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Home My WebLink AboutStaff Report 2407-3272CITY OF PALO ALTO CITY COUNCIL Special Meeting Monday, October 07, 2024 Council Chambers & Hybrid 5:30 PM Agenda Item 9.Authorize the City Manager or their Designee to Exercise the Option to Renew the Lease Between the City of Palo Alto and Steve Nash and Dennis Ryan for 4 Months at 975 Terra Bella Ave in Mountain View at a Monthly Rent of $35,587.95 for a Total Not-to-Exceed of $213,527.70 through February 28, 2025; Direct Staff to Explore Purchase of Property to Meet the Future Needs of Grid Modernization and Other Capital Projects; and Approval of an Amendment to Fiscal Year 2025 Budget Appropriation in the Electric Fund; CEQA Status – Categorically Exempt; Sec. 15301. Consent Questions City Council Staff Report From: City Manager Report Type: CONSENT CALENDAR Lead Department: Utilities Meeting Date: October 7, 2024 Report #:2407-3272 TITLE Authorize the City Manager or their Designee to Exercise the Option to Renew the Lease Between the City of Palo Alto and Steve Nash and Dennis Ryan for 4 Months at 975 Terra Bella Ave in Mountain View at a Monthly Rent of $35,587.95 for a Total Not-to-Exceed of $213,527.70 through February 28, 2025; Direct Staff to Explore Purchase of Property to Meet the Future Needs of Grid Modernization and Other Capital Projects; and Approval of an Amendment to Fiscal Year 2025 Budget Appropriation in the Electric Fund; CEQA Status – Categorically Exempt; Sec. 15301. RECOMMENDATION Staff recommends that City Council: 1. Authorize the City Manager or their designee to exercise the option to renew the lease (Attachment A) between the City of Palo Alto and Steve Nash and Dennis Ryan for utility equipment staging and storage for 4 months for the Advanced Metering Infrastructure (AMI) project under the Smart Grid Technology CIP (EL-11014) located at 975 Terra Bella Ave in Mountain View. The 4 month extension is authorized by Section 51 of the lease and will commence on November 1, 2024 through February 28, 2025. The monthly rent will be $35,587.95 for a total not-to-exceed of $213,527.70 for six months from September 1, 2024 through February 28, 2025. 2. Direct staff to explore the purchase of the commercial property at 975 Terra Bella Ave as a laydown yard, storage and staging area for the grid modernization and future utility capital projects. 3. Amend the Fiscal Year 2025 Budget Appropriation for the Electric Fund (requires a simple majority approval) by: a. Increasing the Electric Operations Rents and Leases expenses by $213,527.70; and b. Decreasing Smart Grid Technology CIP (EL-11014) budget by $213,527.70. BACKGROUND The City’s Utilities Department has used City owned property, including the current use of the property at 2000 Geng Road as a storage or “laydown” yard for various City Utilities‘ capital improvement projects. On September 14, 2020, the Council approved an interim safe parking ordinance and a three-year lease with the County of Santa Clara (“County”) at 2000 Geng Road for safe parking. The County, leasing property from the City, contracted with Move Mountain View to operate a safe parking program with 12 spaces for recreational vehicles (RVs) or two cars per space. In addition to this City/County partnership, several congregation-based sites host safe parking for passenger vehicles only. On December 4, 2023, the Council adopted ordinance 18.42.160 to permanently establish congregation-based safe parking and to establish regulations related to safe parking, including a maximum number of vehicles per night on each site. Additionally, Council directed staff to explore the expansion of safe parking, including at the Geng Road site which has higher capacity than the congregation-based sites. On August 19, 2024, the Council approved Amendment No. 2 to the Lease Agreement by and between the City of Palo Alto (City), as landlord, and the County of Santa Clara, as tenant, at 2000 Geng Road for Safe Parking to expand the premises of the lease and increase by 10 the number of permitted parking spaces. The Geng Road site is the only one in the City which permits recreational vehicles (RVs) and is often at capacity with a waiting list. ANALYSIS The relocation of the AMI warehousing and staging site is in response to the City Council request to expand the safe parking site at Geng Road and address vehicle displacement for the El Camino Real (SR 82) project. On September 1, 2024, the City entered into a two-month lease with Steve Nash and Dennis Ryan for 0.86 acres of land at 975 Terra Bella. The purpose of the lease was to provide space for the relocation staging site for the Utilities Advanced Metering Infrastructure (AMI) project. The AMI project consists of replacing 30,000 electric and 8,300 water meters and retrofitting 24,200 gas meters and 12,500 remaining water meters. The AMI deployment began in September 2023 and is expected to be complete by April 2025. As of June 2024, 21 RVs/or campers and 16 vehicles were counted along SR 82 in Palo Alto. The Caltrans SR 82 Repaving Project removed parking along SR 82 in Palo Alto beginning September 2024, thus making increased safe parking capacity time sensitive to align with the expected displacement. The Utilities Department provided advanced notice and coordinated with the AMI installation contractor Utility Partners of America (UPA) for the site relocation. The property at 975 Terra Bella Ave (Attachment B) is zoned as general industrial and is located on the southeast corner of Terra Bella Avenue near San Rafael Avenue. Access to the property is good, with a highway interchange less than one-half mile north of the building at Shoreline Boulevard and US Highway 101. The parcel is approximately 37,461 SF or 0.86 acres. The property has two offices which require improvement to meet ADA requirements. The property has ample space to serve as a laydown yard for utility poles, pipes, wires, and other equipment. The Utilities Department is regularly in need of a laydown and staging area for capital improvement projects. The laydown area is an integral part of any CIP project because it allows the contractor to store and stage the materials, equipment and vehicles required for construction. Given the limited availability and high leasing cost of commercial space to serve as a laydown yard in or near Palo Alto, the cost of the laydown yard is generally a pass-through charge from the contractor to Utilities. The property at 2000 Geng Road has served as the laydown yard for various gas main replacement, sewer main replacement, water main replacement projects including the AMI project. Without a dedicated laydown yard, the cost of future CIP projects will increase and the construction timeline may be extended depending on the proximity of the laydown yard for each project. The four-month lease extension will allow the City to complete the AMI project and determine whether the property at 975 Terra Bella will be a viable permanent laydown and staging area for grid modernization, fiber-to-the-premises, and future water gas wastewater main replacement projects. During the lease term, the City will perform a property appraisal and obtain construction estimates of remodeling the offices to become ADA compliant. As directed by Council, Utilities would explore acquiring the land. If the purchase is feasible staff would return to Council with recommendations for purchase of the property and then again for facility construction. FISCAL/RESOURCE IMPACT Funding of the lease is available in the FY 2025 Smart Grid Technology CIP (EL-11014). Staff recommends an appropriation of $213,528 in the FY 2025 Electric Fund operating budget and offset by a reduction in the Electric Fund Smart Grid Technology CIP. The potential purchase of property would be determined through negotiation with the seller. If staff returns to Council recommending purchase of the property, staff would also be returning with a funding plan at that time. STAKEHOLDER ENGAGEMENT Staff will conduct stakeholder involvement along with the acquisition being recommended. ENVIRONMENTAL REVIEW Council action on this item is categorically exempt from California Environment Quality Act (CEQA) review the under CEQA Guidelines Section 15301 as a lease of an existing facility involving no expansion of the existing or former use. ATTACHMENTS Attachment A: 975 Terra Bella Lease Agreement Attachment B: 975 Terra Bella Site APPROVED BY: Dean Batchelor, Director of Utilities ________ ________ ________ ________ INITIALS INITIALS © 2019 AIR CRE. All Rights Reserved. Last Edited: 8/26/2024 2:35 PM LG15.23, Revised 10222020 Page 1 of 15 STANDARD INDUSTRIAL/COMMERCIAL LAND LEASE GROSS (DO NOT USE THIS FORM FOR BUILDINGS OR FOR LEASES PROVIDING FOR THE CONSTRUCTION OF BUILDINGS) 1.BasicProvisions ("Basic Provisions"). 1.1 Par es.This Lease ("Lease"), dated for reference purposes only July 31, 2024 , is made by and between Steve Nash and Dennis Ryan ("Lessor") and City of Palo Alto ("Lessee"), (collec vely the "Par es", or individually a "Party"). 1.2 Premises:That certain real property, including all improvements thereon or to be provided by Lessor under the terms of this Lease, commonly known as (street address, city, state, zip):975 Terra Bella Avenue, Mountain View, CA 94043 ("Premises"). The Premises are located in the County of Santa Clara , and are generally described as (describe brieﬂy the nature of the property and the improvements on the property, if any, and , if applicable, the "Project", if the property is located within a Project):Approximately 37,461 rentable square feet of industrial yard, with two separate office areas, separate part shed and maintenance building . (See also Paragraph 2) 1.3 Term:0 years and 2 months ("Original Term") commencing September 1, 2024 ("Commencement Date") and ending October 31, 2024 ("Expira on Date"). (See also Paragraph 3) 1.4 Early Possession:If the Premises are available Lessee may have nonexclusive possession of the Premises commencing Tenant may take early possession of the Premises starting August 20, 2024. Said Early Possession shall be under all the terms and conditions of the Lease ("Early Possession Date"). (See also Paragraphs 3.2 and 3.3) 1.5 Base Rent:$32,965.68 per month ("Base Rent"), payable on the first day of each month commencing . (See also Paragraph 4) If this box is checked, there are provisions in this Lease for the Base Rent to be adjusted. See Paragraph . 1.6 Base Rent and Other Monies Paid Upon Execu on: (a)Base Rent:$32,965.68 for the period . (b)Security Deposit:N/A ("Security Deposit"). (See also Paragraph 5) (c)Other:$2,622.27 for NNN . (d)Total Due Upon Execu on of this Lease:$35,587.95 . 1.7 Agreed Use:The premises shall be used for the storage of utility materials, equipment, office support and related legal use . (See also Paragraph 6) 1.8 Insuring Party.Lessor is the "Insuring Party". The annual "Base Premium" is .(See also Paragraph 8) 1.9 Real Estate Brokers.(See alsoParagraph 15 and 25) (a)Representa on: Each Party acknowledges receiving a Disclosure Regarding Real Estate Agency Rela onship, conﬁrms and consents to the following agency rela onships inthis Lease with the followingreal estate brokers ("Broker(s)") and/or their agents("Agent(s)"): Lessor's Brokerage Firm Avison Young License No.01914446 Is the broker of (check one): the Lessor; or both the Lessee and Lessor (dual agent). Lessor's Agent Brian Mason License No.01229363 is (check one): the Lessor's Agent (salesperson or broker associate); or both the Lessee's Agentand the Lessor'sAgent (dual agent). Lessee's Brokerage Firm License No. Is the broker of (check one): the Lessee; or both the Lessee and Lessor (dual agent). Lessee's Agent License No. is (check one): the Lessee's Agent (salesperson or broker associate); or both the Lessee's Agentand the Lessor's Agent(dual agent). (b)Payment to Brokers.Upon execu on and delivery of this Lease by both Par es, Lessor shall pay to the Brokers the brokerage fee agreed to in a separate wri en agreement (or if there is no such agreement, the sum of or % of the total Base Rent) for the brokerage services rendered by the Brokers. 1.10 Guarantor.The obliga ons of the Lessee under this Lease are to be guaranteed by ("Guarantor"). (See also Paragraph 37) 1.11 A achments.A ached hereto are the following,all of whichcons tute a partof this Lease: an Addendum consis ng of Paragraphs 51 through 59 ; a plot plan depic ng the Premises; a current set of the Rules and Regula ons; a Work Le er; other (specify): . 2. Premises. 2.1 Le ng. Lessor hereby leases to Lessee,and Lessee hereby leases from Lessor,the Premises,for the term,atthe rental,and upon all of the terms, covenants and condi ons set forth in this Lease. While the approximate square footage of the Premises may have been used in the marke ng of the Premises for purposes of comparison,the Base Rent stated herein is NOT ed to square footage and is not subject to adjustmentshould the actual size be determined to be Docusign Envelope ID: A0CB2D85-2C3B-49BD-91B4-A968AD802F7F ________ ________ ________ ________ INITIALS INITIALS © 2019 AIR CRE. All Rights Reserved. Last Edited: 8/26/2024 2:35 PM LG15.23, Revised 10222020 Page 2 of 15 diﬀerent.NOTE:Lessee is advised to verify the actual size prior to execu ngthis Lease. 2.2 Condi on. Lessor shall deliver the Premises to Lessee free of debris on the Commencement Date or the Early Possession Date, whichever ﬁrst occurs ("Start Date"),and warrants that the exis ng electrical,plumbing,ligh ng,if any,and all othersuch elements in the Premises,other than those constructed by Lessee, shall be in good opera ng condi on on said date. If a noncompliance with said warranty exists as of the Start Date, or if one of such systems or elements should malfunc on or fail within the warranty period,Lessorshall,as Lessor's sole obliga on with respect to such ma er,except asotherwise providedinthis Lease, promptly a er receipt of wri en no ce from Lessee se ng forth with speciﬁcity the nature and extent of such noncompliance, malfunc on or failure, rec fy same at Lessor's expense. The warranty period shall be 30 days. If Lessee does not give Lessorthe required no ce within the appropriate warranty period,correc on of any such noncompliance, malfunc on or failure shall be the obliga on of Lessee at Lessee's sole cost and expense. Lessor also warrants, that unless otherwise speciﬁed in wri ng,Lessoris unaware of (i) any recorded No ces of Default aﬀec ngthe Premise; (ii) any delinquent amounts due under any loan secured by the Premises; and (iii) any bankruptcy proceeding aﬀec ng the Premises. 2.3 Compliance. Lessor warrants that to the best of its knowledge the improvements on the Premises comply with the building codes,applicable laws, covenants or restric ons of record, regula ons, and ordinances ("Applicable Requirements") that were in eﬀect at the me that each improvement, or por on thereof,was constructed. Said warranty does not apply tothe use towhich Lessee will putthe Premises,modiﬁca ons which may be required by the Americans with Disabili es Act or any similar laws as a result of Lessee's use (see Paragraph 50), or to any Altera ons or U lity Installa ons (as deﬁned in Paragraph 7.3(a)) made or to be made by Lessee.NOTE:Lessee is responsible for determining whetherornot the Applicable Requirements, andespecially the zoning, are appropriate for Lessee's intended use, and acknowledges that past uses of the Premises may no longer be allowed.If the Premises do not comply with said warranty, Lessor shall, exceptas otherwise provided,promptly a er receipt of wri en no ce from Lessee se ng forth withspeciﬁcity the nature and extent of suchnoncompliance,rec fy the same at Lessor's expense. If Lessee does not give Lessor wri en no ce of a noncompliance with this warranty within 6 months following the Start Date, correc onof that noncompliance shall be the obliga onof Lessee at Lessee'ssole cost and expense. 2.4 Acknowledgements. Lessee acknowledges that: (a) it has been given an opportunity to inspect and measure the Premises, (b) it has been advised by Lessor and/or Brokers to sa sfy itself with respect to the size and condi on of the Premises (includingbut not limitedto the improvements,if any,security, environmental aspects, and compliance with Applicable Requirements and the Americans with Disabili es Act), and their suitability for Lessee's intended use, (c) Lessee has made such inves ga on asit deemsnecessary withreference to suchma ers andassumes all responsibility therefor as the same relate to itsoccupancy of the Premises, (d) it is not relying on any representa on as to the size of the Premises made by Brokers or Lessor, (e) the square footage of the Premises was not material to Lessee'sdecision tolease the Premises and pay the Rent statedherein,and(f) neither Lessor,Lessor's agents,nor Brokershave made any oral orwri en representa ons or warran eswith respectto said ma ersother than as setforthin this Lease. In addi on,Lessor acknowledges that: (i) Brokers have made no representa ons, promises or warran es concerning Lessee's ability to honor the Lease or suitability to occupy the Premises, and (ii) it is Lessor's sole responsibility to inves gate the ﬁnancial capability and/or suitability of all proposed tenants. 2.5 Lessee as Prior Owner/Occupant. The warran es made by Lessor in Paragraph 2 shall be of no force or eﬀect if immediately prior to the Start Date Lessee was the owner or occupant of the Premises. In such event,Lessee shall be responsible forany necessary correc ve work. 3. Term. 3.1 Term. The CommencementDate,Expira on Date and Original Term of thisLease are as speciﬁedin Paragraph 1.3. 3.2 Early Possession. Any provision herein gran ng Lessee Early Possession of the Premises is subject to and condi oned upon the Premises being available for such possession prior to the Commencement Date. Any grant of Early Possessiononly conveys a nonexclusive rightto occupy the Premises. If Lessee totally or par ally occupies the Premises prior to the Commencement Date, the obliga on to pay Base Rent shall be abated for the period of such Early Possession. All other terms of thisLease (including but not limitedto the obliga ons to pay Real Property Taxes and insurance premiums and to maintain the Premises) shall be ineﬀect during such period. Any such Early Possession shall not aﬀect the Expira on Date. 3.3 Delay In Possession. Lessor agreesto use commercially reasonable eﬀorts todeliver exclusive possession of the Premises to Lessee by the Commencement Date. If, despite said eﬀorts, Lessor is unable to deliver possession by such date, Lessor shall not be subject to any liability therefor, nor shall such failure aﬀect the validity of this Lease or change the Expira on Date. Lessee shall not,however, be obligated to pay Rent orperform itsother obliga onsun l Lessor delivers possession of the Premises and any period of rent abatement that Lessee would otherwise have enjoyed shall run from the date of delivery of possession and con nue for a period equal to what Lessee would otherwise have enjoyed under the termshereof,butminusany daysof delay causedby the acts oromissions of Lessee. If possession is not delivered within 60 days a er the Commencement Date, Lessee may, at its op on, by no ce in wri ng within 10 days a er the end of such 60day period,cancel this Lease,in which event the Par es shall be discharged from all obliga onshereunder. If such wri en no ce is notreceived by Lessor within said 10 day period, Lessee's right to cancel shall terminate. If possession of the Premises is not delivered within 120 days a er the Commencement Date, this Lease shall terminate unlessother agreementsare reached between Lessor and Lessee,in wri ng. 3.4 Lessee Compliance. Lessor shall not be required to tender possession of the Premises to Lessee un l Lessee complies with its obliga on to provide evidence of insurance (Paragraph 8.5). Pending delivery of suchevidence,Lessee shall be required to perform all of its obliga ons underthis Lease from and a er the Start Date, including the payment of Rent, notwithstanding Lessor's elec on to withhold possession pending receipt of such evidence of insurance. Further, if Lessee is required toperform any other condi ons prior to or concurrent withthe Start Date,the StartDate shall occur but Lessormay elect to withhold possession un l such condi ons are sa sﬁed. 4.Rent. 4.1 Rent Deﬁned. All monetary obliga ons of Lessee to Lessor under the terms of this Lease (except for the Security Deposit) are deemed to be rent ("Rent"). 4.2 Payment. Lessee shall cause paymentof Rent to be receivedby Lessor inlawful money of the United States,without oﬀset ordeduc on(except as speciﬁcally permi ed in this Lease), on or before the day on which it is due. All monetary amounts shall be rounded to the nearest whole dollar. In the event that any invoice prepared by Lessor isinaccurate such inaccuracy shall notcons tute a waiver and Lessee shall be obligated to pay the amount setforth inthis Lease. Rent for any period during the term hereof which is for less than one full calendar month shall be prorated based upon the actual number of days of said month. Payment of Rent shall be made to Lessor at its address stated herein orto such otherpersons or place as Lessor may from me to me designate in wri ng. Acceptance of a payment which is less than the amount then due shall not be a waiver of Lessor's rights to the balance of such Rent, regardless of Lessor's endorsement of any check sosta ng. In the eventthat any check,dra ,or other instrument of paymentgiven by Lessee to Lessoris dishonored for any reason,Lessee agrees to pay to Lessor the sum of $25 in addi on to any Late Charge and Lessor, at its op on, may require all future payments to be made by Lessee to be by cashier's check. Payments will be applied ﬁrst to accrued late charges and a orney's fees,second to accrued interest,then to Base Rent and Opera ngExpense Increase,and any remaining amount to any other outstanding charges or costs. 5.SecurityDeposit.Lessee shall depositwith Lessorupon execu on hereof the Security Deposit as security for Lessee'sfaithful performance of its obliga ons under this Lease. If Lessee fails to pay Rent, or otherwise Defaults under this Lease, Lessor may use, apply or retain all or any por on of said Security Deposit for the payment of any amount already due Lessor,for Rents which will be due in the future,and/ orto reimburse or compensate Lessor for any liability,expense,loss or Docusign Envelope ID: A0CB2D85-2C3B-49BD-91B4-A968AD802F7F ________ ________ ________ ________ INITIALS INITIALS © 2019 AIR CRE. All Rights Reserved. Last Edited: 8/26/2024 2:35 PM LG15.23, Revised 10222020 Page 3 of 15 damage which Lessor may suﬀer orincur by reason thereof. If Lessor uses orapplies all or any por onof the Security Deposit,Lessee shall within10 days a er wri en request therefor deposit monies with Lessor suﬃcient to restore said Security Deposit to the full amount required by this Lease. If the Base Rent increases during the term of this Lease,Lessee shall,upon wri en request from Lessor,deposit addi onal monies with Lessor so thatthe total amount of the Security Deposit shall at all mes bear the same propor on to the increased Base Rent as the ini al Security Deposit bore to the ini al Base Rent. Should the Agreed Use be amended to accommodate a material change inthe business of Lessee or toaccommodate a sublessee or assignee, Lessor shall have the right to increase the Security Deposit to the extent necessary, in Lessor's reasonable judgment, to account for any increased wear and tear that the Premises may suﬀer as a result thereof. If a change in control of Lessee occurs during thisLease andfollowing such change the ﬁnancial condi on of Lessee is,in Lessor's reasonable judgment,signiﬁcantly reduced,Lessee shall deposit such addi onal monies with Lessor as shall be suﬃcient to cause the Security Deposit to be at a commercially reasonable level based on such change in ﬁnancial condi on. Lessor shall not be requiredto keep the Security Deposit separate from its general accounts. Within 90 daysa erthe expira onor termina onof this Lease, Lessor shall return that por on of the Security Deposit not used or applied by Lessor. Lessor shall upon wri en request provide Lessee with an accoun ng showing how thatpor on of the Security Deposit that was not returned wasapplied. No part of the Security Deposit shall be considered tobe heldin trust,to bear interest or to be prepayment for any monies to be paid by Lessee under this Lease.THE SECURITY DEPOSIT SHALL NOT BE USED BY LESSEE IN LIEU OF PAYMENT OF THE LAST MONTH'S RENT. 6. Use. 6.1 Use. Lessee shall use and occupy the Premisesonly forthe Agreed Use,or any otherlegal use which isreasonably comparable thereto,and forno other purpose. Lessee shall not use or permit the use of the Premises in a manner that is unlawful, creates damage, waste or a nuisance, or that disturbs occupants of or causes damage toneighboring premisesor proper es. Other than guide,signal and seeing eye dogs,Lessee shall not keep or allowin the Premises any pets,animals, birds,ﬁsh, or rep les. Lessor shall not unreasonably withhold or delay its consent to any request for a modiﬁca on of the Agreed Use, so long as the same will not be signiﬁcantly more burdensome to the Premises. If Lessor electsto withhold consent,Lessor shall within 7 days a er such request give wri enno ﬁca on of same, which no ce shall include an explana on of Lessor's objec ons to the change in the Agreed Use. 6.2 Hazardous Substances. (a)Reportable Uses Require Consent. The term "Hazardous Substance" as used in this Lease shall mean any product, substance, or waste whose presence,use,manufacture,disposal,transporta on,or release,eitherby itself or in combina on with other materials expected to be onthe Premises,is either: (i) poten ally injurious to the public health, safety or welfare, the environment or the Premises, (ii) regulated or monitored by any governmental authority, or (iii) a basis forpoten al liability of Lessor toany governmental agency or third party underany applicable statute orcommon law theory. HazardousSubstancesshall include,but notbe limited to,hydrocarbons,petroleum,gasoline,and/or crude oil or any products,byproducts or frac ons thereof. Lessee shall not engage in any ac vity in oron the Premises which cons tutes a Reportable Use of Hazardous Substances without the express prior wri en consent of Lessor and mely compliance (at Lessee's expense) with all Applicable Requirements. "Reportable Use" shall mean (i) the installa onor use of any above or belowground storage tank,(ii) the genera on, possession, storage, use, transporta on, or disposal of a Hazardous Substance that requires a permit from, or with respect to which a report, no ce, registra on or business plan is required to be ﬁled with,any governmental authority,and/or (iii) the presence at the Premises of a Hazardous Substance with respect towhich any Applicable Requirements requires that a no ce be given to persons entering or occupying the Premises or neighboring proper es. Notwithstanding the foregoing, Lessee may use any ordinary and customary materials reasonably required to be used in the normal course of the Agreed Use,ordinary oﬃce supplies (copier toner, liquid paper, glue, etc.) and common household cleaning materials, so long as such use is in compliance with all Applicable Requirements, is not a Reportable Use, and doesnot expose the Premisesor neighboring property to any meaningful risk of contamina on or damage orexpose Lessor to any liability therefor. Inaddi on, Lessor may condi on its consent to any Reportable Use upon receiving such addi onal assurances as Lessor reasonably deems necessary to protect itself, the public, the Premises and/or the environmentagainst damage,contamina on,injury and/orliability,including,butnot limited to,the installa on(and removal on orbefore Lease expira on or termina on) of protec ve modiﬁca ons (such as concrete encasements) and/or increasing the Security Deposit. (b)Duty to InformLessor. If Lessee knows,or has reasonable cause tobelieve,that a HazardousSubstance has come to be located in,on,under or about the Premises, other than as previously consented to by Lessor, Lessee shall immediately give wri en no ce of such fact to Lessor, and provide Lessor with a copy of any report,no ce,claim or otherdocumenta on which it hasconcerning the presence of suchHazardous Substance. (c)Lessee Remedia on. Lessee shall not cause or permit any Hazardous Substance to be spilled or released in, on, under, or about the Premises (including through the plumbing or sanitary sewer system) and shall promptly,at Lessee's expense, comply with all Applicable Requirements andtake all inves gatory and/or remedial ac on reasonably recommended, whether or not formally ordered or required, for the cleanup of any contamina on of, and for the maintenance, security and/or monitoring of the Premises or neighboringproper es,thatwas caused or materially contributed to by Lessee,or pertainingto or involvingany Hazardous Substance brought onto the Premises during the term of this Lease, by or for Lessee, or any third party. (d)Lessee Indemniﬁca on. Lessee shall indemnify,defend and hold Lessor,its agents,employees,lenders andground lessor,if any,harmlessfrom and against any and all loss of rents and/or damages, liabili es, judgments, claims, expenses, penal es, and a orneys' and consultants' fees arising out of or involving any Hazardous Substance brought onto the Premisesby or for Lessee,or any third party (provided,however,that Lessee shall have no liability underthis Lease with respect to underground migra on of any Hazardous Substance under the Premises from adjacent proper es not caused or contributed to by Lessee). Lessee's obliga onsshall include,but not be limited to,the eﬀects of any contamina onor injury to person,property or the environment created or suﬀered by Lessee,and the cost of inves ga on, removal, remedia on, restora on and/or abatement, and shall survive the expira on or termina on of this Lease.No termina on, cancella on or release agreement entered into by Lessorand Lessee shall release Lessee from its obliga ons underthis Lease withrespect to Hazardous Substances, unless speciﬁcally so agreed by Lessor in wri ng at the me of such agreement. (e)Lessor Indemniﬁca on. Except asotherwise providedin paragraph8.7,Lessor andits successorsand assigns shall indemnify,defend,reimburse and hold Lessee, its employees and lenders, harmless from and against any and all environmental damages, including the cost of remedia on, which result from Hazardous Substances whichexisted on the Premises prior to Lessee's occupancy or which are caused by the gross negligence orwillful misconduct of Lessor,its agents or employees. Lessor's obliga ons, as and when required by the Applicable Requirements, shall include, but not be limited to, the cost of inves ga on, removal,remedia on,restora on and/or abatement,and shall survive the expira on or termina onof this Lease. (f)Inves ga ons and Remedia ons. Lessor shall retain the responsibility and pay for any inves ga ons or remedia on measures required by governmental en es havingjurisdic on with respectto the existence of Hazardous Substancesonthe Premisesprior to Lessee's occupancy,unless such remedia on measure is required as a result of Lessee's use (including "Altera ons", as deﬁned in paragraph 7.3(a) below) of the Premises, in which event Lessee shall be responsible for suchpayment. Lessee shall cooperate fully inany suchac vi esat the request of Lessor,including allowingLessor andLessor'sagents tohave reasonable access to the Premises at reasonable mes in order to carry out Lessor's inves ga ve and remedial responsibili es. (g)Lessor Termina on Op on. If a HazardousSubstance Condi on (see Paragraph 9.3(a)) occurs duringthe term of this Lease,unless Lessee is legally responsible therefor (in which case Lessee shall make the inves ga on and remedia on thereof required by the Applicable Requirements and this Lease shall con nue in full force and eﬀect,but subject to Lessor's rightsunder Paragraph6.2(d) and Paragraph 13),Lessor may,at Lessor's op on,either(i) inves gate andremediate such Hazardous Substance Condi on, if required, as soon as reasonably possible at Lessor's expense, in which event this Lease shall con nue in full force and eﬀect, or (ii) if Docusign Envelope ID: A0CB2D85-2C3B-49BD-91B4-A968AD802F7F ________ ________ ________ ________ INITIALS INITIALS © 2019 AIR CRE. All Rights Reserved. Last Edited: 8/26/2024 2:35 PM LG15.23, Revised 10222020 Page 4 of 15 the es mated costto remediate such condi on exceeds 12 mes the thenmonthly Base Rent or $100,000,whicheveris greater,give wri enno ce to Lessee,within 30 days a er receipt by Lessor of knowledge of the occurrence of such Hazardous Substance Condi on, of Lessor's desire to terminate this Lease as of the date 60 days following the date of suchno ce. 6.3 Lessee's Compliance with Applicable Requirements. Except as otherwise provided in this Lease, Lessee shall, at Lessee's sole expense, fully, diligently and in a mely manner,materially comply with all Applicable Requirements,the requirements of any applicable ﬁre insurance underwriteror ra ng bureau,and the recommenda ons of Lessor's engineers and/or consultants which relate in any manner to the Premises, without regard to whether said Applicable Requirements are now in eﬀector become eﬀec ve a er the Start Date. Lessee shall,within 10 days a er receipt of Lessor's wri en request,provide Lessor with copies of all permits and other documents, and other informa on evidencing Lessee's compliance with any Applicable Requirements speciﬁed by Lessor, and shall immediately upon receipt,no fy Lessorin wri ng (with copies of any documents involved) of any threatened or actual claim,no ce,cita on,warning,complaint or report pertaining to or involving the failure of Lessee or the Premises to comply with any Applicable Requirements. 6.4 Inspec on;Compliance. Lessor and Lessor's"Lender" (as deﬁned in Paragraph 30) and consultantsauthorized by Lessor shall have the rightto enteronto Premises at any me in the case of an emergency, and otherwise at reasonable mes a er reasonable no ce, for the purpose of inspec ng and/or tes ng the condi on of the Premises and/orfor verifying compliance by Lessee with this Lease. The cost of any such inspec ons shall be paidby Lessor,unless a viola on of Applicable Requirements, or a Hazardous Substance Condi on (see Paragraph 9.3(a)) is found to exist or be imminent, or the inspec on is requested or ordered by a governmental authority. In suchcase,Lessee shall upon request reimburse Lessor for the cost of such inspec on,so longas such inspec on is reasonably related to the viola on or contamina on. In addi on, Lessee shall provide copies of all relevant material safety data sheets (MSDS) to Lessor within 10 days of the receipt of a wri enrequest therefor. Lessee acknowledges that any failure on its part toallow suchinspec ons or tes ngwill expose Lessor torisksand poten ally cause Lessor to incur costs not contemplated by this Lease, the extent of which will be extremely diﬃcult to ascertain. Accordingly, should the Lessee fail to allow such inspec ons and/ortes ng in a mely fashionthe Base Rent shall be automa cally increased,without any requirement for no ce to Lessee,by anamountequal to 10% of the then exis ng Base Rent or $100, whichever is greater for the remainder to the Lease. The Par es agree that such increase in Base Rent represents fair and reasonable compensa on for the addi onal risk/costs that Lessor will incur by reason of Lessee's failure to allow suchinspec onand/or tes ng. Suchincrease in Base Rent shall in no event cons tute a waiver of Lessee's Default or Breach with respect to such failure nor prevent the exercise of any of the other rights and remedies granted hereunder. 7. Maintenance; Repairs; U lity Installa ons; Trade Fixtures and Altera ons. 7.1 Lessee's Obliga ons. (a)In General. Subjecttothe provisionsof Paragraph2.2 (Condi on),2.3 (Compliance),6.3 (Lessee's Compliance with Applicable Requirements),7.2 (Lessor's Obliga ons), 9 (Damage or Destruc on), and 14 (Condemna on), Lessee shall, at Lessee's sole expense, keep the Premises, in good order, condi on and repair(whether or not the need for such repairs occurs as a resultof Lessee's use,any prior use, the elements or the age of such por on of the Premises),including, but not limited to, plumbing, ligh ng facili es, landscaping, driveways, parking lots, fences, retaining walls, signs, sidewalks and parkways located on, or adjacent to, the Premises. Lessee,inkeeping the Premises in goodorder,condi on andrepair,shall exercise and perform good maintenance prac ces,speciﬁcally includingthe procurement and maintenance of the service contracts required by Paragraph 7.1(b) below. Lessee's obliga ons shall include restora ons, replacements or renewals when necessary to keep the Premises and all improvements thereon or a part thereof ingood order,condi on and state of repair. Lessee shall,during the term of this Lease, keep the appearance of the Premises in a ﬁrstclass condi on (including, e.g. graﬃremoval). (b)Service Contracts. Lessee shall,atLessee's sole expense,procure andmaintain a contract,withcopies to Lessor,in customary form and substance for, and with a contractor specializing and experienced in the maintenance of the landscaping and irriga on systems, However, Lessor reserves the right, upon no ce to Lessee,to procure andmaintainsuch service contract,and Lessee shall reimburse Lessor,upon demand,for the cost thereof. (c)Failure to Perform. If Lessee fails to perform Lessee's obliga ons under this Paragraph 7.1, Lessor may enter upon the Premises a er 10 days' prior wri enno ce toLessee (exceptin the case of anemergency,inwhichcase no no ce shall be required),perform such obliga ons on Lessee's behalf,and put the Premises in good order, condi on and repair, and Lessee shall promptly pay to Lessor a sum equal to 115% of the cost thereof. 7.2 Lessor's Obliga ons. Subjectto the provisionsof Paragraphs 2.2 (Condi on),2.3 (Compliance),9 (Damage orDestruc on) and 14(Condemna on),itis intended by the Par es hereto that Lessor have no obliga on, in any manner whatsoever, to repair and maintain the Premises. It is the inten on of the Par es that the terms of this Lease govern the respec ve obliga ons of the Par esas to maintenance and repair of the Premises,and they expressly waive the beneﬁt of any statute now or herea er in eﬀect to the extent it is inconsistent with the terms of this Lease. 7.3 U lity Installa ons;Trade Fixtures;Altera ons. (a)Deﬁni ons. The term "U lity Installa ons" refers to security and ﬁre protec on systems, ligh ng ﬁxtures, plumbing, and fencing on the Premises. The term "Trade Fixtures" shall meanLessee's machinery and equipmentthat can be removed without doing material damage to the Premises. The term "Altera ons" shall mean any modiﬁca on of the improvements, other than U lity Installa ons or Trade Fixtures, whether by addi on or dele on. "Lessee Owned Altera ons and/or U lity Installa ons" are deﬁned as Altera ons and/or U lity Installa ons made by Lessee that are not yet owned by Lessor pursuant toParagraph 7.4(a). (b)Consent. Lessee shall notmake any Altera ons or U lity Installa ons to the Premises without Lessor's prior wri en consent. Lessee may,however, make nonstructural Altera ons or U lity Installa ons to the Premises without such consent but upon no ce to Lessor, as long as the cumula ve cost thereof during this Lease as extended does notexceed a sum equal to 3 month's Base Rent in the aggregate or a sum equal toone month's Base Rentin any one year. Lessor may,as a precondi on to gran ng such approval, require Lessee to u lize a contractor chosen and/or approved by Lessor. Any Altera ons or U lity Installa ons that Lessee shall desire tomake and which require the consent of the Lessorshall be presentedto Lessorin wri en form with detailedplans. Consent shall be deemed condi oned upon Lessee's: (i) acquiring all applicable governmental permits, (ii) furnishing Lessor with copies of both the permits and the plans and speciﬁca ons prior to commencementof the work,and (iii) compliance withall condi onsof said permitsand other Applicable Requirements in a promptandexpedi ous manner. Any Altera ons or U lity Installa ons shall be performed in a workmanlike manner with good and suﬃcient materials. Lessee shall promptly upon comple on furnish Lessor with asbuilt plans andspeciﬁca ons. For work whichcosts anamountin excess of one month's Base Rent,Lessor may condi on its consent upon Lessee providing a lien and comple on bond in an amount equal to 150% of the es mated cost of such Altera on or U lity Installa on and/or upon Lessee's pos ng an addi onal Security Depositwith Lessor. (c)Liens; Bonds. Lessee shall pay, when due, all claims for labor or materials furnished or alleged to have been furnished to or for Lessee at or for use on the Premises,whichclaims are ormay be secured by any mechanic'sor materialmen's lienagainst the Premisesor any interest therein. Lessee shall give Lessornot less than 10 days no ce prior to the commencement of any work in, on or about the Premises, and Lessor shall have the right to post no ces of nonresponsibility. If Lessee shall contestthe validity of any suchlien,claim or demand,thenLessee shall,at itssole expense defendand protect itself,Lessor and the Premisesagainst the same and shall pay and sa sfy any such adverse judgment that may be rendered thereon before the enforcement thereof. If Lessor shall require, Lessee shall furnish a surety bond in anamountequal to 150% of the amountof such contestedlien,claim or demand,indemnifying Lessor againstliability for the same. If Lessorelects to par cipate in any such ac on, Lessee shall pay Lessor's a orneys' fees and costs. Docusign Envelope ID: A0CB2D85-2C3B-49BD-91B4-A968AD802F7F ________ ________ ________ ________ INITIALS INITIALS © 2019 AIR CRE. All Rights Reserved. Last Edited: 8/26/2024 2:35 PM LG15.23, Revised 10222020 Page 5 of 15 7.4 Ownership;Removal;Surrender;and Restora on. (a)Ownership. Subject to Lessor's right to require removal or elect ownership as hereina er provided, all Altera ons and U lity Installa ons made by Lessee shall be the property of Lessee,but considered a part of the Premises. Lessor may,at any me,elect in wri ng to be the ownerof all or any speciﬁed part of the Lessee Owned Altera ons and U lity Installa ons. Unless otherwise instructed per paragraph 7.4(b) hereof, all Lessee Owned Altera ons and U lity Installa ons shall,at the expira on ortermina onof thisLease,become the property of Lessor andbe surrenderedby Lessee withthe Premises. (b)Removal. By delivery to Lessee of wri en no ce from Lessor not earlier than 90 and not later than 30 days prior to the end of the term of this Lease, Lessor may require that any or all Lessee Owned Altera ons or U lity Installa ons be removed by the expira onor termina on of this Lease. Lessormay require the removal at any me of all or any part of any Lessee Owned Altera ons or U lity Installa ons made without the required consent. (c)Surrender;Restora on. Lessee shall surrender the Premises by the Expira on Date orany earlier termina on date,withall of the improvements, parts and surfaces thereof broom clean and free of debris, and in good opera ng order, condi on and state of repair, ordinary wear and tear excepted. "Ordinary wearand tear"shall notinclude any damage or deteriora onthat wouldhave been prevented by good maintenance prac ce. Notwithstanding the foregoingand the provisions of Paragraph 7.1(a), if the Lessee occupies the Premises for 12 months or less, then Lessee shall surrender the Premises in the same condi on as delivered to Lessee on the Start Date with NOallowance for ordinary wearand tear. Lessee shall repairany damage occasioned by the installa on,maintenance or removal of Trade Fixtures, Lessee owned Altera ons and/or U lity Installa ons, furnishings, and equipment as well as the removal of any storage tank installed by or for Lessee. Lessee shall alsocompletely remove from the Premises any andall Hazardous Substancesbrought onto the Premises by or forLessee,orany third party (except Hazardous Substances which were deposited via underground migra on from areas outside of the Premises) to the level speciﬁed in Applicable Requirements. Trade Fixtures shall remainthe property of Lessee and shall be removed by Lessee. Any personal property of Lessee not removed onor before the Expira on Date or any earlier termina on date shall be deemed to have been abandoned by Lessee and may be disposed of or retained by Lessor as Lessor may desire. The failure by Lessee to mely vacate the Premises pursuantto this Paragraph 7.4(c) without the express wri en consent of Lessor shall cons tute a holdover underthe provisions of Paragraph 26 below. 8.Insurance;Indemnity. 8.1 Payment of Premium Increases. (a) Lessee shall pay toLessor any insurance cost increase ("Insurance Cost Increase") occurring duringthe term of this Lease. Insurance Cost Increase is deﬁned as any increase in the actual cost of the insurance required under Paragraph 8.2(b), 8.3(a) and 8.3(b), over and above the Base Premium as hereina er deﬁned calculated on anannual basis. Insurance CostIncrease shall include butnot be limited to increases resul ng from the nature of Lessee'soccupancy,any act or omission of Lessee,requirements of the holder of mortgage ordeed of trust covering the Premises,increasedvalua on of the Premises and/ora premium rate increase. The par es are encouraged to ﬁll in the Base Premium in paragraph 1.8 with a reasonable premium for such insurance based on the Agreed Use of the Premises. If the par esfail to insert a dollaramount in Paragraph 1.8, then the Base Premium shall be the lowest annual premium reasonably obtainable for the required insurance as of the commencement of the Original Term for the Agreed Use of the Premises. In no event, however, shall Lessee be responsible forany por on of the increase inthe premium costa ributable toliability insurance carried by Lessorunder Paragraph8.2(b) in excessof $2,000,000per occurrence. (b) Lessee shall pay any such Insurance Cost Increase to Lessor within 30 days a er receipt by Lessee of a copy of the premium statement or other reasonable evidence of the amount due. If the insurance policies maintained hereundercover other property besidesthe Premises,Lessorshall also deliver to Lessee a statement of the amount of such Insurance Cost Increase a ributable only to the Premises showing in reasonable detail the manner in which such amount was computed. Premiums for policy periods commencing prior to,orextending beyondthe term of this Lease,shall be proratedto correspond tothe term of this Lease. 8.2 Liability Insurance. (a)Carried byLessee. Lessee shall obtainand keep in force a Commercial General Liability policy of insurance protec ng Lessee and Lessor as an addi onal insured against claims for bodily injury, personal injury and property damage based upon or arising out of the ownership, use, occupancy or maintenance of the Premises andall areas appurtenant thereto. Such insurance shall be onan occurrence basis providing single limit coverage in anamountnot lessthan $1,000,000 per occurrence with an annual aggregate of not less than $2,000,000. Lessee shall add Lessor as an addi onal insured by means of an endorsement at least as broad as the Insurance Service Organiza on's"Addi onal InsuredManagers orLessors of Premises"Endorsement. The policy shall not contain any intrainsured exclusions as between insured persons or organiza ons, but shall include coverage for liability assumed under this Lease as an "insured contract" for the performance of Lessee's indemnity obliga ons under this Lease. The limitsof said insurance shall not,however,limitthe liability of Lessee norrelieve Lessee of any obliga on hereunder. Lessee shall provide an endorsement on its liability policy(ies) which provides that its insurance shall be primary to and not contributory with any similar insurance carried by Lessor,whose insurance shall be considered excess insurance only. (b)Carried by Lessor. Lessor shall maintain liability insurance as described in Paragraph 8.2(a), in addi on to, and not in lieu of, the insurance required to be maintained by Lessee. Lessee shall not be namedas an addi onal insured therein. 8.3 Property InsuranceImprovements and Rental Value. (a)Improvements. The InsuringParty shall obtainand keep in force a policy orpolicies inthe name of Lessor,with losspayable toLessor,any groundlessor, and to any Lender insuring loss or damage to the Premises. The amount of such insurance shall be equal to the full insurable replacement cost of the Premises,as the same shall existfrom me to me,or the amountrequired by any Lender,butin no event more thanthe commercially reasonable andavailable insurable value thereof. Lessee Owned Altera ons and U lity Installa ons, Trade Fixtures, and Lessee's personal property shall be insured by Lessee and not by Lessor. If the coverage isavailable and commercially appropriate,such policy orpolicies shall insure againstall risks of direct physical lossor damage (except the perils of ﬂood and/or earthquake unless required by a Lender or included in the Base Premium), including coverage for debris removal and the enforcement of any Applicable Requirements requiring the upgrading,demoli on,reconstruc on or replacement of any por on of the Premises as the resultof a covered loss. Said policy or policies shall also contain an agreed valua on provision in lieu of any coinsurance clause, waiver of subroga on, and inﬂa on guard protec on causing an increase in the annual property insurance coverage amount by a factor of notless than the adjusted U.S. Department of Labor Consumer Price Index for All Urban Consumers for the city nearest to where the Premises are located.If such insurance coverage has a deduc ble clause, the deduc ble amount shall not exceed $5,000 per occurrence,and Lessee shall be liable for suchdeduc ble amountin the event of an Insured Loss. (b)Rental Value. The Insuring Party shall obtain and keep in force a policy or policies in the name of Lessor with loss payable to Lessor and any Lender, insuring the loss of the full Rent for one yearwith anextended period of indemnity foran addi onal 180days ("Rental Value insurance"). Said insurance shall contain an agreed valua on provision in lieu of any coinsurance clause, and the amount of coverage shall be adjusted annually to reﬂect the projected Rent otherwise payable by Lessee,forthe next12 month period. Lessee shall be liable for any deduc ble amount inthe eventof suchloss. (c)Adjacent Premises. If the Premises are part of a larger property owned by Lessor , the Lessee shall pay for any increase in the premiums for the property insurance of such adjacent property if said increase iscaused by Lessee's acts,omissions, use oroccupancy of the Premises. 8.4 Lessee's Property; Coverage; Worker's Compensa on Insurance. (a)Property Damage. Lessee shall obtain and maintain insurance coverage on all of Lessee's personal property,Trade Fixtures,andLessee Owned Altera ons and U lity Installa ons. Such insurance shall be full replacement cost coverage with a deduc ble of not to exceed $1,000 per occurrence. The proceeds Docusign Envelope ID: A0CB2D85-2C3B-49BD-91B4-A968AD802F7F ________ ________ ________ ________ INITIALS INITIALS © 2019 AIR CRE. All Rights Reserved. Last Edited: 8/26/2024 2:35 PM LG15.23, Revised 10222020 Page 6 of 15 from any such insurance shall be used by Lessee forthe replacement of personal property,Trade Fixtures and Lessee Owned Altera ons and U lity Installa ons. (b)Worker's Compensa on Insurance. Lessee shall obtain and maintain Worker's Compensa on Insurance in such amount as may be required by Applicable Requirements. Such policy shall include a "Waiver of Subroga on"endorsement. Lessee shall provide Lessor with a copy of such endorsement along with the cer ﬁcate of insurance or copy of the policy required by paragraph 8.5. (c)No Representa on of Adequate Coverage. Lessor makesno representa onthat the limitsor forms of coverage of insurance speciﬁed herein are adequate to cover Lessee's property, business opera ons or obliga ons under this Lease. 8.5 Insurance Policies. Insurance required herein shall be by companies maintaining during the policy term a "General Policyholders Ra ng"of atleast A, VII, as set forth in the most current issue of "Best's Insurance Guide", or such other ra ng as may be required by a Lender. Lessee shall not do or permit to be done anythingwhich invalidates the requiredinsurance policies. Lessee shall,prior to the Start Date,deliver to Lessor cer ﬁed copiesof policies of such insurance or cer ﬁcates with copies of the required endorsements evidencing the existence and amounts of the required insurance. No such policy shall be cancelable or subject to modiﬁca on except a er 30 days prior wri enno ce to Lessor. Lessee shall,at least 10 days prior tothe expira on of such policies,furnish Lessor with evidence of renewals or "insurance binders" evidencing renewal thereof, or Lessor may increase his liability insurance coverage and charge the cost thereof to Lessee, which amountshall be payable by Lessee to Lessorupon demand. Such policies shall be for a term of atleast one year,or the length of the remaining term of thisLease, whichever is less. If either Party shall fail to procure and maintain the insurance required to be carried by it, the other Party may, but shall not be required to, procure andmaintain the same. 8.6 Waiver of Subroga on. Without aﬀec ng any other rights or remedies, Lessee and Lessor each hereby release and relieve the other, and waive their en re rightto recoverdamages against the other,for loss of or damage toits property arising outof or incident to the perilsrequired to be insured against herein. The eﬀect of such releases and waivers is not limited by the amount of insurance carried or required, or by any deduc bles applicable hereto. The Par es agree to have theirrespec ve property damage insurance carriers waive any right to subroga on thatsuch companies may have against Lessor or Lessee,as the case may be,so long as the insurance is not invalidated thereby. 8.7 Indemnity. Except forLessor's gross negligence or willful misconduct,Lessee shall indemnify,protect,defend and hold harmless the Premises,Lessorand its agents, Lessor's master or ground lessor, partners and Lenders, from and against any and all claims, loss of rents and/or damages, liens, judgments, penal es, a orneys'and consultants'fees,expensesand/or liabili es arising out of,involving,or inconnec on with,a Breach of the Lease by Lessee and/or the use and/or occupancy of the Premises and/or Project by Lessee and/or by Lessee's employees, contractors or invitees. If any ac on or proceeding is brought against Lessor by reason of any of the foregoing ma ers,Lessee shall uponno ce defend the same at Lessee's expense by counsel reasonably sa sfactory toLessorand Lessor shall cooperate with Lessee in suchdefense. Lessor need nothave ﬁrst paidany such claim in order to be defended orindemniﬁed. 8.8 Exemp on of Lessor and its Agents from Liability. Notwithstanding the negligence or breach of this Lease by Lessor or its agents, neither Lessor nor its agentsshall be liable under any circumstances for: (i) injury or damage tothe personor goods,wares,merchandise or other property of Lessee,Lessee's employees, contractors, invitees, customers, or any other person in or about the Premises, from any cause, (ii) any damages arising from any act or neglect of any other tenant of Lessor or from the failure of Lessor or its agents to enforce the provisions of any other lease in the Project,or(iii) injury to Lessee's business or for any loss of income or proﬁt therefrom. Instead, it is intended that Lessee's sole recourse in the event of such damages or injury be toﬁle a claim on the insurance policy(ies) that Lessee is required tomaintain pursuant to the provisions of paragraph8. 8.9 Failure to Provide Insurance. Lessee acknowledges that any failure on its part to obtain or maintain the insurance required herein will expose Lessor to risksand poten ally cause Lessor toincur costs not contemplated by thisLease,the extentof whichwill be extremely diﬃcult to ascertain. Accordingly,for any month or por on thereof that Lessee does not maintain the required insurance and/or does not provide Lessor with the required binders or cer ﬁcates evidencing the existence of the required insurance,the Base Rent shall be automa cally increased,without any requirement for no ce toLessee,by an amount equal to 10% of the then exis ng Base Rent or $100, whichever is greater. The par es agree that such increase in Base Rent represents fair and reasonable compensa on for the addi onal risk/costs thatLessor will incur by reasonof Lessee'sfailure to maintain the required insurance. Suchincrease in Base Rentshall in no event cons tute a waiver of Lessee's Default or Breach with respect to the failure to maintain such insurance, prevent the exercise of any of the other rights and remedies granted hereunder,nor relieve Lessee of itsobliga on tomaintain the insurance speciﬁed inthis Lease. 9. Damage or Destruc on. 9.1 Insured Loss. If the improvements on the Premises are damaged and such damage is anInsured Loss,then Lessor shall,at Lessor's expense,repair such damage (but not Lessee's Trade Fixtures or Lessee Owned Altera ons and U lity Installa ons) as soon as reasonably possible and this Lease shall con nue in full force andeﬀect; provided,however,thatLessee shall,atLessor's elec on,make the repairof any damage ordestruc on the total cost torepairof which is $10,000 or less, and, in such event, Lessor shall make any applicable insurance proceeds available to Lessee on a reasonable basis for that purpose. Notwithstanding the foregoing, if the required insurance was notin force or the insurance proceeds are not suﬃcient to eﬀect suchrepair,the Insuring Party shall promptly contribute the shortage in proceeds (except as to the deduc ble which is Lessee's responsibility) as and when required to complete said repairs. In the event, however, such shortage was due to the fact that,by reason of the unique nature of the improvements,full replacementcost insurance coverage was not commercially reasonable andavailable,Lessor shall have no obliga on to pay for the shortage in insurance proceeds or to fully restore the unique aspects of the Premises. 9.2 Uninsured Loss. If the improvementsonthe Premises are damagedandsuch damage is not anInsured Loss,unless caused by a negligent or willful act of Lessee (in which event Lessee shall make the repairs at Lessee's expense), Lessor may either: (i) repair such damage as soon as reasonably possible at Lessor's expense,in which event this Lease shall con nue in full force andeﬀect,or (ii) terminate this Lease by giving wri en no ce toLessee within30 days a er receiptby Lessor of knowledge of the occurrence of such damage. Such termina on shall be eﬀec ve 60 days following the date of such no ce. 9.3 Abatement of Rent;Lessee's Remedies. (a)Abatement. In the event the improvements on the Premises are damaged or a Hazardous Substance Condi on for which Lessee is not responsible underthis Lease occurs ('HazardousSubstance Condi on'shall mean the occurrence or discovery of a condi on involvingthe presence of,or a contamina on by,a Hazardous Substance on or under the Premises which requires remedia on), the Rent payable by Lessee for the period required for the repair, remedia on or restora on of suchdamage shall be abated in propor on tothe degree to which Lessee'suse of the Premises is impaired,butnot to exceedthe proceeds received from the Rental Value insurance. All other obliga ons of Lessee hereunder shall be performed by Lessee, and Lessor shall have no liability for any such damage, destruc on,remedia on,repair or restora onexceptas provided herein. (b)Remedies. If Lessor is obligated to repair or restore the Premises and does not commence, in a substan al and meaningful way, such repair or restora on within 90days a er suchobliga on shall accrue,Lessee may,atany me prior to the commencement of suchrepair orrestora on,give wri en no ce to Lessor and to any Lenders of which Lessee has actual no ce, of Lessee's elec on to terminate this Lease on a date not less than 60 days following the giving of such no ce. If Lessee givessuchno ce and such repair or restora onis not commenced within 30 days therea er,this Lease shall terminate as of the date speciﬁed in said no ce. If the repair or restora on is commenced within such 30 days, this Lease shall con nue in full force and eﬀect. "Commence" shall mean either the uncondi onal authoriza on of the prepara onof the required plans,or the beginningof the actual work onthe Premises,whicheverﬁrst occurs. 9.4 Termina on; Advance Payments. Upon termina on of this Lease pursuant to Paragraph 6.2(g) or Paragraph 9, an equitable adjustment shall be made Docusign Envelope ID: A0CB2D85-2C3B-49BD-91B4-A968AD802F7F ________ ________ ________ ________ INITIALS INITIALS © 2019 AIR CRE. All Rights Reserved. Last Edited: 8/26/2024 2:35 PM LG15.23, Revised 10222020 Page 7 of 15 concerning advance Base Rent and any other advance payments made by Lessee to Lessor. Lessor shall,inaddi on,returnto Lessee somuch of Lessee's Security Deposit as has not been, or is not then required to be, used by Lessor. 9.5 Waive Statutes. Lessorand Lessee agree that the terms of thisLease shall govern the eﬀect of any damage toor destruc onof the Premiseswith respect to the termina on of this Lease and hereby waive the provisions of any present or future statute to the extent inconsistent herewith. 10.Real PropertyTaxes. 10.1 Deﬁni on. As used herein, the term "Real Property Taxes" shall include any form of assessment; real estate, general, special, ordinary or extraordinary, or rental levy or tax (other thaninheritance,personal income orestate taxes); improvement bond; and/or license fee imposed upon orlevied againstany legal or equitable interest of Lessor in the Premises or the Project, Lessor's right to other income therefrom, and/or Lessor's business of leasing, by any authority having the direct or indirectpower to tax and where the fundsare generated with reference tothe Building address. Real Property Taxes shall also include any tax,fee,levy, assessment or charge, or any increase therein: (i) imposed by reason of events occurring during the term of this Lease, including but not limited to, a change in the ownership of the Premises,and (ii) levied or assessed onmachinery orequipment provided by Lessor toLessee pursuant to this Lease. 10.2 Payment of Taxes. Lessor shall pay the Real Property Taxes applicable to the Premises provided, however, that Lessee shall pay to Lessor the amount, if any,by which Real Property Taxes applicable tothe Premisesincrease overthe ﬁscal tax year during whichthe Commencement Date Occurs ("Tax Increase"). Payment of any such Tax Increase shall be made by Lessee to Lessor within 30 days a er receipt of Lessor's wri en statement se ng forth the amount due and computa on thereof. If any such taxesshall cover any periodof me prior to ora er the expira onor termina on of this Lease,Lessee's share of such taxes shall be prorated to cover only that por on of the tax bill applicable to the period that this Lease is in eﬀect. In the event lessee incurs a late charge on any Rent payment, Lessor may es mate the current Real Property Taxes,and require that the Tax Increase be paid in advance toLessor by Lessee monthly inadvance with the payment of the Base Rent. Such monthly payment shall be an amount equal to the amount of the es mated installment of the Tax Increase divided by the number of months remaining before the monthin which saidinstallment becomesdelinquent. When the actual amount of the applicable Tax Increase isknown,the amount of suchequal monthly advance payments shall be adjusted as required to provide the funds needed to pay the applicable Tax Increase. If the amount collected by Lessor is insuﬃcient to pay the Tax Increase when due,Lessee shall pay Lessor,upondemand,such addi onal sums asare necessary to pay suchobliga ons. Advance payments may be intermingled with other moneys of Lessor and shall not bear interest. In the event of a Breach by Lessee in the performance of its obliga ons under this Lease, then any such advance payments may be treated by Lessor as an addi onal Security Deposit. 10.3 Addi onal Improvements. Notwithstanding anything to the contrary in this Paragraph 10.2, Lessee shall pay to Lessor upon demand therefor the en rety of any increase in Real Property Taxes assessed by reason of Altera onsor U lity Installa onsplaced uponthe Premises by Lessee or at Lessee's request or by reason of any altera ons or improvementsto the Premises made by Lessor subsequent to the execu onof this Lease by the Par es. 10.4 Joint Assessment. If the Premises are not separately assessed, Lessee's liability shall be an equitable propor on of the Tax Increase for all of the land and improvements included withinthe tax parcel assessed,suchpropor on to be conclusively determined by Lessor from the respec ve valua ons assigned in the assessor's work sheets or such other informa on as may be reasonably available. 10.5 Personal Property Taxes. Lessee shall pay,priorto delinquency,all taxesassessedagainst andlevied upon Lessee Owned Altera ons,U lity Installa ons, Trade Fixtures, furnishings, equipment and all personal property of Lessee. When possible, Lessee shall cause its Lessee Owned Altera ons and U lity Installa ons, Trade Fixtures,furnishings,equipment and all other personal property tobe assessed and billed separately from the real property of Lessor. If any of Lessee's said property shall be assessed with Lessor's real property, Lessee shall pay Lessor the taxes a ributable to Lessee's property within 10 days a er receipt of a wri en statementse ng forth the taxesapplicable to Lessee's property. 11. U li es and Services. 11.1 Lessee shall pay for all water,gas,heat,light,power,telephone,trashdisposal and other u li es and servicessupplied tothe Premises,together withany taxes thereon. If any such services are not separately metered or billed to Lessee, Lessee shall pay a reasonable propor on, to be determined by Lessor, of all charges jointly metered or billed. There shall be no abatementof rent and Lessor shall not be liable in any respect whatsoever for the inadequacy,stoppage,interrup on or discon nuance of any u lity or service due to riot, strike, labor dispute, breakdown, accident, repair or other cause beyond Lessor's reasonable control or in coopera onwith governmental request ordirec ons. 11.2 Within ﬁ een days of Lessor's wri en request, Lessee agrees to deliver to Lessor such informa on, documents and/or authoriza on as Lessor needs in order for Lessorto comply with new orexis ng Applicable Requirements rela ngto commercial buildingenergy usage,ra ngs,and/or the repor ng thereof. 12. Assignment and Suble ng. 12.1 Lessor's ConsentRequired. (a) Lessee shall not voluntarily or by opera on of law assign, transfer, mortgage or encumber (collec vely, "assign or assignment") or sublet all or any part of Lessee'sinterest inthisLease orin the Premises without Lessor's prior wri en consent. (b) Unless Lessee is a corpora on and its stock is publicly traded on a na onal stock exchange, a change in the control of Lessee shall cons tute an assignmentrequiring consent. The transfer,on a cumula ve basis,of 25% ormore of the vo ng control of Lessee shall cons tute a change incontrol forthis purpose. (c) The involvement of Lessee or its assets in any transac on, or series of transac ons (by way of merger, sale, acquisi on,ﬁnancing, transfer, leveraged buyout or otherwise),whether ornot a formal assignment orhypotheca on of thisLease orLessee's assetsoccurs,which resultsor will resultin a reduc on of the Net Worth of Lessee by an amount greater than 25% of such Net Worth as it was represented at the me of the execu on of this Lease or at the me of the most recent assignment towhich Lessorhas consented,oras it exists immediately priorto said transac on or transac onscons tu ng suchreduc on,whichever wasor is greater, shall be considered an assignment of this Lease to which Lessor may withhold its consent. "Net Worth of Lessee" shall mean the net worth of Lessee (excluding any guarantors) established under generally accepted accoun ngprinciples. (d) An assignment or suble ng without consent shall, at Lessor's op on, be a Default curable a er no ce per Paragraph 13.1(d), or a noncurable Breach without the necessity of any no ce and grace period. If Lessorelects to treat such unapproved assignmentor suble ngas a noncurable Breach,Lessormay either: (i) terminate this Lease, or (ii) upon 30 days wri en no ce, increase the monthly Base Rent to 110% of the Base Rent then in eﬀect. Further, in the event of such Breachand rental adjustment,(i) the purchase price of any op on to purchase the Premises held by Lessee shall be subject tosimilaradjustment to 110% of the price previously in eﬀect, and (ii) all ﬁxed and nonﬁxed rental adjustments scheduled during the remainder of the Lease term shall be increased to 110% of the scheduled adjusted rent. (e) Lessee's remedy for any breach of Paragraph 12.1 by Lessor shall be limited to compensatory damages and/or injunc ve relief. (f) Lessor may reasonably withhold consent to a proposed assignment orsuble ng if Lessee is inDefault atthe me consent is requested. (g) Notwithstanding the foregoing, allowing a de minimis por on of the Premises, i.e. 20 square feet or less, to be used by a third party vendor in connec on with the installa on of a vending machine or payphone shall not cons tute a suble ng. 12.2 Terms and Condi ons Applicable to Assignment and Suble ng. (a) Regardless of Lessor's consent,no assignment or suble ng shall: (i) be eﬀec ve without the express wri en assump on by such assignee or Docusign Envelope ID: A0CB2D85-2C3B-49BD-91B4-A968AD802F7F ________ ________ ________ ________ INITIALS INITIALS © 2019 AIR CRE. All Rights Reserved. Last Edited: 8/26/2024 2:35 PM LG15.23, Revised 10222020 Page 8 of 15 sublessee of the obliga ons of Lessee under this Lease,(ii) release Lessee of any obliga ons hereunder,or(iii) alter the primary liability of Lessee forthe paymentof Rent or for the performance of any other obliga ons to be performed by Lessee. (b) Lessor may accept Rent orperformance of Lessee's obliga ons from any person other than Lessee pending approval or disapproval of an assignment. Neither a delay in the approval or disapproval of such assignment nor the acceptance of Rent or performance shall cons tute a waiver or estoppel of Lessor's right to exercise its remedies for Lessee'sDefaultor Breach. (c) Lessor's consent to any assignment or suble ng shall not cons tute a consent to any subsequent assignment or suble ng. (d) Inthe eventof any Defaultor Breachby Lessee,Lessor may proceed directly against Lessee,any Guarantorsor anyone else responsible for the performance of Lessee's obliga ons under this Lease, including any assignee or sublessee, without ﬁrst exhaus ng Lessor's remedies against any other person or en ty responsible therefor to Lessor,or any security held by Lessor. (e) Each request for consent to an assignment or suble ng shall be in wri ng, accompanied by informa on relevant to Lessor's determina on as to the ﬁnancial and opera onal responsibility and appropriatenessof the proposed assignee or sublessee,includingbut notlimited tothe intended use and/or required modiﬁca on of the Premises, if any, together with a fee of $500 as considera on for Lessor's considering and processing said request. Lessee agrees to provide Lessor withsuch other or addi onal informa onand/or documenta on as may be reasonably requested. (See also Paragraph 36) (f) Any assignee of, or sublessee under, this Lease shall, by reason of accep ng such assignment, entering into such sublease, or entering into possession of the Premises or any por onthereof,be deemed tohave assumedandagreed toconform andcomply with eachand every term,covenant,condi on and obliga on herein to be observed or performed by Lessee during the term of said assignment or sublease, other than such obliga ons as are contrary to or inconsistent with provisions of anassignment orsublease to which Lessor has speciﬁcally consentedto in wri ng. (g) Lessor's consent to any assignment or suble ng shall not transfer to the assignee or sublessee any Op on granted to the original Lessee by this Lease unlesssuch transfer is speciﬁcally consented to by Lessor inwri ng. (See Paragraph 39.2) 12.3 Addi onal Terms and Condi ons Applicable to Suble ng. The following terms and condi ons shall apply to any suble ng by Lessee of all or any part of the Premises andshall be deemedincluded in all subleasesunder thisLease whether ornot expressly incorporated therein: (a) Lessee hereby assigns and transfers to Lessor all of Lessee's interest in all Rent payable on any sublease, and Lessor may collect such Rent and apply same toward Lessee's obliga ons underthis Lease; provided,however,thatun l a Breachshall occur in the performance of Lessee'sobliga ons,Lessee may collect said Rent. In the event that the amount collected by Lessor exceeds Lessee's then outstanding obliga ons any such excess shall be refunded to Lessee. Lessor shall not,by reason of the foregoingor any assignment of such sublease,nor by reasonof the collec on of Rent,be deemed liable to the sublessee for any failure of Lessee to perform andcomply withany of Lessee'sobliga ons tosuch sublessee. Lessee hereby irrevocably authorizesand directs any such sublessee,upon receipt of a wri en no ce from Lessor sta ng that a Breach exists in the performance of Lessee's obliga ons under this Lease, to pay to Lessor all Rent due and to become due underthe sublease. Sublessee shall rely uponany suchno ce from Lessorand shall pay all Rentsto Lessor without any obliga onor rightto inquire as towhether such Breach exists, notwithstanding any claim from Lessee to the contrary. (b) Inthe eventof a Breachby Lessee,Lessor may,at its op on,require sublessee to a orn to Lessor,in which eventLessorshall undertake the obliga ons of the sublessor under such sublease from the me of the exercise of said op on to the expira on of such sublease; provided, however, Lessor shall not be liable for any prepaid rentsor security depositpaid by such sublessee to such sublessor or for any prior Defaultsor Breaches of such sublessor. (c) Any ma er requiring the consent of the sublessor under a sublease shall also require the consent of Lessor. (d) Nosublessee shall further assignor sublet all or any partof the Premises withoutLessor's priorwri enconsent. (e) Lessor shall deliver a copy of any no ce of Default or Breach by Lessee to the sublessee, who shall have the right to cure the Default of Lessee within the grace period,if any,speciﬁed in such no ce. The sublessee shall have a right of reimbursement and oﬀsetfrom and againstLessee for any suchDefaults curedby the sublessee. 13.Default;Breach;Remedies. 13.1 Default; Breach. A "Default" is deﬁned as a failure by the Lessee to comply with or perform any of the terms, covenants, condi ons or Rules and Regula ons under this Lease. A "Breach" is deﬁned asthe occurrence of one ormore of the following Defaults,and the failure of Lessee to cure such Defaultwithin any applicable grace period: (a) The abandonment of the Premises; the vaca ngof the Premises prior to the expira onor termina onof this Lease without providing a commercially reasonable level of security, or where the coverage of the property insurance described in Paragraph 8.3 is jeopardized as a result thereof, or without providing reasonable assurances to minimize poten al vandalism; or failure to deliver to Lessorexclusive possession of the en re Premises in accordance herewith priorto the expira on or termina on of this Lease. (b) The failure of Lessee tomake any paymentof Rent orany Security Deposit required to be made by Lessee hereunder,whether to Lessor orto a third party, when due, to provide reasonable evidence of insurance or surety bond, or to fulﬁll any obliga on under this Lease which endangers or threatens life or property,where such failure con nues for a period of 3 business daysfollowing wri en no ce to Lessee. THE ACCEPTANCE BY LESSOR OFA PARTIAL PAYMENT OF RENT OR SECURITY DEPOSIT SHALL NOT CONSTITUTE A WAIVER OF ANY OF LESSOR'S RIGHTS, INCLUDING LESSOR'S RIGHT TO RECOVER POSSESSION OF THE PREMISES. (c) The failure of Lessee to allow Lessor and/or its agents access to the Premises or the commission of waste, act or acts cons tu ng public or private nuisance,and/or an illegal ac vity on the Premisesby Lessee,where such ac ons con nue fora period of 3 business days following wri en no ce to Lessee. In the event that Lessee commits waste, a nuisance or an illegal ac vity a second me then, the Lessor may elect to treat such conduct as a noncurable Breach rather than a Default. (d) The failure by Lessee to provide (i) reasonable wri en evidence of compliance with Applicable Requirements, (ii) the service contracts, (iii) the rescission of an unauthorized assignmentor suble ng,(iv) an Estoppel Cer ﬁcate or ﬁnancial statements,(v) a requested subordina on,(vi) evidence concerning any guaranty and/or Guarantor, (vii) any document requested under Paragraph 42, (viii) material safety data sheets (MSDS), or (ix) any other documenta on or informa onwhich Lessor may reasonably require of Lessee under the terms of this Lease,where any suchfailure con nues fora periodof 10 days following wri en no ce to Lessee. (e) A Defaultby Lessee as to the terms,covenants,condi onsor provisions of thisLease,or of the rulesadopted under Paragraph 40 hereof,other than those described in subparagraphs 13.1(a), (b), (c) or (d), above, where such Default con nues for a period of 30 days a er wri en no ce; provided, however, that if the nature of Lessee's Default issuch thatmore than 30 daysare reasonably requiredfor itscure,then itshall not be deemed to be a Breach if Lessee commences such cure within said 30 day period and therea er diligently prosecutes such cure to comple on. (f) The occurrence of any of the following events: (i) the making of any general arrangement orassignment forthe beneﬁt of creditors; (ii) becoming a "debtor" as deﬁned in 11 U.S.C. § 101 or any successor statute thereto (unless, in the case of a pe onﬁled against Lessee, the same is dismissed within 60 days); (iii) the appointment of a trustee or receiver to take possessionof substan ally all of Lessee'sassets located at the Premises or of Lessee's interest in this Lease,where possession is not restored to Lessee within 30 days; or (iv) the a achment, execu on or other judicial seizure of substan ally all of Lessee's assets located at the Docusign Envelope ID: A0CB2D85-2C3B-49BD-91B4-A968AD802F7F ________ ________ ________ ________ INITIALS INITIALS © 2019 AIR CRE. All Rights Reserved. Last Edited: 8/26/2024 2:35 PM LG15.23, Revised 10222020 Page 9 of 15 Premisesor of Lessee's interest inthis Lease,where suchseizure isnot discharged within 30 days; provided,however,inthe eventthat any provisionof this subparagraph is contrary to any applicable law, such provision shall be of no force or eﬀect, and not aﬀect the validity of the remaining provisions. (g) The discovery that anyﬁnancial statementof Lessee or of any Guarantor given to Lessor wasmaterially false. (h) If the performance of Lessee's obliga ons under this Lease is guaranteed: (i) the death of a Guarantor, (ii) the termina on of a Guarantor's liability withrespect to this Lease otherthan in accordance withthe terms of such guaranty,(iii) a Guarantor'sbecoming insolventor the subject of a bankruptcy ﬁling,(iv) a Guarantor's refusal to honor the guaranty, or (v) a Guarantor's breach of its guaranty obliga on on an an cipatory basis, and Lessee's failure, within 60 days following wri enno ce of any suchevent,to provide wri en alterna ve assurance or security,which,whencoupled with the then exis ngresources of Lessee,equals or exceeds the combined ﬁnancial resources of Lessee and the Guarantors that existed at the me of execu on of this Lease. 13.2 Remedies. If Lessee fails to perform any of itsaﬃrma ve du es orobliga ons,within10 days a erwri en no ce (or incase of anemergency,without no ce), Lessor may, at its op on, perform such duty or obliga on on Lessee's behalf, including but not limited to the obtaining of reasonably required bonds, insurance policies,or governmental licenses,permitsor approvals. Lessee shall pay toLessor an amount equal to115% of the costs andexpenses incurredby Lessor in such performance upon receipt of an invoice therefor. In the event of a Breach, Lessor may, with or without further no ce or demand, and without limi ng Lessor in the exercise of any rightor remedy which Lessor may have by reason of such Breach: (a) Terminate Lessee's right to possession of the Premises by any lawful means, in which case this Lease shall terminate and Lessee shall immediately surrender possession to Lessor. In such event Lessor shall be en tledto recover from Lessee: (i) the unpaidRent whichhadbeen earnedat the me of termina on; (ii) the worth at the me of award of the amount by which the unpaid rent which would have been earned a er termina on un l the me of award exceeds the amountof such rental loss that the Lessee proves could have been reasonably avoided; (iii) the worth at the me of award of the amount by which the unpaid rent for the balance of the term a er the me of award exceeds the amount of such rental loss that the Lessee proves could be reasonably avoided; and (iv) any other amount necessary to compensate Lessor forall the detrimentproximately caused by the Lessee'sfailure to perform its obliga ons under this Lease or which in the ordinary course of things would be likely to result therefrom, including but not limited to the cost of recovering possession of the Premises, expenses of rele ng, including necessary renova on andaltera on of the Premises,reasonable a orneys'fees,and thatpor on of any leasing commission paidby Lessorin connec onwiththis Lease applicable to the unexpired term of this Lease. The worth at the me of award of the amount referred to in provision (iii) of the immediately preceding sentence shall be computed by discoun ng such amount at the discount rate of the Federal Reserve Bank of the Districtwithin whichthe Premises are located atthe me of award plus one percent. Eﬀorts by Lessor to mi gate damages caused by Lessee's Breach of this Lease shall not waive Lessor's right to recover any damages to whichLessor is otherwise en tled. If termina onof this Lease is obtainedthrough the provisional remedy of unlawful detainer,Lessor shall have the right to recover in such proceeding any unpaid Rentand damagesas are recoverable therein,or Lessor may reserve the rightto recoverall orany part thereof in a separate suit. If a no ce and grace period required under Paragraph 13.1 was not previously given, a no ce to pay rent or quit, or to perform or quit given to Lessee under the unlawful detainerstatute shall also cons tute the no ce requiredby Paragraph 13.1. Insuch case,the applicable grace period required by Paragraph13.1 and the unlawful detainer statute shall run concurrently, and the failure of Lessee to cure the Default within the greater of the two such grace periods shall cons tute both an unlawful detainerand a Breach of thisLease en tlingLessor tothe remediesprovided for in this Lease and/orby said statute. (b) Con nue the Lease and Lessee's right to possession and recover the Rent as it becomes due, in which event Lessee may sublet or assign, subject only to reasonable limita ons. Actsof maintenance,eﬀorts to relet,and/or the appointment of a receiver to protectthe Lessor'sinterests,shall not cons tute a termina on of the Lessee's right to possession. (c) Pursue any otherremedy now or herea er available under the laws orjudicial decisions of the state wherein the Premises are located. The expira on or termina on of this Lease and/or the termina on of Lessee's right to possession shall not relieve Lessee from liability under any indemnity provisions of this Lease as to ma ersoccurring or accruing during the term hereof or by reasonof Lessee'soccupancy of the Premises. 13.3 Inducement Recapture.Any agreement for free or abated rent or other charges, the cost of tenant improvements for Lessee paid for or performed by Lessor,or for the giving orpaying by Lessor toor forLessee of any cash orother bonus,inducementor considera onforLessee's entering into this Lease,all of which concessions are hereina er referred to as "Inducement Provisions," shall be deemed condi oned upon Lessee's full and faithful performance of all of the terms, covenants and condi ons of this Lease. UponBreach of this Lease by Lessee,any such Inducement Provisionshall automa cally be deemeddeleted from this Lease and of no further force or eﬀect, and any rent, other charge, bonus, inducement or considera on theretofore abated, given or paid by Lessor under such an InducementProvision shall be immediately due and payable by Lessee to Lessor,notwithstandingany subsequentcure of said Breach by Lessee. The acceptance by Lessor of rent or the cure of the Breach which ini ated the opera on of this paragraph shall not be deemed a waiver by Lessor of the provisions of this paragraph unlessspeciﬁcally so stated in wri ng by Lessorat the me of such acceptance. 13.4 Late Charges. Lessee hereby acknowledges that late payment by Lessee of Rent will cause Lessor to incur costs not contemplated by this Lease, the exact amountof whichwill be extremely diﬃcult to ascertain. Such costsinclude,but are not limitedto,processing andaccoun ng charges,and late charges which may be imposed upon Lessor by any Lender. Accordingly, if any Rent shall not be received by Lessor within 5 days a er such amount shall be due, then, without any requirement for no ce to Lessee,Lessee shall immediately pay toLessor a oneme late charge equal to 10% of eachsuch overdue amount or $100,whichever is greater. The Par es hereby agree that such late charge represents a fair and reasonable es mate of the costs Lessor will incur by reason of such late payment. Acceptance of such late charge by Lessor shall in noevent cons tute a waiver of Lessee's Defaultor Breach withrespect to suchoverdue amount,nor preventthe exercise of any of the other rights and remedies granted hereunder. In the event that a late charge is payable hereunder, whether or not collected, for 3 consecu ve installmentsof Base Rent,then notwithstanding any provision of thisLease to the contrary,Base Rent shall,at Lessor's op on,become due and payable quarterly in advance. 13.5 Interest. Any monetary payment due Lessorhereunder,other thanlate charges,notreceived by Lessor,whendue shall bear interest from the 31stday a er it was due. The interest ("Interest") charged shall be computed at the rate of 10% per annum but shall not exceed the maximum rate allowed by law. Interest is payable in addi on to the poten al late charge provided for in Paragraph13.4. 13.6 Breach by Lessor. (a)No ce ofBreach. Lessorshall not be deemedin breach of this Lease unless Lessorfails within a reasonable me to perform anobliga on required to be performed by Lessor. For purposes of this Paragraph, a reasonable me shall in no event be less than 30 days a er receipt by Lessor, and any Lender whose name andaddress shall have been furnished to Lessee in wri ng for such purpose,of wri en no ce specifyingwhereinsuch obliga onof Lessorhas not beenperformed; provided, however, that if the nature of Lessor's obliga on is such that more than 30 days are reasonably required for its performance, then Lessor shall not be in breachif performance is commencedwithinsuch 30 day periodand therea erdiligently pursued to comple on. (b)Performance by Lessee on Behalf of Lessor. In the event that neither Lessor nor Lender cures said breach within 30 days a er receipt of said no ce, or if havingcommenced saidcure they donot diligently pursue it to comple on,then Lessee may elect to cure said breach at Lessee's expense and oﬀsetfrom Rent the actual and reasonable cost to perform such cure, provided however, that such oﬀset shall not exceed an amount equal to the greater of one month's Base Rent or the Security Deposit,reserving Lessee's right to seek reimbursement from Lessor forany such expense in excessof such oﬀset. Lessee shall document the cost of said cure and supply said documenta on to Lessor. Docusign Envelope ID: A0CB2D85-2C3B-49BD-91B4-A968AD802F7F ________ ________ ________ ________ INITIALS INITIALS © 2019 AIR CRE. All Rights Reserved. Last Edited: 8/26/2024 2:35 PM LG15.23, Revised 10222020 Page 10 of 15 14.Condemna on.If the Premises or any por on thereof are taken underthe power of eminentdomain or sold under the threatof the exercise of said power (collec vely "Condemna on"), this Lease shall terminate as to the part taken as of the date the condemning authority takes tle or possession, whicheverﬁrst occurs. If more than25% of the Premises,is taken by Condemna on,Lessee may,at Lessee'sop on,to be exercised in wri ng within 10days a er Lessor shall have given Lessee wri en no ce of such taking (or in the absence of such no ce, within 10 days a er the condemning authority shall have taken possession) terminate this Lease as of the date the condemning authority takes such possession. If Lessee does notterminate thisLease in accordance with the foregoing,this Lease shall remain in full force and eﬀect as to the por on of the Premises remaining, except that the Base Rent shall be reduced in propor on to the reduc on in u lity of the Premises caused by suchCondemna on. Condemna on awards and/or payments shall be the property of Lessor,whether suchaward shall be made as compensa onfor diminu on in value of the leasehold, the value of the part taken, or for severance damages; provided, however, that Lessee shall be en tled to any compensa on paid by the condemnor for Lessee'sreloca on expenses,loss of business goodwill and/orTrade Fixtures,without regard towhetheror notthis Lease is terminated pursuant to the provisions of this Paragraph. All Altera ons and U lity Installa ons made to the Premises by Lessee, for purposes of Condemna on only, shall be considered the property of the Lessee and Lessee shall be en tled toany and all compensa on which ispayable therefor. Inthe event that this Lease is not terminated by reason of the Condemna on, Lessor shall repair any damage to the Premises caused by such Condemna on. 15.Brokerage Fees. 15.1 Addi onal Commission. In addi on to the payments owed pursuant to Paragraph 1.9 above, Lessor agrees that: (a) if Lessee exercises any Op on, (b) if Lessee or anyone aﬃliated with Lessee acquires any rights tothe Premisesor other premises owned by Lessor and locatedwithin the same Project,if any,within which the Premises is located, (c) if Lessee remains in possession of the Premises, with the consent of Lessor, a er the expira on of this Lease, or (d) if Base Rent is increased,whether by agreement oropera on of anescala on clause herein,then,Lessor shall pay Brokers a fee in accordance with the fee schedule of the Brokersin eﬀect at the me the Lease was executed. The provisions of this paragraph are intended to supersede the provisions of any earlier agreement to the contrary. 15.2 Assump on of Obliga ons. Any buyer ortransferee of Lessor's interest in this Lease shall be deemed to have assumed Lessor's obliga onhereunder. Brokers shall be third party beneﬁciaries of the provisions of Paragraphs 1.9, 15, 22 and 31. 15.3 Representa ons and Indemni es of BrokerRela onships. Lessee and Lessoreach represent andwarrant tothe other that it hashad no dealings with any person,ﬁrm, broker, agent orﬁnder (other than the Brokers and Agents, if any) in connec on with this Lease, and that no one other than said named Brokers and Agentsis en tledto any commissionor ﬁnder's fee in connec on herewith. Lessee and Lessor do eachhereby agree to indemnify,protect,defend and hold the other harmless from and against liability for compensa on or charges which may be claimed by any such unnamed broker,ﬁnder or other similar party by reason of any dealings or ac ons of the indemnifying Party,including any costs,expenses,a orneys'feesreasonably incurred with respect thereto. 16.Estoppel Cer ﬁcates. (a) Each Party (as "Responding Party") shall within 10 days a er wri en no ce from the other Party (the "Reques ng Party") execute, acknowledge and deliverto the Reques ng Party a statement in wri ng inform similartothe thenmost current "EstoppelCer ﬁcate" form published by AIR CRE,plussuch addi onal informa on, conﬁrma on and/or statements as may be reasonably requested by the Reques ng Party. (b) If the Responding Party shall fail to execute or deliver the Estoppel Cer ﬁcate within such10 day period,the Reques ng Party may execute an Estoppel Cer ﬁcate sta ng that: (i) the Lease is in full force and eﬀect without modiﬁca on except as may be represented by the Reques ng Party, (ii) there are no uncured defaults in the Reques ngParty's performance,and (iii) if Lessor isthe Reques ng Party,not more thanone month's rent hasbeenpaid inadvance. Prospec ve purchasers and encumbrancers may rely upon the Reques ng Party's Estoppel Cer ﬁcate, and the Responding Party shall be estopped from denying the truth of the facts containedin said Cer ﬁcate. In addi on,Lessee acknowledgesthat any failure on its part to provide suchan Estoppel Cer ﬁcate will expose Lessor to risks and poten ally cause Lessor to incur costs not contemplated by this Lease, the extent of which will be extremely diﬃcult to ascertain. Accordingly, should the Lessee fail to execute and/ordeliver a requestedEstoppel Cer ﬁcate in a mely fashion the monthly Base Rent shall be automa cally increased,withoutany requirement for no ce to Lessee, by an amount equal to 10% of the then exis ng Base Rent or $100, whichever is greater for remainder of the Lease. The Par es agree that suchincrease in Base Rent representsfair and reasonable compensa on forthe addi onal risk/costs thatLessor will incur by reasonof Lessee's failure to provide the Estoppel Cer ﬁcate. Such increase in Base Rent shall in no event cons tute a waiver of Lessee's Default or Breach with respect to the failure to provide the Estoppel Cer ﬁcate nor prevent the exercise of any of the otherrightsand remediesgranted hereunder. (c) If Lessor desires to ﬁnance, reﬁnance, or sell the Premises, or any part thereof, Lessee and all Guarantors shall within 10 days a er wri en no ce from Lessor deliverto any poten al lender or purchaser designated by Lessor suchﬁnancial statements as may be reasonably required by suchlender or purchaser, including but not limited to Lessee's ﬁnancial statements for the past 3 years. All such ﬁnancial statements shall be received by Lessor and such lender or purchaser in conﬁdence and shall be used only for the purposes herein set forth. 17. Deﬁni on of Lessor.The term "Lessor" as used herein shall mean the owner or owners at the me in ques on of the fee tle to the Premises, or, if this is a sublease,of the Lessee's interest inthe prior lease. In the event of a transfer of Lessor's tle or interest inthe Premises or this Lease,Lessor shall deliverto the transferee or assignee (in cash or by credit) any unused Security Deposit held by Lessor. Upon such transfer or assignment and delivery of the Security Deposit, as aforesaid,the priorLessor shall be relieved of all liability with respect to the obliga ons and/or covenants under this Lease therea er tobe performed by the Lessor. Subject to the foregoing, the obliga ons and/or covenants in this Lease to be performed by the Lessor shall be binding only upon the Lessor as hereinabove deﬁned. 18.Severability.The invalidity of any provision of thisLease,as determined by a court of competent jurisdic on,shall in no way aﬀect the validity of any other provision hereof. 19.Days.Unless otherwise speciﬁcally indicated to the contrary,the word "days" as used in this Lease shall meanand refer to calendar days. 20. Limita on on Liability.The obliga ons of Lessor under this Lease shall not cons tute personal obliga ons of Lessor, or its partners, members, directors, oﬃcers or shareholders,and Lessee shall look to the Premises,andto noother assets of Lessor,for the sa sfac on of any liability of Lessor withrespect to this Lease,and shall not seek recourse against Lessor's partners, members, directors, oﬃcers or shareholders, or any of their personal assets for such sa sfac on. 21.Time ofEssence.Time is of the essence withrespect tothe performance of all obliga ons to be performed or observed by the Par es underthis Lease. 22. No Prior or Other Agreements; Broker Disclaimer. This Lease contains all agreements between the Par es with respect to any ma er men oned herein, and no other prior orcontemporaneous agreement orunderstanding shall be eﬀec ve. Lessor and Lessee each represents and warrantsto the Brokers that it has made,and is relying solely upon, its own inves ga on as to the nature, quality, character and ﬁnancial responsibility of the other Party to this Lease and as to the use, nature, quality and character of the Premises. Brokers have no responsibility withrespect thereto or with respect toany default or breach hereof by either Party. 23. No ces. 23.1 No ce Requirements. All no cesrequired or permi ed by this Lease orapplicable law shall be in wri ng and may be delivered in person (by hand or by Docusign Envelope ID: A0CB2D85-2C3B-49BD-91B4-A968AD802F7F ________ ________ ________ ________ INITIALS INITIALS © 2019 AIR CRE. All Rights Reserved. Last Edited: 8/26/2024 2:35 PM LG15.23, Revised 10222020 Page 11 of 15 courier) or may be sent by regular,cer ﬁedor registered mail orU.S. Postal Service Express Mail,with postage prepaid,or by facsimile transmission,or by email,and shall be deemed suﬃciently given if served in a manner speciﬁed in this Paragraph 23. The addresses noted adjacent to a Party's signature on this Lease shall be that Party's address for delivery or mailing of no ces. Either Party may by wri en no ce to the other specify a diﬀerent address forno ce,except that upon Lessee's taking possession of the Premises, the Premises shall cons tute Lessee's address for no ce. A copy of all no ces to Lessor shall be concurrently transmi ed to such party or par esat suchaddresses as Lessormay from me to me herea er designate in wri ng. 23.2 Date of No ce. Any no ce sent by registered or cer ﬁed mail, return receipt requested, shall be deemed given on the date of delivery shown on the receipt card,orif no delivery date isshown,the postmark thereon. If sent by regularmail the no ce shall be deemed given 72 hours a erthe same is addressed as required herein and mailed with postage prepaid. No ces delivered by United States Express Mail or overnight courier that guarantees next day delivery shall be deemed given 24 hours a erdelivery of the same to the Postal Service or courier. No cesdelivered by hand,or transmi edby facsimile transmissionor by email shall be deemed delivered upon actual receipt. If no ce is received on a Saturday, Sunday or legal holiday, it shall be deemed received on the next business day. 23.3 Op ons.Notwithstanding the foregoing,in orderto exercise any Op ons (see paragraph39),the No ce must be sent by Cer ﬁed Mail (return receipt requested), Express Mail (signature required), courier (signature required) or some other methodology that provides a receipt establishing the date the no ce was received by the Lessor. 24. Waivers. (a) No waiver by Lessorof the Defaultor Breach of any term,covenant orcondi on hereof by Lessee,shall be deemeda waiver of any other term, covenant or condi on hereof, or of any subsequent Default or Breach by Lessee of the same or of any other term, covenant or condi on hereof. Lessor's consent to, or approval of,any actshall not be deemed to render unnecessary the obtaining of Lessor's consentto,or approval of,any subsequentor similar act by Lessee,orbe construed as the basis of an estoppel to enforce the provision or provisions of this Lease requiring such consent. (b) The acceptance of Rent by Lessor shall not be a waiverof any Default or Breach by Lessee. Any payment by Lessee may be accepted by Lessor on account of monies or damages due Lessor, notwithstanding any qualifying statements or condi ons made by Lessee in connec on therewith, which such statements and/orcondi ons shall be of noforce oreﬀect whatsoever unless speciﬁcally agreed to inwri ng by Lessor at orbefore the me of deposit of suchpayment. (c) THE PARTIES AGREE THAT THE TERMS OF THIS LEASE SHALL GOVERN WITH REGARD TO ALL MATTERS RELATED THERETO AND HEREBY WAIVE THE PROVISIONS OF ANY PRESENT OR FUTURE STATUTE TO THE EXTENT THAT SUCH STATUTE IS INCONSISTENT WITH THIS LEASE. 25. Disclosures Regarding the Nature of a Real Estate Agency Rela onship. (a) When entering into a discussion with a real estate agent regarding a real estate transac on,a Lessoror Lessee should from the outset understand whattype of agency rela onship or representa on it has withthe agentor agents in the transac on. Lessor andLessee acknowledge being advised by the Brokers in this transac on, as follows: (i)Lessor'sAgent. A Lessor's agent undera lis ng agreementwith the Lessoracts as the agent for the Lessor only. A Lessor's agent or subagent has the following aﬃrma ve obliga ons:To the Lessor: A ﬁduciary duty of utmost care, integrity, honesty, and loyalty in dealings with the Lessor.To the Lessee and the Lessor: (a) Diligentexercise of reasonable skills andcare in performance of the agent's du es. (b) A duty of honest and fairdealing and good faith. (c) A duty to disclose all facts known to the agent materially aﬀec ng the value or desirability of the property that are not known to, or within the diligent a en on and observa onof,the Par es. Anagent is not obligated to reveal toeither Party any conﬁden al informa on obtained from the other Party which does not involve the aﬃrma ve du es set forth above. (ii)Lessee'sAgent. An agent can agree to actas agentfor the Lessee only. In these situa ons,the agentis notthe Lessor'sagent,even if by agreement the agent may receive compensa on for services rendered, either in full or in part from the Lessor. An agent ac ng only for a Lessee has the following aﬃrma ve obliga ons.To theLessee: Aﬁduciary duty of utmostcare,integrity,honesty,and loyalty indealings withthe Lessee.To the Lessee and the Lessor: (a) Diligent exercise of reasonable skills and care in performance of the agent's du es. (b) A duty of honest and fair dealing and good faith. (c) A duty to disclose all facts known to the agent materially aﬀec ngthe value or desirability of the property that are not knownto,or within the diligenta en on and observa onof,the Par es. An agent is not obligated to reveal to either Party any conﬁden al informa on obtained from the other Party which does not involve the aﬃrma ve du es set forth above. (iii)Agent RepresenƟng Both Lessor and Lessee. A real estate agent, either ac ng directly or through one or more associate licensees, can legally be the agent of both the Lessor and the Lessee in a transac on,but only with the knowledge andconsent of both the Lessorand the Lessee. In a dual agency situa on, the agent has the following aﬃrma ve obliga ons to both the Lessor and the Lessee: (a) A ﬁduciary duty of utmost care, integrity, honesty and loyalty in the dealings witheither Lessoror the Lessee. (b) Other du esto the Lessor and the Lessee asstated above insubparagraphs (i) or (ii). In represen ngboth Lessorand Lessee,the agent may not, without the express permission of the respec ve Party, disclose to the other Party conﬁden al informa on, including, but not limited to, facts rela ng to either Lessee'sor Lessor's ﬁnancial posi on,mo va ons,bargaining posi on,or other personal informa on that may impactrent,including Lessor's willingness to accept a rent less than the lis ng rent or Lessee's willingness to pay rent greater than the rent oﬀered. The above du es of the agent in a real estate transac on do notrelieve a Lessor or Lessee from the responsibility toprotect theirown interests. Lessor andLessee should carefully read all agreementsto assure that they adequately express their understanding of the transac on. A real estate agent is a person qualiﬁed to advise about real estate. If legal or tax advice is desired, consult a competent professional. Both Lessor and Lessee should strongly consider obtaining tax advice from a competent professional because the federal and state tax consequences of a transac on can be complex and subject to change. (b) Brokershave no responsibility with respect to any default or breach hereof by either Party. The Par es agree thatno lawsuitor other legal proceeding involving any breach of duty, error or omission rela ng to this Lease may be brought against Broker more than one year a er the Start Date and that the liability (including courtcosts and a orneys'fees),of any Brokerwith respect to any such lawsuit and/orlegal proceeding shall not exceedthe fee receivedby such Broker pursuant to this Lease; provided, however, that the foregoing limita on on each Broker's liability shall not be applicable to any gross negligence or willful misconduct of such Broker. (c) Lessor and Lessee agree to iden fy to Brokers as "Conﬁden al" any communica on or informa on given Brokers that is considered by such Party to be conﬁden al. 26. No Right To Holdover. Lessee has no right to retain possession of the Premises or any part thereof beyond the expira on or termina on of this Lease. At or prior to the expira on or termina on of this Lease Lessee shall deliverexclusive possession of the Premisesto Lessor. For purposesof this provision and Paragraph 13.1(a), exclusive possession shall mean that Lessee shall have vacated the Premises, removed all of its personal property therefrom and that the Premises have been returned in the condi on speciﬁed inthis Lease. Inthe event that Lessee does not deliver exclusive possession to Lessor asspeciﬁed above,thenLessor's damages during any holdover period shall be computed at the amount of the Rent (as deﬁned in Paragraph 4.1) due during the last full month before the expira on or termina onof this Lease (disregarding any temporary abatement of Rentthat may have been in eﬀect),but with Base Rent being 150% of the Base Rent payable during such last full month. Nothing contained herein shall be construed as consent by Lessor to any holding over by Lessee. Docusign Envelope ID: A0CB2D85-2C3B-49BD-91B4-A968AD802F7F ________ ________ ________ ________ INITIALS INITIALS © 2019 AIR CRE. All Rights Reserved. Last Edited: 8/26/2024 2:35 PM LG15.23, Revised 10222020 Page 12 of 15 27.Cumula ve Remedies.Noremedy or elec onhereunder shall be deemed exclusive but shall,wherever possible,be cumula ve with all other remedies at lawor in equity. 28.Covenants andCondi ons;Construc onofAgreement.All provisionsof this Lease to be observed orperformedby Lessee are both covenants and condi ons. In construing this Lease, all headings and tles are for the convenience of the Par es only and shall not be considered a part of this Lease. Whenever required by the context,the singularshall include the plural and vice versa. ThisLease shall not be construed as if preparedby one of the Par es,but ratheraccording toitsfair meaning as a whole, as if both Par es had prepared it. 29.Binding Eﬀect;Choice of Law.This Lease shall be binding uponthe Par es,their personal representa ves,successors andassigns andbe governed by the laws of the State in which the Premises are located. Any li ga on between the Par es hereto concerning this Lease shall be ini ated in the county in which the Premises are located. Signatures to this Lease accomplished by means of electronic signature or similartechnology shall be legal and binding. 30. Subordina on; A ornment; NonDisturbance. 30.1 Subordina on. This Lease andany Op on grantedhereby shall be subject and subordinate toany ground lease,mortgage,deedof trust,or other hypotheca on or security device (collec vely, "Security Device"), now or herea er placed upon the Premises, to any and all advances made on the security thereof, andto all renewals,modiﬁca ons,and extensions thereof. Lessee agrees that the holders of any such Security Devices (in this Lease togetherreferred toas "Lender") shall have no liability or obliga on to perform any of the obliga ons of Lessor under this Lease. Any Lender may elect to have this Lease and/or any Op on granted hereby superior tothe lien of its Security Device by giving wri en no ce thereof to Lessee,whereuponthis Lease and such Op ons shall be deemed prior tosuch Security Device, notwithstanding the rela ve dates of the documenta on or recorda on thereof. 30.2 A ornment. In the event that Lessortransfers tle to the Premises,or the Premises are acquiredby another uponthe foreclosure or termina on of a Security Device to which this Lease is subordinated (i) Lessee shall, subject to the nondisturbance provisions of Paragraph 30.3, a orn to such new owner, and upon request,enter into a newlease,containing all of the terms and provisionsof this Lease,with suchnew owner for the remainderof the term hereof,or,atthe elec on of the new owner, this Lease will automa cally become a new lease between Lessee and such new owner, and (ii) Lessor shall therea er be relieved of any further obliga onshereunder and such newowner shall assume all of Lessor's obliga ons,exceptthat suchnew owner shall not: (a) be liable forany actor omission of any prior lessor or with respect to events occurring prior to acquisi on of ownership; (b) be subject to any oﬀsets or defenses which Lessee might have against any prior lessor,(c) be boundby prepayment of more than one month'srent,or (d) be liable forthe return of any security deposit paidto any prior lessorwhich was notpaid or credited to such new owner. 30.3 NonDisturbance. With respect toSecurity Devicesenteredinto by Lessor a erthe execu on of this Lease,Lessee'ssubordina on of this Lease shall be subjectto receivinga commercially reasonable nondisturbance agreement(a "NonDisturbance Agreement") from the Lender which NonDisturbance Agreement provides that Lessee's possession of the Premises, and this Lease, including any op ons to extend the term hereof, will not be disturbed so long as Lessee is not in Breachhereof and a orns to the record owner of the Premises. 30.4 SelfExecu ng. The agreements contained in this Paragraph 30 shall be eﬀec ve without the execu on of any further documents; provided, however, that, upon wri en request from Lessor ora Lender in connec on with a sale,ﬁnancing orreﬁnancing of the Premises,Lessee and Lessorshall execute such further wri ngs as may be reasonably required to separately document any subordina on, a ornment and/or NonDisturbance Agreement provided for herein. 31.A orneys'Fees.If any Party or Broker brings anac on orproceeding involvingthe Premiseswhetherfounded intort,contractor equity,orto declare rights hereunder, the Prevailing Party (as herea er deﬁned) in any such proceeding, ac on, or appeal thereon, shall be en tled to reasonable a orneys' fees. Such fees may be awarded inthe same suit or recovered in a separate suit,whetheror not such ac on orproceeding ispursued to decision or judgment. The term,"Prevailing Party" shall include, without limita on, a Party or Broker who substan ally obtains or defeats the relief sought, as the case may be, whether by compromise, se lement,judgment,orthe abandonment by the otherParty orBroker of its claim or defense. The a orneys'feesaward shall not be computed in accordance with any court fee schedule, but shall be such as to fully reimburse all a orneys' fees reasonably incurred. In addi on, Lessor shall be en tled to a orneys' fees, costs and expenses incurred in the prepara on and service of no ces of Default andconsulta ons in connec on therewith,whether or not a legal ac onis subsequently commenced in connec on with such Default or resul ng Breach ($200 is a reasonable minimum per occurrence for such services and consulta on). 32.Lessor's Access;Showing Premises;Repairs.Lessor and Lessor'sagentsshall have the rightto enterthe Premises atany me,in the case of an emergency,and otherwise at reasonable mes a er reasonable prior no ce for the purpose of showing the same to prospec ve purchasers, lenders, or tenants, and making such altera ons,repairs,improvements or addi ons to the Premises as Lessormay deem necessary or desirable and the erec ng,using andmaintaining of u li es, services, pipes and conduits through the Premises and/or other premises as long as there is no material adverse eﬀect on Lessee's use of the Premises. All such ac vi es shall be without abatementof rent or liability to Lessee. 33. Auc ons.Lessee shall not conduct, nor permit to be conducted, any auc on upon the Premises without Lessor's prior wri en consent. Lessor shall not be obligatedto exercise any standard of reasonableness in determining whether to permitan auc on. 34. Signs.Lessor may place on the Premises ordinary "For Sale" signs at any me and ordinary "For Lease" signs during the last 6 months of the term hereof. Except forordinary "ForSublease"signs,Lessee shall not place any sign upon the Premises without Lessor's prior wri en consent. All signsmustcomply with all Applicable Requirements. 35.Termina on;Merger.Unlessspeciﬁcally stated otherwise in wri ng by Lessor,the voluntary orother surrender of this Lease by Lessee,the mutual termina on or cancella on hereof, or a termina on hereof by Lessor for Breach by Lessee, shall automa cally terminate any sublease or lesser estate in the Premises; provided, however,that Lessormay elect to con nue any one or all exis ng subtenancies. Lessor'sfailure within 10 days following any such event to electto the contrary by wri en no ce to the holder of any such lesser interest, shall cons tute Lessor's elec on to have such event cons tute the termina on of such interest. 36.Consents.All requestsforconsent shall be inwri ng. Except as otherwise provided herein,wherever in thisLease the consent of a Party isrequired to anact by or for the other Party, such consent shall not be unreasonably withheld or delayed. Lessor's actual reasonable costs and expenses (including but not limited to architects',a orneys',engineers'and other consultants'fees) incurredin the considera on of, or response to,a requestby Lessee forany Lessor consent,including but not limited to consents to an assignment, a suble ng or the presence or use of a Hazardous Substance, shall be paid by Lessee upon receipt of an invoice and suppor ng documenta on therefor. Lessor's consent to any act,assignment or suble ng shall not cons tute an acknowledgmentthatno Default or Breachby Lessee of this Lease exists, nor shall such consent be deemed a waiver of any then exis ng Default or Breach, except as may be otherwise speciﬁcally stated in wri ng by Lessor at the me of suchconsent. The failure to specify herein any par cularcondi on to Lessor's consent shall not preclude the imposi on by Lessor atthe me of consent of such further or other condi ons as are then reasonable with reference to the par cular ma er for which consent is being given. In the event that either Party disagrees with any determina onmade by the other hereunder and reasonably requeststhe reasonsfor suchdetermina on,the determining party shall furnish Docusign Envelope ID: A0CB2D85-2C3B-49BD-91B4-A968AD802F7F ________ ________ ________ ________ INITIALS INITIALS © 2019 AIR CRE. All Rights Reserved. Last Edited: 8/26/2024 2:35 PM LG15.23, Revised 10222020 Page 13 of 15 its reasons in wri ng andin reasonable detail within 10business daysfollowing such request. 37. Guarantor. 37.1 Execu on. The Guarantors,if any,shall each execute a guaranty inthe form mostrecently published by AIR CRE. 37.2 Default. It shall cons tute a Default of the Lessee if any Guarantor fails or refuses, upon request to provide: (a) evidence of the execu on of the guaranty, includingthe authority of the party signing on Guarantor's behalf to obligate Guarantor,and inthe case of a corporate Guarantor,a cer ﬁedcopy of a resolu onof its board of directors authorizing the making of such guaranty, (b) current ﬁnancial statements, (c) an Estoppel Cer ﬁcate, or (d) wri en conﬁrma on that the guaranty is s ll in eﬀect. 38. Quiet Possession.Subject to payment by Lessee of the Rent and performance of all of the covenants, condi ons and provisions on Lessee's part to be observed andperformed underthis Lease,Lessee shall have quiet possession and quiet enjoymentof the Premises during the term hereof. 39. Op ons.If Lessee is granted any Op on, as deﬁned below, then the following provisions shall apply. 39.1 Deﬁni on. "Op on" shall mean: (a) the right to extend or reduce the term of or renew this Lease or to extend orreduce the term of or renew any lease that Lessee has on other property of Lessor; (b) the right ofﬁrst refusal orﬁrst oﬀer to lease either the Premises or other property of Lessor; (c) the right to purchase, the right ofﬁrst oﬀerto purchase or the right of ﬁrst refusal to purchase the Premisesor other property of Lessor. 39.2 Op ons Personal To Original Lessee. Any Op on granted to Lessee in this Lease is personal to the original Lessee, and cannot be assigned or exercised by anyone other thansaid original Lessee and only while the original Lessee is in full possession of the Premises and,if requested by Lessor,withLessee cer fying that Lessee has no inten on of therea er assigning or suble ng. 39.3 Mul ple Op ons. In the event thatLessee has any mul ple Op ons toextend orrenew thisLease,a later Op on cannotbe exercisedunlessthe prior Op ons have been validly exercised. 39.4 Eﬀect ofDefaulton Op ons. (a) Lessee shall have no right to exercise an Op on: (i) during the period commencing with the giving of any no ce of Default and con nuing un l said Default is cured,(ii) during the period of me any Rent is unpaid (without regard to whether no ce thereof isgiven Lessee),(iii) during the me Lessee is in Breach of this Lease, or (iv) in the event that Lessee has been given 3 or more no ces of separate Default, whether or not the Defaults are cured, during the 12 month period immediately preceding the exercise of the Op on. (b) The period of me within which an Op on may be exercised shall not be extended or enlarged by reason of Lessee's inability to exercise an Op on because of the provisions of Paragraph 39.4(a). (c) An Op on shall terminate and be of nofurther force or eﬀect,notwithstanding Lessee's due and mely exercise of the Op on,if,a ersuch exercise and prior to the commencement of the extended term or comple on of the purchase, (i) Lessee fails to pay Rent for a period of 30 days a er such Rent becomes due (without any necessity of Lessorto give no ce thereof),or(ii) if Lessee commits a Breach of thisLease. 40. Mul ple Proper es.If the Premises are a part of a group of proper es controlled by Lessor, Lessee agrees that it will abide by and conform to all reasonable rules and regula ons which Lessor may make from me to me forthe management,safety,and care of said proper es,including the care and cleanlinessof the grounds and including the parking, loading and unloading of vehicles, and to cause its employees, suppliers, shippers, customers, contractors and invitees to so abide andconform. Lessee also agrees to pay its fair share of commonexpenses incurredin connec onwith such rules and regula ons. 41. Security Measures.Lessee hereby acknowledges that the Rent payable to Lessor hereunder does not include the cost of guard service or other security measures,and that Lessor shall have no obliga onwhatsoever to provide same. Lessee assumesall responsibility for the protec on of the Premises,Lessee,its agents and invitees and their property from the acts of third par es. 42.Reserva ons. Lessor reservesto itself the right,from me to me,to grant,without the consentor joinderof Lessee,such easements,rights and dedica ons that Lessor deems necessary, and to cause the recorda on of parcel maps and restric ons, so long as such easements, rights, dedica ons, maps and restric ons do notunreasonably interfere with the use of the Premises by Lessee. Lessee agrees tosign any documentsreasonably requestedby Lessor to eﬀectuate any such easement rights, dedica on, map or restric ons. 43.Performance UnderProtest.If at any me a dispute shall arise as toany amountor sum of money to be paid by one Party tothe other under the provisions hereof, the Party against whom the obliga on to pay the money is asserted shall have the right to make payment "under protest" and such payment shall not be regarded as a voluntary payment and there shall survive the right on the part of said Party toins tute suit for recovery of such sum. If it shall be adjudged that there was no legal obliga on on the part of said Party to pay such sum or any part thereof, said Party shall be en tled to recover such sum or so much thereof as it was not legally required to pay. A Party who does not ini ate suitfor the recovery of sums paid "under protest"within 6 months shall be deemed tohave waiveditsright to protest such payment. 44.Authority;Mul ple Par es;Execu on. (a) If either Party hereto is a corpora on, trust, limited liability company, partnership, or similar en ty, each individual execu ng this Lease on behalf of such en ty representsand warrants that he orshe is duly authorized toexecute and deliver thisLease on its behalf. EachParty shall,within 30days a er request, deliver to the other Party sa sfactory evidence of such authority. (b) If this Lease is executed by more than one personor en ty as"Lessee",each such person oren ty shall be jointly andseverally liable hereunder. Itis agreed that any one of the named Lessees shall be empowered to execute any amendment to this Lease, or other document ancillary thereto and bind all of the named Lessees,andLessor may rely on the same asif all of the named Lessees had executed such document. (c) This Lease may be executed by the Par es in counterparts, each of which shall be deemed an original and all of which together shall cons tute one andthe same instrument. 45. Conﬂict.Any conﬂict between the printed provisions of this Lease and the typewri en or handwri en provisions shall be controlled by the typewri en or handwri en provisions. 46. Oﬀer. Prepara on of this Lease by either Party or their agent and submission of same to the other Party shall not be deemed an oﬀer to lease to the other Party. ThisLease isnot intended tobe binding un l executedanddelivered by all Par eshereto. 47. Amendments.This Lease may be modiﬁed only in wri ng, signed by the Par es in interest at the me of the modiﬁca on. As long as they do not materially change Lessee's obliga ons hereunder,Lessee agrees to make such reasonable nonmonetary modiﬁca ons tothis Lease as may be reasonably required by a Lender in connec on with the obtaining of normal ﬁnancing or reﬁnancing of the Premises. Docusign Envelope ID: A0CB2D85-2C3B-49BD-91B4-A968AD802F7F ________ ________ ________ ________ INITIALS INITIALS © 2019 AIR CRE. All Rights Reserved. Last Edited: 8/26/2024 2:35 PM LG15.23, Revised 10222020 Page 14 of 15 48.Waiver ofJury Trial.THE PARTIES HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO TRIAL BY JURY INANY ACTIONOR PROCEEDING INVOLVING THE PROPERTY OR ARISING OUT OF THIS AGREEMENT. 49. Arbitra on of Disputes.An Addendum requiring the Arbitra on of all disputes between the Par es and/or Brokers arising out of this Lease is is not a ached to this Lease. 50.Accessibility;Americans with Disabili es Act. (a) The Premises: have not undergone an inspec on by a Cer ﬁed Access Specialist (CASp). Note: A Cer ﬁed Access Specialist (CASp) can inspect the subject premises and determine whether the subject premises comply with all of the applicable construc onrelated accessibility standards under state law. Although state law does not require a CASp inspec on of the subject premises,the commercial property owneror lessor may not prohibit the lessee ortenant from obtaininga CASp inspec on of the subject premises for the occupancy or poten al occupancy of the lessee or tenant, if requested by the lessee or tenant. The par es shall mutually agree on the arrangementsfor the me and manner of the CASp inspec on,the payment of the fee for the CASp inspec on,andthe costof making any repairs necessary to correct viola ons of construc onrelated accessibility standards within the premises. have undergone an inspec on by a Cer ﬁed Access Specialist (CASp) and it was determined that the Premises met all applicable construc onrelated accessibility standards pursuant to California Civil Code §55.51 et seq.Lessee acknowledges that it received a copy of the inspec on report at least 48 hours prior to execu ng this Lease and agrees to keep suchreport conﬁden al. have undergone an inspec on by a Cer ﬁed Access Specialist (CASp) and it was determined that the Premises did not meet all applicable construc onrelated accessibility standards pursuant to California Civil Code §55.51 et seq. Lessee acknowledges that it receiveda copy of the inspec on report at least48 hours prior to execu ng this Lease and agrees to keep such report conﬁden al except as necessary to complete repairs and correc ons of viola ons of construc on related accessibility standards. In the event that the Premises have been issued an inspec on report by a CASp the Lessor shall provide a copy of the disability access inspec on cer ﬁcate to Lessee within7 days of the execu onof thisLease. (b) Since compliance with the Americans with Disabili es Act (ADA) and other state and local accessibility statutes are dependent upon Lessee's speciﬁc use of the Premises,Lessormakesno warranty or representa onas to whether or not the Premises comply with ADA or any similarlegisla on. In the event that Lessee's use of the Premises requires modiﬁca ons or addi ons to the Premises in order to be in compliance with ADA or other accessibility statutes, Lessee agrees to make any such necessary modiﬁca ons and/oraddi ons at Lessee's expense. LESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM AND PROVISION CONTAINED HEREIN, AND BY THE EXECUTION OF THIS LEASE SHOW THEIRINFORMED AND VOLUNTARYCONSENT THERETO.THE PARTIES HEREBY AGREE THAT, AT THE TIME THIS LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE COMMERCIALLY REASONABLE AND EFFECTUATE THE INTENT AND PURPOSE OF LESSOR AND LESSEE WITH RESPECT TO THE PREMISES. ATTENTION:NO REPRESENTATION OR RECOMMENDATIONIS MADE BY AIRCRE ORBYANY BROKERAS TO THE LEGAL SUFFICIENCY, LEGAL EFFECT, ORTAX CONSEQUENCES OF THIS LEASE OR THE TRANSACTION TO WHICH IT RELATES. THE PARTIES ARE URGED TO: 1.SEEKADVICE OF COUNSELAS TO THE LEGALAND TAX CONSEQUENCES OF THIS LEASE. 2. RETAIN APPROPRIATE CONSULTANTS TO REVIEW AND INVESTIGATE THE CONDITION OF THE PREMISES. SAID INVESTIGATION SHOULD INCLUDE BUT NOT BE LIMITED TO:THE POSSIBLE PRESENCE OF HAZARDOUS SUBSTANCES, THE ZONING OF THE PREMISES, THE CONDITION AND THE SUITABILITY OF THE PREMISES FOR LESSEE'S INTENDED USE. WARNING:IF THE PREMISES ARE LOCATED IN A STATE OTHER THAN CALIFORNIA, CERTAIN PROVISIONS OF THE LEASE MAY NEED TO BE REVISED TO COMPLYWITH THE LAWS OF THE STATE IN WHICH THE PREMISES ARE LOCATED. The par es hereto have executedthis Lease atthe place and on the dates speciﬁedabove theirrespec ve signatures. Executed at: On: By LESSOR: Steve Nash and Dennis Ryan By: Name Printed:Steve Nash Title: Phone: Fax: Email: By: Name Printed:Dennis Ryan Title: Phone: Fax: Email: Address: Executed at: On: By LESSEE: City of Palo Alto By: Name Printed:Ed Shikada Title:City Manager Phone: Fax: Email: By: Name Printed:Caio Arellano Title:Chief Assistant City Attorney Phone: Fax: Email: Address: Docusign Envelope ID: A0CB2D85-2C3B-49BD-91B4-A968AD802F7F 8/27/2024 ________ ________ ________ ________ INITIALS INITIALS © 2019 AIR CRE. All Rights Reserved. Last Edited: 8/26/2024 2:35 PM LG15.23, Revised 10222020 Page 15 of 15 Federal ID No.: Federal ID No.: BROKER Avison Young A n:Brian Mason Title:Principal Address:229 Forest Avenue, Suite 200, Palo Alto, CA 94301 Phone:650-425-6420 Fax: Email:brian.mason@avisonyoung.com Federal ID No.:32-0372343 Broker DRE License #:01914446 Agent DRE License #:01229363 BROKER A n: Title: Address: Phone: Fax: Email: Federal ID No.: Broker DRE License #: Agent DRE License #: AIR CRE * h ps://www.aircre.com * 2136878777 * contracts@aircre.com NOTICE:No part ofthese works may be reproducedin anyform without permissionin wri ng. Docusign Envelope ID: A0CB2D85-2C3B-49BD-91B4-A968AD802F7F ________ ________ ________ ________ INITIALS INITIALS © 2017 AIR CRE. All Rights Reserved. Last Edited: 8/26/2024 2:35 PM ADD1.03, Revised 10222020 Page 1 of 2 ADDENDUM TO LEASE Date:July 31, 2024 By and Between Lessor:Steve Nash and Dennis Ryan Lessee:City of Palo Alto Property Address:975 Terra Bella Avenue, Mountain View, CA 94043 (street address,city,state,zip) Paragraph: In the event of any conﬂict between the provisions of this Addendum and the printed provisions of the Lease, this Addendum shall control. AIR CRE * h ps://www.aircre.com * 2136878777 * contracts@aircre.com NOTICE: No part of these works may be reproduced in any form without permission in wri ng. 51. RENEWAL OPTION: Tenant shall have one (1) option to renew the Lease for a period of four (4) months at the same Rent. Tenant must give written notice no later than 15 days from the Lease Expiration Date. 52. LANDLORD TENANT IMPROVEMENTS: Landlord at Landlord’s sole cost and expense shall deliver the property cleaned, all materials removed, all utilities and affixed equipment in good condition and the building water-tight and in good condition. 53. TENANT IMPROVEMENTS: Tenant at Tenant’s sole cost and expense shall have the ability to make cosmetic, non-structural alterations to the inside of the Premises that do not affect the building systems. 54. SIGNS: Lessee shall install Lessee’s signage on the exterior of the Building and monument at Lessee’s expense. This shall be subject to the Owners sign policy and the City of Mountain View. 55.PARKING: Lessee shall be able to park on the street as available and shall have the exclusive use of the secure yard and driveway. 56. FIRST RIGHT OF REFUSAL: Lessee shall have the option at any time during the term or any extension thereof to exercise its right to purchase the property at a mutually agreeable price. If Lessor shall have received an acceptable bona fide offer to purchase the property during the lease term or any extension thereof Lessor shall give written notice of its intent to sell to Lessee, together with an executed copy of the offer setting forth all of the terms of the proposed purchase and identifying the prospective purchaser. Lessee shall then have an option exercisable in writing for a period of ten (10) days to purchase the property from Lessor on the same terms and conditions as set forth in the offer. 57. SELF-INSURED: Lessee is self-insured. Lessee shall deliver evidence of self-insured coverage for general liability, bodily injury, and property damage, and Landlord agrees to accept such evidence in lieu of the policies required by Paragraph 8(a). Docusign Envelope ID: A0CB2D85-2C3B-49BD-91B4-A968AD802F7F ________ ________ ________ ________ INITIALS INITIALS © 2017 AIR CRE. All Rights Reserved. Last Edited: 8/26/2024 2:35 PM ADD1.03, Revised 10222020 Page 2 of 2 58. INDEMNITY: To the extent permitted by law, Lessor agrees to protect, defend, hold harmless and indemnify City, its City Council, commissions, officers, agents, volunteers, and employees from and against any claim, injury, liability, loss, cost, and/or expense or damage, however same may be caused, including all costs and reasonable attorney's fees in providing a defense to any claim arising therefrom for which City shall become legally liable arising from Lessor's sole or active negligence with respect to or in any way connected with this Lease. Lessee shall give the (lessor or owner) immediate notice of any claim or liability hereby indemnified against. This indemnity shall be in addition to the Hazardous Materials indemnity contained in this Lease and shall survive shall survive the expiration of or early termination of the Lease Term. 59. DISPUTE RESOLUTION: 59.1 Unless otherwise mutually agreed to, any controversies between Lessee and Lessor regarding the construction or application of this Lease, and claims arising out of this Lease or its breach shall be submitted to mediation within thirty (30) days of the written request of one Party after the service of that request on the other Party. 59.2 The Parties may agree on one mediator. If they cannot agree on one mediator, the Party demanding mediation shall request the Superior Court of Santa Clara County to appoint a mediator. The mediation meeting shall not exceed one day (eight (8) hours). The Parties may agree to extend the time allowed for mediation under this Lease. 59.3 The costs of mediation shall be borne by the Parties equally. 59.4 Mediation under this section is a condition precedent to filing an action in any court. In the event of litigation arising out of any dispute related to this Lease, the costs of mediation shall not be recoverable by the Prevailing Party as part of any attorneys’ fees awarded under Paragraph 31 of this Lease. Docusign Envelope ID: A0CB2D85-2C3B-49BD-91B4-A968AD802F7F ________ ________ ________ ________ INITIALS INITIALS © 2019 AIR CRE. All Rights Reserved. Last Edited: 8/26/2024 2:35 PM AD3.01, Revised 10222020 Page 1 of 4 DISCLOSURE REGARDING REAL ESTATE AGENCY RELATIONSHIP (As required bythe CivilCode) When you enter into a discussion with a real estate agent regarding a real estate transac on, you should from the outset understand what type of agency rela onship or representa on you wish tohave with the agent inthe transac on. SELLER'S AGENT A Seller's agent under a lis ngagreement with the Seller acts asthe agent forthe Seller only. A Seller's agentor a subagent of that agent has the following aﬃrma ve obliga ons: Tothe Seller: A ﬁduciary duty of utmost care,integrity,honesty and loyalty in dealingswith the Seller. To the Buyer and the Seller: (a) Diligent exercise of reasonable skill and care in performance of the agent's du es. (b) A duty of honest and fair dealing and good faith. (c) A duty to disclose all facts known tothe agentmaterially aﬀec ngthe value or desirability of the property that are not knownto,or within the diligent a en on and observa on of, the par es. An agent is not obligated toreveal to either party any conﬁden al informa onobtained from the otherparty that does not involve the aﬃrma ve du es set forth above. BUYER'S AGENT A Buyer's agent can, with a Buyer's consent, agree to act as agent for the Buyer only. In these situa ons, the agent is not the Seller's agent, even if by agreement the agentmay receive compensa on forservices rendered,either in full or in part from the Seller. An agent ac ngonly for a Buyer hasthe following aﬃrma ve obliga ons: Tothe Buyer: A ﬁduciary duty of utmostcare,integrity,honesty andloyalty in dealings with the Buyer. To the Buyer and the Seller: (a) Diligent exercise of reasonable skill and care in performance of the agent's du es. (b) A duty of honest and fair dealing and good faith. (c) A duty to disclose all facts known tothe agentmaterially aﬀec ngthe value or desirability of the property that are not knownto,or within the diligent a en on and observa on of, the par es. An agent is not obligated toreveal to either party any conﬁden al informa onobtained from the otherparty that does not involve the aﬃrma ve du es set forth above. AGENT REPRESENTING BOTH SELLER AND BUYER A real estate agent, either ac ng directly or through one or more salesperson and broker associates, can legally be the agent of both the Seller and the Buyer in a transac on,but only with the knowledge and consent of both the Sellerandthe Buyer. In a dual agency situa on, the agent has the following aﬃrma ve obliga ons to both the Seller and the Buyer: (a) A ﬁduciary duty of utmostcare,integrity,honesty and loyalty in the dealings witheither the Seller or the Buyer. (b) Other du es to the Seller and the Buyer as stated above in their respec ve sec ons. Inrepresen ng bothSeller and Buyer,a dual agent may not,without the express permissionof the respec ve party,disclose to the otherparty conﬁden al informa on, including, but not limited to, facts rela ng to either the Buyer's or Seller's ﬁnancial posi on, mo va ons, bargaining posi on, or other personal informa onthat may impact price,includingthe Seller's willingness to accept a price less thanthe lis ngprice or the Buyer's willingnessto pay a price greaterthan the price oﬀered. SELLER AND BUYER RESPONSIBILITIES Either the purchase agreement or a separate document will contain a conﬁrma on of which agent is represen ng you and whether that agent is represen ng you exclusively in the transac on orac ng as a dual agent. Please pay a en on tothat conﬁrma ontomake sure it accurately reﬂects your understanding of youragent's role. The above du es of the agent in a real estate transac on do not relieve a Seller or Buyer from the responsibility to protect his or her own interests. You should carefully read all agreements to assure that they adequately express your understanding of the transac on. A real estate agentis a person qualiﬁed toadvise about real estate. If legal or tax advice is desired, consult a competent professional. If you are a Buyer, you have the duty to exercise reasonable care to protect yourself, includingas to those factsabout the property which are known to youor within your diligenta en on and observa on. BothSellers and Buyers should strongly consider obtaining tax advice from a competent professional because the federal and state tax consequences of a transac on can be complex and subject to change. Throughout your real property transac on you may receive more than one disclosure form, depending upon the number of agents assis ng in the transac on. The lawrequires eachagent with whom you have more than a casual rela onship to present you with thisdisclosure form. You shouldread itscontents each me it is presented to you, considering the rela onship between you and the real estate agent in your speciﬁc transac on.This disclosure form includes the provisions of SecƟons 2079.13 to 2079.24, inclusive, ofthe Civil Code set forth on page 2.Read it carefully.I/WE ACKNOWLEDGE RECEIPT OFA COPY OFTHIS DISCLOSURE AND THE PORTIONS OFTHE CIVIL CODE PRINTED ONTHE BACK (OR A SEPARATE PAGE). Buyer Seller Lessor Lessee Date: Buyer Seller Lessor Lessee Date: Agent:Avison Young DRE Lic. #:01914446 Real Estate Broker (Firm) By:Brian Mason DRE Lic. #:01229363 Date: (Salesperson or BrokerAssociate) Docusign Envelope ID: A0CB2D85-2C3B-49BD-91B4-A968AD802F7F ________ ________ ________ ________ INITIALS INITIALS © 2019 AIR CRE. All Rights Reserved. Last Edited: 8/26/2024 2:35 PM AD3.01, Revised 10222020 Page 2 of 4 THIS FORM HAS BEEN PREPARED BY AIR CRE. NOREPRESENTATION IS MADE AS TO THE LEGAL VALIDITY OR ADEQUACY OF THIS FORM FOR ANY SPECIFIC TRANSACTION. PLEASE SEEK LEGAL COUNSEL AS TO THE APPROPRIATENESS OF THIS FORM. Docusign Envelope ID: A0CB2D85-2C3B-49BD-91B4-A968AD802F7F ________ ________ ________ ________ INITIALS INITIALS © 2019 AIR CRE. All Rights Reserved. Last Edited: 8/26/2024 2:35 PM AD3.01, Revised 10222020 Page 3 of 4 DISCLOSURE REGARDINGREAL ESTATE AGENCY RELATIONSHIP CIVIL CODE SECTIONS 2079.13 THROUGH 2079.24 (2079.16 APPEARS ON THE FRONT) 2079.13. As used in Sec ons 2079.7 and 2079.14 to 2079.24, inclusive, the following terms have the following meanings: (a)“Agent” means a person ac ng under provisions of Title 9 (commencing with Sec on 2295) in a real property transac on,and includes a person who is licensedas a real estate broker under Chapter 3 (commencing with Sec on 10130) of Part 1 of Division 4 of the Business and Professions Code, and under whose license a lis ng is executed or an oﬀer to purchase is obtained. The agent in the real property transac on bears responsibility for that agent's salespersons or broker associates who perform as agents of the agent. When a salesperson or broker associate owes a duty to any principal, or to any buyer or seller who is not a principal, in a real property transac on,that duty is equivalent to the duty owed to that party by the broker for whom the salesperson or broker associate func ons.(b)“Buyer” means a transferee in a real property transac on, and includes a person who executes an oﬀer to purchase real property from a seller through an agent, or who seeks the services of anagent in more than a casual,transitory,orpreliminary manner,with the object of entering into a real property transac on. “Buyer” includes vendee or lessee of real property.(c)“Commercial real property” means all real property in the state, except (1) singlefamily residen al real property, (2) dwelling units made subject to Chapter 2 (commencing with Sec on 1940) of Title 5,(3) a mobile home,as deﬁned in Sec on 798.3,(4) vacant land,or (5) a recrea onal vehicle,as deﬁned in Sec on 799.29.(d)“Dual agent” means an agent ac ng,either directly or through a salesperson or broker associate,as agent for both the seller and the buyer in a real property transac on.(e)“Lis ng agreement” means a wri en contract between a seller of real property and an agent, by which the agent has been authorized to sell the real property or to ﬁnd orobtain a buyer,including rendering other services for which a real estate license is required to the seller pursuant to the terms of the agreement.(f)“Seller's agent” means a person who has obtained a lis ng of real property to act as an agent for compensa on.(g)“Lis ng price” is the amount expressed in dollars speciﬁed in the lis ng for which the seller is willing to sell the real property through the seller's agent.(h)“Oﬀering price” is the amount expressed in dollars speciﬁed in an oﬀer to purchase for which the buyer is willing to buy the real property.(i)“Oﬀer to purchase” means a wri en contract executed by a buyer ac ng through a buyer's agent that becomes the contract for the sale of the real property upon acceptance by the seller.(j)“Real property” means any estate speciﬁed by subdivision (1) or (2) of Sec on 761 in property, and includes (1) singlefamily residen al property, (2) mulunit residen al property with more than four dwelling units,(3) commercial real property,(4) vacant land,(5) a ground lease coupled with improvements,or (6) a manufactured home as deﬁned in Sec on 18007 of the Health and Safety Code, or a mobile home as deﬁned in Sec on 18008 of the Health and Safety Code, when oﬀered for sale or sold through an agentpursuant to the authority contained in Sec on 10131.6 of the Business and Professions Code.(k)“Real property transac on” means a transac onfor the sale of real property in which an agent is retained by a buyer, seller, or both a buyer and seller to act in that transac on, and includes a lis ng or an oﬀer to purchase.(l)“Sell,” “sale,” or “sold” refers to a transac on for the transfer of real property from the seller to the buyer and includes exchanges of real property between the seller and buyer, transac ons for the crea on of a real property sales contract within the meaning of Sec on 2985, and transac ons for the crea on of a leasehold exceeding one year'sdura on.(m)“Seller” means the transferor in a real property transac on and includes an ownerwho lists real property with an agent, whether or not a transfer results, or who receives an oﬀer to purchase real property of which he or she is the owner from an agent on behalf of another. “Seller” includes both a vendor and a lessor of real property.(n)“Buyer'sagent” means anagent whorepresentsa buyer in a real property transac on. 2079.14. A seller's agent and buyer's agent shall provide the seller and buyer in a real property transac on with a copy of the disclosure form speciﬁed in Sec on 2079.16, and shall obtain a signed acknowledgment of receipt from that seller and buyer, except as provided in Sec on 2079.15, as follows:(a)The seller's agent, if any,shall provide the disclosure form to the seller priorto entering into the lis ng agreement.(b)The buyer's agent shall provide the disclosure form tothe buyer as soon as prac cable prior to execu on of the buyer's oﬀer to purchase. If the oﬀer to purchase is not prepared by the buyer's agent, the buyer's agent shall present the disclosure form to the buyernot later thanthe nextbusiness day a erreceiving the oﬀer topurchase from the buyer. 2079.15.In any circumstance in which the seller or buyer refuses to sign an acknowledgment of receipt pursuant to Sec on 2079.14, the agent shall set forth, sign, anddate a wri en declara onof the factsof the refusal. 2079.16 Reproduced on Page 1 of this AD form. 2079.17(a)As soon as prac cable, the buyer's agent shall disclose to the buyer and seller whether the agent is ac ng in the real property transac on as the buyer's agent,or as a dual agent represen ng both the buyer and the seller. This rela onship shall be conﬁrmed in the contract to purchase and sell real property or in a separate wri ng executed or acknowledged by the seller, the buyer, and the buyer's agent prior to or coincident with execu on of that contract by the buyer and the seller,respec vely.(b)As soon as prac cable,the seller's agent shall disclose to the seller whether the seller's agent is ac ng in the real property transac on as the seller's agent, or as a dual agent represen ng both the buyer and seller. This rela onship shall be conﬁrmed in the contract to purchase and sell real property or in a separate wri ng executed or acknowledged by the sellerand the seller's agentprior to orcoincident withthe execu on of that contract by the seller. (C)CONFIRMATION: The following agency rela onships are conﬁrmed for this transac on. Seller's Brokerage Firm DO NOT COMPLETE, SAMPLE ONLY License Number Is the broker of (check one):the seller; or both the buyer and seller. (dual agent) Seller's Agent DO NOT COMPLETE, SAMPLE ONLY License Number Is (check one):the Seller's Agent. (salesperson or broker associate); or both the Buyer's Agent and the Seller's Agent. (dual agent) Buyer's Brokerage Firm DO NOT COMPLETE, SAMPLE ONLY License Number Is the broker of (check one):the buyer; or both the buyer and seller. (dual agent) Buyer's Agent DO NOT COMPLETE, SAMPLE ONLY License Number Is (check one):the Buyer's Agent. (salesperson or broker associate); or both the Buyer's Agent and the Seller's Agent. (dual agent) (d)The disclosures and conﬁrma on required by this sec on shall be in addi on to the disclosure required by Sec on 2079.14. An agent's duty to provide disclosure andconﬁrma on of representa on inthissec on may be performed by a real estate salespersonor brokerassociate aﬃliated withthat broker. 2079.18(Repealed pursuant to AB1289, 201718 California Legisla ve session) 2079.19The payment of compensa on or the obliga on to pay compensa on to an agent by the seller or buyer is not necessarily determina ve of a par cular agency rela onship between an agent andthe seller or buyer. A lis ng agentanda sellingagent may agree to share any compensa on orcommission paid,or any right to any compensa on or commission for which an obliga on arises as the result of a real estate transac on, and the terms of any such agreement shall not necessarily be determina ve of a par cular rela onship. 2079.20Nothing inthis ar cle prevents an agentfrom selec ng,as a condi on of the agent's employment,a speciﬁc form of agency rela onship not speciﬁcally Docusign Envelope ID: A0CB2D85-2C3B-49BD-91B4-A968AD802F7F ________ ________ ________ ________ INITIALS INITIALS © 2019 AIR CRE. All Rights Reserved. Last Edited: 8/26/2024 2:35 PM AD3.01, Revised 10222020 Page 4 of 4 prohibited by thisar cle if the requirements of Sec on 2079.14and Sec on2079.17 are compliedwith. 2079.21(a)A dual agent may not,withoutthe express permission of the seller,disclose to the buyer any conﬁden al informa on obtained from the seller.(b)A dual agent may not, without the express permission of the buyer, disclose to the seller any conﬁden al informa on obtained from the buyer.(c)“Conﬁden al informa on” meansfacts rela ngto the client's ﬁnancial posi on,mo va ons,bargainingposi on,orother personal informa on that may impactprice,suchas the seller is willing to accept a price less than the lis ng price or the buyer is willing to pay a price greater than the price oﬀered.(d)This sec on does not alter in any way the duty or responsibility of a dual agent toany principal with respect to conﬁden al informa onother than price. 2079.22Nothing in this ar cle precludes a seller's agent from also being a buyer's agent. If a seller or buyer in a transac on chooses to not be represented by an agent,that does not,of itself,make that agent a dual agent. 2079.23 (a)A contract betweenthe principal andagent may be modiﬁedor altered tochange the agency rela onship atany me before the performance of the act which is the object of the agency with the wri en consent of the par es to the agency rela onship.(b)A lender or an auc on company retained by a lender to control aspects of a transac on of real property subject to this part,including valida ng the sales price,shall not require,as a condi on of receiving the lender's approval of the transac on, the homeowner or lis ng agent to defend or indemnify the lender or auc on company from any liability alleged to result from the ac ons of the lenderor auc oncompany. Any clause,provision,covenant,or agreement purpor ngto impose an obliga on todefend or indemnify a lenderor anauc on company in viola on of this subdivision is against public policy, void, and unenforceable. 2079.24Nothing inthis ar cle shall be construed to eitherdiminish the duty of disclosure owed buyersand sellers by agents andtheirassociate licensees,subagents, and employees or to relieve agents and their associate licensees, subagents, and employees from liability for their conduct in connec on with acts governed by this ar cle or forany breach of a ﬁduciary duty ora duty of disclosure. AIR CRE * h ps://www.aircre.com * 2136878777 * contracts@aircre.com NOTICE:No part ofthese works may be reproducedin anyform without permissionin wri ng. Docusign Envelope ID: A0CB2D85-2C3B-49BD-91B4-A968AD802F7F 975 Terra Bella Ave Mountain View, CA 4 Property Aerial Terra Bella AveTerra Bella Ave San R a f a e l A v e San R a f a e l A v e San L e a n d r o A v e San L e a n d r o A v e Dear Mayor and Council Members, On behalf of City Manager Ed Shikada, please see staff responses below for questions from Council Member Tanaka on the Monday, October 7 Council Meeting. Item 9: Authorize the City Manager or their Designee to Exercise the Option to Renew the Lease Between the City of Palo Alto and Steve Nash and Dennis Ryan for 4 Months at 975 Terra Bella Ave in Mountain View at a Monthly Rent of $35,587.95 for a Total Not-to-Exceed of $213,527.70 through February 28, 2025; Direct Staff to Explore Purchase of Property to Meet the Future Needs of Grid Modernization and Other Capital Projects; and Approval of an Amendment to Fiscal Year 2025 Budget Appropriation in the Electric Fund; CEQA Status – Categorically Exempt; Sec. 15301. 1. Given the current volatility of real estate prices in the Bay Area, has the city conducted a thorough risk assessment of how delaying the purchase of 975 Terra Bella could result in significantly higher future costs or the potential loss of the property to another buyer? Furthermore, how does this short-term lease renewal align with our long-term financial strategy when property values are predicted to increase, possibly outpacing the savings from leasing and ultimately forcing the city into a more expensive lease or purchase arrangement later? Staff response: 975 Terra Bella has been on the market for over 2 years. Under the lease agreement, the City has the option to purchase the property at a mutually agreeable price. The City also has the first right of refusal if another buyer offers to purchase the property, the City has 10 days to purchase the property under the same terms. The short term lease renewal will allow Staff the time necessary to perform property appraisal, construction cost estimate to make the office ADA compliant, negotiate the purchasing cost and seek council approval on the purchase amount and evaluate other commercial properties. 2. With property values in Mountain View rising unpredictably, how has the city factored in the financial risks of delaying a decision to purchase 975 Terra Bella? Specifically, what contingency measures are in place if property prices rise beyond our current projections, and how would such an increase affect our overall budget and operational costs? Is the city prepared for the potential of overpaying for a property that could have been secured at a lower cost, or worse, losing access to this critical storage site? Staff response: Staff needs time to perform our due diligence before we make a purchase offer. Staff has hired land appraisers to estimate the as-is market value of the property. The existing offices on the property have been deemed as non-ADA compliant and non- permissible for use. Staff needs to obtain construction cost estimates for rehabilitation or building of a new office. Staff has factored in the purchase of 975 Terra Bella into the FY 2026 Electric budget and rate forecasts. Staff is also considering including the property purchase as part of the grid modernization debt financing plan. 3. The staff report mentions the risk of increased contractor pass-through costs if the city does not secure a permanent laydown yard but fails to detail any strategies to mitigate these rising costs during the lease period. How does the city plan to manage the financial impact of this ongoing reliance on external contractors, and what steps are being taken to reduce the long-term operational inefficiencies that come with outsourcing storage needs rather than securing a stable, owned facility? Staff response: The Geng Road site has been an ideal laydown yard due to its proximity to the MSC and low leasing costs. Staff has been exploring a permanent laydown yard for the past several years including rezoning unused open space land and building a laydown yard at a substation. Since vacant commercial properties in Palo Alto are scarce and expensive, staff is also evaluating properties outside of Palo Alto. Item 15: Approval of Amendment via Change Order to Contract Number C22183580 with MP Nexlevel of California, Inc. in the Amount of $1,650,000 for the Fiber-to-the-Premise (FTTP) Pilot Project inclusive of $150,000 in contingency funding for a Revised Total Not-to-Exceed Amount of $11,347,390 From March 21, 2022 Through April 30, 2025; Authorize the City Manager to Execute Change Orders Not-to-Exceed $150,000 for FTTP ; CEQA Status – Council action on this item is within the scope of the Final Initial Study and Mitigated Negative Declaration (IS/MND) for the Fiber-to-the-Premises Project, adopted on June 17, 2024. 1. Considering the upfront financial commitment, what specific data or projections demonstrate the expected adoption rate of this fiber network, and how has the city calculated the break-even point? If the adoption rate is significantly lower than anticipated, what alternative strategies are in place to ensure this investment doesn't become a long-term financial burden on the city budget? Staff response: Based on the citywide broadband survey, the projected take rate or subscription of Palo Alto Fiber ISP is between 37% - 42%. The minimum take rate for revenues to exceed expenses is between 25% - 30%. Council adopted a phased approach using fiber reserves without debt financing. The pilot allows the City to build expertise on construction and providing the new ISP service. We have the flexibility to modify our approach in subsequent phases. If the adoption rate is significantly low, the City can invest more in sales and marketing; improve time to market; rescope the buildout; and/or reduce planned expenditures. 2. Given the rapid advancements in technologies like 5G and satellite internet, how has the city ensured that this investment in fiber will remain relevant and competitive over the next 10 to 20 years? What provisions have been included to allow the city to pivot or adapt if future technologies outpace fiber in terms of cost, speed, or reliability, preventing this project from becoming outdated? Staff response: The City is building a new fiber backbone with 432 counts of fiber compared to 144 count in the existing backbone. Of the 432 fiber count, we have approximately 150 spare fiber for future City needs or leasing services. The fiber network architecture is scalable requiring only equipment upgrades. 3. While the focus has been on the initial construction costs, what specific projections have been made regarding long-term maintenance and operational expenses for the fiber network? How will the city ensure that these ongoing costs are covered, especially if revenue from subscriptions falls short of expectations? What is the plan if the city is forced to allocate additional funds in the future to sustain this network? Staff response: The City has developed a 10 year proforma which includes operating, maintenance, and replacement costs (i.e. staffing, data center, vehicle, software, legal, marketing, administrative). With the phased construction and outsourcing approach, the City has the flexibility to accelerate or decelerate the FTTP build out. After the pilot, staff will return to Council with key metrics such as take rate, cost per passing, and customer satisfaction along with funding options for subsequent phases.