City Council and Concurrent Authorities
February 7, 2023

• Final Project Budget
• Final Project Implementation Plan
• A resolution from the grantee organization's governing body approving acceptance of grant funds and designating an Authorized Representative allowed to enter into agreements on behalf of the organization
• If applicable: A letter from the grantee organization's Chief Financial Officer, Finance Director, or equivalent confirming availability of matching funds (Required for all grantees contributing local match funds.) • If applicable: A current facility lease with a term extending at least ten years after the end of the grant period. (Required for all projects involving leased buildings.) The City of Stockton on behalf of the Stockton-San Joaquin County Public Library will receive $5,000,000 of the award following the submission and approval of all required documents. The remaining funds will be made available following the grantee's completion of the requirements outlined in the Grant Agreement and Certification of Compliance document included in the Award Packet, and in accordance with the payment schedule.

Please complete and submit all supporting documents within 30 days of receipt of this letter. Contact your grant monitor if you are not able to provide all documentation by that time.

The State Library grant monitor for this project is Libby Carlson. Your grant monitor can be reached by email at [email protected] or phone at (916) 603-6705. Your grant monitor will be available to assist you throughout your grant period.

Hard copies of this correspondence will not follow. Please keep the entirety of this correspondence for your files and consider these award materials as your original documents.

Best i/,hes fori successful project.

Ref !ttully y r•
h Greg L cas
Library - rts Building
P O Box 942837
Sacramento, CA 94237-0001
.........
916-323-9759
[email protected]
www.library.ca.gov
Attachment A 569
Building Forward Library Infrastructure Grant Program
BF-1-21-061

Enclosures: Grant Agreement (for reference only)
Final Project Budget Form and List of Unallowable Costs Final Project Implementation Plan Form
Sample Authorizing Resolution
CC: Libby Carlson
Annly Roman
Reed Strege
State Library Fiscal Office
Library - Courts Building
P O Box 942837
Sacramento, CA 94237-0001
916-323-9759
[email protected]
www.library.ca.gov
Attachment A 570

THE BASICS - YOUR GRANT AWARD
The following provides all the basic information about your grant and managing your grant.

Grant#: BF-1-21-061
Organization: City of Stockton on behalf of the Stockton-San Joaquin County Public Librarv
Library: STOCKTON-SAN JOAQUIN COUNTY PUBLIC LIBRARY -
Cesar Chavez Central Library
Project Title: Cesar Chavez Central Librarv Remodel
Grant Award Amount: $10,000,000
Local Match Amount: $5,000,000
Total Project Budget: $15,000,000
Grant Period Start Date: Upon execution of Grant Agreement Grant Period End Date: No later than March 2026
Approved Uses (Outputs): Interior Partitions
Openings-Doors
Ceiling Finishes
Floor Finishes
Interior Plumbing
HVAC System
Electrical Distribution System
Interior Lighting
Exterior Lighting
Fire Alarm
Intrusion Alarm
Technology-information-data
Public Address/clocks
Seismic Bracing
Life Safety-Code Compliance
ADA Compliance
HAZMAT
Site work- Concrete
Please understand that it can take from six to eight weeks after a completed claim form with no errors has been received before grant funds are delivered. If you have not received your payment after eight weeks, please contact your grant monitor.

REPORTING
The City of Stockton on behalf of the Stockton-San Joaquin County Public Library is required to provide financial and narrative reports throughout the grant period as outlined in the Grant Agreement and Certificate of Compliance. A final financial and narrative report will be due within 30 days after the project is complete. Grantees will also be required to provide updates throughout the grant period upon request. Progress documentation (e.g. photos or video of grant-funded work) will be required with each report. Reports should be submitted to your grant monitor.

PAYMENTS
Attachment A 571
Building Forward Library Infrastructure Grant Program
BF-1-21-061

Grant payments will be made based on the payment schedule specified in the Grant Agreement.

Ten percent (10%) of the full grant award will be withheld until the end of the project period. It is payable only if the grant recipient fulfills all project reporting requirements and expends all funds, or returns all unspent grant funds, by the time specified in the grant terms and conditions. Note: This 10% is separate from the project contingency (if one was included in the budget).

GRANT MONITOR CONTACT
We want your project to be successful. Please work with your grant monitor throughout implementation of your project.

Grant Monitor:

Email Address:

Phone Number:

Library - Courts Building
P O Box 942837
Sacramento, CA 94237-0001
Libby Carlson
[email protected]
(916) 603-6705
916-323-9759
[email protected]
www.library.ca.gov
Attachment A 572
• General costs directly related to unallowable project components (or portion thereof), including, but not limited to: planning, construction/project management, consultant fees, design, architecture and engineering services, permits and fees, other pre-construction costs • Grant writing, fundraising, or lobbying
• Improvements to facilities that do not qualify as public library outlets • Indirect costs
• Moving or storage costs
• Open+
• Operation and ongoing maintenance – including extended warranties • Playgrounds and play structures (internal or external) • Programming
• Public art
• Real estate – purchase of land, structures, and any related fees • Removal/disposal of functional items
• Spaces not specifically for library use, such as general municipal services • Tangible property to support program operations and service delivery, such as tables, chairs, shelves, computers, servers, books, AV equipment/systems, televisions, vehicles, automatic book sorting systems, and self-check machines
Any expenditure not part of the approved grant budget is also considered unallowable. Any project activity not associated with an approved output is not allowable. Any modifications to the project budget must be reviewed and approved by the State Library.

If a grantee is unsure whether a cost is allowable or unallowable, they should contact the State Library before committing any funds and/or starting work.

Questions should be emailed to [email protected].

Attachment A 573
Building Forward Grant Program
Unallowable Costs: Round 1
Updated 10/03/2022
This document outlines costs that are not allowable under the Building Forward Grant Program.

No grant funds or required local matching funds may be spent on unallowable costs.

Unallowable Costs include, but are not limited to:
• Bidding/advertising
• Book drops if not directly attached or built into the library building • Book lockers
• Community engagement, planning meetings, or workshops • Costs incurred outside of the grant period
• Entertainment or meals
• Escalation in addition to the project contingency
• Establishment of a reserve fund
• Exterior elements not attached to building, including but not limited to:
o Consultants or contractors engaged specifically for exterior elements/grounds (e.g. landscape designers, landscapers, planners), unless the work is directly associated with a funded project output and approved by the State Library o Electric vehicle charging stations
o Fences or Gates, installation and/or repair, unless directly attached to building, addressing an immediate life safety issue, and approved by the State Library o Fountains or other water features
o Landscaping
o Outdoor areas and access to these areas, including program space, courtyards, patios, benches/furniture, sitting areas, shade structures, and pergolas o Hardscape, outdoor walkways/paths of travel - including curbs, sidewalks, and walkways o Parking lots – creation, maintenance, reconfiguration, repair, sealing, resurfacing, and/or restriping
o Security cameras and/or lighting not directly attached to building o Shade structures
o Sprinklers or sprinkler repair
• Federal or state taxes
• Furniture (including accessible furniture) and furnishings Attachment A 574
• General costs directly related to unallowable project components (or portion thereof), including, but not limited to: planning, construction/project management, consultant fees, design, architecture and engineering services, permits and fees, other pre-construction costs • Grant writing, fundraising, or lobbying
• Improvements to facilities that do not qualify as public library outlets • Indirect costs
• Moving or storage costs
• Open+
• Operation and ongoing maintenance – including extended warranties • Playgrounds and play structures (internal or external) • Programming
• Public art
• Real estate – purchase of land, structures, and any related fees • Removal/disposal of functional items
• Spaces not specifically for library use, such as general municipal services • Tangible property to support program operations and service delivery, such as tables, chairs, shelves, computers, servers, books, AV equipment/systems, televisions, vehicles, automatic book sorting systems, and self-check machines
Any expenditure not part of the approved grant budget is also considered unallowable. Any project activity not associated with an approved output is not allowable. Any modifications to the project budget must be reviewed and approved by the State Library.

If a grantee is unsure whether a cost is allowable or unallowable, they should contact the State Library before committing any funds and/or starting work.

Questions should be emailed to [email protected].

Attachment A 575
Building Forward Library Infrastructure Grant Program
Project Budget
Part 1: Project
Grant Number: 2021-2022 BF- 1-21-061
Organization: City of Stockton on behalf of Stockton San Joaquin County Public Library Library Jurisdiction: San Joaquin County Public Library Library Facility: Cesar Chavez Central Library
Project Title: Cesar Chavez Central Library Remodel
Approved Match Reduction: 50% Reduction Select from dropdown list.

Building Forward Library Infrastructure Grant Program 1 of 7 ATTACHMENT B 576
Part 2: Project Outputs
List all approved outputs from your Intent to Fund letter and related tangible parts of your project.

Include only costs that will be funded by the Building Forward Grant and local matching funds. If you have questions about what outputs or activities may be included, please refer to your Intent to Fund letter and the List of Unallowable Costs.

Project Outputs Includes
Interiors - openings-doors material at end of useful life Interiors - ceiling finishes replace for hazard repairs and hazardous material removal + required MEP upgrades Interiors Floor Finishes removal of hazardous materials, end of useful life Services - HVAC System replace for essential critial maintenance of building system Services - Electrical Distribution System replace/upgrade for life safety, essential critial maintenance of building system Services - Interior Lighting required for removal + replacement of hazardous materials Services - Exterior Lighting exterior lighting required for egress and safety Services - Fire Alarm replacement for life safety
Services - Intrusion Alarm modify Security system- CCTV for safety Equipment - Seismic Bracing seismically brace salvaged book stacks for life safety Other Building Construction - Life Safety - Code Compliance update fire extinguisers, add exterior signage and wayfinding, replace elevators per code Other Building Construction - ADA Compliance upgrade/repair: main stair + railings, upgrade path of travel for accessibility + for life safety Other Building Compliance - HAZMAT hazardous material removal and remediation Construction Management required for project construction Permits and Inspection fees required for project construction Project Engineering, Environmental Review other consultant fees partial funding from other sources, required for project construction Building Forward Library Infrastructure Grant Program 2 of 7 ATTACHMENT B 577
Part 3: Administrative Costs
Enter any project or grant administration costs that will be incurred. Administrative costs are limited 10% of the grand total. Costs must be split between grant and local required match at the rate approved in the Intent to Fund letter.

Please refer to grant documentation to determine whether a cost is allowed under this grant.

Administrative Costs are directly related to administration of grant and local matching funds. The Cost Detail should include the FTE and hourly rates for staff working on the grant.

Item Building Forward Local Match Total Cost Detail
Project Administration $189,211 $94,606 $283,817 Public Works Staff. See hourly rates:
$0 $0
$0 $0
$0 $0
$0 $0
$0 $0
$0 $0
$0 $0
$0 $0
$0 $0
$0 $0
$0 $0
Total Administrative Costs $189,211 $94,606 $283,817
Building Forward Library Infrastructure Grant Program 3 of 7 ATTACHMENT B 578
Part 4: Salaries/Wages/Benefits
Salaries/Wages/Benefits should represent costs, such as those associated with internal staff performing project related work. This may include public works staff providing direct project work, internal planning, project management, etc. Costs included in this section should represent salaries, wages, and benefits paid directly by your organization; employment related costs paid by any contractor or subrecipient should be listed in part 5 as applicable. Staff time devoted to the award or grant funds should be listed in part 3.

Major Outputs Building Forward Local Match Total Cost Detail Interiors - openings-doors $0 $0
Interiors - ceiling finishes $0 $0
Interiors Floor Finishes $0 $0
Services - HVAC System $0 $0
Services - Electrical Distribution System $0 $0
Services - Interior Lighting $0 $0
Services - Exterior Lighting $0 $0
Services - Fire Alarm $0 $0
Services - Intrusion Alarm $0 $0
Equipment - Seismic Bracing $0 $0
Other Building Construction - Life Safety -
Code Compliance
$0 $0
Other Building Construction - ADA
Compliance
$0 $0
Other Building Compliance - HAZMAT $0 $0
Construction Management $0 $0
Permits and Inspection fees $0 $0
Project Engineering, Environmental Review
other consultant fees
$0 $0
$0 $0
$0 $0
$0 $0
$0 $0
$0 $0
$0 $0
$0 $0
$0 $0
Total Salaries/Wages/Benefits $0 $0 $0
Building Forward Library Infrastructure Grant Program 4 of 7 ATTACHMENT B 579
Part 5: Consultant/Contractor Fees
Consultant/Contractor fees are costs related to external contractors, subrecipients, organizations, providing services, general contracting, planning, design, construction/project management, inspections, reviews, and other services required to accomplish outputs.

Major Outputs Building Forward Local Match Total Cost Detail Interiors - openings-doors $0 $0
Interiors - ceiling finishes $0 $0
Interiors Floor Finishes $0 $0
Services - HVAC System $0 $0
Services - Electrical Distribution System $0 $0
Services - Interior Lighting $0 $0
Services - Exterior Lighting $0 $0
Services - Fire Alarm $0 $0
Services - Intrusion Alarm $0 $0
Equipment - Seismic Bracing $0 $0
Other Building Construction - Life Safety -
Code Compliance
$0 $0
Other Building Construction - ADA
Compliance
$0 $0
Other Building Compliance - HAZMAT $0 $0
Construction Management $473,028 $236,514 $709,542 Management of the construction contract, tracking progress of construction, coordinating and supervising construction activities to ensure conformance to construction documents.

Permits and Inspection fees $136,667 $68,334 $205,001 Building permit and inspection fees to confirm construction meets building code requirements.

Project Engineering, Environmental Review
other consultant fees
$163,954 $81,977 $245,931 HAZMAT Consultant & Contractor, Environmental Consultant $0 $0
$0 $0
$0 $0
$0 $0
$0 $0
$0 $0
$0 $0
$0 $0
Total Consultant Fees $773,649 $386,825 $1,160,474
Building Forward Library Infrastructure Grant Program 5 of 7 ATTACHMENT B 580
Part 6: Supplies/Materials/Equipment
Supplies/Materials/Equipment are costs for necessary supplies, materials, or equipment required to complete the project outputs. This may include equipment, building materials, tools, and related costs.

Major Outputs Building Forward Local Match Total Cost Detail Interiors - openings-doors $110,110 $55,055 $165,165 replace door panels, frames, hardware, associated framing upgrades, existing doors are at end of useful life
Interiors - ceiling finishes $402,307 $201,154 $603,461 replace ceiling, associated framing/ suspended systems, for life safety
Interiors Floor Finishes $469,803 $234,902 $704,705 replace flooring, wall base, transitions, for remediation of hazmat
Services - HVAC System $3,331,519 $1,665,760 $4,997,279 replace HVAC units, Air Handler, Mini-Splits, Boiler for essential critial maintenance of building system
Services - Electrical Distribution System $513,847 $256,924 $770,771 replace/upgrade for life safety, essential critial maintenance of building system
Services - Interior Lighting $757,328 $378,664 $1,135,992 replace lighthing fixtures, daylight controls, ballast, required for removal + replacement of hazardous materials
Services - Exterior Lighting $38,324 $19,162 $57,486 replace exterior night time lighting fixtures required for egress and safety
Services - Fire Alarm $322,989 $161,495 $484,484 replacement for life safety Services - Intrusion Alarm $83,035 $41,518 $124,553 modify Security system- CCTV for safety Equipment - Seismic Bracing $64,133 $32,067 $96,200 seismically brace salvaged book stacks for life safety Other Building Construction - Life Safety -
Code Compliance
$609,180 $304,590 $913,770 update fire extinguisers, add exterior signage and wayfinding, replace elevators per code
Other Building Construction - ADA
Compliance
$543,400 $271,700 $815,100 upgrade/repair: main stair + railings, upgrade path of travel for accessibility + for life safety
Other Building Compliance - HAZMAT $1,132,560 $566,280 $1,698,840 hazardous material testing, remediation, encapsulation, removal and disposal
Construction Management $0 $0
Permits and Inspection fees $0 $0
Project Engineering, Environmental Review
other consultant fees
$0 $0
$0 $0
$0 $0
$0 $0
$0 $0
$0 $0
$0 $0
$0 $0
$0 $0
Total Supplies/Materials $8,378,535 $4,189,268 $12,567,803 Building Forward Library Infrastructure Grant Program 6 of 7 ATTACHMENT B 581
Part 7: Contingency
Contingency is limited 10% of the subtotal. Costs must be split between grant and local required match at the rate approved in the Intent to Fund letter.

Item Grant Funded Match Funded Total
Contingency $658,605 $329,303 $987,908
Total Contingency $658,605 $329,303 $987,908
Part 8: Totals
Subtotal
Item Grant Funded Match Funded Total
Subtotal $9,341,395 $4,670,698 $14,012,093
Grand Total
Item Grant Funding Match Funding Grand Total
Grand total $10,000,000 $5,000,000 $15,000,000
Review Check
Item Grant Funding Match Funding Status Check
Maximum Administration Costs $1,000,000 $500,000 Okay
Maximum Contingency Costs $934,140 $467,070 Okay
Minimum Allowable Match N/A $5,000,000 Okay
Building Forward Library Infrastructure Grant Program 7 of 7 ATTACHMENT B 582
Building Forward Library Infrastructure Grant Program
Implementation Plan
Part 1: Project
Grant Number:

Organization:

Library Jurisdiction:

Library Facility:

Project Title:

Part 2: Activities/Timeline
Using the table below, detail the major project activities or key milestones and when they will occur. Provide detail only for activities funded by the grant and matching funds.

Note: All grant activities must be completed within the grant period, beginning upon execution of the grant agreement and concluding by March 31, 2026.

Activity
Month Started
(Select from dropdown
list)
Month Completed
(Select from dropdown list)
Grant Approval by City Council Jan 2023 Feb 2023
Grant Agreement Processed Feb 2023 Mar 2023
Assessment Study- Programming- Schematic Design Apr 2023 Sep 2023 Design Development Oct 2023 Dec 2023
Construction Documents Dec 2023 Mar 2024
Permitting Mar 2024 Jun 2024
Bidding Jun 2024 Jul 2024
Construction Jul 2024 Dec 2025
Grant funding Expended Dec 2025 Jan 2026
Close out Grant Agreement Jan 2026 Mar 2026
Building Forward Library Infrastructure Grant Program 1 of 1 ATTACHMENT C 583
Resolution No.

STOCKTON CITY COUNCIL

APPROVE RESOLUTION ACCEPTING GRANT FUNDING FROM THE STATE OF CALIFORNIA BUDGET ACT OF 2021 (SB129) - CALIFORNIA STATE LIBRARY

BUILDING FORWARD INFRASTRUCTURE PROGRAM GRANT FOR THE CHAVEZ LIBRARY REMODEL PROJECT NO CL22001 IN THE AMOUNT OF $10,000,000,

EXECUTION OF THE GRANT DOCUMENTS FROM THE STATE OF CALIFORNIA BUDGET ACT OF 2021 (SB129), AND AMENDING THE FISCAL YEAR 2022-23

ANNUAL BUDGET
The Legislature and Governor of the State of California, through the California State Budget Act of 2021 (SB129, Chapter 69, Statutes of 2021) allocated $439 million in one-time funds to the California State Library to address life-safety and critical maintenance needs of public library facilities throughout California. The competitive grant focuses on prioritizing local libraries in high-poverty areas of the State of California; and The California State Library has full delegated authority and responsibility for the administration of the grant program, establishing necessary procedures; and Said procedures established by the California State Library require a resolution certifying the approval by the potential grantee’s governing board prior to execution of the grant agreement; and
The Cesar Chavez Library Remodel Project No CL22001 in the amount of $8,080,000 is included in the Fiscal Year 2021-2026 Adopted Capital Improvement Plan; and
The City Council approved motion 2022-03-22-1209 to authorize and ratify the City Manager application of a grant application for a California State Library Grant- the Building Forward Infrastructure Program for the Chavez Library Remodel Project; and The allocation of $5,000,000 in matching funds has been identified in the Strong Communities Expenditure Plan. $4,450,000 is available now, and the remainder will be authorized in the Fiscal Year 2023-24 Budget Approval Process; and In September 2022, the City of Stockton, on behalf of the Stockton-San Joaquin County Public Library System, received notification from the California State Library indicating that the grant application was accepted and is eligible to receive $10,000,000 in grant funding from the California State Library; and The City of Stockton proposes to implement the Chavez Library Remodel Project NO CL22001; and
584
The City of Stockton has the legal authority and is authorized to enter into a funding Agreement from the California State Library for the Cesar Chavez Central Library Remodel; now, therefore,

BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF STOCKTON, AS FOLLOWS:

1. The City Manager, or designee, is authorized to accept the grant award in the amount of $10,000,000 for the period through March 31, 2026, and make all necessary appropriations in compliance with and for the purposes of the grant application.

2. The City Manager, or designee, is authorized to execute the Grant Agreement, substantially similar to the draft attached as Exhibit 1, incorporated by this reference, and all related filings, agreements, and amendments as required by the California State Library, and accept all applicable terms and conditions, necessary and appropriate to carry out the purpose and intent of the grant award.

3. The City Manager, or designee, is authorized to submit any required documents, funding requests, and reports required to obtain grant funding.

4. Certifies that the project will comply with any laws and regulations including, but not limited to, the California Environmental Quality Act (CEQA), legal requirements for building codes, health and safety code, the California Labor Code, disabled access laws, and that prior to commencement of the project, all applicable permits will have been obtained.

5. The Fiscal Year 2022-23 Annual Budget is amended to appropriate $10,000,000 in grant revenues and expenditures for the Chavez Library Remodel Project No. CL22001.

6. The City Manager is hereby authorized to take whatever actions are necessary and appropriate to carry out the purpose and intent of this Resolution.

PASSED, APPROVED, and ADOPTED February 7, 2023 .

KEVIN J. LINCOLN II
ATTEST: Mayor of the City of Stockton
ELIZA R. GARZA, CMC
City Clerk of the City of Stockton
585

STATE FUNDED GRANTS

AWARD AGREEMENT AND

CERTIFICATE OF COMPLIANCE
DRAFT EXHIBIT 1 586
City of Stockton on behalf of the Stockton-San Joaquin
County Public Library
Cesar Chavez Central Library
2021-2022 BF-1-21-061

TABLE OF CONTENTS
PROJECT SUMMARY 2

PROCEDURES AND REQUIREMENTS
A. Term of the Agreement 3
B. Scope of Work 3
C. Budget Detail 3
D. Narrative and Financial Reports 4
E. Claim Form and Payment 5
EXHIBIT A: TERMS AND CONDITIONS 7
EXHIBIT B: ADDITIONAL TERMS AND CONDITIONS 22
EXHIBIT C: CERTIFICATION AND COMPLIANCE FORM 28
A. Certification 32
EXHIBIT D: STATE REIMBURSABLE TRAVEL EXPENSES 34
DRAFT EXHIBIT 1 587
City of Stockton on behalf of the Stockton-San Joaquin
County Public Library
Cesar Chavez Central Library
2021-2022 BF-1-21-061

PROJECT SUMMARY
Award Agreement between the California State Library and City of Stockton on behalf of the Stockton-San Joaquin County Public Library for the STOCKTON-SAN JOAQUIN COUNTY PUBLIC LIBRARY - Cesar Chavez Central Library project.

AWARD AGREEMENT NUMBER BF-1-21-061
This Award Agreement (“Agreement”) is entered into on the date of execution of the agreement by and between the California State Library (“State Library”) and City of Stockton on behalf of the Stockton-San Joaquin County Public Library (“Grantee”).

This Award Agreement pertains to Grantee’s State-funded project at the STOCKTON-SAN JOAQUIN COUNTY PUBLIC LIBRARY - Cesar Chavez Central Library.

The Library Development Services Bureau (“LDS”) of the State Library administers state and federal funds in the form of awards.

The Grantee was selected by the State Library to receive state grant funds in the amount of $10,000,000 through the process adopted by the State Library in administering such grants.

The State Library and the Grantee, for the consideration and under the conditions hereinafter set forth
DRAFT
in the Grant Agreement, agree as follows:

EXHIBIT 1 588
City of Stockton on behalf of the Stockton-San Joaquin
County Public Library
Cesar Chavez Central Library
2021-2022 BF-1-21-061

PROCEDURES and REQUIREMENTS
A. Term of the Agreement
The Grant term begins on the date of execution of the Agreement by both parties, until March 31, 2026. If completion of the project occurs prior to the end of the grant period this will be the end date of the term of this agreement. Grant eligible program expenditures may begin no earlier than the start date. The project period ends on March 31, 2026, and all grant project costs must be incurred by this date.

B. Scope of Work

1. Grantee agrees to perform all activities specifically identified in the Grantee’s submitted application and award packet.

2. The following activities and deliverables to be performed by the Grantee include, but are not limited to the following:
• Maintain and keep records of expenditures related to the grant that are consistent with Generally Acceptable Accounting Practices (GAAP). • Make financial records available to the State Library upon request. • Work with the State Library staff to assure that funds are disbursed in compliance with the purpose of the grant.
• Prepare and submit required narrative and financial reports. • Procure equipment, and other supplies as needed for the project. • Issue contracts for services, personnel, and consultants as needed for the project.
• If applicable, make payments for services, including for hours worked and travel reimbursements, to consultants and contractors.
• Oversee the implementation of project activities.

C. Budget Detail
The State Library shall provide the Grantee funding for the expenses incurred in performing the activities specified in the Grantee’s award packet documentation. The Grantee shall request the distribution of grant funding consistent with the approved project budget incorporated herein, and according to the payment schedule DRAFT EXHIBIT 1 589
City of Stockton on behalf of the Stockton-San Joaquin
County Public Library
Cesar Chavez Central Library
2021-2022 BF-1-21-061

specified in this Agreement. Under no circumstances shall payments exceed the total grant amount identified in this Agreement.

D. Reports

1. The Grantee shall be responsible for submission of interim and final narrative and financial reports on the progress and activities of the project, to the State Library, using the sample report documents provided by the State Library. Visual documentation (e.g. still or video photography) will be required as part of each Narrative Report.

2. All the reports must be current, include all required sections and documents, and must be approved by the Grant Monitor before any payment request can be processed. Failure to comply with the specified reporting requirements may be considered a breach of this Agreement and result in the termination of the Agreement or rejection of the payment request and/or forfeiture by the Grantee of claims for costs incurred that might otherwise have been eligible for grant funding. Any problems or delays must be reported immediately to the Grant Monitor. The financial reports shall reflect the expenditures made by the Grantee under the Agreement and may be incorporated into the same reporting structure as the narrative reports.

3. The reports shall be submitted by the following dates:

Reporting Period Report Due Date
Project start date
– March 2023
Financial Reports Due May 1, 2023
April 2023 -June
2023
Financial Reports, Expenditure Detail, and
Narrative Reports Due
July 31, 2023
July 2023 –
September 2023
Financial Reports Due October 31, 2023
October 2023-
December 2023
Financial Reports, Expenditure Detail, and
Narrative Reports Due
January 31, 2024
January 2024-
March 2024
Financial Reports Due April 30, 2024
April 2024 -June
2024
Financial Reports, Expenditure Detail, and
Narrative Reports Due
July 31, 2024
July 2024–
September 2024
Financial Reports Due October 31, 2024
DRAFT EXHIBIT 1 590
City of Stockton on behalf of the Stockton-San Joaquin
County Public Library
Cesar Chavez Central Library
2021-2022 BF-1-21-061

October 2024-
December 2024
Financial Reports, Expenditure Detail, and
Narrative Reports Due
January 31, 2025
January 2025-
March 2025
Financial Reports Due April 30, 2025
April 2025 -June
2025
Financial Reports, Expenditure Detail, and
Narrative Reports Due
July 31, 2025
July 2025–
September 2025
Financial Reports Due October 31, 2025
October 2025-
December 2025
Financial Reports, Expenditure Detail, and
Narrative Reports Due
January 30, 2026
January 2026-
March 2026
Final Financial, Narrative, and Expenditure
Reports Due
April 30, 2026

4. Failure to submit timely reports with the appropriate documentation by the due date may result in rejection of the payment request and/or forfeiture by the Grantee of claims for costs incurred that might otherwise have been eligible for grant funding.

5. The Grantee agrees to maintain records and supporting documentation pertaining to the performance of this grant, subject to possible audit for a minimum of five (5) years after final payment date or grant term end date, whichever is later. Please refer to Exhibit A, Terms and Conditions for more information.

E. Claim Form and Payment

1. The State Library shall provide the Grantee payment as outlined in the payment schedule only if all requirements for claiming the funds as outlined in this document have been met, and only for those activities and costs specified in the approved award packet documentation.

2. The Grantee shall complete, sign, and submit the Certification of Compliance form (Exhibit C) and the Financial Claim form (included in your award packet), to the State Library within 30 days of receiving this award packet. These forms will be issued, signed, and submitted using the online signature and agreement platform, DocuSign, unless DocuSign is unallowable or inconsistent with practices and policies of the local jurisdiction. If the use of DocuSign is not acceptable to the Grantee organization, please contact the grant monitor regarding alternate options.

DRAFT EXHIBIT 1 591
City of Stockton on behalf of the Stockton-San Joaquin
County Public Library
Cesar Chavez Central Library
2021-2022 BF-1-21-061

3. Any of the sums appearing under the categories in the approved budget may be adjusted with prior authorization from the State Library Grant Monitor. This would be to increase the allotment with the understanding that there will be corresponding decreases in the other allotments so that the total amount paid by the State Library to the Grantee under this Agreement shall not exceed the awarded amount, which shall be expended/encumbered during the grant period.

4. If the payment amount made by the State Library exceeds the actual expenses incurred during the term of this Agreement, as reflected in the financial reports to be filed by the Grantee, the Grantee shall immediately refund the excess payment amount to the State Library.

5. The Award payments will only be made to the Grantee. It is the Grantee’s responsibility to pay all contractors and subcontractors for purchased goods and services.

6. The Final Payment of 10% will be withheld and retained by the State Library (if applicable) until all conditions agreed upon in this Agreement have been satisfied.

7. Prompt Payment Clause
The State Library will make payments to the Grantee in accordance with the Prompt Payment Clause under Government Code, section 927, et. seq. The Grantee may typically expect payment within 45 days from the date a grant payment request is properly submitted and approved by the Grant Monitor.

8. Budget Contingency Clause
a. It is mutually agreed that if the Budget Act of the current fiscal year or any subsequent years covered under this Agreement does not appropriate sufficient funds for the program, this Agreement shall no longer be in full force and effect. In this event, the State Library shall have no liability to pay any funds whatsoever to the Grantee or to furnish any other considerations under this Agreement and the Grantee shall not be obligated to perform any provisions of this Agreement.
b. If funding for any fiscal year is reduced or deleted by the Budget Act for purposes of this Program, the State Library shall have the option to either cancel this Agreement with no liability occurring to itself or offer an Agreement amendment to the Grantee to reflect the reduced amount.

DRAFT EXHIBIT 1 592
City of Stockton on behalf of the Stockton-San Joaquin
County Public Library
Cesar Chavez Central Library
2021-2022 BF-1-21-061

EXHIBIT A: TERMS and CONDITIONS

1. Accessibility: The State is responsible for ensuring that public websites are accessible to both the general public and state employees, including persons with disabilities. Grantee shall assist the State in meeting its responsibility. Therefore, all project materials generated by state funded programs must meet the California Accessibility Standards. Additionally, all project materials designed, developed, and maintained shall be in compliance with the California Government Code, sections 7405 and 11135, and the Web Content Accessibility Guidelines 2.0, or a subsequent version, as published by the Web Accessibility Initiative of the World Wide Web Consortium at a minimum Level AA success criteria.

However, if for some reason project materials are not generated to be in compliance to meet these standards, please still submit it to the State Library. When submitting the material make sure to note that the material is not accessible by including “NOT ACCESSIBLE” in the file name.

The State Library reserves the right to post project materials to its website that are in compliance with these standards.

2. Acknowledgment: The State of California and the State Library shall be acknowledged in all promotional materials and publications related to the STOCKTON-SAN JOAQUIN COUNTY PUBLIC LIBRARY - Cesar Chavez Central Library Project.
a. Grant award recipients must ensure that the State of California receives full credit as the source of funds and that the California State Library, likewise, is acknowledged as the administrator.
b. Publications and information releases about the project must credit the State of California. An appropriate statement for a publication or project press release is:
“This [publication/project] was supported in whole or in part by funding provided by the State of California, administered by the California State Library.”
Grantees must include the above statement in any publications, vehicle wraps, and promotional materials, including websites. If space is limited the DRAFT EXHIBIT 1 593
City of Stockton on behalf of the Stockton-San Joaquin
County Public Library
Cesar Chavez Central Library
2021-2022 BF-1-21-061

State Library logo and the following shortened acknowledgement statement is acceptable:
“Funding provided by the State of California.”
This credit line on products of a project, such as materials, is important to foster support from the public, and state funding sources. c. California State Library Logo: Use of the State Library logo, which can be downloaded on the California State Library website, is required on any publication, vehicle wrap, or promotional material along with the above statement(s).
d. Project Photography: Photographs and videos are a great way to document your project. If obtaining still or video photography featuring members of the public, Grantees should obtain a photo release form. Grantees may use their organization’s image release form, or contact the State Library grant monitor for a sample image release form.

3. Agency: In the performance of this Agreement the Grantee and its agents and employees shall act in an independent capacity and not as officers, employees or agents of the State Library. The Grantee is solely responsible for all activities supported by the grant. Nothing in this Agreement creates a partnership, agency, joint venture, employment, or any other type of relationship between the parties. The Grantee shall not represent itself as an agent of the State Library for any purpose and has no authority to bind the State Library in any manner whatsoever.

4. Amendment: No amendment or variation of the terms of this Agreement shall be valid unless made in writing, signed by the parties, and approved as required.

No oral understanding or agreement not incorporated into this Agreement is binding on any of the parties. This Agreement may be amended, modified, or augmented by mutual consent of the parties, subject to the requirements and restrictions of this paragraph.

5. Applicable Law: The laws of the State of California shall govern all proceedings concerning the validity and operation of this Agreement and the performance of the obligations imposed upon the parties hereunder. The parties hereby waive any right to any other venue. The place where the Agreement is entered into and place where the obligation is incurred is Sacramento County, California.

6. Assignment, Successors, and Assigns: The Grantee may not assign this Agreement or delegate its performance to any third-party person or entity, either in whole or in part, without the State Library’s prior written consent. The provisions of this Agreement shall be binding upon and inure to the benefit of the State Library, the Grantee, and their respective successors and assigns.

DRAFT EXHIBIT 1 594
City of Stockton on behalf of the Stockton-San Joaquin
County Public Library
Cesar Chavez Central Library
2021-2022 BF-1-21-061

7. Audit and Records Access: The Grantee agrees that the State Library, the Department of General Services, the State Auditor, or their designated representatives shall have the right to review, audit, inspect and copy any records and supporting documentation pertaining to the performance of this Agreement. The Grantee agrees to maintain such records for possible audit for a minimum of five (5) years after the final payment, or grant term end date, whichever is later, unless a longer period of records retention is stipulated, or until completion of any action and resolution of all issues which may arise as a result of any litigation, dispute, or audit, whichever is later. The Grantee agrees to allow the auditor(s) access to such records during normal business hours and to allow interviews of any employees who might reasonably have information related to such records. Further, the Grantee agrees to include a similar right of the State to audit records and interview staff in any subcontract related to performance of this Agreement.

Examples of audit documentation may include, but not limited to, competitive bids, grant amendments, if any, relating to the budget or work plan, copies of any agreements with contractors or subcontractors if utilized, expenditure ledger, payroll register entries, time sheets, personnel expenditure summary form, travel expense log, paid warrants, contracts and change orders, samples of items and materials developed with grant funds, invoices and/or cancelled checks.

8. Authorized Representative: Grantee and the State Library mutually represent that their authorized representatives have the requisite legal authority to sign on their organization’s behalf.

9. Communication: All communications from either party, including an interim check-in at any time during the grant term, shall be directed to the respective grant monitor or representative of the California State Library or Grantee. For this purpose, the following contact information is provided below:

City of Stockton on behalf of the
Stockton-San Joaquin County Public
Library
Harry Black
605 N El Dorado St
Stockton, CA 95202
[email protected]
(209) 937-8212
California State Library
Libby Carlson
900 N Street
Sacramento, CA 95814]
[email protected]
(916) 603-6705

1. Confidentiality: Grantee will maintain as confidential any material it receives or produces that is marked Confidential or is inherently confidential or is protected by privilege. Grantee agrees to alert the State Library to this status in advance, DRAFT EXHIBIT 1 595
City of Stockton on behalf of the Stockton-San Joaquin
County Public Library
Cesar Chavez Central Library
2021-2022 BF-1-21-061

and State Library agrees to maintain this status in conformity with the Public Records Act.

2. Contractor and Subcontractors: Nothing contained in this Agreement or otherwise shall create any contractual relation between the State and any contractor or subcontractors, and no contract or subcontract shall relieve the Grantee of his or her responsibilities and obligations hereunder. The Grantee agrees to be as fully responsible to the State for the acts and omissions of its contractors, subcontractors, volunteers, student interns, and of persons either directly or indirectly employed by any of them as it is for the acts and omissions of persons directly employed by the Grantee. The Grantee’s obligation to pay its contractors and subcontractors is an independent obligation from the State’s obligation to make payments to the Grantee. As a result, the State shall have no obligation to pay or to enforce the payment of any monies to any contractor or subcontractor.

3. Copyright: Grantee owns and retains titles to any copyrights or copyrightable material from any original works that it creates within the scope of this Agreement in accordance with the federal Copyright Act. (17 U.S.C. 101, et seq.) Grantee is responsible for obtaining any necessary licenses, permissions, releases, or authorizations to use text, images, or other materials owned, copyrighted, or trademarked by third parties and for extending such licenses, permissions, releases, or authorizations to the State Library pursuant to this section. Also, the State Library may upload, post or transmit copyrighted material produced or purchased with grant funds on a State Library website for public access and viewing.

4. Discharge of Grant Obligations: The Grantee's obligations under this Agreement shall be deemed discharged only upon acceptance and approval of the final report by State Library. If the Grantee is a non-profit entity, the Grantee’s Board of Directors shall accept and certify as accurate the final report prior to its submission to California State Library.

5. Dispute Resolution: In the event of a dispute, Grantee will discuss the problem informally with the Grant Monitor. If unresolved, the Grantee shall file a written “Notice of Dispute” with the State Library Grant Monitor within ten (10) days of discovery of the problem. Within ten (10) days of receipt of the Notice of Dispute, the Grant Monitor shall meet with the Grantee for purposes of resolving the dispute. Any dispute arising under the terms of this Agreement which is not disposed of within a reasonable period of time, the Grantee may bring it to the attention of the State Librarian or the designated representative. The decision of the State Librarian or designated representative shall be final. Unless otherwise instructed by the Grant Monitor, the Grantee shall continue with its responsibilities under this Agreement during any dispute.

DRAFT EXHIBIT 1 596
City of Stockton on behalf of the Stockton-San Joaquin
County Public Library
Cesar Chavez Central Library
2021-2022 BF-1-21-061

6. Drug-free Workplace: The Grantee certifies under penalty of perjury under the laws of California, that the Grantee will comply with the requirements of the Drug-Free Workplace Act of 1990 (Gov. Code, § 8350 et. seq.) and will provide a drug-free workplace by taking the following actions:
a. Publish a statement notifying employees that unlawful manufacture, distribution, dispensation, possession or use of a controlled substance is prohibited and specifying actions to be taken against employees for violations.
b. Establish a Drug-Free Awareness Program to inform employees about all of the following:
1) The dangers of drug abuse in the workplace.
2) The Grantee’s policy of maintaining a drug-free workplace; 3) Any available counseling, rehabilitation and employee assistance programs.
4) Penalties that may be imposed upon employees for drug abuse violations.
c. Require that every employee who works on the project funded through this Agreement will:
1) Receive a copy of the Grantee’s drug-free workplace policy statement.
2) Agrees to abide by the terms of the Grantee’s statement as a condition of employment on the Agreement.

Failure to comply with these requirements may result in suspension of payments under the Agreement or termination of the Agreement or both and grantee may be ineligible for award of any future state agreements if the State Library determines that the grantee has made a false certification or violated the certification by failing to carry out the requirements as noted above.

7. Effectiveness of Agreement: This Agreement is of no force or effect until signed by both parties.

8. Entire Agreement: This Agreement supersedes all prior agreements, oral or written, made with respect to the subject hereof and, together with all attachments hereto, contains the entire agreement of the parties.

9. Exclusive Agreement: This is the entire Agreement between the State Library and Grantee.

10. Executive Order N-6-22-Russia Sanctions: The Grantee shall comply with Executive Order N-6-22 (the EO) regarding Economic Sanctions against Russia and Russian entities and individuals. “Economic Sanctions” refers to sanctions imposed by the U.S. government in response to Russia’s actions in Ukraine, as well DRAFT EXHIBIT 1 597
City of Stockton on behalf of the Stockton-San Joaquin
County Public Library
Cesar Chavez Central Library
2021-2022 BF-1-21-061

as any sanctions imposed under state law. The EO directs state agencies to terminate grant agreements with, and to refrain from entering any new grant agreements with, individuals or entities that are determined to be a target of Economic Sanctions. Accordingly, should the State determine Grantee is a target of Economic Sanctions or is conducting prohibited transactions with sanctioned individuals or entities, that shall be grounds for termination of this agreement. The State shall provide Grantee advance written notice of such termination, allowing Grantee at least 30 calendar days to provide a written response. Termination shall be at the sole discretion of the State.

11. Extension: The State Librarian or designee may extend the final deadline for good cause. The Grantee’s request for an extension of the grant period must be made in writing and received by the California State Library at least 30 days prior to the final deadline.

12. Failure to Perform: The grant being utilized by the Grantee is to benefit the STOCKTON-SAN JOAQUIN COUNTY PUBLIC LIBRARY - Cesar Chavez Central Library Project. If the Grant Monitor determines the Grantee has not complied with this Agreement, the Grantee may forfeit the right to reimbursement of any grant funds not already paid by the California State Library, including, but not limited to, the ten percent (10%) withheld.

13. Federal and State Taxes: The State Library shall not:
a. Withhold Federal Insurance Contributions Act (FICA) payments from Grantee’s payments or make FICA payments on the Grantee’s behalf; or
b. Make Federal or State unemployment insurance contributions on Grantee’s behalf; or
c. Withhold Federal or State income taxes from Grantee’s payments Grantee shall pay all taxes required on payments made under this Agreement including applicable income taxes and FICA.

14. Force Majeure: Neither the State Library nor the Grantee, its contractors, vendors, or subcontractors, if any, shall be responsible hereunder for any delay, default, or nonperformance of this Agreement, to the extent that such delay, default, or nonperformance is caused by an act of God, weather, accident, labor strike, fire, explosion, riot, war, rebellion, sabotage, flood, or other contingencies unforeseen by the State Library or the Grantee, its contractors, vendors, or subcontractors, and beyond the reasonable control of such party.

15. Forfeit of Grant Funds and Repayment of Funds Improperly Expended: If grant funds are not expended, or have not been expended, in accordance with this Agreement, the State Librarian or designee, at his or her sole discretion, may take appropriate action under this Agreement, at law or in equity, including DRAFT EXHIBIT 1 598
City of Stockton on behalf of the Stockton-San Joaquin
County Public Library
Cesar Chavez Central Library
2021-2022 BF-1-21-061

requiring the Grantee to forfeit the unexpended portion of the grant funds, including, but not limited to, the ten percent (10%) withhold, and/or to repay to the State Library any funds improperly expended.

16. Fringe Benefit Ineligibility: Grantee agrees that neither the Grantee nor its employees and contract personnel are eligible to participate in any employee pension, health benefit, vacation pay, sick pay or other fringe benefit plan of the State of California or the State Library.

17. Generally Accepted Accounting Principles: The Grantee is required to use Generally Accepted Accounting Principles in documenting all grant expenditures.

18. Grant Monitor: The Grant Monitor’s responsibilities include monitoring grant progress, and reviewing and approving Grant Payment Requests and other documents delivered to the California State Library pursuant to this Agreement.

The Grant Monitor may monitor Grantee performance to ensure Grantee expends grant funds appropriately and in a manner consistent with the terms and conditions contained herein. The Grant Monitor does not have the authority to approve any deviation from or revision to the Terms and Conditions (Exhibit A and B) or the Procedures and Requirements unless such authority is expressly stated in the Procedures and Requirements.

19. Grantee: The government or legal entity to which a grant is awarded and which is accountable to the State Library for the use of the funds provided. a. The grantee will make reports to the State Librarian in such form and containing such information as may be required to ensure the proper used of funds consistent with the grantee’s application, and award agreement and accompanying documentation submitted. The grantee will keep such records and afford such access as the State Library may find necessary to assure the correctness and verification of such reports.

20. Grantee Accountability: The Grantee is ultimately responsible and accountable for the manner in which the grant funds are utilized and accounted for and the way the grant is administered, even if the Grantee has contracted with another organization, public or private, to administer or operate its grant project. In the event an audit should determine that grant funds are owed to the State Library, the Grantee is responsible for repayment of the funds to the State Library.

21. Grantee Funds: It is mutually agreed that the Grantee is responsible for furnishing funds beyond the grant award that may be necessary to complete the project.

22. Independent Action: Grantee reserves the right to fulfill its obligations under this Agreement in an independent manner, at any location and at any time within the agreed-upon timeline. Grantee’s employees or contract personnel shall DRAFT EXHIBIT 1 599
City of Stockton on behalf of the Stockton-San Joaquin
County Public Library
Cesar Chavez Central Library
2021-2022 BF-1-21-061

perform all services required by this Agreement, but their time need not be devoted solely to fulfilling obligations under this Agreement. Grantee shall furnish all equipment and materials used to meet its obligations, and complete the Project. The State Library shall not provide any personnel or other resources beyond the grant award and is not required to provide training in connection with this Agreement.

23. Indemnification: Grantee agrees to indemnify, defend and save harmless the State of California, the State Library and its officers, employees, and agents, from any and all claims, losses, and liabilities accruing or resulting to any and all contractors, subcontractors, suppliers, laborers and any other person, firm or corporation furnishing or supplying work services, materials, or supplies in connection with the performance of this Agreement, and from any and all claims and losses accruing or resulting to any person, firm or corporation who may be injured or damaged by Grantee in the performance of this Agreement.

24. License to Use: The State Library reserves a fully paid-up, royalty-free, nonexclusive, sub-licensable and irrevocable license to reproduce, publish, prepare derivative works, distribute or otherwise use, and to authorize third parties to use, any material received or maintained by Grantee in connection with this Agreement. This includes intellectual property, with or without third-party rights. All such usages will be for public library and State governmental purposes:
a. The copyright in any work developed under this grant, sub-grant, or contract under this grant or sub-grant; and
b. Any rights of copyright to which a Grantee, sub-grantee, or a contractor purchases ownership with grant support.

25. Limitation of Expenditure: Expenditure for all projects must conform to the Grantee’s approved budget and with applicable State laws and regulations. The total amount paid by the State Library to the Grantee under this Agreement shall not exceed $10,000,000 and shall be expended/encumbered in the designated award period.

During the award period, the Grantee may find that the approved budget may need to be modified. Budget changes, requests for additional funds, or requests for reductions in award funding must be discussed with the assigned State Library Grant Monitor and a Grant Award Modification may be required to be submitted according to the instructions. Approval is by the State Librarian or their designee. Adjustments should be reported on the next financial report. Any adjustments in approved budgets must be documented and documentation retained in project accounts.

DRAFT EXHIBIT 1 600
City of Stockton on behalf of the Stockton-San Joaquin
County Public Library
Cesar Chavez Central Library
2021-2022 BF-1-21-061

26. Lobbying: Grantee confirms that the grant funds will not be used for the purposes of lobbying or otherwise attempting to influence legislation, as those purposes are defined by the U.S. Internal Revenue Code of 1986.

27. Non-Discrimination Clause: During this grant period, the Grantee and the Grantee’s contractors, and subcontractors shall not unlawfully discriminate, harass, or allow harassment against any employee or applicant for employment because of race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition, genetic information, marital status, sex, age, sexual orientation, or military and veteran status. Grantee shall insure that the evaluation and treatment of contractors, employees and applicants for employment are free from such discrimination and harassment.

Additionally, Grantee, contractors, and subcontractors, if applicable, shall comply with the provisions of the Fair Employment and Housing Act (Gov. Code §12900 et seq.), the regulations promulgated thereunder (Cal. Code Regs., tit. 2, §11000 et seq.), the provisions of Article 9.5, Chapter 1, Part 1, Division 3, Title 2 of the Government Code (Gov. Code §§ 11135-11139.5), and the regulations or standards adopted by the State Library to implement such article.

Grantee shall permit access by representatives of the Department of Civil Rights and the State Library upon reasonable notice at any time during the normal business hours, but in no case less than 24 hours’ notice, to such of its books, records, accounts, and all other sources of information and its facilities as said Department or the State Library shall require ascertaining compliance with this clause. Grantee, and its contractors, and subcontractors shall give written notice of their obligations under this clause to labor organizations with which they have a collective bargaining or other agreement. (See Cal. Code Regs., tit. 2, §11105.) Grantee shall include the non-discrimination and compliance provisions of this clause in all contracts and subcontracts to perform work under the Agreement.

28. Notices: All notices and other communications in connection with this Agreement shall be in writing, and shall be considered delivered as follows:
a. Electronic Mail (Email): When sent by e-mail to the last e-mail address of the recipient known to the party giving notice. Notice is effective upon transmission.
b. DocuSign (e-signature platform): When sent via DocuSign a notification will be sent to the last e-mail address of the recipient known to the party giving notice. Notice is effective upon transmission.
c. Grants Management System: When sent via / uploaded to the State Library Grants Management System, a notification will be sent to the last email address of the recipient known to the party giving notice. Notice is effective upon transmission.

DRAFT EXHIBIT 1 601
City of Stockton on behalf of the Stockton-San Joaquin
County Public Library
Cesar Chavez Central Library
2021-2022 BF-1-21-061

d. Personally: When delivered personally to the Grantee’s physical address as stated in this Agreement.
e. U.S. Mail: Five days after being deposited in the U.S. Mail, postage prepaid, and addressed to Grantee’s address as stated in this Agreement.

29. Order of Precedence: The performance of this Agreement shall be conducted in accordance with the Terms and Conditions, Procedures and Requirements, Certificate of Compliance, Project Summary, Implementation Plan, and Budget, of this Agreement, or other combination of exhibits specified on the Grant Agreement Coversheet attached hereto (collectively referred to as “Terms”).

Grantee’s State Library-approved Application (Grantee’s Application) is hereby incorporated herein by this reference. In the event of conflict or inconsistency between the articles, exhibits, attachments, specifications or provisions that constitute this Agreement, the following order of precedence shall apply:
a. Grant Agreement Coversheet and any Amendments thereto b. Terms and Conditions
c. Procedures and Requirements
d. Certificate of Compliance
e. Project Summary
f. Grantee’s approved outputs from the submitted application (including Budget and Implementation plan submitted as part of the required award documents)
g. All other attachments hereto, including any that are incorporated by reference.

30. Payment:
a. The approved Budget, if applicable, is attached hereto and incorporated herein by this reference and states the maximum amount of allowable costs for each of the tasks identified in the Implementation Plan submitted as part of the required award documents. The State Library shall provide funding to the Grantee for only the work and tasks specified in the list of approved outputs at only those costs specified in the Budget submitted as part of the required award documents and incurred in the term of the Agreement.
b. The Grantee shall carry out the work described in the Implementation Plan in accordance with the approved Budget and shall obtain the Grant Monitor’s written approval of any changes or modifications to the Implementation Plan, approved project outputs, or the approved Budget prior to performing the changed work or incurring the changed cost. If the Grantee fails to obtain such prior written approval, the State Librarian or DRAFT EXHIBIT 1 602
City of Stockton on behalf of the Stockton-San Joaquin
County Public Library
Cesar Chavez Central Library
2021-2022 BF-1-21-061

designee, at his or her sole discretion, may refuse to provide funds to pay for such work or costs.
c. The Grantee shall request funds in accordance with the funding schedule included in this Agreement.
d. Ten percent (10%) will be withheld from the Payment Request (if applicable) and paid at the end of the grant term, when all reports and conditions stipulated in this Agreement have been satisfactorily completed. Failure by the grantee to satisfactorily complete all reports and conditions stipulated in this Agreement may result in forfeiture of any such funds withheld.
e. Lodgings, Meals and Incidentals: Grantee’s eligible costs are limited to the amounts authorized in the California State Administrative Manual (see Exhibit C or contact the Grant Monitor for more information). f. Payment will be made only to the Grantee.
g. Reimbursable expenses shall not be incurred unless and until the Grantee receives a Notice to Proceed as described in the Procedures and Requirements.

31. Personal Jurisdiction: The Grantee consents to personal jurisdiction in the State of California for all proceedings concerning the validity and operation of this Agreement and the performance of the obligations imposed upon the parties.

Native American Tribal grantees expressly waive tribal sovereign immunity as a defense to any and all proceedings concerning the validity and operation of this Agreement and the performance of the obligations imposed upon the parties.

32. Personnel Costs: Any personnel expenditures to be paid for with grant funds must be computed based on actual time spent on grant-related activities and on the actual salary or equivalent hourly wage the employee is paid for their regular job duties, including a proportionate share of any benefits to which the employee is entitled.

33. Pledge: This Agreement shall not be interpreted to create any pledge or any commitment by the State Library to make any other or further grants or contributions to Grantee, or any other person or entity in connection with the Project. It is mutually agreed that Grantee is responsible for furnishing funds beyond the grant award that may be necessary to complete outcomes or deliverables.

34. Privacy Protection: Both parties agree to protect the confidentiality of any nonpublic, personal information that may be contained in materials received or produced in connection with this Agreement, as required by Civil Code, section 1798, et. seq.

DRAFT EXHIBIT 1 603
City of Stockton on behalf of the Stockton-San Joaquin
County Public Library
Cesar Chavez Central Library
2021-2022 BF-1-21-061

35. Prohibited Use: The expenditure under this program shall not be used to supplant Grantee efforts in other grant programs provided by the State Library.

36. Public Records Act: Material maintained or used by the State Library is considered “public record” under the Public Records Act (PRA) at Government Code, sections 6250, et. seq. This includes the Interim and Final reports, and any other written communications between the parties. Grantee agrees to ensure that all content contained in its written reports are appropriate for publication.

Said material, along with all other reports, documentation and data collected during the term of the Agreement, will be subject to disclosure unless it qualifies for exemption under the PRA in whole or in part. Grantee agrees to alert the State Library as to a basis for exemption, if any exists.

37. Publicity Obligations: Grantee will notify the State Library of any promotional materials or publications resulting from the grant no later than five (5) days in advance of distribution, whether they are print, film, electronic, or in any other format or medium. Copies of all promotional materials will be provided to the State Library. Grantee will acknowledge the State Library’s support as noted above. Grantee agrees that the State Library may include information about this grant and its outcomes in its own annual reports, with specific reference to Grantee, and may distribute such information to third parties.

38. Records: Communications, grant related documents, data, original receipts, and invoices must be maintained by Grantee and shall be made available to the State Library upon request. Grantee agrees to maintain adequate grant program records and adequate financial records consistent with generally accepted accounting practices, and to retain all records for at least five (5) years after the end-of-term. The State Library may monitor or conduct an onsite evaluation of Grantee’s operation to ensure compliance with this Agreement, with reasonable advance notice.

39. Reduction of Waste: In the performance of this Agreement, Grantee shall take all reasonable steps to ensure that materials purchased or utilized in the course of the project are not wasted. Steps should include, but not be limited to: the use of used, reusable, or recyclable products; discretion in the amount of materials used; alternatives to disposal of materials consumed; and the practice of other waste reduction measures where feasible and appropriate.

40. Reimbursement Limitations: Under no circumstances shall the Grantee seek reimbursement pursuant to this Agreement for a cost or activity that has been or will be paid for through another funding source. The Grantee shall not seek reimbursement for any costs used to meet cost sharing or matching requirements of any other State Library funded program.

DRAFT EXHIBIT 1 604
City of Stockton on behalf of the Stockton-San Joaquin
County Public Library
Cesar Chavez Central Library
2021-2022 BF-1-21-061

41. Reports and Claims: It is the responsibility of the grantee make the required reports and claims to the California State Library.
a. The Grantee shall be responsible for submitting to the State Library Narrative Reports detailing progress and activities. The reports are due on the dates specified in the reporting schedule detailed in the Procedures and Requirements section.
b. The Grantee shall be responsible for submitting to the State Library Financial Reports reflecting Grantee expenditure activity. The reports are due on the dates specified in the reporting schedule detailed in the Procedures and Requirements section.
c. To obtain payment hereunder, the Grantee shall submit authorized claims provided by the State Library for that purpose, on each of the following mentioned dates for payment, and the State Library agrees to reimburse the Library as soon thereafter as State fiscal procedures will permit. d. The final 10% of the grant award (if applicable) is payable only upon approval of all reports and receipt of claim form. Failure to provide timely reports is a serious breach of an award recipient’s administrative duty under the award.
e. Payment will be provided to cover the expenditures incurred by the Grantee for the project in the following manner:
1) $5,000,000 upon the receipt and approval, by the State Library, of the submission of all required documents as stated in the award letter; execution of the agreement, certification, and claim form by the Grantee organization.
2) The second payment in the amount of $4,000,000 after the submission and approval of the January 31, 2024 report and receipt, by the State Library, of a completed claim form unless:
i. The grantee needs the funding prior to the January date in order for the project to progress. To obtain funding prior to January 31, 2024, the grantee must provide documentation to the grant monitor demonstrating effectively either (a) that the first award payment has been spent, or (b) why the second installment is needed in advance of the scheduled payment. ii. The grantee’s January 31, 2024, financial report demonstrates that they have not spent any of their initial payment. The second payment will be held until the Grantee demonstrates effectively that their project is moving forward and additional funding is needed.
3) A final payment in the amount of $1,000,000 will be made upon submission and approval of the final interim grant report and financial claim form.

DRAFT EXHIBIT 1 605
City of Stockton on behalf of the Stockton-San Joaquin
County Public Library
Cesar Chavez Central Library
2021-2022 BF-1-21-061

42. Self-Dealing and Arm’s Length Transactions: All expenditures for which reimbursement pursuant to this Agreement is sought shall be the result of arm’slength transactions and not the result of, or motivated by, self-dealing on the part of the Grantee or any employee or agent of the Grantee. For purposes of this provision, “arm’s-length transactions” are those in which both parties are on equal footing and fair market forces are at play, such as when multiple vendors are invited to compete for an entity’s business and the entity chooses the lowest of the resulting bids. “Self-dealing” is involved where an individual or entity is obligated to act as a trustee or fiduciary, as when handling public funds, and chooses to act in a manner that will benefit the individual or entity, directly or indirectly, to the detriment of, and in conflict with, the public purpose for which all grant monies are to be expended.

43. Severability: If any part of this Agreement is found to be unlawful or unenforceable, such provisions will be voided and severed from this Agreement, but the remainder of the provisions in the Agreement will remain in full force and effect.

44. Site Visits: The Grantee shall allow the State Library to access and conduct site visits, with reasonable notice, at which grant funds are expended and related work being performed at any time during the performance of the work and for up to ninety (90) days after completion of the work, or until all issues related to the grant project have been resolved. A site visit may include, but not be limited to, monitoring the use of grant funds, providing technical assistance when needed, and visiting the State funded project.

45. Termination: The Agreement shall be subject to termination by the State Librarian or designee upon notice to the Grantee at least thirty (30) days prior to the effective date of termination. In the event this Agreement is terminated, the Grantee shall deliver to the State Librarian copies of all reports, accounting, data, and materials prepared up to the date of termination. The State Librarian shall determine and pay the Grantee for necessary and appropriate expenditures and obligations up to the date of termination which have not been covered by prior installments previously paid to the Grantee. Upon such termination, the unused portion of the grant award must be returned to the State Library within 45 days. If funding has been advanced to the Grantee, any unobligated balances, as determined by the State Librarian, shall be returned to the State Library within 45 days of the notice of termination.

46. Timeline: Time is of the essence to this Agreement. It is mutually agreed between the parties that the Budget and the implementation plan included therein are part of the Agreement.

DRAFT EXHIBIT 1 606
City of Stockton on behalf of the Stockton-San Joaquin
County Public Library
Cesar Chavez Central Library
2021-2022 BF-1-21-061

47. Unused Funds: At the end-of-term Grantee agrees to return any unexpended or unaccounted for funds to the State Library, or to submit a written request for an extension of the grant period. Funds will be considered unexpended or unaccounted if they were: (1) not used for their intended purpose, or (2) used inconsistent with the terms of this Agreement.

Funds will also be considered unaccounted for, and must be returned, if the proposal outcomes or deliverables are materially incomplete by the end-of-term or earlier termination, as determined by the State Library in its sole discretion.

48. Waiver of Rights: The State Library shall not be deemed to have waived any rights under this Agreement unless such waiver is given in writing and signed by State Library. No delay or omission on the part of State Library in exercising any rights shall operate as a waiver of such right or any other right. A waiver by State Library of a provision of this Agreement shall not prejudice or constitute a waiver of State Library’s right otherwise to demand strict compliance with that provision or any other provision of this Agreement. No prior waiver by California State Library, nor any course of dealing between the State Library and Grantee, shall constitute a waiver of any of State Library’s rights or of any of Grantee’s obligations as to any future transactions. Whenever the consent of State Library is required under this Agreement, the granting of such consent by State Library in any instance shall not constitute continuing consent to subsequent instances where such consent is required and in all cases such consent may be granted or withheld in the sole discretion of the State Library.

49. Work Products: Grantee shall provide the State Library with copies of all final products identified in the Work Plan and Application. Grantee shall also provide the State Library with copies of all public education and advertising material produced pursuant to this Agreement.

50. Worker’s Compensation: The State of California will not provide Workers’ Compensation insurance for Grantee or Grantee’s employees or contract personnel. If Grantee hires employees to perform services required by this Agreement, Grantee shall provide Workers’ Compensation insurance for them.

The Grantee is aware of Labor Code Section 3700, which requires every employer to be insured against liability for Workers’ Compensation or to undertake self-insurance in accordance with the Labor Code, and the Grantee agrees to comply with such provisions before commencing the performance of the work of this Agreement.

DRAFT EXHIBIT 1 607
City of Stockton on behalf of the Stockton-San Joaquin
County Public Library
Cesar Chavez Central Library
2021-2022 BF-1-21-061

EXHIBIT B: ADDITIONAL TERMS AND CONDITIONS

1. California Building Codes: Activities funded under this Agreement, regardless of funding source, must be in compliance with all applicable California Building Codes (Cal Code Regs., Title 24).

2. California Environmental Quality Act: Activities funded under this Agreement, regardless of funding source, must be in compliance with the California Environmental Quality Act (CEQA) (Public Resources Code section 21000 et seq.).

Information on CEQA may be found in the California State Clearinghouse Handbook.

3. Changes in a project: Any proposed change in the project requested by the Grantee, which would change the information provided during the application process, requires approval from the State Librarian prior to execution. The State Librarian shall have the sole authority to determine if a proposed change by the Grantee is approved or not approved. The State Librarian's decision is final and binding.

4. Compliance with Laws; Consents and Approvals: Grantee will comply with all applicable laws, ordinances, rules and regulations of federal, state and local governments and agencies having jurisdiction over either the Grantee, the Property, or the project, and with all applicable directions, rules and regulations of the Fire Marshal, health officer, building inspector and other officers of any such government or agency. All permits, consents, permissions and licenses required by any federal, state or local government or agency to which Recipient, the Property, or the Infrastructure Project is subject, which may be necessary in relation to this Agreement, development, construction or ownership of the Infrastructure Project, at or prior to the commencement of construction, have been, or will be, obtained, and none of such consents, permissions and licenses are subject to appeal or to conditions which have not been met.

5. Contractors and Subcontractor: For the performance of all construction work on the Project, Grantee agrees to use a licensed general contractor or contractors (“Contractor”), in good standing, in order to complete the work described in the grant application. The Grantee hereby certifies that the Contractor is in good DRAFT EXHIBIT 1 608
City of Stockton on behalf of the Stockton-San Joaquin
County Public Library
Cesar Chavez Central Library
2021-2022 BF-1-21-061

standing with the California State Contractors' License Board. The Grantee shall only contract with contractors who are licensed and shall ensure that the Contractor and any successor thereto shall only contract with subcontractors, that are also so licensed.

6. Contractor Insurance/Bond: Grantees shall be responsible for ensuring that any contractors/subcontractors hired for grant-funded work have all relevant bonds and insurance in place in compliance with prevailing wage and other applicable state and federal laws, the Department of Industrial Relations, and the Department of Consumer Affairs Contractors State License Board requirements.

Insurance:
a. Casualty Insurance
i. The Contractor shall procure and maintain insurance on all of its operations with companies acceptable to the State as follows:
1) The Contractor shall keep all insurance in full force and effect from the beginning of the work through contract acceptance.
2) The Contractor shall maintain completed operations coverage with a carrier acceptable to the State through the expiration of the patent deficiency in construction statute of repose set forth in Code of Civil Procedure Section 337.1.
b. Workers’ Compensation and Employer’s Liability Insurance i. In accordance with Labor Code Section 1860, the Contractor shall secure the payment of worker's compensation in accordance with Labor Code Section 3700.
ii. In accordance with Labor Code Section 1861, the Contractor shall submit to the Grantee the following certification before performing the work:
1) I am aware of the provisions of Section 3700 of the Labor Code which require every employer to be insured against liability for workers' compensation or to undertake self-insurance in accordance with the provisions of that code, and I will comply with such provisions before commencing the performance of the work of this contract. iii. Contract execution constitutes certification submittal. iv. The Contractor shall provide Employer's Liability Insurance in amounts not less than:
1) $1,000,000 for each accident for bodily injury by accident 2) $1,000,000 policy limit for bodily injury by disease 3) $1,000,000 for each employee for bodily injury by disease v. If there is an exposure of injury to the Contractor's employees under the U.S.

Longshoremen's and Harbor Workers' Compensation Act, the Jones Act, or DRAFT EXHIBIT 1 609
City of Stockton on behalf of the Stockton-San Joaquin
County Public Library
Cesar Chavez Central Library
2021-2022 BF-1-21-061

under laws, regulations, or statutes applicable to maritime employees, coverage shall be included for such injuries or claims. c. General Liability Insurance
i. The Contractor shall carry General Liability and Umbrella or Excess Liability Insurance covering all operations by or on behalf of the Contractor providing insurance for bodily injury liability and property damage liability for the following limits and including coverage for:

A. Premises, operations, and mobile equipment
B. Products and completed operations
C. Broad form property damage (including completed operations) D. Explosion, collapse, and underground hazards
E. Personal injury
F. Contractual liability
ii. The Contractor shall not require certified Small Business subcontractors to carry Liability Insurance that exceeds the limits in Section (d)(i), "Liability Limits/Additional Insureds," of these specifications. The maximum required Liability Insurance limits in Section (d)(i), "Liability Limits/Additional Insureds," of these specifications shall apply to certified Small Business subcontractors for work performed on the project, regardless of tier. The provisions of Section (d)(i), "Liability Limits/Additional Insureds," shall be included in all subcontracts for all tiers.

Public works construction projects, as defined in Labor Code Section 1720 et seq, must meet prevailing wage requirements. California law requires that workers are not paid less than the general prevailing rate of per diem wages on public works projects.
d. LIABILITY LIMITS/ADDITIONAL INSUREDS
i. The limits of liability shall be at least the amounts shown in the following table:

DRAFT EXHIBIT 1 610
City of Stockton on behalf of the Stockton-San Joaquin
County Public Library
Cesar Chavez Central Library
2021-2022 BF-1-21-061

Construction
Contract
Amount 4
For Each
Occurrence1
Aggregate for
Products/
Completed
Operation
General
Aggregate2
Umbrella or
Excess
Liability3
≤$1,000,000 $1,000,000 $2,000,000 $2,000,000 $5,000,000 >$1,000,000
≤$15,000,000 $1,000,000 $2,000,000 $2,000;000 $10,000,000 >$15,000,000
≤$25,000,000 $2,000,000 $2,000,000 $4,000,000 $15,000,000 >$25,000,000 $2,000,000 $2,000,000 $4,000,000 $25,000,000

1. Combined single limit for bodily injury and property damage.

2. This limit shall apply separately to the Contractor's work under this contract.

3. The umbrella or excess policy shall contain a clause stating that it takes effect (drops down) in the event the primary limits are impaired or exhausted. "Construction Contract Amount" is the total amount of the construction contract all or a portion of which is funded with Building Forward Grant funds.

7. Delay: Grantee shall promptly notify the State Library in writing of any event causing delay or interruption of the project beyond the scheduled implementation plan timeline. The notice shall specify the work delayed and the cause and period of each delay.

8. Documentation: Grantees shall provide to the State Library photographic documentation of the project site prior to the start of the project, during the project, and upon completion of the project.

9. Grantee’s Responsibility: Grantee and its representatives shall:
a. Faithfully and expeditiously perform or cause to be performed all project work as described in the application, timeline/activities, and budget submitted by the Grantee.
b. Accept and agree to comply with all terms, provisions, conditions, and written commitments of this Agreement, including all incorporated documents, and to fulfill all assurances, declarations, representations, and statements made by Grantee in the application, documents, amendments, and communications filed in relation to the grant funds.
c. Comply with all applicable California laws and regulations. d. Implement the project in accordance with applicable provisions of the law. e. Fulfill their obligations under the Agreement and be responsible for the performance and completion of the project.
f. Follow all applicable local, state and/or federal laws pertaining to the expenditure of funds.

DRAFT EXHIBIT 1 611
City of Stockton on behalf of the Stockton-San Joaquin
County Public Library
Cesar Chavez Central Library
2021-2022 BF-1-21-061

g. Retain any bid, contracts, and any other pertinent documentation. Likewise, all local, state, and federal permits required for construction projects must be acquired by the grantee and retained for a period of five (5) years after the end of the grant period.

10. Inspection of the Project: The State Library shall have the right to inspect the project during the grant term. Grantee shall deliver to the State Library any inspection reports prepared, to the extent available to the Grantee. Inspection of the project shall be for the sole purpose of protecting the State of California’s interest and is not to be construed as a representation by the State Library that there has been compliance with plans or that the project will be free of faulty materials or workmanship. The Grantee can make or cause to be made such other independent inspections as the Grantee may desire for its own protection.

11. Interest: Any interest earned on grant funds held by the Grantee shall be contributed to the STOCKTON-SAN JOAQUIN COUNTY PUBLIC LIBRARY - Cesar Chavez Central Library Project. Interest funds cannot be used as local matching funds.

12. Maintenance and Operation: The Grantee is responsible for ensuring that grant projects funded by the State of California are maintained and operated in the same condition as when the project was completed; normal wear and tear is accepted.

Maintenance and operations standards should be adopted upon completion of the project.

13. Matching Funds: Per the Budget Act of 2021 (Chapter 69, Statutes of 2021, Item 6120-161-0001 1d) Grantees shall be required to match state funds on a dollar-fordollar basis. The State Library may reduce the amount of required matching funds if the requesting local library jurisdiction can demonstrate that it is eligible and financially unable to provide the required matching funds. Upon receipt and assessment of a reduction request, the State Library may lower the match requirement, as follows:
a. For each library with local operating include per capita (LIPC) of more than $40, no reduction in local match is allowed
b. For reach library with an LIPC between $40 and $15.01, the local match may be reduced by half.
c. For each library with an LIPC of $15 of less, the local match may be eliminated.

14. Permits, Licenses, Approvals, and Legal Obligations: Grantee shall be responsible for obtaining any and all permits, licenses, and approvals required for performing any work under this Grant Agreement, including those necessary to perform design, construction, or operation and maintenance of the Project(s). Grantee shall be responsible for observing and complying with any applicable federal, state, and local laws, rules or regulations affecting any such work, specifically those including, DRAFT EXHIBIT 1 612
City of Stockton on behalf of the Stockton-San Joaquin
County Public Library
Cesar Chavez Central Library
2021-2022 BF-1-21-061

but not limited to, environmental, procurement, and safety laws, rules, regulations, and ordinances. Grantee shall be prepared to provide copies of permits and approvals to the State Library should the State Library request copies.

15. Relationship of Parties: If applicable, Grantee is solely responsible for design, construction, and operation and maintenance of projects within the project application and implementation plan. Review or approval of plans, specifications, bid documents, or other construction documents by State is solely for the purpose of proper administration of funds by State and shall not be deemed to relieve or restrict responsibilities of Grantee under this Grant Agreement.

16. Use of Funds: Grantee agrees that the grant funds shall be expended only in accordance with the applicable statutes and Grant Guidelines governing the Program, and only for the purposes and activities set forth in this Agreement and the Grantee’s approved outputs, budget, and implementation plan completed as part of the award packet documentation. The grant funds shall be used exclusively for the payment of, or reimbursement for, approved costs as shown in the project budget completed as part of the award packet documentation or the amended budget as approved in writing by the State Library. Such payment of costs to be made only after the costs have been incurred by the Grantee. “Approved Costs” shall mean all hard and soft eligible costs under the project (and modifications thereto), which were approved, or will be approved by the State Library, which are needed for the completion of the project, in accordance with application.

17. Use of site: The facility, or the part thereof, acquired, constructed, or remodeled, upgraded, or rehabilitated with funds received as part of the Building Forward grant program will be dedicated to public library service and used as a public library according to the Education Code, sections 18010 through 20092 and California Code of Regulations, Title 5, Division 2 and provide at least the following: an organized collection of printed or other library materials, or a combination thereof; paid staff; and regularly scheduled hours for being open to the public for a period of not less than 10 years following completion of the grant period.

18. Withdrawal of a Project: If it is determined by the grant recipient that a project cannot be completed within the scope of the approved application, the project may be withdrawn by the Grantee prior to the completion of fifty percent of the project. Upon withdrawal of a project, all unspent funding must be returned to the State Library along with a completed detailed expenditure form showing how any unreturned funds were spent.

DRAFT EXHIBIT 1 613
City of Stockton on behalf of the Stockton-San Joaquin
County Public Library
Cesar Chavez Central Library
2021-2022 BF-1-21-061

EXHIBIT C: CERTIFICATION OF COMPLIANCE FORM

1. AUTHORIZED REPRESENTATIVE: I certify that the authorized representative named below is the legally designated representative of the Grantee for this Grant Agreement and project and is authorized to receive and expend funds in order to implement this grant-funded project.

I certify that all information provided to the California State Library for review in association with this award is correct and complete to the best of my knowledge, and as the authorized representative of the Grantee, I commit to the conditions of this award, and I have the legal authority to do so.

I certify that any or all other participants or contractors in the grant-funded project have agreed to the terms of the Award Agreement and have entered into an agreement(s) concerning the final disposition of equipment, facilities, and materials purchased for this project from the funds awarded for the activities and services described in the attached award packet, as approved and/or as amended by the California State Librarian.

I certify that I have reviewed and understand the list of unallowable costs and that my project does not contain any of the unallowable costs listed.

The authorized representative, on behalf of the Grantee, certifies that the Grantee will comply with all applicable requirements of State and Federal laws, regulations, and policies governing this project, to include the requirements listed below in this Certification of Compliance Form.

2. The authorized representative, on behalf of the Grantee, hereby certifies to the California State Library, for an award of funds in the amount $10,000,000. This award will fund library facility improvements as set forth in the list of approved outcomes, Implementation Plan and Budget as approved and/or as amended by the California State Librarian.

3. The authorized representative, on behalf of the Grantee, hereby certifies that City of Stockton on behalf of the Stockton-San Joaquin County Public Library will provide a cash match in the amount of $5,000,000. The matching funds (if applicable) will be expended during the grant period at the same rate as the state-provided grant funds.

DRAFT EXHIBIT 1 614
City of Stockton on behalf of the Stockton-San Joaquin
County Public Library
Cesar Chavez Central Library
2021-2022 BF-1-21-061

4. The authorized representative, on behalf of the Grantee, hereby certifies that the project property, or a part thereof, will be dedicated to public library services and used as a public library according to the Education Code, sections 18010 through 20092 and California Code of Regulations, Title 5, Division 2 and provide at least the following: an organized collection of printed or other library materials, or a combination thereof; paid staff; and regularly scheduled hours for being open to the public for a period of not less than 10 years following completion of the grant period.

5. STATEMENT OF COMPLIANCE: Grantee has, unless exempted, complied with the non-discrimination program requirements. (Gov. Code §12990 (a-f) and CCR, Title 2, Section 11102).

6. DRUG-FREE WORKPLACE REQUIREMENTS: Grantee will comply with the requirements of the Drug-Free Workplace Act of 1990 and will provide a drug-free workplace by taking the following actions:
a. Publish a statement notifying employees that unlawful manufacture, distribution, dispensation, possession or use of a controlled substance is prohibited and specifying actions to be taken against employees for violations. b. Establish a Drug-Free Awareness Program to inform employees about:
1) the dangers of drug abuse in the workplace;
2) the person's or organization's policy of maintaining a drug-free workplace; 3) any available counseling, rehabilitation and employee assistance programs; and,
4) penalties that may be imposed upon employees for drug abuse violations. c. Every employee who works on the proposed Agreement will:
1) receive a copy of the company's drug-free workplace policy statement; and, 2) agree to abide by the terms of the company's statement as a condition of employment on the Agreement.

Failure to comply with these requirements may result in suspension of payments under the Agreement or termination of the Agreement or both and Grantee may be ineligible for award of any future State agreements if the department determines that any of the following has occurred: the Grantee has made false certification or violated the certification by failing to carry out the requirements as noted above. (Gov. Code § 8350 et. seq.)

7. CONFLICT OF INTEREST: Grantee needs to be aware of the following provisions regarding current or former state employees. If Grantee has any questions on the status of any person rendering services or involved with the Agreement, the California State Library must be contacted immediately for clarification.

Current State Employees (Pub. Contract Code § 10410):

DRAFT EXHIBIT 1 615
City of Stockton on behalf of the Stockton-San Joaquin
County Public Library
Cesar Chavez Central Library
2021-2022 BF-1-21-061

a. No officer or employee shall engage in any employment, activity or enterprise from which the officer or employee receives compensation or has a financial interest, and which is sponsored or funded by any state agency, unless the employment, activity or enterprise is required as a condition of regular state employment.
b. No officer or employee shall contract on his or her own behalf as an independent contractor with any state agency to provide goods or services.

Former State Employees (Pub. Contract Code § 10411):
a. For the two-year period from the date he or she left state employment, no former state officer or employee may enter into a contract in which he or she engaged in any of the negotiations, transactions, planning, arrangements or any part of the decision-making process relevant to the contract while employed in any capacity by any state agency.
b. For the twelve-month period from the date he or she left state employment, no former state officer or employee may enter into a contract with any state agency if he or she was employed by that state agency in a policy-making position in the same general subject area as the proposed contract within the 12-month period prior to his or her leaving state service.

If Grantee violates any provisions of above paragraphs, such action by Grantee shall render this Agreement void. (Pub. Contract Code § 10420).

Members of boards and commissions are exempt from this section if they do not receive payment other than payment of each meeting of the board or commission, payment for preparatory time and payment for per diem. (Pub. Contract Code § 10430 (e)).

8. LABOR CODE/WORKERS' COMPENSATION: Grantee needs to be aware of the provisions which require every employer to be insured against liability for Worker's Compensation or to undertake self-insurance in accordance with the provisions, and Grantee affirms to comply with such provisions before commencing the performance of the work of this Agreement. (Labor Code § 3700).

9. AMERICANS WITH DISABILITIES ACT: Grantee assures the State that it complies with the Americans with Disabilities Act (ADA) of 1990, which prohibits discrimination on the basis of disability, as well as all applicable regulations and guidelines issued pursuant to the ADA. (42 U.S.C. 12101 et. seq.)

10. RESOLUTION: A county, city, district, or other local public body must provide the State Library with a copy of a resolution, order, motion, or ordinance of the local governing body which by law has authority to enter into an agreement, authorizing execution of the agreement.

DRAFT EXHIBIT 1 616
City of Stockton on behalf of the Stockton-San Joaquin
County Public Library
Cesar Chavez Central Library
2021-2022 BF-1-21-061

11. PAYEE DATA RECORD FORM STD. 204: This form must be completed by all Grantees that are not another state agency or other governmental entity.

12. DRUG FREE WORKPLACE:
a. Continue to provide a drug-free workplace by complying with the requirements in 2 C.F.R. part 3186 (Requirements for Drug-Free Workplace (Financial Assistance)). In particular, the recipient must comply with drug- free workplace requirements in subpart B of 2 C.F.R. part 3186, which adopts the Governmentwide implementation (2 C.F.R. part 182) of sections 5152-5158 of the Drug-Free Workplace Act of 1988 (P. L. 100-690, Title V, Subtitle D; 41 U.S.C. §§ 701-707). b. This includes but is not limited to: making a good faith effort, on a continuing basis, to maintain a drug-free workplace; publishing a drug-free workplace statement; establishing a drug-free awareness program for the employees; taking actions concerning employees who are convicted of violating drug statutes in the workplace.

13. ACCESSIBILITY: The organization receiving this award, as listed in the certification section below, and all project staff, will ensure all project materials will meet California accessibility standards.

14. NON-DISCRIMINATION: The organization receiving this award, as listed in the certification section below, and all project staff, agree to comply with all California non-discrimination laws.

15. ACKNOWLEDGEMENT: The organization receiving this award, as listed in the certification section below, and all project staff, agree to comply with California State Library acknowledgement requirements.

DRAFT EXHIBIT 1 617
City of Stockton on behalf of the Stockton-San Joaquin
County Public Library
Cesar Chavez Central Library
2021-2022 BF-1-21-061

Certification

ORGANIZATION
Name: Address (official and complete):

PROJECT COORDINATOR
Name:

Email: Phone:

GRANTEE AUTHORIZED REPRESENTATIVE
Name: Title:

Email: Phone:

Signature: Date:

DRAFT EXHIBIT 1 618
City of Stockton on behalf of the Stockton-San Joaquin
County Public Library
Cesar Chavez Central Library
2021-2022 BF-1-21-061

Authorized Representative Signature

ORGANIZATION
Name: Address (official and complete):

AUTHROIZED REPRESENTATIVE
Signature: Date: Click or tap here to enter text.

Printed Name of Person Signing: Title:

STATE OF CALIFORNIA
Agency Name: California State Library Address: 900 N Street, Sacramento, CA 95814 Signature: Date:

Printed Name of Person Signing: Title: California State Librarian DRAFT EXHIBIT 1 619
City of Stockton on behalf of the Stockton-San Joaquin
County Public Library
Cesar Chavez Central Library
2021-2022 BF-1-21-061

EXHIBIT D: STATE REIMBURSABLE TRAVEL EXPENSES
Rates are subject to change per State of California, Department of Human Resources Please Check State of California, Department of Human Resources Website for updated expenses:
http://www.calhr.ca.gov/employees/pages/travel-reimbursements.aspx Mileage:

Rate subject to change
$0.585 per mile – approved business/travel expense
Meals:

Receipts are required
$7.00 – Breakfast
$11.00 – Lunch
$23.00 – Dinner
$5.00 - Incidentals
Meals Note: Lunch can only be claimed if travel is more than 24 hours. Incidental charge may be claimed once for every 24-hour period and should cover incidental expenses, such as but not limited to, tip, baggage handling, etc.

Hotel:

Receipts are required
and MUST have a zero
balance.
$ 90.00 plus tax for all counties/cities not listed below $ 95.00 plus tax for Napa, Riverside, and Sacramento
Counties
$ 110.00 plus tax for Marin County
$ 120.00 plus tax for Los Angeles, Orange, and Ventura
Counties, and Edwards AFB. Excluding the city of Santa
Monica
$ 125.00 plus tax for Monterey and San Diego Counties
$ 140.00 plus tax for Alameda, San Mateo and Santa
Clara Counties
$ 150.00 plus tax for the City of Santa Monica
$ 250.00 plus tax for San Francisco County
Out of State: Prior authorization must be obtained, as well as three print-out hotel quotes. Actual receipt must be included with authorization and additional quotes.

Hotel Note: If the above approved reimbursable hotel rates cannot be secured, please contact your grant monitor to obtain an excess lodging form. This form must be approved prior to actual travel.

DRAFT EXHIBIT 1 620
City of Stockton on behalf of the Stockton-San Joaquin
County Public Library
Cesar Chavez Central Library
2021-2022 BF-1-21-061

AIRLINE TICKETS:

Itinerary and receipts are
required
Actual reasonable fees pertaining to airline travel will be reimbursed. Business, First Class, or Early Bird Check-in fee is not an approved reimbursable expense.

DRAFT EXHIBIT 1 621
November 1, 2022
RE: Contractor and Grantee Compliance with Economic Sanctions Imposed in Response to Russia’s Actions in Ukraine
Dear Grantee,
You are receiving this notification because you currently have an active grant through the California State Library.

On March 4, 2022, Governor Gavin Newsom issued Executive Order N-6-22 (EO) regarding sanctions in response to Russian aggression in Ukraine. The EO is located at https://www.gov.ca.gov/wp-content/uploads/2022/03/3.4.22-Russia-Ukraine-Executive-Order.pdf.

The EO directs all agencies and departments that are subject to the Governor’s authority to take certain immediate steps, including notifying all contractors and grantees of their obligations to comply with existing economic sanctions imposed by the U.S. government in response to Russia's actions in Ukraine, as well as any sanctions imposed under state law.

This correspondence serves as a notice under the EO that as a contractor or grantee, compliance with the economic sanctions imposed in response to Russia’s actions in Ukraine is required, including with respect to, but not limited to, the federal executive orders identified in the EO and the sanctions identified on the U.S. Department of the Treasury website (https://home.treasury.gov/policy-issues/financial-sanctions/sanctions-programs-and-countryinformation/ukraine-russia-related-sanctions). Failure to comply may result in the termination of contracts or grants, as applicable.

Please note that for any agreements or grants valued at $5 million or more, a separate notification will be sent outlining additional requirements specified under the EO.

Annly Roman
Grants and Bureau Operations Manager
California State Library
900 N Street
Sacramento, CA 95814
DRAFT EXHIBIT 1 622
Building Forward
Round 1
Grant Monitor Checklist
• Final Project Budget
• Final Project Implementation Plan
• Resolution from the grantee organization’s governing body approving acceptance of grant funds and designating an Authorized Representative allowed to enter into agreements on behalf of the organization • Grant Agreement and Certification of Compliance
If required based on specific project
• A letter from the grantee organization’s Chief Financial Officer, Finance Director, or equivalent confirming availability of matching funds (Required for all grantees contributing local match funds.)
• A current facility lease with a term extending at least ten years after the end of the grant period. (Required for all projects involving leased buildings.) All relevant documents received and approved by Libby Carlson. _______________________________
Grant Monitor Signature
DRAFT EXHIBIT 1 623
City of Stockton
Legislation Text
File #: 23-0075, Version: 1

RESOLUTION APPOINTING EVAI DELLAFOSSE AND ORLANDO MOLINA TO THE STOCKTON

ARTS COMMISSION

RECOMMENDATION
It is recommended that the City Council adopt a resolution to:

1. Appoint Evai Dellafosse and Orlando Molina to the Stockton Arts Commission with term to commence immediately upon approval.

2. Authorize the City Manager to take whatever actions are appropriate and necessary to carry out the purpose and intent of this Resolution.

Summary
The Stockton Arts Commission (“SAC”) membership is defined by Stockton Municipal Code section

2.94.040 as a 15-member board appointed by the Mayor with approval of the City Council for a term of four years.

In 2022 the City Clerk’s Office conducted recruitment campaigns and accepted applications on a continuous basis for new members. A nominating committee of SAC commissioners conducted interviews on January 17, 2023, and a recommendation to fill three vacancies was planned for submission to the full Commission on February 6, 2023. However, on January 30,2023, one applicant withdrew from the process. Therefore, two candidates will be recommended to the Commission on February 6, 2023. Pending Commission’s acceptance, the recommendation is to reappoint Evai Dellafosse and appoint Orlando Molina to the Stockton Arts Commission.

DISCUSSION
Background
The Stockton Arts Commission is comprised of a maximum of fifteen members. There are currently nine vacancies.

In accordance with Council Policy, Title 3 Chapter 3.02, the City Clerk initiated a recruitment process.

The vacancy announcement was posted on the City’s Boards and Commissions web page and print copies were posted on the City’s public posting boards. The City Clerk’s office also accepted applications continuously throughout the year. At the conclusion of the recruitment period, four applications were received (Attachment A).

City of Stockton Page 1 of 2 Printed on 2/2/2023
powered by Legistar™
624
File #: 23-0075, Version: 1
In accordance with City Council Policy Manual Chapter 3.02, City Council and Mayoral Appointments to Committees, Boards, and Commissions, and Resolution 2018-02-27-1110, the City Clerk forwarded the four applications to the SAC for consideration. Of the four applicants, only three responded to the interview invitation (Attachment A). Interviews were conducted on January 17, 2023, and a recommendation to fill three vacancies was planned for submission to the full Commission on February 6, 2023. However, on January 30,2023, one applicant withdrew from the process. Therefore, two candidates will be recommended to the Commission on February 6, 2023.

Pending Commission’s acceptance, the recommendation is to reappoint Evai Dellafosse and appoint Orlando Molina to the Stockton Arts Commission.

Present Situation
Pursuant to Stockton Municipal Code section 2.94.040, and with the approval of appointment by the Mayor and City Council, the membership of the Stockton Arts Commission will be:

Name End of Term
Aisha Abercrombie December 31, 2026
Maurice Spiller December 31, 2026
Irie Woods December 31, 2026
Maximilian Cao December 31, 2025
Justin Grant December 31, 2025
Desiree Orque December 31, 2025
Evai Dellafosse December 31, 2026
Orlando Molina December 31, 2026

FINANCIAL SUMMARY
The Stockton Arts commission receives no remunerations. There is no direct financial impact to the City by taking this action.

Attachment A - SAC Candidate Applications (redacted)
City of Stockton Page 2 of 2 Printed on 2/2/2023
powered by Legistar™
625

ATTACHMENT A
626
Are you currently serving on a City of Stockton Board, Commission, or Committee? 0 Yes o No
If yes, please list
Stockton Arts Committee as of 04/2019
Which Boards would you like to apply for?
Arts Commission: Submitted
Question applies to Arts Commission
NOTE: This Board requires membership with one of the following groups. H none, please remove board from your application. Outside of your profession, indicate what type of Arts you are active in? Select all that apply.•
None Selected
Question applies to Arts Commission
Are you interested in or accomplished in fund-raising?
0 Yes o No
Question applies to multiple boards
NOTE: This Board requires membership with one of the following groups. If none, please remove board from your application. Are you knowledgeable, have experience in, or extensive background in any of the following areas? Select all that apply. • Iii! Active in community activities significant enough to confirm knowledge of issues and individuals within the community
I have been a resident of Stockton for at least 3 years. 0 Yes o No
Interests & Experiences
Please tell us about yourself and why you want to serve.

As a mother of 5 and grandmother of 6 who currently reside in Stockton, i would like to do my civic duty and be a part of City Commission and become advocate voice In a small part of our City.

ATTACHMENT A
627
. Please' state the reason you would like to be a member of this board/commission.

I'd like to help and be more active on getting down to the grass roots of our community.

Have you served on an advisory group before?
0 Yes o No
If yes, please explain.

Embers Project
How did you hear about the position?
Online
City Council Policy 100-2 states that Commissioners are required to attend meetings on a regular basis. If appointed, will you be able to attend meetings regularly and devote the time necessary to fulfill your duties as a member?
0 Yes o No
Do you or immediate family members have any relationship (professional, financial, other) that may present a potential conflict of interest for this advisory group? o Yes 0 No
Background Information
Upload a Resume
Based on your best judgment, does this Commission make decisions that may affect any sources of income, interests in real property, or investments of you or your spouse? o Yes 0 No
Voter Registration (Questions appear if required)
Submit Application
Please identify any specialized accommodations needed for equal participation:

N/A
l=u!li r"\clbfncc.c

ATTACHMENT A
628
Enter Your Initials:

ED
Date Signed
11/21/2022
ATT

ACHMENT A
629
Application for appointment and background information for City of Stockton Boards, Commissions, Submit Date: Nov 12, 2022 and Committees
Profile
[email protected]
Email Address
Orlando
First Name
1124 S. Country Club Blvd
Street Address
Stockton
City
Ethnicity
!;21 Hispanic
Gender
!;21 Male
Whal district do you live in? *
!;21 District 4
Molina
Last Name
CA 95204
State Postal Code
I declare under penalty of disqualification/termination that I have been a resident at the above address for years/months?
5 Mobile: (917) 683-7012
Primary Phone Alternate Phone
The City of Stockton uses email as the preferred method of communication regarding your application. Is this acceptable to you?
0 Yes o No
_Rhymosaurs Author/Creator Author & MC
Employer Job Title Occupation
Employer Address
1124 S. Country Club Blvd. Stockton CA 95204
Are you currently serving on a City of Stockton Board, Commission, or Committee? o Yes e No
nrl!lnrln f\.Anlin!l

ATTACHMENT A
Which Boards would you like to apply for?
Arts Commission: Submitted
Question applies to Arts Commission
NOTE: This Board requires membership with one of the following groups. H none, please remove board from your application. Outside of your profession, indicate what type of Arts you are active in? Select all that apply. •
li1I Literary Arts
li1I Music\,
Question applies to Arts Commission
Are you interested in or accomplished in fund-raising?
0 Yes o No
Question applies to multiple boards
NOTE: This Board requires membership with one of the following groups. H none, please remove board from your application. Are you knowledgeable, have experience in, or extensive background in any of the following areas? Select all that apply.• li1I Active in community activities significant enough to confirm knowledge of issues and individuals within the community
li1I Knowledge of new artistic & design expressions
li1I Possess decision-making abilities
li1I Understanding of Ethnic/Gender Diversity
li1I Willingness to tolerate/promote change
I have been a resident of Stockton for at least 3 years. 0 Yes o No
Interests & Experiences
Please tell us about yourself and why you want to serve.

I've been an MC and musician for 24 years, and I'm now a childrens book author of the series "Rhymosaurs" which teaches literacy, art and rhythm through Hip-Hop culture. I have experience in all artistic aspects of Hip-Hop including dance, DJ, rhyming and graffiti/street art. tirbnrln Anlin

ATTACHMENT A
631
Please state the reason you would like to be a member of this board/commission.

As a transplant and new resident of Stockton (I moved here from Brooklyn NY in 2017) the first thing I noticed was how artistic this city is. My new kids book is also titled "Two-0-Ninosaur" about moving to Stockton from NYC. It's my way of saying thank you to the 209 for being such a good city to raise my family. I would like to continue to show the world how beautiful and artsy this city is. And possibly find ways to bring other artists here.

Have you served on an advisory group before?
o Yes 0 No
How did you hear about the position?
Email and Linkedln
City Council Policy 100-2 states that Commissioners are required to attend meetings on a regular basis. If appointed, will you be able to attend meetings regularly and devote the time necessary to fulfill your duties as a member?
0 Yes o No
Do you or immediate family members have any relationship (professional, financial, other) that may present a potential conflict of interest for this advisory group? o Yes 0 No
Background Information
Upload a Resume
Based on your best judgment, does this Commission make decisions that may affect any sources of income, interests in real property, or investments of you or your spouse? o Yes 0 No
Voter Registration (Questions appear if required)
Submit Application
Enter Your Initials:

OM
nr-bnrln f\Anlin

ATTACHMENT A
632
Resolution No.

STOCKTON CITY COUNCIL

RESOLUTION APPOINTING EVAI DELLAFOSSE AND ORLANDO MOLINA TO THE

STOCKTON ARTS COMMISSION
The Stockton Arts Commission acts in an advisory capacity to the Stockton City Council in connection with the artistic and cultural development of the City; and The Stockton Arts Commission promotes and encourages programs that further the development and public awareness of all the arts including public art, fine arts, and performing arts; and
The Stockton Arts Commission recommends the appointment of Evai Dellafosse and Orlando Molina for one term to expire on December 31, 2026: and In accordance with Stockton Municipal Code section 2.94.040.A, members of the Stockton Arts Commission are appointed by the Mayor with approval of the City Council; now, therefore,

BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF STOCKTON, AS FOLLOWS:

1. The City Council appoints Evai Dellafosse and Orlando Molina to the Stockton Arts Commission.

2. Commissioner terms will commence immediately upon approval and expire on December 31, 2026.

3. The Mayor with approval of the City Council agrees with the current recommendations of the Stockton Arts Commission and the Community Services Department.

4. The City Manager is authorized to take whatever actions are necessary and appropriate to carry out the purpose and intent of this Resolution.

PASSED, APPROVED, and ADOPTED February 7, 2023
_________________________
ATTEST:

KEVIN J. LINCOLN II
Mayor of the City of Stockton
ELIZA R. GARZA, CMC
City Clerk of the City of Stockton
633
City of Stockton
Legislation Text
File #: 23-0080, Version: 1

APPROVE A MOTION TO TERMINATE THE DOWNTOWN INFRASTRUCTURE INFILL

INCENTIVE REIMBURSEMENT AGREEMENTS WITH OPEN WINDOW PROJECT, LLC AND OWP PHASE 2, LP, AND DE-OBLIGATE AND REPROGRAM FUNDS

RECOMMENDATION
It is recommended that the City Council approve a motion:

1. Approving the Termination Agreement (Attachment A) of the Downtown Infrastructure Infill Incentive Reimbursement Agreements for Open Window Project, LLC and OWP Phase 2 LP;

2. Approving the de-obligation and reprogramming of $1,400,000 CDBG funds to be made available through the Annual Action Plan approval process;

3. Approving the de-obligation of the Open Window Project and the budget appropriation of $1,940,000 in General Fund to stay in the Downtown Infill Infrastructure Reimbursement Program; and

4. Authorizing the City Manager, or designee, to take all the necessary and appropriate actions to carry out the purpose and intent of this motion, including execution of the Termination Agreement and performing all City actions discussed therein.

Summary
On July 07, 2015, the City Council approved a Downtown Infrastructure Infill Incentive Reimbursement (“DIIIR”) Program to support infill development in the downtown core (Attachment B - Resolution 2015-07-07-1502). In 2016, the City executed a DIIIR Agreement with Open Window Project, LLC (“OWP1”) for up to $3.8 million to assist with Phase I of its Open Window Project (the “Project”) (Attachment C - Reimbursement Agreement Phase I). In 2019, the City executed a second DIIIR with OWP Phase 2, LP (“OWP2”) for Phase II of the Project (Attachment C - Reimbursement Agreement Phase II). From 2016-2020, the Project experienced multiple changes to the scope resulting in three amendments to the DIIIR Agreement for Phase I, including a drastic reduction in residential units and commercial space. On January 11, 2022, Council approved, at the request of OWP1, the revocation of the Open Window Project Master Development Plan (“MDP”) and termination of the Development Agreement (“DA”) associated with the Project, attached as (Attachment E - Resolution 2022-01-11-1602). Staff now recommends the termination of both DIIIR Agreements with OWP1 and OWP2 through the approval of the recommended motion.

City of Stockton Page 1 of 3 Printed on 2/2/2023
powered by Legistar™
634
File #: 23-0080, Version: 1

DISCUSSION
Background
To support infill development in the downtown core, the City Council approved a new incentive program titled the Downtown Infrastructure Infill Incentive Reimbursement Program in July 2015. In February 2016, the City approved a MDP and DA for the Project, encompassing approximately 15 square blocks within the downtown Stockton core. In the MDP and DA, Phase I of the Project originally consisted of approximately 200 residential units and 92,000 square feet of commercial space.

On November 29, 2016, OWP1 entered into a DIIIR Agreement with the City for up to $3.8 million to assist with Phase I of the Project. On May 16, 2017, OWP1 and the City executed the first amendment to the DIIIR Phase I Agreement which caused an early release of $760,000 in funding to OWP1 (Attachment F - Reimbursement Agreement Phase I Amendment 1). It secured said funding with a lien on seven properties owned by OWP1: 510, 532, and 544 East Miner Avenue, 221 North American Street, 617 East Channel Street, 621 East Channel Street, and 210 North American Street (the “Liens”). On December 19, 2017, OWP1 and the City executed the second amendment to the DIIIR Phase I Agreement authorizing an additional $2.38 million in DIIIR funding for a new total of $6.18 million (Attachment G - Reimbursement Agreement Phase I Amendment 2). The scope for Phase I of the Project increased to 261 residential units, of which 231 would be market-rate units and 92,000 square feet of commercial space.

A second DIIIR Agreement was executed on August 12, 2019, for up to $1.8 million to assist with Phase II of the Project. In July 16, 2020, a third DIIIR amendment to the Phase I Agreement was executed, decreasing the Phase I OWP Project scope to 129 market-rate residential units and 54,263 square feet of commercial space (Attachment H - Reimbursement Agreement Phase I Amendment 3). The City reduced reimbursable funding from $6.18 to $4.95 million.

At the January 11, 2022, City Council meeting, the Council approved, at the request of OWP1, the revocation of the MDP and termination of the DA.

Present Situation
Over the course of the last seven years, Staff has actively engaged with the Developer to discuss project progress relating to the DIIIR Agreement, changes in the housing market and demands, as well as compliance with the MDP and DA. From discussions held through December 2022 and January 2023, City staff and the Developer agreed on the present proposal to terminate the DIIIR Phase I and Phase II Agreements, both effective immediately upon execution of the Termination Agreement. OWP1 will return funds in the amount of $193,162.90 back to the DIIIR program based on a payment schedule outlined in the Termination Agreement: this amount was calculated from the $760,000 advanced in 2017, less eligible expenses already incurred by OWP1 on development of the project. In addition, the de-obligation of the Open Window Project will reduce the General Fund contract liability by $1,940,000. Staff recommends keeping the $1,940,000 General Fund budget appropriation in the DIIIR program. In support of the DIIIR program, Economic Development Department’s General Fund, Business Development Division will retain the $1,900,00 budget appropriation. As for the $1,400,000 CDBG funds, the City will reprogram back to CDBG. Future annual estimated costs will be included in the annual budget appropriation process. The release of City of Stockton Page 2 of 3 Printed on 2/2/2023
powered by Legistar™
635
File #: 23-0080, Version: 1
the Liens on Open Window properties will occur upon mutual agreement of an acceptable plan during OWP1’s payment schedule for the return of the $193,162.90. The Termination Agreement stipulates additional terms and conditions.

FINANCIAL SUMMARY
A total of $760,000 was disbursed to OWP in General Fund and $400,000 in Community Development Block Grant (“CDBG”) funding was re-assigned to the Medici project. Termination of the DIIIR Agreements will result in a repayment of funds totaling $193,162.90 back to the DIIIR program.

In addition, the de-obligation of the OWP will reduce the General Fund contract liability by $1,940,000. Staff recommends keeping the $1,940,000 General Fund budget appropriation in the DIIIR program. In support of the DIIIR program, Economic Development Department’s General Fund, Business Development Division will retain the $1,940,000 budget appropriation. As for the $1,400,000 CDBG funds, the City will reprogram back to CDBG. Future annual estimated costs will be included in the annual budget appropriation process.

Attachment A - Termination Agreement
Attachment B - Resolution 2015-07-07-1502
Attachment C - Reimbursement Agreement Phase I
Attachment D - Reimbursement Agreement Phase II
Attachment E - Resolution 2022-01-11-1602
Attachment F - Reimbursement Agreement Phase I Amendment 1 Attachment G - Reimbursement Agreement Phase I Amendment 2 Attachment H - Reimbursement Agreement Phase I Amendment 3 City of Stockton Page 3 of 3 Printed on 2/2/2023
powered by Legistar™
636

ATTACHMENT A
039568-000000 8858524.1 Open Window Phase I and Phase II Termination Agreement. Page 1 of 4

TERMINATION AGREEMENT
FOR

DOWNTOWN INFRASTRUCTURE INFILL INCENTIVE REIMBURSEMENT
AGREEMENT – OPEN WINDOW PROJECT, LLC – PHASE I
AND

DOWNTOWN INFRASTRUCTURE INFILL INCENTIVE REIMBURSEMENT
AGREEMENT – OWP PHASE 2, LP – PHASE II
This termination agreement (the “Termination Agreement”) is entered into as of ___________ ____, 2023, by and among Open Window Project, LLC, a California limited liability company (“OWP1”), OWP PHASE 2, LP, a California limited partnership (“OWP2”) and the City of Stockton, a municipal corporation (the “City”) (collectively, the “Parties” and individually each a “Party”).

RECITALS
A. In February 2016, City approved a Master Development Plan and Development Agreement for the Open Window Project (the “Project”), which encompassed approximately 15 square blocks within the downtown Stockton core.

B. Phase I of the Project originally consisted of approximately 200 residential units and 92,000 square feet of commercial space.

C. In July 2015, the City Council approved a Downtown Infrastructure Infill Incentive Program to support infill development in the downtown core.

D. On November 29, 2016, OWP1 entered into a Downtown Infrastructure Infill Incentive Reimbursement Agreement with City for up to $3.8 million to assist with Phase I of the Project (as amended, the “Phase I Agreement”).

E. On May 16, 2017, OWP1 and City executed the first amendment to the Phase I Agreement, which caused an early release of $760,000 of funding to OWP1 and securing said funding with a lien on seven (7) properties (“Properties”) owned by OWP1: 510, 532, and 544 E.

Miner Avenue, 221 North American Street, 617 East Channel Street, 621 East Channel Street, and 210 North American Street (collectively “Liens”).

G. On December 19, 2017, OWP1 and City executed the second amendment to the Phase I Agreement, authorizing an additional $2.38 million in Downtown Infrastructure Infill Incentive funding for a total of $6.18 million. The scope for Phase I of the Project increased to 261 residential units, of which 231 would be market-rate units, and 92,000 square feet of commercial space.

H. On August 12, 2019, OWP2 and City executed a Downtown Infrastructure Infill Incentive Reimbursement Agreement for up to $1.8 million to assist with Phase II of the Project (the “Phase II Agreement”).
637

ATTACHMENT A
039568-000000 8858524.1 Open Window Phase I and Phase II Termination Agreement. Page 2 of 4
I. On July 16, 2020, OWP1 and City executed the third amendment to the Phase I Agreement, decreasing the Phase I Project scope to 129 market-rate residential units and 54,263 square feet of commercial space. Reimbursable funding was reduced from $6.18 million to $4.95 million.

J. At the January 11, 2022, meeting of the City Council, the Council approved, at the request of OWP1, revocation of the Open Window Project Master Development Plan and termination of the Development Agreement.

K. OWP1 and City now desire to terminate the Phase I Agreement.

L. OWP2 and City now desire to terminate the Phase II Agreement.

For and in consideration of the mutual promises contained herein, the Parties agree as follows:

AGREEMENT

1. Termination of Phase I. The Phase I Agreement isterminated, effective immediately upon execution of this Termination Agreement (the “Termination Date”).

2. Termination of Phase II. The Phase II Agreement is terminated, effective on the Termination Date.

3. Return of Funds. One hundred ninety-three thousand one hundred sixty-two dollars and ninety cents ($193,162.90) shall be paid by OWP1 to City based on the following schedule (“Payment Schedule”):
(i) $64,387.63 due within 60 days of the Termination Date. (ii) $64,387.63 due within 180 days of the Termination Date. (iii) $64,387.64 due within 365 days of the Termination Date.

4. Release of Liens. OWP1 and OWP2 intend to develop in whole or in part the Projects despite this Termination Agreement and the Return of Funds resulting from Section 3 herein. The Parties acknowledge that the Project will require OWP1, OWP2, and/or affiliated entities (individually and collectively “Developer”) to secure financing from other sources and further acknowledge that such financing will require the Developer to use one or more of the Properties as collateral for such financing (“Collateral”). Recognizing Developers need for the Collateral and the City’s need to retain sufficient collateral during Payment Schedule, the Parties agree to cooperate and use best efforts to develop a mutually acceptable plan for the release of the Liens that satisfies the Developer’s need to utilize the Collateral and the City’s need for security during the Payment Schedule.
638

ATTACHMENT A
039568-000000 8858524.1 Open Window Phase I and Phase II Termination Agreement. Page 3 of 4

5. Miscellaneous.
(i) Governing Law. This Termination Agreement shall be governed by the laws of the State of California. Venue shall be in San Joaquin County, California. (ii) Authority of Parties. Each Party has full power and authority to execute and deliver this Termination Agreement, and to perform and observe all of the terms and provisions herein.
(iii) Authority of Persons Executing Documents. This Termination Agreement is being executed and delivered by persons who are duly authorized to execute and deliver the same for and on behalf of each respective Party, and all actions required under each Party’s organizational documents and applicable governing law for the authorization, execution, delivery and performance of this Termination Agreement have been duly taken to the extent such actions are required as of the date of this Termination Agreement’s execution and delivery. (iv) Counterparts. The Parties may execute this Termination Agreement in counterparts with the counterparts together constituting a single executed document as if signed by the Parties together. Each Party may sign the Termination Agreement electronically with electronic signatures counting as originals.
(v) Severability. The partial or complete invalidity of any one or more provisions of this Termination Agreement shall not affect the validity or continuing force and effect of any other provisions.

IN WITNESS WHEREOF, the Parties have executed this Termination Agreement as of the date first written above.
[Signatures on following page]
639

ATTACHMENT A
039568-000000 8858524.1 Open Window Phase I and Phase II Termination Agreement. Page 4 of 4
CITY OF STOCKTON (“CITY”)
A municipal corporation
By: _________________________________

HARRY BLACK

CITY MANAGER
ATTEST:

By: _________________________________
ELIZA R. GARCA, CMC

CITY CLERK
APPROVED AS TO FORM:

By: _________________________________
LORI M. ASUNCION

CITY ATTORNEY
OPEN WINDOW PROJECT, LLC (“OWP1”)
A California limited liability company
By: _________________________________

ZACHARY CORT

PRESIDENT
OWP PHASE 2, LP (“OWP2”)
A California limited partnership
By: _________________________________

ZACHARY CORT

PRESIDENT
640
ATTACHMENT B 641
ATTACHMENT B 642
ATTACHMENT B 643
ATTACHMENT B 644

DOWNTOWN INFRASTRCUTURE INFILL INCENTIVE

REIMBURSEMENT AGREEMENT

OPEN WINDOW PROJECT, LLC
This Agreement is made and entered into by and between the CITY OF STOCKTON, herein referred to as "CITY", and OPEN WINDOW PROJECT, LLC, a California limited liability company, herein referred to as "DEVELOPER".

RECITALS
A. CITY has approved a Master Development Plan (MOP) and Development Agreement with DEVELOPER for the Open Window Project (Project) in February 2016 which encompasses approximately 15 square blocks within the Downtown Stockton core. The Open Window Project MOP plans for mixed-use development that consists of approximately 1,000 residential units and 200,000 s.f. of commercial space.

B. Phase I of the Project, which is depicted in Exhibit A, consists of approximately 200 residential units and approximately 92,000 s.f. of commercial space. This Project will stimulate and encourage business and job growth, provide market-rate housing, bring services to the area, and aid in the revitalization of Downtown Stockton.

C. CITY has approved the Downtown Infrastructure Infill Incentive program in July 2015, which provides up to $900,000 annually, on a reimbursement basis, for public offsite infrastructure improvements associated with eligible Downtown infill projects. Eligible projects must consist of a minimum of 35 market-rate housing units and/or a minimum of 30,000 s.f. of new, or newly renovated, retail or commercial space. The applicant must also make a capital investment of at least $500,000. The DEVELOPER will be investing approximately $53 million in connection with Phase I of the Project.

D. DEVELOPER desires to participate in the Downtown Infrastructure Infill Incentive program and requests that the CITY enter into this Agreement to reimburse it for the cost of certain public improvements located within the Open Window Project MOP boundary required by City as a condition of approval of Phase 1 of the Project. These Improvements are defined in Exhibit B, which is attached hereto and made a part hereof by this reference (the "Improvements"). The actual cost of the Improvements may include additional items of work not included in Exhibit B, but which are necessary or desirable to the Project. The maximum amount requested for reimbursement of the Improvements is $3.8 million (Three million eight hundred thousand dollars).

E. CITY has identified the Improvements as being consistent with Downtown Infrastructure Infill Incentive program guidelines, as well as the Economic Development Strategic Plan (February 2015) and Urban Land Institute Report (February 2012) goals, and the type of Project that will encourage job growth and other development activities in the Downtown area.

F. DEVELOPER will secure all necessary permits and design and construct the Improvements in the manner required pursuant to applicable laws, including the City of Stockton Municipal Code and standards, all at DEVELOPER'S expense, subject to reimbursement as provided in this Agreement.

-0
\
ATTACHMENT C 645
ATTACHMENT C 646
ATTACHMENT C 647
ATTACHMENT C 648
ATTACHMENT C 649
ATTACHMENT C 650
ATTACHMENT C 651
ATTACHMENT C 652
ATTACHMENT C 653
ATTACHMENT C 654
ATTACHMENT C 655
ATTACHMENT C 656
ATTACHMENT C 657
ATTACHMENT C 658
ATTACHMENT C 659
ATTACHMENT C 660
ATTACHMENT C 661
ATTACHMENT C 662
ATTACHMENT C 663
ATTACHMENT C 664
ATTACHMENT C 665
ATTACHMENT C 666
ATTACHMENT C 667
ATTACHMENT D 668
ATTACHMENT D 669
ATTACHMENT D 670
ATTACHMENT D 671
ATTACHMENT D 672
ATTACHMENT D 673
ATTACHMENT D 674
ATTACHMENT D 675
ATTACHMENT D 676
ATTACHMENT D 677
ATTACHMENT D 678
ATTACHMENT D 679
ATTACHMENT D 680
ATTACHMENT D 681
ATTACHMENT D 682
ATTACHMENT D 683
ATTACHMENT E 684
ATTACHMENT E 685
‘Open Window Project’
Downtown Stockton
Master Development Plan
November 16, 2015
ATTACHMENT E 686
ATTACHMENT F 687
ATTACHMENT F 688
ATTACHMENT F 689
ATTACHMENT F 690
ATTACHMENT F 691
ATTACHMENT F 692
ATTACHMENT F 693
ATTACHMENT F 694
ATTACHMENT F 695
ATTACHMENT F 696
ATTACHMENT F 697
ATTACHMENT F 698
ATTACHMENT F 699
ATTACHMENT F 700
ATTACHMENT F 701
ATTACHMENT F 702
ATTACHMENT F 703
ATTACHMENT F 704
ATTACHMENT F 705
ATTACHMENT F 706
ATTACHMENT F 707
ATTACHMENT F 708
ATTACHMENT F 709
ATTACHMENT F 710
ATTACHMENT F 711
ATTACHMENT F 712
ATTACHMENT G 713
ATTACHMENT G 714
ATTACHMENT G 715
ATTACHMENT G 716
ATTACHMENT G 717
ATTACHMENT G 718
ATTACHMENT G 719
ATTACHMENT G 720
ATTACHMENT G 721
ATTACHMENT G 722
ATTACHMENT G 723
ATTACHMENT G 724
1 THIRD AMENDMENT TO THE

DOWNTOWN INFRASTRUCTURE INFILL INCENTIVE REIMBURSEMENT

AGREEMENT

OPEN WINDOWN PROJECT, LLC, PHASE I
This Third Amendment (the “Third Amendment”) is entered into as of ___________________________ by and between Open Window Project, LLC, a California limited liability company, (the “DEVELOPER”), and the City of Stockton, a municipal corporation (the “CITY”).

RECITALS
A. In February 2016, CITY approved a Master Development Plan (MDP) and Development Agreement for the Open Window Project (the “Project”), which encompasses approximately 15 square blocks within the Downtown Stockton core.

B. Phase I of the Project originally consisted of approximately 200 residential units and 92,000 s.f. of commercial space.

C. In July 2015, the City Council approved a Downtown Infrastructure Infill Incentive Program to support infill development in the downtown core.

D. On November 29, 2016, DEVELOPER entered into a Downtown Infrastructure Infill Incentive Reimbursement Agreement (as amended, Agreement) with CITY for up to $3.8 million to assist with Phase I of the Project.

E. On May 9, 2017, the City Council approved an Amendment to the Reimbursement Agreement authorizing the release of $760,000 of funding to DEVELOPER and securing said funding with a lien on seven (7) properties owned by DEVELOPER.

F. In 2017 the scope for Phase I of the Project changed significantly with additional residential units and encompassing an additional city block. The change in scope would require considerable infrastructure improvements above the amount Council initially approved in November 2016.

G. On October 3, 2017, the City Council approved a Second Amendment (as amended, Second Amendment) to the Reimbursement Agreement authorizing an additional $2.38 million in Downtown Infrastructure Infill Incentive funding for a total of $6.18 million.

H. The scope for Phase I of the Project has changed with a decrease in the overall number of market-rate residential units and reduction of commercial space. The revised project scope will now include 129 market-rate residential units and 54,263 s.f. of commercial/retail space. This change in scope will require fewer eligible infrastructure ATTACHMENT H 725
EXHIBIT 1
2 improvements. As such, the CITY will reduce the amount in Downtown Infrastructure Infill Incentive funding from $6.18 million to a Third Amendment total of $4.95 million.

AMENDMENT
The Downtown Infrastructure Infill Incentive Reimbursement Agreement is hereby amended as follows:

1. The CITY and DEVELOPER agree to amend Section 2.A and 2.C decreasing the maximum reimbursement of funds to DEVELOPER from $6.18 million to $4.95 million.

2. The CITY and DEVELOPER agree to amend Section 2.A as follows:
“Pursuant to the guidelines and regulations herein defined, and subject to the satisfaction of the conditions in this Section 2, CITY agrees to reimburse DEVELOPER for the cost of improvements in the total amount of $4.95 million.”

3. The CITY and DEVELOPER agree to amend Section 2.B.ii decreasing the minimum number of new market-rate residential units from 231 to 129 and minimum square footage of new/newly renovated commercial space from 90,000 s.f. to 55,299 s.f..

4. The CITY and DEVELOPER agree to amend Section 2.C as follows: “Once the conditions in 2.B above have been satisfied as determined by CITY and subject to the limitations in 2.A above, CITY shall provide reimbursement payments to DEVELOPER, in the total amount of $4.95 million, in progress payments as follows.” The percentages of the progress payments identified in Section 2.C.i through 2.C.v will remain the same, with the actual dollar amount of each progress payment revised to reflect the new reimbursement total of $4.95 million.

5. All other terms and provisions of the Downtown Infrastructure Infill Incentive Reimbursement Agreement are unchanged and remain in full force and effect. //
//
//
//
//
//
//
//
//
//
//
//
//
//
ATTACHMENT H 726
EXHIBIT 1
3 IN WITNESS WHEREOF, the CITY and DEVELOPER have executed this Third Amendment as of the date first above written.
“DEVELOPER”

OPEN WINDOW PROJECT, LLC
a California limited liability company
By: _____________________________

ZACHARY CORT, PRESIDENT
“CITY”

CITY OF STOCKTON
a municipal corporation
By: _____________________________

HARRY BLACK, CITY MANAGER
ATTEST:

By: _____________________________
ELISA R. GARZA, CMC

CITY CLERK
APPROVED AS TO FORM:

By: _____________________________
RYAN J. MEYERHOFF

DEPUTY CITY ATTORNEY
ATTACHMENT H 727
City of Stockton
Legislation Text
File #: 22-1203, Version: 1
REDUCTION OF LEASED PREMISES AND LEASE EXTENSION FOR 400 EAST MAIN STREET

RECOMMENDATION
It is recommended that the City Council adopt a resolution:

1. Approving a Second Lease Amendment with Chris Neilson, as duly appointed Receiver (Landlord), to reduce the premises currently being leased by City on the seventh floor and extend the lease term for the third and fourth floor at 400 East Main Street; and

2. Authorizing the City Manager, or designee, to take all the necessary and appropriate actions to carry out the purpose and intent of this resolution.

Summary
The City acquired the Waterfront Office Towers in 2018 to serve as a permanent City Hall. With the current construction schedule for City Hall at the Waterfront Towers, the City must retain offices at 400 East Main Street through March 2025. The Landlord and the City have negotiated to reduce leased space (eliminating City offices on the seventh floor) and extend the lease term. With the reduction of space on the seventh floor, the City will realize an estimated savings of $348,814.08 for the lease obligation through March 31, 2025, should the Council approve the Second Lease Amendment.

DISCUSSION
Background
On February 25, 2015, the City entered into an agreement with William J. Hoffman, duly appointed Receiver (Landlord), to lease office space at 400 East Main Street for an eight-year term, with the option to extend the lease up to an additional four years (Attachment A - Lease). On October 16, 2018, City Council approved a resolution authorizing a first amendment to the standard office lease for reduction of the leased premises and discounted prepayment of the remaining lease obligation. (Attachment B - Resolution 2018-10-16-1402). In March 2021, the Superior Court of the State of California approved a new receiver (Landlord), Chris Neilson.

Under the current terms, the City is leasing a total of 60,829 SF as shown below:

Size Current Use
Third Floor 25,755 SF Administrative Services & Human Resources Fourth Floor 25,730 SF IT, Economic Development & Fire Administration Seventh Floor 9,344 SF Stockton Kings & Meeting/Training Space City of Stockton Page 1 of 2 Printed on 2/2/2023
powered by Legistar™
728
File #: 22-1203, Version: 1
Present Situation
The current lease term ends on March 31, 2023, with options to extend the full lease in one-year periods through March 31, 2027. The City will require office space through 2025 while construction continues at the Waterfront Towers. During the lease negotiation, the reduction of leased space on the seventh floor was determined to be feasible. As such, the City and Landlord wish to execute a second amendment to the current lease to reduce the premises being leased on the seventh floor by the City and extend the current lease term for the third and fourth floors through March 31, 2025. The City will realize a total savings of more than $348k given the reduction of leased space.

The following are the proposed terms of the Second Lease Amendment, which is included as Exhibit 1 to the Resolution:

Give Back Premises: Reduction of leased space - seventh floor 9,344 SF. The City will retain leased space on the third and fourth floors totaling 51,485 SF.

Retained Premises
Prepayment:

The City shall make monthly lease payments of $80,081.23, beginning March 2023.

Parking: The City shall be entitled to 95 total parking stalls with 26 reserved.

Under this amendment, the City may elect to exercise an early termination option for the third and/or fourth floors, with a 45-day prior written notice, reducing the monthly rent by $40,056.73 per month, if the City exercises the termination option for just one of the two floors.

FINANCIAL SUMMARY
Approval of the Second Lease Amendment would decrease the City’s monthly lease obligation for the two-year period of March 31, 2023 through March 31, 2025, from $94,615.15 to $80,081.23, resulting in a total savings of $348,814.08. The City will use lease savings to offset the costs of the Waterfront Office Towers tenant improvements and other City Hall move-related costs.

Attachment A - Current Lease
Attachment B - Resolution 2018-10-16-1402
City of Stockton Page 2 of 2 Printed on 2/2/2023
powered by Legistar™
729
42893660v.16
400 EAST MAIN STREET OFFICE LEASE

BETWEEN
WILLIAM J. HOFFMAN,
As Receiver
(“Landlord”)
and

THE CITY OF STOCKTON,
a municipal corporation
(“Tenant”)
ATTACHMENT A 730
i
42893660v.16
400 EAST MAIN STREET OFFICE LEASE
TENANT:

THE CITY OF STOCKTON

TABLE OF CONTENTS
ARTICLE 1 TERM ........................................................................................................ 4 ARTICLE 2 RENT ........................................................................................................ 4 ARTICLE 3 SIGNAGE .................................................................................................. 6 ARTICLE 4 SERVICES, FACILITIES AND MAINTENANCE ........................................ 8 ARTICLE 5 ACCEPTANCE OF PREMISES ................................................................. 13 ARTICLE 6 ALTERATIONS AND REPAIRS ............................................................... 13 ARTICLE 7 PREMISES .............................................................................................. 15 ARTICLE 8 ASSIGNMENT AND SUBLETTING ......................................................... 18 ARTICLE 9 LIABILITY AND INDEMNIFICATION .................................................... 22 ARTICLE 10 INSURANCE ......................................................................................... 23 ARTICLE 11 TRANSFER OF LANDLORD’S INTEREST .......................................... 26 ARTICLE 12 DAMAGE OR DESTRUCTION .............................................................. 27 ARTICLE 13 DEFAULTS AND REMEDIES ................................................................ 28 ARTICLE 14 EMINENT DOMAIN .............................................................................. 32 ARTICLE 15 SUBORDINATION ................................................................................ 33 ARTICLE 16 SURRENDER OF PREMISES; REMOVAL OF PROPERTY ..................... 34 ARTICLE 17 HAZARDOUS MATERIALS; EXCESSIVE BURDEN; WASTE ............. 35 ARTICLE 18 MISCELLANEOUS ................................................................................ 35 EXHIBITS:

A Floor Plan of Premises
B Real Property Description
C Rules and Regulations
D Estoppel Certificate
E Depiction of Building Standard Signage
ATTACHMENT A 731
42893660v.16

STANDARD OFFICE LEASE
This Lease is made as of February 25, 2015, between WILLIAM J. HOFFMAN, duly appointed Receiver (“Landlord”), and THE CITY OF STOCKTON, a municipal corporation (“Tenant”), who agree as follows:

LEASE OF PREMISES
Pursuant to that certain Judgment of Possession issued on May 31, 2012 by the Superior Court of the State of California—County of San Joaquin in Case No. 39-2012- 00280741-CU-UD-STK (the “Judgment of Possession”) and Notice of Delivery of Notice of Possession of Real Property dated June 21, 2012 and delivered in connection with the Judgment of Possession, Main Street Stockton LLC, a Delaware limited liability company (“Main Street Stockton”), obtained possession of the Building (as hereinafter defined).

As a result thereof, Main Street Stockton, as landlord, and Tenant, as tenant, entered into that certain 400 East Main Street Office Lease for a portion of the Building (the “Prior Lease”), which Prior Lease (i) has expired by its terms, and (ii) is being replaced in its entirety by this Lease.

Pursuant to that certain Order Appointing Receiver and Temporary Restraining Order dated January 27, 2015 entered in Case No. 39-2015-00320553-CU-CO-STK in the Superior Court of the State of California for the County of San Joaquin (the “Order Appointing Receiver”). Landlord was appointed receiver for the Building and granted the authority to enter into and perform as landlord under all leases for the Building. As a result thereof, and in accordance therewith, Landlord and Tenant now wish to enter into this Lease.

Pursuant to the terms hereof, Landlord leases to Tenant and Tenant leases from Landlord, upon the provisions and conditions set forth herein, those certain premises (“Premises”) described in the Basic Lease Provisions and designated in Exhibit “A” attached hereto, which Premises are located in that certain building located at 400 East Main Street, Stockton, California, which building includes a two-level subterranean parking garage located directly beneath the Building (the “Parking Garage”) (such building and the Parking Garage, collectively, the “Building”), and situated upon that certain real property as more particularly described on Exhibit “B” (the “Real Property”). The Real Property, the Building, and the Common Facilities (as defined below) are referred to collectively herein as the “Project.”

BASIC LEASE PROVISIONS
The following are the Basic Lease Provisions of this Lease. Other Sections of this Lease explain and define the Basic Lease Provisions in more detail and are to be read in conjunction herewith. In the event of any conflict between the Basic Lease Provisions and the other Sections of this Lease, the other Sections of this Lease shall control.

1. BUILDING ADDRESS: 400 East Main Street, Stockton, California 95202.

ATTACHMENT A 732
2 42893660v.16

2. PREMISES:
a. The entire fourth floor, a portion of the third floor, a portion of the ground floor and a portion of the seventh floor of the Building
b. Suites 102, 119, 124, 310, 400, 701 and 760
c. Rentable area of the portion of the Premises described in Item 2.a. and b. above that is for Tenant’s use: approximately 80,320 rentable square feet d. Use of the Common Facilities (as hereinafter defined) e. Tenant’s rights to the Parking Garage (as hereinafter defined)

3. TERM: Eight (8) years and one (1) month, plus any partial calendar month following the Commencement Date if the Commencement Date does not occur on the first day of a calendar month. As used herein “Term” means the term of this Lease as the same may be extended pursuant to the provisions of this Lease.

4. COMMENCEMENT DATE: February 25, 2015, which is the Effective Date (as such term is defined in that certain First Amended Plan for the Adjustment of Debts of City of Stockton, California, as modified (August 8, 2014) for Case No. 2012-32118 in the United States Bankruptcy Court, Eastern District of California, Sacramento Division, and reflected in that certain Notice of Effective Date to be filed in connection therewith subsequent to the date hereof).

5. BASIC RENTAL:

Year Monthly
Payments Gross Annual Rent
1 $77,329 $ 927,943
2 $77,427 $ 929,128
3 $77,528 $ 930,330
4 $77,629 $ 931,551
5 $104,091 $1,249,098
6 $104,196 $1,250,355
7 $104,303 $1,251,632
8 $104,411 $1,252,927
9 $124,932 $1,499,187
10 $125,043 $1,500,522
11 $142,153 $1,705,842
12 $142,268 $1,707,217

6. OPERATING EXPENSES: Included within Basic Monthly Rent.

7. SECURITY DEPOSIT: $209,314.78

8. ADDRESSES:

Landlord: Tenant:

William J. Hoffman THE CITY OF STOCKTON
ATTACHMENT A 733
3 42893660v.16
Trigild
9339 Genesee Avenue
Suite 130
San Diego, CA 92121
with a copy to:
425 N. El Dorado Street
Second Floor
Stockton, CA 95202
Attn: City Manager
with a copy to:

ASSURED GUARANTY
31 West 52nd Street
New York, NY 10019
Attn: Terence L. Workman
CBRE | Asset Services
1776 W. March Lane, Suite 170
Stockton, CA 95207
Attn: Rick Goucher

SIDLEY AUSTIN LLP
555 West Fifth Street, Suite 4000
Los Angeles, CA 90013
Attn: Jeffrey E. Bjork

ORRICK, HERRINGTON &

SUTCLIFFE, LLP
The Orrick Building
405 Howard Street
San Francisco, CA 94105
Attn: John Knox

9. PERMITTED USES: General office use, use as permit and service centers for Tenant’s customers, operation of an information technology center, siting of the chambers of the Stockton City Council (the “City Council”) in Suite 124, and all related uses thereto, subject to existing zoning restrictions and the terms hereof, including, but not limited to, those set forth in Article 7 (the “Permitted Uses”).

10. PARKING: As part of Tenant’s consideration under this Lease, Tenant shall be entitled to one hundred thirty (130) parking spaces located in the Parking Garage during the Term of this Lease (the “Tenant’s Spaces”), of which one hundred (100) of the Tenant’s Spaces shall be unreserved parking spaces and thirty (30) of the Tenant’s Spaces shall be reserved parking spaces (such Tenant’s Spaces, the “Reserved Spaces”). The Reserved Spaces shall be located within that portion of the Parking Garage depicted on Exhibit “E” attached hereto and made a part hereof; provided, however, that Landlord shall have the right to temporarily relocate such Reserved Spaces for purposes of maintaining, repairing, restoring, altering or improving the Parking Garage and maintaining the safety of the Parking Garage and/or the Project. Landlord reserves the right to separately charge Tenant’s guests and visitors for parking; provided, however, that Tenant’s visitors shall be permitted to use, at no additional charge, any of the Tenant’s Spaces that are not being used by Tenant at the time such visitor wishes to park at the Building, as determined by Landlord (or any agent or employee thereof) in its reasonable discretion.

11. TYPE/NATURE OF TENANT’S BUSINESS: Government offices, permit and service centers for Tenant customers, and technology center and the operation of services consistent with or necessary to the operation thereof, including the operation, facilitation and hosting of City Council meetings within the City Council Chambers (as hereinafter defined)
ATTACHMENT A 734
4 42893660v.16
ARTICLE 1
TERM

1.1 Commencement Date. The Term shall commence on February 25, 2015, the “Commencement Date”.

1.2 Extension Options. Tenant shall have the option (each, an “Extension Option”) to extend the term of the Lease for four consecutive one-year terms (each, an “Extension Term”) upon prior written notice (“Tenant’s Election Notice”) to Landlord no later than ninety (90) days prior to the expiration of the then current Term of the Lease; provided, however, that at the time Tenant gives Tenant’s Election Notice to Landlord, and for the remainder of the then existing Term of the Lease, there is (i) no event of default by Tenant under the Lease and (ii) Tenant has not entered into a Transfer as to the Premises that are subject to such extension, whether or not consented to by Landlord. During any such Extension Term, the provisions of the Lease, as it may be amended in writing executed by each party to the Lease prior to the date of the commencement of such Extension Term, shall continue in full force and effect, except that Tenant shall accept the Premises in their then “AS-IS” condition, and there shall be no abatement of Rent, nor shall there be credit or allowance given to Tenant for improvements to the Premises solely as the result of Tenant exercising either Extension Term. The Basic Monthly Rent for each Extension Term shall be in the amount set forth in Item 5 of the Basic Lease Provisions.

Landlord and Tenant understand and agree that Tenant’s delivery of Tenant’s Election Notice shall bind Tenant to the applicable Extension Term. In no event shall Tenant have the right to exercise any Extension Option unless it has properly exercised the applicable prior Extension Option.

ARTICLE 2
RENT

2.1 Basic Monthly Rent. Tenant shall pay to Landlord, without prior notice or demand, without offset or deduction, and in addition to all other amounts payable by Tenant hereunder, annual rent, in equal monthly installments, in the amount set forth in Item 5 of the Basic Lease Provisions (“Basic Monthly Rent”), provided that monthly Landlord shall provide an invoice of any and all expenses (other than Basic Monthly Rent) that may be due and payable by Tenant hereunder, including without limitation any interest on past due rent or Late Fees (defined below), if any (the “Rent Expenses”). Notwithstanding the foregoing, in no event shall any failure by Landlord to provide such an invoice excuse Tenant’s failure to pay Basic Monthly Rent as and when due.

The Basic Monthly Rent and all other amounts payable hereunder shall be paid to Landlord in advance on the first day of each month during the Term, without deduction, offset or abatement, in lawful money of the United States of America at the office of Landlord in the Building, or to such place as Landlord may designate in writing.

Basic Monthly Rent and any other Rent (as defined in Section 2.5) due under this Lease for any period during the Term, which is for less than one (1) month, shall be a prorated ATTACHMENT A 735
5 42893660v.16
portion of the monthly amount due, based upon the actual number of days in that particular month.

Landlord shall have the right to accept all Rent and other payments, whether full or partial, and to negotiate checks in payment thereof without any waiver of rights, irrespective of any conditions to the contrary sought to be imposed by Tenant. Rent shall be deemed paid to Landlord when received by Landlord, or its designee, at Landlord’s address, or at such other address as Landlord shall have designated.

2.2 Interest on Past Due Rent. Basic Monthly Rent and any other Rent not paid when due shall bear interest from the date due until the date paid at the Federal Reserve Board Discount Rate, as of such due date, plus three percent (3%) per annum (“Interest Rate”). The payment of such interest shall not excuse or cure any default or modify any obligations of Tenant under this Lease. Notwithstanding the foregoing, the Interest Rate shall not accrue on Rent Expenses unless any payment thereof is not received by Landlord within five (5) days of Tenant’s receipt of an email therefor pursuant to Section 2.1.

2.3 Late Fee. Tenant acknowledges that the late payment by Tenant to Landlord of Rent will cause Landlord to incur costs not contemplated by this Lease, the exact amount of which will be difficult to ascertain. Such costs may include, without limitation, administrative costs, processing and accounting charges, and late charges which may be imposed on Landlord.

Accordingly, if any installment of Rent shall not be received by Landlord within five (5) days after the date that such amount is due and payable, then Tenant shall pay to Landlord, in addition to the interest provided above in Section 2.2, a late fee in the amount of five percent (5%) of the amount of such Rent (“Late Fee”). The parties agree that such Late Fee represents a fair and reasonable estimate of the costs Landlord will incur by reason of the late payment by Tenant.

Acceptance of such Late Fee by Landlord shall not constitute a waiver of Tenant’s default with respect to such overdue amount, nor prevent Landlord from exercising any of its rights or remedies hereunder. Any such Late Fee shall be due and payable by Tenant within five (5) business days after delivery of Landlord’s written notice thereof to Tenant and, if not paid when due, shall be added to the next installment of Basic Monthly Rent due and payable hereunder.

The parties agree that it would be impracticable and extremely difficult to fix Landlord’s actual damages in such event. The interest provided for in Section 2.2 and the Late Fee are separate and cumulative and are in addition to and shall not diminish or represent a substitute for any or all of Landlord’s rights or remedies under any other provision of this Lease. If a Late Fee is payable hereunder, whether or not collected, for any three (3) installments of Basic Monthly Rent during any twelve (12) month period, then all further Basic Monthly Rent shall, at Landlord’s sole option, automatically become due and payable quarterly in advance, rather than monthly, notwithstanding any provision of this Lease to the contrary. If any interest or late fees shall be due from Tenant hereunder, then upon receipt of any funds from Tenant, Landlord shall credit and apply such funds first to such interest or late fees, and then to any other monetary obligations of Tenant under this Lease, all in Landlord’s sole and absolute discretion.

2.4 Security Deposit. Tenant deposited with Main Street Stockton the sum of $111,668.20 (the “Prior Security Deposit”) as the security deposit under the terms of the Prior Lease, which Prior Security Deposit has been delivered to Wells Fargo Bank, National Association (the “Trustee”). Concurrently with Tenant’s execution of this Lease, (i) Landlord shall obtain from Trustee the Prior Security Deposit, which Tenant agrees is hereby delivered to Landlord as a partial Security Deposit under this Lease, and (ii) Tenant shall deliver to Landlord ATTACHMENT A 736
6 42893660v.16
the additional sum of $97,646.58 for the remainder of the Security Deposit, which amount represents the difference between the amount of the Prior Security Deposit and the total amount specified in Item 7 of the Basic Lease Provisions (“Security Deposit”). The Security Deposit shall be held by Landlord as security for the faithful performance by Tenant of all terms covenants and conditions of this Lease by Tenant. Tenant agrees that Landlord may apply the Security Deposit to remedy any failure by Tenant to repair or maintain the Premises, to perform any other obligations hereunder, and for past due Rent and future Rent damages that Landlord may recover under the Civil Code of California and any other Regulations now or hereafter in effect. If Tenant has kept and performed all terms, covenants and conditions of this Lease during the Term, Landlord shall, upon the expiration or termination hereof, promptly return any unapplied portion of the Security Deposit to Tenant, or the last permitted assignee of Tenant’s interest hereunder. Should Landlord use or apply any portion of the Security Deposit pursuant to the foregoing, Tenant shall replenish the Security Deposit to the amount required under the Lease within ten (10) business days after receipt of written notice from Landlord. Landlord shall not be required to keep the Security Deposit separate from its general funds, and Tenant shall not be entitled to interest on any Security Deposit. Tenant hereby waives any and all rights under and benefits of Section 1950.7 of the Civil Code of California and any similar Regulation (defined below) now or hereafter in effect.

2.5 Rent. As used herein, “Additional Rent” means all amounts required to be paid by Tenant under this Lease other than Basic Monthly Rent, and “Rent” means, collectively, Basic Monthly Rent and Additional Rent. Notwithstanding anything to the contrary contained herein, all Rent to be paid by Tenant to Landlord shall be delivered to Landlord at the notice address for CBRE set forth in Section 8 of the Basic Lease Provisions, until such time as Landlord may notify Tenant, in accordance with the terms of Section 18.13 hereof, that Landlord wishes for Tenant to deliver any and all Rent to another address.

ARTICLE 3

SIGNAGE

3.1 Tenant’s Right to Exterior Building Signs. As long as Tenant continues to lease and occupy the entirety of the Premises during the Term, Tenant shall have the exclusive right (a) to display its name on two (2) separate “eyebrow” signs (one above each of the two (2) separate retail entrances to the Premises) (each , a “Tenant’s Eyebrow Sign”, and, collectively “Tenant’s Eyebrow Signs”) and (b) to place white, vinyl tinting, at a size no greater than three (3) feet in height and three (3) feet in length on each of the two (2) separate retail entrances to the Premises, both of which are located on South Sutter Street, all as more specifically set forth herein (collectively, “Tenant’s Door Signage”, and, together with Tenant’s Eyebrow Signs, collectively, “Tenant’s Signs”). Tenant shall be permitted to install one of Tenant’s Eyebrow Signs (i) above the retail entrance to the Premises located on South Sutter Street, which Tenant’s Eyebrow Sign shall read “City of Stockton Permit Center”, and (ii) above the other retail entrance to the Premises located on South Sutter Street, which Tenant’s Eyebrow Sign shall reach “City of Stockton Revenue Center.” Tenant’s name depicted on each Tenant’s Eyebrow Sign shall be constructed using the Building standard raised chrome block lettering, in a size equal to the “eyebrow” sign located at the Building’s north entrance, which is depicted on Exhibit “F” attached hereto and made a part hereof (the “Existing Signage”). In addition to the foregoing, Tenant’s Signs must satisfy each of the following requirements:

ATTACHMENT A 737
7 42893660v.16
(a) Comply with all applicable governmental laws, statutes, regulations, rules, codes and ordinances;
(b) Comply with the provisions of this Lease;
(c) Have been approved in advance by all appropriate governmental agencies; (d) Have been approved in advance by Landlord (which approval shall not be unreasonably withheld, conditioned or delayed); and
(e) Comply with all instruments recorded or unrecorded against the Project.

Tenant shall not have any right to maintain an “eyebrow” sign on any other part of the Building other than as specifically set forth herein.

3.2 Tenant’s Installation of Signs. Installation of Tenant’s Signs shall be in accordance with the procedures and requirements of Article 6 below, except to the extent in conflict with Article 3. Tenant shall, at its sole cost and expense, install Tenant’s Signs. Such costs and expenses include, but are not limited, to the follows:
(a) Costs of Tenant’s Signs;
(b) Costs of obtaining permits and approvals;
(c) Costs of installing, maintaining, repairing and replacing Tenant’s Signs; (d) Costs associated with the removal of Tenant’s Signs, repair of any damage caused by such removal, and restoration of the sites of Tenant’s Signs on the Building to the condition in which those portions of the Building existed before the installation of Tenant’s Signs excluding ordinary wear and tear and damage due to casualty.

3.3 Removal, Repair and Restoration. On the sooner of (i) the failure of Tenant to lease the entire Premises, (ii) the failure of Tenant to occupy the entire Premises, (iii) the expiration or sooner termination, in accordance with the terms hereof, of the Lease, or (iv) at any time prior to the occurrence of an event described in clauses (i) through (iii), at Tenant’s election, Tenant shall remove, at its sole cost and expense, each of Tenant’s Signs, repair any damage caused by such removal and restore those parts of the Building on which Tenant’s Signs were located to the condition that existed before the installation of Tenant’s Signs, ordinary wear and tear and damage due to casualty excepted. Such removal, repair and restoration shall be in accordance with the procedures and requirements of Article 6 above, except to the extent in conflict with this Article 3.

3.4 Maintenance of Tenant’s Signs. Tenant, at its sole cost and expense, shall at all times during the Term maintain Tenant’s Signs in working order and first class condition.

3.5 Prohibited Signage and Other Items. Tenant shall not, without the prior written consent of Landlord, place, construct or maintain any sign, advertisement, awning, banner or other decoration on or visible from, or otherwise use, the exterior of the Premises (including, but not limited to, the outer surfaces of the exterior walls and doors of the Premises, the roof of the Building, the Common Facilities, and the public areas of the Project), and in no event shall any sign or other decoration visible from the exterior of the Premises, including, but not limited to, ATTACHMENT A 738
8 42893660v.16
any of Tenant’s Signs, be illuminated. Tenant shall pay the cost of any such sign approved by Landlord together with the costs of installation thereof.

3.6 Building Directory Signage. Landlord will provide standard lettering identifying Tenant for the building directories as Landlord, in its sole discretion, may determine. Landlord shall have the sole right to determine and change from time to time the type of such directory(ies) and such sign and the contents thereof including, but not limited to, size of letters, style, color and placement. Any changes to the directory signage shall be at Tenant’s expense.

3.7 Rights Personal to Tenant. Tenant’s signage rights set forth in this Article 3, including, but not limited to, Tenant’s right to Tenant’s Signs, are personal to The City of Stockton, as the original “Tenant” under this Lease, and such rights are not transferrable, and shall not be transferred, to a transferee in connection with any Transfer or to anyone else without Landlord’s prior written consent, which may be withheld in Landlord’s sole discretion.

ARTICLE 4

SERVICES, FACILITIES AND MAINTENANCE

4.1 Landlord’s Provision of Services.
(a) Landlord shall furnish to the Premises heating, ventilation and air conditioning (collectively, “HVAC”) (excluding HVAC services supplied in connection with Tenant’s HVAC Chillers (as hereinafter defined)), telecommunications service, water for reasonable and normal drinking, lavatory, and emergency sprinkler use and replacement light bulbs and/or fluorescent tubes and ballasts for standard overhead fixtures for reasonable and normal office and technology use as of the Commencement Date of this Lease. Landlord shall furnish such services to the Premises between the hours of approximately 7:00 a.m. and 6:00 p.m., Mondays through Fridays, except those holidays designated yearly by Landlord.

Notwithstanding the foregoing, Landlord shall furnish to the Premises HVAC services, to the extent required for Tenant’s HVAC Chillers (collectively, the “Chiller Services”), and electricity twenty-four (24) hours per day, seven (7) days per week, and three hundred sixty-five (365) days per year. All services described in this Section 4.1(a) shall be provided subject to Building-wide shutdown for routine maintenance or due to force majeure (as defined in Section 18.5). Upon Tenant’s written request, Landlord shall provide additional HVAC or any of the other utilities or services referred to above (other than Chiller Services and electricity) at Tenant’s request to Landlord. Tenant shall pay to Landlord an amount reasonably determined by Landlord from time to time for such additional services (other than Chiller Services and electricity). Tenant shall keep and cause to be kept closed all window coverings when necessary because of the sun’s position, and Tenant also shall at all times cooperate fully with Landlord and abide by all the regulations and requirements which Landlord may prescribe for the proper functioning and protection of the HVAC system. Notwithstanding anything to the contrary contained herein, Tenant shall provide any and all telecommunications cabling for the Premises necessary for Tenant to use the Premises in accordance with the Permitted Uses set forth in Section 9 of the Basic Lease Provisions; in no event, shall Landlord be responsible for providing such services to the Premises.

ATTACHMENT A 739
9 42893660v.16
(b) Tenant shall provide customary and routine cleaning and janitorial service, at Tenant’s sole cost and expense, and without any Rent abatement, offset, rebate or any credit of any kind against Rent, for all portions of the Premises for which Tenant has exclusive use, which Landlord and Tenant agree includes all portions of the Premises comprising office space, and specifically excluding public restrooms and any elevator landings, located on the first (1st), third (3rd) and seventh (7th) floors and all portions of the Premises, inclusive of office space and restrooms, but excluding elevator landings, located on the fourth (4) floor (collectively, the “Exclusive Premises”), and Landlord shall have no obligation to provide janitorial service for the Exclusive Premises at any time during the Term of this Lease. Notwithstanding anything to the contrary contained herein, the indemnification provisions of Section 9.1 below shall apply in the event Landlord suffers any loss, liability, claim, damage or expense arising out of or resulting from Tenant’s provision (or lack thereof) of its own janitorial services as permitted under this clause (b). Landlord shall provide routine cleaning and janitorial service for all portions of the Premises that are not part of the Exclusive Premises; provided, that such portions of the Premises are used exclusively as offices and for the Permitted Uses and are kept reasonably in order by Tenant with reasonable wear and tear excepted. All janitorial services, whether provided by Landlord or Tenant shall be consistent with janitorial services provided at comparable buildings in the Stockton, California area. Notwithstanding the first (1st) sentence of this subsection (b) to the contrary, if a Transfer (as hereinafter defined) is made in accordance with Article VIII hereof, with respect to all or a portion of the Premises, within thirty (30) days after such Transfer, the assuming or subletting party may elect, upon written notice to Landlord, to cause Landlord to provide customary and routine cleaning and janitorial services for so much of the Premises, inclusive of the Exclusive Premises, as has been assumed or sublet by such party in accordance herewith.
(c) Landlord shall replace building standard lighting in the Premises, as required, without charge to Tenant.

4.2 [Intentionally Omitted.]

4.3 Interruption of Standard Services. Landlord shall not be in default hereunder or liable for any damages directly or indirectly resulting from the inadequacy, defect or failure in the supply of any service described in Section 4.1 caused by (i) the installation or repair of any equipment in connection with the furnishing of utilities or services, (ii) acts of God or the elements, labor disturbances of any character, any other accidents or any other conditions beyond the reasonable control of Landlord, or by the making of repairs or improvements to the Premises or the Project, or (iii) the limitation, curtailment, rationing or restriction imposed by any governmental agency or service or utility supplier on use of water or electricity, gas or any other form of energy or any other service or utility whatsoever serving the Premises or the Project.

Furthermore, Landlord shall be entitled, without any obligation or compensation to Tenant, to cooperate voluntarily in a reasonable manner with the efforts of national, state or local governmental agencies or service or utility suppliers in reducing the consumption of energy or other resources; if Landlord shall so cooperate, Tenant shall also reasonably cooperate therewith.

Notwithstanding the foregoing, after the tenth (10th) consecutive day of a failure to supply any of the services described in Section 4.1, to the extent within Landlord’s reasonable control, Tenant shall be entitled to an abatement of Basic Monthly Rent beginning from the first day of such failure, until such time as such utilities are restored. If such utilities cannot be restored within forty-five (45) days, to the extent within Landlord’s control, Tenant may terminate this Lease by fifteen (15) days prior written notice to Landlord; provided, however, if Tenant does not elect to ATTACHMENT A 740
10 42893660v.16
terminate this Lease it shall be entitled to abate Basic Monthly Rental until such time as such utilities are restored, commencing on the tenth (10th) consecutive day of such failure to supply services.

4.4 Common Facilities. The term “Common Facilities” as used in this Lease means all areas and facilities within the exterior boundaries of the Project which are provided and designated from time to time by Landlord for the general use and convenience of Tenant and some or all other tenants of the Project and their respective employees, invitees or other visitors.

Tenant, its employees and invitees shall have the nonexclusive right to use the Common Facilities along with others entitled to use same, subject to Landlord’s rights and duties as hereinafter set forth and subject to the other provisions of this Lease. Without Tenant’s consent and without liability to Tenant, and provided that Landlord uses reasonable efforts to minimize any resultant interference with Tenant’s use of and access to the Premises, Landlord may do the following:
(a) Establish and enforce reasonable rules and regulations concerning the maintenance, management, use and operation of the Common Facilities; (b) Close off any of the Common Facilities to whatever extent required in the reasonable opinion of Landlord and its counsel to prevent a dedication of any of the Common Facilities or the accrual of any rights by any person or the public to the Common Facilities; provided, that in no event shall Tenant’s access to the Premises be completely or unreasonably restricted;
(c) Close any of the Common Facilities for maintenance, repair, alteration or improvement purposes;
(d) Select, appoint and/or contract with any person for the purpose of operating and maintaining the Common Facilities; and
(e) Change the size, use, shape or nature of any of the Common Facilities.

4.5 Parking. Tenant shall have the non-exclusive right, so long as this Lease remains in full force and effect, and subject to applicable rules and regulations promulgated by Landlord from time to time, to use the number of reserved and unreserved parking spaces specified in the Basic Lease Provisions in the Parking Garage, upon such terms and conditions as may be specified in the Basic Lease Provisions. Landlord shall have certain rights and authority relating to the use and control of the Parking Garage, including, without limitation, the right to rearrange or relocate the parking spaces and improvements in the Parking Garage, to close all or any portion of the Parking Garage for the purpose of maintaining, repairing, restoring, altering or improving same, and to do and perform such other acts in, to and with respect to the Parking Garage at the sole discretion of Landlord; provided that, if Landlord closes all or any portion of the Parking Garage or relocates Tenant’s parking spaces, Landlord will use reasonable efforts to provide to Tenant alternate parking arrangements within a reasonable distance of the Parking Garage; provided, that such alternate parking arrangements must be within the Project. Tenant may not sell, assign or transfer its parking rights under this Lease, except pursuant to a Transfer (as defined in Section 8.1) consented to by Landlord or a Permitted Transfer (as defined in Section 8.3); provided, however, that Tenant may rent any or all of Tenant’s Spaces to any employees, consultants, advisors, vendors and subcontractors of Tenant working in the Building.

Tenant and its invitees, visitors and customers shall also have the right to use in common with ATTACHMENT A 741
11 42893660v.16
other tenants of the Building and their invitees, visitors and customers and the general public any portions of the Parking Garage designated for public use, subject to the rates, rules and regulations, and any other charges, fees and taxes to be collected by Landlord, for such Parking Garage. Landlord reserves the right to establish and alter, from time to time, all such rates, rules and regulations. Tenant acknowledges that neither Landlord nor any agent of Landlord has made any representation or warranty as to the suitability of the Parking Garage or as to the availability of parking spaces in the Parking Garage for the conduct of Tenant’s business except as set forth in the Basic Lease Provisions and in this Lease. Tenant hereby acknowledges and agrees that Tenant shall be solely responsible for the enforcement of its right to use the Reserved Spaces within the specified location in the Parking Garage, and Landlord shall not have any obligation or liability to Tenant therefor; provided, however, that Tenant hereby agrees to notify any employees or contractors that may be operating any Building security system of any enforcement action proposed to be taken by Tenant at least one (1) hour prior to Tenant taking such enforcement action and shall provide such employees and/or contractors with a summary of the enforcement action proposed to be taken. Landlord may, but is not required, to reasonably assist Tenant in the enforcement of its right to the Reserved Spaces if Tenant complies with the notice requirements contained in the immediately preceding sentence, requests such assistance and provides Landlord with the information necessary to permit Landlord or any employees or contractors that may be operating any Building security system to provide such assistance.

4.6 Excess Utilities. Tenant shall not, without the prior written consent of Landlord, use in the Premises any apparatus, device, machine or equipment using excess water; nor shall Tenant connect any apparatus or device to sources of water except through existing water pipes in the Premises. If Tenant shall require excess water or any other resource (except for electricity and bandwidth for telecommunications) in excess of that customarily supplied for use of similar premises as general office space, service centers, and technology space, Tenant shall first request the consent of Landlord and obtain, at Tenant’s sole cost and expense, any additional consent required from governmental authorities. In the event that (i) Landlord gives its consent or (ii) Landlord determines, in Landlord’s sole judgment, that Tenant’s use of Premises has resulted in Tenant consuming excess water or any other resource (except for electricity and bandwidth for telecommunications) and, in either case any such additional governmental consent is obtained, then Landlord may cause a separate metering device to be installed in the Premises so as to measure the amount of the resource consumed within the Premises. The cost of any such separate metering device including, but not limited to, the cost of installation, maintenance and repair thereof shall be paid by Tenant. Tenant shall promptly pay the cost of all excess resources consumed within the Premises, together with any additional administrative expense incurred by Landlord in connection therewith. Notwithstanding anything to the contrary contained herein, in no event shall Landlord be required to provide bandwith services to the Premises, and all such services shall be provided by Tenant (or Tenant shall arrange for the provision of such services), at Tenant’s sole cost and expense.

4.7 Payment as Additional Rent. Any sums payable under this Article 4 shall be considered Additional Rent and may be added to any installment of Rent thereafter becoming due, and Landlord shall have the same remedies for a default in payment of such sums as for a default in the payment of any other Rent.

4.8 Landlord to Maintain. Subject to the provisions of Sections 6.3 and 4.9 and Article 12, Landlord shall maintain in reasonably good order and condition the Common Facilities, Parking Garage, the foundation and structural portions of the Building (including, ATTACHMENT A 742
12 42893660v.16
without limitation, the structural soundness of the roof (structure and membrane), foundations, the exterior walls of the Building, and load bearing walls), and the Building systems providing the services and utilities to be furnished by Landlord pursuant to Section 4.1 above (including, without limitation, the Building HVAC, all wiring, plumbing, other conduits and utility lines and pipes).

4.9 Tenant to Maintain. Notwithstanding anything to the contrary contained herein, Tenant shall be required to maintain and, if necessary or desirable, repair, at its sole cost and expense, with contractors approved by Landlord (which approval shall not be unreasonably withheld, conditioned or delayed) each of the Tenant’s HVAC chillers installed by Tenant (regardless of whether such chillers were installed prior or subsequent to the date hereof), which are used solely for the purpose of cooling all or any part of the technology or communications equipment on the Premises (collectively, the “Tenant’s HVAC Chillers”). In connection with Tenant’s maintenance or repair of the Tenant’s HVAC Chillers, Tenant shall be permitted access to Tenant’s HVAC Chillers upon twenty-four (24) hours prior written notice to Landlord, and, notwithstanding the foregoing, Landlord hereby agrees to use commercially reasonable efforts to provide Tenant same-day access to Tenant’s HVAC Chillers for the purpose of maintaining or repairing same, if Tenant’s request for such access is received by Landlord between the hours of approximately 7:00 a.m. and 6:00 p.m., Monday through Friday, excluding Landlord designated holidays; provided, however, that in the event of an emergency, access will be provided at other times as soon as practicable at Tenant’s cost.

4.10 Building Security; Premises Security. Tenant shall (or shall cause a third party to) provide, maintain and operate, at Tenant’s sole cost and expense, a security system or service, which shall function as the primary security for the Premises at any time during which a Permitted City Council Meeting (as hereinafter defined) is to take place within the City Council Chambers (“Tenant’s Security”). All employees and contractors operating Tenant’s Security shall coordinate with Landlord and any employees and contractors operating any Building security system to ensure that Tenant’s Security does not interfere with, or unduly burden, the operation of any Building security system. If the security provided for the Building needs to be increased or additional Building security costs are incurred by Landlord as a result of any Permitted City Council Meeting occurring on Premises, or for any other reason in connection with Tenant’s use of Suite 124 as the City Council Chambers, then Tenant shall be responsible for, and shall promptly reimburse Landlord for, any such increased costs. Notwithstanding the foregoing, Tenant shall remain responsible for any costs for which Tenant is required to reimburse Landlord under the terms hereof in connection with Landlord’s maintenance and provision of any Building security. In addition to the foregoing, Tenant shall be permitted, at its sole discretion, cost and expense, to maintain and operate an additional security system or service within the Premises (including, but not limited to, placing additional security personnel within the Premises), which may, upon Tenant’s election, function as the primary security for the Premises (the “Optional Primary Security”). Upon such an election by Tenant, employees and contractors operating such Optional Primary Security for the Premises shall coordinate with Landlord and any employees and contractors operating any Building security system to ensure that (i) such Optional Primary Security does not interfere with, or unduly burden, the operation of any Building security system, and (ii), to the extent such Optional Primary Security (or any portion thereof) is in the form of an electronic security system rather than additional security personnel, Landlord (or Landlord’s property manager) has reasonable access to such Optional Primary Security (or applicable portion thereof), to ensure such Optional Primary Security (or ATTACHMENT A 743
13 42893660v.16
applicable portion thereof) does not unduly burden or interfere with any other tenant’s use and occupancy of the Building.

ARTICLE 5

ACCEPTANCE OF PREMISES
Tenant acknowledges that neither Landlord nor any agent of Landlord has made any representations or warranties with respect to the suitability or fitness of the Premises for the conduct of Tenant’s business or for any other purpose. The taking of possession or use of the Premises by Tenant shall conclusively establish that the Premises and the Building were at such time ready for occupancy and in conformity with the provisions of this Lease in all respects.

Nothing contained in this Article shall affect the commencement of the Term or the obligation of Tenant to pay any Rent due under this Lease.

ARTICLE 6

ALTERATIONS AND REPAIRS

6.1 Alterations; Initial Improvements. Subject to Section 6.4, Tenant shall be permitted to make alterations, improvements or additions to the Premises commencing as of the Effective Date for the initial build-out of the Premises (the “Initial Improvements”). Landlord shall have the right to approve all plans and specifications for the proposed Initial Improvements, which approval shall not be unreasonably withheld, conditioned or delayed. If Landlord does not approve of or provide comments to plans and specifications within fourteen (14) business days of Tenant's submission of the same to Landlord, then the plans and specifications shall be deemed approved. For all alterations, improvements and additions other than the Initial Improvements, Tenant shall not, without the prior written consent of Landlord, make any alterations, improvements or additions to the Premises or the Project or any part thereof. All alterations, improvements or additions, made to the Premises shall become Landlord’s property and remain upon the Premises at the termination or expiration of the Lease (excepting only Tenant’s moveable office furniture, technology equipment (including, without limitation, the Tenant’s HVAC Chillers, subject to Section 16.1), trade fixtures and office and professional equipment); provided, however, that Landlord shall have the right to require Tenant to remove such alterations, improvements or additions made by Tenant after the date of this Lease at Tenant’s cost upon the termination or expiration of this Lease, and the repair of any damage caused to the Premises, the Building or any other portion of the Project as a result of any such removal shall be paid for by Tenant. All alterations, improvements and additions shall be made in compliance with all applicable Regulations (defined below) and in a good and first-class workmanlike manner using new materials, which shall be at least equal in quality to the original installations.

Any contractor selected to make such alterations, additions or improvements must (a) be bondable and licensed in the State of California; (b) be approved in advance, in writing, by Landlord; and (c) provide insurance coverage acceptable to Landlord naming Landlord, Landlord’s asset manager, and Landlord’s property manager as additional named insureds.

Except with respect to the Initial Improvements, at Landlord’s option, any alterations, additions or improvements desired by Tenant shall be made by Landlord (or its contractors) for Tenant’s account, and Tenant shall pay the cost thereof to Landlord prior to Landlord’s contracting for such work; provided, however, that the bid obtained by Landlord shall not exceed the lowest bona fide bid, from a contractor reasonably satisfactory to Landlord, theretofore obtained by ATTACHMENT A 744
14 42893660v.16
Tenant and communicated in writing to Landlord. Upon completion of any alterations, additions or improvements, Tenant shall furnish to Landlord a set of “as built” plans and specifications therefor, in both electronic (CAD) and print formats, and, within ten (10) days after such completion, Tenant shall cause an appropriate notice of completion to be recorded in the Official Records of San Joaquin County, California. Upon request, Landlord will advise Tenant of Landlord’s approved contractor(s). After the date of execution of this Lease, if Tenant makes any alterations or improvements to the Premises, Tenant shall pay a construction administration fee, if any, owed to Landlord’s property manager pursuant to the then existing management agreement between Landlord and Landlord’s property manager. Notwithstanding the foregoing, Landlord’s prior consent shall not be required for any alterations that (i) are reasonably estimated to cost less than Ten Thousand Dollars ($10,000); (ii) are not visible from outside the Premises; (iii) do not affect the structural portions of the Buildings; and (iv) comply with all Regulations.

6.2 Indemnity. Tenant indemnifies, defends, protects and holds Landlord and the other Landlord Parties (as defined in Section 9.1) harmless from all costs, damages, liens for labor, services and materials relating to work performed by Tenant or its agents, whether prior to or following the Commencement Date, and shall defend and hold Landlord and the other Landlord Parties harmless from all costs, damages, liens and expenses (including attorney’s fees and court costs) related thereto.

6.3 Tenant. Except as set forth in Section 4.8 and Article 12 below, Tenant shall, at all times during the Term and, at Tenant’s sole cost and expense, keep the Premises and every part thereof in good order, condition and repair, reasonable wear and tear excepted. All repairs performed by Tenant shall be of quality or class at least equal to the original mode of construction of the Building. Tenant hereby waives any and all rights under and benefits of subsection 1 of Section 1932, and Sections 1941 and 1942, of the Civil Code of California and any similar Regulation (defined below) now or hereafter in effect. It is hereby understood and agreed that Landlord has no obligation to alter, remodel, improve, repair, decorate or paint the Premises or any part thereof, except as specified in Section 4.8 and Article 12 below, and that no representations relating to the condition of the Premises or any portion of the Project, including, but not limited to the Building, have been made by Landlord (or any employee or agent thereof) to Tenant, except as may be expressly set forth in this Lease. If, at any time, Tenant fails to make any repair required to the Premises, then Landlord shall have the right, if it so elects, to make such repair and to immediately charge the costs of the same, together with a five percent (5%) overhead and administrative cost, to Tenant as Additional Rent.

6.4 Cafeteria. Tenant shall be responsible for constructing and paying for all alterations, improvements and additions at the Premises; provided, however, that Landlord shall be responsible for delivering the first floor former cafeteria space identical on the Floor Plan in shell condition at Landlord’s expense. Landlord shall apply for a demolition permit from the City of Stockton covering the first floor former cafeteria space (the “Demolition Permit”) no later than ten (10) days after the Effective Date. Landlord shall then have sixty (60) days after the date upon which the Demolition Permit is issued to Landlord within which to deliver the first floor former cafeteria space in shell condition, which shall include removing and disposing of all interior finishes and removing the raised floor; provided, however and notwithstanding anything to the contrary contained herein, in no event shall Landlord be required to deliver the first floor former cafeteria space in shell condition prior to March 5, 2015.

ATTACHMENT A 745
15 42893660v.16

6.5 Liens. Tenant shall keep the Project free from any liens arising out of any work performed, material furnished or obligations incurred by Tenant. In the event that Tenant shall not, within ten (10) days following the imposition of any such lien, cause the same to be released of record by payment or posting of a proper bond or other security reasonably acceptable to Landlord, Landlord shall have, in addition to all other remedies provided herein and at law or in equity, the right, but no obligation, to cause same to be released by such means as it shall deem proper including, but not limited to, payment (from the Security Deposit or otherwise) of the claim giving rise to such lien. All such sums paid by Landlord and all expenses incurred by it in connection therewith shall be considered Additional Rent and shall be payable to it by Tenant on demand with interest at the Interest Rate (as defined in Section 2.2). Landlord may require, at Landlord’s sole option, that Tenant cause to be provided to Landlord, at Tenant’s sole cost and expense, a performance and labor and materials payment bond acceptable to Landlord with respect to any improvements, additions or alterations to the Premises. Landlord shall have the right at all times to post and keep posted on the Premises any notices permitted or required by applicable Regulation (defined below), or which Landlord shall deem proper, for the protection of Landlord, the Project and any other party having an interest therein from mechanics’ and materialmen’s liens, and Tenant shall give Landlord at least five (5) business days’ prior written notice of commencement of any work on the Premises.

ARTICLE 7

PREMISES

7.1 [Intentionally Omitted].

7.2 Permitted Use. Tenant shall use and occupy the Premises only for the Permitted Uses set forth in the Basic Lease Provisions and in accordance with the terms of this Section 7.2. (a) Tenant shall be permitted to use all or part of the Premises for general office use, use as permit and service centers for Tenant’s customers, or operation of an information technology center. Should Tenant wish to use a portion of the Premises as the location of the City Council chambers, then Tenant must locate the City Council chambers within that portion of the Premises commonly known as Suite 124 (in such capacity, the “City Council Chambers”); provided, that Tenant’s right to locate the City Council chambers within Suite 124 is conditioned upon all regularly scheduled City Council meetings, open to the general public, not beginning, or being scheduled to begin, prior to 6:30 P.M. on any given day (such meeting, a “Regularly Scheduled City Council Meeting”), and Tenant delivering to Landlord’s property manager written notice of the date and time of each Regularly Scheduled City Council Meeting to be held within the City Council Chambers, which written notice shall be provided to Landlord’s property manager no later than the earliest date upon which Tenant is required to provide such notice to the general public under all applicable laws, rules and regulations. The start-time restriction set forth in the immediately preceding sentence shall only apply to Regularly Scheduled City Council Meetings, and, as such, such restriction shall not apply to meetings held in the City Council Chambers (i) that are not Regularly Scheduled City Council Meetings, open to the general public, or (ii) emergency City Council meetings that are called and held pursuant to Section D.4(a) and (b) of the Council Policy ((i) and (ii), together with the Regularly Scheduled City Council Meetings, collectively, the “Permitted Meetings”). Consistent with the foregoing, Tenant’s right to use Suite 124 for the City Council Chambers is conditioned upon Tenant delivering to Landlord, prior to any use of Suite 124 therefor, a copy of Policy No.

ATTACHMENT A 746
16 42893660v.16
100-3, Rules For Conduct of City Council Meetings, in the Stockton Council Policy Manual, modified to reflect that all Regularly Scheduled City Council Meetings shall begin (and shall be scheduled to begin) no earlier than 6:30 P.M. on any given day. In no event shall Tenant be permitted to use any other portion of the Premises (other than Suite 124) as the location of the City Council Chambers or, except as set forth in clause (c) below, for any business related thereto.
(b) If Tenant chooses to locate the City Council Chambers within Suite 124 and, in connection therewith, complies with the conditions precedent thereto set forth in clause (a) above, then Landlord and Tenant agree that the general public shall have access to the City Council Chambers via the first (1st) floor Building lobby, and any person (including any member of the general public) that may be attending a Permitted Meeting within the City Council Chambers, or that otherwise visits the Building for purposes of conducting business within Tenant’s offices located within the Premises, shall have access to the restrooms located within the Common Facilities on the first floor of the Building lobby. (c) Notwithstanding the foregoing, if at any time or from time to time, attendance at any Permitted Meeting being held in the City Council Chambers exceeds the maximum capacity legally and comfortably permitted within Suite 124, then Tenant shall use other portions of the Premises located on the first floor of the Building to provide additional capacity for such meeting, such that all overflow seating (or standing only area) required for any such meeting shall be located in such other portions of the Premises, and Tenant’s Security and any Building security shall be clearly instructed to direct, and shall direct, all persons attending such meeting that cannot be accommodated within the City Council Chambers, to those other portions of the Premises that Tenant has designated for overflow capacity in accordance with the terms of this clause (c). In no event shall any additional capacity or overflow area be provided or located within any portion of the Building lobby or any other portion of the Building, except for the first floor of the Premises.
(d) If an Event of Default by Tenant occurs under this Section 7.2, then, in addition to all other rights and remedies provided to Landlord under Article 13 hereof, Landlord may terminate Tenant’s right to use Suite 124 as the City Council Chambers until such time as Tenant cures such violation (and Landlord agrees to accept such cure) and obtains written confirmation from Landlord that Tenant is, once again, permitted to use Suite 124 as the City Council Chambers in accordance with the terms hereof. Notwithstanding the foregoing, if an Event of Default by Tenant occurs under this Section 7.2more than two (2) times in any calendar year, then, in addition to all other rights and remedies provided to Landlord under Article 13 hereof, Landlord may terminate Tenant’s right to use Suite 124 as the City Council Chambers for the remainder of the Lease Term, in which case, this Section 7.2 shall be of no further force or effect.

7.3 Conduct of Business.
(a) Tenant shall not do or permit anything to be done in or about the Project which will, in any way, obstruct or interfere with the rights of other tenants or occupants of the Building, or injure or annoy them, or allow the Premises or the Project to be used for any improper, immoral, unlawful or objectionable purpose, nor shall Tenant cause, maintain, or permit any nuisance or waste in, on, or about the Project.

ATTACHMENT A 747
17 42893660v.16
(b) Tenant shall not use the Premises or permit anything to be done in or about the Premises or the Project which shall: (i) conflict with any law, statute, ordinance, or governmental rule or regulation now in force or that may hereafter be enacted or promulgated (including without limitation the Americans with Disabilities Act, as the same may be amended from time to time), the requirements of the Certificate of Occupancy for the Building or with the requirements of any covenant, condition or restriction affecting the Project (collectively, “Regulations,” and individually, a “Regulation”); or (ii) except as a result of a Permitted Use, increase the rate for any fire insurance in effect for the Building or cause a cancellation of such insurance or otherwise negatively affect said insurance in any manner. Tenant shall, at its sole cost and expense, promptly comply with all Regulations in force or which may hereafter be in force, and with the requirements of any fire insurance underwriters or other similar body affecting the use and occupancy of the Premises; provided, that in no event shall Tenant be required to make any (x) structural improvements or capital expenditures, including, but not limited to, capital improvements, capital repairs, capital equipment, and capital tools, or (y) rental payments or other related expenses incurred in connection with leasing equipment ordinarily considered to be of capital nature to the Premises; provided, however, that the foregoing provision shall be subject in all respects to any and all indemnification obligations of Tenant set forth herein.

7.4 [Intentionally Omitted].

7.5 Load and Equipment Limits. Tenant shall not place a load upon any floor of the Premises which exceeds the load per square foot which such floor was designed to carry, as determined by Landlord or Landlord’s structural engineer, but in no event greater than that allowed under the current applicable building code. The cost of any such determination made by Landlord’s structural engineer shall be paid for by Tenant upon demand. Tenant shall not install business machines or mechanical equipment which cause noise or vibration to such a degree as to be objectionable to Landlord or other Building tenants. Notwithstanding the foregoing, Tenant represents and warrants that Tenant has been in possession of the Premises prior to the execution of this Lease, and any and all improvements existing at the Premises, and equipment located at the Premises, is permitted and not in violation of this Lease. Additionally, as of the Commencement Date and for the duration of this Lease, any action taken by Tenant to maintain, supplement, improve or replace such improvements or equipment, as permitted under this Lease, will not be deemed to violate this Section 7.6.

7.6 Notice. Tenant shall give Landlord prompt notice of any damage to or defective condition in any part or appurtenance of the Building’s mechanical, electrical, plumbing, HVAC or other systems serving, located in, or passing through the Premises.

7.7 Personal Property Taxes. Tenant shall pay before delinquency all taxes, assessments, license fees, and other charges that are levied and assessed against Tenant’s trade fixtures and other personal property installed or located in or on the Premises, and that become payable during the Term (the “Personal Property Taxes”). On demand by Landlord, Tenant shall furnish Landlord with satisfactory evidence of these payments. If any taxes on Tenant’s personal property are levied against Landlord or Landlord’s property, or if the assessed value of the Building and other improvements in which the Premises are located is increased by the inclusion of a value placed on Tenant’s personal property or leasehold improvements, as determined by Landlord, and if Landlord pays the taxes on any of these items or the taxes based on the increased assessment of these items, Tenant, on demand, shall immediately reimburse Landlord ATTACHMENT A 748
18 42893660v.16
for the sum of the taxes levied against Landlord, or the proportion of the taxes resulting from the increase in Landlord’s assessment. Landlord shall have the right to pay (and Tenant shall have the obligation to reimburse Landlord for) any and all Personal Property Taxes regardless of the validity of the levy.

7.8 Real Estate Taxes. To the extent Real Estate Taxes (as hereinafter defined) are levied or assessed against the Project, Landlord shall pay before delinquency all such Real Estate Taxes; provided, however that Landlord shall have the right to undertake an action or proceeding against the applicable collecting authority seeking an abatement of Real Estate Taxes or a reduction in the valuation of the Project (or any portion thereof) and/or contest the applicability of any Real Estate Taxes. In any instance where any such permitted action or proceeding is being undertaken by Landlord, Tenant shall cooperate reasonably with Landlord, and execute any and all documents reasonably required in connection therewith. Landlord shall be entitled to any refund of Real Estate Taxes received by Tenant or Landlord, whether or not such refund was a result of actions or proceedings instituted by Landlord. As used herein the term “Real Estate Taxes” means any form of assessment, levy, charge, tax, or imposition imposed by any authority having the direct power to tax, including any city, county, state or federal government, or any school, agricultural, lighting, drainage or other improvement or special assessment district thereof, or any other governmental charge, general and special, ordinary and extraordinary, foreseen and unforeseen, which may be assessed against any legal or equitable interest of Landlord in the Project, but specifically excluding any and all Personal Property Taxes.

7.9 Possessory Tax. Notwithstanding anything to the contrary contained herein, Tenant shall pay, before delinquency, all possessory interest or use taxes, assessments, or fees levied or assessed upon the Premises, or any portion thereof.

ARTICLE 8

ASSIGNMENT AND SUBLETTING

8.1 Transfer. Tenant shall not cause or permit any of the following without the prior written consent of Landlord, which consent shall not be unreasonably withheld, conditioned or delayed (any of the following, a “Transfer”): (a) assign, mortgage, pledge, encumber or otherwise transfer, voluntarily, by operation of law, or otherwise, any interest in this Lease, the term or estate hereby granted, or any interest hereunder; (b) permit the Premises or any part thereof to be utilized by anyone other than Tenant (whether as concessionaire, franchisee, licensee, permittee or otherwise); or (c) except as hereinafter provided, sublet or offer or advertise for subletting the Premises or any part thereof. Tenant shall not permit any transferee to further assign, sublease, hypothecate, encumber or otherwise transfer any such interest, without obtaining Landlord’s prior written consent. In determining whether to grant consent to a Transfer, Landlord may consider various factors including, without limitation, the following:
(w) business criteria relating to the proposed transferee’s background, experience, reputation, general operating ability and ability to perform Lease obligations, and potential for succeeding in its business, (x) financial criteria relating to the proposed transferee’s financial responsibility, credit rating and capitalization, (y) the identity and personal characteristics of the proposed transferee and its invitees and guests, and (z) the nature of the proposed use and business of the proposed transferee and its effect on the tenant mix of the Building. Without limiting the generality of the foregoing, Landlord hereby reserves the right to reasonably condition consent to any Transfer upon Landlord’s determination that (i) the proposed transferee is at least as ATTACHMENT A 749
19 42893660v.16
financially and morally responsible as Tenant then is, or was upon the execution hereof, whichever is greater, and (ii) the proposed transferee shall use the Premises in compliance with all applicable Regulations. Notwithstanding any provision in this Lease to the contrary, but subject to Landlord’s agreement not to unreasonably withhold consent as set forth in the first sentence of this Section 8.1, Tenant shall not enter into any proposed Transfer (1) with a prospective tenant that is negotiating directly with Landlord to lease space in the Building, (2) at a time when Landlord is offering space for lease in the Building of similar size and for a similar term as that space being offered by Tenant for sublease or assignment within the Building, or (3) that would result in (A) detraction from the first-class character or image of the Building or diminution in the value thereof, (B) the Premises being occupied by more than one (1) tenant, or (C) a breach by Landlord of any then-existing exclusive right in favor of any other tenant of the Building, any loan obligation or agreement, any covenants, conditions and restrictions of record, or any insurance policy. Any Transfer entered into without Landlord’s consent, shall be voidable and, at Landlord’s election, shall constitute a default under this Lease. All Transfers are subject to Section 11.1.

8.2 Notice and Procedure. If at any time or from time to time during the Term, Tenant desires to enter into a Transfer, then at least thirty (30) days, but not more than one hundred twenty (120) days, prior to the date when Tenant desires the Transfer to be effective (the “Transfer Date”), Tenant shall give Landlord a notice (the “Notice”) which shall set forth the name, address and business of the proposed assignee or sublessee, information concerning the character of the proposed assignee or sublessee (including financial statements, business, credit and personal references and history), a detailed description of the space proposed to be assigned or sublet, which must be a single, self-contained unit (the “Space”), any rights of the proposed assignee or sublessee to use Tenant’s improvements, the intended Transfer Date, and the fixed rent and/or other consideration and all other material terms and conditions of the proposed Transfer, all in such detail as Landlord may reasonably require. If Landlord reasonably requests reasonable additional detail, the Notice shall not be deemed to have been received until Landlord receives such reasonably requested reasonable additional detail. Landlord shall have the option, exercisable by giving notice to Tenant at any time within thirty (30) days after Landlord’s receipt of the Notice (the “Option Period”) (a) in the case of an assignment or sublease, to terminate this Lease as to the Space as of the Transfer Date, in which event Tenant shall be relieved of all further obligations hereunder as to the Space; or (b) in the case of a sublease, to sublease the Space from Tenant upon the terms and conditions set forth in the Notice, except that the rent shall be the lower of the per square foot Rent described in Articles 2 and 3 payable under this Lease for the Space, or that part of the rent and other consideration set forth in the Notice which is applicable to the Space. If Landlord exercises its option to sublet the Space, then Tenant shall sublet the Space to Landlord upon the terms and conditions set forth in clause (b) above; provided: (i) Landlord shall at all times under such sublease have the right and option further to sublet the Space without obtaining Tenant’s consent or sharing any of the economic consideration received by Landlord; (ii) the provisions of Section 7.2 shall not be applicable thereto; (iii) Landlord and its subtenants shall have the right to use in common with Tenant all lavatories, corridors and lobbies which are within the Premises and the use of which is reasonably required for the use of the Space; (iv) Tenant shall have no right of set-off or abatement or any other right to assert a default hereunder by reason of any default by Landlord under such sublease; and (v) Landlord’s liability under such sublease shall not be deemed assumed or taken subject to by any successor to Landlord’s interest under this Lease. Should Landlord fail to exercise either option within the Option Period, such failure shall not constitute Landlord’s consent to the Transfer. Notwithstanding anything herein to the contrary, the ATTACHMENT A 750
20 42893660v.16
foregoing Landlord recapture right shall not apply to any proposed sublease of a portion of the Premises for a term of one (1) year or less. If Landlord elects not to exercise either option, then Tenant shall be free to enter into the Transfer subject to the following conditions:
(a) The Transfer shall be on the same terms set forth in the Notice given to Landlord;
(b) No Transfer shall be valid and no assignee or sublessee shall take possession of the Space until Landlord has consented in writing to the Transfer and an executed counterpart of the assignment or sublease has been delivered to Landlord; (c) In no event shall any assignee or sublessee (with the exception of Landlord should Landlord elect to sublet the Space pursuant to subsection (b) above) have a right to further assign or sublet the Space;
(d) The Transfer shall not result in more than two portions of the Premises being sublet at any one time during the Term by more than two different sublessees; (e) If the Lease shall be assigned, or the Premises shall be sublet, Landlord may collect Rent directly from any such assignee or sublessee, as the case may be, in the event of default by Tenant; and
(f) Fifty percent (50%) of any sums or other economic consideration received by Tenant as a result of any Transfer, whether denominated rent or otherwise, which exceed, in the aggregate, the total sums which Tenant is obligated to pay Landlord under this Lease (prorated as to any sublease to reflect obligations allocable to that portion of the Premises subject to such sublease) shall be payable to Landlord as Additional Rent under this Lease, without affecting or reducing any other obligation of Tenant hereunder. Amounts payable under this Section by Tenant to Landlord shall be based on figures net of any costs incurred by Tenant in connection with the transaction in question. The provisions of this Section shall apply regardless of whether the Transfer is made in compliance with the provisions of this Lease. Any payments made to Landlord pursuant to this Section shall not cure any default under this Lease arising from any Transfer. Tenant shall not artificially structure any Transfer in order to reduce the amount payable to Landlord under this Section, nor shall Tenant take any other steps for the purpose of circumventing its obligation to pay amounts to Landlord under this Section; in the event that Tenant does same, Tenant shall be in default of this Lease and the amount payable to Landlord under this Section shall be the amount that would have been payable to Landlord had same not occurred plus a late fee on such amount (as described in Section 2.3). Tenant shall deliver to Landlord a statement within thirty (30) days after the end of each calendar year in which any part of the Term occurs specifying as to such calendar year, and within thirty (30) days after the expiration or earlier termination of the Term, specifying with respect to the elapsed portion of the calendar year in which such expiration or termination occurs, each Transfer in effect during the period covered by such statement and the date of its execution and delivery, the number of square feet of the rentable area demised thereby, and the term thereof; and a computation in reasonable detail showing: (i) the amounts (if any) paid and payable by Tenant to Landlord pursuant to this Article 8 with respect to any Transfer for the period covered by such statement, and (ii) the amounts (if any) paid and payable by Tenant to Landlord pursuant to this Article 8 with respect to any payments received from a sublessee or assignee during such period but which relate to an earlier period.

ATTACHMENT A 751
21 42893660v.16

8.3 Permitted Transfer. Notwithstanding anything to the contrary contained herein, Tenant shall have the right, without obtaining Landlord’s prior written consent, but subject to the terms hereof, to do any of the following (each, a “Permitted Transfer”) (i) transfer to a Permitted Transferee any interest in this Lease, the term or estate hereby granted, or any interest hereunder or (ii) sublet the Premises or any part thereof to a Permitted Transferee. For the purposes hereof, a “Permitted Transferee” means an entity that (a) controls, is controlled by, or is under common control with Tenant, (b) results from the transfer of all or substantially all of Tenant’s assets or stock, or (c) results from the merger or consolidation of Tenant with another entity. If Tenant desires to enter into a Permitted Transfer, Tenant shall, as a condition to the effectiveness of such Permitted Transfer hereunder, at least thirty (30) days prior to the date when Tenant desires the Permitted Transfer to be effective, provide Landlord with written notice of such Permitted Transfer, together with detailed evidence of the financial condition of the Permitted Transferee, the proposed form of sublease or assignment and such other information as Landlord, in the exercise of its business judgment, shall request. As used in this Section, “control” means ownership of voting securities sufficient to elect a majority of the board of directors of a corporation, or analogous ownership interests of non-corporate entities.

8.4 Continuing Liability of Tenant. Regardless of Landlord’s consent to a Transfer or Tenant entering into a Permitted Transfer, no subletting, assignment or other transfer shall release Tenant’s obligation or alter the primary liability of Tenant to pay Rent and to perform all other obligations to be performed by Tenant hereunder. The acceptance of Rent by Landlord from any other person shall not be deemed to be a waiver by Landlord of any provision hereof.

Consent to one Transfer shall not be deemed consent to any subsequent Transfer. If any assignee of Tenant or any successor of Tenant defaults in the performance of any of the terms hereof, Landlord may proceed directly against Tenant without the necessity of exhausting remedies against such assignee or successor. In no event shall Landlord’s enforcement of any provision of this Lease against any assignee be deemed a waiver of Landlord’s right to enforce any term of this Lease against Tenant or any other person. Landlord may consent to subsequent Transfers or amendments or modifications to this Lease with assignees of Tenant, without notifying Tenant, any successor of Tenant, or any guarantor under this Lease, and without obtaining its or their consent thereto, and such action shall not relieve Tenant of its liability under this Lease.

8.5 Bankruptcy Case. Tenant filed a petition for chapter 9 relief on June 28, 2012, which case is pending in the United States Bankruptcy Court for the Eastern District of California (the “Bankruptcy Court”) under Case No. 12-32118 (the “Bankruptcy Case”). Tenant hereby represents and warrants that it has received any Bankruptcy Court approval legally required to enter into this Lease and to honor all of its obligations hereunder.

8.6 Subsequent Bankruptcy Case. In the event that the Bankruptcy Case is dismissed, and Tenant subsequently files another petition for chapter 9 relief (initiating the “Subsequent Bankruptcy Case”) and an order for relief is entered in the Subsequent Bankruptcy Case, Section 365 of the Bankruptcy Code shall apply to the Lease. In addition to the requirements of Section 365 of the Bankruptcy Code, if Tenant proposes to assume and assign this Lease pursuant to Section 365 to any person or entity who has made or accepted a bona fide offer to accept an assignment of the Lease on terms acceptable to Tenant, then notice of the proposed assignment setting forth (a) the name and address of the proposed assignee, (b) all of the terms and conditions of the offer and proposed assignment, and (c) the adequate assurance to be furnished by the proposed assignee of its future performance under the Lease, shall be given to Landlord by Tenant no later than twenty (20) days after Tenant has made or received such offer, but in no ATTACHMENT A 752
22 42893660v.16
event later than ten (10) days prior to the date on which Tenant applies to a court of competent jurisdiction for authority and approval to enter into the proposed assignment. Landlord shall have the prior right and option, to be exercised by notice to Tenant given at any time prior to the date on which the court order authorizing such assignment becomes final and non-appealable, to receive an assignment of this Lease upon the same terms and conditions, and for the same consideration, if any, as the proposed assignee, less any brokerage commissions which may otherwise be payable out of the consideration to be paid by the proposed assignee for the assignment of this Lease. If this Lease is assigned in a Subsequent Bankruptcy Case pursuant to the provisions of the Bankruptcy Code, Landlord (i) may require from the assignee a deposit or other security for the performance of its obligations under this Lease in an amount substantially the same as would have been required by Landlord upon the initial leasing to a tenant similar to the assignee; and (ii) shall receive, as Additional Rent, the sums and economic consideration described in this Article 8. Any person or entity to which this Lease is assigned, pursuant to Section 365 of the Bankruptcy Code, shall be deemed, without further act or documentation, to have assumed all of the Tenant’s obligations arising under this Lease on and after the date of such assignment. Any such assignee shall, upon demand, execute and deliver to Landlord an instrument confirming such assumption. No provision of this Lease shall be deemed a waiver of Landlord’s rights or remedies under the Bankruptcy Code to oppose any assumption and/or assignment of this Lease, to require a timely performance of Tenant’s obligations under this Lease, or to regain possession of the Premises if this Lease has neither been assumed nor rejected within sixty (60) days after the date of the order for relief or within such additional time as a court of competent jurisdiction may have fixed. Notwithstanding anything in this Lease to the contrary, all amounts payable by Tenant to or on behalf of Landlord under this Lease, whether or not expressly denominated as Rent, shall constitute rent for the purposes of Section 502(b)(6) of the Bankruptcy Code.

8.7 Fees to Landlord. Tenant shall pay to Landlord a fee of $1,000 plus Landlord’s costs and expenses (including, but not limited to, reasonable attorneys’, accountants’, architects’, engineers’ and consultants’ fees in an amount not to exceed $2,000) incurred in connection with the processing and documentation of any Transfer (whether or not the Transfer is approved by Landlord or actually occurs) or any Permitted Transfer.

ARTICLE 9

LIABILITY AND INDEMNIFICATION

9.1 Tenant’s Waiver of Claims and Indemnity. Tenant, to the extent permitted by applicable Regulation, waives all claims for loss, theft or damage to property and for injuries to persons, including death, in, upon or about the Premises or the Project, from any cause whatsoever except loss, damage or injury caused by the gross negligence or willful misconduct of Landlord and, without limiting the generality of the foregoing, whether caused by water leakage of any character from the roof, walls, basement or any other portion of the Premises or the Project, or by gas, fire, oil or electricity, or by any interruption of utilities or services, or by any tenant, occupant or other person, or by any other cause whatsoever in, on or about the Premises or the Project. Notwithstanding any contrary provision in this Lease, neither Landlord, nor its members, officers, agents, managers, contractors, servants, employees or invitees (collectively, with Landlord, the “Landlord Parties”) shall in any event be liable for consequential damages hereunder. Tenant indemnifies, defends, protects and holds Landlord and the other Landlord Parties harmless from and against any loss, liability, claim, damage or ATTACHMENT A 753
23 42893660v.16
expense (including attorneys’ fees and court costs) arising out of or resulting from Tenant’s use or occupancy of the Premises, the Building, the Common Facilities or any other area within the Project (including, but not limited to, any additional expense that may be incurred by Landlord in connection with Tenant’s use of Suite 124 as the City Council Chambers, which expense Landlord would not otherwise have incurred if Suite 124 was used solely for general office purposes between the hours of approximately 7:00 a.m. and 6:00 p.m.), including, but not limited to, if caused by, or resulting from, any act or omission of any agent, employee or third-party contractor of Tenant, whether prior to, or following, the Lease Commencement Date, other than that caused by the gross negligence or willful misconduct of Landlord, its partners, agents, servants or employees. If any action or proceeding is brought against Landlord or any other Landlord Party by reason of any such matter, Tenant shall, upon Landlord’s request, defend same at Tenant’s expense by counsel selected by Tenant that is reasonably satisfactory to Landlord. The provisions of this Section 9.1 shall survive the expiration or termination of this Lease.

9.2 Negligence of Third Parties. Neither Landlord nor any other Landlord Party shall be liable to Tenant for any damage by or from any act of negligence of any tenant or other occupant of the Project, except as set forth in Section 9.3. Tenant agrees to pay for all damage to the Premises or the Project, as well as all damage to tenants or occupants thereof caused by Tenant’s misuse, overuse, overloading or neglect of the Premises or the Project, the apparatus, improvements or appurtenances thereof, or caused by any licensee, contractor, agent, guest, invitee or employee of Tenant.

9.3 Landlord Indemnity. Landlord shall indemnify, protect, defend and hold harmless Tenant and its agents, from and against any and all claims, liabilities, losses, costs, damages, injuries or expenses, including reasonable attorneys’ fees, arising out of or relating to gross negligence or willful misconduct of Landlord or Landlord’s agents, employees or invitees.

ARTICLE 10

INSURANCE

10.1 Insurance to be Carried by Tenant. Tenant shall during the Term, at its sole cost and expense, obtain and maintain the following types of insurance:
(a) A policy or policies of property insurance in the name of Tenant covering Tenant’s leasehold improvements and any property of Tenant located on, or used in connection with, the Premises, including, but not limited to, furniture, additions and fixtures, and providing protection against all perils included within the classification of fire, extended coverage, vandalism, malicious mischief, theft, terrorism, special extended peril (all risk) and sprinkler leakage, in an amount equal to at least one hundred percent (100%) of the replacement cost thereof from time to time (including, without limitation, cost of debris removal), with an agreed amount endorsement, and providing protection against loss of income and extra expense; (b) Commercial general liability insurance with a combined single limit of Two Million Dollars ($2,000,000) per occurrence in the name of Tenant (naming Landlord as an additional insured thereunder, and, if requested by Landlord, naming any manager of any of the Premises or the Project, and any mortgagee, trust deed holder, ground lessor or secured party with an interest in this Lease, or any portion of the Project, as additional insureds thereunder); such policy shall specifically include, without limitation, personal injury, broad form property ATTACHMENT A 754
24 42893660v.16
damage, and contractual liability coverage, the last of which shall cover the insuring provisions of this Lease and the performance by Tenant of the indemnity agreements in Article 9 above; such policy shall contain cross-liability endorsements and shall provide coverage on an occurrence basis; the amount of such insurance required hereunder shall be subject to adjustment from time to time as reasonably requested by Landlord;
(c) Worker’s Compensation insurance coverage as required by applicable Regulation, together with employer’s liability insurance coverage; (d) Business Interruption insurance in such amounts as will reimburse Tenant for direct or indirect loss of earnings attributable to all perils commonly insured against by prudent tenants (in the reasonable judgment of Landlord or its lenders (“Landlord’s Lenders”) or attributable to prevention of access to the Premises or to the Building as a result of such perils; and
(e) Any other form or forms of insurance as Landlord or Landlord’s Lenders may reasonably require from time to time in form, in amounts and for insurance risks against which a prudent tenant would protect itself (in the reasonable judgment of Landlord or Landlord’s Lenders) , provided that if Tenant elects to insure under a Joint Powers Agreement as permitted by this Section 10.1 such other forms of insurance as may become required pursuant to this Section 10.1(e) shall only be required if provided for under the Joint Powers Agreement.

Each policy evidencing insurance required to be carried by Tenant pursuant to this Article shall contain a provision showing Landlord, Landlord’s Lenders and Landlord’s property manager, and any other parties in interest as designated by Landlord, as additional named insureds.

Notwithstanding anything in this Article 10 to the contrary, at the inception of this Lease and for the duration of this Lease if so elected by Tenant, Tenant shall be permitted to maintain, in lieu of any insurance required hereunder, self-insurance or other insurance coverage programs including without limitation an insurance pooling arrangement or Joint Powers Agreement; provided, however, that (a) Tenant shall be required to maintain commercial general liability insurance as required under Sections 10.1(b) and 10.2 in the amount of any self-insured retention or deductible provided for under the Joint Powers Agreement; and (b) the right to self-insure shall not be granted to any assignee of Tenant.

10.2 Policy Forms and Delivery. Unless otherwise maintained by Tenant as permitted under Section 10.1, all policies shall be taken out from insurers licensed in California, acceptable to Landlord and in form satisfactory to Landlord. All policies must be issued by insurers with a policy holder rating of “A-VIII” or better and a financial rating of “X” in the most recent version of Best’s Key Rating Guide. Without limiting the generality of the foregoing, any deductible amounts under said policies shall be subject to Landlord’s approval. Tenant agrees that certificates of such insurance shall be delivered to Landlord as soon as practicable after the placing of the required insurance, but in no event later than thirty (30) days prior to the date Tenant takes possession of the Premises. All policies shall require at least ten (10) days prior written notice to Landlord, and to any other additional insureds thereunder, by the insurer prior to termination, cancellation or material change in such insurance. Tenant shall, at least thirty (30) days prior to the expiration of any of such policies, furnish Landlord with a renewal or binder therefor. Tenant may carry insurance under a so-called “blanket” policy, provided that such policy provides that the amount of insurance required hereunder shall not be prejudiced by ATTACHMENT A 755
25 42893660v.16
other losses covered thereby, and as otherwise approved by Landlord. All insurance policies carried by Tenant shall be primary with respect to, and non-contributory with, any other insurance available to Landlord. Such policies shall provide that the interests of Landlord and any other additional insureds designated by Landlord shall not be invalidated due to any breach or violation of any warranties, representations or declarations contained in such policies or the applications therefor. Upon failure of Tenant to procure, maintain and place such insurance and pay all premiums and charges therefor, Landlord may, but shall not be obligated to, purchase such insurance, and in such event, Tenant shall pay all premiums and charges therefor to Landlord as Additional Rent within five (5) days after demand.

10.3 Use of Proceeds. In the event of damage or destruction to the leasehold improvements in the Premises covered by insurance required to be taken out by Tenant pursuant to this Article, Tenant shall use the proceeds of such insurance for the purposes of repairing or restoring such leasehold improvements. In the event of damage or destruction of the Building entitling Landlord or Tenant to terminate this Lease pursuant to Article 12 hereof, if the Premises have also been damaged, Tenant will pay to Landlord that portion of its insurance proceeds relating to the leasehold improvements in the Premises that were paid for by Landlord.

10.4 Landlord’s Insurance. During the Term, Landlord shall keep and maintain property insurance for the Project in such amounts, and with such coverages, and Landlord may keep and maintain such other insurance (including, but not limited to, earthquake insurance), as Landlord may reasonably determine or as any of Landlord’s Lenders may require. Tenant acknowledges that it shall not be a named insured in such policies and that it has no right to receive any proceeds from any such insurance policies carried by Landlord. Notwithstanding any contrary provision herein, Landlord shall not be required to carry insurance covering the property described in Subsection 10.1(a) above or covering flood or earthquake.

10.5 Waiver of Subrogation; Indemnities. Landlord and Tenant waive their respective right of recovery against the other and their respective managers, officers, directors, partners, agents and employees to the extent damage or liability is insured against under a policy or policies of insurance required to be carried hereunder, whether or not such damage or liability may be attributable to the negligence or act of either party or its respective agents, invitees, contractors, servants or employees. Such waiver by each party shall be effective for the benefit of the other party notwithstanding any failure by the waiving party to carry the insurance required by the provisions of this Lease. Each insurance policy required to be carried by either Landlord or Tenant shall include such a waiver of the insurer’s rights of subrogation. Where liability or damage to the Premises is insured against under both the policy or policies of insurance carried by Landlord and the policy or policies of insurance carried by Tenant, to the extent that insurance proceeds are available from the policy or policies of insurance carried by the party bearing the responsibility to indemnify with respect to such liability or damage, such waiver shall not limit, restrict or alter any indemnity made by Landlord or Tenant hereunder and the insurance proceeds available from the policy or policies of insurance carried by the party bearing responsibility to indemnify with respect to such liability or damage shall be applied to the liability or the repair of such damage prior to the application of the insurance proceeds available from the policy or policies of insurance carried by the other party.

10.6 Premium Increases. Tenant shall pay any increases in insurance premiums relating to property in the Project (whether such insurance is maintained by Landlord or Tenant) ATTACHMENT A 756
26 42893660v.16
to the extent that any such increase is specified by the insurance carrier as being caused by Tenant’s acts or omissions or use or occupancy of the Premises.

10.7 Landlord’s Insurance.
(a) Liability Insurance. During the Term of this Lease, Landlord shall, at Landlord’s sole cost and expense obtain and keep in full force and effect comprehensive general liability insurance insuring Landlord against any and all liability arising out of its control of the Project. Said insurance shall be in an aggregate coverage amount equal to Two Million Dollars ($2,000,000), with excess general liability insurance coverage of Twenty Five Million Dollars ($25,000,000). Any insurance policies hereunder may be “blanket policies.” (b) Property Insurance. During the Term of this Lease, Landlord shall obtain and keep in force during the Term a policy or policies of insurance covering loss or damage to the Building and the Project exclusive of the cost of excavations, foundations and footings, in the amount of Forty-Three Million Dollars ($43,000,000), or such lesser amount deemed sufficient by Landlord to protect its interest in the Project, providing protection against all perils included within the classification of fire, extended coverage, vandalism, malicious mischief, plate glass (subject to the perils of the basic policy), sprinkler leakage, earthquake caused sprinkler leakage, and such other perils as Landlord deems advisable or may be required by a lender having a lien on the Building.

ARTICLE 11
TRANSFER OF LANDLORD’S INTEREST

11.1 Transfer Rights. In the event of a transfer of all or any portion of Landlord’s interest in this Lease or the Project, other than a transfer for security purposes only, Landlord shall, upon consummation of such transfer, be released from any liability relating to obligations or covenants thereafter to be performed or observed under this Lease, and, in such event, Tenant agrees to look solely to Landlord’s successor in interest with respect to any such liability.

Landlord may transfer or credit any security deposit or prepaid Rent to Landlord’s successor in interest, and upon such transfer or credit Landlord shall be discharged from any further liability therefor, provided that Landlord’s successor-in-interest expressly acknowledges the rights of Tenant, as tenant, under this Lease.

11.2 Tenant Cooperation. If Landlord transfers the Project to a governmental or nonprofit entity that is able to utilize tax-exempt financing to purchase the Project, then Tenant covenants and agrees to reasonably cooperate, at no cost or expense to Tenant, with Landlord and the prospective purchaser in order to facilitate the issuance of tax exempt debt. Any right of the Tenant to transfer or sublease all or any portion of the Premises pursuant to Article 8 is subject to this covenant, and if the Tenant has entered into a sublease that, in the reasonable discretion of a prospective purchaser, precludes the use of tax exempt financing, then Tenant shall use commercially reasonable efforts, at no cost or expense to Tenant, to terminate or amend any such sublease arrangement to help facilitate the issuance of such tax exempt debt.

ATTACHMENT A 757
27 42893660v.16
ARTICLE 12

DAMAGE OR DESTRUCTION

12.1 Repair or Termination.
(a) If the Premises are damaged by fire or other casualty of the type insured by Landlord, then the damage shall be repaired by Landlord, provided such repairs can reasonably be made within one hundred twenty (120) days after the commencement of repairs without the payment of overtime or other premiums and that the insurance proceeds are sufficient to pay the costs of such repairs. Landlord shall give written notice to Tenant within thirty (30) days after the occurrence of the damage if Landlord concludes the damage can be so repaired. Until such repairs are completed, Basic Monthly Rent shall be abated in proportion to the part of the Premises which is unusable by Tenant in the conduct of its business (but there shall be no abatement of Rent by reason of any portion of the Premises being unusable for a period of fifteen (15) days or less). If the damage is due to the negligence or willful misconduct of Tenant or its employees, then there shall be no abatement of Rent. Except for such rental abatement, Tenant shall have no claim against Landlord with respect to any such damage or repairs. If Landlord is required or elects to restore the Premises, then Landlord shall not be required to restore alterations made by Tenant, Tenant’s improvements, trade fixtures or personal property, including but not limited to any paneling, decorations, railings, floor coverings, alterations, additions or fixtures installed on the Premises by or at the expense of Tenant, such items being the sole responsibility of Tenant to restore, and any damage caused by the negligence or willful misconduct of Tenant or any of its agents, contractors, employees, invitees or guests shall be promptly repaired by Tenant, at its sole cost and expense, to the reasonable satisfaction of Landlord.
(b) Landlord shall not be liable for any failure to make any such repairs if such failure is caused by accidents, strikes, lockouts or other conditions beyond the reasonable control of Landlord.
(c) If such repairs cannot reasonably be made within such one hundred twenty (120) days with or without the payment of overtime or other premiums, or if such repairs will cost more than the available insurance proceeds, then Landlord may, at its option, make such repairs within a reasonable time, and, in such event, this Lease shall continue in effect and the Basic Monthly Rent shall be abated in the manner provided above. Landlord’s election to make such repairs must be evidenced by written notice to Tenant advising Tenant within forty five (45) days after the occurrence of the damage whether or not Landlord will make such repairs. If Landlord does not so elect to make such repairs then Landlord may, by written notice to Tenant given within sixty (60) days after the occurrence of the damage, terminate this Lease as of the date of the occurrence of such damage and Landlord shall refund to Tenant any Rent previously paid for any period of time subsequent to such termination. (d) With respect to any damage and repairs, Tenant waives the provisions of Section 1932(2) and 1933(4) of the Civil Code of California or any successor statute thereto or similar statute hereinafter enacted.
(e) All proceeds of any insurance maintained by Tenant or Landlord upon the Premises (including insurance on Tenant improvements) shall be used to pay for the repairs to ATTACHMENT A 758
28 42893660v.16
the property covered by said insurance, to the extent that repairs are made pursuant to this Article.
(f) Landlord shall not have any obligation whatsoever to repair, reconstruct, or restore the Premises or any portion of the Building when the damage occurs during the last eighteen (18) months of the Term.

12.2 Loss of Enjoyment. No damages, compensation or claim shall be payable by Landlord to Tenant for any inconvenience, loss of business or annoyance of Tenant arising from any repair or restoration of any portion of the Premises or the Project, including, but not limited to, the Building or the Common Facilities, performed by Landlord or its agents. Landlord shall use good faith efforts to effect such repair or restoration promptly and in such manner as not unreasonably to interfere with Tenant’s use and occupancy of the Premises.

12.3 Automatic Termination. A total destruction of the Building shall automatically terminate this Lease as of the date of such total destruction.

ARTICLE 13

DEFAULTS AND REMEDIES

13.1 Events of Default. The occurrence of any of the following shall constitute a default and breach of this Lease by Tenant:
(a) Any failure by Tenant to pay any Rent, as and when due, where such failure continues for three (3) days after written notice thereof by Landlord to Tenant; (b) The abandonment of the Premises, or any significant portion thereof, by Tenant;
(c) The appointment of a receiver to take possession of substantially all of Tenant’s assets located at the Premises or of Tenant’s interest in this Lease, where possession is not restored to Tenant within forty-five (45) days; the attachment, execution or other judicial seizure of substantially all of Tenant’s assets located at the Premises or of Tenant’s interest in this Lease, where such seizure is not discharged within forty-five (45) days; (d) Any failure by Tenant to observe or perform any of its obligations under that certain Real Property Option Agreement and Joint Escrow Instructions of even date herewith entered into by and between Four Hundred Main Street LLC and Tenant; (e) If any mechanics’ lien is filed or recorded against the Project or the Premises, and such lien results from the actions or omissions of Tenant or any subtenant (or any contractor, consultant, agent, employee, or invitee of Tenant or any subtenant), and Tenant fails either to (i) cause any such mechanics’ lien to be released within ten (10) business days after the date the same comes to the attention of Tenant or to (ii) post a bond or other security agreement in the amount of such mechanics’ lien, in the event Tenant elects, in its sole discretion, to dispute same;
(f) At Landlord’s sole option, Tenant’s failure to observe or perform according to the provisions of Article 10 (excluding any provision regarding payment of Rent, ATTACHMENT A 759
29 42893660v.16
which shall be governed by Subsection (a) above), Article 15, Section 18.11, or Section 7.2 hereof within (10) days after demand from Landlord; and (g) Any failure by Tenant to observe and perform any other provision of this Lease (other than the provisions described in (a) through (f) of this Section 13.1) or the Rules and Regulations attached hereto as Exhibit “C”, where such failure continues for thirty (30) days after written notice thereof by Landlord to Tenant; provided, however, that in the event that any such cure cannot reasonably be completed within such thirty (30) day period, and provided further that Tenant has commenced and is diligently pursuing such cure, Tenant shall have an additional period of thirty (30) days to complete such cure.

The notices referred to in Subsections (a) and (g) above, shall be in lieu of, and not in addition to, any notice required under Section 1161, et seq. of the California Code of Civil Procedure or any successor statute thereto or similar statute hereinafter enacted

13.2 Landlord’s Remedies.
(a) In the event of any default by Tenant, as defined herein, in addition to any other remedies available to Landlord at law or in equity, Landlord shall have the immediate option to (but shall not be obligated to) terminate this Lease and all rights of Tenant hereunder by giving Tenant written notice of such election to terminate; provided, that Tenant has been afforded all applicable notice and cure periods permitted under this Lease. In the event that Landlord shall elect to so terminate this Lease, then Landlord may recover from Tenant all of the following, to the extent permitted by applicable Regulations:
(i) The worth at the time of award of any unpaid Rent which had been earned at the time of such termination; plus
(ii) The worth at the time of award of the amount by which the unpaid Rent which would have been earned after termination until the time of award exceeds that portion of rental loss which Tenant proves could have been reasonably avoided; plus (iii) 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 award exceeds the amount of such rental loss which Tenant proves reasonably could be avoided; plus
(iv) Any other amount necessary to compensate Landlord for all the detriment proximately caused by Tenant’s failure to perform its obligations under this Lease or which in the ordinary course of things would be likely to result therefrom, including, but not limited to, unamortized brokerage commissions, tenant improvement expenses and advertising expenses incurred by Landlord (in each case regarding both this Lease and any new lease with any new tenant regarding the Premises), any expenses of remodeling the Premises and the cost of restoring said Premises to the condition required under this Lease; plus (v) At Landlord’s election, such other amounts in addition to or in lieu of the foregoing as may be permitted from time to time by applicable Regulations.

For purposes of Subsection 13.2(a), the “time of award” means the date upon which the judgment in any action brought by Landlord against Tenant by reason of such default is entered or such earlier date as the court may determine. As used in (i) and (ii) above, the “worth at the time of award” shall be computed by allowing interest at the maximum interest rate allowed by ATTACHMENT A 760
30 42893660v.16
applicable Regulation. As used in (iii) above, the “worth at the time of award” shall be computed by discounting such amount at the discount rate of the Federal Reserve Bank at San Francisco at the time of award, plus one (1) percentage point. Tenant agrees that such charges shall be recoverable by Landlord under California Code of Civil Procedure Section 1174(b) or any similar, successor or related Regulation. Further, Tenant hereby waives the provisions of California Code of Civil Procedure Section 1174(c) and California Civil Code Section 1951.7 or any other similar, successor or related Regulation providing for Tenant’s right to satisfy any judgment in order to prevent a forfeiture of this Lease or requiring Landlord to deliver written notice to Tenant of any reletting of the Premises.

Notwithstanding anything to the contrary contained herein, including, but not limited to, anything contained in clause (ii) or (iii) above, Landlord hereby acknowledges that Tenant is a municipality, and, as a result thereof, certain Landlord remedies set forth in this Section 13.2(a) may not be enforceable under applicable Regulations, including, but not limited to, under Article XVI, Section 18(a) of the California Constitution. Notwithstanding the foregoing, however, Tenant hereby acknowledges and agrees that, in accordance with the terms hereof, Landlord shall be entitled to receive all remedies under this Lease to the fullest extent permitted by applicable Regulations. This Section 13.2(a) is subject to the express condition that at no time shall Tenant be required to pay to Landlord any amount under the terms hereof that could subject Landlord to either civil or criminal liability as a result of such amount being in excess of the amount permitted by applicable Regulations. If by the terms of this Section 13.2(a), Tenant is at any time required or obligated to make a payment to Landlord in excess of the amount permitted by applicable Regulations, then such remedies expressly permitted hereunder shall be deemed amended to the extent required by applicable Regulations. (b) In the event of any such default by Tenant, Landlord shall also have the right, with or without terminating this Lease, to reenter the Premises to remove all persons and property from the Premises. Such property may be removed and stored in a public warehouse or elsewhere at the cost of and for the account of Tenant, and such property shall be released only upon Tenant’s payment of such charges, together with all sums due and owing under this Lease.

If Tenant does not reclaim such property within the period permitted by applicable Regulation, Landlord may sell such property in accordance with applicable Regulation and apply the proceeds of such sale to any sums due and owing hereunder, or retain said property, granting Tenant credit against sums due and owing hereunder for the reasonable value of such property. (c) In the event of the abandonment of the Premises by Tenant or in the event of any default by Tenant, if Landlord does not elect to terminate this Lease as provided in this Section and, until Landlord does elect to terminate this Lease, this Lease shall continue in full force and effect, and Landlord may, from time to time, without terminating this Lease, enforce all of its rights and remedies under this Lease. Specifically, Landlord has the remedy described in California Civil Code Section 1951.4 (lessor may continue lease in effect after lessee’s breach and abandonment and recover rent as it becomes due, if lessee has the right to sublet or assign, subject only to reasonable limitations).
(d) Landlord shall not, by any reentry or other act, be deemed to have accepted any surrender by Tenant of the Premises or Tenant’s interest therein, or be deemed to have terminated this Lease or Tenant’s right to possession of the Premises, unless Landlord shall have notified Tenant in writing that it has so elected to terminate this Lease.

ATTACHMENT A 761
31 42893660v.16
(e) Landlord may suspend or discontinue all or any of the services specified in Article 4 during the continuance of any default of the Lease; and no such suspension or discontinuance will be deemed or construed to be an eviction, constructive or actual, or an ejection of Tenant.
(f) If Landlord reenters the Premises, Tenant shall have no claims for damages that may be caused by Landlord’s reentering or removing and storing the property of Tenant, and indemnifies, defends, protects and holds Landlord harmless from all losses, costs, expenses (including attorney’s fees and court costs) or damages occasioned by Landlord. No such entry shall be considered or deemed to be a forcible entry by Landlord. (g) All rights, options, and remedies of Landlord contained in this Lease shall be construed and held to be cumulative, and no one of them shall be exclusive of the other, and Landlord shall have the right to pursue any one or all of such remedies or any other remedy or relief which may be provided by applicable Regulations, whether or not stated in this Lease. The exercise of any one or more of such rights or remedies shall not impair Landlord’s right to exercise any other right or remedy including, without limitation, any and all rights and remedies of Landlord under California Civil Code Section 1951.8, California Code of Civil Procedure Section 1161 et seq., or any similar, successor or related Regulation. (h) Nothing in this Section 13.2, and no termination pursuant to any other provision of this Lease, shall be deemed to affect Landlord’s right to indemnification for liability or liabilities arising prior to the termination of this Lease under the indemnification clause or clauses contained in this Lease.
(i) Tenant hereby irrevocably authorizes and directs any sublessee, upon receipt of a written notice from Landlord stating that Tenant is in default hereunder, to pay to Landlord directly the rent and income due and to become due under such sublease. Tenant agrees that such sublessee shall have the right to rely upon any such statement and request by Landlord, and that such sublessee shall pay rent and income to Landlord without any obligation or right to inquire as to whether such default exists and notwithstanding any notice or claim from Tenant to the contrary. Tenant shall have no right or claim against such sublessee or Landlord for any such rent or income so paid by such sublessee to Landlord. Landlord shall not, by reason of any direct collection of rent or income from a sublessee, be deemed liable to such sublessee for any failure of Tenant to perform and comply with any of Tenant’s obligations under such sublease.
(j) To the extent permitted by applicable Regulation, Tenant hereby waives all provisions of, or protection under, any Regulations of the State of California or other applicable jurisdiction to the extent same are inconsistent and in conflict with specific terms and provisions hereof.

13.3 Landlord’s Event of Default.
(a) Unless a shorter period of time is specified by which Landlord is required to perform an obligation under this Lease, Landlord shall not be deemed to be in default under this Lease unless and until it has failed to perform any of its obligations hereunder within thirty (30) days after written notice by Tenant to Landlord specifying the manner in which Landlord has failed to perform such obligation; provided, however, that if the nature of Landlord’s obligation is such that more than thirty (30) days are reasonably required for its performance, ATTACHMENT A 762
32 42893660v.16
then Landlord shall not be deemed to be in default if it shall commence such performance within such thirty (30) day period and thereafter diligently prosecute the same to completion. In the event of a default by Landlord hereunder, the extent of Landlord’s liability shall be strictly limited to and shall not extend beyond Landlord’s interest in the Building. (b) If Landlord fails to cure a default within the time period described in this Lease, and if such default renders all or any part of the Premises untenantable or unusable for Tenant’s ordinary business, Tenant shall have the option to cure the default, in addition to any other remedies permitted by applicable Regulations. Should Tenant elect to cure the default, all reasonable costs associated with such cure, including reasonable attorneys’ fees (if any), shall be reimbursed by Landlord to Tenant following receipt of Tenant’s invoice for said costs. If Landlord’s default hereunder prevents Tenant’s use of the Premises in accordance with the Permitted Uses set forth in Section 10 of the Basic Lease Provisions, there shall be an abatement of Basic Monthly Rent for the period of such non-use.
(c) Notwithstanding anything to the contrary provided in this Lease, and subject to the terms of the Order Appointing Receiver, it is specifically understood and agreed, such agreement being a primary consideration for the execution of this Lease by Landlord, that (a) there shall be absolutely no personal liability on the part of Landlord or any other Landlord Party (as hereinafter defined) to Tenant with respect to any of the terms, covenants and conditions of this Lease, (b) Tenant waives all claims, demands and causes of action (collectively, the “Claims”) against Landlord and the other Landlord Parties in the event of any breach by Landlord of any of the terms, covenants and conditions of this Lease to be performed by Landlord, other than Claims against Landlord based on Landlord’s gross negligence or willful misconduct, and (c) Tenant shall look solely to the Premises, and any other portion of the Property, as such terms is defined in the Order Appointing Receiver, for the satisfaction of each and every remedy of Tenant in the event of any breach by Landlord of any of the terms, covenants and conditions of this Lease to be performed by Landlord, or any other matter in connection with this Lease or the Premises, such exculpation of liability to be absolute and without any exception whatsoever.

ARTICLE 14

EMINENT DOMAIN
If (i) twenty five percent (25%) or more of the rentable space in the Building or Parking Garage, or (ii) after restoration, such portion of the Premises as in Tenant’s reasonable judgment makes the balance of the Premises untenantable or otherwise unsuitable for Tenant’s use and requirements, shall be lawfully taken or condemned or conveyed under threat of such taking or condemnation, for any public or quasi-public use or purpose (such taking, condemnation or conveyance being referred to herein as a “Taking”), then either party hereto may immediately terminate this Lease by serving written notice upon the other party hereto within thirty (30) days thereafter. If twenty five percent (25%) or more of the Project excluding the Premises shall be taken or appropriated under the power of eminent domain or conveyed in lieu thereof, Landlord may so terminate this Lease by serving written notice upon the other party hereto within thirty (30) days thereafter. Tenant shall not be required to assign to Landlord any portion of an award/settlement made by reason of such Taking to Tenant. If a material part of the Building is condemned or taken or if a substantial alteration or reconstruction of the Building shall, in Landlord’s opinion, be necessary or desirable as a result of such Taking, Landlord may terminate ATTACHMENT A 763
33 42893660v.16
this Lease by written notice to Tenant within thirty (30) days after the date of the Taking. If a part of the Premises shall be so taken, appropriated or conveyed and neither party hereto shall elect to so terminate this Lease, (a) Basic Monthly Rent payable hereunder shall be abated in the proportion that the rentable area of the portion of the Premises so taken, appropriated or conveyed bears to the rentable area of the entire Premises, and (b) if the Premises shall have been damaged as a consequence of such partial taking, appropriation or conveyance, Landlord shall, to the extent of any severance damages received by Landlord, restore the Premises continuing under this Lease; however, Landlord shall not be required to repair or restore any damage to the property of Tenant or to make any repairs to or restoration of any alterations, additions, fixtures or improvements installed on the Premises by or at the expense of Tenant, and Tenant shall pay any amount in excess of such severance damages required to complete such repairs or restoration. Notwithstanding anything to the contrary contained in this Section, if the temporary use or occupancy of any part of the Premises shall be taken or appropriated under the power of eminent domain or conveyed in lieu thereof during the Term, this Lease shall be and remain unaffected by such taking, appropriation or conveyance and Tenant shall continue to pay in full all Rent payable hereunder by Tenant during the Term; in the event of any such temporary taking, appropriation or conveyance, Tenant shall be entitled to receive a separate award (not reducing Landlord’s award) as compensation for loss of the use or occupancy of the Premises during the Term. To the extent that it is inconsistent with the above, each party waives the provisions of California Code of Civil Procedure Section 1265.130 allowing either party to petition the superior court to terminate the Lease in the event of a partial taking of the Premises.

ARTICLE 15

SUBORDINATION
Without the necessity of any additional document being executed by Tenant for the purpose of effecting a subordination, this Lease is subject and subordinate to all declarations of restrictions, ground leases, deeds of trust or other security interests of any kind now or hereafter encumbering or affecting the Project or any portion thereof; subject, however, to the qualification that so long as Tenant is not in default under this Lease, its peaceful use and occupancy of the Premises under this Lease shall not be impaired, restricted or terminated by any such mortgagee, beneficiary, secured party or ground lessor whose interest arises after the date hereof. Notwithstanding the foregoing, Landlord shall have the right to subordinate or cause to be subordinated any such ground leases, deeds of trust or other security interests to this Lease.

In the event of foreclosure or exercise of any power of sale under any deed of trust superior to this Lease, Tenant, upon demand, shall attorn to the purchaser at any foreclosure sale or sale pursuant to the exercise of any power of sale, in which event this Lease shall not terminate and Tenant shall automatically be and become the tenant of the purchaser; provided, however, no landlord or purchaser at any foreclosure sale or sale pursuant to the exercise of any power of sale, or any successor thereto shall be liable for any act or omission of any prior landlord (including Landlord) or be subject to any offsets, counterclaims, or defenses which Tenant might have against any prior landlord (including Landlord), or be bound by any Rent which Tenant might have paid in advance to any prior landlord (including Landlord) for a period in excess of one month or by any Security Deposit or other prepaid charge which Tenant might have paid in advance to any prior landlord (including Landlord), or be bound by an agreement or modification of this Lease made after Tenant has written notice of the interest of such party, without the prior written consent of such party, or be obligated to repair the Premises in the event of total or substantial damage beyond that which can reasonably be accomplished from the net proceeds of ATTACHMENT A 764
34 42893660v.16
insurance made available to such landlord. Tenant covenants and agrees to execute and deliver, not less than ten (10) business days after demand by Landlord or any lienholder or successor in interest, and in a commercially reasonable form requested thereby, any commercially reasonable additional documents evidencing the priority or subordination of this Lease and the attornment of Tenant with respect to any such ground leases, deeds of trust or other security interests; provided, that such entities agree to the non-disturbance of Tenant’s rights as tenant under this Lease if Tenant is not in default hereunder. Tenant hereby irrevocably appoints Landlord as attorney-in-fact of Tenant to execute, deliver and record any such documents in the name and on behalf of Tenant if Tenant fails to do same pursuant to the foregoing. Upon request by Tenant, Landlord shall exercise commercially reasonable efforts to obtain execution by Landlord’s Lenders of a Subordination, Non-Disturbance and Attornment Agreement. Moreover, if, in connection with the obtainment of financing for the Project or any portion thereof, a prospective lender requests reasonable modifications hereto as a condition to the furnishing of such financing, Tenant shall not unreasonably withhold or delay its consent thereto, provided such modifications do not increase the obligations of Tenant hereunder or adversely affect Tenant’s rights hereunder.

ARTICLE 16
SURRENDER OF PREMISES; REMOVAL OF PROPERTY

16.1 Tenant’s Removal of Property. Upon the expiration or termination of the Term of this Lease, Tenant shall quit and surrender possession of the Premises, and all repairs, changes, alterations, additions and improvements thereto, to Landlord in as good order, condition and repair as the same are now or hereafter may be improved by Landlord or Tenant, reasonable wear and tear and repairs which are Landlord’s obligation excepted, and in a reasonable state of cleanliness. In such event, Tenant shall, without expense to Landlord, remove from the Premises all debris, rubbish, furniture, equipment, business and trade fixtures, free-standing cabinet work, moveable partitions and other articles of personal property owned by Tenant or installed or placed by Tenant at its expense in the Premises and all similar articles of any other persons claiming under Tenant, including, but not limited to, any and all telecommunications or other cabling equipment, but excluding the two 8” pipes running from the Premises to the Building roof. Unless otherwise requested to do so by Landlord, however, Tenant shall not remove any additions or improvements to the Premises, such as carpet, interior partition walls and doors, “built-ins”, shelves, built-in fixtures or other similar items, it being understood and agreed that such items are and shall remain the property of Landlord. Tenant shall also repair, at its expense, all damage to the Premises resulting from such removal; provided, however, that Landlord also may elect, in its sole discretion, and at Tenant’s sole cost and expense, to repair all or any amount of damage anywhere in or on the Project caused by such removal of any property, reasonable wear and tear accepted. Notwithstanding the foregoing, if Tenant elects to remove its HVAC Chillers located on the roof of the Building, Landlord shall obtain from Landlord’s property manager a third party estimate for the repair of the damage likely to be caused by such removal (the “Damage Repair”), and the amount of such estimate shall be deposited in immediately available funds (the “Deposit”) with Landlord or its property manager before such HVAC Chillers may be removed by Tenant. Within three Business Days following the completion of the Damage Repair to the reasonable satisfaction of Landlord, and delivery of an unconditional lien release to Landlord (if the Damage Repair is undertaken by non-Tenant contractors), Landlord shall return the Deposit to Tenant. Tenant shall, upon the expiration or sooner termination of the Term hereof, deliver to Landlord all keys to all doors in, upon and ATTACHMENT A 765
35 42893660v.16
about the Premises including, but not limited to, all keys to any vault or safe to remain on the Premises.

16.2 Abandoned Property. Whenever Landlord shall reenter the Premises as provided in this Lease, any property of Tenant not removed by Tenant upon the expiration of the Term of this Lease or within ten (10) business days after a termination by reason of Tenant’s default, as provided in this Lease, shall be considered abandoned, and Landlord may remove any or all such items and dispose of same in any manner or store the same in a public warehouse or elsewhere for the account and at the expense and risk of Tenant.

ARTICLE 17
HAZARDOUS MATERIALS; EXCESSIVE BURDEN; WASTE
Tenant shall not cause or permit any nuisance in or about the Premises or the Project, nor shall Tenant cause or permit any Hazardous Materials (as hereinafter defined) to be brought to the Premises or the Project or used, handled, stored, released or disposed of in, under or about the Premises, Building or any other portion of the Project except for ordinary and general office and technology supplies typically used in the ordinary course of business within office buildings and technology centers and in full compliance with all applicable Regulations. Tenant shall not conduct business or other activity in or about the Premises of such a nature as to place an unreasonable or excessive burden upon the Common Facilities. Tenant shall not commit or suffer the commission of any waste in or about the Premises or the Project. As used in this Lease, the term “Hazardous Materials” means and includes any hazardous or toxic materials, substances or wastes as now or hereafter designated under any Regulation, including, without limitation, asbestos, petroleum, petroleum hydrocarbons and petroleum based products, urea formaldehyde and other chlorofluorocarbons. Tenant indemnifies, defends, protects and holds Landlord and the other Landlord Parties harmless from all costs, damages, liens and expenses (including attorney’s fees and court costs) related to Tenant’s breach of any provision of this Article 17.

ARTICLE 18

MISCELLANEOUS

18.1 Landlord’s Inspection and Maintenance. Tenant shall permit Landlord and its agents at all reasonable times to enter the Premises for the purpose of inspecting the same and/or for the purpose of protecting the interest therein of Landlord, and to take all required materials and equipment into the Premises and perform all required work therein; provided, that Landlord uses commercially reasonably efforts to avoid interfering with Tenant’s business operations.

Notwithstanding the foregoing sentence, except in the case of an emergency, Landlord must provide twenty-four (24) hours prior written notice to Tenant of its intent to enter the Premises and must permit a representative of Tenant to be present at all times if Tenant so desires; provided, however, that, if no Tenant representative is available within seventy-two (72) hours of Landlord’s prior written notice, Landlord shall nonetheless be entitled to proceed.

18.2 Exhibition of Premises. Tenant shall permit Landlord and its agents to enter and pass through the Premises at all reasonable hours to:
(a) Post notices of nonresponsibility; and
ATTACHMENT A 766
36 42893660v.16
(b) Exhibit the Premises to holders of encumbrances and to prospective purchasers, mortgagees or lessees of the Building.

Notwithstanding the foregoing, at all times Landlord shall use commercially reasonable efforts not to (i) interfere with Tenant’s business operations at the Premises, or (ii) upon thirty (30) days prior written notice to Landlord, enter (except in the case of an emergency) into specifically identified locations within the Premises, such as storage areas, filing cabinets, or other storage locations, which locations contain confidential information that Tenant is not permitted by applicable law to allow unauthorized persons access to, such locations to be identified in writing by Tenant in its reasonable discretion in accordance with the terms hereof; provided, however, that Landlord shall, at all times during the Term of this Lease, have all access to the Premises as may be necessary or reasonably desirable to Landlord to permit Landlord to fulfill its obligations under this Lease. If during the last month of the Term, Tenant shall have removed substantially all of Tenant’s property and personnel from the Premises, Landlord may enter the Premises and repair, alter and redecorate the same, without abatement of Rent and without liability to Tenant, and such acts shall have no effect on this Lease.

18.3 Rights Reserved by Landlord. Landlord reserves the following rights, exercisable without liability to Tenant for (a) damage or injury to property, person or business, (b) causing an actual or constructive eviction from the Premises, or (c) disturbing Tenant’s use or possession of the Premises:
(a) To name the Project and to change the name or street address of the Project;
(b) To install and maintain all signs on the exterior and interior of the Project; (c) To have pass keys to the Premises and all doors within the Premises, excluding Tenant’s vaults and safes and any rooms housing servers and any rooms containing sensitive and confidential materials (collectively, the “Confidential Areas”), as determined by Tenant in its reasonable discretion, and Landlord shall have the right to use any and all means which Landlord may deem necessary or proper to open said doors in an emergency in order to obtain entry to any portion of the Premises, and any entry to the Premises or portions thereof obtained by Landlord by any of such means or otherwise shall not under any circumstances be construed or deemed to be a forcible or unlawful entry into, or a detainer of, the Premises, or an eviction, actual or constructive, of Tenant from the Premises or any portion thereof; (d) To enter the Premises for the purpose of making inspections, repairs, alterations, additions or improvements to the Premises or the Project and to take all steps as may be necessary or desirable for the safety, protection, maintenance or preservation of the Premises or the Project or Landlord’s interest therein, or as may be necessary or desirable for the operation or improvement of the Project or in order to comply with applicable Regulations; and (e) To change the arrangement and/or location of entrances or passageways, doors and doorways, and corridors, elevators, stairs, toilets or other public parts of the Building, provided that such changes do not unreasonably interfere with the suitability of the Premises for Tenant’s use.

Tenant hereby waives any claim for damages for any injury or inconvenience to or interference with Tenant’s business, any loss of occupancy or quiet enjoyment of the Premises, ATTACHMENT A 767
37 42893660v.16
and any other loss occasioned thereby, except to the extent caused by Landlord’s gross negligence or willful misconduct. Notwithstanding anything to the contrary contained in this Section 18.3, except in the case of an emergency, Landlord will not have, and will not be granted, access to any of the Confidential Areas without (i) obtaining Tenant’s prior written consent to such access and (ii) permitting a representative of Tenant to be present at all times during such access.

18.4 Quiet Enjoyment. Tenant, upon paying the Rent and performing all of its obligations under this Lease, shall peaceably and quietly enjoy the Premises, subject to the terms of this Lease and to any mortgage, lease, or other agreement to which this Lease may be subordinate.

18.5 Force Majeure. Any prevention, delay or stoppage of work to be performed by Landlord or Tenant which is due to strikes, labor disputes, inability to obtain labor, materials, equipment or reasonable substitutes therefor, acts of God, governmental restrictions or regulations or controls, judicial orders, enemy or hostile government actions, civil commotion, fire or other casualty, or other causes beyond the reasonable control of the party obligated to perform hereunder, shall excuse performance of the work by that party for a period equal to the duration of that prevention, delay or stoppage. Nothing in this Section, however, shall excuse or delay Tenant’s obligation to pay Rent or other charges under this Lease.

18.6 Counterparts. This Lease may be executed in multiple counterparts, all of which shall constitute one and the same Lease.

18.7 No Option. The submission of this Lease to Tenant shall be for examination purposes only, and does not and shall not constitute a reservation of or option for Tenant to lease, or otherwise create any interest of Tenant in the Premises or any other premises within the Project. Execution of this Lease by Tenant and its return to Landlord shall not be binding on Landlord notwithstanding any time interval, until Landlord has, in fact, signed and delivered this Lease to Tenant.

18.8 Further Assurances. The parties agree to promptly sign all documents reasonably requested to give effect to the provisions of this Lease.

18.9 Mortgagee Protection. Tenant agrees to send by (i) United States certified or registered mail, return receipt requested, postage prepaid, or (ii) any nationally recognized courier service (such as FedEx), for next-day delivery, to be confirmed in writing by such courier or other method prescribed by Landlord, to any first deed of trust beneficiary of Landlord whose address has been furnished to Tenant, a copy of any notice of default served by Tenant on Landlord. Notwithstanding the provisions of Section 13.3, if Landlord fails to cure such default within the time provided for in this Lease, such beneficiary shall have an additional thirty (30) days to cure such default; provided that if such default cannot reasonably be cured within that thirty (30) day period, then such beneficiary shall have such additional time to cure the default as is reasonably necessary under the circumstances.

18.10 Attorneys’ Fees. If either party incurs any expense, including reasonable attorney’s fees, in connection with any action instituted by either party by reason of any dispute under this Lease or any default or alleged default of the other party, the party prevailing in such action shall be entitled to recover its reasonable expenses from the other party. The term ATTACHMENT A 768
38 42893660v.16
“prevailing party” means the party obtaining substantially the relief sought, whether by compromise, settlement or judgment.

18.11 Tenant’s Certificates. Within ten (10) days after any written request which either party may make from time to time, such requested party (the “Requested Party”) shall execute and deliver to the other party (the “Requesting Party”) a certificate (the “Certificate”) substantially in the form attached hereto as Exhibit “D” and hereby made a part hereof. Any failure by the Requested Party to so execute and deliver the Certificate shall, at the Requesting Party’s election, constitute a certification by the Requested Party that the statements which may be included in the Certificate (as same may have been so amended or supplemented) are true and correct, except as the Requesting Party shall otherwise indicate. Landlord and Tenant intend that the Certificate may be relied upon by either party’s Lenders, and any prospective lender, purchaser, subtenant or assignee.

18.12 Holding Over.
(a) If Tenant, with Landlord’s written consent, remains in possession of all or any portion of the Premises after the expiration or sooner termination of the Term, such holding over shall be deemed to constitute a tenancy from month to month only, upon such terms and conditions hereof as existed at the expiration or termination of the Term; provided, however, during such holding over, Basic Monthly Rent shall be the Basic Monthly Rent in effect immediately prior to such expiration or termination or such other amount mutually agreed upon between Tenant and Landlord, and any and all options and rights of first refusal or other preferential rights of Tenant shall be deemed to have lapsed and to be of no further force or effect. Landlord may terminate such tenancy from month to month by giving Tenant at least thirty (30) days written notice thereof at any time. Acceptance by Landlord of any Rent after such expiration or termination shall not be deemed to constitute Landlord’s consent to such holding over.
(b) If Tenant, without Landlord’s express, written consent, remains in possession of all or any portion of the Premises after the expiration or sooner termination of the Term, then, in addition to all other rights and remedies available to Landlord under other provisions of this Lease or at law or in equity, Tenant shall be treated as a Tenant at sufferance only, upon the terms and conditions set forth in this Lease so far as applicable, but at a Basic Monthly Rent equal to the greater of (i) one hundred fifty percent (150%) of the Basic Monthly Rent applicable to the Premises immediately prior to the date of such expiration or earlier termination; or (ii) one hundred and fifty percent (150%) of the prevailing market rate for buildings of similar quality and use in the same geographic area as the Premises (as reasonably determined by Landlord) for the Premises in effect on the date of such expiration or earlier termination. Acceptance by Landlord of any Rent after such expiration or termination shall not constitute a consent to a hold over hereunder or result in an extension of this Lease. Any and all options and rights of first refusal or other preferential rights of Tenant shall be deemed to have lapsed and to be of no further force or effect. Tenant shall pay an entire month’s Rent, with Basic Monthly Rent calculated in accordance with this Section 18.12. (c) If, for any reason, Tenant fails to surrender the Premises on the expiration or earlier termination of this Lease (including upon the expiration of any subsequent month-tomonth tenancy consented to by Landlord pursuant to Section 18.12(a) above), then, in addition to, and by no means in lieu of, the other provisions of this Section 18.12, all other rights and remedies granted to Landlord under the provisions of this Lease, Tenant shall indemnify, protect, ATTACHMENT A 769
39 42893660v.16
defend (by counsel approved in writing by Landlord) and hold Landlord harmless from and against any and all claims, judgments, suits, causes of action, damages, losses, liabilities and expenses (including attorneys’ fees, court costs and any and all consequential damages awarded as a result thereof) resulting from such failure to surrender, including, without limitation, any claim made by any succeeding tenant based thereon, and Tenant hereby acknowledges and agrees that if Tenant holds over without Landlord’s consent, Tenant shall be liable to Landlord for any net loss, liability or expense, that Landlord may suffer as a result, including lost rent (net of expenses). Landlord shall, in addition, continue to have all remedies for holdover as may be available to Landlord under other provisions of this Lease or at law or in equity. The foregoing indemnity shall survive the expiration or earlier termination of this Lease.

18.13 Notices. All notices, which Landlord or Tenant may be required or may desire to serve on the other shall be in writing and shall be served by personal delivery, by mailing the same by registered or certified mail, return receipt requested, postage prepaid, or sent by a nationally recognized courier service (such as Fed Ex) for next-day delivery, to be confirmed in writing by such courier, addressed as set forth in the Basic Lease Provisions or addressed to such other address or addresses as either Landlord or Tenant may from time to time designate to the other in writing in accordance with this Article. Notices, demands and other communications given in the foregoing manner shall be deemed given when actually received or refused by the party to whom sent, unless mailed, in which event same shall be deemed given on the day of actual delivery as shown by the addressee’s registered or certified mail receipt or at the expiration of the third (3rd) business day after the date of mailing, whichever first occurs.

Notwithstanding anything to the contrary contained herein, but by no means limiting the foregoing, until such time as Landlord may otherwise notify Tenant in writing in accordance with the terms hereof, all communications to be delivered by Tenant to Landlord shall be delivered to Landlord at both of Landlord’s addresses for notices set forth in Section 8 of the Basic Lease Provisions, and no notice shall be deemed received by Landlord until such notice has been received by Landlord at both such addresses.

18.14 Rules and Regulations. Tenant agrees to abide by and comply with the Rules and Regulations delivered to Tenant by Landlord from time to time. Landlord shall not be liable to Tenant for any violation of such Rules and Regulations by any other tenant. In the event of any inconsistencies between this Lease and the Rules and Regulations, the language of this Lease shall prevail. Landlord shall have the right, from time to time, to amend and modify the Rules and Regulations. Landlord shall have no liability for its failure to enforce the Rules and Regulations against any other lessee in the Building.

18.15 Governing Laws. This Lease shall be governed by and construed in accordance with the laws of the State of California.

18.16 Headings and Titles. The marginal titles to the Articles of this Lease are inserted for convenience of reference only and shall have no effect upon the construction or interpretation of any part hereof.

18.17 Heirs and Assigns. Subject to the limitations on assignment, subletting and transfers, this Lease shall be binding upon and shall inure to the benefit of the parties hereto and their respective heirs, executors, administrators, successors and assigns.

18.18 Time of Essence. Time is of the essence with respect to the performance of every provision of this Lease.

ATTACHMENT A 770
40 42893660v.16

18.19 Severability. If any condition or provision of this Lease shall be held invalid or unenforceable to any extent under any applicable Regulations or by any court of competent jurisdiction, then the remainder of this Lease shall not be affected thereby, and each condition and provision of this Lease shall be valid and enforceable to the fullest extent permitted by applicable Regulation.

18.20 Authority. Each individual executing this Lease on behalf of a party hereto represents and warrants that she or he is duly authorized to execute and deliver this Lease on behalf of such party and that this Lease is binding upon such party in accordance with its terms.

18.21 Rentable Square Feet. All references to “rentable square feet” in this Lease refer to rentable square feet measured in accordance with ANSI/BOMA Z65.3 2009.

18.22 No Light, Air or View Easement. Any diminution or shutting off of light, air or view by any structure which may be erected on lands adjacent to the Project (whether or not by Landlord) shall not in any way affect this Lease or impose any liability on Landlord and shall not entitle Tenant to any reduction of Rent.

18.23 Entire Agreement. This Lease, along with any Exhibits affixed hereto, constitutes the entire and exclusive agreement between Landlord and Tenant relative to the Premises. This Lease may not be changed, modified, abandoned or discharged, in whole or in part, nor any of its provisions waived, except by a written instrument which is executed by both parties hereto.

18.24 Recording. Neither this Lease, nor any memorandum hereof shall be recorded without Landlord’s prior written consent.

18.25 Joint and Several Liability. If Tenant is comprised of more than one person or entity, then the obligations hereunder imposed upon such persons and entities shall be joint and several.

18.26 Confidentiality. Tenant acknowledges and agrees that the terms of this Lease are confidential and constitute proprietary information of Landlord. Disclosure of the terms hereof may adversely affect the ability of Landlord to negotiate other leases and impair Landlord’s relationship with other tenants. Accordingly, Tenant agrees, except as may be required by any laws of the State of California applicable to Tenant or leases made and to be performed in the State of California, that it, and its partners, members, officers, directors, employees, agents and attorneys, shall not intentionally and voluntarily disclose the terms and conditions of this Lease to any newspaper or other publication or any other tenant or apparent prospective tenant of the Project or any real estate agent (other than the broker(s) identified in the Basic Lease Provisions), either directly or indirectly, without the prior written consent of Landlord; provided, however, Tenant may disclose the terms to prospective subtenants or assignees under this Lease, to any other public entity or public official to which Tenant is required to disclose the terms of this Lease as a result of Tenant being a public entity, and to its attorneys and accountants, in each case, on a “need-to-know” basis, provided all of the same are instructed as to the confidentiality hereof.

18.27 No Representations or Warranties. Neither Landlord nor Landlord’s agents or attorneys have made any representations or warranties with respect to the Premises, the Building, the Real Property, the Common Facilities or this Lease, except as expressly set forth herein, and no rights, easements or licenses are or shall be acquired by Tenant by implication or otherwise.

ATTACHMENT A 771
41 42893660v.16

18.28 Exculpation. In no event shall any Landlord Party be liable for the performance of Landlord’s obligations under this Lease. Tenant shall look solely to Landlord to enforce Landlord’s obligations hereunder and shall not seek any damages against any Landlord Party.

The liability of Landlord for Landlord’s obligations under this Lease shall not exceed and shall be limited to Landlord’s interest in the Building, and Tenant shall not look to any other property or assets of Landlord or any other Landlord Party in seeking either to enforce Landlord’s obligations under this Lease or to satisfy a judgment for Landlord’s failure to perform such obligations.

18.29 Consents. Tenant hereby waives any monetary claim against Landlord which it may have based upon any assertion that Landlord has unreasonably withheld or unreasonably delayed any requested consent, and Tenant agrees that its sole remedy shall be an action or proceeding to enforce any such provision or for specific performance, injunction or declaratory judgment. In the event of such a determination, the requested consent shall be deemed to have been granted; however, Landlord shall have no liability to Tenant for its refusal to give such consent. The sole remedy for Landlord’s unreasonably withholding or delaying of consent shall be as provided in this Section.

18.30 Waiver. The failure of Landlord to exercise its rights in connection with any breach or violation of any term, covenant, or condition herein contained, shall not be deemed to be a waiver of such term, covenant or condition or any subsequent breach of the same or any other term, covenant or condition herein contained. The subsequent acceptances of Rent hereunder by Landlord shall not be deemed to be a waiver of any preceding breach by Tenant of any term, covenant or condition of this Lease other than the failure of Tenant to pay the particular Rent so accepted, regardless of Landlord’s knowledge of such preceding breach at the time of acceptance of such Rent. Waiver by Landlord of any term, covenant or condition contained in this Lease may only be made by a written document signed by Landlord.

18.31 No Merger. The voluntary or other surrender of this Lease by Tenant, or a mutual cancellation thereof, shall not work a merger, and shall, at the option of Landlord, terminate any and all existing subleases or subtenancies, or operate as an assignment to Landlord of any or all of such subleases or subtenancies. No act or omission of Landlord or any representative thereof shall be deemed to constitute acceptance of any surrender, and no surrender shall be deemed to have occurred, unless in a writing executed by Landlord and approved in writing by any of Landlord’s Lenders, should such approval be required under the terms of any loan agreement, mortgage or deed of trust, as the case may be.

18.32 Form of Payment; Business Days. Rent and all other sums payable under this Lease must be paid in lawful money of the United States of America. As used in this Lease, “business day” means any day excluding (a) Saturday, (b) Sunday, (c) any day which is a legal holiday under the laws of the State of California, and (d) any day on which banking institutions located in such state are generally not open for the conduct of regular business.

18.33 Cumulative Remedies. None of Landlord’s rights or remedies hereunder shall be deemed to be exclusive, but shall, wherever possible, be cumulative with all other rights and remedies hereunder and at law and in equity.

18.34 Mutual Covenants. Each provision of this Lease performable by Tenant shall be deemed to be both a covenant of Tenant and a condition to Landlord’s performance hereunder.

ATTACHMENT A 772
42 42893660v.16

18.35 Relationship. Nothing contained in this Lease shall be construed to create the relationship of principal and agent, partnership, joint venture or any other relationship between the parties hereto, other than the relationship of landlord and tenant.

18.36 Modification. This Lease may not be modified except by a written document executed by the parties hereto.

18.37 Representations and Warranties. Neither Landlord nor any broker, agent or representative thereof has made any warranty or representation with respect to the tenant mix of the Building, the identity of prospective or other tenants of the Building, or otherwise except as explicitly set forth herein.

18.38 Construction. The language in all parts of this Lease shall be in all cases construed simply according to its fair meaning, and not strictly for or against Landlord or Tenant.

The principal of construction against draftsmen shall have no application in the interpretation of this Lease. Any reference to any Section herein shall be deemed to include all subsections thereof unless otherwise specified or reasonably required from the context. Any reference to “days” or “months” herein shall refer to calendar days or months, respectively, unless specifically provided to the contrary. The terms “herein”, “hereunder” and “hereof” as used in this Lease mean “in this Lease”, “under this Lease” and “of this Lease”, respectively, except as otherwise specifically set forth in this Lease.

18.39 Exhibits. Any and all exhibits and addenda referred to in this Lease are incorporated herein by reference as though fully set forth herein.

18.40 Other Agreements. Tenant hereby warrants and represents that neither its execution of nor performance under this Lease shall cause Tenant to be in violation of any agreement, instrument, contract or Regulation by which Tenant is bound. Tenant agrees to indemnify Landlord against any loss, cost, damage or liability including, without limitation, reasonable attorneys’ fees arising out of Tenant’s breach of this warranty and representation.

18.41 Discrimination. Tenant covenants by and for itself, its successors and assigns, and all persons claiming under or through them, and this Lease is made and accepted upon and subject to the following conditions: That there shall be no discrimination against or segregation of any person or group of persons, on account of sex, marital status, age, race, color, religion, creed, national origin or ancestry, in the leasing, subleasing, renting, transferring, use, occupancy, tenure or enjoyment of the Premises herein leased, nor shall Tenant itself, or any person claiming under or through it, establish or permit such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sublessees, subtenants or vendees in the Premises. [SIGNATURES CONTINUE ON NEXT PAGE]
ATTACHMENT A 773
ATTACHMENT A 774
ATTACHMENT A 775
Exhibit “A”
42893660v.16
EXHIBIT “A”
Floor Plan of Premises
[attached]
ATTACHMENT A 776
Exhibit "A"
FOR PROPERTY AT ---'4~O.!lOwE!;;. •...!Ml:!..l!.Ia!J.IQ••S!l!tr;,s;e.;:;e!l...!<S~1O.!l.C.ll.k!gl.!.Wn.....J..C!:lA,...;:-....lT.LlhlU.ir.l!.d.r:F.lllo!llo~r _ 1 Totll Oelin_ee1 Alec m.ns RSf
NOT TO SCALE- SPACE SIZING APPROXIMATE AND B.A.SEDON RENTABLE SQUARE FEET Floor RSF
First 19.491
Third 25,755
Fourth 25,730
Seventh 9.344
Total 80,320
EXHIBIT "A" 2 of3
This information has been obtained fro m sources be lieved rehable. We have not venfied I and make no guarantee. warranty or representation about it.

Yo u a nd your advisors should conduct a careful. indep endent inv estiqation of the property to determine to yo ur satisfaction the suita billy of the property for your needs
42893660v.16
ATTACHMENT A 777
42893660v.16
ATTACHMENT A 778
Exhibit “A”
42893660v.16

ATTACHMENT A
779
Exhibit “B”
42893660v.16
EXHIBIT “B”
Real Property Description
ATTACHMENT A 780
Exhibit “B”
42893660v.16
ATTACHMENT A 781
Exhibit “B”
42893660v.16
ATTACHMENT A 782
Exhibit “B”
42893660v.16
ATTACHMENT A 783
Exhibit “B”
42893660v.16
ATTACHMENT A 784
Exhibit “B”
42893660v.16
ATTACHMENT A 785
Exhibit “B”
42893660v.16
ATTACHMENT A 786