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HomeMy WebLinkAboutC-26611000 -zo 0-46/-/ COMIIHNCEMENT CERTIFICATE This Commencement Certificate is made this 10th day of November, 2011 by and between Safeway Inc. ( "Lessor ") and the City of Arcadia ( "Lessee "). Lessor and Lessee entered into a certain Office Building Lease dated September 7, 2011 (the "Lease "), pursuant to which Lessee leases from Lessor certain premises located in the Von's Office Building commonly known as 618 Michillinda Avenue, located in Arcadia, California (the "Premises "). Pursuant to the Lease, Lessor and Lessee wish to clarify certain terms of the Lease. Lessor and Lessee agree as follows: 1. Lessor delivered possession of the Premises to Lessee on November 1, 2011. 2. The Term Commencement Date of the Lease is November 1, 2011 . 3. The Term Expiration Date of the Lease is October 31, 2013. 4. The Fixed Minimum Rent of the Lease will commence on November 1, 2011. 5. The Fixed Minimum Rent of the Lease for the first Lease Year is $163,200.00. 6. Lessee has one (1) options to renew the Lease for two (2) years which may be exercised upon Lessee giving Lessor written notice not less than one hundred eighty (180) days prior to the expiration term of the Lease. 7. The Premises contains approximately 9,370 square feet of Gross Leaseable Area. AGREED AND ACCEPTED: LESSEE: LESSOR: CITY OF ARCADIA, A California municipal corporation Donald Penman Its: City Manager COMMENCEMENT CERTIFICATE City of Arcadia.doc 11/11/11 SAFEWAY INC., a Delaware corporation By: OiLv r, � 5B-,4�'O" Assistant Vice President By: Oe Assistant Secretary FORMAPPROVED : jut -s PDA Facility No. 29- 5556 -15 -02 Arcadia, CA Writer's Direct Dial: 925-226-5441 December 29, 2011 Via Second Dav Delivery Lisa Mussenden, CD City Clerk /Records Manager City of Arcadia 240 W. Huntington Drive Arcadia, CA 91o66 RE: Facility #5556 -02 / Arcadia, CA Commencement Certificate Please find enclosed for your records, one fully executed original Commencement Certificate. Should there be any questions please contact Ann Elliott at 925-226-5353• Thank you for your assistance in this matter. Sincerely, SAFEWAY INC. Real Estate Law Department /PD DDivis��ion 4 Dannette E. Peters Administrative Assistant Encl. Cc: Ann Elliott (copy) Yvette Valencia (scan) Roger Snelling (scan) Sandra Sandoval (original) File (original) September 8, 2011 City of Arcadia 240 W. Huntington Drive Arcadia, CA 91066 AITN: Don Penman, City Manager Writer's Direct Dial: 925-226-5441 RECEIVED CITY OF ARCADIA SEP 12 2011 CITY MANAGER A RE: Facility #5556 / Arcadia, CA Lease (office building) between The Vons Companies. Inc and the City ofArcadiat dated g/Z7 —goii Please find enclosed for your records, one fully executed original Lease as referenced above. Should there be any questions please contact Ann Elliott at 925-226-5353• Thank you for your assistance in this matter. Sincerely, SAFEWAY INC. Real Estate Law Department /PDA Division AV-X-�� �, �� Dannette E. Peters Administrative Assistant Encl. Cc: Ann Elliott (copy) Kevin Wing (original) Kevin Thompson (copy) File (original) LEASE * * * * * * * * * * * * * * * * * * ** Between CITY OF ARCADIA (Tenant) and THE VONS COMPANIES, INC. (Landlord) FULL SERVICE LEASE l , THIS LEASE (the "Lease ") is dated as of the day of 2011 (for reference purposes only) between THE VONS COMPANIES, INC., a Michigan corporation ( "Landlord "), and the Tenant as named in the Schedule below. The term "Project" means the building of approximately 240,000 square feet ( "Building "), and the land appurtenant thereto ( "Land "), and other improvements located thereon commonly known as 618 Michillinda Avenue, located in Arcadia, California. The "Premises" means that portion of the Building leased to Tenant and described in the Schedule and outlined on Exhibit A. The following schedule (the "Schedule ") is an integral part of this Lease. Terms defined in this Schedule shall have the same meaning throughout the Lease. SCHEDULE 1. Tenant: CITY OF ARCADIA, a California municipal corporation 2. Premises: A portion of the northern lower level (first floor) of the Building consisting of approximately nine thousand three hundred seventy (9,370) square feet (also, the "Rentable Square Footage" of the Premises), as shown on Exhibit A, attached hereto 3. Building: Von's Office Building at 618 Michillinda Avenue, Arcadia, CA 91007 4. Tenant's Proportionate Share: 3% (based upon a total of 240,000 rentable square feet in the Building) 5. Lease (or Security) Deposit: None 6. Permitted Use: general office use for multi- agency task force 7. Tenant's Real Estate Broker: Charles Dunn 8. Landlord's Real Estate Broker: NAI Capital Commercial 9. Tenant Work, if any: See Section VI. E 10. Term Commencement Date : Date of delivery of Premises to Tenant from Landlord (Landlord's Work is estimated to be complete five (5) weeks from approval of Tenant Plans and receipt of all necessary permits from the City of Arcadia (receipt of permits and start of Landlord's Work is referred to here as the "Work Date "). It is further estimated that Landlord may be able to deliver possession three (3) weeks from the Work Date.) 11. Rent Commencement Date: Forty -two (42) days following the date this Lease is fully executed by both parties hereto 12. Term /Termination Date: Two (2) Years /Last day of the twenty -fourth (24`h) month following the Term Commencement Date 13. Parking Stalls: 32 unassigned stalls at no cost to Tenant Office Lease Page i of 39 8/26/2011 #5556 Arcadia, CA (Facilities) 14. Base Rent: Period 1 st Lease Year 2 °d Lease Year Option Period 3`d Lease Year 4`h Lease Year Monthly Base Rent $13,600.00 $14,000.00 Monthly Base Rent $15,929.00 $16,397.00 Annual Base Rent $163,200.00 $168,000.00 Annual Base Rent $191,148.00 $196,764.00 15. Base Year: Calendar Year 2012 (for the purpose of calculating Operating Cost Share Rent and Tax Share Rent) 16. Renewal Option(s): One (1) two (2) year option Exhibit A – SITE PLAN OF THE PREMISES Exhibit B - RULES AND REGULATIONS Exhibit C – SCOPE OF WORK Exhibit D - TRAINING ROOM SCHEDULES & RATES Exhibit E— POLICIES, RULES, AND PROCEDURES FOR CONSTRUCTION PROJECTS Office Lease Page ii of 39 8/26/2011 45556 Arcadia, CA (Facilities) AGREEMENT III 1. LEASE AGREEMENT. On the terms stated in this Lease, Landlord leases the Premises to Tenant, and Tenant leases the Premises from Landlord, for the Term beginning on the Commencement Date and ending on the Termination Date unless extended or sooner terminated pursuant to this Lease. A. Commencement Dates. The term and rent commencement dates for this Lease are as set forth in the Schedule, provided if Landlord is unable to provide Tenant with access to the Premises on or before any applicable scheduled commencement date for any reason, then (i) this Lease shall not be void or voidable by either party, (ii) Landlord shall not be liable to Tenant for any loss or damage resulting therefrom, and (iii) the applicable date shall be revised to mean the date on which Landlord can provide Tenant with access to the Premises and the Termination Date shall be revised accordingly so that the Term (as defined in the Schedule) is unaffected by such delay. B. Termination Date. The termination date ( "Termination Date ") of this Lease is the date set forth in the Schedule. II. RENT. A. Types of Rent. Tenant shall pay the following Rent in the form of a check to Landlord at the following address: Safeway Inc./PDA Facility # 5556 Bank of America Lockbox Services 4834 Collections Center Drive Chicago, IL 60693 or in such other manner as Landlord may notify Tenant. 1. Base Rent to be paid, at Tenant's option, either (a) in monthly installments in advance, with the first monthly installment payable concurrently with the execution of this Lease and thereafter on or before the first day of each month of the Term in the amount set forth on the Schedule; or (b) in annual installments in advance, on or before the first day of the upcoming calendar year. If the Term Commencement Date is not January 1, the partial year's Rent for the year in which the Term Commencement Date falls shall be paid within thirty (30) days of the execution of this Lease. 2. Operating Cost Share Rent equal to Tenant's Proportionate Share (as set forth in the Schedule) of the amount by which Operating Costs for the applicable Fiscal Year (as defined in Section II.C(5) below) of this Lease exceed the Operating Costs for the Base Year (as defined in the Schedule) ( "Excess Costs "), paid commencing after the Base Year in accordance with Section II.B. The definition of Operating Costs and the method for billing and payment of Operating Cost Share Rent are set forth in Sections II.B, C and D. 3. Tax Share Rent equal to Tenant's Proportionate Share of the amount by which Taxes for the applicable Fiscal Year of this Lease exceed the Taxes for the Base Year ( "Excess Taxes "), commencing after the Base Year in accordance with Section II.B. A definition of Taxes and the method for billing and payment of Tax Share Rent are set forth in Sections II.B, C and D. As used in this Lease, the term "Rent" means Base Rent, Operating Cost Share Rent, Tax Share Rent and all other costs, expenses, liabilities, and amounts that Tenant is required to pay under this Lease Office Lease Page 1 of 39 8/26/2011 #5556 Arcadia, CA (Facilities) ( "Additional Rent "), including any interest or penalty for late payment. Tenant's agreement to pay Rent is an independent covenant, with no right of setoff, deduction or counterclaim of any kind. B. Payment of Operating Cost and Tax Share Rent. 1. Payment of Estimated Operating Cost and Tax Share Rent. a) By April l of each succeeding Fiscal Year (after the Base Year), or as soon as reasonably possible thereafter, Landlord shall give Tenant notice of its estimate of the payments to be made pursuant to Sections II.A(2) through II.A(3) above for the then applicable Fiscal Year. Landlord may revise these estimates by written notice to Tenant whenever it obtains more accurate information, such as the final real estate tax assessment or tax rate for the Project, in which event subsequent payments by Tenant for such Fiscal Year shall be based upon such revised estimate. b) Within ten (10) days after receiving Landlord's notice regarding the original or revised estimate of the payments to be made pursuant to Sections II.A(2) through II.A(3) above for a particular Fiscal Year, Tenant shall pay Landlord an amount equal to the product of such estimated monthly payments (as set forth in Landlord's notice), multiplied by the number of months that have elapsed in the applicable Fiscal Year to the date of such payment including the current month, minus any payments on account thereof previously made by Tenant for the months elapsed. On the first day of each month thereafter, Tenant shall pay Landlord the estimated monthly payments as set forth in Landlord's most recent notice, until a new estimate becomes applicable. Reference to monthly installment payments with regard to Operating Cost or Tax Share Rent can be treated similarly to regular Rent payments at Tenant's option. In other words, such excess costs can be paid in one annual payment in arrears within thirty (30) days of receiving a statement for same from Landlord. 2. Correction of Operating Cost and Tax Share Rent. Within one hundred fifty (150) days after the close of each Fiscal Year or as soon after such 150 -day period as practicable, Landlord shall deliver to Tenant a statement of (a) the actual Excess Costs and Excess Taxes for such Fiscal Year, and (b) the payments made by Tenant under Section II.B(l) above for such Fiscal Year (the "Annual Expense Statement "). If, on the basis of such Annual Expense Statements, Tenant owes an amount that is less than the estimated payments for such Fiscal Year previously made by Tenant, Landlord, at its election, shall either promptly refund the amount of the overpayment to Tenant or, if this Lease is still in effect, credit such excess against Tenant's subsequent obligations to pay Operating Costs and Taxes. If, based on such Annual Expense Statements, Tenant owes an amount that is more than the estimated payments for such Fiscal Year previously made by Tenant, Tenant shall pay the deficiency to Landlord within twenty (20) days after Landlord's delivery of such Annual Expense Statements to Tenant. C. Definitions. 1. Included Operating Costs. a) "Operating Costs" means any expenses, costs and disbursements of any kind other than Taxes, paid or incurred by Landlord in connection with the management, maintenance, operation, insurance (including the related deductibles), repair and other related activities in connection with any part of the Project and of the personal property, fixtures, machinery, equipment, systems and apparatus used in connection therewith, including, without limitation, all Office Lease Page 2 of 39 8/26/2011 #5556 Arcadia, CA (Facilities) electricity, water, gas, sewers, oil and other utilities (collectively, "Utilities "), including any surcharges imposed, serving the Project or any part thereof (but excluding the cost of any utility directly billed to Tenant or other tenants in the Project), the cost of providing those services required to be furnished by Landlord under this Lease, and a management fee equal to four percent (4 %) of the gross rents received from the Project. Operating Costs shall also include the costs of any capital improvements made after the Base Year which are intended to reduce Operating Costs or improve safety, and those made after the Base Year to keep the Project in compliance with Governmental Requirements (as defined in Section VLA(3)(c) below) applicable from time to time or to replace existing capital improvements, facilities and equipment within the Project, such as the roof membrane and resurfacing of the parking areas (collectively, "Included Capital Items "); provided, that the costs of any Included Capital Item shall be amortized by Landlord, together with an amount equal to interest at ten percent (10 %) per annum, over the estimated useful life of such item and such amortized costs are only included in Operating Costs for that portion of the useful life of the Included Capital Item which falls within the Term, unless the cost of the Included Capital Item is less than Ten Thousand Dollars ($10,000) in which case it shall be expensed in the year in which it was incurred. b) If the Project is not fully occupied during any portion of any Fiscal Year, Landlord may adjust (an "Equitable Adjustment ") Operating Costs to equal what would have been incurred by Landlord had the Project been fully occupied (based upon 95% occupancy rate). This Equitable Adjustment shall apply only to Operating Costs that are variable and therefore increase as occupancy of the Project increases. Landlord may incorporate the Equitable Adjustment in its estimates of Operating Costs. 2. Excluded Operating Cam. Operating Costs shall not include: (a) costs of alterations of tenant premises; (b) costs of capital improvements other than Included Capital Items; (c) interest and principal payments on mortgages or any other debt costs (except as provided in Section II.C(1) above with regard to Included Capital Items), or rental payments on any ground lease of the Project; (d) real estate brokers' leasing commissions; (e) legal fees, space planner fees and advertising expenses incurred with regard to leasing the Project or portions thereof, (f) any cost or expenditure for which Landlord is reimbursed, by insurance proceeds or otherwise, except by Operating Cost Share Rent; (g) the cost of any service furnished to any office tenant of the Project which Landlord does not make available to Tenant; (h) depreciation (except on any Included Capital Items); Office Lease Page 3 of 39 8/26/2011 #15556 Arcadia, CA (Facilities) (i) franchise or income taxes imposed upon Landlord, except to the extent imposed in lieu of all or any part of Taxes; 0) costs of correcting defects in construction of the Project (as opposed to the cost of normal repair, maintenance and replacement expected with the construction materials and equipment installed in the Project in light of their specifications); (k) legal and auditing fees incurred for the benefit of Landlord such as collecting delinquent rents, preparing tax returns and other financial statements, and audits other than those incurred in connection with the preparation of reports required pursuant to Section II.B above; (1) the wages of any employee for services not related directly to the management, maintenance, operation and repair of the Project; (m) fines, penalties and interest incurred by Landlord for late payment by Landlord or violations of law; and (n) for the Base Year only, market -wide labor -rate increases due to extraordinary circumstances, such as boycotts or strikes, and utility rate increases due to extraordinary circumstances, including, but not limited to, conservation surcharges, boycotts, embargoes or other shortages. 3. Taxes. a) "Taxes" means any and all taxes, assessments and charges of any kind, general or special, ordinary or extraordinary, levied against the Project, which Landlord shall pay or become obligated to pay in connection with the ownership, leasing, renting, management, use, occupancy, control or operation of the Project or of the personal property, fixtures, machinery, equipment, systems and apparatus used in connection therewith. Taxes shall include real estate taxes, personal property taxes, sewer rents, water rents, special or general assessments, transit taxes, ad valorem taxes, and any tax levied on the rents hereunder or the interest of Landlord under this Lease (the "Rent Tax "). Taxes shall also include all fees and other costs and expenses paid by Landlord in reviewing any tax and in seeking a refund or reduction of any Taxes, whether or not the Landlord is ultimately successful. Taxes shall also include any installments of principal and interest required to pay any existing or future general or special assessments for public improvements, services or benefits, and any increases resulting from reassessments imposed in connection with any change in ownership or new construction. b) For any year, the amount to be included in Taxes (i) from taxes or assessments payable in installments, shall be the amount of the installments (with any interest) due and payable during such year, and (ii) from all other Taxes, shall at Landlord's election be the amount accrued, assessed, or otherwise imposed for such year or the amount due and payable in such year. Any refund or other adjustment to any Taxes by the taxing authority, shall apply during the year in which the adjustment is made. Taxes shall not include any net income (except Rent Tax), capital, stock, succession, transfer, franchise, gift, estate or Office Lease Page 4 of 39 8/26/2011 45556 Arcadia, CA (Facilities) inheritance tax, except to the extent that such tax shall be imposed in lieu of any portion of Taxes. 4. Lease Year. "Lease Year" means each consecutive twelve month period beginning with the Term Commencement Date, except that if the Term Commencement Date is not the first day of a calendar month, then the first Lease Year shall be the period from the Term Commencement Date through the final day of the calendar month during which the first anniversary of the Term Commencement Date occurs, and subsequent Lease Years shall be each succeeding twelve month period during the Term following the first Lease Year. 5. Fiscal Year. "Fiscal Year" means each calendar year during which any portion of the Term occurs (e.g., the first Fiscal Year shall be the calendar year during which the Commencement Date occurs). D. Computation of Base Rent and Rent Adjustments. 1. Prorations. If (a) the Rent Commencement Date is a date other than January 1, (b) the Termination Date is a date other than December 31, or (c) this Lease terminates early, then in each such event, the Base Rent, the Operating Cost Share Rent and Tax Share Rent shall be equitably adjusted to reflect such event on a basis determined by Landlord to be consistent with the principles underlying the provisions of this Section. 2. Interest Rate. Any sum due from Tenant to Landlord not paid when due shall bear interest from the date due until paid at the lesser of eighteen percent (18 %) per annum or the maximum rate permitted by law (the "Interest Rate "). 3. Rent Adjustments. The square footage of the Premises and the Building set forth in the Schedule are conclusively deemed to be the actual square footage thereof, without regard to any subsequent remeasurement of the Premises or the Building. If any Operating Cost paid in one Fiscal Year relates to more than one Fiscal Year, Landlord may proportionately allocate such Operating Cost among the related Fiscal Years. 4. Books and Records. Landlord shall maintain books and records reflecting the Operating Costs and Taxes in accordance with generally accepted accounting principles and management practices. Tenant and its certified public accountant shall have the right to inspect Landlord's records at Landlord's applicable local office or other location designated by Landlord upon at least seventy -two (72) hours' prior notice during normal business hours during the sixty (60) days following Landlord's delivery of the Annual Expense Statement to Tenant. The results of any such inspection shall be kept strictly confidential by Tenant and its agents, and Tenant and its certified public accountant must agree, in their contract for such services, to such confidentiality restrictions and shall specifically agree that the results shall not be made available to any other tenant of the Project. Unless Tenant sends to Landlord any written exception to an Annual Expense Statement within said sixty (60) day period, such Annual Expense Statement shall be deemed final and accepted by Tenant. Tenant shall pay the amount shown on any Annual Expense Statement in the manner prescribed in this Lease, whether or not Tenant takes any such written exception, without any prejudice to such exception. If Tenant makes a timely exception, Landlord shall cause its independent certified public accountant to issue a final and conclusive resolution of Tenant's exception. Tenant shall pay the cost of such certification unless Landlord's original determination of annual Operating Costs and Taxes overstated the amounts thereof, in the aggregate, by more than five percent (5 %). Office Lease Page 5 of 39 8/26/2011 #5556 Arcadia, CA (Facilities) 5. Miscellaneous. So long as Tenant is in default of any obligation under this Lease, Tenant shall not be entitled to any refund of any amount from Landlord. If this Lease is terminated for any reason prior to the annual determination of Operating Cost or Tax Share Rent, either party shall pay the full amount due to the other within fifteen (15) days after Landlord's notice to Tenant of the amount when it is determined. Landlord may commingle any payments made with respect to Operating Cost Share Rent and Tax Share Rent, without payment of interest. III. OPTION TO EXTEND. Subject to the terms and conditions set forth below, Tenant may at its option ( "Renewal Option ") extend the Term of this Lease for one (1) additional two (2) year period (the "Renewal Term ") The Renewal Term shall be upon the same terms contained in this Lease, except that (i) the Base Rent payable by Tenant during the Renewal Term shall be as shown in the rent table in item 14 of the Schedule above, (ii) Tenant shall continue to possess and occupy the Premises in their existing condition, "as is" as of the commencement of the Renewal Term, and Landlord shall have no obligation to repair, remodel, improve or alter the Premises, to perform any other construction or other work of improvement upon the Premises, or to provide Tenant with any construction or refurbishing allowance whatsoever, and (iii) Tenant shall have no further rights to extend the Term of this Lease after the expiration of the Renewal Term. A. To exercise the Renewal Option, Tenant must deliver an unconditional binding notice to Landlord via certified mail or hand delivery not later than one hundred eighty (180) days prior to the expiration of the initial Term of this Lease. If Tenant fails to timely give its notice of exercise, Tenant will be deemed to have waived its Renewal Option. B. Tenant's right to exercise the Renewal Option is personal to, and may be exercised only by, the original named Tenant under this Lease. If Tenant shall assign this Lease or sublet all or any portion of the Premises under a sublease which is effective at any time during the final twelve (12) months of the initial Term, then immediately upon such assignment or subletting, Tenant's right to exercise the Renewal Option shall simultaneously terminate and be of no further force or effect. No assignee or subtenant shall have any right to exercise the Renewal Option granted herein. In addition, if Tenant is in default under this Lease (after any applicable notice and beyond any applicable cure periods) at the time it exercises the Renewal Option or at any time thereafter until the commencement of the Renewal Term or if Tenant has been in default under this Lease (after any applicable notice and beyond any applicable cure periods) at any time prior to its exercise of the Renewal Option, Landlord shall have, in addition to all of its other rights and remedies under this Lease, the right (but not the obligation) to terminate the Renewal Option and to unilaterally revoke Tenant's exercise of the Renewal Option, in which case this Lease shall expire on the Termination Date, unless earlier terminated pursuant to the terms hereof, and Tenant shall have no further rights under this Lease to renew or extend the Term. IV. PREPARATION AND CONDITION OF PREMISES; TENANT'S POSSESSION; REPAIRS AND MAINTENANCE. A. Condition of Premises. Landlord is leasing the Premises to Tenant "as is ", without any obligation to alter, remodel, improve, repair or decorate any part of the Premises and without any express or implied representations or warranties of any kind, except for the performance of Landlord's Work as set forth in Exhibit C ( "Landlord's Work "). Tenant agrees and acknowledges that the Rent Commencement Date shall not be delayed as a result of any delays that may occur in the completion of Landlord's Work. B. Tenant's Possession. Tenant's taking possession of any portion of the Premises shall be conclusive evidence that the Premises was in good order, repair and condition. Office Lease Page 6 of 39 8/26/2011 ##5556 Arcadia, CA (Facilities) C. Tenant's Work. Prior to the Term Commencement Date, Tenant shall prepare, furnish to Landlord and obtain Landlord's approval of all necessary plans and specifications for Tenant's proposed improvements to the Premises ( "Tenant's Work ") pursuant to the provisions under "Tenant's Plans" on Exhibit C and shall thereafter construct such improvements pursuant to the provisions under "Tenant's Work" in Exhibits C and E. Landlord shall notify Tenant in writing when Landlord's Work is substantially complete pursuant to Exhibit C. Provided that Tenant has obtained the insurance required by Article IX below and Exhibits C and E, Tenant shall, upon receipt of Landlord's notice, have the right to enter the Premises to construct and complete Tenant's Work and the installation of all Tenant's fixtures, sign faces, and equipment at the Premises. Tenant shall obtain, at its expense, a certificate of occupancy for the Premises upon completion of Tenant's Work. Tenant's entry into the Premises hereunder shall be at Tenant's own risk and without interference with any remaining work which must be performed by Landlord in the Premises. D. Repairs and Maintenance During the Term. 1. Tenant's Obligations. Except to the extent of Landlord's obligations under Article V below, Tenant shall, throughout the Term at its expense, make all repairs necessary to keep the Premises, Tenant's fixtures and personal property, in good order, condition and repair and in compliance with all applicable Governmental Requirements; and to the extent Tenant fails to do so, Landlord may make such repairs itself at Tenant's expense. At the expiration or earlier termination of this Lease, or Tenant's right to possession, Tenant shall return the Premises to Landlord in the condition required under Article XV below. 2. Landlord's Obligations. _ Except as otherwise provided in Article X below, Landlord agrees to make all necessary repairs to the structure and the exterior of the Building, the common areas of the Project and the Building Systems (as defined in Section VI.B below), and to maintain the same in reasonably good order and condition, subject to inclusion of the costs thereof in Operating Costs; provided, however, that any damage arising from the acts of Tenant or any Tenant Parties ( "Tenant Parties" include Tenant and Tenant's employees, agents, contractors, and invitees) shall be repaired by Landlord at Tenant's sole expense, and Tenant shall pay Landlord, on demand, the cost of any such repair. Landlord may also at any time make repairs or alterations which Landlord deems necessary for the safety or protection of the Project, or which Landlord is required to make by any court or pursuant to any Governmental Requirements. The cost of any repairs made by Landlord on account of Tenant's default, or on account of the misuse or neglect by Tenant or any Tenant Parties anywhere in the Project, shall become Additional Rent payable by Tenant on demand. As a condition precedent to all of Landlord's repair and maintenance obligations under this Lease, Tenant must have notified Landlord of the need of such repairs or maintenance. Tenant waives the provisions of Sections 1941 and 1942 of the California Civil Code and any similar or successor law regarding Tenant's right to make repairs and deduct the cost of such repairs from the Rent due under this Lease. V. PROJECT SERVICES. A. Heating and Air Conditionin>;. 1. During the normal business hours of 6:00 a.m. to 6:00 p.m., Monday through Friday (except legal holidays) (the "Normal Business Hours "), Landlord shall furnish heating and air conditioning to provide a comfortable temperature, in Landlord's judgment, for normal business operations, except to the extent Tenant fails to take reasonable steps to ensure the efficient heating and cooling of the Premises (e.g., keeping all exterior doors, windows and blinds closed) or uses or installs equipment which adversely affects the temperature maintained by the air conditioning system. If Tenant uses or installs such equipment, Landlord may install supplementary air conditioning units in the Office Lease Page 7 of 39 8/26/2011 #5556 Arcadia, CA (Facilities) Premises, and Tenant shall pay to Landlord upon demand as Additional Rent the cost of installation, operation and maintenance thereof. Tenant acknowledges that the temperatures within the Premises may be slightly higher than usual if the outside temperature exceeds 95 degrees F dry bulb. 2. Landlord shall furnish heating and air conditioning after Normal Business Hours if Tenant provides Landlord reasonable prior notice (at least twelve hours in advance), and pays Landlord as Additional Rent $150.00 per hour for such additional heating or air conditioning, including insurance, maintenance, depreciation, and labor costs incurred by Landlord as a result of providing such service after Normal Business Hours. B. Elevators. If the Building is equipped with one or more elevators, Landlord shall provide passenger elevator service during Normal Business Hours to Tenant in common with Landlord and all other tenants. Landlord shall provide limited passenger service at other times, except in case of an emergency. If the Building is equipped with a freight elevator, Landlord shall provide freight elevator service at reasonable hours at Tenant's request. C. Electricity. During Normal Business Hours, Landlord shall provide sufficient electricity to operate normal office lighting and a reasonable amount of office equipment and machinery. Tenant shall not install or operate in the Premises any electrically operated equipment or other machinery, without obtaining Landlord's prior written consent; provided that Landlord's prior written consent shall not be required if (i) Tenant uses only such equipment or machinery that is normally employed for general office use and which does not require high electricity consumption for operation, and (ii) Tenant uses only usual and customary quantities of such general office equipment or machinery. If any of Tenant's equipment or machinery requires electricity consumption in excess of that which is necessary to operate normal general office equipment or machinery (e.g., computer rooms, telephone rooms and special HVAC equipment), if Tenant uses more than the usual and customary quantities of such normal general office equipment or machinery, or if Landlord determines that Tenant is using a disproportionate share of the electrical capacity available for the Building or Project (i.e., electrical usage in excess of that which would typically be used for general office purposes), then Landlord, at its election, may, in addition to Landlord's right to withhold consent to Tenant's installation or operation of equipment or other machinery in the Premises as provided above, (1) periodically charge Tenant, as Additional Rent, a sum equal to Landlord's reasonable estimate of the cost of Tenant's excess electricity use, (2) install, at Tenant's expense, a separate meter to measure the electricity supplied to the Premises, and /or (3) install, at Tenant's expense, additional equipment to increase the electrical capacity for the Building or Project to offset such excess usage by Tenant. Tenant shall reimburse Landlord as Additional Rent for the cost of its submetered consumption based upon Landlord's reasonable estimate of the cost of such electricity. Tenant shall not permit electricity to be wasted. D. Water. Landlord shall furnish hot and cold tap water for drinking and toilet purposes. Tenant shall pay Landlord for water furnished for any other purpose as Additional Rent at rates fixed by Landlord. Tenant shall not permit water to be wasted. E. Janitorial Service. Landlord shall furnish janitorial service Monday through Friday as generally provided to other tenants in the Project, but never after Tenant's normal hours of operation. Tenant shall make its hours of operation clear to Landlord. F. Interruption of Services. If any of the Building equipment or machinery ceases to function properly for any cause Landlord shall use reasonable diligence to repair the same promptly. Landlord's inability to furnish, to any extent, the Project services set forth in this Article V, or any cessation thereof resulting from any causes, including any entry for repairs pursuant to this Lease, and any renovation, redecoration or rehabilitation of any area of the Project, shall not render Landlord liable for damages to Office Lease Page 8 of 39 8/26/2011 #5556 Arcadia, CA (Facilities) either person or property or for interruption or loss to Tenant's business, nor be construed as an eviction of Tenant, nor work an abatement of any portion of Rent, nor relieve Tenant from fulfillment of any covenant or agreement hereof. G. Access, Lobby. Tenant shall have access to the Premises and the parking facilities serving the Project 24 hours a day, every day of the Term. Tenant shall have the right to locate a receptionist and a sign in the general lobby and reception area of the Building at a location to be identified and specified by Landlord. H. Security. Landlord shall provide security for the Building 24 hours a day, every day of the Term. Tenant shall have the right to install its own security systems at the Premises if Tenant has obtained prior written consent from Landlord, which approval shall not be unreasonably withheld, conditioned or delayed. Tenant acknowledges that Building security problems may occur which may require the employment of certain measures by Landlord in the day -to -day operation of the Project, provided that Tenant shall have no liability for any action taken by Landlord in connection therewith, unless additional measures are required due to Tenant's operation of its business within the Premises, and Tenant agrees that: 1. Landlord may, at any time, or from time to time, or for regularly scheduled time periods, as deemed advisable by Landlord and /or its agents, in their sole discretion, require that persons entering or leaving the Building or the Project identify themselves to watchmen or other employees designated by Landlord, by registration, identification or otherwise. 2. Tenant and its employees will cooperate with Landlord's employees in the implementation of any and all security procedures. Such security measures shall be the sole responsibility of Landlord. 4. Landlord will issue to Tenant, free of charge, employee and guest identification badges, which must be worn by employees and guests at all times. Tenant will be charged for all replacement or substitute identification badges. VI. ALTERATIONS AND REPAIRS. A. Landlord's Consent and Conditions. 1. Tenant shall not make any improvements or alterations to the Premises (the "Work ") without in each instance submitting plans and specifications for the Work to Landlord and obtaining Landlord's prior written consent. Tenant shall pay Landlord's standard charge (or, if Landlord does not have a standard charge, then Landlord's actual costs incurred, if any) for review of all of the plans and all other items submitted by Tenant. Landlord will be deemed to be acting reasonably in withholding its consent for any Work which (a) impacts the base structural components or the Building Systems, (b) impacts any other tenant's premises, (c) is visible from outside the Premises, or (d) would utilize building materials or equipment which are inconsistent with Landlord's standard building materials and equipment for the Building. 2. Tenant shall pay for the cost of all Work, including the cost of any and all approvals, permits, fees and other charges which may be required as a condition of performing such Work. 3. The following requirements shall apply to all Work (including Tenant's Work for initial preparation of the Premises, as well as any Work performed during the Term): Office Lease Page 9 of 39 8/26/2011 #5556 Arcadia, CA (Facilities) a) Prior to commencement, Tenant shall furnish to Landlord building permits, certificates of insurance satisfactory to Landlord, and, at Landlord's request, security for payment of all costs. b) Tenant shall perform all Work so as to maintain peace and harmony among other contractors serving the Project and shall avoid interference with other work to be performed or services to be rendered in the Project. c) The Work shall be performed in a good and workmanlike manner, meeting the standard for construction and quality of materials in the Building, and shall comply with all insurance requirements and all applicable governmental laws, ordinances and regulations ( "Governmental Requirements "). d) Tenant shall perform all Work so as to minimize or prevent disruption to other tenants, and Tenant shall comply with all reasonable requests of Landlord in response to complaints from other tenants. e) Tenant shall perform all Work in compliance with any "Policies, Rules and Procedures for Construction Projects" which may be in effect at the time the Work is performed. See current policies attached hereto as Exhibit E. fl All Work shall be performed only by contractors or mechanics approved by Landlord, which approval shall not be unreasonably withheld, conditioned or delayed; provided, however, that (i) Landlord may, in its sole discretion, specify engineers, general contractors, subcontractors, and architects to perform work affecting the Building Systems; and (ii) if Landlord consents to any Work that requires work to be performed outside the Premises, Landlord may elect to perform such work at Tenant's expense. g) Tenant shall permit Landlord to supervise all Work, including, without limitation, the right (but not an obligation) to inspect the construction work during the progress thereof, and to require corrections of faulty construction or any material deviation from the plans for such Work as approved by Landlord; provided, however, that no such inspection shall be deemed to create any liability on the part of Landlord, or constitute a representation by Landlord or any person hired to perform such inspection that the work so inspected conforms with such plans or complies with any Governmental Requirements, and no such inspection shall give rise to a waiver of, or estoppel with respect to, Landlord's continuing right at any time or from time to time to require the correction of any faulty work or any material deviation from such plans. h) Upon completion, Tenant shall furnish Landlord with contractor's affidavits and full and final statutory waivers of liens, as -built plans and specifications, and receipted bills covering all labor and materials, and all other close -out documentation related to the Work, including any other information required under any "Policies, Rules and Procedures for Construction Projects" which may be in effect at the time. B. Repairs. If any part of the mechanical, electrical or other systems (e.g., HVAC, life safety or automatic fire extinguisher /sprinkler system) (collectively, the "Building Systems ") in the Premises shall be damaged during the performance of Work, Tenant shall promptly notify Landlord, and Landlord may Office Lease Page 10 of 39 8/26/2011 #5556 Arcadia, CA (Facilities) elect to repair such damage at Tenant's expense. Alternatively, Landlord may require Tenant to repair such damage at Tenant's sole expense using contractors approved by Landlord. C. No Liens. Tenant has no authority to cause or permit any lien or encumbrance of any kind to affect Landlord's interest in the Project; any such lien or encumbrance shall attach to Tenant's interest only. If any mechanic's lien shall be filed or claim of lien made for work or materials furnished to Tenant, then Tenant shall at its expense within ten (10) days thereafter either discharge or contest the lien or claim. If Tenant contests the lien or claim, then Tenant shall (i) within such ten (10) day period, provide Landlord adequate security for the lien or claim, (ii) contest the lien or claim in good faith by appropriate proceedings that operate to stay its enforcement, and (iii) pay promptly any final adverse judgment entered in any such proceeding. If Tenant does not comply with these requirements, Landlord may discharge the lien or claim, and the amount paid, as well as attorney's fees and other expenses incurred by Landlord, shall become Additional Rent payable by Tenant on demand. D. Removal Upon Termination. Upon the termination of this Lease or Tenant's right of possession, Tenant shall remove from the Premises and Project its trade fixtures, furniture, moveable equipment and other personal property. Tenant shall repair all damage caused by the installation or removal of any of the foregoing items. If Tenant does not timely remove such property, then Tenant shall be conclusively presumed to have, at Landlord's election (i) conveyed such property to Landlord without compensation or (ii) abandoned such property, and Landlord may dispose of or store any part thereof in any manner at Tenant's sole cost, without waiving Landlord's right to claim from Tenant all expenses arising out of Tenant's failure to remove the property, and without liability to Tenant or any other person. Landlord shall have no duty to be a bailee of any such personal property. If Landlord elects abandonment, Tenant shall pay to Landlord, upon demand, any expenses incurred for disposition. VII. USE OF PREMISES. A. Limitation on Use. Tenant shall use the Premises only for the Permitted Use stated in the Schedule. Tenant shall not allow any use of the Premises which will negatively affect the cost of coverage of Landlord's insurance on the Project. Tenant shall not allow any inflammable or explosive liquids or materials to be kept on the Premises. Tenant shall not allow any use of the Premises which would cause the value or utility of any part of the Premises to diminish or would interfere with any other tenant or with the operation of the Project by Landlord. Tenant shall not permit any nuisance or waste to occur in, on, or about the Project, or allow any offensive noise or odor in or around the Project. At the end of each business day, or more frequently if necessary, Tenant shall deposit all garbage and other trash (excluding any inflammable, explosive and /or hazardous materials) in trash bins or containers approved by Landlord in locations designated by Landlord from time to time. If any governmental authority shall deem the Premises to be a "place of public accommodation" under the Americans with Disabilities Act ( "ADA ") or any other comparable law as a result of Tenant's use, Tenant shall either modify its use to cause such authority to rescind its designation or be responsible for any alterations, structural or otherwise, required to be made to the Building or the Premises under such laws. B. Signs. Tenant shall not place on any portion of the Premises any sign, placard, lettering, banner, displays, graphic, decor or other advertising or communicative material which is visible from the exterior of the Premises without Landlord's prior written approval. Any approved signs shall strictly conform to all Governmental Requirements, any relevant documents (by way of example only, covenants or restrictions) recorded against the Project, and Landlord's Signage Standards in effect at the time, and shall be installed and removed at Tenant's expense. Tenant, at its sole expense, shall maintain such signs in good condition and repair during the Term. Prior to the expiration or earlier termination of this Lease, Tenant at its sole cost shall remove all of its exterior signage and repair any and all damage caused to the Office Lease Page I I of 39 8/26/2011 #5556 Arcadia, CA (Facilities) Building and /or Project (including and fading or discoloration) by such signs and /or the removal of such signs from the Building and /or Project. C. Parking. Tenant shall have the non - exclusive right to park in the Project's parking facilities in common with other tenants of the Project upon terms and conditions, as may from time to time be established by Landlord. Tenant agrees not to overburden the parking facilities (i.e., use more than the number of unassigned parking stalls indicated on the Schedule) and agrees to cooperate with Landlord and other tenants in the Project in the use of the parking facilities. Landlord reserves the right in its discretion to determine whether the parking facilities are becoming crowded and to allocate and assign parking spaces among Tenant and the other tenants in the Project. Landlord shall have the right to charge Tenant the portion that Landlord deems allocable to Tenant of any charges (e.g_, fees or taxes) imposed by the Regional Air Quality Control Board or other governmental or quasi - governmental agency in connection with the parking facilities (e v_ in connection with operation or use of the parking facilities). Landlord shall not be liable to Tenant, nor shall this Lease be affected, if any parking is impaired by (or if any parking charges are imposed as a result of) any moratorium, initiative, referendum, law, ordinance, regulation or order passed, issued or made by any governmental or quasi - governmental body. D. Prohibition Against Use of Roof and Structure of Building. Tenant shall be prohibited from using all or any portion of the roof of the Building or any portion of the structure of the Building during the Term of this Lease (or any extensions thereof) for any purposes (including without limitation for the installation, maintenance and repair of a satellite dish and /or other telecommunications equipment), without Landlord's prior written consent, which Landlord may withhold in its sole and absolute discretion. Nothing herein shall limit or restrict Landlord's rights under Section XII. J. E. Cafeteria. At no additional cost to Tenant, other than the purchase of items therein, Tenant shall have full access to the Project's cafeteria. Neither Tenant nor any of its employees shall be entitled to subsidized pricing with respect to purchases in the cafeteria. Landlord shall operate and maintain the cafeteria at Landlord's sole cost and expense, subject to the exceptions stated herein; provided however, that Landlord shall have the right to cease operation of the cafeteria at any time and from time to time. F. Other Amenities at No Additional Cost to Tenant. Tenant shall have full access to the ATM facilities (but not the credit union) serving the Project. Tenant shall not have access to the fitness center located in the Building. VIII. GOVERNMENTAL REQUIREMENTS AND BUILDING RULES. A. Compliance in Premises. Tenant shall, at its sole cost and expense, (1) comply with all Governmental Requirements; with any occupancy certificate issued for the Premises; and with the provisions of all recorded documents affecting the Premises, insofar as any thereof relates to or affects the condition, use or occupancy of the Premises; and (2) take all proper and necessary action to cause the Premises, including any repairs, replacements, alterations and improvements thereto, to be maintained, constructed, used and occupied in compliance with applicable Governmental Requirements, including any applicable ADA requirements, whether or not such requirements are based on Tenant's use of the Premises, and further to assume all responsibility to ensure the Premises' continued compliance with all Governmental Requirements, including applicable ADA requirements, throughout the Term. B. Comlliance in Common Areas. Landlord shall perform any work required under any applicable Governmental Requirements, including the ADA, to be performed in the common areas of the Project, except that, as provided below, Tenant shall be solely responsible for all such compliance work which is required as a result of Tenant's particular use or activities (e.g., the initial Tenant Work or Tenant's proposed alterations or repairs). With respect to any compliance work required outside the Office Lease Page 12 of 39 8/26/2011 #5556 Arcadia, CA (Facilities) Premises for which Tenant is responsible hereunder, Landlord shall have the right to perform such work, or require that Tenant perform such work with contractors, subcontractors, engineers and architects approved by Landlord; and if Landlord elects to perform such work outside the Premises, Tenant shall reimburse Landlord for the cost of such work within ten (10) days following receipt of invoices therefor. Landlord makes no representations or warranties regarding the Project's or the Premises' compliance with applicable Governmental Requirements as of the date of this Lease. C. Rules and Regulations. Tenant shall also comply with all reasonable rules for the Project which may be established and amended from time to time by Landlord. The present rules and regulations are contained in Exhibit B. Failure by another tenant to comply with the rules or failure by Landlord to enforce them shall not relieve Tenant of its obligation to comply with the rules or make Landlord responsible to Tenant in any way. Landlord shall use reasonable efforts to apply the rules and regulations uniformly with respect to Tenant and any other tenants in the Project under leases containing rules and regulations similar to this Lease. If Tenant performs alterations or repairs, Tenant shall comply with the provisions of Article VI of this Lease. IX. WAIVER OF CLAIMS; INDEMNIFICATION; INSURANCE. A. Waiver of Claims. Landlord shall not be liable to Tenant, or to any other person or entity, from or for any event, occurrence, act, neglect, omission, loss, damage, injury or death, howsoever caused or whenever occurring, including damages occasioned by falling plaster, electricity, plumbing, gas, water, steam, sprinkler or other pipe and sewage system or by the bursting, running or leaking of any tank, washstand, closet or waste or other pipes in or about the Premises or the the Building, damages occasioned by water being upon or coming through the roof, skylight, vent, trapdoor or otherwise of any portion of the Building, damages arising from any act or neglect of tenants, owners or other occupants of adjacent property, or of their employees, agents, contractors, licensees or invitees, or the public, or damages for any failure to furnish, or interruption of, service of any water, gas, electricity and /or telephone, or caused by fire, accident, riot, strike, labor disputes, acts of God, or the making of or failure to make any repairs or improvements, or damages arising from the loss of technology, rights or services. B. Indemnification. Tenant shall indemnify, defend, protect and hold Landlord harmless from and against any and all claims, proceedings, damages, causes of action, liability, costs or expense (including attorneys' fees) arising from or in connection with or caused by: (i) any act or omission of Tenant or any subtenant, licensee or concessionaire of Tenant, or their respective contractors, invitees, agents, servants or employees, wheresoever the same may occur; (ii) any injury, death or damage to any person or property occurring in, on or about the Premises, or any part thereof, the sidewalks adjoining the same and any service delivery facilities used by Tenant, unless such injury, death or damage is due to the sole negligence or willful misconduct of Landlord or its agents, contractors or employees; or (iii) any breach or default by Tenant in the performance of its obligations hereunder C. Tenant's Insurance /Self - Insurance. Tenant Tenant is a public agency and is self - insured through participation in a joint powers insurance authority known as California Insurance Pool Authority ( "CIPA "). Any other occupants regularly utilizing the Premises will be public entities that also are self - insured. Tenant will provide the following insurance with respect to the Premises: 1. Coverage. a) Commercial General Liability Insurance, including contractor's liability coverage, contractual liability coverage, completed operations coverage, broad form property damage endorsement, and contractor's protective liability coverage, to afford protection with limits, for each occurrence, of not less than Office Lease Page 13 of 39 8/26/2011 #5556 Arcadia, CA (Facilities) One Million Dollars ($1,000,000) with respect to personal injury, death or property damage.. b) Property Insurance covering the improvements, fixtures and personal property; c) Workers Compensation Insurance as statutorily required. 2. Tenant Contractors. Tenant shall cause any contractor of Tenant performing work on the Premises to maintain insurance as follows, with such other terms, coverages and insurers, as Landlord shall reasonably require from time to time: a) Commercial General Liability Insurance, including contractor's liability coverage, contractual liability coverage, completed operations coverage, broad form property damage endorsement, and contractor's protective liability coverage, to afford protection with limits, for each occurrence, of not less than One Million Dollars ($1,000,000) with respect to personal injury, death or property damage. b) Workers' compensation or similar insurance in form and amounts required by law, and Employer's Liability with not less than the following limits: Each Accident: $500,000 Disease -- Policy Limit: $500,000 Disease - -Each Employee: $500,000 Such insurance shall contain a waiver of subrogation provision in favor of Landlord and its agents. Tenant's contractor's insurance shall be primary and not contributory to that carried by Tenant, Landlord, their agents or mortgagees. Tenant and Landlord, and if any, Landlord's building manager or agent, mortgagee or ground lessor shall be named as additional insured on Tenant's contractor's insurance policies. D. Landlord's Insurance. Subject to reimbursement as an Operating Cost in accordance with the provisions of Article II hereof, Landlord shall procure and maintain in effect throughout the Term of this Lease commercial general liability insurance, property insurance and /or such other types of insurance as Landlord reasonably deems necessary or advisable to carry. Such coverages shall be in such amounts, from such companies and on such other terms and conditions as Landlord may from time to time reasonably determine, and Landlord shall have the right, but not the obligation, to change, cancel, decrease or increase any insurance coverages in respect of the Building, add additional forms of insurance as Landlord shall deem reasonably necessary, and /or obtain umbrella or other policies covering both the Building and other assets owned by or associated with Landlord or its affiliates, in which event the cost thereof shall be equitably allocated. X. FIRE AND OTHER CASUALTY. A. Termination. If a fire or other casualty causes damage to the Building or the Premises, and sufficient insurance proceeds will be available to Landlord to cover the cost of any restoration to the Building and Premises, Landlord shall engage a registered architect to estimate, within one (1) month of Office Lease Page 14 of 39 8/26/2011 #5556 Arcadia, CA (Facilities) the casualty, to both Landlord and Tenant the amount of time needed to restore the Building and the Premises to tenantability, using standard working methods without the payment of overtime and other premiums. If the time needed exceeds twelve (12) months from the beginning of the restoration, or two (2) months therefrom if the restoration would begin during the last twelve (12) months of the Lease, then in the case of the Premises, either Landlord or Tenant may terminate this Lease, and in the case of the Building, Landlord may terminate this Lease, by notice to the other party within ten (10) days after the notifying party's receipt of the architect's estimate. If sufficient insurance proceeds will not be available to Landlord to cover the cost of any restoration to the Building or the Premises, Landlord may terminate this Lease by written notice to Tenant. Any termination pursuant to this Section X.A shall be effective thirty (30) days from the date of such termination notice and Rent shall be paid by Tenant to that date, with an abatement for any portion of the Premises which has been untenantable after the casualty. B. Restoration. If a casualty causes damage to the Building or the Premises but this Lease is not terminated for any reason, then Landlord shall obtain the applicable insurance proceeds and diligently restore the Building and the Premises subject to current Governmental Requirements. Landlord's obligation, should it elect or be obligated to repair or rebuild, shall be limited to the basic Premises, building- standard tenant improvements, or the basic Building, as the case may be, and Tenant shall, at Tenant's expense, replace or fully repair damaged improvements made pursuant to Section IV C and Article VI hereof, any tenant improvements in excess of the building standard, personal property and fixtures. Rent shall be abated on a per diem basis during the restoration for any portion of the Premises which is untenantable, except to the extent that the casualty was caused by the negligence or intentional misconduct of Tenant, its agents, employees, contractors, subtenants or assignees. Tenant shall not be entitled to any compensation or damages from Landlord for loss of the use of the Premises, damage to Tenant's personal property and trade fixtures or any inconvenience occasioned by such damage, repair or restoration. Tenant hereby waives the provisions of Section 1932, Subdivision 2, and Section 1933, Subdivision 4, of the California Civil Code, and the provisions of any similar law hereinafter enacted. XI. EMINENT DOMAIN. If a part of the Project is taken by eminent domain or deed in lieu thereof which is so substantial that the Premises cannot reasonably be used by Tenant for the operation of its business, then either party may terminate this Lease effective as of the date of the taking. If any substantial portion of the Project is taken without affecting the Premises, then Landlord may terminate this Lease as of the date of such taking. Rent shall abate from the date of the taking in proportion to any part of the Premises taken. The entire award for a taking of any kind shall be paid to Landlord, and Tenant shall have no right to share in the award. All obligations accrued to the date of the taking shall be performed by the party liable to perform said obligations, as set forth herein. XII. RIGHTS RESERVED TO LANDLORD. Landlord may exercise at any time any of the following rights respecting the operation of the Project without liability to Tenant of any kind: A. Sig_s. To install, modify and /or maintain any signs on the exterior and in the interior of the Building or on the Project, and to approve at its sole discretion, prior to installation, any of Tenant's signs in the Premises visible from the common areas or the exterior of the Building. B. Keys. To retain and use at any time passkeys to enter the Premises or any door within the Premises. Tenant shall not alter or add any lock or bolt without Landlord's consent. C. Access. To have access to the Premises with twenty -four hours' prior notice (except in the case of an emergency, in which case Landlord shall have the right to immediate access) to inspect the Premises, to post notices of non - responsibility in connection with any Work, to make repairs, alterations, additions or improvements to the Premises or Building, and to perform any other obligations of Landlord hereunder, all without abatement of Rent. Office Lease Page 15 of 39 8/26/2011 #5556 Arcadia, CA (Facilities) D. Preparation for Reoccupancy. To decorate, remodel, repair, alter or otherwise prepare the Premises for reoccupancy at any time after Tenant abandons the Premises, without relieving Tenant of any obligation to pay Rent. E. Heavy Articles. To approve the weight, size, placement and time and manner of movement within the Building of any safe, central filing system or other heavy article of Tenant's property. Tenant shall move its property entirely at its own risk. F. Show Premises. To show the Premises to prospective purchasers, tenants, brokers, lenders, mortgagees, investors, rating agencies or others at any reasonable time, provided that Landlord gives prior notice to Tenant and does not materially interfere with Tenant's use of the Premises. G. Use of Lockbox. To designate a lockbox collection agent for collections of amounts due Landlord. In that case, the date of payment of Rent or other sums shall be the date of the agent's receipt of such payment or the date of actual collection if payment is made in the form of a negotiable instrument thereafter dishonored upon presentment. However, Landlord may reject any payment for all purposes as of the date of receipt or actual collection by mailing to Tenant within a reasonable time after such receipt or collection a check equal to the amount sent by Tenant. H. Repairs and Alterations. To make repairs or alterations to the Project and in doing so transport any required material through the Premises, to close entrances, doors, corridors, elevators and other facilities in the Project, to open any ceiling in the Premises, or to temporarily suspend services or use of common areas in the Building. Landlord may perform any such repairs or alterations during ordinary business hours, except that Tenant may require any work in the Premises to be done after business hours if Tenant pays Landlord for overtime and any other expenses incurred. Landlord may do or permit any work on any nearby building, land, street, alley or way. I. Buildina Services. To install, use and maintain through the Premises, pipes, conduits, wires and ducts serving the Building, provided that such installation, use and maintenance does not unreasonably interfere with Tenant's use of the Premises. J. Use of Roof. To permit Landlord (or any entity selected by Landlord) to install, operate, maintain and repair any satellite dish, antennae, equipment, or other facility on the roof of the Building or to use the roof of the Building in any other manner, provided that such installation, operation, maintenance, repair or use does not unreasonably interfere with Tenant's use of the Premises. K. Other Actions. To take any other action which Landlord deems reasonable in connection with the operation, maintenance or preservation of the Building and the Project. XIII. DEFAULTS. A. Tenant's Default. Any of the following shall constitute a default by Tenant: 1. Rent Default. Tenant fails to pay any Rent when due (if paying in monthly installments) within five (5) days after Landlord's notice, unless Tenant has failed more than two (2) times during a given Lease Year timely to pay any Rent so that Landlord has been required to give notice hereunder, in which event no written notice or cure period shall thereafter be required or applicable during such Lease Year. In the event that Tenant is making annual Rent payments, Tenant fails to pay any Rent when due within thirty (30) days of the date the payment is due regardless of Landlord's notice to Tenant; Office Lease Page 16 of 39 8/26/2011 #5556 Arcadia, CA (Facilities) 2. Assianment/Sublease or Hazardous Substances Default. Tenant defaults in its obligations under Article XVIII (Assignment and Sublease) or Article XXV (Hazardous Substances) and does not cure in accordance with the cure requirements set forth in this Lease; 3. Other Performance Default. Tenant fails to perform any other obligation to Landlord under this Lease, and this failure continues for ten (10) days after written notice from Landlord or Landlord's agent, except that if Tenant begins to cure its failure within the ten (10) day period but cannot reasonably complete its cure within such period, then, so long as Tenant continues to diligently attempt to cure its failure, the ten (10) day period shall be extended to sixty (60) days, or such lesser period as is reasonably necessary to complete the cure; 4. Credit Default. One of the following credit defaults occurs: a) Tenant (or any guarantor of Tenant's obligations hereunder) commences any proceeding under any law relating to bankruptcy, insolvency, reorganization or relief of debts, or seeks appointment of a receiver, trustee, custodian or other similar official for the Tenant (or the guarantor) or for any substantial part of its property, or any such proceeding is commenced against Tenant (or the guarantor) and either remains undismissed for a period of thirty (30) days or results in the entry of an order for relief against Tenant (or the guarantor) which is not fully stayed within seven (7) days after entry; b) Tenant (or any guarantor of Tenant's obligations hereunder) becomes insolvent or bankrupt, does not generally pay its debts as they become due, or admits in writing its inability to pay its debts, or makes a general assignment for the benefit of creditors; c) Any third party obtains a levy or attachment under process of law against Tenant's leasehold interest. 5. Vacation or Abandonment Default. Tenant vacates or abandons the Premises. Tenant acknowledges and agrees that, notwithstanding the foregoing provisions of this Article XIII, Tenant shall be in default for purposes of Section 1161 of the California Code of Civil Procedure immediately following Tenant's failure to perform or comply with any covenants, agreements, terms or conditions of this Agreement to be performed or observed by Tenant, including, without limitation, Tenant's failure to pay Rent when due, and that any notices required to be given by Landlord under this Article XIII shall, in each case, be in lieu of, and not in addition to, any notice required under Section 1161 of the California Code of Civil Procedure, and shall be deemed to satisfy the requirement, if any, that notice be given pursuant to such section. B. Landlord Defaults. Landlord shall be in default hereunder if Landlord has not begun and pursued with reasonable diligence the cure of any failure of Landlord to meet its obligations hereunder within thirty (30) days after the receipt by Landlord of written notice from Tenant of the alleged failure to perform. In no event shall Tenant have the right to terminate or rescind this Lease as a result of Landlord's default as to any covenant or agreement contained in this Lease. Tenant hereby waives such remedies of termination and rescission and hereby agrees that Tenant's remedies for default hereunder and for breach of any promise or inducement shall be limited to a suit for damages and /or injunction. In addition, Tenant hereby covenants that, prior to the exercise of any such remedies, Tenant will give notice and a reasonable time to cure any default by Landlord to any holder of a mortgage or deed of trust encumbering Landlord's interest in the Property of which Tenant has been given notice. Notwithstanding Office Lease Page 17 of 39 8/26/2011 #5556 Arcadia, CA (Facilities) anything contained herein to the contrary, Landlord shall not be in default under this Lease to the extent Landlord is unable to perform any of its obligations on account of any prevention, delay, stoppage due to strikes, lockouts, inclement weather, labor disputes, inability to obtain labor, materials, fuels, energy or reasonable substitutes therefor, governmental restrictions, regulations, controls, actions or inaction, civil commotion, fire or other acts of god, national emergency, or any other cause of any kind beyond the reasonable control of Landlord (except financial inability). XIV. LANDLORD REMEDIES. UPON A DEFAULT, LANDLORD SHALL HAVE THE FOLLOWING REMEDIES, IN ADDITION TO ALL OTHER RIGHTS AND REMEDIES PROVIDED BY LAW OR OTHERWISE PROVIDED IN THIS LEASE, TO WHICH LANDLORD MAY RESORT CUMULATIVELY OR IN THE ALTERNATIVE: A. Termination of Lease. Landlord may elect by notice to Tenant to terminate this Lease, in which event, Tenant shall immediately vacate the Premises and deliver possession to Landlord. B. Civil Code Section 1951.4 Remedy. Even though Tenant has breached this Lease, this Lease shall continue in effect for so long as Landlord does not terminate Tenant's right to possession, and Landlord shall have all of its rights and remedies, including the right, pursuant to California Civil Code Section 1951.4, to recover all rent as it becomes due under this Lease, if Tenant has the right to sublet or assign, subject only to reasonable limitations. Acts of maintenance or preservation or efforts to relet the Premises or the appointment of a receiver upon initiative of Landlord to protect Landlord's interest under this Lease shall not constitute a termination of Tenant's right to possession unless written notice of termination is given by Landlord to Tenant. C. Lease Termination Damages. If Landlord elects to terminate this Lease, then this Lease shall terminate on the date for termination set forth in such notice. Tenant shall immediately vacate the Premises and deliver possession to Landlord, and Landlord may repossess the Premises and may, at Tenant's sole cost, remove any of Tenant's signs and any of its other property, without relinquishing its right to receive Rent or any other right against Tenant. On termination, Landlord has the right to recover from Tenant as damages: 1. The worth at the time of award of unpaid Rent and other sums due and payable which had been earned at the time of termination; plus 2. The worth at the time of award of the amount by which the unpaid Rent and other sums due and payable which after termination until the time of award exceeds the amount of such Rent loss that Tenant proves could have been reasonably avoided; plus 3. The worth at the time of award of the amount by which the unpaid Rent and other sums due and payable for the balance of the Term after the time of award exceeds the amount of such Rent loss that Tenant proves could be reasonably avoided; plus 4. Any other amount necessary to compensate Landlord for all the detriment proximately caused by Tenant's failure to perform Tenant's obligations under this Lease, or which, in the ordinary course of things, would be likely to result therefrom, including, without limitation, any costs or expenses incurred by Landlord: (i) in retaking possession of the Premises; (ii) in maintaining, repairing, preserving, restoring, replacing, cleaning, altering or rehabilitating the Premises or any portion thereof, including such acts for reletting to a new tenant or tenants; (iii) for leasing commissions; or (iv) for any other costs necessary or appropriate to relet the Premises; plus Office Lease Page 18 of 39 8/26/2011 #5556 Arcadia, CA (Facilities) 5. At Landlord's election, such other amounts in addition to or in lieu of the foregoing as may be permitted from time to time by the laws of the State of California. The "worth at the time of award" of the amounts referred to in Sections XIV.C(1) and XIV.C(2) is computed by allowing interest at the Interest Rate on the unpaid rent and other sums due and payable from the termination date through the date of award. The "worth at the time of award" of the amount referred to in Section XIV.C(3) is computed by discounting such amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of award plus one percent (1 %). Tenant waives redemption or relief from forfeiture under California Code of Civil Procedure Sections 1174 and 1179, or under any other present or future law, if Tenant is evicted or Landlord takes possession of the Premises by reason of any default of Tenant hereunder. D. Landlord's Remedies Cumulative. All of Landlord's remedies under this Lease shall be in addition to all other remedies Landlord may have at law or in equity, including, without limitation, the remedy described in California Civil Code Section 1951.4 (pursuant to which Landlord may continue the Lease in effect after Tenant's breach and abandonment and recover as rent as it becomes due if Tenant has the right to sublet or assign the Lease, subject to reasonable limitations). Waiver by Landlord of any breach of any obligation by Tenant shall be effective only if it is in writing, and shall not be deemed a waiver of any other breach, or any subsequent breach of the same obligation. The possession of Tenant's funds, negotiation of Tenant's negotiable instruments, or acceptance of Tenant's payment by Landlord or its agents shall not constitute a waiver of any breach by Tenant, and if such possession, negotiation or acceptance occurs after Landlord's notice to Tenant, or termination of the Lease or of Tenant's right to possession, such possession, negotiation or acceptance shall not affect such notice or termination. Acceptance of payment by Landlord after commencement of a legal proceeding or final judgment shall not affect such proceeding or judgment. Landlord may advance such monies and take such other actions for Tenant's account as reasonably may be required to cure or mitigate any default by Tenant. Tenant shall immediately reimburse Landlord for any such advance, and such sums shall bear interest at the Interest Rate until paid. E. WAIVER OF TRIAL BY JURY. EACH PARTY WAIVES TRIAL BY JURY IF ANY LEGAL PROCEEDING IS BROUGHT BY THE OTHER IN CONNECTION WITH THIS LEASE. EACH PARTY SHALL BRING ANY ACTION AGAINST THE OTHER IN CONNECTION WITH THIS LEASE IN A FEDERAL OR STATE COURT LOCATED IN CALIFORNIA, CONSENTS TO THE JURISDICTION OF SUCH COURTS, AND WAIVES ANY RIGHT TO HAVE ANY PROCEEDING TRANSFERRED FROM SUCH COURTS ON THE GROUND OF IMPROPER VENUE OR INCONVENIENT FORUM. THE PROVISIONS OF THIS SECTION XIII.E SHALL SURVIVE THE EXPIRATION OR EARLIER TERMINATION OF THIS LEASE. XV. SURRENDER. Upon the expiration or earlier termination of this Lease for any reason, Tenant shall surrender the Premises to Landlord in its condition existing as of the date Landlord delivers possession of the Premises to Tenant, normal wear and tear and damage by fire or other casualty excepted, with all interior walls repaired and repainted if marked or damaged, all carpets clean, all broken, marred or nonconforming acoustical ceiling tiles replaced, the plumbing and electrical systems and lighting in good order and repair, including replacement of any burned out or broken light bulb or ballasts, all to the reasonable satisfaction of Landlord. Tenant shall remove from the Premises all Tenant's personal property. If Tenant fails to remove Tenant's personal property, and such failure continues after the termination of this Lease, Landlord may retain or dispose of such property and all rights of Tenant with respect to it shall cease, or Landlord may place all or any portion of such property in public storage for Tenant's account. Tenant shall be liable to Landlord for costs of removal of Tenant's personal property and storage and transportation costs of same, together with interest at the Interest Rate Office Lease Page 19 of 39 8/26/2011 45556 Arcadia, CA (Facilities) from the date of expenditure by Landlord. If the Premises are not so surrendered at the termination of this Lease, Tenant shall indemnify Landlord against all loss or liability, including attorneys' fees and costs, resulting from delay by Tenant in so surrendering the Premises. XVI. HOLDOVER. Tenant shall have no right to holdover possession of the Premises after the expiration or termination of this Lease without Landlord's prior written consent which Landlord may withhold in its sole and absolute discretion. If, however, Tenant retains possession of any part of the Premises after the Term, Tenant shall become a tenant at sufferance only, for the entire Premises upon all of the terms of this Lease as might be applicable to such tenancy, except that Tenant shall pay all of the Base Rent, Operating Cost and Tax Share Rent at double the rate in effect immediately prior to such holdover, computed on a monthly basis for each full or partial month Tenant remains in possession. Tenant shall also pay Landlord all of Landlord's direct and consequential damages resulting from Tenant's holdover. No acceptance of Rent or other payments by Landlord under these holdover provisions shall operate as a waiver of Landlord's right to regain possession or any other of Landlord's remedies. XVII. SUBORDINATION TO GROUND LEASES AND MORTGAGES. A. Subordination. This Lease shall be subordinate to any present or future ground lease or mortgage respecting the Project, and any amendments to such ground lease or mortgage, at the election of the ground lessor or mortgagee as the case may be, effected by notice to Tenant in the manner provided in this Lease. The subordination shall be effective upon such notice, but at the request of Landlord or ground lessor or mortgagee, Tenant shall within ten (10) days of the request, execute and deliver to the requesting party any reasonable documents provided to evidence the subordination, provided that the mortgagee recognizes this Lease in the form of a non - disturbance agreement. Any mortgagee has the right, at its sole option, to subordinate its mortgage to the terms of this Lease, without notice to, nor the consent of, Tenant. B. Termination of Ground Lease or Foreclosure of Mortgage. If any ground lease is terminated or mortgage foreclosed or deed in lieu of foreclosure given and the ground lessor, mortgagee, or purchaser at a foreclosure sale shall thereby become the owner of the Project, Tenant shall attorn to such ground lessor or mortgagee or purchaser without any deduction or setoff by Tenant, and this Lease shall continue in effect as a direct lease between Tenant and such ground lessor, mortgagee or purchaser. The ground lessor or mortgagee or purchaser shall be liable as Landlord only during the time such ground lessor or mortgagee or purchaser is the owner of the Project. At the request of Landlord, ground lessor or mortgagee, Tenant shall execute and deliver within ten (10) days of the request any document furnished by the requesting party to evidence Tenant's agreement to attorn. C. Notice and Right to Cure. Tenant agrees to send by registered or certified mail to any ground lessor or mortgagee, identified in any notice from Landlord to Tenant, a copy of any notice of default sent by Tenant to Landlord. If Landlord fails to cure such default within the required time period under this Lease, but ground lessor or mortgagee begins to cure within ten (10) days after such period and proceeds diligently to complete such cure, then ground lessor or mortgagee shall have such additional time as is necessary to complete such cure, including any time necessary to obtain possession if possession is necessary to cure, and Tenant shall not begin to enforce its remedies so long as the cure is being diligently pursued. D. Definitions. As used in this Article XVII, "mortgage" shall include "trust deed" and "deed of trust "; "mortgagee" shall include "trustee ", "beneficiary" and the mortgagee of any ground lessee; and "ground lessor ", "mortgagee ", and "purchaser at a foreclosure sale" shall include, in each case, all of its successors and assigns, however remote. Office Lease Page 20 of 39 8/26/2011 #5556 Arcadia, CA (Facilities) XVIII. ASSIGNMENT AND SUBLEASE. A. In General. Tenant shall not, without Landlord's prior written consent, in each case: (i) make or allow any assignment or transfer, by operation of law or otherwise, of any part of Tenant's interest in this Lease or (ii) sublet any part of the Premises (all of the foregoing are hereinafter sometimes referred to individually as a "Transfer ", and collectively as "Transfers ", and any person to whom any Transfer is made or sought to be made is hereinafter sometimes referred to as a "Transferee ", and any person by whom any Transfer is made or sought to be made is hereinafter sometimes referred to as a "Transferor "). Tenant shall remain primarily liable for all of its obligations under this Lease, notwithstanding any Transfer. No consent granted by Landlord shall be deemed to be a consent to any subsequent Transfer. Tenant shall pay all of Landlord's attorneys' fees and other expenses incurred in connection with any consent requested by Tenant or in considering any proposed Transfer. Any Transfer without Landlord's prior written consent shall be void. If Tenant shall assign this Lease or sublet or otherwise Transfer the Premises in its entirety, any rights of Tenant to renew this Lease, to extend the Term or to lease additional space in the Project shall be extinguished thereby and will not be transferred to the Transferee, all such rights being personal to the Tenant named herein. In addition, Tenant shall not, without Landlord's prior written consent, which Landlord may withhold in its sole discretion, mortgage, pledge or encumber this Lease, the term or estate hereby granted or any interest hereunder. B. Landlord's Consent. Landlord will not unreasonably withhold its consent to any proposed Transfer. It shall be reasonable for Landlord to withhold its consent to any Transfer if (i) Tenant is in default under this Lease, (ii) the proposed Transferee is a tenant in the Project or an affiliate of such a tenant or a party that Landlord has identified as a prospective tenant in the Project, (iii) the financial responsibility, nature of business, and character of the proposed Transferee are not all reasonably satisfactory to Landlord, (iv) in the reasonable judgment of Landlord the purpose for which the Transferee intends to use the Premises (or a portion thereof) is not in keeping with Landlord's standards for the Building or are in violation of the terms of this Lease or any other leases in the Project, (v) the proposed Transferee is a government entity, (vi) the proposed Transfer is between a Transferee of Tenant and a third party, or (vii) the proposed effective rent under the sublease or other Transfer is less than the effective rent then being quoted by Landlord for comparable space in the Building for a comparable term, calculated using a present value analysis; or if no comparable space in the Building is available for lease for a comparable term at the time of the proposed Transfer, then it shall be reasonable for Landlord to withhold its consent to such Transfer if the effective rent charged to such proposed Transferee is less than the fair market rental value of the proposed Transfer Premises (as defined in Section 17.0 below) as of the date of the proposed Transfer, as determined by Landlord. The foregoing shall not exclude any other reasonable basis for Landlord to withhold its consent. C. Procedure. Tenant shall notify Landlord of any proposed Transfer at least thirty (30) days prior to its proposed effective date. The notice shall include the name and address of the proposed Transferee, its corporate affiliates in the case of a corporation and its partners in the case of a partnership, a description of the portion of the Premises that is subject to the Transfer (the "Transfer Premises "), a calculation of the Transfer Premium (as defined in Section WILE below) payable in connection with the Transfer, an executed copy of the proposed Transfer agreement, and sufficient information to permit Landlord to determine the financial responsibility and character of the proposed Transferee (including, without limitation, the most recent financial statements for the proposed Transferee). As a condition to the effectiveness of any assignment of this Lease, the assignee shall execute and deliver to Landlord, at least fifteen (15) days prior to the effective date of the assignment, Landlord's standard form of Consent to Assignment, providing for, among other things, an assumption of all of the obligations of Tenant under this Lease. As a condition to the effectiveness of any other Transfer, Transferee shall execute and deliver to Landlord, at least fifteen (15) days prior to the effective date of such Transfer, Landlord's standard consent form, providing, among other things, (1) an assumption of all of the obligations of Tenant under Office Lease Page 21 of 39 8/26/2011 45556 Arcadia, CA (Facilities) this Lease to the extent applicable to the Transfer Premises (excluding the payment of Rent), (2) the Transferee's obligation to indemnify Landlord and the other Indemnitees consistent with Tenant's indemnification obligations in Section IX.B above, and (3) the Transferee's agreement that any such Transfer shall be subordinate and subject to the provisions of this Lease, and if this Lease shall be terminated during the term of any such Transfer, Landlord shall have the right to: (a) treat such Transfer as cancelled and repossess the Transfer Premises by any lawful means, or (b) require that the Transferee attorn to and recognize Landlord as its landlord under any such Transfer. If Tenant shall default and fail to cure within the time permitted for cure under Article XIII above, Landlord is hereby irrevocably authorized, as Tenant's agent and attorney -in -fact, to direct any Transferee to make all payments under or in connection with the Transfer directly to Landlord (which Landlord shall apply towards Tenant's obligations under this Lease) until such default is cured. D. Change of Management or Ownership. Any transfer of the direct or indirect power to affect the management or policies of Tenant or direct or indirect change in 25% or more of the ownership interest in Tenant shall constitute an assignment of this Lease. E. Transfer Premium. 1. If Landlord consents to a Transfer, as a condition thereto which the parties hereby agree is reasonable, Landlord shall be entitled to receive, as Additional Rent hereunder, any Transfer Premium derived from such Transfer. As used herein, the term "Transfer Premium" means (a) in the case of an assignment, any consideration (including, without limitation, payment for leasehold improvements) paid by the assignee on account of such assignment, and (b) in the case of any other Transfer, all rent, additional rent or other consideration paid by the Transferee to the Transferor pursuant to such Transfer in excess of the base rent and additional rent payable by such Transferor during the term of the Transfer on a per rentable square foot basis. Payment of the Transfer Premium due Landlord hereunder shall be a joint and several obligation of Tenant and the Transferee, and shall be made to Landlord as follows: (i) in the case of an assignment, the Transferor shall pay the Transfer Premium to Landlord within ten (10) days after the Transferor receives the Transfer Premium; and (ii) in the case of any other Transfer, on the first day of each month during the term of the Transfer, the Transferee shall pay directly to Landlord the amount by which the rent, additional rent or other consideration due from the Transferee for such month exceeds the base rent and additional rent payable by the applicable Transferor for said month which is allocable to the Transfer Premises. 2. Upon Landlord's request, Tenant shall provide Landlord with reasonable documentation of Tenant's calculation of the Transfer Premium. Landlord or its authorized representatives shall have the right at all reasonable times to audit the books, records and papers of Tenant relating to any Transfer, and shall have the right to make copies thereof. If the Transfer Premium respecting any Transfer shall be found to be understated, Tenant shall within ten (10) days after demand pay the deficiency, and if understated by more than two percent (2 %), Tenant shall pay Landlord's costs of such audit. F. Recapture. In the case of a proposed assignment, sublease or other Transfer, Landlord may terminate this Lease as to the Transfer Premises by giving Tenant written notice (the "Recapture Notice ") within thirty (30) days after Landlord's receipt of the proposed fully executed Transfer agreement submitted by Tenant for Landlord's consent. Such termination shall be effective as of the termination date set forth in Landlord's Recapture Notice, and all obligations of Landlord and Tenant under this Lease as to such terminated space shall expire as of such termination date, except those that expressly survive any termination of this Lease. Office Lease Page 22 of 39 8/26/2011 45556 Arcadia, CA (Facilities) XIX. CONVEYANCE BY LANDLORD. If Landlord shall at any time transfer its interest in the Project or this Lease, Landlord shall be released of any obligations occurring after such transfer, except the obligation to return to Tenant any security deposit not delivered to its transferee, and Tenant shall look solely to Landlord's successors for performance of such obligations. This Lease shall not be affected by any such transfer. XX. ESTOPPEL CERTIFICATE. Each party shall, within ten (10) days of receiving a request from the other party, execute, acknowledge in recordable form, and deliver to the other party or its designee a certificate stating, subject to a specific statement of any applicable exceptions, that the Lease as amended to date is in full force and effect, that the Tenant is paying Rent and other charges on a current basis, and that to the best of the knowledge of the certifying party, the other party has committed no uncured defaults and has no offsets or claims. The certifying party may also be required to state the date of commencement of payment of Rent, the Commencement Date, the Termination Date, the Base Rent, the current Operating Cost and Tax Share Rent estimates, the status of any improvements required to be completed by Landlord, the amount of any security deposit, and such other matters as may be reasonably requested. Tenant's failure to execute or deliver an estoppel certificate in the required time period shall constitute an acknowledgment by Tenant that the statements included in the estoppel certificate are true and correct, without exception. Tenant's failure to execute or deliver an estoppel certificate or other document or instrument required under this Article XX in a timely manner shall be a material breach of this Lease. XXI. NOTICES. All notices, consents, approvals and similar communications to be given by one party to the other under this Lease, shall be given in writing, mailed or personally delivered as follows: A. Landlord. To Landlord as follows: The Voris Companies, Inc. c/o Safeway Inc. Attn: Regional VP, PDA Facility 45556 618 Michillinda Avenue Arcadia, CA 91007 With a copy to: Safeway Inc. Attn: Real Estate Law PDA Facility #5556 5918 Stoneridge Mall Road Pleasanton, CA 94588 -3229 AND: Safeway Inc. Attn: Office Facilities Management PDA Facility #5556 5918 Stoneridge Mall Road Pleasanton, CA 94588 -3229 or to such other person at such other address as Landlord may designate by notice to Tenant. B. Tenant. To Tenant as follows: City of Arcadia 240 W. Huntington Drive Arcadia, CA 91066 Attn: Don Penman, City Manager or to such other person at such other address as Tenant may designate by notice to Landlord. Office Lease Page 23 of 39 8/26/2011 #5556 Arcadia, CA (Facilities) Mailed notices shall be sent by United States certified or registered mail, or by a reputable national overnight courier service, postage prepaid. Mailed notices shall be deemed to have been given on the earlier of actual delivery or three (3) business days after posting in the United States mail in the case of registered or certified mail, and one (1) business day in the case of overnight courier. XXII. REAL ESTATE BROKERS. Tenant represents to Landlord that Tenant has not dealt with any real estate broker with respect to this Lease except for any broker(s) listed in the Schedule, and no other broker is in any way entitled to any broker's fee or other payment in connection with this Lease. Tenant shall indemnify and defend Landlord against any Claims by any other broker or third party for any payment of any kind in connection with this Lease. XXIII. MISCELLANEOUS. A. Successors and Assigns. Subject to the limits on Tenant's assignment contained in Article XVIII, the provisions of this Lease shall be binding upon and inure to the benefit of all successors and assigns of Landlord and Tenant. B. Date Payments Are Due. Except for payments to be made by Tenant under this Lease which are due upon demand or are due in advance (such as Base Rent), Tenant shall pay to Landlord any amount for which Landlord renders a statement of account within ten (10) days of Tenant's receipt of Landlord's statement, unless otherwise specifically provided herein. C. Meaning of "Landlord ", "Re- Entry ", "including" and "Affiliate ". The term "Landlord" means only the owner of the Project and the lessor's interest in this Lease from time to time. The words "re- entry" and "re- enter" are not restricted to their technical legal meaning. The words "including" and similar words shall mean "without limitation." The word "affiliate" shall mean a person or entity controlling, controlled by or under common control with the applicable entity. "Control" shall mean the power directly or indirectly, by contract or otherwise, to direct the management and policies of the applicable entity. D. Time of the Essence. Time is of the essence of each provision of this Lease. E. No Option. The submission of this Lease to Tenant for review or execution does not create an option or constitute an offer to Tenant to lease the Premises on the terms and conditions contained herein, and this Lease shall not become effective unless and until it has been executed and delivered by both Landlord and Tenant. F. Severability. If any provision of this Lease is determined to be invalid, illegal or unenforceable, then such provision will be enforced to the maximum extent possible and the other provisions will remain fully effective and enforceable. G. Governing Law. This Lease shall be governed in all respects by the laws of the state in which the Project is located, without regard to the principles of conflicts of laws. H. Lease Modification. Tenant agrees to modify this Lease in any way requested by a mortgagee which does not cause increased expense to Tenant or otherwise materially adversely affect Tenant's interests under this Lease. 1. No Oral Modification. No modification of this Lease shall be effective unless it is a written modification signed by both parties. Office Lease Page 24 of 39 8/26/2011 #5556 Arcadia, CA (Facilities) J. Landlord's Right to Cure. Landlord may cure any default by Tenant; any expenses incurred shall become Additional Rent due from Tenant on demand by Landlord. K. Captions. The captions used in this Lease shall have no effect on the construction of this Lease. L. Authori1y. Landlord and Tenant each represents to the other that it has full power and authority to execute and perform this Lease. M. Landlord's Enforcement of Remedies. Landlord may enforce any of its remedies under this Lease either in its own name or through an agent. N. Entire Agreement. This Lease, together with all Exhibits and Appendices, constitutes the entire agreement between the parties. No representations or agreements of any kind have been made by either party which are not contained in this Lease. O. Landlord's Title. Landlord's title shall always be paramount to the interest of the Tenant, and nothing in this Lease shall empower Tenant to do anything which might in any way impair Landlord's title. P. Light and Air Rights. Landlord does not grant in this Lease any rights to light and air in connection with Project. Landlord reserves to itself, the Project, the Building below the improved floor of each floor of the Premises, the Building above the ceiling of each floor of the Premises, the exterior of the Premises and the areas on the same floor outside the Premises, along with the areas within the Premises required for the installation and repair of utility lines and other items required to serve other tenants of the Building. Q. Singular and Plural. Wherever appropriate in this Lease, a singular term shall be construed to mean the plural where necessary, and a plural term the singular. For example, if at any time two parties shall constitute Landlord or Tenant, then the relevant term shall refer to both parties together. R. No Recording by Tenant. Tenant shall not record in any public records any memorandum or any portion of this Lease. S. Exclusivity. Landlord does not grant to Tenant in this Lease any exclusive right except the right to occupy its Premises. T. No Construction Against Drafting Party. The rule of construction that ambiguities are resolved against the drafting party shall not apply to this Lease. U. Survival. The waivers of claims or rights, the releases and the obligations of Tenant under this Lease to indemnify, protect, defend and hold harmless Landlord and other Indemnitees shall survive the expiration or earlier termination of this Lease, and so shall all other obligations or agreements of Landlord or Tenant hereunder which by their terms survive the expiration or earlier termination of this Lease. V. Rent Not Based on Income. No Rent or other payment in respect of the Premises shall be based in any way upon net income or profits from the Premises. Tenant may not enter into or permit any sublease or license or other agreement in connection with the Premises which provides for a rental or other payment based on net income or profit. Office Lease Page 25 of 39 8/26/2011 45556 Arcadia, CA (Facilities) W. Building Manager and Service Providers. Landlord may perform any of its obligations under this Lease through its employees or third parties hired by the Landlord. X. Late Charge and Interest on Late Payments. Without limiting the provisions of Article XIII, if Tenant fails to pay any installment of Rent or other charge to be paid by Tenant pursuant to this Lease within five (5) business days after the same becomes due and payable, then Tenant shall pay a late charge equal to the greater of five percent (5 %) of the amount of such payment or $250. In addition, interest shall be paid by Tenant to Landlord on any late payments of Rent from the date due until paid at the rate provided in Section II.D(2). Such late charge and interest shall constitute Additional Rent due and payable by Tenant to Landlord upon the date of payment of the delinquent payment referenced above. Y. Attorneys' Fees. In any arbitration, quasi-judicial or administrative proceedings or any action in any court of competent jurisdiction, brought by either party to enforce any covenant or any of such party's rights or remedies under this Lease, including any action for declaratory relief, or any action to collect any payments required under this Lease or to quiet title against the other party, the prevailing party shall be entitled to reasonable attorneys' fees and all costs, expenses and disbursements in connection with such action, including the costs of reasonable investigation, preparation and professional or expert consultation, which sums may be included in any judgment or decree entered in such action in favor of the prevailing party. In addition, Tenant shall pay the attorneys' fees and other costs Landlord incurs in enforcing this Lease where an action or proceeding is not brought. XXIV. UNRELATED BUSINESS INCOME. If Landlord is advised by its counsel at any time that any part of the payments by Tenant to Landlord under this Lease may be characterized as unrelated business income under the United States Internal Revenue Code and its regulations, then Tenant shall enter into any amendment proposed by Landlord to avoid such income, so long as the amendment does not require Tenant to make more payments or accept fewer services from Landlord, than this Lease provides. XXV. HAZARDOUS SUBSTANCES. A. Prohibition Against Hazardous Substances. Tenant shall not cause or permit any Hazardous Substances to be brought upon, produced, stored, used, discharged or disposed of in or near the Project unless Landlord has consented to such storage or use in its sole discretion. Any handling, transportation, storage, treatment, disposal or use of any Hazardous Substances in or about the Project by Tenant, its agents, employees, contractors or invitees shall strictly comply with all applicable Governmental Requirements. Tenant shall indemnify, defend and hold Landlord harmless from and against any Claims which result from or arise out of the use, storage, treatment, transportation, release, or disposal of any Hazardous Substances on or about the Project by Tenant or any Tenant Parties. If any lender or governmental agency shall require testing for Hazardous Substances in the Premises, Tenant shall pay for such testing. Tenant's obligations under this Section shall survive the expiration or earlier termination of this Lease until all Claims within the scope of this Section XXV.A are fully, finally, and absolutely barred by the applicable statutes of limitations. B. Definition of "Hazardous Substances ". "Hazardous Substances" means any hazardous or toxic substances, materials or waste which are or become regulated by any local government authority, the state in which the Project is located or the United States government, including those substances described in the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C. Section 9601 et sec , the Resource Conservation and Recovery Act, as amended, 42 U.S.C. Section 6901 et sec.., any other applicable federal, state or local law, and the regulations adopted under these laws. Office Lease Page 26 of 39 8/26/2011 45556 Arcadia, CA (Facilities) XXVI. EXCULPATION. Landlord shall have no personal liability under this Lease; its liability shall be limited to its interest in the Building, and shall not extend to any other property or assets of the Landlord. In no event shall any officer, director, employee, agent, shareholder, partner, member or beneficiary of Landlord be personally liable for any of Landlord's obligations hereunder. IN WITNESS WHEREOF, the parties hereto have executed this Lease. LANDLORD: THE VONS COMPANIES, INC., a Michi a corpo ti By: ssistant Vice President By: " 6= np �. Assi ant Secretary Date of Execution: Form Approved: Ste_ TENANT: CITY OF ARCADIA, a California municipal corporation By: Name: Don Penman Title: City Manager Date of Execution: 1 161 Office Lease Page 27 of 39 8/26/2011 45556 Arcadia, CA (Facilities) EXHIBIT A DESCRIPTION OF PREMISES /SITE PLAN BOMA BUILDING AREA CALCULATIONS PONS HEADOUARTERS BUILDING 19JUL2011 LEVEL 1 (LOWER LEVEL) fr OCCUPANT AREA MAJOR VERTICAL PENETRATIONS BASE BUILDING CIRCULATION SERVICE + AMENITY AREAS VMS ONLY AMENITY Office Lease Page 28 of 39 8/26/2011 45556 Arcadia, CA (Facilities) EXHIBIT B RULES AND REGULATIONS (1) Tenant shall not place anything, or allow anything to be placed near the glass of any window, door, partition or wall which may, in Landlord's judgment, appear unsightly from outside of the Project. (2) The Project directory shall be available to Tenant solely to display names and their location in the Project, which display shall be as directed by Landlord. (3) The sidewalks, halls, passages, exits, entrances, elevators and stairways shall not be obstructed by Tenant or used by Tenant for any purposes other than for ingress to and egress from the Premises. Tenant shall lend its full cooperation to keep such areas free from all obstruction and in a clean and sightly condition and shall move all supplies, furniture and equipment as soon as received directly to the Premises and move all such items and waste being taken from the Premises (other than waste customarily removed by employees of the Building) directly to the shipping platform at or about the time arranged for removal therefrom. The halls, passages, exits, entrances, elevators, stairways, balconies and roof are not for the use of the general public and Landlord shall, in all cases, retain the right to control and prevent access thereto by all persons whose presence in the judgment of Landlord, reasonably exercised, shall be prejudicial to the safety, character, reputation and interests of the Project. Neither Tenant nor any employee or invitee of Tenant shall go upon the roof of the Project. (4) The toilet rooms, urinals, wash bowls and other apparatuses shall not be used for any purposes other than that for which they were constructed, and no foreign substance of any kind whatsoever shall be thrown therein, and to the extent caused by Tenant or its employees or invitees, the expense of any breakage, stoppage or damage resulting from the violation of this rule shall be borne by Tenant. (5) Tenant shall not cause any unnecessary janitorial labor or services by reason of Tenant's carelessness or indifference in the preservation of good order and cleanliness. (6) Tenant shall not install or operate any refrigerating, heating or air conditioning apparatus, or carry on any mechanical business without Landlord's prior written consent; use the Premises for housing, lodging or sleeping purposes; or permit preparation or warming of food in the Premises (warming of coffee and individual meals with employees and guests excepted). Tenant shall not occupy or use the Premises or permit the Premises to be occupied or used for any purpose, act or thing which is in violation of any Governmental Requirement or which may be dangerous to persons or property. (7) Tenant shall not bring upon, use or keep in the Premises or the Project any kerosene, gasoline or inflammable or combustible fluid or material, or any other articles deemed hazardous to persons or property, or use any method of heating or air conditioning other than that supplied by Landlord. (8) Landlord shall have sole power to direct electricians as to where and how telephone and other wires are to be introduced. No boring or cutting for wires is to be allowed without Landlord's prior written consent. The location of telephones, call boxes and other office equipment affixed to the Premises shall be subject to Landlord's prior approval. (9) Private offices within the Premises shall have traditional locks and keys. Tenant shall have a card key access control system for ingress into Premises and Landlord shall have a card key access Office Lease Page 29 of 39 8/26/2011 45556 Arcadia, CA (Facilities) control system for ingress into the Building. Tenant agrees, at its sole cost and expense, to coordinate its control system with Landlord so that a single card key controls access to the Building and the Premises. If cardkeys furnished to Tenant by Landlord are lost, Tenant shall pay Landlord $5.00 per replacement card key (this shall also apply to traditional keys furnished to Tenant by Landlord). No additional locks shall be placed upon any doors, windows or transoms in or to the Premises. Tenant shall not change existing locks or the mechanism thereof. Upon termination of the Lease, Tenant shall deliver to Landlord all keys and passes for offices, rooms, parking lot and toilet rooms which shall have been furnished Tenant. Tenant shall not make, or cause to be made, any such keys and shall order all such keys solely from Landlord and shall pay Landlord for any keys in addition to the two sets of keys originally furnished by Landlord for each lock. (10) Tenant shall not install linoleum, tile, carpet or other floor covering so that the same shall be affixed to the floor of the Premises in any manner except as approved by Landlord. (11) No furniture, packages, supplies, equipment or merchandise will be received in the Project or carried up or down in the freight elevator, except between such hours and in such freight elevator as shall be designated by Landlord. Tenant shall not take or permit to be taken in or out of other entrances of the Building, or take or permit on other elevators, any item normally taken in or out through the trucking concourse or service doors or in or on freight elevators. (12) Tenant shall cause all doors to the Premises to be closed and securely locked and shall turn off all utilities, lights and machines before leaving the Project at the end of the day. (13) Tenant shall cooperate fully with Landlord to assure the most effective operation of the Premises' or the Project's heating and air conditioning, and shall refrain from attempting to adjust any controls, other than room thermostats installed for Tenant's use. Tenant shall keep all corridor and exterior doors and windows closed, and during periods which the outside temperatures exceed 90 degrees F dry bulb Tenant shall close all blinds and turn off any unnecessary equipment. (14) Tenant assumes full responsibility for protecting the Premises from theft, robbery and pilferage, which may arise from a cause other than Landlord's negligence, which includes keeping doors locked and other means of entry to the Premises closed and secured. (15) Peddlers, solicitors and beggars shall be reported to the office of the Project or as Landlord otherwise requests. (16) No bicycle or other vehicle and no animals or pets shall be allowed in the Premises, halls, freight docks, or any other parts of the Building except that blind persons may be accompanied by "seeing eye" dogs. Tenant shall not make or permit any noise, vibration or odor to emanate from the Premises, or do anything therein tending to create, or maintain, a nuisance, or do any act tending to injure the reputation of the Building. (17) Tenant acknowledges that Building security problems may occur which may require the employment of extreme security measures in the day -to -day operation of the Project. Accordingly: (a) Landlord may, at any time, or from time to time, or for regularly scheduled time periods, as deemed advisable by Landlord and /or its agents, in their sole discretion, require that persons entering or leaving the Building or the Project identify themselves to watchmen or other employees designated by Landlord, by registration, identification or otherwise. Office Lease Page 30 of 39 8/26/2011 #5556 Arcadia, CA (Facilities) (b) Tenant agrees that it and its employees will cooperate fully with Project employees in the implementation of any and all security procedures. (c) Such security measures shall be the sole responsibility of Landlord, and Tenant shall have no liability for any action taken by Landlord in connection therewith, it being understood that Landlord is not required to provide any security procedures and shall have no liability for such security procedures or the lack thereof. (18) Tenant shall not do or permit the manufacture, sale, purchase, use or gift of any fermented, intoxicating or alcoholic beverages without obtaining Landlord's prior written consent. (19) Tenant shall not disturb the quiet enjoyment of any other tenant. (20) Tenant shall not provide any janitorial services or cleaning without Landlord's written consent and then only subject to supervision of Landlord and at Tenant's sole responsibility and by janitor or cleaning contractor or employees at all times satisfactory to Landlord. (21) Landlord may retain a pass key to the Premises and be allowed admittance thereto at all times to enable its representatives to examine the Premises from time to time and to exhibit the same and Landlord may place and keep on the windows and doors of the Premises at any time signs advertising the Premises for Rent. (22) No equipment, mechanical ventilators, awnings, special shades or other forms of window covering shall be permitted either inside or outside the windows of the Premises without Landlord's prior written consent, and then only at the expense and risk of Tenant, and they shall be of such shape, color, material, quality, design and make as may be approved by Landlord. (23) Tenant shall not during the term of this Lease canvas or solicit other tenants of the Building for any purpose. (24) Tenant shall not install or operate any phonograph, musical or sound- producing instrument or device, radio receiver or transmitter, TV receiver or transmitter, or similar device in the Building, nor install or operate any antenna, aerial, wires or other equipment inside or outside the Building, nor operate any electrical device from which may emanate electrical waves which may interfere with or impair radio or television broadcasting or reception from or in the Building or elsewhere, without in each instance Landlord's prior written approval. The use thereof, if permitted, shall be subject to control by Landlord to the end that others shall not be disturbed. (25) Tenant shall promptly remove all rubbish and waste from the Premises. (26) Tenant shall list all furniture, equipment and similar articles Tenant desires to remove from the Premises or the Building and deliver a copy of such list to Landlord and procure a removal permit from the Office of the Building authorizing Building employees to permit such articles to be removed. (27) Tenant shall not overload any floors in the Premises or any public corridors or elevators in the Building. (28) Tenant shall not do any painting in the Premises, or mark, paint, cut or drill into, drive nails or screws into, or in any way deface any part of the Premises or the Building, outside or inside, without Landlord's prior written consent. Office Lease Page 31 of 39 8/26/2011 #15556 Arcadia, CA (Facilities) (29) Whenever Landlord's consent, approval or satisfaction is required under these Rules, then unless otherwise stated, any such consent, approval or satisfaction must be obtained in advance, such consent or approval may be granted or withheld in Landlord's sole discretion, and Landlord's satisfaction shall be determined in its sole judgment. (30) Tenant and its employees shall cooperate in all fire and earthquake drills conducted by Landlord in the Building. (31) Tenant's employee parking is limited to the two lower levels and the northeast upper level of parking structure. The northwest upper level is "visitor only" parking. Office Lease Page 32 of 39 8/26/2011 #5556 Arcadia, CA (Facilities) EXHIBIT C SCOPE OF WORK This Exhibit C describes the obligations of the Landlord and the Tenant in the design and construction of the Premises. Each term used in this Exhibit which is defined in the main body of the Lease to which this Exhibit is attached shall have the same meaning when used herein. PART LANDLORD'S WORK The Landlord shall, prior to the Term Commencement Date, at Landlord's sole cost and expense, construct the improvement listed below (item 1, "Landlord's Work ") within the Premises in accordance with such design, construction criteria and methods as Landlord may, in its sole discretion, determine as necessary or appropriate. (1) Install demising wall, including a wall for Tenant's data closet (2) Interior painting (3) Existing cubicles to be left in the Premises All work other than Landlord's Work will be at Tenant's expense and subject to Landlord's obligations with respect to the Tenant Improvement Allowance and Landlord's prior approval under the terms of the Lease. Other than Landlord's Work, Landlord will neither supply nor install: trade fixtures; additional lighting fixtures and built -in lighting; special finishes; acoustic treatment; plastering; signs; lockers; curtains walls and interior partitions ; special ceilings ; special toilet rooms; electrical, plumbing and ventilation connections to trade fixtures, or required for special uses and trade processes; bullet proof glass, bank vaults, remote tellers, or any such custom installations. PART II TENANT'S WORK Tenant understands that Tenant's Work includes installation of an HVAC split system, setting up Tenant's telephone connections with stand alone phone lines from mailroom to Tenant's data closet. The parties have agreed that Landlord will complete the HVAC split on Tenant's behalf and will bill Tenant for such work. A. Plan Approval Process: (1) Within ten (10) days after receipt of Landlord's plans as aforesaid, Tenant shall submit to Landlord three (3) sets of design plans and specifications including the following: (a) Floor layout plan at a minimum 1/4" scale; (b) Interior elevations at minimum 1/4" scale; (c) Finish and color schedule with samples of wall and floor finishes; (d) Details of any special conditions at 3/4" scale; and (e) detail of all mechanical, architectural, plumbing, electrical, furniture, fixture, and equipment features installed. (3) Within seven (7) days of receipt by Landlord of Tenant's design plans as aforesaid, Landlord will deliver to Tenant notice of whether or not Landlord has approved the same, and if Landlord does not unconditionally approve such plans, Landlord's notice shall contain a detailed explanation of why such approval was withheld. If any of said design plans are returned to Tenant without unconditional approval of Landlord, said design plans shall be revised by Tenant in accordance with Landlord's comments and resubmitted to Landlord for approval within ten (10) days thereafter. Landlord will review and comment upon any revised design plans within five days of receipt by Landlord and the above procedure will be followed until Tenant's design plans are unconditionally approved by Landlord (as so approved, the "Approved Plans" and the work to be performed under such Approved Plans "Tenant's Work "). (4) Tenant shall commence construction of Tenant's Work in the Premises not later than five (5) days after whichever of the following shall be the later to occur: Office Lease Page 33 of 39 8/26/201 l #5556 Arcadia, CA (Facilities) (a) Delivery of the Premises to Tenant for commencement of Tenant's Work; or (b) Approval by Landlord of Tenant's interior design plans and specifications and receipt of any necessary permits relating thereto. B. General Procedures: (1) Tenant's Work shall comply with all Governmental Requirements. (2) Landlord's written approval shall be obtained by Tenant prior to the undertaking of any construction work which deviates from the Approved Plans. Landlord's approval of the Approved Plans shall not constitute the assumption of any responsibility by Landlord for the accuracy or sufficiency thereof, and Tenant shall be solely responsible thereof. (3) All contractors engaged by Tenant shall be bondable, licensed contractors, possessing good labor relations, capable of performing quality workmanship and working in harmony with Landlord's general contractor and other contractors on the job. (4) All Tenant's work shall be performed in good and workmanlike manner and shall be prosecuted to completion with all due diligence. (5) Tenant may use no space except the Premises for storage without approval of Landlord. Any material found in other areas will be subject to disposal by Landlord at Tenant's expense. Landlord shall have no responsibility or liability whatsoever for any loss of, or damage to, any materials, fixtures, equipment, merchandise or other property belonging to Tenant installed or left in the Premises or anywhere else at the Project. (6) Construction equipment and materials are to be located in confined areas as approved by Landlord and truck traffic is to be routed in and from the site as directed by Landlord so as not to burden the construction and /or operation of the Project. (7) Upon concurrent written notice to Tenant, Landlord shall have the right to order any Tenant or Tenant's contractor or employee who willfully violates any of the requirements contained herein to cease work, and to remove himself, his equipment and his employees from the Project. (8) Each Tenant contractor shall be required to maintain continuous protection of adjacent premises in such manner as to prevent any damage to such adjacent property and the improvements thereon or therein by reason of the performance of the Tenant's Work, and promptly to repair any such property or improvements so damaged to the condition prior thereto. Each Tenant contractor shall be required to properly protect its work with lights, guard rails, and barricades and secure all parts of the work against storm and accident. (9) No approval for Tenant's Work by the Landlord is valid unless in writing, signed by the Landlord. (10) Tenant shall furnish Landlord with lien waivers and sworn statements, in such form as may be required by Landlord, from all persons performing labor and /or supplying materials in connection with the Tenant's Work showing that all of said persons have been compensated in full. Office Lease Page 34 of 39 8/26/2011 #5556 Arcadia, CA (Facilities) EXHIBIT D TRAINING ROOM SCHEDULING AND RATES BASE AVAILABILITY: A training room at the Project will be available at least one (1) business day per month to Tenant free of charge. Reservations of such a room must be made by Tenant in advance. ADDITIONAL AVAILABILITY: Beyond the base availability listed above, a training room at the Project may be available for Tenant's use subject to (a) availability as determined by advance reservation and (b) a daily use fee of $175.00 for the 32 person training room and $300.00 for the 56 person training room. RESERVATION PROCEDURE: Call Ricki at 626 - 821 -7800 (on site facility coordinator) Office Lease Page 35 of 39 8/26/2011 #5556 Arcadia, CA (Facilities) EXHIBIT E GENERAL BUILDING RULES AND REGULATIONS FOR CONSTRUCTION SEE ATTACHED. Office Lease Page 36 of 39 8/26/2011 #5556 Arcadia, CA (Facilities) 0 EXHIBIT By 40 General Building Rules & Regulations For Construction Revised 3115107 0 i Table of Contents Construction Approval Process .............2 General.................... ............................... 3 General Contractors ............................... 6 Security................... ............................... 8 Elevators ................. ............................... 9 LifeSafety ................. .............................10 Building Systems ....... .............................11 Painting...................... .............................12 Cabling.................... ............................... 13 Local Property Management Contacts .... 14 Acknowledgment Receipt .....................15 i CONSTRUCTION APPROVAL PROCESS Tenant provides construction drawings for the proposed project to Landlord. In the case of subleases, Subtenant can submit drawings and scope to Master Tenant and Landlord concurrently. Landlord will log plans received and begin review process. 2. Landlord will review the proposal and communicate any concerns or requests for additional information back to the Tenant. Landlord may request a project meeting to review the proposal for clarification. 3. Approval, conditional approval, or denial of the proposal project will be provided by Landlord in writing within 5 -7 business days of the receipt of the complete proposal by Landlord. Any additional information requested and received that affects the decision making process will cause the time frame to be adjusted. 4. Tenant agrees to follow Safeway's Construction Rules & Regulations, and will require their contractors to follow same. 5. Tenant will provide final as -built drawings to Landlord after the completion of the project. General i 1. A complete set of Engineered Electrical, Mechanical, and Plumbing drawings, stamped by a registered Professional Engineer, along with Architectural drawings shall be delivered to the Property Management Office, 5 -7 business days in advance of the start of any construction project for review and comment. Landlord shall provide Tenant with (i) the names of the members of its Property Management Office, (ii) phone numbers and email addresses for the primary point of contact in the Property Management Office, with one backup contact person identified for all access and project - related issues, and (iii) one 24 -hour emergency contact phone number. Tenant shall provide Landlord with (i) the names of the members of Tenant's team responsible for Tenant's work (including contractors and subcontractors) (ii) phone numbers and email addresses for the primary point of contact for Tenant's work, with one backup contact person identified for all access and Project- related issues, and (iii) one 24- hour emergency contact phone number. 2. All work shall comply with the rules and regulations of the standard specifications of the building, city, state and federal government agencies having jurisdiction. General Contractors will file drawings and secure all permits prior to any construction. 3. Safeway's structural engineer shall review all weights and or structural modification with the contractor bearing all cost for this review. 4. All work to be performed by licensed contractor, who must be approved by Safeway. 5. So long as Tenant occupies the entirety of the Building, the work may be performed during such hours as Tenant determines appropriate to meet Tenant's schedule. The Contractor shall notify the local Pro e Management Office at least three (3) business days in advance of any interruption of building services in the affected area. If Tenant does not occupy the entirety of the Building, then the remainder of this paragraph 5 shall apply: All work shall be performed during regular business hours beginning at 6 :00 a.m., except as listed below, with all building services being maintained during construction. The Contractor shall notify the local Property Management Office at least three (3) business days in advance of any interruption of building services in the affected area. The following work shall be done on an after hours basis (unless Tenant occupies the entirety of the Building): core drilling, • 0 painting, chipping, drilling, shooting studs, welding and any other work that may create inconvenience to other building occupants. Any other work required after regular business hours must be approved and authorized by the local Property Management Office. 6. At the start of construction, contractor shall provide walk -off mats at the entrance to construction areas from freight elevator and stairwells as well as all elevators. Contractor shall provide protection to all walls and flooring in the areas adjacent to the work to prevent damage to surfaces. 7. Contractor shall provide construction lighting throughout affected area to supplement the existing lighting, as needed. 8. The contractor shall contact the local Property Management Office prior to the start of construction for instructions on all building standard and system requirements. 9. all permanent keying to be provided by the local Property Management Office with the General Contractor agreeing to pay the cost for this work at no more than prevailing market rates. 10. General contractor must have supervisory personnel onsite at all times while sub contractors are performing construction. 11. The contractor shall always comply with local OSHA/building safety requirements when using any powder actuated guns, welding, grinders, or any equipment which could affect fire life safety system operations, and will contact the local Property Management Office, one (1) business day in advance for permission to perform this work. 12. The contractor shall notify the local Property Management Office of all Permit inspections and afford a representative of such office a reasonable opportunity to be present at time of inspection. 13. The Contractor shall notify the local Property Management Office at least ten (10) business days in advance of completion of construction. A walk - through and punch -list shall be made on each job. It is the Tenant's responsibility to provide to the local Property Management Office proof to Landlord's satisfaction that the punch list has been completed by the General Contractor. Landlord shall accept as satisfactory proof a letter from Tenant representing that the punch list has been completed by the General Contractor. 14. Upon completion of construction, two (2) sets of as -built prints will be forwarded to local Property Management for distribution. 4 0 0 15. Contractor(s) shall not pour any foreign matter down any plumbing fixtures, floor or roof drains. The General Contractor agrees to pay for any needed repairs to correct this condition if foreign matter is poured into plumbing fixtures. 16. Loading Dock/Service Entrance: Access to the Loading Dock for large shipments of materials will be made available by reservation only through the local Property Management Office with not less than one (1) business day notice. Shipment deliveries over one (1) hour (with one -half (1/2) hour intervals for Landlord's use) or requiring dedicated use of freight elevator for more than one (1) hour (with one -half (112) hour intervals for Landlord's use) must be done after 5 p.m. or on weekends, unless Tenant occupies the entirety of the Building above the ground floor or unless otherwise agreed to in writing by Landlord. Reservations must be through the local Property Management Office with not less than one (1) business day notice. 17. All unused door frames and doors shall be returned to the local Property Management Office unless otherwise specified by the local Property Management Office, with the return of the foregoing coordinated in advance with the Property Management Office. However, Tenant may choose to keep and store excess materials, but for security purposes, any excess lock cores need to be returned to the local Property Management Office. 18. Final clean up of the project shall be done by the General Contractor. This includes interior window cleaning, removal of all construction trash & janitorial cleaning to be ready for final occupancy. 19. The construction space shall be maintained in an orderly and safe fashion at all times. 1) Keep aisles clear. 2) Provide trash cans for daily debris. 3) Stock material in a neat arrangement out of the way of work. 4) Cover electrical trench when work is not being performed in it. 5) Sweep job site daily. 6) Cover return air intakes with filter. Keep clean and remove when job is complete. 7) Provide fire extinguishers every 75 feet through out the duration of the project. 8) Stairwell will be kept clear of any obstructions at all times. 20. Local Property Management Office and Tenant will agree upon an appropriate space for construction debris bins, with the Property Management Office providing at least one (1) dock location to store 0 construction debris bins for the duration of the project. General Contractor will be responsible for hauling, ordering and all costs. The bins will be for the exclusive use of Tenant. 9 General Contractors All contractors must receive approval from local Property Management Office prior to start of work. Contractors that have been approved for access at Safeway facilities will be required to comply with all rules and /or restrictions set by the local Property Management Office. In addition, it is the responsibility of the General Contractor to assure that all sub - contractors are aware of and adhere to the rules and /or restrictions at Safeway's facilities. 1. Foreman(s) must attend "Planning Meetings" whenever scheduled. If the foreman is unable to attend a representative should be in attendance. 2. Contractors and sub - contractors must supply all tools and equipment necessary to perform designated functions, no metal or wood ladders are allowed. Fiberglass ladders only are allowed. 3. Contractors and sub - contractors are not permitted to roam the building. They are restricted to their work areas. 4. Work areas must be kept safe at all times. The local Pro e Management Office reserves the right to stop any works that it deems to be unsafe. 5. Work areas must be kept clean during and at the conclusion of work shifts. 6. This is a non - smoking building. Smoking is permitted outside only at least 25' from any building entrance or air intake. 7. Transportation of tools and equipment must be done through the freight elevator. NO EXCEPTIONS, 8. All contractors are responsible for providing a list of all personnel employed on this site to the local Property Management Office. 9. Contractors must provide to local Property Management copies of Material Safety Data Sheets (MSOS) for ALL chemicals /compounds brought on site. 10. Contractors shall notify the local Property Management Office at least three (3) business days in advance to schedule any roof top activity: Lifts, rigging, cranes, etc. 11. At locations where no freight elevator exists, prior to commencement of any construction, the local Property Management Office must identify and i approve alternate means to transport large construction materials, supplies and /or furniture. 12. The following activities require the approval of, and scheduling through the local Property Management Office at leasWplte three (3) business days in advance (except as indicated below). "0 1) Any on site welding. 2) Shut down of any life safety system. 3) Core drilling. 4) Minor electrical and/or mechanical shut downs minimum of 24 hours notice required or as appropriate per the local Property Management Office. 5) Major electrical and /or mechanical shut downs (two (2) weeks notice required), and provided that the foregoing may only be done after 6:00 p.m. Monday through Friday, and on Saturdays and Sundays. 6) Cardkey or key access to locked or restricted areas. Security 0 1. After hours authorized work must arrange for access through the local Property Management Office. General Contractor will furnish project schedule at least three (3) business days in advance for access and security purposes. 2. Contractor shall be responsible for the security of their tools and material during construction. Landlord accepts no liability. 3. General Contractor will furnish the local Property Management Office with advance notice of the company name and number of construction employees who require access to the building at times other than normal business hours. Such notice shall include location within the building where work is to be performed. (See item 2, General). 4. There is never any parking provided in the Loading Dock area. This area is used only for deliveries. NO EXCEPTIONS. Parking in designated parking stalls only, as determined by the local Property Management Office. Tenant will be provided with clear access to the freight elevator, provided such access shall not unreasonably interfere with Landlord's use of the freight elevator. 5. Unless Tenant occupies the entire Building, access to electrical /telecommunications closets is restricted to authorized personnel only. Authorization shall be given by the local Property Management Office, and can be withdrawn at any time. 0 Elevators All material delivery / removal will be made as expeditiously as possible though the loading dock and freight elevator. Unless Tenant occupies the entire Building, use of the freight elevator must be scheduled ahead of time for after -hours use. Reservations only through the local Property Management Office upon not less than 24 hours notice. 2. Roof hatches in freight elevators will not be opened without release of Lien Notice and shall be accomplished by using the proper elevator representative. 3. Passenger elevators shall not be used to move materials, tools or personnel. Construction crews are to use the freight elevator only. 4. Freight elevators cannot be dedicated during normal business hours 7:00 a.m. to 5:00 p.m., unless Tenant occupies the entirety of the Building above the ground floor. 5. If no elevator is available, prior to commencement of any construction the contractor and the local Property Management Office will determine an alternative means of vertical access. 10 0 Life Safety 0 1. Fire doors shall not be propped open or detach door closer on any fire rated doors. 2. The Life Safety System and its components shall remain intact and working during construction. Contractor shall contact the local Property Management Office each day as they enter and leave the building for status of the Life Safety System. I All work requiring an open flame must have a permit from the local Fire Department and comply with all Fire Department regulations. 4. The local Property Management Office must be notified each day in order to set up the life safety system to accommodate the work as required, and the General Contractor agrees to pay for this service. 5. Life Safety System, Strobe Lights, Emergency Power and electrical which may affect operation of these systems must be coordinated and scheduled, one (1) business day prior, through the local Property Management Office. 6. The Contractor is to provide approved flammable liquid storage cabinets for all flammables on site or remove them each day from the premises. This must be approved by the local Property Management Office. 7. Contractor shall patch all penetrations in floors /walls /ceilings to maintain the fire rating in an approved manner, using approved products; provided, however, that Landlord shall be responsible for patching all penetrations that are mutually identified as "pre- existing" by Tenant (or Tenant's contractor) and Landlord. The contractor shall provide MSDS of products used to the local Property Management Office. 8. Omitted. 9. The local Property Management Office staff only shall do the draining and refilling of the fire sprinkler system. The General Contractor agrees to pay for this service. One (1) business day advanced notice is required. 10. The Building Fire Alarm contractor shall be used for review and all fire alarm work to be performed. Contact the local Property Management Office. E Building Systems 0 The contractor shall notify the local Property Management Office at least two (2) weeks in advance of any interruption of building services, i.e. electrical, plumbing or HVAC, and any such interruption shall only occur after 6:00 p.m. Monday through Friday, and on Saturdays and Sundays. 2. Contractor shall not store material in electrical, mechanical or telecommunication rooms. Maintain cleanliness throughout. Do not clutter or block hallways, exits, freight elevator lobby, electrical closets or loading dock. I All heating, ventilation and air conditioning controls are to be Building Standard. Contact the local Prorerty Management Office. The General Contractor shall pay for any HVAC control services provided by the local Property Management Office. 4. All electrical panel labeling to be performed in accordance with the NEC and Building Specifications. All outlet plates to include circuit numbers. 5. All fluorescent light fixtures must conform to building standards or to the standard set forth in the approved plans. Contact the local Property Management Office, 6. An independent AABC third party contractor approved by the local Property Management Office shall perform all air balance work. Upon completion of construction, Contractor shall completely rebalance heating, ventilation and air conditioning systems as appropriate. Verify proper operation of all DDC & pneumatic controls, including zoning. Provide written balancing reports to the local Property Management Office. 7. Doors to equipment and electrical rooms shall NOT be left open at any time. 12 i • Paintin 1. All painting shall be performed after hours or on weekends, unless Tenant occupies entirety of Building. 48 hours prior notice shall be given to the local Property Management Office, unless Tenant occupies entirety of Building, in which event 24 hours notice is required. 2. An approved flammable liquid storage lockable locker shall be provided by the contractor to store all flammables left on site, outside. (Prior approval required by the local Property Management Office). 3. Paints and thinners should be brought to site as needed and not stock piled on the floor. 4. Spray painting may not be applied during the day and must be performed after hours. Permits shall be secured from the local Fire Department for any spray application and must comply with all Fire Department regulations. 13 • Cablin All outlets for any items that must be installed in a new or existing wall shall be provided with a code conforming outlet box (not plastic), a conduit run above the finished ceiling line and a finished cover or trim plate. Conduit shall be a minimum of one half inch inside trade size. 2. Wiring that has emerged from the wall outlet shall be neatly bundled or wrapped but shall not be fastened to building surfaces in any way unless approved by the local Property Management Office. Wiring may not be run in the open on a finished ceiling or wall surface or an occupied area unless installed in a communication room, phone closet or electrical closet. 3. Wiring Type: All cable of any type referred to in this guide must meet all local codes. Any cable that is run in the ceiling or under floor area may be run without conduit as long as it meets the smoke fire requirements of the local fire department and all local codes. Red wire will be used for Fire Life Safety system only. Wall outlets are still required with a box and conduit to ceiling with this method. All cables must be fastened to ceiling wire in an approved fashion, or supported by their own hangers to the slab above. No cabling, HVAC ductwork, control wiring, etc. to be laid across T bar grid or ceiling tiles. 4. All work must be performed in a neat and workmanship like manner. If any questions arise as to conditions that may arise that are not covered in this guide, contractors must contact the local Property Management Office for instruction. 5. All wire and low voltage cable run in the ceiling must be independently supported according to the UBC. The building standard method of support is by wire rack or trapeze. Wire racks may exist on some floors. Where racks do not exist, they must be installed at tenant expense. 14 Local Property Management Contacts Name Division Office Phone: Cell Phone: Kevin Thompson Safeway Inc. (California) Office Phone: 925.467.3547 Cell Phone: 925.383.4371 15 9 E SAFEWAY INC. 5918 Stoneridge Mall Road Pleasanton, Ca. 94588 General Building Rules & Regulations For Construction Acknowledgment Receipt I , representing PRINT NAME PRINT COMPANY NAME acknowledge that I have received a copy of the General Building Rules & Regulations for Construction from the local Property Management Office and agree to abide by the Rules and regulations set forth there in. I further acknowledge that I will provide copies to all sub - contractors and that they will abide by these rules. Signed: Date: 16