Agreement — San Jose City Council, March 21, 2023

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INITIALS INITIALS
©2019AIRCRE. AllRightsReserved. Last Edited:2/27/20231:07PM STN-27.30,Revised10-22-2020 Page1of16

1. BasicProvisions ("BasicProvisions").

1.1 ParƟes. This Lease("Lease"), datedforreference purposesonly ________ ,ismade byand between PMI Partners LLC, a California limited liability company, or its successor-in-interest ("Lessor")and the City of San Jose, a municipal corporation ("Lessee"), (collecƟvely the" ParƟes," orindividuallya "Party").

1.2 Premises: That certainreal property,includingall improvementstherein ortobe providedby Lessorunderthe termsof thisLease, commonlyknownas (streetaddress, city,state, zip): [address of Affordable Housing Parcel TBD, a portion of 455 S. Second Street, San Jose, California ("Premises"). ThePremises arelocatedin theCounty of Santa Clara, California , and aregenerally describedas (describe brieﬂythe natureof theproperty and,if applicable,the "Project,"ifthe propertyis locatedwithina Project):

Multi-family residential building . (See alsoParagraph 2)

1.3 Term: See Addendum yearsand __ months("Original Term")commencing See Addendum ("Commencement Date") andending See Addendum ("ExpiraƟon Date"). (See alsoParagraph 3)

1.4 Early Possession: Ifthe Premisesareavailable Lesseemay havenon-exclusivepossession ofthe Premisescommencing n/a ("EarlyPossession Date"). (Seealso Paragraphs3.2and 3.3)

1.5 Base Rent: See Addendum per month("BaseRent"), payableon the 1st day ofeach monthcommencing ______ . (See also Paragraph4)
Ifthis boxis checked,thereare provisionsin thisLease fortheBase Rentto beadjusted. SeeParagraph 52 .

1.6 Base Rentand OtherMonies PaidUpon ExecuƟon:

1.7 Agreed Use: the provision of interim, supportive, and/or low-income rental housing. The premises may not be used to provide market rate rental housing . (See alsoParagraph 6)

1.8 Insuring Party.Lessoris the"InsuringParty" unlessotherwise statedherein. (Seealso Paragraph8)

1.9 Real EstateBrokers. (See alsoParagraph15 and25)
agency relaƟonships inthis Leasewiththe followingreal estatebrokers ("Broker(s)")and/ortheir agents("Agent(s)"):

Lessor'sBrokerage Firm n/a License No. n/a Isthe brokerof(check one): theLessor;or both theLessee andLessor(dual agent) .

Lessor'sAgent n/a LicenseNo. n/a is(check one): theLessor'sAgent (salespersonor brokerassociate);or both theLessee's Agentand theLessor's Agent(dualagent).

Lessee'sBrokerage Firm n/a License No. n/a Isthe brokerof(check one): theLessee;or both theLessee andLessor(dual agent).

Lessee'sAgent n/a LicenseNo. n/a is (checkone): theLessee's Agent(salesperson orbrokerassociate); or boththe Lessee's Agentand theLessor's Agent(dualagent).
separate wriƩen agreement(or ifthereis nosuch agreement,the sumof n/a or n/a % ofthetotal BaseRent) forthe brokerageservicesrendered bythe Brokers.

1.10 Guarantor. The obligaƟons ofthe Lesseeunderthis Leaseare tobeguaranteed by n/a ("Guarantor"). (SeealsoParagraph 37)

1.11 AƩachments. AƩachedhereto arethe following,allof which consƟtute apartof thisLease:
anAddendum consisƟngof Paragraphs 51 through 63 ;
aplot plan depicƟng thePremises;
acurrent setof theRulesand RegulaƟons;
aWork LeƩer;
other(specify): .

2. Premises.

2.1 Leƫng. Lessor herebyleases toLessee,and Lesseehereby leasesfromLessor, thePremises, fortheterm, atthe rental,and uponallof theterms, covenantsand condiƟonsset forthinthis Lease. Whilethe approximatesquarefootage ofthe Premisesmayhave beenused inthe markeƟng ofthe Premisesfor purposesof comparison,the BaseRentstated hereinis NOT Ɵed tosquarefootage andis notsubjectto adjustmentshould theactualsize bedetermined tobe

STANDARDINDUSTRIAL/COMMERCIALSINGLE-TENANT LEASE-NET
(DONOTUSE THISFORMFORMULTI-TENANT BUILDINGS)
(a) Base Rent: See Addendum for theperiod first month . (b) SecurityDeposit: See Addendum ("SecurityDeposit"). (Seealso Paragraph5) (c) AssociaƟonFees: n/a forthe period n/a .
(d) Other: n/a for n/a .
(e) Total DueUpon ExecuƟon ofthis Lease: See Addendum . (a) RepresentaƟon: Each Partyacknowledgesreceiving aDisclosure RegardingReal EstateAgencyRe laƟonship, conﬁrms and consentstothe following (b) Paymentto Brokers. Upon execuƟonand deliveryof thisLeaseby both ParƟes, Lessorshall paytothe Brokersthe brokeragefeeagreed toin a Attachment A – Master Pre-Lease Document
DRAFT - Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.

REVISED – Administrative changes made since original posting on 3/10/2023 shown in blueline. ________ ________
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INITIALS INITIALS
©2019AIRCRE. AllRightsReserved. Last Edited:2/27/20231:07PM STN-27.30,Revised10-22-2020 Page2of16
diﬀerent. NOTE: Lesseeisadvised toverify theactual sizepriorto execuƟngthis Lease.

2.2 CondiƟon. Lessor shalldeliver thePremisesto Lesseebroom cleanandfree ofdebris ontheCommencement Dateor theEarly PossessionDate,whichever ﬁrstoccurs ("StartDate"), and,solong asthe requiredservice contractsdescribedin Paragraph7.1(b) belowareobtained byLessee andin eﬀect withinthirty days followingthe StartDate, warrantsthatthe exisƟngelectrical, plumbing,ﬁre sprinkler, lighƟng, heaƟng, venƟlaƟng and aircondiƟoningsystems ("HVAC"),loading doors,sump pumps,if any,andall othersuch elementsin thePremises,other thanthose constructedbyLessee, shallbe ingood operaƟng condiƟon on saiddate, thatthe structuralelements oftheroof, bearingwalls and foundaƟon ofanybuildings onthe Premises(the" Building") shallbe freeofmaterial defects,and thatthe Premisesdo notcontain hazardouslevelsof anymold orfungi deﬁnedastoxic underapplicable stateorfederal law. Ifanon-compliance withsaid warrantyexists as ofthe StartDate, orifone ofsuch systemsor elementsshould malfuncƟon orfail withintheappropriate warrantyperiod, Lessorshall,as Lessor'ssole obligaƟonwith respectto such maƩer ,exceptasotherwise providedin thisLease, promptly aŌerreceipt ofwriƩen noƟcefromLessee seƫngforth withspeciﬁcitythe natureand extentof suchnon-compliance, malfuncƟon orfailure, recƟfysame atLessor's expense. The warrantyperiods shallbeas follows:(i) 6monthsas tothe HVACsystems, and(ii) 30days astothe remainingsystems andother elementsofthe Building. IfLesseedoes notgive Lessortherequired noƟcewithin theappropriate warranty period, correcƟon ofany suchnon-compliance, malfuncƟon orfailure shallbe the obligaƟonof Lesseeat Lessee'ssolecost andexpense. Lessoralso warrants,that unlessotherwise speciﬁedin wriƟng,Lessoris unawareof (i)any recorded NoƟcesof DefaultaﬀecƟng thePremise;(ii) anydelinquent amountsdueunder anyloan securedby thePremises; and(iii)any bankruptcyproceeding aﬀecƟngthe Premises.

2.3 Compliance. Lessor warrantsthat tothebest ofits knowledgetheimprovements onthe Premisescomplywith thebuilding codes,applicable laws, covenantsor restricƟonsof record,regulaƟons,and ordinances("Applicable Requirements")that werein eﬀect atthe Ɵmethateach improvement,or porƟon thereof,was constructed. Saidwarrantydoes notapply tothe usetowhich Lesseewill putthePremises, modiﬁcaƟonswhich mayberequired bythe Americanswith DisabiliƟesAct orany similarlawsas aresult ofLessee's use(seeParagraph 50),or toanyAlt eraƟons or UƟlity InstallaƟons (as deﬁned inParagraph 7.3(a))made orto bemade byLessee. NOTE:Lessee isresponsible fordetermining whetherornot theApplicable Requirements,andespecially thezoning, areappropriatefor Lessee'sintended use,and acknowledgesthatpast usesof thePremises maynolonger beallowed. Ifthe Premisesdo notcomplywith saidwarranty, Lessorshall, exceptas otherwiseprovided, promptly aŌerreceipt ofwriƩen noƟce from Lesseeseƫngforth withspeciﬁcity thenatureand extentof suchnon-compliance, recƟfy thesame atLessor's expense. If Lesseedoes notgive LessorwriƩen noƟce ofa non-compliancewiththis warrantywithin 6monthsfollowing theStart Date, correcƟonof thatnon-compliance shallbethe obligaƟonof Lesseeat Lessee'ssolecost andexpense. Ifthe ApplicableRequirements are hereaŌerchanged soas to requireduring theterm ofthisLease the construcƟon ofan addiƟontoor an alteraƟon ofthePremises and/orBuilding, the remediaƟonof anyHazardous Substance, orthe reinforcementor otherphysical modiﬁcaƟon ofthe Unit,Premises and/orBuilding(" Capital Expenditure"),Lessor andLesseeshall allocatethe costofsuch workas follows:
(a) Subject toParagraph 2.3(c)below,if suchCapital Expendituresare requiredasa resultof the speciﬁcand uniqueuse ofthePremises byLessee as comparedwith usesby tenantsingeneral, Lesseeshall befully responsibleforthe costthereof, provided,however,that ifsuch CapitalExpenditureis requiredduring thelast 2years ofthisLease andthe costthereof exceeds6months' BaseRent, Lesseemayinstead terminatethis LeaseunlessLessor noƟﬁesLessee, inwriƟng, within10 days aŌer receiptofLessee's terminaƟon noƟce thatLessor haselectedto paythe diﬀerencebetweenthe actualcost thereofandan amountequal to6 months'Base Rent. IfLesseeelects terminaƟon,Lessee shallimmediately ceasetheuse ofthe Premiseswhichrequires suchCapital Expenditureanddeliver toLessor wriƩen noƟce specifyinga terminaƟondateat least90 days thereaŌer .Such terminaƟon dateshall, however,inno eventbe earlierthanthe lastday thatLessee couldlegally uƟlizethe Premiseswithoutcommencing suchCapital Expenditure. (b) Ifsuch CapitalExpenditure isnotthe resultof the speciﬁcand uniqueuse ofthe PremisesbyLessee (suchas, governmentallymandatedseismic modiﬁcaƟons),then Lessorshall payforsuch CapitalExpenditure andLessee shallonlybe obligatedto pay,eachmonth duringthe remainderofthe termof thisLease orany extensionthereof, onthedate thaton whichthe BaseRentis due,an amountequalto 1/144thof the porƟonof suchcosts reasonablyaƩributable tothe Premises. Lesseeshall payIntereston thebalance butmay prepayits obligaƟon atany Ɵme. If, however,such CapitalExpenditureis requiredduring thelast 2years ofthis Leaseor ifLessorreasonably determinesthat itis noteconomicallyfeasible topay itssharethereof, Lessorshall havethe opƟon toterminate thisLease upon 90days prior wriƩen noƟce toLessee unlessLessee noƟﬁesLessor, inwriƟng,within 10days aŌerreceiptof Lessor's terminaƟon noƟce thatLessee willpay forsuch CapitalExpenditure. If Lessordoesnot electto terminate,and failstotender itsshare ofanysuch CapitalExpenditure, Lesseemayadvance suchfunds anddeduct same,with Interest,from Rent unƟlLessor's shareof suchcosts havebeenfully paid. IfLesseeis unableto ﬁnanceLessor'sshare, orif thebalance oftheRent due andpayable forthe remainderofthis Leaseis not suﬃcient tofullyreimburse Lesseeon an oﬀsetbasis, Lesseeshall havetheright toterminate thisLease upon30 days wriƩen noƟce to Lessor.
(c) Notwithstandingthe above,the provisionsconcerningCapital Expendituresare intendedto applyonlyto non-voluntary,unexpected, andnew ApplicableRequirements. If theCapitalExpenditures areinstead triggeredby Lesseeasa resultof anactualor proposedchange inuse,change inintensity ofuse, or modiﬁcaƟonto thePremises then,andin thatevent, Lesseeshall either:(i)immediately ceasesuch changeduseor intensityof useand/ortake suchother stepsas maybe necessaryto eliminatetherequirement forsuch CapitalExpenditure, or(ii)complete suchCapital Expenditureatits ownexpense. Lesseeshall not,however, haveany rightto terminatethisLease.

2.4 Acknowledgements. Lessee acknowledgesthat: (a)it hasbeen givenanopportunity toinspect andmeasurethe Premises,(b) ithas beenadvisedby Lessor and/orBrokers to saƟsfyitself withrespectto thesize and condiƟon ofthePremises (includingbut notlimitedto theelectrical, HVACand ﬁre sprinkler systems,security, environmental aspects,andcompliance withApplicable Requirementsand theAmericanswith DisabiliƟesAct), andtheirsuitability forLessee's intendeduse, (c)Lessee hasmadesuch invesƟgaƟonas itdeems necessarywithreference tosuch maƩersandassumes allresponsibility thereforasthe samerelate toits occupancyof thePremises,(d) itis notrelying onany representaƟon asto thesizeof thePremises madeby Brokersor Lessor, (e)the squarefootage ofthe Premiseswas notmaterial toLessee'sdecision tolease thePremises andpaythe Rentstated herein,and(f) neitherLessor, norLessor'sagents,norBrokers have
madeanyoralor wriƩen representaƟonsor warranƟeswith respectto saidmaƩersother thanas setforthin thisLease. In addiƟon, Lessoracknowledges that:(i) Brokershave madeno representaƟons,promisesor warranƟesconcerning Lessee'sability tohonorthe Leaseor suitabilitytooccupy thePremises, and(ii) itis Lessor'ssole responsibilityto invesƟgatethe ﬁnancial capabilityand/or suitabilityof allproposedtenants.

2.5 Lessee asPrior Owner/Occupant. The warranƟesmade byLessor inParagraph2 shallbe ofnoforce or eﬀect ifimmediately priortothe StartDate Lessee wasthe owneror occupantofthe Premises. Insuch event,Lesseeshall beresponsible foranynecessary correcƟvework.

3. Term.

3.1 Term. The CommencementDate, ExpiraƟonDateand OriginalTerm ofthisLease areas speciﬁedinParagraph 1.3.

3.2 Early Possession. Anyprovision herein granƟngLessee EarlyPossession ofthePremises issubject toand condiƟoned uponthe Premisesbeing availablefor suchpossession priorto theCommencementDate. Any grantof EarlyPossessiononly conveysa non-exclusiverightto occupythe Premises. If Lesseetotally or parƟallyoccupies thePremises priortothe CommencementDate, the obligaƟon topayBase Rentshall beabatedfor theperiod ofsuchEarly Possession. Allother termsof thisLease (includingbutnot limitedto the obligaƟons topayReal PropertyTaxes andinsurancepremiums andto maintainthePremises) shallbe in eﬀect duringsuch period. AnysuchEarly Possessionshall not aﬀect the ExpiraƟonDate.

DRAFT - Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.

REVISED – Administrative changes made since original posting on 3/10/2023 shown in blueline. ________ ________
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INITIALS INITIALS
©2019AIRCRE. AllRightsReserved. Last Edited:2/27/20231:07PM STN-27.30,Revised10-22-2020 Page3of16

3.3 Delay InPossession. Lessor agreestouse commerciallyreasonable eﬀortstodeliver exclusivepossession ofthePremises toLessee bythe CommencementDate. If, despitesaid eﬀorts, Lessoris unableto deliverpossessionby suchdate, Lessorshallnot besubject toanyliability therefor,nor shallsuch failure aﬀect thevalidity ofthisLease orchange the ExpiraƟon Date. Lessee shallnot, however,beobligated topay Rentorperform itsother obligaƟons unƟl Lessor deliverspossession ofthe Premisesandany periodof rentabatement thatLesseewould otherwisehave enjoyedshallrun fromthe dateofdelivery ofpossession and conƟnuefor aperiod equaltowhat Lesseewould otherwisehave enjoyedunderthe termshereof, butminusany daysof delaycausedby theacts oromissions of Lessee. Ifpossession isnotdelivered within60 days aŌer theCommencementDate, asthe samemaybe extendedunder thetermsof anyWork LeƩerexecuted by ParƟes,Lessee may,at itsopƟon,by noƟcein wriƟngwithin 10days aŌer theend ofsuch60 dayperiod, cancelthisLease, inwhich eventthe ParƟesshallbe dischargedfrom all obligaƟons hereunder. If suchwriƩen noƟce is notreceivedby Lessorwithin said10day period,Lessee's righttocancel shallterminate. If possessionof thePremises isnotdelivered within120 days aŌer theCommencementDate, thisLease shallterminateunless otheragreements arereachedbetween Lessorand Lessee,in wriƟng.

3.4 Lessee Compliance. Lessorshall notberequired totender possessionofthe Premisesto Lessee unƟlLessee complieswith itsobligaƟon toprovide evidenceof insurance(Paragraph 8.5). Pending deliveryof suchevidence, Lesseeshallbe requiredto performallof its obligaƟons underthisLease fromand aŌerthe StartDate, includingthe paymentofRent, notwithstandingLessor's elecƟonto withholdpossessionpending receiptof suchevidenceof insurance. Further,ifLessee isrequired toperform anyother condiƟons priorto orconcurrent withtheStart Date,the StartDateshall occurbut Lessormayelect towithhold possession unƟl such condiƟonsare saƟsﬁed.

4. Rent.

4.1 Rent Deﬁned. Allmonetary obligaƟonsofLessee toLessor undertheterms ofthis Lease(exceptfor theSecurity Deposit)are deemedtobe rent(" Rent").

4.2 Payment. Lessee shallcause paymentofRent tobe receivedbyLessor inlawful moneyofthe UnitedStates, without oﬀset or deducƟon(except as speciﬁcally permiƩed inthis Lease),onor beforethe dayon whichitis due. Allmonetaryamounts shallbe roundedtothe nearestwhole dollar. Intheevent thatany invoiceprepared byLessor isinaccuratesuch inaccuracyshall not consƟtute awaiverand Lesseeshall beobligatedto paythe amountsetforth inthis Lease. Rentfor anyperiod duringthe termhereofwhich isfor lessthan onefullcalendar monthshall beproratedbased uponthe actualnumberof daysof saidmonth. Paymentof Rentshall bemade toLessorat itsaddress statedherein ortosuch otherpersons orplaceas Lessormay from Ɵmeto Ɵmedesignate inwriƟng. Acceptanceof a paymentwhich isless thantheamount thendue shallnot beawaiver ofLessor's rightstothe balanceof suchRent,regardless ofLessor's endorsementof anycheck so staƟng. In theeventthat anycheck, draŌ,or otherinstrumentof paymentgiven byLesseeto Lessoris dishonoredforany reason,Lessee agreesto paytoLessor thesum of$25 in addiƟonto anyLate Chargeand Lessor,atits opƟon,may requireallfuture Rentbe paidbycashier's check. Paymentswill beapplied ﬁrst toaccrued latecharges and aƩorney's fees,secondto accruedinterest, thento BaseRent,Insurance andReal PropertyTaxes,and anyremaining amounttoany other outstandingcharges orcosts.

4.3 AssociaƟon Fees. In addiƟon totheBase Rent,Lessee shallpayto Lessoreach monthanamount equalto anyowner's associaƟonorcondominium fees leviedor assessedagainst thePremises. Saidmonies shallbe paidatthe same Ɵme andinthe samemanner astheBase Rent.

5. SecurityDeposit. Lesseeshall depositwith Lessorupon execuƟon hereofthe SecurityDeposit assecurityfor Lessee'sfaithful performanceofits obligaƟons underthis Lease. IfLesseefails topay Rent,or otherwiseDefaultsunder thisLease, Lessormayuse, applyor retainallor any porƟon ofsaid SecurityDepositfor the paymentof anyamount alreadydueLessor, forRents whichwill beduein thefuture, and/orto reimburseor compensateLessorfor anyliability, expense,loss or damagewhich Lessormay suﬀerorincur byreason thereof. IfLessoruses orapplies allorany por Ɵonof theSecurityDeposit, Lesseeshall within10 days aŌer wriƩenrequest therefordeposit monieswithLessor suﬃcientto restoresaid SecurityDepositto thefull amountrequiredby thisLease. Ifthe BaseRent increases duringthe termof thisLease,Lessee shall,upon wriƩenrequest fromLessor,deposit addiƟonalmonies withLessorso thatthe totalamountof theSecurity Deposit shallat all Ɵmes bearthesame proporƟonto theincreased BaseRentas the iniƟal SecurityDepositbore tothe iniƟalBaseRent. Should theAgreed Usebeamended toaccommodate amaterial changeinthe businessof Lesseeor toaccommodatea sublesseeor assignee,Lessorshall havethe righttoincrease theSecurity Deposit tothe extentnecessary, inLessor'sreasonable judgment,to accountfor anyincreasedwear andtear thatthePremises may suﬀer asaresult thereof. Ifa changein controlof Lesseeoccurs duringthisLease andfollowing suchchange the ﬁnancial condiƟon ofLessee is,inLessor's reasonablejudgment, signiﬁcantlyreduced,Lessee shalldeposit such addiƟonal monieswithLessor asshall be suﬃcient tocausethe SecurityDeposit tobeat acommercially reasonablelevelbased onsuch changein ﬁnancial condiƟon. Lessor shallnotbe requiredto keepthe SecurityDepositseparate fromits generalaccounts. Within90 days aŌerthe expiraƟonor terminaƟonof thisLease, Lessorshall returnthat porƟon ofthe SecurityDeposit notusedor appliedby Lessor. Lessor shallupon wriƩenrequestprovide Lesseewith an accounƟng showinghow that porƟon oftheSecurity Depositthat wasnot returnedwasapplied. No partofthe SecurityDeposit shallbeconsidered tobe heldin trust,tobear interestor tobe prepaymentforany moniesto bepaid byLesseeunder thisLease. THESECURITY DEPOSITSHALL NOTBEUSED BYLESSEE INLIEU OFPAYMENTOF THELAST MONTH'SRENT.

6. Use.

6.1 Use. Lessee shalluse andoccupythe Premisesonly fortheAgreed Use,or anyotherlegal usewhich isreasonably comparablethereto,and forno other purpose. Lesseeshall notuseor permitthe useof thePremisesin amanner thatisunlawful, createsdamage, wasteora nuisance,or thatdisturbs occupantsofor causesdamage toneighboring premisesor properƟes. Other thanguide, signalandseeing eyedogs, Lesseeshallnot keepor allowinthe Premisesany pets,animals, birds, ﬁsh, or repƟles. Lessor shallnotunreasonably withholdor delayitsconsent toany wriƩenrequest fora modiﬁcaƟon ofthe AgreedUse,so longas thesamewill notimpair thestructural integrityofthe improvementson thePremises orthemechanical orelectrical systemstherein,and/or isnot signiﬁcantlymoreburdensome tothe Premises. IfLessorelects towithhold consent,Lessor shallwithin7 days aŌer suchrequestgive wriƩen noƟﬁcaƟon ofsame,which noƟceshall includean explanaƟonof Lessor'sobjecƟons tothechange inthe AgreedUse.

6.2 Hazardous Substances.
(a) Reportable UsesRequire Consent. The term"Hazardous Substance"as usedinthis Leaseshall meananyproduct, substance,or wastewhose presence,use, manufacture,disposal, transportaƟon,orrelease, eitherby itselfor incombi naƟonwith othermaterials expectedtobe onthe Premises,iseither: (i) potenƟallyinjurious tothe publichealth,safety orwelfare, theenvironment orthePremises, (ii)regulated ormonitoredby anygovernmental authority,or(iii) abasis for potenƟal liabilityof Lessortoany governmentalagency orthird partyunderany applicablestatute orcommonlaw theory. HazardousSubstancesshall include,but notbe limitedto, hydrocarbons,petroleum,gasoline, and/orcrude oilor anyproducts,byproducts or fracƟons thereof. Lessee shallnot engageinany acƟvityin oron thePremises which consƟtutes aReportableUse ofHazardous Substanceswithout theexpressprior wr iƩenconsent ofLessorand Ɵmelycompliance (atLessee's expense)with allApplicable Requirements. "Reportable Use"shall mean(i) the installaƟonor useof anyaboveor belowground storagetank,(ii) the generaƟon, possession,storage, use, transportaƟon, ordisposalof aHazardous Substancethat requiresapermit from,or withrespectto whicha report, noƟce, registraƟon or businessplan isrequired tobe ﬁled with,any governmentalauthority, and/or(iii)the presenceat thePremisesof aHazardous Substancewithrespect towhich any ApplicableRequirements requiresthat a noƟcebe givento personsentering oroccupyingthe Premisesor neighboring properƟes. Notwithstandingthe foregoing, Lesseemay useany ordinaryandcustomary materialsreasonably requiredto beusedin thenormal courseofthe AgreedUse, ordinary oﬃcesupplies (copiertoner, liquidpaper, glue,etc.) andcommonhousehold cleaningmaterials, solong assuchuse isin compliancewithall ApplicableRequirements, isnota ReportableUse, and DRAFT - Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.

REVISED – Administrative changes made since original posting on 3/10/2023 shown in blueline. ________ ________
________ ________

INITIALS INITIALS
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doesnot exposethe Premisesorneighboring propertyto anymeaningful riskof contaminaƟon ordamage orexposeLessor toany liabilitytherefor. In addiƟon, Lessormay condiƟonits consenttoany ReportableUse uponreceiving such addiƟonal assurances asLessor reasonablydeemsnecessary toprotect itself,thepublic, thePremises and/orthe environmentagainstdamage, contaminaƟon,injury and/orliability, including,butnot limitedto, the installaƟon(and removalon orbefore Lease expiraƟon or terminaƟon) of protecƟve modiﬁcaƟons (suchas concreteencasements) and/orincreasingthe SecurityDeposit. (b) Dutyto InformLessor. IfLessee knows,or hasreasonablecause tobelieve, thata HazardousSubstancehas cometo belocatedin, on,under or aboutthe Premises,other thanaspreviously consentedto byLessor, Lesseeshallimmediately give wriƩen noƟce ofsuch factto Lessor,andprovide Lessorwith a copyof anyreport, noƟce,claimor other documentaƟon whichit hasconcerningthe presenceof suchHazardousSubstance. (c) Lessee RemediaƟon. Lessee shallnotcause orpermit anyHazardous Substancetobe spilledor releasedin,on, under,or aboutthePremises (includingthrough theplumbing orsanitarysewer system)and shallpromptly, atLessee'sexpense, complywith allApplicableRequirements andtake all invesƟgatory and/orremedial acƟonreasonably recommended,whetheror notformally orderedor required,forthe cleanupof any contaminaƟonof, andfor themaintenance, securityand/or monitoringof thePremisesor neighboring properƟes, thatwas causedormaterially contributedto byLessee,or pertainingto orinvolvingany HazardousSubstance broughtonto thePremisesduring theterm ofthis Lease,byor forLessee, oranythird party. (d) Lessee IndemniﬁcaƟon. Lessee shallindemnify,defend andhold Lessor,itsagents, employees,lenders andground lessor,ifany, harmlessfrom and againstany andall lossofrents and/ordamages, liabiliƟes,judgments, claims,expenses,pen alƟes, and aƩorneys' andconsultants'fees arisingout oforinvolving any HazardousSubstance broughtonto thePremisesby orfor Lessee,or anythirdparty (provided,however, thatLesseeshall haveno liabilityunderthis Leasewith respectto underground migraƟon ofanyHazardous Substanceunder thePremises fromadjacent properƟes notcaused orcontributedto byLessee). Lessee's obligaƟonsshall include,but notbelimited to,the eﬀectsof anycontaminaƟonor injuryto person,propertyor theenvironment createdor suﬀered byLessee, and thecost of invesƟgaƟon, removal, remediaƟon, restoraƟon and/orabatement, andshall survivethe expiraƟon or terminaƟon ofthisLease. No terminaƟon, cancellaƟonor releaseagreement enteredintoby Lessorand Lesseeshall releaseLesseefrom itsob ligaƟons underthisLease withrespect toHazardous Substances,unless speciﬁcallyso agreedbyLessor in wriƟng atthe Ɵmeofsuch agreement. (e) Lessor IndemniﬁcaƟon. Except asotherwise providedin paragraph8.7,Lessor andits successorsandassigns shallindemnify, defend,reimburseand holdLessee, itsemployees andlenders,harmless fromand againstany andallenvironmental damages,including thecostof remediaƟon, whichresultfrom HazardousSubstances whichexisted onthePremises priorto Lessee'soccupancy orwhichare causedby thegrossnegligence orwillful misconductofLessor, its agentsor employees. Lessor's obligaƟons,as andwhen requiredby theApplicableRequirements, shallinclude, butnotbe limitedto, thecostof invesƟgaƟon, removal, remediaƟon, restoraƟon and/or abatement,andshall survivethe expiraƟonor terminaƟonofthis Lease. (f) InvesƟgaƟons and RemediaƟons. Lessorshall retaintheresponsibility andpay forany invesƟgaƟons or remediaƟon measuresrequired by governmental enƟƟes having jurisdicƟon withrespectto theexistence ofHazardous Substancesonthe Premisesprior toLessee'soccupancy, unlesssuch remediaƟon measureis requiredas aresultof Lessee'suse (including "AlteraƟons", as deﬁnedin paragraph7.3(a) below)ofthe Premises,in whicheventLessee shallbe responsiblefor suchpayment. Lesseeshall cooperatefully inany such acƟviƟesat therequest ofLessor,including allowingLessor andLessor'sagents tohave reasonableaccess tothe Premisesatreasonable Ɵmesin orderto carryoutLessor's invesƟgaƟveand remedialresponsibiliƟes. (g) Lessor T erminaƟon OpƟon. If aHazardousSubstance CondiƟon(see Paragraph9.1(e))occurs duringthe termofthis Lease,unless Lesseeis legally responsibletherefor (inwhich caseLesseeshall makethe invesƟgaƟonand remediaƟonthereofrequired bythe ApplicableRequirementsand thisLease shall conƟnue infull forceand eﬀect,butsubject toLessor's rightsunder Paragraph6.2(d)and Paragraph13), Lessormay,at Lessor's opƟon, either(i) invesƟgate andremediate such HazardousSubstance CondiƟon,if required,assoon asreasonably possibleat Lessor'sexpense,in whichevent thisLeaseshall conƟnuein fullforceand eﬀect,or (ii) if
the esƟmated costto remediatesuch condiƟon exceeds12 Ɵmesthe thenmonthlyBase Rentor $100,000,whicheveris greater,give wriƩen noƟceto Lessee,within 30days aŌerreceipt byLessorof knowledgeof theoccurrence ofsuchHazardous Substance CondiƟon, ofLessor'sdesire toterminate thisLeaseas ofthe date60 daysfollowing thedate ofsuch noƟce. In theevent Lessorelectsto givea terminaƟon noƟce, Lessee may,within 10days thereaŌer ,give wriƩen noƟce to Lessorof Lessee'scommitment topay theamountby whichthe costof the remediaƟonof suchHazardous SubstanceCondiƟonexceeds anamount equalto12 Ɵmesthe then monthlyBase Rentor $100,000,whicheveris greater. Lesseeshall provideLessorwith saidfunds or saƟsfactoryassurance thereofwithin 30daysfollowing such commitment. Insuch event,thisLease shall conƟnue infull forceand eﬀect, andLessor shallproceedto makesuch remediaƟonassoon asreasonably possible aŌer therequired fundsare available. If Lesseedoes notgive suchnoƟceand providethe requiredfundsor assurancethereof withinthe Ɵme provided,this Leaseshall terminateas ofthe date speciﬁedin Lessor'snoƟce of terminaƟon.

6.3 Lessee's Compliancewith ApplicableRequirements. Exceptas otherwiseprovided inthisLease, Lesseeshall, atLessee'ssole expense,fully, diligentlyand ina Ɵmelymanner, materiallycomplywith allApplicable Requirements,the requirementsofany applicable ﬁre insuranceunderwriteror raƟngbureau, andthe recommendaƟonsof Lessor'sengineers and/orconsultantswhich relatein anymanner tothePremises, withoutregard towhethersaid ApplicableRequirements are nowin eﬀector becomeeﬀecƟve aŌer theStart Date. Lesseeshall,within 10days aŌerreceiptof Lessor's wriƩen request,provideLessor withcopies ofall permits andother documents,and other informaƟonevidencing Lessee'scompliance withany ApplicableRequirements speciﬁed byLessor, andshallimmediately upon receipt, noƟfy Lessorin wriƟng(withcopies ofany documentsinvolved) ofanythreatened oractual claim, noƟce, citaƟon, warning,complaint orreportpertaining to orinvolving thefailure ofLesseeor thePremises tocomply withanyApplicable Requirements. Likewise,Lesseeshall immediatelygive wriƩen noƟceto Lessorof: (i) anywater damageto thePremisesand anysuspected seepage,pooling, dampnessorother condiƟonconducive tothe producƟon ofmold; or(ii)any musƟnessor otherodors thatmight indicatethepresence ofmold inthe Premises. In addiƟon,Lessee shallprovidecopies ofall relevantmaterialsafety datasheets (MSDS)to Lessorwithin 10days ofthereceipt ofa wriƩenrequest therefor. InaddiƟon,Lessee shallprovideLessor withcopies ofitsbusiness license, cerƟﬁcate ofoccupancy and/orany similardocument within10days ofthe receiptof a wriƩenrequest therefor.

6.4 InspecƟon; Compliance. Lessorand Lessor's"Lender"(as deﬁnedin Paragraph30)and consultantsauthorized byLessorshall havethe rightto enterinto thelobbyandcommonareasofthePremisesatany Ɵme inthe caseofan emergency,and otherwiseatreasonable Ɵmes aŌer reasonable noƟce,for thepurpose ofinspecƟngand/or tesƟngthe condiƟonof thePremisesand/or forverifying compliancebyLessee withthis Lease. The costof anysuch inspecƟonsshall bepaid byLessor,unless a violaƟon ofApplicable Requirements,ora HazardousSubstance CondiƟon(seeparagraph 9.1(e))is foundtoexist orbe imminent,or the inspecƟon isrequestedor orderedby agovernmental authority. In suchcase, Lesseeshallupon requestreimburse Lessorforthe costof such inspecƟon,so longas suchinspecƟonis reasonablyrelated tothe violaƟonor contaminaƟon. In addiƟon,Lesseeshall providecopies ofallrelevant materialsafety datasheets (MSDS)to Lessorwithin10 daysof thereceipt ofa wriƩen requesttherefor. Lesseeacknowledges thatany failureonits partto allowsuch inspecƟonsor tesƟngwill exposeLessor torisksand potenƟallycause Lessorto incurcostsnot contemplatedby thisLease,the extentof whichwillbe extremely diﬃcult to ascertain. Accordingly,should theLesseefail toallow such inspecƟons and/or tesƟngin aƟmely fashiontheBase Rentshall be automaƟcallyincreased, withoutany requirementfor noƟceto Lessee,byan amountequal to10% ofthethen exisƟngBase Rentor$100, whicheveris greaterforthe remainderto theLease. The ParƟes agreethat suchincrease inBaseRent representsfair andreasonable compensaƟonforthe addiƟonalrisk/costs thatLessorwill incurby reasonofLessee's failureto allowsuch inspecƟonand/or tesƟng. Such increasein BaseRent shallinno event consƟtute awaiverof Lessee'sDefault orBreachwith respectto suchfailure nor preventthe exerciseof anyofthe otherrights andremedies grantedhereunder.

DRAFT - Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.

REVISED – Administrative changes made since original posting on 3/10/2023 shown in blueline. ________ ________
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7. Maintenance;Repairs; UƟlity InstallaƟons;Trade Fixturesand AlteraƟons.

7.1 Lessee's ObligaƟons.
(a) In General. Subjecttothe provisionsof Paragraph2.2 (CondiƟon), 2.3(Compliance), 6.3(Lessee's CompliancewithApplicable Requirements),7.2 (Lessor's ObligaƟons), 9(Damage or DestrucƟon),and 14(CondemnaƟon), Lesseeshall, atLessee'ssole expense,keep thePremises, UƟlity InstallaƟons (intended for Lessee'sexclusive use,no maƩerwherelocated), and AlteraƟons ingood order, condiƟonand repair(whether ornotthe porƟonof thePremisesrequiring repairs,or themeans ofrepairing thesame,are reasonablyor readilyaccessible toLessee,and whetheror nottheneed forsuch repairsoccursas aresult ofLessee's use,any prioruse, theelements ortheage ofsuch porƟonof thePremises),including, butnot limitedto,all equipmentor faciliƟes,suchas plumbing,HVAC equipment, electrical, lighƟng faciliƟes, boilers, pressurevessels, ﬁre protecƟon system, ﬁxtures,walls (interiorandexterior), foundaƟons,ceilings, roofs,roofdrainage systems, ﬂoors,windows, doors,plate glass,skylights,landscaping, driveways,parking lots,fences, retainingwalls,signs, sidewalksand parkwayslocatedin, on,or adjacentto thePremises. Lessee, inkeepingthe Premisesin goodorder, condiƟonandrepair, shallexercise andperformgood maintenance pracƟces, speciﬁcally includingthe procurementand maintenanceof theservicecontracts requiredby Paragraph7.1(b) below. Lessee's obligaƟonsshall includerestoraƟons,replacements orrenewals whennecessary tokeep thePremisesand allimprovements thereonor apartthereof ingood order,c ondiƟonand stateof repair. Lessee shall,during theterm ofthis Lease,keep theexterior appearanceofthe Buildingin a ﬁrst-class condiƟon(including,e.g. graﬃƟremoval) consistentwiththe exteriorappearance ofothersimilar faciliƟesof comparableage andsizein thevicinity, including,when necessary,theexterior repainƟngof theBuilding. (b) ServiceContracts. Lessee shall,atLessee's soleexpense, procureandmaintain contracts,with copiesto Lessor,incustomary formand substancefor, andwith contractorsspecializing andexperiencedin themaintenance ofthe followingequipmentand improvements,if any,ifand wheninstalled onthePremises: (i) HVACequipment, (ii)boiler, andpressurevessels, (iii) ﬁre exƟnguishing systems, includingﬁrealarm and/orsmoke detecƟon,(iv)landscaping and irrigaƟon systems, (v)roof coveringand drains,and(vi) clariﬁers. However,Lessor reservestheright, uponno Ɵce toLessee,to procureand maintainanyor allof suchservice contracts, and Lesseeshall reimburseLessor,upon demand,for thecost thereof. (c) Failureto Perform. IfLesseefails toperform Lessee's obligaƟons underthisParagraph 7.1,Lessor mayenterupon thePremises aŌer10days' prior wriƩen noƟce toLessee (exceptinthe caseof anemergency, inwhichcase no noƟce shallberequired), performsuch obligaƟonsonLessee's behalf,and putthe Premisesin goodorder, condiƟonandrepair, andLessee shallpromptly paytoLessor asum equalto115% ofthe costthereof. (d) Replacement. Subjectto Lessee's indemniﬁcaƟonof Lessoras setforthin Paragraph8.7 below,and withoutrelievingLessee ofliability resulƟngfrom Lessee'sfailure toexercise andperformgood maintenance pracƟces, ifan itemdescribedin Paragraph7.1(b) cannotberepaired otherthan atacost whichis inexcess of50% ofthe costofreplacing suchitem, thensuch itemshallbe replacedby Lessor,andthe costthereof shallbeprorated betweenthe ParƟesand Lesseeshallonly beobligated topay, eachmonthduring theremainder ofthe termofthis Leaseor anyextensionthereof, onthe dateonwhich BaseRent isdue, anamountequal to theproduct of mulƟplying thecostof suchreplacement bya fracƟon,thenumerator ofwhich isone,and thedenominator ofwhichis 144(i.e. 1/144thof thecostper month). Lesseeshall payIntereston the unamorƟzed balancebut mayprepayits obligaƟonat anyƟme.

7.2 Lessor's ObligaƟons. Subjectto theprovisionsof Paragraphs2.2 (CondiƟon),2.3(Compliance), 9(Damage or DestrucƟon)and 14(CondemnaƟon), itis intendedby the ParƟes heretothatLessor haveno obligaƟon,in anymannerwhatsoever, torepair andmaintainthe Premises,or theequipmenttherein, allof which obligaƟonsare intendedto bethatof theLessee. It isthe intenƟon ofthe ParƟesthatthe termsof thisLeasegovern the respecƟve obligaƟons of theParƟesas to maintenanceand repairof thePremises.

7.3 UƟlity InstallaƟons; Trade Fixtures;AlteraƟons.
(a) DeﬁniƟons. The term"UƟlity InstallaƟons" refersto allﬂoor andwindowcoverings, airand/or vacuumlines,power panels,electrical distribuƟon, securityand ﬁre protecƟon systems, communicaƟoncabling, lighƟng ﬁxtures, HVACequipment, plumbing,andfencing inor onthePremises. The term" Trade Fixtures"shall meanLessee's machineryandequipment thatcan beremoved withoutdoingmaterial damageto thePremises. Theterm "AlteraƟons"shallmean any modiﬁcaƟonof theimprovements, otherthan UƟlity InstallaƟons or TradeFixtures, whetherbya ddiƟon or deleƟon. "LesseeOwned AlteraƟonsand/or UƟlity InstallaƟons"are deﬁnedas AlteraƟonsand/or UƟlity InstallaƟons made byLessee thatarenot yetowned byLessorpursuant toParagraph 7.4(a). (b) Consent. Lesseeshall notmakeany AlteraƟonsor UƟlity InstallaƟonsto thePremises withoutLessor's priorwriƩenconsent. Lessee may,however, makenon-structural AlteraƟonsor UƟlity InstallaƟonsto theinterior ofthe Premises(excludingthe roof)without suchconsentbut upon noƟce toLessor,as longas theyare notvisible fromtheoutside, donot involvepuncturing, relocaƟngorremoving theroof orany exisƟng walls,will not aﬀectthe electrical,plumbing, HVAC, and/orlife safetysystems, donottrigger therequirement for addiƟonal modiﬁcaƟons and/orimprovements tothe Premises resulƟngfrom ApplicableRequirements, suchas compliancewith Title24,and the cumulaƟve costthereof duringthisLease asextended doesnotexceed asum equalto3 month'sBase Rentin theaggregate ora sumequal toonemonth's BaseRent inany oneyear. Notwithstandingthe foregoing,Lesseeshall notmake orpermitany roof penetraƟons and/orinstall anythingon theroof withouttheprior wriƩenapproval ofLessor. Lessormay, asa precondiƟonto granƟng suchapproval, requireLesseeto uƟlizea contractor chosenand/or approvedby Lessor. AnyAlteraƟonsor UƟlity InstallaƟons thatLesseeshall desireto makeandwhich requirethe consentofthe Lessorshall be presentedto Lessorin wriƩenformwith detailedplans. Consent shallbedeemed condiƟonedupon Lessee's: (i) acquiringall applicablegovernmentalpermits, (ii) furnishingLessor withcopies ofboththe permitsand theplans and speciﬁcaƟonsprior tocommencement ofthework, and(iii) compliancewithall condiƟonsof said permitsand otherApplicable Requirementsina promptand expediƟousmanner. AnyAlteraƟons or UƟlity InstallaƟonsshallbe performedin aworkmanlikemanner withgood and suﬃcient materials. Lessee shallpromptly uponcompleƟon furnishLessorwith as-builtplans and speciﬁcaƟons. Forwork whichcostsan amountin excessof onemonth's BaseRent,Lessor may condiƟon itsconsent uponLesseeproviding alien and compleƟonbond inan amountequalto 150%of the esƟmated costof such AlteraƟon or UƟlity InstallaƟon and/orupon Lessee's posƟng an addiƟonal Security Depositwith Lessor. (c) Liens;Bonds . Lessee shallpay,when due,all claimsfor laborormaterials furnishedor allegedtohave beenfurnished toorfor Lesseeat orfor useon thePremises, whichclaims areormay besecured byany mechanic'sormaterialmen's lienagainst thePremisesor anyinterest therein. Lessee shallgive Lessornot lessthan 10days noƟcepriorto thecommencement ofany workin,on orabout thePremises,and Lessorshall havetheright topost noƟcesof non-responsibility. If Lesseeshall contestthe validityofany suchlien, claimor demand,thenLessee shall,at itssoleexpense defendand protectitself,Lessor andthe Premisesagainst the sameand shallpay and saƟsfyany suchadverse judgmentthat mayberendered thereonbefore theenforcementthereof. If Lessorshallrequire, Lesseeshall furnish asurety bondin anamountequal to150% ofthe amountofsuch contestedlien, claimordemand, indemnifyingLessor againstliabilityfor thesame. If Lessorelects to parƟcipate inany such acƟon,Lessee shallpay Lessor'saƩorneys' feesandcosts.

7.4 Ownership; Removal;Surrender; andRestoraƟon.
(a) Ownership. Subject toLessor'sright torequire removalor electownershipas hereinaŌerprovided, allAlteraƟonsand UƟlity InstallaƟons madeby Lesseeshall bethe propertyofLessee, butconsidered apart ofthePremises. Lessor may,atany Ɵme,elect inwriƟngto bethe ownerof allorany speciﬁedpart of
theLessee Owned AlteraƟons and UƟlity InstallaƟons. Unless otherwiseinstructed perparagraph7.4(b) hereof,all LesseeOwned AlteraƟons and UƟlity InstallaƟons shall,at the expiraƟon or terminaƟonof thisLease, becomethe propertyofLessor andbe surrenderedbyLessee withthe Premises. (b) Removal. Bydelivery toLesseeof wriƩen noƟce fromLessornot earlierthan 90and notlaterthan 30days priortothe endof thetermof thisLease, Lessormay requirethat anyorall LesseeOwned AlteraƟonsor UƟlity InstallaƟonsbe removedby theexpiraƟonor terminaƟonof thisLease. Lessormay requirethe removalat any Ɵme ofallor anypart ofany LesseeOwned AlteraƟons or UƟlity InstallaƟons madewithout therequired consent.

DRAFT - Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.

REVISED – Administrative changes made since original posting on 3/10/2023 shown in blueline. ________ ________
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(c) Surrender; RestoraƟon. Lessee shallsurrenderthe Premisesby the ExpiraƟon Dateorany earlier terminaƟon date,withall ofthe improvements, partsand surfacesthereof broomcleanand freeof debris,and ingood operaƟng order, condiƟon andstateof repair,ordinary wearandtear excepted. "Ordinary wearand tear"shall notincludeany damageor deterioraƟonthat wouldhavebeen preventedby goodmaintenance pracƟce. Notwithstanding theforegoingand the provisionsof Paragraph7.1(a), iftheLessee occupiesthe Premisesfor 12monthsor less,then Lesseeshallsurrender thePremises inthesame condiƟonas delivered toLessee onthe StartDatewith NOallowance forordinary wearandtear. Lessee shallrepairany damageoccasioned bythe installaƟon, maintenanceor removalof TradeFixtures, Lesseeowned AlteraƟonsand/or UƟlity InstallaƟons, furnishings, andequipment aswellas theremoval ofanystorage tankinstalled byorfor Lessee.

Lesseeshall alsocompletely removefromthe Premisesany andall HazardousSubstancesbrought ontothe Premisesbyor forLessee, oranythird party(except HazardousSubstances whichwere depositedviaunderground migraƟonfrom areasoutside ofthePremises) tothe level speciﬁedin ApplicableRequirements. Trade Fixturesshall remainthe propertyofLessee andshall beremoved byLessee. Anypersonal propertyofLessee notremoved onorbefore the ExpiraƟon Dateor any earlier terminaƟon dateshall bedeemedto havebeen abandonedby Lesseeandmay bedisposed oforretained byLessor asLessormay desire. Thefailure byLessee to Ɵmely vacatethe Premisespursuantto thisParagraph 7.4(c)without theexpress wriƩen consentof Lessorshall consƟtute aholdover undertheprovisions of Paragraph26 below.

8. Insurance;Indemnity.

8.1 Payment ForInsurance. Lessee shallpayfor allinsurance requiredunderParagraph 8except totheextent ofthe cost aƩributable toliabilityinsurance carriedby Lessorunder Paragraph8.2(b)in excessof $2,000,000per occurrence. Premiums forpolicy periodscommencingprior toor extendingbeyondthe Lease termshall beprorated tocorrespondto theLease term. Paymentshallbe madeby LesseetoLessor within10 daysfollowingreceipt ofan invoice.

8.2 Liability Insurance.
(a) Carried byLessee. Lesseeshall obtainand keepin forceaCommercial GeneralLiability policyofinsurance protecƟngLessee andLessoras an addiƟonalinsured againstclaims forbodilyinjury, personalinjury andproperty damagebasedupon orarising outofthe ownership,use, occupancyormaintenance of thePremises andall areasappurtenantthereto. Such insuranceshall beonan occurrencebasis providingsinglelimit coveragein anamountnot lessthan $1,000,000 peroccurrence withan annualaggregateof notless than$2,000,000. Lesseeshall addLessor asan addiƟonal insuredby meansofan endorsementat leastas broad asthe InsuranceService OrganizaƟon's "AddiƟonalInsured-Managers orLessors ofPremises" Endorsement. The policyshall notcontainany intra-insuredexclusions asbetween insuredpersons or organizaƟons,but shallinclude coveragefor liabilityassumedunder thisLease asan" insured contract"for theperformanceof Lessee's indemnity obligaƟons underthis Lease. The limitsof saidinsurance shallnot,however, limitthe liabilityofLessee norrelieve Lesseeofany obligaƟonhereunder.

Lesseeshall providean endorsementonits liabilitypolicy(ies) whichprovides thatitsinsurance shallbe primarytoand notcontributory withanysimilar insurance carriedby Lessor,whose insuranceshallbe consideredexcess insuranceonly. (b) Carriedby Lessor. Lessorshallmaintain liabilityinsurance asdescribedin Paragraph8.2(a), in addiƟon to,andnot inlieu of,theinsurance requiredto bemaintained byLessee. Lesseeshall notbe namedas an addiƟonalinsured therein.

8.3 Property Insurance- Building,Improvements andRentalValue. (a) Building andImprovements. TheInsuring Partyshall obtainand keepinforce apolicy orpoliciesin thename ofLessor,with losspayable toLessor, anyground-lessor, andto anyLenderinsuring lossor damageto thePremises. Theamount ofsuchinsurance shallbe equaltothe fullinsurable replacementcost of
thePremises, asthe sameshallexist from Ɵme to Ɵme, ortheamount requiredby anyLender,but inno eventmorethan thecommercially reasonableand available insurablevalue thereof. LesseeOwned AlteraƟons and UƟlity InstallaƟons, Trade Fixtures,andLessee's personalproperty shallbeinsured byLessee notbyLessor. If thecoverage isavailable andcommerciallyappropriate, suchpolicy orpolicies shallinsureagainst allrisks ofdirectphysical lossor damage(exceptthe perilsof ﬂood and/orearthquake unlessrequired byaLender), includingcoverage fordebris removalandthe enforcementof anyApplicableRequirements requiringthe upgrading, demoliƟon, reconstrucƟon orreplacement ofany porƟon ofthe Premisesas theresultof acovered loss. Said policyor policiesshallalso containan agreed valuaƟon provisionin lieuof anycoinsuranceclause, waiverof subrogaƟon,and inﬂaƟonguard protecƟon causingan increaseinthe annualproperty insurancecoverage amountby afactor ofnotless thanthe adjustedU.S. DepartmentofLabor ConsumerPrice IndexforAll UrbanConsumers forthecity nearestto wherethe Premises arelocated. If suchinsurancecoverage hasa deducƟbleclause, thededucƟbleamount shallnot exceed$5,000per occurrence,and Lesseeshallbe liablefor such deducƟbleamount inthe eventofan InsuredLoss.
(b) RentalValue. The InsuringPartyshall obtainand keepinforce apolicy orpolicies inthename ofLessor withlosspayable toLessor andanyLender, insuringthe lossof thefullRent forone yearwith anextendedperiod ofindemnity foran addiƟonal 180days ("RentalValueinsurance"). Said insuranceshall contain anagreed valuaƟonprovision inlieuof anycoinsurance clause,and theamountof coverageshall beadjustedannually to reﬂect theprojectedRent otherwisepayable byLessee, forthe next12month period. Lesseeshall beliablefor any deducƟble amountinthe eventof suchloss. (c) AdjacentPremises. If thePremisesare partof alarger building,orof agroup ofbuildingsowned byLessor whichareadjacent tothe Premises,the Lesseeshall payfor anyincreasein thepremiums forthe propertyinsuranceof suchbuilding orbuildingsif saidincrease iscausedby Lessee'sacts, omissions,use or occupancyof thePremises.

8.4 Lessee's Property;Business InterrupƟonInsurance; Worker'sCompensaƟon Insurance. (a) Property Damage. Lesseeshallobtain andmaintain insurancecoverage onallof Lessee'spersonal property,TradeFixtures, andLessee Owned AlteraƟonsand UƟlity InstallaƟons. Suchinsurance shallbe fullreplacement costcoveragewith a deducƟble ofnotto exceed$1,000 peroccurrence. Theproceeds fromany suchinsurance shallbeused byLessee forthe replacementofpersonal property,Trade FixturesandLessee Owned AlteraƟons and UƟlity InstallaƟons. (b) Business InterrupƟon. Lessee shallobtainand maintainloss ofincomeand extraexpense insurancein amountsaswill reimburseLessee fordirector indirectloss ofearnings aƩributabletoall perilscommonly insuredagainst byprudentlessees inthe businessofLessee or aƩributable to prevenƟonof accessto the Premisesas aresult ofsuchperils.
(c) Worker's CompensaƟon Insurance. Lesseeshallobtain andmaintain Worker's CompensaƟon Insuranceinsuch amountas mayberequired by ApplicableRequirements. Such policyshallinclude a'Waiver of SubrogaƟon' endorsement. Lessee shallprovide Lessorwitha copyof suchendorsementalong with the cerƟﬁcate ofinsurance orcopyof thepolicy requiredby paragraph8.5. (d) No RepresentaƟon ofAdequate Coverage. Lessor makesno representaƟonthatthe limitsor formsof coverageofinsurance speciﬁedherein are adequateto coverLessee's property,business operaƟons or obligaƟons underthis Lease.

8.5 Insurance Policies. Insurancerequired hereinshallbe bycompanies maintainingduringthe policyterm a"GeneralPolicyholders RaƟng"of atleast A-,VII, asset forthin themostcurrent issueof "Best'sInsurance Guide",orsuch other raƟng asmaybe requiredby aLender. Lesseeshall notdo orpermitto bedone anythingwhich invalidatesthe requiredinsurancepolicies. Lessee shall,prior totheStart Date,deliver toLessor cerƟﬁed copiesof policiesofsuch insuranceor cerƟﬁcateswith copiesof therequiredendorsements evidencingthe existenceand amountsofthe requiredinsurance. Nosuch policyshall becancelableor subject to modiﬁcaƟon except aŌer 30daysprior wriƩen noƟce toLessor. Lesseeshall, atleast 10daysprior tothe expiraƟonofsuch policies,furnish Lessorwith evidenceof renewalsor "insurancebinders" evidencingrenewalthereof, orLessor mayincrease hisliabilityinsurance coverageand chargethecost thereofto Lessee,which amountshall bepayable byLesseeto Lessorupon demand. Suchpoliciesshall befor atermof atleast oneyear,or thelength ofthe remainingtermof thisLease, whicheveris less. IfeitherParty shallfail toprocure andmaintainthe insurancerequired tobecarried byit, theotherParty may,but shallnot berequiredto, procure DRAFT - Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.

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andmaintain thesame.

8.6 Waiver ofSubrogaƟon. Without aﬀecƟnganyother rightsor remedies,Lesseeand Lessoreach herebyreleaseand relievethe other,and waivetheir enƟre rightto recoverdamages againsttheother, forloss ofor damagetoits propertyarising outofor incidentto theperilsrequired tobe insuredagainst herein. The eﬀectof suchreleases andwaiversis notlimited bythe amountofinsurance carriedor required,orby any deducƟbles applicablehereto. The ParƟes agreeto have their respecƟve propertydamage insurancecarrierswaive anyright to subrogaƟon thatsuchcompanies mayhave againstLessoror Lessee,as thecasemay be,so longas theinsurance isnotinvalidated thereby.

8.7 Indemnity. Except forLessor's grossnegligenceor willfulmisconduct, Lesseeshallindemnify, protect,defend andholdharmless thePremises, Lessorand itsagents, Lessor'smaster orgroundlessor, partnersand Lenders,from andagainstany andall claims,lossof rentsand/or damages,liens,judgments, penalƟes, aƩorneys'and consultants'fees, expensesand/or liabiliƟes arisingout of,involving, orinco nnecƟon with,a Breachofthe Leaseby Lesseeand/orthe useand/or occupancyof thePremises and/orProjectby Lesseeand/or byLessee's employees,contractorsor invitees. Ifany acƟon orproceeding isbroughtagainst Lessorby reasonof anyof theforegoing maƩers, Lesseeshall upon noƟce defendthesame atLessee's expensebycounsel reasonably saƟsfactory toLessorand Lessorshall cooperatewith Lesseein suchdefense. Lessorneed nothave ﬁrstpaidany suchclaim inorderto bedefended or indemniﬁed.

8.8 ExempƟon ofLessor andits AgentsfromLiability . Notwithstanding thenegligenceor breachof thisLeaseby Lessoror itsagents, neitherLessornor its agentsshall beliable underanycircumstances for:(i) injuryor damagetothe personor goods,wares,merchandise orother propertyofLessee, Lessee'semployees, contractors,invitees, customers,or anyotherperson inor aboutthe Premises,whethersuch damageor injuryiscaused byor resultsfrom ﬁre, steam,electricity, gas, wateror rain,indoor airquality,the presenceof moldor fromthebreakage, leakage, obstrucƟon orotherdefects ofpipes, ﬁresprinklers,wires, appliances,plumbing, HVACor lighƟng ﬁxtures, orfromany othercause, whetherthe saidinjuryor damageresults from condiƟonsarising uponthe Premisesorupon other porƟons ofthe buildingof whichthe Premisesarea part,or fromother sourcesorplaces, (ii)any damagesarisingfrom anyact orneglectof anyother tenantof Lessororfrom the failureof Lessoror itsagentsto enforcethe provisionsof anyotherlease inthe Project,or(iii) injuryto Lessee'sbusinessor forany lossof incomeor proﬁt therefrom.

Instead,it isintended thatLessee'ssole recoursein theevent ofsuchdamages orinjury beto ﬁle aclaim ontheinsurance policy(ies)that Lesseeis requiredto maintainpursuant tothe provisionsofparagraph 8.

8.9 Failure toProvide Insurance. Lesseeacknowledgesthat anyfailure onitspart toobtain ormaintainthe insurancerequired hereinwill exposeLessorto risksand potenƟallycause Lessortoincur costsnot contemplatedby thisLease,the extentof whichwillbe extremely diﬃcult toascertain. Accordingly,for anymonth or porƟon thereofthat Lesseedoesnot maintainthe requiredinsurance and/ordoesnot provideLessor withtherequired bindersor cerƟﬁcatesevidencingthe existenceof therequired insurance,theBase Rentshall be automaƟcally increased,withoutany requirementfor noƟcetoLessee, byan amountequalto 10%of the then exisƟng BaseRent or$100,whichever isgreater. The parƟesagreethat suchincrease inBaseRent representsfair andreasonable compensaƟon forthe addiƟonalrisk/costs thatLessor willincurby reasonof Lessee'sfailure tomaintainthe requiredinsurance. Suchincrease inBase Rentshallin noevent consƟtutea waiverof Lessee'sDefault orBreachwith respectto thefailure tomaintainsuch insurance,prevent theexerciseof anyof theotherrights andremedies granted hereunder,nor relieveLessee ofits obligaƟon tomaintain theinsurance speciﬁedinthis Lease.

9. Damageor DestrucƟon.

9.1 DeﬁniƟons.
(a) " Premises ParƟalDamage" shallmeandamage or destrucƟon tothe improvementsonthe Premises,other thanLesseeOwned AlteraƟonsand UƟlity
InstallaƟons,which canreasonably berepairedin 6months orless fromthedate ofthe damageor destrucƟon. Lessor shallnoƟfyLessee inwriƟng within30 days fromthe dateof thedamageor destrucƟonas towhether ornotthe damageis ParƟalorTotal. (b) " PremisesTotal DestrucƟon"shall meandamageor destrucƟonto thePremises,other thanLessee Owned AlteraƟons and UƟlity InstallaƟons and TradeFixtures, whichcannot reasonablyberepaired in6 monthsor lessfromthe dateof thedamageor destrucƟon. Lessorshall noƟfy Lesseein wriƟngwithin 30 daysfrom thedate ofthedamage or destrucƟon asto whetherornot thedamage is ParƟalor Total. (c) " InsuredLoss" shallmean damageor destrucƟon toimprovements onthe Premises,otherthan LesseeOwned AlteraƟonsand UƟlity InstallaƟons and TradeFixtures, whichwas causedbyan eventrequired tobe coveredbythe insurancedescribed inParagraph8.3(a), irrespecƟveof anydeducƟbleamounts or coveragelimits involved.
(d) " ReplacementCost" shallmean thecostto repairor rebuildtheimprovements ownedby Lessorat the Ɵmeof theoccurrence totheir condiƟon exisƟngimmediately priorthereto, includingdemoliƟon,debris removaland upgradingrequired bythe operaƟon ofApplicable Requirements,andwithout deducƟon for depreciaƟon.
(e) " Hazardous SubstanceCondiƟon"shall meanthe occurrenceor discoveryofa condiƟoninvolving thepresenceof, ora contaminaƟonby,a HazardousSubstance, in,on, orunderthe Premiseswhich requires restoraƟon.

9.2 ParƟal Damage- InsuredLoss. Ifa Premises ParƟal Damagethatis anInsured Lossoccurs,then Lessorshall, atLessor's expense,repairsuch damage(but notLessee's TradeFixtures orLesseeOwned AlteraƟonsand UƟlity InstallaƟons) assoonas reasonablypossible andthisLease shall conƟnue infullforce and eﬀect; provided,however, thatLessee shall,atLessor's elecƟon,make therepair ofanydamage ordes trucƟon thetotalcost torepair ofwhichis $10,000or less,and, insuch event,Lessor shallmake anyapplicableinsurance proceedsavailable toLessee onareasonable basisfor thatpurpose. Notwithstandingthe foregoing,ifthe required insurancewas notin forceorthe insuranceproceeds arenot suﬃcientto eﬀect suchrepair, theInsuringParty shallpromptly contributetheshortage inproceeds (exceptas tothe deducƟblewhichis Lessee'sresponsibility) asand whenrequiredto completesaid repairs. Inthe event,however,such shortagewas dueto thefact that,by reasonof theuniquenature ofthe improvements,full replacementcostinsurance coveragewas notcommerciallyreasonable andavailable, Lessorshallhave no obligaƟon topay fortheshortage ininsurance proceedsor tofullyrestore theunique aspectsofthe Premisesunless LesseeprovidesLessor withthe fundsto cover same,or adequateassurance thereof,within10 daysfollowing receiptof wriƩen noƟceof suchshortage andrequesttherefor. If Lessorreceivessaid fundsor adequateassurance thereofwithin said10day period,the partyresponsible formakingthe repairsshall completethemas soonas reasonablypossibleand thisLease shallremain infull forceand eﬀect. If suchfunds orassuranceare notreceived, Lessormaynevertheless electby wriƩen noƟceto Lesseewithin 10days thereaŌer to: (i)make such restoraƟonand repairas iscommercially reasonablewithLessor payingany shortageinproceeds, inwhich casethisLease shallremain infull force and eﬀect, or(ii) havethisLease terminate30 days thereaŌer. Lesseeshall notbe enƟtledtoreimbursement ofany fundscontributedby Lesseeto repairany such damageor destrucƟon. Premises ParƟalDamage dueto ﬂoodor earthquakeshallbe subjectto Paragraph9.3,notwithstanding thatthere maybesome insurance coverage,but thenet proceedsofany suchinsurance shallbe madeavailablefor therepairs ifmadeby eitherParty.

9.3 ParƟal Damage- UninsuredLoss. Ifa Premises ParƟal Damagethatis notan InsuredLossoccurs, unlesscaused bya negligentorwillful actof Lessee(in whichevent Lesseeshall maketherepairs atLessee's expense),Lessor mayeither: (i)repair suchdamageas soonas reasonablypossibleat Lessor'sexpense, inwhich eventthis Leaseshall conƟnueinfull forceand eﬀect,or (ii)terminatethis Leaseby givingw riƩen noƟce toLessee within30days aŌerreceipt byLessor ofknowledge ofthe occurrenceof suchdamage. Such terminaƟon shallbe eﬀecƟve60days followingthe dateofsuch noƟce. Intheevent Lessorelects toterminate thisLease, Lesseeshall havethe rightwithin10 days aŌer receiptof the terminaƟon noƟce togive wriƩennoƟceto Lessorof Lessee'scommitmentto payfor therepair ofsuch damagewithout reimbursementfrom Lessor. Lessee shallprovide Lessorwith saidfundsor saƟsfactoryassurance thereofwithin30 days aŌer makingsuch commitment. Insuch eventthisLease shall conƟnue infull forceand eﬀect, andLessor shallproceedto makesuch repairsassoon asreasonably possible aŌer the DRAFT - Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.

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requiredfunds areavailable. IfLessee doesnot makethe requiredcommitment,this Leaseshall terminateasof thedate speciﬁedinthe terminaƟon noƟce.

9.4 Total DestrucƟon. Notwithstandingany otherprovisionhereof, ifa PremisesTotal DestrucƟon occurs,this Leaseshallterminate 60days followingsuch DestrucƟon. Ifthe damageor destrucƟon wascaused bythe grossnegligenceor willfulmisconduct ofLessee,Lessor shallhave therightto recoverLessor's damages fromLessee, exceptas providedinParagraph 8.6.

9.5 Damage NearEnd ofTerm. Ifat any Ɵme duringthelast 6months ofthisLease thereis damagefor whichthecost torepair exceedsonemonth's Base Rent,whether ornot anInsuredLoss, Lessormay terminatethis Lease eﬀecƟve60 daysfollowing thedateof occurrenceof suchdamageby givinga wriƩen terminaƟon noƟce toLessee within30days aŌerthe dateof occurrenceofsuch damage. Notwithstandingtheforegoing, ifLessee atthat Ɵme hasan exercisable opƟonto extendthis Leaseorto purchasethe Premises,then Lesseemaypreserve thisLease by,(a)exercising such opƟon and(b)providing Lessorwith anyshortage ininsurance proceeds(or adequateassurancethereof) neededto makethe repairsonor beforethe earlierof(i) thedate whichis10 days aŌer Lessee'sreceipt of Lessor's wriƩen noƟce purporƟng toterminatethis Lease,or (ii)the daypriorto thedate uponwhichsuch opƟonexpires. IfLessee dulyexercises such opƟon during suchperiod andprovides Lessorwithfunds (oradequate assurancethereof) tocoverany shortagein insuranceproceeds,Lessor shall,at Lessor'scommercially reasonableexpense, repairsuch damageassoon asreasonably possibleand thisLeaseshall conƟnuein fullforceand eﬀect. IfLesseefails toexercise such opƟon and providesuch fundsor assuranceduringsuch period,then thisLease shallterminateon thedate spe ciﬁedinthe terminaƟon noƟce andLessee's opƟon shallbe exƟnguished.

9.6 Abatement ofRent; Lessee'sRemedies.
(a) Abatement. In theeventof Premises ParƟal Damageor PremisesTotal DestrucƟon ora HazardousSubstance CondiƟon forwhich Lesseeisnot responsibleunder thisLease, theRentpayable byLessee forthe periodrequiredfor therepair, r emediaƟonor restoraƟon ofsuch damageshallbe abatedin proporƟonto thedegree towhichLessee's useof thePremises isimpaired,but notto exceedtheproceeds receivedfrom theRentalValue insurance. Allother obligaƟonsof Lesseehereunder shallbeperformed byLessee, andLessor shallhaveno liabilityfor anysuchdamage, destrucƟon, remediaƟon, repairor restoraƟon exceptas providedherein.
(b) Remedies. IfLessor isobligatedto repairor restorethePremises anddoes notcommence, ina substanƟal andmeaningful way,suchrepair or restoraƟonwithin 90days aŌersuch obligaƟon shallaccrue, Lesseemay, atany Ɵme priorto thecommencementof suchrepair or restoraƟon,give wriƩen noƟce to Lessorand toany Lendersofwhich Lesseehas actual noƟce, ofLessee's elecƟon toterminate thisLeaseon adate notlessthan 60days followingthe givingofsuch noƟce. IfLessee givessuch noƟce andsuch repairor restoraƟonisnot commencedwithin 30days thereaŌer ,thisLease shallterminateas ofthe date speciﬁed insaid noƟce. Ifthe repairor restoraƟoniscommenced withinsuch 30days,this Leaseshall conƟnueinfull forceand eﬀect. "Commence" shallmean eitherthe uncondiƟonal authorizaƟon ofthe preparaƟonofthe requiredplans, orthe beginningofthe actualwork onthePremises, whichever ﬁrst occurs.

9.7 TerminaƟon;AdvancePayments. Upon terminaƟonofthis Leasepursuant toParagraph6.2(g) orParagraph 9,anequitable adjustmentshall bemade concerningadvance BaseRent andanyother advancepayments madeby LesseetoLessor. Lessor shall,in addiƟon, returnto Lesseesomuch ofLessee's Security Depositas hasnot been,oris notthen requiredto be,usedby Lessor.

10. Real PropertyTaxes.

10.1 DeﬁniƟon. Asused herein,the term"RealProperty Taxes"shall includeanyform ofassessment; realestate,general, special,ordinary orextraordinary, or rentallevy ortax (otherthaninheritance, personalincome orestate taxes);improvementbond; and/orlicense feeimposedupon orlevied againstanylegal or equitableinterest ofLessor inthePremises orthe Project,Lessor's righttoother incometherefrom, and/orLessor'sbusiness ofleasing, byanyauthority havingthe director indirectpower totaxand wherethe fundsare generatedwithreference tothe Buildingaddress. RealProperty Taxesshallalso includeany tax,fee, levy, assessmentor charge,or anyincreasetherein: (i)imposed byreason ofeventsoccurring duringthe termofthis Lease,including butnotlimited to,a changein the ownershipof thePremises, and(ii)levied orassessed onmachinery orequipmentprovided byLessor toLesseepursuant tothis Lease.

10.2 Payment ofTaxes. In addiƟon toBaseRent, Lesseeshall paytoLessor anamount equaltothe RealProperty Taxinstallment dueatleast 20days priorto theapplicable delinquency date. Ifany suchinstallment shallcover anyperiodof Ɵmeprior toor aŌer the expiraƟon or terminaƟonof thisLease, Lessee'sshare of suchinstallment shallbe prorated. In theevent Lesseeincurs alatecharge onany Rentpayment,Lessor may esƟmate thecurrentReal PropertyTaxes, andrequire thatsuch taxesbe paidinadvance toLessor byLessee monthlyinadvance withthe paymentofthe BaseRent. Suchmonthly paymentsshall bean amountequalto theamount ofthe esƟmatedinstallmentof taxesdivided bythe numberofmonths remainingbefore themonthin whichsaid installmentbecomesdelinquent. When theactual amountof theapplicabletax billis known,the amountofsuch equalmonthly advancepaymentsshall beadjusted asrequiredto providethe fundsneeded topay theapplicable taxes. If theamount collectedby Lessorisinsuﬃcient topay suchRealProperty Taxeswhen due,Lesseeshall payLessor, upon demand,such addiƟonalsum asis necessary. Advance paymentsmay beintermingled withothermoneys ofLessor andshallnot bearinterest. Inthe eventof aBreach byLesseein theperformance ofits obligaƟonsunderthis Lease,then anysuch advancepaymentsmay betreated byLessoras an addiƟonal SecurityDeposit.

10.3 Joint Assessment. If thePremises arenotseparately assessed,Lessee's liabilityshallbe anequitable proporƟonofthe RealProperty Taxesfor allofthe landand improvementsincluded withinthetax parcelassessed, such proporƟon tobeconclusively determinedby Lessorfromthe respecƟve valuaƟons assignedin theassessor's worksheets orsuchother informaƟonas maybe reasonablyavailable.

10.4 Personal PropertyTaxes. Lesseeshall pay,priorto delinquency,all taxesassessedagainst andlevied uponLesseeOwned AlteraƟons, UƟlity InstallaƟons, TradeFixtures, furnishings,equipment andallpersonal propertyof Lessee. Whenpossible,Lessee shallcause itsLesseeOwned AlteraƟonsand UƟlity InstallaƟons, TradeFixtures, furnishings,equipment andallother personalproperty tobe assessedandbilled separatelyfrom therealproperty ofLessor. Ifany ofLessee's said propertyshall beassessed withLessor'sreal property,Lessee shallpay Lessorthetaxes aƩributableto Lessee'spropertywithin 10days aŌerreceiptof a wriƩen statement seƫng forththe taxesapplicableto Lessee'sproperty.

11. UƟliƟes andServices.

11.1 Lessee shallpayfor allwater, gas,heat,light, power,telephone, trashdisposaland other uƟliƟes andservicessupplied tothe Premises,together withany taxesthereon. If anysuchservices arenot separatelymetered orbilledto Lessee,Lessee shallpaya reasonable proporƟon, tobedetermined byLessor, ofall charges jointlymetered orbilled. Thereshall beno abatementof rentandLessor shallnot beliablein anyrespect whatsoeverforthe inadequacy,stoppage, interrupƟonor disconƟnuanceof anyuƟlity orservicedue toriot, strike,labor dispute,breakdown,accident, repairor othercausebeyond Lessor'sreasonable controlorin cooperaƟonwith governmentalrequest ordirecƟons.

11.2 Within ﬁŌeendaysof Lessor's wriƩen request,Lesseeagrees todeliver toLessorsuch infor maƟon,documents and/orauthorizaƟonas Lessorneeds in orderfor Lessorto complywithnew or exisƟng ApplicableRequirements relaƟngtocommercial buildingenergy usage, raƟngs,and/or thereporƟng thereof.

12. Assignment and Subleƫng.

12.1 Lessor's ConsentRequired.
(a) Lessee shallnot voluntarilyorby operaƟonof lawassign, transfer,mortgageor encumber(collecƟvely, "assignorassignment ") orsublet allorany partof Lessee'sinterest inthisLease orin thePremises withoutLessor'sprior wriƩenconsent. (b) UnlessLessee isa corporaƟonandits stockis publiclytradedon a naƟonal stockexchange, achangein thecontrol ofLesseeshall consƟtutean DRAFT - Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.

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assignmentrequiring consent. Thetransfer,on a cumulaƟve basis,of 25%ormore ofthe voƟngcontrolof Lesseeshall consƟtuteachange incontrol forthis purpose. (c) Theinvolvement ofLessee oritsassets inany transacƟon,or seriesof transacƟons (byway ofmerger,sale, acquisiƟon, ﬁnancing, transfer,leveraged buyoutor otherwise),whether ornota formalassignment or hypothecaƟon ofthisLease orLessee's assetsoccurs,which resultsor willresultin a reducƟon ofthe NetWorth ofLessee byanamount greaterthan 25%of suchNetWorth asit wasrepresentedat the Ɵme ofthe execuƟon ofthis Leaseor atthe Ɵme ofthe most recentassignment towhich Lessorhasconsented, oras itexists immediatelypriorto said transacƟon ortransacƟons consƟtuƟng such reducƟon, whicheverwasor is greater,shall beconsidered anassignmentof thisLease towhich Lessormaywithhold itsconsent. " NetWorth ofLessee" shallmeanthe networth ofLessee (excludingany guarantors)established undergenerallyaccepted accounƟngprinciples. (d) Anassignment or subleƫng withoutconsentshall, atLessor's opƟon,bea Defaultcurable aŌer noƟce perParagraph13.1(d), ora non-curableBreach withoutthe necessityof any noƟceand graceperiod. If Lessorelectsto treatsuch unapprovedassignmentor subleƫngas anon-curableBreach, Lessormay either:
(i)terminate thisLease, or(ii)upon 30days wriƩen noƟce, increasethemonthly BaseRent to110%of theBase Rentthenin eﬀect. Further,in theeventof such Breachand rentaladjustment, (i)thepurchase priceof any opƟon topurchasethe Premisesheld byLesseeshall besubject tosimilaradjustment to110% ofthe price previouslyin eﬀect,and (ii)all ﬁxed andnon- ﬁxed rentaladjustments scheduledduringthe remainderof theLeaseterm shallbe increasedto110% ofthe scheduled adjustedrent.
(e) Lessee's remedyforany breachof Paragraph12.1 byLessorshall belimited tocompensatorydamages and/or injuncƟve relief. (f) Lessor mayreasonablywithhold consentto aproposedassignment or subleƫng ifLesseeis inDefault atthe Ɵmeconsentis requested. (g) Notwithstanding theforegoing, allowinga deminimis porƟon ofthe Premises,i.e.20 squarefeet orless,to beused bya thirdpartyvendor in connecƟonwith theinstallaƟon ofavending machineor payphoneshall not consƟtutea subleƫng.

12.2 Terms andCondiƟonsApplicable toAssignment andSubleƫng. (a) Regardless ofLessor's consent,noassignment or subleƫng shall: (i)be eﬀecƟvewithoutthe express wriƩen assumpƟon bysuch assigneeor sublesseeof the obligaƟons ofLesseeunder thisLease, (ii)release Lesseeofany obligaƟonshereunder, or(iii)alter theprimary liabilityofLessee forthe payment of Rentor forthe performanceofany other obligaƟons tobe performedbyLessee. (b) Lessormay acceptRent orperformanceof Lessee's obligaƟons fromanyperson otherthan Lesseepending approvalordisapproval ofan assignment.

Neithera delayin theapprovalor disapprovalof suchassignment northeacceptance ofRent orperformanceshall consƟtutea waiverorestoppel ofLessor's rightto exerciseits remediesfor Lessee'sDefaultor Breach.
(c) Lessor'sconsent toany assignmentor subleƫng shallnot consƟtutea consenttoany subsequentassignment or subleƫng. (d) Inthe eventof anyDefaultor Breachby Lessee,Lessormay proceeddirectly againstLessee, anyGuarantorsor anyoneelse responsibleforthe performanceof Lessee's obligaƟons underthisLease, includingany assigneeor sublessee,without ﬁrst exhausƟng Lessor's remediesagainstany otherperson or enƟtyresponsible thereforto Lessor,orany securityheld byLessor. (e) Each requestforconsent toan assignmentor subleƫngshallbe in wriƟng, accompaniedbyin formaƟon relevantto Lessor's determinaƟonas tothe ﬁnancialand operaƟonalresponsibility andappropriatenessof theproposed assigneeor sublessee,includingbut notlimited totheintended useand/or required modiﬁcaƟonof thePremises, ifany,together witha feeof $500as consideraƟon forLessor's consideringandprocessing saidrequest. Lesseeagrees toprovide Lessor withsuch otheror addiƟonal informaƟonand/or documentaƟonas maybe reasonablyrequested.(See alsoParagraph 36) (f) Any assigneeof,or sublesseeunder, thisLeaseshall, byreason of accepƟngsuch assignment,entering intosuch sublease,orentering intopossession ofthe Premisesor any porƟonthereof, bedeemed tohave assumedandagreed toconform andcomplywith eachand everyterm,covenant, condiƟonand obligaƟon hereinto beobserved orperformedby Lesseeduring theterm ofsaidassignment orsublease, otherthansuch obligaƟonsas arecontraryto orinconsistent with provisionsof anassignment orsubleaseto whichLessor has speciﬁcally consentedtoin wriƟng. (g) Lessor's consentto anyassignment or subleƫngshall nottransfer totheassignee orsublessee any OpƟongranted tothe originalLessee bythisLease unlesssuch transferis speciﬁcallyconsentedto byLessor in wriƟng. (SeeParagraph 39.2)

12.3 AddiƟonal Termsand CondiƟons Applicableto Subleƫng. The followingterms andcondiƟonsshall applyto anysubleƫngby Lesseeof allor anypartof thePremises andshall bedeemedincluded inall subleasesunder thisLeasewhether ornot expresslyincorporatedtherein:
(a) Lessee herebyassigns andtransfersto Lessorall ofLessee's interestinall Rentpayable onanysublease, andLessor maycollectsuch Rentand apply sametoward Lessee's obligaƟons underthisLease; provided,however, that unƟl aBreachshall occurin theperformanceof Lessee's obligaƟons, Lesseemaycollect saidRent. In theeventthat theamount collectedby LessorexceedsLessee's thenoutstanding oblig aƟonsanysuch excessshall berefundedto Lessee. Lessorshall not,by reasonof theforegoingor anyassignment ofsuch sublease,norby reasonof the collecƟonof Rent,be deemedliableto thesublessee forany failureofLessee toperform andcomply withanyof Lessee's obligaƟons tosuch sublessee. Lessee herebyirrevocably authorizesanddirects anysuch sublessee,uponreceipt ofa wriƩen noƟce fromLessor staƟngthata Breachexists inthe performanceofLessee's obligaƟonsunder thisLease,to payto LessorallRent dueand tobecome due underthe sublease. Sublesseeshallrely uponany such noƟce fromLessorand shallpay allRentsto Lessorwithout any obligaƟonor rightto inquireas towhether suchBreach exists,notwithstanding anyclaimfrom Lesseeto thecontrary. (b) Inthe eventof aBreachby Lessee,Lessor may,atits opƟon,require sublesseeto aƩorntoLessor, inwhich eventLessorshall undertakethe obligaƟonsof thesublessor undersuchsublease fromthe Ɵmeof theexerciseof said opƟon tothe expiraƟon ofsuch sublease;provided,however, Lessorshall notbe liablefor anyprepaid rentsorsecurity depositpaid bysuch sublesseetosuch sublessoror foranyprior Defaultsor Breachesofsuch sublessor. (c) Any maƩer requiringthe consentofthe sublessorunder asublease shallalsorequire theconsent ofLessor. (d) Nosublessee shallfurther assignorsublet allor anypartof thePremises withoutLessor's prior wriƩenconsent. (e) Lessor shalldelivera copyof any noƟce ofDefaultor Breachby Lesseetothe sublessee,who shallhavethe rightto curethe DefaultofLessee within thegrace period,if any,speciﬁedin suchnoƟce. The sublesseeshallhave aright ofreimbursementand oﬀsetfrom andagainstLessee forany suchDefaults curedby thesublessee.

13. Default; Breach;Remedies.

13.1 Default; Breach. A "Default"is deﬁnedasa failureby theLesseeto complywith orperformany ofthe terms,covenants, condiƟonsorRules and RegulaƟonsunder thisLease. A"Breach" isdeﬁned asthe occurrenceofone ormore ofthefollowing Defaults,and thefailureof Lesseeto curesuch Defaultwithin anyapplicable graceperiod:
(a) The abandonmentof thePremises;the vacaƟngof thePremises priortothe expiraƟonor terminaƟonofthis Leasewithout providingacommercially reasonablelevel ofsecurity, orwherethe coverageof theproperty insurancedescribedin Paragraph8.3 isjeopardizedas aresult thereof,orwithout providing reasonableassurances tominimize potenƟalvandalism;or failureto deliverto Lessorexclusivepossession ofthe enƟrePremisesin accordanceherewith priortothe expiraƟonor terminaƟonof thisLease.
(b) Thefailure ofLessee tomakeany paymentof Rentorany SecurityDeposit requiredto bemadeby Lesseehereunder, whethertoLessor orto athird party,when due,to providereasonableevidence ofinsurance orsurety bond,orto fulﬁllany obligaƟonunderthis Leasewhich endangersorthreatens lifeor property,where suchfailure conƟnuesfora periodof 3business daysfollowing wriƩen noƟce to Lessee. THE ACCEPTANCEBY LESSOROFA PARTIALPAYMENT OF DRAFT - Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.

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RENTOR SECURITYDEPOSIT SHALLNOTCONSTITUTE AWAIVER OFANY OFLESSOR'SRIGHTS, INCLUDINGLESSOR'S RIGHTTORECOVER POSSESSIONOF THE PREMISES.
(c) Thefailure ofLessee toallowLessor and/orits agentsaccess tothePremises orthe commissionofwaste, actor acts consƟtuƟngpublic orprivate nuisance,and/or anillegal acƟvityonthe Premisesby Lessee,where such acƟons conƟnue fora periodof3 businessdays following wriƩen noƟce toLessee. In the eventthat Lesseecommits waste,anuisance oran illegal acƟvity asecond Ɵme then,the Lessormayelect totreat suchconductas anon-curable Breachrather thana Default.
(d) Thefailure byLessee toprovide(i) reasonable wriƩen evidenceofcompliance withApplicable Requirements,(ii) theservicecontracts, (iii)the rescissionof anunauthorized assignmentor subleƫng, (iv)an Estoppel CerƟﬁcate or ﬁnancialstatements, (v)a requestedsubordinaƟon,(vi) evidenceconcerning any guarantyand/or Guarantor,(vii) anydocumentrequested underParagraph 42,(viii) materialsafetydata sheets(MSDS), or(ix)any other documentaƟon or informaƟonwhich Lessormay reasonablyrequireof Lesseeunder theterms ofthisLease, whereany suchfailure conƟnues fora periodof10 daysfollowing wriƩen noƟceto Lessee.
(e) A DefaultbyLessee asto theterms, covenants, condiƟonsor provisionsof thisLease,or ofthe rulesadoptedunder Paragraph40 hereof,other than thosedescribed insubparagraphs 13.1(a),(b),(c) or(d), above,where suchDefault conƟnues fora periodof30 days aŌer wriƩen noƟce; provided, however,that if thenature ofLessee's Defaultissuch thatmore than30 daysarereasonably requiredfor itscure,then itshall notbedeemed tobe aBreach ifLesseecommences suchcure withinsaid 30dayperiod and thereaŌer diligentlyprosecutes suchcureto compleƟon. (f) The occurrenceofany ofthe followingevents: (i)the makingofany generalarrangement orassignment forthe beneﬁt ofcreditors; (ii)becominga "debtor"as deﬁnedin 11U.S.C.§ 101or anysuccessor statutethereto(unless, inthe caseofa peƟƟon ﬁled againstLessee,the sameis dismissedwithin 60days);(iii) theappointment ofa trusteeorreceiver totake possessionof substanƟallyallof Lessee'sassets locatedatthe Premisesor ofLessee'sinterest inthis Lease,where possessionis notrestored toLesseewithin 30days; or(iv) the aƩachment, execuƟon orother judicialseizureof substanƟallyall ofLessee'sassets locatedat the Premisesor ofLessee's interestinthis Lease,where suchseizure isnotdischarged within30 days;provided,however, inthe eventthatany provisionof this subparagraphis contraryto anyapplicablelaw, suchprovision shallbe ofnoforce or eﬀect, andnot aﬀect thevalidity oftheremaining provisions. (g) The discoverythat any ﬁnancial statementofLessee orof anyGuarantorgiven toLessor wasmateriallyfalse. (h) Ifthe performanceof Lessee's obligaƟonsunder thisLease isguaranteed: (i)the deathof aGuarantor,(ii) the terminaƟon ofaGuarantor's liability withrespect tothis Leaseotherthan inaccordance withthe termsofsuch guaranty,(iii) aGuarantor'sbecoming insolventor thesubjectof abankruptcy ﬁling,(iv) a
Guarantor'srefusal tohonor theguaranty,or (v)a Guarantor'sbreach ofitsguaranty obligaƟonon ananƟcipatorybasis, andLessee's failure,within60 daysfollowing wriƩen noƟce ofany suchevent,to provide wriƩen alternaƟve assurance orsecurity,which, whencoupled withthethen exisƟngresources ofLessee,equals or exceedsthe combined ﬁnancial resourcesofLessee andthe Guarantorsthat existedatthe Ɵmeof execuƟonofthis Lease.

13.2 Remedies. IfLessee failsto performanyof its aﬃrmaƟve duƟes or obligaƟons, within10 days aŌer wriƩen noƟce (or incase ofanemergency, without noƟce),Lessor may,at itsopƟon,perform suchduty orobligaƟon onLessee'sbehalf, includingbut notlimitedto theobtaining ofreasonablyrequired bonds, insurancepolicies, orgovernmental licenses,permitsor approvals. Lesseeshall paytoLessor anamount equalto115% ofthe costsandexpenses incurredby Lessor insuch performanceupon receiptofan invoicetherefor. In theeventof aBreach, Lessormay,with orwithout further noƟceor demand,and withoutlimiƟng Lessor inthe exerciseof anyrightor remedywhich Lessormay havebyreason ofsuch Breach:
(a) Terminate Lessee'sright topossessionof thePremises byany lawfulmeans,in whichcase thisLeaseshall terminateand Lesseeshallimmediately surrenderpossession toLessor. Insuch eventLessor shallbe enƟtledtorecover fromLessee: (i)the unpaidRent whichhadbeen earnedat the Ɵme of terminaƟon; (ii)the worthat the Ɵmeof awardof theamount bywhichthe unpaidrent whichwouldhave beenearned aŌer terminaƟon unƟl the Ɵme ofaward exceedsthe amountof suchrental lossthatthe Lesseeproves couldhave beenreasonablyavoided; (iii)the worthatthe Ɵmeof awardofthe amountby whichthe unpaidrentfor thebalance ofthe term aŌerthe Ɵmeof awardexceeds theamountof suchrental lossthatthe Lesseeproves couldbereasonably avoided;and (iv)any otheramount necessaryto compensateLessor forallthe detrimentproximately causedby theLessee'sfailure toperform its obligaƟonsunder thisLease orwhichin theordinary courseof thingswould belikelyto resulttherefrom, includingbut notlimitedto thecost ofrecoveringpossession ofthe Premises,expensesof releƫng,including necessary renovaƟon and alteraƟon ofthePremises, reasonable aƩorneys' fees,and that porƟonof anyleasing commissionpaidby Lessorin connecƟonwiththis Leaseapplicable tothe unexpiredtermof thisLease. The worthatthe Ɵmeof awardofthe amountreferred toinprovision (iii)of theimmediately preceding sentenceshall becomputed by discounƟngsuch amountat thediscount rateofthe FederalReserve Bankofthe Districtwithin whichthePremises arelocated atthe Ɵmeof awardplus onepercent. Eﬀortsby Lessorto miƟgatedamagescaused byLessee's Breachofthis Leaseshall notwaiveLessor's rightto recoverany damagesto whichLessor isotherwise enƟtled. If terminaƟonof thisLease isobtainedthrough theprovisional remedyofunlawful detainer,Lessor shallhavethe rightto recover insuch proceedingany unpaidRentand damagesas arerecoverable therein,orLessor mayreserve therightto recoverall oranypart thereofin aseparate suit. If a noƟceand graceperiod requiredunderParagraph 13.1was notpreviously given,a noƟce topay rentorquit, orto performorquit givento Lesseeunder theunlawful detainerstatute shallalso consƟtutethe noƟce requiredby Paragraph13.1. Insuch case,the applicablegraceperiod requiredby Paragraph13.1and theunlawful detainerstatute shallrun concurrently,andthe failureof Lesseeto curetheDefault withinthe greaterofthe twosuch graceperiodsshall consƟtuteboth anunlawful detainerand aBreach ofthisLease enƟtlingLessor tothe remediesprovidedfor inthis Leaseand/orby saidstatute. (b) ConƟnuethe Leaseand Lessee'srightto possessionand recovertheRent asit becomesdue, inwhichevent Lesseemay subletorassign, subjectonly toreasonable limitaƟons. Actsofmaintenance, eﬀortsto relet,and/or theappointmentof areceiver toprotectthe Lessor'sinterests, shallnot consƟtute a terminaƟonof theLessee's righttopossession.
(c) Pursueany otherremedy nowor hereaŌer availableunder thelaws orjudicialdecisions ofthe statewhereinthe Premisesare located. The expiraƟon or terminaƟon ofthis Leaseand/orthe terminaƟonof Lessee'sright topossessionshall notrelieve Lesseefromliability underany indemnityprovisionsof thisLease asto maƩersoccurring oraccruingduring theterm hereofor byreasonof Lessee'soccupancy ofthePremises.

13.3 Inducement Recapture.Any agreementfor freeorabated rentor othercharges,the costof tenantimprovementsfor Lesseepaid foror performedby Lessor,or forthe givingorpaying byLessor toor forLesseeof anycash orotherbonus, inducementor consideraƟonforLessee's enteringinto thisLease, allofwhich concessionsare hereinaŌerreferred toas"Inducement Provisions,"shall bedeemed condiƟoneduponLessee's fulland faithfulperformanceof allof theterms, covenantsand condiƟonsof thisLease. UponBreach ofthis LeasebyLessee, anysuch InducementProvisionshall automaƟcallybe deemeddeletedfrom thisLease andof nofurther forceor eﬀect, andany rent,other charge,bonus,inducement or consideraƟon theretoforeabated,given orpaid byLessorunder suchan InducementProvision shallbe immediatelydueand payableby Lesseeto Lessor,notwithstandingany subsequentcure ofsaidBreach byLessee. Theacceptance by
Lessorof rentor thecureof theBreach which iniƟated the operaƟonof thisparagraph shallnotbe deemeda waiverbyLessor ofthe provisionsof thisparagraph unless speciﬁcally sostated in wriƟngby Lessorat theƟme ofsuchacceptance.

13.4 Late Charges. Lessee herebyacknowledges thatlatepayment byLessee ofRentwill causeLessor toincurcosts notcontemplated bythis Lease,theexact amountof whichwill beextremely diﬃcult toascertain. Such costsinclude,but arenot limitedto,processing and accounƟng charges,andlate chargeswhich maybe imposedupon Lessorby anyLender. Accordingly,if anyRent shallnotbe receivedby Lessorwithin5 days aŌer suchamountshall bedue, then,without any requirementfor noƟceto Lessee,Lesseeshall immediatelypay toLessor aone- Ɵmelate chargeequal to10%of eachsuch overdueamountor $100,whichever is DRAFT - Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.

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greater. TheParƟes herebyagreethat suchlate chargerepresents afairand reasonable esƟmate ofthecosts Lessorwill incurbyreason ofsuch latepayment.

Acceptanceof suchlate chargebyLessor shallin noevent consƟtuteawaiver ofLessee's DefaultorBreach withrespect tosuchoverdue amount,nor preventthe exerciseof anyof theotherrights andremedies grantedhereunder. Inthe eventthat alatecharge ispayable hereunder,whetheror notcollected, for3 consecuƟve installmentsof BaseRent, thennotwithstandingany provisionof thisLease tothecontrary, BaseRent shall,atLessor's opƟon,become dueandpayable quarterlyin advance.

13.5 Interest. Anymonetary paymentdue Lessorhereunder,other thanlate charges,notreceived byLessor, whendueshall bearinterest fromthe 31stday aŌerit wasdue. Theinterest ("Interest")charged shallbe computedatthe rateof 10%perannum butshall notexceedthe maximumrate allowedby law. Interest is payablein addiƟonto thepotenƟallate chargeprovided forin Paragraph13.4.

13.6 Breach byLessor.
(a) NoƟce ofBreach. Lessorshall notbe deemedin breachofthis Leaseunless Lessorfailswithin areasonable Ɵmetoperform an obligaƟon requiredto beperformed byLessor. Forpurposes ofthis Paragraph,a reasonable Ɵmeshall inno eventbeless than30 days aŌerreceipt byLessor, andany Lenderwhosename andaddress shallhave beenfurnishedto Lesseein wriƟngfor suchpurpose,of wriƩen noƟce specifyingwhereinsuch obligaƟonof Lessorhasnot beenperformed; provided,however, thatif thenatureof Lessor's obligaƟon issuch thatmorethan 30days arereasonablyrequired forits performance,thenLessor shallnot bein breachif performanceis commencedwithinsuch 30day periodand thereaŌerdiligentlypursued toco mpleƟon. (b) Performanceby Lesseeon BehalfofLessor . In theeventthat neitherLessor norLender curessaidbreach within30 days aŌerreceipt ofsaid noƟce, orif havingcommenced saidcurethey donot diligentlypursue itto compleƟon, thenLessee mayelectto curesaid breachatLessee's expenseand oﬀsetfrom Rent theactual andreasonable costtoperform suchcure, providedhowever, thatsuch oﬀset shallnot exceedanamount equalto thegreaterof onemonth's BaseRent or theSecurity Deposit,reserving Lessee'srightto seekreimbursement fromLessor foranysuch expensein excessofsuch oﬀset. Lesseeshalldocument thecost ofsaid cureand supplysaid documentaƟontoLessor.

14. CondemnaƟon. If thePremisesor any porƟon thereofaretaken underthe powerof eminentdomainor soldunder thethreatof theexercise ofsaidpower (collecƟvely"CondemnaƟon"), thisLease shallterminateas tothe parttaken asofthe datethe condemningauthoritytakes Ɵtleor possession,whichever ﬁrst occurs.

Ifmore than10% oftheBuilding, ormore than25% ofthat porƟon ofthe Premisesnotoccupied byany building,istaken by CondemnaƟon, Lesseemay, atLessee's opƟon,to beexercised inwriƟngwithin 10days aŌerLessor shallhavegiven Lessee wriƩen noƟceofsuch taking(or intheabsence ofsuch noƟce,within 10days aŌerthe condemningauthority shallhavetaken possession)terminate thisLease asofthe datethe condemningauthoritytakes suchpossession. IfLessee doesnot terminatethis Leasein accordancewiththe foregoing,this Leaseshall remaininfull forceand eﬀectasto the porƟon ofthePremises remaining,except thatthe Base Rentshall bereduced in proporƟonto thereducƟon in uƟlity ofthePremises causedby suchConde mnaƟon. CondemnaƟon awards and/orpaymentsshall bethe propertyof Lessor,whether suchawardshall bemade as compensaƟon for diminuƟon in valueof theleasehold,the valueof theparttaken, orfor severance damages;provided, however,that Lesseeshallbe enƟtledto anycompensaƟon paidbythe condemnorfor Lessee's relocaƟonexpenses, lossof businessgoodwill and/orTrade Fixtures,without regardtowhether ornot thisLease isterminatedpursuant tothe provisionsofthis Paragraph. All AlteraƟonsand UƟlity InstallaƟons madeto thePremises byLessee,for purposesof CondemnaƟononly, shallbeconsidered theproperty oftheLessee andLessee shallbe enƟtled toany andall compensaƟonwhich ispayable therefor. In theevent thatthis Leaseisnot terminatedby reasonofthe CondemnaƟon,Lessor shallrepairany damageto the Premisescaused bysuch CondemnaƟon.

15. Brokerage Fees.

15.1 AddiƟonal Commission. In addiƟonto thepaymentsowed pursuantto Paragraph1.9above, Lessoragrees that: (a) ifLessee exercisesany OpƟon,(b)if Lesseeor anyone aﬃliated withLesseeacquires anyrights tothe Premisesorother premisesowned byLessorand locatedwithin thesameProject, ifany, within whichthe Premisesis located,(c)if Lesseeremains inpossession ofthePremises, withthe consentofLessor, aŌerthe expiraƟonofthis Lease,or (d)if BaseRentis increased,whether byagreement or operaƟonof anescalaƟon clauseherein, then,Lessorshall payBrokers afeein accordancewith thefeeschedule ofthe Brokersin eﬀectat theƟme theLeasewas executed. Theprovisions ofthisparagraph areintended tosupersedethe provisionsof anyearlieragreement tothe contrary.

15.2 AssumpƟon of ObligaƟons. Anybuyer ortransfereeof Lessor'sinterest inthisLease shallbe deemedtohave assumedLessor's obligaƟonhereunder.

Brokersshall bethird party beneﬁciariesof theprovisions ofParagraphs 1.9,15,22 and31. IfLessor failsto paytoBrokers anyamounts dueas andforbrokerage fees pertainingto thisLease whendue,then suchamounts shallaccrue Interest. In addiƟon,if Lessorfailsto payany amountstoLessee's Brokerwhen due,Lessee's Brokermay send wriƩen noƟce toLessor andLessee ofsuch failureandif Lessorfails topaysuch amountswithin 10days aŌer said noƟce, Lesseeshall paysaid moniesto itsBroker and oﬀsetsuch amountsagainst Rent. InaddiƟon,Lessee's Brokershall bedeemedto bea thirdparty beneﬁciary ofany commissionagreement enteredinto byand/or betweenLessorand Lessor'sBroker forthe limitedpurposeof collecƟngany brokeragefeeowed.

15.3 RepresentaƟons and IndemniƟesof BrokerRelaƟonships. Lesseeand Lessoreach representandwarrant tothe otherthatit hashad nodealings withany person, ﬁrm, broker,agent orﬁnder(other thanthe Brokersand Agents,ifany) in connecƟon withthisLease, andthat nooneother thansaid namedBrokers and Agentsis enƟtledto anycommissionor ﬁnder'sfee inconnecƟon herewith. Lessee andLessor doeachhereby agreeto indemnify,protect,defend andhold theother harmlessfrom andagainst liabilityfor compensaƟon orcharges whichmay beclaimedby anysuch unnamedbroker, ﬁnder orother similarpartyby reasonof any dealingsor acƟonsof theindemnifyingParty, includingany costs,expenses, aƩorneys'feesreasonably incurredwith respectthereto.

16. Estoppel CerƟﬁcates.
(a) Each Party(as " RespondingParty")shall within10 days aŌer wriƩen noƟce from theother Party(the" RequesƟng Party")execute, acknowledgeand deliverto the RequesƟng Partyastatement in wriƟng inform similartothe thenmost current" Estoppel CerƟﬁcate" formpublished byAIRCRE, plussuch addiƟonal informaƟon, conﬁrmaƟon and/orstatements asmaybe reasonablyrequested bythe RequesƟngParty. (b) Ifthe RespondingParty shallfailto executeor delivertheEstoppel CerƟﬁcatewithin such10 dayperiod,the RequesƟngParty mayexecutean Estoppel CerƟﬁcate staƟng that: (i)theLease isin fullforce and eﬀectwithout modiﬁcaƟonexcept asmaybe representedby the RequesƟngParty, (ii)there areno uncureddefaults inthe RequesƟngParty'sperformance, and(iii) ifLessor isthe RequesƟng Party,not morethanone month'srent hasbeenpaid inadvance.

ProspecƟvepurchasers andencumbrancers mayrelyupon the RequesƟng Party'sEstoppel CerƟﬁcate,andthe RespondingParty shallbeestopped fromdenying the truthof thefacts containedinsaid CerƟﬁcate. In addiƟon, Lesseeacknowledgesthat anyfailure onitspart toprovide suchanEstoppel CerƟﬁcatewill exposeLessor torisks and potenƟally causeLessorto incurcosts notcontemplated bythisLease, theextent ofwhichwill beextremely diﬃculttoascertain. Accordingly, shouldthe Lesseefail toexecute and/ordelivera requestedEstoppel CerƟﬁcatein aƟmelyfashion themonthly BaseRentshall be automaƟcally increased,withoutany requirementfor noƟceto Lessee,byan amountequal to10% ofthethen exisƟngBase Rentor$100, whicheveris greaterforremainder ofthe Lease. The ParƟes agreethat suchincrease inBaseRent representsfair andreasonable compensaƟonforthe addiƟonalrisk/costs thatLessorwill incurby reasonofLessee's failureto providethe Estoppel CerƟﬁcate. Suchincrease inBase Rentshall innoevent consƟtutea waiverofLessee's Defaultor Breachwithrespect tothe failureto provide theEstoppel CerƟﬁcatenor preventtheexercise ofany ofthe otherrightsand remediesgranted hereunder. (c) IfLessor desiresto ﬁnance, reﬁnance,or sellthe Premises,or anypartthereof, Lesseeand allGuarantorsshall within10 days aŌer wriƩen noƟce fromLessor deliverto any potenƟallender orpurchaser designatedby Lessorsuch ﬁnancial statementsas maybereasonably requiredby suchlenderor purchaser, DRAFT - Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.

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includingbut notlimited toLessee's ﬁnancial statementsfor thepast 3years. Allsuch ﬁnancialstatementsshall bereceived byLessorand suchlender orpurchaser in conﬁdenceand shallbe usedonlyfor thepurposes hereinset forth.

17. DeﬁniƟon ofLessor. Theterm "Lessor"as usedhereinshall meanthe owneror ownersatthe Ɵmein quesƟonofthe fee Ɵtle tothePremises, or,if thisis a sublease,of theLessee's interestinthe priorlease. In theeventof atransfer ofLessor's Ɵtle orinterest inthePremises orthis Lease,Lessor shalldeliverto the transfereeor assignee(in cashorby credit)any unusedSecurity Depositheldby Lessor. Uponsuchtransfer orassignment anddeliveryof theSecurity Deposit,as aforesaid,the priorLessor shallberelieved ofall liabilitywith respecttothe obligaƟonsand/or covenantsunderthis Lease thereaŌer tobeperformed bythe Lessor.

Subjectto theforegoing, the obligaƟonsand/or covenantsin thisLease tobeperformed bythe Lessorshallbe bindingonly upontheLessor ashereinabove deﬁned.

18. Severability. The invalidityofany provisionof thisLease,as determinedby acourt ofcompetent jurisdicƟon, shallin noway aﬀect thevalidity ofanyother provisionhereof.

19. Days. Unless otherwisespeciﬁcallyindicated tothe contrary,theword "days"as usedin thisLeaseshall meanand refertocalendar days.

20. LimitaƟon onLiability. The obligaƟons ofLessor underthisLease shallnot consƟtutepersonal obligaƟonsofLessor, orits partners,members,directors, oﬃcers orshareholders, andLessee shalllookto thePremises, andto nootherassets ofLessor, forthe saƟsfacƟon ofany liabilityofLessor withrespect tothis Lease,and shallnot seekrecourse againstLessor'spartners, members,directors, oﬃcersor shareholders,orany oftheir personalassetsfor such saƟsfacƟon.

21. Time ofEssence. Timeis ofthe essencewithrespect tothe performanceof all obligaƟonsto beperformed orobservedby the ParƟes underthisLease.

22. No Prioror OtherAgreements ;Broker Disclaimer. ThisLease containsallagreements betweenthe ParƟeswith respecttoany maƩer menƟoned herein,andno otherprior orcontemporaneous agreementorunderstanding shallbe eﬀecƟve. LessorandLessee eachrepresents andwarrants totheBrokers thatit hasmade,and isrelying solelyupon, itsown invesƟgaƟon asto thenature, quality,characterand ﬁnancialresponsibility oftheother Partyto thisLeaseand asto theuse, nature, qualityand characterof thePremises. Brokershave noresponsibility withrespectthereto orwith respecttoany defaultor breachhereofby eitherParty .

23. NoƟces.

23.1 NoƟce Requirements. All noƟcesrequired orpermiƩedby thisLease orapplicablelaw shallbe in wriƟngand maybe deliveredin person(byhand orby courier)or maybe sentbyregular, cerƟﬁedor registeredmail orU.S.Postal ServiceExpress Mail,withpostage prepaid,or byfacsimiletransmission, orby email,and shallbe deemed suﬃciently givenifserved ina manner speciﬁed inthisParagraph 23. Theaddressesnoted adjacentto aParty'ssignature onthis Leaseshall bethat Party'saddress fordelivery ormailingof noƟces. EitherParty mayby wriƩen noƟce to theotherspecify a diﬀerent addressfor noƟce, exceptthat uponLessee's takingpossession ofthe Premises,thePremises shall consƟtute Lessee'saddress for noƟce. Acopy ofall noƟces toLessor shallbeconcurrently transmiƩedto such partyor parƟesat suchaddressesas Lessormay from Ɵme to Ɵme hereaŌer designatein wriƟng.

23.2 Date ofNoƟce. Any noƟce sentbyregistered or cerƟﬁed mail,returnreceipt requested,shall bedeemedgiven onthe dateof deliveryshownon the receiptcard, orif nodeliverydate isshown, thepostmark thereon. If sentby regularmailthe noƟceshall bedeemedgiven 72hours aŌerthe sameisaddressed as requiredherein andmailed withpostageprepaid. NoƟces deliveredby UnitedStatesExpress Mailor overnightcourierthat guaranteesnext daydeliveryshall be deemedgiven 24hours aŌerdeliveryof thesame tothe PostalServiceor courier. NoƟcesdeliveredby hand,or transmiƩedbyfacsimile transmissionor byemail shallbe deemeddelivered uponactualreceipt. If noƟceis receivedona Saturday,Sunday orlegalholiday, itshall bedeemedreceived onthe nextbusiness day.

23.3 OpƟons. Notwithstandingthe foregoing,in ordertoexercise any OpƟons (seeparagraph39), the NoƟce mustbesent by CerƟﬁed Mail(return receipt requested),Express Mail(signature required),courier(signature required)or someother methodologythatprovides areceipt establishingthedate the noƟce was receivedby theLessor.

24. Waivers.
(a) No waiverby Lessorofthe Defaultor Breachof anyterm,covenant or condiƟon hereofbyLessee, shallbe deemedawaiver ofany otherterm, covenantor condiƟonhereof, orofany subsequentDefault orBreach byLesseeof thesame orofany otherterm, covenantor condiƟon hereof. Lessor'sconsent to, orapproval of,any actshallnot bedeemed torender unnecessarytheobtaining ofLessor's consentto,or approvalof, anysubsequentor similaract byLessee, orbe construedas thebasis ofanestoppel toenforce theprovision orprovisionsof thisLease requiringsuchconsent. (b) Theacceptance ofRent byLessorshall notbe awaiverof anyDefault orBreach byLessee. Anypayment byLesseemay beaccepted byLessoron accountof moniesor damagesdueLessor, notwithstandingany qualifyingstatements or condiƟonsmade byLessee inconnecƟontherewith, whichsuch statements and/or condiƟons shallbe ofnoforce or eﬀect whatsoeverunless speciﬁcallyagreedto in wriƟng byLessorat orbefore the Ɵmeof depositof suchpayment. (c) THEPARTIES AGREETHAT THETERMSOF THISLEASE SHALLGOVERN WITHREGARDTO ALLMATTERS RELATEDTHERETOAND HEREBYWAIVE THE PROVISIONSOF ANYPRESENT ORFUTURESTATUTE TOTHE EXTENTTHAT SUCHSTATUTEIS INCONSISTENTWITH THISLEASE.

25. Disclosures RegardingThe Natureofa RealEstate Agency RelaƟonship. (a) When enteringinto adiscussionwith areal estateagent regardingareal estate transacƟon, aLessoror Lesseeshould fromtheoutset understand whattype ofagency relaƟonshipor representaƟon ithas withthe agentoragents inthe transacƟon. LessorandLessee acknowledgebeing advisedbythe Brokersin this transacƟon, asfollows
:
(i) Lessor'sAgent . A Lessor'sagent undera lisƟng agreementwith theLessoracts asthe agentforthe Lessoronly. A Lessor'sagentor subagent hasthe following aﬃrmaƟve obligaƟons: To theLessor: A ﬁduciarydutyof utmostcare, integrity,honesty,and loyaltyin dealingswiththe Lessor. Tothe Lesseeand theLessor: (a) Diligentexerciseof reasonableskills andcare inperformanceof theagent's duƟes. (b) Aduty ofhonestand fairdealing andgood faith. (c) Aduty to discloseall factsknown totheagent materially aﬀecƟng thevalue ordesirabilityof theproperty thatarenot knownto, orwithinthe diligent aƩenƟon and observaƟonof, theParƟes. Anagent isnot obligatedto revealtoeither Partyany conﬁdenƟal informaƟonobtained fromthe otherPartywhich doesnot involvethe aﬃrmaƟve duƟes setforth above.
(ii) Lessee'sAgent. Anagent canagree toactas agentfor theLesseeonly. In these situaƟons,the agentis notthe Lessor'sagent,even ifby agreementthe agentmay receive compensaƟonfor servicesrendered, eitherin fullorin partfrom theLessor. Anagent acƟngonlyfor aLessee hasthe following aﬃrmaƟve obligaƟons. To theLessee: A ﬁduciary dutyof utmostcare,integrity, honesty,and loyaltyindealings withthe Lessee. To theLessee andthe Lessor: (a) Diligentexercise ofreasonable skillsandcare inperformance ofthe agent's duƟes. (b)A dutyofhonest andfair dealingandgood faith. (c)A dutytodisclose allfacts knownto theagent materially aﬀecƟngthe valueor desirabilityof thepropertythat arenot knownto,or withinthe diligent aƩenƟonand observaƟonof, theParƟes.

Anagent isnot obligatedtoreveal toeither Partyany conﬁdenƟal informaƟonobtained fromthe otherPartywhich doesnot involvethe aﬃrmaƟve duƟes set forth above.
(iii) Agent RepresenƟngBothLessor andLessee. Areal estateagent, either acƟng directlyorthrough oneor moreassociatelicensees, canlegally be theagent ofboth theLessorand theLessee ina transacƟon,butonly withthe knowledgeandconsent ofboth theLessorand theLessee. In adualagency situaƟon, DRAFT - Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.

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theagent hasthe following aﬃrmaƟve obligaƟons toboth theLessor andtheLessee: (a)A ﬁduciarydutyof utmostcare, integrity,honestyand loyaltyin thedealings witheither Lessoror theLessee. (b)Other duƟesto theLessorand theLessee asstatedabove insubparagraphs (i)or(ii). In represenƟngboth LessorandLessee, the agentmay not,without theexpresspermission ofthe respecƟveParty, disclosetothe otherParty conﬁdenƟal informaƟon,including, butnot limitedto,facts relaƟng toeither Lessee'sor Lessor's ﬁnancial posiƟon, moƟvaƟons, bargaining posiƟon,or otherpersonal informaƟon thatmay impactrent,including Lessor'swillingness to accepta rentless thanthe lisƟng rentor Lessee'swillingness topayrent greaterthan therento ﬀered. The aboveduƟesof theagent ina realestate transacƟon do notrelieve aLessor orLesseefrom theresponsibility toprotect theirowninterests. Lessor andLesseeshould carefullyread allagreementsto assurethat they adequatelyexpress theirunderstanding ofthe transacƟon. A realestate agentisa person qualiﬁed toadviseabout realestate. Iflegal ortax adviceis desired,consult acompetent professional. BothLessorand Lesseeshould stronglyconsider obtainingtaxadvice froma competentprofessionalbecause thefederal andstatetax consequencesof a transacƟon canbecomplex andsubject tochange. (b) Brokershave noresponsibility withrespectto anydefault orbreachhereof byeither Party. The ParƟesagree thatno lawsuitorother legal proceedinginvolving anybreach ofduty,error oromission relaƟngto thisLeasemay bebrought againstBrokermore thanone year aŌerthe StartDate andthat the liability(including courtcosts and aƩorneys'fees), ofany Brokerwith respecttoany suchlawsuit and/orlegalproceeding shallnot exceedthefee receivedby such Brokerpursuant tothis Lease;provided,however, thatthe foregoing limitaƟon oneachBroker's liabilityshall notbeapplicable toany grossnegligenceor willful misconductof suchBroker.
(c) Lessorand Lesseeagree to idenƟfyto Brokersas "ConﬁdenƟal"any communicaƟonor informaƟon givenBrokers thatisconsidered bysuch Partyto be conﬁdenƟal.

26. No RightTo Holdover. Lessee hasno righttoretain possessionof thePremises oranypart thereofbeyond the expiraƟonor terminaƟonof thisLease. Ator priorto the expiraƟon or terminaƟonof thisLease Lesseeshall deliverexclusivepossession ofthe PremisestoLessor. For purposesofthis provisionand Paragraph

13.1(a),exclusive possessionshall meanthatLessee shallhave vacatedthe Premises,removedall ofits personalpropertytherefrom andthat thePremiseshave been returnedin the condiƟon speciﬁed inthis Lease. Inthe eventthatLessee doesnot deliverexclusivepossession toLessor as speciﬁedabove, thenLessor's damages duringany holdoverperiod shallbecomputed atthe amountof theRent(as deﬁnedin Paragraph4.1)due duringthe lastfullmonth beforethe expiraƟonor terminaƟonof thisLease (disregardinganytemporary abatementof Rentthat mayhavebeen in eﬀect), butwithBase Rentbeing 150%ofthe BaseRent payable duringsuch lastfull month. Nothing containedherein shallbe construedasconsent byLessor toanyholding overby Lessee.

27. CumulaƟve Remedies. Noremedyor elecƟonhereunder shallbedeemed exclusivebut shall,wherever possible,be cumulaƟve withall otherremediesat lawor inequity.

28. Covenants and CondiƟons; ConstrucƟon ofAgreement. All provisionsofthis Leaseto beobserved orperformedby Lesseeare bothcovenantsand condiƟons.

Inconstruing thisLease, allheadingsand Ɵtlesare forthe convenienceofthe ParƟesonly andshallnot beconsidered apartof thisLease. Whenever requiredbythe context,the singularshall includetheplural andvice versa. ThisLeaseshall notbe construedasif preparedby oneofthe ParƟes,but ratheraccording toitsfair meaningas awhole, asifboth ParƟeshad preparedit.

29. Binding Eﬀect;Choice ofLaw. ThisLease shallbebinding uponthe ParƟes,their personalrepresentaƟves,successors andassigns andbegoverned bythe laws ofthe Statein whichthePremises arelocated. Any liƟgaƟonbetweenthe ParƟeshereto concerningthisLease shallbe iniƟatedinthe countyin whichthe Premises arelocated. Signatures tothisLease accomplishedby meansof electronicsignatureor similartechnology shallbelegal andbinding.

30. SubordinaƟon; AƩornment; Non-Disturbance.

30.1 SubordinaƟon. ThisLease andany OpƟongrantedhereby shallbe subjectandsubordinate toany groundlease,mortgage, deedof trust,or other hypothecaƟonor securitydevice (collecƟvely,"SecurityDevice"), nowor hereaŌerplaced uponthePremises, toany andalladvances madeon thesecuritythereof, andto allrenewals, modiﬁcaƟons,andextensions thereof. Lesseeagrees thattheholders ofany suchSecurityDevices (inthis Leasetogetherreferred toas " Lender") shallhave noliability or obligaƟonto performany ofthe obligaƟonsofLessor underthis Lease. Any Lendermay electtohave thisLease and/orany OpƟongranted herebysuperior tothe lienofits SecurityDevice bygiving wriƩen noƟcethereof toLessee, whereuponthisLease andsuch OpƟonsshallbe deemedprior tosuch SecurityDevice, notwithstandingthe relaƟvedatesof the documentaƟon or recordaƟon thereof.

30.2 AƩornment. Inthe eventthat Lessortransfers Ɵtle tothe Premises,orthe Premisesare acquiredbyanother uponthe foreclosureor terminaƟonofa SecurityDevice towhich thisLeaseis subordinated(i) Lesseeshall, subjecttothe non-disturbanceprovisions ofParagraph30.3, aƩornto suchnewowner, andupon request,enter intoa newlease,containing allof theterms andprovisionsof thisLease, withsuchnew ownerfor theremainderof theterm hereof,or, atthe elecƟon ofthe newowner, thisLeasewill automaƟcallybecome anew leasebetweenLessee andsuch newowner,and (ii)Lessor shall thereaŌerbe relievedof anyfurther obligaƟonshereunder andsuch newownershall assumeall ofLessor's obligaƟons,exceptthat suchnew ownershallnot: (a)be liableforany actor omissionof any priorlessor orwith respecttoevents occurringprior to acquisiƟon ofownership;(b) besubject toany oﬀsets ordefenses whichLesseemight haveagainst anyprior lessor, (c)be boundbyprepayment ofmore thanone month'srent,or (d)be liableforthe returnof anysecuritydeposit paidto anyprior lessorwhichwas notpaid or creditedto suchnew owner.

30.3 Non-Disturbance. Withrespect toSecurity Devicesenteredinto byLessor aŌerthe execuƟon ofthis Lease,Lessee's subordinaƟon ofthis Leaseshall be subjectto receivinga commerciallyreasonablenon-disturbance agreement(a "Non-DisturbanceAgreement ") fromtheLender whichNon-Disturbance Agreement providesthat Lessee'spossession ofthePremises, andthis Lease,including any opƟonsto extendthe termhereof,will notbe disturbedsolong asLessee isnot in Breachhereof and aƩorns totherecord ownerof thePremises. Further,within 60days aŌerthee xecuƟon ofthis Lease,Lessorshall, ifrequested byLessee, useits commerciallyreasonable eﬀortsto obtainaNon-Disturbance Agreementfrom theholder ofanypre-exi sƟng SecurityDevice whichissecured bythe Premises. In the eventthat Lessoris unabletoprovide theNon-Disturbance Agreementwithin said60days, thenLessee may,atLessee's opƟon,directly contactLenderand aƩempt to negoƟate forthe execuƟonanddelivery ofa Non-DisturbanceAgreement.

30.4 Self-ExecuƟng. Theagreements containedin thisParagraph30 shallbe eﬀecƟvewithoutthe execuƟonof anyfurtherdocuments; provided,however, that, upon wriƩen requestfrom Lessorora Lenderin connecƟonwith asale, ﬁnancing or reﬁnancing ofthePremises, Lesseeand Lessorshallexecute suchfurther wriƟngs asmay bereasonably requiredtoseparately documentany subordinaƟon, aƩornment and/orNon-DisturbanceAgreement providedfor herein.

31. AƩorneys' Fees. IfanyParty or Brokerbrings anacƟonor proceedinginvolving thePremiseswhether foundedin tort,contractor equity,or todeclare rights hereunder,the PrevailingParty (ashereaŌer deﬁned) inany suchproceeding, acƟon,orappeal thereon,shall be enƟtledto reasonableaƩorneys' fees. Such feesmay beawarded inthe samesuitor recoveredin aseparate suit,whetheror notsuch acƟonorproceeding ispursued todecisionor judgment. Theterm, "Prevailing Party"shall include,without limitaƟon,aParty orBroker who substanƟallyobtainsor defeatsthe reliefsought,as thecase maybe,whether bycompromise, seƩlement,judgment, orthe abandonmentbythe otherParty orBroker ofits claimor defense. The aƩorneys'fees awardshallnot becomputed inaccordance with anycourt feeschedule, butshallbe suchas tofully reimburseall aƩorneys' feesreasonably incurred. In addiƟon,Lessor shallbe enƟtled to aƩorneys' fees,costs and expensesincurred inthe preparaƟonandservice of noƟces ofDefault and consultaƟonsin connecƟontherewith, whetherornot alegal acƟonissubsequently DRAFT - Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.

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commencedin connecƟonwith suchDefaultor resulƟngBreach ($200is areasonableminimum peroccurrence forsuchservices and consultaƟon).

32. Lessor's Access;Showing Premises;Repairs. Lessorand Lessor'sagentsshall havethe rightto enterthecommonareasofthePremisesatany Ɵme,in thecase ofanemergency, andotherwise atreasonable Ɵmes aŌerreasonable priornoƟce forthepurpose ofshowing thesameto prospecƟvepurchasers, lenders,or tenants,and makingsuch alteraƟons, repairs,improvements or addiƟons tothePremises asLessor maydeemnecessary ordesirable andthe erecƟng, usingand maintainingof uƟliƟes,services,pipes andconduits throughthe Premisesand/orother premisesas longasthere isno materialadverse eﬀect onLessee's useof thePremises. Allsuch acƟviƟesshall bewithout abatementofrent orliability toLessee.

33. AucƟons. Lessee shallnotconduct, norpermit tobeconducted, any aucƟon uponthe PremiseswithoutLessor's prior wriƩen consent. Lessor shallnot be obligatedto exerciseany standardofreasonableness indetermining whetherto permitan aucƟon.

34. Signs. Lessor mayplaceon thePremises ordinary"ForSale" signsat any Ɵme andordinary"For Lease"signs duringthelast 6months oftheterm hereof. Except forordinary "forsublease" signs,Lesseeshall notplace anysign uponthePremises withoutLessor's prior wriƩenconsent. All signsmustcomply withall Applicable Requirements.

35. TerminaƟon; Merger. Unless speciﬁcallystated otherwisein wriƟngbyLessor, thevoluntary orother surrenderofthis Leaseby Lessee,themutual terminaƟon or cancellaƟon hereof,or a terminaƟonhereof byLessor forBreach byLessee,shall automaƟcallyterminate anysubleaseor lesserestate inthePremises; provided, however,that Lessormay electto conƟnue anyone orall exisƟngsubtenancies. Lessor'sfailure within10days followingany sucheventto electto thecontrary by wriƩen noƟce tothe holderofany suchlesser interest,shall consƟtuteLessor's elecƟon tohave suchevent consƟtute the terminaƟon ofsuchinterest.

36. Consents. All requestsforconsent shallbe in wriƟng. Exceptas otherwiseprovided herein,whereverin thisLease theconsentof aParty isrequiredto anact by orfor theother Party,suchconsent shallnot beunreasonably withheldordelayed. Lessor's actualreasonablecosts andexpenses (includingbutnot limitedto architects', aƩorneys', engineers'and otherconsultants'fees) incurredin the consideraƟon of,orresponse to,a requestbyLessee forany Lessorconsent,including butnot limitedto consentstoan assignment,a subleƫngor thepresenceor useof aHazardousSubstance, shallbe paidbyLessee uponreceipt ofan invoiceand supporƟng documentaƟon therefor. Lessor'sconsentto anyact, assignmentor subleƫngshallnot consƟtutean acknowledgmentthatno Defaultor BreachbyLessee ofthis Leaseexists, norshallsuch consentbe deemeda waiverofany then exisƟng DefaultorBreach, exceptas maybeotherwise speciﬁcallystated inwriƟng by Lessorat the Ɵme ofsuchconsent. The failureto specifyhereinany parƟcular condiƟon toLessor'sconsent shallnot precludethe imposiƟon byLessor atthe Ɵmeof consentof suchfurther orother condiƟons asare thenreasonable withreferenceto the parƟcular maƩer forwhich consentis beinggiven. Inthe eventthat either Partydisagrees withany determinaƟonmadeby theother hereunderand reasonablyrequeststhe reasonsfor such determinaƟon,the determiningparty shallfurnish itsreasons in wriƟng andinreasonable detailwithin 10business daysfollowingsuch request.

37. Guarantor.

37.1 ExecuƟon. TheGuarantors, ifany, shalleachexecute aguaranty intheform mostrecently publishedbyAIR CRE,and eachsuch Guarantorshallhave the same obligaƟons asLessee underthisLease.

37.2 Default. Itshall consƟtutea Defaultofthe Lesseeif anyGuarantorfails orrefuses, uponrequestto provide: (a)evidence ofthe execuƟon ofthe guaranty, includingthe authorityof thepartysigning onGuarantor's behalfto obligateGuarantor,and inthe caseofa corporateGuarantor, a cerƟﬁedcopy ofa resoluƟonof its boardof directorsauthorizing themakingof suchguaranty, (b)current ﬁnancialstatements,(c) anEstoppel CerƟﬁcate,or(d) wriƩen conﬁrmaƟon thattheguaranty is sƟllin eﬀect.

38. Quiet Possession. Subjecttopayment byLessee oftheRent andperformance ofall ofthecovenants, condiƟonsand provisionsonLessee's partto beobserved andperformed underthis Lease,Lesseeshall havequiet possessionand quietenjoymentof thePremises duringtheterm hereof.

39. OpƟons. If Lesseeisgranted any OpƟon, as deﬁnedbelow, thenthe followingprovisions shallapply.

39.1 DeﬁniƟon. "OpƟon"shall mean: (a)theright toextend orreducethe termof orrenewthis Leaseor toextend orreducethe termof orrenewany lease thatLessee hason otherpropertyof Lessor;(b) theright of ﬁrstrefusal orﬁrst oﬀertolease eitherthe Premisesorother propertyof Lessor;(c) therightto purchase, theright of ﬁrst oﬀertopurchase orthe rightof ﬁrstrefusalto purchasethe Premisesorother propertyof Lessor.

39.2 OpƟons PersonalToOriginal Lessee. Any OpƟongranted toLessee inthisLease ispersonal totheoriginal Lessee,and cannotbe assignedorexercised by anyoneother thansaid originalLesseeand onlywhile theoriginal Lesseeisin fullpossession ofthePremises and,if requestedbyLessor, withLessee cerƟfyingthat Lesseehas no intenƟon of thereaŌerassigning orsubleƫng.

39.3 MulƟple OpƟons. In theevent thatLesseehas anymulƟple OpƟons toextend orrenew thisLease,a later OpƟon cannotbe exercisedunlessthe prior OpƟonshave beenvalidly exercised.

39.4 Eﬀect ofDefaulton OpƟons.
(a) Lessee shallhave norightto exercisean OpƟon: (i)duringthe periodcommencing withthegiving ofany noƟceofDefault and conƟnuing unƟl said Defaultis cured,(ii) duringtheperiod of Ɵme anyRent isunpaid(without regardto whetherno Ɵcethereof isgiven Lessee),(iii)during the Ɵme Lesseeis inBreach of thisLease, or(iv) intheevent thatLessee hasbeen given3or more noƟces ofseparateDefault, whetheror nottheDefaults arecured, duringthe 12monthperiod immediatelypreceding theexercise ofthe OpƟon.
(b) Theperiod of Ɵme withinwhichan OpƟonmay beexercisedshall notbe extendedor enlargedbyreason ofLessee's inabilitytoexercise an OpƟon becauseof theprovisions ofParagraph39.4(a).
(c) An OpƟon shallterminate andbeof nofurther forceor eﬀect,notwithstandingLessee's dueand Ɵmelyexerciseof the OpƟon, if, aŌersuch exercise andprior tothe commencementofthe extendedterm or compleƟon ofthepurchase, (i)Lessee failstopay Rentfor aperiodof 30days aŌersuch Rentbecomesdue (withoutany necessityof Lessortogive noƟcethereof), or(ii) ifLesseecommits aBreach ofthisLease.

40. MulƟple Buildings. IfthePremises area partofa groupof buildingscontrolled byLessor,Lessee agreesthat itwillabide byand conformtoall reasonablerules and regulaƟons whichLessor maymakefrom Ɵmeto Ɵmefor themanagement,safety, andcare ofsaid properƟes, includingthe careandcleanliness ofthe grounds andincluding theparking, loadingandunloading ofvehicles, andto causeitsemployees, suppliers,shippers, customers,contractorsand inviteesto soabideand conform. Lesseealso agreestopay itsfair shareof commonexpensesincurred in connecƟon withsuchrules and regulaƟons.

41. Security Measures. Lesseeherebyacknowledges thatthe Rentpayableto Lessorhereunder doesnot includethecost ofguard serviceorother security measures,and thatLessor shallhaveno obligaƟonwhatsoever toprovide same. Lessee assumesall responsibility fortheprotecƟonof thePremises,Lessee, its agentsand inviteesand theirpropertyfrom theacts ofthird parƟes.

DRAFT - Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.

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42. ReservaƟons. Lessor reservestoitself theright, from Ɵmeto Ɵme,to grant,without theconsentor joinderof Lessee,sucheasements, rightsand dedicaƟons thatLessor deemsnecessary, andtocause the recordaƟon ofparcel mapsand restricƟons, solong assucheasements, rights, dedicaƟons, mapsand restricƟons do notunreasonably interferewith theuseof thePremises byLessee. Lesseeagrees tosign anydocumentsreasonably requestedby Lessorto eﬀectuateanysuch easementrights, dedicaƟon,map orrestricƟons.

43. Performance UnderProtest. Ifat any Ɵme adisputeshall ariseas toany amountorsum ofmoney tobepaid byone Partytothe otherunder theprovisions hereof,the Partyagainst whomthe obligaƟon topay themoney isassertedshall havethe righttomake payment"under protest"andsuch paymentshall notbe regardedas avoluntary paymentandthere shallsurvive theright onthepart ofsaid Partyto insƟtute suitfor recoveryofsuch sum. Ifit shallbeadjudged thatthere wasno legal obligaƟon onthepart ofsaid Partyto paysuchsum orany partthereof,said Partyshall be enƟtledto recoversuch sumor somuchthereof asit wasnot legallyrequired topay. AParty whodoes not iniƟate suitforthe recoveryof sumspaid"under protest"within 6monthsshall bedeemed tohave waiveditsright to protestsuch payment.

44. Authority; MulƟple ParƟes; ExecuƟon.
(a) If eitherParty heretoisa corporaƟon,trust, limitedliability company,partnership,or similar enƟty,eachindividual execuƟng thisLease onbehalfof such enƟty representsand warrantsthathe orshe isduly authorizedtoexecute anddeliver thisLeaseon itsbehalf. EachParty shall,within 30days aŌerrequest, deliverto theother Party saƟsfactoryevidence ofsuch authority. (b) Ifthis Leaseis executedbymore thanone personor enƟty as"Lessee", eachsuch personore nƟty shallbe jointlyandseverally liablehereunder. Itis agreedthat anyone ofthenamed Lesseesshall beempowered toexecuteany amendmentto thisLease,or otherdocument ancillarytheretoand bindall ofthe namedLessees, andLessor mayrelyon thesame asif allofthe namedLessees hadexecutedsuch document. (c) ThisLease maybe executedbythe ParƟesin counterparts,each ofwhichshall bedeemed anoriginaland allof whichtogethershall consƟtuteone andthe sameinstrument.

45. Conﬂict. Any conﬂictbetweenthe printedprovisions ofthisLease andthe typewriƩenor handwriƩenprovisionsshall becontrolled bythe typewriƩen or handwriƩenprovisions.

46. Oﬀer. PreparaƟon ofthisLease byeither Partyortheir agentand submissionof sametothe otherParty shallnotbe deemedan oﬀertolease tothe other Party. ThisLease isnotintended tobe binding unƟl executedanddelivered byall ParƟeshereto.

47. Amendments. This Leasemaybe modiﬁedonly inwriƟng,signed bythe ParƟesin interestatthe Ɵmeof themodiﬁcaƟon. Aslong astheydo notmaterially changeLessee's obligaƟonshereunder, Lesseeagreesto makesuch reasonablenon-monetary modiﬁcaƟonstothis Leaseas maybereasonably requiredby aLender in connecƟon withthe obtainingofnormal ﬁnancingor reﬁnancingof thePremises.

48. Waiver ofJury Trial. THE PARTIESHEREBY WAIVETHEIRRESPECTIVE RIGHTSTO TRIALBY JURYINANY ACTIONOR PROCEEDINGINVOLVINGTHE PROPERTY ORARISING OUTOF THISLEASE.

49. ArbitraƟon ofDisputes. AnAddendum requiringthe ArbitraƟonofall disputesbetween thePar Ɵes and/orBrokers arisingoutof thisLease is isnot aƩachedto thisLease.

50. Accessibility; Americanswith DisabiliƟesAct.
(a) The Premises:
havenot undergonean inspecƟonbya CerƟﬁedAccess Specialist(CASp). Note:A CerƟﬁedAccess Specialist(CASp)can inspectthe subjectpremisesand determinewhether thesubject premisescomplywith allof theapplicable construcƟon-relatedaccessibilitystandards understate law.Althoughstate lawdoes not requirea CASp inspecƟon ofthesubject premises,the commercialproperty ownerorlessor maynot prohibitthelessee ortenant fromobtaininga CASp inspecƟon of thesubject premisesfor theoccupancyor potenƟaloccupancy ofthe lesseeortenant, ifrequested bythelessee ortenant. The parƟesshall mutuallyagree onthe arrangementsfor the Ɵme andmannerof theCASp inspecƟon,the paymentofthe feefor theCASpin specƟon, andthe costofmaking anyrepairs necessaryto correct violaƟons of construcƟon-related accessibilitystandardswithin thepremises. haveundergone an inspecƟonby aCerƟﬁed AccessSpecialist (CASp)andit wasdetermined thatthePremises metall applicable construcƟon-related accessibilitystandards pursuantto CaliforniaCivilCode §55.51et seq. Lesseeacknowledgesthat itreceived acopyof the inspecƟon reportatleast 48hours priorto execuƟngthis Leaseand agreestokeep suchreport conﬁdenƟal. haveundergone an inspecƟon bya CerƟﬁed AccessSpecialist (CASp)and itwasdetermined thatthe Premisesdidnot meetall applicable construcƟon-related accessibilitystandards pursuantto CaliforniaCivilCode §55.51et seq. Lesseeacknowledges thatit receivedacopy ofthe inspecƟonreportat least48 hoursprior to execuƟngthis Leaseand agreestokeep suchreport conﬁdenƟalexcept asnecessaryto completerepairs and correcƟonsof violaƟonsof construcƟonrelated accessibilitystandards.

Inthe eventthat thePremiseshave beenissued an inspecƟon reportbya CASpthe Lessorshallprovide acopy ofthedisability access inspecƟon cerƟﬁcate to Lessee within7 daysof the execuƟonof thisLease.
(b) Sincecompliance withthe Americanswith DisabiliƟes Act(ADA) andotherstate andlocal accessibilitystatutes aredependentupon Lessee's speciﬁc useof thePremises, Lessormakesno warrantyor representaƟonas towhetheror notthe Premisescomplywith ADAor anysimilar legislaƟon. In theevent that Lessee'suse ofthe Premisesrequires modiﬁcaƟons or addiƟons tothe Premisesinorder tobe incompliancewith ADAor otheraccessibilitystatutes, Lesseeagrees to makeany suchnecessary modiﬁcaƟonsand/or addiƟons atLessee's expense.

LESSORAND LESSEEHAVE CAREFULLYREADAND REVIEWEDTHIS LEASEAND EACHTERMAND PROVISIONCONTAINED HEREIN,ANDBY THEEXECUTION OFTHIS LEASESHOW THEIRINFORMED ANDVOLUNTARYCONSENT THERETO. THEPARTIES HEREBYAGREETHAT, ATTHE TIMETHISLEASE ISEXECUTED, THETERMSOF THISLEASE ARECOMMERCIALLY REASONABLEANDEFFECTUATE THEINTENT ANDPURPOSE OFLESSORAND LESSEEWITH RESPECTTOTHE PREMISES.

ATTENTION: NOREPRESENTATION ORRECOMMENDATIONIS MADEBY AIRCRE ORBYANY BROKERAS TOTHELEGAL SUFFICIENCY,LEGAL EFFECT,ORTAX CONSEQUENCESOF THISLEASE ORTHETRANSACTION TOWHICH ITRELATES. THEPARTIES AREURGED TO:

1. SEEKADVICE OFCOUNSELAS TOTHE LEGALANDTAX CONSEQUENCESOF THISLEASE.

2. RETAINAPPROPRIATE CONSULTANTSTOREVIEW ANDINVESTIGATE THECONDITIONOF THEPREMISES. SAID INVESTIGATIONSHOULDINCLUDE BUTNOT BE DRAFT - Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.

REVISED – Administrative changes made since original posting on 3/10/2023 shown in blueline. ________ ________
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INITIALS INITIALS
©2019AIRCRE. AllRightsReserved. Last Edited:2/27/20231:07PM STN-27.30,Revised10-22-2020 Page16of16
LIMITEDTO: THEPOSSIBLE PRESENCEOFHAZARDOUS SUBSTANCES,THE ZONINGOF THEPREMISES,THE STRUCTURALINTEGRITY, THECONDITIONOF THEROOF ANDOPERATING SYSTEMS,AND THESUITABILITYOF THEPREMISES FORLESSEE'S INTENDEDUSE.

WARNING: IFTHE PREMISESARELOCATED INA STATEOTHER THANCALIFORNIA,CERTAIN PROVISIONSOF THELEASEMAY NEEDTO BEREVISEDTO COMPLYWITH THELAWS OFTHE STATEINWHICH THEPREMISES ARELOCATED.

The parƟes heretohave executedthisLease atthe placeand onthedates speciﬁedabove theirrespecƟvesignatures.

Executedat:

On:

ByLESSOR:

PMI Partners LLC, a California limited
liability company, or its
successor-in-interest
By:

NamePrinted:

Title:

Phone:

Fax:

Email:

By:

NamePrinted:

Title:

Phone:

Fax:

Email:

Address:

FederalID No.:

Executedat:

On:

ByLESSEE:
the City of San Jose, a municipal
corporation
By:

NamePrinted:

Title:

Phone:

Fax:

Email:

By:

NamePrinted:

Title:

Phone:

Fax:

Email:

Address:

FederalID No.:

BROKER
n/a
AƩn: n/a
Title:

Address:

Phone:

Fax:

Email:

FederalID No.:

BrokerDRE License#: n/a
AgentDRE License#: n/a
BROKER
n/a
AƩn: n/a
Title:

Address:

Phone:

Fax:

Email:

FederalID No.:

BrokerDRE License#: n/a
AgentDRE License#: n/a
AIRCRE * hƩps://www.aircre.com * 213-687-8777 * [email protected] NOTICE: Nopart oftheseworks maybe reproducedin anyformwithout permissionin wriƟng.

DRAFT - Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.

REVISED – Administrative changes made since original posting on 3/10/2023 shown in blueline. ________ ________
________ ________

INITIALS INITIALS
©2017AIRCRE. AllRightsReserved. LastEdited:2/27/2023 12:20PM APA-1.03,Revised10-22-2020 Page1of2

ADDENDUMTOTHE STANDARDOFFER,AGREEMENTAND ESCROWINSTRUCTIONS

FORPURCHASEOF REALESTATE
Date:

ByandBetween
Buyer: City of San Jose, a municipal corporation
Seller: PMI Partners LLC, a California limited liability company PropertyAddress: [address of Affordable Housing Parcel TBD, a portion of 455 S.

Second Street, San Jose, California
(streetaddress, city,state, zip)
This Addendum is aƩached and made part of the above-referenced Agreement (said Agreement and the Addendum are hereinaŌer collecƟvely referred to as the "Agreement"). In the event of any conﬂict between the provisions of this Addendum and the printed provisions of the Agreement, this Addendum shall control.

28. Section 3.1 is replaced and superseded by the following:
“The purchase price to be paid by Buyer to Seller for the Property shall be Seller’s Actual Development & Construction Costs (“Costs”) plus a 15% fee on such Costs (“Purchase Price”). Costs shall include all land acquisition costs, acquisition financing costs and expenses, construction financing costs and expenses, hard costs (i.e., spending that directly relates to the physical construction of the Project, e.g., building materials costs; labor costs; furniture, fixtures, and equipment costs; etc. ) and soft costs (i.e., indirect or intangible expenses that relate to construction but are incurred in the completion of construction, e.g., architect and engineering costs, planning and research costs, survey costs, design fees, construction administration costs, insurance, legal fees, development management fee, etc.). The amount of such Costs shall be subject to review by Buyer in connection with the establishment of the amount of the purchase price. However, the confidentiality of such material shall be maintained, and cost records shall not become part of the public records, pursuant to the AIR CRE Confidentiality Agreement appended to the Agreement."

29. The first sentence of Section 4.1 shall be superseded and replaced by the following:
“Five (5) business days after both Parties have executed this Agreement and the executed Agreement has been delivered to Escrow Holder, Buyer shall deliver funds to Escrow Holder in the sum which is 3% of the Purchase Price.”

30. The last sentence of Section 8.5 is superseded and replaced by the following:
“For the avoidance of doubt, Seller shall pay the base premium for an 2021 ALTA Owner’s Policy of Title Insurance, with coverage in the amount of the Purchase Price; Buyer shall be responsible for the premiums associated with extended coverage endorsements that Buyer may reasonably require, if any; Seller shall pay Documentary Transfer Taxes; and Seller and Buyer shall equally fund payment of City Transfer Tax and San Jose City Conveyance Tax, if any."

31. The following Section 9.1(r) is added to the Agreement:
“Final Inspections. The improvements at the Property that require the issuance of building permits shall have passed final inspection by the San Jose Building Division, or such other governmental entity with jurisdiction over the Property.”
DRAFT - Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.

REVISED – Administrative changes made since original posting on 3/10/2023 shown in blueline. ________ ________
________ ________

INITIALS INITIALS
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32.ThefollowingSection9.1(s)isaddedtotheAgreement:
“CertificateofOccupancy.AtemporarycertificateofoccupancyshallhavebeenissuedfortheProperty, andallconditionsonissuanceofafinalcertificateofoccupancyshallhavebeensatisfiedbySeller.”

33.ThefollowingtextisappendedtotheendofSection11.1:
“PaymentofanysupplementalbillshallbemadebySellertotheextentthatthesupplementaltax obligationisattributabletothetimeperiodpriortoclosing. Otherwise,paymentshallbemadeby Buyer.”

34.ThefollowingtextisappendedtotheendofSection12.1:
“ForpurposesofthisAgreement,Seller’swarrantiesandrepresentationsaremadebasedonthecurrent actualpersonalknowledgeofAndrewJacobson,withnoindependentdutyofinvestigationorinquiry.

NothinghereinshallimposeanypersonalliabilityonAndrewJacobsonasaresultofhisknowledge beingusedtodeterminethelevelofknowledgepossessedbySellerinrelationtothewarrantiesand representationsandwarrantiesgivenherein.”

35.ThetextinSection12.2isreplacedandsupersededbythefollowing:
“BuyeracknowledgesandagreesthathavingbeengiventheopportunitytoinspectthePropertyand reviewinformationanddocumentationaffectingtheProperty,Buyerisrelyingsolelyonitsown investigationofthePropertyandreviewofsuchinformationanddocumentation. Buyerfurther acknowledgesandagreesthatanyinformationmadeavailabletoBuyerorprovidedortobeprovidedby oronbehalfofSellerwithrespecttothePropertywasobtainedfromavarietyofsourcesandthatSeller hasnotmadeanyindependentinvestigationorverificationofsuchinformationandmakesno representationsastotheaccuracyorcompletenessofsuchinformation. Buyerfurtheracknowledges andagreesthattothemaximumextentpermittedbylaw,thesaleofthePropertyasprovidedforherein ismadeonan“asis”conditionandbasiswithallfaults,andthatSellerhasnoobligationtomake repairs,replacementsorimprovementstothePropertyexceptasmayotherwisebeexpresslystatedin thisAgreement. Buyerrepresents,warrants,andcovenantstoSeller,whichrepresentation,warranty, andcovenantshallsurvivetheCloseofEscrowandnotbemergedwiththeGrantDeed,thatBuyeris relyingsolelyuponBuyer’sowninvestigationofthePropertyandthatBuyerhasfullysatisfieditselfasto thesame.”
AIRCRE * hƩps://www.aircre.com * 213-687-8777 * [email protected] NOTICE: Nopart oftheseworks maybe reproducedin anyformwithout permissionin wriƟng.

DRAFT - Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.

REVISED – Administrative changes made since original posting on 3/10/2023 shown in blueline. ________ ________
________ ________

INITIALS INITIALS
©2017AIRCRE. AllRightsReserved. LastEdited:2/27/2023 12:20PM CA-1.02,Revised10-22-2020 Page1 of2

CONFIDENTIALITYAGREEMENT
ThisAgreement ("Agreement")is madeandentered intoby andbetween PMI Partners LLC, a California limited liability company, or its successor-in-interest ("Owner"or"Lessor")and City of San Jose, a municipal corporation ("PotenƟalBuyer"or"Lessee" ) andshallbe eﬀecƟveas of .

WHEREAS,Owner ownscertain realpropertycommonly knownas (streetaddress, city,state,zip) [address of Affordable Housing Parcel TBD, a portion of 455 S. Second Street, San Jose, California ("Property"),and WHEREAS, PotenƟal Buyeris consideringacquiringorleasingthePropertyfromOwner,and WHEREAS,inordertoevaluatewhetherornottoacquire orleasetheProperty PotenƟalBuyer wantsOwner toprovide PotenƟal Buyerwith certain informaƟon and/ordocuments,
NOWTHEREFORE, in consideraƟon ofthepromises containedherein andother goodandvaluable consid eraƟon,the receiptand suﬃciency ofwhich ishereby acknowledgedOwner and PotenƟal Buyeragreeas follows:

1. Agreementto Provide InformaƟon. Owneragrees tomake availableto PotenƟal Buyercertain informaƟonanddocuments whichOwner hasin itspossession concerningthe Property. Asa condiƟon tofurnishing such informaƟon anddocumentsto PotenƟalBuyer andits "RepresentaƟves" (as deﬁned below), PotenƟal Buyeragrees totreat such informaƟonin accordancewith theprovisions ofthisAgreement. As usedhereinthe term "RepresentaƟves" shallmeanwith respectto anyperson or enƟty, collecƟvelyallof suchperson's or enƟty's oﬃcers, directors,employees, aﬃliates,partners, members,representaƟves,agents, brokersor advisors,including, without limitaƟon, aƩorneys, accountants,consultants, bankersand ﬁnancialadvisors.

2. DeﬁniƟonof EvaluaƟonMaterial. Theterm "EvaluaƟonMaterial" meansall informaƟon anddoc umentaƟon concerningtheProperty whichOwner and/orits representaƟvesprovides toPotenƟal Buyerorto its RepresentaƟves andall notes,analyses,com pilaƟons, studies, interpretaƟons orotherdocuments preparedby PotenƟalBuyer orits RepresentaƟvesthatcontain, reﬂector arebased upon,inwhole orin part,the informaƟon furnishedto PotenƟalBuyeror its RepresentaƟves pursuanthereto; provided,however, thattheforegoing shallnot require PotenƟal Buyertoreveal ordisclose toOwnerin anymanner anysuchnotes, analyses, compilaƟons,studies, interpretaƟonsor otherdocumentsprepared by PotenƟal Buyeror itsRepre sentaƟves. Theterm EvaluaƟonMaterialshall notinclude informaƟonwhich isgenerally availabletothe public.

3. Useof EvaluaƟonMaterial andConﬁdenƟality.
(a) PotenƟal Buyerhereby agreesthatit andits RepresentaƟvesshall usethe EvaluaƟon Materialsolely forthepurpose of evaluaƟng whethertoacquire or leasetheProperty,thatthe EvaluaƟon Materialshallbe kept conﬁdenƟal andthat PotenƟal Buyerand its RepresentaƟves shallnotdisclose anyof the EvaluaƟon Materialin anymanner whatsoeverand,that such informaƟon shallbe disclosedonlyto suchof Pot enƟalBuyer's RepresentaƟveswhoneed toknowsuch informaƟonfor thesole purposeof evaluaƟng thepurchaseorleaseofthePropertyandwhoareinformedthatsuch informaƟon is conﬁdenƟal. Inany event, PotenƟalBuyer shallbe responsibleforany disclosureby anyof its RepresentaƟvesof anyEvaluaƟon Materialswhichif madeby PotenƟalBuyerwould bea breachof thisAgreement, and PotenƟal Buyeragrees,at itssole expense,to takeallreasonable measuresto preventorrestrain its RepresentaƟves fromprohibitedor unauthorizeddisclosure oruse ofthe EvaluaƟon Material. Inno eventshall PotenƟal Buyeror its RepresentaƟvesuse theEvaluaƟon Materialexceptin connecƟon withthe subjectpurchaseorlease,andanyotheruseofthe EvaluaƟonMaterial isstrictly prohibited. (b) PotenƟalBuyer agreesthat, withouttheprior wriƩenconsent ofOwner,it andits RepresentaƟves(i) shallnotdisclose toany otherpersonthe factthat the EvaluaƟonMaterial hasbeen madeavailableto PotenƟalBuyer, thefact thatdiscussionsor negoƟaƟonsare takingplaceconcerning apossible saleofthe Propertyor anyof theterms, condiƟonsorother maƩersthen beingdiscussed withrespectthereto (includingthe statusthereof),and (ii)shall notcontactany ofOwner's orthe Property'stenants, partners,members, employees,contractors,managers, insurers,managing agents,adjoining propertyownersor lendersconcerning theProperty. (c) If PotenƟal Buyerdecides thatitdoes notwish toproceed withthepurchase, itshall promptlyinformOwner ofthat decision. In thatcase, orat any Ɵme uponthe requestof Ownerforany reason, PotenƟal Buyerand shallpromptlydeliver toOwner allE valuaƟonMaterial (andall copiesthereof)furnished toit orits RepresentaƟvesby oron behalfofOwner pursuanthereto. At such Ɵme PotenƟal Buyershall alsodestroyor deliverto Ownerall EvaluaƟon Materialprepared by PotenƟalBuyer orits RepresentaƟvesandno copythereof shallbe retained. Notwithstanding thereturn ordestrucƟonof theEvaluaƟon Material, PotenƟalBuyer andits RepresentaƟvesshall conƟnuetobe boundby PotenƟalBuyer's obligaƟonsof conﬁdenƟality andother obligaƟonshereunder.

4. Accuracyof EvaluaƟonMaterial. PotenƟalBuyer understandsand acknowledgesthat Owner, itsRepresentaƟvesand/or theBrokers (boththose represenƟng Sellerand those represenƟng PotenƟal Buyer)are notmaking any representaƟon orwarranty,express orimplied, astothe accuracyor completenessofthe EvaluaƟon Material. PotenƟalBuyer agreesthatOwner, its RepresentaƟves and/orthe Brokersshallnot haveany liabilityto PotenƟal Buyeror toanyof its RepresentaƟves relaƟngto orresulƟng fromtheuse ofthe EvaluaƟonMaterial oranyerrors thereinor omissionstherefrom. Onlythose representaƟonsor warranƟes whichare madein a ﬁnal deﬁniƟve agreementregarding thepurchase, as,when andifexecuted anddelivered shallhaveany legal eﬀect.

5. Remedies. Itis understoodandagreed thatmoney damageswouldnot bea suﬃcientremedyfor anybreach ofthis Agreementby PotenƟal Buyeror anyofits RepresentaƟvesand thatOwner shallbe enƟtled toequitable relief,including injuncƟons andspe ciﬁc performance,as aremedyfor anysuch breach. Such remedies shallnot bedeemed tobethe exclusiveremedies fora breachby PotenƟal Buyeror anyofits Repre sentaƟvesof thisAgreementbut shallbe in addiƟon toallother remediesavailable atlaw orequityto Owner.

DRAFT - Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.

REVISED – Administrative changes made since original posting on 3/10/2023 shown in blueline. ________ ________
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INITIALS INITIALS
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6. Miscellaneous.
(a) Waivers andAmendments. Nofailure ordelay byOwner inexercisingany right,power orprivilegehereunder shalloperate asawaiver thereof,nor shall anysingle or parƟal exercisethereofpreclude anyother orfuture exercisethereofor theexercise ofanyother right,power orprivilegehereunder. This Agreement maybe amendedonly withthe wriƩen consentof Ownerand PotenƟalBuyer. (b) Eﬀectof Agreement. NeitherPotenƟalBuyer norOwner noranyof their respecƟve aﬃliates is underanylegal obligaƟonof anykindwhatsoever with respectto conducƟng negoƟaƟons relaƟng toor consummaƟngthe purchaseof thePropertyby virtueof thisAgreement. Ownerreserves theright,in itssole discreƟon,to rejectany andallproposals madeby PotenƟalBuyer withregardto purchasingthe Propertyandto engagein discussionsand negoƟaƟons, andto enter intoa deﬁniƟveagreement, withregardto anyother transacƟon,with anyotherperson atany Ɵmeandwithout noƟceto PotenƟalBuyerand toterminate discussionsand negoƟaƟonswith PotenƟalBuyerat any Ɵme.
(c) GoverningLaw. The parƟesherebyagree thatthis Agreementshall begovernedby andconstrued inaccordancewith thelaws oftheState inwhich the Propertyis located. The parƟeshereby irrevocablyconsent tothe exclusivejurisdicƟonof thestate courtslocatedin theState inwhichthe Propertyis locatedfor any acƟons,suits orproceedings arisingoutof or relaƟng tothis Agreement. (d) Severability. Ifany provisionofthis Agreementis foundtoviolate anystatute, regulaƟon,rule, orderordecree ofany governmentalauthority,court, agencyor exchange,such invalidityshallnot bedeemed to aﬀect anyotherprovision hereofor thevalidityof theremainder ofthisAgreement, andsuch invalid provisionshall bedeemed deletedherefromto theminimum extentnecessary tocuresuch violaƟon. (e) Counterparts. ThisAgreement maybe executedin mulƟplecounterparts,each ofwhich shallbedeemed anoriginal buttogethershall consƟtuteone agreement. Telecopiedand PDFsignaturesmay beused inplace oforiginalsignatures onthis Agreement,andthe parƟesintend tobebound bythe signatureson suchtelecopied documentor PDFcopies. Signaturesto thisAgreement accomplishedbymeans ofelectronic signatureorsimilar technologyshall belegaland binding.
(f) EnƟre andSoleAgreement. This Agreement consƟtutesthe enƟreunderstanding andagreementbetween the parƟes withrespect tothesubject maƩer hereofand supersedesany andallprior orcontemporaneous oralor wriƩen communicaƟonswith respecthereto, allofwhich aremerged herein.

WHEREFORE,by theirsignature below,the parƟes heretoacknowledge thatthey havereviewedcarefully theterms ofthisAgreement andthey understanditis a legallybinding Agreement.

POTENTIALBUYER:

City of San Jose, a municipal corporation
By:

NamePrinted:

Title:

OWNER:

PMI Partners LLC, a California limited
liability company, or its
successor-in-interest
By:

NamePrinted:

Title:

AIRCRE * hƩps://www.aircre.com * 213-687-8777 * [email protected] NOTICE: Nopart oftheseworks maybe reproducedin anyformwithout permissionin wriƟng.

DRAFT - Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.

REVISED – Administrative changes made since original posting on 3/10/2023 shown in blueline. ________ ________
________ ________

INITIALS INITIALS
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OPTIONTOPURCHASE

STANDARDLEASEADDENDUM
Dated: ________
ByandBetween
Lessor: PMI Partners LLC, a California limited liability company, or its successor-in-interest
Lessee: the City of San Jose, a municipal corporation
PropertyAddress: [address of Affordable Housing Parcel TBD, a portion of 455 S.

Second Street, San Jose, California
(streetaddress, city,state, zip)
Paragraph: 65
(a) Lessor herebygrants toLesseean opƟonto purchasethe Premisesuponthe termsand condiƟonshereinset forth. (b) Inorder toexercise this opƟonto purchase,Lessee mustgive wriƩen noƟce of theexercise ofthe opƟon toLessor duringthe periodfrom to within three (3) years after commencement of the lease (the" OpƟon Period"), Ɵme beingofthe essence. Ifsuch noƟceis notso given,this opƟon shall automaƟcally expire. Atthesame Ɵmethe opƟonisexercised, Lesseemust delivertoLessor acashier's checkin theamountof three percent (3%) of the Initial Purchase Price payableto PMI Partners LLC, a California limited liability company, or its successor-in-interest ,asand forthe Depositreferredto inparagraph 4.1ofthe Standard Oﬀer ,Agreementand Escrow InstrucƟonsfor thePurchase ofReal Estate. (c) Theprovisions ofparagraph 39,includingthose relaƟngto Lessee'sDefault setforthin paragraph39.4 ofthisLease are condiƟons ofthis OpƟon. (d) IfLessee electsto exercisethis opƟon topurchase asprovidedabove, thetransfer of Ɵtle toLesseeshall occuron thecloseof escrow and unƟlthat Ɵmethe termsof thisLease shallremainin fullforce and eﬀect.
(e) If Lesseeelectsto exercisethis opƟonto purchase,theInitialPurchasePrice purchase priceto bepaidby Lessee shallbe Seller's Actual Development & Construction Costs ("Costs") plus a 15% fee on such Costs ("Initial Purchase Price") .
(f) Within 10days aŌer this opƟon topurchaseis exercised,Lessor andLesseeshall giveinstru cƟons toconsummate thesaleto Old Republic Title ,locatedat 275 Battery Street, Suite 1500, San Francisco, CA 94111 ,who shallactas escrowholder, on thenormal andusual escrowformsthen usedby suchescrow holder,asfollows:
(i) Escrowshall close40 or thirty (30) days after waiver or satisfaction of Buyer's Contingencies days aŌer theexercise ofthe opƟon topurchase byLessee; (ii) Lessorshalldeposit thecheck referredto inparagraph(b) intoescrow uponopeningthereof, withthe balanceofthe purchaseprice tobe depositedinto escrowno laterthan 2:00P.M.on thelast businessday priortothe expectedclosing date; (iii) The parƟesagreeto executeany addiƟonal instrucƟonsas arenormal andusual; (iv) The balanceofthe termsand condiƟonsof saleshallbe asset forthinthe AIRCRE "STANDARDOFFER,AGREEMENT ANDESCROW INSTRUCTIONSFOR THE PURCHASEOF REALESTATE", acopyof whichis aƩachedhereto, exceptforthe following: n/a andparagraphs4.2; 5;6; 9.1a,b,c,d,e,h,j,kand l;and 20, whichdo notapply.
(g) Either Lessoror Lesseeshall, uponrequestof theother, execute,acknowledgeand deliverto theothera shortform memorandumof thisLeasefor recording purposes. TheParty requesƟng recordaƟonshall beresponsible forpayment ofanyfees applicablethereto. (h) Inthe eventthat this opƟonto purchaseis notexercisedby Lesseein a Ɵmely fashion,theLessee shall,upon requestofLessor, execute,acknowledge and deliverto Lessora quitclaimdeed releasingLessee's interestin such opƟon. Lessorshall beresponsiblefor the preparaƟon ofsuchdeed andthe paymentof anyfees applicableto therecording thereof.

WARNING:

LESSEESHOULD NOTEXERCISE THISOPTIONUNTIL LESSEEHAS COMPLETEDSUCH INVESTIGATIONASMAY BEAPPROPRIATE, OBTAINEDANYNECESSARY FINANCING,AND ISOTHERWISE INAPOSITION TOCOMPLETE SUCHPURCHASE.

AIRCRE * hƩps://www.aircre.com * 213-687-8777 * [email protected] NOTICE: Nopart oftheseworks maybe reproducedin anyformwithout permissionin wriƟng.

DRAFT - Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.

REVISED – Administrative changes made since original posting on 3/10/2023 shown in blueline. ________ ________
________ ________

INITIALS INITIALS
©2017AIRCRE. AllRightsReserved. LastEdited:2/27/2023 12:20PM PI-8.03,Revised10-22-2020 Page1of2

PROPERTYINFORMATIONSHEET
(Forthe saleorleasing ofnon- residenƟal properƟes)
PREFACE:

Purpose: ThisStatement isNOTa warrantyas tothe actual condiƟonof theProperty/Premises. Thepurpose is,instead, toprovidethe brokersand the potenƟal buyer/lesseewith important informaƟon abouttheProperty/Premises whichis currentlyin theactualknowledge ofthe Ownerandwhich theOwner isrequiredby lawto disclose.

ActualKnowledge: For purposesofthis Statementthe phrase'actual knowledge'means:the awarenessof afact,or theawareness of suﬃcient informaƟon and circumstancesso asto causeoneto believethat acertain situaƟonor condiƟon probablyexists.

TOWHOM ITMAY CONCERN:

PMI Partners LLC, a California limited liability company, or its successor-in-interest ("Owner"),owns theProperty/Premises commonlyknownas (streetaddress, city,state, zip) [address of Affordable Housing Parcel TBD, a portion of 455 S. Second Street, San Jose, California locatedin theCounty of Santa Clara, California ,andgenerally describedas (describe brieﬂythe natureof thePremisesor Property) Multi-family residential building (hereinaŌer"Property"), andcerƟﬁes that:

1. MaterialPhysical Defects. Ownerhasno actualknowledge ofanymaterial physicaldefects intheProperty orany improvementsand structuresthereon, including,but notlimited totheroof, except(if thereare no excepƟonswrite "NONE"): None .

2. Equipment.

A. Owner hasnoactual knowledgethat the heaƟng, venƟlaƟng, air condiƟoning, plumbing,loadingdoors, electricaland lighƟngsystems, lifesafetysystems, securitysystems andmechanical equipment exisƟngon theProperty asof thedatehereof, ifany, arenotin good operaƟng orderand condiƟon, except(if thereare no excepƟons write"NONE"): None .

B. Ownerhasno actualknowledge ofanyleases, ﬁnancingagreements, liensorother agreementsa ﬀecƟng anyequipmentwhich isbeing includedwith the Property,except (ifthere areno excepƟons write"NONE"): None .

3. Soil CondiƟons. Owner hasnoactual knowledgethat thePropertyhas anyslipping, sliding,s eƩling, ﬂooding, pondingor anyother grading,drainageor soil problems,except (ifthere areno excepƟons write"NONE"): None .

4. UƟliƟes. Ownerrepresents andwarrantsthat theProperty isservedby thefollowing uƟliƟes(checkthe appropriateboxes) publicsewer systemandthe costof installaƟonthereof hasbeenfully paid, private sepƟcsystem, electricity, naturalgas, domesƟcwater, telephone,and other:
[TBD] .

5. Insurance. Ownerhas noactualknowledge ofany insuranceclaims ﬁled regardingthe Propertyduringthe preceding3 years,except (ifthereare no excepƟons write"NONE"): None .

6. ComplianceWith Laws. Ownerhasno actualknowledge ofanyaspect or condiƟon oftheProperty whichviolates applicablelaws, rules, regulaƟons,codes, or covenants, condiƟons or restricƟons, orofimprovements or alteraƟons madeto thePropertywithout apermit whereonewas required,or ofany unfulﬁlled orderor direcƟveof anyapplicable governmentagencyor ofany casualtyinsurance companythatany workof invesƟgaƟon, remediaƟon,repair, maintenanceorimprovement isto beperformed ontheProperty, except(if thereare no excepƟonswrite "NONE"): None .

7. HazardousSubstances andMold.

A. Owner hasnoactual knowledgeof thePropertyever havingbeen usedasa wastedump, ofthe pastorpresent existenceof anyaboveor belowground storagetanks onthe Property,orof thecurrent existenceon thePropertyof asbestos,transformers containingPCB'sor anyhazardous, toxicor infecƟous substance whosenature and/or quanƟty ofexistence,use, manufactureor eﬀect,render itsubjectto Federal,state orlocal regulaƟon, invesƟgaƟon, remediaƟon orremovalas potenƟallyinjurious topublic healthorwelfare, except(if thereare no excepƟonswrite "NONE"): None .

B. Ownerrepresentsand warrantsthat itisnot currently,and neverhasbeen engagedin thebusinessof haulingwaste, andnever storedhazardous substanceson theProperty, except(ifthere areno excepƟonswrite "NONE"): None .

C. Ownerhasno actualknowledge oftheexistence onthe Propertyof hazardouslevelsof anymold orfungi deﬁned astoxic underapplicablestate orFederal law,except (ifthere areno excepƟons write"NONE"): None .

8. FireDamage. Owner hasnoactual knowledgeof anystructureon theProperty having suﬀeredmaterial ﬁredamage, except(if thereareno excepƟonswrite "NONE"): None .

9. AcƟons,Suits orProceedings. Ownerhas noactual knowledgethatany acƟons,suits orproceedingsare pendingor threatenedbefore anycourt, arbitraƟon tribunal,governmental department,commission, board,bureau,agency orinstrumentality thatwould aﬀecttheProperty orthe rightorability ofan ownerortenant toconvey, occupyor uƟlizetheProperty, except(if thereare noexcepƟonswrite "NONE"): None .

Ownerhas notserved any NoƟcesof Defaulton anyof thetenantsof theProperty whichhavenot beenresolved except(ifthere areno excepƟonswrite "NONE"):

None .

DRAFT - Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.

REVISED – Administrative changes made since original posting on 3/10/2023 shown in blueline. ________ ________
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10. Governmental Proceedings. Ownerhas noactualknowledge ofany exisƟngorcontemplated condemnaƟon,environmental, zoning,redevelopmentagency planor otherland use regulaƟonproceedings whichcould detrimentallyaﬀect thevalue,use ando peraƟon oftheProperty, except(if thereareno excepƟonswrite "NONE"): None .

11. Unrecorded TitleMaƩers. Owner hasnoactual knowledgeof anyencumbrances,covenants, cond iƟons, restricƟons, easements,licenses,liens, chargesor other maƩers which aﬀect the Ɵtleof theProperty thatare notrecordedin the oﬃcial recordsofthe countyrecorder wheretheProperty islocated, except(if there areno excepƟonswrite "NONE"): None .

12. Leases. Owner hasno actualknowledgeof anyleases, subleasesorother tenancyagreements aﬀecƟngtheProperty, except(if thereare noexcepƟonswrite "NONE"): None other than proposed lease to City of San Jose .

13. OpƟons. Owner hasno actualknowledgeof any opƟons topurchase,rights of ﬁrst refusal,rightsof ﬁrst oﬀer orother similaragreements aﬀecƟng theProperty, except(if thereare no excepƟonswrite "NONE"): None other than option conveyed to City of San Jose .

14. Short Sale/Foreclosure. Theability oftheOwner tocomplete asaleof theProperty is conƟngent isnot conƟngent uponobtaining theconsentof one ormore lendersto conducta'short sale',i.e. asale forlessthat theamount owingonthe Property.(This paragraphonlyneeds tobe completedif thisProperty InformaƟonSheet isbeing completedin connecƟon withthe proposedsale oftheProperty) Oneor moreofany loanssecured bytheProperty is is notin foreclosure.

15. Energy Eﬃciency. TheProperty has hasnot beengranted anenergy eﬃciency raƟng or cerƟﬁcaƟonsuch asonefrom theU.S. GreenBuildingCouncil's Leadershipin Energyand EnvironmentalDesign(LEED) or Seller/Lessor doesnot knowifthe Propertyhas beengrantedsuch a raƟng or cerƟﬁcate. Ifsuch a raƟngor cerƟﬁcaƟonhas beenobtainedplease describethe raƟngor cerƟﬁcaƟonandprovide thename ofthe organizaƟon thatgranted it: n/a .

16. Other. (It willbe presumedthatthere areno addiƟonalitemswhich warrantdisclosure unlesstheyare setforth herein): n/a .

Thestatements hereinwill bereliedupon bybrokers, buyers,lessees, lendersandothers. Therefore, Ownerand/orthe Owner'sProperty Managerhasreviewed and modiﬁed thisprinted statementasnecessary toaccurately andcompletely stateallthe knownmaterial factsconcerningthe Property. Totheextent such modiﬁcaƟonsare notmade, thisstatementmay berelied uponas printed. This statement,however, shallnotrelieve abuyer orlesseeof responsibilityfor independent invesƟgaƟon ofthe Property. Owner agreesto promptlynoƟfy, in wriƟng, all appropriateparƟes ofanymaterial changeswhich mayoccurin the statementscontained hereinfrom thedatethis statementis signed unƟl Ɵtle tothe Propertyis transferred,orthe leaseis executed. Signatures tothis Statement accomplishedby meansof electronicsignatureor similartechnology shallbe legalandbinding.

Date:
(ﬁllin dateof execuƟon)
OWNER
PMI Partners LLC, a California limited
liability company, or its
successor-in-interest
By:

NamePrinted:

Title:

Buyer/lesseehereby acknowledgesreceipt ofacopy ofthis Property InformaƟon Sheeton . (Fill indatereceived)

BUYER/LESSEE
City of San Jose, a municipal corporation
By:

NamePrinted:

Title:

AIRCRE * hƩps://www.aircre.com * 213-687-8777 * [email protected] NOTICE: Nopart oftheseworks maybe reproducedin anyformwithout permissionin wriƟng.

DRAFT - Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.

REVISED – Administrative changes made since original posting on 3/10/2023 shown in blueline. ________ ________
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INITIALS INITIALS
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STANDARDOFFER,AGREEMENT ANDESCROWINSTRUCTIONS

FORPURCHASEOF RESIDENTIALINCOMEPROPERTY
(DoNotUseforaPropertyWhichContainsLessthanFiveUnits. DoNotUsefora Condominiumorfora CommonInterestDevelopment) Dated:

1. Buyer.

1.1 City of San Jose, a municipal corporation ,("Buyer")hereby oﬀersto purchasethereal property, hereinaŌer described,from theowner thereof("Seller") (collecƟvely,the" ParƟes" orindividually, a"Party"),through anescrow ("Escrow")toclose 30or n/a days aŌerthe waiveror saƟsfacƟonofthe Buyer's ConƟngencies, ("Expected ClosingDate")to beheld by Old Republic Title and Michelle Pineda, Senior Escrow Officer ("EscrowHolder") whoseaddress is 275 Battery Street, Suite 1500, San Francisco, CA 94111 ,PhoneNo. 415-248-7121 ,Facsimile No. 415-397-0199 upon theterms andcondiƟonsset forthin this agreement("Agreement"). Buyer shallhavethe rightto assignBuyer's rightshereunder,but anysuch assignmentshallnot relieveBuyer ofBuyer's obligaƟons herein unlessSeller expresslyreleases Buyer.

1.2 The term" Date ofAgreement" asusedherein shallbe thedatewhen by execuƟon anddelivery(as deﬁnedin paragraph20.2) ofthisdocument ora subsequent counteroﬀer thereto,Buyer andSellerhave reachedagreement in wriƟng wherebySelleragrees tosell, andBuyeragrees topurchase, thePropertyupon termsaccepted byboth ParƟes.

2. Property.

2.1 The realproperty ("Property")that isthesubject ofthis oﬀerconsistsof (inserta briefphysical descripƟon) Multi-family residential building islocated inthe Countyof Santa Clara, California , iscommonly knownas(street address,city, state,zip) [address of Affordable Housing Parcel TBD, a portion of 455 S. Second Street, San Jose, California andis legallydescribed as: [TBD] (APN: 467-47-095 (portion) ).

2.2 If thelegal descripƟonof thePropertyis notcomplete orisinaccurate, thisAgreement shallnotbe invalidand thelegal descripƟonshallbe completedor correctedto meetthe requirementsof Old Republic Title ("TitleCompany"), whichshall issuethe Ɵtle policy hereinaŌer described.

2.3 The Propertyincludes, atno addiƟonalcostto Buyer,the permanentimprovementsthereon, includingthose itemswhichpursuant toapplicable laware a partof theproperty, aswellas thefollowing items,if any,ownedby Sellerand atpresentlocated onthe Property:electrical distribuƟon systemsand lighƟng ﬁxtures; telephone distribuƟon systems(lines, jacksand connecƟons only);built-in appliances;plumbing ﬁxtures;ceilingfans; ﬁreplaces; heaƟng, venƟlaƟng, air condiƟoning equipment); ﬁresprinkler systems;securityand ﬁre detecƟon systems;carpets; windowcoveringsand screens; aƩached walland ﬂoor coverings;television antennas; satellitedishes; pooland spaequipment;garage dooropeners; and n/a (collecƟvely,the"Improvements").

2.4 The ﬁresprinkler monitor: is ownedbySeller andincluded inthePurchase Price, is leasedby Seller,andBuyer willneed to negoƟatea newlease withthe ﬁremonitoring company, ownershipwill bedetermined duringEscrow, or thereis no ﬁre sprinklermonitor.

2.5 Except asprovided inParagraph 2.3,thePurchase Pricedoes notincludeSeller's personalproperty, furnitureandfurnishings, and n/a allof whichshall beremoved bySellerprior toClosing.

3. PurchasePrice. SeeAddendum

3.1 The purchaseprice (" PurchasePrice") tobepaid byBuyer toSellerfor theProperty shallbe n/a ,payableas follows:
(Strikeany notapplicable)
(a) Cash downpayment, includingtheDeposit as deﬁned inparagraph 4.3(orif anall cashtrans acƟon,the PurchasePrice):
n/a
(b) Amountof "NewLoan" as deﬁnedin paragraph5.1, ifany:
n/a
(c) Buyershall take Ɵtle totheProperty subjectto and/orassume thefollowing exisƟng deed(s)of trust(" ExisƟngDeed(s) of Trust")securing the exisƟng promissorynote(s)(" ExisƟng Note(s)"):
(i) An ExisƟng Note("First Note")with anunpaidprincipal balanceas oftheClosing ofapproximately:
n/a
SaidFirst Noteis payableat n/a permonth, includinginterest attherate of n/a % perannum unƟlpaid (and/orthe enƟreunpaidbalance isdue on n/a ).
(ii) An ExisƟngNote ("SecondNote") withan unpaidprincipalbalance asof theClosingof approximately:
n/a
SaidSecond Noteis payableat n/a permonth, includinginterest attherate of n/a % perannum unƟlpaid (and/orthe enƟreunpaidbalance isdue on n/a ).
(d) Buyershall giveSeller adeedof trust(" Purchase MoneyDeedof Trust")on theproperty, tosecurethe promissorynote ofBuyer toSeller describedinparagraph 6(" Purchase MoneyNote") intheamount of:
n/a
TotalPurchase Price: n/a
DRAFT - Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.

REVISED – Administrative changes made since original posting on 3/10/2023 shown in blueline. ________ ________
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3.2 If Buyeris taking Ɵtle totheProperty subjectto, orassuming,an ExisƟngDeed ofTrustand suchdeed oftrust permitsthe beneﬁciary todemand payment offees including,but notlimitedto, points,processing fees,and appraisalfeesas a condiƟon tothetransfer ofthe Property,Buyeragrees topay suchfees uptoa maximumof 1.5%of theunpaidprincipal balanceof theapplicable ExisƟngNote.

4. Deposits.

4.1 Buyer shalldeliver hasdelivered toEscrowHolder Brokera checkinthe sumof See Addendum ,payableto EscrowHolder, tobe deliveredbyBuyerBrokertoEscrowHolderwithin2or n/a business daysaŌer both ParƟeshave executedthis Agreementandthe executed Agreementhas beendelivered toEscrowHolder, or within 2or n/a businessdays aŌerboth ParƟeshaveexecuted thisAgreement andthe executed Agreementhas beendelivered toEscrowHolder Buyershall deliverto EscrowHoldera checkin thesumof See Addendum . Ifsaidcheck isnot receivedby EscrowHolder withinsaid Ɵmeperiodthen Sellermay electto unilaterallyterminatethis transacƟonby giving wriƩen noƟce ofsuch elecƟontoEscrow Holder whereuponneither Partyshall haveanyfurther liabilityto theother underthisAgreement. Should BuyerandSeller notenter intoanagreement forpurchase and sale,Buyer's checkor fundsshall,upon requestby Buyer,be promptlyreturnedto Buyer.

4.2 AddiƟonal deposits:
(a) Within 5business days aŌerthe Dateof Agreement,Buyer shalldepositwith EscrowHolder the addiƟonalsum of n/a tobeapplied tothe PurchasePrice atthe Closing.
(b) Within5 businessdays aŌerthe conƟngencies discussedin paragraph9.1(a) through(m) areapproved orwaived,Buyer shalldeposit withEscrow Holderthe addiƟonalsum of n/a to beapplied tothe PurchasePriceat theClosing. (c) Ifan AddiƟonalDeposit isnotreceived byEscrow Holderwithin the Ɵmeperiod provided thenSellermay noƟfyBuyer,andEscrowHolder,and Brokers,in wriƟngthat, unlessthe AddiƟonalDepositis receivedby EscrowHolderwithin 2business daysfollowing said noƟce,the Escrowshall bedeemed terminatedwithout further noƟce or instrucƟons.

4.3 Escrow Holdershall depositthe fundsdepositedwith itby Buyerpursuantto paragraphs4.1 and4.2 (collecƟvely the"Deposit"), ina StateorFederally charteredbank inan interestbearingaccount whoseterm isappropriate andconsistentwith the Ɵming requirementsofthis transacƟon. Theinteresttherefrom shall accrueto the beneﬁt ofBuyer,who herebyacknowledges thatthere maybe penalƟes orinterest forfeituresifthe applicableinstrument isredeemedprior toits speciﬁedmaturity. Buyer's FederalTaxIdenƟﬁcaƟon Numberis . NOTE:Suchinterest bearingaccount cannotbeopened unƟlBuyer's FederalTax IdenƟﬁcaƟonNumber isprovided.

4.4 Notwithstanding theforegoing, within5 days aŌerEscrow Holderreceives themoniesdescribed inparagraph 4.1above,Escrow Holdershall release$100 ofsaid moniesto Sellerasand forindependent consideraƟonfor Seller's'execuƟonof thisAgreement andthe granƟng ofthe conƟngencyperiodto Buyeras herein provided. Suchindependent consideraƟonisnon-refundable toBuyer butshall becreditedto thePurchase Priceinthe eventthat thepurchaseof theProperty is completed.

4.5 Upon waiverof allof Buyer's conƟngenciesthe Depositshall becomenon-refundablebut applicableto thePurchasePrice exceptin theevent ofaSeller breach,or inthe eventthatthe Escrowis terminatedpursuant totheprovisions ofParagraph 9.1(n) (DestrucƟon,Damage orLoss) or9.1(o)(Material Change).

5. Financing ConƟngency. (Strikeif notapplicable)

5.1 This oﬀeris conƟngentupon Buyerobtainingfrom aninsurance company, ﬁnancial insƟtuƟon orother lender,acommitment tolend toBuyer asumequal toat least % ofthe PurchasePrice, ontermsacceptable toBuyer. Suchloan ("NewLoan") shallbesecured bya ﬁrstdeed oftrustor mortgageon the Property. Ifthis Agreementprovidesfor Sellerto carryback junior ﬁnancing, then Sellershall havetheright toapprove thetermsof theNew Loan. Sellershallhave 7 daysfrom receiptof thecommitment seƫng forththe proposedterms oftheNew Loanto approveordisapprove ofsuch proposedterms. IfSeller failsto noƟfy EscrowHolder, inwriƟng, ofthedisapproval withinsaid 7days itshallbe conclusivelypresumed thatSellerhas approvedthe termsofthe NewLoan.

5.2 If Buyershall failto noƟfyits Broker,Escrow HolderandSeller, inwriƟng within daysfollowing theDateof Agreement,that theNewLoan hasnot beenobtained, itshallbe conclusivelypresumed thatBuyer haseitherobtained saidNew Loanorhas waivedthis NewLoan conƟngency.

5.3 If Buyershall noƟfyits Broker,Escrow Holderand Seller,inwriƟng, withinthe Ɵmespeciﬁedin paragraph5.2 hereof,that Buyerhasnot obtainedsaid New Loan,this Agreementshall beterminated,and Buyershall be enƟtled totheprompt returnof theDeposit,plus anyinterest earnedthereon,less onlyEscrow Holder andTitle Company cancellaƟon feesandcosts, whichBuyer shallpay.

6. SellerFinancing. (PurchaseMoney Note). (Strikeif notapplicable)

6.1 If Sellerapproves Buyer's ﬁnancials (seeparagraph6.5) thePurchase MoneyNoteshall providefor interestonunpaid principalat therate of %per annum,with principalandinterest paidas follows: . The PurchaseMoneyNote andPurchase MoneyDeedof Trustshall beon thecurrentforms commonlyused byEscrow Holder,andbe juniorand subordinateonly tothe ExisƟng Note(s)and/or theNewLoan expresslycalled forbythis Agreement.

6.2 The PurchaseMoney Noteand/or thePurchaseMoney Deedof Trustshallcontain provisionsregarding thefollowing(see alsoparagraph 10.3(b)):
(a) Prepayment. Principal maybeprepaid inwhole orin partatany Ɵmewithout penalty,atthe opƟonof theBuyer. (b) LateCharge. A latechargeof 6%shall bepayablewith respectto anypayment ofprincipal,interest, orother charges,notmade within10 days aŌer itis due.
(c) DueOn Sale. Intheevent theBuyer sellsor transfers Ɵtleto theProperty orany porƟon thereof,then theSellermay, atSeller's opƟon,require the enƟreunpaid balanceof saidNoteto bepaid infull.

6.3 If thePurchase MoneyDeed ofTrustis tobe subordinatetoother ﬁnancing,Escrow Holdershall,at Buyer'sexpense prepareand recordonSeller's behalf a requestfor noƟceof defaultand/orsale withregard toeach mortgageordeed oftrust towhichit willbe subordinate.

6.4 WARNING: CALIFORNIALAW DOESNOT ALLOWDEFICIENCYJUDGEMENTS ONSELLER FINANCING. IF BUYERULTIMATELY DEFAULTSONTHE LOAN, SELLER'SSOLE REMEDYIS TOFORECLOSEON THEPROPERTY.

6.5 Seller's obligaƟonto provideﬁnancing is conƟngentupon Seller'sreasonable approvalofBuyer's ﬁnancial condiƟon. Buyerto providea current ﬁnancial statementand copiesof itsFederaltax returnsfor thelast 3yearsto Sellerwithin 10daysfollowing theDate ofAgreement. Sellerhas 10days followingreceiptof such documentaƟon to saƟsfy itselfwithregard toBuyer's ﬁnancial condiƟon andto noƟfy EscrowHolder astowhether ornot Buyer's ﬁnancial condiƟon is acceptable. IfSeller failsto noƟfy EscrowHolder, in wriƟng, ofthedisapproval ofthis conƟngencywithinsaid Ɵmeperiod, itshallbe conclusivelypresumed thatSeller hasapproved Buyer's ﬁnancial condiƟon. If Selleris notsaƟsﬁed withBuyer's ﬁnancial condiƟonor ifBuyerfails todeliver therequired documentaƟon thenSeller may noƟfy EscrowHolder in wriƟngthat SellerFinancing willnot beavailable,and Buyershall havethe opƟon, within10 daysofthe receiptof such noƟce, toeither terminatethis transacƟonor topurchasethe Propertywithout Seller ﬁnancing. IfBuyer failsto noƟfyEscrowHolder withinsaid Ɵmeperiodof its elecƟon to DRAFT - Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.

REVISED – Administrative changes made since original posting on 3/10/2023 shown in blueline. ________ ________
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terminatethis transacƟonthen Buyershallbe conclusivelypresumed tohave electedtopurchase theProperty withoutSeller ﬁnancing. If Buyerelectsto terminate, Buyer'sDeposit shallbe refundedlessTitle Companyand EscrowHolder cancellaƟonfeesand costs,all ofwhichshall beBuyer's obligaƟon.

7. RealEstate Brokers.

7.1 Each Partyacknowledges receivinga DisclosureRegardingReal EstateAgency RelaƟonship, conﬁrmsand consentsto thefollowingagency relaƟonshipsin this transacƟon withthe followingrealestate broker(s)(" Brokers") and/ortheir agents(“Agent(s)”):

Seller'sBrokerage Firm n/a License No. n/a isthe brokerof(check one): the Seller;or boththe Buyerand Seller(dualagent).

Seller'sAgent n/a LicenseNo. n/a is (checkone): theSeller's Agent(salespersonor brokerassociate); or both theSeller's Agent andthe Buyer'sAgent (dualagent).

Buyer'sBrokerage Firm n/a LicenseNo. n/a is thebrokerof (checkone): theBuyer; or boththe Buyerand Seller(dualagent).

Buyer'sAgent n/a License No. n/a is(check one): the Buyer'sAgent(salesperson orbroker associate);or both theBuyer's Agent andthe Seller'sAgent (dualagent).

The ParƟes acknowledgethat otherthanthe Brokersand Agentslisted above,thereare noother brokersoragents represenƟngthe ParƟesordue anyfees and/or commissionsunder thisAgreement. Buyershall usethe servicesof Buyer'sBrokerexclusively incon necƟon withanyand all negoƟaƟons and oﬀerswith respectto theProperty fora periodof1 yearfrom thedate insertedforreference purposesat thetopof page1.

7.2 Buyer andSeller eachrepresent andwarrantto theother thathe/she/ithas hadno dealingswithany person, ﬁrm, broker,agent orﬁnderin connecƟon withthe negoƟaƟonof thisAgreementand/or the consummaƟon ofthe purchaseandsale contemplatedherein, otherthan theBrokersand Agentsnamed in paragraph7.1, andno broker,agent orotherperson, ﬁrmor enƟty,other thansaidBrokers andAgents is/are enƟtled toanycommission or ﬁnder's feein connecƟon withthis transacƟonas theresultof anydealings oracts ofsuchParty. Buyer andSellerdo eachhereby agreetoindemnify, defend,protect andhold theother harmlessfrom andagainst anycosts,expenses orliability for compensaƟon, commissionorcharges whichmay beclaimedby anybroker, agent, ﬁnderor othersimilar party,otherthansaid namedBrokers andAgents by reasonof anydealings oractof theindemnifying Party.

8. Escrowand Closing.

8.1 Upon acceptancehereof bySeller, thisAgreement,including any counteroﬀers incorporatedhereinby the ParƟes, shall consƟtutenot onlythe agreement ofpurchase andsale betweenBuyerand Seller,but also instrucƟons toEscrowHolder forthe consu mmaƟonofthe Agreementthrough theEscrow. EscrowHolder shallnot prepareany furtherescrow instrucƟons restaƟng or amendingthe Agreementunless speciﬁcally soinstructed bythe ParƟes ora Brokerherein. Subjectto thereasonable approvalof the ParƟes,Escrow Holdermay, however,include itsstandardgeneral escrowprovisions. Inthe eventthat thereisany conﬂictbetween theprovisions ofthe Agreementandthe provisionsof any addiƟonal escrow instrucƟonsthe provisionsof theAgreementshall prevailas tothe ParƟes andthe Escrow Holder.

8.2 As soonas pracƟcal aŌer thereceiptof thisAgreement andanyrelevant counteroﬀers,Escrow Holdershallascertain theDate ofAgreement as deﬁnedin paragraphs1.2 and20.2 andadvisethe ParƟesand Brokers,in wriƟng,of thedateascertained.

8.3 Escrow Holderis herebyauthorized andinstructedto conductthe Escrowinaccordance withthis Agreement,applicablelaw andcustom and pracƟce of thecommunity inwhich EscrowHolderis located,including any reporƟng requirementsofthe InternalRevenue Code. In theevent ofa conﬂict betweenthe lawof thestate wherethe Propertyislocated andthe lawof thestatewhere theEscrow Holderislocated, thelaw ofthestate wherethe Propertyis locatedshallprevail.

8.4 Subject to saƟsfacƟon ofthe conƟngencieshereindescribed, EscrowHolder shallclosethis escrow(the "Closing")byrecording ageneral warrantydeed (a grantdeed inCalifornia) andtheother documentsrequired tobe recorded,andby disbursingthe fundsanddocuments inaccordance withthisAgreement.

8.5 Buyer andSeller shalleach payone-halfof theEscrow Holder'schargesand Sellershall paytheusual recordingfees andany requireddocumentarytransfer taxes. Sellershall paythe premiumfora standardcoverage owner'sorjoint protecƟonpolicy ofƟtle insurance.(See alsoparagraph 11.)

8.6 Escrow Holdershall verifythat allofBuyer's conƟngencieshave beensaƟsﬁedor waivedprior toClosing. The maƩers containedin paragraphs9.1 subparagraphs(b), (c),(d), (e),(g),(i), (n),and (o),9.4, 12,13,14, 16,18, 20,21,22, and24 are,however, maƩers ofagreement betweenthe ParƟesonlyand arenot instrucƟonsto EscrowHolder.

8.7 If this transacƟon isterminated fornon- saƟsfacƟonand non-waiverof aBuyer's ConƟngency, as deﬁned inParagraph9.2 ordisapproval ofany other maƩersubject toBuyer's approval,thenneither ofthe ParƟesshall thereaŌerhaveany liabilityto theotherunder thisAgreement, excepttothe extentof abreach of any aﬃrmaƟve covenantor warrantyinthis Agreement. Inthe eventofsuch terminaƟon,Buyer shall,subjectto theprovisions ofparagraph8.10, bepromptly refundedall fundsdeposited byBuyerwith EscrowHolder, lessonly the$100provided forin paragraph4.4and theTitle CompanyandEscrow Holder cancellaƟon feesand costs,all ofwhichshall beBuyer's obligaƟon. Ifthis transacƟon isterminated asaresult ofSeller's breachofthis Agreementthen Sellershall paytheTitle Companyand EscrowHolder cancellaƟonfeesand costs.

8.8 The Closingshall occuron theExpectedClosing Date,or assoon thereaŌer asthe Escrowisin condiƟonfor Closing;provided, however,thatif theClosing doesnot occurby theExpectedClosing Dateand saidDate isnotextended bymutual instrucƟonsofthe ParƟes,a Partynotthen indefault underthis Agreementmay noƟfythe otherParty,andEscrowHolder,andBrokers,in wriƟng that,unlessthe Closingoccurs within5business daysfollowing said noƟce, theEscrowshall be deemedterminated withoutfurther noƟceor instrucƟons.

8.9 Except asotherwise providedherein, the terminaƟonof Escrowshall notrelieveor releaseeither Partyfromany obligaƟonto payEscrow Holder'sfeesand costsor consƟtutea waiver,releaseor dischargeof anybreach ordefaultthat hasoccurred intheperformance ofthe obligaƟons,agreements,covenants or warranƟescontained therein.

8.10 If thisEscrowis terminatedfor anyreasonother thanSeller's breachordefault, thenas ac ondiƟonto thereturn ofBuyer's deposit,Buyershall within5 days aŌer wriƩen request delivertoSeller, atno charge,copies ofallsurveys, engineeringstudies, soilreports,maps, masterplans, feasibilitystudiesand othersimilar itemsprepared byor forBuyerthat pertainto theProperty.

9. ConƟngenciesto Closing.

9.1 IF, BEFOREEXPIRATION OFTHE APPLICABLETIME,BUYER FAILSTO PROVIDEESCROWHOLDER WRITTENNOTICE OFBUYER'SDISAPPROVAL OFANY OF

BUYER'SCONTINGENCIES ORANY OTHERMATTERTHAT ISSUBJECT TOBUYER'S APPROVALINTHIS AGREEMENT,THEN BUYERSHALLBE CONCLUSIVELYDEEMED TOHAVE SATISFIEDSUCH BUYER'SCONTINGENCIESAND/OR APPROVEDOF SUCHOTHER MATTERS. If anumber ofdaysis completedin anyofthe opƟonalspaces insubparagraphs 9.1(a) through(m),then suchnumber shallapply andoverridethe pre-printednumber, evenifthe pre-printednumber isnotstricken. The Closing ofthis transacƟonis conƟngentuponthe saƟsfacƟonor waiverof thefollowing conƟngencies:
(a) Disclosure. Seller shallmaketo Buyer,through Escrow,all oftheapplicable disclosuresrequired bylaw(See AIRCRE ("AIR")standardform enƟtled "Seller'sMandatory DisclosureStatement"; iftheProperty wasbuilt priorto 1978,then aƩach Lead-BasedPaint HazardsAddendumto thisAgreement) andprovide DRAFT - Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.

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Buyerwith acompleted Property InformaƟonSheet ("Property InformaƟon Sheet")concerning theProperty,duly executedby oronbehalf ofSeller inthecurrent formor equivalentto thatpublishedby theAIR within10 or n/a days followingthe DateofAgreement. Buyer has10days fromthe receiptof said disclosuresto approveor disapprovethe maƩers disclosed. (b) Physical InspecƟon. Buyer has10or n/a days followingthereceipt ofthe PropertyInform aƟon Sheetorthe Dateof Agreement,whichever islater, tosaƟsfy itselfwithregard tothe physicalaspects andsizeof theProperty. Sellerrecommends thatthe Buyerhavethe Propertyinspected withregard tothe possiblepresence ofwood destroyingpestsand organismsby alicensed structuralpestcontrol company. Anysuchreport shallbe paidforby Buyer. (c) HazardousSubstance CondiƟonsReport. Buyerhas 30or n/a days followingthereceipt ofthe Property InformaƟonSheet orthe Dateof Agreement,whichever islater, tosaƟsfyitself withregard tothe environmentalaspectsof theProperty. Sellerrecommends thatBuyer obtainaHazardous Substance CondiƟonsReport concerningthe Propertyandrelevant adjoining properƟes. Any suchreportshall bepaid forbyBuyer. A "HazardousSubstance"for purposesof thisAgreement is deﬁned asanysubstance whosenature and/or quanƟty ofexistence,use, manufacture,disposal or eﬀect,render itsubject toFederal,state orlocal regulaƟon, invesƟgaƟon, remediaƟon or removalas potenƟally injuriousto publichealth orwelfare. A" Hazardous SubstanceCondiƟon"for purposesof this Agreementis deﬁnedas theexistenceon, underor relevantlyadjacent totheProperty ofa HazardousSubstancethat wouldrequire remediaƟonand/orremoval underapplicable Federal,state orlocallaw.
(d) Soil InspecƟon. Buyer has30or n/a days followingthereceipt ofthe Property InformaƟon Sheetorthe Dateof Agreement,whicheveris later,to saƟsfyitself withregardto the condiƟon ofthe soilsonthe Property. Sellerrecommendsthat Buyerobtain asoiltest report. Anysuch reportshallbe paidfor byBuyer. Seller shallprovideBuyer copiesof anysoils reportthatSeller mayhave within10days followingthe DateofAgreement. (e) Governmental Approvals. Buyer has30 or n/a daysfollowingthe Dateof Agreementto saƟsfy itselfwith regardtoapprovals andpermits fromgovernmental agenciesor departmentswhichhave ormay have jurisdicƟon overtheProperty andwhich Buyerdeemsnecessary ordesirable in connecƟonwith itsintended useof theProperty,including, butnot limitedto, permitsandapprovals requiredwith respecttozoning, planning,building andsafety, ﬁre, police, handicappedand Americanswith DisabiliƟesActrequirements, transportaƟonand environmentalmaƩers. (f) CondiƟons ofTitle. EscrowHolder shallcausea currentcommitment for Ɵtleinsurance ("TitleCommitment") concerningthe Propertyissuedby the TitleCompany, aswell aslegiblecopies ofall documentsreferred tointhe TitleCommitment (" UnderlyingDocuments "),and ascaled anddimensionedplot showing the locaƟon ofany easementstobe deliveredto Buyerwithin 10or n/a daysfollowing theDateof Agreement. Buyerhas10 daysfrom thereceipt ofthe TitleCommitment, theUnderlying Documentsandthe plotplan to saƟsfy itselfwithregard tothe c ondiƟonof Ɵtle. The disapprovalbyBuyer ofany monetary encumbrance,which bythe termsofthis Agreementis notto remainagainstthe Property aŌer theClosing,shall notbe consideredafailure ofthis conƟngency,as Sellershall havethe obligaƟon,atSeller's expense,to saƟsfyand removesuchdisapproved monetaryencumbrance atorbefore theClosing. (g) Survey. Buyer has30 or n/a days followingthe receiptofthe TitleCommitment andUnderlyingDocuments to saƟsfy itselfwith regardto anyALTA Ɵtlesupplement basedupona surveyprepared toAmerican LandTitle AssociaƟon ("ALTA")standards foranowner's policyby alicensedsurveyor, showing thelegal descripƟonand boundarylinesof theProperty, anyeasements ofrecord,and anyimprovements, poles,structuresand thingslocated within10feet ofeither sideof theProperty boundarylines. Anysuch surveyshall bepreparedat Buyer's direcƟon andexpense. IfBuyer hasobtaineda surveyand approvedthe ALTA Ɵtle supplement,Buyer mayelect withintheperiod allowedfor Buyer'sapproval ofasurvey tohave anALTAextended coverageowner's formof Ɵtle policy,in whichevent Buyershall payany addiƟonalpremium aƩributable thereto. (h) ExisƟngLeases andTenancy Statements. Seller shallwithin 10or n/a daysfollowing theDate ofAgreementprovide bothBuyer andEscrow Holderwith legiblecopies ofallleases, subleasesor rentalarrangements (collecƟvely,"ExisƟngLeases") aﬀecƟngthe Property,andwith atenancy statement ("Estoppel CerƟﬁcate") inthe latestformor equivalentto thatpublished bytheAIR, executedby Sellerand/oreach tenantand subtenantofthe Property. Sellershall useits best eﬀorts tohaveeach tenantcomplete andexecute anEstoppel CerƟﬁcate. If anytenantfails orrefuses toprovidean Estoppel CerƟﬁcate thenSeller shall completeand executean Estoppel CerƟﬁcatefor thattenancy. Buyer has10days fromthe receiptofsaid ExisƟngLeases andEstoppel CerƟﬁcates to saƟsfy itselfwith regardto the ExisƟng Leasesandany othertenancy issues.
(i) Owner's AssociaƟon. Seller shallwithin 10or n/a daysfollowing theDateof Agreementprovide Buyerwith astatementand transfer packagefrom anyowner's associaƟonservicingthe Property. Suchtransfer packageshallat aminimum include:copiesof the associaƟon's bylaws, arƟclesof incorporaƟon,current budgetand ﬁnancialstatement. Buyerhas 10days fromthereceipt ofsuch documentsto saƟsfy itselfwith regardtothe associaƟon. (j) OtherAgreements. Sellershall within10 or n/a days followingthe DateofAgreement provideBuyer withlegiblecopies ofall other agreements("Other Agreements")known toSellerthat will aﬀect theProperty aŌerClosing. Buyerhas 10daysfrom thereceipt ofsaidOther Agreementsto saƟsfy itselfwith regardto suchAgreements.
(k) Financing. Ifparagraph5 hereofdealing witha ﬁnancing conƟngency has notbeenstricken, the saƟsfacƟon orwaiverof suchNew Loan conƟngency. (l) ExisƟngand newPurchase MoneyNotes. Ifparagraph 3.1(c)has notbeenstricken, Sellershall within10or n/a days followingthe Dateof Agreementprovide Buyerwith legiblecopiesof the ExisƟng Notes, ExisƟng DeedsofTrust andrelated agreements (collecƟvely,"Loan Documents")to whichthe Propertywill remainsubject aŌertheClosing. Escrow Holdershall promptlyrequestfrom theholders ofthe ExisƟng Notesa beneﬁciarystatement(" Beneﬁciary Statement") conﬁrming: (1)the amountofthe unpaidprincipal balance,the currentinterestrate, andthe datetowhich interestis paid,and(2) thenature and amountof anyimpounds heldbythe beneﬁciaryin connecƟonwith suchloan. Buyerhas 10or n/a daysfollowing thereceiptof theLoan Documentsand BeneﬁciaryStatements tosaƟsfy itselfwithregard tosuch ﬁnancing. Buyer's obligaƟonto closeis condiƟoneduponBuyer beingable topurchasethe Property without acceleraƟon orchange intheterms ofany ExisƟngNotes orchargesto Buyerexcept asotherwiseprovided inthis Agreementorapproved byBuyer, provided, however,Buyer shallpay thetransferfee referredto inparagraph 3.2hereof. Likewiseif Selleristo carryback aPurchaseMoney Notethen Sellershall within10or n/a daysfollowing theDate ofAgreementprovide Buyerwith acopyof theproposed PurchaseMoney NoteandPurchase MoneyDeed ofTrust. Buyerhas 10or n/a days fromthereceipt ofsuch documentsto saƟsfyitselfwith regard totheform andcontent thereof. (m) PersonalProperty . In theeventthat anypersonal propertyis includedinthe PurchasePrice, Buyerhas10 or n/a daysfollowingthe Dateof Agreementto saƟsfyitself withregardto the Ɵtle condiƟon of suchpersonalproperty. Seller recommendsthatBuyer obtaina UCC-1report. Anysuch reportshall be paidfor byBuyer. Sellershall provideBuyer copiesof anyliensor encumbrances aﬀecƟng suchpersonalproperty thatit isawareof within10 or n/a days followingthe Dateof Agreement.
(n) DestrucƟon,Damage orLoss. Subsequentto theDate ofAgreementand priorto Closingthere shallnothave occurreda destrucƟonof,or damageor lossto, theProperty orany porƟon thereof,from anycause whatsoever,whichwould costmore than$10,000.00to repairor cure. If thecost ofrepair orcureis $10,000.00or less,Seller shallrepairor curethe lossprior totheClosing. Buyer shallhavethe opƟon,within 10days aŌer receiptof wriƩen noƟce ofaloss cosƟng more than $10,000.00 to repair or cure, to either terminate this Agreement or to purchase the Property notwithstanding such loss, but withoutdeducƟonor oﬀset againstthe PurchasePrice. Ifthe costto repairor cureismore than$10,000.00, andBuyerdoes notelect toterminatethis Agreement,Buyer shallbe enƟtledtoany insuranceproceeds applicableto suchloss. Unlessotherwise noƟﬁedin wriƟng,EscrowHolder shallassume nosuch destrucƟon, damageor losshasoccurred prior DRAFT - Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.

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toClosing.
(o) MaterialChange. Buyer shallhave10 daysfollowing receiptof wriƩen noƟce of aMaterialChange withinwhich to saƟsfy itselfwithregard tosuch change. "MaterialChange" shallmeana substanƟaladverse changein theuse,occupancy, tenants, Ɵtle, or condiƟonof theProperty thatoccurs aŌer thedate ofthis oﬀerand priorto theClosing. Unlessotherwise noƟﬁedin wriƟng,EscrowHolder shallassume thatnoMaterial Changehas occurredpriorto theClosing. (p) SellerPerformance. The deliveryofall documentsand thedueperformance bySeller ofeach andeveryundertaking andagreement tobeperformed bySeller underthis Agreement.
(q) BrokerageFee. Paymentat theClosing ofsuch brokeragefeeas is speciﬁed inthisAgreement orlater wriƩen instrucƟonsto EscrowHolder executed bySeller andBrokers ("BrokerageFee"). Itis agreedby the ParƟesand EscrowHolder thatBrokersare athird party beneﬁciaryof thisAgreement insofaras the BrokerageFee isconcerned, andthatno changeshall bemade withrespectto thepayment oftheBrokerage Fee speciﬁed inthisAgreement, withoutthe wriƩen consentof Brokers.

9.2 The conƟngencies speciﬁed insubparagraphs 9.1(a)through(m) arefor the beneﬁtof, andmay bewaivedby, Buyer,and arereferred tocollecƟvelyas "Buyer's ConƟngencies" andindividually asa"Buyer's ConƟngency."

9.3 Buyer's Ɵmelyand wriƩendisapproval orcondiƟonalapproval ofa Buyer'sConƟngencyor anyother maƩerthatis subjectto Buyer'sapproval inthis Agreementshall consƟtutedisapproval thereof("DisapprovedItem(s)"). Concurrent withnoƟce ofaDisapproved Item,Buyer maymakea requestto Sellerregarding suchDisapproved Item("Buyer's Request"). If Buyerfails tomake aƟmelyand wriƩenBuyer's Request,thenthis Agreementshall terminatedueto the non-saƟsfacƟonand non-waiverof aconƟngency. Sellermay respondto aBuyer'sRequest within10 daysfollowingSeller's receiptthereof (" Seller'sResponse").

Seller'sacceptance ofa Buyer'sRequestshall amendthis Agreementaccordingly. IfSeller failsto providea Ɵmely and wriƩen Seller'sResponse,then Seller's Responseshall bedeemed tobea rejecƟonof Buyer'sRequest. Buyermay, within10 daysfollowingthe earlierof Buyer'sreceiptof aSeller's Response(which isnot anacceptance ofBuyer's Request)orthe dateof Seller'sdeemed rejecƟonofa Buyer'sRequest ("Buyer'sReplyPeriod "), reply toaSeller's Response("Buyer's Reply")and electto (i)terminatethis Agreementdue tothe non- saƟsfacƟonandnon-waiver ofthe applicable conƟngency,(ii) acceptthe Seller'sResponsein which eventthis Agreementshall beamendedaccordingly, or(iii) withdrawBuyer's Requestandwaive theDisapproved Iteminwhich eventBuyer shallacceptthe Property subjectto theDisapproved Item. If Buyerfails toprovide aƟmelyand wriƩenBuyer's Reply,thenBuyer shallbe deemedtohave electedto terminatethis Agreement asof theend oftheBuyer's ReplyPeriod. The dateBuyeraccepts aSeller's Responseorwithdraws aBuyer's Requestandwaives aDisapproved Itemshall bethedate ofBuyer's approvalof theDisapprovedItem. A Partyshall providetoEscrow Holdercopy ofall noƟces ofa DisapprovedItem,Buyer's Request,Seller's Responseand Buyer'sReply andEscrow Holdershallpromptly providecopies thereofto theotherParty. Unless the ParƟesin wriƟngagree otherwise,ifthe ExpectedClosing Date isa speciﬁccalendar dateanda Buyer'sReply Periodexpires aŌersuch speciﬁc calendardate, thennotwithstandingparagraph 1.1,the ExpectedClosingDate shallbe extendedto be3 businessdays aŌer theearlier ofthe dateBuyerwithdraws aBuyer's Requestandwaives theapplicable DisapprovedItemor Buyeraccepts the applicableSeller's Response.

9.4 The ParƟesacknowledge thatextensive local,stateand Federal legislaƟon establishbroadliability uponowners and/orusersof realproperty forthe invesƟgaƟonand remediaƟonof HazardousSubstances. The determinaƟon ofthe existenceofa HazardousSubstance CondiƟonand theevaluaƟonof theimpact of sucha condiƟonare highlytechnicaland beyondthe experƟseof Brokers. TheParƟesacknowledge thattheyhave beenadvised byBrokersto consulttheir own technicaland legalexperts withrespectto thepossible presenceof HazardousSubstanceson theProperty oradjoining properƟes, andBuyer andSellerare not relyingupon any invesƟgaƟon byorstatement ofBrokers withrespect thereto. The ParƟeshereby assumeallresponsibility forthe impactofsuch Hazardous Substancesupon their respecƟve interestsherein.

10. Documents andOther ItemsRequiredat orBefore Closing.

10.1 Five dayspriorto theClosing dateEscrowHolder shallobtain anupdatedTitle Commitmentconcerning thePropertyfrom theTitle Companyand provide copiesthereof toeach ofthe ParƟes.

10.2 Seller shalldeliverto EscrowHolder in Ɵmefor deliveryto Buyeratthe Closing:
(a) Grant orgeneral warrantydeed,duly executedand inrecordable form,conveyingfee Ɵtleto thePropertyto Buyer. (b) Ifapplicable, the Beneﬁciary Statementsconcerning ExisƟng Note(s). (c) Ifapplicable, the ExisƟng LeasesandOther Agreementstogether withduly executedassignmentsthereof bySeller andBuyer. Theassignment of ExisƟngLeases shallbe onthemost recentAssignment and AssumpƟon ofLessor'sInterest inLease formpublishedby theAIR oritsequivalent. (d) An aﬃdavit executedby Sellertothe eﬀectthat Sellerisnot a"foreign person"within themeaningof InternalRevenue Code SecƟon1445 or successorstatutes. If Sellerdoesnot providesuch aﬃdavitin formreasonably saƟsfactory toBuyer atleast3 businessdays priortothe Closing,Escrow Holdershall at theClosing deductfrom Seller'sproceedsand remitto theInternal RevenueServicesuch sumas isrequiredby applicableFederal lawwithrespect topurchases from foreignsellers.
(e) If thePropertyis locatedin California,an aﬃdavitexecutedby Sellerto the eﬀectthat Selleris nota''nonresident" withinthe meaningof California Revenueand TaxCode SecƟon18662or successorstatutes. If Sellerdoesnot providesuch aﬃdavitinform reasonably saƟsfactory toBuyerat least3 businessdays priorto theClosing, EscrowHoldershall atthe Closingdeduct fromSeller'sproceeds andremit totheFranchise TaxBoard suchsumas isrequired bysuch statute. (f) If applicable,abill ofsale, dulyexecuted,conveying Ɵtleto anyincludedpersonal propertyto Buyer. (g) If theSeller isa corporaƟon,aduly executedcorporate resoluƟonauthorizingthe execuƟonof thisAgreementand thesale ofthe Property. (h) Keysand/or othermeans tooperateall locks,security systems,alarms,mailboxes andgarage doors (collecƟvely "Keys")

10.3 Buyer shalldeliverto Sellerthrough Escrow:
(a) The cash porƟon ofthePurchase Priceand such addiƟonal sumsasare requiredof Buyerunderthis Agreementshall bedepositedby Buyerwith EscrowHolder, byfederal fundswiretransfer, orany othermethod acceptabletoEscrow Holderin immediatelycollectablefunds, nolater than2:00P.M. onthe businessday priorto theExpectedClosing Dateprovided, however,that Buyershallnot berequired todepositsuch moniesinto Escrowifat the Ɵme setfor the depositof suchmonies Sellerisin defaultor hasindicated thatitwill notperform anyofits obl igaƟonshereunder. Instead,in suchcircumstances inorder toreserve itsrights toproceed Buyerneedonly provideEscrow withevidence establishingthatthe requiredmonies wereavailable. (b) Ifa PurchaseMoney NoteandPurchase MoneyDeed ofTrustare calledfor bythis Agreement,theduly executedoriginals ofthosedocuments, the PurchaseMoney Deedof Trustbeingin recordableform, togetherwith evidenceof ﬁre insuranceon theimprovementsin theamount ofthefull replacementcost namingSeller asa mortgagelosspayee, anda realestate taxservicecontract (atBuyer's expense),assuringSeller of noƟce ofthestatus ofpayment ofreal property taxesduring thelife ofthePurchase MoneyNote.
(c) TheAssignment and AssumpƟon ofLessor'sInterest inLease form speciﬁed inparagraph10.2(c) above,duly executedbyBuyer. (d) AssumpƟonsduly executedbyBuyer ofthe obligaƟonsof Sellerthataccrue aŌerClosing underanyOther Agreements. (e) If applicable,a wriƩen assumpƟon duly executedby Buyerofthe loandocuments withrespectto ExisƟngNotes. (f) If theBuyeris a corporaƟon, adulyexecuted corporate resoluƟon authorizingthe execuƟon ofthis Agreementand thepurchaseof theProperty.

10.4 At Closing,EscrowHolder shall:(i) deliverallKeys toBuyer, and(ii)cause tobe issuedtoBuyer astandard coverage(or ALTAextended,if electedpursuant DRAFT - Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.

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to9.1(g)) owner'sform policyof Ɵtle insurance eﬀecƟve asof theClosing,issued bythe TitleCompanyin thefull amountofthe PurchasePrice, insuring Ɵtle tothe Propertyvested inBuyer, subjectonlyto the excepƟons approvedby Buyer. In theevent thereisa PurchaseMoney DeedofTrust inthis transacƟon,the policyof Ɵtle insuranceshall bea joint protecƟonpolicy insuringboth Buyerand Seller.

IMPORTANT:IN APURCHASE OREXCHANGEOF REALPROPERTY, ITMAY BEADVISABLETO OBTAINTITLE INSURANCEINCONNECTION WITHTHE CLOSEOF ESCROWSINCE THEREMAY BEPRIORRECORDED LIENSAND ENCUMBRANCESWHICH AFFECTYOURINTEREST INTHE PROPERTYBEINGACQUIRED. A NEWPOLICY OFTITLE INSURANCESHOULD BEOBTAINEDIN ORDERTO ENSUREYOUR INTERESTINTHE PROPERTYTHAT YOUAREACQUIRING.

11. ProraƟons andAdjustments.

11.1 Taxes. Applicablereal propertytaxes andspecialassessment bondsshall beproratedthrough Escrowas ofthedate ofthe Closing,based uponthelatest taxbill available. The ParƟesagree toprorate asof theClosingany taxesassessed againsttheProperty bysupplemental billleviedby reasonof eventsoccurring prior tothe Closing. Paymentofthe proratedamount shallbe madepromptlyin cashupon receiptofa copyof anysupplementalbill.

11.2 Insurance. WARNING:Any insurancewhich Sellermayhave maintainedwill terminateonthe Closing. Buyerisadvised toobtain appropriateinsurance to coverthe Property.

11.3 Rentals, InterestandExpenses. Scheduled rentals,intereston ExisƟngNotes, uƟliƟes,and operaƟng expensesshall beproratedas ofthe dateof Closing.

The ParƟes agreeto promptlyadjustbetween themselvesoutside ofEscrow anyrentsreceived aŌerthe Closing.

11.4 Security Deposit. Security Depositsheld bySellershall begiven toBuyeras acredit tothecash requiredof Buyerat theClosing.

11.5 Post ClosingMaƩers. Anyitem tobeprorated thatis notdeterminedor determinableat theClosingshall bepromptly adjustedby the ParƟesby appropriatecash paymentoutside oftheEscrow whenthe amountdue isdetermined.

11.6 VariaƟonsin ExisƟngNote Balances. In theevent thatBuyer ispurchasingthe Propertysubject toan ExisƟng Deedof Trust(s),andin theevent that a BeneﬁciaryStatement asto theapplicable ExisƟng Note(s)discloses thatthe unpaidprincipalbalance ofsuch ExisƟngNote(s)at theclosing willbemore orless than theamount setforth inparagraph3.1(c) hereof(" ExisƟng Note VariaƟon"), thenthePurchase MoneyNote(s) shallbereduced orincreased byanamount equalto such ExisƟng Note VariaƟon. Ifthere isto beno PurchaseMoneyNote, thecash requiredatthe Closingper paragraph3.1(a)shall bereduced orincreased bythe amountof such ExisƟng Note VariaƟon.

11.7 VariaƟons inNewLoan Balance. Intheevent Buyeris obtainingaNew Loanand theamount ulƟmately obtainedexceeds theamount setforthin paragraph5.1, thenthe amountofthe PurchaseMoney Note,if any,shallbe reducedby theamountof suchexcess.

11.8 Owner's AssociaƟon Fees. EscrowHoldershall: (i)bring Seller'saccount withthe associaƟon currentand payanydelinquencies ortransfer feesfrom Seller'sproceeds, and(ii) payanyup frontfees requiredby the associaƟonfrom Buyer'sfunds.

12. RepresentaƟons and WarranƟes ofSellerand Disclaimers.

12.1 Seller's warranƟesand representaƟons shallsurvive theClosingand deliveryof thedeedfor aperiod of3years, andany lawsuitor acƟonbasedupon them mustbe commencedwithin such Ɵmeperiod. Seller's warranƟesand representaƟonsaretrue, materialand relieduponby Buyer and Brokersin allrespects. Seller herebymakes thefollowing warranƟesand representaƟons toBuyer andBrokers:
(a) Authority ofSeller. Selleris theowner ofthe Propertyand/orhas thefull right,powerand authorityto sell,conveyand transferthe Propertyto Buyer asprovided herein,and toperformSeller's obligaƟonshereunder. (b) MaintenanceDuring Escrowand Equipment CondiƟonAt Closing. Exceptasotherwise providedin paragraph9.1(n) hereof,Sellershall maintainthe Property unƟl theClosing initspresent condiƟon,ordinary wearand tearexcepted. (c) HazardousSubstances/Storage Tanks. Sellerhasno knowledge,except asotherwise disclosedtoBuyer in wriƟng, oftheexistence orprior existence onthe Propertyof anyHazardousSubstance, norof theexistence orpriorexistence ofany aboveorbelow groundstorage tank. (d) Compliance. Exceptas otherwisedisclosedin wriƟng,Seller hasnoknowledge ofany aspector condiƟonofthe Propertywhich violatesapplicable laws,rules, regulaƟons,codes orcovenants, condiƟons or restricƟons, orof improvementsor alteraƟons madeto thePropertywithout apermit whereonewas required,or ofany unfulﬁlledorderor direcƟveof anyapplicable governmentalagencyor casualtyinsurance companyrequiringany invesƟgaƟon, remediaƟon, repair, maintenanceor improvementbe performedonthe Property.
(e) Changes inAgreements. Priorto theClosing, Sellerwillnot violateor modifyany ExisƟng Leaseor OtherAgreement,or createany newleases or otheragreements aﬀecƟngthe Property,withoutBuyer's wriƩenapproval, whichapproval willnotbe unreasonablywithheld. (f) Possessory Rights. Seller hasno knowledgethatanyone will,at theClosing,have anyright topossession oftheProperty, exceptas disclosedbythis Agreementor otherwisein wriƟngtoBuyer.
(g) Mechanics' Liens. Thereare no unsaƟsﬁedmechanics' ormaterialmens' lienrightsconcerning theProperty. (h) AcƟons,Suits orProceedings. Sellerhas noknowledge ofany acƟons, suitsor proceedingspending orthreatenedbefore anycommission, board, bureau,agency, arbitrator,court ortribunalthat would aﬀect theProperty ortheright tooccupy or uƟlizesame. (i) NoƟceof Changes. Sellerwill promptly noƟfyBuyer andBrokers in wriƟng ofanyMaterial Change(see paragraph9.1(o)) aﬀecƟngtheProperty that becomesknown toSeller priortothe Closing.
(j) NoTenantBankruptcy Proceedings. Sellerhas no noƟceor knowledgethat anytenantof theProperty isthesubject ofa bankruptcyor insolvency proceeding.
(k) NoSeller BankruptcyProceedings . Selleris notthesubject ofa bankruptcy,insolvencyor probateproceeding. (l) PersonalProperty . Seller hasno knowledgethatanyone will,at theClosing,have anyright topossessionof anypersonal propertyincluded inthe PurchasePrice norknowledge ofanyliens orencumbrances aﬀecƟngsuch personalproperty,except asdisclosed bythisAgreement orotherwise in wriƟngto Buyer.

12.2 Buyer herebyacknowledgesthat, exceptas otherwisestatedin thisAgreement, Buyerispurchasing theProperty inits exisƟngas-iswhere-is condiƟonand will,by theƟmecalled forherein, makeor havewaivedall inspecƟonsof thePropertyBuyer believesare necessarytoprotect itsown interestin, andits contemplateduse of,the Property. TheParƟesacknowledge that,except asotherwisestated inthis Agreement,no representaƟons, inducements,promises, agreements,assurances, oralor wriƩen,concerningthe Property,or anyaspect ofthe occupaƟonal safetyand healthlaws,Hazardous Substancelaws, oranyother act,ordinance orlaw, havebeenmade byeither Party or Brokers,or relieduponby eitherParty hereto.

12.3 In theeventthat Buyerlearns thataSeller representaƟonor warrantymightbe untrueprior totheClosing, andBuyer electsto purchasetheProperty anywaythen, andin thatevent,Buyer waivesany rightthat itmayhave tobring an acƟonor proceedingagainst Selleror Brokersregardingsaid representaƟonor warranty.

12.4 Any environmentalreports,soils reports,surveys, andothersimilar documentswhich werepreparedby thirdparty consultantsandprovided toBuyer by Selleror Seller's representaƟves, havebeendelivered asan accommodaƟonto Buyerandwithout any representaƟon orwarrantyas tothe suﬃciency,accuracy, completeness,and/or validityof saiddocuments,all ofwhich Buyerrelies onatits ownrisk. Sellerbelieves saiddocuments tobeaccurate, butBuyer isadvised to DRAFT - Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.

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retainappropriate consultantsto reviewsaiddocuments and invesƟgatetheProperty.

13. Possession.

Possessionof theProperty shallbegiven toBuyer atthe Closing subjectto therights oftenants under ExisƟngLeases.

14. Buyer's Entry.

Atany Ɵmeduring theEscrowperiod, Buyer,and itsagents and representaƟves,shall havethe rightatreasonable Ɵmesand subjecttorights oftenants, toenter upon theProperty forthe purposeofmaking inspecƟons and testsspeciﬁed inthisAgreement. No destru cƟve tesƟngshall beconducted, however,withoutSeller's prior approvalwhich shallnot beunreasonablywithheld. Following anysuch entryorwork, unlessotherwise directedin wriƟng bySeller, Buyershallreturn theProperty to the condiƟon itwas inpriorto suchentry orwork, includingthere- compacƟon orremoval ofanydisrupted soilor materialasSeller mayreasonably direct. Allsuch inspecƟonsand testsand anyotherwork conductedor materialsfurnished withrespectto theProperty byorfor Buyershall bepaidfor byBuyer asand whendue andBuyer shallindemnify, defend,protectand holdharmless Sellerand thePropertyof andfrom anyandall claims, liabiliƟes, losses,expenses(including reasonable aƩorneys'fees), damages,including thoseforinjury toperson orproperty, arisingoutof orre laƟng toanysuch workor materialsorthe actsor omissionsof Buyer,its agentsor employeesin connecƟontherewith.

15. Further Documentsand Assurances.

The ParƟes shalleach, diligentlyandin goodfaith, undertakeall acƟonsandprocedures reasonablyrequired toplacethe Escrowin condiƟonforClosing asand when requiredby thisAgreement. The ParƟes agreeto provideall further informaƟon,and toexecute anddeliverall furtherdocuments, reasonablyrequiredby Escrow Holderor theTitle Company.

16. AƩorneys' Fees.

Ifany Partyor Brokerbrings anacƟon orproceeding (including arbitraƟon)involving theProperty whetherfoundedin tort,contract orequity,or todeclare rights hereunder,the PrevailingParty (ashereaŌer deﬁned) inany suchproceeding, acƟon,orappeal thereon,shall be enƟtledto reasonableaƩorneys' feesandcosts. Such feesmay beawarded inthesame suitor recoveredin aseparatesuit, whetheror notsuch acƟon orproceeding ispursuedto decisionor judgment. Theterm "PrevailingParty" shallinclude, withoutlimitaƟon,a Partyor Broker whosubstanƟallyobtains ordefeats thereliefsought, asthe casemaybe, whetherby compromise, seƩlement, judgment,or theabandonmentby theother Partyor Brokerof itsclaim ordefense. The aƩorneys' feesawardshall notbe computedin accordancewith anycourt feeschedule,but shallbe suchas tofullyreimburse all aƩorneys' feesreasonablyincurred.

17. Prior Agreements/Amendments.

17.1 This Agreementsupersedesany andall prioragreementsbetween Sellerand Buyerregardingthe Property.

17.2 Amendments tothisAgreement are eﬀecƟve onlyifmade in wriƟng andexecutedby Buyerand Seller.

18. Broker's Rights.

18.1 If thissaleis notconsummated duetothe defaultof eithertheBuyer orSeller, the defaulƟngParty shallbe liableto andshallpay toBrokers theBrokerage Feethat Brokerswould havereceivedhad thesale beenconsummated. IfBuyer isthe defaulƟngparty,payment ofsaid BrokerageFeeis in addiƟon toany obligaƟon withrespect toliquidated orotherdamages.

18.2 Upon theClosing,Brokers areauthorized topublicizethe factsof this transacƟon.

19. NoƟces.

19.1 Whenever anyParty,orEscrowHolder orBrokershereinshalldesiretogiveorserveany noƟce,demand, request,approval,disapproval orother communicaƟon,each suchcommunicaƟon shallbein wriƟngand shallbe deliveredpersonally,by messenger,or bymail,postage prepaid,to theaddressset forthin thisagreement orby facsimiletransmission,electronic signature,digital signature,or email.

19.2 Service ofanysuch communicaƟonshall bedeemedmade onthe dateofactual receiptif personallydelivered,or transmiƩedby facsimiletransmission, electronicsignature, digitalsignature, oremail. Anysuch communicaƟonsent byregularmail shallbe deemedgiven48 hours aŌer thesameis mailed.

CommunicaƟonssent byUnited StatesExpressMail orovernight courierthat guaranteenextday deliveryshall bedeemeddelivered 24hours aŌerdeliveryof the sameto thePostal Serviceorcourier. If such communicaƟon isreceivedon aSaturday, Sundayorlegal holiday,it shallbedeemed receivedon thenext businessday.

19.3 Any PartyorBroker heretomay from Ɵme to Ɵme,by noƟcein wriƟng,designatea diﬀerentaddress towhich, ora diﬀerent personor addiƟonalpersons towhom, all communicaƟons are thereaŌerto bemade.

20. DuraƟon of Oﬀer.

20.1 If thisoﬀeris notaccepted bySelleron orbefore 5:00P.M.according tothe Ɵmestandardapplicable tothe cityof San Jose onthe dateof ,itshall bedeemed automaƟcallyrevoked.

20.2 The acceptanceofthis oﬀer ,or ofanysubsequent counteroﬀerhereto, thatcreatesan agreementbetween the ParƟesas describedin paragraph1.2, shall bedeemed madeupon deliverytothe otherParty oreither Brokerherein ofaduly executed wriƟng uncondiƟonally accepƟng the lastoutstanding oﬀeror counteroﬀer.

21. LIQUIDATED DAMAGES. (ThisLiquidatedDamages paragraphis applicableonlyif iniƟaledby bothParƟes).

THEPARTIES AGREETHAT ITWOULDBE IMPRACTICABLEOR EXTREMELYDIFFICULT TOFIX,PRIOR TOSIGNING THISAGREEMENT,THE ACTUALDAMAGES WHICH WOULDBE SUFFEREDBY SELLERIFBUYER FAILSTO PERFORMITS OBLIGATIONSUNDERTHIS AGREEMENT. THEREFORE,IF,AFTER THESATISFACTION ORWAIVER

OFALL CONTINGENCIESPROVIDED FORTHEBUYER'S BENEFIT,BUYER BREACHESTHIS AGREEMENT,SELLERSHALL BEENTITLED TOLIQUIDATEDDAMAGES INTHE AMOUNTOF three percent (3%) of the purchase price . UPONPAYMENTOF SAIDSUM TOSELLER, BUYERSHALLBE RELEASED FROMANY FURTHERLIABILITY TOSELLER,AND ANYESCROW CANCELLATIONFEES ANDTITLECOMPANY CHARGESSHALL BEPAIDBY SELLER.

Buyer's IniƟals Seller's IniƟals

22. ARBITRATION OFDISPUTES. (This ArbitraƟon ofDisputes paragraphis applicableonlyif iniƟaledby both ParƟes.)

22.1 ANYCONTROVERSY ASTO WHETHERSELLERIS ENTITLEDTO LIQUIDATEDDAMAGESAND/OR BUYERIS ENTITLEDTO THERETURNOF THEDEPOSIT DRAFT - Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.

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SHALLBE DETERMINEDBY BINDINGARBITRATIONADMINISTERED BYTHE JUDICIALARBITRATION &MEDIATIONSERVICES, INC.("JAMS") INACCORDANCEWITH ITSCOMMERCIAL ARBITRATIONRULES ("COMMERCIALRULES"). ARBITRATIONHEARINGS SHALLBE HELDINTHE COUNTYWHERE THEPROPERTYIS LOCATED.

SUCHCONTROVERSY SHALLBE ARBITRATEDBYA SINGLEARBITRATOR, APPOINTEDUNDER THECOMMERCIALRULES WHOHAS HADATLEAST 5YEARS OF EXPERIENCEIN THETYPE OFREALESTATE THATIS THESUBJECT OFTHISAGREEMENT. THEARBITRATOR SHALLHEARAND DETERMINESAID CONTROVERSYIN

ACCORDANCEWITH APPLICABLELAW OFTHEJURISDICTION WHERETHE PROPERTYIS LOCATED,THEINTENTION OFTHE PARTIESASEXPRESSED INTHIS AGREEMENTAND ANYAMENDMENTS THERETO,ANDUPON THEEVIDENCE PRODUCEDAT ANARBITRATIONHEARING. PRE-ARBITRATIONDISCOVERY SHALLBE PERMITTEDIN ACCORDANCEWITH THECOMMERCIALRULES ORSTATE LAWAPPLICABLE TOARBITRATIONPROCEEDINGS. THEARBITRATOR SHALLRENDERAN AWARDWITHIN 30DAYS AFTERTHECONCLUSION OFTHE HEARING,WHICH MAYINCLUDEATTORNEYS' FEESAND COSTSTOTHE PREVAILINGPARTY PER PARAGRAPH16 HEREOFAND SHALLBEACCOMPANIED BYA REASONEDOPINION. THEFAILUREOR REFUSALOF APARTYTO PAYSUCH PARTY'SREQUIREDSHARE

OFTHE DEPOSITSFOR ARBITRATORCOMPENSATIONOR ADMINISTRATIVECHARGES SHALLCONSTITUTE AWAIVERBY SUCHPARTY TOPRESENTEVIDENCE OR

CROSS-EXAMINEWITNESSES, BUTSUCH WAIVERSHALLNOT ALLOWFOR ADEFAULT JUDGMENTAGAINSTTHE NON-PAYINGPARTY INTHEABSENCE OFEVIDENCE ANDLEGAL ARGUMENTAS THEARBITRATORMAY REQUIREFOR MAKINGAN AWARD.JUDGMENTMAY BEENTERED ONTHEAWARD INANY COURTOF

COMPETENTJURISDICTION NOTWITHSTANDINGTHE FAILUREOFA PARTYDULY NOTIFIEDOF THEARBITRATIONHEARING TOAPPEAR THEREAT .

22.2 BUYER'S RESORTTOOR PARTICIPATIONIN SUCHARBITRATIONPROCEEDINGS SHALLNOT BARSUITIN ACOURT OFCOMPETENTJURISDICTION BYTHE

BUYERFOR DAMAGESAND/OR SPECIFICPERFORMANCEUNLESS ANDUNTIL THEARBITRATION RESULTSINAN AWARDTO THESELLEROF LIQUIDATEDDAMAGES, IN WHICHEVENT SUCHAWARD SHALLACTAS ABAR AGAINSTANY ACTIONBYBUYER FORDAMAGES AND/ORSPECIFICPERFORMANCE.

22.3 NOTICE: BYINITIALINGIN THESPACE BELOWYOUARE AGREEINGTO HAVEANYDISPUTE ARISINGOUT OFTHEMATTERS INCLUDEDIN THE"ARBITRATION OFDISPUTES" PROVISIONDECIDED BYNEUTRALARBITRATION ASPROVIDED BYCALIFORNIA LAWANDYOU AREGIVING UPANYRIGHTS YOUMIGHT POSSESSTO HAVETHE DISPUTELITIGATED INACOURT ORJURY TRIAL. BYINITIALINGIN THESPACE BELOWYOUARE GIVINGUP YOURJUDICIALRIGHTS TODISCOVERY AND APPEAL,UNLESS SUCHRIGHTS ARESPECIFICALLYINCLUDED INTHE "ARBITRATIONOF DISPUTES"PROVISION. IFYOU REFUSETOSUBMIT TOARBITRATION AFTER AGREEINGTO THISPROVISION, YOUMAYBE COMPELLEDTO ARBITRATEUNDER THEAUTHORITYOF THECALIFORNIA CODEOFCIVIL PROCEDURE. YOUR

AGREEMENT
TOTHIS ARBITRATIONPROVISION ISVOLUNTARY.

WEHAVE READAND UNDERSTANDTHEFOREGOING ANDAGREE TOSUBMIT DISPUTESARISINGOUT OFTHE MATTERSINCLUDEDIN THE"ARBITRATION OFDISPUTES" PROVISIONTO NEUTRALARBITRATION.

Buyer's IniƟals Seller's IniƟals

23. Miscellaneous.

23.1 Binding Eﬀect. This Agreementshall bebindingon theParƟes withoutregardto whetheror notparagraphs21 and22 are iniƟaled bybothof the ParƟes.

Paragraphs21 and22 areeachincorporated intothis Agreementonly if iniƟaledby bothParƟes atthe Ɵme thatthe Agreementisexecuted. Signatures tothis Agreementaccomplished bymeans ofelectronicsignature orsimilar technologyshall belegaland binding.

23.2 Applicable Law;Venue. ThisAgreement shallbegoverned by,and paragraph22.3is amendedto referto,the lawsof thestate inwhichthe Propertyis located. Any liƟgaƟon or arbitraƟonbetween theParƟes heretoconcerning thisAgreementshall be iniƟated inthecounty inwhich thePropertyis located.

23.3 Time ofEssence. Timeis oftheessence ofthis Agreement.

23.4 Counterparts. ThisAgreement maybe executedbyBuyer andSeller incounterparts,each ofwhich shallbedeemed anoriginal, andall ofwhichtogether shall consƟtute oneand thesameinstrument. Escrow Holder, aŌer verifyingthatthe counterpartsare idenƟcalexceptfor thesignatures, isauthorizedand instructed tocombine thesigned signaturepageson oneof thecounterparts, whichshallthen consƟtutethe Agreement.

23.5 Waiverof JuryTrial. THEPARTIES HEREBYWAIVE THEIRRESPECTIVE RIGHTSTOTRIAL BYJURY INANYACTION ORPROCEEDING INVOLVINGTHE PROPERTYOR ARISINGOUT OFTHISAGREEMENT.

23.6 Conﬂict. Any conﬂict betweenthe printedprovisionsof thisAgreement andthe typewriƩen or handwriƩen provisionsshallbe controlledby the typewriƩenor handwriƩenprovisions. Sellerand Buyermust iniƟalany andall handwriƩen provisions.

23.7 1031 Exchange. Both Sellerand Buyeragreeto cooperatewith eachotherin theevent thateitheror bothwish to parƟcipate ina1031 exchange. Any party iniƟaƟng anexchange shallbearall costsof suchexchange. The cooperaƟng Partyshall nothaveany liability(special orotherwise)for damagesto the exchangingParty inthe eventthatthe saleis delayedand/or thatthesale otherwisefails toqualifyas a1031 exchange.

23.8 Equal HousingOpportunity. TheProperty isbeingsold incompliance withlocal,state andfederal anƟ-discriminaƟonlaws.

23.9 NOTICE REGARDINGGASAND HAZARDOUSLIQUID TRANSMISSIONPIPELINES. This noƟce isbeingprovided simplyto informyouthat informaƟon aboutthe general locaƟon ofgasand hazardousliquid transmissionpipelines isavailableto thepublic viathe NaƟonal PipelineMapping System(NPMS)Internet Website maintainedby theUnitedStates Departmentof TransportaƟonat hƩp://www.npms.phmsa.dot.gov/. To seekfurther informaƟonaboutpossible transmissionpipelines nearthe property,youmay contactyour localgas uƟlityorother pipelineoperators inthearea. Contact informaƟonforpipeline operators issearchable byZIP Codeandcounty onthe NPMSInternet Website.

24. Disclosures RegardingThe Natureofa RealEstate Agency RelaƟonship.

24.1 The ParƟesandBrokers agreethat their relaƟonship(s)shall begoverned bytheprinciples setforth intheapplicable secƟonsof theCalifornia CivilCode,as summarizedin paragraph24.2.

24.2 When enteringintoa discussionwith arealestate agentregarding arealestate transacƟon,a BuyerorSeller shouldfrom theoutset understandwhattype ofagency relaƟonshipor representaƟonithas withthe agentor agentsinthe transacƟon. BuyerandSeller acknowledgebeing advisedbythe Brokersin this transacƟon,as follows:
(a) Seller's Agent. ASeller'sagent undera lisƟngagreement withtheSeller actsas theagentfor theSeller only. A Seller'sagent orsubagent hasthe following aﬃrmaƟve obligaƟons:(1) TotheSeller: A ﬁduciary dutyof utmostcare,integrity, honesty,and loyaltyindealings withthe Seller. (2) Tothe Buyerand the Seller: a.Diligent exerciseofreasonable skillsand carein performanceofthe agent's duƟes. b.A dutyof honestandfair dealingand goodfaith. c.A dutyto disclose allfacts knownto theagentmaterially aﬀecƟngthe valueor desirabilityofthe propertythat arenotknown to,or withinthediligent aƩenƟonand observaƟonof, the ParƟes. Anagent isnotobligated toreveal toeither Partyany conﬁdenƟal informaƟon obtained fromtheother Partywhich doesnotinvolve the aﬃrmaƟve duƟes set forthabove.
(b) Buyer'sAgent. A sellingagentcan, witha Buyer'sconsent,agree toact asagent fortheBuyer only. Inthese situaƟons, theagent isnotthe Seller's agent,even ifby agreementtheagent mayreceive compensaƟonfor servicesrendered,either infull orinpart fromthe Seller. An agentacƟng onlyfor aBuyerhas DRAFT - Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.

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thefollowing aﬃrmaƟve obligaƟons. (1)To theBuyer:A ﬁduciary dutyofutmost care,integrity, honesty,andloyalty indealings withtheBuyer. (2) Tothe Buyerand theSeller: a.Diligent exerciseofreasonable skillsand carein performanceofthe agent's duƟes. b.A dutyof honestandfair dealingand goodfaith. c.A dutyto discloseall factsknown totheagent materially aﬀecƟng thevalue ordesirabilityof theproperty thatarenot knownto, orwithinthe diligent aƩenƟon and observaƟonof, theParƟes. Anagent isnot obligatedto revealtoeither Partyany conﬁdenƟal informaƟonobtained fromthe otherPartywhich doesnot involvethe aﬃrmaƟve duƟes setforth above.
(c) Agent RepresenƟng BothSeller andBuyer. Areal estateagent, either acƟngdirectly orthrough oneormore associatelicensees, canlegallybe the agentof boththe Sellerandthe Buyerin a transacƟon, butonlywith theknowledge andconsentof boththe Sellerandthe Buyer. (1)In adualagency situaƟon,the agenthas thefollowing aﬃrmaƟve obligaƟonsto boththe Sellerand theBuyer:a. A ﬁduciary dutyofutmost care,integrity, honestyandloyalty inthe dealingswith eitherSeller orthe Buyer.b.Other duƟesto theSeller andtheBuyer asstated aboveintheir r especƟve secƟons (a)or(b) ofthis paragraph24.2. (2)In represenƟng bothSeller andBuyer, theagentmay not,without theexpress permissionofthe respecƟveParty, disclosetothe otherParty conﬁdenƟal informaƟon,including, but notlimited to,facts relaƟngtoeither Buyer'sor Seller's ﬁnancial posiƟon, moƟvaƟons, bargaining posiƟon,or otherpersonal informaƟon thatmay impactprice, includingSeller's willingnessto acceptaprice lessthan the lisƟng priceorBuyer's willingnessto payaprice greaterthan theprice oﬀered. (3) Theabove duƟesofthe agentin areal estate transacƟondo notrelieve aSeller orBuyerfrom theresponsibility toprotecttheir owninterests. Buyerand Sellershould carefullyread all agreementsto assurethat theyadequatelyexpress theirunderstanding ofthe transacƟon. A realestate agentisa personqualiﬁed toadviseabout realestate. If legal ortax adviceis desired,consulta competentprofessional. Buyer hastheduty toexercise reasonablecareto protectBuyer, includingasto thosefacts aboutthe Propertywhich areknown toBuyeror withinBuyer's diligent aƩenƟon and observaƟon. BothSeller andBuyershould stronglyconsider obtainingtaxadvice froma competentprofessional becausethe federalandstate taxconsequences ofa transacƟoncanbe complexand subjecttochange. (d) FurtherDisclosures. Throughout thistransacƟonBuyer andSeller mayreceivemore thanone disclosure,depending uponthenumber ofagents assisƟngin thetransacƟon. Buyerand Sellershould eachread itscontentseach Ɵmeit ispresented,considering the relaƟonship betweenthemand thereal estate agentin this transacƟon andthatdisclosure. Buyer andSeller eachacknowledgereceipt ofa disclosureofthe possibilityof mulƟple representaƟonby theBroker represenƟngthat principal. Thisdisclosuremay bepart ofa lisƟngagreement,buyer representaƟonagreement orseparatedocument. Buyer understandsthat Broker represenƟng Buyermay alsorepresentother potenƟalbuyers, whomay consider,makeoﬀers onor ulƟmatelyacquirethe Property. Sellerunderstandsthat Broker represenƟng Sellermay alsorepresentother sellerswith compeƟng properƟes thatmaybe ofinterest tothisBuyer. Brokers havenoresponsibility with respectto anydefault orbreachhereof byeither Party. The ParƟesagree thatno lawsuitorother legalproceeding involvinganybreach ofduty, erroror omission relaƟngto thistransacƟon maybebrought againstBroker morethan oneyear aŌer theDate ofAgreementand thatthe liability(includingcourt costsand aƩorneys' fees),of anyBroker withrespectto anybreach ofduty, errororomission relaƟngto thisAgreementshall notexceed thefeereceived bysuch Brokerpursuant tothis Agreement;provided, however,that theforegoing limitaƟon oneach Broker'sliability shallnotbe applicableto anygrossnegligence orwillful misconductofsuch Broker.

24.3 ConﬁdenƟal InformaƟon. Buyer andSeller agreetoidenƟfy toBrokers as "ConﬁdenƟal"any communicaƟonor informaƟongivenBrokers thatis considered bysuch Partyto be conﬁdenƟal.

25. ConstrucƟon ofAgreement. Inconstruing thisAgreement, allheadingsand Ɵtlesare forthe convenienceofthe ParƟesonly andshallnot beconsidered apart ofthis Agreement. Wheneverrequiredby thecontext, thesingular shallincludethe pluraland viceversa. ThisAgreement shallnotbe construedas ifprepared by oneof the ParƟes, butratheraccording toits fairmeaning asawhole, asif both ParƟeshad preparedit.

26. AddiƟonal Provisions.

AddiƟonalprovisions ofthis oﬀer,ifany, areas followsor areaƩachedhereto byan addendumoraddenda consisƟngof paragraphs through . (If thereare noaddiƟonalprovisions write"NONE".)
ATTENTION: NOREPRESENTATIONOR RECOMMENDATIONIS MADEBYAIR CREOR BYANYBROKER ASTO THELEGAL SUFFICIENCY,LEGALEFFECT, ORTAX CONSEQUENCESOF THISAGREEMENT ORTHETRANSACTION TOWHICH ITRELATES. THEPARTIES AREURGED TO:

1. SEEKADVICE OFCOUNSELAS TOTHE LEGALANDTAX CONSEQUENCESOF THISAGREEMENT.

2. RETAINAPPROPRIATE CONSULTANTSTOREVIEW ANDINVESTIGATE THECONDITIONOF THEPROPERTY. SAID INVESTIGATIONSHOULDINCLUDE BUTNOT BELIMITED TO:THE POSSIBLEPRESENCEOF WOODDESTROYING PESTSOR ORGANISMSAND/ORHAZARDOUS SUBSTANCES,THE ZONINGOFTHE PROPERTY,

THEINTEGRITY ANDCONDITION OFANYSTRUCTURES ANDOPERATING SYSTEMS,WHETHER ORNOTTHE PROPERTYMEETS CURRENTCODESAND WHETHEROR NOT THEPROPERTY ISSUBJECTTO RENTCONTROL OROTHER LOCALRENTALPROPERTY REGULATIONS.

WARNING:IF THEPROPERTY ISLOCATEDIN ASTATE OTHERTHAN CALIFORNIA,CERTAINPROVISIONS OFTHIS AGREEMENTMAYNEED TOBE REVISEDTO COMPLYWITH THELAWS OFTHESTATE INWHICH THEPROPERTY ISLOCATED.

NOTE:

1. THISFORM ISNOTTO BEUSED WITHPROPERTIESSCONTAINING LESSTHAN 5RESIDENTIAL UNITS.

2. IFEITHER PARTYISA CORPORATION,IT ISRECOMMENDEDTHAT THISAGREEMENT BESIGNED BYTWOCORPORATE OFFICERS.

Theundersigned Buyer oﬀers andagreesto buythe Propertyon thetermsand condiƟonsstated andacknowledgesreceipt ofa copyhereof.

BROKER
n/a
AƩn: n/a
Title: n/a
Address: n/a
Date:

BUYER
City of San Jose, a municipal corporation
By:

NamePrinted:

Title:

DRAFT - Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.

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Phone: n/a
Fax: n/a
Email: n/a
FederalID No.: n/a
BrokerDRE License#: n/a
AgentDRE License#: n/a
Phone:

Fax:

Email:

By:

NamePrinted:

Title:

Phone:

Fax:

Email:

Address:

FederalID No.:

27. Acceptance.

27.1 Seller acceptstheforegoing oﬀerto purchasetheProperty andhereby agreestosell theProperty toBuyeron theterms and condiƟons therein speciﬁed.

27.2 In consideraƟon ofreal estatebrokerageservice renderedby Brokers,Seller agreestopay Brokersa realestateBrokerage Feein asumequal to %ofthe PurchasePrice tobedivided betweenthe Brokersas follows:Seller'sBroker %and Buyer'sBroker %. This Agreementshall serveas anirrevocable instrucƟon toEscrow Holderto paysuchBrokerage Feeto Brokersoutof theproceeds accruingtothe accountof Sellerat the Closing.

27.3 Seller acknowledgesreceiptof acopy hereofandauthorizes Brokersto delivera signedcopyto Buyer.

NOTE:A PROPERTYINFORMATION SHEETISREQUIRED TOBE DELIVEREDTO BUYERBYSELLER UNDERTHIS AGREEMENT.

BROKER
n/a
AƩn: n/a
Title: n/a
Address: n/a
Phone: n/a
Fax: n/a
Email: n/a
FederalID No.: n/a
BrokerDRE License#: n/a
Agent'sDRE License#: n/a
Date:

SELLER
PMI Partners LLC, a California limited
liability company
By:

NamePrinted:

Title:

Phone:

Fax:

Email:

By:

NamePrinted:

Title:

Phone:

Fax:

Email:

Address:

FederalID No.:

AIRCRE * hƩps://www.aircre.com * 213-687-8777 * [email protected] NOTICE: Nopart oftheseworks maybe reproducedin anyformwithout permissionin wriƟng.

DRAFT - Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.

REVISED – Administrative changes made since original posting on 3/10/2023 shown in blueline. ________ ________
________ ________

SELLER'SMANDATORYDISCLOSURE STATEMENT
(DONOTUSEINSALEOFRESIDENTIALPROPERTIESWITH1-4 UNITS)
ThisSeller's MandatoryDisclosure Statement("Disclosure")is madepursuant tothe requirementsofand shallbe apartof the STANDARD OFFER,AGREEMENT ANDESCROW INSTRUCTIONSFOR PURCHASEOFREAL ESTATE(See paragraph9.1(a) thereof)or n/a (the"Purchase Agreement")datedfor reference purposesas of , regardingthatcertain realproperty commonlyknown as(streetaddress, city,state, zip): [address of Affordable Housing Parcel TBD, a portion of 455 S. Second Street, San Jose, California ("Property")wherein PMI Partners LLC, a California limited liability company isthe Sellerand City of San Jose, a municipal corporation isthe Buyer. Note: This Disclosuredoes notreplacethe PropertyInformaƟon Sheetpublished byAIRCRE ("AIR")and, unlessnot requiredby thePurchaseAgreement, Sellershould alsoprovide BuyertheProperty Inform aƟonSheet.

1. NATURALHAZARDS DISCLOSURES. Tomakethe disclosuresrequired byCaliforniaGovernment CodeSec Ɵon 8589.3(aspecial ﬂoodhazard area),California GovernmentCode SecƟon8589.4 (damfailure inundaƟon area),California GovernmentCode SecƟons51178or 51179,and 51182(veryhigh ﬁrehazard severity zone),California PublicResources Code SecƟons4125, 4142and 4291(wildlands ﬁrearea),California PublicResources Code SecƟon2622 (earthquakefault zone),and CaliforniaPublic ResourcesCode SecƟon2696(seismic hazardzone) ("NaturalHazards Disclosures"),Sellerprovides Buyera naturalhazardsreport (" NaturalHazards Report")prepared by:
myNHDInc.,800-814-292 2, ,or JCP-LGS Hazard Disclosures , ,and the NaturalHazards Reportis aƩached.

2. EARTHQUAKESAFETY. If theimprovementson theProperty wereconstructedprior to1975 andincludestructures witheither (i)pre-cast (e.g., Ɵlt-up)concrete orreinforced masonrywalls togetherwithwood frame ﬂoors orroofs, or(ii)unreinforced masonrywalls, thenCaliforniaBusiness &Professions Code§10147; GovernmentCode §§8875.6,8875.9, 8893.2,and8893.3; andCalifornia CivilCode §2079.9requireSeller toprovide Buyeracopy ofThe CommercialProperty Owner'sGuide toEarthquake Safety(the" Booklet") publishedby theCalifornia SeismicSafetyCommission, availablethrough thefollowinglink:
. Selleris notrequired toprovide theBookletto Buyer. Sellerisrequired toprovide theBooklet toBuyer,which BookletSeller ishereby providingtoBuyer.

3. FLOODDISASTER INSURANCE. IfSelleror Seller'spredecessor-in-interest haspreviouslyreceived Federal ﬂood disasterassistanceand suchassistance was condiƟonedupon obtainingand maintainingﬂoodinsurance onthe Property,Federal law,i.e.,42 U.S.C.§5154a, mandatesthat prospecƟve purchasersbe advised thatthey willbe requiredtoobtain andmaintain suchinsurance ontheProperty andthat ifsuchinsurance isnot maintainedandthe Propertyis thereaŌerdamaged bya ﬂooddisaster, thepurchasermay berequired toreimburse theFederalGovernment forthe disasterreliefprovided. Buyer isherebyinformed thatto thebest of Seller'sknowledge, Federal ﬂood disasterassistance hasor hasnot beenpreviously receivedwithregard tothe Property. Note: ifsuch disasterassistance hasbeen received,the law speciﬁesthat therequired noƟcebe "containedindocuments evidencingthe transferofownership".

4. WATERHEATER BRACING. TheProperty does or doesnotcontain oneor morewater heatersof120 gallonsor less. If theProperty doescontainone ormore waterheaters of120gallons orless, thenas requiredbyCalifornia Healthand SafetyCode§19211, Sellerhereby cerƟﬁestoBuyer thatall suchwater heaters haveor have notbeen braced,strappedand/or anchoredin accordancewithlaw.

5. TITLEINSURANCE. If thePurchaseAgreement doesnot providethatBuyer willbe providedwith Ɵtle insurance,Buyer isstrongly urgedtoconsider purchasing Ɵtleinsurance. In accordancewithCalifornia CivilCode §1057.6,Buyer isadvisedas follows:

IMPORTANT: INA PURCHASEOREXCHANGE OFREAL PROPERTY,IT MAYBEADVISABLE TOOBTAIN TITLEINSURANCEIN CONNECTIONWITH THECLOSEOF ESCROW SINCETHERE MAYBE PRIORRECORDEDLIENS ANDENCUMBRANCES WHICHAFFECT YOURINTERESTIN THEPROPERTY BEINGACQUIRED. ANEW POLICYOFTITLE INSURANCESHOULD BEOBTAINED INORDERTO ENSUREYOUR INTERESTIN THEPROPERTYTHAT YOUARE ACQUIRING.

6. METHAMPHETAMINELABORATORY ACTIVITY. Asrequiredby CaliforniaHealth andSafetyCode §25400.28,Seller noƟﬁesBuyerthat agovernment order idenƟfyingthe Propertyas contaminatedbymethamphetamine laboratory acƟvity hasbeen receivedbySeller (copyof suchorderis aƩached),or hasnot beenreceived bySeller.

7. HAZARDOUSSUBSTANCES. If thePropertyis non- residenƟalproperty, thenasrequired byCalifornia HealthandSafety Code§25359.7 Seller noƟﬁes Buyerthat:

Sellerneither knowsnor hasreasonablecause tobelieve thatanyrelease ofhazardous substance(as suchtermsare deﬁnedby CaliforniaHealthand SafetyCode §§25320and 25316)has cometobe locatedon orbeneath theProperty,or Seller knowsorhas reasonablecause tobelievethat arelease ofhazardous substancehas cometo belocatedon orbeneath theProperty.

8. WATERCONSERVING PLUMBINGFIXTURES. For mulƟ-family residenƟal(containing morethanone unit)and commercial properƟesbuilt beforeJanuary 1,1994:

CaliforniaCivil Code§1101.5 requiresallnoncompliant plumbing ﬁxtures tobe replacedbeforeJanuary 1,2019 withwater-conservingplumbing ﬁxtures. Asrequired byCalifornia CivilCode §1101.5(e),Sellerdiscloses thatthe Property was built aŌerJanuary 1,1994 andisexempt fromthis statute; does include noncompliantplumbing ﬁxtures;or doesnotinclude anynoncompliant plumbing ﬁxtures. hƩps://www.myNHD.com
hƩps://ssc.ca.gov/forms_pubs/cog
DRAFT - Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.

REVISED – Administrative changes made since original posting on 3/10/2023 shown in blueline. ________ ________
________ ________

9. DEATHON THEPROPERTY. Asrequired byCalifornia CivilCode§1710.2, Seller doesor doesnot knowofthe deathon thePropertyof anoccupant of theProperty inthe threeyearsbefore thedate ofBuyer's oﬀertopurchase theProperty perthePurchase Agreement.

10. OTHER. n/a
Sellerbelieves the informaƟon providedinthis Disclosureby Selleris trueandcorrect tothe bestknowledgeof Selleras ofthedate ofthis Disclosure,but Sellerstates thatSeller hasexercised goodfaithin the selecƟon ofa NaturalHazardsExpert, Sellerhas notindependently veriﬁed, andSeller isnotobligated toverify, the informaƟoncontained inthe NaturalHazardsReport, andmakes no representaƟon orwarrantyas tothe truthoraccuracy ofany informaƟoncontainedin theNatural HazardsReport. Buyer agreestheNatural HazardsReport saƟsﬁesSeller's legaldutyto makethe NaturalHazardsDisclosures, theprovider oftheNatural Hazards Reportshall bedeemed tobean expertdealing with maƩers withinthescope ofits experƟsewithrespect tothe examinaƟonand wriƩen reportregarding the NaturalHazards Disclosures,and CaliforniaCivilCode §1103.4which dealswith aseller'snon-liability forerrors and/oromissionsnot withinsuch seller'spersonal knowledgeshall bedeemed toapplyto Seller.

Thehazards referencedin thisDisclosuremay limitthe abilityof theownerof theProperty todevelopthe Property,to obtaininsurance,or toreceive assistance aŌer adisaster. The mapsonwhich theNatural HazardsReport arebased esƟmate wherenatural hazardsexistand arenot deﬁniƟveindicatorsof whetheror nota propertywill be aﬀected byanatural disaster. Buyeris advisedtoobtain professionaladvice regardingthosehazards andother hazardsthatmay aﬀectthe Property.

Applicablelaws andthe areascoveredby thevarious naturalhazard zones,etc.may change. Sellershallnot berequired to noƟfyBuyer ifthe informaƟonprovided in theNatural HazardsReport becomesinaccurateas aresult ofany governmental acƟon,map revision,changed informaƟon,orother actor occurrence,unlessSeller hasactual knowledgethat the informaƟonhas becomeinaccurate. Prior totheclose ofescrow, Buyermaywish toagain checkthestatus ofthe Property. Also,Buyer isadvised toverify withappropriatelocal governmentalagencies, suchas thecityand/or countyin whichtheProperty islocated, todetermineif theyhave establishednatural hazardzones in addiƟonto thoselisted above. Signaturestothis Disclosureaccomplished bymeansof electronicsignature orsimilartechnology shallbe legaland binding. This Disclosuremay beexecuted incounterparts.

Thestatements hereinare notintendedto befull orcomplete disclosureofall possibleimpacts onBuyerand/or theProperty. Ifa maƩeris disclosedregarding theProperty, Buyeris advisedto:

1. Reviewthe enƟretyof alllawsapplicable tosuch disclosed maƩer .

2. Seekadvice ofcounsel astothe legalconsequence ofanydisclosed maƩers.

3. Retainappropriate consultantsto reviewand invesƟgate theimpact ofallsuch disclosed maƩers.

NeitherAIR CREnor anyofthe brokersmake any representaƟon, warrantyor recommendaƟon regardingthe legal suﬃciency,legal eﬀector anyotherconsequences ofthis Disclosure.

Date:

SELLER
PMI Partners LLC, a California limited
liability company
By:

NamePrinted:

Title:

Buyeracknowledges receiptof thisDisclosuretogether withthe NaturalHazards Report,theBooklet andany otherdocumentsreferenced herein(as applicable)as beingprovided toBuyer, andagreesto theabove termsand condiƟons.

Date:

BUYER
City of San Jose, a municipal corporation
By:

NamePrinted:

Title:

AIRCRE * hƩps://www.aircre.com * 213-687-8777 * [email protected] NOTICE: Nopart oftheseworks maybe reproducedin anyformwithout permissionin wriƟng.

DRAFT - Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.

REVISED – Administrative changes made since original posting on 3/10/2023 shown in blueline.

Page 1 ends

ADDENDUM NO. 1 TO STANDARD INDUSTRIAL/COMMERCIAL
SINGLE-TENANT LEASE – NET

This Addendum No. 1 to Standard Industrial/Commercial Single-Tenant Lease – Net (“Addendum”) is made and entered by and between PMI PARTNERS LLC a California limited liability company, or its successor-in-interest (“Lessor ”) and the CITY OF SAN JOSE, a municipal corporation (“Lessee”) (each a “ Party,” and collectively, “ Parties”), dated for reference as of , 20 , 2023 , is made with
reference to that certain Standard Industrial/Commercial Single- Tenant Lease – Net (“Agreement”) dated as of , 20 , 2023 . Lessor and Lessee
hereby agree that anything contained in the above-described Agreement to the contrary, the provisions set forth below will be deemed to be a part of the Agreement and shall supersede any contrary provision in the Agreement. All capitalized terms used in this Addendum, unless specifically defined herein, shall have the meanings ascribed to them in the Lease.

51. Section 1.3 is hereby amended to state:

Term: 55 years (“Original Term”) commencing (“Commencement Date”) sixty (60thirty (30 ) days after notice (“Notice”) from Lessor that all of the following have occurred: (a) notice to Lessor to Lessee as follows: (a) that PATH Ventures, a California nonprofit public benefit corporation, is no l onger a member of Lessor; (b) that all building permits necessary for the construction of the Premises (“Building Permits”) have been issued by the relevant governmental and quasi-governmental agencies with jurisdiction over the Project; and (c) construction of the amount ofPremises is substantially complete; (d) a temporary certificate of occupancy has been issued; (e) Lessor’s Actual Development & Construction Costs , defined below. have been established, so that Lessor can provide notice to Lessee of (i) the amount of Annual Base Rent for purpose or this Lease, (ii) the purchase price for the Property, in the event that Lessee elects to exercise the Option to Purchase conveyed herewith.

The Original Term shall end on the date that is 55 years after the Commencement Date (“Expiration Date”).

Westbank Projects PP (US) Corp. or its affiliate entities (“Westbank”) shall seek to maintain ownership of the Premises and/or developer entity in the event PATH Ventures is unable to secure funding for its affordable project or otherwise fails to perform its obligations as a member of Lessor. In such event, and in the event Westbank has failed to commence obtaining a majority- interest in the Premises or Lessor prior to construction or if th e construction is not completed fiveten (10) years from the date Building Permits are issued, Lessee shall have the option to terminate this Agreement. Should Lessee exercise such option; Lessee shall have no right to take possession of the Premises and shall deliver a quitclaim deed to Lessor for recording, which quitclaim deed shall be in a commercially reasonable and recordable DRAFT - Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.

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form, approved by Lessor’s title insurer.

In the event that PATH Ventures remains a member of Lessor when Building Permits are issued, the This Agreement shall terminate and shall be of no further force and effect. City shall have no right to take possession of the Premises, and shall deliver a quitclaim deed to in the event that one or more of the following occur: (a) PATH Ventures remains a member of Lessor at Commencement; (b) Lessor for recording,notifies Lessee that after PATH Ventures disassociates from Lessor, the remaining member(s) of Lessor will not acquire the land on which quitclaim deed shall Premises was to be in a commercially reasonable and recordable form, approved by Lessor’s title insurerlocated; or (c) Lessor notifies Lessee that after PATH Ventures disassociates from Lessor, the remaining member(s) of Lessor will not construct the Premises.

DRAFT - Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.

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52. The amount of Base Rent shall be established as follows:

Lessor’s Actual
Development &
Construction
Costs

x
Base Rent
Multiplier
(6%)

=
Annual Base Rent
Amount

Lessor’s Actual
Development &
Construction Costs

x Base Rent Multiplier
(6%)

= Annual Base Rent
Amount

By way of example and not limitation, if Lessor’s Actual Development & Construction Costs are $1,000,000 and the Base Rent Mu ltiplier for the project is 6%, the Annual Base Rent shall be
$60,000 per year, or $5,000 per month.

Lessee shall have the option to “buy down” the amount of Base Rent by making a lump sum payment t at Lease Commencement. Accordingly, if Lessee pays $500,000 at Lease Commencement, the Base Rent will be calculated as follows: $500,000 Actual Development & Construction Costs, multiplied by 6%, $30,000 per year, or $2,500 per month.

Lessor’s actual development & construction costs (“Actual Development & Construction Costs”) shall include all land acquisition costs, acquisition financing costs and expenses, construction financing costs and expenses, hard costs (i.e., spending that directly relates to the physical construction of the Project, e.g., building materials costs; labor costs; furniture, fixtures, and equipment costs; etc. ).) and soft costs (i.e., indirect or intangible expenses that relate to construction but are incurred in the completion of construction, e.g., architect and engineering costs, planning and research costs, survey costs, design fees, construction administration costs, insurance, legal fees, development management fee, etc.).

Lessor’s Actual Development & Construction Costs shall be subject to review by Lessee in connection with the establishment of the amount of Base Rent. However, the confidentiality of such material shall be maintained and cost records shall not become part of the public records, pursuant to the AIR CRE Confidentiality Agreement appended to the Agreement. During, and at the conclusion of, construction, Lessee may request that Lessor provide an “open-book” review of Lessor’s Actual Development & Construction Costs. At such request, Lessor shall meet and confer with officials from Lessee to review said Actual Development & Construction Costs (“True Cost Meetings”). Provided, True Cost Meetings will prohibit all electronic devices capable of capturing the information provided, and Lessor is under no obligation to provide any docu mentation that will be allowed to depart True Cost Meetings in Lessee’s possession. For clarity, the purposes of these True Cost Meetings are to provide Lessee with a true and accurate review of Lessor’s Actual Development & Construction Costs, not for the delivery and Lessee’s possession of such accounting.

DRAFT - Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.

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The Base Rent shall be adjusted on each th ird-year anniversary of the Commencement Date by an amount equal to the percentage increase in the Consumer Price Index for the San Jose- Sunnyvale- Santa Clara Micropolitan Statistical Area (“ CPI”) prepared by the Bureau of Labor Statistics, United States Department of Labor (base year average 1982-84 = 100) between the most recent CPI publication prior to the commencement of the preceding three-year period and the most recent CPI publication as of the date thirty (30) days prior to such annual adjustment in Base Rent. If the Bureau of Labor Statistics shall cease to compile or publish the CPI, then CPI shall thereafter mean such other index of prices published by the United States Government as most nearly approximates the CPI now published. All calculations made hereunder shall, if necessary, be adjusted to reflect any change in the base year used in calculating the CPI.

53. Lessee shall be the “Insuring Party” identified in Paragraph 1.8.

53. Lessee’s obligation to tender Rent shall begin fifteen (15) days prior to the Commencement Date.

54. The following Paragraph 6.4.1 is added to the Lease:

DRAFT - Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.

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54. Inspection, Compliance (Residential dwelling units).

A. Lessee shall make the residential dwelling units within the Premises available to Lessor or Lessor’s representative for the purpose of entering to make necessary or agreed repairs (including, but not limited to, installing, repairing, testing, maintaining smoke detectors and carbon monoxide devices, and bracing, anchoring or strapping water heaters, or repairing dilapi dation relating to the presence of mold); providing decorations, alterations, or improvements, or supplying necessary or agreed serv ices; or to show Premises to prospective or actual purchasers, Lessees, mortgagees, lenders, appraisers, contractors and others (collectively “ Interested Persons”). Lessee agrees that Lessor and Interested Persons maytakemay take photos of the Premises.

B. Lessor and Lessee agree that 24-hour written notice shall be reasonable and sufficient notice, except as follows: (1) 48-hour written notice is required to conduct an inspection of the Premises prior to the Lessee moving out, unless the Lessee waives the right of such notice,. (2) if Lessor has in writing informed the Lessee that the Premises are for sale and that Lessee will be notified orally to show the premises, then, for the next 120 days, notice may be given orally to show the Premises to actual or prospective purchasers, (3) no written notice is required if Lessor and Lessee orally agree to an entry for agreed services or repairs if the date and time of entry are within one week of the oral agreement, (4) no notice is re quired: (i) to enter in case of an emergency; (ii) if the Lessee is present and consents at the time of entry; or (iii) if the Lessee has abandoned or surrendered the Premises.

55. The second sentence of Paragraph 8.2(a) is stricken and replaced with the following: “

Such
insurance shall be on an occurrence basis providing single limit coverage in an amount not less than $10,000,000 per occurrence with an annual aggregate of not less than $20,000,000.”.

56. The phrase “Lessee shall add Lessor as an a dditional insured” in the third sentence of Paragraph 8.2(a) shall be replaced with the following: “

Lessee shall add Lessor and the following persons and entities as additional insureds under Lessee’s liability insurance policies: PMI Partners
LLC, and/or its successor(s)-in-interests, and those of DRAFT - Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.

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56. its/their respective members, principals, officers, directors, managers, representatives, share holders, investors, affiliates and lenders as may be specified (‘(“Additional Insureds’). ” Insureds”). . . .

57. The following text is appended to the end of Paragraph 8.2: “

57. For the avoidance of doubt, the liability insurance required by this Paragraph 8.2 shall specifically insure against risks associated with disputes between Lessee and tenants/occupants of the residential dwelling units within the Premises, including without limitation alleged wrongful eviction, violation of rent control and/or just cause for eviction ordinance(s) (if applicable), housing discrimination, habitability claims, etc.”.

58. The following text is appended to the end of Paragraph 8.7: “

58. The following persons and entities shall also have the benefit of Lessee’s indemnity obligations, as set forth in this Paragraph 8.7: PMI Partners LLC,, LLC and/or Westbank Projects PP (US) Corp and/or its successor(s)-in-interests, and those of its/their respective members, principals, officers, directors, mana gers, representatives, shareholders, investors, affiliates, and lenders as may be specified at the time of execution (“Lessor Indemnitees ”). For the avoidance of doubt, Lessee’s indemnity obligations shall extend to liabilities associated with disputes Lessee and tenants/occupants of the residential dwelling units within the Premises, including liabilities for compensatory, special, and punitive/exemplary damages that are associated with Lessee’s rental and/or leasing of the residential dwelling units within the Premises .”.

59. The following text shallis be appended to the end of Paragraph 10.1: “ ‘

“Real Property Taxes’
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Taxes” shall also include possessory interest tax, gross receipts tax, and any other tax or assessment levied against Lessee, the Premises, or the property on which the Premises is located and is attributable to the lease of the Premises by Lessee.”.

60. The following Subparagraph 12.1(h) is added to the Lease:

60. Lessor and Lessee contemplate that Lessee shall engage the services of a duly licensed, professional, and insured property management company (“Operator”) to operate the Premises for the Agreed Use.

Such engagement shall not require Lessor’s consent. Lessee shall remain a party to this Lease, fully liable for its performance. Lessee shall provide Lessor with a minimum of 60 days’ notice of the identity of its proposed Operator, and Lessee shall not permit any person or entity to serve as Operator over Lessor’s reasonable objection, which objection and the substantive basis therefore shall be communicated to Lessee within 30 days’ after Lessee provides notice to Lessor.

DRAFT - Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.

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Operator shall provide liability insurance as required by Paragraph 8.2, and Lessor and Additional Insureds and Lessor Indemnitees shall be named as additional insureds under Operator’s liability policies.

Similarly, the sublease of dwelling units within the Premises on a month-to-month basis or for a lease term of one year or less shall not require Lessor’s written consent.
month-to-month basis or for a lease term of one year or less shall not require Lessor’s written consent.

61. If at any point after mass excavation and begi nning structural improvements, Lessor fails to diligently pursue construction (other than by Force Majeure) for more than 6 weeks, Lessor and Lessee shall negotiate in good faith regarding an option for the Lessee to re-acquire the Premises, subject to the approval and consent of Lessor’s lender(s).

62.61. The following text in Paragraph 16(a): “ ‘Estoppel Certificate’ form published BY AIR CRE, plus” is replaced with ” “form published BY AIR CRE, or other commercially reasonable form of estoppel certificate (“Estoppel Certificate”) plus. ”

62. The following text is added to end of Paragraph 32. :

63. Lessor’s right of entry into occupied residential dwelling units shall be governed by Paragraph 12.1 of this Lease.

63. The following is added to the leaseLease as a new paragraph: “

64. Lessee shall be solely responsible for, and shall provide tenants and/or occupants of the residential dwelling units within the Premises with, all legally-required disclosures , and shall fully comply with all applicable laws applicable to residential tenancies.”.

65.64. A new Paragraph 8.10 is hereby appended as follows:
“
Notwithstanding anything set forth herein, so long as the City of San Jose, a California municipal corporation, is the Lessee hereunder, all or any portion of the insurance coverage Lessee is required to maintain under this Lease may be maintained under a program of self- insurance or under policies that include self-insured retentions or deductibles larger than those typically carried by similarly situated tenants. Lessee shall provide LandlordLessor advance written notice of the self- insurance program, specifying limits and amounts of umbrella coverage and self- insured retentions or deductibl es. If Lessee elects to self- insure as herein provided, Lessor shall have the same benefits and protections as if Lessee carried valid policies of insurance with third- party insurance companies satisfying the requirements of this Lease.

Any damage or destruction to Lessee’s personal property, or business or any Lessee alterations or Lessee improvements shall be deemed to be covered by and recoverable under valid and collectible policies of insurance with third-party insurance companies , including without limitation for purposes of Article 15.. This Section 11.128.10 is personal to the originally named Lessee in this Lease and shall not apply DRAFT - Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.

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to any other assignee of said Lessee’s interest in this Lease nor to any sublessee.”.

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REVISED – Administrative changes made since original posting on 3/10/2023 shown in blueline.

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A new Paragraph 51

66.65. The following language is hereby appended as followsto Paragraph 4.1:
"Annual Appropriations. This Lease
DRAFT - Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.

REVISED – Administrative changes made since original posting on 3/10/2023 shown in blueline.

Payment of Rent shall be subject to futureconsistent with City’s budget appropriation of funding by the legislative bodyprocess.

Notwithstanding City’s budget appropriation process, all remedies for Lessee’s breach or violation of the CityLease remain available to Lessor.

66. The following is added to the lease as a new Paragraph 51:

Lessee herein covenants by and for itself and its assigns, and all persons claiming under or through it, that there shall be no discrimination against or segregation of San Jose.”, any person or group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragr aph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, or on the basis of actual or perceived ge nder identity in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises herein conveyed, nor shall the grantee or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or se gregation with reference to the selection, location, number, use or occupancy of residents, lessees, subtenants, sublessees, or vendees in the premises herein conveyed.

The foregoing covenants shall run with the land.

67. The following is added to the lease as a new Paragraph 64:

The following text shall be included in all of lessee’s sublease and other rental agreements with tenants/occupants of the Premises:

“The lessee herein covenants by and for himself or herself, his or her heirs, executors, administrators, and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are define d in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, or on the basis of actual or perceived gender identity in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises herein conveyed, nor shall the grantee or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of residents, lessees, subtenants, sublessees, or vendees in DRAFT - Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.

REVISED – Administrative changes made since original posting on 3/10/2023 shown in blueline.

the premises herein conveyed. The foregoing covenants shall run with the land.”

[SIGNATURES FOLLOW]

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DRAFT - Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.

REVISED – Administrative changes made since original posting on 3/10/2023 shown in blueline.

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date and year first above written.

LESSOR: LESSEE:

Dated: , 202_ Dated: , 202_

PMI PARTNERS LLC,
a California limited liability company

CITY OF SAN JOSE,
a municipal corporation

By:

Its:

By:

Its:

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Industrial/Commercial Single-Tenant Lease – Net

DRAFT - Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.

REVISED – Administrative changes made since original posting on 3/10/2023 shown in blueline.

San Jose City CouncilMarch 21, 2023

San Jose City Council
March 21, 2023