061824 ADM CSUF / Sky Harbor Lease Ground Lease Amendment — City Council - Successor Agency

AMENDMENT TO GROUND LEASE
THIS AMENDMENT TO GROUND LEASE (the “Amendment”) is made and entered into as of ________________, 2024 (the “Effective Date”) by and between THE BOARD OF TRUSTEES OF THE CALIFORNIA STATE UNIVERSITY, which is the State of California acting in its higher education capacity, on behalf of the California State University, Fullerton, one of twenty-three (23) universities in the California State University system (“Landlord”), and THE CITY OF FULLERTON, CALIFORNIA (“Tenant”).

RECITALS
A. Tenant (as successor-in-interest to the Redevelopment Agency of the City of Fullerton, California (the “Agency”)) and Landlord are parties to that certain First Amended Lease dated May 22, 1987, as amended by that certain Third Amendment to Sublease, and Amendment to Memorandum of Sublease, First Amended Lease, and Non-Disturbance and Recognition Agreement dated January 31, 1990 (collectively, as amended, the “Existing Lease”), for the ground lease of certain real property located in the City of Fullerton, County of Orange, State of California, legally described in Exhibit A hereto (the “Premises”).

B. Tenant desires to continue subleasing the Premises from Landlord for the continued ownership, operation, and management of a six (6) story hotel with approximately two hundred twenty-four (224) guest rooms (the “Project”).

C. Tenant is party to that certain Amended and Restated Sublease entered into with Sky Harbor Fullerton, LLC, a Delaware limited liability company (“Subtenant”) dated [__________________, 2024] relating to the operation of the Project (the “Sublease”), which Sublease is attached hereto as Exhibit B. The Sublease is coterminous with this Lease and shall only remain in effect while this Lease remains in effect.

D. The use of the Premises must be for purposes consistent with the educational mission of the Landlord, and Tenant has agreed to use the Premises in such manner, consistent with and subject to the terms of this Lease.

E. California Education Code section 66606 vests Landlord with “full power and responsibility in the construction and development of any state university campus, and any buildings or other facilities or improvements connected with the California State University.” Landlord is the State of California acting in its higher education capacity, and is generally exempt from local and regional ordinances, regulations, policies, and rules, including, without limitation, zoning and land use regulations, when its development, construction, facilities, and uses are in furtherance of its governmental purpose, unless applicable law specifically says otherwise.

F. In connection with the foregoing, Landlord and Tenant have now mutually agreed to amend and restate the Existing Lease in its entirety and to supersede the terms thereof with the terms of this Amendment.

NOW, THEREFORE, in consideration of the mutual covenants herein contained, and for good and other consideration, the receipt and sufficiency of which is hereby acknowledged, and incorporating by this reference the foregoing Recitals, the parties hereto hereby agree as follows:

AGREEMENT

DEFINITIONS
In addition to any terms which are defined elsewhere in this Lease, for purposes of this Lease, the following definitions shall apply:
“Additional Rent”
shall mean all amounts payable by Tenant to Landlord under this Lease other than Percentage Rent. “Affiliate”
shall mean any Person controlling, controlled by or under common control with the Person in question. As used in the foregoing and where appropriate elsewhere in this Lease, “control” and its related words means the ability to effectively direct the management decisions of the Person in question. “BOT”
shall mean the Board of Trustees of the California State University, acting in its capacity as the governing body of Landlord. “Business Day”
shall mean any day in which the Landlord’s administrative offices are operating and open for general business activities. “Campus”
shall mean the California State University, Fullerton. For the sake of clarification, the Campus is one of the twenty-three (23) universities of Landlord and is not a separate legal entity. “Claim(s)”
shall mean claims, demands, liabilities, damages, judgments, orders, decrees, actions, proceedings, fines, penalties, losses, costs and expenses, including without limitation, court costs and reasonable attorneys’ fees. “Comparable Projects”
shall mean improvements and projects similar in kind and nature and in Orange County or Los Angeles County, California, which are maintained in a firstclass manner and operated for the same or substantially similar purpose as the Permitted Use. “County”
shall mean the County of Orange, State of California.
“Force Majeure”
shall mean any cause or occurrence outside the reasonable control of the party claiming an inability to perform and which by the exercise of due diligence could not be reasonably prevented or overcome, to the extent the same is not caused by the fault of the party claiming relief, which may include, without limitation, an act of God, fire, riot, civil commotion, terrorist act, terrorist threat, communicable disease outbreak, epidemic, pandemic, hostilities or war, or a labor dispute which results in a strike or work stoppage affecting the Premises or Project. The term “Force Majeure” shall expressly exclude financial inability or difficulty, financial hardship, changes in financial markets or financial market instability, and any other event or circumstances whatsoever relating thereto, and without limiting the foregoing under no circumstances whatsoever shall Force Majeure in any way excuse, limit, or otherwise modify Tenant’s financial obligations under this Lease, including without limitation the obligation to pay the Rent and other charges due hereunder as and when required. For a party to avail itself of the benefit of Force Majeure the Force Majeure event must directly cause a material delay in performance of an obligation or duty hereunder, or an inability to complete the performance of any such obligation or duty. The party claiming the benefit of Force Majeure must give detailed written notice to the other party within five (5) Business Days after obtaining actual knowledge of the Force Majeure event, and failure to provide such notice within such time period shall not void the benefit of Force Majeure but shall instead decrease the duration of the excused performance resulting from such Force Majeure event on a per diem basis for each day of delay in delivering such notice. “Hazardous Substance”
shall mean any material or substance (a) defined as a “hazardous waste,” “extremely hazardous waste” or “restricted hazardous waste” under sections 25115, 25117 or 25122.7, or listed pursuant to section 25140, of the California Health and Safety Code, division 20, chapter 6.5 (Hazardous Waste Control law); (b) defined as a “hazardous substance” under section 26316 of the California Health and Safety Code, division 20, chapter 6.8 (Carpenter-Presley-Tanner Hazardous Substance Account Act); (c) defined as a “hazardous material,” “hazardous substance” or “hazardous waste” under section 25501 of the California Health and Safety Code, division 20, chapter 6.95, “Hazardous Substance” under section 25281 of the California Health and Safety Code, division 20, chapter 6.7 (Underground Storage of Hazardous Substances); (d) petroleum; (e) asbestos; (f) polychlorinated biphenyls; (g) listed under Article 9 or defined as “hazardous” or “extremely hazardous” pursuant to Article 11 of Title 22 of the California Administrative Code, division 4, chapter 20; (h) designated as a “hazardous substance” pursuant to section 311 of the Clean Water Act (33 U.S.C. § 1251 et seq., 33 U.S.C. § 1321, or listed pursuant to section 307 of the Clean Water Act (33 U.S.C. § 6903); (i) defined as a “hazardous substance” pursuant to section 101 of the Comprehensive Environmental Response, Compensation, and Liability Act (42 U.S.C. § 6901 et seq.); or (j) found to be a pollutant, contaminant, toxic or hazardous waste or toxic or hazardous substance in any reported decision of a federal or California state court, or which may give rise to liability under any Federal or California common law theory based on nuisance or strict liability. “Hazardous Substance Activities”
the use, storage, maintenance, generation, manufacture, handling, removal, disposal, release, treatment or discharge of any Hazardous Substances upon or about the Premises or Project. “Improvements”
shall mean all improvements on the Premises to be constructed under the terms of this Lease and any replacements, reconstruction, modification, alteration or restorations thereof during the Term, including without limitation all restoration work relating to any casualty. “Landlord”
is defined in the Preamble above.
“Landlord’s Interest” shall mean Landlord’s interest in (a) the Premises, (b) the Improvements, (c) the Project, and (d) this Lease. “Landlord Party”
shall collectively mean Landlord, the BOT, the Campus, any Landlord or Campus auxiliaries, and their respective trustees, officers, agents, volunteers, employees, and independent contractors; provided that, with respect to any natural person covered by the foregoing, such persons shall only be deemed a Landlord Party to the extent acting within official capacity as a trustee, officer, agent, volunteer, employee or contractor, as applicable. “Laws”
shall collectively mean (i) all applicable local, state, and/or federal statutes, ordinances, rules, codes, requirements, orders, directives, permits, regulations, and other laws, (ii) the terms of all reciprocal easement agreements and/or covenants, conditions and restrictions affecting the Premises, and (iii) the requirements of any board of fire insurance underwriters or equivalent, in each such instance whether now in effect or which may hereafter come into effect. “Occupant” shall mean any lessee or occupant of the Premises. “Partial Taking”
shall mean any Taking which does not constitute a Total Taking. “Percentage Rent” shall mean the annual rental payable under this Lease pursuant to Article 4, as the same may be adjusted from time to time during the Term in accordance with the terms and conditions of Article 4. “Permitted Uses”
shall mean the “Permitted Uses” as defined in the Sublease. “Person”
shall mean any natural person, a partnership, a corporation, an association, a joint stock company, a limited liability company, a trust, a joint venture, an unincorporated organization and other entity. “Prohibited Uses”
shall mean those uses set forth in Schedule 1.22.
“Rent”
shall collectively mean Percentage Rent, Additional Rent, and all other amounts to be paid by Tenant hereunder. “Rent Commencement Date”
shall mean the Effective Date.
“Subleasehold Mortgagee” shall have the meaning set forth in the Sublease. “Sublease” is defined in the Preamble above.
“Subtenant”
is defined in the Preamble above.
“Taking”
shall mean any acquisition of or damage to all or any portion of the Premises or Improvements, or any interest therein or right accruing thereto, pursuant to or in anticipation of the exercise of the power of condemnation or eminent domain, or by reason of the temporary requisition of the use or occupancy of the Premises or Improvements, or any part thereof, by any governmental or quasigovernmental authority, civil or military, or any other agency empowered by law to take property in the State of California under the power of eminent domain. “Taxes”
shall mean all taxes, assessments, fees, rates, charges, license fees, municipal liens, levies, excises or imposts, and other similar governmental charges, whether general or special, or ordinary or extraordinary, of every name, nature and kind whatsoever (including without limitation real estate taxes, taxes upon or measured by rents, personal property taxes, privilege taxes, gross receipts taxes, excise taxes, parking taxes, business and occupation taxes, gross sales taxes, transient occupancy taxes, possessory interest taxes, occupational license taxes, water charges, sewer charges, or environmental taxes or assessments), which may at any time be levied, assessed, charged or imposed by any public agency, or other authority or entity, or which may become a lien or charge upon all or any part of the Premises, Improvements, or Project; the Rent; the Landlord’s Interest; the Tenant’s Interest; the use or occupancy of the Premises, Improvements or Project (including without limitation the operation of any business or other activities on or about the Premises or Project and/or the rents or other revenues generated by such business or activities); and any personal property located upon the Premises, Improvements or Project at any time during the Term. “Taxes” also include without limitation the payment of any bonds or charges imposed or required by any public agency, or other authority or entity, by reason of the proposed or Hazardous Substance Activities on or from the Premises or Project by Tenant or any Tenant Party. Landlord, as entity of the State of California, is generally exempt from the taxes, fees, assessments, and other charges described above, and nothing in this Lease shall be in any way construed as a waiver of Landlord’s sovereign immunity. “Tenant”
shall have the meaning ascribed to it in the preamble of this Lease and shall include any assignee of the original Tenant approved by Landlord in accordance with the terms of this Lease. “Tenant’s Interest”
shall mean Tenant’s interest in (a) the Premises, (b) the Improvements, (c) the Project, (d) this Lease, and (e) the Sublease. “Tenant Party”
shall collectively mean Tenant and its Affiliates, and their respective partners, owners, members, managers, directors, officers, shareholders, employees, agents, guests, invitees, contractors, subcontractors, and representatives. “Total Taking”
shall mean either (a) a Taking of all of the Premises or Improvements other than for temporary purposes or (b) a Taking of so much of the Premises or Improvements as to render, in Landlord’s reasonable judgment, the balance of the Project unsuitable for the Permitted Use. “University Policies”
shall collectively mean all applicable Landlord policies, guidelines, rules and regulations which relate to (i) this Lease, (ii) the Premises, Improvements, and/or Project, (iii) the Campus, and/or (iv) the Permitted Use and the use and occupancy of the Premises, Improvements, and/or Project by any Tenant Party, in each case as the same may change from time to time during the Term.

GRANT AND TERM
Lease
. In consideration of the covenants and agreements to be observed and performed by Tenant, Landlord hereby leases to Tenant, and Tenant hereby leases from Landlord, the Premises, subject to: (i) all liens, encumbrances, easements, rights-of-way, covenants, conditions, restrictions, obligations and liabilities, whether or not of record; (ii) all matters which would be revealed or disclosed in an accurate survey or physical inspection of the Premises; (iii) the effect of all current and future building restrictions and regulations and, current and future applicable Laws and University Policies; (iv) the condition and state of repair of the Premises on the Effective Date; and (v) all taxes, duties, assessments, special assessments, water charges and sewer rents, and any other impositions, accrued or unaccrued, fixed or not fixed, as provided below. Landlord reserves unto itself a non exclusive easement in, on, over, under and upon the Premises for the purpose, as appropriate, of vehicular and pedestrian access, provided that in each case Landlord shall not unreasonably interfere with Tenant’s use or occupancy of the Project. Landlord grants to Tenant and Tenant’s agents, employees, licensees, and invitees a non exclusive easement in, on, and over those streets, roads, and other pathways owned by Landlord and intended for pedestrian or vehicular travel immediately adjacent to the Premises, for the purposes of accessing the Premises and the Project.

Intentionally Deleted
.

Reservation of Oil, Gas and Mineral Rights
. Landlord reserves to itself the sole and exclusive right to prospect for, drill for, produce, and take any oil, gas, or other hydrocarbon or mineral substances and accompanying fluids, including all geothermal resources from the Premises from below the depth of five hundred (500) feet from the surface of the Premises, including the rights to slant drill, maintain subsurface pressures, and utilize subsurface storage space for natural substances. This reservation does not include the right of entry or access from or over the surface of the Premises, nor any other right not herein expressly reserved. Landlord covenants that Tenant shall not be disturbed in its quiet enjoyment and peaceful use of the Premises by the aforementioned drilling and production activities.

Term. The “Term” of this Lease shall be deemed to have commenced upon the Effective Date of the Existing Lease and shall expire, without notice or other action by either party, upon the earlier of (i) the expiration or earlier termination of the Sublease; and (ii) 11:59 p.m. Pacific Time on December 31, 2088, unless this Lease is sooner terminated pursuant to the terms set forth herein.

Holding Over
. This Lease shall expire without further notice at the expiration of the Term, and no holding over after the termination or expiration of this Lease shall be permitted. Any holding over by Tenant after expiration or earlier termination shall not constitute a renewal or extension of this Lease, nor shall it give Tenant any rights in or to the Premises, Project, or any part thereof. If Tenant continues to occupy any portion of the Premises after the expiration of the Term or any earlier termination of this Lease, such holding over (i) shall be deemed to have created a month to month tenancy only, which shall be terminable with at least thirty (30) days’ prior written notice by either party, (ii) shall not constitute a renewal or an extension hereof, and (iii) shall be subject to all of the terms and conditions of this Lease, including without limitation the obligation to pay Rent; provided Rent during any holdover period shall be one twenty-five percent (125%) of the Rent payable in the month immediately preceding the holdover period. A holdover shall be deemed to include Tenant’s failure to surrender the Premises to Landlord in the condition required by this Lease. Notwithstanding any provision to the contrary contained herein, (I) Landlord expressly reserves the right to require Tenant to immediately surrender possession of the Premises upon the expiration of the Term or the date of any earlier termination of this Lease, the right to re-enter the Premises, and the right to assert any remedy at law or in equity to evict Tenant and collect damages in connection with any such holding over, and (II) Tenant shall indemnify, defend and hold the Landlord Parties harmless from and against any and all Claims incurred or suffered by a Landlord Party by reason of Tenant's failure to timely surrender the Premises in accordance with the provisions of this Lease, including, without limiting the generality of the foregoing, all Claims incurred by Landlord due to Landlord’s failure or inability to deliver the Premises to a successor tenant/occupant, and any lost profits to Landlord resulting therefrom. The provisions of this paragraph shall not be deemed to limit or constitute a waiver of any other rights or remedies of Landlord provided herein or under applicable Laws.

Termination of Sublease
. In the event that the Sublease is terminated prior to the expiration of the initial or any extended term thereof, Tenant shall have the option to either (i) terminate this Lease upon delivery of written notice thereof to Landlord, which notice shall be delivered within ten (10) Business Days after the date of termination of the Sublease; or (ii) exercise commercially reasonable efforts to execute a written sublease with a new subtenant, which sublease shall be on terms identical to the Sublease with such changes thereto as Landlord may approve in Landlord’s sole and absolute discretion, in which case the new subtenant shall be subject to Landlord’s prior written approval, which approval may be withheld for any reason or no reason in Landlord’s sole and absolute discretion. If Tenant proceeds under Section 2.6(ii) above but does not enter into a Landlord-approved replacement-Sublease within six (6) months after the date of the termination of the Sublease, Landlord shall have the right, but not the obligation, to terminate this Lease. Notwithstanding anything in this Lease or the Sublease to the contrary, Tenant shall not permit or allow Subtenant to terminate its existing franchise agreement with Marriott Corporation or enter into any new franchise agreement without Landlord’s prior written approval, which approval may be withheld in Landlord’s sole and absolute discretion. If Tenant defaults under this Lease or the Sublease, Landlord shall have the right, but not the obligation, to cause Subtenant to attorn to Landlord upon the then executory terms and conditions of the Sublease for the remainder of the term of the Sublease. In the event of any such election by Landlord, Landlord will not be (a) liable for any act or omission of Tenant under the Lease, Sublease or any other agreement between Tenant and Subtenant or for any default of Tenant under any such documents which occurred prior to the effective date of the attornment; (b) subject to any defenses or offsets that Subtenant may have against Tenant which arose prior to the effective date of the attornment; (c) bound by any changes or modifications made to the Sublease without the written consent of Landlord; or (d) liable for the payment of any payment, credit, offset or amount due from Tenant to Subtenant under the Sublease. If Landlord does not elect to have Subtenant attorn to Landlord as described above, the term of the Sublease, and the estate thereby granted, shall expire and come to an end, regardless of any provision of the Sublease to the contrary, upon the earlier of (i) its natural expiration date or any premature termination date thereof or (ii) concurrently with any premature termination or earlier expiration of the Lease (whether by consent, agreement or other right, now or hereafter agreed to by Landlord or Tenant, or both, or by operation of law or, at Landlord's option, in the event of default by Tenant). Any failure of Subtenant to vacate the Premises by that date shall be deemed a failure of Tenant to vacate the Premises and a continuing occupancy of the Premises by Tenant.

Enforcement of Sublease.

Tenant agrees, as an obligation and covenant under this Lease, to use commercially reasonable efforts to enforce Subtenant's obligations under the Sublease. Tenant shall provide written notice to Landlord within two (2) business days after the occurrence of any default or termination under the Sublease, and shall (i) promptly forward to Landlord any notices received by or on behalf of Subtenant under the Sublease; and (ii) send to Landlord copies of any notices of default that Tenant delivers to Subtenant under the Sublease. The Sublease may not be amended without Landlord’s prior written consent, which consent may be withheld in Landlord’s sole and absolute discretion.

Intentionally Deleted
.

Condition of Premises
. Tenant has accepted possession of the Premises in an “AS-IS” condition without any representation or warranty of Landlord. By the execution of this Lease, Tenant acknowledges that it has completed any and all due diligence that it deems necessary in order to enter into this Lease. Tenant acknowledges that it has had the advice of such independent professional consultants and experts as it deems necessary in connection with its investigation and study of the Premises, and has, to the extent it deemed necessary, independently investigated the condition of the Premises, including the soils, hydrology and seismology thereof, and the Laws and University Policies relating to the construction and operation of the Improvements and Project, including environmental, zoning and other land use entitlement requirements and procedures, height restrictions, floor area coverage limitations and similar matters, and has not relied upon any statement, representation or warranty of Landlord or any other Landlord Party of any kind or nature in connection with its decision to execute and deliver this Lease and its agreement to perform the obligations of Tenant hereunder. Landlord makes no warranty as to the suitability of the Premises for Tenant’s proposed development, construction or use, as permitted by this Lease. Landlord makes no covenants or warranties respecting the condition of the soil, subsoil or any other condition of the Premises. Tenant acknowledges that the soil on the Premises may or may not be suitable for the purposes intended by Tenant or be of such character and condition so as to require special engineering for construction of the Improvements. Landlord shall not be responsible for any land subsidence, slippage, soil instability or damage resulting therefrom. Landlord shall not be required or obligated to make any changes, alterations, additions, improvements or repairs in, on, under or about the Premises. In addition, Landlord has made no representation or warranty that it will develop any of its other property, whether or not adjoining the Premises or elsewhere on or near the Campus, for any specific use. Without limiting the foregoing, Tenant acknowledges it has been informed, pursuant to the provisions of the California Health & Safety Code § 25359.7, that Hazardous Substances may be located in, on, under or around the Premises, and that it has also been notified, pursuant to the Safe Drinking Water and Toxic Enforcement Act of 1986, California Health and Safety Code §§ 25249.5 et seq., that detectable amounts of chemicals known to the State of California to cause cancer, birth defects or other reproductive harm may be found in, on, under, or around the Premises. With respect to the foregoing provisions of this paragraph, and by initialing below, Tenant expressly waives the provisions of California Civil Code Section 1542, as may be amended or modified, which currently provides:

A general release does not extend to claims THAT the creditor OR RELEASING PARTY does not know or suspect to exist in his or her favor at the time of executing the release AND THAT, if known by him or her, WOULD have materially affected his or her settlement with the debtor OR RELEASED PARTY.

Tenant’s initials: ______________

Ownership and Removal of Improvements.

Ownership of Improvements. The parties acknowledge and agree that Subtenant is the owner of all Improvements and all furnishings, fixtures and personal property located thereon. Upon expiration of the Term or any earlier termination of this Lease, all such Improvements and property shall, except as provided herein, automatically vest in, revert to, and become the property of Landlord without compensation to, or requirement of consent or other act of, Landlord, or Tenant, or Subtenant and without the necessity of deed, bill of sale, conveyance or other act or agreement of Landlord, Tenant, or Subtenant and without any payment of any kind or nature by Landlord, Tenant, or Subtenant or to any other Person, including any Subleasehold Mortgagee who has a lien against all or any portion of Landlord’s Interest or Tenant’s Interest. Tenant shall thereafter have no further rights thereto or interest therein. Except as permitted by this Lease or the Sublease, Tenant shall not, and shall not allow Occupants, to remove any Improvements from the Premises, nor waste nor destroy any Improvements (or allow the same to occur). Upon or at any time after the date of the expiration of the Term or any earlier termination of this Lease, if requested by Landlord, Tenant shall, and shall cause Subtenant to, without charge to Landlord, promptly execute, acknowledge and deliver to Landlord a quitclaim deed, bill of sale, and/or other instrument reasonably requested by Landlord which (a) conveys all of Tenant’s right, title and interest in and to the Premises, Improvements, and Project; (b) assigns, without representation or warranty and to the extent assignable by the terms of such contracts, all contracts designated by Landlord, relating to the operation, management or maintenance of the Premises, Project, or any part thereof; and (c) conveys, without representation or warranty all plans, records, registers, permits, and all other papers and documents which may be necessary or appropriate for the proper operation and management of the Project.

Surrender of Premises.

Surrender of Lien Free Title. Unless otherwise provided herein, upon the expiration of the Term or earlier termination of this Lease, Tenant shall deliver possession of the Premises, Improvements, and Project to Landlord, cure all defaults caused directly by Tenant and shall grant and convey all right, title, and interest in the Improvements and Project, and every part thereof, in good and broom clean condition subject to ordinary wear and tear, free and clear of all liens and encumbrances other than (a) those existing at the Effective Date, (b) those created by Landlord, (c) those created by Subtenant and not cured after commercially reasonable efforts by Tenant to extinguish said Subtenant liens and encumbrances, and (d) those liens and encumbrances approved in writing by Landlord with the express written agreement of Landlord that such may survive the expiration of the Term or earlier termination of this Lease.

Surrender of Fixtures. Tenant’s obligations under this Section 2.11 include the obligation to deliver lien free possession and title to all fixtures attached to the Improvements, as provided above.

Failure to Surrender. If Tenant fails to surrender the Premises, Improvements and Project, or any part thereof, as required hereunder, at the expiration of the Term or earlier termination of this Lease, then Tenant’s indemnity obligations under Section 19.4 shall apply to all Claims resulting from the delay or failure to surrender, including, without limitation, claims made by any succeeding tenant, founded on or resulting from Tenant’s failure to surrender, and any direct damages which the Landlord Parties may incur.

Survival. Tenant’s obligations under this Section 2.11 shall survive the expiration of the Term or any earlier date of termination of this Lease to the extent any such obligations are not fully performed by the expiration of the Term or any earlier date of termination.

IMPROVEMENTS
General
. Landlord and Tenant acknowledge and agree that Subtenant is responsible for the design and construction of any Improvements upon the Premises, which Improvements shall be performed subject to the terms and conditions of the Sublease.

LEASE CONSIDERATION
I
ntentionally Deleted.

Percentage Rent
. The Percentage Rent shall commence to accrue hereunder on the Rent Commencement Date. Tenant shall pay the Percentage Rent to Landlord in quarterly installments as more particularly set forth in Schedule 4 hereto. Percentage Rent for any partial month period shall be prorated and paid with the first monthly payment based on the actual days elapsed. No invoice shall be provided nor shall any invoice be required from Landlord in order for Tenant to be obligated to pay Percentage Rent under this Lease.

Place of Payment of Rental
. All Rent payments shall be made in lawful money of the United States of America and shall be paid to Landlord at Landlord’s address as set forth in this Lease or to such other parties and/or to such other address as Landlord may from time to time designate in writing to Tenant.

Net Lease; No Rent Abatement or Reduction
. The Rent set forth in this Lease is established on the assumption that this Lease is and shall constitute an absolutely “NET, NET, NET” lease and that Landlord will not have to pay any expense or incur any liabilities of any kind in any way relating to, or in connection with, the Premises, Improvements, or Project during or attributable to the Term. Accordingly, Tenant will promptly pay all costs of every kind and description relating to or arising out of the Premises, Improvements, and Project, and/or the use thereof during the Term, including, without limitation, all Taxes, utility costs, costs of insurance, repair and maintenance costs, and improvement and replacement costs. Tenant shall not be entitled to any abatement, set off or reduction in Rent due under this Lease.

Other Payments
. Tenant agrees to pay, as Additional Rent, within thirty (30) days after Landlord’s demand therefor, all other amounts and sums which Tenant is obligated to pay or reimburse to Landlord under the provisions of this Lease in addition to Percentage Rent, including those items set forth on Schedule 4.

Interest
. Any Percentage Rent, Additional Rent or other amount payable by Tenant to Landlord under this Lease which is not paid when due shall bear interest at the rate which is the lesser of ten percent (10%) per annum or the maximum rate allowed under applicable Laws until paid.

Late Charges
. Tenant acknowledges that the late payment of any Percentage Rent or Additional Rent will cause Landlord to lose the use of such money and incur costs and expenses not contemplated under this Lease, including, without limitation, administrative and collection costs and processing and accounting expenses, the exact amount of which is extremely difficult to ascertain. Therefore, if any installment of Percentage Rent or Additional Rent is not paid within ten (10) calendar days after the due date for such Rent payment, then Tenant shall thereafter pay to Landlord on demand a late charge equal to three and one-half percent (3.5%) of the amount of any installment of Percentage Rent or Additional Rent not paid on the due date plus interest as provided in this Lease. Landlord and Tenant agree that this late charge represents a reasonable estimate of such costs and expenses and is fair compensation to Landlord for the loss suffered from such nonpayment by Tenant.

USE
Use of Premises. Tenant shall use the Premises, and shall cause all Persons using or occupying any part of the Premises to use the Premises, solely for the Permitted Use and for no other use whatsoever without the prior written consent of Landlord in its reasonable discretion.

OPERATION AND MAINTENANCE
General
. Landlord and Tenant acknowledge and agree that Subtenant is responsible for the operation and maintenance of the Project, which operation and maintenance shall be performed subject to the terms and conditions of the Sublease.

Entry of Premises by Landlord
. A representative of Landlord may enter the Premises and Project, including the Improvements, during normal business hours upon reasonable prior written notice of at least forty-eight (48) hours for the purpose of inspection, subject to Subtenant’s reasonable requirements as to security.

TAXES
Payment of Taxes
. Landlord and Tenant acknowledge and agree that Subtenant is responsible for the payment of Taxes, which shall be paid subject to the terms and conditions of the Sublease.

UTILITIES
Utilities
. Landlord and Tenant acknowledge and agree that Subtenant is responsible for all utilities furnished to the Premises, subject to the terms and conditions of the Sublease.

Utility Easements
. Landlord has the right to grant to others (or itself) nonexclusive utility easements over, under, through, across, or on the Premises in locations that will not unreasonably interfere with Tenant’s use of the Premises for the Permitted Use.

DAMAGE OR DESTRUCTION
Damage or Destruction of Improvements. Landlord and Tenant acknowledge and agree that Subtenant is responsible for restoration of the Improvements following casualty, subject to the terms and conditions of the Sublease; provided, however, that in the event that any insurance proceeds are allocated to Tenant (as landlord under the Sublease), such proceeds shall then be allocated and disbursed to Landlord. The provisions of this Lease and the Sublease constitute an express agreement between Landlord and Tenant with respect to any casualty which damages all or any part of the Premises, Improvements or any other portion of the Project, and no statute or regulation, including Sections 1932(2) and 1933(4) of the California Civil Code and any other statute or regulation, now or hereafter in effect, which purports to set forth the parties’ rights and/or obligations with respect to casualty damage or destruction in the absence of an express agreement, shall have no application to this Lease.

INSURANCE
Insurance Requirements
. Landlord and Tenant acknowledge and agree that Subtenant is responsible to obtain insurance coverages as set forth in the Sublease. Landlord shall have the right to review the insurance requirements set forth in the Sublease on the date that is seven (7) years after the Effective Date, and every seven (7) years thereafter during the Term, and with written notice to Tenant, may cause Tenant to cause Subtenant to make any necessary adjustments, in Landlord’s reasonable discretion, to ensure Subtenant’s insurance coverage is consistent with industry standards for Comparable Projects. Such rights shall include, without limitation the right to add additional coverages/policies and to increase the minimum amount of such policies as long as such adjustments are consistent with industry standards for Comparable Projects.

CONDEMNATION
Notice; Lease Governs
. Upon any party receiving notice of or becoming aware of any eminent domain or condemnation proceedings, or possibility thereof, such party shall promptly give written notice to the other party in the manner specified in this Lease. In the event of any Taking during the Term, the rights and obligations of the parties with respect to such appropriation and any Award in connection therewith shall be provided in this Article 11, and Tenant hereby waives any and all rights it might otherwise have pursuant to Section 1265.130 of The California Code of Civil Procedure.

Termination of Lease
. In the event of a Total Taking, this Lease shall terminate effective on the date of surrender of possession of the Premises or Improvements, or so much thereof or interest therein as has been taken, to the condemning authority. Tenant shall continue to pay all Rent due hereunder and, in all respects, keep, observe and perform all of the terms, covenants, agreements and conditions of this Lease to be kept, observed and performed by Tenant until the date of such termination.

Partial Taking
. In the event of a Partial Taking, this Lease shall remain in full force and effect with respect to that portion of the Premises or Improvements not so taken, subject to Subtenant’s rights and obligations under the Sublease.

Distribution of Award
. All awards and damages received on account of any Taking, whether partial or total (including all amounts in respect to both the Premises, Improvements constructed thereon, and personal property located thereon or thereat), including interest received, if any, whether such award or damages are paid in respect to the Taking of the Landlord’s fee interest, or the Tenant’s Interest or any portion thereof (hereinafter collectively referred to as the “Award”), shall be paid promptly by the Person(s) receiving the same to an escrow agent mutually acceptable to Landlord and Tenant, to be released as hereinafter provided upon appropriate instruction from the parties hereto.

Allocation of Award; Partial Taking. Any Award in a Partial Taking shall be distributed by the aforementioned escrow agent in the order of priority set forth in Section 11.4.1 of the Sublease.

Allocation of Award; Temporary Taking. In the event of a Taking for temporary use or occupancy, this Lease shall continue in full force and effect without reduction or abatement of any Rent payable hereunder, and Tenant shall be entitled to claim, recover and retain any Award made on account of such temporary Taking; provided, however, that if the period of such temporary Taking extends beyond the Term, such Award shall be apportioned between Landlord and Tenant as of the date of expiration of the Term.

Allocation of Award; Total Taking. Any Award in a Total Taking shall be distributed by the aforementioned escrow agent in the priority set forth in the Sublease.

Conduct of Proceedings
. Subject to the rights of Landlord to participate therein, Tenant and Landlord shall jointly commence, appear in and prosecute any action or proceeding involving a Taking of the Premises, or any part thereof or interest therein, by condemnation or under the power of eminent domain, or otherwise and shall jointly make any compromise or settlement in connection therewith. If the parties disagree concerning such action or proceeding and there shall exist an Event of Default under this Lease, Landlord shall be entitled at its option to commence, appear in and prosecute on its own and in its own name any such action or proceeding and Landlord shall also be entitled to make on its own any compromise or settlement in connection therewith, subject to the rights of Landlord to participate therein.

ASSIGNMENT AND SUBLETTING
Assignment
. Tenant shall not assign Tenant’s Interest without Landlord’s prior written consent, which consent may be withheld for any reason or no reason in Landlord’s sole and absolute discretion.

LIENS AND ENCUMBRANCES
Covenant Against Encumbrances
. Subject to Subtenant’s rights under the Sublease, Tenant shall not, and shall have no right to, encumber Landlord’s interest in the Premises, and Tenant covenants to keep the Premises and each and every part thereof at all times free and clear of any and all liens and encumbrances of any kind whatsoever arising out of Tenant’s acts or omissions or those acts or omissions of its agents and Occupants, including, without limitation, those liens and encumbrances created by Tenant’s acts or omissions, and those created by the performance of any work of improvement, alteration, maintenance, replacement or repair, or labor or furnishing of any material, supplies or equipment in connection therewith. Should Tenant fail to discharge or cause to be discharged any claim of lien within sixty (60) days after service on Tenant, then, on written notice from Landlord, Landlord may pay, adjust, compromise and discharge any such lien or claim of lien on such terms and manner as Landlord may deem appropriate. In such event, Tenant shall immediately reimburse Landlord for the full amount paid by Landlord in connection with such lien or claim of lien, including any reasonable attorneys’ fees or costs, or other costs expended by Landlord, together with interest and late charges at the rates provided in Article 4 from the date of payment by Landlord to date of repayment by Tenant.

Hold Harmless
. Tenant agrees that its indemnity obligations under Section 19.4 shall apply to any liens, encumbrances, and/or other Claims arising out of the conduct of activities by Tenant or any other Tenant Parties (but excluding Tenant’s guests, invitees, contractors, and subcontractors).

Non-Subordination
. The Landlord’s reversionary interest in the Premises and Landlord’s interest in this Lease shall be superior and prior in interest to any loans, mortgages, deeds of trust, other leases, liens and encumbrances that may hereafter be placed on the Premises, Improvements, Project, or any part thereof, by, against or as a result of the acts of Tenant or anyone deriving any interest in the Premises, or any part thereof or interest therein, through Tenant. Any loan, mortgage, deed of trust, lease, lien or encumbrance placed by Tenant on the Premises, Improvements, Project, or any part thereof or interest therein, shall not adversely affect Landlord’s interests under this Lease or Landlord’s interests in the Premises. Tenant agrees, without any cost or expense to Landlord, to execute any instrument which is necessary or is reasonably requested by Landlord to further confirm the non-subordination of Landlord’s reversionary interest in the Premises and Landlord’s interest in this Lease.

HYPOTHECATION
Lease as Security
. This Lease shall be a prior lien against the Improvements, Project and any encumbrance on the Premises with respect to any loans, mortgages, deeds of trust, other leases, liens and encumbrances that may hereafter be permitted to be placed on the Project, Improvements, and/or the Premises under the terms of this Lease. Neither Landlord nor Tenant may encumber the Premises or Project with a mortgage or any other financing-related encumbrance; provided, however, that nothing herein shall impair or limit Landlord’s right to obtain financing not secured by the Premises or Project, including but not limited to a revenue bond pledge.

DEFAULT
Waiver
. A waiver by Landlord of any term, condition, or covenant of this Lease shall not constitute a subsequent waiver of the same or any other term, condition or covenant of this Lease, nor of the strict and prompt performance thereof by Tenant. Landlord’s delay, failure or omission to reenter the Premises, or to exercise any right, power, privilege, option or remedy arising from any default, shall not impair such right, power, privilege, option or remedy which Landlord has, nor be construed as Landlord’s waiver or relinquishment of any such right, power, privilege or option, or its acquiescence to a default. Landlord shall not be required to give notice in order to restore or revive either (a) time as of the essence hereof, nor (b) any other covenant or condition, after Landlord has waived a default in one or more instances. No right, power, privilege, option, or remedy of Landlord shall be construed as being exhausted or discharged by the exercise thereof in one or more instances. Each and all of the rights, powers, privileges, options or remedies given Landlord by this Lease are cumulative and no one of them is exclusive of the other or exclusive of any remedies provided by law, and the exercise of one right, power, privilege, option or remedy by Landlord shall not impair Landlord’s right to any other.

Default by Tenant
. Without intending to limit Landlord’s right to declare a default of this Lease for any other reason, the occurrence of any of the following shall, at Landlord’s election, constitute an “Event of Default” under this Lease:

Tenant’s failure to pay to Landlord any amount due and payable hereunder within five (5) days of receipt by Tenant of written notice of default given by Landlord; Tenant’s failure to enforce its rights under the Sublease following a default by Subtenant thereunder, where such failure continues thirty (30) Business Days after Tenant’s receipt of written notice thereof by Landlord; Tenant’s event of default under the Sublease;
A failure by Tenant to observe and perform any other provision of this Lease to be observed or performed by Tenant, when such failure continues for more than thirty (30) days after written notice thereof by Landlord to Tenant; provided, however, that if the nature of such default is such that the same cannot reasonably be cured within such thirty (30) day period, Tenant shall not be deemed to be in default if Tenant shall within such period commence such cure and thereafter diligently prosecute the same to completion within an additional period not to exceed ninety (90) days; The making by Tenant of any general assignment for the benefit of creditors, or the filing of a petition to have Tenant adjudicated as bankrupt, or the filing of a petition for reorganization or arrangement under any law relating to bankruptcy unless, in the case of a petition filed against Tenant, the same is dismissed within sixty (60) days; or the appointment of a trustee or receiver to take possession of substantially all of Tenant’s Interest, when possession is not restored to Tenant within sixty (60) days; or the attachment, execution or other judicial seizure of substantially all of Tenant’s assets located on the Premises or of Tenant’s Interest, when such seizure is not discharged within sixty (60) days; Tenant’s failure to deliver any estoppel certificates, financial statements or reports, and/or any other deliverable required of Tenant hereunder by the date due where such failure is not cured within ten (10) Business Days after written notice from Landlord; Any other event or circumstance which, under the express terms of this Lease (including any exhibits and schedules hereto), are deemed to be an Event of Default by Tenant hereunder.

Remedies by Landlord
. Upon the occurrence of an Event of Default, Landlord may resort, cumulatively or in the alternative, to the remedies set forth in Section 15.4, Section 15.5, and Section 15.12, as well as to any one or more other remedies provided by law or in equity.

Non-monetary Remedies.

Termination. Landlord may, upon an Event of Default, at Landlord’s election, terminate this Lease by giving Tenant notice of termination. On the giving of the notice, all of Tenant’s rights in the Premises, Improvements, Project and every part thereof, shall terminate. Landlord shall not be deemed to have terminated this Lease unless Landlord shall have so declared in writing to Tenant, nor shall Landlord be deemed to have accepted or consented to an abandonment by Tenant by performing acts intended to maintain or preserve the Premises or the Improvements, making efforts to relet the Premises or appointing a receiver to protect Landlord’s interest under this Lease. Immediately after notice of termination, Tenant shall surrender and vacate the Premises, Project and all Improvements in a broom clean condition considering ordinary wear and tear, and Landlord may reenter and take possession of the Premises, Project and all Improvements and eject all parties in possession or eject some and not others or eject none. In the event of any termination of this Lease, Tenant’s right, title and interest in development documents related to the Improvements shall automatically and without additional compensation to Tenant become the property and vest in Landlord. Upon any termination of this Lease, Tenant shall execute such documents as Landlord may request to memorialize the termination and to release Landlord, the Premises, Project and Improvements from the terms and conditions of this Lease. Said documents may include, without limitation and at Landlord’s discretion, agreements which assign contracts between Tenant and vendors relating to the operation, management or maintenance of the Premises, or any part thereof, to Landlord. Notwithstanding any such termination set forth above, Tenant shall remain obligated hereunder for those obligations which survive such termination.

Reentry Without Termination. Landlord may at Landlord’s election reenter the Premises and, without terminating this Lease, at any time and from time to time relet the Premises, Project and Improvements, or any part or parts of them, for the account and in the name of Tenant or otherwise. Landlord may, at Landlord’s election, eject all Persons or eject some and not others or eject none. Any reletting may be for the remainder of the Term or for a longer or shorter period. Landlord may execute any leases made under this provision either in Landlord’s name or in Tenant’s name and shall be entitled to all rents from the use, operation, or occupancy of the Premises, Project and Improvements. No act by or on behalf of Landlord under this provision shall constitute a termination of this Lease unless Landlord gives Tenant written notice of termination.

Additionally, Landlord shall have the remedy described in California Civil Code Section 1951.4 (lessor may continue lease in effect after lessee's breach and abandonment and recover rent as it becomes due, if lessee has the right to sublet or assign, subject only to reasonable limitations). Accordingly, if Landlord does not elect to terminate this Lease on account of any default by Tenant, Landlord may, from time to time, without terminating this Lease, enforce all of its rights and remedies under this Lease, including the right to recover all Rent as it becomes due.

Tenant’s Personal Property. Landlord may, at Landlord’s election, use Tenant’s personal property and fixtures or any of such property and fixtures without compensation and without liability for use or damage, or Landlord may store them for the account and at the cost of Tenant.

Non-Exclusive. The election of one remedy for any one item shall not foreclose an election of any other remedy for another item or for the same item at a later time.

Monetary Remedies for Tenant’s Default.

Termination. Termination due to an Event of Default shall not relieve Tenant from the payment of any sum then due to Landlord.

Reentry Without Termination. Landlord’s reentry without termination under the provisions above shall not relieve Tenant from payment to Landlord on the due dates specified in this Lease the equivalent of all sums required of Tenant under this Lease, plus Landlord’s expenses, less the proceeds of any reletting or assignment.

Recovery of Damage. In addition to any other remedies Landlord may have, it may recover from Tenant all damages it may reasonably incur by reason of Tenant’s Event of Default, including, without limitation, the cost of recovering the Premises and reasonable attorneys’ fees and expenses and all other amounts recoverable pursuant to section 1951.2 of the California Civil Code. The amounts recoverable pursuant to section 1951.2 of the California Civil Code are as follows:
the worth at the time of award of any unpaid rent which had been earned at the time of such termination; plus the worth at the time of award of the amount by which the unpaid rent which would have been earned after termination until the time of award exceeds the amount of such rental loss that Tenant proves could have been reasonably avoided; plus the worth at the time of award of the amount by which the unpaid rent for the balance of the term after the time of award exceeds the amount of such rental loss that Tenant proves could be reasonably avoided; plus 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.

As used in clauses (a) and (b) above, the "worth at the time of award" is computed by allowing interest at the maximum rate an individual is permitted to charge by law. As used in clause (c) above, the "worth at the time of award" 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%).

Landlord May Require Strict Performance
. Landlord may require strict performance of all covenants and obligations herein as the same shall accrue or become due, including, but not limited to, the right to recover rent and charges equivalent to rent without terminating this Lease and have the right of action therefor without awaiting the end of the Term.

Landlord May Obtain Possession
. Nothing contained herein shall affect, change or waive any rights of Landlord to obtain equitable relief when such relief is otherwise appropriate, or to obtain the relief provided by California Code of Civil Procedure sections 1159, et seq., relating to actions for unlawful detainer, forcible entry and forcible detainer. If Landlord obtains possession of the Premises under a judgment pursuant to Section 1174 of the Code of Civil Procedure, or if Landlord by written notice declares this Lease to be terminated because of an Event of Default by Tenant, then Landlord may repossess and enjoy the Premises, together with all Improvements thereon. Any lawful reentry as provided for herein shall be allowed by Tenant without hindrance, and Landlord shall not be liable in damages or guilty of trespass because of any such lawful reentry.

No Waiver
. Landlord’s election to perform any obligation of Tenant on Tenant’s failure or refusal to do so shall not constitute a waiver of any right or remedy for Tenant’s default, and Tenant shall promptly reimburse, defend, indemnify, and hold harmless the Landlord Parties against all Claims arising therefrom subject to the notice and cure provisions set forth in subsection 15.2.4 above.

Landlord Default; Remedies of Tenant
. Landlord shall not be in default under this Lease unless Landlord fails to perform any obligation of Landlord under this Lease, where such failure continues for more than thirty (30) days after detailed written notice thereof to Landlord by Tenant; provided, however, that if the nature of such default is such that the same cannot reasonably be cured within such thirty (30) day period, Landlord shall not be deemed to be in default if Landlord has, within such period, commenced such cure and thereafter diligently prosecute the same to completion. In the event of a Landlord default (beyond applicable notice and cure periods) Tenant shall have, subject to the restrictions and limitations set forth in this Lease, such remedies as are provided by Law with respect to a breach or alleged default by Landlord. Notwithstanding any provision of this Lease to the contrary, in no event shall Landlord be liable under this Lease, and Tenant hereby releases Landlord from, any consequential, exemplary, special, or punitive damages, or lost profits or lost revenues that may arise or result from this Lease.

Failure of Tenant to Perform Required Acts
. Subject to Tenant’s right to contest as provided elsewhere in this Lease, if Tenant fails, refuses, or neglects during the Term to do any of the things required to be done by Tenant, Landlord shall have the right, but not the obligation, to do the same, but at the cost of and for the account of Tenant. Unless Landlord believes that its interests may be adversely affected by such delay, Landlord shall in no case take such action sooner than five (5) Business Days after giving Tenant written notice of such failure, refusal or neglect. Tenant shall pay to Landlord on demand any sum expended by Landlord under this section together with interest thereon at the rate provided in Article 4. Nothing contained in this section shall impair the rights or Landlord with regard to defaults or remedies under the remaining portion of this Article 15.

Time for Cure; Waiver
. The times set forth herein for the curing of an Event of Defaults by Tenant are of the essence of this Lease. Tenant hereby irrevocably waives any right otherwise available under any Laws to redeem or reinstate this Lease, including without limitation redemption or relief from forfeiture under California Code of Civil Procedure Sections 1174 and 1179, or under any other pertinent present or future Laws.

Landlord’s Self-Help Right. If, in Landlord’s reasonable determination, Tenant is failing to enforce any obligations of Subtenant under the Sublease, including Subtenant’s monetary and non-monetary obligations, then Landlord shall provide Tenant with written notice identifying such failure (the “Subtenant Performance Notice”). After receipt of the Subtenant Performance Notice, Landlord and Tenant shall meet and confer (the “Subtenant Performance Meeting”) in good faith to address the matters set forth in the Subtenant Performance Notice. Tenant shall promptly and with commercially reasonable diligence proceed to remedy and cure the matters identified in the Subtenant Performance Notice. Following the Subtenant Performance Meeting, if Tenant fails to remedy and cure the matters identified in the Subtenant Performance Notice and such failure continues five (5) Business Days after Tenant’s receipt of written notice thereof from Landlord, then Landlord may proceed to take required action to enforce the obligations of Subtenant under the Sublease, including but not limited to the right to collect directly from Subtenant amounts owing from Subtenant under the Sublease and Landlord shall be entitled to prompt reimbursement by Tenant of Landlord’s reasonable costs and expenses in taking such action; provided that, upon the occurrence of an Event of Default by Tenant hereunder, Landlord shall be entitled to prompt reimbursement by Tenant of Landlord’s reasonable costs and expenses in enforcing the obligations of Subtenant under the Sublease.

CERTAIN COVENANTS AND REPRESENTATIONS OF TENANT
Non Discrimination
. During the Term of this Lease, Tenant, the other Tenant Parties, and their respective agents, contractors and subcontractors shall not deny the benefits of this Lease to any Person on the basis of religion, color, ethnic group identification, sex, age, physical or mental disability, nor shall they discriminate unlawfully against any employee or applicant for employment because of race, religion, color, national origin, ancestry, physical handicap, mental disability, medical condition, marital status, age (over 40), or sex. Tenant shall insure that the evaluation and treatment of employees and applicants for employment are free of such discrimination. Without limiting the foregoing, Tenant hereby recognizes and agrees that every State contract and subcontract for public works or for goods or services are required to contain a nondiscrimination clause prohibiting discrimination on the bases enumerated above, and Tenant is hereby obligated to give written notice of its obligations under this clause to all parties it contracts with for any purpose relating to the Premises, Improvements, and/or Project, including without limitation all contractors, subcontractors, labor organizations, and other providers of goods and/or services. These contractual provisions shall be fully and effectively enforced.

Fair Employment and Housing Act
. During the Term of this Lease, Tenant, the other Tenant Parties, and their respective agents, contractors and subcontractors shall comply with the provisions of the Fair Employment and Housing Act (Government Code Section 12900 et seq.), the regulations promulgated there under (California Code of Regulations, Title 2, Sections 7285.0 et seq.), and the provisions of Article 9.5, Chapter 1, Part 1, Division 3, Title 2 of the Government Code (Government Code Sections 11135-11139.5). Tenant shall permit access by representatives of the Department of Fair Employment and Housing and the Landlord upon reasonable notice at any time during the normal business hours, but in no case less than 24 hours’ notice, to such of its books, records, accounts, other sources of information, and its facilities as said Department or Landlord shall require to ascertain compliance with this clause.

Contracts and Subcontracts
. All of Tenant’s contracts with contractors and subcontractors regarding or involving Tenant’s Interest or the Sublease shall contain provisions consistent with those contained in Sections 16.1 and 16.2 above.

RELOCATION ASSISTANCE WAIVER
Relocation Assistance Waiver
. Tenant acknowledges that after this Lease has expired or terminated, Landlord may develop the Premises for public projects and other public or private uses and programs that may be implemented by Landlord or other public or private agencies or entities. Accordingly, as a condition to entering into this Lease, Tenant acknowledges and agrees that: (a) upon the termination or expiration of this Lease, Tenant, and its Affiliates shall not be entitled to receive, and hereby release and waive, (i) any relocation assistance, moving expenses, goodwill or other payments under the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, as amended, 42 U.S.C. §§ 4601 et seq., 49 CFR 24 and/or the California Relocation Assistance Law, as amended, California Government Code §§ 7260 et seq., or any successor or equivalent statutes, to the extent applicable, and (ii) any compensation under Business and Professions Code Section 5412 regarding signage as a result of such termination and vacation of the Premises (collectively, “Relocation Assistance”) and (b) Tenant shall require each Subtenant or Person to which Tenant has granted occupancy rights to any portion of the Premises to release and waive any rights such Subtenant or Person might have to Relocation Assistance, to the fullest extent allowed by applicable Law, as a condition of the Sublease or other agreement granting occupancy rights to any portion of the Premises. Tenant acknowledges that this Lease shall be considered full advance compensation for such release and waiver of the Relocation Assistance. In the event of any assertion or Claim by Tenant or a Subtenant or Affiliate that such Tenant, Subtenant or such Affiliate has not waived all Relocation Assistance or is entitled to Relocation Assistance, then Tenant shall indemnify Landlord and the other Landlord Parties against such Claims in accordance with Section 19.4 hereof, provided such indemnity shall not apply to the extent such Claim arises for a Subtenant or other Person to which Tenant has granted occupancy rights to any portion of the Premises and such Claim could not have been validly waived in accordance with applicable Laws at the commencement of such tenancy or occupancy. The terms and indemnities included in this Article 17 shall survive the expiration or termination of this Lease.

Release
. In connection with and to the extent of the Tenant’s release and waiver of any Relocation Assistance, Tenant expressly waives the provisions of California Civil Code Section 1542, as may be amended or modified, which currently provides:

Tenant hereby acknowledges and agrees that the foregoing release is material consideration to Landlord under this Lease, and but for such release by Tenant the Landlord would not enter into this Lease. The release and waiver set forth in this Article 17 shall survive the expiration of the Term and any earlier termination of this Lease.

Tenant’s initials: ______________

QUIET ENJOYMENT
Quiet Enjoyment
. So long as no Event of Default has occurred and is continuing, subject to Landlord’s rights hereunder, and except for Landlord’s actions in the case of an emergency for the purposes of protecting public health or safety or damage to property, Tenant shall lawfully, peacefully and quietly hold, occupy and enjoy the Premises during the Term without disturbance, interruption or hindrance by Landlord, or any Person claiming by or through Landlord. Landlord shall in no event be liable in damages or otherwise, nor shall Tenant be released from any obligation or liability hereunder, because of the interruption of any utility or service, or a termination, interruption or disturbance attributable to an event of Force Majeure, or any cause due to any act or neglect of Tenant or other Tenant Party, or any Person claiming by or through Tenant or any other Tenant Party.

MISCELLANEOUS
Notices
. All notices, demands, or other communications that either party desires or is required or permitted to give or make to the other party under or pursuant to this Lease (collectively referred to as “notices”) shall be made or given in writing and shall either be (i) personally served, (ii) sent by registered or certified mail, postage prepaid, or (iii) sent by a nationally recognized overnight delivery service or courier. Notices may be sent via electronic mail so long as they are concurrently sent by one of the other methods provided above. All notices shall be addressed to or personally served on the parties as follows:

If to Landlord, to: The Board of Trustees of the California State University 2600 Nutwood Avenue, CP-1000
Fullerton, California 92831
Attention: Office of the President, California State University, Fullerton and to: The Board of Trustees of the California State University Office of General Counsel
401 Golden Shore
Long Beach, California 90802-42
Attention: University Counsel, California State University, Fullerton and to: The Board of Trustees of the California State University Office of Assistant Vice Chancellor of Capital Planning, Design and Construction
401 Golden Shore
Long Beach, California 90802-42
Attention: Assistant Vice Chancellor, Capital Planning, Design and Construction If to Tenant: City of Fullerton
303 W. Commonwealth Ave.

Fullerton, CA 92832
Attention: City Manager
and to: Jones Mayer
3777 N. Harbor Blvd
Fullerton, CA 92835
Attention: Fullerton City Attorney
Any notice that contains a request for Landlord’s consent shall clearly state that consent is being requested in such notice and, if applicable, that failure to respond within the applicable time period (which time period shall be stated in such notice) may be deemed consent. Service of any such notice or demand so made by mail shall be deemed complete as of the date received or the date delivery is refused. The address to which notices and demands shall be delivered or sent may be changed from time to time by notice served as herein provided by either party upon the other party.

Brokerage Commissions
. Each party represents to the other that it has not entered into any agreement or incurred any obligation which might result in the obligation to pay a brokerage commission or finder’s fee with respect to this transaction. Each party agrees to indemnify, defend and hold the other party harmless from and against any real estate brokerage commissions or other such obligations incurred by the indemnified party as the result of any agreement or act of the indemnifying party giving rise to a claim for such commission or other obligation.

Estoppel Certificates
. Tenant or Landlord, as the case may be, will execute, acknowledge and deliver to the other, within fifteen (15) days of receipt of written request, an estoppel certificate in the form attached hereto as Schedule 19.3, which certificate may be relied upon by any prospective purchaser, assignee, or government agency.

Indemnification.

Tenant’s Indemnification. In addition to any other indemnities for the benefit of Landlord under this Lease, the Tenant shall indemnify, defend and hold harmless the Landlord Parties, Premises, Project and the leasehold interest from and against any Claims arising out of or in any way connected with (i) the development, construction, improvement, and/or ownership of the Premises and Project, (ii) any cause in, on, related to, or in connection with the Premises or Project during the Term, including, without limitation Claims for loss or damage to any property or for death or injury to any Person or Persons, (iii) any acts, omissions or negligence of Tenant or any other Tenant Party in, on or about the Premises or Project, or in any way related to this Lease, (iv) any violation of the terms and conditions of this Lease by Tenant or any other Tenant Party, and/or failure by Tenant to perform its obligations under this Lease, including without limitation any Event of Default, and/or (v) the Sublease. The foregoing indemnity shall not apply to any Claims to the extent caused by or arising out of any gross negligence or willful misconduct of any Landlord Parties. The foregoing indemnity shall survive the expiration or any earlier termination of this Lease.

Indemnification Procedures for Tenant Indemnities.

Landlord shall notify Tenant in writing of the existence of any matters that Landlord believes in good faith constitute matters subject to indemnification, reimbursement, hold harmless or defense for the benefit of Landlord or any other Landlord Party under this Lease (each, an “Indemnified Claim”) promptly after Landlord becomes aware of the existence of such Indemnified Claim.

Tenant, upon notice from Landlord, shall defend any such Indemnified Claim at Tenant’s expense by counsel satisfactory to Landlord (the “Litigation Counsel”).

Landlord shall determine whether to settle or compromise any Indemnified Claim.

Tenant shall determine, with Landlord’s reasonable consent, whether to appeal any judgment of any Indemnified Claim (an “Appellate Action”), with counsel satisfactory to Landlord at Tenant’s sole cost and expense.

Without limiting anything else in this section, under no circumstances shall Landlord be required to disclose to Tenant any information or materials in connection with an Indemnified Claim to the extent that Landlord is precluded from disclosing the same due to binding confidentiality restrictions, or such information or materials are protected by attorneyclient privilege, in all events subject to any disclosure requirements imposed on Landlord under applicable law.

Tenant agrees that its obligations under this section include all Indemnified Claims that are actually or potentially within the scope of the Tenant’s indemnity, defense, and hold harmless obligations under this Lease, even if the applicable Indemnified Claim may be groundless, fraudulent or false, and no finding or judgment of negligence, fault, breach, or the like on the part of Tenant shall be required for the foregoing obligations to arise.

Subject to the terms of this section, the parties shall cooperate in defending against any Indemnification Claim. In furtherance of the foregoing, Tenant and Landlord shall cooperate fully with the Litigation Counsel in the defense of any Indemnified Claim, including by making documents and/or personnel available to the extent required or deemed reasonably necessary by the Litigation Counsel.

All demands made by Landlord to Tenant for payment and/or reimbursement of Claims under any indemnity in favor or Landlord or any other Landlord Party hereunder shall be in writing, shall include reasonably requested backup information, and shall be paid by Tenant within thirty (30) days after receipt of such written demand.

Survival. The obligations of the parties contained in this Section 19.4 and under any other indemnification provisions contained in this Agreement shall survive the termination or expiration of this Agreement.

Assumption of Risks; Waiver of Liability
. Without limiting any other releases or waivers by or from Tenant elsewhere in this Lease, Tenant hereby agrees to fully and completely assume all risk of loss by theft, accident, fire, flood, earthquake, or other casualty of any kind, which may in any way affect the Premises, Improvements, and/or Project, the use or operation of the Premises, Improvements, and/or Project, or the exercise of the rights granted herein. Tenant waives all claims against Landlord and each of the Indemnified Parties for loss or damage caused by, arising out of, or in any way connected with Tenant’s use of the Premises, Improvements, and/or Project, or the exercise of the rights granted herein.

Non-Merger of Fee and Leasehold Estates
. If under any circumstances both Landlord’s and Tenant’s estates in the Premises, or any portions thereof, become vested in the same owner, this Lease nevertheless shall not be extinguished by application of the doctrine of merger except at the express election of the Landlord.

Time of the Essence
. Time is of the essence in the performance of each and every obligation and covenant of the parties hereto.

Joint and Several Obligations
. If Tenant consists of more than one Person, the obligations of the Persons constituting Tenant are joint and several.

Captions
. The captions and section headings used herein are for convenience only and are not a part of this Lease and do not in any way limit or amplify the terms and provisions hereof.

Construction
. For purposes of this Lease, words of the masculine gender shall be deemed to include correlative words of the feminine and neuter genders. Unless the context shall otherwise indicate, words importing the singular number shall include the plural number and vice versa and words importing persons shall include corporations and associations, including public bodies and the term “agent” shall refer to a Person’s employees, contractors, and representatives.

Governing Law
. This Lease shall be interpreted in accordance with and governed by the laws of the State of California, without regard for its conflict of laws provisions. Venue for any legal action brought by either party with respect to this Lease shall be the Superior Court of the State of California in the County.

Entire Agreement
. This Lease contains all covenants, terms, provisions and agreements between Landlord and Tenant relating in any manner to the construction, rental, use and occupancy of the Premises and other matters set forth in this Lease. No prior agreement or understanding with respect to the same shall be valid or of any force or effect, and no covenant, term, provision or agreement of this Lease can be altered, changed, modified or added to, except in writing, signed by Landlord and Tenant. No representation, inducement, understanding, or anything of any nature whatsoever made, stated, or represented on behalf of either party hereto, either orally or in writing, has induced the other party to enter into this Lease except as set forth in this Lease.

No Presumption Against Drafter
. This Lease has been negotiated at arm’s length and between Persons sophisticated and knowledgeable in the matters dealt with herein. In addition, each party has been represented by experienced and knowledgeable legal counsel. Accordingly, any rule of law or legal decision that would require interpretation of any ambiguities in this Lease against the party that has drafted it is not applicable and is waived. The provisions of this Lease shall be interpreted in a reasonable manner to effect the purposes of the parties and this Lease.

Right to Request Injunction
. In the event of any violation or threatened violation by either party of any of the terms, covenants, and conditions herein contained, in addition to the other remedies herein provided, each party shall have the right to petition for injunctive relief against such violation or threatened violation in a court of competent jurisdiction.

Severability
. If any clause, sentence or other portions of this Lease shall become invalid, illegal, or unenforceable for any reason, or shall be held by any court of competent jurisdiction to be so, the remaining portions thereof shall remain in full force and effect and such clause, sentence or other portions shall be ineffective only to the extent of such invalidity, illegality, or unenforceability.

BOT Action
. Tenant acknowledges that many of the approvals or consents to be given by Landlord hereunder are subject to approval by the BOT, through formal action of the BOT at a regularly or specially called meeting, or its delegee. Landlord makes no representation that any such approval or consent will be granted or that any consent or approval granted by Landlord pursuant to this Lease shall indicate that the attendant approval or consent from the BOT or its delegee is forthcoming. Landlord shall not be in breach of any obligation under this Lease for which Landlord’s performance requires the consent, approval, or other action of the BOT or its delegee, and where BOT or its delegee does not grant such consent or approval, and/or does not take such action, in the manner or time provided for in this Lease for Landlord’s performance.

Cooperation in Execution, Delivery and Recordation of Documents . Landlord and Tenant agree to cooperate in the execution, delivery and recordation of such documents, instruments and agreements requested by either party as are reasonably necessary in order to carry out the purposes of this Lease and to execute and deliver all documents, instruments and agreements reasonably necessary to terminate all interests granted herein upon their termination or expiration as provided herein; provided in all events such documents, instruments and agreements must be consistent with the express terms and conditions of this Lease.

Representations and Warranties of Tenant
. As a material inducement to Landlord to enter into this Lease, Tenant represents and warrants the following:

Power and Authority. That it has all necessary power and authority to enter into this Lease and to carry out the transactions contemplated herein; and that the execution and delivery hereof and the performance by Tenant of its obligations hereunder will not violate or constitute a default or breach under the terms and provisions of any agreement, law or court order to which Tenant or any other Tenant Party is a party or by which Tenant is bound the remedy for which default would have a material adverse effect on Tenant’s ability to perform its obligations hereunder.

Authorization; Valid Obligations. That all actions required to be taken by or on behalf of Tenant to authorize it to execute, deliver and perform its obligations under this Lease have been taken, and that this Lease is a valid and binding obligation of Tenant enforceable in accordance with its terms, except as the same may be affected by bankruptcy, insolvency, moratorium or similar laws, or by legal or equitable principles relating to or limiting the rights of contracting parties generally.

Executing Parties. That the Persons executing this Lease on behalf of Tenant have full power and authority to bind Tenant to the terms hereof.

Patriot Act. That Tenant and no other Tenant Party is included on the List of Specially Designated Nationals and Blocked Persons maintained by OFAC, and does not reside in, and is not organized or chartered under the laws of (i) a jurisdiction that has been designated by the U.S. Secretary of the Treasury under Section 311 or 312 of the Patriot Act as warranting special measures due to money laundering concerns, or (ii) any foreign country that has been designated as non-cooperative with international anti-money laundering principles or procedures by an intergovernmental group or organization, such as the Financial Action Task Force on Money Laundering, of which the United States is a member and with which designation the United States representative to the group or organization continues to concur.

No Bankruptcy. Tenant has not made a general assignment for the benefit of creditors; filed any voluntary petition in bankruptcy; suffered the filing of an involuntary petition by its creditors; suffered the appointment of a receiver to take possession of substantially all of its assets; suffered the attachment or other judicial seizure of substantially all of its assets; admitted its inability to pay its debts as they come due; or made an offer of settlement, extension or composition to its creditors general.

Representations and Warranties of Landlord
. As a material inducement to Tenant to enter into this Lease, Landlord represents and warrants the following:

Power and Authority. That it has all necessary power and authority to enter into this Lease and to carry out the transactions contemplated herein.

Authorization; Valid Obligations. That all actions required to be taken by or on behalf of Landlord to authorize it to execute, deliver and perform its obligations under this Lease have been taken, and that this Lease is a valid and binding obligation of Landlord enforceable in accordance with its terms, except as the same may be affected by bankruptcy, insolvency, moratorium or similar laws, or by legal or equitable principles relating to or limiting the rights of contracting parties generally.

Executing Parties. That the Persons executing this Lease on behalf of Landlord have full power and authority to bind Landlord to the terms hereof.

Relationship of Parties
. Nothing contained in this Lease shall be deemed or construed by the parties or by any third person to create the relationship of principal and agent, or of partnership or of joint venture, or of any association between Landlord and Tenant, and none of the provisions contained in this Lease or any acts of the parties shall be deemed to create any relationship other than lessor and lessee between Landlord and Tenant, nor shall this Lease be construed, except as expressly provided, to authorize either to act as agent for the other.

Survival of Covenants
. All covenants which, by their terms, are not to be performed before the expiration or earlier termination of this Lease shall survive the expiration or earlier termination hereof.

Binding Effect
. The provisions of this Lease shall bind or benefit the heirs, executors, administrators, successors and permitted assigns of the original parties to this Lease.

No Third Party Beneficiaries
. This Lease shall not, nor be deemed to, confer upon any Person, other than the parties hereto, any right or interest, including without limitation any third-party beneficiary status or any right to enforce any provision of this Lease. Notwithstanding the foregoing, Tenant acknowledges and agrees that Landlord is a third-party beneficiary under the Sublease, and that whenever Landlord is entitled to reimbursement from Subtenant under the Sublease, Tenant shall revert to Landlord such reimbursed amounts actually received from Subtenant.

No Rights to Light, Air, or Views
. This Lease does not grant any legal rights to “light and air” outside the Premises nor any view, landscape or cityscape visible from the Premises.

Execution in Counterparts
. This Lease may be executed in counterparts, each of which shall constitute an original of such Lease, but all of which shall constitute one and the same instrument.

Intentionally Deleted
.

Naming Rights
. The BOT or its delegee, and only the BOT or its delegee, has the authority to name all facilities and all improvements constructed on property owned by Landlord, including the Premises. The Premises shall at all times comply with all University Policies, as amended from time to time, including those regarding the naming of facilities located on property owned by Landlord. Tenant may not adopt, create, or permit to be attached to the Premises or any Improvements thereon, any name except (i) in accordance with all applicable Laws and Landlord’s rules, regulations and policies, and (ii) with the prior written approval of the BOT or its delegee. The limitations and restrictions set forth in this paragraph shall be collectively referred to as the “Naming Rights Restrictions”.

Confidentiality; Press Releases
. Tenant shall keep confidential any information regarding the Premises, Improvements and Project that Landlord so requests, except to the extent any such information was in the public domain or deemed to be a public record as of the date of disclosure. Tenant acknowledges that Landlord (i) is required to make disclosures in accordance with applicable Laws, including the California Public Records Act, Government Code § 6250 et seq., the Richard McKee Transparency Act of 2011, Education Code § 92950 et seq., and Landlord’s implementing regulations and guidelines, (ii) may be subject to other requirements relating to information in the possession of governmental entities, and (iii) may take all such actions as in connection therewith it deems appropriate or required in order to comply with all applicable Laws. Tenant shall not issue any press release nor general public announcement concerning the transactions described in this Lease or any other matters relating to the proposed Project, except as may be required by applicable Laws, without first obtaining the prior written approval of Landlord. This paragraph shall survive any expiration of the Term or earlier termination of this Lease.

Landlord Consent and Approval
. Unless expressly set forth otherwise in this Lease, Landlord’s consent or approval to any matter requiring Landlord’s consent or approval and any determination required or permitted of Landlord under this Lease shall be in Landlord’s sole and absolute discretion. Additionally, wherever Landlord’s consent or approval is required under this Lease, and Landlord fails to provide Tenant with written notice of its consent, approval, or disapproval by any deadline set forth herein, it shall not be a default by Landlord, but shall instead be deemed a disapproval thereof by Landlord. Notwithstanding anything to the contrary in this Lease, if Tenant claims that Landlord has unreasonably withheld its consent or approval under this Lease, Tenant’s sole remedy shall be a declaratory judgment and an injunction for the relief sought without any monetary damages, and Tenant hereby waives the provisions of Section 1995.310 of the California Civil Code, or any successor statute, all other remedies, including, without limitation, any right at law or equity to terminate this Lease, and all rights it may have, now or in the future, to bring an action or make a claim for any other relief, including without limitation declaratory judgment, damages or other monetary relief including, but not limited to, punitive damages.

Reservation of Rights
. Without limiting any other provision of this Lease, the parties each hereby acknowledge and agree that nothing in this Lease shall in any way be construed as a waiver or limitation of any kind on Landlord’s sovereign rights as the State of California acting in its higher education capacity, whether with respect to the Premises, Project, or otherwise, and further the parties hereby agree that other than any express rights granted to Tenant under this Lease, Landlord reserves all rights and privileges with respect to the Premises and all appurtenances thereto. [Signatures on Next Page]
IN WITNESS WHEREOF, the parties hereto have executed this Lease on the date indicated next to their signatures below.

LANDLORD:

THE BOARD OF TRUSTEES OF THE CALIFORNIA STATE UNIVERSITY,

THE STATE OF CALIFORNIA ACTING IN ITS HIGHER EDUCATION CAPACITY,

ON BEHALF OF CALIFORNIA STATE UNIVERSITY, FULLERTON
By: _____________________
Name: _____________________
Its: _____________________
Date: _________________, 2024
TENANT

THE CITY OF FULLERTON, CALIFORNIA
By: _____________________
Name: _____________________
Its: _____________________
Date: _________________, 2024

TABLE OF CONTENTS
Page
ARTICLE 1 DEFINITIONS 2

1.1 “Additional Rent” 2

1.2 “Affiliate” 2

1.3 “BOT” 2

1.4 “Business Day” 2

1.5 “Campus” 2

1.6 “Claim(s)” 2

1.7 “Comparable Projects” 2

1.8 “County” 2

1.9 “Force Majeure” 2

1.10 “Hazardous Substance” 3

1.11 “Hazardous Substance Activities” 3

1.12 “Improvements” 3

1.13 “Landlord” 3

1.14 “Landlord’s Interest”. 4

1.15 “Landlord Party” 4

1.16 “Laws” 4

1.17 “Occupant”. 4

1.18 “Partial Taking” 4

1.19 “Percentage Rent”. 4

1.20 “Permitted Uses” 4

1.21 “Person” 4

1.22 “Prohibited Uses” 4

1.23 “Rent” 4

1.24 “Rent Commencement Date” 4

1.25 “Subleasehold Mortgagee” 4

1.26 “Sublease”. 4

1.27 “Subtenant” 4

1.28 “Taking” 4

1.29 “Taxes” 5

1.30 “Tenant” 5

1.31 “Tenant’s Interest” 5

1.32 “Tenant Party” 5

1.33 “Total Taking” 5

1.34 “University Policies” 5
ARTICLE 2 GRANT AND TERM 6

2.1 Lease 6

2.2 Intentionally Deleted 6

2.3 Reservation of Oil, Gas and Mineral Rights 6

2.4 Term. 6

2.5 Holding Over 6

2.6 Termination of Sublease 7

2.7 Enforcement of Sublease. 8

2.8 Intentionally Deleted 8

2.9 Condition of Premises 8

2.10 Ownership and Removal of Improvements. 9

2.11 Surrender of Premises. 10
ARTICLE 3 IMPROVEMENTS 10

3.1 General 10
ARTICLE 4 LEASE CONSIDERATION 10

4.1 Intentionally Deleted 10

4.2 Percentage Rent 10

4.3 Place of Payment of Rental 11

4.4 Net Lease; No Rent Abatement or Reduction 11

4.5 Other Payments 11

4.6 Interest 11

4.7 Late Charges 11
ARTICLE 5 USE 11

5.1 Use of Premises.. 11
ARTICLE 6 OPERATION AND MAINTENANCE 12

6.1 General 12

6.2 Entry of Premises by Landlord 12
ARTICLE 7 TAXES 12

7.1 Payment of Taxes 12
ARTICLE 8 UTILITIES 12

8.1 Utilities 12

8.2 Utility Easements 12
ARTICLE 9 DAMAGE OR DESTRUCTION 12

9.1 Damage or Destruction of Improvements. 12
ARTICLE 10 INSURANCE 13

10.1 Insurance Requirements 13
ARTICLE 11 CONDEMNATION 13

11.1 Notice; Lease Governs 13

11.2 Termination of Lease 13

11.3 Partial Taking 13

11.4 Distribution of Award 13

11.5 Conduct of Proceedings 14
ARTICLE 12 ASSIGNMENT AND SUBLETTING 14

12.1 Assignment 14
ARTICLE 13 LIENS AND ENCUMBRANCES 14

13.1 Covenant Against Encumbrances 14

13.2 Hold Harmless 15

13.3 Non-Subordination 15
ARTICLE 14 HYPOTHECATION 15

14.1 Lease as Security 15

14.2 Reimbursement of Landlord Costs 15
ARTICLE 15 DEFAULT 15

15.1 Waiver 15

15.2 Default by Tenant 16

15.3 Remedies by Landlord 16

15.4 Non-monetary Remedies. 17

15.5 Monetary Remedies for Tenant’s Default. 18

15.6 Landlord May Require Strict Performance 18

15.7 Landlord May Obtain Possession 19

15.8 No Waiver 19

15.9 Landlord Default; Remedies of Tenant 19

15.10 Failure of Tenant to Perform Required Acts 19

15.11 Time for Cure; Waiver 19

15.12 Landlord’s Self-Help Right.. 19
ARTICLE 16 CERTAIN COVENANTS AND REPRESENTATIONS OF TENANT 20

16.1 Non Discrimination 20

16.2 Fair Employment and Housing Act 20

16.3 Contracts and Subcontracts 20
ARTICLE 17 RELOCATION ASSISTANCE WAIVER 20

17.1 Relocation Assistance Waiver 20

17.2 Release 21
ARTICLE 18 QUIET ENJOYMENT 21

18.1 Quiet Enjoyment 21
ARTICLE 19 MISCELLANEOUS 22

19.1 Notices 22

19.2 Brokerage Commissions 23

19.3 Estoppel Certificates 23

19.4 Indemnification. 23

19.5 Assumption of Risks; Waiver of Liability 25

19.6 Non-Merger of Fee and Leasehold Estates 25

19.7 Time of the Essence 25

19.8 Joint and Several Obligations 25

19.9 Captions 25

19.10 Construction 25

19.11 Governing Law 25

19.12 Entire Agreement 25

19.13 No Presumption Against Drafter 26

19.14 Right to Request Injunction 26

19.15 Severability 26

19.16 BOT Action 26

19.17 Cooperation in Execution, Delivery and Recordation of Documents 26

19.18 Representations and Warranties of Tenant 27

19.19 Representations and Warranties of Landlord 27

19.20 Relationship of Parties 28

19.21 Survival of Covenants 28

19.22 Binding Effect 28

19.23 No Third Party Beneficiaries 28

19.24 No Rights to Light, Air, or Views 28

19.25 Execution in Counterparts 28

19.26 Intentionally Deleted 28

19.27 Naming Rights 28

19.28 Confidentiality; Press Releases 28

19.29 Landlord Consent and Approval 29

19.30 Reservation of Rights 29
List of Exhibits and Schedules:

Exhibit A Legal Description of Premises
Exhibit B Sublease
Schedule 1.22 Prohibited Uses
Schedule 3.5 Fee Schedule
Schedule 4 Rent Terms
Schedule 19.3 Estoppel Certificate Form

EXHIBIT A
Legal Description of Premises

EXHIBIT B
Sublease
[Attached]
SCHEDULE 1.22
Prohibited Uses
This Schedule 1.22 is attached to and incorporated fully into the body of that certain Amendment to Ground Lease dated _________________, 2024 (the “Lease”) by and between THE BOARD OF TRUSTEES OF THE CALIFORNIA STATE UNIVERSITY, which is the State of California acting in its higher education capacity, on behalf of the California State University, Fullerton, one of twenty-three (23) universities in the California State University system, as “Landlord” and THE CITY OF FULLERTON, CALIFORNIA, as “Tenant”. Capitalized terms not defined in this Schedule 1.22 shall have the meanings given to them elsewhere in the Lease.

The following operations and uses, are expressly prohibited on the Premises, including within any Improvement and within the Project:

Tattoos or body piercing.

Any business establishment having a significant focus of its operation on the: (i) sale or distribution of adult magazines, books, video, and other items or media, or (ii) display of adult entertainment.

Bars and/or nightclub only establishments.

Drug paraphernalia and cannabis sales.

Flea market or swap meet.

Auto supply, sales or repair/maintenance.

Gas station and fueling stations, excluding electric vehicle charging stations.

Animal rendering.

Heavy manufacturing, storage, warehousing or distribution centers.

Sales of textbooks to be used as study material by students attending higher education classes of universities or colleges located within one-half mile of the Property (collectively, ''Higher Education Textbooks"); provided, however, in no event shall such restriction be construed to prohibit a national or regional book store such as Barnes & Noble so long as such national or regional book store does not sell Higher Education Textbooks.

Sales of alcoholic beverages for off-site consumption, except: any grocery store, supermarket or drug store that is engaged primarily in the sale of goods, wares and merchandise or services to the general public and conducts such offsite alcoholic beverage sales as a part of its primary business; or the operation of a high-quality wine bar or microbrewery or other similar quality business selling wine and beer products customarily found in comparable projects.

Gaming establishment or card room.

SCHEDULE 4
Rental Terms
This Schedule 4 is attached to and incorporated fully into the body of that certain Ground Lease dated _________________, 2024 (the “Lease”) by and between THE BOARD OF TRUSTEES OF THE CALIFORNIA STATE UNIVERSITY, which is the State of California acting in its higher education capacity, on behalf of the California State University, Fullerton, one of twenty-three (23) universities in the California State University system, as “Landlord” and THE CITY OF FULLERTON, CALIFORNIA, as “Tenant”. Capitalized terms not defined in this Schedule 4 shall have the meanings given to them elsewhere in the Lease.

Tenant shall have the right, prior to the obligation to pay any Percentage Rent hereunder, to retain for its own benefit all rent received from Subtenant as reimbursement for certain advances made by Tenant under Section 3.2 of the “First Amended Agreement for the Development, Maintenance, and Use of Certain Athletic Facilities on the California State University, Fullerton, Campus,” dated May 21, 1987 (as amended, “Sports Complex Agreement”), up to [Seven Hundred Forty-Five Thousand and 00/100 Dollars ($745,000.00)].

Following receipt of amounts described in Section (a) above, Tenant, on behalf of the Tenant Parties, does hereby fully, unconditionally, irrevocably and absolutely release, waive and forever discharge Landlord and the Landlord Parties from any and all Claims of whatever kind or nature in law, equity or otherwise, whether now known or suspected, which have existed or may have existed, from the beginning of time, or which do exist or which hereafter can, shall or may exist, which any of the Tenant Parties had, now has, or may hereafter have against Landlord or the Landlord Parties to the extent arising from or relating to the Sports Complex Agreement.

After Tenant has been fully reimbursed out of Sublease rentals in the amount set forth in section (a) above, and in addition to any Additional Rent payable hereunder, Tenant shall pay to Landlord an amount equal to 70.9091% of all Percentage Rent (as defined in the Sublease) received by Tenant under the Sublease (“Percentage Rent”). Percentage Rent shall be computed and payable quarterly to Landlord. On or before the date that is the earlier of (i) sixty (60) days after the end of each quarter, and (ii) fifteen (15) days after the date that Tenant receives from Subtenant the items described in section (a)(i) and (ii) under the Sublease applicable to the final month of the applicable quarter, Tenant shall deliver to Landlord (i) a statement certified by Subtenant’s Chief Financial Officer, Treasurer, or other officer of Subtenant or its manager reasonably acceptable to Landlord in its sole discretion, as being true, correct and complete, setting forth its Annual Gross Room Sales for such quarter (each, a “Percentage Rent Report”), and (ii) the applicable Percentage Rent payable hereunder for such quarter. The receipt by Landlord of a Percentage Rent Report shall not constitute an admission by Landlord of its correctness. For the purpose of computing Percentage Rent, Annual Gross Room Sales for any period during which Tenant does not continuously and uninterruptedly conduct its business shall be deemed to be Annual Gross Room Sales for the corresponding period during the last calendar year in which Tenant operated continuously and uninterruptedly. Landlord’s audit rights set forth in the Lease shall include, without limitation, the right to audit all of Tenant’s books and records relating to Annual Gross Room Sales, and Tenant shall deliver to Landlord any information related to the same.

SCHEDULE 19.3
Estoppel Certificate Form
To: _________________________
_________________________
_________________________

Re: That certain Amended and Restated Sublease dated ______________, 202___ (the “Lease”), by and between that certain Amended and Restated Sublease dated _________________, 2024 (the “Lease”) by and between THE CITY OF FULLERTON, CALIFORNIA (“Landlord”), and SKY HARBOR FULLERTON, LLC, a Delaware limited liability company (“Tenant”) All capitalized terms used but not defined herein shall have the meaning ascribed to them in the Lease. [Use the following if Tenant is providing the Estoppel Certificate: Tenant is the present owner and holder of the Tenant’s Interest under the Lease.] [Use the following if Landlord is providing the Estoppel Certificate: Landlord is the present owner and holder of the lessor’s interest under the Lease and the fee interest in and to the Premises.] [Use the following if Tenant is providing the Estoppel Certificate: Tenant holds title to the Improvements currently located on the Premises. [Use the following if Landlord is providing the Estoppel Certificate: Other than reversionary and future rights expressly set forth in the Lease, the Landlord does not hold any interest in the Improvements currently located on the Premises.] The attached Exhibit B includes a true and complete copy of the Lease and all modifications, amendments, supplements, side letters, addenda, assignments, and riders of and to the Lease.

The Term of the Lease commenced on ____________, 202____ and will expire on _________________, 20__ unless sooner terminated in accordance with the provisions thereof.

The Percentage Rent currently payable under the Lease is $________, has been paid through ______________, 20___, and is subject to adjustment as set forth in the Lease, including without limitation the provisions of Article 4 and Schedule 4.

Except for the Additional Rent expressly set forth and/or described in Article 4 or Schedule 4 to the Lease, no additional rent is payable to Landlord under the Lease.

Except as set forth in the Lease, Landlord and Tenant have made no agreement concerning free Rent, partial Rent, rebate of rental payments or any other similar Rent concession.

Landlord currently holds no Security Deposit with respect to the Lease.

The Lease has not been modified, changed altered or amended, except as indicated on Exhibit B attached hereto. Except for the Lease and _____________________, there are no agreements between Landlord and Tenant, written or oral, that affect Tenant’s occupancy of the Premises.

To the actual current knowledge of the undersigned, no party is currently in default under the Lease, and no event has occurred that, with the giving of notice or passage of time, or both, would constitute a default under the Lease by either party. Any individual signing this Estoppel Certificate shall have no personal liability hereunder. [If Tenant is providing Estoppel Certificate: Tenant has accepted the Premises, subject to the terms and conditions set forth in the Lease.] The undersigned [Landlord]/[Tenant] hereby acknowledges the right of [Landlord]/[Tenant], its present and future lenders, its successor and assigns and any other parties in interest to rely upon the statements and representations contained in this Estoppel Certificate. [Landlord OR Tenant]
________________________
By: ___________________
Name: ___________________
Its: ___________________
SMRH:4879-9779-9100.9
Schedule 1.22, page 1
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Schedule 4
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Schedule 19.3
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Signature Page
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(1)
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Exhibit A
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Exhibit A
SMRH:4879-9779-9100.9
Exhibit B
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Exhibit B
Note to Draft: Amount in brackets to be confirmed at signing.

City Council - Successor Agency - Housing AuthorityJune 18, 2024

City Council - Successor Agency - Housing Authority
June 18, 2024