Agenda packet — Glendale City Council, September 1, 2026

A G E N D A

GLENDALE CITY COUNCIL

COUNCIL CHAMBERS
613 E. Broadway, 2nd Floor
Glendale, CA 91206
SEPTEMBER 1, 2026

DISCUSSION OF COUNCILMEMBER FUTURE AGENDA REQUESTS
- 4:00 PM
CLOSED SESSION - 4:00 PM
REGULAR AGENDA - 6:00 PM

PUBLIC PARTICIPATION AND ACCESSIBILITY

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PUBLIC COMMENT GUIDELINES
The City Council welcomes public input at City Council meetings. Public input at Council meetings is regulated by the City Council’s Rules of Order, Procedure and Decorum for the Conduct of City Council Meetings as set forth in Resolution No. 25-76, which will be summarized below.

Public Comment participation in Council meetings may occur as follows :
•
In-person – City Council Chambers
•
Online attendance – Connect to the meeting online using the meeting link below and use the Raise Hand feature to speak when the Mayor or City Clerk states it is time to speak on the particular public comment period or agenda item.

Meeting link:
https://glendaleca.zoomgov.com/j/1659278910
| Meeting ID: 165 927 8910
•
T elephone – Call the number listed below and dial *9 to request to speak | *6 to unmute / mute Meeting call-in telephone number: (818) 745-0355
Written Comments and Documents
:

Public comments received in writing will NOT be read aloud at the meeting but will be part of the meeting record. Written public comments can be emailed to [email protected], and will be uploaded to the City website as an attachment to the agenda item. When submitting a public comment, please make sure to include the following
:

1. Name (optional); and

2. Agenda item to which you are submitting public comment

3. Submit no later than 12:00 p.m. on the day of the City Council meeting. Correspondence received after this time may not be distributed until the following business day.

All documents related to open session items on this agenda that are received less than 72 hours prior to this meeting, and are public records, will be available for review in the Office of the City Clerk, 613 E. Broadway, Room 110, Glendale, CA 91206.

Public Comments During Council Meeting
:

Public Comments during Community Event Announcements, First and Second Periods of Oral Communications and agenda items will be governed as provided in the descriptions for those items on the agenda below. Pursuant to State law, the City Council may not discuss or take action on any item not appearing on the meeting agenda, except that members of the City Council or staff may ask a question for clarification or briefly respond to statements made or questions posed by persons exercising public testimony rights (Government Code Section 54954.2). Staff may be asked to follow up on such items.

Submitting Speaker Cards or Requesting Online or T elephonic Participation for Public Comment :

Speaker cards must be submitted, by the following deadlines:
•
Community Event Announcements or First or Second Period of Oral Communications: PRIOR TO the commencement of the specific comment period
•
Consent Calendar Items: BEFORE a motion is made on the consent calendar •
Other agenda items, including Action items: PRIOR to the completion of the verbal staff report (unless waived by the Mayor)
Online participants must raise their hands and telephone users must dial *9 after the Mayor or City Clerk state it is time to indicate their desire to speak on an item but before the deadlines stated

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above.

Any audio-visual files displayed by speakers must be emailed to the Clerk’s office by 12:00 pm on the day before a Council meeting.

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SEPTEMBER 1, 2026

DISCUSSION OF COUNCILMEMBER FUTURE AGENDA REQUESTS
- 4:00 PM
CLOSED SESSION - 4:00 PM
REGULAR BUISNESS AGENDA - 6:00 PM

ROLL CALL

1. DISCUSSION OF COUNCILMEMBER FUTURE AGENDA REQUESTS
– 1:00 PM (T o
Commence at 4:00 PM
)
a.

Councilmember Brotman’s Request for a Report on Flock Automated License Plate Readers, Including Discussion of the Data Retention Period; the Verification Process for the “Irrevocable Deletion” of Data; a Review of Jurisdictions With Which Glendale Shares Data; the Types of Investigations for Which Glendale Allows Partner Agencies to Access Data; the Number of Cameras Deployed and Who Makes That Decision; a Regular Practice of Data Audits; a Determination of Who Conducts the Audits and How the Results Are Shared With the Council and the Public; Clear Consequences for Policy Violations by City Personnel and Third Parties; and Ensuring That the City’s Contract With Flock Provides Enforcement Mechanisms Against Flock’s Unauthorized Use of Data
b.

Councilmember Brotman’s Request to Review Changes Made to the Council’s Procedures Regarding Public Comment at Council Meetings and Consider Potential Amendments to the Process
c.

Councilmember Brotman’s Request for a Report on a Potential Ban on Gas-Powered Generators in the Public Right of Way and on City Property d.

Councilmember Bartrosouf’s Request for a Report Providing an Update on the City’s Efforts to Establish a Dog Park and to Reconsider the Council’s Decision Regarding a Dog Park at City Lot 11

2. CLOSED SESSION
– 1:00 PM (T o Commence at 4:00 PM
)
a.

Conference with Real Property Negotiators: City-designated negotiators: Roubik Golanian, John Takhtalian, Michael J. Garcia, Gillian van Muyden, Domenica Megerdichian, Soua Vang and Juan Gonzalez. Property Location: 212 & 216 S.

Brand Blvd. Negotiating Parties: Museum of Neon Art. Instructions to the negotiator(s) will concern the price and terms of lease of City property b.

Public Employee Performance Evaluation – City Manager and City Attorney

3. REGULAR BUSINESS AGENDA
– 6:00 PM
Roll Call
a.

Flag Salute
b.

Invocation
c.

Report of the City Clerk, re: Posting of Agenda. The Agenda for the September 1, 2026 Regular Meeting of the Glendale City Council was Posted on August 27, 2026, on the Bulletin Board Outside City Hall.

4. PRESENTATIONS AND APPOINTMENTS
a.

Nominations for Appointment:

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•
Kevork Bartanian, Historic Preservation Commission (Seat 1 – Reappointment of Bartanian) (
Asatryan[A]
/Bartrosouf[B]) (8/25/2026)
•
Sevak Karabachian, Design Review Board (Seat 1 – Replacing Kaskanian) (
Asatryan[A]
/Gharpetian[B]) (8/25/2026)
•
Levon Mkrtychev, Audit Commission (Seat 2 – Replacing Parajon) (
Brotman[A]
/Kassakhian[B]) (8/25/2026)
•
Tony Pogosyan, Civil Service Commission (Seat 4 – Vacant) ( Gharpetian
)
(8/25/2026)
•
Zareh David Davidian, Audit Commission (Seat 5 – Reappointment of Davidian) (
Bartrosouf[A]
/Brotman[B]) (8/25/2026)
•
Armen Erik Yesayan, CDBG Advisory Committee (Seat 5 – Replacing Gharibian) (
Bartrosouf[A]
/Asatryan[B]) (8/25/2026)
•
Shana Bonstin, Transportation & Parking Commission (Seat 5 – Reappointment of Bonstin) (
Bartrosouf[A]
/Kassakhian[B]) (8/25/2026)
•
Lerna Shirinian, Commission on the Status of Women (Seat 5 – Replacing Khojayan) (
Bartrosouf[A]
/Kassakhian[B]) (8/25/2026)
•
Robert Badmagharian, Building & Fire Board of Appeals (Seat 2 – Reappointment of Badmagharian) (
Brotman[A]
/Bartrosouf[B]) (8/25/2026)

5. CONSENT ITEMS
(Including Minutes)
The following are routine and may be acted upon by one motion. Any Member of Council or the audience requesting separate consideration may do so by making such request before motion is proposed.

6. CITY COUNCIL/STAFF COMMENTS
(Including reports from conferences and regional
meetings)

7. COMMUNITY EVENT ANNOUNCEMENTS
(3-minutes per speaker)
Members of the public will be permitted to announce upcoming events taking place in the community.

8. FIRST PERIOD OF ORAL COMMUNICATIONS
(Maximum 3 minutes per speaker, 30-minute
aggregate speaking time limit)
Members of the public may address the Council on agenda items or non-agenda items within the City Council’s subject matter jurisdiction. If a speaker addresses the Council on an agenda item during the First Period of Oral Communications, they may not speak again when the agenda item is called. A speaker who addresses the Council on non-agenda items during the First Period of Oral Communications may not speak during the Second Period of Oral Communications.

9. ADOPTION OF ORDINANCES

10. ACTION ITEMS

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Management Services, re: Request for the Utilization of One City Day Sponsorship at the Alex Theatre and Approval of Refined City Days Sponsorship Program Criteria

1. City Council motion to approve the utilization of one (1) City Day Sponsorship at the Alex Theatre for a concert; Gevorg Chakmanyan – Celebrating 35 Years on Stage and the 55th Birthday

2. City Council motion to Approve Refined Alex Theatre City Days Sponsorship Program Criteria
b.

Glendale Water and Power, re:

Water Cost of Service Analysis and Authorization to
Initiate Proposition 218 Rate Notification Process

1. Motion authorizing the General Manager of Glendale Water & Power Department to commence the Proposition 218 notification process for the purpose of adopting water rate adjustments, including issuance of the required notices to affected property owners and customers
c.

Management Services, re: Appointment of Voting Delegate and Alternative Representative for the 2026 League of California Cities Conference; General Assembly Resolution

1. Motion designating a voting delegate and alternate representative(s) for the 2026 League of California Cities Conference

2. Motion providing direction to delegate on General Assembly Resolution d.

Management Services, re: Appointment of Glendale members to the Burbank- Glendale-Pasadena Regional Housing Trust (BGPRHT)

1. Motion appointing a member and an alternate to the Burbank-Glendale-Pasadena Regional Housing Trust (BGPRHT)
e.

Management Services, re: Lease Agreement for City Owned Property 250 North Orange Street

1. Introduction of an Ordinance Authorizing Lease of a City-owned commercial premises located at 250 North Orange Street to “The Center for Armenian Arts” a DBA of Knowledge Truck, Inc., a nonprofit California public benefit corporation (“T enant”), for a lease term exceeding five years Motion Authorizing City Manager to execute a lease with T enant at a base rent of $2,927 per month, following adoption of the Ordinance authorizing said lease, as subject to the review and approval as to form by the City Attorney

11. HEARINGS

12. REPORTS - INFORMATION

13. WRITTEN COMMUNICATIONS

14. SECOND PERIOD OF ORAL COMMUNICATIONS
Discussion is limited to items NOT a part of this agenda. Each speaker is allowed 5 minutes.

Council may question or respond to the speaker, but there will be no debate or decision. The City Manager may refer the matter to the appropriate department for investigation and report.

15. NEW BUSINESS

16. ADJOURNMENT

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CITY OF GLENDALE, CALIFORNIA

REPORT TO THE CITY COUNCIL

AGENDA ITEM
Report: Request for the Utilization of One City Day Sponsorship at the Alex Theatre and Approval of Refined City Days Sponsorship Program Criteria

1. City Council motion to approve the utilization of one (1) City Day Sponsorship at the Alex Theatre for a concert; Gevorg Chakmanyan – Celebrating 35 Years on Stage and the 55th Birthday

2. City Council motion to Approve Refined Alex Theatre City Days Sponsorship Program Criteria

COUNCIL ACTION

EXECUTIVE SUMMARY
The City of Glendale’s Economic Development Division is requesting Council’s approval of the utilization of one of the City’s twelve annual rent-free dates at the Alex Theatre to sponsor a concert; Gevorg Chakmanyan – Celebrating 35 Years on Stage and 55th Birthday, organized by Star Production. The mutually agreed upon date between the organizer, and Evnsong, the manager/operator of Alex Theatre is tentatively scheduled for October 1, 2026. This request, if approved, would allow for five more remaining free City Day sponsorship requests for the 2026 calendar year.

Staff also seek Approval of Refined City Days Sponsorship Program Criteria to be taken effect at the beginning of 2027.

RECOMMENDATION
That the City Council consider approval of the utilization of one rent-free date at the Alex Theatre for Star Production and provide direction or approve the revised Alex Theatre City Days Sponsorship Program criteria.

ANALYSIS
As part of the Management Agreement for the City-owned Alex Theatre, Evnsong, the Item Type: Action Calendar
Approved forSeptember 1, 2026 calendar
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manager/operator agrees to provide the City with twelve annual days of Theatre use, free of facility rental charge, to make the theatre available for community use. In addition to events hosted by the City, the City may sponsor community groups, who meet the minimum criteria and receive City Council approval, by providing them use of one of these twelve dates. The facility rental fee is waived by the Theatre for these groups, but all other costs associated with the use of the Theatre are to be paid for by the group requesting the sponsorship.

Staff and the Alex Theatre Operator anticipate the City will use the Theatre for reoccurring events and are cognizant not to bring forward community events which would surpass the number of allocated dates considering these anticipated date uses.

The City Council has already approved the following shows for 2026:

1. Hamazkayin Armenian Cultural Association Choir

2. Glendale Unified School District Armenian American Heritage Night Celebration

3. Armenian Genocide Commemoration

4. Gomidas Choir's Annual Concert: 20th Year Celebration

5. Women's Equity Day

6. Dream Planet by Armenian Fairytales Inc.

Five additional dates were previously approved for use and have either moved to other locations or been cancelled, including Glendale Tech Week opening night, LA Youth Orchestra, Hollywood Arab Film Festival, Hovhaness Badalian 100 Centennial and The End of Aging – A Healthspan Salon. If City Council approves the request tonight, five of the twelve designated dates would remain available for 2026.

Event Details and Impact:

Gevorg Chakmanyan – Celebrating 35 Years on Stage & 55th Birthday Concert A special commemorative concert organized by Star Production, a for profit organization, honoring Gevorg Chakmanyan’s distinguished career and lifelong contributions to Armenian music and culture. The event will celebrate 35 years of artistic excellence while also recognizing his 55th birthday through an evening of live performances featuring some of his most beloved songs, accompanied by accomplished musicians and special guest artists.

This milestone celebration is intended to bring together members of the Armenian community, music enthusiasts, and supporters of the performing arts for an unforgettable cultural experience.

Economic Impact:

Previous events include the 2016 celebration of Gevorg Chakmanyan’s 15 Years on Stage and a 2024 tribute concert honoring the 100th anniversary of Legendary Armenian folk singer Ofelya Hambardzumyan. Both events took place at the Alex 44 of 151

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Theatre, attracting strong community participation with fully booked venues.

Attendance is expected to reach approximately 1,000 guests from Glendale, neighboring communities, and throughout Southern California. The estimated revenue from ticket sales is expected to be approximately $60,000.

Social Impact:

The event is expected to attract families, young adults, seniors, and members of the broader community who appreciate Armenian music and cultural programming.

Beyond entertainment, the concert encourages cultural preservation, intergenerational engagement, and community pride by honoring an artist whose work has contributed to the continuation of Armenian musical traditions.

Gevorg Chakmanyan is a respected Armenian singer whose career spans more than three decades. For 35 years, he has been recognized for his dedication to Armenian music and his commitment to preserving traditional and contemporary Armenian songs through live performances both in Armenia and throughout the Armenian diaspora.

City Days Program Criteria
Currently, the criteria used by City staff to facilitate consideration for subsidized use of the Theatre are the following:
- Non-weekend dates only (no Friday, Saturday, or Sunday) - Must be received 90-days prior to event
- Cannot request after agreement is already signed with theatre - Must be a previous user of the Theatre with at least 50% capacity in previous shows – or reasonable expectation of over 700 attendees
- No more than one request per organization per year
- The producer will be independently responsible for all other costs associated with using the Theatre including labor, rentals, equipment fees, etc.

When a request is received by staff that meets the criteria, the request is presented to City Council during a public meeting for their approval. The City has a maximum of twelve days available for requests. In return for City sponsorship, the producer will provide: Mention of the City of Glendale sponsorship in all marketing material and during the show.

During discussions at the January 28, 2026 and April 28, 2026 City Council meetings regarding City Day requests, the City Council inquired about the program’s eligibility criteria and suggested revisiting the existing provisions to ensure that the requirements more effectively align with the intended purpose and objectives of the program. 45 of 151

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Main ideas and concerns addressed by City Council included giving priority to Glendale based organizations, allowing for annual recurring events while also making sure opportunities are available for other organizations, and ensuring approved events provide a public benefit to the community. If City Council’s desire is to modify the requirements, some criteria for consideration include:
- Public Benefit – Organizer must have a non-profit status or that the event is open to the public and/or provides a demonstrated benefit to a defined segment of the community, and that primarily serves an educational, cultural, civic, charitable, recreational, health, safety, or other community purpose. The event must provide a benefit beyond the private interests of the event organizer and must be consistent with the City’s goals, policies, or community priorities. - Community Access – Priority to Glendale Based Organizations - Encouraging New Applicants – Priority may be given to organizations that have not received a City Day sponsorship within the previous three years.

In addition, to provide the City Council with a comprehensive understanding of event requests and a clearer view of the available options, staff will present City Day Sponsorship requests to City Council in two to three consolidated batches per year, rather than on an individual, as-requested basis.

If the suggested considerations for the City Day Sponsorship Program requirements, or any additional requirements recommended by the City Council, are modified, staff recommend that any such changes take effect beginning January 1, 2027.

STAKEHOLDERS/OUTREACH
Marketing for the event will take place through the organization’s large base, and all regular Alex Theatre ticket marketing outlets.

Details for those interested in requesting sponsorships can be found on the Alex Theatre website at: https://www.thealex.com/sponsorship

FISCAL IMPACT
There are no costs to the City of Glendale for sponsoring the one community event and refining the City Days Sponsorship Program Requirements. If attendance reaches the anticipated goal of 1,000 attendees, the City is expected to receive approximately $4,000 in revenue from ticket fees, which will be deposited in the General Fund.

ENVIRONMENTAL REVIEW (CEQA/NEPA)
CEQA does not apply to projects where the lead agency determines "with certainty that there is no possibility that the activity in question may have a significant effect on the environment." CEQA Guidelines (14 Cal. Code Regs.) § 15061(b)(3). Here, the action involves hosting a show within a built environment. There is no possibility that the action of hosting continued shows within the Theatre may have a significant effect on the environment.
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CAMPAIGN DISCLOSURE
This item is exempt from campaign disclosure requirements.

ALTERNATIVES TO STAFF RECOMMENDATION
1: Do not approve utilization of one City Day at the Alex Theatre for the concert organized by Star Production.
2: Do not approve refined City Days Program Sponsorship Requirements. 3: The City Council may consider any other alternative not proposed by staff.

ADMINISTRATIVE ACTION
Submitted by:

Roubik R. Golanian, P.E., City Manager
Prepared by:

Sevak Dishoian, Economic Development Coordinator
Soua Vang, Deputy Director of Economic Development
Domenica Megerdichian, Assistant to the City Manager
Approved by:

Roubik R. Golanian, P.E., City Manager

EXHIBITS/ATTACHMENTS
None.
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MOTION
Moved by Council Member _____________________________, seconded by Council Member _________________________, that the City Council hereby approves use of one annual City Day at the Alex Theatre for Gevorg Chakmanyan – Celebrating 35 Years on Stage and the 55th Birthday Concert, tentatively scheduled for October 1, 2026.

Vote as follows:

Ayes:

Noes:

Absent:

Abstain:
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MOTION
Moved by Council Member _________________________________, seconded by Council Member _____________________________, that the City Council hereby approves the refined Alex Theatre City Days Sponsorship Program Criteria as set forth in the September 1, 2026, staff report from the City Manager, and as subject to City Council comments thereon.

Votes as follows:

Ayes:

Noes:

Absent:

Abstain:

City Clerk
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CITY OF GLENDALE, CALIFORNIA

REPORT TO THE CITY COUNCIL

AGENDA ITEM
Report: Water Cost of Service Analysis and Authorization to Initiate Proposition 218 Rate Notification Process

COUNCIL ACTION
Item Type: Action Item
Approved for September 1, 2026 calendar

EXECUTIVE SUMMARY
In 2025, Glendale Water & Power (GWP) engaged Raftelis Financial Consultants, Inc. (Raftelis) in 2025 to conduct a comprehensive Water Financial Plan and Cost of Service Analysis (COSA). The study evaluates the financial obligations of the Water Utility over a five-year period and develops a rate structure designed to generate sufficient revenues to fund ongoing operations, water supply costs, capital improvements, debt obligations, and reserve requirements. The study also evaluates the allocation of costs among customers, consistent with industry-standard cost-of-service principles and Proposition 218 requirements.

Raftelis evaluated multiple financial alternatives with varying levels of capital investment and debt financing. The proposed financial and rate plan is intended to provide sufficient revenues to operate and maintain the water system, address priority infrastructure needs, maintain appropriate reserves and debt coverage, and establish rates that proportionately recover the cost of providing water service. The proposed rates would become effective beginning January 1, 2027, subject to completion of Proposition 218 process and subsequent City Council approval (see Exhibit 1).

RECOMMENDATION
Authorize the General Manager of GWP to commence the Proposition 218 notification process for the proposed water rate adjustments, including issuance of the required notices to affected property owners and customers.
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ANALYSIS
GWP operates an extensive and complex water system that requires continued investment to provide reliable water service. In addition to approximately 400 miles of transmission and distribution pipelines, the system includes numerous reservoirs, pump stations, wells, and treatment facilities that must be maintained, rehabilitated, and ultimately replaced as they age.

The recently completed Water Master Plan (WMP) provides the long-term planning framework for these investments (see Exhibit 2). While the WMP identifies infrastructure needs extending beyond the five-year rate-setting period, the proposed financial plan focuses on a phased program of priority improvements that can reasonably be implemented and funded during the next five years.

The proposed five-year Capital Improvement Program includes investments in pipeline replacement, fire-flow improvements, pump and reservoir rehabilitation, electrical and facility upgrades, permanent generators, water system SCADA improvements, Advanced Metering Infrastructure (AMI), and other improvements necessary to maintain and improve system reliability.

In addition to infrastructure investment, GWP continues to experience increasing costs associated with providing water service. Purchased water represents a significant component of the Water Utility's operating expenses. The Metropolitan Water District of Southern California (MWD) increased its volumetric rates by approximately 11 percent and 9.5 percent in FY 2025 and FY 2026, respectively, and has also introduced additional fixed charges.

Conversely, GWP's internal operating expenses are not identified as the principal driver of the proposed revenue adjustments. The Water Utility's Operations and Maintenance budget increased by just under five percent between FY 2025 and FY 2026 and is projected to decrease by approximately 0.7 percent from FY 2026 to FY 2027. The study therefore identifies purchased water costs and capital investment as the dominant financial pressures facing the Water Utility.

Rather than attempting to immediately fund all identified infrastructure needs, staff worked with Raftelis to evaluate several levels of investment options. These alternatives considered average annual capital expenditures of approximately $40 million, $25 million, $20 million, and $11 million, with additional alternatives evaluating the use of debt financing.

In seeking a balance between unavoidable capital costs while mitigating the financial impacts on the utility’s customer base, staff recommend a phased approach of approximately $20 million in average annual capital investment, coupled with approximately $40 million in bond financing. This approach advances priority infrastructure improvements, while distributing a portion of the cost of long-lived assets over their useful lives and reducing the immediate impact on existing customers. 51 of 151

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The proposed financial plan represents the first five years of a longer-term effort to address GWP's infrastructure needs. The WMP identifies needs extending beyond the period covered by the current COSA; therefore, the approximately $20 million annual capital program should not be interpreted as addressing all of GWP's long-term infrastructure requirements. Rather, it represents a phased investment strategy focused on advancing priority projects while considering affordability and GWP's ability to execute the proposed capital program.

The financial plan assumes approximately $100.3 million in repair and replacement projects during the five-year study period as outlined below:

Capital Improvement Category Five-Year Investment
Facility Upgrades (Pumps, Tanks, Reservoirs) $ 42.3M
Pipeline Replacement Program $ 30.4M
Meter Replacement (On-going) $ 15.3M
Fire Flow Improvement Program $ 10.6M
Additional Studies $ 1.15M
FY 26 CIP Carryover $ 0.5M
Total $ 100.3M
The below referenced table summarizes the proposed revenue adjustments over the five-year study period under the proposed alternative. The proposed financial plan assumes that adjustments would take effect on January 1st of each year, beginning January 1, 2027.

FY 2027 FY 2028 FY 2029 FY 2030 FY 2031
Effective
Date
Jan 1, 2027 Jan 1, 2028 Jan 1, 2029 Jan 1, 2030 Jan 1, 2031 Revenue
Adjustment
53% 11% 10% 10% 7%
In addition to determining the overall amount of revenue required, the COSA also determined how the costs of providing water service should be allocated to customers.

The COSA was developed using principles established by the American Water Works Association's Principles of Water Rates, Fees and Charges (M1 Manual). The methodology evaluates costs associated with base water demand, system capacity, customer service, meter maintenance, fire protection, water supply, and other components of providing service. The purpose of the analysis is to proportionately allocate costs based upon the cost of serving customers and customer classes.

Based upon these principles, the proposed rate structure includes revisions to fixed customer charges and volumetric water rates, and establishes separate charges associated with pumping water to customers located at different elevations. The proposed structure is intended to closely align the revenues collected from customers with the underlying costs incurred by GWP to provide service. 52 of 151

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The COSA can be accessed by visiting GlendaleCA.gov/ProposedWaterRates. Hard copies will be available for review during normal business hours at the GWP Customer Service Counter located at 141 N. Glendale Avenue, 2nd Level, Glendale, CA 91206.

STAKEHOLDERS/OUTREACH
The proposed water rate adjustments are subject to the procedural requirements of Article XIII D of the California Constitution, commonly referred to as Proposition 218.

Prior to adoption of the proposed rates, GWP will conduct the required public notification and hearing process, providing affected property owners and customers with information regarding the proposed rate adjustments and an opportunity to submit written protests.

GWP will also provide information regarding the proposed financial plan, infrastructure needs, rate structure, and anticipated customer bill impacts through its public outreach efforts leading up to the Proposition 218 public hearing. Following completion of the required notice period, the proposed rates will be presented to the City Council for consideration at a public hearing.

GWP will hold four community meetings to discuss the proposed water rate changes with customers as follows:
October 7, 2026, 6:00 – 7:30 p.m. at the Adult Recreation Center October 15, 2026, 6:00 – 7:30 p.m. at Sparr Heights Community Center October 17 , 2026, 9:00 – 10:30 a.m. at Brand Park Library and Art Center October 24, 2026, 10:00 – 11:30 a.m. Virtual (Zoom)
The above dates and times will be included in the Proposition 218 Notice.

FISCAL IMPACT
The proposed Water COSA rate adjustments will generate the revenues needed to meet the Water Utility’s operating and Capital Improvement Program (CIP) needs over the next five years. The proposed rates are designed to comply with Proposition 218 requirements by allocating costs based on the actual cost of providing water service to each customer category.

ENVIRONMENTAL REVIEW (CEQA/NEPA)
This item is not a project for the purposes of the California Environmental Quality Act (CEQA) and thus is not subject to CEQA review.

CAMPAIGN DISCLOSURE
Not applicable.
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ALTERNATIVE TO STAFF RECOMMENDATION
The City Council may choose not to authorize, or may choose to delay, issuing Proposition 218 notifications. This would delay the public hearing and planned bond issuance, resulting in a negative Water Fund balance this fiscal year, which would impact future debt service rates, impact the completion of the recently authorized AMI replacement project and result in the need for an even larger increase in subsequent years to offset the negative fund balance and mounting capital improvement needs.

Doing so, not only will reduce system reliability, but also impact public health and safety.

ADMINISTRATIVE ACTION
Submitted by:

Scott K. Mellon, P.E., General Manager - Glendale Water and Power Prepared by:

Chisom Obegolu, P.E., Assistant General Manager - Water Approved by:

Roubik R. Golanian, P.E., City Manager

EXHIBITS/ATTACHMENTS
Exhibit 1: Draft Proposition 218 Notice
Exhibit 2: Water Master Plan Fact Sheet
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1 7
9 0
1 M O T I O N
Moved by Council Member ________________________________, seconded by Council Member __________________________________, that the City Council hereby authorizes the General Manager of Glendale Water & Power Department (GWP) to commence the Proposition 218 notice and hearing process for the purposes of adopting water rate adjustments as explained in the report dated September 1, 2026 by the General Manager of GWP.

Vote as follows:

Ayes:

Noes:

Absent:

Abstain:
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The City of Glendale (City) is proposing updates to water rates to keep pace with rising costs and infrastructure needs. The Glendale City Council will hold a public hearing at the City of Glendale Council Chambers, 613 E. Broadway, 2nd Floor, on November 3, 2026, at 6:00 p.m., to consider the proposed water rate changes.

The hearing will be held in accordance with Proposition 218 (California Constitution Article XIII D, Section 6), and the public is invited to provide spoken or written comments. Customers who are property owners or tenants also have an opportunity to submit a written protest as described in this Notice. This Notice summarizes the reasons for, and amounts of, the proposed updates and the calculations used to determine the updated rates. Scan the QR code or visit GlendaleCA.gov/ProposedWaterRates for additional information about the proposed rate adjustments.

NOTICE OF PUBLIC HEARING AND

PROPOSED WATER RATE CHANGES
If adopted, the proposed rates will take effect
on January 1, 2027, with annual adjustments
each January 1st through 2031.

Why Rate Updates Are Needed
Glendale Water & Power (GWP) has provided
essential water service for over a century. In
recent years, the costs to operate, maintain,
and improve the water system have increased
significantly.

Where Your Water Comes From
GWP has limited control over the cost
of imported water, which makes up the
majority of supply.

GWP recently completed a long-term Water
Master Plan to guide strategic upgrades
that will support a reliable, adaptable water
system. That planning process uncovered
several critical infrastructure needs across
the system. Despite regular maintenance,
much of Glendale’s water system has aged
beyond its useful life, increasing the risk of
emergency breaks. GWP must invest now so
you can continue to rely on your water service.

Construction costs rise every year, making
these repairs more expensive the longer we
wait. Additionally, emergency repairs are much
more expensive than planned maintenance. If
GWP delays, it risks pipe breaks and system
failures that put public health, safety, and your
everyday routine in jeopardy.

Groundwater
30%
Recycled Water
5%
MWD Imported
65%

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A major driver of rising costs is the price GWP pays to import water from the Metropolitan Water District of Southern California (MWD).

Because Glendale relies on MWD for 60 to 70 percent of its water supply, GWP has limited ability to control these costs. Since July 2022, MWD’s rates have increased by approximately 34 percent — increases that GWP can no longer absorb on behalf of its customers. +34%
MWD rate increase
since July 2022
How GWP Ensures Fair Water Rates
By law, water rates only cover the true cost of providing service, meaning the money you pay goes directly back into operating and maintaining the water system. GWP does not use tax dollars to provide water service.

GWP uses water rates to calculate the amount you see on your bill. The City hired Raftelis, an independent consulting firm with more than 30 years of experience in utility rate studies, to perform a cost-of-service analysis to calculate rates that are fair and comply with state law. This means each customer pays their share based on the demands they place on the water system.

How Your Bill Is Calculated and What Is Changing
GWP calculates water rates to cover the actual costs of providing water service. Consider water rates as the math equation that leads to the final answer, or the number you see on your water bill. Here’s how it works:

Your water bill is made up of a few different parts. The first is a fixed monthly meter charge based on the size of your water meter. The second is based on how much water you actually use, measured in units called hundred cubic feet (HCF). The more you use, the higher the bill.

GWP currently uses a three-tier rate structure for some customer classes. The proposed rates would move to two tiers for all customer classes. The two-tier structure reflects GWP’s two water sources, accounting for the difference between locally produced groundwater and more expensive imported water from MWD.

In addition, GWP’s new rate structure will account for costs associated with pumping to dif - ferent elevations in our service area. GWP delivers water to customers across seven elevation zones, called pump zones. Higher elevation zones require more energy to move water uphill, which is reflected in an additional charge. Customers in higher pump zones will see a slightly different impact based on their elevation, reflecting the additional pumping costs. 1 HCF =
about 748
gallons
HCF stands for
Hundred Cubic Feet,
the standard unit
on your water bill
If you are interested in how the proposed rate changes will impact your bill, you can visit GlendaleCA.gov/ProposedWaterRates for the water rate calculator or call GWP’s Customer Service Department at (855) 550-4497 or email them at [email protected] .

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Water Rate Tables
Proposed Monthly Potable Fixed Customer Charge
Meter Size Current Charge Jan 1, 2027 Jan 1, 2028 Jan 1, 2029 Jan 1, 2030 Jan 1, 2031 All Customers
5/8-inch $19.37 $42.00 $46.62 $51.28 $56.41 $60.36
3/4-inch $27.02 $42.00 $46.62 $51.28 $56.41 $60.36
1-inch $42.37 $42.00 $46.62 $51.28 $56.41 $60.36
1 1/2-inch $80.67 $113.37 $125.84 $138.42 $152.26 $162.92 2-inch $126.64 $174.54 $193.74 $213.11 $234.42 $250.83
3-inch $272.22 $368.24 $408.75 $449.63 $494.59 $529.21
4-inch $486.76 $653.70 $725.61 $798.17 $877.99 $939.45
6-inch $1,000.11 $1,336.77 $1,483.81 $1,632.19 $1,795.41 $1,921.09 8-inch $1,842.94 $2,458.21 $2,728.61 $3,001.47 $3,301.62 $3,532.73 10-inch $2,915.64 $3,885.51 $4,312.92 $4,744.21 $5,218.63 $5,583.93 12-inch $3,835.10 $5,108.91 $5,670.89 $6,237.98 $6,861.78 $7,342.10 Current and Proposed Tier Allotment and Potable Water Variable Rates Current Potable Water Variable Rates
Customer Class Tier Breakpoints Existing Charge ($ / HCF) Single-Family
Tier 1 0-8 HCF $2.80
Tier 2 9-15 HCF $4.11
Tier 3 >15 HCF $4.28
Multi-Family
Tier 1 # Of Dwelling Units * 6 HCF $2.80
Tier 2 All Additional HCF $4.11
Commercial
Tier 1 All Units $4.04
Irrigation
Tier 1 All Units $4.19

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Proposed Tier Allotment
Meter Size Gallons per Minute Capacity Factor Tier 1 Tier 2 All Customers
5/8-inch 20 1.00 0-10 >10
3/4-inch 30 1.00 0-10 >10
1-inch 50 1.00 0-10 >10
1 1/2-inch 100 3.33 0-33 >33
2-inch 160 5.33 0-53 >53
3-inch 350 11.67 0-117 >117
4-inch 630 21.00 0-210 >210
6-inch 1,300 43.33 0-433 >433
8-inch 2,400 80.00 0-800 >800
10-inch 3,800 126.67 0-1,267 >1,267
12-inch 5,000 166.67 0-1,667 >1,667
Proposed Potable Water Variable Rates
Meter Size Jan 1, 2027 Jan 1, 2028 Jan 1, 2029 Jan 1, 2030 Jan 1, 2031 Single Family
Tier 1 $4.09 $4.54 $4.99 $5.49 $5.87
Tier 2 $6.92 $7.68 $8.45 $9.30 $9.95
Multi-Family
Tier 1 $4.09 $4.54 $4.99 $5.49 $5.87
Tier 2 $6.92 $7.68 $8.45 $9.30 $9.95
Commercial
Tier 1 $4.17 $4.63 $5.09 $5.60 $5.99
Tier 2 $6.92 $7.68 $8.45 $9.30 $9.95
Irrigation
Tier 1 $4.17 $4.63 $5.09 $5.60 $5.99
Tier 2 $6.92 $7.68 $8.45 $9.30 $9.95
Water rates are subject to a Water Adjustment Charge (WAC), Glendale Municipal Code (GMC) Section 13.08.150, to reflect increases or changes in the cost of purchased water and the electricity required to pump and deliver water compared to amounts budgeted by GWP for these expenses. The WAC allows these changes in water supply and pumping costs to be reflected in customer rates.

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Proposed Monthly Private Fire Line Fixed Customer Charge Meter Size Current
Charge Jan 1, 2027 Jan 1, 2028 Jan 1, 2029 Jan 1, 2030 Jan 1, 2031 5/8-inch $4.47 $11.61 $12.89 $14.18 $15.60 $16.69
3/4-inch $4.47 $11.73 $13.02 $14.32 $15.75 $16.85
1-inch $4.47 $12.08 $13.41 $14.75 $16.23 $17.37
1 1/2-inch $5.25 $13.35 $14.82 $16.30 $17.93 $19.19
2-inch $6.63 $15.54 $17.25 $18.98 $20.88 $22.34
3-inch $11.55 $23.38 $25.95 $28.55 $31.41 $33.61
4-inch $20.04 $36.91 $40.97 $45.07 $49.58 $53.05
6-inch $50.52 $85.48 $94.88 $104.37 $114.81 $122.85
8-inch $103.07 $169.25 $187.87 $206.66 $227.33 $243.24
10-inch $182.11 $295.25 $327.73 $360.50 $396.55 $424.31 12-inch $291.65 $469.88 $521.57 $573.73 $631.10 $675.28 Proposed Monthly Recycled Water Fixed Customer Charge
Meter Size Current
Charge Jan 1, 2027 Jan 1, 2028 Jan 1, 2029 Jan 1, 2030 Jan 1, 2031 5/8-inch $13.00 $26.18 $29.06 $31.97 $35.17 $37.63
3/4-inch $17.48 $26.18 $29.06 $31.97 $35.17 $37.63
1-inch $26.43 $26.18 $29.06 $31.97 $35.17 $37.63
1 1/2-inch $48.82 $60.62 $67.29 $74.02 $81.42 $87.12
2-inch $75.70 $90.14 $100.06 $110.07 $121.08 $129.56
3-inch $160.80 $183.63 $203.83 $224.21 $246.63 $263.89
4-inch $286.20 $321.40 $356.75 $392.43 $431.67 $461.89
6-inch $586.23 $651.06 $722.68 $794.95 $874.45 $935.66
8-inch $1,078.86 $1,192.30 $1,323.45 $1,455.80 $1,601.38 $1,713.48 10-inch $1,705.85 $1,881.14 $2,088.07 $2,296.88 $2,526.57 $2,703.43 12-inch $2,243.26 $2,471.58 $2,743.45 $3,017.80 $3,319.58 $3,551.95 14-inch $2,243.26 $3,701.66 $4,108.84 $4,519.72 $4,971.69 $5,319.71 16-inch $2,243.26 $4,931.74 $5,474.23 $6,021.65 $6,623.82 $7,087.49

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Variable Recycled Water Rates
Current Recycled Water Variable Rates
Customer Class Existing Charge
Commercial $2.84
Irrigation $2.84
Proposed Variable Recycled Water Rates
Tier Allotment Jan 1, 2027 Jan 1, 2028 Jan 1, 2029 Jan 1, 2030 Jan 1, 2031 All Use $3.91 $4.34 $4.77 $5.25 $5.62
Proposed Pump Zone Rates
Pump Zone Current
Charge Jan 1, 2027 Jan 1, 2028 Jan 1, 2029 Jan 1, 2030 Jan 1, 2031 1 (724') N/A $0.05 $0.06 $0.06 $0.07 $0.07
2 (968') N/A $0.25 $0.28 $0.31 $0.34 $0.36
3 (1,290') N/A $0.84 $0.93 $1.03 $1.13 $1.21
4 (1,666') N/A $1.83 $2.03 $2.23 $2.46 $2.63
5 (2,000') N/A $2.31 $2.56 $2.82 $3.10 $3.32
6 (2,400') N/A $3.42 $3.80 $4.18 $4.59 $4.91
7 (2,483') N/A $5.08 $5.64 $6.20 $6.82 $7.30
Questions & Comments
If you have any questions regarding this Notice, please call (855) 550-4497 between 8:30 a.m. and 5 p.m., Monday through Thursday, Fridays 8:30 a.m. – 4:30 p.m., or visit the water rates website at GlendaleCA.gov/ProposedWaterRates . General comments and emails are not counted as formal legal protests. See the legal notice below for formal Proposition 218 protest instructions.

Community Meetings
Four community meetings have been scheduled to discuss the proposed water rate changes with customers. For more information about these community meetings, please visit our website at GlendaleCA.gov/ProposedWaterRates. Meeting dates and times are subject to change, so please check the website for the most up-to-date information.
6:00 p.m. – 7:30 p.m.: Adult Recreation Center., 201 E Colorado St, Glendale, CA 91205 (Parking available at the Marketplace Parking Structure at 120 S. Artsakh Ave).

6:00 p.m. – 7:30 p.m.: Sparr Heights Community Center, 1613 Glencoe Way, Glendale, CA 91208
9:00 a.m. – 10:30 a.m.: Brand Park Library & Arts Center, 1601 W Mountain St, Glendale, CA 91201
10:00 a.m. – 11:30 a.m.: Zoom meeting (Registration required. Link will be provided on GlendaleCA.gov/ProposedWaterRates).

Oct. 7
Oct. 15
Oct. 17
Oct. 24

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NOTICE TO PROPERTY OWNERS AND CUSTOMERS
This Notice is being furnished to you by the City in accordance with Article XIII-D, Section 6 of the California Constitution (Proposition 218), which requires the City to notify customers and property owners of record of proposed water rate adjustments. The City Council will conduct a Public Hearing at 6:00 p.m. on November 3, 2026, at the City Council Chambers located on the 2nd floor in the City Hall at 613 E. Broadway, Glendale, CA 91206.

All those interested are invited to appear at the time and place of the Public Hearing on November 3, 2026, to give oral or written testimony or to submit written protests regarding the proposed rate adjustments. The City Council will hear and consider oral testimony and written materials submitted regarding proposed rate adjustments at the public hearing. Upon conclusion of the public hearing, the Council will vote on rate recommendations. The City Council has the authority to adjust the proposed rate updates in response to oral testimony and written materials submitted for consideration, provided that any adjustments do not increase rates beyond those proposed in this Notice.

How to Protest Proposed Rate Adjustments
The proposed water rate adjustments are subject to a majority protest process under Proposition 218. Any record owner of a property, or a tenant, of a parcel(s) subject to the proposed rates, may submit a written protest against the proposed rate adjustments. Owners of multiple parcels may file one protest for each parcel owned within the City’s service area. Only one written protest against the proposed rate adjustments per parcel will be counted in determining whether a majority protest exists.

Written Protest Procedures
A written protest must be submitted to the City in paper form and include all of the following to be counted in determining whether there is a majority protest (50% + 1):
• Clearly stated opposition to the proposed rate adjustments for water service charges; • Name of the record property owner or customer of record who is submitting the protest; • Identification by street address or assessor’s parcel number of the property for which the protest is made or identification of the account number for the customer of record; and • Original signature and legibly printed name of the record property owner or customer of record who is submitting the protest.

An electronic (emailed or faxed) or spoken protest CANNOT be counted.

Written protests may be delivered to the City at the City Council Chambers during the public hearing (prior to the close of the hearing). In advance of the public hearing, written protests may be mailed or personally delivered to the City Clerk (City of Glendale, 613 E. Broadway, Glendale, CA 91206), provided they must be received by City staff before the conclusion of the public hearing on November 3, 2026. No late protests will be accepted after the public hearing closes.

At the public hearing, the City Council will accept and consider all written protests and hear all oral comments on the proposed rate adjustments. However, oral or emailed comments will not be counted in determining the existence of a majority protest.

What is a Majority Protest?
A majority protest against the proposed rate adjustment will exist if, at the end of the Public Hearing, written protests submitted and not withdrawn represent a majority of the parcels (50% + 1) that receive the applicable services (water). The City cannot adopt a proposed rate adjust - ment if a majority protest exists for that service (water).

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Notice of Public Hearing and Proposed Water Rate Changes City of Glendale
ATTN: City Clerk
613 E. Broadway
Glendale, CA 91206
This document contains important information about a Notice of Public Hearing on Proposed Water Rate Changes. Please visit GlendaleCA.gov/ProposedWaterRates for translated copies of this notice or call Glendale Water & Power Customer Services (855) 550-4497 for more information or scan this QR Code.
이 문서는 제안된 수도 요금 변경에 대한 공청회 통지서에 관한 중요한 정보를 포함하고 있습니다. 이 통지서의 번역본을 보시려면 GlendaleCA.gov/ProposedWaterRates를 방문하시고, 더 자세한 정보는 Glendale Water & Power 고객 서비스 센터 (855) 550-4497로 전화하시거나 이 QR 코드를 스캔하십시오.

Este documento contiene información importante sobre un Aviso de Audiencia Pública sobre los Cambios Propuestos en las Tarifas de Agua. Visite GlendaleCA.gov/ProposedWaterRates para obtener copias traducidas de este aviso, llame al Servicio al Cliente de Glendale Water & Power al (855) 550- 4497 para obtener más información o escanee este código QR.

Այս փաստաթուղթը պարունակում է կարևոր տեղեկություններ ջրի սակագների առաջարկվող փոփոխությունների վերաբերյալ հանրային լսումների ծանուցման մասին: Այս ծանուցման թարգմանված օրինակների համար խնդրում ենք այցելել GlendaleCA.gov/ProposedWaterRates կամ զանգահարել Glendale Water & Power-ի հաճախորդների սպասարկման բաժին (855) 550-4497 հեռախոսահամարով լրացուցիչ տեղեկությունների համար, կամ սկանավորել այս QR կոդը:

Ang dokumentong ito ay naglalaman ng mahalagang impormasyon tungkol sa isang Abiso ng Pampublikong Pagdinig sa mga Iminungkahing Pagbabago sa Singil sa Tubig. Mangyaring bisitahin ang GlendaleCA.gov/ProposedWaterRates para sa mga isinaling kopya ng abisong ito, tumawag sa Glendale Water & Power Customer Services sa (855) 550-4497 para sa karagdagang impormasyon, o i-scan ang QR Code na ito.

GlendaleCA.gov/ProposedWaterRates | (855) 550-4497 | 141 N. Glendale Ave. Glendale, CA 91206 Notice of Public Hearing
and Proposed Water
Rate Changes
Этот документ содержит важную информацию об Уведомлении о проведении открытых слушаний по предлагаемым изменениям тарифов на воду. Пожалуйста, посетите сайт GlendaleCA.gov/ProposedWaterRates для получения переведенных копий данного уведомления, позвоните в службу поддержки клиентов Glendale Water & Power по телефону (855) 550-4497 для получения дополнительной информации или отсканируйте этот QR-код.

This notice is being sent to property
owners in the City of Glendale listed
in the Los Angeles County Assessor’s
database as well as to all individuals who
are electric and water customer account
holders. As a result, you may receive this
notice in duplicate. We apologize for any
inconvenience this may cause.
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What is a Water Master Plan?
A Water Master Plan is GWP’s long-term roadmap for delivering safe, reliable water to our community. It evaluates our existing system, projects future needs, and prioritizes the investments needed to keep water flowing reliably through the Capital Improvement Program (CIP). The Water Master Plan and companion Recycled Water Master Plan evaluate GWP’s potable and recycled water systems and identify investments needed to maintain reliable service over the next 20 years.

Where Glendale’s Water Comes From
Glendale imports much of its water. As the community grows and climate conditions change, water demand is projected to shift over the coming decades — and our reliance on imported supplies presents a long-term reliability challenge.

To improve local reliability and reduce dependence on imported water, the Water Master Plan evaluated a range of new local and regional supply options.

WATER FUTURE
PLANNING FOR GLENDALE’S
CITY OF GLENDALE WATER & POWER A UGUST 2026
Plan Goals
The Water Master Plan is built around a set of shared goals that guide every recommendation:

Build A Reliable
Water Future
Listen to
Community Needs
Upgrade Aging
Infrastructure
Adapt to A
Changing Climate
Expand Local
Water Supplies
System Overview
GWP delivers safe, reliable water to 191,000 customers through a network of reservoirs, pump stations, wells, and pipelines.

Key Findings from Glendale Water & Power’s Water Master Plan 407
Miles of Pipe
31 Pump Stations
30 Tanks and Reservoirs
2 Treatment Plants
15 Wells
New Supplies Identified
Alternatives evaluated include desalination,
stormwater capture, groundwater,
advanced/potable reuse, and expanding
recycled water (“purple pipe”).

Recycled water opportunities are being
evaluated in greater depth through GWP’s
companion Recycled Water Master Plan.

Potential Supply Projects Eliminated Projects
Groundwater Non-Potable Reuse Stormwater Capture Desalination Indirect Potable
Reuse
Decentralized TreatmentDirect Potable
Reuse
Groundwater
Recycled Water
Imported Water
EXHIBIT 2
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Fire Flow & Water Quality First
Fire flow and water quality are top
communities priorities – and they are
the first projects in the CIP .

Critical Facilities Prioritized
Several critical facilities are prioritized
in the 5-year CIP to ensure
system-wide reliability.

Rates Support Your Water Infrastructure
The investments in this plan are funded through water rates. As a community- owned utility, GWP does not earn a profit — every dollar goes back into delivering safe, reliable water.

Accelerating Pipeline Replacement
GWP is aggressively expanding its pipeline replacement program - increasing the miles replaced each year to stay ahead of failures.

Approaching the end of useful life
Legacy Materials
Installed before 1960
Transition & Modern Materials
Installed after 1960
1920s 1960s Today
Aging Infrastructure
Much of GWP’s system was built generations ago. Proactively replacing aging pipes and facilities prevents costly emergency failures and protects water quality and fire protection.

From Full Needs to the Recommended 5-Year CIP
Rather than fund every need at once, GWP prioritized the most critical projects into a phased 5-Year CIP — balancing system reliability with affordability for the community.

Shaped by Our Community
The Water Master Plan effort was informed by
robust public engagement, including:
• A Stakeholder Water Advisory Group (SWAG)
that met five times to review findings and
priorities
• 10 key opinion leader interviews with
community and regional stakeholders
• A community survey — offered in three
languages — that gathered over 60 responses
• Formal opinion research to identify broader
community perspectives
• A dedicated Water Master Plan community
open house, plus outreach at local events

IDENTIFIED SYSTEM NEEDS
Technical analyses and GWP staff expertise
RECOMMENDED 20-YEAR CIP
$800m

PRIORITY PROJECTS

IDENTIFIED AND
PHASED
ADOPTED 5-YEAR CIP
$100m
Stay Connected
For more information about GWP’s Water Master Plan
and Recycled Water Master Plan, scan the QR code,
visit www.glendaleca.gov/watermasterplan,
or email [email protected]

THE JEWEL C TYI

I NCORPORA TED
1906
48%
≈195 miles
52%
≈212 miles
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7 0
5 7

AGENDA ITEM

CITY OF GLENDALE, CALIFORNIA

REPORT TO THE CITY COUNCIL
Report: Appointment of Voting Delegate and Alternative Representative for the 2026 League of California Cities Conference; General Assembly Resolution

1. Motion designating a voting delegate and alternate representative(s) for the 2026 League of California Cities Conference

2. Motion providing direction to delegate on General Assembly Resolution

COUNCIL ACTION

EXECUTIVE SUMMARY
The City of Glendale is actively engaged with various public agencies, joint power authorities, and committees, with City Council members representing the City on many of these entities. Annually in September, the League of California Cities (Cal Cities) hosts an annual conference, and the City Council must designate a voting delegate and alternate representative(s) for the General Assembly.

Item Type: Action Item
Approved forSeptember 1, 2026 calendar
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2 RECOMMENDATION
That the Council appoint a voting delegate and alternate representative(s) for the 2026 League of California Cities (Cal Cities) Annual Conference – General Assembly.

ANALYSIS
The League of California Cities is an association that advocates for the interests of California's cities, promoting local control and providing a unified voice for municipalities on issues affecting governance, legislation, and public policy. The City Council must designate a voting delegate by council action for the Annual Conference General Assembly, where the delegate will represent Glendale in shaping Cal Cities policies.

Each city has one voting delegate who at the General Assembly, will play a direct role in advocating for local decision-making and influencing statewide policy.

One resolution has been submitted by the July 25, 2026 submission deadline, and the proposed resolution, background information, and analysis of the resolution by Cal Cities is attached for your review and consideration, should the Council want to determine how the voting delegate should cast a vote on behalf of the City of Glendale:
Resolution by City of Murrieta: Calling for a Working Group to Consider a State Constitutional Amendment or Other Form of Initiative to Ensure Final Local Authority Over Housing and Land Use Decisions
This year’s event will take place on September 23 – 25, 2026 in Anaheim, CA. Upon the appointment of the City’s delegates for 2026, staff will complete the necessary documents timely and before the September 1, 2026 deadline to officially register the City’s voting delegates for the 2026 Annual Conference and General Assembly.

FISCAL IMPACT
There is no fiscal impact associated with this report.

ENVIRONMENTAL REVIEW (CEQA/NEPA)
Not applicable.

CAMPAIGN DISCLOSURE
This item is exempt from campaign disclosure requirements.

ALTERNATIVES TO STAFF RECOMMENDATION
None.

ADMINISTRATIVE ACTION
Submitted by:

Roubik R. Golanian, City Manager
Prepared by:

Domenica K. Megerdichian, Assistant to the City Manager Approved by:
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3 Roubik R. Golanian, P.E., City Manager

EXHIBITS/ATTACHMENTS
League of California Cities – 2026 Resolution Packet
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MOTION
Moved by Council Member ____________________________, seconded by Council Member ___________________________, that the Council of the City of Glendale, California hereby designates the following individuals as the voting delegate and alternate voting delegate for the League of California Cities Annual Conference General Assembly to be held at the Annual Conference from September 23-25, 2026:

VOTING DELEGATE: ___________________
ALTERNATE VOTING DELEGATE: __________________

Vote as follows:

Ayes:

Noes:

Absent:

Abstain:
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MOTION
Moved by Council Member ____________________________, seconded by Council Member ___________________________, that the Council hereby directs its delegate regarding the proposed Resolution before the General Assembly of the League of California Cities on September 25, 2026 as follows:

Vote as follows:

Ayes:

Noes:

Absent:

Abstain:
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2025-2026

CAL CITIES OFFICERS
President
Gabe Quinto
Mayor
El Cerrito

First Vice President
Teresa Acosta
Council Member
Carlsbad

Second Vice President
David Cohen
Council Member
San Jose

Immediate Past President
Lynne B. Kennedy
Mayor Pro Tem,
Rancho Cucamonga

Executive Director
and CEO
Carolyn M. Coleman

1400 K Street, Suite 400, Sacramento, CA 95814 • 916.658.8200 • calcities.org

August 10, 2026

TO: Cal Cities Members

RE: Cal Cities 2026 Resolution Packet

Sixty days before the Cal Cities Annual Conference and Expo, Cal Cities members may submit resolutions on issues of importance to cities. This year, Cal Cities received one resolution by the July 25 deadline.

The attached packet contains the proposed resolution, background information, supporting letters from cities and city officials, and an analysis of the resolution by Cal Cities. The packet includes detailed information on the resolution process and the next steps for the resolution.

We encourage each city council to consider the resolution and determine a position so your voting delegate can represent your city’s position on the resolution.

Voting Delegates: City councils must appoint a voting delegate to vote during the General Assembly. Each city may also appoint up to two alternate delegates. If your city has not already done so, please appoint your voting delegate by Tuesday, Sept. 1, 2026. The voting delegate packet contains more information.

The 2026 General Assembly will be held Friday, Sept. 25, at 8:30 a.m. in the Anaheim Convention Center during the Annual Conference and Expo.

For questions about resolutions, voting delegates, or the General Assembly, please contact Zach Seals.

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2026
Resolution
Packet
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2026 Resolution Packet
Information on 2026 Resolutions Process
Consideration by Policy Committee (pre-conference)
Per the Cal Cities bylaws, Cal Cities President Gabe Quinto has referred the submitted resolution to the Housing, Community, and Economic Development Committee. The committee will meet on Thursday, Sept. 17, at 10 a.m. via Zoom to review the resolution and make a recommendation that will be sent to the Resolutions Committee. A public comment period will be held during the meeting. Register for the meeting here.

A list of recommendations the policy committee may make during its meeting is on page two of this packet.

Consideration by Resolutions Committee (during conference) On Thursday, Sept. 24, at 1:00 p.m. the Resolutions Committee will meet to review the resolution and the recommendation of the policy committee.

The Resolutions Committee consist of one representative from each of Cal Cities caucuses, departments, divisions, and policy committees, as well as up to ten additional appointments made by the Cal Cities President. A public comment period will be held during the meeting. Refer to the onsite conference program for the location.

A list of recommendations the Resolutions Committee may make during its meeting is on page two of this packet.

Consideration by the General Assembly (during conference) The General Assembly will convene on Friday, Sept. 25, at 8:30 a.m. to consider any resolutions the Resolutions Committee has forwarded. To vote during the General Assembly, voting delegates must have checked in at the voting delegate booth.

Conference attendees will receive materials for the General Assembly on the evening of Thursday, Sept. 24. For more information on voting and discussion procedures during the General Assembly, see page three of this packet.

Petitioned Resolutions (during conference)
The petitioned resolution is an alternate method to introduce policy proposals during the annual conference. To initiate a petitioned resolution, voting delegates from 10% of member cities must sign the petition. The resolution and signatures are due at least 24 hours before the beginning of the General Assembly. Voting delegates who have checked in at the voting delegate booth can receive more information on petitioned resolutions at the booth onsite. 1 74 of 151

2026 Resolution Packet

Policy Committee and Resolutions Committee Actions

The submitted resolution will be heard by the policy committee to which it was assigned, and the Resolutions Committee. The table below shows what recommendations these bodies may make on the resolution.

Policy Committee Actions Resolutions Committee Actions
Approve Approve
Disapprove* Disapprove*
No Action No Action
Amend and approve

Amend and approve

Refer to appropriate policy committee
for further study*
Approve as amended
Refer as amended to appropriate
policy committee for further study*
Refer to appropriate policy committee
for further study*
Refer as amended to appropriate
policy committee for further study*
Approve with additional
amendment(s)

Additional amendments and refer to
appropriate policy committee for
further study*

*If a resolution is disapproved or referred for further study by all policy committees to which it is assigned and the Resolutions Committee, it will not proceed to the General Assembly.

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2026 Resolution Packet

General Assembly Voting and Discussion Procedures
Discussion Procedures:

Discussion procedures during the General Assembly are guided by two calendars:
the Consent Calendar and the Regular Calendar. As seen below, resolutions are calendared by the recommendations they receive from policy committees and the Resolutions Committee.

For General Resolutions:

Policy Committee
Recommendation
Resolutions Committee
Recommendation Calendar
Approve Approve Consent Calendar
Approve Disapprove or refer Regular Calendar
Disapprove or refer Approve Regular Calendar
Disapprove or refer Disapprove or refer Does not proceed to General Assembly

For Petitioned Resolutions:

Policy Committee
Recommendation Resolutions Committee Action Calendar
N/A
Approve Regular Calendar
Disapprove or Refer Regular Calendar
Disqualified Does not proceed to General
Assembly

Items on the Consent Calendar will be presented as one motion during the General Assembly from the Resolutions Committee chair. Unless an item on the Consent Calendar is set aside by the majority of the General Assembly, a vote will be taken on the whole calendar. If an item is set aside, it will be opened for discussion, followed by a vote.

Items on the Regular Calendar will be presented individually by the Resolutions Committee chair. After a recommendation is presented by the Resolutions Committee chair, the resolution will be opened for discussion by the General Assembly. A vote will take place following discussion.

Voting Procedures:

Per Cal Cities Bylaws Article XII, Sec. 2, all votes will be conducted by voice vote first. If the presiding official cannot determine the outcome, a vote will be taken by an alternative method, typically a raise of voting cards by voting delegates. A roll call vote may be called for by delegates of ten percent or more of the General Assembly.

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2026 Resolution Packet
2026 Resolution

1. Resolution No. 1 submitted by City of Murrieta
• Letters of concurrence submitted by:
i. City of Banning;
ii. City of Calimesa;
iii. City of Canyon Lake;
iv. City of Moreno Valley;
v. City of Norco;
vi. City of Torrance;
vii. Crystal Ruiz, Mayor, City of San Jacinto;
viii. Jessica Alexander, Mayor, City of Temecula
• Referred to Housing, Community, and Economic Development Committee
• Policy Committee Recommendation:
• Resolutions Committee Recommendation:
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2026 Resolution Packet

Resolution No. 1
Submitted by City of Murietta

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2026 Resolution Packet

1. A RESOLUTION OF THE GENERAL ASSEMBLY OF THE LEAGUE OF CALIFORNIA CITIES

CALLING FOR A WORKING GROUP TO CONSIDER A STATE CONSTITUTIONAL

AMENDMENT OR OTHER FORM OF INITIATIVE TO ENSURE FINAL LOCAL AUTHORITY OVER

HOUSING AND LAND USE DECISIONS
Source: City of Murrieta
Concurrence of five or more cities/city officials
Cities/city officials: City of Banning; City of Calimesa; City of Canyon Lake; City of Moreno Valley; City of Norco; City of Torrance; Crystal Ruiz, Mayor, City of San Jacinto; Jessica Alexander, Mayor, City of Temecula
Referred to: Housing, Community, and Economic Development Policy Committee WHEREAS, California cities have historically been responsible for adopting general plans and zoning regulations, reviewing housing development proposals, and providing or coordinating the streets, water, wastewater, public safety, parks, transportation, and other infrastructure and services necessary to support responsible, environmentally sound, and well-planned residential growth; and
WHEREAS, the League of California Cities is dedicated to protecting and expanding local control for municipalities across the state to ensure their orderly growth and development; and
WHEREAS, the League of California Cities recognizes that local zoning is a primary function of cities and an essential component of home rule, and that a city’s general plan should guide its land use planning and strategic decision-making free from pre-emption by the state; and
WHEREAS, increasingly prescriptive statewide housing mandates and development approval requirements can override locally adopted plans, zoning standards, and public review procedures without adequately accounting for differences that exist in each unique jurisdict ion in infrastructure capacity, water availability, wildfire and evacuation risks, environmental constraints, fiscal impacts, public service needs, and community priorities; and
WHEREAS, California’s housing goals can be more effectively advanced through state funding, streamlined environmental requirements, and voluntary partnerships that support housing production while preserving the authority of locally elected officials to determine how and where housing is best planned and approved; NOW, THEREFORE, BE IT RESOLVED , by the General Assembly of the League of California Cities, assembled during the Annual Conference in Anaheim, California, on September 25, 2026, that the League of California Cities support the development and advancement of a state constitutional amend ment or other legislative, policy, or ballot- based strategies that restore and strengthen local authority over housing and land use matters within municipal boundaries, including general plans, housing elements, zoning, density, design and development standards, project siting, and the approval or denial of housing development applications; and
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2026 Resolution Packet

BE IT FURTHER RESOLVED, that any constitutional amendment or alternative strategy should preserve the State’s authority to establish broad statewide housing goals and enforce constitutional and civil rights, fair housing requirements, building and life -safety standards, and gen erally applicable environmental protections, while protecting cities from state actions that compel, through funding conditions or state law, the approval of housing developments that are inconsistent with locally adopted requirements; override local zonin g or density standards; or invalidate locally adopted housing or land use decisions when a city has planned in good faith to accommodate its regional housing needs allocation and maintains adequate capacity for housing at all income levels; and

BE IT FURTHER RESOLVED, that the League of California Cities consider establishing a statewide working group or other appropriate committee(s) to evaluate and develop a proposed constitutional amendment or other legislative, policy, or ballot-based strategies to restore and strengthen local authority over housing and land use matters including but limited to: conducting appropriate legal, fiscal, and policy analyses; engaging cities and other stakeholders; and building a statewide coalition of proponent supporters in preparation for; the November 2030 General Election, or within another reasonable time frame as determined by the working group.

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2026 Resolution Packet

Resolution No. 1: Background
Information

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2026 Resolution Packet

Background Information for Resolution

Source: City of Murrieta

Background:

California cities are responsible for planning residential growth, adopting general plans and zoning regulations, reviewing development proposals, and providing or coordinating the infrastructure and public services necessary to support new housing. Since 2010, the State has enacted more than 500 housing-related laws that have increasingly shifted housing and land use authority away from local governments. These laws have expanded by-right development, limited locally adopted standards and review processes, and established enforcement mechanisms, including the builder’s remedy, that may override local plans and zoning. Although these measures are frequently presented as solutions to housing affordability, many increase development capacity or restrict local review without delivering the meaningful production of housing needed to address the housing crisis.

At the same time, the State has continued to prioritize increased development capacity without adequately accounting for the infrastructure, public services, economic realities, and safety measures necessary to support housing growth.

State mandates often fail to reflect local conditions, including roadway and utility capacity, water availability, wildfire exposure, environmental limitations, fiscal impacts, and the availability of essential services. Cities are consequently required to accommodate additional housing while receiving no funding or assistance to address the resulting infrastructure and service demands.

Local elected officials are directly accountable to the residents who experience the effects of development decisions and are responsible for balancing housing production with infrastructure capacity, public safety, environmental protection, fiscal sustainability, and community needs. Cities of all types in California have been grappling with this dynamic, ranging from urban to rural, coastal to inland, small to large, northern to southern, voicing concerns to legislative representatives with minimal responsiveness. This is an issue of statewide concern that needs the strength and diversity of the League of California Cities to pursue a long-term solution.

The proposed resolution directs the League of California Cities to establish a statewide working group to evaluate a constitutional amendment or other legislative, policy, or ballot-based strategies to restore and strengthen local authority over housing and land use decisions. The working group would be tasked with developing a more balanced framework that preserves the State’s role in establishing broad housing goals and enforcing constitutional, civil rights, fair housing, building, life-safety, and environmental requirements, while restoring meaningful local authority to allow cities to determine how statewide housing 9 82 of 151

2026 Resolution Packet
objectives should be implemented in a manner that reflects local conditions and community priorities while continuing to support responsible housing production.

As the primary statewide organization representing California cities, the League is uniquely positioned to lead this effort. Its established policy, legal, legislative, communications, and advocacy networks enable it to convene municipalities, evaluate potential strategies, conduct legal and fiscal analyses, build consensus, engage stakeholders, and coordinate with statewide decision-makers. League leadership would help ensure that any recommendation reflects the collective interests of California municipalities and would provide the credibility, organizational capacity, and statewide reach necessary to advance a viable strategy.

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2026 Resolution Packet

Resolution No. 1: Letters of
Concurrence

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July 23, 2026

President Gabe Quinto
League of California Cities
1400 K Street, Suite 400
Sacramento, CA 95814

Subject: Support for a Resolution Establishing a Working Group to Evaluate a State Constitutional Amendment or Other Initiative to Restore Local Housing and Land Use Authority

Dear President Quinto,

The City of Murrieta is sponsoring a resolution for consideration by the General Assembly of the League of California Cities to establish a statewide working group to evaluate a constitutional amendment or other legislative, policy, or ballot -based strategies to restore and strengthen local authority over housing and land use decisions.

The proposed resolution, together with the required background materials, will be submitted to Cal Cities for consideration at the 2026 Annual Conference in Orange County on September 24 and

25. The resolution would direct the League to convene a working group to evaluate potential approaches for addressing the increasingly broad and prescriptive state mandates affecting local housing, zoning, development standards, and project approval authority.

On behalf of the City of Can yon Lake, this letter confirms our support for the City of Murrieta’s submission of the proposed resolution and its consideration by the League of California Cities General Assembly at the 2026 Annual Conference.

Sincerely,

Arron Brown
City Manager
City of Canyon Lake
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July 23, 2026

President Gabe Quinto
League of California Cities
1400 K Street, Suite 400
Sacramento, CA 95814

Subject: Support for a Resolution Establishing a Working Group to Evaluate a State Constitutional Amendment or Other Initiative to Restore Local Housing and Land Use Authority

Dear President Quinto,

The City of Murrieta is sponsoring a resolution for consideration by the General Assembly of the League of California Cities to establish a statewide working group to evaluate a constitutional amendment or other legislative, policy, or ballot-based strategies to restore and strengthen local authority over housing and land use decisions.

The proposed resolution, together with the required background materials, will be submitted to Cal Cities for consideration at the 2026 Annual Conference in Orange County on September 24 and 25. The resolution would direct the League to convene a working group to evaluate potential approaches to address increasingly broad and prescriptive state mandates affecting local housing, zoning, development standards, and project approval authority.

On behalf of the City of Moreno Valley, this letter confirms our support for the City of Murrieta’s submission of the proposed resolution and its consideration by the League of California Cities General Assembly at the 2026 Annual Conference.

Sincerely,

Brian Mohan
City Manager
City of Moreno Valley

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July 22, 2026

President Gabe Quinto
League of California Cities
1400 K Street, Suite 400
Sacramento, CA 95814

Subject: Support for a Resolution Establishing a Working Group to Evaluate a State Constitutional Amendment or Other Initiative to Restore Local Housing and Land Use Authority

Dear President Quinto,

The City of Murrieta is sponsoring a resolution for consideration by the General Assembly of the League of California Cities to establish a statewide working group to evaluate a constitutional amendment or other legislative, policy, or ballot-based strategies to restore and strengthen local authority over housing and land use decisions.

The proposed resolution, together with the required background materials, will be submitted to Cal Cities for consideration at the 2026 Annual Conference in Orange County on September 24 and 25. The resolution would direct the League to convene a working group to evaluate potential approaches for addressing the increasingly broad and prescriptive state mandates affecting local housing, zoning, development standards, and project approval authority.

On behalf of the City of the Norco, this letter confirms our support for the City of Murrieta’s submission of the proposed resolution and its consideration by the League of California Cities General Assembly at the 2026 Annual Conference.

Sincerely,

Kevin Bash
City Council Member
(951) 768-8981
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July 23, 2026

Mr. Gabe Quinto, President
League of California Cities
1400 K Street, Suite 400
Sacramento, CA 95814

Subject: Support for the City of Murrieta's Resolution Establishing a Working Group to Evaluate a State Constitutional Amendment or Other Initiative to Restore Local Housing and Land Use Authority

Dear President Quinto:

I am writing in my individual capacity as Mayor of the City of Temecula to express my strong support for the City of Murrieta's proposed resolution for consideration by the General Assembly of the League of California Cities at the 2026 Annual Conference.

The proposed resolution presents an important opportunity to thoughtfully evaluate the appropriate balance between California's statewide housing objectives and the constitutional principle of local governance. Establishing a statewide working group to examine a potential constitutional amendment, legislative reforms, or other policy initiatives will provide a meaningful forum to assess how local authority over housing and land use decisions can be strengthened while continuing to address the State's housing challenges.

Cities are uniquely positioned to understand the needs, opportunities, and constraints of their communities. Local elected officials are accountable to the residents they serve and are best equipped to make land use decisions that reflect a community's character, infrastructure capacity, economic development goals, environmental stewardship, and long-term vision. Equally important, local governments bear the primary responsibility for protecting public safety. Decisions regarding housing density, transportation, emergency access, wildfire preparedness, evacuation routes, police and fire service capacity, water availability, and critical infrastructure are inherently local matters that require the knowledge and judgment of those who serve their communities every day.

While the State has an important role in addressing California's housing needs, a collaborative approach that respects local expertise and preserves meaningful local discretion will produce stronger, safer, and more sustainable communities. The proposed working group offers an opportunity to evaluate policies that achieve these shared objectives while restoring an appropriate balance between state direction and local authority.

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Mr. Gabe Quinto, President
League of California Cities
July 23, 2026

Page 2 ends

Although this letter reflects my personal position and is not an official action or policy of the City of Temecula or the Temecula City Council, I respectfully endorse the City of Murrieta's submission of this resolution and encourage its favorable consideration by the League of California Cities General Assembly.

Thank you for your leadership and your thoughtful consideration of this important issue.

Respectfully,

Jessica Alexander
Mayor, City of Temecula
Signing in her individual capacity
and not on behalf of the City of Temecula
or the Temecula City Council.

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2026 Resolution Packet

Resolution No. 1: Staff Analysis

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League of California Cities Staff Analysis on Resolution No. 1

Staff: Brady Guertin, Legislative Advocate
Committee: Housing, Community, and Economic Development

Summary:

Resolution No.1 states that the League of California Cities (Cal Cities) will:

1. Support the development and advancement of a state constitutional amendment or legislative, policy, or ballot-based strategy that restores and strengthens local authority over housing and land use matters, including general plans, housing elements, zoning, density, design and development standards, project siting, and the approval or denial of housing development applications.

Pursuant to the resolution, the strategy should preserve the state’s authority to set broad, statewide housing goals and enforce civil rights, fair housing, building safety, and environmental standards while protecting local control by preventing the state from compelling the approval of developments that conflict with local requirements, override local zoning or density standards, or overturn local land use decisions where a city has planned for and maintained sufficient capacity to meet its housing obligations.

2. Consider establishing a statewide working group or other appropriate committee(s) to evaluate and develop a proposed constitutional amendment or other legislative, policy, or ballot-based strategies to restore and strengthen local authority over housing and land use matters.

The resolution states: “conducting legal, fiscal, and policy analyses; engaging cities and other stakeholders; and building a statewide coalition of proponent supporters in preparation for the November 2030 General Election, or within another reasonable time period.”

Background:

As provided in the background information, the city of Murrieta is sponsoring this resolution in response to concerns over state laws that have increasingly reduced city discretion over housing and land use decisions, including legislation that requires ministerial or by-right approvals for housing projects, limits the application of local development standards, and strengthens state enforcement mechanisms against local governments.

Additionally, the city of Murrieta, in its background information, maintains that these legislative efforts have not resulted in sufficient housing production to address California's housing shortage and have not adequately accounted for 24 97 of 151

local infrastructure, public service needs, public safety, market, and fiscal considerations.

The resolution states that California’s housing goals are better advanced through state funding, streamlined environmental requirements, and voluntary partnerships, while preserving local authority over how and where housing is best planned and approved.

Consideration of the resolution may be informed by a brief examination of how the California Constitution allocates authority between the state and cities with respect to land use decisions.

The constitution grants cities the power to adopt local laws to protect the public’s health, safety, and welfare. This grant is called the “police power,” which is the basis for local land use regulation. The constitution grants charter cities the additional power to adopt local laws affecting “municipal affairs.” This power, commonly referred to as “home rule,” is based on the principle that a city, rather than the state, is in the best position to identify and satisfy the needs of the local community.

The constitution’s broad grant of police power contains a significant limitation.

Local law adopted under the police power is not valid if it “conflicts” with state law. A local law “conflicts” with state law when it regulates the same “field” in which the Legislature has stated its intent to occupy. In that case, state law is said to “preempt” the local law and it cannot be enforced.

An ordinance adopted by a charter city under the municipal affairs power cannot be enforced if it affects a “matter of statewide concern.” The subjects that have been identified as “matters of statewide concern” have changed over the years due to economic, social, and political circumstances.

Since the 1960s, the state has enacted numerous laws that limit or preempt aspects of local land use and zoning authority. These laws include the Fair Employment and Housing Act, Housing Element Law, Housing Accountability Act, Density Bonus Law, Permit Streamlining Act, accessory dwelling unit laws, California Environmental Quality Act, and others. In recent years, the state has enacted several laws that Cal Cities was the leading opposition force against, as many of the proposals pre-empted local land use authority, limited public review, and constrained local flexibility. In support of its housing and land use legislation, the Legislature has cited a statewide housing crisis and the need for increased housing production at all income levels while asserting that a uniform approach to local land use decision-making is required.

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Discussion:

The resolution does not prescribe a specific policy mechanism. The eight letters in support recommend creating a working group or committee to evaluate potential approaches, including legislative proposals, constitutional amendments, or ballot initiatives to strengthen local authority over housing and land use matters.

A discussion of a strategy to restore and strengthen local authority over housing and land use matters will need to consider the California Constitution’s framework for both preemption of police power enactments and municipal affairs, discussed above. It will also need to determine whether changes to the California Constitution will be proposed, and whether they constitute an amendment or a revision, which require different processes.

A constitutional revision is a multistep process blending legislative consensus, voter support, and on occasion, a constitutional convention. It requires significant public engagement.

A constitutional amendment would require a ballot initiative, which includes gathering enough valid signatures to qualify for the ballot, building large coalitions to support election efforts, and campaigning to voters to support the initiative. This process can involve significant costs. In the last major election for ballot initiatives in 2024, proponents spent $8-$18 million to qualify for the ballot and spent nearly $700 million for the full election cycle, averaging out to about $100 million per ballot initiative.

Cal Cities has been engaged in ballot advocacy for over 20 years. In the early 2000s, Cal Cities developed a ballot advocacy infrastructure that included forming an issue political action committee, fundraising, establishing a network of regional managers, and building a coalition with other organizations to ultimately advocate on a ballot measure. Ballot advocacy requires the approval of the Board of Directors with a supermajority vote.

In the Legislature, Cal Cities plays an active and influential role to ensure that local flexibility and autonomy in the land use and housing space is maintained by engaging on dozens of bills every legislative session to ensure that cities' voices are heard at the state Capitol. Below, you will find Cal Cities “Existing Policy” on local control, housing, and land use policies.

Fiscal Impact
The resolution itself would not have a significant direct fiscal impact. However, depending on what actions follow, the fiscal costs could be significant.

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Existing Cal Cities Policy
Vision
To be recognized and respected as the leading advocate for the common interests of California's cities.

Mission Statement
To expand and protect local control for cities through education and advocacy to enhance the quality of life for all Californians.

We Believe
• Local self-governance is the cornerstone of democracy. • Our strength lies in the unity of our diverse communities of interest. • In the involvement of all stakeholders in establishing goals and in solving problems.
• In conducting the business of government with transparency, openness, respect, and civility.
• The spirit of honest public service is what builds communities. • Open decision-making that is of the highest ethical standards honors the public trust.
• Cities are vital to the strength of the California economy. • The vitality of cities is dependent upon their fiscal stability and local autonomy.
• The active participation of all city officials increases the League's effectiveness.
• Partnerships and collaborations are essential elements of focused advocacy and lobbying.
• Ethical and well-informed city officials are essential for responsive, visionary leadership and effective and efficient city operations.

Zoning
Cal Cities believes local zoning is a primary function of cities and is an essential component of home rule. The process of adoption, implementation and enforcement of zoning ordinances should be open and fair to the public and enhance the responsiveness of local decision-makers. State policy should leave local siting and use decisions to the city and not interfere with local prerogative beyond providing a constitutionally valid procedure for adopting local regulations. State agency siting of facilities, including campuses and office buildings, should be subject to local notice and hearing requirements in order to meet concerns of the local community. Cal Cities opposes legislation that seeks to limit local authority over parking requirements.

Housing Element
Housing issues should be addressed in the general plan as other planning issues are. The housing element should be prepared for the benefit of local 27 100 of 151

governments and should have equal status with the other elements of the general plan.

Encourage Full Community Participation
Foster an open and inclusive community dialogue and promote alliances and partnerships to meet community needs.

Well-Planned New Growth
Recognize and preserve open space, watersheds, environmental habitats, and agricultural lands, while accommodating new growth in compact forms, in a manner that:
• De-emphasizes automobile dependency;
• Integrates the new growth into existing communities;
• Creates a diversity of affordable housing near employment centers; • Provides job opportunities for people of all ages and income levels.

Support:

The following letters of concurrence were received:

City of Banning
City of Calimesa
City of Canyon Lake
City of Moreno Valley
City of Norco
City of Torrance
Crystal Ruiz, Mayor, City of San Jacinto
Jessica Alexander, Mayor, City of Temecula
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10d
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CITY OF GLENDALE, CALIFORNIA

REPORT TO THE CITY COUNCIL

AGENDA ITEM
Report: Appointment of Glendale members to the Burbank-Glendale-Pasadena Regional Housing Trust (BGPRHT).

1. Motion appointing a member and an alternate to the Burbank-Glendale-Pasadena Regional Housing Trust (BGPRHT).

COUNCIL ACTION
Item Type: Action Item
Approved for September 1, 2026 calendar

EXECUTIVE SUMMARY
A member of Council has requested that the City Council consider new appointments to the member and alternate roles respectively for the Burbank-Glendale-Pasadena Regional Housing Trust (BGPRHT) due to scheduling conflicts, as well as to extend the opportunity for regional participation for newly elected councilmembers. 102 of 151

10d2
26-90480
7 0
5 8

RECOMMENDATION
That the City Council consider new appointments to the member and alternate roles respectively for Burbank-Glendale-Pasadena Regional Housing Trust.

ANALYSIS
At the July 21, 2026, City Council meeting, Councilmember Brotman requested that the City Council consider making new appointments to the member and alternate roles respectively for the San Fernando Valley Council of Governments (SFVCOG), Arroyo Verdugo Cities Joint Powers Authority (AVCJPA), and Burbank-Glendale-Pasadena Regional Housing Trust (BGPRHT). The appointments to the AVCJPA and the SFCOG were completed on July 28, 2026, while councilmembers asked for additional information about the BGPRHT, which has been provided via email correspondence.

Currently, Glendale’s representation on the BGPRHT is as follows:
oMember- Dan Brotman, Councilmember
oAlternate - Elen Asatryan, Councilmember
The BGPRHT requires that an elected official be selected as the appointed member to the board.

STAKEHOLDERS/OUTREACH
N/A.

FISCAL IMPACT
There is no fiscal impact associated with this report.

ENVIRONMENTAL REVIEW (CEQA/NEPA)
N/A.

CAMPAIGN DISCLOSURE
This item is exempt from campaign disclosure requirements.

ALTERNATIVES TO STAFF RECOMMENDATION
City Council may consider not making changes to the current appointments to external boards or may consider an alternative than what staff has proposed.

ADMINISTRATIVE ACTION
Submitted by:

Roubik R. Golanian, City Manager
Prepared by:

Domenica Megerdichian, Assistant to the City Manager
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7 0
5 8
Approved by:

Roubik R. Golanian, P.E., City Manager

EXHIBITS/ATTACHMENTS
None.
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MOTION
Moved by Council Member ____________________________, seconded by Council Member ___________________________, that Councilmember ____________________ is hereby selected and appointed as Glendale’s member representative to the Burbank-Glendale-Pasadena Regional Housing Trust (the “Housing Trust”). ______________________ is hereby selected and appointed as Glendale’s alternate representative to the Housing Trust.

Vote as follows:

Ayes:

Noes:

Absent:

Abstain:
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CITY OF GLENDALE, CALIFORNIA

REPORT TO THE SPECIAL CITY COUNCIL

AGENDA ITEM
Report: Lease Agreement for City Owned Property 250 North Orange Street

2. Motion Authorizing City Manager to execute a lease with Tenant at a base rent of $2,927 per month, following adoption of the Ordinance authorizing said lease, as subject to the review and approval as to form by the City Attorney.

COUNCIL ACTION
Item Type: Action
Approved for September 1, 2026 calendar

EXECUTIVE SUMMARY
The Economic Development Division is committed to supporting a robust downtown environment which includes a focus on arts, cultural amenities, and entertainment. A City-owned forefront located at 250 N. Orange Street has been leased to The Center for Armenian Arts (“Tenant”) since September 2023. That lease expired on January 31, 2026, and shifted to a month-to-month holdover. The lessee is seeking to extend their tenancy by an additional five years and continue programming the space for various arts exhibits, workshops, speaker series, and related activations.

Glendale City Charter Article VI, Section 15, requires the Council to adopt an ordinance for the lease of City-owned property for a period of longer than five (5) years. The City originally entered into a three-year lease with the Tenant in September 2023. This lease will extend the original and hold over term to total of eight (8) years. 106 of 151

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9 RECOMMENDATION
That the Council introduce the Ordinance authorizing the City to enter into the proposed lease and adopt a motion authorizing the City Manager to execute said lease following adoption of the Ordinance.

ANALYSIS
The City of Glendale owns the Orange Street Garage, a public parking structure in downtown Glendale. Within the structure are two ground floor office suites, and the tenant space at 250 N. Orange has been leased to Knowledge Truck, Inc., (DBA The Center for Armenian Arts), since September 23, 2023. That lease expired on January 31, 2026, and shifted to a month-to-month holdover until this proposed lease which extends the term by an additional five years is executed, or other direction is provided by the City Council.

The site is 2,770 square feet, and the original rental amount was based on $1/square foot, which is lower than market rate, in order to help tenant activate the space within the City’s arts and culture corridor and support other economic development activities in the downtown area. The original lease included a base rent escalator linked to the Consumer Price Index (CPI) not to exceed 10% for any adjustment period. Based on the nature of the non-profit, and the desire to encourage and further develop the arts, entertainment, and cultural opportunities in the downtown, staff recommends continuing to offer this space at the cost of $1.00/square foot for an additional five-year term, with a new base rent of $2,927 a month based on the CPI adjustment. “Armenian Arts” DBA Knowledge Truck, Inc. is a Nonprofit California public benefit Corporation established January 22, 2015, as an “Educational & Cultural Endeavor with a Mission Statement” focused on increasing public awareness about Armenian culture and history through social activities and publications designed to promote and preserve the heritage and cultural identity of the Armenians. Armenian Arts links artists and audiences by presenting art exhibitions, acoustic performances, screenings, discussions, readings, workshops, and other unique gatherings. Since 2000 Armenian Arts has showcased exceptional Armenian talent in the fields of visual and musical arts.

Over the years, the organization has presented numerous prestigious events, including concerts at venues like the Hollywood Bowl, the J. Paul Getty Museum, Barnsdall Gallery Theatre, and the Ford Amphitheater. Armenian Arts published the “Armenian Arts” magazine, and the “Yes, We Have” series, which highlights Armenian contributions to humanity.

This tenant’s activity is in line with the City’s and community’s interests of supporting and contributing to a vibrant and vital downtown area which has been long-established as a arts and culture corridor in Glendale; this opportunity offers an appropriate utilization of the City’s property to support arts, culture and economic development in line with the City’s Economic Development Program set forth in Glendale Municipal Code Chapter 2.30.

STAKEHOLDERS/OUTREACH
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FISCAL IMPACT
The base rent for the lease will begin at $2,927 per month, or $35,124 annually, subject to annual CPI adjustment.

ENVIRONMENTAL REVIEW (CEQA/NEPA)
The proposed lease of an existing City-owned tenant space with no proposed tenant improvements or changes to the premises is exempt from CEQA pursuant to CEQA Guidelines section 15301 (Existing Facilities) which exemption applies to the operation, repair, maintenance, permitting, leasing, licensing or minor alteration of existing public or private structures, facilities, etc., involving negligible or no expansion of existing or former use.

CAMPAIGN DISCLOSURE
The names and business addresses of the members of the board of directors, the chairperson, CEO, COO, CFO, Subcontractors and any person or entity with more than 10% interest in the company proposed for contract in this Agenda Item Report are attached in Exhibit 2, in accordance with the City Campaign Finance Ordinance No. 5744.

ALTERNATIVES TO STAFF RECOMMENDATION
Alternative 1: Do not move forward with the Lease and Applicant.

Alternative 2: The Council may also consider any other alternative not proposed by staff.

ADMINISTRATIVE ACTION
Submitted by:

Roubik Golanian, P.E., City Manager
Prepared by:

Domenica K. Megerdichian, Assistant to the City Manager Approved by:

Roubik R. Golanian, P.E., City Manager

EXHIBITS/ATTACHMENTS
Exhibit 1- Draft Lease Agreement
Exhibit 2- Campaign Disclosure Form
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1 ORDINANCE NO.

AN ORDINANCE OF THE COUNCIL OF THE CITY OF GLENDALE,

CALIFORNIA AUTHORIZING AND APPROVING A LEASE AGREEMENT
BETWEEN THE CITY AND “THE CENTER FOR ARMENIAN ARTS”, DBA OF KNOWLEDGE TRUCK, INC., A NONPROFIT CALIFORNIA PUBLIC BENEFIT CORPORATION (“TENANT”), FOR THE LEASE OF CITY
OWNED PROPERTY LOCATED AT 250 NORTH ORANGE STREET, FOR
A LEASE TERM EXCEEDING FIVE YEARS.

WHEREAS, the City of Glendale owns the Orange Street Garage, a public parking structure in downtown Glendale that contains ground floor office suites, including a commercial tenant space located at 250 N. Orange Street (the “Premises”); WHEREAS, the City has leased the Premises to Knowledge Truck, Inc., (DBA The Center for Armenian Arts), (“Tenant”) since September 23, 2023; WHEREAS, the lease expired on January 31, 2026, but has continued on a month- to-month basis ever since;
WHEREAS, the City, as landlord, and Tenant desire to extend the lease term by an additional five years for a total cumulative lease term of approximately eight (8) years based on the date of commencement of the extended lease, for a monthly base rent of $2,927, subject to annual CPI adjustment as set forth in the lease; and WHEREAS, Glendale Charter Article VI, Section 15, requires the City Council to adopt an ordinance for the lease of City owned property that is for a period of longer than five (5) years.

BE IT ORDAINED BY THE COUNCIL OF THE CITY OF GLENDALE,
CALIFORNIA:

SECTION 1: The City Council authorizes the continued lease of the real property located at 250 N. Orange, as more particularly described in the Lease Agreement attached to City Council staff report, dated September 1, 2026, and by this reference made a part hereof, for an additional five (5) years as set forth in the Lease Agreement.

SECTION 2. The City Manager or his designee is authorized to execute the Lease Agreement in substantially the form as attached to the September 1, 2026 staff report, subject to review and approval as to form by the City Attorney. 109 of 151

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2 SECTION 3. This ordinance shall become effective within thirty days from the date of its adoption.

Passed and adopted by the Council of the City of Glendale on the day of ____________, 2026.
_______________________________
Mayor
Attest:
__________________________
City Clerk

STATE OF CALIFORNIA )

COUNTY OF LOS ANGELES ) SS

CITY OF GLENDALE )
I, Dr. Suzie Abajian, City Clerk of the City of Glendale, certify that the foregoing Ordinance No. ______________ was adopted by a majority vote of the Council of the City of Glendale, California, at a regular meeting held on the day of , 2026, and that same was adopted by the following vote:

Ayes:

Noes:

Absent:

Abstain:
____________________________
City Clerk
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MOTION
Moved by Council Member _________________________________, seconded by Council Member _____________________________, that following City Council adoption of the Ordinance authorizing five year lease of City owned property to Knowledge Truck, Inc., (DBA The Center for Armenian Arts), and subject to the review and approval as to form by the City Attorney, the City Council hereby authorizes the City Manager to execute the lease which is substantially in the form attached to the September 1, 2026 staff report from the City Manager, which lease, among other terms, includes a base rent of $2,927 per month.

Votes as follows:

Ayes:

Noes:

Absent:

Abstain:

City Clerk
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COMMERCIAL TENANT - BUILDING LEASE
250 NORTH ORANGE STREET

BY AND BETWEEN

THE CITY OF GLENDALE
AND
Knowledge Truck, Inc DBA Armenian Arts
THIS BUILDING LEASE ("Lease") is made and entered into as of this ____day of _________________ , 2026 ("Commencement Date"), by and between the City of Glendale, a municipal corporation located in the County of Los Angeles, State of California ("Lessor"), and Knowledge Truck, Inc., a California non-profit corporation headquartered in Glendale ("Lessee") (collectively, "Parties" or individually, "Party").

RECITALS

1. Lessor owns that certain real property known as 250 N. Orange Street, Glendale, California, 91206, part of which is generally described as a ground floor retail space of approximately 2,770 square feet ("Premises") located within part of a larger building and parking structure owned by Lessor.

2. Lessee is a non-profit California Corporation.

3. The Parties entered into a lease of the Premises on October 26, 2023 for a term of two years, which term expired on January 31, 2026, and since then the Lessee held over on a month to month basis on the same terms and conditions.

4. Lessor and Lessee desire to extend the term of the Lease for an additional period of five (5) years commencing on the Commencement Date, subject to the terms and conditions contained herein, which together with the prior lease term and hold over period reflects a total lease term of approximately eight years.

5. Pursuant to Gov’t Code section 54221, Local Agency leases that are less than fifteen (15) years in duration are not subject to the disposition procedures of the Surplus Land Act.

6. Glendale City Charter, Art. VI, §15, entitled “Required vote on sale of real estate; limitation on term of lease” requires council approval of an ordinance passed by the affirmative vote of four-fifths (4/5) of all the members for any lease of City property made for a period of longer than five years.

7. On __________, the City Council adopted Ordinance No. __________, approving the term of this Lease.

NOW, THEREFORE, in consideration of the mutual promises of the Parties contained herein, it is agreed as follows:
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LEASE AGREEMENT

1.Basic Provisions.

1.1 Letting. Lessor hereby leases to Lessee, and Lessee hereby leases from Lessor, the Premises, for the term, at the rental, and upon all of the terms, covenants and conditions set forth in this Lease.

1.2 (a) Premises: The Premises is commonly known as 250 North Orange Street, Glendale, California, 91206, described and shown in Exhibit A (site map) and Exhibit B (floor scheme and tenant improvement plan), both exhibits attached hereto and by this reference are incorporated herein. The Premises is comprised of approximately 2,770 square feet located in a portion of the ground (1 st) floor retail space and is part of a larger building and parking structure owned by Lessor.

1.2(b) Parking: Lessee shall have the right to use one (1) undesignated vehicle parking space in the Orange Street Parking Garage during the Lease Term. In addition, Lessee's customers receive ninety (90) minutes of parking free of charge, per the Citywide parking policy, which policy may be changed from time to time in the discretion of the City of Glendale.

1.3 Term: Five (5) years ("Term") commencing on the Effective Date. ("Commencement Date") and ending September 1, 2031 ("Expiration 'Date"), which term is subject to the City Council's approval by ordinance.

1.4 Early Termination or Cancellation: Notwithstanding Paragraph 1.3, either Party shall have the right to early termination of this Lease at any time by giving the other Party a minimum of three (3) months advance written notice prior to such early termination.

1.5 Option To Extend Term: There is no option to extend the Term.

1.6 Base Rent and CPI: The base rent is TWO-THOUSAND, NINE HUNDRED AND TWENTY-SEVEN DOLLARS ($2,927) per month ("Base Rent"), payable on the first (1st) day of each month commencing September 1, 2026 (see also Paragraph 4) the end of the term, as set forth hereinabove in Section 1.3. The Base Rent shall be subject to adjustment by the percentage increase (not to exceed 10% for any adjustment) in the Consumer Price Index for all Urban Consumers (base year 2026) for Glendale, California CMSA, published by the United States Department of Labor, Bureau of Labor Statistics,(the "CPI lndex"). If the CPI Index is discontinued or revised during the Term, such other governmental index or computation with which it is replaced shall be used in order to obtain substantially the same result as would be obtained if the CPI Index had not been discontinued or revised. If no such replacement index is provided, Lessor may select a reasonable index for the purpose of this Lease.

1.7 Other Monies Paid Upon Execution:
(a) Common Area Operating Expenses: $ -O- for the Lease term. (b) Security Deposit: $2,927.

1.8Agreed Use: Art Gallery space and other ancillary purposes associated therewith. (See Paragraph 6.)
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1.9Insuring Party. Lessor is the "Insuring Party" (see Paragraphs 8 and 9).

1.10Guarantor. There is no guarantor for this Lessee (see Paragraph 37).

2.Premises.

2.1Size of Premises. Unless otherwise provided herein, any statement of size set forth in this Lease, or that may have been used in calculating Base Rent, is an approximation which the Parties agree is reasonable and any payments based thereon are not subject to revision whether or not the actual size is more or less, except that in the event the useable square footage of the Premises is modified during the course of construction, the Parties agree to amend this Lease as to the actual size of the Premises and adjust; the Base Rent; and other monies, if any, due under this Lease to correspond with such revised square footage.

2.2Condition. Lessor shall deliver that portion of the Premises to Lessee broom clean and free of debris on the Commencement Date or the Early Possession Date, whichever first occurs ("Start Date"), and, so long as the required service contracts described in Paragraph

7.1 (b) below are obtained by Lessee and in effect within thirty days following the Start Date, Lessor warrants that the existing electrical, plumbing, fire sprinkler, lighting, heating, ventilating and air conditioning systems ("HVAC"), loading doors, if any, and all other such elements in the Premises, other than those constructed by Lessee, shall be in good operating condition on the Start Date and that the structural elements of the roof, bearing walls and foundation of the Premises shall be free of material defects. If a non-compliance with such warranty exists as of the Start Date, or if one of such systems or elements should malfunction or fail within the appropriate warranty period, Lessor shall as Lessor's sole obligation with respect to such matter, except as otherwise provided in this Lease, promptly after receipt of written notice from Lessee setting forth with specificity the nature and extent of such noncompliance, malfunction or failure, rectify same at Lessor's expense. The warranty periods shall be as follows: (i) 6 months as to the HVAC systems, and (ii) 30 days as to the remaining systems and other elements of the Premises ("Warranty Period"). If Lessee does not give Lessor the required notice within the appropriate Warranty Period, correction of any such non-compliance, malfunction or failure shall be the obligation of Lessee at Lessee's sole cost and expense (except for the repairs to the fire sprinkler systems, roof, foundations, and/or bearing walls - see Paragraph 7).

2.3Compliance. Lessee is responsible for complying with all federal, state and local laws, statutes, regulations, ordinances including but not limited to environmental, hazardous materials, and toxic waste laws and zoning and land use requirements ("Applicable Requirements"). Lessee acknowledges its awareness that all occupants of non-residential buildings within the City of Glendale are required to obtain a Business Registration Certificate (BRC) from the City of Glendale, Neighborhood Services Division. Upon obtaining a BRC, a copy of same shall be forwarded to Lessor for its files. Lessee acknowledges that past uses of the Premises may no longer be allowed. If any Applicable Requirements are hereafter changed, modified, or amended so as to require during the term of this Lease the construction of an addition to or an alteration of the Premises or Building, the remediation of any Hazardous Substance, or the reinforcement or other physical modification of the Premises or Building ('Capital Expenditure"), Lessor and Lessee shall allocate the cost of such work as follows:
(a) Subject to Paragraph 2.3(c), if such Capital Expenditure is required as a result of the specific and unique use of the Premises by Lessee as compared with uses by tenants in general, Lessee shall be fully responsible for the cost thereof, provided, however that if such Capital Expenditure is required during the last two (2) years of this Lease and the cost 114 of 151

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thereof exceeds six (6) months' Base Rent, Lessee may instead terminate this Lease. In such event, Lessor shall notify Lessee, in writing, within ten (10) days after receipt of Lessee's termination notice that Lessor has elected to pay the difference between the actual cost thereof and the amount equal to six (6) months' Base Rent. If Lessee elects termination and Lessor does not pay the difference in the actual cost thereof and six (6) month's Base Rent, Lessee shall immediately cease the use of the Premises which requires such Capital Expenditure and deliver to Lessor a written notice specifying a termination date at least ninety (90) days thereafter. Such termination date shall, however, in no event be earlier than the last day that Lessee could legally utilize the Premises without incurring such Capital Expenditure. (b) If such Capital Expenditure is not the result of the specific and unique use of the Premises by Lessee (such as, governmentally mandated seismic modifications), then Lessor and Lessee shall allocate the obligation to pay for the portion of such costs reasonably attributable to the Premises pursuant to the formula set out in Paragraph 7.1 (d); provided, however, that if such Capital Expenditure is required during the last two (2) years of this Lease or if Lessor reasonably determines that it is not economically feasible to pay its share thereof, Lessor shall have the option to terminate this Lease upon ninety (90) days prior written notice to Lessee unless Lessee notifies Lessor, in writing, within ten (10) days after receipt of Lessor's termination notice that Lessee will pay for such Capital Expenditure. If Lessor does not elect to terminate and fails to tender its share of any such Capital Expenditure, Lessee may advance such funds and deduct same, with Interest, as defined in Paragraph 13.5/from Rent until Lessor's share of such costs have been fully paid. If Lessee is unable to finance Lessor's share, or if the balance of the Rent due and payable for the remainder of this Lease is not sufficient to fully reimburse Lessee on an offset basis, Lessee shall have the right to terminate this Lease upon thirty (30) days' written notice to Lessor.
(c) Notwithstanding the above, the provisions concerning Capital Expenditures are intended to apply only to non-voluntary, unexpected, and new Applicable Requirements. If the Capital Expenditures are instead triggered by Lessee as a result of an actual or proposed change in use, change in intensity of use, or modification to the Premises, Lessee shall be fully responsible for the cost thereof, and Lessee shall not have any right to terminate this Lease.

2.4Acknowledgements. Lessee acknowledges that: (a) it has been advised by Lessor to satisfy itself with respect to the condition of the Premises (including but not limited to the electrical, HVAC and fire sprinkler systems, security, environmental aspects, and compliance with Applicable Requirements and the Americans with Disabilities Act), and their suitability for Lessee's intended use, (b) Lessee has made such investigation as it deems necessary with reference to such matters and assumes all responsibility therefor as the same relate to its occupancy of the Premises, and (c) neither Lessor, nor Lessor's agents have made any oral or written representations or warranties with respect to said matters other than as set forth in this Lease. Lessor acknowledges that it is Lessor's sole responsibility to investigate the financial capability and/or suitability of all proposed tenants.

2.5Lessee as Prior Owner/Occupant. The warranties made by Lessor in Paragraph 2, if any, shall be of no force or effect if immediately prior to the Start Date Lessee was the occupant of the Premises. In such event, Lessee shall be responsible for any necessary corrective work.

2.6Vehicle Parking. Lessee shall be entitled to use the number of Unreserved Parking Spaces and Designated Parking Spaces specified in Paragraph 1.2(b) on those 115 of 151

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portions of the Common Areas designated from time to time by Lessor for parking. Lessee shall not use more parking spaces than said number. Said parking spaces shall be used for parking by vehicles no larger than full-size passenger automobiles or pick-up trucks, herein called "Permitted Size Vehicles." Lessor may regulate the loading and unloading of vehicles by adopting Rules and Regulations as provided in Paragraph 2.9. No vehicles other than Permitted Size Vehicles may be parked in the Common Area without the prior written permission of Lessor.
(a) Lessee shall not permit or allow any vehicles that belong to or are controlled by Lessee or Lessee's employees, suppliers, shippers, customers, contractors or invitees to be loaded, unloaded, or parked in areas other than those designated by Lessor for such activities.
(b) Lessee shall not service or store any vehicles in the Common Areas. (c) If Lessee permits or allows any of the prohibited activities described in this Paragraph 2.6, then Lessor shall have the right, without notice, in addition to such other rights and remedies that it may have, to remove or tow away the vehicle involved and charge the cost to Lessee, which cost shall be immediately payable upon demand by Lessor.

2.7Common Areas - Definition. The term "Common Areas" is defined as all areas and facilities outside the Premises and within the exterior boundary line of the Premises and interior utility raceways and installations within the Premises that are provided and designated by the Lessor from time to time for the general non-exclusive use of Lessor, Lessee and other tenants of the Building and their respective employees, suppliers, shippers, customers, contractors and invitees, including parking areas, loading and unloading areas, trash areas, roadways, walkways, driveways and landscaped areas.

2.8Common Areas — Lessee's Rights. Lessor grants to Lessee, for the benefit of Lessee and its employees, suppliers, shippers: contractors, customers and invitees, during the term of this Lease, the non-exclusive right to use, in common with others entitled to such use, the Common Areas as they exist from time to time, subject to any rights, powers, and privileges reserved by Lessor under the terms hereof or under the terms of any rules and regulations or restrictions governing the use of the Building and Premises. Under no circumstances shall the right herein granted to use the Common Areas be deemed to include the right to store any property, temporarily or permanently, in the Common Areas. Any such storage shall be permitted only by the prior written consent of Lessor or Lessor's designated agent, which consent may be revoked at any time. In the event that any unauthorized storage shall occur then Lessor shall have the right, without notice, in addition to such other rights and remedies that it may have, to remove the property and charge the cost to Lessee, which cost shall be immediately payable upon demand by Lessor.

2.9Common Areas —Rules and Regulations. Lessor, or such other person(s) as Lessor may appoint, shall have the exclusive control and management of the Common Areas and shall have the right, from time to time, to establish, modify, amend and enforce reasonable rules and regulations ("Rules and Regulations") for the management, safety, care, and cleanliness of the grounds, the parking and unloading of vehicles and the preservation of good order, as well as for the convenience of other occupants or tenants of the Building and the Premises and their invitees, Lessee agrees to abide by and conform to all such Rules and Regulations, and to cause its employees, suppliers, shippers, customers, contractors and 116 of 151

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invitees to so abide and conform. Lessor shall not be responsible to Lessee for the non- compliance with said Rules and Regulations by other tenants of the Building.

2.10Common Areas - Changes. Lessor shall have the right, in Lessor's sole discretion, from time to time to:
(a) Make changes to the Common Areas, including, without limitation, changes in the location, size, shape and number of driveways, entrances, parking spaces, parking areas, loading and unloading areas, ingress, egress, direction of traffic, landscaped areas, walkways and utility raceways;
(b) Close temporarily any of the Common Areas for maintenance purposes so long as reasonable access to the Premises remains available; (c) Designate other land outside the boundaries of the Building to be a part of the Common Areas;
(d) Add additional buildings and improvements to the Common Areas; (e) Use the Common Areas while engaged in making additional improvements, repairs or alterations to the Premises, or any portion thereof; and to (f) Do and perform such other acts and make such other changes in, to or with respect to the Common Areas and Premises as Lessor may, in the exercise of sound business judgment, deem to be appropriate.

3.Term.

3.1Term. The Term begins on the Commencement Date and continues through the Expiration Date of the Term of this Lease are as specified in Paragraph 1.3.

3.2 Early Possession. If Lessee totally or partially occupies the Premises prior to the Commencement Date, Lessee shall be obligated to pay Base Rent for such period or portion thereof. All other terms of this Lease (including but not limited to the obligations to maintain the Premises) shall, however, be in effect during such period. Any such early possession shall not affect the Expiration Date.

3.3 Delay in Possession. Lessor agrees to use commercially reasonable efforts to deliver possession of the Premises to Lessee by the Commencement Date. If, despite said efforts, Lessor is unable to deliver possession as agreed, Lessor shall not be subject to any liability there for, nor shall such failure affect the validity of this Lease. Lessee shall not, however, be obligated to pay Rent or perform its other obligations until it receives possession of the Premises. Provided, however, if possession is not delivered within sixty (60) days after the Commencement Date, Lessee may, at its option, by notice in writing within ten (10) days after the end of such sixty (60) day period, terminate this Lease, in which event the Parties shall be discharged from all obligations hereunder. If such written notice is not received by Lessor within said ten (10) day period, Lessee's right to terminate shall expire. Except as otherwise provided, if possession is not tendered to Lessee by the Start Date and Lessee does not terminate this Lease, any period of Rent abatement that Lessee would otherwise have enjoyed shall run from the date of delivery of possession and continue for a period equal to what Lessee would otherwise have enjoyed under the terms hereon, but minus any dates of delay caused by the acts or omissions of Lessee. If possession of the Premises is not delivered within four (4) 117 of 151

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months after the Commencement Date, this Lease shall terminate unless Lessor and Lessee enter into a new written agreement.

3.4 Lessee Compliance. Lessor shall not be required to tender possession of the Premises to Lessee until Lessee complies with its obligation to provide evidence of insurance (Paragraph 8.5) and service contracts (Paragraph 7.1 (b)). Pending delivery of such evidence, Lessee shall be required to perform all of its obligations under this Lease from and after the Start Date, including the payment of Rent, notwithstanding Lessors election to withhold possession pending receipt of such evidence of insurance. Further, if Lessee is required to perform any other conditions prior to or concurrent with the Start Date, the Start Date shall occur but Lessor may elect to withhold possession until such conditions are satisfied.

4.Rent.

4.1Rent Defined/Lease Purpose. All monetary obligations of Lessee to Lessor under the terms of this Lease (except for the Security Deposit) are deemed to be rent ("Rent").

4.2Payment. Lessee shall cause payment of Rent to be received by Lessor in lawful money of the United States, without offset or deduction (except as specifically permitted in this Lease), on or before the day on which Rent is due. Rent for any period during the term hereof which is for less than one full calendar month shall be prorated based upon the actual number of days of said month. Payment of Rent shall be made to Lessor at its address stated herein or to such other persons or place as Lessor may from time to time designate in writing.

Acceptance of a payment which is less than the amount then due shall not be a waiver of Lessor's rights to the balance of such Rent, regardless of Lessor's endorsement of any check so stating. In the event that any check, draft, or other instrument of payment given by Lessee to Lessor is dishonored for any reason, Lessee agrees to pay to Lessor the sum of $50 in addition to any late charges which may be due.

5.Security Deposit.

5.1 The Security Deposit in the amount of $2,927.00 shall be retained by Lessor under the following terms and conditions:
(a) The Security Deposit is security for Lessee's faithful performance of its obligations under this Lease. If Lessee fails to pay Rent or otherwise Defaults under this Lease, Lessor may use, apply or retain all or any portion of said Security Deposit for the payment of any amount due Lessor or to reimburse or compensate Lessor for any liability, expense, loss or damage which Lessor may suffer or incur by reason thereof. (b) If Lessor uses or applies all or any portion of the Security Deposit, Lessee shall within ten (10) days after written request therefor deposit monies with Lessor sufficient to restore said Security Deposit to the full amount required by this Lease. (c) If the Base Rent increases during the term of this Lease, Lessee shall, upon written request from Lessor, deposit additional monies with Lessor so that the total amount of the Security Deposit shall at all times bear the same proportion to the increased Base Rent as the initial Security Deposit bore to the initial Base Rent. 118 of 151

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(d) Should the Agreed Use be amended to accommodate a material change in the business of Lessee or to accommodate a sublessee or assignee, Lessor shall have the right to increase the Security Deposit to the extent necessary, in Lessor's reasonable judgment, to account for any increased wear and tear that the Premises may suffer as a result thereof. (e) If a change in control of Lessee occurs during this Lease and following such change, the financial condition of Lessee is, in Lessor's reasonable judgment, significantly reduced, Lessee shall deposit such additional monies with Lessor as shall be sufficient to cause the Security Deposit to be at a commercially reasonable level based on such change in financial condition. Lessor shall not be required to keep the Security Deposit separate from its general accounts,
(f) Within fourteen (14) days after the expiration or termination of this Lease, if Lessor elects to apply the Security Deposit only to unpaid Rent, and otherwise within thirty (30) days after the Premises have been vacated pursuant to Paragraph 7.4(c), Lessor shall return that portion of the Security Deposit not used or applied by Lessor. (g) No pan of the Security Deposit shall be considered to be held in trust, to bear interest or to be prepayment for any monies to be paid by Lessee under this Lease.

6.Use.

6.1Use. Lessee shall use and occupy the Premises only for the Agreed Use, and for no other purpose without Lessor's express written consent which consent shall not be unreasonably withheld or delayed. Lessee shall not use or permit the use of the Premises in a manner that is unlawful; creates damage, waste, nuisance; disturbs occupants of or causes damage to neighboring premises or properties; impairs the structural integrity of the improvements on the Premises or the mechanical or electrical systems therein; or is not significantly more burdensome to the Premises. In the event Lessee seeks a change or modification of the Agreed Use, Lessee shall submit a written request to Lessor. In the event Lessor denies such request, Lessor shall provide the reasons for such denial in writing.

6.2Hazardous Substances.
(a)Reportable Uses Require Consent. The term "Hazardous Substance" as used in the Lease shall mean any product, substance, material, or waste, the presence, use, manufacture, disposal, transportation, or release of which, either by itself or in combination with other materials on the Premises, is either: (i) potentially injurious to the public health, safety or welfare, the environment or the Premises, (ii) regulated or monitored by any governmental authority, or (iii) a basis for potential liability of Lessor or any governmental agency or third patty under any applicable statute or common law theory. Hazardous Substances shall include, but not be limited to, hydrocarbons, petroleum, gasoline, and/or crude oil or any products, by products or fractions thereof. Lessee shall not engage in any activity in or on the Premises which constitutes a Reportable use of Hazardous Substances without the express prior written consent of Lessor and timely compliance (at Lessee's expense) with all Applicable Requirements. "Reportable Use" means: (i) the installation or use of any above or below ground storage tank, (ii) the generation, possession, storage, use, transportation, or disposal of a Hazardous Substance that requires a permit from, or with respect to which a report, notice, registration or business plan is required to be filed with any governmental authority, and/or (iii) the presence at the Premises of a Hazardous Substance with respect to which any Applicable Requirements require a notice be given to persons entering or occupying the Premises or 119 of 151

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neighboring properties. Notwithstanding the foregoing, Lessee may use any ordinary and customary materials reasonably required to be used in the normal course of the Agreed Use, so long as such use is in compliance with all Applicable Requirements, is not a Reportable Use, and does not expose the Premises, Building, or neighboring property to any measurable risk of contamination or damage, or expose Lessor to any liability therefor.

Lessor may, in its sole discretion, grant or deny permission for any Reportable Use, or condition its consent for any Reportable Use upon receiving such additional assurances as Lessor reasonably deems necessary to protect itself, the public, the Premises and/or the environment against damage, contamination, injury and/or liability, including, but not limited to, the installation (and removal on or before Lease expiration or termination) of protective modifications (such as concrete encasements), mitigations, and/or increasing the Security Deposit.
(b)Duty to Inform Lessor. If Lessee knows, or has reasonable cause to believe, that a Hazardous Substance has come to be located in, on, under or about the Premises, other than as previously consented to by Lessor, Lessee shall immediately give written notice of such fact to Lessor, and provide Lessor with a copy of any report, notice, claim or other documentation which it has concerning the presence of such Hazardous Substance. (c)Lessee Remediation. Lessee shall not cause or permit any Hazardous Substance to be spilled or released in, on, under, or about the Premises (including through the plumbing or sanitary sewer system) and shall promptly, at Lessee's expense, take all investigatory and/or remedial actions reasonably recommended, whether or not formally ordered or required, for the cleanup of any contamination of, and for the maintenance, security and/or monitoring of the Premises or neighboring properties, that was caused or materially contributed to by Lessee, or pertaining to or involving any Hazardous Substance brought onto the Premises during the term of this Lease, by or for Lessee, or any third party. (d)Lessee Indemnification—Hazardous Substances. Lessee shall indemnify, defend and hold Lessor, its agents, officers, employees, agents and representatives, if any, harmless from and against any and all loss of rents and/or damages, liabilities, judgments, claims, expenses, penalties, and attorneys' and consultants' fees arising out of or involving any Hazardous Substance brought onto the Premises by or for Lessee, or any third party (provided, however, that Lessee shall have no liability under this Lease with respect to underground migration of any Hazardous Substance from areas outside of the Premises).

Lessee's obligations shall include, but not be limited to, the effects of any contamination or injury to person, property or the environment created or suffered by Lessee, and the cost of investigation, removal, remediation, restoration and/or abatement, and shall survive the expiration or termination of this Lease. No termination, cancellation or release agreement entered into by Lessor and Lessee shall release Lessee from its obligations under this Lease with respect to Hazardous Substances, unless specifically so agreed by Lessor in writing at the time of such agreement.
(e)Lessor Indemnification—Hazardous Substances. Lessor and its successors and assigns shall indemnify, defend, reimburse and hold Lessee, its employees and lenders, harmless from and against any and all environmental damages, including the cost of remediation, which existed as a result of Hazardous Substances on the Premises prior to the Commencement Date or which are caused by the gross negligence or willful misconduct of Lessor, its agents or employees. Lessor's obligations, as and when required by the Applicable Requirements, shall include, but not be limited to, the cost of investigation, removal, 120 of 151

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remediation, restoration and/or abatement, and shall survive the expiration or termination of this Lease.
(f)Investigations and Remediations. Lessor shall retain the responsibility and pay for any investigations or remediation measures required by governmental entities having jurisdiction with respect to the existence of Hazardous Substances on the Premises prior to the Commencement Date, unless such remediation measure is required as a result of Lessee's use (including "Alterations", as defined in paragraph 7.3(a)) of the Premises, in which event Lessee shall be responsible for such payment. Lessee shall cooperate fully in any such activities at the request of Lessor, including allowing Lessor and Lessor's agents to have reasonable access to the Premises at reasonable times in order to carry out Lessor's investigative and remedial responsibilities.
(g)Lessor Termination Option. If a Hazardous Substance Condition (as defined in Paragraph 9.1 (e)) occurs during the term of this Lease and Lessee is legally responsible therefor, Lessee shall investigate and remediate the Hazardous Substance Condition as required by the Applicable Requirements. (, If Lessor is legally responsible, Lessor shall take one of the following actions at its option: (i) investigate and remediate such Hazardous Substance Condition, if required, as soon as reasonably possible at Lessor's expense, in which event this Lease shall continue in full force and effect, or (ii) if the estimated cost to remediate such condition exceeds twelve (12) times the then monthly Base Rent or $100,000, whichever is greater, give written notice of termination to Lessee based on the occurrence of such Hazardous Substance Condition. The termination notice shall specify that termination will occur as of sixty( 60) days following the date of such notice. Within thirty (30) days after receipt by Lessor of such notice, Lessee may, within ten (10) days thereafter, give written notice to Lessor of Lessee's commitment to pay the amount by which the cost of the remediation of such Hazardous Substance Condition exceeds an amount equal to twelve (12) times the then monthly Base Rent or $100,000, whichever is greater. Lessee shall provide Lessor with said funds or satisfactory assurance thereof within thirty (30) days following such commitment. In such event, this Lease shall continue in full force and effect, and Lessor shall proceed to make such remediation as soon as reasonably possible after the required funds are available. If Lessee does not give such notice and provide the required funds or assurance thereof within the time provided, this Lease shall terminate as of the date specified in Lessor's notice of termination.

6.3Lessee's Compliance with Applicable Requirements. Except as otherwise provided in this Lease, Lessee shall, at Lessee's sole expense, fully, diligently and in a timely manner, materially comply with all Applicable Requirements, the requirements of any applicable fire insurance underwriter or rating bureau, and the recommendations of Lessor's engineers and/or consultants which relate in any manner to the Premises, without regard to whether said requirements are now in effect or become effective after the Commencement Date. Lessee shall, within ten (10) days after receipt of Lessor's written request, provide Lessor with copies of all permits and other documents, and other information evidencing Lessee's compliance with any Applicable Requirements specified by Lessor, and shall immediately upon receipt, notify Lessor in writing (with copies of any documents involved) of any threatened or actual claim, notice, citation, warning, complaint or report pertaining to or involving the failure of Lessee or the Premises to comply with any Applicable Requirements.

6.4Inspection; Compliance. Lessor and its consultants shall have the right to enter into Premises at any time, in the case of an emergency, and otherwise at reasonable times, for the purpose of inspecting the condition of the Premises and for verifying compliance by Lessee with this Lease. The cost of any such inspections shall be paid by Lessor, unless a violation of 121 of 151

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Applicable Requirements or a Hazardous Substance Condition is found to exist or be imminent, or the inspection is requested or ordered by a governmental authority. In such case, Lessee shall upon request by Lessor, reimburse Lessor for the cost of such inspection, so long as such inspection is reasonably related to the violation or contamination.

7.Maintenance; Repairs, Utility Installations; Trade Fixtures and Alterations.

7.1Lessee's Obligations.
(a) In General. Subject to the provisions of Paragraph 2.2 (Condition), 2.3 (Compliance), 6.3 (Lessee's Compliance with Applicable Requirements), 7.2 Lessor's obligations) W9 (Damage or Destruction), and 14 (Condemnation) Lessee shall, at Lessee's sole expense, keep the Premises, Utility Installations (intended for Lessee's exclusive use, no matter where located), and Alterations in good order, condition and repair (whether or not the portion of the Premises requiring repairs, or the means of repairing the same, are reasonably or readily accessible to Lessee, and whether or not the need for such repairs occurs as a result of Lessee's use, and prior use, the elements or the age of such portion of the Premises), including, but not limited to, all equipment or facilities, such as plumbing, HVAC equipment, electrical, lighting facilities, boilers, pressure vessels, fixtures, interior walls, interior surfaces of exterior walls, ceilings, floors, windows, doors, plate glass, and skylights but excluding any items which are the responsibility of Lessor pursuant to Paragraph 7.2. Lessee, in keeping the Premises in good order, condition and repair, shall exercise and perform good maintenance practices, specifically including the procurement and maintenance of the service contracts required by Paragraph 7.1 (b) below. Lessee's obligations shall include restorations, replacements or renewals when necessary to keep the Premises and all improvements thereon or a part thereof in good order, condition and state of repair. Further, Lessee shall be required to keep the windows of the Premises in a clean state and condition (including mullions) by means of implementing a regular and routine window washing schedule. In addition, Lessee to responsible for the costs associated with all routine repairs and maintenance to items located within the interior of the Premises, in order to keep the Premises in good order, condition, and state of repair.
(b)Service Contracts. Lessee shall, at Lessee's sole expense, procure and maintain service contracts, with copies to Lessor, in customary form and substance for, and with contractors specializing and experienced in the maintenance of equipment and improvements, if any, if and when installed by Lessee on the Premises, with written permission of the Lessor.

However, Lessor reserves the right, upon notice to Lessee, to procure and maintain any or all service contracts, and if Lessor so elects, Lessee shall reimburse Lessor, upon demand, for the cost thereof.
(c)Failure to Perform. If Lessee fails to perform Lessee's obligations under this Paragraph 7.1, Lessor may enter upon the Premises after ten (10) days' prior written notice to Lessee (except in the case of an emergency, in which case no notice shall be required), perform such obligations on Lessee's behalf, and put the Premises in good order, condition and repair, and Lessee shall promptly reimburse Lessor for the cost thereof. (d)Replacement. Subject to Lessee's indemnification of Lessor as set forth in Paragraph 8.7, and without relieving Lessee of liability resulting from Lessee's failure to exercise and perform good maintenance practices, if an item described in Paragraph 7.1 (b) cannot be repaired other than at a cost which is in excess of fifty percent (50%) of the cost of replacing such item, then such item shall be replaced by Lessor, and the cost thereof shall be prorated between the Parties and Lessee shall only be obligated to pay, each month during the 122 of 151

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remainder of the term of this Lease, on the date on which Base Rent is due, an amount equal to the product of multiplying the cost of such replacement by a fraction, the numerator of which is one, and the denominator of which is 144 (i.e. 11144th of the cost per month). Lessee shall pay interest on the unamortized balance at a rate that is commercially reasonable in the judgment of Lessor's accountants. Lessee may, however, prepay its obligation at any time. Notwithstanding this Paragraph 7.1 (d) and pursuant to Paragraphs 7.1 (a) and 7.2 of this Lease, Lessor to be responsible for the costs associated with major repairs for items that would be capitalized based on standard accounting principles, and system failures that may or may not be covered under warranty, so long as same is not caused by the negligence of Lessee.

7.2Lessor's Obligations. Subject to the provisions of Paragraphs 2.2 (Condition),

2.3 (Compliance), 6 (Use), 7.1 (Lessee's Obligations), 9 (Damage or Destruction) and 14 (Condemnation), Lessor, shall keep in good order, condition and repair the foundations, exterior walls, structural condition of interior bearing walls, exterior roof, fire sprinkler system, Common Area fire alarm and/or smoke detection systems, fire hydrants, parking lots, walkways, parkways, driveways, landscaping, fences, signs and utility Installations (as defined in Paragraph 7.3) serving the Common Areas and all parts thereof, as well as providing the services for which there is a Common Area Operating Expense pursuant to Paragraph 1.7.

Lessor shall not be obligated to paint the exterior or interior surfaces of exterior walls nor shall Lessor be obligated to maintain, repair or replace windows, doors or plate glass of the Premises. Lessee expressly waives the benefit of any statute now or hereafter in effect to the extent it is inconsistent with the terms of this Lease.

7.3Utility Installations; Trade Fixtures; Alterations.
(a) Definitions. The term 'Utility Installations" means all floor and window coverings, air lines, power panels, electrical distribution, security and fire protection systems, communication systems, lighting fixtures, HVAC equipment, plumbing, and fencing in or on the Premises. The term "Trade Fixtures" means Lessee's machinery and equipment that can be removed without doing material damage to the Premises. The term "Alterations" means any modification of the improvements, other than Utility Installations or Trade Fixtures, whether by addition or deletion. "Lessee Owned Alterations and/or utility Installations" means Alterations and/or Utility Installations made by Lessee that are not yet owned by Lessor pursuant to Paragraph 7.4(a).
(b)Consent. Lessee shall not make any Alterations or Utility Installation to the Premises without Lessors prior written consent. Lessee may, however, make non-structural Utility Installations to the interior of the Premises (excluding the roof) without Lessor's consent but upon notice to Lessor, as long as they are not visible from the outside, do not involve puncturing, relocating or removing the roof or any existing walls, and the cumulative cost thereof during this Lease does not exceed a sum equal to three (3) months Base Rent in the aggregate or a sum equal to one month's Base Rent in anyone year. Notwithstanding the foregoing, Lessee shall not make or permit any roof penetrations and/or install anything on the roof without the prior written approval of Lessor. Lessor may, as a precondition to granting such approval, require Lessee to utilize a contractor chosen and/or approved by Lessor. Any Alterations or Utility Installations that Lessee shall desire to make and which require the consent of the Lessor shall be presented to Lessor in written form with detailed plans. Consent shall be deemed conditioned upon Lessee's: (i) acquiring alt applicable governmental permits, (ii) furnishing Lessor with copies of both the permits and the plans and specifications prior to commencement of the work, and (iii) compliance with all conditions of said permits and other Applicable Requirements in a prompt and expeditious manner. Any Alterations or utility Installations shall 123 of 151

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be performed in a workmanlike manner with good and sufficient materials. Lessee shall promptly upon completion furnish Lessor with as-built plans and specifications. (c)Indemnification. Lessee shall pay, when due, all claims for labor or materials furnished or alleged to have been furnished to or for Lessee at or for use on the Premises, which claims are or may be secured by any mechanic's or materialman's lien against the Premises or any interest therein. Lessee shall give Lessor not less than ten (10) days' notice prior to the commencement of any work in, on or about the Premises, and Lessor shall have the right to post notices of non-responsibility. If Lessee shall contest the validity of any such lien, claim or demand, then Lessee shall, at its sole expense defend and protect itself, Lessor and the Premises against the same and shall pay and satisfy any such adverse judgment that may be rendered thereon before the enforcement thereof. If Lessor shalt require, Lessee shall furnish a surety bond in an amount equal to 150% of the amount of such contested lien, claim or demand, indemnifying Lessor against liability for the same. If Lessor elects to participate in any such action, Lessee shall pay Lessor's attorneys' fees and costs.

7.4 Ownership; Removal; Surrender; and Restoration.
(a)Ownership. Subject to Lessors right to require removal or elect ownership as hereinafter provided, all Alterations and Utility Installations made by Lessee shall be the property of Lessee, but considered a part of the Premises. Lessor may, at any time, elect in writing to be the owner of all or any specified part of the Lessee Owned Alterations and Utility Installations. Unless otherwise instructed per Paragraph 7.4(b), all Lessee Owned Alterations and Utility Installations shall, at the expiration or termination of this Lease, become the property of Lessor and be surrendered by Lessee with the Premises. (b)Removal. By delivery to Lessee of written notice from Lessor not earlier than 90 and not later than thirty (30) days prior to the end of the term of this Lease, Lessor may require that any or all Lessee Owned Alterations or Utility Installations be removed by the expiration or termination of this Lease. Lessor may require the removal at any time of all or any part of any Lessee's Owned Alterations or Utility installations made without the required consent.
(c)Surrender; Restoration. Lessee shall surrender the Premises by the Expiration Date or any earlier termination date, with all of the improvements, parts and surfaces thereof broom clean and free of debris, and in good operating order, condition and state of repair, ordinary wear and tear excepted. "Ordinary wear and tear" shall not include any damage or deterioration that would have been prevented by good maintenance practice.

Notwithstanding the foregoing, if this Lease is for twelve (12) months or less, then Lessee shall surrender the Premises in the same condition as delivered to Lessee on the Commencement Date with no allowance for ordinary wear and tear. Lessee shall repair any damage occasioned by the installation, maintenance or removal of Trade Fixtures, Lessee owned Alterations and/or Utility Installations, furnishings, and equipment as well as the removal of any storage tank installed by or for Lessee. Lessee shall also completely remove from the Premises any and all Hazardous Substances brought onto the Premises by or for Lessee, or any third party (except Hazardous Substances which were deposited via underground migration from areas outside of the Premises) even if such removal would require Lessee to perform or pay for work that exceeds statutory requirements. Trade Fixtures shall remain the property of Lessee and shall be removed by Lessee. The failure by Lessee to timely vacate the Premises pursuant to this Paragraph 7.4(c) without the express written consent of Lessor shall constitute a holdover under the provisions of Paragraph 26.
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8.Insurance; Indemnity.

8.1Payment of Premiums. The cost of the premiums, if any, for the insurance policies required to be carried by Lessor shall be paid for by the Lessor.

8.2Liability Insurance.
(a) Carried by Lessee. Lessee shall obtain and keep in force a Commercial General Liability policy of insurance protecting Lessee and Lessor as an additional insured against claims for bodily injury, personal injury and property damage based upon or arising out of the ownership, use, occupancy or maintenance of the Premises and all areas appurtenant thereto. The policy shall add the City of Glendale (Lessor), its officers, agents and employees as additional insureds under the policy in the following amounts:

COMMERCIAL GENERAL LIABILITY INSURANCE in an amount not less than Two Million Dollars ($2,000,000) per occurrence for personal injuries, including accidental death, to any one person; property damage insurance in an amount not less than Two Million Dollars ($2,000,000); and subject to the above limits and combined single limit of insurance in an amount not less than Two Million Dollars ($2,000,000).

At all times, the insurance company issuing the policy shall be either an "admitted" insurer in the State of California; shall be domiciled within, and organized under the laws of, a state of the United States; and shall carry an A.M. Best & Company minimum rating of "A:VII", or at all times on the List of Eligible Surplus Line Suppliers (LESLI List) on the current California Department of Insurance website, or be reasonably approved by the Lessor.

All policies shall contain a "Separation of Insured" clause and a "Primary Coverage" clause for any loss arising out of or caused by Lessee's use, occupancy, activities, events, or operations on, in or about the Premises. In addition, the policies shall contain a statement of obligation on the insurance carrier's part to notify Lessor by registered mail, at least thirty (30) days in advance of any policy cancellation, termination or reduction of the stated limits.

Before taking possession of the Premises, Less shall deliver to Lessor a "certificate of insurance" and an "additional insured endorsement" (collectively "evidence of liability insurance"), both documents countersigned by the insurance carrier or its authorized representative, on forms satisfactory to the City Attorney, which set forth this Paragraph 8's insurance provisions. The countersigned certificate, along with the additional insured endorsement, shall state:
"The City of Glendale, its officers, agents and employees are added as additional insureds under this policy. This insurance is primary to the coverage of the City of Glendale. The City of Glendale and any of their insurers shall not be required to contribute to any loss. The insurance shall apply separately to each insured. The issuing company shall mail thirty (30) days advance notice to the City of Glendale of any policy cancellation, termination or reduction of the stated limits." Additionally, the certificate of insurance shall state if any claim has been paid or is currently pending under the policy, and if so, the amount of the claim(s) and the amount of liability limits as lowered by the paid or pending claim(s). Any deductibles or self-insured retentions shall be set forth on the certificate and shall be subject to Lessor's review and approval. 125 of 151

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(b) Carried by Lessor. Lessor shall maintain liability insurance as described in Paragraph 8.3(a), in addition to, and not in lieu of, the insurance required to be maintained by Lessee. Lessee shall not be named as an additional insured therein. Lessor shall have the right to self-insure for the insurance coverage required of Lessor under this Paragraph 8.2.

8.3 Property Insurance -Building, Improvements and Rental Value. (a)Building and Improvements. Lessor shall obtain and keep in force a policy or policies of insurance in the name of Lessor, with loss payable to Lessor, any ground- lessor, and to any Lender insuring loss or damage to the Premises. The amount of such insurance shall be equal to the full replacement cost of the Premises, as the same shall exist from time to time, or the amount required by any Lender, but in no event more than the commercially reasonable and available insurable value thereof. Lessee Owned Alterations and Utility Installations, Trade Fixtures, and Lessee's personal property shall be insured by Lessee under Paragraph 8.4. If the coverage is available and commercially appropriate, such policy or policies shall insure against all risks of direct physical loss or damage (except the perils of flood and/or earthquake unless required by a Lender), including coverage for debris removal and the enforcement of any Applicable Requirements requiring the upgrading, demolition, reconstruction or replacement of any portion of the Premises as the result of a covered loss.

Said policy or policies shall also contain an agreed valuation provision in lieu of any coinsurance clause, waiver of subrogation, and inflation guard protection causing an increase in the annual property insurance coverage amount by a factor of not less than the adjusted U.S. Department of Labor Consumer Price Index for All Urban Consumers for the city nearest to where the Premises are located. If such insurance coverage has a deductible clause, the deductible amount shall not exceed $1,000 per occurrence.
(b)Rental Value. Lessor shall also obtain and keep in force a policy or policies in the name of Lessor with loss payable to Lessor and any Lender, insuring the loss of the full Rent for one year with an extended period of indemnity for an additional 180 days ("Rental Value Insurance"). Said insurance shall contain an agreed valuation provision in lieu of any coinsurance clause, and the amount of coverage shall be adjusted annually to reflect the projected Rent otherwise payable by Lessee, for the next twelve (12) month period. (c)Adjacent Premises. Lessee shall pay for any increase in the premiums for the property insurance of the Building and for the Common Areas or other buildings if said increase is caused by Lessee's acts, omissions, use or occupancy of the Premises. (d)Lessee's Improvements. Since Lessor is the Insuring Party, Lessor shall not be required to insure Lessee Owned Alterations and Utility Installations unless the item in question has become the property of Lessor under the terms of this Lease.

8.4 Lessee's Property.
(a)Property Damage. Lessee shall obtain and maintain insurance coverage on all of Lessee's personal property, Trade Fixtures, and Lessee Owned Alterations and Utility Installations. Such insurance shall be full replacement cost coverage with a deductible of not to exceed $1,000 per occurrence. The proceeds from any such insurance shall be used by Lessee for the replacement of personal property, Trade Fixtures and Lessee Owned Alterations and Utility Installations. Lessee shall provide Lessor with written evidence that such insurance is in force.
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(b) No Representation of Adequate Coverage. Lessor makes no representation that the limits or forms of coverage of insurance specified herein are adequate to cover Lessee's property, business operations or obligations under this Lease.

8.5Insurance Policies. Lessee shall, at least thirty (30) days prior to the expiration of such policies, furnish Lessor with evidence of renewals or "insurance binders" evidencing renewal thereof, or Lessor may order such insurance and charge the cost thereof to Lessee, which amount shall be payable by Lessee to Lessor upon demand. Such policies shall be for a term of at least one year, or the length of the remaining term of this Lease, whichever is less. If either Party shall fail to procure and maintain the insurance required to be carried by it, the other Party may, but shall not be required to, procure and maintain the same.

8.6Waiver of Subrogation. Without affecting any other rights or remedies, Lessee and Lessor each hereby release and relieve the other, and waive their entire right to recover damages against the other, for loss of or damage to its property arising out of or incident to the perils required to be insured against herein. The effect of such releases and waivers is not limited by the amount of insurance carried or required, or by any deductibles applicable hereto.

The Parties agree to have their respective property damage insurance carriers waive any right to subrogation that such companies may have against Lessor or Lessee, as the case may be, so long as the insurance is not invalidated thereby.

8.7Indemnity. Except for Lessor's gross negligence or willful misconduct, to the maximum extent permitted by law, Lessee shall indemnify, protect, defend and hold harmless Lessor and its agents, officers, and employees, and representatives, from and against any and all suits, actions, causes of action, proceedings, decrees, settlements, losses, injuries, claims, loss of rents and/or damages, liens, judgments, penalties, attorneys' and consultants' fees, expenses and/or liabilities, actual or alleged, in contract or in ton; or for bodily injury (including accidental death) personal injury or property damage arising out of, involving, or in connection with, Lessee's use and/or occupancy of the Premises by Lessee. Lessee's obligation to indemnify, defend, and hold Lessor harmless will remain in effect and will be binding upon Lessee whether the liability, or the expense, or both, accrues—or is discovered—before or after this Lease's expiration, cancellation, or termination. This Paragraph 8.7 is separate and independent from the insurance provisions in Paragraphs 8.2 — 8.6, are neither limited to nor capped at the coverage amounts specified under said insurance provisions, and do not limit, in any way, the applicability, scope, or obligations of said insurance provisions. If any action or proceeding is brought against Lessor by reason of any of the foregoing matters, Lessee shall upon notice defend the same at Lessee's expense by counsel reasonably satisfactory to Lessor and Lessor shall cooperate with Lessee in such defense. Lessor need not have first paid any such claim in order to be defended or indemnified.

8.8Exemption of Lessor from Liability. Lessor shall not be liable for injury or damage to the person or goods, wares, merchandise or other property of Lessee, Lessee's employees, contractors, invitees, customers, or any other person in or about the Premises, whether such damage or injury is caused by or results from fire, steam, electricity, gas, water or rain, or from the breakage, leakage, obstruction or other defects of pipes, fire sprinklers, wires, appliances, plumbing, HVAC or lighting fixtures, or from any other cause whatsoever, whether said injury or damage results from conditions arising upon the Premises or upon other portions of the Building, or from other sources or places. Lessor shall not be liable for any damages arising from any act or negligence of any other tenant of Lessor nor from the failure of Lessor to enforce the provisions of any other lease in the Building. Notwithstanding Lessors negligence or 127 of 151

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breach of this Lease, Lessor shall under no circumstances be liable for injury to Lessee's business or for any loss of income or profit therefrom.

9.Damage or Destruction.

9.1Definitions.
(a) "Premises Partial Damage" shall mean damage or destruction to the improvements on the Premises, other than Lessee Owned Alterations and Utility Installations, which can reasonably be repaired in three (3) months or less from the date of the damage or destruction, and the cost thereof does not exceed a sum equal to six (6) month's Base Rent.

Lessor shall notify Lessee in writing within thirty (30) days from the date of the damage or destruction as to whether or not the damage is Partial or Total. (b) "Premises Total Destruction" shall mean damage or destruction to the improvements on the Premises, other than Lessee Owned Alterations and Utility Installations and Trade Fixtures, which cannot reasonably be repaired in three (3) months or less from the date of the damage or destruction and/or the cost thereof exceeds a sum equal to six (6) month's Base Rent. Lessor shall notify Lessee in writing within thirty (30) days from the date of the damage or destruction as to whether or not the damage is Partial or Total. (c) "Insured Loss" shall mean damage or destruction to improvements on the Premises, other than Lessee Owned Alterations and Utility Installations and Trade Fixtures, which was caused by an event required to be covered by the insurance described in Paragraph

8.3(a), irrespective of any deductible amounts or coverage limits involved. (d) "Replacement Cost" shall mean the cost to repair or rebuild the improvements owned by Lessor at the time of the occurrence to their condition existing immediately prior thereto, including demolition, debris removal and upgrading required by the operation of Applicable Requirements, and without deduction for depreciation. (e) "Hazardous Substance Condition" shall mean the occurrence or discovery of a condition involving the presence of, or a contamination by, a Hazardous Substance as defined in Paragraph 6.2(a), in, on, or under the Premises.

9.2Partial Damage -Insured Loss. If a Premises Partial Damage that is an Insured Loss occurs, then Lessor shall, at Lessor's expense, repair such damage (but not Lessee's Trade Fixtures or Lessee Owned Alterations, and utility Installations) as soon as reasonably possible and this Lease shall continue in full force and effect; provided, however, that Lessee shall, at Lessor's election, make the repair of any damage or destruction the total cost to repair of which is $5,000 or less, and, in such event, Lessor shall make any applicable insurance proceeds available to Lessee on a reasonable basis for that purpose. Notwithstanding the foregoing, if the required insurance was not in force or the insurance process are not sufficient to effect such repair, the Insuring Party shall promptly contribute the shortage in proceeds as and when required to complete said repairs. In the event, however such shortage was due to the fact that, by reason of the unique nature of the improvements, full replacement cost Insurance coverage was not commercially reasonable and available Lessor shall have no obligation to pay for the shortage in insurance proceeds or to fully restore the unique aspects of the Premises unless Lessee provides Lessor with the funds to cover same, or adequate assurance thereof, within ten (10) days, following receipt of written notice of such shortage and request therefore. If Lessor receives said funds or adequate assurance thereof within said ten 128 of 151

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(10) day period, the party responsible for making the repairs shall complete them as soon as reasonably possible and this Lease shall remain in full force and effect. If such funds or assurance are not received, Lessor may nevertheless elect by written notice to Lessee within ten (10) days thereafter to: (i) make such restoration and repair as is commercially reasonable with Lessor paying any shortage in proceeds, in which case this Lease shall remain in full force and effect, or (ii) have this Lease shall terminate three (3) days thereafter. Lessee shall not be entitled to reimbursement of any funds contributed by Lessee to repair any such damage or destruction. Premises Partial Damage due to flood or earthquake shall be subject to Paragraph

9.3, notwithstanding that there may be some insurance coverage, but the net proceeds of any such insurance shall be made available for the repairs if made by either Party.

9.3Partial Damage - Uninsured Loss. If a Premises Partial Damage that is not an Insured Loss occurs, unless caused by a negligent or willful act of Lessee (in which event Lessee shall make the repairs at Lessee's expense), Lessor may either: (i) repair such damage as soon as reasonably possible at Lessor's expense, in which event-this Lease shall continue in full force and effect, or (ii) terminate this Lease by giving written Notice to Lessee within thirty (30) days after receipt by Lessor of knowledge of the occurrence of such damage. Such termination shall be effective sixty (60) days following the date of such notice. In the event Lessor elects to terminate this Lease, Lessee shall have the right within ten (10) days after receipt of the termination notice to give written notice to Lessor of Lessee's commitment to pay for the repair of such damage without reimbursement from Lessor. Lessee shall provide Lessor with said funds or satisfactory assurance thereof within thirty (30) days after making such commitment. In such event this Lease shall continue in full force and effect, and Lessor shall proceed to make such repairs as soon as reasonably possible after the required funds are available. If Lessee does not make the required commitment, this Lease shall terminate as of the date specified in the termination notice.

9.4 Total Destruction. Notwithstanding any other provision hereof, if a Premises Total Destruction occurs, this Lease shall terminate sixty (60) days following such Total Destruction. If the Total Destruction was caused by the gross negligence or willful misconduct of Lessee, Lessor shall have the right to recover Lessor's damages from Lessee, except as provided in Paragraph 8.6.

9.5 Damage Near End of Term. If at any time during the last six (6) months of this Lease there is damage for which the cost to repair exceeds one month's Base Rent, whether or not an Insured Loss, Lessor may terminate this Lease effective sixty (60) days following the date of occurrence of such damage by giving a written termination notice to Lessee within thirty (30) days after the date of occurrence of such damage.

9.6 Abatement of Rent; Lessee's Remedies.
(a)Abatement. In the event of Premises Partial Damage or Premises Total Destruction or a Hazardous Substance Condition for which Lessee is not responsible under this Lease, the Rent payable by Lessee for the period required for the repair, remediation or restoration of such damage shall be abated in proportion to the degree to which Lessee's use of the Premises is impaired, but not to exceed the proceeds received from the Rental Value insurance. All other obligations of Lessee hereunder shall be performed by Lessee, and Lessor shall have no liability for any such damage, destruction, remediation, repair or restoration except as provided herein.
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(b)Remedies. If Lessor shall be obligated to repair or restore the Premises and does not commence, in a substantial and meaningful way, such repair or restoration within ninety (90) days after such obligation shall accrue, Lessee may, at any time prior to the commencement of such repair or restoration, give written notice to Lessor and to any Lenders of which Lessee has actual notice, of Lessee's election to terminate this Lease on a date not less than sixty (60) days following the giving of such notice. If Lessee gives such notice and such repair or restoration is not commenced within thirty (30) days thereafter, this Lease shall terminate as of the date specified in said notice. If the repair or restoration is commenced within such thirty (30) days, this Lease shall continue in full force and effect. For purposes of this section, "commence" means either the unconditional authorization of the preparation of the required plans, or the beginning of the actual work on the Premises, whichever first occurs.

9.7 Termination; Advance Payments. Upon termination of this Lease pursuant to Paragraph 6.2(g) or Paragraph 9, an equitable adjustment shall be made concerning advance Base Rent and any other advance payments made by Lessee to Lessor. Lessor shall, in addition, return to Lessee so much of Lessee's Security Deposit as has not been, or is not then required to be, used by Lessor.

9.8 Waive Statutes. Lessor and Lessee agree that the terms of this Lease shall govern the effect of any damage to or destruction of the Premises with respect to the termination of this Lease and hereby waive the provisions of any present or future statute to the extent inconsistent herewith.

10.Real Property Taxes.

10.1Definition. As used herein, the term "Real Property Taxes" means any form of assessment; real estate, general, special, ordinary or extraordinary, or rental levy or tax (other than inheritance, personal income or estate taxes); improvement bond; and/or license fee imposed upon or levied against any legal or equitable interest of Lessor in the Premises, Lessor's right to other income there from, and/or Lessors business of leasing, by any authority having the direct or indirect power to tax and where the funds are generated with reference to the Premises address and where the proceeds so generated are to be applied by the city, county or other local taxing authority of a jurisdiction within which the Premises is located. The term "Real Property Taxes" also means include any tax, fee, levy, assessment or charge, or any increase therein, imposed by reason of events occurring during the term of this Lease, including but not limited to, a change in the ownership of the Premises or any portion thereof or a change in the improvements thereon. In calculating Real Property Taxes for any calendar year, the Real Property Taxes for any real estate tax year shall be included in the calculation of Real Property Taxes for such calendar year based upon the number of days which such calendar year and tax year have in common.

10.2Payment of Taxes. Lessor shall pay the Real Property Taxes applicable to this Lease.

10.3Additional Improvements. Lessee shall pay the entirety of any increase in Real Property Taxes if assessed solely by reason of Alterations, Trade Fixtures or Utility Installations placed upon the Premises by Lessee or at Lessee's request for the enjoyment of other lessees.

10.4Joint Assessment. If the Building is not separately assessed, Real Property Taxes allocated to the Building shall be an equitable proportion of the Rea' Property Taxes for all of the land and improvements included within the tax parcel assessed, such proportion to be determined by Lessor from the respective valuations assigned in the assessors work sheets or 130 of 151

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such other information as may be reasonably available. Lessor's reasonable determination thereof, in good faith, shall be conclusive.

10.5Personal Property Taxes. Lessee shall pay prior to delinquency all taxes assessed against and levied upon Lessee Owned Alterations and Utility Installations, Trade Fixtures, furnishings, equipment and all personal property of Lessee contained in the Premises.

When possible, Lessee shall cause its Lessee Owned Alterations and Utility Installations, Trade Fixtures, furnishings, equipment and all other personal property to be assessed and billed separately from the real property of Lessor. If any of Lessee's said property shall be assessed with Lessor's real property, Lessee shall pay Lessor the taxes attributable to Lessee's property within ten (10) days after receipt of a written statement setting forth the taxes applicable to Lessee's property.

11.Utilities. Lessee shall pay for all water, gas, heat, light, power, telephone, trash disposal and other utilities and services supplied to the Premises, together with any taxes thereon. In addition to the provisions of Paragraph 4.2, if at any time in Lessor's sole judgment, Lessor determines that Lessee is using a disproportionate amount of water, electricity or other commonly metered utilities, or that Lessee is generating such a large volume of trash as to require an increase in the size of the dumpster and/or an increase in the number of times per month that the dumpster is emptied, then Lessor may increase Lessee's Base Rent by an amount equal to such increased costs.

12.Assignment and Subletting.

12.1Lessor's Consent Required.
(a) Lessee shall not voluntarily or by operation of law assign, transfer, mortgage or encumber (collectively, "assign or assignment") or sublet all or any part of Lessee's interest in this Lease or in the Premises without Lessor's prior written consent. Lessee shall not have the right to assign or sublease all or any portion of Lessee's interest in this Lease or in the Premises.
(b) A change in the control of Lessee shall constitute an assignment requiring consent.

12.2Terms and Conditions Applicable to Assignment and Subletting. (a) Regardless of Lessors consent, no assignment or subletting shall: (i) be effective without the express written assumption by such assignee or sublessee of the obligations of Lessee under this Lease, (ii) release Lessee of any obligations hereunder, or (iii) alter the primary liability of Lessee for the payment of Rent or for the performance of any other obligations to be performed by Lessee.
(b) Lessor may accept Rent or performance of Lessee's obligations from any person other than Lessee pending approval or disapproval of an assignment. Neither a delay in the approval or disapproval of such assignment nor the acceptance of Rent or performance shall constitute a waiver or estoppel of Lessor's right to exercise its remedies against Lessee for Default or Breach of this Lease.
(c) Lessor's consent to any assignment or subletting shall not constitute consent to any subsequent assignment or subletting.
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(d) In the event of any Default or Breach by Lessee, Lessor may proceed directly against Lessee, any Guarantors or anyone else responsible for the performance of Lessee's obligations under this Lease, including any assignee or sublessee, without first exhausting Lessors remedies against any other person or entity responsible therefor to Lessor, or any security held by Lessor.
(e) Each request for consent to an assignment or subletting shall be in writing, accompanied by information relevant to Lessor's determination as to the legal, financial and operational responsibility and appropriateness of the proposed assignee or sublessee, including but not limited to the intended use and/or required modification of the Premises, if any, together with a fee of $1,000 or ten percent (10%) of the current monthly Base Rent applicable to the portion of the Premises which is the subject of the proposed assignment or sublease, whichever is greater, as consideration for Lessor's considering and processing said request.

Lessee agrees to provide Lessor with such other or additional information and/or documentation as may be reasonably requested.
(f) Any assignee of, or sublessee under, this Lease shall, by reason of accepting such assignment or entering into such sublease, be deemed to have assumed and agreed to conform and comply with each and every term, covenant, condition and obligation herein to be observed or performed by Lessee during the term of said assignment or Sublease, other than such obligations as are contrary to or inconsistent with provisions of an assignment or sublease to which Lessor has specifically consented to in writing. (g) Lessors consent to any assignment or subletting shall not transfer to the assignee or sublessee any option that Lessor may grant in its sole and absolute discretion to extend this Lease unless Lessor consents in writing to such transfer in advance of such assignment or subletting (see Paragraph 39.2), and Lessor has approved assignee's or sublessee's proof of insurance and endorsement thereof, submitted for assignee in conformance with Paragraph 8.

12.3Additional Terms and Conditions Applicable to Subletting. The following terms and conditions shall apply to any subletting by Lessee of all or any part of the Premises and shall be deemed included in all subleases under this Lease whether or not expressly incorporated therein:
(a) Lessee hereby assigns and transfers to Lessor all of Lessee's interest in all Rent payable on any sublease, and Lessor may collect such Rent and apply same toward Lessee's obligations under this Lease; provided, however, that until a Breach shall occur in the performance of Lessee's obligations, Lessee may collect said Rent. Lessor shall neither, by reason of the foregoing or any assignment of such sublease, nor by reason of the collection of Rent, be deemed liable to the sublessee for any failure of Lessee to perform and comply with any of Lessee's obligations to such sublessee. Lessee hereby irrevocably authorizes and directs any such sublessee, upon receipt of a written notice from Lessor stating that a Breach exists in the performance of Lessee's obligations under this Lease, to pay to Lessor all Rent due and to become due under the sublease. Sublessee shall rely upon any such notice from Lessor and shall pay all Rents to Lessor without any obligation or right to inquire as to whether such Breach exists, notwithstanding any claim from Lessee to the contrary. (b) In the event of a Breach by Lessee, Lessor may, at its option, require sublessee to attorn to Lessor, in which event Lessor shall undertake the obligations of the 132 of 151

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sublessor under such sublease from the time of the exercise of said option to the expiration of such sublease; provided, however, Lessor shall not be liable for any prepaid rents or security deposit paid by such sublessee to such sublessor or for any prior Defaults or Breaches of such sublessor.
(c) Any matter requiring the consent of the sublessor under a sublease shall also require the consent of Lessor.
(d) No sublessee shall further assign or sublet all or any part of the Premises without Lessor's prior written consent.
(e) Lessor shall deliver a copy of any notice of Default or Breach by Lessee to the sublessee, who shall have the right to cure the Default of Lessee within the grace period, if any, specified in such notice. The sublessee shall have a right of reimbursement and offset from and against Lessee for any such Defaults cured by the sublessee.

13.Default; Breach; Remedies.

13.1Default; Breach. "Default" means a failure by the Lessee to comply with or perform any of the terms, covenants, conditions or Rules and Regulations under this Lease. "Breach" means the occurrence of one or more of the following Defaults, and the failure of Lessee to cure such Default within any applicable grace period:
(a) The abandonment of the Premises; or the vacating of the Premises without providing a commercially reasonable level of security, or where the required insurance coverages described in Paragraph 8 is jeopardized as a result thereof, or without providing reasonable assurances to minimize potential vandalism.
(b) The failure of Lessee to make any payment of Rent or any Security Deposit required to be made by Lessee hereunder, whether to Lessor or to a third party, when due, to provide the required evidence of insurance or surety bond, or to fulfill any obligation under this Lease which endangers or threatens life or property, where such failure continues for a period of 3 business days following written notice to Lessee. (c) The failure by Lessee to provide (i) reasonable written evidence of compliance with Applicable Requirements, (ii) the service contracts, (iii) the rescission of an unauthorized assignment or subletting, (iv) an Estoppel Certificate, (v) a requested subordination, (vi) evidence concerning any guaranty and/or Guarantor, (vii) any document requested under Paragraph 41 , or (viii) any other documentation or information which Lessor may reasonably require of Lessee under the terms of this Lease, where any such failure continues for a period of 10 days following written notice to Lessee. (d) A Default by Lessee as to the terms, covenants, conditions or provisions of this Lease, or of the rules adopted under Paragraph 2.9 hereof, other than those described in subparagraphs 13.1 (a), (b) or (c), above, where such Default continues for a period of thirty (30) days after written notice; provided, however, if the nature of Lessee's Default is such that more than thirty (30) days are reasonably required for its cure, then it shall not be deemed to be a Breach if Lessee commences such cure within said thirty (30) day period and thereafter diligently prosecutes such cure to completion.
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(e) The occurrence of any of the following events: (i) the making of any general arrangement or assignment for the benefit of creditors; (ii) becoming a "debtor" as defined in 11 U.S.C. S 101 or any successor statute thereto (unless, in the case of a petition filed against Lessee, the same is dismissed within sixty (60) days); (iii) the appointment of a trustee or receiver to take possession of substantially all of Lessee's assets located at the Premises or of Lessee's interest in this Lease, where possession is not restored to Lessee within three (3) days; or (iv) the attachment, execution or other judicial seizure of substantially all of Lessee's assets located at the Premises or of Lessee's interest in this Lease, where such seizure is not discharged within thirty (30) days; provided, however, in the event that any provision of this subparagraph (e) is contrary to any applicable law, such provision shall be of no force or effect, and not affect the validity of the remaining provisions. (f) The discovery that any financial statement of Lessee or of any Guarantor given to Lessor was materially false.
(g) If the performance of Lessee's obligations under this Lease is guaranteed: (i) the death of a Guarantor, (ii) the termination of a Guarantors liability with respect to this Lease other than in accordance with the terms of such guaranty, (iii) a Guarantor's becoming insolvent or the subject of a bankruptcy filing, (iv) a Guarantor's refusal to honor the guaranty, or (v) a Guarantor's breach of its guaranty obligation on an anticipatory basis, and Lessee's failure, within sixty (60) days following written notice of any such event, to provide written alternative assurance or security, which, when coupled with the then existing resources of Lessee, equals or exceeds the combined financial resources of Lessee and the Guarantors that existed at the time of execution of this Lease.

13.2Remedies. If Lessee fails to perform any of its affirmative duties or obligations, within ten (10) days after written notice (or in case of an emergency, without notice), Lessor may, at its option, perform such duty or obligation on Lessee's behalf, including but not limited to the obtaining of reasonably required bonds, insurance policies, or governmental licenses, permits or approvals. The costs and expenses of any such performance by Lessor shall be due and payable by Lessee upon receipt of invoice therefor. If any check given to Lessor by Lessee shall not be honored by the bank upon which it is drawn, Lessor, at its option, may require all future payments to be made by Lessee to be by cashier's check. In the event of a Breach, Lessor may, with or without further notice or demand, and without limiting Lessor in the exercise of any right or remedy which Lessor may have by reason of such Breach:
(a) Terminate Lessee's right to possession of the Premises by any lawful means, in which case this Lease shall terminate and Lessee shall immediately surrender possession to Lessor. In such event Lessor shall be entitled to recover from Lessee: (i) the unpaid Rent which had been earned at the time of termination: (ii) the worth at the time of award of the amount by which the unpaid rent which would have been earned after termination until the time of award exceeds the amount of such rental loss that the Lessee proves could have been reasonably avoided; (iii) the worth at the time of award of the amount by which the unpaid rent for the balance of the term after the time of award exceeds the amount of such rental loss that the Lessee proves could be reasonably avoided; and (iv) any other amount necessary to compensate Lessor for all the detriment proximately caused by the Lessee's failure to perform its obligations under this Lease or which in the ordinary course of things would be likely to result therefrom, including but not limited to the cost of recovering possession of the Premises, expenses of reletting, including necessary renovation and alteration of the Premises, reasonable attorney's fees, and that portion of any leasing commission paid by Lessor in connection with this Lease applicable to the unexpired term of this Lease. The worth at the time 134 of 151

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of award of the amount referred to in provision (iii) of the immediately preceding sentence shall be computed by discounting such amount at the discount rate of the Federal Reserve Bank of the District within which the Premises are located at the time of award plus one percent. Efforts by Lessor to mitigate damages caused by Lessee's Breach of this Lease shall not waive Lessor's right to recover damages under Paragraph 12. If termination of this Lease is obtained through the provisional remedy of unlawful detainer, Lessor shall have the right to recover in such proceeding any unpaid Rent and damages as are recoverable therein, or Lessor may reserve the right to recover all or any part thereof in a separate suit. If a notice and grace period required under Paragraph 13.1 was not previously given, a notice to pay rent or quit, or to perform or quit given to Lessee under the unlawful detainer statute shall also constitute the notice required by Paragraph 13.1. In such case, the applicable grace period required by Paragraph 13.1 and the unlawful detainer statute shall run concurrently, and the failure of Lessee to cure the Default within the greater of the two such grace periods shall constitute both an unlawful detainer and a Breach of this Lease entitling Lessor to the remedies provided for in this Lease and/or by said statute.
(b) Continue the Lease and Lessee's right to possession and recover the Rent as it becomes due, in which event Lessee may sublet or assign, subject only to reasonable limitations. Acts of maintenance, efforts to relet, and/or the appointment of a receiver to protect the Lessor's interests, shall not constitute a termination of the Lessee's right to possession. (c) Pursue any other remedy now or hereafter available under-the-laws or judicial decisions of the state wherein the Premises is located. The expiration or termination of this Lease and/or the termination of Lessee's right to possession shall not relieve Lessee from liability under any indemnity provisions of this Lease as to matters occurring or accruing during the term hereof or by reason of Lessee's occupancy of the Premises.

13.3Inducement Recapture. Any agreement for free or abated rent or other charges, or for the giving or paying by Lessor to or for Lessee of any cash or other bonus, inducement or consideration for Lessee's entering into this Lease, all of which concessions are hereinafter referred to as "Inducement Provisions", shall be deemed conditioned upon Lessee's full and faithful performance of all of the terms, covenants and conditions of this Lease. Upon Breach of this Lease by Lessee, any such Inducement Provision shall automatically be deemed deleted from this Lease and of no further force or effect, and any rent, other charge, bonus, inducement or consideration theretofore abated, given or paid by Lessor under such an Inducement Provision shall be immediately due and payable by Lessee to Lessor, notwithstanding any subsequent cure of said Breach by Lessee. The acceptance by Lessor of rent or the cure of the Breach which initiated the operation of this paragraph shall not be deemed a waiver by Lessor of the provisions of this paragraph unless specifically so stated in writing by Lessor at the time of such acceptance.

13.4Late Charges. Lessee hereby acknowledges that late payment by Lessee of Rent will cause Lessor to incur costs not contemplated by this Lease, the exact amount of which will be extremely difficult to ascertain. Such costs include, but are not limited to, processing and accounting charges, and late charges which may be imposed upon Lessor by any Lender.

Accordingly, if any Rent shall not be received by Lessor within five (5) days after such amount shall be due, then, without any requirement of notice to Lessee, Lessee shall pay to Lessor a one-time late charge equal to ten percent (10%) of each such overdue amount or $100, whichever is greater.

The parties hereby agree that such late charge represents a fair and reasonable estimate of the costs Lessor will incur by reason of such late payment. Acceptance of such late 135 of 151

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charge by Lessor shall in no event constitute a waiver of Lessee's Default or Breach with respect to such overdue amount, nor prevent the exercise of any of the other rights and remedies granted hereunder. In the event that a late charge is payable hereunder, whether or not collected, for three consecutive installments of Base Rent, then notwithstanding any provision of this Lease to the contrary, Base Rent shall, at Lessor's option, become due and payable quarterly in advance.

13.5Interest. Any monetary payment due Lessor hereunder, other than late charges, not received by Lessor, when due as to scheduled payments (such as Base Rent) or within thirty (30) days following the date on which it was due for non-scheduled payment, shall bear interest from the date when due, as to scheduled payments, or the 31 st day after it was due as to non-scheduled payments. The interest ("Interest") charged shall be equal to the prime rate reported in the Wall Street Journal as published closest prior to the date when due plus four percent (4%) but shall not exceed the maximum rate allowed by law. Interest is payable in addition to the potential late charge provided for in Paragraph 13.4.

13.6Breach by Lessor.
(a)Notice of Breach. Lessor shall not be deemed in breach of this Lease unless Lessor fails within a reasonable time to perform an obligation required to be performed by Lessor. For purposes of this Paragraph, a reasonable time shall in no event be less than thirty (30) days after receipt by Lessor, of written notice specifying wherein such obligation of Lessor has not been performed; provided, however, that if the nature of Lessor's obligation is such that more than thirty (30) days are reasonably required for its performance, then Lessor shall not be in breach if performance is commenced within such thirty (30) day period and thereafter diligently pursued to completion.
(b)Performance by Lessee on Behalf of Lessor. In the event that neither Lessor cures said breach within thirty (30) days after receipt of said notice, or if having commenced said cure they do not diligently pursue it to completion, then Lessee may elect to cure said breach at Lessee's expense and offset from Rent an amount equal to the greater of one month's Base Rent or the Security Deposit, and to pay an excess of such expense under protest, reserving Lessee's right to reimbursement from Lessor. Lessee shall document the cost of said cure and supply said documentation to Lessor.

14.Condemnation. If the Premises or any portion thereof are taken under the power of eminent domain or sold under the threat of the exercise of said power (collectively "Condemnation"), this Lease shall terminate as to the part taken as of the date the condemning authority takes title or possession, whichever first occurs. If more than ten percent (10%) of the floor area of the Premises, is taken by Condemnation, Lessee may, at Lessee's option, to be exercised in writing within ten (10) days after Lessor shall have given Lessee written notice of such taking (or in the absence of such notice, within ten (10) days after the condemning authority shall have taken possession) terminate this Lease as of the date the condemning authority takes such possession. If Lessee does not terminate this Lease in accordance with the foregoing, this Lease shall remain in full force and effect as to the portion of the Premises remaining, except that the Base Rent shall be reduced in proportion to the reduction in utility of the Premises caused by such Condemnation. Condemnation awards and/or payments shall be the property of Lessor, whether such award shall be made as compensation for diminution in value of the leasehold, the value of the part taken, or for severance damages; provided, however, that Lessee shall be entitled to any compensation for Lessee's relocation expenses, loss of business goodwill and/or Trade Fixtures, without regard to whether or not this Lease is 136 of 151

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terminated pursuant to the provisions of this Paragraph 14. All Alterations and Utility Installations made to the Premises by Lessee, for purposes of Condemnation only, shall be considered the property of the Lessee and Lessee shall be entitled to any and all compensation which is payable therefor. In the event that this Lease is not terminated by reason of the Condemnation, Lessor shall repair any damage to the Premises caused by such Condemnation.

15.Brokerage Fees. The Parties agree that there are no brokerage fees involved in this transaction.

16.Estoppel Certificates.
(a) Each Party (as "Responding Party") shall within ten (10) days after written notice from the other Party (the "Requesting Party") execute, acknowledge and deliver to the Requesting Party an estoppel statement in recordable form certifying that the Lease is unmodified and is in full force and effect (if such is the case), certifying the commencement and termination dates of the Lease Term, certifying that there has been no assignment or sublease of this Lease, certifying that there are no uncured defaults in the Requesting Party's performance, and that there are no defenses or offsets hereto (or stating those claim), and containing such other information as may be reasonably requested by the Requesting Party (the "Estoppel Certificate").
(b) If the Responding Party shall fail to execute or deliver the EstoppelCertificate within such ten (10) day period, the Requesting Party may execute an Estoppel Certificate stating that: (i) the Lease is in full force and effect without modification except as may be represented by the Requesting Party, (ii) there are no uncured defaults in the Requesting Party's performance, and (iii) if Lessor is the Requesting Party, not more than one month's rent has been paid in advance. Prospective purchasers and encumbrances may rely upon the Requesting Party's Estoppel Certificate, and the Responding Party shall be estopped from denying the truth of the facts contained in said Certificate. (c) If Lessor desires to finance, refinance, or sell the Premises, or any part thereof, Lessee and ail Guarantors shall offer to any potential lender or purchaser designated by Lessor such financial statements as may be reasonably required by such lender or purchaser, including but not limited to Lessee's financial statements for the past three (3) years. All such financial statements shall be received by Lessor and such lender or purchaser in confidence and shall be used only for the purposes herein set forth.

17.Definition of Lessor. The term "Lessor" as used herein means the owner or owners at the time in question of the fee title to the Premises, or, if this is a sublease, of the Lessee's interest in the prior lease. In the event of a transfer of Lessor's title or interest in the Premises or this Lease, Lessor shall deliver to the transferee or assignee (in cash or by credit) any unused Security Deposit held by Lessor. upon such transfer or assignment and delivery of the Security Deposit, as aforesaid, the prior Lessor shall be relieved of all liability with respect to the obligations and/or covenants under this Lease thereafter to be performed by the Lessor. Subject to the foregoing, the obligations and/or covenants in this Lease to be performed by the Lessor shall be binding only upon the Lessor as hereinabove defined. Notwithstanding the above, and subject to the provisions of Paragraph 20 herein below, the original Lessor under this Lease and all subsequent holders of the Lessor's interest in this Lease shall remain liable and responsible with regard to the potential duties and liabilities of Lessor pertaining to Hazardous Substances as outlined in Paragraph 6.2 herein above.
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18.Severability. The invalidity of any provision of this Lease, as determined by a court of competent jurisdiction, shall in no way affect the validity of any other provision hereof.

19.Days. Unless otherwise specifically indicated to the contrary, the word "days" as used in this Lease shall mean and refer to calendar days.

20.Limitation on Liability. Subject to the provisions of Paragraph 17 herein above, the obligations of Lessor under this Lease shall not constitute personal obligations of Lessor, its officers, agents, representatives or employees, or any one of them. Lessee shall look to the Premises, and to no other assets of Lessor, for the satisfaction of any liability of Lessor with respect to this Lease, and shall not seek recourse against Lessor, its officers, agents, representatives or employees, or any one of them any of their personal assets for such satisfaction.

21.Time of Essence. Time is of the essence with respect to the performance of all obligations to be performed or observed by the Parties under this Lease.

22.No Prior or Other Agreements. This Lease contains all agreements between the Parties with respect to any matter mentioned herein, and no other prior or contemporaneous agreement or understanding shall be effective. Lessor and Lessee each represents and warrants that it has made, and is relying solely upon, its own investigation as to the nature, quality, character and financial responsibility of the other Party to this Lease and as to the use, nature, quality and character of the Premises.

23.Notices.

23.1Notice Requirements. All notices required or permitted by this Lease or applicable law shall be in writing and may be delivered in person (by hand or by courier) or may be sent by regular, certified or registered mail or U.S. Postal Service Express Mail, with postage prepaid, or by facsimile transmission, and shall be deemed sufficiently given if served in a manner specified in this Paragraph 23. The addresses noted adjacent to a Party's signature on this Lease shall be that Party's address for delivery or mailing of notices. Either Party may by written notice to the other specify a different address for notice, except that upon Lessee's taking possession of the Premises, the Premises shall constitute Lessee's address for notice. A copy of all notices to Lessor shall be concurrently transmitted to such party or parties as such addresses as Lessor may from time to time hereafter designate in writing.

23.2Date of Notice. Any notice sent by registered or certified mail, return receipt requested, shall be deemed given on the date of delivery shown on the receipt card, or if no delivery date is shown, the postmark thereon. If sent by regular mail the notice shall be deemed given 48 hours after the same is addressed as required herein and mailed with postage prepaid.

Notices delivered by United States Express Mail or overnight courier that guarantee next day delivery shall be deemed given twenty-four (24) hours after delivery of the same to the Postal Service or courier. Notices transmitted by facsimile transmission or similar means shall be deemed delivered upon telephone confirmation of receipt (confirmation report from fax machine is sufficient), provided a copy is also delivered via delivery or mail. If notice is received on a Saturday, Sunday or legal holiday, it shall be deemed received on the next business day.

24.Waivers. No waiver by Lessor of the Default or Breach of any term, covenant or condition hereof by Lessee, shall be deemed a waiver of any other tern, covenant or condition hereof, or of any subsequent Default or Breach by Lessee of the same or of any other term, 138 of 151

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covenant or condition hereof. Lessor's consent to, or approval of, any act shall not be deemed to render unnecessary the obtaining of Lessors consent to, or approval of, any subsequent or similar act by Lessee, or be construed as the basis of an estoppel to enforce the provision or provisions of this Lease requiring such consent. The acceptance of Rent by Lessor shall not be a waiver of any Default or Breach by Lessee. Any payment by Lessee may be accepted by Lessor on account of moneys or damages due Lessor, notwithstanding any qualifying statements or conditions made by Lessee in connection therewith, which such statements and/or conditions shall be of no force or effect whatsoever unless specifically agreed to in writing by Lessor at or before the time of deposit of such payment.

25.No Discrimination. This Lease prohibits leasing of the Premises on the basis of sex, marital status, race, color, creed, religion, ancestry and national origin of any person. Therefore, the following shall constitute the provision incorporated into the terms and conditions of this Lease:

The Lessee herein covenants by and for itself, its heirs, executors, administrator, assigns, and all persons claiming under or through it, and this Lease is made and accepted upon and subject to the following conditions:

That there shall be no discrimination against or segregation of any person or group of person on account of sex, marital status, race, color, creed, religion, national origin or ancestry of the lease, subleasing, transferring, use occupancy, tenure or enjoyment of the Premises herein leased nor shall the Lessee itself, or any person claiming under or through it establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sublessee, subtenants or vendees in the Premises herein leased.

Further, Lessee understands that the Premises are part of a project located in the City of Glendale ("City") and that the City will have the approval over any City permits required for Lessee use and occupancy of the Premises.

26.No Right to Holdover. Lessee has no right to retain possession of the Premises of any part thereof beyond the expiration or termination of this Lease. In the event that Lessee holds over the Base Rent shall be increased to 150% of the Base Rent applicable immediately preceding the expiration or termination. Nothing contained herein shall be construed as consent by Lessor to any holding over by Lessee.

27.Cumulative Remedies. No remedy or election hereunder shall be deemed exclusive but shall, wherever possible, be cumulative with all other remedies at law or in equity.

28.Covenants and Conditions; Construction of Agreement. All provisions of this Lease to be observed or performed by Lessee are both covenants and conditions. In construing this Lease, all headings and titles are for the convenience of the Parties only and shall not be considered a part of the Parties, but rather according to its fair meaning as a whole, as if both Parties had prepared it.

29.Binding Effect; Choice of Law. This Lease shall be binding upon the parties, their personal representatives, successors and assigns and be governed by the laws of the State of California. Any litigation between the Parties hereto concerning this Lease shall be initiated in the County of Los Angeles.
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30.Subordination; Attornment; Non-Disturbance.

30.1Subordination. This Lease shall be subject and subordinate to any ground lease, mortgage, deed of trust, or other hypothecation or security device (collectively, "Security Device"), now or hereafter placed upon the Premises, to any and all advances made on the security thereof, any all the renewals, modifications, and extensions thereof. Lessee agrees that the holders that any such Security Devices (in this Lease together referred to as "Lender") shall have no liability or obligation to perform any of the obligations of Lessor under the Lease. Any Lender may elect to have this Lease superior to the lien of its Security Device by giving written notice thereof to Lessee, whereupon this Lease shall be deemed prior to such Security Device, notwithstanding the relative dates of the documentation or recordation thereof.

30.2Attornment. In the event that Lessor transfers title to the Premises, or the Premises are acquired by another upon the foreclosure or termination of a Security Device to which the Lease is subordinated (i) Lessee shall, subject to the nondisturbance provisions of Paragraph 30.3, attorn to such new owner, and upon the request, enter into a new lease, containing all of the terms and provisions of this Lease, with such new owner for the remainder of the term hereof, or, at the election of such new owner, this Lease shall automatically become a new Lease between Lessee and such new owner, upon all of the terms and conditions hereof, for the remainder of the term hereof, and (ii) Lessor shall thereafter be relieved of any further obligations hereunder and such new owner shall assume all of Lessor's obligations hereunder, except that such new owner shall not: (a) be liable of any act of omission of any prior Lessor or with respect to events occurring prior to acquisition of ownership; (b) be subject to any offsets or defenses which Lessee might have against any prior Lessor, (c) be bound by prepayment of more than one month's rent, or (d) be liable for the return of any security deposit paid to any prior Lessor.

30.3Non-disturbance. With respect to Security Devices entered into by Lessor after the execution of this Lease, Lessee's subordination of this Lease shall be subject to receiving a commercially reasonable non-disturbance agreement ("NonDisturbance Agreement") from the Lender which Non-Disturbance Agreement provides that Lessee's possession of the premises, and this Lease, including any options to extend the term hereof, if granted by Lessor, will not be disturbed so long as the Lessee is not in Breach hereof and attorns to the record owner of the Premises. Further, within sixty (60) days after the execution of this Lease, Lessor shall use its commercially reasonable efforts to obtain a Non-Disturbance Agreement from the holder of any preexisting Security Device which is secured by the Premises. In the event that Lessor is unable to provide the Non-Disturbance Agreement within said sixty (60) days, then Lessee may, at Lessee's option, directly contact Lender at attempt to negotiate for the execution and delivery of a Non-Disturbance Agreement.

30.4Self-Executing. The agreements contained in Paragraph 30 shall be effective without the execution of any further documents; provided, however, that, upon written request from Lessor or Lender in connection of the sale, financing or refinancing of the Premises, Lessee and Lessor shall execute such further writings as maybe reasonably required to separately document any subordination, attornment and/or NonDisturbance Agreement provided for herein.

31.Attorney's Fees. If any Party brings an action or proceeding involving the Premises whether founded in tort, contract or equity, or to declare rights here under, the Prevailing Party (as here after defined) in any such proceeding, action, or appeal thereon, such be entitled to responsible attorney's fees. Such fees may be awarded in the same suit or 140 of 151

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recovered in a separate suit, whether or not such action or proceeding is pursued to decision or judgment. The term, "Prevailing Party" means, without limitation, a Party who substantially obtains or defeats the relief sought, as the case maybe, whether by compromise, settlement, judgment, or the abandonment of the other Party of its claim or defense. The attorneys' fees award shall not be computed in accordance with any court fee schedule but shall be such as to fully reimburse all attorneys' fees reasonably incurred. Lessor shall be entitled to attorneys' fees, cost and expenses incurred in the preparation and service of notices of Default and consultation in connection therewith, whether or not legal action is subsequently commenced in connection with such Default or resulting Breach.

32.Lessor's Access; Showing Premises; Repairs. Lessor and Lessor's agents shall have the right to enter the Premises at any time, in the case of an emergency, and otherwise at reasonable times for the purpose of showing the same to prospective purchasers, lenders, or tenants, and making such alterations, repairs, improvements or additions to the Premises as Lessor may deem necessary. All such activities shall be without abatement of Rent or liability to Lessee. Lessor may at any time, place on the Premises any ordinary "For Sale" signs and Lessor may during the last six (6) months of the term hereof place on the Premises any ordinary "For Lease" signs. Lessee may at any time place on the Premises any ordinary "For Sublease" sign.

33.Auctions. Lessee shall not conduct, nor permit to be conducted, any auction upon the Premises without Lessor's prior written consent. Lessor shall not be obligated to exercise any standard of reasonableness in determining whether to permit an auction.

34.Signs. Except for ordinary "For Sublease" signs which may be placed only on the Premises, Lessee shall not place any sign upon the Building without Lessor's prior written consent. All signs must comply with all Applicable Requirements. Lessee, at Lessee's expense to have the right to install its proportionate share of building signage on both California Avenue and Orange Street frontages of the Premises in accordance with City of Glendale's sign ordinance. The location of any signage shall be mutually agreed upon by Lessor and Lessee.

35.Termination; Merger. Unless specifically stated otherwise in writing by Lessor, the voluntary or other surrender of this Lease by Lessee, the mutual termination or cancellation hereof, or a termination hereof by Lessor for Breach by Lessee, shall automatically terminate any sublease or lesser estate in the Premises; provided, however, that Lessor may elect to continue anyone or all existing subtenancies. Lessor's failure within ten (10) days following any such event to elect to the contrary by written notice to the holder of any such lesser interest, shall constitute Lessor's election to have such event constitute the termination of such interest.

36.Consents. Except as otherwise provided herein, wherever in this Lease the consent of a Party is required to an act by or for the other Party, such consent shall not be unreasonably withheld or delayed. Lessor's actual reasonable costs and expenses (including but not limited to architects', attorneys', engineers' and other consultants' fees) incurred in the consideration of, or response to, a request by Lessee for any Lessor consent, including but not limited to consents to an assignment, a subletting or the presence or use of a Hazardous Substance, shall be paid by Lessee upon receipt of an invoice and supporting documentation therefor. Lessor's consent to any act, assignment or subletting shall not constitute an acknowledgment that no Default or Breach by Lessee of this Lease exists, nor shall such consent be deemed a waiver of any then existing Default or Breach, except as may be otherwise specifically stated in writing by Lessor at the time of such consent. The failure to specify herein any particular condition to Lessor's consent shall not preclude the imposition by Lessor at the time of consent of such further or other conditions as are then reasonable with reference to the particular matter for which consent 141 of 151

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is being given. In the event that either Party disagrees with any determination made by the other hereunder and reasonably requests the reasons for such determination, the determining party shall furnish its reasons in writing and in reasonable detail within ten (10) days following such request.

37.Guarantor.

37.1Execution. The Guarantors, if any, shall each execute a guaranty in the form acceptable to the Lessor, and each such Guarantor shall have the same obligations as Lessee under this Lease.

37.2 Defaults. The Lessee shall be in Default if any Guarantor fails or refuses, upon request to provide:
(a) evidence of the execution of the guaranty, including the authority of the party signing on Guarantor's behalf to obligate Guarantor, and in the case of a corporate Guarantor, a certified copy of a resolution of its board of directors authorizing the making of such guaranty;
(b) current financial statements;
(c) an Estoppel Certificate; or
(d) written confirmation that the Guaranty is still in effect.

38.Quiet Possession. Subject to payment by Lessee of the Rent and performance of all of the covenants, conditions and provisions on Lessee's part to be observed and performed under this Lease, Lessee shall have quiet possession and quiet enjoyment of the Premises during the term hereof.

39.Options. This Lease does not grant Lessee is an option to extend this Lease. Lessor retains its sole and absolute discretion to grant a Lease extension if requested by Lessee at least three (3) months prior to the end of the Term.

40.Security Measures. Lessee hereby acknowledges that the Rent payable to Lessor hereunder does not include the cost of guard service or other security measures, and that Lessor shall have no obligation whatsoever to provide same. Lessee assumes all responsibility for the protection of the Premises, Lessee, its agents and invitees and their property from the acts of third parties.

41.Reservations. Lessor reserves the right: (i) to grant, without the consent or joinder of Lessee, such easements, rights and dedications that Lessor deems necessary, (ii) to cause the recordation of parcel maps and restrictions, and (iii) to create and/or install new utility raceways, so long as such easements, rights, dedications, maps, restrictions, and utility raceways do not unreasonably interfere with the use of the Premises by Lessee. Lessee agrees to sign any documents reasonably requested by lessor to effectuate such rights.

42.Performance under Protest. If at any time a dispute shall arise as to any amount or sum of money to be paid by one Party to the other under the provisions hereof, the Party against whom the obligation to pay the money is assented shall have the right to make payment "under protest" and such payment shall not be regarded as voluntary payment and there shall survive the right on the part of said Party to institute suit for recovery of such sum. If it shall be adjudged that there was no legal obligation on the part of said Party to pay such sum or any part 142 of 151

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thereof, said Party shall be entitled to recover such sum or so much thereof as it was not legally required to pay.

43.Authority. If either Party hereto is a corporation, trust, limited liability company, partnership, or similar entity, each individual executing this Lease on behalf of such entity represents and warrants that they are duly authorized to execute and deliver this Lease on its behalf. Each Party shall, within thirty (30) days after request, deliver to the other Party satisfactory evidence of such authority.

44.Conflict. Any conflict between the printed provisions of this Lease and the typewritten or handwritten provisions shall be controlled by the typewritten or handwritten provisions.

45.Offer. Preparation of this Lease by either party or their agent and submission of same to the other Party shall not be deemed an offer to lease to the other Party, This Lease is not intended to be binding until executed and delivered by all Parties hereto.

46.Amendments. This Lease may be modified only in writing, signed by the Parties in interest at the time of the modification. As long as they do not materially change Lessee's obligations hereunder, Lessee agrees to make such reasonable non-monetary modifications to this Lease as may be reasonably required by a Lender in connection with the obtaining of normal financing or refinancing of the Premises.

47.Multiple Parties. If more than one person or entity is named herein as either Lessor or Lessee, such multiple Parties shall have joint and several responsibility to comply with the terms of this Lease.

48.Waiver of Jury Trial. The Parties hereby waive their respective rights to trial by jury in any action or proceeding involving the Property or arising out of this Agreement.

49.Mediation and Arbitration of Disputes. An Addendum requiring the Mediation and/or the Arbitration of all disputes between the Parties arising out of this Lease is not attached to this Lease.

LESSOR AND LESSESS HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND

EACH TERM AND PROVISION CONTAINED HEREIN, AND BY THE EXECUTION OF THIS LEASE SHOW THEIR INFORMED AND VOLUNTARY CONSENT THERETO. THE PARTIES

HEREBY AGREE THAT, AT THE TIME THIS LEASE IS EXECUTED, THE TERMS OF THIS

LEASE ARE COMMERCIALLY RESONABLE AND EFFECTUATE THE INTENT AND PURPOSE OF LESSOR AND LESSEE WITH RESPECT TO THE PREMISES. [SIGNATURES APPEAR ON NEXT PAGE]
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The parties hereto have executed this Lease at the place and on the dates specified above their respective signatures.

Executed at: ______________________ Executed at: ______________________ on ______________________________ on ______________________________ By LESSOR:

City of Glendale
By LESSEE:

Knowledge Truck, Inc.

By: ______________________________ By: ______________________________ Roubik Golanian, City Manager Stepan Partamian, President Approved As to Form:

MICHAEL J. GARCIA, CITY ATTORNEY
By: ____________________________
Gillian van Muyden,
Chief Assistant City Attorney
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CODE
4047
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California

EXHIBIT B

FLOOR PLAN
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Glendale City CouncilSeptember 1, 2026

Glendale City Council
September 1, 2026