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THRIVE SANTA ANA, INC. (4)
INSURANCE NOT ON FILE WORK MAY NOT PROCEED CLERK OF COUNCIL DATE DEC 2 8 2022 6--.MA(0) (Q %IvAO CITY OF SANTA ANA GROUND LEASE Community Micro -Farm Project at 1901 West Walnut Street, Santa Ana A-2020-044-01 THIS GROUND LEASE (`Lease") is dated as of December 15, 2022 (`Effective Date), and is entered into by and between the CITY OF SANTA ANA, a California charter city in the County of Orange of the State of California (`Lessor"), and THRIVE Santa Ana, Inc., a 501(c)(3) tax exempt California public benefit corporation (`Tenant') (collectively, the "Parties," and each a "Party"). The Parties enter into this Lease with reference to the following recited facts (collectively, the "Recitals," and each a "Recital'): RECITALS A. Lessor owns that certain real property generally located at 1901 West Walnut Street, Santa Ana, California 92703 (APN 007-332-08), and as more particularly described in the Legal Description attached to this Lease as Exhibit "A" and incorporated herein by reference (`Premises"). B. Tenant proposes to develop a community micro -farm on the Premises. The term "micro -farm" refers to a small space primarily used to cultivate crops in an urban or suburban setting. Additionally, micro -farms are used to teach gardening and farming skills to community members. Tenant will use a comprehensive assessment of community needs to determine the specific use of the Premises, as particularly described in the Project Description attached to this Lease as Exhibit "B" and incorporated herein by reference (`Project'). C. On May 1, 2018, the Parties entered into an Exclusive Negotiation Agreement (No. A-2018-117) to negotiate the potential future development of the Premises, but that original Exclusive Negotiation Agreement expired on its own terms on April 26, 2019. D. On September 17, 2019, the Parties entered into a Second Exclusive Negotiation Agreement (No. N-2019-206) for the purpose of further planning and evaluating the feasibility of the proposed Project. E. The Parties entered into a Disposition and Development Agreement ("DDA") dated March 3, 2020, incorporated herein by this reference, pursuant to which Lessor had agreed to lease the Premises to Tenant upon the fulfillment of certain conditions precedent. F. The proposed Project will result in the redevelopment of underutilized land, development of a community micro -farm for the benefit of local residents, and increased employment opportunities within the City produced by the Project. G. Based on the reasons identified in Recital F, above, together with the commitments and obligations of the Tenant to develop the Premises and operate the Project as contained in the DDA and this Lease, Lessor has determined that the lease of the Premises to the Tenant for Page II development and operation of the Project in accordance with the DDA and this Lease is in the best interest of the Lessor. H. Lessor desires to lease the Premises, and the Tenant desires to enter into a lease of the Premises for the purpose of development and operation of the Project on the Premises on the terms and conditions set forth in the DDA and this Lease. I. Lessor acknowledges that the conditions precedent required by the DDA have been fulfilled and therefore the Parties desire that Tenant shall ground lease the Premises from Lessor on the terms set forth herein. J. Lessor and Tenant have jointly agreed to enter into this Lease as of the date set forth above. NOW, THEREFORE, FOR GOOD AND VALUABLE CONSIDERATION, THE RECEIPT AND SUFFICIENCY OF WHICH THE PARTIES ACKNOWLEDGE, AND PURSUANT TO THE PROMISES AND COVENANTS SET FORTH IN THIS AGREEMENT, THE PARTIES AGREE, AS FOLLOWS: ARTICLE I DEFINITIONS 1.1 Definitions: The following defined terms used in this Lease shall have the meanings set forth below. Other terms are defined in other provisions of this Lease, and shall have the definitions given to such terms in such other provisions. I.I.I. "Affiliate" shall mean, with respect to any person (which as used herein includes an individual, trust or entity), any other person which directly or indirectly through one or more intermediaries controls, or is controlled by, or is under common control with, such person. 1.1.2. "Aggregate Transfer" shall refer to the total "Ownership Interest(s)" in Tenant transferred or assigned in one transaction or a series of related transactions (other than an Excluded Transfer) occurring since the latest of (a) the Effective Date, (b) the execution by Tenant of this Lease, or (c) the most recent Tenant Ownership Change; provided, however, that there shall be no double counting of successive transfers of the same interest in the case of a transaction or series of related transactions involving successive transfers of the same interest. Isolated and unrelated transfers shall not be treated as a series of related transactions for purposes of the definition of "Aggregate Transfer." 1.1.3. "Certificate of Occupancy" shall mean a temporary or final certificate of occupancy (or other equivalent entitlement, however designated) which entitles Tenant to commence normal operation and occupancy of the Improvements. 1.1.4. "City" or "Lessor" shall mean the City of Santa Ana, California, a charter city and municipal corporation. "City Council' shall mean the City Council of the City of Santa Ana. Page 12 1.1.5. "Claims" shall mean liens, claims, demands, suits, judgments, liabilities, damages, fines, losses, penalties, costs and expenses (including without limitation reasonable attorneys' fees and expert witness costs, and costs of suit), and sums reasonably paid in settlement of any of the foregoing. 1.1.6. "Contractor" shall mean Tenant's general contractor for the construction of the Improvements. 1.1.7. "County" shall mean the County of Orange, a political subdivision of the State of California. 1.1.8. "Effective Date" is defined in the introductory paragraph to this Lease, and shall be the date on which Tenant take possession of the Premises and is entitled to commence construction pursuant to Article V, below. 1.1.9. "Event of Default" is defined in Section 11.1. 1.1.10. "Excluded Transfer" shall mean any of the following: (a) A transfer by any direct or indirect partner, shareholder, or member of Tenant (or of a limited partnership, corporation, or limited liability company that is a direct or indirect owner in Tenant's ownership structure) as of the Effective Date or the date on which a Tenant Ownership Change occurred as to the interest transferred, to any other direct or indirect partner, shareholder, or member of Tenant (or of a limited partnership, corporation, or limited liability company that is a direct or indirect owner in Tenant's ownership structure) as of the Effective Date, including in each case to or from a trust for the benefit of the immediate family of any direct or indirect partner or member of Tenant who is an individual; (b) A transfer of an Ownership Interest in Tenant or in constituent entities of Tenant (i) to a member of the immediate family of the transferor (which for purposes of this Lease shall be limited to the transferor's spouse, children, parents, siblings, and grandchildren); (ii) to a trust for the benefit of a member of the immediate family of the transferor; (iii) from such a trust or any trust that is an owner in a constituent entity of Tenant as of the Effective Date, to the settlor or beneficiaries of such trust or to one or more other trusts created by or for the benefit of any of the foregoing persons, whether any such transfer described in this subsection is the result of gift, devise, intestate succession, or operation of law; or (iv) in connection with a pledge by any partners or members of a constituent entity of Tenant to an affiliate of such partner or member; (c) A transfer of a direct or indirect interest resulting from public trading in the stock or securities of an entity, when such entity is a corporation or other entity whose stock and/or securities is/are traded publicly on a national stock exchange or traded in the over-the- counter market and the price for which is regularly quoted in recognized national quotation services; (d) A mere change in the form, method, or status of ownership (including, without limitation, the creation of single -purpose entities) as long as the ultimate beneficial Page13 ownership remains the same as of the Effective Date, or is otherwise excluded in accordance with subsections (a) — (c) above; (e) A transfer to an Affiliated nonprofit public benefit corporation or for - profit corporation, or to a limited partnership whose general partner is a nonprofit corporation, for - profit corporation or limited liability company Affiliated with the Tenant or the Tenant's general partner, subjectto the Lessor's right to approve the agreement to effect such assignment or transfer; (1) The lease, assignment of lease or sublease of any individual residential unit in the Improvements; (g) A transfer of the Tenant's interest in the Premises by foreclosure or deed in lieu of foreclosure to any bona fide third -party lender holding a lien encumbering the Premises (or its nominee); or, (h) Any assignment of the Lease by Tenant to an Affiliate of Tenant or to a Mortgagee as security in which there is no change to the direct and indirect beneficial ownership of the leasehold interest. 1.LI t. "Force Majeure Event" is defined in Article XIV. L L 12. "Hazardous Material(s)" is defined in Section 4.5. 1.1.13. "Improvements" shall mean and includes all buildings (including above- ground and below ground portions thereof, and all foundations and supports), building systems and equipment (such as HVAC, electrical and plumbing equipment), physical structures, fixtures, hardscape, paving, curbs, gutters, sidewalks, fences, landscaping and all other improvements of any type or nature whatsoever now or hereafter made or constructed on the Premises. The term Improvements shall mean the Initial Improvements and any replacement improvements constructed in accordance with the terms of this Lease. During the entire Term, the Improvements will be restricted to the allowed uses. 1.1.14. "Includes" shall mean "includes but is not limited to" and "including" shall mean "including but is not limited to." 1.1.15. "Initial Improvements" shall mean the improvements first constructed by Tenant on the Premises at its sole cost and expense. 1.1.16. "Interest Rate" shall mean the lower of. (a) the reference or prime rate of U.S. Bank National Association, in effect from time to time plus three percent (3%); or (b) the highest rate of interest permissible under the Laws not to exceed the rate of twelve percent (12%) per annum. 1.1.17. "Laws" shall mean all laws, codes, ordinances, statutes, orders and regulations now or hereafter made or issued by any federal, state, county, local or other Page 14 governmental agency or entity that are binding on and applicable to the Premises and Improvements. 1.1.19. "Lease" shall mean this Ground Lease (including any and all addenda, amendments and exhibits hereto), as now or hereafter amended. 1.1.19. "Lender" shall mean: (a) a bank, savings bank, investment bank, savings and loan association, mortgage company, insurance company, trust company, commercial credit corporation, real estate investment trust, pension trust or real estate mortgage investment conduit; or (b) some other type of lender engaged in the business of making commercial loans, provided that such other type of lender has total assets of at least $2,000,000 and capital/statutory surplus or shareholder's equity of at least $500,000,000 (or a substantially similar financial capacity if the foregoing tests are not applicable to such type of lender); or (c) a local, state or federal governmental entity, which provides predevelopment, construction and/or permanent financing for Tenant's development of the Property. 1.1.20. "Lessor's Interest" shall mean all of Lessor's interests in the real property, the Premises, this Lease and its existing interest in the real property, Premises, as well as the Improvements upon the expiration of the Term or earlier termination thereof. 1.1.21. "Lessor Parties" shall mean, collectively and individually, the City and its respective Affiliates, governing boards, agents, employees, members, officers, directors and attorneys. 1.1.22. "Limited Partner" shall mean any limited partner or investor member (and its successors and/or assigns) of Tenant and shall include all references to "investor" in this Ground Lease. 1.1.23. "Ownership Interests" shall mean the share(s) of stock, partnership interests, membership interests, other equity interests or any other direct or indirect ownership interests in Tenant, regardless of the form of ownership and regardless of whether such interests are owned directly or through one or more layers of constituent partnerships, corporations, limited liability companies, or trusts. 1.1.24. "Person" shall include firms, associations, partnerships, joint ventures, trusts, corporations and other legal entities, including public or governmental bodies, agencies or instrumentalities, as well as natural persons. 1.1.25. "Premises" or "Property" shall mean that certain real property containing undeveloped land in the City, together with all easements, rights and privileges appurtenant thereto, to be leased to Tenant pursuant to this Lease and on which Tenant intends to construct the Improvements. The legal description of the Premises is attached hereto as Exhibit A. 1.1.26. "Project" shall mean the Improvements, and all related appurtenances, constructed by Tenant on the Premises. Page15 1.1.27. "Rent" shall mean one dollar and zero cents ($1.00) per month, pursuant to the terns and conditions of this Lease, due and payable from Tenant to Lessor for lease of the Premises to the Tenant for the Project. 1.1.28. "Risk Manager" shall mean the Risk Manager for the City, or designee, or upon written notice to Tenant, such other person as may be designated by the City Council. 1.1.29. "Tenant Ownership Change" shall mean (a) any transfer or assignment by Tenant of the Leasehold Estate or (b) any "Aggregate Transfer" of at least twenty five percent (25%) of the "Ownership Interest(s)" in Tenant, in each case that is not an "Excluded Transfer." 1.1.30. "Term" is defined in Section 2.2. 1.1.31. "Transfer" is defined in Section 10.1. 1.1.32. "Transfer Notice" is defined in Section 10.4. 1.1.33. "Work" shall mean both Tenant's construction activity with respect to the Improvements, including permitted future changes, alterations and renovations thereto and also including, without limiting the generality of the foregoing, site preparation, landscaping, installation of utilities, street construction or improvement and grading or filling in or on the Premises. ARTICLE II LEASE OF PROPERTY 2.1 Lease of Premises. 2.1.1. Lessor hereby leases the Premises to Tenant for the Term, and Tenant hereby leases the Premises from Lessor for the Term, subject to the terms, conditions, covenants, restrictions and reservations of this Lease. 2.1.2. Warranty of Peaceful Possession. Lessor covenants and warrants that, subject to the Tenant's payment of Rent and performance and observation of all of the covenants, obligations and agreements herein contained and provided to Tenant, Tenant shall and may peaceably and quietly have, hold, occupy, use and enjoy the Premises during the Term and may exercise all of its rights hereunder. Except as otherwise set forth herein, the Lessor covenants and agrees that it shall not grant any mortgage or lien on or in respect of its fee interest in the Premises unless the same is expressly subject and subordinate to this Lease. 2.2 Term. The "Term" of this Lease shall commence on the Effective Date of this Lease, and shall expire at 12:00 midnight Pacific Standard Time on the 99t" anniversary of the Effective Date, unless sooner terminated as a result of Tenant's non-compliance with any terms, conditions, covenants, restrictions or reservations of this Lease. Page 16 2.3 Termination at End of Term. This Lease shall terminate without need of further actions of any Party at 12:00 midnight Pacific Standard Time on the last day of the Term. 2.4 Condition of the Premises. TENANT HEREBY ACCEPTS THE PREMISES "AS IS", AND ACKNOWLEDGES THAT THE PREMISES IS IN SATISFACTORY CONDITION. LESSOR MAKES NO WARRANTY, IMPLIED OR OTHERWISE, AS TO THE SUITABILITY OF THE PREMISES FOR TENANT'S PROPOSED USES. LESSOR MAKE NO COVENANTS OR WARRANTIES, IMPLIED OR OTHERWISE, RESPECTING THE CONDITION OF THE SOIL, SUBSOIL, OR ANY OTHER CONDITIONS OF THE PREMISES OR THE PRESENCE OF HAZARDOUS MATERIALS, NOR DOES LESSOR COVENANT OR WARRANT, IMPLIED OR OTHERWISE, AS TO THE SUITABILITY OF THE PREMISES FOR THE PROPOSED DEVELOPMENT, CONSTRUCTION OR USE BY TENANT. LESSOR SHALL NOT BE RESPONSIBLE FOR ANY LAND SUBSIDENCE, SLIPPAGE, SOIL INSTABILITY OR DAMAGE RESULTING THEREFROM. LESSOR SHALL NOT BE REQUIRED OR OBLIGATED TO MAKE ANY CHANGES, ALTERATIONS, ADDITIONS, IMPROVEMENTS OR REPAIRS TO THE PREMISES. TENANT SHALL RELY ON ITS OWN INSPECTION AS TO THE SUITABILITY OF THE PREMISES FOR THE INTENDED USE. TENANT INITIALS:zv- 2.5 Limitations of the Leasehold. This Lease and the rights and privileges granted Tenant in and to the Premises are subject to all covenants, conditions, restrictions, and exceptions of record as of the date hereof or otherwise disclosed to Tenant prior to the date hereof. Nothing contained in this Lease or in any document related hereto shall be construed to imply the conveyance to Tenant of rights in the Premises which exceed those owned by Lessor, or any representation or warranty, either express or implied, relating to the nature or condition of the Premises or Lessor's interest therein. 2.6 Tenant's Investigation. Tenant acknowledges that it is solely responsible for investigating the Premises to determine the suitability thereof for the uses contemplated by Tenant. Tenant further acknowledges by executing this Lease that it has completed its investigation and has made such determinations as Tenant believes may be required under the circumstances. 2.7 Option to Purchase. Lessor grants Tenant the exclusive right to an option to purchase ("Option") the Property herein, for a gross sales price equal to a negotiated fair market value, based on an appraisal to be conducted by the Lessor, throughout the term of this lease, or if the lease is earlier terminated, at that time. Tenant shall notify Lessor in writing, prior to the termination date of the Lease Agreement, of Tenant's intent to exercise the Option. When exercising the Option, Tenant shall also deposit with Lessor the sum of $5,000 as a deposit towards the appraisal, escrow fees and purchase price of the premises. Upon exercise of this Option by Tenant, a closing shall take place within 60-days after City Council approval of a purchase agreement. Before the closing date, Tenant shall provide evidence of financing to purchase the Property. In the event, Tenant's reasonable efforts were unable to procure financing, the deposit shall be retained by the Lessor as liquidated damages. Whether or not the sale of the Property successfully closes, all expenses relating to the sale and to the closing, including, but not limited to, all appraisal and escrow fees, Page 17 shall be borne by Tenant. Notwithstanding the forgoing, the City reserves the right to make a determination as to the validity of this Option, and to exercise this Option, in accordance with all laws and regulations and this Lease prior to authorizing a purchase agreement. This Option to Purchase may only be exercised by the original Tenant, THRIVE Santa Ana, Inc. This option is not assignable and is personal to the Tenant and is not enforceable by Tenant's successors or assigns in interest (whether direct or indirect and whether by purchase, lease, merger, consolidation, liquidation or otherwise). If any financial institution, Tenant's successors or assigns in interest, or other third party acquires the leasehold rights under this Lease from Tenant either through purchase, foreclosure, lease, merger, consolidation, liquidation, sublease or any other means, this Option to Purchase shall be null and void and automatically removed from this Lease. ARTICLE III RENT 3.1 Rent. Throughout the ninety-nine (99) year Term of this Lease, regardless of an earlier termination date, Lessor shall lease the Premises to the Tenant for the Project, and the Tenant shall accept the lease of the Premises from the Lessor, at a Rent of one dollar and zero cents ($1.00) per month, pursuant to the teens and conditions of this Lease. 3.2 Triple Net Rent. It is the intent of the Parties that all Rent shall be absolutely net to Lessor and that, except as otherwise provided herein, Tenant will pay all costs, charges, insurance premiums, taxes, utilities, expenses and assessments of every kind and nature ("Tenant Costs") incurred for, against or in connection with the Premises which arise or become due during the Term as a result of Tenant's use and occupancy of the Premises. Tenant shall pay all Tenant Costs during the Term prior to delinquency. Tenant agrees to indemnify and hold harmless Lessor against any liability, claim, or demand for the late payment or non-payment of any Tenant Costs. Under no circumstances or conditions, whether now existing or hereafter arising, or whether beyond the present contemplation of the Parties, shall Lessor be obligated or required to make any payment of any kind whatsoever or be under any other obligation or liability under this Lease except as expressly provided herein. 3.3 Insufficient Funds. If any payment of Rent or other fees made by check is returned due to insufficient funds or otherwise, Lessor shall have the right to require Tenant to make all subsequent Rent payments by cashier's check, certified check or automated clearing house debit system. All Rent or other fees shall be paid in lawful money of the United States of America, without offset or deduction or prior notice or demand. No payment by Tenant or receipt by Lessor of a lesser amount than the Rent or other fees due shall be deemed to be other than on account of the Rent or other fees due, nor shall any endorsement or statement on any check or any letter accompanying any check or payment as rent be deemed an accord and satisfaction, and Lessor shall accept such check or payment without prejudice to Lessor's right to recover the balance of the Rent or other fees or pursue any other remedy available to the Lessor in this Lease. Page18 ARTICLE IV USE OF PREMISES 4.1 Permitted Use of Premises. Tenant may use the Premises for the construction, development, entitlement, operation, maintenance, replacement and repair of the Improvements as follows: 4.1.1. Required Services and Uses. Tenant intends to use the Property pursuant to the Project Description attached to this Agreement as Exhibit `B". During the pre -development and construction timeframe, the use of the Property shall include special events planned by Tenant, only upon prior approval by the City. After the completion of construction, the certificate of occupancy issued by the City shall govern the allowable uses on the Property, which shall include micro -farm and ancillary secondary uses. Any request by Tenant to change the Project or use of the Property shall be subject to all applicable City review procedures and Approvals. 4.1.2. Ancillary Services and Uses. Subject to the prior written approval of Lessor, which approval may be granted or withheld in the sole discretion of the Lessor, Tenant may provide those additional services and uses which are ancillary to and compatible with the required services and uses set forth in Section 4.1. L, above. 4.1.3. Restricted Use. The services and uses listed in this Section 4.1, both required and optional, shall be the only services and uses permitted. Tenant agrees not to use the Premises for any other purpose or engage in or permit any other activity within or from the Premises unless approved in writing by the Lessor, which approval may be granted or withheld in the sole discretion of the Lessor. 4.1.4. Continuous Use. During the Term, Tenant shall continuously conduct Tenant's business in the Premises in the manner provided under this Lease and shall not discontinue use of the Premises for any period of time except in the case of a Force Majeure Event or as permitted in advance and in writing by the Lessor. 4.1.5. Alcohol Restrictions. The sale or service of alcoholic beverages on the premises shall only be allowed if in compliance with all applicable federal, state, and City statutes, regulations, rules and ordinances, including, but not limited to, appropriate approvals of the California Department of Alcoholic Beverage Control and the Santa Ana Planning and Building Agency.. 4.1.6. Permits and Licenses. Tenant shall be solely responsible to obtain, at its sole cost and expense, any and all permits, licenses or other approvals required for the uses permitted herein and shall maintain such permits, licenses or other approvals for the entire Term. 4.2 Nuisance; Waste. Tenant shall not maintain, commit, or permit the maintenance or commission of any nuisance as now or hereafter defined by any statutory or decisional law applicable to the Premises and Improvements or any part thereof. Tenant shall not commit or allow to be committed any waste in or upon the Premises or Improvements and shall keep the Premises and the Improvements thereon in good condition, repair and appearance. Page 19 4.3 Compliance with Laws. Tenant shall not use or permit the Premises or the Improvements or any portion thereof to be used in any manner or for any purpose that violates any applicable Laws. Tenant shall have the right to contest, in good faith, any such Laws, and to delay compliance with such Laws during the pendency of such contest (so long as there is no material threat to life, health or safety that is not mitigated by Tenant to the satisfaction of the applicable authorities). Lessor may cooperate with Tenant in all reasonable respects in such contest, including joining with Tenant in any such contest if Lessor's joinder is required in order to maintain such contest; provided, however, that any such contest shall be without cost to Lessor, and Tenant shall indemnify, defend (with attorneys acceptable to Lessor), and hold harmless the Lessor from any and all claims, liabilities, losses, damages, or actions of any kind and nature, including reasonable attorneys' fees, arising or related to Tenant's failure to observe or comply with the contested Law during the pendency of the contest. 4.4 Hazardous Materials. 4.4.1. Definition of Hazardous Materials. For purposes of this Lease, the term "Hazardous Material" or "Hazardous Materials" shall mean any hazardous or toxic substance, material, product, byproduct, or waste, which is or shall become regulated by any governmental entity, including, without limitation, the Lessor acting in its governmental capacity, the State of California or the United States government. 4.4.2. Use of Hazardous Materials. Except for those Hazardous Materials which are customarily used in connection with the construction, operation, maintenance and repair of the Improvements or used in connection with any permitted use of the Premises and Improvements under this Lease (which Hazardous Materials shall be used in compliance with all applicable Laws), Tenant or Tenant's employees, agents, independent contractors or invitees (collectively "Tenant Parties") shall not cause or permit any Hazardous Materials to be brought upon, stored, kept, used, generated, released into the environment or disposed of on, under, from or about the Premises (which for purposes of this Section shall include the subsurface soil and ground water). 4.4.3. Tenant Obligations. If the presence of any Hazardous Materials on, under or about the Premises caused or permitted by Tenant or Tenant Parties, and excluding Hazardous Materials existing on the Premises prior to the Effective Date (the "Existing Hazardous Materials"), results in (i) injury to any person, (ii) injury to or contamination of the Premises (or a portion thereof), or (iii) injury to or contamination or any real or personal property wherever situated, Tenant, at its sole cost and expense, shall promptly take all actions necessary or appropriate to return the Premises to the condition existing prior to the introduction of such Hazardous Materials to the Premises and to remedy or repair any such injury or contamination. Without limiting any other rights or remedies of Lessor under this Lease, Tenant shall pay the cost of any cleanup or remedial work performed on, under, or about the Premises as required by this Lease or by applicable Laws in connection with the removal, disposal, neutralization or other treatment of such Hazardous Materials caused or permitted by Tenant or Tenant Parties, excluding any Existing Hazardous Materials. Notwithstanding the foregoing, Tenant shall not take any remedial action in response to the presence, discharge or release, of any Hazardous Materials on, under or about the Premises caused or permitted by Tenant or Tenant Parties, or enter into any settlement agreement, consent decree or other compromise with any governmental or quasi - governmental entity without first obtaining the prior written consent of the Lessor. All work Page 110 performed or caused to be performed by Tenant as provided for above shall be done in good and workmanlike manner and in compliance with plans, specifications, permits and other requirements for such work approved by Lessor. 4.4.4. Indemnification for Hazardous Materials. (a) To the fullest extent permitted by law, Tenant hereby agrees to indemnify, hold harmless, protect and defend (with attorneys acceptable to Lessor) Lessor, its elected officials, officers, employees, agents, independent contractors, and the Premises, from and against any and all liabilities, losses, damages (including, but not limited, damages for the loss or restriction on use of rentable or usable space or any amenity of the Premises or damages arising from any adverse impact on marketing and diminution in the value of the Premises), judgments, fines, demands, claims, recoveries, deficiencies, costs and expenses (including, but not limited to, reasonable attorneys' fees, disbursements and court costs and all other professional or consultant's expenses), whether foreseeable or unforeseeable (collectively, "Liabilities"), arising out of the presence, use, generation, storage, treatment, on or off -site disposal or transportation of Hazardous Materials on, into, from, under or about the Premises by Tenant or Tenant Parties, and excluding all Existing Hazardous Materials. (b) The foregoing indemnity shall also specifically include the cost of any required or necessary repair, restoration, clean-up or detoxification of the Premises and the preparation of any closure or other required plans. (c) The foregoing indemnity and defense obligations of this Lease shall survive its expiration or termination; provided, however, that the indemnity contained in this Section 4.4.4 shall not apply to any Liabilities arising or occurring (a) prior to the Effective Date of this Ground Lease, (b) after the expiration or earlier termination of the Term of this Ground Lease, or (c) as a result of the grossly negligent or wrongful acts or omissions of Lessor. 4.5 Access by Lessor. Lessor reserves the right for its authorized representatives to enter the Premises upon two (2) business days' prior written notice to Tenant, during normal business hours, in order to determine whether Tenant is complying with Tenant's obligations hereunder, or to enforce any rights given to Lessor under this Lease. Lessor and its representatives shall report to the Tenant's on -site office and must be accompanied by a representative of Tenant at all times while on the Property and obey Tenant's rules and regulations. Tenant acknowledges Lessor has the authority to enter the Premises and perform work on the Premises at any time as needed to provide immediate or necessary protection for the general public. Lessor will take all necessary measures not to unreasonably interfere with Tenant's business at the Premises in exercising its rights under this Section. Lessor shall indemnify and hold Tenant harmless from and against any loss, cost, damage or liability, including, without limitation, attorneys' fees, which results from Lessor's willful misconduct or gross negligence, or willful misconduct or gross negligence committed by any party acting under Lessor's authority, of the rights granted by this Section 4.5. Pagel II ARTICLE V CONSTRUCTION OF IMPROVEMENTS 5.1 Construction of Improvements. 5. L I. Initial Improvements. Upon the fulfillment of the Preconditions set forth in Section 5.1.2, below, and payment for and issuance of all permits required under the Laws (whether from Lessor in its governmental capacity, or otherwise), Tenant shall construct the Initial Improvements. 5.1.2. Preconditions. No work for development of the Initial Improvements shall be commenced, and no building or other materials shall be delivered to the Premises, until: (a) Lessor has provided approval in writing that all the conditions set forth in Section 3.1 of the DDA have been satisfied; (b) Tenant has obtained a permit through the City, submitted Project design, conceptual development, plans and special provisions for the construction of Improvements in accordance with the Lessor's criteria, standard and practices; (c) Tenant has given Lessor written notice of the proposed commencement of construction of the Premises or the delivery of construction materials in order to allow Lessor to take all necessary actions under California Civil Code section 3094, including posting of a notice of non -responsibility at the Premises; and (d) Tenant has provided to Lessor evidence that (i) Tenant has entered into a Construction Contract with a Contractor in accordance with Section 5.2 below, (ii) Tenant has secured the construction funding required under Section 5.1.4 below, and (iii) Tenant has provided Lessor with assurances sufficient to construct the Initial Improvements in accordance with Section 5.3 below. 5.1.3. Utilities. To the extent not already constructed, Tenant, at no cost to Lessor, shall construct or cause to be constructed all water, gas, heat, light, power, air conditioning, telephone, broadband internet, and other utilities and related services supplied to and/or used on the Premises at Tenant's sole cost and expense for the purposes of conducting Tenant's operations thereon. All such utilities shall be separately metered from any utilities which may be used by Lessor in conducting its operations, if any, on or about the Premises. Nothing contained in this Section is to be construed or implied to give Tenant the right or permission to install or to permit any utility poles or communication towers to be constructed or installed on the Premises. 5.1.4. Construction Funding. Prior to commencement of construction of the Initial Improvements, Tenant shall provide to Lessor evidence reasonably satisfactory to Lessor of funding available to Tenant that is sufficient to pay for Tenant's estimated total cost of constructing the Initial Improvements, which evidence may consist of (i) a written commitment to Tenant from a Lender selected by Tenant to provide a construction loan to Tenant for the purpose of constructing the Initial Improvements (which may be secured by a Leasehold Mortgage encumbering Tenant's leasehold interest under this Lease), (ii) actual equity funds then held by Page 112 Tenant or irrevocably committed to be paid to Tenant for the purpose of constructing the Initial Improvements, or (iii) any combination of the foregoing. Tenant may from time to time change any of the foregoing funding sources and the allocation thereof, so long as the aggregate available funding continues to be sufficient to pay for Tenant's estimated remaining cost of constructing the Initial Improvements, provided that Tenant shall promptly notify Lessor of any such change. 5.1.5. Compliance with Laws and Permits. Tenant shall cause all Improvements made by Tenant to be constructed in substantial compliance with all applicable Laws, including all applicable grading permits, building permits, and other permits and approvals issued by governmental agencies and bodies having jurisdiction over the construction thereof. No permit, approval, or consent given hereunder by Lessor, in its governmental capacity, shall affect or limit Tenant's obligations hereunder, nor shall any approvals or consents given by Lessor, as a Party to this Lease, be deemed approval as to compliance or conformance with applicable governmental codes, laws, rules, or regulations. 5.1.6. Reports. Not less than monthly from the commencement of construction of the Initial Improvements, Tenant shall provide Lessor with written construction status reports in the form of AIA No. G702 ("Application and Certification for Payment") or comparable form, augmented by oral reports if so requested by Lessor. 5.1.7. Certificate of Occupancy. Tenant shall provide Lessor with a copy of the Certificate of Occupancy promptly following issuance thereof. 5.1.8. Insurance. Tenant shall deliver to Lessor both (i) certificates of insurance evidencing required coverage as specified in Section 8.1, and (ii) evidence of worker's compensation insurance, which provide the requisite insurance levels in accordance with Article VIII, for all persons employed in connection with the construction of any Improvements upon the Premises and with respect to whom death or bodily injury claims could be asserted against Lessor or the Premises. Tenant shall (or shall cause Contractor to) maintain, keep in force and pay all premiums required to maintain and keep in said insurance herein at all times during which construction Work is in progress. 5.1.9. Mechanic's Liens. (a) Payment of Liens. Tenant shall pay or cause to be paid the total cost and expense of all "Work of Improvement," as that phrase is defined in the California Mechanics' Lien law in effect and as amended from time to time. Tenant shall not suffer or permit to be enforced against the Premises or Improvements or any portion thereof, any mechanics', materialmen's, contractors' or subcontractors' liens arising from any work of improvement, however it may arise. Tenant may, however, in good faith and at Tenant's sole cost and expense contest the validity of any such asserted lien, claim, or demand, provided Tenant (or any contractor or subcontractor, as applicable) has furnished the release bond (if required by Lessor or any construction lender) required in California Civil Code section 8000 et seq. (or any comparable statute hereafter enacted for providing a bond freeing the Premises from the effect of such lien claim). In the event a lien or stop -notice is imposed upon the Premises as a result of such construction, repair, alteration, or installation, and provided the lien is not the result of actions of, or work performed by, the Lessor, Tenant shall either: Page 113 (1) Record a valid Release of Lien, or (2) Procure and record a bond in accordance with Section 8424 of the Civil Code, which releases the Premises from the claim of the lien or stop -notice and from any action brought to foreclose the lien, or (3) Post such security as shall be required by Tenant's title insurer to insure over such lien or stop -notice, or (4) Should Tenant fail to accomplish either of the three optional actions above within 30 days after Tenant receives notice of the filing of such a lien or stop -notice, it shall constitute an Event of Default hereunder. (b) Indemnification. Tenant shall at all times indemnify, defend with counsel approved in writing by Lessor and hold Lessor harmless from all claims, losses, demands, damages, cost, expenses, or liability costs for labor or materials in connection with construction, repair, alteration, or installation of structures, improvements, equipment, or facilities within the Premises, and from the cost of defending against such claims, including reasonable attorneys' fees and costs, but excluding any liability resulting from the gross negligence or willful misconduct of Lessor, and excluding any liens resulting from the actions of, or work performed by, the Lessor. (c) Protection Against Liens. Lessor shall have the right to post and maintain on the Premises any notices of non -responsibility provided for under applicable California law. During the course of construction, Tenant shall obtain customary mechanics' lien waivers and releases. Upon completion of the construction of any Improvements, Tenant shall record a notice of completion in accordance with applicable law. Promptly after the Improvements have been completed, Tenant shall (or shall cause Contractor to) record a notice of completion as defined and provided for in California Civil Code section 8000 et seq. (d) Lessor's Rights. If Tenant (or any contractor or subcontractor, as applicable) does not cause to be recorded the bond described in California Civil Code section 8000 el seq. or otherwise protect the Premises and Improvements under any alternative or successor statute, and a fnaljudgment has been rendered against Tenant by a court of competent jurisdiction for the foreclosure of a mechanic's, materialman's, contractor's or subcontractor's lien claim, and if Tenant fails to stay the execution of judgment by lawful means or to pay the judgment, Lessor shall have the right, but not the duty to pay or otherwise discharge, stay or prevent the execution of any suchjudgment or lien or both. Upon any such payment by Lessor, Tenant shall immediately upon receipt of written request therefor by Lessor, reimburse Lessor for all sums paid by Lessor under (his paragraph together with all Lessor's reasonable attorney's fees and costs, plus interest at the Interest Rate from the date of payment until the date of reimbursement. 5.1.10. No Responsibility. Any approvals by Lessor with respect to any Improvements shall not make Lessor responsible for the Improvement with respect to which approval is given or the construction thereof. Tenant shall indemnify, defend and hold Lessor harmless from and against all liability and all claims of liability (including, without limitation, reasonable attorneys' fees and costs) arising during the Term of this Lease for damage or injury to persons or property or for death of persons arising from or in connection with the Improvement or Page 114 construction thereof, but excluding any liability resulting from the gross negligence or willful misconduct of Lessor, and excluding any liens resulting from the actions of, or work performed by, the Lessor. 5.2 Prevailing Wages. 5.2.1 THE TENANT AGREES WITH THE CITY THAT THE TENANT SHALL ASSUME ANY AND ALL RESPONSIBILITY AND BE SOLELY RESPONSIBLE FOR DETERMINING WHETHER OR NOT LABORERS EMPLOYED RELATIVE TO THE CONSTRUCTION OR INSTALLATION OF THE PROJECT MUST BE PAID THE PREVAILING PER DIEM WAGE RATE FOR THEIR LABOR CLASSIFICATION, AS DETERMINED BY THE STATE, PURSUANT TO LABOR CODE SECTIONS 1720, ET SEQ. 5.2.2 THE TENANT, ON BEHALF OF ITSELF, ITS SUCCESSORS, AND ASSIGNS, WAIVES AND RELEASES THE CITY FROM ANY RIGHT OF ACTION THAT MAY BE AVAILABLE TO ANY OF THEM PURSUANT TO LABOR CODE SECTION 1781. THE TENANT ACKNOWLEDGES THE PROTECTIONS OF CIVIL CODE SECTION 1542 RELATIVE TO THE WAIVER AND RELEASE CONTAINED IN THIS SECTION 4.8, WHICH READS AS FOLLOWS: A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT TFIE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEM ENT WITH THE DEBTOR. 5.2.3 BY INITIALING BELOW, THE TENANT KNOWINGLY AND VOLUNTARILY WAIVES THE PROVISIONS OF SECTION 1542 SOLELY IN CONNECTION WITH THE WAIVERS AND RELEASES OF THIS SECTION 4: AU Initials of Authorized Tenant Representative 5.2.4 ADDITIONALLY, THE TENANT SHALL INDEMNIFY, DEFEND AND HOLD HARMLESS THE CITY AGAINST ANY CLAIMS PURSUANT TO LABOR CODE SECTION 1781 ARISING FROM THIS AGREEMENT OR THE CONSTRUCTION OR INSTALLATION OF ALL OR ANY PORTION OF THE PROJECT. 5.3 Tenant's Assurance of Construction Completion. Prior to commencement of construction of the Initial Improvements, or any phase thereof, within the Premises by Tenant, Tenant shall furnish to Lessor evidence that assures Lessor that sufficient monies will be available to complete the proposed construction. The amount of money available shall be at least the total estimated construction cost. Such evidence may take one of the following forms: 5.3.1. Performance bond and labor and materials bond in a principal sum equal to the total estimated construction cost supplied by Contractor or subcontractors - Page 115 5.3.2. Irrevocable letter of credit issued to Lessor from a financial institution. 5.3.3. Cash deposited with the Lessor (may be in the form of cashier's check or money order or may be electronically deposited); 5.3.4. A completion guaranty, in favor of Lessor from an Affiliate of Tenant, in a form reasonably acceptable to Lessor, coupled with a repayment guaranty in favor of the senior construction lender for its loan; 5.3.5. Any combination of the above. All bonds and letters of credit must be issued by a company qualified to do business in the State of California and acceptable to Lessor. All bonds and letters of credit shall be in a form acceptable to Lessor, and Lessor's Risk Manager in their reasonable discretion, and shall insure faithful and full observance and performance by Tenant of all terms, conditions, covenants, and agreements relating to the construction of improvements within the Premises. Tenant shall provide or cause its Contractor to provide payment and/or performance bonds in connection with the construction of the Initial Improvements, and shall name the Lessor as an additional obligee on, with the right to enforce, any such bonds. 5.4 Ownership of Improvements. 5.4.1. For purposes of this Section 5.4, "Term" shall have the meaning stated in Section 2.2. 5.4.2. During Term. Title to all Improvements constructed or placed on the Premises by Tenant and paid for by Tenant are and shall be vested in Tenant during the Term of this Lease, until the expiration or earlier termination thereof. Any and all depreciation, amortization and tax credits for federal or state purposes relating to the Improvements located on the Premises and any and all additions thereto shall be deducted or credited exclusively by Tenant during the Term. The Parties agree for themselves and all persons claiming under them that the Improvements are real property. 5.4.3. Upon Expiration or Earlier Termination of Term. All Improvements on the Premises at the expiration or earlier termination of the Term of this Lease shall, without additional payment to Tenant, then become Lessor's property free and clear of all claims to or against them by Tenant and free and clear of all Leasehold Mortgages and any other liens and claims arising from Tenant's use and occupancy of the Premises, and with taxes paid current as of the expiration or earlier termination date. Tenant shall upon the expiration or earlier termination of the Term deliver possession of the Premises and the Improvements to Lessor in good order, condition and repair consistent with the requirements of this Lease and in compliance with all applicable laws and regulations for the occupancy of the Project, taking into account reasonable wear and tear and the age of the Improvements. 5.5 "AS -BUILT" Plans. Within sixty (60) days following completion of any substantial improvement within the Premises, Tenant shall furnish to Lessor a complete set of reproducibles and two sets of prints of "As -Built" plans and a magnetic tape, disk or other storage device Page 116 containing the "As -Built" plans in a form usable by Lessor, to Lessor's satisfaction, on Lessor's computer aided mapping and design ("CAD") equipment. CAD files are also to be converted to Acrobat Reader (pdf format), which shall be included on the disk or CD ROM. In addition, Tenant shall furnish Lessor copy of the final construction costs for the construction of such improvements. ARTICLE VI REPAIRS, MAINTENANCE, ADDITIONS AND RECONSTRUCTION 6.1 Maintenance by Tenant. Throughout the Term of this Lease, Tenant shall, at Tenant's sole cost and expense, keep and maintain the Premises and any and all Improvements now or hereafter constructed and installed on the Premises in good order, condition and repair (i.e., so that the Premises does not deteriorate more quickly than its age and reasonable wear and tear would otherwise dictate) and in a safe and sanitary condition and in compliance with all applicable Laws in all material respects. Tenant shall immediately notify the Lessor of any damage relating to the Premises. 6.2 Interior Improvements, Additions and Reconstruction of Improvements. Following the completion of construction of the Initial Improvements, Tenant shall have the right from time to time to make any interior improvements to the Improvements that are consistent with the Lessor's approved use of the Premises as reflected in this Lease, without Lessor's prior written consent, but with prior written notice to the Lessor (except in the event of an emergency, in which case no prior written notice shall be required but Tenant shall notify Lessor of any emergency work done as soon as practicable). With prior written approval of Lessor, Tenant may restore and reconstruct the Improvements, and in that process make any modifications otherwise required by changes in Laws, following any damage or destruction thereto (whether or not required to do so under Article VII); and/or to make changes, revisions or improvements to the Improvements for uses consistent with the Lessor approved use of the Premises as reflected in this Lease. Tenant shall perform all work authorized by this Section at its sole cost and expense, including, without limitation, with insurance proceeds approved for such use in accordance with Article VII, if any, and in compliance with all applicable Laws in all material respects. 6.3 All Other Construction, Demolition, Alterations, Improvements and Reconstruction. Following the completion of construction of the Initial Improvements, and except as specified in Sections 6.1 and 6.2, any construction, alterations, additions, major repairs, demolition, improvements or reconstruction of any kind shall require the prior written consent of the Lessor. Tenant shall perform all work authorized by this Section at its sole cost and expense, including, without limitation, with insurance proceeds approved for such use in accordance with Article VII, if any, and in compliance with all applicable Laws in all material respects. 6.4 Requirements of Governmental Agencies. At all times during the Term of this Lease, Tenant, at Tenant's sole cost and expense, shall: (i) make all alterations, improvements, demolitions, additions or repairs to the Premises and/or the Improvements required to be made by any law, ordinance, statute, order or regulation now or hereafter made or issued by any federal, state, county, local or other governmental agency or entity; (ii) observe and comply in all material respects with all Laws now or hereafter made or issued respecting the Premises and/or the Improvements; (iv) indemnify, defend and hold Lessor, the Premises and the Improvements free Page 117 and harmless from any and all liability, loss, damages, fines, penalties, claims and actions resulting from Tenant's failure to comply with and perform the requirements of this Article VI. 6.5 Lessor Obligations. Tenant specifically acknowledges and agrees that Lessor and Lessor Parties do not and shall not have any obligations with respect to the maintenance, alteration, improvement, demolition, replacement, addition or repair of any Improvements. 6.6 Lessor Reservations. Without limiting Lessor's rights with respect to the Premises, Lessor reserves for itself, its successors and assigns those rights necessary to assure proper maintenance and operation of the Premises and to permit any steps to be taken which the Lessor deems necessary or desirable to maintain, repair, improve, modify or reconstruct the Premises. The rights reserved to Lessor in this section or any other section of this Lease shall be exercised by the Lessor at its sole discretion, unless otherwise provided herein. ARTICLE VII DAMAGE AND RESTORATION 7.1 Damage and Restoration. In the event the whole or any part of the Improvements shall be damaged or destroyed by fire or other casualty, damage or action of the elements which is fully covered by insurance required to be carried by Tenant pursuant to this Lease or in fact caused by Tenant, at any time during the Term, Tenant shall with all due diligence, at Tenant's sole cost and expense, repair, restore and rebuild the Improvements on substantially the same plan and design as existed immediately prior to such damage or destruction and to substantially the same condition that existed immediately prior to such damage, with any changes made by Tenant to comply with then applicable Laws and with any upgrades or improvements that Tenant may determine in its reasonable discretion. If Tenant desires to change the use of the Premises following such casualty, then Tenant may make appropriate changes to the Premises to accommodate such changed use after approval of such change of use by the Lessor pursuant to Article IV above. This Article shall not apply to cosmetic damage or alterations. In the event that Tenant shall determine, by notice to the Lessor given by the later of ninety (90) days after the date of the damage or destruction or thirty (30) days after receipt by Tenant of any such insurance proceeds, that there are not adequate proceeds to restore the Improvements and/or the Premises to substantially the same condition in which they existed prior to the occurrence of such damage or destruction, then Tenant may terminate this Lease as of a date that is not less than thirty (30) days after the date of such notice. If Tenant terminates this Lease pursuant to this Section 7.1, Tenant shall surrender possession of the Premises to the Lessor immediately and assign to the Lessor (or, if same has already been received by Tenant, pay to the Lessor) all of its right, title and interest in and to the proceeds from Tenant's insurance upon the Premises. 7.2 Restoration. In the event of any restoration or reconstruction pursuant to this Section, all such work performed by Tenant shall be constructed in a good and workmanlike manner according to and in conformance with the Laws, rules and regulations of all governmental bodies and agencies and the requirements of this Lease applicable to the construction of the Initial Improvements. Page 118 7.3 No Rental Abatement. Tenant shall not be entitled to any abatement, allowance, reduction, or suspension of Rent because part or all of the Improvements become untenantable as a result of the partial or total destruction of the Improvements, and Tenant's obligation to keep and perform all covenants and agreements on its part to be kept and performed hereunder, shall not be decreased or affected in any way by any destruction of or damage to the Improvements; except as otherwise provided herein. 7.4 Application of Insurance Proceeds. If following the occurrence of damage or destruction to the Premises or Improvements, Tenant is obligated to or determines that there are adequate proceeds to restore the Premises and Improvements pursuant to this Article VII, then all proceeds from the insurance required to be maintained by Tenant on the Premises and the Improvements shall be applied to fully restore the same, and, any excess proceeds shall be paid to Tenant and any deficit in necessary finds plus the amount of any deductible shall be paid by Tenant. If Tenant after commencing or causing the commencement of the restoration of Premises and Improvements shall determine that the insurance proceeds are insufficient to pay all costs to fully restore the Improvements, Tenant shall pay the deficiency and shall nevertheless proceed to complete the restoration of Premises and the Improvements and pay the cost thereof. Upon lien free completion of the restoration, any balance of the insurance proceeds remaining over and above the cost of such restoration shall be paid to Tenant. 7.5 Exclusive Remedies. Notwithstanding any destruction or damage to the Premises and/or the Improvements, Tenant shall not be released from any of its obligations under this Lease, except to the extent and upon the conditions expressly stated in this Article VII. Lessor and Tenant hereby expressly waive the provisions of California Civil Code Sections 1932(2) and 1933(4) with respect to any damage or destruction of the Premises and/or the Improvements and agree that their rights shall be exclusively governed by the provisions of this Article VII. ARTICLE VIII INSURANCE AND INDEMNITY 8.1 Insurance. The Tenant, to protect the Lessor against any and all claims and liability for death, injury, loss and damage resulting from the Tenant's actions in connection with this Lease, the Premises and the Project, shall, at the Tenant's sole cost and expense, throughout the term of the Lease of the Premises, maintain the following insurance (or its then reasonably available equivalent), as applicable: (a) Liability Insurance; (b) Property Insurance; (c) Builder's Risk Insurance; and (d) Worker's Compensation Insurance. Additionally, the Tenant, to protect the Lessor, shall cause its contractors and subcontractors, at their sole cost and expense, until issuance of a Certificate of Completion for the Project, to maintain Contractor's Insurance. 8.1.1 Nature of Insurance. All Liability Insurance, Property Insurance, Automobile Liability Insurance and Contractor's Insurance policies this Lease requires shall be issued by carriers that: (a) are listed in the then current `Best's Key Rating Guide—Property/Casualty— United States & Canada" publication (or its equivalent, if such publication ceases to be published) with a minimum financial strength rating of "A" and a minimum financial size category of "VIP; and (b) are admitted to do business in the State of California by the California Department of Insurance. The Tenant may provide any insurance under a "blanket" or "umbrella" insurance Page 119 policy, provided that (i) such policy or a certificate of such policy shall specify the amount(s) of the total insurance allocated to the Premises and the Project, which amount(s) shall equal or exceed the amount(s) required by this Lease and shall not be reduced for claims made for other properties; and (ii) such policy otherwise complies with this Lease. 8.1.2 Policy Requirements and Endorsements. All insurance policies this Lease requires shall contain (by endorsement or otherwise) the following provisions: (a) Insured. Liability Insurance, Automobile Liability Insurance and Contractor's Insurance policies shall name the Lessor as "additional insured." Property Insurance Policies shall name the Lessor as a "loss payee." The coverage afforded to the Lessor shall be at least as broad as that afforded to the Tenant and may not contain any terms, conditions, exclusions, or limitations applicable to the Lessor that do not apply to the Tenant. (b) Primary Coverage. All policies shall be written as primary policies, not contributing to or in excess of any coverage that the Lessor may carry. (c) Contractual Liability. Liability Insurance policies shall contain contractual liability coverage, for the Tenant's indemnity obligations under this Lease. The Tenant's obtaining or failure to obtain such contractual liability coverage shall not relieve the Tenant from nor satisfy any indemnity obligation of the Tenant under this Lease. (d) Deliveries to the Lessor. Prior to the commencement of any Due Diligence Investigations, and no later than twenty (20) days before any insurance required by this Lease expires, is cancelled or its liability limits are reduced or exhausted, the Tenant shall deliver to the Lessor certificates of insurance evidencing the Tenant's maintenance of all insurance this Lease requires. Each insurance carrier shall give the Lessor no less than thirty (30) calendar days' advance written Notice of any cancellation, non -renewal, material change in coverage or available limits of liability under any insurance policy required by this Lease. Also, phrases such as "endeavor to" and "but failure to mail such Notice shall impose no obligation or liability of any kind upon the company" shall not be included in the cancellation wording of any certificates of insurance or any coverage for the Lessor. (e) Waiver of Certain Claims. The Tenant shall attempt in good -faith to cause the insurance carrier for each Liability Insurance, Automobile Liability Insurance and Property Insurance policy to agree to a Waiver of Subrogation, if not already in the policy. To the extent that the Tenant actually obtains insurance with a Waiver of Subrogation, the Parties release each other, and their respective authorized representatives, from any claims for damage to any Person or property that are caused by or result from risks insured against under such insurance policies. (f) No Representation. Neither Party makes any representation that the limits, scope, or forms of insurance coverage this Lease requires are adequate or sufficient. (g) No Claims Made Coverage. None of the insurance coverage required under this Lease may be written on a claims -made basis. Page 120 (h) Fully Paid and Non -Assessable. All insurance obtained and maintained by the Tenant in satisfaction of the requirements of this Lease shall be fully paid for and non -assessable. (i) Lessor Option to Obtain Coverage. During the continuance of an Event of Default arising from the Tenant's failure to carry any insurance required by this Lease, the Lessor may, at its sole option, purchase any such required insurance coverage and the Lessor shall be entitled to immediate payment from the Tenant of any premiums and associated costs paid by the Lessor for such insurance coverage. Any amount becoming due and payable to the Lessor under this Section that is not paid within fifteen (15) calendar days after written demand from the Lessor for payment of such amount, with an explanation of the amounts demanded, will bear interest from the date of the demand at the rate of ten percent (10%) per annum or the maximum rate allowed by California law, whichever is less. Any election by the Lessor to purchase or not to purchase insurance otherwise required by the terms of this Lease to be carried by the Tenant shall not relieve the Tenant of its obligation to obtain and maintain any insurance coverage required by this Lease. (j) Cross -Liability; Severability of Interests. All Liability Insurance and Contractor's Insurance shall be endorsed to provide cross -liability coverage for the Tenant and the Lessor and to provide severability of interests. (k) Deductibles and Self -Insured Retentions. The Tenant shall pay or cause to be paid any and all deductibles and self -insured retentions under all insurance policies issued in satisfaction of the terms of this Lease regarding any claims relating to the Lessor. (1) No Separate Insurance. The Tenant shall not carry separate or additional insurance concurrent in form or contributing in the event of loss with that required under this Lease, unless endorsed in favor of the Lessor, as required by this Lease. (m) Insurance Independent of Indemnification. The insurance requirements of this Lease are independent of the Tenant's indemnification and other obligations under this Lease and shall not be construed or interpreted in any way to satisfy, restrict, limit, or modify the Tenant's indemnification or other obligations or to limit the Tenant's liability under this Lease, whether within, outside, or in excess of such coverage, and regardless of solvency or insolvency of the insurer that issues the coverage; nor shall the provision of such insurance preclude the Lessor from taking such other actions as are available to it under any other provision of this Lease or otherwise at law or in equity 8.2 Indemnification. 8.2.1 Obligations. The Lessor shall Indemnify the Tenant and the Tenant shall Indemnify the Lessor against any wrongful intentional act or negligence of the Indemnitor. The Tenant shall also Indemnify the Lessor against any and all of the following: (a) any Application made at the Tenant's request; (b) any Due Diligence Investigations by the Tenant; (c) use, occupancy, management or operation of the Project; (d) any agreements that the Tenant (or anyone claiming through the Tenant) makes regarding the Project; (e) the condition of the Project or any space under, adjoining or appurtenant to the Premises; and, (I) any accident, injury or damage Page l21 whatsoever caused to any Person in or on the Premises or the Project. Notwithstanding anything to the contrary in this Lease, no Indemnitor shall be required to Indemnify any Indemnitee to the extent of the Indemnitee's wrongful intentional acts or negligence. 8.2.2 Limitation on Liability of the Lessor. Following the execution of the Lease, the Tenant is and shall be responsible for operation of the Premises and the Project, and the Lessor shall not be liable for any injury or damage to any property (of the Tenant or any other Person) or to any Person occurring on or about the Premises or the Project, except to the extent caused by the Lessor's wrongful intentional act or negligence. 8.2.3 Strict Liability. The indemnification obligations of an Indemnitor shall apply regardless of whether liability without fault or strict liability is imposed or sought to be imposed on one or more Indemnitees. 8.2.4 Independent of Insurance Obligations. The Tenant's indemnification obligations under this Lease shall not be construed or interpreted as in any way restricting, limiting, or modifying the Tenant's insurance or other obligations under this Lease and is independent of the Tenant's insurance and other obligations under this Lease. The Tenant's compliance with its insurance obligations and other obligations under this Lease shall not in any way restrict, limit, or modify the Tenant's indemnification obligations under this Lease and are independent of the Tenant's indemnification and other obligations under this Lease. 8.2.5 Survival of Indemnification and Defense Obligations. The indemnity and defense obligations under this Lease shall survive the expiration or earlier termination of this Lease, until all claims against any of the Indemnitees involving any of the indemnified matters are fully, finally, absolutely and completely barred by applicable statutes of limitations. 8.2.6 Independent Duty to Defend. The duty to defend under this Lease is separate and independent of the duty to Indemnify. The duty to defend includes claims for which an Indemnitee may be liable without fault or strictly liable. The duty to defend applies immediately upon notice of a Claim, regardless of whether the issues of negligence, liability, fault, default or other obligation on the part of the Indemnitor or the Indemnitee have been determined. The duty to defend applies immediately, regardless of whether the Indemnitee has paid any amounts or incurred any detriment arising out of or relating (directly or indirectly) to any claims. It is the express intention of the Parties that an Indemnitee be entitled to obtain summary adjudication or summary judgment regarding an Indemnitor's duty to defend the Indemnitee, at any stage of any claim or suit, within the scope of the Indemnitor's indemnity obligations under this Lease. 8.3 Indemnification Procedures. Wherever this Lease requires any Indemnitor to Indemnify any Indemnitee: 8.3.1 Prompt Notice. The Indemnitee shall promptly Notify the Indemnitor of any claim. To the extent, and only to the extent, that the Indemnitee fails to give prompt Notice of a Claim and such failure materially prejudices the Indemnitor in providing indemnity for such claim, the Indemnitor shall be relieved of its indemnity obligations for such claim. 8.3.2 Selection of Counsel. The Indemnitor shall select counsel reasonably acceptable to the Indemnitee. Counsel to Indemnitor's insurance carrier that is providing coverage Page 122 for a claim shall be deemed reasonably satisfactory. Even though the Indemnitor shall defend the action, Indemnitee may, at its option and its own expense, engage separate counsel to advise it regarding the claim and its defense. The Indemnitee's separate counsel may attend all proceedings and meetings. The Indemnitor's counsel shall actively consult with the Indemnitee's separate counsel. The Indemnitor and its counsel shall, however, fully control the defense, except to the extent that the Indemnitee waives its rights to indemnity and defense for such claim. 8.3.3 Coo eration. The Indemnitee shall reasonably cooperate with the Indemnitor's defense of the Indemnitee, provided the Indemnitor reimburses the Indemnitee's actual out of pocket expenses (including Legal Costs) of such cooperation. 8.3.4 Settlement. The Indemnitor may, with the Indemnitee's consent, not to be unreasonably withheld, settle a claim. The Indemnitee's consent shall not be required for any settlement by which all of the following occur: (a) the Indemnitor procures (by payment, settlement, or otherwise) a release of the Indemnitee from the subject claim(s) by which the Indemnitee need not make any payment to the claimant; (b) neither the Indemnitee nor the Indemnitor on behalf of the Indemnitee admits liability; (c) the continued effectiveness of this Lease is not jeopardized in any way; and (d) the Indemnitee's interest in the Project is not jeopardized in any way. 8.3.5 Insurance Proceeds. The Indemnitor's obligations shall be reduced by net insurance proceeds the Indemnitee actually receives for the matter giving rise to indemnification obligation. ARTICLE IX CONDEMNATION 9.1 Definitions. 9.1.1. "Condemnation" means (i) the taking or damaging, including severance damage, by eminent domain or by inverse condemnation or for any public or quasi -public use under any statute, whether by legal proceedings or otherwise, by a Condemnor (hereinafter defined), and (ii) a voluntary sale or transfer to a Condemnor, either under threat of condemnation or while condemnation legal proceedings are pending. 9.1.2. "Date of Taking" means the later of (i) the date actual physical possession is taken by the Condemnor; or (ii) the date on which the right to compensation and damages accrues under the law applicable to the Premises. 9.1.3. "Award" means all compensation, sums or anything of value awarded, paid or received for a Total Taking, a Substantial Taking or a Partial Taking (hereinafter defined), whether pursuant to judgment or by agreement or otherwise. 9.1.4. "Condemnor" means any public or quasi -public authority or private corporation or individual having the power of condemnation. Page 123 9.1.5. "Total Taking" means the taking by Condemnation of all of the Premises and all of the Improvements. 9.1.6. "Substantial Taking" means the taking by Condemnation of so much of the Premises or Improvements or both that one or more of the following conditions results, as reasonably determined by Tenant: (i) The remainder of the Premises would not be economically and feasibly usable by Tenant; and/or (ii) A reasonable amount of reconstruction would not make the Premises and Improvements a practical improvement and reasonably suited for the uses and purposes for which the Premises were being used prior to the Condemnation; and/or (iii) The conduct of Tenant's business on the Premises would be materially and substantially prevented or impaired. 9.1.7. "Partial Taking" means any taking of the Premises or Improvements that is neither a Total Taking nor a Substantial Taking. 9.1.8. "Notice of Intended Condemnation" means any notice or notification on which a reasonably prudent person would rely and which he would interpret as expressing an existing intention of Condemnation as distinguished from a mere preliminary inquiry or proposal. It includes but is not limited to service of a Condemnation summons and complaint on a Party hereto. The notice is considered to have been received when a Party receives from the Condemnor a notice of intent to condemn, in writing, containing a description or map reasonably defining the extent of the Condemnation. 9.2 Notice and Representation. 9.2.1. Notification. The Party receiving a notice of one or more of the kinds specified below shall promptly notify the other Party of the receipt, contents and dates of such notice: (i) a Notice of Intended Condemnation; (ii) service of any legal process relating to the Condemnation of the Premises or Improvements; (iii) any notice in connection with any proceedings or negotiations with respect to such a Condemnation; (iv) any notice of an intent or willingness to make or negotiate a private purchase, sale or transfer in lieu of Condemnation. 9.2.2. Separate Representation. Lessor and Tenant each have the right to represent its respective interest in each Condemnation proceeding or negotiation and to make full proof of its claims. No agreement, settlement, sale or transfer to or with the Condemnor shall be made without the consent of Lessor and Tenant. Lessor and Tenant shall each execute and deliver to the other any instruments that may be required to effectuate or facilitate the provisions of this Lease relating to Condemnation. 9.3 Total or Substantial Taking. 9.3.1. Total Taking. On a Total Taking, this Lease shall terminate on the Date of Taking. 9.3.2. Substantial Taking. If a taking is a Substantial Taking, Tenant may, by notice to Lessor given within ninety (90) days after Tenant receives a Notice of Intended Condemnation, elect to treat the taking as a Total Taking. If Tenant does not so notify Lessor, the taking shall be deemed a Partial Taking. Page 124 9.3.3. Early Delivery of Possession. Tenant may continue to occupy the Premises and Improvements until the Condemnor takes physical possession. At any time following Notice of Intended Condemnation, Tenant may in its sole discretion, elect to relinquish possession of the Premises to Lessor before the actual Taking. The election shall be made by notice declaring the election and agreeing to pay all Rent required under this Lease to the Date of Taking. Tenant's right to apportionment of or compensation from the Award shall then accrue as of the date that the Tenant relinquishes possession. 9.3.4. Apportionment of Award. On a Total Taking all sums, including damages and interest, awarded for the fee or leasehold or both shall be distributed and disbursed as finally determined by the court with jurisdiction over the Condemnation proceedings in accordance with applicable law. Notwithstanding anything herein to the contrary, Tenant shall be entitled to receive compensation for the value of its leasehold estate under this Lease including its fee interest in all Improvements, personal property and trade fixtures located on the Premises, its relocation and removal expenses, its loss of business goodwill and any other items to which Tenant may be entitled under applicable law. 9.4 Partial Taking. 9.4. L Effect on Rent. On a Partial Taking this Lease shall remain in full force and effect covering the remainder of the Premises and Improvements, and Tenant shall not be entitled to any refund of the Rent. 9.4.2. Restoration of Improvements. Promptly after a Partial Taking, Tenant shall repair, alter, modify or reconstruct the Improvements ("Restoring") so as to make them reasonably suitable for Tenant's continued occupancy for the uses and purposes for which the Premises are leased. 9.4.3. Apportionment of Award. On a Partial Taking, Lessor shall be entitled to receive the entire award for such Partial Taking, except that (i) the proceeds of such Partial Taking shall first be applied towards the cost of Restoring the Premises pursuant to Section 9.4.2 and (ii) Tenant shall be entitled to receive any portion of such award allocated to Tenant's interest in any of Tenant's Improvements, Personal property and trade fixtures taken, and any part of the award attributable to the low income housing tax credits. 9.5 Waiver of Termination Rights. Both Parties waive their rights under Section 1265. t 30 of the California Code of Civil Procedure (and any successor provision) and agree that the right to terminate this Lease in the event of Condemnation shall be governed by the provisions of this Article IX. ARTICLE X ASSIGNMENT, SUBLETTING AND ENCUMBERING 10.1 General. Except as provided in Sections 10.3, Tenant shall not mortgage, pledge, hypothecate, encumber, transfer, sublease Tenant's interest in this Lease or assign (including an assignment by operation of law) Tenant's interest in the Premises or Improvements or any part or Page125 portion thereof (hereinafter referred to collectively as "Transfer") without the written consent of the Lessor. Tenant's failure to obtain the Lessor's written consent to a Transfer shall render such Transfer void. Occupancy of the Premises by a prospective transferee, sublessee, or assignee prior to Lessor's written consent of a Transfer shall constitute an Event of Default, except as set forth in Section 10.3, below. 10.1.1. Except as provided in Section 10.3, below, if Tenant hereunder is a corporation, limited liability company, an unincorporated association or partnership, the sale or transfer of any stock or interest in said corporation, company, association and partnership in the aggregate exceeding 25% shall require the written consent of the Lessor, as set forth in Section 10.1, above. 10.1.2. Should Lessor consent to any Transfer, such consent and approval shall not constitute a waiver of any of the terms, conditions, covenants, restrictions or reservations of this Lease nor be construed as Lessor's consent to any further Transfer. Such terms, conditions, covenants, restrictions and reservations shall apply to each and every Transfer hereunder and shall be severally binding upon each and every party thereto. Any document regarding the Transfer of the Premises or any part thereof shall not be inconsistent with the provisions of this Lease and in the event of any such inconsistency, the provisions of this Lease shall control. 10.1.3. This Section shall not be interpreted to prohibit, disallow or require Lessor's consent to space leases (subleases of less than Tenant's entire Lease interest), which are consistent with the approved uses under this Lease. 10.2 Leasehold Mortgage. Under no circumstances may Tenant mortgage, encumber or hypothecate Lessor's Fee Interest. 10.3 Excluded Transfers. Lessor's consent, as set forth in Section 10.1, above, shall not be required for any Excluded Transfer (each party to whom an Excluded Transfer may be made is a "Permitted Transferee"), provided, however, that (1) Tenant shall notify Lessor of such Excluded Transfer at least twenty (20) days prior to the consummation of such Excluded Transfer, and shall provide Lessor with information regarding the transferee evidencing that the Transfer falls within the scope of this Section 10.3 and the definition of Excluded Transfer, and (2) if such Transfer involves an assignment of Tenant's rights under this Lease, Tenant or such transferee shall provide Lessor with a written assumption of Tenant's obligations and liabilities under this Lease executed by such transferee in a form approved by the Lessor; provided, however, that the provisions of this Section 10.3 shall not apply to any Transfer to a Foreclosure Transferee. 10.4 Transfer Procedure. The provisions of this Section 10.4 shall not be applicable to an Excluded Transfer, which shall be governed by Section 10.3, above. If Tenant desires at any time to enter into a Transfer for which Lessor's consent is required hereunder, Tenant shall provide Lessor with written notice ("Transfer Notice") at least ninety (90) days prior to the proposed effective date of the Transfer. The Transfer Notice shall include (i) the name and address of the proposed transferee, (ii) the nature of the Transfer (e.g., whether an assignment, sublease, etc.), (iii) the proposed effective date of the Transfer, (iv) income statements and "fair market" balance sheets of the proposed transferee for the two (2) most recently completed fiscal or calendar years (provided however, if the proposed transferee is a newly formed entity and has not been in Page126 existence for such two (2) year period, the financial statements submitted shall be those of its principals), (v) a detailed description of the proposed transferees qualifications and experience that demonstrates the transferee meets the criteria for a Tenant as established by this Lease, and (vi) a bank or other credit reference. Thereafter, Tenant shall furnish such supplemental information as Lessor may reasonably request concerning the proposed transferee. Lessor shall, no later than ninety (90) days after Lessor's receipt of the information specified above, deliver written notice to Tenant which shall (i) indicate whether Lessor give or withhold consent to the proposed Transfer, and (ii) if Lessor withhold consent to the proposed Transfer, setting forth a detailed explanation of Lessor's grounds for doing so. If Lessor consents to a proposed Transfer, then Tenant may thereafter effectuate such Transfer to the proposed transferee based upon the specific terms of the Lessor's approval and after execution of a consent to assignment by Lessor in a form approved by the Lessor; provided, however, that the provisions of this Section 10.4 shall not apply to any Transfer to a Foreclosure Transferee. 10.5 Liability of Transferors/Transferees For Lease Obligations. In the case of an assignment, each Permitted Transferee and any other assignees or transferees of this Lease shall assume in writing all of Tenant's obligations thereafter arising under this Lease. All assignees or transferees of any interest in this Lease or the Premises or Improvements (whether or not directly liable on this Lease) shall be subject to the terms, conditions, covenants, restrictions and reservations of this Lease. The transferor may be released from all liability under this Lease only if the Permitted Transferee or other transferee agrees in writing to assume all of transferor's obligations and liabilities and provides to Lessor evidence of sufficient and adequate assets, including any required insurance policies, subject to approval by Lessor, which approval shall not be unreasonably withheld, that evidence said Permitted Transferee's or other transferees' financial and otherwise competence to assume transferor's obligations and liability (an "Approved Release"). Except for an Approved Release, for all other Transfers, any transferor of any interest in this Lease or the Premises or Improvements shall remain primarily liable for all obligations hereunder and shall be subject to the terms, conditions, covenants, restrictions and reservations of this Lease. Except for an Approved Release, the Lessor may proceed directly against the transferor in its sole and absolute discretion, with no obligation to exhaust its remedies against the transferee. 10.6 Conditions of Certain Lessor Consent. 10.6.L Lessor may withhold consent to a Transfer (excluding Excluded Transfers which shall not require Lessor consent) at its absolute sole discretion if any of the following conditions exist: (a) An Event of Default exists under this Lease. (b) The prospective transferee has not agreed in writing to keep, perform, and be bound by all the terms conditions, covenants, restrictions and reservations of this Lease. (c) In the case of an assignment, the prospective transferee has not agreed in writing to assume all of transferor's obligations and liabilities. (d) The construction of the Initial Improvements has not been completed. Page 127 (e) Any construction required of Tenant as a condition of this Lease has not been completed. (0 All the material terms, covenants, and conditions of the Transfer that are relevant to the Lessor's approval of the Transfer have not been disclosed in writing to the Lessor. 10.7 Transfer of Mortgages of Lessor's Interest. Notwithstanding anything to the contrary set forth in this Ground Lease, unless required by statute, court order or operation of law, Lessor shall not transfer, assign, pledge or hypothecate its fee interest in the Premises (other than to entities under common control with Lessor or other governmental entities tinder applicable law) without the prior written consent of Tenant. Any and all mortgages or liens placed or suffered by the Lessor encumbering the Lessor's fee interest in the Premises shall be expressly subject and subordinate to this Lease, to all obligations of Lessor hereunder, to all of the rights, titles, interests, and estates of the Tenant created or arising hereunder, to each New Lease and to each Leasehold Mortgage. Furthermore, any Person succeeding to the Lessor's fee interest as a consequence of any conveyance, foreclosure or other transfer shall succeed to all of the obligations of the Lessor hereunder. ARTICLE XI DEFAULT AND REMEDIES 11.1 Event of Default. Each of the following events shall constitute an "Event of Default" by Tenant: 1 t.1.1. Failure to Pay. Tenant's failure or omission to pay any Rent or other sum payable hereunder on or before the date due where such failure shall continue for a period of five (5) days after written notice thereof from Lessor to Tenant; provided, however, that any such notice shall be in lieu of, and not in addition to, any notice required under California Code of Civil Procedure § 1 161 et seq. 11.1.2. Failure to Perform. The failure or inability by Tenant to observe or perform any of its obligations under this Lease (other than those specified in Sections 11.1.1, l 1.1.3, 11.1.6, or l 1.1.8 herein, which have their own notice and cure periods), where such failure shall continue for a period of thirty (30) days after written notice thereof from Lessor to Tenant or past any such longer period as reasonably agreed upon by the Tenant, Lessor in writing as may be necessary for completion of its cure; provided, however, that any such notice by Lessor shall be in lieu of, and not in addition to, any notice required under California Code of Civil Procedure Section 1 I61 el. seq.; provided, further, that if the nature of such failure is such that it can be cured by Tenant but that more than thirty (30) days are reasonably required for its cure (for any reason other than financial inability), then Tenant shall not be deemed to be in default if Tenant shall commence such cure within said thirty (30) days, and thereafter diligently pursues such cure to completion. 11.1.3, Abandonment. The abandonment (as defined in California Civil Code Section 1951.3) or vacation of the Premises by Tenant for a period of thirty (30) days or more. Page 128 11.1.4. Assignments. (a) The making by Tenant of any assignment of its leasehold estate under this Lease without Lessor's consent, as set forth in Article X; (b) A case is commenced by or against Tenant under Chapters 7, 11 or 13 of the Bankruptcy Code, Title 1 I of the United States Code as now in force or hereafter amended and if so commenced against Tenant, the same is not dismissed within ninety (90) days of such commencement; (c) the appointment of a trustee or receiver to take possession of substantially all of Tenant's assets located at the Premises or of Tenant's interest in this Lease, where such seizure is not discharged within sixty (60) days; or (d) Tenant's convening of a meeting of its creditors or any class thereof for the purpose of effecting a moratorium upon or composition of its debts. In the event of any such default, neither this Lease nor any interests of Tenant in and to the Premises shall become an asset in any of such proceedings. 11.1.5. Termination of and Failure to Reinstate Insurance Coverage. Termination of Tenant's insurance coverage and lack of reinstatement within ten (10) business days after notice from Lessor of such termination. 11.1.6. Failure to Provide Evidence of Insurance. Tenant's failure to provide Lessor with a valid and adequate certificate of insurance and endorsements, or binder, at any time during the Term of the Lease, within the time period required under Article VIII. l 1.1.7. Lessor's Consent and Approval of Transfer. Occupancy of the Premises by a prospective transferee, sublessee, or assignee which requires Lessor's consent or approval, before Lessor's written consent and approval of a Transfer is obtained as required in Section 10.1. 11.2 Lessor's Remedies. If an Event of Default occurs, Lessor shall have the following remedies in addition to all rights and remedies provided by law or equity to which Lessor may resort cumulatively or in the alternative: l 1.2.1. Termination of Lease. Lessor shall have the right to terminate this Lease and all rights of Tenant hereunder including Tenant's right to possession of the Premises. In the event that Lessor shall elect to so terminate this Lease then Lessor may recover from Tenant: (a) The worth at the time of award of the unpaid Rent and other charges, which had been earned as of the date of the termination hereof; plus (b) Any other amount necessary to compensate Lessor for all the detriment proximately caused by Tenant's failure to perform its obligations under this Lease or which in the ordinary course of things would be likely to result therefrom, including, but not limited to, the cost of recovering possession of the Premises, expenses of reletting, including necessary repair, renovation and alteration of the Premises, reasonable attorneys' fees, expert witness costs; plus Page 129 (c) Any other amount which Lessor may by law hereafter be permitted to recover from Tenant to compensate Lessor for the detriment caused by Tenant's default as permitted under applicable California law. 11.2.2. Continue Lease in Effect. Lessor may continue this Lease in effect without terminating Tenant's right to possession and to enforce all of Lessor's rights and remedies under this Lease, at law or in equity, including the right to recover the Rent as it becomes due under this Lease; provided, however, that Lessor may at any time thereafter elect to terminate this Lease for the underlying Event(s) of Default by notifying Tenant in writing that Tenant's right to possession of the Premises has been terminated. 11.2.3. Removal of Personal Property Following Termination of Lease. Lessor shall have the right, following a termination of this Lease and Tenant's rights of possession of the Premises under Section 11.2.1 above, to re-enter the Premises and, subject to applicable law, to remove Tenant's personal property from the Premises. Such property may be removed and stored in a public warehouse or elsewhere at the cost of and for the account of Tenant, or disposed of without such storage, in accordance with applicable California law. 11.3 Lessor's Right to Cure Tenant Defaults. If Tenant shall have failed to cure, after expiration of the applicable time for curing, a particular default under this Lease, Lessor may at their election, but is not obligated to, make any payment required of Tenant under this Lease or perform or comply with any term, agreement or condition imposed on Tenant hereunder, and the amount so paid plus the reasonable cost of any such performance or compliance, plus interest on such sum at the Interest Rate from the date of payment, performance or compliance until reimbursed shall be deemed to be payable by Tenant on Lessor's demand. Tenant's failure to reimburse the Lessor within 30 days of Lessor's demand shall constitute an Event of Default under this Lease. No such payment, performance or compliance shall constitute a waiver of default or of any remedy for default, or render Lessor liable for any loss or damage resulting from the same. IL4 Lessor's Default. Lessor shall not be considered to be in default under this Lease unless Tenant has given Lessor written notice specifying the default, and either (i) as to monetary defaults, Lessor have failed to cure the same within ten (10) business days after written notice from Tenant, or (ii) as to nonmonetary defaults, Lessor have failed to cure the same within thirty (30) days after written notice from Tenant, or if the nature of Lessor's nonmonetary default is such that more than thirty (30) days are reasonably required for its cure, then such thirty (30) day period shall be extended automatically so long as Lessor commences a cure within such thirty (30) day period and thereafter diligently pursues such cure to completion. Tenant shall have no right to offset or abate alleged amounts owing by Lessor under this Lease against any amounts owing by Tenant under this Lease. Additionally, Tenant's sole remedy for any monetary default shall be towards the Lessor's interest in the property and not to any other assets. Any and all claims or actions accruing hereunder shall be absolutely barred unless such action is commenced within six (6) months of the event or action giving rise to the default. 11.5 Remedies Cumulative. All rights and remedies of Lessor contained in this Lease shall be construed and held to be cumulative, and no one of them shall be exclusive of the other, and Lessor shall have the right to pursue any one or all of such remedies or any other remedy or relief which may be provided by law, whether or not stated in this Lease. Page I30 11.6 Waiver by Lessor. No delay or omission of Lessor to exercise any right or remedy shall be construed as a waiver of such right or remedy or any default by Tenant hereunder. The acceptance by Lessor of Rent or any other sums hereunder shall not be (a) a waiver of any preceding breach or default by Tenant of any provision thereof, other than the failure of Tenant to pay the particular rent or sum accepted, regardless of Lessor's knowledge of such preceding breach or default at the time of acceptance of such rent or sum, or (b) waiver of Lessor's right to exercise any remedy available to Lessor by virtue of such breach or default. No act or thing done by Lessor's agents during the term of this Lease shall be deemed an acceptance of a surrender of the Premises, and no agreement to accept a surrender shall be valid unless in writing and signed by Lessor. 11.7 Interest. Any installment or Rent due under this Lease or any other sums not paid to Lessor when due (other than interest) shall bear interest at the Interest Rate from the date such payment is due until paid, provided, however, that the payment of such interest shall not excuse or cure the default. 11.8 Conditions Deemed Reasonable. Tenant acknowledges that each of the conditions to a Transfer, and the rights of Lessor set forth in this Article X in the event of a Transfer is a reasonable restriction for the purposes of California Civil Code Section 1951.4. 11.9 Waiver by Tenant. Tenant's waiver of any breach by Lessor of any term, covenant or condition herein contained shall not be deemed to be a waiver of any subsequent breach of the same or any other term, covenant or condition herein contained. 11.10 Tenant Covenants and Agreements. All covenants and agreements to be performed by Tenant under any of the terms of this Lease shall be performed by Tenant at Tenant's sole cost and expenses and without any abatement of Rent. If Tenant shall fail to pay any sum of money, other than Rent required to be paid by it hereunder, or shall fail to perform any other act on its part to be performed hereunder, or to provide any insurance or evidence of insurance to be provided by Tenant within the time period required under this Lease, then in addition to any other remedies provided herein, Lessor may, but shall not be obligated to do so, and without waiving or releasing Tenant from any obligations of Tenant, make any such payment or perform any such act on Tenant's part to be made or performed as provided in this Lease or to provide such insurance. Any payment or performance of any act or the provision of any such insurance by Lessor on Tenant's behalf shall not give rise to any responsibility of Lessor to continue making the same or similar payments or performing the same or similar acts. All costs, expenses, and other sums incurred or paid by Lessor in connection therewith, together with interest at the Interest Rate from the date incurred or paid by Lessor, shall be paid by Tenant within thirty (30) days of receipt of a demand and invoice from Lessor, and Tenant's failure to pay the Lessor, as stated herein, shall constitute an Event of Default under this Lease. ARTICLE XII BOLDING OVER 12.1 If Tenant holds over after the expiration or earlier termination of the Term hereof without the express written consent of Lessor, Tenant shall become a Tenant at sufferance only, at Page131 a monthly rental rate of Ten Thousand Dollars ($10,000) ("Hold Over Rent"), increased annually commencing with commencement of the hold over period by an amount equal to three percent (3%) for each year of the Term. If Tenant fails to surrender the Premises and the Improvements as stated herein, and Lessor shall take legal action to cause Tenant's eviction from the Premises and is successful in such action, Tenant shall be responsible for all costs and expenses, including reasonable attorney's fees and costs, incurred by Lessor in connection with such eviction action; Tenant shall also indemnify and hold Lessor harmless from all loss or liability or reasonable attorney's fees and costs, including any claim made by any succeeding tenant, incurred by Lessor founded on or resulting from such failure to surrender. ARTICLE XIII ESTOPPEL CERTIFICATES 13.1 At any time and from time to time, within ten (10) business days after written request by either Lessor or Tenant (the "requesting party"), the other Party (the "responding party") shall execute, acknowledge and deliver an estoppel certificate addressed to the requesting party, and/or to such other beneficiary (as described below) as the requesting party shall request, certifying (i) that this Lease is in fill force and effect, (ii) that this Lease is unmodified, or, if there have been modifications, identifying the same, (iii) the dates to which Rent has been paid in advance, (iv) that, to the actual knowledge of the responding party, there are no then existing and uncured defaults under the Lease by either Lessor or Tenant, or, if any such defaults are known, identifying the same, and (v) any other factual matters (which shall be limited to the actual knowledge of the responding party) as may be reasonably requested by the requesting party. Such certificate may designate as the beneficiary thereof the requesting party, and/or any third party having a reasonable need for such a certificate (such as, but not limited to, a prospective purchaser, transferee or lender) and any such certificate may be relied upon by the Parties. ARTICLE XIV FORCE MAJEURE 14.1 Unless otherwise specifically provided herein, the period for performance of any nonmonetary obligation by either Party shall be extended by the period of any delay in performance caused by Acts of God, strikes, boycotts, lock -outs, inability to procure materials not related to the price thereof, failure of electric power, riots, civil unrest, acts of terrorism, insurrection, war, declaration of a state or national emergency, weather that could not have reasonably been anticipated, changes in the Laws which would prevent the Premise from being operated in accordance with this Lease, or other reasons beyond the reasonable control of Lessor, Tenant, or their respective agents or representatives (collectively, "Force Majeure Events"). In no event, however, shall Force Majeure Events include the financial inability of a Party to this Lease to pay or perform its obligations hereunder. Further, nothing herein shall extend the time for performance of any monetary obligation owing under this Lease (including Tenant's obligation to pay Rent owing hereunder). Page132 ARTICLE XV RECORDS AND ACCOUNTS 15.1 Financial Statements. Upon request, within one hundred eighty (180) days after the end of each accounting year, Tenant shall at its own expense submit to Lessor a balance sheet and income statement prepared by a Certified Public Accountant ("CPA") who is a member of the American Institute of Certified Public Accountants ("AICPA") and the California Society of CPAs, reflecting business transacted on or from the Premises during the preceding accounting year. The CPA must attest that the balance sheet and income statement submitted are an accurate representation of Tenant's records as reported to the United States of America for income tax purposes. Tenant shall provide Lessor with copies of any of CPA's management letters prepared in conjunction with their audits of Tenant's operations from the Premises. Copies of management letters shall be provided directly to Lessor by the CPA at the same time Tenant's copy is provided to Tenant. In the event that when such financial statements are submitted, the Tenant has a budget for the following accounting year, Tenant, at the same time, shall also provide Lessor with such budget. 15.1.1. Tenant acknowledges its understanding that any and all of the Financial Statements submitted to the Lessor pursuant to this Lease become Public Records and may be subject to public inspection and copying pursuant to §§ 6250 et. seq, of the California Government Code. 15.1.2. AI I Tenant's books of account and records and supporting source documents related to this Lease or to business operations conducted within or from the Premises shall be kept and made available at one location within the limits of the county unless an alternative location is approved in writing by the Lessor. Lessor shall, through its duly authorized agents or representatives, have the right to examine and audit said books of account and records and supporting source documents at any and all reasonable times for the purpose of determining the accuracy thereof in connection with such Sections of this Lease as the Parties mutually and reasonably agree the audit is relevant thereto. 15.2 Reports. In the event that the Tenant commissions, requests or is required to produce any reports related to the physical condition of the Improvements or Premises, Tenant shall submit copies of such reports to Lessor along with the financial statements required above in Section 15.1. ARTICLE XVI OPERATIONAL OBLIGATIONS OF TENANT 16.1 Standards of Operation. 16.1.1. Tenant shall operate the Premises in a manner reasonably comparable to other comparable facilities or businesses within the County of Orange. Tenant shall at all times during the Term provide adequate security measures to reasonably protect persons and property on the Premises. Page l33 16.1.2. The ultimate purpose of this Lease is to permit the construction and operation of a micro -farm, in accordance with Section 4.1.1. Accordingly, Tenant covenants and agrees to operate said Premises fully and continuously to accomplish said purposes and not to abandon or vacate the Premises at any time. 16.1.3. The facilities on the Premises shall be operated during normal business hours, subject to any temporary interruptions in operations or closures due to ordinary maintenance and repair and any Force Majeure Event, defined in Article XIV above. 16.2 Protection of Environment. Tenant shall take all reasonable measures available to: 16.2.1. Avoid any pollution of the atmosphere or littering of land or water caused by or originating in, on, or about Tenant's facilities. 16.2.2. Maintain a reasonable noise level on the Premises so that persons in the general neighborhood will be able to comfortably enjoy the other facilities and amenities in the area. 16.2.3. Prevent the light fixtures of the Premises from emitting light that could negatively affect the operation of cars or airplanes in the area. 16.2.4. Prevent all pollutants from Tenant's operations on the Premises from being discharged, including petroleum products of any nature, except as may be permitted in accordance with any applicable permits or as permitted by applicable Law. Tenant and all of Tenant's agents, employees and contractors shall conduct operations under this Lease so as to ensure that pollutants do not enter the municipal storm drain system (including but not limited to curbs and gutters that are part of the street systems), or directly impact receiving waters (including but not limited to rivers, creeks, streams, estuaries, lakes, harbors, bays and the ocean), except as may be permitted by any applicable permits or as permitted by applicable law. 16.2.5. The Lessor may enter the Premises in accordance with Section 4.5 and/or request Tenant records at any reasonable time to assure that activities conducted on the Premises comply with the requirements of this Section. 16.3 On -Site Manager. Tenant shall employ a competent manager who shall be responsible for the day-to-day operation and level of maintenance, cleanliness, and general order for the Premises. Such person shall be vested with the authority of Tenant with respect to the supervision over the operation and maintenance of the Premises, including the authority to enforce compliance by Tenant's agents, employees, concessionaires, or licensees with the terms and conditions of this Lease and any and all rules and regulations adopted hereunder. Tenant shall notify Lessor in writing of the name of the Manager currently so employed. 16.4 Policies and Procedures to be Established by Tenant. Prior to the completion of construction, Tenant shall submit to Lessor proposed policies and procedures pertinent to the operation of the micro -farm and manner of providing the uses required by this Lease ("Policies and Procedures"). Page134 ARTICLE XVII RESERVED ARTICLE XVIII BEST MANAGEMENT PRACTICES 18.1 Tenant and all of Tenant's, subtenant, agents, employees and contractors shall conduct operations under this Lease so as to assure that pollutants do not enter municipal storm drain systems, in violation of applicable Laws, which systems are comprised of, but are not limited to curbs and gutters that are part of the street systems ("Stormwater Drainage System"), and to ensure that pollutants do not directly impact "Receiving Waters" (as used herein, Receiving Waters include, but are not limited to, rivers, creeks, streams, estuaries, lakes, harbors, bays and oceans). 18.2 The Santa Ana and San Diego Regional Water Quality Control Boards have issued National Pollutant Discharge Elimination System ("NPDES") permits ("Stormwater Permits") to the County of Orange, and to the Orange County Flood Control District ("District") and cities within Orange County, as co-permittees (hereinafter collectively referred to as "NPDES Parties") which regulate the discharge of urban runoff from areas within the County of Orange, including the Premises leased under this Lease. The NPDES Parties have enacted water quality ordinances that prohibit conditions and activities that may result in polluted runoff being discharged into the Stormwater Drainage System. 18.3 To assure compliance with the Stormwater Permits and water quality ordinances, the NPDES Parties have developed a Drainage Area Management Plan ("DAMP") which includes a Local Implementation Plan ("LIP") for each jurisdiction that contains Best Management Practices ("BMPs") that parties using properties within Orange County must adhere to. As used herein, a BMP is defined as a technique, measure, or structural control that is used for a given set of conditions to manage the quantity and improve the quality of stormwater runoff in a cost effective manner. These BMPs are found within the District and/or County's LIP in the form of Model Maintenance Procedures and BMP Fact Sheets (the Model Maintenance Procedures and BMP Fact Sheets contained in the DAMP/LIP shall be referred to hereinafter collectively as "BMP Fact Sheets") and contain pollution prevention and source control techniques to eliminate non- stormwater discharges and minimize the impact of pollutants on stormwater runoff. 18.4 BMP Fact Sheets that apply to uses authorized under this Lease include the BMP Fact Sheets that are attached hereto as Exhibit C. These BMP Fact Sheets may be modified during the term of the Lease; and the Lessor shall provide Tenant with any such modified BMP Fact Sheets. Tenant, its agents, contractors, representatives and employees and all persons authorized by Tenant to conduct activities on the Premises shall, throughout the term of this Lease, comply with the BMP Fact Sheets as they exist now or are modified, and shall comply with all other requirements of the Stormwater Permits, as they exist at the time this Lease commences or as the Stormwater Permits may be modified. Tenant agrees to maintain current copies of the BMP Fact Sheets on Page135 the Premises throughout the term of this Lease. The BMPs applicable to uses authorized under this Lease must be performed as described within all applicable BMP Fact Sheets, 18.5 Tenant may propose alternative BMPs that meet or exceed the pollution prevention performance of the BMP Fact Sheets. Any such alternative BMPs shall be submitted to the Lessor for review and approval prior to implementation. 18.6 Lessor may enter the Premises in accordance with Section 4.5 and/or request Tenant's records at any reasonable time during normal business hours to assure that activities conducted on the Premises comply with the requirements of this Section. ARTICLE XIX GENERAL CONDITIONS & MISCELLANEOUS PROVISIONS 19.1 Signs. Tenant agrees not to construct, maintain, or allow any signs, banners, flags, etc., upon the Premises except (a) as approved in writing in advance by Lessor, which approval may be withheld in the sole and absolute discretion of the Lessor, or (b) required by any of Tenant's lenders, provided that any such signage is in compliance with all applicable Laws. Tenant further agrees not to construct, maintain, or allow billboards or outdoor advertising signs upon the Premises, except as approved in writing by Lessor. 19.2 Nondiscrimination. Tenant agrees not to discriminate against any person or class of persons by reason of sex, age (except as permitted by law), race, color, creed, physical handicap, or national origin in employment practices and in the activities conducted pursuant to this Lease. 19.3 Taxes and Assessments. Pursuant to California Revenue and Taxation Code Section 107.6, Tenant is specifically informed that this Lease may create a possessory interest which is subject to the payment of taxes levied on such interest. It is understood and agreed that all taxes and assessments (including but not limited to said possessory interest tax) which become due and payable upon the Premises or upon fixtures, equipment, or other property installed or constructed thereon, shall be the full responsibility of Tenant, and Tenant shall cause said taxes and assessments to be paid promptly. 19.4 Quitclaim of Interest upon Termination. Upon termination of this Lease for any reason whatsoever in accordance with the terms of the Lease, Tenant shall execute, acknowledge, and deliver to Lessor, within ten (10) business days, a good and sufficient deed, in a form as approved by the Lessor, whereby all right, title, and interest of Tenant in the Premises is quitclaimed back to Lessor ("Quitclaim Deed"). The Quitclaim Deed shall then be recorded by Lessor to remove any cloud on title created by this Lease. In the event that the Tenant fails to provide such Quitclaim Deed within ten (10) additional business days after written demand by Lessor, the Parties agree that the Lessor will be damaged and entitled to compensation for those damages. Such actual damages will, however, be extremely difficult to ascertain. Therefore, if the Tenant does not provide the required Quitclaim Deed after such notice and cure period, in addition to any other remedy provided by law or equity, the Tenant shall pay the Lessor $1,000 per day for every day that passes until a Quitclaim Deed is delivered, which amount shall be Page136 deemed to constitute a reasonable estimate of Lessor's damages and not a penalty. Such amount shall become due and payable by Tenant to Lessor for each calendar day that passes beyond the cure period. Notwithstanding the foregoing, if the Tenant has disputed the termination of the Lease by Lessor, upon a final determination by a court of competent jurisdiction that the Lease has not been terminated, Tenant shall not be subject to payment of the foregoing damages. 19.5 Public Records. Tenant acknowledges that any written information submitted to and/or obtained by Lessor from Tenant or any other person or entity having to do with or related to this Lease and/or the Premises, either pursuant to this Lease or otherwise, is a "public record" open to inspection and copying by the public pursuant to the California Public Records Act (Government Code §6250, et seq.) ("CPRA") as now in force or hereafter amended, or any Law in substitution thereof, or otherwise made available to the public, unless such information is exempt from disclosure pursuant to the applicable sections of CPRA. In the event that a CPRA request is made for any financial statements and records (not including Gross Receipts Statements) and the Lessor determines that the records must be turned over, the Lessor will give Tenant ten (10) days' written notice prior to turning over such records so that Tenant can take any necessary action, including, but not limited to, injunctive relief, to prevent Lessor from turning over such financial statements and records. 19.6 Attorney's Fees. In any action or proceeding brought to enforce or interpret any provision of this Lease, or where any provision hereof is validly asserted as a defense, each Party shall bear its own attorneys' fees and costs. 19.7 Payment Card Compliance. Should Tenant conduct credit/debit card transactions in conjunction with Tenant's business with the Lessor, on behalf of the Lessor, or as part of the business that Tenant conducts on the Premises, Tenant covenants and warrants that it will during the course of such activities be Payment Card Industry Data Security Standard ("PCl/DSS") and Payment Application Data Security Standard ("PA/DSS") compliant and will remain compliant during the entire duration of its conduct of such activities. Tenant agrees to immediately notify Lessor in the event Tenant should ever become non -compliant at a time when compliance is required hereunder, and will take all necessary steps to return to compliance and shall be compliant within ten (10) days of the commencement of any such interruption. Upon demand by Lessor, Tenant shall provide to Lessor written certification of Tenant's PCl/DSS and/or PA/DSS compliance. 19.8 Right to Work and Minimum Wage Laws. 19.8.1. Pursuant to the United States of America Fair Labor Standard Act of 1938, as amended, and State of California Labor Code, Section L178.5, Tenant shall pay no less than the greater of the Federal or California Minimum Wage to all its employees that directly or indirectly service the Premises, in any manner whatsoever. Tenant shall require and verify that all its contractors or other persons servicing the Premises on behalf of the Tenant also pay their employees no less than the greater of the Federal or California Minimum Wage. 19.8.2. Tenant shall comply and verify that its general contractor complies with all other Federal and State of California laws for minimum wage, overtime pay, record keeping, and Page137 child labor standards pursuant to the servicing of the Premises or terms and conditions of this Lease. 19.9 Declaration of Knowledge by Tenant. Tenant warrants that Tenant has carefully examined this Lease and by investigation of the site and of all matters relating to the Lease arrangements has fully informed itself as to all existing conditions and limitations affecting the construction of the Lease improvements and business practices required in the operation and management of the uses contemplated hereunder. 19.10 Governing Law. This Lease shall be governed by and construed in accordance with the laws of the State of California and the City of Santa Ana. 19.11 Venue. The Parties hereto agree that this Lease has been negotiated and executed in the State of California and shall be governed by and construed under the laws of California. In the event of any legal action to enforce or interpret this Lease, the sole and exclusive venue shall be a court of competent jurisdiction located in Orange County, California, and the Parties hereto agree to and do hereby submit to thejurisdiction of such court, notwithstanding Code of Civil Procedure Section 394. Furthermore, the Parties hereto specifically agree to waive any and all rights to request that an action be transferred for trial to another county. 19.12 Headings and Titles. The captions of the Articles or Sections of this Lease are only to assist the Parties in reading this Lease and shall have no effect upon the construction or interpretation of any part hereof. 19.13 Interpretation. Whenever required by the context of this Lease, the singular shall include the plural and the plural shall include the singular. The masculine, feminine and neuter genders shall each include the other. In any provision relating to the conduct, acts or omissions of Tenant, the term "Tenant" shall include Tenant's agents, employees, contractors, invitees, successors or others using the Premises with Tenant's expressed or implied permission. in any provision relating to the conduct, acts or omissions of Lessor, the term "Lessor" shall include Lessor's agents, employees, contractors, invitees, successors or others using the Premises with Lessor's expressed or implied permission. 19.14 Ambiguities. Each Party hereto has reviewed this Lease with legal counsel, and has revised (or requested revisions of) this Lease based on the advice of counsel, and therefore any rules of construction requiring that ambiguities are to be resolved against a particular Party shall not be applicable in the construction and interpretation of this Lease or any exhibits hereto. 19.15 Successors and Assigns. Except as otherwise specifically provided in this Lease, all of the covenants, conditions and provisions of this Lease shall be binding upon and shall inure to the benefit of the Parties hereto and their respective heirs, personal representatives, successors and assigns. 19.16 Time is of the Essence. Time is of the essence with respect to the performance of every provision of this Lease in which time of performance is a factor. 19.17 Severability. If any term or provision of this Lease is held invalid or unenforceable to any extent under any applicable law by a court of competent jurisdiction, the remainder of this Page138 Lease shall not be affected thereby, and each remaining term and provision of this Lease shall be valid and enforceable to the fullest extent permitted by law. 19.18 Integration. This Lease, along with any exhibits, attachments or other documents affixed hereto or referred to herein and related City permits, constitute the entire agreement between Lessor and Tenant relative to the leasing of the Premises. This Lease and such exhibits, attachments and other documents may be amended or revoked only by an instrument in writing signed by Lessor and Tenant. 19.19 Notices, Demands and Communications Between the Parties. 19.19.1 Notices. Any and all Notices submitted by either Party to the other Party pursuant to or as required by this Agreement shall be proper, if in writing and transmitted to the principal office of the Lessor or the Tenant, as applicable, set forth in Section 19.19.2, by one or more of the following methods: (i) messenger for immediate Personal delivery, (ii) a nationally recognized overnight (one-night) delivery service (i.e., Federal Express, United Parcel Service, etc.) or (iii) registered or certified United States Mail, postage prepaid, return receipt requested. Such Notices may be sent in the same manner to such other addresses as either Party may designate from time to time, by Notice. Any Notice shall be deemed to be received by the addressee, regardless of whether or when any return receipt is received by the sender or the date set forth on such return receipt, on the day that it is delivered by personal delivery, on the date of delivery by a nationally recognized overnight courier service (or when delivery has been attempted twice, as evidenced by the written report of the courier service) or four (4) calendar days after it is deposited with the United States Postal Service for delivery, as provided in this Section 19.19. L Rejection, other refusal to accept or the inability to deliver a Notice because of a changed address of which no Notice was given or other action by a Person to whom Notice is sent, shall be deemed receipt of the Notice. 19.19.2 Addresses. The following are the authorized addresses for the submission of Notices to the Parties, as of the Effective Date: To the Tenant: THRIVE Santa Ana, Inc. P.O. Box 1935 Santa Ana, CA 92702 UCI School of Law Community Economic Development Clinic P.O. Box 5479 Irvine, CA 92616-5479 Public Law Center c/o Housing and Homelessness Prevention Unit 601 Civic Center Drive West Santa Ana, CA 92701 Page139 To the Lessor: City of Santa Ana Community Development Agency 20 Civic Center Plaza (M-25) P.O. Box 1988 Santa Ana, CA 92702 With courtesy copy to City of Santa Ana City Attorney's Office 20 Civic Center Plaza (M-29) P.O. Box 1988 Santa Ana, CA 92702 19.20 Dispositions of Abandoned Property. If Tenant abandons or quits the Premises or is dispossessed thereof by process of law or otherwise, title to any personal property belonging to and left on the Premises thirty (30) days after such event shall, at Lessor's option, be deemed to have been transferred to Lessor. Lessor shall have the right to remove and to dispose of such property at Tenant's cost, including the cost of labor, materials, equipment and an administrative fee equal to fifteen percent (15%) of the sum of such costs without liability therefor to Tenant or to any person claiming under Tenant, and shall have no need to account therefor. At Lessor's option, Lessor may provide Tenant with an invoice for such costs, which invoice Tenant agrees to pay within fifteen (15) days of receipt. 19.21 No Partnership. This Lease shall not be construed to constitute any form of partnership orjoint venture between Lessor and Tenant. Lessor and Tenant mutually acknowledge that no business or financial relationship exists between them other than as Lessor and Tenant, and that Lessor is not responsible in any way for the debts of Tenant or any other Party. 19.22 Authorization. Lessor and Tenant (each, a "signing party") each represents and warrants to the other that the person or persons signing this Lease on behalf of the signing party has full authority to do so and that this Lease binds the signing party. Concurrently with the execution of this Lease, the Tenant shall deliver to the Lessor a certified copy of a resolution of the signing party's board of directors or other governing board authorizing the execution of this Lease by the signing party. 19.23 Recording. This Lease itself shall not be recorded, but in the event that the Tenant encumbers the leasehold as set forth in a memorandum hereof may be recorded in the form of Exhibit D attached hereto ("Memorandum"). The Memorandum may be executed concurrently with this Lease and thereafter recorded in the Official Records of the County Recorder on the Effective Date of this Lease has occurred. Tenant shall be responsible for the payment of all charges imposed in connection with the recordation of the Memorandum, including, without limitation, any documentary transfer tax imposed in connection with this transaction and all recording fees and charges. Page 140 19.24 Exhibits. This Lease contains the following exhibits, schedules and addenda, each of which is attached to this Lease and incorporated herein in its entirety by this reference: Exhibit A: Legal Description of the Premises Exhibit B: Project Description Exhibit C: Best Management Practices Fact Sheets Exhibit D: Form of Memorandum of Lease 19.25 Consent/Duty to Act Reasonably. Except as otherwise expressly provided herein, whenever this Lease grants Lessor and/or Tenant the right to take any action, grant any approval or consent, or exercise any discretion, Lessor and/or Tenant shall act reasonably and in good faith and take no action which might result in the frustration of the other Party's reasonable expectations concerning the benefits to be enjoyed under this Lease. 19.26 Counterparts. For the convenience of the Parties to this Lease, this Lease may be executed in several original counterparts, each of which shall together constitute but one and the same agreement. Original executed pages may be assembled together into one fully executed document. 19.27. No Merger. The interests created by this Lease shall not be extinguished by merger of any or all of the ownership interests the Premises or the Improvements in one person or entity. (Signatures on following page) Page 141 A-2020-044-01 IN WITNESS WHEREOF, the Parties have executed this Ground Lease on the dates indicated next to each of the signatures of their authorized representatives, as appear below: ATTEST: Clerk of the Council APPROVED AS TO FORM: SONIA R. CARVALHO City Attorney r' ` Jose Montoya Assistant City Attorney RECOMMENDED FOR APPROVAL: /, / MICHAEL L. GARCIA Executive Director Community Development Agency CITY OF SANTA ANA KRISTINE RIDGE City Manager TENANT By: Ana 5 Uava (Dec 22, 202215:16 PST) ANA URZUA Board President, THRIVE Santa Ana, Inc. Page142 EXHIBIT "A" TO GROUND LEASE PROPERTY LEGAL DESCRIPTION 1901 West Walnut Street ("Property") is situated in the State of California, County of Orange, and the City of Santa Ana. The Property has a lot size of 16,558 square feet (.38 acre) as shown on a Map recorded as parcel 8 in Book 7 on page 332 of Assessor Parcel Maps of Orange County, California. The Property is bounded on its easterly edge by South Daisy Avenue and its southern edge by West Walnut Street. The following is the Property Legal Description: P BK 54 PG 50 PAR 3 Page 143 EXHIBIT `B" TO GROUND LEASE PROJECT DESCRIPTION Tenant proposes a micro -farm use for the Premises. Operation of a community micro - farm and related activities, including, but not limited to, production and distribution of fresh vegetables, flowers, other ornamentals, and fruit, also hosting weekly open-air markets and community activities that promote health. The site will include raised garden beds, a work area, produce puck -up counter, and lunch tables. An on -site parking lot will be used on weekends as an open-air market area. The micro -farm will host community workshops and events in line with the mission of THRIVE Santa Ana. Page144 EXHIBIT "C" TO GROUND LEASE BEST MANAGEMENT PRACTICES ("BMPs" Fact Sheets) Best Management Practices can be found at: http://www.ocwatersheds.com/documents/bmp which website may change from time to time. BMPs apply to the TENANT's defined Premises and BMPs also apply to the TENANT's Contractor therefore TENANT shall cause Contractor to be responsible for implementing and complying with all BMP Fact Sheet requirements that apply to construction activity with respect to the Improvements, and also including, without limiting the generality of the foregoing, site preparation, landscaping, installation of utilities, street construction or improvement and grading or filling in or on the Premises. TENANT is to be aware that the BMP clause within this Lease, along with all related BMP Exhibits, may be revised, and may incorporate more than what is initially being presented in this Lease. Suggested BMPs Fact Sheets may include, but may not be limited to, the following list shown below and can be found at: http://www.ocwatersheds.com/documents/bmp/industrialcommercialbusinessesactivities (which website may change from time to time): IC3 Building Maintenance IC4 Carpet Cleaning IC6 Contaminated or Erodible Surface Areas IC7 Landscape Maintenance IC9 Outdoor Drainage from Indoor Areas IC10 Outdoor Loading/Unloading of Materials IC 12 Outdoor Storage of Raw Materials, Products, and Containers IC14 Painting, Finishing, and Coatings of Vehicles, Boats, Buildings, and Equipment IC15 Parking & Storage Area Maintenance IC17 Spill Prevention and Cleanup IC21 Waste Handling and Disposal IC22 Eating and Drinking Establishments IC23 Fire Sprinkler Testing/Maintenance IC24 Wastewater Disposal Guidelines Page145 EXHIBIT "D" TO GROUND LEASE FORM OF MEMORANDUM OF LEASE MEMORANDUM OF LEASE This is a Memorandum of Lease ("Memorandum") made and entered into as of this 15th day of December, 2022, by and between the CITY OF SANTA ANA, a California charter city in the County of Orange of the State of California (`Lessor"), and THRIVE Santa Ana, Inc., a 501(c)(3) tax exempt California public benefit corporation (`Tenant'), upon the following terms: 1. Lease. The provisions set forth in a written lease between the parties hereto dated December 15, 2022 (`Lease"), are hereby incorporated by reference into this Memorandum. 2. Subject Premises. The Premises which are the subject of the Lease are more particularly described as on Exhibit A, attached hereto 3. Effective Date of Lease. The Lease shall be deemed to have commenced on December 15, 2022 (the "Effective Date") as set forth within the terms of the Lease. 4. Term. The Term of the Lease shall be Ninety -Nine (99) years from the Effective Date as stated in the written Lease. 5. Duplicate Copies of the originals of the Lease are in the possession of the Lessor and Tenant and reference should be made thereto for a more detailed description thereof and for resolution of any questions pertaining thereto. The addresses for Lessor and Tenant are as follows: To the Tenant: THRIVE Santa Ana, Inc. P.O. Box 1935 Santa Ana, CA 92702 UCI School of Law Community Economic Development Clinic P.O. Box 5479 Irvine, CA 92616-5479 Public Law Center c/o Housing and Homelessness Prevention Unit 601 Civic Center Drive West Santa Ana, CA 92701 Page146 To the Lessor: City of Santa Ana Community Development Agency 20 Civic Center Plaza (M-25) P.O. Box 1988 Santa Ana, CA 92702 With courtesy copy to City of Santa Ana City Attorney's Office 20 Civic Center Plaza (M-29) P.O. Box 1988 Santa Ana, CA 92702 6. Purpose. It is expressly understood and agreed by all Parties that the sole purpose of this Memorandum is to give record notice of the Lease; it being distinctly understood and agreed that said Lease constitutes the entire lease and agreement between Lessor and Tenant with respect to the Premises and is hereby incorporated by reference. The Lease contains and sets forth additional rights, terms, conditions, duties, and obligations not enumerated within this instrument which govern the Lease. This Memorandum is for informational purposes only and nothing contained herein may be deemed in any way to modify or vary any of the terms or conditions of the Lease. In the event of any inconsistency between the terms of the Lease and this instrument, the terms of the Lease shall control. The rights and obligations set forth herein shall be binding upon and inure to the benefit of the Parties hereto and their respective heirs, representatives, successors, and assigns. (Signatures on folloWng page) Page 147 IN WITNESS WHEREOF, the Parties hereto have executed this Memorandum pursuant to due authorization on the dates herein acknowledged. ATTEST: Clerk of the Council APPROVED AS TO FORM: SONIA R. CARVALHO City Attorney '+` Jose Montoya Assistant City Attorney RECOMMENDED FOR APPROVAL: MICHAEL L. GARCIA Executive Director Community Development Agency CITY OF SANTA ANA KRISTINE RIDGE City Manager TENANT �_V ciU�Ll� By. Ana S Urzua(Dec 22, 20276:16 P5T) Ana Urzua Board President, THRIVE Santa Ana, Inc. Page148 THRIVE - Ground Lease - 1901 W Walnut Final Audit Report 2022-12-22 Created: 2022-12-22 By: Peda Zuniga (pzuniga@santa-ana.org) Status: Signed Transaction ID: CBJCHBCAABAA3DFGfoYOviQA2BOWGvaCvYoHc5CotGtz "THRIVE - Ground Lease - 1901 W Walnut" History Document created by Perla Zuniga (pzuniga@santa-ana.org) 2022-12-22 - 10:50:06 PM GMT- IP address: 98.153.69.210 Cy Document emailed to ana.urzua@cooperacionsantaana.org for signature 2022-12-22- 10,52:06 PM GMT Email viewed by ana.urzua@cooperacionsantaana.org 2022-12-22 - 10:52:08 PM GMT- IP address: 72.14.199.25 &0 Signer ana.urzua@cooperacionsantaana.org entered name at signing as Ana S Urzua 2022-12-22 - 11:16:11 PM GMT- IP address: 162.204.120.185 d© Document e-signed by Ana S Urzua (ana.urzua@cooperacionsantaana.org) Signature Date: 2022-12-22 - 11:16:13 PM GMT - Time Source: server- IP address: 162.204.120.185 'y Document emailed to Mike Garcia (mgarcial5@santa-ana.org) for signature 2022-12-22- 11:16:14 PM GMT Email viewed by Mike Garcia (mgarcial5@santa-ana.org) 2022-12-22 - 11:29:13 PM GMT- IP address: 98.153.69.210 6© Document e-signed by Mike Garcia (mgarcial5@santa-ana.org) Signature Date: 2022-12-22 - 11:29:31 PM GMT - Time Source: server- IP address: 98.153.69.210 Agreement completed. 2022-12-22 - 11:29:31 PM GMT Q Adobe Acrobat Sign Vazquez, Sylvia From: RMD Sent: Tuesday, December 27, 2022 10:14 AM To: Vazquez, Sylvia Subject: RE: Request for COI Review: THRIVE Santa Ana Inc. Hello Sylvia, Insurance is not required for this agreement. Thank You, Risk Management Division City of Santa Ana - Human Resources - Risk Management Division 20 Civic Center Plaza I Santa Ana, CA 92701 Office: 714-647-5470 Email: rmd(a)santa-ana.org 1 www.santa-ana.org City Hall hours are 7:30 am to 5:30 pm, Monday through Thursday and 8:00 am to 5:00 pm every other Friday. Click here fora list of observed holidays and Friday closure dates. From: Vazquez, Sylvia <SVazquez@santa-ana.org> Sent: Thursday, December 22, 2022 10:58 AM To: RMD <rmd@santa-ana.org> Subject: Request for COI Review: THRIVE Santa Ana Inc. Request Type (check only one): ®Standard COI Review— Risk Management will review and approve insurance documents submitted. This applies to PO, Event, Reservations, Permit and Agreements. ❑New Contractor or New Agreement— Risk Management will request insurance documents from Contractor/Insured Contact in accordance with agreement. All fields required to advance the process — do not delete or modify. City Contact Department: CDA Project Manager Name: Sylvia Vazquez Project Manager Email: svazquez(d)santa-ana.og Contractor/Insured Contact Business Name: THRIVE Santa Ana Agreement Number and Agreement Link: Ground Lease Attached - DDA attached Vendor Contact Name: Luis Sarmlento Vendor Contact Phone: thrivesantaana(a)gmail.com Vendor Email Address: 714-425-5562 Insurance Contact (may be found at top right of ACORD form) Contact Name: Christine R Sousa Contact Phone: (626)339-9921 Contact Email Address: christine(Dbakerromero.com Thank you, Sylvia Vazquez ) Economic Development Specialist II Community Development Agency 120 Civic Center Plaza 1 Santa Ana, CA 92701 714-647-5445 1 svazquez@santa-ana.ors �__h� � The mySantaAna mobile app puts the power of the Santa Ana city government in the palm of your hand! The free app allows residents to quickly and easily report issues to the City, access City services, and find news and events. X. .-. a' Download on the S App Store Vazquez, Sylvia I-C rC' From: Vazquez, Sylvia su'1 b VA Lit, Sent: Tuesday, December 13, 2022 3:32 PM To: RMD Subject: Request for COI Review: THRIVE Santa Ana Attachments: Cert of Ins - City of Santa Ana.PDF; CERTIFICATE OF PROPERTY INSURANCE (201603).PDF; 2.19.2020 THRIVE - Ground Lease - 1901 W Walnut - FINAL DEC 2022.pdf; A-2020-044 - DDA THRIVE 061820.pdf NOTE: Please read the directions carefully as our template has changed as of 0710112022. Directions for submitting COI Review: 1. Subject line must be completed as follows: Request for COI Review: Contractor/Insured Name Please Note: a. Only one Vendor per submission b. Only one Agreement per submission 2. Complete email template and attach COI documents including endorsement(s). 3. You will receive an auto reply confirming receipt of request. 4. COI documents will be entered into CTrax for compliance review. 5. Risk Management will monitor the progress of compliance and notify sender upon approval. 6. If you have questions, please call Risk Management at x5470. Request for COI Review: All fields required to advance the review process. City Contact Department: CDA Project Manager Name: Sylvia Vazquez Project Manager Email: svaz uez santa-ana.or Contractor/insured Contact Business Name: THRIVE Santa Ana Agreement Number and Agreement Link: Ground Lease Attached - DDA attached Vendor Contact Name: Luis Sarmiento Vendor Email Address: thrivesantaana@gmail.com Vendor Contact Phone: 714-425-5562 Insurance Contact (may be found at top right of ACORD form) Contact Name: Christine R Sousa Contact Phone: 626 339-9921 Contact Email Address: christine@bakerromero.com Project is still in development phase. The project will break ground in January. Are both Builders Risk and Property required, or is it Builders Risk during construction and Property when construction complete? The following are the definitions in the DDA for the types of insurance: 2.1.5 "13uilder's Risk Insurance" means "All Risk" builder's risk insurance on a completed value (non -reporting) basis, in as amount sufficient to prevent coinsurance, but in any event not less than 100% of replacement value, including cost of debris removal, but excluding foundation and excavations, naming the City and the Developer, as their interests may appear. Such insurance shall also: (a) contain a waiver of subrogation against subcontractors; (b) state that "permission is granted to complete and occupy'; (c) cover, for replacement value, all materials and equipment on or about any offsite storage location intended for use for the Project; and (d) provide for a deductible not exceeding Ten Thousand Dollars ($10,000). 2.1,50 "' o erty Insurance" means insurance providing coverage rot the Project and the Property, against loss, damage, or destruction by fire and other hazards encompassed under the broadest form ofproperty insurance coverage then customarily used for like properties in the County (except earthquake or war risk) from time to time, in an amount equal to one hundred percent (100%) of the Full Replacement Value (without deduction for depreciation) of the Project (excluding excavations and foundations) and in any event sufficient to avoid co-insurance, with "ordinanco or law" coverage. Such insurance may contain a deductible clause not exceeding Five Thousand Dollars ($5,000) multiplied by the then current CPI Adjustment Factor. To the extent customary for like properties in the County at the time, such Insurance shall include coverage for explosion of stoom and pressure, boilers and similar apparatus loeated on the Property; coverage for terrorism; coverage against damage or loss by flood, if the Property is locatixt in an area in which flood insurance is available under the National Flood Insurance Act of 1968 or the Flood Disaster Protection Act of 1973, as such laws may be amended, modified or replaced from time to time; an "increased cost of construotion" endorsement; and an endorsement covering demolition and cost of debris removal. Vazquez, Sylvia From: Vazquez, Sylvia Sent: Thursday, December 22, 2022 10:58 AM To: RM D Subject: Request for COI Review: THRIVE Santa Ana Inc. Attachments: Cert of Ins - City of Santa Ana.PDF; A-2020-044 - DDA THRIVE 061820.pdf; Thrive Bldrs Risk Policy.pdf; 20221214_ADDITIONAL INSURED -STATE OR GOVERNMENTAL AGENCY OR SUBDIVISION OR POLITICAL SUBDIVISION -PERMITS OR AUTHORIZATIONS RELATING TO PREMISES.pdf; RE: Thrive Santa Ana, Inc. - City of Santa Ana Additional Insured and Certificate Holder Request Type (check only one): ®Standard COI Review — Risk Management will review and approve insurance documents submitted. This applies to PO, Event, Reservations, Permit and Agreements. ❑New Contractor or New Agreement— Risk Management will request insurance documents from Contractor/Insured Contact in accordance with agreement. All fields required to advance the process — do not delete or modify. City Contact Department: CDA Project Manager Name: Sylvia Vazquez Project Manager Email: syazquez(c�santa-ana.orq Contractor/Insured Contact Business Name: THRIVE Santa Ana Agreement Number and Agreement Link: Ground Lease Attached - DDA attached Vendor Contact Name: Luis Sarmiento Vendor Contact Phone: thrivesantaana()gmail.com Vendor Email Address: 714-425-5562 Insurance Contact (may be found at top right of ACORD form) Contact Name: Christine R Sousa Contact Phone: (626)339-9921 Contact Email Address: christine(a)bakerromero.com Thank you, Sylvia Vazquez I Economic Development Specialist II Community Development Agency 120 Civic Center Plaza 714-647-5445 1 svazquez@santa-ana.org OWNEW, MR 1�1 V Santa Ana, CA 92701 ,acoRh? CERTIFICATE OF LIABILITY INSURANCE 1111 DATE(MMIDOA'YYY) 1 11/01/2022 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER. IMPORTANT: If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must have ADDITIONAL INSURED provisions or be endorsed. If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s). PRODUCER Baker, Romero & Associates Insurance Brokers, Inc. 750 Terrado Plaza #238 Covina, CA 91723 CONTACT NAME: Christine R Sousa ACNN E (626)332.2258 q/C Na; (626)339.9921 nooaEss: christine@bakerromero.com INSURERS AFFORDING COVERAGE NAIC If License #: OG22790 INSURER A: Scottsdale Insurance Company 41297 INSURED INSURERB: State Compensation Insurance Fund Thrive Santa Ana, Inc. INSURERC: P.O. Box 1935 Santa Ana, CA 92703 INSURER D : INSURER E : INSURER F : COVERAGES CERTIFICATE NUMBER: 00008709368052 REVISION NUMBER: 3 THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. INSR LTR TYPE OF ADDL SUBR POLICY NUMBER POLICY EFF MMIDDrIYYY POLICY EXP MMIDDM'YY LIMITS A COMMERCIAL GENERAL ABILITY CLAIMS -MADE OCCUR CPS7680941 10131/2022 10/3112023 EACH OCCURRENCE $ 1000000 PREMISES Eaoccurma $ 100,000 MED EXP (Anyone person) $ 5 000 PERSONAL&ADVINJURY $ 1000000 GENLAGGREGATE X LIMITAPPLIES PER: POLICY ❑ JEo LOC GENERALAGGREGATE $ 2000000 PRODUCTS - COMPIOP AGO $ 2.000.000 $ OTHER: AUTOMOBILE LIABILITY COMBINED SINGLE LIMIT Ea acmden $ BODILY INJURY (Per person) $ ANY AUTO OWNED SCHEDULED AUTOS ONLY AUTOS BODILY INJURY (Per accident) $ HIRED NON -OWNED AUTOS ONLY AUTOS ONLY PROPERTY DAMAGE Per accident $ $ UMBRELLA LIAB OR OCCUR EACH OCCURRENCE $ AGGREGATE $ EXCESSLIAB DED RETENTION$ $ B WORKERS COMPEN ATIOIN AND EMPLOYERS' IN ANY PROPRIETORIPARTNEWEXECUTIVE Y OFFICEWMEMBER EXCLUDED? (Mandatary In NH) NIA 9294438-2022 03117/2022 03/1712023 X STATUTE ER'_ E.L. EACH ACCIDENT $ 1,000,000 E.L. DISEASE - EA EMPLOYE $ 1,000,000 It yes, describe under DESCRIPTION OF OPERATIONS below E.L. DISEASE -POLICY LIMIT $ 1,000,000 C D DESCRIPTION OF OPERATIONS I LOCATIONS VEHICLES (ACORD 101, Additional Remarks Schedule, may be attached If more space Is required) Location: Walnut/Daisy Micro -Farm: 1901, 1903, 1907, 1909 W. Walnut St., Santa Ana, CA 92703 CERTIFICATE HOLDER CANCELLATION SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE City of Santa Ana THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE POLICY PROVISIONS. 20 Civic Center Plaza Santa Ana, CA 92701 AUTHORIZED REPRESENTATIVE CRS ©1988-2015 ACORD CORPORATION. All rights reserved. ACORD 25 (2016/03) The ACORD name and logo are registered marks of ACORD Printed by CRS on 11/01/2022 at 12:52PM CERTIFICATE OF PROPERTY INSURANCE I DAM(MMIDDIYYYY) 11/01/2022 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER. AND THE CERTIFICATE HOLDER. PRODUCER Baker, Romero & Associates Insurance Brokers, Inc. 750 Terrado Plaza #238 Covina, CA 91723 INSURED INSURERA: Scottsdale Insurance Company Thrive Santa Ana, Inc. INSURERB: INSURERC: P.O.Box 1935 INSURER D: Santa Ana, CA 92703 INSURERE: INSURERF: COVERAGES CERTIFICATE NUMBER: REVISION NUMBER: LOCATION OF PREMISES I DESCRIPTION OF PROPERTY (AHach ACORD 101, Additional Remarks ScM1etlule, if mote space is required) 1901 W. Walnut St. Santa Ana CA 92703 THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACTOR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAYBE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. INSR LTR TYPE OF INSURANCE POLICY NUMBER POLICY EFFECTIVE DATE(MWDDNYYY) POLICY EXPIRATION COVERED PROPERTY DATE(MMIDDlYYYY) LIMITS CAUSES PROPERTY OF LOSS DEDUCTIBLES BUILDING L PERSONAL PROPERTY BUSINESS INCOME EXrRA EXPENSE RENTAL VALUE BLANKET BUILDING BLANKET PERS PROP BLANKET BLDG S PP $ BASIC BUILDING BROAD -CONTENTS SPECIAL $ $ $ EARTHQUAKE $ WIND $ FLOOD $ S S A X CAUSES X INLAND MARINE OF LOSS NAMED PERILS TYPE OF POLICY Builders Risk 10/31/2022 10/31/2023 X Ground Up Construction X Property at location Property in transit X Deductible $752,489 $75,249 POLICY NUMBER CPS7680941 $75,249 $5,000 CRIME TYPE OF POLICY E $ 5 BOILER & MACHINERY/ EQUIPMENT BREAKDOWN $ $ 5 $ SPECIAL CONDITIONS I OTHER COVERAGES (ACORD 101, Additional Remarks Schedule, may sa anacHed If more space is required) Location: Walnut/Daisy Micro -Farm: 1901, 1903, 1907, 1909 W. Walnut St., Santa Ana, CA 92703 City of Santa Ana Community Development Agency 20 Civic Center Plaza (M-25) P.O. Box 1988 Santa Ana, CA 92702 SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE POLICY PROVISIONS. AUTHORIZED REPRESENTATIVE ©10B5-201 s reserved. ACORD 24 (2016103) The ACORD name and logo are registered marks of ACORD Printed by CRS on November 01, 2022 at 01:00PM POLICYNUMBER: CPS7680941 COMMERCIAL GENERAL LIABILITY CG20131219 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. ADDITIONAL INSURED - STATE OR GOVERNMENTAL AGENCY OR SUBDIVISION OR POLITICAL SUBDIVISION - PERMITS OR AUTHORIZATIONS RELATING TO PREMISES This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE PART SCHEDULE State Or Governmental Agency Or Subdivision Or Political Subdivision: THE CITY OF SANTA ANA, ITS OFFICERS, OFFICIALS, EMPLOYEES, OR VOLUNTEERS ARE NAMED AS ADDITIONAL INSURED, LANDLORD; PRIMARY NON-CONTRIBUTORY IS INCLUDED FOR ANY CLAIMS RELATED TO THIS CONTRACT, THE DEVELOPER'S INSURANCE (THRIVE SANTA ANA, INC.) COVERAGE SHALL BE PRIMARY INSURANCE COVERAGE AS RESPECTS THE CITY OF SANTA ANA, ITS OFFICERS, OFFICIALS, EMPLOYEES, OR VOLUNTEERS. ANY INSURANCE OR SELF-INSURANCE MAINTAINED BY THE CITY OF SANTA ANA, ITS OFFICERS, OFFICIALS, EMPLOYEES, OR VOLUNTEERS SHALL BE EXCESS OF THE DEVELOPER'S(THRIVE SANTA ANA, INC.) INSURANCE AND SHALL NOT CONTRIBUTE WITH IT. Information required to complete this Schedule, if not shown above, will be shown in the Declarations. A. Section II — Who Is An Insured is amended to Include as an additional insured any state or governmental agency or subdivision or political subdivision shown in the Schedule, subject to the following additional provision: This insurance applies only with respect to the following hazards for which the state or governmental agency or subdivision or political subdivision has issued a permit or authorization in connection with premises you own, rent or control and to which this insurance applies: 1. The existence, maintenance, repair, construction, erection or removal of advertising signs, awnings, canopies, cellar entrances, coal holes, driveways, manholes, marquees, hoist away openings, sidewalk vaults, street banners or decorations and similar exposures; or 2. The construction, erection or removal of elevators; or 3. The ownership, maintenance or use of any elevators covered by this insurance. However: 1. The Insurance afforded to such additional Insured only applies to the extent permitted by law; and 2. If coverage provided to the additional insured is required by a contract or agreement, the Insurance afforded to such additional insured will not be broader than that which you are required by the contract or agreement to provide for such additional Insured. B. With respect to the insurance afforded to these additional Insureds, the following is added to Section III — Limits Of Insurance: If coverage provided to the additional insured is required by a contract or agreement, the most we will pay on behalf of the additional insured is the amount of Insurance: 1. Required by the contract or agreement; or 2. Available under the applicable limits of insurance; whichever is less. This endorsement shall not increase the applicable limits of insurance. CG 20 13 12 19 0 Insurance Services Office, Inc., 2018 Page 1 of 1 POLICY NUMBER: CPS7680941 COMMERCIAL GENERAL LIABILITY CG 24 04 12 19 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. WAIVER OF TRANSFER OF RIGHTS OF RECOVERY AGAINST OTHERS TO US (WAIVER OF SUBROGATION) This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE PART ELECTRONIC DATA LIABILITY COVERAGE PART LIQUOR LIABILITY COVERAGE PART POLLUTION LIABILITY COVERAGE PART DESIGNATED SITES POLLUTION LIABILITY LIMITED COVERAGE PART DESIGNATED SITES PRODUCTS/COMPLETED OPERATIONS LIABILITY COVERAGE PART RAILROAD PROTECTIVE LIABILITY COVERAGE PART UNDERGROUND STORAGE TANK POLICY DESIGNATED TANKS SCHEDULE Name Of Person(s) Or Organization(s): ANY PERSON OR ORGANIZATION WITH WHOM THE INSURED HAS AGREED TO WAIVE RIGHTS OF RECOVERY,PROVIDED SUCH AGREEMENT IS MADE IN WRITING AND PRIOR TO THE LOSS. UNITED STATES In the The following is added to Paragraph 8. Transfer Of Rights Of Recovery Against Others To Us of Section IV —Conditions: We waive any right of recovery against the person(s) or organization(s) shown in the Schedule above because of payments we make under this Coverage Part. Such waiver by us applies only to the extent that the insured has waived its right of recovery against such person(s) or organization(s) prior to loss. This endorsement applies only to the person(s) or organization(s) shown in the Schedule above. CO 24 0412 19 ©Insurance Services Office, Inc., 2018 Page 1 of 1