises to Tenant and Tenant accepts delivery, which shall not occur earlier than the Effective Date and no later than the Term Commencement Date.

Due Diligence Period:Tenant will have 365 days from the Effective Date to access and investigate the Premises, to perform any and all due diligence, including any environmental assessments, appraisals, surveys, geotechnical investigations, easement agreements with Caltrans and any other assessment deemed necessary.
126
CC 02-06-2024
126 of 723
3 504.049/548727
Entitlement Period: Tenant will have until September 2026 to secure initial plans for construction of the Premises and to determine the likelihood of procuring all approvals or permits, including where applicable compliance with the California Environmental Quality Act and the National Environmental Protection Act, necessary to start construction of the Affordable Housing on the Premises in order to provide Affordable Housing on the Premises. Tenant may cancel this Agreement for any reason any time prior to Commencing Construction. For purposes hereof, “Commencing Construction” shall mean the closing and initial funding of construction financing and the commencement of construction of the Affordable Housing under the terms thereof. Understanding that a DA would be proposed which would allow a longer entitlement period.

Deposit: There will be no performance deposit associated with this Ground Lease.

Term Commencement Date: The Term Commencment Date is the date of the close of construction financing for the Project Improvements with the construction lender (the "Project Financing").

Affordability Adjusments: To the extent necessary for the Project to maintain financial feaiblity, the City will allow the income and rent restrictions to increase and allow the intellectually and developmentally disabled (IDD) unit requirements to be dropped for a percentage of the units to be reasonably determined by City upon Tenant’s written request in the event of a loss or reduction in Section 8 rental and/or other subsidy through no fault of the Tenant, its employees, agents, officers, directors, agents, subsidiaries, financiers, lenders, contractors or assigns. As determined by City, any Affordability Adjustment shall conform to the following requirements, at a minimum:

1. The Affordability Adjustment may result in increased AMI levels only to the extent necessary for the Premises to be operated without a negative cash flow, as determined in consultation with the senior lender and tax credit investor;

2. While 20 of the units will be reserved for ELI and 19 units will serve IDD households, all of the units must continue to have (subject to all applicable laws, including, without limitation, tax credit regulations):
a. Set asides or preferences for IDD households to be
determined by the City, except to the extent the preference must be changed to allow the Project to maintain financial feasiblity.
127
CC 02-06-2024
127 of 723
4 504.049/548727
b. Developer/Sponsor shall continue to process
applicants who are direct referrals from Housing Choices Coalition/SARC. If the Housing Choices Coalition/SARC
is unable to provide Developer/Sponsor a referral for a vacant unit within thirty days of unit availability, then Developer/Sponsor may seek rental applications for that unit from other sources.

Subordination of Lease: The City will not subordinate the affordability and population requirements to the Construction and Permanent Lender(s). The Ground Lease shall include standard
mortgagee protection provisions.

Base Rent: Base Rent shall be One Dollars and Zero Cents ($1.00) due annually and payable in full starting on the Term Commencement Date. [confirm below market rent – leasehold will transfer prior to admission of investor to avoid income]
Advance Rent: Not Applicable.

Extended Term Base Rent: Not Applicable.

Additional Rent: Additional Rent shall include any and all other payments, charges and reimbursement obligations of Tenant to Landlord as
allowed or permitted under the Lease terms herein.

Construction Bonds: Prior to starting any construction on the Premises, Tenant shall provide City with contractor performance and payment bonds, all to Landlord’s reasonable satisfaction, in order to secure performance under the Lease.

Insurance: Tenant shall procure and maintain public liability and property damage insurance and other insurance required by the Landlord in a form, substance and amount approved by the Landlord. Tenant shall also procure and maintain workers’compensation insurance and all other insurance required under applicable law, in a form and amount approved by the Landlord.

Hazardous Materials: Tenant shall represent, warrant and provide evidence satisfactory to the Landlord, as requested, that Hazardous Materials will not be and are not being stored or used on the Premises (except to the extent used in the ordinary course operating apartment complexes and used in accordance with all applicable laws) and that the Premises and Use are in compliance with all environmental laws, ordinance and regulations. Hazardous 128
CC 02-06-2024
128 of 723
5 504.049/548727
Materials Disclosure Certification is attached at Exhibit XXX.

Additional requirements may be set out in the Lease.

Tenant’s Share of Expenses: Tenant is responsible for 100% of the operating expenses, taxes, and utility expenses associated with the Use of the Premises, for the duration of the Lease Term. Additional requirements may be set out in the Lease.

Permitted Uses: Subject to compliance with all other terms and conditions of the Lease, the operation of 40 units of Affordable Housing, including nineteen (19) intended for individauls with Intellectual and Development Disabilities (the “Permitted Uses”), which complies fully with all terms and conditions of this Lease, and for which all land use and other entitlements, approvals, licenses and permits have been granted by local, state and federal governmental agencies, departments and entities.

Parking Spaces: 61 parking spaces for residents and staff of the property or as required under the land use and entitlement approvals.

Landlord: City of Cupertino, a Political Subdivision of the State of California. Also referred to herein as “City”.

Landlord’s Notice Address: Cupertino City Hall,
Office Community Development
Attn: Gian Martire, Senior Planner
10300 Torre Avenue, Cupertino, California 95014
Landlord’s Address For Rent:

Cupertino City Hall,
Office Community Development
Attn: Gian Martire, Senior Planner
10300 Torre Avenue, Cupertino, California 95014
Sponsor’s Notice Addresses:

Charities Housing
Sobrato Center for Nonprofits – San Jose
1400 Parkmoor Avenue, Suite 190
San Jose, CA 95126
129
CC 02-06-2024
129 of 723
6 504.049/548727
With copy to:

Lauren B. Fechter
Gubb & Barshay LLP
235 Montgomery Street, Suite 1110
San Francisco, CA 94104
Ph: 415-781-6600, ext. 5
[email protected]
Broker: None for Tenant/Sponsor. None for Landlord.

Exhibits: Exhibit A; Legal Description
Exhibit B: Regulatory Agreement.

Exhibit C: Hazardous Materials Disclosure Certificate
Addenda: None
130
CC 02-06-2024
130 of 723

CITY OF CUPERTINO
Agenda Item
23-12855 Agenda Date: 2/6/2024
Agenda #: 10.

Subject: Approve a Cooperative Services Agreement with SHI International Corporation for Managed, Detection, and Response (MDR) Cybersecurity services, for a total not-to-exceed amount of $180,025.50.

Authorize the City Manager to execute a Cooperative Services Agreement with SHI International Corp., for Managed, Detection, and Response (MDR) Cybersecurity services for a total not-toexceed amount of $180,025.50.

CITY OF CUPERTINO Page 1 of 1 Printed on 1/31/2024
powered by Legistar™131
CC 02-06-2024
131 of 723

CITY COUNCIL STAFF REPORT
Meeting: February 6, 2024
Subject
Approve a Cooperative Services Agreement with SHI International Corporation for Managed, Detection, and Response (MDR) Cybersecurity Services, for a total not‐to‐exceed amount of $180,025.50.

Recommended Action
Authorize the City Manager to execute a Cooperative Services Agreement with SHI International Corp. for Managed, Detection, and Response (MDR) Cybersecurity Services for a total not‐to‐exceed amount of $180,025.50.

Reasons for Recommendation
The City has established a comprehensive, multilayer cybersecurity strategy to address the numerous cyber threats encountered weekly. A key component of this strategy involves tools initially acquired in 2020 through SHI International Corp via the National Association of State Procurement Officials (NASPO), a Cooperative Agreement vehicle that secures competitive rates and favorable terms on goods at the state level. Beginning December 2020, under the City Manager’s award authority, the City utilized the Cooperative Agreement to provide these cybersecurity tools during 2021, 2022 and 2023 calendar years.

Considering the evolving cybersecurity landscape, the City proposes the continued use of these tools for an additional term through the 2024 calendar year. This additional year is strategically recommended to ensure uninterrupted cybersecurity defense while we diligently assess alternative solutions. Our aim is to identify options that potentially offer enhanced efficacy and cost‐effectiveness, aligning with our ongoing commitment to robust and efficient cybersecurity management.

While the City will continue to use the same cybersecurity tools acquired in 2020 through SHI International Corp, due to the expiration of the NASPO agreement, the City will obtain the continuing services of SHI International Corp. through 132
CC 02-06-2024
132 of 723
Omnia Partners, a cooperative purchasing entity that acquired National Intergovernmental Purchasing Alliance (IPA).

Formal Competitive Bidding Exemption
CMC Chapter 3.22 ordinarily requires that purchases of services be selected through a Request for Proposal process. However, CMC § 3.22.070 provides for exemptions to the requirements of Chapter 3.22 when these purchases occur from any other public agency created under the laws of the State of California or the United States Government. The City of Meza, AZ was the lead agency for the competitive solicitation, which was created for intended use through Omnia Partners, which provides contracts that are competitively solicited and publicly awarded by a government entity acting as the lead agency. The Cooperative Purchasing Agreement with SHI International Corp. is available to any public agencies nationally, including state and local governmental entities, public and private primary, secondary and higher education entities, non‐profit entities, and agencies for the public benefit (“Public Agencies”), through its cooperative purchasing program.

Sustainability Impact
No impact.

Fiscal Impact
The table below provides a detailed breakdown of the costs incurred to date and the projected future expense associated with the cybersecurity tools which total $180,025.50. Included in the total contract amount is a lower service cost for 2024 due to a successful negotiation with the vendor. Council approved funding as part of FY2023‐24 Proposed Budget.

Date Price Services Provided
February 1, 2021 $49,000.00 MDR Services
February 1, 2022 $49,000.00 MDR Services
February 1, 2023 $49,000.00 MDR Services
February 1, 2024 $33,025.50 MDR Services (contract through Omnia partners) New not‐to‐exceed Total $180,025.50
California Environmental Quality Act
Not applicable.
____________________________________
Prepared by:   Tommy Yu, Infrastructure Manager
133
CC 02-06-2024
133 of 723
Reviewed by:  Bill Mitchell, Chief Technology Officer
Michael Woo, Senior Assistant City Attorney
Approved by: Matt Morley, Assistant City Manager
Chris Jensen, City Attorney
Attachments:

A – DarkTrace via SHI International Corp., Base Cooperative Agreement B – Omnia Partners Coop. Agreement No. 2018011‐02
C – Amendment 4 to Omnia Partners Coop. Agreement No. 2018011‐02 D – Draft Supplemental Agreement
134
CC 02-06-2024
134 of 723

ATTACHMENT A
135
CC 02-06-2024
135 of 723
136
CC 02-06-2024
136 of 723
Contract Amendment
Arizona Department of
Administration
State Procurement Office
100 N. 15th Avenue, Suite 402
Phoenix, AZ 85007
ADSPO16-130651 Amendment Thirteen (13)
Software Value-Added Reseller NASPO Master Contract
CONTRACTOR: STATE AGENCY:

SHI International Corp.
290 Davidson Ave.

Somerset, NJ 08873
AZ Department of Administration (ADOA)
State Procurement Office
100 N. 15th Ave., Ste. 305
Phoenix, AZ 85007
CONTACT: Alison Turner CONTACT: Eric Bell
PHONE: 425-974-5997 PHONE: (602) 542-8921
EMAIL: [email protected] EMAIL: [email protected] Software Value Added Reseller (SVAR) NASPO Master Contract Pursuant to R2-7-E303. Competition Impracticable Procurements, and NASPO Master Agreement Section 4:

Lead State (ARIZONA) Terms and Conditions, Paragraph 5, Contract Changes, 5.1 Amendments, the above referenced contract shall be amended as follow:

1. The term of this contract is hereby extended through December 31, 2023.

ALL OTHER REQUIREMENTS, SPECIFICATIONS, TERMS AND CONDITIONS REMAIN UNCHANGED * Please ensure all required Certificate Of Insurance are updated and submitted to the State Procurement Office.

This Contract Amendment is not binding against the State of Arizona unless signed by an authorized representative of the Contractor and then accepted in writing by an authorized representative of the State.

Contractor hereby acknowledges receipt and understanding of the above amendment.

The above referenced contract amendment is hereby
executed this date by the State.

Signature Date Signature Date
___________________________
_______________________Statewide Procurement Manager
_______________________ Printed/Typed Name and Title Printed/Typed Name and Title 10/23/2023
137
CC 02-06-2024
137 of 723
138
CC 02-06-2024
138 of 723
Contract Amendment State of Arizona
State Procurement Office
Contract No.: ADSPO16-130651
PAGE
100 N. 15TH Avenue, Suite 402
Amendment No.: Eleven (11)
1 OF 1 Phoenix, AZ 85007
CONTRACTOR:

SHI International Corp.
290 Davidson Ave.

Somerset, NJ 08873
CONTACT: Alison Turner
PHONE: 425-974-5997
EMAIL: [email protected]
STATE AGENCY:

AZ Department of Administration
State Procurement Office
100 N. 15th Avenue, Suite 402
Phoenix, AZ 85007
CONTACT: Rana Schultz
PHONE: (602) 542-2927
EMAIL: [email protected]
Software Value Added Reseller (SVAR)
Pursuant to State of Arizona Uniform Terms and Conditions, Paragraph 5, Contract Changes, 5.1 Amendments, the above referenced Contract shall be amended as follows:

1. The term of this contract is hereby extended through July 31st, 2023.

2. All other Terms, Conditions, and Pricing remain the same.

This Contract Amendment is not binding against the State of Arizona unless signed by an authorized representative of the Contractor and then accepted in writing by an authorized representative of the State.

Contractor hereby acknowledges receipt and understanding of the above amendment.

The above referenced contract amendment is hereby
executed this date by the State.

Signature Date Signature Date
_______________________________________________________ Printed/Typed Name and Title
_John RedHorse, Statewide IT Procurement Leader ______________ Printed/Typed Name and Title
DocuSign Envelope ID: AA9EB012-B79E-48BA-B5AD-78A80214A6DB Darek Awas
2/28/2023
Manager - Contracts
John Redhorse (Feb 28, 2023 13:15 PST) 2/28/23
139
CC 02-06-2024
139 of 723
Contract Amendment State of Arizona
State Procurement Office
Contract No.: ADSPO16-130651
PAGE
100 N. 15TH Avenue, Suite 402
Amendment No.: Ten (10)
1 OF 1 Phoenix, AZ 85007
CONTRACTOR:

SHI International Corp.
290 Davidson Ave.

Somerset, NJ 08873
CONTACT: Alison Turner
PHONE: 425-974-5997
EMAIL: [email protected]
STATE AGENCY:

AZ Department of Administration
State Procurement Office
100 N. 15th Avenue, Suite 402
Phoenix, AZ 85007
CONTACT: Rana Schultz
PHONE: (602) 542-2927
EMAIL: [email protected]
Software Value Added Reseller (SVAR)
Pursuant to State of Arizona Uniform Terms and Conditions, Paragraph 5, Contract Changes, 5.1 Amendments, the above referenced Contract shall be amended as follows:

1. The term of this contract is hereby extended through March 31st, 2023.

2. All other Terms, Conditions, and Pricing remain the same.

This Contract Amendment is not binding against the State of Arizona unless signed by an authorized representative of the Contractor and then accepted in writing by an authorized representative of the State.

Contractor hereby acknowledges receipt and understanding of the above amendment.

The above referenced contract amendment is hereby
executed this date by the State.

Signature Date Signature Date
_______________________________________________________ Printed/Typed Name and Title
_John RedHorse, Statewide IT Procurement Leader ______________ Printed/Typed Name and Title
DocuSign Envelope ID: C86D6627-8775-49C7-87E2-76B745262BEC 12/8/2022
Darek Awas Manager - Contracts
John Redhorse (Dec 9, 2022 06:39 PST) 12/9/2022
140
CC 02-06-2024
140 of 723
Contract Amendment State of Arizona
State Procurement Office
Contract No.: ADSPO16-130651
PAGE
100 N. 15TH Avenue, Suite 402
Amendment No.: Nine (9)
1 OF 1 Phoenix, AZ 85007
CONTRACTOR:

SHI International Corp.
290 Davidson Ave.

Somerset, NJ 08873
CONTACT: Alison Turner
PHONE: 425-974-5997
EMAIL: [email protected]
STATE AGENCY:

AZ Department of Administration
State Procurement Office
100 N. 15th Avenue, Suite 402
Phoenix, AZ 85007
CONTACT: Rana Schultz
PHONE: (602) 542-2927
EMAIL: [email protected]
Software Value Added Reseller (SVAR)
Pursuant to State of Arizona Uniform Terms and Conditions, Paragraph 5, Contract Changes, 5.1 Amendments, the above referenced Contract shall be amended as follows:

1. The term of this contract is hereby extended through December 31st, 2022.

2. All other Terms, Conditions, and Pricing remain the same.

This Contract Amendment is not binding against the State of Arizona unless signed by an authorized representative of the Contractor and then accepted in writing by an authorized representative of the State.

Contractor hereby acknowledges receipt and understanding of the above amendment.

The above referenced contract amendment is hereby
executed this date by the State.

Signature Date Signature Date
_______________________________________________________ Printed/Typed Name and Title
_John RedHorse, Statewide IT Procurement Leader ______________ Printed/Typed Name and Title
8/23/2022
Kristina Mann, Sr. Manager - Contracts
8/23/22
141
CC 02-06-2024
141 of 723
Contract Amendment State of Arizona
State Procurement Office
Contract No.: ADSPO16-130651
PAGE
100 N. 15TH Avenue, Suite 402
Amendment No.: Eight (8)
1 OF 1 Phoenix, AZ 85007
CONTRACTOR:

SHI International Corp.
290 Davidson Ave.

Somerset, NJ 08873
CONTACT: Alison Turner
PHONE: 425-974-5997
EMAIL: [email protected]
STATE AGENCY:

AZ Department of Administration
State Procurement Office
100 N. 15th Avenue, Suite 402
Phoenix, AZ 85007
CONTACT: Rana Schultz
PHONE: (602) 542-2927
EMAIL: [email protected]
Software Value Added Reseller (SVAR)
Pursuant to State of Arizona Uniform Terms and Conditions, Paragraph 5, Contract Changes, 5.1 Amendments, the above referenced Contract shall be amended as follows:

1. The term of this contract is hereby extended through September 30th, 2022.

2. All other Terms, Conditions, and Pricing remain the same.

This Contract Amendment is not binding against the State of Arizona unless signed by an authorized representative of the Contractor and then accepted in writing by an authorized representative of the State.

Contractor hereby acknowledges receipt and understanding of the above amendment.

The above referenced contract amendment is hereby
executed this date by the State.

Signature Date Signature Date
_______________________________________________________ Printed/Typed Name and Title
_John RedHorse, Statewide IT Procurement Leader ______________ Printed/Typed Name and Title
5/16/2022
Elisabeth Arnold/Senior Lead Contracts Specialist
DocuSign Envelope ID: AB1E2D36-7721-423D-81FC-E27B03CEE4E9 John Redhorse (May 19, 2022 12:12 PDT) May 19, 2022
142
CC 02-06-2024
142 of 723
Contract Amendment State of Arizona
State Procurement Office
Contract No.: ADSPO16-130651
PAGE
100 N. 15TH Avenue, Suite 402
Amendment No.: Seven (7)
1 OF 1 Phoenix, AZ 85007
CONTRACTOR:

SHI International Corp.
290 Davidson Ave.

Somerset, NJ 08873
CONTACT: Alison Turner
PHONE: 425-974-5997
EMAIL: [email protected]
STATE AGENCY:

AZ Department of Administration
State Procurement Office
100 N. 15th Avenue, Suite 402
Phoenix, AZ 85007
CONTACT: Rana Schultz
PHONE: (602) 542-2927
EMAIL: [email protected]
Software Value Added Reseller (SVAR)
Pursuant to State of Arizona Uniform Terms and Conditions, Paragraph 5, Contract Changes, 5.1 Amendments, the above referenced Contract shall be amended as follows:

1. The term of this contract is hereby extended through June 30th, 2022.

2. All other Terms, Conditions, and Pricing remain the same.

This Contract Amendment is not binding against the State of Arizona unless signed by an authorized representative of the Contractor and then accepted in writing by an authorized representative of the State.

Contractor hereby acknowledges receipt and understanding of the above amendment.

The above referenced contract amendment is hereby
executed this date by the State.

Signature Date Signature Date
_______________________________________________________ Printed/Typed Name and Title
_John RedHorse, Statewide IT Procurement Leader ______________ Printed/Typed Name and Title
(OLVDEHWK$UQROG6HQLRU/HDG&RQWUDFWV6SHFLDOLVW











 




 2/10/22
143
CC 02-06-2024
143 of 723
Contract Amendment State of Arizona
State Procurement Office
Contract No.: ADSPO16-130651
PAGE
100 N. 15TH Avenue, Suite 402
Amendment No.: Six (6)
1 OF 1 Phoenix, AZ 85007
CONTRACTOR:

SHI International Corp.
290 Davidson Ave.

Somerset, NJ 08873
CONTACT: Alison Turner
PHONE: 425-974-5997
EMAIL: [email protected]
STATE AGENCY:

AZ Department of Administration
State Procurement Office
100 N. 15th Avenue, Suite 402
Phoenix, AZ 85007
CONTACT: Rana Schultz
PHONE: (602) 542-2927
EMAIL: [email protected]
Software Value Added Reseller (SVAR)
Pursuant to State of Arizona Uniform Terms and Conditions, Paragraph 5, Contract Changes, 5.1 Amendments, the above referenced Contract shall be amended as follows:

1. The term of this contract is hereby extended through April 7, 2022.

2. All other Terms, Conditions, and Pricing remain the same.

This Contract Amendment is not binding against the State of Arizona unless signed by an authorized representative of the Contractor and then accepted in writing by an authorized representative of the State.

Contractor hereby acknowledges receipt and understanding of the above amendment.

The above referenced contract amendment is hereby
executed this date by the State.

Signature Date Signature Date
_______________________________________________________ Printed/Typed Name and Title
______________________________________________________
Printed/Typed Name and Title













 













Signature
11/15/2021
Rana K Schultz
Statewide IT
Procurement Manager
144
CC 02-06-2024
144 of 723
Contract Amendment State of Arizona
State Procurement Office
Contract No.: ADSPO16-130651
PAGE
100 N. 15TH Avenue, Suite 402
Amendment No.: Five (5)
1 OF 1 Phoenix, AZ 85007
CONTRACTOR:

SHI International Corp.
290 Davidson Ave.

Somerset, NJ 08873
CONTACT: Alison Turner
PHONE: 425-974-5997
EMAIL: [email protected]
STATE AGENCY:

AZ Department of Administration
State Procurement Office
100 N. 15th Avenue, Suite 402
Phoenix, AZ 85007
CONTACT: Eric Bell
PHONE: (602) 542-8921
EMAIL: [email protected]
Software Value Added Reseller (SVAR)
Pursuant to State of Arizona Uniform Terms and Conditions, Paragraph 5, Contract Changes, 5.1 Amendments, the above referenced Contract shall be amended as follows:

1. The term of this contract is hereby extended through January 7, 2022.

2. All other Terms, Conditions, and Pricing remain the same.

This Contract Amendment is not binding against the State of Arizona unless signed by an authorized representative of the Contractor and then accepted in writing by an authorized representative of the State.

Contractor hereby acknowledges receipt and understanding of the above amendment.

The above referenced contract amendment is hereby
executed this date by the State.

Signature Date Signature Date
______________________________________________
Printed/Typed Name and Title Printed/Typed Name and Title 01/29/2021
Elisabeth Arnold - Lead Contracts Specialist
2/1/2021
Stephen Nettles - Senior Group Manager
145
CC 02-06-2024
145 of 723
Contract Amendment State of Arizona
State Procurement Office
Contract No.: ADSPO16-130651
PAGE
100 N. 15TH Avenue, Suite 402
Amendment No.: Four (4)
1 OF 1 Phoenix, AZ 85007
CONTRACTOR:

SHI International Corp.
290 Davidson Ave.

Somerset, NJ 08873
CONTACT: Alison Turner
PHONE: 425-974-5997
EMAIL: [email protected]
STATE AGENCY:

AZ Department of Administration
State Procurement Office
100 N. 15th Avenue, Suite 402
Phoenix, AZ 85007
CONTACT: Eric Bell
PHONE: (602) 542-8921
EMAIL: [email protected]
Software Value Added Reseller (SVAR)
Pursuant to State of Arizona Uniform Terms and Conditions, Paragraph 5, Contract Changes, 5.1 Amendments, the above referenced Contract shall be amended as follows:

1. The term of this contract is hereby extended through April 7, 2021.

2. All other Terms, Conditions, and Pricing remain the same.

This Contract Amendment is not binding against the State of Arizona unless signed by an authorized representative of the Contractor and then accepted in writing by an authorized representative of the State.

Contractor hereby acknowledges receipt and understanding of the above amendment.

The above referenced contract amendment is hereby
executed this date by the State.

Signature Date Signature Date

______________________________________________
Printed/Typed Name and Title Printed/Typed Name and Title 02/03/2020
Cassie Skelton - Senior Manager - Contracts
2/20/2020
Stephen Nettles
Senior Group Manager
146
CC 02-06-2024
146 of 723
147
CC 02-06-2024
147 of 723
148
CC 02-06-2024
148 of 723
149
CC 02-06-2024
149 of 723
1 | Page
Software Value-Added Reseller (SVAR) Services

MASTER PRICE AGREEMENT
with
SHI INTERNATION, CORP.

Contract No. ADSPO16-130651
State of Arizona
Lead State
Effective: April 8, 2016 to April 7, 2018
150
CC 02-06-2024
150 of 723
2 | Page
151
CC 02-06-2024
151 of 723

Master Agreement
Table of Contents
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130651
Description: Software Value-Added Reseller (SVAR) Services Table of Contents
EXECUTED OFFER AND ACCEPTANCE FORM......................................................................................................... 2 TABLE OF CONTENTS................................................................................................................................................. 3 SECTION 1: NASPO ValuePoint Solicitation ADSPO16-00005829 – GENERAL INCFORMATION ......................... 4 SECTION 2: SCOPE OF WORK ................................................................................................................................... 7 SECTION 3: NASPO ValuePoint Master Agreement Terms and Conditions ......................................................... 22 SECTION 4: Lead State (State of Arizona) Terms and Conditions ........................................................................ 37 State of Arizona Special Terms and Conditions ....................................................................................... 37 State of Arizona Uniform Terms and Conditions ...................................................................................... 50

152
CC 02-06-2024
152 of 723

Master Agreement
Section 1: General Information
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130651
Description: Software Value-Added Reseller (SVAR) Services

1.1 Purpose
The State of Arizona, State Procurement Office, is requesting proposals for Software Value-Added Reseller (SVAR) services in furtherance of the NASPO ValuePoint Cooperation Purchasing Program (NASPO ValuePoint). The purpose of this Request for Proposal (RFP) is to establish Master Agreements with qualified Offerors so that NASPO ValuePoint Cooperative Members may acquire Commercial off the Shelf Software (COTS) and related services from Software Value-Added Resellers.

The objective of this RFP is to obtain best value, and in some cases achieve more favorable pricing, than is obtainable by an individual state or local government entity because of the collective volume of potential purchases by numerous state and local government entities. The Master Agreement(s) resulting from this procurement may be used by state governments (including departments, agencies, institutions), institutions of higher education, political subdivisions (i.e., colleges, school districts, counties, cities, etc.), the District of Colombia, territories of the United States, and other eligible entities subject to approval of the individuals state procurement director and compliance with local statutory and regulatory provisions, as explained in section 3 of the NASPO ValuePoint Master Agreement Terms and Conditions. The initial term of the Master Agreement shall be two (2) years with renewal provisions as outlined in Section 3 of the NASPO ValuePoint Master Terms and Conditions (Section 4).

1.2 Lead State, Solicitation Number and Lead State Contract Administrator (LSCA) The State of Arizona, State Procurement Office (SPO) is the Lead State and issuing office for this document and all subsequent addenda relating to it. This solicitation (RFP) is a competitive process, in accordance with the Arizona Procurement Code available at https://spo.az.gov/ . The Arizona Procurement Code is a compilation in one place of Arizona Revised Statutes (ARS) 41-2501 et seq. and administrative rules and regulations A.A.C R2-7-1010 et.seq. The Solicitation #ADSPO16- 00005829 must be referred to on all proposals, correspondence, and documentation relating to this RFP.

The Lead State Contract Administrator (LSCA) identified below is the single point of contact during this procurement process. Offerors and interested persons shall direct to the Lead State Contract Administrator all questions concerning the procurement process, technical requirements of this RFP, contractual requirements, requests for brand approval, change, clarification, protests, the award process, and any other questions that may arise related to this solicitation and the resulting Master Agreement. The Lead State Contract Administrator (LSCA) designated by the State of Arizona, State Procurement Office is:

Charlotte Righetti, CPPB, CTNS State Procurement Manager State of Arizona, State Procurement Office
100 N. 15th Avenue, Suite 201
Phoenix, Arizona 85007
Phone: (602)542.9127

1.3 NASPO ValuePoint Background Information
NASPO ValuePoint (formerly known as WSCA-NASPO) is a cooperative purchasing program of all 50 states, the District of Columbia and the territories of the United States. The Program is facilitated by the NASPO Cooperative Purchasing Organization LLC, a nonprofit subsidiary of the National Association of State Procurement Officials (NASPO), doing business as NASPO ValuePoint. NASPO is a non-profit association dedicated to strengthening the procurement community through education, research, and communication. It is made up of the directors of the central purchasing offices in each 153
CC 02-06-2024
153 of 723

Master Agreement
Section 1: General Information
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130651
Description: Software Value-Added Reseller (SVAR) Services 5 | Page
of the 50 states, the District of Columbia and the territories of the United States. NASPO ValuePoint facilitates administration of the cooperative group contracting consortium of state chief procurement officials for the benefit of state departments, institutions, agencies, and political subdivisions and other eligible entities (i.e., colleges, school districts, counties, cities, some nonprofit organizations, etc.) for all states, the District of Columbia, and territories of the United States. For more information consult the following websites: www.naspovaluepoint.org and www.naspo.org .

1.4 Participating States
In addition to the Lead State conducting this solicitation, the Participating States listed below have requested to be named in this RFP as potential Users of the resulting Master Agreement. Other entities may become Participating Entities after award of the Master Agreement. State specific terms and conditions will govern each state’s Participating Addendum that will govern each state’s Participating Addendum. A listing of the Participating States can be found in Exhibit I.

1.5 Definitions – all capitalized terms in this document have the meaning as defined in AAC R2-7-101. Any capitalized term not defined in AAC R2-7-101 has the meaning defined below.
"Appliance" means a separate and discrete hardware device with integrated software (firmware), specifically designed to provide a specific computing resource. For the purposes of this solicitation only an “Appliance” which is the sole means of obtaining the Software product is allowable. “Attachment” means any item the Solicitation requires an Offeror to submit as part of the Offer. “Best and Final Offer (BAFO)” means a revision to an Offer submitted after negotiations are completed that contains the Offeror’s most favorable terms for price, service, and products to be delivered.
“Commercial Off the Shelf” (“COTS”) for the purposes of this solicitation means non-developmental software which has been created for specific uses and is available to the general public in the commercial marketplace. COTS products are designed to be implemented easily into existing systems without the need for customization.
“End-User License Agreement (EULA)” is a legal contract between the manufacturer (publisher) and the end User of an application that details how the software can and cannot be used. “eProcurement (Electronic Procurement)” means conducting all or some of the procurement function over the Internet. Point, click, buy and ship Internet technology is replacing paper-based procurement and supply management business processes. Elements of eProcurement also include Invitation for Bids, Request for Proposals, and Request for Quotations. “Excluded Software Publishers” means a Software Publisher who is unwilling to do business with a Reseller.
“Exhibit” means any document or object labeled as an Exhibit in the Solicitation or placed in the Exhibits section of the Solicitation.
154
CC 02-06-2024
154 of 723

Master Agreement
Section 1: General Information
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130651
Description: Software Value-Added Reseller (SVAR) Services 6 | Page
“Lead State Contract Administrator” (“LSCA”) means the Procurement Officer for the Master Agreement.
“Master Agreement” (“MPA”) means the contractual agreement executed between the winning (awarded) contractor (s) and the Lead State conducting the procurement on behalf of NASPO ValuePoint.
“Non-perpetual license” or Subscription License” is a temporary license that provides the right to use a particular licensed product until the end of the license-agreement term. “Participating State Contract Administrator” (“PSCA”) means the Procurement Officer for the Participating State.
“Perpetual license” means a license which is everlasting and valid if the software is being used in accordance with the license-agreement requirements.
“Person” means any corporation, business, individual, union, committee, club, or other organization or group of individuals
“Publisher” means a software manufacturer (e.g., Microsoft) “Reseller” means a Software Value-Added Reseller who is awarded under this solicitation, and who has a fully-executed (MPA and PA-s) contract.
“Reseller Cost” means the price that the Reseller pays the Publisher or Distributor to purchase software on behalf of the Participating State. Reseller Cost should not include any administrative or other mark-up costs.
“Software” means the computer program, including media and associated documentation. “Software Licensing” means allowing an individual or group to use a piece of software. “Software Maintenance and Support” means any software upgrades, annual updates, patches and fixes needed to improve functionality and keep the software in working order. “Solicitation Amendment” means a change to the Solicitation issued by the Procurement Officer. “Volume License Agreements (VLAs)” means an agreement with a Software Publisher wherein the Participating State’s total expected purchasing over a period of time is considered in establishing the discount level.
155
CC 02-06-2024
155 of 723

Master Agreement
Section 2: Scope of Work
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130651
Description: Software Value-Added Reseller (SVAR) Services 7 | Page

2.1 Software Value-Added Reseller (‘Reseller’ – “SVAR”)

2.1.1 Software Value-Added Reseller (‘Reseller’ – “SVAR”) shall be a large account reseller authorized to sell products direct from Key Software Publishers or authorized Distributors.

2.1.2 SVAR shall do the following:

2.1.2.1 Provide Commercial Off-the-Shelf-Software (COTS).

2.1.2.2 Honor existing Volume or Enterprise license agreements.

2.1.2.3 Offer maintenance and support packages on licenses already owned by the Participating State and other Purchasing Entities.

2.1.2.4 Advise the LSCA, each PSCA, and other Purchasing Entities of SVAR’s channel partner status with Key Software Publishers.

2.1.2.5 Retain or enhance reseller certifications with software publishers - At a minimum, maintain Reseller certification levels held at time of award.

If Reseller’s certification or reseller status is withdrawn or reduced, Reseller is required to immediately notify, in writing, the Lead State Contract Administrator (LSCA), each PSCA and other Purchasing Entities explaining:
 The change;
 The impact on their costs to obtain the product;
 Limitations on the products or services they may provide; and,  The reasons for the change.

Failure to provide the required notification, regarding significant negative changes in their reseller status, may be grounds for suspension or cancellation of the MPA and PA’s.

2.1.2.6 Provide Pre-Sale Advisement - There shall be no charge for these services:

2.1.2.6.1 Advise the Purchasing Entity in making strategic software application decisions by providing evaluation copies, product comparisons, needs analysis, product information and application recommendations.

2.1.2.6.2 Act as liaison between the Purchasing Entity and individual publishers in identifying best approaches and cost savings opportunities for the Purchasing Entity.

2.1.1.6.3 Examples of such advice would be:
 In selecting appropriate software;
 In explaining Volume License Agreements with complicated rules;  In determining the most cost-effective buying strategies;  In ensuring that Participating States and other Purchasing Entities are in compliance with licensing requirements; and,
 In finding software options to meet a specific need, for example, a flow-charting package.

2.1.2.7 Reseller shall negotiate to reduce Reseller Cost, to pass on savings to the Participating State and other Purchasing Entitites.
156
CC 02-06-2024
156 of 723

Master Agreement
Section 2: Scope of Work
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130651
Description: Software Value-Added Reseller (SVAR) Services 8 | Page

2.1.2.8 Provide assistance in explaining and developing Volume License and Enterprise Agreements.

2.1.2.9 Provide Software Installation Assistance.

2.1.2.9.1 Provide, at no additional cost, assistance or advice in basic installation or implementation of COTS product.

2.1.2.8.2 If the Purchasing Entity encounters difficulty in downloading or installing the software, the Reseller must provide assistance within eight (8) business hours of being informed of the problem.

2.1.2.10 Provide Software De-Installation Assistance.

2.1.2.11 Provide Tracking, Management, Usage Monitoring and Reporting of Licenses

2.1.2.11.1 Reseller shall have in place a product license inventory and asset management system, which will include an accurate inventory record of product licenses purchased under this Contract.

2.1.2.11.2 Reseller must also have the capability tracking maintenance renewal and other significant due dates.

2.1.2.11.3 At a minimum, this system shall be able to provide this information by Participating State and Purchasing Entity.

2.1.2.11.4 Reseller shall work with Participating State, other Purchasing Entities, publishers, previous and subsequent contract software resellers, and hardware computer contractors to ensure the most comprehensive record of licenses is created, maintained, and the information transferrable.

2.1.2.11.5 States may choose to award multiple PA’s under this Agreement.

Details on how licenses are to be tracked and managed under multiple awards will be determined by that awarding State.

2.1.2.11.6 As may be required by a Participating State, or other Purchasing Entity, Reseller shall work with NASPO ValuePoint computing equipment contractors, or a Participating State’s comparable computer hardware contractor, to see that any software acquired under those contracts can be tracked through this contract.

2.1.2.12 Notify Participating State and Purchasing Entities of publisher publicly announced changes pertinent to User licensing.

2.1.3 SVAR shall Develop and Maintain Website

2.1.3.1 For Participating States, Reseller shall develop and support a website specific to that State, with content approved from the LSCA or PSCA as appropriate based on content.

2.1.3.1.1 This web site information shall be available through the Internet without the use of additional software or licenses.
157
CC 02-06-2024
157 of 723

Master Agreement
Section 2: Scope of Work
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130651
Description: Software Value-Added Reseller (SVAR) Services 9 | Page

2.1.3.1.2 Website should be User friendly to allow for quick and easy access and use.

2.1.3.1.3 Website shall be available 24 x 7, except for scheduled maintenance.

2.1.3.1.4 Website shall be ADA compliant.

2.1.3.1.5 No costs or expenses associated with providing this information shall be charged to the States.

2.1.3.1.6 Universal Resource Locator (URL) for the website must be supplied to the PSCA and the LSCA within sixty (60) days of the execution of the PA.

2.1.3.1.7 The website will include contract information, product information/catalog, the capability to generate online reports, and other pertinent information as may be reasonably requested by States, such as copies of VLAs.

2.1.3.1.8 Publisher Notifications and Other Industry Information. In the event that a publisher publicly announces changes that are pertinent to User licensing, the Reseller shall assist Users by posting the information on the state websites.

2.1.3.1.9 Reseller shall provide, at no additional cost, training on how to use their website and how to use this contract in obtaining quotes and placing orders. Online training should be available on the website, but supplementary electronic (e.g. Webinars, emails), telephone or on-site training should be provided, as needed, during standard working hours.

2.1.3.2 Contract and General Information. The website shall provide contract and ordering information to include, at a minimum:

2.1.3.2.1 The contract number(s) (MPA and PA);

2.1.3.3.2 The Reseller primary contact and contacts to whom incidents are to be escalated:
 Name(s and titles
 Areas of responsibility for each contact name;
 Phone number(s); and,
 Email address(es).

2.1.3.3.3 Information on use of website,

2.1.3.3.4 Quote and ordering information; and,

2.1.3.3.5 Notifications regarding publishers and products, such as pending key product changes or upgrades.

2.1.3.3 Online Catalog

2.1.3.3.1 Reseller shall provide COTS software, and software maintenance of new or existing licensed software, under this contract. Information on approved products, customized by Participating State, will be available through an online catalog and through Reseller’s representatives either through email or telephone inquiry during the standard working hours of the Participating State. The online catalog shall provide an expansive list 158
CC 02-06-2024
158 of 723

Master Agreement
Section 2: Scope of Work
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130651
Description: Software Value-Added Reseller (SVAR) Services 10 | Page
of products allowed per the contracts, particularly those products of itemized publishers.

2.1.3.3.2 The website shall provide contract and ordering information to include, at a minimum: publishers, product names, standard product pricing, and product descriptions (photos optional or links to access product literature).

Regardless of the number and types of links to the Reseller’s electronic catalog, the Reseller shall ensure that all eligible agencies purchasing under one PA are accessing the same current base version of the product catalog. Online information shall include purchases of Volume or Enterprise License Agreement software as well as individual COTS software licenses.

2.1.3.3.3 Online catalog shall be restricted to just software. Non-authorized products or groups of products shall not be on the website. Reseller shall not use this proposed website to cross sell or cross advertise other products and or services the Reseller may be able to offer.

2.1.3.4 Product Searching Capability. At a minimum, the online catalog should be searchable by Purchasing Entity and their VLAs, Software Publisher, Product name, OEM product number, and software description (e.g., GIS, Security). The online category can be modified as Users’ needs dictate, such as including products obtained through a distributor (non-itemized publisher products) that are frequently purchased.

2.1.3.5 Online Product Quotes. Product price displayed online is a ‘not-to-exceed’ product price quote based on contract rate and real time Reseller Cost. For high dollar purchases, or quantity purchases, Purchasing Entity should request a quote by contacting Reseller representative off-line. The online pricing should allow for overrides when a quote with a negotiated better price has been offered and is being placed online. Website should have capability to track all quotes by Purchasing Entity and be easily accessible for viewing by quote number. Website shall include a shopping cart feature that allows Purchasing Entities to provide shipping instructions.

Purchasing Entities can place orders on the web either via credit card or purchase order. Specifics regarding an individual state’s requirements for placing an order may be included in that State’s Participating Addendum (PA).

2.1.3.6 User Differentiation. Catalog should be designed so as to provide a means to identify the Participating State (state agency or other eligible Purchasing Entity). This method used must not require any administrative tasks on the part of the LSCA for the MPA, the PSCA for the individual PSCA. Website should allow Users to develop personal lists and profiles, including an option to securely store and maintain procurement card information. Catalog should have the capability of being used as a ‘Punch Out’ to an individual state’s electronic purchasing system.

2.1.3.7 Online Reports. Website shall have capability to provide order history, as well as order status and order tracking.

2.1.3.8 Other. Other information may be added to the website as may be required by State (such as copies of volume license agreements) or enhancements that may be proposed by Reseller and approved by State.
159
CC 02-06-2024
159 of 723

Master Agreement
Section 2: Scope of Work
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130651
Description: Software Value-Added Reseller (SVAR) Services 11 | Page

2.2 COTS Products

2.2.1 Software which requires little or no services
IN SCOPE Offerings OUT OF SCOPE Offerings
LICENSING TYPE COTS Individual Licensing
Volume Licensing
Enterprise Licensing
Custom/Customized

LICENSING
PERIOD
Perpetual Subscription none
Delivery Shrink-Wrap Download none

HOSTING
as part of delivery
& use.

On Premise Off Premise Managed Service
Managed Services means the
proactive management of an IT
(Information Technology) asset
or object, by a third party
typically known as a MSP, on
behalf of a customer
mspalliance.com/definition-ofmanaged-services/

2.2.1.1 Most Current Version - Purchase orders shall be deemed to reference a manufacturer’s most recent release model or version of the product at the time of the order, unless the Purchasing Entity specifically requests in writing an earlier model or version and the Reseller is willing to provide such model or version.

2.2.1.2 Licenses and Maintenance Agreements

2.2.1.2.1 Volume License Agreements (VLA) and Enterprise License Agreements (ELA)
The Reseller will honor existing Participating State’s VLA’s or ELA’s with publishers and include those licenses as part of the Reseller’s license tracking service. Following an executed PA with a Participating State, and if so required by the Participating State, the Purchasing Entity and/or an individual publisher, the Reseller will identify itself to software publishers as Reseller for that Participating State or Purchasing Entity. If so required by the Publisher and Participating State, Reseller will execute a change of channel partner agreement with the Publisher. Resellers will sell additional seats consistent with Purchasing Entities’ Enterprise or Volume Agreements. Reseller will work with Participating State, Purchasing Entity(ies) and Publishers as needed to establish new VLAs or ELAs. The Reseller will work with the Publisher and Participating State as necessary to ensure the Participating State receives timely and pertinent license information, such as: license or agreement renewals, or opportunities based on actual volume.

Reseller will work directly with Purchasing Entity(ies) in establishing, signing and maintaining enrollment agreements. If Reseller is sole SVAR contractor in a State, Reseller will aggregate all enrollments together for 160
CC 02-06-2024
160 of 723

Master Agreement
Section 2: Scope of Work
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130651
Description: Software Value-Added Reseller (SVAR) Services 12 | Page
Master Agreement reporting purposes. If a PSCA elects to have multiple SVAR contractors, Reseller’s responsibilities will be delineated in that State’s PA. Resellers shall monitor and be able to report on the current levels of software ordered towards any of the Participating State’s VLA required sales levels to ensure the Participating State does not fall short and thereby incur Publisher penalties. The Reseller shall be responsible for providing license usage information to the Publishers, if such information is required by the Publishers, in a timely manner (e.g., for ‘true up’ assessments)

2.2.1.2.2 Individual Software Licenses. Purchasing Entities can purchase individual COTS licenses, such as perpetual and non-perpetual licenses, through the Reseller.

2.2.1.3 Software Maintenance and Support Agreements.

Purchasing Entities can purchase maintenance agreements, including upgrade protection, through the Reseller. Resellers will sell software maintenance agreements, even if the software was not purchased under this agreement, such as on-going support for a User’s existing perpetual license. As requested, Reseller will explain what product support or services are included in a publisher’s maintenance agreement.

2.2.1.3.1 Software Maintenance and Support. Reseller to provide needed services to support maintenance products such maintenance agreements, software upgrades, annual updates, patches and fixes needed to improve functionality and keep the software in working order. Such services may include providing recommendations on most cost-effective or appropriate long-term maintenance plan. Reseller will provide such support, not only to maintenance packages purchases under this agreement, but in support of any existing and current agreements.

2.2.1.3.2 Software Updates.

2.2.1.3.2.1 Users are eligible to receive, from the Publisher, all new releases and updates of the software, at no additional
charge, while under a maintenance agreement. A “Release” means any collection of enhancements or updates which the Publisher generally makes available to its installed base of customers of such programs. The Reseller shall assist the Purchasing Entity to obtain such releases or updates for their Users from the Publisher.

2.2.1.3.2.2 Should a User not want to receive the next upgrade, the User shall so notify the respective Publisher.

2.2.1.3.3 License Confirmations
For licenses ordered under the contract by Purchasing Entity(ies), Reseller shall be able to provide:
161
CC 02-06-2024
161 of 723

Master Agreement
Section 2: Scope of Work
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130651
Description: Software Value-Added Reseller (SVAR) Services 13 | Page
(i) Certified Licensing Confirmation Certificates for all software licenses;
(ii) Reseller’s certified license confirmation certificates in the name of such Licensee; or,
(iii) Written confirmation from the Reseller or Publisher accepting the Eligible Participating State’s contract or purchase order as proof of license.

The form of “Proof of License” provided must be acceptable proof to the Publisher, and in the format requested by the Purchasing Entity. The Proof of License shall be provided as an electronic file and/or a hardcopy document, as required by the Purchasing Entity. Reseller will retain an electronic file of Participating State’s Proof of Licenses and provide copies to the Participating State as requested.

2.2.1.3.4 Transitioning License Tracking Information at Contract Termination The license information data acquired and retained by Reseller will be stored as sortable data fields so the license information can be transferred to the Participating State upon contract termination. Reseller will work with States and Participating Entities, or their designees, to ensure that the license information data has been successfully transferred in a usable format.

2.2.1.4 Leases
Lease purchase and term leases are allowable only for Purchasing States whose rules and regulations permit leasing of software. Individual Purchasing Entities may enter into a lease agreement for the products covered in this Master Agreement, if they have the legal authority to enter into these types of agreements without going through a competitive process. No lease agreements will be reviewed or evaluated as part of this RFP evaluation process.

2.2.1.5 Software Publishers, Categories. The identified software product needs under this solicitation have been divided into three tiers: Key Itemized Publishers, Other Itemized Publishers, and Non-Itemized Publishers. See descriptions and chart which follow. As indicated, it is most desirable for Reseller to have a direct reseller agreement with the itemized software publishers. If a direct reseller agreement is not already in place between itemized software publishers and the Reseller, the Reseller is expected to enter into a direct reseller agreement and submit a rate for that itemized publisher that is better than the rate for a Non-Itemized Publisher. Over the life of this contract, product needs or volumes may change and new publishers may be added by amendment to the itemized publishers’ lists.

2.2.1.5.1 Itemized Highest Volume Publishers (Highest Volume, Itemized Lines).

The products of the publishers in this category represent the highest tier of sales volume identified for this solicitation, of those publishers who sell through resellers. This category is the one most likely to include a Participating State’s enterprise or high volume agreements with a publisher. Resellers shall be certified direct resellers for publishers in this 162
CC 02-06-2024
162 of 723

Master Agreement
Section 2: Scope of Work
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130651
Description: Software Value-Added Reseller (SVAR) Services 14 | Page
category. The preferred pricing that a Reseller receives based on their reseller certification status, in conjunction with the anticipated considerable volume of purchases through these Contracts, is the expected foundation for a very competitive base Reseller Cost, with further reductions of Reseller Cost as they are achieved through ongoing Reseller negotiations. A percentage rate above or below Reseller Cost is to be provided for each itemized publisher. Specific requirements may be required for some publishers in this category in an individual State’s PA.

2.2.1.5.2 Other Itemized Publishers (High Volume, Itemized Lines). The products of the publishers in this category represent a high level of sales volume as identified for this solicitation. This category may include a Participating State’s high volume agreements or VLAs with a publisher. It is desirable for Resellers to be certified direct resellers for publishers in this category.

A percentage rate above or below Reseller Cost is to be provided for each itemized publisher

2.2.1.5.3 Non-Itemized Publishers (all other distributed software purchases). This category is defined to include all other distributed computer software not specifically itemized. Enterprise or Volume Licensing Agreements are not anticipated in this category. New or existing software products can be added to this category at any time during the term of the Contract without the written consent of the LSCA and may be itemized in the online catalog, if volume justifies the addition. There should be one percentage rate above or below Reseller cost covering all products in this category

KEY ITEMIZED PUBLISHERS
Certification as Direct
Reseller.

OTHER ITEMIZED PUBLISHERS
Certification as direct reseller
desirable. If not certified, the
percentage rate should be no
greater than Non-Itemized rate

NON-ITEMIZED PUBLISHER
One ‘not to exceed’ rate

ADOBE AI SQUARED

CITRIX AIRWATCH MOBILE DEVICE

MANAGEMENT VMWARE

MICROSOFT ALLIANCE ENTERPRISES

NOVELL APPLE
SYMANTEC ATTACHMATE – MICROFOCUS

VMWARE AUTODESK
AUTONOMY – HP
BAKBONE – DELL

BARRACUDA

BOMGAR REMOTE SOFTWARE

CA TECHNOLOGIES
CISCO

COMPUTRONIX USA
163
CC 02-06-2024
163 of 723

Master Agreement
Section 2: Scope of Work
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130651
Description: Software Value-Added Reseller (SVAR) Services 15 | Page

COMPUWARE
COREL

DOUBLETAKE
EMC

ENCHOICE
ESET
ESRI

FREEDOM SCIENTIFIC
GUARDIAN EDGE – SYMANTEC

GW MICRO
IBM

ICM CONVERSIONS
INFOR

INTERMEDIX EMSYSTEMS
HP

HUMANWARE

INFORMATION BUILDERS

KRONOS SOFTWARE

LANDESK

LASERFISCHE

LIQUIDWARE STATUSPHERE

MICROFOCUS INC
MINJET
MPS
MQSOFTWARE – BMC

SOFTWARE

NCIRCLE
NETOP
NUANCE
ORACLE
OSAM

PASSPORT

PATCHLINK

PROOFPOINT

RSA SECURITY

REFERENCIA SYSTEMS

SAP AMERICA
SAS

SOLUTIONS SOFTWARE
SOPHOS

SPLUNK SOFTWARE

STASEEKER NETWORK

INFRASTRUCTURE

MONITORING
STELLENT – ORACLE
164
CC 02-06-2024
164 of 723

Master Agreement
Section 2: Scope of Work
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130651
Description: Software Value-Added Reseller (SVAR) Services 16 | Page

SUNGUARD
SYBASE

TECHSMITH

TREND MICRO

TRUSTWARE

ULTRABAC

VORMETRIC

WEBSENSE

2.2.1.6 Software Publishers, General Representation.

2.2.1.6.1 Excluded Software Publishers. The Reseller must agree that there are no software publishers with whom they will refuse to do business if the Software Publisher is willing to do business with them. Resellers shall advise the LSCA or designee of any Excluded Software Publishers and provide explanations for the non-representation.

2.2.1.6.2 Expanded Representation. The Reseller is expected to continue to work towards reseller certifications with publishers not currently represented, particularly with those publishers whose sales volume merit classification into the itemized publisher lines. Similarly, Reseller is expected to continue to work towards a higher certification level with current publishers

2.2.1.7 Price Quote, General. Pricing is submitted in the MPA as a percentage of Reseller Cost. Individual PA’s will use the MPA pricing as a base and may negotiate an adjusted rate. Any negotiated PA rates, exclusive of taxes or any individual state’s administrative fee, shall not exceed the MPA rates. As requested by Purchasing Entity, for example on a high volume single order, Reseller shall negotiate to reduce Reseller Cost, to pass on savings to the Participating State. Firm individual order quotes shall be provided to Purchasing Entity prior to order submittal.

2.2.1.7.1 Telephone or Email Quote Support. Reseller shall accept requests for quotes by telephone, fax, email, or online. Reseller shall accept collect telephone calls and/or provide and maintain a toll-free number for eligible agency use. Reseller shall provide an email address for receipt of requests for price quotes. Reseller shall provide written quotes by fax, email or online as requested by the Participating State.

2.2.1.7.2 Quoted Delivery Method. The quote must clearly indicate the method of delivery, whether via media, download, or 3.3 Services below.

2.2.1.7.3 Timely Quotes. Reseller agrees to work with publishers and distributors to obtain quotes and deliver software in a timely fashion.

Expected response should be within twenty-four (24) hours but no more than three (3) business days. If, after three (3) business days, the Reseller has been unable to obtain the quote or assurances that 165
CC 02-06-2024
165 of 723

Master Agreement
Section 2: Scope of Work
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130651
Description: Software Value-Added Reseller (SVAR) Services 17 | Page
they can obtain the software, the Reseller shall contact the Participating State or other Purchasing Entity with a status report. The Reseller and the Participating State/Purchasing Entity will mutually agree as to whether the Reseller shall continue to pursue a quote and within what timeframe, or whether the Reseller will provide the Participating State/Purchasing Entity with a written statement that the Reseller cannot supply the software. If the Reseller has been unable to obtain a quote within ten (10) days of the request for quote, the Reseller shall provide a written statement (email is sufficient) to Participating State/Purchasing Entity, and the LSCA as may be required under the PA, that the Reseller cannot supply the software, and the reason why.

2.2.1.7.4 Guaranteed 30 Day Quote. Reseller is required to honor all quotes for thirty (30) calendar days. If it is known that a price adjustment will occur during the thirty (30) calendar days following the quote, the Reseller may provide two quotes, based upon the date that the order is received.

2.2.1.7.5 Sales Promotion. The Reseller may conduct sales promotions involving specific products or groups of products for specified time periods. If electing to exercise this provision, the Reseller shall submit a formal request for approval to the LSCA. The request should include: the product or product groups, the promotional price as compared to the standard price and the Master Agreement price for the product or product groups, and the start and end dates of the sales promotion. LSCA’s approval shall be in the form of an amendment to the MPA. Upon approval, the Reseller shall provide conspicuous notice of the promotion to all Participating Entities.

2.2.1.7.6 A Participating State or other Participating Entity may allow the Contractor to charge a credit card fee in their Participating Addendum.

2.2.1.8 Product Delivery and Returns

2.2.1.8.1 Media. The Reseller shall work with Participating State or other Purchasing Entity to provide media via any method available and as requested by the Participating State including, but not limited to: original Publisher media, CD copies of master media duplicated by the Reseller, electronic downloads, etc. In cases where original publisher’s media is not available, the Reseller shall provide CD’s copied from master disks of the software purchased under any volume or enterprise license agreement.

2.2.1.8.2 Delivery Period. Reseller to provide delivery no longer than ten (10) business days after receipt of a valid order unless conditions arise that are outside the control of the Reseller. If delivery cannot be within this time frame, Reseller is to notify Purchasing Entity of delay and anticipated 166
CC 02-06-2024
166 of 723

Master Agreement
Section 2: Scope of Work
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130651
Description: Software Value-Added Reseller (SVAR) Services 18 | Page
ship date. If this delayed delivery is unacceptable to Purchasing Entity, the order can be cancelled without penalty.

2.2.1.8.3 Product Returns. Unopened software can be returned with no restocking fee up to 30 days from date of receipt, if allowed by the software publisher. If the software publisher has a shorter timeframe for returns or requires a restocking fee, this must be stated on the quote. If that information is not provided to the Participating State by the Reseller, Reseller is responsible for the restocking fee. If delivered software is defective, or if the incorrect product was delivered, the Reseller must agree to accept returns. If delivered software is defective, the Reseller is responsible for return shipping and packaging costs and for restocking charges if applicable. The Reseller must agree that any defective or incorrectly delivered media will be replaced by overnight delivery at the Reseller’s expense if requested by the Participating State or Purchasing Entity. If overnight delivery is not requested, all replacement products must be received by the Participating State or Purchasing Entity within seven (7) days of initial notification.

2.2.1.8.4 Shipping Charges. Items covered under this contract are FOB Destination and shipping charges are not to be included on any invoice unless the Purchasing Entity has ordered expedited shipment. For expedited shipment, Purchasing Entity would submit their order including related shipping charges, which may not exceed the cost of delivery by the carrier.

2.3 Services

IN SCOPE OUT OF SCOPE

SOFTWARE &
LICENSING TYPE COTS Volume
Licensing Custom/Customized
LICENSING PERIOD Perpetual Subscription Not Applicable
Delivery Shrink-Wrap Download Not Applicable
Hosting as part of
delivery & use On-Premise Off-Premise Managed Services

SERVICES
Basic Installation, Training and
Maintenance
Means that activity which does not require
Consulting, Configuration, Engineering,
Design or any other type of service specific
to a Purchasing Entity requiring description
of tasks and deliverables and agreement
by the parties (Statement of Work).

Consulting, configuration, engineering, design, etc.,
any type of service specific to a Purchasing Entity
requiring description of tasks and deliverables and
agreement by the parties

2.3.1 In Scope Services:

Basic Installation, Maintenance packages and Training (3.4) are considered to be within the Scope of this Solicitation. This Master Agreement is intended for the acquisition of distributed, commercial off the shelf software
167
CC 02-06-2024
167 of 723

Master Agreement
Section 2: Scope of Work
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130651
Description: Software Value-Added Reseller (SVAR) Services 19 | Page

2.3.2 (RESERVED)

2.3.3 A Participating State may include a statement in their Participating Addendum allowing state employees to purchase software licenses.

2.3.4 Individual Participating Addendums may further limit the Scope of this Solicitation.

2.3.5 This Master Agreement is not intended for the purchase of custom software applications.

2.4 Training.

2.4.1 Training shall be available in the form of tutorials for basic installation and web-based training for software operation, basic phone support.

2.4.2 Provision of information on how to access a Software Publisher’s “Help Desk” (either telecom or web-based) for basic use questions.

2.5 Customer Service and Representation.

2.5.1 Dedicated Representation and Timely Response. Reseller shall provide a dedicated representative for each Participating State. Such representative will become familiar with the State and its cooperative partners, provide a single point as needed for quote assistance, offer software recommendations, track and report on renewal deadlines, and serve as a contact point for the LSCA. Reseller must commit to returning phone calls or responding to emails within two (2) business days.

2.5.2 Problem Escalation. The Reseller must provide an incident escalation path for each State, showing on that State’s website, the name, contact information, and role of individuals to whom problems should be escalated if the problems are not resolved by primary assigned contacts.

2.5.3 Product purchasing trends. The Reseller will speak with LSCA and sourcing team quarterly to review usage and discuss possible revisions of the categorization of publishers based upon actual sales volume or other changes.

2.5.4 Contract Reviews.

2.5.4.1 Reseller is expected to conduct quarterly reviews of all sales volumes and report sales figures and savings from Publisher’s list price, by Publisher and by PA, as well as observed trends or purchasing patterns, and to present the information to the LSCA.

2.5.4.2 At the discretion of the individual participating states, an equivalent review, limited to that state, will be presented to the PSCA.

2.5.4.3 All awardees under this contract shall meet once a year with the LSCA and Sourcing Team to review usage and discuss possible revisions of the categorization of publishers based upon actual sales volume, and to discuss any service concerns, industry trends, and the effectiveness of the contract.

2.5.4.3.1 Reseller is expected to conduct a customer satisfaction survey and an audit prior to this discussion and be prepared to discuss the results, and 168
CC 02-06-2024
168 of 723

Master Agreement
Section 2: Scope of Work
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130651
Description: Software Value-Added Reseller (SVAR) Services 20 | Page
provide reports, at this review. At a minimum, the audit will report address quoting and billing accuracy, and any Reseller Cost that exceeds a Publisher’s List price for that item.

2.5.4.3.2 Based on historical sales volume information, Reseller should be prepared to discuss potential cost savings opportunities which could be passed through to Participating States.

2.5.4.3.2 In a renewal year, the annual review will take place prior to contract extensions.

2.6. Interactions with Software Publishers

2.6.1 Best Interests of Participating State. Reseller would represent the best interests of the Participating State and other Participating Entities in negotiating or otherwise working with Publishers for such items as: maximizing cost savings with best use of volume or enterprise license agreements, better pricing on individual volume buys, taking advantage of publishers’ specials, promotions, coupons or other savings opportunities.

2.6.2 Liaison with Publisher. A State may establish, in their individual PA, a requirement for Reseller to arrange with the software publisher or software publisher’s designee for implementation, customization, training, support, maintenance and other software related services. The provision of said services must be under a separate agreement between the Participating State and the applicable parties.

2.7 Reporting

2.7.1 Standard Reports
Individual participating states may require their own standard reports, such as report on savings.

Reseller shall provide these reports at the intervals, and in the format, as reasonably requested by the States. Reseller shall advise of standard reports which they can provide, and work with participating states on additional standard reports.

2.7.2 Online Reports
The SVAR shall be able to provide online, real time, reporting capabilities using website established for the state. These reports may include Back Order or Current Order Status reports. In addition, the system shall be able to provide the ability for the User agency to create custom reports. The requesting Participating State shall be able to select specific fields and create a necessary report for their specific needs. Data Fields shall include, but not be limited to, purchasing entity, Purchase Order Number, Order date, Invoice date, Publisher, Publisher Part Number, Software Reseller’s Part Number, Description, Quantity Shipped, Unit actual price, Extended Price, Sales Tax and order total. Reports shall be able to be shown online as well as emailed to the requesting Participating State, if requested. Examples of Reseller’s standard and online reports shall be submitted with the offer.

2.7.3 Custom Reports
169
CC 02-06-2024
169 of 723

Master Agreement
Section 2: Scope of Work
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130651
Description: Software Value-Added Reseller (SVAR) Services 21 | Page
Participating State and SVAR may mutually agree to include terms and conditions and pricing for the development and provision of customized reports as an optional service in a Participating Addendum.

2.8 Other Value-Added Services
SVAR may propose other Value-Added Services, e.g., key escrow, in their response. Such services from an awarded Offeror, if consistent with this Statement of Work, recommended by the Evaluation Team, and accepted by the PSCA, would be added to the final awarded contract. 170
CC 02-06-2024
170 of 723

Master Agreement
Section 4: Lead State (ARIZONA) Terms and Conditions
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130651
Description: Software Value-Added Reseller (SVAR) Services

1. Master Agreement Order of Precedence
a. Any Order placed under this Master Agreement shall consist of the following documents:
(1) A Participating State’s Participating Addendum (“PA”); (2) NASPO ValuePoint Master Agreement Terms & Conditions; (3) A Purchase Order issued against the Master Agreement; (4) The Statement of Work;
(5) The Solicitation; and
(6) Contractor’s response to the Solicitation, as revised (if permitted) and accepted by the Lead State. b. These documents shall be read to be consistent and complementary. Any conflict among these documents shall be resolved by giving priority to these documents in the order listed above. Contractor terms and conditions that apply to this Master Agreement are only those that are expressly accepted by the Lead State and must be in writing and attached to this Master Agreement as an Exhibit or Attachment.

2. Definitions
Acceptance is defined by the applicable commercial code, except Acceptance of a Product fo which acceptance testing is not required shall not occur before the completion of delivery in accordance with the Order, installation, if required, and a reasonable time for inspection of the Product.

Contractor means the person or entity delivering Products or performing services under the terms and conditions set forth in this Master Agreement.

Embedded Software means one or more software applications which permanently reside on a computing device.

Intellectual Property means any and all patents, copyrights, service marks, trademarks, trade secrets, trade names, patentable inventions, or other similar proprietary rights, in tangible or intangible form, and all rights, title, and interest therein.

Lead State means the State centrally administering any resulting Master Agreement(s).

Master Agreement means the underlying agreement executed by and between the Lead State, acting on behalf of the NASPO ValuePoint program, and the Contractor, as now or hereafter amended.

NASPO ValuePoint is the NASPO Cooperative Purchasing Organization LLC, doing business as NASPO ValuePoint, a 501(c)(3) limited liability company that is a subsidiary organization the National Association of State Procurement Officials (NASPO), the sole member of NASPO ValuePoint. NASPO ValuePoint facilitates administration of the NASPO cooperative group contracting consortium of state chief procurement officials for the benefit of state departments, institutions, agencies, and political subdivisions and other eligible entities (i.e., colleges, school districts, counties, cities, some nonprofit organizations, etc.) for all states and the District of Columbia. NASPO ValuePoint is identified in the Master Agreement as the recipient of reports and may perform contract administration functions relating to collecting and receiving reports as well as other contract administration functions as assigned by the Lead State. 171
CC 02-06-2024
171 of 723

Master Agreement
Section 3: NASPO ValuePoint Master Agreement Terms and
Conditions
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130651
Description: Software Value-Added Reseller (SVAR) Services 23 | Page
Order or Purchase Order means any purchase order, sales order, contract or other document used by a Purchasing Entity to order the Products.

Participating Addendum means a bilateral agreement executed by a Contractor and a Participating State incorporating this Master Agreement and any other additional Participating State specific language or other requirements, e.g. ordering procedures specific to the Participating State, other terms and conditions.

Participating State means a state, or other legal entity, properly authorized to enter into a Participating Addendum.

Participating State means a state, the District of Columbia, or one of the territories of the United States that is listed in the Request for Proposal as intending to participate. A Participating State is not required to participate through execution of a Participating Addendum. Upon execution of the Participating Addendum, a Participating State becomes a Participating State.

Product means any equipment, software (including embedded software), documentation, service or other deliverable supplied or created by the Contractor pursuant to this Master Agreement. The term Products, supplies and services, and products and services are used interchangeably in these terms and conditions.

Purchasing Entity means a state, city, county, district, other political subdivision of a State, and a nonprofit organization under the laws of some states if authorized by a Participating Addendum, who issues a Purchase Order against the Master Agreement and becomes financially committed to the purchase.

3. Term of the Master Agreement
The initial term of this Master Agreement is for two (2) years. This Master Agreement may be extended beyond the original contract period for successive periods with a maximum aggregate, including all extensions, not to exceed five (5) years at the Lead State’s discretion and by mutual agreement and upon review of requirements of Participating Entities, current market conditions, and Contractor performance.

4. Amendments
The terms of this Master Agreement shall not be waived, altered, modified, supplemented or amended in any manner whatsoever without prior written approval of the Lead State.

5. Assignment/Subcontracts
a. Contractor shall not assign, sell, transfer, subcontract or sublet rights, or delegate responsibilities under this Master Agreement, in whole or in part, without the prior written approval of the Lead State. b. The Lead State reserves the right to assign any rights or duties, including written assignment of contract administration duties to NASPO Cooperative Purchasing Organization LLC, doing business as NASPO ValuePoint.

6. Price and Rate Guarantee Period
All prices and rates must be guaranteed for the initial term of the Master Agreement. Following the initial Master Agreement period, any request for price or rate adjustment must be for an equal guarantee period, and must be made at least ninety (90) days prior to the effective date. Requests for price or rate adjustment must include sufficient documentation supporting the request. Any adjustment or amendment to the Master Agreement shall not be effective unless approved by the Lead State. No retroactive adjustments to prices or 172
CC 02-06-2024
172 of 723

Master Agreement
Section 3: NASPO ValuePoint Master Agreement Terms and
Conditions
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130651
Description: Software Value-Added Reseller (SVAR) Services 24 | Page
rates will be allowed.

7. Cancellation
Unless otherwise stated, this Master Agreement may be canceled by either party upon 60 days written notice prior to the effective date of the cancellation. Further, any Participating State may cancel its participation upon 30 days written notice, unless otherwise limited or stated in the Participating Addendum. Cancellation may be in whole or in part. Any cancellation under this provision shall not affect the rights and obligations attending orders outstanding at the time of cancellation, including any right of and Purchasing Entity to indemnification by the Contractor, rights of payment for Products delivered and accepted, and rights attending any warranty or default in performance in association with any Order. Cancellation of the Master Agreement due to Contractor default may be immediate.

8. Confidentiality, Non-Disclosure, and Injunctive Relief Provisions governing confidentiality of information during performance of orders for the State of Arizona are governed by The State of Arizona Special Terms and Conditions. Except where a Participating Addendum prescribes otherwise, this section governs confidentiality and disclosure of information of other Purchasing Entities.
a. Confidentiality. Contractor acknowledges that it and its employees or agents may, in the course of providing a Product under this Master Agreement, be exposed to or acquire information that is confidential to Purchasing Entity’s or Purchasing Entity’s clients. Any and all information of any form that is marked as confidential or would by its nature be deemed confidential obtained by Contractor or its employees or agents in the performance of this Master Agreement, including, but not necessarily limited to (1) any Purchasing Entity’s records, (2) personnel records, and (3) information concerning individuals, is confidential information of Purchasing Entity (“Confidential Information”). Any reports or other documents or items (including software) that result from the use of the Confidential Information by Contractor shall be treated in the same manner as the Confidential Information. Confidential Information does not include information that (1) is or becomes (other than by disclosure by Contractor) publicly known; (2) is furnished by Purchasing Entity to others without restrictions similar to those imposed by this Master Agreement; (3) is rightfully in Contractor’s possession without the obligation of nondisclosure prior to the time of its disclosure under this Master Agreement; (4) is obtained from a source other than Purchasing Entity without the obligation of confidentiality, (5) is disclosed with the written consent of Purchasing Entity or; (6) is independently developed by employees, agents or subcontractors of Contractor who can be shown to have had no access to the Confidential Information. b. Non-Disclosure. Contractor shall hold Confidential Information in confidence, using at least the industry standard of confidentiality, and shall not copy, reproduce, sell, assign, license, market, transfer or otherwise dispose of, give, or disclose Confidential Information to third parties or use Confidential Information for any purposes whatsoever other than what is necessary to the performance of Orders placed under this Master Agreement. Contractor shall advise each of its employees and agents of their obligations to keep Confidential Information confidential. Contractor shall use commercially reasonable efforts to assist Purchasing Entity in identifying and preventing any unauthorized use or disclosure of any Confidential Information. Without limiting the generality of the foregoing, Contractor shall advise Purchasing Entity, applicable Participating State, and the Lead State immediately if Contractor learns or has reason to believe that any person who has had access to Confidential Information has violated or intends to violate the terms of this Master Agreement, and Contractor shall at its expense cooperate with Purchasing Entity in seeking injunctive or other equitable relief in the name of Purchasing Entity or Contractor against any such person. Except as directed by Purchasing Entity, Contractor will not at any time during or after the term of this Master Agreement disclose, directly or 173
CC 02-06-2024
173 of 723

Master Agreement
Section 3: NASPO ValuePoint Master Agreement Terms and
Conditions
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130651
Description: Software Value-Added Reseller (SVAR) Services 25 | Page
indirectly, any Confidential Information to any person, except in accordance with this Master Agreement, and that upon termination of this Master Agreement or at Purchasing Entity’s request, Contractor shall turn over to Purchasing Entity all documents, papers, and other matter in Contractor's possession that embody Confidential Information. Notwithstanding the foregoing, Contractor may keep one copy of such Confidential Information necessary for quality assurance, audits and evidence of the performance of this Master Agreement. c. Injunctive Relief. Contractor acknowledges that breach of this section, including disclosure of any Confidential Information, will cause irreparable injury to Purchasing Entity that is inadequately compensable in damages. Accordingly, Purchasing Entity may seek and obtain injunctive relief against the breach or threatened breach of the foregoing undertakings, in addition to any other legal remedies that may be available.

Contractor acknowledges and agrees that the covenants contained herein are necessary for the protection of the legitimate business interests of Purchasing Entity and are reasonable in scope and content. d. Purchasing Entity Law. These provisions shall be applicable only to extent they are not in conflict with the applicable public disclosure laws of any Purchasing Entity.

9. Right to Publish
Throughout the duration of this Master Agreement, Contractor must secure from the Lead State prior approval for the release of any information that pertains to the potential work or activities covered by the Master Agreement.

The Contractor shall not make any representations of NASPO ValuePoint’s opinion or position as to the quality or effectiveness of the services that are the subject of this Master Agreement without prior written consent. Failure to adhere to this requirement may result in termination of the Master Agreement for cause.

10. Defaults and Remedies
a. The occurrence of any of the following events shall be an event of default under this Master Agreement:
(1) Nonperformance of contractual requirements; or
(2) A material breach of any term or condition of this Master Agreement; or (3) Any certification, representation or warranty by Contractor in response to the solicitation or in this Master Agreement that proves to be untrue or materially misleading; or (4) Institution of proceedings under any bankruptcy, insolvency, reorganization or similar law, by or against Contractor, or the appointment of a receiver or similar officer for Contractor or any of its property, which is not vacated or fully stayed within thirty (30) calendar days after the institution or occurrence thereof; or
(5) Any default specified in another section of this Master Agreement. b. Upon the occurrence of an event of default, Lead State shall issue a written notice of default, identifying the nature of the default, and providing a period of 15 calendar days in which Contractor shall have an opportunity to cure the default. The Lead State shall not be required to provide advance written notice or a cure period and may immediately terminate this Master Agreement in whole or in part if the Lead State, in its sole discretion, determines that it is reasonably necessary to preserve public safety or prevent immediate public crisis. Time allowed for cure shall not diminish or eliminate Contractor’s liability for damages, including liquidated damages to the extent provided for under this Master Agreement. c. If Contractor is afforded an opportunity to cure and fails to cure the default within the period specified in the written notice of default, Contractor shall be in breach of its obligations under this Master Agreement and Lead State shall have the right to exercise any or all of the following remedies:
174
CC 02-06-2024
174 of 723

Master Agreement
Section 3: NASPO ValuePoint Master Agreement Terms and
Conditions
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130651
Description: Software Value-Added Reseller (SVAR) Services 26 | Page
(1) Exercise any remedy provided by law; and
(2) Terminate this Master Agreement and any related Contracts or portions thereof; and (3) Impose liquidated damages as provided in this Master Agreement; and (4) Suspend Contractor from being able to respond to future bid solicitations; and (5) Suspend Contractor’s performance; and
(6) Withhold payment until the default is remedied.
d. Unless otherwise specified in the Participating Addendum, in the event of a default under a Participating Addendum, a Participating State shall provide a written notice of default as described in this section and have all of the rights and remedies under this paragraph regarding its participation in the Master Agreement, in addition to those set forth in its Participating Addendum. Unless otherwise specified in a Purchase Order, a Purchasing Entity shall provide written notice of default as described in this section and have all of the rights and remedies under this paragraph and any applicable Participating Addendum with respect to an Order placed by the Purchasing Entity. Nothing in these Master Agreement Terms and Conditions shall be construed to limit the rights and remedies available to a Purchasing Entity under the applicable commercial code.

11. Shipping and Delivery.

Section 3.2.1.8 of the solicitation prescribes requirements for product delivery and return.

12. Changes in Contractor Representation
The Contractor must notify the Lead State of changes in the Contractor’s key administrative personnel, in writing within 10 calendar days of the change. The Lead State reserves the right to approve changes in key personnel, as identified in the Contractor’s proposal. The Contractor agrees to propose replacement key personnel having substantially equal or better education, training, and experience as was possessed by the key person proposed and evaluated in the Contractor’s proposal.

13. Force Majeure
Neither party to this Master Agreement shall be held responsible for delay or default caused by “force majeure,” as that term is defined in and under conditions specified in section 6.4 of the State of Arizona Uniform Terms and Conditions.

14. Indemnification
a. Section 5.1X1.1 of the State of Arizona Special Terms and Conditions governs indemnification of the State of Arizona. With respect to other entities, the Contractor shall defend, indemnify and hold harmless NASPO, NASPO Cooperative Purchasing Organization LLC (doing business as NASPO ValuePoint), the Lead State, Participating Entities, and Purchasing Entities, along with their officers, agents, and employees as well as any person or entity for which they may be liable, from and against claims, damages or causes of action including reasonable attorneys’ fees and related costs for any death, injury, or damage to property arising from act(s), error(s), or omission(s) of the Contractor, its employees or subcontractors or volunteers, at any tier, relating to the performance under the Master Agreement.
b. Indemnification – Intellectual Property. Section 6.3 of the State of Arizona Uniform Terms and Conditions governs indemnification of the State for intellectual property infringement claims. With respect to other entities the Contractor shall defend, indemnify and hold harmless NASPO, NASPO Cooperative Purchasing 175
CC 02-06-2024
175 of 723

Master Agreement
Section 3: NASPO ValuePoint Master Agreement Terms and
Conditions
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130651
Description: Software Value-Added Reseller (SVAR) Services 27 | Page
Organization LLC (doing business as NASPO ValuePoint), Participating Entities, Purchasing Entities, along with their officers, agents, and employees as well as any person or entity for which they may be liable ("Indemnified Party"), from and against claims, damages or causes of action including reasonable attorneys’ fees and related costs arising out of the claim that the Product or its use, infringes Intellectual Property rights ("Intellectual Property Claim").
(1) The Contractor’s obligations under this section shall not extend to any combination of the Product with any other product, system or method, unless the Product, system or method is:
(a) provided by the Contractor or the Contractor’s subsidiaries or affiliates; (b) specified by the Contractor to work with the Product; or (c) reasonably required, in order to use the Product in its intended manner, and the infringement could not have been avoided by substituting another reasonably available product, system or method capable of performing the same function; or
(d) It would be reasonably expected to use the Product in combination with such product, system or method.
(2) The Indemnified Party shall notify the Contractor within a reasonable time after receiving notice of an Intellectual Property Claim. Even if the Indemnified Party fails to provide reasonable notice, the Contractor shall not be relieved from its obligations unless the Contractor can demonstrate that it was prejudiced in defending the Intellectual Property Claim resulting in increased expenses or loss to the Contractor. If the Contractor promptly and reasonably investigates and defends any Intellectual Property Claim, it shall have control over the defense and settlement of it. However, the Indemnified Party must consent in writing for any money damages or obligations for which it may be responsible. The Indemnified Party shall furnish, at the Contractor’s reasonable request and expense, information and assistance necessary for such defense. If the Contractor fails to vigorously pursue the defense or settlement of the Intellectual Property Claim, the Indemnified Party may assume the defense or settlement of it and the Contractor shall be liable for all costs and expenses, including reasonable attorneys’ fees and related costs, incurred by the Indemnified Party in the pursuit of the Intellectual Property Claim. Unless otherwise agreed in writing, this section is not subject to any limitations of liability in this Master Agreement or in any other document executed in conjunction with this Master Agreement.

15. Independent Contractor
The Contractor shall be an independent contractor. Contractor shall have no authorization, express or implied, to bind the Lead State, Participating States, other Participating Entities, or Purchasing Entities to any agreements, settlements, liability or understanding whatsoever, and agrees not to hold itself out as agent except as expressly set forth herein or as expressly agreed in any Participating Addendum.

16. Individual Customers
Except to the extent modified by a Participating Addendum, each Purchasing Entity shall follow the terms and conditions of the Master Agreement and applicable Participating Addendum and will have the same rights and responsibilities for their purchases as the Lead State has in the Master Agreement, including but not limited to, any indemnity or right to recover any costs as such right is defined in the Master Agreement and applicable Participating Addendum for their purchases. Each Purchasing Entity will be responsible for its own charges, fees, and liabilities. The Contractor will apply the charges and invoice each Purchasing Entity individually. 176
CC 02-06-2024
176 of 723

Master Agreement
Section 3: NASPO ValuePoint Master Agreement Terms and
Conditions
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130651
Description: Software Value-Added Reseller (SVAR) Services 28 | Page

17. Insurance
a. The insurance requirements of the State of Arizona are specified in section 5.1 X 1.2 of the State of Arizona Special Terms and Conditions. For performance in other states, unless otherwise agreed in a Participating Addendum, Contractor shall, during the term of this Master Agreement, maintain in full force and effect, the insurance described in this section. Contractor shall acquire such insurance from an insurance carrier or carriers licensed to conduct business in each Participating State’s state and having a rating of A-, Class VII or better, in the most recently published edition of Best’s Reports. Failure to buy and maintain the required insurance may result in this Master Agreement’s termination or, at a Participating State’s option, result in termination of its Participating Addendum.
b. Coverage shall be written on an occurrence basis. The minimum acceptable limits shall be as indicated below, with no deductible for each of the following categories:
1) Commercial General Liability (CGL) – Occurrence Form Policy shall include bodily injury, property damage, and broad form contractual liability coverage.

General Aggregate $2,000,000
Products – Completed Operations Aggregate $1,000,000
Personal and Advertising Injury $1,000,000
Damage to Rented Premises $50,0000
Each Occurrence $1,000,000
2) Business Automobile Liability
Bodily injury and Property Damage for any owned, hired, and/or non-owned automobiles used in the performance of this Contract. Combined Single Limit (CSL) $1,000,000 3) Technology Errors & Omissions Insurance
Each Claim $2,000,000
Annual Aggregate $2,000,000
Such insurance shall cover any, and all errors, omissions, or negligent acts in the delivery of products, services, and/or licensed programs under this contract. Coverage shall include or shall not exclude services, and/or licensed programs under this contract. Coverage shall include or shall not exclude settlement and/or defense of claims involving intellectual property, including but not limited to patent or copyright infringement. In the event that Tech E&O insurance required by this Contact is written on a claims-made basis, Contractor warrants that any retroactive date under the policy shall precede the effective date of this Contract and, either continuous coverage will be maintained or an extended discovery period will be exercised for a period of two (2) years, beginning at the time work under this contract is completed.
c. Contractor shall pay premiums on all insurance policies. Such policies shall also reference this Master Agreement and shall have a condition that they not be revoked by the insurer until thirty (30) calendar days 177
CC 02-06-2024
177 of 723

Master Agreement
Section 3: NASPO ValuePoint Master Agreement Terms and
Conditions
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130651
Description: Software Value-Added Reseller (SVAR) Services 29 | Page
after notice of intended revocation thereof shall have been given to Purchasing Entity and Participating State by the Contractor.
d. Prior to commencement of performance, Contractor shall provide to the Lead State a written endorsement to the Contractor’s general liability insurance policy or other documentary evidence acceptable to the Lead State that (1) names the Participating States identified in the Request for Proposal as additional insureds, (2) provides that no material alteration, cancellation, non-renewal, or expiration of the coverage contained in such policy shall have effect unless the named Participating State has been given at least thirty (30) days prior written notice, and (3) provides that the Contractor’s liability insurance policy shall be primary, with any liability insurance of any Participating State as secondary and noncontributory. Unless otherwise agreed in any Participating Addendum, the Participating State’s rights and Contractor’s obligations are the same as those specified in the first sentence of this subsection. Before performance of any Purchase Order issued after execution of a Participating Addendum authorizing it, the Contractor shall provide to a Purchasing Entity or Participating State who requests it the same information described in this subsection. e. Contractor shall furnish to the Lead State, Participating State, and, on request, the Purchasing Entity copies of certificates of all required insurance within thirty (30) calendar days of the execution of this Master Agreement, the execution of a Participating Addendum, or the Purchase Order’s effective date and prior to performing any work. The insurance certificate shall provide the following information: the name and address of the insured; name, address, telephone number and signature of the authorized agent; name of the insurance company (authorized to operate in all states); a description of coverage in detailed standard terminology (including policy period, policy number, limits of liability, exclusions and endorsements); and an acknowledgment of the requirement for notice of cancellation. Copies of renewal certificates of all required insurance shall be furnished within thirty (30) days after any renewal date. These certificates of insurance must expressly indicate compliance with each and every insurance requirement specified in this section.

Failure to provide evidence of coverage may, at sole option of the Lead State, or any Participating State, result in this Master Agreement’s termination or the termination of any Participating Addendum. f. Coverage and limits shall not limit Contractor’s liability and obligations under this Master Agreement, any Participating Addendum, or any Purchase Order.

18. Laws and Regulations
Any and all Products offered and furnished shall comply with solicitation section 5.10, Compliance with Applicable Laws.

19. License of Pre-Existing Intellectual Property
Any rights to intellectual property shall be as prescribed in the Lead State’s solicitation and resulting contract, and Purchasing Entities shall have the same rights as the Lead State under those provisions.

20. No Waiver of Sovereign Immunity
In no event shall this Master Agreement, any Participating Addendum or any contract or any Purchase Order issued thereunder, or any act of a Lead State, a Participating State, or a Purchasing Entity be a waiver of any form of defense or immunity, whether sovereign immunity, governmental immunity, immunity based on the Eleventh Amendment to the Constitution of the United States or otherwise, from any claim or from the jurisdiction of any court.

This section applies to a claim brought against the Participating State only to the extent Congress 178
CC 02-06-2024
178 of 723

Master Agreement
Section 3: NASPO ValuePoint Master Agreement Terms and
Conditions
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130651
Description: Software Value-Added Reseller (SVAR) Services 30 | Page
has appropriately abrogated the Participating State’s sovereign immunity and is not consent by the Participating State to be sued in federal court. This section is also not a waiver by the Participating State of any form of immunity, including but not limited to sovereign immunity and immunity based on the Eleventh Amendment to the Constitution of the United States.

21. Ordering
a. Master Agreement order and purchase order numbers shall be clearly shown on all acknowledgments, shipping labels, packing slips, invoices, and on all correspondence. b. The resulting Master Agreements permit Purchasing Entities to define project-specific requirements and informally compete the requirement among companies having a Master Agreement on an “as needed” basis.

This procedure may also be used when requirements are aggregated or other firm commitments may be made to achieve reductions in pricing. This procedure may be modified in Participating Addenda and adapted to Purchasing Entity rules and policies. The Purchasing Entity may in its sole discretion determine which Master Agreement Contractors should be solicited for a quote. The Purchasing Agency may select the quote that it considers most advantageous, cost and other factors considered. c. Each Purchasing Entity will identify and utilize its own appropriate purchasing procedure and documentation.

Contractor is expected to become familiar with the Purchasing Entities’ rules, policies, and procedures regarding the ordering of supplies and/or services contemplated by this Master Agreement. d. Contractor shall not begin work without a valid Purchase Order or other appropriate commitment document compliance with the law of the Purchasing Entity.
e. Orders may be placed consistent with the terms of this Master Agreement during the term of the Master Agreement.
f. All Orders pursuant to this Master Agreement, at a minimum, shall include:
(1) The services or supplies being delivered;
(2) The place and requested time of delivery;
(3) A billing address;
(4) The name, phone number, and address of the Purchasing Entity representative; (5) The price per hour or other pricing elements consistent with this Master Agreement and the contractor’s proposal;
(6) A ceiling amount of the order for services being ordered; and (7) The Master Agreement identifier.
g. All communications concerning administration of Orders placed shall be furnished solely to the authorized purchasing agent within the Purchasing Entity’s purchasing office, or to such other individual identified in writing in the Order.
h. Orders must be placed pursuant to this Master Agreement prior to the termination date thereof, but may have a delivery date or performance period up to 120 days past the then-current termination date of this Master Agreement. Contractor is reminded that financial obligations of Purchasing Entities payable after the current applicable fiscal year are contingent upon agency funds for that purpose being appropriated, budgeted, and otherwise made available.
i. Notwithstanding the expiration or termination of this Master Agreement, Contractor agrees to perform in accordance with the terms of any Orders then outstanding at the time of such expiration or termination.

Contractor shall not honor any Orders placed after the expiration or termination of this Master Agreement, or 179
CC 02-06-2024
179 of 723

Master Agreement
Section 3: NASPO ValuePoint Master Agreement Terms and
Conditions
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130651
Description: Software Value-Added Reseller (SVAR) Services 31 | Page
otherwise inconsistent with its terms. Orders from any separate indefinite quantity, task orders, or other form of indefinite delivery order arrangement priced against this Master Agreement may not be placed after the expiration or termination of this Master Agreement, notwithstanding the term of any such indefinite delivery order agreement.

22. Participants
a. Contractor may not deliver Products under this Master Agreement until a Participating Addendum acceptable to the Participating State and Contractor is executed. The NASPO ValuePoint Master Agreement Terms and Conditions are applicable to any Order by a Participating State (and other Purchasing Entities covered by their Participating Addendum), except to the extent altered, modified, supplemented or amended by a Participating Addendum. By way of illustration and not limitation, this authority may apply to unique delivery and invoicing requirements, confidentiality requirements, defaults on Orders, governing law and venue relating to Orders by a Participating State, indemnification, and insurance requirements. Statutory or constitutional requirements relating to availability of funds may require specific language in some Participating Addenda in order to comply with applicable law. The expectation is that these alterations, modifications, supplements, or amendments will be addressed in the Participating Addendum or, with the consent of the Purchasing Entity and Contractor, may be included in the ordering document (e.g. purchase order or contract) used by the Purchasing Entity to place the Order.
b. Use of specific NASPO ValuePoint cooperative Master Agreements by state agencies, political subdivisions and other Participating Entities (including cooperatives) authorized by individual state’s statutes to use state contracts are subject to the approval of the respective State Chief Procurement Official. Issues of interpretation and eligibility for participation are solely within the authority of the respective State Chief Procurement Official.
c. Obligations under this Master Agreement are limited to those Participating Entities who have signed a Participating Addendum and Purchasing Entities within the scope of those Participating Addenda. Financial obligations of Participating States are limited to the orders placed by the departments or other state agencies and institutions having available funds. Participating States incur no financial obligations on behalf of political subdivisions. Contractor shall email a fully executed PDF copy of each Participating Addendum to PA@wscanaspo.org to support documentation of participation and posting in appropriate data bases. d. NASPO Cooperative Purchasing Organization LLC, doing business as NASPO ValuePoint, is not a party to the Master Agreement. It is a nonprofit cooperative purchasing organization assisting states in administering the NASPO cooperative purchasing program for state government departments, institutions, agencies and political subdivisions (e.g., colleges, school districts, counties, cities, etc.) for all 50 states, the District of Columbia and the territories of the United States.
e. State Participating Addenda or other Participating Addenda shall not be construed to amend the terms of this Master Agreement between the Lead State and Contractor. f. Participating Entities who are not states may under some circumstances sign their own Participating Addendum, subject to the approval of participation by the Chief Procurement Official of the state where the Participating State is located.
g. Resale. “Resale” means any transfer of software for compensation or assignment of services for compensation. Subject to any specific conditions included in the solicitation or Contractor’s proposal as accepted by the Lead State, or as explicitly permitted in a Participating Addendum, Purchasing Entities may not resell Products (the definition of which includes software and services that are deliverables). Absent any 180
CC 02-06-2024
180 of 723

Master Agreement
Section 3: NASPO ValuePoint Master Agreement Terms and
Conditions
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130651
Description: Software Value-Added Reseller (SVAR) Services 32 | Page
such condition or explicit permission, this limitation does not prohibit: payments by employees of a Purchasing Entity for Products; sales of Products to the general public as surplus property; and fees associated with inventory transactions with other governmental or nonprofit entities under cooperative agreements and consistent with a Purchasing Entity’s laws and regulations. Any sale or transfer permitted by this subsection must be consistent with license rights granted for use of intellectual property.

23. Payment
Payment for completion of a contract order is normally made within 30 days following the date the entire order is delivered or the date a correct invoice is received, whichever is later. After 45 days the Contractor may assess overdue account charges up to a maximum rate of one percent per month on the outstanding balance.

Payments will be remitted by mail. Payments may be made via a State or political subdivision “Purchasing Card” with no additional charge.

Any prompt payment terms proposed by contractor shall be extended to all Purchasing Entities.

24. Public Information.

This Master Agreement and all related documents are subject to disclosure pursuant to the Purchasing Entity’s public information laws.

25. Records Administration and Audit.
a. The Contractor shall maintain books, records, documents, and other evidence pertaining to this Master Agreement and orders placed by Purchasing Entities under it to the extent and in such detail as shall adequately reflect performance and administration of payments and fees. Contractor shall permit the Lead State, a Participating State, a Purchasing Entity, the federal government (including its grant awarding entities and the U.S. Comptroller General), and any other duly authorized agent of a governmental agency, to audit, inspect, examine, copy and/or transcribe Contractor's books, documents, papers and records directly pertinent to this Master Agreement or orders placed by a Purchasing Entity under it for the purpose of making audits, examinations, excerpts, and transcriptions. This right shall survive for a period of five (5) years following termination of this Agreement or final payment for any order placed by a Purchasing Entity against this Agreement, whichever is later, to assure compliance with the terms hereof or to evaluate performance hereunder.
b. Without limiting any other remedy available to any governmental entity, the Contractor shall reimburse the applicable Lead State, Participating State, or Purchasing Entity for any overpayments inconsistent with the terms of the Master Agreement or orders or underpayment of fees found as a result of the examination of the Contractor’s records.
c. The rights and obligations herein right exist in addition to any quality assurance obligation in the Master Agreement requiring the Contractor to self-audit contract obligations and that permits the Lead State to review compliance with those obligations.

26. Administrative Fees
a. The Contractor shall pay to NASPO ValuePoint, or its assignee, a NASPO ValuePoint Administrative Fee of one-quarter of one percent (0.25% or 0.0025) no later than 60 days following the end of each calendar quarter.

The NASPO ValuePoint Administrative Fee shall be submitted quarterly and is based on all sales of products and services under the Master Agreement (less any charges for taxes or shipping). The NASPO ValuePoint 181
CC 02-06-2024
181 of 723

Master Agreement
Section 3: NASPO ValuePoint Master Agreement Terms and
Conditions
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130651
Description: Software Value-Added Reseller (SVAR) Services 33 | Page
Administrative Fee is not negotiable. This fee is to be included as part of the pricing submitted with proposal. b. Additionally, some states, such as the State of Arizona, may require an additional fee be paid directly to the state only on purchases made by Purchasing Entities within that state. For all such requests, the fee level, payment method and schedule for such reports and payments will be incorporated into the Participating Addendum that is made a part of the Master Agreement. The Contractor may adjust the Master Agreement pricing accordingly for purchases made by Purchasing Entities within the jurisdiction of the state. All such agreements shall not affect the NASPO ValuePoint Administrative Fee percentage or the prices paid by the Purchasing Entities outside the jurisdiction of the state requesting the additional fee. The NASPO ValuePoint Administrative Fee in subsection 26a shall be based on the gross amount of all sales (less any charges for taxes or shipping) at the adjusted prices (if any) in Participating Addenda.

27. NASPO ValuePoint Summary and Detailed Usage Reports In addition to other reports that may be required by this solicitation, the Contractor shall provide the following NASPO ValuePoint reports.
a. Summary Sales Data. The Contractor shall submit quarterly sales reports directly to NASPO ValuePoint using the NASPO ValuePoint Quarterly Sales/Administrative Fee Reporting Tool found at http://www.naspo.org/WNCPO/Calculator.aspx. Any/all sales made under the contract shall be reported as cumulative totals by state. Even if Contractor experiences zero sales during a calendar quarter, a report is still required. Reports shall be due no later than 30 day following the end of the calendar quarter (as specified in the reporting tool).
b. Detailed Sales Data. Contractor shall also report detailed sales data by: (1) state; (2) entity/customer type, e.g. local government, higher education, K12, non-profit; (3) Purchasing Entity name; (4) Purchasing Entity billto and ship-to locations; (4) Purchasing Entity and Contractor Purchase Order identifier/number(s); (5) Purchase Order Type (e.g. sales order, credit, return, upgrade, determined by industry practices); (6) Purchase Order date; (7) Ship Date; (8) and line item description, including product number if used. The report shall be submitted in any form required by the solicitation. Reports are due on a quarterly basis and must be received by the Lead State and NASPO ValuePoint Cooperative Development Team no later than thirty (30) days after the end of the reporting period. Reports shall be delivered to the Lead State and to the NASPO ValuePoint Cooperative Development Team electronically through a designated portal, email, CD-Rom, flash drive or other method as determined by the Lead State and NASPO ValuePoint. Detailed sales data reports shall include sales information for all sales under Participating Addenda executed under this Master Agreement. The format for the detailed sales data report is in shown in EXHIBIT III_Cooperative Contract Sales Reporting Data Requirements and Data Format.
c. Reportable sales for the summary sales data report and detailed sales data report includes sales to employees for personal use where authorized by the solicitation and the Participating Addendum. Report data for employees should be limited to ONLY the state and entity they are participating under the authority of (state and agency, city, county, school district, etc.) and the amount of sales. No personal identification numbers, e.g. names, addresses, social security numbers or any other numerical identifier, may be submitted with any report.
d. Contractor shall provide the NASPO ValuePoint Cooperative Development Coordinator with an executive summary each quarter that includes, at a minimum, a list of states with an active Participating Addendum, states that Contractor is in negotiations with and any PA roll out or implementation activities and issues.

NASPO ValuePoint Cooperative Development Coordinator and Contractor will determine the format and content of the executive summary. The executive summary is due 30 days after the conclusion of each 182
CC 02-06-2024
182 of 723

Master Agreement
Section 3: NASPO ValuePoint Master Agreement Terms and
Conditions
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130651
Description: Software Value-Added Reseller (SVAR) Services 34 | Page
calendar quarter.
e. Timely submission of these reports is a material requirement of the Master Agreement. The recipient of the reports shall have exclusive ownership of the media containing the reports. The Lead State and NASPO ValuePoint shall have a perpetual, irrevocable, non-exclusive, royalty free, transferable right to display, modify, copy, and otherwise use reports, data and information provided under this section.

28. Standard of Performance and Acceptance.

Determination of the acceptability of services shall be made by the sole judgement of the Purchasing Entity.

Acceptance shall be in writing, verbal acceptance will not be allowed. Services shall be completed in accordance with the Scope of Work, agreed to and accepted schedules, plans, and agreed to performance standards. Acceptance shall be one hundred percent (100%) functionality, which will be determined by the Purchasing Entity. Acceptance criteria shall include, but not be limited to conformity to the scope of work, quality of workmanship, and successfully performing all required Tasks. Nonconformance to a stated acceptance and performance criteria of both services and or products, as required, shall result in a delay for payment. The warranty period will begin upon Acceptance.

29. Warranty
The Contractor warrants for a period of 90 days from the date of Acceptance in accordance with the provisions of section 7 of the State of Arizona Uniform Terms and Conditions and section 5.1 N. of the State of Arizona Special Terms and Conditions, with rights of the State available to other Purchasing Entities. Upon breach of the warranty, the Contractor will repair or replace (at no charge to the Purchasing Entity) the Product whose nonconformance is discovered and made known to the Contractor. If the repaired and/or replaced Product proves to be inadequate, or fails of its essential purpose, the Contractor will refund the full amount of any payments that have been made. The rights and remedies of the parties under this warranty are in addition to any other rights and remedies of the parties provided by law or equity, including, without limitation, actual damages, and, as applicable and awarded under the law, to a prevailing party, reasonable attorneys’ fees and costs.

30. (RESERVED)

31. Title of Product
Upon Acceptance by the Purchasing Entity, Contractor shall convey to Purchasing Entity title to Product consisting of tangible media free and clear of all liens, encumbrances, or other security interests.

32. Waiver of Breach
Failure of the Lead State, Participating State, or Purchasing Entity to declare a default or enforce any rights and remedies shall not operate as a waiver under this Master Agreement or Participating Addendum. Any waiver by the Lead State, Participating State, or Purchasing Entity must be in writing. Waiver by the Lead State or Participating State of any default, right or remedy under this Master Agreement or Participating Addendum, or by Purchasing Entity with respect to any Purchase Order, or breach of any terms or requirements of this Master Agreement, a Participating Addendum, or Purchase Order shall not be construed or operate as a waiver of any subsequent default or breach of such term or requirement, or of any other term or requirement under this Master Agreement, Participating Addendum, or Purchase Order. 183
CC 02-06-2024
183 of 723

Master Agreement
Section 3: NASPO ValuePoint Master Agreement Terms and
Conditions
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130651
Description: Software Value-Added Reseller (SVAR) Services 35 | Page

33. Assignment of Antitrust Rights
Contractor irrevocably assigns to a Participating State any claim for relief or cause of action which the Contractor now has or which may accrue to the Contractor in the future by reason of any violation of state or federal antitrust laws (15 U.S.C. § 1-15 or a Participating State’s state antitrust provisions), as now in effect and as may be amended from time to time, in connection with any goods or services provided to the Contractor for the purpose of carrying out the Contractor's obligations under this Master Agreement or Participating Addendum, including, at a Participating State's option, the right to control any such litigation on such claim for relief or cause of action.

34. Debarment
The Contractor certifies that neither it nor its principals are presently debarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded from participation in this transaction (contract) by any governmental department or agency. This certification represents a recurring certification made at the time any Order is placed under this Master Agreement. If the Contractor cannot certify this statement, attach a written explanation for review by the Lead State.

35. Governing Law and Venue
a. The procurement, evaluation, and award of the Master Agreement shall be governed by and construed in accordance with the laws of the Lead State sponsoring and administering the procurement. The construction and effect of the Master Agreement after award shall be governed by the law of the state serving as Lead State (in most cases also the Lead State). The construction and effect of any Participating Addendum or Order against the Master Agreement shall be governed by and construed in accordance with the laws of the Participating State’s or Purchasing Entity’s State.
b. Unless otherwise specified in the RFP, the venue for any protest, claim, dispute or action relating to the procurement, evaluation, and award is in the Lead State. Venue for any claim, dispute or action concerning the terms of the Master Agreement shall be in the state serving as Lead State. Venue for any claim, dispute, or action concerning any Order placed against the Master Agreement or the effect of a Participating Addendum shall be in the Purchasing Entity’s State.
c. If a claim is brought in a federal forum, then it must be brought and adjudicated solely and exclusively within the United States District Court for (in decreasing order of priority): the Lead State for claims relating to the procurement, evaluation, award, or contract performance or administration if the Lead State is a party; the Participating State if a named party; the Participating State state if a named party; or the Purchasing Entity state if a named party.

36. NASPO ValuePoint eMarket Center
In July 2011, NASPO ValuePoint entered into a multi-year agreement with SciQuest, Inc. whereby SciQuest will provide certain electronic catalog hosting and management services to enable eligible NASPO ValuePoint’s customers to access a central online website to view and/or shop the goods and services available from existing NASPO ValuePoint Cooperative Contracts. The central online website is referred to as the NASPO ValuePoint eMarket Center.

The Contractor will have visibility in the eMarket Center through Ordering Instructions. These Ordering Instructions are available at no cost to the Contractor and provided customers information regarding the Contractors website and ordering information.
184
CC 02-06-2024
184 of 723

Master Agreement
Section 3: NASPO ValuePoint Master Agreement Terms and
Conditions
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130651
Description: Software Value-Added Reseller (SVAR) Services 36 | Page
At a minimum, the Contractor agrees to the following timeline: NASPO ValuePoint eMarket Center Site Admin shall provide a written request to the Contractor to begin Ordering Instruction process. The Contractor shall have thirty (30) days from receipt of written request to work with NASPO ValuePoint to provide any unique information and ordering instructions that the Contractor would like the customer to have.

37. Contract Provisions for Orders Utilizing Federal Funds.

Pursuant to Appendix II to 2 Code of Federal Regulations (CFR) Part 200, Contract Provisions for Non-Federal Entity Contracts Under Federal Awards, Orders funded with federal funds may have additional contractual requirements or certifications that must be satisfied at the time the Order is placed or upon delivery. These federal requirements may be proposed by Participating Entities in Participating Addenda and Purchasing Entities for incorporation in Orders placed under this master agreement.

38. State Government Support
No support, facility space, materials, special access, personnel or other obligations on behalf of the states or other Participating Entity, other than payment, are required under the Master Agreement.

185
CC 02-06-2024
185 of 723

Master Agreement
Section 4: Lead State (ARIZONA) Terms and Conditions
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130651
Description: Software Value-Added Reseller (SVAR) Services

5.1 State of Arizona Special Terms and Conditions
A. Purpose
Pursuant to provisions of the Arizona Procurement Code, A.R.S. 41-2501 Et Seq., the State of Arizona intends to establish a Contract (Participating Addendum, PA) for the materials or services as listed herein in service to the State.

B. Term of Contract
The term of any resultant Contract shall commence on date of execution and shall be for an initial period of two (2) years, unless terminated, canceled or extended as otherwise provided herein.

C. Contract Extensions
The Contract term is for period stated in Item B. subject to additional successive periods with a maximum aggregate including all extensions not to exceed five (5) years.

D. Contract Type – Fixed Price
E. Eligible Agencies (STATEWIDE)
This Contract shall be for the use of all State of Arizona departments, agencies, commissions and boards. In addition, eligible State Purchasing Cooperative members may participate at their discretion.

In order to participate in this contract, a cooperative member shall have entered into a Cooperative Purchasing Agreement with the Department of Administration, State Procurement Office as required by Arizona Revised Statues § 41-2632.

Membership in the State Purchasing Cooperative is available to all Arizona political subdivisions including cities, counties, school districts, and special districts. Membership is also available to all nonprofit organizations, as well as State governments, the US Federal Government and Tribal Nations.

Non-profit organizations are defined in A.R.S. § 41-2631(4) as any nonprofit corporation as designated by the internal revenue service under section 501(c)(3) through 501(c)(6).

F. Licenses
The Contractor shall maintain in current status, all federal, state and local licenses and permits required for the operation of the business conducted by the Contractor.

G. Volume of Work
The State does not guarantee a specific amount of work either for the life of the Contract or on an annual basis.
186
CC 02-06-2024
186 of 723

Master Agreement
Section 4: Lead State (ARIZONA) Terms and Conditions
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130651
Description: Software Value-Added Reseller (SVAR) Services 38 | Page
H. Key Personnel
It is essential that the Contractor provide adequate experienced personnel, capable of and devoted to the successful accomplishment of work to be performed under this Contract. The Contractor must agree to assign specific individuals to the key positions if required.

1. The Contractor agrees that, once assigned to work under this Contract, key personnel shall not be removed or replaced without written notice to the State.

2. Key personnel who are not available for work under this Contract for a continuous period exceeding thirty (30) calendar days, or are expected to devote substantially less effort to the work than initially anticipated, the Contractor shall immediately notify the State, and shall, subject to the concurrence of the State, replace such personnel with personnel of substantially equal ability and qualifications.

I. Changes
The State may at any time make changes within the general scope of this Contract. The Contractor shall respond to the Change Order with a proposal. If any such change causes an adjustment in the cost of, or the time required for the performance of any part of the work under this Contract, whether changed or not changed by the Change Order, the Procurement Officer shall modify the Contract in writing via a bilateral Contract Amendment.

J. Price Adjustment
Any price adjustment shall be within the confines of the awarded contract, or as negotiated in service to this Contract. Any negotiated price adjustments for this Contract shall be documented via a bilateral Contract Amendment.

K. Payment Procedures
The State will not make payments to any Entity, Group or individual other than the Contractor with the Federal Employer Identification (FEI) Number identified in the Contract. Contractor invoices requesting payment to any Entity, Group or individual other than the contractually specified Contractor shall be returned to the Contractor for correction.

The Contractor shall review and insure that the invoices for services provided show the correct Contractor name prior to sending them for payment.

If the Contractor Name and FEI Number change, the Contractor must complete an “Assignment and Agreement” form transferring contract rights and responsibilities to the new Contractor. The State must indicate consent on the form. A written Contract Amendment must be signed by both parties and a new W-9 form must be submitted by the new Contractor and entered into the system prior to any payments being made to the new Contractor.

L. Information Disclosure
The Contractor shall establish and maintain procedures and controls that are acceptable to the State for the purpose of assuring that no information contained in its records or obtained from the state or from others in carrying out its functions under the contract shall be used or disclosed by it, its agents, officers, or employees, except as required to efficiently perform duties under the Contract. Persons requesting such information should be referred to the State. The Contractor also agrees that any information pertaining to individual persons shall not be divulged other than to employees or officers of 187
CC 02-06-2024
187 of 723

Master Agreement
Section 4: Lead State (ARIZONA) Terms and Conditions
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130651
Description: Software Value-Added Reseller (SVAR) Services 39 | Page
the Contractor as needed for the performance of duties under the Contract, unless otherwise agreed to in writing by the State.

M. Employees of the Contractor
All employees of the Contractor employed in the performance of work under the Contract shall be considered employees of the Contractor at all times, and not employees of the State. The Contractor shall comply with the Social Security Act, Workman’s Compensation laws and Unemployment laws of the State of Arizona and all State, local and Federal legislation relevant to the Contractor’s business.

N. Warranty
All services supplied under this Contract shall be fully guaranteed by the Contractor for a minimum period of ninety (90) days from the date of acceptance by the State. Any defects of design, workmanship, or delivered materials, that would result in non-compliance shall be fully corrected by the Contractor without cost to the State.

O. Compliance with Applicable Laws
The Materials and services supplied under this Contract shall comply with all applicable Federal, state and local laws, and the Contractor shall maintain all applicable licenses and permit requirements.

Contractor represents and warrants to the State that Contractor has the skill and knowledge possessed by members of its trade or profession and Contractor will apply that skill and knowledge with care and diligence so Contactor and Contractor's employees and any authorized subcontractors shall perform the Services described in this Contract in accordance with the Statement of Work.

Contractor represents and warrants that the Materials provided through this Contract and Statement of Work shall be free of viruses, backdoors, worms, spyware, malware and other malicious code that will hamper performance of the Materials, collect unlawful personally identifiable information on Users or prevent the Materials from performing as required under the terms and conditions of this Contract.

P. Non-Exclusive Contract
Any Contract resulting from this solicitation shall be awarded with the understanding and agreement that it is for the sole convenience of the State of Arizona. The State reserves the right to obtain like goods or services from another source when necessary, or when determined to be in the best interest of the State.

Q. Administrative Fee/Usage Reports

1. In accordance with ARS § 41-2633 the Department of Administration, State Procurement Office includes an Administrative Fee, in the majority of its Statewide contracts – multiple agency, multiple government, cooperative contracts. The Administrative Fee is used by the State to defray the additional costs associated with soliciting, awarding and administering statewide contracts.

In addition to the State agencies, boards and commissions, statewide contracts are available to members of the State Purchasing Cooperative including cities, counties, school districts, special districts, other state governments, agencies of the federal government, tribal nations, schools, medical institutions, and nonprofit organizations.

The Administrative Fee is the responsibility of the contractor. The Administrative Fee is a part of the contractor’s unit prices and is not to be charged directly to the customer in the form of a 188
CC 02-06-2024
188 of 723

Master Agreement
Section 4: Lead State (ARIZONA) Terms and Conditions
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130651
Description: Software Value-Added Reseller (SVAR) Services 40 | Page
separate line item. In accordance with Section 26 of the NASPO ValuePoint Master Agreement Terms and Conditions, the 0.25% NASPO ValuePoint Administrative fee shall be incorporated into the Offerors base price. Other states, including the State of Arizona, may negotiate additional Administrative Fees in their Participating Addenda following award of a Master Agreement.

Further, Statewide contracts maintain one set of pricing for all customers and not separate prices for State agency customers and State Purchasing Cooperative customers.

2. State of Arizona Fee Amount:

Unless defined differently within the contract, the Statewide Contracts Administrative Fee shall be one percent (1.0%) of quarterly sales receipts under an active Statewide contract, transacted by only the members of the State Purchasing Cooperative, minus any taxes or regulatory fees, minus any returns or credits, and minus any shipping charges not already included in the unit prices. The Administrative Fee percentage is only applicable to amounts actually received by the contractor during the quarter and is not applicable to amounts ordered by customers but not yet paid for. The administrative fee is not paid on transactions with state agency customers.

3. Method of Assessment
At the completion of each quarter, the contractor reviews all sales under their contract in preparation for submission of their Usage Report. The contractor identifies all sales receipts transacted by members of the State Purchasing Cooperative and assesses one percent (1.0%) of this amount in their Usage Report. An updated list of State Purchasing Cooperative members may be found at: https://spo.az.gov/state-purchasing-cooperative . At its option, the State may expand or narrow the applicability of this fee. The State shall provide thirty (30) written notice prior to exercising or changing this option. The contractor shall summarize all sales, along with all assessed Administrative Fee amounts within their Usage Report, including total amounts for the following:
 Total sales receipts from State agencies, boards and commissions;  Total sales receipts from members of the State Purchasing Cooperative; and  Total Administrative Fee amount based on one percent (1.0%) of the sales receipts from members of the State Purchasing Cooperative.

4. Submission of Reports and Fees. Within thirty (30) days following the end of the quarter, the contractor submits their Usage Report and if applicable, a check in the amount of one percent (1%) of their sales receipts from members of the State Purchasing Cooperative, to the Department of Administration, State Procurement Office. Contractors are required to use the State’s current report templates unless you have authorization from your contract officer to use a different format. You need to complete Form 799, which is a cover letter that gives the totals of your transactions; and Form 801, which is an Excel spreadsheet that details your transactions.

Sales to state agencies and the cooperative members are to be totaled separately. The most current forms can be downloaded at https://spo.az.gov/statewide-contracts-administrative-fee.

4.1 The submission schedule for Administrative Fees and Usage reports shall be as follows:

FY Q1, July through September Due October 31
FY Q2, October through December Due January 31
FY Q3, January through March Due by April 30
FY Q4, April through June Due by July 31
189
CC 02-06-2024
189 of 723

Master Agreement
Section 4: Lead State (ARIZONA) Terms and Conditions
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130651
Description: Software Value-Added Reseller (SVAR) Services 41 | Page

4.2 Usage Reports and any questions are to be submitted by email to the state's designated usage report email address: [email protected]

4.3 Administrative Fees shall be made out to the “State Procurement Office” and mailed to:

Department of Administration
General Services Division
ATTN: “Statewide Contracts Administrative Fee”
100 N. 15th Avenue, Suite 202
Phoenix, AZ 85007

5. The Administrative Fee shall be a part of the Contractor’s unit prices and is not to be charged directly to the customer in the form of a separate line item. Statewide contracts shall not have separate prices for State Agency customers and State Purchasing Cooperative customers.

6. Contractor's failure to remit administrative fees in a timely manner consistent with the contract’s requirements may result in the State exercising any recourse available under the contract or as provided for by law.

R. Acceptance
Determination of the acceptability of services shall be made by the sole judgment of the State.

Acceptance shall be in writing, verbal acceptance will not be allowed. Services shall be completed in accordance with the Scope of Work, agreed to and accepted schedules, plans, and agreed to performance standards. Acceptance shall be one hundred percent (100%) functionality, which will be determined by the State. Acceptance criteria shall include, but not be limited to conformity to the scope of work, quality of workmanship and successfully performing all required Tasks. Nonconformance to any of the stated acceptance and performance criteria of both services and or products as required shall result in a delay for payment. Payment shall not be made until nonconformance to the criteria is corrected as determined by the State.

T. Performance
Contractor agrees that, from and after the date that the applicable services commence, its performance of the Scope of Services will meet or exceed industry best practices subject to the limitations and in accordance with the provisions set forth in this Contract. If the Services provided pursuant to this Contract are changed, modified or enhanced (whether by Change Order or through the provision of new Services), The State and the Contractor will review the current performance experience and will in good faith determine whether such experience should be adjusted and whether additional services should be implemented or whether services be removed. The following requirements shall also apply:

1. Failure to Perform
If Contractor fails to complete any deliverable, then Contractor shall:

1.1 Promptly perform a root-cause analysis to identify the cause of such failure;

1.2 Use commercially reasonable efforts to correct such failure and to begin meeting the requirements as promptly as practicable;

1.3 Provide the State with a report detailing the cause of, and procedure for correcting, such 190
CC 02-06-2024
190 of 723

Master Agreement
Section 4: Lead State (ARIZONA) Terms and Conditions
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130651
Description: Software Value-Added Reseller (SVAR) Services 42 | Page
failure; and

1.4 If appropriate under the circumstances, take action to avoid such failure in the future.

2. Root-Cause Analysis
In the event of the Contractor's failure to perform required services or meet agreed upon service levels or other Contractor service standards as required by the State under this Contract, the Contractor shall perform an analysis of the cause of the service level problem and implement remediation steps as appropriate. The State shall have the right to review the analysis and approve the remediation steps prior to or subsequent to their implementation, as deemed appropriate by the State, if the remediation steps impact State assets or operational processes.

U. Compensation
Should the Contractor fail to provide all required services or deliver work products, as agreed upon by State and the Contractor, the State shall be entitled to invoke applicable remedies, including but not limited to, withholding payment to the Contractor and declaring the Contractor in material breach of the Contract. If the Contractor is in any manner in default of any obligation or the Contractor’s work or performance is determined by the State to be defective, sub-standard, or if audit exceptions are identified, the State may, in addition to other available remedies, either adjust the amount of payment or withhold payment until satisfactory resolution of the default, defect, exception or sub-standard performance. The Contractor shall reimburse the State on demand, or the State may deduct from future payments, any amounts paid for work products or performance which are determined to be an audit exception, defective or sub-standard performance. The Contractor shall correct its mistakes or errors without additional cost to the State. The State shall be the sole determiner as to defective or sub-standard performance.

The Contractor shall fulfill their contractual requirements including the Deliverables identified in the Statement of Work and fulfill the roles and responsibilities described in the Statement of Work for a firm fixed price, inclusive of travel and travel-related expenses. The fixed amount shall be inclusive of any fees for the use of any third party products or services required for use in the performance of this Contract
V. Contractor Performance Reports
Program management shall document Contractor performance, both exemplary and needing improvements where corrective action is needed or desired. Copies of corrective action reports will be forwarded to the Procurement Office for review and any necessary follow-up. The Procurement Office may contact the Contractor upon receipt of the report and may request corrective action. The Procurement Office shall discuss the Contractor’s suggested corrective action plan with the Procurement Specialist for approval of the plan.

W. Offshore Performance of Work Prohibited
Due to security and identity protection concerns, direct services under this contract shall be performed within the borders of the United States. Any services that are described in the specifications or scope of work that directly serve the State of Arizona or its clients and may involve access to secure or sensitive data or personal client data or development or modification of software for the State shall be performed within the borders of the United States. Unless specifically stated otherwise in the specifications, this definition does not apply to indirect or “overhead” services, redundant back-up 191
CC 02-06-2024
191 of 723

Master Agreement
Section 4: Lead State (ARIZONA) Terms and Conditions
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130651
Description: Software Value-Added Reseller (SVAR) Services 43 | Page
services or services that are incidental to the performance of the contract. This provision applies to work performed by subcontractors at all tiers.

X. Indemnification and Insurance

1.1 Indemnification Clause
To the fullest extent permitted by law, Contractor shall defend, indemnify, and hold harmless the State of Arizona, and its departments, agencies, boards, commissions, universities, and any jurisdiction or agency issuing permits for any work included in the project, and their respective directors, officers, officials, agents and employees (hereinafter referred to as "Indemnitee") from and against any and all claims, actions, liabilities, costs, losses, or expenses, (including reasonable attorney's fees), (hereinafter collectively referred to as "Claims") arising out of actual or alleged bodily injury or personal injury of any person (including death) or loss or damage to tangible or intangible property caused, or alleged to be caused, in whole or in part, by the negligent or willful acts or omissions of Contractor or any of Contractor's directors, officers, agents, employees, volunteers or subcontractors. This indemnity includes any claim or amount arising or recovered under the Workers' Compensation Law or arising out of the failure of Contractor to conform to any federal, state or local law, statute, ordinance, rule, regulation or court decree. It is the specific intention of the parties that the Indemnitee shall, in all instances, except for Claims arising solely from the negligent or willful acts or omissions of the Indemnitee, be indemnified by Contractor from and against any and all Claims. It is agreed that Contractor will be responsible for primary loss investigation, defense and judgment costs where this indemnification is applicable. This indemnification will survive the termination of the above listed contract with the Contractor.

This indemnity shall not apply if the contractor or sub-contractor(s) is/are an agency, board, commission or university of the State of Arizona.

1.2 Insurance Requirements

1.2.1 Contractor and subcontractors shall procure and maintain, until all of their obligations have been discharged, including any warranty periods under this Contract, insurance against claims for injury to persons or damage to property arising from, or in connection with, the performance of the work hereunder by the Contractor, its agents, representatives, employees or subcontractors.

1.2.2 The Insurance Requirements herein are minimum requirements for this Contract and in no way limit the indemnity covenants contained in this Contract. The State of Arizona in no way warrants that the minimum limits contained herein are sufficient to protect the Contractor from liabilities that arise out of the performance of the work under this Contract by the Contractor, its agents, representatives, employees or subcontractors, and the Contractor is free to purchase additional insurance.

1.3 Minimum Scope and Limits of Insurance
Contractor shall provide coverage with limits of liability not less than those stated below. 192
CC 02-06-2024
192 of 723

Master Agreement
Section 4: Lead State (ARIZONA) Terms and Conditions
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130651
Description: Software Value-Added Reseller (SVAR) Services 44 | Page

1.3.1 Commercial General Liability (CGL) – Occurrence Form Policy shall include bodily injury, property damage, and broad form contractual liability coverage.

General Aggregate $2,000,000
Products – Completed Operations Aggregate $1,000,000
Personal and Advertising Injury $1,000,000
Damage to Rented Premises $50,000
Each Occurrence $1,000,000
a. The policy shall be endorsed, as required by this written agreement, to include the State of Arizona, and its departments, agencies, boards, commissions, universities, officers, officials, agents, and employees as additional insureds with respect to liability arising out of the activities performed by or on behalf of the Contractor. b. Policy shall contain a waiver of subrogation endorsement, as required by this written agreement, in favor of the State of Arizona, and its departments, agencies, boards, commissions, universities, officers, officials, agents, and employees for losses arising from work performed by or on behalf of the Contractor.

1.3.2 Business Automobile Liability
Bodily Injury and Property Damage for any owned, hired, and/or non-owned automobiles used in the performance of this Contract.
 Combined Single Limit (CSL) $1,000,000
Policy shall be endorsed, as required by this written agreement, to include the State of Arizona, and its departments, agencies, boards, commissions, universities, officers, officials, agents, and employees as additional insureds with respect to liability arising out of the activities performed by, or on behalf of, the Contractor involving automobiles owned, hired and/or non-owned by the Contractor.
c. Policy shall contain a waiver of subrogation endorsement as required by this written agreement in favor of the State of Arizona, and its departments, agencies, boards, commissions, universities, officers, officials, agents, and employees for losses arising from work performed by or on behalf of the Contractor.

1.3.3 Workers’ Compensation and Employers' Liability
 Workers' Compensation Statutory
 Employers' Liability
 Each Accident $1,000,000
 Disease – Each Employee $1,000,000
 Disease – Policy Limit $1,000,000
d. Policy shall contain a waiver of subrogation endorsement, as required by this written agreement, in favor of the State of Arizona, and its departments, agencies, boards, 193
CC 02-06-2024
193 of 723

Master Agreement
Section 4: Lead State (ARIZONA) Terms and Conditions
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130651
Description: Software Value-Added Reseller (SVAR) Services 45 | Page
commissions, universities, officers, officials, agents, and employees for losses arising from work performed by or on behalf of the Contractor.
e. This requirement shall not apply to each Contractor or subcontractor that is exempt under A.R.S. § 23-901, and when such Contractor or subcontractor executes the appropriate waiver form (Sole Proprietor or Independent Contractor).

1.3.4 Technology Errors & Omissions Insurance
 Each Claim $2,000,000
 Annual Aggregate $2,000,000
f. Such insurance shall cover any, and all errors, omissions, or negligent acts in the delivery of products, services, and/or licensed programs under this contract. g. Coverage shall include or shall not exclude settlement and/or defense of claims involving intellectual property, including but not limited to patent or copyright infringement.
h. In the event that the Tech E&O insurance required by this Contract is written on a claims-made basis, Contractor warrants that any retroactive date under the policy shall precede the effective date of this Contract and, either continuous coverage will be maintained or an extended discovery period will be exercised for a period of two (2) years, beginning at the time work under this Contract is completed.

1.3.5 Media Liability Coverage
 Each Claim $2,000,000
 Annual Aggregate $2,000,000
i. Such insurance shall cover any and all errors and omissions or negligent acts in the production of content, including but not limited to plagiarism, defamation, libel, slander, false advertising, invasion of privacy, and infringement of copyright, title, slogan, trademark, service mark and trade dress.
j. In the event that the Media Liability insurance required by this Contract is written on a claims-made basis, Contractor warrants that any retroactive date under the policy shall precede the effective date of this Contract and, either continuous coverage will be maintained, or an extended discovery period will be exercised for a period of two (2) years beginning at the time work under this Contract is completed.

1.4 Additional Insurance Requirements
The policies shall include, or be endorsed to include, as required by this written agreement, the following provisions:

1.4.1 The Contractor's policies, as applicable, shall stipulate that the insurance afforded the Contractor shall be primary and that any insurance carried by the Department, its agents, 194
CC 02-06-2024
194 of 723

Master Agreement
Section 4: Lead State (ARIZONA) Terms and Conditions
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130651
Description: Software Value-Added Reseller (SVAR) Services 46 | Page
officials, employees or the State of Arizona shall be excess and not contributory insurance, as provided by A.R.S. § 41-621 (E).

1.4.2 Insurance provided by the Contractor shall not limit the Contractor’s liability assumed under the indemnification provisions of this Contract.

1.5 Notice of Cancellation
Applicable to all insurance policies required within the Insurance Requirements of this Contract, Contractor’s insurance shall not be permitted to expire, be suspended, be canceled, or be materially changed for any reason without thirty (30) days prior written notice to the State of Arizona. Within two (2) business days of receipt, Contractor must provide notice to the State of Arizona if they receive notice of a policy that has been or will be suspended, canceled, materially changed for any reason, has expired, or will be expiring. Such notice shall be sent directly to the Department and shall be mailed, emailed, hand delivered or sent by facsimile transmission to (State Representative’s Name, Address & Fax Number).

1.6 Acceptability of Insurers
Contractor’s insurance shall be placed with companies licensed in the State of Arizona or hold approved non-admitted status on the Arizona Department of Insurance List of Qualified Unauthorized Insurers. Insurers shall have an “A.M. Best” rating of not less than A- VII. The State of Arizona in no way warrants that the above-required minimum insurer rating is sufficient to protect the Contractor from potential insurer insolvency.

1.7 Verification of Coverage
Contractor shall furnish the State of Arizona with certificates of insurance (valid ACORD form or equivalent approved by the State of Arizona) as required by this Contract. An authorized representative of the insurer shall sign the certificates.

1.7.1 All certificates and endorsements, as required by this written agreement, are to be received and approved by the State of Arizona before work commences. Each insurance policy required by this Contract must be in effect at, or prior to, commencement of work under this Contract. Failure to maintain the insurance policies as required by this Contract, or to provide evidence of renewal, is a material breach of contract.

1.7.2 All certificates required by this Contract shall be sent directly to the Department. The State of Arizona project/contract number and project description shall be noted on the certificate of insurance. The State of Arizona reserves the right to require complete copies of all insurance policies required by this Contract at any time.

1.8 Subcontractors
Contractor’s certificate(s) shall include all subcontractors as insureds under its policies or Contractor shall be responsible for ensuring and/or verifying that all subcontractors have valid and collectable insurance as evidenced by the certificates of insurance and endorsements for each subcontractor. All coverages for subcontractors shall be subject to the minimum Insurance 195
CC 02-06-2024
195 of 723

Master Agreement
Section 4: Lead State (ARIZONA) Terms and Conditions
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130651
Description: Software Value-Added Reseller (SVAR) Services 47 | Page
Requirements identified above. The Department reserves the right to require, at any time throughout the life of this contract, proof from the Contractor that its subcontractors have the required coverage.

1.9 Approval and Modifications
The Contracting Agency, in consultation with State Risk, reserves the right to review or make modifications to the insurance limits, required coverages, or endorsements throughout the life of this contract, as deemed necessary. Such action will not require a formal Contract amendment but may be made by administrative action.

1.10 Exceptions
In the event the Contractor or subcontractor(s) is/are a public entity, then the Insurance Requirements shall not apply. Such public entity shall provide a certificate of self-insurance. If the Contractor or subcontractor(s) is/are a State of Arizona agency, board, commission, or university, none of the above shall apply.

Y. Data Privacy and Security
Contractor shall treat all information obtained through performance of the contract, as confidential or sensitive information consistent with State and federal law and State Policy. Contractor or its agents shall not use any data obtained in the performance of the contract in any manner except as necessary for the proper discharge of its obligations and protection of its rights related to this agreement.

Contractor shall establish and maintain procedures and controls acceptable to the State for the purpose of assuring that data in its or its agents’ possession is not mishandled, misused, released, disclosed, or used in an inappropriate manner in performance of the contract. This includes data contained in Contractor’s records obtained from the State or others, necessary for contract performance. Contractor and its agents shall take all reasonable steps and precautions to safeguard this information and data and shall not divulge the information or data to parties other than those needed for the performance of duties under the contract.

Z. Data Privacy/Security Incident Management
Contractor and its agents shall cooperate and collaborate with appropriate State personnel to identify and respond to an information security or data privacy incident, including a security breach.

1. Threat of Security Breach
Contractor(s) agrees to notify the State Chief Information Officer (CIO), the State Chief Information Security Officer (CISO) and other key personnel as identified by the State of any perceived threats placing the supported infrastructure and/or applications in danger of breach of security. The speed of notice shall be at least commensurate with the level of threat, as perceived by the Contractor(s). The State agrees to provide contact information for the State CIO, CISO and key personnel to the Contractor(s).

2. Discovery of Security Breach
Contractor agrees to immediately notify the State CIO, the CISO and key personnel as identified by the State of a discovered breach of security. The State agrees to provide contact information 196
CC 02-06-2024
196 of 723

Master Agreement
Section 4: Lead State (ARIZONA) Terms and Conditions
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130651
Description: Software Value-Added Reseller (SVAR) Services 48 | Page
for the State CIO, the CISO and key personnel.

AA. Security Requirements for Contractor Personnel
Each individual proposed to provide services through this contract agrees to security clearance and background check procedures, including fingerprinting, as defined by the Arizona Department of Administration in accordance with Arizona Revised Statutes §41-710. The results of the individual’s background check procedures must meet all HIPAA and law enforcement requirements. Contractor is responsible for all costs to obtain security clearance for their consultants providing services through this contract. Contractor personnel, agents or sub-contractors that have administrative access to the State’s networks may be subject to any additional security requirements of the State as may be required for the performance of the contract. The Contractor, its agents and sub-contractors shall provide documentation to the State confirming compliance with all such additional security requirements for performance of the contract. Additional security requirements include but are not limited to the following:

1. Identity and Address Verification – that verifies the individual is who he or she claims to be including verification of the candidate’s present and previous addresses;

2. UNAX/confidentiality Training;

3. HIPAA Privacy and Security Training; and

4. Information Security Training.

BB. Access Constraints and Requirements
Contractor access to State facilities and resources shall be properly authorized by State personnel, based on business need and will be restricted to least possible privilege. Upon approval of access privileges, the Contractor shall maintain strict adherence to all policies, standards, and procedures.

Policies / Standards, ADOA/ASET Policies / Procedures, and Arizona Revised Statues (A.R.S.) §28- 447, §28-449, §38-421, §13-2408, §13-2316, §41-770.

Failure of the Contractor, its agents or subcontractors to comply with policies, standards, and procedures including any person who commits an unlawful breach or harmful access (physical or virtual) will be subject to prosecution under all applicable state and / or federal laws.

Any and all recovery or reconstruction costs or other liabilities associated with an unlawful breach or harmful access shall be paid by the Contractor.

CC. Health Insurance Portability and Accountability Act of 1996 The Contractor warrants that it is familiar with the requirements of HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act (HITECH Act) of 2009, and accompanying regulations and will comply with all applicable HIPAA requirements in the course of this Contract. Contractor warrants that it will cooperate with the State in the course of performance of the Contract so that both the State and the Contractor will be in compliance with HIPAA, including cooperation and coordination with the Arizona Strategic Enterprise Technology (ASET) Group, Statewide Information Security and Privacy Office (SISPO), Chief Privacy Officer and HIPAA Coordinator and other compliance officials required by HIPAA and its regulations. Contractor will sign any documents that are reasonably necessary to keep the State and Contractor in compliance with 197
CC 02-06-2024
197 of 723

Master Agreement
Section 4: Lead State (ARIZONA) Terms and Conditions
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130651
Description: Software Value-Added Reseller (SVAR) Services 49 | Page
HIPAA, including but not limited to, business associate agreements.

If requested, the Contractor agrees to sign a “Pledge to Protect Confidential Information” and to abide by the statements addressing the creation, use and disclosure of confidential information, including information designated as protected health information and all other confidential or sensitive information as defined in policy. In addition, if requested, Contractor agrees to attend or participate in job related HIPAA training that is: (1) intended to make the Contractor proficient in HIPAA for purposes of performing the services required and (2) presented by a HIPAA Privacy Officer or other person or program knowledgeable and experienced in HIPAA and who has been approved by the ASET/SISPO Chief Privacy Officer and HIPAA Coordinator.

Suggested References:
https://www.cms.gov/Regulations-and-Guidance/HIPAA-AdministrativeSimplification/HIPAAGenInfo/downloads/hipaalaw.pdf http://www.hhs.gov/ocr/privacy/hipaa/understanding/
DD. Compliance Requirements for A.R.S. § 41-4401, Government Procurement: E-Verify Requirement

1. The Contractor warrants compliance with all Federal immigration laws and regulations relating to employees and warrants its compliance with Section A.R.S. § 23-214, Subsection A. (That subsection reads: “After December 31, 2007, every employer, after hiring an employee, shall verify the employment eligibility of the employee through the E-Verify program.)

2. A breach of a warranty regarding compliance with immigration laws and regulations shall be deemed a material breach of the Contract and the Contractor may be subject to penalties up to and including termination of the Contract.

3. Failure to comply with a State audit process to randomly verify the employment records of Contractors and subcontractors shall be deemed a material breach of the Contract and the Contractor may be subject to penalties up to and including termination of the Contract.

4. The State Agency retains the legal right to inspect the papers of any employee who works on the Contract to ensure that the Contractor or subcontractor is complying with the warranty under paragraph One (1).

5.2 State of Arizona Uniform Terms and Conditions

1. Definition of Terms
As used in this Solicitation and any resulting Contract, the terms listed below are defined as follows:

1.1. “Attachment” means any item the Solicitation requires the Offeror to submit as part of the Offer.

1.2. “Contract” means the combination of the Solicitation, including the Uniform and Special Instructions to Offerors, the Uniform and Special Terms and Conditions, and the Specifications and Statement or Scope of Work; the Offer and any Best and Final Offers; and any Solicitation Amendments or Contract Amendments.
198
CC 02-06-2024
198 of 723

Master Agreement
Section 4: Lead State (ARIZONA) Terms and Conditions
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130651
Description: Software Value-Added Reseller (SVAR) Services 50 | Page

1.3. "Contract Amendment" means a written document signed by the Procurement Officer that is issued for the purpose of making changes in the Contract.

1.4. “Contractor” means any person who has a Contract with the State.

1.5. “Days” means calendar days unless otherwise specified.

1.6. “Exhibit” means any item labeled as an Exhibit in the Solicitation or placed in the Exhibits section of the Solicitation.

1.7. “Gratuity” means a payment, loan, subscription, advance, deposit of money, services, or anything of more than nominal value, present or promised, unless consideration of substantially equal or greater value is received.

1.8. “Materials” means all property, including equipment, supplies, printing, insurance and leases of property but does not include land, a permanent interest in land or real property or leasing space.

1.9. “Procurement Officer” means the person, or his or her designee, duly authorized by the State to enter into and administer Contracts and make written determinations with respect to the Contract.

1.10. “Services” means the furnishing of labor, time or effort by a contractor or subcontractor which does not involve the delivery of a specific end product other than required reports and performance, but does not include employment agreements or collective bargaining agreements.

1.11. “Subcontract” means any Contract, express or implied, between the Contractor and another party or between a subcontractor and another party delegating or assigning, in whole or in part, the making or furnishing of any material or any service required for the performance of the Contract.

1.12. “State” means the State of Arizona and Department or Agency of the State that executes the Contract.

1.13. “State Fiscal Year” means the period beginning with July 1 and ending June 30.

2. Contract Interpretation

2.1. Arizona Law. The Arizona law applies to this Contract including, where applicable, the Uniform Commercial Code as adopted by the State of Arizona and the Arizona Procurement Code, Arizona Revised Statutes (A.R.S.) Title 41, Chapter 23, and its implementing rules, Arizona Administrative Code (A.A.C.) Title 2, Chapter 7.

2.2. Implied Contract Terms. Each provision of law and any terms required by law to be in this Contract are a part of this Contract as if fully stated in it.

2.3. Contract Order of Precedence. In the event of a conflict in the provisions of the Contract, as accepted by the State and as they may be amended, the following shall prevail in the order set forth below:

2.3.1. Special Terms and Conditions;

2.3.2. Uniform Terms and Conditions;

2.3.3. Statement or Scope of Work;
199
CC 02-06-2024
199 of 723

Master Agreement
Section 4: Lead State (ARIZONA) Terms and Conditions
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130651
Description: Software Value-Added Reseller (SVAR) Services 51 | Page

2.3.4. Specifications;

2.3.5. Attachments;

2.3.6. Exhibits;

2.3.7. Documents referenced or included in the Solicitation.

2.4. Relationship of Parties. The Contractor under this Contract is an independent Contractor.

Neither party to this Contract shall be deemed to be the employee or agent of the other party to the Contract.

2.5. Severability. The provisions of this Contract are severable. Any term or condition deemed illegal or invalid shall not affect any other term or condition of the Contract.

2.6. No Parole Evidence. This Contract is intended by the parties as a final and complete expression of their agreement. No course of prior dealings between the parties and no usage of the trade shall supplement or explain any terms used in this document and no other understanding either oral or in writing shall be binding.

2.7. No Waiver. Either party’s failure to insist on strict performance of any term or condition of the Contract shall not be deemed a waiver of that term or condition even if the party accepting or acquiescing in the nonconforming performance knows of the nature of the performance and fails to object to it.

3. Contract Administration and Operation

3.1. Records. Under A.R.S. § 35-214 and § 35-215, the Contractor shall retain and shall contractually require each subcontractor to retain all data and other “records” relating to the acquisition and performance of the Contract for a period of five years after the completion of the Contract. All records shall be subject to inspection and audit by the State at reasonable times.

Upon request, the Contractor shall produce a legible copy of any or all such records.

3.2. Non-Discrimination. The Contractor shall comply with State Executive Order No. 2009-09 and all other applicable Federal and State laws, rules and regulations, including the Americans with Disabilities Act.

3.3. Audit. Pursuant to ARS § 35-214, at any time during the term of this Contract and five (5) years thereafter, the Contractor’s or any subcontractor’s books and records shall be subject to audit by the State and, where applicable, the Federal Government, to the extent that the books and records relate to the performance of the Contract or Subcontract.

3.4. Facilities Inspection and Materials Testing. The Contractor agrees to permit access to its facilities, subcontractor facilities and the Contractor’s processes or services, at reasonable times for inspection of the facilities or materials covered under this Contract. The State shall also have the right to test, at its own cost, the materials to be supplied under this Contract. Neither inspection of the Contractor’s facilities nor materials testing shall constitute final acceptance of the materials or services. If the State determines non-compliance of the materials, the Contractor shall be responsible for the payment of all costs incurred by the State for testing and inspection.

3.5. Notices. Notices to the Contractor required by this Contract shall be made by the State to the person indicated on the Offer and Acceptance form submitted by the Contractor unless 200
CC 02-06-2024
200 of 723

Master Agreement
Section 4: Lead State (ARIZONA) Terms and Conditions
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130651
Description: Software Value-Added Reseller (SVAR) Services 52 | Page
otherwise stated in the Contract. Notices to the State required by the Contract shall be made by the Contractor to the Solicitation Contact Person indicated on the Solicitation cover sheet, unless otherwise stated in the Contract. An authorized Procurement Officer and an authorized Contractor representative may change their respective person to whom notice shall be given by written notice to the other and an amendment to the Contract shall not be necessary.

3.6. Advertising, Publishing and Promotion of Contract. The Contractor shall not use, advertise or promote information for commercial benefit concerning this Contract without the prior written approval of the Procurement Officer.

3.7. Property of the State. Any materials, including reports, computer programs and other deliverables, created under this Contract are the sole property of the State. The Contractor is not entitled to a patent or copyright on those materials and may not transfer the patent or copyright to anyone else. The Contractor shall not use or release these materials without the prior written consent of the State.

3.8. Ownership of Intellectual Property. Any and all intellectual property, including but not limited to copyright, invention, trademark, trade name, service mark, and/or trade secrets created or conceived pursuant to or as a result of this contract and any related subcontract (“Intellectual Property”), shall be work made for hire and the State shall be considered the creator of such Intellectual Property. The agency, department, division, board or commission of the State of Arizona requesting the issuance of this contract shall own (for and on behalf of the State) the entire right, title and interest to the Intellectual Property throughout the world. Contractor shall notify the State, within thirty (30) days, of the creation of any Intellectual Property by it or its subcontractor(s). Contractor, on behalf of itself and any subcontractor(s), agrees to execute any and all document(s) necessary to assure ownership of the Intellectual Property vests in the State and shall take no affirmative actions that might have the effect of vesting all or part of the Intellectual Property in any entity other than the State. The Intellectual Property shall not be disclosed by contractor or its subcontractor(s) to any entity not the State without the express written authorization of the agency, department, division, board or commission of the State of Arizona requesting the issuance of this contract.

3.9. Federal Immigration and Nationality Act. The contractor shall comply with all federal, state and local immigration laws and regulations relating to the immigration status of their employees during the term of the contract. Further, the contractor shall flow down this requirement to all subcontractors utilized during the term of the contract. The State shall retain the right to perform random audits of contractor and subcontractor records or to inspect papers of any employee thereof to ensure compliance. Should the State determine that the contractor and/or any subcontractors be found noncompliant, the State may pursue all remedies allowed by law, including, but not limited to; suspension of work, termination of the contract for default and suspension and/or debarment of the contractor.

3.10 E-Verify Requirements. In accordance with A.R.S. § 41-4401, Contractor warrants compliance with all Federal immigration laws and regulations relating to employees and warrants its compliance with Section A.R.S. § 23-214, Subsection A.

3.11 Offshore Performance of Work Prohibited.

Any services that are described in the specifications or scope of work that directly serve the State of Arizona or its clients and involve access to secure or sensitive data or personal client data shall be performed within the defined territories of the United States. Unless specifically 201
CC 02-06-2024
201 of 723

Master Agreement
Section 4: Lead State (ARIZONA) Terms and Conditions
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130651
Description: Software Value-Added Reseller (SVAR) Services 53 | Page
stated otherwise in the specifications, this paragraph does not apply to indirect or 'overhead' services, redundant back-up services or services that are incidental to the performance of the contract. This provision applies to work performed by subcontractors at all tiers.

4. Costs and Payments

4.1. Payments. Payments shall comply with the requirements of A.R.S. Titles 35 and 41, Net 30 days. Upon receipt and acceptance of goods or services, the Contractor shall submit a complete and accurate invoice for payment from the State within thirty (30) days.

4.2. Delivery. Unless stated otherwise in the Contract, all prices shall be F.O.B. Destination and shall include all freight delivery and unloading at the destination.

4.3. Applicable Taxes.

4.3.1. Payment of Taxes. The Contractor shall be responsible for paying all applicable taxes.

4.3.2. State and Local Transaction Privilege Taxes. The State of Arizona is subject to all applicable state and local transaction privilege taxes. Transaction privilege taxes apply to the sale and are the responsibility of the seller to remit. Failure to collect such taxes from the buyer does not relieve the seller from its obligation to remit taxes.

4.3.3. Tax Indemnification. Contractor and all subcontractors shall pay all Federal, state and local taxes applicable to its operation and any persons employed by the Contractor.

Contractor shall, and require all subcontractors to hold the State harmless from any responsibility for taxes, damages and interest, if applicable, contributions required under Federal, and/or state and local laws and regulations and any other costs including transaction privilege taxes, unemployment compensation insurance, Social Security and Worker’s Compensation.

4.3.4. IRS W9 Form. In order to receive payment the Contractor shall have a current I.R.S. W9 Form on file with the State of Arizona, unless not required by law.

4.4. Availability of Funds for the Next State fiscal year. Funds may not presently be available for performance under this Contract beyond the current state fiscal year. No legal liability on the part of the State for any payment may arise under this Contract beyond the current state fiscal year until funds are made available for performance of this Contract.

4.5. Availability of Funds for the current State fiscal year. Should the State Legislature enter back into session and reduce the appropriations or for any reason and these goods or services are not funded, the State may take any of the following actions:

4.5.1. Accept a decrease in price offered by the contractor;

4.5.2. Cancel the Contract; or

4.5.3. Cancel the contract and re-solicit the requirements.

5. Contract Changes

5.1. Amendments. This Contract is issued under the authority of the Procurement Officer who signed this Contract. The Contract may be modified only through a Contract Amendment within the scope of the Contract. Changes to the Contract, including the addition of work or materials, the revision of payment terms, or the substitution of work or materials, directed by a person who is 202
CC 02-06-2024
202 of 723

Master Agreement
Section 4: Lead State (ARIZONA) Terms and Conditions
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130651
Description: Software Value-Added Reseller (SVAR) Services 54 | Page
not specifically authorized by the procurement officer in writing or made unilaterally by the Contractor are violations of the Contract and of applicable law. Such changes, including unauthorized written Contract Amendments shall be void and without effect, and the Contractor shall not be entitled to any claim under this Contract based on those changes.

5.2. Subcontracts. The Contractor shall not enter into any Subcontract under this Contract for the performance of this contract without the advance written approval of the Procurement Officer.

The Contractor shall clearly list any proposed subcontractors and the subcontractor’s proposed responsibilities. The Subcontract shall incorporate by reference the terms and conditions of this Contract.

5.3. Assignment and Delegation. The Contractor shall not assign any right nor delegate any duty under this Contract without the prior written approval of the Procurement Officer. The State shall not unreasonably withhold approval.

6. Risk and Liability

6.1. Risk of Loss: The Contractor shall bear all loss of conforming material covered under this Contract until received by authorized personnel at the location designated in the purchase order or Contract. Mere receipt does not constitute final acceptance. The risk of loss for nonconforming materials shall remain with the Contractor regardless of receipt.

6.2. Indemnification

6.2.1. Contractor/Vendor Indemnification (Not Public Agency) The parties to this contract agree that the State of Arizona, its departments, agencies, boards and commissions shall be indemnified and held harmless by the contractor for the vicarious liability of the State as a result of entering into this contract. However, the parties further agree that the State of Arizona, its departments, agencies, boards and commissions shall be responsible for its own negligence. Each party to this contract is responsible for its own negligence.

6.2.2. Public Agency Language Only Each party (as 'indemnitor') agrees to indemnify, defend, and hold harmless the other party (as 'indemnitee') from and against any and all claims, losses, liability, costs, or expenses (including reasonable attorney's fees) (hereinafter collectively referred to as 'claims') arising out of bodily injury of any person (including death) or property damage but only to the extent that such claims which result in vicarious/derivative liability to the indemnitee, are caused by the act, omission, negligence, misconduct, or other fault of the indemnitor, its officers, officials, agents, employees, or volunteers."

6.3. Indemnification - Patent and Copyright. The Contractor shall indemnify and hold harmless the State against any liability, including costs and expenses, for infringement of any patent, trademark or copyright arising out of Contract performance or use by the State of materials furnished or work performed under this Contract. The State shall reasonably notify the Contractor of any claim for which it may be liable under this paragraph. If the contractor is insured pursuant to A.R.S. § 41-621 and § 35-154, this section shall not apply.

6.4. Force Majeure.

6.4.1 Except for payment of sums due, neither party shall be liable to the other nor deemed in 203
CC 02-06-2024
203 of 723

Master Agreement
Section 4: Lead State (ARIZONA) Terms and Conditions
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130651
Description: Software Value-Added Reseller (SVAR) Services 55 | Page
default under this Contract if and to the extent that such party’s performance of this Contract is prevented by reason of force majeure. The term “force majeure” means an occurrence that is beyond the control of the party affected and occurs without its fault or negligence. Without limiting the foregoing, force majeure includes acts of God; acts of the public enemy; war; riots; strikes; mobilization; labor disputes; civil disorders; fire; flood; lockouts; injunctions-intervention-acts; or failures or refusals to act by government authority; and other similar occurrences beyond the control of the party declaring force majeure which such party is unable to prevent by exercising reasonable diligence.

6.4.2. Force Majeure shall not include the following occurrences:

6.4.2.1. Late delivery of equipment or materials caused by congestion at a manufacturer’s plant or elsewhere, or an oversold condition of the market;

6.4.2.2. Late performance by a subcontractor unless the delay arises out of a force majeure occurrence in accordance with this force majeure term and condition; or

6.4.2.3. Inability of either the Contractor or any subcontractor to acquire or maintain any required insurance, bonds, licenses or permits.

6.4.3. If either party is delayed at any time in the progress of the work by force majeure, the delayed party shall notify the other party in writing of such delay, as soon as is practicable and no later than the following working day, of the commencement thereof and shall specify the causes of such delay in such notice. Such notice shall be delivered or mailed certified-return receipt and shall make a specific reference to this article, thereby invoking its provisions. The delayed party shall cause such delay to cease as soon as practicable and shall notify the other party in writing when it has done so. The time of completion shall be extended by Contract Amendment for a period of time equal to the time that results or effects of such delay prevent the delayed party from performing in accordance with this Contract.

6.4.4. Any delay or failure in performance by either party hereto shall not constitute default hereunder or give rise to any claim for damages or loss of anticipated profits if, and to the extent that such delay or failure is caused by force majeure.

6.5. Third Party Antitrust Violations. The Contractor assigns to the State any claim for overcharges resulting from antitrust violations to the extent that those violations concern materials or services supplied by third parties to the Contractor, toward fulfillment of this Contract.

7. Warranties

7.1. Liens. The Contractor warrants that the materials supplied under this Contract are free of liens and shall remain free of liens.

7.2. Quality. Unless otherwise modified elsewhere in these terms and conditions, the Contractor warrants that, for one year after acceptance by the State of the materials, they shall be:

7.2.1. Of a quality to pass without objection in the trade under the Contract description;

7.2.2. Fit for the intended purposes for which the materials are used;

7.2.3. Within the variations permitted by the Contract and are of even kind, quantity, and quality within each unit and among all units;
204
CC 02-06-2024
204 of 723

Master Agreement
Section 4: Lead State (ARIZONA) Terms and Conditions
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130651
Description: Software Value-Added Reseller (SVAR) Services 56 | Page

7.2.4. Adequately contained, packaged and marked as the Contract may require; and

7.2.5. Conform to the written promises or affirmations of fact made by the Contractor.

7.3. Fitness. The Contractor warrants that any material supplied to the State shall fully conform to all requirements of the Contract and all representations of the Contractor, and shall be fit for all purposes and uses required by the Contract.

7.4. Inspection/Testing. The warranties set forth in subparagraphs 7.1 through 7.3 of this paragraph are not affected by inspection or testing of or payment for the materials by the State.

7.5. Compliance With Applicable Laws. The materials and services supplied under this Contract shall comply with all applicable Federal, state and local laws, and the Contractor shall maintain all applicable license and permit requirements.

7.6. Survival of Rights and Obligations after Contract Expiration or Termination.

7.6.1. Contractor's Representations and Warranties. All representations and warranties made by the Contractor under this Contract shall survive the expiration or termination hereof.

In addition, the parties hereto acknowledge that pursuant to A.R.S. § 12-510, except as provided in A.R.S. § 12-529, the State is not subject to or barred by any limitations of actions prescribed in A.R.S., Title 12, Chapter 5.

7.6.2. Purchase Orders. The Contractor shall, in accordance with all terms and conditions of the Contract, fully perform and shall be obligated to comply with all purchase orders received by the Contractor prior to the expiration or termination hereof, unless otherwise directed in writing by the Procurement Officer, including, without limitation, all purchase orders received prior to but not fully performed and satisfied at the expiration or termination of this Contract.

8. State's Contractual Remedies

8.1. Right to Assurance. If the State in good faith has reason to believe that the Contractor does not intend to, or is unable to perform or continue performing under this Contract, the Procurement Officer may demand in writing that the Contractor give a written assurance of intent to perform.

Failure by the Contractor to provide written assurance within the number of Days specified in the demand may, at the State’s option, be the basis for terminating the Contract under the Uniform Terms and Conditions or other rights and remedies available by law or provided by the contract.

8.2. Stop Work Order.

8.2.1. The State may, at any time, by written order to the Contractor, require the Contractor to stop all or any part, of the work called for by this Contract for period(s) of days indicated by the State after the order is delivered to the Contractor. The order shall be specifically identified as a stop work order issued under this clause. Upon receipt of the order, the Contractor shall immediately comply with its terms and take all reasonable steps to minimize the incurrence of costs allocable to the work covered by the order during the period of work stoppage.

8.2.2. If a stop work order issued under this clause is canceled or the period of the order or any extension expires, the Contractor shall resume work. The Procurement Officer shall make an equitable adjustment in the delivery schedule or Contract price, or both, and 205
CC 02-06-2024
205 of 723

Master Agreement
Section 4: Lead State (ARIZONA) Terms and Conditions
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130651
Description: Software Value-Added Reseller (SVAR) Services 57 | Page
the Contract shall be amended in writing accordingly.

8.3. Non-exclusive Remedies. The rights and the remedies of the State under this Contract are not exclusive.

8.4. Nonconforming Tender. Materials or services supplied under this Contract shall fully comply with the Contract. The delivery of materials or services or a portion of the materials or services that do not fully comply constitutes a breach of contract. On delivery of nonconforming materials or services, the State may terminate the Contract for default under applicable termination clauses in the Contract, exercise any of its rights and remedies under the Uniform Commercial Code, or pursue any other right or remedy available to it.

8.5. Right of Offset. The State shall be entitled to offset against any sums due the Contractor, any expenses or costs incurred by the State, or damages assessed by the State concerning the Contractor’s non-conforming performance or failure to perform the Contract, including expenses, costs and damages described in the Uniform Terms and Conditions.

9. Contract Termination

9.1. Cancellation for Conflict of Interest. Pursuant to A.R.S. § 38-511, the State may cancel this Contract within three (3) years after Contract execution without penalty or further obligation if any person significantly involved in initiating, negotiating, securing, drafting or creating the Contract on behalf of the State is or becomes at any time while the Contract or an extension of the Contract is in effect an employee of or a consultant to any other party to this Contract with respect to the subject matter of the Contract. The cancellation shall be effective when the Contractor receives written notice of the cancellation unless the notice specifies a later time. If the Contractor is a political subdivision of the State, it may also cancel this Contract as provided in A.R.S. § 38-511.

9.2. Gratuities. The State may, by written notice, terminate this Contract, in whole or in part, if the State determines that employment or a Gratuity was offered or made by the Contractor or a representative of the Contractor to any officer or employee of the State for the purpose of influencing the outcome of the procurement or securing the Contract, an amendment to the Contract, or favorable treatment concerning the Contract, including the making of any determination or decision about contract performance. The State, in addition to any other rights or remedies, shall be entitled to recover exemplary damages in the amount of three times the value of the Gratuity offered by the Contractor.

9.3. Suspension or Debarment. The State may, by written notice to the Contractor, immediately terminate this Contract if the State determines that the Contractor has been debarred, suspended or otherwise lawfully prohibited from participating in any public procurement activity, including but not limited to, being disapproved as a subcontractor of any public procurement unit or other governmental body. Submittal of an offer or execution of a contract shall attest that the contractor is not currently suspended or debarred. If the contractor becomes suspended or debarred, the contractor shall immediately notify the State.

9.4. Termination for Convenience. The State reserves the right to terminate the Contract, in whole or in part at any time when in the best interest of the State, without penalty or recourse. Upon receipt of the written notice, the Contractor shall stop all work, as directed in the notice, notify all subcontractors of the effective date of the termination and minimize all further costs to the State.

In the event of termination under this paragraph, all documents, data and reports prepared by 206
CC 02-06-2024
206 of 723

Master Agreement
Section 4: Lead State (ARIZONA) Terms and Conditions
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130651
Description: Software Value-Added Reseller (SVAR) Services 58 | Page
the Contractor under the Contract shall become the property of and be delivered to the State upon demand. The Contractor shall be entitled to receive just and equitable compensation for work in progress, work completed and materials accepted before the effective date of the termination. The cost principles and procedures provided in A.A.C. R2-7-701 shall apply.

9.5. Termination for Default.

9.5.1. In addition to the rights reserved in the contract, the State may terminate the Contract in whole or in part due to the failure of the Contractor to comply with any term or condition of the Contract, to acquire and maintain all required insurance policies, bonds, licenses and permits, or to make satisfactory progress in performing the Contract. The Procurement Officer shall provide written notice of the termination and the reasons for it to the Contractor.

9.5.2. Upon termination under this paragraph, all goods, materials, documents, data and reports prepared by the Contractor under the Contract shall become the property of and be delivered to the State on demand.

9.5.3. The State may, upon termination of this Contract, procure, on terms and in the manner that it deems appropriate, materials or services to replace those under this Contract.

The Contractor shall be liable to the State for any excess costs incurred by the State in procuring materials or services in substitution for those due from the Contractor.

9.6. Continuation of Performance Through Termination. The Contractor shall continue to perform, in accordance with the requirements of the Contract, up to the date of termination, as directed in the termination notice.

10. Contract Claims
All contract claims or controversies under this Contract shall be resolved according to A.R.S. Title 41, Chapter 23, Article 9, and rules adopted thereunder.

11. Arbitration
The parties to this Contract agree to resolve all disputes arising out of or relating to this contract through arbitration, after exhausting applicable administrative review, to the extent required by A.R.S. § 12-1518, except as may be required by other applicable statutes (Title 41).

12. Comments Welcome
The State Procurement Office periodically reviews the Uniform Terms and Conditions and welcomes any comments you may have. Please submit your comments to: State Procurement Administrator, State Procurement Office, 100 North 15th Avenue, Suite 201, Phoenix, Arizona, 85007. 207
CC 02-06-2024
207 of 723
208
CC 02-06-2024
208 of 723
209
CC 02-06-2024
209 of 723
210
CC 02-06-2024
210 of 723
211
CC 02-06-2024
211 of 723
212
CC 02-06-2024
212 of 723
213
CC 02-06-2024
213 of 723
214
CC 02-06-2024
214 of 723
215
CC 02-06-2024
215 of 723
216
CC 02-06-2024
216 of 723
217
CC 02-06-2024
217 of 723
218
CC 02-06-2024
218 of 723
219
CC 02-06-2024
219 of 723
220
CC 02-06-2024
220 of 723
221
CC 02-06-2024
221 of 723
222
CC 02-06-2024
222 of 723
223
CC 02-06-2024
223 of 723
224
CC 02-06-2024
224 of 723
225
CC 02-06-2024
225 of 723
226
CC 02-06-2024
226 of 723
227
CC 02-06-2024
227 of 723
228
CC 02-06-2024
228 of 723
229
CC 02-06-2024
229 of 723
230
CC 02-06-2024
230 of 723
231
CC 02-06-2024
231 of 723
232
CC 02-06-2024
232 of 723
233
CC 02-06-2024
233 of 723
7/31/2023
234
CC 02-06-2024
234 of 723
3/16/2023
235
CC 02-06-2024
235 of 723
12/20/2022
236
CC 02-06-2024
236 of 723
237
CC 02-06-2024
237 of 723
9/15/2022
238
CC 02-06-2024
238 of 723
6/29/2022
239
CC 02-06-2024
239 of 723

STATE OF CALIFORNIA
PARTICIPATING ADDENDUM 7-16-70-36
AMENDMENT 7

SOFTWARE VAR
Arizona NASPO ValuePoint Master Agreement Number ADSPO16-130651 SHI International, Corp. (Contractor)