City Council and Authorities Concurrent
February 20, 2024

EXHIBIT E

SAMPLE WORK AUTHORIZATION FORM
This work authorization (“Work Authorization”) is made pursuant to the Agreement for Service between the City of Santa Clara and Statewide Traffic Safety and Signs (dba Statewide Safety Systems), (“Agreement”). This Work Authorization is governed by the provisions of the Agreement and is hereby incorporated into that Agreement by reference. All Services shall be using the terms and rates included in the Agreement. In the event of any inconsistency between the terms and conditions of the Work Authorization and the Agreement, the terms and conditions of the Agreement shall govern and control.

PART A: GENERAL INFORMATION

WORK AUTHORIZATION
NUMBER:

Original
First Revised
Second Revised
Other Contract No.

Contractor Name/Address:

Expiration Date of Agreement:

Contractor’s Project Manager: Name: Email:

City’s Project Manager Name: Email:

Period of Performance for this
Work Order:

Start Date: Expected Completion Date:

Maximum Compensation of Agreement:

Previously Committed Funds:

Available Funds
Maximum Compensation for this Work Authorization
Remaining Available Funds
Sufficient funds are available in Fund #:
(to be completed by City)
Contractor Representative Name (Print)
Contractor Representative Signature
Contractor Representative Signature Date
City Project Manager Name (Print)
Authorized City Representative (Print)
City Representative Signature
City Representative Signature Date
* Authorized City Representatives include Electric Utility Assistant Director, Chief Electric Utility Operating Officer, Chief Electric Utility Officer
Agreement with Statewide Traffic Safety and Signs dba Statewide Safety Systems Rev. 07-01-18

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PART B: SERVICES TO BE PERFORMED

1. REVISED WORK AUTHORIZATION
No
If yes, provide a brief description of the change(s).

2. SCOPE OF SER

VICES TO BE PERFORMED
The Contractor shall perform the service(s) described below in accordance with all of the terms
and conditions of the Agreement. (Insert a detailed Scope of Services below or attach as a separate file.) Scope of Services and cost proposal shall meet all of the provisions of Section 5 of Exhibit A and Section 2 of Exhibit B.

Agreement with Statewide Traffic Safety and Signs dba Statewide Safety Systems Rev. 07-01-18

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3. COMPENSATION
a. Basis of Compensation: Time & Materials Fixed Fee b. Reimbursable Expenses:

No expenses are reimbursable.

Expenses are separately reimbursable in the maximum amount of:
c. Payment Sch
edule:

Monthly Completion of Deliverable/Milestone Completion of Services
d. Payment Terms. Provide payment terms below or attach as a separate file. *Payment
for on-site labor may not be paid in advance. On-site labor shall not be invoiced until completed and Customer will not make payment until certified payroll is approved.

4. LIQUIDATED DAMAGES
Liquidated Damages do not apply.

Liquidated Damages apply as follows:

It is mutually agreed by Contractor and City that, in event completion of the Services to be provided by the Contractor under this Agreement is delayed beyond ___________________, 20___, City will suffer
damages and will incur other costs and expenses of a nature and amount which is difficult or impractical to determine. The Parties agree that by way of ascertaining and fixing the amount of damages, costs and expenses, and not by way of penalty, Contractor shall pay to City the sum of __________________________________dollars ($____________) per day in liquidated damages to a cap of _________. Contractor agrees that City may deduct the amount of said unpaid damages from any money due or that may become due to Contractor under this Agreement.

Notwithstanding the foregoing both Parties understand and agree that no liquidated damages shall accrue for delivery delays due to any modification of the Scope of Services, for delays caused by or attributable to the City, for delays caused by or attributable to third parties not under the direct control of Contractor or any force majeure event during the period of service of this Work Authorization.

Such liquidated damages shall be the City's sole and exclusive remedy for Contractor’s failure to meet the agreed delivery schedule.

Agreement with Statewide Traffic Safety and Signs dba Statewide Safety Systems Rev. 07-01-18

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5. ACCEPTANCE CERTIFICATE
Acceptance Certificate not required.

Acceptance Certificate required:

Agreement with Statewide Traffic Safety and Signs dba Statewide Safety Systems Rev. 07-01-18

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EXHIBIT F

SAMPLE TRAFFIC CONTROL

WORK ORDER REPORT
Agreement with Statewide Traffic Safety and Signs dba Statewide Safety Systems Rev. 07-01-18

STATEWIDE 822503
5 ----

SAFETY SYSTEMS
□ Poway
□ Fairfield
□ Garden Grove □ Nipomo □ Fresno □ San Jose □ Riverside □ Sacramento □ Redding □ Arcata □ Bakersfield □ Las Vegas □ Mt.Vernon
□ Lakewood
□ Kent
TRAFFIC CONTROL WORK ORDER REPORT.

CONTRACTOR: I CONTACT: PHONE: DATE:

LOCATION: , I CONTRACT# JOB#
Work Description :

CLOSURE LOCATION/STREET _________ _ ______ ___________ ________ ____ _ JOBSITE CONTACT _ _______ ___________ _ ______________ __________ _ FWY ST HWY/STREET LANE CLOSURES Length/ Yard Site Site Yard Travel Job Total Notes Qty Out In Out In Total Total Hours □ □
1 Lane 1 Direction (T-10)
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Additional Lane
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Additional Man
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Additional 1 Lane Different Location (T-10)
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Connector Closure Only (T-14 Mod)
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Off-Ramp Closure during Lane/Street Closure (T-14 Mod)
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On-Ramp Closure during Lane/Street Closure (T-14)
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Connector Closure during Lane Closure (T-14 Mod)
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Ramp Only
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Complete Freeway/Street Closure (T-14A)
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Flagging (T-13)
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Flagging Night
□ □ Movin Lane Closure (T-15, T-16)
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Impact Attenuator Vehicle TL-3 & Driver
□ □
Pilot Car
□ □
QTY Asset# Asset# Asset# Asset# Notes
Portable Changeable Message Sign
Portable Light Towers
Arrow Boards
Truck
EMPLOYEE Reg Hrs OT DT NL L Foreman (Print) _ _____ ____ _ _______ _ Signature ____ ____ __________ _
Contractor (Print) _ _________________ _
Signature __________________ _
R/E Inspector (Print) __________ _______ _
Signature ________ __________ _
White - dispatch / Pink - billing / Blue - other/ Canary - customer SSS-TC-WO-M 3/2021 City of Santa Clara
Agenda Report
1500 Warburton Avenue
Santa Clara, CA 95050
santaclaraca.gov
@SantaClaraCity
24-112 Agenda Date: 2/20/2024

REPORT TO COUNCIL

SUBJECT
Action on Lease Extensions for Properties at 900 Lafayette Street (Commerce Plaza) and 1000 Lafayette Street (Peddler’s Plaza) until May 31, 2025, with an option to extend until May 31, 2026

COUNCIL PILLARS
Promote and Enhance Economic, Housing and Transportation Development Deliver and Enhance High Quality Efficient Services and Infrastructure

BACKGROUND
The City of Santa Clara (“City”) is the landowner of two downtown properties located at 900 Lafayette Street, known as Commerce Plaza, and 1000 Lafayette Street, known as Peddler’s Plaza.

Commerce Plaza is approximately a 3.7-acre site with a seven-story office building. The office building has 90,000 square feet of leasable space with 60 units. Peddler’s Plaza is approximately a

1.3-acre site with a one-story retail and commercial building. Peddler’s Plaza has 10,300 square feet of leasable space with seven (7) units.

On September 28, 2021, the City Council approved an Agreement with Eugene Burger Management Corporation (EBMC) for property management services and also authorized the City Manager to negotiate and execute leases at 900 and 1000 Lafayette Street (RTC 21-1214). At that time, there were 34 leases across both properties, including four of the leases at Peddler’s Plaza (Attachment 1).

On May 23, 2023, the City Council authorized the City Manager to negotiate and execute amendments to the existing leases for the commercial spaces at 1000 Lafayette to extend the term of each lease to May 31, 2024 (RTC 23-579; Attachment 2). There currently are 33 total leases across both properties, including 29 executed leases at Commerce Plaza and four spaces at Peddler’s. The leases at both Commerce Plaza and Peddler’s Plaza will expire on May 31, 2024.

These two properties have long been discussed as integral components of a long-term vision for rebuilding downtown. On December 5, 2023, the City Council adopted Resolution 23-9294 approving the Downtown Precise Plan, including Resolution 23-9295 approving a General Plan text amendment to modify the Downtown Core land use designation and amending the General Plan Land Use diagrams for Phases II and III to reflect the Downtown Precise Plan (RTC 23-1362; Attachment 3).

With the Downtown Precise Plan approved, there are a number of significant items that will have long -term impacts that will need to be considered prior to any development of City property. It would be beneficial to the City if there is ongoing occupancy of the facilities until that time.

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24-112 Agenda Date: 2/20/2024

DISCUSSION
In order to continue occupancy for both properties, the City will need to enter into lease amendments with each of the existing tenants at 900 and 1000 Lafayette Street.

Staff recommends extending the leases at the current rental rates with an option for early termination and no penalty if tenants choose to leave before the extended term of May 31, 2025. Staff will continue to monitor capital improvement projects to make repairs on previously identified and budgeted items. Additionally, Staff is conducting an engineering and feasibility study to determine the cost and feasibility of updating the Property to the highest and best use for the City and community.

The feasibility study is set to be completed by the end of FY 2023/24.

With the adoption of the Precise Plan and additional Council actions, it is anticipated that the next steps would generally be as follows:
· Council consideration and review of a feasibility analysis report to identify future long-term uses that align with the Precise Plan.
· Council consideration to declare the property as Surplus Land. · If declared surplus, a Notice of Availability (NOA) will be issued as required by the Surplus Lands Act.
o If the City receives one or more responses to the NOA within 60 days, the City must engage in good faith negotiations with the responding parties for at least 90 days (90 days is a minimum - good faith negotiations could be much longer). o If there are offers that could be accepted, negotiations and agreements would likely take over a year.
· If the property is not disposed of through the Surplus Land Act process, then the City can release a Request for Proposals (RFP) for the sale/lease of the property. The steps in this process would be as follows:
o Draft and advertise RFP
o Developer selection
o Developer negotiations
o Contracts for Council consideration
· The above process will require approximately 1.5 - 3 years After disposition and development contracts are finalized, the developer could move forward with planning and building permits.

Property Management
The Agreement with Eugene Burger Management Corporation (EBMC) for property management services had an initial term ending on September 30, 2023. The City Manager previously exercised the option to extend the term through September 30, 2024. The City Manager has the authority to execute two additional one-year options to extend the term of the Agreement with EBMC until September 30, 2026, subject to the appropriation of funds.

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24-112 Agenda Date: 2/20/2024

ENVIRONMENTAL REVIEW
The action being considered does not constitute a “project” within the meaning of the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines section 15378(a) as it has no potential for resulting in either a direct physical change in the environment or a reasonably foreseeable indirect physical change in the environment.

FISCAL IMPACT
The estimated revenues are $9,295 per month for Peddler’s Plaza and $117,531 per month for Commerce Plaza, generating approximately $1.5 million annually. These revenues are used to cover the costs for building maintenance and improvements and property management expenses.

The revenues and associated expenditures are incorporated into the annual General Fund operating budget, and there are sufficient funds to cover the costs of this extension in FY 2023/24 and FY 2024/25.

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

PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, email [email protected] <mailto:[email protected]> or at the
public information desk at any City of Santa Clara public library.

RECOMMENDATION

1. Authorize the City Manager to negotiate and execute amendments to existing leases at 900 Lafayette Street and 1000 Lafayette to extend lease terms from May 31, 2024 to May 31, 2025, with the option to extend for up to one additional year, in final forms approved by the City Attorney; and

2. Authorize the City Manager to negotiate and execute amendments to existing leases at 900 Lafayette Street and 1000 Lafayette to exercise the option and extend lease terms from May 31, 2025 to May 31, 2026, if needed, in final forms approved by the City Attorney.

Reviewed by: Elycia Knight, Development Project Manager, City Manager’s Office Approved by: Jovan D. Grogan, City Manager
Attachments:

1. RTC 21-1214

2. RTC 23-579

3. RTC 23-1362
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City of Santa Clara
Agenda Report
1500 Warburton Avenue
Santa Clara, CA 95050
santaclaraca.gov
@SantaClaraCity
21-1214 Agenda Date: 9/28/2021

REPORT TO COUNCIL

SUBJECT
Action on Resolution Authorizing an Agreement with Eugene Burger Management Corporation for Property Management Services of City-Owned Commercial Properties Located at 900 and 1000 Lafayette Street, and Authority for the City Manager to Negotiate and Execute Leases at 900 and 1000 Lafayette Street; and Associated Budget Amendment

COUNCIL PILLARS
Promote and Enhance Economic, Housing and Transportation Development Deliver and Enhance High Quality Efficient Services and Infrastructure

BACKGROUND
The City of Santa Clara (“City”) is the landowner of two downtown properties located at 1000 Lafayette Street, known as Peddler’s Plaza, and 900 Lafayette Street, known as Commerce Plaza. In 1971, the City entered long-term ground leases which are set to expire in the coming months.

Peddler’s Plaza is approximately a 1.3-acre site with a one-story retail commercial building. The retail commercial building has 10,300 square feet of leasable space with seven (7) units. The Peddler’s Plaza Ground Lease will expire on September 30, 2021.

Commerce Plaza is approximately a 3.7-acre site with a seven-story office building. The office building has 90,000 square feet of leasable space with 60 units. The Commerce Plaza Ground Lease will expire on April 11, 2022.

These two properties have been long discussed as integral components of a long-term vision for rebuilding downtown. The planning process on a specific plan for downtown is not complete and it will be several more years before any redevelopment of the properties could begin to occur. The two buildings are occupied, and it would be beneficial to the City if there is ongoing occupancy of the structures.

As the Ground Leases are set to terminate, the current tenants will have no rights to remain in their spaces. Staff has reached out to tenants to determine their interest in continuing to operate in their existing space and indicated that the City is interested in possibly extending their respective current leases under generally the same terms for a limited period (up to two years) to allow time for the City and its new management company to transition into their new roles.

DISCUSSION
Pursuant to City Code Section 2.105.330, a formal Request for Proposal (RFP) was conducted as the solicitation method for this procurement, with the award recommendation based on “best value”.

The factors considered in the award were qualifications and experience of firm, qualifications and City of Santa Clara Printed on 4/3/2022Page 1 of 5
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21-1214 Agenda Date: 9/28/2021
experience of key personnel, demonstrated capability and cost.

In May 2021, a competitive Request for Proposal (RFP) was advertised on the City’s bid notification system for a Contractor to provide property management services necessary to rent, lease, operate, and manage Commerce Plaza and Peddler’s Plaza.

Forty vendors viewed the RFP, and two proposals were received from Eugene Burger Management Corporation and Orchard Commercial. Proposals were independently evaluated by three representatives from the Housing Division and one representative from the City Manager’s Office. In addition to scoring against the criteria set forth above, the City elected to conduct a Best and Final Offer (BAFO) to clarify certain aspects of the City’s requirements, and provide proposers a final opportunity to revise their cost proposals in light of this new information.

References were checked with the City of Santa Clara Department of Parks and Recreation, County of Sonoma, and King Family Trust. All references checked positive.

Eugene Burger Management Corporation (EBMC) is recommended for award of contract as having submitted the best value proposal. They demonstrated experience in managing multiple property types, specifically commercial retail spaces and government ‐
assisted programs. EBMC provided a
thorough and comprehensive response that met or exceeded the City’s requirements and will ensure a high level of service that is needed to ensure ongoing occupancy of the structures.

EBMC currently manages one other City-owned property, Morse Mansion, located at 981 Fremont Street.

Under the proposed Agreement, EBMC will provide professional property management services to rent, lease, operate and manage Peddler’s Plaza and Commerce Plaza. The initial term of the agreement will be two years and costs are fixed for the initial term as described in Table 1 below. The City may extend the Agreement for three additional one-year options.

Table 1. Costs Associated with Performing Property Management Services Management Services Fee
Description Monthly Rate
Initial Term Year
1 of 2
Initial Term
Year 1 of 2
Monthly Rate
Initial Term Year
2 of 2
Initial Term
Year 2 of 2
Commerce Plaza* $8,000 $40,000 $8,150 $97,800
Peddler's Plaza $1,500 $18,000 $1,525 $18,300
Total for Annual Management Services for Each Property$58,000 $116,100 TOTAL FOR ANNUAL MANAGEMENT SERVICES FOR INITIAL TERM $174,100 Other Service Fees
Description Initial Term Year 1 of 2 Fees Initial Term Year 2 of 2 Fees Accounting Services
Commerce Plaza* $700/Month $715/Month
Peddler's Plaza $300/Month $305/Month
TOTAL FOR ACCOUNTING SERVICES FOR INITIAL TERM$19,340
Construction Management Fees 10% of Improvement Costs
Leasing Services
For vacant space new tenants: - 6% of the fixed annual minimum rent payable under the terms of the original lease during the first three (3) years of the lease - 5% of the fixed annual minimum rent payable during the next two years (2) of the original lease - 4% of all rent payable thereafter during the sixth and subsequent years of the original lease For existing tenants: - Renewal expansion rates for existing tenants will be 50% of the leasing fee for new tenants identified above.

TOTAL ESTIMATE FOR LEASING SERVICES FOR INITIAL TERM $140,000 CONTINGENCY (10%) $33,344 MAXIMUM COMPENSATION NOT-TO-EXCEED FOR INITIAL TERM$366,784 City of Santa Clara Printed on 4/3/2022Page 2 of 5
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21-1214 Agenda Date: 9/28/2021
Management Services Fee
Description Monthly Rate
Initial Term Year
1 of 2
Initial Term
Year 1 of 2
Monthly Rate
Initial Term Year
2 of 2
Initial Term
Year 2 of 2
Commerce Plaza* $8,000 $40,000 $8,150 $97,800
Peddler's Plaza $1,500 $18,000 $1,525 $18,300
Total for Annual Management Services for Each Property$58,000 $116,100 TOTAL FOR ANNUAL MANAGEMENT SERVICES FOR INITIAL TERM $174,100 Other Service Fees
Description Initial Term Year 1 of 2 Fees Initial Term Year 2 of 2 Fees Accounting Services
Commerce Plaza* $700/Month $715/Month
Peddler's Plaza $300/Month $305/Month
TOTAL FOR ACCOUNTING SERVICES FOR INITIAL TERM$19,340
Construction Management Fees 10% of Improvement Costs
Leasing Services
For vacant space new tenants: - 6% of the fixed annual minimum rent payable under the terms of the original lease during the first three (3) years of the lease - 5% of the fixed annual minimum rent payable during the next two years (2) of the original lease - 4% of all rent payable thereafter during the sixth and subsequent years of the original lease For existing tenants: - Renewal expansion rates for existing tenants will be 50% of the leasing fee for new tenants identified above.

TOTAL ESTIMATE FOR LEASING SERVICES FOR INITIAL TERM $140,000 CONTINGENCY (10%) $33,344 MAXIMUM COMPENSATION NOT-TO-EXCEED FOR INITIAL TERM$366,784 *Property Management and Accounting Services for Commerce Plaza will not begin until April 2022, the amount noted for the management services fees and accounting fees for this location is for only five months for year 1 of 2.

The RFP included a protest process. On September 3, 2021, the City received a letter of protest from Orchard Commercial requesting that the City conduct oral presentations with the proposers for the purpose of considering additional information that Orchard Commercial wanted to introduce.

The protest was reviewed by the City’s Purchasing Division Manager who concluded that the RFP process was conducted fairly, and the evaluation team concluded that oral presentations were not necessary in order to make a decision. The process provided other avenues for Orchard Commercial to raise their issues, and an oral presentation after the recommendation is published and after Orchard Commercial’s debriefing where the strengths and weaknesses of their proposal were discussed, would not be appropriate.

Orchard Commercial’s letter of protest and the City’s response are attached.

Tenant Leases
With the expiration of the ground leases, the existing building tenants will have no rights to continue to occupy the retail/office space. In order for their occupancy to continue, the City will need to enter into new lease agreements with each of the existing tenants at both 900 and 1000 Lafayette Street.

Staff proposes that the City authorize leases for a term not to exceed two years to maintain occupancy of the buildings and allow for a transition to a new property manager while the City continues its work on the specific plan for the downtown. Staff is seeking authority from the City Council for the City Manager to negotiate and execute assignment and assumption agreements, lease agreements, and related amendments for a term not to exceed two years on a form that is subject to approval by the City Attorney.

ENVIRONMENTAL REVIEW
The action being considered does not constitute a “project” within the meaning of the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines section 15378(a) as it has no potential for resulting in either a direct physical change in the environment, or a reasonably City of Santa Clara Printed on 4/3/2022Page 3 of 5
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21-1214 Agenda Date: 9/28/2021
foreseeable indirect physical change in the environment.

FISCAL IMPACT
The City has not received complete rent roll information for the current building tenants. The estimated monthly revenues are $25,000 per month for Peddler’s Plaza and $170,000 per month for Commerce Plaza. The total estimated revenue over the initial two-year term is $3.3 million, while the total management fees over the initial term are not expected to exceed $366,784.

In FY 2021/22, the management services, accounting services, and leasing services costs are estimated at $182,300 and represent activity through June 2022. A FY 2021/22 General Fund budget action is recommended to add funding of $182,300 to the City Manager’s Office, offset by rent revenue. The rent revenue is projected to total over $700,000 in FY 2021/22, which is more than sufficient to cover the costs. The recommended budget action only recognizes rent revenue to offset costs as the City has not yet received complete rent roll information. An additional budget action may be brought forward later in the fiscal year to recognize additional revenue and to adjust the expenditure budget, if necessary, based on actual experience. Funding in future years, along with the associated revenue adjustments, will be incorporated into the budget development process for those years.

Budget Amendment
FY 2021/22
Current Increase/
(Decrease)
Revised
General Fund (001)
Revenue
Rents $9,833,222 $182,300 $10,015,522
Expenditure
City Manager’s Office $5,442,069 $182,300 $5,624,369

COORDINATION
This report was coordinated with the Finance Department and City Attorney’s Office.

PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, email [email protected] <mailto:[email protected]> or at the
public information desk at any City of Santa Clara public library.

RECOMMENDATION

1. Adopt a Resolution to authorize the City Manager to do the following:

A. Negotiate and execute an Agreement with Eugene Burger Management Corporation (EBMC) City of Santa Clara Printed on 4/3/2022Page 4 of 5
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21-1214 Agenda Date: 9/28/2021
to provide property management services for an initial two-year term beginning on or about September 28, 2021 and ending on or about September 30, 2023 with maximum compensation not-to-exceed $366,784 and subject to the appropriation of funds; B. Execute amendments to the Agreement with EBMC, not to exceed $33,344, for contingencies in the event there are unanticipated changes during the initial term of the Agreement, subject to the appropriation of funds;
C. Execute three one-year options to extend the term of the Agreement with EBMC after the initial term ending on September 30, 2026 if all options are exercised, subject to the appropriation of funds;
D. Execute amendments to each of the agreements to add funds as required in the event revenues collected exceed staff’s estimates, subject to the appropriation of funds; E. Negotiate and execute assignment and assumption agreements, commercial leases and related amendments for the commercial spaces at 900 and 1000 Lafayette Street for a term not to exceed 2 years on a form agreement subject to the approval of the City Attorney; and

2. Consistent with City Charter Section 1305, “At any meeting after the adoption of the budget, the City Council may amend or supplement the budget by motion adopted by the affirmative votes of at least five members so as to authorize the transfer of unused balances appropriated for one purpose to another purpose, or to appropriate available revenue not included in the budget,” approve a FY 2021/22 budget amendment in the General Fund to recognize rent revenue in the amount of $182,300 and increase the City Manager’s Office appropriation by $182,300(five affirmative Council votes required to appropriate additional revenue).

Reviewed by: Ruth Mizobe Shikada, Assistant City Manager Approved by: Deanna J. Santana, City Manager

ATTACHMENTS

1. Resolution

2. Draft Agreement with Eugene Burger Management Corporation

3. Protest Letter from Orchard Commercial, Inc.

4. Purchasing Division Manager’s Response to Protest Letter from Orchard Commercial, Inc.

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Resolution/Eugene Burger Page 1 of 4
Rev: 11/22/17
RESOLUTION NO. _____

A RESOLUTION OF THE CITY OF SANTA CLARA, CALIFORNIA

APPROVING AN AGREEMENT BETWEEN THE CITY OF SANTA

CLARA AND EUGENE BURGER MANAGEMENT CORPORATION

FOR PROPERTY MANAGEMENT SERVICES OF CITY -OWNED
COMMERCIAL PROPERTIES INCLUDING 900 AND 1000

LAFAYETTE STREET AND AUTHORIZING THE CITY MANAGER

TO NEGOTIATE AND EXECUTE AGREEMENTS RELATED TO
THE PROPERTIES LOCATED AT 900 AND 1000 LAFAYETTE
STREET

BE IT RESOLVED BY THE CITY OF SANTA CLARA AS FOLLOWS:

WHEREAS, The City of Santa Clara (“City”) is the landowner of two downtown properties located at 1000 Lafayette Street, known as Peddler’s Plaza, and 900 Lafayette Street, known as Commerce Plaza;
WHEREAS, In 1971, the City entered into long-term ground leases which are set to expire in the coming months;
WHEREAS, Peddler’s Plaza is approximately a 1.3 -acre site with a one -story retail commercial building. The retail commercial building has 10,300 square feet of leasable space with seven (7) units. The Peddler’s Plaza Ground Lease will expire on September 30, 2021; WHEREAS, Commerce Plaza is approximately a 3.7-acre site with a seven-story office building.

The office building has 90,000 square feet of leasable space with 60 units. The Commerce Plaza Ground Lease will expire on April 11, 2022;
WHEREAS, the City is in the process of developing a specific plan for the downtown area which includes both Peddler’s Plaza and Commerce Plaza;
WHEREAS, in the interim, the City desires to maintain occupancy of both buildings, until the City determines how to develop the area and these properties; WHEREAS, the City would like to enter into lease agreements with tenants to continue to use the property for a period not to exceed two year;
WHEREAS, In 2021, a competitive Request for Proposal (RFP) was advertised on the City’s bid Resolution/Eugene Burger Page 2 of 4
Rev: 11/22/17
notification system for a Contractor to provide property management services necessary to rent, lease, operate and manage Peddler’s Plaza and Commerce Plaza that are owned by the City; and,
WHEREAS, As the Ground Lease is set to terminate, the Agreement for Services between the City of Santa Clara and Eugene Burger Management contemplates the provision of professional property management services to rent, lease, operate and manage Peddler’s Plaza and Commerce Plaza. The initial term of the agreement will be two years. The City may extend the Agreement for three additional one-year options.

NOW THEREFORE, BE IT FURTHER RESOLVED BY THE CITY OF SANTA CLARA AS FOLLOWS:

1. That the City Council hereby finds that the above Recitals are true and correct and by this reference makes them a part hereof.

2. That the City Council hereby approves and authorizes the City Manager to execute the Agreement for Services between the City of Santa Clara and Eugene Burger Management, substantially in the form attached hereto as Exhibit “Agreement,” subject to clarifying changes consistent with the terms thereof as may be approved by the City Attorney prior to execution thereof.

3. That this Resolution, including the Agreement approval described in Section 2 above, is based on the findings set forth above.

4. That the City Manager and/or designee is hereby authorized and directed to do the following:
a. Negotiate and execute an Agreement with Eugene Burger Management Corporation to provide property management services for an initial two-year term beginning on or about September 28, 2021 and ending on or about September 30, 2023 with maximum compensation not-to-exceed $328,284 and subject to the appropriation of funds; b. Execute amendments to the Agreement, not to exceed $29,844, for contingencies in the Resolution/Eugene Burger Page 3 of 4
Rev: 11/22/17
event there are unanticipated changes during the initial term of the Agreement, subject to the appropriation of funds; and
c. Execute three one-year options to extend the term of the Agreement after the initial term through September 30, 2026 for property management services, subject to the appropriation of funds.
d. Execute amendments to each of the agreements to add funds as required in the event revenues collected exceed staff’s estimates, subject to the appropriation of funds. e. Negotiate and execute assignment and assumption agreements, commercial leases, and related amendments for the commercial spaces located at 900 and 1000 Lafayette Street for a term not to exceed 2 years on a form agreement subject to the approval of the City Attorney.
f. That the City Manager and/or designee is hereby authorized and directed to perform all acts to be performed by the City in the administration of the Agreement for Services between the City of Santa Clara and Eugene Burger Management pursuant to the terms of the submitted proposal. The City Manager and/or designee is further authorized and directed to perform all other acts, including to negotiate and execute all documents (including leases and amendments) necessary or convenient to carry out the purposes of this Resolution and the Agreement.

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Resolution/Eugene Burger Page 4 of 4
Rev: 11/22/17

5. Effective date. This resolution shall become effective immediately.

I HEREBY CERTIFY THE FOREGOING TO BE A TRUE COPY OF A RESOLUTION PASSED

AND ADOPTED BY THE CITY OF SANTA CLARA, CALIFORNIA, AT A REGULAR MEETING THEREOF HELD ON THE ___ DAY OF _________, 2021, BY THE FOLLOWING VOTE:

AYES: COUNCILORS:

NOES: COUNCILORS:

ABSENT: COUNCILORS:

ABSTAINED: COUNCILORS:

ATTEST: ______________________________

NORA PIMENTEL, MMC

ASSISTANT CITY CLERK

CITY OF SANTA CLARA

Agreement with Eugene Burger Management Corporation Page 1 Rev. 07-01-18
EBIX Insurance No. S200004328

AGREEMENT FOR SERVICES

BETWEEN THE

CITY OF SANTA CLARA, CALIFORNIA,
AND

EUGENE BURGER MANAGEMENT CORPORATION

PREAMBLE
This Agreement is entered into between the City of Santa Clara, California, a chartered California municipal corporation (City) and Eugene Burger Management Corporation a California corporation, (Contractor). City and Contractor may be referred to individually as a “Party” or collectively as the “Parties” or the “Parties to this Agreement.”

RECITALS
A. City desires to secure the services more fully described in this Agreement, at Exhibit A, entitled “Scope of Services”;
B. Contractor represents that it, and its subcontractors, if any, have the professional qualifications, expertise, necessary licenses and desire to provide certain goods and/or required services of the quality and type which meet objectives and requirements of City; and,
C. The Parties have specified herein the terms and conditions under which such services will be provided and paid for.

The Parties agree as follows:

AGREEMENT TERMS AND CONDITIONS

1. AGREEMENT DOCUMENTS
The documents forming the entire Agreement between City and Contractor shall consist of these Terms and Conditions and the following Exhibits, which are hereby incorporated into this Agreement by this reference:

Exhibit A – Scope of Services
Exhibit B – Schedule of Fees
Exhibit C – Insurance Requirements
Exhibit D – Notice of Exercise of Option to Extend Agreement This Agreement, including the Exhibits set forth above, contains all the agreements, representations and understandings of the Parties, and supersedes and replaces any previous agreements, representations and understandings,

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whether oral or written. In the event of any inconsistency between the provisions of any of the Exhibits and the Terms and Conditions, the Terms and Conditions shall govern and control.

2. TERM OF AGREEMENT
A. Initial Term. Unless otherwise set forth in this Agreement or unless this paragraph is subsequently modified by a written amendment to this Agreement, the term of this Agreement shall begin on or about September 28, 2021 and terminate on September 30, 2023.

B. Options to Extend. After the Initial Term, the City reserves the right, at its sole discretion, to extend the term of this Agreement for up to three (3) additional one-year terms through September 30, 2026 (“Option Periods”), subject to the appropriation of funds. See Exhibit D for Notice of Exercise to Option to Extend Agreement Form.

3. SCOPE OF SERVICES & PERFORMANCE SCHEDULE
Contractor shall perform those Services specified in Exhibit A within the time stated in Exhibit A. Time is of the essence.

4. WARRANTY
Contractor expressly warrants that all materials and services covered by this Agreement shall be fit for the purpose intended, shall be free from defect and shall conform to the specifications, requirements and instructions upon which this Agreement is based. Contractor agrees to promptly replace or correct any incomplete, inaccurate or defective Services at no further cost to City when defects are due to the negligence, errors or omissions of Contractor. If Contractor fails to promptly correct or replace materials or services, City may make corrections or replace materials or services and charge Contractor for the cost incurred by City.

5. QUALIFICATIONS OF CONTRACTOR - STANDARD OF CARE
Contractor represents and maintains that it has the expertise in the professional calling necessary to perform the Services, and its duties and obligations, expressed and implied, contained herein, and City expressly relies upon Contractor’s representations regarding its skills and knowledge. Contractor shall perform such Services and duties in conformance to and consistent with the professional standards of a specialist in the same discipline in the State of California.

6. COMPENSATION AND PAYMENT
In consideration for Contractor’s complete performance of Services, City shall pay Contractor for all materials provided and Services rendered by Contractor in

Agreement with Eugene Burger Management Corporation Page 3 Rev. 07-01-18
accordance with Exhibit B, entitled “SCHEDULE OF FEES.” The maximum compensation of this Agreement is Three Hundred Sixty-Six Thousand Seven Hundred Eighty-Four Dollars ($366,784), subject to budget appropriations, which includes all payments that may be authorized for Services and for expenses, supplies, materials and equipment required to perform the Services.

All work performed or materials provided in excess of the maximum compensation shall be at Contractor’s expense. Contractor shall not be entitled to any payment above the maximum compensation under any circumstance.

7. TERMINATION
A. Termination for Convenience. City shall have the right to terminate this Agreement, without cause or penalty, by giving not less than Thirty (30) days’ prior written notice to Contractor.

B. Termination for Default. If Contractor fails to perform any of its material obligations under this Agreement, in addition to all other remedies provided by law, City may terminate this Agreement immediately upon written notice to Contractor.

C. Upon termination, each Party shall assist the other in arranging an orderly transfer and close-out of services. As soon as possible following the notice of termination, but no later than ten (10) days after the notice of termination, Contractor will deliver to City all City information or material that Contractor has in its possession.

8. ASSIGNMENT AND SUBCONTRACTING
City and Contractor bind themselves, their successors and assigns to all covenants of this Agreement. This Agreement shall not be assigned or transferred without the prior written approval of City. Contractor shall not hire subcontractors without express written permission from City.

Contractor shall be as fully responsible to City for the acts and omissions of its subcontractors, and of persons either directly or indirectly employed by them, as Contractor is for the acts and omissions of persons directly employed by it.

9. NO THIRD-PARTY BENEFICIARY
This Agreement shall not be construed to be an agreement for the benefit of any third party or parties and no third party or parties shall have any claim or right of action under this Agreement for any cause whatsoever.

10. INDEPENDENT CONTRACTOR
Contractor and all person(s) employed by or contracted with Contractor to furnish labor and/or materials under this Agreement are independent contractors and do

Agreement with Eugene Burger Management Corporation Page 4 Rev. 07-01-18
not act as agent(s) or employee(s) of City. Contractor has full rights to manage its employees in their performance of Services under this Agreement.

11. CONFIDENTIALITY OF MATERIAL
All ideas, memoranda, specifications, plans, manufacturing procedures, data, drawings, descriptions, documents, discussions or other information developed or received by or for Contractor and all other written information submitted to Contractor in connection with the performance of this Agreement shall be held confidential by Contractor and shall not, without the prior written consent of City, be used for any purposes other than the performance of the Services nor be disclosed to an entity not connected with performance of the Services. Nothing furnished to Contractor which is otherwise known to Contractor or becomes generally known to the related industry shall be deemed confidential.

12. OWNERSHIP OF MATERIAL
All material, which shall include, but not be limited to, data, sketches, tracings, drawings, plans, diagrams, quantities, estimates, specifications, proposals, tests, maps, calculations, photographs, reports, designs, technology, programming, works of authorship and other material developed, collected, prepared or caused to be prepared under this Agreement shall be the property of City but Contractor may retain and use copies thereof. City shall not be limited in any way or at any time in its use of said material. However, Contractor shall not be responsible for damages resulting from the use of said material for work other than Project, including, but not limited to, the release of this material to third parties.

13. RIGHT OF CITY TO INSPECT RECORDS OF CONTRACTOR
City, through its authorized employees, representatives or agents shall have the right during the term of this Agreement and for four (4) years from the date of final payment for goods or services provided under this Agreement, to audit the books and records of Contractor for the purpose of verifying any and all charges made by Contractor in connection with Contractor compensation under this Agreement, including termination of Contractor. Contractor agrees to maintain sufficient books and records in accordance with generally accepted accounting principles to establish the correctness of all charges submitted to City. Any expenses not so recorded shall be disallowed by City. Contractor shall bear the cost of the audit if the audit determines that there has been a substantial billing deviation in excess of five (5) percent adverse to the City.

Contractor shall submit to City any and all reports concerning its performance under this Agreement that may be requested by City in writing. Contractor agrees to assist City in meeting City’s reporting requirements to the State and other agencies with respect to Contractor’s Services hereunder.

Agreement with Eugene Burger Management Corporation Page 5 Rev. 07-01-18

14. HOLD HARMLESS/INDEMNIFICATION
A. To the extent permitted by law, Contractor agrees to protect, defend, hold harmless and indemnify City, its City Council, commissions, officers, employees, volunteers and agents from and against any claim, injury, liability, loss, cost, and/or expense or damage, including all costs and attorney’s fees in providing a defense to any such claim or other action, and whether sounding in law, contract, tort, or equity, in any manner arising from, or alleged to arise in whole or in part from, or in any way connected with the Services performed by Contractor pursuant to this Agreement – including claims of any kind by Contractor’s employees or persons contracting with Contractor to perform any portion of the Scope of Services – and shall expressly include passive or active negligence by City connected with the Services. However, the obligation to indemnify shall not apply if such liability is ultimately adjudicated to have arisen through the sole active negligence or sole willful misconduct of City; the obligation to defend is not similarly limited.

B. Contractor’s obligation to protect, defend, indemnify, and hold harmless in full City and City’s employees, shall specifically extend to any and all employment-related claims of any type brought by employees, contractors, subcontractors or other agents of Contractor, against City (either alone, or jointly with Contractor), regardless of venue/jurisdiction in which the claim is brought and the manner of relief sought.

C. To the extent Contractor is obligated to provide health insurance coverage to its employees pursuant to the Affordable Care Act (“Act”) and/or any other similar federal or state law, Contractor warrants that it is meeting its obligations under the Act and will fully indemnify and hold harmless City for any penalties, fines, adverse rulings, or tax payments associated with Contractor’s responsibilities under the Act.

15. INSURANCE REQUIREMENTS
During the term of this Agreement, and for any time period set forth in Exhibit C, Contractor shall provide and maintain in full force and effect, at no cost to City, insurance policies as set forth in Exhibit C.

16. WAIVER
Contractor agrees that waiver by City of any one or more of the conditions of performance under this Agreement shall not be construed as waiver(s) of any other condition of performance under this Agreement. Neither City’s review, acceptance nor payments for any of the Services required under this Agreement shall be constructed to operate as a waiver of any rights under this Agreement or of any cause of action arising out of the performance of this Agreement.

Agreement with Eugene Burger Management Corporation Page 6 Rev. 07-01-18

17. NOTICES
All notices to the Parties shall, unless otherwise requested in writing, be sent to City addressed as follows:

City of Santa Clara
Attention: City Manager’s Office
1500 Warburton Avenue
Santa Clara, CA 95050
and by e-mail at [email protected]

And to Contractor addressed as follows:

Eugene Burger Management Corporation
6600 Hunter Drive
Rohnert Park, CA 94928
and by e-mail at *_______________@XXX
The workday the e-mail was sent shall control the date notice was deemed given.

An e-mail transmitted after 1:00 p.m. on a Friday shall be deemed to have been transmitted on the following business day.

18. COMPLIANCE WITH LAWS
Contractor shall comply with all applicable laws and regulations of the federal, state and local government, including but not limited to “The Code of the City of Santa Clara, California” (“SCCC”). In particular, Contractor’s attention is called to the regulations regarding Campaign Contributions (SCCC Chapter 2.130), Lobbying (SCCC Chapter 2.155), Minimum Wage (SCCC Chapter 3.20), Business Tax Certificate (SCCC section 3.40.060), and Food and Beverage Service Worker Retention (SCCC Chapter 9.60), as such Chapters or Sections may be amended from time to time or renumbered. Additionally Contractor has read and agrees to comply with City’s Ethical Standards (http://santaclaraca.gov/home/showdocument?id=58299).

19. CONFLICTS OF INTEREST
Contractor certifies that to the best of its knowledge, no City officer, employee or authorized representative has any financial interest in the business of Contractor and that no person associated with Contractor has any interest, direct or indirect, which could conflict with the faithful performance of this Agreement. Contractor is familiar with the provisions of California Government Code section 87100 and

Agreement with Eugene Burger Management Corporation Page 7 Rev. 07-01-18
following, and certifies that it does not know of any facts which would violate these code provisions. Contractor will advise City if a conflict arises.

20. FAIR EMPLOYMENT
Contractor shall not discriminate against any employee or applicant for employment because of race, sex, color, religion, religious creed, national origin, ancestry, age, gender, marital status, physical disability, mental disability, medical condition, genetic information, sexual orientation, gender expression, gender identity, military and veteran status, or ethnic background, in violation of federal, state or local law.

21. NO USE OF CITY NAME OR EMBLEM
Contractor shall not use City’s name, insignia, or emblem, or distribute any information related to services under this Agreement in any magazine, trade paper, newspaper or other medium without express written consent of City.

22. GOVERNING LAW AND VENUE
This Agreement shall be governed and construed in accordance with the statutes and laws of the State of California. The venue of any suit filed by either Party shall be vested in the state courts of the County of Santa Clara, or if appropriate, in the United States District Court, Northern District of California, San Jose, California.

23. SEVERABILITY CLAUSE
In case any one or more of the provisions in this Agreement shall, for any reason, be held invalid, illegal or unenforceable in any respect, it shall not affect the validity of the other provisions, which shall remain in full force and effect.

24. AMENDMENTS
This Agreement may only be modified by a written amendment duly authorized and executed by the Parties to this Agreement.

25. COUNTERPARTS
This Agreement may be executed in counterparts, each of which shall be deemed to be an original, but both of which shall constitute one and the same instrument.

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The Parties acknowledge and accept the terms and conditions of this Agreement as evidenced by the following signatures of their duly authorized representatives.

CITY OF SANTA CLARA, CALIFORNIA
a chartered California municipal corporation

Approved as to Form: Dated:

Office of the City Attorney
City of Santa Clara

DEANNA J. SANTANA
City Manager
1500 Warburton Avenue
Santa Clara, CA 95050
Telephone: (408) 615-2210
Fax: (408) 241-6771
“CITY”

EUGENE BURGER MANAGEMENT CORPORATION
a California corporation

Dated:

By (Signature):

Name:

Title:

Principal Place of
Business Address:
6600 Hunter Drive
Rohnert Park CA 94928
Email Address:

Telephone: (707) 584-5123
Fax: (707) 584-5124
“CONTRACTOR”

Agreement with Eugene Burger Management Corporation/Exhibit A-Scope of Services Page 1 Rev. 07-01-18

EXHIBIT A

SCOPE OF SERVICES

1. DESCRIPTION OF WORK

1.1. Under this Agreement, Contractor will provide property management services necessary to rent, lease, operate, and manage two properties owned by the City of Santa Clara (“City”).

1.2. The property addresses are as follows:

1.2.1. Commerce Plaza (Current Agreement Expires on April 11, 2022) 900 Lafayette Street
Santa Clara, CA 95050

1.2.2. Peddler’s Plaza (Current Agreement Expires on September 30, 2021) 1000 Lafayette Street
Santa Clara, CA 95050

1.3. To the extent not inconsistent with this Agreement between the City and Contractor including this Scope of Services, the City’s RFP# 20-21-55 (including subsequent updates) and Contractor’s proposal response dated June 8, 2021 are hereby incorporated by reference herein, and shall supplement this Scope of Services and be subject to the terms and conditions of the Agreement.

2. REQUIREMENTS

2.1. Contractor must maintain a valid real estate broker’s license for the term of this Agreement and be in good standing with the California Department of Consumer Affairs and the California Department of Real Estate.

2.2. Contractor has reasonable and working knowledge and understanding of the general principles and responsibilities of property management including, but not limited to, the laws concerning real estate licensing, contracts, tenant/landlord responsibilities, fair housing, employment, property protection and insurance.

2.3. Contractor has working knowledge of principles of business administration, accounting, insurance, repairs and maintenance, and public relations.

3. SERVICE REQUIREMENTS

3.1. Contractor will provide property management services necessary to rent, lease, operate and manage two properties owned by the City of Santa Clara (“City”). Services will include, but not limited to, the following services:

Agreement with Eugene Burger Management Corporation/Exhibit A-Scope of Services Page 2 Rev. 07-01-18

3.1.1. Operation, Maintenance, and Repair Services. Contractor will maintain the City’s properties identified herein in good repair in accordance with all local codes, and in a condition at all times acceptable to the City, including but not limited monitoring and coordinating cleaning, painting, decorating, plumbing, carpentry, grounds care, and other maintenance and repair work as may be necessary, subject to any limitations imposed by the City in addition to those contained herein. The following will apply:

3.1.1.1. Contractor will contract with qualified independent contractors for ongoing preventative maintenance and minor repair
services, such as landscaping services, janitorial, etc.

Contractor shall follow all City purchasing codes and policies when obtaining services.

3.1.1.2. Enter into agreements on behalf of property owner for electricity, gas, steam, telephone window cleaning, trash removal, security, vermin extermination, and other services as deemed advisable.

3.1.1.3. Contractor will obtain contracts, materials, supplies, utilities, and services on the most advantageous terms for the Project, and is authorized to solicit bids, either formal or informal, for items that can be obtained from more than one source. The Contractor will secure and credit to the Owner all discounts, rebates or commissions obtainable with respect to purchases, service contracts, and all other transactions on the Owner's behalf.

3.1.1.4. Unless it is due to an emergency, Contractor will obtain prior written approval from the City for all expenditures over $1,000.

3.1.1.5. Contractor will promptly receive and investigate all services requests from tenants, take such action thereon as may be justified, and will keep records of the same. Emergency requests will be received and serviced on a twenty-four (24) hour basis and reported to the City by the next business day.

3.1.1.6. Ensure independent Contractors have necessary licensing and insurance coverage.

3.1.1.7. Ensure no improvements or modifications are made to the property without City approval.

3.1.1.8. Coordinate legal action against tenants and contractors as needed.

3.1.1.9. All services provided for repairs must comply with prevailing

Agreement with Eugene Burger Management Corporation/Exhibit A-Scope of Services Page 3 Rev. 07-01-18
wage laws under California Labor Code Section 1770 et seq.

The Director of the Department of Industrial Relations has ascertained the general prevailing rate of per diem wages and the rates for overtime and holiday work in the locality in which the services are to be performed for each craft, classification or type of worker needed to perform the services under the contract. Copies are on file with and available upon request from the Office of the Clerk of the Board of Supervisors or at http://www.dir.ca.gov/dlsr/DPreWageDetermination.htm.

3.1.1.10. City will reimburse Contractor for repairs in accordance with this section.

3.1.2. Leasing Services

3.1.2.1. Engage with tenants and coordinate with the City on negotiations and finalization with Lessee(s) for lease
agreements.

3.1.2.2. Ensure compliance with the lease agreement on behalf of the City.

3.1.2.3. Address any tenant concerns related to the physical condition of the property.

3.1.2.4. Maintain accurate records including procedures for enforcing the terms of lease agreements, and annual inspections to ensure compliance with Federal, State, and Local Housing Quality Standards and transmit said records and reports to the City on a monthly basis.

3.1.2.5. Manage and resolve conflicts among tenants. Document and keep all record of communications with tenants on issues, complaints, and resolutions.

3.1.2.6. Collection of Rents and other Receipts. Contractor will collect, when due, all rents, charges and other amounts receivable on the City’s account in connection with the management and operation of City owned properties identified herein. Such receipts will be deposited in an account, separate from all other accounts and funds, with a bank whose deposits are insured by the Federal Deposit Insurance Corporation.

This account will be carried in City National Bank and
designated of record as “Eugene Burger Management
Corporation Trust Account FBO City of Santa Clara property name - operating”.

3.1.3. Records and Reports. Contractor will have the following

Agreement with Eugene Burger Management Corporation/Exhibit A-Scope of Services Page 4 Rev. 07-01-18
responsibilities with respect to records and reports:

3.1.3.1. Annual Management Plan. An annual management plan incorporating an annual budget is to be developed by the Contractor for the project each year beginning with the project's next fiscal year. An interim plan, including an interim budget is to be developed, if necessary, to provide guidance from the beginning of this contract to the beginning of the next fiscal year. The annual management plan and budget shall set forth the financial, physical and operational goals to be achieved by the project in the succeeding fiscal year as well as any other special goals or interests set forth by the City.

3.1.3.2. Contractor will establish and maintain a comprehensive system of records, books, and accounts in a manner
satisfactory to the City. The City will determine whether records and books will be kept on an individual property basis or as a consolidated portfolio. EBMC recommends separate books for each property.

3.1.3.3. With respect to each fiscal year ending during the term of this Agreement, the Contractor will, upon the specific direction of the City, have an annual financial report prepared by a Certified Public Accountant or other person acceptable to the City. The report will be certified by the preparer and the Contractor and will be submitted to the City within sixty (60) days after the end of the fiscal year, for the City's further certification. Compensation for the preparer's services will be paid out of the Operating Account as an expense of the
Project.

3.1.3.4. Contractor will prepare a monthly report comparing actual and budgeted figures for receipts and disbursements and will submit each such report to the City on or about fifteen (15) days after the end of the month covered.

3.1.3.5. Contractor will furnish such information (including occupancy reports) as may be requested by the City from time to time with respect to the financial, physical or operational conditions of the City owned properties.

3.1.3.6. On or about the fifteenth (15th) day of each month, the Contractor will furnish the City with a statement of receipts and disbursements during the previous month, and with a schedule of accounts receivable and payable, and reconciled bank statements for the Operating Account and Security Account (if any) as of the end of the previous month.

Agreement with Eugene Burger Management Corporation/Exhibit A-Scope of Services Page 5 Rev. 07-01-18

3.1.3.7. By the fifteenth (15th) day of each month, the Contractor will furnish the owner with an itemized list of all delinquent accounts, including rental accounts as of the end of the previous month.

3.1.4. Accounting Services

3.1.4.1. Fidelity Bond. The Contractor will furnish, at its own expense, a fidelity bond in a principal sum which is at least equal to the gross potential income for two months and is conditioned to protect the City against misappropriation of Project funds by the Contractor and its employees.

3.1.4.2. Annual operating budgets for the City owned properties identified herein will be as approved by the City and
incorporated in the Annual Management Plan.

3.2. Disbursements from Operating Account. From the funds collected and deposited by the Contractor in the Operating Account the Contractor will make the following disbursements promptly when payable: utilities, maintenance services, repair services, janitorial services, landscape services, supplies and materials, misc. taxes and fees, insurance, etc.

3.3. Other Services

3.3.1. Perform, record, and submit to the City a bi-annual visual inspection.

3.3.2. Provide a detailed monthly management report to the City to include:

3.3.2.1. Monthly maintenance, preventative maintenance, and tenant requested maintenance.

3.3.2.2. Onsite property visits, inspections, and complaint logs.

3.3.2.3. Lease agreement enforcement issues.

3.3.2.4. Legal matters.

3.3.3. Provide annual operating budget for both properties to the City for review and approval.

Agreement with Eugene Burger Management Corporation/Exhibit B-Schedule of Fees Page 1 Rev. 07-01-18

EXHIBIT B

COMPENSATION

1. MAXIMUM COMPENSATION
The maximum amount payable for property management services provided under this Agreement and as set forth below shall not exceed Three Hundred Sixty-Six Thousand Seven Hundred Eighty-Four Dollars ($366,784) during the Initial Term of the Agreement. Any additional services requested by the City that would exceed the preceding maximum amount will be addressed in an Amendment to the Agreement. No additional services will be performed unless both Parties execute an Amendment outlining the services requested and the compensation agreed for such services.

2. FEES

2.1. In consideration of the property management services rendered to City by Contractor under this Agreement the City shall pay the following fees:

Management Services Fee
Description
Monthly Rate
Initial Term
Year 1 of 2
Initial Term
Year 1 of 2
Monthly Rate
Initial Term
Year 2 of 2
Initial Term
Year 2 of 2
Commerce Plaza* $8,000 $40,000 $8,150 $97,800
Peddler's Plaza $1,500 $18,000 $1,525 $18,300
Total for Annual Management Services
for Each Property $58,000 $116,100
TOTAL FOR ANNUAL MANAGEMENT SERVICES FOR INITIAL TERM $174,100 Other Service Fees
Description Initial Term Year 1 of 2 Fees Initial Term Year 2 of 2 Fees Accounting Services
Commerce Plaza $700/Month $715/Month
Peddler's Plaza $300/Month $305/Month

TOTAL FOR ACCOUNTING SERVICES FOR INITIAL
TERM $19,340
Construction Management Fees 10% of Improvement Costs
Leasing Services

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For Vacant Space New Tenants:
- 6% of the fixed annual minimum rent payable under the terms of the original lease during the first three (3) years of the lease
- 5% of the fixed annual minimum rent payable during the next two years (2) of the original lease
- 4% of all rent payable thereafter during the sixth and subsequent years of the original lease
For Existing Tenants:
- Renewal expansion rates for existing tenants will be 50% of the leasing fee for new tenants identified above.

TOTAL ESTIMATE FOR LEASING SERVICES FOR
INITIAL TERM $140,000
CONTINGENCY (10%) $33,344

MAXIMUM COMPENSATION NOT-TO-EXCEED FOR
INITIAL TERM $366,784
*Property Management Services for Commerce Plaza will not begin until April 2022, the amount noted for the management service fee for this location is for only five months for year 1 of 2.

2.2. Contractor is entitled to the leasing fee specified in the above table when (i) the lease is fully executed with tenant (ii) the first months rent and security deposit (if applicable) is paid to the City.

3. PRICING AND OPTION RENEWALS

3.1. Pricing is firm fixed for the Initial Term of the Agreement.

3.2. Price Adjustments: Contractor may request adjustments to rates prior to any one-year option to renew the Agreement after the Initial Term. Price increase requests must be tied to CPI, PPI, or relevant industry specific index. Requests for increase must be fully documented by Contractor. Price adjustments are subject to City’s approval.

4. INVOICING

4.1. Contractor shall invoice the City on a monthly basis for Services provided by the Contractor during the preceding month on an invoice and in the format approved by the City and is subject to verification and approval by the City.

4.2. City will pay Contractor within thirty (30) days of City’s receipt of an approved invoice.

Agreement with Eugene Burger Management Corporation/Exhibit C-Insurance Requirements Page 1 Rev. 07-01-18

EXHIBIT C

INSURANCE REQUIREMENTS

Without limiting the Contractor’s indemnification of the City, and prior to commencing any of the Services required under this Agreement, the Contractor shall provide and maintain in full force and effect, at its sole cost and expense, the following insurance policies with at least the indicated coverages, provisions and endorsements:

A. COMMERCIAL GENERAL LIABILITY INSURANCE

1. Commercial General Liability Insurance policy which provides coverage at least as broad as Insurance Services Office form CG 00 01. Policy limits are subject to review, but shall in no event be less than, the following:
$2,000,000 Each occurrence
$2,000,000 General aggregate
$2,000,000 Products/Completed Operations aggregate
$2,000,000 Personal Injury

2. Exact structure and layering of the coverage shall be left to the discretion of Contractor; however, any excess or umbrella policies used to meet the required limits shall be at least as broad as the underlying coverage and shall otherwise follow form.

3. The following provisions shall apply to the Commercial Liability policy as well as any umbrella policy maintained by the Contractor to comply with the insurance requirements of this Agreement:
a. Coverage shall be on a “pay on behalf” basis with defense costs payable in addition to policy limits;
b. There shall be no cross liability exclusion which precludes coverage for claims or suits by one insured against another; and c. Coverage shall apply separately to each insured against whom a claim is made or a suit is brought, except with respect to the limits of liability.

B. BUSINESS AUTOMOBILE LIABILITY INSURANCE
Business automobile liability insurance policy which provides coverage at least as broad as ISO form CA 00 01 with policy limits a minimum limit of not less than one million dollars ($1,000,000) each accident using, or providing coverage at least as broad as, Insurance Services Office form CA 00 01. Liability coverage shall apply to all owned, non-owned and hired autos.

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C. WORKERS’ COMPENSATION

1. Workers’ Compensation Insurance Policy as required by statute and employer’s liability with limits of at least one million dollars ($1,000,000) policy limit Bodily Injury by disease, one million dollars ($1,000,000) each accident/Bodily Injury and one million dollars ($1,000,000) each employee Bodily Injury by disease.

2. The indemnification and hold harmless obligations of Contractor included in this Agreement shall not be limited in any way by any limitation on the amount or type of damage, compensation or benefit payable by or for Contractor or any subcontractor under any Workers’ Compensation Act(s), Disability Benefits Act(s) or other employee benefits act(s).

3. This policy must include a Waiver of Subrogation in favor of the City of Santa Clara, its City Council, commissions, officers, employees, volunteers and agents.

D. COMPLIANCE WITH REQUIREMENTS
All of the following clauses and/or endorsements, or similar provisions, must be part of each commercial general liability policy, and each umbrella or excess policy.

1. Additional Insureds. City of Santa Clara, its City Council, commissions, officers, employees, volunteers and agents are hereby added as additional insureds in respect to liability arising out of Contractor’s work for City, using Insurance Services Office (ISO) Endorsement CG 20 10 11 85 or the combination of CG 20 10 03 97 and CG 20 37 10 01, or its equivalent.

2. Primary and non-contributing. Each insurance policy provided by Contractor shall contain language or be endorsed to contain wording making it primary insurance as respects to, and not requiring contribution from, any other insurance which the Indemnities may possess, including any self-insurance or self-insured retention they may have. Any other insurance Indemnities may possess shall be considered excess insurance only and shall not be called upon to contribute with Contractor’s insurance.

3. Cancellation.
a. Each insurance policy shall contain language or be endorsed to reflect that no cancellation or modification of the coverage provided due to non-payment of premiums shall be effective until written notice has been given to City at least ten (10) days prior to the effective date of such modification or cancellation. In the event of non-renewal, written notice shall be given at least ten (10) days prior to the effective date of non-renewal.

Agreement with Eugene Burger Management Corporation/Exhibit C-Insurance Requirements Page 3 Rev. 07-01-18
b. Each insurance policy shall contain language or be endorsed to reflect that no cancellation or modification of the coverage provided for any cause save and except non-payment of premiums shall be effective until written notice has been given to City at least thirty (30) days prior to the effective date of such modification or cancellation. In the event of non-renewal, written notice shall be given at least thirty (30) days prior to the effective date of non- renewal.

4. Other Endorsements. Other endorsements may be required for policies other than the commercial general liability policy if specified in the description of required insurance set forth in Sections A through D of this Exhibit C, above.

E. ADDITIONAL INSURANCE RELATED PROVISIONS
Contractor and City agree as follows:

1. Contractor agrees to ensure that subcontractors, and any other party involved with the Services who is brought onto or involved in the performance of the Services by Contractor, provide the same minimum insurance coverage required of Contractor, except as with respect to limits. Contractor agrees to monitor and review all such coverage and assumes all responsibility for ensuring that such coverage is provided in conformity with the requirements of this Agreement. Contractor agrees that upon request by City, all agreements with, and insurance compliance documents provided by, such subcontractors and others engaged in the project will be submitted to City for review.

2. Contractor agrees to be responsible for ensuring that no contract used by any party involved in any way with the project reserves the right to charge City or Contractor for the cost of additional insurance coverage required by this Agreement. Any such provisions are to be deleted with reference to City. It is not the intent of City to reimburse any third party for the cost of complying with these requirements. There shall be no recourse against City for payment of premiums or other amounts with respect thereto.

3. The City reserves the right to withhold payments from the Contractor in the event of material noncompliance with the insurance requirements set forth in this Agreement.

F. EVIDENCE OF COVERAGE
Prior to commencement of any Services under this Agreement, Contractor, and each and every subcontractor (of every tier) shall, at its sole cost and expense, provide and maintain not less than the minimum insurance coverage with the endorsements and deductibles indicated in this Agreement. Such insurance coverage shall be maintained with insurers, and under forms of policies,

Agreement with Eugene Burger Management Corporation/Exhibit C-Insurance Requirements Page 4 Rev. 07-01-18
satisfactory to City and as described in this Agreement. Contractor shall file with the City all certificates and endorsements for the required insurance policies for City’s approval as to adequacy of the insurance protection.

G. EVIDENCE OF COMPLIANCE
Contractor or its insurance broker shall provide the required proof of insurance compliance, consisting of Insurance Services Office (ISO) endorsement forms or their equivalent and the ACORD form 25-S certificate of insurance (or its equivalent), evidencing all required coverage shall be delivered to City, or its representative as set forth below, at or prior to execution of this Agreement.

Upon City’s request, Contractor shall submit to City copies of the actual insurance policies or renewals or replacements. Unless otherwise required by the terms of this Agreement, all certificates, endorsements, coverage verifications and other items required to be delivered to City pursuant to this Agreement shall be emailed to:
[email protected]
or mailed to:

EBIX Inc.

City of Santa Clara Electric Department
P.O. Box 100085 – S2
Duluth, GA 30096
Telephone number: 951-766-2280
Fax number: 770-325-0409
H. QUALIFYING INSURERS
All of the insurance companies providing insurance for Contractor shall have, and provide written proof of, an A. M. Best rating of at least A minus 6 (A- VI) or shall be an insurance company of equal financial stability that is approved by the City or its insurance compliance representatives.

Agreement with Eugene Burger Management Corporation/Exhibit D-Notice of Option to Extend Agreement Page 1
Rev. 07-01-18

EXHIBIT D

NOTICE OF EXERCISE OF OPTION TO EXTEND AGREEMENT

AGREEMENT TITLE:

CONTRACTOR:

DATE:

Pursuant to Section __ of the Agreement referenced above, the City of Santa Clara hereby exercises its option to extend the term under the following provisions:

OPTION NO. # of #

NEW OPTION TERM
Begin date:

End date:

CHANGES IN RATE OF COMPENSATION

Percentage change in CPI upon which adjustment is based:

Pursuant to Section ___ of the Agreement the rates of compensation are hereby adjusted as follows:
(use attachment if necessary)

MAXIMUM COMPENSATION for New Option Term:

For the option term exercised by this Notice, City shall pay Contractor an amount not to exceed the amount set forth above for Contractor’s services and reimbursable expenses, if any. The undersigned signing on behalf of the City of Santa Clara hereby certifies that an unexpended appropriation is available for the term exercised by this Notice, and that funds are available as of the date of this signature.

Approved as to Form:

Dated:

Office of the City Attorney
City of Santa Clara

DEANNA J. SANTANA
City Manager
1500 Warburton Avenue
Santa Clara, CA 95050
Telephone: (408) 615-2210
Fax: (408) 241-6771

□

September 3, 2021

City of Santa Clara
1500 Warburton Avenue
Finance Department – Purchasing Division
Santa Clara, CA 95050
Attention: Purchasing Officer

RE: Notice of Protest regarding Bid# RFP 20-21-55

Directed to: Purchasing Officer

This is to file formal protest pursuant to the above RFP (Section 17,) in which our firm recently participated. The subject RFP was issued for property management duties associated with two commercial properties the city will soon be gaining back under ground lease agreements (900- 1000 Lafayette Street in Santa Clara.)

Orchard Commercial has a long standing and successful relationship with the city, for which we have high regard and appreciation and we are grateful for the opportunity to collaborate with the city under existing service agreements. In particular, our work managing MD#183 (Maintenance District) which supports the Convention Center, Hyatt Hotel, Tech Mart and parking structure and grounds was recently rewarded with a contract extension.

Our pro test of the subject RFP Award Recommendation is based on a number of factors as outlined below.

1. Based on our past experience and current work with the city, our understanding is that contractual preference is given to do business with (i) locally-based service firms that (ii) offer the best pricing and (iii) are willing to accept the city’s contractual terms. Orchard meets each of these criteria but was not selected in this case. We scored the best in key areas of “cost and qualifications.” We submitted the lowest bid and were the only Santa Clara-based company considered while the competing firm is located nearly 100 miles away and submitted the highest cost proposal.

2. The Ground Lease transfer for these assets and related leasing plan is an integral part of the underlying value of the buildings. Discussing and fully understanding these dynamics

ORCHARD -------

COMMERCIAL
would greatly assist with developing a strategy and pricing model for new and renewing tenants as well as how to market and lease the vacant space. As outlined in our response, Orchard believes it to be in the city’s best interest to engage a leasing broker for this purpose in order to gain the best market intelligence before entering into lease commitments with tenants . H owever without the benefit of a discussion or interview, the city is denying itself the opportunity to fully vet the options and make the most informed decision related to this RFP . We made several requests for an interview to discuss this key topic but were denied.

3. The pre-award tabulation report was very limited in terms of what was scored from the written proposal. It only included the following:

o Qualifications and Experience of the firm
o Qualifications and Experience of personnel
o Demonstrated Capability
o Cost

There were only two firms bidding on the assignment, including Orchard and a company based in Rohnert Park, located nearly 100 miles away and a 2 -hour drive from Santa Clara. Orchard scored best on Cost and Qualifications , areas we think represent high priorities for the city, yet the overall score was slightly higher for the other firm based on “qualifications of the firm and demonstrated capability.” We did not elaborate in our RFP response on topics such as “emergency procedures, dealing with tenant complaints and vendor relations” since we assumed our status as the leading Silicon Valley PM firm would be apparent. Perhaps an oversight on our part, but not a basis for inferior scoring.

May we suggest other key attributes of the service f irms be considered such as (i) depth and coverage in the local market to respond to emergencies, (ii) available corporate support and (iii) a demonstrated commitment to the City of Santa Clara by virtue of its base of business and (iv) charitable & civic contributions . Additionally, may we suggest that s uccess in the property management business depends and relies upon local resources and knowledge, which Orchard offers more of than any other firm. Our company manages 12 million square feet in the region and we have been recognized as the largest privately owned PM firm in Silicon Valley. This translates to being able to replace people when turnover occurs, for example. Most importantly, we have specific strategies in mind for these assets we wish to explore with the city in order that the best choice may be made for value creation and preservation.

In summary, there is considerably more information to be obtained when making a selection to manage a valuable real estate portfolio than what may be contained in a written proposal scored on limited categories. That is why most RFP processes include an oral interview. We understand this to be in the city’s discretion and highly recommend that you exercise your right to do so. We believe this additional key step will provide the best available intelligence to the city prior to making a final selection for this important RFP.

Very respectfully and sincerely,
ORCHARD COMMERCIAL, INC.

Tim Ballas CPM, CCIM
VP, Director of Asset Management

[email protected]

510.329.1280

1500 Warburton Avenue ● Santa Clara, CA 95050 ● Phone: 408-615-2340 ● Fax: 408-243-8687 ● www.SantaClaraCA.gov Finance Department

September 21, 2021

Mr. Tim Ballas
Orchard Commercial Inc.
3350 Thomas Road, Suite 201
Santa Clara, CA 95054

Reference: City of Santa Clara RFP 20-21-55 for Property Management Services

Dear Mr. Ballas,

The City of Santa Clara (City) received the subject letter from Orchard Commercial, Inc. (Orchard) regarding the award recommendation for RFP 20-21-55, Property Management Services. In your letter, you request that the City reconsider its decision not to conduct oral interviews with each proposer prior to making a final recommendation of award to Eugene Burger Management Corporation (EBMC).

Background:

The objective of the referenced RFP for Property Management Services was to select a vendor to provide property management services for two City owned properties, Commerce Plaza and Peddler’s Plaza. Proposals were evaluated and scored by a four-member evaluation team with representatives from the City Manager’s Office and the Community Development Department.

Scoring was based on the following evaluation criteria and corresponding weights:

Qualifications and Experience of Firm (25%), Qualifications and Experience of Key Personnel (25%), Demonstrated Capability (30%), and Cost (20%). The RFP requested that proposers respond to a series of questions that mapped to each criterion. The RFP instructions stated that the recommendation of award may be based on the final scores of the written proposals and, at the sole discretion of the City, an optional oral presentation and Best and Final Offer (BAFO).

On August 19, 2021, the City issued a Notice of Intended Award to Eugene Burger Management for property management services based on the scores of their written proposal and Best and Final Offer.

On September 2, 2021, you received a debrief on the RFP with the City’s Contracts Manager, who also facilitated the RFP process. The briefing covered Orchard’s strengths and weaknesses, and several elements of the RFP including the City’s local business preference, ground lease requirements, and the possibility of introducing additional elements to consider as part of the evaluation process.

Subject: Notice of Protest regarding RFP 20-21-55 dated September 3, 2021 City of
Santa Clara
ThP. CentP.r of What's Possible
Notice of Protest from Orchard Commercial, Inc. dated September 3, 2021

1500 Warburton Avenue ● Santa Clara, CA 95050 ● Phone: 408-615-2340 ● Fax: 408-243-8687 ● www.SantaClaraCA.gov On September 3, 2021, you submitted your Notice of Protest requesting the City to conduct an oral presentation to provide Orchard the opportunity to address many of the same topics that were discussed in the debrief.

Discussion:

Orchard Commercial’s Notice of Protest makes the following arguments to support why the City should reconsider its decision not to conduct oral presentations that would have provided Orchard the opportunity to introduce new requirements that Orchard feels should have been considered by the City.

Argument 1:

a) Orchard Commercial is an active, local business with a long-standing presence in the City of Santa Clara, offered the lowest pricing, and is willing to accept the City’s contractual terms.

b) Orchard Commercial did not object to the City’s contractual terms.

c) Orchard Commercial scored best in the key areas of cost and qualifications and submitted the lowest bid.

Response:

a) Santa Clara City Code Section 2.105.260 provides a local preference of 1% for bids where low price is the only award factor. For example, if a vendor located in the City of Santa Clara submits a bid for $100, that bid will be considered as $99 when comparing the other bidders. The City does not have a local preference for a “best value” or evaluative process, which was the scoring methodology for this RFP.

Notwithstanding, 1% consideration of Orchard’s total score would not have changed the outcome of the award.

b) The evaluation team is aware and noted that Orchard Commercial did not take exceptions to the City’s contractual terms.

c) Considering the evaluation criteria listed above, Orchard’s scores were 5% higher, and 44% and 60% lower for Qualifications and Experience of Key Personnel, Qualifications and Experience of Firm, and Demonstrated Capability, respectively.

The cost proposal score is misleading. Although it appears that Orchard’s cost is 50% less than EBMC’s (20 versus 10 points), the cost proposals were not equally compared because EBMC provided pricing for leasing services (as requested) that was valued at $360,000, and Orchard elected not to price this item stating that leasing “will be provided by others.” A more accurate approach to scoring cost would have been not to consider the $360,000. When doing so, there is a 25% separation Notice of Protest from Orchard Commercial, Inc. dated September 3, 2021

1500 Warburton Avenue ● Santa Clara, CA 95050 ● Phone: 408-615-2340 ● Fax: 408-243-8687 ● www.SantaClaraCA.gov between the scores, with Orchard’s price $62,660 higher than EBMC’s. Adjusting the cost scores by using this more accurate comparison increases the separation between the total scores and has no effect on the overall rankings.

Argument 2:

The City should have conducted oral interviews to better understand the dynamics of the Ground Lease transfer. Several requests for an interview were denied.

Response:

The RFP introduction clearly states that the City was seeking proposals to “provide professional property management services necessary to lease, operate, and manage two properties owned by the City.” The statement of work also included requirements for leasing services. In addition, the BAFO required pricing for leasing services.

The RFP required that proposers describe a strategy and provide a cost for leasing services. Orchard elected not to provide this information, and recommended deferring discussion of the requirement pending the completion of other tasks.

After the proposals were submitted and during the evaluation process, Orchard requested an oral interview to discuss the requirement that they did not address in their proposal.

Oral presentations are typically conducted when the City wants clarification or additional information on what was proposed. Oral presentations are not conducted to provide proposers the opportunity to “fill-in” significant omissions that should have been addressed in their proposal. If Orchard wanted additional information or clarification regarding this requirement, the RFP process included a process for Q&A and Objections as discussed below.

Argument 3:

a) The pre-award tabulation report was very limited in terms of what was scored from the written proposal. It only included the following:

• Qualifications and Experience of the Firm
• Qualifications and Experience of Personnel
• Demonstrated Capability
• Cost
b) Orchard did not elaborate (in their proposal) on several service areas, “assuming our (Orchard’s) status as a leading Silicon Valley PM firm would be apparent.” Notice of Protest from Orchard Commercial, Inc. dated September 3, 2021

1500 Warburton Avenue ● Santa Clara, CA 95050 ● Phone: 408-615-2340 ● Fax: 408-243-8687 ● www.SantaClaraCA.gov Orchard further states that, “this was an oversight on our (Orchard’s) part, but not a basis for inferior scoring.”

c) Orchard contends that many additional attributes should have been considered in the selection process, and these could have been presented in an oral presentation.

Response

a) As stated in the Background section of this letter, the RFP requested that proposers respond to a series of questions that map to each of the evaluation criteria described above.

b) G enerally, evaluators are only able to evaluate and score information that is presented to them. There were several areas in the RFP that allowed Orchard to address their status as a leading Silicon Valley firm and elaborate on key service areas. Electing not to address these key areas in your proposal is a basis for lower scoring.

c) The RFP process included two opportunities for proposers to request the City to consider additional information: 1) the Question & Answer process and 2) the Objections process described in Sections 10 and 11 of the RFP, respectively.

Specifically, the Objections section allows proposers to object to the “structure, content or distribution” of the RFP prior to the close of the Q&A period. Orchard did not avail itself of these processes, electing instead to introduce new attributes after the proposal deadline and during the evaluation process, and further requesting that such concerns be considered using the oral presentation process.

If oral presentations are conducted, they occur later in the process, after proposals are received and evaluated. They are never conducted after a proposer is debriefed on the process where the proposer was made aware of the strengths and weaknesses of their proposal. Oral presentations are intended to further explore and understand information that was submitted. Oral presentations are not designed to provided second chances to address significant proposal omissions or consider new information that might change the specifications or evaluation factors, thus requiring a re-bid for the service.

The City elected not to conduct oral presentations because the evaluation team agreed that sufficient information was provided to make a final decision.

Notice of Protest from Orchard Commercial, Inc. dated September 3, 2021

1500 Warburton Avenue ● Santa Clara, CA 95050 ● Phone: 408-615-2340 ● Fax: 408-243-8687 ● www.SantaClaraCA.gov Conclusion:

The RFP process was conducted fairly and pursuant to the rules set forth in the RFP. Therefore, I am upholding staff’s award recommendation to Eugene Burger Management Corporation and denying your request to further the process by conducting oral presentations.

Thank you for your interest and participation in the RFP process.

Sincerely,

Mark Giovannetti
Purchasing Division Manager

1 City Coun!cil
Hearing
Item 4.1 21-1214
Property Management Services and
Lease Extensions
September 28, 2021
Conceptual Timeline
2 • Two-year lease extension fits comfortably within Downtown construction schedule • Precise Plan adoption currently scheduled for July 2022 • After Plan adoption start land disposition process for City property (does not apply to any private property in the Downtown)
• Surplus Land Process - 6 months
- Council Surplus Declaration
- Noticing Period: 60-day noticing period
- City respond to Eligible Entities - negotiation for no less than 90 days - Council consideration
• If no notices of interest are received or if negotiations conclude with no recommended project proposals, City can proceed with RFP POST MEETING MATERIAl. 1
3 4
lf~ Cityof
~~) Santa Clara
-- ThoCet1terofWha1 , Po11iblo
Conceptual Timeline
• Developer Selection Process - 12 months
- Develop and advertise Request For Proposals (RFP)
- Evaluate RFP
- Select Developer and negotiate Exclusive Negotiation Agreement (ENA) - Council Consideration of Developer and ENA
• Conceptual Design/Community Outreach -15 months
- Initial conceptual design and community outreach
- Additional environmental work
- Council Consideration of Conceptual Design and Development Agreement • Final Design and City Permits -12 months
• Construction begins
City Council
Hearing
Item 21 -1214
Property Management Services and
Lease Extensions
Septem ber 28, 2021
2 RESOLUTION NO. 21-9001

A RESOLUTION OF THE CITY OF SANTA CLARA, CALIFORNIA

APPROVING AN AGREEMENT BETWEEN THE CITY OF SANTA

CLARA AND EUGENE BURGER MANAGEMENT CORPORATION

FOR PROPERTY MANAGEMENT SERVICES OF CITY-OWNED
COMMERCIAL PROPERTIES INCLUDING 900 AND 1000

LAFAYETTE STREET AND AUTHORIZING THE CITY MANAGER

TO NEGOTIATE AND EXECUTE AGREEMENTS RELATED TO
THE PROPERTIES LOCATED AT 900 AND 1000 LAFAYETTE
STREET
BE IT RESOLVED BY THE CITY OF SANTA CLARA AS FOLLOWS:

WHEREAS, the City of Santa Clara ("City") is the landowner of two downtown properties located at 1000 Lafayette Street, known as Peddler's Plaza, and 900 Lafayette Street, known as Commerce Plaza;
WHEREAS, in 1971, the City entered into long-term ground leases which are set to expire in the coming months;
WHEREAS, Peddler's Plaza is approximately a 1.3-acre site with a one-story retail commercial building. The retail commercial building has 10,300 square feet of leasable space with seven (7) units. The Peddler's Plaza Ground-Lease will expire on September 30, 2021; WHEREAS, Commerce Plaza is approximately a 3.7-acre site with a seven-story office building.

The office building has 90,000 square feet of leasable space with 60 units. The Commerce Plaza Ground Lease will expire on April 11, 2022;
WHEREAS, the City is in the process of developing a specific plan for the downtown area which includes both Peddler's Plaza and Commerce Plaza;
WHEREAS, in the interim, the City desires to maintain occupancy of both buildings, until the City determines how to develop the area and these properties; WHEREAS, the City would like to enter into lease agreements with tenants to continue to use the property for a period not to exceed two year;
II
II
Resolution/Eugene Burger
Rev: 11/22/17

WHEREAS, in 2021, a competitive Request for Proposal (RFP) was advertised on the City's bid notification system for a Contractor to provide property management services necessary to rent, lease, operate and manage Peddler's Plaza and Commerce Plaza that are owned by the City; and,
WHEREAS, as the Ground Lease is set to terminate, the Agreement for Services between the City of Santa Clara and Eugene Burger Management contemplates the provision of professional property management services to rent, lease, operate and manage Peddler's Plaza and Commerce Plaza. The initial term of the agreement will be two years. The City may extend the Agreement for three additional one-year options.

NOW THEREFORE, BE IT FURTHER RESOLVED BY THE CITY OF SANTA CLARA AS FOLLOWS:

1. That the City Council hereby finds that the above Recitals are true and correct and by this reference makes them a part hereof.

2. That the City Council hereby approves and authorizes the City Manager to execute the Agreement for Services between the City of Santa Clara and Eugene Burger Management, substantially in the form attached hereto as Exhibit "Agreement," subject to clarifying changes consistent with the terms thereof as may be approved by the City Attorney prior to execution thereof.

3. That this Resolution, including the Agreement approval described in Section 2 above, is based on the findings set forth above.

4. That the City Manager and/or designee is hereby authorized and directed to do the following:

A Negotiate and execute an Agreement with Eugene Burger Management Corporation to provide property management services for an initial two-year term beginning on or about September 28, 2021 and ending on or about September 30, 2023 with maximum compensation not-to-exceed $328,284 and subject to the appropriation of funds; Resolution/Eugene Burger
Rev: 11/22/17

B. Execute amendments to the Agreement, not to exceed $29,844, for contingencies in the event there are unanticipated changes during the initial term of the Agreement, subject to the appropriation of funds; and,
C. Execute three one-year options to extend the term of the Agreement after the initial term through September 30, 2026 for property management services, subject to the appropriation of funds.

D. Execute amendments to each of the agreements to add funds as required in the event revenues collected exceed staff's estimates, subject to the appropriation of funds.

E. Negotiate and execute assignment and assumption agreements, commercial leases, and related amendments for the commercial spaces located at 900 and 1000 Lafayette Street for a term not to exceed 2 years on a form agreement subject to the approval of the City Attorney.

F. That the City Manager and/or designee is hereby authorized and directed to perform all acts to be performed by the City in the administration of the Agreement for Services between the City of Santa Clara and Eugene Burger Management pursuant to the terms of the submitted proposal. The City Manager and/or designee is further authorized and directed to perform all other acts, including to negotiate and execute all documents (including leases and amendments) necessary or convenient to carry out the purposes of this Resolution and the Agreement.

II
II
II
II
II
II
II
Resolution/Eugene Burger
Rev: 11 /22/17

5. Effective date. This resolution shall become effective immediately .

I HEREBY CERTIFY THE FOREGOING TO BE A TRUE COPY OF A RESOLUTION PASSED

AND ADOPTED BY THE CITY OF SANTA CLARA, CALIFORNIA, AT A REGULAR MEETING THEREOF HELD ON THE 28TH DAY OF SEPTEMBER, 2021, BY THE FOLLOWING VOTE:

AYES : COUNCILORS :

NOES: COUNCILORS:

ABSENT: COUNCILORS:

ABSTAINED: COUNCILORS:

Attachments incorporated by reference:

1. Agreement for Services
Resolution/Eugene Burger
Rev: 11 /22/17
Hardy, Jain, Park, and Watanabe
Becker, and Chahal
None

RA PIMENTEL , MMC

ASSISTANT CITY CLERK

CITY OF SANTA CLARA

EBIX Insurance No. S200004811

AGREEMENT FOR SERVICES

BETWEEN THE

CITY OF SANTA CLARA, CALIFORNIA,
AND

EUGENE BURGER MANAGEMENT CORPORATION

PREAMBLE
This Agreement is entered into between the City of Santa Clara, California, a chartered California municipal corporation (City) and Eugene Burger Management Corporation a California corporation, (Contractor). City and Contractor may be referred to individually as a "Party" or collectively as the "Parties" or the "Parties to this Agreement."

RECITALS
A. City desires to secure the services more fully described in this Agreement, at Exhibit A, entitled "Scope of Services";
B. Contractor represents that it, and its subcontractors, if any, have the professional qualifications, expertise, necessary licenses and desire to provide certain goods and/or required services of the quality and type which meet objectives and requirements of City; and,
C. The Parties have specified herein the terms and conditions under which such services will be provided and paid for.

The Parties agree as follows:

AGREEMENT TERMS AND CONDITIONS

1. AGREEMENT DOCUMENTS
The documents forming the entire Agreement between City and Contractor shall consist of these Terms and Conditions and the following Exhibits, which are hereby incorporated into this Agreement by this reference:

Exhibit A - Scope of Services
Exhibit B - Schedule of Fees
Exhibit C - Insurance Requirements
Exhibit D - Notice of Exercise of Option to Extend Agreement This Agreement, including the Exhibits set forth above, contains all the agreements, representations and understandings of the Parties, and supersedes and replaces any previous agreements, representations and understandings, Agreement with Eugene Burger Management Corporation
Rev. 07-01-18

whether oral or written. In the event of any inconsistency between the provisions of any of the Exhibits and the Terms and Conditions, the Terms and Conditions shall govern and control.

2. TERM OF AGREEMENT
A. Initial Term. Unless otherwise set forth in this Agreement or unless this paragraph is subsequently modified by a written amendment to this Agreement, the term of this Agreement shall begin on or about September 28, 2021 and terminate on September 30, 2023.

B. Options to Extend. After the Initial Term, the City reserves the right, at its sole discretion, to extend the term of this Agreement for up to three (3) additional one-year terms through September 30, 2026 ("Option Periods"), subject to the appropriation of funds. See Exhibit D for Notice of Exercise to Option to Extend Agreement Form.

3. SCOPE OF SERVICES & PERFORMANCE SCHEDULE
Contractor shall perform those Services specified in Exhibit A within the time stated in Exhibit A. Time is of the essence.

4. WARRANTY
Contractor expressly warrants that all materials and services covered by this Agreement shall be fit for the purpose intended, shall be free from defect and shall conform to the specifications, requirements and instructions upon which this Agreement is based. Contractor agrees to promptly replace or correct any incomplete, inaccurate or defective Services at no further cost to City when defects are due to the negligence, errors or omissions of Contractor. If Contractor fails to promptly correct or replace materials or services, City may make corrections or replace materials or services and charge Contractor for the cost incurred by City.

5. QUALIFICATIONS OF CONTRACTOR~ STANDARD OF CARE
Contractor represents and maintains that it has the expertise in the professional calling necessary to perform the Services, and its duties and obligations, expressed and implied, contained herein, and City expressly relies upon Contractor's representations regarding its skills and knowledge. Contractor shall perform such Services and duties in conformance to and consistent with the professional standards of a specialist in the same discipline in the State of California.

6. COMPENSATION AND PAYMENT
In consideration for Contractor's complete performance of Services, City shall pay Contractor for all materials provided and Services rendered by Contractor in Agreement with Eugene Burger Management Corporation
Rev. 07-01-18
Page2
accordance with Exhibit B, entitled "SCHEDULE OF FEES." The maximum compensation of this Agreement is Three Hundred Sixty-Six Thousand Seven Hundred Eighty-Four Dollars ($366,784), subject to budget appropriations, which includes all payments that may be authorized for Services and for expenses, supplies, materials and equipment required to perform the Services.

All work performed or materials provided in excess of the maximum compensation shall be at Contractor's expense. Contractor shall not be entitled to any payment above the maximum compensation under any circumstance.

7. TERMINATION
A.

B.

C.

Termination for Convenience. City shall have the right to terminate this Agreement, without cause or penalty, by giving not less than Thirty (30) days' prior written notice to Contractor.

Termination for Default. If Contractor fails to perform any of its material obligations under this Agreement, in addition to all other remedies provided by law, City may terminate this Agreement immediately upon written notice to Contractor.

Upon termination, each Party shall assist the other in arranging an orderly transfer and close-out of services. As soon as possible following the notice of termination, but no later than ten (10) days after the notice of termination, Contractor will deliver to City all City information or material that Contractor has in its possession.

8. ASSIGNMENT AND SUBCONTRACTING
City and Contractor bind themselves, their successors and assigns to all covenants of this Agreement. This Agreement shall not be assigned or transferred without the prior written approval of City. Contractor shall not hire subcontractors without express written permission from City.

Contractor shall be as fully responsible to City for the acts and omissions of Its subcontractors, and of persons either directly or indirectly employed by them, as Contractor is for the acts and omissions of persons directly employed by it.

9. NO THIRD-PARTY BENEFICIARY
This Agreement shall not be construed to be an agreement for the benefit of any third party or parties and no third party or parties shall have any claim or right of action under this Agreement for any cause whatsoever.

10. INDEPENDENT CONTRACTOR
Contractor and all person(s) employed by or contracted with Contractor to furnish labor and/or materials under this Agreement are independent contractors and do Agreement with Eugene Burger Management Corporation
Rev. 07-01-18

not act as agent(s) or employee(s) of City. Contractor has full rights to manage its employees in their performance of Services under this Agreement.

11. CONFIDENTIALITY OF MATERIAL
All ideas, memoranda, specifications, plans, manufacturing procedures, data, drawings, descriptions, documents, discussions or other information developed or received by or for Contractor and all other written information submitted to Contractor in connection with the performance of this Agreement shall be held confidential by Contractor and shall not, without the prior written consent of City, be used for any purposes other than the performance of the Services nor be disclosed to an entity not connected with performance of the Services. Nothing furnished to Contractor which is otherwise known to Contractor or becomes generally known to the related industry shall be deemed confidential.

12. OWNERSHIP OF MATERIAL
All material, which shall include, but not be limited to, data, sketches, tracings, drawings, plans, diagrams, quantities, estimates, specifications, proposals, tests, maps, calculations, photographs, reports, designs, technology, programming, works of authorship and other material developed, collected, prepared or caused to be prepared under this Agreement shall be the property of City but Contractor may retain and use copies thereof. City shall not be limited in any way or at any time in its use of said material. However, Contractor shall not be responsible for damages resulting from the use of said material for work other than Project, including, but not limited to, the release of this material to third parties.

13. RIGHT OF CITY TO INSPECT RECORDS OF CONTRACTOR
City, through its authorized employees, representatives or agents shall have the right during the term of this Agreement and for four (4) years from the date of final payment for goods or services provided under this Agreement, to audit the books and records of Contractor for the purpose of verifying any and all charges made by Contractor in connection with Contractor compensation under this Agreement, including termination of Contractor. Contractor agrees to maintain sufficient books and records in accordance with generally accepted accounting principles to establish the correctness of all charges submitted to City. Any expenses not so recorded shall be disallowed by City. Contractor shall bear the cost of the audit if the audit determines that there has been a substantial billing deviation in excess of five (5) percent adverse to the City.

Contractor shall submit to City any and all reports concerning its performance under this Agreement that may be requested by City in writing. Contractor agrees to assist City in meeting City's reporting requirements to the State and other agencies with respect to Contractor's Services hereunder.

Agreement with Eugene Burger Management Corporation
Rev. 07-01-18
Page4

14. HOLD HARMLESS/INDEMNIFICATION
A. To the extent permitted by law, Contractor agrees to protect, defend, hold harmless and indemnify City, its City Council, commissions, officers, employees, volunteers and agents from and against any claim, injury, liability, loss, cost, and/or expense or damage, including all costs and attorney's fees in providing a defense to any such claim or other action, and whether sounding in law, contract, tort, or equity, in any manner arising from, or alleged to arise in whole or in part from, or in any way connected with the Services performed by Contractor pursuant to this Agreement- including claims of any kind by Contractor's employees or persons contracting with Contractor to perform any portion of the Scope of Services - and shall expressly include passive or active negligence by City connected with the Services. However, the obligation to indemnify shall not apply if such liability is ultimately adjudicated to have arisen through the sole active negligence or sole willful misconduct of City; the obligation to defend is not similarly limited.

B. Contractor's obligation to protect, defend, indemnify, and hold harmless in full City and City's employees, shall specifically extend to any and all employment-related claims of any type brought by employees, contractors, subcontractors or other agents of Contractor, against City (either alone, or jointly with Contractor), regardless of venue/jurisdiction in which the claim is brought and the manner of relief sought.

C. To the extent Contractor is obligated to provide health insurance coverage to its employees pursuant to the Affordable Care Act ("Act") and/or any other similar federal or state law, Contractor warrants that it is meeting its obligations under the Act and will fully indemnify and hold harmless City for any penalties, fines, adverse rulings, or tax payments associated with Contractor's responsibilities under the Act.

15. INSURANCE REQUIREMENTS
During the term of this Agreement, and for any time period set forth in Exhibit C, Contractor shall provide and maintain in full force and effect, at no cost to City, insurance policies as set forth in Exhibit C.

16. WAIVER
Contractor agrees that waiver by City of any one or more of the conditions of performance under this Agreement shall not be construed as waiver(s) of any other condition of performance under this Agreement. Neither City's review, acceptance nor payments for any of the Services required under this Agreement shall be constructed to operate as a waiver of any rights under this Agreement or of any cause of action arising out of the performance of this Agreement.

Agreement with Eugene Burger Management Corporation
Rev. 07-01-18

17. NOTICES
All notices to the Parties shall, unless otherwise requested in writing, be sent to City addressed as follows:

City of Santa Clara
Attention: City Manager's Office
1500 Warburton Avenue
Santa Clara, CA 95050
and by e-mail at [email protected]
And to Contractor addressed as follows:

Eugene Burger Management Corporation
Attention: Jay Kacirk
6600 Hunter Drive
Rohnert Park, CA 94928
and by e-mail at [email protected]
The workday the e-mail was sent shall control the date notice was deemed given.

An e-mail transmitted after 1 :00 p.m. on a Friday shall be deemed to have been transmitted on the following business day.

18. COMPLIANCE WITH LAWS
Contractor shall comply with all applicable laws and regulations of the federal, state and local government, including but not limited to "The Code of the City of Santa Clara, California" ("SCCC"). In particular, Contractor's attention is called to the regulations regarding Campaign Contributions (SCCC Chapter 2.130), Lobbying (SCCC Chapter 2.155), Minimum Wage (SCCC Chapter 3.20), Business Tax Certificate (SCCC section 3.40.060), and Food and Beverage Service Worker Retention (SCCC Chapter 9.60), as such Chapters or Sections may be amended from time to time or renumbered. Additionally Contractor has read and agrees to comply with City's Ethical Standards (http://santacla raca.gov/home/showdocument?id=58299 ).

19. CONFLICTS OF INTEREST
Contractor certifies that to the best of its knowledge, no City officer, employee or authorized representative has any financial interest in the business of Contractor and that no person associated with Contractor has any interest, direct or indirect, which could conflict with the faithful performance of this Agreement. Contractor is familiar with the provisions of California Government Code section 87100 and Agreement with Eugene Burger Management Corporation
Rev. 07-01-18
Page6
following, and certifies that it does not know of any facts which would violate these code provisions. Contractor will advise City if a conflict arises.

20. FAIR EMPLOYMENT
Contractor shall not discriminate against any employee or applicant for employment because of race, sex, color, religion, religious creed, national origin, ancestry, age, gender, marital status, physical disability, mental disability, medical condition, genetic information, sexual orientation, gender expression, gender identity, military and veteran status, or ethnic background, in violation of federal, state or local law.

21. NO USE OF CITY NAME OR EMBLEM
Contractor shall not use City's name, insignia, or emblem, or distribute any information related to services under this Agreement in any magazine, trade paper, newspaper or other medium without express written consent of City.

22. GOVERNING LAW AND VENUE
This Agreement shall be governed and construed in accordance with the statutes and laws of the State of California. The venue of any suit filed by either Party shall be vested in the state courts of the County of Santa Clara, or if appropriate, in the United States District Court, Northern District of California, San Jose, California.

23. SEVERABILITY CLAUSE
In case any one or more of the provisions in this Agreement shall, for any reason, be held invalid, illegal or unenforceable in any respect, it shall not affect the validity of the other provisions, which shall remain in full force and effect.

24. AMENDMENTS
This Agreement may only be modified by a written amendment duly authorized and executed by the Parties to this Agreement.

25. COUNTERPARTS
This Agreement may be executed in counterparts, each of which shall be deemed to be an original, but both of which shall constitute one and the same instrument.

Agreement with Eugene Burger Management Corporation
Rev. 07-01-18
Page?
The Parties acknowledge and accept the terms and conditions of this Agreement as evidenced by the following signatures of their duly authorized representatives.

Appro

CITY OF SANT A CLARA, CALIFORNIA
a chartered California municipal corporation
'-
Offic ttorney DEANN
City of Santa Clara
"CITY"
City Man r
1500 Warburton Avenue
Santa Clara, CA 95050
Telephone: (408) 615-2210
Fax: (408) 241-6771

EUGENE BURGER MANAGEMENT CORPORATION
a California corporation
Dated: ( t? l ~,t /4 (
By (Signature): ======1-Z==· : :· ====·==L--================= Name: -'::J:....:.8:.,_, ....:..t<=a..:...;~-'-'-'-----'---("_H;_~_N_ [email protected]....;:Gt'---~--- Title: ...:C:xecutlvc:\Ci~ resident
Principal Place of 6600 Hunter Drive
Business Address: Rohnert Park CA 94928
Email Address: [email protected]
Telephone: {707) 584-5123
Fax: {707) 584-5124
"CONTRACTOR"
Agreement with Eugene Burger Management Corporation
Rev. 07-01-18

1. DESCRIPTION OF WORK

EXHIBIT A

SCOPE OF SERVICES

1.1. Under this Agreement, Contractor will provide property management services necessary to rent, lease, operate, and manage two properties owned by the City of Santa Clara ("City").

1.2. The property addresses are as follows:

1.2.1. Commerce Plaza (Current Agreement Expires on April 11, 2022) 900 Lafayette Street
Santa Clara, CA 95050

1.2.2. Peddler's Plaza (Current Agreement Expires on September 30, 2021) 1000 Lafayette Street
Santa Clara, CA 95050

1.3. To the extent not inconsistent with this Agreement between the City and Contractor including this Scope of Services, the City's RFP# 20-21-55 (including subsequent updates) and Contractor's proposal response dated June 8, 2021 are hereby incorporated by reference herein, and shall supplement this Scope of Services and be subject to the terms and conditions of the Agreement.

2. REQUIREMENTS

2.1. Contractor must maintain a valid real estate broker's license for the term of this Agreement and be in good standing with the California Department of Consumer Affairs and the California Department of Real Estate.

2.2. Contractor has reasonable and working knowledge and understanding of the general principles and responsibilities of property management including, but not limited to, the laws concerning real estate licensing, contracts, tenant/landlord responsibilities, fair housing, employment, property protection and insurance.

2.3. Contractor has working knowledge of principles of business administration, accounting, insurance, repairs and maintenance, and public relations.

3. SERVICE REQUIREMENTS

3.1. Contractor will provide property management services necessary to rent, lease, operate and manage two properties owned by the City of Santa Clara ("City"). Services will include, but not limited to, the following services:

Agreement with Eugene Burger Management Corporation/Exhibit A-Scope of Services Page 1 Rev. 07-01-18

3.1.1. Operation, Maintenance, and Repair Services. Contractor will manage, coordinate, and inspect the exterior operation, maintenance, and repair activities at the City's properties identified herein to maintain properties in good repair in accordance with all local codes, and in a condition at all times acceptable to the City. Duties include, but not limited to, the oversight of the existing vendor base, and take actions necessary to ensure vendors are providing services as agreed upon in the vendor's contract with the City for landscape services, cleaning, painting, decorating, plumbing, carpentry, and other maintenance and repair work as may be necessary, subject to any limitations imposed by the City in addition to those contained herein. The following will apply:

3.1.1.1. All maintenance and/or repairs costing in excess of $1,000 requires prior approval of the City, with the exception of emergency repairs involving imminent danger to persons or property. Contractor shall notify City of all relevant facts as soon as possible after the occurrence of the event(s) giving rise to the expenditure.

3.1.1.2. The contracts for the vendors, including but not limited to landscapers, janitors, painters, shall be contracts entered into directly by the City with the vendor. The Contractor is not authorized to executing contracts on behalf of the City and these vendors are not the subcontractors of Contractor.

3.1.1.3. City will provide Contractor with a list of city-approved vendors to be called on for repair and maintenance services. Subject to the approval process requirement in this Agreement,
Contractor is authorized to engage, manage and oversee city­ approved vendors that are providing services to the Property.

3.1.1.4. Contractor will promptly receive and investigate all service requests from tenants, take such action thereon as may be justified, and will keep records of the same. Emergency requests will be received and serviced on a twenty-four (24) hour basis and reported to the City by the next business day.

Contractor shall respond to emergency requests within two (2) hours from receipt of call.

3.1.1.5. Ensure no improvements or modifications are made to the property without City approval.

3.1.1.6. Coordinate legal action against tenants and contractors as needed.

3.1.1. 7. Contractor will review and request City approval for payment Agreement with Eugene Burger Management Corporation/Exhibit A-Scope of Services Rev. 07-01-18
Page2
of vendor's invoices for services in a timely manner.

Contractor, on behalf of the City, will pay invoices which are related to the Property from the City's "Operating" Account.

3.1.1.8. Contractor will be responsible for collection of all costs from lessee(s) for any maintenance and repairs on the properties herein that are the lessee's responsibility pursuant to the lease agreement.

3.1.2. Leasing Services

3.1.2.1. Engage with tenants and coordinate with the City on negotiations and finalization with Lessee(s) for lease
agreements.

3.1.2.2. Ensure compliance with the lease agreement on behalf of the City.

3.1.2.3. Address any tenant concerns related to the physical condition of the property.

3.1.2.4. Maintain accurate records including procedures for enforcing the terms of lease agreements, and annual inspections to ensure compliance with Federal, State, and Local Housing Quality Standards and transmit said records and reports to the City on a monthly basis.

3.1.2.5. Manage and resolve conflicts among tenants. Document and keep all record of communications with tenants on issues, complaints, and resolutions.

3.1.2.6. Collection of Rents and other Receipts. Contractor will collect, when due, all rents, charges and other amounts receivable on the City's account in connection with the management and operation of City owned properties identified herein. Such receipts will be deposited in an Operating Account, separate from all other accounts and funds, with a bank whose deposits are insured by the Federal Deposit
Insurance Corporation. This account will be setup as a Trust Account with the City's name and designated of record as "Eugene Burger Management Corporation Trust Account FBO City of Santa Clara".

3.1.3. Records and Reports. Contractor will have the following responsibilities with respect to records and reports:

3.1.3.1. Annual Management Plan. An annual management plan incorporating an annual budget is to be developed by the Agreement with Eugene Burger Management Corporation/Exhibit A-Scope of Services Rev. 07-01-18
Page3
Contractor for the project each year beginning with the project's next fiscal year, which beings on July 1st each year.

An interim plan, including an interim budget is to be
developed, if necessary, to provide guidance from the
beginning of this contract to the beginning of the next fiscal year. The annual management plan and budget shall set forth the financial, physical and operational goals to be achieved by the project in the succeeding fiscal year as well as any other special goals or interests set forth by the City. The annual budget shall include the estimated costs of management
services, utilities, maintenance services, repair services, janitorial services, landscape services, supplies and materials, misc. taxes and fees, insurance and capital costs, if any. The annual management plan and budget is due to the City for approval on or before March 1st of each operating year as part of the City's annual budget process.

3.1.3.2. Contractor will establish and maintain a comprehensive system of records, books, and accounts in a manner
satisfactory to the City, which shall be kept on an individual property basis.

3.1.3.3. With respect to each fiscal year ending during the term of this Agreement, the Contractor will, upon the specific direction of the City, have an annual financial report prepared by a Certified Public Accountant or other person acceptable to the City. The report will be certified by the preparer and the Contractor and will be submitted to the City within sixty (60) days after the end of the fiscal year, for the City's further certification. Compensation for the preparer's services will be paid out of the Operating Account as an expense of the
Project.

3.1.3.4. Contractor will prepare a monthly report comparing actual and budgeted figures for receipts and disbursements and will submit each such report to the City on or about ten (10) days after the end of the month covered.

3.1.3.5. Contractor will furnish such information (including occupancy reports) as may be requested by the City from time to time with respect to the financial, physical or operational conditions of the City owned properties.

3.1.3.6. On or about the tenth (10th) day of each month, the Contractor will furnish the City with a statement of receipts and
disbursements during the previous month, and with a schedule of accounts receivable and payable, and reconciled bank Agreement with Eugene Burger Management Corporation/Exhibit A-Scope of Services Rev. 07-01-18
Page4
statements for the Operating Account and Security Account (if any) as of the end of the previous month.

3.1.3. 7. On or about the tenth (10th) day of each month, the Contractor will furnish the owner with an itemized list of all delinquent accounts, including rental accounts as of the end of the previous month.

3.1.4. Accounting Services

3.1 .4.1. Fidelity Bond. The Contractor will furnish, at its own expense, an insurance coverage policy for misappropriation in a
principal sum which is at least equal to the gross potential income for two months and is conditioned to protect the City against misappropriation of Project funds by the Contractor and its employees.

3.1.4.2. Annual operating budgets for the City owned properties identified herein will be as approved by the City and
incorporated in the Annual Management Plan.

3.2. Disbursements from Operating Account. Contractor shall pay all items of expense for the operation, maintenance and supervision and management of the properties with the funds in the Operating Account. Operating expenses include but are not limited to management fees, utilities, maintenance services, repair services, janitorial services, landscape services, supplies and materials, misc. taxes and fees, insurance, etc. To ensure sufficient funds are available in the Operating Account, City will deposit in the Operating Account, beginning on or before the Effective Date, at the amount equal to the budgeted or otherwise approved expenses for the two (2) months period. City shall thereafter maintain an amount of at least the budgeted or otherwise approved expenses for the next two rolling months, leaving at all times an average of two extra months of funding in the Operating Account.

3.2.1. As stated in 3.1.3.4, Contractor shall remit the rent collected, less any operating expenses, in the Operating Account to the City on or about the tenth (10th) day of each month following. Contractor shall provide a statement of receipts and disbursements during the previous month, and with a schedule of accounts receivable and payable, and reconciled bank statements for the Operating Account at the time of remittance.

3.3. Other Services

3.3.1. Perform, record, and submit to the City a bi-annual visual inspection.

3.3.2. Provide a detailed monthly management report to the City to include:

Agreement with Eugene Burger Management Corporation/Exhibit A-Scope of Services Rev. 07-01-18

3.3.2.1. Monthly maintenance, preventative maintenance, and tenant requested maintenance.

3.3.2.2. Onsite property visits, inspections, and complaint logs.

3.3.2.3. Lease agreement enforcement issues.

3.3.2.4. Legal matters.

3.3.3. Provide annual operating budget for both properties to the City for review and approval.

Agreement with Eugene Burger Management Corporation/Exhibit A-Scope of Services Rev. 07-01-18
Page6

1. MAXIMUM COMPENSATION

EXHIBIT B

COMPENSATION

1.1. The maximum amount payable for property management services provided under this Agreement and as set forth below shall not exceed Three Hundred Sixty-Six Thousand Seven Hundred Eighty-Four Dollars ($366,784), during the Initial Term of the Agreement. Any additional services requested by the City that would exceed the preceding maximum amount will be addressed in an Amendment to the Agreement. No additional services will be performed unless both Parties execute an Amendment outlining the services requested and the compensation agreed for such services.

2. FEES

2.1. In consideration of the property management services rendered to City by Contractor under this Agreement the City shall pay the following fees:

Management Services Fee
Monthly Rate Initial Term Monthly Rate Initial Term Description Initial Term Year 1 of 2 Initial Term Year 2 of 2 Year1 of2 Year 2 of 2 Commerce Plaza* $8,000 $40,000 $8,150 $97,800
Peddler's Plaza $1,500 $18,000 $1,525 $18,300
Total for Annual Management Services $58,000 $116,100 for Each Property TOT AL FOR ANNUAL MANAGEMENT SERVICES FOR INITIAL TERM $174,100 Other Service Fees i
Description I Initial Term Year 1 of 2 Fees I Initial Term Year 2 of 2 Fees Accountina Services
Commerce Plaza I $700/Month $715/Month
Peddler's Plaza I $300/Month $305/Month
TOTAL FOR ACCOUNTING SERVICES FOR INITIAL $19,340 TERM
Construction Management Fees 10% of Improvement Costs
Leasing Services
Agreement with Eugene Burger Management Corporation/Exhibit 8-Schedule of Fees Page 1 Rev. 07-01-18
For vacant space new tenants:
- 6% of the fixed annual minimum rent payable under the terms of the original lease during the first three (3) years of the lease
- 5% of the fixed annual minimum rent payable during the next two years (2) of the original lease
- 4% of all rent payable thereafter during the sixth and subsequent years of the original lease
For existing tenants:
- Renewal expansion rates for existing tenants will be 50% of the leasing fee for new tenants identified above.

TOT AL ESTIMATE FOR LEASING SERVICES FOR $140,000 INITIAL TERM CONTINGENCY (10%) $33,344
MAXIMUM COMPENSATION NOT-TO-EXCEED FOR $366,784 INITIAL TERM *Property Management Services for Commerce Plaza will not begin until April 2022, the amount noted for the management service fee for this location is for only five months for year 1 of 2.

2.2. Contractor is entitled to the leasing fee specified in the above table when (i) the lease is fully executed with tenant (ii) the first month's rent and security deposit (if applicable) is paid to the City.

3. PRICING AND OPTION RENEWALS

3.1. Pricing is firm fixed for the Initial Term of the Agreement.

3.2. Price Adjustments: Contractor may request adjustments to rates prior to any one-year option to renew the Agreement after the Initial Term. Price increase requests must be tied to CPI, PPI, or relevant industry specific index. Requests for increase must be fully documented by Contractor. Price adjustments are subject to City's approval.

4. INVOICING

4.1. Contractor shall invoice the City on a monthly basis for Services provided by the Contractor during the preceding month on an invoice and in the format approved by the City and is subject to verification and approval by the City.

4.2. City will pay Contractor within thirty (30) days of City's receipt of an approved invoice.

Agreement with Eugene Burger Management Corporation/Exhibit B-Schedule of Fees Page 2 Rev. 07-01-18

EXHIBIT C

INSURANCE REQUIREMENTS
Without limiting the Contractor's indemnification of the City, and prior to commencing any of the Services required under this Agreement, the Contractor shall provide and maintain in full force and effect, at its sole cost and expense, the following insurance policies with at least the indicated coverages, provisions and endorsements:

A COMMERCIAL GENERAL LIABILITY INSURANCE

1. Commercial General Liability Insurance policy which provides coverage at least as broad as Insurance Services Office form CG 00 01. Policy limits are subject to review, but shall in no event be less than, the following:
$2,000,000 Each occurrence
$2,000,000 General aggregate
$2,000,000 Products/Completed Operations aggregate
$2,000,000 Personal Injury

2. Exact structure and layering of the coverage shall be left to the discretion of Contractor; however, any excess or umbrella policies used to meet the required limits shall be at least as broad as the underlying coverage and shall otherwise follow form.

3. The following provisions shall apply to the Commercial Liability policy as well as any umbrella policy maintained by the Contractor to comply with the insurance requirements of this Agreement:
a. Coverage shall be on a "pay on behalf' basis with defense costs payable in addition to policy limits;
b. There shall be no cross liability exclusion which precludes coverage for claims or suits by one insured against another; and c. Coverage shall apply separately to each insured against whom a claim is made or a suit is brought, except with respect to the limits of liability.

B. BUSINESS AUTOMOBILE LIABILITY INSURANCE
Business automobile liability insurance policy which provides coverage at least as broad as ISO form CA 00 01 with policy limits a minimum limit of not less than one million dollars ($1,000,000) each accident using, or providing coverage at least as broad as, Insurance Services Office form CA 00 01. Liability coverage shall apply to all owned, non-owned and hired autos.

Agreement with Eugene Burger Management Corporation/Exhibit C-lnsurance Requirements Page 1 Rev. 07-01-18
C. WORKERS' COMPENSATION

1. Workers' Compensation Insurance Policy as required by statute and employer's liability with limits of at least one million dollars ($1,000,000) policy limit Bodily Injury by disease, one million dollars ($1,000,000) each accidenUBodily Injury and one million dollars ($1,000,000) each employee Bodily Injury by disease.

2. The indemnification and hold harmless obligations of Contractor included in this Agreement shall not be limited in any way by any limitation on the amount or type of damage, compensation or benefit payable by or for Contractor or any subcontractor under any Workers' Compensation Act(s), Disability Benefits Act(s) or other employee benefits act(s).

3. This policy must include a Waiver of Subrogation in favor of the City of Santa Clara, its City Council, commissions, officers, employees, volunteers and agents.

D. COMPLIANCE WITH REQUIREMENTS
All of the following clauses and/or endorsements, or similar provisions, must be part of each commercial general liability policy, and each umbrella or excess policy.

1. 2.

3. Additional Insureds. City of Santa Clara, its City Council, commissions, officers, employees, volunteers and agents are hereby added as additional insureds in respect to liability arising out of Contractor's work for City, using Insurance Services Office (ISO) Endorsement CG 20 1 O 11 85 or the combination of CG 20 10 03 97 and CG 20 37 1 O 01, or its equivalent.

Primary and non-contributing. Each insurance policy provided by Contractor shall contain language or be endorsed to contain wording making it primary insurance as respects to, and not requiring contribution from, any other insurance which the Indemnities may possess, including any self-insurance or self-insured retention they may have. Any other insurance Indemnities may possess shall be considered excess insurance only and shall not be called upon to contribute with Contractor's insurance.

Cancellation.
a. Each insurance policy shall contain language or be endorsed to reflect that no cancellation or modification of the coverage provided due to non-payment of premiums shall be effective until written notice has been given to City at least ten (10) days prior to the effective date of such modification or cancellation. In the event of non-renewal, written notice shall be given at least ten (10) days prior to the effective date of non-renewal.

Agreement with Eugene Burger Management Corporation/Exhibit C-lnsurance Requirements Rev. 07-01-18
Page2
b. Each insurance policy shall contain language or be endorsed to reflect that no cancellation or modification of the coverage provided for any cause save and except non-payment of premiums shall be effective until written notice has been given to City at least thirty (30) days prior to the effective date of such modification or cancellation. In the event of non-renewal, written notice shall be given at least thirty (30) days prior to the effective date of non­ renewal.

4. Other Endorsements. Other endorsements may be required for policies other than the commercial general liability policy if specified in the description of required insurance set forth in Sections A through D of this Exhibit C, above.

E. ADDITIONAL INSURANCE RELATED PROVISIONS
Contractor and City agree as follows:

1. Contractor agrees to ensure that subcontractors, and any other party involved with the Services who is brought onto or involved in the performance of the Services by Contractor, provide the same minimum insurance coverage required of Contractor, except as with respect to limits. Contractor agrees to monitor and review all such coverage and assumes all responsibility for ensuring that such coverage is provided In conformity with the requirements of this Agreement. Contractor agrees that upon request by City, all agreements with, and insurance compliance documents provided by, such subcontractors and others engaged in the project will be submitted to City for review.

2. Contractor agrees to be responsible for ensuring that no contract used by any party involved in any way with the project reserves the right to charge City or Contractor for the cost of additional insurance coverage required by this Agreement. Any such provisions are to be deleted with reference to City. It is not the intent of City to reimburse any third party for the cost of complying with these requirements. There shall be no recourse against City for payment of premiums or other amounts with respect thereto.

3. The City reserves the right to withhold payments from the Contractor in the event of material noncompliance with the insurance requirements set forth in this Agreement.

F. EVIDENCE OF COVERAGE
Prior to commencement of any Services under this Agreement, Contractor, and each and every subcontractor (of every tier) shall, at its sole cost and expense, provide and maintain not less than the minimum insurance coverage with the endorsements and deductibles indicated in this Agreement. Such insurance coverage shall be maintained with insurers, and under forms of policies, Agreement with Eugene Burger Management Corporation/Exhibit C-lnsurance Requirements Rev. 07-01-18

satisfactory to City and as described in this Agreement. Contractor shall file with the City all certificates and endorsements for the required insurance policies for City's approval as to adequacy of the insurance protection.

G. EVIDENCE OF COMPLIANCE
Contractor or its Insurance broker shall provide the required proof of insurance compliance, consisting of Insurance Services Office (ISO) endorsement forms or their equivalent and the ACORD form 25-S certificate of insurance (or its equivalent), evidencing all required coverage shall be delivered to City, or its representative as set forth below, at or prior to execution of this Agreement.

Upon City's request, Contractor shall submit to City copies of the actual Insurance policies or renewals or replacements. Unless otherwise required by the terms of this Agreement, all certificates, endorsements, coverage verifications and other items required to be delivered to City pursuant to this Agreement shall be emailed to:
[email protected]
or mailed to:

EBIX Inc.

City of Santa Clara Electric Department
P.O. Box 100085- S2
Duluth, GA 30096
Telephone number : 951-766-2280
Fax number: 770-325-0409
H. QUALIFYING INSURERS
All of the insurance companies providing insurance for Contractor shall have, and provide written proof of, an A. M. Best rating of at least A minus 6 (A- VI) or shall be an insurance company of equal financial stability that is approved by the City or its insurance compliance representatives .

Agreement with Eugene Burger Management Corporation/Exhibit C-lnsurance Requirements Rev. 07-01-18
Page4

EXHIBIT D

NOTICE OF EXERCISE OF OPTION TO EXTEND AGREEMENT
AGREEMENT TITLE:

CONTRACTOR:

DATE:

Pursuant to Section _ of the Agreement referenced above, the City of Santa Clara hereby exercises its option to extend the term under the following provisions:

I OPTION NO. #of#

NEW OPTION TERM
I Begin date:

End date:
□ CHANGES IN RATE OF COMPENSATION
I Percentage change in CPI upon which adjustment is based:

Pursuant to Section _ of the Agreement the rates of compensation are hereby adjusted as follows:
(use attachment If necessary)
I MAXIMUM COMPENSATION for New Option Term:

For the option term exercised by this Notice, City shall pay Contractor an amount not to exceed the amount set forth above for Contractor's services and reimbursable expenses, if any. The undersigned signing on behalf of the City of Santa Clara hereby certifies that an unexpended appropriation is available for the term exercised by this Notice, and that funds are available as of the date of this signature.

Approved as to Form:

Office of the City Attorney
City of Santa Clara
Dated:

DEANNAJ.SANTANA
City Manager
1500 Warburton Avenue
Santa Clara, CA 95050
Telephone: (408) 615-2210
Fax: (408) 241-6771
Agreement with Eugene Burger Management Corporation/Exhibit D-Notice of Option to Extend Agreement Page 1
Rev. 07-01-18
City of Santa Clara
Agenda Report
1500 Warburton Avenue
Santa Clara, CA 95050
santaclaraca.gov
@SantaClaraCity
23-579 Agenda Date: 5/23/2023

REPORT TO COUNCIL

SUBJECT
Authorize the City Manager to Negotiate and Execute Lease Extensions for 1000 Lafayette Street (Peddler’s Plaza) to May 31, 2024

COUNCIL PILLARS
Promote and Enhance Economic, Housing and Transportation Development Deliver and Enhance High Quality Efficient Services and Infrastructure

BACKGROUND
The City of Santa Clara (“City”) is the landowner of two downtown properties located at 1000 Lafayette Street, known as Peddler’s Plaza, and 900 Lafayette Street, known as Commerce Plaza.

Peddler’s Plaza is approximately a 1.3-acre site with a one-story retail commercial building. Peddler’s Plaza has 10,300 square feet of leasable space with seven (7) units.

On September 28, 2021, the City Council authorized an Agreement with Eugene Burger Management Corporation (EBMC) for property management services and also authorized the City Manager to negotiate and execute leases at 900 and 1000 Lafayette Street (RTC 21-1214). Staff has worked diligently to enter into leases for both properties and have executed 34 leases including four of the seven possible spaces at Peddler’s Plaza (Attachment 1). The leases at Commerce Plaza will expire on May 31, 2024 and the leases for Peddler’s Plaza will expire on September 30, 2023.

These two properties have long been discussed as integral components of a long-term vision for rebuilding downtown. The Precise Plan process for downtown is nearing completion and the EIR is expected to be circulated May 2023. The Precise Plan will be considered by Council in an August/September timeframe. If the Precise Plan is approved, there are a number of significant long- term items that will be required prior to any development of City property. It would be beneficial to the City if there is ongoing occupancy of the structures until that time.

DISCUSSION
In order for their occupancy to continue, the City will need to enter into lease amendments with each of the existing tenants at 1000 Lafayette Street.

Staff is proposing to extend the leases (at the current rent) for 1000 Lafayette Street to May 31, 2024.

Aligning the term of the leases at both 1000 and 900 Lafayette Street properties will simplify any discussion of future lease extensions in coordination with the timing of the Precise Plan adoption and implementation. Depending on Council consideration of the Precise Plan and additional Council actions, it is anticipated that the next steps would generally be as follows:

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23-579 Agenda Date: 5/23/2023
· Council consideration of Precise Plan (August/September) · Council consideration to declare the property as Surplus Land · If declared surplus, a Notice of Availability (NOA) will be issued as required by the Surplus Lands Act.
o If the City receives one or more responses to the NOA within 60 days, the City must engage in good faith negotiations with the responding parties for at least 90 days (90 days is a minimum - good faith negotiations could be much longer) o If there are offers that could be accepted negotiations and agreements would likely take over a year
· If the property is not disposed of through the Surplus Land Act process, then the City can release a Request for Proposals (RFP) for the property for sale/lease o Draft and advertise RFP
o Developer selection
o Developer negotiations
o Contracts for Council consideration
o Above process will require approximately 1.5 - 3 years · After contracts are finalized, the developer can move forward with planning and building permits
Towards the end of this calendar year, staff will review the status of the Precise Plan and next steps and will consider returning to Council for additional authority for both properties to extend leases beyond May 31, 2024.

Property Management
The Agreement with Eugene Burger Management Corporation (EBMC) to provide property management services ends on September 30, 2023. The City Manager has authority to execute three one-year options to extend the term of the Agreement with EBMC after the initial term ending on September 30, 2026 if all options are exercised, subject to the appropriation of funds.

ENVIRONMENTAL REVIEW
The action being considered does not constitute a “project” within the meaning of the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines section 15378(a) as it has no potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment.

FISCAL IMPACT
The estimated monthly revenues are $9,295 per month for Peddler’s Plaza and $126,014 per month for Commerce Plaza. The total estimated revenue over the eight- month extension for Peddler’s Plaza is approximately $74,000. Based on the current agreement, the estimated cost for the lease extension is approximately $15,000.

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23-579 Agenda Date: 5/23/2023
Funding for this contract has been incorporated into the City Manager’s Office operating budget and there are sufficient funds to cover the costs of this extension in the FY 2023/24 and FY 2024/25 Proposed Operating Budget, which will be brought forward for City Council approval on June 27, 2023.

COORDINATION
This report was coordinated with the Finance Department and City Attorney’s Office.

PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, email [email protected] <mailto:[email protected]> or at the
public information desk at any City of Santa Clara public library.

Staff discussed this item with the Downtown Task Force at the April 20 Downtown Task Force Meeting.

RECOMMENDATION
Authorize the City Manager to negotiate and execute amendments to the existing leases for the commercial spaces at 1000 Lafayette to extend the term of each lease to May 31, 2024 in final forms approved by the City Attorney.

Reviewed by: Manuel Pineda, Assistant City Manager/Chief Electric Utility Officer Approved by: Jōvan D. Grogan, City Manager
Attachments:

1. Peddler’s Plaza Lease Suite A

2. Peddler’s Plaza Lease Suite A1

3. Peddler’s Plaza Lease Suite C

4. Peddler’s Plaza Lease Suite D
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INITIALS INITIALS
© 2019 AIR CRE. All Rights Reserved. Last Edited: 12/20/2021 12:34 PM AD-3.01, Revised 10-22-2020 Page1 of 4
When you enter into a discussion with a real estate agent regarding a real estate transacƟ on, you should from the outset understand what type of agency rela Ɵonship or representaƟon you wish to have with the agent in the transac Ɵon.

A Seller's agent under a lis Ɵng agreement with the Seller acts as the agent for the Seller only. A Seller's agent or a subagent of that agent has the following a ffirmaƟve obligaƟons:

To the S el le r : Afiduciary duty of utmost care, integrity, honesty and loyalty in dealings with the Seller .

T o the Buyer and the Seller:
(a) Diligent exercise of reasonable skill and care in performance of the agent's du Ɵes. (b) A duty of honest and fair dealing and good faith.
(c) A duty to disclose all facts known to the agent materially a ffecƟng the value or desirability of the property that are not known to, or within the diligent a ƩenƟon and observaƟon of, the par Ɵes.

An agent is not obligated to reveal to either party any con fidenƟal informaƟon obtained from the other party that does not involve the a ffirmaƟve duƟes set forth above.

A Buyer's agent can, with a Buyer's consent, agree to act as agent for the Buyer only. In these situa Ɵons, the agent is not the Seller's agent, even if by agreement the agent may receive compensaƟon for services rendered, either in full or in part from the Seller. An agent ac Ɵng only for a Buyer has the following a ffirmaƟve obligaƟons:

To the Bu ye r : Afiduciary duty of utmost care, integrity, honesty and loyalty in dealings with the Buyer.

T o the Buyer and the Seller:
(a) Diligent exercise of reasonable skill and care in performance of the agent's du Ɵes. (b) A duty of honest and fair dealing and good faith.
(c) A duty to disclose all facts known to the agent materially a ffecƟng the value or desirability of the property that are not known to, or within the diligent aƩenƟon and observa Ɵon of, the parƟes.

An agent is not obligated to reveal to either party any con fidenƟal informaƟon obtained from the other party that does not involve the a ffirmaƟve duƟes s et forth above.

A real estate agent, either ac Ɵng directly or through one or more salesperson and broker associates, can legally be the agent of both the Seller and the Buyer in a transacƟon, but only with the knowledge and consent of both the Seller and the Buyer .

In a dual agency situa Ɵon, the agent has the following a ffirmaƟve obligaƟons to both the Seller and the Buyer:
(a) A fiduciary duty of utmost care, integrity, honesty and loyalty in the dealings with either the Seller or the Buyer. (b) Other du Ɵes to the Seller and the Buyer as stated above in their respec Ɵve sec Ɵons.

In represenƟng both Seller and Buyer, a dual agent may not, without the express permission of the respec Ɵve party, disclose to the other party con fidenƟal informaƟon, including, but not limited to, facts rela Ɵng to either the Buyer's or Seller's financial posiƟon, moƟ vaƟons, bargaining posiƟon, or other personal informaƟon that may impact price, including the Seller's willingness to accept a price less than the lis Ɵng price or the Buyer's willingness to pay a price greater than the price offered.

Either the purchase agreement or a separate document will contain a con firmaƟon of which agent is represen Ɵng you and whether that agent is represenƟ ng you exclusively in the transacƟon or ac Ɵng as a dual agent. Please pay aƩ enƟon to that con firmaƟon to make sure it accurately refl ects your understanding of your agent’s role. The above du Ɵes of the agent in a real estate transac Ɵon do not relieve a Seller or Buyer from the responsibility to protect his or her own interests. You should carefully read all agreements to assure that they adequately express your understanding of the transac Ɵon. A real estate agent is a person quali fied to advise about real estate. If legal or tax advice is desired, consult a competent professional. If you are a Buyer, you have the duty to exercise reasonable care to pro tect yourself, including as to those facts about the property which are known to you or within your diligent a ƩenƟon and observa Ɵon . Both Sellers and Buyers should strongly

DISCLOSURE REGARDING REAL ESTATEAGENCY RELATIONSHIP
(As required by the Civil Code)

SELLER'S AGENT

BUYER'S AGENT

AGENT REPRESENTING BOTH SELLER AND BUYER

SELLER AND BUYER RESPONSIBILITIES
consider obtaining tax advice from a competent professional because the federal and state tax consequences of a transac Ɵon can be complex and subject to change.

Throughout your real property transac Ɵon you may receive more than one disclosure form, depending upon the number of agents assis Ɵng in the transac Ɵon. The law requires each agent with whom you have more than a casual rela Ɵonship to present you with this disclosure form. You should read its contents each Ɵme it is presented to you, considering the rela Ɵonship between you and the real estate agent in your speci fict r a n s a cƟon. This disclosure form includes the provisions of SecƟons 2079.13 to 2079.24, inclusive, of the Civil Code set forth on page 2. Read it carefully. I/WE ACKNOWLEDGE RECEIPT OF A COPY OF THIS DISCLOSURE AND THE PORTIONS OF THE CIVIL CODE PRINTED ON THE BACK (OR A SEP ARATE P AGE).

Buyer Seller Lessor Lessee Supakam Corp. Date:

Buyer Seller Lessor Lessee City of Santa Clara, California, a chartered municipal corporation. Date:

Agent: Eugene Burger Management Corporation DRE Lic. #: 01183885 Real Estate Broker (Firm)
By: Alex Ayala Sr. DRE Lic. #: 02054907 Date:
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© 2019 AIR CRE. All Rights Reserved. Last Edited: 12/20/2021 12:34 PM AD-3.01, Revised 10-22-2020 Page2 of 4
(Salesperson or Broker-Associate)
THIS FORM HAS BEEN PREPARED BY AIR CRE. NO REPRESENTATION IS MADE AS TO THE LEGAL VALIDITY OR ADEQUACY OF THIS FORM FOR ANY SPECIFIC TRANSACTION. PLEASE SEEK LEGAL COUNSEL AS TO THE APPROPRIATENESS OF THIS FORM. ,7190436Ā-6:25782Ā/,)Ā-$#'$&.%Ȁ'.+(Ȁ$-."Ȁ(*,-Ȁ& .&-%*-!$$" ,7190436Ā-6:25782Ā/,)Ā%,%''-#"Ȁ($!*Ȁ#$# Ȁ'"#$Ȁ-+ .&!, !&# I AIL.c_ A., ... 1....
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INITIALS INITIALS
© 2019 AIR CRE. All Rights Reserved. Last Edited: 12/20/2021 12:34 PM AD-3.01, Revised 10-22-2020 Page3 of 4

DISCLOSURE REGARDINGREAL ESTATEAGENCY RELATIONSHIP
CIVIL CODE SECTIONS 2079.13 THROUGH 2079.24 (2079.16 APPEARS ON THE FRONT) 2079.13.A s u s e di n S e cƟons 2079.7 and 2079.14 to 2079.24, inclusive, the following terms have the following meanings:
(a) “ Agent” means a person acƟng under provisions of Title 9 (commencing with Sec Ɵon 2295) in a real property transac Ɵon, and includes a person who is licensed as a real estate broker under Chapter 3 (commencing with Sec Ɵon 10130) of Part 1 of Division 4 of the Business and Professions Code, and under whose license a lis Ɵng is executed or an o ffer to purchase is obtained. The agent in the real property transac Ɵon bears responsibility for that agent’s salespersons or broker associates who perform as agents of the agent. When a salesperson or broker associate owes a duty to any principal, or to any buyer or seller who is not a principal, in a re al property transacƟon, that duty is equivalent to the duty owed to that party by the broker for whom the salesperson or broker associate func Ɵons. (b) “Buyer” means a transferee in a real property transac Ɵon, and includes a person who executes an o ffer to purchase real property from a seller through an agent, or who seeks the services of an agent in more than a casual, transitory, or preliminary manner, with the object of entering into a real property transac Ɵon. “Buyer” includes vendee or lessee of real property. (c) “Commercial real property” means all real property in the state, except (1) single-family residen Ɵal real property, (2) dwelling units made subject to Chapter 2 (commencing with Sec Ɵon 1940) of Title 5, (3) a mobile home, as de fined in Sec Ɵon 798.3, (4) vacant land, or (5) a recrea Ɵonal vehicle, as defined in Sec Ɵon 799.29. (d) “Dual agent” means an agent ac Ɵng, either directly or through a salesperson or broker associate, as agent for both the seller and the buyer in a real property transac Ɵon. (e) “LisƟng agreement” means a wri Ʃen contract between a seller of real property and an agent, by which the agent has been authorized to sell the real property or to find or obtain a buyer, including rendering other services for which a real estate license is required to the seller pursuant to the terms of the agreement. (f) “Seller's agent” means a person who has obtained a lis Ɵng of real property to act as an agent for compensa Ɵon. (g) “LisƟng price” is the amount expressed in dollars speci fied in the lis Ɵng for which the seller is willing to sell the real property through the seller’s agent. (h) “Offering price” is the amount expressed in dollars speci fied in an o ffer to purchase for which the buyer is willing to buy the real property. (i) “Offer to purchase” means a wri Ʃen contract executed by a buyer ac Ɵng through a buyer’s agent that becomes the contract for the sale of the real property upon acceptance by the seller. (j) “Real property” means any estate speci fied by subdivision (1) or (2) of Sec Ɵon 761 in property, and includes (1) single-family residen Ɵal property, (2) mul Ɵ-unit residen Ɵal property with more than four dwelling units, (3) commercial real property, (4) vacant land, (5) a ground lease coupled with improvements, or (6) a manufactured home as defined in Sec Ɵon 18007 of the Health and Safety Code, or a mobile home as de fined in Sec Ɵon 18008 of the Health and Safety Code, when o ffered for sale or sold through an agent pursuant to the authority contained in Sec Ɵon 10131.6 of the Business and Professions Code. (k) “Real property transacƟon” means a transac Ɵon for the sale of real property in which an agent is retained by a buyer, seller, or both a buyer and seller to act in that transac Ɵon, and includes a lis Ɵng or an o ffer to purchase. (l) “Sell,” “sale,” or “sold” refers to a transac Ɵon for the transfer of real property from the seller to the buyer and includes exchanges of real property between the seller and buyer, transac Ɵons for the crea Ɵon of a real property sales contract within the meaning of Sec Ɵon 2985, and transac Ɵons for the crea Ɵon of a leasehold exceeding one year’s duraƟon. (m) “Seller” means the transferor in a real property transac Ɵon and includes an owner who lists real property with an agent, whether or not a transfer results, or who receives an o ffer to purchase real property of which he or she is the owner from an agent on behalf of another . “Seller” includes both a vendor and a lessor of real property. (n) “Buyer's agent” means an agent who represents a buyer in a real property transac Ɵon. 2079.14. A seller’s agent and buyer’s agent shall provide the seller and buyer in a real property transac Ɵon with a copy of the disclosure form speci fied in Sec Ɵon 2079.16, and shall obtain a signed acknowledgment of receipt from that seller and buyer, except as provided in Sec Ɵon 2079.15, as follows: (a) The seller’ s agent, if any, shall provide the disclosure form to the seller prior to entering into the lis Ɵng agreement. (b) The buyer’s agent shall provide the disclosure form to the buyer as soon as pracƟcable prior to execuƟon of the buyer’s offe r to purchase. If the o ffer to purchase is not prepared by the buyer’s agent, the buyer’s agent shall present the disclosure form to the buyer not later than the next business day a Ōer receiving the o ffer to purchase from the buyer . 2079.15. In any circumstance in which the seller or buyer refuses to sign an acknowledgment of receipt pursuant to Sec Ɵon 2079.14, the agent shall set forth, sign, and date a wriƩen declaraƟon of the facts of the refusal. 2079.16 Reproduced on Page 1 of this AD form.
2079.17(a) As soon as prac Ɵcable, the buyer’s agent shall disclose to the buyer and seller whether the agent is ac Ɵng in the real property transac Ɵon as the buyer’s agent, or as a dual agent represen Ɵng both the buyer and the seller . This rela Ɵonship shall be con firmed in the contract to purchase and sell real property or in a separate wriƟng executed or acknowledged by the seller, the buyer, and the buyer’s agent prior to or coincident with execu Ɵon of that contract by the buyer and the seller, respecƟvely. (b) As soon as prac Ɵcable, the seller’s agent shall disclose to the seller whether the seller’s agent is ac Ɵng in the real property transac Ɵon as the seller’s agent, or as a dual agent represen Ɵng both the buyer and seller. This rela Ɵonship shall be con firmed in the contract to purchase and sell real property or in a separate wriƟng executed or acknowledged by the seller and the seller’s agent prior to or coincident with the execu Ɵon of that contract by the seller . (C) CONFIRMATION: The following agency rela Ɵonships are confirmed for this transacƟon.

Seller's Brokerage Firm DO NOT COMPLETE, SAMPLE ONLY License Number Is the broker of (check one):† the seller; or† both the buyer and seller. (dual agent) Seller's Agent DO NOT COMPLETE, SAMPLE ONLY License Number Is (check one):† the Seller's Agent. (salesperson or broker associate); or† both the Buyer's Agent and the Seller's Agent. (dual agent) Buyer's Brokerage Firm DO NOT COMPLETE, SAMPLE ONLY License Number Is the broker of (check one):† the buyer; or† both the buyer and seller. (dual agent) Buyer's Agent DO NOT COMPLETE, SAMPLE ONLY License Number Is (check one):† the Buyer's Agent. (salesperson or broker associate); or† both the Buyer's Agent and the Seller's Agent. (dual agent) (d) The disclosures and con firmaƟon required by this sec Ɵon shall be in addi Ɵon to the disclosure required by Sec Ɵon 2079.14. An agent’s duty to provide disclosure and confirmaƟon of representaƟon in this sec Ɵon may be performed by a real estate salesperson or broker associate a ffiliated with that broker . 2079.18 (Repealed pursuant to AB-1289, 2017-18 California Legisla Ɵve session) 2079.19 The payment of compensa Ɵon or the obliga Ɵon to pay compensa Ɵon to an agent by the seller or buyer is not necessarily determina Ɵve of a parƟcular agency relaƟonship between an agent and the seller or buyer . A lis Ɵng agent and a selling agent may agree to share any compensa Ɵon or commission paid, or any right to any compensaƟon or commission for which an obliga Ɵon arises as the result of a real estate transac Ɵon, and the terms of any such agreement shall not necessarily be determinaƟve of a parƟcular relaƟonship.
2079.20 Nothing in this ar Ɵcle prevents an agent from selec Ɵng, as a condiƟon of the agent’s employment, a specificf o r m o fa g e n c y r e l aƟonship not speci fically ,7190436Ā-6:25782Ā/,)Ā-$#'$&.%Ȁ'.+(Ȁ$-."Ȁ(*,-Ȁ& .&-%*-!$$" ,7190436Ā-6:25782Ā/,)Ā%,%''-#"Ȁ($!*Ȁ#$# Ȁ'"#$Ȁ-+ .&!, !&#

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prohibited by this arƟcle if the requirements of Sec Ɵon 2079.14 and Sec Ɵon 2079.17 are complied with. 2079.21 (a) A dual agent may not, without the express permission of the seller , disclose to the buyer any con fidenƟal informaƟon obtained from the seller. (b) Ad u a l agent may not, without the express permission of the buyer , disclose to the seller any con fidenƟal informaƟon obtained from the buyer. (c) “ConfidenƟal informaƟon” means facts relaƟng to the client’sfinancial posi Ɵon, moƟvaƟons, bargaining posi Ɵon, or other personal informa Ɵon that may impact price, such as the seller is willing to accept a price less than the lis Ɵng price or the buyer is willing to pay a price greater than the price o ffered. (d) This secƟon does not alter in any way the duty or responsibility of a dual agent to any principal with respect to con fidenƟal informaƟon other than price. 2079.22 Nothing in this ar Ɵcle precludes a seller’s agent from also being a buyer’s agent. If a seller or buyer in a transac Ɵon chooses to not be represented by an agent, that does not, of itself, make that agent a dual agent. 2079.23 (a) A contract between the principal and agent may be modi fied or altered to change the agency rela Ɵonship at any Ɵme before the performance of the act which is the object of the agency with the wri Ʃen consent of the par Ɵes to the agency rela Ɵonship. (b) Al e n d e ro r a na u cƟon company retained by a lender to control aspects of a transac Ɵon of real property subject to this part, including valida Ɵng the sales price, shall not require, as a condi Ɵon of receiving the lender’s approval of the transacƟon, the homeowner or lis Ɵng agent to defend or indemnify the lender or auc Ɵon company from any liability alleged to result from the ac Ɵon s of the lender or auc Ɵon company. Any clause, provision, covenant, or agreement purpor Ɵng to impose an obliga Ɵon to defend or indemnify a lender or an auc Ɵon company in violaƟon of this subdivision is against public policy, void, and unenforceable. 2079.24 Nothing in this ar Ɵcle shall be construed to either diminish the duty of disclosure owed buyers and sellers by agents and their associate licensees, subagents, and employees or to relieve agents and their associate licensees, subagents, and employees from liability for their conduct in connec Ɵon with acts governed by this arƟcle or for any breach of a fiduciary duty or a duty of disclosure.

AIR CRE * h Ʃps://www.aircre.com * 213-687-8777 * [email protected] NOTICE: No part of these works may be reproduced in any form without permission in wri Ɵng. ,7190436Ā-6:25782Ā/,)Ā-$#'$&.%Ȁ'.+(Ȁ$-."Ȁ(*,-Ȁ& .&-%*-!$$" ,7190436Ā-6:25782Ā/,)Ā%,%''-#"Ȁ($!*Ȁ#$# Ȁ'"#$Ȁ-+ .&!, !&#

Lease Agreement/ Supakam Corp. Page 1 of 33
Rev.: 02-01-15
OAK #4822-6577-3562 v9

COMMERCIAL PROPERTY LEASE AGREEMENT

BY AND BETWEEN

CITY OF SANTA CLARA, CALIFORNIA
AND
Supakam Corp.

This lease agreement (“Lease”) is dated December 20, 2021 and is by and between the City of Santa Clara, California, a chartered California municipal corporation (“City”) and Supakam Corp. (“Lessee”). City and Lessee may be referred to individually as a “Party” or collectively as the “Parties” or the “Parties to this Lease.” The City Manager serves as Contract Administrator for this Lease on behalf of the City Council.

RECITALS:

A. Lessee previously leased the Premises (as defined below) pursuant to one or more prior leases, including without limitation Supakam Corp. the Net Shopping Center Lease, with Lucia Lim (“Prior Landlord”), dated November 14, 2019 which expired on September 30, 2021 (collectively, “Prior Lease”). The Prior Lease was in turn a sublease under a ground lease between the Prior Landlord as lessee and the City as lessor for the land underlying the Project (as defined below), which also expired on September 30, 2021 (“Ground Lease”).

B. Effective of the termination of the Prior Lease, the City became the sole owner of the Project, free and clear of the Prior Lease. Nevertheless, the Parties have agreed to enter into a new lease on the terms herein.

NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, stipulated and agreed, Lessee and City mutually agree as follows:

AGREEMENTS:

LEASE PROVISIONS

1. PREMISES; BUILDING AND PROJECT.

1.1 General. City hereby leases to Lessee, and Lessee hires from City, certain real property located in the City of Santa Clara, County of Santa Clara, State of California, commonly known as Suite A consisting of approximately 2054 square feet (the “Premises”) in that certain approximately 8301 square foot building at 1000 Lafayette Street, Santa Clara, California, 95050 (the “Building”), located on an approximately 1.33 acre parcel (collectively, including the Building, the “Project”), all as more particularly described or identified in Exhibit A attached hereto and incorporated herein by reference. The Project excludes, and Lessee is the sole owner of, the items identified on the Inventory of Fixtures set forth in Exhibit B attached hereto and incorporated herein by reference. ,7190436Ā-6:25782Ā/,)Ā-$#'$&.%Ȁ'.+(Ȁ$-."Ȁ(*,-Ȁ& .&-%*-!$$",7190436Ā-6:25782Ā/,)Ā%,%''-#"Ȁ($!*Ȁ#$# Ȁ'"#$Ȁ-+ .&!, !&# -
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Lease Agreement/ Supakam Corp. Page 2 of 33
Rev.: 02-01-15
OAK #4822-6577-3562 v9

1.2 Pro Rata Share. Lessee’s pro rata share (“Pro Rata Share”) is percent 24.74% which represents the percentage that the rentable area of the Premises bears to the total rentable area of the building.

2. TERM; COMMENCEMENT DATE.

The term of this Lease shall be for Two (2) years commencing at 12:01 am on October 1, 2021 (“Commencement Date”) and ending on September 30, 2023_. Lessee shall, at the expiration of the term of this lease, or upon its earlier termination, surrender the Premises in as good condition as it is now at the date of this lease, reasonable wear and tear excepted. City shall have the right, upon the termination of the term or upon a breach, to enter the Premises and take possession of it.

3. RENT.

3.1 Base Rent. Lessee shall pay base rent (“Base Rent”) in the amount of $3,595.00 per month. All rent, including Base Rent, shall be paid in lawful money of the United States of America without deduction or offset. Base Rent shall be payable on the first day of each and every month commencing on the Commencement Date, at a place (or places) as may be designated in writing from time to time by City.

3.2 Late Charge. Lessee acknowledges late payment by Lessee to City of rent will cause City to incur costs not contemplated by this Lease, the exact amount of such costs being extremely difficult and impracticable to fix. Such costs include, without limitation, processing, accounting and late charges that may be imposed on City.

Therefore, if City does not receive any installment of rent due from Lessee within ten (10) days after the date such rent is due, Lessee shall pay to City an additional sum of ten percent (10%) of the overdue rent as a late charge. The parties agree this late charge represents a fair and reasonable estimate of the costs City will incur by reason of late payment by Lessee. Acceptance of any late charge shall not constitute a waiver of Lessee’s default with respect to the overdue amount, nor prevent City from exercising any of the other rights and remedies available to City.

3.3 Rent. The term “Rent” as used in this Lease shall mean Base Rent and any other amounts owing from Lessee to the City pursuant to this Lease.

,7190436Ā-6:25782Ā/,)Ā-$#'$&.%Ȁ'.+(Ȁ$-."Ȁ(*,-Ȁ& .&-%*-!$$",7190436Ā-6:25782Ā/,)Ā%,%''-#"Ȁ($!*Ȁ#$# Ȁ'"#$Ȁ-+ .&!, !&# 1111
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4. SECURITY DEPOSIT.

Lessee has tendered to City an amount of Three Thousand Five Hundred Ninety-Five Dollars $3,595.00 as a security deposit. City may use these funds as are reasonably necessary to remedy any Lessee breach(s) or default(s) under this Lease, including without limitation in the payment of rent, to repair damages caused by Lessee, or expenses incurred to clean the Premises upon termination of tenancy. If any portion of the security deposit is used towards rent or damages at City’s sole discretion, Lessee agrees to reinstate said total security deposit upon receipt of five (5) days written notice.

Any remaining balance of the security deposit shall be returned by City to Lessee at such time after termination of this Lease that all of Lessee’s obligations under this Lease have been fulfilled, reduced by such amounts as may be required by City to remedy defaults on the part of Lessee in the payment of Rent or other obligations of Lessee under this Lease, to repair damage to the Premises, Building, or Project caused by Lessee and to clean the Premises. City may use and co-mingle the security deposit with other funds of City.

Lessee hereby waives the provisions of the California Civil Code section 1950.7, and all other provisions of any laws, now or hereinafter in force, which restricts the amount or types of claim that a landlord may make upon a security deposit or imposes upon a landlord (or its successors) any obligation with respect to the handling or return of security deposits.

5. DUTIES OF LESSEE.

5.1 Lessee shall not use the image of the Premises or Project, the name of City or any other identifying sign or symbol associated with the Premises or Project or City to undertake any action or representation than those specifically assigned to Lessee as a duty under this Lease.

5.2 Lessee shall protect and maintain the Premises. Lessee shall assume the responsibility for the guarding and safekeeping of all personal property located at the Premises.

5.3 Lessee shall not make any interior renovation or remodeling or make any major changes to the Premises or remove any objects, which are not the property of Lessee without the prior written consent of the City Manager or her designee.

6. USE OF PREMISES/COMMON AREAS.

6.1 Permitted Uses. Lessee shall use the Premises solely as and for no other purpose. Without limiting the foregoing, Lessee agrees not to use or permit use of the Premises for any unlawful purpose, and not to commit or permit any waste or nuisance in or about the Premises. Lessee will not use Premises in a manner that increases the risk of fire, cost of fire insurance or improvements thereon. No unreasonable sign or placard shall be painted, inscribed or placed in or on or about the Premises or Project; and no tree or shrub thereon (if any) shall be destroyed or removed or other waste committed of said Premises or Project. No bicycles, ,7190436Ā-6:25782Ā/,)Ā-$#'$&.%Ȁ'.+(Ȁ$-."Ȁ(*,-Ȁ& .&-%*-!$$",7190436Ā-6:25782Ā/,)Ā%,%''-#"Ȁ($!*Ȁ#$# Ȁ'"#$Ȁ-+ .&!, !&# - -

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motorcycles, automobiles or other mechanical means of transportation shall be placed anywhere on the Premises or Project except for areas (if any) identified by the City from time to time. No repair, storage, overhaul or modification of any motor vehicle shall take place on or about the Premises or Project. Lessee, at his/her expense, shall keep the Premises in as good condition as it was at the beginning of the term hereof, reasonable wear and tear excepted.

6.2 Prohibited Uses. Lessee shall not use Premises for any purpose not expressly permitted hereunder. Lessee shall not (i) create, cause, maintain or permit any nuisance or waste in, on or about the Premises or permit or allow the Premises to be used for any unlawful or immoral purpose, and (ii) do or permit to be done anything in any manner which unreasonably disturbs the users of the Project or the occupants of neighboring property. Specifically, and without limiting the above, Lessee agrees not to cause any unreasonable odors, noise, vibration, power emissions or other item to emanate from the Premises. No materials or articles of any nature shall be stored outside upon any portion of the Premises.

6.3 Condition, Use of Premises. City makes no warranty or representation of any kind concerning the condition of the Premises, or the fitness of the Premises for the use intended by Lessee, and hereby disclaims any personal knowledge with respect thereto, it being expressly understood by the parties that Lessee has previously occupied the Premises, personally inspected the Premises, knows its condition, finds it fit for Lessee’s intended use, accepts it as is and has ascertained that it can be used for the limited purposes specified in Section 6.1.

6.4 Use of Adjacent Parking Lot. Lessee and its customers shall have the right to use Two (2) unreserved, unassigned parking spaces located in the City parking lot as shown on Exhibit A on a first come basis. A portion of the parking lot containing spaces equal to the total number of unreserved parking spaces made available to all of the tenants/lessees of the Building is part of the Project’s “Common Areas” (defined in Section 6.6 below).

6.5 Overloading. Lessee shall not do anything on the Premises that will cause damage to the Premises, the Building, or the Project. Lessee shall not suffer or allow the Premises to be used in any manner that will harm or impair the structural strength of the Building nor to suffer or allow to be installed or operated on the Premises, or the Building, any machinery or apparatus whose weight or vibration would harm or impair the structural strength of the Premises or the Building. Lessee shall not place a load upon the floor or roof of the Premises without the City’s prior written consent, which consent may be conditioned on moving by skilled licensed handlers, or which exceeds the load per square foot which such floor or roof was designed to carry. Business machines and mechanical equipment used by Lessee which cause vibration or noise that may be transmitted to the Building structure or to any leased space to such a degree as to be reasonably objectionable to the City or to any other tenants in the Building shall be placed and maintained by Lessee at its ,7190436Ā-6:25782Ā/,)Ā-$#'$&.%Ȁ'.+(Ȁ$-."Ȁ(*,-Ȁ& .&-%*-!$$",7190436Ā-6:25782Ā/,)Ā%,%''-#"Ȁ($!*Ȁ#$# Ȁ'"#$Ȁ-+ .&!, !&#

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expense, in settings of cork, rubber, or spring-type vibration eliminators sufficient to eliminate such vibration or noise.

6.6 Common Areas.

6.6.1 The term “Common Areas” shall mean and refer to all areas within the exterior boundaries of the Project which are now or hereafter made available for general use, convenience, and benefit of the City and other persons entitled to occupy space in the Project, including, without limiting the generality of the foregoing, roofs, exterior walls, structural parts of the Building and structural floor, pipes and conduits, outside lighting fixtures (if any), automobile parking areas (if any), driveways, sidewalks, landscaped and planted areas, and HVAC and plumbing systems and similar common areas, facilities, and systems. Lessee and its employees and invitees are, except as otherwise specifically provided in this Lease, authorized, empowered, and privileged to use the Common Areas in common with other persons during the Term of this Lease. City agrees to maintain and operate, or cause to be maintained and operated (except as hereinafter provided with reference to cost of maintenance), the Common Areas at all times for the benefit and use of the customers and patrons of Lessee, and of other lessees, owners, and occupants of the Project.

6.6.2 City shall keep or cause the Common Areas to be kept in a neat, clean, and orderly condition, and shall repair any damage to the facilities thereof, but all Common Area Expenses shall be charged and prorated in the manner hereinafter set forth. “Common Area Expenses” shall include, but not be limited to, all sums expended in connection with the Common Areas for all general maintenance and repairs, resurfacing, painting, restriping, cleaning, sweeping and janitorial services; maintenance and repair of sidewalks, curbs, and Project signs; sprinkler systems, planting and landscaping (if any); lighting and other utilities; directional signs; maintenance and repair of any fire protection systems, lighting systems, storm drainage systems and other utility systems outside of the Premises; all maintenance and repair costs and expenses, except as to cost of replacement of the roof, exterior walls, structural parts of the Premises and structural floor, and pipes and conduits outside the leased Premises in the Project that furnish the leased Premises with various utilities (except to the extent that the same are the obligations of the appropriate utility company or are otherwise Lessee’s obligation pursuant to Section 7.1 or other provision of this Lease), incurred by the City pursuant to Section 7.2; personnel to implement such services; real and personal property taxes and assessments on the improvements and land comprising the Project; any governmental imposition or surcharge imposed upon the City or assessed against any portion of the Common Areas; all costs and expense pertaining to any security alarm system for the lessees in the Project (if any); depreciation on maintenance and operating machinery and equipment (if owned) and rental paid for such machinery and equipment (if rented); and adequate public liability and property damage insurance on the Common Areas.

In addition, the Common Area Expenses shall include a management fee of ten ,7190436Ā-6:25782Ā/,)Ā-$#'$&.%Ȁ'.+(Ȁ$-."Ȁ(*,-Ȁ& .&-%*-!$$",7190436Ā-6:25782Ā/,)Ā%,%''-#"Ȁ($!*Ȁ#$# Ȁ'"#$Ȁ-+ .&!, !&#

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percent (10%) of the total of all other Common Area Expenses, adjusted from time to time as provided herein. The City may cause any or all of those services to be provided by an independent contractor or contractors.

6.6.3 The Common Area Expenses shall be prorated in the following manner:

(i) From and after the Commencement Date, and throughout the term hereof, Lessee shall pay to the City, on the first day of each calendar month, an amount estimated by the City to be Lessee’s share of the Common Area Expenses. The foregoing estimated monthly charge may be adjusted by the City at the end of any calendar quarter on the basis of the City’s experience and reasonably anticipated costs.

(ii) At the City’s sole election, each calendar year, the City shall furnish Lessee a statement covering the calendar quarter or year just expired, certified as correct by an authorized representative of the City, showing the total of the Common Area Expenses, the amount of Lessee’s share of the Common Area Expenses for such calendar quarter or year, and the payments made by Lessee with respect to such period as set forth in (i) above. If Lessee’s share of the Common Area Expenses exceeds Lessee’s payments so made, Lessee shall pay the City the deficiency within 10 days after receipt of such statement. If Lessee’s payments exceed Lessee’s share of the Common Area Expenses, Lessee shall be entitled to offset the excess against payments next thereafter to become due to the City as set forth in (i) above. Lessee’s share of the Common Area Expenses for the previous calendar quarter or year shall be that portion of all such expenses which is equal to the proportion thereof which the number of square feet of floor area in the Premises bears to the total number of square feet of floor area of the Building.

6.6.4 Failure of Lessee to pay any of the charges as in this Section 6.6 required to be paid shall constitute a default under the terms hereof in like manner as failure to pay Base Rent when due.

6.6.5 The City shall at all times have the right and privilege of determining the nature and extent of the Common Areas, and of making such changes therein and thereto from time to time which in its sole discretion it deems to be desirable and in the best interest of all persons using the Common Areas, including without limitation the location and relocation of driveways, entrances, exits, automobile parking spaces (if any), installation of prohibited areas, landscaped areas, utilities, and all other facilities thereof.

6.6.6 Nothing contained herein shall be deemed to create any liability upon the City for any damage to motor vehicles of customers or employees or for loss of property from within such motor vehicles.

,7190436Ā-6:25782Ā/,)Ā-$#'$&.%Ȁ'.+(Ȁ$-."Ȁ(*,-Ȁ& .&-%*-!$$",7190436Ā-6:25782Ā/,)Ā%,%''-#"Ȁ($!*Ȁ#$# Ȁ'"#$Ȁ-+ .&!, !&#

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6.6.7 The City shall have the right to establish, and from time to time change, alter, and amend, and to enforce against Lessee and the other users of the Common Areas such reasonable rules and regulations (including the exclusion of employees’ parking therefrom) as the City in its sole discretion may deem necessary or advisable for the proper and efficient operation and maintenance of the Common Areas. The rules and regulations herein provided may include, without limitation, the hours during which the Common Areas shall be open for use.

6.6.8 City shall retain the sole and absolute discretion in the modification of the Common Areas, which may include the rearrangement, increase or decrease of the areas, and the manner in which the areas are utilized. City shall also have the right at any time and from time to time during the term hereof to exclude and restrain any person from use or occupancy thereof, excepting, however, bona fide customers, patrons, and service suppliers of Lessee, and other tenants of the City who make use of the Common Areas fully in accordance with the rules and regulations established by the City from time to time with respect thereto. The rights of Lessee hereunder in and to the Common Areas shall at all times be subject to the rights of the City, the other tenants of the Project to use the same in common with Lessee, and it shall be the duty of Lessee to keep all of the Common Areas free and clear of any obstructions created or permitted by Lessee or resulting from Lessee’s operation and permit the use of the Common Areas only for normal parking, ingress and egress by said customers, patrons, and service suppliers to and from the Building. Nothing herein shall prevent the City from allowing non-users of the Building or Project to use the parking lot for City- designated events, as long as Lessee and its customers’ rights to use the number of spaces identified in Section 6.4 during Lessee’s regular business hours is not unreasonably restricted.

6.6.9 If in the sole discretion of the City unauthorized persons are using any of the Common Areas by reason of the presence of Lessee in the Premises, Lessee, upon demand of the City, shall enforce such rights against all such unauthorized persons by appropriate proceedings. Nothing herein shall affect the rights of the City at any time to remove any such unauthorized persons from said areas or to restrain the use of any of said areas by unauthorized persons.

______________ __________ Lessee Initials Lessee Initials

7. MAINTENANCE AND REPAIRS.

7.1 Lessee’s Obligations. Lessee agrees at all times during the term hereof, at its own expense, to repair, replace and maintain in good and tenantable condition the Premises and every part thereof (except that portion of the Premises to be maintained by the City as hereinafter provided) and including, without limitation, the utility meters, pipes and conduits, all fixtures, air conditioning equipment and ,7190436Ā-6:25782Ā/,)Ā-$#'$&.%Ȁ'.+(Ȁ$-."Ȁ(*,-Ȁ& .&-%*-!$$" ,7190436Ā-6:25782Ā/,)Ā%,%''-#"Ȁ($!*Ȁ#$# Ȁ'"#$Ȁ-+ .&!, !&#

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heating equipment, if any, exclusively serving the Premises and other equipment therein, including any equipment installed by Lessee which is part of said system, the storefront or storefronts, all signs, locks and closing devices, and all window sash, casement or frames, door and door frames, floor coverings, including carpeting, terrazzo or other special flooring, and all such items of repair, maintenance, allocation and improvement or reconstruction as may at any time or from time to time be required by a governmental agency having jurisdiction thereof.

Lessee shall contract with a qualified service company for the monthly maintenance of the air conditioning equipment or heating, ventilating and air conditioning equipment, as the case may be, exclusively serving the Premises, with a copy of the service contract to be furnished to the City upon execution of this Lease and a copy of any subsequent contracts to be furnished from time to time during the term of this Lease provided that, at the City’s sole election, the City may so contract directly with a qualified service company, and Lessee shall promptly reimburse the City for the full cost of same. Maintenance of all glass, both exterior and interior, is the sole responsibility of Lessee, and any glass broken shall be promptly replaced by Lessee with glass of the same kind, size and quality. Upon surrender of the Premises, Lessee shall deliver the Premises to the City in good order, condition and state of repair, but shall not be responsible for damages resulting from ordinary wear and tear.

7.2 City Obligations. Subject to the foregoing provisions and to the reimbursement by Lessee described in Section 6.6, the City shall keep and maintain in good and tenantable condition and repair the roof, exterior walls, structural parts of the Premises and structural floor, and pipes and conduits outside the Premises that furnish the Premises with various utilities (except to the extent that the same are the obligations of the appropriate utility company or are otherwise Lessee’s obligation pursuant to Section 7.1 or other provision of this Lease); provided, however, that the City shall not be required to make repairs necessitated by reason of the negligence of Lessee or anyone claiming under Lessee, by reason of failure of Lessee to perform or observe any conditions or agreements of this Lease, or by reason of alterations, additions, or improvements made by Lessee or anyone claiming under Lessee. As used in this Section, “exterior walls” shall not include storefronts, plate glass, window cases or window frames, doors or door frames, security grilles or similar enclosures. It is understood and agreed that the City shall be under no obligation to make any repairs, alterations, renewals, replacements or improvements to and upon the Premises or the mechanical equipment exclusively serving the Premises at any time except as this Lease expressly provides. Anything to the contrary contained in this Lease notwithstanding, the City shall not in any way be liable to Lessee for failure to make repairs as herein specifically required of it unless Lessee has previously notified the City, in writing, of the need for such repairs and the City has failed to commence and complete said repairs within a reasonable period of time following receipt of Lessee’s written notification.

7.3 Lessee’s Failure to Maintain. If Lessee refuses or neglects to make repairs or maintain the Premises, or any part thereof, in a manner reasonably satisfactory to ,7190436Ā-6:25782Ā/,)Ā-$#'$&.%Ȁ'.+(Ȁ$-."Ȁ(*,-Ȁ& .&-%*-!$$",7190436Ā-6:25782Ā/,)Ā%,%''-#"Ȁ($!*Ȁ#$# Ȁ'"#$Ȁ-+ .&!, !&#

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the City, the City shall have the right, upon giving Lessee reasonable written notice of its election to do so, to make such repairs or perform such maintenance on behalf of and for the account of Lessee. In such event the cost of such work shall be paid by Lessee as additional rent promptly upon receipt of an invoice therefor. In addition, the City shall include a management fee on the work that was completed by the City on behalf of the Lessee, in the amount of fifteen percent (15%) that may be adjusted from time to time as provided herein.

7.4 Waiver of Legal Rights. Lessee waives the benefits of any law existing now or at any time during the term of this Lease and any extension thereof or thereafter giving Lessee rights or remedies as a result of the physical condition of the Premises, the Building, or Project and, without limitation, Sections 1932, 1933, 1941, 1941.2, 1942 and 1942.1 of the Civil Code of California and all right to make repairs at the expense of the City or to terminate this Lease as provided in those Civil Code sections or otherwise, except as expressly provided herein.

8. HAZARDOUS MATERIALS.

8.1 Compliance with Laws. Lessee shall not cause or permit any Hazardous Material (as defined below) to be brought upon, kept or used in or about the Premises or Project by Lessee, its agents, employees, contractors or invitees.

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

8.3 Assignment and Subletting. If (i) any anticipated use of the Premises by any proposed assignee or sublessee involves the generation or storage, use, treatment or disposal or release of Hazardous Material in a manner or for any purpose, (ii) the proposed assignee or sublessees has been required by any prior landlord, lender or governmental authority to take remedial action in connection with Hazardous Material contaminating a property, if the contamination resulted from such party’s action or use of the property in question, or (iii) the proposed assignee or sublessee is subject to an enforcement order issued by any governmental authority in connection with the release, use, disposal or storage of a Hazardous Material, then it shall not be unreasonable for City to withhold its consent to an assignment or subletting to such proposed assignee or sublessee.

,7190436Ā-6:25782Ā/,)Ā-$#'$&.%Ȁ'.+(Ȁ$-."Ȁ(*,-Ȁ& .&-%*-!$$",7190436Ā-6:25782Ā/,)Ā%,%''-#"Ȁ($!*Ȁ#$# Ȁ'"#$Ȁ-+ .&!, !&#

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8.4 Hazardous Materials Defined. The term “Hazardous Material(s)” shall mean any toxic or hazardous substance, material or waste or any pollutant or contaminant or infectious or radioactive material, including but not limited to, those substances, materials or wastes regulated now or in the future under any of the following statutes or regulations and any and all of those substances included within the definitions of “hazardous substances,” “hazardous waste,” “hazardous chemical substance or mixture,” “imminently hazardous chemical substance or mixture,” “ toxic substances,” “hazardous air pollutant,” “toxic pollutant” or “solid waste” in the (a) “CERCLA” or “Superfund” as amended by SARA, 42 U.S.C. Sec. 9601 et seq., (b) RCRA, 42 U.S.C. Sec. 6901 et seq., (c) CWA., 33 U.S.C. Sec. 1251 et seq., (d) CAA, 42 U.S.C. 78401 et seq., (e) TSCA, 15 U.S.C. Sec. 2601 et seq., (f) The Refuse Act of 1899, 33 U.S.C. Sec. 407, (g) OSHA, 29 U.S.C. 651 et seq. (h) Hazardous Materials Transportation Act, 49 U.S.C. Sec. 1801 et seq., (i) USDOT Table (40 CFR Part 302 and amendments) or the EPA Table (40 CFR Part 302 and amendments), (j) California Superfund, Cal. Health & Safety Code Sec. 25300 et seq., (k) Cal. Hazardous Waste Control Act, Cal. Health & Safety Code Section 25100 et seq., (l) Porter-Cologne Act, Cal. Water Code Sec. 13000 et seq., (m) Hazardous Waste Disposal Land Use Law, Cal. Health & Safety Code Sec. 25220 et seq., (n) “Proposition 65,” Cal. Health and Safety Code Sec. 25249.5 et seq., (o) Hazardous Substances Underground Storage Tank Law, Cal. Health & Safety Code Sec. 25280 et seq., (p) California Hazardous Substance Act, Cal. Health & Safety Code Sec. 28740 et seq., (q) Air Resources Law, Cal. Health & Safety Code Sec. 39000 et seq., (r) Hazardous Materials Release Response Plans and Inventory, Cal.

Health & Safety Code Secs. 25500-25541, (s) TCPA, Cal. Health and Safety Code Secs. 25208 et seq., and (t) regulations promulgated pursuant to said laws or any replacement thereof, or as similar terms are defined in the federal, state and local laws, statutes, regulations, orders or rules. Hazardous Materials shall also mean any and all other substances, materials and wastes which are, or in the future become regulated under applicable local, state or federal law for the protection of health or the environment, or which are classified as hazardous or toxic substances, materials or wastes, pollutants or contaminants, as defined, listed or regulated by any federal, state or local law, regulation or order or by common law decision, including, without limitation, (i) trichloroethylene, tetracholoethylene, perchloroethylene and other chlorinated solvents, (ii) any petroleum products or fractions thereof, (iii) asbestos, (iv) polychlorinated biphenyls, (v) flammable explosives, (vi) urea formaldehyde, and (vii) radioactive materials and waste.

8.5 City’s Right to Perform Tests. At any time prior to the expiration of the Lease Term, City shall have the right to enter upon the Premises in order to conduct tests of water and soil and to deliver to Lessee the results of such tests to demonstrate that levels of any Hazardous Materials in excess of permissible levels has occurred as a result of Lessee’s use of the Premises. Lessee shall be solely responsible for and shall indemnify, protect, defend and hold City harmless from and against all claims, costs and liabilities including actual attorneys’ fees and costs arising out of or in connection with any removal, remediation, cleanup, restoration and materials required hereunder to return the Premises and any other property of whatever nature ,7190436Ā-6:25782Ā/,)Ā-$#'$&.%Ȁ'.+(Ȁ$-."Ȁ(*,-Ȁ& .&-%*-!$$",7190436Ā-6:25782Ā/,)Ā%,%''-#"Ȁ($!*Ȁ#$# Ȁ'"#$Ȁ-+ .&!, !&#

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to their condition existing prior to the appearance of the Hazardous Materials. The testing shall be at Lessee’s expense if City has a reasonable basis for suspecting and confirms the presence of Hazardous Materials in the soil or surface or groundwater in on, under, or about the Premises or the Project, which has been caused by or resulted from the activities of Lessee, its agents, employees, contractors or invitees.

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

9. UTILITIES.

Lessee shall pay prior to delinquency, and shall indemnify and hold the City harmless from, all costs incurred in installation, hook-up, delivery, and repair of all utilities and services whatsoever supplied to or consumed by Lessee on the Premises including, but not limited, to gas, water, sewer, electricity, telecommunications service, janitorial, garbage pickup and disposal, on-Premises landscaping installation and maintenance (if any) and other public utilities. City shall not be responsible for providing any utilities or services to Lessee whatsoever, and shall not be liable to Lessee for any interruption or failure of any utility services to the Premises from any cause whatsoever, nor shall such interruption or failure constitute a constructive eviction or give rise to a right of rent offset or abatement or affect the obligations of Lessee under this Lease in any other way whatsoever.
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10. ALTERATIONS.

10.1 Alterations. Lessee shall not make any alterations to the Premises or the Building without the prior written consent of the City which consent shall not be unreasonably withheld. City shall be deemed to have reasonably withheld or withdrawn consent unless each and every proposed alteration (i) shall not, individually or in the aggregate, lessen the fair market value of the Premises or the Building, or materially affect the usefulness of the Premises or the Building, either for Lessee’s business or the business of potential successor tenants, (ii) be accompanied by all final plans and specifications with any deviation therefrom constituting a separate alteration subject to this Section 10, (iii) be constructed by a California licensed contractor and under the direction of a California licensed architect satisfactory to the City, and (iv) once consented to by the City, shall be completed expeditiously in a good and workmanlike manner, with first class quality materials, and in compliance with all applicable legal and insurance requirements, (v) shall be constructed in strict compliance with the additional conditions set forth in Section 10.4 hereof, and (vi) shall become a “Lessee Improvement” and part of the Premises and subject to this Lease, provided, at the City’s option, Lessee shall remove any such alteration and restore the Premises to their condition prior to the making of same, normal wear and tear excepted, upon the expiration or earlier termination of the term hereof. The City shall exercise its option by 30 days’ notice given no later than 30 days after such expiration or termination and, if Lessee has not so removed and restored within 30 days after the City gives said notice, Lessee shall pay the City upon demand the reasonable rental value of the Premises during the period beginning with the date immediately following said 30 days after the City gives its notice and ending with the date upon which the removal and restoration is completed and the City may, but shall not be obligated to, remove such alteration and restore the Premises and Lessee also shall pay the City its cost of same upon demand.

10.2 Required Alterations. Subject to Section 10.1 above, Lessee shall, at its sole cost, make any alteration, addition, or change to the Premises of any sort, substantial or insubstantial, ordinary or extraordinary, foreseeable or unforeseeable, whether structural or otherwise, as may be required by law due to the existence of, or Lessee’s use or occupancy of, the Premises or as a result of Lessee’s application for any permit or governmental approval, provided that the City may elect to make same, in which case Lessee shall reimburse the City promptly upon demand for all costs of the City’s making same.

10.3 Security for Completion. Before commencing any proposed alteration, Lessee, if requested by the City, shall furnish to the City security reasonably satisfactory to the City guaranteeing to the City the completion of the proposed alteration within a reasonable time, free and clear of all liens and, if available, all ,7190436Ā-6:25782Ā/,)Ā-$#'$&.%Ȁ'.+(Ȁ$-."Ȁ(*,-Ȁ& .&-%*-!$$",7190436Ā-6:25782Ā/,)Ā%,%''-#"Ȁ($!*Ȁ#$# Ȁ'"#$Ȁ-+ .&!, !&#

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encumbrances, chattel mortgages, conditional bills of sale, security agreements and other claims and charges (other than those, if any, permitted hereunder) and in accordance with any plans and specifications theretofore approved by the City and, if required under any City encumbrance, by the City’s lender.

10.4 Additional Conditions. Lessee further covenants and agrees that no alterations will be made except in compliance with, and Lessee hereby covenants that it will comply with, each of the following provisions:

10.4.1 Before any alterations are begun, Lessee shall procure, at its own sole cost and expense, all necessary permits from all governmental authorities and shall, on demand, deliver photocopies thereof to the City;

10.4.2 All alterations shall be made in compliance and conformity with all applicable laws;

10.4.3 In making any alterations, Lessee shall not violate the terms or conditions of any insurance policy obtained or required pursuant to the provisions of this Lease affecting or relating to the Premises or any part thereof;

10.4.4 Promptly after the completion of any alterations, Lessee shall procure, at Lessee’s own sole cost and expense, all permits of governmental authorities for the completed alterations as may be required by any applicable laws, if any, and, on demand, shall promptly deliver photocopies thereof to the City; and

10.4.5 Lessee shall pay all costs, expenses and liabilities arising out of, in connection with, or by reason of, any alterations, and shall keep the Premises, Building and Project free and clear of all liens, claims and encumbrances in any way arising out of, in connection with, or by reason of, any alterations.

10.5 No City Contribution. The City shall not be required to make any contribution to the cost of any alterations or any part thereof, and Lessee covenants that the City shall not be required to pay any cost, expense or liability arising out of or in connection with or by reason of any alterations and shall indemnify and hold the City harmless from and against, and shall reimburse the City upon demand for, all such costs, expenses and liabilities (including, without limitation, reasonable attorneys’ fees and disbursements).

10.6 Notice. If Lessee makes any alterations to the Premises as provided in this Section 10, the alterations shall not be commenced until ten (10) days after the City has received written notice from Lessee stating the date the installation of the alterations is to commence so that the City can post and record an appropriate notice of nonresponsibility at the Premises.

10.7 Manner; Cost. Any alterations by Lessee shall be made in a manner that will not interfere with the quiet enjoyment of the other tenants in the building. Lessee shall pay prior to delinquency all cost for construction done by it or caused by it to be done on the Premises as permitted by this Lease. Lessee shall also reimburse the City upon demand for all costs the City incurs in reviewing any proposed alteration, including without limitation, architect, engineer and legal fees. Upon completion of ,7190436Ā-6:25782Ā/,)Ā-$#'$&.%Ȁ'.+(Ȁ$-."Ȁ(*,-Ȁ& .&-%*-!$$",7190436Ā-6:25782Ā/,)Ā%,%''-#"Ȁ($!*Ȁ#$# Ȁ'"#$Ȁ-+ .&!, !&#

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any such work, Lessee shall have recorded in the office of the County Recorder of Santa Clara County a Notice of Completion as required or permitted by law.

10.8 Mechanic’s Liens. Lessee shall keep the Premises, the Building and the Project free and clear of all mechanic’s liens resulting from construction done by or for Lessee.

10.9 Trade Fixtures. Lessee shall have the right at any time, and from time to time during the term of this Lease, at Lessee’s sole cost and expense, to install in or on the Premises such items, herein called “trade fixtures,” for use in Lessee’s trade or business as Lessee may, in its reasonable discretion, deem advisable, except that all such Lessee’s trade fixtures, furniture, furnishings, signs, and other personal property not permanently affixed to the Premises must be new when installed in, or attached to, the Premises. (All items identified on the Inventory of Fixtures, Exhibit B, shall be subject to all provisions of this Lease governing fixtures.) Any and all such trade fixtures shall remain the property of Lessee, and may be removed by Lessee at any time or times prior to the expiration or sooner termination of this Lease so long as Lessee is not in default hereunder, so long as Lessee shall immediately replace the same with similar personal property of comparable or better quality, except that Lessee shall not be obligated to replace such personal property at the expiration or earlier termination of this Lease, and Lessee shall immediately repair all damage caused by such removal and restore the Premises to substantially the condition they were in prior to the installation of such fixtures so that no trace remains of their presence at the Premises. At all times during the term of this Lease, Lessee shall maintain such trade fixtures in a good, first class condition.

10.10 Removal. Any trade fixtures described in this Section 10 that are not removed from the Premises by Lessee on the date of expiration or sooner termination, regardless of cause, of this Lease shall be deemed abandoned by Lessee and shall automatically become the property of the City and Lessee shall hold City harmless as to all claimants with respect to same.

10.11 Insurance. In the event that Lessee shall make any permitted improvements to the Premises under the provisions of this Section 10, Lessee agrees to carry such insurance as the City may reasonably request covering any such improvements, it being expressly understood and agreed that none of such improvements shall be insured by the City under the insurance it may carry upon the Building, nor shall the City be required to reconstruct any such improvements under any circumstances whatsoever, notwithstanding the provisions of Section 13.

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11. TAXES.

11.1 Personal Property Taxes. Lessee shall pay prior to delinquency all taxes, license fees and public charges assessed or levied against Lessee or Lessee’s Improvements, trade fixtures, furnishings, equipment and other personal property.

11.2 Assessments and Special Taxes. As a municipal corporation, City’s fee interest in the Project is exempt from the 1% general property tax levy and therefore property taxes will not be levied and will not be passed through to lessee or other tenants of the Project during City’s ownership of the Project. However, if and to the extent the Project or portion thereof is subject to special taxes or assessments, Lessee shall pay Lessee’s share of all such assessment and special taxes, if any, (other than possessory interest taxes on Lessee’s leasehold interest which shall be paid 100% by Lessee) which become due and payable to City on or before the later of ten (10) days prior to the delinquency thereof or three (3) days after the date on which Lessee receives a copy of the special tax or assessment bill and notice of City’s determination hereunder. Lessee’s liability to pay special taxes and assessments shall be prorated on the basis of a three hundred sixty-five (365) day year to account for any fraction or portion of a tax year included in the Lease term at the commencement or expiration of the Lease.

11.3 Revenue and Taxation Code Notice; Possessory Interest Taxes. Lessee specifically acknowledges it is familiar with §107.6 of the California Revenue and Taxation Code, realizes that a possessory interest subject to property taxes may be created, agrees to pay any such tax in full and without proration, and hereby waives any rights Lessee may have under said California Revenue and Taxation Code §107.6. City shall have no obligation to pay any possessory interest tax. No such possessory interest tax or any other tax payable by Lessee shall in any way reduce or substitute for the rent, charges or fees required to be paid as a condition of this Lease or as otherwise required by City.

12. HOLD HARMLESS/INDEMNIFICATION.

12.1 Indemnification. To the extent permitted by law, Lessee agrees to protect, defend, hold harmless and indemnify City, its City Council, commissions, officers, agents, volunteers, and employees from and against any claim, injury, liability, loss, cost, and/or expense or damage, however same may be caused, including all costs and reasonable attorney’s fees in providing a defense to any claim arising therefrom for which City shall become legally liable arising from Lessee’s negligent, reckless, or wrongful acts, errors, or omissions with respect to or in any way connected with this Lease. Lessee shall give City immediate notice of any claim or liability hereby indemnified against.

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12.2 Waiver of Claims. Lessee waives any claims against City for injury to Lessee’s business or any loss of income therefrom, for damage to Lessee’s property, or for injury or death of any person in or about the Premises or the Project, from any cause whatsoever, except to the extent caused by City’s active negligence or willful misconduct.

13. DAMAGE, DESTRUCTION AND TERMINATION.

13.1 Uninsured Risks. If, during the Term of this Lease, the Premises or the Building are totally or partially destroyed from a risk not covered by the insurance described in Section 19.2, the City, at its option, may elect to terminate this Lease by giving notice to Lessee or may elect to restore the same. However, as to destruction which was caused by an act or omission of Lessee, its employees, agents, invitees or permittees, Lessee shall reimburse the City the full cost of the restoration of the Premises, Building shell, and all leasehold improvements therein under any circumstances. If the City elects to restore the Premises or the Building, Lessee shall be entitled to a proportionate reduction of rent while such repairs are being made. Such reduction shall be in an amount which bears the same proportion to the Base Rent as the floor area of that portion of Premises which has been damaged or is otherwise unusable by Lessee, bears to the total floor area of the Premises, except that if the damage or destruction is to more than 50% of the square footage of the Premises and Lessee ceases to occupy the Premises, such proportionate reduction shall be 100%.

13.2 Insured Risks.

13.2.1 If, during the Term of this Lease, the Premises or the Building are totally or partially destroyed from a risk covered by insurance described in Section 19.2, the City shall forthwith repair the same to substantially the same condition they were in immediately prior to the destruction and to the extent of proceeds received under such insurance, provided such repairs can be made within ninety (90) days under then existing law. Such destruction shall in no way annul or void this Lease, except that Lessee shall be entitled to a proportionate reduction of rent while such repairs are being made, including but not limited to the foregoing ninety days, such proportionate reduction to be equal to, and granted upon the City’s receipt of, the proceeds received by the City from any rental interruption insurance maintained by Lessee. Such reduction shall be in an amount which bears the same proportion to the minimum monthly rent as the floor area of that portion of the Premises which has been damaged or is otherwise unusable by Lessee bears to the total floor area of the Premises. If such repairs cannot be made in 90 days, the City may, at its option, make same within a reasonable time, this Lease continuing in full force and effect and the rent being proportionately reduced as aforesaid. In the event that the City does not so elect to make such repairs which cannot be made in 90 days, or such repairs cannot be made under such then existing law, this Lease shall terminate.
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13.2.2 Notwithstanding any other provision of this Lease, if, at any time during the term of this Lease, the Premises or the Building are totally or partially destroyed and (i) the total cost to repair the Premises or the Building exceeds One Hundred Thousand Dollars($100,000), or (ii) twenty percent (20%) of the Building is damaged or destroyed (and whether or not any portion of the Premises is also damaged or destroyed), the City may elect to terminate this Lease by written notice to Lessee. Determination of the extent of damage or destruction and the time for effectuating repair shall be made by the City based upon written appraisals and insurance adjustment reports, and shall be final and binding on the Parties.

13.3 Extent of Obligation. Notwithstanding the foregoing, the City shall not be required to repair, reconstruct, or restore damage or destruction by fire or other cause to any portion of the Premises constructed by or for Lessee, and Lessee shall at its sole cost and expense fully restore or replace its stock in trade, trade fixtures, furniture, furnishings, equipment, and other personal property. Lessee shall commence all such replacement and restoration work promptly following the occurrence of any such damage or destruction, and shall diligently prosecute such work to completion. Lessee hereby waives any statutory rights of termination which may arise by reason of any partial or total destruction of the Premises or any part thereof. Upon termination of the Lease under any of the provisions of this Section 13, the Parties shall be released thereby from any further obligations hereunder except for obligations which, prior to the date of such termination, had already accrued, and except as provided in the following sentence. In the event of such a termination, all proceeds from Lessee’s insurance which pertain to alterations or improvements to the Premises which would otherwise become the property of the City upon expiration or termination of this Lease shall be disbursed and paid to the City.
.

13.4 Force Majeure/Excusable Delay. Except as provided in this Lease, any act of City or Lessee required by this Lease to be done within a specified time shall be subject to Excusable Delay. Lessee’s obligation to pay Rent, however, is not excused by this Section. “Excusable Delay” means prevention, delay or stoppage due to strikes, lockouts, labor disputes, Acts of God, inability to obtain labor, materials or reasonable substitutes, governmental restrictions, governmental regulation, governmental controls, judicial orders, enemy, or hostile governmental actions, civil commotion, fire or other casualty, and other causes beyond the reasonable control of Lessee or City (excepting, however, City’s or Lessee’s financial inability), which shall excuse the performance by City or Lessee for a period equal to the prevention, delay or stoppage, except the obligations imposed with regard to rent to be paid by Lessee pursuant to this Lease. In the event any work performed by Lessee or Lessee’s contractors results in a strike, lockout, and/or labor dispute, the strike, lockout, and/or labor dispute shall not excuse the performance by Lessee of the provisions of this Lease.
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13.5 Waiver. City and Lessee waive the provisions of any statutes which relate to termination of leases when leased property is destroyed and agree that such event shall be governed by the terms of this Lease.

14. SIGNS.

Lessee shall not construct, maintain or place any signs, advertising or other exterior decoration (collectively, “Signs”) upon the exterior of the Premises or Project, or modify any existing Signs, without prior written consent of City. Any Sign that Lessee has the right to place, construct or maintain shall comply with all laws at all times during the term of this Lease, and Lessee shall obtain any approval required by such law. City makes no representation with respect to Lessee’s ability to obtain such approval.

15. ASSIGNMENT AND SUBLETTING.

15.1 City’s Consent Required. Lessee shall not assign this Lease, nor any interest therein, and shall not sublet or encumber the Premises or any part thereof, nor any right or privilege appurtenant thereto, nor allow or permit any other person(s) to occupy or use the Premises, or any portion thereof, without the prior written consent of City. This Lease shall be binding upon any permitted assignee or successor of Lessee. Consent by City to one assignment, subletting, occupation or use by another person shall not be deemed to be consent to any subsequent assignment, subletting, occupation or use by another person. No assignment, subletting, or encumbrance by Lessee shall release it from or in any way alter any of Lessee’s obligations under this Lease. Any assignment, subletting, encumbrances, occupation or use contrary to the provisions of this Lease shall be void and shall constitute breach of this Lease. City may assign any of its rights hereunder without notice to Lessee.

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

16. DEFAULTS; REMEDIES.

16.1 Defaults. The occurrence of any one or more of the following events shall constitute a material default or breach of this Lease by Lessee:

16.1.1 Abandonment of the Premises by Lessee as defined by California Civil Code § 1951.3;

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16.1.2 Failure by Lessee to make any payment of rent or any other payment required to be made by Lessee hereunder, as and when due, where such failure shall continue for a period of ten (10) business days after written notice thereof from City to Lessee. In the event City serves Lessee with a Notice to Pay Rent or Quit pursuant to applicable Unlawful Detainer statutes, such Notice to Pay Rent or Quit shall also constitute the notice required by this subparagraph;

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

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

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

16.2.1 Terminate Lessee’s right to possession of the Premises by any lawful means, in which case this Lease shall terminate and Lessee shall immediately surrender possession of the Premises and all alterations to City. In such event, City shall be entitled to recover from Lessee all damages incurred by City by reason of Lessee’s default including, but not limited to, the cost of recovering possession of the Premises and alterations, expenses of reletting, including necessary renovation and alteration of the Premises and alterations, reasonable attorneys’ fees, the worth at the time of the award of the unpaid rent that had been earned at the time of termination of this Lease and the worth at the time of award of the amount by which the unpaid rent for the balance of the term after the time of such award exceeds the amount of such rental loss for the same period that Lessee proves could be reasonably avoided.

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16.2.2 Maintain Lessee’s right to possession, in which case this Lease shall continue in effect whether or not Lessee shall have abandoned the Premises. In such event, City shall be entitled to enforce all of City’s rights and remedies under this Lease, including the right to recover rent as it becomes due hereunder.

16.2.3 Pursue any other remedy now or hereafter available to City under the laws or judicial decisions of the State of California.

16.3 No Relief from Forfeiture after Default. Lessee waives all rights of redemption or relief from forfeiture under California Code of Civil Procedure §§ 1174 and 1179, and any other present or future law, in the event Lessee is evicted or City otherwise lawfully takes possession of the Premises by reason of any default or breach of this Lease by Lessee.

17. INTEREST ON PAST-DUE OBLIGATIONS.

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

18. CITY’S ACCESS.

18.1 Access for Inspection. City and City’s agents shall have the right to enter the Premises at reasonable times, upon not less than twenty-four (24) hours prior notice to Lessee or less in case of an emergency), for the purpose of inspecting same, showing same to prospective purchasers, lenders, lessees or others, and making such alterations, repairs, improvements or additions to the Premises as City may deem necessary. City may at any time place on or about the Premises any ordinary “For Sale” signs and City may at any time during the last one hundred twenty (120) days of the term hereof place on or about the Premises any ordinary “For Lease” signs, all without rebate of rent or liability to Lessee.

18.2 No Warranty. Except as otherwise stated in this Lease, Lessee hereby acknowledges that neither the City nor any employees or agents of the City has made any oral or written warranties or representations to Lessee relative to the condition or use by Lessee of said Premises and Lessee acknowledges that Lessee assumes all responsibility regarding the Occupational Safety and Health Act, the legal use and adaptability of the Premises and compliance with all applicable laws and regulations in effect during the term of this Lease.

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18.3 Security Measures. City shall have the right to require a reasonable security system, device, operation or plan be installed and implemented to protect the Premises or any alterations. Should City, in its sole discretion, require Lessee to install such a security system, Lessee agrees to bear the sole cost and expense of any security system, device, operation or plan and the installation and implementation thereof. Lessee shall obtain City’s prior approval before installing or implementing any security system, device, operation or plan.

19. INSURANCE.

19.1 Lessee Insurance. Lessee’s responsibility for the Premises begins immediately upon the Commencement Date and Lessee, at its sole cost and expense, and at no cost to City, shall provide and maintain in full force and effect during the entire term of this Lease insurance coverage in an amount(s) and in a form acceptable to City as set forth in Exhibit C attached hereto and incorporated herein by reference. Said policies shall be maintained with respect to Lessee’s employees, if any, and all vehicles operated on the Premises. The policies shall include the required endorsements, certificates of insurance and coverage verifications as described in Exhibit C. Lessee also agrees to secure renter’s liability insurance.

19.2 Fire Insurance on Building. City shall maintain insurance (or self-insurance through City’s joint pool coverage plan) covering the building. Lessee shall reimburse City Lessee’s pro rata share of the cost of insurance or joint pool self- insurance coverage(s) provided by the City upon delivery of the insurance (or joint pool self-insurance) premium invoice or, if otherwise requested by City, as part of the other Common Area Expenses pursuant to Section 6.6.

20. CONTRACT FOR ADMINISTRATIVE SERVICE.

To the extent that this Lease is a contract for administrative services, the City Council entered into such agreement upon recommendation of the City Manager pursuant to Section 1108 of the City’s Charter. The policy decision with respect to the services was made by the City Council and not by the City Manager.

21. DISPUTE RESOLUTION.

21.1 Unless otherwise mutually agreed to or as provided in Section 21.5, any controversies between Lessee and City regarding the construction or application of this Lease, and claims arising out of this Lease or its breach shall be submitted to mediation within thirty (30) days of the written request of one Party after the service of that request on the other Party.

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

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

21.4 Except as provided in Section 21.5, mediation under this section is a condition precedent to filing an action in any court. In the event of litigation arising out of any dispute related to this Lease, the Parties shall each pay their respective attorney’s fees, expert witness costs and cost of suit, regardless of the outcome of the litigation.

21.5 Nothing in this Section shall require the City to mediate any eviction, unlawful detainer, or other exercise of remedies following the expiration of the Term of this Lease as provided in Section 2 or any termination of this Lease under Section 16.

22. PAYMENTS/PARTIAL PAYMENTS.

Payments shall be effective upon receipt. City may apply any payment received from Lessee at any time against any obligation due and owing by Lessee under this Lease, regardless of any statement appearing on or referred to in any remittance from Lessee or any prior application of such payments. Acceptance by City of a partial payment of rent or other charges shall not be considered or construed to waive any right of City or affect any notice of legal proceedings, unless both Parties shall agree otherwise in writing. The receipt by City of a partial payment of any amount due to City endorsed as payment in full will be deemed to be a partial payment only, and any endorsements or statements on the check or any letter accompanying the check shall not be deemed an accord and/or satisfaction, and, notwithstanding said endorsements, City may accept and deposit said check without prejudice to its right to recover the balance. Lessee’s obligation (without prior notice or demands) to pay rent and all other amounts due hereunder shall be absolute and unconditional, and not subject to any abatement, set off, defense, recoupment or reduction.

23. NON-LIABILITY OF OFFICIALS AND EMPLOYEES OF THE CITY.

No official or employee of City shall be personally liable for any default or liability under this agreement.

24. NON-DISCRIMINATION.

Lessee covenants it shall not discriminate based upon race, color, creed, religion, sex, marital status, age, handicap, national origin or ancestry in any activity pursuant to this agreement.
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25. CONFLICT OF INTEREST.

Lessee shall at all times avoid conflict of interest or appearance of conflict of interest in performance of this agreement.

26. MEMORANDUM OF LEASE.

Lessee shall not record this Lease or a memorandum thereof, or any other reference to this Lease, without the prior written consent of the City. Lessee, upon the request of the City, shall execute and acknowledge a Memorandum of Lease for recording in the official records of Santa Clara County. Upon termination or expiration of this Lease, Lessee shall execute and record a quitclaim deed as to its leasehold interest.

27. ESTOPPEL CERTIFICATE.

Lessee shall, from time to time, upon at least ten (10) days prior written notice from City, execute, acknowledge and deliver to City a statement in writing (i) certifying this Lease is unmodified and in full force and effect, or, if modified, stating the nature of the modification and certifying that the Lease, as modified, is in full force and effect, and the date to which the rental and other charges, if any, have been paid; and, (ii) acknowledging that there are not to Lessee’s knowledge, any defaults, or stating if any defaults are claimed, any statement may be relied upon by any prospective purchaser or encumbrancer of the Project.

28. LIENS.

Lessee agrees at its sole cost and expense to keep the Premises, Building and Project free and clear of any and all claims, levies, liens, encumbrances or attachments.

29. RELOCATION BENEFITS WAIVER.

29.1 Relocation Laws Acknowledgement. Lessee is informed of, and is aware that following expiration or termination of this Lease, City intends to demolish the exiting Building and explore redevelopment of the Project property with other uses.

Lessee further acknowledges that under the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (42 USC 4601, et seq.) and its regulations (49 CFR Part 24) and the Relocation Assistance Act (Cal. Gov. Code § 7260, et seq.), as may be amended, (collectively, “Relocation Laws”) a qualifying “displaced person or business” who is displaced by a public agency-initiated redevelopment project, such as the one proposed by City, is entitled to monetary and non-monetary benefits including relocation advisory assistance, a business reestablishment payment, assistance with costs to search for a replacement location for the business, and rent differential payments to the extent the tenant’s rent in a new location is higher than the tenant’s current rent (collectively, “Potential Relocation Benefits”).
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29.2 Lessee Representations and Warranties. Lessee represents and warrants to City as follows: (i)Lessee had no option or other rights to extend the term of the Prior Lease beyond September 30, 2021; (ii) Lessee’s Prior Lease terminated upon the termination of the Ground Lease and Lessee had no right to remain in occupancy of the Premises beyond the expiration dates of the Prior Lease and Ground Lease which were co-terminus; (iii) Lessee’s right to occupy the Premises under this Lease will commence following the termination of the Ground Lease and City’s acquisition of an ownership interest in the Building from the former ground lessee; (iv) Lessee is an after-acquired tenant of City and not a potential “displaced person or business” under Relocation Laws (defined below); and (v) City’s willingness to enter into this new Lease with Lessee is contingent upon Lessee’s agreement to waive Potential Relocation Benefits as provided herein . Lessee further represents and warrants to City that Lessee’s relocation from the Property upon expiration or termination of this Lease will be a result of the expiration of the Prior Lease and this Lease each of which occurred or were anticipated prior to Lessee entering into this Lease with City and therefore Lessee is not a “displaced person or business” under Relocation Laws.

29.3 Waiver and Release of All Claims. In exchange for City’s agreements under this Lease, Lessee hereby waives and releases all rights or claims that Lessee has or may have in the future against City or its elected or appointed officials, employees, agents, attorneys or consultants, or any federal or state agency which may provide funding in connection with City’s future redevelopment of the Project with other uses (collectively, the “Released Parties”) under the Relocation Laws as a result of, arising out of, or connected with Lessee’s departure from the Premises and/or the City’s redevelopment of the Project in the future, including but not limited to any claims for Potential Relocation Benefits.

29.4 Covenant Not to Sue. Lessee covenants and agrees that it will not bring, commence, maintain or prosecute, directly or indirectly, any action at law or proceeding in equity or any legal administrative proceeding or any claim for damages or any other relief against any of the Released Parties, based in whole or in part on any claim of eligibility for Potential Relocation Benefits. The waiver and release set forth in Section 29.3 above may, and shall be plead, as a full and complete defense to, and may be used as a basis for an injunction against any action, suit or proceeding which may be instituted, prosecuted, or maintained in breach of the covenants contained in this Section 29.

By its initials below, Lessee hereby acknowledges and confirms its agreement to the waivers, releases, covenants and agreements of this Section 29. _____________ ____________
Lessee Initials Lessee Initials
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30. VACATING.

Upon termination of the tenancy, Lessee shall completely vacate the Premises, Building and Project, including the removal of any and all of its personal property and fixtures (whether or not identified on the Inventory of Fixtures (Exhibit B). Before departure, Lessee shall return keys and the Premises (including Lessee Improvements) to City in good, clean and sanitary condition, reasonable wear and tear excepted. Lessee shall allow City to inspect the Premises to verify the condition of the Premises and its contents.

31. ABANDONMENT.

Lessee’s absence from the Premises for three (3) consecutive days, without prior notice, during which time rent or other charges are delinquent, shall be deemed abandonment of the Premises and a material default by Lessee entitling City to the remedies in Section 16 above, including the right to terminate this Lease. In the event of such termination, City shall be authorized to enter and take possession and to remove and dispose of the property of Lessee and its employees, agents, contractors and invitees without any liability whatsoever to City.

32. PROPRIETARY AND GOVERNMENTAL ROLES; ACTIONS BY CITY.

Except where clearly and expressly provided otherwise in this Lease, the capacity of the City in this Lease shall be as owner and lessor of property only (“Proprietary Capacity”), and any obligations or restrictions imposed by this Lease on the City shall be limited to that capacity and shall not relate to, constitute a waiver of, supersede or otherwise limit or affect its governmental capacities, including enacting laws, inspecting structures, reviewing and issuing permits, and all of the other legislative and administrative or enforcement functions pursuant to federal, state or local law (“Governmental Capacity”).

When acting in its Proprietary Capacity, discretionary actions may be undertaken by the City Manager or other designees as designated by the City Manager to the extent otherwise provided for in this Lease. In addition, nothing in this Lease shall supersede or waive any discretionary or regulatory approvals required to be obtained from the City under applicable law, nor guarantee that the City, in its Governmental Capacity, will grant any particular request for a license, permit or other regulatory approval. Lessee understands that the City may grant or deny such request in its sole discretion, and may impose such terms and conditions as it deems consistent with that discretion and applicable laws.

,7190436Ā-6:25782Ā/,)Ā-$#'$&.%Ȁ'.+(Ȁ$-."Ȁ(*,-Ȁ& .&-%*-!$$",7190436Ā-6:25782Ā/,)Ā%,%''-#"Ȁ($!*Ȁ#$# Ȁ'"#$Ȁ-+ .&!, !&#

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33. HOLDOVER.

Lessee has no right to retain possession of the Premises or any portion thereof beyond the expiration or termination of this Lease. In the event that Lessee holds over after the expiration of the term without executing a new lease, then such holding over shall be construed as a tenancy from month-to-month, subject to all conditions, provisions and obligations of this Lease insofar as they are applicable to a month-to-month tenancy, except that the Base Rent portion of the rent shall be increased to 150% of the amount of the Base Rent payable immediately prior to the expiration or termination of the Lease, as the case may be. Nothing contained herein shall be construed as consent of City to any holding over by Lessee.

34. NOTICES.

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

City of Santa Clara
Attention: City Manager
1500 Warburton Avenue
Santa Clara, CA 95050
Or by facsimile at (408) 241-6771

And to Lessee addressed as follows:

Lessee’s Notice Address:

Name: Supakam Corp.

Address: 41769 Paseo Padre Parkway
Fremont, CA 94539
Phone






Notices may be served upon Lessee in person or by first class mail or by certified mail to Lessee whether or not said mailing is accepted by Lessee. If notice is sent via facsimile, a signed, hard copy of the material shall also be mailed. The workday the facsimile was sent shall control the date notice was deemed given if there is a facsimile machine generated document on the date of transmission. A facsimile transmitted after 1:00 P.M. on a Friday shall be deemed to have been transmitted on the following Monday. These addresses shall be used for service of process.

35. TIME.

Time shall be of the essence in this Lease.

,7190436Ā-6:25782Ā/,)Ā-$#'$&.%Ȁ'.+(Ȁ$-."Ȁ(*,-Ȁ& .&-%*-!$$",7190436Ā-6:25782Ā/,)Ā%,%''-#"Ȁ($!*Ȁ#$# Ȁ'"#$Ȁ-+ .&!, !&#

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36. MISREPRESENTATIONS.

Any statements submitted to City in the Application to Rent by Lessee (if applicable) are considered inducements to execute this Lease. Misrepresentations shall entitle City to terminate this Lease at any time.

37. AMENDMENTS.

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

38. INDEPENDENT LEGAL ADVICE.

Each Party represents and warrants to the other the following: they have carefully read this Lease, and in signing this Lease, they do so with full knowledge of any right which they may have; they have received independent legal advice from their respective legal counsel as to the matters set forth in this Lease, or have knowingly chosen not to consult legal counsel as to the matters set forth in this Lease; and, they have freely signed this Lease without any reliance upon any agreement, promise, statement or representation by or on behalf of the other party, or their respective agents, employees, or attorneys, except as specifically set forth in this Lease, and without duress or coercion, whether economic or otherwise.

39. SERVICE CHARGE.

A service charge of twenty dollars ($20.00) will be made for each check that must be resubmitted for payment.

40. SIGNING AUTHORITY.

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

41. CHANGE OF LOCKS.

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

,7190436Ā-6:25782Ā/,)Ā-$#'$&.%Ȁ'.+(Ȁ$-."Ȁ(*,-Ȁ& .&-%*-!$$",7190436Ā-6:25782Ā/,)Ā%,%''-#"Ȁ($!*Ȁ#$# Ȁ'"#$Ȁ-+ .&!, !&#

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42. CAPTIONS/RECITALS.

The captions of the various sections, paragraphs and subparagraphs of this Lease are for convenience only and shall not be considered or referred to in resolving questions of interpretation. All of the recitals of this Lease, and the defined terms set forth therein, are incorporated into and made a part of this Lease by this reference.

43. REPAIRS.

Except as expressly provided in this Lease, City shall have no obligation to repair or maintain the Premises or any alterations thereto or facilities placed therein. Lessee expressly waives the benefit of any statute now or hereinafter in effect which would otherwise afford Lessee the right to make repairs at City’s expense or to terminate this Lease because of City’s failure to keep Premises in good order, condition and repair.

Lessee shall not call on City to make any improvements or repairs to said property of any kind whatsoever.

44. SURRENDER OF LEASE NOT MERGER.

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

45. INTEGRATED DOCUMENT; AMENDMENTS.

This Lease, including any exhibits attached hereto, embodies the entire agreement between City and Lessee and its terms and conditions. No other understanding, agreements, conversations or otherwise, with any officer, agent or employee of City prior to execution of this Lease shall affect or modify any of the terms or obligations contained in any documents comprising this Lease. Any such verbal agreement shall be considered as unofficial information and in no way binding upon City. This Lease may be modified only by a written amendment duly executed by the Parties to this Lease, pursuant to Section 37 entitled “Amendments.” All agreements with City are subject to approval of the City Council before City shall be bound thereby.

,7190436Ā-6:25782Ā/,)Ā-$#'$&.%Ȁ'.+(Ȁ$-."Ȁ(*,-Ȁ& .&-%*-!$$",7190436Ā-6:25782Ā/,)Ā%,%''-#"Ȁ($!*Ȁ#$# Ȁ'"#$Ȁ-+ .&!, !&#

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46. WAIVER.

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

47. INTERPRETATIONS.

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

48. SEVERABILITY CLAUSE.

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

49. GOVERNING LAW.

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

50. VENUE.

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

,7190436Ā-6:25782Ā/,)Ā-$#'$&.%Ȁ'.+(Ȁ$-."Ȁ(*,-Ȁ& .&-%*-!$$",7190436Ā-6:25782Ā/,)Ā%,%''-#"Ȁ($!*Ȁ#$# Ȁ'"#$Ȁ-+ .&!, !&#

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51. COMPLIANCE WITH LAWS.

Lessee shall not use the Premises or permit anything to be done in or about the Premises which will in any way conflict with any law, statute, zoning restriction, ordinance or governmental law or rule, regulation, or requirement, including any Hazardous Materials laws or regulations, of any duly constituted public authorities now in force or which may hereafter be enacted or promulgated, or which will subject City to any liability for injury to any person or property by reason of any business operation being conducted in or about the Premises. To the extent required due to Lessee’s specific use of the Premises, alterations of the Premises made by Lessee, or as a result of Lessee’s application for permits or authorizations, Lessee shall, at its sole cost and expense, promptly comply with all applicable laws, statutes and ordinances, governmental rules, regulations, orders, permits, licenses, approvals, authorizations, federal and state disability laws, and other requirements including the Americans with Disabilities Act (“ADA”) of 1990 (42 U.S.C. 12101 et seq.), together with any amendment thereto or regulations promulgated under any of the foregoing, and any state or local ordinances or codes enacted pursuant thereto, and with all requirements of any board or fire insurance underwriters or other similar bodies, now or hereafter constituted, relating to or affecting the condition, use, or occupancy of the Premises by Lessee, any improvements or alterations made by, on behalf of, or for Lessee, or any other Lessee acts or omissions.

The final judgment of any court of competent jurisdiction or the admission of Lessee in any action against Lessee, whether City be a party thereto or not, that Lessee has violated any laws shall be conclusive of that fact as between City and Lessee. Lessee, within ten (10) days after receipt, shall provide City with copies of any notices it receives regarding a material violation or alleged material violation of any Laws. Lessee shall also cause its agents, contractors, subcontractors, employees, customers, and subtenants to comply with all applicable laws.

52. COUNTERPARTS; ELECTRONIC SIGNATURES.

This Lease may be executed in counterparts, each of which shall be deemed to be an original, but both of which shall constitute one and the same instrument; and, the Parties agree that signatures on this Lease, including those transmitted electronically by email or facsimile, shall be sufficient to bind the Parties.

,7190436Ā-6:25782Ā/,)Ā-$#'$&.%Ȁ'.+(Ȁ$-."Ȁ(*,-Ȁ& .&-%*-!$$",7190436Ā-6:25782Ā/,)Ā%,%''-#"Ȁ($!*Ȁ#$# Ȁ'"#$Ȁ-+ .&!, !&#

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53. ACCESSIBILITY; DISABILITY LAWS.

53.1 The Premises have not undergone an inspection by a Certified Access Specialist.

53.2 “A Certified Access Specialist (CASp) can inspect the subject premises and determine whether the subject premises comply with all of the applicable construction-related accessibility standards under state law. Although state law does not require a CASp inspection of the subject premises, the commercial property owner or lessor may not prohibit the lessee or tenant from obtaining a CASp inspection of the subject premises for the occupancy or potential occupancy of the lessee or tenant, if requested by the lessee or tenant. The parties shall mutually agree on the arrangements for the time and manner of the CASp inspection, the payment of the fee for the CASp inspection, and the cost of making any repairs necessary to correct violations of construction-related accessibility standards within the premises.”

53.3 Since compliance with the ADA and other federal and state disability laws (collectively, “Disability Laws”) is dependent upon Lessee’s specific use of the Premises, City makes no warranty or representation as to whether or not the Premises comply with Disability Laws. In the event that Lessee’s use of the Premises requires modifications or additions to the Premises in order to be in compliance with Disability Laws, Lessee agrees to make any such necessary modifications and/or additions at Lessee’s sole cost and expense.

54. OFAC COMPLIANCE.

Lessee represents and warrants to City that Lessee is not a party with whom City is prohibited from doing business pursuant to the regulations of the Office of Foreign Assets Control (“OFAC”) of the U.S. Department of the Treasury, including those parties named on OFAC’s Specially Designated Nationals and Blocked Persons List.

Lessee is currently in compliance with, and shall at all times during the term of this Lease remain in compliance with, the regulations of OFAC and any other governmental requirement relating thereto. In the event of any violation of this section, City shall be entitled to immediately terminate this Lease and take such other actions as are permitted or required to be taken under law or in equity. LESSEE SHALL DEFEND,

INDEMNIFY AND HOLD HARMLESS CITY FROM AND AGAINST ANY AND

ALL CLAIMS, DAMAGES, LOSSES, RISKS, LIABILITIES AND EXPENSES (INCLUDING ATTORNEYS' FEES AND COSTS) INCURRED BY CITY ARISING FROM OR RELATED TO ANY BREACH OF THE FOREGOING CERTIFICATIONS.

These indemnity obligations shall survive the expiration or earlier termination of this Lease.

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55. NO BROKERAGE.

City is represented in this transaction by Eugene Burger Management Corporation (“City’s Agent”). Brokerage fees, commissions or other payments owed to City’s Agent, if any, in connection with this Lease transaction shall be paid by City per the terms of a separate agreement between City and City’s Agent. Lessee represents and warrants to City that Lessee is represented in this transaction by Alex Ayala Sr. (“Lessee’s Agent”).

Fees, if any, payable to Lessee’s Agent, if applicable, shall be paid pursuant to separate agreement(s) between City’s Agent and Lessee’s Agent or between Lessee and Lessee’s Agent. Lessee shall indemnify and defend City from and against any claims made by Lessee’s Agent or any other person or entity purporting to represent Lessee in this transaction for any finder’s fee, brokerage fee, commission or other payment claiming through Lessee or its affiliates with respect to the execution of this Lease or the consummation of the transaction contemplated hereby.

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[Signatures on next page]
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CITY OF SANTA CLARA, CALIFORNIA, a chartered California municipal corporation

Dated: ________________________
APPROVED AS TO FORM:

By:

______________
Office of the City Attorney

DEANNA J. SANTANA
City Manager
1500 Warburton Avenue
Santa Clara, CA 95050
Telephone: (408) 615-2210

Fax: (408) 241-6771
“CITY”
Supakam Corp.

Togo’s Sandwiches

Dated: December 13, 2021

By:

(Signature of Person executing the Agreement on behalf of Lessee)
Name: Amith Kumar Chalasani
Title: President
Local Address: 41769 Paseo Padre Pkwy
Fremont, CA 94539
Email Address: [email protected]
Telephone: (408) 420-2986
Fax: ( )
“LESSEE”

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rpt:~
_l.{ 5348C30C1317449 ...
________ ________
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INITIALS INITIALS
© 2017 AIR CRE. All Rights Reserved. Last Edited: 12/20/2021 12:34 PM ADD-1.03, Revised 10-22-2020 Page 1 of 1

ADDENDUM TO LEASE
Date: December 20, 2021
By and Between
Lessor: City of Santa Clara, Califonia, a chartered California municipal Corporation ("City")
Lessee: Supakam Corp Inc, Togo's
Property Address: 1000 Lafayette Street Unit A, Santa Clara, CA 95050 (street address, city, state, zip)
Paragraph: 56 - 58
In the event of any con flict between the provisions of this Addendum and the printed provisions of the Lease, this Addendum shall control.

AIR CRE * h Ʃps://www.aircre.com * 213-687-8777 * [email protected] NOTICE: No part of these works may be reproduced in any form without permission in wri Ɵng.

56. This Addendum takes effect on October 1, 2021.

57. Rent Schedule:

Monthly Base Rent shall be adjusted as follows:

A. Year 1 - $3,595.00 per Month + NNN (CAM)
Year 2 - $3,595.00 per Month + NNN (CAM)

58. Lessee agrees to pay monthly Base rent in the amount of $3,595.00 per month for the months of October 2021, and November 2021 and December 2021 totaling $10,785.00 prior to execution of this rental Lease dated December 7, 2021.
,7190436Ā-6:25782Ā/,)Ā-$#'$&.%Ȁ'.+(Ȁ$-."Ȁ(*,-Ȁ& .&-%*-!$$" ,7190436Ā-6:25782Ā/,)Ā%,%''-#"Ȁ($!*Ȁ#$# Ȁ'"#$Ȁ-+ .&!, !&# AIRCRE
contracts
________ ________
________ ________

INITIALS INITIALS
© 2017 AIR CRE. All Rights Reserved. Last Edited: 12/20/2021 12:34 PM GR-3.22, Revised 10-22-2020 Page 1 of 2

GUARANTY OF LEASE
Paragraph 59
WHEREAS, City of Santa Clara, Califonia, a chartered California municipal Corporation ("City") ,h e r e i n aŌer "Lessor", and Supakam Corp Inc, Togo's ,h e r e i n aŌer "Lessee", are about to execute a document en Ɵtled "Lease" dated December 20, 2021 concerning the premises commonly known as (street address, city, state, zip) 1000 Lafayette Street Unit A, Santa Clara, CA 95050 wherein Lessor will lease the premises to Lessee, and WHEREAS, Amithkumar Chalasani hereinaŌer "Guarantors" have a financial interest in Lessee, and WHEREAS, Lessor would not execute the Lease if Guarantors did not execute and deliver to Lessor this Guaranty of Lease.

NOW THEREFORE, in considera Ɵon of the execuƟon of said Lease by Lessor and as a material inducement to Lessor to execute said Lease, Guarantors hereby jointly, severally, uncondiƟonally and irrevocably guarantee the prompt payment by Lessee of all rents and all other sums payable by Lessee under said Lease and the faithful and prompt performance by Lessee of each and every one of the terms, condi Ɵons and covenants of said Lease to be kept and performed by Lessee.

It is specifically agreed by Lessor and Guarantors that: (i) the terms of the foregoing Lease may be modi fied by agreement between Lessor and Lessee, or by a course of conduct, and (ii) said Lease may be assigned by Lessor or any assignee of Lessor without the consent of or no Ɵce to Guarantors and that this Guaranty shall guarantee the performance of said Lease as so modi fied.

This Guaranty shall not be released, modi fied or affected by the failure or delay on the part of Lessor to enforce any of the rights or remedies of the Lessor under said Lease.

No noƟce of default by Lessee under the Lease need be given by Lessor to Guarantors, it being speci fically agreed that the guarantee of the undersigned is a conƟnuing guarantee under which Lessor may proceed immediately against Lessee and/or against Guarantors following any breach or default by Lessee or for the enforcement of any rights which Lessor may have as against Lessee under the terms of the Lease or at law or in equity.

Lessor shall have the right to proceed against Guarantors following any breach or default by Lessee under the Lease without first proceeding against Lessee and without previous no Ɵce to or demand upon either Lessee or Guarantors.

Guarantors hereby waive (a) no Ɵce of acceptance of this Guaranty. (b) demand of payment, presenta Ɵon and protest, (c) all right to assert or plead any statute of limitaƟons relaƟng to this Guaranty or the Lease, (d) any right to require the Lessor to proceed against the Lessee or any other Guarantor or any other person or enƟty liable to Lessor , (e) any right to require Lessor to apply to any default any security deposit or other security it may hold under the Lease, (f) any rig ht to require Lessor to proceed under any other remedy Lessor may have before proceeding against Guarantors, (g) any right of subroga Ɵon that Guarantors may have against Lessee.

Guarantors do hereby subordinate all exis Ɵng or future indebtedness of Lessee to Guarantors to the obliga Ɵons owed to Lessor under the Lease and this Guaranty.

If a Guarantor is married, such Guarantor expressly agrees that recourse may be had against his or her separate property for all of the obliga Ɵons hereunder .

The obligaƟons of Lessee under the Lease to execute and deliver estoppel statements and financial statements, as therein provided, shall be deemed to also require the Guarantors to provide estoppel statements and financial statements to Lessor . The failure of the Guarantors to provide the same to Lessor shall cons Ɵtute a default under the Lease.

The term "Lessor" refers to and means the Lessor named in the Lease and also Lessor's successors and assigns. So long as Lessor's interest in the Lease, the leased premises or the rents, issues and pro fits therefrom, are subject to any mortgage or deed of trust or assignment for security, no acquisi Ɵon by Guarantors of the Lessor's interest shall affect the conƟnuing obligaƟon of Guarantors under this Guaranty which shall nevertheless con Ɵnue in full force and e ffect for the benefito f t h e mortgagee, beneficiary, trustee or assignee under such mortgage, deed of trust or assignment and their successors and assigns.

The term "Lessee" refers to and means the Lessee named in the Lease and also Lessee's successors and assigns.

Any recovery by Lessor from any other guarantor or insurer shall first be credited to the porƟ on of Lessee's indebtedness to Lessor which exceeds the maximum liability of Guarantors under this Guaranty.

No provision of this Guaranty or right of the Lessor can be waived, nor can the Guarantors be released from their obliga Ɵons except in wriƟng signed by the Lessor .

Any liƟgaƟon concerning this Guaranty shall be ini Ɵated in a state court of competent jurisdic Ɵon in the county in which the leased premises are located and the Guarantors consent to the jurisdic Ɵon of such court. This Guaranty shall be governed by the laws of the State in which the leased premises are located and for the purposes of any rules regarding con flicts of law the par Ɵes shall be treated as if they were all residents or domiciles of such State.

In the event any ac Ɵon be brought by said Lessor against Guarantors hereunder to enforce the obliga Ɵon of Guarantors hereunder , the unsuccessful party in such acƟon shall pay to the prevailing party therein a reasonable a Ʃorney's fee. The a Ʃorney's fee award shall not be computed in accordance with any court fee schedule, but shall be such as to full reimburse all a Ʃorneys' fees reasonably incurred.

If any Guarantor is a corpora Ɵon, partnership, or limited liability company, each individual execu Ɵng this Guaranty on said en Ɵty's behalf represents and warrants that he or she is duly authorized to execute this Guaranty on behalf of such en Ɵty. Signatures to this Guaranty accomplished by means of electronic ,7190436Ā-6:25782Ā/,)Ā-$#'$&.%Ȁ'.+(Ȁ$-."Ȁ(*,-Ȁ& .&-%*-!$$" ,7190436Ā-6:25782Ā/,)Ā%,%''-#"Ȁ($!*Ȁ#$# Ȁ'"#$Ȁ-+ .&!, !&# AIRCRE
contracts
________ ________
________ ________

INITIALS INITIALS
© 2017 AIR CRE. All Rights Reserved. Last Edited: 12/20/2021 12:34 PM GR-3.22, Revised 10-22-2020 Page 2 of 2
signature or similar technology shall be legal and binding.

If this Form has been filled in, it has been prepared for submission to your a Ʃorney for his approval. No representa Ɵon or recommendaƟon is made by AIR CRE, the real estate broker or its agents or employees as to the legal su fficiency, legal effect, or tax consequences of this Form or the transac Ɵon relaƟng thereto.

GUARANTORS
Amithkumar Chalasani
Executed At: Docusign
On:

By:

Name Printed: Amithkumar Chalasani
Title: President
Address: 41769 Paseo Padre Parkway
Fremont, CA 94539
By:

Name Printed:

Title:

Address:

AIR CRE * h Ʃps://www.aircre.com * 213-687-8777 * [email protected] NOTICE: No part of these works may be reproduced in any form without permission in wri Ɵng. ,7190436Ā-6:25782Ā/,)Ā-$#'$&.%Ȁ'.+(Ȁ$-."Ȁ(*,-Ȁ& .&-%*-!$$" 


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5348C30C1317 449 ...
-=-=- -====--

Lease Agreement/ Supakam Corp. Exhibit A
Rev.: 02-01-15
OAK #4822-6577-3562 v9

COMMERCIAL PROPERTY LEASE AGREEMENT

BY AND BETWEEN

CITY OF SANTA CLARA, CALIFORNIA
AND
Supakam Corp.

EXHIBIT A

Address: 1000 Lafayette Street, Santa Clara, CA 95050
APN: 269-22-089
Lot Size: 1.319 AC
Legal Brief Description: CITY: SANTA CLARA LOT B RECORDER'S BOOK 437 PAGE 46

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Lease Agreement/ Supakam Corp. Exhibit B Page 1 of 1
Rev.: 02-01-15
OAK #4822-6577-3562 v9

COMMERCIAL PROPERTY LEASE AGREEMENT

BY AND BETWEEN

CITY OF SANTA CLARA, CALIFORNIA
AND
Supakam Corp.

EXHIBIT B

INVENTORY OF FIXTURES

1. 1- Commercial oven

2. 2 - Microwave

3. 16 - tables

4. 64 - chairs

5. 2 – Hung picture frames

6. 1 – Washer

7. 1 - Dryer

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Lease Agreement/ Supakam Corp. Exhibit C Page 1 of 2
Rev.: 02-01-15
OAK #4822-6577-3562 v9

COMMERCIAL PROPERTY LEASE AGREEMENT

BY AND BETWEEN

CITY OF SANTA CLARA, CALIFORNIA
AND
Supakam Corp.

EXHIBIT C

INSURANCE REQUIREMENTS

Lessee shall procure and maintain for the duration of the contract insurance against claims for injuries to persons or damages to property which may arise from or in connection with the Lessee’s operation and use of the leased premises. The cost of such insurance shall be borne by the Lessee.

A. MINIMUM SCOPE AND LIMIT OF INSURANCE

Coverage shall be at least as broad as:

1. Commercial General Liability (CGL): In surance Services Office Form CG 00 01 covering CGL on an “occurrence” basis, including products and completed operations, property damage, bodily injury and personal & advertising injury with limits no less than $2,000,000 per occurrence. If a general aggregate limit applies, either the general aggregate limit shall apply separately to this project/location (ISO CG 25 03 or 25 04) or the general aggregate limit shall be twice the required occurrence limit.

2. Workers ’ Compensation Insurance as required by the State of California, with Statutory Limits, and Employer’s Liability Insurance with limits of no less than $1,000,000 per accident for bodily injury or disease. (This applies to lessees with employees).

3. Property insurance against all risks of loss to any tenant improvements or betterments, at full replacement cost with no coinsurance penalty provision.

If the Lessee maintains broader coverage and/or higher limits than the minimums shown above, the City requires and shall be entitled to the broader coverage and/or the higher limits maintained by the Lessee. Any available insurance proceeds in excess of the specified minimum limits of insurance and coverage shall be available to the City.

B. OTHER INSURANCE PROVISIONS:

The insurance policies are to contain, or be endorsed to contain, the following provisions:

1. Additional Insured Status: The City, its offi cers, officials, employees, and volunteers are to be covered as additional insureds on the CGL policy with respect to liability arising out of work or operations performed by or on behalf of the Lessee including materials, parts, or ,7190436Ā-6:25782Ā/,)Ā-$#'$&.%Ȁ'.+(Ȁ$-."Ȁ(*,-Ȁ& .&-%*-!$$" ,7190436Ā-6:25782Ā/,)Ā%,%''-#"Ȁ($!*Ȁ#$# Ȁ'"#$Ȁ-+ .&!, !&#

Lease Agreement/ Supakam Corp. Exhibit C Page 2 of 2
Rev.: 02-01-15
OAK #4822-6577-3562 v9
equipment furnished in connection with such work or operations. General liability coverage can be provided in the form of an endorsement to the Lessee’s insurance (at least as broad as ISO Form CG 20 10).

2. Primary Coverage: For any claims related to this contract, the Less ee’s insurance coverage shall be primary insurance coverage at least as broad as ISO CG 20 01 04 13 as respects the City, its officers, officials, employees, and volunteers. Any insurance or self- insurance maintained by the City, its officers, officials, employees, or volunteers shall be excess of the Lessee’s insurance and shall not contribute with it.

3. Legal Liability Coverage: The property ins urance is to be endorsed to include Legal Liability Coverage (ISO Form CP 00 40 04 02 or equivalent) with a limit equal to the replacement cost of the leased property.

4. Notice of Cancellation: Each insurance policy required above shall provide that coverage shall not be canceled, except with notice to the City.

5. Waiver of Subrogation: Lessee hereby grants to City a waiver of any right to subrogation which any insurer of said Lessee may acquire against the City by virtue of the payment of any loss under such insurance. Lessee agrees to obtain any endorsement that may be necessary to affect this waiver of subrogation, but this provision applies regardless of whether or not the City has received a waiver of subrogation endorsement from the insurer.

6. Acceptability of Insurers: Insurance is to be placed with insurers authorized to conduct business in the state with a current A.M. Best’s rating of no less than A: VII, unless otherwise acceptable to the City.

7. Self-Insured Retentions: Self-insured retenti ons must be declared to and approved by the City. The City may require the Lessee to purchase coverage with a lower retention or provide proof of ability to pay losses and related investigations, claim administration, and defense expenses within the retention. The policy language shall provide, or be endorsed to provide, that the self-insured retention may be satisfied by either the named insured or City.

8. Verification of Coverage: Lessee shall furnish the City with original Certificates of Insurance including all required amendatory endorsements (or copies of the applicable policy language effecting coverage required by this clause) and a copy of the Declarations and Endorsement Page of the CGL policy listing all policy endorsements to City before occupying the premises. However, failure to obtain the required documents prior to the work beginning shall not waive the Lessee’s obligation to provide them. The City reserves the right to require complete, certified copies of all required insurance policies, including endorsements, required by these specifications, at any time.

9. Special Risks or Circumstances: City reserves the right to modify these requirements at any time, including limits, based on the nature of the risk, prior experience, insurer, coverage, or other special circumstances.

,7190436Ā-6:25782Ā/,)Ā-$#'$&.%Ȁ'.+(Ȁ$-."Ȁ(*,-Ȁ& .&-%*-!$$" ,7190436Ā-6:25782Ā/,)Ā%,%''-#"Ȁ($!*Ȁ#$# Ȁ'"#$Ȁ-+ .&!, !&# -82:1547Ā.7;36893Ā0-*Ā&+ )!&(,Ȁ,,(+Ȁ$'+#Ȁ)/#.Ȁ.#.-"# !.-%& 


AIRCRE
contracts

DISCLOSURE REGARDING REAL ESTATE AGENCY RELATIONSHIP
(As required by the Civil Code)
When you enter Into a discussion with a real estate agent regarding a real estate transaction, you should from the outset understand what type of agency relationship or representation you wish to have with the agent in the transaction.

SELLER'S AGENT
A Seller's agent under a listing agreement with the Seller acts as the agent for the Seller only. A Seller's agent or a subagent of that agent has the following affirmative obllgattons:

To the Seller: A fiduciary duty of utmost care, Integrity, honesty and loyalty In dealings with the Seller.

To the Buyer and the Seller:
(al DIiigent exercise of reasonable sklll and care In performance of the agent's duties. (bl A duty of honest and fair dealing and good faith.
(c) A duty to disclose all facts known to the agent materially affecting the value or desirablllty of the property that are not known to, or within the diligent attention and observation of, the parties.

An agent Is not obllgated to reveal to either party any confldenttal information obtained from the other party that does not Involve the affirmative duties set forth above.

BUYER'S AGENT
A Buyer's agent can, with a Buyer's consent, agree to act as agent for the Buyer only. In these situations, the agent Is not the Seller's agent, even If by agreement the agent may receive compensation for services rendered, either In full or In part from the Seller. An agent acting only for a Buyer has the following affirmative obllgations:

To the Buyer: A fiduciary duty of utmost care, integrity, honesty and loyalty In deallngs with the Buyer.

To the Buyer and the Seller:
(a) Dlllgent exercise of reasonable skill and care In performance of the agent's duties. (b) A duty of honest and fair deallng and good faith.
(c) A duty to disclose all facts known to the agent materially affecting the value or deslrablllty of the property that are not known to, or within the dlHgent attention and observation of, the parties.

An agent Is not obllgated to reveal to either party any confidential Information obtained from the other party that does not Involve the affirmative duties set forth above.

AGENT REPRESl:NTING BOnt SEUER AND BUYER
A real estate agent, either acting directly or through one or more salesperson and broker associates, can legally be the agent of both the Seller and the Buyer In a transaction, but only with the knowledge and consent of both the Seller and the Buyer.

In a dual agency situation, the agent has the following affirmative obllgattons to both the Seller and the Buyer:
(a) A fiduciary duty of utmost care, Integrity, honesty and loyalty In the deallngs with either the Seller or the Buyer. (b) Other duties to the Seller and the Buyer as stated above In their respective sections.

In representing both Seller and Buyer, a dual agent may not, without the express permission of the respective party, disclose to the other party confidential Information, Including, but not limited to, facts relating to either the Buyer's or Seller's financial position, motivations, bargaining position, or other personal Information that may Impact price, Including the Seller's willingness to accept a prtce less than the listing price or the Buyer's willingness to pay a price greater than the price offered.

SEllER AND BUYER RESPONSIBILITIES
Either the purchase agreement or a separate document will contain a confirmation of which agent Is representing you and whether that agent Is representing you exclusively In the transaction or acting as a dual agent. Please pay attention to that confirmation to make sure It accurately reflects your understanding of your agent's role. The above duties of the agent In a real estate transaction do not relleve a Seller or Buyer from the responslblllty to protect his or her own Interests. You should carefully read all agreements to assure that they adequately express your understanding of the transaction. A real estate agent Is a person qualified to advise about real estate. If legal or tax advice Is desired, consult a competent professional. If you are a Buyer, you have the duty to exercise reasonable care to protect yourself, Including as to those facts about the property which are known to you or within your dlllgent attention and observation. Both Sellers and Buyers should strongly consider obtaining tax advice from a competent professional because the federal and state tax consequences of a transaction can be complex and subject to change.

Throughout your real property transaction you may receive more than one disclosure form, depending upon the number of agents assisting In the transaction. The law requires each agent with whom you have more than a casual relationship to present you with this disclosure form. You should read Its contents each time It Is presented to you, considering the relationship between you and the real estate agent In your specific transaction. This dlsdosure form lndudes the provlslo• of SectloM 2079.1.3 to 2079.24, Inclusive, of the Clvll Code set forth on page 2. Read lt carefully. I/WE ACKNOWlEDGE RECEIPT OF A COPY OF THIS DISCLOSURE AND THE PORTIONS OF THE OVILCODE PRINTED ON THE BACK(OR A SEMRATE MGE). n Buyer Seller □ Lessor ~ Lessee Mai Xuan Ngo dba M.Y Salon, a California, Sole Proprietor. Date:(J/ • fl -J! 21
Buyer seller l ✓I Lessor ] Lessee
Agent: Eua m B1Hg\~I M, naa -m•xll Corp< r r io11 DREUc.#: 01183885 Real Estate Broker (Firm)
MN

INITIALS
C, 2019 AIR CRE. All Rights Reserved.

AD-3.01, Revised 10-22-2020

INITIALS
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Pagel of4
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" Alex Ayala Sr. ~ ;:";•;::
(Salesperson or Broker-Assot,d,,.1 °774ECCF4425459-
DRE Lie. #: 02054 907 Date: _ __ _
THIS FORM HAS BEEN PREPARED BY AIR CRE. NO REPRESENTATION IS MADE AS TO THE LEGAL VALIDITY OR ADEQUACY OF THIS FORM FOR ANY SPECIFIC TRANSACTION. PLEASE SEEK LEGAL COUNSEL AS TO THE APPROPRIATENESS OF THIS FORM. /VI&]

INITIALS
Cl 2019 AIR CRE. All Rights Reserved.

AD-3.01, Revised 10-22-2020

INITIALS
Last Edited: 1/10/2022 7:26 PM
Page2 of4
-82:1547Ā.7;36893Ā0-*Ā&+ )!&(,Ȁ,,(+Ȁ$'+#Ȁ)/#.Ȁ.#.-"# !.-%& DISQ.OSURE REGARDING REAL ESTA'IE AGENCY RELA110NSHIP
OVIL CODE SECTIONS 2079.13 THROUGH 2079.24 (2079.16 APPEARS ON THE FRONl) 2079.13. As used in Sections 2079. 7 and 2079.14 to 2079.24, inclusive, the following tenns have the followlng meanings:
(a) "A8ent" means a person acting under provisions ofTltle 9 (commencing with Section 2295) in a real property transaction, and Includes a person who Is licensed as a real estate broker under Chapter 3 (commencing with Section 10130) of Part 1 of Division 4 of the Business and Professions Code, and under whose license a llstlng Is eioecuted or an offer to purchase Is obtained. The agent In the real property transaction bears responslblllty for that agent's salespersons or broker associates who perform as agents of the agent. When a salesperson or broker associate owes a duty to any principal, or to any buyer or seller who Is not a principal, In a real property transaction, that duty Is equivalent to the duty owed to that party by the broker for whom the salesperson or broker associate functions. (b) "Buyer" means a transferee In a real property transaction, and includes a person who executes an offer to purchase real property from a seller through an agent, or who seeks the services of an agent In more than a casual, transitory, or preliminary manner, with the object of entering Into a real property transaction ... Buyer" Includes vendee or lessee of real property. (c) "Commercial real property" means all real property In the state, e,ccept (1) single-family residential real property, (2) dwelllng units made subject to Chapter 2 (commencing with Section 1940) of ntle 5, (3) a mobile home, as defined in Section 798.3, (4) vacant land, or (5) a recreational vehicle, as defined In Section 799.29. (d) "Dual agent" means an agent acting, either directly or through a salesperson or broker associate, as agent for both the seller and the buyer In a real property transaction. (e) uustlng agreement" means a written contract between a seller of real property and an agent, by which the agent has been authorized to sell the real property or to find or obtain a buyer, Including rendering other services for which a real estate license Is required to the seller pursuant to the terms of the agreement. (f) "Seller's agent" means a person who has obtained a listing of real property to act as an agent for compensation. (g) "Listing price" is the amount expressed In dollars specified In the listing for which the seller is willing to sell the real property through the seller's agent. (h) .. Offering price" Is the amount expressed In dollars specified In an offer to purchase for which the buyer Is willing to buy the real property. (I) "Offer to purchase" means a written contract executed by a buyer acting through a buyer's agent that becomes the contract for the sale of the real property upon acceptance by the seller. (J) 0 Real property" means any estate specified by subdivision (1) or (2) of Section 761 In property, and includes (1) slngle-famlly residential property, (2) multi-unit residential property with more than four dwelling units, (3) commercial real property, (4) vacant land, (5) a ground lease coupled with Improvements, or (6) a manufactured home as defined In Section 18007 of the Health and Safety Code, or a mobile home as defined In Section 18008 of the Health and Safety Code, when offered for sale or sold through an agent pursuant to the authority contained In Section 10131.6 of the Business and Professions Code. (k) "Real property transaction" means a transaction for the sale of real property In which an agent Is retained by a buyer, seller, or both a buyer and seller to act In that transaction, and Includes a llsting or an offer to purchase. (I) "Sell," "salet or "sold" refers to a transaction for the transfer of real property from the seller to the buyer and includes exchanges of real property between the seller and buyer, transactions for the creation of a real property sales contract within the meaning of Section 2985, and transactions for the creation of a leasehold exceeding one year's duration. (m) "Seller" means the transferor In a real property transaction and Includes an owner who lists real property with an agent, whether or not a transfer results, or who receives an offer to purchase real property of which he or she Is the owner from an agent on behalf of another. "Seller" Includes both a vendor and a lessor of real property. (n) "Buyer's agent .. means an agent who represents a buyer In a real property transaction. 2079.14. A seller's agent and buyer's agent shall provide the seller and buyer in a real property transaction with a copy of the disclosure form specified in Section 2079.16, and shall obtain a signed acknowledgment of receipt from that seller and buyer, except as provided in Section 2079.15, as follows: (a) The seller's agent, if any, shall provide the disclosure form to the seller prior to entering Into the listing agreement. (b) The buyer's agent shall provide the disclosure form to the buyer as soon as practicable prior to eioecutlon of the buyer's offer to purchase. If the offer to purchase Is not prepared by the buyer's agent, the buyer's agent shall present the disclosure form to the buyer not later than the next business day after receiving the offer to purchase from the buyer. 2079.15. In any circumstance in which the seller or buyer refuses to sign an acknowledgment of receipt pursuant to Section 2079.14, the agent shall set forth, sign, and date a written declaration of the facts of the refusal. 2079.16 Reproduced on Page 1 of this AD form.
2079.17(a) As soon as practicable, the buyer's agent shall disclose to the buyer and seller whether the agent Is acting In the real property transaction as the buyer's agent, or as a dual agent representing both the buyer and the seller. This relationship shall be confirmed in the contract to purchase and sell real property or In a separate writing executed or acknowledged by the seller, the buyer, and the buyer's agent prior to or coincident with execution of that contract by the buyer and the seller, respectively. (b) As soon as practicable, the seller's agent shall disclose to the seller whether the seller's agent ls acting In the real property transaction as the seller's agent, or as a dual agent representing both the buyer and seller. This relationship shall be confinned In the contract to purchase and sell real property or In a separate writing executed or acknowledged by the seller and the seller's agent prior to or coincident with the execution of that contract by the seller. (Cl CONFIRMATION: The following agency relationships are confirmed for this transaction.

Seller's Brokerage Firm DO NOT COMPLETE, SAMPLE ONLY License Number __ _ Is the broker of (check one): □ the seller; or □ both the buyer and seller. (dual agent) Seller's Agent DO NOT COMPLETE, SAMPLE ONLY License Number __ _ Is (check one): □ the Seller's Agent. (salesperson or broker associate); or □ both the Buyer's Agent and the Seller's Agent. (dual agent) Buyer's Brokerage Firm DO NOT COMPLETE, SAMPLE ONLY License Number __ _ Is the broker of (check one): □ the buyer; or □ both the buyer and seller. (dual agent) Buyer's Agent DO NOT COMPLETE, SAMPLE ONLY License Number __ _ Is (check one): □ the Buyer's Agent. (salesperson or broker associate); or □ both the Buyer's Agent and the Seller's Agent. (dual agent) (d) The disclosures and confirmation required by this section shall be In addition to the disclosure required by Section 2079.14. An agent's duty to provide disclosure and confirmation of representation In this section may be performed by a real estate salesperson or broker associate afflHated with that broker. 2079.18 (Repealed pursuant to AB· 1289, 2017-18 California Legislative session) 2079.19 The payment of compensation or the obligation to pay compensation to an agent by the seller or buyer Is not necessarily detennlnative of a particular agency relationship between an agent and the seller or buyer. A listing agent and a selling agent may agree to share any compensation or commission paid, or any right to any compensation or commission for which an obligation arises as the result of a real estate transaction, and the terms of any such agreement shall not necessarlly be determinative of a particular relationship.
2079.20 Nothing In this article prevents an agent from selecting, as a condition of th- ~n-0;'· a"'lployment, a specific form of agency relationship not specifically ~ iv'\N

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CC) 2019 AIR CRE. All Rights Reserved.

AD-3.01, Revised 10-22-2020

INITIALS
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-82:1547Ā.7;36893Ā0-*Ā&+ )!&(,Ȁ,,(+Ȁ$'+#Ȁ)/#.Ȁ.#.-"# !.-%& prohibited by this article if the requirements of Section 2079.14 and Section 2079.17 are complied with. 2079.21 (a) A dual agent may not, without the express permission of the seller, disclose to the buyer any confidential Information obtained from the seller. (b) A dual agent may not, without the express permission of the buyer, disclose to the seller any confidential information obtained from the buyer. (c)-Confidential lnformationH means facts relating to the client's financial position, motivations, bargaining position, or other personal Information that may impact price, such as the seller Is wllUng to accept a price less than the listing price or the buyer iswllllng to pay a price greater than the price offered. (d) This section does not alter in any way the duty or responslblllty of a dual agent to any principal with respect to confidential Information other than price. 2079,22 Nothing In this article precludes a seller's agent from also being a buyer's agent. If a seller or buyer in a transaction chooses to not be represented by an agent, that does not, of Itself, make that agent a dual agent. 2079.23 (a) A contract between the principal and agent may be modified or altered to change the agency relationship at any time before the performance of the act which Is the object of the agency with the written consent of the parties to the agency relationship. (b) A lender or an auction company retained by a lender to control aspects of a transaction of real property subject to this part, Including validating the sales price, shall not require, as a condition of receiving the lender's approval of the transaction, the homeowner or listing agent to defend or Indemnify the lender or auction company from any llablllty alleged to result from the actions of the lender or auction company. Any clause, provision, covenant, or agreement purporting to Impose an obRgation to defend or Indemnify a lender or an auction company in violation of this subdivision Is against public policy, void, and unenforceable. 2079.24 Nothing In this article shall be construed to either diminish the duty of disclosure owed buyers and sellers by agents and their associate licensees, subagents, and employees or to relieve agents and their associate licensees, subagents, and employees from liability for their conduct in connection with acts governed by this article or for any breach of a fiduciary duty or a duty of disclosure.

AIR CRE • https:/J-. 11rcre.com • 21~Nl7n • contractsf)alrcre.com NOTICE: No part oft"- wortcs may be reproducied In any form without permission In wrttlna, MN

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C0 2019 AIR CRE. All Rights Reserved.

AD-3.01, Revised 10-22-2020

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COMMERCIAL PROPERTY LEASE AGREEMENT

BY AND BETWEEN

CITY OF SANTA CLARA, CALIFORNIA
AND
Mai Xuan Ngo dba M. Y Salon, a California, Sole Proprietor This lease agreement ("Lease") is dated January 11, 2022 and is by and between the City of Santa Clara, California, a chartered California municipal corporation ("City") and Mai Xuan Ngo dba M.Y Salon, a California, Sole Proprietor ("Lessee"). City and Lessee may be referred to individually as a "Party" or collectively as the "Parties" or the "Parties to this Lease." The City Manager serves as Contract Administrator for this Lease on behalf of the City Council.

RECITALS:

A. Lessee previously leased the Premises (as defined below) pursuant to one or more prior leases, including without limitation Mai Xuan Ngo dba M.Y Salon, a California, Sole Proprietor the Net Shopping Center Lease, with Lucia Lim ("Prior Landlord"), which expired on September 30, 2021 (collectively, "Prior Lease"). The Prior Lease was in tum a sublease under a ground lease between the Prior Landlord as lessee and the City as lessor for the land underlying the Project (as defined below), which also expired on September 30, 2021 ("Ground Lease").

B. Effective of the termination of the Prior Lease, the City became the sole owner of the Project, free and clear of the Prior Lease. Nevertheless, the Parties have agreed to enter into a new lease on the terms herein.

NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, stipulated and agreed, Lessee and City mutually agree as follows:

1. AGREEMENTS:

LEASE PROVISIONS
PREMISES; BUILDING AND PROJECT.

1.1 General. City hereby leases to Lessee, and Lessee hires from City, certain real property located in the City of Santa Clara, County of Santa Clara, State of California, commonly known as Suite A-1 consisting of approximately ~square feet (the "Premises") in that certain approximately ~ square foot building at 1000 Lafayette Street, Santa Clara, California, 95050 (the "Building"), located on an approximately 1.33 acre parcel (co1lectively, including the Building, the "Project"), all as more particularly described or identified in Exhibit A attached hereto and incorporated herein by reference. The Project excludes, and Lessee is the Lease Agreement/ Mai Xuan Ngo dba M.Y Salon, a California, Sole Proprietor Rev.: 02-01-15
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2. sole owner of, the items identified on the Inventory of Fixtures set forth in Exhibit B attached hereto and incorporated herein by reference.

1.2 Pro Rata Share. Lessee's pro rata share ("Pro Rata Share") is percent 7.97% which represents the percentage that the rentable area of the Premises bears to the total rentable area of the building.

TERM; COMMENCEMENT DATE.

The term of this Lease shall be for Two (2) years commencing at 12:01 am on October 1, 2021 ("Commencement Date") and ending on September 30, 2023 _. Lessee shall, at the expiration of the term of this lease, or upon its earlier termination, surrender the Premises in as good condition as it is now at the date of this lease, reasonable wear and tear excepted. City shall have the right, upon the termination of the term or upon a breach, to enter the Premises and take possession of it.

3. RENT.

3.1 Base Rent. Lessee shall pay base rent ("Base Rent") in the amount of 1 160.00 per month. All rent, including Base Rent, shall be paid in lawful money of the United States of America without deduction or offset. Base Rent shall be payable on the first day of each and every month commencing on the Commencement Date, at a place (or places) as may be designated in writing from time to time by City.

3.2 Late Charge. Lessee acknowledges late payment by Lessee to City of rent will cause City to incur costs not contemplated by this Lease, the exact amount of such costs being extremely difficult and impracticable to fix. Such costs include, without limitation, processing, accounting and late charges that may be imposed on City.

Therefore, if City does not receive any installment of rent due from Lessee within ten ( 10) days after the date such rent is due, Lessee shall pay to City an additional sum often percent (10%) of the overdue rent as a late charge. The parties agree this late charge represents a fair and reasonable estimate of the costs City will incur by reason of late payment by Lessee. Acceptance of any late charge shall not constitute a waiver of Lessee's default with respect to the overdue amount, nor prevent City from exercising any of the other rights and remedies available to City.

3.3 Rent. The term "Rent" as used in this Lease shall mean Base Rent and any other amounts owing from Lessee to the City pursuant to this Lease.

Lease Agreement/ Mai Xuan Ngo dba M.Y Salon, a California, Sole Proprietor Rev.: 02-01-15
OAK #4822-6577-3562 v9