Murrieta City Council
November 7, 2023

01375.0005/890799.1
Multi -Family Dwellings without Private
Garages, Hotels and Motels
Install Level 2 EVSE for 6% of total
parking spaces required
Non-Residential Development Install Level 2 EVSE for 4% of total parking spaces less than 200 parking
spaces.

Install Level 2 EVSE for 5% of total
parking spaces for 200 or greater parking
spaces.
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SECTION 3. Section 16.08.020 of Title 16 of the Murrieta Municipal Code is hereby amended solely with respect to Table 16.08-4 to read as follows:
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TABLE 16.08-4

RESIDENTIAL (MULTI-FAMILY) ZONES

GENERAL DEVELOPMENT STANDARDS
Development Feature MF-1(5) MF-2 MF-3 MF-4
Minimum Parcel Size 1 acre 1 acre 1 acre 1 acre Minimum Parcel Width 100 feet 100 feet 100 feet 100 feet Density Range 10.1 - 15
du/acre

15.1 - 18.0
du/acre

18.1-29.0 du-
acre
Min. 30
du/acre
Minimum Livable Area 500 sq. ft. 500 sq. ft. 500 sq. ft. 500 sq. ft.

Setbacks
Street 10 feet 10 feet 10 feet 10 feet
Interior 10 feet 10 feet 10 feet 10 feet
Maximum Parcel Coverage 35% 35% 50% None
Maximum Height Limit 50 feet 50 feet 60 feet 100 feet Open Space (per dwelling unit)
Private Open Space 60 sq.
ft./upper floor
100 sq.
ft./ground
floor
60 sq.
ft./upper floor
100 sq.
ft./ground
floor
All units 50
sq. ft.(2)
All units 50
sq. ft.(2)
Common Open Space 200 sq. ft. 200 sq. ft. 150 sq. ft.(3) 150 sq. ft.(3) Recreational Amenities For projects
containing 25
or more
dwelling units,
provide one
recreational
amenity for
For projects
containing 25
or more
dwelling units,
provide one
recreational
amenity for
For projects
containing 25
or more
dwelling
units, provide
one
recreational
For projects
containing 25
or more
dwelling
units, provide
one
recreational
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each 30
dwelling units
or fraction
thereof(4)
each 30
dwelling units
or fraction
thereof(4)
amenity for
each 30
dwelling units
or fraction
thereof(4)
amenity for
each 30
dwelling units
or fraction
thereof(4)
Minimum On-site
Landscaping 10% of the site area
Notes:

(1) When adjacent to existing single-family residential use or zone, the building setback from the nearest property line shall be 10 feet for the first 25 feet in height, above 25 feet in height the setback shall be 20 feet, and above 50 feet, the setback shall be 30 feet. (2) For stand-alone multi-family residential projects or as part of a mixed-use development, each residential unit shall be provided with at least one area of private open space accessible directly from the living area of the unit, in the form of fenced yard or patio, a deck or balcony at a minimum area of 50 square feet. The minimum dimension, width or depth of a balcony shall be 5 feet.
(3) All common open space shall be conveniently located and accessible to all dwelling units on the site. Common open space may include landscaping, pedestrian paths and recreational amenities. In projects containing fewer than 10 units, the common open space shall have a minimum width and depth of 10 feet. In projects containing 10 or more or units, the minimum width and depth shall be 20 feet.
(4) One common recreational amenity shall be provided for each 30 units or fraction thereof.

The following listed amenities satisfy the above recreational facilities requirements.

Recognizing that certain facilities serve more people than others, have a wider interest or appeal, and/or occupy more area, specified items may be counted as two amenities, as noted.

In all cases, each square foot of land area devoted to a recreational amenity shall be credited as common open space on a 1:1 basis.
a. Clubhouse (two)
b. Swimming Pool (two)
c. Tennis, Basketball or Racquetball court
d. Weightlifting facility
e. Children's playground equipment
f. Sauna or Jacuzzi
g. Day Care Facility (two)
h. Other recreational amenities deemed adequate by the director.

(5) For projects proposing a clustering configuration with detached single-family homes or within small attached unit configurations, please see 16.16.020 “Planned Residential 567
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Development General Standards” and 16.16.030 “Planned Residential Development Design Standards and Parameters” for requirements.
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SECTION 4. SECTION 16.73.050 of Title 16 of the Murrieta Municipal Code is hereby amended in its entirety to read as follows:
“16.73.050 Findings and Decision.

A. Any decision on an application under this chapter shall be supported by written findings addressing the criteria set forth in this subsection. An application under this chapter for a reasonable accommodation shall be granted if all of the following findings are made:

1. The housing, which is the subject of the request, will be used by an individual disabled as defined under the Acts.

2. The requested reasonable accommodation is necessary to make specific housing available to an individual with a disability under the Acts.

3. The requested reasonable accommodation would not impose an undue financial or administrative burden on the city.

4. The requested reasonable accommodation would not require a fundamental alteration in the nature of a city program or law, including, but not limited to, land use and zoning.

5. There are no reasonable alternatives that would provide an equivalent level of benefit without requiring a modification or exception to the city's applicable rules, standards and practices.

B. In determining whether the requested reasonable accommodation is necessary to make specific housing available to individual(s) with a disability, pursuant to Subsection (A)(2) above, the city may consider, but is not limited to, the following factors:

1. Whether the requested accommodation will affirmatively enhance the quality of life of a person(s) with disability.

2. Whether the person(s) with disability will be denied opportunity to enjoy the housing type of their choice absent the accommodation.

C. In determining whether the requested reasonable accommodation would require a fundamental alteration in the nature of a city program or law, pursuant to Subsection (A)(4) above, the city may consider, but is not limited to, the following factors:

1. Whether the requested accommodation would fundamentally alter the character of the neighborhood.
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2. Whether the accommodation would result in a substantial increase in traffic or insufficient parking.

3. Whether granting the requested accommodation would substantially undermine any express purpose of either the city's general plan or applicable specific plan.

D. In granting a request for reasonable accommodation, the reviewing authority may impose any conditions of approval deemed reasonable and necessary to ensure that the reasonable accommodation would comply with the findings required by Subsection (A) above.” SECTION 5. Section 16.08.010 of Title of the Murrieta Municipal Code is hereby amended solely with respect to Table 16.08-1 and Table 16.08-2 to read as follows:
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TABLE 16.08-1

USE TABLE

FOR RESIDENTIAL (SINGLE-FAMILY) ZONING DISTRICTS
Permit Requirement by District
Symbol Applicable Process See Chapter
P Permitted Land Use - Compliance with
development standards and zoning clearance
required

16.74 C Conditional Use - Conditional use permit
required

16.52 "Blank" Land use not permitted

Land Use (1) (2) RR ER-1 ER-2 ER-3 SF-1 SF-2 See Standards in Section Agriculture, Open Space and Resources
Animal Keeping P P P P P P 16.44.040
Crop Production,
Commercial
P P P
Electric Vehicle Charging
Stations (7)
P P P P P P 15.63, 16.34, 16.44.115
Equestrian Facilities,
Commercial

P P P P P P
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Kennels
Residential/Commercial
P(3) 16.44.040.E. 2.

Nature Preserves P P P
Plant Nurseries,
Commercial
C C C
Open Space P P P P P P
Wind Conversion Energy
Systems (non-
commercial)
C
Communication Facilities
Satellite Dishes/Antennas P P P P P P 16.44.170A
Wireless Communication
Facilities
C C C C C C 16.44.170B
Education, Public
Assembly and Recreation

Bingo C C C C C C 16.44.210
Churches, places of
worship

C C C C C C
Cemeteries, Mortuaries,
Crematoriums,
Mausoleums
C C C
Golf Courses, Country
Clubs, Driving Ranges

C C C C C
Private Residential
Recreational Facilities
P P P P P P See definition
Schools C C C C C C
Residential
Accessory Dwelling
Units
P P P P P P 16.44.160
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Assisted Living/Skilled
Nursing

C C C C C C
Bed and Breakfast Inns C C C
Child Day Care Centers C C C C C C 16.44.050
Home Occupations P P P P P P 16.60.030
Junior Accessory
Dwelling Unit
P P P P P P 16.44.160
Large Family Day-Care
Homes - 9 to 14
children(5)
P P P P P P 16.44.050
Manufactured Home
(including mobile
homes)(6)
P P P P P P 16.44.050
Marijuana Cultivation,
Processing, Delivery, and
Dispensary

Medical Marijuana
Dispensary

Medical Marijuana
Dispensary, Mobile

Mobile Home Parks C C C C C C
Model Homes/Sales
Office

P P P P P P
Multi-family Housing P
Personal Services
(Limited)
P(9)(10) P(9)(10) P(9)(10) P(9)(10) P(9)(10) P(9)(10) See Definition 5.18, 16.44.270
Residential Accessory
Uses and Structures
P P P P P P 16.44.150
Residential Care Homes -
up to 6 Clients

P P P P P P
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Residential Care Homes -
7+ Clients

C C C C C C
Residential
Wedding/Event
Facilities(4)
C C C 16.44.230
Rooming/Boarding
Houses
C C C C C C 16.44.150I
Short-Term Vacation
Rentals (STVRs) -
Hosted(8)
P P P P P P 5.27 and 16.44.260
Short-Term Vacation
Rentals (STVRs) - Non-
Hosted(8)
P P P 5.27 and 16.44.260
Single-family Homes P P P P P P
Small Family Day-Care
Homes - Up to 8
children(5)
P P P P P P 16.44.050
Supportive Housing P P P P P P 16.44.200
Transitional Housing
(including
SRO/Efficiency units
P P P P P P 16.44.200
Notes:
(1) See Section 16.04.020 regarding uses not listed.
(2) See Article VI for definitions of the land uses listed. (3) Kennels existing as of January 1, 2014 within the RR zone are a legal-conforming land use and are permitted to continue in operation subject to no changes in the existing operation and/or compliance with the development standards contained in Section 16.44.040.E.2. (4) Minimum five (5) acre property.
(5) Zoning clearance not required.
(6) Any development standards imposed shall be limited to those specified in state law. See California Code of Regulations, Title 25 (Housing and Community Development), Division 1 for additional details and requirements.
(7) For EVCS - Subject to the Minor Conditional Use Permit appeal provisions for identified Public 572
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Health and Safety issues as described in Chapter 15.63. (8) For STVRs - Subject to the Citywide maximum, locational, and operational criteria, as described in Chapter 5.27 and Section 16.44.260 of this Municipal Code. (9) Limited to a massage accessory use in conjunction with establishment of the following primary uses:
assisted living/skilled nursing. No other personal service are permitted. Refer to Section 16.44.270.B.3 (Massage Accessory Use) and Chapter 5.18 (Massage Businesses and Massage Therapists) for additional details.
(10) Refer to Section 5.18.150 (Exemptions) for the types of “Professions and Services” which shall not be classified as a massage establishment.
“
..
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“TABLE 16.08-2

USE TABLE

FOR RESIDENTIAL (MULTI-FAMILY) ZONING DISTRICTS
Permit Requirement by District
Symbol Applicable Process See Chapter
P Permitted Land Use - Compliance with development
standards and zoning compliance required

16.74 C Conditional Use - Conditional use permit required 16.52 "Blank" Land use not allowed

Land Use (1) (2) MF-1 MF-2 MF-3 MF-4 See Standards in
Section
Agriculture, Open Space and Resources
Open Space P P
Communication Facilities
Satellite
Dishes/Antennas
P P P P 16.44.170-A
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Wireless
Communication
Facilities
C C C C 16.44.170-B
Education, Public Assembly and Recreation
Bingo C C See definition
Churches, Places
of Worship
C C See definition
Recreational
Facilities, Private

P P P P
Schools C C C C
Parking
Electric Vehicle
Charging
Stations(5)
P P P P 15.63, 16.34, 16.44.115
Residential
Accessory
Dwelling Units(4)
P P P P 16.44.160
Assisted
Living/Skilled
Nursing
C C C C See definition
Bed and Breakfast
Inns

Child Day-Care
Centers
C C C C 16.60.050
Home Occupations P P P P 16.60.030
Junior Accessory
Dwelling Unit

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Large family Day-
Care - 9 to 14
children(3)
P P P P Large family Day-Care
- 9 to 14 children(3)
Marijuana
Cultivation,
Delivery,
Dispensary, and
Processing

Medical Marijuana
Dispensary

Medical Marijuana
Dispensary,
Mobile

Manufactured
Home

P P P P
Mobile Home
Parks

C C C C
Model
Homes/Sales
Office

P P P P
Multi-family
Housing

P P P P
Residential
Accessory Uses
and Structures
P P P P 16.44.150
Residential Care
Homes - Up to 6
Clients

P P P P
Residential Care
Homes - 7 or More
Clients

C C C C
Rooming/Boarding
Houses
C C 16.44.150I
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Short-Term
Vacation Rentals
(STVRs) -
Hosted(6)
P P P P 5.27 and 16.44.260
Short-Term
Vacation Rentals
(STVRs) - Non-
Hosted(6)

Small Family Day-
Care Homes - Up
to 8 children(3)

P P P P
Supportive
Housing

P P P P
Transitional
Housing
(including
SRO/Efficiency
units)

P P P P
Notes:
(1) See Section 16.04.020.D regarding uses not listed. (2) See Article VI for definitions of the land uses listed. (3) Zoning clearance not required.
(4) As it pertains to Accessory Dwelling Units, per Section 16.44.160, allowances for implementation are applied to the Downtown Murrieta Specific Plan per state law. (5) For EVCS - Subject to the Minor Conditional Use Permit appeal provisions for identified Public Health and Safety issues as described in Chapter 15.63. (6) For STVRs – Prohibited at Rental Units. Subject to the Citywide maximum, locational, and operational criteria, as described in Sections 5.27 and 16.44.260 of this Municipal Code. (7) Limited to a massage accessory use in conjunction with establishment of the following primary uses:
assisted living/skilled nursing, residential care homes - up to 6 clients, residential care homes - 7 or more clients. No other personal services are permitted. Refer to Section 16.44.270.B.3 (Massage Accessory Use) and Chapter 5.18 (Massage Businesses and Massage Therapists) for additional details. (8) Refer to Section 5.18.150 (Exemptions) for the types of “Professions and Services” which shall not be classified as a massage establishment.
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SECTION 6. Section 16.34.040 of Title 16 of the Murrieta Municipal Code is hereby amended solely with respect to Table 3-7 to read as follows:
“16.34.040 Number of Parking Spaces Required.

TABLE 3-7 PARKING

REQUIREMENTS BY LAND USE

..

Residential Uses Vehicle Spaces Required
Single family housing Two spaces in a fully enclosed garage.

Duplex housing units Two spaces for each unit, with at least one space in a fully enclosed garage.

Multi-family
dwellings and other
attached dwellings
Studio and one bedroom units: 1.5 spaces for each unit, plus guest parking. Two bedrooms or more: 2 spaces for each unit, plus 0.5 additional spaces for each bedroom over 2, plus guest parking equal to 25% of the total number of units.

Mobile homes (in
mobile home parks)
Two spaces for each mobile home (tandem parking allowed in an attached carport), plus one guest parking space for each four units.

Condominiums Studio, one bedroom and two bedroom units: Two covered spaces for each unit, plus guest parking. Three bedrooms or more: Two spaces for each; plus 0.5 additional spaces for each bedroom over two; plus guest parking equal to 33% of the total number of units evenly spread throughout the entire project.

Mixed-use
developments
(residential portion)
Determined by conditional use permit.

Accessory dwelling
units
See Section 16.44.160
Senior housing
projects
One space for each unit with half the spaces covered, plus one guest parking space for each ten units.

Senior congregate
care

0.5 space for each residential unit, plus one space for each four units for guests and employees.

Short-term vacation Parking for the short-term vacation rental shall comply with the requirements as specified under Table 3-7, Table 5.27-01 for required on-site quantities, and

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rentals Section 16.44.260 of this municipal code. Required parking shall be allocated on- site of the single-family residential dwelling, or within designated parking spaces for condominiums, as prescribed by Table 5.27-01. All garage, driveway, carport and tandem parking spaces associated with the single-family residential dwelling or condominium unit shall, at all times, be available for parking of transient occupant and guest vehicles, as those terms are defined in Title 5.27. Temporary parking passes issued by the city shall be provided to all transient occupants and for their guest(s). The observable parking passes shall be displayed in the vehicle’s front-windshield for the duration of the stay.

Density Bonus On-site parking for a density bonus project shall be consistent with the requirements as described under Government Code Section 65915(p). See Section 16.20.040.B.4 for additional details.

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SECTION 7. Section 16.52.040 of Title 16 of the Murrieta Municipal Code is hereby amended in its entirety to read as follows:
“16.52.040 Findings and Decision.

Following a review of the application and public hearing in compliance with Chapter 16.76, the applicable review authority shall act to approve, approve with conditions, or disapprove the conditional use permit. The re-view authority may approve a conditional use permit only if all of the following findings of fact can be made in a positive manner per use type as described below:

A. The proposed residential use is conditionally allowed within the subject zoning district and complies with all applicable provisions of this development code; or B. The proposed non-residential use is conditionally allowed within, and would not impair the integrity and character of, the subject zoning district and complies with all applicable provisions of this development code;
C. The proposed use is consistent with the objectives, policies, general land uses, and programs of the general plan, and any applicable specific plan; D. The approval of the conditional use permit for the proposed use is in compliance with the requirements of the California Environmental Quality Act (CEQA) and there will be no potentially significant negative impacts upon environmental quality and natural resources that could not be properly mitigated and monitored;
E. The site is suitable for the type and intensity of use or development that is proposed; F. There are adequate provisions for sanitation, water, and public utilities and services to ensure public convenience, health, safety, and general welfare; and G. The proposed use would not create significant noise, traffic, or other conditions or situations that may be objectionable or detrimental to other allowed uses in the vicinity or adverse to the public convenience, health, safety, or general welfare, or materially injurious to 578
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properties and improvements in the vicinity of the subject property.” SECTION 8. Section 16.44.200 of Title 16 of the Murrieta Municipal Code is hereby amended in its entirety to read as follows:
“16.44.200 Emergency Residential Shelters and Transitional Housing.

A. Purpose. This division sets forth a uniform set of standards for emergency shelters to provide temporary housing for the homeless.

B. Emergency Shelter Standards for Regulations. Emergency shelters for homeless persons shall be subject to and comply with the following standards and regulations.

1. A single emergency shelter for thirty (30) occupants, or a combination of multiple shelters with a combined capacity not to exceed thirty (30) occupants, shall be allowed as a permitted use, consistent with section 65583(4)(A) of the Government Code. All emergency shelters, regardless of the number of occupants, shall meet the minimum standards contained herein below. Any emergency shelter with a capacity greater than thirty (30) occupants shall also be subject to the approval of a conditional use permit, as set forth in section 16.52.

2. The facility shall operate on a first-come, first serve basis with clients only permitted on- site and admitted to the facility between 6:00 p.m. and 7:00 a.m. during Pacific Daylight Time, and 5:00 p.m. and 7:00 a.m. during Pacific Standard Time. Clients must vacate the facility by 8:00 a.m. and have no guaranteed bed for the next night, A curfew of 10:00 p.m. (or earlier) shall be established and strictly enforced and clients shall not be admitted after the curfew.

3. To avoid over-concentration of emergency shelter facilities, a minimum distance of three hundred (300) feet shall be maintained from any other emergency shelter, as measured from the property line.

4. Emergency shelters shall not be located within one thousand (1,000) feet of a public or private school (pre-school through twelfth grade), universities, colleges, student housing, senior housing, child care facilities, public parks, businesses licensed for on- or off-site sales of alcoholic beverages or parolee/probationer home as defined in Article VI, Section 16.110 (Definitions) and as measured from the property line.

5. Service providers shall provide sufficient numbers of male and female toilets - restrooms for clients and prospective clients to have access to use on a twenty-four (24) hour basis. For group housing and other similar shelter programs, adequate private male and female showers shall be provided along with lockers for clients to temporarily store their belongings.

6. Any outdoor storage, including, but not limited to, items brought on-site by clients for overnight stays, shall be screened from public view by a minimum six (6)-foot tall decorative wall or fence.

7. Adequate waiting areas must be provided within the premises for clients and prospective clients including ten (10) square feet per bed, minimum one hundred (100) square feet to ensure that public sidewalks or private walkways are not used as queuing or waiting areas. 579
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8. Facility improvements shall comply with the Murrieta municipal code and the most current adopted building and safety code, specific to the establishment of dormitories and shall additionally provide:
a. A minimum of one (1) toilet for every eight (8) beds per gender. b. A minimum of one (1) shower for every eight (8) beds per gender. c. Private shower and toilet facility for each area designated for use by individual families.

9. An emergency shelter facility shall provide off-street parking:
a. The minimum parking requirement shall be whichever is less, the ratio of one (1) space per four (4) beds, and/or 0.5 per bedroom designated as a family unit with children, plus one (1) space per staff member, or the minimum parking requirement for other residential or commercial uses within the same zone whichever results in less parking being required. b. Service providers are responsible to provide and maintain adequate parking and freight loading facilities for employees, clients and other visitors who drive to the premises.

10. Bike rack parking shall be provided at the facility.

11. Exterior lighting shall be provided for the entire outdoor and parking area of the property per the lighting standards of the Section 16.18.100 of the code.

12. The facility may provide the following services in a designated area separate from sleeping areas:
a. A recreation area inside the shelter or in an outdoor area visually separated from public view by a minimum six (6)-foot tall visually screening decorative wall or fence. b. A counseling center for job placement, educational, health care, legal services, or mental health services.
c. Laundry facilities to serve the number of clients at the shelter. d. Kitchen and dining area.
e. Client storage area.
f. Similar types of facilities to address the needs of homeless clients, as determined by the planning director.

13. A shelter management plan shall be submitted as a part of the conditional use permit application, which addresses all of the following:
a. Service providers shall maintain sufficient monetary resources to enable them to operate the facility per the shelter management plan, and shall demonstrate to the city prior to approval of the permit application that such funds shall be available for use upon first occupancy of the proposed project and shall reasonably be expected to be available for the life of the project;
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b. A minimum of one (1) staff member per fifteen (15) beds shall be awake and on duty when the facility is open. Facility staff shall be trained in operating procedures, safety plans, and assisting clients. The facility shall not employ staff who have been convicted of a felony or who are required to register as a sex registrant under Penal Code 290; c. Service providers shall maintain up-to-date information and referral sheets to give clients and other persons who, for any reason, cannot be served by the establishment; d. Service providers shall provide criteria to screen clients for admittance eligibility, with the objective to provide first service to individuals with connections to Murrieta; e. Service providers will maintain information on individuals utilizing the facility and will ensure that the maximum stay at the facility shall not exceed one-hundred and twenty (120) days in a three-hundred and sixty-five (365) day period;
f. Service providers shall continuously monitor waiting areas to inform prospective clients whether they can be served within a reasonable time. If they cannot be served by the provider because of time or resource constraints, the monitor shall inform the client of alternative programs and locations where he or she may seek similar services; g. Service providers will educate on-site staff to provide adequate knowledge and skills to assist clients in obtaining permanent shelter and income, including referrals to outside assistance agencies. An annual report on this activity will be provided to the city; h. Service providers shall provide for the timely removal of litter attributable to clients within the vicinity of the facility every twenty-four (24)-hour period; i. Service providers will maintain good communication and have procedures in place to respond to operational issues which may arise from the neighborhood, city staff, or the general public;
j. The shelter management plan shall include how staff will address and regulate alcohol and illegal drug use by clients on the premises;
k. Service providers shall establish standards for responding to emergencies and incidents expelling clients from the facility, re-admittance policies for clients who have previously been expelled from the facility shall also be established.

14. The establishment shall implement other conditions and/or measures as determined by the city, in consultation with other city/county agencies necessary to ensure that management and/or clients of the establishment maintain the quiet, safety and cleanliness of the premises and the vicinity of the use; and

15. Other requirements as deemed necessary by the city to ensure that the facility does not create an adverse impact to surrounding properties.

D. Notification. In addition to the notification required by the Development Code, representatives of the police department shall be apprised of the proposed project in a timely 581
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fashion so that the department may respond to any concerns they may have regarding the proposed project.”
SECTION 9. EFFECTIVE DATE.

This ordinance shall take effect thirty (30) days after its adoption.

SECTION 10. SEVERABILITY.

If any provision of this ordinance or the application thereof to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applications, and to this end the provisions of this ordinance are declared to be severable.

SECTION 11. NOTICE OF ADOPTION.

This Ordinance shall become effective on the thirty-first (31st) day after its passage and adoption, and within fifteen (15) days after its final passage and the City Clerk shall cause it to be posted and published in a newspaper of general circulation, printed, published and circulated in the City in the manner required by law and shall cause a copy of this Ordinance and its certification, to be entered in the Book of Ordinances of the City.

PASSED AND ADOPTED this ___ day of ________, 2023.
_______________________________
Lisa DeForest, Mayor

ATTEST:

____________________________
Cristal McDonald, CMC, City Clerk

APPROVED AS TO FORM:

____________________________
Tiffany J. Israel, City Attorney

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STATE OF CALIFORNIA )
COUNTY OF RIVERSIDE )§

CITY OF MURRIETA )

I, Cristal McDonald, City Clerk of the City of Murrieta, California, do hereby cer tify that the foregoing Ordinance No. 598-23 was duly passed and adopted by the City Council of the City of Murrieta at the regular meeting thereof, held on the ___th day of _______, 202_, and was signed by the Mayor of the said City, and that the same was passed and adopted by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:
_____________________________
Cristal McDonald, CMC, City Clerk

I, Cristal McDonald, City Clerk of the City of Murrieta, California further certify that Ordinance No. 598-23 was duly published according to law and the order of the City Council of said City and the same was so published in Press Enterprise, a newspaper of general circulation on the following date(s):

Adopted Ordinance: , 2023.

In witness whereof, I have hereunto subscribed my name this __ day of ______________, 2023.

_____________________________
Cristal McDonald, CMC, City Clerk

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1 NOTICE OF EXEMPTION

To: Office of Planning and Research
P.O. Box 3044, Room 113
Sacramento, CA 95812-3044

Riverside County Clerk
From (Public Agency): City of Murrieta
1 Town Square
Murrieta, CA 92562
4080 Lemon St.

Riverside, CA 92501

Project Title: Electric Vehicle Charging and Housing Element Implementation Ordinance Project Applicant: The City of Murrieta
Project Location - Specific: Citywide
Project Location - City: City of Murrieta
Project Location - County: County of Riverside
Description of Nature, Purpose, and Beneficiaries of Project:

Nature: The Project is a Development Code Amendment (MCA-2023-00001) for the adoption of an Electric Vehicle Charging and Housing Element Implementation Ordinance. The Project proposes an amendment to the City’s Development Code for the purpose of revising and updating Sections 16.08.010, 16.08.020, 16.34.040, 16.44.115, 16.44.200, 16.52.040, and

16.73.050.

Purpose: To bring the City’s Development Code into compliance with the City’s Climate Action Plan Policy T-2 and Housing Element Policy Action 1 -9: Amend the City’s Zoning for Compliance with State Law and to Reduce Governmental Constraints on the Development of Housing.

Beneficiaries: City of Murrieta
Name of Public Agency Approving Project: City of Murrieta Name of Person or Agency Carrying Out Project: City of Murrieta Exempt Status
(check one):

Pursuant to California Environmental Quality Act (CEQA) Statute and Guidelines Ministerial (Sec. 21080(b)(1); 15268);
Declared Emergency (Sec. 21080(b)(3); 152269(a));
Emergency Project (Sec. 21080(b)(4); 15269(b)(c));
Categorical Exemption. Type and Section: State CEQA Guidelines §15183 “Projects Consistent with a Community Plan or Zoning”
Statutory Exemption. Code Number:

Reasons Why the Project is Exempt:

State CEQA Guidelines Section 15183 (Public Resources Code §21083.3), provides that projects which are consistent with the development density established by a Community Plan, General Plan, or Zoning for which an environmental impact report (EIR) has been certified “shall not require additional environmental review, except as might be necessary to examine whether there are project -specific significant effects which are peculiar to the project or its site.”

The Murrieta General Plan 2035 and its associated EIR (SCH#2010111084) were certified July 19, 2021. The document Comprehensively examined the potential environmental impacts that occur as a result of the implementation of its policies.

The Project is an Ordinance to revise Title 16 of the Murrieta Municipal Code to implement Policy T-2 of the City’s Climate Action Plan and Policy Action 1 -9 of the Housing Element. The Project proposes an amendment to the City’s Development Code for the purpose of revising and updating sections 16.08, 16.31, 16.44, 16.52, and 16.73.

The proposed action is exempt from t he California Environmental Quality Act (CEQA) as this meets the required actions of CEQA Guidelines Section 15183 Projects Consistent with a Community Plan or Zoning, because it involves the adoption and implementation of policies within the City’s Climate Action Plan and Housing Element both of which were examined as part of the City’s General Plan EIR. The Project will not cause significant 584
2 environmental impact and implements a uniformly applied development policy or standard that is consistent with the Climate Action Plan and Housing Element.

The following findings are made in compliance with CEQA Section 15183 – Project consistent with a Community Plan or Zoning.

In approving a project meeting the requirements of CEQA Section 15183, a publi c agency shall limit its examination of environmental effects to those which the agency determines, in an initial study or other analysis:

1. Is the project consistent with the General Plan and Zoning designations for the site (including density for residential developments)? Yes __X__ No_____ If yes, please explain below. If no, the project does not qualify for this exemption.

Comment/Finding:

As indicated above, the Project will bring the Development Code into greater compliance with the Climate Action Plan and Housing Element. The Project will not increase the permitted density for residential developments.

2. Are there any impacts that weren’t evaluated in the General Plan EIR that are peculiar to the project or the parcel on which the project would be located? Yes _____ No __X__ If yes, an initial study or detailed analysis is necessary to determine if specific impacts will need to be mitigated.

If no, continue with CEQA Section 15183 Exemption.

Comment/Finding:

The Project implement s actions identified within the Climate Act ion Plan and Housing Element which were evaluated with the General Plan EIR. There fore, all potential impacts were identified as part of the General Plan EIR.

3. Are there project specific impacts which the General Plan EIR failed to analyze as significan t effects.

Yes_____ No __X__
If yes, an initial study or other detailed analysis is necessary to determine if the impacts are considered to be significant and if mitigation is required.

If no, continue with CEQA Section 15183 Exemption.

Comment/Finding:

The Project would not result in any additional impacts that were not evaluated with the General Plan EIR.

4. Is there substantial new information which would result in more severe impacts than anticipated by the General Plan EIR?
Yes_____ No __X__
If yes, an initial study or other detailed analysis is necessary to determine if the impacts are considere d to be significant and if mitigation is required.

If no, continue with CEQA Section 15183 Exemption.

Comment/Finding:

There is no new information as a result of the Project that would result in more severe impacts. The proposed actions implement poli cies within the Climate Action Plan and Housing Element both of which were evaluated with the General Plan EIR.

Lead Agency
Contact Person: Taylor Graybehl
Telephone
& Extension: (951) 837-4320
If Filed by Applicant:

1. Attach certified document of exemption finding.

2. Has a Notice of Exemption been filed by the public agency approving the project? Yes No Signature: Title: Associate Planner Date:

Signed by Lead Agency Date received for filing at OPR: Signed by Applicant

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CITY OF MURRIETA
City Council Meeting Agenda
Report
11/7/2023
Agenda Item No. 12.

TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Javier Carcamo, Finance Director
PREPARED BY: Paige Hartman-Salazar, Management Analyst
SUBJECT: Adoption of Other Post Employment Benefit Funding Policy

RECOMMENDATION
Adopt Resolution 23-4714 entitled: A Resolution of the City Council of the City of Murrieta, California, Approving the Adoption of the Other Post-Employment Benefits (OPEB) Funding Policy.

PRIOR ACTION/VOTE
On June 2, 2009, the City Council adopted Resolution No. 09-2272, authorizing the agreement between the City and CalPERS for the California Employer’sRetiree Benefit Trust Program (CERBT) to prefund OPEB through CalPERS (Vote: 5-0).

CITY COUNCIL GOAL
Maintain a high performing organization that values fiscal sustainability, transparency, accountability and organizational efficiency.

BACKGROUND
The City of Murrieta (City) provides a single employer defined OPEB plan that provides medical and prescription coverage at retirement. Employees may continue health coverage with the City at retirement for themselves, their spouses, and dependents for life once they meet certain eligibility requirements. The amount of City contribution differs depending on the retirement date and City hire date, as explained in further detail below. Employees are eligible for this benefit once they retire, within 120 days from the date of separation, and the retiree must be receiving benefits from the California Public Employees Retirement System (CalPERS).

OPEB Trust
On June 2, 2009, City Council authorized the establishment of the CERBT Fund. CERBT is a Section 115 trust fund dedicated to prefunding OPEB like retiree healthcare. One of the benefits of the trust includes investment income generation from employer contributions to pay for future retiree benefits.

OPEB Plan Provisions
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Agenda Item No. 12.

The City’sOPEB has multiple-tier plans based on the employees’respective labor groups, hire dates, and retirement dates. A summary of the plan provisions is as follows:

Members of all groups who retired prior to July 1, 2007, receive a monthly contribution of $695.

The Murrieta General Employees Association (MGEA) and Murrieta Supervisors Association (MSA) groups and employees covered by the Management and Confidential (M&C) Compensation Plan hired prior to January 1, 2008, who choose to continue their CalPERS health insurance upon retirement, are eligible to receive a monthly contribution to a Retirement Health Savings (RHS) Plan in the amount of $833. Those hired after January 1, 2008, but before July 14, 2014, and retire with 10 years of City service can receive $360 per month until Medicare eligible and then will receive the CalPERS minimum mandated amount for employer contributions under the Public Employees Medical and Hospital Care Act (PEMHCA), commonly referred to as the PEMHCA minimum contribution. (For 2023, the PEMHCA minimum contribution is $151.) Those hired after January 1, 2008, through July 14, 2014, and retire with less than 10 years of City service, and those hired on or after July 15, 2014, and retire from the City, will receive the PEMCHA minimum contribution.

Employees of the Murrieta Police Officers Association (MPOA) and Murrieta Police Managers Association (MPMA) groups hired prior to July 1, 2007, who choose to continue their CalPERS health insurance upon retirement are eligible to receive a monthly contribution to a RHS Plan in the amount of $833. Those hired after July 1, 2007, who retire with 10 years of City service can receive $360 per month until Medicare eligible and then will receive the PEMCHA minimum contribution. Those hired after July 1, 2007, who retire with less than 10 years of City service will receive the PEMCHA minimum contribution.

Employees of the Murrieta Fire Association and Murrieta Fire Managers Association groups hired prior to January 1, 2010, who choose to continue their CalPERS health insurance upon retirement are eligible to receive a monthly contribution to a RHS Plan in the amount of $833. Those hired after January 1, 2010, who retire with 10 years of City service can receive $360 per month until Medicare age and then will receive the PEMCHA minimum contribution. Those hired after January 1, 2010, who retire with less than 10 years of City service will receive the PEMCHA minimum contribution.

Based on the most recent actuarial valuation report as of June 30, 2021, the following current and former employees were covered by the benefit terms under the plan:

Inactive Employees or Beneficiaries Currently Receiving Benefit - 151 Inactive Employees or Beneficiaries Entitled to but not yet Receiving Benefits - 25 Active Employees - 359
Total - 535
OPEB Plan Status
The annual actuarial valuation report determines the employer's Actuarially Determined Contribution (ADC).

ADC is the recommended contribution that, if paid on an ongoing basis, is expected to provide sufficient resources to fund (a) future normal cost (cost for new service) and (b) the amortized unfunded liabilities (cost for past service) over a fixed period of time. Historically, the City has elected to pay-as-you-go (pay-go) for current year expenditures.

The most recent valuation report, as of June 30, 2021, states that the City’stotal OPEB liability is $33,795,393.

The CERBT trust has $5,733,812 in assets. Hence, the total net OPEB liability is $28,061,581. As required by Governmental Accounting Standards Board Statement 75, the net OPEB liability is recognized and reported in the City’sComprehensive Annual Financial Report. While the benefit is currently funded on a pay-go basis, paying only the actual cost of the benefit in the current fiscal year, is not fiscally sustainable over the long term.

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Agenda Item No. 12.

Consistent with best practices, the City Council authorized the establishment of a Section 115 irrevocable trust in June 2009. The approved Fiscal Year 2023/24 Operating Budget also includes set aside reserves to contribute towards the OPEB trust (CERBT). As a result, $2 million ($1 million from the General Fund Reserves and $1 million from Measure T Reserves) will be contributed to the OPEB 115 Trust. The additional contributions to the trust will allow for long-term investment and generate interest earnings to offset the continued increase in providing this benefit. The General Fund pay-go amount included in the Fiscal Year 2023/24 budget is $1,572,000.

OPEB Funding Policy Document
The Government Finance Officers’ Association recommends government agencies implement an OPEB funding policy that codifies their commitment to fund benefit based on the actuarial valuation report.

Establishing a funding policy embodies the principle of a prudent governance practice. The proposed OPEB Funding policies allow for the City to make the required ADC, elect the minimum required contribution as the pay-go method, or contribute somewhere in between based on the City’s financial condition.

The purpose of the OPEB Funding Policy is to guide prudent financial management of the City’s OPEB program. The City’sOPEB Funding Policy documents the method the City will use to determine its ADC and establish a sustainable plan to fund the long-term cost of benefits to City employees and retirees.

The proposed policy (Exhibit A to Resolution No. 23-4714) is consistent with the priority to adopt financially sound policies and procedures that are prudent and consider long-term financial planning and stability.

FISCAL IMPACT
There is no fiscal impact associated with the adoption of the OPEB Funding Policy. On June 6, 2023, the City Council approved the adoption of the Operating Budget for Fiscal Year 2023/24, which included a $2,000,000 contribution to the OPEB 115 Trust (CERBT).

ATTACHMENTS

1. Resolution No 23-4714
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RESOLUTION NO. 23-4714

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF MURRIETA,

CALIFORNIA, APPROVING THE ADOPTION OF THE OTHER POST
EMPLOYMENT BENEFITS (“OPEB”) FUNDING POLICY

WHEREAS, t he City of Murrieta (“City”) provides retirement benefits to its employees by contracting with the California Public Employees Retirement System (“CalPERS”); and

WHEREAS, beginning in the fiscal year ending June 30, 2018, the City must recognize the Other Post Employment Benefits (“OPEB”) unfunded liabilities in its Comprehensive Annual Financial Report due to the implementation of Governmental Accounting Standards Board Statement No. 74 and 75; and

WHEREAS, the City ’s current pay -as-you-go ( “pay-go”) funding approach for OPEB is not financially sustainable over the long-term; and

WHEREAS, public agencies have the option to address OPEB costs through a Section 115 Public Agency Trust; and

WHEREAS, on June 2, 2009, the City ’s City Council authorized participation in the California Employers’ Retiree Benefit Trust (CERBT) Fund, which is a Section 115 irrevocable trust fund dedicated to prefunding OPEB; and

WHEREAS, assets held in a Section 115 Irrevocable Trust can be diversely invested in a prudent fashion per Government Code Sections 53620 through 53622; and

WHEREAS, an OPEB Funding Policy establishes a methodology and a process for funding current and future costs associated with the City’s contractual obligations to provide retirement benefits as set forth in the City’s labor agreements.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF MURRIETA, CALIFORNIA, DOES HEREBY RESOLVE AS FOLLOWS:

Section 1. That the City Council hereby adopts the Other Post Employment Benefits Funding Policy, attached hereto as Exhibit A.

PASSED AND ADOPTED this 7th day of November 2023.

Lisa DeForest, Mayor

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ATTEST:

Cristal McDonald, City Clerk

APPROVED AS TO FORM:

Tiffany J. Israel, City Attorney

STATE OF CALIFORNIA )
COUNTY OF RIVERSIDE )§

CITY OF MURRIETA )

I, Cristal McDonald, City Clerk of the City of Murrieta, California, do hereby certify that the foregoing Resolution No. 23-471 4 was duly passed and adopted by the City Council of the City of Murrieta at the regular meeting thereof, held on the 7th day of November 2023, and was signed by the Mayor of the said City, and that the same was passed and adopted by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

Cristal McDonald, City Clerk
Resolution No. 23-4714

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Exhibit A

City of Murrieta Pension Funding Policy Page 1 Adopted _

CITY OF MURRIETA

OTHER POST-EMPLOYMENT BENEFITS (OPEB)

FUNDING POLICY

I - INTRODUCTION

The City of Murrieta (“City”) provides a healthcare benefit for all eligible employees. The healthcare plan pays all, or a portion of, health insurance premiums for qualified retirees and their survivors and dependents. Healthcare benefits are also referred to as Other Post-Employment Benefits or “OPEB”.

II – PURPOSE

To ensure that the City’s OPEB program is financially sustainable, the program should accumulate adequate resources in a systematic and disciplined manner over the active service life of benefitting employees. The City’s OPEB Funding Policy documents the method the City will use to determine its Actuarially Determined Contributions (“ADC”) to fund the long-term cost of benefits to City employees and retirees. The policy also:

• Demonstrates prudent financial management practices; and • Promotes long-term planning and strategic planning; and • Provides guidance in making annual budget decisions; and • Demonstrates to employees and the public how OPEB will be funded to ensure adequate funding for negotiated benefits.

III – BACKGROUND

1. Obligations
The City sponsors a single -employer defined benefit OPEB plan that provides medical and prescription drug coverage at retirement. Employees may continue health coverage with the City at retirement for themselves, their spouses, and dependents for life once they me et certain eligibility requirements and as long as required contributions are made. The City contribution for retirees differs depending on the retirement date from City employment and hire date, as described below.

Members of all groups who retired from the City prior to July 1, 2007, receive a monthly contribution of $695.

The Murrieta General Employees Association (“MGEA”) and Murrieta Supervisors Association (“ MSA”) groups and employees covered by the Management and Confidential Compensation (M&C) Plan hired prior to January 1, 2008, who choose to continue their CalPERS health insurance upon retirement, are eligible to receive a monthly contribution to a Retirement Health Savings (“RHS”) Plan in the amount of $833. Those hired after January 1, 2008, but before July 14, 2014, and retire 591
Exhibit A

City of Murrieta Pension Funding Policy Page 2 Adopted _

with 10 years of City service can receive $360 per month until Medicare age and then will receive the minimum mandated amount for employer contributions to participate in Public Employees Medical and Hospital Care Act ( “PEMHCA”) as determined by CalPERS (commonly referred to as the PEMHCA minimum contribution). Those hired after January 1, 2008, but before July 14, 2014, and who retire with less than 10 years of City service and those hired after July 15, 2014, and who retire from the City, will receive the PEMHCA minimum contribution.

Employees of the Murrieta Police Officers Association (“MPOA”) and Murrieta Police Management Association (“MPMA”) groups hired prior to July 1, 2007, who choose to continue their CalPERS health insurance upon retirement are eligible to receive a monthly contribution to an RHS Plan in the amount of $833. Those hired after July 1, 2007, who retire with 10 years of City service can receive $360 per month until Medicare age and then will receive the PEMCHA minimum contribution. Those hired after July 1, 2007, who retire with less than 10 years of City service will receive the PEMCHA minimum contribution.

Employees of the Murrieta Firefighters Association (“ MFA”) and Murrieta Fire Management Association (“MFMA”) groups hired prior to January 1, 2010, who choose to continue their CalPERS health insurance upon retirement are eligible to receive a monthly contribution to an RHS in the amount of $833. Those hired after January 1, 2010, who retire with 10 years of City service can receive $360 per month until Medicare age and then will receive the PEMCHA minimum contribution. Those hired after January 1, 2010, who retire with less than 10 years of City service will receive the PEMCHA minimum contribution.

2. Contributions

The City shall endeavor to contribute 100% of the ADC. The ADC is the recommended contribution that, if paid on an ongoing basis, is expected to provide sufficient resources to fund (a) future normal cost (cost for new service) and (b) the amortized unfunded liability (cost for past service).

A. OPEB Actuarially Determined Contribution (ADC)
The City will engage an OPEB actuary to determine the City’s ADC based on biennial actuarial valuations. The ADC will include the normal cost for current service and amortization of the unfunded OPEB liability over a closed-end period not to exceed 20 years. The normal cost will be calculated using the entry-age normal cost method using appropriate economic and non-economic assumptions.

The City will review the actuarial valuations to validate the completeness and accuracy of the employee census data and the reasonableness of the actuarial assumptions. Actuarial valuations involve estimates and assumptions about the probability of occurrence of events far into the future. Actuarially determined amounts are subject to continual revision as actual results are compared to past expectations and new estimates are made about the future.
592
Exhibit A

City of Murrieta Pension Funding Policy Page 3 Adopted _

IV – POLICY

It is the policy of the City to fulfill its obligation to maintain fiscally responsible management practices and to ensure that promised pension benefits are funded. To that end, the City will meet its pension funding obligations as follows:

1. OPEB Prefunding Trust (Trust)
As a well-known best practice, the City endeavors to appropriate 100% of the ADC each year during the annual budget process and contribute an equal amount to the OPEB Prefunding Trust (“Trust”). Optionally, to avoid potential investment risk, the City may contribute to the Trust an a mount equal to the ADC but net of the current-year estimated retiree benefit payments and implied subsidy to the Trust.

At its discretion, the City may reimburse itself from the Trust for all benefits paid to retirees and beneficiaries as well as any implied subsidy contributed to the Trust.

2. Pay-Go Funding
From time to time, budgetary hurdles may hinder the City’s ability to contribute the full ADC to the Trust. However, at a minimum, the City is fully committed to fully fund its ongoing promised benefit to eligible retirees and their beneficiaries on a Pay-Go basis.

3) Surplus Proceeds
Nothing in this policy shall preclude the City from making additional discretionary contributions to the Trust to increase the funded status of the long -term OPEB obligation.

V – REPORTING and TRANSPARENCY

Funding of the City’s OPEB liability should be transparent to all parties , including City employees, retirees, the City Council , and Murrieta residents. To achieve this level of transparency, the following information shall be available:

a. Copies of the biennial actuarial valuations for the City’s OPEB plan shall be made available to the City Council.
b. The City’s Annual Comprehensive Financial Report shall be published on its website. This report includes information on the City’s OPEB plan, contributions to the OPEB Trust, and the funded status of the plan.
c. The City’s biennial operating budget shall include each year, appropriations for ADC contributions to the OPEB Trust or pay-go costs , at a minimum, to fund promised retiree benefits. These appropriations will be updated each year during the City’s mid-year budget review process that will be provided to the City Council for approval.
d. City staff will provide an updated funded status update to the City Council at least annually.

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Exhibit A

City of Murrieta Pension Funding Policy Page 4 Adopted _

VI - POLICY REVIEW

To ensure that adequate resources are being accumulated to meet the City’s OPEB goals, the City will review this policy biennially in conjunction with the completion of its OPEB actuarial valuations.
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CITY OF MURRIETA
City Council Meeting Agenda
Report
11/7/2023
Agenda Item No. 13.

TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Anthony Conrad, Police Chief
PREPARED BY: Dawnn Jackson, Management Analyst - Police SUBJECT: Acceptance of a Patrick Leahy Bulletproof Vest Partnership Grant Award from the U.S. Department of Justice

RECOMMENDATION
Accept a Patrick Leahy Bulletproof Vest Partnership Grant Award from the U.S. Department of Justice Office of Justice Programs in the amount of $1,095.64; and
Amend the Fiscal Year 2023/24 Operating Budget to allocate and appropriate the grant funds.

PRIOR ACTION/VOTE
On June 6, 2023, the City Council approved Resolution No. 23-4671, adopting the City's Operating Budget for Fiscal Years 2023/24 and 2024/25 (Vote: 4-0-1).

CITY COUNCIL GOAL
Provide a high level of innovative public safety.

BACKGROUND
The U.S. Department of Justice (DOJ) sets forth an annual grant program designed to assist police departments in the procurement of state-of-the-art bulletproof vests to be worn by police officers. The program was authorized in 1999 to provide critical resources for state and local governments and their employees. The Office of Justice Programs, Bureau of Justice Assistance administers the program. The program contributes 50% of the cost of bulletproof vests for peace officers employed by eligible applicant agencies. The funding and eligibility criteria vary from year to year.

The DOJ, Office of Justice Programs, and Bureau of Justice Assistance have awarded the Murrieta Police Department a bulletproof vest program grant for $1,095.64. The grant will reimburse the City of Murrieta 50% of the cost for each ballistic vest purchased between April 1, 2023, and March 31, 2024, up to the total amount awarded to the City of Murrieta.

FISCAL IMPACT
A match or cost share of 50% is required for participation in the DOJ Patrick Leahy Bulletproof Vest CITY OF MURRIETA Printed on 11/2/2023Page 1 of 2
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Agenda Item No. 13.

A match or cost share of 50% is required for participation in the DOJ Patrick Leahy Bulletproof Vest Partnership Grant. Funding for the local match is available in the Police Department operations budget. This grant is reimbursable, requiring the City to expend funds before requesting reimbursement. The recommended action associated with receiving this grant is to increase the revenue budget in the amount of $1,095.64 in the Grant Fund intergovernmental revenue account 36100300-42222 50149361-42222 and increase the appropriation in the amount of $1,095.64 in 3610030-60880 50149361-60880 under general ledger key 3610030.

ATTACHMENTS

1. Fiscal Year 2023 BVP Application & Award
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5/5/23, 8:45 AM Jurisdiction's Handbook
https://vests.bja.ojp.gov/bvp/vests/roles/apps/submit_app_to_bvp.jsp?doUpdate=Y&Application_Id=23034896&Jurisdiction_Id=&page=submitAppToJur2 1/2

APPLICATION SUBMITTED
You have already submitted the application. For your reference, the summary data for your Application for Funding is listed below.

APPLICATION PROFILE
Participant MURRIETA CITY
Fiscal Year 2023
Number of Agencies Applied 0
Total Number of Officers for
Application 105
Number of Officers on Approved
Applications 105

APPLICATION PROFILE
Fiscal Year 2023
Vest Replacement Cycle
4 Number of Officers 105
Number of
Emergency
Replacement
Needs
Number of
Stolen or
Damaged
0 Number of
Officer
Turnover
6 APPLICATION FOR FUNDING
Total QuantityTotal Extended CostTotal Shipping & Handling CostTotal Cost 26 $21,424.00 $1,660.36 $23,084.36
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5/5/23, 8:45 AM Jurisdiction's Handbook
https://vests.bja.ojp.gov/bvp/vests/roles/apps/submit_app_to_bvp.jsp?doUpdate=Y&Application_Id=23034896&Jurisdiction_Id=&page=submitAppToJur2 2/2 Print For Records
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CA HEMET CITY $12,299.63
CA HERCULES CITY $3,000.00
CA HERMOSA BEACH CITY $3,990.00
CA HOLLISTER CITY $7,080.00
CA HUMBOLDT COUNTY $2,460.91
CA HUNTINGTON PARK CITY $6,561.12
CA INDIO CITY $11,882.00
CA INGLEWOOD CITY $2,732.40
CA IRWINDALE CITY $4,800.76
CA JACKSON CITY $1,448.00
CA KERMAN CITY $4,032.00
CA KERN COUNTY $19,181.42
CA KING CITY $4,250.00
CA KINGSBURG CITY $8,278.43
CA LA HABRA CITY $4,350.00
CA LA MESA CITY $5,500.00
CA LAGUNA BEACH CITY $7,396.35
CA LAKEPORT CITY $2,775.85
CA LARKSPUR CITY $5,185.00
CA LEMOORE CITY $6,557.69
CA LIVERMORE CITY $16,193.36
CA LODI CITY $13,355.00
CA LOMPOC CITY $7,120.41
CA LOS ALTOS CITY $2,096.89
CA LOS ANGELES CITY $32,271.05
CA LOS ANGELES UNIF SCH DIST $7,365.50
CA LOS BANOS CITY $6,301.57
CA LOS GATOS TOWN $6,402.56
CA MADERA COUNTY $1,522.31
CA MANHATTAN BEACH CITY $9,460.80
CA MANTECA CITY $11,622.25
CA MARINA CITY $1,598.00
CA MENDOCINO COUNTY $23,053.14
CA MENIFEE CITY $922.82
CA MERCED CITY $8,036.98
CA MERCED COUNTY $9,723.31
CA MILPITAS CITY $7,628.91
CA MONO COUNTY $8,052.47
CA MONROVIA CITY $7,898.46
CA MONTCLAIR CITY $5,695.82
CA MONTEREY CITY $5,494.61
CA MONTEREY PARK CITY $2,941.48
CA MORGAN HILL CITY $10,539.21
CA MOUNTAIN VIEW CITY $9,074.28
CA MURRIETA CITY $1,095.64
CA NAPA CITY $16,992.86
CA NEVADA COUNTY $927.67
CA NEWARK CITY $6,007.13
CA NEWMAN CITY $3,243.52

CITY OF MURRIETA
City Council Meeting Agenda
Report
11/7/2023
Agenda Item No. 14.

TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Anthony Conrad, Police Chief
PREPARED BY: Dawnn Jackson, Management Analyst - Administration SUBJECT: Acceptance of a Selective Traffic Enforcement Program Grant from the State of California Office of Traffic Safety Grant

RECOMMENDATION
Accept a Selective Traffic Enforcement Program Grant Award from the State of California Office of Traffic Safety of $210,000; and
Amend the Fiscal Year 2023/24 Operating Budget to allocate and appropriate the grant fund.

PRIOR ACTION/VOTE
On June 6, 2023, the City Council approved Resolution No. 23-4671, adopting the City's Operating Budget for Fiscal Years 2023/24 and 2024/25.

CITY COUNCIL GOAL
Provide a high level of innovative public safety.

BACKGROUND
In an effort to reduce traffic collisions in the City of Murrieta (City) and combat intoxicated driving, the Police Department regularly seeks government grant funds for equipment, supplies, and salaries for traffic enforcement operations. In January 2023, the Police Department applied for a grant from the California Office of Traffic Safety (OTS). A comprehensive collision reduction safety program was proposed with the overall goal of reducing fatal and injury traffic collisions caused by intoxicated drivers, speeding, stop violations, and other primary collision factors. Additionally, some of the grant funds are specifically allocated for equipment purchases. One of the pieces of equipment requested and granted was for the purchase of a new motorcycle to help officers assigned to the traffic division better serve the community. The Police Department was awarded a one-year $210,000 Traffic Safety Grant (OTS Grant No. PT24126).

The overall goals of this program will be achieved through "best practice" strategies that will be conducted on an overtime basis. The funded strategies will include "Driving Under the Influence" (DUI) saturation patrols to apprehend drunk drivers, traffic enforcement operations, DUI and license checkpoints, DUI warrant operations, educational presentations, and enforcement operations aimed at educating pedestrians, motorcyclists, and bicyclists. The program will also concentrate on speeding, aggressive driving, stop violations (red lights and CITY OF MURRIETA Printed on 11/2/2023Page 1 of 2
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Agenda Item No. 14.
bicyclists. The program will also concentrate on speeding, aggressive driving, stop violations (red lights and stop signs), distracted driving, and seatbelt and child restraint violations. These strategies are designed to earn media attention, thus enhancing the overall deterrent effect.

FISCAL IMPACT
A Revenue budget needs to be established for the OTS Grant in General Ledger Revenue Account 3550030- 42222 and the Grant Job Ledger Account 50150355-42222 in the amount of $210,000. An Expenditure Budget also needs to be established in General Ledger OrgKey 3550030 in various accounts and the Grant Job Ledger Project 50150355 in various accounts in the amount of $210,000 (i.e., overtime, benefits, and other direct costs). There is no match or cost share required for the OTS Selective Traffic Enforcement Program Grant. However, this grant is reimbursable in nature, requiring the City to expend funds prior to requesting reimbursement.

ATTACHMENTS

1. Signed Office of Traffic Safety Agreement for Grant No. PT24126 CITY OF MURRIETA Printed on 11/2/2023Page 2 of 2
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CITY OF MURRIETA
City Council Meeting Agenda
Report
11/7/2023
Agenda Item No. 15.

TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Bob Moehling, Director of Public Works
PREPARED BY: Jeff Hitch, City Engineer
SUBJECT: Notice of Completion for Traffic Signal Modification at Hancock Avenue and Milkwood Lane/Leafwood Drive

RECOMMENDATION
Accept the improvements for the Hancock Avenue and Milkwood Lane/Leafwood Drive traffic signal modification project, CIP No. 8257; and
Direct the City Clerk to issue and record a Notice of Completion and release bonds in accordance with State Law and City Ordinances; and release any remaining retention from CIP 8257 in accordance with State Law and City Ordinances.

PRIOR ACTION/VOTE
On August 2, 2022, the City Council awarded the contract for the construction of the traffic signal modification at the intersection of Hancock Avenue and Milkwood Lane/Leafwood Drive to the lowest responsible bidder, Alfaro Communications Construction, Inc., in the amount of $389,961.48 as part of the Citywide Signal Modifications Project, CIP No. 8257 (Vote: 5-0).

On August 15, 2023, the City Council conducted a public hearing and adopted Resolution No. 23-4699, approving Fiscal Year 2023/24 to Fiscal Year 2027/28 Capital Improvement Plan budget, which included the Citywide Signal Modifications Project, CIP No. 8257 (Vote: 5-0).

CITY COUNCIL GOAL
Plan, program and create infrastructure development.

BACKGROUND
On August 2, 2022, the City Council awarded the contract for the construction of the Hancock Avenue and Milkwood Lane/Leafwood Drive traffic signal modification project to Alfaro Communications Construction, Inc., in the amount of $389,961.48. The project installed protected left-turn phasing for the Hancock Avenue approaches to the intersection, split phasing for the Milkwood Lane and Leafwood Drive approaches to the intersection, and upgraded all pedestrian ramps. The purpose of the improvements was to enhance safety by adding protected turning movements and reducing the potential for collisions.

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Agenda Item No. 15.

Construction began on September 26, 2022, and was completed on August 15, 2023. Based upon field measured quantities and contract change orders (CCO) for improvements installed, the final amount paid to the contractor is expected to be $414,086.34 which includes two CCO’s.The first CCO, in the amount of $5,116.35, included furnishing and installing McCain signal equipment, as that is the equipment that is currently stocked at the City of Murrieta’s(City) yard for maintaining the traffic signals. The second CCO, in the amount of $19,008.51, included additional concrete work performed at the City’s request.

City staff has inspected the improvements and found them to be satisfactory; thereby recommends formal acceptance by City Council.

FISCAL IMPACT
The construction costs were provided in CIP 8257, using Measure A and Gas Tax funds.

ATTACHMENTS

1. Notice of Completion

2. Vicinity Map
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RECORDING REQUESTED BY:

CITY OF MURRIETA
When recorded return to:

City of Murrieta
Attn: City Clerk
1 Town Square
Murrieta, CA 92562 Space above for Recorder’s Use

NOTICE OF COMPLETION
No Fee Per Government Code 27383
Notice is hereby given that:

1) The undersigned is owner of the interest or estate stated bel ow in the property hereinafter described.
2) The full name of the undersigned is City of Murrieta, a municipal corporation. 3) The full address of the undersigned is 1 Town Square, Murrieta, CA 92562. 4) The nature of the title of the undersigned is: In ROW Easement 5) A work of improvement on the property hereinafter described was completed on August 15, 2023.
6) The name of the contractor, if any, for such work of improvement is Alfaro Communications Construction, Inc.
7) The property on which said work of improvement was completed is in the City of Murrieta, County of Riverside, State of California, and is described as follows: Traffic Signal Modification at Hancock Avenue and Milkwood Lane/Leafwood Drive, CIP NO. 8257. 8) The street address of said project is the intersection of Hancock Avenue and Milkwood Lane/Leafwood Drive.

CITY OF MURRIETA

______________________________
Jeffrey J. Hitch, City Engineer

VERIFICATION OF CITY CLERK

I, the undersigned, say:

I am the City Clerk of the City of Murrieta; the City Council of said City on __________________, 20____, accepted the above described work as completed and ordered that a Notice of Completion be filed.

I declare under penalty of perjury that the foregoing is true and correct.

Executed on ________________, 20____, at Murrieta, California.

CITY OF MURRIETA

______________________________
Crystal McDonald, City Clerk
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CITY OF MURRIETA
City Council Meeting Agenda
Report
11/7/2023
Agenda Item No. 16.

TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Kristen Crane, Assistant City Manager
PREPARED BY: Martha Samaniego, Management Analyst
SUBJECT: Lease Agreement and Site Preparation Costs for Annex Space for City Hall

RECOMMENDATION
Authorize the six (6) year lease agreement with Golden Spring Capital, LLC for office space located at 24620 Jefferson Avenue, in a form approved by the City Attorney, to be executed by the City Manager; Approve a budget appropriation from the General Fund Unassigned Fund Balance for the agreed upon lease of $97,788 for the remainder of Fiscal Year (FY) 2023/24 and $237,056 for FY 2024/25, for a total of $334,844 for the first and second year of the site lease and estimated operating expenditures; Establish Capital Improvement Project (CIP) 21040. Approve a budget appropriation of $467,123, which includes a 10% contingency, for the one-time site preparation and furnishing costs, including office furniture, storage cabinets, information technology connections, network cabling, office equipment, paint and drywall repair, and security equipment for the leased site;
Authorize use of Measure T Facility Repair Reserves of $450,000, which funds were set aside specifically for this purpose. The balance needed for the budget establishment of $17,123 will come from Measure T's Unassigned Fund Balance; and
Authorize the City Manager or designee to execute any agreements on behalf of the City for one-time site preparation and furnishing costs, including office furniture, storage cabinets, IT connections and network cabling, office equipment, paint and drywall repair, and security equipment for a total amount not to exceed $467,123, and authorize the City Manager to execute any amendments or change orders in the amount not to exceed the contingency amount.

PRIOR ACTION/VOTE
None.

CITY COUNCIL GOAL
Foster and promote an engaged, connected and caring community.

The City of Murrieta (City) has approximately 120 employees that work at City Hall. Within the past year, after CITY OF MURRIETA Printed on 11/2/2023Page 1 of 5
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Agenda Item No. 16.

The City of Murrieta (City) has approximately 120 employees that work at City Hall. Within the past year, after having deferred necessary new staff positions for a variety of reasons and following extensive review, the City has added several new employee positions to provide effective and efficient services to the public. Earlier this year, the City also completed a refurbishment to the interior of City Hall, which resulted in approximately 12 additional workstations. Even with those new workstations, the forthcoming positions to be filled will require additional staff workspace.

The City has identified a vacant commercial site located at 24620 Jefferson Avenue (across from City Hall in the retail center) which can optimally hold internal service staff, such as those from the Administrative Services and Community Services departments. The proximity of this location to City Hall makes it ideal to serve as a long-term auxiliary space until a permanent solution is available. When complete, the space is anticipated to provide workspace for up to 21 employees.

Summary of Lease Agreement
The American Industrial Real Estate Association (AIR) Standard Multi-Tenant Shopping Center Lease - Net, together with the First Addendum to Lease Agreement (Lease) with Golden Springs Capital, LLC (Landlord) is attached to this report (Attachment 1). The form used by Landlord was a standard retail lease used for shopping centers. However, since the Landlord does not own the entire Shopping Center but only a single building within the Center, the Lease form had to be extensively modified by the City Attorney to conform to the agreed deal terms.

The following is a brief summary of the key Lease terms:
· Lease Premises: approximately 8,409 square feet (Units B & C) at 24620 Jefferson Avenue · Right of first offer for adjacent Unit A if and when available · Term:
· Base term: 6 years
· Two options to extend each for 5 years with rent adjusted to prevailing market terms. · Use: General and administrative offices and any other legally permitted use. · Rent:
· Base Rent: $9,249.20 per month, increased annually by 3%. Two months free rent. · Common Area Operating Expenses: $4,624 (comprised of building expenses and pass through of shopping center expenses prorated and applicable to Building per Shopping Center CC&Rs). Note: If County grants an exemption from real estate taxes for space occupied by City, the benefit of same will accrue to City.
· Condition of Premises: City to accept AS-IS subject to certain representations by Landlord as to condition at Lease commencement and required Landlord improvements. · Required Landlord Improvements:
· Full separation from Unit A
· Water, gas & electricity to be separately metered.
· Water heater to be modified to serve only Lease Premises. · Miscellaneous additional requirements.
· Tenant Improvements:

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Agenda Item No. 16.
· To be made by City as City requires.
· Tenant Improvement Allowance: $21,170 to be paid after completion. · Utilities to Premises: City to pay. (Note: water, gas and electricity are separately metered) · Signage: Right to signage on outside of Premises and a sign on monument sign. · Commission: The commission is to be paid by Landlord with commission split between Landlord and City’s brokers. No cost to City.

Cost Analysis
The total cost for the first year of the Lease is $234,690 comprised of (a) Base Rent of $110,990, (b) estimated Common Area Operating Expenses (CAM) cost of $55,500, and (c) estimated cost for utilities in the amount of $68,200. Over the initial Lease Term (6 years), the City is expected to pay (i) $717,931 in Base Rent payments, (ii) $358,997 in CAM costs, and (iii) $419,567 for utilities, for a total cost of $1,496,496. Table 1 shows the projected expenditures over the initial 6 year Lease Term.

Table 1 - Annual Cost for Lease and Operating Expenditures Year Annual Base
Lease
Est. CAM
Annual Costs
Est.

Operating
Expenditures
Total Annual
Payment
Lease Period
(Feb. To Jan.)
1 $110,990 $ 55,500 $ 68,200 $ 234,690 2024 to 2025 2 $114,320 $ 57,165 $ 68,882 $ 240,367 2025 to 2026 3 $117,750 $ 58,880 $ 69,571 $ 246,201 2026 to 2027 4 $121,282 $ 60,646 $ 70,267 $ 252,195 2027 to 2028 5 $124,921 $ 62,466 $ 70,969 $ 258,356 2028 to 2029 6 $128,668 $ 64,340 $ 71,679 $ 264,687 2029 to 2030 Total $717,931 $358,997 $419,567 $1,496,496
In addition, the City will be responsible for the cost of utilities, including but not limited to electricity, water, trash, and other services needed.

The Lease Term will commence on the first to occur of either (i) the date the City opens the office space to the public on the Lease Premises, or (ii) one hundred twenty (120) days after the Landlord delivers possession of the Lease Premises to the City. At this time, it is anticipated the space will be open for service approximately February 1, 2024.

Tenant Improvements and Furnishings
To make the site a usable workspace, minor alterations and improvements are needed, such as office furnishings; office equipment; printers; network cabling and internet connection points; security systems, such as motion sensors, and door access controls; and minor interior renovations. The current estimated cost for these improvements is $424,657, as shown in Table 2. The requested appropriation includes an additional contingency of ten percent (10%), amounting to $42,466, for unforeseen expenditures. NOTE: The City will be reimbursed by Landlord for $12,170 as the Tenant Improvement Allowance.

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Agenda Item No. 16.

Table 2 - Estimated Cost for Site Preparation and Furnishing (CIP Budget) Category Total Cost
Office Equipment and Furniture $303,700
Tenant Improvements $ 24,400
Security $ 89,557
Misc. Expenditures (Movers, Carpet Cleaning) $ 7,000 Estimated Total Cost for Site Preparation $424,657
Contingency (10%) $ 42,466
Total Project Cost $467,123
The City’s Purchasing Policy allows for procuring goods and services through cooperative purchasing agreements per Murrieta Municipal Code Section 3.08.295, which states the City “may buy directly from a vendor at a price established by another public agency when the other public agency has made its purchase in a competitive manner.” These “piggyback”contracts are already vetted through other public agencies’public procurement process and their agreements have clauses that establish and allow other public agencies such as the City to use the same pricing for the same service. As an example, G/M Business Interiors which provides office and cubicle furniture, has an existing agreement with the County of Riverside and a piggyback clause exists. As such, the City can use the County’sagreement to obtain services through G/M Business Interiors in compliance with the City’s Municipal Code. Per that provision, the City is proposing to obtain services, including the purchase of cubicles and office furniture through G/M Business Interiors, Inc. Other purchases and services needed to complete the site preparation and move will be procured in conformance with the City’s Purchasing Policy.

Following the completion of tenant improvements and the delivery of furnishings, the site is expected to be operational by February 2024.

FISCAL IMPACT
In addition to the appropriations requested below, staff also requests the appropriation of Measure T Facility Repair Reserves of $450,000 to defray the cost of this project. Other than the amount from the Facility Repair Reserves, the balance of the funding will come from the General Fund and Measure T Unassigned Fund Balances.

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Agenda Item No. 16.

ATTACHMENTS

1. AIR CRE Standard Multi-Tenant Shopping Center Lease - New with attached First Addendum to Lease Agreement with Golden Spring Capital, LLC in Draft Form CITY OF MURRIETA Printed on 11/2/2023Page 5 of 5
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1. BasicProvisions("BasicProvisions").

1.1 ParƟes. ThisLease("Lease"),datedforreferencepurposesonly October__,2023 ,ismadebyandbetween GoldenSpringCapitalLLC,a Californialimitedliabilitycompany ("Lessor")and CityofMurrieta,amunicipalcorporation ("Lessee") (collecƟvelythe"ParƟes",orindividuallya "Party").

1.2 Premises: Thatcertain porƟonoftheShoppingCenter(as definedbelow),includingallimprovementsthereinortobeprovidedbyLessor underthetermsofthisLease,commonlyknownas(streetaddress,unit/suite,city,state): UnitB&C("Premises")whicharepartof24620Jefferson Ave,Murrieta, CA92562 ("BuildingParcel")whichcontainsabuildingwith8,404squarefeet("Building") ) ("Premises"). ThePremisesarelocatedinthe Countyof Riverside andgenerallydescribedas(describe brieflythenatureofthePremises): approximately4,868squarefeetspace . In addiƟonto Lessee'srightstouseandoccupythePremisesas hereinaŌer specified,Lesseeshallhavenon-exclusiverightstotheCommonAreas(as definedin Paragraph2.7below)as hereinaŌer specified,butshallnothaveanyrightstotheroof,theexteriorwalls,orthe uƟlityracewaysoftheBbuilding ParcelcontainingthePremises("Building")ortoanyotherbuildingsintheShoppingCenter.ThePremisesandtheBuildingaresituatedwithinthe ShoppingCenterknownas Olivewood . ThePremises,theBuilding,theCommonAreas,andallotherbuildingsandimprovementswithinsaid ShoppingCenter,togetherwiththelanduponwhichtheyarelocated,areherein collecƟvelyreferredtoasthe"ShoppingCenter." (Seealso Paragraph2).

LessorownsonlythelotcontainingtheBuildingParcel(APN949-600-015)whichispartoftheShoppingCenter.Allreferencesherein totheBuildingshallincludeallrightsspeciϐiedinthatcertainDeclarationofCovenants,Conditions,RestrictionsandReciprocalEasements recordedonDecember12,2011asInstrumentNo.2011-0546359inthe OfϐicialRecordsofRiversideCounty("CC&Rs"). Lesseeshallhave thenon-exclusiverightsappurtenanttotheBuildingParcelpursuanttotheCC&Rs.ForpurposesofthisLease,allreferencestothe "CommonArea"shallmeanonlythoseCommonAreas(as deϐinedinCC&Rs)applicabletotheBuildingParcelandinteriorutilityraceways andinstallationswithinthePremisesforusebyoccupantsoftheBuilding. Lessordoesnothavedirectoversightorcontrolofallthe CommonAreasintheShoppingCenterotherthanthoserightsasan"Owner"oftheBuildingParceltotheextent speciϐiedintheCC&Rs.

1.3 Term: Six(6) yearsand months("OriginalTerm")commencing ("CommencementDate")andending ("ExpiraƟonDate"). (SeealsoParagraph3)SeeParagraph53.

1.4 EarlyPossession: IfthePremisesareavailableLesseemayhavenon-exclusivepossessionofthePremisescommencing ("Early PossessionDate"). (SeealsoParagraphs3.2and3.3)

1.5 BaseRent: $9,249.20 permonth("BaseRent"),payableonthe First(1st) dayofeachmonthcommencing RentCommencement Date as deϐinedinParagraph54 . (SeealsoParagraph4)
Ifthisboxischecked,thereareprovisionsinthisLeasefortheBaseRenttobeadjusted. SeeParagraph 51 .

1.6 PercentageRentRate: percent( %)ofGrossSales. PercentageRentshallbedueandpayableinaccordancewiththeprovisions ofthePercentageRentAddendum,ifany, aƩachedheretoandmadeaparthereof,andParagraph4 hereof.

1.7 Lessee'sShareofCommonArea OperaƟngExpenses: FiftySevenpointNineTwoFive percent( 57.925 %)("Lessee'sShare"). Inthe eventthatthesizeofthePremisesand/ortheShoppingCenterare modifiedduringthetermofthisLease,LessorshallrecalculateLessee'sShareto reflectsuch modificaƟon. ThispercentageappliestoBuildingonly.SeeParagraphs62&63.

1.8 Merchants'AssociaƟonAnnualDues: peryear("Merchants'AssociaƟonDues"). LesseeshallpayMerchants'AssociaƟonDues and/orbecomea memberoftheMerchants' AssociaƟoninaccordancewiththeprovisionsoftheMerchants' AssociaƟonAddendum,if any, aƩachedhereto.

1.9 BaseRentandOtherMoniesPaidUpon ExecuƟon:

1.10AgreedUse: generalandadministrative ofϐiceandanyotherlegallypermitteduse . (SeealsoParagraph6)

1.11AgreedTradeName: CityofMurrieta__ . (SeealsoParagraph6)

1.12InsuringParty. Lessoristhe"InsuringParty". (SeealsoParagraph8)

1.13RealEstateBrokers. (SeealsoParagraph15and25)
tothefollowingagency relaƟonshipsinthisLeasewiththefollowingrealestatebrokers("Broker(s)")and/ortheiragents("Agent(s)"):

Lessor'sBrokerageFirm HarvestRealtyDevelopmentInc. LicenseNo. 01964500 Isthebrokerof(checkone): theLessor;or boththe LesseeandLessor(dualagent).

Lessor'sAgent KeXiao/JessicaZhang LicenseNo. 02072888/01986201 is(checkone): theLessor'sAgent(salespersonorbroker associate);or boththeLessee'sAgentandtheLessor'sAgent(dualagent).

STANDARDMULTI-TENANTSHOPPINGCENTERLEASE-NET
(a) BaseRent: $9,249.20 fortheperiod Third(3rd)MonthRent BaseRentforthe1stand2ndmonthsisentirelyabated. (b) CommonArea OperaƟngExpenses: Thecurrent esƟmatefortheperiod FirstMonth is $4,624.60 . (c) SecurityDeposit: ("SecurityDeposit"). (SeealsoParagraph5) (d) Merchants' AssociaƟonDues: fortheperiod .
(e) Other: for .
(f) TotalDueUpon ExecuƟonofthisLease: $13,873.80 .
(a) RepresentaƟon: EachPartyacknowledgesreceivingaDisclosureRegardingRealEstateAgencyRelaƟonship, confirmsandconsents 632
Lessee'sBrokerageFirm Cushman& WakeϐieldofCalifornia,Inc. LicenseNo. 00616335 Isthebrokerof(checkone): theLessee;or boththeLesseeandLessor(dualagent).

Lessee'sAgent JohnGallivan LicenseNo. 01096309 is(checkone): theLessee'sAgent(salespersonorbrokerassociate);or both theLessee'sAgentandtheLessor'sAgent(dualagent).
(b) PaymenttoBrokers. Upon execuƟonanddeliveryofthisLeasebyboth ParƟes,LessorshallpaytotheBrokersthebrokeragefee agreedtoinaseparate wriƩenagreement(orifthereisnosuchagreement,thesumof or %ofthetotalBaseRent)forthebrokerage servicesrenderedbytheBrokers.

1.14Guarantor. The obligaƟonsoftheLesseeunderthisLeasearetobeguaranteedby ("Guarantor"). (SeealsoParagraph37)

1.15 AƩachments. AƩachedheretoarethefollowing,allofwhich consƟtuteapartofthisLease:
anAddendum consisƟngofParagraphs 53 through 70 ;
asiteplanmarkedExhibit A depicƟngthePremises;
asiteplanmarkedExhibit B depicƟngtheShoppingCenter;
acurrentsetoftheRulesand RegulaƟonsfortheShoppingCenterpertheCC&Rs; acurrentsetoftheSignCriteriafortheShoppingCenterpertheCC&Rs; aWorkLeƩer;
other(specify): (i)CC&Rs;(ii)RentAdjustments (Paragraph51)and (iii)OptionstoExtend(Paragraph52). .

2. Premises.

2.1 Leƫng. LessorherebyleasestoLessee,andLesseeherebyleasesfromLessor,thePremises,fortheterm,attherental,anduponallof theterms,covenantsand condiƟonssetforthinthisLease. WhiletheapproximatesquarefootageofthePremisesmayhavebeenusedinthe markeƟngofthePremisesforpurposesofcomparison,theBaseRentstatedhereinisNOT Ɵedtosquarefootageandisnotsubjecttoadjustment shouldtheactualsizebedeterminedtobe different. NOTE:Lesseeisadvisedtoverifytheactualsizepriorto execuƟngthisLease.

2.2 CondiƟon. LessorshalldeliverthePremisestoLesseebroomcleanandfreeofdebrisontheCommencementDateor theEarly PossessionDate,whichever firstoccurs("StartDate"),and,solongastherequiredservicecontractsdescribedinParagraph7.1(b)beloware obtainedbyLesseeandin effectwithin30daysfollowingtheStartDate,warrantsthatthe exisƟngelectrical,plumbing, firesprinkler,lighƟng, heaƟng, venƟlaƟngandair condiƟoningsystems("HVAC"),loadingdoors,if any,andallother suchelementsinthePremises,otherthanthose constructedbyLessee,shallbeingood operaƟng condiƟononsaiddate,thatthestructuralelementsoftheroof,bearingwallsand foundaƟonof thePremisesshallbefreeofmaterialdefects,andthatthePremisesdonotcontainhazardouslevelsofanymoldor fungi definedastoxicunder applicablestateorfederallaw. Ifanon-compliancewithsuchwarrantyexistsasoftheStartDate,orifoneofsuchsystemsorelementsshould malfuncƟonorfailwithintheappropriatewarrantyperiod,Lessorshall,asLessor'ssole obligaƟonwithrespecttosuch maƩer,exceptasotherwise providedinthisLease,promptly aŌerreceiptof wriƩen noƟcefromLessee seƫngforthwithspecificitythenatureandextentofsuch non-compliance, malfuncƟonorfailure, recƟfysameatLessor'sexpense. Thewarrantyperiodsshallbeasfollows:(i)6monthsastotheHVAC systems,and(ii)30daysastotheremainingsystemsandotherelementsofthePremises. IfLesseedoesnotgiveLessortherequired noƟcewithin theappropriatewarrantyperiod, correcƟonofanysuchnon-compliance,malfuncƟonor failureshallbethe obligaƟonofLesseeatLessee'ssole costandexpense(exceptfortherepairstothe firesprinklersystems,roof,foundaƟons,and/orbearingwalls). Lessoralsowarrants,thatunless otherwise specifiedin wriƟng,Lessorisunawareof(i)anyrecorded NoƟcesofDefault affecƟngthePremise;(ii)anydelinquentamountsdueunder anyloansecuredbythePremises;and(iii)anybankruptcyproceeding affecƟngthePremises.

2.3 Compliance. Lessorwarrantsthattothebestofits knowledgetheimprovementsonthePremisesandtheCommonAreascomplywith thebuildingcodes,applicablelaws,covenantsor restricƟonsofrecord, regulaƟons,andordinances("ApplicableRequirements")thatwerein effect atthe Ɵmethateachimprovement,or porƟonthereof,wasconstructed. SaidwarrantydoesnotapplytotheusetowhichLesseewillputthe Premises, modificaƟonswhichmayberequiredbytheAmericanswith DisabiliƟesActoranysimilarlawsasaresultofLessee'suse(seeParagraph 50),ortoany AlteraƟonsor UƟlity InstallaƟons(as definedinParagraph7.3(a))madeortobemadebyLessee. NOTE:Lesseeisresponsiblefor determiningwhetherornottheApplicableRequirements,andespeciallythezoning,areappropriateforLessee'sintendeduse,and acknowledgesthatpastusesofthePremisesmaynolongerbeallowed. If thePremisesdonotcomplywithsaidwarranty,Lessorshall,exceptas otherwiseprovided,promptly aŌerreceiptof wriƩen noƟcefromLessee seƫngforthwith specificitythenatureandextentofsuch non-compliance, recƟfythesameatLessor'sexpense. IfLesseedoesnotgiveLessor wriƩen noƟceofa non-compliancewiththiswarrantywithin6 monthsfollowingtheStartDate, correcƟonofthatnon-complianceshallbethe obligaƟonofLesseeatLessee'ssolecostandexpense. Ifthe ApplicableRequirementsare hereaŌerchangedsoastorequireduringthetermofthisLeasetheconstrucƟonofan addiƟontooran alteraƟonof thePremisesand/orBuilding,the remediaƟonofanyHazardousSubstance,orthereinforcementorotherphysicalmodificaƟonofthePremises and/orBuilding("CapitalExpenditure"),LessorandLesseeshallallocatethecostofsuchworkasfollows:
(a) SubjecttoParagraph2.3(c)below,ifsuchCapitalExpendituresarerequiredasaresultofthe specificanduniqueuseofthePremises byLesseeascomparedwithusesbytenantsingeneral,Lesseeshallbefullyresponsibleforthecostthereof,provided,however,thatifsuchCapital Expenditureisrequiredduringthelast2yearsofthisLeaseandthecostthereofexceeds6months'BaseRent,Lesseemayinsteadterminatethis LeaseunlessLessor noƟfiesLessee,in wriƟng,within10days aŌerreceiptofLessee's terminaƟon noƟcethatLessorhaselectedtopaythe differencebetweentheactualcostthereofandtheamountequalto6months'BaseRent. If Lesseeelects terminaƟon,Lesseeshallimmediately ceasetheuseofthePremiseswhichrequiressuchCapitalExpenditureanddelivertoLessor wriƩen noƟcespecifyinga terminaƟondateatleast90 days thereaŌer.Such terminaƟondateshall,however,innoeventbeearlierthanthelastdaythatLesseecouldlegally uƟlizethePremiseswithout commencingsuchCapitalExpenditure.
(b) IfsuchCapitalExpenditureisnottheresultofthe specificanduniqueuseofthePremisesbyLessee(suchas,governmentally mandatedseismic modificaƟons),thenLessorshallpayforsuchCapitalExpenditureandLesseeshallonlybeobligatedtopay,eachmonthduring 633
theremainderofthetermofthisLeaseoranyextensionthereof,onthedatethatonwhichtheBaseRentisdue,anamountequalto1/144thof the porƟonofsuchcostsreasonablyaƩributabletothePremises. LesseeshallpayInterestonthebalancebutmayprepayits obligaƟonatany Ɵme. If,however,suchCapitalExpenditureisrequiredduringthelast2yearsofthisLeaseorif Lessorreasonablydeterminesthatitisnot economicallyfeasibletopayitssharethereof,Lessorshallhavethe opƟontoterminatethisLeaseupon90daysprior wriƩen noƟcetoLessee unlessLessee noƟfiesLessor,in wriƟng,within10days aŌerreceiptofLessor's terminaƟonnoƟcethatLesseewillpayforsuchCapitalExpenditure.

IfLessordoesnotelecttoterminate,andfailstotenderitsshareofanysuchCapitalExpenditure,Lesseemayadvancesuchfundsanddeductsame, withInterest,fromRent unƟlLessor'sshareofsuchcostshavebeenfullypaid. IfLesseeisunableto financeLessor'sshare,orifthebalanceofthe RentdueandpayablefortheremainderofthisLeaseisnot sufficienttofullyreimburseLesseeonan offsetbasis,Lesseeshallhavetherightto terminatethisLeaseupon30dayswriƩen noƟcetoLessor.
(c) Notwithstandingtheabove,theprovisionsconcerningCapitalExpendituresareintendedtoapply onlytonon-voluntary,unexpected, andnewApplicableRequirements. IftheCapitalExpendituresareinsteadtriggeredbyLesseeasaresultofanactualorproposedchangeinuse, changeinintensityofuse,or modificaƟontothePremisesthen,andinthatevent,Lesseeshalleither:(i)immediatelyceasesuchchangeduseor intensityofuseand/ortakesuchotherstepsasmaybenecessarytoeliminatetherequirementforsuchCapitalExpenditure,or (ii)completesuch CapitalExpenditureatitsownexpense. LesseeshallnothaveanyrighttoterminatethisLease.

2.4 Acknowledgements. Lesseeacknowledgesthat: (a)ithasbeengivenanopportunitytoinspectandmeasurethePremises;(b)ithas beenadvisedbyLessorand/orBrokersto saƟsfyitselfwithrespecttothesizeand condiƟonofthePremises(includingbutnotlimitedtothe electrical,HVACand firesprinklersystems,security,environmental aspects,andcompliancewithApplicableRequirementsandtheAmericanswith DisabiliƟesAct)andtheirsuitabilityforLessee'sintendeduse;(c)Lesseehasmadesuch invesƟgaƟonasitdeemsnecessarywithreferencetosuch maƩersandassumesallresponsibilitythereforasthesamerelatetoitsoccupancyofthePremises;(d)itisnotrelyingonany representaƟonasto thesizeofthePremisesmadebyBrokersorLessor;(e)thesquarefootageofthePremiseswasnotmaterialtoLessee'sdecisiontoleasethe PremisesandpaytheRentstatedherein;and(f)neitherLessor,Lessor'sagents,norBrokershavemadeanyoralor wriƩen representaƟonsor warranƟeswithrespecttosaid maƩersotherthanassetforthinthisLease. In addiƟon,Lessoracknowledgesthat:(i)Brokershavemadeno representaƟons,promisesor warranƟesconcerningLessee'sabilitytohonortheLeaseorsuitabilitytooccupythePremises,and(ii)itisLessor's soleresponsibilityto invesƟgatethe financialcapabilityand/orsuitabilityofallproposedtenants.

2.5 LesseeasPriorOwner/Occupant. The warranƟesmadebyLessorinParagraph2shallbeofnoforceor effectif immediatelypriortothe StartDateLesseewastheowneroroccupantofthePremises. Insuchevent,Lesseeshallberesponsibleforanynecessary correcƟvework.

2.6 VehicleParking.Lesseeshallhavetherighttouse18parkingspaceswithoutcosttoLessee.Lesseeshallnotuseandshallnotpermit itsemployeestouseanyparkingspacesintheShoppingCenterexceptforparkingbyvehiclesthatarenolargerthanfull-sizepassenger automobilesorpick-uptrucks,hereincalled"PermiƩedSizeVehicles." Lesseeshallpermititsemployeestoonlyoccupythoseparkingspaces,if any,asdepictedasemployeeparkingspacesontheShoppingCentersiteplan. Lessormayregulatetheloadingandunloadingofvehiclesby adopƟngRulesand RegulaƟonsasprovidedinParagraph2.9. Novehiclesotherthan PermiƩedSizeVehiclesmaybeparkedintheCommonArea withouttheprior wriƩenpermissionofLessor. In addiƟon:
(a) LesseeshallnotpermitorallowanyvehiclesthatbelongtoorarecontrolledbyLesseeorLessee'semployees,suppliers,shippers, contractorsorinviteestobeloaded,unloaded,orparkedinareasotherthanthosedesignatedbyLessorforsuch acƟviƟes. (b) LesseeshallnotserviceorstoreanyvehiclesintheCommonAreas. (c) IfLesseepermitsorallowsanyoftheprohibited acƟviƟesdescribedinthisParagraph2.6,thenLessorshallhavetheright,without noƟce,in addiƟontosuchotherrightsandremediesthatitmayhave,toremoveortowawaythevehicleinvolvedandchargethecosttoLessee, whichcostshallbeimmediatelypayableupondemandbyLessor.

2.7 CommonAreas- DefiniƟon. Theterm"CommonAreas"is definedinParagraph1.2asallareasand faciliƟesoutsidethePremisesand withintheexteriorboundarylineoftheShoppingCenterandinterior uƟlityracewaysand installaƟonswithinthePremisesthatareprovidedand designatedbytheLessorfrom Ɵmeto Ɵmeforthegeneralnon-exclusiveuseofLessor,LesseeandothertenantsoftheShoppingCenterandtheir respecƟveemployees,suppliers,shippers,customers,contractorsandinvitees,includingparkingareas,loadingandunloadingareas,trashareas, roadways,walkways,drivewaysandlandscapedareas.

2.8 CommonAreas-Lessee'sRights. LessorgrantstoLessee,forthe benefitofLesseeanditsemployees,suppliers,shippers,contractors, customersandinvitees,duringthetermofthisLease,thenon-exclusiverighttouse,incommonwithothers enƟtledtosuchuse,theCommon Areasastheyexistfrom Ɵmeto Ɵme,subjecttoanyrights,powers,andprivilegesreservedbyLessorunderthetermshereoforunderthetermsof anyrulesand regulaƟonsor restricƟonsgoverningtheuseoftheShoppingCenter.Undernocircumstancesshalltherighthereingrantedtousethe CommonAreasbedeemedtoincludetherighttostoreanyproperty,temporarilyorpermanently,intheCommonAreas,northerighttodisplay merchandiseorconductsalesintheCommonAreas. Anysuchstorage,displayor salesshallbepermiƩedonlybytheprior wriƩenconsentof LessororLessor'sdesignatedagent,asexercisedinLessor'ssole discreƟon,whichconsentmayberevokedatany Ɵme. Intheeventthatany unauthorizedstorageordisplaysshalloccurthenLessorshallhavetheright,without noƟce,in addiƟontosuchotherrightsandremediesthatit mayhave,toremovethepropertyandchargethecosttoLessee,whichcostshallbeimmediatelypayableupondemandbyLessor.

2.9 CommonAreas-Rulesand RegulaƟons. Lessororsuchotherperson(s)asLessormayappointshallhavetheexclusivecontroland managementoftheCommonAreasapplicabletotheBuildingParcelandshallhavetheright,from Ɵmeto Ɵme,toestablish,modify,amendand enforcereasonablerulesand regulaƟons("Rulesand RegulaƟons")forthemanagement,safety,care,andcleanlinessofthegrounds,theparking andunloadingofvehiclesandthe preservaƟonofgoodorder,aswellasfortheconvenienceofotheroccupantsortenantsoftheBuildingandthe ShoppingCenterandtheirinvitees. LesseeagreestoabidebyandconformtoallsuchRulesandRegulaƟons,andshalluseitsbest effortstocause itsemployees,suppliers,shippers,customers,contractorsandinviteestosoabideandconform. LessorshallnotberesponsibletoLesseeforthe non-compliancewithsaidRulesand RegulaƟonsbyothertenantsoftheShoppingCenter.Lesseeshalldiligentlyenforceallrightsapplicableto theBuildingParcelundertheCC&Rs.
634

2.10CommonAreas-Changes. Lessorshallhavetheright,inLessor'ssole discreƟon,from Ɵmeto ƟmeasauthorizedbytheCC&Rs applicabletotheBuildingParcel:
(a) Tomakechangesor addiƟonstotheCommonAreas,including,without limitaƟon,changesinthe locaƟon,size,shapeandnumberof driveways,entrances,parkingspaces,parkingareas,loadingandunloadingareas,ingress,egress, direcƟonof traffic, elevaƟons,landscapedareas, signage,walkwaysand uƟlityraceways;
(b) TouseandclosetemporarilyanyoftheCommonAreasforthepurposeofmaintaining,repairingandalteringtheShoppingCenter theBuilding,solongasreasonableaccesstothePremisesremainsavailable,andtoclosetemporarilyanyoftheCommonAreastowhatever extentisrequiredintheopinionofLessor'scounseltopreventa dedicaƟonofortheaccrualofanyrightsofanypersonsorofthepublictoanyof theCommonAreas;
(c) TodesignateotherlandoutsidetheboundariesoftheShoppingCentertobea partoftheCommonAreasor tobe enƟtledtousethe CommonAreasonareciprocalbasis;
(d) Toadd addiƟonalbuildingsandimprovementstotheCommonAreas;and (e) Todoandperformsuchotheractsandmakesuchotherchangesin,toorwithrespecttotheCommonAreasandShoppingCenteras Lessormay,intheexerciseofsoundbusinessjudgment,deemtobeappropriate.

2.11CommonAreas- PromoƟonalEvents;SidewalkSales. Lessorreservestheright,from Ɵmeto Ɵme,inLessor'ssole discreƟon,to uƟlize porƟonsoftheCommonAreasfor promoƟonalevents,whichmayincludebutshallnotbelimitedtoentertainment. Lessorfurtherreservesthe right,inLessor'ssole discreƟon,topermitanyoneormoretenantsoftheShoppingCentertoconductthedisplayand/orsaleofmerchandisefrom thesidewalksimmediatelyadjacenttosuchtenants' respecƟvepremises.

2.12CommonAreas-Remodeling. Atany ƟmeduringtheTerm,Lessormayremodelorexpand,inany manner,the exisƟngShoppingCenter, whichworkmayinclude,without limitaƟon,the addiƟonofshopsand/ornewbuildingstotheShoppingCenter (collecƟvely,"RemodeledCenter").

IfLessordeemsitnecessaryfor construcƟonpersonneltoenterthePremisesinordertoconstructtheRemodeledCenter,LessorshallgiveLessee nolessthan60daysprior noƟceandLesseeshallallowsuchentry. Lessorshallusereasonable effortstocompleteanywork affecƟngthePremises inan efficientmannersoasnottointerfereunreasonablywithLessee'sbusiness. Lesseeshallnotbe enƟtledtoanydamagesforany inconvenienceorany disrupƟontoLessee'sbusinesscausedbysuchwork;provided,however,theBaseRentpaidbyLesseefortheperiodofthe inconvenienceshallbeabatedin proporƟontothedegreethatLessee'suseofthePremisesisimpaired. Lessorshallhavetherighttouse porƟons ofthePremisestoaccommodateanystructuresrequiredfortheRemodeledCenter,providedthatifasaresultthereofthereisa permanent decreaseinthe floorareaofthePremisesof3%ormore,thereshallbea proporƟonatedownwardadjustmentofBaseRentandLessee'sShare.

3. Term.

3.1 Term. TheCommencementDate, ExpiraƟonDateandOriginalTermofthisLeaseareas specifiedinParagraph1.3.

3.2 EarlyPossession. Anyprovisionherein granƟngLesseeEarlyPossessionofthePremisesissubjecttoand condiƟoneduponthePremises beingavailableforsuchpossessionpriortotheCommencementDate. AnygrantofEarlyPossessiononlyconveysanon-exclusiverighttooccupy thePremises. IfanEarlyPossessionDatehasbeen specifiedinParagraph1.4,the ParƟesintendthatLesseeshallhaveaccesstothePremisesasof theEarlyPossessionDateforpurposesofpreparingand fixturizingthePremisesfortheconductofLessee'sbusiness. IfLesseetotallyor parƟally occupiesthePremisespriortotheCommencementDateforanyreason(andforpurposeshereof,"occupancy"shallinclude,without limitaƟon, Lessee'sentryontothePremisesforpurposesofpreparingand fixturizingthePremisesforbusiness),the obligaƟontopayBaseRentand PercentageRentshallbeabatedfortheperiodofsuchearlypossession. AllothertermsofthisLease(includingbutnotlimitedtoLessee's obligaƟonstocarryinsuranceandtomaintainthePremises)shallbein effectduringsuchperiod,exceptthatLessee's obligaƟonstopayLessee's ShareofCommonArea OperaƟngExpenses,RealPropertyTaxesandinsurancepremiumsshallonlybein effectpriortotheCommencementDateif LesseehasopenedforbusinessinthePremisespriortotheCommencementDate. AnysuchEarlyPossessionshallnot affectthe ExpiraƟonDate.

3.3 DelayInPossession. Lessoragreestousecommerciallyreasonable effortstodeliverexclusivepossessionofthePremisestoLesseeby theCommencementDate. If,despitesaid efforts,Lessorisunabletodeliverpossessionbysuchdate,Lessorshallnotbesubjecttoanyliability therefor,norshallsuchfailure affectthevalidityofthisLeaseorchangethe ExpiraƟonDate. Lesseeshallnot,however,beobligatedtopayRentor performitsother obligaƟons unƟlLessordeliverspossessionofthePremisesandanyperiodofrentabatementthatLesseewouldotherwisehave enjoyedshallrunfromthedateofdeliveryofpossessionand conƟnueforaperiodequaltowhatLesseewouldotherwisehaveenjoyedunderthe termshereof,butminusanydaysofdelaycausedbytheactsoromissionsofLessee. If possessionisnotdeliveredwithin60days aŌerthe CommencementDate,asthesamemaybeextendedunderthetermsofanyWork LeƩerexecutedby ParƟes,Lesseemay,atits opƟon,by noƟcein wriƟngwithin10days aŌertheendofsuch60dayperiod,cancelthisLease,inwhicheventthe ParƟesshallbedischargedfromall obligaƟons hereunder.If such wriƩen noƟceisnotreceivedbyLessorwithinsaid10dayperiod,Lessee'srighttocancelshallterminate. Ifpossessionofthe Premisesisnotdeliveredwithin120days aŌertheCommencementDate,thisLeaseshallterminateunlessotheragreementsarereachedbetween LessorandLessee,in wriƟng.

3.4 LesseeCompliance. LessorshallnotberequiredtotenderpossessionofthePremisestoLessee unƟlLesseecomplieswithits obligaƟon toprovideevidenceofinsurance(Paragraph8.5). Pendingdeliveryofsuchevidence,Lesseeshallberequiredtoperformallofits obligaƟonsunder thisLeasefromand aŌertheStartDate,includingthepaymentofRent,notwithstandingLessor's elecƟontowithholdpossessionpendingreceiptof suchevidenceofinsurance. Further,ifLesseeisrequiredtoperformanyother condiƟonspriortoor concurrentwiththeStartDate,theStartDate shalloccurbutLessormayelecttowithholdpossession unƟlsuch condiƟonsare saƟsfied.

4. Rent.

4.1 Rent Defined. Allmonetary obligaƟonsofLesseetoLessorunderthetermsofthisLease(exceptfortheSecurityDeposit)aredeemedto berent("Rent").

4.2 CommonArea OperaƟngExpenses. LesseeshallpaytoLessorduringthetermhereof,in addiƟontotheBaseRentand,ifapplicable, 635
PercentageRent,Lessee'sShare(as specifiedinParagraph1.7)ofallCommonArea OperaƟngExpenses,as hereinaŌerdefined,duringeach calendaryearofthetermofthisLease,inaccordancewiththefollowingprovisions: SeeParagraph61. (a) "CommonArea OperaƟngExpenses"are defined,forpurposesofthisLease,asallcosts relaƟngtotheownershipand operaƟonof theBuildingParcelShoppingCenter,including,butnotlimitedto,thefollowing:
(i) Costs relaƟngtothe operaƟon,repairandmaintenance,inneat,clean,goodorderandcondiƟon,andreplacementas reasonablynecessary,ofthefollowing:
(aa) TheCommonAreasandCommonAreaimprovements,includingparkingareas,loadingandunloadingareas,trashareas, roadways,parkways,walkways,driveways,landscapedareas,parkinglotstriping,bumpers,irrigaƟonsystems,CommonArea lighƟng faciliƟes, fencesandgates,elevators,roofs,exteriorwallsofthebuildings,buildingsystemsandroofdrainagesystems. (bb) Exteriorsignsandanytenantdirectories.
(cc) Any fire detecƟonand/orsprinklersystems.
(dd) Commonelectrical,plumbingandother uƟliƟesservicinganybuildingintheShoppingCenterand/ortheCommonAreas. (ee) AllotherareasandimprovementsthatarewithintheexteriorboundariesoftheProjectbutoutsideofthePremisesand/or anyotherspaceoccupiedbyatenant.
(ii) Thecostofwater,gas,electricityandtelephonetoservicetheCommonAreasandany uƟliƟesnotseparatelymetered.See Paragraph56.
(iii) Thecostoftrashdisposal(subjecttoParagraph56) ,pestcontrolservices,propertymanagement(including,butnotbe limitedto,apropertymanagementfeetoLessorequalto5%ofBaseRentandPercentageRent),securityservices,andthecostsofany environmental inspecƟons.
(iv) Reservessetasideforequipment,maintenance,repairandreplacementofCommonAreas. (v) RealPropertyTaxes(as definedinParagraph10).SubjecttoParagraph62. (vi) ThecostofthepremiumsfortheinsurancemaintainedbyLessorpursuanttoParagraph8. (vii) Any deducƟble porƟonofaninsuredlossconcerningtheBuildingortheCommonAreas. (viii)Auditors',accountants'and aƩorneys'feesandcostsrelatedtothe operaƟonoftheBuildingShoppingCenter. (ix) ThecostofanycapitalimprovementtotheBuildingortheShoppingCenternotcoveredundertheprovisionsofParagraph2.3, provided,however,thatLessorshallallocatethecostofanysuchcapitalimprovementoverthestandardlifeoftheitemandallocatedin accordancewithgenerallyacceptedaccountingprincipals a 12yearperiodandLesseeshallnotberequiredtopaymorethanLessee'sShareof 1/144thofthecostofsuchcapitalimprovementinanygivenmonth. LesseeshallpayInterestonthe unamorƟzedbalancebutmayprepayits obligaƟonatany Ɵme.
(x) ThecostofanyotherservicestobeprovidedbyLessorthatarestatedelsewhereinthisLeasetobeaCommonArea OperaƟng Expense.
(xi)TheProportionateShare(as deϐinedintheCC&Rs)applicabletotheBuildingParcelasassessedtoLessorasOwnerofthe BuildingParcel.LessorshallprovideacopyoftheeachandeveryProportionateSharebillingreceivedbyLessorfromtheMaintenance Operator(as deϐinedintheCC&Rs).LesseeshallhavetherighttoreviewsuchcostsallocatedastheProportionateShareandtochallenge sameinthenameofLessorundertheCC&RsifLessorfailstodoso
CommonAreaOperatingExpensesshallnotinclude(i)anyitemssuchasutilitiesandrealestatetaxeswhicharegovernedby Paragraphs56and62,respectively;and(ii)anycapitalrepairsorimprovements,excepttotheextentsuchitemsreduceoperatingexpenses orarerequiredtocomplywithApplicableRegulations.
(b) IfLessordeterminesthatthemethodof proraƟonofanyitemincludedwithinCommonAreaOperaƟngExpensesisinequitable,the partiesshallagreeto LessormayproratesuchitemonthebasisofusageorotherequitableconsideraƟons. AnyCommonArea OperaƟng ExpensesandRealPropertyTaxesthatare specifically aƩributabletothePremises ,theBuildingortoanyotherpremisesorbuildinginthe ShoppingCenterortothe operaƟon,repairandmaintenancethereof,shallbeallocatedenƟrelytosuchpremisesorbuilding. However,any CommonArea OperaƟngExpensesandRealPropertyTaxesthatarenot specifically aƩributabletoanypremisesorbuildingortothe operaƟon, repairandmaintenancethereof,shallbeequitablyallocatedbyLessortoallbuildingsintheShoppingCenter. SeeParagraph62regardingreal estatetaxes. LesseeshallhavetherighttoaudittheCommonAreaOperatingExpensesatanytimeutilizingareputableaccounting ϐirm.

Upon ϐinaldeterminationoftheaudit,anyadjustmentshallbepaidbyLessororLessee,asapplicable. (c) Theinclusionoftheimprovements, faciliƟesandservicessetforthinSubparagraph4.2(a)shallnotbedeemedtoimposean obligaƟonuponLessortoeitherhavesaidimprovementsor faciliƟesortoprovidethoseservicesunlesstheShoppingCenteralreadyhasthesame, Lessoralreadyprovidestheservices,orLessorhasagreedelsewhereinthisLeasetoprovidethesameor someofthem. (d) Lessee'sShareofCommonArea OperaƟngExpensesispayablemonthlyonthesamedayastheBaseRentisduehereunder.The amountofsuchpaymentsshallbebasedonLessor's esƟmateoftheannualCommonArea OperaƟngExpenses. Within60days aŌer wriƩen request(butnotmorethanonceeachyear)LessorshalldelivertoLesseeareasonablydetailedstatementshowingLessee'sShareoftheactual CommonArea OperaƟngExpensesfortheprecedingyear. IfLessee'spaymentsduringsuchyearexceedLessee'sShare,Lessorshallcreditthe amountofsuchover-paymentagainstLessee'sfuturepayments. IfLessee'spaymentsduringsuchyearwerelessthanLessee'sShare,Lesseeshall paytoLessortheamountofthe deficiencywithin10days aŌerdeliverybyLessortoLesseeofthestatement. (e) If thereareoneormoreMajorTenants(as hereinaŌer defined)withintheShoppingCenter,thenatLessor'ssole opƟon,theamount tobereimbursedbysuchMajorTenantstoLessorforallora porƟonoftheCommonArea OperaƟngExpensesmaybedeterminedby alternaƟve equitablemethods(e.g.,aMajorTenantmaypaydirectlyforits ownsecurity),andtheactualamountpaidbysuchMajorTenantsshallbecredited againsttheCommonArea OperaƟngExpensesallocatedtoothertenantsoftheShoppingCenter;provided,however,thatinsucheventthe rentableareaofthebuildingsleasedtosuchMajorTenantsshallbeexcludedfromtherentableareaoftheShoppingCenterforpurposesof determiningLessee'sShareofCommonArea OperaƟngExpensesforthose specificitems,notwithstandingthepercentagesetforthinParagraph 636

1.7. Asusedherein,theterm"MajorTenant"shallmeanatenantleasingatleast15,000squarefeetofrentableareawithintheShoppingCenter. (f) CommonArea OperaƟngExpensesshallnotincludeanyexpensespaidbyanytenantdirectlytothird parƟes,orastowhichLessoris otherwisereimbursedbyanythirdparty,othertenant,orinsuranceproceedsexceptasprovidedotherwiseintheLeaseincludingParagraph

13.6. 4.3 Payment. LesseeshallcausepaymentofRenttobereceivedbyLessorinlawfulmoneyoftheUnitedStates,without offsetor deducƟon (exceptas specifically permiƩedinthisLease),onorbeforethedayonwhichitisdue. Allmonetaryamountsshallberoundedtothenearestwhole dollar. IntheeventthatanyinvoicepreparedbyLessorisinaccuratesuchinaccuracyshallnotconsƟtuteawaiverandLesseeshallbeobligatedto paytheamountsetforthinthisLease. Rentforanyperiodduringthetermhereofwhichisforlessthanonefullcalendarmonthshallbeprorated basedupontheactualnumberofdaysofsaidmonth. PaymentofRentshallbemadetoLessoratitsaddressstatedhereinortosuchotherpersons orplaceasLessormayfrom Ɵmeto Ɵmedesignatein wriƟng. Acceptanceofapaymentwhichislessthantheamountthendueshallnotbea waiverofLessor'srightstothebalanceofsuchRent,regardlessofLessor'sendorsementofanycheckso staƟng. Intheeventthatanycheck, draŌ, orotherinstrumentofpaymentgivenbyLesseetoLessorisdishonoredforanyreason,LesseeagreestopaytoLessorthesumof$25in addiƟonto anyLateChargeandLessor,atits opƟon,mayrequireallfutureRentbepaidbycashier'scheck. Paymentswillbeapplied firsttoaccruedlate chargesand aƩorney'sfees,secondtoaccruedinterest,thentoBaseRentandCommonArea OperaƟngExpenses,andanyremainingamountto anyotheroutstandingchargesorcosts.

5. SecurityDeposit. LesseeshalldepositwithLessorupon execuƟonhereoftheSecurityDepositassecurityforLessee'sfaithfulperformanceof its obligaƟonsunderthisLease. IfLesseefailstopayRent,orotherwiseDefaultsunderthisLease,Lessormayuse,applyorretainallorany porƟon ofsaidSecurityDepositforthepaymentofanyamountalreadydueLessor,forRentswhichwillbedueinthefuture,and/ortoreimburseor compensateLessorforanyliability,expense,lossordamagewhichLessormay sufferorincurbyreasonthereof. IfLessorusesorappliesallorany porƟonoftheSecurityDeposit,Lesseeshallwithin10days aŌer wriƩenrequesttherefordepositmonieswithLessor sufficienttorestoresaid SecurityDeposittothefullamountrequiredbythisLease. IftheBaseRentincreasesduringthetermofthisLease,Lesseeshall,upon wriƩen requestfromLessor,deposit addiƟonalmonieswithLessorsothatthetotalamountoftheSecurityDepositshallatall Ɵmesbearthesame proporƟontotheincreasedBaseRentasthe iniƟalSecurityDepositboretothe iniƟalBaseRent. ShouldtheAgreedUsebeamendedto accommodateamaterialchangeinthebusinessofLesseeortoaccommodateasublesseeorassignee,Lessorshallhavetherighttoincreasethe SecurityDeposittotheextentnecessary,inLessor'sreasonablejudgment,toaccountforanyincreasedwearandtearthatthePremisesmay suffer asaresultthereof. IfachangeincontrolofLesseeoccursduringthisLeaseandfollowingsuchchangethe financial condiƟonofLesseeis,in Lessor'sreasonablejudgment, significantlyreduced,Lesseeshalldepositsuch addiƟonalmonieswithLessorasshallbe sufficienttocausethe SecurityDeposittobeatacommerciallyreasonablelevelbasedonsuchchangein financial condiƟon. Lessorshallnotberequiredtokeepthe SecurityDepositseparatefromitsgeneralaccounts. Within90days aŌerthe expiraƟonorterminaƟonofthisLease,Lessorshallreturnthat porƟonoftheSecurityDepositnotusedor appliedbyLessor. Lessorshallupon wriƩenrequestprovideLesseewithan accounƟngshowinghow that porƟonoftheSecurityDepositthatwasnotreturnedwasapplied. NopartoftheSecurityDepositshallbeconsideredtobeheldintrust,to bearinterestor tobeprepaymentforanymoniestobepaidbyLesseeunderthisLease. THESECURITYDEPOSITSHALLNOTBEUSEDBYLESSEEIN LIEUOFPAYMENTOFTHELASTMONTH'SRENT.

6. Use.

6.1 Use.
(a) AgreedUse;AgreedTradeName. LesseeshalluseandoccupythePremisesonlyfortheAgreedUse,andfornootherpurpose,and LesseeshalloperateatthePremisesonlyundertheAgreedTradeNameandundernoothertradename. Lesseeshallnotuseorpermittheuseof thePremisesinamannerthatisunlawful,createsdamage,wasteoranuisance,orthatdisturbsoccupantsoforcausesdamagetoneighboring premisesor properƟes. Otherthanguide,signalandseeingeyedogs,Lesseeshallnotkeepor allowinthePremisesanypets,animals,birds, fish, or repƟles. Lessorshallnotunreasonablywithholdordelayits consenttoany wriƩenrequestfora modificaƟonoftheAgreedUse,solongasthe samewillnotimpairthestructuralintegrityoftheimprovementonthePremisesorthemechanicalorelectricalsystemstherein,and/orisnot significantlymoreburdensometothePremises,and/orisnotin conflictwithor incompaƟblewiththe exisƟngor proposeduses(whetherornot exclusive)ofotheroccupantsoftheShoppingCenter.Lessorshallnotunreasonablywithholdordelayitsconsenttoany wriƩenrequestfora modificaƟonoftheAgreedTradeName,solongasthesameisnotin conflictwithor incompaƟblewiththenatureandcharacteroftheShopping Centerorother exisƟngorproposedusesofotheroccupantsoftheShoppingCenter. IfLessorelectstowithholdconsent,Lessorshallwithin7 days aŌersuchrequestgive wriƩen noƟficaƟonofsame,which noƟceshallincludean explanaƟonofLessor's objecƟonstothechangeintheAgreedUse and/orAgreedTradeName.
(b) ConƟnuous OperaƟon. Lesseeshall conƟnuously(i)operateandconducttheAgreedUseundertheAgreedTradeNamewithinthe enƟrePremisesinareputablemannerandinconformitywithindustrystandardsof pracƟceprevailinginthe fieldofbusinessamongmerchants engagedinthesameor similarbusinessinthecityinwhichthePremisesarelocated,(ii) staffthePremiseswith sufficientsalespersonnel,stockthe Premiseswithadequatemerchandiseandexercisesoundbusiness pracƟcessoastomaximizeGrossSalesforthe benefitofLessor. Ataminimum, LesseeshallkeepthePremises conƟnuouslyopenforbusinessMondaythroughFridayfrom9:00a.m.to6:00p.m.,Saturdayfrom9:00a.m.to6:00 p.m.,andSundayfrom10:00a.m.to6:00p.m. IfLesseefailstocomplywiththerequirementsofthisParagraph6.1(b),thenin addiƟontoanyand allotherrightsandremediesofLessor,LesseeshallpaytoLessoranamountequalto1/15thoftheBaseRentforeachdayor porƟonthereofthat Lesseefailstosocomply. Suchsumshallbein addiƟonto,andnotapartof,theBaseRentotherwisedueunderthisLease. (c) ViolaƟonsofExclusiveUseRights. LesseeacknowledgesthatLessormaygrant,ormayhavepreviouslygranted,exclusiveuserights toothertenantsoftheShoppingCenterandagreesthatamaterial consideraƟontoLessorinenteringintothisLeaseisLessee'scovenanttolimitits useofthePremisestotheAgreedUseundertheAgreedTradeNameassetforthabove. Lessee'sviolaƟonofexclusiveuserightsgrantedtoother tenantsoftheShoppingCenterwillresultinLessor sufferingirreparableharmand,therefore,in addiƟontoallotherrightsandremediesavailable 637
toLessor,LessormayseektoenjoinLessee'sbreachofsuchcovenantandLesseeshallbeliableforanydamagesincurredorsustainedbyLessorto suchothertenantswhoseexclusiveuserightsarebreachedbyLessee. InnoeventshallLessorbeliabletoLesseeforanyfailureofanyother tenantsoftheShoppingCentertooperatetheirbusinesses,orforanylossor damagethatmaybeoccasionedbyorthroughtheactsoromissions ofothertenantsorthird parƟes.
(d) OtherTenancies. Lessor,atitssole discreƟon,reservestheabsoluterighttoestablishprocedurestocontrolothertenanciesinthe Building ShoppingCenter. Regardlessofwhetherany specifictenantsareshownonanysiteplan aƩachedhereto,Lesseedoesnotrelyonthat fact,nordoesLessorrepresentthatany specifictenantornumberortypeoftenantsshallorshallnotduringtheTermoccupyany porƟonofthe Building ShoppingCenter,nordoesLesseerelyonanyothertenant operaƟngitsbusinessintheShoppingCenteratany parƟcular Ɵmeor Ɵmes.

Further,noconductbyanytenant,subtenantorotheroccupantof,oranycustomerof,oranysuppliertooruseofany porƟonoftheShopping Centershall consƟtutean evicƟon, construcƟveorotherwise,ofLesseefromthePremises,andLesseeherebywaivesanyandallclaimsthatit mightotherwisehaveagainstLessorbyreasonthereof.

6.2 HazardousSubstances. SeeParagraph65
(a) ReportableUsesRequireConsent. Theterm"HazardousSubstance"asusedinthisLeaseshallmeananyproduct,substance,or wastewhosepresence,use,manufacture,disposal, transportaƟon,orrelease,eitherbyitselforin combinaƟonwithothermaterialsexpectedtobe onthePremises,iseither:(i) potenƟallyinjurioustothepublichealth,safetyorwelfare,theenvironmentorthePremises,(ii)regulatedor monitoredbyanygovernmentalauthority,or(iii)abasisfor potenƟalliabilityofLessortoanygovernmentalagencyorthirdpartyunderany applicablestatuteorcommonlawtheory. HazardousSubstancesshallinclude,butnotbelimitedto,hydrocarbons,petroleum,gasoline,and/or crudeoiloranyproducts,byproductsor fracƟonsthereof. Lesseeshallnotengageinany acƟvityinoronthePremiseswhich consƟtutesa ReportableUseofHazardousSubstanceswithouttheexpressprior wriƩenconsentofLessorand Ɵmely compliance(atLessee'sexpense)withall ApplicableRequirements. "ReportableUse"shallmean(i)the installaƟonoruseofanyaboveorbelowgroundstoragetank,(ii)the generaƟon, possession,storage,use, transportaƟon,or disposalofa HazardousSubstancethatrequiresapermitfrom,orwithrespecttowhicha report, noƟce, registraƟonorbusinessplanisrequiredtobe filedwith,anygovernmentalauthority,and/or(iii) thepresenceatthePremisesofaHazardous SubstancewithrespecttowhichanyApplicableRequirementsrequiresthata noƟcebegiventopersonsenteringoroccupyingthePremisesor neighboring properƟes. Notwithstandingtheforegoing,Lesseemayuseanyordinaryandcustomarymaterialsreasonablyrequiredtobeusedin thenormalcourseoftheAgreedUse,ordinary officesupplies(copiertoner,liquidpaper,glue,etc.)andcommonhouseholdcleaningmaterials,so longassuchuseisincompliancewithallApplicableRequirements,isnotaReportableUse,anddoesnotexposethePremisesorneighboring propertytoanymeaningfulriskof contaminaƟonordamageor exposeLessortoanyliabilitytherefor. In addiƟon,Lessormay condiƟonitsconsent toanyReportableUseuponreceivingsuch addiƟonalassurancesasLessorreasonablydeemsnecessarytoprotectitself,thepublic,thePremises and/ortheenvironmentagainstdamage, contaminaƟon,injuryand/orliability,including,butnotlimitedto,the installaƟon(andremovalonor beforeLease expiraƟonor terminaƟon)of protecƟve modificaƟons(suchasconcreteencasements)and/orincreasingtheSecurityDeposit. (b) DutytoInformLessor. IfLesseeknows,orhasreasonablecausetobelieve,thata HazardousSubstancehascometobelocatedin, on,underoraboutthePremises,otherthanaspreviouslyconsentedtobyLessor,Lesseeshallimmediatelygive wriƩen noƟceofsuchfactto Lessor,andprovideLessorwithacopyofanyreport, noƟce,claimorother documentaƟonwhichithasconcerningthepresenceofsuchHazardous Substance.
(c) Lessee RemediaƟon. LesseeshallnotcauseorpermitanyHazardousSubstancetobespilledorreleasedin,on,under,oraboutthe Premises(includingthroughtheplumbingorsanitarysewersystem)andshallpromptly,atLessee'sexpense,complywithallApplicable Requirementsandtakeall invesƟgatoryand/orremedial acƟonreasonablyrecommended,whetherornotformallyorderedorrequired,forthe cleanupofany contaminaƟonof,andforthemaintenance,securityand/ormonitoringofthePremisesorneighboring properƟes,thatwascaused ormateriallycontributedtobyLessee,orpertainingtoorinvolvinganyHazardousSubstancebroughtontothePremisesduringthetermofthis Lease,byorforLessee,oranythirdparty.
(d) Lessee IndemnificaƟon. Lesseeshallindemnify,defendandholdLessor,itsagents,employees, lendersandgroundlessor,ifany, harmlessfromandagainstanyandalllossofrentsand/ordamages, liabiliƟes,judgments,claims, expenses,penalƟes,and aƩorneys'and consultants'feesarisingoutoforinvolvinganyHazardousSubstancebroughtontothePremisesbyorforLessee,or anythirdparty(provided, however,thatLesseeshallhavenoliabilityunderthisLeasewithrespecttounderground migraƟonofanyHazardousSubstanceunderthePremises fromareasoutsideoftheShoppingCenternotcausedorcontributedtobyLessee). Lessee'sobligaƟonsshallinclude,butnotbelimitedto,the effectsofany contaminaƟonorinjurytoperson,propertyortheenvironmentcreatedor sufferedbyLessee,andthecostof invesƟgaƟon,removal, remediaƟon, restoraƟonand/orabatement,andshallsurvivethe expiraƟonor terminaƟonofthisLease. No terminaƟon, cancellaƟonor release agreemententeredintobyLessorandLesseeshallreleaseLesseefromits obligaƟonsunderthisLeasewithrespecttoHazardousSubstances, unless specificallysoagreedbyLessorin wriƟngatthe Ɵmeofsuchagreement. (e) Lessor IndemnificaƟon. Exceptasotherwiseprovidedinparagraph8.7,Lessoranditssuccessorsandassignsshallindemnify, defend,reimburseandholdLessee,itsemployeesandlenders,harmlessfromandagainstanyandallenvironmentaldamages,includingthecostof remediaƟon,whichare sufferedasadirectresultofHazardousSubstancesonthePremisespriortoLesseetakingpossessionorwhicharecausedby thegrossnegligenceorwillfulmisconductofLessor,itsagentsoremployees. Lessor's obligaƟons,asandwhenrequiredbytheApplicable Requirements,shallinclude,butnotbelimitedto,thecostof invesƟgaƟon,removal,remediaƟon, restoraƟonand/orabatement,andshallsurvive the expiraƟonor terminaƟonofthisLease.
(f) InvesƟgaƟonsand RemediaƟons. Lessorshallretaintheresponsibilityandpayforany invesƟgaƟonsor remediaƟonmeasures requiredbygovernmental enƟƟeshaving jurisdicƟonwithrespecttotheexistenceofHazardousSubstancesonthePremisespriortoLesseetaking possession,unlesssuch remediaƟonmeasureisrequiredasaresultofLessee'suse(including"AlteraƟons",as definedinparagraph7.3(a)below)of thePremises,inwhicheventLesseeshallberesponsibleforsuchpayment. Lesseeshallcooperatefullyinanysuch acƟviƟesattherequestof Lessor,includingallowingLessorandLessor'sagentstohavereasonableaccesstothePremisesatreasonable ƟmesinordertocarryoutLessor's invesƟgaƟveandremedial responsibiliƟes.
638
(g) Lessor T erminaƟonOpƟon. IfaHazardousSubstance CondiƟon(seeParagraph9.1(e))occursduringthetermofthisLease,unless Lesseeislegallyresponsibletherefor(inwhichcaseLesseeshallmakethe invesƟgaƟonandremediaƟonthereofrequiredbytheApplicable RequirementsandthisLeaseshall conƟnueinfullforceand effect,butsubjecttoLessor'srightsunderParagraph6.2(d)andParagraph13),Lessor may,atLessor's opƟon,either(i) invesƟgateandremediatesuchHazardousSubstance CondiƟon,ifrequired,assoonasreasonablypossibleat Lessor'sexpense,inwhicheventthisLeaseshall conƟnueinfullforceand effect,or(ii)if the esƟmatedcosttoremediatesuch condiƟonexceeds12 ƟmesthethenmonthlyBaseRentor$100,000,whicheverisgreater,give wriƩen noƟcetoLessee,within30days aŌerreceiptbyLessorof knowledgeoftheoccurrenceofsuchHazardousSubstance CondiƟon,ofLessor'sdesiretoterminatethisLeaseasofthedate60daysfollowingthe dateofsuch noƟce. IntheeventLessorelectstogivea terminaƟon noƟce,Lesseemay,within10daysthereaŌer,give wriƩen noƟcetoLessorof Lessee'scommitmenttopaytheamountbywhichthecostofthe remediaƟonofsuchHazardousSubstance CondiƟonexceedsanamountequalto 12 ƟmesthethenmonthlyBaseRentor $100,000,whicheverisgreater.LesseeshallprovideLessorwithsaidfundsor saƟsfactoryassurance thereofwithin30daysfollowingsuchcommitment. Insuchevent,thisLeaseshall conƟnueinfullforceand effect,andLessorshallproceedto makesuch remediaƟonassoonasreasonablypossible aŌertherequiredfundsareavailable. IfLesseedoesnotgivesuch noƟceandprovidethe requiredfundsorassurancethereofwithinthe Ɵmeprovided,thisLeaseshallterminateasofthedate specifiedinLessor's noƟceof terminaƟon.

6.3 Lessee'sCompliancewithApplicableRequirements. ExceptasotherwiseprovidedinthisLease,Lesseeshall,atLessee'ssoleexpense, fully,diligentlyandina Ɵmelymanner,materiallycomplywithallApplicableRequirements,therequirementsofanyapplicable fireinsurance underwriteror raƟngbureau,andthe recommendaƟonsofLessor'sengineersand/orconsultantswhichrelateinanymannertothePremises, withoutregardtowhethersaidApplicableRequirementsarenowin effectorbecomeeffecƟve aŌertheStartDate. Lesseeshall,within10days aŌerreceiptofLessor's wriƩenrequest,provideLessorwithcopiesofallpermitsandotherdocuments,andother informaƟonevidencingLessee's compliancewithanyApplicableRequirements specifiedbyLessor,andshallimmediatelyuponreceipt, noƟfyLessorin wriƟng(withcopiesofany documentsinvolved)ofanythreatenedoractualclaim, noƟce, citaƟon,warning,complaintorreportpertainingtoorinvolvingthefailureofLessee orthePremisestocomplywithanyApplicableRequirements. Likewise,Lesseeshallimmediatelygive wriƩen noƟcetoLessorof:(i)anywater damagetothePremisesandanysuspectedseepage,pooling,dampnessorother condiƟonconducivetothe producƟonofmold;or(ii)any musƟnessorotherodorsthatmightindicatethepresenceofmoldinthePremises.

6.4 InspecƟon;Compliance. LessorandLessor's"Lender"(as definedinParagraph30)andconsultantsauthorizedbyLessorshallhavetherightto enterintoPremisesatany Ɵmeinthecaseofanemergency,andotherwiseatreasonable Ɵmes duringLessee'sbusinesshours aŌerreasonable noƟce,forthepurposeof inspecƟngand/or tesƟngthe condiƟonofthePremisesand/orforverifyingcompliancebyLesseewiththisLease. The costofanysuch inspecƟonsshallbepaidbyLessor,unlessa violaƟonofApplicableRequirements,or aHazardousSubstanceCondiƟon(see Paragraph9.1(e))isfoundtoexistor beimminent,or the inspecƟonisrequestedororderedbyagovernmentalauthority. Insuchcase,Lesseeshall uponrequestreimburseLessorforthecostofsuch inspecƟon,solongassuch inspecƟonisreasonablyrelatedtothe violaƟonor contaminaƟon. In addiƟon,Lesseeshallprovidecopiesofallrelevantmaterialsafetydatasheets(MSDS)toLessorwithin10daysofthereceiptof wriƩenrequest therefor.Lesseeacknowledgesthatanyfailureonitsparttoallowsuch inspecƟonsor tesƟngwillexposeLessortorisksand potenƟallycause LessortoincurcostsnotcontemplatedbythisLease,theextentofwhichwillbeextremelydifficulttoascertain. Accordingly,shouldtheLesseefail toallowsuch inspecƟonsand/or tesƟngina ƟmelyfashiontheBaseRentshallbe automaƟcallyincreased,withoutanyrequirementfor noƟceto Lessee,byanamountequalto10%ofthethen exisƟngBaseRentor $100,whicheverisgreaterfortheremaindertotheLease. The ParƟesagree thatsuchincreaseinBaseRentrepresentsfairandreasonable compensaƟonforthe addiƟonalrisk/coststhatLessorwillincurbyreasonofLessee's failuretoallowsuch inspecƟonand/or tesƟng. SuchincreaseinBaseRentshallinnoevent consƟtuteawaiverofLessee'sDefaultorBreachwith respecttosuchfailurenorpreventtheexerciseofanyoftheotherrightsandremediesgrantedhereunder.PriortoLessor's ϐiremaintenance companyenteringthePremisestoconductanytestingorrepaironthe ϐirecontrolunit,LessorshallprovideLesseeatleast5daysprior writtennoticeandLesseeshallhavetherighttohaveanemployeepresentduringsuchtestingorrepairs.

7. Maintenance;Repairs; UƟlity InstallaƟons;TradeFixturesand AlteraƟons.

7.1 Lessee's ObligaƟons.
(a) InGeneral. SubjecttotheprovisionsofParagraph2.2 (CondiƟon),2.3(Compliance),6.3(Lessee'sCompliancewithApplicable Requirements),7.2(Lessor's ObligaƟons),9(Damageor DestrucƟon),and14 (CondemnaƟon)and55(ConditionofPremises),Lesseeshall,at Lessee'ssoleexpense,keepthePremises, UƟlity InstallaƟons(intendedforLessee'sexclusiveuse,no maƩerwherelocated),and AlteraƟonsingood order, condiƟonandrepair(whetherornotthe porƟonofthePremisesrequiringrepairs,or themeansofrepairingthesame,arereasonablyor readilyaccessibletoLessee,andwhetheror nottheneedforsuchrepairsoccursasaresultofLessee'suse,anyprioruse,theelementsor theage ofsuch porƟonofthePremises),including,butnotlimitedto,allequipmentor faciliƟes,suchasplumbing,HVACequipment,electrical, lighƟng faciliƟes,boilers,pressurevessels, fixtures,interiorwalls,interiorsurfacesofexteriorwalls,ceilings, floors,windows,doors,plateglass,and skylightsbutexcludinganyitemswhicharetheresponsibilityofLessorpursuanttoParagraph7.2. Lessee,inkeepingthePremisesingoodorder, condiƟonandrepair,shallexerciseandperformgoodmaintenancepracƟces, specificallyincludingtheprocurementandmaintenanceoftheservice contractsrequiredbyParagraph7.1(b)below. Lessee's obligaƟonsshallinclude restoraƟons,replacementsorrenewalswhennecessarytokeepthe Premisesandallimprovementsthereonora partthereofingoodorder, condiƟonandstateofrepair. (b) ServiceContracts. Lesseeshall,atLessee'ssoleexpense,procureandmaintaincontracts,withcopiestoLessor,incustomaryform andsubstancefor,andwithcontractorsspecializingandexperiencedinthemaintenanceofthefollowingequipmentandimprovements,if any,if andwheninstalledonthePremises: (i)HVACequipment,(ii)boilerandpressurevessels,and(iii) clarifiers. However,Lessorreservestheright, upon noƟcetoLessee,toprocureandmaintainanyorallofsuchservicecontracts,andLesseeshallreimburseLessor,upondemand,forthedirect costthereof.
(c) FailuretoPerform. IfLesseefailstoperformLessee's obligaƟonsunderthisParagraph7.1,LessormayenteruponthePremises aŌer 10days'prior wriƩen noƟcetoLessee(exceptinthecaseofanemergency,inwhichcaseno noƟceshallberequired),performsuch obligaƟonson Lessee'sbehalf,andputthePremisesingoodorder,condiƟonandrepair,andLesseeshallpromptlypaytoLessorasumequalto115% 110%of 639
thecostthereof.
(d) Replacement. SubjecttoLessee's indemnificaƟonofLessorassetforthinParagraph8.7below,andwithoutrelievingLesseeof liability resulƟngfromLessee'sfailuretoexerciseandperformgoodmaintenance pracƟces,ifanitemdescribedinParagraph7.1(b)cannotbe repairedotherthanata costwhichisinexcessof50%ofthecostofreplacingsuchitem,thensuchitemshallbereplacedbyLessor,andthecost thereofshallbeproratedbetweenthe ParƟesandLesseeshallonlybeobligatedtopay,eachmonthduringtheremainderofthetermofthisLease oranyextensionthereof,onthedateonwhichBaseRentisdue,anamountequaltotheproductof mulƟplyingthecostofsuchreplacementbya fracƟon,thenumeratorofwhichisone,andthedenominatorofwhichis144(i.e.1/144thofthecostpermonth). LesseeshallpayInterestonthe unamorƟzedbalancebutmayprepayits obligaƟonatany Ɵme.

7.2 Lessor's ObligaƟons. SubjecttotheprovisionsofParagraphs2.2 (CondiƟon),2.3(Compliance), 4.2(CommonArea OperaƟngExpenses),6 (Use),7.1(Lessee's ObligaƟons),9 (Damageor DestrucƟon)and14 (CondemnaƟon),Lessor,subjecttoreimbursementpursuanttoParagraph4.2, shallkeepingoodorder, condiƟonandrepairthe foundaƟons,exteriorwalls,structuralcondiƟonofinteriorbearingwalls,exteriorroof,fire sprinklersystem,CommonArea firealarmand/orsmoke detecƟonsystems, firehydrants,parkinglots,walkways,parkways,driveways,landscaping, fences,signsand uƟlitysystemsservingtheCommonAreasandallpartsthereof,aswellasprovidingtheservicesforwhichthereisaCommonArea OperaƟngExpensepursuanttoParagraph4.2. Lessorshallnotbeobligatedtopainttheexterioror interiorsurfacesofexteriorwallsnorshall Lessorbeobligatedtomaintain,repairor replacewindows,doorsorplateglassofthePremises.LessorshalloperateandmaintaintheBuilding ina ϐirstclassmanneraseconomicallyaspossible. LessorshallpromptlyenforceanyrightsapplicabletotheBuildingParcelunderthe CC&Rs.

7.3 UƟlity InstallaƟons;TradeFixtures; AlteraƟons.
(a) DefiniƟons. Theterm"UƟlity InstallaƟons"referstoall floorandwindowcoverings,airand/orvacuumlines,powerpanels, electrical distribuƟon,securityand fire protecƟonsystems, communicaƟoncabling, lighƟng fixtures,HVACequipment,plumbing,andfencinginor onthePremises. Theterm"TradeFixtures"shallmeanLessee'smachineryandequipmentthatcanberemovedwithoutdoingmaterialdamageto thePremises. Theterm"AlteraƟons"shallmeanany modificaƟonoftheimprovements,otherthanUƟlity InstallaƟonsorTradeFixtures,whether by addiƟonor deleƟon. "LesseeOwned AlteraƟonsand/or UƟlity InstallaƟons"are definedasAlteraƟonsand/or UƟlity InstallaƟonsmadeby LesseethatarenotyetownedbyLessorpursuanttoParagraph7.4(a). (b) Consent. SubjecttoParagraph58, Lesseeshallnotmakeany AlteraƟonsor UƟlity InstallaƟonstothePremiseswithoutLessor's prior wriƩenconsent. Lesseemay,however,makenon-structuralAlteraƟonsor UƟlity InstallaƟonstotheinteriorofthePremises(excludingthe roof)withoutsuchconsentbutupon noƟcetoLessor,aslongastheyarenotvisiblefromtheoutside,donotinvolvepuncturing, relocaƟngor removingtherooforany exisƟngwalls,willnot affecttheelectrical,plumbing,HVAC,and/orlifesafetysystems,donottriggertherequirementfor addiƟonal modificaƟonsand/orimprovementstothePremises resulƟngfromApplicableRequirements,suchascompliancewithTitle24,andthe cumulaƟvecostthereofduringthisLeaseasextendeddoesnotexceedasumequalto3month'sBaseRentintheaggregateora sumequaltoone month'sBaseRentinanyoneyear. Notwithstandingtheforegoing,Lesseeshallnotmakeorpermitanyroof penetraƟonsand/orinstallanything ontheroofwithouttheprior wriƩenapprovalofLessor. Lessormay,asa precondiƟonto granƟngsuchapproval,requireLesseeto uƟlizea contractorchosenand/orapprovedbyLessor. Any AlteraƟonsor UƟlity InstallaƟonsthatLesseeshalldesiretomakeandwhichrequiretheconsent oftheLessorshallbepresentedtoLessorin wriƩenformwithdetailedplans. Consentshallbedeemed condiƟoneduponLessee's: (i)acquiringall applicablegovernmentalpermits,(ii)furnishingLessorwithcopiesofboththepermitsandtheplansand specificaƟonspriortocommencementof thework,and(iii)compliancewithall condiƟonsofsaidpermitsandotherApplicableRequirementsina promptand expediƟousmanner. Any AlteraƟonsor UƟlity InstallaƟonsshallbeperformedinaworkmanlikemannerwithgoodand sufficientmaterials. Lesseeshallpromptlyupon compleƟonfurnishLessorwithas-builtplansand specificaƟons. Forworkwhichcostsanamountinexcessofonemonth'sBaseRent,Lessormay condiƟonitsconsentuponLesseeprovidinga lienand compleƟonbondinanamountequalto150%ofthe esƟmatedcostofsuch AlteraƟonor UƟlity InstallaƟonand/oruponLessee's posƟngan addiƟonalSecurityDepositwithLessor. (c) Liens;Bonds. Lesseeshallpay,whendue,allclaimsforlaborormaterialsfurnishedorallegedtohavebeenfurnishedtoorfor Lesseeator foruseonthePremises,whichclaimsareormaybesecuredbyanymechanic'sormaterialmen'slienagainstthePremisesorany interesttherein. LesseeshallgiveLessornotlessthan10days noƟcepriortothecommencementofanyworkin,onoraboutthePremises,and Lessorshallhavetherighttopost noƟcesofnon-responsibility. IfLesseeshallcontestthevalidityofanysuchlien,claimordemand,thenLessee shall,atitssoleexpensedefendandprotectitself,LessorandthePremisesagainstthesameandshallpayand saƟsfyanysuchadversejudgment thatmayberenderedthereonbeforetheenforcementthereof. IfLessorshallrequire,Lesseeshallfurnishasuretybondinanamountequalto 150%oftheamountofsuchcontestedlien,claimordemand,indemnifyingLessoragainstliabilityforthesame. IfLessorelectsto parƟcipateinany such acƟon,LesseeshallpayLessor's aƩorneys'feesandcosts.

7.4 Ownership;Removal;Surrender;and RestoraƟon.
(a) Ownership. SubjecttoLessor'srighttorequireremovalor electownershipas hereinaŌerprovided,all AlteraƟonsand UƟlity InstallaƟonsmadebyLesseeshallbethepropertyofLessee,butconsideredapartofthePremises. Lessormay,atany Ɵme,electin wriƟngtobe theownerofallorany specifiedpartoftheLesseeOwned AlteraƟonsand UƟlity InstallaƟons. Unlessotherwiseinstructedperparagraph7.4(b) hereof,allLesseeOwned AlteraƟonsand UƟlity InstallaƟonsshall,atthe expiraƟonorterminaƟonofthisLease,becomethepropertyofLessorand besurrenderedbyLesseewiththePremises.
(b) Removal. BydeliverytoLesseeof wriƩen noƟcefromLessornotearlierthan90andnotlaterthan30dayspriortotheendofthe termofthisLease,LessormayrequirethatanyorallLesseeOwned AlteraƟonsor UƟlityInstallaƟonsberemovedbythe expiraƟonor terminaƟon ofthisLease. Lessormayrequiretheremovalatany ƟmeofalloranypartofanyLesseeOwnedAlteraƟonsor UƟlity InstallaƟonsmadewithout therequiredconsent.
(c) Surrender;RestoraƟon. LesseeshallsurrenderthePremisesbythe ExpiraƟonDateoranyearlier terminaƟondate,withallofthe improvements,partsandsurfacesinAS-ISconditionwithnoobligationtoremoveanyTenantImprovementsorrepairanyportionofthe 640
Premises. thereofbroomcleanandfreeofdebris,andingood operaƟngorder, condiƟonandstateofrepair,ordinarywearandtearexcepted. "Ordinarywearandtear"shallnotincludeanydamageor deterioraƟonthatwouldhavebeenpreventedbygoodmaintenance pracƟce.

NotwithstandingtheforegoingandtheprovisionsofParagraph7.1(a),iftheLesseeoccupiesthePremisesfor12monthsorless,thenLesseeshall surrenderthePremisesinthesame condiƟonasdeliveredtoLesseeontheStartDatewithNOallowanceforordinarywearandtear. Lesseeshall repairanydamageoccasionedbythe installaƟon,maintenanceorremovalofTradeFixtures,Lesseeowned AlteraƟonsand/or UƟlity InstallaƟons, furnishings,andequipmentaswellastheremovalofanystoragetankinstalledbyorforLessee. LesseeshallalsoremovefromthePremisesany andallHazardousSubstancesbroughtontothePremisesbyor forLessee,oranythirdparty(exceptHazardousSubstanceswhichweredeposited viaundergroundmigraƟonfromareasoutsideofthePremises)tothelevel specifiedinApplicableRequirements. TradeFixturesshallremainthe propertyofLesseeandshallberemovedbyLessee. AnypersonalpropertyofLesseenotremovedonor beforethe ExpiraƟonDateoranyearlier terminaƟondateshallbedeemedtohavebeenabandonedbyLesseeandmaybedisposedoforretainedbyLessorasLessormaydesire. The failurebyLesseeto ƟmelyvacatethePremisespursuanttothisParagraph7.4(c)withouttheexpress wriƩenconsentofLessorshall consƟtutea holdoverundertheprovisionsofParagraph26below.

8. Insurance;Indemnity.

8.1 PaymentofPremiums. ThecostofthepremiumsfortheinsurancepoliciesrequiredtobecarriedbyLessor,pursuanttoParagraphs

8.2(b),8.3(a)and8.3(b),shallbeaCommonArea OperaƟngExpense. Premiumsforpolicyperiodscommencingpriorto,orextendingbeyond,the termofthisLeaseshallbeproratedtocoincidewiththecorrespondingStartDateor ExpiraƟonDate.

8.2 LiabilityInsurance.
(a) CarriedbyLessee. Lesseeshallobtainandkeepinforcea CommercialGeneralLiabilitypolicyofinsurance protecƟngLesseeand Lessorasan addiƟonalinsuredagainstclaimsforbodilyinjury,personalinjuryandpropertydamagebaseduponorarisingoutoftheownership, use,occupancyormaintenanceofthePremisesandallareasappurtenantthereto. Suchinsuranceshallbeonanoccurrencebasisprovidingsingle limitcoverageinanamountnotlessthan$1,000,000peroccurrencewithanannualaggregateofnotlessthan$2,000,000. LesseeshalladdLessor asan addiƟonalinsuredbymeansofanendorsementatleastasbroadastheInsuranceServiceOrganizaƟon's "AddiƟonalInsured-Managersor LessorsofPremises"Endorsement. Thepolicyshallnotcontainanyintra-insuredexclusionsasbetweeninsuredpersonsor organizaƟons,butshall includecoverageforliabilityassumedunderthisLeaseasan"insuredcontract"fortheperformanceofLessee'sindemnity obligaƟonsunderthis Lease. Thelimitsofsaidinsuranceshallnot,however,limittheliabilityofLesseenorrelieveLesseeofany obligaƟonhereunder.Lesseeshall provideanendorsementonitsliabilitypolicy(ies)whichprovidesthatits insuranceshallbeprimarytoandnotcontributorywithanysimilar insurancecarriedbyLessor,whoseinsuranceshallbeconsideredexcessinsuranceonly. (b) CarriedbyLessor. LessorshallmaintainliabilityinsuranceasdescribedinParagraph8.2(a),in addiƟonto,andnotinlieuof,the insurancerequiredtobemaintainedbyLessee. Lesseeshallnotbenamedasan addiƟonalinsuredtherein.

8.3 PropertyInsurance-Building,ImprovementsandRentalValue. (a) BuildingandImprovements. LessorshallobtainandkeepinforceapolicyorpoliciesofinsuranceinthenameofLessor,withloss payabletoLessor,anyground-lessor,andtoanyLenderinsuringlossor damagetothePremises. Theamountofsuchinsuranceshallbeequalto thefullinsurablereplacementcostofthePremises,asthesameshallexistfrom Ɵmeto Ɵme,ortheamountrequiredbyanyLender,butinno eventmorethanthecommerciallyreasonableandavailableinsurablevaluethereof. LesseeOwnedAlteraƟonsand UƟlity InstallaƟons,Trade Fixtures,andLessee'spersonalpropertyshallbeinsuredbyLesseenotbyLessor. Ifthecoverageisavailableandcommerciallyappropriate,such policyorpoliciesshallinsureagainstallrisksofdirectphysicallossordamage(excepttheperilsof floodand/orearthquakeunlessrequiredbya Lender),includingcoveragefordebrisremovalandtheenforcementofanyApplicableRequirementsrequiringtheupgrading,demoliƟon, reconstrucƟonorreplacementofany porƟonofthePremisesastheresultofa coveredloss. Saidpolicyorpoliciesshallalsocontainanagreed valuaƟonprovisioninlieuofanycoinsuranceclause,waiverof subrogaƟon,and inflaƟonguard protecƟoncausinganincreaseintheannual propertyinsurancecoverageamountbyafactorofnotlessthantheadjustedU.S. DepartmentofLaborConsumerPriceIndexforAllUrban ConsumersforthecitynearesttowherethePremisesarelocated. Ifsuchinsurancecoveragehasa deducƟbleclause,the deducƟbleamountshall notexceed$5,000peroccurrence.
(b) RentalValue. LessorshallalsoobtainandkeepinforceapolicyorpoliciesinthenameofLessorwithlosspayabletoLessorandany Lender,insuringthelossofthefullRentforoneyearwithanextendedperiodofindemnityforan addiƟonal180days("RentalValueinsurance").

Saidinsuranceshallcontainanagreed valuaƟonprovisioninlieuofanycoinsuranceclause,andtheamountofcoverageshallbeadjustedannually to reflecttheprojectedRentotherwisepayablebyLessee,forthenext12monthperiod. (c) AdjacentPremises. LesseeshallpayforanyincreaseinthepremiumsforthepropertyinsuranceoftheBuildingandforthe CommonAreasorotherbuildingsintheShoppingCenterifsaidincreaseiscausedbyLessee'sacts,omissions,useoroccupancyofthePremises. (d) Lessee'sImprovements. SinceLessoristheInsuringParty,LessorshallnotberequiredtoinsureLesseeOwned AlteraƟonsand UƟlity InstallaƟonsunlesstheitemin quesƟonhasbecomethepropertyofLessorunderthetermsofthisLease.

8.4 Lessee'sProperty;Business InterrupƟonInsurance;Worker's CompensaƟonInsurance. (a) PropertyDamage. LesseeshallobtainandmaintaininsurancecoverageonallofLessee'spersonalproperty,TradeFixtures,and LesseeOwned AlteraƟonsand UƟlity InstallaƟons. Suchinsuranceshallbefullreplacementcostcoveragewitha deducƟbleofnottoexceed$1,000 peroccurrence. TheproceedsfromanysuchinsuranceshallbeusedbyLesseeforthereplacementofpersonalproperty,TradeFixturesandLessee Owned AlteraƟonsand UƟlity InstallaƟons.
(b) Business InterrupƟon. Lesseeshallobtainandmaintainlossofincomeandextraexpenseinsuranceinamountsaswillreimburse Lesseefordirectorindirectlossofearnings aƩributabletoallperilscommonlyinsuredagainstbyprudentlesseesinthebusinessofLesseeor aƩributableto prevenƟonofaccesstothePremisesasa resultofsuchperils. (c) Worker'sCompensaƟonInsurance. LesseeshallobtainandmaintainWorker's CompensaƟonInsuranceinsuchamountasmaybe requiredbyApplicableRequirements. Suchpolicyshallincludea'Waiverof SubrogaƟon'endorsement. LesseeshallprovideLessorwithacopyof 641
suchendorsementalongwiththe cerƟficateofinsuranceorcopyofthepolicyrequiredbyparagraph8.5. (d) No RepresentaƟonofAdequateCoverage. Lessormakesno representaƟonthatthelimitsorformsofcoverageofinsurance specifiedhereinareadequatetocoverLessee'sproperty,business operaƟonsor obligaƟonsunderthisLease.

8.5 InsurancePolicies. Insurancerequiredhereinshallbebycompaniesmaintainingduringthepolicyterma"GeneralPolicyholders RaƟng" ofatleastA-,VII,assetforthinthemostcurrentissueof"Best'sInsuranceGuide",or suchother raƟngasmayberequiredbyaLender. Lessee shallnotdoorpermittobedoneanythingwhichinvalidatestherequiredinsurancepolicies. Lesseeshall,priortotheStartDate,delivertoLessor cerƟfiedcopiesofpoliciesofsuchinsuranceor cerƟficateswithcopiesoftherequiredendorsementsevidencingtheexistenceandamountsofthe requiredinsurance. Nosuchpolicyshallbecancelableorsubjectto modificaƟonexcept aŌer30daysprior wriƩen noƟcetoLessor. Lesseeshall,at least10dayspriortothe expiraƟonofsuchpolicies,furnishLessorwithevidenceofrenewalsor"insurancebinders"evidencingrenewalthereof,or LessormayincreasehisliabilityinsurancecoverageandchargethecostthereoftoLessee,whichamountshallbepayablebyLesseetoLessorupon demand. Suchpoliciesshallbefora termofatleastoneyear,or thelengthoftheremainingtermofthisLease,whicheverisless. IfeitherParty shallfailtoprocureandmaintaintheinsurancerequiredtobecarriedbyit,theotherPartymay,butshallnotberequiredto,procureandmaintain thesame.

8.6 Waiverof SubrogaƟon. Without affecƟnganyotherrightsor remedies,LesseeandLessoreachherebyreleaseandrelievetheother,and waivetheir enƟrerighttorecoverdamagesagainsttheother,forlossofordamagetoitspropertyarisingoutoforincidenttotheperilsrequiredto beinsuredagainstherein. The effectofsuchreleasesandwaiversisnotlimitedbytheamountofinsurancecarriedor required,or byany deducƟblesapplicablehereto. The ParƟesagreetohavetheir respecƟvepropertydamageinsurancecarrierswaiveanyrightto subrogaƟonthat suchcompaniesmayhaveagainstLessororLessee,asthecasemaybe,solongastheinsuranceisnotinvalidatedthereby.

8.7 Indemnity. ExceptforLessor'sgrossnegligenceorwillfulmisconduct,Lesseeshallindemnify,protect,defendandholdharmlessthe Premises,Lessoranditsagents,Lessor'smasterorgroundlessor,partnersandLenders,fromandagainstanyandallclaims,lossofrentsand/or damages,liens,judgments, penalƟes, aƩorneys'andconsultants'fees,expensesand/orliabiliƟesarisingoutof,involving,orin connecƟonwith,a BreachoftheLeasebyLesseeand/ortheuseand/oroccupancyofthePremisesand/orProjectbyLesseeand/orbyLessee'semployees, contractorsorinvitees. Ifany acƟonorproceedingisbroughtagainstLessorbyreasonofanyoftheforegoingmaƩers,Lesseeshallupon noƟce defendthesameatLessee'sexpensebycounselreasonablysaƟsfactorytoLessorandLessorshallcooperatewithLesseeinsuchdefense. Lessor neednothave firstpaidanysuchclaiminordertobedefendedor indemnified.

8.8 ExempƟonofLessoranditsAgentsfromLiability. Notwithstandingthenegligenceor breachofthisLeasebyLessororitsagents,neither Lessornoritsagentsshallbeliableunderanycircumstancesfor:(i)injuryordamagetothepersonorgoods,wares,merchandiseorotherproperty ofLessee,Lessee'semployees,contractors,invitees,customers,oranyotherpersoninoraboutthePremises,whethersuchdamageorinjuryis causedbyorresultsfrom fire,steam,electricity,gas,waterorrain,indoorairquality,thepresenceofmoldorfromthebreakage,leakage, obstrucƟonorotherdefectsofpipes, firesprinklers,wires,appliances,plumbing,HVACorlighƟng fixtures,orfromanyothercause,whetherthe saidinjuryordamageresultsfrom condiƟonsarisinguponthePremisesor uponother porƟonsofthebuildingofwhichthePremisesareapart,or fromothersourcesorplaces,(ii)anydamagesarisingfromanyactorneglectofanyothertenantofLessororfromthefailureofLessororits agents toenforcetheprovisionsofanyotherleaseintheShoppingCenter,or(iii)injurytoLessee'sbusinessorforanylossofincomeor profittherefrom.

Instead,itisintendedthatLessee'ssolerecourseintheeventofsuchdamagesorinjurybeto fileaclaimontheinsurancepolicy(ies)thatLesseeis requiredtomaintainpursuanttotheprovisionsofparagraph8.

8.9 FailuretoProvideInsurance. Lesseeacknowledgesthatanyfailureonitsparttoobtainormaintaintheinsurancerequiredhereinwill exposeLessortorisksand potenƟallycauseLessortoincurcostsnotcontemplatedbythisLease,theextentofwhichwillbeextremelydifficultto ascertain. Accordingly,foranymonthor porƟonthereofthatLesseedoesnotmaintaintherequiredinsuranceand/ordoesnotprovideLessorwith therequiredbindersor cerƟficatesevidencingtheexistenceoftherequiredinsurance,theBaseRentshallbe automaƟcallyincreased,withoutany requirementfor noƟcetoLessee,byanamountequalto10%ofthethen exisƟngBaseRentor$100,whicheverisgreater.The parƟesagreethat suchincreaseinBaseRentrepresentsfairandreasonablecompensaƟonforthe addiƟonalrisk/coststhatLessorwillincurbyreasonofLessee's failuretomaintaintherequiredinsurance. SuchincreaseinBaseRentshallinnoevent consƟtuteawaiverofLessee'sDefaultorBreachwith respecttothefailuretomaintainsuchinsurance,preventtheexerciseofanyoftheotherrightsandremediesgrantedhereunder,norrelieveLessee ofits obligaƟontomaintaintheinsurance specifiedinthisLease.

9. Damageor DestrucƟon.

9.1 DefiniƟons.
(a) "Premises ParƟalDamage"shallmeandamageor destrucƟontotheimprovementsonthePremises,otherthanLesseeOwned AlteraƟonsand UƟlity InstallaƟons,whichcanreasonablyberepairedin3 monthsorlessfromthedateofthedamageor destrucƟon,andthecost thereofdoesnotexceeda sumequalto6month'sBaseRent. Lessorshall noƟfyLesseein wriƟngwithin30daysfromthedateofthedamageor destrucƟonastowhetherornotthedamageis ParƟalorTotal.
(b) "PremisesTotal DestrucƟon"shallmeandamageor destrucƟontotheimprovementsonthePremises,otherthanLesseeOwned AlteraƟonsand UƟlity InstallaƟonsandTradeFixtures,whichcannotreasonablyberepairedin3 monthsorlessfromthedateofthedamageor destrucƟonand/orthecostthereofexceedsasumequalto6 month'sBaseRent. Lessorshall noƟfyLesseein wriƟngwithin30daysfromthedate ofthedamageor destrucƟonastowhetherornotthedamageis ParƟalorTotal. (c) "InsuredLoss"shallmeandamageor destrucƟontoimprovementsonthePremises,otherthanLesseeOwned AlteraƟonsand UƟlity InstallaƟonsandTradeFixtures,whichwascausedbyaneventrequiredtobecoveredbytheinsurancedescribedinParagraph8.3(a), irrespecƟve ofany deducƟbleamountsor coveragelimitsinvolved.
(d) "ReplacementCost" shallmeanthecosttorepairorrebuildtheimprovementsownedbyLessoratthe Ɵmeoftheoccurrenceto their condiƟon exisƟngimmediatelypriorthereto,including demoliƟon,debrisremovalandupgradingrequiredbythe operaƟonofApplicable Requirements,andwithout deducƟonfor depreciaƟon.
642
(e) "HazardousSubstance CondiƟon" shallmeantheoccurrenceordiscoveryofa condiƟoninvolvingthepresenceof,ora contaminaƟonby,a HazardousSubstance,in,on,orunderthePremisesorCommonAreaswhichrequires restoraƟon.

9.2 ParƟalDamage-InsuredLoss. If aPremisesParƟalDamagethatisanInsuredLossoccurs,thenLessorshall,atLessor'sexpense,repair suchdamage(butnotLessee'sTradeFixturesorLesseeOwned AlteraƟonsand UƟlity InstallaƟons)assoonasreasonablypossibleandthisLease shall conƟnueinfullforceand effect;provided,however,thatLesseeshall,atLessor's elecƟon,maketherepairofanydamageor destrucƟonthe totalReplacementCostofwhichis$10,000or less,and,insuchevent,LessorshallmakeanyapplicableinsuranceproceedsavailabletoLesseeona reasonablebasisforthatpurpose. Notwithstandingtheforegoing,if therequiredinsurancewasnotinforceortheinsuranceproceedsarenot sufficientto effectsuchrepair,theInsuringPartyshallpromptlycontributetheshortageinproceedsasandwhenrequiredtocompletesaidrepairs.

Intheevent,however,suchshortagewasduetothefactthat,byreasonoftheuniquenatureoftheimprovements,fullReplacementCost insurancecoveragewasnotcommerciallyreasonableandavailable,Lessorshallhaveno obligaƟontopayfortheshortageininsuranceproceedsor tofullyrestoretheuniqueaspectsofthePremisesunlessLesseeprovidesLessorwiththefundstocoversame,oradequateassurancethereof, within10daysfollowingreceiptof wriƩen noƟceofsuchshortageandrequesttherefor. IfLessorreceivessaidfundsoradequateassurance thereofwithinsaid10dayperiod,thepartyresponsibleformakingtherepairsshallcompletethemassoonasreasonablypossibleandthisLease shallremaininfullforceand effect. Ifsuchfundsorassurancearenotreceived,Lessormayneverthelesselectby wriƩen noƟcetoLesseewithin10 days thereaŌerto:(i)makesuch restoraƟonandrepairasiscommerciallyreasonablewithLessorpayinganyshortageinproceeds,inwhichcase thisLeaseshallremaininfullforceand effect,or(ii)havethisLeaseterminate30daysthereaŌer .Lesseeshallnotbe enƟtledtoreimbursementof anyfundscontributedbyLesseetorepairanysuchdamageor destrucƟon. Premises ParƟalDamagedueto floodorearthquakeshallbesubjectto Paragraph9.3,notwithstandingthattheremaybesomeinsurancecoverage,butthenetproceedsofanysuchinsuranceshallbemadeavailablefor therepairsifmadebyeitherParty.

9.3 ParƟalDamage-UninsuredLoss. Ifa PremisesParƟalDamagethatisnotanInsuredLossoccurs,unlesscausedbyanegligentorwillful actofLessee(inwhicheventLesseeshallmaketherepairsatLessee'sexpense),Lessormayeither: (i)repairsuchdamageassoonasreasonably possibleatLessor'sexpense(subjecttoreimbursementpursuanttoParagraph4.2),inwhicheventthisLeaseshall conƟnueinfullforceand effect, or(ii)terminatethisLeasebygiving wriƩen noƟcetoLesseewithin30days aŌerreceiptbyLessorofknowledgeoftheoccurrenceofsuchdamage.

Such terminaƟonshallbe effecƟve60daysfollowingthedateofsuch noƟce. IntheeventLessorelectstoterminatethisLease,Lesseeshallhave therightwithin10days aŌerreceiptofthe terminaƟon noƟcetogive wriƩen noƟcetoLessorofLessee'scommitmenttopayfortherepairofsuch damagewithoutreimbursementfromLessor. LesseeshallprovideLessorwithsaidfundsor saƟsfactoryassurancethereofwithin30days aŌer makingsuchcommitment. InsucheventthisLeaseshall conƟnueinfullforceand effect,andLessorshallproceedtomakesuchrepairsassoonas reasonablypossible aŌertherequiredfundsareavailable. If Lesseedoesnotmaketherequiredcommitment,thisLeaseshallterminateasofthe date specifiedinthe terminaƟon noƟce.

9.4 Total DestrucƟon. Notwithstandinganyotherprovisionhereof,ifa PremisesTotalDestrucƟonoccurs,thisLeaseshallterminate60days followingsuch DestrucƟon. Ifthedamageor destrucƟonwascausedbythegrossnegligenceorwillfulmisconductofLessee,Lessorshallhavethe righttorecoverLessor'sdamagesfromLessee,exceptasprovidedinParagraph8.6.

9.5 DamageNearEndofTerm. Ifatany Ɵmeduringthelast6monthsofthisLeasethereisdamageforwhichthecosttorepairexceedsone month'sBaseRent,whetheror notanInsuredLoss,LessormayterminatethisLease effecƟve60daysfollowingthedateofoccurrenceofsuch damagebygivinga wriƩen terminaƟonnoƟcetoLesseewithin30days aŌerthedateofoccurrenceofsuchdamage. Notwithstandingthe foregoing,ifLesseeatthat ƟmehasanexercisableopƟontoextendthisLeaseortopurchasethePremises,thenLesseemaypreservethisLeaseby (a)exercisingsuch opƟonand(b)providingLessorwithanyshortageininsuranceproceeds(oradequateassurancethereof)neededtomakethe repairsonorbeforetheearlierof(i)thedatewhichis10days aŌerLessee'sreceiptofLessor's wriƩen noƟce purporƟngtoterminatethisLease,or (ii)thedaypriortothedateuponwhichsuch opƟonexpires. IfLesseedulyexercisessuch opƟonduringsuchperiodandprovidesLessorwithfunds (oradequateassurancethereof)tocoveranyshortageininsuranceproceeds,Lessorshall,atLessor'scommerciallyreasonableexpense,repairsuch damageassoonasreasonablypossibleandthisLeaseshall conƟnueinfullforceand effect. IfLesseefailstoexercisesuch opƟonandprovidesuch fundsorassuranceduringsuchperiod,thenthisLeaseshallterminateonthedate specifiedinthe terminaƟon noƟceandLessee's opƟonshallbe exƟnguished.

9.6 DamagetoShoppingCenter. Intheeventofanydamageor destrucƟontoother porƟonsoftheBuildingortoanyotherbuildingsinthe ShoppingCenter,whetherinsuredoruninsured(andwhetherornotthereisalsodamageor destrucƟontothePremises),whichcannotreasonably berepairedin6monthsorlessfromthedateofthedamageor destrucƟon,Lessormayeither(i)repairsuchdamageor destrucƟonassoonas reasonablypossiblewithoutexpensetoLessee,inwhicheventthisLeaseshall conƟnueinfullforceand effect,or (ii)terminatethisLeasebygiving wriƩen noƟcetoLesseewithin30days aŌerreceiptbyLessorofknowledgeoftheoccurrenceofsuchdamageor destrucƟon. Such terminaƟon shallbe effecƟve60daysfollowingthedateofsuch noƟce.

9.7 AbatementofRent;Lessee'sRemedies.
(a) Abatement. IntheeventofPremises ParƟalDamageorPremisesTotal DestrucƟonora HazardousSubstance CondiƟonforwhich LesseeisnotresponsibleunderthisLease,theBaseRentpayablebyLesseefortheperiodrequiredfortherepair,remediaƟonor restoraƟonofsuch damageshallbeabatedin proporƟontothedegreetowhichLessee'suseofthePremisesisimpaired,butnottoexceedtheproceedsreceived fromtheRentalValueInsurance. Allother obligaƟonsofLesseehereundershallbeperformedbyLessee,andLessorshallhavenoliabilityforany suchdamage, destrucƟon, remediaƟon,repairor restoraƟonexceptasprovidedherein. (b) Remedies. If Lessorshallbeobligatedtorepairor restorethePremisesanddoesnotcommence,ina substanƟalandmeaningful way,suchrepairor restoraƟonwithin90days aŌersuch obligaƟonshallaccrue,Lesseemay,atany Ɵmepriortothecommencementofsuchrepair or restoraƟon,give wriƩen noƟcetoLessorandtoanyLendersofwhichLesseehasactual noƟce,ofLessee's elecƟontoterminatethisLeaseona datenotlessthan60daysfollowingthegivingofsuch noƟce. If Lesseegivessuch noƟceandsuchrepairor restoraƟonisnotcommencedwithin30 days thereaŌer,thisLeaseshallterminateasofthedate specifiedinsaid noƟce. Iftherepairor restoraƟoniscommencedwithinsuch30days,this Leaseshall conƟnueinfullforceand effect. "Commence"shallmeaneitherthe uncondiƟonalauthorizaƟonofthe preparaƟonoftherequired 643
plans,orthebeginningoftheactualworkonthePremises,whichever firstoccurs.

9.8 T erminaƟon;AdvancePayments. Upon terminaƟonofthisLeasepursuanttoParagraph6.2(g)orParagraph9,anequitableadjustment shallbemadeconcerningadvanceBaseRentandanyotheradvancepaymentsmadebyLesseetoLessor. Lessorshall,in addiƟon,returntoLessee somuchofLessee'sSecurityDepositashasnotbeen,or isnotthenrequiredtobe,usedbyLessor.

10. RealPropertyTaxes. SeeParagraph62

10.1 DefiniƟon. Asusedherein,theterm"RealPropertyTaxes"shallincludeanyformofassessment;realestate,general,special,ordinaryor extraordinary,orrentallevyortax(otherthaninheritance,personalincomeorestatetaxes);improvementbond;and/orlicensefeeimposedupon orleviedagainstanylegalorequitableinterestofLessorintheShoppingCenter,Lessor'srighttootherincometherefrom,and/orLessor'sbusiness ofleasing,byanyauthorityhavingthedirectorindirectpowertotaxandwherethefundsaregeneratedwithreferencetotheShoppingCenter address. Theterm"RealPropertyTaxes"shallalsoincludeanytax,fee,levy,assessmentorcharge,oranyincreasetherein:(i)imposedbyreason ofeventsoccurringduringthetermofthisLease,includingbutnotlimitedto,achangeintheownershipoftheShoppingCenter,(ii)achangeinthe improvementsthereon,and/or(iii)leviedorassessedonmachineryor equipmentprovidedbyLessortoLesseepursuanttothisLease. In calculaƟngRealPropertyTaxesforanycalendaryear,theRealPropertyTaxesforanyrealestatetaxyearshallbeincludedinthe calculaƟonofReal PropertyTaxesforsuchcalendaryearbaseduponthenumberofdayswhichsuchcalendaryearandtaxyearhaveincommon.

10.2PaymentofTaxes. ExceptasotherwiseprovidedinParagraph10.3,LessorshallpaytheRealPropertyTaxesapplicabletotheBuilding ParcelShoppingCenter,andsaidpaymentsshallbeincludedinthe calculaƟonofCommonAreaOperaƟngExpensesinaccordancewiththe provisionsofParagraph4.2.

10.3 AddiƟonalImprovements. CommonArea OperaƟngExpensesshallnotincludeRealPropertyTaxes specifiedinthetaxassessor'srecords andworksheetsasbeingcausedby addiƟonalimprovementsplacedupontheShoppingCenterbyotherlesseesorbyLessorfortheexclusive enjoymentofsuchotherlessees. NotwithstandingParagraph10.2hereof,Lesseeshall,however,paytoLessoratthe ƟmeCommonArea OperaƟng ExpensesarepayableunderParagraph4.2,the enƟretyofanyincreaseinRealPropertyTaxesifassessedsolelybyreasonof AlteraƟons,Trade Fixturesor UƟlity InstallaƟonsplaceduponthePremisesbyLesseeoratLessee'srequest,orbyreasonofany alteraƟonsorimprovementstothe PremisesmadebyLessorsubsequenttothe execuƟonofthisLeasebythe ParƟes.

10.4JointAssessment. IftheBuildingisnotseparatelyassessed,RealPropertyTaxesallocatedtotheBuildingshallbeanequitable proporƟon oftheRealPropertyTaxesforallofthelandandimprovementsincludedwithinthetaxparcelassessed,such proporƟontobedeterminedbyLessor fromthe respecƟve valuaƟonsassignedintheassessor'sworksheetsorsuchother informaƟonasmaybereasonablyavailable. Lessor's reasonable determinaƟonthereof,ingoodfaith,shallbeconclusive.

10.5PersonalPropertyTaxes. LesseeshallpaypriortodelinquencyalltaxesassessedagainstandlevieduponLesseeOwned AlteraƟonsand UƟlity InstallaƟons,TradeFixtures,furnishings,equipmentandallpersonalpropertyofLesseecontainedinthePremises. Whenpossible,Lessee shallcauseitsLesseeOwned AlteraƟonsand UƟlity InstallaƟons,TradeFixtures,furnishings,equipmentandallotherpersonalpropertytobe assessedandbilledseparatelyfromtherealpropertyofLessor. IfanyofLessee'ssaidpropertyshallbeassessedwithLessor'srealproperty,Lessee shallpayLessorthetaxes aƩributabletoLessee'spropertywithin10days aŌerreceiptofa wriƩenstatement seƫngforththetaxesapplicableto Lessee'sproperty.

11. UƟliƟesandServices.SeeParagraph56.

11.1Lesseeshallpayforallwater,gas,heat,light,power,telephone,trashdisposalandother uƟliƟesandservicessuppliedtothePremises, togetherwithanytaxesthereon. Totheextentanysuch uƟliƟesand/orservicesarenotseparately metered,LesseeshallpayLessee'sSharethereof inaccordancewithParagraph4.2. NotwithstandingtheprovisionsofParagraph4.2,ifatany ƟmeinLessor'ssolejudgment,Lessordeterminesthat Lesseeisusinga disproporƟonateamountofwater,electricityorothercommonlymetereduƟliƟes,orthatLesseeis generaƟngsuchalargevolume oftrashastorequireanincreaseinthesizeofthetrashreceptacleand/oranincreaseinthenumberof Ɵmespermonththatitis empƟed,then LessormayincreaseLessee'sBaseRentbyanamountequaltosuchincreasedcosts. ThereshallbenoabatementofRentandLessorshallnotbe liableinanyrespectwhatsoeverfortheinadequacy,stoppage,interrupƟonor disconƟnuanceofany uƟlityorserviceduetoriot,strike,labor dispute,breakdown,accident,repairorothercausebeyondLessor'sreasonablecontrolorincooperaƟonwithgovernmentalrequestor direcƟons.

11.2Within fiŌeendaysofLessor's wriƩenrequest,LesseeagreestodelivertoLessorsuchinformaƟon,documentsand/or authorizaƟonas LessorneedsinorderforLessortocomplywithnewor exisƟngApplicableRequirements relaƟngtocommercialbuildingenergyusage, raƟngs, and/orthe reporƟngthereof.

12. Assignmentand Subleƫng.SeeParagraph65

12.1Lessor'sConsentRequired.
(a) Lesseeshallnotvoluntarilyorby operaƟonoflawassign,transfer,mortgageorencumber(collecƟvely,"assignorassignment")or subletalloranypartofLessee'sinterestinthisLeaseorinthePremiseswithoutLessor'sprior wriƩenconsent. (b) UnlessLesseeisa corporaƟonanditsstockispubliclytradedona naƟonalstockexchange,achangeinthecontrolofLesseeshall consƟtuteanassignmentrequiringconsent. Thetransfer,ona cumulaƟvebasis,of25%ormoreofthe voƟngcontrolofLesseeshall consƟtutea changeincontrolforthispurpose.
(c) TheinvolvementofLesseeorits assetsinany transacƟon,orseriesof transacƟons(bywayofmerger,sale, acquisiƟon, financing, transfer,leveragedbuyoutorotherwise),whetherornotaformalassignmentor hypothecaƟonofthisLeaseor Lessee'sassetsoccurs,whichresults orwillresultina reducƟonoftheNetWorthofLesseebyanamountgreaterthan25%ofsuchNetWorthasitwasrepresentedatthe Ɵmeofthe execuƟonofthisLeaseoratthe ƟmeofthemostrecentassignmenttowhichLessorhasconsented,orasitexistsimmediatelypriortosaid transacƟonor transacƟons consƟtuƟngsuch reducƟon,whicheverwasorisgreater,shallbeconsideredanassignmentofthisLeasetowhichLessor maywithholditsconsent. "NetWorthofLessee"shallmeanthenetworthofLessee(excludinganyguarantors)establishedundergenerally accepted accounƟngprinciples.
644
(d) Anassignmentor subleƫngwithoutconsentshall,atLessor's opƟon,bea DefaultcurableaŌer noƟceperParagraph13.1(d),ora non-curableBreachwithoutthenecessityofany noƟceandgraceperiod. IfLessorelectstotreatsuchunapprovedassignmentor subleƫngasa non-curableBreach,Lessormayeither:(i)terminatethisLease,or(ii)upon30days wriƩennoƟce,increasethemonthlyBaseRentandPercentage RentRateto110%oftheBaseRentandPercentageRentRatethenin effect. Further,intheeventofsuchBreachandrentaladjustment,(i)the purchasepriceofany opƟontopurchasethePremisesheldbyLesseeshallbesubjecttosimilaradjustmentto110%ofthepricepreviouslyin effect,and(ii)all fixedandnon-fixedrentaladjustmentsscheduledduringtheremainderoftheLeasetermshallbeincreasedto110%ofthe scheduledadjustedrent.
(e) Lessee'sremedyforanybreachofParagraph12.1byLessorshallbelimitedtocompensatorydamagesand/or injuncƟverelief. (f) Lessormayreasonablywithholdconsenttoaproposedassignmentor subleƫngifLesseeisinDefaultatthe Ɵmeconsentis requested.
(g) Notwithstandingtheforegoing,allowingademinimis porƟonofthePremises,i.e.20squarefeetorless,tobeusedbya thirdparty vendorin connecƟonwiththe installaƟonofavendingmachineorpayphoneshallnot consƟtuteasubleƫng.

12.2Termsand CondiƟonsApplicabletoAssignmentand Subleƫng. (a) RegardlessofLessor'sconsent,noassignmentor subleƫngshall: (i)be effecƟvewithouttheexpresswriƩen assumpƟonbysuch assigneeorsublesseeofthe obligaƟonsofLesseeunderthisLease,(ii)releaseLesseeofanyobligaƟonshereunder,or(iii)altertheprimaryliability ofLesseeforthepaymentofRentorfortheperformanceofanyother obligaƟonstobeperformedbyLessee. (b) LessormayacceptRentorperformanceofLessee's obligaƟonsfromanypersonotherthanLesseependingapprovalordisapproval ofanassignment. NeitheradelayintheapprovalordisapprovalofsuchassignmentnortheacceptanceofRentorperformanceshall consƟtutea waiverorestoppelofLessor'srighttoexerciseitsremediesforLessee'sDefaultorBreach. (c) Lessor'sconsenttoanyassignmentor subleƫngshallnot consƟtuteaconsenttoanysubsequentassignmentor subleƫng. (d) IntheeventofanyDefaultorBreachbyLessee,LessormayproceeddirectlyagainstLessee,anyGuarantorsor anyoneelse responsiblefortheperformanceofLessee's obligaƟonsunderthisLease,includinganyassigneeorsublessee,without first exhausƟngLessor's remediesagainstanyotherpersonor enƟtyresponsibletherefortoLessor,oranysecurityheldbyLessor. (e) Eachrequestforconsenttoanassignmentor subleƫngshallbein wriƟng,accompaniedbyinformaƟonrelevanttoLessor's determinaƟonastothe financialand operaƟonalresponsibilityandappropriatenessoftheproposedassigneeorsublessee,includingbutnot limitedtotheintendeduseand/orrequired modificaƟonofthePremises,if any,togetherwithafeeof$500as consideraƟonforLessor's consideringandprocessingsaidrequest. LesseeagreestoprovideLessorwithsuchotheror addiƟonal informaƟonand/or documentaƟonasmay bereasonablyrequested.(SeealsoParagraph36)
(f) Anyassigneeof,or sublesseeunder,thisLeaseshall,byreasonof accepƟngsuchassignment, enteringintosuchsublease,or entering intopossessionofthePremisesorany porƟonthereof,bedeemedtohaveassumedandagreedtoconformandcomplywitheachandeveryterm, covenant, condiƟonand obligaƟonhereintobeobservedorperformedbyLesseeduringthetermofsaidassignmentorsublease,otherthansuch obligaƟonsasarecontrarytoorinconsistentwithprovisionsofanassignmentorsubleasetowhichLessorhas specificallyconsentedtoin wriƟng. (g) Lessor'sconsenttoanyassignmentor subleƫngshallnottransfertotheassigneeorsublesseeany OpƟongrantedtotheoriginal LesseebythisLeaseunlesssuchtransferis specificallyconsentedtobyLessorin wriƟng. (SeeParagraph39.2)

12.3 AddiƟonalTermsand CondiƟonsApplicableto Subleƫng. Thefollowingtermsand condiƟonsshallapplytoany subleƫngbyLesseeof alloranypartofthePremisesandshallbedeemedincludedinallsubleasesunderthisLeasewhetherornotexpresslyincorporatedtherein:
(a) LesseeherebyassignsandtransferstoLessorallofLessee'sinterestinallRentpayableonanysublease,andLessormaycollectsuch RentandapplysametowardLessee's obligaƟonsunderthisLease;provided,however,that unƟla BreachshalloccurintheperformanceofLessee's obligaƟons,LesseemaycollectsaidRent. IntheeventthattheamountcollectedbyLessorexceedsLessee'sthenoutstandingobligaƟonsanysuch excessshallberefundedtoLessee. Lessorshallnot,byreasonoftheforegoingoranyassignmentofsuchsublease,norbyreasonofthe collecƟon ofRent,bedeemedliabletothesublesseeforanyfailureofLesseetoperformandcomplywithanyofLessee's obligaƟonstosuchsublessee.

Lesseeherebyirrevocablyauthorizesanddirectsanysuchsublessee,uponreceiptofa wriƩen noƟcefromLessor staƟngthataBreachexistsinthe performanceofLessee's obligaƟonsunderthisLease,topaytoLessorallRentdueandtobecomedueunderthesublease. Sublesseeshallrely uponanysuch noƟcefromLessorandshallpayallRentstoLessorwithoutany obligaƟonor rightto inquireastowhethersuchBreachexists, notwithstandinganyclaimfromLesseetothecontrary.
(b) Intheeventofa BreachbyLessee,Lessormay,atits opƟon,requiresublesseeto aƩorntoLessor,inwhicheventLessorshall undertakethe obligaƟonsofthesublessorundersuchsubleasefromthe Ɵmeoftheexerciseofsaid opƟontothe expiraƟonofsuchsublease; provided,however,Lessorshallnotbeliableforanyprepaidrentsor securitydepositpaidbysuchsublesseetosuchsublessororforanyprior DefaultsorBreachesofsuchsublessor.
(c) Any maƩerrequiringtheconsentofthesublessorunderasubleaseshallalsorequiretheconsentofLessor. (d) NosublesseeshallfurtherassignorsubletalloranypartofthePremiseswithoutLessor'sprior wriƩenconsent. (e) Lessorshalldelivera copyofany noƟceofDefaultorBreachbyLesseetothesublessee,whoshallhavetherighttocuretheDefault ofLesseewithinthegraceperiod,ifany, specifiedinsuch noƟce. Thesublesseeshallhavearightofreimbursementand offsetfromandagainst LesseeforanysuchDefaultscuredbythesublessee.

13. Default;Breach;Remedies.

13.1Default;Breach. A"Default"is definedasa failurebytheLesseetocomplywithor performanyoftheterms,covenants, condiƟonsor Rulesand RegulaƟonsunderthisLease. A"Breach"is definedastheoccurrenceofoneor moreofthefollowingDefaults,andthefailureofLessee tocuresuchDefaultwithinanyapplicablegraceperiod:
(a) The vacaƟngorabandonmentofthePremises. LesseeshallbedeemedtohavevacatedthePremisesifLesseeceasesto conƟnuouslyoperateitsbusinessinthePremisesforaperiodof5 consecuƟvedays. 645
(b) ThefailureofLesseetomakeanypaymentofRentoranySecurityDepositrequiredtobemadebyLesseehereunder,whetherto Lessorortoathirdparty,whendue,toprovidereasonableevidenceofinsuranceorsuretybond,orto fulfillany obligaƟonunderthisLeasewhich endangersorthreatenslifeorproperty,wheresuchfailureconƟnuesforaperiodof3businessdaysfollowing wriƩen noƟcetoLessee. THE

ACCEPTANCEBYLESSOROFA PARTIALPAYMENTOFRENTORSECURITYDEPOSITSHALLNOTCONSTITUTEAWAIVEROFANYOFLESSOR'SRIGHTS, INCLUDINGLESSOR'SRIGHTTORECOVERPOSSESSIONOFTHEPREMISES. (c) ThefailureofLesseetoallowLessorand/oritsagentsaccesstothePremisesorthecommissionofwaste,actoracts consƟtuƟng publicorprivatenuisance,and/oranillegal acƟvityonthePremisesbyLessee,wheresuch acƟons conƟnuefora periodof3businessdays following wriƩen noƟcetoLessee. IntheeventthatLesseecommitswaste,anuisanceoranillegal acƟvityasecond Ɵmethen,theLessormayelect totreatsuchconductasanon-curableBreachratherthanaDefault. (d) ThefailurebyLesseetoprovide(i)reasonable wriƩenevidenceofcompliancewithApplicableRequirements,(ii)theservice contracts,(iii)therescissionofanunauthorizedassignmentor subleƫng,(iv)anEstoppelCerƟficateor financialstatements,(v)a requested subordinaƟon,(vi)evidenceconcerninganyguarantyand/orGuarantor,(vii)anydocumentrequestedunderParagraph41,(viii)materialsafetydata sheets(MSDS),or(ix)anyother documentaƟonor informaƟonwhichLessormayreasonablyrequireofLesseeunderthetermsofthisLease,where anysuchfailure conƟnuesforaperiodof10daysfollowing wriƩen noƟcetoLessee. (e) ADefaultbyLesseeastotheterms,covenants, condiƟonsorprovisionsofthisLease,oroftherulesadoptedunderParagraph2.9 hereof,otherthanthosedescribedinsubparagraphs13.1(a),(b),(c)or(d),above,wheresuchDefaultconƟnuesforaperiodof30daysaŌer wriƩen noƟce;provided,however,thatifthenatureofLessee'sDefaultissuchthatmorethan30 daysarereasonablyrequiredforitscure,thenit shallnotbedeemedtobeaBreachifLesseecommencessuchcurewithinsaid30dayperiodandthereaŌerdiligentlyprosecutessuchcureto compleƟon.
(f) Theoccurrenceofanyofthefollowingevents: (i)themakingofanygeneralarrangementor assignmentforthe benefitofcreditors; (ii)becominga"debtor" as definedin11U.S.C.§101oranysuccessorstatutethereto(unless,inthecaseofa peƟƟon filedagainstLessee,the sameisdismissedwithin60days);(iii)theappointmentofatrusteeorreceivertotakepossessionof substanƟallyallofLessee'sassetslocatedat thePremisesorofLessee'sinterestinthisLease,wherepossessionisnotrestoredtoLesseewithin30days;or(iv)the aƩachment,execuƟonor otherjudicialseizureof substanƟallyallofLessee'sassetslocatedatthePremisesorofLessee'sinterestinthisLease,wheresuchseizureisnot dischargedwithin30days;provided,however,intheeventthatanyprovisionofthissubparagraphiscontrarytoanyapplicablelaw,suchprovision shallbeofnoforceor effect,andnot affectthevalidityoftheremainingprovisions. (g) Thediscoverythatany financialstatementofLesseeorofanyGuarantorgiventoLessorwasmateriallyfalse. (h) IftheperformanceofLessee's obligaƟonsunderthisLeaseisguaranteed: (i)thedeathofa Guarantor,(ii)the terminaƟonofa Guarantor'sliabilitywithrespecttothisLeaseotherthaninaccordancewiththetermsofsuchguaranty,(iii)aGuarantor'sbecominginsolventor thesubjectofabankruptcy filing,(iv)a Guarantor'srefusaltohonortheguaranty,or(v)aGuarantor'sbreachofitsguaranty obligaƟononan anƟcipatorybasis,andLessee'sfailure,within60daysfollowingwriƩen noƟceofanysuchevent, toprovide wriƩen alternaƟveassuranceor security,which,whencoupledwiththethen exisƟngresourcesofLessee,equalsorexceedsthecombined financialresourcesofLesseeandthe Guarantorsthatexistedatthe Ɵmeof execuƟonofthisLease.

13.2Remedies. If Lesseefailstoperformanyofits affirmaƟveduƟesor obligaƟons,within10days aŌer wriƩen noƟce(orincaseofan emergency,without noƟce),Lessormay,atits opƟon,performsuchdutyor obligaƟononLessee'sbehalf,includingbutnotlimitedtotheobtaining ofreasonablyrequiredbonds,insurancepolicies,or governmentallicenses,permitsorapprovals. LesseeshallpaytoLessoranamountequalto 115%ofthecostsandexpensesincurredbyLessorinsuchperformanceuponreceiptofaninvoicetherefor. Intheeventofa Breach,Lessormay, withorwithoutfurther noƟceordemand,andwithout limiƟngLessorintheexerciseofanyrightorremedywhichLessormayhavebyreasonof suchBreach:
(a) TerminateLessee'srighttopossessionofthePremisesbyanylawfulmeans,inwhichcasethisLeaseshallterminateandLesseeshall immediatelysurrenderpossessiontoLessor. InsucheventLessorshallbe enƟtledtorecoverfromLessee: (i)theunpaidRentwhichhadbeen earnedatthe Ɵmeof terminaƟon;(ii)theworthatthe Ɵmeofawardoftheamountbywhichtheunpaidrentwhichwouldhavebeenearned aŌer terminaƟon unƟlthe ƟmeofawardexceedstheamountofsuchrentallossthattheLesseeprovescouldhavebeenreasonablyavoided;(iii)the worthatthe Ɵmeofawardoftheamountbywhichtheunpaidrentforthebalanceoftheterm aŌerthe Ɵmeofawardexceedstheamountofsuch rentallossthattheLesseeprovescouldbereasonablyavoided;and(iv)anyotheramountnecessarytocompensateLessorforallthedetriment proximatelycausedbytheLessee'sfailuretoperformits obligaƟonsunderthisLeaseor whichintheordinarycourseofthingswouldbelikelyto resulttherefrom,includingbutnotlimitedtothecostofrecoveringpossessionofthePremises,expensesof releƫng,includingnecessary renovaƟonand alteraƟonofthePremises,reasonable aƩorneys'fees,andthat porƟonofanyleasingcommissionpaidbyLessorin connecƟonwith thisLeaseapplicabletotheunexpiredtermofthisLease. Theworthatthe Ɵmeofawardoftheamountreferredtoinprovision(iii)ofthe immediatelyprecedingsentenceshallbecomputedby discounƟngsuchamountatthediscountrateoftheFederalReserveBankoftheDistrict withinwhichthePremisesarelocatedatthe Ɵmeofawardplusonepercent. EffortsbyLessortomiƟgatedamagescausedbyLessee'sBreachof thisLeaseshallnotwaiveLessor'srighttorecoveranydamagestowhichLessorisotherwise enƟtled. If terminaƟonofthisLeaseisobtained throughtheprovisionalremedyofunlawfuldetainer,LessorshallhavetherighttorecoverinsuchproceedinganyunpaidRentanddamagesasare recoverabletherein,orLessormayreservetherighttorecoveralloranypartthereofinaseparatesuit. Ifa noƟceandgraceperiodrequiredunder Paragraph13.1wasnotpreviouslygiven,a noƟcetopayrentor quit,ortoperformor quitgiventoLesseeundertheunlawfuldetainerstatuteshall also consƟtutethe noƟcerequiredbyParagraph13.1. Insuchcase,theapplicablegraceperiodrequiredbyParagraph13.1andtheunlawful detainerstatuteshallrunconcurrently,andthefailureofLesseetocuretheDefaultwithinthegreaterofthetwosuchgraceperiodsshall consƟtute bothanunlawfuldetainerandaBreachofthisLease enƟtlingLessortotheremediesprovidedforinthisLeaseand/orbysaidstatute. (b) ConƟnuetheLeaseandLessee'srighttopossessionandrecovertheRentasitbecomesdue,inwhicheventLesseemaysubletor assign,subjectonlytoreasonable limitaƟons. Actsofmaintenance, effortstorelet,and/ortheappointmentofareceivertoprotecttheLessor's interests,shallnot consƟtutea terminaƟonoftheLessee'srighttopossession. 646
(c) Pursueanyotherremedynowor hereaŌeravailableunderthelawsorjudicialdecisionsofthestatewhereinthePremisesare located. The expiraƟonor terminaƟonofthisLeaseand/orthe terminaƟonofLessee'srighttopossessionshallnotrelieveLesseefromliability underanyindemnityprovisionsofthisLeaseasto maƩersoccurringoraccruingduringthetermhereofor byreasonofLessee'soccupancyofthe Premises.

13.3InducementRecapture. Anyagreementforfreeorabatedrentorothercharges,thecostoftenantimprovementsforLesseepaidforor performedbyLessor,orforthegivingorpayingbyLessortoorforLesseeofanycashorotherbonus,inducementor consideraƟonforLessee's enteringintothisLease,allofwhichconcessionsare hereinaŌerreferredtoas"InducementProvisions,"shallbedeemed condiƟonedupon Lessee'sfullandfaithfulperformanceofalloftheterms,covenantsand condiƟonsofthisLease. UponBreachofthisLeasebyLessee,anysuch InducementProvisionshall automaƟcallybedeemeddeletedfromthisLeaseandofnofurtherforceor effect,andanyrent,othercharge,bonus, inducementor consideraƟontheretoforeabated,givenorpaidbyLessorundersuchanInducementProvisionshallbeimmediatelydueandpayable byLesseetoLessor,notwithstandinganysubsequentcureofsaidBreachbyLessee. TheacceptancebyLessorofrentor thecureoftheBreach which iniƟatedthe operaƟonofthisparagraphshallnotbedeemeda waiverbyLessoroftheprovisionsofthisparagraphunless specificallyso statedin wriƟngbyLessoratthe Ɵmeofsuchacceptance.

13.4LateCharges. LesseeherebyacknowledgesthatlatepaymentbyLesseeofRentwillcauseLessortoincurcostsnotcontemplatedbythis Lease,theexactamountofwhichwillbeextremelydifficulttoascertain. Suchcostsinclude,butarenotlimitedto,processingand accounƟng charges,andlatechargeswhichmaybeimposeduponLessorbyanyLender. Accordingly,ifanyRentshallnotbereceivedbyLessorwithin5 days aŌersuchamountshallbedue,then,withoutanyrequirementfor noƟcetoLessee,LesseeshallimmediatelypaytoLessoraone-Ɵmelatecharge equalto10%ofeachsuchoverdueamountor$100,whicheverisgreater.The parƟesherebyagreethatsuchlatechargerepresentsa fairand reasonable esƟmateofthecostsLessorwillincurbyreasonofsuchlatepayment. AcceptanceofsuchlatechargebyLessorshallinnoevent consƟtuteawaiverofLessee'sDefaultorBreachwithrespecttosuchoverdueamount,norpreventtheexerciseofanyoftheotherrightsand remediesgrantedhereunder. Intheeventthatalatechargeispayablehereunder,whetherornotcollected,for3 consecuƟveinstallmentsofBase Rent,thennotwithstandinganyprovisionofthisLeasetothecontrary,BaseRentshall,atLessor's opƟon,becomedueandpayablequarterlyin advance.

13.5Interest. AnymonetarypaymentdueLessorhereunder,otherthanlatecharges,notreceivedbyLessor,whendueshallbearinterestfrom the31stday aŌeritwasdue. Theinterest("Interest")chargedshallbecomputedattherateof10%perannumbutshallnotexceedthemaximum rateallowedbylaw. Interestispayablein addiƟontothe potenƟallatechargeprovidedforinParagraph13.4.

13.6BreachbyLessor.SeeParagraph69
(a) NoƟceofBreach. LessorshallnotbedeemedinbreachofthisLeaseunlessLessorfailswithinareasonable Ɵmetoperforman obligaƟonrequiredtobeperformedbyLessor. ForpurposesofthisParagraph,areasonable Ɵmeshallinnoeventbelessthan30days aŌerreceipt byLessor,andanyLenderwhosenameandaddressshallhavebeenfurnishedtoLesseein wriƟngforsuchpurpose,of wriƩen noƟcespecifying whereinsuch obligaƟonofLessorhasnotbeenperformed;provided,however,thatifthenatureofLessor's obligaƟonissuchthatmorethan30 daysarereasonablyrequiredforitsperformance,thenLessorshallnotbeinbreachifperformanceiscommencedwithinsuch30dayperiodand thereaŌerdiligentlypursuedto compleƟon.
(b) PerformancebyLesseeonBehalfofLessor. IntheeventthatneitherLessornorLendercuressaidbreachwithin30days aŌer receiptofsaid noƟce,orifhavingcommencedsaidcuretheydonotdiligentlypursueittocompleƟon,thenLesseemayelecttocuresaidbreachat Lessee'sexpenseand offsetfromRenttheactualandreasonablecosttoperformsuchcure,provided,however,thatsuch offsetshallnotexceedan amountequaltothegreaterofonemonth'sBaseRentortheSecurityDeposit,reservingLessee'srighttoreimbursementfromLessorforanysuch expenseinexcessofsuch offset. LesseeshalldocumentthecostofsaidcureandsupplysaiddocumentaƟontoLessor.

14. CondemnaƟon. If thePremisesor any porƟonthereofaretakenunderthepowerofeminentdomainorsoldunderthethreatoftheexercise ofsaidpower (collecƟvely"CondemnaƟon"),thisLeaseshallterminateastotheparttakenasofthedatethecondemningauthoritytakes Ɵtleor possession,whichever firstoccurs. Ifmorethan10%ofthe floorareaofthePremises,or morethan25%oftheparkingspacessituatedwithinthe parkingarea,istakenby CondemnaƟon,Lesseemay,atLessee's opƟon,tobeexercisedin wriƟngwithin10days aŌerLessorshallhavegiven Lessee wriƩen noƟceofsuchtaking(orintheabsenceofsuch noƟce,within10daysaŌerthecondemningauthorityshallhavetakenpossession) terminatethisLeaseasofthedatethecondemningauthoritytakessuchpossession. IfLesseedoesnotterminatethisLeaseinaccordancewiththe foregoing,thisLeaseshallremaininfullforceand effectastothe porƟonofthePremisesremaining,exceptthattheBaseRentshallbereducedin proporƟontothe reducƟonin uƟlityofthePremisescausedbysuch CondemnaƟon. CondemnaƟonawardsand/orpaymentsshallbetheproperty ofLessor,whethersuchawardshallbemadeas compensaƟonfor diminuƟoninvalueoftheleasehold,thevalueoftheparttaken,orforseverance damages;provided,however,thatLesseeshallbe enƟtledtoany compensaƟonpaidbythecondemnorforLessee's relocaƟonexpenses,lossof businessgoodwilland/orTradeFixtures,withoutregardtowhetheror notthisLeaseisterminatedpursuanttotheprovisionsofthisParagraph. All AlteraƟonsand UƟlity InstallaƟonsmadetothePremisesbyLessee,forpurposesof CondemnaƟononly,shallbeconsideredthepropertyofthe LesseeandLesseeshallbe enƟtledtoanyandall compensaƟonwhichispayabletherefor.IntheeventthatthisLeaseisnotterminatedbyreason ofthe CondemnaƟon,LessorshallrepairanydamagetothePremisescausedbysuch CondemnaƟon.

15. BrokerageFees.

15.1 AddiƟonalCommission. In addiƟontothepaymentsowedpursuanttoParagraph1.13above,Lessoragreesthat: (a)if Lesseeexercises any OpƟon,(b)ifLesseeoranyone affiliatedwithLesseeacquiresfromLessoranyrightstothePremisesorotherpremisesownedbyLessorand locatedwithintheShoppingCenter,(c)if LesseeremainsinpossessionofthePremises,withtheconsentofLessor, aŌerthe expiraƟonofthisLease, or(d)if BaseRentisincreased,whetherbyagreementor operaƟonofan escalaƟonclauseherein,then,LessorshallpayBrokersafeeinaccordance withthefeescheduleoftheBrokersin effectatthe ƟmetheLeasewasexecuted. Theprovisionsofthisparagraphareintendedtosupersedethe provisionsofanyearlieragreementtothecontrary.
647

15.2 AssumpƟonof ObligaƟons. AnybuyerortransfereeofLessor'sinterestinthisLeaseshallbedeemedtohaveassumedLessor's obligaƟon hereunder.Brokersshallbethirdparty beneficiariesoftheprovisionsofParagraphs1.13,15,22and31. IfLessorfailstopaytoBrokersany amountsdueasandforbrokeragefeespertainingtothisLeasewhendue,thensuchamountsshallaccrueInterest. In addiƟon,ifLessorfailstopay anyamountstoLessee'sBrokerwhendue,Lessee'sBrokermaysend wriƩen noƟcetoLessorandLesseeofsuchfailureandif Lessorfailstopay suchamountswithin10days aŌersaid noƟce,Lesseeshallpaysaidmoniestoits Brokerand offsetsuchamountsagainstRent. In addiƟon,Lessee's Brokershallbedeemedtobea thirdparty beneficiaryofanycommissionagreemententeredintobyand/orbetweenLessorandLessor'sBrokerfor thelimitedpurposeof collecƟnganybrokeragefeeowed.

15.3 RepresentaƟonsand IndemniƟesofBroker RelaƟonships. LesseeandLessoreachrepresentandwarranttotheotherthatithashadno dealingswithanyperson, firm,broker,agentor finder(otherthantheBrokersandAgents,ifany)in connecƟonwiththisLease,andthatnoone otherthansaidnamedBrokersandAgentsis enƟtledtoanycommissionor finder'sfeein connecƟonherewith. LesseeandLessordoeachhereby agreetoindemnify,protect,defendandholdtheotherharmlessfromandagainstliabilityforcompensaƟonor chargeswhichmaybeclaimedby anysuchunnamedbroker,finderorothersimilarpartybyreasonofanydealingsor acƟonsoftheindemnifyingParty,includinganycosts,expenses, aƩorneys'feesreasonablyincurredwithrespectthereto.

16. EstoppelCerƟficates.
(a) EachParty(as"RespondingParty")shallwithin10days aŌer wriƩen noƟcefromtheotherParty(the"RequesƟngParty")execute, acknowledgeanddelivertothe RequesƟngPartyastatementin wriƟnginformsimilartothethenmostcurrent"Estoppel CerƟficate"form publishedbyAIRCRE,plussuch addiƟonal informaƟon, confirmaƟonand/orstatementsasmaybereasonablyrequestedbythe RequesƟngParty. (b) IftheRespondingPartyshallfailtoexecuteor delivertheEstoppel CerƟficatewithinsuch10dayperiod,the RequesƟngPartymay executeanEstoppel CerƟficate staƟngthat:(i)theLeaseisinfullforceand effectwithoutmodificaƟonexceptasmayberepresentedbythe RequesƟngParty,(ii)therearenouncureddefaultsinthe RequesƟngParty'sperformance,and(iii)ifLessoristhe RequesƟngParty,notmorethan onemonth'srenthasbeenpaidinadvance. ProspecƟvepurchasersandencumbrancersmayrelyuponthe RequesƟngParty'sEstoppel CerƟficate, andtheRespondingPartyshallbeestoppedfromdenyingthetruthofthefactscontainedinsaidCerƟficate. In addiƟon,Lesseeacknowledgesthat anyfailureonitsparttoprovidesuchanEstoppel CerƟficatewillexposeLessortorisksandpotenƟallycauseLessortoincurcostsnotcontemplated bythisLease,theextentofwhichwillbeextremely difficulttoascertain. Accordingly,shouldtheLesseefailtoexecuteand/ordeliverarequested Estoppel CerƟficateina ƟmelyfashionthemonthlyBaseRentshallbe automaƟcallyincreased,withoutanyrequirementfor noƟcetoLessee,byan amountequalto10%ofthethen exisƟngBaseRentor$100,whicheverisgreaterforremainderoftheLease. The ParƟesagreethatsuchincrease inBaseRentrepresentsfairandreasonable compensaƟonforthe addiƟonalrisk/coststhatLessorwillincurbyreasonofLessee'sfailuretoprovide theEstoppelCerƟficate. SuchincreaseinBaseRentshallinnoevent consƟtuteawaiverofLessee'sDefaultorBreachwithrespecttothefailureto providetheEstoppel CerƟficatenorpreventtheexerciseofanyoftheotherrightsandremediesgrantedhereunder. (c) IfLessordesiresto finance, refinance,orsellthePremises,oranypartthereof,LesseeandallGuarantorsshallwithin10days aŌer wriƩen noƟcefromLessordelivertoany potenƟallenderorpurchaserdesignatedbyLessorsuch financialstatementsasmaybereasonably requiredbysuchlenderorpurchaser,includingbutnotlimitedtoLessee's financialstatementsforthepast3 years. Allsuch financialstatements shallbereceivedbyLessorandsuchlenderorpurchaserin confidenceandshallbeusedonlyforthepurposeshereinsetforth.

17. DefiniƟonofLessor. Theterm"Lessor"asusedhereinshallmeantheownerorownersatthe Ɵmein quesƟonofthefee ƟtletothePremises, or,ifthisisasublease,oftheLessee'sinterestinthepriorlease. Intheeventofatransfer ofLessor's ƟtleorinterestinthePremisesorthisLease, Lessorshalldelivertothetransfereeor assignee(incashorbycredit)anyunusedSecurityDepositheldbyLessor. Uponsuchtransferor assignmentanddeliveryoftheSecurityDeposit,asaforesaid,thepriorLessorshallberelievedofallliabilitywithrespecttothe obligaƟonsand/or covenantsunderthisLease thereaŌertobeperformedbytheLessor. Subjecttotheforegoing,the obligaƟonsand/orcovenantsinthisLeasetobe performedbytheLessorshallbebindingonlyupontheLessorashereinabovedefined.

18. Severability.TheinvalidityofanyprovisionofthisLease,asdeterminedbya courtofcompetent jurisdicƟon,shallinnoway affectthevalidity ofanyotherprovisionhereof.

19. Days. Unlessotherwise specificallyindicatedtothecontrary,theword"days"asusedinthisLeaseshallmeanandrefertocalendardays.

20. LimitaƟononLiability. The obligaƟonsofLessorunderthisLeaseshallnot consƟtutepersonal obligaƟonsofLessor,oritspartners,members, directors, officersorshareholders,andLesseeshalllooktotheProject,andtonootherassetsofLessor,forthe saƟsfacƟonofanyliabilityofLessor withrespecttothisLease,andshallnotseekrecourseagainstLessor'spartners,members,directors, officersorshareholders,or anyoftheir personalassetsforsuch saƟsfacƟon.

21. TimeofEssence. Timeisoftheessencewithrespecttotheperformanceofall obligaƟonstobeperformedorobservedbythe ParƟesunder thisLease.

22. NoPriororOtherAgreements;BrokerDisclaimer. ThisLeasecontainsallagreementsbetweenthe ParƟeswithrespecttoany maƩer menƟonedherein,andnootherpriororcontemporaneousagreementorunderstandingshallbe effecƟve. LessorandLesseeeachrepresentsand warrantstotheBrokersthatithasmade,andisrelyingsolelyupon,itsown invesƟgaƟonastothenature,quality,characterand financial responsibilityoftheotherPartytothisLeaseandastotheuse,nature,qualityandcharacterofthePremises. Brokershavenoresponsibilitywith respecttheretoorwithrespecttoanydefaultorbreachhereofbyeitherParty.

23. NoƟces.

23.1 NoƟceRequirements. All noƟcesrequiredor permiƩedbythisLeaseorapplicablelawshallbein wriƟngandmaybedeliveredinperson (byhandorbycourier)ormaybesentbyregular, cerƟfiedorregisteredmailorU.S.PostalServiceExpressMail,withpostageprepaid,or by 648
facsimiletransmission,orbyemail,andshallbedeemed sufficientlygivenifservedinamanner specifiedinthisParagraph23. Theaddressesnoted inParagraph70 adjacenttoaParty'ssignatureonthisLeaseshallbethatParty'saddressfordeliveryormailingof noƟces. EitherPartymayby wriƩen noƟcetotheotherspecifya differentaddressfor noƟce,exceptthatuponLessee'stakingpossessionofthePremises,thePremisesshall consƟtuteLessee'saddressfor noƟce. Acopyofall noƟcestoLessorshallbeconcurrentlytransmiƩedtosuchpartyor parƟesatsuchaddressesas Lessormayfrom Ɵmeto Ɵme hereaŌerdesignatein wriƟng.

23.2Dateof NoƟce. Any noƟcesentbyregisteredor cerƟfiedmail,returnreceiptrequested,shallbedeemedgivenonthedateofdelivery shownonthereceiptcard,orifnodeliverydateisshown,thepostmarkthereon. If sentbyregularmailthe noƟceshallbedeemedgiven72hours aŌerthesameisaddressedasrequiredhereinandmailedwithpostageprepaid. NoƟcesdeliveredby UnitedStatesExpressMailor overnight courierthatguaranteesnextdaydeliveryshallbedeemedgiven24hours aŌerdeliveryofthesametothePostalServiceorcourier. NoƟces deliveredbyhand,or transmiƩedbyfacsimiletransmissionorbyemailshallbedeemeddelivereduponactualreceipt. If noƟceisreceivedona Saturday,Sundayorlegalholiday,itshallbedeemedreceivedonthenextbusinessday.

23.3 OpƟons. Notwithstandingtheforegoing,inordertoexerciseany OpƟons(seeparagraph39),the NoƟcemustbesentby CerƟfiedMail (returnreceiptrequested),ExpressMail(signaturerequired),courier(signaturerequired)orsomeothermethodologythatprovidesareceipt establishingthedatethe noƟcewasreceivedbytheLessor.

24. Waivers.
(a) NowaiverbyLessoroftheDefaultor Breachofanyterm,covenantor condiƟonhereofbyLessee,shallbedeemedawaiverofany otherterm,covenantor condiƟonhereof,orofanysubsequentDefaultorBreachbyLesseeofthesameorofanyotherterm,covenantor condiƟon hereof. Lessor'sconsentto,orapprovalof,anyactshallnotbedeemedtorenderunnecessarytheobtainingofLessor'sconsentto,orapprovalof, anysubsequentorsimilaractbyLessee,orbeconstruedasthebasisofanestoppeltoenforcetheprovisionorprovisionsofthisLeaserequiring suchconsent.
(b) TheacceptanceofRentbyLessorshallnotbeawaiverofanyDefaultorBreachbyLessee. AnypaymentbyLesseemaybeaccepted byLessoronaccountofmoniesor damagesdueLessor,notwithstandinganyqualifyingstatementsor condiƟonsmadebyLesseein connecƟon therewith,whichsuchstatementsand/or condiƟonsshallbeofnoforceor effectwhatsoeverunless specificallyagreedtoin wriƟngbyLessorator beforethe Ɵmeofdepositofsuchpayment.
(c) THEPARTIESAGREETHATTHETERMSOFTHISLEASESHALLGOVERNWITHREGARDTOALLMATTERSRELATEDTHERETOAND HEREBYWAIVETHEPROVISIONSOFANYPRESENTORFUTURESTATUTETOTHEEXTENTTHATSUCHSTATUTEISINCONSISTENTWITHTHISLEASE.

25. DisclosuresRegardingTheNatureofaRealEstateAgency RelaƟonship. (a) Whenenteringintoadiscussionwitha realestateagentregardingarealestate transacƟon,aLessororLesseeshouldfromthe outsetunderstandwhattypeofagencyrelaƟonshipor representaƟonithaswiththeagentor agentsinthe transacƟon. LessorandLessee acknowledgebeingadvisedbytheBrokersinthis transacƟon,asfollows:
(i) Lessor'sAgent. ALessor'sagentundera lisƟngagreementwiththeLessoractsastheagentfortheLessoronly. ALessor's agentorsubagenthasthefollowingaffirmaƟve obligaƟons: TotheLessor: A fiduciarydutyofutmostcare,integrity,honesty,andloyaltyindealings withtheLessor. TotheLesseeandtheLessor: (a) Diligentexerciseofreasonableskillsandcareinperformanceoftheagent's duƟes. (b)Adutyof honestandfairdealingandgoodfaith. (c)Adutytodiscloseallfactsknowntotheagentmaterially affecƟngthevalueordesirabilityofthe propertythatarenotknownto,orwithinthediligent aƩenƟonand observaƟonof,the ParƟes. AnagentisnotobligatedtorevealtoeitherParty any confidenƟalinformaƟonobtainedfromtheotherPartywhichdoesnotinvolvethe affirmaƟveduƟessetforthabove. (ii) Lessee'sAgent. AnagentcanagreetoactasagentfortheLesseeonly. Inthese situaƟons,theagentisnottheLessor'sagent, evenifbyagreementtheagentmayreceive compensaƟonforservicesrendered,eitherinfullorinpartfromtheLessor. Anagent acƟngonlyfora Lesseehasthefollowing affirmaƟve obligaƟons. TotheLessee: A fiduciarydutyofutmostcare,integrity,honesty,andloyaltyindealingswiththe Lessee. TotheLesseeandtheLessor: (a)Diligentexerciseofreasonableskillsandcareinperformanceoftheagent's duƟes. (b)Adutyofhonest andfairdealingandgoodfaith. (c)Adutytodiscloseallfactsknowntotheagentmaterially affecƟngthevalueordesirabilityofthepropertythat arenotknownto,orwithinthediligent aƩenƟonand observaƟonof,the ParƟes. AnagentisnotobligatedtorevealtoeitherPartyany confidenƟal informaƟonobtainedfromtheotherPartywhichdoesnotinvolvethe affirmaƟve duƟessetforthabove. (iii) Agent RepresenƟngBothLessorandLessee. Arealestateagent,either acƟngdirectlyorthroughoneormoreassociate licensees,canlegallybetheagentofboththeLessorandtheLesseeina transacƟon,butonlywiththeknowledgeandconsentofboththeLessor andtheLessee. Inadualagency situaƟon,theagenthasthefollowing affirmaƟve obligaƟonstoboththeLessorandtheLessee:(a)A fiduciaryduty ofutmostcare,integrity,honestyandloyaltyinthedealingswitheitherLessorortheLessee. (b)Other duƟestotheLessorandtheLesseeas statedaboveinsubparagraphs(i)or(ii). In represenƟngbothLessorandLessee,theagentmaynot,withouttheexpresspermissionofthe respecƟveParty,disclosetotheotherParty confidenƟal informaƟon,including,butnotlimitedto,facts relaƟngtoeitherLessee'sorLessor's financial posiƟon, moƟvaƟons,bargaining posiƟon,orotherpersonal informaƟonthatmayimpactrent,includingLessor'swillingnesstoaccepta rentlessthanthe lisƟngrentorLessee'swillingnesstopayrentgreaterthantherent offered. Theabove duƟesoftheagentinarealestate transacƟondonotrelieveaLessororLesseefromtheresponsibilitytoprotecttheirowninterests. LessorandLesseeshouldcarefullyreadall agreementstoassurethattheyadequatelyexpresstheirunderstandingofthe transacƟon. Arealestateagentisa person qualifiedtoadviseabout realestate. Iflegalortaxadviceisdesired,consultacompetentprofessional. BothLessorandLesseeshouldstronglyconsiderobtainingtaxadvice fromacompetentprofessionalbecausethefederalandstatetaxconsequencesofa transacƟoncanbecomplexandsubjecttochange. (b) BrokershavenoresponsibilitywithrespecttoanydefaultorbreachhereofbyeitherParty. The ParƟesagreethatnolawsuitor otherlegalproceedinginvolvinganybreachofduty,errororomission relaƟngtothisLeasemaybebroughtagainstBrokermorethanoneyear aŌer theStartDateandthattheliability(includingcourtcostsand aƩorneys'fees),ofanyBrokerwithrespecttoanysuchlawsuitand/orlegal proceedingshallnotexceedthefeereceivedbysuchBrokerpursuanttothisLease;provided,however,thattheforegoing limitaƟononeach 649
Broker'sliabilityshallnotbeapplicabletoanygrossnegligenceorwillfulmisconductofsuchBroker. (c) LessorandLesseeagreeto idenƟfytoBrokersas "ConfidenƟal"any communicaƟonor informaƟongivenBrokersthatisconsidered bysuchPartytobe confidenƟal.

26. NoRightToHoldover. LesseehasnorighttoretainpossessionofthePremisesoranypartthereofbeyondthe expiraƟonor terminaƟonof thisLease. Atorpriortothe expiraƟonor terminaƟonofthisLeaseLesseeshalldeliverexclusivepossessionofthePremisestoLessor. For purposesofthisprovisionandParagraph13.1(a),exclusivepossessionshallmeanthatLesseeshallhavevacatedthePremises,removedallofits personalpropertytherefromandthatthePremiseshavebeenreturnedinthe condiƟon specifiedinthisLease. IntheeventthatLesseedoesnot deliverexclusivepossessiontoLessoras specifiedabove,thenLessor'sdamagesduringanyholdoverperiodshallbecomputedattheamountofthe Rent(as definedinParagraph4.1)dueduringthelastfullmonthbeforethe expiraƟonorterminaƟonofthisLease(disregardinganytemporary abatementofRentthatmayhavebeenin effect),butwithBaseRentandPercentageRentRatebeing150%oftheBaseRentandPercentageRent Ratepayableduringsuchlastfullmonth. NothingcontainedhereinshallbeconstruedasconsentbyLessortoanyholdingoverbyLessee.

27. CumulaƟveRemedies. Noremedyor elecƟonhereundershallbedeemedexclusivebutshall,whereverpossible,be cumulaƟvewithallother remediesatlaworinequity.

28. Covenantsand CondiƟons; ConstrucƟonofAgreement. AllprovisionsofthisLeasetobeobservedorperformedbyLesseeareboth covenantsand condiƟons. InconstruingthisLease,allheadingsand Ɵtlesarefortheconvenienceofthe ParƟesonlyandshallnotbeconsidereda partofthisLease. Wheneverrequiredbythecontext,thesingularshallincludethepluralandviceversa. ThisLeaseshallnotbeconstruedasif preparedbyoneofthe ParƟes,butratheraccordingtoitsfairmeaningasawhole,asif bothParƟeshadpreparedit.

29. Binding Effect;ChoiceofLaw. ThisLeaseshallbebindinguponthe ParƟes,theirpersonalrepresentaƟves,successorsandassignsandbe governedbythelawsoftheStateinwhichthePremisesarelocated. Any liƟgaƟonbetweentheParƟesheretoconcerningthisLeaseshallbe iniƟatedinthecountyinwhichthePremisesarelocated. SignaturestothisLeaseaccomplishedbymeansofelectronicsignatureor similar technologyshallbelegalandbinding.

30. SubordinaƟon;AƩornment;Non-Disturbance. SeeParagraph66

30.1 SubordinaƟon. ThisLeaseandany OpƟongrantedherebyshallbesubjectandsubordinatetoanygroundlease,mortgage,deedoftrust, orother hypothecaƟonorsecuritydevice (collecƟvely,"SecurityDevice"),nowor hereaŌerplaceduponthePremises,toanyandalladvances madeonthesecuritythereof,andtoallrenewals,modificaƟons,andextensionsthereof. LesseeagreesthattheholdersofanysuchSecurity Devices(inthisLeasetogetherreferredtoas"Lender")shallhavenoliabilityor obligaƟontoperformanyofthe obligaƟonsofLessorunderthis Lease. AnyLendermayelecttohavethisLeaseand/orany OpƟongrantedherebysuperiortothelienofitsSecurityDevicebygiving wriƩen noƟce thereoftoLessee,whereuponthisLeaseandsuch OpƟonsshallbedeemedpriortosuchSecurityDevice,notwithstandingthe relaƟvedatesofthe documentaƟonor recordaƟonthereof.

30.2 AƩornment. IntheeventthatLessortransfersƟtletothePremises,or thePremisesareacquiredbyanotherupontheforeclosureor terminaƟonofa SecurityDevicetowhichthisLeaseissubordinated(i)Lesseeshall,subjecttothenon-disturbanceprovisionsofParagraph30.3, aƩorntosuchnewowner,anduponrequest,enterintoanewlease,containingallofthetermsandprovisionsofthisLease,withsuchnewowner fortheremainderofthetermhereof,or,atthe elecƟonofthenewowner,thisLeasewillautomaƟcallybecomeanewleasebetweenLesseeand suchnewowner,and(ii)Lessorshall thereaŌerberelievedofanyfurther obligaƟonshereunderandsuchnewownershallassumeallofLessor's obligaƟons,exceptthatsuchnewownershallnot:(a)beliableforanyactoromissionofanypriorlessororwithrespecttoeventsoccurringpriorto acquisiƟonofownership;(b)besubjecttoany offsetsor defenseswhichLesseemighthaveagainstanypriorlessor, (c)beboundbyprepaymentof morethanonemonth'srent,or(d)beliableforthereturnofanysecuritydepositpaidtoanypriorlessorwhichwasnotpaidorcreditedtosuch newowner.

30.3Non-Disturbance. WithrespecttoSecurityDevicesenteredintobyLessor aŌerthe execuƟonofthisLease,Lessee's subordinaƟonofthis Leaseshallbesubjecttoreceivinga commerciallyreasonablenon-disturbanceagreement(a"Non-DisturbanceAgreement")fromtheLender whichNon-DisturbanceAgreementprovidesthatLessee'spossessionofthePremises,andthisLease,includingany opƟonstoextendtheterm hereof,willnotbedisturbedsolongasLesseeisnotinBreachhereofand aƩornstotherecordownerofthePremises. Further,within60days aŌer the execuƟonofthisLease,Lessorshall,ifrequestedbyLessee,useitscommerciallyreasonable effortstoobtainaNon-DisturbanceAgreement fromtheholderofanypre-exisƟngSecurityDevicewhichissecuredbythePremises. IntheeventthatLessorisunabletoprovidethe Non-DisturbanceAgreementwithinsaid60days,thenLesseemay,atLessee's opƟon,directlycontactLenderand aƩemptto negoƟateforthe execuƟonanddeliveryofa Non-DisturbanceAgreement.

30.4Self-ExecuƟng. TheagreementscontainedinthisParagraph30shallbe effecƟvewithouttheexecuƟonofanyfurtherdocuments; provided,however,that,upon wriƩenrequestfromLessororaLenderin connecƟonwithasale, financingor refinancingofthePremises,Lessee andLessorshallexecutesuchfurther wriƟngsasmaybereasonablyrequiredtoseparatelydocumentany subordinaƟon, aƩornmentand/or Non-DisturbanceAgreementprovidedforherein.

31. AƩorneys'Fees. IfanyPartyorBrokerbringsan acƟonorproceedinginvolvingthePremiseswhetherfoundedintort,contractorequity,orto declarerightshereunder,thePrevailingParty(as hereaŌer defined)inanysuchproceeding,acƟon,orappealthereon,shallbe enƟtledto reasonable aƩorneys'fees. Suchfeesmaybeawardedinthesamesuitorrecoveredinaseparatesuit,whetheror notsuch acƟonorproceedingis pursuedtodecisionorjudgment. Theterm,"PrevailingParty"shallinclude,without limitaƟon,a PartyorBrokerwho substanƟallyobtainsor defeatsthereliefsought,asthecasemaybe,whetherbycompromise, seƩlement,judgment,ortheabandonmentbytheotherPartyorBrokerof itsclaimordefense. The aƩorneys'feesawardshallnotbecomputedinaccordancewithanycourtfeeschedule,butshallbesuchastofully reimburseall aƩorneys'feesreasonablyincurred. In addiƟon,Lessorshallbe enƟtledto aƩorneys'fees,costsandexpensesincurredinthe 650
preparaƟonandserviceof noƟcesofDefaultand consultaƟonsin connecƟontherewith,whetherornotalegal acƟonissubsequentlycommenced in connecƟonwithsuchDefaultor resulƟngBreach($200isa reasonableminimumperoccurrenceforsuchservicesand consultaƟon).

32. Lessor'sAccess;ShowingPremises;Repairs. LessorandLessor'sagentsshallhavetherighttoenterthePremisesatany Ɵme,inthecaseofan emergency,andotherwiseatreasonable Ɵmes aŌerreasonableprior noƟceduringLessee'sbusinesshours forthepurposeofshowingthesame to prospecƟvepurchasers,lenders,ortenants,andmakingsuch alteraƟons,repairs,improvementsor addiƟonstothePremisesasLessormay deemnecessaryor desirableandthe erecƟng,usingandmaintainingof uƟliƟes,services,pipesandconduitsthroughthePremisesand/orother premisesaslongasthereisnomaterialadverseeffectonLessee'suseofthePremises. AllsuchacƟviƟesshallbewithoutabatementofrentor liabilitytoLessee.

33. AucƟons. Lesseeshallnotconduct,norpermittobeconducted,any aucƟonuponthePremiseswithoutLessor'sprior wriƩenconsent,which consentshallbegrantedordeniedatLessor'ssole discreƟon.

34. Signs. LessormayplaceonthePremisesordinary"ForSale"signsatany Ɵmeandordinary"ForLease"signsduringthelast6monthsofthe termhereof. AllsignsmustcomplywithallApplicableRequirements. Lesseeshallnotplace,construct,ormaintainontheglasspanesorsupports oftheshowwindowsofthePremises,thedoors,exteriorwallsortheroofoftheBuilding,oranywhereelsewithintheShoppingCenteroutsideof thePremises,oronanyinteriorporƟonsofthePremisesthatarevisiblefromtheexteriorofthePremises,anysigns, adverƟsements,names, insignia,trademarks,descripƟvematerialor anyotheritemswithoutLessor'sprior wriƩenconsent,whichconsentshallbegrantedordeniedat Lessor'ssole discreƟon. Lessorshalldesignatethesize,shape,color,design,and locaƟonofallexteriorsign(s)tobeinstalledbyLessee,andLessee shall,atLessee'ssolecostandexpense,fabricate,constructandinstallallsuchsign(s)infullcompliancewithLessor's designaƟonandinaccordance withtheSignCriteriafortheShoppingCenter aƩachedhereto,ifany. Lesseeagreestosubmitplansand specificaƟonsforLessee'ssign(s)for Lessor's wriƩenapprovalwithin30days aŌerthefull execuƟonhereofandtoinstallsuchsign(s)priortoopeningforbusinessatthePremises.

Lessor,atLessee'scost,mayremoveanyitemplaced,constructedormaintainedin,uponoraboutthePremisesorShoppingCenterwhichdoesnot complywiththisparagraph. Intheeventthereisa pole,pylonormonumentsignfortheShoppingCenter,Lessorshallhavetheright,butnotthe obligaƟon,toinstall leƩering designaƟngLessee'sbusinessonsuchsign,atLessee'sexpense,withLessor'sapprovalof locaƟon,size,styleandcolor.

Allsignsthatarepermanently aƩachedtothePremisesor BuildingshallbecomethepropertyofLessoratthe expiraƟonor earlier terminaƟon hereof;provided,however,thatLesseeshallpromptlyremoveallsuchsignsifLessorsoelects,andLesseeshallpromptlyrepairalldamagecaused bysuchremoval. Lesseeshallnotplace,constructormaintainin,uponoraboutthePremisesanysearchlights, flashinglights,loudspeakers, phonographsorothervisualoraudiomedia.SeeParagraph57

35. T erminaƟon;Merger. Unless specificallystatedotherwisein wriƟngbyLessor,thevoluntaryorothersurrenderofthisLeasebyLessee,the mutual terminaƟonor cancellaƟonhereof,ora terminaƟonhereofbyLessorforBreachbyLessee,shall automaƟcallyterminateanysubleaseor lesserestateinthePremises;provided,however,thatLessormayelectto conƟnueanyoneorall exisƟngsubtenancies. Lessor'sfailurewithin10 daysfollowinganysucheventtoelecttothecontraryby wriƩen noƟcetotheholderofanysuchlesserinterest,shall consƟtuteLessor's elecƟonto havesuchevent consƟtutethe terminaƟonofsuchinterest.

36. Consents. Allrequestsforconsentshallbein wriƟng. Exceptasotherwiseprovidedherein,whereverinthisLeasetheconsentofaPartyis requiredtoanactbyorfortheotherParty,suchconsentshallnotbeunreasonablywithheldordelayed. Inthoseexpressinstanceswhereconsent iswithinthesole discreƟonofaparty,thepartyshallhaveno obligaƟontoadheretoastandardofreasonableness. Lessor'sactualreasonable costsandexpenses(includingbutnotlimitedtoarchitects',aƩorneys',engineers'andotherconsultants'fees)incurredinthe consideraƟonof,or responseto,a requestbyLesseeforanyLessorconsent,includingbutnotlimitedtoconsentstoanassignment,a subleƫngor thepresenceoruse ofaHazardousSubstance,shallbepaidbyLesseeuponreceiptofaninvoiceand supporƟngdocumentaƟontherefor. Lessor'sconsenttoanyact, assignmentor subleƫngshallnot consƟtutean acknowledgmentthatnoDefaultorBreachbyLesseeofthisLeaseexists,norshallsuchconsentbe deemedawaiverofanythen exisƟngDefaultorBreach,exceptasmaybeotherwise specificallystatedin wriƟngbyLessoratthe Ɵmeofsuch consent. Thefailuretospecifyhereinany parƟcular condiƟontoLessor'sconsentshallnotprecludethe imposiƟonbyLessoratthe Ɵmeofconsent ofsuchfurtherorother condiƟonsasarethenreasonablewithreferencetothe parƟcular maƩerforwhichconsentisbeinggiven. Intheevent thateitherPartydisagreeswithany determinaƟonmadebytheotherhereunderandreasonablyrequeststhereasonsforsuch determinaƟon,the determiningpartyshallfurnishitsreasonsin wriƟngandinreasonabledetailwithin10businessdaysfollowingsuchrequest.

37. Guarantor.

37.1 ExecuƟon. TheGuarantors,ifany,shalleachexecuteaguarantyintheformmostrecentlypublishedbyAIRCRE.

37.2Default. Itshall consƟtuteaDefaultoftheLesseeif anyGuarantorfailsorrefuses,uponrequesttoprovide: (a)evidenceofthe execuƟon oftheguaranty,includingtheauthorityofthepartysigningonGuarantor'sbehalftoobligateGuarantor,andinthecaseofacorporateGuarantor,a cerƟfiedcopyofa resoluƟonofitsboardofdirectorsauthorizingthemakingofsuchguaranty,(b)current financialstatements,(c)anEstoppel CerƟficate,or(d) wriƩen confirmaƟonthattheguarantyis sƟllin effect.

38. QuietPossession. SubjecttopaymentbyLesseeoftheRentandperformanceofallofthecovenants, condiƟonsandprovisionsonLessee's parttobeobservedandperformedunderthisLease,LesseeshallhavequietpossessionandquietenjoymentofthePremisesduringtheterm hereof.

39. OpƟons. IfLesseeisgrantedany OpƟon,as definedbelow,thenthefollowingprovisionsshallapply.

39.1 DefiniƟon. "OpƟon"shallmean: (a)therighttoextendorreducethetermoforrenewthisLeaseor toextendorreducethetermofor renewanyleasethatLesseehasonotherpropertyofLessor;(b)therightof firstrefusalor first offertoleaseeitherthePremisesorotherproperty ofLessor;(c)therighttopurchase,therightof first offertopurchaseortherightof firstrefusaltopurchasethePremisesor otherpropertyof 651
Lessor.

39.2 OpƟonsPersonalToOriginalLessee. Any OpƟongrantedtoLesseeinthisLeaseispersonaltotheoriginalLessee,andcannotbeassigned orexercisedbyanyoneotherthansaidoriginalLesseeandonlywhiletheoriginalLesseeisinfullpossessionofthePremisesand,if requestedby Lessor,withLessee cerƟfyingthatLesseehasno intenƟonof thereaŌerassigningor subleƫng.

39.3 MulƟple OpƟons. IntheeventthatLesseehasany mulƟple OpƟonstoextendorrenewthisLease,alater OpƟoncannotbeexercised unlesstheprior OpƟonshavebeenvalidlyexercised.

39.4 EffectofDefaulton OpƟons.
(a) Lesseeshallhavenorighttoexercisean OpƟon: (i)duringtheperiodcommencingwiththegivingofany noƟceofDefaultand conƟnuing unƟlsaidDefaultiscured,(ii)duringtheperiodof ƟmeanyRentisunpaid(withoutregardtowhether noƟcethereofisgivenLessee),(iii) duringthe ƟmeLesseeisinBreachofthisLease,or (iv)intheeventthatLesseehasbeengiven3 ormore noƟcesofseparateDefault,whetheror nottheDefaultsarecured,duringthe12monthperiodimmediatelyprecedingtheexerciseoftheOpƟon. (b) Theperiodof Ɵmewithinwhichan OpƟonmaybeexercisedshallnotbeextendedorenlargedbyreasonofLessee'sinabilityto exercisean OpƟonbecauseoftheprovisionsofParagraph39.4(a). (c) An OpƟonshallterminateandbeofnofurtherforceor effect,notwithstandingLessee'sdueand Ɵmelyexerciseofthe OpƟon,if, aŌersuchexerciseandpriortothecommencementoftheextendedtermor compleƟonofthepurchase,(i)LesseefailstopayRentfora periodof 30daysaŌersuchRentbecomesdue(withoutanynecessityofLessortogive noƟcethereof),or(ii)if Lesseecommitsa BreachofthisLease.

40. SecurityMeasures. LesseeherebyacknowledgesthattheRentpayabletoLessorhereunderdoesnotincludethecostofguardserviceor othersecuritymeasures,andthatLessorshallhaveno obligaƟonwhatsoevertoprovidesame. Lesseeassumesallresponsibilityforthe protecƟon ofthePremises,Lessee,itsagentsandinviteesandtheirpropertyfromtheactsofthird parƟes. WhileLessordoesnotassumeanyresponsibilityto provideanysecuritymeasuresor anyliabilityforfailuretoprovidesecuritymeasuresor foranyinadequacythereof,Lessorshallhavetheauthority to insƟtuteor conƟnuesuchsecuritymeasuresasLessorinitssole discreƟondeemsnecessaryorappropriatefrom Ɵmeto Ɵme,thecostand expensesofwhichshallbeconsideredCommonArea OperaƟngExpenses. TothedegreedirectedbyLessor,Lesseeshallcoordinateitssecurity measuresatthePremiseswiththesecuritymeasures insƟtutedbyLessor,if any.

41. ReservaƟons. Lessorreservestheright:(i)togrant,withouttheconsentorjoinderofLessee,sucheasements,rightsand dedicaƟonsthat Lessordeemsnecessary,(ii)tocausethe recordaƟonofparcelmapsand restricƟons,and(iii)tocreateand/orinstallnew uƟlityraceways,solong assucheasements,rights, dedicaƟons,maps, restricƟons,and uƟlityracewaysdonotunreasonablyinterferewiththeuseofthePremisesby Lessee. LesseeagreestosignanydocumentsreasonablyrequestedbyLessorto effectuatesuchrights.

42. BuildingPlanning. Lessorshallhavetherightatany Ɵmeor Ɵmes,upongivingLesseenotlessthan60daysprior wriƩen noƟce,toprovide andfurnishLesseewithspaceofcomparablevisibilitylocatedelsewherewithinanyofthebuildingswithintheShoppingCenterandtomoveLessee intosuchnewspace,providedthattheusableareaofsuchnewspaceisnotlessthantheusableareaofthePremisesandprovidedthatallof Lessee'sreasonableout-of-pocketmovingexpenses(includingbutnotlimitedtothecostofmovingLessee'spersonalproperty,thecostof reprinƟngLessee's staƟoneryorotherbusinessmaterialswiththenewaddress,andthecosttorelocateandreinstalltenantimprovementsand Lessee's telecommunicaƟonsandcomputerequipment)shallbepaidbyLessor,andprovidedfurtherthatLessorshallconstructatLessor'sexpense suchimprovementstosuchnewspaceasshallbenecessarytoplaceitina condiƟonthatissubstanƟallycomparabletothePremises. Exceptas providedintheimmediatelyprecedingsentence,Lessorshallhaveno obligaƟontoimprovesuchspaceorpayanyotherexpensesincurredby Lesseeasaresultofsuch relocaƟon. Onsuch relocaƟon,thetermsand condiƟonsofthisLeaseshallremaininfullforceand effect,includingbut notlimitedtotheBaseRentpayablehereunderandLessee'sShare(eveniftheusableareaofsuchrelocatedPremisesisinexcessoftheusable areaofthePremises),exceptthatthePremisesshallbeinsuchnew locaƟon. UponLessor'srequest,the ParƟesshallexecuteanamendmentto thisLeaseinformrequiredbyLessor confirmingthe relocaƟonofthePremisestosuchnew locaƟon. IfthenewspacedoesnotmeetwithLessee's approval,whichapprovalLesseeshallgiveor withholdinaccordancewithParagraph36,LesseeshallhavetherighttocancelthisLeasebygiving Lessor wriƩen noƟcethereofwithin15daysofreceiptofLessor's noƟficaƟonofitsintenttorelocateLessee. Lessee'sfailuretogivesuch noƟce withinsuch15dayperiodshallbedeemedLessee'sapprovalofthenewspace. If Ɵmely noƟceisgivenbyLessee,thenthisLeaseshallterminate unlessLessorrescindsLessor'sprior noƟceofitsintenttorelocateLesseewithin10days aŌerLessor'sreceiptofLessee's noƟceof cancellaƟon.

43. PerformanceUnderProtest. Ifatany ƟmeadisputeshallariseastoanyamountorsumofmoneytobepaidbyonePartytotheotherunder theprovisionshereof,thePartyagainstwhomthe obligaƟontopaythemoneyisassertedshallhavetherighttomakepayment"underprotest"and suchpaymentshallnotberegardedasavoluntarypaymentandthereshallsurvivetherightonthepartofsaidPartyto insƟtutesuitforrecoveryof suchsum. Ifitshallbeadjudgedthattherewasnolegal obligaƟononthepartofsaidPartytopaysuchsumoranypartthereof,saidPartyshallbe enƟtledtorecoversuchsumorsomuchthereofasitwasnotlegallyrequiredtopay. APartywhodoesnot iniƟatesuitfortherecoveryofsums paid"underprotest"within6 monthsshallbedeemedtohavewaiveditsrighttoprotestsuchpayment.

44. Authority; MulƟple ParƟes; ExecuƟon.
(a) IfeitherPartyheretoisa corporaƟon,trust,limitedliabilitycompany,partnership,orsimilar enƟty,eachindividual execuƟngthis Leaseonbehalfofsuch enƟtyrepresentsandwarrantsthatheorsheisdulyauthorizedtoexecuteanddeliverthisLeaseonitsbehalf. EachParty shall,within30days aŌerrequest,delivertotheotherParty saƟsfactoryevidenceofsuchauthority. (b) IfthisLeaseisexecutedbymorethanonepersonor enƟtyas"Lessee",eachsuchpersonorenƟtyshallbejointlyandseverallyliable hereunder.It isagreedthatanyoneofthenamedLesseesshallbeempoweredtoexecuteanyamendmenttothisLease,orotherdocument ancillarytheretoandbindallofthenamedLessees,andLessormayrelyonthesameasif allofthenamedLesseeshadexecutedsuchdocument. (c) ThisLeasemaybeexecutedbythe ParƟesincounterparts,eachofwhichshallbedeemedanoriginalandallofwhichtogethershall consƟtuteoneandthesameinstrument.
652

45. Conflict. Any conflictbetweentheprintedprovisionsofthisLeaseandthe typewriƩenorhandwriƩenprovisionsshallbecontrolledbythe typewriƩenor handwriƩenprovisions.SeeParagraph67.

46. Offer. PreparaƟonofthisLeasebyeitherpartyortheiragentandsubmissionofsametotheotherPartyshallnotbedeemedan offertolease totheotherParty. ThisLeaseisnotintendedtobebinding unƟlexecutedanddeliveredbyallParƟeshereto.

47. Amendments. ThisLeasemaybe modifiedonlyin wriƟng,signedbythe ParƟesininterestatthe Ɵmeofthe modificaƟon. Aslongastheydo notmateriallychangeLessee's obligaƟonshereunder,Lesseeagreestomakesuchreasonablenon-monetary modificaƟonstothisLeaseasmaybe reasonablyrequiredbyaLenderin connecƟonwiththeobtainingofnormal financingor refinancingofthePremises.

48. WaiverofJuryTrial. THEPARTIESHEREBYWAIVETHEIRRESPECTIVERIGHTSTOTRIALBYJURYIN ANYACTIONORPROCEEDINGINVOLVING THEPROPERTYORARISINGOUTOFTHISAGREEMENT.

49. ArbitraƟonofDisputes. AnAddendumrequiringthe ArbitraƟonofalldisputesbetweentheParƟesand/orBrokersarisingoutofthisLease is isnot aƩachedtothisLease.

50. Accessibility;Americanswith DisabiliƟesAct.
(a) ThePremises:
havenotundergonean inspecƟonbya CerƟfiedAccessSpecialist(CASp). Note:A CerƟfiedAccessSpecialist(CASp)caninspectthesubject premisesanddeterminewhetherthesubjectpremisescomplywithalloftheapplicable construcƟon-relatedaccessibilitystandardsunderstate law.AlthoughstatelawdoesnotrequireaCASp inspecƟonofthesubjectpremises,thecommercialpropertyownerorlessormaynotprohibitthe lesseeortenantfromobtainingaCASp inspecƟonofthesubjectpremisesfortheoccupancyorpotenƟaloccupancyofthelesseeortenant,if requestedbythelesseeortenant.The parƟesshallmutuallyagreeonthearrangementsforthe ƟmeandmanneroftheCASp inspecƟon,the paymentofthefeefortheCASp inspecƟon,andthecostofmakinganyrepairsnecessarytocorrect violaƟonsof construcƟon-relatedaccessibility standardswithinthepremises.
haveundergonean inspecƟonbya CerƟfiedAccessSpecialist(CASp)anditwasdeterminedthatthePremisesmetallapplicable construcƟon-relatedaccessibilitystandardspursuanttoCaliforniaCivilCode§55.51etseq. Lesseeacknowledgesthatitreceivedacopyofthe inspecƟonreportatleast48hourspriorto execuƟngthisLeaseandagreestokeepsuchreportconfidenƟal. haveundergonean inspecƟonbya CerƟfiedAccessSpecialist(CASp)anditwasdeterminedthatthePremisesdidnotmeetallapplicable construcƟon-relatedaccessibilitystandardspursuanttoCaliforniaCivilCode§55.51etseq. Lesseeacknowledgesthatitreceivedacopyofthe inspecƟonreportatleast48hourspriorto execuƟngthisLeaseandagreestokeepsuchreportconfidenƟalexceptasnecessarytocompleterepairs and correcƟonsof violaƟonsof construcƟonrelatedaccessibilitystandards.

IntheeventthatthePremiseshavebeenissuedan inspecƟonreportbyaCASptheLessorshallprovideacopyofthedisabilityaccess inspecƟon cerƟficatetoLesseewithin7 daysofthe execuƟonofthisLease. (b) SincecompliancewiththeAmericanswith DisabiliƟesAct(ADA)andotherstateandlocalaccessibilitystatutesaredependentupon Lessee's specificuseofthePremises,Lessormakesnowarrantyor representaƟonastowhetherornotthePremisescomplywithADAoranysimilar legislaƟon. IntheeventthatLessee'suseofthePremisesrequires modificaƟonsor addiƟonstothePremisesinordertobeincompliancewithADA orotheraccessibilitystatutes,Lesseeagreestomakeanysuchnecessary modificaƟonsand/oraddiƟonsatLessee'sexpense.

LESSORANDLESSEEHAVECAREFULLYREADANDREVIEWEDTHISLEASEANDEACHTERMANDPROVISIONCONTAINEDHEREIN,ANDBYTHE EXECUTIONOFTHISLEASESHOWTHEIRINFORMEDANDVOLUNTARYCONSENTTHERETO. THEPARTIESHEREBYAGREETHAT,ATTHETIMETHIS

LEASEISEXECUTED,THETERMSOFTHISLEASEARECOMMERCIALLYREASONABLEANDEFFECTUATETHEINTENTANDPURPOSEOFLESSORAND LESSEEWITHRESPECTTOTHEPREMISES.

ATTENTION:NOREPRESENTATIONORRECOMMENDATIONISMADEBYAIRCREORBYANYBROKERASTOTHELEGALSUFFICIENCY,LEGAL EFFECT,ORTAXCONSEQUENCESOFTHISLEASEORTHETRANSACTIONTOWHICHITRELATES. THEPARTIESAREURGEDTO:

1. SEEKADVICEOFCOUNSELASTOTHELEGALANDTAXCONSEQUENCESOFTHISLEASE.

2. RETAINAPPROPRIATECONSULTANTSTOREVIEWANDINVESTIGATETHECONDITIONOFTHEPREMISES. SAIDINVESTIGATIONSHOULD INCLUDEBUTNOTBELIMITEDTO:THEPOSSIBLEPRESENCEOFHAZARDOUSSUBSTANCES,THEZONINGOFTHEPREMISES,THESTRUCTURAL

INTEGRITY,THECONDITIONOFTHEROOFANDOPERATINGSYSTEMS,COMPLIANCEWITHTHEAMERICANSWITHDISABILITIESACTANDTHE SUITABILITYOFTHEPREMISESFORLESSEE'SINTENDEDUSE.

WARNING: IFTHEPREMISESARELOCATEDINASTATEOTHERTHANCALIFORNIA,CERTAINPROVISIONSOFTHELEASEMAYNEEDTOBEREVISED TOCOMPLYWITHTHELAWSOFTHESTATEINWHICHTHEPREMISESARELOCATED. [SIGNATURESONFOLLOWINGPAGE]
653
ThepparƟesheretohaveexecutedthisLeaseattheplaceandonthedates specifiedabovetheirrespecƟvesignatures.

Executedat: _____________________________
On: _____________ ,2023
ByLESSOR:

GoldenSpringCapitalLLC,aCalifornialimitedliabilitycompany By:

NamePrinted: ZhenyuXing,
Title: Manager
Phone:

Fax:

Email:

By:

NamePrinted:

Title:

Phone:

Fax:

Email:

Address: SeeParagraph71
FederalIDNo.:

Executedat: ________________________
On: ___________ ,2023
ByLESSEE:

CityofMurrieta,amunicipalcorporation
By:

NamePrinted: KimSummers
Title: CityManager
Phone:

Fax:

Email:

By:

ATTESTED:

NamePrinted: CristalMcDonald
Title: CityClerk
Phone:

Fax:

Email:

Address: SeeParagraph71
FederalIDNo.:

APPROVEDASTOFORM:

ALESHIRE&WYNDER,LLP
By:_________________________________
TiffanyIsrael,CityAttorney
BROKER
HarvestRealtyDevelopmentInc.

AƩn: KeXiao/JessicaZhang
Title:

Address: SeeParagraph70
Phone:

Fax:

Email:

FederalIDNo.:

BrokerDRELicense#: 01964500
AgentDRELicense#: 02072888/01986201
BROKER
Cushman& WakeϐieldofCalifornia,Inc.

AƩn: JohnGallivan
Title:

Address: SeeParagraph70
Phone:

Fax:

Email:

FederalIDNo.:

BrokerDRELicense#: 00616335
AgentDRELicense#: 01096309
AIRCRE * hƩps://www.aircre.com * 213-687-8777 * [email protected] NOTICE: Nopart oftheseworks maybe reproducedin anyformwithout permissionin wriƟng. 654

RENTADJUSTMENT(S)
(ORIGINALTERM)

STANDARDLEASEADDENDUM
Dated: October__,2023
Byand Between
Lessor: GoldenSpringCapitalLLC,aCalifornialimitedliabilitycompany Lessee: CityofMurrieta,amunicipalcorporation
PropertyAddress: Unit B&C("Premises")whicharepartof24620JeffersonAve,Murrieta,CA92562 ("BuildingParcel")which containsabuildingwith8,404squarefeet("Building") )
(streetaddress,city,state,zip)
Paragraph: 51
ThemonthlyBaseRentduringtheOriginalTermoftheLeaseshallbeincreasedbyusingthemethod(s)selectedbelow(checkmethod(s)tobe usedand fillin appropriately):

I. ConsumerPriceIndex.
a. ThemonthlyBaseRentshallbeincreasedon andevery months thereaŌerduringtheOriginalTerm("CPIIncreaseDate(s)") commensuratewiththeincreaseintheCPI(asherein defined)determinedasfollows: themonthlyBaseRentscheduledforthe firstmonthofthe OriginalTermshallbe mulƟpliedbya fracƟonthedenominatorofwhichistheBaseCPI(asherein defined),andthenumeratorofwhichisthe ComparisonCPI(asherein defined). Theamountsocalculatedshall consƟtutethenewBaseRentunƟlthenextCPIIncreaseDate,butinnoevent shallanysuchnewBaseRentbelessthantheBaseRentforthemonthimmediatelyprecedingtheapplicableCPIIncreaseDate. b. Theterm"CPI" shallmeantheConsumerPriceIndexoftheBureauofLabor StaƟsƟcsoftheU.S.DepartmentofLaborfor(select one): CPIW(UrbanWageEarnersandClericalWorkers)or CPIU(AllUrbanConsumers),for(fillinUrbanArea): or theareainwhich thePremisesislocated,AllItems(1982-1984=100). Theterm"ComparisonCPI" shallmeantheCPIofthecalendarmonthwhichis2fullmonths priortotheapplicableOriginalTermCPIIncreaseDate. Theterm"BaseCPI"shallmeantheCPIofthecalendarmonthwhichis2fullmonthsprior totheCommencementDateoftheOriginalTerm.
c. Ifthe compilaƟonand/or publicaƟonoftheCPIistransferredtoanothergovernmentaldepartment,bureauoragencyoris disconƟnued,theninsteadtheindexmostnearlythesameastheCPIshallbeusedtocalculatetheBaseRentincreaseshereunder.If the ParƟes cannotagreeonsuch alternaƟveindex,thenthe maƩershallbe submiƩedfordecisiontotheAmerican ArbitraƟon AssociaƟoninaccordancewith thethenrulesofsaid associaƟonandthedecisionofthearbitratorsshallbebindingupontheparƟes,withthecostofsuch arbitraƟonbeingpaid equallybythe ParƟes.

II. FixedPercentage. ThemonthlyBaseRentshallbeincreasedon andevery 12 months thereaŌerduringtheOriginalTerm ("PercentageIncreaseDate(s)")by three percent( 3.0 %)ofthemonthlyBaseRentscheduledtobepaidforthemonthimmediatelyprecedingthe applicablePercentageIncreaseDate.TheincreasesshalloccurontheanniversaryoftheRentCommencementDate.

III. FixedRentalAdjustment(s)("FRA").

ThemonthlyBaseRentshallbeincreasedtothefollowingamountsonthedatessetforthbelow:

On (fillinFRAAdjustmentDate(s)): ThenewBaseRentshallbe:

BROKER'SFEE: ForeachadjustmentinBaseRent specifiedabove,theBrokersshallbepaidaBrokerageFeeinaccordancewithparagraph15ofthe 655
Leaseorifapplicable,paragraph9oftheSublease.

AIRCRE * hƩps://www.aircre.com * 213-687-8777 * [email protected] NOTICE: Nopart oftheseworks maybe reproducedin anyformwithout permissionin wriƟng. 656

OPTION(S)TOEXTENDTERM

STANDARDLEASEADDENDUM
Dated: October__,2023
Byand Between
Lessor: GoldenSpringCapitalLLC,aCalifornialimitedliabilitycompany Lessee: CityofMurrieta,amunicipalcorporation
PropertyAddress: Unit B&C("Premises")whicharepartof24620JeffersonAve,Murrieta,CA92562 ("BuildingParcel")which containsabuildingwith8,404squarefeet("Building") )
(streetaddress,city,state,zip)
Paragraph: 52 OPTION(S)TOEXTENDTERM. Subjecttotheterms, condiƟonsandprovisionsofParagraph39,LessorgrantsLessee two(2) opƟon(s)toextendthetermoftheLease("Extension OpƟon(s)"),witheachExtension OpƟonbeingforatermof sixty (60) months,commencing whenthepriortermexpires("OpƟonTerm(s)"). InordertoexerciseanExtension OpƟon,Lesseemustgive wriƩen noƟceofsuch elecƟontoLessor andLessormustreceivesuch noƟceatleast nine(9)months butnotmorethan twelve(12) monthspriortothedatethattheapplicable OpƟon Termwouldcommence, Ɵmebeingoftheessence. If ƟmelyandpropernoƟficaƟonoftheexerciseofanExtension OpƟonisnotgivenbyLessee and/orreceivedbyLessor,suchExtension OpƟonshall automaƟcallyexpire. Noticeofexerciseofanoptionshallbemadeconsistentwith Paragraph23.3.Exceptas specifically modified,theterms, condiƟonsandprovisionsoftheLeaseshallapplyduring OpƟonTermsbuttheamount ofRentduring OpƟonTermsshallbeestablishedbyusingthemethod(s)selectedbelow(checkmethod(s)tobeusedand fillinappropriately):

I. ConsumerPriceIndex.
(a) Duringthe OpƟonTerm(s)whichstart(s)on ,themonthlyBaseRentshallbeincreasedon andevery months thereaŌerduring such OpƟonTerm(s)("OpƟonTermCPIIncreaseDate(s)")commensuratewiththeincreaseintheOpƟonTermCPI(asherein defined)determined asfollows: themonthlyBaseRentscheduledforthemonthimmediatelyprecedingthe firstoccurring OpƟonTermCPIIncreaseDateshallbe mulƟpliedbya fracƟonthedenominatorofwhichisthe OpƟonTermBaseCPI(asherein defined),andthenumeratorofwhichisthe OpƟonTerm ComparisonCPI(asherein defined). Theamountsocalculatedshall consƟtutethenewBaseRentunƟlthenext OpƟonTermCPIIncreaseDate duringtheapplicable OpƟonTerm,butinnoeventshallanysuchnewBaseRentbelessthantheBaseRentforthemonthimmediatelypreceding theapplicableOpƟonTermCPIIncreaseDate.
(b) Theterm"OpƟonTermCPI"shallmeantheConsumerPriceIndexoftheBureauofLabor StaƟsƟcsoftheU.S.DepartmentofLaborfor (selectone): CPIW(UrbanWageEarnersandClericalWorkers)or CPIU(AllUrbanConsumers),for(fillinUrbanArea): or theareain whichthePremisesislocated,AllItems(1982-1984=100). Theterm"OpƟonTermComparisonCPI" shallmeantheCPIofthecalendarmonth whichis2fullmonthspriortotheapplicableOpƟonTermCPIIncreaseDate. Theterm"OpƟonTermBaseCPI"shallmeantheCPIofthecalendar monthwhichis2fullmonthspriorto(selectone): CommencementDateoftheOriginalTerm, startoftheapplicable OpƟonTerm,or (fill inmonth) .
(c) If compilaƟonand/or publicaƟonoftheCPIistransferredtoanothergovernmentaldepartment,bureauoragencyoris disconƟnued,then insteadtheindexmostnearlythesameastheCPIshallbeusedtocalculatetheBaseRentincreaseshereunder.Ifthe ParƟescannotagreeonsuch alternaƟveindex,thenthe maƩershallbe submiƩedfordecisiontotheAmericanArbitraƟonAssociaƟoninaccordancewiththethenrulesofsaid associaƟonandthedecisionofthearbitratorsshallbebindinguponthe parƟes,withthecostofsuch arbitraƟonbeingpaidequallybythe ParƟes.

II. FixedPercentage. Duringthe OpƟonTerm(s)whichstart(s)on ,themonthlyBaseRentshallbeincreasedon andevery months thereaŌerduringsuch OpƟonTerm(s)("OpƟonTermPercentageIncreaseDate(s)")by percent( %)ofthemonthlyBaseRent scheduledtobepaidforthemonthimmediatelyprecedingtheapplicable OpƟonTermPercentageIncreaseDate.

III. FairMarketValue.
(a) Duringthe OpƟonTerm(s)whichstart(s)on endofthethenexistingTerm ,theamountofRentshallbetheamountforecastedtobethe fairmarketrentalvalueofthePremisesduringsuch OpƟonTermestablishedpursuanttotheprocedures,terms, assumpƟonsand condiƟonsset forthherein("FairMarketValue");provided,however,regardlessofsuchFairMarketValue,BaseRentduringan OpƟonTermshallnotbelessthan theBaseRentscheduledasofwhenthepriortermexpires. StarƟngasofLessee'sexerciseoftheapplicableExtension OpƟon(butnotearlierthan six(6)monthsbeforestartoftheapplicable OpƟonTerm),the ParƟesshallforthirty(30)days("NegoƟaƟonPeriod") aƩempttoagreeuponthe FairMarketValue. If duringthe NegoƟaƟonPeriodthe ParƟesdonotagreeontheFairMarketValue,thentheFairMarketValueshallbe establishedpursuanttotheproceduressetforthherein,whichshallbebinding. (b) EachPartyshall,within fiŌeen(15)days aŌertheendofthe NegoƟaƟonPeriod,in wriƟngsubmittotheotherPartysuchParty's determinaƟonoftheFairMarketValue("SubmiƩedValue(s)"). Ifa Partyfailsto Ɵmelyprovidea SubmiƩedValue,thentheotherParty's SubmiƩed ValueshallbetheFairMarketValue. Ifboth ParƟes Ɵmelyprovide SubmiƩedValues,theneachPartyshall,within fiŌeen(15)daysaŌerboth ParƟeshaveexchanged SubmiƩedValues,in wriƟng noƟfytheotherPartyofsuchParty'sselectedvaluatorwhoshallmeetthe qualificaƟonsset 657
forthherein("AdvocateValuator(s)"). LessorandLesseemayselectanAdvocateValuatorwhoisfavorabletosuchParty's posiƟonandmay,prior toor aŌerappointmentofanAdvocateValuator,consultwithsuchParty'sAdvocateValuator. Ifa Partyfailsto Ɵmelyandproperlyprovide noƟce ofsuchParty'schosenAdvocateValuator,thentheotherParty's SubmiƩedValueshallbetheFairMarketValue. (c) Ifboth ParƟes ƟmelyandproperlydesignateAdvocateValuators,thensuchAdvocateValuatorsshall,within fiŌeen(15)daysaŌertheir selecƟon,chooseathird(3rd)neutralvaluatorwhoshallmeetthe qualificaƟonssetforthherein("NeutralValuator"). TheNeutralValuatorshallbe engagedjointlybyLessorandLessee. IfAdvocateValuatorsfailtoagreeuponand ƟmelyappointaNeutralValuator,thenthePresidentofAIRCRE shallappointsuchNeutralValuatorwithin fiŌeen(15)daysaŌerrequestbyeitherParty. IfthePresidentofAIRCREdoesnot Ɵmelyappointthe NeutralValuator,theneitherPartymay fileanappropriatelegal acƟonforajudgewithcompetentjurisdicƟonoverthe ParƟestoappointthe NeutralValuator.
(d) TheAdvocateValuatorsandtheNeutralValuator("Valuator(s)")shallbedulylicensedrealestatebrokersorsalespersonsingoodstanding inthestateinwhichthePremisesislocated,shallhavebeen acƟveoverthe five(5)yearperiodbeforetheirappointmentintheleasingof properƟessimilartothePremiseswithinthegeneralrealestatemarketofthePremises. TheNeutralValuatorshall addiƟonallynotberelatedtoor affiliatedwitheitherPartyorAdvocateValuator,andshallnothavepreviouslyrepresentedina realestate transacƟona Partyoranyonerelatedto or affiliatedwitha Party. All maƩerstobedeterminedbytheValuatorsshallbedecidedbyamajorityvoteoftheValuators,witheachValuator havingone(1)vote. TheValuatorsmay,astheValuatorsdetermine,holdhearingsandrequirebriefs,includingmarketdataand addiƟonal informaƟon.
(e) Withinthirty(30)daysaŌer selecƟonoftheNeutralValuator,theValuatorsshall firstdeterminetheFairMarketValueestablishedby takingintoaccounttheterms, assumpƟonsand condiƟonssetforthherein("Valuators'MarketValue"),thendecidewhichParty's SubmiƩedValue iscloserinmonetaryamounttotheValuators'MarketValue("SelectedMarketValue"),thenprovidethe ParƟesa copyoftheValuators'Market Valueand finally noƟfythe ParƟesoftheSelectedMarketValue. TheSelectedMarketValueshallbetheFairMarketValue. TheValuatorsshall havenorighttodecideaSelectedMarketValuewhichisacompromiseto(or modificaƟonof) the SubmiƩedValues. ThedecisionoftheValuators shallbebindinguponthe ParƟes. ThePartywhose SubmiƩedValueisnottheSelectedMarketValueshall,withinten(10)daysaŌertheValuators decidetheSelectedMarketValue,paythefeesandcostsofallthree(3)Valuators. (f) IftheFairMarketValuehasnotbeenestablishedbeforethestartoftheapplicableOpƟonTerm,thenLesseeshall conƟnuetopayto Lessorrentintheamountpayableforthemonthimmediatelyprecedingthestartofsuch OpƟonTermandLessor'sacceptanceofsuchrentshall notwaive,adversely affector prejudicethe ParƟes'righttocompleteestablishmentoftheFairMarketValueorLessor'srighttocollectthefull amountoftheFairMarketValueoncetheFairMarketValueisestablished. Lesseeshall,withinten (10)daysaŌerestablishmentoftheFairMarket Value,paytoLessorany deficiencyinrentthendueforthe OpƟonTerm. FollowingestablishmentofFairMarketValue,the ParƟesshall,withinten (10)daysaŌerrequestbyeitherParty,signanamendmenttothisLeaseto confirmtheFairMarketValueandthe expiraƟondateofthisLease,but the ParƟes'failuretorequestortosignsuchanamendmentshallnot affectestablishmentoftheFairMarketValueorextensionoftheLeaseterm. (g) TheValuators,indecidingtheValuators'MarketValue,shalltakeintoaccountrentrates,rentabatements,periodicrentincreases,real propertytaxes,insurancepremiumsandother operaƟngexpenses,tenantimprovementandotherapplicableallowances,buildingservices,length ofleasetermandotherfactorsprofessionalrealestatebrokersand/orappraiserscustomarilyconsiderindeterminingfairmarketrentofproperty inanarm'slength transacƟonbyready,willingandable parƟesforspaceofcomparable locaƟon,size,age, condiƟon,quality,parking,visibility, view,signageandaccessibilityif thePremisesweremarketedinanormalandcustomarymannerforareasonablelengthof Ɵmeontheopen markettobeleasedtoatenantwith financialstrengthandcreditworthinesscomparabletoLesseeandguarantors(ifany)ofthisLease(asof Lessee'sexerciseoftheExtension OpƟon)foratermcomparabletothelengthoftheapplicableOpƟonTermandusedfortheAgreedUse(orother reasonablycomparableuses). TheValuators,indecidingtheValuators'MarketValue,shallnotconsiderasacomparable transacƟonanyofthe following: a sublease,leaseassignment,leaserenewalorextension;leasewithatenantthathasequity,isrelatedtoor affiliatedwiththelandlord; oraleaseofspacethatwassubjecttoa rightof firstrefusal,rightof first offer,expansion opƟonorotherencumbrances. TheValuators,indeciding theValuators'MarketValue,shallreducetheFairMarketValueonaccountof AlteraƟonsandimprovementsmadebyLesseetotheextentthecost thereofwaspaidsolelybyLessee(inexcessofanyapplicableimprovementallowance,abatedrentinlieuofimprovementallowanceorother consideraƟonprovidedbyLessorforLessee'simprovementofthePremises),shallnotreducetheFairMarketValueonaccountofanyrealestate brokeragecommissionsavingsbyLessor,andshallnotreducetheFairMarketValueonaccountofdeferredmaintenanceor repairofthePremises forwhichLesseewasresponsibleundertheLeasebutdidnotperform.

IV. FixedRentalAdjustment(s)("FRA").

ThemonthlyBaseRentshallbeincreasedtothefollowingamountsonthedatessetforthbelow:

On (fillinFRAAdjustmentDate(s)): ThenewBaseRentshallbe:

V. ConƟnuaƟonofOriginalTermAdjustments.

ThemonthlyBaseRentduringthe OpƟonTerm(s)whichstart(s)on shallbeincreasedinaccordancewiththesameformulaprovidedinthe 658
LeasetobeusedtocalculateincreasesintheBaseRentduringtheOriginalTermoftheLease.

BROKER'SFEE: ForeachadjustmentinBaseRent specifiedabove,theBrokersshallbepaida BrokerageFeeinaccordancewithparagraph15ofthe Leaseorifapplicable,paragraph9oftheSublease.

AIRCRE * hƩps://www.aircre.com * 213-687-8777 * [email protected] NOTICE: Nopart oftheseworks maybe reproducedin anyformwithout permissionin wriƟng. 659

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FIRST ADDENDUM TO LEASE AGREEMENT DATED ______, 2023
Between Golden Spring Capital LLC and City of Murrieta
PARAGRAPHS 53-70

53. LEASE COMMENCEMENT DATE (Paragraph 1.3). The Term of the Lease shall commence on the last to occur of: (i ) the delivery of the Non -Disturbance Agreement (as defined in Paragraph 69) to Lessee, and _________, 2023 (“Lease Commencement Date” or “Commencement Date”) and expire six (6) years from the Rent Commencement Date (as defined in Paragraph 54). Upon receipt of Lessor’s Commencement Date Memorandum in the form attached as Exhibit A to this Addendum, Lessee shall return to Lessor an original executed copy within in ten (10) days.

54. R ENT COMMENCEMENT DATE. The Rent Commencement Date shall be the earlier of (i) the date Lessee opens for business to the public in the Premises, or (ii) One hundred twenty ( 120) days after the Lease Commencement Date (“Rent Commencement Date”).

55. CONDITION OF PREMISES.

55.1 REQUIRED IMPROVEMENTS. Prior to delivering the Premises to Lessee, Lessor shall make the following modifications to the Premises at Lessor’s sole cost and expense in accordance with Applicable Regulations:
• The Premises shall be fully demised separately from Unit A. • Water, gas and electricity shall be separately metered to the Premises. • The hot water piping shall be fully insulated.
• The electrical and water pipe systems need to be isolated from each other so as to not be touching.
• The water heater duct is to be modified so as to not go through the Premises or otherwise modified by installation of a rated assembly to protect the Premises from the possibility of CO2 from seeping into the Premises.
• The water heater must be modified to only serve the Premises. If it serves the entire Building, then Lessor must be responsible for maintaining the water heater as well as all costs incurred in running it.

55.2 AS-IS. Lessee acknowledges that the Premises are being leased in an "as-is" condition, and, except as specified in Paragraphs 2.2, 2.3, 55.1, 63 and 64, Lessor makes no representations or warranties regarding the suitability, condition, or compliance of the Premises for Lessee's intended use except that Lessor has no actual knowledge that the Premises are not suitable for Lessee’s use. Lessee acknowledges that it shall be responsible to construct all Tenant Improvements pursuant to Paragraph 58 including any requirements applicable to the Tenant Improvements to comply with Applicable Regulations or Lessee’s specific use. Possession of the Premises shall be delivered to Lessee free of all third parties or persons.

56. UTILITIES: Electricity, gas and water shall be separately metered to the Premises. Lessee shall pay the costs of electricity for the Premises directly to the electric company. HVAC is governed by Paragraph 69. Lessee shall pay to Lessor the amount of gas and water charges based on the meter readings which shall be provided to Lessee with the specific bill for same. Lessee may install its own trash bin in the trash area. Trash services shall be provided directly to Lessee which, as the City, is exempt under the charges under the City’s service contract with the contractor.

57. SIGNAGE: To the extent permitted by the CC&Rs, Lessee shall be entitled to place one panel on the Kalmia Street monument sign at the entrance of the Shopping Center without any compensation to Lessor (“Monument Sign”). Lessee shall be entitled to place one panel on the other monument signs as requested by Lessee. Lessor shall cooperate with obtaining any approvals pursuant to the CC&Rs.

Lessee shall have the right to install signs on the Building (“Building Signs”) but shall bear all costs associated with the designing, manufacturing, installation, maintenance, repair and removal of any signage displayed on 660

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or in relation to the Premises and any necessary permits or governmental approvals required for the Building Signs and in compliance with the CC&Rs. Lessee shall engage a licensed and reputable sign contractor to perform the necessary tasks related to the Building Signs. Lessee shall obtain written approval from Lessor for the proposed Building Sign design and contractor before proceeding with any work which approval shall not be unreasonably withheld, conditioned or delayed. Lessee shall be solely responsi ble for ensuring that the Building Signs comply with all applicable laws, regulations, and Building codes. Lessee shall obtain any required permits or authorizations from the appropriate governmental authorities and provide copies of such permits to Lessor upon request. Lessee shall, at its sole cost and expense, maintain the Building Signs in good condition throughout the Lease Term including, regular cleaning, repair, and replacement of any damaged or non - functional parts. Lessee shall promptly address an y maintenance issues that may affect the Building Sign's appearance or functionality. Upon prior written notice, Lessor shall have the right to inspect the Building Signs at any reasonable time during Lessee’s normal business hours to ensure compliance wi th this Paragraph. If Lessor determines that the Building Signs are not being properly maintained or is in violation of any applicable laws or regulations, Lessee shall, upon receipt of written notice from Lessor, remedy the situation promptly at their own expense. Any alterations, modifications, or additions to a Building Sign shall be subject to the prior written approval of Lessor which shall not be unreasonably withheld, conditioned or delayed. The obligations under this Paragraph shall survive expiration or termination of the Lease.

58. TENANT IMPROVEMENTS. Lessee shall have the right to make improvements or alterations to the Premises as Lessee elects in its sole discretion which include, but not limited to, demolition of pony walls at the entrance, conversion of a restroom to a convenience room, etc. (“ Tenant Improvements”) at Lessee’s sole cost and expense subject, however, to the Lessee Improvement Allowance (as defined in Paragraph 59).

Lessor shall have no responsibility or liability for the design, construction, quality or compliance of any Lessee Improvements with Applicable Regulations. Lessee shall obtain all necessary permits, licenses, approvals, and inspections as required by Applicable Regulations. All Lessee Improvements shall be completed by Lessee using contractors properly California licensed, bonded, and insured $1,000,000 workers compensation, $2,000,000 general liability, and $1,000,000 vehicle liability in the State of California.

59. TENANT IMPROVEMENT ALLOWANCE. Lessor shall reimburse to Lessee the sum of Twelve Thousand One Hundred Seventy Dollars ($12,170) for the Lessee Improvements (“Tenant Improvement Allowance”). Lessor shall pay the Lessee Improvement Allowance to Lessee within twenty (20) days from the last to occur of the following: (i) expiration of all applicable lien periods; (ii) Lessor’s receipt of proofs of payment evidencing all costs paid by Lessee; and (iii) a final unconditional lien release from Lessee’s general contractor.

If the Lease terminates prior to the end of the Term as a result of breach by Lessee , then the unamortized portion of such Lessee Improvement Allowance (amortized on a straight-line basis over the initial six (6) year term) shall be repaid by Lessee to Lessor.

60. RIGHT OF FIRST OFFER. Lessee’s space requirements may continue to increase. In order to accommodate such growth, Lessee shall have a right of first offer to expand into the balance of the space in the Building (“Expansion Space”) as and when it becomes available during the Lease Term. As of the Effective Date, Lessor represents and warrants to Lessee that (i) the existing lease for the Expansion Space will terminate on or before ____, 20__ and the existing lessee of the space has no options to extend that lease and (ii) no third party has any rights to the Expansion Space. As of the Effective Date, Lessor covenants that it will not grant to the current lessee nor any third party any rights with respect to the Expansion Space.

When Expansion Space becomes available for lease, Lessor will give Lessee written notice (“ROFO Notice”) of that availability and the terms and conditions on which Lessor is willing to lease the Expansion Space to Lessee, which terms and conditions will be the then-prevailing market terms and conditions for the Expansion Space.

The ROFO Notice must state the actual or estimated availability date of the Expansion Space. Lessee has the right, within thirty (30) days following receipt of the ROFO Notice, to elect, by written notice to Lessor, to lease the Expansion Space on the terms and conditions contained in the ROFO Notice (“Election to Lease Notice”).

If Lessee provides the Election to Lease Notice in the time and manner specified, Lessor and Lessee will enter into an amendment to this Lease within thirty (30) days after delivery of such notice, documenting and 661

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incorporating into this Lease the terms and conditions contained in the ROFO Notice.

If Lessee fails to deliver the Election to Lease Notice in the time and manner specified, then Lessee will be deemed to have elected not to lease the Expansion Space and Lessor has ninety (90) days (“Pass Period”) to lease the Expansion Space to a third party upon the terms specified in the ROFO Notice. If Lessor does not execute a lease upon such terms for the Expansion Space with a third party within the Pass Period, the Expansion Space will be reoffered to Les see. If Lessor executes a lease for the Expa nsion Space with a third party during the Pass Period, all rights of Lessee with respect to that Expansion Space under this Paragraph will cease. If the Expansion Space becomes available for lease again at a future date, the provisions of this Paragraph will again be applicable.

61. COMMON AREA OPERATING EXPENSES. Lessee shall pay to Lessor, as Additional Rental, Lessee's Proportionate Share of the Common Area Operating Expenses (hereinafter referred to as " Operating Expenses") on the first day of each calendar month in accordance with an estimate of the annual Operating Expenses prepared by Lessor. Lessor's estimate of such expenses shall be delivered to Lessee within thirty (30) days after the Term Commencement Date and, thereafter, at least ten (10) days prior to the commencement of each calendar year of the Lease Term, provided that Lessor's failure, for any reason, to so deliver such estimates shall not in any way affect Lessor's right to collect Lessee's Proportionate Share of Operating Expenses. Lessee shall pay, monthly in advance, one-twelfth (1/12th) of Lessor's estimate of such amounts as Additional Rental. If, for any reason, Lessor is unable to provide to Lessee the estimate of any of such charges at least ten (10) days prior to the commencement of any calendar year, then Lessee shall continue to pay monthly the same amount of such charges as was applicable for the previous month until thirty (30) days after receipt of such estimate, at which time, Lessee shall commence paying as of the first day of the calendar month after delivery of such new estimate, the new estimated amounts and the difference between the previous charges and the new estimated amounts. An annual adjustment based on actual Operating Expenses shall be made by Lessor within ninety (90) days following the close of each calendar year and either a refund to Lessee or an additional payment by Lessee, as applicable, shall be made within thirty (30) days after such annual adjustment. In the event of any dispute with respect to the amount of Operating Expenses or Lessee's Proportionate Share thereof, certification of such amount by Lessor's accountant shall be conclusive upon Lessee. Lessor may direct Lessee to pay all or any portion of the Operating Expenses directly to a maintenance director, property manager or similar person or entity in accordance with payment procedures deemed appropriate by Lessor. Any installment of Addi tional Rental payable for any portion of a calendar month or Lease Year shall be a pro rata portion of the installment payment for a full calendar month or Lease Year, based upon a thirty (30) day month. Lessee's Proportionate Share of Operating Expenses shall constituted Additional Rent.

62. REAL ESTATE TAXES. Lessor will cooperate with Lessee and do all acts reasonably necessary and appropriate to secure and maintain the property tax exemption of the Premises pursuant to Article XIII, Section 3 of the California Constitution. Lessor will either pay to Lessee the amoun t of any reduction or refund of property taxes resulting from such exemption or credit such amount against the Base Rent payable hereunder, as soon as possible after Lessor receives the benefit of the tax exemption. If such exemption is granted for a fiscal year which is, in whole or in part, after the date of expiration or earlier termination of the Lease Term, then, with respect to that portion of such fiscal year which is after the Lease Term, Lessor will pay to Lessee the amount of such reduction or refund of property taxes in cash or immediately available funds. If required by the County to qualify for the tax exemption, the Parties shall execute and acknowledge a memorandum of lease to be recorded in the official records of the County.

63. MOLD DISCLOSURE. With respect to the Toxic Mold Protection Act of 2001 (California Health & Safety Code Paragraphs 26100, et seq., as amended from time to time, "Mold Act "), to the best of Lessor's actual knowledge without inquiry or investigation of any kind, as of the Lease Commencement Date, there is no mold (as defined in the Mold Act; "Mold") in or on the Shopping Center and/or the Premises, visible, invisible and/or hidden that affects the improvements thereon, that exceeds the exposure limits established by the Mold Act or that poses a health threat prohibited by the Mold Act. If, at any time during the Term, Lessee knows, or with the exercise of reasonable diligence could ascertain that Mold is present in or on the Premises; the Building of which t he Premises are a part; the heating, ventilation and air conditioning systems that service 662

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the Premises; or in an appurtenant structure; and/or that there is a condition of chronic water intrusion or flood, in each case, within two (2) business days after Lessee knows or with the exercise of reasonable diligence should know of such condition, Lessee shall notify Lessor in writing of such condition and Lessee immediately shall repair such condition. The remediation of any such condition shall be Lessee's responsibility provided that same were caused by the acts or negligence of Lessee. At all tim es during the Term, Lessee shall make the Premises available to Lessor, its agents and employees for appropriate assessment and/or remedial action upon prior reasonable notice.

64. HAZARDOUS MATERIALS. Notwithstanding anything to the contrary in Paragraph 6.2, to the best of Lessor’s knowledge as of the Lease Commencement Date, Lessor represents and warrants to Lessee that the Premises and Building are not in violation of any federal, state or local law, ordinance or regulation relating to the presence of hazardous materials.

65. ASSIGNMENT AND SUBLETTING. Notwithstanding anything to the contrary in Paragraph 12, Lessee shall have the right to sublease or assign any portion of the Premises to another public entity without any profit sharing or Lessor’s consent. Lessee shall have the right to sublease or assign any portion of the Premises to a third party with Landlord’s written consent which shall not be unreasonably withheld, conditioned or delayed.

If Lessor fails to respond to such a request from Lessee within fifteen (15) days of Lessee’s request, Lessor shall be conclusively deemed to have consented to such sublease or assignment.

66. NON-DISTURBANCE AGREEMENT. Prior to the Lease Commencement Date, Lessor shall obtain and deliver to Lessee a non-disturbance agreement in a form satisfactory to Lessee from all lenders with a deed of trust on the Property (“Non-Disturbance Agreement”).

67. CONFLICT WITH LEASE. In the event that the provisions of this First Addendum conflict with the provisions in the Lease, the provisions in this First Addendum shall prevail.

68. HVAC SYSTEM. The HVAC for the Premises (“Premises HVAC”) only serves the Premises and no other portion of the Building. L essee shall have control over the Premises HVAC during the Term. As the electricity to the Premises is separately metered, Lessee shall not be subject to any after-hours charges. If such HVAC units or system requires major repairs and/or replacement during the Lease Term, Lessor shall be responsible for any such major repairs and/or replacement, which may be capitalized and amortized over the useful life of the capital item in accordance with GAAP and added to Common Area Operating Expenses pursuant to Paragraph __.

69. LESSOR DEFAULT: Paragraph 13.6(a) is amended to change 30 days to 10 days. Paragraph 13.6(b) is amended to change one (1) month’s rent to three (3) month’s rent and to allow Lessee to recover actual damages.

70. NOTICE. All notices to be provided to Lessor and Lessee as follows:

Lessor: City of Murrieta
1 Town Square
Murrieta, CA 92562
Attn: __________________

With copy to: City of Murrieta
1 Town Square
Murrieta, CA 92562
Attn: __________________

Lessee: Golden Spring Capital LLC
________________________
_________________________

663

LEASE AGREEMENT AND SITE PREPARATION

COSTS FOR CITY HALL ANNEX SPACE
November 7, 2023
City Council Meeting
Agenda Item #16
Received After Agenda Printed
11/7/23 Regular Meeting
Item 16 - Staff Presentation
664
2 • Approximately 120 full-time staff at City Hall
• Additional workspace is needed
• Recommendation to rent commercial
space to provide supplemental space
City Hall Workspace Needs
665
3 • Located at 24620 Jefferson
• Walking Distance from City Hall
• 4,868 square feet of leased space for
office use
• Proposed lease for six years with option
to extend if needed
• Most cost-effective option of those
evaluated
City Hall Annex – Proposed Location
666
4 Estimated Costs
• Annual Lease Cost:
• Year 1 - $110,0990
• Following years – add a 3% escalator
• Year 1 for Annual Operating Costs:
• Common Area Operating Expenses - $55,500
• Utilities + Other Operating Expenditures - $68,200
• Escalator for latter years
• One-Time Costs for Site Preparation and Furnishings:
$467,123, including contingency
667
5 • Light Tenant-Improvements, Paint, Carpet Cleaning
• 21 Workspaces
• 16 workstations
• 5 offices
• Conference Room
• Two-Person Collaboration & Meeting Pod
• IT Network Cabling and Security System
• Office Equipment, Copier, etc
• File Storage and Equipment
One- Time Costs for Site Improvements
668
6 • Execute Lease Agreement and all other necessary agreements • Complete site improvements and acquire furnishings
• Targeted move-in: Late January/early February
Next Steps
669
7 Conclusion
• Staff recommends Council:
• Authorize City Manager to
execute Lease Agreement and all
other necessary agreements
• Approve budget adjustments
670
8 Questions?
671
672
City Hall Annex – Proposed Location
673

CITY OF MURRIETA
City Council Meeting Agenda
Report
11/7/2023
Agenda Item No. 17.

TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Kim Summers, City Manager
PREPARED BY: Ivan Holler, Assistant City Manager
SUBJECT: Public Safety Training Facility Architectural Design Services Agreement Award

RECOMMENDATION
Award an Agreement for Architectural Design Services for a Public Safety Training Facility to Ten Over Studio Inc.;
Amend the FY 2023/24 Capital Improvement Plan Budget (CIP 21034 Murrieta Regional Public Safety Training Center) by establishing appropriations in the amount of $200,300 from the Fire Development Impact Fee Fund for Phase 1 of the agreement;
Amend the FY 2023/24 Capital Improvement Plan Budget (CIP 21034 Murrieta Regional Public Safety Training Center) by establishing appropriations in the amount of $1,619,700 from the Fire Development Impact Fee Fund for Phase 2 if the project extends past Phase 1 of the agreement; Authorize the use of Measure T Operating Reserve in the amount of $575,000 to fund the balance of the agreement costs and amend the FY 2023/24 Capital Improvement Plan Budget (CIP 21034 Murrieta Regional Public Safety Training Center) for Phase 2 if the project extends past Phase 1 of the agreement; and Authorize the City Manager to execute the agreement.

PRIOR ACTION/VOTE
None.

CITY COUNCIL GOAL
Provide a high level of innovative public safety.

BACKGROUND
Since the City of Murrieta (City) was incorporated in July of 1991, Murrieta Fire and Rescue (MFR) and Murrieta Police Department (MPD) have utilized makeshift training facilities or traveled outside city limits to conduct needed professional training. For example, MFR currently conducts live fire training in a two-story “tower”constructed of stacked sea cargo containers. (However, the Insurance Services Office requires a four- CITY OF MURRIETA Printed on 11/2/2023Page 1 of 3
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Agenda Item No. 17.
“tower”constructed of stacked sea cargo containers. (However, the Insurance Services Office requires a four- story tower for such training activities.) Similarly, MPD sends officers out of the City to a remote outdoor range for required handgun and long rifle qualifications.

While these makeshift or remote facilities functioned adequately when both departments were smaller, now that MFR and MPD have grown to service a population of approximately 115,000 residents, and with a future buildout population of an estimated 150,000 residents, the existing training facilities and remote locations are no longer adequate.

Therefore, around March of 2023, staff from the City Manager’soffice, MFR, and MPD first met to discuss what would be needed for a dedicated public safety training facility. In May and June of 2023, staff visited other nearby training facilities and worked to prepare a list of program elements (e.g., essential components such as a fire tower, gun range, classroom space) for a training facility.

On June 27, 2023, staff published a Request for Proposals (RFP) for architectural design services. Responses to the RFP were due by August 7, 2023. Six firms submitted proposals by the due date, and three were selected as finalists. On September 18, 2023, RFP evaluators from the City Manager’sOffice, MPD, MFD, and Engineering staff interviewed the three firms, and the interview panel unanimously recommended Ten Over Studio Inc., collaborating with G² Solutions Group, as the most qualified firm for this project. Ten Over Studio Inc. and G² Solutions Group have substantial experience with joint Public Safety Facilities, having successfully completed several similar projects in both California and Texas.

As mentioned above, the Public Safety Training Facility will be designed to serve both MFR and MPD but will also be equipped to function as a Fire Academy if such an opportunity becomes available in the future. In addition, the Training Facility will be able to accommodate interdepartmental training, which is vital to ensure coordinated operations on larger incidents (e.g., wildland or warehouse fires, multi-agency SWAT callouts).

The Training facility will include:
· · Classrooms
· 4-story Fire Tower
· Class A Burn Room
· Vehicle Extrication Area
· Technical Rescue Area
· Residential and Roof Props (for fire training)
· 50 Yard Indoor Firing Range
· Simunition Training
· Defensive Tactics Training
· SWAT Storage Area
· K9 Training Area
· Locker Room and Restrooms
· Fitness Center
The proposed location for the Public Safety Training Facility is on Fig Street, where the Public Works Maintenance Yard is currently located. In anticipation of potential future construction of the Training Facility, staff is currently looking for other suitable sites to relocate the Maintenance Yard.

Phase 1 of the Agreement for Architectural Design Services includes preparation of Schematic Design Drawings for a cost of $300,300. Phase 2 includes preparation of Design Development Drawings, Construction Documents, and Construction Administration for a cost of $2,194,700. The total cost for Architectural Design Services is $2,495,000.

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Agenda Item No. 17.

At the conclusion of Phase 1 (Schematic Design Drawings), the City may determine whether to proceed to Phase 2 or suspend work on the project at its sole discretion, depending on the availability of construction funding.

FISCAL IMPACT
The fiscal impact for Phase 1 of the agreement is as follows:

Amend CIP 21034 (Murrieta Regional Public Safety Training Center) to increase appropriations by $200,300 from the Fire Development Impact Fee (DIF) Fund in job ledger account 21034127-100 for Phase 1 of the agreement. As part of the FY 2023/24 Capital Improvement Plan Budget process, a $100,000 appropriation was established from the State Seized Assets fund in job ledger account 21034402-100. The total fiscal impact for Phase 1 of this agreement is $300,300.

If the project extends to Phase 2 of the agreement, the fiscal impact is as follows:

Amend CIP 21034 (Murrieta Regional Public Safety Training Center) to increase appropriations by $1,619,700 from the DIF Fund in job ledger account 21034127-100.

Appropriate Measure T Operating Reserves to fund the balance of the Agreement Costs and amend CIP 21034 by $575,000 in job ledger account 21034112-100. An Operating Transfer from the Measure T Fund to the General Fund Capital Fund is also necessary for the appropriated amount of $575,000. The total fiscal impact for Phase 2 of this agreement is $2,194,700.

ATTACHMENTS

1. Agreement for Architectural Design Services
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Public Safety Traini ng
Fac
ility Architectural
Services Agreement
Ivan Holler
November 7, 2023
Received After Agenda Printed
11/7/23 Regular Meeting
Item 17 - Staff Presentation
702
2 Public Safet y
Tr
aining Facility
Existing Public Safety Training Facilities
 MFR
 Stacked sea cargo containers for live fire training
 Technical rescue adjacent to containers
 MPD
 Pala range for handgun and long gun quals
 No s imunitions or dedicated defensive tactics locations 703
3 Public Safety
Training Facility
Proposed Public Safety Training Facilities
 MFR
 4-story burn tower
 Technical rescue area
 Residential and Roof props
 MPD
 50-yard indoor firing range
 Indoor simunition training
 SWAT equipment and storage area
704
Fig Street
Public Works Yard 4
705
5 Request for Proposals for Architectural Services
 June 27, 2023
 Six firms submitted proposals
 Three finalists
 Panel unanimously recommended Ten Over Studio + G² Solutions  Total design cost approximately $2,495,000
Public Safety
Training Facility
5 706
6 Recommendation
Award an Agreement for Architectural Design Services for a Public Safety Training Facility to Ten Over Studio
Amend the CIP Budget as described in the Agenda Report
Authorize the use of Measure T Operating Reserve as described in the Agenda Report
Public Safety
Training Facility
6 707

CITY OF MURRIETA
City Council Meeting Agenda
Report
11/7/2023
Agenda Item No.

Subject:

Received After Agenda Printed - Governing Body Announcements CITY OF MURRIETA Printed on 11/14/2023Page 1 of 1
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708
Governing Body Announcements
Murrieta City Council
November 7, 2023
Lisa DeForest, Mayor
1 Received After Agenda Printed
11/7/23 Regular Meeting
Presentation - GBA
709
2 Governing Body Announcements
November 7, 2023
Lisa DeForest, Mayor
EMAIL: [email protected]
Various Dates
Attended Rotary Club Meeting.

Attended the Field of Honor opening ceremony.

Attended State of the 3rd District at Pechanga.

Attended the Inland Empire Riverside Roundtable Discussion on federal advocacy.

Attended Chamber Breakfast, Murrieta Minute.

Met with Planning on proposed projects.

Met with Kristen regarding Higher Education.
710
3 Governing Body Announcements
November 7, 2023
Lisa DeForest, Mayor
EMAIL: [email protected]
Various Dates
Attended Coffee with the city.

Filmed with City of Murrieta for Elementary School Tour.

Met with Ed Sauls on the downtown project update.

Met with Developers about the Sours Project.

Met with staff for an update on Hillside Ordinance.

Met with staff for an update on permitting processes and updates.

Attended Murrieta Temecula Group.
711
4 Governing Body Announcements
November 7, 2023
Lisa DeForest, Mayor
EMAIL: [email protected]
Various Dates
Attended the Murrieta Chamber Networking Breakfast.

Attended Coffee with the City with the Chamber.

Attended Cal Cities Meeting-Mayor Zoom.

Met with several city staff on issues and ideas.

Met with several community members about issues, ideas, questions. 712
5 Governing Body Announcements
November 7, 2023
Lisa DeForest, Mayor
EMAIL: [email protected]
10/28/23 Attended Trunk or Treat at Town Square Park.
713
6 Governing Body Announcements
November 7, 2023
Lisa DeForest, Mayor
EMAIL: [email protected]
11/01/23 Attended the 2nd Annual Evening with the Sheriff at Galloway Downs. 714
7 Governing Body Announcements
November 7, 2023
Lisa DeForest, Mayor
EMAIL: [email protected]
11/02/23 Attended the Cancer Program Announcement Event at Loma Linda University Medical Center—Murrieta.
715
8 Governing Body Announcements
November 7, 2023
Lisa DeForest, Mayor
EMAIL: [email protected]
Various Dates Attended the Field of Honor Veterans Lunch. 716
9 Governing Body Announcements
November 7, 2023
Lisa DeForest, Mayor
EMAIL: [email protected]
Various Dates Attended a Quarterly Meeting with Supervisor Washington and City Manager- French Valley. 717
10 Governing Body Announcements
November 7, 2023
Lisa DeForest, Mayor
EMAIL: [email protected]
Various Dates Attended Downtown Murrieta Farmers Market Night. 718
11 Governing Body Announcements
November 7, 2023
Lisa DeForest, Mayor
EMAIL: [email protected]
Various Dates Attended Socktober Assembly at Oak Meadows Elementary School. 719
12 Governing Body Announcements
November 7, 2023
Lisa DeForest, Mayor
EMAIL: [email protected]
Various Dates Attended Kate Sanchez, Fentanyl Awareness Town Hall at Mesa High School. 720
13 Governing Body Announcements
November 7, 2023
Lisa DeForest, Mayor
EMAIL: [email protected]
11/13/23 Hosting a Let Your Voice be Heard Forum for a Public Four-Year University in our Region. 721
Governing Body Announcements
November 7, 2023
Lisa DeForest, Mayor
If you need to reach me, please feel free to
contact me via email [email protected]
or for faster response call or text me at
(951) 323-8497
14 722
Governing Body Announcements
Murrieta City Council
November 7, 2023
Ron Holliday, Council Member
1 Received After Agenda Printed
11/7/23 Regular Meeting
Presentation - GBA
723
2 Governing Body Announcements
November 7, 2023
Ron Holliday, Council Member
EMAIL: [email protected]
10/18/23 Attended Riverside County's State of the Third District. 10/18/23 Supported the Murrieta Chamber during national support your Chamber Day at the Murrieta Innovation Center.
10/19/23 Attended the Menifee State of the City and birthday party. 10/19/23 Enjoyed the Murrieta Market Nights in Downtown Murrieta. 10/20/23 Supported MilVet at its Salute Fundraiser.
10/21/23 Picked up trash along Murrieta roadways with resident volunteers. 724
3 Governing Body Announcements
November 7, 2023
Ron Holliday, Council Member
EMAIL: [email protected]
10/21/23 Supported the Trauma Intervention Program at their Heroes with Heart Awards dinner. 10/23/23 Visited the businesses that were hiring at the Franchise Expo at the Murrieta Hot Springs Resort.
10/24/23 Shared information at the Coffee with the City. 10/25/23 Celebrated the soon to be open Clinton Keith Extension ribbon cutting. 10/26/23 Met with staff and supporters of the Murrieta Santa Stops. 10/26/23 Attended Canyon Lake's State of the City.
725
4 Governing Body Announcements
November 7, 2023
Ron Holliday, Council Member
EMAIL: [email protected]
10/28/23 Handed out candy at Murrieta's 3rd Trunk or Treat at Town Square Park. 11/01/23 Supported the Riverside Sheriff Charities at the 2nd annual Evening with the Sheriff. 11/02/23 Supported Senator Kelly Seyarto's Veterans Expo at Monteleone Meadows. 11/02/23 Celebrated with VIP Florist on their 20 year anniversary. 11/02/23 Attended the Murrieta Chamber mixer at Gosch Ford. 11/04/23 Honored to celebrate the opening ceremonies of the Murrieta Rotary Field of Honor. 726
5 Governing Body Announcements
November 7, 2023
Ron Holliday, Council Member
EMAIL: [email protected]
11/05/23 Took pictures of all the amazing art displayed at Murrieta Rotary's Al VollbrechtChalk Walk. 727
Governing Body Announcements
Murrieta City Council
November 7, 2023
Jon Levell, Council Member
1 Received After Agenda Printed
11/7/23 Regular Meeting
Presentation - GBA
728
2 Governing Body Announcements
November 7, 2023
Jon Levell, Council Member
EMAIL: [email protected]
10/18/23
Attended and participated as a panel member at the National Alliance on Mental Illness- Southwest Healthcare / Temecula Valley Hospital Roads to Recovery with Care Solace.
729
3 Governing Body Announcements
November 7, 2023
Jon Levell, Council Member
EMAIL: [email protected]
10/25/23 Attended the Ribbon Cutting Ceremony for the Clinton Keith Phase 3- Expansion.
730
4 Governing Body Announcements
November 7, 2023
Jon Levell, Council Member
EMAIL: [email protected]
11/02/23 Attended the Cancer Program Announcement Event at Loma Linda University Medical Center—Murrieta.
731
Governing Body Announcements
Murrieta City Council
November 7, 2023
Lori Stone, Mayor Pro Tem
1 Received After Agenda Printed
11/7/23 Regular Meeting
Presentation - GBA
732
2 Governing Body Announcements
November 7, 2023
Lori Stone, Mayor Pro Tem
EMAIL: [email protected]
Various Dates
Attended Israel candlelight vigil.

Attended State of the 3rd District.

Attended Ben Clark Training Center simulator.

Filmed 2nd grader Youth in Government Day video and a reshoot.

Attended Menifee state of the city.

Attended MilVet fundraiser. 733
3 Governing Body Announcements
November 7, 2023
Lori Stone, Mayor Pro Tem
EMAIL: [email protected]
Various Dates
Participated in the Murrieta cleanup.

Attended Virtual Elected Women Leadership meeting.

Hosted a Medicare symposium at the Colony.

Attended Trunk or Treat.

Attended Virtual Care Solace & Medical professional meeting.

Attended Murrieta VIP florist 20-year anniversary. 734
4 Governing Body Announcements
November 7, 2023
Lori Stone, Mayor Pro Tem
EMAIL: [email protected]
Various Dates
Attended Murrieta Temecula Group breakfast.

Attended Field of Honor opening ceremony.

Attended the flavors of Temecula Valley-Oak Grove.

Attended Citrus & Moss fundraiser.

Attended Field of Honor luncheon.

Attended Sanchez fentanyl meeting. 735
Governing Body Announcements
Murrieta City Council
November 7, 2023
Cindy Warren, Council Member
1 Received After Agenda Printed
11/7/23 Regular Meeting
Presentation - GBA
736
2 Governing Body Announcements
November 7, 2023
Cindy Warren, Council Member
EMAIL: [email protected]
10/18/23 Attended the Murrieta/Wildomar Chamber of Commerce Day Luncheon. 10/18/23 Attended 100 Women Who Care.
737
3 Governing Body Announcements
November 7, 2023
Cindy Warren, Council Member
EMAIL: [email protected]
10/19/23 Attended the City of Menifee State of the City and 15th Birthday Celebration. 738
4 Governing Body Announcements
November 7, 2023
Cindy Warren, Council Member
EMAIL: [email protected]
10/20/23 Attended Milvet Salutes Gala.
10/21/23 Participated in the City of Murrieta Beautification Clean Up Day. 739
5 Governing Body Announcements
November 7, 2023
Cindy Warren, Council Member
EMAIL: [email protected]
10/24/23 Attended Murrieta/Wildomar Chamber Coffee with the City of Murrieta. 10/24/23 Represented the City of Murrieta at the Ribbon Cutting for Clinton Keith Road Phase 3 Extension Project to Winchester.
740
6 Governing Body Announcements
November 7, 2023
Cindy Warren, Council Member
EMAIL: [email protected]
10/25/23 Met with Staff and Mr. Blankenship regarding a proposed development project. 741
7 Governing Body Announcements
November 7, 2023
Cindy Warren, Council Member
EMAIL: [email protected]
10/26/23 Attended Canyon Lake State of the City.
10/27/23 Attended Professional Women’s Roundtable Leadership/Business Expo. 742
8 Governing Body Announcements
November 7, 2023
Cindy Warren, Council Member
EMAIL: [email protected]
10/28/23 Attended The City of Murrieta 3rd Annual Trunk or Treat Community Event. 743
9 Governing Body Announcements
November 7, 2023
Cindy Warren, Council Member
EMAIL: [email protected]
11/01/23 Met with Mr. Stephensen and reviewed progress at his development site on Date / Murrieta Hot Springs Road.
11/01/23 Attended the 2nd Annual Evening with the Sheriff. 11/02/23 Attended the 2023 Veteran’s Expo hosted by Senator Kelly Seyarto. 744
10 Governing Body Announcements
November 7, 2023
Cindy Warren, Council Member
EMAIL: [email protected]
11/02/23 Attended the 20-year Anniversary Celebration for Murrieta VIP Florist. 745
11 Governing Body Announcements
November 7, 2023
Cindy Warren, Council Member
EMAIL: [email protected]
11/04/23 Attended the Opening Ceremony at the 2023 Murrieta Field of Honor. 11/06/23 Attended the Field of Honor Veteran’s Luncheon. 746