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Exhibit CC 12-21-2010 No. 10 Coffee Society Lease 10 LEASE AGREEMENT Streeter and Sons doing business as COFFEE SOCIETY 0Zep( This Lease Agreement ( "Lease ") is entered into as of the 1st day of January, 20 by and between the City of Cupertino, a municipal corporation, 10300 Torre Avenue, Cupertino, CA 95014 ( "Landlord "), and Streeter and Sons dba Coffee Society, 10800 Torre Avenue, Cupertino, CA 95014 ( "Tenant "). WHEREAS, Landlord is the owner of certain real property commonly described as being located at 10800 Torre Avenue in the City of Cupertino, County of Santa Clara, California and more particularly described in Exhibit "A" attached hereto ( "Landlord's Property"); and WHEREAS, Landlord operates on Landlord's Property a public library, and desires to have Tenant operate a cafe on the Property. WHEREAS, Tenant desires to lease from Landlord the cafe portion of Landlord's Property (the "Leased Premises ") to operate an independently owned cafe business. NOW THEREFORE, in consideration of the promises and covenants contained herein and for other good and valuable consideration, the parties hereby agree as follows: 1. LEASE OF PREMISES. Landlord leases to Tenant and Tenant leases from Landlord the Leased Premises consisting of approximately 500 square feet of interior space within the public library along with the non - exclusive right to use exterior public plaza space and more particularly depicted in Exhibit B, attached hereto, together with the nonexclusive right to use the common areas and parking areas of Landlord's Property. 2. TERM AND OPTION. 2.1 Term. 26 it The term of this Lease shall be for a period of three (3) years commencing on January 1, ( "Commencement Date ") and ending December 31, 2013. 2.2 Option. There is no option to extend the term of this Lease. 3. RENT. 3.1 Base Rent. Tenant agrees to pay Landlord as rent for the Premises commencing upon the Commencement Date the sums shown below in lawful money of the United States payable on or before the first day of each calendar month to the Landlord at the address shown in Section 24. a. From January 1, 2011 through December 31, 2011, the monthly sum of $1,000.00 b. From January 1, 2012 through December 31, 2012, the monthly sum of $1,050.00 c. From January 1, 2013 through December 31, 2013, the monthly sum of $1,100.00 Coffee Society Lease June 2010 —May 2015 3.2 Late Charges. Any installment of rent or any other sum due by Tenant and not received by Landlord within ten (10) days after such amount shall be due, without any requirement for notice to Tenant, shall be subject to a late charge equal to five percent (5 %) of such overdue amount. 4. TAXES. 4.1 Real Estate Taxes. For the term of this Lease, Landlord shall pay all real estate taxes and assessments levied upon Landlord's Property, if any. 4.2. Personal Property Taxes. During the term hereof, Tenant shall pay, prior to delinquency, all taxes assessed against and levied upon fixtures, furnishings, equipment and all other personal property of Tenant contained in the Leased Premises, and when possible Tenant shall cause said fixtures, furnishings, equipment and other personal property to be assessed and billed separately from the real property of Landlord. In the event any or all of the Tenant's fixtures, furnishings, equipment and other personal property shall be assessed and taxed with Landlord's real property, the Tenant shall pay to Landlord its share of such taxes within ten (10) days after delivery to Tenant by Landlord of a statement in writing setting forth the amount of the taxes applicable to the Tenant's property. • 5. USE. 5.1 Tenant's Use. Tenant shall use the Premises to operate a cafe which intends to serve beverages, coffee, tea, pastry, light lunch, dessert, and snack type items to the general public including City of Cupertino employees. Tenant shall not use the Leased Premises for any other purpose without the written consent of Landlord, which consent may be withheld in Landlord's sole and absolute discretion. Tenant, at Tenant's sole cost and expense, shall comply with all applicable municipal, state and federal statutes, ordinances, rules and regulations in effect during the term of this Lease regulating the use by Tenant of the Premises. 5.2. Uses Prohibited. Tenant shall not use nor permit the use of the Leased Premises in any manner that will tend to create waste or nuisance or unreasonably disturb other tenants and operators on Landlord's Property. No use shall be made or permitted to be made of said Premises, nor acts done, which will increase the existing rate of insurance upon the building in which said Premises may be located once said rate is established or cause a cancellation of any insurance policy covering said building or any part thereof, nor shall Tenant sell or permit to be kept, used or sold in or about said Premises, any article which may be prohibited by a standard form of fire insurance policies. Tenant shall, at its sole cost, comply with any and all requirements, pertaining to the use of said Premises, of any insurance organization or company necessary for the maintenance of reasonable fire and public liability insurance, covering said building and appurtenances. Coffee Society Lease January 2011— December 2013 6. ALTERATIONS AND FIXTURES. 6.1 Tenant's Rights. Tenant shall not make any alterations of the Leased Premises, or any part thereof, without the prior written consent of Landlord. Tenant shall repaint the interior walls of the Premises at Tenant's expense provided that Landlord has approved the paint color selections. Any additions to, or alterations of, said Premises, except movable furniture and trade fixtures, shall become at once a part of the realty and belong to Landlord. Any such alterations shall be in conformance with the requirements of all municipal, state and federal authorities. All fixtures, excluding trade fixtures, that are attached to the Premises shall become at once a part of the realty and belong to Landlord on expiration or sooner termination of this Lease. 6.2 • Landlord's Rights. Landlord has the right, in its sole discretion to modify, reconfigure and renovate the public library of which the Leased Premises are part; provided, however, that if the exercise of such right interferes with Tenant's quite enjoyment of use of the Leased Premises, Tenant may terminate this lease. 7. MAINTENANCE, REPAIRS AND ALTERATIONS. 7.1 Landlord's Obligations. Except for damage caused by any negligent or intentional act or omission of Tenant, Tenant's agents, employees, or invitees in which event Tenant shall repair the damage, Landlord, at Landlord's expense, shall keep in good order, condition and repair the foundations, exterior walls and the exterior roof of the Premises. Landlord shall not, however, be obligated to maintain the interior or exterior surface of exterior walls, windows, doors or plate glass. Landlord shall have no obligation to make repairs under this Section 7.1 until a reasonable time after receipt of written notice of the need for such repairs. Tenant expressly waives the benefits of any statute now or hereafter in effect which would otherwise afford Tenant the right to make repairs at Landlord's expense because of Lan.dlord's failure to keep the Premises in good order, condition and repair. Landlord, at Landlord's expense, shall keep in good order, condition and repair the Premises and every part thereof (whether or not the damaged portion of the Premises or the means of repairing the same are reasonably or readily accessible to Tenant) including, without limiting the generality of the foregoing, all plumbing, electrical and lighting facilities and equipment within the Premises, excluding trade fixtures, interior walls and interior surface of exterior walls, ceilings, windows, doors, and glass, located within the Premises. 7.2 Tenant's Obligations. (a) Tenant agrees that it will manage its operation at the highest standards of cleanliness in order to deliver an image that will appropriately blend with Premises. Tenant agrees that it will only employ people who create a clean, well - groomed, friendly, and positive image of its business. Tenant further agrees that it will require its employees to wear a standard logo top and similar matching pants in order to present a uniform staff appearance. Tenant agrees that for the first 24 months of this Lease, the owner will personally own and operate the facility and not seek to sell the business or assign the Lease. (b) If Tenant fails to perform Tenant's obligations under this Section or under any other section of this Lease, Landlord may at Landlord's option enter upon the Premises after ten (10) days' prior written notice to Tenant (except in case of emergency, in which case no notice shall be required), perform such obligations on Tenant's behalf and put the Premises in good order, condition and repair, and the cost thereof together with interest thereon at the maximum rate then allowable by law shall be due and payable as additional rent to Landlord together with Tenant's next rental installment. Coffee Society Lease January 2011 — December 2013 (c) On the last day of the term hereof, or on any sooner termination, Tenant shall surrender the Premises to Landlord in the same condition as received, ordinary wear and tear excepted, clean and free of debris including the removal of Tenant's trade fixtures. Tenant shall repair any damage to the Premises occasioned by the installation or removal of its trade fixtures, furnishings and equipment. 8. INSURANCE. Landlord shall either self - insure or maintain fire and extended coverage insurance throughout the term of this Lease in an amount equal to at least ninety (90 %) percent of the value of the building which includes the Premises, together with such other insurance, including not limited to, loss of rents, flood insurance, all Liability insurance, and such other insurance as Landlord deems necessary or that may be required by any governmental agency. Tenant hereby waives any right of recovery from Landlord, its officers and employees, and Landlord hereby waives any right of recovery from Tenant, its officers or employees, for any loss or damage (including consequential loss) resulting from any of the perils insured against in the standard form fire insurance policy with extended coverage endorsement. Tenant shall maintain plate glass insurance with a provision requiring the insurer to give Landlord at least ten (10) days written notice before any decrease in coverage, cancellation, or other material change, is effective and naming Landlord as the additional insured, and shall provide Landlord with a copy of the policy or a Certificate of Insurance within fifteen (15) days after the Commencement Date. If Tenant fails to deliver adequate proof that it has obtained and kept in force and effect the insurance required by this Section, Landlord shall have the right, at its option and after notice to Tenant, to effect such insurance and charge the cost of the premiums to Tenant's account. 9. INDEMNIFICATION OF LANDLORD - LIABILITY INSURANCE BY TENANT. 9.1 Indemnification. Tenant, as a material part of the consideration to be rendered to Landlord under this Lease, hereby waives all claims against Landlord for damage to goods, wares and merchandise, in, upon or about said Premises and for injuries to persons in or about said Premises, from any cause resulting from Tenant's use and occupation on the Premise arising at any time; and Tenant will indemnify and hold Landlord and the property of Landlord exempt and harmless from any and all claims, liabilities, loss, expenses, damage or injury resulting from Tenant's use and occupation of the Premises, including, but not limited to, any claim, liability, loss, or damage arising by reason of death or injury of any person, the damage to or destruction of any property of any person, and any work performed on said Premises or materials furnished to said Premises at the instance or request of Tenant or its agents or employees. 9.2 Tenant's Insurance. During the entire term of this Lease, the Tenant shall, at the Tenant's sole cost and expense, but for the mutual benefit of Landlord and Tenant, maintain general public liability and property damage insurance including contractual liability insurance against claims for personal injury, death, or property damage occurring in, upon or about the Premises and on any sidewalks directly adjacent to the Premises. The limitation of liability of such insurance shall be not less than One Million dollars ($1,000,000.00) in respect to any one occurrence, and to the limit of not less that One Million Dollars ($1,000,000.00) in respect to Property Damage. Landlord is to be named additional insured. All such policies of insurance shall be issued in the name of Tenant and Landlord and for the mutual and joint benefit and protection of the parties, and such policies of insurance shall include a provision requiring that the insurer give Landlord at least ten (10) days written notice before any cancellation, decrease in coverage or other material change is effective. Copies of the policy or a Certificate of Insurance thereof shall be delivered to the Landlord within fifteen (15) days after the Commencement Date stated. If Tenant fails to deliver adequate proof that Coffee Society Lease January 2011 — December 2013 it has obtained and kept in force and effect the insurance required by this Section, Landlord shall have the right, at its option and after notice to Tenant, to effect such insurance and charge the cost of the premiums to Tenant's account. 10. ABANDONMENT OF PERSONAL PROPERTY. Tenant shall not vacate or abandon the Premises at any time during the term of this Lease; and if Tenant shall abandon, vacate or surrender the Premises or be dispossessed by process of law, or otherwise, any personal property belonging to Tenant and left on the Premises shall be deemed to be abandoned, at the option of Landlord, except such property as may be mortgaged to Landlord. 11. UTILITIES. Tenant shall pay for telephone service, janitorial service including interior and exterior window washing and all other services used in, upon, or about the Premises by Tenant with the exception of water, sewer, trash removal from receptacles and electricity which Landlord shall pay. 12. ENTRY AND INSPECTION. Tenant shall permit Landlord and his agents to enter into and upon the Premises at all reasonable times after notice, except in case of an emergency, for the purpose of inspecting the same or for the purpose of maintaining the building in which said Premises are situated, or for the purpose of making repairs, alterations or additions to any other portion of said building, including the erection and maintenance of such scaffolding, canopy, fences and props as may be required, or for the purpose of posting notices of non - liability for alterations, additions or repairs. Landlord shall be permitted to do any of the above without any rebate of rent and without any liability to Tenant for any loss of occupation or quiet enjoyment of the Premises thereby occasioned. Tenant shall permit Landlord, at any time within ninety (90) days prior to the expiration of this Lease, to place upon said Premises my usual or ordinary "For Lease" signs and during such ninety (90) day period Landlord or his agents may, during normal business hours, enter upon said Premises and exhibit same to prospective tenants. 13. DAMAGE AND DESTRUCTION OF PREMISES. In the event of (a) partial destruction of said Premises or the building containing same during the term of this Lease or any extensions thereof, which requires repairs to either said Premises or said building, or (b) said Premises or said building being declared unsafe or unfit for occupancy by any authorized public authority for any reason other than Tenant's act, use or occupation, which declaration requires repairs to either said Premises or said building, Landlord shall forthwith make said repairs provided Tenant gives to Landlord thirty (30) days written notice of the necessity therefore. No such partial destruction (including any destruction necessary in order to make repairs required by any declaration made by any public authority) shall in any way annul or void this Lease except that Tenant shall be entitled to a proportionate reduction of minimum guaranteed rent while such repairs are being made, such proportionate reduction to be based upon the extent to which the making of such repairs shall interfere with the business carried on by Tenant in said Premises. However, if during the last one year of the term of this Lease the building is damaged as a result of fire or any other insured casualty to an foundation), Landlord may, within thirty (30) days following the date such damage occurs, terminate this Lease by written notice to Tenant. If Landlord, however, elects to make said repairs, and provided Landlord uses due diligence in making said repairs, this Lease shall continue in full force and effect and the minimum guaranteed rent shall be proportionately reduced as provided above. If Landlord elects to terminate this Lease all rents shall be prorated between Landlord and Tenant as of the date of such destruction. The foregoing to the contrary notwithstanding, if the building is damaged or destroyed at any time during the term hereof to an extent of more than twenty- five (25 %) percent of its then replacement cost (excluding foundation) as a result of a casualty not insured against, Landlord may within thirty (30) days following the date of such destruction terminate this Lease Coffee Society Lease January 2011— December 2013 upon written notice to Tenant. If Landlord does not elect to so terminate because of said uninsured casualty, Landlord shall promptly rebuild and repair said Premises and Tenant's rental obligation shall be proportionately reduced as provided above. In respect to any partial destruction (including any destruction necessary in order to make repairs required by any authorized public authority) which Landlord is obligated to repair and may elect to repair under the terms of this Article, Tenant waives any statutory right it may have to cancel this Lease as a result of such destruction. 14. ASSIGNMENT AND SUBLETTING. Tenant shall not be permitted for any reason to sell the business, nor assign or sublet the Lease during the first twenty -four (24) months of this Lease. During the last twelve (12) months of this lease, Tenant shall not, without Landlord's prior written consent, which consent may be withheld in Landlord's sole and absolute discretion, sublet the Premises or any part thereof or assign the Lease. In the event of a permitted sale of the business during the last twelve (12) months of this lease, Tenant will be released from all liability under this Lease. 15. EMINENT DOMAIN. If all or any part of the Premises is taken for public or quasi- public use by a governmental authority under the power of eminent domain or is conveyed to a governmental authority in lieu of such taking, and if the taking or conveyance causes the remaining part of the Premises to be untenantable and inadequate for use by Tenant for the purpose for which they were leased, then Tenant, at its option and by giving notice within fifteen (15) days after the taking, may terminate this Lease as of the date Tenant is required to surrender possession of the Premises. If a part of the Premises is taken or conveyed but the remaining part is tenantable and adequate for Tenant's use, then this Lease shall be terminated as to the part taken or conveyed as of the date Tenant surrenders possession; Landlord shall make such repairs, alterations and improvements as may be necessary to render the part not taken or conveyed tenantable; and the rent shall be reduced in proportion to the part of the Premises taken or conveyed. All compensation awarded for the taking or conveyance shall be the property of Landlord without any deduction therefrom for any estate of Tenant, and Tenant hereby assigns to Landlord all its right, title and interest in and to the award. Tenant shall have the right, however, to recover from the governmental authority, but not from Landlord, such compensation as may be awarded to Tenant on account of the interruption of Tenant's business, moving and relocation expenses and removal of Tenant's trade fixtures and personal property. 16. DEFAULT. If Tenant fails to make any payment required by the provisions of this Lease, after ten (10) days of the due date, or fails within fifteen (15) days after written notice thereof to correct any breach or default of the other covenants, terms or conditions of this Lease, or if Tenant breaches this Lease and abandons the property before the end of the term, such acts shall constitute a default under this Lease and Landlord shall have the right at any time thereafter to elect to terminate said Lease and Tenant's right to possession thereunder. Upon such termination, Landlord shall have the right to recover against Tenant: (a) The worth at the time of award of the unpaid rent, which had been earned at the time of termination; (b) The worth at the time of award of the amount by which the unpaid rent which would have been earned after termination until the time of award exceeds the amount of such rental loss that the Tenant proves could have been reasonably avoided; (c) The worth at the time of award of the amount by which the unpaid rent for the balance of the term after the time of award exceeds the amount of such rental loss that the Tenant proves could be reasonably avoided; and Coffee Society Lease January 2011 — December 2013 (d) Any other amount necessary to compensate the Landlord for all the detriment proximately caused by Tenant's failure to perform its obligations under the Lease or which in the ordinary course of things would be likely to result therefore. The "worth at the time of award" of the amounts referred to in subsections a. and b. above shall be computed by allowing interest at ten (10 %) percent per annum or the maximum rate permitted by law. The worth at the time of award of the amount referred to in subsection c. shall be computed by discounting the amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of award plus one (1%) percent. Such efforts as Landlord may make to mitigate the damages caused by Tenant's breach of this Lease do not constitute a waiver of Landlord's right to recover damages against Tenant hereunder, nor shall anything contained herein affect Landlord's right to indemnification against Tenant for any liability arising prior to termination of this Lease for personal injuries or property damage, and Tenant hereby agrees to indemnify and hold Landlord harmless from any such injuries and damages, including all attorney's fees and costs incurred by Landlord in defending any action brought against Landlord for any recovery thereof, and in enforcing the terms and provisions of this indemnification provision against Tenant. If Landlord elects to terminate this Lease and gives Tenant notice of such termination, upon the giving of such notice, the term of this Lease and the estate hereby granted shall expire and terminate on the effective date of the notice as fully and completely and with the same effect as if such date were the date herein fixed for the expiration of the term of this Lease and all rights of Tenant shall hereunder expire and terminate, but Tenant shall remain liable as here before provided. In the event Tenant abandons the Premises, this Lease shall terminate if the Landlord gives written notice of his belief of abandonment pursuant to Civil Code Sections 1951.2 and 1951.3. Notwithstanding any of the following, the breach of this Lease by Tenant, or an abandonment of the • Premises by Tenant, shall not constitute a termination of this Lease, or of Tenant's right of possession hereunder, unless and until Landlord elects to do so, and until such time Landlord shall have the right to enforce all of its rights and remedies under this Lease, including the right to recover rent, and all other payments to be made by Tenant hereunder, as it becomes due; provided, however, that until such time as Landlord elects to terminate this Lease, and Tenant's right of possession hereunder, to collect said rents, issues and profits as the become due and payable. Upon any such breach or default, Landlord shall have the right at any time thereafter, without notice except as provided for above, either in person, by agent or by a receiver to be appointed by a court, to enter and take possession of said Premises and collect such rents, issues and profits, including those past due and unpaid, and apply the same less costs and expenses of operation and collection, including reasonable attorney's fees, upon any indebtedness secured hereby, and in such order as Landlord may determine. The parties hereto agree that acts of maintenance or preservation or efforts to re -lease the Premises, or the appointment of a receiver upon the initiative of the Landlord to protect its interests under this Lease shall not constitute a termination of Tenant's right of possession for the purposes of this Article unless accompanied by a written notice from Landlord to Tenant of Landlord's election to so terminate. Nothing contained in this Article shall in any way diminish or be construed as waiving any of the Landlord's other remedies as provided elsewhere in this Lease or by law or in equity. 17. ATTORNEY'S FEES. Coffee Society Lease January 2011— December 2013 If Landlord is involuntarily made a party defendant to any litigation concerning this Lease or the Premises by reason of any act or omission of Tenant, then, Tenant shall hold harmless Landlord from all liabilities by reason thereof, including reasonable attorneys' fees and all costs incurred by Landlord in such litigation. Landlord shall be entitled to recover all collection costs including reasonable attorney's fees incurred by it as a result of Tenant's default as herein provided. If either Landlord or Tenant shall commence any legal proceedings against the other with respect to any of the terms and conditions of this Lease, the non - prevailing party therein shall pay to the other all expenses of said litigation, including a reasonable attorneys' fees as may be fixed by the court having jurisdiction for litigation of any matters relating to this Lease and service mailed to the address of tenants set forth herein shall be adequate service for such litigation. 18. SECURITY DEPOSIT. Tenant has deposited with Landlord the sum of Five Thousand Dollars ($5,000,00), receipt of which is hereby acknowledged by Landlord, said deposit being given to secure the faithful performance by the Tenant of all of the terms, covenants, and conditions of this Lease by the Tenant to be kept and performed during the term hereof. Tenant agrees that if the Tenant shall fail to pay the rent herein reserved promptly when due, said deposit may, at the option of the Landlord (but Landlord shall not be required to) be applied to any rent due and unpaid, and if the Tenant violates any of the other terms, covenants, and conditions of this Lease, said deposit shall be applied to any damages suffered by Landlord as a result of Tenant's default to the extent of the amount of the damages suffered. Landlord shall not be required to keep such deposit separate from its general accounts. Nothing contained in this Article shall in any way diminish or be construed as waiving any of the Landlord's other remedies as provided herein, or by law or in equity. Should the entire security deposit, or any portion thereof, be appropriated and applied by Landlord for the payment of overdue rent or other sums due and payable to Landlord by Tenant hereunder, then Tenant shall, on the written demand of Landlord, forthwith remit to Landlord a sufficient amount in cash to restore said security deposit to its original amount, and Tenant's failure to do so within fifteen (15) days after receipt of such demand, shall constitute a breach of this Lease. Should Tenant comply with all of the terms, covenants, and conditions of this Lease and promptly pay all of the rental herein provided for as it falls due, and all other sums payable by Tenant to Landlord hereunder, said security deposit shall be returned in full to Tenant at the end of the term of this Lease, or upon the earlier termination of this Lease, except in the event the Premises are sold as a result of the exercise of any power of sale under any mortgage or deed of trust, in which event this Lease shall be automatically amended to delete any reference to this Section, and Tenant shall be entitled to immediate reimbursement of its security deposit from the party then holding said deposit. This Lease does not create a trust relationship between Landlord and Tenant with respect to such security deposit, and Landlord shall be entitled to treat such security deposit as Landlord's own property. 19. HOLDING OVER. Any holding over after the expiration of the term of this Lease, with the consent of Landlord, shall be construed to be a tenancy from month to month, cancelable upon thirty (30) days written notice, and upon terms and conditions as existed during the last year of the term hereof except that the rent payable shall be one hundred and fifty percent (150 %) of the rent payable immediately preceding the termination date of this Lease. 20. BINDING EFFECT. The provisions of this Lease shall, subject to Section 14 on assignment, apply to and bind the heirs, successors, executors, administrators and assigns of all the parties hereto. Coffee Society Lease January 2011 — December 2013 21. NOTICE. All notices must be in writing and shall be delivered by hand, by nationally recognized overnight express delivery service or by U.S. registered or certified mail, to the addresses set forth below: TENANT: Jackie Streeter Streeter and Sons dba Coffee Society 10800 Torre Avenue Cupertino, CA 95014 -3255 Phone: (408) 425 -3660 LANDLORD: David W. Knapp City Manager City of Cupertino 10300 Torre Avenue Cupertino, CA 95014 -3255 Phone: (408) 777 -3202 22. PARTIAL INVALIDITY. If any term, covenant, condition or provision of this Lease is held by a court of competent jurisdiction to be invalid, void or enforceable, the remainder of the provisions hereof shall remain in full force and effect and shall in no way be affected, impaired or invalidated thereof. 23. ENTIRE AGREEMENT. This Lease sets forth the entire agreement between the parties. No amendment or modification of this Lease shall be binding or valid except by written instrument and signed by the parties. 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