OFFICE LEASE between RPR0152N3 LLC, as Landlord and CITY

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

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OFFICE LEASE

between

RPR01 52N3 LLC, as Landlord

and

CITY OF SAN JOSE, as Tenant

)


TABLE OF CONTENTS . . . . . . . . . . . . . . . , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .... . . . . . . . .. . . . . . . . . . . . . . . PAGE

BASIC LEASE INFORMATION ............................ . ....................................................... .............. ......... ii 1 . PREMISES . .... , .............................. , ........................................................................................ , ......... 1 2. TERM . ....................... ..................................................................................... .................................. 1 3. RENT; ADDITIONAL CHARGES . ................................. ................... ................. .................... ...... .3 4. USE . .................................. ........................ ................ ...... , ..... , ........................................................... 3 5. CONSTRUCTION OF PREMISES; BUILDING CHANGES . ...................................................... .4 6. ALTERA TIONS ............ , ................................................................ , ................................................ .4 7. REPAIRS AND MAINTENANCE . ............................... , .................................................. , .. ............ 5 8. LIENS . . ......... , ............................ , ............................................................................ ........................ 6 9. COMPLIANCE WITH LAWS AND INSURANCE REQUIREMENTS . ...................................... 7 10. SUBORDINATION . .......... ......................... ........ . .............. ........................................................... 7 1 1 . DAMAGE AND DESTRUCTION . ........ ...................................................................................... 8 1 2. EMINENT DOMAIN .. ...... , ............................ , ... ............ , ...................... " ....... " ... , ....... , ................. 9 1 3. ASSIGNMENT AND SUBLETTING . .... , .. , ....... , . . . . ................. , .. . . .. , ............. " ......... ,' ....... " ......... 9 14. UTILITIES AND SERVICES . ......................................................................................... , ...... , .. ,11 15. DEFAULT. .... , ... ,." ........ ,", .... , ... ,." ...... . . .... ", .. , ... , ...... ,.".,. , .. , ........................ , .. , . , . . . , .... , ......... , .... ,.11 16. INDEMNITY: TENANT'S INSURANCE .... ", ................. , .... ".,., ............. , ..... , ... , ..... , .... , ........... ,12 1 7, ACCESS TO PREMISES; QUIET ENJOYMENT, ............................................ ........................ 1 4 18, NOTICES, ", ..... , .. , ..... ".".,., ....... , .... , .... , ...... " ..... , ....... , . . ,', .. , . . .... , ... , .. , ........ ,", ........ , .... , ...... , ...... , ... 1 4 1 9. ESTOPPEL CERTIFICATES .. ............... ............... ................................................................. .... 1 5 20. TAX ON TENANT'S PERSONAL PROPERTY . .. ............ ............................................ . ......... .. 15 2 1 . SECURITY DEPOSIT . .................................................. , ..................... , ...................................... 1 5 22. FORCE MAJEURE .. .......... , ............... , .. ....................................................... ............................... 15 23 . MISCELLANEOUS . .............. ........... . ..... ..... .......................... ......................... .. . . . . . . ........... ... ...... 16 24. TERMINATION RIGHT. .. , .............................................................. , ....................... .................. 17 25. BROKERS . .......................................................... , ................................. , .............. ......... , ............. 1 8

EXHIBIT A - Floor Plan(s) EXHIBIT B - Work Letter EXHIBIT C - Rules and Regulations

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Lease Date:

OFFICE LEASE

BASIC LEASE INFORMA nON (Lease SUm111aty)

December 1, 2015

Building Address: 152 N 3rd Street. San Jose, CA 95112

Landlord: RPR0l52N3 LLC A California Limited Liability Company

Address of Landlord: 152 N. 3,d Street, Suite M, San Jose, CA 95112

Tenant: CITY OF SAN JOSE, a Municipal Corporation of the State of California

Address of Ten ant: 200 East Santa Clara Street, San Jose, CA 95113

Rentable Area of Premises (Section 1.1): 3,288 rentable square feet

Suite and/or Floors (Section I): Unit 602

Term (Section 1 .2): Sixty (60) months

Commencement Date: The later of: December 1,2015 or the date on which the Tenant Improvements as described in Exhibit B to this Lease are substantially completed and the Premises are delivered to Tenant

Expiration Date: November 30, 2020, unless extended

Monthly Base Rent (Section 3):

Year Monthly Base Rent Aru1Ual Escalation

1 $7,167.84 0% 2 $7,454.55 4% 3 $7,752.74 4% 4 $8,062.85 4% 5 $8,385.36 4%

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Monthly Base Rent shall be full service and shall include all utilities, gas, water, sewer, refuse clean-up, j anitorial service, operating expenses and building maintenance.

Use (Section 4): General Office

Tenant's Minimum General Liability Insurance (Section 16): $1 ,000,000.00

Security Deposit (Section 2 1 ): $8,385.36

Each reference in the Lease to the Summary shall mean the respective information set forth above and shall be deemed to incorporate all of the terms provided under the particular Lease paragraph pertaining to such infonnation. To the extent there is any conflict between the provisions hereof and any more specific provision of this Lease, the Lease provision shall control.

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LEASE

THIS LEASE (this "Lease") is entered into, as of tills __ day of December, 201 5 by and between RPRO 152N3 LLC, a California limited liability company ("Landlord"), and CITY OF SAN JOSE, a municipal corporation of the State of California ("Tenant"), and shall be effective upon the mutual execution by Landlord and Tenant.

Landlord and Tenant hereby agree as follows.

1 . PREMISES.

1 .1 Lease of Premises. Subject to the contents of this Lease, Landlord hereby leases to Tenant and Tenant hereby leases from Landlord those premises ("Premises") in the building described in the Summary ("Building"), as shown on the floor planes) attached as Exhibit A to this Lease (the "Floor Plan") and more particularly described in the Work Letter (defined below) attached as Exhibit B to this Lease. Landlord shall cooperate with Tenant or its representative on a final architectural plan before start of constmction.

1 .2 Parking. DUling the term hereof, Landlord shall cause to be provided to Tenant and its employees, at no additional cost to Tenant, a license to use two (2) non-exclusive parking spaces for parking for Tenant and its employees, one (I) of which shall be in the garage located in the Building and the other one ( 1 ) of which shall be in the smface parking lot available for the Building.

2. TERM.

2.1 Initial Term. The term of this lease (the "Term") commences on the later of the December 1, 2015, or the date on which the Tenant Improvements (defined below) as described in Exhibit B to this Lease (the "Work letter") are substantially completed and the Premises are delivered to Tenant (the "Commencement Date"). The Term of this Lease shall begin on the Commencement Date and extend until November 30, 2020, unless otherwise modified pursuant to the terms of this Lease (the "Expiration Date"). Except as provided in Section 24 below, if for any reason, Landlord cannot deliver possession of the Prenilses to Tenant on or prior to December 1, 2015, this Lease shall not be void or voidable nor shall Landlord be liable to Tenant for any loss or damage resulting therefrom unless arising from the act or omission of Tenant. Tenant shall not pay any Rent until the Commencement Date. Landlord shall permit Tenant to access the Premises prior the Commencement Date at no cost as provided in Section 5.2; however, all other provisions of this Lease shall apply and be of full force and effect during any period of such early access.

2.2 Option to Extend. Landlord hereby grants to Tenant two (2) options to extend the Term of this Lease beyond tile Expiration Date for two (2) additional periods of thirty six (36) months (individually, the "Extension Term" and collectively, "Extension Terms"). The "Term" as extended by the Extension Term(s) shall be collectively referred to herein as the "Maximum Term".

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

(a) Exercise. Tenant must exercise the Option to Extend, if at all, by giving Landlord written notice of such exercise not less than 1 80 days prior to the Expiration Date. The Extension Term shall be on the same terms and conditions as contained herein, except that (i) there shall be no further right to renew or otherwise extend the Term, the Extension Term, or the Maximum TelID and (ii) Base Rent during the Extension Term shall be the fair market rental value determined pursuant to Section 2.l(b), below.

(b) Extension Term Base Rent. Base Rent for any Extended Term shall be established by mutual agreement of the parties no later thrul 120 days prior to the expiration of the Term. If the parties are not able to agree upon the then fair market rental value of the Premises, then the fair market rental value of the Premises shall be determined via a "baseball style" arbitration in accordance with the following procedure. If the pruties are not able to mutually agree upon the then fair market rental value of the Premises on or before the 120th day prior to the commencement of the Extension Term, then not later than the 90th day prior to the commencement of the Extension Tenn, each pruty shall make its own determination of the fair market rental aJ110unt for the Premises and notify the other no later than ten ( l 0) days thereafter, which written opinion may include such supporting documentation, broker's opinions, comparable information and the like as a pmty may wish. The two patties' written determinations of value shall be submitted to binding arbitration before a licensed commercial real estate broker who shall have at least ten (10) yeru's' experience in leasing office space in Santa Clara County, California. The arbitrator must not have acted as an agent or received a commission for lease or sale of real property for either party for the prior five (5) year period. The parties shall mutually agree on the arbitrator. If the patties are unable to agree on a single arbitrator within fifteen ( 15) days after the date on which the later written determination of value was prepared and served, then they shall each appoint one broker having the foregoing qualifications, and the two brokers shall pick a third person having similar qualifications (provided that such person may not have been one previously submitted by either party), and that third person shall be the lone arbitrator. The determination by the arbitrator shall be limited solely to the issue of determining which pruiy's figure is the closest to the actual fair market rental amount for the Premises, using the parameters of this Section. The arbitrator shall not have the power to set a different Base Rent from the two figures submitted by the pm·ties, and must select the submitted position which most nearly approximates the m'bitrator's determination of the fair market rent for the Extended Tenn. The arbitrator shall have the right to conduct his or her own research, or to request clarifying information or other SUppOlt from the parties. All communications between the arbitrator and any palty or its agents or consultants shall be sent to all pmties concurrently. The arbitrator shall use best effolis to submit his or her decision in writing within thirty (30) days of the commencement of arbitration. The costs of the arbitration shall be spit fifty-fifty between LatIdlord and Tenant.

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(c) Amendment to Lease. If Tenant properly exercises the Option to Extend, Landlord and Tenant shall execute and deliver an amendment to this Lease setting f0l1h such fact and the amount of Base Rent for the Extension Tenn.

(d) Relationship to Other Provisions. If Tenant properly exercises the Option to Extend, such exercise shall apply to the original Premises and to any additional space leased hereunder.

3. RENT; ADDITIONAL CHARGES.

3 . 1 Tenant will pay to Landlord during the Term the monthly Base Rent specified in the Summary ("Base Rent") begiruung on the Commencement Date, and no other additional rent or charges to Tenant, in consecutive monthly installments on or before the first day of each calendar month, in advance, at the address specified for Landlord in the Summary, or such other place as Landlord may designate in writing, without any prior demand and without any deductions or set off. [f ei ther the Commencement Date or the Expiration Date oCClli'S on a day other than the last day of a calendar month, then the rental for such fractional month will be prorated based on a thirty (30) day month.

3.2 If Tenant fails to pay any Base Rent or other amounts due to Landlord under the terms of this Lease (which amOlmts are sometimes referred to herein, together with Base Rent, as "Rent") within ten ( l0) days after the date on which Landlord shall have provided notice of any deficiency, such unpaid amounts will be subject to a late payment charge equal to ten percent (10%) of the unpaid amounts in each instance within five (5) calendar days after the receipt of such notice of deficiency. The late payment charge has been agreed upon by Landlord and Tenant, after negotiation, as a reasonable estimate of the additional administrative costs and dettiment that will be incurred by Landlord as a result of any such failure by Tenant, the actual costs thereof being extremely difficult if not impossible to detennine. The late payment charge constitutes liquidated damages to compensate Landlord for its damages resulting from such failure to pay and shall be paid to Landlord together with such unpaid amounts.

4. USE.

4.1 Tenant shall use and continuously occupy the Premises solely for the use specified in the Summary and for no other use or purpose. Tenant (in its capacity as "Tenant" hereunder rather than in its capacity as a governmental entity) shall take no action, nor permit any action to be taken, in or about the Premises that will in any way increase the existing rate of or affect any fire or other insurance upon the Building or any of its contents, or cause cancellation of any insurance policy covering all or any part of the Building or any of its contents, or which will in any way injure or interfere with the rights of other tenants or occupants of the Building, 1101' shall Tenant (in its capacity as "Tenant" hereunder, rather than in its capacity as a govel1Jl11ental entity) use or allow the Premises to be llsed for any unlawful or objectionable purpose, nor cause, maintain or pennit any nuisance in, on or about the Premises, nor commit nor suffer to be comnutted any waste in, on or upon the Premises.

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4.2 Tenant shall have a non-exclusive right to use the common area of the Building ("Building's Common Area") including the Building's lobby, hallways, elevators, stairwells, parking areas and restrooms and the Common Area (as hereinafter defined); provided, however, that Tenant's use of the Building's Common Area and the Common Area shall be subject to the Rules and Regulations as described in Section 23.9 below. As used in this Lease, the term "Common Area" shall mean the outdoor area between the Building and the other building in the Project. Landlord reserves the right, from time to time, to utilize portions of the Building's Common Area and the Common Area for entertainment, displays, product shows, the leasing of kiosks or such other uses as, in Landlord's Judgment, tend to attract the public.

5. CONSTRUCTION OF PREMISES; BUlLDING CHANGES.

5.1 Landlord shall petforrn the work and make the installations in the Premises substantially as set fOlih in the Work Letter. Landlord reserves the right, at any time and from time to time, to make alterations, additions, repairs, or improvements to or in or to decrease the size or area of all or any part of the Building, the Building'S Common Area, the fixtures and equipment therein and the areas outside the Building, and the Common Area, and to change the anangement and/or location of entrances or passageways, doors, corridors, elevators, stairs, toilets and other public PaIts of the Building, provided that any such alterations or additions shall not materially diminish the quality or quantity of services being provided to the Premises or adversely affect the functional utilization of the Premises.

5 .2 Subject to the terms of the Work Letter, Landlord shall commence aIld at all times diligently pursue such commercially reasonable actions as may be necessary to substantially complete the improvements described in the Work Letter (the "Tenant Improvements") on or before December 1, 2015. Subject to the terms of this Lease and the Work Letter, Tenant may enter the Premises ("Ea.-ly Access rught") prior to the Landlord tendering possession of the Premises so that Tenant may commence installation of Tenant's data cabling, furniture, fixtures and equipment; provided, however, that (i) Tenant shall provide Landlord with no less than forty-eight (48) hours prior written notice of its election to exercise Tenant's Early Access Right; and (ii) Tenant and all Tenant's contractors and/or subcontractors shall not interfere with the Landlord's or Landlord's contractors' and/or subcontractors' efforts to complete the improvements to be constructed by LaIldlord and Landlord reserves the right to require Tenant to schedule Tenant's Early Access Right work in a manner that minimizes interference with the services of aIly of the parties involved. The date upon which the TenaJ1t Improvements are substantially completed shall be known as the "Delivery Date." The parties acknowledge and agree that the anticipated Delivery Date is December 1, 2015 and that in no event shall the Delivery Date be later thaIl December 1, 2015 unless otherwise agreed by Landlord and Tenant. Landlord represents, acknowledges and agrees to pursue completion of the Tenant Improvements on or before such date.

6. ALTERATIONS.

6+ Tenant shall not make or permit any alterations, installations, additions or improvements, structural or otherwise (collectively, "Alterations"), in or to the Premises or the Building or the Building systems without Landlord's prior written consent, which Landlord may

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give or withhold in Landlord's sole discretion; provided, however, if Landlord has not approved or disapproved any Alterations within fifteen (15) business days after Tenant's request therefor (which request shall be accompanied by plans and specifications for such Alterations sufficiently detailed to permit Landlord to approve or disapprove such work, then Landlord shall be deemed to have disapproved such Alterations.

6.2 All appurtenances, fixtures, improvements, equipment, additions and other property attached to or installed in the Premises at any time (including Tenant's Alterations) shall be and remain the propeliy of Landlord, and shall not be removed by Tenant unless requested by Landlord. All items installed in the Premises by or for the account of Tenant, without expense to Landlord, and which can be removed without damage to the Premises or the Building (collectively, "Tcllallt's Property") shall be and remain the propelty of Tenant and may be removed by it at any time during the Telm; provided, however, any equipment or other property for which Landlord has granted any allowance or credit to Tenant or which is a replacement for items originally provided by Landlord at Landlord's expense shall not be considered Tenant's Propelty. Upon the Expiration Date of this Lease, Tenant shall remove from the Premises all of Tenant's Property. Tenant shall repair or pay the cost of repairing any damage to the Premises or to the Building resulting from such removal. Any of Tenant's Propelty remaining in the Premises after the Expiration Date of this Lease may be retained by Landlord as its property or it may be disposed of by Landlord as permitted by applicable law.

7. REPAIRS AND MAINTENANCE.

7 . 1 Tenant shall, a t all times during the Term and a t Tenant's sole expense, keep all of the Premises in good condition and repair, except for ordinary wear and tear. Tenant waives its rights to make repairs at the expense of Landlord or to vacate the premises in lieu of such repairs except as set forth in this Lease. Tenant shall at the end of the Term surrender the Premises to Landlord in the same condition as when received, except for ordinary wear and tear and Alterations. Landlord has no obligation and has made no promise to alter, remodel, improve, repair, decorate or paint all or any pali of the Premises, the Building or the Common Area except as specifically set forth in the Work Letter and this Lease.

7.2 Landlord shall repair and maintain the structural portions of the Building, the Building systems and the Common Area. If the necessity for such maintenance and repairs is in any way caused by the intentional acts, neglect, fault or omission of Tenant or its employees or invitees, Tenant shall pay promptly to Landlord the reasonable and actual out of pocket direct cost of such repairs provided that Landlord commences any required repairs promptly following notice of the need for such repairs fi'om Tenant and proceeds in a diligent malUler to complete such repairs. Notwithstanding the foregoing, Landlord shall not be liable for any failure to make any such repairs or to perform ally such maintenance unless Landlord receives notice of the need for such repairs or maintenance fi'om Tenant and fails to make such repairs or perform such maintenance for a reasonable period of time following such notice by Tenant. Rent shall not abate nor shall Landlord be liable as a result of any injury to or interference with Tenant's business arising from the making of any repairs, or the perfonnance of any maintenance, in or to

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any portion of the Building, the Premises or the Common Area, except as expressly set forth below.

7.3 In the event that Landlord is unable to supply any of the Building's sanitary, electrical, heating, air conditioning, water, or parking as provided in Section 1.2 of this Lease (collectively, "Essential Services") and such Essential Services are disrupted for a period of three (3) consecutive business days vvithout a reaSf111Bble eft() rt frotH the Landlord tu wldress find COI'IG'O' Iheiss'.'cs, and such disruption materially impairs Tenant's ability to carry on its operations in the Premises, the Rent due hereunder shall be abated, retroactively effective as of the first business day of such material interference with Tenant's operations, based upon the extent to which stich inability to supply Essential Services materially impairs Tenant's ability to carry on its operations in the Premises. Such abatement shall continue until the Essential Services have been restored to the extent that the lack of any remaining services no longer materially impairs Tenant's ability to carryon its business in the Premises. Tenant shall not be entitled to such abatement to the extent that Landlord's inability to supply Essential Services to Tenant is caused by Tenant, its employees, contractors or agents in the course of performing their official duties, or by circumstances beyond Landlord's reasonable control.

8 . LIENS. Tenant (in its capacity as "Tenant" hereunder, rather than in its capacity as a governmental entity) shall keep the Premises and the Building free from any liens arising out of any work performed, material furnished or obligations incurred by or for Tenant. In the event that Tenant shall not, within ten (10) days following the imposition of any such lien, cause the lien to be released of record by payment or posting of a proper bond, Landlord shall have in addition to aU other remedies provided herein and by law the right but not the obligation to cause same to be released by such means Landlord shall deem proper, including payment of the claim giving rise to such lien. If Landlord elects to pay a claim upon which a lien is based, then Tenant shall pay to Landlord the actual sum of such payment by Landlord upon demand, and Tenant shall pay to Landlord any and all other reasonable expenses incurred by Landlord in connection with the release of such lien from record (including without limitation reasonable attorney's fees, costs, and expenses) shall be payable to Landlord by Tenant upon demand. Landlord shall have the right at all times to post and keep posted on the Premises any notices permitted or required by law or that Landlord shall deem proper for the protection of Landlord, the Premises, and the Building, from mechanics' and materialmen's liens. Tenant shall give to Landlord at least ten (10) bnsiness days prior written notice of commencement of any repair or construction on the Premises.

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9. COMPLIANCE WITH LAWS AND INSURANCE REQUIREMENTS.

9.1 By executing this Lease Landlord represents and wan'ants that the Building and all other items which the Landlord is obligated to construct, repair and or maintain hereunder, the Prel1lises and every part thereof that Tenant is obligated to keep or maintain pursuant to this Lease, are and shall be in good operating condition and is free from any water intrusion and/or water damage and that the structural elements of the roof, bearing walls and foundation of the Building are alld shall be free from material defect on the Delivery Date. In the event that it is determined that this warranty has been violated, then it shall be the obligation of the Landlord, in addition to all other remedies available to Tenant hereunder, after receipt of written notice from Tenant setting fmth with specificity the nature of the violation, to promptly rectify such violation, at Landlord's sole cost. Landlord further warrants that, to Lal1dlord's actual knowledge, the improvements comprising the Premises and the Building (x) comply with the building codes, (y) comply with all applicable Laws, ordinances, rules, regulations, orders, celtificates of occupancy, conditional use or other permits, variances, covenants and restrictions of record, and requirements of any fire insurance underwriters, rating bureaus or government agencies and (z) are, to its knowledge, free from any and all environmental hazards as of the Delivery Date. If the Premises do not comply with said warranty, Landlord shall, promptly after receipt of written notice from Tenant setting forth with specificity the nature and extent of such non-compliance, rectify the same at Landlord's sole cost.

9.2 Tenant, at Tenant's cost and expense, shall comply with all laws, orders and regulations of federal, state, county and municipal authorities relating to the Premises or the use or occupancy thereof, or requirements of the American Insurance Association (fomlerly the National Board of Fire Underwriters) and with any similar body that shall hereafter perform the function of such association, except that Tenant shall not be required to make any structural Alterations in order to comply or to COlTect existing non-complying conditions in the Premises, if any, unless such Alterations shall be necessitated by Tenant's Alterations, or by the acts, omissions or negligence of Tel1ant or its servants, employees, contractors, agents, visitors or licensees.

10. SUBORDINATION. Without the necessity of any additional document, this Lease shall be subject and subordinate at all times to: (a) all reciprocal easement agreements and all ground leases or underlying leases which may now exist or hereafter be executed affecting the Building, the land on which the Building is located or the Conunon Area, or ally of the foregoing, and (b) the lien of any mortgage or deed of trust which may now exist or hereafter be executed in any amount for which the Building, land on which the Building is located, ground leases or underlying leases, or Lal1dlord's interest or estate in any of said items, is specified as security. Notwithstanding the foregoing, Landlord shall have the right to subordinate or cause to be subordinated to this Lease any of the items refelTed to in clause (a) or (b) above. In the event that any ground lease or nnderlying lease terminates for any reason or any mortgage or deed of trust is foreclosed or a conveyance in lieu of foreclosure is made for any reason, Tenant shall, notwithstanding ally subordination, attorn to and become the tenant of the successor in interest to Landlord (provided such successor expressly agrees in writing to be bound to all future obligations by the tenns of this Lease and subject to the condition that such successor Landlord

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agrees to recognize Tenant) and, upon Landlord's request, Tenant shall execute and deliver an instrument to evidence such attornment. Upon such request for attornment, Tenant's rights hereunder shall continue in full force and effect as a direct Lease between the successor Landlord and Tenant upon all of the terms, conditions and covenants as set forth in this Lease. Tenant shall execute and deliver, upon reasonable demand by Landlord and in the form reasonably requested by Landlord, any additional documents evidencing the priority or subordination ofthis Lease with respect to any such ground leases, underlying leases, reciprocal easement agreements or similar documents or instruments, or with respect to the lien of any such mortgage or deed of trust; provided, however, Tenant's obligation to deliver the foregoing document is conditioned on Tenant's receiving from any such ground lessee, party to a reciprocal easement agreement, mortgagee, or beneficiary IlI1der a deed of trust, a nondisturbance agreement reasonably acceptable to Tenant. Tenant's Director of Economic Development or its designee shall be the party authorized to execute and deliver such subordination agreement on behalf of Tenant.

II. DAMAGE AND DESTRUCTION.

1 1 . 1 If the Premises or the Building are damaged by fire or other casualty, Landlord shall repair the same, provided that repairs can be made within one hundred eighty ( 1 80) days after the date of damage. In this event, this Lease shall remain in full force and effect except that Tenant shall be entitled to a proportionate reduction of Rent while repairs are being made based upon the extent to which damage and the making of repairs by Landlord shall interfere with the business carried on by Tenant in the Premises. Within twenty (20) days after the date of danlage, Landlord shall notify Tenant whether or not repairs can be made within one hundred eighty (I 80) days after the date of damage. If Landlord determines that repairs cannot be made within one hundred eighty ( 180) days from the date of damage, Landlord shall have the option within thirty (30) days after the date of damage either to: (a) notify Tenant of Landlord's intention to repair damage and diligently prosecute repairs, in which event. this Lease shall continue in full force and effect and the Rent shall be reduced as provided herein, subject to Tenant's rights to terminate this Lease as described in Section 1 1 .2 below; or (b) notify Tenant of Landlord's election to terminate this Lease as of a date specified in sLlch notice, which date shall be not less than sixty (60) days after such notice is given. In the event of such notice to terminate, this Lease shall terminate on the date specified in such notice and the Rent shall be reduced based upon the extent to which such damage interfered with the business carried on by Tenant in the Premises up to the date of termination.

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1 1 .2 (a) If, (i) the Premises or the Building are damaged by fire or other casLlalty, (ii) La.ndlord notifies Tenant that repairs of such damage catmot be made within one hundred and twenty ( 120) days, and (iii) Tenant cannot conduct nOlmal business operations in the Premises during such time, Tenant may elect to terminate this Lease upon thiliy (30) days' Wlitten notice to Landlord, which notice must be given to Landlord by Tenant within thiliy (30) days after the date of Landlord's notice to Tenant described in (ii) above.

(b) It: (i) the Premises or the Building are damaged by fire or other casualty, (ii) Landlord notifies Tenant that repairs of such damage can be made within one hundred and twenty (1 20) days, (iii) Tenant cannot conduct normal business operations in the Premises during

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such time, and (iv) at the end of such one hundred and twenty (120) day period such damage has not been repaired to such an extent that Tenant is then able to reSlillle normal business operations at the Premises, then Tenant may elect to terminate this Lease upon thirty (30) days' written notice to Landlord, which notice must be given to Landlord within five (5) business days after the end of such one hundred and twenty (120) day period.

11.3 Landlord shall not be required to repair any damage by fire or other cause to the property of Tenant, or any damage caused by the negligence of Tenant, its contractors, agents, licensees or employees or make any repairs or replacements of any items located or installed on the Premises by, or at the expense of, Tenant (excluding, however, the improvements described in Exhibit B attached hereto and incorporated by reference herein). Tenant shall not be entitled to any compensation or damages from Landlord for loss of use of all or any part of the Premises for any damage to Tenant's business or profits, or for any disturbance to Tenant caused by any casualty or the restoration of the Premises following such casualty, except as may be set forth in Sections 7, 11 and 16 hereof. A total destruction of the Building shall automatically terminate this Lease. Tenant hereby waives the provisions of section 1932(2) and section 1933(4) of the California Civil Code or any similar law, statute, or ordinance now or hereafter in effect.

12. EMINENT DOMAIN. If all or any patt of the Premises shall be taken as a result of the exercise of the power of eminent domain or any transfer in lieu thereof, this Lease shall terminate as to the part so taken as of the date of taking, and, in the case of a partial taking, by any entity other than the City of San Jose, Tenant shall have the right to terminate this Lease as to the balance of the Premises by written notice to Landlord within thirty (30) days after such date; provided, however, a condition to Tenant's right to terminate shall be that Tenant's use of the balance of the Premises is substantially handicapped, impeded or impaired by the taking. If any material part of the Building shall be taken, Landlord shall have the right to terminate this Lease by written notice to Tenant within thilty (30) days of the date of taking. In the event of any taking, Landlord shall be entitled to any and all compensation, damages, income, rent, awards, or any interest therein whatsoever which may be paid or made in connection therewith, and Tenant shall have no claim against Landlord for the value of any unexpired telm of this Lease or otherwise; provided, Landlord shall have no claim to any pOliion of the award that is specifically allocable to Tenant's relocation expenses or the intemlption of or damage to Tenant's business. In the event of a partial taking of the Premises which does not result in a termination of this Lease, the Rent thereafter to be paid shall be equitably reduced. Tenant hereby waives and releases any right to terminate this Lease in whole or in part under sections 1265.120 and 1265.130 of the California Code of Civil Procedure or under any similar law, statute or ordinance now or hereafter in effect.

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13. ASSIGNMENT AND SUBLETTING.

13.1 Tenant shall not directly or indirectly, voluntarily or by operation of law, sell, assign, encumber, pledge or otherwise transfer or hypothecate its interest in or rights with respect to the Premises or Tenant's leasehold estate herennder (collectively, "Assignment"), or permit all or any portion of the Premises to be occupied by anyone other than Tenant or sublet all

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or any pOl1ion of the Premises or transfer a portion of its interest in or tights with respect to Tenant's leasehold estate hereunder (collectively, "Sublease") without Landlord's prior written consent in each instance, which consent shall not be unreasonably withheld. The foregoing Landlord consent is a condition precedent to the enforceability of any such Assigmnent or Sublease, and any attempt by Tenant to Assign 01' Sublease the Premises without Landlord's prior written consent shall be void and of no force or effect.

1 3 .2 If Tenant desires at any time to enter into an Assignment or a Sublease, Tenant shall first give notice to Landlord of its desire to do so, which notice shall contain (a) the name and address of the proposed assignee or subtenant, (b) the nature of the proposed assignee's or subtenant's business to be carried on in the Premises, (c) the tenns and provisions of the proposed Assignment 01' Sublease and (d) such financial information as Landlord lllay reasonably request concerning the proposed assignee or subtenant.

1 3 .3 At any time within twenty (20) business days after Landlord's receipt of the notice specified in Section 1 3 .2, Landlord may by notice to Tenant elect to (a) consent to the Sublease or Assignment, or (b) disapprove the Sublease or Assigmnent; Landlord's failure to respond to the notice within the time prescribed shall be deemed a disapproval of the applicable Sublease or Assignment). Tenant shall pay as additional rent Landlord's reasonable and actual attorneys' fees, costs, and expenses incurred in connection with the Landlord's review of any proposed Assigrunent or Sublease; provided, however, that such attorneys' fees do not exceed Two Thousand Five Hundred Dollars ($2,500.00). Landlord and Tenant agree that it shall be reasonable for Landlord to withhold its consent to any proposed Assignment or Sublease if the proposed assignee or sublessee does not intend to occupy the Premises for its own business purposes. Tenant agrees to pay Landlord the amount by which all Sllms payable to Tenant in connection with sllch Assignment 01' Sublease exceed the total of: (a) Rent payable by Tenant to Landlord hereunder (or a proportionate amount of such Rent representing the portion of the Premises subject to a Sublease if less than the entire Premises is subject to a Sublease; (b) reasonable leasing commissions incurred by Tenant in connection therewith; and (c) the cost of any Alterations, repairs, redecorating or advertising costs reasonably incurred in connection therewith. If Landlord consents to the Sublease or Assignment within such twenty (20) day period, Tenant may thereafter within sixty (60) days after Landlord's consent enter into such Assignment or Sublease with such approved assignee or sublessee upon the terms and conditions set forth in the notice furnished by Tenant to Landlord pursuant to Section 1 3 .2. No Assignment or Sublease shall be binding on Landlord until Tenant delivers an executed copy of such AssiglIDlent or Sublease to Landlord.

1 3 .4 No consent by Landlord to any Assignment or Sublease by Tenant shall relieve Tenant of any obligation to be performed by Tenant under this Lease, whether arising before or after the Assignment 01' Sublease. The consent by Landlord to any Assigmnent or Sublease shall not relieve Tenant ii-om the obligation to obtain Landlord's express written consent to any other AssigtID1ent or Sublease. Any Assignment or Sublease that fails to comply with this Section 1 3 shall be void. The acceptance of Rent by Landlord from a proposed assignee Of sublessee shall not constitute consent to such Assignment or Sublease by Landlord.

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14. UTILITIES AND SERVICES.

14. 1 Landlord agrees to furnish to the Premises, subject to the rules and regulations of the Building; (a) at all times, electricity for normal lighting and fractional horsepower office machines, freight and passenger elevator service, and water for lavatory and drinking purposes; and (b) at all times to all of the Premises heat and air-conditioning required in Landlord's reasonable judgment for the comfortable use and occupation of the Premises (and in amOlU1ts not inconsistent with amounts provided in comparable office buildings in downtown San Jose). Landlord also shall provide sufficient janitorial service for general office use, as reasonably determined by Landlord. Landlord shall not be liable for, and Tenant shall not be entitled to, any reduction of Rent (except as described in Section 7.3 above) by reason or on account of: (x) the installation, use of or interruption of use of any equipment in connection with the furnishing of any of the foregoing services except as a result of Landlord's negligence: (y) the failure to furnish or delay in furnishing any of the foregoing services when such failure is caused by accident, breakage, repairs, strikes, lockouts, or other labor disturbances or labor disputes of any character, or by any other cause, similar or dissimilar, beyond the reasonable control of Landlord, or by the making of any repairs or improvements to the Premises, or to the Building, or any portion of either; or (z) the limitation, curtailment, rationing or restrictions on use of water, electricity, gas or any other utility serving the Premises or the Building by any utility or governmental agency. If Tenant requests additional or after-hours heating or air conditioning, Landlord shall provide such service provided that Tenant pays Landlord's reasonable charge for such services.

1 4.2 Tenant shall not use any apparatus or device in the Premises using ill excess of 1 20 volts, that will in any way increase the amount of electricity usually furnished 01' supplied for the use of the Premises as general office space; nor connect with electric current, except through existing electrical outlets in the Premises, any apparatus or device, for the purpose of using electric current; provided, however, Tenant shall be permitted to use a reasonable number of photocopiers which require 200 volts to the extent necessary in the normal course of Tenant's business. If Tenant shall require water or electric CUl1'ent ill excess of the amount usually furnished or supplied for the use of the Premises as general office space, Tenant shall first procure the prior consent of Landlord to the use of such excess water or electric current, which consent shall llot be unreasonably withheld. Tenant may lISe computers, printers, fax machines, and other office equipment in quantities cllstomarily used in general office use.

15 . DEFAULT.

1 5 . 1 Any failure to pay any Rent as and when due, or any failure to pelform or comply with any, covenant or condition of this Lease, shall constitute a default by Tenant under this Lease; provided, however, Tenant shall have a period of tell (LO) days from the date of written notice from Landlord within which to cure any default in the payment of Rent. Tenant shall have a period of thitiy (30) days from the date of written notice from Landlord within which to cure any other default described in this Section 1 5. 1 ; provided, however, as to any curable default that is not reasonably susceptible to cure within such thirty (30) day period, Tenant shall have an additional sixty (60) days to cure such default provided that Tenant shall

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have commenced the cure of such default within such thirty (30) day period and diligently prosecuted the completion of such cme thereafter. Any notice served hereunder will run concllnently with any required statutory notice.

1 5 .2 Upon the occmrence of a default by Tenant which is not cured by Tenant within the applicable grace period, Landlord shall have the following rights and remedies in addition to all other rights or remedies available to Landlord at law or in equity:

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(a) The rights and remedies provided by California Civil Code section 1 95 1 .2, including, but not limited to, the right to temlinate Tenant's right to possession of the Premises and to recover the worth at the time of award of the amount by which the unpaid Rent for the balance of lhe Term after the time of award exceeds the amount of rental loss for the same period that the Tenant proves could be reasonably avoided, as computed pursuant to subsection (b) of said section 1 95 1 .2.

(b) The rights and remedies provided by California Civil Code section 1 95 1.4, which allow Landlord to continue this Lease in effect and to enforce all of its rights and remedies under this Lease, including the right to recover rent as it becomes due, for so long as Landlord does not terminate Tenant's right to possession; acts of maintenance or preservation, efforts to relet the Premises or the appointment of a receiver upon Landlord's initiative to protect its interest under this Lease shall not constitute a termination of Tenant's right to possession.

(c) The right to enter the Premises and remove therefrom all persons and property, save such property in a public warehouse or elsewhere at the cost of and for the account of Tenant, and sell such property and apply the proceeds therefrom pursuant to applicable California law.

(d) Upon no less than 120 days prior written notice, terminate Tenant's right to possession and use of the Premises and/or terminate this Lease, in which case Tenant shall immediately surrender possession of the Premises to Landlord.

(e) The right to have a receiver appointed for Tenant upon application by Landlord to take possession of the Premises and to apply any rental collected from the Premises and to exercise all other rights and remedies granted to Landlord pursuant to subsection 1 5 .2(b) hereof.

16 . INDEMNITY: TENANT'S INSURANCE.

1 6 . 1 Tenant agrees to indenU1ifY and hold Landlord harmless from and against any and all loss, cost, liability, damage and expense, including without limitation Landlord's reasonable and actual attorney's fees, costs, and expenses, incurred in connection with or arising from: (a) any default by Tenant in the observance or performance of any of the terms, covenants or conditions of this Lease on Tenant's part to be observed or performed; or (b) the use or

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occupancy or manner of use or occupancy of the Premises by Tenant, or any person, or entity claiming through or under Tenant; or (c) any acts, omissions or negligence of Tenant or of the contractors, agents, servants, employees, visitors or licensees of Tenant, in, on or about the Premises or the Building. The foregoing indemnity shall not apply to any loss, cost, liability, damage 01' expense to the extent caused by the gross negligence or misconduct of Landlord, its contractors, agents, or employees. Tenant's obligations tmder this Section 16 . 1 shall survive the termination of the Lease.

1 6.2 (a) For so long as the City of San Jose is the Tenant under this Lease, Tenant may self-insure its obligations under Section 1 6.2(b). If the City of San Jose assigns all or any portion of its interest in this Lease or enters into any Sublease with respect to the Premises, each such assignee and sublessee shall be required to carry the insurance required of Tenant under Section 1 6.2(b).

(b) Tenant shall procure at its cost and expense and keep in effect during the Terl11 comprehensive general liability insmance, including, without limitation, contractual liability for Tenant's indemnity obligation contained in Section 1 6 . 1 and specific coverage of risks arising out of any activities of Tenant pursuant to Sections 6 and 7, with a combined single limit of liability in an amount equal to the amount set forth in the Summary. Such coverage shall be in a comprehensive general liability-fonn with at least the following endorsements to the extent such endorsements are generally available: (i) deleting any employee exclusion on personal injury coverage, (ii) including employees as additional insured, (iii) providing for blanket contractual coverage, broad form propelty damage coverage and products completed operations coverage (where applicable), (iv) deleting any liquor liability exclusions, and (v) providing for coverage of employee's automobile non-ownership liability. Such insurance shall name Landlord and any other party designated by Landlord as an additional insured (provided such additional insured has an interest in the Premises 01' Building), shall specifically include the liability assumed hereunder by Tenant, shall provide tbat it is primary insurance and not excess over or contributory with any other valid, existing and applicable insurance covering the same loss carried by Landlord or any other party, shall provide for severability of interests, shall further provide that an act or omission of one of the named insured which would void or otherwise reduce coverage sball not reduce or void the coverage as to any insured, shall afford coverage for all claims based on acts, omissions, injury or damage which occurred or arose (or the onset of which occurred or arose) in whole or in part during the policy period, and shall provide that Landlord will receive thirty (30) days' written notice from the insurer prior to any cancellation or cbange of coverage. Tenant shall deliver policies of such insurance or certificates thereof to Landlord on or before the Commencement Date, and thereafter at least thirty (30) days before the expiration dates of expiring policies; and in the event Tenant shall fail to procure such insurance, or to deliver such policies or certificates, Landlord may, at its option, procure same for the account of Tenant, and the cost thereof shall be paid to Landlord within five (5) days after delivery to Tenant of bills therefore. Tenant shall be responsible, at its cost and expense, for separately insuring Tenant's propelty.

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16 .3 Landlord shall indemillfy and hold Tenant halmless from and against any and all loss, cost, liability, damage and expense, including, without limitation, reasonable

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attorney's fees and costs, arising out of any injury to any person or property in or about the Premises, the Building, the Building Common Area and the Common Area incurred in connection with or arising from the negligence or misconduct of Landlord or Landlord's contractors, agents, or employees. Landlord shall not be responsible for, and Tenant hereby waives all claims against Landlord for, injury, loss or damage, including, without limitation, those related to theft, burst, stopped or leaking water, gas, sewer or steam pipe or gas, fIre, oil or electricity in, on or about the Premises or the Building, which result from any cause whatsoever other than Landlord's negligence or misconduct or the negligence or misconduct of Landlord's contractors, agents, or employees; subject, however, to Tenant's right to abatement of Rent as set forth in Section 7.3 hereof.

1 6.4 Notwithstanding anything to the contrary contained herein, to the extent of inslll'ance proceeds received with respect to the loss., Landlord and Tenant each hereby waive any right of recovery against the other party and against any other party maintaining a policy of insurance with respect to the Building or any portion thereof or the contents of any of the same, for any loss or damage maintained by such other paliy with respect to the Building, or the Premises or any pOition of any thereof or the contents of the same 01' any operation therein, whether or not such loss is caused by the fault 01' negligence of such other party.

1 7 . ACCESS T O PREMISES; QUIET ENJOYMENT. Landlord, its agents and representatives shall have the right to enter the Premises upon forty-eight (48) hours prior notice and, except in cases of emergency, after giving Tenant reasonable notice for any purpose deemed necessary or desirable by Landlord; provided, however, under no circwnstances shall Landlord be permitted to access any hard copy or electronic fIles kept in secured fIle rooms, cabinets, drawers desks, closets or in any other secured area or space. If any work is to be performed in the Premises after normal business hours (excluding routine janitorial service and emergency repairs), Landlord shall provide Tenant with 48 hours' advance notice of such work. Rent shall not abate as a result thereof. La.ndlord shall use reasonable effOlis to minimize any interference with Tenant's use of the Premises for its normal business purposes. Tenant hereby waives any claim for dama.ges for any injury 01' inconvenience to or interference with Tenant's bnsiness, any loss of occupancy or quiet enjoyment of the Premises 01' any other loss caused by Landlord's entry except to the extent Landlord has not used reasonable efforts to minimize allY intelference with Tenant's use of the Premises for its normal business purposes in connection with such entry or to the extent that rent may be abated pursuant to Section 1 1 herein. No entry by Landlord which is permitted pursuant to the terms of this Lease shall be construed 01' deemed to be a forcible 01' unlawful entry into, or a detainer of, the Premises, or an eviction, actual or constructive, of Tenant from the Premises or any portion thereof.

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1 8. NOTICES. Notices or other commWlications under this Lease shall be effective only if given i n writing, sent by certifIed mail with a return receipt requested or delivered personally: (a) to Tenant (i) at Tenant's address set forth in the Summary, if sent prior to Tenant's taking possession of the Premises, or (ii) at the Premises, if sent subsequent to Tenant's taking possession of the Premises; or (b) to Landlord at Landlord's address set forth in the Summa.ry; or (c) to either Landlord 01' Tenant at such other address as either Landlord 01' Tenant may designate

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as its new address for such purpose by notice given to the other in accordance with the provisions of this Section.

1 9. ESTOPPEL CERTIFICATES. Tenant, at any time and from time to time upon not less than ten ( 10) days' prior written notice from Landlord, will execute, acknowledge and deliver to Landlord a commercially reasonable form of estoppel certificate. Any such certificate may be relied upon by Landlord and by any prospective purchaser or mOligagee considering the purchase of or a loan on all or any part of the Building or any interest therein. Tenant's Director of Economic Development or its designee shall be the representative of Tenant authorized to execute and deliver any such estoppel celtificate pursuant to this Section 19.

20. TAX ON TENANT'S PERSONAL PROPERTY. The provisions of this Section 20 shall not apply if Tenant is a tax-exempt entity. At least ten ( 10) days prior to delinquency, Tenant shall pay all taxes levied or assessed upon Tenant's Propeliy and shall deliver satisfactory evidence of such payment to Landlord. If, as determined by Landlord, the assessed value of Landlord's property is increased by the inclusion therein of a value placed upon Tenant's Propelty, Tenant shall promptly pay such increased amount to Landlord.

2 1 . SECURITY DEPOSIT. Upon execution of this Lease, Tenant shall transfer the Security Deposit as set forth in the Lease Summary to Landlord to serve as the security deposit for this Lease. Landlord shall retain this sum as a security deposit for the faithful performance of all terms, covenants, and conditions of this Lease. Upon the occurrence of any default by Tenant under Illis Lease (and following the applicable grace period, if any, specified in Section 1 5 . 1 above), Landlord may apply all or part of such amount to remedy such default. Should Landlord use any portion ofthe security deposit, Tenant shall forthwith replenish the security deposit to the original amount of the Security Deposit. No trust relationship shall be created with respect to the security deposit and Landlord assumes no responsibility and makes no representation or wan-an ties regarding the amount of interest which may (or may not) accrue on the security deposit during the Term. If Tenant shall fully and faithfully perform every provision of this Lease, the remaining balance of the security deposit, if any, shall be returned to Tenant (or, at landlord's option, to the last assignee of Tenant's interest hereunder) within thilty (30) days after the Expiration Date. In the event of termination of Landlord's interest in this lease, Landlord may transfer the security deposit to Landlord's successor in interest and, upon such transfer; Landlord shall be relieved of any and all liability for or obligation with respect to the security deposit.

22. FORCE MAJEURE. If either Landlord or Tenant is unable to fulfill or is delayed in fulfilling any of their respective obligations under this Lease, by reason of acts of God, accidents, repairs, labor disputes, inability to obtain utilities or materials or by any other reason beyond its reasonable control (collectively, "Fol·ce Majeure Delay"), then such party shall be excused from performing such obligation for so long as such Force Majeure Delay exists. In no event will a Force Majeure Delay apply to the inability of Tenant to perform any monetary obligation, lII1der this Lease. Landlord and Tenant shall not be relieved of their respective obligations by virtue of the inability of the other party to perform an obligation as a result of a Force Majeure Delay. Tenant shall not have a claim for any inconvenience,

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annoyance, interruption, injury or loss to or interference with the use and occupancy or quiet enjoyment of the Premises, or any loss or damage occasioned thereby, by virtue of the inability of the Landlord to perform an obligation as a result of a Force Majeure Delay. Tenant hereby waives and releases any right to terminate trus Lease under Section 1932(1) of the California Civil Code or under any similar law, Statute or ordinance now or hereafter in effect. Nothing in this Section, however, abrogates the right of Tenant to an abatement of rent pursuant to Section U.

23 . MISCELLANEOUS.

23 . 1 The words "Landlord" and "Tenant" as used herein shall include the plural as well as the singular. If there is more than one Tenant, the obligations under this Lease imposed on Tenant shall be joint and several. The captions preceding the articles of this Lease have been inserted solely as a matter of convenience and such captions in no way define or limit the scope or intent of any provision of this Lease.

23.2 The terms, covenants and conditions contained in this Lease shall bind and inure to the benefit of Landlord and Tenant and, except as othelwise provided herein, their respective personal representatives and sllccessors and assigns; provided, however, that upon the sale, assignment or transfer by Landlord named herein (or by any subsequent landlord) of its interest in the Building as owner or lessee, including any transfer by operation of law, Landlord (or such subsequent landlord) shall be relieved from all subsequent obligations and liabilities arising under this Lease subsequent to such sale, assignment or transfer.

23.3 Any provision of this Lease which shall prove to be inv'alid, void, illegal or unenforceable shall in no way affect, impair or invalidate any other provisions of this Lease, and such other provisions and this Lease shall remain in ful l force and effect.

23.4 This Lease shall be construed and enforced in accordance with the laws of the State of California.

23 .5 Tlus insh'ument, including the exhibits attached hereto, which are made a part of this Lease, contains the entire agreement between the parties and all prior negotiations and agreements are merged herein. Tenant hereby acknowledges that neither Landlord nor Landlord's agents have made any representations or warranties with respect to the Premises, the Building or this Lease except as expressly set forth herein.

23.6 If Tenant shall retain possession of the Premises 0 1' any part thereof without Landlord's consent following the expiration or sooner termination of this Lease for any reason, then Tenant shall pay to Landlord one hlUldred percent ( 100%) of the Rent in effect immediately prior to the date of such expiration or tennination for the first thirty (30) days of such holding over and Tenant shall pay to Landlord one hundred and twenty-five percent (125%) of the Rent in effect immediately prior to the date of such expiration or termination for any holding over by Tenant after such thirty (30) day period.

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23.7 Intentionally Omitted.

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23.8 Time is of the essence of this Lease and each and all of its provisions in which performance is a factor.

23.9 Tenant shall faithfully observe and comply with the rules and regulations attached to this Lease as Exhibit C (the "Rules and Regulations"), if any. Landlord shall use reasonable efforts to enforce the Rules and Regulations against other tenants or occupants, but shall not be responsible for the nonperformance of the Rules and Regulations by any other tenants or occupants. In the event of any conflict between the terms and conditions of tlus Lease and the terms and conditions of the Rules and Regulations, this Lease shall control.

23 . 10 The waiver by Landlord or Tenant ofthe other party's failure to perform or observe any provision of this Lease shall not be deemed to be a continuing waiver of such provision or a waiver of any subsequent failure to perfonn or observe the same or any other such provision, and no custom or practice which may develop between the parties during the Term shall be deemed a waiver of, or in any way affect, the right of Landlord or Tenant to insist upon performance and observance by the other paliy in strict accordance with the terms of this Lease. The subsequent acceptance of rent hereunder by Landlord shall not be deemed to be a waiver of any preceding faillU'e of Tenant to perform or observe any provision of this Lease, other than the failure of Tenant to pay the particular rent so accepted, irrespective of any knowledge on the pali of Landlord of such preceding failure at the time of acceptance of such rent.

23. 1 1 Upon Tenant's paying the Rent and observing and performing all of the provisions of this Lease, Tenant shall be entitled to the quiet enjoyment of the Premises for the entire Tenn, subject to the provisions of this Lease.

23 . 1 2 Tenant covenants and agrees that no diminution of' light, air or view by any structure that may hereafter be erected (whether or not by Landlord) shall entitle Tenant to any reduction of the Rent under this Lease, result in any liability of Landlord to Tenant, or in any other way affect this Lease or Tenant's obligations hereunder.

23 . 13 This Lease may be executed in counterparts, each of which shall be deemed an original, and all of which, when taken together, shall constitute one and the same instrument.

24. TERMINATION RIGHT. Tenant may tenninate the Lease (A) if the Tenant Improvements are not substantially completed and the Premises delivered to Tenant on or before December 15, 2015, or (B) by giving Landlord no less than one hundred eighty ( 1 80) days prior written notice of sllch ternLination, which shall be effective on the date set forth in such notice, but in no event shall Landlord receive less tl1an one hundred eighty ( 1 80) actual days' notice. Notl1ing in the foregoing tennination right shall operate as a waiver of Landlord's rights against tenant at law or in equity, and further, if Tenant terminates this Lease under subsection (B), above, Tenant shall be pay to Landlord a sum equal to the cost of the Tenant Improvements and any broker's commissiol1(s) related to this Lease (the "Telmination Recoupment"), which Termination Recoupment shall be amortized according to a straight-line monthly amOltization schedule.

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25. BROKERS.

25.1 Landlord hereby agrees to indemnify, defend and hold Tenant harmless from claims for any commission or finders' fee charges by any real estate broker or other person or entity arising from an agreement, whether express or implied, between Landlord and such broker or other person 01' entity or otherwise arising from the conduct of Landlord.

25.2 Tenant hereby agrees to indemnify, defend and hold Landlord harmless from claims for any commission or finders' fee charges by any real estate broker or other person or entity, arising from an agreement, whether express or implied, between Tenant and any broker or other person or entity.

[SIGNATURES APPEAR ON THE NEXT PAGE]

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

IN WITNESS HEREOF Landlord and Tenant have executed this Lease the day and year first written above.

LANDLORD:

RPR0 1 52N3 LLC, a California Limited Liability Company

BY: RPR0 1 52N3 LLC. a California Limited Liability Corporation Authorized Property Manager as agent for Landlord J1�med above

./ . Xl f,J «.L/� Bren(Lee, Presiderif

TENANT:

CITY OF SAN JOSE, a municipal corporation of the State of California

BY: NAM

=E�:----------------------

ITS: ______________ _ _

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APPROVED AS TO FORM:

BY: --"oj,--=-�----,--,-JM----\""'-��,----TOM MURTfIA Senior Deputy City Attorney

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

EXHIBIT A

Floor Plan of Premises

key standard duplex

IT

Alli

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P riv

2

te 0 f ice

3 4

conference room

kitc

* not to scale

A

5D

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

EXHIBIT B

WOI'\{ Letter

Prior to Tenant's occupancy of the Premises, Landlord shall, at Landlord's sole cost and expense, perform the fol lowing items of work as more particularly shown on Exhibit A of this Lease:

1 . Install one ( I ) wall framed conference room with a built in door containing two (2) glass insert windows;

2 . Install a turnkey lobby area with one (1) double panel entry door; and

3 . Replace any damaged floor covering in the Premises with materials similar in look and feel to the existing floor covering and perform any touch-up painting necessary as a result of Landlord's work.

Prior to commencement of the work described above, Landlord shall work with Tenant and its representatives to agree upon the location of data outlets to be installed by Tenant.

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EXHIBIT C

Rules and Regulatious

The following Rules and Regulations ("Building Rules") are additional provisions of the foregoing Lease to which they are attached. The capitalized terms used herein shall have the same meaning as those terms are given in the Lease.

1 . Use of Common Areas. Tenant will not obstruct the halls, passages, exits, entrances, elevators or stairways of the Building ("Interior Common Areas") or the Common Areas, and Tenant will not use the I nterior Common Areas or the Common Areas for any purpose other than ingress and egress to and from the Premises. The I nterior Common Areas and the Common Areas are not open to the general public and Landlord reserves the right to control and prevent access to the Interior Common Areas and the Common Areas of any person whose presence, in Landlord's opinion, would be prejudicial to the safety, reputation and interests of the Building and its tenants.

2 . N o Access to Roof. Tenant has n o right of access to the roof of the Building and will not install, repair or replace any antenna, aerial, aerial wires, fan, air-conditioner or other device on the roof of the Building, without the prior written consent of Landlord. Any such device installed without such written consent is subject to removal at Tenant's expense without notice at any time. In any event Tenant will be liable for any damages or repairs incurred or required as a result of its installation, use, repair, maintenance or removal of such devices on the roof and agrees to indemnify and hold harmless Landlord from any liabi lity, loss, damage, cost or expense, including reasonable attorneys' fees, arising from any activities of Tenant or of Tenant's Representatives on the roof of the Building.

3 . Signage. No sign, placard, picture, name, advertisement or notice visible from the exterior of the Premises will be inscribed, painted, affixed or otherwise displayed by Tenant on or in any part of the Building without the prior written consent of Landlord which consent may be withheld in Landlord's sale discretion. Landlord may, at its election and at any time, adopt and furnish Tenant with general guidelines relating to signs in or on the Building. All signage approved by Landlord shall be inscribed, painted or affixed in a professional manner and at Tenant's sale cost and expense by a contractor approved in advance and in writing by the Landlord.

4. Prohibited Uses. The Premises will not be used for manufacturing, for the storage of merchandise held for sale to the general public, for lodging or for the sale of goods to the general public. Tenant wil l not permit any food preparation on the Premises except that Tenant may use Underwriters' Laboratory approved equipment for brewing coffee, tea, hot chocolate, and similar beverages so long as such use is in accordance with all applicable federal, state and city laws, codes, ordinances, rules and regulations and provided that such activity does not generate odors outside of the Premises. Notwithstanding the above, the parties acknowledge that the Premises inCludes a kitchen and Tenant shall be able to prepare food and use equipment to the extent as is customary in an office environment.

5. Janitorial Services, Tenant will not employ any person for the purpose of cleaning the

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Premises or permit any person to enter the Building for such purpose other than Landlord's janitorial service, except with Landlord's prior written consent. Tenant will not necessitate, and will be liable for the cost of, any undue amount of janitorial labor by reason of Tenant's carelessness in or indifference

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to the preservation of good order and cleanliness in the Premises. Janitorial service will not be furnished to areas in the Premises on nights when such areas are occupied after 9:30p.m., unless such service is extended by written agreement to a later hour in specifically designated areas of the Premises.

6. Keys and Locks. Landlord will furnish Tenant, free of charge, two keys to each door or lock in the Premises. Landlord may make a reasonable charge for any additional or replacement keys. Tenant will not dupl icate any keys, alter any locks or install any new or additional lock or bolt on any door of its Premises or on any other part of the Building without the prior written consent of Landlord and, in any event, Tenant will provide Landlord with a key for any such lock. On the termination of the Lease, Tenant will deliver to Landlord all keys to any locks or doors in the Building which have been obtained by Tenant.

7. Freight. Upon not less than twenty-four hours prior notice to Landlord, which notice may be oral, an elevator will be made available for Tenant's use for transportation of freight, subject to such scheduling as Landlord in its discretion deems appropriate. Tenant shall not transport freight in loads exceeding the weight limitations of such elevator. Landlord reserves the right to prescribe the weight, size and position of all equipment, materials, furniture or other property brought into the Building, and no property will be received in the Building or carried up or down the freight elevator or stairs except during such hours and along such routes and by such persons as may be designated by Landlord. Landlord reserves the right to require that heavy objects will stand on wood strips of such length and thickness as is necessary to properly distribute the weight. Landlord will not be responsible for loss of or damage to any such property from any cause, and Tenant will be liable for all damage or injuries caused by moving or maintaining such property.

8. Nuisances and Dangerous Substances. Tenant will not conduct itself or permit Tenant's Representatives or Visitors to conduct themselves, in the Premises or anywhere on or in the Property in a manner which is offensive or unduly annoying to any other Tenant or Landlord's property managers. Tenant will not install or operate any phonograph, radio receiver, musical instrument, or television or other similar device in any part of the Common Areas and shall not operate any such device installed in the Premises in such manner as to disturb or annoy other tenants of the Building. Tenant will not use or keep in the Premises or the Properly any kerosene, gasoline or other combustible fluid or material other tilan limited quantities thereof reasonably necessary for the maintenance of office equipment, or, without Landlord's prior written approval, use any method of heating or air conditioning other than that supplied by Landlord. Tenant will not use or keep any foul or noxious gas o r substance in the Premises or permit or suffer the Premises to be occupied or used in a manner offensive or objectionable to Landlord or other occupants of the Building by reason of noise, odors or vibrations, or interfere in any way with other tenants or those having business therein. Tenant will not bring or keep any animals in or about the Premises or the Property.

9. Building Name and Address. Without Landlord's prior written consent, Tenant will not

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use the name of the Building in connection with or in promoting or advertising Tenant's business except as Tenant's address.

1 0. Building Directory. A directory for the Building will be provided for the display of the name and location of tenants. Landlord reserves the right to approve any additional names Tenant desires to place in the directory and, if so approved, Landlord may assess a reasonable charge for adding such additional names

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1 1 . Window Coverings. No curtains, draperies, blinds, shutters, shades, awnings, screens or other coverings, window ventilators, hangings, decorations or similar equipment shall be attached to, hung or placed in, or used in or with any window of the Building without the prior written consent of Landlord, and Landlord shall have the right to control all lighting within the Premises that may be visible from the exterior of the Building.

1 2 . Floor Coverings. Tenant will not lay or otherwise affix linoleum, tile, carpet or any other floor covering to the floor of the Premises in any manner except as approved in writing by Landlord. Tenant will be liable for the cost of repair of any damage resulting from the violation of this rule or the removal of any floor covering by Tenant or its contractors, employees or invitees.

1 3 . Wiring and Cabling Installations. Landlord will direct Tenant's electricians and other vendors as to where and how data, telephone, and electrical wires and cables are to be installed. No boring or cutting for wires or cables will be allowed without the prior written consent of Landlord. The location of burglar alarms, smoke detectors, telephones, call boxes and other office equipment affixed to the Premises shall be subject to the written approval of Landlord.

1 4 . Office Closing Procedures. Tenant will see that the doors of the Premises are closed and locked and that all water faucets, water apparatus and utilities are shut off before Tenant or its employees leave the Premises, so as to prevent waste or damage. Tenant will be liable for al l damage or injuries sustained by other tenants or occupants of the Building or Landlord resulting from Tenant's carelessness in this regard or violation of this rule. Tenant will keep the doors to the Building corridors closed at all times except for ingress and egress.

1 5 . Plumbing Facilities. The toilet rooms, toilets, urinals, wash bowls and other apparatus shall not be used for any purpose other than that for which they were constructed and no foreign substance of any kind whatsoever shall be disposed of therein. Tenant will be liable for any breakage, stoppage or damage resulting from the violation of this rule by Tenant, its employees or invitees.

1 6. Use of Hand Trucks. Tenant will not use or permit to be used in the Premises or in the Common Areas any hand trucks, carts or dollies except those equipped with rubber tires and side guards or such other equipment as Landlord may approve.

1 7. Refuse. Tenant shall store all Tenant's trash and garbage within the Premises or in

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other facilities designated by Landlord for such purpose. Tenant shall not place in any trash box or receptacle any material which cannot be disposed of in the ordinary and customary manner of removing and disposing of trash and garbage in the city in which the Building is located without being in violation of any law or ordinance governing such disposal. All trash and garbage removal shall be made in accordance with d irections issued from time to time by Landlord, only through such Common Areas provided for such purposes and at such times as Landlord may designate. Tenant shall comply with the requirements of any recycling program adopted by Land lord for the Building.

1 8. Soliciting. Canvassing, peddling, soliciting and distribution of handbills or any other materials in the Building are prohibited, and Tenant will cooperate to prevent the same.

1 9. Parking. Tenant will use, and cause Tenant's Representatives and Visitors to use, any parking spaces to which Tenant is entitled under the Lease in a manner consistent with Landlord's directional signs and markings in the Parking Facility. Specifically, but without l imitation, Tenant will not park, or permit Tenant's Representatives or Visitors to park, in a manner that impedes access to

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and from the Building or the Parking Facility or that violates space reservations for handicapped drivers registered as such with the California Department of Motor Vehicles, Landlord may use such reasonable means as may be necessary to enforce the directional signs and markings in the Parking Facility, including but not limited to towing services, and Landlord will not be liable for any damage to vehicles towed as a result of non-compliance with such parking regulations,

20, Fire, Security and Safety Regulations, Tenant will comply with all safety, security, fire protection and evacuation measures and procedures established by Landlord or any governmental agency,

2 1 , Responsibility for Theft. Tenant assumes any and all responsibility for protecting the Premises from theft, robbery and pilferage, which includes keeping doors locked and other means of entry to the Premises closed,

22, Sales and Auctions, Tenant wil l not conduct or permit to be conducted any sale by auction in, upon or from the Premises or elsewhere in the Property, whether said auction be voluntary, involuntary, pursuant to any assignment for the payment of creditors or pursuant to any bankruptcy or other insolvency proceeding,

23, Waiver of Rules, Landlord may waive any one or more of these Building Rules for the benefit of any particular tenant or tenants, but no such waiver by Landlord will be construed as a waiver of such Building Rules in favor of any other tenant or tenants nor prevent Landlord from thereafter enforcing these Building Rules against any or all of the tenants of the Building,

24, Effect on Lease, These Building Rules are in addition to, and shall not be construed to in any way modify or amend, in whole or in part, the terms, covenants, agreements and conditions of the Lease, Violation of these Building Rules constitutes a failure to fully perfonn the provisions of the Lease, as referred to in Section 15 ,1- "Events of Default",

25, Non-Discriminatory Enforcement. Subject to the provisions of the Lease (and the provisions of other leases with respect to other tenants), Landlord shall use reasonable efforts to enforce these Building Rules in a non-discriminatory manner, but in no event shall Landlord have any liability for any failure or refusal to do so (and Tenant's sole and exclusive remedy for any such failure or refusal shall be injunctive relief preventing Land lord from enforcing any of the Building Rules against Tenant in a manner that discriminates against Tenant),

26, Additional And Amended Rules, Landlord reserves the right to rescind or amend these

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Building Rules and/or adopt any other reasonable rules and regulations as in its judgment may from time to time be needed for the safety, care and cleanliness of the Building and for the preservation of good order therein,

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Documents

OFFICE LEASE between RPR0152N3 LLC, as Landlord and CITY