CALIFORNIA, STATE OF EMPLOYMENT DEVELOPMENT DEPARTMENT (2)

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SECTION 3 CONSTRUCTION DELIVERY OF PREMISIES• SUBSTANTIAL COMPLETION• PUNCH LIST ITEMS 3.1 Permits. landlord will cause Landlord's Architect and the Engineers to submit the. Approved Working Drawings to the appropriate governmental entities and otherwise apply for all applicable building and other permits and approvals (collectively, "Permits") (if any) necessary or required (in Landlord's good faith: discretion) for the. Contractor to commence, perform and fully complete the construction of the Tenant Improvements. Neither Landlord nor any Landlord Putty shall have any obligation or liability to Tenant if any Perni t (including, without limitation, any building permit, certificate of occupancy, m- equivalent) is not timely or otherwise issued.. 3.2 Landlord's Selection and Retention of the Contractor 3.2.1 Landlord shall submit the Construction Drawings for the Premises on a fixed contract amount (or GMAX) basis to a general contractor selected by Landlord (the "Contractor"), which Contractor shall be independently retained by Landlord (pursuant to such construction contract form as Landlord shall in good faith determine) to construct the Tenant Improvements in accordance with the Construction Drawings. Landlord reserves the right to designate the subcontractor or subcontractors to perform particular trades (or components of) the Tenant Improvements such as fire/life safety, HVAC, structural and electrical work. 3,2.2 Landlord reserves the absolute right, without the need for consultation with or the consent of Tenant, to terminate the Contractor for nonperformance (as determined in good faith by Landlord) and in such case Landlord may select another general contractor to complete the Tenant Improvements. Notwithstanding any provision of this Work Letter to the contrary, Tenant hereby waives all claims against Landlord, and Landlord shall have no responsibility or liability to Tenant, on account of any nonperformance or any misconduct of' my Contractor (or any subcontractor thereof) for any reason, 3.2.3 if the Tenant improvements shall constitute "public works: pursuant to Labor Code §1720.2, the following shall apply: (a) Landlord shall require the Contractor to comply with (and to cause its subcontractors to comply with) prevailing wage requirements and be subject to restrictions and penalties fro accordance with §1770 et seq. of the Labor Code which requires prevailing wages be paid to appropriate work classifications in all bid specifications and subcontracts. (b) Landlord shall require the Contractor to furnish all subcontractors/employees a copy of the Department of Industrial Relations prevailing wage rates which Lessor will post at die job site. For further information on prevailing wage: httT)•/Iwww.dircagov/dlsy/statistiai research.html (c) Landlord shall require the Contractor to comply with (and to cause its subcontractors to comply with) the payroll record keeping and availability requirement of§177b of the Labor Code. (d) Landlod shall require the Contractor to (and to cause its subcontractor to Lessor/contractor to) make travel kind subsistence payments to workers needed for performance of work in uccordance with the Labor Code. (e) Prior to commencement of work, Landlord shall require the Contractor to contact die Division of Apprenticeship Standards and comply with §1777.5, §1777.6, and § 1777.7 of the Labor Code and Applicable Regulations. 3.3 Delivery of Premises; Substmitial Comoletmn Punch List Items. 3.3.1 Delivery of Premises. Landlord shall deliver the Premises to Tenant upon Substantial Completion of die Tennnt bmprovements. Subject to Landlord's obligations under this Work Letter (including Landlord's obligations to perform (or cause to be performed) the Landlord's Work and to construct (or cause to be constructed) the Tenant Improvements in accordance with the Construction Drawings) and to all of Landlord's other express obligations under the Lease (including, under Section 9.1 of the Lease), Landlord shall have no duty cr obligation to improve, or pay for any improvement for, the Premises or any portion thereof and'l'enant shall accept the same in its Tennnt shall accept the Premises in its, then existing condition on the Delivery Date, "AS -IS", "WITH ALL FAULTS". . 3.3.2 Substantial Comi lction. For proposes of this Lease, "Snbstrmtfal Completion" Shull occur upon (and the Promises shall be "Substantially Complete" upon) the substantial completion ofconstruction of the Tenant Improvements pursuant to the Approved Working Drawings, as evidenced by a "signell" on the building permit card by an inspector of the applicable governmental authority, (typically the city in which the Building is located), with din exception of any Punch List Items (defined below) and any tenant fixtures. work -stations, built -fin furniture, or equipment to be installed by Tenant or under the supervision ol'Conlractor. 3.3.3 Punch List Items. Alter the Substantial Completion by Landlord of the Tenant improvements, representatives of Landlord, Tenant and the Contractor shall completely inspect the Premises and complete a list (the "hutch List") of all Punch List Items (defined below). Authorized representatives ofLaindloid. Tenant and the Contractor shall execute said Punch List to indicate theirapproval thereof. Landlord shall cause the Contractor to complete all Punch List Items described on the Porch List as soon as reasonably possible following [lie approval ol'such Punch List. As used herein; "Punch List Items" means all items of construction which entail one. or more details of construction. decoration. mechanical adjustment or installation that do not materially and adversely affect the use and occupancy of any portion ofthe Pierniscs for the normal conduct of Tenant's business. RO/ fPCinic Cerrrer Dr- Oijr nfSantu Ana Lease - 3 Lxhibil.0 t