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HomeMy WebLinkAbout062612 CC AgendaIn compliance with the Americans with Disabilities Act, if you need special assistance to participate in this meeting, please contact the office of the City Clerk (951) 694-6444. Notification 48 hours prior to a meeting will enable the City to make reasonable arrangements to ensure accessibility to that meeting [28 CFR 35.102.35.104 ADA Title II] AGENDA TEMECULA CITY COUNCIL A REGULAR MEETING CITY COUNCIL CHAMBERS 41000 MAIN STREET JUNE 26, 2012 – 7:00 PM At approximately 9:45 P.M., the City Council will determine which of the remaining agenda items can be considered and acted upon prior to 10:00 P.M. and may continue all other items on which additional time is required until a future meeting. All meetings are scheduled to end at 10:00 P.M. 6:00 P.M. – The City Council will convene in Closed Session in the Canyons Conference Room on the third floor of the Temecula City Hall concerning the following matters: 1) Conference with real property negotiators pursuant to Government Code Section 54956.8 regarding the acquisition of the City of the YMCA building located at 29119 Margarita Road, Temecula 92591 on a portion of Margarita Park. The parties to the negotiations for the acquisition of this building are: YMCA of Riverside City and County and the City of Temecula. Negotiators for the City of Temecula are: Bob Johnson, Aaron Adams, and Tamra Irwin. Under negotiation are the price and terms for the acquisition of the building. 2) Conference with legal counsel—Potential litigation. The City Council will meet in closed session with the City Attorney pursuant to Government Code Section 54956.9(c) with respect to one matter of pending potential litigation and will discuss whether to initiate litigation against the County of Riverside relating to its certification of the Final Environmental Impact Report for the Liberty Quarry Project. 3) Conference with real property negotiators pursuant to Government Code Section 54956.8 regarding one parcel of real property owned by the City of Temecula consisting of approximately 30.2 acres (APN 909-370-002) located northwesterly of Diaz Road and Dendy Parkway. The parties to the negotiations for an amendment to the terms of sale of this property are: Wild Rivers Temecula LLC and the City of Temecula. Negotiators for the City of Temecula are: Bob Johnson, Patrick Richardson, and Luke Watson. Under negotiation are the price and terms of the sale of the property to Wild Rivers Temecula LLC. Public Information concerning existing litigation between the City and various parties may be acquired by reviewing the public documents held by the City Clerk. Next in Order: Ordinance: 12-06 Resolution: 12-50 1 CALL TO ORDER: Mayor Chuck Washington Prelude Music: To Be Announced Invocation: Reverend Al of Unity Church of Temecula Valley Flag Salute: Council Member Roberts ROLL CALL: Comerchero, Edwards, Naggar, Roberts, Washington PRESENTATIONS/PROCLAMATIONS Certificates of Achievement to Jacob Adams, William Baker, Jason Geminert, Spencer Golledge, Troy GoIledge, Austin Larsen, and Taylor May for attaining the rank of Eagle Scout PUBLIC COMMENTS A total of 30 minutes is provided so members of the public may address the City Council on items that appear within the Consent Calendar or a matter not listed on the agenda. Each speaker is limited to three minutes. If the speaker chooses to address the City Council on an item listed on the Consent Calendar or a matter not listed on the agenda, a Request to Speak form must be filled out and filed with the City Clerk. Once the speaker is called to speak, please come forward and state your name for the record. For all Public Hearing or Council Business items on the agenda, a Request to Speak form must be filed with the City Clerk prior to the City Council addressing that item. Each speaker is limited to five minutes. CITY COUNCIL REPORTS Reports by the members of the City Council on matters not on the agenda will be made at this time. A total, not to exceed, 10 minutes will be devoted to these reports. CONSENT CALENDAR NOTICE TO THE PUBLIC All matters listed under Consent Calendar are considered to be routine and all will be enacted by one roll call vote. There will be no discussion of these items unless Members of the City Council request specific items be removed from the Consent Calendar for separate action. 1 Standard Ordinance and Resolution Adoption Procedure RECOMMENDATION: 1.1 Motion to waive the reading of the text of all ordinances and resolutions included in the agenda. 2 2 Action Minutes RECOMMENDATION: 2.1 Approve the action minutes of June 12, 2012. 3 List of Demands RECOMMENDATION: 3.1 Adopt a resolution entitled: RESOLUTION NO. 12- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TEMECULA ALLOWING CERTAIN CLAIMS AND DEMANDS AS SET FORTH IN EXHIBIT A 4 Agreement for Phlebotomy Services RECOMMENDATION: 4.1 Approve the Agreement with American Forensic Nurses, DBA: AFN for phlebotomy services in Fiscal Year 2012-13 for an annual contract amount of $45,000. 5 California Department of Justice — Fingerprinting Agreement RECOMMENDATION: 5.1 Approve a five-year Agreement with the California Department of Justice in the amount of $75,000 annually for a total term of $375,000 for fingerprinting services. 6 Trustee/Fiscal Agent Services for Fiscal Year 2012-13 RECOMMENDATION: 6.1 Approve the expenditure of $32,160 for Fiscal Year 2012-13 trustee/fiscal agent services, provided by U.S. Bank, for the City's Community Facilities Districts (CFD), Assessment District (AD), and Tax Allocation Bonds (TABs). 7 Fourth Amendment to the Agreement with Proactive Fire Design, Inc. RECOMMENDATION: 7.1 Approve the Fourth Amendment with Proactive Fire Design, Inc. in the amount of $60,000 for Fiscal Year 2012-13 Fire Department plan review service. 3 8 Fiscal Year 2012-13 Solid Waste and Recycling Fees RECOMMENDATION: 8.1 Adopt a resolution entitled: RESOLUTION NO. 12- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TEMECULA APPROVING SOLID WASTE AND RECYCLING FEES FOR FISCALYEAR 2012-13 9 Purchase & Sale Agreement with the Gurrola Family Trust for Murrieta Creek Bridge and Overland Drive Extension to Diaz Road, PW00-26 RECOMMENDATION: 9.1 Adopt a resolution entitled: RESOLUTION NO. 12- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TEMECULA APPROVING THAT CERTAIN AGREEMENT ENTITLED PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS BETWEEN THE CITY OF TEMECULA AND RICHARD B. GURROLA AND VALERIE GURROLA, TRUSTEES OF THE GURROLA FAMILY TRUST UNDER DECLARATION DATED DEC. 27, 2001, ROBERT A. GURROLA, GARY S. GURROLA, AND RICHARD B. GURROLA IN CONNECTION WITH THE MURRIETA CREEK BRIDGE AND OVERLAND DRIVE EXTENSION TO DIAZ ROAD — PW00-26 9.2 Authorize the City Manager to approve and execute any necessary documents and to take all necessary actions to complete this acquisition, including without limitation, the approval and execution of all documents referenced in the Purchase and Sale Agreement and all escrow instructions; 9.3 Authorize the Finance Director to issue a warrant for the sum of $1,242,000 plus escrow fees for deposit with the Escrow Holder, First American Title Insurance Company, to complete the transaction. Escrow fees are estimated not to exceed $15,000. 10 Plans and Specifications, and Authorization to Solicit Construction Bids for Environmental Mitigation for the French Valley Parkway Interchange Project RECOMMENDATION: 10.1 Approve the plans and specifications, and authorize the Department of Public Works to solicit construction bids for the Environmental Mitigation for the French Valley Parkway/Interstate 15 Overcrossing and Interchange Improvements. 4 11 Notice of Completion for the Citywide Storm Drain Improvements — Calle Fiesta, PW10-07 RECOMMENDATION: 11.1 Accept the construction of the Citywide Storm Drain Improvements — Calle Fiesta, PW10-07, as complete; 11.2 Direct the City Clerk to file and record the Notice of Completion, release the Performance Bond, and accept a one-year Maintenance Bond in the amount of 10% of the contract amount; 11.3 Release the Labor and Materials Bond seven months after filing of the Notice of Completion if no liens have been filed. 12 Construction Contract for the Pavement Rehabilitation Program — Ynez Road, PW10-14 RECOMMENDATION: 12.1 Approve a Mutual Rescission and Compensation Agreement of the Construction Contract with EBS General Engineering, Inc. for the Pavement Rehabilitation Program — Ynez Road, PW10-14, and accept a payment of $95,067 from EBS General Engineering, Inc.; 12.2 Award a construction contract for the Pavement Rehabilitation Program — Ynez Road, PW10-14, to All American Asphalt in the amount of $2,177,177; 12.3 Authorize the City Manager to approve change orders up to 10% of the contract amount, $217,717.70. 13 Specifications and Authorization to Solicit Bids for the Traffic Safety and Bridge Light Retrofit, PW12-08 RECOMMENDATION: 13.1 Approve the specifications and authorize the Department of Public Works to solicit bids for the Traffic Safety and Bridge Light Retrofit, PW12-08. 14 Approval of Parcel Map 36358 (located at the southwest corner of Landings Road and Village Road) RECOMMENDATION: 14.1 Approve Parcel Map 36358 in conformance with the Conditions of Approval. 5 15 Approval of a Subdivision Improvement Agreement and its securities for Tract Map 23992 (located south of Rancho California Road and west of Ynez Road at Tierra Vista Road) RECOMMENDATION: 15.1 Approve the Subdivision Improvement Agreement and accept the Faithful Performance Bond and the Labor and Material Bond as security for the Agreement. 16 Agreement with TVVM Roofing, Inc. for Preventive Roof Maintenance Services at various City locations RECOMMENDATIONS: 16.1 Approve an Agreement for minor maintenance services for preventive roof maintenance services at various City locations with TVVM Roofing, Inc., in the amount of $62,740 for Fiscal Year 2012-13. 17 Second Reading of Ordinance No. 12-05 RECOMMENDATION: 17.1 Adopt an ordinance entitled: ORDINANCE NO. 12-05 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF TEMECULA AMENDING CHAPTER 8.28 OF THE TEMECULA MUNICIPAL CODE RELATING TO STORM WATER AND URBAN RUNOFF MANAGEMENT AND DISCHARGE CONTROL, AND AUTHORIZING THE DIRECTOR OF PUBLIC WORKS/CITY ENGINEER TO PREPARE A MANUAL SETTING FORTH THE ADMINISTRATIVE RULES, PROCEDURES, AND REQUIREMENTS NECESSARY TO IMPLEMENT THIS ORDINANCE ******************** RECESS CITY COUNCIL MEETING TO SCHEDULED MEETINGS OF THE TEMECULA COMMUNITY SERVICES DISTRICT, THE SUCCESSOR AGENCY TO THE TEMECULA REDEVELOPMENT AGENCY, THE TEMECULA HOUSING AUTHORITY, AND THE TEMECULA PUBLIC FINANCING AUTHORITY ******************** 6 TEMECULA COMMUNITY SERVICES DISTRICT MEETING Next in Order: Ordinance: No. CSD 12-01 Resolution: No. CSD 12-05 CALL TO ORDER: President Jeff Comerchero ROLL CALL: DIRECTORS: Edwards, Naggar, Roberts, Washington, Comerchero CSD PUBLIC COMMENTS A total of 30 minutes is provided so members of the public may address the Board of Directors on items that appear within the Consent Calendar or a matter not listed on the agenda. Each speaker is limited to three minutes. If the speaker chooses to address the Board of Directors on an item listed on the Consent Calendar or a matter not listed on the agenda, a Request to Speak form must be filled out and filed with the City Clerk. Once the speaker is called to speak, please come forward and state your name for the record. For all Public Hearing or District Business items on the agenda, a Request to Speak form must be filed with the City Clerk prior to the Board of Directors addressing that item. Each speaker is limited to five minutes. CSD CONSENT CALENDAR NOTICE TO THE PUBLIC All matters listed under Consent Calendar are considered to be routine and all will be enacted by one roll call vote. There will be no discussion of these items unless Members of the Temecula Community Services District request specific items be removed from the Consent Calendar for separate action. 18 Action Minutes RECOMMENDATION: 18.1 Approve the action minutes of June 12, 2012. 19 Agreement with Melody's Ad Works, Inc. for Promoting and Marketing Special Events in Old Town for Fiscal Year 2012-13 RECOMMENDATION: 19.1 Approve the Agreement with Melody's Ad Works, Inc. in the amount of $43,000 for services provided in promoting and marketing Special Events in Old Town for Fiscal Year 2012-13. 7 20 Second Amendment to the Window Cleaning Services Agreement with Clear Image Window Cleaning for Fiscal Year 2012-13 RECOMMENDATION: 20.1 Approve the Second Amendment with Clear Image Window Cleaning for routine window cleaning maintenance services in the amount of $20,000 for Fiscal Year 2012-13. 21 Fifth Amendment with Tremco/Weatherproofing Technologies, Inc. RECOMMENDATION: 21.1 Approve the Fifth Amendment with Tremco/Weatherproofing Technologies, Inc. to extend the term of the agreement to September 30, 2012, and make minor changes to the agreement. 22 Amendment to various Community Service District Fees RECOMMENDATION: 22.1 Adopt a resolution entitled: RESOLUTION NO. CSD 12- A RESOLUTION OF THE BOARD OF DIRECTORS OF THE TEMECULA COMMUNITY SERVICES DISTRICT OF THE CITY OF TEMECULA AMENDING CERTAIN TCSD RESOLUTIONS ESTABLISHING VARIOUS COMMUNITY SERVICES DISTRICT FEES CSD PUBLIC HEARING Any person may submit written comments to the Community Services District before a public hearing or may appear and be heard in support of or in opposition to the approval of the project(s) at the time of the hearing. If you challenge any of the project(s) in court, you may be limited to raising only those issues you or someone else raised at the public hearing or in written correspondence delivered to the City Clerk at, or prior to, the public hearing. 23 Adoption of the Fiscal Year 2012-13 Annual Operating Budget RECOMMENDATION: 23.1 Adopt a resolution entitled: RESOLUTION NO. CSD 12- A RESOLUTION OF THE BOARD OF DIRECTORS OF THE TEMECULA COMMUNITY SERVICES DISTRICT OF THE CITY OF TEMECULA ADOPTING THE FISCAL YEAR 2012-13 ANNUAL OPERATING BUDGET AND ESTABLISHING CONTROLS ON CHANGES IN APPROPRIATIONS 8 CSD DEPARTMENTAL REPORT 24 Community Services Department Monthly Report CSD DIRECTOR OF COMMUNITY SERVICES REPORT CSD GENERAL MANAGER REPORT CSD BOARD OF DIRECTORS REPORTS CSD ADJOURNMENT Next regular meeting: Tuesday, July 10, 2012, at 5:30 PM, for a Closed Session, with regular session commencing at 7:00 PM., City Council Chambers, 41000 Main Street, Temecula, California. 9 SUCCESSOR AGENCY TO THE TEMECULA REDEVELOPMENT AGENCY — no meeting TEMECULA HOUSING AUTHORITY — no meeting TEMECULA PUBLIC FINANCING AUTHORITY — no meeting 10 RECONVENE TEMECULA CITY COUNCIL PUBLIC HEARING Any person may submit written comments to the City Council before a public hearing or may appear and be heard in support of or in opposition to the approval of the project(s) at the time of the hearing. If you challenge any of the project(s) in court, you may be limited to raising only those issues you or someone else raised at the public hearing or in written correspondence delivered to the City Clerk at, or prior to, the public hearing. 25 Amendment to the Citywide User Fee Schedule RECOMMENDATION: 25.1 Adopt a resolution entitled: RESOLUTION NO. 12- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TEMECULA ADDING CURRENT HOURLY RATE CHARGES TO THE CONSOLIDATED SCHEDULE OF FEES FOR LAND USE AND RELATED FUNCTIONS USER FEE SCHEDULE FOR THOSE SERVICES PROVIDED THAT ARE NOT SUBJECT TO A SPECIFIC FEE CITY COUNCIL BUSINESS 26 Planning Commission Appointments RECOMMENDATION: 26.1 Appoint two applicants to serve full three-year terms on the Planning Commission through June 15, 2015. DEPARTMENTAL REPORTS 27 Public Works Department Monthly Report 28 Planning Department Monthly Report 29 Economic Development Department Monthly Report 30 Police Department Monthly Report CITY MANAGER REPORT CITY ATTORNEY REPORT 11 ADJOURNMENT Next regular meeting: Tuesday, July 10, 2012, at 5:30 PM, for a Closed Session, with regular session commencing at 7:00 PM, City Council Chambers, 41000 Main Street, Temecula, California. NONCE TO THE PUBLIC The agenda packet (including staff reports) will be available for viewing in the Main Reception area at the Temecula Civic Center (41000 Main Street, Temecula) after 4:00 PM the Friday before the City Council meeting. At that time, the packet may also be accessed on the City's website — www.cityoftemecula.orq Supplemental material received after the posting of the Agenda Any supplemental material distributed to a majority of the City Council regarding any item on the Agenda, after the posting of the Agenda, will be available for public review in the Main Reception area at the Temecula Civic Center (41000 Main Street, Temecula, 8:00 AM — 5:00 PM). In addition, such material will be made available on the City's website — www.cityoftemecula.orq— and will be available for public review at the respective meeting. If you have any questions regarding any item of business on the Agenda for this meeting, please contact the City Clerk's Department, (951) 694-6444. 12 PRESENTATIONS The City of Temecula Certificate of Achievement The City Council of the City of Temecula commends the outstanding achievement of Jacob Adams of Troop #624 We congratulate Jacob for his achievement on receiving the rank of Eagle Scout. We are proud to present Jacob with this Award, and we wish him success in his future accomplishments. IN WITNESS WHEREOF, I have hereunto affixed my hand and official seal this twenty-sixth day of June, 2012. Chuck Washington, Mayor Susan W. Jones, MMC, City Clerk The City of Temecula Certificate of Achievement The City Council of the City of Temecula commends the outstanding achievement of William Baker of Troop #624 We congratulate William for his achievement on receiving the rank of Eagle Scout. We are proud to present William with this Award, and we wish him success in his future accomplishments. IN WITNESS WHEREOF, I have hereunto affixed my hand and official seal this twenty-sixth day of June, 2012. Chuck Washington, Mayor Susan W. Jones, MMC, City Clerk The City of Temecula Certificate of Achievement The City Council of the City of Temecula commends the outstanding achievement of Jason Geminert of Troop #624 We congratulate Jason for his achievement on receiving the rank of Eagle Scout. We are proud to present Jason with this Award, and we wish him success in his future accomplishments. IN WITNESS WHEREOF, I have hereunto affixed my hand and official seal this twenty-sixth day of June, 2012. Chuck Washington, Mayor Susan W. Jones, MMC, City Clerk The City of Temecula Certificate of Achievement The City Council of the City of Temecula commends the outstanding achievement of Spencer Golledge of Troop #624 We congratulate Spencer for his achievement on receiving the rank of Eagle Scout. We are proud to present Spencer with this Award, and we wish him success in his future accomplishments. IN WITNESS WHEREOF, I have hereunto affixed my hand and official seal this twenty-sixth day of June, 2012. Chuck Washington, Mayor Susan W. Jones, MMC, City Clerk The City of Temecula Certificate of Achievement The City Council of the City of Temecula commends the outstanding achievement of Troy Golledge of Troop #624 We congratulate Troy for his achievement on receiving the rank of Eagle Scout. We are proud to present Troy with this Award, and we wish him success in his future accomplishments. IN WITNESS WHEREOF, I have hereunto affixed my hand and official seal this twenty-sixth day of June, 2012. Chuck Washington, Mayor Susan W. Jones, MMC, City Clerk The City of Temecula Certificate of Achievement The City Council of the City of Temecula commends the outstanding achievement of Austin Larsen of Troop #624 We congratulate Austin for his achievement on receiving the rank of Eagle Scout. We are proud to present Austin with this Award, and we wish him success in his future accomplishments. IN WITNESS WHEREOF, I have hereunto affixed my hand and official seal this twenty-sixth day of June, 2012. Chuck Washington, Mayor Susan W. Jones, MMC, City Clerk The City of Temecula Certificate of Achievement The City Council of the City of Temecula commends the outstanding achievement of Taylor May of Troop #624 We congratulate Taylor for his achievement on receiving the rank of Eagle Scout. We are proud to present Taylor with this Award, and we wish him success in his future accomplishments. IN WITNESS WHEREOF, I have hereunto affixed my hand and official seal this twenty-sixth day of June, 2012. Chuck Washington, Mayor Susan W. Jones, MMC, City Clerk CONSENT CALENDAR Item No. 1 Item No. 2 ACTION MINUTES TEMECULA CITY COUNCIL A REGULAR MEETING CITY COUNCIL CHAMBERS 41000 MAIN STREET JUNE 12, 2012 – 7:00 PM 6:00 P.M. – The City Council will convene in Closed Session in the Canyons Conference Room on the third floor of the Temecula City Hall concerning the following matters: 1) Conference with real property negotiators pursuant to Government Code Section 54956.8 regarding the acquisition of the City of the YMCA building located at 29119 Margarita Road, Temecula 92591 on a portion of Margarita Park. The parties to the negotiations for the acquisition of this building are: YMCA of Riverside City and County and the City of Temecula. Negotiators for the City of Temecula are: Bob Johnson, Aaron Adams, and Tamra Irwin. Under negotiation are the price and terms for the acquisition of the building. 2) Conference with legal counsel—Potential litigation. The City Council will meet in closed session with the City Attorney pursuant to Government Code Section 54956.9(c) with respect to one matter of pending potential litigation and will discuss whether to initiate litigation against the County of Riverside relating to its certification of the Final Environmental Impact Report for the Liberty Quarry Project. 3) Conference with real property negotiators pursuant to Government Code Section 54956.8 regarding one parcel of real property owned by the City of Temecula consisting of approximately 30.2 acres (APN 909-370-002) located northwesterly of Diaz Road and Dendy Parkway. The parties to the negotiations for an amendment to the terms of sale of this property are: Wild Rivers Temecula LLC and the City of Temecula. Negotiators for the City of Temecula are: Bob Johnson, Patrick Richardson, and Luke Watson. Under negotiation are the price and terms of the sale of the property to Wild Rivers Temecula LLC. Public Information concerning existing litigation between the City and various parties may be acquired by reviewing the public documents held by the City Clerk. At 6:00 P.M. the City Council called the Closed Session meeting to order. The City Council meeting convened at 7:00 P.M. CALL TO ORDER: Mayor Chuck Washington Prelude Music: Temecula Valley Piano Competition Winners Invocation: Rabbi Barry Ulrych of Congregation B'nai Chaim of Murrieta Flag Salute: Mayor Pro Tem Naggar ROLL CALL: Comerchero, Edwards, Naggar, Roberts, Washington 1 PRESENTATIONS/PROCLAMATIONS Federal Legislative Update — David Turch Crosstown Champions, Men's Adult Softball Presentation Recording of "Paper Street Band" singing "True Love Temecula" PUBLIC COMMENTS Lorena Spencer Jimmy Moore Judy Zilfigar Kathy Vining Patrice Lynes CITY COUNCIL REPORTS CONSENT CALENDAR 1 Standard Ordinance and Resolution Adoption - Approved Staff Recommendation (5- 0-0) Council Member Comerchero made the motion; it was seconded by Council Member Roberts; and electronic vote reflected unanimous approval. RECOMMENDATION: 1.1 Motion to waive the reading of the text of all ordinances and resolutions included in the agenda. 2 Action Minutes - Approved Staff Recommendation (5-0-0) Council Member Comerchero made the motion; it was seconded by Council Member Roberts; and electronic vote reflected unanimous approval. RECOMMENDATION: 2.1 Approve the action minutes of May 22, 2012; 2.2 Approve the action minutes of May 23, 2012. 3 List of Demands - Approved Staff Recommendation (5-0-0) Council Member Comerchero made the motion; it was seconded by Council Member Roberts; and electronic vote reflected unanimous approval. RECOMMENDATION: 3.1 Adopt a resolution entitled: RESOLUTION NO. 12-44 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TEMECULA ALLOWING CERTAIN CLAIMS AND DEMANDS AS SET FORTH IN EXHIBIT A 2 4 City Treasurer's Report as of April 30, 2012 - Approved Staff Recommendation (5-0- 0) Council Member Comerchero made the motion; it was seconded by Council Member Roberts; and electronic vote reflected unanimous approval. RECOMMENDATION: 4.1 Approve and file the City Treasurer's Report as of April 30, 2012. 5 First Amendment to Agreement for Law Enforcement Services - Approved Staff Recommendation (5-0-0) Council Member Comerchero made the motion; it was seconded by Council Member Roberts; and electronic vote reflected unanimous approval. RECOMMENDATION: 5.1 Approve the First Amendment to Agreement for Law Enforcement Services between County of Riverside and City of Temecula to include converting one Patrol Officer, one Special Enforcement Team position, and two Traffic/Motorcycle Team positions into four new POP Team positions. 6 Records Destruction Approval - Approved Staff Recommendation (5-0-0) Council Member Comerchero made the motion; it was seconded by Council Member Roberts; and electronic vote reflected unanimous approval. RECOMMENDATION: 6.1 Approve the scheduled destruction of certain City records in accordance with the City of Temecula approved Records Retention Policy. 7 Sponsorship Agreement with Safe Alternatives for Everyone (S.A.F.E.) - Approved Staff Recommendation (5-0-0) Council Member Comerchero made the motion; it was seconded by Council Member Roberts; and electronic vote reflected unanimous approval. RECOMMENDATION: 7.1 Approve the Sponsorship Agreement with Safe Alternatives for Everyone in the amount of $10,000 to provide the Temecula Valley with quality and needed services for children, youth, and families who have experienced or are at risk of abuse and violence. 8 Voter Approved Measure C Annual Special Tax Levy - Approved Staff Recommendation (5-0-0) Council Member Comerchero made the motion; it was seconded by Council Member Roberts; and electronic vote reflected unanimous approval. RECOMMENDATION: 8.1 Adopt a resolution entitled: 3 RESOLUTION NO. 12-45 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TEMECULA ESTABLISHING THE AMOUNT OF THE SPECIAL TAX LEVY FOR FISCAL YEAR 2012-2013 TO PROVIDE FOR RECREATION AND HUMAN SERVICES PROGRAMS AND THE OPERATION, MAINTENANCE AND SERVICING OF PUBLIC PARKS AND RECREATIONAL FACILITIES, MEDIAN LANDSCAPING, AND ARTERIAL STREET LIGHTS AND TRAFFIC SIGNALS 9 Agreements for Building Plan Review Services for Fiscal Year 2012-13 - Approved Staff Recommendation (5-0-0) Council Member Comerchero made the motion; it was seconded by Council Member Roberts; and electronic vote reflected unanimous approval. RECOMMENDATION: 9.1 Approve an agreement for Building Plan Review Services with Bureau Veritas, Inc. in the amount of $50,000; 9.2 Approve an agreement for Building Plan Review Services with Esgil Corporation in the amount of $50,000. 10 Agreement for Landscape Plan Check and Inspections Services for Fiscal Year 2012-13 - Approved Staff Recommendation (5-0-0) Council Member Comerchero made the motion; it was seconded by Council Member Roberts; and electronic vote reflected unanimous approval. RECOMMENDATION: 10.1 Approve an agreement with Blanca Y. Price to perform Landscape Plan Check and Inspection Services for Fiscal Year 2012-13 in the amount of $90,000. 11 Agreement with Hardy & Harper, Inc. for Citywide Paving Maintenance Services - Approved Staff Recommendation (5-0-0) Council Member Comerchero made the motion; it was seconded by Council Member Roberts; and electronic vote reflected unanimous approval. RECOMMENDATION: 11.1 Approve an agreement with Hardy & Harper, Inc. to provide annual Paving Maintenance Services to the City in the amount of $400,000 for Fiscal Year 2012-13. 4 12 Agreement with Rene's Commercial Management for Weed Abatement Maintenance Services - Approved Staff Recommendation (5-0-0) Council Member Comerchero made the motion; it was seconded by Council Member Roberts; and electronic vote reflected unanimous approval. RECOMMENDATION: 12.1 Approve an agreement with Rene's Commercial Management to provide annual Weed Abatement Maintenance Services to the City in the amount of $200,000 for Fiscal Year 2012-13. 13 Agreement with Ryan Monteleone Excavation, Inc. for Excavation, Backfill, and Grading Paving Maintenance Services - Approved Staff Recommendation (5-0-0) Council Member Comerchero made the motion; it was seconded by Council Member Roberts; and electronic vote reflected unanimous approval. RECOMMENDATION: 13.1 Approve an agreement with Ryan Monteleone, Inc. to provide annual Excavation, Backfill and Grading Paving Maintenance Services to the City in the amount of $300,000 for Fiscal Year 2012-13. 14 Agreement with WURM'S Janitorial Services, Inc. for Janitorial Maintenance Services - Approved Staff Recommendation (5-0-0) Council Member Comerchero made the motion; it was seconded by Council Member Roberts; and electronic vote reflected unanimous approval. RECOMMENDATION: 14.1 Approve an agreement with WURM'S Janitorial Services, Inc. to provide annual Janitorial Maintenance Services to the City in the amount of $251,557.37 for Fiscal Year 2012-13. 15 Agreement with the California Highway Patrol for Construction Zone Enhanced Enforcement Program Services on Phase I of the French Valley Parkway Interchange Improvement Project - Approved Staff Recommendation (5-0-0) Council Member Comerchero made the motion; it was seconded by Council Member Roberts; and electronic vote reflected unanimous approval. RECOMMENDATION: 15.1 Approve the Department of California Highway Patrol's standard Reimbursable Letter of Agreement, Form CHP 465, for use in implementing the Construction Zone Enhanced Enforcement Program (COZEEP) on the French Valley Parkway/Interstate 15 Overcrossing and Interchange Improvement Project — Phase I; 15.2 Authorize the City Manager to execute multiple Reimbursable Letters of Agreement up to a total of $100,000. 5 16 Professional Services Agreement for a Preliminary Investigation of the Old Town Temecula Community Theater Remediation, PW12-04 - Approved Staff Recommendation (5-0-0) Council Member Comerchero made the motion; it was seconded by Council Member Roberts; and electronic vote reflected unanimous approval. RECOMMENDATION: 16.1 Appropriate funding in the amount of $73,400 from the General Fund (Settlement Fund Balance) to the Old Town Temecula Community Theater Remediation, PW12-04; 16.2 Approve an agreement with Meyer and Associates in the amount of $58,400 for a preliminary investigation of the Old Town Temecula Community Theater Remediation, PW12-04; 16.3 Authorize the City Manager to approve Extra Work Authorizations not to exceed the contingency amount of $15,000, which is equal to approximately 25% of the agreement amount. 17 Construction Contract for Citywide Concrete Repairs — PW12-07 - Approved Staff Recommendation (5-0-0) Council Member Comerchero made the motion; it was seconded by Council Member Roberts; and electronic vote reflected unanimous approval. RECOMMENDATION: 17.1 Award the construction contract for Citywide Concrete Repairs Project — PW12- 07, to Above All Names Construction Services, Inc. in the amount of $127,777.77 for Fiscal Year 2012-2013; 17.2 Authorize the City Manager to approve change orders not to exceed the contingency amount of $25,555.55, which is equal to 20% of the contract amount; 17.3 Make a finding that the Citywide Concrete Repairs Project is exempt from Multiple Species Habitat Conservation Plan (MSHCP) fees. 18 Amendments to Annual Agreements for various services required by the Public Works, Traffic Division — Fiscal Year 2012-13 - Approved Staff Recommendation (5-0-0) Council Member Comerchero made the motion; it was seconded by Council Member Roberts; and electronic vote reflected unanimous approval. RECOMMENDATION: 18.1 Approve the following amendments to annual agreements in the amounts stated for Fiscal Year 2012-13 for various Traffic Division operational needs. First Amendment with DBX, Inc. $30,000 Second Amendment with McCain, Inc. $30,000 First Amendment with Willdan Engineering $30,000 6 19 Second reading of Ordinance No. 12-04 - Approved Staff Recommendation (5-0-0) Council Member Comerchero made the motion; it was seconded by Council Member Roberts; and electronic vote reflected unanimous approval. RECOMMENDATION: 19.1 Adopt an ordinance entitled: ORDINANCE NO. 12-04 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF TEMECULA ADDING CHAPTER 3.30 TO THE TEMECULA MUNICIPAL CODE TO ESTABLISH A LOCAL VENDOR PREFERENCE PROGRAM AND AMENDING SECTIONS 3.28.020, 3.28.220, 3.28.260, AND 3.32.010 OF THE TEMECULA MUNICIPAL CODE TO INTEGRATE THE LOCAL VENDOR PREFERENCE POLICY INTO THE CITY'S PURCHASING SYSTEM Mayor Washington recessed the City Council Meeting to the scheduled meetings of the Temecula Community Services District Meeting and the Successor Agency to the Temecula Redevelopment Agency at 8:00 PM. The meeting was reconvened as a Joint City Council/Successor Agency to the Temecula Redevelopment Agency Meeting at 8:30 PM. JOINT CITY COUNCIL/SUCCESSOR AGENCY TO THE TEMECULA REDEVELOPMENT AGENCY BUSINESS 25 Adoption of the Fiscal Year 2013-2017 Capital Improvement Program Budget RECOMMENDATION: 25.1 The City Council adopt a resolution entitled: Approved Staff Recommendation (5-0-0) Council Member Naggar made the motion; it was seconded by Council Member Roberts; and voice vote reflected unanimous approval with the following noted abstentions. Council Member Comerchero did not participate in the discussion concerning the Margarita Road — Project 2 (Avenida Barca to Solana Way) portion of the Pavement Rehabilitation Program -Citywide project because he has an interest in real property within 500 feet of the boundaries of this project and it is likely to affect this property. Council Member Comerchero abstained in the approval of this Resolution as such approval relates to the Margarita Road — Project 2 (Avenida Barca to Solana Way) portion of the Pavement Rehabilitation Program -Citywide project. Council Member Edwards did not participate in the discussion concerning the Murrieta Creek Improvements project and the Temecula Community Center Renovation project because her employer, the Boys and Girls Club, is located within 500 feet of these projects and they are likely to affect her employer and this property. Council Member Edwards abstained in the approval of this Resolution as such approval relates to the Murrieta Creek Improvement project and the Temecula Community Center Renovation project. Council Member Naggar did not participate in the discussion 7 concerning the Great Oak High School Tennis Court Lighting project and the study of the Medians and the Ornamental Pedestrian Barriers project on Deer Hollow adjacent to the Great Oak High School project because he has an interest in real property within 500 feet of the boundaries of these projects and they are likely to affect this property. Council Member Naggar abstained in the approval of this Resolution as such approval relates to the Great Oak High School Tennis Court Lighting project and the study of the Medians and the Ornamental Pedestrian Barriers project on Deer Hollow adjacent to the Great Oak High School project. RESOLUTION NO. 12-46 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TEMECULA APPROVING THE CAPITAL IMPROVEMENT PROGRAM BUDGET FOR FY 2013-17 AND ADOPTING THE CAPITAL IMPROVEMENT BUDGET FOR FY 2012-13 25.2 The Successor Agency to the Temecula Redevelopment Agency adopts a resolution entitled: Approved Staff Recommendation (5-0-0) Council Member Naggar made the motion; it was seconded by Council Member Edwards; and voice vote reflected unanimous approval with the following noted abstentions. Council Member Comerchero did not participate in the discussion concerning the Margarita Road — Project 2 (Avenida Barca to Solana Way) portion of the Pavement Rehabilitation Program -Citywide project because he has an interest in real property within 500 feet of the boundaries of this project and it is likely to affect this property. Council Member Comerchero abstained in the approval of this Resolution as such approval relates to the Margarita Road — Project 2 (Avenida Barca to Solana Way) portion of the Pavement Rehabilitation Program -Citywide project. Council Member Edwards did not participate in the discussion concerning the Murrieta Creek Improvements project and the Temecula Community Center Renovation project because her employer, the Boys and Girls Club, is located within 500 feet of these projects and they are likely to affect her employer and this property. Council Member Edwards abstained in the approval of this Resolution as such approval relates to the Murrieta Creek Improvement project and the Temecula Community Center Renovation project. Council Member Naggar did not participate in the discussion concerning the Great Oak High School Tennis Court Lighting project and the study of the Medians and the Ornamental Pedestrian Barriers project on Deer Hollow adjacent to the Great Oak High School project because he has an interest in real property within 500 feet of the boundaries of these projects and they are likely to affect this property. Council Member Naggar abstained in the approval of this Resolution as such approval relates to the Great Oak High School Tennis Court Lighting project and the study of the Medians and the Ornamental Pedestrian Barriers project on Deer Hollow adjacent to the Great Oak High School project. 8 RESOLUTION NO. SARDA 12-12 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE SUCCESSOR AGENCY TO THE TEMECULA REDEVELOPMENT AGENCY APPROVING THE CAPITAL IMPROVEMENT PROGRAM BUDGET FOR FY 2013-17 AND ADOPTING THE CAPITAL IMPROVEMENT BUDGET FOR FY 2012-13 26 Adoption of the Fiscal Year 2012-13 Annual Operating Budget — Approved Staff Recommendation 26.1, 26.2, and 26.3. (5-0-0) The motion was made by Council Member Naggar; it was seconded by Council Member Comerchero; and voice vote reflected unanimous approval. RECOMMENDATION: 26.1 The City Council adopt a resolution entitled: RESOLUTION NO. 12-47 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TEMECULA ADOPTING THE FISCAL YEAR 2012-13 ANNUAL OPERATING BUDGET AND ESTABLISHING CONTROLS ON CHANGES IN APPROPRIATIONS 26.2 The City Council adopt a resolution entitled: RESOLUTION NO. 12-48 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TEMECULA REVISING THE SCHEDULE OF AUTHORIZED POSITIONS 26.3 The City Council adopt a resolution entitled: RESOLUTION NO. 12-49 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TEMECULA ESTABLISHING THE APPROPRIATIONS LIMIT FOR FISCAL YEAR 2012-13 26.4 The Successor Agency to the Temecula Redevelopment Agency adopt a resolution entitled: The motion was made by Director Naggar; it was seconded by Director Comerchero; and voice vote reflected unanimous approval. (5-0-0) RESOLUTION NO. SARDA 12-13 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE SUCCESSOR AGENCY TO THE TEMECULA REDEVELOPMENT AGENCY ADOPTING THE FISCAL YEAR 2012-13 ANNUAL OPERATING BUDGET AND ESTABLISHING CONTROLS ON CHANGES IN APPROPRIATIONS Mayor Washington adjourned the SARDA meeting and reconvened the regular City Council Meeting at 8:57 P.M. 9 CITY COUNCIL BUSINESS 27 Amendment to the Stormwater/Urban Runoff Management and Discharge Controls Ordinance (Water Quality Ordinance) - Approved staff recommendation (5-0-0) The motion was made by Director Naggar; it was seconded by Director Comerchero, and voice vote reflected unanimous approval. RECOMMENDATION: 27.1 Introduce and read by title only an ordinance entitled: ORDINANCE NO. 12-05 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF TEMECULA AMENDING CHAPTER 8.28 OF THE TEMECULA MUNICIPAL CODE RELATING TO STORM WATER AND URBAN RUNOFF MANAGEMENT AND DISCHARGE CONTROL, AND AUTHORIZING THE DIRECTOR OF PUBLIC WORKS/CITY ENGINEER TO PREPARE A MANUAL SETTING FORTH THE ADMINISTRATIVE RULES, PROCEDURES, AND REQUIREMENTS NECESSARY TO IMPLEMENT THIS ORDINANCE 27.2 Authorize the City Attorney to prepare and submit a `Certified Statement of Adequate Legal Authority' to the San Diego Regional Water Quality Control Board certifying that the City's Water Quality Ordinance has adequate legal authority to ensure full compliance with the new NPDES MS4 permit. CITY MANAGER REPORT CITY ATTORNEY REPORT With respect to the Closed Session item, City Attorney Thorson advised that there was no action to report. ADJOURNMENT At 9:03 P.M., the City Council meeting was formally adjourned to Tuesday, June 26, 2012, at 5:30 PM, for a Closed Session, with regular session commencing at 7:00 PM, City Council Chambers, 41000 Main Street, Temecula, California. ATTEST: Susan W. Jones, MMC City Clerk [SEAL] 10 Chuck Washington, Mayor Item No. 3 Approvals City Attorney Director of Finance City Manager )gPf CITY OF TEMECULA AGENDA REPORT TO: City Manager/City Council FROM: Genie Wilson, Director of Finance DATE: June 26, 2012 SUBJECT: List of Demands PREPARED BY: Pascale Brown, Accounting Manager Jada Shafe, Accounting Specialist RECOMMENDATION: Adopt a resolution entitled: RESOLUTION NO. 12- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TEMECULA ALLOWING CERTAIN CLAIMS AND DEMANDS AS SET FORTH IN EXHIBIT A BACKGROUND: All claims and demands are reported and summarized for review and approval by the City Council on a routine basis at each City Council meeting. The attached claims represent the paid claims and demands since the last City Council meeting. FISCAL IMPACT: All claims and demands were paid from appropriated funds or authorized resources of the City and have been recorded in accordance with the City's policies and procedures. ATTACHMENTS: 1. Resolution 2. List of Demands RESOLUTION NO. 12- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TEMECULA ALLOWING CERTAIN CLAIMS AND DEMANDS AS SET FORTH IN EXHIBIT A THE CITY COUNCIL OF THE CITY OF TEMECULA DOES HEREBY RESOLVE AS FOLLOWS: Section 1. That the following claims and demands as set forth in Exhibit A, on file in the office of the City Clerk, has been reviewed by the City Manager's Office and that the same are hereby allowed in the amount of $3,329,673.53. Section 2. The City Clerk shall certify the adoption of this resolution. PASSED, APPROVED, AND ADOPTED by the City Council of the City of Temecula this 26th day of June 2012. Chuck Washington, Mayor ATTEST: Susan W. Jones, MMC City Clerk [SEAL] STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ) ss CITY OF TEMECULA ) I, Susan W. Jones, MMC, City Clerk of the City of Temecula, do hereby certify that the foregoing Resolution No. 12- was duly and regularly adopted by the City Council of the City of Temecula at a meeting thereof held on the 26th day of June 2012, by the following vote: AYES: COUNCIL MEMBERS: NOES: COUNCIL MEMBERS: ABSENT: COUNCIL MEMBERS: ABSTAIN: COUNCIL MEMBERS: Susan W. Jones, MMC City Clerk CITY OF TEMECULA LIST OF DEMANDS 05/31/2012 TOTAL CHECK RUN $ 1,107,695.53 06/07/2012 TOTAL CHECK RUN 1,796,194.86 06/07/2012 TOTAL PAYROLL RUN: 425,783.14 TOTAL LIST OF DEMANDS FOR 06/26/2012 COUNCIL MEETING: $ 3,329,673.53 DISBURSEMENTS BY FUND: CHECKS: 001 GENERAL FUND $ 411,941.89 140 COMMUNITY DEV BLOCK GRANT 7,878.00 165 SARDA AFFORDABLE HOUSING 19,480.05 170 MEASURE A FUND 9.17 190 TEMECULA COMMUNITY SERVICES DISTRICT 208,806.26 192 TCSD SERVICE LEVEL B 332.95 194 TCSD SERVICE LEVEL D 1,118.64 195 TCSD SERVICE LEVEL R 316.98 196 TCSD SERVICE LEVEL "L" LAKE PARK MAINT. 6,160.44 197 TEMECULA LIBRARY FUND 9,556.97 210 CAPITAL IMPROVEMENT PROJECTS FUND 1,771,070.32 300 INSURANCE FUND 13,624.29 320 INFORMATION TECHNOLOGY 62,783.64 330 SUPPORT SERVICES 3,998.65 340 FACILITIES 27,993.75 395 2011 FINANCING LEASE 2001 & 2008 COPS 343,658.13 472 CFD 01-2 HARVESTON A&B DEBT SERVICE 6,343.50 501 SERVICE LEVEL"C"ZONE 1 SADDLEWOOD 116.98 502 SERVICE LEVEL"C"ZONE 2 WINCHESTER CREEK 114.79 503 SERVICE LEVEL"C"ZONE 3 RANCHO HIGHLANDS 129.62 504 SERVICE LEVEL"C"ZONE 4 THE VINEYARDS 32.43 505 SERVICE LEVEL"C"ZONE 5 SIGNET SERIES 214.27 506 SERVICE LEVEL"C"ZONE 6 WOODCREST COUNTRY 43.41 507 SERVICE LEVEL"C"ZONE 7 RIDGEVIEW 73.07 508 SERVICE LEVEL"C"ZONE 8 VILLAGE GROVE 398.54 509 SERVICE LEVEL"C"ZONE 9 RANCHO SOLANA 23.16 510 SERVICE LEVEL"C"ZONE 10 MARTINIQUE 30.73 511 SERVICE LEVEL"C"ZONE 11 MEADOWVIEW 27.22 512 SERVICE LEVEL"C"ZONE 12 VINTAGE HILLS 311.43 513 SERVICE LEVEL"C"ZONE 13 PRESLEY DEVELOP. 184.25 514 SERVICE LEVEL"C"ZONE 14 MORRISON HOMES 82.24 515 SERVICE LEVEL"C"ZONE 15 BARCLAY ESTATES 60.79 516 SERVICE LEVEL"C"ZONE 16 TRADEWINDS 79.45 517 SERVICE LEVEL"C"ZONE 17 MONTE VISTA 24.60 518 SERVICE LEVEL"C"ZONE 18 TEMEKU HILLS 262.99 519 SERVICE LEVEL"C"ZONE 19 CHANTEMAR 116.85 520 SERVICE LEVEL"C"ZONE 20 CROWNE HILL 378.30 521 SERVICE LEVEL"C"ZONE 21 VAIL RANCH 481.57 522 SERVICE LEVEL"C"ZONE 22 SUTTON PLACE 30.64 523 SERVICE LEVEL"C"ZONE 23 PHEASENT RUN 29.83 524 SERVICE LEVEL"C"ZONE 24 HARVESTON 335.93 525 SERVICE LEVEL"C"ZONE 25 SERENA HILLS 60.76 526 SERVICE LEVEL"C"ZONE 26 GALLERYTRADITION 26.14 527 SERVICE LEVEL"C"ZONE 27 AVONDALE 32.15 528 SERVICE LEVEL"C"ZONE 28 WOLF CREEK 458.57 529 SERVICE LEVEL"C"ZONE 29 GALLERY PORTRAIT 4.47 700 CERBT CALIFORNIA EE RETIREE-GASB45 4,651.58 $ 2,903,890.39 CITY OF TEMECULA LIST OF DEMANDS 001 GENERAL FUND $ 240,235.38 165 SARDA AFFORDABLE HOUSING 11,586.86 190 TEMECULA COMMUNITY SERVICES DISTRICT 108,814.83 192 TCSD SERVICE LEVEL B 365.89 194 TCSD SERVICE LEVEL D 1,610.60 196 TCSD SERVICE LEVEL "L" LAKE PARK MAINT. 966.46 197 TEMECULA LIBRARY FUND 1,233.84 300 INSURANCE FUND 1,455.13 320 INFORMATION TECHNOLOGY 19,181.24 330 SUPPORT SERVICES 5,925.00 340 FACILITIES 11,435.06 501 SERVICE LEVEL"C"ZONE 1 SADDLEWOOD 78.99 502 SERVICE LEVEL"C"ZONE 2 WINCHESTER CREEK 53.00 503 SERVICE LEVEL"C"ZONE 3 RANCHO HIGHLANDS 62.73 504 SERVICE LEVEL"C"ZONE 4 THE VINEYARDS 11.51 505 SERVICE LEVEL"C"ZONE 5 SIGNET SERIES 127.52 506 SERVICE LEVEL"C"ZONE 6 WOODCREST COUNTRY 23.19 507 SERVICE LEVEL"C"ZONE 7 RIDGEVIEW 32.74 508 SERVICE LEVEL"C"ZONE 8 VILLAGE GROVE 216.62 509 SERVICE LEVEL"C"ZONE 9 RANCHO SOLANA 1.72 510 SERVICE LEVEL"C"ZONE 10 MARTINIQUE 9.82 511 SERVICE LEVEL"C"ZONE 11 MEADOWVIEW 5.98 512 SERVICE LEVEL"C"ZONE 12 VINTAGE HILLS 144.52 513 SERVICE LEVEL"C"ZONE 13 PRESLEY DEVELOP. 30.72 514 SERVICE LEVEL"C"ZONE 14 MORRISON HOMES 17.74 515 SERVICE LEVEL"C"ZONE 15 BARCLAY ESTATES 15.57 516 SERVICE LEVEL"C"ZONE 16 TRADEWINDS 36.13 517 SERVICE LEVEL"C"ZONE 17 MONTE VISTA 2.97 518 SERVICE LEVEL"C"ZONE 18 TEMEKU HILLS 133.91 519 SERVICE LEVEL"C"ZONE 19 CHANTEMAR 71.56 520 SERVICE LEVEL"C"ZONE 20 CROWNE HILL 194.07 521 SERVICE LEVEL"C"ZONE 21 VAIL RANCH 328.70 522 SERVICE LEVEL"C"ZONE 22 SUTTON PLACE 8.16 523 SERVICE LEVEL"C"ZONE 23 PHEASENT RUN 8.64 524 SERVICE LEVEL"C"ZONE 24 HARVESTON 184.85 525 SERVICE LEVEL"C"ZONE 25 SERENA HILLS 59.63 526 SERVICE LEVEL"C"ZONE 26 GALLERYTRADITION 2.71 527 SERVICE LEVEL"C"ZONE 27 AVONDALE 8.64 528 SERVICE LEVEL"C"ZONE 28 WOLF CREEK 272.44 529 SERVICE LEVEL"C"ZONE 29 GALLERY PORTRAIT 4.73 700 CERBT CALIFORNIA EE RETIREE-GASB45 20,823.34 425,783.14 TOTAL BY FUND: $ 3,329,673.53 apChkLst Final Check List Page: 1 05/31/2012 5:17:52PM CITY OF TEMECULA Bank : union UNION BANK OF CALIFORNIA Check # Date Vendor Description Amount Paid Check Total 1930 05/31/2012 014685 COMPASS BANK 2011 refunding '01 &'08 COP D/S 343,658.13 343,658.13 99926 05/25/2012 014874 ARASGA, FERDINAND refund:basketball skills interm 2500.106 40.00 40.00 99927 05/25/2012 014875 FONDA, ERWIN refund:Hondo book 21.00 21.00 99928 05/25/2012 014876 GREEN, RICHARD refund:tiny tots basketball 2300.106 20.00 20.00 99929 05/25/2012 014877 MCCREEDY, LOUISE refund:The Mercedes coffin book 25.95 25.95 99930 05/25/2012 014878 MOMENI, JO ANN refund:Senior excursion 4100.104 12.00 12.00 99931 05/25/2012 014879 NASH, SARAH refund:The Lightning Thief book 17.99 17.99 99932 05/25/2012 014880 NEEDHAM, CHRIS refund:picnic rental:Pala Comm Park 55.00 55.00 99933 05/25/2012 014881 NICKELL, ERIN refund:Exploring world of bks & art 70.00 70.00 99934 05/25/2012 014882 PERSKY, ALIA refund:basketball skills interm 2500.106 40.00 40.00 99935 05/25/2012 014883 PORTEGIES, BETTY refund:Senior excursion 4100.104 12.00 12.00 99936 05/25/2012 011706 QUINN, AMY refund:Yes you can draw & paint 95.00 95.00 99937 05/25/2012 014884 RILEY, MARCIA refund:tiny tots basketball 2300.106 20.00 20.00 99938 05/25/2012 009332 SCHREINER, JENNIFER refund:Lego robot chain reaction 125.00 125.00 152209 05/31/2012 005068 ADKISSON, CANDICE Reimb:High Hopes Showcase 5/18 150.00 150.00 152210 05/31/2012 008714 ALPHA CORP Software license:agenda's to go 2,994.00 2,994.00 152211 05/31/2012 004623 AQUA SOURCE INC repair pool pump: tem elem school 494.92 494.92 152212 05/31/2012 011954 BAKER & TAYLOR INC book purchase:library 6.49 6.49 Pagel apChkLst Final Check List Page: 2 05/31/2012 5:17:52PM CITY OF TEMECULA Bank : union UNION BANK OF CALIFORNIA (Continued) Check # Date Vendor Description Amount Paid Check Total 152213 05/31/2012 004205 BALLET FOLKLORICO TCSD Instructor Eamings 280.00 280.00 152214 05/31/2012 008868 BANK OF SACRAMENTO Ret/escrw2893-160:RJ Noble -Marg Rd 38,817.44 38,81744 152215 05/31/2012 002377 BEST BUY COMPANY INC ee computer purchase prgm:D. Hoof 920.32 920.32 152216 05/31/2012 004040 BIG FOOT GRAPHICS TCSD instructor earnings 525.00 525.00 152217 05/31/2012 014284 BLAKELY'S TRUCK SERVICE VEH REPAIR & MAINT:PW MAINT 51.16 VEH REPAIR & MAINT:PW MAINT 171.45 VEH REPAIR & MAINT:PW MAINT 435.63 658.24 152218 05/31/2012 008605 BONTERRA CONSULTING 152219 05/31/2012 014329 BOOK WHOLESALERS, INC 152220 05/31/2012 014299 BOOKS ON TAPE 3/9-4/13 CONSULT SRVCS:RRSP DESILTING Credit:ineligible reimb chrgs/rrsp BOOKS: LIBRARY BOOKS: LIBRARY BOOKS: LIBRARY BOOKS: LIBRARY BOOKS: LIBRARY BOOKS: LIBRARY BOOKS: LIBRARY BOOKS: LIBRARY BOOKS: LIBRARY BOOKS: LIBRARY BOOKS: LIBRARY BOOKS: LIBRARY BOOKS: LIBRARY BOOKS: LIBRARY BOOKS: LIBRARY BOOKS XX9062:LIBRARY BOOKS XX5391:LIBRARY BOOKS XX8717:LIBRARY BOOKS XX9437:LIBRARY 152221 05/31/2012 014888 BROWN, STEVE refund:overpmt on permit:B12-0201 152222 05/31/2012 014718 BURT, KRISTA A. tcsd instructor eamings 152223 05/31/2012 006908 C C & COMPANY INC Entertainment:movie pgrm 6/8 Entertainment:concerts prgm Jun' 12 2,511.60 -17.25 2,494.35 65.39 45.55 74.96 255.11 342.04 86.21 109.20 83.34 84.74 122.99 144.19 83.78 13.24 27.14 11.95 24.24 60.61 24.24 32.33 372.59 1,549.83 141.42 372.59 70.00 70.00 125.00 500.00 625.00 Page2 apChkLst Final Check List Page: 3 05/31/2012 5:17:52PM CITY OF TEMECULA Bank : union UNION BANK OF CALIFORNIA (Continued) Check # Date Vendor 152224 05/31/2012 004462 C D W GOVERNMENT INC Description Amount Paid Check Total Computer mounts:library computers 415.80 Fortinet fire wall hard drives:info tech 2,201.88 HD network camera:info tech 930.30 Misc supplies:info tech 442.86 Misc supplies:info tech 106.34 Misc supplies:info tech 501.36 152225 05/31/2012 003138 CAL MAT PW PATCH TRUCK ASPHALT 447.83 MATERIALS PW PATCH TRUCK ASPHALT MATERIAL: 189.10 PW PATCH TRUCK ASPHALT MATERIAL: 264.94 4,598.54 PW PATCH TRUCK ASPHALT MATERIAL: 450.07 1,351.94 152226 05/31/2012 001054 CALIF BUILDING OFFICIALS CA Bldg Code 6/28 S.Long/M.Ching 300.00 300.00 152227 05/31/2012 004248 CALIF DEPT OF APR FINGERPRINTING SRVCS:POLICE 3,158.00 3,158.00 JUSTICE-ACCTING 152228 05/31/2012 001264 COSTCO WHOLESALE Misc. supplies:F/D Date Night 5/18 510.19 Outdoor heaters:Conference Center 1,245.34 1,755.53 152229 05/31/2012 010650 CRAFTSMEN PLUMBING & plumbing srvcs: theater&tms pool 335.00 HVAC INC install hvac ignitor: crc pool heater 274.60 plumbing srvcs:crc pool pump room 891.17 152230 05/31/2012 013621 CRAMER, AMY L. TCSD Instructor Eamings 152231 05/31/2012 001393 DATA TICKET, INC. Apr parking citation processing:police 152232 05/31/2012 002990 DAVID TURCH & ASSOCIATES Apr -May legislative consulting srvcs:cm 152233 05/31/2012 003945 DIAMOND ENVIRONMENTAL Portable restroom: Vail Ranch Park SRVCS Portable restroom: Veterans Park Portable restroom: Long Canyon Park Portable restroom: Riverton Park 152234 05/31/2012 014207 ENTERPRISE ELECTRIC Display case lighting: Civic Center DATACOM 152235 05/31/2012 001056 EXCEL LANDSCAPE landscape maint: town square park 152236 05/31/2012 000165 FEDERAL EXPRESS INC 4/10-5/3 Express mail services 152237 05/31/2012 011922 FIRST AMERICAN CORELOGIC Apr web database subscription:code enf. INC 2,880.00 942.94 1,500.77 2,880.00 942.94 7,000.00 7,000.00 52.78 52.78 52.78 52.78 11,767.00 1,230.00 211.12 11,767.00 1,230.00 334.82 334.82 5.50 5.50 Pages apChkLst Final Check List Page: 4 05/31/2012 5:17:52PM CITY OF TEMECULA Bank : union UNION BANK OF CALIFORNIA (Continued) Check # Date Vendor Description Amount Paid Check Total 152238 05/31/2012 003347 FIRST BANKCARD CENTER 006952 PAYPAL AA Verisign Pay0ow Pro Transaction 222.40 014750 INFOGROUP AA online subscr: Econ Dev 166.67 000515 TEMECULA VALLEY CHAMBER AA state/city: A.Adams 40.00 OF 007282 AMAZON.COM, INC AA DVD'S FOR LIBRARY COLLECTION 15.49 007282 AMAZON.COM, INC AA DVD'S FOR LIBRARY COLLECTION 90.66 014749 RASTA TACO, INC. AA Deposit:Cinco de Mayo festival 200.00 014749 RASTA TACO, INC. AA rfrshmnts:Cinco de Mayo festival 494.25 1,229.47 152239 05/31/2012 009097 FULL COMPASS SYSTEMS MISC SUPPLIES: THEATER 308.92 MISC SUPPLIES: THEATER 264.23 573.15 152240 05/31/2012 010028 G M BUSINESS INTERIORS Chairs:police mall storefront office 1,269.70 1,269.70 152241 05/31/2012 012813 GARDNER MIDDLE SCHOOL Entertainment: Winterfest 2011 125.00 125.00 BAND 152242 05/31/2012 014234 GEARS 2 ROBOTS, LLC TCSD instructor earnings 472.50 472.50 152243 05/31/2012 011376 GENEVA SCIENTIFIC INC message ctr with post: hary lake park 508.99 508.99 152244 05/31/2012 005405 GILLILAND, ROBIN Reimb:baggage/sister city 4/9-19 300.00 300.00 152245 05/31/2012 014634 GREATWESTERN PARK replace water slide: crc pool 31,173.16 31,173.16 152246 05/31/2012 014633 GREEN VALLEY LANDSCAPE Irrigation relocation srvcs:french vly 3,682.00 3,682.00 152247 05/31/2012 000186 HANKS HARDWARE INC Misc hardware supplies:crc 184.78 184.78 152248 05/31/2012 001135 HEALTH POINTE MEDICAL Emp industrial care srvcs:HR 65.00 GROUP INC Emp industrial care srvcs:HR 200.00 265.00 152249 05/31/2012 014847 HOCK, NICOLE Petting zoo/pony rides:western days 5/18 600.00 600.00 152250 05/31/2012 003198 HOME DEPOT, THE MISC SUPPLIES:OLD TOWN 811.45 811.45 BOARDWALK 152251 05/31/2012 007618 HOT AUGUST NIGHT Performance:summer concert series 6/7 1,800.00 1,800.00 Page4 apChkLst Final Check List Page: 5 05/31/2012 5:17:52PM CITY OF TEMECULA Bank : union UNION BANK OF CALIFORNIA (Continued) Check # Date Vendor Description Amount Paid Check Total 152252 05/31/2012 004217 HYDROTEK COMPANY EQUIP REPAIR & MAINT:PW MAINT 401.18 401.18 152253 05/31/2012 013420 INGRAM LIBRARY SERVICES BOOKS:LIBRARY 498.60 INC BOOKS:LIBRARY 67.23 565.83 152254 05/31/2012 006914 INNOVATIVE DOCUMENT PAPER & INK SUPPLIES:SUPPORT 191.54 191.54 SOLUTIONS SRVCS 152255 05/31/2012 001407 INTER VALLEY POOL SUPPLY Pool chemicals:citywide pools 1,318.50 1,318.50 INC 152256 05/31/2012 003571 INTL ASSN OF PLUMBING AND Publications:building & safety dept 269.34 269.34 152257 05/31/2012 003296 INTL CODE COUNCIL Publication:building & safety dept 41.27 41.27 152258 05/31/2012 003266 IRON MOUNTAIN OFFSITE Apr Offsite Media Storage: Records 475.21 475.21 152259 05/31/2012 001186 IRWIN, JOHN TCSD instructor earnings 106.40 TCSD instructor earnings 313.60 420.00 152260 05/31/2012 000203 JOBS AVAILABLE INC Recruitment advertising:HR 5/22 192.50 192.50 152261 05/31/2012 004905 LIEBERT, CASSIDY & Apr HR legal svcs for TE060-01 480.00 480.00 WHITMORE 152262 05/31/2012 014846 LINAYAO, CECELIA R. Entertainment:street painting fest 500.00 500.00 152263 05/31/2012 014228 LSK, LLC MAY FACILITY LEASE 4,714.00 4,714.00 PMT:HARVESTON CENTER 152264 05/31/2012 004813 M & J PAUL ENTERPRISES INC Jolly jump rental: New Year's Eve 2011 225.00 225.00 152265 05/31/2012 011179 MC MILLIN REDHAWK LLC TCSD Instructor Eamings 455.00 TCSD Instructor Eamings 175.00 TCSD Instructor Eamings 105.00 TCSD Instructor Eamings 196.00 931.00 152266 05/31/2012 006571 MELODYS AD WORKS INC. Reimbursement:marketing expenses 37.30 37.30 152267 05/31/2012 005887 MOFFATT & NICHOL 2/26-4/28 eng/const srvcs:french vly 3,001.00 3,001.00 ENGINEERS 152268 05/31/2012 014243 MULHOLLAND LAND COMPANY Refund:Service Level R 316.98 316.98 Pages apChkLst Final Check List Page: 6 05/31/2012 5:17:52PM CITY OF TEMECULA Bank : union UNION BANK OF CALIFORNIA (Continued) Check # Date Vendor Description Amount Paid Check Total 152269 05/31/2012 001986 MUZAK LLC Jun dish network programing:foc 123.18 123.18 152270 05/31/2012 013375 MYERS-RUSSO, ERICA TCSD Instructor Eamings 75.60 TCSD Instructor Eamings 138.60 TCSD Instructor Eamings 294.00 TCSD Instructor Eamings 336.00 TCSD Instructor Eamings 2940 TCSD Instructor Eamings 105.00 TCSD Instructor Eamings 64.00 1,042.60 152271 05/31/2012 002925 NAPA AUTO PARTS Auto parts & misc supplies: Medics 49.57 Veh repair & maint: Sta 92 29.06 78.63 152272 05/31/2012 000727 NATIONAL FIRE PROTECTION Codes & Stds 6/11 Elsa Wigle 275.00 275.00 ASSN 152273 05/31/2012 012893 NEWMAN, KAREN Reimb/supplies:High Hopes Showcase 152.70 152.70 152274 05/31/2012 002139 NORTH COUNTY TIMES Apr advertising:theater 1,088.64 1,088.64 152275 05/31/2012 000249 PETTY CASH Petty Cash Reimbursement 347.66 347.66 152276 05/31/2012 004519 PYRO SPECTACULARS INC Deposit/2012 fireworks display:4th of 18,000.00 18,000.00 152277 05/31/2012 004457 R J NOBLE COMPANY Apr const:pavement rehab marg rd 96,140.00 5% retention contract requirement:marg -28,135.21 68,004.79 152278 05/31/2012 002072 RANCHO CALIF WATER RCWD reimb:madison ave transmission 500,000.00 500,000.00 DIST-FEES 152279 05/31/2012 009725 RAZAVI, MANDIS TCSD Instructor Eamings 470.40 470.40 152280 05/31/2012 000418 RIVERSIDE CO CLERK & Apr '12 recording fees:PW 4.00 4.00 RECORDER 152281 05/31/2012 014347 ROBERTS, PATRICIA G. TCSD Instructor Eamings 175.00 175.00 152282 05/31/2012 012251 ROTH, DONALD J. TCSD Instructor Eamings 420.00 TCSD Instructor Eamings 84.00 504.00 152283 05/31/2012 000815 ROWLEY, CATHY TCSD Instructor Eamings 196.00 TCSD Instructor Eamings 168.00 TCSD Instructor Eamings 140.00 504.00 Pages apChkLst Final Check List Page: 7 05/31/2012 5:17:52PM CITY OF TEMECULA Bank : union UNION BANK OF CALIFORNIA (Continued) Check # Date Vendor Description Amount Paid Check Total 152284 05/31/2012 002226 RUSSO, MARY ANNE TCSD Instructor Earnings 385.00 TCSD Instructor Earnings 1,078.00 1,463.00 152285 05/31/2012 007345 SAN DIEGO STATE U 5/1/12-4/30/13 tower lease:info tech 6,598.02 6,598.02 FOUN DATION 152286 05/31/2012 000645 SMART & FINAL INC Misc supplies:public works 128.98 128.98 152287 05/31/2012 000537 SO CALIF EDISON May 2-28-904-7706:32329 Overland Trl 130.61 May 2-21-981-4720:30153 Tem pkwy tpp 32.11 May 2-29-657-2787:41638 Winchester 22.72 May 2-31-536-348141902 Main St 220.56 May 2-31-536-3655:41904 Main St 938.49 May 2-31-912-7494:28690 Mercedes 521.87 May 2-18-937-3152:28314 Mercedes 689.85 May 2-19-171-8568:28300 Mercedes 64.80 2,621.01 152288 05/31/2012 005786 SPRINT Mar 26 -Apr 25 cellular usage/equip 8,273.28 8,273.28 152289 05/31/2012 014887 TAKAVORIAN, MARY Reimb:Youth Advisory Council 6/15 552.50 552.50 152290 05/31/2012 010191 TAYLOR, JUDY Entertainment: Western Days 5/20 500.00 500.00 152291 05/31/2012 010493 TEMECULATOINNE CENTER May lease payment:pd mall office 1,458.33 1,458.33 ASSOC LP 152292 05/31/2012 004261 VERIZON May xxx-5072 general usage 1,392.84 Apr xxx-0074 general usage 2,525.06 3,917.90 152293 05/31/2012 004789 VERIZON May Internet svcs:Business Incubator 61.52 May Internet svcs:Harveston Ctr 81.90 143.42 152294 05/31/2012 014486 VERIZON WIRELESS 4/16-5/15 gen usage:IT,PD,CM,council 478.93 478.93 152295 05/31/2012 004567 WITCHER ELECTRIC raise lightfxtures:ronald reagan 720.00 electrical srvcs: harveston lake park 1,520.00 2,240.00 152296 05/31/2012 000348 ZIGLER, GAIL Reimb:City Council budget wrkshp 5/23 125.88 125.88 Grand total for UNION BANK OF CALIFORNIA: 1,107,695.53 Page:7 apChkLst Final Check List Page: 8 05/31/2012 5:17:52PM CITY OF TEMECULA 102 checks in this report. Grand Total All Checks. 1,107,695.53 Pages apChkLst Final Check List Page: 1 06/07/2012 4:36:56PM CITY OF TEMECULA Bank : union UNION BANK OF CALIFORNIA Check # Date Vendor 1931 06/06/2012 000166 FIRST AMERICAN TITLE COMPANY 1932 06/07/2012 000642 TEMECULA CITY FLEXIBLE 1933 06/07/2012 000246 PERS (EMPLOYEES' RETIREMENT) 1934 06/07/2012 001065 NATIONWIDE RETIREMENT SOLUTION 1935 06/07/2012 000283 INSTATAX (IRS) 1936 06/07/2012 000444 INSTATAX (EDD) 1937 06/07/2012 010349 CALIF DEPT OF CHILD SUPPORT 1938 06/07/2012 000389 NATIONWIDE RETIREMENT SOLUTION 1939 06/07/2012 000245 PERS-HEALTH INSUR PREMIUM Description Amount Paid Check Total Murr.Crk Bridge/Ovdnd land acquisition 842,796.16 842,796.16 Child Care Reimbursement Payment 7,865.38 7,865.38 PERS ER Paid Member Contr Payment 132,108.07 132,108.07 Nationwide Retirement Payment 14,914.03 14,914.03 Federal Income Taxes Payment 77,394.71 77,394.71 State Disability Ins Payment 21,876.56 21,876.56 Support Payment 738.45 738.45 OBRA- Project Retirement Payment 3,416.02 3,416.02 PERS Health Admin Cost Payment 87,591.57 Blue Shield HMO Payment 0.00 87,591.57 152297 06/05/2012 014889 HOOF, DALE ee computer purchase prgm 920.32 920.32 152298 06/07/2012 014892 A AND S ENGINEERING refund:eng grad dep:LD11-038GR 3,840.00 3,840.00 152299 06/07/2012 003552 A F L A C AFLAC Cancer Payment 3,134.96 3,134.96 152300 06/07/2012 014807 A PLUS FITNESS SERVICES, YMCA equip evaluation:csd 300.00 300.00 LLC 152301 06/07/2012 013367 ACTIVE MICRO INC MISC TOOLS & EQUIP:PW TRAFFIC 528.98 528.98 152302 06/07/2012 014903 ADVANCED EXTRICATION Veh hybrid tech 7/23-24 BrooksNVilliams 498.00 498.00 TECH 152303 06/07/2012 014891 ALL AMERICAN refund:eng grad dep:LD06-170GR 995.00 995.00 152304 06/07/2012 006915 ALLIES PARTY EQUIPMENT Party rental equip:NLC Conf 6/7 1,053.83 1,053.83 Pagel apChkLst Final Check List Page: 2 06/07/2012 4:36:56PM CITY OF TEMECULA Bank : union UNION BANK OF CALIFORNIA (Continued) Check # Date Vendor 152305 06/07/2012 012943 ALPHA MECHANICAL SERVICE INC 152306 06/07/2012 013015 ALWAYS RELIABLE BACKFLOW Description Amount Paid Check Total replace outdoor condensing unit:t.mus. 2,207.04 install compressors: history museum 2,439.00 hvac inspection:margarita YMCA 385.00 5,031.04 backflow test: wolf creek park 25.00 backflow test: barclay estates slope 25.00 backflow test: civic center 50.00 100.00 152307 06/07/2012 004240 AMERICAN FORENSIC NURSES Phlebotomy srvcs:police 211.90 (AFN) Phlebotomy srvcs:police 453.80 665.70 152308 06/07/2012 001323 ARROWHEAD WATER INC Bottled wtr svcs @ mpsc 132.95 Bottled wtr svcs @ c. museum 3246 Bottled wtr svcs @ tcc 20.94 Bottled wtr svcs @ t. museum 19.11 Bottled wtr svcs @ crc 100.86 BOTTLED WTR SVCS © SKATE PARK 645 BOTTLED WTR SVCS © PBSP 39.69 BOTTLED WTR SVCS © AQUATICS 645 BOTTLED WTR SVCS © TES POOL 63.49 Bottled wtr svcs © dog house prgm 54.80 Bottled wtr svcs © library 79.90 Bottled wtr svcs © theater 36.45 Bottled wtr svcs @ foc 204.99 Bottled wtr svcs © council 38.91 837.45 152309 06/07/2012 013976 ARTIGIANO CONSTRUCTION refund:eng grad dep:LD06-199GR 995.00 995.00 INC. 152310 06/07/2012 011438 BAKER, BLYTHE EDEN Mar -May '12 High Hopes dance instructor 720.00 720.00 152311 06/07/2012 002541 BECKER CONSTRUCTION Channel repairs citywide 9,620.00 9,620.00 SRVS INC 152312 06/07/2012 004262 BIO-TOX LABORATORIES Apr blood alcohol analysis:police 835.76 Apr blood alcohol analysis:police 808.60 1,644.36 152313 06/07/2012 014899 BJAZEVICH, SARA refund:sec dep:rm rental:Harveston 150.00 150.00 152314 06/07/2012 014900 BOW, VERONICA refund:100 days in photographs bk 35.00 35.00 152315 06/07/2012 014825 BREWER, ELSA Performance: youth art exhibit 6/8 200.00 200.00 152316 06/07/2012 004126 BROOKS, JIM Entertainment: Western Days 5/19-20 650.00 650.00 Page2 apChkLst Final Check List Page: 3 06/07/2012 4:36:56PM CITY OF TEMECULA Bank : union UNION BANK OF CALIFORNIA (Continued) Check # Date Vendor 152317 06/07/2012 010939 CALIF DEPT OF INDUSTRIAL Description Amount Paid Check Total pool slide inspection @ crc 5/11 1,121.25 pool slide inspection @ crc 5/8 487.50 1,608.75 152318 06/07/2012 000486 CALIF MUNI REVENUE & TAX '12 mbrshp dues:P. Espinoza 60.00 60.00 ASSOC 152319 06/07/2012 000131 CARL WARREN & COMPANY Apr liability claims mgmnt srvcs:finance 4,080.34 4,080.34 INC 152320 06/07/2012 007592 CAROL'S RESTAURANT AT Refreshments:NLC Conf 6/8 4,715.63 4,715.63 152321 06/07/2012 014840 CASH, KELLY refund:sec dep:rm rental:Harveston 50.00 50.00 152322 06/07/2012 014285 CAUGHEY, JAMES Refund:deposit/mendez res LD07091GR 995.00 995.00 152323 06/07/2012 014726 CHAPTER 13 STANDING SUPPORT PMT 182.77 182.77 TRUSTEE 152324 06/07/2012 014901 CHAVEZ, JARRAD refund:sec dep:rm rental:Harveston 200.00 200.00 152325 06/07/2012 004405 COMMUNITY HEALTH Community Health Charities Payment 51.00 51.00 CHARITIES 152326 06/07/2012 014787 CURRY, TOM R. Performance:summer concert 6/14 1,500.00 1,500.00 152327 06/07/2012 014419 ELLIOTT, MICHAEL G. May inspection srvcs:var Idscp const 3,300.00 3,300.00 152328 06/07/2012 014902 FAITHFUL HOUSE refund:sec dep:rm rental:Harveston 100.00 100.00 152329 06/07/2012 003747 FINE ARTS NETWORK Wedding Singer/Les Sylphide Ballet 5,446.08 5,446.08 152330 06/07/2012 002982 FRANCHISE TAX BOARD SUPPORT PAYMENT 50.00 50.00 152331 06/07/2012 002982 FRANCHISE TAX BOARD CA n/r pmt 330383649 2012 Form 592 35.00 35.00 152332 06/07/2012 014904 FRANCO, JR., MARTIN refund:sec dep:rm rental:Harveston 450.00 450.00 152333 06/07/2012 014890 FUSCOE ENGINEERING- refund:eng grad dep:LD06-144GR 995.00 995.00 152334 06/07/2012 013552 GANDS PRODUCTIONS LLC Country @ the Merc 6/2 770.25 770.25 Pages apChkLst Final Check List Page: 4 06/07/2012 4:36:56PM CITY OF TEMECULA Bank : union UNION BANK OF CALIFORNIA (Continued) Check # Date Vendor Description Amount Paid Check Total 152335 06/07/2012 014725 GARCIA, ANTHONY Entertainment:NLC Conference 6/8 300.00 300.00 152336 06/07/2012 014905 GITTLEMAN, CHERYL refund:sec dep:rm rental:Harveston 200.00 200.00 152337 06/07/2012 009608 GOLDEN VALLEY MUSIC Classics © the Merc May '12 921.90 921.90 SOCIETY 152338 06/07/2012 014168 GOOD LIBATIONS Refreshments:NLC Conf6/7 993.69 993.69 152339 06/07/2012 000175 GOVERNMENT FINANCE Govt Acct, Auditing & Fin Reporting book 167.00 167.00 OFFICERS 152340 06/07/2012 003342 HABITAT FOR HUMANITY Council Community Service Funding 1,000.00 1,000.00 152341 06/07/2012 004479 HAMPTON INN & SUITES htl accommodations:Bluegrass Festival 1,710.10 1,710.10 152342 06/07/2012 014167 H ELIO POWER, INC. refund:permit voided:B12-0502 197.20 197.20 152343 06/07/2012 000194 I C M A RETIREMENT -PLAN I C M A Retirement Trust 457 Payment 7,284.69 7,284.69 303355 152344 06/07/2012 014896 I -DESIGN MULTIMEDIA, INC "Eyes for Lies" trng LG/JM/TJ/MH 6/14 200.00 200.00 152345 06/07/2012 014906 INLAND VALLEY BRIDGE refund:sec dep:rm rental:CRC 150.00 150.00 152346 06/07/2012 013612 INTERNATIONAL CHILI sanction fee: chili cookoff 5/20/12 200.00 200.00 SOCIETY 152347 06/07/2012 014893 INTERNATIONAL RECTIFIER refund:eng grad dep:LD11-081GR 9,348.00 9,348.00 152348 06/07/2012 014897 IRVINE, CITY OF Patrol Bicycle Course 5/29-31 T. Johnson 95.00 95.00 152349 06/07/2012 012883 JACOB'S HOUSE INC Jacob's House Charity Payment 140.00 140.00 152350 06/07/2012 013200 JAROTH INC June pay phones:duck pond,Library,CRC 212.64 212.64 152351 06/07/2012 014907 KAY, KENDRAH refund:sec dep:picnic rental:Harveston 60.00 60.00 152352 06/07/2012 014898 KEETCH, LAVERA G. refund:sec dep:rm rental:Harveston 150.00 150.00 Page4 apChkLst Final Check List Page: 5 06/07/2012 4:36:56PM CITY OF TEMECULA Bank : union UNION BANK OF CALIFORNIA (Continued) Check # Date Vendor Description Amount Paid Check Total 152353 06/07/2012 014908 KLUNDGRESETER, DAVID refund:sec dep:rm rental:Harveston 200.00 200.00 152354 06/07/2012 014910 KUILEMA, YADIRA refund:On gold mountain bk 15.00 15.00 152355 06/07/2012 001085 L N CURTIS & SONS Fire rescue equip supplies 44.70 44.70 152356 06/07/2012 007188 LAERDAL MEDICAL CORP. CPR prgm supplies: Medics 32.33 32.33 152357 06/07/2012 014817 LAPP, JEREMY SCOTT Cabaret @the Merc 5/27 569.80 569.80 152358 06/07/2012 014911 LIFE LINE SCREENING refund:sec dep:rm rental:TCC 150.00 150.00 152359 06/07/2012 004998 LINFIELD SCHOOL Performance:community day 12/10 125.00 125.00 152360 06/07/2012 013022 M & D DEVELOPMENT, LLC refund:eng grad dep:LD07-006GR 5,999.40 5,999.40 152361 06/07/2012 013982 MCI COMM SERVICE May xxx-0346 general usage 30.62 May xxx-0714 gen usage:PD mall alar 31.23 61.85 152362 06/07/2012 003782 MAIN STREET SIGNS MISC SIGNS:PW MAINT MISC SIGNS:PW MAINT MISC SIGNS/REPLACE BOLLARD:PW MP Misc signs:PW Traffic 152363 06/07/2012 000217 MARGARITA OFFICIALS ASSN May officiating srvcs:softball sports 152364 06/07/2012 004307 MARINE BIOCHEMISTS May water maint srvcs:Harv/Duck Pond 152365 06/07/2012 014392 MC COLLOUGH, JILL DENISE May plant rental & maint:library May plant rental & maint:civic ctr 152366 06/07/2012 000944 MCCAIN TRAFFIC SUPPLY INC Conflict monitors:PW Traffic 152367 06/07/2012 006571 MELODYS AD WORKS INC. JUN MARKETING & PROMO SRVCS:OLD TOWN 152368 06/07/2012 003076 MET LIFE INSURANCE MetLife Dental Insurance Payment COMPANY 152369 06/07/2012 009835 MIRACLE PLAYGROUND playground equip parts: pala park SALES INC 409.45 5,629.94 3,650.35 1,878.46 4,968.00 3,900.00 200.00 525.00 10,300.90 4,000.00 11,568.20 4,968.00 3,900.00 725.00 10,300.90 4,000.00 7,093.10 7,093.10 941.00 941.00 Pages apChkLst Final Check List Page: 6 06/07/2012 4:36:56PM CITY OF TEMECULA Bank : union UNION BANK OF CALIFORNIA (Continued) Check # Date Vendor Description Amount Paid Check Total 152370 06/07/2012 006077 N T H GENERATION Commvault software license:info tech 2,035.00 COMPUTING INC 6/5/12-6/4/13 Commvault software 6,200.00 8,235.00 152371 06/07/2012 011410 NIXALITE OF AMERICA INC Window decal:library 44.92 44.92 152372 06/07/2012 009337 NOLTE ASSOCIATES INC Apr eng design srvcs:ped bridge 462.37 462.37 152373 06/07/2012 002139 NORTH COUNTY TIMES Apr advertising: recruitments 2,717.90 2,717.90 152374 06/07/2012 002139 NORTH COUNTY TIMES subscr:t. museum 172-00211088 60.00 60.00 152375 06/07/2012 003964 OFFICE DEPOT BUSINESS SVS City stationery:TCSD 220.88 DIV Credit -City stationery:TCSD -121.01 Credit-Misc office supplies:C.Museum -0.45 99.42 152376 06/07/2012 004473 OLD TOWN TEMECULA Entertainment:Western Days 5/19-20 1,800.00 1,800.00 GUNFIGHTERS 152377 06/07/2012 004473 OLD TOWN TEMECULA Entertainment: N LC Conf 6/7 200.00 200.00 GUNFIGHTERS 152378 06/07/2012 014011 ONSITE ENERGY HVAC sys energy dsgn:crc 2,600.00 2,600.00 CORPORATION 152379 06/07/2012 001171 ORIENTAL TRADING COMPANY Misc supplies:var special events 126.00 126.00 INC 152380 06/07/2012 012100 OUR NICHOLAS FOUNDATION Council Community Service Funding 500.00 Council Community Service Funding 2,000.00 2,500.00 152381 06/07/2012 004538 PAULEY EQUIPMENT Equip repair& maint:csd maint 27.99 27.99 COMPANY 152382 06/07/2012 010501 PC WORLD annual PC Wodd subscr:lnfo Tech 19.97 19.97 152383 06/07/2012 000249 PETTY CASH Mayor's Beach Ball Block Party 1,800.00 1,800.00 152384 06/07/2012 000249 PETTY CASH Petty Cash Reimbursement 268.11 268.11 152385 06/07/2012 010338 POOL & ELECTRICAL pool supplies & chemicals: citywide 273.28 273.28 PRODUCTS INC 152386 06/07/2012 005820 PRE -PAID LEGAL SERVICES PrePaid Legal Services Payment 221.25 221.25 INC Pages apChkLst Final Check List Page: 7 06/07/2012 4:36:56PM CITY OF TEMECULA Bank : union UNION BANK OF CALIFORNIA (Continued) Check # Date Vendor Description Amount Paid Check Total 152387 06/07/2012 014379 PROFESSIONAL IMAGE Street Pole Banner Brackets:eco dev 8,962.11 8,962.11 ADVERTISING 152388 06/07/2012 010652 QUALITY CODE PUBLISHING Municipal code srvcs:city clerk 1,803.42 1,803.42 152389 06/07/2012 003591 RENES COMMERCIAL Weed abatement:city channels 4,750.00 MANAGEMENT Weed abatement:temecula creek 5,375.00 10,125.00 152390 06/07/2012 002110 RENTAL SERVICE EQUIP RENTAL & MAINT:PW MAINT 39.37 CORPORATION EQUIP RENTAL & MAINT:PW MAINT 43.19 82.56 152391 06/07/2012 002412 RICHARDS WATSON & Apr 2012 legal services 67,793.33 67,793.33 GERSHON 152392 06/07/2012 010777 RIVERSIDE CO EXECUTIVE MAY ANIMAL SHELTER PAYMENT 10,549.40 10,54940 OFFICE 152393 06/07/2012 000220 ROBINSON PRINTING & Printing srvcs:job posting brochure 412.14 412.14 CREATIVE 152394 06/07/2012 014423 ROGERS, KEN refund:sec dep:rm rental:Harveston 100.00 100.00 152395 06/07/2012 007582 SAFEGUARD DENTAL & VISION SafeGuard Vision Plan Payment 608.59 608.59 152396 06/07/2012 014711 SAN DIEGO STAGE & Purch & install:crc stage drapery 17,933.50 17,933.50 LIGHTING 152397 06/07/2012 008529 SHERIFFS CIVIL DIV- SUPPORT PAYMENT 100.00 100.00 CENTRAL 152398 06/07/2012 008529 SHERIFFS CIVIL DIV- SUPPORT PAYMENT 100.00 100.00 CENTRAL 152399 06/07/2012 009213 SHERRY BERRY MUSIC Jazz © the Merc 5/24 & 5/31 515.20 515.20 152400 06/07/2012 009746 SIGNS BYTOMORROW reclaimed water signs: var parks 743.99 743.99 152401 06/07/2012 004814 SIMON WONG ENGINEERING APR DSGN:MAIN STREET 495.00 495.00 INC BRIDGE/MURR CREEK 152402 06/07/2012 000645 SMART & FINAL INC Misc supplies:F/D Date Night 5/18 378.40 Misc supplies:recreation program 321.18 MISC SUPPLIES:HIGH HOPES PRGM 433.88 1,133.46 Page:7 apChkLst Final Check List Page: 8 06/07/2012 4:36:56PM CITY OF TEMECULA Bank : union UNION BANK OF CALIFORNIA (Continued) Check # Date Vendor 152404 06/07/2012 000537 SO CALIF EDISON Description Amount Paid Check Total May 2-27-371-8494:42189 Winchester May 2-29-479-2981:31454 Tem pkwy TC 1 May 2-29-974-7899:26953 Ynez LS3 May 2-31-031-2590:28301 Rancho Cal Apr 2-30-520-4414:32781 Tem pkwy LS3 May 2-29-807-1093:28079 Diaz PED May 2-29-807-1226:28077 Diaz PED May 2-31-282-0665:27407 Diaz PED May 2-29-458-7548:32000 Rancho Cal May 2-29-953-8082:31523 Wolf vly rd May 2-34-333-3589:41702 Main St May 2-02-351-4946:Senior Ctr May 2-29-223-8607:42035 2nd St PED May 2-25-393-4681:41951 Moraga Rd May 2-00-397-5042:43200 Bus Pk Dr #1 May 2-14-204-1615:30027 Front st rdio May 2-32-903-8293:41000 Main St May 2-29-933-3831:43230 Bus Pk Dr May 2-31-404-6020:28771 OT Front St May 2-02-502-8077:43210 Bus pk dr B May 2-28-629-0507:30600 Pauba Rd May 2-27-805-3194:42051 Main St May 2-25-350-5119:45602 Redhawk pkwy May 2-31-419-2873:43000 Hwy -395 May 2-29-295-3510:32211 Wolf vly rd May 2-29-224-0173:var Fire Stns May 2-31-536-3226:28690 Mercedes May 2-29-953-8249:46497 Wolf crk dr May 2-30-220-8749:45850 N Wolf crk dr May 2-29-953-8447:31738 Wolf vly rd May 2-29-657-2332:45538 Redwood rd May 2-31-936-3511:46488 Pechanga May 2-29-657-2563:42902 Butterfield May 2-00-397-5067:TCSD svc lev C 28.25 97.64 171.46 39.53 895.42 22.16 22.28 22.54 242.62 24.36 22.19 1,177.32 431.31 495.01 567.47 33.27 11,197.39 1,251.49 1,243.00 310.29 6,118.21 3,352.08 22.76 21.91 785.90 1,526.99 916.75 23.73 399.98 22.03 22.28 43.42 179.08 1,954.24 33,684.36 Pages apChkLst 06/07/2012 4:36:56PM Final Check List CITY OF TEMECULA Page: 9 Bank : union UNION BANK OF CALIFORNIA Check # Date Vendor 152405 06/07/2012 001212 SO CALIF GAS COMPANY 152406 06/07/2012 000519 SOUTH COUNTY PEST CONTROL INC 152410 06/07/2012 007762 STANDARD INSURANCE COMPANY 152411 06/07/2012 012723 STANDARD INSURANCE COMPANY 152412 06/07/2012 014753 STREAMQUICK, INC. 152413 06/07/2012 010773 SWEET LUMPY BBQ LLC 152414 06/07/2012 000305 TARGET BANK BUS CARD SRVCS 152415 06/07/2012 001547 TEAMSTERS LOCAL 911 152416 06/07/2012 014740 TED ENTERPRISES, INC. 152417 06/07/2012 012265 TEMECULA ACE HARDWARE C/O 152418 06/07/2012 010679 TEMECULA AUTO REPAIR/RADIATOR (Continued) Description Amount Paid Check Total May 095-167-7907-2:30650 Pauba Rd May 101-525-1560-6:27415 Enterprise Apr 181-383-8881-6:Museum May 091-085-1632-0:TES Pool Apr 125-244-2108-3:Library Apr 129-535-4236-7:41000 Main St Apr 129-582-9784-3:43230 Bus Pk Dr Apr 133-040-7373-0:Maint Fac Apr 091-024-9300-5:30875 Rancho vista Apr 101-525-0950-0:Comm Ctr Apr 026-671-2909-8:Comm Theater Apr 021-725-0775-4:Senior Ctr May 055-461-2483-4:40135 Village Rd pest control srvcs: Paseo Gallante Park Mandatory Life Insurance Payment Voluntary Supp Life Insurance Payment DEPOSIT-PURCH & INSTALL:STREAM CELL CASE NLC conference lunch 6/8/12 Misc. supplies:csd special events ARTIST HOSPITALITY:THEATER Union Dues Payment May prgs pmt:calle fiesta storm drain Hardware supplies: Sta 92 Hardware supplies: Sta 92 MISC HARDWARE SUPPLIES:CSD MAINZ City vehicle maint: Prevention 152419 06/07/2012 014885 TEMECULA CATERING Refreshments:NLC Conf 6/7 150.54 61.28 25.02 705.18 32.14 484.93 72.54 22.27 738.33 25.83 64.73 87.43 21.78 94.00 8,777.20 800.50 8,078.56 459.90 338.66 46.75 4,682.00 40,153.55 560.88 8.60 404.58 132.48 2,492.00 94.00 8,777.20 800.50 8,078.56 459.90 385.41 4,682.00 40,153.55 974.06 132.48 3,854.25 3,854.25 Page9 apChkLst Final Check List Page: 10 06/07/2012 4:36:56PM CITY OF TEMECULA Bank : union UNION BANK OF CALIFORNIA (Continued) Check # Date Vendor 152420 06/07/2012 001672 TEMECULA DRAIN SERV & PLUMBING 152421 06/07/2012 014909 TEMECULA MURRIETA RESCUE 152422 06/07/2012 011736 TEMECULA TROPHY INC Description Amount Paid Check Total Emerg drain srvc:mpsc CDBG Reimbursement-Emerg Food Prjt RECOGNITION AWARDS:CSD DEPT Recognition awards:western days 152423 06/07/2012 014913 TEMECULA VALLEY refund:sec dep:rm rental:Harveston 152424 06/07/2012 000306 TEMECULA VALLEY PIPE & Misc supplies:csd maint SUPPLY 152425 06/07/2012 011090 TEMECULA VALLEY Transportation srvcs:NLC Conf 6/7-10 TRANSPORTATION 152426 06/07/2012 000919 TEMECULA VALLEY UNIFIED FY11/12 field maintloint use agmint SCHOOL 152427 06/07/2012 014872 THE CAJON DIVISION refund:sec dep:rm rental:MPSC refund:rm rental credit:MPSC 152428 06/07/2012 014914 THE ESTATE SERVICES refund:sec dep:rm rental:Harveston GROUP 152429 06/07/2012 003862 THYSSENKRUPP ELEVATOR.BRNCH 37 152430 06/07/2012 010276 TIME WARNER CABLE 152431 06/07/2012 010144 TIMPANO, WILLIAM J. OR SUSANNA 152432 06/07/2012 007433 TOVEY SHULTZ CONSTRUCTION INC 95.00 95.00 7,878.00 7,878.00 80.81 110.17 190.98 200.00 200.00 244.59 244.59 3,675.70 3,675.70 21,000.00 21,000.00 150.00 72.00 222.00 100.00 100.00 osha fire safety test: theater elevator 99.00 osha fire safety test: theater elevator 148.50 247.50 June high speed intemet:Library 522.26 June high speed intem et:40135 Village 224.95 June high speed intem et:42081 Main St 58.49 805.70 refund:sec dep:rm rental:TCC 100.00 100.00 Mar prgs pmt:Roripaugh fire stn 55,635.60 Prgs pmt # 21:Roripaugh Ranch Fire Stn 126,194.79 181,830.39 152434 06/07/2012 002702 U S POSTAL SERVICE May' 12 postage meter deposit 2,175.11 Apr '12 postage meter deposit 4,923.58 7,098.69 152435 06/07/2012 000325 UNITED WAY United Way Charities Payment 51.00 51.00 152436 06/07/2012 008977 VALLEY EVENTS INC Rental equip:rock star party 5/18 2,950.00 2,950.00 152437 06/07/2012 014418 VIDACARE CORPORATION Medical supplies: Medics 638.22 638.22 Page:10 apChkLst Final Check List Page: 11 06/07/2012 4:36:56PM CITY OF TEMECULA Bank : union UNION BANK OF CALIFORNIA (Continued) Check # Date Vendor Description Amount Paid Check Total 152438 06/07/2012 014912 VIGIL, MOISES refund:sec dep:rm rental:TCC 152439 06/07/2012 000621 WESTERN RIVERSIDE Council Community Service Funding COUNCIL OF 150.00 150.00 2,000.00 2,000.00 Grand total for UNION BANK OF CALIFORNIA: 1,796,194.86 Pagel 1 apChkLst Final Check List Page: 12 06/07/2012 4:36:56PM CITY OF TEMECULA 147 checks in this report. Grand Total All Checks. 1,796,194.86 Page:12 Item No. 4 Approvals City Attorney Director of Finance City Manager CITY OF TEMECULA AGENDA REPORT TO: City Manager/City Council FROM: Andre O'Harra. Chief of Police DATE: June 26, 2012 SUBJECT: Agreement for Phlebotomy Services PREPARED BY: Heidi Schrader, Senior Management Analyst RECOMMENDATION: Approve the Agreement with American Forensic Nurses, DBA: AFN for phlebotomy services in fiscal year 2012-13 for an annual contract amount of $45,000. BACKGROUND: The City of Temecula Police Department utilizes American Forensic Nurses for phlebotomy services to draw blood for DUI analysis and for collection of evidence in sexual assault cases. They work with most local law enforcement agencies, including the Riverside County Sheriffs Department and come to the police station, the Southwest Detention Center and even stand by at DUI checkpoints. In the past year, the Police Department has performed a number of DUI enforcement activities as the result of an Office of Traffic Safety (OTS) grant. This has resulted in several arrests, as well as a deterrent to drivers not to drink and drive on City streets. It has also increased the number of blood draws performed for the City of Temecula. In addition, the City of Temecula is billed by American Forensic Nurses for any blood draw that is the result of a Temecula case. This includes blood draws requested by CHP Officers working within the City. This contract will be for a total of $45,000 in fiscal year 2012-13. FISCAL IMPACT: Adequate funds are proposed in the fiscal year 2012-13 Police Department operating budget to meet the contract amount. ATTACHMENTS: Agreement for Consultant Services between City of Temecula and American Forensic Nurses, DBA: AFN for Phlebotomy Services. PD13-05 AGREEMENT FOR CONSULTANT SERVICES BETWEEN CITY OF TEMECULA AND AMERICAN FORENSIC NURSES, DBA: AFN FOR PHLEBOTOMY SERVICES THIS AGREEMENT is made and effective as of June 26, 2012, between the City of Temecula , a municipal corporation (hereinafter referred to as "City"), and American Forensic Nurses, DBA: AFN, a Corporation, (hereinafter referred to as "Consultant"). In consideration of the mutual covenants and conditions set forth herein, the parties agree as follows: 1. TERM This Agreement shall commence on July 1, 2012, and shall remain and continue in effect until tasks described herein are completed, but in no event later than June 30, 2013, unless sooner terminated pursuant to the provisions of this Agreement. The City may, upon mutual agreement, extend the contract for four (4) additional one (1) year terms. In no event shall the contract be extended beyond June 30, 2017. If Agreement is extended beyond the original term, the Agreement price shall be adjusted at the beginning of each calendar year in accordance with the changes in the Consumer Price Index for all Urban Consumers in the Los Angeles -Anaheim -Riverside Area published monthly by the United States Bureau of Labor Statistics (CPI). 2. SERVICES Consultant shall perform the services and tasks described and set forth in Exhibit A, attached hereto and incorporated herein as though set forth in full. Consultant shall complete the tasks according to the schedule of performance which is also set forth in Exhibit A. 3. PERFORMANCE Consultant shall at all times faithfully, competently and to the best of his or her ability, experience, and talent, perform all tasks described herein. Consultant shall employ, at a minimum, generally accepted standards and practices utilized by persons engaged in providing similar services as are required of Consultant hereunder in meeting its obligations under this Agreement. 4. PAYMENT a. The City agrees to pay Consultant monthly, in accordance with the payment rates and terms and the schedule of payment as set forth in Exhibit B, Payment Rates and Schedule, attached hereto and incorporated herein by this reference as though set forth in full, based upon actual time spent on the above tasks. Any terms in Exhibit B, other than the payment rates and schedule of payment, are null and void. This amount shall not exceed Forty -Five Thousand Dollars and No Cents ($45,000.00) for the total term of this agreement unless additional payment is approved as provided in this Agreement. b. Consultant shall not be compensated for any services rendered in connection with its performance of this Agreement which are in addition to those set forth herein, unless such additional services are authorized in advance and in writing by the City 1 R:/Finance/Agreements/Finance Dept Agreements/Agreements 2012-2013/American Forensic Nurses.Phlebotomy Agreement. Police. PD13-05.3-6-12 Manager . Consultant shall be compensated for any additional services in the amounts and in the mariner as agreed to by City Manager and Consultant at the time City's written authorization is given to Consultant for the performance of said services. c. Consultant will submit invoices monthly for actual services performed. Invoices shall be submitted between the first and fifteenth business day of each month, for services provided in the previous month. Payment shall be made within thirty (30) days of receipt of each invoice as to all non -disputed fees. If the City disputes any of Consultant's fees, it shall give written notice to Consultant within thirty (30) days of receipt of an invoice of any disputed fees set forth on the invoice. For all reimbursements authorized by this Agreement, Consultant shall provide receipts on all reimbursable expenses in excess of fifty dollars ($50) in such form as approved by the Director of Finance. 5. SUSPENSION OR TERMINATION OF AGREEMENT WITHOUT CAUSE a. The City may at any time, for any reason, with or without cause, suspend or terminate this Agreement, or any portion hereof, by serving upon the Consultant at least ten (10) days prior written notice. Upon receipt of said notice, the Consultant shall immediately cease all work under this Agreement, unless the notice provides otherwise. If the City suspends or terminates a portion of this Agreement such suspension or termination shall not make void or invalidate the remainder of this Agreement. b. In the event this Agreement is terminated pursuant to this Section, the City shall pay to Consultant the actual value of the work performed up to the time of termination, provided that the work performed is of value to the City. Upon termination of the Agreement pursuant to this Section, the Consultant will submit an invoice to the City, pursuant to Section entitled "PAYMENT" herein. 6. DEFAULT OF CONSULTANT a. The Consultant's failure to comply with the provisions of this Agreement shall constitute a default. In the event that Consultant is in default for cause under the terms of this Agreement, City shall have no obligation or duty to continue compensating Consultant for any work performed after the date of default and can terminate this Agreement immediately by written notice to the Consultant. If such failure by the Consultant to make progress in the performance of work hereunder arises out of causes beyond the Consultant's control, and without fault or negligence of the Consultant, it shall not be considered a default. b. If the City Manager or his delegate determines that the Consultant is in default in the performance of any of the terms or conditions of this Agreement, it shall serve the Consultant with written notice of the default. The Consultant shall have ten (10) days after service upon it of said notice in which to cure the default by rendering a satisfactory performance. In the event that the Consultant fails to cure its default within such period of time, the City shall have the right, notwithstanding any other provision of this Agreement, to terminate this Agreement without further notice and without prejudice to any other remedy to which it may be entitled at law, in equity or under this Agreement. 7. OWNERSHIP OF DOCUMENTS a. Consultant shall maintain complete and accurate records with respect to sales, costs, expenses, receipts and other such information required by City that relate to the performance of services under this Agreement. Consultant shall maintain adequate records of services provided in sufficient detail to permit an evaluation of services. All such records shall 2 R:/Finance/Agreements/Finance Dept Agreements/Agreements 2012-2013/American Forensic Nurses.Phlebotomy Agreement. Police. PD13-05.3-6-12 be maintained in accordance with generally accepted accounting principles and shall be clearly identified and readily accessible. Consultant shall provide free access to the representatives of City or its designees at reasonable times to such books and records, shall give City the right to examine and audit said books and records, shall permit City to make transcripts there from as necessary, and shall allow inspection of all work, data, documents, proceedings and activities related to this Agreement. Such records, together with supporting documents, shall be maintained for a period of three (3) years after receipt of final payment. b. Upon completion of, or in the event of termination or suspension of this Agreement, all original documents, designs, drawings, maps, models, computer files containing data generated for the work, surveys, notes, and other documents prepared in the course of providing the services to be performed pursuant to this Agreement shall become the sole property of the City and may be used, reused or otherwise disposed of by the City without the permission of the Consultant. With respect to computer files containing data generated for the work, Consultant shall make available to the City, upon reasonable written request by the City, the necessary computer software and hardware for purposes of accessing, compiling, transferring and printing computer files. 8. INDEMNIFICATION The Consultant agrees to defend, indemnify, protect and hold harmless the City of Temecula, Temecula Community Services District, and/or Redevelopment Agency of the City of Temecula, its officers, officials, employees and volunteers from and against any and all claims, demands, losses, defense costs or expenses, including attorney fees and expert witness fees, or liability of any kind or nature which the City of Temecula, Temecula Community Services District, and/or Redevelopment Agency of the City of Temecula, its officers, agents, employees or volunteers may sustain or incur or which may be imposed upon them for injury to or death of persons, or damage to property arising out of Consultant's negligent or wrongful acts or omissions arising out of or in any way related to the performance or non-performance of this Agreement, excepting only liability arising out of the negligence of the City of Temecula, Temecula Community Services District, and/or Redevelopment Agency of the City of Temecula. 9. INSURANCE REQUIREMENTS Consultant shall procure and maintain for the duration of the contract insurance against claims for injuries to persons or damages to property, which may arise from or in connection with the performance of the work hereunder by the Consultant, its agents, representatives, or employees. a. Minimum Scope of Insurance. Coverage shall be at least as broad as: 1) Insurance Services Office Commercial General Liability form No. CG 00 01 11 85 or 88. 2) Insurance Services Office Business Auto Coverage form CA 00 01 06 92 covering Automobile Liability, code 1 (any auto). If the Consultant owns no automobiles, a non -owned auto endorsement to the General Liability policy described above is acceptable. 3) Worker's Compensation insurance as required by the State of California and Employer's Liability Insurance. If the Consultant has no employees while performing under this Agreement, worker's compensation insurance is not required, but Consultant shall execute a declaration that it has no employees. 3 R:/Finance/Agreements/Finance Dept Agreements/Agreements 2012-2013/American Forensic Nurses.Phlebotomy Agreement. Police. PD13-05.3-6-12 4) Professional Liability Insurance shall be written on a policy form providing professional liability for the Consultant's profession. b. Minimum Limits of Insurance. Consultant shall maintain limits no less than: 1) General Liability: One million ($1,000,000) per occurrence for bodily injury, personal injury and property damage. If Commercial General Liability Insurance or other form with a general aggregate limit is used, either the general aggregate limit shall apply separately to this projectilocation or the general aggregate limit shall be twice the required occurrence limit. 2) Automobile Liability: One million ($1,000,000) per accident for bodily injury and property damage. 3) Worker's Compensation as required by the State of California; Employer's Liability: One million dollars ($1,000,000) per accident for bodily injury or disease. 4) Professional Liability Coverage: One million ($1,000,000) per claim and in aggregate. c. Deductibles and Self -Insured Retentions. Any deductibles or self-insured retentions shall not exceed Twenty Five Thousand Dollars and No Cents ($25,000). d. Other Insurance Provisions. The general liability and automobile liability policies are to contain, or be endorsed to contain, the following provisions: 1) The City of Temecula, the Temecula Community Services District, the Successor Agency to the Successor Agency to the Temecula Redevelopment Agency, their officers, officials, employees and volunteers are to be covered as insured's, as respects: liability arising out of activities performed by or on behalf of the Consultant; products and completed operations of the Consultant; premises owned, occupied or used by the Consultant; or automobiles owned, leased, hired or borrowed by the Consultant. The coverage shall contain no special limitations on the scope of protection afforded to the City of Temecula, the Temecula Community Services District, the Successor Agency to the Temecula Redevelopment Agency, their officers, officials, employees or volunteers. 2) For any claims related to this project, the Consultant's insurance coverage shall be primary insurance as respects the City of Temecula, the Temecula Community Services District, the Successor Agency to the Temecula Redevelopment Agency, their officers, officials, employees and volunteers. Any insurance or self-insured maintained by the City of Temecula, Temecula Community Services District, and/or Redevelopment Agency of the City of Temecula, its officers, officials, employees or volunteers shall be excess of the Consultant's insurance and shall not contribute with it. 3) Any failure to comply with reporting or other provisions of the policies including breaches of warranties shall not affect coverage provided to the City of Temecula, the Temecula Community Services District, and the Successor Agency to the Successor Agency to the Temecula Redevelopment Agency, their officers, officials, employees or volunteers. 4) The Consultant's insurance shall apply separately to each insured against whom claim is made or suit is brought, except with respect to the limits of the insurer's liability. 5) Each insurance policy required by this agreement shall be endorsed to state: should the policy be canceled before the expiration date the issuing insurer will endeavor to mail thirty (30) days' prior written notice to the City. 4 R:/Finance/Agreements/Finance Dept Agreements/Agreements 2012-2013/American Forensic Nurses.Phlebotomy Agreement. Police. PD13-05.3-6-12 6) If insurance coverage is canceled or, reduced in coverage or in limits the Consultant shall within two (2) business days of notice from insurer phone, fax, and/or notify the City via certified mail, return receipt requested of the changes to or cancellation of the policy. e. Acceptability of Insurers. Insurance is to be placed with insurers with a current A.M. Best rating of A -:VII or better, unless otherwise acceptable to the City. Self insurance shall not be considered to comply with these insurance requirements. f. Verification of Coverage. Consultant shall furnish the City with original endorsements effecting coverage required by this clause. The endorsements are to be signed by a person authorized by that insurer to bind coverage on its behalf. The endorsements are to be on forms provided by the City. All endorsements are to be received and approved by the City before work commences. As an alternative to the City's forms, the Consultant's insurer may provide complete, certified copies of all required insurance policies, including endorsements affecting the coverage required by these specifications. 10. INDEPENDENT CONTRACTOR a. Consultant is and shall at all times remain as to the City a wholly independent contractor. The personnel performing the services under this Agreement on behalf of Consultant shall at all times be under Consultant's exclusive direction and control. Neither City nor any of its officers, employees, agents, or volunteers shall have control over the conduct of Consultant or any of Consultant's officers, employees, or agents except as set forth in this Agreement. Consultant shall not at any time or in any manner represent that it or any of its officers, employees or agents are in any manner officers, employees or agents of the City. Consultant shall not incur or have the power to incur any debt, obligation or liability whatever against City, or bind City in any mariner. b. No employee benefits shall be available to Consultant in connection with the performance of this Agreement. Except for the fees paid to Consultant as provided in the Agreement, City shall not pay salaries, wages, or other compensation to Consultant for performing services hereunder for City. City shall riot be liable for compensation or indemnification to Consultant for injury or sickness arising out of performing services hereunder. 11. LEGAL RESPONSIBILITIES The Consultant shall keep itself informed of all local, State and Federal ordinances, laws and regulations which in any mariner affect those employed by it or in any way affect the performance of its service pursuant to this Agreement. The Consultant shall at all times observe and comply with all such ordinances, laws and regulations. The City, and its officers and employees, shall riot be liable at law or in equity occasioned by failure of the Consultant to comply with this section. 12. RELEASE OF INFORMATION a. All information gained by Consultant in performance of this Agreement shall be considered confidential and shall not be released by Consultant without City's prior written authorization. Consultant, its officers, employees, agents or subcontractors, shall riot without written authorization from the City Manager or unless requested by the City Attorney, voluntarily provide declarations, letters of support, testimony at depositions, response to interrogatories or other information concerning the work performed under this Agreement or relating to any project or property located within the City. Response to a subpoena or court 5 R:/Finance/Agreements/Finance Dept Agreements/Agreements 2012-2013/American Forensic Nurses.Phlebotomy Agreement. Police. PD13-05.3-6-12 order shall riot be considered "voluntary" provided Consultant gives City notice of such court order or subpoena. b. Consultant shall promptly notify City should Consultant, its officers, employees, agents or subcontractors be served with any summons, complaint, subpoena, notice of deposition, request for documents, interrogatories, request for admissions or other discovery request, court order or subpoena from any party regarding this Agreement and the work performed there under or with respect to any project or property located within the City. City retains the right, but has no obligation, to represent Consultant and/or be present at any deposition, hearing or similar proceeding. Consultant agrees to cooperate fully with City and to provide City with the opportunity to review any response to discovery requests provided by Consultant. However, City's right to review any such response does riot imply or mean the right by City to control, direct, or rewrite said response. 13. NOTICES Any notices which either party may desire to give to the other party under this Agreement must be in writing and may be given either by (i) personal service, (ii) delivery by a reputable document delivery service, such as but riot limited to, Federal Express, that provides a receipt showing date and time of delivery, or (iii) mailing in the United States Mail, certified mail, postage prepaid, return receipt requested, addressed to the address of the party as set forth below or at any other address as that party may later designate by Notice. Notice shall be effective upon delivery to the addresses specified below or on the third business day following deposit with the document delivery service or United States Mail as provided above. Mailing Address: City of Temecula Attn: City Manager P.O. Box 9033 Temecula, CA 92589-9033 Use this Address for a Delivery Service: City of Temecula or Hand -Deliveries ONLY Attn: City Manager 41000 Main Street Temecula, CA 92590 To Consultant: 14. ASSIGNMENT American Forensic Nurses, DBA: AFN Attn: Faye Battiste-Otto 255 North El Cielo Road #140-195 Palm Springs, CA 92262 The Consultant shall not assign the performance of this Agreement, nor any part thereof, nor any monies due hereunder, without prior written consent of the City. Upon termination of this Agreement, Consultant's sole compensation shall be payment for actual services performed up to, and including, the date of termination or as may be otherwise agreed to in writing between the City Council and the Consultant. 15. LICENSES At all times during the term of this Agreement, Consultant shall have in full force and effect, all licenses required of it by law for the performance of the services described in this Ag ree me nt. 6 R:/Finance/Agreements/Finance Dept Agreements/Agreements 2012-2013/American Forensic Nurses.Phlebotomy Agreement. Police. PD13-05.3-6-12 16. GOVERNING LAW The City and Consultant understand and agree that the laws of the State of California shall govern the rights, obligations, duties and liabilities of the parties to this Agreement and also govern the interpretation of this Agreement. Any litigation concerning this Agreement shall take place in the municipal, superior, or federal district court with geographic jurisdiction over the City of Temecula. In the event such litigation is filed by one party against the other to enforce its rights under this Agreement, the prevailing party, as determined by the Court's judgment, shall be entitled to reasonable attorney fees and litigation expenses for the relief granted. 17. PROHIBITED INTEREST No officer, or employee of the City of Temecula that has participated in the development of this agreement or its approval shall have any financial interest, direct or indirect, in this Agreement, the proceeds thereof, the Consultant, or Consultant's sub -contractors for this project, during his/her tenure or for one year thereafter. The Consultant hereby warrants and represents to the City that no officer or employee of the City of Temecula that has participated in the development of this agreement or its approval has any interest, whether contractual, non - contractual, financial or otherwise, in this transaction, the proceeds thereof, or in the business of the Consultant or Consultant's sub -contractors on this project. Consultant further agrees to notify the City in the event any such interest is discovered whether or not such interest is prohibited by law or this Agreement. 18. ENTIRE AGREEMENT This Agreement contains the entire understanding between the parties relating to the obligations of the parties described in this Agreement. All prior or contemporaneous agreements, understandings, representations and statements, oral or written, are merged into this Agreement and shall be of no further force or effect. Each party is entering into this Agreement based solely upon the representations set forth herein and upon each party's own independent investigation of any and all facts such party deems material. 19. AUTHORITY TO EXECUTE THIS AGREEMENT The person or persons executing this Agreement on behalf of Consultant warrants and represents that he or she has the authority to execute this Agreement on behalf of the Consultant and has the authority to bind Consultant to the performance of its obligations hereunder. The City Manager is authorized to enter into an amendment on behalf of the City to make the following non -substantive modifications to the agreement: (a) name changes; (b) extension of time; (c) non -monetary changes in scope of work; (d) agreement termination. 7 R:/Finance/Agreements/Finance Dept Agreements/Agreements 2012-2013/American Forensic Nurses.Phlebotomy Agreement. Police. PD13-05.3-6-12 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed the day and year first above written. CITY OF TEMECULA AMERICAN FORENSIC NURSES, DBA: AFN (Two Signatures of corporate officers required unless corporate documents authorize only one person to sign the agreement on behalf of the corporation.) By: By: Chuck Washington, Mayor Faye Batistte-Otto, President & CEO ATTEST: By: By: Susan W. Jones, MMC, City Clerk APPROVED AS TO FORM: By: Peter M. Thorson, City Attorney CONSULTANT American Forensic Nurses, DBA: AFN Attn: Faye Battiste-Otto 255 North El Cielo Road #140-195 Palm Springs, CA 92262 Phone: 760-323-6990 Fax: 760-323-7555 info(c�amrn.com sherry@amrn.com PM Initials: D g Date: 8 R:/Finance/Agreements/Finance Dept Agreements/Agreements 2012-2013/American Forensic Nurses.Phlebotomy Ag reem e nt. P c l ice. P D 13-05.3-6-12 EXHIBIT A Tasks to be Performed American Forensic Nurses DBA: AFN agrees to provide and the City of Temecula agrees to pay for the services outlined in the proposal/fee schedule provided by the Consultant attached hereto and incorporated herein as though set forth in full. American Forensic Nurses will furnish on-call services to the following locations: Temecula Police Department — 308755-A Auld Road, Murrieta, CA Southwest Detention Center — 30755-B Auld Road, Murrieta, CA Field Response within the City limits of Temecula Acceptable response time from the notification that a blood draw is needed is thirty (30) minutes. 9 R:/Finance/Agreements/Finance Dept Agreements/Agreements 2012-2013/American Forensic Nurses.Phlebotomy Agreement. Police. PD13-05.3-6-12 EXHIBIT B Payment Rates and Schedule Prices for services are as outlined in the Proposal/Fee Schedule provided by the Consultant attached hereto and incorporated herein as though set forth in full. In no event shall such services exceed $45,000.00 for the total term of the Agreement except as provided pursuant to Section 4 of this Agreement. 10 R:/Finance/Agreements/Finance Dept Agreements/Agreements 2012-2013/American Forensic Nurses.Phlebotomy Agreement. Police. PD13-05.3-6-12 Mary Vollmuth From: Sherry <sherry@amrn.com> Sent: Wednesday, February 15, 2012 3:28 PM To: Mary Vollmuth Subject: RE: City of Temecula - FY 2012-13 Quote for Services Attachments: Temecula Cert 2011-12.pdf Importance: High Good Afternoon Mary, I've received confirmation from Ms. Battiste-Otto that the fee schedule will remain the same for the fiscal year 2012 13 1. Blood / Urine / DNA collection 2. Dry Run: Blood &/or Urine 3. Rape Suspect Evidence Collection 4. Dry Run, Rape Suspect Evidence Collection 5. Reference Evidence Collection 6. Reference Evidence Collection Dry Run 7. Court Time (Actual time in court only) 8. On-call Fee 9. DUI Check Point $ 42.38 per subject 5 30.00 per dry run $ 195.00 per suspect $ 95.00 per dry run 5 99.00 per suspect $ 49.00 per suspect $ 85.00 per hour $1,248.00 per month $ 350.00 per DUI CP Please find attached Current General liability, Auto, Workers Comp & Professional liability insurance certificate naming the City of Temecula & Temecula Community Services District as additional insured on the general and auto insurance. The business address and phone/E-mail contact information you have listed is correct, however, would you include P: 760.323.6990 F: 760.323.7555 and Sherry@amrn.com for additional contact information. Faye Battiste-Otto is still only one signer for the business. The meeting minutes you have mentioned are the most current. We thank you sincerely for your business and wish a continued successful relationship with the City of Temecula. If you need additional information, please do not hesitate to contact me at the number below. tfnst Sincerely. Siang s 4e*cll American Forensic Nurse Manager, Law Enforcement Kaiser Accounts P: 760.323.6990 F: 760.323.7555 Click here to visit our company web sites Become a fan on Faceboak: American Forensic Nurses The Acadgmv of FQlr,.n &ti_u_rAing kgnse The American Institute of forensic Education the International Academy of Forensic Professionals From: Mary Vollmuth[mailto:Mary.Vollmuth@tityoftemecula.org] Sent: Tuesday, February 14, 2012 3:06 PM To: sherry@amm.com Subject FW: City of Temecula - FY 2012-13 Quote for Services 11 R:/Finance/Agreements/Finance Dept Agreements/Agreements 2012-2013/American Forensic Nurses.Phlebotomy Agreem ent. Pol is e. PD13-05.3-6-12 ACORQ CERTIFICATE OF LIABILITY INSURANCE IAN II iioil :.LOI.cEA 9n9 484.2456 FAX CuRbre recuranCe Services Lict 0706901 3333 Contours Suite 5100 Ontario, CA 91764 909.484.2491 E C I` A I7 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTI ICATE HOLDER. THIS CERTIFICATE DOES NOT AMEND. EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. L_' 1Aif l AFFORDING COVERAGE —1 ton Insurance Ctapany UMTS__ NAIC a 3 9 A ; vSTIRED Amlef icon Forensic Nurses DIA: AFN 2SS N. El Cielo Road Suite 140 - 195 Palo Springs, CA 92262 I F -R 2 2 20 PURCHASINt"""= — HNA6190645(12) ami Insurance Company tBJRERG LAZ4oco.mnect $ 5,000,000 t.aXartE COMMiIIKOO,gKAI/mun El rovresore TAE PpLA *E3 OF INSURANCE LISTED BELON HAVE BEEN ISSUED TO THE NSURED NAMED ABOVE FOR THE POLJC'f PERIOD WO ATEO NOTWIntaANCIEN0 ANY HEQIJAE'ENT. TERM OR GOMA11ON 0T ANY CONTRACT OR OTHER WOMEN! NRTIt RESRCT TO WIlo l nes CERTII ICAIE NAY eE 16.tUEDOR NAY PERTMI. THE RYSJRAM;E AFFORDED BY THE POLK.IE6 DESCRIBED HEREIN B &OBJECT TO ALL THE TERAS. EXCLUSIONS MID COMMONS OF SUCH POLICIES AGGREGATE LIMITS SHOWN MAY HAVE SEEN REDUCED BY PAID CLAMS. 'NN h TOR d INSURMNCE POLICY WESER aTF •v0.4 Ary,L=Tm� UMTS__ GEIERK Lma nY — HNA6190645(12) 11/30/2011 11/30/2012 r LAZ4oco.mnect $ 5,000,000 K COMMiIIKOO,gKAI/mun El / kr CAAAOE70RENTED jvccluarR .v mamma... 7 100,000 CIAMNIAACA X OOLIJI MED GP(*NAIApn.s4 $ S� A PWO4AI.1ADV Iw(AY t 1,OOD,000 0171^_RAL AO0IKUATE s 5,00°,000 OWL —1 AORIECOSTE .MT APPLIES PER PROOLLTS CCWAOP A00 S 1,000,000 VOJCT nM. nloc A AN a' X ANl.tluelUTv T AuIO Al OWNED AUTOS ECHE AUTOS ACO MRED AUTOS 'On OWNLl AUTOS NOA6190646(12) 11/30/2011 11/30/20 comma°laerle me, s / 1 000,000 OIYuv - rev t 3001.• RERAN Pw aawMb s IP.-Ia-llrq GARAGE UASMF Y _1 MRO ONLY esACC09IT s AIR' ALTO �,� MAN$A ICC 1 Auto OV.Y A00 $ txcl*M mmol A LIABILITY EACH OCCURRENCE S DOCCUR ■ CLAIMS WD[ AOOREGATE - _ $ S IDECUCTIRAE s RETENTION s s WORKERS COMPENSATION ARO 20700 3 12/01/2010 1/2011 X IsT Al r fR g EMPLOYERS' UASa1TY N(v PAOPPETOR'PARTNr4,r.. rivr Lul.11. E L EACH ACCURST 1,000,000 OP,I(f14A*MAA-N EXCLNFE L R39EA9E EA- $ „c.o.... P r. •..P. ,.k.Evi S�ECAI �IErvLf]NS MOn Cat EL PSEREE Jst s 1,000000 A 011Vessional liability HNA6190645(12) 11/30 20u 11/30/2012 / SS.000,000 Aggregate Limit S �� 4 etroOae11-30-04 `� 4CKnrrJION d q�e�1A�IDIA! LOCA Vc /mullion: Ace& ay ITIOORu[ T I iPpCtE� Pt�nIWNS Tile CTty oT T/ercula, ty ReOevelopnent Agency and atacuea Celalonity Services District are added as Additional Insured a., respects commercial general and autr. k, je 1iabi1ity per policy forms, In lieu of certificate issued 02/15/2012 / 10 days notice of cancellation applies in event of non payment of premium. RTIFICATE H City of Temecula 41000 Main Street Tearcula, CA 92590 0 // ,i,/7 4IZ SHOULD MY Os TK ABOVE DESCRISPO POU6ES SE CANCELLED REWRe THE EXPIRATION OAT! TNERMO THE IMMO &SUPER *I1 . E1OEATOR TO MAI. *30 OATS YAITEN NOTICE TO THE LORIMAR POLDERNAMED TO TK LOT. SLIT MAIM TO MMI. SUCH NOTICE SHALL aIPOSE NOOSUOATWN OR LABILITY OP ANY KM LION THE NIURER. RS A01NT1 O1 RIPRISEJ/TATIVIS autumn/so usanttwt end Tommie McCrary/TN I ACORD 36 (200$104) FAX: 951.694.6479 OACORD CORPORATION 1985 f 12 R:IFinancelAgreements/Finance Dept Agreements/Agreements 2012-2013/American Forensic Nurses.Phlebotomy Agreem ent. Pol is e. PD13-05.3-6-12 ACORD, CERTIFICATE OF LIABILITY INSURANCE 1 oiiuizui2I rx.tucu 909 464.2456 FAX 909.464.2491 Cumbre Insurance Services Lich 07E3951 3333 Concours Suite 5100 lI� 11eeIn Ontario, CA 91764 Il, E C E I to g P Y THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY ANO CONFERS NO RIGHTS UPON THE CERTIFICATE THIS CERTIFICATE DOES NOT AMEND, EXTEND OR ALTER ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. 1 RERS AFFORDING COVERAGE - - A Zenitts Insurance Company MAIC s viii 13 01 RIsI1R® American Forensic Nurses �nl DBA: ARI FEB $ 2 1017 255 N. El Cielo Road V Suite 140 - 195 PURCHASING Palm Springs, CA 92262 ••� ' e muowc e1018al.LAS►11 swam O .1S.MERE v THE ANY ANY POLICIES. INS POUCES Rf.AUNEI PERTAIN. Ail Of INSUZVCE USTEO BELOW HAVE BEEN 15S1.€D TO TIE r$ JR D NAMED Il8OI FCR Tr1E a7LICY PERV0 INDICATEC. NOTWITHSTANDING M1, TtNM OR COIaf1LTI1 Or AHY COTITRACT OR OTHER OOCUMEP? WITH Rf SPECT TO W'r11Q1 THS CERTIFICATE MAT BE IS&tDOR THE P IPMIO: AFTOROED Br TME POLICES DESC IRED HEREIN IS CLaLECT TD ALLTIE TTRaLS. EXCLUSIONS ANO CCNGTICNS Or MA >•1 AGGREGATE UMTS S.IOWN MAY HAVE BEEN REDUCED aY PND CIAMEr�IMrIFEC0 TYPE p IISUSAN01 POLICY SWARM jrlflMlT[ p��Cr E�p�� +�i1►Ifw1,M'� WWII e1018al.LAS►11 COMKRCAI MINERS. UMILI Y FACH OCCURRENCE 1 DAMAGE TO ROSES •a R, .s,tit 1 IRAYS MAIN a OCCUR 1/F0 F%P (A'T Pr M1I ' 1 PERSONAL A ADV INILRY 1 GENERA: AGOREWTE 1 GENE AOOREjOAIE LW ARUM S/9!: POU Y 1-1 .CZ n EOL PRCOU.'TS COMPACP JOG 1 WTOUOBIE _ — EMRITY ANY AUTO All OSSEO AUTOS SpICDULED AUTOS PINED AUTOS 1O KM CANNED AVS COWARD MOIR .. i PIS* RA scam) _ — mDdi-r •tAlar (PN N11°^t 1 BOXY INJURY INN wren* PROPERTY DAANIGE 1 A ME•AMe GARAOF UWAJTy R AW A, LTi AuMOONY - EA ACC/Jeff 1 OFA ACC n161 IMM s AUTOONLY A09 1 EXCESSANS11ELLA -1 RIICIMI EACH OCCURRENCE 1 LIABILITY OCCUR❑ CLAMS RAM ELL- NLIGh11�1 • Ao011t0A1m $ I 1 a A arlov SIS AGIRSLIrSSITY ANY PROPRSTOPIPA4'fNGAG1t�m,IE oA1ICEI1Ale+eElrr.. iI DAA weal* VEGA.. COMPENSATION I LIAmRRY �1 AV. 2070056104 _ 12/01/2011 12/01/2012 I/ ,/r XI 'i sl I E 6A0• ALa2rP 1 1 s 1.000.000 1000! 000 1,000,000 E. DANSE EH BMP-iYBI NROMONS boos _ 1. moat IOLICY1 UT OMNI OA ATONE/ AT1$1 va,IL e ty 0 e cu1a, City RedeveI In lieu of certificate issued 10 days notice of cancellation al 11dONI ADOM.1 eT pI1I * IMI'eIA1r_ I C' IYOw] Apemcy Tswlacu1e C.owwlnity Services District. Tient and 11/11/2011 applies in event of non payment of premium. The City of Temecula Attn: Ms. Mary Vollmeth 41000 Main Street VVVVVff` Temecula. CA 92590 / WOULD AN. Or 1K AIDVI 0E301*1110 PO, CEPS PS CANCELLED SWIM Te WRAT10I OATS Ta,EOr THE MUNRO IIYIIIN AIL . ilikliMin MAIL 30 DAVI VIII TT1I Nona TO TRE CEMTPODA ICATE NL MAIMD NO INE LW, szeumnyarmamumumaitwasaamuceusiterlx NOUVIXNICIONCRANXXTO(XXXXX ALTHORLD Rd1R3dNATNE I Tonssie McCrary/LB ACORD2312001,06) FAX: 951.694.6479 C1ACORD CORPORATION 1961 13 R:IFinancelAgreements/Finance Dept Agreements/Agreements 2012-2013/American Forensic Nurses.Phlebotomy Agreem ent. Pol is e. PD13-05.3-6-12 IMPORTANT If the certificate holder is ar ADDITIONAL INSURED, the policy(res) must be endorsed A statement on thls certificate does not confer rights to the certificate holder In lieu of such endorsementls). 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 cert hcate holder In Ileu of such endorsement(s) DISCLAIMER The Certificate of Insurance on the reverse side of this form does not constitutes contract between tho issuing insurer(s), authorized representative or producer, and the certificate holder, nor does it affirmatively or negatively amend. extend or alter the coverage afforded by the policies listed thereon. ACORO 25 (2001108) 14 R:IFinance/Agreements/Finance Dept Agreements/Agreements 2012-2013/American Forensic Nurses.Phlebotomy Agreem ent. Pol is e. PD13-05.3-6-12 AMERICAN FORENSIC NURSES, INC. A California Corporation MEETING MINUTES Date: January 2, 2001 Time: 2:00 pm Location: Palm Springs, California Present: Faye Battiste Otto, President/Secretary/Chief financial Officer (CFO) Others Present: None Minutes Approved from Previous Meeting: 10/1/00 - Approved by Faye Battiste-Otto Agenda and Actions Taken On a motion brought by the President/Secretary/CFO of the Corporation, the President / Secretary / CFO of the Corporation is hereby authorized to enter a long-term lease of the real property located at 320 & 330 South San Jacinto Street, Hemet, California. The specific terms of the lease shall be negotiated by the President/Secretary/CFO who is authorized to execute all documents and real estate transactions as required. On motion made by the President/Secretary/CFO it was unanimously approved to continue to do business with Guarantee Federal Bank, Palm Springs. All checks drafts and other instruments obligating the corporation shall be signed by the President/Secretary/CFO. On motion by the President/Secretary/CFO of the Corporation, and thereafter unanimously approved, she is hereby authorized to apply to the State of California for a license in the name of the Corporation to conduct an assisted living business at the premises listed above. It was unanimously approved that, without further authorization by this Board of Directors, the President/Secretary/CFO is hereby authorized to execute all documents, contracts, leases, vehicle purchases, bank loans, service agreements which ensure to the benefit of the corporation, including contracts for services, leases, bank loan documents, short and long term license agreements. It was noted by the President/Secretary/CFO that significant improvements will be required prior to opening the new business operation in Hemet. The financial Statements for the Year ending December 31, 2000 were reviewed by the President/ Secretary/CFO and it was determined that additional working capital loans will be required for future operations. There being no further business to come before the meeting, it was duly adjourned. President/Secretary/grief Financial Officer /-a -D/ Date 15 R:IFinance/Agreements/Finance Dept Agreements/Agreements 2012-2013/American Forensic Nurses.Phlebotomy Agreem ent. Pol is e. PD13-05.3-6-12 Item No. 5 Approvals City Attorney Director of Finance City Manager CITY OF TEMECULA AGENDA REPORT TO: City Manager/City Council FROM: Andre O'Harra. Chief of Police DATE: June 26, 2012 SUBJECT: California Department of Justice — Fingerprinting Agreement PREPARED BY: Heidi Schrader, Senior Management Analyst RECOMMENDATION: Approve a five-year Agreement with the California Department of Justice in the amount of $75,000 annually for a total term of $375,000 for fingerprinting services. BACKGROUND: In December of 2009, the City of Temecula entered into a three year agreement for fingerprinting services with the California Department of Justice (DOJ). This agreement will expire June 30, 2012. This new agreement, which is for five years, will expire on June 30, 2017. This agreement includes both Federal level response and State level response. The services provided by this agreement include LiveScan fingerprinting for the Human Resources Department in order to perform background checks on all new employees and volunteers. In addition, the Police Department conducts LiveScan fingerprint ng services out of the Mall Storefront as a service to the community and performs background checks as part of the certification of massage therapists and establishments. Applicants pay the DOJ fingerprinting fee to the Police Department along with a $10 service fee which offsets administrative costs. The Police Department in turn pays the DOJ directly. The applicants' fees offset that expenditure. In fiscal year 2010-11, approximately $57,800 was collected in fingerprint fees. FISCAL IMPACT: Adequate funds exist within the fiscal year 2012-13 Police Department and Human Resources budgets to fund these services. For the remaining four years of the Fingerprinting agreement, budget funds will be adequately set aside from the Human Resources and Police Departments. ATTACHMENTS: State of California Standard Agreement for Fingerprint Services STATE OF CALIFORNIA STANDARD AGREEMENT STD 213 (Rev 06/03) AGREEMENT NUMBER 11-12 REGISTRATION NUMBER. 1. This Agreement is entered into between the State Agency and the Business/Entity named below: BUSINESS/ENTITY NAME CITY OF TEMECULA CON'rRACTORS NAME DEPARTMENT OF JUSTICE (DOJ) 2. The term of this Agreement is: JULY 1, 2012 through JUNE 30, 2017 3. The maximum amount $375,000.00 of this Agreement is: THREE HUNDRED SEVENTY FIVE THOUSAND DOLLARS AND ZERO CENTS 4. The parties agree to comply with the terms and conditions of the following exhibits, which are by this reference made a part of the Agreement. Exhibit A - Scope of Work 2 page(s) Exhibit B - Invoicing and Payment Provisions 2 page(s) Exhibit C" - General Terms and Conditions page(s) Check mark one item below as Exhibit D: ❑ Exhibit - D Special Terms and Conditions (Attached hereto as part of this agreement) ❑ Exhibit - D Special Terms and Conditions Exhibit E - Additional Provisions page(s) page(s) Items shown with an Asterisk (*), are hereby incorporated by reference and made part of this agreement as if attached hereto. These documents can be viewed at www.ols.dgs.ca.gov/Standard+Language IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto. CONTRACTOR CONTRACTOR'S NAME (if other than an individual. state whether a corporation. partnership. etc.) DEPARTMENT OF JUSTICE (DOJ) BY (Authorized Signature) DATE SIGNED/Do nu7 typrl I • PRINTED NAME AND TITLE OF PERSON SIGNING SUMI THOMISON, CHIEF, ACCOUNTING OFFICE ADDRESS 1300 I STREET, ROOM 810 SACRAMENTO, CA 95814 BUSINESS/ENTITY BUSINESS/ENTITY NAME CITY OF TEMECULA BY (Authorized Signature) DATE SIGNED/on nor pp../ PRINTED NAME AND TITLE OF PERSON SIGNING CHUCK WASHINGTON, MAYOR ADDRESS 41000 MAIN STREET, TEMECULA, CA 92590 California Department of Justice Use Only City of Temecula / DOJ Agreement No. 11-12 Billing Number 142756 Exhibit A, Page 1 of 2 EXHIBIT A SCOPE OF WORK The City of Temecula, hereinafter referred to as the City and the Department of Justice, hereinafter referred to as DOJ, hereby enter into this agreement for the purpose of submitting fingerprint images and related information electronically and having the DOJ provide the City with DOJ and FBI Criminal Offender Record Information (CORI). 1. DOJ Responsibilities: A. The DOJ is responsible to receive and process the City CORI requests via electronic submissions. The DOJ shall provide the City with the following information when the DOJ receives and processes CORI requests submitted by the City, for the City: X DOJ CORI or a no record response and (if authorized) subsequent arrest notifications X FBI CORI or a no record response for initial submissions (as applicable) Child Abuse Central Index (CACI - as applicable) Peace Officer Carry Concealed Weapon (CCW - as applicable) Other B. The DOJ is responsible to receive and process CORI requests submitted by the City on behalf of an applicant and/or an applicant agency. The DOJ shall provide the applicant and/or the applicant agency with the CORI requested and submitted through the City. 2. The City Responsibilities: A. The City will request CORI electronically. The City is statutorily authorized to request and receive CORI under ORI Number A0987. Accordingly, the DOJ will deal exclusively with the City for all issues associated with these responses. B. The City agrees to maintain the confidentiality of all information submitted to the DOJ and of all DOJ and FBI no record responses or CORI received from the DOJ. The City, any official or employee of the City, shall not divulge any State or Federal level CORI information provided by the DOJ, except upon written authorization of the DOJ. C. The City, if operating a live scan device, will also be responsible for payment if their live scan operator fails to input a billing/customer account number or inputs an incorrect billing/customer account number and/or applicant agency information, and the DOJ cannot determine which agency should be billed for the transaction. City of Temecula / DOJ 3. The contact representatives during the term of this agreement will be: Program Inquiries: Agreement No. 11-12 Billing Number 142756 Exhibit A, Page 2 of 2 Requesting Agency: City of Temecula Finance Department Providing Agency: Department of Justice (DOJ) Electronic Billing Unit Name: Heidi Schrader Name: Yvonne F.R. Munoz Address: 41000 Main Street Temecula, CA 92590 Address: 4949 Broadway, Room C-217 Sacramento, CA 95820 Phone: (951) 694-6430 Phone: (916) 227-1351 FAX: (951) 694-6479 FAX: (916) 227-1149 E -Mail: Heidi.Schrader@cityoftemecula.orq E -Mail: Yvonne.Munoz@doj.ca.gov Contract inquiries: Requesting Agency: City of Temecula Finance Department Providing Agency: Department of Justice (DOJ) Electronic Billing Unit Name: Mary Vollmuth Name: Yvonne F.R. Munoz Address: 41000 Main Street Temecula, CA 92590 Address: 4949 Broadway, Room C-217 Sacramento, CA 95820 Phone: (951) 693-3932 FAX: (951) 694-6479 Phone: (916) 227-1351 FAX: (916) 227-1149 E -Mail: Mary.Vollmuth(c�cityoftemecula.orq E -Mail: Yvonne.Munoz@doj.ca.gov 4. Either party reserves the right to terminate this agreement without cause upon thirty (30) days written notice to the other party. No amendment or variation of the terms of this agreement shall be valid unless made in writing, signed by both parties, and approved as required. An oral understanding or agreement that is not incorporated into this agreement is not binding on either of the parties. 5. This agreement shall be subject to the examination and audit of the California State Auditor for a period of three years after final payment under this agreement (Government Code Section 8546.7). This agreement shall be governed by the laws of the State of California and shall be interpreted according to California law. City of Temecula / DOJ EXHIBIT B Invoicing and Payment Provisions Invoicing Agreement No. 11-12 Billing Number 142756 Exhibit B, Page 1 of 2 Under the provisions of Penal Code section 11105, the DOJ is authorized to charge agencies requesting CORI a fee sufficient to cover the cost of processing. It is understood that CORI requests will be processed by the DOJ at the rates established by State and Federal agencies. These rates are subject to change with 30 days written notice. Current CORI costs and related fees: State Level Response Federal Level Response $32 X $17 X Federal Level Response (Volunteer) California Child Abuse Index (CACI) $15 X $15 Trustline CACI Adoption CACI $15 Peace Officer Carry Concealed Weapon (CCW) Employment CCW Private Patrol/Security Guard CCW Standard CCW Judge CCW $15 $19 $22 $38 Reserve/Custodial Peace Officer CCW Fingerprint Roller Certification DOJ Fingerprint Rolling Fee $44 $66 $88 $25 $10 Record Review DSS Fee CS DSS Fee $25 $10 $20 CORI submissions specific to the City, as delineated in paragraph 1. A. of Exhibit A, are indicated here with an X. City of Temecula / DOJ Agreement No. 11-12 Billing Number 142756 Exhibit B, Page 2 of 2 The City agrees to compensate the DOJ for services rendered upon receipt of the DOJ invoice. All invoices will state the services provided, the time period covered, the contract number, and the billing/customer account number 142756, with a tear -off bottom that must be returned with payment. The City is responsible for the use of its billing/customer account number. All costs associated to the billing/customer account number will be the responsibility of the City, and reflected on the DOJ invoice, The total amount payable for each invoice shall not exceed the sum of the costs for each CORI request submitted for the period covered by the invoice excluding corrections, other changes, or amounts overdue. The DOJ will mail invoices to the following address: City of Temecula Attn: Accounts Payable P.O. Box 9033 Temecula, CA 92589-9033 Budget Contingency Clause It is mutually agreed that if the Budget Act of the current year and/or any subsequent years covered under this agreement does not appropriate sufficient funds for the program, this agreement shall be of no further force and effect. In this event, the business/entity shall have no liability to pay any funds whatsoever to the Contractor or to furnish any other considerations under this agreement and the Contractor shall not be obligated to perform any provisions of this agreement. If funding for any fiscal year is reduced or deleted by the Budget Act for purposes of this program, the business/entity shall have the option to either cancel this agreement with no liability occurring to the business/entity, or offer an agreement amendment to the Contractor to reflect the reduced amount. Prompt Payment Clause This is an agreement to pay the processing fees associated to the transmission of electronic criminal offender record information requests, including fees incurred by duplicate transmissions or other errors on the part of the City or its representative(s). The City agrees to compensate the DOJ monthly, in arrears, upon receipt of an invoice, computed in accordance with the State Administrative Manual Section 8752 and 8752.1. Nothing herein contained shall preclude advance payments pursuant to Article I, Chapter 3, Part 1, Division 3, Title 2, of the Government Code. Item No. 6 Approvals City Attorney Director of Finance City Manager CITY OF TEMECULA AGENDA REPORT TO: City Manager/City Council FROM: Genie Wilson, Director of Finance DATE: June 26, 2012 SUBJECT: Trustee/Fiscal Agent Services for Fiscal Year 2012-13 PREPARED BY: David Bilby, Senior Debt Analyst RECOMMENDATION: Approve the expenditure of $32,160 for fiscal year 2012-13 trustee/fiscal agent services, provided by U.S. Bank, for the City's Community Facilities Districts (CFD), Assessment District (AD), and Tax Allocation Bonds (TABs). BACKGROUND: The City of Temecula has five existing Community Facilities Districts and one Assessment District: ➢ CFD 01-2 (Harveston) • CFD 03-1 (Crowne Hill) CFD 03-2 (Roripaugh Ranch) • CFD 03-3 (Wolf Creek) • CFD 03-6 (Harveston Il) ▪ AD 03-4 (John Warner Road) Additionally, the former Redevelopment Agency issued TABs in 2002, 2006, 2007, 2010, and 2011. No arbitrage calculations will be performed in the coming year. During formation of each of these bond issues, a Fiscal Agent Agreement, Trust Agreement or Indenture of Trust was executed with U.S. Bank to remain in effect for the duration of the financing. Services provided by the trustee/fiscal agent include establishing and holding accounts (such as the special tax fund, improvement fund, reserve fund, and administrative fund), transferring funds between accounts to pay debt service, disbursing funds to the City upon receipt of draw requests, dissemination of annual disclosure information for both the developer and City as bond issuer, and arbitrage monitoring and reporting. FISCAL IMPACT: Funds to pay the CFD/AD portion of the trustee/fiscal agent services are included in the annual special tax levies and budgets for each of the Districts to finance their respective share of the services. The trustee/fiscal agent service for the former Redevelopment Agency (RDA) TABs has been budgeted to be paid from the Successor Agency to the Temecula Redevelopment Agency (SARDA) Debt Service Fund. ATTACHMENTS: U.S. Bank Schedule of Fees for FY 2012-13 CITY OF TEMECULA U.S. BANK SCHEDULE OF FEES FOR FY 2012-13 BOND ISSUE CFD No. 03-03 (Wolf Creek) CFD No. 03-06 (Harveston II) CFD No. 03-02 (Roripaugh) CFD No. 01-2 (Harveston I) CFD No. 03-1 03 A (Crowne Hill) CFD No. 03-1 05 B (Crowne Hill) AD No. 03-04 (John Warner) 2002 RDA 2006 Series A RDA 2006 Series B RDA 2007 RDA 2010 RDA Series A & B 2011 RDA SeriesA&B FY 2012-13 ESTIMATED FEES $3,250.00 $2,750.00 $1,850.00 $2, 850.00 $3,150.00 $2,000.00 $1,125.00 $16,975.00 $3,850.00 $1,925.00 $2,200.00 $2,000.00 $3, 250.00 $1,960.00 $15,185.00 TOTAL $32,160.00 Item No. 7 Approvals City Attorney Director of Finance City Manager CITY OF TEMECULA AGENDA REPORT TO: City Manager/City Council FROM: Steve Gallegos, Fire Chief DATE: June 26, 2012 SUBJECT: Fourth Amendment to the Agreement with Proactive Fire Design, Inc. PREPARED BY: Becky Obmann, Administrative Assistant RECOMMENDATION: Approve the Fourth Amendment with Proactive Fire Design, Inc. in the amount of $60,000 for Fiscal Year 2012-13 Fire Department plan review service. BACKGROUND: On July 1, 2010, the City Manager approved an agreement for $30,000 with Proactive Fire Design, Inc., a fire protection consulting company that performs plan review service for the Fire Department on an as needed basis. Plan check service is utilized when fire prevention staff experiences an increased level of applications that exceed their ability to process plan submittals within acceptable timeframes. On January 25, 2011, the City Council approved the first amendment to the agreement which increased the amount from $30,000 to $59,000. The increase allowed the Fire Department to continue to provide timely turn around times on plan review service through the end of Fiscal Year 2010-11 On July 1, 2011 the City Council approved the second amendment to renew the annual agreement in the amount of $60.000 for Fiscal Year 2011-12, based upon the original agreement allowing four additional one year extentions. On Febuary 28, 2012 The City Council approved the third amendment to the agreement which increased amount for Fiscal Year 2011-12 by an additional $40,000. The original agreement allows for (4) additional (1) year extentions. Proactive Fire Design has provided quality and timely plan review service with no performance issues. Therefore staff is recommending the contract extension for Fiscal Year 2012-13. FISCAL IMPACT: Adequate funds will be available in the Fire Department budget upon approval of the Fiscal Year 2012-13 budget. ATTACHMENTS: Amendment FOURTH AMENDMENT TO AGREEMENT BETWEEN CITY OF TEMECULA AND PROACTIVE FIRE DESIGN, INC. FIRE DEPARTMENT PLAN REVIEW SERVICE THIS FOURTH AMENDMENT is made and entered into as of June 26, 2012 by and between the City of Temecula, a municipal corporation (hereinafter referred to as "City"), and Proactive Fire Design, Inc. a Corporation (hereinafter referred to as "Consultant"). In consideration of the mutual covenants and conditions set forth herein, the parties agree as follows: 1. This Amendment is made with the respect to the following facts and purposes: a. On July 1, 2010, the City and Consultant entered into that certain Agreement entitled "Agreement for Fire Department Plan Review Service", in the amount of $30,000.00. b. On January 25, 2011, the City and Consultant entered into the First Amendment to that certain Agreement entitled "Agreement for Fire Department Plan Review Service," to increase the payment in the amount of $29,000.00 for a total contract amount of 59, 000.00. c. On July 1, 2011, the City and Consultant entered into the Second Amendment to that certain Agreement entitled "Agreement for Fire Department Plan Review Service," to extend the term of the agreement to June 30, 2012 and increase the payment in the amount of 60,000.00 for a total of $119,000.00. d. On February 28, 2012, the City and Consultant entered into the Third Amendment to that certain Agreement entitled "Agreement for Fire Department Plan Review Service," to increase the payment in the amount of $40,000.00 for a total contract amount of $159,000.00. e. The parties now desire to extend the term of the agreement to June 30, 2013, increase the payment in the amount of $60,000.00 for a total contract amount of $219,000.00 and amend the Agreement as set forth in this Amendment. follows: 2. Section 1. of the Agreement entitled "TERM" is hereby amended to read as "This Agreement shall remain and continue in effect until tasks herein are completed, but in no event later than June 30, 2013 unless sooner terminated pursuant to the provisions of this Agreement. 3. Section 4. of the Agreement entitled "PAYMENT" at paragraph "a" is hereby amended to read as follows: The City agrees to pay Consultant monthly, in accordance with the payment rates and schedules and terms set forth in Exhibit B, Payment Rates and Schedule, attached hereto and incorporated herein by this reference as though set forth in full, based upon actual time spent on the above tasks. Any terms in Exhibit B, other than the payment rates and 1 schedule of payment, are null and void. The Fourth Amendment amount shall not exceed Sixty Thousand Dollars and No Cents ($60, 000.00) for additional Fire Department Plan Review Service for a total Agreement amount of Two Hundred Nineteen Thousand Dollars and No Cents ($219,000.00). 4. Except for the changes specifically set forth herein, all other terms and conditions of the Agreement shall remain in full force and effect. 2 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed the day and year first above written. CITY OF TEMECULA Proactive Fire Design, Inc. (Two Signatures of corporate officers required unless corporate documents authorize only one person to sign the agreement on behalf of the corporation.) By: By: Chuck Washington, Mayor Don Walton, President ATTEST: By: By: Susan W. Jones, MMC. City Clerk APPROVED AS TO FORM: By: Peter M. Thorson, City Attorney CONSULTANT Jo Marie Walton. Secretary Proactive Fire Design, Inc. Don Walton 45686 Hopactong Street, Temecula CA 92592 951-695-3539 Proactive.fd@verizon.net PM Initials:0 Q Date: I� 3 Item No. 8 Approvals City Attorney Director of Finance City Manager CITY OF TEMECULA AGENDA REPORT TO: City Manager/City Council FROM: Patrick Richardson, Director of Planning and Development DATE: June 26, 2012 SUBJECT: Fiscal Year 2012-13 Solid Waste and Recycling Fees PREPARED BY: Dale West, Associate Planner RECOMMENDATION: Adopt a resolution entitled: RESOLUTION NO. 12- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TEMECULA APPROVING SOLID WASTE AND RECYCLING FEES FOR FISCAL YEAR 2012-13 BACKGROUND: Pursuant to the existing solid waste franchise agreement with CR&R, Incorporated, the rates charged for refuse collection and recycling for residential and commercial services within the City of Temecula are subject to annual review and modification. The franchise agreement provides for adjustments based upon changes in the Consumer Price Index (CPI) and the #2 Diesel Fuel Index, and changes to the Riverside County landfill tipping fees. For the FY2012-2013 CR&R rate, the annual average CPI as reported by the U.S. Department of Labor Bureau of Labor Statistics -Los Angeles -Riverside -Orange Counties for All Urban Consumers increased by 2.67% compared to the annual average CPI in 2011. The annual average #2 Diesel Fuel Index increased by 35.81 % compared to the annual average in 2011. The County of Riverside Waste Management Department increased their tipping fee for Fiscal Year 2012-13 by 2.2%. Based on a combination of a Consumer Price Index, #2 Diesel Fuel Index and an increase in landfill tipping fees, the solid waste rates will increase by approximately 4.3%, from the current rate of $18.50 to $19.29 per month for residential customers. Commercial rates vary based on the amount of solid waste and frequency of collection but will also increase at a rate of approximately 4.0%. The attached Exhibit D reflects the new rates for solid waste and recycling collection services within the City and will become effective July 1, 2012. C:\Program Files (x86)\Neevia.Com\Document Converter\temp11643.docx FISCAL IMPACT: Solid waste and recycling services are paid for directly by the customers receiving the services. No additional costs will be incurred by the City of Temecula. ATTACHMENTS: 1. Resolution Exhibit D — Schedule of Rates 2. Consumer Price Index — Bureau of Labor Statistics 3. #2 Diesel Fuel Index — Bureau of Labor Statistics 0 Program Files (x86)\NIeevia.Corn\Document Conveitei\temp\1643.docx RESOLUTION NO. 12- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TEMECULA APPROVING SOLID WASTE AND RECYCLING FEES FOR FISCAL YEAR 2012-13 THE CITY COUNCIL OF THE CITY OF TEMECULA DOES HEREBY RESOLVE AS FOLLOWS: Section 1. The City of Temecula (the "City") and CR&R Incorporated (The "Grantee") entered into an exclusive agreement on May 28, 1991 for the collection, transportation, recycling, composting, and disposal of solid waste and construction debris and for providing temporary bin/roll off services in the City. A. The franchise agreement provides for periodic rate adjustments based on certain predefined criteria, specifically the annual average change in Consumer Price Index ("CPI"), the change in No. 2 Diesel Fuel Index, and changes to the Riverside County landfill tipping fees. B. The franchise agreement further provides that a formula be used to calculate the fee adjustments on an annual basis using the following factors: 1. The annual average CPI for the 2011 calendar year of 2.67% will be used for Fiscal Year 2012-13 rates. 2. The annual average #2 Diesel Fuel Index for the 2011 calendar year of 35.81 % will be used for Fiscal Year 2012-13 rates. 3. The County of Riverside Waste Management Department landfill tipping fee of 2.2% will be used for Fiscal Year 2012-13. C. The franchise agreement provides that the solid waste fee adjustments are to be adopted by the City Council by Resolution. Section 2. That the City of Temecula approve the solid waste and recycling fee adjustments as shown in Exhibit D for Fiscal Year 2012-13. Section 3. The City Clerk shall certify to the passage and adoption of the Resolution. PASSED, APPROVED, AND ADOPTED by the City Council of the City of Temecula this 26th day of June, 2012. Chuck Washington, Mayor ATTEST: Susan W. Jones, MMC City Clerk [SEAL] STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ) ss CITY OF TEMECULA ) I, Susan W. Jones, MMC, City Clerk of the City of Temecula, do hereby certify that the foregoing Resolution No. 12- was duly and regularly adopted by the City Council of the City of Temecula at a meeting thereof held on the 26th day of June, 2012, by the following vote: AYES: COUNCIL MEMBERS: NOES: COUNCIL MEMBERS: ABSENT: COUNCIL MEMBERS: ABSTAIN: COUNCIL MEMBERS: Susan W. Jones, MMC City Clerk CITY OF TEMECULA EXHIBIT "D" Schedule of Rates (effective July 1, 2012) 1 Mechanized single family detached residential collection, recycling, composting, transfer, and disposal grantee billing Monthly Rate: $ 19.29 2 Mechanized single family detached residential collection, recycling, composting, transfer, and disposal parcel charge Monthly Rate: $ 19.29 3 Mechanized single family detached residential additional refuse, and composting container grantee billing Monthly Rate: $ 8.35 4 Single family detached residential additional bulky item pick up - grantee billing • Pick Up Rate: $ 9.90 5 Commercial. industrial, and multi -family residentiakefuse monthly bin rates ( one 2 cubic yard bin) with the following pick ups per week: 1 x week $ 91.60 2 x week $ 183.19 3 x week $ 274.77 4 x week $ 366.36 5 x week $ 457.95 6 x week $ 549.53 7 x week $ 640.09 Compacted 2 Cubic Yard monthly rate: 2.5 x monthly rate 6 Commercial, industrial, and multi -family residentiakefuse monthly bin rates (one 3 cubic yard bin) with the following pick ups per week: Compacted 3 Cubic Yard monthly: 1 x week $ 105.42 2 x week $ 210.83 3 x week $ 316.23 4 x week $ 421.62 5 x week $ 527.03 6 x week $ 631.53 7 x week $ 735.14 2.5 x monthly rate 7 Commercial, industrial, and multi -family residentiakecvclins monthly bin rates ( one 3 cubic yard bin) with the following pick ups per week: 1 x week $ 46.36 2 x week $ 92.73 3 x week $ 139.07 4 x week $ 185.42 5 x week $ 231.81 CITY OF TEMECULA EXHIBIT "D" Schedule of Rates (effective July 1, 2012) 6 x week $ 278.17 7 x week $ 324.51 8 Commercial, industrial, and multi -family residentiakefuse monthly bin rates ( one 4 cubic yard bin) with the following pick ups per week: 1 x week $ 119.28 2 x week $ 238.55 3 x week $ 357.81 4 x week $ 477.08 5 x week $ 596.06 6 x week $ 713.28 7 x week $ 830.51 Compacted 4 Cubic Yard monthly rate: 2.5 x monthly rate 9 Commercial, industrial, and multi -family residentia>recycling monthly bin rates ( one 4 cubic yard bin) with the following pick ups per week: 1 x week $ 61.38 2 x week $ 122.78 3 x week $ 184.16 4 x week $ 245.57 5 x week $ 306.96 6 x week $ 368.35 7 x week $ 429.73 10 Temporary 3 cubic yard bin rate: - $ 92.63 11 Extra Temporary or Regular Service pick up: $ 49.62 per pick up (Includes all bin sizes 2, 3 and 4 yards) 12 Redeliver and reinstatement rate: $ 38.42 per occurrence 13 Roll -off Delivery Fee: $ 67.01 per bin 14 Roll -off disposal rate: $ 216.98 MRF/landfill fee 15 Roll -off recycling rate: $ 216.98 plus market value 16 Roll -off compactor rate: $ 302.10 MRF/landfill fee 17 Roll -off recycling compactor rate: $ 302.10 plus market value 18 Scheduled Extra Green Waste pick up (up to 10 bags): $ 10.00 per pick up CITY OF TEMECULA EXHIBIT "D" Schedule of Rates (effective July 1, 2012) 19 Non -Scheduled Extra Green Waste pick up (up to 10 bags): 25.00 per pick up 20 E -Waste Pick up: no charge 21 "Hard to service" vehicle usage rate: no charge 22 "Hard to service" bin moving rate: no charge 23 Special bin lids (locking/CBL) rate: no charge 24 Deodorizing / replacing bin rate: no charge Bureau of Labor Statistics Data Page 1 of 2 A to Z Index 1 FAQs 1 About BLS 1 Concoct Us Subscribe to E-mail Updates GO What's New 1 Release Calendar 1 Site Map Search BLS.gov Home 1 Subject Areas I Databases & Tools I Publications I Economic Releases Databases, Tables & Calculators by Subject Change Output Options: From: wZOOZ To: 2012Ej Dinclude graphs Data extracted on: March 26, 2012 (2:28:05 FM) Consumer Price Index - All Urban Consumers S d. CUURA421SA0 Not Seasonally Adjusted Area: Los Angeles -Riverside -Orange County, CA Item: All items Base Period: 1982-84100 Download: Year i Annual 2002 182.2 2003 187.0 2004 193.2 2005 2006 210.4 2007 217.338 qq 2008 225.008 2009 223.219 20101225.894 2011 231.928 12 Month Percent Change Series Id: CUURA421SA0 Not Seasonally Adjusted Area: Los Angeles -Riverside -Orange County, CA Item: All items Base Period: 1982-84=100 Download: Year t Annual41 2002 2.8 2003 2004 2.6 3.3 2005 4.5 2006 4.3 2007 3.3 2008 3.5 2009 -0.8 Beta Q FONT SIZE: ;.;,) t j More Formatting Options . http://data.bls.gov/pdq/SurveyOutputServlet 3/26/2012 Bureau of Labor Statistics Data Page 2 of 2 Year Annual L20103µ 1.2 120111_ 2.7 TOOLS CALCULATORS HELP INFO RESOURCES Areas at a Glance Inflation Help 6 Tutorials What's New Inspector General(010) industries at a Glance Location Quotient FAQs Careers Gt BL$ Budget and Performance Economic Reteases injury And fitness Glossary Find III DOL No Fear Act Databases & Tables About SLS Join our Malting Lists USA.goy Maps Contact Us Linking & Copyright Info Beneti s,gov Disability.gov Freedom of Information Act 1 Privacy & Severity Statement 1 Disclaimers 1 Customer $un ey 1 Important Web Site Notices U.S. Bureau of Labor Statistics 1 Postal Square Building, 2 Massachusetts Avenue, NE Washington, DC 20212-0001 www.bls.gov 1 Telephone: 1-202-691-5200 1 TDD: 1800-877-8339 1 Contact .Us http:f/data.b1s.goer/pdq/SurveyOutputSct-vlet 3/26/2012 Bureau of Labor Statistics Data Page 1 of 2 Home I Subject Areas A to Z Index 1 FAQs 1 About BLS 1 Contact Us Subscribe to E-mail Updates co What's New 1 Release Calendar 1 Site Map Search BLS.gov Databases & Tools I Publications I Economic Releases I Beta Databases, Tables & Calculators by Subject Change Output Options: From: 2002 To 1..*4 j" j Dinclude graphs Data extracted on: March 26, 2012 (2:28:58 FM) Producer Price Index -Commodities Series Id: WPU057303 Not Seasonally Adjusted Group: Fuels and related products and power Item: No. 2 diesel fuel Base Date: 198200 Download:r� �J .xls Year Annual 2002 77.9 2003 _.._.... .._ .... 100.5 2004 128.2 2005 2006 2007 2008 2009 2010 2011 P : Preliminary. All indexes are subject to revision four months after original publication. 232.9 316.3(P) 12 Month Percent Change Series Id: WPU057303 Not Seasonally Adjusted Group: Fuels and related products and power Item: No. 2 diesel fuel Bassi Date: 198200 Download: .xls P : Preliminary. All Indexes are subject to revision four months after original publication.., Q FONT SIZE: 8 (*] More Formatting Options. http://data.bls.gov/pdq/SurveyOutputServlet 3/26/2012 Bureau of Labor Statistics Data Year 2008_ 2009 2010 38.0 -44.4 29.0 2011 35.8 P : Preliminary. All Indexes are subject to revision four months after original publication. .......... Page 2 of 2 TOOLS CALCULATORS HELP INFO RESOURCES Areas at a Glance Inflation Help & Tutorials What's New inspector General (OIG) Industries at a Glance Location Quotient FAQs Careers © BLS Budget and Performance Economic Releases Injury And Illness Glossary Find Itt DOL No Fear Act Databases & Tables About BLS Join our Mailing Lists USA,gov Maps Contact Us Linking & Copyright Info Benefits,gov Disability.gov Freedom of Information Act 1 Privacy & Security Statement 1 Disclaimers 1 Customer Survey 1 Important Web Site Notices U.S. Bureau of Labor Statistics 1 Postal Square Building, 2 Massachusetts Avenue, NE Washington, DC 20212-0001 www.bis.gov 1 Telephone: 1-202-691-5200 I TDD: 1-800-877-8339 1 Contact U5, http://data.bls.gov/pdq/Survey0utputServlet 3/26/2012 Item No. 9 Approvals City Attorney Director of Finance City Manager CITY OF TEMECULA AGENDA REPORT TO: City Manager/City Council FROM: Greg Butler, Director of Public Works/City Engineer DATE: June 26, 2012 SUBJECT: Purchase & Sale Agreement with the Gurrola Family Trust for Murrieta Creek Bridge and Overland Drive Extension to Diaz Road, PW00-26 PREPARED BY: Amer Attar, Principal Engineer Beryl Yasinosky, Management Analyst RECOMMENDATION: 1. Adopt a resolution entitled: RESOLUTION NO. 12- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TEMECULA APPROVING THAT CERTAIN AGREEMENT ENTITLED PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS BETWEEN THE CITY OF TEMECULA AND RICHARD B. GURROLA AND VALERIE GURROLA, TRUSTEES OF THE GURROLA FAMILY TRUST UNDER DECLARATION DATED DEC. 27, 2001, ROBERT A. GURROLA, GARY S. GURROLA, AND RICHARD B. GURROLA IN CONNECTION WITH THE MURRIETA CREEK BRIDGE AND OVERLAND DRIVE EXTENSION TO DIAZ ROAD — PW00-26 2. Authorize the City Manager to approve and execute any necessary documents and to take all necessary actions to complete this acquisition, including without limitation, the approval and execution of all documents referenced in the Purchase and Sale Agreement and all escrow instructions; 3. Authorize the Finance Director to issue a warrant for the sum of $1,242,000 plus escrow fees for deposit with the Escrow Holder, First American Title Insurance Company, to complete the transaction. Escrow fees are estimated not to exceed $15,000. BACKGROUND: The Murrieta Creek Bridge and Overland Drive Extension to Diaz Road — PW00-26 ("Proposed Project") is identified in the City's Capital Improvement Program for Fiscal Years 2012-16. The Proposed Project would extend Overland Drive from Commerce Center Drive to Diaz Road with a new bridge over Murrieta Creek. The purpose of the Proposed Project is to improve safety and traffic circulation in the area. The Proposed Project would require the acquisition of certain real property interests from six parcels including an approximate 16,700 square foot permanent easement ("permanent easement") on the real property commonly known as 27495 Enterprise Circle West, Temecula, California and identified as Riverside County Tax Assessor's Parcel Number 921-480-013 ("Subject Property") for public street purposes and all uses necessary or convenient thereto. The Proposed Project would require the demolition of the existing approximate 10,000 square foot industrial building and would create a total approximate 8,985 square foot remainder parcel that consists of an approximate 3,207 square foot remainder on one side and an approximate 5,778 square foot remainder on the other side of the 16,700 square foot permanent easement. The City's appraisers concluded that in the after condition, the size of the remainder parcel would be significantly reduced and the improvements significantly impacted. Thus, the appraisers concluded that the approximate 8,985 square foot property remaining after construction of the proposed project would be of little or no utility or economic value to the record owners and thus these areas constituted an "uneconomic remnant". This uneconomic remnant would not satisfy the minimum lot size for building in the City's Service Commercial (SC) zone, building set back, site coverage or parking requirements. Pursuant to Government Code Section 7267.2, on March 22, 2011, the City Council set just compensation for the permanent easement and the Subject Property at the fair market value as determined by the City's independent appraiser based on a February 7, 2011 date of value. The City Council also authorized the Director of Public Works/City Engineer to make offers and negotiate the acquisition of required property rights for the construction for the Proposed Project. On May 11, 2011, the City extended a written offer to the record owners, Richard B. Gurrola and Valerie M. Gurrola, Trustees of the Gurrola Family Trust under Declaration Dated Dec. 27, 2001, Robert A. Gurrola, Gary S. Gurrola, and Richard B. Gurrola II to purchase the Subject Property at the fair market value established by the City's independent appraiser. Based on the impact of the Proposed Project on the Subject Property and the valuation analysis discussed above, the City offered to purchase the Subject Property in fee. The subject Resolution would approve, in substantially the form attached, the Purchase and Sale Agreement and Joint Escrow instructions between the City of Temecula and the record owners for the acquisition in fee of the Subject Property. As shown on the attached Purchase and Sale Agreement, City staff and the record owners negotiated the City's proposed purchase of the Subject Property and have reached an agreement, subject to approval of the City Council, for the City's acquisition of the Subject Property in fee for the purchase price of $1,242,000. The purchase price is within the amount the City Council previously authorized for negotiation and purchase of the Subject Property. The record owners agreed to sell the Subject Property in fee and have informed City staff that they do not wish to retain the uneconomic remnant described above. Further, the subject Property is occupied by one business tenant pursuant to an AIR Commercial Real Estate Association Standard Industrial Commercial Single -Tenant Lease — Gross. The Purchase and Sale Agreement provides for the assignment of the Sellers' lease interest for the business that currently occupies the Subject Property. The City's relocation consultant is working with the business owner to provide applicable relocation assistance and benefits in accordance with the California Relocation Law (Government Code Section 7260 et seq.) and the California Relocation Assistance and Real Property Acquisition Guidelines (Chapter 6 of Title 25 of the California Code of Regulations). The Purchase and Sale Agreement provides that the Purchase Price of $1,242,000 does riot include compensation for certain improvements to the realty or loss of goodwill, if any, that the business owner may be entitled to receive. The City would review and approve any such payments to the business owner for relocations benefits, improvements pertaining to the realty and loss of goodwill at a later date when the relevant information is available to City staff. The environmental effects of the acquisition of the Subject Property were studied as an integral part of the Negative Declaration for Environmental Assessment No. 75 approved for the Proposed Project. The findings made by the City Council at its meeting on February 27, 2001 in approving the Negative Declaration for Environmental Assessment No. 75 are the appropriate findings for the acquisition of the Subject Property. In connection with the attached Agreement, City staff reviewed all of the environmental documentation prepared in connection with the Proposed Project, including, but riot limited to, the Negative Declaration, the initial environmental study, the mitigation monitoring program and agenda report relating to the approval of the Negative Declaration. Pursuant to the criteria of Section 15162 of the CEQA Guidelines and Section 21166 of the Public Resources Code, City staff concluded that no substantial changes have occurred in the Proposed Project, no substantial changes have occurred in the circumstances under which the project is undertaken, and that the City has obtained no new information of substantial importance that would require further environmental analysis, including the fact that no mitigation measures previously found not to be feasible would in fact be feasible. These environmental findings are the appropriate findings with respect to the proposed acquisitions of the Subject Property. FISCAL IMPACT: The Murrieta Creek Bridge & Overland Drive Extension to Diaz Road Project identified in the City's Capital Improvement Program and is funded with DIF - Streets. Adequate funds for this acquisition are available in project account number 210.165.602.5700. ATTACHMENTS: 1. Resolution No. 12- 2. Purchase & Sale Agreement and Exhibits RESOLUTION NO. 12- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TEMECULA APPROVING THAT CERTAIN AGREEMENT ENTITLED PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS BETWEEN THE CITY OF TEMECULA AND RICHARD B. GURROLA AND VALERIE GURROLA, TRUSTEES OF THE GURROLA FAMILY TRUST UNDER DECLARATION DATED DEC. 27, 2001, ROBERT A. GURROLA, GARY S. GURROLA, AND RICHARD B. GURROLA IN CONNECTION WITH THE MURRIETA CREEK BRIDGE AND OVERLAND DRIVE EXTENSION TO DIAZ ROAD — PWOO -26 THE CITY COUNCIL OF THE CITY OF TEMECULA DOES HEREBY RESOLVE AS FOLLOWS: Section 1. Findings. A. The Murrieta Creek Bridge and Overland Drive Extension to Diaz Road, PW00-26 ("Proposed Project") is identified in the City's Capital Improvement Program for Fiscal years 2012-2016. The Proposed Project would extend Overland Drive from Commerce Center Drive to Diaz Road with a bridge over Murrieta Creek. The purpose of the Proposed Project is to improve safety and traffic circulation in the area. B. The construction of the Proposed Project would require the acquisition of certain real property interests from six parcels. The Proposed Project would require the acquisition of an approximate 16,700 square foot permanent easement ("permanent easement") on the real property commonly known as 27495 Enterprise Circle West, Temecula, California and identified as Riverside County Tax Assessor's Parcel Number 921-480-013 ("Subject Property") for public street purposes and all uses necessary or convenient thereto. The Proposed Project would require the demolition of the existing approximate 10,000 square foot industrial building and would create a total approximate 8,985 square foot remainder parcel that consists of an approximate 3,207 square foot remainder on one side and an approximate 5,778 square foot remainder on the other side of the permanent easement. The City's appraisers concluded that in the after condition, the size of the remainder parcel would be significantly reduced and the improvements significantly impacted. Thus, the appraisers concluded that the approximate 8,985 square foot property remaining after construction of the proposed project would be of little or no utility or economic value to the record owners and thus these areas constituted an "uneconomic remnant". This uneconomic remnant would not satisfy the minimum lot size for building in the City's Service Commercial (SC) zone, building set back, site coverage or parking requirements. C. Pursuant to Government Code Section 7267.2, on March 22, 2011, the City Council set just compensation for the permanent easement and the Subject Property at the fair market value as determined by the City's independent appraiser based on a February 7, 2011 date of value. The City Council also authorized the Director of Public Works/City Engineer to make offers and negotiate the acquisition of the Subject Property. D. On May 11, 2011, the City extended a written offer to the record owners Richard B. Gurrola and Valerie M. Gurrola, Trustees of the Gurrola Family Trust Under Declaration Dated Dec. 27, 2001, Robert A. Gurrola, Gary S. Gurrola, and Richard B. Gurrola II to purchase the Subject Property in fee for the fair market value. Based on the impact of the Proposed Project on the Subject Property and the valuation analysis discussed above, the City offered to purchase the Subject Property in fee. E. City staff and the record owners negotiated the City's proposed purchase of the Subject Property and have reached an agreement, subject to approval of the City Council, for the City's acquisition in fee of the Subject Property for the purchase price of $1,242,000. The purchase price is within the amount the City Council previously authorized for negotiation and purchase of the Subject Property. The record owners agreed to sell the Subject Property in fee and have informed City staff that they do not wish to retain the uneconomic remnant described above. F. At its meeting of February 27, 2001, the City Council approved the Negative Declaration for Environmental Assessment No. 75 for the temporary low flow crossing at Murrieta Creek and the proposed permanent crossing at Murrieta Creek, which is the Proposed Project. The City Council found that based on the record before it (1) the Negative Declaration for Environmental Assessment No. 75 was prepared in compliance with the California Environmental Quality Act ("CEQA"); (2) there is no substantial evidence that the Proposed Project will have a significant effect on the environment that cannot be adequately and feasibly mitigated; and (3) the Negative Declaration for Environmental Assessment No. 75 reflects the independent judgment and analysis of the City Council. Section 2. Approval of Purchase and Sale Agreement. The City Council of the City of Temecula hereby approves that certain agreement entitled "Purchase and Sale Agreement and Joint Escrow Instructions Between the City of Temecula and Richard B. Gurrola and Valerie M. Gurrola, Trustees of the Gurrola Family Trust Under Declaration Dated Dec. 27, 2001, Robert A. Gurrola, Gary S. Gurrola, and Richard B. Gurrola II in connection with the Murrieta Creek Bridge and Overland Drive Extension to Diaz Road — PW00-26" ("Agreement"), with such changes in the Agreement as may be mutually agreed upon by the record owners and the City Manager as are in substantial conformance with the form of such Agreement on file in the Office of the City Clerk. The Mayor is hereby authorized to execute the Agreement on behalf of the City. A copy of the final Agreement when executed by the Mayor shall be placed on file in the Office of the City Clerk. This approval of the Agreement is not an announcement of the City's intent to acquire any other real property interests for the Proposed Project and does not commit the City to acquire any other real property interests for the Proposed Project. Section 3. City Manager's Authority. The City Manager (or his designee), is hereby authorized, on behalf of the City, to take all actions necessary and convenient to carry out and implement the Agreement, and to Administer the City's obligations, responsibilities and duties to be performed under the said Agreement, including but not limited to, approval and execution on behalf of the City for assignment of the lease, right of entry and access agreement, grant deed, acceptances, escrow instructions, certificates, estoppel letters, and other similar agreements and documents as contemplated by or described in the Agreement or as necessary and convenient to implement the Agreement . Section 4. Environmental Analysis. The environmental effects of the acquisition of the Subject Property were studied as an integral part of the Negative Declaration for Environmental Assessment No. 75 approved for the Proposed Project. The findings made by the City Council at its meeting on February 27, 2001 in approving the Negative Declaration for Environmental Assessment No. 75 are the appropriate findings for the acquisition of the Subject Property. In connection with the attached Agreement, City staff reviewed all of the environmental documentation prepared in connection with the Proposed Project, including, but not limited to, the Negative Declaration, the initial environmental study, the mitigation monitoring program and agenda report relating to the approval of the Negative Declaration. Pursuant to the criteria of Section 15162 of the CEQA Guidelines and Section 21166 of the Public Resources Code, City staff concluded that no substantial changes have occurred in the Proposed Project, no substantial changes have occurred in the circumstances under which the project is undertaken, and that the City has obtained no new information of substantial importance that would require further environmental analysis, including the fact that no mitigation measures previously found not to be feasible would in fact be feasible. These environmental findings are the appropriate findings with respect to the proposed acquisition of the Subject Property. Section 5. Certification. The City Clerk shall certify the adoption of this resolution. PASSED, APPROVED, AND ADOPTED by the City Council of the City of Temecula this 26th day June of, 2012. Chuck Washington, Mayor ATTEST: Susan W. Jones, MMC City Clerk [SEAL] STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ) ss CITY OF TEMECULA ) I, Susan W. Jones, MMC, City Clerk of the City of Temecula, do hereby certify that the foregoing Resolution No. 12- was duly and regularly adopted by the City Council of the City of Temecula at a meeting thereof held on the 26th day of June, 2012, by the following vote: AYES: COUNCIL MEMBERS: NOES: COUNCIL MEMBERS: ABSENT: COUNCIL MEMBERS: ABSTAIN: COUNCIL MEMBERS: Susan W. Jones, MMC City Clerk PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS BETWEEN THE CITY OF TEMECULA AND RICHARD B. GURROLA AND VALERIE GURROLA, TRUSTEES OF THE GURROLA FAMILY TRUST UNDER DECLARATION DATED DEC. 27, 2001, ROBERT A. GURROLA, GARY S. GURROLA, AND RICHARD B. GURROLA II IN CONNECTION WITH THE MURRIETA CREEK BRIDGE AND OVERLAND DRIVE EXTENSION TO DIAZ ROAD - PW00-26 This Purchase and Sale Agreement and Joint Escrow Instructions Between the City of Temecula and Richard B. Gurrola and Valerie M. Gurrola, Trustees of the Gurrola Family Trust Under Declaration Dated Dec. 27, 2001, Robert A. Gurrola, Gary S. Gurrola, and Richard B. Gurrola II in connection with the Murrieta Creek Bridge and Overland Drive Extension to Diaz Road, PW00-26 ("Agreement") is dated and entered into as of , 2012 ("effective date") by and between RICHARD B. GURROLA AND VALERIE GURROLA, TRUSTEES OF THE GURROLA FAMILY TRUST UNDER DECLARATION DATED DEC. 27, 2001 ("Trust") AS TO AN UNDIVIDED 55.23% INTEREST, ROBERT A. GURROLA, A MARRIED MAN AS HIS SOLE AND SEPARATE PROPERTY AS TO AN UNDIVIDED 18.57% INTEREST, GARY S. GURROLA, A SINGLE MAN AS TO AN UNDIVIDED 18.57%, AND RICHARD B. GURROLA II, AN UNMARRIED MAN AS TO AN UNDIVIDED 7.63%, ALL AS TENANTS IN COMMON (referred to below collectively as "Sellers") and the CITY OF TEMECULA, a municipal corporation (referred to below as "Buyer" or "City"), and constitutes an agreement to purchase and sell real property between the parties and the parties' joint escrow instructions directed to First American Title Insurance Company ("Escrow Holder"). RECITALS A. Sellers are the record fee owners of the real property commonly known as 27495 Enterprise Circle West, Temecula, California, and identified as Riverside County Tax Assessor's Parcel Number 921-480-013 and all improvements on this real property, including the approximate 10,000 square foot industrial building and includes any and all rights of ingress and egress, and all easement rights and covenants, together with all rights to the reciprocal driveway easement, all as more particularly set forth in the Declaration of Protective Covenants, Recorded October 14, 1986 as Instrument No. 254851 of Official Records of Riverside County, California, as modified by the Amendment of Declaration of Protective Covenants, Recorded May 20, 1987 as Instrument No. 141902 of Official Records of Riverside County, California (referred to below as the "Property"). The Property is more particularly described on Exhibit "A" hereto and depicted on Exhibit "B" hereto. B. On May 11, 2011, the City sent a written offer to Sellers pursuant to Government Code Section 7267.2 to purchase certain real property interests on the larger parcel for a public use, namely for the City's proposed construction of the proposed Murrieta Creek Bridge and Overland Drive Extension to Diaz Road - PW00-26 ("proposed project"). The proposed project would extend Overland Drive from Commerce Center to Diaz Road with a bridge over Murrieta -1- 11086-0166113 79177v9.doc Creek. The purpose of the proposed project is to improve safety and traffic circulation in the area. C. The City's offer letter explained that the construction of the proposed project would require the acquisition of an approximate 16,700 square foot permanent easement on the Property for public street purposes and all uses necessary or convenient thereto. The proposed project would require the demolition of the existing approximate 10,000 square foot industrial building and would create a total approximate 8,985 square foot remainder parcel that consists of an approximate 3,207 square foot remainder on one side and an approximate 5,778 square foot remainder on the other side of the 16,700 square foot permanent easement. The City's offer further explained that the appraisers concluded that in the after condition, the size of the remainder parcel would be significantly reduced and the improvements significantly impacted. Thus, the appraisers concluded that the approximate 8,985 square foot property remaining after construction of the proposed project would be of little or no utility or economic value to Sellers and thus these areas constituted an "uneconomic remnant". This uneconomic remnant would not satisfy the minimum lot size for building in the City's Service Commercial (SC) zone, building set back, site coverage or parking requirements. Accordingly, the City offered to purchase the Property in fee. Sellers informed Buyer that they did not wish to retain the uneconomic remnant and agreed to sell to Buyer the Property in fee. D. The parties acknowledge that the City is authorized to acquire real property by eminent domain for a public use, including public street purposes and all uses necessary or convenient thereto, pursuant to the authority conferred upon the City of Temecula by California Constitution Article 1, Section 19, California Government Code Sections 37350, 37350.5, 37351, 40401 and 40404 and California Code of Civil Procedure Section 1230.010 et seq. (Eminent Domain Law). The parties also acknowledge that the Proposed Project is a public use for which Buyer has the authority to exercise the power of eminent domain. The parties further acknowledge that the City Council of the City of Temecula, as the City's governing body, has sole discretion to make the findings required by Code of Civil Procedure Section 1240.030 for the adoption of a resolution of necessity pursuant to the Eminent Domain Law. (Code of Civil Procedure Section 1245.220). If Sellers and the City had not reached an agreement for the City's purchase of the Property, City staff would have recommended to the City Council that it consider the adoption of a resolution of necessity authorizing the initiation of eminent domain proceedings to acquire the Property in accordance with the Eminent Domain Law. The City Council, however has the exclusive and sole discretion to adopt a resolution of necessity. The adoption of any such resolution of necessity would require the City's compliance with applicable law, including Government Code Section 7260 et seq. and the Eminent Domain Law. Sellers are solely responsible for consulting their tax advisors or seeking a letter ruling from the Internal Revenue Service regarding the applicability of 26 U.S.C. Section 1033 to Sellers' sale of the Property to the City. The City makes no express or implied representation regarding the applicability of 26 U.S.C. Section 1033 to this transaction. E. Sellers desire to sell, and Buyer desires to buy, the Property, including all improvements thereon, in fee on the terms and conditions set forth herein. NOW THEREFORE, in consideration of the above Recitals, which are incorporated herein by this reference, and for other valuable consideration, the receipt of which is hereby -2- 11086-0166\1379177v9.doc acknowledged, Buyer and Sellers agree to the following: 1. Purchase and Sale; Assignment of Lease. On the Close of Escrow (as defined in Section 2 below), Sellers agree to (i) sell the Property in fee to Buyer, and (ii) assign to Buyer all of Sellers' interest in the Lease (as hereafter defined), and Buyer agrees to buy the Property in fee from Sellers and accept the assignment of Sellers' interest in the Lease, on the terms and conditions set forth in this Agreement. Sellers covenant that the following Lease is the only lease affecting the Property or any portion of the Property: AIR Commercial Real Estate Association Standard Industrial Commercial Single -Tenant Lease -- Gross dated May 25, 2012 by and between Richard B. Gurrola and Valerie Gurrola, Trustees of the Gurrola Family Trust and Temecula Marine Center, Inc., a copy of which is attached as Exhibit "1" to the Form of Assignment of Lease (Exhibit "D") to this Agreement. 2. Opening and Close of Escrow. Within five business days after the effective date of this Agreement, the City will deliver a fully executed certified copy of this Agreement to Escrow Holder. For purposes of this Agreement, Opening of Escrow means the date on which Escrow Holder receives a fully executed certified copy of this Agreement from Buyer and Sellers. The parties can execute the Agreement in counterparts as set forth in Section 21.e. below. This Agreement shall serve as the instructions to Escrow Holder for consummation of the transaction contemplated by this Agreement. Sellers and Buyer agree to execute any such additional and supplementary escrow instructions as may be appropriate to enable Escrow Holder to comply with the terms of this Agreement; provided, however, that in the event of any conflict between the terms and provisions of this Agreement and the terms and provisions of any supplementary escrow instructions, the terms and provisions of this Agreement shall control. The Close of Escrow means the date on which the Grant Deed is delivered and recorded in the Official Records of the County of Riverside. The Close of Escrow will occur after the performance of all duties and obligations under this Escrow that are required to take place prior to Close of Escrow. The Close of Escrow will occur within 15 business days after the expiration of the Due Diligence Period (as defined in Section 9). Before the Close of Escrow, all risk of loss and damage to the Property from any source whatsoever will be solely that of Sellers. 3. Purchase Price. The total purchase price that Buyer will pay to Sellers for the Property is the sum of $1,242,000 for the fair market value of the land and improvements on the Property (referred to below as the "Purchase Price"). No attempt has been made to assign value to the lesser interest in the Property. Thus, the Purchase Price is the total price for the Property without distinction or separation for various interests that may be held in the Property. Sellers are responsible for any apportionment or allocation of the Purchase Price if required for any separately held interests that may exist in the Property. 4. Title and Title Insurance. Upon the Opening of Escrow, Escrow Holder will obtain and issue a title commitment for the Property. Escrow Holder will also request two copies each of all instruments identified as exceptions on said title commitment. Upon receipt of the foregoing, Escrow Holder will deliver these instruments and the title commitment to Buyer and Sellers. Escrow Holder will insure Buyer's interest in the Property, which is described above in Section A of the Recitals and on Exhibits "A" and "B" to this Agreement at the Close of Escrow by a CLTA Owner's Standard Coverage Policy of Title Insurance (or an ALTA Extended Coverage Form of Title Policy if Buyer elects such coverage as provided below in Section 4.b.) -3- 11086-0166\ 13 79177v9.doc in the amount of the Purchase Price (the "Policy"). Buyer will pay for the cost of the Policy. a. The Policy provided for pursuant to this Section will insure Buyer's interest in the Property free and clear of all liens, encumbrances, restrictions, and rights-of-way of record, subject only to the following permitted conditions of title ("Permitted Title Exceptions"): (i) General and special real property taxes and assessments for the then current tax fiscal year that are a lien not then due and payable. (ii) The applicable zoning, building and development regulations of any municipality, county, state or federal jurisdiction affecting the Property; and (iii) Those non -monetary exceptions approved by Buyer within 15 business days after the date Buyer receives the title commitment and legible copies of all instruments noted as exceptions therein. If Buyer unconditionally disapproves any such exceptions, Escrow will thereupon terminate, all funds deposited therein will be refunded to Buyer (less Buyer's share of escrow cancellation charges), and this Agreement will have no further force or effect. If Buyer conditionally disapproves any such exceptions, then Sellers will use Sellers' best efforts to cause such exceptions to be removed by the Close of Escrow. If such conditionally disapproved non -monetary exceptions are not removed by the Close of Escrow, Buyer may, at Buyer's option, either accept the Property subject to such encumbrances, or terminate the Escrow and receive a refund of all funds deposited into Escrow (less Buyer's share of escrow cancellation charges), if any, and this Agreement will thereupon be of no further force or effect. At the Close of Escrow, Buyer's interest in the Property will be free and clear of all monetary encumbrances. (iv) Any exceptions directly or indirectly caused by Buyer or Buyer's agents, employees or contractors. b. Buyer will have the option of obtaining an ALTA Extended Coverage Form Policy of Title Insurance (referred to below as the "ALTA Extended Policy") or a CLTA Standard Coverage Form Owners Policy of Title Insurance. If Buyer, in its sole discretion, determines to obtain an ALTA Extended Policy, Buyer will, at its expense, procure an ALTA survey. Buyer will also pay the cost of any such ALTA Extended Policy. 5. Deposit of Purchase Price and Escrow Funds by Buyer. Buyer covenants and agrees to deposit the balance of the Purchase Price with Escrow Holder within 15 business days after the date this Agreement is fully executed by the parties. Buyer covenants and agrees to deposit with Escrow Holder, prior to the Close of Escrow, such funds as are required for Escrow costs and expenses payable by Buyer under this Agreement. 6. Deposit of Documents in Escrow by Sellers. a. Grant Deed. Sellers covenant and agree to deposit with Escrow Holder within 15 business days after the date this Agreement is fully executed by the parties, the Grant Deed granting to City the Property ("Grant Deed") duly executed and acknowledged by Sellers. -4- 11086-0166\I3 79177v9.doc The form of the Grant Deed is attached as Exhibit "C" to this Agreement and is incorporated in this Agreement by this reference. Buyer will accept said executed Grant Deed prior to recording. b. Certification of Non -Foreign Status. Sellers covenant and agree to deliver to Escrow a certification of Non -Foreign Status in accordance with Internal Revenue Code Section 1445, prior to the Close of Escrow. c. Assignment of Lease. Sellers covenant and agree to deliver to Escrow an Assignment of Lease in the form attached hereto as Exhibit "D". d. Sellers Estoppel Certificate. Sellers covenant and agree to deposit with Escrow Holder the executed original of the Sellers Estoppel Certificate for the Lease (as defined hereafter) in the form attached hereto as Exhibit "E" on or before the date on which Sellers provide to Buyer the Agreement executed by Sellers. e. Tenant Estoppel Certificate. Tenant shall deposit with Buyer or Sellers the executed original of the Tenant Estoppel Certificate for the Lease in the form attached hereto as Exhibit "F" on or before the date on which Sellers provide to Buyer the Agreement executed by Sellers. f. Estoppel Certificate from Rancon Commerce Center. Sellers covenant and agree to obtain and deliver to Escrow an estoppel certificate from the Association for the Rancon Commerce Center certifying that the Property and Sellers are not in default under any obligations under any conditions, covenants or restrictions encumbering the Property pursuant to the Declaration of Protective Covenants for Rancon Commerce Center, Phases 2, 3 & 4, Inc. An Industrial/Commercial Business Park recorded on October 14, 1986 as Instrument Number 254851 of Official Records of the County of Riverside, and any and all amendments and or modifications to said Declaration of Protective Covenants. g. Tenant's Consent for the Right of Entry. Sellers covenant and agree to obtain in writing Tenant's consent for the Right of Entry discussed in Section 9 below. The form of Tenant's consent is attached as Exhibit "1" to the form of the Right of Entry (Exhibit "G" hereto). h. Proof of Sellers' Authorization. Such proof of Sellers' authorization to enter into this transaction as Escrow Holder may reasonably require to issue the Policy. 7. Authorization to Record Documents and Disburse Funds. Escrow Holder is hereby authorized to record the documents and disburse the funds and documents called for hereunder upon the Close of Escrow, provided each of the following conditions has then been fulfilled: a. Escrow Holder can issue in favor of Buyer the Policy, showing the City's fee interest in the Property in favor of Buyer, subject only to the Permitted Title Exceptions. Escrow Holder will use the proceeds of the Purchase Price to obtain a full reconveyance of any monetary liens encumbering the Property, so that the Property is free and clear of monetary liens and encumbrances at the Close of Escrow. Escrow Holder will obtain final approval from Sellers regarding the disbursement of the proceeds prior to disbursing any such proceeds to the -5- 1 1086-0166\1379177v9.doc holder(s) of the monetary liens encumbering the Property. Sellers' final approval of said disbursement will not unreasonably be withheld. b. City will have deposited with Escrow Holder the Purchase Price and Escrow Charges. c. Escrow Holder will have received Buyer's notice of approval or satisfaction or waiver of all of the contingencies to Buyer's obligations hereunder, as provided for below in Section 13; and d. Sellers will have deposited in Escrow the executed Grant Deed and other documents as required by Section 6. Unless otherwise instructed in writing, Escrow Holder is authorized to record at the Close of Escrow any instrument delivered through this Escrow if necessary or proper for issuance of the Policy, including the Grant Deed. 8. Escrow Charges and Prorations. a. Buyer will pay for the cost of the CLTA Owner's Standard Coverage Policy of Title Insurance (or at Buyer's option the cost of the ALTA Extended Policy), Escrow costs and Escrow Holder's customary out-of-pocket expenses for messenger services, long distance telephone, etc. Buyer will pay for recording the Grant Deed, any documentary or other local transfer taxes, and any other recording fees. If the Escrow fails to close through no fault of either party, Buyer will pay all Escrow cancellation charges. b. Taxes, assessments, and rental payments will be apportioned and prorated for the Property as of 12:01 a.m., on the day on which the Close of Escrow occurs, as if Buyer were vested with fee title to the Property during the entire day upon which Close of Escrow occurs. If taxes and assessments for the current year have not been paid before the Close of Escrow, Sellers will be charged at the Close of Escrow an amount equal to that portion of such taxes and assessments that relates to the period before the Close of Escrow and Buyer will pay the taxes and assessments prior to their becoming delinquent. Any such apportionment made with respect to a tax year for which the tax rate or assessed valuation, or both, have not yet been fixed will be based upon the tax rate and/or assessed valuation last fixed. To the extent that the actual taxes and assessments for the current year differ from the amount apportioned at the Close of Escrow, the parties will make all necessary adjustments by appropriate payments between themselves following the Close of Escrow. Sellers will pay all delinquent taxes and assessments (and any penalties therein) for periods prior to the Close of Escrow, if any, affecting the Property. c. All prorations will be determined on the basis of a 365 -day year. The provisions of this Section 8 will survive the Close of Escrow. 9. Due Diligence Period and Right of Entry and Access Agreement. During the period commencing on the effective date of the Right of Entry and Access Agreement and the Consent of Tenant ("commencement date") and ending at 5:00 p.m., 30 calendar days after said commencement date (referred to as the "Due Diligence Period"), Buyer may inspect the Property -6- 1 1086-016611379177v9.doc as necessary for the purpose of making inspections and other examinations of the Property, including, but not limited to, the right to perform soil and geological tests of the Property and an environmental site assessment thereof. Buyer will give Sellers and Tenant ten (10) hour's written notice before going on the Property. Buyer's physical inspection of the Property shall be conducted during normal business hours. No invasive testing or boring shall be done by Buyer without the prior written notification of Sellers and Sellers' written permission of the same, which permission shall not be unreasonably withheld. To evidence Buyer's right of entry to the Property, the parties shall execute a Right of Entry Agreement in substantially the form attached hereto as Exhibit "G". Pursuant to Section 6 above, Sellers agree to obtain written consent from Tenant Temecula Marine Center, Inc., the occupant of the Property in connection with this Right of Entry. The form of the Tenant Consent to Right of Entry is attached as Exhibit "1" to the Right of Entry (Exhibit "G" hereto). 10. Warranties and Representations of Sellers; Indemnity. Sellers hereby represent and warrant to Buyer the following, it being expressly understood and agreed that all such representations and warranties are to be true and correct in all material respects as of the Effective Date. If the Sellers acquire additional knowledge regarding the matters that are the subject of the warranties or representations contained in this Section 10 that would cause any of such warranties or representations to be incorrect in any material respect prior to the Close of Escrow, Sellers shall give prompt written notice thereof to Buyer. Within seven business days following receipt of such notice, Buyer may elect to cancel this Agreement and receive a refund of the funds deposited in escrow, except for any escrow cancellation charges. As of the Close of Escrow, the warranties and representations contained in this Section 10 shall be true and correct in all material respects, subject to any matters disclosed in writing by Sellers to Buyer as provided in this Section and will survive the Close of Escrow: a. To Sellers' best knowledge, that (i) on the Close of Escrow the Property will be free and clear of any and all hazardous or toxic substances, materials, and waste, including, but not limited to, asbestos; (ii) all businesses on the Property have disposed of their waste in accordance with all applicable statutes, ordinances, and regulations; and (iii) Sellers have no notice of any pending or threatened action or proceeding arising out of the condition of the Property or alleged violation of environmental, health or safety statutes, ordinance or regulations. Sellers will indemnify and hold Buyer harmless for a breach of this warranty and representations. Hazardous Substances are defined below in Section 15. b. To Sellers' best knowledge, Sellers have not received any written notice, warning, notice of violation, administrative complaint, judicial complaint, or other formal or informal notice alleging that conditions on the Property are or have been in violation of any Environmental Law as described below in Section 15, or informing Sellers that the Property is subject to investigation or inquiry regarding Hazardous Substances (as defined in Section 15) on the Property or the potential violation of any Environmental Law(s) (as defined in Section 15). c. To Sellers' best knowledge, Sellers are the sole owners of the Property free and clear of all liens, claims, encumbrances, easements, encroachments from adjacent properties, encroachments by improvements or vegetation on the Property onto adjacent property, or rights of way of any nature, other than those that may appear on the title -7- 11086-0166113 79 l 77v9. doc commitment. Sellers will not further encumber the Property or allow the Property to be further encumbered prior to the Close of Escrow. d. Neither this Agreement nor anything provided to be done hereunder, including the transfer of the Property to Buyer, violates or will violate any contract, agreement or instrument to which Sellers are a party, or which affects the Property, and the Sellers' grant of the fee interest in the Property to Buyer pursuant to this Agreement does not require the consent of any party not a signatory hereto. e. Sellers have no knowledge of any pending, threatened or potential litigation, action or proceeding against Sellers or any other party before any court or administrative tribunal that involves the Property. f. Except as disclosed in the title commitment referred to in Section 4, there are no mechanics', materialmen's or similar claims or liens presently claimed or which will be claimed against the Property or work performed or commenced prior to the date of this Agreement. Sellers agree to hold Buyer harmless from all costs, expenses, liabilities, losses, charges, fees, including attorney fees, arising from or relating to any such lien or any similar lien claimed against the Property and arising from work performed or commenced prior to the Close of Escrow. g. Except for the Lease (AIR Commercial Real Estate Association Standard Industrial Commercial Single -Tenant Lease -- Gross dated May 25, 2012 by and between Richard B. Gurrola and Valerie Gurrola, Trustees of the Gurrola Family Trust and Temecula Marine Center, Inc.), there are no leases, licenses, occupancy agreements, or other agreements or arrangements, oral or written, demising space in, providing for the use, possession, or occupancy of, or otherwise similarly affecting or relating to the Property, or any portion of the Property. (i) Sellers represent and warrant that the Lease attached as Exhibit "1" to the Form of Sellers Estoppel Certificate (Exhibit "E" to this Agreement) is the only written instrument pertaining to the Lease and that no other written agreement(s) exist between Sellers and Tenant regarding the Lease; (ii) Sellers represent and warrant that the Premises demised under the Lease consists of 6,818 square feet of the 9,916 square foot industrial building, including 12 unreserved parking spaces on the Property ("Premises"); (iii) Sellers represent and warrant that there are no other leases, contracts or agreements affecting the approximate 3,098 square foot remainder portion of the Property and remaining unreserved parking spaces that are not the subject of the Lease; (iv) Sellers represent and warrant that as of the Effective Date of this Agreement, Tenant has no option to extend the Lease beyond the termination date of September 30, 2013; (v) Sellers represent and warrant that as of the Effective Date of this Agreement, Tenant has no option to purchase or right of first refusal with respect to the Property, or any portion of the Property; -8- 11086-0166\ 1379177v9.doc (vi) Sellers represent and warrant that the current monthly rent for the Premises demised under the Lease is $5,454 due on the 1st of each month; (vii) Sellers represent and warrant that the monthly rent for the Premises demised under the Lease increases to $5,618 effective October 1, 2012; (viii) Sellers represent and warrant that there are no written or verbal agreements between Tenant and Landlord that would require Landlord to compensate Tenant at the termination of the Lease for any leasehold improvements made by Tenant to the Premises or the Property. Under the Lease, the Landlord is entitled to any and all compensation for any leasehold improvements, including any improvements identified by the Lease as Alterations and Utility Installations made by Tenant to the Premises or the Property; (ix) Sellers represent and warrant that Tenant has not provided Sellers any verbal or written notice or agreement, and that Sellers have not provided Tenant any verbal or written notice or agreement, and that Sellers and Tenant have not engaged in any course of conduct with respect to the Lease, that is not accurately and completely described in the representations and warranties contained in this Section 10 or that would cause such representations or warranties to be untrue or misleading in any material respect. h. To the fullest extent permitted by law, Sellers shall indemnify, defend and hold harmless Buyer, and its elected and appointed council members, officials, officers, boards, commissions, consultants, agents and employees, and attorneys from and against any and all claims, demands, obligations, damages, actions, causes of action, suits, losses, judgments, fines, penalties, liabilities, costs, and expenses (including, without limitation, reasonable attorneys' fees, expert witness fees, disbursements and court costs) of every kind and nature whatsoever (collectively, "Claims"), which may arise out of, result from, or in any matter be related (directly or indirectly) to the failure of the warranties or representations of Sellers contained in this Section 10 to be true and correct in all material respects. The indemnification provisions of this Section 10 shall survive the Close of Escrow for the longest period permitted by law and shall not be deemed merged or extinguished upon the recordation of the Grant Deed. The provisions of this Section 10 shall survive the Close of Escrow or the termination of this Agreement for a period of two (2) years.. 11. Representations and Warranties of Buyer. Buyer hereby represents and warrants to Sellers the following, it being expressly understood and agreed that all such representations and warranties are to be true and correct as of the Close of Escrow and shall survive the Close of Escrow: a. Buyer has taken all required action to permit it to execute, deliver, and perform its obligations under this Agreement. b. Buyer has the power and authority to execute and deliver this Agreement and carry out its obligations hereunder and consummate the transaction contemplated herein. 12. City's Full Payment of Purchase Price. -9- 11086-0166\1379177v9.doc a. It is understood and agreed between Sellers and Buyer that the City's payment to Sellers of the Purchase Price set forth in this Agreement is an all-inclusive settlement and is the full and complete consideration and payment of just compensation for the City's acquisition of the Property in fee, including all improvements on the Property. The Purchase Price is also full and complete consideration for all claims arising in connection with or out of Buyer's acquisition of the Property or the proposed project for which Buyer is acquiring the Property claims for severance and other damages, inverse condemnation, precondemnation damages, attorney's fees, interest, loss of rents, improvements pertaining to the realty, any other damages of every kind and nature suffered by Sellers by reason of the City's acquisition of the Property or the proposed project for which the City is acquiring the Property in fee, and all costs and expenses whatever in connection therewith. Accordingly, Sellers and Buyer agree that Sellers shall not seek from Buyer any additional compensation in connection with any damages suffered by Sellers due to any lawful or unlawful early termination of the Lease or vacation of the Premises by Tenant. b. Relocation Assistance and Benefits. The parties acknowledge that Buyer has provided to Sellers information regarding relocation assistance and benefits under the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1070 (42 U.S.C. 4601 et seq.) ("Uniform Act"), if applicable, or under Title 1, Division 7, Chapter 1 of the Government Code of the State of California (Section 7260 et seq.) ("California Relocation Law"). The parties further acknowledge that Sellers do not occupy the Property and are thus not considered "displaced persons" as defined in the Uniform Act and California Relocation Law. As indicated above, the Tenant doing business as Temecula Marine Center, Inc. occupies the Premises demised under the Lease affecting the Property. As such, the business tenant is the "displaced person" that would be required to move from the Property as a direct result of the City's acquisition of the Property for the proposed project, which is a public use. Thus, any obligations that Buyer has to provide relocation assistance and benefits in connection with Buyer's acquisition of the Property for the project are for the benefit of "displaced persons". Accordingly, it is further understood and agreed by Sellers that Buyer will have no further obligation to Sellers under any federal or state relocation laws or regulations, including without limitation, the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (42 U.S.C. 4601 et seq.), if applicable, or under Title 1, Division 7, Chapter 1 of the Government Code of the State of California (Section 7260 et seq.), or the Relocation Assistance and Real Property Acquisition Guidelines (Chapter 6 of Title 25 of the California Code of Regulations). c. Leasehold Improvements. The parties acknowledge that Buyer has provided to Sellers a copy of the appraisal of the furniture, fixtures and equipment dated July 18, 2011 titled Appraisal of Temecula Marine Center prepared by Crockett & Associates, Ltd. ("Crockett appraisal"). Sellers acknowledge and agree that the items comprising the Leasehold Improvements identified on page 5 of the Crockett appraisal are items considered by the City's independent appraisers in their fair market analysis of the value of the Property and on which the City's offer to purchase the Property was based. Sellers acknowledge that they received a copy of the appraisal summary statement with the City's offer letter of May 11, 2011. A copy of page 5 of the Crockett Appraisal is attached hereto as Exhibit "H" and is incorporated herein by this reference. Sellers also acknowledge and agree that they have reviewed the list of items comprising the attached fixtures and equipment described on pages 1 and 2 of the Crockett -10- 11086-0166\1379177v9.doc Appraisal and that they have no interest in these items or any compensation, if any, to be awarded for such items. Sellers further acknowledge and agree that they have reviewed the list of items comprising the moveable furniture, fixtures and equipment described on pages 6-16 of the Crockett Appraisal and that Sellers have no interest in these items or any compensation, if any, to be awarded for such items. d. Loss of Business Goodwill. The parties acknowledge that Buyer provided to Sellers a copy of Code of Civil Procedure Section 1263.510 with the City's offer letter dated May 11, 2011. Sellers agree and acknowledge that they do not occupy the Property or operate a business on the Property. Accordingly, Sellers agree and acknowledge that they are not entitled to any compensation for loss of goodwill in connection with the City's acquisition of the Property pursuant to Code of Civil Procedure Section 1263.510. In order to be compensated for loss of goodwill, Code of Civil Procedure Section 1263.510 requires the owner of an existing business operating on the Property to prove the elements set forth in that Section. Code of Civil Procedure Section 1263.510 provides as follows: "(a) The owner of a business conducted on the property taken, or on the reminder if such property is part of a larger parcel, shall be compensated for loss of goodwill if the owner proves all of the following: (1) The loss is caused by the taking of the property or the injury to the remainder. (2) The loss cannot be prevented by a relocation of the business or by taking steps and adopting procedures that a reasonably prudent person would take and adopt in preserving goodwill. (3) Compensation for the loss will not be included in payments under Section 7262 of the Government Code. (4) Compensation for the loss will not be duplicated in the compensation otherwise awarded to the owner. (b) Within the meaning of this article, `goodwill' consists of the benefits that accrue to a business as a result of its location, reputation for dependability, skill or quality, and any other circumstances resulting in probable retention of old or acquisition of new patronage." e. This Agreement is a voluntary agreement and Sellers on the Close of Escrow, on behalf of Sellers, Sellers' successors and assigns, fully release Buyer, its officials, counsel, employees, and agents, from all claims and causes of action by reason of any damage that has been sustained, or may be sustained, as a result of Buyer's efforts to acquire the Property in fee or any preliminary steps thereto. f. Sellers acknowledge that they may have sustained damage, loss, costs or expenses which are presently unknown and unsuspected, and such damage, loss, costs or expense which may have been sustained, may give rise to additional damages, loss, costs or expenses in the future. Nevertheless, Sellers hereby acknowledge that this Agreement has been negotiated -11- 11086-0166\1379177v9.doc and agreed upon in light of that situation, and hereby expressly waive any and all rights that Sellers may have under California Civil Code Section 1542, or under any statute or common law or equitable principle of similar effect. California Civil Code Section 1542 provides 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 THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR." Sellers' Initials: Buyer's Initials: This Section 12 will survive the Close of Escrow. 13. Buyer's Conditions/Contingencies. For the benefit of Buyer, the Close of Escrow and the Buyer's obligation to consummate the purchase of the Property will be contingent upon and subject to the occurrence of all of the following (or Buyer's written waiver thereof, it being agreed that Buyer can waive any or all such conditions/contingencies) on or before the Close of Escrow: a. That as of the Close of Escrow the representations and warranties of Sellers contained in this Agreement are all true and correct. b. The delivery to Escrow Holder of all documents pursuant to Section 6 of this Agreement. c. Title Company's commitment to issue in favor of Buyer a CLTA Standard Coverage Owner's Policy of Title Insurance (or at Buyer's Option an ALTA Extended Policy) with liability equal to the Purchase Price showing Buyer's fee interest in the Property, subject only to the Permitted Title Exceptions. d. Buyer's approval prior to the Close of Escrow of any environmental site assessment, soils or geological reports, or other physical inspections of the Property that Buyer might perform pursuant to this Agreement prior to the Close of Escrow. If all foregoing conditions have not either been met to Buyer's sole satisfaction or expressly waived in writing by Buyer on or before the respective dates set forth in this Agreement, or if no date is set forth therein on or prior to the Close of Escrow, then this Agreement shall, at the option of Buyer,.become null and void, in which event, except as expressly set forth in this Agreement, neither party shall have any further rights, duties or obligations hereunder, and Buyer shall be entitled to the immediate refund of the Deposit less any applicable escrow cancellation costs. -12- 11086-016611379177v9.doc 14. Right of Termination. Notwithstanding anything to the contrary contained herein, and without limiting any other right of termination for the benefit of Buyer contained herein, the Buyer shall have the right, in the exercise of its sole and absolute discretion and upon written notice to the Sellers and Escrow Holder, to terminate this Agreement (a) at any time prior to the expiration of the Due Diligence Period for any reason or no reason whatsoever, and (b) at any time prior to the Close of Escrow upon the failure of any of the Buyer's conditions/contingencies described in Section 13, including but not limited to lack of consistency in the terms of the Lease. Upon such termination, all documents and monies deposited with Escrow Holder shall be immediately returned to the depositing party, except for any escrow cancellation charges. 15. Certain Definitions. a. The term "Hazardous Materials" shall mean and include the following, including mixtures thereof: any hazardous substance, pollutant, contaminant, waste, by-product or constituent regulated under the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. Section 9601 et seq.; oil and petroleum products and natural gas, natural gas liquids, liquefied natural gas and synthetic gas usable for fuel; pesticides regulated under the Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C. Section 136 et seq.; asbestos and asbestos -containing materials, PCBs and other substances regulated under the Toxic Substances Control Act, 15 U.S.C. Section 2601 et seq.; source material, special nuclear material, by- product material and any other radioactive materials or radioactive wastes, however produced, regulated under the Atomic Energy Act or the Nuclear Waste Policy Act of 1982; chemicals subject to the OSHA Hazard Communication Standard, 29 C.F.R. Section 1910.1200 et seq.; industrial process and pollution control wastes, whether or not hazardous within the meaning of the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq.; any substance defined as a "hazardous substance" in California Civil Code Section 2929.5(e)(2) or California Code of Civil Procedure Section 736(0(3); and any other substance or material regulated by any Environmental Laws. b. The term "Environmental Laws" shall mean and include all federal, state and local statutes, ordinances, regulations and rules in effect on or prior to the date hereof relating to environmental quality, health, safety, contamination and clean-up, including, without limitation, the Clean Air Act, 42 U.S.C. Section 7401 et seq.; the Clean Water Act, 33 U.S.C. Section 1251 et seq.; and the Water Quality Act of 1987; the Federal Insecticide, Fungicide, and Rodenticide Act 7 U.S.C. Section 136 et seq.; the Marine Protection, Research, and Sanctuaries Act, 33 U.S.C. Section 1401 et seq.; the National Environmental Policy Act, 42 U.S.C. Section 4321 et seq.; the Noise Control Act, 42 U.S.C. Section 4901 et seq.; the Occupational Safety and Health Act, 29 U.S.C. Section 651 et seq.; the Resource Conservation and Recovery Act 42 U.S.C. Section 6901 et seq.; as amended by the Hazardous and Solid Waste Amendments of 1984; the Safe Drinking Water Act, 42 U.S.C. Section 300f et seq.; the Comprehensive Environmental Response, Compensation and Liability Act 42 U.S.C. Section 9601 et seq. as amended by the Superfund Amendments and Reauthorization Act, the Emergency Planning and Community Right -to -Know Act and the Radon Gas and Indoor Air Quality Research Act; the Toxic Substances Control Act 15 U.S.C. Section 2601 et seq.; the Atomic Energy Act, 42 U.S.C. Section 2011 et seq.; and the Nuclear Waste Policy Act of 1982, 42 U.S.C. Section 10101 et -13- 11086-0166 \ 13- 11086-0166\ 1379177v9.doc seq.; and state and local environmental statutes and ordinances, with implementing regulations and rules in effect on or prior to the date hereof. 16. Destruction/Condemnation. In the event that prior to the Close of Escrow, the Property or any portion of the Property is damaged by fire, earthquake, or other casualty or is subject to a taking by a public entity, then Buyer shall have the right, by giving notice to Sellers within 15 calendar days after receiving written notice of such damage or taking, of either (a) to terminate this Agreement, in which case neither party shall have any further rights or obligations hereunder, except that (i) Buyer shall be responsible for Escrow Holder's escrow cancellation fees and or charges relating to the Policy and (ii) the Deposit and any other funds deposited into Escrow by Buyer, including interest thereon, shall be refunded to Buyer less any such escrow cancellation fees or charges relating to the Policy, or (b) to accept the Property in its then condition and proceed with the Close of Escrow, and to receive an assignment of all of Sellers' rights to any proceeds of insurance or condemnation awards payable by reason of such damage or taking. If Buyer elects to proceed under the preceding clause (b), there shall be no adjustment in the Purchase Price and Sellers shall not compromise, settle, or adjust any claims to such insurance or condemnation proceeds or awards. Sellers agree to give Buyer prompt written notice of any damage to or taking of the Property promptly after Sellers receive notice of same. 17. Evidence in Court Proceeding. The parties agree that the total Purchase Price of $1,242,000 or any inference of per square foot value of the fee value of the Property based on said Purchase Price will not be admissible as evidence of the fair market value of the Property in any eminent domain or other proceeding or litigation concerning the Property. 18. Notices. All notices and demands will be given in writing by certified mail, postage prepaid, and return receipt requested, or by personal delivery. Notices will be considered given upon the earlier of (a) personal delivery, (b) two business days following deposit in the United States mail, postage prepaid, certified or registered, return receipt requested, or (c) one business day following deposit with an overnight carrier service. A copy of all notices will be sent to Escrow Holder. The parties will address such notices as provided below for the respective party; provided that if any party gives notice in writing of a change of name or address, notices to such party will thereafter be given as demanded in that notice: BUYER: City of Temecula 41000 Main Street Post Office Box 9033 Temecula, California 92589-9033 Attention: Robert C. Johnson, City Manager COPY TO: Richards, Watson & Gershon Attention: Peter M. Thorson, City Attorney 355 South Grand Avenue 40th Floor Los Angeles, California 90071-3101 -14- 11086-0166\1379177v9.doc SELLERS: Richard B. and Valerie M. Gurrola Trustees Robert A. Gurrola Gary S. Gurrola Richard B. Gurrola II 5590 Rainbow Creek Road Fallbrook, California 92028-9616 ESCROW First American Title Insurance Company HOLDER: 3400 Central Avenue, Suite 100 Riverside, California 92506 Telephone No. (951) 787-1757 Fax No. (866) 558-2890 19. Further Documents. Each party will, wherever and as often as it shall be requested by the other party, execute, acknowledge, and deliver, or cause to be executed, acknowledged, and delivered, such further instruments and documents, including further escrow instructions, as may reasonably be necessary in order to complete the sale, conveyance, and transfer herein provided and to do any and all other acts and to execute, acknowledge, and deliver any and all documents as may be requested in order to carry out the intent and purpose of this Agreement. 20. Amendments. Any amendments to this Agreement will be effective only when duly executed by both Buyer and Sellers and deposited with Escrow Holder. 21. Miscellaneous. a. Applicable Law. This Agreement will be construed and interpreted under, and governed and enforced according to the laws of the State of California. b. Entire Agreement. This Agreement supersedes any prior agreement, oral or written, and together with the Exhibits hereto and any agreements delivered pursuant hereto, contains the entire agreement between Buyer and Sellers on the subject matter of this Agreement. No subsequent agreement, representation or promise made by either party hereto, or by or to any employee, officer, agent or representative of either party, will be of any effect unless it is in writing and executed by the party to be bound thereby. No person is authorized to make, and by execution hereof Sellers and Buyer acknowledge that no person has made, any representation, warranty, guaranty or promise except as set forth herein; and no such agreement, statement, representation or promise that is not contained herein will be valid or binding on Sellers or Buyer. c. Successors and Assigns. This Agreement will be binding upon and inure to the benefit of the heirs, executors, administrators, successors and assigns of the parties hereto. d. Time of Essence. The parties acknowledge that time is of the essence in this Agreement, notwithstanding anything to the contrary in the Escrow Holder's general Escrow instructions. -15- 11086-0166\1379177v9.doc e. Counterparts. This Agreement may be executed simultaneously in one or more counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument. For purposes of this Agreement, facsimile signatures will be deemed to be original signatures, and will be followed by the delivery of the original signature pages by U.S. Mail. f. No Third Party Beneficiary Rights. This Agreement is entered into for the sole benefit of Sellers and Buyer and no other parties are intended to be direct or incidental beneficiaries of this Agreement and no third party shall have any right in, under or to this Agreement. g. Remedies Not Exclusive and Waivers. No remedy conferred by any of the specific provisions of this Agreement is intended to be exclusive of any other remedy and each and every remedy will be cumulative and will be in addition to every other remedy given hereunder or now or hereafter existing at law or in equity or by statute or otherwise. The election of any one or more remedies will not constitute a waiver of the right to pursue other available remedies. h. Interpretation and Construction. Each party has reviewed this Agreement and that each has had the opportunity to have its respective counsel and real estate advisors review and revise this Agreement and that any rule of construction to the effect that ambiguities are to be resolved against the drafting party will not apply in the interpretation of this Agreement or any amendments or exhibits thereto. In this Agreement the neuter gender includes the feminine and masculine, and singular number includes the plural, and the words "person" and "party" include corporation, partnership, firm, trust, or association wherever the context so requires. The recitals and captions of the Sections and Subsections of this Agreement are for convenience and reference only, and the words contained therein will in no way be held to explain, modify, amplify or aid in the interpretation, construction or meaning of the provisions of this Agreement. i. Attorneys' Fees. If either party hereto incurs attorneys' fees in order to enforce, defend or interpret any of the terms, provisions or conditions of this Agreement or because of a breach of this Agreement by the other party, the prevailing party, whether by suit, negotiation, arbitration or settlement will be entitled to recover reasonable attorneys' fees from the other party. j. Severability. If any part, term or provision of this Agreement is held by a court of competent jurisdiction to be illegal or in conflict with any law, the validity of the remaining provisions will not be affected, and the rights and obligations of the parties will be construed and enforced as if this Agreement did not contain the particular part, term or provision held to be invalid. k. Exhibits. The exhibits and schedules attached hereto are incorporated in this Agreement by reference herein. 1. Joint and Several Obligations. The obligations of the Sellers under this Agreement shall be joint and several as to the individuals and the Trust comprising the Sellers. -16- 11086-0166\ l 379177v9.doc IN WITNESS WHEREOF, this Agreement is effective as of the day and year first written above. SELLERS RICHARD B. GURROLA AND VALERIE M. GURROLA, TRUSTEES OF THE GURROLA FAMILY TRUST UNDER DECLARATION DATED DEC. 27, 2001 AS TO AN UNDIVIDED 55.23% INTEREST Dated: By: Richard B. Gurrola, Trustee Dated: By: Valerie M. Gurrola, Trustee ROBERT A. GURROLA, A MARRIED MAN AS HIS SOLE AND SEPARATE PROPERTY AS TO AN UNDIVIDED 18.57% INTEREST Dated: By: Robert A. Gurrola GARY S. GURROLA, A SINGLE MAN AS TO AN UNDIVIDED 18.57% Dated: By: Gary S. Gurrola RICHARD B. GURROLA II, AN UNMARRIED MAN AS TO AN UNDIVIDED 7.63% Dated: By: Richard B. Gurrola -17- 11086-0166\1379177v9.doc BUYER CITY OF Temecula, a Municipal Corporation Dated: ATTEST: Susan W. Jones, MMC, City Clerk Approved as to form: RICHARDS, WATSON & GERSHON Peter M. Thorson, City Attorney DB 1IOX6d)166t1379I77v9.doc By: Chuck Washington, Mayor -18- Exhibit "A" [Legal Description of Property] 1 108 6-0166\ 1464915 v 1.doc February 8, 2010 Sheet 1 of 1 EXHIBIT "A" LEGAL DESCRIPTION RIGHT-OF-WAY ACQUISITION (OVERLAND DRIVE) LOT 13 OF TRACT MAP NO. 16178, SITUATED IN THE CITY OF TEMECULA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, RECORDED AUGUST 8, 1986 AS SHOWN BY MAP ON FILE IN BOOK 160, PAGES 102 THROUGH 104, INCLUSIVE, OF MAPS, OFFICIAL RECORDS OF RIVERSIDE COUNTY, STATE OF CALIFORNIA. CONTAINING: 25,686 SQ. FT. OR 0.590 ACRE, MORE OR LESS EXHIBIT "B" ATTACHED HERETO AND BY THIS REFERENCE MADE A PART HEREOF. THIS LEGAL DESCRIPTION WAS PREPARED BY ME OR UNDER MY DIRECTION IN CONFORMANCE WITH THE LAND SURVEYORS' ACT. BY:// `RE S. LUMMER, PLS 6641 (MY LICENSE EXPIRES 12-31-2011) //0 DATE Exhibit "B" [Plat Map of Property] 11086-0166\ 1464915 v 1. doc LEGEND //I INDICATES RIGHT-OF-WAY ACQUISITION AREA = 25,686 SQ. FT. OR 0.590 ACRE () INDICATES RECORD DATA PER TRACT 16178 (R) INDICATES RADIAL BEARING AD LANDSCAPE MAINTENANCE AGREEMENT PER INST. 141902, RECORDED MAY 20, 1987 ▪ 15' WIDE DRAINAGE EASEMENT PER TRACT 16178 El8' WIDE EASEMENT FOR POLE ONES AND INCIDENTAL PURPOSES PER INST. 3762, RECORDED JAN. 5, 1989 EXHIBIT "B" RIGHT-OF-WAY ACQUISITION - LOT 13 (OVERLAND DRIVE) VICINITY MAP REX S. PLUMMER NO. 6641 EXP. DATE 12-31-11 2./V/4 DATE SHEET 1 OF 2 SHEETS PROJECT DESIGN CONSULTANTS Planning 1 Engineering I Survey 701 B Street. Suite 800 San Diego, CA 92101 819.236.6471 Tel 619.234.0349 Fax DATE: FEBRUARY 8, 2010 SCALE: N.T.S. JOB NO.: / / / 15 19 43 21 20 TRACT \ 17 \ N N SCALE: 1"=100' 15 22 2 \ MAP 23 10.9ti ��� N 24 25 CURVE TABLE CURVE DELTA RADIUS LENGTH C1 675'01' 1417.00' 154.58' (674'59" 1417' 154.57') C2 6'43133" 1130.74' 132.74' (6'43'24" 1130.74' 132.69') 1 16178 18 • 0 ►O / 4 6 25' 12 Nc§310C,s. Ne`De% �0 TRACT N4632129711?) 12 (N4632'31 "E) EXHIBIT "B" RIGHT-OF-WAY ACQUISITION - LOT 13 (OVERLAND DRIVE) 13 14 \\ MAP/ / JVL2 11 /187B-3 9 10 SHEET 2 OF 2 SHEETS PROJECT DESIGN CONSULTANTS planning 1 Engineering 1 Survey 701 B Street, Suite 800 San Diego, CA 92101 619.235.6471 Tel 619.234.0349 Fax DATE: FEBRUARY 8, 2010 SCALE; 1,,=100, JOB NO.: Exhibit "C" [Form of Grant Deed] 11086-0166\ 1464915v I .doc RECORDING REQUESTED BY: City of Temecula, a municipal corporation AND WHEN RECORDED RETURN TO: City of Temecula Attention: Office of the City Clerk 41000 Main Street Post Office Box 9033 Temecula, California 92589-9033 [SPACE ABOVE FOR RECORDER'S USE ONLY] [X] All of Assessor's Parcel Number 921-480-013 Documentary Transfer Tax $0.00 This Instrument is for the benefit of the City of Temecula and is exempt from Recording Fees (Govt. Code § 27383), Filing Fees (Govt. Code § 6103), and Documentary Transfer Tax (Rev & Tax Code § 11922). GRANT DEED The undersigned Grantors declare: FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, Richard B. Gurrola and Valerie Gurrola, Trustees of the Gurrola Family Trust Under Declaration Dated December 27, 2001 as to an undivided 55.23% interest, Robert A. Gurrola, a married man as his sole and separate property as to an undivided 18.57% interest, Gary S. Gurrola, a single man as to an undivided 18.57% interest, and Richard B. Gurrola II, an unmarried man as to an undivided 7.63% interest, all as tenants in common, hereby grant in fee to the CITY OF TEMECULA, a municipal corporation, the real property commonly known as 27495 Enterprise Circle West, Temecula, California, and identified as Riverside County Tax Assessor's Parcel Number 921-480-013 in the City of Temecula, County of Riverside, State of California, which is more particularly described on Exhibit "A" and depicted on Exhibit "B" hereto. Exhibits "A" and "B" are incorporated herein by this reference. -1- 11086-0166\ 1400475 v3.doc IN WITNESS WHEREOF, Grantors have executed this Grant Deed on , 2012. GRANTORS: Richard B. Gurrola, Trustee of the Gurrola Family Trust Under Declaration dated December 27, 2001 as to an undivided 55.23 % interest, as tenant in common By: Richard B. Gurrola, Trustee Valerie M. Gurrola, Trustee of the Gurrola Family Trust Under Declaration dated December 27, 2001 as to an undivided 55.23 % interest, as tenant in common By: Valerie Gurrola, Trustee Robert A. Gurrola, a married man as his sole and separate property as to an undivided 18.57% interest, as tenant in common By: Robert A. Gurrola Gary S. Gurrola, a single man as to an undivided 18.57%, as tenant in common By: Gary S. Gurrola Richard B. Gurrola II, an unmarried man as to an undivided 7.63%, as tenant in common By: Richard B. Gurrola II -2- 11086-0166\1400475v3.doc ALL-PURPOSE ACKNOWLEDGMENT STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ) On , before me, , a Notary Public, personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. (Seat) SIGNATURE OF NOTARY Executed on , 2012, at , California. Signature -3- 11086-0166\ 1400475v3.doc ALL-PURPOSE ACKNOWLEDGMENT STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ) On , before me, , a Notary Public, personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. (Seal) SIGNATURE OF NOTARY Executed on , 2012, at , California. Signature -4- 11086-0166\ 1400475 v3.doc ALL-PURPOSE ACKNOWLEDGMENT STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ) On , before me, , a Notary Public, personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. (Seal) SIGNATURE OF NOTARY Executed on , 2012, at , California. Signature -5- 11086-0166\ 1400475 v3. doc ALL-PURPOSE ACKNOWLEDGMENT STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ) On , before me, , a Notary Public, personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. (Seal) SIGNATURE OF NOTARY Executed on , 2012, at , California. Signature -6- 11086-0166\ 1400475 v3. doc ALL-PURPOSE ACKNOWLEDGMENT STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ) On , before me, , a Notary Public, personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. (Seal) SIGNATURE OF NOTARY Executed on , 2012, at , California. Signature -7- 1 1086-0166\ 1400475v3.doc CITY OF TEMECULA Office of the City Clerk 41000 Main Street P.O. Box 9033 Temecula, CA 92589-9033 CERTIFICATE OF ACCEPTANCE OF GRANT DEED (Govt. Code § 27281) (Assessor's Parcel Number 921-480-013) This is to certify that the attached Grant Deed, which conveys in fee to the City of Temecula the real property commonly known as 27495 Enterprise Circle West, Temecula, California, and identified as Riverside County Tax Assessor's Parcel Number 921-480-013, is hereby accepted under the authority of the City Council of the City of Temecula and the City of Temecula consents to the recordation thereof by its duly authorized officer. Dated: , 2012 CITY OF TEMECULA, a municipal corporation By: Robert C. Johnson, City Manager ATTEST: By: Susan W. Jones, MMC, City Clerk APPROVED AS TO FORM: By: Peter M. Thorson, City Attorney -8- 11086-0166\ 1400475v3.doc Exhibit "A" [Legal Description of Property] 11086-0166\ 1464915v 1. doc February 8, 2010 Sheet 1 of 1 EXHIBIT "A" LEGAL DESCRIPTION RIGHT-OF-WAY ACQUISITION (OVERLAND DRIVE) LOT 13 OF TRACT MAP NO. 16178, SITUATED IN THE CITY OF TEMECULA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, RECORDED AUGUST 8, 1986 AS SHOWN BY MAP ON FILE IN BOOK 160, PAGES 102 THROUGH 104, INCLUSIVE, OF MAPS, OFFICIAL RECORDS OF RIVERSIDE COUNTY, STATE OF CALIFORNIA. CONTAINING: 25,686 SQ. FT, OR 0.590 ACRE, MORE OR LESS. EXHIBIT "B" ATTACHED HERETO AND BY THIS REFERENCE MADE A PART HEREOF. THIS LEGAL DESCRIPTION WAS PREPARED BY ME OR UNDER MY DIRECTION IN CONFORMANCE WITH THE LAND SURVEYORS' ACT. ----- 'REX S. SUMMER, PLS 6641 (MY LICENSE EXPIRES 12-31-2011) DATE Exhibit "B" [Plat Map of Property] 11086-016611464915v 1.doc LEGEND 1111 INDICATES RIGHT-OF—WAY ACQUISI71ON AREA = 25,686 SQ. FT. OR 0.590 ACRE INDICATES RECORD DATA PER TRACT 16178 INDICATES RADIAL BEARING LANDSCAPE MAINTENANCE AGREEMENT PER INST. 141902, RECORDED MAY 20, 1987 15' WIDE DRAINAGE EASEMENT PER TRACT 16178 8' WIDE EASEMENT FOR POLE LINES AND INCIDENTAL PURPOSES PER INST. 3762, RECORDED JAN. 5, 1989 EXHIBIT "B" RIGHT-OF-WAY ACQUISITION - LOT 13 (OVERLAND DRIVE) VICINITY MAP NO. 6641 Exp. date 12-31-11 REX S. PLUMMER NO. 6641 EXP. DATE 12-31-11 DATE SHEET 1 OF 2 SHEETS PROJECT DESIGN CONSULTANTS Planning 1 Engineering 1 Survey 701 B Street, Suite 800 San Diego, CA 92101 819.236.6471 Tel 819.234.0349 Fax DATE: FEBRUARY 8, 2010 SCALE: N . T. S. JOB NO.: / 20 / 18 h 119 21 2 CURVE TABLE CURVE DELTA RADIUS LENG71-1 C1 6'15'01" 1417.00' 154.58' (674'59" 1417' 154.57') C2 6'43'33" 1130.74' 132.74' (6'43'24" 1130.74' 132.69') 1 TRACT \\\ MAP \\\ 28 17 \\ \ NN 16178 p� i 4 • 5 0 25' Ncbc AC) .1,,i,N6;:f<(•\46 Nei a 8 0 \ cl \ 17'G °54kC.7 EXHIBIT "B" RIGHT-OF-WAY ACQUISITION - LOT 13 (OVERLAND DRIVE) FRA CT N46;32'29"ElR2 i2 7N71 -67..-327,-31"E) 4 ♦ / \\ MMP/ 7 Na/ 11 7:5 78-3 9 10 SHEET 2 OF 2 SHEETS PROJECT DESIGN CONSULTANTS Pienning 1 Engineering 1 Survey 701 B Street, Suite 800 San Diego, CA 92101 619.236.6471 Tel 619.234.0349 Fax DATE: FEBRUARY 8, 2010 SCALE: 1"=100' JOB NO.: Exhibit "D" [Form of Assignment of Lease] 11086-0 166\ 1464915 v 1.doc ASSIGNMENT AND ASSUMPTION OF LEASE This Assignment and Assumption of Lease (this "Assignment") dated as of , 2012 is entered into by and between Richard B. Gurrola and Valerie M. Gurrola, Trustees of the Gurrola Family Trust Under Declaration Dated Dec. 27, 2001 (collectively "Assignor") and the City of Temecula, a municipal corporation ("Assignee"). WITNESSETH WHEREAS, Assignor is the lessor or landlord under the certain AIR Commercial Real Estate Association Standard Industrial/Commercial Single -Tenant Lease -- Gross dated May 25, 2012 between Richard B. Gurrola and Valerie Gurrola, Trustees of the Gurrola Family Trust and Temecula Marine Center, Inc., as lessee or tenant, a true and correct copy of which is attached as Exhibit "1" hereto ("Lease"). The Lease was executed with respect to 6,818 square feet of a 9,916 square foot industrial building, including 12 unreserved parking spaces ("Premises") on that certain real property commonly known as 27495 Enterprise Circle West, located in the City of Temecula, California ("Property"); and WHEREAS, Assignor, as Seller, and Assignee, as Buyer, have entered into that certain Purchase and Sale Agreement and Joint Escrow Instructions Between the City of Temecula and Richard B. Gurrola and Valerie M. Gurrola, Trustees of the Gurrola Family Trust Under Declaration Dated Dec. 27, 2001, Robert A. Gurrola, Gary S. Gurrola, and Richard B. Gurrola II dated and entered into as of _ 2012 (the "Purchase Agreement") conveying the Property (as defined in the Purchase Agreement and as described more particularly on Exhibit "A" and depicted on Exhibit "B" hereto); and WHEREAS, Assignor desires to assign to Assignee, Assignor's interest as lessor or landlord in the Lease described above and in Exhibit "1", and Assignee desires to accept the assignment of said Lease. Now, THEREFORE, in consideration of the promises and conditions contained herein, the parties hereby agree as follows: 1. Effective as of the Effective Date (as defined below), Assignor hereby assigns, transfers and conveys to Assignee all of its right, title and interest in and to the Lease. 2. Effective as of the Effective Date, Assignee hereby assumes all of the Assignor's obligations under the Lease and agrees to indemnify Assignor against and hold Assignor harmless from any and all cost, liability, loss, damage or expense, including, without limitation, attorneys' fees, accruing on or to be performed subsequent to the Effective Date and arising out of the Assignor's obligations under the Lease. 3. Effective as of the Effective Date, Assignor hereby agrees to indemnify Assignee against and hold Assignee harmless from any and all cost, liability, loss, damage or expense, including, without limitations attorneys' fees, accruing or to be performed prior to the Effective Date and arising out of the Assignor's obligations under the Lease. 11086-0166\1463329v l .doc 4. Any rental and other payments under the Lease shall be prorated between the Assignor and Assignee as of 12:01 a.m. on the Effective Date, as if Buyer were vested with title to the Property during the entire Effective Date. The term "rents" or "rental" as used in this Assignment includes all payments due and payable by tenants under the Lease. 5. In the event of any litigation arising out of this Assignment, the losing party shall pay the prevailing party's reasonable costs and expenses of such litigation, including, without limitation, reasonable attorneys' fees. 6. This Assignment shall be binding on and inure to the benefit of the parties hereto, their heirs, executors, administrators, successors in interest and assigns. 7. This Assignment shall be governed by and construed in accordance with the laws of the State of California. 8. This Assignment is delivered pursuant to the Purchase Agreement. 9. For purposes of this Assignment, the "Effective Date" shall be the date of the Close of Escrow (as defined in the Purchase Agreement). 10. This Assignment may be executed simultaneously in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. IN WITNESS WHEREOF, Assignor and Assignee have executed this Assignment the day and year first above written. ASSIGNOR: Richard B. Gurrola and Valerie M. Gurrola, Trustees of the Gurrola Family Trust Under Declaration Dated Dec. 27, 2001 Dated: By: Richard B. Gurrola, Trustee Dated: By: Valerie M. Gurrola, Trustee -2- 11086-0166 \ 2- 11086-0166\1463329v1.doc ASSIGNEE: CITY OF TEMECULA, a municipal corporation Dated: ATTEST: Susan W. Jones, MMC, City Clerk Approved as to form: RICHARDS, WATSON & GERSHON Peter M. Thorson, City Attorney 11086-016611463329vI.doc By: Chuck Washington, Mayor -3- Exhibit "A" [Legal Description of Property] 11086-0166\1463329v 1.doc February 8, 2010 Sheet 1 of 1 EXHIBIT "A" LEGAL DESCRIPTION RIGHT-OF-WAY ACQUISITION (OVERLAND DRIVE) LOT 13 OF TRACT MAP NO. 16178, SITUATED IN THE CITY OF TEMECULA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, RECORDED AUGUST 8, 1986 AS SHOWN BY MAP ON FILE IN BOOK 160, PAGES 102 THROUGH 104, INCLUSIVE, OF MAPS, OFFICIAL RECORDS OF RIVERSIDE COUNTY, STATE OF CALIFORNIA. CONTAINING: 25,686 SQ. FT. OR 0.590 ACRE, MORE OR LESS. EXHIBIT "B" ATTACHED HERETO AND BY THIS REFERENCE MADE A PART HEREOF. THIS LEGAL DESCRIPTION WAS PREPARED BY ME OR UNDER MY DIRECTION IN CONFORMANCE WITH THE LAND SURVEYORS' ACT. BY: LUMMER, PLS 6641 (MY LICENSE EXPIRES 12-31-2011) .J b;/D DATE Exhibit "B [Plat of Property] 11086-0166\ 1463329v 1.doc LEGEND INDICATES RIGHT—OF—WAY ACQUISITION AREA = 25,686 SQ. FT OR 0.590 ACRE INDICATES RECORD DATA PER TRACT 16178 INDICATES RADIAL BEARING LANDSCAPE MAINTENANCE AGREEMENT PER INST. 141902, RECORDED MAY 20, 1987 15' W1DE DRAINAGE EASEMENT PER TRACT 16178 8' WIDE EASEMENT FOR POLE LINES AND INCIDENTAL PURPOSES PER INST. 3762, RECORDED JAM 5, 1989 EXHIBIT "B" RIGHT-OF-WAY ACQUISITION - LOT 13 (OVERLAND DRIVE) VICINITY MAP REX E PLUMMER NO. 6641 EXP. DATE 12-31-11 4%'/e, DATE SHEET 1 OF 2 SHEETS PROJECT DESIGN CONSULTANTS Planning 1 Er,ginaering 1 Fsurvey 701 B Street, Suite B00 San Diego, CA 92101 819.235.8471 Tel 819.234.0349 Fax DATE: FEBRUARY 8, 2010 SCALE: N.T.S. J06 NO.: / / 19 15 0 T N EXHIBIT "B" RIGHT-OF-WAY ACQUISITION - LOT 13 (OVERLAND DRIVE) 21 20 TRACT \ 17 44 25' 4, 12 Q,co. 16 22 \ MAP 23 \ r 03tiA CS9`° ,1,6 °''`L-/ TRACT N461.32'2971R2 i2 (N4632'31 "E) 2 NO 24 25 CURVE TABLE CURVE DELTA RADIUS LENGTH C1 675'01" 1417.00' 154.58' (6'14'59" 1417' 154.57') C2 6'43'33" 1130.74' 132.74' (6'43'24" 1130.74' 132.69') 11 r 14 IYI,P7 1 16178 \ 0 z 15 / 5 / V1617.8-3 9 10 SHEET 2 OF 2 SHEETS PROJECT DESIGN CONSULTANTS Planning 1 Englnaaring 1 Survey 701 B Street, Suite 800 819.235.6471 Tel San Diego, CA 92101 819.234.0349 Fax DATE: FEBRUARY 8, 2010 SCALE: 1 "=100' JOB NO.: Exhibit "1" [Copy of Lease] 11086-016611463329v 1.doc AIR AIR COMMERCIAL REAL ESTATE ASSOCIATION STANDARD INDUSTRIAL/COMMERCIAL SINGLE -TENANT LEASE -- GROSS (DO NOT USE THIS FORM FOR MULTI -TENANT BUILDINGS) 1. Baste Provisions ("Basic Provisions"). 1.1 Parties: This Lease ("Lease"), dated for reference purposes only May 25, 201.2 is made by and between Richard B. Gurrola and Valerie Gurrola, Trustees of the Gurrola Family Trust and Temecula Marine Center, Inc. ("Lessor") ("Lessee"), (collectivety the "Parties," or Individually a "Party"). 1.2 Premises: That certain real property, Including all improvements therein or to be provided by Lessor under the terms of this Lease, and commonly known as 27495 Enterprise Circle West, Temecula located in the County of Riverside , State of California , and generally described as (describe briefly the nature of the property and, if applicable, the "Project", if the property is located within a Project) 6,818 square feet of a 9,916 square foot industrial building, including 12 unreserved parking spaces. Lessee acknowledges that all existing improvements, including "Lessee Owned Alterations" belong to the Lessor on the Commencement Date . ("Premises"). (See also Paragraph 2) 1.3 Term: Two years and no months ("Original Term") commencing Oct ober 1, 2011 ("Commencement Date") and ending September 30, 2013 ("Expiration Date"). (See also Paragraph 3) 1.4 Early Possession: if the Premises are available Lessee may have non-exclusive possession of the Premises commencing Lessee is already in possession ("Early Possession Date"). (See also Paragraphs 3.2 and 3.3) 1.5 Base Rent: 55, 454.00 per month ("Base Rent"), payable on the first day of each month commencing June, 2012 Is If this box Is checked, there are provisions In this Lease for the Base Rent to be adjusted. See Paragraph 1. 6 1.6 Base Rent and Other Montes Pald Upon Execution: (a) Base Rent: $5, 454.00 increase to $5,618 effective October 1, 2012 . (Sea also Paragraph 4) for the period June, 2012. The Base Rent shall (b) Security Deposit: $-0- ("Security Deposit"). (See also Paragraph 5) (c) Association Fees: $ for the period (d) Other: $ for (e) Total Due Upon Execution of this Lease: $5,454 .00 1.7 Agreed Use: Boat repair, sales and service (See also Paragraph 6) 1.8 Insuring Party: Lessor is the "insuring Party". The annual "Base Premium" is $ (See also Paragraph 8) 1.9 Real Estate Brokers: (See also Paragraph 15 and 25) (a) Representation: The fotiowing real estate brokers (the "Brokers") and brokerage relationships exist In this transaction (check applicable boxes): 0 not applicable represents Lessor exclusively ("Lessor's Broker"); 0 not applicable represents Lessee exclusively ("Lessee's Broker"); or PAGE 1 OF 17 INITIALS ©2001 - AIR COMMERCIAL REAL ESTATE ASSOCIATION EXHIBIT "1" INITIALS FORM STG•15.4/12E ❑ not <app.licable represents both Lessor and Lessee ("Dual Agency"). (b) Payment to Brokers: Upon execution and delivery of this Lease by both Parties, Lessor shall pay to the Brokers for the brokerage services rendered by the Brokers the fee agreed to in the attached separate written agreement or if no such agreement Is attached, the sum of —0-- or % of the total Base Rent payable for the Original Term, the sum of or of the total Base Rent payable during any period of time that the Lessee occupies the Premises subsequent to the Original Term, and/or the sum of or _ _ % of the purchase price in the event that the Lessee or anyone affiliated with Lessee acquires from Lessor any rights to the Premises. 1.10 Guarantor. The obligations of the Lessee under this Lease are to be guaranteed by ("Guarantor'). (See also Paragraph 37) 1.11 Attachments. Attached hereto are the following, all of which constitute a part of this Lease: ❑ an Addendum consisting of Paragraphs through ❑ a plot plan depicting the Premises; ❑ a current set of the Rules and Regulations; ❑ a Work Letter; ❑ other (specify): 2. Premises. 2.1 Lotting. Lossor hereby leases to Lessee, and Lessee hereby leases from Lessor, the Premises, for the term, at the rental, and upon all of the terms, covenants and conditions set forth In this Lease. While the approximate square footage of the Premises may have been used In the marketing of the Premises for purposes of comparison, the Base Rent stated herein Is NOT tied to square footage and Is not subject to adjustment should the actual size be dotemiined to be different. Note: Lessee Is advised to verify the actual size prior to executing thls Lease. 2.2 Condition. Lessor shall deliver the Premises to Lessee broom clean and free of debris on the Commencement Date or the Early Possession Date, whichever first occurs ("Start Date"), and, so long as the required service contracts described in Paragraph 7.1(b) below are obtained by Lessee and in effect within thirty clays following the Start Date, warrants that the existing electrical, plumbing, fire sprinkler, lighting, heating, ventilating and air conditioning systems ("HVAC"), loading doors, sump pumps, if any, and all other such elements in the Premises, other than those constructed by Lessee, shall be in good operating condition on said date and that the surface and structural elements of the roof, bearing walls and foundation of any bulldings on the Premises (the "Building") shall be free of material defects, and that the Unit does not contain hazardous levels of any mold or fungi defined as toxic under applicable state or federal law. If a non-compliance with said warranty exists as of the Start Date, or it one of such systems or elements should malfunction or fail within the appropriate warranty period, Lessor shall, as Lessor's sole obligation with respect to such matter, except as otherwise provided In this Lease, promptly after receipt of written notice from Lessee setting forth with specificity the nature and extent of such non-compliance, malfunction or failure, rectify same at Lessor's expense. The warranty periods shall be as follows: (I) 6 months as to the HVAC systems, and (11) 30 days as to the remaining systems and other elements of the BJllding. If Lessee does not give Lessor the required notice within the appropriate warranty period, correction of any such non-compliance, malfunction or failure shall be the obligation of Lessee al Lessee's sole cost and expense, except for the roof, foundations, and bearing walls which are handled as provided in paragraph 7. 2.3 Compliance, Lossor warrants that to the best of its knowledge the Improvements on the Premises cornply with the building codes, applicable laws, covenants or restrictions of record, regulations, and ordinances ("Applicable Requirements") that were In effect at the time that each improvement, or portion thereof, was constructed. Said warranty does not apply to the use to which Lessee will put the Premises, modifications which may be required by the Americans with Disabililles Act or any similar laws as a result of Lessee's use (sea Paragraph 50), or to any Alterations or Utility Installations (as defined 111 Paragraph 7.3(a)) made or to bo made by Lessee. NOTE: Lessee Is responsible for determining whether or not the Appticable Requirements, and especially the zoning, are approprlato for Lessee's Intended use, and acknowledges that past uses of the Promisos niay no longer be allowed. If the Premises do not comply with said warranty, Lessor shall, except as otherwise provided, promptly after receipt of written notice from Lessee setting forth with specificity the nature and extent of such non-compliance, rectify the same at Lessor's expense. If Lessee does not give Lessor written notice of a non-compliance with this warranty within 6 months following the Start Date, correction of that non-compllance shall be the obligation of Lessee at Lessee's sole cost and expense, If the Applicable Requirements are hereafter changed so as to require during the lerm of this Lease the construction of an addition to or art alteration of the Premises and/or Building, the remediation of any Hazardous Substance, or the reinforcement or other physical modification of the Unit, Premises and/or Building ("Capital Expenditure"), Lessor and Lessee shall allocate the cost of such work as follows: (a) Subject to Paragraph 2.3(c) below, II such Capital Expenditures aro required as a result of the specific arid unique use of the Premises by Lessee as compared with uses by tenants in general, Lessee shall be fully responsible for the cost thereof, provided, however that if such Capital Expenditure Is required during the last 2 years of this Lease and the cost thereof exceeds 6 months' Base Rent, Lessee may instead terminate this Lease unless Lessor notifies Lessee, In writing, within 10 days after receipt of Lessee's termination notice that Lessor has elected to pay the difference between the actual cost thereof and an amount equal to 6 months' Base Rent. If Lessee elects termination, Lessee shall immediately cease the use of the Premises which requires such Capital Expenditure and deliver to Lessor written notice specifying a termination date at least 90 days thereafter. Such termination date shall, however, in no event be earlier than the last day that Lessee could legally utilize the Premises without commencing such Capital Expenditure. (b) If such Capital Expenditure is not the result of the specific and unique use of the Premises by Lessee (such as, governmentally mandated seismic modifications), then Lessor shall pay for such Capital Expenditure and Lessee shall only be obligated to pay, each month during the remainder of the term of this Lease or any extension thereof, on the date that on which the Base Rent is due, an amount equal to 11144th of the portion of such costs reasonably attributable to the Premises. Lessee shall pay Interest on the balance but may prepay its obligation at any time. If, however, such Capital Expenditure is required during the last 2 years of this Lease or if Lessor reasonably determines that it is not economically feasible to pay its share thereof, Lessor shall have the option to terminate this Lease upon 90 days prior written notice to Lessee unless Lessen notifies Lossor, In writing, within 10 days after receipt of Lessor's temihation notice that Lessee will pay for such Capital Expenditure. If Lessor dons not elect to terminate, and falls to tender its sharp of any such Capital Expenditure, Lessee may advance such funds and deduct same, with Interest, from Rent PAGE 2 OF 17 INITIALS INITIALS ©2001 - AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM STG-15-4/12E until Lessor's share of such costs have been fully paid. If Lessee Is unable to finance Lessor's share, or If the balance of the Rent due and payable for the remainder of this Lease Is not sufficient to fully reimburse Lessee on an offset basis, Lessee shall have the right to terminate this Lease upon 30 days written nonce to Lessor. (c) Notwithstanding the above, the provisions concerning Capital Expenditures are Intended to apply only to non -voluntary, unexpected, and new Applicable Requirements. I! the Capital Expenditures are Instead triggered by Lessee as a result of an actual or proposed change In use, change In Intensify of use, or modification to the Premises then, and In taut event, Lessee shall either. (i) immediately cease such changed use or Intensity of use and/or take such other steps as may be necessary to eliminate the requirement for such Capital Expenditure. or (11) complete such Capital Expenditure at its own expense. Lessee shall not, however, have any right to terminate this Lease. 2.4 Acknowledgements. Lessee acknowledges that: (a) it has been given an opportunity to Inspect and measure the Premises, (b) It has been advised by Lessor and/or Brokers to satisfy itself with respect to the size and condition of the Premises (Including but not limited to the electrical, HVAC and fire sprinkler systems, security, environmental aspects, and compliance with Applicable Requirements and the Americans with Disabilities Acl), and their suitability for Lessee's intended use, (c) Lessee has made such Investigation as It deems necessary with reference to such matters and assumes all responsibility therefor as the same relate to its occupancy of the Premises, (d) It Is not relying on any representation as to the size of the Premises made by Brokers or Lessor, (e) the square footage of the Premises was not material to Lessee's decision to lease the Premises and pay the Rent stated herein, and (f) neither Lessor, Lessor's agents, nor Brokers have made any oral or written representations or warranties with respect to said matters other than as set forth In this Lease. In addition, Lessor acknowledges that: (1) Brokers have made no representations, promises or warranties concerning Lessee's ability to honor the Lease or suitability to occupy the Premises, and (II) It Is Lessor's sole responsibility to investigate the financial capability and/or suitability of all proposed tenants. 2.5 Lessee es Prior Owner/Occupant. The warranties made by Lessor In Paragraph 2 shall be of no force or effect If Immediately prior to the Start Date Lessee was the owner or occupant of the Premises. In such event, Lessee shall be responsible for any necessary corrective work. 3. Term. 3.1 'form. The Commencement Date, Expiration Date and Original Term of this Lease are as specified In Paragraph 1.3. 3.2 Early Possession. Any provision herein granting Lessee Early Possession of the Premises Is subject to and conditioned upon the Premises being available for such possession prior to the Commencement Date. Any grant of Early Possession only conveys a non-exclusive right to occupy the Promises. If Lessee totally or partially occupies the Premises prior to the Commencement Date, the obligation to pay Base Rent shall be abated for the period of such Early Possession. All other terms of this Lease (Including but not limited to the obligations to pay Real Property Taxes and Insurance premiums and to maintain the Premises) shall be In effect during such period. Any such Early Possession shall not affect the Expiration Date. 3.3 Delay In Possession. Lessor agrees to use its best commercially reasonable efforts to deliver possession of the Premises to Lessee by the Commencement Date. If, despite said efforts, Lessor Is unable to deliver possession by such date, Lessor shall not be subject to any liability therefor, nor shall such failure affect tho validity of this Lease or change the Expiration Dale. Lessee shall not, however, be obligated to pay Rent or perform Its other obligations until Lessor delivers possession of the Premises and any period of rent abatement that Lessee would otherwise have enjoyed shall run from the date of delivery of possession and continue for a period equal to what Lessee would otherwise have enjoyed under the terms hereof, but minus any days of delay caused by the acts or omissions of Lessee. If possession is not delivered within 60 days after the Commencement Date, as the same may be extended under the terms of any Work Letter executed by Parties, Lessee may, at Its option, by notice in writing within 10 days after the end of such 80 day period, cancel this Lease, in which event the Parties shall be discharged from all obligations hereunder. If such written notice Is not received by Lessor within said 10 day period, Lessee's right to cancel shall terminate. If possession of the Premises Is not delivered within 120 days after the Commencement Date, this Lease shall terminate unless other agreements are reached between Lessor and Lessee, In writing. 3.4 Lessee Compliance. Lessor steal' not be required to deliver possession of the Premises to Lessee until Lessee compiles with its obligation to provide evidence of insurance (Paragraph 8.5). Pending delivery of such evidence, Lessee shall be required to perform all of Its obligations under this Lease from and after (ho Start Dale, including the payment of Rent, notwithstanding Lessor's election to withhold possession ponding receipt of such ovldence of insurance. Further, If Lessee Is required to perform any other conditions prior to or concurrent with the Start Date, the Start Date shall occur but Lessor may elect to withhold possession until such conditions are satisfied, 4. Rent. 4.1. Rent Defined. All monetary obligations of Lessee to Lessor under the terms of this Lease (except for the Security Deposit) are deemed to bo rent ("Rent"). 4.2 Payment. . Lessee shall cause payment of Rent to be received by Lessor in lawful money of the United States, without offset or deduction (except ss specifically permitted In this Lease), on or before the day on which It Is due. All monetary arnounts shall be rounded to the nearest whole dollar. In the event that any Invoice prepared by Lessor is Inaccurate such Inaccuracy shall not constitute a waiver and Lessee shall bo obligated to pay the amount set forth in this Lease. Rent for any period during the term hereof which Is for less than one full calendar month shall be prorated based upon the actual number of days of said month. Payment of Rent shall be made to Lessor at its address stated herein or to such other persons or place as Lessor may from time to time designate In writing. Acceptance of a payment which is less than the amount then due shall not be a waiver of Lessor's rights to the balance of such Rent, regardless of Lessor's endorsement of any check so stating. In the avant that any check, draft, or other instrument of payment given by Lessee to Lessor Is dishonored for any reason, Lessee agrees to pay to Lessor the sum of $25 in addition to any Late Charge and Lessor, at its option, may require all future payments to be made by Lessee to be by cashier's check. Payments will be applied first to accrued late charges and attorneys fees, second to accrued interest, then to Base Rent, Insurance and Real Property Taxes, arid any remaining amount to any other outstanding charges or costs. 4.3 Association Fees. In addition to the Base Rent, Lessee shall pay to Lessor each month an amount equal to any owner's association or condominium fees levied or assessed against the Premises. Said monies shall be paid at the same time and in the sarre manner as the Base Rent. 5. Security Deposit. Lessee shall deposit with Lessor upon execution hereof the Security Deposit as security for Lessee's faithful performance of its obligations under thls Lease. If Lessee fails to pay Rent, or otherwise Defaults under this Lease, Lessor may use, apply or retain all or any portion of said Security Deposit for the payment of any amount already due Lessor, for Rents which will be due In the future, and/ or to reimburse or compensate Lessor for any liability, expense, loss or damage which Lessor may suffer or Incur by reason thereof. If Lessor uses or applies all or any portion of the Security Deposit, Lessee shall within 10 days after written request therefor deposit monies with Lessor sufficient to restore said Security Deposit to the full amount required by this Lease. If the Base Rent increases during the term of this Lease, Lessee shall. upon written request from Lessor, deposit additional monies with Lessor so that the total amount of the Security Deposit shall at all limes bear the same proportion to the Increased Base Rent as the Initial Security Deposit bore to the initial Base Rent Should the Agreed Use be amended to accommodate a material change in the business of Lessee or to accommodate a sublessee or assignee, Lessor shaft have the right to increase the Security Deposit to the PAGE 3 OF 17 INITIALS INITIALS ©2001 - AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM STG-15-4/12E extent necessary, In Lessor's reasonable judgment, to account for any Increased wear and tear that the Premises may suffer as a result thereof. If a change in control of Lessee cccurs during this Lease and following such change the financial condition of Lessee is, in Lessor's reasonable Judgment, significantly reduced, Lessee shall deposit such additional monies with Lessor as shall be sufficient to cause the Security Deposit to be at a commercially reasonable level based on such change in financial condition Lessor shall not be required to keep the Security Deposit separate from its general accounts. Within 90 days after the expiration or termination of this Lease, Lessor shall retum that portion of the Security Deposit not used or applied by Lessor. No part of the Security Deposit shall be considered to be held In trust, to bear interest or to be prepayment for any monies to be pald by Lessee under this Lease. 6. Use. 6.1 Use. Lessee shall use and occupy the Premises only for the Agreed Use, or any other legal use which is reasonably comparable thereto, and for no other purpose. Lessee shall not use or permit the use of the Premises in a manner that Is unlawful, creates damage, waste or a nuisance, or that disturbs occupants of or causes damage to neighboring premises or preperttes. Other than guide, signal and seeing eye dogs, Lessee shall not keep or allow In the Premises any pets, animals, birds, fish, or reptiles. Lessor shall not unreasonably withhold or delay Its consent to any written request for a modification of the Agreed Uso, so long as the same will riot impalr the structural integrity of the improvements on the Premises or the mechanical or electrical systems therein, and/or Is not significantly more burdensome to the Premises. If Lessor elects to withhold consent, Lessor shall within 7 days after such request give written notification of same, which notice shall include an explanation of Lessor's objections to the change In the Agreed Use. 6.2 Hazardous Substances. (a) Reportable Uses Require Consent. The term "Hazardous Substance" as used In this Lease shall mean any product, substance, or waste whose presence, use, manufacture, disposal, transportation, or release, Dither by itself or in combination with other materials expected to be on the Promises, Is either: (I) potentially injurious to the public health, safety or welfare, the environment or the Premises, (li) regulated or monitored by any governmental authority, or (III) a basis for potential liability of Lessor to any governmental agency or third party under any applicable statute or common law theory. Hazardous Substances shall Include, but not be limited to, hydrocarbons, petroleum, gasoline, and/or crude oil or any products, by-products or fractions thereof. Lessee shall not engage In any activity In or on the Premises which constitutes a Reportable Use of Hazardous Substances without the express prior written consent of Lessor and timely compliance (at Lessee's expense) with all Applicable Requirements. "Reportable Uso" shall mean (1) the Installation or use of any above or below ground storage tank, (11) the generation, possession, storage, use, transportation, or disposal of a Hazardous Substance that requires a permit from, or with respect to which a report, notice, registration or business plan Is required to be filed with, any governmental authority, and/or (111) the preserce at the Premises of a Hazardous Substance with respect to which any Applicable Requirements requires that a notice be given to persons entering or occupying the Premises or neighboring properties. Notwithstanding ttie foregoing, Lessee may use any ordinary and customary materials reasonably required to be used in tho normal course of the Agreed Use, ordinary office supplies (copier toner, liquid paper, glue, etc.) and common household cleaning materials, so long as such use is In compliance with all Applicable Requirements, Is not a Reportable Use, and does not expose the Premises or neighboring property to any meaningful risk of contamination or damage or expose Lessor to any liability therefor. In addition, Lessor may condition its consent to any Reportable Use upon receiving such additional assurances as Lessor reasonably deerns necessary to protect Itself, the public, the Premises and/or the environment against damage, contamination, Injury and/or liability, including, but not limited to, the Installation (and removal on or before (.ease explralion or termination) of protective modlflcaLons (such as concrete encasements) and/or increasing the Security Deposit. (b) Duty to Inform Lessor. If Lessen knows, or has reasonable cause to believe, that a Hazardous Substance has come to be located in, on, under or about the Premises, other than as previously consented to by Lessor, Lessee shall immediately give written notice of such feet to Lessor, and provide Lessor with a copy of any report, notice, clalm or other documentation which it has concerning the presence of such Hazardous Substance. (c) Lessee Remediation. Lessee shall not cause or permit any Hazardous Substance to be spilled or released in, on, under, or about the Premises (including through the plumbing or sanitary sewer system) and shall promptly, et Lessee's expense, comply with alt Applicable Requirements and take all investigatory and/or remedial action reasonably recommended, whether or not formally ordered or required, for the cleanup of any contamination of, and for the maintenance, security and/or monitoring of the Premises or neighboring properties, that was caused or materially contributed to by Lessee, or pertaining to or Involving any Hazardous Substance brought onto the Premises during the term of this Lease, by or for I.essee, or any third party. (d) Lessee indemnification. Lessee shall Indemnify, defend and hold Lessor, Its agents, employees, lenders and ground lessor, If any, harmless from and against any and all loss of rents and/or damages, liabilities, judgments, claims, expenses, penalties, and attorneys' and consultants' fees arising out of or Involving any Hazardous Substance brought onto the Premises by or for Lessee, or any third party (provided, however, that Lessee shall have no liability under this Lease with respect to underground migration of any Hazardous Substance under the Premises from adjacent properties not caused or contributed to by Lessee). Lessee's obligations shall Include, but not be limiter, to, the effects of any contamination or Injury to person, property or the environment created or suffered by Lessee, end the cost of Invesligatlor, removal, remediation, restoration and/or abatement, and shall survive the expiration or termination of this Lease. No termination, cancellation or release agreement entered Into by Lessor and Lessee shall release Lessee from Its obligations under this Lease with respect to Hazardous Substances, unless specifically so agreed by Lessor In writing at the tlrrre of such agreement. (e) Lessor Indemnification, Lessor and its successors and assigns shall Indemnify, defend, reimburse and hold Lessee, its employees and lenders, harmless from and against any and all environmental damages, including the cost of remediation, which result from Hazardous Substances which existed on the Premises prior to Lessee's occupancy or which are caused by the gross negligence or willful misconduct of Lessor, its agents or employees. Lessor's obligations, as and when required by the Applicable Requirements, shall Include, hut not be limited to, the cost of Investigation, removal, remediation, restoration and/or abatement, and shall survive the expiration or termination of this Lease. (f) investigations and Remedladons, Lessor shall retain the responsibility and pay for any investigations or remediation measures required by governmental entities having jurisdiction with respect to the existence of Hazardous Substances on the Premises prior to Lessee's occupancy, unless such remediation measure Is required as a result of Lessee's use (including "Alterations", as defined in paragraph 7.3(a) below) of the Premises, In which event Lessee shall be responsible for such payment. Lessee shall cooperate fully In any such activities at the request of Lessor, Including allowing Lessor and Lessor's agents to have reasonable access to the Premises at reasonable times In order to carry out Lessor's Investigative and remedial responsibilities. (g) Lessor Termination Option. If a Hazardous Substance Condition (see Paragraph 9.1(e)) occurs during the term of this Lease, unless Lessee Is legally responsible therefor (in which case Lessee shall make the investigation and remediation thereof required by the Applicable Requirements and this Lease shall continue in full force and effect, but subject to Lessor's rights under Paragraph 6.2(d) and Paragraph 13), Lessor may, at Lessor's option, either (i) Investigate and remediate such Hazardous Substance Condition, if required, as soon as reasonably possible at Lessor's expense, In which event this Lease shall continue in full force arid effect, or (li) If the estimated cost to remedlate such condition exceeds 12 times the then monthly Base Rent or $100,000, whichever is greater, give written notice to Lessee, within 30 days after receipt by Lessor of knowledge PAGE 4 OF 17 INITIALS ©2001 - AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM STG-15-4/12E INITIALS of the occurrence of such Hazardous Substance Condition, of Lessor's desire to terminate this Lease as of the dale 60 days following the date of such notice. In the event Lossor elects to give a termination notice, Lessee may, within 10 days thereafter, give written notice to Lessor of Lessee's commitment to pay the amount by which the cost of the remediation of such Hazardous Substance Condition exceeds an amount equal to 12 times the then monthly Base Rent or $100,000, whichever Is greater. Lessee shall provide Lessor with said funds or satisfactory assurance thereof within 30 days following such commitment. In such event, this Lease shall contlnue In full force and effect, and Lessor shall proceed to make such remediation as soon as reasonably possible alter the required funds ere available. If Lessee does not give such notice and provide the required funds or assurance thereof within the time provided, this Lease shall temiinate as of the date specified in Lessor's notice of termination. 6.3 Lessee's Compliance with Applicable Requirements. Except as otherwise provided In this Lease, Lessee shall, at Lessee's sole expense, fully, diligently and In a timely manner, materially comply with all Applicable Requirements, the requirements of any applicable fire insurance underwriter or rating bureau, and the recommendations of Lessor's engineers and/or consultants which relate in any manner to the such Requirements, without regard to whether such Requirements are now In effect or become effective after the Start Date. Lessee shall, within 10 days after receipt of Lessor's written request, provide Lessor with copies of all permits and other documents, and other Information evidencing Lessee's compliance with any Applicable Requirements specified by Lessor, and shall Immediately upon receipt, notify Lessor In writing (with copies of any documents Involved) of any threatened or actual claim, notice, citation, warning, complaint or report pertaining to or involving the failure of Lessee or the Premises to comply with any Applicable Requirements. Likewise, Lessee shall Immediately give written notice to Lessor of: (1) any water damage to the Premises and any suspected seepage, pooling, dampness or other condition conducive 10 the production of mold; or (11) any mustiness or other odors that might Indicate the presence of mold In the Premises. 6.4 Inspection; Compliance. Lessor and Lessor's "Lender" (as defined In Paragraph 30) and consultants shall have the right to enter Into Premises at any time, In the case of an emergency, and otherwise at reasonable tinges after reasonable notice, for the purpose of inspecting the condition of the Premises and for verifying compliance by Lessee vrith this Lease. The cost of any such Inspections shall be paid by Lessor, unless a violation of Applicable Requirements, or a Hazardous Substance Condition (see paragraph 9.1) Is found to exist or be Imminent, or the Inspection Is requested or ordered by a governmental authority. in such case, Lessee shall upon request reimburse Lessor for the cost of such inspection, so long as such Inspection Is reasonably related to the violation or contamination. In additlon, Lessee shall provide copies of all relevant material safety data sheets (MSDS) to Lessor within 10 days of the receipt c a written request therefor. 7. Maintenance; Repairs; Utility Installations; Trade Fixtures and Alterations. 7.1 Lessee's Obligations. (a) In General. Subject to the provisions of Paragraph 2.2 (Condition), 2.3 (Compliance), 6.3 (Lessee's Compliance) with Applicable Requirements), 7.2 (Lessor's Obligations), 9 (Damage or Destruction), and 14 (Condemnation), Lessee shall, at Lessee's sole expense. keep the Premises, Utility Installations (Intended for Lessee's exclusive use, no matter where located), and Alterations In good order, condition and repair (whether or not the portion of the Premises requiring repairs, or the means of repairing the same, are reasonably or readily accessible to Lessee, and whether or not the need for such repairs occurs as a result of Lessee's use, any prior use, tho elements or the ago of such portion of tiie Premises), Including, but not limited to, all equipment or facilities, such as plumbing, HVAC equipment, electrical, lighting facilities, boilers, pressure vessels, fire protection system, fixtures, walls (interior and exterior), ceilings, floors, windows, doors, plate glass, skylights, landscaping, driveways, parking Tots, fences, retaining walls, signs, sidewalks and parkways located In, on, or adjacent to the Premises. Lessee is also responsible for keeping the roof and roof drainage clean and free of debris. Lessor shall keep the surface and structural elemerts of the roof, foundations, and bea'ing walls in good repair (see paragraph 7.2). Lessee, in keeping (ho Premlses in good order, condition and repair, shall exercise and perform good maintenance practices, specifically Including the procurement and maintenance of the service contracts required by Paragraph 7.1(b) below. Lessee's obligations shall include restorations, replacements or renewals when necessary to keep the Premises and all improvements thereon or a part thereof in good order, condition and state of repair. Lessee shall, during the term of this Lease, keep the exterior appearance of (ho Building in a first-class condition (including, e.g. graffiti removal) consistent with the exterior appearance of other similar facilities of comparable age and size in the vicinity, including, when necessary, the exterior repainting of the Building. (b) Service Contracts. Lessee shall, at Lessee's sole expense, procure and maintain contracts, wilt copies to Lessor, In customary form and substance for, and with contractors specializing and experienced In the maintenance of the fo lowing equipment and Improvements, if any, If and when Installed on the Premises: (1) HVAC equipment, (II) bolter, and pressure vessels, (iii) fire extinguishing systems, including fire alarm and/or smoke detection, (Iv) landscaping and Irrigation systems, and (v; clarifiers. However, Lessor reserves the right, upon notice to Lessee, to procure and maintain any or all of such service contracts, and Lessee shall reimburse Lessor, upon demand, for the cost thereof. (c) Failure to Perform. If Lessee falls to perform Lessee's obligations under this Paragraph 7.1, Lessor may enter upon the Premises after 10 days' prior written notice to Lessee ;except in the case of an emergency, In which case no notice shall be required), perform such obligations on Lessee's behalf, and put the Premises in good order, condition and repair, and Lessee shall promptly pay to Lessor a sum equal to 115% of the cost thereof. (d) Replacement. Subject to Lessee's indemnification of Lessor as set forth In Paragraph 8,7 below, and without relieving Lessee of liability resulting from Lessee's failure to exercise and perform good maintenance practices, if an item described In Paragraph 7.1(b) cannot be repaired other than at a cost which is in excess of 50% of the cost of replacing such Item, then such item shall be replaced oy Lessor, and the cost thereof shall be prorated between the Parties and Lessee shall only be obligated to pay, each month during the remainder of the term of this Lease, on the date ori which Base Rent Is due, an amount equal to the product of multiplying the cost of such replacement by a fraction, the numerator of which is one, and the denominator of which is 144 (ie. 1/144th of the cost per month). Lessee shall pay Interest on the unamorlized balance but may prepay es obligation at any time. 7.2 Lessor's Obligations. Subject to the provisions of Paragraphs 2.2 (Condition), 2.3 (Compliance), 9 (Damage or Destruction) and 14 (Condemnation), it Is intended by the Parties hereto that Lessor have no obligation. In any manner whatsoever, to repair and maintain tho Premlses, or the equlpment therein, all of which obligations are intended to be that of the Lessee, except for the surface and structural elements of the roof, foundations and bearing walls, fhe repair of which shall be the responsibility of Lessor upon receipt of written notice that such a repair is necessary. It is the Intention of the Parties that the terms of this Lease govern the respective obligations of the Parties as to maintenance and repair of the Premises, and they expressly waive the benefit of any statute now cr hereafter in effect to the extent It is inconsistent with the terms of this Lease. 7.3 Utility Installations; Trade Fixtures; Alterations. (a) Definitions. The terns "Utility Installations" refers to all floor and window coverings, air and/or vacuum lines, power panels, electrical distribution, security and fire protection systems, communication cabling, lighting fixtures, HVAC equipment, plumbing, and fencing in or on the Premises. The term "Trade Fixtures" shall mean Lessee's machinery and equipment that can be removed without doing material damage to the Premises. The term "Alterations" shall mean any modification of the Improvements, other than Utility Installations or Trade Fixtures, whether by addition or deletion. "Lessee Owned Alterations and/or Utility Installations" are defined as Alterations and/or Utility Installations made by Lessee that are not yet owned by Lessor pursuant to Paragraph 7.4(a). (b) Consent. Lessee shall not make any Alterations or Utility Installations to the Premises without Lessor's prior written consent. PAGE 6 OF 17 INITIALS INITIALS ©2001 - AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM STG-15-4112E Lessee may, however, make non-structural Alterations or Utility installations to the interior of the Promises (excluding the roof) without such consent but upon notice to Lessor, as long as they are not visible from the outside, do not Involve puncturing, relocating or removing the roof or any existing walls, will not affect the electrical, plumbing, HVAC, and/or life safety systems, and the cumulative cost thereof during this Lease as extended docs not exceed a sum equal to 3 month's Base Rent in the aggregate or a sum equal to one month's Base Rent In any one year. Notwithstanding the foregoing, Lessee shall not make or permit any roof penetrations and/or Install anything on the roof without the prior written approval of Lessor. Lessor may, as a precondition to granting such approval, require Lessee to utilize a contractor chosen and/or approved by Lessor. Any Alterations or Utility Installations that Lessee shall desire to make and which require the consent of the Lessor shall be presented to Lessor in written form with detailed plans. Consent shall he deemed conditioned upon Lessee's: (I) acquiring all applicable governmental permits, (ii) furnishing Lessor with copies of both the permits and the plans and specifications prior to commencement of the work, and (til) compliance with all conditions of said permits and other Applicable Requirements In a prompt and expeditious manner. Any Alterations or Utility Installations shall be performed In a workmanlise manner with good and sufficient materials. Lessee shall promptly upon completion furnish Lessor with as -built plane and specifications. For work which costs an amount in excess of one month's Baso Rent, Lessor may condition its consent upon Lessee providing a lien and completion bond In an amount equal to 150% of the estimated cost of such Alteration or Utility Installation and/or upon Lessee's posting art additional Security Deposit with Lessor. (c) Liens; Bonds, Lessee shall pay, when due, all claims for labor or materials furnished or alleged to have been furnished to or for Lessee at or for use on the Premises, which claims are or may be secured by any mechanic's or materialmen's lien against the Premises or any Interest therein. Lessen shall give Lessor not fess than 10 days notice prior to the commencement of any work In, on or about the Premises, and Lessor shall have the right to post notices of non -responsibility. If Lessee shall contest the validity of any such lien, claim or demand, then Lessee shall, at its sole expense defend and protect itself, Lessor and the Premises against the same and shall pay and satisfy any such adverse judgment that may be rendered thereon before the enforcement thereof. If Lessor shall require, Lessee shell furnish a surety bond in an amount equal to 150% of the amount of such contested lien, claim or demand, Indemnifying Lessor against liability for tie same. If Lessor elects to participate in any such action, Lessee shall pay Lessor's attorneys' fees and costs. 7.4 Ownership; Removal; Surrender; and Restoration. (a) Ownership, Subject to Lessor's right to require removal or elect ownership as herelnafter provided, all Alterations and Utility Installations made by Lessee shall be the property of Lessee, bul considered a part of the Premises, Lessor may, at any time, elect in writing to be the owner of all or any specified part of the Lessen Owned Alterations and Utility Installations. Unless otherwise instructed per paragraph 7.4(b) hereof, all Lessee Owned Alterations and Ullllly Installations shall, at the expiration or termination of this Lease, become the properly of Lessor and be surrendered by Lessee with the Premises. (b) Removal. By delivery to Lessee of written notice from Lessor not earlier than 90 and not later than 30 days prior to the end of the term of thls Lease, Lessor may require that any or all Lessee Owned Alterations or Utility Installations be removed by the expiration or termination of this Lease. Lessor may require the removal at any time of all or any part of any Lessee Owned Alterations or Utility Installations made without the required consent. (c) Surrender; Restoration. Lessen shall surrender the Premises by the Expiration Date or any earller termination date, with all of the improvements, parts and surfaces thereof broom clean and free of debris, and in good operating order, condition and state of repair, ordinary wear and tear excepted. "Ordinary wear and tear" shall not Include any damage or deterioration that would have been prevented by good maintenance practice. Notwithstanding the foregoing, If this Lease Is for 12 months or loss, then Lessee shall surrender the Premises in the same condition as delivered to Lessee on the Start Date with NO allowarce for ordinary wear and tear. Lessee shall repair any damage occasioned by the Installation, maintenance or removal of Trade Fixtures, Lessee owned Alterations and/or Utility Installations, furnishings, and equipment as well as the removal of any storage tank installed by or for Lessee. Lessee shall completely remove from the Premises any and all Hazardous Substances brought onto the Premises by or for Lessee, or any third party (except Hazardous Substances which were deposited via underground migration from areas outside of the Promises) even if such removal would require Lessee to perform or pay for work that exceeds statutory requirements. Trade Fixtures shall remain the property of Lessee and shall be removed by Lessee. Any personal property of Lessee not removed on or before the Expiration Date or any earlier termination date shall be deemed to have been abandoned by Lessee and may be disposed of or retained by Lessor as Lessor may desire. The failure by Lessee to timely vacate the Premises pursuant to this Paragraph 7.4(c) without the express written consent of Lessor shall constitute a holdover under the provisions of Paragraph 26 below. 8. Insurance; Indemnity, 8.1 Payment of Premium Increases. (a) Lessee shall pay to Lessor any Insurance cost Increase ("Insurance Cost Increase") occurring during the term of this Lease. Insurance Cost Increase Is defined as any increase in the actual cost of the insurance required under Paragraph 8.2(b), 8.3(a) and 8.3(b) ("Required Insurance"), over and above the Base Premium as hereinafter defined calculated on an arnual basis. Insurance Cost Increase shall include but not be limited to Increases resulting frorn the nature of Lessee's occupancy, any act or omisslon of Lessee, requirements of the holder of mortgage or deed of trust covering the Premises, increased valuation of the Premises and/or a premium rate Increase. The parties are encouraged to fill in the Base Premium In paragraph 1.8 with a reasonable premium for the Required Insurance based on the Agreed Use of the Premises. IF the parties fail to Insert a dollar amount In Paragraph 1.8, then the Base Premum shall be the lowest annual premium reasonably obtainable for the Required Insurance as of the commencement of the Original Term for the AgreeJ Use of the Premises. In no event, however, shall Lessee be responsible for any portion of the Increase In the premium cost attributable to liability Inserance carried by Lessor under Paragraph 8.2(b) in excess of S2,000,000 per occurrence. (b) Lessee shall pay any such Insurance Cost Increase to Lessor within 30 days after receipt by Lessee of a copy of the premium statement or other reasonable evidence of the amount due. If the insurance policies maintained hereunder cover other property besides the Premises, Lessor shall also deliver to Lessee a statement of the amount of such Insurance Cost Increase attributable only to the Premises showing in reasonable detail the manner In which such amount was computed. Premiums for policy periods commencing prior to, or extending beyond the term of this Lease, shall be prorated to correspond to the term of this Lease. 8.2 Liability Insurance. (a) Carried by Lessee. Lessee shall obtain and keep in force a Commercial General Liability policy of insurance protecting Lessee and Lessor as an additional Insured against claims for bodily injury, personal Injury and property damage based upon or arising out of the ownership, use, occupancy or maintenance of the Premises and all areas appurtenant thereto. Such Insurance shall be on an occurrence basis providing single limit coverage in ar amount not loss than $1,000,000 per occurrence with an annual aggregate of not less than $2,000,000. Lessee shall add Lessor as an additional Insured by means of an endorsement at least as broad es the Insurance Service Organization's "Additional Insured -Managers or Lessors of Premises" Endorsement. The policy shall not contain any Intra -Insured exclusions as between insured persons or organizations, but shall ieclude coverage for liability assumed under this Lease es an "Insured contract" for the performance of Lessee's indemnity obligations under this Lease. The limits of said insurance shall not, however, limit the liability of Lessee nor relieve Lessee of any obligation hereunder. Lessee shall provide an endorsement on its liability poilcy(les) which provides that its Insurance shall be primary to and not contributory with any similar insurance carried by Lessor, whose Insurance shall be considered excess insurance only. PAGE 6 OF 17 INITIALS INITIALS ©2001 - AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM STG-15-4112E (b) Carried by Lessor. Lessor shall maintain liability Insurance as described In Paragraph 8.2(a), in addition to, and not in lieu of, the Insurance required to be maintained by Lessee. Lessee shall not be named as an additional insured therein. 8.3 Property Insurance - Building, Improvements and Rental Value. ;a) Building and Improvements, Tho Insuring Party shall obtain and keep In force a policy or policies in the name of Lossor, with loss payable to Lessor, any ground lessor, and to any Lendor Insuring loss or damage to the Premises. The amount of such Insurance shall be equal to the full insurable replacement cost of the Premises, as the same shall exist from time to time, or the amount required by any Lender, but In no event more than the commercially reasonable and available Insurable value thereof. Lessee Owned Alterations and Utility Installations, Trade Fixtures, and Lessee's personal property shall be Insured by Lessee not by Lessor. If the coverage Is ava fable and commercially appropriate, such policy or policies shall Insure against all risks of direct physical Toss or dsmage (except the perils of flood and/or earthquake unless required by a Lender or included in the Base Premium), Including coverage for debris removal and the enforcement of any Applicable Requirements requiring the upgrading, d©molitton, reconstruction or replacement of any portion of the Premises as the result of a covered loss. Said policy or policies shall also contain an agreed valuation provision In lieu of any coinsurance clause, waiver of subrogation, and inflation guard protection causing an increase In the annual property Insurance coverage amount by a factor of not Tess than the adjusted U.S. Department of Labor Consumer Price Index for All Urban Consumers for the city nearest to where the Premises are located. If such Insurance coverage has a deductible clause, the deductible amount shall not exceed $5,000 per occurrence, and Lessee shall be liable for such deductible amount In the event of an Insured Loss. (b) Rental Value. The Insuring Party shall obtain and keep In force a policy or policies in the name of Lessor with loss payable to Lossor arid any Lender, Insuring the foss of the full Rent for one year with an extended period of Indemnity for an additional 130 days ("Rental Value insurance"). Said Insurance shall contain an agreed •ratuation provision In lieu of any coinsurance clause, and the amount of coverage shall be adjusted annually to reflect the projected Rent otherwise payable by Lessee, for the next 12 month period. Lessee shall be liable for any deductible amount in the event of such loss. (c) Adjacent Premises. If the Premises are part of a larger building, or of a group of buildings owned by Lessor which are adjacent to the Premises, the Lessee shall pay for any Increase In the premiums for the property insurance of such building or buildings if said increase is caused by Lessee's acts, omissions, use or occupancy of the Premises. 8.4 Lessee's Property; Buslriess Intorruptlon Insurance; Worker's Compensation Insurance. (a) Property Damage. Lessee shall obtain and maintain Insurance coverage on all of Lessee's personal property, Trade Fixtures, and Lessee Owned Alterations and Utility Installations. Such Insurance shall be full replacement cost coverage with a deductible of not to exceed $1,000 per occurrence. The proceeds from any such Insurance shall be used by Lessee for the replacement of personal property, Trade Fixtures and Lessee Owned Alterations and Utility Installations. Lessee shall provide Lessor with written evidence that such insurance is in force. (b) Business Interruption. Lessee shall obtain arid maintain loss of Income and extra expense Insurance in amounts as will reimburse Lessee for direct or indirect foss of earnings attributable to all perlfs commonly insured against by prudent lessees in the business of Lessee or attributable to prevention of access to the Premises as a result of such perils. (c) Worker's Compensation Insurance. Lessee shall obtaln and maintain Worker's Compensation Insurance in such amount as may be required by Applicable Requirements. Such policy shall include a 'Waiver of Subrogation' endorsement. Lessee shall provide Lessor with a copy of such endorsement along with the certificate of Insurance or copy of the policy required by paragraph 8.5. (d) No Representation of Adequate Coverage. Lessor makes no representation that the limits or forms of coverage of insurance specified herein are adequate to cover Lessee's property, business operations or obligations under this Lease. 8.5 Insurance Policies, Insurance required herein shall be by companies maintaining during the policy term a "General Policyholders Rating" of at least A-, VII, as set forth In the most current issue of "Best's Insurance Guide", or such other rating as may be required by a Lender. Lessee shall not do or permit to bo done anything which Invalidates the required Insurance policies. Lessee shall, prior to the Start Date, deliver to Lessor certified cop os of policies of such insurance or certificates with copies of the required endorsements evidencing the existence and amounts of the required insurance. No such policy shall be cancelable or subject to modification except after 30 days prior written notice to Lessor, Lessee shall, at least 10 days prior to the expiration of such policies, furnish Lessor with evidence of renewals or "insurance binders" evidencing renewal thereof, or Lessor may order such Insurance and charge the cost thereof to Lessee, which amount shall be payable by Lessee to Lesser upon demand. Such policies shall be for a term of at least one year, or the length of the remaining term of this Lease, whichever is less. If either Party shall fail to procure and maONain the insurance required to be carried by it, the other Party may, but shall not be required to, procure and maintain the same. 8.6 Waiver of Subrogation. Without affecting any other rights or remedies, Lessee and Lessor each hereby release and relieve the other, and waive their entire right to recover darnages against the other, for loss of or damage to its property arising out of or incident to the perils required to be insured against heroin. The effect of such releases and waivers Is not limited by the amount of Insurance carried or required, or by any deductibles applicable hereto. The Parties agree to have their respective property damage insurance carriers waive any right to subrogation that such companies may have against Lessor or Lessee, as the case may be, so long as the Insurance is not Invalidated thereby. 8.7 Indemnity. Except for Lessor's gross negligence or willful misconduct, Lessee shall indemnify, protect, defend and hold harmless the Premises, Lessor and its agents, Lessor's master or ground lessor, partners and Lenders, from and against any and all claims, loss of rents and/or damages, liens, judgments, penalties, attorneys' and consultants' fees, expenses and/or liabilities arising out of, involving, or In connection with, the use and/or occupancy of the Premises by Lessee. if any action or proceeding Is brought against Lessor by reason of any of the foregoing matters, Lessee shall upon notice defend the same at Lessee's expense by counsel reasonably satisfactory to Lessor and Lessor shall cooperate with Lessee in such defense. Lessor need not have first paid any such claim in order to be defended or indemnified. 8.8 Exemption of Lessor and its Agents from Liability. Notwithstanding the negligence or breach of this Lease by Lessor or Its agents, neither Lessor nor its agents shall be liable under any circumstances for: (I) injury or damage to the person or goods, wares, merchandise or other property of Lessee, Lessee's employees, contractors, invitees, customers, or any other person In or about the Premises, whether such damage or injury is caused by or results from fire, steam, electrlcily, gas, water or rain, indoor air quality, the presence of mold or from the breakage, leakage, obstruction or other defects of pipes, fire sprinklers, wires, appliances, plumbing, HVAC or fighting fixtures, or from any other cause, whether the said injury or damage results from conditions arising upon the Premises or upon other portions of the building of which the Premises are a part, or from other sources or places, (II) any damages arising from any act or neglect of any other tenant of Lessor or from the failure of Lessor or its agents to enforce the provisions of any other lease in the Project, or (til) Injury to Lessee's business or for any loss of Income or profit therefrom. Instead, it Is Intended that Lessee's sole recourse In the event of such damages or Injury be to file a claim on the Insurance policy(les) that Lessee Is required to maintain pursuant to the provisions of paragraph 8. 8.9 Failure to Provide Insurance. Lessee acknowledges that any failure on its part to obtain or maintain the insurance required herein will expose Lessor to risks and potentially cause Lessor to incur costs not contemplated by this Lease, the extent of which will be extremely difficult to ascertain Accordingly, for any month or portion thereof that Lessee does not maintain the required Insurance and/or does not provide Lessor with the required binders or certificates evidencing the existence of the required Insurance, the Base Rent shall be automatically Increased, without any PAGE 7 OF 17 INITIALS INITIALS ®2001 - AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM STG-15-4/12E requirement for notice to Lessee, by an amount equal to 10% of the then existing Base Rent or $100, whichever Is greater. The parties agree that such increase In Base Rent represents fair and reasonable compensation for the additional risk/ costs that Lessor will Incur by reason of Lessee's failure to maintain the require./ Insurance. Such increase in Base Rent shall In no event constitute a waiver of Lessee's Default or Breach with respect to the failure to maintain such insurance, prevent the exercise of any of the other rights and remedies granted hereunder, nor relieve Lessee of its obligation to maintain the insurance specified in this Lease. 9. Damage or Destruction. 9.1 Definitions. (a) "Premises Partial Damage" shall mean damage or destruction to the improvements on the Premises, other than Lessee Owned Alterations and Utility Installations, which can reasonably be repaired in 6 months or less from the date of the damage or destruction. Lessor shall notify Lessee In writing within 30 days from the date of the damage or destruction es to whether or not the damage is Partial or Total. Notwithstanding the foregoing, Premises Partial Damage shall not Include damage to windows, doors, and/or other similar Items which Lessee has the responsibility to repair or replace pursuant to the provlsicns of Paragraph 7.1. (b) "Promises Total Destruction" shall mean damage or destruction to the Premises, other than Lessee Owned Alterations and Utility Installations and Trade Fixtures, which cannot reasonably be repaired In 6 months or less from the date of the damage or destruction. Lessor shall notify Lessee in writing within 30 days from the date of the damage or destruction as to whether or not the damage Is Partial or Total. (c) "Insured Loss" shall mean damage or destruction to improvements on the Premises, other than Lessee Owned Alterations and Utility Installations and Trade Fixtures, which was caused by an event required to be covered by the Insurance described in Paragraph 8.3(a), Irrespective of any deductible amounts or coverage lirnits involved. (d) "Replacement Cost" shall mean the cost to repair or rebuild the improvements owned by Lessor at the time of the occurrence to their condition existing immediately prior thereto, including demolition, debris removal and upgrading required by the operation of Applicable Requlretrents, and without deduction for depreciation. (e) "Hazardous Substance Condition" shall mean the occurrence or discovery of a condition involving the presence of, or a contamination by, a Hazardous Substance, In, on, or under the Premises which requires restoration, 9.2 Partial Damage - Insured Loss. If a Premises Partial Damage that Is an Insured Loss occurs, then Lessor shall, at Lessor's expense, repair such damage (but not Lessee's Trade Fixtures or Lessee Owned Alterations and Utility InstalfatIons) as soon as reasonably possible and this Lease shall continue in full force and effect; provided, however, that Lessee shall, at Lessors election, make the repair of any damage or destruction the total cost to repair of which Is $10,000 or less, and, in such event, Lessor shall make any applicable Insurance proceeds available to Lessee on a reasonable basis for that purpose. Notwithstanding the foregoing, if the required Insurance was not in force or the nsurance proceeds are not sufficient to effect such repair, the Insuring Party shall promptly contribute the shortage in proceeds (except as to the dedustibie which is Lessee's responsibility) as and when required to complete said repairs. In the event, however, such shortage was due to the fact that, by reason of the unique nature of the improvements, full replacement cost Insurance coverage was not commercially reasonable and available, Lessor shall have no obligation to pay for the shortage In Insurance proceeds or to fully restore the unique aspects of the Premises unless Lessee provides Lessor with the funds to cover same, or adequate assurance thereof, within 10 days following receipt of written notice of such shortage and request therefor. If Lessor receives said funds or adequate assurance thereof within said 10 day period, the party responsible for making the repairs shall complete them as soon as reasonably possible and this Lease shell remain In full force and effect. If such funds or assurance are not received, Lessor may nevertheless elect by written notice to Lessee within 10 days thereafter to: (i) make such restoration and repair as Is commercially reasonable with Lessor paying any shortage In proceeds, In which case this Lease shall remain in full force and effect, or (II) have this Lease terminate 30 days thereafter. Lessee shall not be entitled to reimbursement of any funds contributed by Lessee to repair any such damage or destruction. Premises Partial Damage due to flood or earthquake shall be subject to Paragraph 9.3, notwithstanding that there may be some insurance coverage, but the net proceeds of any such insurance shall be made available for the repairs if made by either Party. 9.3 Partial Damage - Uninsured Loss. If a Premises Partial Damage that Is not an Insured Loss occurs, unless caused by a negligent or willful act of Lessee (in which event Lessee shall make the repairs at Lessee's expense), Lessor may either: (I) repair such damage as soon as reasonably possible of Lessor's expense, in which event this Lease shall continue in full force and effect, or (Ii) terminate this Lease by giving written notice to Lessee within 30 days after receipt by Lessor of knowledge of the occurrence of such damage. Such termination shall be effective 60 days following the date of such notice, In the event Lessor elects to terminate this Lease, Lessee shall have the right within 10 days after receipt of the termination notice to give written notice to Lessor of Lessee's commitment to pay for the repair of such darnage without reimbursement from Lessor. Lessee shall provide Lessor with said funds or satisfactory assurance thereof within 30 days after making such commitment. In such event this Lease shall continue In full force and effect, and Lessor shall proceed to make such repairs as soon as reasonably possible after the required funds are available. If Lessee does not make the required commitment, this Lease shall terminate as of the date specified in the termination notice. 9.4 Total Destruction. Notwithstanding any other provision hereof, If a Premises Total Destruction occurs, this Lease shall terminate 60 days following such Destruction. If the damage or destruction was caused by the gross negligence or willful misconduct of Lessee, Lessor shall have the right to recover Lessor's damages from Lessee, except as provided in Paragraph 8.6. 9.5 Damage Near End of Term. If at any time during the last 6 months of this Lease there is damage for which the cost to repair exceeds one month's Base Rent, whether or not an Insured Loss, Lessor may terminate this Lease effective 60 days following tho date of occurrence of such damage by ping a written termination notice to Lessee within 30 days after the date of occurrence of such damage. Notwithstanding the foregoing, If Lessee at that time has an exercisable option to extend this Lease or to purchase the Premises, then Lessee may preserve this Lease by, (a) exercising such option and (b) provlding Lessor with any shortage in Insurance proceeds (or adequate assurance thereof) needed to make the repairs on or before the earlier of (I) the date which Is 10 days after Lessee's receipt of Lessor's written notice purporting to terminate this Lease, or (h) the day prior to the date upon which such option expires. If Lessee duly exercises such option during such period and provides Lessor with funds (or adequate assurance thereof) to cover any shortage In Insurance proceeds, Lessor shall, at Lessor's commercially reasonable expense, repair such damage as soon as reasonably possible and this Lease shall continue in full force and effect. If Lessee falls to exercise such option and provide such funds or assurance during such period, then this Lease shall terminate on the date specified in the termination notice and Lessee's option shall be extinguished. 9.6 Abatement of Rent; Lessee's Remedies. (a) Abatement, In the event of Premises Partial Damage or Premises Total Deslnrctlon or a Hazardous Substance Condition for which Lessee is not responsible under This Lease, the Rent payable by Lessee for the period required for the repair, remediation or restoration of such damage shall be abated in proportion to the degree to which Lessee's use of the Premises is unpaired, but not to exceed the proceeds received from the Rental Value Insurance. All other obligations of Lessee hereunder shall be performed by Lessee, and Lessor shall have no liability for any such damage, destruction, remediation, repair or restoration except as provided herein. (b) Remedies. If Lessor is obligated to repair or restore the Premises and does not commence, in a substantial and meaningful way, such repair or restoration within 90 days after such obligation shall accrue, Lessee may, at any time prior to the commencement of such repair or PAGE 8 OF 17 INITIALS ©2001 - AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM STG-16-4/12E INITIALS restoration, give written notice to Lessor and to any Lenders of which Lessee has actual notice, of Lessee's election to terminate thls Lease on a date not less than 60 days following the giving of such notice. If Lessee gives such notice and such repair or restoration Is not commenced within 30 days thereafter, this Leese shall terminate as of the date specified in said notice. If the repair or restoration is commenced within such 30 days, this Lease shall continue In full force and effect. "Commence" shall mean Dither the uncondltlonal at.dhorizatlon of the preparation of the required plans, or the beginning of the actual work on the Premises, whichever first occurs. 0.7 Termination; Advance Payments. Upon termination of thls Lease pursuant to Paragraph 6.2(g) or Paragraph 9, an equitable adjustment shall be made concerning advance Base Rent and any other advance payments made by Lessee to Lessor. Lessor shall, in addition, return to Lessee so much cf Lessee's Security Deposit as has not been, or is not then required to be, used by Lessor. 10. Real Property Taxes. 10.1 Definition. As used herein, the term "Real Property Taxes" shall incfude any form of assessment; real estate, general, special, ordinary or extraordinary, or rental levy or tax (other then Inheritance, personal Income or estate taxes); Improvement bond; and/or license fee imposed upon or levied against any legal or equitable interest of Lessor In the Premises or the Project, Lessor's right to other income therefrom, and/or Lessor's business of leasing, by any authority having the direct or indirect power to tax and where the funds are generated with reference to the Building address and where the proceeds so generated are to be applied by the clty, county or other local taxing authority of a Jurisdiction within which the Premises are located. Real Property Taxes shall also include any tax, fee, levy, assessment or charge, or any Increase thereln: (I) imposed by reason of events occurring during the term of this Lease, including but not Milted to, a change In the ownership of the Premises, and (I1) levied or assessed on machinery or equipment provided by Lessor to Lessee pursuant to this Lease. 10.2 .;a) Payment of Taxes. Lessor shall pay the Real Property Taxes applicable to the Premises provided, however, that Lessen shall pay to Lessor the amount, If any, by which Real Property Taxes applicable to the Premises Increase over the fiscal tax year during which the Commencement Date Occurs (Tax increase). Payment of any such Tax Increase shall be made by Lessee to Lessor within 30 days after receipt of Lessor's written statement setting forth the amount due and computation thereof. If any such taxes shall cover any period of Lme prior to or after the expiration or termination of this Lease, Lessee's share of such taxes shall be prorated to cover only that portion of the tax bill applicable to the period that this Lease is in effect. In the event Lessee incurs a late charge on any Rent payment, Lessor may estimate the current Real Property Taxes, arid require (hat the Tax Increase be paid In advance to Lessor by Lessee monthly In advance with the payment of the Base Rent. Such monthly payment shall be en amount equal to the amount of the estimated installment of the Tax Increase divided by the number of months remaining before the month in which said Installment becomes delinquent, When the actual amount of the applicable Tax Increase is known, the amount of such equal monthly advance payments shall be adjusted as required to provide the funds needed to pay the applicable Tax Increase. If the amount collected by Lessor is Insufficient to pay the Tax Increase when due, Lessee shall pay Lessor, upon demand, such additional sums as are necessary to pay such obligations. Advance payments may be intermingied with other moneys of Lessor and shall not bear interest. In the event of a Breach by Lessee in the performance of its ooligations under thls Lease, then any such advance payments may be treated by Lessor as an additional Security Deposit. (b) Additional Improvements. Notwithstanding anything to the contrary in this Paragraph 10.2, Lessee shall pay to Lessor upon demand therefor the entirety of any Increase In Real Property Taxes assessed by reason of Alterations or Utility Installations placed upon the Premises by Lessee or at Lessee's request or by reason of any alterations or improvements to the Premises made by Lessor subsequent to the execution of this Lease by the Pariles. 10.3 Joint Assessment, If the Premises are not separately assessed, Lessee's liability shall be an equitable proportion of the Tax Increase for all of the land and improvements Included within the tax parcel assessed, such proportion to be conclusively determined by Lessor from the respective valuations assigned In the assessors work sheets or such other information as may be reasonably available. 10.4 Personal Property Taxes. Lessee shall pay, prior to delinquency, all taxes assessed against and levied upon Lessee Owned Alterations, Utility Installations, Trade Fixtures, furnishings, equipment and all personal property of Lessee. When possible, Lessee shall cause its Lessee Owned Alterations and Utility Installations, Trade Fixtures, furnishings, equipment and all other personal property to be assessed and billed separately from the real property of Lessor. If any of Lessee's said property shall be assessed with Lessors real property, Lessee shall pay Lessor the taxes attributable to Lessee's property within 10 days after recelpt of a written statement setting forth the taxes applicable to Lessee's property. 11. Utilities and Sorvlces. Lessee shall pay for all water, gas, heat, tight, power, telephone, trash disposal and other utilities and services supplied to the Premises, together with any taxes thereon. If any such services are not separately metered or billed to Lessee, Lessee shall pay a reasonable proportion, to be determined by Lessor, of all charges Jointly metered or billed, There shall be no abatement of rent and Lessor shalt not be liabte In any respect whatsoever for the inadequacy, stoppage, interruption or discontinuance of any utility or service due to riot, strike, labor dispute, breakdown, accident, repair or other cause beyond Lessor's reasonable control or in cooperation with governmental request or directions. 12. Assignment and Subletting. 12.1 Lessor's Consent Required. (a) Lessee shall not voluntarily or by operation of law assign, transfer, mortgage or encumber (collectively, "assign or assignment") or sublet all or any part of Lessee's interest In this Lease or In the Premises without Lessor's prior written consent. (b) Unless Lessee Is a corporation and its stock is publicly traded on a national stock exchange, a change in the control of Lessee shall constitute an assignment requiring consent. The transfer, on a cumulative basis, of 25% or more of the voting control of Lessee shall constitute a change In control for this purpose. (c) The Involvement of Lessee or its assets In any transaction, or series of transactions (by way of merger, sale, acquisition, financing, transfer, leveraged buy-out or otherwise), whether or not a formal assignniont or hypothecation of this Lease or Lessee's assets occurs, which results or will result In a reduction of the Not Worth of Lessee by an amount greater than 25% of such Net Worth as it was represented at the time of the execution of this Lease or at the time of the most recent assignment to which Lessor has consented, or as It exists immediately prior to said transaction or transactions constituting such reduction, whichever was or Is greater, shall be considered an assignment of this Lease to which Lessor may withhold its consent. "Net Worth of Lossoe" shall mean the net worth of Lessee (excluding any guarantors) established under generatfy accepted accounting principles. (d) An assignment or subletting without consent shall, at Lessor's option, be a Default curable after notice per Paragraph 13.1(0), or a noncurable Breach without the necessity of any notice and grace period. If Lessor elects to Treat such unapproved assignment or subletting as a noncurable Breach, Lessor may either. (I) terminate this Lease, or (ii) upon 30 days written notice, Increase the monthly Base Rent to 1 10% of the Base Rent then In effect. Further, in the event of such Broach and rental adjustment, (I) the purchase price of any option to purchase the Premises held by Lessee shall he subject to similar adjustment to 110% of tho price previously in effect, and (II) all fixed and non -fixed rental adjustments scheduled during the remainder of the Lease torte shall be Increased to 110% of the scheduled adjusted rent. (e) Lessees remedy for any breach of Paragraph 12.1 by Lessor shall be limited to compensatory damages and/or injunctive relief. (f) Lessor may reasonably withhold consent to a proposed assignment or subletting if Lessee is In Default at the time consent Is requested. PAGE 9 OF 17 INITIALS INITIALS 02001 - AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM STG-15-4112E (g) Notwithstanding the foregoing, allowing a de minimis portion of the Premises, le. 20 square feet or less, to be used by a third party vendor In connection with the Installation of a vending machine or payphone shall not constitute a subletting. 12.2 Terms and Conditions Applicable to Assignment and Subletting. (a) Regardless of Lessor's consent, no assignment or subletting shall: (1) be effective without the express written assumption by such assignee or sublessee of the obligations of Lessee under this Lease, (II) release Lessee of any obligations hereunder, or (III) alter the primary (lability of Lessee for the payment of Rent or for the perfcmiance of nny other obligations to be performed by Lessee. (b) Lessor niay accept Rent or performance of Lessee's obligations from any person other than Lessee pending approval or disapproval of an ossignment. Neither a delay in the approval or disapproval of such ass;gnment nor the acceptance of Rent or performance shall constitute u waiver or estoppel of Lessor's right to exercise Its remedies for Lessee's Default or Breach. (c) Lessor's consent to any assignment or subletting shall not constitute a consent to any subsequent assignment or subletting. (d) In the event of any Default or Breach by Lessee, Lessor may proceed directly against Lessee, any Guarantors or anyone else responsible for the performance of Lessee's obligations under this Lease, including any assignee or sublessee, without first exhausting Lessor's remedies against any other person or entity responsible therefor to Lessor, or any security held by Lessor. to) Each request for consent to an assignment or subletting shall be In writing, accompanied by information relevant to Lessor's determination as to the financial and operational responsibility and appropriateness of the proposed assignee or sublessee, Including but not limited to the Intended use and/or required modification of the Premises, If any, together with a fee of $500 as consideration for Lessor's considering and processing said request. Lessen agrees to provide Lessor with such other or additional information and/or documentation as may be reasonably requested. (Seo also Paragraph 36) (f) Any assignee of, or sublessee under, this Lease shall, by reason of accepting such assignment, entering into such sublease, or entering Into possession of the Premises or any portion thereof, be deemed to have assumed and agreed to conform and comply with each and every term, covenant, condition and obligation herein to be observed or performed by Lessee during the term of said assignment or sublease, other than such obligations as are ccntrary to or inconsistent with provisions of an assignment or sublease to which Lessor has specifically consented to in writing. (g) Lessors consent to any assignment or subletting shall not transfer to the assignee or sublessee any Option granted to the original Lessee by This Lease unless such transfer is specificnlly consented to by Lessor In writing. (Soe Paragraph 39.2) 12.3 Additional Terms and Conditions Applicable to Subletting. The following terms and conditions shall apply to any subletting by Lessee of all or any part of the Premises and shall be deemed Included In all subleases under this Lease whether or not expressly Incorporated therein: ;a) Lessee hereby assigns and transfers to Lessor all of Lessee's interest in all Rent payable on any sublease, and Lessor may collect such Rent and apply same toward Lessee's obligations under this Lease; provided, however, that until a Breach shall occur in the performance of Lessee's obligations. Losses may collect said Rent. In the event that the amount collected by Lessor exceeds Lessee's then outstanding obligations any such excess shall be refunded to Lessee. Lessor shall not, by reason of the foregoing or any assignment of such sublease, nor by reason of the collection of Rent, be deemed liable to the sublessee for any failure of Lessee to perfcrm and comply with any of Lessee's obligations to such sublessee. Lessee hereby irrevocably authorizes and directs any such sublessee, upon receipt of a written notice from Lessor stating that a Breach exists In the performance of Lessee's obligations under this Lease, to pay to Lessor all Rent due and to become due under tho sublease. Sublessee shall rely upon any such notice from Lessor and shall pay all Rents to Lessor without any obligation or right to inquire as to whether such Breach exists, notwithstanding any claim from Lessee to the contrary. (b) In the event of a Breach by Lessee, Lessor may, al Its option, require sublessee to attorn to Lessor, In which event Lessor shail undertake the obligations of the sublessor under such sublease from the time of the exercise of said option to the expiration of such sublease; provided, however, Lessor shall not bo liable for any prepaid rents or security deposit paid by such sublessee to such sublessor or for any prior Defaults or Breaches of such sublessor. (c) Any matter requiring the consent of the sublessor under a sublease shall also require the consent of Lessor. (d) No sublessee shall further assign or sublet all or any part of the Premises without Lessor's prior written consent. (e) Lessor shall deliver a copy of any notice of Default or Breach by Lessee to the sublessee, who shall have the right to cure the Default of Lessee within the grace period, if any, specified in such notice. The sublessee shall have a right of reimbursement and offset from and against Lessee for any such Defaults cured by the sublessee. 13. Default; Breach; Remedios. 13.1 Default; Breach. A "Default" Is defined as a falluro by the Lessee to comply with or perform any of the terms, covenants, conditions or Rules and Regulations under this Lease. A "Breach" is defined as the occurrence of one or more of the following Defaults, and the failure of Lessee to euro such Default within any applicable grace period: (a) The abandonment of the Premises; or the vacating of the Premises without providing a commercially reasonable level of security, or where the coverage of the property Insurance described In Paragraph 8.3 is jeopardized as a result thereof, or without providing reasonable assurances to minimize potential vandalism. (b) The failure of Lessee to make any payment of Rent or any Security Deposit required to be made by Lessee hereunder, whether to Lessor or to a third party, when due, to provide reasonable evidence of insurance or surety bond, or to fulfill any obligation under this Lease which endangers or threatens fife or property, where such failure continues for a period of 3 business days following written notice to Lessee. TFIE ACCEPTANCE BY LESSOR OF A PARTIAL PAYMENT OF RENT OR SECURITY DEPOSIT SHALL NOT CONSTITUTE A WAIVER OF ANY OF LESSOR'S RIGHTS, INCLUDING LESSOR'S RIGHT TO RECOVER POSSESSION OF THE PREMISES. (c) Tho failure of Lessee to allow Lessor and/or its agents access to the Premises or the commission of waste, act or acts constituting public or private nuisance, and/or an ltiegat activlly on the Premises by Lessee, where such actions continue for a period of 3 business days following written notice to Lessee. (d) The failure by Lessee to provide (I) reasonable written evidence of compliance with Applicable Requirements, (II) the service contracts, (ill) the rescission of an unauthorized assignment or subletting, (iv) an Estoppel Certificate or financial statements, (v) a requested subordination, (vi) evidence concerning any guaranty and/or Guarantor, (vii) any document requested under Paragraph 42, (viii) material safety data sheets (MSDS), or (ix) any other documentation or information which Lessor may reasonably require of Lessee under the terms of this Lease, whore any such failure continues for a period of 10 days following written notice to Lessen. (e) A Default by Lessee as to the terms, covenants, conditions or provisions of this Lease, or of the rules adopted under Paragraph 10 hereof, other than those described In subparagraphs 13.1(a), (b), (c) or (d), above, where such Default continues for a period of 30 days after written notice; provided, however, that if the nature of Lessee's Default Is such that more than 30 days are reasonably required for its curd, then it shall not be deemed to be a Breach If Lessee commences such cure within said 30 day period and thereafter diligently prosecutes such cure to completion. (1) The occurrence of any of the following events: (f) the making of any general arrangement or assignment for the benefit of creditors; (11) becoming a "debtor" as defined In 11 U.S.C. §101 or arty successor statute thereto (unless, in the case of a petition filed against Lessee, the same Is dlsrnissed within 60 days); (iii) the appointment of a trustee or receiver to take possession of substantially all of Lessee's assets located at PAGE 10 OF 17 INITIALS INITIALS ©2001 - AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM STG-15-4112E the Premises or of Lessee's interest In this Lease, where possession is not restored to Lessee within 30 days; or (Iv) the attachment, execution or other Judicial seizure of substantially all of Lessee's assets located at the Premises or of Lessee's interest In this Lease, where such seizure Is not discharged within 30 days; provided, however, In the event that any provision of this subparagraph (e) Is contrary to any applicable law, such provision shall be of no force or effect, and not affect the validity of the remaining provisions. (g) The discovery that any financial statement of Lessee or of any Guarantor given to Lessor was materially false. (h) If the performance of Lessee's otllgations under this Lease Is guaranteed: (t) the death of a Guarantor, (1) the termination of a Guarantor's liability with respect to this Lease other than in accordance with the terms of such guaranty, (iii) a Guarantor's becoming Insolvent or the subject of a bankruptcy tiling, (v) a Guarantor's refusal to honor the guaranty, or (v) a Guarantor's breach of Its guaranty obligation on an anticipatory basis, and Lessee'a failure, within GO days following written notice of any such event, to provide written alternative assurance or security, which, when coupled with the thea existing resources of Lessen, equals or exceeds the combined financial resources of Lessee and the Guarantors that existed at the time of execution of this Lease. 13.2 Remedies. If Lessee falls to perform any of its affirmative dunes or obligations, within 10 days after written notice (or in case of an emergency, without notice), Lessor may, at its option, perform such duty or obtlgalion on Lessee's behalf, including but not limited to the obtaining of reasonably required bonds, insurance policies, or governmental licenses, pemills or approvals. Lessee shall pay to Lessor an amount equal to 115% of the costs and expenses incurred by Lessor in such performance upon receipt of an invoice therefor. In the event of a Breach, Lessor may, with or without further notice or demand, and without limiting Lessor In the exercise of any right or remedy which Lessor may have by reason of such Breach: (a) Terminate Lessee's right to possession of the Premises by any lawful means, In which case this Lease shall terminate and Lessee shall Immediately surrender possession to Lessor. In such event Lessor shall be entitled to recover from Lessee: (I) the enpaid Rent which had been earned at the time of termination; (11) the worth at the time of award of the amount by which the unpaid rent which would have been earned after termination until the time of award exceeds the amount of such rental loss that the Lessee proves could have been reasonably avoided; (ill) the worth al the time of award of the amount by which the unpatd rent for the balance of the terns after the time of award exceeds the amount of such rental loss that the Lessee proves could he reasonably avoided; and (iv) any other amount necessary to compensate Lessor for all the detriment proximately caused by the Lessee's failure to perform its obligations under this Lease or which In the ordinary course of things would bo likely to result therefrom, Including but not limited to the cost of recovering possession of the Premises, expenses of reletting, Incicding necessary renovation and alteration of the Promises, reasonable attorneys' fees, and that portion of any leasing commission paid by Lessor in connection with this Lease applicable to the unexpired term of this Lease. The worth at the lime of award of the amount referred to in provision (lit) of the immediately preceding sentence shall be computed by discounting such amount at the discount rate of the Federal Reserve Bank of the District within which the Premises are located at Iho time of award plus one percent. Efforts by Lessor to mitigate damages caused by Lessee's Breach of this Lease shalt not waive Lessor's right to recover any damages to which Lessor Is otherwise entitled. If termination of this Lease Is obtained through the provisional remedy of unlawful detainer, Lessor shall have the right to recover in such proceeding any unpaid Rent and damages as are recoverable therein, or Lessor may reserve the right to recover all or any part thereof In a separate suit. If a notice and grace period required under Paragraph 13.1 was not previously given, a notice to pay rent or quit, or to perform or quit given to Lessee under the unlawful detainer statute shall also constitute the notice required by Paragraph 13.1. In such case, the applicable grace period required by Paragraph 13.1 and the unlawful detainer statute shall run concurrently. and the failure of Lessee to cure the Default within the greater of the two such grace periods shall constitute both an unlawful detainer and a Breach of This Lease entitling Lessor to the remedies provided for In this Lease and/or by said statute. (b) Continue the Lease and Lessee's right to possession and recover the Rent as It becomes due, in which event Lessee may sublet or assign, subject only to reasonable limitations. Acts of maintenance, efforts to relet, and/or the appointment of a receiver to protect the Lessor's interests, shall not constitute a termination of the Lessee's right to possession. (c) Pursue any other remedy now or hereafter available under the laws or judicial decisions of the state wherein the Premises are located. The expiration or termination of this Lease and/or the termination of Lessee's right to possession shall not relieve lessee from (lability undor any Indemnity provisions of this Lease as to matters occurring or accruing during the term hereof or by reason of Lessee's occupancy of the Premises. 13.3 Inducement Recapture. Any agreement for free or abated rent or other charges, or for the giving or paying by Lessor to or for Lessee of any cash or other bonus, Inducement or consideration for Lessee's entering Into this Lease, all of which concessions are hereinafter referred to as "Inducement Provisions," shall be deemed conditioned upon Lessee's full and faithful performance of all of the terms, covenants and conditions of this Lease. Upon Broach of this Lease by Lessee, any such Inducement Provision shall automatically be deemed deleted from this Lease and of no further force or effect, and any rent, other charge, bonus, inducement or consideration theretofore abated, given or paid by Lessor under such an inducement Provision shall be immediately due and payable by Lessee to Lessor, notwithstanding any subsequent cure of said Breach by Lessee. The acceptance by Lessor of rent or the cure of the Breach which Initialed the operation of this paragraph shall not be deemed a waiver by Lessor of the provisions of this paragraph unless specifically so stated In writing by Lessor at the time of such acceptance. 13.4 Late Charges. Lessen hereby acknowledges that late payment by Lessee of Rent will cause Lessor to incur costs not contemplated by this Lease, the exact amount of which will be extremely difficult to ascertain. Such costs Include, but are not limited to, processing and accounting charges, and late charges which may be Imposed upon Lessor by any Lender. Accordingly, If any Rent shall not be received by lessor within 5 days after such amount shall be due, then, without any requirement for notice to Lessee, Lessee shall immediately pay to Lessor a one-time late charge equal to 10% of each such overdue amount or S100, whichever Is greater. The Parties hereby agree that such tate charge represents a fair and reasonable estimate of the costs Lessor will Incur ey reason of such late payment. Acceptance of such late charge by Lessor shall In no event constitute a waiver of Lessee's Default or Breach with respect to such overdue amount, nor prevent the exercise of any of the other rights and remedies granted hereunder. In the event that a late charge Is payable hereunder, whether or not collected, for 3 consecutive installments of Base Rent, then notwithstanding any provision of this Lease to the contrary, Base Rent shall, at Lessor's option, become due and payable quarterly In advance. 13.5 Interest. Any monetary payment due Lessor hereunder, other than late charges, not received by Lessor, when due as to scheduled payments (such as Base Rent) or within 30 days following the date on which it was due for non-scheduled payment, shall bear interest from the date when due, as to scheduled payments, or the 31st day after it was due as to non-scheduled payments. The Interest ("Interest") charged shah be computed at the rate of 10% per annum but shall not exceed the maximum rate allowed by law. Interest Is payable in addlt on to the potential late charge provided for In Paragraph 13.4. 13.6 Breach by Lessor. (a) Notice of Breach. Lessor shall not he deemed in breach of this Lease unless Lessor falls within a reasonable time to perform an obligation required to be performed by Lessor. For purposes of this Paragraph, a reaeonabie time shall in no event be fess than 30 days after receipt by Lessor, and any Lender whose name arrd address shall have been furnished Lessee In writing for such purpose, of written notice specifying wherein such obligation of Lessor has not been performed; provided, however, that If the nature of Lessor's obligation is such that more than 30 days are reasonably required for its performance, then Lessor shall not be In breach if performance is commenced within such 30 day period and thereafter diligently pursued to completion. (b) Performance by Lessee on Behalf of Lessor. In the event that neither Lessor nor Lender cures said breach within 30 days PAGE 11 OF 17 INITIALS 102001 - AIR COMMERCIAL REAL ESTATE ASSOCIATION INITIALS FORM STG-15-4/12E after receipt of said notice, or If having commenced saki curd they do not diligently pursue It to completion, then Lessee may elect to cure said breach at Lessee's expense and offset from Rent the actual and reasonable cost to perform succi cure, provided however, that such offset shall not exceed an amount equal to the greater of one month's Base Rent or the Security Deposit, reserving Lessee's right to seek reimbursement from Lessor for any such expense In excess of such offset. Lessee shall document the cost of said cure and supply sald documentation to Lessor. 14. Condemnation. If the Premises or any portion thereof are taken under the power of eminent domain or sold under the threat of the exercise of said power (collectively "Condemnation"), this Lease shall terminate as to the part taken as of the date the condemning authority lakes title or possesslon, whichever first occurs. If more than 10% of the Building, or more than 25% of that portion of the Premises not occupied by any building, Is taken by Condemnation, Lessee may, at Lessee's option, to be exercised in writing within 10 days after Lessor shall have given Lessee written notice of such taking (or In the absence of such notice, within 10 days after the condemning authority shall have taken possession) terminate this Lease as of the date the condemning authority takes such possession. If Lessee does not terminate this Lease in accordance with the foregoing, this Leaso shall remain In full force and effect as to the portion of the Premises remaining, except that the Base Rent shall be reduced in proportion to the reduction in utility of the Premises caused by such Condemnation. Condemnation awards and/or payments shall be the property of Lessor, whether such award shall bo made as compensation for diminution In value of the leasehold, the value of the part taken, or for severance damages; provided, however, that Lessee shall be entitled to any compensation paid by the condemnor for Lessee's relocation expenses, loss of business goodwill and/or Trade Fixtures, without regard to whether or not this Lease Is terminated pursuant to the provislons of this Paragraph. All-Alteretleas-and Utllky Installations -made to the -Premises- by Lessee,—for purposes of -Condemnation • only; shall lee considered-the-preperty of -fire -Lessee -and -t eseee-shall- be-emieed-to-any-and all sempensallon which lepayable-therefor--In the event that this Lease Is riot terminated by reason of the Condemnation, Lessor shall repair any damage to the Premises caused by such Condemnation. 15. Brokerage Fees. 15.1 Addltional Commiseton. If a separate brokerage fee agreement Is attached then in addition to the payments owed pursuant to Paragraph 1.9 above, and unless Lessor and the Brokers otherwise agree In writing, Lessor agrees that: (a) if Lessee exercises any Option, (b) if Lessee or anyone affiliated with Lessee acquires any rights to the Premises or other premises owned by Lessor and located within the same Project, if any, within which the Premises Is located, (c) If Lessee remains In possession of the Premises, with the consent of Lessor, after the expiration of this Lease, or (d) If Base Ront is Increased, whether by agreement or operation of an escalation clause herein, then, Lessor shall pay Brokers a fee in accordance with the schedule attached to such brokerage fee agreement. 15.2 Assumption of Obligations. Any buyer or transferee of Lessor's Interest in this Lease shall be deemed to have assumed Lessor's obligation hereunder. Brokers shall be third party benefclarles of the provisions of Paragraphs 1.9, 15, 22 and 31. If Lessor falls to pay to Brokers any amounts due as and for brokerage fees pertaining to this Lease when due, then such amounts shall accrue Interest. In addition, If Lessor fails to pay any amounts to Lessee's Broker when due, Lessee's Broker may send written notice to Lessor and Lessee of such failure and if Lessor falls to pay such amounts within 10 days after said notice, Lessee shall pay said monies to its Broker and offset such amounts against Rent. In addition, Lessee's Broker shall be deemed to be a third party beneficiary of any commission agreement entered into by and/or between Lessor and Lessor's Broker for the limited purpose of collecting any brokerage fee owed. 15.3 Representations and Indemnities of Broker Relationships. Lessee and Lessor each represent and warrant to the other that It has had no dealings with any person, firm, broker or finder (other than the Brokers, If any) In connection with this Lease, and that no one other than sald named Brokers Is entitled to any commission or finder's fee In connection herewith. Lessee and Lessor do each hereby agree to Indemnify, protect, defend and hold the other harmless from and against liability for compensation or charges which may be claimed by any such unnamed broker, finder or other similar party by reason of any dealings or actions of the indemnifying Party, including any costs, expenses, attorneys' fees reasonably incurred with respect thereto. 16. Estoppel Certificates. (a) Each Party (as "Responding Party") shall within 10 days after written notice from the other Party (the "Requesting Party") execute, acknowledge and deliver to the Requesting Party a statement in writing in form similar to the then most current "Estoppel Certificate" form published by the AIR Commercial Real Estate Association, plus such additional information, confirmation and/or statements as may be reasonably requested by the Requesting Party. (b) If the Responding Party shall fail to execute or deliver the Estoppel Certificate within such 10 day period, the Requesting Party may execute an Estoppel Certificate stating that: (I) the Lease Is In full force and effect without modification except as may be represented by the Requesting Party, (fl) there aro no uncured defaults in the Requesting Party's performance, and (III) If Lessor Is the Requesting Party, not more than one month's rent has boon paid In advance. Prospective purchasers and encumbrancers may rely upon the Requesting Party's Estoppel Certificate, and the Responding Party shall bo estopped from denying the truth of the facts contained in said Certificate. In addition, Lessee acknowledges that any failure on its part to provide such an Estoppel Certificate will expose Lessor to risks and potentially cause Lessor to incur costs not contemplated by this Lease, the extent o' which will be extremely difficult to ascertain. Accordingly, should the Lessee fall to execute and/or deliver a requested Estoppel Certificate In a timely fashion the monthly Base Rent shall be automatically Increased, without any requirement for notice to Lessen, by an amount equal to 10% of the then existing Base Rent or 5100, whichever is greater for remainder of the Lease. The Parties agree /hal such increase In Base Rent represents fair and reasonable compensation for the additional risk/costs that Lessor will incur by reason of Lessee's failure to provide the Estoppel Certificate. Such increase In Base Rent shall in no event constitute a waiver of Lessee's Default or Breach with respect to the failure to provide the Estoppel Certificate nor prevent the exercise of any of the other rights and remedies granted hereunder. (c) If Lessor desires to finance, refinance, or set the Premises, or any part thereof, Lessee and all Guarantors shall within 10 days after written notice from Lessor deliver to any potential lender or purchaser designated by Lessor such financial statements as may be reasonably required by such lender or purchaser, including but not Ilmited to Lessee's financial statements for the past 3 years. All such financial statements shall be received by Lessor and such lender or purchaser In confidence and shall be used only for the purposes herein set forth. 17. Definition of Lessor. The term "Lessor" as used herein shall mean the owner or owners at the time In question of the fee title to the Premises, or, If this Is a sublease, of the Lessee's interest in the prior lease. In the event of a transfer of Lessor's title or interest in the Premises or this Lease, Lessor shall deliver to the transferee or assignee (in cash or by credit) any unused Security Deposit held by Lessor. Upon such transfer or assignment and delivery of the Security Deposit, as aforesaid, the prior Lessor shall be relieved of all liabllity with respect to the obligations and/or covenants under this Lease thereafter to be performed by the Lessor. Subject to the foregoing, the oblfgatlons and/or covenants In this Lease to be performed by the Lessor shall be binding only upon the Lessor as herelnabove defined. 18. Severablllty. The Invalidity of any provfslon of this Lease, as determined by a court of competent jurlsdlctlon, shall In no way affect the validity of any other provision hereof. 19. Days. Unless othervrlse specifically Indicated to the contrary, the word "days" as used In this Lease shall mean and refer to calendar days. 20. Limitation on Liability. The obligations of Lessor under this Lease shall not constitute personal obligations of Lessor or its partners, members, directors officers or shareholders, and Lessee shall look to the Premises, and to no other assets of Lessor, for the satisfaction of any liability of Lessor with respect to lhls Lease, and shall not seek recourse against Lessers partners, members, directors, officers or shareholders, or any of their PAGE 12 OF 17 INITIALS INITIALS ©2001 - AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM STG-15-4112E personal assets for such satisfaction. 21. Time of Essence, Time Is of the essence with respect to the performance of all obligations to be performed or observed by the Parties under this Lease. 22. No Prior or Other Agreements; Broker Disclaimer. This Lease contains all agreements between the Parties with respect to any matter mentioned herein, and no other prior or contemporaneous agreement or understanding shall be effective. Lossor and Lessee each represents and warrants to the Brokers that it has made, and Is relying solely upon, Its own Investigation as to the nature, quality, character and financial responsibility of the other Party to this Lease and as to the use, nature, quality and character of the Premises. Brokers have no responsibility with respect thereto or with respect to any default or breach hereof by either Party. 23. Notices. 23.1 Notice Requirements. All notices required or permitted by this Lease or appllcabie law shall be In writing and may be delivered In person (by hand or by courier) or may be sent by regular, certified or registered mall or U.S. Postal Service Express Mail, with postage prepaid, or by facsimile transmission, and shall be deemed sufficiently given If served In a manner specified in this Paragraph 23. The addresses noted adjacent to a Party's signature on this Lease shall be that Party's address for delivery or mailing of notices. Either Party may by written notice to the other specify a different address for notice, except that upon Lessee's taking possession of the Premises, the Premises shall constitute Lessee's address for notice. A copy of all notices to Lessor shall be concurrently transmitted to such party or parties al such addresses as Lessor may from lime to time hereafter designate In writing. 23.2 Date of Notice. Any notice sent by registered or certifled mall, return receipt requested, shall be deemed given on the date of delivery shown on the receipt card, or if no delivery date Is shown, the postmark thereon. If sent by regular mail the notice shall ho deemed given 72 hours after the same is addressed as required herein and mailed with postage prepaid. Notices delivered by United States Express Mail or overnight courier that guarantees next day delivery shall be deemed given 24 hours after delivery of the same to the Postal Service or courier. Notices transmitted by facsimile transmission or similar means shall be deemed delivered upon telephone confirrnation of receipt (conflrmalion report from fax machine is sufficient), provided a copy Is also delivered via delivery or mall. If notice Is received on a Saturday, Sunday or legal holiday, it shall be deemed received on the next business day. 24. Waivers. (a) No waiver by Lessor of the Default or Breach of any term, covenant or condition hereof by Lessee, shall he deemed a waiver of any other temm, covenant or condition hereof, or of any subsequent Default or Breach by Lessen of the same or of any other term, covenant or condition hereof. Lessor's consent to, or approval of, any act shall not he deemed to render unnecessary the obtaining of Lessors consent to, or approval of, any subsequent or similar act by Lessee, or be construed as the basis of an estoppel to enforce the provision or provisions of this Lease requiring such consent. (b) The acceptance of Rent by Lessor shall not be a waiver of any Default or Breach by Lessee. Any payment by Lessee may be accepted by Lessor on account of moneys or damages due Lessor, notwithstanding any qualifying statements or conditions made by Lessee in connection therewith, which such statements and/or conditions shall be of no force or effect whatsoever unless specifically agreed to in writing by Lessor at or before the time of deposit of such payment. (c) THE PARTIES AGREE THAT THE TERMS OF THIS LEASE SHALL GOVERN WITH REGARD TO ALL MATTERS RELATED THERETO AND HEREBY WAIVE THE PROVISIONS OF ANY PRESENT OR FUTURE STATUTE TO THE EXTENT THAT SUCH STATUTE IS INCONSISTENT WITH THIS LEASE. 25. Disclosures Regarding The Nature of a Real Estate Agency Relationship. (a) When entering Into a discussion with a real estate agent regarding a real estate transaction, a Lossor or Lessee should from the outset understand what type of agency relationship or representation It has with the agent or agents in the transaction. Lessor and Lessee acknowledge being advised by the Brokers in this transaction, as follows: (i) Lessor's Anent. A Lessor's agent under a listing agreement with the Lessor acts as the agent for the Lessor only. A Lessor's agent or subagent has the following affirmative obligations: To the Lessor: A fiduciary duty of utmost care, integrity, honesty, and loyalty In dealings with the Lessor. To (pe Lessee and the Lessor: a. Diligent exercise of reasonable skills and care in periormance of the agent's duties. b. A duty of honest and fair dealing and good faith. c. A duly to disclose all facts known to the agent materially affecting the value or desirability of the properly that are not known to, or within the diligent attention and observation of, the Parties. An agent is not obligated to reveal to either Party any confidential Information obtained from the other Party which does not Involve the affirmative duties set forth above. (ii) Lessee's Agent. An agent can agree to act as agent for the Lessee only. In these situations, the agent is not the Lessor's agent, even If by agreement the agent may receive compensation for services rendered, either in full or In part from the Lessor. An agent acting only for a Lessee has the following affirmative obligations. To the Lessee: A fiduciary duty of utmost care, integrity, honesty, and loyalty In dealings with the Lessee. To the Lessee and the Lessor: a. Diligent exercise of reasonable skills and care In perforrnance of the agent's duties. b. A duty of honest and fair dealing and good faith. c. A duty to disclose all facts known to the agent materially affecting the value or desirability of the property that are not known to, or within the diligent attention and observation of, the Parties. An agent Is not obligated to reveal to either Party any confidential information obtained from the other Party which does not involve the affirmative duties set forth above. (iii) Agent Representing Both Lessor and Lessee. A real estate agent, either acting directly or through one or more associate licenses, can legally be the agent of both the Lessor and the Lessee in a transaction, but only with the knowledge and consent of both the Lessor and the Lessee. In a dual agency situation, the agent has the following affirmative obligations to both the Lessor and the Lessee: a. A fiduciary duty of utmost care, integrity, honesty and loyalty in the dealings with either Lessor or the Lessee. b. Other duties to the Lessor and the Lessee as stated above In subparagraphs (I) or (il). In representing both Lessor and Lessee, the agent may not without the express permission of the respective Party, disclose to the other Party that the Lossor will accept rent In an amount less than that Indicated in the listing or that the Lessee Is willing to pay a higher rent than that offered. The above duties of the agent In a real estate transaction do not relieve a Lessor or Lessee from the responsibility to protect their own interests. Lessor arid Lessee should carefully read all agreements to assure that they adequately express their understanding of the transaction. A real estate agent is a person qualified to advise about real estate. If legal or tax advice Is desired, consult a competent professional. (h) Brokers have no responsibility with respect to any default or breach hereof by either Party. The Parties agree that no lawsuit or other legal proceeding involving any breach of duty, error or omission relating to this Lease may be brought against Broker more than ono year after the Start Date and that the liability (including court costs and attorneys' fens), of any Broker with respect to any such lawsuit and/or legal proceeding shall not exceed the fee received by such Broker pursuant to this Lease; provided, however, that the foregoing lirnitation on each Broker's liability shall not he applicable to any gross negligence or willful misconduct of such Broker. (c) Lessor and Lessee agree to identify to Brokers as "Confidential' any communication or information given Brokers that Is considered by such Party to be confidential. 26. No Right To Holdover. Lessee has no right to retain possession of the Premises or any part thereof beyond the expiration or termination of PAGE 13 OF 17 INITIALS INITIALS ©2001 - AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM SIG -15-4/12E this Lease. In the event that Lessee holds over, then the Base Rent shall be Increased to 150% of the Base Rent applicable immediately preceding the expiration or termination. Nothing contained herein shall be construed as consent by Lessor to any holding over by Lessee. 27. Cumulative Remedies. No remedy or election hereunder shall be deemed exclusive but shall, wherever possible, be cumulative with all other remedies at taw or in equity. 28. Covenants and Conditions; Construction of Agreement. Ail provisions of this Lease to be observed or performed by Lessee are both covenants and conditions. In construing this Lease, at headings and titles are for the convenience of the Parties only and shall not be considered a part of this Lease. Whenever required by the context, the singular shall Include the plural and vice versa. This Lease shall not be construed as If prepared by ono of the Parties, but rather according to its fair meaning as a whole, as if both Parties had prepared It. 29. Binding Effect; Choice of Law. Thls Lease shall be binding upon the Parties, their personal representatives, successors and assigns and be governed by the laws of the State In which the Premises are located. Any litigation between the Parties hereto concerning this Lease shall be Initiated in the county in which the Premises are located. 30. Subordination; Attornment; Non -Disturbance. 30.1 Subordination. Thls Lease and any Option granted hereby shall be subject and subordinate to any ground lease, mortgage, deed of trust, or other hypothecation or security device (collocavety, "Security Devlco"), now or hereafter placed upon the Premises, to any and all advances made on the security thereof, and to all renewals, modifications, and extensions thereof. Lessee agrees that the holders of any such Security Devices (in this Lease together referred to as "Lender') shall have no liability or obligation to perfo-m any of the obligations of Lessor under this Lease. Any Lender may elect to have thls Lease and/or any Option granted hereby superior to the Ilen of its Security Dovice by giving written notice thereof to Lessee, whoreupon this Lease and such Options shall be deemed prior to such Security Device, notwithstanding the relative dates of the documentation or recordation thereof. 30.2 Attornment. In the event that Lessor transfers title to the Premises. or the Premises are acquired by another upon the foreclosure or terminatlon of a Security Devise to which this Lease is subordinated (I) Lessee shall, subject to the non -disturbance provisions of Paragraph 30.3, attorn to such now owner, and upon request, enter Into a new lease, containing all of the terms and provisions of this Lease, with such new owner for the remainder of the term hereof, or, at the election of the new owner, this Lease will automatically become a new lease between Lessen and such now owner, and (11) Lessor shall thereafter be relieved of ary further obligations hereunder and such new owner shall assume all of Lessor's obligations, except that such new owner shall not: (a) be liable for any act or omission of any prior lessor or with respect to events occurring prior to acqulsitlon of ownership; (b) be subject to any offsets or defenses which Lessee might have against any prior lessor, (c) be bound by prepayment of more than one month's rent, or (d) be liable for (he return of any security deposit paid to any prior lessor which was not paid or credited to such new owner. 30.3 Non -Disturbance. With respect to Security Devices entered into by Lessor after the execution of this Lease, Lessee's subordination of thls Lease shall be subject to receiving a commercially reasonable non -disturbance agreement (a "Non -Disturbance Agreement") from the Lender which Non -Disturbance Agreement provides that Lessee's possession of the Premises, and this Lease, including any options to extend the term hereof, will not be disturbed so long as Lessee Is not In Breach hereof and atlorns to the record owner of the Premises. Further, within 60 days after the execution of this Lease, Lessor shall, if requested by Lessee, use its commercially reasonable efforts to obtain a Non -Disturbance Agreement from the holder of any pre-existing Security Device which is secured by the Premises. In the event that Lessor Is unable to prcvide the Non -Disturbance Agreement within said 60 days, then Lessee may, at Lessee's option, directly contact Lender and attempt to negotiate for the execution and delivery of a Non -Disturbance Agreement. 30.4 Self -Executing. The agreements contained In this Paragraph 30 shall be effective without the execution of any further documents; provided, however, that, upon written request from Lessor or a Lender In connection with a sale, financing or refinancing of the Promises, Lessee and Lessor shall execute such further writings as may be reasonably required to separately document any subordination, attornrnent and/or Non -Disturbance Agreement provided for herein. 31. Attorneys' Fees. If any Party or Broker brings an action or proceeding Involving the Premises whether founded In tort, contract or equity, or to declare rights hereunder, the Prevailing Party (as hereafter defined) In any such proceeding, action, or appeal thereon, shall be entitled to reasonable attorneys' fees. Sudh fees may he awarded In the same suit or recovered In a separate suit, whether or not such action or proceeding Is pursued to decision or judgment. The term, "Prevalling Party shall Include, without limitation, a Party or Broker who substantially ohtans or defeats the relief sought, os the case may be, whether by compromise, settlement. Judgment, or the abandonment by the other Party or Broker of Its claim or defense. Tho attorneys' fees award shall not be computed in accordance with any court fee schedule, but shall bo such as to fully reimburse all attorneys' fees reasonably Incurred. In addition, Lessor shall be entitled to attorneys' fees, costs and expenses Incurred In the preparation and service or notices of Default and consultations In connection therewith, whether or not a legal action Is subsequently commenced In connection with such Default or resulting Breach ($200 Is a reasonable mininmurn per occurrence for such services and consultation). 32. Lessors Access; Showing Premises; Repairs. Lessor and Lessor's agents shall have the right to enter the Premises of any time, in the case of an emergency, and othenvlse at reasonable times after reasonable prior notice for the purpose of showing the same to prospective purchasers, lenders, or tenants, and rnaking such alterations, repairs, improvements or additions to the Premises as Lessor may deem necessary or desirable and the erecting, using and maintaining of utilities, services, pipes and conduits through the Premises and/or other premises as long as there is no material adverse effect to Lessee's use of the Premises All such activities shall be without abatement of rent or liability to Lessee. 33. Auctions. Lessee shall not conduct, nor permit to be conducted, any auction upon the Premises without Lessor's prior written consent. Lessor shall not be obligated to exercise any standard of reasonableness In determining whether to permit an auction. 34. Signs. Lessor may place on ttie Premises ordinary "For Sale" signs al any limo and ordinary "For Lease" signs during the last 6 months of the term hereof. Except for ordinary "for sublease" signs, Lessee shall not place any sign upon the Premises without Lessor's prior written consent. All signs must comply with all Applicable Requirements. 35. Termination; Merger. Unless specifically stated otherwise In writing by Lessor, the voluntary or other surrender of this Lease by Lessee, tire mutual termination or cancellation hereof, or a termination hereof by Lessor for Breach by Lessee, shall automatically terminate any sublease or lessor estate in the Premises; provided, However, that Lessor may elect to continue any one or all existing sublenancles. Lessor's failure within 10 days following any such event to elect to the contrary by written notice to the holder of any such teaser interest, shall constitute Lessor's election to have such event constitute the termination of such interest. 36. Consents. Except as otherwise provided herein, wherever In this Lease the consent of a Party is required to an act by or for the other Party, such consent shall not be unreasonably withheld or delayed. Lessor's actual reasonable costs and expenses (including but not limited to architects', attorneys', engineers' and other consultants' fees) Incurred in the consideration of, or response to, a request by Lessee for any Lessor consent, Including but not limited to consents to an assignment, a subletting or the presence or use of a Hazardous Substance, shall be paid by Lessee upon receipt of an Invo.ce and supporting documentation Therefor. Lessor's consent to any act, assignment or subtetting shall not constitute an acknowledgment that no Default or Breach by Lessee of this Lease exists, nor shall such consent be deemed a waiver of any then existing Default or PAGE 14 OF 17 INITIALS INITIALS ©2001 - AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM STG-16.4112E Breach, except as may be otherwise specificalty stated in writing by Lessor et the (line of such consent. The fallure to specify herein any particular condition to Lessor's consent shall not preclude the imposition by Lessor at the time of consent of such further or other conditions as are then reasonable with reference to the particular matter for which consent is being given. In the event that either Party disagrees with any determination made by the other hereunder and reasonably requests the reasons for such determination, the determining party shall furnish Its reasons in writing and in reasonable detail within 10 business days following such request. 37. Guarantor, 37.1 Execution. The Guarantors, if any, shall each execute a guaranty In the form most recently published by the AIR Commercial Rear Estate Association. 37.2 Default. It shall constitute a Default of the Lessee If any Guarantor fails or refuses, upon request to provide: (a) evidence of the execuUon of the guaranty, including the authority of the party signing on Guarantor's behalf to obligate Guarantor, and in the case of a corporate Guarantor, a certified copy of a resolution of its board of directors authorizing the making of such guaranty, (b) current financial statements, (c) an Estoppel Certificate, or (d) written confirmation that the guaranty Is still In effect. 38. Quiet Possession. Subject to payment by Lessee of the Rent and performance of all of the covenants, conditions and provisions on Lessee's part to be observed and performed under thls Lease, Lessee shall have quiet possession and quiet enjoyment of the Premises during the term hereof. 39. Options. if Lessen Is granted an Option, es defined below, then the following provislons shall apply: 39.1 Definition. "Option" shall mean: (a) the right to extend or reduce the term of or renew this Lease or to extend or reduce the term of or renew any lease that Lessen has on other property of Lessor; (b) the right of first refusal or first offer to lease either the Premises or other property of Lessor: (0) the rig`tt to purchase, the right of first offer to purchase or the right of first refusal to purchase the Premises or other property of Lessor. 39.2 Options Personal To Original Lessee. Any Option granted to Lessee In this Lease Is personal to the original Lessee, and cannot be assigned or exorcised by anyone other than said orlginal Lessee and only while the original Lessee Is In full possession of the Premises and, if requested by Lessor, with Lessee certifying that Lessee has no Intention of [hereafter assigning or subletting. 39.3 Multiple Options. In the event that Lessee has any multiple Options to extend or renew this Lease, a later Option cannot be exercised unless the prior Options have been validly exercised. 39.4 Effect of Default on Options. ;a) Lessee shall have no right to exercise an Option: (1) during the period commencing with the giving of any notice of Default and continuing until said Default Is cured, (ii) during the period of time any Rent is unpaid (without regard to whether notice thereof is given Lessee), (111) during the time Lessee Is In Breach of this Lease, or (Iv) In the event that Lessee has boen given 3 or rnore notices of separate Default, whether or not the Defaults aro cured, during the 12 month period immediately preceding the exercise of the Option. (b) The period of time within which an Option may be exercised shall not be extended or enlarged by reason of Lessee's Inability to exercise an Option because of the provisions of Paragraph 39.4(a). (c) An Option shall terminate and be of no further force or effect, notwithstanding Lessee's duo and timely exercise of the Option, if, after such exercise and prior to the commencement of the extended tern or completion of the purchase, (I) Lessee fails to pay Rent for a period of 30 days after such Ren. becomes due (without any necessi:y of Lessor to give notice thereof), or (II) if Lessee commits a Breach of this Lease. 40. Multiple Buildings. If the Premises are a part of a group of buildings controlled by Lessor, Lessee agrees that It will abide by and conform to all reasonable rules and regulations which Lessor may make from time to time for the management, safety, and care of said properties. Including the care and cleanliness of the grounds and including tire parking, loading and unloading of vehicles, and to cause its employees, suppliers, shippers, customers, contractors end invitees to so abide and conform. Lessee also agrees to pay its fair share of common expenses Incurred in connection with such rules and regulations, 41. Security Measures. Lessee hereby acknowledges that the Rent payable to Lessor hereunder does not Include the cost of guard service or other security measures, and that Lessor shall have no obligation whatsoever to provide same. Lessee assumes all responsibility for the protection of the Premises, Lessee, its agents and Invitees and their property from the acts of third parties. 42. Reservations. Lessor reserves to Itself the right, from time to time, to grant, without the consent or Joinder of Lessee, such easements, rights and dedications that Lessor deems necessary, and to cause the recordation of parcel maps and restrictions, so Fong as such easements, rights, dedications, maps and restrictions do not unreasonably interfere with the use of the Premises by Lessee. Lessee agrees to 4ign any documents reasonably requested by Lessor to effectuate any such easement rights, dedication, map or restrictions. 43. Performance Under Protest. If at any time a dispute shall arise as to any amount or sum of money to be paid by one Party to the other under the provisions hereof, the Party against whom the obligation to pay the money Is asserted shall have the right to make payment "under protest" and such payment shall not be regarded as a voluntary payment and there shall survive the right on the part of said Party to institute suit for recovery of such sum. If it sha8 be adjudged that there was no legal obligation on the part of said Party to pay such sum or any part thereof, said Party shall be entitled to recover such sum or so much thereof as ft was not legally required to pay. A Party who does not Initiate suit for the recovery of sums paid "under protest" within 6 months shall be deemed to have waived its right to protest such payment. 44. Authority: Multiple Partlos; Execution, (a) if either Party hereto Is 3 corporation, trust, limited liability company, partnership, or similar entity, each Individual executing this Lease on behalf of such entity represents and warrants That he or she is duly authorized to execute and deliver this Lease on its behalf. Each Party shall, within 30 days after request, deliver to the other Party satisfactory evidence of such authority. (b) If this Lease is executed by more than one person or entity as "Lessee", each such person or entity shall be Jolntiy and severally liable hereunder. It Is agreed that any one of the named Lessees shall be empowered to execute any amendment to this Lease, or other document ancillary thereto and bind all of the named Lessees, and Lessor may rely on the same as if ail of the named Lessees had executed such document. (c) This Lease may be executed by the Parties In counterparts, each of which shall be deemed an original and all of which together shall constitute cne and the same Instrument. 45. Conflict. Any conflict between the printed provisions of this Lease and typewritten or handwritten provisions shall be controlled by the typewritten or handwritten provisions. 46. Offer. Preparation of this Lease by either Party or their agent and submission of same to the other Party shall not be deemed an offer to !ease to the other Party. Thls Lease Is not Intended to be binding until executed and delivered by all Parties hereto. 47. Amendments. This Lease may be modified only In writing, signed by the Parties In Interest at the time of the modification. As long as they do not materially change Lessee's obligations hereunder, Lessee agrees to make such reasonable non -monetary modifications to this Lease as may be reasonably required by a Lender In connection with the obtaining of normal financing or refinancing of the Premises. 48. Waiver of Jury Trial. THE PARTIES HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO TRIAL BY JURY IN ANY ACTION OR PAGE 15 OF 17 INITIALS INITIALS ©2001 -AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM STG-15-4112E PROCEEDING INVOLVING THE PROPERTY OR ARISING OUT OF THIS AGREEMENT. 49. Arbitration of Disputes. An Addendum requiring the Arbitration of disputes between the Parties and/or Brokers arising out of this Lease ❑ Is II Is not attached to this Lease. 50. Americans with Disabilities Act. Since compliance with the Americans with Disabilities Act (ADA) Is dependent upon Lessee's specific use of the Premises, Lessor makes no warranty or representation as to whether or not the Premises comply with ADA or any similar legislation. In the event that Lessee's use of the Premises requires modifications or additions to the Premises in order to be In ADA compliance, Lessee agrees to make any such necessary modifications and/or additions at Lessee's expense. LESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM AND PROVISION CONTAINED HEREIN, AND BY THE EXECUTION OF THIS LEASE SHOW THEIR INFORMED AND VOLUNTARY CONSENT THERETO. THE PARTIES HEREBY AGREE THAT, AT THE TIME THIS LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE COMMERCIALLY REASONABLE AND EFFECTUATE THE INTENT AND PURPOSE OF LESSOR AND LESSEE WITH RESPECT TO THE PREMISES. ATTENTION NO REPRESENTATION OR RECOMMENDATION IS MADE BY THE AIR COMMERCIAL REAL ESTATE ASSOCIATION OR BY ANY BROKER AS TO THE LEGAL SUFFICIENCY, LEGAL EFFECT, OR TAX CONSEQUENCES OF THIS LEASE OR THE TRANSACTION TO WHICH IT RELATES. THE PARTIES ARE URGED TO: 1. SEEK ADVICE OF COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS LEASE. 2. RETAIN APPROPRIATE CONSULTANTS TO REVIEW AND INVESTIGATE THE CONDITION OF THE PREMISES. SAID INVESTIGATION SHOULD INCLUDE BUT NOT BE LIMITED TO: THE POSSIBLE PRESENCE OF HAZARDOUS SUBSTANCES, THE ZONING OF THE PREMISES, THE STRUCTURAL INTEGRITY, THE CONDITION OF THE ROOF AND OPERATING SYSTEMS, AND THE SUITABILITY OF THE PREMISES FOR LESSEE'S INTENDED USE, WARNING IF THE PREMISES 13 LOCATED IN A STATE OTHER THAN CALIFORNIA, CERTAIN PROVISIONS OF THE LEASE MAY NEED TO BE REVISED TO COMPLY WITH THE LAWS OF THE STATE IN WHICH THE PREMISES IS LOCATED. The parties hereto have executed this Lease at the place and on the dates specified above their respective signatures. Executed at: Rainbow, California Executed at: Temecula, California On: June , 2012 On: June , 2012 By LESSOR: By LESSEE: Richard B. Gurrola and Valerie Gurrola, Temecula Marine Center, Inc. Trustees of the Gurrola Family Trust By: By: Name Printed: Richard B. Gurrola Name Printed: Michael J. Smith Title: Trustee Title: By: By: Name Printed: Valerie Gurrola Name Printed: Christine M. Smith Title: Trustee Address: 5590 Rainbow Creek Road Rainbow, CA 92028 Title: Address: Telephone: (760) 72.8-4339 Facsimile: ( ) Email: richgurrola@yahoo.com Email: Federal ID No. Telephone: ( ) Facsimile: ( ) Email: Email: Federal ID No. BROKER: BROKER: PAGE 16 OF 17 INITIALS INITIALS ©2001 - AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM SIG -15-4/12E Aft: Titre: Address: Att: Address: Telephone:( ) Telephone:( ) Facsimile:( ) FacsimIle:() Email: Email: Federal ID No. Federal ID No. Broker/Agent DRE Llcense #: Broker/Agent DRE License #: NOTICE: These forms are often modified to meet changing requirements of law and Industry needs. Always write or call to make sure you are utilizing the most current form: AIR Commerclal Real Estate Association, 800 W 8th Street, Suite 800, Los Angeles, CA 90017. Telephone No. (213) 687-8777. Fax No.: (213) 687-8616. © Copyright 2001 - By AIR Commerclal Real Estate Association. All rights reserved. No part of these works may be reproduced In any form without permission In writing. PAGE 17 OF 17 INITIALS INITIALS ©2001 - AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM STG-1 6-4112E ADDENDUM TO STANDARD INDUSTRIAL/COMMERCIAL MULTI -TENANT LEASE - GROSS DATED MAX 25, 2012 51. Notwithstanding anything to the contrary set forth above in paragraphs 4.3 and 11 above, Lessee shall not be required to pay for any utilities, services and/or association fees which have not been previously charged to, or paid for by, Lessee. 52. Early Termination Right: Lessee shall have the right to terminate this Lease upon thirty days written notice to Lessor, which notice may be given no sooner than October 2, 2012, or on the date that Lessor transfers title to the property to the City of Temecula, whichever first occurs." In the event of any conflict between the provisions of the Addendum and the Lease, the provisions of this Addendum shall control. Initials Exhibit "E" [Form of Sellers Estoppel Certificate] 11086-0166\1464915v1.doc , 2012 SELLER ESTOPPEL CERTIFICATE City of Temecula 41000 Main Street Post Office Box 1033 Temecula, California 92589-1033 Attention: Greg Butler, City Engineer/Director of Public Works Re: Purchase and Sale Agreement and Joint Escrow Instructions by and between Richard B. Gurrola & Valerie Gurrola, Trustees of the Gurrola Family Trust Under Declaration Dated Dec. 27, 2001, Robert A. Gurrola, Gary S. Gurrola, and Richard B. Gurrola II and the City of Temecula. To the City of Temecula, a municipal corporation: Richard B. Gurrola & Valerie Gurrola, Trustees of the Gurrola Family Trust Under Declaration Dated Dec. 27, 2001, Robert A. Gurrola, Gary S. Gurrola, and Richard B. Gurrola II (collectively "Record Owners") and the City of Temecula, a municipal corporation ("City") are parties to that certain Purchase and Sale Agreement and Joint Escrow Instructions dated and entered into as of , 2012 pursuant to which the City will purchase from Landlord that certain property located at 27495 Enterprise Circle West, in the City of Temecula, California and identified as Riverside County Tax Assessor's Parcel Number 921-480-013 (the "Property"). In connection with the City's acquisition of the Property pursuant to the Agreement, the Record Owners certify to the City of Temecula as follows: A. Except for the AIR Commercial Real Estate Association Standard Industrial Commercial Single -Tenant Lease -- Gross dated May 25, 2012 by and between Richard B. Gurrola and Valerie Gurrola, Trustees of the Gurrola Family Trust (collectively "Landlord") and Temecula Marine Center, Inc. ("Tenant"), there are no leases, licenses, occupancy, agreements or other agreements or arrangements, oral or written demising space in, providing for the use, possession, or occupancy of, or otherwise similarly affecting or relating to the Premises described on item 2 of Schedule A or the Property. The AIR Commercial Real Estate Association Standard Industrial Commercial Single -Tenant Lease -- Gross dated May 25, 2012 between Landlord and Tenant ("Lease"), which is identified on item 1 of Schedule A attached hereto and incorporated herein by this reference ("Schedule A"), is the only written instrument pertaining to the Lease. B. The Lease is in full force and effect and has not been modified, supplemented or amended as indicated on item 3 of Schedule A. C. There are no unresolved disputes between Landlord and Tenant, and based upon the actual knowledge of Landlord, Tenant is not in default under the Lease. -1- 11086-016611400481v2.doc except: D. Tenant does not claim any offsets or credits against rents payable under the Lease, E. Unless disclosed on item 4 of Schedule A, Tenant has not paid to Landlord a security or other deposit with respect to the Lease. F. Tenant has fully paid rent for the Premises through the month of May 2012, and the current base rent for the Premises under the Lease is $5,454 per month due on the 1st of each month. G. Tenant has not paid any monthly rentals in advance. H. The term of the Lease will terminate on the date indicated on item 6 of Schedule A. I. Except as shown on item 7 of Schedule A, Tenant has no right of first refusal or option to purchase the Property, or any part thereof, or to lease space in addition to the Premises demised under the Lease, or to extend the term of the Lease. J. There are no written or verbal agreements between Tenant and Landlord that would require Landlord to compensate Tenant at the termination of the Lease for any leasehold improvements made by Tenant to the Premises or the Property. Under the Lease, the Landlord is entitled to any and all compensation for any leasehold improvements, including any improvements identified by the Lease as Alterations and Utility Installations made by Tenant to the Premises or the Property. The undersigned Record Owners acknowledge and agree that the City will be relying on this certificate in connection with the City's acquisition of the Property. The matters set forth above are true and correct as of the above date of this certificate. Record Owners: Richard B. Gurrola & Valerie Gurrola, Trustees of the Gurrola Family Trust Under Declaration Dated Dec. 27, 2001, Robert A. Gurrola, Gary S. Gurrola, and Richard B. Gurrola Ii By: By: Richard B. Gurrola, Trustee Robert A. Gurrola By: By: Valerie Gurrola, Trustee Gary S. Gurrola By: Richard B. Gurrola II -2- 11086-0166\ 1400477v2.doc SCHEDULE A to Seller Estoppel Certificate 1. AIR Commercial Real Estate Association Standard Industrial Commercial Single -Tenant Lease -- Gross dated May 25, 2012 by and between Richard B. Gurrola and Valerie Gurrola, Trustees of the Gurrola Family Trust and Temecula Marine Center, Inc. Tenant Temecula Marine (DID) or (DID NOT) execute the Lease. Landlord (DID) or (DID NOT) execute the Lease. 2. The Lease consists of only the following document, a true and correct copy of which is attached as Exhibit "1" hereto: AIR Commercial Real Estate Association Standard Industrial Commercial Single -Tenant Lease -- Gross dated May 25, 2012 by and between Richard B. Gurrola and Valerie Gurrola, Trustees of the Gurrola Family Trust and Temecula Marine Center, Inc. The above Lease is the only written instrument pertaining to Tenant's leasehold interest in the Premises, and no other written instrument exists between Sellers and Tenant regarding the Lease. Landlord: Richard B. Gurrola & Valerie Gurrola, Trustees of the Gurrola Family Trust Under Declaration Dated Dec. 27, 2001 Tenant: Temecula Marine Center, Inc. Premises: 6,818 square feet of the 9,916 square foot industrial building, including 12 unreserved parking spaces on the real property commonly known as 27495 Enterprise Circle West, Temecula, California, and identified as Assessor's Parcel Number 921-480-013 ("Property") 3. Modifications and/or Amendments of Lease a. None 4. Rent for Premises a. Original Base Rent: Tenant commenced paying the original $5,454 base monthly rent on October 1, 2011 due the first of each month. b. Current Monthly Rent: $5,454 per month due the first of each month. c. Rent Increase: Base Rent shall increase to $5,618 effective October 1, 2012 5. Security Deposit: $0.00 -3- 11086-016611400477v2.doc 6. Term of Lease: a. Commencement Date: October 1, 2011 b. Termination Date: September 30, 2013 7. Right of First Refusal or Option: a. To Lease (describe): None. b. To Purchase (describe): None. c. To Extend Original Term (describe): None. 8. Tenant Improvements: There are no written or verbal agreements between Tenant and Landlord that would require Landlord to compensate Tenant at the termination of the Lease for any leasehold improvements made by Tenant to the Premises or the Property. Under the Lease, the Landlord is entitled to any and all compensation for any leasehold improvements, including any improvements identified by the Lease as Alterations and Utility Installations made by Tenant to the Premises or the Property. -4- 11086-016611400477v2.doc AIR (IL'.nwn. NiA1( Aqfl•wlf �.w.,a,.a AIR COMMERCIAL REAL ESTATE ASSOCIATION STANDARD INDUSTRIAL/COMMERCIAL SINGLE -TENANT LEASE -- GROSS (DO NOT USE THIS FORM FOR MULTI -TENANT BUILDINGS) 1. Basic Provisions ("Basic Provisions"). 1.1 Parties: This Lease ("Lease"), dated for reference purposes only May 25, 2012 Is made by and between Richard B. Gurrola and Valerie Gurrola, Trustees of the Gurrola Family ("Lessor") Trust and Temecula Marine Center, Inc. ("Lessee"), (collectively the "Parties," or individually a "Party"). 1.2 Premises: That certain real property, including all improvements therein or to be provided by Lessor under the terms of this Lease, and commonly known as 27495 Enterprise Circle West, Tcmecu]_a Located in the County of Riverside , State of California , and generally described es (describe briefly the nature of the property and, if applicabie, the "Protect", If the property Is located within a Project) 6,818 square feet of a 9,916 square foot industrial building, including 12 unreserved parking spaces. 'Lessee acknowledges that all existing improvements, including "Lessee Owned Alter.at.ions" belong to the Lessor on the Commencement Date. ("Premises"). (See also Paragraph 2) 1.3 Term: Two years and no months ("Original Term") commencing October 1, 2011 ("Commencement Date") and ending September 30, 2013 ("Expiration Date"). (See also Paragraph 3) 1,4 Early Possession: If the Premises are available Lessee may have non-exclusive possession of the Premises commencing Lessee is already in possession ("Early Possession Date"). (See also Paragraphs 3.2 and 3.3) 1.5 Base Rent: 55, 454.00 per month ("Base Rent"), payable on the first day of each month commencing June, 2012 . (See also Paragraph 4) Cif If this box is checked, there are provisions in this Lease for the Base Rent to be adjusted. See Paragraph 1.6 1.6 Base Rent and Other Montes Paid Upon Execution: (a) Base Rent: $5, 454.00 for the period June, 2012. The Base Rent shall increase to $5,618 effective October 1, 2012 (b) Security Deposit: $-0- ("Security Deposit"). (See also Paragraph 5) (c) Association Fees: $ for the period (d) Other: $ for (e) Total Due Upon Execution of this Lease: 55, 454. 00 1.7 Agreed Use: Boat repair, sales and service (See also Paragraph 6) 1.8 Insuring Party: Lessor Is the "Insuring Party". The annual "Base Premium" is $ (See also Paragraph 8) 1.9 Real Estate Brokers: (See also Paragraph 15 and 25) (a) Representation: The following real estate brokers (the "Brokers") and brokerage relationships exist in this transaction (check applicable boxes): 0 not applicable represents Lessor exclusively ("Lessor's Broker"); 0 not applicable represents Lessee exclusively ("Lessee's Broker"); or PAGE 1 OF 17 INITIALS ©2001 - AiR COMMERCIAL REAL ESTATE ASSOCIATION EXHIBIT "1" INITIALS FORM STG-16-4112E ❑ not applicable represents both Lessor and Lessee ("Dual Agency"). (b) Payment to Brokers: Upon execution and delivery of this Lease by both Parties, Lessor shall pay to the Brokers for the brokerage services rendered by the Brokers the fee agreed to In the attached separate written agreement or tt no such agreement Is attached, the sum of —0-- or % of the total Base Rent payable for the Original Term, the sum of or of the total Base Rent payable during any period of time that the Lessee occupies the Premises subsequent to the Origfnal Term, and/or the sum of or % of the purchase price in the event that the Lessee or anyone affiliated with Lessee acquires from Lessor any rights to the Premises. 1.10 Guarantor. The obligations of the Lessee under thls Lease are to be guaranteed by ("Guarantor"). (See also Paragraph 37) 1.11 Attachments. Attached hereto are the following, all of which constitute a part of this Lease: ❑ an Addendum consisting of Paragraphs through ❑ a plot plan depicting the Premises; ❑ a current set of the Rules and Regulations; ❑ a Work Letter; ❑ other (specify): 2. Premises. 2,1 Letting. Lessor hereby leases to Lessee, and Lessee hereby leases from Lessor, the Premises, for the term, at the rental, ard upon off of the terms, covenants and conditions set forth in this Lease, While the approximate square footage of the Prernises may have been used In the marketing of the Premises for purposes of compar-son, the Base Rent stated herein Is NOT lied to square footage and is not subject to adjustment should the actual size be determined to be different. Note: Lessee Is advised to verify the actual size prior to executing this Lease. 2.2 Condition. Lessor shall deliver the Premises to Lessee broom clean and free of debris on the Commencement Date or the Early Possession Dale, whichever first occurs ("Start Date"), and, so long as the required service contracts described in Paragraph 7.1(b) below are obtained by Lessee and in effect within thirty days following the Start Date, warrants that the existing electrical, plumbing, fire sprinkler, lighting, heating, ventilating and air conditioning systems ("HVAC"), loading doors, sump pumps, If any, and all other such elements in the Premises, other than those constructed by Lessen, shall be in good operating condition on said date and that the surface and structural elements of the roof, bearing walls and foundation of any buildings on (he Premises (the "Building") shall be free of material defects, and that the Unit does not contain hazardous levels of any mold or fungi defined as toxic under applicable state or federal law. If a non-compliance with said warranty exists as of the Start Date, or If one of such systems or elements should malfunction or fail within the appropriate warranty period, Lessor shall, as Lessor's sole obligation with respect to such matter, except as otherwise provided In this Lease, promptly after recelpt of written notice from Lessee setting forth with specificity the nature and extent of such non-compllance, malfunction or failure, rectify same at Lessor's expense. The warranty periods shall be as follows: (I) 6 months as to ttie HVAC systems, and (ti) 30 days as to the remaining systems and other elements of the Building. If Lessee does not give Lessor (he required notice within the appropriate warranty period, correction of any such non-compliance, malfunction or failure shall be the obligation of Lessee at Lessee's sole cost and expense, except for the roof, foundations, and bearing walls which are handled as provided in paragraph 7. 2.3 Compliance. Lessor warrants that to the best of its knowledge the Improvements on the Premises comply with the building codes, applicable laws, covenants or restrictions of record, regulations, and ordinances ("Applicable Requirements") that were in effect at the time that each improvement, or pc [lion thereof, was constructed. Saki warranty does not apply to the use to which Lessee will put the Premises, modifications which may be required by the Americans with Disabilities Act or any similar laws as a result of Lessee's use (sea Paragraph 50), or to any Alterations or Utility Installations (as defined In Paragraph 7.3(a)) made or to be made by Lessee. NOTE: Lessee Is responsible for determining whether or not the Applicable Requirements, and especially the zoning, are approprtato for Lessee's Intended use, and acknowledges that past uses of the Promises may no longer be allowed. If the Premises do not comply with said warranty, Lessor shall, except as otherwise provided, promptly after receipt of written notice from Lessee setting forth with specificity the nature and extent of such non-compliance, rectify the same at Lessor's expense. If Lessee does not glve Lessor written notice of a non-compliance with this warranty within 6 months following the Start Date, correction of that non-compliance shall be the obligation of Lessee at Lessee's sole cost and expense. If the Applicable Requirements are hereafter changed so as to require during the term of this Lease the construction of an addition to or art alteration of the Premises and/or Building, the remediation of any Hazardous Substance, or the reinforcement or other physical modification of the Unit, Premises and/or Building ("Capital Expenditure"), Lessor and Lessee shall allocate the cost of such work as follows: (a) Subject to Paragraph 2.3(c) below, If such Capital Expenditures are required as a result of the specific and unique use of the Premises by Lessee as compared with uses by tenants in general, Lessee shall be fully responsible for the cost thereof, provided, however that if such Capital Expenditure Is required during the last 2 years of this Lease and the cost thereof exceeds 6 months' Base Rent, Lessee may Instead terminate this Lease unless Lessor notifies Lessee, In writing, within 10 days after receipt of Lessee's termination notice that Lessor has elected to pay the difference between the actual cost thereof and an amount equal to 6 months' Base Rent. If Lessee elects termination, Lessee shall immediately cease the use of the Premises which requires such Capital Expenditure and deliver to Lessor written notice specifying a termination date at least 90 days thereafter. Such termination date shall, however, in no event be earlier than the last day that Lessee could legally utilize the Premises without commencing such Capital Expenditure. (b) If such Capital Expenditure Is not the result of the specific and unique use of the Premises by Lessee (such as, governmentally mandated seismic modifications), then Lessor shall pay for such Capital Expenditure and Lessee shall only be obligated to pay, each month during the remainder of the term of this Lease or any extension thereof, on the date that on which the Base Rent is due, an amount equal to 1/144th of the portion of such costs reasonably attributable to the Premises. Lessee shall pay Interest on the balance but may prepay its obligation at any time. If, however, such Capital Expenditure Is required during the last 2 years of this Lease or if Lessor reasonably determines that it is not economically feasible to pay its share thereof, Lessor shall have the option to terminate this Lease upon 90 days prior written notice to Lessee unless Lessee notifies Lessor, in writing, within 10 days after receipt of Lessor's termination notice that Lessee will pay for such Capital Expenditure. If Lessor does not elect to terminate, and falls to tender its share of any such Capital Expenditure, Lessee may advance such funds and deduct same, with interest, from Rent PAGE 2 OF 17 INITIALS INITIALS ©2001 - AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM STG-15-4112E until Lessor's share of such costs have been fully paid. If Lessee Is unable to finance Lessor's share, or if the balance of the Rent due and payable for the remainder of this Lease Is not sufficient to fully reimburse Lessee on an offset basis, Lessee shall have the right to terminate this Lease upon 30 days written notice to Lessor. (c) Notwithstanding the above, the provisions concerning Capital Expenditures are Intended to apply only to non -voluntary, unexpected, and new Applicable Requirements. If the Capital Expenditures are instead triggered by Lessee as a result of an actual or proposed change In use, change in intensity of use, or modification to the Premises then, and In that event, Lessee shall wither: (I) immediately cease such changed use or intensity of use and/or take such other steps as may be necessary to eliminate the requirement for such Capital Expenditure, or (ii) complete such Capital Expenditure at its own expense Lessee shall not, however, have any right to terminate this Lease. 2.4 Acknowledgements. Lessee acknowledges that: (a) it has been given an opportunity to inspect and measure the Premises, (b) It has been advised by Lessor and/or Brokers to satisfy itself with respect to the size and condition of the Premises (including but not limited to the electrical, HVAC and fire sprinkler systems, security, environmental aspects, and compliance with Applicable Requirements arid the Americans with Disabilities Act), and their suitability for Lessee's Intended use, (c) Lessee has made such Investigation as it deems necessary with reference to such matters and assumes ail responsibility therefor as the same relate to Its occupancy of the Premises, (d) it Is not relying on any representation as to the size of the Premises made by Brokers or Lessor, (e) the square footage of the Premises was not materfai to Lessee's decision to lease the Premises and pay the Rent stated herein, and (f) neither Lessor, Lessor's agents, nor Brokers have made any oral or written representations or warranties with respect to said matters other than as set forth in lets Lease. In addition, Lessor acknowledges that: (i) Brokers have made no representations, promises or warranties concerning Lessee's ability to honor the Lease or suitability to occupy the Premises, and (11) it is Lessor's sole responsibility to Investigate the financial capability and/or suitability of all proposed tenants. 2.5 Lessee as Prior Owner/Occupant. The warrantees rnade by Lessor In Paragraph 2 shall be of no force cr effect if Immediately prior to the Start Date Lessee was the owner or occupant of the Premises. In such event, Lessee shall be responsible for any necessary corrective work. 3. Term. 3.1 Term. The Commencement Date, Expiration Date and Original Term of this Lease are as specified In Paragraph 1.3. 3.2 Early Possession. Any provision herein granting Lessee Early Possession of the Premises Is subject to and conditioned upon the Premises being available for such possession prior to the Commencement Date. Any grant of Early Possession only conveys a non-exclusive right to occupy the Promises. If Lessee totally or partially occupies the Premises prior to the Commencement Date, the obligation to pay Base Rent shall be abated for the period of such Early Possession. All other terms of this Lease (including but not limited to the obligations to pay Real Property Taxes and insurance premiums and to maintain the Premises) shall be in effect during such period. Any such Early Possession shall not affect the Expiration Date. 3.3 Delay In Possession. Lessor agrees to use its bast commercially reasonable efforts to deliver possession of the Promises to Lessee by the Commencement Date. If, despite said efforts, Lessor Is unable to deliver possession by such date, Lessor shall not he subject to any liability therefor, nor shall such failure affect the validity of this Lease or change the Expiration Date. Lessee shall not, however, bo obligated to pay Rent or perform Its other obligations until Lessor delivers possession of the Premises and any period of rent abatement that Lessee would otherwise have enjoyed shall run from the date of delivery of possession and continue For a period equal to what Lessee would otherwise have enjoyed under the terms hereof, but minus any days of decay caused by the acts or omtssions of Lessee. IF possession Is not delivered within 60 days after the Commencement Date, as the same may be extended under the terrns of any Work Letter executed by Parties, Lessee may, at Its option, by notice in writing within 10 days after the end of such 60 day period, cancel this Lease, In which event the Parties shall be discharged from all obligations hereunder. If such written notice Is not received by Lessor within said 10 day period, Lessee's right to cancel shall terminate. If possession of the Premises is not delivered within 120 days after the Commencement Date, this Lease shall terminate unless other agreements are reached between Lessor and Lessee, In writing. 3.4 Lessee Compliance. Lessor shall not be required to deliver possession of the Premises to Lessee until Lessee complies with Its obligation to provide evidence of insurance (Paragraph 8.5). Pending delivery of such evidence, Lessee shall be required to perform all of its obligations under this Lease from and after the Start Date, including the payment of Rent, notwithstanding Lessor's election to withhold possession pending receipt of such evidence of insurance. Further, if Lessee Is required to perform any other condillons prior to or concurrent with the Start Date, the Start Date shall occur but Lessor may elect to withhold possession until such conditions are satisfied. 4. Rent. 4.1. Rent Defined. Ali monetary obligations of Lessee to Lessor under the terms of this Lease (except for the Security Deposit) are deemed to be rent ("Rent"). 4.2 Payment. . Lessee shall cause payment of Rent to be received by Lessor in lawful money of the United States, without offset or deduction (except as specifically permitted in this Lease), on or before the day on which it Is due. All monetary amounts shall be rounded to the nearest whole dollar. to the event that any invoice prepared by Lessor is inaccurate such Inaccuracy shall not constitute a waiver and Lessee shall be obligated to pay the amount set forth in This Lease. Rent for any period during the term hereof which Is for less than one full calendar rnonlh shall be prorated based upon the actual number of days of said month. Payment of Rent shall be made to Lessor at its address stated herein or to such other persons or place as Lessor may from tlrne to time designate In writing. Acceptance of a payment which is less than the amount then due shall not be a waiver of Lessor's rights to the balance of such Rent, regardloss of Lessor's endorsement of any check so stating. In tho event that any check, draft, or other instrument of payment given by Lessee to Lessor Is dishonored for any reason, Lessee agrees to pay to Lessor the sum of $25 in addition to any Late Charge and Lessor, at its option, may require all future payments to be made by Lessee to be by cashier's check. Payments will be applied first to accrued late charges and attorneys fees, second to accrued Interest, then to Base Rent, Insurance and Real Property Taxes, and any remaining amount to any other outstanding charges or costs. 4.3 Association Fees. In addition to the Base Rent, Lessee shall pay to Lessor each month an amount equal to any owner's association or condominium fees levied or assessed against the Premises. Said monies shall be paid at the same tlme and in the same manner as the Base Rent. 5. Security Deposit. Lessee shall deposit with Lessor upon execution hereof the Security Deposit as security for Lessee's faithful performance of Its obligations under this Lease. If Lessee fails to pay Rent, or otherwise Defaults under this Lease, Lessor may use, apply or retain all or any portion of said Security Deposit for the payment of any amount already due Lessor, for Rents which will be due In the future, and/ or to reimburse or compensate Lessor for any liability, expense, loss or damage which Lessor may suffer or Incur by reason thereof. If Lessor uses or applies all or any porifon of the Security Deposit, Lessee shall within 10 days after written request therefor deposit monies with Lessor sufficient to restore said Security Deposit to the full amount required by this Lease. If :tie Base Rent Increases during the term of this Lease, Lessee shall, upon written request from I.essor, deposit additional montes with Lessor so that the total amount of the Security Deposit shall at all times bear the same proportion to the increased Base Rent as the initial Security Deposit bore to the initial Base Rent. Should the Agreed Use be amended to accommodate a material change In the business of Lessee or to accommodate a sublessee or assignee, Lessor shall have the right to increase the Security Deposit to the PAGE 3 OF 17 INITIALS INITIALS ©2001 - AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM STG-15-4112E extent necessary, In Lessor's reasonable judgment, to account for any Increased wear and tear that the Premises may suffer as a result thereof. If a change In control of Lessee occurs during this Lease and following such change the financial condition of Lessee is. In Lessor's reasonable Judgment, significantly reduced, Lessee shall deposit such additional monies with Lessor as shall be sufficient to cause the Security Deposit to be at a cornmerclally reasonable level based on such change in financial condition. Lessor shall not be required to keep the Security Deposit separate from its general accounts. Within 90 days ager the expiration or termination of this Lease, Lessor shall return that portion of the Security Deposit not used or applied by Lessor. No part of the Security Deposit shall be considered to be held in trust, to hear Interest or to be prepayment for any monies to be paid by Lessee under this Lease. 6. Use. 6.1 Use. Lessee shall use and occupy the Premises only for the Agreed Use, or any other legal use which Is reasonably comparable thereto, and for no other purpose, Lessee shall not use or permit the use of the Premises in a manner that Is unlawful, creates damage, waste or a nuisance, or that disturbs occupants of or causes damage to neighboring premises or properties. Other than guide, signal and seeing eye dogs, Lessee shall not keep or allow In the Premises any pets, animals, birds, fish, or reptiles. Lessor shall not unreasonably withhold or delay its consent to any written request for a modification of the Agreed Use, so long as the same will not impair the structural integrity of the improvements on the Premises or the mechanical or electrical systems therein, and/or Is not significantly more burdensotne to the Premises. If Lessor elects to withhold consent, Lessor shall within 7 days after such request give written notification of same, which notice shall include an explanation of Lessor's objections to the change in the Agreed Use. 6.2 Hazardous Substances. (a) Reportable Uses Require Consent. The term "Hazardous Substance" as used In this Lease shall mean any product, substance, or waste whose presence, use, manufacture, disposal, transportation, or release, either by itself or in combination with other materials expected to he an the Premises, Is either: (I) potenttalfy injurious to the public health, safety or welfare, the environment or the Premises, (11) regulated or monitored by any governmental authority, or (ill) a bests for potential liability of Lessor to any governmental agency or third party under any applicable statute or common law theory. Hazardous Substancea shall Include, but not be limited to, hydrocarbons, petroleum, gasoline, and/or crude oil or any products, by-products or fractions thereof. Lessee shall not engage In any activity In or on the Premises which constitutes a Reportable Use of Hazardous Substances without the express prior written consent of Lessor and timely compliance (at Lessee's expense) with all Applicable Requirements. "Reportable Use" shall mean (I) the Installation or use of any above or below ground storage tank, (ii) the generation, possession, storage, use, transportation, or disposal of a Hazardous Substance that requires a permit from, or with respect to which a report, notice, registration or business plan Is required to he filed with, any governmental authority, and/or (ill) the presence at the Premises of a Hazardous Substance with respect to which any Applicable Requirements requires that a notice be given to persons entering or occupying tho Premises or neighboring properties. Notwithstanding the foregoing, Lessee may use any ordinary and customary materials ,easonably required to be used in the normal course of the Agreed Use, ordinary office supplies (copier toner, liquid paper, glue, etc.) and common household cleaning materials, so long as such use is In compliance with all Applicable Requirements, Is not a Reportable Use, and does not expose the Premises or neighboring property to any meaningful risk of contamination or damage or expose Lessor to any liability therefor. In addition, Lessor may condition its consent to any Reportable Use upon receiving such additional assurances as Lessor reasonably deems necessary to protect Itself, the public, the Premises and/or the environment against damage, contamination, injury and/or liability, including, but not limited to, the installation (and removal on or before Lease expiration or termination) of protective modifications (such as concrete encasemeres) and/or increasing tine Security Deposit. (b) Duty to Inform Lessor. If Lessee knows, or has reasonable cause to believe, that a Hazardous Substance has come to be located in, on, under or about the Premises, other than as previously consented to by Lessor, Lessee shall immediately give written notice of such fact to Lessor, and provide Lessor with a copy of any report, notice, claire or other documentation which it has concerning the presence of such Hazardous Substance. (c) Lessee Rernedtallon. Lessee shall not cause or permit any Hazardous Substance to be spilled or released in, on, under, or about the Premises (Including through the plumbing or sanitary sewer system) and shall promptly, at Lessee's expense, ccmpty with all Applicable Requirements and take all investigatory and/or remedial action reasonably recommended, whether or not formally ordered or required, for the cleanup of any contamination or, and for the maintenance, security and/or monitoring of the Premises or neighboring properties, that was caused or materially contributed to by Lessee, or pertaining to or involving any Hazardous Substance brought onto the Premises during the term of this Lease, by or for Lessee, or any third party. (d) Lessee Indemnification. Lessee shall indemnify, defend and hold Lessor, its agents, employees, lenders and ground lessor, if any, harmless from and against any and all loss of rents and/or damages, liabilities, judgments, claims, expenses, penalties, and attorneys' and consultants' fees arising out of or Involving any Hazardous Substance brought onto the Premises by or for Lessee, or any third party (provided, however, that Lessee shall have no liability under this Lease with respect to underground migration of any Hazardous Substance under the Premises from adjacent properties not caused or contributed to by Lessee). Lessee's obligations shall Include, but not be limited to, the effects of any contamination or Injury to person, property or the environment created or suffered by Lessee, and the cost of Investigation, removal, remediation, restoration and/or abatement, and shall survive the expiration or termination of this Lease. No termination, cancellation or release agreement entered into by Lessor and Lessee shall release Lessee from its obligations under this Loase with respect to Hazardous Substances, unless specifically so agreed by Lessor in writing at the time of such agreement. (e) Lessor Indemnification. Lessor and its successors and assigns shall Indemnify, defend, reimburse and hold Lessee, its employees and lenders, harmless from and against any and all environmental damages, Including the cost of remediation, which result from Hazardous Substances which existed on the Premises prior to Lessee's occupancy or which are caused by the gross negligence or willful misconduct of Lessor, Its agents or employees. Lessor's obligatloes, as and when required by the Applicable Requirements, shall include, but not be limited to, the cost of investigation, removal, remediation, restoralton and/or abatement, and shall survive the expiration or termination of this Lease, (f) Investigations and Remedlatlons. Lessor shall retain the responsibility and pay for any Investigations or remedlatton measures required by governmental entities having jurisdiction with respect to the existence of Hazardous Substances on the Premises prior to Lessee's occupancy, unless such remediation measure is required as a result of Lessee's trse (including "Alterations", as defined In paragraph 7.3(a) below) of the Premises, in which event Lessee shall be responsible for such payment. Lessee shall cooperate fully In any such activities at the request of Lessor, Including allowing Lessor and Lessor's agents to have reasonable access to the Premises at reasonable times In order to carry out Lessor's investigative and remedial responsibilities, (g) Lessor Termination Option. If a Hazardous Substance Condition (see Paragraph 9.1(0)) occurs during the term of this Lease, unless Lesson Is legally responsible therefor (in which case Lessee shall make the investigation and remediation thereof required by the Applicable Requirements and this Lease shall continue In full force and effect, but subject to Lessor's rights under Paragraph 6.2(d) and Paragraph 13), Lessor may, at Lessor's option, either (i) Investigate and remediate such Hazardous Substance Condition, if required, as soon as reasonably possible at Lessor's expense, In which event this Lease shall continue In full force and effect, or (ii) if the estimated cost to remediate such condition exceeds 12 Itmes the then monthly Base Rent or $100,000, whichever is greater, give written notice to Lessee, within 30 days after receipt by Lessor of knowledge PAGE 4 OF 17 INITIALS @2001 - AIR COMMERCIAL REAL ESTATE ASSOCIATION INITIALS FORM STG-15-4112E of the occurrence of such Hazardous Substance Condition, of Lessor's desire to terminate this Lease as of the date 60 days following the date of such notice. In the event Lessor elects to give a termination notice, Lessee may, within 10 days thereafter, give written notice to Lessor of Lessee's commitment to pay the amount by which the cost of the remedlation of such Hazardous Substance Condition exceeds an amount equal to 12 times the then monthly Base Rent or S100,000, whichever Is greater. Lessee shall provide Lessor with said funds or satisfactory asserance thereof within 30 days following such commitment. In such event, this Lease shall continue in full force and effect, and Lessor shall proceed to make such remedlation as soon as reasonably possible after the required funds are available, If Lessee does not give such notice and provide the required funds or assurance thereof within the time provided, this Lease shall terminate as of the date specified in Lessor's notice of termination. 6.3 Lessee's Compliance with Applizable Requirements. Except as otherwise provided In This Lease, Lessee shall, at Lessee's sole expense, fully. diligently and In a timely manner, materially comply with all Applicable Requirements, the requirements of any applicable fire Insurance underwriter or rating bureau, and the recommendations of Lessor's engineers and/or consultants which relate in any manner to the such Requirements, without regard to whether such Requirements are now in effector become effective after the Start Date. Lessen shall, within 10 days after receipt of Lessor's written request, provide Lessor with copies of all permits and other documents, and other information evidencing Lessee's compliance with any Applicable Requirements specified by Lessor, and shall Immed(atety upon receipt, notify Lessor In writing (with copies of any documents Involved) of any threatened or actual claim, notice, citation, warning, complaint or report. pertaining to or involving tha failure of Lessen or the Premises to comply with any Applicable Requirements. Likewise, Lessee shall immediately give written notice to Lessor of: (i) any water damage to the Premises and any suspected seepage, pooling, dampness or other condition conducive to the production of mold; or (i1) any mustiness or other odors that might indicate the presence of mold In the Premises. 6.4 Inspection; Compliance. Lessor and Lessor's "Lender" (as defined in Paragraph 30) and consultants shall have the right to enter into Premises at any time, In the case of an emergency, and otherwise at reasonable times after reasonable notice, for the purpose of inspecting the condition of the Premises and for verifying compliance by Lessee with this Lease. The cost of any such Inspections shall be paid by Lessor, unless a violation of Applicable Requirements, or a Hazardous Substance Condition (see paragraph 9.1) is found to exist or be Imminent, or the inspection Is requested or ordered by a governmental authority. In such case, Lessee shall upon request reimburse Lessor for the cost of such inspection, so long as such inspection Is reasonably related to the violation or contamination. In addition, Lessee shall provide copies of all relevant material safety data sheets (MSDS) to Lessor within 10 days of the receipt of a written request therefor. 7. Maintenance; Repairs; Utility installations; Trade Fixtures and Alterations. 7.1 Lessee's Obligations. (a) In General, Subject to the provisions of Paragraph 2.2 (Condition), 2.3 (Compliance), 6.3 (Lessee's Compliance with Applicable Requirements), 7.2 (Lessor's Obligations), 9 (Damage or Destruction), and 14 (Condemnation), Lessee shall, at Lessee's sole expense, keep the Premises, Utility Irstallations (intended for Lessee's exclusive use, no matter where located), and Alterations In good order, condition and repair (whether or not the portion of the Premises requiring repairs, or the means of repairing the same, are reasonably or readily accessible to Lessee, and whether or not the need for such repairs occurs as a result of Lessee's use, any prior use, the elements or the age of such portion of the Premises), Including, but not limited to, all equipment or facilities, such as plumbing, HVAC equipment, electrical, lighting facilities, balers, pressure vessels, fire protection system, fixtures, walls (intortor and exterior), ceilings, floors, windows, doors, plate glass, skylights, landscaping, driveways, parking tots, fences, retaining walls, signs, sidewalks and parkways located In, on, or adjacent to the Premises. Lessee is also responsible for keeping the roof and roof drainage clean and free of debris. Lessor shall keep the surface and structural elements of the roof, foundations, and bearing walls in good repair (see paragraph 7.2). Lessee, In keeping the Premises In good order, condition and repair, shall exercise and perform good maintenance practices, specifically Including the procurement and maintenance of the servtce contracts required by Paragraph 7.1(b) below. Lessee's obligations shall include restorations, replacements or renewals when necessary to keep the Premises and all Improvements thereon or a part thereof In good order, condition and state of repair. Lessee shall, during the term of this Lease, keep the exterior appearance of the Building In a first-class condition (including, e.g. graffiti removal) consistent with the exterior appearance of other similar facilities of comparable age and size in the vicinity, including, when necessary, the exterior repainting of the Building. (b) Service Contracts. Lessee shall, at Lessee's sole expense, procure and maintain contracts, with coples to Lessor, In customary form and substance for, and with contractors specializing and experienced in the maintenance of the following equipment and improvements, If any, if and when Installed on the Premises: (i) elVAC equipment, (11) boiler, and pressure vessels, (ill) fire extinguishing systems, including fire atarrn and/or smoke detection, (Iv) landscaping and Irrigation systems, and (v) clarifiers. However, Lessor reserves the right, upon notice to Lessee, to procure and maintain any or all of such service contracts, and Lessee shall reimburse Lessor, upon demand, for the cost thereof. (c) Failure to Perform. If Lessee falls to perform Lessee's obligations under this Paragraph 7.1, Lessor may enter upon the Premises after 10 days' prior written notice to Lessee (except in the case of an emergency, in which case no notice shall be required), perform such obligations on Lessee's behalf, and put the Premises In good order, condition and repair, and Lessee shall promptly pay to Lessor a sum equal to 115% of the cost thereof. (d) Replacement. Subject to Lessse's indemnification of Lessor as set forth In Paragraph 0.7 below, and without relieving Lessee of liability resulting from Lessee's failure to exercise and perform good maintenance practices, if an item described in Paragraph 7.1(b) cannot bo repaired other than at a cost which is in excess of 50% of the cost of replacing such Item, then such item snail be replaced by Lessor, and the cost thereof shall be prorated between the Parties and Lessee shall only bo obligated to pay, each month during the remainder of the term of this Lease, on the date on which Base Rent is due, an amount equal to the product of multiplying the cost of such repiacernent by a fraction, the numerator of which is one, and the denominator of which Is 144 (te. 1/144th of the cost per month). Lessee shall pay Interest on the unamorttzed balance but may prepay its obligation at any time. 7.2 Lessor's Obligations. Subject to the provisions of Paragraphs 2.2 (Condition), 2.3 (Compliance), 9 (Damage or Destruction) and 14 (Condemnation), it is intended by the Parties hereto that Lessor have no obligation, in any manner whatsoever, to repair and maintain the Premises, or the equipment therein, all of which obligations are Intended to be that of the Lesseo, except for the surface and structural elements of the roof, foundations and bearing walls, the repair of which shall be the responsibility of Lessor upon receipt of written notice that such a repair is necessary. It is the Intention of the Parties that the terms of this Lease govern the respective obligations of the Parties as to maintenance and repair of the Premises, and they expressly waive the benefit of any statute now or hereafter in effect to the extent it is inconsistent with the terms of this Lease. 7.3 Utility Installations; Trade Fixtures; Alterations. (a) Definitions. The term "Utility Installations" refers to all floor and window coverings, air and/or vacuum tines, power panels, electrical distrihution, security and fire protection systems, communication cabling, lighting fixtures, HVAC equipment, plumbing, and fencing in or on the Premises. The term "Trade Fixtures" shall mear Lessee's machinery and equipment that can be removed without doing material damage to the Premises. The term "Alterations" shall mean any modification of the improvements, other than Utility Installations or Trade Fixtures, whether by addition or deletion. "Lessen Owned Alterations and/or Utility Installations" are defined as Alterations and/or Utility Installations made by Lessee that are not yet owned by Lessor pursuant to Paragraph 7.4(a). (b) Consent. Lessee shall not make any Alterations or Utility Installations to the Premises without Lessor's prior written consent. PAGE 5 OF 17 INITIALS ©2001 - AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM STG-15-4/12E INITIALS Lessen may, however, make non-structural Alterations or Utility Installations to the interior of the Premises (excluding the roof) without such consent but upon notice to Lessor, as tong as they are not visible from the outside, do not Involve puncturing, relocating or removing the root or any existing walls, will not affect the electrical, plumbing, HVAC, and/or life safety systems, and the cumulative cost thereof during this Lease as extended does not exceed a sum equal to 3 month's Base Rent In the aggregate or a sum equal to one month's Base Rent In any ene year. Notwithstanding the foregoing, Lessee shall not make or permit any roof penetrations and/or install anything on the roof without the prior written approval of Lessor. Lessor may, as a precondition to granting such approval, require Lessee to utilize a contractor chosen and/or approved by Lessor. Any Alterations or Utility installations that Lessee shall desire to make and which require the consent of the Lessor shall be presented to Lessor in written form with detailed plans. Consent shall be deemed conditioned upon Lessee's: (i) acquiring all applicable governmental permits, (ii) furnishing Lessor vnth copies of both the permits and the plans and specifications prior to commencement of the work, and (ill compliance with all conditions of said permits and other Applicable Requirements in a prompt and expeditious manner. Any Alterations or Utility Installations shall be performed in a workmanlike manner with good arid sufficient materials. Lessee shall promptly upon completion furnish Lessor with as•built plans and specificallons. For work which costs an amount in excess cf one month's Base Rent, Lessor may condition its consent upon Lessee providing a lien and completion bond In an amount equal to 150% of the estimated cost of such Alteration or Utility Installation and/or upon Lessee's posting an additional Security Deposit with Lessor. (c) Lions; Bonds. Lessee shall pay, when duo, all claims for labor or materials furnished or alleged to have been furnished to or for Lessee at or for use on the Premises, which claims are or may be secured by any mechanic's or materialrnen's lien against the Premises or any Interest therein. Lessee shall give Lessor not less than 10 days notice prior to the commencement of any work in, on or about the Premises, and Lessor shall have the right to post notices of non -responsibility. If Lessee shall contest the validity of any such Ilen, claim or demand, than Lessee shall, at its sole expense defend and protect itself, Lessor and the Premises against the same and shall pay and satisfy any such adverse judgment that may be rendered thereon before the enforcement thereof. If Lessor shall require, Lessee shall furnish a surety bond in an amount equal to 150% of the amount of such contested lien, claim or demand, Indemnifying Lessor against liability for the same. If Lessor elects to participate in any such action, Lessen shall pay Lessor's attorneys' fees and costs. 7.4 Ownership; Removal; Surrender; and Restoration. (a) Ownership. Subject to Lessor's right to require removal or elect ownership as hereinafter provided, all Alterations and Utility Installations made by Lessee shall be the property of Lessee, but considered a part of the Premises. Lessor may, at any time, elect in writing to be the owner of all or any specified part of the Lessee Owned Alterations and Utility Installations. Unless otherwise instructed per paragraph 7.4(b) hereof, all Lessoe Owned Alterations and Utility Installations shall, at the expiration or termination of this Lease, become the property of Lessor and be surrendered by Lessee with the Premises. (b) Removal. By delivery to Lessee of written notice from Lessor not earlier than 90 and not later than 30 days prior to the end of the term of this Lease, Lessor may require that any or all Lessee Owned Alterations or Utility Installations be removed by the expiration or termination of this Lease. Lessor may require the removal at any time of all or any part of any Lessee Owned Alterations or Utility Installations made without the required consent. (c) Surrender; Restoration. Lessee shall surrender the Premises by Iho Expiration Date or any earlier termination date, with all of the Improvements, parts and surfacos thereof broom clean and free of debris, and in good operating order, condition and state of repair, ordinary wear and tear excepted. "Ordinary wear and tear'' shall not Include any damage or deterioration that would have been prevented by good maintenance practice. Notwithstanding the foregoing, If this Lease Is for 12 months or less, then Lessee shall surrender the Premises In the sarne condition as delivered to Lessee on the Start Date with NO allowance for ordinary wear and tear. Lessee shall repair any damage occasioned by the Installation, maintenance or removal of Trade Fixtures, Lessee owned Alterations and/or Utility Installations, furnishings, and equipment as well as the removal of any storage lank Installed by or for Lessee. Lessee shall completely remove from the Premises any and all Hazardous Substances brought onto the Premises by or for Lessee, or any third party (except Hazardous Substances which were deposited vla underground migration from areas outside of the Premises) even if such removal would require Lessee to perform or pay for work that exceeds statutory requirenionts. Trade Fixtures shall remain the property of Lessee and shall be removed by Lessee. Any personal property of Lessee not removed on or before the Expiration Date or any earlier termination dale shall be deemed to have been abandoned by Lessee and may be disposed of or retained by Lessor as Lessor may desire. The failure by Lessen to timely vacate the Premises pursuant to this Paragraph 7.4(c) without the express written consent of Lessor shall constitute a holdover under /tie provisions of Paragraph 28 below. 8. Insurance; Indemnity. 8.1 Payment of Premium Increases. (a) Lessee shall pay to Lessor any Insurance cost Increase ("Insurance Cost Increase") occurring during the term of this Lease. Insurance Cost Increase is defined as any increase in the actual cost of the insurance required under Paragraph 8.2(11), 8.3(a) and 8.3(b) ("Required Insurance"), over and above the Base Premium as hereinafter defined calculated on an annual basis. Insurance Cost Increase shall Include but not be limited to Increases resulting from the nature of Lessee's occupancy, any act or omission of Lessee, requirements of the holder of mortgage or deed of trust covering the Premises, Increased valuation of the Premises and/or a premium rate Increase. The parties are encouraged to fill in the Base Premium 111 paragraph 1.8 with a reasonable premium for the Required Insurance based on the Agreed Use of the Premises. If the parties fail to insert a dollar amount In Paragraph 1.8, Then the Base Premium shall be the lowest annual premium reasonably obtainable for the Required Insurance as of the commencement of the Original Term for the Agreed Use of the Premfses. In no event, however, shall Lessee be responsible for any portion of the Increase in the premium cost attributable to liability Insurance carried by Lessor under Paragraph 8.2(b) in excess of $2,000,000 per occurrence. (b) Lessen shall pay any such Insurance Cost Increase to Lessor within 30 days after receipt by Lessee of a copy of the premium statement or other reasonable evidence of the amount due. If the insurance policies maintained hereunder cover other property besides the Premises, Lessor shall also deliver to Lessee a statement of the amount of such Insurance Cost Increase attributable only to the Premises showing in reasonable detail the manner In which such amount was computed. Premiums for policy periods commencing prior to, or extending beyond the term of this Lease, shall be prorated to correspond to the term of this Lease. 8.2 Liability Insurance. (a) Carried by Lessee. Lessee shall obtain and keep in force a Commercial General Liability policy of insurance protecting Lessee and Lessor as an additional Insured against claims for bodily injury, personal injury and property damage based upon or arising out of the ownership, use, occupancy or maintenance of the Premises and all areas appurtenant thereto. Such Insurance shall be on an occurrence basis providing single llnilt coverage In an amount not less than $1,000,000 per occurrence with an annual aggregate of not less than S2,000,000. Lessee shall add Lessor as an additional Insured by means of an endorsement at least es broad as the Insurance Service Organlzatlon's "Additional Insured -Managers or Lessors of Premises" Endorsement. Tho policy shall not contain any Intra -insured exclustons as between Insured persons or organizations. but shall include coverage for liability assumed under this Lease as an "Insured contract" for the performance of Lessee's indemnity obligations under this Lease. The limits of said insurance shall not, however, limit the liability of Lessee nor relieve Lessee of any obligation hereunder. Lesaeo shall provide an endorsement on Its liability pollcy(les) which provides that its Insurance shall be primary to and not contributory with any similar insurance carried by Lessor, whose insurance shall be considered excess insurance only. PAGE 6 OF 17 INITIALS ©2001 - AIR COMMERCIAL REAL ESTATE ASSOCIATION INITIALS FORM STG-15-4/12E (b) Carried by Lessor. Lessor shall maintain liability Insurance as described In Paragraph 8.2(a), in addition to, and not In lieu of, the Insurance required to be maintained by Lessee. Lessee shall not be named as an additional insured therein. 8.3 Property Insurance - Building, Improvements and Rental Value. (a) Building and Improvements. The Insuring Party shall obtain and keep in force a policy or policies in the name of Lessor, with loss payable to Lessor, any ground•lossor, and to any Lender Insuring loss or damage to the Premises. The amount of such Insurance shall be equal to the full Insurable replacement cost of the Premises, as the same shall exist from time to ;Ime, or the amount required by any Lender, but In no event more than the commercially reasonable and avaitable insurable value thereof. Lessee Owned Alterations and Utility Installations, Trade Fixtures, and Lessee's personal property shall be Insured by Lessee not by Lessor. If the coverage Is available and commercially appropriate, such policy or policies shall Insure against all risks of direct physical Toss or damage (except the perils of flood and/or earthquake unless required by a Lender or included in the Base Premium), including coverage for debris removal and the enforcement of any Applicable Requirements requiring the upgrading, demolition, reconstruction or replacement of any portion of the Premises as the result of a coverec toss. Said policy or policies shall also contain an agreed valuation provision to lieu of any coinsurance clause, waiver of subrogation, and inflation guard protection causing an increase in the annual property insurance coverage amount by a factor of not less than the adjusted U.S. Department of Labor Consumer Price Index for All Urban Consumers for the city nearest to where the Promises are located, If such insurance coverage has a deductible clause, the deductible amount shall not exceed $5,000 per occurrence, end Lessee shall be liable for such deductible amount in the event of an Insured Loss. (b) Rental Valuo. The insuring Party shall obtain and keep In force a policy or policies in the name of Lessor with loss payable to Lessor and arty Lender, Insuring the loss of the full Rent for one year with an extended period of Indemnity for an additional 180 days ("Rental Value Insurance"). Said Insurance shall contain an agreed valuation provision In lieu of any coinsurance clause, and the amount of coverage shall be adjusted annually to reflect the projected Rent otherwise payable by Lessee, for the next 12 month period. Lessee shall be liable for any deductible amount in the event of such loss. (c.) Adjacent Promises. If the Premises are part of a larger building, or of a group of buildings owned by Lessor which are adjacent to the Premises, the Lessee shall pay for any Increase in the premiums for the property insurance of such building or buildings If said increase is caused by Lessee's acts, omissions, use or occupancy of the Premises. 8.4 Lessee's Property; Business interruption Insurance; Worker's Compensation Insurance. (a) Property Damage. Lessee shall obtain and maintain insurance coverage on all of Lessee's personal property, Trade Fixtures, and Lessee Owned Alterations and Utility Installations. Such Insurance shall be full replacement cost coverage with a deductible of not to exceed $1,000 per occurrence. The proceeds from any such insurance shall bo used by Lessee for the replacement of personal property, Trade Fixtures and Lessee Owned Alterations and Utility Installations. Lessee shall provide Lessor with written evidence that such Insurance is in force. (b) Business Interruption. Lessee shall obtain and mafntaln loss of Income and extra expense insurance in amounts as will reimburse Lessee for direct or Indirect foss of earnings attributable to all perils commonly insured against by prudent lessees in the business of Lessee or altributabte to prevention of access to the Promises as a result of such perils. (c) Worker's Compensation Insurance. Lessee shall obtain and maintain Worker's Compensation Insurance in such amount as may be required by Applicable Requirements. Such policy shall include a Waiver of Subrogation' endorsement. Lessee shall provide Lessor with a copy of such endorsement along with the certificate of insurance or copy of the policy required by paragraph 8.5. (d) No Representation of Adequate Coverage. Lessor makes no representation that the limits or forms of coverage of insurance specified herein are adequate to cover Lessee's property, business operations or obligations under this Lease. 8.5 Insurance Policies. Insurance required herein shall be by companies maintaining during the policy term a "General Policyholders Rating" of at least A-, VII, as set forth In (ho moat current issue of "Bust's Insurance Glide", or such other rating as may be required by a Lender. Lessee shall not do or permit to be done anything which invalidates the required Insurance policies. Lessee shall, prior to the Start Date, deliver to Lessor certified copies of policies of such insurance or certificates with copies of the required endorsements evidencing the existence and amounts of the required insurance. No such policy shall be cancelable or subject to modification except after 30 days prior written notice to Lessor. Lessee shall, at least 10 days prior to the expiration of such policies, furnish Lessor with evidence of renewals or "Insurance binders" evidencing renewal thereof, or Lessor may order such Insurance and charge the cost thereof to Lessee, which amount shall be payable by Lessee to Lessor upon demand. Such policies shall be for a term of at least one year, or the length of the remaining term of this Lease, whichever is less. If either Party shall fail to procure and maintain the Insurance required to be carried by It, the other Party may, but shall not be required to, procure and maintain the same. 8.6 Waiver of Subrogation. Without affecting any other rights or remed'es, Lessee and Lessor each hereby release and relieve the other, and waive heir entire right to recover damages against the other, for loss of or damage to its property arising out of or incident to the perils required to be Insured against herein. The effect of such releases and waivers Is not limited by the amount of Insurance carried or required, or by any deductibles applicable hereto. The Parties agree to have their respective property damage Insurance carriers waive any right to subrogation that such companies niay hove against Lessor or Lessee, as the case may be, se tong as the Insurance Is not invalidated thereby. 8.7 Indemnity. Except for Lessor's gross negligence or willful misconduct, Lessee shall indemnify, protect, defend and hold harmless the Premises, Lessor and its agents, Lessor's master or ground lessor, partners and Lenders, from and against any and al( claims, loss of rents and/or damages, liens, Judgments, penalties, attorneys' and consultants' fees, expenses and/or liabilities arising out of, involving, or In connection with, the use and/or occupancy of the Premises by Lessee. if any action or proceeding is brought against Lessor by reason of any of the foregoing matters, Lessee shall upon notice defend the same at Lessee's expense by counsel reasonabty satisfactory to Lessor and Lessor shall cooperate with Lessee in such defense. Lessor need not have first paid any such claim In order to be defended or indemnified. 8.8 Exemption of Lessor and its Agents from Liability. Notwithstanding the negligence or breach of this Lease by Lessor or its agents, neither Lessor nor its agents shall be Mable under any circumstances for: (I) injury or damage to the person or goods, wares, merchandise or other property of Lessee, Lessee's employees, contractors, invitees, customers, or any other person In or about the Premises, whether such damage or Injury is caused by or results from fire, steam, electricity, gas, water or rain, Indoor air quality, the presence of mold or from the breakage, leakage, obstruction or other defects of pipes, fire sprinklers, wires, appliances, plumbing, HVAC or lighting fixtures, or from any other cause, whether the said Injury or damage results from conditions arising upon the Premises or upon other portions of the building of which the Premises are a part, or from other sources or places, (11) any damages arising from any act or neglect of any other tenant of Lessor or from the failure of Lessor or its agents to enforce the provisions of any other lease In the Project, or (iii) injury to Lessee's business or for any foss of income or profit therefrom. Instead, it is intended that Lessee's sole recourse In the event of such damages or Injury be to file a claim on the insurance policy(fes) that Lessee Is required to maintain pursuant to the provisions of paragraph 8. 8.9 Failure to Provide Insurance. Lessee acknowledges that any failure on its part to obtain or maintain the insurance required herein will expose Lessor to risks and potentially cause Lessor to incur costs not contemplated by this Lease, the extent of which will be extremely difficult to ascertain. Accordingly, for any month or portion thereof that Lessee does not maintain the required Insurance and/or does not provide Lessor with the required binders or certificates evidencing the existence of the required Insurance, the Base Rent shaft be automatically Increased, without any PAGE 7 OF 17 INITIALS INITIALS ©2001 - AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM STG-15-4f12E requirement for notice to Lessee, by an amount equal to 10% of the then existing Base Rent or 8100, whichever Is greater. The parties agree that such increase In Base Rent represents fair and reasonable compensation for the additional risk/ costs that Lessor will Incur by reason of Lessee's failure to maintain the required Insurance. Such increase in Base Rent shall in no event constitute a waiver of Lessee's Default or Breach with respect to the failure to maintain such Insurance, prevent the exercise of any of the other rights and remedies granted hereunder, nor relieve Lessee of Its obligation to maintain the insurance specified in this Lease. 9. Damage or Destruction. 9.1 Definitions. (a) "Premises Partial Damage" shall rnean damage or destruction to the improvements on the Premises, other than Lessee Owned Alterations and Utility Installations, which can reasonably be repaired in 6 months or less from the date of the damage or destruction. Lessor shall notify Lessee in writing within 30 days from the date of the damage or destruction as to whether or not the damage Is Partial or Total. Notwithstanding the foregoing, Premises Partial Damage shall not include damage to windows, doors, and/or other similar Items which Lessee has the responsibility to repair or replace pursuant to the provisions of Paragraph 7.1. (b) "Promises Total Destruction" shall mean damage or destruction 10 the Premises, other than Lessee Owned Alterations end Utility Installations and Trade Fixtures, which cannot reasonably be repaired In 6 months or less from the date of the damage or destruction. Lessor shall notify Lessee In writing within 30 days from the date of the damage or destruction as to whether or not the damage Is Partial or Total. (c) "Insured Loss" shall mean damage or destruction to Improvements on the Premises, other than Lessee Owned Alterations and Utility Installations and Trade Fixtures, which was caused by an event required to be covered by the Insurance described In Paragraph 8.3(a), Irrespective of any aeductible amounts or coverage limits (evolved. (d) "Replacement Cost" shall mean the cost to repair or rebuild the improvements owned by Lessor at the time of the occurrence to their condition existing Immediately prior thereto, including demolition, debris removal and upgrading required by the operation of Applicable Requirements, arid without deduction for depreclation. (e) "Hazardous Substance Condition" shell mean the occurrence or discovery of a condition involving the presence of, or a contamination by, a Hazardous Substance, In, on, or order tho Premises which requires restoration. 9.2 Partial Damage - Insured Loss. It a Premises Partial Damage that is an insured Loss occurs, then Lessor shall, al Lessor's expense, repair such damage (but not Lessee's Trade Fixtures or Lessee Owned Alterations and Utility Installations) as soon as reasonably possible and this Lease shall continue in full force and effect; provided, however, that Lessee shall, at Lessor's election, make the repair of any damage or destruction the total cost to repair of which Is $10,000 or less, and, in such event, Lessor shall make any applicable Insurance proceeds available to Lessee on a reasonable basis for that purpose. Notwithstanding the foregoing, if the required insurance was not in force or the Insurance proceeds are not sufficient to effect such repair, the Insuring Party shall promptly contribute the shortage in proceeds (except as to the deductible which is Lessee's responsibility) as and when required to complete said repairs. In the event, however, such shortage was due to the fact that, by reason of the unique nature of the improvements, full replacement cost insurance coverage was not commercially reasonable and available, Lessor shall have no obligation to pay for the shortage in Insurance proceeds or to fully restore the unique aspects of the Premises unless Lessee provides Lessor with the funds to cover same, or adequate assurance thereof, within 10 days foltowing receipt of written notice of such shortage and request therefor. If Lessor receives sald funds or adequate assurance thereof within said 10 day period, the party responsible for making the repairs shall complete them as soon as reasonably possible and this Lease shall remain in full force and effect. If such funds or assurance aro not received, Lessor may nevertheless elect by written notice to Lessee within 10 days thereafter to: (1) make such restoration and repair as Is commercially reasonable with Lessor paying any shortage In proceeds, in which case this Lease shall remain In full force and effect, or (Ii) have this Lease terminate 30 days thereafter. Lessee shall not be entitled to reimbursement of any funds contributed by Lessee to repair any such damage or destruction. Premises Partial Damage due to flood or earthquake shall be subject to Paragraph 9.3, notwithstanding that there may be some Insurance coverage, but the net proceeds of any such Insurance shall be made available for the repairs if made by either Party. 9.3 Partial Damage - Uninsured Loss. If a Premises Partial Damage that Is not an Insured Loss occurs, unless caused by a negligent or willful act of Lessee (in which event Lessee shall make the repairs at Lessee's expense), Lessor may either: (I) repair such damage as soon as reasonably possible at Lessor's expense, in which event this Lease shall continue in full force and effect, or (11) terminate this Lease by giving written notice to Lessee within 30 days after receipt by Lessor of knowledge of the occurrence of such damage. Such termination shall be effective 60 days following the date of such notice. In the event Lessor elects to teminate this Lease, Lessee shall have the right within 10 days after receipt of the termination notice to give written notice to Lessor of Lessee's commitment to pay for the repair of such damage without reimbursement from Lessor. Lessee shall provide Lessor with said funds or satisfactory assurance thereof within 30 days after making such commitment. In such event this Lease shall continue In full force and effect, and Lessor shall proceed to make such repairs as soon as reasonably possible after the required funds are available. If Lessee dces not make the required commitment, this Lease shall terminate as of the date specified In the termination notice. 9.4 Total Destruction. Notwithstanding any other provision hereof, if a Premises Total Destruction occurs, this Lease shall terminate 60 days following such Destruction. If the damage or destruction was caused by the gross negligence or willful misconduct of Lessee, Lessor shall have the right to recover Lessors damages from Lessee, except as provided in Paragraph 8.6. 9.5 Damage Near End of Term. If at any time during the last 6 months of this Lease there is damage for which the cost to repair exceeds one month's Base Rent, whether or not an Insured Loss, Lessor may terminate this Lease effective 60 days following the date of occurrence of such damage by giving a written termination notice co Lessee within 30 days after the date of occurrence of such damage. Notwithstanding the foregoing, if Lessee at that time has an exercisable option to extend this Lease or to purchase the Premises, then Lessee may preserve this Lease by, (a) exercising such option and (b) providing Lessor with any shortage In Insurance proceeds (or adequate assurance thereof) needed to make the repairs on or before the earlier of (i) the date which is 10 days after Lessee's receipt of Lessor's written notice purporting to terminate this Lease, or (II) the day prior to the date upon which such option expires. If Lessee duly exercises such option during such period and provides Lessor with funds (or adequate assurance thereof) to cover any shortage In insurance proceeds, Lessor shall, at Lessors commercially reasonable expense, repair such damage as soon as reasonably possible and this Lease shall continuo In full force and effect. If Lessee falls to exercise such option and provide such funds or assurance during such period, then this Lease shall terminate on the date specified In the termination notice and Lessee's option shall be extinguished. 9.6 Abatement of Rent; Lossee's Remedies. (a) Abatement. In the event of Premises Partial Damage or Premises Total Destruction or a Hazardous Substance Condition for which Lessee is not responsible under this Lease, the Rent payable by Lessee for the period required for the repair, remediation or restoration of such damage shall be abated in proportion to the degree to which Lessee's use of the Premises is Impaired, but not to exceed the proceeds received from the Rental Value Insurance. All other obligations of Lessee hereunder shall be performed by Lessee, and Lessor shall have no liability for any such damage, destruction, remediation, repair or restoration except as provided herein. (b) Remedies. If Lessor is obligated to repair or restore the Premises and does not commence, in a substantial and meaningful way, such repair or restoration within 90 days after such obligation shall accrue, Lessee may, at any time prior to the commencement of such repair or PAGE 8 OF 17 INITIALS ©2001 - AIR COMMERCIAL REAL ESTATE ASSOCIATION INITIALS FORM STG-15-4112E restoration, give written notice to Lessor and to any Lenders of which Lessee has actual notice, of Lessee's election to terminate this Lease on a date not less than 60 days following tho giving of such notice. If Lessee gives such notice and such repair or restoration is not commenced within 30 days thereafter, this Leese shell temminate as of the date specified In said notice. If the repair or restoration is commenced within such 30 days, this Lease shall continue in full force and effect. "Commence" shall mean either the unconditional authorization of the preparation of the required plans. or the beginning of the actual work on the Premises, whichever first occurs. 9.7 Terminatlon; Advance Payments. Upon termination of this Lease pursuant to Paragraph 6.2(g) or Paragraph 9, an equitable adjustment shall be made concerning advance Base Rent arid any other advance payments made by Lessee to Lessor. Lessor shall, in addition, return to Lessee so much of Lessee's Security Deposit as has not been, or Is not then required to be, used by Lessor. 10. Real Property Taxes. 10.1 Definition. As used herein, the tern "Real Property Taxes" shall include any form of assessment; real estate, general, special, ordinary or extraordinary, or rental levy or tax (other than Inheritance, personal income or estate taxes); Improvement bond; and/or license fee imposed upon or levied against any legal or equitable Interest of Lessor in the Premises or the Project, Lessor's right to other income therefrom, and/or Lessor's business of leasing, by any authority having the direct er indirect power to tax and whore the funds are generated with reference to the Building address and where the proceeds so generated aro to be applied by the city, county or other local taxing authority of a Jurisdiction within which the Premises are located Real Property Taxes shall also include any tax, fee, levy, assessment or charge, or any Increase therein; (1) Imposed by reason of events occurring during the term of this Lease, including but not limited to, a change In the ownership of the Premises, and (Il) levied or assessed on machinery or equipment provtded by Lessor to Lessee pursuant to This Lease. 10.2 (a) Payment of Taxes. Lessor shall pay the Real Property Taxes applicable to the Premises provided, hoover, that Lessee shall pay to Lessor the amount, If any, by which Real Property Taxes applicable to the Premises increase over the fiscal tax year during which the Commencement Date Occurs (`Tax Increase'). Payment of any such Tax Increase shall be made by Lessee to Lessor within 30 days after receipt of Lessor's written statement setting forth the amount due and computation thereof. If any such taxes shall cover any period of time prior to or after ttie expiration or termination of this Lease, Lessee's share of such saxes shall be prorated to cover only that portion of the tax bill applicable to the period that this Lease is in effect. In the event Lessee Incurs a late charge on any Rent payment, Lessor may estimate the current Real Property Taxes, and require that the Tax Increase be paid in advance to Lessor by Lessee monthly In advance with the payment of the Base Rent. Such monthly payment shall be an amount equal to the amount of the estimated Installment of the Tax Increase divided by the number of months remaining before the month in which said Installment becomes delinquent, When the actual amount of the applicable Tax Increase is known, the amount of such equal monthly advance payments shall be adjusted as required to provide the funds needed to pay the applicable Tax Increase. If the amount collected by Lessor is Insufficient to pay the Tax Increase when due, Lessee shall pay Lessor, upon demand, such additional sums as are necessary to pay such obligations. Advance payments may be intermingled with other moneys of Lessor and shall not bear Interest. In the event of a Breach by Lessee in the performance of Its obligations under this Lease, then any such advance payments may be treated by Lessor as an additional Security Deposit. (h) Additional Improvements. Notwithstanding anything to the contrary In this Paragraph 10.2, Lessee shall pay to Lessor upon demand therefor the entirety of any Increase in Real Property Taxes assessed by reason of Alterations or Utility Installations placed upon the Premises by Lessee or at Lessee's request or by reason of any alterations or Improvements to the Premises made by Lessor subsequent to the execution of this Lease by the Parties. 10.3 Joint Assessment. If the Premises are not separately assessed, Lessee's liability shall be an equitable proportion of the Tax increase for all of the land and improvements Included within the tax parcel assessed, such proportion to be conclusively determined by Lessor from the respective valuations assigned In the assessor's work sheets or such other information as may be reasonably available. 10.4 Personal Property Taxes. Lessee shall pay, prior to delinquency, ail taxes assessed against and levied upon Lessee Owned Aiteratlons, Utility Installations, Trade Fixtures, furnishings, equipment and all personal property of Lessee. When possible, Lessee shall cause Hs Lessee Owned Alterations and Utility Installations, Trade Fixtures, furnishings, equipment and all other personal property to be assessed and billed separately from the real property of Lessor. If any of Lessee's said property shall be assessed with Lessor's real property, Lessee shall pay Lessor the taxes attributable to Lessee's property within 10 days after receipt of a written statement setting forth the taxes applicable to Lessee's property. 11. Utilities and Services. Lessee shall pay For all water, gas, heat, light, power, telephone, trash disposal and other utilities and services supplied to the Premises, together with any taxes thereon. If any such services are not separately metered or billed to Lessee, Lessee shall pay a reasonable proportion, to be determined by Lessor, of all charges Jointly metered or billed. There shall be no abatement of rent and Lessor shall not be liable In any respect whatsoever for the inadequacy, stoppage, interruption or discontinuance of any utility or service due to riot, strike, labor dispute, breakdown, accident, repair or other cause beyond Lessor's reasonable control or in cooperation with governmental request or directions. 12. Assignment and Subletting. 12.1 Lessor's Consent Required. (a) Lessee shall not voluntarily or by operation of law assign, transfer, mortgage or encumber (collectively, "assign or assignment") or sublet all or any part of Lessee's inte-est In this Lease or In the Premises without Lessor's prior written consent. (b) Unless Lessee Is a corporation and its stock is publicly traded on a national stock exchange, a change in the control of Lessee shall constitute an assignment requiring consent. The transfer, on a cumulative basis, of 25% or more of the voting control of Lessee shall constitute a change In control for this purpose. (c) The involvement of Lessee o- its assets In any transaction, or series of transactions (by way of merger, sale, acquisition, financing, transfer. leveraged buy-out or otherwise), whether or not a formal assignment or hypothecation of this Lease or Lessee's assets occurs, which results or will result In a reduction of the Net Worth of Lessee by an amount greater than 25% of such Net Worth as It was represented at the time of the execution of this Lease or at the time of the most recent assignment to which Lessor has consented, or as It exists immediately prior to said transaction or transactions constituting such reduction, whlehever was or Is greater, shall be considered an assignment of this Lease to which Lessor may withhold its consent. "Not Worth of Lessee" shalt mean the net worth of Lessee (exeludtng any guarantors) established under generally accepted accounting principles. (d) An assignment or subletting without consent shall, at Lessor's option, be a Default curable after notice per Paragraph 13.1(c), or a noncurable Breach without the necessity of any notice arrd grace period. If Lessor elects to treat such unapproved assignment or subletting as a noncurable Breach, Lessor may either. (I) terminate this Lease, or (ii) upon 30 days written notice, increase the monthly Base Rent to 110% of the Base Rent then In effect. Further, in the event of such Breach and rental adjustment, (I) tho purchase price of any option to purchase the Premises held by Lessee shall be subject to similar adjustment to 110?A of tho price previously In effect, and (II) all fixed and non -fixed rental adjustments scheduled during the remainder of the Lease term shall be Increased to 110% of the scheduled adjusted rent. (e) Lessee's remedy for any breach of Paragraph 12.1 by Lessor shall be limited to compensatory damages and/or injunctive relief. (f) Lessor may reasonably withhold consent to a proposed assignment or subletting if Lessee is in Default at the time consent is requested. PAGE 9 OF 17 INITIALS c2001 - AIR COMMERCIAL REAL ESTATE ASSOCIATION INITIALS FORM STG-15.4/12E (g) Notwithstanding the foregoing, allowing a de minimis portion of the Premises, le. 20 square feet or less, to be used by a third party vendor in connection with the installation of a vending machine or payphone shall not constitute a subletting. 12.2 Terms and Conditions Applicable to Assignment and Subletting. (a) Regardless of Lessor's consent, no assignment or subletting shall: (1) be effective without the express written assumption by such assignee or sublessee of the obligations of Lessee under this Lease, (i() release Lessee of any obligations hereunder, or (111) alter the primary liability of Lessee for the payment of Rent or for the performance of any other obligations to bo performed by Lessee. ;b) Lossor may accept Rent or performance of Lessee's obligations from any person other than Lessee pending approval or disapproval of an assignment. Neither a delay In the approval or disapproval of such assignment nor the acceptance of Rent or performance shall constitute a waiver cr estoppel of Lessor's right to exerc se its remedies for Lessee's Default or Breach. (c) Lessor's consent to any assignment or subletting shall not constitute a consent to any subsequent assignment or subletting. (d) In the event of any Default or each by Lessee, Lessor may proceed directly against Lessee, any Guarantors or anyone else responsible for the performance of Lessee's obligations under this Lease, including any assignee or sublessee, without first exhausting Lessor's remedies against any other person or entity responsible therefor to Lessor, or any security held by Lessor. (e) Each request for consent to an assignment or subletting shall be In writing, accompanied by information relevant to Lessors determination as to the financial and operational responsibility and appropriateness of the proposed assignee or sublessee, Including but not limited to the Intended use and/or required modification of (he Premises, If any, together with a fee of $500 as consideration for Lessors considering and processing said request. Lessee agrees to provide Lessor with such other or additional Information and/or documentation as may be reasonably requested. (Seo also Paragraph 36) (f) Any assignee of, or sublessee under, thls Lease shall, by reason of accepting such assignment, entering into such sublease, or entering into possession of the Premises or any portion thereof, be deemed to have assumed and agreed to confomm and comply with each and every term, covenant, condition and obflgation herein to be observed or performed by Lessee during the term of said assignment or sublease, other than such obligations as are contrary to or inconsistent with provisions of an assignment or sublease to which Lessor has specifically consented to In writing. (g) Lessor's consent to any assignment or subletting shall not transfer to the asslgnee or sublessee any Option granted to the original Lessee by this Lease unless such transfer is specifically consented 10 by Lessor In writing. (See Paragraph 39.2) 12.3 Additional Terms and Conditions Appitcable to Subletting. The following temis arid conditions shall apply to any subletting by Lessee of all or any part of the Premises and shall be deemed included In all subleases under this Lease whether or not expressly incorporated therein: (a) Lessee hereby assigns and transfers to Lessor all of Lessee's Interest In all Rent payable on any sublease, and Lessor may collect such Rent and apply same toward Lessee's obligations under this Lease; provided, however, that until a Breach shall occur in the performance of Lessee's obligations, Lessee may collect said Rent. In the event that the amount collected by Lessor exceeds Lessee's then outstanding obligations any such excess shall be refunded to Lessee. Lessor shall not, by reason of the foregoing or any assignment of such subtease, nor by reason of the collection of Rent, be deerned liable to the sublessee for any failure of Lessee to perform and comply with any of lessee's obligations to such sublessee. Lessee hereby irrevocably authorizes and directs any such sublessee, upon receipt of a written notice from Lessor staling that a Breach exists In the performance of Lessee's obligations under this Lease, to pay to Lessor all Rent due and to become due under the sublease. Sublessee shall rely upon any such notice from Lessor and shall pay all Rents to Lessor without any obligation or right to inquire as to whether such Breach exists, notwithstanding any claim from Lessen to the contrary. (b) In the event of a Breach by Lessee, Lessor may, at Its option, require sublessee to attorn to Lessor, In which event Lessor shall undertake the obligations of the sublessor under such sublease from the time of the exercise of said option to the expiration of such sublease; provided, however, Lessor shall not be liable for any prepaid rents or security deposit paid by such sublessee to such sublessor or for any prior Defaults or Breaches of such sublessor. (c) Any matter requiring the consent of the sublessor under a sublease shall also require the consent of Lessor. (d) No sublessee shall further assign or sublet all or any part of the Premises without Lessors prior written consent. (e) Lessor shall deliver a copy of any notice of Default or Breach by Lessee to the sublessee, who shall have the right to cure the Default of Lessee within the grace period, if any, specified in such notice. The sublessee shall have a right of reimbursement and offset from and against Lessee for any such Defaults cured by the sublessee. 13. Default; Breach; Remedies. 13.1 Default; Breach. A "Default" Is defined as a failure by the Lessee to comply with or perform any of the terms, covenants, conditions or Rules and Regulations under this Lease. A "Breach" Is defined as the occurrence of one or more of the following Defaults, and the failure of Lessee to cure such Default within any applicable grace period: (a) The abandonment of the Premises; or the vacating of the Premises without providing a commercially reasonable level of security, or where the coverage of the property Insurance described in Paragraph 8.3 is jeopardized as a result thereof, or without providing reasonable assurances to minimize potential vandalism. (b) The failure of Lessee to make any payment of Rent or any Security Deposit required to be made by Lessee hereunder, whether to Lessor or to a third party, when due, to provide reasonable evidence of insurance or surety bond, or to fulfill any obligation under this Lease which endangers or threatens life or property, where such failure continues for a period of 3 business days following written notice to Lessee. THE ACCEPTANCE BY LESSOR OF A PARTIAL PAYMENT OF RENT OR SECURITY DEPOSIT SHALL NOT CONSTITUTE A WAIVER OF ANY OF LESSOR'S RIGHTS. INCLUDING LESSOR'S RIGHT TO RECOVER POSSESSION OF THE PREMISES. (c) The failure of Lessee to allow Lessor and/or its agents access to the Premises or the commission of waste, act or acts constituting public or private nuisance, and/or an Illegal activity on the Premises by Lessee, where such actions continue for a period of 3 business days following written notice to Lessee. (d) The failure by Lessee to provide (I) reasonable written evidence of compliance with Applicable Requirements, (It) the service contracts, (ill) the rescission of an unauthorized assignment or subletting, (iv) an Estoppel Certificate or financial statements, (v) a requested subordination, (vi) evidence concerning any guaranty and/or Guarantor, (vii) any document requested under Paragraph 42, (viii) material safety data sheets (MSDS), or (lx) any other documentation or In`ormation which Lessor may reasonably require of Lessee under the terms of this Lease, where any such failure continues for a period of 10 days following written notice to Lessee. (o) A Default by Lessee as to the terms, covenants, conditions or provisions of this Lease, or of the rules adopted under Paragraph 40 hereof, other than those described In subparagraphs 13.1(a), (b), (c) or (d), above, where such Default continues for a period of 30 days after written notice; provided, however, that if the nature of Lessee's Default Is such that more than 30 days are reasonably required for its cure, then it shall not be deemed to be a Breach If Lessee commences such cure within said 30 day period and thereafter diligently prosecutes such cure to completion. (f) The occurrence of any of the following events: (i) the making of any general arrangement or assignment for the benefit of creditors; (II) becoming a "debtor' as defined in 11 U.S.C. §101 or any successor statute thereto (unless, in the case of a petition fled against Lessee, the same Is dismissed within 60 days); (iii) the appoin'ment of a trustee or receiver to take possession of substantially all of Lessee's assets located at PAGE 10 OF 17 [NITIALS ©2001 - AIR COMMERCIAL REAL ESTATE ASSOCIATION INITIALS FORM STG-16-4112E the Premises or of Lessee's Interest in thls Lease, where possession is not restored to Lessee within 30 days; or (Iv) the attachment, execution or other judicial seizure of substantially all of Lessee's assets located at the Premises or of Lessee's interest In this Lease, where such seizure Is not discharged within 30 days; provided, however, In the event that any provision of this subparagraph (e) Is contrary to any applicable law, such provision shall be of no force or effect, and not affect the validity of the remaining provisions. (g) The discovery that any financial statement of Lessee or of any Guarantor given to Lessor was materially false. (h) If the performance of Lessee's oollgations under this Lease Is guaranteed: (I) the death of a Guarantor. (ii) the termination of a Guarantor's liability with respect to this Lease other than in accordance with the terms of such guaranty, (iii) a Guarantor's becoming insolvent or the subject of a bankruptcy filing, (iv) a Guarantor's refusal to honor the guaranty, or (v) a Guarantor's breach of Its guaranty obligation on art anticipatory basis, and Lessee's failure, within GO days following written notice of any such event, to provide written alternative assurance or security, which, when coupled with the then existing resources of Lessee, equals or exceeds the combined financial resources of Lessee and the Guarantors that existed at the time of execution of this Lease. 13.2 Remedios. if Lessee fails to perform any of its affirmative duties or obligations, within 10 days after written notice (or in case of an emergency, without notice), Lessor may, at its option, perform such duty or obligation on Lessee's behalf, including but not limited to the obtaining of reasonably required bonds, insurance policies, or governmental licenses, permits or approvals. Lessee shall pay to Lessor an amount equal to 115% of the costs and expenses incurred by Lessor in such performance upon receipt of an Invoice therefor. In the event of a Breach, Lessor may, with or without further notice or demand, and without limiting Lessor In the exercise of any right or remedy which Lessor may have by reason of such Breach: (a) Terminate Lessee's right to possession of the Premises by any lawful means, In which case this Lease shall terminate and Lessee shall immediately surrender possession to Lessor. In such event Lessor shall be entitled to recover from Lessee: (I) the unpaid Rent which had been earned at the time of termination; (It) the worth at the time of award of the amount by which the unpaid rent which would have been earned after termination until the time of award exceeds the amount of such rental loss that the Lessee proves could have been reasonably avoided; (III) the worth at the time of award of the amount by which the unpaid rent for the balance of the term after the time of award exceeds the amount of such rental loss that the Lessee proves could be reasonably avoided; and (iv) any other amount necessary to compensate Lessor for all the detriment proximately caused by the Lessee's failure 'o perform Its obligations under this Lease or which In the ordinary course of things would be likely to result therefrom, Including but not limited to the cost of recovering possession of the Premises, expenses of reletting, including necessary renovation and alteration of the Premises, reasonable attorneys' fees, arid that portion of any teasing commission paid by Lessor in connection with this Lease applicable to the unexpired term of Tis Lease. The worth at the time of award of the amount referred to In provision (ill) of the Immediately preceding sentence shall be cornputed by discounting such amount at the discount rate of the Federal Reserve Bank of the District within which the Premises are located at the time of award plus one percent. Efforts by Lessor to mitigate damages caused by Lessee's Breach of this Lease shall not waive Lessor's right to recover any darnages to which Lessor Is otherwise entitled. If termination of this Lease Is obtained through the provisional remedy of unlawful detainer, Lessor shall have the right to recover in such proceeding any unpaid Rent and damages as aro recoverable therein, or Lessor may reserve Iha right to recover all or any part thereof In a separate suit. If a notice end grace period required under Paragraph 13.1 was not previously given, a notice to pay rent or quit, or to perform or quit given to Lessee under the unlawful detainer statute shall also constitute the notice required by Paragraph 13,1. In such case, the applicable grace period required by Paragraph 13.1 and the unlawful detainer statute shall run concurrently, and the failure of Lessee to cure the Default within the greater of the two such grace periocs shall constitute both an unlawful detainer and a Breach of this Lease entitling Lessor to the remedies provided for In this Lease and/or by said statute. (b) Continue the Lease and Lessee's right to possession and recover the Rent as it becomes due, in which event Lessee may sublet or assign, subject only to reasonable limitations. Acts of maintenance, efforts to relet, and/or the appointment of a receiver to protect the Lessor's interests, shall not constitute a termination of the Lessee's right to possession. (c) Pursue any other remedy now or hereafter available under the laws or judicial decisions of Iho state wherein the Premises are located. The expiration or termination of this Lease arrd/or the termination of Lessee's right to possession shall not relieve Lessee from liability under any Indemnity provisions of this Lease as to matters occurring or accruing during the tars hereof or by reason of Lessee's occupancy of the Premises. 13.3 Inducement Recapture. Any agreement for free or abated rent or other charges, or for the giving or paying by Lessor to or for Lessee of any cash or other bonus, Inducement or consideration for Lessee's entering into this Lease, all of which concessions are hereinafter referred to as "Inducement Provisions," shall be deemed conditioned upon Lessee's full and faithful performance of all of the terms, covenants and conditions of this Lease. Upon Breach of this Lease by Lessee, any such Inducement Provision shall automatically bo deemed deleted from this Lease and of no further force or effect, and any rent, other charge, bonus, Inducement or consideration theretofore abated, given or paid by Lessor under such an Inducement Provision shall be immediately duo and payable by Lessee to Lessor, notwithstanding any subsequent cure of said Breach by Lessee. The acceptance by Lessor of rent or the cure of the Breach which initiated the operation of this paragraph shall not be deemed a waiver by Lessor of the provisions of this paragraph unless specifically so stated in waiting by Lessor at the time of such acceptance. 13.4 Late Charges. Lessee hereby acknowledges that late payment by Lessee of Rent will cause Lessor to Incur costs not contemplated by this Lease, the exact amount of which will be extremely difficult to ascertain. Such costs Include, but are not limited to, processing and accounting charges, and late charges which may be imposed upon Lessor by any Lender. Accordingly, if any Rent shell not be received by Lessor within 5 days after such amount shall be duo, then, without any requirement for notice to Lessee, Lessee shall immediately pay to Lessor a one-time late charge equal to '10% of each such overduo amount or $100, whichever Is greater, The Parties hereby agree that such late charge represents a fair and reasonable estimate of the costs Lessor will Incur by reason of such late payment. Acceptance of such late charge by Lessor shall In no event constitute a waiver of Lessee's Default or Breach with respect to such overdue amount, nor prevent the exercise of any of the other rights and remedies granted hereunder. In the event that a late charge Is payable thereunder, whether or not collected, for 3 consecutive installments of Base Rent, then notwithstanding any provision of this Lease to the contrary, Base Rent shall, at Lessor's option, beconie due and payable quarterly in advance. 13.5 Interest. Any monetary payrnem due Lessor hereunder, other than late charges, not received by Lessor, when due as to scheduled payments (such as Base Rent) or within 30 days following the date on which it was due for non-scheduled payment, shall bear interest from the date when due, as to scheduled payments, or the 31st day after it was due as to nonscheduled payments. The interest (' Interest") charged shall be computed at the rate of 10% per annum but shall not exceed the maximum rate allowed by law. Interest Is payable In addition to the potential late charge provided for In Paragraph 13.4. 13.6 Breach by Lessor. (a) Notice of Broach. Lessor shall not be deemed in breach of this Lease unless Lessor falls within a reasonable limo to perform an obligatiorn required to be performed by Lessor. For purposes of this Paragraph, a reasonable time shall in no ovent be fess than 30 days after receipt by Lessor, and any Lender whose name and address shall have been furnished Lessee in writing for such purpose, of written notice specifying wherein such obligation of Lessor has riot been performed; provided, however, chat if the nature of Lessor's obligation Is suet' that more than 30 days are reasonably required (or its performance, then Lessor shall not be In breach if performance Is commenced within such 30 day period arid thereafter diligently pursued to completion. (b) Performance by Lessee on Behalf of Lessor. In the event that neither Lessor nor Lender cures said breach within 30 days PAGE 11 OF 17 INITIALS 02001 - AIR COMMERCIAL REAL ESTATE ASSOCIATION INITIALS FORM STG-15-4112E after receipt of said notice, or If having commenced saki curo they do not diligently pursue it to completion, then Lessee may elect to cure said broach at Lessee's expense and offset from Rent the actual and reasonable cost to perform such cure, provided however, that such offset shall not exceed an amount equal to the greater of one month's Base Rent or the Security Deposit, reserving Lessee's right to seek reimbursement from Lessor for any such expense In excess of such offset. Lessee shall document the cost of saki cure and supply said documentation to Lessor. 14. Condemnation. If the Premises or any portion thereof are taken under the power of eminent domain or sold under he threat of the exercise of said power (collectively "Condemnation"), this Lease shall terminate as to the part taken as of the dale the condemning authority lakes title or possession, whichever first occurs. If more than 10% of the Building, or more than 25% of that portion of the Premises not oceupled by any building, is taken by Condemnation, Lessee may, at Lessee's option, to be exercised in writing within 10 days after Lessor shall have given Lessee written notice of such taking (or In the absence of such notice, within 10 days after the condemning authority shall have taken possession) terminate this Lease as of the date the condemning authority takes such possession. If Lessee does not terminate this Lease in accordance with the foregoing, this Lease shall remain in full force and effect as to the portion of the Premises remaining, except that the Baso Rent shall be reduced in proportion to the reduction in utility of the Premises caused by such Condemnation. Condemnation awards and/or payments shall be the property of Lessor, whether such award shall be made as compensation for diminution in value of the leasehold, the value of the part taken, or for severance damages; provided, however, that Lessee shall be entitled to any compensation paki by the condemnor for Lessee's relocation expenses, loss of business goodwill and/or Trade Fixtures, without regard to whether or not this Lease Is terminated pursuant to the provisions of this Paragraph. Ali-Alteretlons-and-Utllty-installations rnadeeto the -P emises-by Lessee; feepurpeses-of-Condemnallon only.-shaftbe-senskiered-the-frreperty-ef-;he-Lessee-enol Lessee-shalttreenetied-te-any-and all compensationwhfctelspayabte4herefoF--In the event that this Lease is not terminated by reason of the Condemnation, Lessor shall repair any damage to the Premises caused by such Condemnation. 15. Brokerage Fees. 15.1 Additional Commission. if a separate brokerage fee agreement is attached then in addition to the payments owed pursuant to Paragraph 1.9 above, and unless Lessor and the Brokers otherwise agree In writing, Lessor agrees that: (a) if Lessee exercises any Option, (b) if Lessee or anyone affiliated with Lessee acquires any rights to the Premises or other premises owned by Lessor and located within the same Project, if any, within which the Premises is located, (c) If Lessee remains in possession of the Premises, with the consent of Lessor, after the expiration of this Lease, or (d) If Base Rent is Increased, whether by agreement or operation of an escalation clause herein, then, Lessor shall pay Brokers a fee In accordance with the schedule attached to such brokerage fee agreement. 15.2 Assumption of Obtlgatlons. Any buyer or transferee of Lessor's Interest In this Lease shall be deemed to have assumed Lessor's obligation hereunder. Brokers shall be third party beneficiaries of the provisions of Paragraphs 1.9, 15, 22 and 31. If Lessor falls to pay to Brokers any amounts due as and for brokerage fees pertaining to this Lease when due, then such amcunts shall accrue Interest. In addifon, if Lessor fails to pay any amounts to Lessee's Broker when due, Lessee's Broker may send written notice to Lessor and Lessee of such failure and if Lessor fails to pay such amounts within 10 days after said notice, Lessee shall pay said monies to its Broker and offset such amounts against Rent. In addition, Lessee's Broker shall be deemed to be a third party beneficiary of any commission agreement entered into by and/or between Lessor and Lessor's Broker for the limited purpose of collecting any brokerage fee owed. 15.3 Representations and Indemnities of Broker Relationships. Lessee and Lessor each represent and warrant to the other That it has had no dealings with any person, firm, broker or finder (other than the Brokers, if any) In connection with this Lease, and that no one other than said named Brokers Is entitled to any commisslon or finder's fee In connection herewith. Lessee and Lessor do each hereby agree to Indemnify, protect, defend and hold the other harrnfess from and against liability for compensation or charges which may be claimed by any such unnamed broker, finder or other similar party by reason of any dealings or actions of the indemnifying Party, including any costs, expenses, attorneys' fees reasonably incurred with respect thereto. 16. Estoppel Certificates. (a) Each Party (as "Responding Party") shell within 10 days after written notice from the other Party (the "Requesting Party") execute, acknowledge and deliver to the Requesting Party a statement in writing in form similar to the then most current "Estoppel Certificate" form published by the AiR Commercial Real Estate Assocatlon, plus such additional information, confirmation and/or statements as may be reasonably requested by the Requesting Party. (b) If the Responding Party shall fail to execute or deliver the Estoppel Certificate within such 10 day period, the Requesting Party may execute an Estoppel Certificate stating that: (I) the Lease Is In full force and effect without modification except as may be represented by the Requesting Party, (II) there are no uncured defaults in the Requesting Party's performance, and (111) if Lessor Is the Requesting Party, not more than one month's rent has been paid In advance. Prospective purchasers and encurnbrancers may rely upon the Requesting Party's Estoppel Certificate, and the Responding Party shall be estopped from denying the :ruth of the facts contained in said Certificate. In addition, Lessee acknowledges that any failure on Its part to provide such an Estoppel Certificate will expose Lessor to risks and potentially cause Lessor to incur costs not contemplated by Ihls Lease, the extent of which will be extremely difficult tc ascertain. Accordingly, should the Lessee fail to execute and/or deliver a requested Estoppel Certificate in a timely fashion the monthly Base Rent shall be automatically Increased, without any requirement for notice to Lessee, by an amount equal to 10% of the then existing Bose Rent or $100, whichever is greater for remainder of the Lease. The Parties agree that such increase In Base Rent represents fair and reasonable compensation for the additional risk/costs that Lessor will incur by reason of Lessee's failure to provide the Estoppel Certificate. Such increase in Base Rent shall In no event constitute a waiver of Lessee's Default or Breach with respect to the failure to provide the Estoppel Certificate nor prevent the exercise of any of the other rights and remedies granted hereunder. (c) If Lessor desires to finance, refinance, or sell the Premises, or any part thereof, Lessee and all Guarantors shall within 10 days after written notice from Lessor deliver to any potential fender or purchaser designated by Lessor such financial statements as may be reasonably required by such lender or purchaser, including but not limited to Lessee's financial statements for the past 3 years. All such financial statements shall be received by Lessor and such lender or purchaser in confidence and shall be used only for the purposes herein set forth. 17. Definition of Lessor. The term "Lessor" as used herein shall mean the owner or owners at the time In question of the fee title to the Premises, or, If this Is a sublease, of the Lessee's Interest in the prior lease. In the event of a transfer of Lessor's title or Interest in the Premises or this Lease, Lessor shall deliver to the transferee or assignee (in cash or by credit) any unused Security Deposit held by Lessor. Upon such transfer or assignment and delivery of the Security Deposit, as aforesaid, the prior Lessor shall be relieved of all liability with respect to the obligations and/or covenants under this Lease thereafter to be performed by the Lessor. Subject to the foregoing, the obligations and/or covenants In this Lease to be performed by the Lessor shall be binding only upon the Lessor as herelnabove defined. 18. Severability. The Invalidity of any provision of this Lease, as determined by a court of competent Jurisdiction, shall in no way affect the validity of any other provision hereof. 19. Days. Unless otherwise specifically indicated to the contrary, the word "days" as used In this Lease shall mean and refer to calendar days. 20. Limitation on Liability. The obligations of Lessor under this Lease shall not constitute personal obligations of Lessor or its partners, members, directors, officers or shareholders, and Lessee shall look to the Premises, and to no other assets of Lessor, for the satisfaction of any liability of Lessor with respect to this Lease, and shall not seek recourse against Lessor's partners, members, directors, officers or shareholders, or any of their PAGE 12 OF 17 INITIALS INITIALS ©2001 - AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM STG-15-4112E persona( assets for such satisfaction. 21. Time of Essence. Time Is of the essence with respect to the performance of all obligations to be performed or observed by the Parties under this Lease. 22. No Prior or Other Agreements; Broker Disclaimer. This Lease contains all agreements between the Parties with respect to any matter mentioned herein, and no other prior or contemporaneous agreement or understanding shall be effective. Lessor and Lessee each represents and warrants to the Brokers that it has made, and Is relying solely upon, Its own investigation as to the nature, quality, character and financial responsibility of the other Party to this Leaso and as to the use, nature, quality and character of the Premises. Brokers have no responsibllity wtth respect thereto or with respect to any default or breach hereof by either Party. 23. Notices. 23.1 Notice Requirements. All notices required or permitted by this Lease or applicable taw shall be in writing and may be delivered in person (by hand or by courier) or may be sent by regular, certified or registered mall or U.S. Postal Service Express Mall, with postage prepaid, or by facsimile transmission, and shall be deemed sufficiently given if served in a manner specified in this Paragraph 23. Tho addresses noted adjacent to a Party's signature on this Lease shall be that Party's adcress for delivery or mailing of notices. Either Party may by written notice to the other specify a different address for notice, except that upon Lessee's taking possession of the Premises, he Promises shall constitute Lessee's address for notice, A copy of all notices to Lessor shall be concurrently transmitted to such party or parties at such addresses as Lessor may from time to time hereafter designate In writing. 23.2 Dato of Notice. Any notice sent by registered or certified mall, return receipt requested, shall be deemed given on the date of delivery shown on the receipt card, or If no delivery date Is shown, the postmark thereon. if sent by regular mall the notice shall be deemed given 72 hours after the same is addressed as required herein and malted with postage prepaid. Notices delivered by United States Express Mall or overnight courier that guarantees next day delivery shall be deemed given 24 hours after delivery of the same to the Postal Service or courier. Notices transmitted by facsimile transmission or similar means shall be deemed delivered upon telephone confirmation of receipt (confirmation report from fax machine is sufficient), provided a copy is also delivered via delivery or mall. If notice is received on a Saturday, Sunday or legal holiday. it shalt be deemed received on the next business day. 24. Waivers. (a) No waiver by Lessor of the Default or Breach of any term, covenant or condition hereof by Lessee, shall be deemed a waiver of any other term, covenant or condition hereof, or of any subsequent Default or Breach by Lessee of the same or of any other term, covenant or condition hereof. Lessor's consent to, or approval of, any act shall not be deemed to render unnecessary the obtaining of Lessor's consent to, or approval of, any subsequent or similar act by Lessee, or be construed as the basis of an estoppel to enforce the provision or provisions of this Lease requiring such consent. (b) The acceptance of Rent by Lessor shall not be a waiver of any Default or Breach by Lessee. Any payment by Lessee may be accepted by Lessor on account of moneys or damages due Lessor, notwithstanding any qualifying statements or conditions made by Lessee in connection therewith, which such statements and/or conditions shall be of no force or effect whatsoever unless specifically agreed to in writing by Lessor at or before the time of deposit of such payment. (c) THE PARTIES AGREE THAT THE TERMS OF THiS LEASE SHALL GOVERN WITH REGARD TO ALL MATTERS RELATED THERETO AND HEREBY WAIVE THE PROVISIONS OF ANY PRESENT OR FUTURE STATUTE TO THE EXTENT THAT SUCH STATUTE IS INCONSISTENT WITH THIS LEASE. 25. Disclosures Regarding The Nature of a Real Estate Agency Relationship. (a) When entering into a discussion with a real estate agent regarding a real estate transaction, a Lessor or Lessee should from the outset understand what type of agency relationship or representation it has with the agent or agents in the transaction. Lessor and Lessee acknowledge being advised by the Brokers in this transaction, as follows: (I) rssor's Agent. A Lessor's agent under a listing agreement with the Lessor acts as the agent for the Lessor only. A Lessor's agent or subagent has the following affirmative obllgations: To the Lesser: A fiduciary duty of utmost care, integrity, honesty, and loyalty in dealings with the Lessor. To the Lessee and the Lessor: a. Diligent exercise of reasonable skills and care in performance of the agent's duties. b. A duty of honest and fair dealing and good faith. c. A duty to disclose all facts known to the agent materially affecting the value or desirability of the property that are not known to, or within the diligent attention and observation of, the Parties. An agent is not obligated to reveal to either Party any confidential Information obtained from the other Party which does not involve the affirmative dulles set forth above. (ii) Lessee's Agen . An agent can agree to act as agent For the Lessee only. In these situations, the agent is not the Lessor's agent, even if by agreement the agent may receive compensation for services rendered, either in full or in part from the Lessor. An agent acting only for a Lessee has the following affirmative obligations. To the Lessee: A fiduciary duty of utmost care, Integrity, honesty, and loyalty in dealings with the Lessee. To the Lessee and the Lessor: a. Diligent exercise of reasonable skills and care In performance of the agent's dulles. b. A duty of honest and fair dealing and good faith. c. A duty to disctose all facts known to the agent materially affecting the value or desirability of the property that are not known to, or within the diligent attention and observation of, the Parties. An agent is not obligated to reveal to either Party any confidential information obtained from the other Party which does not involve the affirmative duties set forth above. (iii) A - Re.r:sentin. Both Lessor an Lessee. A real estate agent, either acting directly or through one or more associate licenses, can legally be the agent of both the Lessor and the Lessee in a transaction, but only with the knowledge end consent of both the Lessor and the Lessen. In a dual agency situation, the agent has the following affirmative obligations to both the Lessor and the Lessee: a. A fiduciary duty of utmost care, integrity, honesty and loyalty in the dealings with either Lessor or tho Lessee. b. Other dulles to the Lessor and the Lessen as stated above In subparagraphs (I) or (it). In represenlirg both Lessor and Lessee, the agent may not without the express permission of the respective Party, disctose to the other Party that the Lessor will accept rent In an amount less than that Indicated in the listing or that the Lessee Is willing to pay a higher rent than that offered. The above duties of the agent in a real estate transaction do not relieve a Lessor or Lessee from the responsibility to protect their own interests. Lessor and Lessee should carefully read all agreements to assure that they adequately express their understanding of the transaction. A real estate agent Is a person qualified to advise about real estate. If legal or tax advice is desired, consult a competent professional. (b) Brokers have no responsiblllty with respect to any default cr preach hereof by either Party. The Parties agree that no lawsuit or other legal proceeding involving any breach of duty, error or omission relating to this Lease may be brought against Broker more than one year after the Start Date and that the liability (including court costs and attorneys' fees), of any Broker with respect to any such lawsuit and/or legal proceeding shall not exceed tho fee received by such Broker pursuant to this Lease; provided, however, that the foregoing limitation on each Brokers liability shall not be applicable to any gross negligence or willful misconduct of such Broker. (c) Lessor and Lessee agree to identify to Brokers as "Confidential" any communication or Information given Brokers that is considered by such Party to be confidential. 26, No Right To Holdover. Lessee has no right to retain possession of the Premises or any part thereof beyond the expiration or termination of PAGE 13 OF 17 INITIALS ©2001 - AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM STG-15.4112E INITIALS this Lease. In the event that Lessee holds over, then the Base Rent shall be Increased to 150% of the Base Rent applicable Immediately preceding the expiration or termination. Nothing contained herein shall be construed as consent by Lessor to any holding over by Lessee. 27. Cumulative Remedies. No remedy or election hereunder shall be deemed exclusive but shall, wherever possible, be cumulative with all other remedies at law or in equity. 28. Covenants and Conditions; Construction of Agreement. All provisions of this Lease to be observed or performed by Lessee are both covenants and conditions. In construing this Lease, sll headings and titles are for the convenience of the Parties only and shall not be considered a part of this Lease. Whenever required by the context, the singular shall include the plural and vice versa. This Lease shall not be construed as If prepared by one of the Parties, but rather according to its fair meaning es a whole, as if both Parties had prepared it. 29. Binding Effect; Choice of Law. This Lease shall be binding upon the Parties, their personal representatives, successors and assigns and be governed by the laws of the State In which the Premises are located. Any litigation between the Parties hereto concerning this Lease shall be Initiated in the county in which the Premises are located. 30. Subordination; Attornment; Non -Disturbance. 30.1 Subordination. This Lease and any Option granted hereby shall be subject and subordinate to any ground lease, mortgage, deed of trust, or other hypothecation or security device (collectively, "Security Device"), now or hereafter placed upon the Premises, to any and all advances made on the security thereof, and to all renewals, modifications, and extensions thereof. Lessee agrees that the holders of any such Security Devices (in this Lease together referred to as "Lender") shall have no liability or obligation to perform any of the obligations of Lessor under this Lease. Any Lender may elect to have this Lease and/or any Option granted hereby superior to the Ilen of its Security Device by giving written notice thereof to Lessee, whereupon this Lease and such Options shall be deemed prior to such Security Device, notwithstanding the relative dates of the documentation or recordatlon thereof. 30.2 Attornment. In the event that Lessor transfers title to the Premises, o- the Premises are acquired by another upon the foreclosure or termination of a Security Devise to which this Lease Is subordinated (I) Lessee shall, subject to the non -disturbance provisions of Paragraph 30.3, attorn to such new owner, and upon request, enter into a new lease, containing all of the terms and provisions of this Lease, with such new owner for the remainder of the term hereof, or, at the election of the new owner, this Lease will automatically become a new lease between Lessee and such new owner, and (II) Lessor shall thereafter be relieved of any further obligations hereunder and such new owner shall assume all of Lessor's obligations, except that such new owner shall not: (a) be liable for any act or omission of any prior lessor or with respect to events occurring prior to acquisition of ownership; (b) be subject to any offsets or defenses which Lessee might have against any prior lessor, (c) be bound by prepayment of more than one month's rent, or (d) be liable for the return of any security deposit paid to any prior lessor which was not paid or credited to such new owner. 30.3 Non -Disturbance. With respect to Security Devices entered into by Lessor after the execution of This Lease, Lessee's subordination of this Lease shall be subject to receiving a commercially reasonable nondisturbance agreement (a "Non -Disturbance Agreement") from the Lender which Non -Disturbance Agreement provides That Lessee's possession of he Premises, and this Lease, Including any options to extend the term hereof, will not be disturbed so long as Lessee is not in Breach hereof and adorns to the record owner of the Premises. Further, within 60 days after the execution of this Lease, Lessor shall, if requested by Lessee, use Its commercially reasonable efforts to obtain a Norm -Disturbance Agreement from the holder of any pre-existing Security Device which Is secured by the Premises. In the event that Lessor is unable to provide the Non -Disturbance Agreement within said 60 days, then Lessee may, at Lessee's option. directly contact Lender and attempt to negotiate for the execution and delivery of a Non -Disturbance Agreement. 30.4 Self -Executing. The agreements contained In this Paragraph 30 shall be effective without the execution of any further documents; provided, however, that, upon written request from Lessor or a Lender In connection with a sale, financing or refinancing of the Premises, Lessee and Lessor shalt execute such further writings as may be reasonably required to seaarately document any subordination, allornment and/or Non -Disturbance Agreement provided for herein. 31. Attorneys' Fees. If any Party or Broker brings an action or proceeding involving the Premises whether founded In tori, contract or equity, or to declare rights hereunder, the Prevailing Party (as hereafter defined) In any such proceecing, action, or appeal thereon, shall be entitled to reasonable attorneys' fess. Such fens may be awarded in the sane suit or recovered in a separate suit, whether or not such action or proceeding Is pursued to decision or Judgment. The term, "Prevailing Party" shall include, without limitation, a Party or Broker who substantially obtains or defeats the relief sought, as the case may be, whether by compromise, settlement, judgment, or the abandonment by the other Party or Broker of its claim or defense. Tho attorneys' fens award shall not bo computed In accordance with any court fee schedule, but shall bo such as to fully reimburse all attorneys' fees reasonably incurred. In addition, Lessor shall bo entitled to attorneys' fees, costs and expenses Incurred in the preparation and service of notices of Default and consultations In connection therewith, whether or not e legal action Is subsequently commenced In connection will- such Default or resulting Breach ($200 is a reasonable minimum per occurrence for such services and consultation). 32. Lessor's Access; Showing Premises; Repairs. Lessor and Lessor's agents shall have the right to enter the Premises at any time, in the case of an emergency, and otherwise at reasonabte times after reasonable prior notice for the purpose of showing the same to prospective purchasers, lenders, or tenants, and making such alterations, repairs, improvements or additions to the. Premises as Lessor may deem necessary or desirable and the erecting, using and maintaining of utilities, services, pipes and conduits through the Premises and/or other premises as long as there is no material adverse effect to Lessee's use of the Premises. All such activities shall be without abatement of rent or liability to Lessee. 33. Auctions. Lessee shall not conduct, nor permit to be conducted, any auction upon the Premises without Lessor's prior written consent. Lessor shall not be obligated to exercise any standard of reasonableness in determining whether to permit an auction, 34. Signs. Lessor may place on the Premises ordinary "For Sale" signs at any time and ordinary "For Lease" signs during the last 6 months of the term hereof. Except for ordinary "for sublease" signs, Lessee shall not place any sign upon the Premises without Lessor's prior written consent, Ali signs must comply with all Applicable Requirements. 35. Termination; Morgor. Unless specifically slated otherwise In writing by Lessor, the voluntary or other surrender of thls Lease by Lessee, the mutual termination or cancellation hereof, or a termination hereof by Lessor for Breach by Lessee, shall automatically terminate any sublease or lesser estate In the Premises; provided, however, that Lessor may elect to continue any one or all existing subtenancies. Lessor's failure within 10 days following any such event to elect to the contrary by written notice to the holder of any such lesser Interest, shall constitute Lessor's election to have such event constitute the termination of such interest. 36. Consents. Except as otherwise provided herein, wherever in thls Lease the consent of a Party is required to an act by or for the other Party, such consent shall not be unreasonably withheld or delayed. Lessor's actual reasonable costs and expenses (Including but not limited to architects', attorneys', engineers' and other consultants' fees) Incurred in the consideration of, or response to, a request by Lessee for any Lessor consent, including but not limited to consents to an assignment, a subletting or the presence or use of a Hazardous Substance, shall be paid by Lessee upon receipt of an Invoice and supporting documentation therefor. Lessor's consent to any act, assignment or subletting shall not constitute an acknowledgment that no Default or Breach by Lessee of this Lease exists, nor shall such consent be deemed a waiver of any then existing Default or PAGE14OF17 INITIALS ©2001 - AIR COMMERCIAL REAL ESTATE ASSOCIATION INITIALS FORM STG-15-4/12E Breach, except as may be otherwise specifically stated in writing by Lessor at the time of such consent. The failure to specify herein any particular condition to Lessor's consent shall not preclude the imposttion by Lessor at the time of consent of such further or other conditions as are then reasonable with reference to the particular matter for which consent Is being glven. In the event that either Party disagrees with any determination made by the other hereunder and reasonably requests the reasons for such determination, the determining party shall furnish Its reasons In writing and In reasonable detail within 10 business days following such request. 37. Guarantor. 37.1 Execution, The Guarantors, if any, shall each execute a guaranty In the form most recently published by the AIR Commercial Real Estate Association. 37.2 Default. It shall constitute a Default of the Lessee if any Guarantor falls or refuses, upon request to provide: (a) evidence of the execution of the guaranty, including the authority of the party signing on Guarantor's behalf to obligate Guarantor, and In the case of a corporate Guarantor, a certified copy of a resolution of its board of directors authorizing the making of such guaranty, (b) current financial statements, (c) an Estoppel Certificate, or (d) written confirmation that the guaranty Is still In effect. 39. Quiet Possession. Subject to payment by Lessee of the Rent and performance of all of the covenants, conditions and provisions on Lessee's part to be observed and performed under this Lease, Lessee shall have quiet possession and quiet enjoyment of the Premises during the term hereof. 39. Options. if Lessen Is granted an Option, as defined betow, then the following provisions shall apply: 39.1 Definition. "Option" shall mean: (a) the right to extend or reduce the term of or renew this Lease or to extend or reduce the term of or renew any lease that Lessen has on other property of Lessor; (b) the right of first refusal or first offer to lease either the Premises or other property of Lessor; (c) the right to purchase, the right of first offer to purchase or the right of first refusal to purchase the Premises or other property of Lessor. 39.2 Options Personal To Original Lessee. Any Option granted to Lessee In this Lease is personal to the original Lessee, and cannot be assigned or exercised by anyone other than said original Lessee and only while the original Lessee is in full possession of the Premises and, if requested by Lessor, with Lessee certifying that Lessee has no Intention of thereafter assigning or subletting. 39.3 Mull!pie Options. In the evert that Lessee has any multiple Options to extend or renew this Lease, a later Option cannot be exercised unless the prior Options have been validly exercised. 39.4 Effect of Default on Options. (a) Lessee shall have no right to exercise an Option: (I) during the period commencing with the giving of any notice of Default and contlnrilrtg until said Default is cured, (ii) during the period of time any Rent is unpaid (without regard to whether notice thereof is given Lessee), (iII) during the lime Lessee Is in Breach of this Lease, or (iv) In the event that Lessee has been given 3 or more notices of separate Default, whether or not the Defaults are cured, during the 12 month period immediately preceding the exercise of the Option. (b) The period of time within which an Option may be exorcised shall not be extended or enlarged by reason of Lessee's inability to exercise an Option because of the provisions of Paragraph 39,4(a). (c) An Option shall temilnate and be of no further force or effect, notwithstanding Lessee's due and timely exercise of the Option, if, after such exercise and prior to the commencement of the extended tenn or completion of the purchase, (i) Lessee fails to pay Rent for a period of 30 days after such Rent becomes due (without any necessity of Lessor to give notice thereof), or (11) if Lessee commits a Breach of this Lease. 40. Multiple Buildings. If the Premises are a part of a group of buildings controlled by Lessor, Lessee agrees that it will abide by and conform to all reasonable rules and regulations which Lessor may make from time to time for the management, safety, and care of said properties, including the care and cleanliness of the grounds and including the parking, loading and unloading of vehicles, and to cause its employees, suppliers, shippers, customers, contractors and Invitees to so abide and conform. Lessee also agrees to pay its fair share of common expenses Incurred in connection with such rules and regulations. 41. Security Measures. Lessee hereby acknowledges that the Rent payable to Lessor hereunder does not include the cost of guard service or other security measures, and that Lessor shall have no obligation whatsoever to provide same. Lessee assumes all responsibility for the protection of the Premises, Lessee, its agents and Invitees and their property from the acts of third parties. 42. Reservations. Lessor reserves to Itself the right, from time to time, to grant, without the consent or Joinder of Lessee, such easements, rights and dedications that Lessor deems necessary, and to cause the recordation of parcel maps and restrictions, so long as such easements, rights, dedications, maps and restrictions do not unreasonably interfere with the use of the Premises by Lessee. Lessee agrees to sign any documents reasonably requested by Lessor to effectuate any such easement rights, dedication, map or restrictions. 43. Performance Under Protest. if at any time a dispute shall arise as to any amount or sum of money to be paid by one Party to the other under the provisions hereof, the Party against whom the obligation to pay Iho money Is asserted shall have the right to make payment "under protost" and such payment shall not be regarded as a voluntary payment and there shall survive the right on the part of said Party to institute suit for recovery of such sum. If it sha',I be adjudged that there was no legal obligation on the part of said Party to pay such suns or any part thereof, said Party shall be entitled la recover such sum or so much thereof as it was not legally required to pay. A Party who does not Initiate suit for the recovery of sums paid "under protest" within 6 months shall be deemed to have waived Its right to protest such payment. 44. Authority; Multiple Parties; Execution. (a) if either Party hereto Is a corporation, trust, limited liability company, partnership, or similar entity, each individual executing this Lease on behalf of such entity represents and warrants that he or she is duly authorized to execute and deliver this Lease cn Its behalf. Each Party shall, within 30 days after request, deliver to the other Party satisfactory evidence of such authority. (b) If this Lease is executed by more Than one person or entity as "Lessee", each such person or entity shall be Jointly and severally liable hereunder. it is agreed that any one of the named Lessens shall be empowered to execute any amendment to this Lease, or other document ancillary thereto and bind all of the named Lessees, and Lessor may rely on the same as if ail of the named Lessees had executed such document. (c) This Lease may be executed by the Parties in counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same Instrument. 45. Conflict. Any conflict between the printed provisions of this Lease and typewritten or handwritten provisions shall be controlled by the typewritten or handwritten provisions. 46. Offer. Preparation of this Lease by either Party or their agent and submission of same to the other Party shall not be deemed an offer to lease to the other Party. This Lease Is not Intended to be binding until executed arid delivered by all Parties hereto. 47. Amendments. This Lease may be modified only In writing, signed by the Parties In Interest at the time of the modification. As long as they do not materially change Lessee's obligations hereunder, Lessee agrees to make such reasonable non•monetary modifications to this Lease as may be reasonably required by a Lender in connection with the obtaining of normal financing or refinancing of the Premises, 48. Waiver of Jury TrIaI. THE PARTIES HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO TRIAL BY JURY IN ANY ACTION OR PAGE 15 OF 17 INITIALS ©2001 - AIR COMMERCIAL REAL ESTATE ASSOCIATION INITIALS FORM STG-15-4112E PROCEEDING INVOLVING THE PROPERTY OR ARISING OUT OF THIS AGREEMENT. 49. Arbitration of Disputes. An Addendum requiring the Arbitration of disputes between the Parties and/or Brokers arising out of this Lease 0 Is RI Is not attached to this Lease. 50. Americans with Disabilities Act. Since compliance with the Americans with Dfsabfltlies Act (ADA) is dependent upon Lessee's speciflc use of the Premises, Lessor makes no warranty or representation as to whether or not the Premises comply with ADA or any similar Legislation. In the event that Lessee's use of the Premises requires modifications or additions to the Premises In order to be in ADA compliance, Lessee agrees to make any such necessary modifications and/or additions at Lessee's expense. LESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM AND PROVISION CONTAINED HEREIN, AND BY THE EXECUTION OF THIS LEASE SHOW THEIR INFORMED AND VOLUNTARY CONSENT THERETO. THE PARTIES HEREBY AGREE THAT, AT THE TIME THIS LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE COMMERCIALLY REASONABLE AND EFFECTUATE THE INTENT AND PURPOSE OF LESSOR AND LESSEE WITH RESPECT TO THE PREMISES. ATTENTION; NO REPRESENTATION OR RECOMMENDATION IS MADE BY THE AIR COMMERCIAL REAL ESTATE ASSOCIATION OR BY ANY BROKER AS TO THE LEGAL SUFFICIENCY, LEGAL EFFECT, OR TAX CONSEQUENCES OF THIS LEASE OR THE TRANSACTION TO WHICH IT RELATES. THE PARTIES ARE URGED TO: 1. SEEK ADVICE OF COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS LEASE. 2. RETAIN APPROPRIATE CONSULTANTS TO REVIEW AND INVESTIGATE THE CONDITION OF THE PREMISES. SAID INVESTIGATION SHOULD INCLUDE BUT NOT BE LIMITED TO: THE POSSIBLE PRESENCE OF HAZARDOUS SUBSTANCES, THE ZONING OF THE PREMISES, THE STRUCTURAL INTEGRITY, THE CONDITION OF THE ROOF AND OPERATING SYSTEMS, AND THE SUITABILITY OF THE PREMISES FOR LESSEE'S INTENDED USE. WARNING; IF THE PREMISES IS LOCATED IN A STATE OTHER THAN CALIFORNIA, CERTAIN PROVISIONS OF THE LEASE MAY NEED TO BE REVISED TO COMPLY WITH THE LAWS OF THE STATE IN WHICH THE PREMISES IS LOCATED. The parties hereto have executed this Lease et the place and on the dates specified above their respective slgnalures. Executed at: Rainbow, California Executed at: Temecula, California On: June , 2012 On: June , 2012 By LESSOR: By LESSEE: Richard B. Gurrola and Valerie Gurrola, Temecula Marine Center, Inc. Trustees of the Gurrola Family Trust By: Name Printed: Richard A. Gurrola Title: Trus Lee By: Name Printed: Michael 3. Smith Title: By: BY Name Printed: Valerie. Gurrola Name Printed: Christine M. Smith Title: Trustee Address: 5590 Rainbow Creek Road Rainbow, CA 92028 Title: Address: Telephone: (7 60) 728-4339 Telephone: ( ) Facsimile: ( ) Facsimile: ( ) Email: richgurroI a@yahoo. corn Email: Email: Email: Federal ID No. Federal ID No. BROKER: BROKER: INITIALS PAGE 16 OF 17 INITIALS ©2001 - AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM STG-18-0/12E Aft: All: Title: Title: Address: Address: Telephone:( ) Tefephone:() Facsimile:( ) Facsimile:( ) Email: Email: Federal ID No. Federal ID No. Broker/Agent DRE License #: Broker/Agent DRE License #: NOTICE: These forms are often modified to meet changing requirements of raw and industry needs. Always write or call to make sure you are utilizing the most current form: AIR Commercial Real Estate Association, 800 W 6th Street, Suite 800, Los Angeles, CA 90017. Telephone No. (213) 887-8777. Fax No.: (213) 687-8616. © Copyright 2001 - By AIR Commercial Real Estate Association. All rights reserved. No part of these works may be reproduced In any form without permission In writing. PAGE 17 OF 17 INITIALS ©2001 - AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM STG-16-4112E INITIALS .1i 0 D u C E MULTI -TENANT LEASE - GROSS DATED MAY 25, 2012 51. Notwithstanding anything to the contrary set forth above in paragraphs 4.3 and 11 above, Lessee shall not be required to pay for any utilities, services and/or association fees which have not been previously charged to, or paid for by, Lessee. 52. Early Termination Right: Lessee shall have the right to terminate this Lease upon thirty days written notice to Lessor, which notice may be given no sooner than October 2, 2012, or on the date that Lessor transfers title to the property to the City of Temecula, whichever first occurs." In the event of any conflict between the provisions of the Addendum and the Lease, the provisions of this Addendum shall control. Initials Exhibit "F" [Form of Tenant Estoppel Certificate] 11086-016611464915v1.doc , 2012 TENANT ESTOPPEL CERTIFICATE City of Temecula 41000 Main Street Post Office Box 1033 Temecula, California 92589-1033 Attention: Greg Butler, City Engineer/Director of Public Works Re: AIR Commercial Real Estate Association Standard Industrial Commercial Single - Tenant Lease -- Gross dated May 25, 2012 by and between Richard B. Gurrola and Valerie Gurrola, Trustees of the Gurrola Family Trust and Temecula Marine Center, Inc. Regarding Property Located at 27495 Enterprise Circle West, in the City of Temecula, California and identified as Riverside County Tax Assessor's Parcel Number 921-480-013 To the City of Temecula, a municipal corporation: Richard B. Gurrola & Valerie Gurrola, Trustees of the Gurrola Family Trust Under Declaration Dated Dec. 27, 2001 (referred to below collectively as "Landlord") have informed Temecula Marine Center, Inc., a California Corporation that the Record Owners Richard B. Gurrola & Valerie Gurrola, Trustees of the Gurrola Family Trust Under Declaration Dated Dec. 27, 2001, Robert A. Gurrola, Gary S. Gurrola, and Richard B. Gurrola II and the City of Temecula, a municipal corporation ("City") seek to enter into a certain Purchase and Sale Agreement and Joint Escrow Instructions pursuant to which the City will purchase from the Record Owners that certain property located at 27495 Enterprise Circle West, in the City of Temecula, California and identified as Riverside County Tax Assessor's Parcel Number 921- 480-013 (the "Property"). Temecula Marine Center, Inc., a California Corporation ("Tenant") certifies to the City of Temecula as follows in connection with the Property: A. The Lease between the Landlord and Tenant for the Premises described on Schedule A attached hereto consists only of the documents identified on items 1 and 2 of Schedule A ("Schedule A"). B. The Lease is in full force and effect and has not been modified, supplemented, or amended except as indicated on item 3 of Schedule A. C. There is no unresolved dispute between Landlord and Tenant, and based upon the actual knowledge of Tenant, Landlord and Tenant are not in default under the Lease. D. Tenant does not claim any offsets or credits against rents payable under the Lease. E. Unless disclosed on item 5 of Schedule A attached hereto and incorporated herein by this reference, Tenant has not paid to Landlord a security or other deposit with respect to the Lease. -1- 11086-0166 1400481 1- 11086-016611400481 v2.doc F. Tenant has fully paid the rent for the Premises through the month of May 2012, and the current base rent under the Lease is $5,454 per month due on the 1st of each month. G. Tenant has not paid any monthly rentals in advance. H. The term of the Lease will terminate on the date indicated on item 6 of Schedule A. I. Tenant has no right of first refusal or option to purchase the Property, or any part thereof, or to lease space in addition to the premises demised under the Lease, or to extend the term of the Lease. J. There are no written or oral agreements between Tenant and Landlord that would require Landlord to compensate Tenant at the termination of the Lease for any leasehold improvements made by Tenant to the Premises or the Property. Under the Lease, the Landlord is entitled to any and all compensation for any leasehold improvements, including any improvements identified by the Lease as Alterations and Utility Installations made by Tenant to the Premises or the Property. The undersigned Tenant acknowledges and agrees that the City will be relying on this certificate in connection with the City's acquisition of the Property. The matters set forth above are true and correct as of the above date of this certificate. Tenant: Temecula Marine Center, Inc., a California corporation Dated: By: Name: Title: By: Name: Title: -2- 11086-0166\ 1400481 v2.doc SCHEDULE A to Tenant Estoppel Certificate 1. Lease — AIR Commercial Real Estate Association Standard Industrial Commercial Single -Tenant Lease -- Gross dated May 25, 2012 by and between Richard B. Gurrola and Valerie Gurrola, Trustees of the Gurrola Family Trust and Temecula Marine Center, Inc. Tenant Temecula Marine (DID) or (DID NOT) execute the Lease. Landlord (DID) or (DID NOT) execute the Lease. 2. The Lease consists of only the following document, a true and correct copy of which is attached as Exhibit "1" hereto: a. AIR Commercial Real Estate Association Standard Industrial Commercial Single -Tenant Lease -- Gross dated May 25, 2012 by and between Richard B. Gurrola and Valerie Gurrola, Trustees of the Gurrola Family Trust and Temecula Marine Center, Inc. b. Parties and Premises Demised Under Lease: Landlord: Richard B. Gurrola & Valerie Gurrola, Trustees of the Gurrola Family Trust Under Declaration Dated Dec. 27, 2001 Tenant: Temecula Marine Center, Inc. Premises: 6,818 square feet of the 9,916 square foot industrial building, including 12 unreserved parking spaces on the real property commonly known as 27495 Enterprise Circle West, Temecula, California, and identified as Assessor's Parcel Number 921-480-013 ("Property") 3. Modifications and/or Amendments of Lease None 4. Rent for Premises a. Original Base Rent: Tenant commenced paying the original $5,454 base monthly rent on October 1, 2011 due the first of each month. b. Current Monthly Rent: $5,454 per month due the first of each month. c. Rent Increase: Base Rent shall increase to $5,618 effective October 1, 2012 5. Security Deposit: $0.00 -3- 11086.0166\1400481 v2.doc 6. Term of Lease: a. Commencement Date: October 1, 2011 b. Termination Date: September 30, 2013 7. Right of First Refusal or Option: a. To Lease (describe): None. b. To Purchase (describe): None. c. To Extend Original Term (describe): None. 8. Tenant Improvements: There are no written agreements between Tenant and Landlord that would require Landlord to compensate Tenant at the termination of the Lease for any leasehold improvements made by Tenant to the Premises or the Property. Under the Lease, the Landlord is entitled to any and all compensation for any leasehold improvements, including any improvements identified by the Lease as Alterations and Utility Installations made by Tenant to the Premises or the Property. -4- 11086-016611400481 v2.doc AIR AIR COMMERCIAL REAL ESTATE ASSOCIATION STANDARD INDUSTRIAL/COMMERCIAL SINGLE -TENANT LEASE -- GROSS (DO NOT USE THIS FORM FOR MULTI -TENANT BUILDINGS) 1. Baste Provisions ("Basic Provisions"). 1.1 Parties: This Lease ("Lease"), dated for reference purposes onty May 25, 2012 is made by and between Richard B. Gurrola and Valerie Gurrola, Trustees of the Gurrola Family Trust ("Lessor") and Temecula Marine Center, Inc. ("Lessee"), (collectivety the "Parties," or individually a "Party"). 1.2 Premises: That certain real property, Including all improvements therein or to be provided by Lessor under the terms of this Lease, and commonly known as 27495 Enterprise Circle West, Temecula located in the County of Riverside , State of California , and generally described as (describe briefly the nature of the property and, If applicable, the "Project", if the property is located within a Project) 6,818 square feet of a 9,916 square foot industrial building, including 12 unreserved parking spaces. Lessee acknowledges that all existing improvements, including "Lessee Owned Alterations" belong to the Lessor on the Commencement Date . ("Premises"). (See also Paragraph 2) 1.3 Term: Two years and no months ("Original Term") commencing Oct ober 1, 2011 ("Commencement Date") and ending September 30, 2013 ("Expiration Date"). (See also Paragraph 3) 1.4 Early Possession: If the Premises are available Lessee may have non-exclusive possession of the Premises commencing Lessee is already in possession ("Early Possession Date"). (See also Paragraphs 3.2 and 3.3) 1.5 Base Rent: $5, 454.00 per month ("Base Rent"), payable on the first day of each month commencing June, 2012 . (See also Paragraph 4) P1 If this box is checked, there are provisions in this Lease for the Base Rent to be adjusted. See Paragraph 1.6 1.6 Base Rent and Other Monies Paid Upon Execution: (a) Base Rent: $5, 454.00 for the period June, 2012. The Base Rent shall increase to $5,618 effective October 1, 2012 (b) Security Deposit: $-0- ("Security Deposit"). (See also Paragraph 5) (c) Association Fees: $ for the period (d) Other: $ for (e) Total Due Upon Execution of this Lease: $5, 454 . 00 1.7 Agreed Use: Boat repair, sales and service (See also Paragraph 6) 1.8 insuring Party: Lessor Is the "Insuring Party". The annual "Base Premium" is $ (See also Paragraph 8) 1.9 Real Estate Brokers: (See also Paragraph 15 and 25) (a) Representation: The following real estate brokers (the "Brokers") and brokerage relationships exist In this transaction (check applicable boxes): 0 not applicable represents Lessor exclusively ("Lessor's Broker"); 0 not applicable represents Lessee exclusively ("Lessee's Broker"); or PAGE 1 OF 17 1NITiALS INITIALS 02001 -AIR COMMERCIAL REAL ESTATE ASSOCIATION EXHIBIT "1" FORM STG•15.4/12E ❑ not applicable _ represents both Lessor and Lessee ("Dual Agency"). (b) Payment to Brokers: Upon execution and delivery of this Lease by both Parties, Lessor shall pay to the Brokers for the brokerage services rendered by the Brokers the fee agreed to In the attached separate written agreement or if no such agreement Is attached, the sum of —0-- or % of the total Base Rent payable for the Original Term, the sum of or of the total Base Rent payable during any period of time that the Lessee occupies the Premises subsequent to the Original Term, and/or the sum of or % of the purchase price in the event that the Lessee or anyone affiliated with Lessee acquires from Lessor any rights to the Premises. 1.10 Guarantor. The obligations of the Lessee under this Lease are to be guaranteed by ("Guarantor"). (See also Paragraph 37) 1.11 Attachments. Attached hereto are the following, all of which constitute a part of this Lease: ❑ an Addendum consisting of Paragraphs through ❑ a plot plan depicting the Premises; ❑ a current set of the Rules and Regulations; ❑ a Work Letter; ❑ other (specify): 2. Premises. 2.1 Letting. Lessor hereby leases to Lessee, and Lessee hereby leases from Lessor, the Premises, for the term, at the rertal, and upon all of the terms, covenants and conditions set forth in this Lease. While the approximate square footage of the Premises may have been used In the marketing of the Premises for purposes of comparison, the Base Rent stated herein Is NOT tied to square footage and is not subject to adjustment should the actual size be determined to be different. Note: Lessee Is advised to verify the actual size prior to executing this Lease. 2.2 Condition. Lessor shall deliver the Premises to Lessee broom clean and free of debris on the Commencement Date or the Early Possession Date, whichever first occurs ("Start Date"), and, so long as the required service contracts described in Paragraph 7.1(b) below are obtained by Lessee and in effect within thirty days following the Start Date, warrants that the existing electrical, plumbing, fire sprinkler, lighting, heating, ventilating and air conditioning systems ("HVAC"), loading doors, sump pumps, If any, and all other such elements in the Premises, other than those constructed by Lessee, shall be in good operating condition on said date and that the surface and structural elements of the roof, bearing walls and foundation of any buildings on the Premises (the "Building") shall be free of material defects, and that the Unit does not contain hazardous levels of any mord or fungi defined as toxic under applicable state or federal law. if a non-compliance with said warranty exists as of the Start Dale, or if one of such systems or elements should malfunction or fail w'thin the appropriate warranty period, Lessor shall, as Lessor's sole obligation with respect to such matter, except as otherwise provided in this Lease, promptly after receipt of written notice from Lessee setting forth with specificity the nature and extent of such non-compilance, malfunction or failure, rectify same at Lessor's expense. The warranty periods shall be as follows: (i) 6 months as to the HVAC systems, and (II) 30 days as to the remaining systems and other elements of the Building. If Lessee does not give Lessor the required notice within the appropriate warranty period, correction of any such noncompliance, malfunction or failure shall be the obligation of Lessee at Lessee's sole cost end expense, except for the roof, foundations, and bearing walls which are handled as provided in paragraph 7. 2,3 Compliance. Lessor warrants that to the best of its knowledge the improvements on the Premises comply with the building codes, applicable laws, covenants or restrictions of record, regulations, and ordinances ("Applicable Requirements") that were in effect at the time that each improvement, or porion thereof, was constructed. Said warranty does not apply to the use to which Lessee will put the Premises, modifications which may be required by the Americans with Disabilities Act or any similar laws as a result of Lessee's use (see Paragraph 50), or to any Alterations or Utility Installations (as defined in Paragraph 7.3(a)) made or to be made by Lessee. NOTE: Lessee Is responsible for determining whethor or not the Applicable Requirements, and especially the zoning, are appropriate for Lessee's Intended use, and acknowledges that past uses of the Promises may no longer be allowed. If the Premises do not comply with said warranty, Lessor shall, except as otherwise provided, promptly after receipt of written not'ce from Lessee setting forth with specificity the nature and extent of such non-compliance, rectify the same at Lessor's expense. If Lessee does not give Lessor written notice of a non-compliance with this warranty within 6 months following the Start Date, correction of that non-compliance shall he the obligation of Lessee at Lessee's sole cost and expense. If the Applicable Requirements are hereafter changed so as to require during the term of this Lease the construction of an addition to or an alteration of the Premises and/or Building, the remedlatlon of any Hazardous Substance, or the reinforcement or other physical modification of the Unit, Premises and/or Building ("Capital Expenditure"), Lessor and Lessee shall allocate the cost of such work as follows: (a) Subject to Paragraph 2.3(c) below, if such Capital Expenditures are required as a result of the specific and unique use of the Premises by Lessee as compared with uses by tenants in general, Lessee shall be fully responsible for the cost thereof. provided, however that if such Capital Expenditure Is required during the last 2 years of this Lease and the cost thereof exceeds 6 months' Base Rent, Lessee may Instead terminate this Lease unless Lessor notifies Lessee, in writing, within 10 days after receipt of Lessee's termination notice that Lessor has elected to pay the difference between the actual cost thereof and an amount equal to 6 months' Base Rent. If Lessee elects termination, Lessee shall immediately cease the use of the Premises which requires such Capital Expenditure and deliver to Lessor written notice specifying a termination date at least 90 days thereafter. Such termination date shall, however, in no event be earlier than the last day that Lessee could legally utilize the Premises without commencing such Capital Expenditure. (b) If such Capital Expenditure Is not the result of the specific and unique use of the Premises by Lessee (such as, governmentally mandated seismic modlflcations), then Lessor shall pay for such Capital Expenditure and Lessee shall only be obligated to pay, each month during the remainder of the term of this Lease or any extension thereof, on the date that on which the Base Rent is due, an amount equal to 11144th of the portion of such costs reasonably attributable to the Premises. Lessee shall pay Interest on the balance but may prepay its obligation at any time. If, however, such Capital Expenditure is required during the last 2 years of this Lease or if Lessor reasonably determines that it is not economically feasible to pay Its share thereof, Lessor shall have the option to terminate this Lease upon 90 days prior written notice to Lessee unless Lessee notifies Lessor, In writing, within 10 days after receipt of Lessor's termination notice that Lessee will pay for such Capital Expenditure. If Lessor does not elect to terminate, and falls to tender Its share of any such Capital Expenditure, Lessee may advance such funds and deduct same, with Interest, from Rent PAGE 2 OF 17 INITIALS INITIALS ©2001 - AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM STG-15-4/12E until Lessor's share of such costs have been fully paid. If Lessee Is unable to finance Lessors share, or If the balance of the Rent due arid payable for the remainder of this Lease Is not sufficient to fully reimburse Lessee on an offset basis, Lessee shall have the right to terminate this Lease upon 30 days written notice 10 Lessor. (c) Notwithstanding the above, the provisions concerning Capital Expenditures are intended to apply only to non -voluntary, unexpected, and new Applicable Requirements. If the Capital Expenditures are Instead triggered by Lessee as a result of an actual or proposed change In use, change In intensity of use, or modification to (he Premises then, and In that event, Lessee shall either: (I) Immediately cease such changed use or intensity of use and/or take such other steps as may be necessary to eliminate the requirement for such Capital Expenditure, or (ii) complete such Capital Expenditure at its own expense. Lessee shall not, however, have any right to terminate this Lease. 2.4 Acknowledgements. Lessee acknowledges that: (a) it has been giver an opportunity to Inspect and measure the Premises, (b) it has been advised by Lessor and/or Brokers to satisfy Itself with respect to the slze and condition of the Premises (Including but not limited to the electrical, HVAC and fire sprinkler systems, security, environmental aspects, and compliance with Applicable Requirements and the Americans with Disabilities Act), and their suitability for Lessee's intended use, (c) Lessee has made such Investigation as It deems necessary with reference to such matters and assumes all responsibility therefor as the same relate to Its occupancy of the Premises, (d) it is not relying on any representation as to the size of the Premises made by Brokers or Lessor, (e) the square fcotage of the Premises was not material to Lessee's decision to lease the Premises and pay the Rent stated herein, and (f) neither Lessor, Lessor's agents, nor Brokers have made any oral or written representations or warranties with respect to said matters other than as set forth In this Lease. In addition, Lessor acknowledges that: (i) Brokers have made no representations, promises or warranties concerning Lessee's ability to honor the Lease or suitability to occupy the Premises, and (It) it Is Lessor's sole responsibility to investigate the financial capability and/or suitability of all proposed tenants. 2.5 Lessee as Prior Owner/Occupant. The warranties made by Lessor In Paragraph 2 shall be of no force or effect if Immediately prior to the Start Date Lessee was the owner or occupant of the Premises. In such event, Lessee shall be responsible for any necessary corrective work. 3. Term. 3.1 Term, The Commencement Date, Expiration Date and Original Torm of this Lease are as specified In Paragraph 1.3. 3.2 Early Possession, Any provision herein granting Lessee Early Possession of the Premises is subject to and conditioned upon the Premises being available for such possession prior to the Commencement Date. Any grant of Early Possession only conveys a non-exclusive right to occupy the Premises. If Lessee totally or partially occupies the Premises prior to the Commencement Date, the obligation to pay Base Rent shall be abated for the period of such Early Possession. All other terms of this Lease (including but not limited to the obligations to pay Real Property Taxes and Insurance premiums and to maintain the Premises) shall be In effect during such period. Any such Early Possession shall not affect the Expiration Date. 3.3 Delay In Possession. Lessor agrees to use its best commercially reasonable efforts to deliver possession of the Premises to Lessee by the Commencement Date. If, despite said efforts, Lessor Is unable to deliver possession by such date, Lessor shall not be subject to any liability therefor, nor shall such failure affect the validity of this Lease or change tho Exptralicn Date. Lessee shall not, however, be obligated to pay Rent or perform Its other obligations until Lessor delivers possession of the Premises and any period of rent abatement that Lessee would otherwise have enjoyed shall run from the date of delivery of possession and continue for a period equal to what Lessee would otherwise have enjoyed under the terms hereof, but minus any days of delay caused by the acts or omissions of Lessee. If possess on is not delivered within 80 days after the Commencement Date, as the same -nay be extended under the terms of any Work Letter executed by Parties, Lessee may, at Its option, by notice in writing within 10 days after the end of such 60 day period, cancel this Lease, In which event the Partles shall be discharged from alt obligations hereunder. If such written notice Is not received by Lessor within said 10 day period, Lessee's right to cancel shall terminate. If possession of the Premises is not delivered within 120 days after the Commencement Date, this Lease shall terminate unless other agreements aro reached between Lessor and Lessee, In writing. 3.4 Lessee Compliance. Lessor shall not be required to deliver possession of the Premises to Lessee until Lessee compiles with its obligation to provide evidence of Insurance (Paragraph 8.5). Pending delivery of such evidence, Lessee shall be required to perform all of Its obligations under this Lease from and after the Start Date, Including the payment of Rent, notwithstanding Lessor's election to withhold possession ponding receipt of such evidence of insurance. Further, If Lessee Is required to perform any other conditions prior to or concurrent with the Start Date, the Start Date shall occur but Lessor may elect to withhold possession until such conditions are satisfied. 4. Rent. 4.1. Rent Defined. All monetary obligations of Lessee to Lessor under the terms of thls Lease (except for the Security Deposit) are deemed to be rent ("Rent"). 4.2 Payment. . Lessee shall cause payment of Rent to be received by Lessor 1n lawful money of the United States, without offset or deduction (except as specifically permitted In this Lease), on or before the day on which it Is due. All monetary amounts shall be rounded to the nearest whole dollar. In the event that any Invoice prepared by Lessor Is Inaccurate such Inaccuracy shall not constitute a waiver and Lessee shall be obligated to pay the amount set forth in this Lease. Rent for any period during the term hereof which Is for less than one full calendar month shall he prorated based upon the actual number of days of said month. Payment of Rent shall be made to Lessor at Its address stated herein or to such other persons or place as Lessor may from time to time designate In witting. Acceptance of a payment which Is less than the amount then due shall not be a waiver of Lessor's rights to the balance of such Rent, regardless of Lessors endorsement of any check so stating. In the event that any check, draft, or other instrument of payment given by Lessee to Lessor Is dishonored for any reason, Lessee agrees to pay to Lessor the sura of $25 in addition to any Late Charge and Lessor, at its option, may require all future payments to be made by Lessee to be by cashiers check. Payments will be applied first to accrued late charges and attorneys fees, second to accrued Interest, then to Base Rent. insurance and Real Properly Taxes, arid any remaining amount to any other outstanding charges or costs. 4.3 Association Fees. In addition to the Base Rent, Lessee shall pay to Lessor each month an amount equal to any owner's association or condominium fees levied or assessed against the Premises. Said monies shall be paid at the same time and in the same manner as the Base Rent. 5. Security Deposit. Lessee shalt deposit with Lessor upon execution hereof the Security Deposit as security for Lessee's faithful performance of Its obligations under this Lease. If Lessee fails to pay Rent, or otherwise Defaults under this Lease, Lessor may use, apply or retain all or any portion of said Security Deposit for the payment of any amount already due Lessor, for Rents which will be due In the future, and/ or to reimburse or compensate Lessor for any liability, expanse, loss or damage which Lessor may suffer or Incur by reason thereof. If Lessor uses or applies all or any portion of the Scarily Deposit, Lessee shall within 10 days after written request therefor deposit monies with Lessor sufficient to restore said Security Deposit to the full amount required by this Lease. If the Base Rent Increases during the term of this Lease, Lessee shall, upon written request from Lessor, deposit additional monies with Lessor so that the total amount of the Security Deposit shall at all times bear the same proportion to the Increased Base Rent as the Initial Security Deposit bore to the initial Base Rent. Should the Agreed Use be amended to accommodate a material change In the business of Lessee or to accommodate a sublessee or assignee, Lessor shall have the right to Increase the Security Deposit to the PAGE 3 OF 17 INITIALS INITIALS ©2001 - AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM STG-16-4112E extent necessary, In Lessor's reasonable judgment, to account for any Increased wear and tear that the Premises may suffer as a result thereof. If a change in control of Lessee occurs during this Lease and following such change the financial condition of Lessee is, In Lessor's reasonable judgment, significantly reduced, Lessee shall deposit such additional monies with Lessor as shall be sufficient to cause the Security Deposit to be at a commercially reasonable level based on such change in financial condition. Lessor shall not be required to keep the Security Deposit separate from Its general accounts. Within 90 days after the expiration or termination of this Lease, Lessor shall return that portion of the Security Deposit not used or applied by Lessor. No part of the Security Deposit shall be considered to be held in trust, to bear interest or to be prepayment for any monies to be paid by Lessea under this Lease. 6. Use. 6.1 Use. Lessee shall use and occupy the Premises only for the Agreed Use, or eny other legal use which is reasonably comparable thereto, and tor no other purpose. Lessee shall not use or permit the use of the Premises in a manner that Is unlawful, creates damage, waste or a nuisance, or that disturbs occupants of or causes damage to neighboring premises or properties. Other than guide, signal and seeing eye dogs, Lessee shall not keep or allow in the Premises any pets, animals, birds, fish, or reptiles. Lessor shall not unreasonably withhold or delay its consent to any written request for a modification of the Agreed Use, so long as the same vrlll not impair the structural integrity of the improvements on the Premises or the mechanical or electrical systems therein, and/or Is not significantly more burdensome to the Promises. If Lessor elects to withhold consent, Lessor shall within 7 days after such request give written notification of same, whlctr notice shall include an explanation of Lessor's objections to the change In the Agreed Use. 6.2 Hazardous Substances. (a) Reportable Uses Require Consent. The term "Hazardous Substance" as used In this Lease shall mean any product, substance, or waste whose presence, use, manufacture, disposal, Transportation, or release, eithor by itself or in combination with other materials expected to be on the Premises, Is either: (I) potentially injurious to the public health, safety or welfare, the environment or the Premises, (10 regulated or monitored by any governmental authority, or (ill) a basis for potential liability of Lessor to any governmental agency or third party under any applicable statute or common law theory. Hazardous Substances shall include, but not be limited to, hydrocarbons, petroleum, gasoline, and/or crude oil or any products, by-products or fractions thereof. Lessee shall not engage In any activity In or on the Premises which constitutes a Reportable Use of Hazardous Substances without the express prior written consent of Lessor and timely compliance (at Lessee's expense) with all Applicable Requirements. "Reportable Uso" shall moan (1) the Installation or use of any above or below ground storage tank, (!i) the generation, possession, storage, use, transportation, or disposal of a Hazardous Substance that requires a permit from, or with respect to which a report, notice, registration or business plan Is required to he filed with, arty governmental authority, and/or (Ill) the presence at the Premises of a Hazardous Substance with respect to which any Applicable Requirements requires that a notice be given to persons entering or occupying the Premises or neighboring properties. Notwithstanding the foregoing, Lessee may use any ordinary and customary materials reasonably required to be used in the normal course of the Agreed Use, ordinary office supplies (copier toner, liquid paper, glue, etc.) and common household cleaning materials, so long as such use is In compliance with all Applicable Requirements, Is not a Reportable Use, and does not expose the Premises or neighboring property to any meaningful risk of contamination or damage or expose Lessor to any liability therefor. In addition, Lessor may condition its consent to any Reportable Use upon receiving such additional assurances as Lessor reasonably deems necessary to protect itself, the public, the Premises and/or the environment against damage, contamination, Injury and/or liability, including, but not limited to, the installation (and removal on or before Lease expiration or termination) of protective modifications (such as concrete encasements) and/or increasing the Security Deposit. (b) Duty to Inform Lessor. If Lessee knows, or has reasonable cause to believe, that a Hazardous Substance has come to be located in, on, under or about the Prernises, other than as previously consented to by Lessor, Lessee shall immediately give written notice of such fact In Lessor, and provide Lessor with a copy of any report, notice, claim or other documentation which it has concerning the presence of such Hazardous Substance. (c) Lessee Rernediation. Lessee shall not cause or permit any Hazardous Substance to be spilled or released in, on, under, or about the Premises (Including through the plumbing or sanitary sewer system) and shall promptly, at Lessee's expense, comply with all Applicable Requirements and take all investigatory and/or remedial action reasonably recommended, whether or not formally ordered or required, for the cleanup of any contamination of, and for the maintenance, security and/or monitoring of the Premises or neighboring properties, that was caused or materially contributed to by Lessee, or pertaining to or Involving any Hazardous Substance brought onto the Premises during the term of this Lease, by or for Lessee, or any third party. (d) Lessen Indemnification. Lessee shall indemnify, defend and hold Lessor, Its agents, employees, lenders and ground lessor, If any, harmless frcm and against any and alt loss of rents and/or damages, liabilities, Judgments, claims, expenses, penalties, and attorneys' and consultants' fees wising out of or Involving any Hazardous Substance brought onto the Premises by or for Lessee, or eny third party (provided, however, that Lessee shall have no liability under this Lease with respect to underground migration of any Hazardous Substance under the Premises from adjacent properties not caused or contributed to by Lessen). Lessee's obligations shall include, but not be limited to, the effects of any contaminatton or Injury to person, property or the environment created or suffered by Lessee, and the cost of Investigation. removal, remediation, restoration and/or abatement, and shall survive the expiration or termination of this Leaso. No termination, cancellation or release agreement entered Into by Lessor and Lessee shall release Lessee from its obligations under this Lease with respect to Hazardous Substances, unless specifically so agreed by Lessor In writing at the tlrne of such agreement. (e) Lessor fndemnificatton. Lessor and its successors and assigns shall Indemnify, defend, reimburse and hold Lessee, Its employees and lerders, harmless from and against any and all environmental damages, Including the cost of remedlation, which result frorn Hazardous Substances which existed on the Premises prior to Lessee's occupancy or which are caused by the gross negligence or willful misconduct of Lessor, Its agents or employees. Lessor's obligations, as and when required by the Appecable Requirements, shall include, but not be limited to, the cost of investigation, removal, remediation, restoration and/or abatement, and shall survive the expiration or termination of this Lease. (I) investigations and Rernedlattons. Lessor shall retain the responsibility and pay for any investigations or remediation measures required by governmental entitles having jurisdiction with respect to the existence of Hazardous Substances on the Premises prior to Lessee's occupancy, unless such remediation measure is required as a result of Lessee's use (including "Alterations", as defined In paragraph 7.3(a) below) of the Premises, In which event Lessee shall be responsible for such payment. Lessee shall cooperate fully in any such activities at the request of Lessor, including allowing Lessor and Lessor's agents to have reasonable access to the Premises at reasonable times In order to carry out Lessor's investigative end remedial responsibilities. (g) Lessor Termination Option. II a Hazardous Substance Condition (see Paragraph 9.1(e)) occurs during the term of this Lease, unless Lessee is legally responsible therefor (In which ease Lessee shall make the investigation and remedlation thereof required by the Applicable Requirements and this Lease shall continue In full force and effect, but subject to Lessor's rights under Paragraph 6.2(d) and Paragraph 13), Lessor may, at Lessor's option, either (I) investigate and remediate such Hazardous Substance Condition, If required, as soon as reasonably possible et Lessor's expense, In which event this Lease shall contnue In full force and effect, or (!i) if the estimated cost to rernedlate such condition exceeds 12 times the then monthly Base Rent or $100,000, whichever Is greater, give written notice to Lessee, within 30 days after receipt by Lessor of knowledge PAGE 4 OF 17 INITIALS INITIALS ©2001 - AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM SIG -15.4/12E of the occurrence of such Hazardous Substance CondiSon, of Lessor's desire to terminate this Lease as of the date 60 days following the date of such notice. In the event Lessor elects to give a termination notice, Lessee may, within 10 days thereafter, give written notice to Lessor of Lessee's commitment to pay the amount by which the cost of the remediation of such Hazardous Substance Condition exceeds an amount equal to 12 times the then monthly Base Rent or 5100,000, whichever Is greater. Lessee shall provide Lessor with said funds or satisfactory assurance thereof within 30 days following such commitment. In such event, this Lease shall continue In full force and effect, and Lessor shall proceed to make such remedlation as soon as reasona5ly possible after the required funds are evaiiable. If Lessee does not give such notice and provide the required funds or assurance thereof within the lime provided, this Lease shall terminate as of the date specified in Lessor's notice of termination. 6.3 Lessee's Compliance with Applicable Requirements. Except as otherwise provided in Ihls Lease, Lessee shall, at Lessens sole expense, fully, diligently and In a timely manner, matortalty comply with all Applicable Requirements, the requirements of any applicable fire insurance underwriter or rating bureau, and the recommendations of Lessor's engineers and/or consultants which relate in any manner to the such Requirements, without regard to whether such Requlrornonts aro now In effect or become effective after the Start Date. Lessee shall, within 10 days after receipt of Lessor's written request, provide Lesser with copies of all permits and other documents, and other information evidencing Lessee's compliance with any Applicable Requirements specified by Lessor, and shall Immedlately upon receipt, notify Lessor In writing (with copies of any documents Involved) of any threatened or actual claim, notice, citation, warning, complaint or report pertaining to or involving the failure of Lessen or time Premises to comply with any Applicable Requirements. Likewise, Lessee shall immediately give written notice to Lessor of: (1) any water damage to the Premises and any suspected seepage, pooling, dampness or other condition conduclve to the production of mold; or (11) any mustiness or other odors that might Indicate the presence of mold In the Premises. 6.4 Inspection; Compliance. Lessor and Lessor's "Lender" (as defined In Paragraph 30) and consultants shall have tite right to enter into Premises at any time, In the case of an emergency, and otherwise at reasonable times after reasonable notice, for the purpose of Inspecting the condition of the Premises and for verifying compliance by Lessee with this Lease. Tho cost of any such Inspections shall be paid by Lessor, unless a violation of Applicable Requirements, or a Hazardous Substance Condition (see paragraph 9.1) is found to exlst or bo Imminent, or the inspection is requested or ordered by a governmental authority. In such case, Lessee shall upon request reimburse Lessor for the cost of such inspection, so tong as such Inspection Is reasonably related to the violation or contamination. In addition, Lessee shall provide copies of all relevant material safety data sheets (MSDS) to Lessor within 10 days of the receipt of a written request therefor. 7. Maintenance; Repairs; Utility Installations; Trade Fixtures and Alterations. 7.1 Lessee's Obligations. (a) In General. Subject to the provisions of Paragraph 2.2 (Condition), 2.3 (Compliance), 6.3 (Lessee's Compliance with Applicable Requirements), 7.2 (Lessor's Obligations), 9 (Damage or Destruction), and 14 (Condemnation), Lessee shall, at Lessee's sole expense, keep the Premises, Utility Installations (intended for Lessee's exclusive use, no matter where located), and Alterations In good order, condition and repair (whether or not the portion of the Premises requiring repairs, or the means of repairing the same, are reasonably or readily accessible to Lessee, and whether or not the need for such repairs occurs as a result of Lessee's use, any prlor use, the elements or the ago of such portion of the Premises), including, but not limited to, all equipment or facilities, such as plumbing, HVAC equipment, electrical, lighting facilities, boilers, pressure vessels, fire protection system, fixtures, walls (Interior and exterior), ceilings, floors, windows, doors, plate glass, skylights, landscaping, driveways. parking lots, fences, retaining walls, signs, sidewalks and parkways located In, on, or adjacent to the Premises, Lessee is also responsible for keeping the roof and roof drainage clean and free of debris. Lessor shall keep the surface and structural elements of the roof, foundations, and bearing walls in good repair (see paragraph 7.2). Lessee, in keeping the Premises In good order, condition and repair, shall exercise and perform good maintenance practices, specifically Including the procurement and maintenance of the service contracts required by Paragraph 7.1(b) below. Lessee's obligations shall include restorations, replacements or renewals when necessary to keep the Premises and all improvements thereon or a part thereof In good order, condition and state of repair. Lessee shall, during the term of this Lease, keep the exterior appearance of the Building in a first-class condition (including, e.g. graffiti removal) consistent with the exterior appearance of other similar facilities of comparable age and slze in tho vicinity, including, when necessary, the exterior repainting of the Building. (b) Service Contracts. Lessee shall, at Lessee's sole expense, procure and maintain contracts, with copies to Lessor, In customary form and substance for, and with contractors specializing and experienced in the maintenance of the following equipment and improvements, If any, if and when installed on the Premises: (i) HVAC equipment, (II) bolter, and pressure vessels, (III) fire extinguishing systems, including fire alarm and/or smoke detection, (Iv) landscaping and irrigation systems, and (v) clarifiers. However, Lessor reserves the right, upon notice to Lessee, to procure and maintain any or all of such scevlce contracts, and Lessee shall reimburse Lessor, upon demand, for the cost !hereof. (c) Failure to Perform. If Lessee falls to perform Lessee's obligations under this Paragraph 7.1, Lessor may enter upon the Premises after 10 days' prior written notice to Lessee (except in the case of an emergency, In which case no notice shall be required), perform such obligations on Lessee's behalf, and put the Premises in good order, condition and repair, and Lessee shall promptly pay to Lessor a sum equal to 115% of the cost thereof. (d) Replacement. Subject to Lessee's indemnifrcatlon of Lessor as sot forth In Paragraph 8.7 below, and without relieving Lessee of liability resulting from Lessee's failure to exercise and perform good maintenance practices, if an item described in Paragraph 7.1(b) cannot bo repaired other than at a cost which is in excess of 50% of the cost of replacing such Item, then such item shalt be replaced by Lessor, and the cost thereof shall be prorated between the Parties and Lessee shall only bo obligated to pay, each month during the remainder of the term of this Lease, on the date on which Base Rent is due, an amount equal to the product of multiplying the cost of such replacement by a fraction. the numerator of which Is one, and the denominator of which Is 144 (le. 1/144th of the cost per month). Lessee shall pay Interest an the unamortlzed balance but may prepay its obligation at any time. 7.2 Lessor's Obligations. Subject to the provisions of Paragraphs 2.2 (Condition), 2.3 (Compliance), 9 (Damage or Destruction) and 14 (Condemnation) it Is intended by the Parties hereto that Lessor have no obligation, in any manner whatsoever, to repair and maintain the Premises, or the equipment therein, all of which obligations are Intended to be that of the Lessee, except for the surface and structural elements of the roof, foundations and hearing walls, the repair of which shall be the responsibility of Lessor upon receipt of written notice that such a repair is necessary. It is the intention of the Parties that the terms of this Lease govorn the respective obligations of the Parties as to maintenance and repair of the Premises, and they expressly waive the benefit of any statute now cr hereafter In effect to the extent it is inconsistent with the terms of this Lease. 7.3 Utility Installations; Trade Fixtures; Alterations. (a) Definitions. The tem "Utility Installations" refers to all floor and window coverings, air and/or vacuum Imes, power panels, electrical distribution, security and fire protection systems, communication cabling, lighting fixtures, HVAC equipment, plumbing, and fencing In or on the Premises. The term "Trade Fixtures" shall moan Lessee's machinery and equipment that can be removed without doing material damage to the Premises. The term "Alterations" shall mean any modification of the improvements, other than Utility Installations or Trade Fixtures, whether by addition or deletion. "Lessee Owned Alterations and/or Utility Installations" aro defined as Alteratlons and/or Utility Installations made by Lessee that are not yet owned by Lessor pursuant to Paragraph 7.4(a). (b) Consent. Lessee shall not make any Alterations or Utility Installations to the Premises without Lessor's prior written consent. PAGE 6 OF 17 INITIALS INITIALS ®2001 - AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM STG-16-4/12E Lessee may, however, make non-structural Alterations or Utility installations to the interior of the Premises (excluding the roof) without such consent but upon notice to Lessor, as long as they are not visible from the outside, do not Involve puncturing, relocating or removing the roof or any existing walls, will not affect the electrical, plumbing, HVAC, and/or Ifo safety systems, and the cumulative cost thereof during this Lease as extended does not exceed a sum equal to 3 month's Base Rent in the aggregate ora sum equal to one month's Base Rent In any one year. Notwithstanding the foregoing, Lessee shall not make or permit any roof penetrations and/or install anything on the roof without the prior written approval of Lessor. Lessor may, as a precondition to granting such approval, require Lessee to utilize a contractor chosen and/or approved by Lessor. Any Alterations or Utility Installations that Lessee shall desire to make and which require the consent of the Lessor shall be presented to Lessor In written form with detailed pians. Consent snail be deemed conditioned upon Lessee's: (1) acquiring all applicable governmental permits, (ii) furnishing Lessor with copies of both the permits and the plans and specifications prior to commencement of the work, and (III) compliance with all conditions of said permits and other Applicable Requirements In a prompt and expeditious manner. Any Alterations or Utility Installations shall bo performed in a workmanlike manner with good and sufficient materials. Lessee shall promptly upon r_omptotlon furnish Lessor with as-bulit plans and specifications. For work which costs an amount In excess of one month's Baso Rent, Lessor may condition its consent upon Lessee providing a Ilen and completion bond In an amount equal to 150% of the estimated cost of such Alteration or Utility Installation and/or upon Lessee's posting an additional Security Deposit with Lessor. (c) Liens; Bonds, Lessee shall pay, when due, all claims for labor or materials furnished or alleged to have been furnished to or for Lessee at or for use on the Premises, which cla'.ms are or may be secured by any mechanic's or materlalmen's lien against the Premises or any Interest therein. Lessee shall give Lessor not less than 10 days notice prior to the commencement of any work In, on or about the Premises, and Lessor shall have the right to post ncticos of non -responsibility, If Lessee shall contest the validity of any such lien, claim or demand, then Lessee shall, at Its sole expense defend and protect itself, Lessor and the Premises against the same and shall pay and satisfy any such adverse judgment that may be rendered thereon before the enforcement thereof. If Lessor shall require, Lessee shall furnish a surety bond in an amount equal to 150% of the amount of such contested lien, claim cr demand, Indemnifying Lessor against liability for the same. If Lessor elects to participate in any such action, Lessee shall pay Lessor's attorneys' fees and costs. 7.4 Ownership; Removal; Surrender; and Restoration. (a) Ownership, Subject to Lessor's right to require removal or elect ownership as hereinafter provided, a I Alterations and Utility Installations made by Lessee shall be the property of Lessee, but considered a part of the Premises. Lessor may, at any time, elect In writing to be the owner of all or any specified part of the Lessee Owned Alterations and Utility Installations. Unless otherwise Instructed per paragraph 7.4(b) hereof, all Lessee Owned Alterations and Utility installations shall, at the expiration or termination of this Lease, become the properly of Lessor and be surrendered by Lessee with the Premises. (b) Removal. By delivery to Lessee of written notice from Lessor not earlier than 90 and not later than 30 days prior to the end of the term of this Lease, Lessor may require that any or all Lessee Owned Alterations or Utility Installations be removed by the expiration or termination of this Lease. Lessor may require the removal at any time of all or any part of any Lessee Owned Alterations or Utility installations mads without the required consent. (c) Surrender; Restoration. Lessen shall surrender the Premises by the Expiration Dato or any earlter termination date, with all of the Improvements, parts and surfaces thereof broom clean and free of debris, and in good operating order, condition and state of repair, ordinary wear and tear excepted. "Ordinary wear and tear" shall not Include any damage or deterioration that would have been prevented by good maintenance practice. Notwithstanding the foregoing, If this Lease Is for 12 months or less, then Lessee shall surrender the Premises in the same condition as delivered to Lessee on the Start Date with NO allowance for ordinary wear and tear. Lessee shall repair any damage occasioned by the installation, maintenance or removal of Trade Fixtures, Lessee owned Alterations and/or Utility Installations, furnishings, and equipment as well as the removal of any storage tank installed by or for Lessee. Lessee shall completely remove from the Premises any and all Hazardous Substances brought onto the Premises by or for Lessee, or any third party (except Hazardous Substances which were deposited via underground migration from areas outside of the Premises) even if such removal would require Lessee to perform or pay for work that exceeds statutory requirements. Trade Fixtures shall remain the property of Lessee and shall be removed by Lessee. Any personal property of Lessee not removed on or before the Expiration Date or any earlier termination date shall be deemed to have been abandoned by Lessee and may be disposed of or retained by Lessor as Lessor may desire. The failure by Lessee to timely vacate the Premises pursuant to this Paragraph 7.4(c) without the express written consent of Lessor shall constitute a holdover under the provisions of Paragraph 26 below. 8. Insurance; Indemnity. 8.1 Payment of Premium Increases. (a) Lessee shall pay to Lessor any Insurance cost increase ("Insurance Cost Increase") occurring during the term of this Lease. Insurance Cost Increase Is defined as any Increase In the actual cost of the insurance required under Paragraph 8.2(b), 8.3(a) and 8-3(b) ("Required Insurance"), over and above the Base Premium as hereinafter defined calculated on an annual basis. Insurance Cost Increase shall include but not be limited to Increases resulting from the nature of Lessee's occupancy, any act or omission of Lessee, requirements of the holder of mortgage or deed of trust covering the Premises, Increased valuation of the Premises and/or a premium rate Increase. The parties are encouraged to fill in the Base Premium In paragraph 1.8 wilh a reasonable premium for the Required Insurance based on the Agreed Use of the Premises. If the parties fail to insert a dollar amount in Paragraph 1.8, then the Base Premium shall be the lowest annual premum reasonably obtainable for the Required Insurance as of the commencement of the Original Temi for the Agreed Use of the Premises. In no event, however, shall Lessen be responsible for any portion of the increase in the premium cost attributable 10 liability insurance carried by Lessor under Paragraph 8.2(b) in excess of $2,000,000 per occurrence. (b) Lessee shall pay any such insurance Cost Increase to Lessor within 30 days after receipt by Lessee of a copy of the premium statement or outer reasonable evidence of the amount duo. If the Insurance policies maintained hereunder cover other property besides the Premises, Lessor shall also deliver to Lessee a statement of the amount of such Insurance Cost Increase attributable only to the Premises showing In reasonable detail the manner in which such amount was computed. Premiums for policy periods commencing prior to, or extending beyond the term of this Lease, shall be prorated to correspond to the term of this Lease. 8.2 Liability insurance. (a) Carried by Lessee, Lessee shall obtain and keep in force a Commercial General Liability policy of Insurance protecting Lessee and Lessor as an additional insured against claims for bodily injury, personal injury and property damage haled upon or arising out of the ownership, use, occupancy or maintenance of the Premises and all areas appurtenant thereto. Such Insurance shall be on an occurrence basis providing single limit coverage in an amount not less than $1,000,000 per occurrence with an annual aggregate of not less than $2,000,000. Lessee shall add Lessor as an additional Insured by means of an endorsement at least es broad as the Insurance Service Organization's "Additional Insured -Managers or Lessors of Premises" Endorsement. The policy shall not contain any Intra -Insured exclusions as between insured persons or organizations, but shall include coverage for liability assumed under this Lease as an "insured contract" for the performance of Lessee's indemnity obligations under this Lease. The limits of said insurance shall not, however, limit the liability of Lessee nor relieve Lessee of any obligation hereunder. Lessee shall provide an endorsement on its liability policy(les) which provides that its Insurance shall be primary to and not contributory with any similar insurance carried by Lessor, whose Insurance shall be considered excess insurance only. PAGE 6 OF 17 INITIALS INITIALS ©2001 - AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM STG-15-4/12E (b) Carried by Lessor. Lessor shall maintain liability insurance as described In Paragraph 8.2(a), in addition to, and not in lieu of, the Insurance required to be maintained by Lessee. Lessee shall not be narned as an additional insured therein. 8.3 Property Insurance - Building, Improvements and Rental Value, (a) Building and Improvements. Tho Insuring Party shall obtain and keep in force a policy or policies in the name of Lessor, with loss payable to Lessor, any ground•lossor, and to any Lender Insuring loss or damage to the Premises. The amount of such Insurance shall be equal to the full Insurable replacement cost of the Premises, as ".he same shall exist from time to time, or the amount required by any Lender, but in no event more than the commercially reasonable and available Insurable value thereof. Lessee Owned Alterations and Utility Installations, Trade Fhrtures, and Lessee's personal property shall be Insured by Lessee not by Lessor. If the coverage Is available and commercially appropriate, such policy or policies shall Insure against all risks of direct physical loss or damage (except the perils of flood and/or earthquake unless required by a Lender or included in the Baso Premium), including coverage for debris removal and the enforcement of any Applicable Requirements requiring the upgrading, demolition, reconstruction or replacement of any portion of the Premises as the result of e covered loss. Said policy or policies shall also contain an agreed valuation provision in Ileu of any coinsurance clause, waiver of subrogation, and inflation guard protection causing an increase In the annual properly insurance coverage amount by a factor of not loss than the adjusted U.S. Department of Labor Consumer Price Index for All Urban Consumers for the city nearest to where the Premises are located. If such insurance coverage has a deductible clause, the deductible amount shall not exceed $5.000 per occurrence, and Lessee shall be liable for such deductible amount in the event of an Insured Loss. (b) Rental Value. The Insuring Party shall obtain and keep In force a policy or policies in the name of Lessor with loss payable to Lessor and any Lender, Insuring the loss of the full Rent for one year with an extended period of Indemnity for an additional 180 days ("Rental Value Jnsurance"). SaId Insurance shall contain an agreed valuation provision In lieu of any coinsurance clause, end the amount of coverage shall be adjusted annually to reflect the projected Rent otherwise payable by Lessee, for the next 12 month period. Lessee shall be liable for any deductible amount in the event of such loss. (c) Adjacent Premises. If the Premises are part of a larger building, or of a group of buildings owned by Lessor which are adjacent to the Promises, the Lessee shall pay for any Increase in the premiums for the property insurance of such building or buildings if said increase Is caused by Lessee's acts, omissions, use or occupancy of the Premises. 8.4 Lessee's Property; Business Interruption Insurance; Worker's Compensation Insurance. (a) Property Damage. Lessee shall obtain and maintain insurance coverage on all of Lessee's personal property, Trade Fixtures, and Lessee Owned Alterations and Utility Installations. Such Insurance shall be full repfaoemenl cost coverage with a deductible of not to exceed $1,000 par occurrence. The proceeds from any such insurance shall be used by Lessee for the replacement of personal property, Trade Fixtures and Lessee Owned Alterations and Utility Installations. Lessee shall provide Lessor with written evidence that such Insurance Is In force. (b) Business Interruption. Lessee shall obtain and maintain loss of Income and extra expense insurance In amounts as will reimburse Lessee for direct or Indirect foss of earnings attributable to all perils commonly insured against by prudent lessees in the business of Lessee or attributable to prevention of access to the Premises as a result of such perils. (c) Worker's Compensation Insurance. Lessee shall obtain and maintain Worker's Compensation Insurance in such amount as may be required by Applicable Requirements. Such policy shall include a 'Waiver of Subrogation' endorsement. Lessee shall provide Lessor with a copy of such endorsement along with the certiticate of Insurance or copy of the policy required by paragraph 8.5. (d) No Representation of Adequate Coverage. Lessor makes no representation that the llmfts or forms of coverage of insurance specified herein are adequate to cover Lessee's property, business operations or obligations under this Lease. 8.5 Insurance Policies. Insurance required herein shall be by companies maintaining during the policy term a "General Pollcyhclders Rating" of et least A-, VII, as set forth In the most current Issue of "Best's Insurance Guide", or such other rating as may be required by a Lender. Lessen shall not do or permit to bo done anything which invalidates the required insurance policies. Lessee shall, prior to the Start Date, deliver to Lessor certified copies of policies of such insurance or certificates with copies of the required endorsements evidencing the existence and amounts of the required Insurance. No such policy shall be cancelable or subject to modification except after 30 days prior written notice to Lessor. Lessee shall, at least 10 days prier to the expiration of such policies, furnish Lessor with evidence of renewals or "insurance hinders" evidencing renewal thereof, or Lessor may order such insurance and charge the cost thereof to Lessee, which amount shall be payable by Lessee to Lessor upon demand. Such policies shall be for a term of at least one year, or the length of the remaining term of thls Lease, whichever Is less. If either Party shall fail to procure and maintain the Insurance required to be carried by It, the other Party may, but shall not be required to, procure and maintain the same. 8.6 Waiver of Subrogation. Without affecting any other rights or remedies, Lessee and Lessor each hereby release and relieve the other, and waive their entire right to recover damages against the other, for loss of or damage to its property arising out of or incident to the perils required to be Insured against herein. The effect of such releases and waivers Is not limited by the amount of insurance carried or required, or by any deductibles applicable hereto. The Parties agree to have their respective property damage Insurance carriers waive any right to subrogation that such companies may have against Lessor or Lessee, as the case may be, so long as the Insurance is not invalidated thereby. 8.7 Indemnity. Except for Lessor's gross negligence or willful misconduct, Lessee shall indemnify, protect, defend and hold harmless the Premises, Lessor and its agents, Lessor's master or ground lessor, partners and Lenders, from and against any and all claims, loss of rents and/or damages, lions, Judgments, penalties, attorneys' and consultants' fees, expenses and/or Ilebilitios arising out of, Involving, or in connection with, the use and/or occupancy of the Premises by Lessee. If any action or proceeding is brought against Lessor by reason of any of the foregoing matters, Lessee shall upon notice defend the sante at Lessee's expense by counsel reasonably satisfactory to Lessor and Lessor shall cooperate with Lessee In such defense. Lessor need not have first paid any such claim In order to be defended or indemnified. 8.8 Exernptlon of Lessor and its Agents from Liability. Notwithstanding the negligence or breach of this Lease by Lessor or Its agents, neither Lessor nor its agents shall be liable under any circumstances for: (i) injury or damage to the person or goods, wares, merchandise or other property of Lessee, Lessee's employees, contractors, Invitees, customers, or any other person In or about the Premises, whether such damage or injury is caused by or results from Piro, steam, electricity, gas, water or rain, Indoor air quality, the presence of mold or from the breakage, leakage, obstruction or other defects of pipes, fire sprinklers, wires, appliances, plumbing, HVAC or lighting fixtures, or from any other cause, whether the said Injury or damage results from conditions arising upon the Premises or upon other portions of the building of which the Premises are a part, or from other sources or places, (II) any damages arising frorn any act or neglect of any other tenant of Lessor or from the failure of Lessor or its agents to enforce the provisions of any other lease in the Project, or (Iii) injury to Lessee's business or for any loss of Income or profit therefrom. Instead, it is intended that Lessee's sole recourse In the event of such damages or Injury be to file a claim on the Insurance policy(ies) that Lessee Is required to maintain pursuant to the provisions of paragraph 8. 8.9 Failure to Provide Insurance. Lessee acknowledges that any failure on Its part to obtain or maintain the insurance required herein will expose Lessor to risks and potentially cause Lessor to incur costs not contemplated by this Lease, the extent of which will be extremely difficult to ascertain. Accordingly, for any month or portion thereof that Lessee does not maintain the required Insurance and/or does not provide Lessor with the required birdors or certificates evidencing the existence of the required Insurance, the Base Rent shall be automatically increased, without any PAGE 7 OF 17 INITIALS INITIALS ©2001 - AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM STG-15-4/12E requirement for notice to Lessee, by an amount equal to 10% of the then existing Base Rent or $100, whichever Is greater. The parties agree that such Increase In Base Rent represents fair and reasonable compensation for the additional risk/ costs that Lessor will incur by reason of Lessee's failure to maintain the required Insurance. Such increase In Base Rent shall In no event constitute a waiver of Lessee's Default or Breach with respect to the failure to maintain such Insurance, prevent the exercise of any of the other rights and remedies granted hereunder, nor relieve Lessee of fts obligation to maintain the insurance specified fn This Lease. 9. Damage or Destruction. 9.1 Definitions. (a) "Premises Partial Damage" shall mean damage or destruction to the improvements on the Premises, other than Lessee Owned Alterations and Utility Installations, which can reasonably bo repaired in 6 months or less from the date of the damage or destruction. Lessor shall notify Lessee in writing within 30 days from the date of the damage or destruction as to whether or not the damage Is Partial or Total. Notwithstanding the foregoing, Premises Partial Damage shall not Include damage to windows, doors, and/or other similar items which Lessee has the responsibility to repair or replace pursuant to the provisions of Paragraph 7.1. Ib) "Promises Total Destruction" shall mean damage or destruction to the Premises, other than Lessee Owned Alterations and Utility instaliations and Trade Fixtures, which cannot reasonably be repaired In 6 months or less from the date of the damage or destruction. Lessor shall notify Lessee In writing within 30 days from the date of the damage or destruction as to whether or not the damage Is Partial or Total. (c) "insured Loss" shall mean damage or destruction to Improvements on the Premises, other than Lessee Owned Alterations and Utility Installations and Trade Fixtures, which was caused by an event required to be covered by the insurance described in Paragraph 8.3(a), irrespective of any deductible amounts or coverage limits Involved. (d) "Replacement Cost" shall mean the cost to repair or rebuild the improvements owned by Lessor at the time of the occurrence to their condltion existing immediately prior thereto, including demolition, debris removal and upgrading required by the operation of Applicable Requirements, and without deduction for depreciation. (e) "Hazardous Substance Condition" shall mean the occurrence or discovery of a condition involving the presence of, or a contamination by, a Hazardous Substance, In, on, or under the Premises which requires restoration. 9.2 Partial Damage - Insured Loss. If a Promises Partial Damage that Is an Insured Loss occurs, then Lessor shall, at Lessor's expense, repair such damage (but not Lessee's Trade Fixtures or Lessee Owned Alterations and Utility Installations) as soon as reasonably possible and this Lease shall continue in full force and effect; provlded, however, that Lessee shall, at Lessor's election, make the repair of any damage or destruction the total cost to repair of which Is $10,000 or fess, and, in such event, Lessor shall make any applicable insurance proceeds available to Lessee on a reasonable basis for that purpose. Notwithstanding the foregoing, If the required insurance was not in force or the Insurance proceeds are riot sufficient to effect such repair, the Insuring Party shall promptly contribute the shortage In proceeds (except as to the deductible which is Lessee's responsibility) as and when required to complete said repairs. In the event, however, such shortage was due to the fact that, by reason of the unique nature of the improvements, full replacement cost insurance coverage was not commercially reasonable and available, Lessor shall have no obligation to pay for the shortage In Insurance proceeds or to fully restore the unique aspects of the Premises unless Lessee provides Lessor with the funds to cover same, or adequate assurance thereof, within 10 days following receipt of written notice of such shortage and request therefor. If Lessor receives said funds or adequate assurance thereof within said 10 day period, the party responsible for making the repairs shall complete them as soon as reasonably posslble and this Lease shall remain In full force and effect. If such funds or assurance are not received, Lessor may nevertheless elect by written notice to Lessee within 10 days thereafter to: (I) make such restoration and repair as Is commercially reasonable with Lessor paying any shortage in proceeds, in which case this Lease shall remain In full force and effect, or (11) have this Lease terminate 30 days thereafter. Lessee shall not be entitled to rei-nbursement of any funds contributed by Lessee to repair any such damage or destruction. Premises Partial Damage due to flood or earthquake shall be subject to Paragraph 9.3, notwithstanding that there may be some insurance coverage, but the net proceeds of any such Insurance shall be made available for the repairs If made by either Party. 9.3 Partial Damage - Uninsured Loss. If a Premises Partial Damage that Is not an Insured Loss occurs, unless caused by a negligent or willful act of Lessee (in which event Lessee shall make the repairs at Lessee's expense), Lessor may either: (I) repair such damage as soon as reasonably possible et Lessor's expense, in which event this Lease shall continue in full force and effect, or (11) terminate this Lease by giving written notice to Lessee within 30 days after receipt by Lessor of knowledge of the occurrence of such damage. Such termination shall be effective 60 days following the date of such notice. In the event Lessor elects to terminate this Lease, Lessee shall have the right within 10 days after receipt of the termination notice to give written notice to Lessor of Lessee's commitment to pay for the repair of such damage without reimbursement from Lessor. Lessee shall provide Lessor with said funds or satisfactory assurance thereof within 30 days after making such commitment In such event this Lease shall continue In full force and effect, and Lessor shall proceed to make such repairs as soon as reasonably possible after the required funds are available_ If Lessee does not make the required commitment, this Lease shall terminate as of the date specified in the termination notice, 9.4 Total Destruction. Notwithstanding any other provision hereof. If a Premises Total Destruction occurs, this Lease shall terminate 60 days following such Destruction. If the damage or destruction was caused by the gross negligence or willful misconduct of Lessee, Lessor shall have the right to recover Lessor's damages from Lessee, except as provided in Paragraph 8 6. 9.5 Damage Near End of Term. If at any time during the last 6 months of this Lease there is damage for which the cost to repair exceeds one month's Base Rent, whether or not an Insured Loss, Lessor may terminate this Lease effective 60 days following tr,o date of occurrence of such damage by giving a written termination notice to Lessee within 30 days after the date of occurrence of such damage. Notwithstanding the foregoing, if Lessee at That time has an exercisable option to extend this Lease or to purchase the Premises, then Lessee may preserve this Lease by, (a) exercising such option and (b) providing Lessor with any shortage In Insurance proceeds (or adequate assurance thereof) needed to make the repairs on or before the earlier of (1) the date which Is 10 days after Lessee's receipt of Lessor's written notice purporting to terminate this Lease, or (II) the day prior to the date upon which such option expires. If Lessee duly exercises such option during such period and provides Lessor with funds (or adequate assurance thereof) to cover any shortage in Insurance proceeds, Lessor shall, at Lessor's commercially reasonable expense, repair such damage as soon as reasonably possible and this Lease shall continue In full force and effect. If Lessee falls to exercise such option and provide such funds or assurance during such period, then this Lease shall terminate on the date specked in the termination notice and Lessee's option shall be extinguished. 9.8 Abatement of Rent; Lessee's Remedies. (a) Abatement. In the event of Premises Partial Damage or Premises Total Destruction or a Hazardous Substance Condition for which Lessee is not responsible under this Lease, the Rent payable by Lessee for the period required for the repair, remediation or restoration of such damage shall be stated In proportion to the degree to which Lessee's use of the Premises Is Impaired, but not to exceed the proceeds received from the Rental Value insurance. All other obligations of Lessee hereunder shall he performed by Lessee, and Lessor shall have no liability for any such damage, destruction, remediation, repair or restoration except as provided herein. (b) Remedies. If Lessor Is obligated to repair or restore the Premises and does not commence, in a substantial and meaningful way, such repair or restoration within 90 days after such obligation shall accrue, Lessee may, at any time prior to the commencement of such repair or PAGE 8 OF 17 INITIALS ©2001 - AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM STG-15-4112E INITIALS restoration, give written notice] to Lessor and to any Lenders of which Lessee has actual notice, of Lessee's election to terminate this Lease on a date not less than 60 days following the giving of such notice. If Lessee gives such notice and such repair or restoration is riot commenced within 30 days thereafter, this Lease shall terminate as of the date specified In sald notice. If the repair or restoration Is commenced within such 30 days, this Lease shall continue in full force and effect. "Commence" shell mean either the unconditional authorization of the preparation of the required plans, or the beginning of the actual work on the Premises, whichever first occurs. 9.7 Termination; Advance Payments. Upon termination of this Lease pursuant to Paragraph 6,2(g) or Paragraph 9, an equitable adjustment shall be made concerning advance Base Rent and any other advance payments made by Lessee to Lessor. Lessor shall, In addition, return to Lessee so much of Lessee's Security Deposit as has not been, or Is not then required to be, used by Lessor. 10. Real Property Taxes. 10.1 Definition. As used herein, the term "Real Property Taxes" shall include any form of assessment; real estate, general, special. ordinary or extraordinary, or rental levy or tax (other than inheritance, personal Income or estate taxes); improvement bond; and/or license fee Imposed upon or levied against any legal or equitable Interest of Lessor In the Premises or the Project, Lessor's right to other Income therefrom, and/or tessera business of leasing, by any authority having the direct or Indirect power to tax and where the funds are generated with reference to the Building address and where the proceeds so generated are to bo applied by the city, county or other local taxing authority of a Jurisdiction within which the Premises are located. Real Property Taxes shall also include any tax, fee, levy, assessment or charge, or any Increase therein: (i) imposed by reason of events occurring during the tern of this Lease, Including but not limited to, a change In the ownership of the Premises, and (II) levied or assessed on machinery or equipment provided by Lessor to Lessee pursuant to this Lease. 10.2 la) Payment of Taxes. Lessor shat: pay the Real Property Taxes applicable to the Premises provided, however, that Lessee shall pay to Lessor the amount, if any, by which Real Property Taxes applicable to the Premises increase over the fiscal tax year during which the Commencement Date Occurs ('Tax Increase'). Payment of any such Tax increase shall be made by Lessee to Lessor within 30 days after receipt of Lessor's written statement setting forth the amount due and computation thereof. If any such taxes shall cover any period of time prior to or after the expiration or termination of this Lease, Lessee's share of such taxes shall be prorated to cover only that portion of the tax bill applicable to (ho period that this Lease is in effect. In the event Lessee Incurs s late charge on any Rent payment, Lessor may estimate the current Real Property Taxes, and require that the Tax increase bo paid In advance to Lessor by Lessee monthly In advance with the payment of the Base Rent. Such monthly payment shall bo an amount equal to the amount of the estimated installment of the Tax increase divided by the number of months remaining before the month In which said Installment becomes delinquent. When the actual amount of the applicable Tax Increase is known, the amount of such equal monthly advance payments shall be adjusted as required to provide the funds needed to pay the applicable Tax Increase. If the amount collected by Lessor Is Insufficient to pay the Tax Increase when due, Lessee shall pay Lessor, upon demand, such additional sums as are necessary to pay such obligations. Advance payments may be intemmingled with other moneys of Lessor and shall not bear Interest. In the event of a Breach by Lessen in the performance of its obligations under this Lease, then any such advance payments may be treated by Lessor as an additional Security Deposit. (b) Additional Improvements. Notwithstanding anything to the contrary In this Paragraph 10.2, Lessee shall pay to Lessor upon demand therefor the entirety of any increase in Real Preporty Taxes assessed by reason of Alterations or Utility Installations placed upon the Premises by Lessee or at Lessee's request or by reason of any alterations or improvements to the Premises made by Lessor subsequent to the execution of tills Lease by the Parties. 10.3 Joint Assessment. If the Premises are not separately assessed, Lessee's liability shall be an equitable proportion of the Tax Increase for all of the land and Improvements Included within the tax parcel assessed, such proportion to be conclusively determined by Lessor from the respective valuations assigned In the assessor's work sheets or such other information as may he reasonably available. 10.4 Personal Property Taxes, Lessee shall pay, prior to delinquency, alp taxes assessed against and levied upon Lessee Owned Alterations, Utility Installations, Trade Fixtures, furnishings, equipment and all personal property of Lessee. When possible, Lessee shall cause Its Lessee Owned Alterations and Utility Installations, Trade Fixtures, furnishings, equipment and all other personal property to 0o assessed and billed separately from the real property of Lessor. If any of Lessee's said property shall bo assessed wish Lessor's real property, Lessee shall pay Lessor the taxes attributable to Lessee's property within 10 days after receipt of a written statement setting forth the taxes applicable to Lessee's property. 11. Utilities and Services. Lessen shall pay far all water, gas, heat, light, power, telephone, trash disposal and other utilities and services supplied to the Premises, together with eery taxes thoreon. If any such services are riot separately metered or billed to Lessee, Lessee shall pay a reasonable proportion, to be determined by Lessor, of all charges jointly metered or billed. There shall be no abatement of rent and Lessor shall not be liable In any respect whatsoever for the inadequacy, stoppage, Interruption or discontinuance of any utility or service due to riot, strike, labor dispute, breakdown, accident, repair or other cause beyond Lessor's reasonable control or In cooperation with governmental request or directions. 12. Assignment and Subletting. 12.1 Lessors Consont Required. (a) Lessen shall not voluntarily or by operation of law assign, Transfer, mortgage or encumber (collectively, "assign or assignment") or sublet all or any part of Lessee's Interest In this Lease or In the Premises without Lessors prior written consent. (b) Unless Lessen Is a corporation and its stock is publicly traded on a lettered stock exchange, a change in the control of Lessee shall constitute an assignment requiring consent. The transfer, on a cunulative basis, of 25% or more of the voting control of Lessee shelf constitute a change In control for this purpose. (c) The involvement of Lessee or its assets In any transaction, or series of transactions (by way of merger, sale, acquisition, financing, transfer, leveraged buy-out or otherwise), whether or not a formal assignment or hypothecation of this Lease or Lessee's assets occurs, which results or will result In a reduction of the Net Worth of Lessee by an amount greater than 25% of such Net Worth as it was represented at the lirne of the execution of this Lease or at the time of the most recent assignment to which Lessor has consented, or as it exists immediately prior to said transaction or transactions constituting such reduction, whichever was or is greater, shall be considered art assignment of this Lease to which Lessor may withhold its consent. "Not Worth of Lessee" shall mean the net worth of Lessee (excluding any guarantors) established under generally accepted accounting principles. (d) An assignment or subletting without consent shall, at Lessors option, be a Default curable after notice per Paragraph 13.1(c), or a noncurable Breach without the necessity of any notice and grace period. If Lessor elects to treat such unapproved assignment or subletting as a noncurable Breach, Lessor may either. (I) terminate this Lease, or (ii) upon 30 days written notice, increase the monthly Baso Rent to 1.10% of the Base Rent then In effect. Further, In the event of such Breach and rental adjustment, (I) the purchase price of any option to purchase the Premises held by Lessee shall be subject to similar adjustment to 110% of the price prevlously In effect, and (II) all fixed and non -fixed rental adjustments scheduled during the remainder of the Lease term shall be increased to 110% of the scheduled adjusted rent. (o) Lessee's remedy for any breach of Paragraph 12.1 by Lessor shall be limited to compensatory damages and/or injunctive relief. (f) Lessor may reasonably withhota consent to a proposed assignment or subletting if Lessee is in Default at the time consent Is requested. PAGE 9 OF 17 INITIALS INITIALS @2001 - AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM STG-15-4/12E (g) Notwithstanding the foregoing, allowing a de minim's portion of the Premises, I. 20 square feet or less, to be used by a third party vendor In connection with the installation of a vending machine or payphone shall not constitute a subletting. 12.2 Terms and Conditions Applicable to Assignment and Subletting. (a) Regardless of Lessor's consent, no assignment or subletting shall: (I) be effective without the express written assumption by such assignee or sublessee of the obligations of Lessee under this Lease, (il) release Lessee of any obligations hereunder, or (ill) alter the primary liability of Lessee for the payment of Rent or for the performance of any other obligations to be performed by Lessen. (b) Lessor may accept Rent or performance of Lessee's obligations from any person other than Lessee ponding approval or disapproval of an assignment. Neither a delay In the approval or disapproval of such assignment nor the acceptance of Rent or performance shalt constitute a waiver or estoppel of Lessor's right to exercise its remedies for Lessee's Default or Breach. (c) Lessor's consent to any assignment or subletting shall not constitute a consent to any subsequent assignment or subletting. (d) In the event of any Default or Breach by Lessee, Lessor may proceed directly against Lessee, any Guarantors or anyone &se responsible for the performance of Lessee's obligations under this Lease, including any assignee or sublessee, without first exhausting Lessor's remedies against any other person or entity responsible therefor to Lessor, or any security held by Lessor. (e) Each request for consent to an assignment or subletting shall bo In writing, accompanied by information relevant to Lessor's determination as to the financial and operational responsibility and appropriateness of the proposed assignee or sublessee, Including but not limited to the intended use and/or required modification of the Premises, If any, together with a fee of $500 as consideration for Lessor's considering and processing said request. Lessee agrees to provide Lessor with such other or additional information and/or documentation as may be reasonably requested. (Seo also Paragraph 36) (f) Any assignee of, or sublessee under, this Lease shall, by reason of accepting such assignment, entering Into such sublease, or entering into possession of the Premises or any portion thereof, be deemed lo have assumed and agreed to conform and comply with each and every term, covenant, condition and obligation heroin to be observed or performed by Lessee during the term of said assignment or sublease, other than such obligations as are contrary to or inconsistent with provisions of an assignment or sublease to which Lessor has specifically consented 10 in writing. (g) Lessors consent to any assignment or subletting shall not trensfer to the assignee or sublessee any Option granted to the original Lessee by this Lease unless such transfer Is specifically consented to by Lessor in writing. (See Paragraph 39.2) 12.3 Additional Terms and Conditions Appltcabto to Subletting. The following terms and conditions shall apply to any subletting by Lessee of all or any part of the Premises and shall be deemed Included In all subleases under this Lease whether or not expressly incorporated therein: (a) Lessee hereby assigns and transfers to Lessor all of Lessee's interest in all Rent payable on any sublease, and Lessor may collect such Rent and apply same toward Lessee's obligations under this Lease; provided, however, that until a Breach shall occur in the performance of Lessee's obligations, Lessee may collect said Rent. In the event that the amount collected by Lessor exceeds Lessee's then outstanding obligations any such excess shall be refunded to Lessee. Lessor shall not, by reason of the foregoing or any assignment of such sublease, nor by reason of the collection of Rent, be deemed liable to the sublessee for any failure of Lessee to perform and comply with any of Lessee's obligations to such sublessee. Lessee hereby irrevocably authorizes and directs any such sublessee, upon receipt of a written notice from Lessor stating that a Breach exists In the performance of Lessee's obligations under this Lease, to pay to Lessor all Rent due and to become duo under tho sublease. Sublessee shall rely upon any such notice from Lessor and shalt pay all Rents to Lessor without any ob'egatten or right to inquire as to whether such Breach exists. notwithstanding any claim from Lessee to the contrary. (b) In the event of a Breach by Lessee, Lessor may, at Its option, require sublessee to attorn to Lessor, In which event Lessor shall undertake the obttgatlons of the sublessor under such sublease from the time of the exercise of said option to the expiration of such sublease; provided, however, Lessor shall not be liable for any prepaid rents or security deposit paid by such sublessee to such sublessor or for any prior Defaults or Breaches of such sublessor. (c) Any matter requiring the consent of the sublessor under a sublease shall also require the consent of Lessor. (d) No sublessee shall further assign or sublet all or any part of the Premises without Lessor's prior written consent. (e) Lessor shall deliver a copy of any notice of Default or Breach by Lessee to the sublessee, who shall have the right to cure the Default of Lessee within the grace period, if any, specified in such notice. The sublessee shall have a right of reimbursement and offset from and against Lessee for any such Defaults cured by the sublessee. 13. Default; Breach; Remedies. 13.1 Default; Breach. A "Default" Is defined as a failure by the Lessee to comply with or perform any of the terms, covenants, conditions or Rules and Regulations under this Lease. A "Breach" Is defined as the occurrence of one or more of the following Defaults, and the failure of Lessee to cure such Default within any applicable grace perlod: (a) The abandonment of the Premises; or the vacating of the Premises without providing a commercially reasonable level of security, or where the coverage of the property Insurance described In Paragraph 8.3 is Jeopardized as a result thereof, or without providing reasonable assurances to minimize potential vandalism. (b) Tho failure of Lessee to make any payment of Rent or any Security Deposit required to be made by Lessee hereunder, whether to Lessor or to a third party, when due, to provide reasonable evidence of insurance or surety bond. or to fulfill any obligation under this Lease which endangers or threatens life or property, where such failure continues for a period of 3 business days following written notice to Lessee. THE ACCEPTANCE BY LESSOR OF A PARTIAL PAYMENT OF RENT OR SECURITY DEPOSIT SHALL NOT CONSTITUTE A WAIVER OF ANY OF LESSOR'S RIGHTS, INCLUDING LESSOR'S RIGHT TO RECOVER POSSESSION OF THE PREMISES. (c) The failure of Lessee to allow Lessor and/or its agents access to the Premises or the commission of waste, act or acts constituting public or private nuisance, and/or an Illegal activity on the Premises by Lessee, where such actions continue for a period of 3 business days following written notco to Lessee. (d) The failure by Lessee to provide (I) reasonable written evidence of compliance with Applicable Requirements, (ii) the service contracts, (Ili) the rescission of an unauthorized assignment or subletting, (iv) an Estoppel Certificate or financial statements, (v) a requested subordlnallon, (v1) evidence concerning any guaranty and/or Guarantor, (vii) any document requested under Paragraph 42, (viii) material safety data sheets (MSDS), or (Ix) any other documentation or Information which Lessor may reasonably require of Lessee under the terms of this Lease, where any such failure continues for a period of 10 days following written notice to Lessee. (e) A Default by Lessee as to the terms, covenants, conditions or provisions of this Lease, or of the rules adopted under Paragraph 40 hereof, other than those described In subparagraphs 13.1(a), (b), (c) or (d), above, where such Default continues for a period of 30 days after written notice; provided, however, that if the nature of Lessee's Default Is such that more than 30 days are reasonably required for Its cure, then it shall not be deemed to be a Breach If Lessee commences such cure within said 30 day period and thereafter diligently prosecutes such cure to completion. (1) The occurrence of any of the following events: (i) the making of any general arrangement or assignment for the benefit of creditors; (II) becoming a "debtor" as defined In 11 U.S.C. §101 or any successor statute thereto (unless, in the case of a petition filed against Lessee, the sante is dismissed within 60 days); (ill) the appointment of a trustee or receiver to take possession of substantially all of Lessee's assets located at PAGE 10 OF 17 INITIALS ©2001 - AIR COMMERCIAL REAL ESTATE ASSOCIATION INITIALS FORM STG-16-4112E the Premises or of Lessee's Interest In thls Lease, where possession is not restored to Lessee within 30 days; or (1v) the attachment, execution or other lud(cai seizure of substantially ail of Lessee's assets located at the Premises or of Lessee's interest In this Lease, where such seizure is not discharged within 30 days; provided, however, in the event that any provision of this subparagraph (e) Is contrary to any applicable law, such provision shall be of no force or effect, and not affect the validity of the remaining provisions. (g) The discovery that any financial statement of Lessee or of any Guarantor given to Lessor was matenally false. (h) If the performance of Lessee's et ligations under this Lease Is guaranteed: (I) the death of a Guarantor, CO the termination of a Guarantor's liability with respect to this Lease other than in accordance with the terms of such guaranty, (ill) a Guarantor's becoming insolvent or the subject of a bankruptcy filing, (iv) a Guarantor's refusal to honor the guaranty, or (v) a Guarantor's breach of its guaranty obligation on an anticipatory basis, and Lessee's failure, within 60 days following written notice of any such event, to provide written alternative assurance or security, which, when coupled with the then existing resources of Lessee, equals or exceeds the combined financial resources of Lessee and the Guarantors that existed at the time of execution of this Lease. 13.2 Remedies. If Lessee falls to perform any of its affirmative duties or obligations, within 10 days after written notice (or In case of an emergency, without notice), Lessor may, at its option, perform such duty or obligation on Lessee's behalf, including but not limited to the obtaining of reasonably required bonds, insurance policies, or governmental licenses, permits or approvals. Lessen shall pay to Lessor an amount equal to 115% of the costs and expenses incurred by Lessor In such performance upon receipt of an Invoice therefor. In the event of a Breach, Lessor may, with or without further notice or demand, and without linmiting lessor in the exercise of any right or remedy which Lessor may have by reason of such Breach: (a) Terminate Lessee's right to possession of the Premises by any lawful means, in which case this Lease shall terminate and Lessee shall immediately surrender possession to Lessor. In such event Lessor shall be entitled to recover from Lessee: (i) the Jnpaid Rent which had been earned at the time of termination; (10 the worth at the time of award of the amount by which the unpaid rent which would have been earned after termination until the time of award exceeds the amount of such rental loss that the Lessee proves could have been reasonably avoided; (III) the worth at the lime of award of the amount by which the unpaid rent for the balance of the tern after the lime of award exceeds the amount of such rental loss that the Lessee proves could he reasonably avoided; and (iv) any other amount necessary to compensate Lessor for all the detriment proximately caused by the Lessee's failure to perform Its obligations under this Lease or which in the ordinary course of things would be likely to result therefrom, Including but not limited to the cost of recovering possession of the Premises, expenses of retelling, Including necessary renovation and alteration of the Premises, reasonable attorneys' fees, and that portion of any leasing commission paid by Lessor in cornectlon with this Lease applicable to the unexpired term of this Lease. The worth at the lime of award of the amcunt referred to In provision (1I1) of the Immediately preceding sentence shall be computed by discounting such amount at the discount rate of the Federal Reserve Bank of the District within which the Premises are located at the time of award plus one percent. Efforts by Lessor to mitigate damages caused by Lessee's Breach of this Lease shall not waive Lessor's right to recover any damages to which Lessor Is otherwise entitled. If termination of this Lease is obtained through the provisional remedy of unlawful detainer, Lessor shall have the right to recover in such proceeding any unpaid Rant and damages as are recoverable therein, or Lessor may reserve the right to recover ell or any part thereof in a separate suit. If a notice and grace period required under Paragraph 13.1 was not previously given, a notice to pay rent or quit, or to perform or quit given to Lessee under the unlawful detainer statute shall also constitute the notice required by Paragraph 13.1. In such case, the applicable grace period required by Paragraph 13.1 and the unlawful detainer statute shall run concurrently, and the failure of Lessee to cure the Default within the greater of the two such grace periods shall constitute both an unlawful detainer and a Breach of this Lease entitling Lessor to the remedies provided for In this Lease and/or by said statute. (b) Continue the Lease and Lessee's right to possession and recover the Rent as It becomes due, in which event Lessee may sublet or assign, subject only to reasonable limitations. Acts of maintenance, efforts to relet, and/or the appointment of a receiver to protect the Lessors interests, shall not constitute a termination of the Lessee's right to possession. (c) Pursue any other remedy now or hereafter available under the laws or judicial decisions of the state wherein the Premises are located. The expiration or termination of this Lease and/or the termination of Lessee's right to possession shall not relieve Lessee from liability under any Indemnity provisions of Ihls Lease as to matters occurring or accruing during the term hereof or by reason of Lessee's occupancy of the Premises. 13.3 inducement Recapture. Any agreement for free or abated rent or other charges, or for the giving or paying by Lessor to or for Lessee of any cash or other bonus, Inducement or cons deration for Lessee's entering into this Lease, all of which concessions are hereinafter referred to as "Inducement Provisions," shall be deemed conditioned upon Lessee's full and faithful performance of all of the terms, covenants and conditions of this Lease. Upon Breach of this Lease by Lessee, any such inducement Provision shall automatically bo deemed deleted from this Lease and of no further force or effect, and any rent, other charge, bonus, Inducement or consideration theretofore abated, given or paid by Lessor under such an inducement Provision shall be immediately due and payable by Lessee to Lessor, notwithstanding any subsequent cure of said Breach by Lessee. The acceptance by Lessor of rent or the cure of the Breach which Initialed the operation of this paragraph shall not be deemed a waiver by Lessor of the provisions of this paragraph unless specifically so stated in writing by Lessor at the time of such acceptance. 13.4 Late Charges. Lessee hereby acknowledges that late payment by Lessee of Rent will cause Lessor to incur costs not contemplated by this Lease, the exact amount of which will be extremely difiicuit to ascertain. Such costs Include, but are not limited to, processing and accounting charges, and late charges which may be Imposed upon Lessor by any Lender. Accordingly, if any Rent shall not bo received by Lessor within 5 days after such amount shall be due, then, without any requirement for notice to Lessee, Lessen shall immediately pay to Lessor a one-time Tale charge equal to 10% of each such overdue amount or $100, whichever is greater. The Parties hereby agree that such late charge represents a fair and reasonable esti-nate of the costa Lessor will Incur by reason of such late payment. Acceptance of such late charge by Lessor shall in no event constitute a waiver 01 Lessee's Default or Breach with respect to such overdue amount, nor prevent the exercise of any of the other rights and remedies granted hereunder. In the event that a late charge Is payable Hereunder, whether or not collected, for 3 consecutive installments of Base Rent, then notwithstanding any provision of this Lease to the contrary, Base Rent shall, at Lessors option, become due and payable quarterly in advance. 13.5 Interest. Any monetary payment due Lessor hereunder, other than late charges, not received by Lessor, when due as to scheduled payments (such as Base Rent) or within 30 days following the date on which it was due for non-scheduled payment, shall bear interest from the date when duo, as to scheduled payments, or the 31st day after It was due as to non-scheduled payments. The interest ("Interest") charged shall be computed at the rate of 10% per annum but shall not exceed the maximunm rate allowed by law. Interest Is payable in addit on to the potential tato charge provided for in Paragraph 13.4. 13.6 Broach by Lessor. (a) Notice of Breach. Lessor shall not be deemed in breach of this Lease unless Lessor fails within a reasonable time to perform an obligation required to be performed by Lessor. For purposes of this Paragraph, a reasonable time shall in no event be less than 30 days after receipt by Lessor, and any Lender whose name and address shall have been furnished Lessee In writing for such purpose, of written notice specifying wherein such obligation of Lessor has not been performed; provided, however, that if the nature of Lessor's obligation Is such that more than 30 days are reasonably required for its performance, then Lesser shall not be in breach if performance is commenced within such 30 day period and thereafter diligently pursued to completion. (b) Performance by Lessee on Behalf of Lessor. In the event that neither Lessor nor Lender cures said breach within 30 clays PAGE 11 OF 17 INITIALS ©2001 - AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM STG-15-4/12E INITIALS after receipt of said notice, or If having commenced said cure they do not diligently pursue it to completion, then Lessee may elect to cure said breach at Lessee's expense and offset from Rent the actual and reasonable cost to perform such cure, provided however, that such offset shalt not exceed an amount equal to the greater of one month's Base Rent or the Security Deposit, reserving Lessee's right to seek reimbursement from Lessor for any such expense in excess of such offset. Lessee shall document the cost of said cure and supply said documentation to Lessor. 14. Condemnation. If the Premises or any portion thereof are taken under the power of eminent domain or sold under the threat of the exercise of said power (collectively "Condemnation"), this Lease shall terminate as to the part taken as of the date the condemning authority takes title or possession, whichever first occurs. If more than 10% of the Building, or more than 25% of that portion of the Premises not occupied by any building, is taken by Condemnation, Lessee may, al Lessee's option, to be exercised in writing within 10 days after Lessor shall have given Lessee written notice of such taking (or in the absence of such notice, within 10 cays after the condemning authority shall have taken possession) terminate this Lease as of the date the condemning authority takes such possession. If Lessee does not terminate this Lease In accordance with the foregoing, this Lease shall remain in full force and effect as to the portion of the Premises remaining, except that the Base Rent shall be reduced in proportion to the reduction In utility of the Premises caused by such Condemnation. Condemnation awards and/or payments shall bo the property of Lessor, whether such award shall bo made as compensation for diminution In value of the leasehold, the value of the pail taken, or for severance damages; provided, however, that Lessee shall be entitled to any compensation paid by the condemnor for Lessee's relocation expenses, loss of business goodwill and/or Trade Fixtures, without regard to whether or not this Lease Is terminated pursuant to the provisions of this Paragraph. AII-Atteratlone-and-Utlfity. Installations made to the -Premises -by Lessee, far purposesof-Gondenmation only, -shall beconsidered-the-preper y of-the-L-essee-and-Lessee-shall-ha entitled to any -and all sempeesatlo 1-w Yell-is$ayebte therefec, In the event that this Lease is not terminated by reason of the Condemnation, Lessor shall repair any damage to the Premises caused by such Condemnation. 15. Brokerage Fees. 15.1 Additional Commission. If a separate brokerage feo agreement is attached then In addition to the payments owed pursuant to Paragraph 1.9 above, and unless Lessor and the Brokers otherwise agree In writing, Lessor agrees that: (a) if Lessee exercises any Option, (b) if Lessee or anyone affiliated with Lessee acquires any rights to the Premises or other premises owned by Lessor and located within the same Project, if any, within which the Premises Is located, (c) If Lessee remains In possession of the Premises, with the consent of Lessor, after the expiration of this Lease, or (d) If Base Rent is Increased, whether by agreement or operation of an escalation clause herein, then, Lessor shall pay Brokers a fee In accordance with the schedule attached to such brokerage fee agreement. 15.2 Assumption of Obligations. Any buyer or transferee of Lessor's interest in this Lease shall be deemed to I'ave assumed Lessor's obligation hereunder. Brokers shall be third pally beneficiaries of the provisions of Paragraphs 1.9, 15, 22 and 31. If Lessor fails to pay to Brokers any amounts due as and for brokerage fees pertaining to this Lease when due, then such amounts shall accrue Interest. In addition, if Lessor fails to pay any amounts to Lessee's Broker when due, Lessee's Broker may send written notice to Lessor and Lessee of such failure and if Lessor fails to pay such amounts within 10 days after said notice, Lessee shall pay said montes to its Broker and offset such amounts against Rent. In addition, Lessee's Broker shall be deemed to be a third party beneficiary of any commission agreement entered into by and/or between Lessor and Lessor's Broker for the limited purpose of collecting any brokerage fee owed. 15.3 Representations and indemnities of Broker Relationships. Lessee and Lessor each represent and warrant to the other that it has had no dealings with any person, firm, broker or finder (other than the Brokers, if any) in connection with this Lease, and that no one other than said named Brokers Is entitled to any commission or finder's fee in connection herewith. Lessee and Lessor do each hereby agree to indemnify, protect, defend and hold the other harmless from and against liability for compensation or charges which may be claimed by any such unnamed broker, finder or other similar party by reason of any dealings or actions of the Indemnifying Party, including any costs, expenses, attorneys' fees reasonably Incurred with respect thereto. 16. Estoppel Certificates. (a) Each Party (as "Responding Party") shell within 10 days after written notice from the other Party (the "Requesting Party") execute, acknowledge and deliver to the Requesting Party a statement in writing In form similar to the then most current "Estoppel Certificate" form published by the AIR Commercial Real Estate Association, plus such additional Information, confirmation and/or statements as may be reasonably requested by the Requesting Party. (b) If the Responding Party shall fail to execute or deliver the Estoppel Certificate within such 10 day period, the Requesting Party may execute an Estoppel Certificate stating that: (I) the Lease is In full force and effect without modification except as may be represented by the Requesting Party, (II) there are no uncured defaults In the Requesting Partys performance, and (III) if Lessor is the Requesting Party, not more than one month's rent has been paid In advance. Prospective purchasers and encumbrancers may rely upon the Requesting Party's Estoppel Certificate, and the Responding Party shall be estopped from denying the truth of the facts contained in said Certificate. In addition, Lessee acknowledges that any failure on Its part to provide such an Estoppel Certificate will expose Lessor to risks and potentially cause Lessor to incur costs not contemplated by this Lease, the extent of which will be extremely difficult to ascertain. Accordingly, should the Lessee fall to execute and/or deliver a requested Estoppel Certificate in a timely fashion the monthly Base Rent shall be automatically Increased, witnoul any requirement for notice to Lessen, by an amount equal to 10% of the then existing Base Rent or 5100, whichever Is greater for remainder of the Lease. The Parties agree that such incroaso In Base Rent represents fair and reasonable compensation for the additional risk/costs that Lessor will incur by reason of Lessee's failure to provide the Estoppel Certificate. Such increase in Base Rent shall in no event constitute a waiver of Lessee's Default or Breach with respect to the failure to provide the Estoppel Certificate nor prevent the exercise of any of the other rights and remedies granted hereunder. (c) if Lessor desires to finance, refinance, or sell the Premises, or any part thereof, Lessee and all Guarantors shall within 10 days after written notice from Lessor deliver to any potential lender or purchaser designated by Lessor such financial statements as may be reasonably required by such lender or purchaser, including but not limited to Lessee's financial statements for the past 3 years. All such financial statements shall be received by Lessor and such lender or purchaser in confidence and shalt bo used only for the purposes herein set forth. 17. Definition of Lessor. The term "Lessor' as used herein shall mean the owner or owners at the time In question of the fee title to the Premises, or, if this Is a sublease, of the Lessee's Interest in the prior lease. In the event of a transfer of Lessor's title or interest In the Premises or this Lease, Lessor shall deliver to the transferee or assignee (in cash or by credit) any unused Security Deposit held by Lessor. Upon such transfer or assignment and delivery of the Security Deposit, as aforesaid, the prior Lessor shall be relieved of all liability with respect to the obligations and/or covenants under this Lease thereafter to be performed by the Lessor. Subject to the foregoing, the obligations and/or covenants In thls Lease to be performed by the Lessor shall be binding only upon the Lessor as herelnabove defined. 18, Saverabtllty. The invalidity of any provision of this Lease, as determined by a court of competent jurisdiction, shall In no way affect the validity of any other provision hereof. 19. Days. Unless otherwise specifically Indicated to the contrary, the word "days" as used In this Lease shall mean and refer to calendar days. 20. Limitation on Liability. The obligations of Lessor under this Lease shall not constitute personal obligations of Lessor or its partners, members, directors, officers or shareholders, and Lessee shall look to the Premises, and to no other assets of Lessor, for the satisfaction of any liability of Lessor with respect to thls Lease, and shall not seek recourse against Lessor's partners, members, directors, officers or shareholders, or any of their PAGE 12 OF 17 INITIALS INITIALS ©2001 - AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM STG-15-4/12E personal assets for such satisfaction. 21. Time of Essence. Time is of the essence with respect to the performance of all oblfgatlons to be performed or observed by the Parties under this Lease. 22. No Prior or Other Agreements; Broker Disclaimer. This Lease contains all agreements between the Parties with respect to any matter mentioned herein, and no other prior or contemporaneous agreement or understanding shall be effective. Lessor and Lessee each represents and warrants to the Brokers that ft has made, and Is relying solely upon, Its own investigation as to the nature, quality, character and financial responsibility of the other Party to this Lease and as to the use, nature, quality and character of the Premises. Brokers have no responsibility with respect thereto or with respect to any default or breach hereof by either Party. 23. Notices. 23.1 Nottce Requirements. All notices required or permitted by this Lease or applicable law shall be in writing and may be delivered In person (by hand or by courier) or may be sent by regular, certified or registered mail or U.S. Postal Service Express Mail, with postage prepaid, or by facsimile transmission, and shall be deemed sufficiently given If served In a manner specified In this Paragraph 23. The addresses noted adjacent to a Party's signature on this Lease shall be that Party's address for delivery or mailing of notices. Either Party may by written notice to the other specify a different address for notice, except that upon Lessee's taking possession of the Premises, the Premises shall constitute Lessee's address for notice. A copy of ail notices to Lessor shall be concurrently trans.milted to such party or parties at such addresses as Lessor may from lime to time hereafter designate in writing. 23.2 Date of Notice. Any notice sent by registered or certified mall, return receipt requested, shall be deemed given on the dale of delivery shown on the receipt card, or If no delivery date Is shown, the postmark thereon. II sent by regular mall the notice shall be deemed given 72 hours after the sante is addressed as required herein and mailed with postage prepaid. Notices delivered by United States Express Mali or overnight courier that guarantees next day delivery shall be deemed given 24 horns after delivery of the same to the Postai Service or courier. Notices transmitted by facsimile transmission or similar means shall be deemed delivered upon telephone confirmation of receipt (cont enation report from fax machine is sufficient), provided a copy Is also delivered via delivery or mail. If notice Is received on a Saturday, Sunday or legal holiday, it shall bo deemed received on the next business day. 24. Waivers. (a) No waiver by Lessor of the Default or Breach of any term, covenant or condition hereof by Lessee, shall be deemed a waiver of any other term, covenant or condition hereof, or of any subsequent Default or Breach by Lessee of the same or of any other term, covenant or condition hereof. Lessor's consent to, or approval of, any act shall not be deemed to render unnecessary lire obtaining of Lessor's consent to, or approval of, any subsequent or similar act by Lessee, or be construed as the basis of an estoppel to enforce the provision or provisions of this Lease requiring such consent. (b) The acceptance of Rent by Lessor shall rot be a waiver of any Default or Breach by Lessee. Any payment by Lessee may be accepted by Lessor on account of moneys or damages due Lessor, notwithstanding any qualifying statements or conditions made by Lessee in connection therewith, which such statements and/or conditions shall be of no force or effect whatsoever unless specifically agreed to In writing by Lessor at or before the time of deposit of such payment. (c) THE PARTIES AGREE THAT THE TERMS OF 'THiS LEASE SHALL GOVERN WITH REGARD TO ALL MATTERS RELATED THERETO AND HEREBY WAIVE THE PROVISIONS OF ANY PRESENT OR FUTURE STATUTE TO THE EXTENT THAT SUCH STATUTE IS INCONSISTENT WITH THIS LEASE. 25. Disclosures Regarding Tho Nature of a Real Estate Agency Relationship. ;a} When entering Into a discussion with a real estate agent regarding a real estate transaction, a Lossor or Lessee should from the outset understand what type of agency relationship or representation It has with the agent or agents in the transaction. Lessor and Lessee acknowledge being advised by the Brokers in this transaction, as follows: (I) Lessor's Agent. A Lessor's agent under a listing agreement with the Lessor acts as the agent for the Lessor only. A Lessor's agent or subagent has the following affirmative obligations: To the Lessor: A fiduciary duty of utmost care, Integrity, honesty, and loyalty In dealings with the Lessor. To the Lessee anc the Lessor: a. Diligent exercise of reasonable skills and care in performance of the agent's duties. b. A duty of honest and fair dealing and good faith. c. A duty to disclose all facts known to the agent materially affecting the value or desirability of the property that are not known to, or within the diligent attention and observation of, the Parties. An agent is not obligated to reveal to either Party any confidential Information obtained from the other Party which does not involve the affirmative duties set forth above. (ii) I.essee's Agent An agent can agree to act as agent for the Lessee only. In these situations, the agent Is not the Lessor's agent, even if by agreement the agent may receive compensation for services rendered, either In full or In part from the Lessor. An agent acting only for a Lessee has the following affirmative obligations. To the Lessee: A fiduciary duty of utmost care, Integrity, honesty, and loyalty In dealings with the Lessen. To the Lessee and the Lessor: a. Diligent exercise of reasonable skills and care in performance of the agent's duties. b. A duty of honest and fair dealing and good faith. c. A duty to disclose all facts known to the agent materially affecting the value or desirability of the property that are not known to, or within the diligent attention and observation of, the Parties. An agent is not obligated to reveal to either Party any confidential Information obtained from the other Party which does not involve the affirmative duties set forth above. (ill) ekgent Representing Both Lessor and Lesse@. A real estate agent, either acting directly or through one or more associate licenses, can legally bo the agent of both the Lessor and the Lessen in a transaction, but only with the knowledge and consent of both the Lessor and the Lessee. In a dual agency situation, the agent has the following affirmative obligations to both the Lessor and the Lessee: a. A fiduciary duty of utrnost care. Integrity, honesty and loyalty in the dealings with either Lessor or the Lessee. b. Other duties to the Lessor and the Lessee as slated above In subparagraphs (I) or (iq. In representing both Lossor and Lessee, the agent may not without the express permission of the respective Party, disclose to the other Party that the Lessor will accept rent to an amount less than that indicated in the listing or that the Lessee Is walling to pay a higher rent than that offered. The above duties of the agent in a real estate transaction do not relieve a Lessor or Lessee from the responsibility to protect their own Interests. Lessor and Lessee shoutd arefully read all agreements to assure that they adequately express their understanding of the transaction. A real estate agent Is a person qualified to advise about real estate. If legal or tax advice Is desired, consult a competent professional. (b) Brokers have no responsibility with respect to any default or breach hereof by either Party. The Parties agree that no lawsuit or other legal proceeding involving any breach of duty, error or omission relating to this Lease may bo brought against Broker more than one year after the Start Date and that the liability (including court costs and attorneys' fees), of any Broker with respect to any such lawsuit and/or legal proceeding shall not exceed the fee received by such Broker pursuant to this Lease; provtced, however, that the foregoing limitation on each Broker's liability shall not be appiicabte to any gross negligence or willful misconduct of such Broker. (c) Lessor and Lessee agree to identify to Brokers as "Confidential" any communication or information given Brokers that is considered by such Party to be confidential. 26. No Right To Holdover. Lessee has no right to retain possession of the Premises or any part thereof beyond the expiration or termination of PAGE 13 OF 17 INITIALS INITIALS (D2001 - AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM STG-15-4112E this Lease. In the event that Lessee holds over, then the Base Rent shall be Increased to 150% of the Base Rent applicable Immediately preceding the expiration or termination. Nothing contained herein shall be construed as consent by Lessor to any holding over by Lessee. 27. Cumulative Remedies. No remedy or election hereunder shall be deemed exclusive but shall, wherever possible, be cumulative with all other remedies at law or In equity. 28. Covenants and Conditions; Construction of Agreement. All provisions of this Lease to be observed or performed by Lessee are both covenants and conditions. In construing this Lease, all headings and titles are for the convenience of the Parties only and shall not be considered a part of this Lease. Whenever required by the context, the singular shall include the plural and vice versa, This Lease shall not be construed as If prepared by one of the Parties, but rather according to Its fair meaning as a whole, as if both Parties had prepared It. 29. Binding Effect; Choice of Lew. This Lease shell be binding upon the Parties, their personal representatives, successors and assigns and be governed by the Paws of the State In which the Premises are located. Any litigation between the Parties hereto concerning this Lease shall be Initiated in the county in which the Premises are located. 30. Subordination; Attornment; Non -Disturbance. 30.1 Subordination, Thls Lease and any Option granted hereby shall be subject and subordinate to any ground lease, mortgage, deed of trust, or other hypothecation or security device (collectively, "Security Device"), now or hereafter placed upon the Premises, to any and all advances made on the security thereof, and to all renewals, modifications, and extensions thereof. Lessee agrees that the holders of any such Security Devices (in this Lease together referred to as "Lender") shall have no liability or obligation to perform any of the obligations of Lessor under this Lease. Any Lender may elect lc have this Lease and/or any Option granted hereby superior to the ilen of its Security Device by giving written notice thereof to I.essee, whereupon this Lease and such Options shall be deemed prior to such Security Device, notwithstanding the relative dates of the documentation or recordation thereof. 30.2 Attornment. In the event that Lessor transfers title to the Premises, or the Premises are acquired by another upon the foreclosure or termination of a Security Devise to which thls Lease Is subordinated (I) Lessee shall, subject to the non -disturbance provisions of Paragraph 30.3, attorn to such new owner, and upon request, enter Into a new lease, containing all of the terms and provisions of this Lease, with such new owner for the remainder of the term hereof, or, at the election of the new owner, this Lease will automatically become a new lease between Lessee and such new owner, and (it) Lessor shall thereafter be relieved of any further obligations hereunder and such new owner shall assume all of Lessor's obligations, except that such new owner shall not: (a) be liable for any act or omission of any prior lessor or with respect to events occurring prior to acquisition of ownership; (b) be subject to any offsets or defenses which Lessee might have against any prior lessor, (c) be bound by prepayment of more than one month's rent, or (d) be liable for the return of any security deposit paid to any prior lessor which was not paid or credited to such new owner. 30.3 Non -Disturbance. With respect to Security Devices entered into by Lessor after the execution of this Lease, Lessee's subordination of this Lease shall be subject to receiving a commercially reasonable non -disturbance agreement (a "Non -Disturbance Agreement") from the Lender which Non -Disturbance Agreement provides that Lessee's possession of the Premises, and this Lease, Including any options to extend the term hereof, will not be disturbed so long as Lessee Is not In Breach hereof and attorns to the record owner of the Premises. Further, within 60 days after the execution of this Lease, Lessor shall, if requested by Lessee, use its commercially reasonable efforts to obtain a Non -Disturbance Agreement from the holder of any pre-existing Security Device which Is secured by the Premises. In the event that Lessor is unable to provide the Non -Disturbance Agreement within said 60 days, then Lessee may, at Lessee's option, directly contact Lender and attempt to negotiate for the execution and delivery of a Non -Disturbance Agreement. 30.4 Self -Executing. The agreements contained In this Paragraph 30 shall be effective without the execution of any further documents; provided, however, that, upon written request from Lessor or a Lender In connection with a sale, financing or refinancing of the Premises, Lessee and Lessor shall execute such further writings as may be reasonably required to separately document any subordination, attornment and/or Non -Disturbance Agreement provided for herein. 31. Attorneys' Fees. If any Party or Broker brings an action or proceeding involving the Premises whether founded in tort, contract or equity, or to declare rights hereunder, the Prevailing Party (as hereafter defined) In any such proceeding, action, or appeal thereon, shall be entitled to reasonable attorneys' fees. Such fees may be awarded in the same suit or recovered in a separate suit, whether or not such action or proceeding Is pursued to decision or judgment. Tho term, "Prevailing Party" shall include, without limitation, a Party or Broker who substantially obtains or defeats the relief sought, as the case may be, whether by compromise, settlement, judgment, or the abandonment by the other Party or Broker of its claim or defense. Tho attorneys' fees award shall not bo computed In accordance with any court fee schedule, but shall bo such as to fully reimburse all attorneys' fees reasonably incurred In addition, Lessor shall be entitled to attorneys' fees, costs and expenses Incurred in the preparation and service of notices of Default and consultations In connection therewith, whether or not a legal action Is subsequently commenced In connection with such Default or resulting Breach ($200 is a reasonable minimum per occurrence for such services and consultation). 32. Lessor's Access; Showing Premises; Repairs. Lessor and Lessor's agents shall have the right to enter the Prermses at any time, In the case of an emergency, and otherwise at reasonable times after reasonable prior notice for the purpose of showing the same to prospective purchasers, lenders, or tenants, and making such alterations, repairs, Improvements or additions to the Premises as Lessor may deem necessary or desirable and the erecting, using and maintaining of utilities, services, pipes and conduits through the Premises and/or other premises as long as there is no material adverse effect to Lessee's use of the Premises. All such activities shall he without abatement of rent or liability to Lessee. 33, Auctions. Lessee shall not conduct, nor permit to be conducted, any auction upon the Premises without Lessor's prior written consent. Lessor shall not be obligated to exercise any standard of reasonableness in determining whether to permit an auction. 34. Signs. Lessor may place on the Premises ordinary "For Sale" signs at any time and ordinary "For Lease" signs during the last 6 months of the term hereof. Except for ordinary "for sublease" signs, Lessee shall not place any sign upon the Premises without Lessor's prior written consent, All signs must comply with all Applicable Requirements. 35. Termination; Merger. Unless specifically stated otherwise In writing by Lessor, the voluntary or other surrender of this Lease by Lessee, the mutual termination or cancellation hereof, or a termination hereof by Lessor for Breach by Lessee, shall automatically terminate any sublease or lesser estate in the Premises; provided, however, that Lessor may elect to continue any one or all existing subtenancies. Lessor's failure within 10 days following any such event to elect to the contrary by written notice to the holder of any such lesser interest, shalt constitute Lessor's election to have such event constitute the termination of such Interest. 36. Consents. Except as otherwise provided herein, wherever In this Lease the consent of a Party is required to an act by or for the other Party, such consent shall not be unreasonably withheld or delayed. Lessor's actual reasonable costs and expenses (including but not limited to architects', attorneys', engineers' and other consultants' fees) Incurred in the consideration ol, or response to, a request by Lessee for any Lessor consent, including but not limited to consents to an assignment, a subletting or the presence or use of a Hazardous Substance, shall be paid by Lessee upon receipt of an Invoice and supporting documentation therefor. Lessor's consent to any act, assignment or subletting shall not constitute an acknowledgment that no Default or Breach by Lessee of this Lease exists, nor shall such consent be deemed a waiver of any then existing Default or PAGE 14 OF 17 INITIALS INITIALS 2001 - AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM STG-15-4112E Breach, except as may be otherwise specifically stated in writing by Lessor at the time of such consent. The failure to specify herein any particular condition to Lessor's consent shall not preclude the imposition by Lessor at the time of consent of such further or other conditions as are then reasonable with reference to the particular matter for which consent is being given. In the event that either Party disagrees with any determination made by the other hereunder and reasonably requests the reasons for such determination, the determining party shall furnish Its reasons in writing and in reasonable detail within 10 business days following such request. 37. Guarantor. 37.1 Executton. The Guarantors, if any, shall each execute a guaranty In the form most recently published by the AIR Commercial Real Estate Association. 37.2 Default. II shall constitute a Default of the Lessee If any Guarantor fails or refuses, upon request to provide: (a) evidence of the execution of the guaranty, including the authority of the party signing on Guarantor's behalf to obligate Guarantor, and In the case of a corporate Guarantor, a certified copy of a resolution of its board of directors authorizing the making of such guaranty, (b) current financial statements, (c) an Estoppel Certificate, or (d) written confirmation that the guaranty Is still In effect. 38. Quiet Possession. Subject to payment by Lessee of the Rent and performance of all of the covenants, conditions and provisions on Lessee's part to be observed and performed under thls Lease, Lessee shall have quiet possession and quiet enjoyment of the Premises during the term hereof. 39. Options. If Lessee is granted an Option, as defined below, then the following provisions shall apply: 39.1 Definition, "Option" shall mean; (a) the right to extend or reduce the term of or renew this Lease or to extend or reduce the term of or renew any lease that Lessee has on other property of Lessor; (b) the right of first refusal or first offer to lease either the Premises or other property of Lessor; (c) the right to purchase, the right of first offer to purchase or the right of first refusal to purchase the Premises or other property of Lessor. 39.2 Options Personal To Original Lessen. Any Option granted to Lessee In this Lease Is personal to the original Lessee, and cannot be assigned or exercised by anyone other than said original Lessee and only while the original Lessee Is in full possession of the Premises and, if requested by Lessor, with Lessee certifying that Lessee has no Intention of thereafter assigning or subletting. 39.3 Multiple Options. In the event that Lessee has any multiple Options to extend or renew this Lease, a later Option cannot be exercised unless the prior Options have been validly exercised. 39.4 Effect of Default on Options. i'.a) Lessee shall have no right to exercise an Option: (I) during the period commencing with the giving of any notice of Default and continuing until said Default is cured, (11) during the period of time any Rent is unpaid (without regard to whether notice thereof is given Lessee), (111) during the time Lessee Is iri Broach of this Lease, or (iv) In the event that Lessee has been given 3 or more notices of separate Default, whether or not the Defaults are cured, during the 12 month period Immediately preceding the exercise of the Option. (b) The period of time within which an Option may be exercised shall not be extended or enlarged by reason of Lessee's inability to exercise art Option because of the provisions of Paragraph 39.4(a). (c) An Option shall terminate and be of no further force or effect, notwithstanding Lessee's due and timely exercise of the Option, if, after such exercise and prior to the commencement of the extended tern or completion of the purchase, (I) Lessee falls to pay Rent for a period of 30 days after such Rent becomes due (without any necessity of Lessor to give notice thereof), or (I1) if Lessee commits a Breach of this Lease. 40. Multiple Buildings. If the Premises are a part of a group of buildings controlled by Lessor, Lessee agrees that It will abide by and conform to all reasonable rules and regulations which Lessor may make from time to time for the management, safety, and care of said properties, including the care and cleanliness of the grounds and including the parking, loading and unloading of vehicles, and to cause its employees, suppliers, shippers, customers, contractors and Invitees to so abide and conform. Lessee also agrees to pay its fair sharp of common expenses incurred in connection with such rules and regulations. 41. Security Measures. Lessee hereby acknowledges that the Rent payable to Lessor hereunder does not include the cost of guard service or other security measures, and that Lessor shall have no obligation whatsoever to provide same. Lessee assumes all responsibility for the protection of the Premises, Lessee, its agents and Invitees and their property from the acts of third parties. 42. Reservations. Lessor reserves to Itself the right, from time to time, to grant, without the consent or joinder of Lessee, such easements, rights and dedications that Lessor deems necessary, and to cause the recordation of parcel maps and restrictions, so long as such easements, rights, dedications, maps and restrictions do not unreasonably Interfere with the use of the Premises by Lessee. Lessee agrees to glgn any documents reasonably requested by Lessor to effectuate any such easement rights, dedication, map or restrictions. 43. Performance Under Protest. If at any time a dispute shall arise as to any amount or sum of money to be paid by one Party to tete other under the provisions hereof, the Party against whom the obligation to pay the money is asserted shall have the right to make payment "under protest" and such payment shall not be regarded as a voluntary payment and there shall survive the eght on the part of said Party to institute suit for recovery of such sum. 1111 shall be adjudged that there was no legal obligation on tho part of said Party to pay such sum or any part thereof, said Party shall be untitled to recover such sum or so much thereof as It was not legally required to pay. A Party who dons not Initiate suit for the recovery of sums paid "under protest" within 6 months shall be deemed to have waived its right to protest such payment. 44. Authority; Multiple Partlos; Execution. (a) If either Party hereto Is a corporation, trust, limited liability company, partnership, or similar entity, each individual executing this Lease on behalf of such entity represents and warrants that he or she Is duly authorized to execute and deliver thls Lease on its behalf. Each Party shall, within 30 days after request, deliver to the other Party satisfactory evidence of such authority. (b) If this Lease Is executed by more than one person or entity as "Lessee", each such person or entity sha;l be jointly and severally liable hereunder. It is agreed that any one of the named Lessees shall be empowered to execute any amendment to this Lease, or other document ancillary thereto and bind all of the named Lessees, and Lessor may rely on the same as if all of the named Lessens had executed such document. (c) Thls Lease may be executed by the Parties In counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same Instrument. 45. Conflict. Any conflict between the printed provisions of this Lease and typewritten or handwritten provisions shall be controlled by the typewritten or handwritten provisions. 46. Offer. Preparation of this Lease by either Party or their agent and submission of same to the other Party shall not be deemed an offer to lease to the other Party. This Lease Is not Intended to be binding until executed and delivered by all Parties hereto. 47. Amendments. This Lease may be modified only in writing, signed by the Parties In Interest at the time of the modification. As long as they do not materially change Lessee's obligations hereunder, Lessee agrees to make such reasonable non•monetary modifications to this Lease as may be reasonably required by a Lender in connection with the obtaining of normal financing or refinancing of the Premises, 48. Waiver of Jury Trial. THE PARTIES HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO TRIAL BY JURY IN ANY ACTION OR PAGE 15 OF 17 INITIALS INITIALS ©2001 - AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM STG-15-4/12E PROCEEDING INVOLVING THE PROPERTY OR ARISING OUT OF THIS AGREEMENT. 49. Arbitration of DIsputes. An Addendum requiring the Arbitration of disputes between the Parties and/or Brokers arising out of this Lease ❑ Is 0 is not attached to thls Lease. 50. Americans with Disabilities Act. Since compliance with the Americans with Disabilities Act (ADA) Is dependent upon Lessee's specific use of the Premises, Lessor makes no warranty or representation as to whether or not the Premises comply with ADA or any similar legislation. In the event that Lessee's use of the Premises requires modifications or additions to the Premises In order to be In ADA compliance, Lessee agrees to make any such necessary modlticatlons and/or additions at Lessee's expense. LESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM AND PROVISION CONTAINED HEREIN, AND BY THE EXECUTION OF THIS LEASE SHOW THEIR INFORMED AND VOLUNTARY CONSENT THERETO. THE PARTIES HEREBY AGREE THAT, AT THE TIME THIS LEASE l3 EXECUTED, THE TERMS OF THIS LEASE ARE COMMERCIALLY REASONABLE AND EFFECTUATE THE INTENT AND PURPOSE OF LESSOR AND LESSEE WITH RESPECT TO THE PREMISES. ATTENTION; NO REPRESENTATION OR RECOMMENDATION IS MADE BY THE AIR COMMERCIAL REAL ESTATE ASSOCIATION OR BY ANY BROKER AS TO THE LEGAL SUFFICIENCY, LEGAL EFFECT, OR TAX CONSEQUENCES OF THIS LEASE OR THE TRANSACTION TO WHICH IT RELATES. THE PARTIES ARE URGED TO: 1. SEEK ADVICE OF COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS LEASE. 2. RETAIN APPROPRIATE CONSULTANTS TO REVIEW AND INVESTIGATE THE CONDITION OF THE PREMISES. SAID INVESTIGATION SHOULD INCLUDE BUT NOT BE LIMITED TO: THE POSSIBLE PRESENCE OF HAZARDOUS SUBSTANCES, THE ZONING OF THE PREMISES, THE STRUCTURAL INTEGRITY, THE CONDITION OF THE ROOF AND OPERATING SYSTEMS, AND THE SUITABILITY OF THE PREMISES FOR LESSEE'S INTENDED USE. WARNING; IF THE PREMISES IS LOCATED IN A STATE OTHER THAN CALIFORNIA, CERTAIN PROVISIONS OF THE LEASE MAY NEED TO BE REVISED TO COMPLY WITH THE LAWS OF THE STATE IN WHICH THE PREMISES IS LOCATED. The parties hereto have executed this Lease at the place and on the dates specified above their respective signatures. Executed at: Rainbow, California Executed at: Temecula, California On: June , 2012 On: June , 2012 By LESSOR: By LESSEE: Richard B. Gurrola and Valerie Gurrola, Temecula Marine Center, Inc. Trustees of the Gurrola Family Trust By: By: Name Printed: Richard A. Gurro1a Name Printed: Michael J. Smith Title: Trustee Titte: By: By: Name Printed: Valerie Gurrola Name Printed: Christine M. Smith Title: Trustee Title: Address: 5590 Rainbow Creek Road Address: Rainbow, CA 92028 Telephone: (760) 728-4339 Telephone: ( Facsimile: () Facsimile: ( ) Email: richgurrola@yahoo. com Email: Email: Email: Federal ID No. Federal ID No. BROKER: BROKER: PAGE 16 OF 17 INITIALS INITIALS ©2001 - AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM STG-16-4112E Alt: Ati: Title: Title: Address: Address: Telephone:( ) Telephone:( ) Facsimile:( ) Facsimile:() Email: Email: _ Federal ID No. Federal ID No. Broker/Agent DRE License #: Broker/Agent DRE License #: NOTICE: These forms are often modified to meet changing requirements of raw and Industry needs. Always write or call to make sure you are utilizing the most current form: AIR Commercial Real Estate Association, 800 W 6th Street, Suite 800, Los Angeles, CA 90017. Telephone No. (213) 687-8777. Fax No.: (213) 687-8616. © Copyright 2001 - By AIR Commercial Real Estate Association. All rights reserved. No part of these works may be reproduced In any form without permission In writing. PAGE 17 OF 17 INITIALS INITIALS ©2001 - AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM STG-16-0112E ADDENDUM TO STANDARD INDUSTRIAL/COMMERCIAL MULTI -TENANT LEASE - GROSS DATED MAY 25, 2012 51. Notwithstanding anything to the contrary set forth above in paragraphs 4.3 and 11 above, Lessee shall not be required to pay for any utilities, services and/or association fees which have not been previously charged to, or paid for by, Lessee. 52. Early Termination Right: Lessee shall have the right to terminate this Lease upon thirty days written notice to Lessor, which notice may be given no sooner than October 2, 2012, or on the date that Lessor transfers title to the property to the City of Temecula, whichever first occurs." In the event of any conflict between the provisions of the Addendum and the Lease, the provisions of this Addendum shall control. Initials Exhibit "G" [Form of Right of Entry] 11086-0166\1464915v1.doc RIGHT OF ENTRY AND ACCESS AGREEMENT THIS RIGHT OF ENTRY AND ACCESS AGREEMENT (herein called this "Agreement") is made and entered into as of , 2012 (the "Effective Date"), by Richard B. Gurrola and Valerie M. Gurrola, Trustees of the Gurrola Family Trust Under Declaration Dated Dec. 27, 2001, Robert A. Gurrola, Gary S. Gurrola, and Richard B. Gurrola II (herein called collectively "Grantors"), and the CITY OF TEMECULA, a municipal corporation (herein called "Grantee"). WITNESSETH: WHEREAS, Grantors are the record fee owners of the real property commonly known as 27495 Enterprise Circle West, Temecula, California, and identified as Riverside County Tax Assessor's Parcel Number 921-480-013, which is more particularly described on Exhibit "A" and depicted on Exhibit "B", which Exhibits are attached hereto and incorporated herein by reference (herein called the "Property"); WHEREAS, Grantors and Grantee contemplate entering into a Purchase and Sale Agreement and Escrow Instructions related to the Property (the "Purchase Agreement"); WHEREAS, Grantee has requested the right of entry upon and access to the Property for the purpose of undertaking tests, inspections and other due diligence activities (herein called the "Due Diligence Activities") in connection with the proposed acquisition by Grantee of the Property under the Purchase Agreement; WHEREAS, Grantors have agreed to grant to Grantee, and Grantee has agreed to accept from Grantors, a non-exclusive, revocable license to enter upon the Property to perform the Due Diligence Activities in accordance. with the terms and provisions of this Agreement; WHEREAS, Grantors and Grantee desire to execute and enter into this Agreement for the purpose of setting forth their agreement with respect to the Due Diligence Activities and Grantee's entry upon the Property. NOW, THEREFORE, for and in consideration of the foregoing premises, the mutual covenants and agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Grantors and Grantee do hereby covenant and agree as follows: 1. Access by Grantee. a. Subject to Grantee's compliance with the terms and provisions of this Agreement, until the earlier of the following: 30 calendar days from the Effective Date of this Agreement, or (ii) the earlier termination of this Agreement, Grantee and Grantee's agents, employees, contractors, representatives and other designees (herein collectively called 11086-0166\ 1400480 v.doc "Grantee's Designees") shall have the right to enter upon the Property for the purpose of conducting the Due Diligence Activities. b. Grantee expressly agrees as follows: (i) any activities by or on behalf of Grantee, including, without limitation, the entry by Grantee or Grantee's Designees onto the Property in connection with the Due Diligence Activities shall not damage the Property in any manner whatsoever or disturb or interfere with the rights or possession of any tenant on the Property, (ii) in the event the Property is altered or disturbed in any manner in connection with the Due Diligence Activities, Grantee shall immediately return the Property to the condition existing prior to the Due Diligence Activities, and (iii) Grantee, to the maximum extent allowed by law, shall indemnify, defend and hold Grantors harmless from and against any and all claims, liabilities, damages, losses, costs and expenses of any kind or nature whatsoever (including, without limitation, attorneys' fees and expenses and court costs) suffered, incurred or sustained by Grantors as a result of, by reason of, or in connection with the Due Diligence Activities or the entry by Grantee or Grantee's Designees onto the Property. Notwithstanding any provision of this Agreement to the contrary, Grantee shall not have the right to undertake any invasive activities or tests upon the Property, or any environmental testing on the Property beyond the scope of a standard "Phase 1" investigation, without the prior written consent of Grantors of a workplan for such "Phase II" or invasive testing, which may be granted, denied or conditioned in Seller's sole and absolute discretion. If Grantors do not respond or reject any workplan within five business days of Grantee's delivery of the written workplan proposal to Grantors pursuant to the notice provisions of this Agreement, then Grantors shall be deemed to have not approved the submitted workplan and Grantee may proceed with such testing. If Grantors rejects such proposed workplan in whole or in part, then this Agreement shall become null and void at the sole option of Grantee. If Grantee terminates this Agreement under the foregoing provision, then neither party shall have any further rights, duties and obligations. 2. Lien Waivers. Upon receipt of a written request from Grantors, Grantee will provide Grantors with lien waivers following completion of the Due Diligence Activities from each and every contractor, materialman, engineer, architect and surveyor who might have lien rights, in form and substance reasonably satisfactory to Grantors and their counsel. To the extent permitted by applicable law, Grantee hereby indemnifies Grantors from and against any claims or demands for payment, or any liens or lien claims made against Grantors or the Property as a result of Grantee's Due Diligence Activities. 3. Insurance. Prior to entry onto the Property, Grantee shall, and shall cause all of Grantee's Designees performing the Due Diligence Activities to, procure or maintain a policy of commercial general liability insurance issued by an insurer reasonably satisfactory to Grantors covering each of the Due Diligence Activities with a single limit of liability (per occurrence and aggregate) of not less than $1,000,000, and to deliver to Grantors a certificate of insurance and copy of additional insured endorsement naming Seller as named additional insured, evidencing that such insurance is in force and effect, and evidencing that Grantors have been named as an additional insured thereunder with respect to the Due Diligence Activities. Such insurance shall be maintained in force throughout the term of this Agreement. 4. Successors. To the extent any rights or obligations under this Agreement remain in effect, this Agreement shall be binding upon and enforceable against, and shall inure to the -2- 11086-016611400480v.doc benefit of, the parties hereto and their respective heirs, legal representatives, successors and permitted assigns. 5. Limitations. Grantors do not hereby convey to Grantee any right, title or interest in or to the Property, but merely grants the specific rights and privileges hereinabove set forth. 6. Notices. Whenever any notice, demand, or request is required or permitted under this Agreement, such notice, demand, or request shall be in writing and shall be delivered by hand, be sent by registered or certified mail, postage prepaid, return receipt requested, or shall be sent by nationally recognized commercial courier for next business day delivery, to the addresses set forth below the respective executions of the parties hereof, or to such other addresses as are specified by written notice given in accordance herewith, or shall be transmitted by facsimile to the number for each party set forth below, or to such other numbers as are specified by written notice given in accordance herewith. All notices, demands, or requests delivered by hand shall be deemed given upon the date so delivered; those given by mailing as hereinabove provided shall be deemed given on the date of deposit in the United States Mail; those given by commercial courier as hereinabove provided shall be deemed given on the date of deposit with the commercial courier; and those given by facsimile shall be deemed given on the date of facsimile transmittal. Nonetheless, the time period, if any, in which a response to any notice, demand, or request must be given shall commence to run from the date of receipt of the notice, demand, or request by the addressee thereof. Any notice, demand, or request not received because of changed address or facsimile number of which no notice was given as hereinabove provided or because of refusal to accept delivery shall be deemed received by the party to whom addressed on the date of hand delivery, on the date of facsimile transmittal, on the first calendar day after deposit with commercial courier, or on the third calendar day following deposit in the United States Mail, as the case may be. GRANTEE: City of Temecula 41000 Main Street Post Office Box 9033 Temecula, California 92589-9033 Attention: Shawn Nelson, City Manager Facsimile: 951-694-1999 Telephone: 951-694-6444 COPY TO: 1 1086-016611400480v.doc Richards, Watson & Gershon Attention: Peter M. Thorson, City Attorney 355 South Grand Avenue 40th Floor Los Angeles, California 90071-3101 Facsimile: 213-626-0078 Telephone: 213-626-8484 -3- GRANTORS: Richard B. and Valerie M. Gurrola Trustees Robert A. Gurrola Gary S. Gurrola Richard B. Gurrola II 5590 Rainbow Creek Road Fallbrook, California 92028-9616 Facsimile: Telephone: 760-300-5804 7. Assignment. This Agreement may not be assigned by Grantee 8. Governing Law. This Agreement shall be construed, enforced and interpreted in accordance with the laws of the State of California. 9. Termination. This Agreement can be terminated by Grantors at any time and for any reason, or no reason, upon written notice from Grantors to Grantee. 10. Counterparts. This Agreement may be executed in several counterparts, each of which shall be deemed an original, and all of such counterparts together shall constitute one and the same instrument. -4- 11086-0166\ 1400480v,doc IN WITNESS WHEREOF, Grantors and Grantee have caused this Agreement to be executed and sealed, on the day and year first written above. GRANTORS RICHARD B. GURROLA AND VALERIE M. GURROLA, TRUSTEES OF THE GURROLA FAMILY TRUST UNDER DECLARATION DATED DEC. 27, 2001 AS TO AN UNDIVIDED 55.23% INTEREST Dated: By: Richard B. Gurrola, Trustee Dated: By: Valerie M. Gurrola, Trustee ROBERT A. GURROLA, A MARRIED MAN AS HIS SOLE AND SEPARATE PROPERTY AS TO AN UNDIVIDED 18.57% INTEREST Dated: By: Robert A. Gurrola GARY S. GURROLA, A SINGLE MAN AS TO AN UNDIVIDED 18.57% Dated: By: Gary S. Gurrola RICHARD B. GURROLA II, AN UNMARRIED MAN AS TO AN UNDIVIDED 7.63% Dated: By: Richard B. Gurrola -5- 11086-0 166\ 1400480v.doc GRANTEE CITY OF Temecula, a Municipal Corporation Dated: ATTEST: Susan W. Jones, MMC, City Clerk Approved as to form: RICHARDS, WATSON & GERSHON Peter M. Thorson, City Attorney 11086-016611400480v.doc By: Chuck Washington, Mayor -6- Exhibit "A" to Right of Entry Agreement [LEGAL DESCRIPTION OF PROPERTY] 11086-0166 1 1400480v.doc February 8, 2010 Sheet 1 of 1 EXHIBIT "A" LEGAL DESCRIPTION RIGHT-OF-WAY ACQUISITION (OVERLAND DRIVE) LOT 13 OF TRACT MAP NO. 16178, SITUATED IN THE CITY OF TEMECULA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, RECORDED AUGUST 8, 1986 AS SHOWN BY MAP ON FILE IN BOOK 160, PAGES 102 THROUGH 104, INCLUSIVE, OF MAPS, OFFICIAL RECORDS OF RIVERSIDE COUNTY, STATE OF CALIFORNIA. CONTAINING: 25,686 SQ. FT. OR 0.590 ACRE, MORE OR LESS. EXHIBIT "B" ATTACHED HERETO AND BY THIS REFERENCE MADE A PART HEREOF. THIS LEGAL DESCRIPTION WAS PREPARED BY ME OR UNDER MY DIRECTION IN CONFORMANCE WITH THE LAND SURVEYORS' ACT. / BY: �� - ` Z�/ b,/a `i EX S. LUMMER, PLS 6641 DATE (MY LICENSE EXPIRES 12-31-2011) Exhibit "B" to Right of Entry Agreement and Access Agreement [Plat Map of Property] 11086-0166\1400480v.doc LEGEND 1111 INDICATES RIGHT-OF-WAY ACQUISITION AREA = 25,686 SQ. FT. OR 0.590 ACRE () INDICATES RECORD DATA PER TRACT 16178 (R) INDICATES RADIAL BEARING A❑ LANDSCAPE MAINTENANCE AGREEMENT PER INST. 141902, RECORDED MAY 20, 1987 © 15' WIDE DRAINAGE EASEMENT PER TRACT 16178 © 8' W1DE EASEMENT FOR POLE LINES AND INCIDENTAL PURPOSES PER INST. 3762, RECORDED JAN. 5, 1989 EXHIBIT "B" RIGHT-OF-WAY ACQUISITION - LOT 13 (OVERLAND DRIVE) 1- REX S. PLUMMER EXP. DATE 12-31-11 VICINITY MAP NO. 6641 DATE SHEET 1 OF 2 SHEETS PROJECT DESIGN CONSULTANTS Planning 1 Engirieering 1 Survay 701 B Street, Suite 800 619.235.6471 Tel San Diego, CA 92101 619.234.0349 Fax DATE: FEBRUARY 8, 2010 SCALE: N.T.S. JOB NO.: / 18 N 20 TRACT N N %N 22 \ MAP 23 17 SCALE: 1"=100' 25' 15 2 \ NO. 24 25 CURVE TABLE CURVE DELTA RADIUS LENGTH C1 675'01» 1417.00' 154.58' (674'59" 1417' 154.57') C2 6 43'33" 1130.74' 132.74' (6'43'24" 1130.74' 132.69') I \ 13 ;O ��1�119 I\03,,8 N46 32'29 "Z ERIZ (N4632'31 "E) TRACT 13 EXHIBIT "B" RIGHT-OF-WAY ACQUISITION - LOT 13 (OVERLAND DRIVE) 1 16178 • 15 0 14 / 1V1AP/ -18 / / / /Nay /7/ 4 \7'/ 11 / / v 7 718178-3 9 -10 SHEET 2 OF 2 SHEETS PROJECT DESIGN CONSULTANTS Planning 1 Enginaaring I Survey 701 B Street, Suite 800 San Diego, CA 92101 619.235.6471 Tel 619.234.0349 Fax DATE: FEBRUARY 8, 2010 SCALE: 1 "=100' JOB NO.: Exhibit "1" to Right of Entry Agreement and Access Agreement CONSENT OF TENANT TO RIGHT OF ENTRY AND ACCESS AGREEMENT WHEREAS, Temecula Marine Center ("Tenant") is the sole occupant of the real property commonly known as 27495 Enterprise Circle West, Temecula, California, and identified as Riverside County Tax Assessor's Parcel Number 921-480-013 ("Property"); and WHEREAS, the record fee owners of the Property, Richard B. Gurrola and Valerie M. Gurrola, Trustees of the Gurrola Family Trust Under Declaration Dated Dec. 27, 2001, Robert A. Gurrola, Gary S. Gurrola, and Richard B. Gurrola II (referred to below collectively as "Owners") have informed Tenant that Owners contemplate entering into a Purchase and Sale Agreement and Escrow Instructions by and between the City of Temecula ("City") related to the Property (the "Purchase Agreement") and that pursuant said Purchase Agreement, the City has requested the right of entry upon and access to the Property for the purpose of undertaking tests, inspections and other due diligence activities (herein called the "Due Diligence Activities") in connection with the proposed acquisition by the City of the Property under the Purchase Agreement; and WHEREAS, Owners have provided to Tenant a copy of the form of Right of Entry and Access Agreement between Owners and the City that would allow the City to conduct said Due Diligence Activities. A true and correct copy of the form of Right of Entry and Access Agreement is attached to this Consent of Tenant to Right of Entry and Access Agreement and is incorporated herein by this reference. Tenant hereby consents to the City's entry upon and access to the Property pursuant to the terms set forth in said Right of Entry and Access Agreement. Temecula Marine Center, Inc. Dated: Dated: By: By: Name: Name: Title: Title: 11086-0166 \1400480v.doc Exhibit "11" [Page 5 of July 18, 2011 Crockett & Associates, Ltd. Appraisal] 11086-016611464915v 1.doc Temecula Marine Center Leasehold Improvements July 18, 2011 Page 5 ITEM QTY DESCRIPTION NR/RC FMV LV 13. Leasehold improvements comprising: flooring vinyl tile carpet partitions drywall on frame drywall/plywood on frame finish paint inside outside ceiling suspended acoustical plumbing water closets (2) sinks (2) heating, ventilation and air conditioning packaged unit on roof wiring breaker panels (2) switches receptacles conduit lights fluorescent yard asphalt surface seal concrete gate fence $ 31,000 $ 20,700 $ 0 (Picture 1, 2, 4, 5, 7, 9) Prepared by Crockett & Associates, Ltd. Item No. 10 Approvals City Attorney Director of Finance City Manager CITY OF TEMECULA AGENDA REPORT TO: City Manager/City Council FROM: Greg Butler, Director of Public Works/City Engineer DATE: June 26, 2012 SUBJECT: Plans and Specifications, and Authorization to Solicit Construction Bids for Environmental Mitigation for the French Valley Parkway Interchange Project PREPARED BY: Avlin R. Odviar, Senior Engineer — CIP William Becerra, Associate Engineer — CIP RECOMMENDATION: Approve the plans and specifications, and authorize the Department of Public Works to solicit construction bids for the Environmental Mitigation for the French Valley Parkway/Interstate 15 Overcrossing and Interchange Improvements. BACKGROUND: On February 23, 2010, the City Council adopted Resolution Number 10-14 to approve the French Valley Parkway Interchange Project and adopt the Mitigated Negative Declaration. The City, in conjunction with the resource agencies, selected an appropriate mitigation site to implement measures necessary to offset project impacts to riparian habitats. The site is located along the northern bank of Temecula Creek, roughly V4 mile west of Pechanga Parkway. Mitigation will consist of developing the 2.73 acre site into a sustainable riparian habitat. Non-native plant species will be eradicated while native plant species typical of the riparian habitat types that currently occur in the project vicinity will be installed. An above -ground irrigation system will be constructed and signs will be erected to identify the area as a habitat restoration site. Plans and specifications are complete and the project is ready to be advertised for construction bids. The contract documents are available for review in the office of the Director of Public Works. The Engineer's Construction Estimate for the project is $192,500. FISCAL IMPACT: The French Valley Parkway Interchange Environmental Mitigation Project is budgeted within the City's Capital Improvement Program Fiscal Years 2012-16 and is funded with several sources including Measure A and TUMF. There are sufficient funds in the project account 210.165.719 to construct the project. ATTACHMENTS: 1. Mitigation Site 2. Project Location 3. Project Description • Offsite Mitigation Site (2.73 Acres) D Parcel No. 961440007 0 Parcel No. 961440012 Offsite Mitigation Site Location French Valley Parkway Interchange Project + 3'3° 150 0 300 Feet (...2111j Nelpmee....a. Maw one -pal FRENCH VALLEY PARKWAY / INTERSTATE -15 OVER -CROSSING AND INTERCHANGE IMPROVEMENTS - PHASE I Circulation Project Location Aerial Data - March 2010 0 250 500 Feet 1.000 56 2011-12 City of (erwetr44,6a FRENCH VALLEY PARKWAY / INTERSTATE -15 OVER -CROSSING AND INTERCHANGE IMPROVEMENTS—PHASE I Circulation Project Project Description: Project will include the design, right-of-way acquisition, utility relocation, and construction activities to portions of the French Valley Parkway and Interstate -15 over -crossing and inter- change. The project will add a new southbound off -ramp from Interstate -15 to French Valley Parkway, construct the northern half of French Valley Parkway from the off -ramp to Jefferson Avenue, widen the existing southbound off -ramp from Interstate -15 to Winchester, and construct a new auxiliary lane between French Valley Parkway and the Winchester Road southbound off -ramp. Other features include permanent and temporary retaining walls, erosion control and irrigation, and a new traffic signal and road- way improvements at the intersection of French Valley Parkway and Jefferson Avenue. Project requires oversight by Caltrans and coordination with the City of Murrieta. Benefit: Project will improve traffic circulation by providing another southbound off -ramp from Interstate -15 and add a lane to the Interstate -15 southbound off -ramp to Winchester. Project Status: The plans, specifications, and estimates, are expected to be complete during fiscal year 2012. Construction is expected to be complete by the end of fiscal year 2013. Department: Public Works—Account No. 210.165.719 Priority: 1 Project Cost: Actuals to Date Future Total Project 2011-12 2012-13 2013-14 2014-15 2015-16 Years Cost Administration $ 353,949 $ 210,389 $ 200,000 $25,000 $ 789,338 Acquisition $2,256,952 $ 1,704,666 $ 160,830 $60,000 535.000 $70,000 $ 3,961,618 Construction $18,200,000 $ 8,855,000 $ 27,055,000 Construction $ 444,203 $ 444,203 Engineering $ 2,000,000 S 1,000,000 $ 3,000,000 Design $1,382,796 $ 648,303 $ 1.167,801 $ 2,031,099 Environmental $ 15,000 $ 35,000 $35,000 $35.000 $70,000 $ 190,000 MSHCP $ 245,000 $ 245,000 Totals $3,993,697 $23,023,358 510,090,000 $60,000 535.000 570.000 $ - 8 37,272,055 Source of Funds: Actuals to Date Future Total Project 2011-12 2012-13 2013-14 2014-15 2015-16 Years Cost Capital Project Reserves $ 160,830 $60,000 535.000 $70,000 $ 325,830 DIF (Street Improvements) $ 444,203 $ 444,203 Measure A -Local Street and Road $ 977,181 $ 724,369 $ 1.167,801 $ 2,869,351 Reimbursement/Other (Murrieta Land Donation) $ 1,631,631 $ 1,631,631 TUMF (CErAPRCTC)"' $20,000,000 $ 8,761,369 $ 28,761,369 TUMF (RCTC)=' $2,462,295 $ 2,462,295 TUMF (wRcoG)i3' $ 110,018 $ 667,358 5 777.376 Total Funding: $3,993,697 $23,023,358 510.090,000 $60,000 535.000 570,000 S - 5 37,272,055 Future Operation & Maintenance Costs: 2012-13 2013-14 2014-15 2015-16 S15.000 $15.300 515,606 (1) TUMF (CETAP/RCTC) - Funding is pursuant to the RCTC Agreement No. 11-72-0036-00 in the amount of $20.000,000 to date. (2) TUMF (RCTC) - Funding is pursuant to the RCTC Agreement No. 06-72-048-00 for a total of 575,517,000 ($5,715,000 -ROW and 52,000.000- PS&E). Phase I is $1,682,000 -ROW and $203,784-PS&E- See also Phase If. (3) TUMF (WRCOG) - Zone funding is pursuant to WRCOG Agreement No. 05 -SW -TEM -1064 for a total of $4,078,000 (51.165,000-PS&E) - See also Phase II. 57 Item No. 11 Approvals City Attorney Director of Finance City Manager Sze -r• CITY OF TEMECULA AGENDA REPORT TO: City Manager/City Council FROM: Greg Butler, Director of Public Works/City Engineer DATE: June 26, 2012 SUBJECT: Notice of Completion for the Citywide Storm Drain Improvements — Calle Fiesta, PW 10-07 PREPARED BY: Amer Attar, Principal Engineer — CIP Steve Charette, Associate Engineer RECOMMENDATION: 1. Accept the construction of the Citywide Storm Drain Improvements — Calle Fiesta, PW 10-07, as complete; 2. Direct the City Clerk to file and record the Notice of Completion, release the Performance Bond, and accept a one-year Maintenance Bond in the amount of 10% of the contract amount; 3. Release the Labor and Materials Bond seven months after filing of the Notice of Completion if no liens have been filed. BACKGROUND: On March 13, 2012, the City Council awarded a construction contract to Ted Enterprises, Inc. in the amount of $142,088.00 to complete the Citywide Storm Drain Improvements, Calle Fiesta, PW 10-07. The work for the Citywide Storm Drain Improvements, Calle Fiesta project consisted of the installation of a reinforced concrete pipe, manholes, energy dissipater, and grading. The Contractor has completed the work in accordance with the approved plans and specifications to the satisfaction of the Director of Public Works. All work will be warranted for a period of one year from May 24, 2012; the date the City obtained "beneficial use" of the project improvements. The retention for this project will be released pursuant to the provisions of Public Contract Code Section 7107. FISCAL IMPACT: The Citywide Storm Drain Improvements, Calle Fiesta, PW10-07 is identified in the City's Capital Improvement Program, Fiscal Year 2011-12 and is funded with Capital Project Reserves. The base amount of the construction contract was $142,088.00. Contract change orders totaled $3,507.89, for a total contract amount of $145,595.89. ATTACHMENTS: 1. Notice of Completion 2. Maintenance Bond 3. Contractor's Affidavit and Final Release RECORDING REQUESTED BY AND RETURN TO: CITY CLERK CITY OF TEMECULA P.O. Box 9033 41000 Main Street Temecula, CA 92589-9033 NOTICE OF COMPLETION NOTICE IS HEREBY GIVEN THAT: 1. The City of Temecula is the owner of an easement within private property hereinafter described. 2. The full address of the City of Temecula is 41000 Main Street, Temecula, California 92590. 3. The Nature of Interest is a Contract which was awarded by the City of Temecula to TED Enterprises, Inc, 555 N. El Camino Real A362, San Clemente, CA 92672 to perform the following work of improvement: CITYWIDE STORM DRAIN IMPROVEMENTS, CALLE FIESTA PROJECT NO. PW 10-07 4. Said work was completed by said company according to plans and specifications and to the satisfaction of the Director of Public Works of the City of Temecula and that said work was accepted by the City Council of the City of Temecula at a regular meeting thereof held on June 26, 2012. That upon said contract Western Surety Company was surety for the bond given by the said company as required by law. 5. The property on which said work of improvement was completed is in the City of Temecula, County of Riverside, State of California, and is described as follows: CITYWIDE STORM DRAIN IMPROVEMENTS, CALLE FIESTA PROJECT NO. PW 10-07 6. The location of said property is: Calle Fiesta Road, Temecula, California 92591, Assessor Parcel No. 919-350-020. Dated at Temecula, California, this 26th day of June, 2012. City of Temecula Susan W. Jones MMC, City Clerk STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ) ss CITY OF TEMECULA ) I, Susan W. Jones MMC, City Clerk of the City of Temecula, California and do hereby certify under penalty of perjury, that the foregoing NOTICE OF COMPLETION is true and correct, and that said NOTICE OF COMPLETION was duly and regularly ordered to be recorded in the Office of the County Recorder of Riverside by said City Council. Dated at Temecula, California, this 26h day of June, 2012. City of Temecula Susan W. Jones MMC, City Clerk CITY OF TEMECULA, DEPARTMENT OF PUBLIC WORKS BOND NO. 71247860 MAINTENANCE BOND FOR CITYWIDE STORM DRAIN IMPROVEMENTS - CALLE FIESTA PROJECT NO. PW10-07 KNOW ALL PERSONS BY THESE PRESENT THAT: Ted Enterprises, Inc. @ 555 N. El Camino Real A362, San Clemente, CA 92672 NAME AND ADDRESS CONTRACTOR'S a Corporation , hereinafter called Principal, and (fill in whether a Corporation, Partnership or individual) Western Surety Company @ P.O. Box 5077, Sioux Falls, SD 57117 NAME AND ADDRESS OF SURETY hereinafter called SURETY, are held and firmly bound unto CITY OF TEMECULA, hereinafter called OWNER, in the penal sum of One Hundred Forty -Two Thousand and Eighty -Eight DOLLARS and 00/100 CENTS ($ 142,088.00 ) in lawful money of the United States, said sum being not Tess than ten (10%) of the Contract value payable by the said City of Temecula under the terms of the Contract, for the payment of which, we bind ourselves, successors, and -assigns, jointly and severally, firmly by these presents. THE CONDITION OF THIS OBLIGATION is such that whereas, the Principal entered into a certain Contract with the OWNER, dated the 13th day of March , 2012, a copy of which is hereto attached and made a part hereof for the construction of CITYWIDE STORM DRAIN IMPROVEMENTS- CALLE FIESTA, PROJECT NO. PW10-07. WHEREAS, saki Contract provides that the Principal will furnish a bond conditioned to guarantee for the period of one (1) year after approval of the final estimate on said job, by the OWNER, against all defects in workmanship and materials which may become apparent during said period; and WHEREAS, the said Contract has been completed, and was the final estimate approved on May 24th , 2012 (insert date and year). NOW, THEREFORE, THE CONDITION OF THIS OBLIGATION IS SUCH, that if within one year from the date of approval of the final estimate on said job pursuant to the Contract, the work done under the terms of said Contract shall disclose poor workmanship in the execution of said work, and the carrying out of the terms of said Contract, or it shall appear that defective materials were furnished thereunder, then this obligation shall remain in full force and virtue, otherwise this instrument shalt be void. MAINTENANCE BOND MB -1 PW1407 Maintenance Bond and Affidavit-1.docx As a part of the obligation secured hereby and in addition to the face amount specified, costs and reasonable expenses and fees shall be included, including reasonable attorney's fees incurred by the City of Temecula in successfully enforcing this obligation, all to be taxed as costs and included in any judgment rendered. The Surety hereby stipulates and agrees that no change, extension of time, alteration, or addition to the terms of the Contract, or to the work to be performed thereunder, or to the specifications accompanying the same, shall in any way affect its obligations on this bond, and it does hereby waive notice of any such change, extension of time, alteration, or addition to the terms of the Contract, or to the work, or to the Specifications. Signed and sealed this 7th day of June , 2012. (Seal) SURETY Western Surety Company 1 Ted Ent :,rises, In PRINCIPAL B (Name) Michael R. Strahan Attorney -in -Fact (Title) APPROVED AS TO FORM: Peter M. Thorson, City Attorney (Name) (Title) By: (Name) (Tile) Attach Notarial' Acknowledgement or Jurat for both the Surety and Principal Signatures MAINTENANCE BOND MB -2 PW10-07 Mamienanoe Bond and Afridavt-1.dacx it OFFICIAL CALIFORNIA NOTARIAL CERTIFICATE JURAT State of CaliMrnia County of i.iLe— Subscribed and sworn to (or affirmed) before me on this / day of , 20 / , by proved to me on the basis of satisfactory evidence to be the person(s) who appeared before me. (seal) KELLEY A. HOLT • tein= COMM. # 1525608 7 ) NOTARY PUBLIC•CALIFORII A • `'� &RANGE COUNTY .A l MY COM EX,_OEC. 04.2012 k ADDITIONAL INFORMATION DOCUMENT INFORMATION Document Date Number of Pages (c • /1 / [ ] Placed under Oath [ ] Placed under Affirmation ,rj Document Signed before the Notary TYPE OF IDENTIFICATION [ ] Personal Knowledge of the Notary Public [ ] Satisfactory Evidence — identification card [ ] One Credible Witness acknowledging identity of principal [ ] Two Credible Witnesses acknowledging identity of principal EMBOSSMENT Copyright © 1994, All Rights Reserved, California School of Notary Public, Inc. Western Surety Company POWER OF ATTORNEY APPOINTING INDIVIDUAL ATTORNEY-IN-FACT Know All Men By These Presents, That WESTERN SURETY COMPANY, a South Dakota corporation, is a duly organized and existing corporation having its principal office in the City of Sioux Falls, and State of South Dakota, and that it does by virtue of the signature and seal herein affixed hereby make, constitute and appoint Michael R Strahan, John R Qualin, Jennifer Palmer, Individually of San Diego, CA, its true and lawful Attomey(s)-in-Fact with full power and authority hereby conferred to sign, seal and execute for and on its behalf bonds, undertakings and other obligatory instruments of similar nature - In Unlimited Amounts - and to bind it thereby as fully and to the same extent as if such instruments were signed by a duly authorized officer of the corporation and all the acts of said Attomey, pursuant to the authority hereby given, are hereby ratified and confirmed. This Power of Attorney is made and executed pursuant to and by authority of the By -Law printed on the reverse hereof, duly adopted, as indicated, by the shareholders of the corporation. In Witness Whereof, WESTERN SURETY COMPANY has caused these presents to be signed by its Senior Vice President and its corporate scal to be hereto affixed on this 1st day of May, 2012. State of South Dakota County of Minnehaha } ss WESTERN SURETY COMPANY Paul . Bruflat. ' . Brufat. Senior Vice President On this 1st day of May, 2012, before me personally came Paul T. Bruflat, to me known, who, being by me duly sworn, did depose and say: that he resides in the City of Sioux Falls, State of South Dakota; that he is the Senior Vice President of WESTERN SURETY COMPANY described in and which executed the above instrument; that he knows the seal of said corporation; that the seal affixed to the said instrument is such corporate seal; that it was so affixed pursuant to authority given by the Board of Directors of said corporation and that he signed his name thereto pursuant to like authority, and acknowledges same to be the act and deed of said corporation. My commission expires November 30, 2012 }btiy4h4NghybgFhh4bNb.,N0,N.. + s D. KRELL s S • NOTARY PUBLIC r i • SOUTH DAKOTA r + h...~.. hbh0Y4bhhorb44.syh.a CERTIFICATE D. Krell, Iry Public L L. Nelson, Assistant Secretary of WESTERN SURETY COMPANY do hereby certify that the Power of Attorney hereinabove set forth is still in force, and further certify that the By -Law of the corporation printed on the reverse hereof is still in force. In testimony whereof I have hereunto subscribed my name and affixed the seal of the said corporation this 14•14 day of Form F4280-09-06 WESTERN SURETY COMPANY 2.4112Are I. Nelson Assistant Secretary Authorizing By -Law ADOPTED BY THE SHAREHOLDERS OF WESTERN SURETY COMPANY This Power of Attorney is made and executed pursuant to and by authority of the following By -Law duly adopted by the shareholders of the Company. Section 7. All bonds. policies, undertakings. Powers of Attorney, or other obligations of the corporation shall be executed in the corporate name of the Company by the President, Secretary, and Assistant Secretary. Treasurer, or any Vice President. or by such other officers as the Board of Directors may authorize. The President. any Vice President, Secretary, any Assistant Secretary, or the Treasurer may appoint Attorneys in Fact or agents who shall have authority to issue bonds, policies, or undertakings in the name of the Company. The corporate seal is not necessary for the validity of any bonds, policies, undertakings, Powers of Attorney or other obligations of the corporation. The signature of any such officer and the corporate seal may be printed by facsimile. ACKNOWLEDGMENT State of California County of San Diego ) On June 7th, 2012 before me, J. Palmer, Notary Public (insert name and title of the officer) personally appeared Michael R. Strahan who proved to me on the basis of satisfactory evidence to be the person() whose name(0) is/ape subscribed to the within instrument and acknowledged to me that he/sho/t#ey executed the same in his/19e4heir authorized capacity(.&), and that by his/hcr/thci signature(i) on the instrument the person(i), or the entity upon behalf of which the person() acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) J. PALMER Commission # 1972945 Notary Public - California -- g San Diego County Comm. Ex fres Mar 23.2015 CITY OF TEMECULA, DEPARTMENT OF PUBLIC WORKS CONTRACTOR'S AFFIDAVIT AND FINAL RELEASE CITYWIDE STORM DRAIN IMPROVEMENTS - CALLE FIESTA PROJECT NO. PW10-07 This is to certify that igt, ti'r4st%/(hereinafter the "CONTRACTOR") declares to the City of Temecula, under oath, that he/she/it has paid in full for all materials, supplies, labor, services, tools, equipment, and all other bills contracted for by the CONTRACTOR or by any of the CONTRACTOR's agents, employees or subcontractors used or in contribution to the execution of it's contract with the City of Temecula, with regard to the building, erection, construction, or repair of that certain work of improvement known as CITYWIDE STORM DRAIN IMPROVEMENTS - CALLE FIESTA, PROJECT NO. PW10-07, situated in the City of Temecula, State of California, more particularly described as follows: c _,t eSY✓-i „Zit? r -heic t , INSERT ADDRESS OR DESCRIBE LOCATION OF WORK The CONTRACTOR declares that it knows of no unpaid debts or claims arising out of said Contract which would constitute grounds for any third party to claim a Stop Notice against of any unpaid sums owing to the CONTRACTOR. Further, in connection with the final payment of the Contract, the CONTRACTOR hereby disputes the following amounts: Description Dollar Amount to Dispute Pursuant to Public Contract Code §7100, the CONTRACTOR does hereby fully release and acquit the City of Temecula and all agents and employees of the City, and each of them, from any and all claims, debts, demands, or cause of action which exist or might exist in favor of the CONTRACTOR by reason of payment by the City of Temecula of any contract amount which the CONTRACTOR has not disputed above. Dated: G - //- By: CONTRACTOR 'v Sign - C��/ sign/ Vi9Lie2,__- yP Print Name and Title EXHIBIT "C" — TEMPORARY CONSTRUCTION EASEMENT C-1 PW10-07 Maintenance Bond and Affidavit-1.docx Item No. 12 Approvals City Attorney Director of Finance City Manager AA) CITY OF TEMECULA AGENDA REPORT TO: City Manager/City Council FROM: Greg Butler, Director of Public Works/City Engineer DATE: June 26, 2012 SUBJECT: Construction Contract for the Pavement Rehabilitation Program — Ynez Road, PW10-14 PREPARED BY: Avlin R. Odviar, Senior Engineer — CIP Kendra Hannah-Meistrell, Associate Engineer - CIP RECOMMENDATION: 1. Approve a Mutual Rescission and Compensation Agreement of the Construction Contract with EBS General Engineering, Inc. for the Pavement Rehabilitation Program — Ynez Road, PW10-14. and accept a payment of $95,067 from EBS General Engineering, Inc.; 2. Award a construction contract for the Pavement Rehabilitation Program — Ynez Road, PW10-14, to All American Asphalt in the amount of $2,177,177; 3. Authorize the City Manager to approve change orders up to 10% of the contract amount, $217,717.70. BACKGROUND: On February 14, 2012 the City Council approved the Plans and Specifications and authorized staff to solicit construction bids for the Pavement Rehabilitation Program — Ynez Road, PW10-14. The project was advertised, and on April 3, 2012 bids were electronically opened and publicly posted on the City's on-line bidding service, PlanetBids. On April 24, 2012 the City Council awarded the construction contract to EBS General Engineering, Inc. (EBS) in the amount of $2,082,110. Subsequent to executing the contract and prior to beginning the work, EBS entered into discussions with City staff regarding the terms and limitations of the project specifications. Staff has concluded that EBS is unable to fulfill the contract as specified. Through additional negotiation, the parties agreed that it is mutually beneficial to rescind the construction contract without prejudice and allow EBS to provide the monetary difference between its bid and the next lowest responsive bidder, All American Asphalt. The difference in the bid amount is $95,067. All American Asphalt is the next lowest responsible bidder. The company has public contracting experience and has completed similar projects for the City and other agencies. This project will rehabilitate Ynez Road between Winchester Road and Solaria Way by pulverizing and removing existing asphalt concrete, base and subgrade, removing additional material, placing pulverized material, an asphalt concrete base course and a rubberized asphalt concrete overlay, adjusting various facilities to grade, installing traffic striping, pavement markers and legends, and miscellaneous appurtenant work. The Engineer's Construction Estimate for the Pavement Rehabilitation Program — Ynez Road is $2,417,500. The specifications allow for a schedule of 90 working days, which is an approximate duration of four and one half months. FISCAL IMPACT: The Citywide Pavement Rehabilitation Program is identified in the City's Capital Improvement Program (CIP) budget for Fiscal Years 2012-16 with funding from Measure A and Capital Projects Reserves. There will be no additional financial impact to the City since EBS General Engineering, Inc. will provide $95,067 to cover the difference in cost between the amount of their contract and the amount of All American Asphalt's contract. ATTACHMENTS: 1. Mutual Rescission and Compensation Agreement 2. Contract 3. Project Location 4. Project Description MUTUAL RESCISSION AND COMPENSATION AGREEMENT RECITALS A. The parties to this Mutual Rescission and Compensation Agreement ("Agreement") are EBS General Engineering, Inc. ("EBS") and the City of Temecula ("City"). The City and EBS are referred to herein as the "Parties." B. In or about April, 2012, the City and EBS entered into a public works contract for EBS to perform general contractor services on a project known as "Pavement Rehabilitation Program — Ynez Road (Winchester Road to Solana Way) Project No. PW10-14" ("Contract" or the "Project"). The Contract provided, among other things, that EBS, as the lowest responsive bidder on the Project, be paid $2,082,110 by the City for EBS's timely and satisfactory completion of the Project. The second lowest bid was $2,177,177. The City desired the Project to be completed in early October, 2012, and time was of the essence for completion. C. Prior to the City's issuance of a Notice to Proceed under the Contract, EBS contended that its bid calculation was based upon certain material mistakes, rendering EBS's performance under the Contract impossible without significant loss and expense to EBS. Additionally, EBS does not desire the City to compel the performance bond surety to complete the Project, as EBS would also suffer significant financial expense because of that surety's resulting claims for compensation against EBS. While the City does not agree or disagree with EBS's contentions regarding its material mistakes in its bid calculation, the City seeks completion of the Project from EBS or EBS's performance bond surety at a cost no more than the $2,082,110 amount that EBS had successfully bid on the Project, and had agreed to under the Contract. D. Alternatively, the City is willing to mutually rescind the Contract and award it to the next lowest responsive bidder, in exchange for compensation for the difference between EBS's bid and the second lowest bid. EBS desires to enter into this Agreement memorializing this alternative as the agreed-upon payment obligations under this Agreement would be less than the loss EBS anticipates it would suffer to complete the Project, or if EBS's performance bond surety were compelled to complete the Project, and then seek compensation from EBS. E. The City believes this alternative furthers the interests and desires of the general public as it will allow the completion of a majority of the Project prior to the commencement of the Holiday Season; otherwise, the Project's non -timely completion would likely impact ingress and egress to and from a major shopping mall located within the City's boundaries. The City also believes that this alternative furthers the interests and desires of the general public while attempting to fairly and reasonably comply with the rationale and purposes of the competitive bidding laws in the State of California. NOW, THEREFORE, based on the exchange of valuable consideration, including the covenants and conditions of this Agreement, the receipt and sufficiency of which is acknowledged, and based on the Recitals set forth above which form a part of this Agreement, EBS and the City agree to the following terms and conditions: -1- 11086-000411465571 v1.doc II. TERMS AND CONDITIONS 1. Recitals. The above Recitals and the Terms and Conditions herein are contractual and not merely recitals and the agreements contained herein and consideration transferred are to satisfy the rights and obligations between the Parties, except as to remaining rights and obligations, if any, reserved by this Agreement. 2. Agreement Contingent Upon Satisfaction of Payment Obligations. Within three business days of the full execution of this Agreement, EBS agrees to deliver to the City a cashier's check in the amount of $95,067 made payable to "City of Temecula." This amount represents the difference between the agreed-upon compensation under the Contract, and the second lowest bid submitted on the Project. Furthermore, until and unless EBS satisfies its payment obligations herein, the City retains any and all rights, at its option, to (1) seek EBS's performance under the Contract, (2) tender completion of the Project upon the performance bond that EBS had tendered on the Project; and (3) purse any and all other rights and remedies under the Contract. 3. Mutual Rescission of Contract. Upon satisfaction of EBS's payment obligations under Section Two hereof, the Parties agree to a mutual rescission of the Contract. In other words, the Contract is being mutually rescinded without any admission of fault, liability, blame or wrong -doing by either of the Parties against each other. Further, the mutual rescission of the Contract is not "for cause," but instead for the sole purpose of allowing City to complete the Project as soon as practicable by awarding a contract for completion of the Project to the next lowest responsive bidder, rather than waiting for the conclusion of potentially protracted negotiations with the performance bond surety to enter into a takeover and completion agreement, as well as avoidance of additional time necessary for the performance bond surety to obtain bids and enter into completion contract with a contractor for the completion of the Project. 4. Mutual Release. Upon EBS's satisfaction of its payment obligations under Section Two hereof, the Parties, and each of their respective agents, shareholders, councilmembers, sureties, representatives, employees, predecessors, subcontractors, materialmen, successors and/or assigns (collectively "Released Parties") do hereby forever waive, release, acquit and discharge all causes of action whatsoever, of whatever kind or nature, whether known or unknown, patent or latent, contingent or liquidated, suspected or unsuspected, which the Released Parties now own, hold, have or claim to have against each of the other Released Parties that relate, in any manner, to the Contract and the Project. Furthermore, each of the Parties acknowledge that it has been advised by its attorney concerning, and are familiar with the provisions of the California Civil Code, §1542, 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 the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor. 5. No Third -Party Rights. Except as to any of the releasees or releasors in Section Four hereof, nothing in this Agreement shall be deemed to create any rights in favor of, or to inure to the benefit of, any third parties, or to waive or release any defenses or claims. -2- 11086-000411465571 v1.doc 6. Agreement Binding on Successors. This Agreement shall be binding upon the successors and assignees of the Parties. The Parties hereto will execute any additional instruments as may be reasonably required in order to carry out the purposes and intent of this Agreement and to fulfill the obligations of the Parties hereunder. 7. No Modification Except in Writing; Authority to Bind. This Agreement cannot be modified except in a writing signed by all the Parties. Each individual signing this Agreement warrants and represents that he/she has full authority to execute this Agreement on behalf of each of the Parties on whose behalf he/she so signs. 8. Construction and Application of Law. The Parties agree and acknowledge that this Agreement and all agreements or documents incorporated herein shall not be subject to the rule of construction that a written agreement is construed against the party preparing or drafting that Agreement. The Parties have had the opportunities to consult with their respective counsel regarding all aspects of this Agreement prior to entering into this Agreement. The Parties also agree that this Agreement and its performance shall be governed by and construed in accordance with the laws of the State of California. This Agreement constitutes the entire agreement between the Parties, and all prior oral and written communications regarding this Agreement are integrated into this Agreement. The Parties expressly understand and agree that this Agreement may not be altered, amended, modified, or otherwise changed in any respect or particular whatsoever, except by a writing duly executed by authorized representatives of the agreeing Parties hereto. The Parties hereby agree and acknowledge that each of them will make no claim at any time or place that this Agreement has been orally altered or modified or otherwise changed by oral communication of any kind or character. 9. Validity. Invalidity of any portion of this Agreement by reason of the laws of any State or for any other reason shall not render any other provisions of this Agreement. 10. Counterparts/Facsimile. This Agreement may be executed in any number of counterparts each of which, when executed and delivered, shall be deemed to be an original with all the counterparts constituting but one and the same instrument. The execution of this Agreement by any parties hereto will not become effective until the Agreement is approved by City's City Council and until counterparts hereof have been executed by all the Parties. Additionally, facsimile signature shall bind the undersigned. -3- 11086-000411465571 v1.doc DATED: City of Temecula Chuck Washington Mayor Attest: Susan W. Jones, MMC, City Clerk APPROVED AS TO FORM: Peter M. Thorson, City Attorney DB DATED: EBS General Engineering, Inc. By: Joseph A, Nanci Its: President By: Its: -4- 110X6-0004 \ 4- 110X6-)004\ 1465571 v, .dcs CITY OF TEMECULA, DEPARTMENT OF PUBLIC WORKS CONTRACT FOR PAVEMENT REHABILITATION PROGRAM — YNEZ ROAD (WINCHESTER ROAD TO SOLANA WAY} PROJECT NO. PW10-14 THIS CONTRACT, made and entered into the 26th day of June, 2012 by and between the City of Temecula, a municipal corporation, hereinafter referred to as "CITY", and All American Asphalt, hereinafter referred to as "CONTRACTOR." WITNESSETH: That CITY and CONTRACTOR, for the consideration hereinafter named, mutually agree as follows: 1. CONTRACT DOCUMENTS. The complete Contract includes all of the Contract Documents, to wit: Notice Inviting Bids, Instructions to Bidders, Proposal, Performance Bond, Labor and Materials Bond, Plans and Specifications entitled PAVEMENT REHABILITATION PROGRAM —YNEZ ROAD (WINCHESTER ROAD TO SOLANA WAY), PROJECT NO. PW10-14, Insurance Forms, this Contract, and all modifications and amendments thereto, the State of California Standard Plans and Specifications, (latest edition), issued by the California Department of Transportation, where specifically referenced in the Plans, Special Provisions, and Technical Specifications, and the latest version of the Standard Specifications for Public Works Construction, including all supplements as written and promulgated by Public Works Standards, Inc (hereinafter, "Standard Specifications") as amended by the General Specifications, Special Provisions, and Technical Specifications for PAVEMENT REHABILITATION PROGRAM — YNEZ ROAD (WINCHESTER ROAD TO SOLANA WAY), PROJECT NO. PW10-14. Copies of these Standard Specifications are available from the publisher: BNi Building News Division of BNi Publications, Inc. 1612 South Clementine St. Anaheim, California 92802 (714) 517-0970 The Standard Specifications will control the general provisions, construction materials, and construction methods for this Contract except as amended by the General Specifications, Special Provisions, and Technical Specifications for PAVEMENT REHABILITATION PROGRAM — YNEZ ROAD (WINCHESTER ROAD TO SOLANA WAY), PROJECT NO. PW10-14. In case of conflict between the Standard Specifications and the other Contract Documents, the other Contract Documents shall take precedence over, and be used in lieu of, such conflicting portions. CONTRACT C-1 1608 Where the Contract Documents describe portions of the work in general terms, but not in complete detail, it is understood that the item is to be furnished and installed completed and in place and that only the best general practice is to be used. Unless otherwise specified, the CONTRACTOR shall furnish all labor, materials, tools, equipment, and incidentals, and do all the work involved in executing the Contract. The Contract Documents are complementary, and what is called for by anyone shall be as binding as if called for by all. Any conflict between this Contract and any other Contract Document shall be resolved in favor of this Contract. 2. SCOPE OF WORK. CONTRACTOR shall perform everything required to be performed, shall provide and furnish all the labor, materials, necessary tools, expendable equipment, and all utility and transportation services required for the following: PAVEMENT REHABILITATION PROGRAM — YNEZ ROAD (WINCHESTER ROAD TO SOLANA WAY) PROJECT NO. PW10-14 All of said work to be performed and materials to be furnished shall be in strict accordance with the Drawings and Specifications and the provisions of the Contract Documents hereinabove enumerated and adopted by CITY. 3. CITY APPROVAL. All labor, materials, tools, equipment, and services shall be furnished and work performed and completed under the direction and supervision, and subject to the approval of CITY or its authorized representatives. 4. CONTRACT AMOUNT AND SCHEDULE. The CITY agrees to pay, and CONTRACTOR agrees to accept, in full payment for, the work agreed to be done, the sum of $2,177,177, the total amount of the base bid. CONTRACTOR agrees to complete the work in a period not to exceed 90 working days, commencing with delivery of a Notice to Proceed by CITY. Construction shall not commence until bonds and insurance are approved by CITY. 5. CHANGE ORDERS. All change orders shall be approved by the City Council, except that the City Manager is hereby authorized by the City Council to make, by written order, changes or additions to the work in an amount not to exceed the contingency as established by the City Council. 6. PAYMENTS A. LUMP SUM BID SCHEDULE: Before submittal of the first payment request, the CONTRACTOR shall submit to the Director of Public Works a schedule of values allocated to the various portions of the work, prepared in such form and supported by such data to substantiate its accuracy as the Director of Public Works may require. This schedule, as approved by the Director of Public Works, shall be used as the basis for reviewing the CONTRACTOR's payment requests. CONTRACT C-2 1608 B. UNIT PRICE BID SCHEDULE: Pursuant to Section 20104.50 of the Public Contract Code, within 30 days after submission of a payment request to the CITY, the CONTRACTOR shall be paid a sum equal to 95% of the value of the work completed according to the bid schedule. Payment request forms shall be submitted on or about the 30th day of each successive month as the work progresses. The final payment, if unencumbered, or any part thereof unencumbered, shall be made 60 days after acceptance of final payment and the CONTRACTOR filing a one-year Warranty and an Affidavit of Final Release with the CITY on forms provided by the CITY. C. Payments shall be made on demands drawn in the manner required by law, accompanied by a certificate signed by the City Manager, stating that the work for which payment is demanded has been performed in accordance with the terms of the Contract, and that the amount stated in the certificate is due under the terms of the Contract. Partial payments on the Contract price shall not be considered as an acceptance of any part of the work. D. Interest shall be paid on all undisputed payment requests not paid within 30 days pursuant to Public Contracts Code Section 20104.50. Public Contract Code Section 7107 is hereby incorporated by reference. 7. LIQUIDATED DAMAGES — EXTENSION OF TIME. In accordance with Government Code Section 53069.85, CONTRACTOR agrees to forfeit and pay to CITY the sum of $1,000.00 per day for each calendar day completion is delayed beyond the time allowed pursuant to Paragraph Four of this Contract. Such sum shall be deducted from any payments due to or to become due to CONTRACTOR. CONTRACTOR will be granted an extension of time and will not be assessed liquidated damages for unforeseeable delays beyond the control of, and without the fault or negligence of, the CONTRACTOR including delays caused by CITY. Within 10 calendar days of the occurrence of such delay, CONTRACTOR shall give written notice to CITY. Within 30 calendar days of the occurrence of the delay, CONTRACTOR shall provide written documentation sufficient to support its delay claim to CITY. CONTRACTOR'S failure to provide such notice and documentation shall constitute CONTRACTOR'S waiver, discharge, and release of such delay claims against CITY. 8. WAIVER OF CLAIMS. On or before making each request for payment under Paragraph Six above, CONTRACTOR shall submit to CITY, in writing, all claims for compensation as to work related to the payment. Unless the CONTRACTOR has disputed the amount of the payment, the acceptance by CONTRACTOR of each payment shall constitute a release of all claims against the CITY related to the payment. CONTRACTOR shall be required to execute an affidavit, release, and indemnity agreement with each claim for payment. 9. PREVAILING WAGES. Pursuant to the provisions of Section 1773 of the Labor Code of the State of California, the City Council has obtained the general prevailing rate of per diem wages and the general rate for holiday and overtime work in this locality for each craft, classification, or type of workman needed to execute this Contract, from the Director of the Department of Industrial Relations. These rates are available from the California Department of Industrial Relations' Internet Web Site at http://www.dir.ca.gov. CONTRACT C-3 1608 CONTRACTOR shall post a copy of such wage rates at the job site and shall pay the adopted prevailing wage rates as a minimum. CONTRACTOR shall comply with the provisions of Section 1773.8, 1775, 1776, 1777.5, 1777.6, and 1813 of the Labor Code. Pursuant to the provisions of 1775 of the Labor Code, CONTRACTOR shall forfeit to the CITY, as a penalty, the sum of $50.00 for each calendar day, or portion thereof, for each laborer, worker, or mechanic employed, paid less than the stipulated prevailing rates for any work done under this Contract, by him or by any subcontractor under him, in violation of the provisions of the Contract. 10. TIME OF THE ESSENCE. Time is of the essence in this contract. 11. INDEMNIFICATION. All work covered by this Contract done at the site of construction or in preparing or delivering materials to the site shall be at the risk of CONTRACTOR alone. CONTRACTOR agrees to save, indemnify, hold harmless and defend CITY OF TEMECULA, TEMECULA COMMUNITY SERVICES DISTRICT, and/or SUCCESSOR AGENCY TO THE TEMECULA REDEVELOPMENT AGENCY, its officers, employees, and agents, against any and all liability, injuries, or death of persons (CONTRACTOR'S employees included) and damage to property, arising directly or indirectly out of the obligations herein undertaken or out of the operations conducted by CONTRACTOR, save and except claims or litigations arising through the sole active negligence or sole willful misconduct of the CITY. The CONTRACTOR shall indemnify and be responsible for reimbursing the CITY for any and all costs incurred by the CITY as a result of Stop Notices filed against the project. The CITY shall deduct such costs from Progress Payments or final payments due to the CONTRACTOR. 12. GRATUITIES. CONTRACTOR warrants that neither it nor any of its employees, agents, or representatives has offered or given any gratuities or promises to CITY's employees, agents, or representatives with a view toward securing this Contract or securing favorable treatment with respect thereto. 13. CONFLICT OF INTEREST. CONTRACTOR warrants that none of its partners, members or shareholders are related by blood or marriage to any employee of the CITY who has participated in the development of the specifications or approval of this project or who will administer this project nor are they in any way financially associated with any CITY officer or employee, or any architect, engineer, or other preparers of the Drawings and Specifications for this project. CONTRACTOR further warrants that no person in its employ nor any person with an ownership interest in the CONTRACTOR has been employed by the CITY within one year of the date of the Notice Inviting Bids. 14. CONTRACTOR'S AFFIDAVIT. After the completion of the work contemplated by this Contract, CONTRACTOR shall file with the City Manager, its affidavit stating that all workmen and persons employed, all firms supplying materials, and all subcontractors upon the Project have been paid in full, and that there are no claims outstanding against the Project for either labor or materials, except certain items, if any, to be set forth in an affidavit covering disputed claims or items in connection with a Stop Notice which has been filed under the provisions of the laws of the State of California. CONTRACT C-4 1608 15. NOTICE TO CITY OF LABOR DISPUTES. Whenever CONTRACTOR has knowledge that any actual or potential labor dispute is delaying or threatens to delay the timely performance of the Contract, CONTRACTOR shall immediately give notice thereof, including all relevant information with respect thereto, to CITY. 16. BOOKS AND RECORDS. CONTRACTOR's books, records, and plans or such part thereof as may be engaged in the performance of this Contract, shall at all reasonable times be subject to inspection and audit by any authorized representative of the CITY. 17. INSPECTION. The work shall be subject to inspection and testing by CITY and its authorized representatives during manufacture and construction and all other times and places, including without limitation, the plants of CONTRACTOR and any of its suppliers. CONTRACTOR shall provide all reasonable facilities and assistance for the safety and convenience of inspectors. All inspections and tests shall be performed in such manner as to not unduly delay the work. The work shall be subject to final inspection and acceptance notwithstanding any payments or other prior inspections. Such final inspection shall be made within a reasonable time after completion of the work. 18. DISCRIMINATION. CONTRACTOR represents that it has riot, and agrees that it will not, discriminate in its employment practices on the basis of race, creed, religion, national origin, color, sex, age, or handicap. 19. GOVERNING LAW. The City and Contractor understand and agree that the laws of the State of California shall govern the rights, obligations, duties and liabilities of the parties to this Contract and also govern the interpretation of this Contract. Any litigation concerning this Contract shall take place in the municipal, superior, or federal district court with geographic jurisdiction over the City of Temecula. In the event of litigation between the parties concerning this Contract, the prevailing party as determined by the Court, shall be entitled to actual and reasonable attorney fees and litigation costs incurred in the litigation. 20. PROHIBITED INTEREST. No member, officer, or employee of the City of Temecula or of a local public body who has participated in the development of the specifications or approval of this project or will administer this project shall have any interest, direct or indirect, in the contract or the proceeds thereof during his/her tenure or for one year thereafter. Furthermore, the contractor/consultant covenants and agrees to their knowledge that no board member, officer or employee of the City of Temecula has any interest, whether contractual, non -contractual, financial or otherwise, in this transaction, or in the business of the contracting party other than the City of Temecula, and that if any such interest comes to the knowledge of either party at any time, a full and complete disclosure of all such information will be made, in writing, to the other party or parties, even if such interest would not be considered a conflict of interest under Article Four (commencing with Section 1090) or Article 4.6 (commencing with Section 1220) of Division Four of Title I of the Government Code of the State of California. 21. ADA REQUIREMENTS. By signing this contract, Contractor certifies that the Contractor is in total compliance with the Americans with Disabilities Act of 1990, Public Law 101- 336, as amended. CONTRACT C-5 1608 22. WRITTEN NOTICE. Any written notice required to be given in any part of the Contract Documents shall be performed by depositing the same in the U.S. Mail, postage prepaid, directed to the address of the CONTRACTOR as set forth in the Contract Documents, and to the CITY addressed as follows: Mailing Address: Greg Butler Director of Public Works/City Engineer City of Temecula P.O. Box 9033 Temecula, CA 92589-9033 Street Address: Greg Butler Director of Public Works/City Engineer City of Temecula 41000 Main Street Temecula, CA 92590-3606 CONTRACT C-6 1608 IN WITNESS WHEREOF, the parties hereto have caused this Contract to be executed on the date first above written. DATED: CONTRACTOR All American Asphalt P.O. Box 2229 Corona, CA 92878 951-736-7600 By: Mark Luer Print or type NAME President Print or type TITLE By: Robert Bradley Print or type NAME Vice President Print or type TITLE (Signatures of two corporate officers required for Corporations) DATED: CITY OF TEMECULA By: Chuck Washington, Mayor ATTEST: Susan W. Jones, MMC, City Clerk APPROVED AS TO FORM: Peter M. Thorson, City Attorney DB CONTRACT C-7 1608 �'•nr rnI1r(.l'11 TE E UL.A Location Map-Ynez Road 0 � 4��1111 4 ��� SIN 4,4,r +,441 d4/11 AO,„.. • "PA - AO 4ir. 41 ■ ...., wow. 4- noilinft. 1AyEtiiiiita1)4***-11.116;At fir' ilk _ t i , , N1C�L=E=LN 7 . � ‘ 1 11441 rz v X11 IIIIIIIIIIIl� 1400 2800 4200 ft. Map center: 6285152, 2134663 This map is a user generated static output from an Internet mapping site and is for general reference only. Data layers that appear on this map may or may not be accurate, current, or otherwise reliable. THIS MAP IS NOT TO BE USED FOR NAVIGATION. Legend -- City Streets Parcels Scale: 1:14,424 CITY OF TEMECULA PAVEMENT REHABILITATION PROGRAM—CITYWIDE Circulation Project Project Description: Project will include the environmental processing, design, construction of pavement rehabilitation, and reconstruction of major streets as recommended in the Pavement Management System. Benefit: Project will improve pavement conditions so that the transportation needs of the public, business industry, and government can be met. Project Status: This project is ongoing. Department: Public Works—Account No. 210.165.655 Priority: I Project Cost: Actua Is to Date 2011-12 2012-13 2013-14 2014-15 2015-16 Future Total Project Years Cost Administration $ 49,076 $ 309.606 $ 160,000 $ 160,000 S 160,000 $ 160.000 $ 998,682 Construction $8.931,000 $ 4,570,000 $ 4,570,000 54,570,000 $ 4.570,000 527,211,000 Construction $244,017 58,682,022 S 1,191.157 S 1,214,980 S 1,239,280 $ 12,571,456 Engineering S 98,645 $ 50,000 $ 50,000 S 50,000 $ 50,000 $ 298,645 Design $194,941 5 168.897 $ 230,000 $ 230,000 S 230,000 S 230.000 8 - S 1,283,838 Totals $244,017 59.508 148 $ 5,010,000 S 5.010.000 $ 5,010,000 S 5.010 000 S - S29.792.165 Actua Is Source of Funds: to Date 2011-12 2012-13 2013-14 2014-15 2015-16 Future Total Project Years Cost Capital Project Reserves S 826,126 S 5.010.000 $ 5,836,126 Measure A $244,017 58,682,022 S 1,191.157 S 1,214,980 S 1,239,280 $ 12,571,456 Unspecified* $ 3,818,843 $ 3,795,020 53,770,720 S11,384,583 Total Funding: $244,017 S9.508 148 S 5.010.000 S 5.010.000 S 5,010,000 S 5.010,000 8 - S 29.792.165 Future Operation & Maintenance Costs: 2011-12 2012-13 2013-14 2014-15 1 1 2015-16 1 *Project cannot be constructed until a funding source is identified. 63 Item No. 13 Approvals City Attorney Director of Finance City Manager RAT - CITY OF TEMECULA AGENDA REPORT TO: City Manager/City Council FROM: Greg Butler, Director of Public Works/City Engineer DATE: June 26, 2012 SUBJECT: Specifications and Authorization to Solicit Bids for the Traffic Safety and Bridge Light Retrofit, PW 12-08 PREPARED BY: Amer Attar, Principal Engineer Chris White, Assistant Engineer - CIP RECOMMENDATION: Approve the specifications and authorize the Department of Public Works to solicit bids for the Traffic Safety and Bridge Light Retrofit, PW 12-08. BACKGROUND: In March 2010, the City of Temecula was awarded grant funds through the American Recovery and Reinvestment Act (ARRA) of 2009 to develop energy efficiency programs. The City was granted $940,700 from the Department of Energy (DOE) Energy Efficiency and Conservation Block Grant (EECBG), which ends on September 27, 2012. On April 10,2012, The City Council authorized the transfer of $295,531 from the Energy Efficiency and Conservation Block Grant Fund 131 and $9,442 from Fund 210 to the Traffic Safety and Bridge Light Retrofit Project. The Traffic Safety and Bridge Light Retrofit Project will replace lower efficiency high pressure sodium lighting technology with more energy efficient induction lighting technology at 113 traffic intersections and atop three bridges within the City of Temecula. The vast majority of the intersections have four high pressure sodium lamps ranging in wattage from 85 - 200 watts per lamp. The traffic safety and bridge lights operate approximately 12 hours per day and 365 days a year. The annual electricity usage for the existing high pressure sodium street lights is estimated at 492,750 kWh. The proposed induction lamps use 85 watts compared to the existing high pressure sodium lamps, which use 200, 250 and 450 watt lamps. The City considered both LED and induction lighting technologies; however staff determined that the light dispersion quality, energy efficiencies, and reliability of the induction lamps are preferable over the LED lamps. The annual electricity usage with the induction lamps is estimated at 179,580 kWh. Replacing the high pressure sodium lights with higher efficient induction lighting technology would reduce energy use and save the City operational and maintenance costs. The Traffic Safety and Bridge Lighting Retrofit Program will use approximately $305,000 of EECBG funds for the retrofit project. The annual savings as a result of the implementation of this project are estimated to be 313,170 kWh in electricity useage and $66,000 in costs. Project specifications are complete and the project is ready to be advertised for bids. The contract documents are available for review in the Director of Public Works/City Engineer's office. FISCAL IMPACT: The total estimated cost for this project is $305,000. All funding for the Traffic Safety and Bridge Lighting Retrofit project will come from the Energy Efficiency and Conservation Block Grant funds. No General Fund revenues will be used for this project. ATTACHMENTS: 1. List of Intersections with 120 Volts Safety Lights 2. List of Intersection with 240 Volt Safety Lights and Bridges 32. Rancho California Rd. @ Old Town Front St. /Jefferson Ave. (4) Intersections with 120vac Safety Lights 1. Margarita Rd. @ Overland Dr. (4) 2. Margarita Rd. @ North General Kearny Rd. (4) 3. Margarita Rd. @ Pio Pico Rd. (4) 4. Margarita Rd. @ Rustic 6/en Dr. /Harveston School Rd. (4) 5. Margarita Rd. @ Winco Driveway (2) 6. Margarita Rd. @ Pauba Rd. (4) 7 Margarita Rd. @ Rancho Vista Rd. (4) 8. Margarita Rd. @ Yukon Rd. /Honors Dr. (4) 9. Margarita Rd. @ La Serena Way (3) 10. Margarita Rd. @ Avenida Barca (4) 11. Margarita Rd. @ Moraga Rd. (4) 12. Margarita Rd. @ Stonewood Dr. (4) 13. Margarita Rd. @ Solana Way (4) 14. Ynez Rd. @ Palm Plaza N /Promenade Mall N. (4) 15. Ynez Rd. @ Overland Dr. (4) 16. Rancho California Rd. @ Town Center/Hope Way (4) 17 Ynez Rd. @ Solana Way (4) 18. Rancho California Rd. @ Via Las Colinas (3) 19. Rancho Vista Rd. @ Meadows Pkwy. (4) 20. Rancho California Rd. @ Meadows Pkwy. (4) 21. Rancho California Rd. @ Margarita Rd. (4) 22. Rancho California Rd. @ Lyndie Lane (4) 23. Rancho California Rd. @ Moraga Rd. (4) 24. Rancho California Rd. @ Butterfield Stage Rd. (4) 25. Pauba Rd. @ Fire Station 84/Calle Ventura (4) 26. Rancho Vista Rd. @ Mira Loma Dr. (4) 27 Rancho California Rd. @ Humber Dr. /Cosmic Dr. (4) 28. Rancho California Rd. @ Business Park Dr. W /Ridge Park (4) 29. Ynez Rd. @ Rancho Vista Rd. (4) 30. Ynez Rd. @ Pauba Rd. (4) 31. Ynez Rd. @ Santiago Rd. (4) 50 Butterfield Stage Rd. @ We/ton Way/Channel St. (4) 33. Ynez Rd. @ Tierra Vista Rd. (4) 34. Jefferson Ave. @ Del Rio Rd. (4) 35. Jefferson Ave. @ Via Montezuma (4) 36. Jefferson Ave. @ Overland Dr. (4) 37 La Serena Way @ Meadows Pkwy. (4) 38. Winchester Rd. @ Enterprise Circle North/South (4) 39. Winchester Rd. @ Jefferson Ave. (4) 40. Winchester Rd. @ Ynez Rd. (4) 41. Winchester Rd. @ Promenade Mall East/Margarita Meadows (4) 42 Winchester' Rd. @ Margarita Rd. (4) 43. Temecula Pkwy. @ Old Town Front St. /Western Bypass (4) 44. Temecula Pkwy. @ La Paz St. (4) 45. Temecula Pkwy. @ Pechanga Pkwy. (4) 46. Temecula Pkwy. @ Country Glen Way (3) 47 Temecula Pkwy. @ Margarita Rd. /Redhawk Pkwy. (4) 48. Temecula Pkwy. @ Mahlon Vail Rd. (4) 49. Butterfield Stage Rd. @ Nighthawk Pass (4) 51. Butterfield Stage Rd. @ Wolf Store Rd. (4) 52. Butterfield Stage Rd. @ DePortola Rd. (3) 53. Butterfield Stage Rd. @ Pauba Rd. (4) 54. Pauba Rd. @ Via Rami/Linfield Way (4) 55. Vail Ranch Pkwy. @ Nighthawk Pass (4) 56. Vail Ranch Pkwy. @ Redhawk Pkwy. (4) 57 Redhawk Pkwy. @ Wolf Store Rd. /Via Rio Temecula (4) 58. Redhawk Pkwy. @ Wolf Valley Rd. (4) 59. Redhawk Pkwy. @ Peppercorn Dr. /Caminito Avila (4) 60 Deer Hollow Way @ Peppercorn Dr. /Jon William Way/Anza Rd. (4) 61. Deer Hollow Way @ Peach Tree St. /Via La Colorada (4) 62. Pechanga Pkwy. @ Deer Hollow Way (4) 63. Pechanga Pkwy. @ Casino Dr. South (4) 64. Pechanga Pkwy. @ Casino Dr. North (3) 65. Pechanga Pkwy. @ Wolf Valley Rd. /Via Eduardo (4) 66. Pechanga Pkwy. @ Loma Linda Rd. (4) 67 Pechanga Pkwy. @ Muirfield Dr. (4) 68. Pechanga Pkwy. @ Rainbow Canyon Rd. (4) 69. Meadows Pkwy. 0 McCabe Dr. /Sunny Meadows Pkwy. (4) Intersections with 240vac Safety Lights 1. Diaz Rd. @ Rancho Way (4) 2. Rancho California Rd. @ Diaz Rd. /Vincent Moraga Dr. (4) 3. Ynez Rd. @ Town Center N. /Tower Plaza N. (4) 4. Ynez Rd. @ Town Center 5. /Tower Plaza 5. (4) 5. Promenade Mall West @ Ring Rd (4) 6. Promenade Mall North @ Ring Rd. (4) 7 Ynez Rd. @ Palm Plaza 5. /Promenade Mall 5. (4) 8. Old Town Front St. @ Santiago Rd. /First St. (4) 9. Rancho California Rd. @ Ynez Rd. (4) 10. Ynez Rd. @ DLR Dr. /Ynez Court (4) 11. Ynez Rd. @ Motor Car Pkwy. (4) 12. Jefferson Ave. @ Sanborn Ave. (4) 13. Ynez Rd. @County Center Dr. (4) 14. Ynez Rd. @ Equity Dr. (4) 15. Overland Dr. @ Promenade Way/Nicole Lane (4) 16. Nicolas Rd. @ North General Kearny Rd. (4) 17. Nicolas Rd. @ Rancho Temecula Town Center (4) 18. Winchester Rd. @ Nicolas Rd. (4) 19. Winchester Rd. @ Roripaugh Rd. (4) 20. Winchester Rd. @ Promenade Mall West (4) 21. Winchester Rd. @ Diaz Rd. (4) 22. Date St. @ Lakeview Rd. (4) 23. North General Kearny Rd. @ Camino Campos Verdes (4) 24. Margarita Rd. @ Dar to% Rd. /Lucky Center (4) 25. Margarita Rd. @ DePortola Rd. (4) 26. Ynez Rd. @ Date St. (4) 27. Margarita Rd. @ Date St. (4) 28. Margarita Rd. @ Verdes Lane (4) 29. Margarita Rd. @ Harveston Way (4) 30. Margarita Rd. @ Santiago Rd. (4) 31. Margarita Rd. @ Abbott Vascular Dr. /Solana Ridge (4) 32. Temecula Pkwy. 0 Kevin Place/Rancho Community Church (5) 33. Temecula Pkwy. @ Avenida De Missiones/Rancho Pueblo Rd. (4) 34. Temecula Pkwy. @ Camino Del Sol (4) 35. Temecula Pkwy. @ Meadows Pkwy. /Apis Rd. (4) 36. Temecula Pkwy. @ Butterfield Stage Rd. (4) 37 Butterfield Stage Rd. @ Crowne Hill Dr. (4) 38. Campanula Way @ Camino Del Sol (4) 39. Redhawk Pkwy. @ Overland Trail/Paseo Parallon (4) 40. Pechanga Pkwy. @ Wolf Creek Dr. South (4) 41. Pechanga Pkwy. @ Pechanga Resort Dr. (4) 42. Wolf Valley Rd. @ Wolf Creek Dr. North/South (4) 43. Pechanga Pkwy. @ Wolf Creek Dr, North/Via Consuelo (4) 44. Temecula Pkwy. @ Jedediah Smith Rd. (5) Item No. 14 Approvals City Attorney Director of Finance City Manager CITY OF TEMECULA AGENDA REPORT TO: City Manager/City Council FROM: Greg Butler, Director of Public Works/City Engineer DATE: June 26, 2012 SUBJECT: Approval of Parcel Map 36358 (located at the southwest comer of Landings Road and Village Road) PREPARED BY: Mayra De La Torre, Senior Engineer, Land Development John Pourkazemi, Associate Engineer, Land Development RECOMMENDATION: Approve Parcel Map 36358 in conformance with the Conditions of Approval. BACKGROUND: Record title interest: LSK, LLC Parcel Map No. 36358 proposes to subdivide 2.45 gross/net acres into three parcels — 1.16 net acres, 0.65 net acres and 0.65 net acres, respectively— for commercial development. The property covered by this map is located at the southwest corner of Landings Road and Village Road. Tentative Parcel Map No. 36358 (i.e., PA11-0009) was approved by the Planning Director at the Director's Hearing of August 18, 2011 and is valid for three years, expiring on August 18, 2014. All public improvements are in place and the survey monuments have been set. The property owner has met the terms of the Conditions of Approval for map recordation and this parcel map is in conformance with the approved tentative parcel map. The approval of a subdivision map, which substantially complies with the approved tentative map, is a mandatory ministerial act under State Law. FISCAL IMPACT: None ATTACHMENTS: 1. Fees and Securities Report 2. Vicinity Map 3. Reduced Copy of Parcel Map No. 36358 CITY OF TEMECULA ENGINEERING DEPARTMENT FEES AND SECURITIES REPORT PARCEL MAP NO. 36358 DATE: June 26, 2012 IMPROVEMENTS FAITHFUL PERFORMANCE SECURITY MATERIAL & LABOR SECURITY Street and Drainage $ 0.00 $ 0.00 Water $ 0.00 $ 0.00 Sewer $ 0.00 $ 0.00 TOTAL $ 0.00 $ 0.00 Monumentation $ 0.00 - DEVELOPMENT FEES RCFCD (ADP) Fee Development Impact Fee SERVICE FEES Planning Fee Fire Fee TCSD Fee Plan Check Fee $ Paid $ Paid $ 353.00 $ 251.00 $ 171.00 $ 2,372.00 Monumentation Inspection Fee $ 332.00 Fees Paid to Date $ 3,479.00 Balance of Fees Due $ 0.00 V/'/v/ry /11,4i) Nor o Smze NUMBER OF PARCELS: 3 PARCEL mass A%Am zau KISS NET AREA2.454 KISS OWNERS' STATEMENT WE IEVL TSUBDIVISION SIEONN ((009. 1 CTIEONL O07(tc' SsONED T THE VIt£SS iRY 10PA1SA0.FAR TITI n SAO LANO. 'I rIA ICONSEUT10'NIAKING AFC) 01:001!1 155PI N515 EON 51.krIFS 51-1025 WITH060LSI.0 :I 0 v(: THE IIEREBY DEDICATE 71(6.531.7504RIGHTS OF VFESC ALONG VILLAGE R0.VD270 .:0100100:DAD 7(1 TIE P1BI!0. TU 1(9(5ERS 00 PARCELS I THROUGH 3 INCI UMIYE. EXCEPT Dot NF 1 F VW! FSI L('NTITITALCIORP RCELIL(S 111 0V IT ONE IL 170 U(1TM OP0 1 00 E F001 ACCESS 1t1µ 04105E LSUUVPI'XI \(VtiOS UPES 'G HV3 HT V ACATIOT SHERI-OHn1Al .:1m DYDICA DON AS TOTO TAR IYA(AITO NOTARY ACKNOWLEDGMENT cot,NTy or IN 77 -IE CITY OF TEMECULA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA PARCEL MAP 36358 09(50 421110(51410,12 OF PARCEL 'a"06 LOT LINE A UI(ISTAIFNT 04I9-6291. FILED AS INSTRUMENT NO. 2(67.145420. RLCORD(A 00105112"1 (513IN THE OFFICE (M,THT 00(15TT' RECORDER OF 011LRS(00. BEING LOT 9 AND A POI21I05 OF LOT 16.01 1 RAM I 'O. 29Q9.1. AS SHOWN ON MAOFILED ('(1,0(5000751.727,04054.20 1110000012117061:5(08 01 5(505.1020004 OF RI\0RSIUEMUNI ) CALIFORNIA DENNIS JANDA, INC. MAY 2011 2(_ BEFORE 510 PERSONALLY '11'00A00(20 FO ) SI? ON THE BASIS OF TO RI F 6T(0.Y EIFECI:"E0116SAIF I(I PARI R 11,71101/1200C RAPCT R0 IIRIFA; ATR._ t51ETTHE PER5051 2. OR 7111 ENTRY LPO.' BEIIALE OF WHICH THE 6(09254. ACE. EXCOLTENTFNST00FV (9TH LI L15L (1!!552\i0: LLORIA THAT THE FORGO tAPN IF. (RIFE 550(O0RF1'. .11.NE FS my IIAND TAX COLLECTORS CER7/RCA7E 1IIAIF (-FUMY 1 I(4 ACCORDING1 11F. 9500/110/ 1 OFF +ICI, ..SOI SIAF7 F46 SPECT. EI.9-5 COLLECI ED 39 TAXES.0\'\ LIC Mil NOT YET rAtAna WEIECEIARC ESTIMATE) TO BE1 (10.1F 01VM11119 COI 1IICHIP TAX BOND CER RICA IE O F • 1 HE I.10ARD OF St. 'A o A AL_ F cau Y vi,GOF R a CALIFORNIA . _ IS01S COLIF (ICH -OT DULY I'D BY ▪ 159( S RV1!R v0 1. ',YAMAND SAID POI). CELT )L. OVIJ]F B1'SAI SUPERVISORS 0A1D I. KLA1A HARPER -IMO!! aERR OI: T: HOARD OF SIv0940(S CASA ma POND ('ME 00151 COuea0R 51 UCPLI. SIGNATURE OMISSIONS DEPLRT PI IRSIMMF 1 SECTION TAT STA 51119105 ACT. THE: P- E IPHIJnxuc OWNERTATFINAMT9TS AND I IR(TIF - 55 II ANT 9AF9 oBTTw 0 1 HE 0191,191 OF ( lC 'RE ED LIABILITY Cl. 50. • I1.0Lt IL LPGx1l. 55 Ill L R0i1S•\NDOI HEY DROCARa0NS13 WFIA17U69 •A\F R,vl196,0E IJtlLL SF EAVI 550 9LL O(n"T OF"rEIFPO FGOS0.' OPERATING -rElF.REFOR 95I). c1 0(15G 450 141-5106150 ODIN0 1HE REGEI IOW HIPSTOCK OR DIRECTIONALLY DRILL AND 511N1BO L TUFT NO.(LOR('As wars, 705501.5 AND 5114FTS INTO. THROU011 OR ACROSS 1111 SUDSURFACE OF TIE LAND AND TO BOTTOM ST Eli WI IIMITOCKED OP DMECT«INALLY DRILLED WELLS TUNNELS AND1114FM AND IWNEATH OR 11E1 1 t0 A DUPE MAIN', AIN IUMAIR (TEMPT!, AND 0,1, A rE ANY SUCH MITTS CR MINES MD HOED HOM 1.mteEnI01, OPi'RAT e0t OF OR ,VrEFt irFON 1 Hr.5t0lACF. 02, uPPIIR FT, i0 AC O Fil!I ADD. AS xXnxl_I 5060MMA2,14S AS VSlxl 50 rv,R'll.1 CAI. IEC(IRIS. • EAS .T FO P PLi (' triThrEIFS AND INGRalSTECAILSS INCEDIF,F91, IMRPOSL,,S. 1.4 500 001505(0.R 03AsP111 O MMTINHIM OFFICE FL RECORDS OF RI, LRSIDE COU51 1 CALIFORNIA 45 FA:SEMEN" TOR l'IFFIF,Et .1555 020 INCUW:“ IHMHOST5 111 F4500 OF 0R0001i ASINT FROL O x0I:FCAL RECORDS u D0 Rv55)015 TTA.50551A. AN TAM-MT:HI I OR FITC VDU MO AND INcRiSS,TORESS AN lENC-rIWN-MI.PURPOsE-S.,R O F FEAIZO, CAI II ORNIA INC 0C-1 n Ir 5 "v' NO T REOxVPRS 5I : Ox A. .A4('1.Md BAND V . SAID EASEMENT IF.NOT PLITTABL0F66051R(ORDO.. ▪ EASEMEVI- FOR 9EIIPROCAL EASEMENT VC] MNA'IENA5Y£ .50R_IEv7 i5'FAVOR 00 (45( FF.1.F IINUTED I API Y (WORDED R As1.R 150 n 4.,m RH,n1D:(FR .RsL.NT. n l • <IRAAA. SHEET 1 OF 2 SHEETS RECORDER'S STATEMENT FILED T _ D.. F OF t..(; AT The REQI tcrt1F TIT. EPA MY (10 TEMECCIA. NO .4944 00. COMMIT n.(:9K, R1 CD0DI scaoivrsIONCLAR,C,ME BY. LAWYERS TETLECON!PAN) SURVEYORS STATEMENT THIS MAP T A5 PREPARED BY MEM CMDCR MY DIRECTION DATED ._RELD SURVEY c F oo (.T E REQUIREMENTS B 1TZ0,5'} ACT AND Olt W0l.III.SE1 ACCORDANCL TIMIS OPrACRE>I TOO THENAPA]-I AT c.o ( W 5 ADEOR5. m (5.PI£r¢ TIHORY TO . RETPACED. ORRERY STATE THAT -1 5 BST ', IM!! ONOIRMS TO THE APPROVED ORCO DT0_ A.,Y AITRO FII TET OSEMAP .D(VI _ UNIT CITY ENGINEERS STATEMENT I HLRRPI' CERTIFY THAT 1HS MAP (01557500:Yl HAS INED ZINY ME OL MY(10 1055 010DI,SIIB 1 L1TIC VME50 APFe0F1O 9M1VN1A":A+D. 4x051..1. .Fn Ax1A.w :OATTIE TONIC( ULA wv,v '0A\1353 L L EN. MIS unALLP 051'1(7 (OAPL1( 9(10.IN.1 0.11(.\ SATISFIED ..\T ThL5. APES TTCHNIC ALLY (YIRRE(T. OA II ICJ F l'TYOFTYM t)..0 CITY CLERKS STATEMENT HxTr< 0611E6 ( ITV OF TEMECIII A 17 91 -IF OF CAI WORM, ncm 1..... 00569.5..0 ERED(AP00'09. ARr KAP. A50(< BDA _L40V E 51 D.a(AI (0. Im.m A<(us AWN(' SUSAN M TONES M IN THE CITY OF TEMECULA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA PARCEL MAP 36358 tl 170 A 01)11010LSION 001'90CEL, '_A' OF IDT L INE ADJ LSI \IF\ 1PAG-0290.01070 -9 I\STUNE:1'',NO. 22023'.928. RECORDED OCTOBER 27, 2003. IN THE 00(907 OF THE COUNTY RECORDER OF RIVERSIDE, BEING MT 9 AND A PORTION OF 00(I6,OFTPAC5 Na 296741. AS SHOW> OV MAP FILED IN BOOK.I23. PAGES SO TH00007 60 INCLUSIVE. 00 MAPS. 06(70009000(0675(06(70071'? 01' RIVERSIDE CALIFORNIA INS-RINSTR 70.2033-8.4.5,28 PEG 1C,27/D3 f NOT to SCALE DSTAD. 'D. NOT TO SCALE ILI 152001 PP (0P GRAPHIC SCALE (NPM) 1r-Ae N SHEET 2 OF 2 SHEETS SURVEYOR'S NOTES MOSS MEd ME M90 Leal PE venule 0' LIMNS ROM MA OF w 2P221-1, O 323/0-85, MIMIC 1C ®Im' 6RAUSE( CMZ. LV/011A. NC16 NMI Ma" 6E 1. • FOLIO 0611(81 AS IC= 2 • IAM 1-1/2. Lam. D ~OW STAYED LS afA. FILE! 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CYTON. tifl'7 CI Mlle OP NFIPS NO /CHM FAO? 6 RAMO LYIOL l CDM !MICE MOVED at E Ed As M614W4T E0.1 -46l526. MOM MEOW 6INOHI LOMY. LNIOHA .111 ®AGNMENT. N FA1016 VIMCYIOHI EVER ZIS1ADAIBR 21, 386 .AS 1LTI1611M IIB 2011E1614, CM= AL1HIf 6.OW511ECEOF. WIONA 6MN6 warns 9116E E AEFF011 6 NEO NO 65'006 ANYDMI0RMAL NA3tHADIS NOME NN ▪ I SE OW OOEEE 0060Y 610101A N ECS BOX L PAX m NS MELTS N1 PANELS Item No. 15 Approvals City Attorney Director of Finance City Manager CITY OF TEMECULA AGENDA REPORT TO: City Manager/City Council FROM: Greg Butler, Director of Public Works/City Engineer DATE: June 26, 2012 SUBJECT: Approval of a Subdivision Improvement Agreement and its securities for Tract Map 23992 (located south of Rancho California Road and west of Ynez Road at Tierra Vista Road) PREPARED BY: Mayra De La Torre, Senior Engineer, Land Development John Pourkazemi, Associate Engineer, Land Development RECOMMENDATION: Approve the Subdivision Improvement Agreement and accept the Faithful Performance Bond and the Labor and Material Bond as security for the Agreement. BACKGROUND: Record title interest: Woodside Homes of Southern California, LLC Tract Map 23992, which was recorded in April 25, 1991, is a multi -family development project within Planning Areas 4-7 of the Rancho Highlands Specific plan. The current Owner/Developer (i.e., Woodside Homes of Southern California, LLC) applied for and processed Planning Application PA10-0326 to construct a 210 -unit triplex multi -family project. The project was approved by the Planning Commission on October 19, 2011 and will expire on October 19, 2013. The project is conditioned to improve Ynez Road along its frontage (i.e., westerly side) from Tierra Vista Road to approximately 440 feet south of Tierra Vista and tie these improvements to the existing Ynez Road improvements. The project is also conditioned to construct the required vehicular traffic controls on Ynez Road (i.e., raised median, traffic signal and signing and striping modifications) from Rancho California Road to Tierra Vista Road. The Owner/Developer is, thus, required to execute the Subdivision Improvement Agreement and Bonds. FISCAL IMPACT: None ATTACHMENT: Securities Report CITY OF TEMECULA ENGINEERING DEPARTMENT SECURITIES REPORT TRACT MAP NO. 23992 DATE: June 26, 2012 IMPROVEMENTS FAITHFUL PERFORMANCE SECURITY MATERIAL & LABOR SECURITY Street and Drainage $ 118,500.00 $ 59,250.00 Water $ 0.00 $ 0.00 Sewer $ 0.00 $ 0.00 TOTAL $ 118,500.00 $ 59,250.00 Monumentation $ 0.00 - Item No. 16 Approvals City Attorney Director of Finance City Manager CITY OF TEMECULA AGENDA REPORT TO: City Manager/City Council FROM: Greg Butler, Director of Public Works/City Engineer DATE: June 26, 2012 SUBJECT: Agreement with TWM Roofing, Inc. for Preventive Roof Maintenance Services at various City locations PREPARED BY: Jerzy Kanigowski, Facility Services Manager RECOMMENDATION: Approve an Agreement for minor maintenance services for preventive roof maintenance services at various City locations with TWM Roofing, Inc., in the amount of $62,740 for Fiscal Year 2012-13. BACKGROUND: On April 30, 2012, the Public Works Department posted on the City of Temecula website a Request for Proposals (RFP) for Preventive Roof Maintenance Services. The Public Works Department received three proposals, which were evaluated to determine the qualifications and competitiveness of each vendor to provide preventive roof maintenance services. TWM Roofing, Inc. was determined to be the most qualified bidder to provide the required preventive roof maintenance services. FISCAL IMPACT: The amount to provide scheduled preventive roof maintenance services is $37,740. In addition, an estimated $25,000 is being requested for non-scheduled repairs and supplemental services. Sufficient funds have been included in the proposed Annual Operating Budget for Fiscal Year 2012-13 in the appropriate expenditure accounts. ATTACHMENTS: Agreement AGREEMENT FOR MINOR MAINTENANCE SERVICES BETWEEN CITY OF TEMECULA AND TWM ROOFING, INC PREVENTIVE ROOF MAINTENANCE SERVICES THIS AGREEMENT is made and effective as of June 26, 2012, between the City of Temecula, a municipal corporation (hereinafter referred to as "City"), and TWM Roofing, Inc, a Corporation, (hereinafter referred to as "Contractor"). In consideration of the mutual covenants and conditions set forth herein, the parties agree as follows: 1. TERM This Agreement shall commence on July 1, 2012, and shall remain and continue in effect until tasks described herein are completed, but in no event later than June 30, 2013, unless sooner terminated pursuant to the provisions of this Agreement. The City may, upon mutual agreement, extend the contract for four additional one year term(s). In no event shall the contract be extended beyond June 30, 2017. 2. SCOPE OF WORK Contractor shall perform all of the work described in the Scope of Work, attached hereto and incorporated herein as Exhibit A. ("Work"), and shall provide and furnish all the labor, materials, necessary tools, expendable equipment, and all utility and transportation services required for the Work. All of said Work to be performed and materials to be furnished for the Work shall be in strict accordance with the specifications set forth in the Scope of Work, Exhibit A. 3. PAYMENT a. The City agrees to pay Contractor monthly, in accordance with the payment rates and terms and the schedule of payment as set forth in Exhibit B, Payment Rates and Schedule, attached hereto and incorporated herein by this reference as though set forth in full, based upon actual time spent on the above tasks. Any terms in Exhibit B, other than the payment rates and schedule of payment, are null and void. This amount shall not exceed Sixty Two Thousand Seven Hundred Forty Dollars ($62,740) for the total term of this agreement unless additional payment is approved as provided in this Agreement. b. Contractor shall not be compensated for any services rendered in connection with its performance of this Agreement which are in addition to those set forth herein, unless such additional services are authorized in advance and in writing by the City Manager. Contractor shall be compensated for any additional services in the amounts and in the manner as agreed to by City Manager and Contractor at the time City's written authorization is given to Contractor for the performance of said services. c. Contractor will submit invoices monthly for actual services performed. Invoices shall be submitted between the first and fifteenth business day of each month, for services provided in the previous month. Payment shall be made within thirty (30) days of receipt of each invoice as to all non -disputed fees. If the City disputes any of Contractor's fees, it shall give written notice to Contractor within thirty (30) days of receipt of an invoice of any 1 disputed fees set forth on the invoice. For all reimbursements authorized by this Agreement, Contractor shall provide receipts on all reimbursable expenses in excess of fifty dollars ($50) in such form as approved by the Director of Finance. 4. PERFORMANCE Contractor shall at all times faithfully, competently and to the best of his or her ability, experience, and talent, perform all tasks described herein. Contractor shall employ, at a minimum, generally accepted standards and practices utilized by persons engaged in providing similar services as are required of Contractor hereunder in meeting its obligations under this Agreement. 5. CITY APPROVAL All labor, materials, tools, equipment, and services shall be furnished and work performed and completed subject to the approval of City or its authorized representatives. 6. WAIVER OF CLAIMS On or before making final request for payment under Paragraph 3 above, Contractor shall submit to City, in writing, all claims for compensation under or arising out of this Agreement. The acceptance by Contractor of the final payment shall constitute a waiver of all claims against City under or arising out of this Agreement, except those previously made in writing and request for payment. Contractor shall be required to execute an affidavit, release and indemnify Agreement with each claim for payment. 7. PREVAILING WAGES Pursuant to the provisions of Section 1773 of the Labor Code of the State of California, the City Council has obtained the general prevailing rate of per diem wages and the general rate for holiday and overtime work in this locality for each craft, classification, or type of workman needed to execute this Contractor from the Director of the Department of Industrial Relations. Copies may be obtained from the California Department of Industrial Relations Internet website at http://www.dir.ca.gov. Contractor shall provide a copy of prevailing wage rates to any staff or sub -contractor hired, and shall pay the adopted prevailing wage rates as a minimum. Contractor shall comply with the provisions of Sections 1773.8, 1775, 1776, 1777.5, 1777.6, and 1813 of the Labor Code. Pursuant to the provisions of 1775 of the Labor Code, Contractor shall forfeit to the City, as a penalty, the sum of $50.00 for each calendar day, or portion thereof, for each laborer, worker, or mechanic employed, paid less than the stipulated prevailing rates for any work done under this Agreement, by him or by any subcontractor under him, in violation of the provisions of the Agreement. 8. SUSPENSION OR TERMINATION OF AGREEMENT WITHOUT CAUSE a. The City may at any time, for any reason, with or without cause, suspend or terminate this Agreement, or any portion hereof, by serving upon the Contractor at least ten (10) days prior written notice. Upon receipt of said notice, the Contractor shall immediately cease all work under this Agreement, unless the notice provides otherwise. If the City suspends or terminates a portion of this Agreement such suspension or termination shall not make void or invalidate the remainder of this Agreement. 2 b. In the event this Agreement is terminated pursuant to this Section, the City shall pay to Contractor the actual value of the work performed up to the time of termination, provided that the work performed is of value to the City. Upon termination of the Agreement pursuant to this Section, the Contractor will submit an invoice to the City, pursuant to Section entitled "PAYMENT" herein. 9. DEFAULT OF CONTRACTOR a. The Contractor's failure to comply with the provisions of this Agreement shall constitute a default. In the event that Contractor is in default for cause under the terms of this Agreement, City shall have no obligation or duty to continue compensating Contractor for any work performed after the date of default and can terminate this Agreement immediately by written notice to the Contractor. If such failure by the Contractor to make progress in the performance of work hereunder arises out of causes beyond the Contractor's control, and without fault or negligence of the Contractor, it shall not be considered a default. b. If the City Manager or his delegate determines that the Contractor is in default in the performance of any of the terms or conditions of this Agreement, it shall serve the Contractor with written notice of the default. The Contractor shall have ten (10) days after service upon it of said notice in which to cure the default by rendering a satisfactory performance. In the event that the Contractor fails to cure its default within such period of time, the City shall have the right, notwithstanding any other provision of this Agreement, to terminate this Agreement without further notice and without prejudice to any other remedy to which it may be entitled at law, in equity or under this Agreement. 10. INDEMNIFICATION The Contractor agrees to defend, indemnify, protect and hold harmless the City of Temecula, Temecula Community Services District, and/or the Successor Agency to the Temecula Redevelopment Agency, its officers, officials, employees and volunteers from and against any and all claims, demands, losses, defense costs or expenses, including attorney fees and expert witness fees, or liability of any kind or nature which the City of Temecula, Temecula Community Services District, and/or the Successor Agency to the Temecula Redevelopment Agency, its officers, agents, employees or volunteers may sustain or incur or which may be imposed upon them for injury to or death of persons, or damage to property arising out of Contractor's negligent or wrongful acts or omissions arising out of or in any way related to the performance or non-performance of this Agreement, excepting only liability arising out of the negligence of the City of Temecula, Temecula Community Services District, and/or the Successor Agency to the Temecula Redevelopment Agency. 11. INSURANCE REQUIREMENTS Contractor shall procure and maintain for the duration of the contract insurance against claims for injuries to persons or damages to property, which may arise from or in connection with the performance of the work hereunder by the Contractor, its agents, representatives, or employees. a. Minimum Scope of Insurance. Coverage shall be at least as broad as: 1) Insurance Services Office Commercial General Liability form No. CG 00 01 11 85 or 88. 3 2) Insurance Services Office Business Auto Coverage form CA 00 01 06 92 covering Automobile Liability, code 1 (any auto). If the Contractor owns no automobiles, a non -owned auto endorsement to the General Liability policy described above is acceptable. 3) Worker's Compensation insurance as required by the State of California and Employer's Liability Insurance. If the Contractor has no employees while performing under this Agreement, worker's compensation insurance is not required, but Contractor shall execute a declaration that it has no employees. b. Minimum Limits of Insurance. Contractor shall maintain limits no less than: 1) General Liability: One million ($1,000,000) per occurrence for bodily injury, personal injury and property damage. If Commercial General Liability Insurance or other form with a general aggregate limit is used, either the general aggregate limit shall apply separately to this project/location or the general aggregate limit shall be twice the required occurrence limit. 2) Automobile Liability: One million ($1,000,000) per accident for bodily injury and property damage. 3) Worker's Compensation as required by the State of California; Employer's Liability: One million dollars ($1,000,000) per accident for bodily injury or disease. c. Deductibles and Self -Insured Retentions. Any deductibles or self-insured retentions shall not exceed Twenty Five Thousand Dollars and No Cents ($25,000). d. Other Insurance Provisions. The general liability and automobile liability policies are to contain, or be endorsed to contain, the following provisions: 1) The City of Temecula, the Temecula Community Services District, the Successor Agency to the Temecula Redevelopment Agency, their officers, officials, employees and volunteers are to be covered as insured's, as respects: liability arising out of activities performed by or on behalf of the Consultant; products and completed operations of the Consultant; premises owned, occupied or used by the Consultant; or automobiles owned, leased, hired or borrowed by the Consultant. The coverage shall contain no special limitations on the scope of protection afforded to the City of Temecula, the Temecula Community Services District, and the Successor Agency to the Temecula Redevelopment Agency, their officers, officials, employees or volunteers. 2) For any claims related to this project, the Consultant's insurance coverage shall be primary insurance as respects the City of Temecula, the Temecula Community Services District, the Successor Agency to the Temecula Redevelopment Agency, their officers, officials, employees and volunteers. Any insurance or self-insured maintained by the City of Temecula, Temecula Community Services District, and/or the Successor Agency to the Temecula Redevelopment Agency, its officers, officials, employees or volunteers shall be excess of the Consultant's insurance and shall not contribute with it. 3) Any failure to comply with reporting or other provisions of the policies including breaches of warranties shall not affect coverage provided to the City of Temecula, the Temecula Community Services District, the Successor Agency to the Temecula Redevelopment Agency, their officers, officials, employees or volunteers. 4) The Contractor's insurance shall apply separately to each insured against whom claim is made or suit is brought, except with respect to the limits of the insurer's liability. 4 5) Each insurance policy required by this agreement shall be endorsed to state: should the policy be canceled before the expiration date the issuing insurer will endeavor to mail thirty (30) days' prior written notice to the City. 6) If insurance coverage is canceled or, reduced in coverage or in limits the Contractor shall within two (2) business days of notice from insurer phone, fax, and/or notify the City via certified mail, return receipt requested of the changes to or cancellation of the policy. e. Acceptability of Insurers. Insurance is to be placed with insurers with a current A.M. Best rating of A -:VII or better, unless otherwise acceptable to the City. Self insurance shall not be considered to comply with these insurance requirements. f. Verification of Coverage. Contractor shall furnish the City with original endorsements effecting coverage required by this clause. The endorsements are to be signed by a person authorized by that insurer to bind coverage on its behalf. The endorsements are to be on forms provided by the City. All endorsements are to be received and approved by the City before work commences. As an alternative to the City 's forms, the Contractor's insurer may provide complete, certified copies of all required insurance policies, including endorsements affecting the coverage required by these specifications. g. By executing this Agreement, Contractor hereby certifies: I am aware of the provision of Section 3700 of the Labor Code which requires every employer to be insured against liability for Workman's Compensation or undertake self- insurance in accordance with the provisions of that Code, and I will comply with such provisions before commencing the performance of the work of this Contract. 12. TIME OF THE ESSENCE Time is of the essence in this Agreement. 13. INDEPENDENT CONTRACTOR a. Contractor is and shall at all times remain as to the City a wholly independent contractor. The personnel performing the services under this Agreement on behalf of Contractor shall at all times be under Contractor's exclusive direction and control. Neither City nor any of its officers, employees, agents, or volunteers shall have control over the conduct of Contractor or any of Contractor's officers, employees, or agents except as set forth in this Agreement. Contractor shall not at any time or in any mariner represent that it or any of its officers, employees or agents are in any manner officers, employees or agents of the City. Contractor shall not incur or have the power to incur any debt, obligation or liability whatever against City, or bind City in any mariner. b. No employee benefits shall be available to Contractor in connection with the performance of this Agreement. Except for the fees paid to Contractor as provided in the Agreement, City shall not pay salaries, wages, or other compensation to Contractor for performing services hereunder for City. City shall not be liable for compensation or indemnification to Contractor for injury or sickness arising out of performing services hereunder. 5 14. LEGAL RESPONSIBILITIES The Contractor shall keep itself informed of all local, State and Federal ordinances, laws and regulations which in any mariner affect those employed by it or in any way affect the performance of its service pursuant to this Agreement. The Contractor shall at all times observe and comply with all such ordinances, laws and regulations. The City, and its officers and employees, shall not be liable at law or in equity occasioned by failure of the Contractor to comply with this section. 15. CONTRACTOR'S INDEPENDENT INVESTIGATION No plea of ignorance of conditions that exist or that may hereafter exist or of conditions of difficulties that may be encountered in the execution of the work under this Agreement, as a result of failure to make the necessary independent examinations and investigations, and no plea of reliance on initial investigations or reports prepared by City for purposes of letting this Agreement out to proposal will be accepted as an excuse for any failure or omission on the part of the Contractor to fulfill in every detail all requirements of this Agreement. Nor will such reasons be accepted as a basis for any claims whatsoever for extra compensation or for an extension of time. 16. CONTRACTOR'S AFFIDAVIT After the completion of the Work contemplated by this Agreement, Contractor shall file an affidavit with the City Manager stating that all workmen and persons employed, all firms supplying materials, and all subcontractors on the Work have been paid in full, and that there are no claims outstanding against the project for either labor or materials, except certain items, if any, to be set forth in an affidavit covering disputed claims or items in connection with a Stop Notice which has been filed under the provisions of the laws of the State of California. 17. PROHIBITED INTEREST No officer, or employee of the City of Temecula that has participated in the development of this agreement or its approval shall have any financial interest, direct or indirect, in this Agreement, the proceeds thereof, the Contractor, or Contractor's sub -contractors for this project, during hisiher tenure or for one year thereafter. The Contractor hereby warrants and represents to the City that no officer or employee of the City of Temecula that has participated in the development of this agreement or its approval has any interest, whether contractual, non - contractual, financial or otherwise, in this transaction, the proceeds thereof, or in the business of the Contractor or Contractor's sub -contractors on this project. Contractor further agrees to notify the City in the event any such interest is discovered whether or not such interest is prohibited by law or this Agreement. 18. BOOKS AND RECORDS Contractor's books, records, and plans or such part thereof as may be engaged in the performance of this Agreement, shall at all reasonable times be subject to inspection and audit by any authorized representative of the City. 6 19. UTILITY LOCATION City acknowledges its responsibilities with respect to locating utility facilities pursuant to California Government Code Section 4215. 20. REGIONAL NOTIFICATION CENTERS Contractor agrees to contact the appropriate regional notification center in accordance with Government Code Section 4215. 21. DISCRIMINATION Contractor represents that it has not, and agrees that it will not, discriminate in its employment practices on the basis of race, creed, religion, national origin, color, sex, age, or handicap. 22. WRITTEN NOTICE Any notices which either party may desire to give to the other party under this Agreement must be in writing and may be given either by (i) personal service, (ii) delivery by a reputable document delivery service, such as but riot limited to, Federal Express, that provides a receipt showing date and time of delivery, or (iii) mailing in the United States Mail, certified mail, postage prepaid, return receipt requested, addressed to the address of the party as set forth below or at any other address as that party may later designate by Notice. Notice shall be effective upon delivery to the addresses specified below or on the third business day following deposit with the document delivery service or United States Mail as provided above. Mailing Address: City of Temecula Attn: City Manager P.O. Box 9033 Temecula, CA 92589-9033 Use this Address for a Delivery Service: City of Temecula or Hand -Deliveries ONLY Attn: City Manager 41000 Main Street Temecula, CA 92590 To Contractor: 23. ASSIGNMENT TWM Roofing, Inc. Contact Person: Tom Marshall 2380 Via Monserate Fallbrook, CA 92028 The Contractor shall not assign the performance of this Agreement, nor any part thereof, nor any monies due hereunder, without prior written consent of the City. Upon termination of this Agreement, Contractor's sole compensation shall be payment for actual services performed up to, and including, the date of termination or as may be otherwise agreed to in writing between the City Council and the Contractor. 7 24. LICENSES At all times during the term of this Agreement, Contractor shall have in full force and effect, all licenses required of it by law for the performance of the services described in this Ag ree me nt. 25. GOVERNING LAW The City and Contractor understand and agree that the laws of the State of California shall govern the rights, obligations, duties and liabilities of the parties to this Agreement and also govern the interpretation of this Agreement. Any litigation concerning this Agreement shall take place in the municipal, superior, or federal district court with geographic jurisdiction over the City of Temecula. In the event such litigation is filed by one party against the other to enforce its rights under this Agreement, the prevailing party, as determined by the Court's judgment, shall be entitled to reasonable attorney fees and litigation expenses for the relief granted. 26. ENTIRE AGREEMENT This Agreement contains the entire understanding between the parties relating to the obligations of the parties described in this Agreement. All prior or contemporaneous agreements, understandings, representations and statements, oral or written, are merged into this Agreement and shall be of no further force or effect. Each party is entering into this Agreement based solely upon the representations set forth herein and upon each party's own independent investigation of any and all facts such party deems material. 27. AUTHORITY TO EXECUTE THIS AGREEMENT The person or persons executing this Agreement on behalf of Contractor warrants and represents that he or she has the authority to execute this Agreement on behalf of the Contractor and has the authority to bind Contractor to the performance of its obligations hereunder. The City Manager is authorized to enter into an amendment on behalf of the City to make the following non -substantive modifications to the agreement: (a) name changes; (b) extension of time; (c) non -monetary changes in scope of work; (d) agreement termination. 8 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed the day and year first above written. CITY OF TEMECULA TWM Roofing, Inc. (Two Signatures of corporate officers required unless corporate documents authorize only one person to sign the agreement on behalf of the corporation.) By: By: Chuck Washington, Mayor Tom Marshall, President, Secretary & Treasurer ATTEST: By: By: Susan W. Jones, MMC, City Clerk APPROVED AS TO FORM: By: Peter M. Thorson, City Attorney CONTRACTOR TWM Roofing, Inc. Contact Person: Tom Marshall 2380 Via Monserate, Fallbrook, CA 92028 Phone Number: (760)731-0777 E -Mail TWMSince1978@Gmain.com 9 PM Initials: Date: B EXHIBIT "A" SCOPE OF WORK Contractor recognizes and agrees that this Agreement is for the purpose of establishing a contractual relationship between the City of Temecula and the Contractor, for the future repairs, and maintenance of roof at the various locations upon real and personal property of the City. Work will include maintenance services, and emergency call -out. The procedure for assigning work is set forth as follows: 1. The City Manager or his designee shall submit to Contractor a written "Request for Work". The Request for Work shall include a description of the work to be completed, the time for completion of the work, and the plans and specifications, if any, work. 2. Within five (5) business days of the date of the Request for Work, Contractor shall respond in writing to the Request for Work and advise the City Manager whether it can perform the work and specify the cost of material which will be required and the estimated cost of labor and equipment necessary to complete the work in accordance with the labor and equipment rates set forth in Exhibit "B" to this Agreement. 3. In the event emergency work is required, the City Manager may transmit the Request for Work orally to the Contractor. As soon as practical following the emergency, the Contractor and Director shall in good faith confirm in writing the scope of the emergency work undertaken. 4. Upon acceptance of the Contractor's response by the City Manager, the Contractor shall proceed with the work. The performance of the work shall be pursuant to the terms of this Agreement. THE PREVENTIVE ROOF MAINTENANCE PROGRAM DESCRIBED IN THIS SCOPE OF WORK, ARE FOR LOCATIONS LISTED BELOW: LOCATIONS: • City Hall, 43200 Business Park Drive, Roof Size approximate 14,774 Sq. Ft. Roof Type: Flat. • Maintenance Facility, 43210 Business Park Drive, Roof Size: approximate 7,980 Sq. Ft. Roof Type: Flat. • Community Recreation Center, 30875 Rancho Vista Road, Roof Size approximate: 15,931 Sq. Ft. Roof Type: Slope & Flat • Temecula Community Center, 28816 Pujol Street, Roof Size: approximate: 7,305 Sq. Ft. Roof Type: Slope & Flat • Mary Phillips Senior Center, 41845 6th Street, Roof Size approximate: 11,898 Sq. Ft. Roof Type: Slope & Flat 10 • Temecula Valley Museum, 28314 Mercedes Street, Roof Size approximate: 5,760 Sq. Ft. Roof Type: Slope & Flat • Chapel of Memories, 28300 Mercedes Street, Roof Size approximate: 2,476 Sq. Ft. Roof Type: Slope • Temecula Children's Museum, 42081 Main Street, Roof Size approximate 7,500 Sq. Ft. Roof Type: Flat • Fire Station 84, 30650 Pauba Road, Roof Size approximate 12,480 Sq. Ft. Roof Type: Slope & Flat • Fire Station 73, 27415 Enterprise Circle West, Roof Size approximate 5,000 Sq. Ft. Roof Type: Flat • Old Town Community Theater 42051 Main Street, Roof Size approximate 20,700 Sq. Ft. Roof Type: Slope & Flat • Temecula Valley Library Pauba Road, Roof Size approximate 34,000 Sq. Ft. Roof Type: Slope & Flat • Field Operation Center, 43200 Business Park Drive, Roof Size approximate 9,000 Sq. Ft. Roof Type Slope & Flat Contractor and the District hereby agree that subject to the terms, conditions and limitations stated herein, Contractor will provide the following services to the District on the District's Roofing System described above (hereinafter" CRS"). The annual price will be held for a five year period. The services being offered by the Contractor include the following: A. LEAK RESPONSE PROGRAM For each leak in the CRS which is covered under this Agreement, the District shall immediately within 24 hours call Contractor and report the roof leak, location, District's site contact representative, leak severity and any other information which may be useful to Contractor in responding to the leak. Contractor will promptly (within 24 hours) deploy a contractor to respond to the leak. If leaks due to sources that are riot covered by this agreement, customer will be billed at the pre -arranged billing rate. Otherwise, Contractor will pay for the leak repairs. If necessary, a follow-up inspection to the CRS leak area will be conduct to examine the repair quality and identify additional roofing concerns. If leaks have been reported, a leak activity report will be provided to the District on a quarterly basis. These reports will provide the following: 1. Number of customer calls into the system. 2. Response time for each call. 3. Overview and/or follow up recommendations. B. INSPECTIONS, HOUSEKEEPING AND PREDICTIVE MAINTENANCE On a semi-annual basis during the term of this Agreement, Contractor shall provide roof inspections, routine preventive maintenance and general housekeeping services on the CRS, on a schedule to be agreed upon by Contractor and the District. Roof inspection services are as follows: 1. Visual inspection of the roof membrane and roof surface conditions. 2. Inspection of the flashing systems including, but riot limited to, the metal edge system, base flashing on equipment and adjoining walls, counterflashing and termination details, soil stacks and vents, and 11 inspection of rooftop projections and equipment including, but not limited t to, pitch pans, HVAC equipment, skylights and access hatches. Roof inspection services do not include: 1. Inspection of water damage or mold growth. 2. Detection or identification of mold. Preventive maintenance services are as follows (NOTE: Preventive maintenance involves work that is meant to keep the roof in its present condition. It does not include extensive repairs or restoration of a deteriorated roof intended to improve its condition to maintainable roof. If such extensive repairs are necessary, you will be made aware of what is needed to be done to bring the individual roof to maintainable condition.) 1. Metal edge flashing components — incidental tears, splits and breaks in the membrane flashings will be repaired with appropriate repair mastics and membranes. 2. Incidental tears and splits in the flashing membrane will be repaired with appropriate repair mastics and membranes. Incidental open or split flashing strip - ins will be repaired with appropriate repair mastics and membranes. Unsecured rooftop equipment will be secured. Exposed fasteners will be sealed. Intermittent voids in termination bar and counterflashings sealant will be resealed. 3. Roof membrane maintenance repairs — incidental tears, breaks and spits in the flashing membrane will be repaired with appropriate repairs mastics and membranes. Incidental splits and blisters that threaten the roof integrity will be cleaned, primed and repaired with appropriate repair mastics and membranes. Intermittent voids in metal projections (hoods and clamps) sealants will be resealed. 4. Preventive maintenance services do riot include: a. Repairs or maintenance of any building component other than the roofing system. b. Remediation or abatement of mold. c. Recoating of roof membranes. General rooftop housekeeping services are as follows: 1. Removal of debris (i.e., leaves, branches, paper and similar items) from the roof membrane (excluding HVAC and other major equipment). 2. Removal of debris from the roof drains, gutters and scuppers. 3. All debris will be disposed of at the District's expense at District's approved on- site location. (Housekeeping and general rooftop preventive maintenance does riot absolve the building District/customer for keeping effluent and debris from the roof surface. Production -related material is excluded as part of the housekeeping. Additionally, it the scheduled cleaning is insufficient to maintain the roof integrity, customer must pay for additional cleaning/inspections or assume responsibility for such cleanings. Customer agrees that all debris on or removed from the roof is the sole property of Customer and it is the sole responsibility of Customer to properly dispose of said debris.) 12 C. ANNUAL ROOF INSPECTION As part of one semi-annual inspection, Contractor will provide an annual roof inspection report. The annual report shall become part of the roof database which will be maintained on the roof system for the life of this agreement. Roof inspection reports will not address the presence of water damage to any building component other than the roofing system or the presence of mold. D. STORM REPORTS Upon notification by the District, Contractor will provide a roof inspection and a corresponding report after a major storm to ensure timely repairs. This inspection may coincide with the semi- annual roof inspection, if the timing is close to this planned inspection. E. DISTRICTS RESPONSIBILITIES It is agreed by the parties that Contractor by this Agreement does not assume possession or control of any part of the CRS. Control and ownership of the CRS and all parts of the Building remains solely with the District. The District is solely responsible for all requirements imposed by any federal, state or local law, ordinance or regulation, and all repair, maintenance and other work with respect to the CRS and the Building, except as expressly stated by this Agreement. The District shall at all times exercise reasonable care in the use and maintenance of the CRS. Immediate repair of leaks is critical to prevent water damage and mold growth. Some authorities believe that mold will start to grow on building components with 24 hours of significant flooding or leakage. If the District does riot immediately report leaks in accordance with the leak response program offered herein. In no event is Contractor responsible for any repairs to any part of the Building other than the CRS. The liability or expense for such repair is to be assumed and paid by the District. If the leak is not within the Service Agreement coverage, Contractor shall advise the District, and the District shall have repairs performed within thirty (30) days according to Contractor specifications. The District agrees to provide Contractor with unrestricted ready access to the CRS and all areas of the Building on which the CRS is located. F. SERVICE AGREEMENT EXCLUSIONS This Service Agreement does not cover any leaks or damage or failure of the CRS or any part thereof as result of: 1. Natural or accidental disaster, including but not limited to, damage caused by lighting, hailstorms, floods, gale force winds (32 mph or greater), tornadoes, earthquakes, fire, vandalism, animals, penetration of the membrane or chemical attach by outside agents. 2. Any intentional or negligent act on the part of the District or third party including, but not limited to, misuse, traffic or storage of materials on the roof. Any repair of these items will be at District's expense. 3. Distortion, expansion or contraction of the CRS caused by faulty original construction or design of building components, including parapet walls, copings, chimneys, skylights, vents or roof deck. 13 Additionally, this agreement excludes recoating or resurfacing of the flood coat and reflective coating of the CRS. G. SERVICE AGREEMENT LIMITATIONS Contractor shall have no responsibility and or liability under this Service Agreement until the Service Agreement price has been paid in full. The District's rights under this Service Agreement are specific to the District and are not transferable. Contractor obligation under this Agreement may be voided by Contractor based on events described in Section F, change in usage of the Building without the prior written approval of Contractor, repairs, alterations, penetrations of the attachments to the CRS without the prior written approval of Contractor, building settlement, deterioration, cracking or failure of the roof deck, coping and parapet walls, infiltration or condensation of moisture in, through or around walls, copings, underlying structure, hardware or equipment, or failure of the District to comply with its obligations described in this Agreement. H. OTHER TERMS Contractor will be excused from performing under this Agreement if prevented or delayed by events not within its control, including events such as floods, fires, accidents, riots, explosions, governmental order, acts of or omissions of contract CRS or other third parties, inability to access the CRS, etc. The District agrees that this Agreement, and the services and remedies set forth herein, are exclusive, and there are no other agreements between the District and Contractor or any affiliate. DISTRICT MAY REQUEST CONTRACTOR TO MAKE REPAIRS WHICH ARE BEYOND THE SCOPE OF PREVENTIVE MAINTENANCE SERVICES OUTLINED ABOVE OR TO MAKE REPAIRS TO ROOFS ON FACILITIES NOT LISTED HERE. THESE ADDITIONAL MAINTENANCE REPAIRS, WILL BE BASED ON CURRENT TIME AND MATERIAL COSTS, AS STATED IN ATTACHMENT "B", TITLED "EXHIBIT B PAYMENT RATES AND SCHEDULE". 111111 14 EXHIBIT "B" PAYMENT RATES AND SCHEDULE PREVENTIVE ROOF MAINTENANCE PROGRAM LOCATIONS PRICE PER 2012 PRICE PER 2013 PRICE PER 2014 PRICE PER 2015 PRICE PER 2016 CITY HALL, 43200 Business Park Drive $2,250.00 2,250.00 2,250.00 2,250.00 2,250.00 TEMECULA VALLEY MUSEUM, 28314 Mercedes Street $900.00 $900.00 $900.00 $900.00 $900.00 MARY PHILLIPS SENIOR CENTER, 41845 6th Street $950.00 $950.00 $950.00 $950.00 $950.00 CHAPEL OF MEMORIES, 28300 Mercedes Street $600.00 $600.00 $600.00 $600.00 $600.00 TEMECULA COMMUNITY CENTER, 28816 Pujoi Street $880.00 $880.00 $880.00 $880.00 $880.00 TEMECULA CHILDREN'S MUSEUM, 42081 Main Street $1,900.00 $1,900.00 $1,900.00 $1,900.00 $1,900.00 C.R.C. 30875 Rancho Vista Road $2,200.00 $2,200.00 $2,200.00 $2,200.00 $2,200.00 FIRE STATION 84, 30650 Pauba Road $1,500.00 $1,500.00 $1,500.00 $1,500.00 $1,500.00 FIRE STATION 92 32211 Wolf Valley Rd. $1,500.00 $1,500.00 $1,500.00 $1,500.00 $1,500.00 MAINTENANCE FACILITY 43210 Business Park Drive $870.00 $870.00 $870.00 $870.00 $870.00 FIRE STATION 73, 27415 Enterprise Circle West $1,850.00 $1,850.00 $1,850.00 $1,850.00 $1,850.00 **O. T. COMMUNITY THEATER, 42051 Main Street $6,500.00 $6,500.00 $6,500.00 $6,500.00 $6,500.00 15 EXHIBIT "B" (Continue) **TEMECULA PUBLIC $2,980.00 $2,980.00 $2,980.00 $2,980.00 $2,980.00 LIBRARY, Pauba Road ** FIELD OPERATION $1,800.00 $1,800.00 $1,800.00 $1,800.00 $1,800.00 CENTER 43200 Business Park Dr **CIVIC CENTER 41000 $7,800.00 $7,800.00 $7,800.00 $7,800.00 $7,800.00 Main Street **COUNCIL $1030.00 $1030.00 $1030.00 $1030.00 $1030.00 CHAMBERS 41000 Main Street **CONFERENCE CENTER 41000 Main $880.00 $880.00 $880.00 $880.00 $880.00 Street **OLD TOWN PARKING GARAGE 41000 Main $1,350.00 $1,350.00 $1,350.00 $1,350.00 $1,350.00 Street ** SUPPLEMENTAL SERVICES 16 EXHIBIT "B" (Continue) ALTERNATE BID ITEMS -For repair or extra work authorized by District MARK-UP ADDED TO CONTRACTOR'S WHOLESALE PRICE OF PARTS & EQUIPMENT % 20 HOURLY RATE PER REGULAR MAN HOUR-8am To 5pm Monday through Friday $88.00* HOURLY RATE PER OVERTIME MAN HOUR -After-hours, Weekends, Holidays, etc. $88.00* *4 — hour minimum. 17 Signature of Authorized Representative Name and Title Item No. 17 ORDINANCE NO. 12-05 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF TEMECULA AMENDING CHAPTER 8.28 OF THE TEMECULA MUNICIPAL CODE RELATING TO STORM WATER AND URBAN RUNOFF MANAGEMENT AND DISCHARGE CONTROL, AND AUTHORIZING THE DIRECTOR OF PUBLIC WORKS/CITY ENGINEER TO PREPARE A MANUAL SETTING FORTH THE ADMINISTRATIVE RULES, PROCEDURES, AND REQUIREMENTS NECESSARY TO IMPLEMENT THIS ORDINANCE THE CITY COUNCIL OF THE CITY OF TEMECULA DOES HEREBY ORDAIN AS FOLLOWS: Section 1. Findings. The City Council of the City of Temecula does hereby find, determine and declare that: A. The federal Clean Water Act (33 U.S.C. § 1251, ) and California's Porter - Cologne Water Quality Control Act provide for the regulation and reduction of pollutants discharged into Federal and State waters, respectively, by extending National Pollutant Discharge Elimination System ("NPDES") requirements to storm water and non -storm water urban runoff discharged into and from municipal storm drain systems. B. The City of Temecula (the "City") is a co -permittee under the current version of the NPDES Municipal Separate Storm Sewer System ("MS4") permit ("MS4 permit") regulating waste discharges into and from those portions of the storm drain system in Riverside County that are located within the jurisdiction of the San Diego Regional Water Quality Control Board (Regional Board). As a co -permittee under the MS4 Permit, the City is required to adopt water quality ordinances and implement procedures with respect to discharges into the municipal separate storm sewer system. C. The City has previously adopted ordinances to ensure that it possesses the legal authority necessary to control discharges to and from those portions of the Storm Drain System over which it has jurisdiction, in order to comply with the MS4 Permit, and to specifically prohibit certain discharges identified in the MS4 Permit. D. This Ordinance is also intended to further confirm the City's legal authority to control discharges of Pollutants, as that term is defined under Article VIII, "Definition of Terms," to and from those portions of the Storm Drain System over which the City has jurisdiction, as required by the MS4 Permit, and thereby fully and timely comply with the terms of the MS4 Permit. R:/Ords 2012/Ords 12- 1 E. In order to control in a cost-effective manner, the quantity and quality of storm water and non -storm water urban runoff to the maximum extent practicable, the adoption of reasonable regulations, as set forth herein, is essential. F. This Ordinance is being amended in order to comply with the current version of the federal requirements for the control of pollutants to storm water and non - storm water urban runoff (urban runoff), which enters the Storm Drain System throughout the portions of Riverside County covered by the MS4 Permit. G. The City is authorized by Article XI, §5 and §7 of the State Constitution to exercise the police power of the State by adopting regulations promoting the public health, public safety and general prosperity. H. The City has determined that a legitimate local purpose is present in complying with the provisions of the MS4 Permit. I. The land use authority exercised by the City pursuant to California Government Code §65300 et seq., requires regional planning and the adoption of policies protecting the environment through the imposition of reasonable conditions on the use of land. J. This Ordinance conforms to the policies and goals of the General Plan adopted by the City, pursuant to California Planning and Zoning Law, for the protection of the portions of watersheds located within Riverside County by implementing measures to control erosion, prevent sediment releases, and prohibit the pollution of streams and other waters; K. The Subdivision Map Act, California Government Code §66411, authorizes the City to regulate and control the design and improvement of subdivided lands and mitigate the burdens of proposed development by imposing reasonable conditions on map approval; L. The California Constitution Article XI, §7 and Government Code §38660 authorize the City to establish appropriate conditions for the issuance of building permits, which require the installation of improvements reasonably related to the proposed use of property; M. Government Code §38771 authorizes the City to declare as public nuisances undesirable acts which may injure health or cause interference with the comfortable enjoyment of life or property and to provide for the abatement of the same; N. All dischargers subject to the provisions of the State Industrial General Permit and the State Construction General Permit (referred to collectively herein as the "State General Permits") must comply with the lawful requirements of these State General Permits and of the City's MS4 Permit which regulate discharges to the storm drain system within its jurisdiction; R:/Ords 2012/Ords 12-05 2 0. All dischargers subject to the provisions of the State General Permits are required to maintain Stormwater Pollution Prevention Plans (SWPPPs) on-site and make them available to the City for inspection; P. All dischargers subject to the provisions of the State General Permits may be required by the City, with the concurrence of the San Diego Regional Water Quality Control Board, or State Water Resources Control Board, or to amend any Storm Water Pollution Prevention Plan; Q. All dischargers subject to the provisions of the State General Permits are required to implement monitoring programs on-site and make all information and records associated with these programs available to the City for inspection; R. The City has jurisdiction over certain storm water conveyance facilities within the City, and these facilities may receive discharges from properties and activities regulated under the provisions of the State General Permits or the City's MS4 Permit, and the City may request that the regulated dischargers furnish information and records necessary to determine compliance with these permits; S. The City has jurisdiction over certain stormwater conveyance facilities within the City, and these facilities may receive discharges from properties and activities regulated under the provisions of the State General Permits or the City's MS4 Permit, and the City may, upon presentation of credentials and other documents required by law: (i) enter upon the discharger's premises where a regulated facility is located or where records must be kept under the conditions of these permits; (ii) access and copy, at all reasonable times, any records that are required to be kept under the conditions of these permits; (iii) inspect, at all reasonable times, any facility or equipment related to or impacting stormwater or urban runoff discharge; and (iv) sample or monitor for the purpose of ensuring compliance with these permits. Section 2. Chapter 8.28 of the Temecula Municipal Code,is hereby amended to read as follows: "CHAPTER 8.28 STORM WATER AND URBAN RUNOFF MANAGEMENT AND DISCHARGE CONTROLS Article I. General Provisions Sections: 8.28.100 Title. 8.28.110 Purpose and Intent. 8.28.120 Storm Water and Urban Runoff Manual. 8.28.130 Regulatory Consistency. 8.28.140 Compliance Disclaimer. R:/Ords 2012/Ords 12-05 3 8.28.150 8.28.160 8.28.100 Title. City Cooperation. Contracting for Services. This Ordinance shall be known as the "City of Temecula Storm Water and Urban Runoff Management and Discharge Control Ordinance (Water Quality Ordinance)." 8.28.110 Purpose and Intent. The purpose and intent of this Ordinance is to protect the water quality of City watercourses, water bodies, ground water, and wetlands in a manner pursuant to and consistent with the Federal Clean Water Act (33 USC Sec. 1342) and California Porter - Cologne Act, in order to ensure the future health, safety, and general welfare of the citizens of this City by: A. Establishing requirements to prevent urban runoff into and from the storm drain system. (Ord. 99-10 § 1 (part)); B. Establishing requirements to reduce pollutants in storm water to the maximum extent practicable; C. Establishing requirements for development projects for permanent water quality control measures; D. Establishing requirements to reduce pollutant discharges from construction sites, existing commercial and, industrial businesses and activities, and existing residential neighborhoods; and E. Establishing requirements to prevent illicit connections and illegal discharges into and from the storm drain system. 8.28.120 Storm Water and Urban Runoff Manual. The City Engineer shall formulate a manual setting forth administrative rules, procedures, and requirements necessary to implement the provisions of this Ordinance. Such rules, procedures, and requirements shall be entitled "The City of Temecula Administrative and Technical Procedures Manual for Stormwater and Urban Runoff Management and Discharge Control (Stormwater and Urban Runoff Manual). The City Engineer shall have the authority to change, update or revise the Manual as necessary in order to implement the provisions of this Ordinance and all revisions thereto arising from time to time. In the event of any conflict between the Manual and this Ordinance, the more restrictive provisions shall govern. The provisions of the Manual, to the extent they are made conditions of a permit issued by the City, shall be binding. All revisions to the manual R:/Ords 2012/Ords 12-05 4 shall be reviewed and approved by the City Engineer and take effect immediately upon approval. 8.28.130 Regulatory Consistency. This Ordinance shall be construed to assure consistency with the requirements of the Federal Clean Water Act and California's Porter -Cologne Water Quality Control Act, and any amendments thereof, and all applicable implementing regulations, and any existing or future NPDES Permits, and any amendments or revisions thereto or re -issuance thereof. 8.28.140 Compliance Disclaimer. Full compliance by any Person or entity with the provisions of this Ordinance shall not preclude the need to comply with other local, state or federal statutory or regulatory requirements, which may be required for the control of the discharge of pollutants into stormwater or urban runoff, and/or the protection of stormwater and urban runoff quality. 8.28.150 City Cooperation. The City intends to cooperate with other copermittees and agencies with jurisdiction over storm water and urban runoff discharges to control the contribution of pollutants throughout the shared portions of the copermittees' storm drain system and to ensure that the regulatory purposes underlying storm water and urban runoff regulations promulgated pursuant to the Federal Clean Water Act (33 USC §1251 et seq.) and California's Porter -Cologne Water Quality Control Act are met. 8.28.160 Contracting for Services. The City may, to the extent authorized by law, elect to contract for the services of any public agency or private enterprise to carry out the planning approvals, inspections, permits and enforcement authorized by this Ordinance. Sections: 8.28.200 8.28.210 8.28.220 8.28.230 8.28.240 Article II. Prohibited and Exempted Discharges, Illicit Connections, and Liabilities Prohibited Discharges. Exempted Discharges. Prohibition on Illicit Connections. Liability for Prohibited Discharges. Liability for Illicit Connections. R:/Ords 2012/Ords 12-05 5 8.28.200 Prohibited Discharges. A. The following discharges are prohibited: 1. Discharges into and from MS4s in a manner causing, or threatening to cause, a condition of pollution, contamination, or nuisance (as defined in CWC section 13050), in receiving waters within the City; 2. Discharges into and from MS4s that may cause or contribute to exceedances of water quality objectives, violations to designated beneficial uses or State policy with respect to maintaining high quality waters, or to the degradation of water quality such that a condition of pollution or contamination is created or aggravated. 3. Discharges into and from MS4s containing pollutants which have not been reduced to the Maximum Extent Practicable (MEP). 3. Discharges listed in the Regional Board's Water Quality Control Plan for the San Diego Basin (Basin Plan). 4. Urban runoff into and from MS4s, unless exempted under section 8.28.210, Exempted Discharges, of this ordinance, or authorized by a separate NPDES permit issued by the Regional Board, State Water Resources Control Board (State Board), or Environmental Protection Agency (EPA). 5. Sewage; 6. Wash water from hosing or cleaning gas stations, vehicle maintenance facilities, or other related services; 7 Wash water from hosing, cleaning, repairing, or maintaining motorized equipment or machinery, 8. Runoff containing pollutants associated with construction sites, activities, materials, or waste; 9. Runoff containing pollutants associated with industrial sites, activities, materials, or waste; 10. Runoff from mobile operations such as automotive detailing, window washing, carpet and drape cleaning, pet services, power washing, etc.; 11. Runoff from hosing or cleaning parking lots, streets, alleys, gutters, sidewalks, driveways, patios, plazas, work yards, and outdoor eating or drinking areas and their associated trash enclosures, etc.; R:/Ords 2012/Ords 12-05 6 12. Runoff from material storage areas containing toxic or hazardous chemicals, fuels, grease, oil, and other related substances; 13. Swimming pool and other non -potable water containing chlorine, biocides, chemicals, filter or acid backwash, or other pollutants; 14. Sediment, pet waste, and trash; 15. Runoff containing pollutants associated with landscape activities, materials, or waste; 16. Runoff containing pollutants associated with food -related establishments, activities, materials, or wastes; 17. Runoff caused by irrigation water. 8.28.210 Exempted Discharges. A. The following discharges are exempt from discharge prohibitions established by this Ordinance: 1. Diverted stream flows; 2. Rising ground water; 3. Uncontaminated ground water infiltration; 4. Uncontaminated pumped ground water; 5. Foundation drains; 6. Springs; 7. Water from crawl space pumps; 8. Footing drains; 9. Air conditioning condensation; 10. Flows from riparian habitats and wetlands; 11. Water line flushing other than fire sprinkler system maintenance and testing (Discharges from fire sprinkler maintenance and testing require a separate NPDES permit); 12. Discharges from potable water sources other than water main breaks; R:/Ords 2012/Ords 12-05 7 13. Individual residential car washing, unless the City, San Diego Regional Water Quality Control Board, State Water Resources Control Board, or EPA identifies the discharge as a source of pollutants to water courses; 14. Emergency firefighting flows due to firefighting activities; and 15. Swimming pool water, provided such discharges are de -chlorinated and do not contain biocides, chemicals, filter or acid backwash, or other pollutants. 8.28.220 Prohibition on Illicit Connections. A. No person shall: 1. Cause, permit, allow, or facilitate any agent, employee, or independent contractor, to establish, construct, maintain, operate or utilize any illicit connection; 2. Cause, permit, allow, or facilitate any prohibited discharge listed in Section 8.28.200 (Prohibited Discharges) into or from any illicit connection; 3. Cause, permit, allow or facilitate any discharge that would result in or contribute to a violation of the City's MS4 permit, any State General Permit, or any other NPDES permit issued by the Regional Board, the State Board, , or EPA, either separately or in combination with other discharges, into or from any illicit connection. B. The prohibition against illicit connections shall apply, regardless of whether the connection was established prior to the date on which this Ordinance was enacted. C. A civil or administrative violation of this Ordinance shall occur, regardless of a person's negligence or their intent to construct, maintain, operate or utilize an illicit connection or to cause, permit, allow, or facilitate any prohibited discharge. 8.28.230 Liability for Prohibited Discharges. A. NPDES MS4 Permit. Any discharge that results in or contributes to a violation of the City's most current version of its NPDES MS4 permit or any amendment or revision thereto or re -issuance thereof either separately considered or when combined with other discharges, is a violation of this Ordinance and is prohibited. Liability for any such discharge shall be the responsibility of the person(s) causing or responsible for the discharge, and such person(s) shall immediately eliminate the discharge and defend, indemnify and hold harmless the City in any administrative or judicial enforcement action relating to such discharge. R:/Ords 2012/Ords 12-05 8 B. NPDES Permits for Commercial, Industrial, Construction and Dewatering Activities. Any person associated with commercial, industrial, construction, dewatering or other activities and discharges subject to the City's current NPDES MS4 permit or any other NPDES Permit issued by the San Diego Regional Water Quality Control Board (Regional Board), State Water Resources Control Board (State Board), or Environmental Protection Agency (EPA) shall comply with all requirements of such permits. Proof of compliance with said NPDES general permits may be required by the City Engineer prior to issuance of any city grading, building, or occupancy permits. (Ord. 99-10 § 1 (part)). 8.28.240 Liability for Illicit Connections. Liability for any illicit connection shall be the responsibility of the person(s) causing or responsible for the connection, and such person(s) shall immediately eliminate the illicit connection and defend, indemnify and hold harmless the City in any administrative or judicial action relating to such connection. Article III. Legal Authority and Enforcement Sections: 8.28.300 Responsibility for Administration. 8.28.310 Violations and Penalties. 8.28.320 Enforcement. 8.28.300 Responsibility for Administration This Ordinance shall be administered for the City of Temecula by the City Engineer or his or her representative. 8.28.310 Violations and Penalties. A. It shall be unlawful for any person to conduct any work or business, or cause the same to be done, contrary to or in violation of any of the provisions of this Ordinance and State or Federal laws. B. The issuance of a grading or building permit, performance of permit inspections, or issuance of a certificate of occupancy may be withheld, revoked or suspended on property on which a violation of the provisions of this Ordinance exist, including work not performed in accordance with the approved plans, until such violation(s) has been corrected to the satisfaction of the City Engineer. C. For existing industrial and commercial business facilities or activities, including mobile operations, violations of this Ordinance may be grounds for the R:/Ords 2012/Ords 12-05 9 suspension or revocation of a City business license in accordance with Chapter 5.04, Business Licenses and Regulations, of the Temecula Municipal Code. 8.28.320 Enforcement. Violation of the provisions of this Ordinance shall be prosecuted pursuant to the provisions of Chapters 1.20 (General Penalty) and 1.21 (Administration Penalties — Citations) of the Temecula Municipal Code and may be abated as public nuisances pursuant to Chapter 8.12 of the Temecula Municipal Code. Article IV. Permits Sections: 8.28.400 Permit Requirements for Construction, Commercial, and Industrial Activities. 8.28.410 Penalties. 8.28.420 Compliance with Laws. 8.28.400 Permit Requirements for Construction and Industrial/Commercial Activities. A. State -issued Permits. Any person causing, permitting, allowing, or facilitating a prohibited discharge must: (1) Immediately discontinue the discharge, or (2) Be enrolled under an NPDES permit, issued by the Regional Board, State Board, or EPA, that specifically allows such discharge to occur, or (3) Comply with the obligations required by the city's NPDES MS4 permit and this ordinance and provide proof of compliance, including identification and implementation of specific pollution prevention measures, also known as Best Management Practices (BMPs), and their effectiveness at reducing or eliminating such discharges in a form acceptable to the City Engineer, or his/her designated representative, prior to the issuance of any grading, building or occupancy permits, or any other type of permit or license issued by the City. B. City -issued Permits. An application for any of the following permits or approvals shall demonstrate how the requirements of this Ordinance will be met. The permit or approval shall not be approved unless the City Engineer determines that the application complies with the requirements of this Ordinance: 1. Commercial Development Plan 2. Residential Development Plan 3. Industrial Development Plan R:/Ords 2012/Ords 12-05 10 4. Grading Plan 5. Building Permit 6. Improvement Plan 7. Conditional Use Permit 8. Tentative Map Modifications 9. Map Modifications C. Permit Suspensions or Revocations. The City Engineer may suspend or revoke any permit issued by the City when it is determined that: 1. The permittee has violated any term, condition, or requirement of the permit, or any applicable provision of this Ordinance; 2. The circumstances have changed so that it is no longer appropriate to exempt the Discharge. 3. The permittee fails to comply with any schedule for compliance issued pursuant to this Ordinance; or 4. Any regulatory agency, including the EPA, the State Board or Regional Board having jurisdiction over the discharge, notifies the City that the discharge should be terminated. D. Permit Modifications. The City Engineer may modify any permit when it is determined that: 1. Federal or state law requirements have changed in a manner that necessitates a change in the permit; or 2. The permittee's discharge or the circumstances under which the discharge occurs have changed; or 3. A change to the permit is necessary to ensure compliance with the latest version of the City's NPDES MS4 permit and objectives of this Ordinance, or to protect the quality of receiving waters. E. Appeals. The determination that a permit shall be denied, suspended, revoked or modified may be appealed pursuant to the procedures identified in Article III (Legal Authority and Enforcement) of this Ordinance. The permittee may request a temporary variance to continue to discharge pending issuance of a final decision through the appeal process. R:/Ords 2012/Ords 12-05 11 F. Notifications. The permittee shall be informed of any change in the permit terms and conditions at least forty-five (45) business days prior to the effective date of the modified permit. 8.28.410 Penalties. Any violation of the terms, conditions and requirements relating to the control of discharges to the storm drain system of any permit issued by the City shall constitute a violation of this Ordinance and subject the violator to the administrative, civil and criminal remedies available under this Ordinance. 8.28.420 Compliance with Laws. Compliance with the terms, conditions and requirements of a permit issued by the City shall not relieve the permittee from compliance with all federal, state and local laws, regulations and permit requirements, applicable to the activity for which the permit is issued. Sections: 8.28.500 8.28.510 8.28.520 Article V. Control of Urban Runoff New Developments, Modifications to Existing Developments, and One -acre Threshold Projects. Expiration of plans. Existing development. 8.28.500 New Developments, Modifications to Existing Developments, and One -acre Threshold Projects. A. General Requirements. New development, modifications to existing developments, and one -acre threshold projects shall be designed to control pollutants in storm water and urban runoff so as to prevent exceedances of water quality objectives, violations to designated beneficial uses or State policy with respect to maintaining high quality waters, or degradation of water quality such that a condition of pollution or contamination is created or aggravated. The City Engineer shall approve the BMPs that may be implemented to prevent such deterioration and shall approve the manner of implementation. New development, modifications to existing development, and one -acre threshold projects shall comply with the following: B Construction Runoff Compliance. All individual grading and building projects with active grading or building permits shall implement erosion and sediment measures, including all other necessary pollution prevention controls, throughout R:/Ords 2012/Ords 12-05 12 the project, year-round. If the project meets or exceeds one acre of land disturbance, the project must also enroll under, and adhere to all of the requirements of, the latest version of the State Construction General permit (CGP) to ensure that all pollutants throughout and from the site will be either eliminated or reduced to the maximum extent practicable, and will not cause or contribute to an exceedance of water quality objectives as described in the San Diego Regional Water Quality Control Board Basin Plan. All grading and building activities will be in compliance with the Grading, Erosion and Sediment Control Ordinance; the Grading Manual; other applicable ordinances; Federal, State, and local permits; and other applicable requirements. C. Standard Storm Water Mitigation Plan (SSMP) / Water Quality Management Plan (WQMP) Required. New development, modifications to existing development, and one -acre threshold projects shall comply with the following: 1. A Standard Storm Water Mitigation Plan (SSMP), also known as the Water Quality Management Plan (WQMP), shall be required for: a. All new development projects that create 5,000 square feet of impervious surface; b. Modifications to existing developments (redevelopments) that create, add, or replace 5,000 square feet of impervious surface; c. New and redevelopment projects that create, add, or replace 2,500 square feet of impervious surface and are located adjacent to, and discharging into, a natural drainage channel or other Environmentally Sensitive Area; d. Projects that disturb one -acre of land (one -acre threshold projects), regardless of impervious surface coverage; e. All other categories listed in the latest version of the City's NP DES MS4 Permit. 2. Projects not requiring a SSMPIWQMP will be required to implement equivalent BMPs designated by the City according to conditions and requirements established by the City Engineer. 3. A SSMP/WQMP shall be required if the City Engineer determines that the development may result in the discharge of significant levels of a Pollutant into any tributary to any storm drain system. R:/Ords 2012/Ords 12-05 13 D. Contents of a SSMPNVQMP. 1. The BMPs identified in the SSMPNVQMP shall address Low Impact Development (LID), hydromodification, source controls and treatment controls by implementing the following practices that include, but are not limited to: a. Controlling pollutants and runoff velocities, volumes, durations, and peak flows from the post -development conditions to pre - development conditions; b. Conserving natural areas where feasible; c. Constructing streets, sidewalks, or parking lot aisles to the minimum widths allowable, provided public safety is not compromised; d. Minimizing the impervious footprint of the project; e. Minimizing soil compaction to landscaped areas; f. Minimizing disturbances to natural drainages; g. Disconnecting impervious areas with pervious areas; h. Identifying pollutants for which water bodies receiving the development's runoff are listed as impaired under the latest version of the CWA section 303(d) list and all identifying pollutants associated with the land use of the development. i. Correctly designing BMP's to effectively remove or treat the pollutants associated with the project and its' nearest receiving water; j. Creating buffer zones between the project and adjacent water bodies; k. Preventing downstream erosion; I. Including storm drain stenciling and signage; m. Including properly designed outdoor material storage areas; n. Including properly designed trash storage areas; R:/Ords 2012/Ords 12-05 14 o. Including proof of a mechanism to ensure ongoing long-term BMP maintenance of all structural treatment BMPs and subsequent transfers of ownership. P. q. Increasing permeable areas; Implementing BMPs close to pollutant sources and prior to discharging into receiving waters; r. Ensuring that post -development runoff does not contain pollutants which cause or contribute to an exceedance of water quality objectives, as outlined in the SDRWQCB Basin Plan, and has been reduced to the MEP; s. Not constructing BMPs in receiving waters; and t. Not using a receiving water as a BMP 2. During the planning application submittal process for any new development, modifications to existing development, or land disturbance activities meeting the one -acre threshold, the permittee shall submit a SSMPNVQMP. The applicant shall obtain the City Engineer's acceptance of a SSMP/WQMP prior to the issuance of a permit land use approval or, at the City's discretion, prior to recordation of a map. The Public Works Department shall review all SSMPNVQMPs and impose terms, conditions and requirements on the project in accordance with the latest version of the City's NPDES MS4 permit and this Ordinance prior to the City's issuance of a permit, approval, or map. 3. New development and modifications to existing development shall implement and adhere to the terms, conditions and requirements of the approved SSMPNVQMP. 4. The City Engineer may require that the SSMPNVQMP, or components within the SSMPNVQMP, be recorded with the County Recorder's office. The signature of the property owner, or successor in interest, shall be sufficient for the recording of the plan or any revised plan. A signature on behalf of the City shall not be required for recordation. E. Continuation of Terms, Conditions and Requirements for New Developments, Modifications to Existing Developments, and One -Acre Threshold Projects. All terms, conditions and requirements which the Planning and Public Works Departments have initially imposed pursuant to this Section for either a new development, modifications to an existing development, or a land disturbance activity meeting the one -acre threshold shall remain in effect upon the transfer of the property. Any owner of the property, or their successors, or assigns, shall be R:/Ords 2012/Ords 12-05 15 in violation of this Ordinance if they fail to implement and/or adhere to the terms, conditions and requirements imposed pursuant to this Section. 8.28.510 Expiration of Plans. A. Approved plans for which no inspections have occurred shall expire 180 days following the date of submittal and may be returned to the applicant or may be destroyed by the City Engineer without additional notice to the applicant. B. The City Engineer may extend the time for action by the applicant for a period not exceeding 180 days upon written request by the applicant showing that circumstances beyond the reasonable control of the applicant have prevented action from being taken. C. In order to renew action after the plans have expired pursuant to the Ordinance, the applicant shall resubmit the plans and pay the most current plan review fee. 8.28.520 Existing Development. A. General Requirements. Existing development shall prevent pollutants from discharging into any private or public storm drain system, and shall control storm water and urban runoff so as to prevent exceedances of water quality objectives, violations to designated beneficial uses or State policy with respect to maintaining high quality waters, or degradation of water quality such that a condition of pollution or contamination is created or aggravated. The City Engineer shall identify the BMPs that shall be implemented to prevent such deterioration and shall identify the manner of implementation. B. Industrial and Commercial Business Facilities and Activities. Each person in charge of day to day operations of an industrial or commercial business facility or activity in the City shall implement minimum BMPs as may be designated by the City Engineer. For those facilities that are tributary to impaired water bodies, or are directly adjacent to, or discharging directly into, receiving waters, BMPs shall include additional BMPs as the City Engineer may require. C. Common Interest Areas, Homeowners' Associations, and Property Management Organizations. Each person who owns, operates, or is in charge of day to day activities of common interest areas on Private Property in the city shall ensure that runoff from within common interest areas, including private roads, drainage facilities, and other components of the storm drain system, meets the objectives of the latest version of the City's NPDES MS4 permit and this Ordinance. D. Litter Control. 1. No person shall dump, dispose, or stockpile any waste material, including but not limited to common household rubbish or garbage of any kind R:/Ords 2012/Ords 12-05 16 (whether generated or accumulated at a residence, business or other location), upon any public or private property, whether occupied, open or vacant, including but not limited to, any street, sidewalk, alley, right-of- way, open area or point of entry to the storm drain system, except in trash containers, or at a lawfully established waste disposal facility. 2. Any person who owns or occupies a property on which a prohibited disposal of waste materials occurs shall ensure that all such waste materials are properly collected and disposed of within a reasonable period of time. 3. Any person who either owns or occupies property and who fails to comply with the requirements of this Ordinance may be charged with creating a nuisance upon the property. Article VI. Regulatory Inspections Sections: 8.28.600 Right to Inspect. 8.28.610 Records Review. 8.28.620 Authority to Sample and Test. 8.28.630 Monitoring. 8.28.640 Test Results. 8.28.600 Right to Inspect. A. Normal Conditions. For routine inspections, the City Engineer may inspect active and inactive construction sites, existing industrial and commercial business facilities and activities, completed developments, and vacant or abandoned properties that were required to install BMPs, subject to this Ordinance at reasonable times and in a reasonable manner to carry out the purposes of this Ordinance. If entry for a regulatory inspection is refused by an owner, operator, occupant, or representative of any construction site, business facility or activity, completed development, or vacant or abandoned property that installed BMPs, an inspection warrant shall be obtained prior to inspection. 1. When any new BMP is installed on private property as part of a project that requires a City permit or business license, in order to comply with this Ordinance, the property owner, occupant, operator, or representative shall provide the City access for inspection of BMPs to ensure that each BMP is working properly. This includes the right to enter the property without prior notice, as needed, when the City has a reasonable basis to believe that the BMP is not working properly, or to enter for any follow-up inspections, R:/Ords 2012/Ords 12-05 17 or to enter when necessary for abatement of a nuisance or correction of a violation of this Ordinance. 2. Inspections may include all actions necessary to: a. Determine whether any illegal discharges or illegal connections exist; b. Determine whether the BMPs installed and implemented continue to ensure compliance with this ordinance; c. Determine whether the BMPs are being properly maintained; d. Determine whether the facility or activity complies with the requirements of this Ordinance; e. Identify products produced, processes conducted, chemicals used and materials and waste stored on or contained within the property that could constitute a threat to water quality if a discharge occurs; f. Identify point(s) of discharge of all wastewater and processed water; h. Identify point(s) of discharge of all surface runoff and runoff through a storm drain system; i. Locate any source(s) of any Prohibited Discharge; Evaluate compliance with any permit issued by the City relating to a discharge to the Storm Drain System; or k. Investigate any complaints forwarded to the City by third parties related to discharges. This may include, but may not be limited to sampling, metering, visual inspections, and records review. B Emergency Conditions. If the City Engineer has reasonable cause to believe that polluted storm water runoff or non-stormwater runoff is actively discharging from the property onto any public street, inlet, gutter, or any other storm drain system, the City Engineer shall have the right to immediately enter and inspect said property regardless of whether said property is occupied or unoccupied, and regardless of whether formal permission to inspect said property has been obtained. R:/Ords 2012/Ords 12-05 18 8.28.610 Records Review. The City Engineer may inspect the property owner's, occupant's, operator's, or representative's records relating to processes presently or previously occurring on-site, material and/or chemical inventories, facility maps or schematics and diagrams, Material Safety Data Sheets, hazardous waste manifests, business plans, pollution prevention plans, State General Permits, Stormwater Pollution Prevention Plans, Monitoring Program Plans, any records relating to Illicit Connections, Prohibited Discharges, or any other source of contribution or potential contribution of Pollutants to the Storm Drain System. Records, reports, analyses, or other information required under this Ordinance may be inspected and copied, and photographs taken to document a condition and/or a violation of this Ordinance. 8.28.620 Authority to Sample and Test. The City Engineer may inspect, sample and test any surface runoff into and from any onsite storm drain system or BMP, soils area (including groundwater testing), process discharge, materials within any raw -product or waste storage areas (including any container contents), and/or discharge from any wastewater treatment system for the purpose of determining the potential for contribution of pollutants to the storm drain system. The City Engineer may investigate the integrity of all storm drain and sanitary sewer systems, or other pipelines on the property using appropriate tests, including but not limited to smoke and dye tests or video surveys. The City Engineer shall be authorized to document conditions on the property by any reasonable means. It shall be a violation of this Ordinance for anyone other than the City Engineer to tamper, dismantle or otherwise intentionally disable, modify or in any way damage such monitoring devices. 8.28.630 Monitoring. The City Engineer may erect and maintain monitoring devices for the purpose of measuring any discharge or potential source of discharge to the Storm Drain System. 8.28.640 Test Results. Upon submission of a written request by the property owner, occupant, operator, or representative, the City Engineer shall provide copies of all monitoring and test results conducted to the owner or occupant. R:/Ords 2012/Ords 12-05 19 Article VII. Plan Review and Inspection Fees Sections: 8.28.700 SSMPNVQMP Review Fees — New Developments, Modification to Existing Developments, and One -acre Threshold Projects. 8.28.710 Inspection Fees. 8.28.720 Refunds. 8.28.700 SSMPNVQMP Review Fees — New Developments, Modifications to Existing Developments, and One -acre Threshold Projects. When SSMP/WQMPs are required pursuant to the provisions of this Ordinance, the City Engineer shall collect the required plan review fee and/or deposit as required by this Ordinance and by City Council resolution establishing applicable fees and deposits. 8.28.710 Inspection Fees. A. Development Projects. Post -construction BMP inspections are required following the completion of the project and for as long as the site generates pollutants in accordance with the latest version of the City's NPDES MS4 permit, for new developments, modifications to existing developments, and one -acre threshold projects, and pursuant to the provisions of this Ordinance. The City Engineer shall collect the inspection fees as required by this Ordinance and by City Council resolution establishing applicable fees and deposits. B. Existing Commercial and Industrial Businesses. In addition to the City's annual business licensing requirements pursuant to Chapter 5.04, Business Licenses and Regulations, of the City's Municipal Code, existing commercial and industrial businesses, listed in the latest version of the City's NPDES MS4 Permit, or as determined by the City Engineer, shall pay an annual inspection fee to ensure compliance with the City's NPDES Permit, as required by this Ordinance and by City Council resolution establishing applicable fees and deposits. 8.28.720 Refunds. After submittal and commencement of processing by the City, no fee(s) collected pursuant to this division, shall be refunded in whole or in part, except as provided as follows: A. Inspection fees may be refunded, less any City expenses incurred, at any time prior to the start of the work upon the applicant's written request, provided any City permit has expired or has been withdrawn. R:/Ords 2012/Ords 12-05 20 B. No refund shall be made if the applicant or permittee has any outstanding debts owed to the City, or if corrective work remains to be done. C. No refund shall be made pursuant to this section if a request for refund is submitted to the City more than one (1) year from the date of payment of the fee as to which a refund is claimed. Article VIII. Definitions of Terms Sections: 8.28.800 Definitions. Whenever in this Ordinance and the Manual, or in any resolution or standard adopted by the City Council pursuant to this Ordinance, the following terms are used, they shall have the meaning ascribed to them in this section, unless it is apparent that some other meaning is intended: "Authorized Inspector" means the City Engineer and all persons designated by him/her and under his/her instruction and supervision, who are assigned to investigate compliance with, detect violations of, and/or take actions pursuant to this Ordinance. "Best Management Practices" or "BMPs" means, as defined in 40 CFR 122.2, schedules of activities, prohibitions of practices, maintenance procedures, and other management practices to prevent or reduce the pollution of waters of the U.S. BMPs also include treatment requirements, operating procedures and practices to control plant site runoff, spillage or leaks, sludge or waste disposal, or drainage from raw material storage. "City Engineer" means the Director of Public Works/City Engineer of the City of Temecula, or his or her designee. "Compliance Schedule" means the time period allowed by the City for a discharger to achieve compliance with the requirements of this Ordinance. The Compliance Schedule shall contain specific dates by which adequate treatment facilities, devices, or any other related equipment and/or procedures shall be installed or implemented. "Construction Activity" means any activity used in the process of developing, redeveloping, enhancing, or maintaining land, including, but not limited to, land disturbance, building construction, paving and surfacing, storage or disposal of construction related materials. "Construction Site" means any project requiring a local grading or building permit, including projects requiring coverage under the Construction General Permit (CGP) that R:/Ords 2012/Ords 12-05 21 involves soil disturbing activities. Soil disturbing activities include clearing, grading, excavation and any other disturbances to ground. This definition includes stockpiling. "Contamination" means, as defined in the Porter-Cologn Water Quality Control Act, contamination is "an impairment of the quality of waters of the State by waste to a degree which creates a hazard to the public health through poisoning or through the spread of disease. `Contamination' includes any equivalent effect resulting from the disposal of waste whether or waters of the State are affected." "Co -Permittee" means the County of Riverside, the Riverside County Flood Control and Water Conservation District and the City of Murrieta which are responsible for compliance with the terms of the Permit. "CWA" means the Clean Water Act. "DAMP" means the Riverside County Drainage Area Management Plan, as the same may be amended from time to time. "Discharge" means any release, spill, leak, flow, escape, leaching (including subsurface migration or deposition to groundwater), dumping or disposal of any liquid, semi-solid or solid substance. "Discharge Exception" means those activities not restricted or prohibited by this Ordinance or exempted under Section A of the Permit or a subsequent Permit. "Discharger" means any person, any property owner, any business owner or operator, or any occupant of any unit, building, premises or lot within the City, who either discharges or causes to be discharged any of the substances listed under "Discharge," above, either directly or indirectly, into the City's Storm Drain System. In any action taken to enforce this Ordinance, the burden shall be on the person who is the subject of such action to establish that a Discharge was within the scope of this discharge Exception. "Enforcing Attorney" means the City Attorney, or the District Attorney acting as counsel to the City of Temecula, and his/her designee, which counsel is authorized to take enforcement action as described herein. For purposes of criminal prosecution, only the District Attorney and/or City Attorney, or his/her designee, shall act as the Enforcing Attorney. "EPA" means Environmental Protection Agency, which is an agency of the federal government of the United States charged with developing, implementing and enforcing environmental protection laws that ensure clean air, clean water, clean soil, safe pesticides and waste recycling and reduction. "ESA" means Environmentally Sensitive Areas "in which plant or animal life or their habitats are either rare or especially valuable because of their special nature or role in R:/Ords 2012/Ords 12-05 22 an ecosystem and which would easily be disturbed or degraded by human activities and developments" (California Public Resources Code section 30107.5). ESAs subject to urban runoff requirements included but are not limited to all CWA section 303 (d) impaired water bodies, areas designated as Areas of Special Biological Significance by the SWRCB (Basin Plan); water bodies designated with the RARE beneficial use by the SWRCB (Basin Plan); areas within the Western Riverside County Multi -Species Habitat Conservation Plan (MSHCP) plan areas that contain rare or especially valuable plant or animal life or their habitat; and any other equivalent environmentally sensitive areas which the Permittees have identified. "Hearing Officer" means the City Engineer or his/her designee, who shall preside at any administrative hearings authorized by this Ordinance, and who is authorized to issue final decisions on the matters raised therein. "Hydromodification" means alteration of the hydrologic characteristics of coastal and noncoastal waters, which in turn could cause degradation of water resources. "Illicit Connection" means any connection to the MS4 that conveys an illicit discharge. "Illicit Discharge" means any discharge to the MS4 that is not composed entirely of storm water except discharges pursuant to a NPDES permit or discharges exempt pursuant to Section 8.28.210 of this ordinance. "Invoice for Costs" means the actual costs and expenses of the City, including but not limited to administrative overhead, salaries and other expenses recoverable under California law, incurred during any Inspection conducted pursuant to Article IV of this Ordinance or where a Notice of Noncompliance, Administrative Compliance Order or other enforcement option under Article V of this Ordinance is utilized to ensure compliance with this Ordinance. "Low Impact Development (LID)" is a land planning and engineering design approach to managing storm water runoff and emphasizes conservation and use of on-site natural features to protect water quality. This approach implements engineered small-scale hydrologic controls to replicate the pre -development hydrologic regime of watersheds through infiltration, filtration, storing, evaporating, and detaining runoff close to its source. "Maximum Extent Practicable" ("MEP") as defined in the City's MS4 permit, means the technology-based standard established by Congress in CWA section 402(p)(3)(B)(iii) for storm water that operators of MS4s must meet. Technology-based standards establish the level of pollutant reductions that dischargers must achieve, typically by treatment or by a combination of source control and treatment control BMP's. MEP generally emphasizes pollution prevention and source control BMP's primarily (as the first line of defense) in combination with treatment methods serving as a backup (additional line of defense). MEP considers economics and is generally, but not necessarily, less stringent than BAT (best available technology). The definition of MEP is dynamic and R:/Ords 2012/Ords 12-05 23 will be defined by the following process over time; municipalities propose their definition of MEP by way of the SWMP. Their total collective and individual activities conducted pursuant to the SWMP becomes their proposal for MEP as it applies both to their overall effort, as well as to specific activities (e.g., MEP for street sweeping, or MEP for MS4 maintenance). "Modifications to existing Development" means the creation or addition of impervious surfaces or the making of improvements to an existing structure on an already developed site; replacement of impervious surfaces that are not part of a routine maintenance activity; and land disturbing activities related to structural or impervious surfaces. This definition is consistent with the term "Redevelopment" as referenced in the MS4 permit. "Municipal Separate Storm Sewer System (MS4)", as defined in the City's MS4 permit, means a conveyance or system of conveyances (including roads with drainage systems, municipal streets, catch basins, curbs, gutters, ditches, man-made channels, or storm drains): (i) Owned or operated by a State, city, town, borough, county, parish, district, association, or other public body (created by or pursuant to State law) having jurisdiction over disposal of sewage, industrial wastes, storm water, or other wastes, including special districts under State law such as sewer district, flood control district or drainage district, or similar entity, or an Indian tribe or an authorized Indian tribal organization, or designated and approved management agency under section 208 of the CWA that discharges to waters of the United States; (ii) Designated or used for collecting or conveying storm water; (iii) Which is not a combined sewer; (iv) Which is not part of the Publicly Owned Treatment Works (POTVV) as defined at 40 CFR 122.26. "New Development" means all public and private residential (whether single family, multi -unit or planned unit development), industrial, commercial, retail, and other non- residential construction projects, or grading for future construction, for which a land use approval, grading permit, building permit or street improvement permit is required. "Non -Storm Water Runoff' means all discharges to and from a MS4 that do not originate from precipitation events. "NPDES or "National Pollutant Discharge Elimination System" means the national program for issuing, modifying, revoking and reissuing, terminating, monitoring and enforcing permits, and imposing and enforcing pretreatment requirements, under Sections 307, 318, 402, and 405 of the CWA. "One -Acre Threshold Project" means all public and private post -construction pollutant - generating projects that result in the disturbance of one acre or more of land. "Owner or Operator" means the owner or operator of any facility or activity subject to regulation under the NPDES program. R:/Ords 2012/Ords 12-05 24 "Permit" means the current NPDES permit issued by the Regional Board, State Board, or EPA under the authority of the Federal Clean Water Act or California's Porter - Cologne Water Quality Control Act, or any succeeding NPDES permit, and any other currently applicable municipal discharge permit[s], which establishes waste discharge requirements applicable to stormwater and urban runoff within the City. "Permittee" means any person, property owner, contractor, or authorized agent to whom a permit is issued pursuant to this Ordinance. "Person" means an individual, association, partnership, corporation, municipality, State or Federal agency, or any agent or employee thereof [40 CFR 122.2]. "Pollutant" means any agent that may cause or contribute to the degradation of water quality such that a condition of pollution or contamination is created or aggravated. "Pollution" as defined in the Porter -Cologne Water Quality Control Act is the alteration of the quality of the waters of the State by waste, to degree that unreasonably affects either of the following: 1) The waters for beneficial uses; or 2) Facilities that serve these beneficial uses. Pollution may include contamination. "Post -Construction BMPs" means a subset of BMPs including structural and non- structural controls which detain, retain, filter, or educate to prevent the release of pollutants to surface waters during the final functional life of developments. "Prohibited Discharge" means any Discharge which contains any Pollutant, from public or private property to (i) the Storm Drain System; (ii) any upstream flow, which is tributary to the Storm Drain System; (iii) any groundwater, river, stream, creek, wash or dry weather arroyo, wetlands area, or marsh; or (iv) which is otherwise prohibited by the Permit. The term "Prohibited Discharge" shall not include discharges allowable under the Discharge Exception. "Receiving Waters" means the Federal and State waters. This applies to natural drainage channels, active or not, including all tributaries leading to streams, creeks, rivers, and other waterbodies. "Redevelopment" means all public and private projects that create, add, or replace at least 5,000 square feet of impervious surfaces on an already developed site. "Regional Board" or "SDRWQCB" refers to the San Diego Regional Water Quality Control Board which has jurisdiction over the City. "Modifications to existing development" means the rehabilitation or reconstruction of public or private residential (whether single family, multi -unit or planned unit development), industrial, commercial, retail, or other non-residential structures, for which either a land use approval, grading permit, building permit or Non-residential Plumbing Permit is required. R:/Ords 2012/Ords 12-05 25 "Site" means the real property on which activities subject to this Ordinance may occur. "State Board" or "SWRCB" means the State Water Resources Control Board. "State General Permit" means a State General Permit regulating the discharge of pollutants from industrial activities, construction activities, or any other type of activity, , as the same may be amended from time to time, and the terms and requirements of either or both permits. In the event the EPA revokes the in -lieu permitting authority of the State Board, then the term State General Permit shall also refer to any EPA - administered stormwater control program for industrial activities, construction activities, or any other type of activity that is subsequently regulated through a state general Permit. "Storm Drain System" means street gutter, channel, storm drain, constructed drain, lined diversion structure, wash area, inlet, outlet, stream, creek, river, or other facility within the City limits, which is a part of or tributary to the County -wide stormwater runoff system and owned, operated, maintained or controlled by the City, the County of Riverside, the Riverside County Water Conservation and Flood Control District or any Co -Permittee, and used for the purpose of collecting, storing, transporting, or disposing of stormwater. "Stormwater Manual" means the City of Temecula Administrative and Technical Procedures Manual for Stormwater and Urban Runoff Management and Discharge Control. "Stormwater Runoff" means that part of precipitation (rainfall) which travels via flow across a surface to the MS4 or receiving waters from impervious, semi -pervious or pervious surfaces. "Urban Runoff" means surface water flow produced by non-stormwater resulting from active construction sites and existing residential, commercial and industrial activities involving the use of potable and non -potable water. "SSMP/WQMP" means a Standard Storm Water Mitigation Plan, also known as a Water Quality Management Plan." Section 3. The City Council authorizes and directs the Director of Public Works/City Engineer to prepare and utilize a manual of standards setting forth the administrative procedures and technical requirements necessary to implement the provisions of this Ordinance. Such rules, procedures, and requirements shall be entitled "The City of Temecula Administrative and Technical Procedures Manual for Stormwater and Urban Runoff Management and Discharge Control". Section 4. Environmental Determination. Active and inactive construction sites, existing industrial/commercial business facilities and activities, completed developments, vacant or abandoned properties that were required to install BMPs, and existing residential neighborhoods regulated by this Ordinance represent an R:/Ords 2012/Ords 12-05 26 implementation component of the adopted General Plan to mitigate potential and theoretical impacts to water quality. The general impacts of the General Plan were evaluated in the Final Environmental Impact Report that was prepared for the updated General Plan. The Final EIR for the General Plan was certified by the City Council on April 12, 2005. The adoption of the proposed Ordinance will allow the City to establish procedures and requirements that will regulate pollutants in stormwater and urban runoff within the City. The proposed Ordinance is expected to result in benefits to Federal and State waters and the protection of the environment. No new development will occur because of the adoption of this Ordinance. Therefore, this project is categorically exempt from CEQA pursuant to the provision of Sections 15308 and 15601(b)(3), and therefore, no further environmental review is required. The City further acknowledges that the action is the replacement of the existing regulatory ordinance with an ordinance of similar character reflecting the current state of the applicable law. In light of this deminimus substitution the general rule of CEQA as set forth in State CEQA Guidelines Section 15601(b)(3) is also deemed applicable to this action as it can be seen with certainty that the adoption of this superseding ordinance will not cause new or additional adverse effects upon the environment. Section 5. Severability. If any portion, provision, section, paragraph, sentence, or word of this Ordinance is rendered or declared to be invalid by any final court action in a court of competent jurisdiction, or by reason of any preemptive legislation, the remaining portions, provisions, sections, paragraphs, sentences, and words of this Ordinance shall remain in full force and effect and shall be interpreted by the court so as to give effect to such remaining portions of the Ordinance. Section 6. Effective Date. This Ordinance shall take effect thirty (30) days after its adoption. Section 7. Notice of Adoption. The City Clerk shall certify to the adoption of this Ordinance and cause it to be published in the manner required by law. PASSED, APPROVED, AND ADOPTED by the City Council of the City of Temecula this 26th day of June, 2012. Chuck Washington, Mayor ATTEST: Susan W. Jones, MMC City Clerk [SEAL] R:/Ords 2012/Ords 12-05 27 STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ) ss CITY OF TEMECULA ) I, Susan W. Jones, MMC, City Clerk of the City of Temecula, do hereby certify that the foregoing Ordinance No. 12-05 was duly introduced and placed upon its first reading at a meeting of the City Council of the City of Temecula on the 12th day of June, 2012, and that thereafter, said Ordinance was duly adopted by the City Council of the City of Temecula at a meeting thereof held on the 26th day of June, 2012, the following vote: AYES: COUNCIL MEMBERS: NOES: COUNCIL MEMBERS: ABSENT: COUNCIL MEMBERS: ABSTAIN: COUNCIL MEMBERS: Susan W. Jones, MMC City Clerk R:/Ords 2012/Ords 12-05 28 TEMECULA COMMUNITY SERVICES DISTRICT Item No. 18 ACTION MINUTES of June 12, 2012 City Council Chambers, 41000 Main Street, Temecula, California TEMECULA COMMUNITY SERVICES DISTRICT MEETING The Temecula Community Services District Meeting convened at 8:00 P.M. CALL TO ORDER: President Jeff Comerchero ROLL CALL: DIRECTORS: Edwards, Naggar, Roberts, Washington, Comerchero CSD PUBLIC COMMENTS None. CSD CONSENT CALENDAR 20 Action Minutes - Approved Staff Recommendation (5-0-0) Director Washington made the motion; it was seconded by Director Edwards; and voice vote reflected unanimous approval. RECOMMENDATION: 20.1 Approve the action minutes of May 22, 2012. 21 Second Amendment with Excel Landscape, Inc. for Landscape Maintenance Services for Fiscal Year 2012-13 - Approved Staff Recommendation (5-0-0) Director Washington made the motion; it was seconded by Director Edwards; and voice vote reflected unanimous approval. RECOMMENDATION: 21.1 Approve a Second Amendment with Excel Landscape, Inc., to provide continued Landscape Maintenance Services and the addition of new and supplemental landscape maintenance service areas for $2,182,123.49 for Fiscal Year 2012-13; 21.2 Authorize the General Manager to approve additional work not to exceed the contingency amount of $218,212.35, which is equal to 10% of the amendment amount. 22 First Amendment to Concession Agreement at Patricia H. Birdsall Sports Park — Approved Staff Recommendation (4-0-1, Director Naggar abstained) Director Washington made the motion; it was seconded by Director Edwards; and voice vote reflected unanimous approval. RECOMMENDATION: 22.1 Approve the First Amendment with Stadium Pizza Redhawk, LLC to extend the term through July 31, 2012. CSD PUBLIC HEARING 23 Temecula Community Services District Proposed Rates and Charges for Fiscal Year 2012-13 - The public hearing was opened at 8:01 P.M. Having no requests to speak, President Comerchero closed the public hearing at 8:02 PM. City Clerk Susan Jones reported that she received three formal protests for Service Level 3 — Refuse Recycling. Approved Staff Recommendation (5-0-0) Director Naggar made the motion; it was seconded by Director Edwards; and voice vote reflected unanimous approval. RECOMMENDATION: 23.1 Adopt a resolution entitled: RESOLUTION NO. CSD 12-04 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE TEMECULA COMMUNITY SERVICES DISTRICT OF THE CITY OF TEMECULA ADOPTING RATES AND CHARGES FOR SERVICE LEVEL B — RESIDENTIAL STREET LIGHTING, SERVICE LEVEL C — PERIMETER LANDSCAPING, SERVICE LEVEL D — RECYCLING AND REFUSE COLLECTION AND SERVICE LEVEL R— EMERGENCY UNPAVED ROAD MAINTENANCE SERVICES FOR FISCAL YEAR 2012-2013 CSD BUSINESS 24 Request to allow Non -Motorized Scooters in Temecula Skate Park (at the request of Council Member Edwards) - Approved Staff Recommendation (5-0-0) Director Washington made the motion; it was seconded by Director Roberts; and voice vote reflected unanimous approval. RECOMMENDATION: 24.1 Approve non -motorized scooters in the Temecula Skate Park, during specified scooter sessions, per the amended Skate Park schedule. CSD DIRECTOR OF COMMUNITY SERVICES REPORT CSD GENERAL MANAGER REPORT CSD BOARD OF DIRECTORS REPORTS CSD ADJOURNMENT At 8:30 P.M., the Temecula Community Services District meeting was formally adjourned to Tuesday, June 26, 2012, at 5:30 PM, for a Closed Session, with regular session commencing at 7:00 PM., City Council Chambers, 41000 Main Street, Temecula, California. Jeff Comerchero, President ATTEST: Susan W. Jones, MMC City Clerk/District Secretary [SEAL] Item No. 19 Approvals City Attorney Director of Finance City Manager TEMECULA COMMUNITY SERVICES DISTRICT AGENDA REPORT TO: General Manager/Board of Directors FROM: Aaron Adams, Executive Director of Community Services DATE: June 26, 2012 SUBJECT: Agreement with Melody's Ad Works, Inc. for Promoting and Marketing Special Events in Old Town for Fiscal Year 2012-13 RECOMMENDATION: Approve the Agreement with Melody's Ad Works, Inc. in the amount of $43,000 for services provided in promoting and marketing Special Events in Old Town for Fiscal Year 2012-13. BACKGROUND: Melody Brunsting, a Temecula public relations and special events coordinator, has been assisting the City in promoting and marketing special events in Old Town Temecula since 1999. The City has expanded special events to include Hot Summer Nights Friday nights from July 6 — August 31, 2012; Quilt Show, Saturday, October 6, 2012; Christmas in Old Town beginning November 23 with Santa's arrival through December 16, 2012; New Year's Eve to include the Grape Drop; Bluegrass Festival, March 16 & 17, 2013; Western Days, May 18 & 19, 2013; and Street Painting and Plein Air Festival, June 24 — 26. 2013. These special events attract visitors to Old Town by hosting a variety of activities of interest for the local community and tourists of all ages. Through these efforts, merchants and restaurants have benefited by increased business which enhances Old Town's economic viability. Melody's Ad Works, Inc. will plan, organize and promote a series of annual events in Old Town Temecula. These events will begin with Hot Summer Nights July 6, 2012 and end with the Street Painting Festival June 21-23, 2013_ Additionally, Melody's Ad Works will provide services and materials needed to enhance the Grapes for the New Year's Eve celebration. FISCAL IMPACT: The $43,000 for services provided in promoting and marketing Special Events in Old Town are included in the Fiscal Year 2012-13 Operating Budget in the Cultural Arts City Promotional Events Operating Budget Line Item. ATTACHMENTS: 1 Consultant Agreement 2. Budget Proposal and Scope of Work AGREEMENT FOR CONSULTANT SERVICES BETWEEN TEMECULA COMMUNITY SERVICES DISTRICT AND MELODY'S AD WORKS, INC. OLD TOWN TEMECULA SPECIAL EVENT PROMOTIONS THIS AGREEMENT is made and effective as of July 1, 2012, between the Temecula Community Services District, a community services district (hereinafter referred to as "City"), and Melody's Ad Works, Inc., a Corporation (hereinafter referred to as "Consultant"). In consideration of the mutual covenants and conditions set forth herein, the parties agree as follows: 1. TERM This Agreement shall commence on July 1, 2012, and shall remain and continue in effect until tasks described herein are completed, but in no event later than June 30, 2013, unless sooner terminated pursuant to the provisions of this Agreement. 2. SERVICES Consultant shall perform the services and tasks described and set forth in Exhibit A, attached hereto and incorporated herein as though set forth in full. Consultant shall complete the tasks according to the schedule of performance which is also set forth in Exhibit A. 3. PERFORMANCE Consultant shall at all times faithfully, competently and to the best of his or her ability, experience, and talent, perform all tasks described herein. Consultant shall employ, at a minimum, generally accepted standards and practices utilized by persons engaged in providing similar services as are required of Consultant hereunder in meeting its obligations under this Ag ree me nt. 4. PAYMENT a. The City agrees to pay Consultant monthly, in accordance with the payment rates and terms and the schedule of payment as set forth in Exhibit A, Payment Rates and Schedule, attached hereto and incorporated herein by this reference as though set forth in full, based upon actual time spent on the above tasks. Any terms in Exhibit A, other than the payment rates and schedule of payment, are null and void. This amount shall riot exceed Forty Thousand Dollars and 00/100 ($40,000.00) for services provided and Three Thousand Dollars and 00/100 ($3,000.00) for the New Year's Eve Grape Drop enhancement for a total agreement of Forty Three Thousand Dollars and 00/100 ($43,000.00) for the total term of this agreement unless additional payment is approved as provided in this Agreement. b. Consultant shall not be compensated for any services rendered in connection with its performance of this Agreement which are in addition to those set forth herein, unless such additional services are authorized in advance and in writing by the City Manager . Consultant shall be compensated for any additional services in the amounts and in the manner as agreed to by City Manager and Consultant at the time City's written authorization is given to Consultant for the performance of said services. c. Consultant will submit invoices monthly for actual services performed. Invoices shall be submitted between the first and fifteenth business day of each month, for services provided in the previous month. Payment shall be made within thirty (30) days of receipt of each invoice as to all non -disputed fees. If the City disputes any of Consultant's fees, it shall give written notice to Consultant within thirty (30) days of receipt of an invoice of any disputed fees set forth on the invoice. For all reimbursements authorized by this Agreement, Consultant shall provide receipts on all reimbursable expenses in excess of fifty dollars ($50) in such form as approved by the Director of Finance. 5. SUSPENSION OR TERMINATION OF AGREEMENT WITHOUT CAUSE a. The City may at any time, for any reason, with or without cause, suspend or terminate this Agreement, or any portion hereof, by serving upon the Consultant at least ten (10) days prior written notice. Upon receipt of said notice, the Consultant shall immediately cease all work under this Agreement, unless the notice provides otherwise. If the City suspends or terminates a portion of this Agreement such suspension or termination shall riot make void or invalidate the remainder of this Agreement. b. In the event this Agreement is terminated pursuant to this Section, the City shall pay to Consultant the actual value of the work performed up to the time of termination, provided that the work performed is of value to the City. Upon termination of the Agreement pursuant to this Section, the Consultant will submit an invoice to the City, pursuant to Section entitled "PAYMENT" herein. 6. DEFAULT OF CONSULTANT a. The Consultant's failure to comply with the provisions of this Agreement shall constitute a default. In the event that Consultant is in default for cause under the terms of this Agreement, City shall have no obligation or duty to continue compensating Consultant for any work performed after the date of default and can terminate this Agreement immediately by written notice to the Consultant. If such failure by the Consultant to make progress in the performance of work hereunder arises out of causes beyond the Consultant's control, and without fault or negligence of the Consultant, it shall not be considered a default. b. If the City Manager or his delegate determines that the Consultant is in default in the performance of any of the terms or conditions of this Agreement, it shall serve the Consultant with written notice of the default. The Consultant shall have ten (10) days after service upon it of said notice in which to cure the default by rendering a satisfactory performance. In the event that the Consultant fails to cure its default within such period of time, the City shall have the right, notwithstanding any other provision of this Agreement, to terminate this Agreement without further notice and without prejudice to any other remedy to which it may be entitled at law, in equity or under this Agreement. 7. OWNERSHIP OF DOCUMENTS a. Consultant shall maintain complete and accurate records with respect to sales, costs, expenses, receipts and other such information required by City that relate to the performance of services under this Agreement. Consultant shall maintain adequate records of services provided in sufficient detail to permit an evaluation of services. All such records shall be maintained in accordance with generally accepted accounting principles and shall be clearly identified and readily accessible. Consultant shall provide free access to the representatives of City or its designees at reasonable times to such books and records, shall give City the right to examine and audit said books and records, shall permit City to make transcripts there from as necessary, and shall allow inspection of all work, data, documents, proceedings and activities related to this Agreement. Such records, together with supporting documents, shall be maintained for a period of three (3) years after receipt of final payment. b. Upon completion of, or in the event of termination or suspension of this Agreement, all original documents, designs, drawings, maps, models, computer files containing data generated for the work, surveys, notes, and other documents prepared in the course of providing the services to be performed pursuant to this Agreement shall become the sole property of the City and may be used, reused or otherwise disposed of by the City without the permission of the Consultant. With respect to computer files containing data generated for the work, Consultant shall make available to the City, upon reasonable written request by the City, the necessary computer software and hardware for purposes of accessing, compiling, transferring and printing computer files. 8. INDEMNIFICATION The Consultant agrees to defend, indemnify, protect and hold harmless the City of Temecula, Temecula Community Services District, and/or the Successor Agency to the Temecula Redevelopment Agency, its officers, officials, employees and volunteers from and against any and all claims, demands, losses, defense costs or expenses, including attorney fees and expert witness fees, or liability of any kind or nature which the City of Temecula, Temecula Community Services District, and/or the Successor Agency to the Temecula Redevelopment Agency, its officers, agents, employees or volunteers may sustain or incur or which may be imposed upon them for injury to or death of persons, or damage to property arising out of Consultant's negligent or wrongful acts or omissions arising out of or in any way related to the performance or non-performance of this Agreement, excepting only liability arising out of the negligence of the City of Temecula, Temecula Community Services District, and/or the Successor Agency to the Temecula Redevelopment Agency. 9. INSURANCE REQUIREMENTS Consultant shall procure and maintain for the duration of the contract insurance against claims for injuries to persons or damages to property, which may arise from or in connection with the performance of the work hereunder by the Consultant, its agents, representatives, or employees. a. Minimum Scope of Insurance. Coverage shall be at least as broad as: 1) Insurance Services Office Commercial General Liability form No. CG 00 01 11 85 or 88. 2) Insurance Services Office Business Auto Coverage form CA 00 01 06 92 covering Automobile Liability, code 1 (any auto). If the Consultant owns no automobiles, a non -owned auto endorsement to the General Liability policy described above is acceptable. 3) Worker's Compensation insurance as required by the State of California and Employer's Liability Insurance. If the Consultant has no employees while performing under this Agreement, worker's compensation insurance is not required, but Consultant shall execute a declaration that it has no employees. b. Minimum Limits of Insurance. Consultant shall maintain limits no less than: 1) General Liability: One million ($1,000,000) per occurrence for bodily injury, personal injury and property damage. If Commercial General Liability Insurance or other form with a general aggregate limit is used, either the general aggregate limit shall apply separately to this projectilocation or the general aggregate limit shall be twice the required occurrence limit. 2) Automobile Liability: One million ($1,000,000) per accident for bodily injury and property damage. 3) Worker's Compensation insurance is required only if Consultant employs any employees. Consultant warrants and represents to the City of Temecula, Temecula Community Services District, and/or the Successor Agency to the Temecula Redevelopment Agency that it has no employees and that it will obtain the required Worker's Compensation Insurance upon the hiring of any employees. c. Deductibles and Self -Insured Retentions. Any deductibles or self-insured retentions shall not exceed Twenty Five Thousand Dollars and No Cents ($25,000). d. Other Insurance Provisions. The general liability and automobile liability policies are to contain, or be endorsed to contain, the following provisions: 1) The City of Temecula, the Temecula Community Services District, the Successor Agency to the Temecula Redevelopment Agency, their officers, officials, employees and volunteers are to be covered as insured's, as respects: liability arising out of activities performed by or on behalf of the Consultant; products and completed operations of the Consultant; premises owned, occupied or used by the Consultant; or automobiles owned, leased, hired or borrowed by the Consultant. The coverage shall contain no special limitations on the scope of protection afforded to the City of Temecula, the Temecula Community Services District, the Successor Agency to the Temecula Redevelopment Agency, their officers, officials, employees or volunteers. 2) For any claims related to this project, the Consultant's insurance coverage shall be primary insurance as respects the City of Temecula, the Temecula Community Services District, the Successor Agency to the Temecula Redevelopment Agency, their officers, officials, employees and volunteers. Any insurance or self-insured maintained by the City of Temecula, Temecula Community Services District, and/or the Successor Agency to the Temecula Redevelopment Agency, its officers, officials, employees or volunteers shall be excess of the Consultant's insurance and shall not contribute with it. 3) Any failure to comply with reporting or other provisions of the policies including breaches of warranties shall not affect coverage provided to the City of Temecula, the Temecula Community Services District, and the Successor Agency to the Successor Agency to the Temecula Redevelopment Agency, their officers, officials, employees or volunteers. 4) The Consultant's insurance shall apply separately to each insured against whom claim is made or suit is brought, except with respect to the limits of the insurer's liability. 5) Each insurance policy required by this agreement shall be endorsed to state in substantial conformance to the following: If the policy will be canceled before the expiration date the insurer will notify in writing to the City of such cancellation not less than thirty (30) days' prior to the cancellation effective date. 6) If insurance coverage is canceled or, reduced in coverage or in limits the Consultant shall within two (2) business days of notice from insurer phone, fax, and/or notify the City via certified mail, return receipt requested of the changes to or cancellation of the policy. e. Acceptability of Insurers. Insurance is to be placed with insurers with a current A.M. Best rating of A -:VII or better, unless otherwise acceptable to the City. Self insurance shall not be considered to comply with these insurance requirements. f. Verification of Coverage. Consultant shall furnish the City with original endorsements effecting coverage required by this clause. The endorsements are to be signed by a person authorized by that insurer to bind coverage on its behalf. The endorsements are to be on forms provided by the City. All endorsements are to be received and approved by the City before work commences. As an alternative to the City's forms, the Consultant's insurer may provide complete, certified copies of all required insurance policies, including endorsements affecting the coverage required by these specifications. 10. INDEPENDENT CONTRACTOR a. Consultant is and shall at all times remain as to the City a wholly independent contractor. The personnel performing the services under this Agreement on behalf of Consultant shall at all times be under Consultant's exclusive direction and control. Neither City nor any of its officers, employees, agents, or volunteers shall have control over the conduct of Consultant or any of Consultant's officers, employees, or agents except as set forth in this Agreement. Consultant shall not at any time or in any manner represent that it or any of its officers, employees or agents are in any manner officers, employees or agents of the City. Consultant shall not incur or have the power to incur any debt, obligation or liability whatever against City, or bind City in any manner. b. No employee benefits shall be available to Consultant in connection with the performance of this Agreement. Except for the fees paid to Consultant as provided in the Agreement, City shall not pay salaries, wages, or other compensation to Consultant for performing services hereunder for City. City shall not be liable for compensation or indemnification to Consultant for injury or sickness arising out of performing services hereunder. 11. LEGAL RESPONSIBILITIES The Consultant shall keep itself informed of all local, State and Federal ordinances, Taws and regulations which in any manner affect those employed by it or in any way affect the performance of its service pursuant to this Agreement. The Consultant shall at all times observe and comply with all such ordinances, laws and regulations. The City, and its officers and employees, shall not be liable at law or in equity occasioned by failure of the Consultant to comply with this section. 12. RELEASE OF INFORMATION a. All information gained by Consultant in performance of this Agreement shall be considered confidential and shall not be released by Consultant without City's prior written authorization. Consultant, its officers, employees, agents or subcontractors, shall not without written authorization from the City Manager or unless requested by the City Attorney, voluntarily provide declarations, letters of support, testimony at depositions, response to interrogatories or other information concerning the work performed under this Agreement or relating to any project or property located within the City. Response to a subpoena or court order shall not be considered "voluntary" provided Consultant gives City notice of such court order or subpoena. b. Consultant shall promptly notify City should Consultant, its officers, employees, agents or subcontractors be served with any summons, complaint, subpoena, notice of deposition, request for documents, interrogatories, request for admissions or other discovery request, court order or subpoena from any party regarding this Agreement and the work performed there under or with respect to any project or property located within the City. City retains the right, but has no obligation, to represent Consultant and/or be present at any deposition, hearing or similar proceeding. Consultant agrees to cooperate fully with City and to provide City with the opportunity to review any response to discovery requests provided by Consultant. However, City's right to review any such response does not imply or mean the right by City to control, direct, or rewrite said response. 13. NOTICES Any notices which either party may desire to give to the other party under this Agreement must be in writing and may be given either by (i) personal service, (ii) delivery by a reputable document delivery service, such as but not limited to, Federal Express, that provides a receipt showing date and time of delivery, or (iii) mailing in the United States Mail, certified mail, postage prepaid, return receipt requested, addressed to the address of the party as set forth below or at any other address as that party may later designate by Notice. Notice shall be effective upon delivery to the addresses specified below or on the third business day following deposit with the document delivery service or United States Mail as provided above. Mailing Address: City of Temecula Attn: General Manager P.O. Box 9033 Temecula, CA 92589-9033 Use this Address for a Delivery Service: City of Temecula or Hand -Deliveries ONLY Attn: General Manager 41000 Main Street Temecula, CA 92590 To Consultant: 14. ASSIGNMENT Melody Brunsting Melody's Ad Works, Inc. 21705 Como Street Wildomar, CA 92595 The Consultant shall not assign the performance of this Agreement, nor any part thereof, nor any monies due hereunder, without prior written consent of the City. Upon termination of this Agreement, Consultant's sole compensation shall be payment for actual services performed up to, and including, the date of termination or as may be otherwise agreed to in writing between the City Council and the Consultant. 15. LICENSES At all times during the term of this Agreement, Consultant shall have in full force and effect, all licenses required of it by law for the performance of the services described in this Agreement. 16. GOVERNING LAW The City and Consultant understand and agree that the laws of the State of California shall govern the rights, obligations, duties and liabilities of the parties to this Agreement and also govern the interpretation of this Agreement. Any litigation concerning this Agreement shall take place in the municipal, superior, or federal district court with geographic jurisdiction over the City of Temecula. In the event such litigation is filed by one party against the other to enforce its rights under this Agreement, the prevailing party, as determined by the Court's judgment, shall be entitled to reasonable attorney fees and litigation expenses for the relief granted. 17. PROHIBITED INTEREST No officer, or employee of the City of Temecula that has participated in the development of this agreement or its approval shall have any financial interest, direct or indirect, in this Agreement, the proceeds thereof, the Consultant, or Consultant's sub -contractors for this project, during his/her tenure or for one year thereafter. The Consultant hereby warrants and represents to the City that no officer or employee of the City of Temecula that has participated in the development of this agreement or its approval has any interest, whether contractual, non - contractual, financial or otherwise, in this transaction, the proceeds thereof, or in the business of the Consultant or Consultant's sub -contractors on this project. Consultant further agrees to notify the City in the event any such interest is discovered whether or not such interest is prohibited by law or this Agreement. 18. ENTIRE AGREEMENT This Agreement contains the entire understanding between the parties relating to the obligations of the parties described in this Agreement. All prior or contemporaneous agreements, understandings, representations and statements, oral or written, are merged into this Agreement and shall be of no further force or effect. Each party is entering into this Agreement based solely upon the representations set forth herein and upon each party's own independent investigation of any and all facts such party deems material. 19. AUTHORITY TO EXECUTE THIS AGREEMENT The person or persons executing this Agreement on behalf of Consultant warrants and represents that he or she has the authority to execute this Agreement on behalf of the Consultant and has the authority to bind Consultant to the performance of its obligations hereunder. The City Manager is authorized to enter into an amendment on behalf of the City to make the following non -substantive modifications to the agreement: (a) name changes; (b) extension of time; (c) non -monetary changes in scope of work; (d) agreement termination. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed the day and year first above written. TEMECULA COMMUNITY SERVICES Melody Brunsting DISTRICT Melody's Ad Works„ Inc.. (Two Signatures of corporate officers required unless corporate documents authorize only one person to sign the agreement on behalf of the corporation.) By: By: Jeff Comerchero, TCSD President Melody Brunsting, President/Treasurer ATTEST: By: By: Susan W. Jones, MMC, City Clerk Calvin Brunsting, Vice-President/Secretary APPROVED AS TO FORM: By: Peter M. Thorson, City Attorney CONSULTANT Melody's Ad Works, Inc. Melody Brunsting 21705 Como Street Wildomar, CA 92595 (951) 678-1456 melsadworksmail.com PM Initials: Date: EXHIBIT A Scope of Work / Payment Rates and Schedule Act WQtk,,ine Marketing & Public Relations Budget Proposal and Scope of Work Old Town Temecula Special Event Promotions 2012-13 21705 Como Street " Wildomar " California 92595 Phone A (951) 252-5649 (951) 678-1456 " Fax (951) 678-5467 E-mail Melody@temeculacalifornia.com - Website: www.Temeculacalifornia.com h b Ad Works, Inc Marketing & Public Relations SCOPE OF WORK PERFORMED: Melody's Ad Works, Inc. will plan, organize, produce and promote a series of annual events in Old Town Temecula designed to draw guests to Old Town Temecula from the 2.2 million tourists that visit Temecula annually. These events will begin with Hot Summer Nights July 6, 2012 and end with Old Town Temecula Street Painting, June 21-23, 2013. This will be the 13th year for Melody's Ad Works to produce and promote Old Town Temecula Events. Even though the events have expanded, the budget has remained stable since 2005-06. The Old Town events have grown in attendance and notoriety establishing Old Town Temecula as an Entertainment Destination. The event program includes an addition of 2 Fridays to Hot Summer Nights, 2 evenings to Christmas Festivities, 1 evening to Street Painting and a New Year's Eve Celebration. The Old Town Event Implementation has resulted in increased spending for Arts, Entertainment and Recreation from $19 million annually (2000) to $212 million (2010) according to a recent Dean Runyan Survey.* Additionally, Tax Receipts generated by Travel Spending have grown from $2.7 million in local tax to $5.1 million; and from $5.3 million in state sales tax to $18.7 million. In recent years Melody's Ad Works Inc. has increased the amount of time the agency spends with social media and public relations in order to promote the events without any revenue growth. Service bureaus specializing in social media, public relations data bases and file transfer programs have also been provided at Melody's Ad Works, Inc. expense since 2009. Melody's Ad Works Inc. has also subsidized several of the events with small budgets by providing supplies, awards, and expenses not allotted for in the budget. Staff is working with Melody's Ad works to establish an event sponsorship program that can offset additional expenses. For the 2012-13 Old Town Temecula Events Melody's Ad Works Inc. will: ❑ Review, screen, and select entertainers o Distribute Performance agreements and W -9s for all contracted entertainers ❑ Order necessary additional facilities such as stage, lighting, canopies, and portable toilets ❑ Work with City of Temecula Planning and Riverside County Environmental Health to assure proper permits are acquired. ❑ Produce site map for each event ▪ Select and schedule most effective advertising for each event ❑ Create radio and television commercials (production costs additional) ❑ Create reproduction -ready art for applications and forms for the various events ❑ Post on www.temeculacalifornia.com ❑ Develop, write and distribute to media press releases and press packages for each event. o Distribute weekly, monthly and regional press releases supporting event. 21705 Como Street A Wildomar ^ California 92595 Phone ^ (951) 252-5649 (951) 678-1456 ^ Fax (951) 678-5467 E-mail Melody@temeculacalifornia.com - Website: www.Temeculacalifornia.com `h4 Ad Works, Inc Marketing & Public Relations o Post on event and entertainment media calendar websites in Southern California. o Distribute quarterly press release on events for 6 -month lead time publications. o Produce e-mail blasts to combined email list of Temecula CVB, Chamber and general interest subscribers to www.temeculacalifornia.com. Emails will promote events and activities and follow all SPAM rules and regulations restricting unsolicited emails. ■ (City can either forward to their email list or provide additional names if available to extend subscription base.) o Produce event sites and event invitations on Myspace, Facebook and other social networks as deemed necessary for the event. o Utilize social network marketing for promotion ❑ Provide on-site laminated 8.5x11"event locater signage for event activities u Coordinate with City of Temecula Staff ❑ Collect press clippings and maintain workbooks for each event. u Provide media coverage recap of events. *Deane Runyan and Associates 2010 Tourism Economic Impact Study for Temecula CVB 21705 Como Street ^ Wildomar ^ California 92595 Phone ^ (951) 252-5649 (951) 678-1456 ^ Fax (951) 678-5467 E-mail Melody@temeculacalifornia.com - Website: www.Temeculacalifornia.com Ad Works, Inc Marketing & Public Relations EVENT DESCRIPTIONS: c TY OF SUMMERFEST Hot Summer Nights: July 6 -August 31, 2012 The weekly format has been the most effective of the programs and continually builds the crowd over a nine -week period. Friday night events will begin July 6, 2012 and continue through Friday, August 31, 2012, Labor Day Weekend. When bands are placed on private property or adjacent parking lots, the business owners have agreed to provide a sponsorship of $100-$300 per band depending on the band quality and size. Locations of entertainment: • The Merc • Civic Center Quad and Steps • Main Street/Serendipity Parking Lot • Sweet Lumpy's • Villa di' Calabro • Tesoro Winery Parking Lot • Baily's Courtyard • Rosa's Cantina/Smoke Shop Alcove • Town Square Park • Corner 4th and Old Town Front Street • Corner Main and Front Street 21705 Como Street ^ Wildomar ^ California 92595 Phone ^ (951) 252-5649 (951) 678-1456 ^ Fax (951) 678-5467 E-mail Melody@temeculacalifornia.com - Website: www.Temeculacalifornia.com Ad W.orkr, Inc Marketing'8, Public Relations EVENTS AND ACTIVITIES • 9 weeks —July 6 thru August 31, 2012 • EDUTAINMENT: Discovering the Music In You - at the Mercantile 7 weeks of entertainment, with a 30 minute workshop and/or question and answer program for musicians and music lovers to discover the nuances of the various musical genres. The program includes: Dixieland, Bluegrass, Classical, Blues/Blues Harp, Finding your Unique Sound, and Success as a Teen Band. • PARTY IN THE PARK: Three Fridays Town Square Park and the Civic Center quad will be used to provide a family party in the park with a popular Hot Summer Night Band, large party jump and obstacle course, pony rides and other entertainment. These Fridays are July 20, August 17 and August 31. • Deejay/Emcee provided by local Q103 radio station • Dynamite Dave Weekly 21705 Como Street A Wildomar ^ California 92595 Phone A (951) 252-5649 (951) 678-1456 ^ Fax (951) 678-5467 E-mail Melody@temeculacalifornia.com - Website: www.Temeculacalifornia.com Ad Works, Inc Marketing & Public Relations QUILT SHOW October 6, 2012 This event is very popular with the merchants and out of town visitors. The Quilters in the Mist organization that produces the event has asked for City help to make the event grow. Funds for this show are used for rental equipment and marketing and promotion. This includes creating a postcard that is distributed to California Quilt Guilds and Shows, providing flyers and advertising to support the event and increase attendance. The postcards are critical to bring in the California market of more than 200 quilting guilds and will remain part of the support for the quilt show. Economic Impact of Quilting in the United States, According to a 2010 survey conducted by TNS Global, Inc, • Total quilters in U.S. exceeds $21 million • Estimated dollar value of quilting industry is $3.58 billion • Dedicated quilters spend more than $600 per year on quilting -related purchases. • Average dedicated quilter is 62 years old, well-educated, with HH income of $91,602 • Spend on average $2,422 per year on quilting • There are more than 200 quilting guilds in the State of California • Each year Guilds from around California attend the Outdoor show by Busloads. • Quilts hung in Old Town Temecula have values from $500 to $2,000 • One of the largest quilt shows on the West Coast is in Sisters Oregon and attracts 12,000 visitors for the one day show. Temecula's show draws between 6,000-10,000. • Hundreds of quilts are hung throughout Old Town Temecula's six blocks. The event has minimal costs to the city but draws busloads of quilters annually. Melody's Ad Works Inc. will work with the Quilters on permits, advertising, publicity, promotion and coordination of the event. 21705 Como Street ^ Wildomar ^ California 92595 Phone ^ (951) 252-5649 (951) 678-1456 ^ Fax (951) 678-5467 E-mail Melody@'.emeculacalifornia.com - Website: www.Temeculacalifornia.com Ad Works Inc Marketing & Public Relations C• 1 T Y 0 I WINTERFEST Old Town Christmas Friday, November23 - Ends December 15. Santa's arrival will be aboard the horse drawn carriage on Thanksgiving Friday, November 23. Santa will offer visits ten days for the 2012 year. This will include November 23, 24, 25, December 1, 2, 8, 9, 15 and 16. The 16th will be Santa's final day in Old Town. Entertainment: • Santa's Arrival the Friday after Thanksgiving includes Carriage, Trolley, Dynamite Dave, Emcee • Community Music Day with local schools • Carolers 5 days • Paint touch-up of Santa's House NEW YEAR'S EVE: There will be no change to the New Year's Eve Festivities. Headline bands will be determined at a later date. New bands are being screened through Hot Summer Nights. 21705 Como Street ^ Wildomar ^ California 92595 Phone " (951) 252-5649 (951) 678-1456 ^ Fax (951) 678-5467 E-mail Melody©temeculacalifornia.com - Website: www.Temeculacal;fornia.com Ad Works, Inc Marketing & Public Relations C. I T i OF E C:U,L A 2010 Bluegrass Festival March 16 & 17, 2013 The 2012 event sold approximately 500 Theater tickets/seats @$15 totaling $7,500. It has 200 RVers every year. Surveys of the RV owners demonstrated that the visitors would spend $300 in Old Town Temecula while in town for the event ($60,000 sales in town). With good weather the event averages 10,000 people. RVers account for 400 of those people. Vendors: generally 6 vendors at $150 per booth to city = $900.00. 2013 Festival • Friday entertainment will be eliminated. • Daytime concerts on Saturday will be cut from previous years of 11 a.m. to 7 p.m., to 11 a.m. to 5 p.m • Daytime concerts on Sunday will be cut from previous years of 10 a.m. (gospel concert) to 5 p.m. to 12 noon to 5 p.m. • Advertising will remain the same as this event utilizes direct marketing, marketing through clubs and minimal local advertising. • A national headliner will still be scheduled with the current budget, as well as popular west coast bluegrass bands. • There are already 187 RV spaces reserved for the 2013 event. 2013 Cost Recovery • Use 3 headline bands for paid concert Saturday evening in the theater. This has sold out 3 years running @ $15 per person, or approximately $7,500 in revenue for the Theater. 21705 Como Street A Wildomar A California 92595 Phone ^ (951) 252-5649 (951) 678-1456 ^ Fax (951) 678-5467 E-mail Melody@temeculacalifornia.com - Website: www.Temeculacalifornia.com hh jk Ad Works, Inc Marketing & Public Relations Western Days May 18 & 19, 2013 HIGHLIGHTS OF 2012 Western Days had been relatively stagnant until the addition five years ago of the ICS Chili Cook Off. Attendance on Sunday for the event has risen and the event is featured in Westways annually for the Chili Cook Off as it is a Regional Cook off. The winners of the 2012 event are going to the World Championships in North Carolina. Melody's Ad Works, Inc. purchased Temecula T-shirts from the CVB for the contestants to wear while representing Temecula in the World Championships The 2012 Chili Cook Off had 31 cooks, 31 contestants in ICS red, 16 in ICS chili verde and 12 salsa competitors. Previous years the event struggled to obtain enough contestants to keep its sanction. For the past 2 years the number of contestants has established the event as a REGIONAL COOK OFF, with winners advancing to the World Championships. This year total revenue from the cook off was $4,119. $1520 of that was paid in cash prizes to the winners in each category. This year plaques were given to the best restaurants and the event had four Old Town Temecula businesses participating. Expenses for the cook off portion of the event (facilities, supplies, ICS registration) total $2,000.13, making this an event that pays for itself. The 2013 Western Days Budget has been cut by $2250. The 2012 Budget was $10,100; the new budget is $7,850. With this 22% cut the following items will be eliminated: • Petting Zoo • Pony Rides (unless free vendor can be obtained that charges) • Musical performers (western music unless performers will entertain for free) What remains: Cost Recovery: • Gunfights • Calf roping • Chili Cook Off • People's Choice tastings, & entry fees for Chili Cook Off totaling $4,119 in 2012; event paid for itself. The advertising budget for Western Days has been $2500 for 7 years, and really can't take any more cuts without a significant impact on attendance, which would result in the Chili Cook Off not paying for its own expenses. The 2013 Event will include the ICS Chili Cook Off with promotion beginning in January for the Cook off. The increased prize money resulted in double the ICS entries so we suggest this practice continue. The event will also remain a regional Cook off. 21705 Como Street ^ Wildomar" California 92595 Phone " (951) 252-5649 (951) 678-1456 ^ Fax (951) 678-5467 E-mail Melody@temeculacalifornia.com - Website: www.Temeculacalifornia.com Ad Work', Inc Marketing & Public Relations CITY OF Street Painting Festival & Plein Air Festival June 21-23, 2013 HIGHLIGHTS OF 2011 EVENT: The Event was held in conjunction with the Ralph Love Plein Air Festival and organized by Melody's Ad Works Inc and the city. The event has continued to grow in popularity and arts outreach to the community. Its unique quality to other festivals has been the amount of space we provide the artists and the free access to youth and families with the most "family and children" drawings of a California Street Painting Festival. The Old Town Temecula Street Painting Festival is also part of a cooperative group of festivals that cross promote including the I Madonnari Festival and Santa Barbara Festival. In 2011 the Festival had: • 82 large (60-120) square feet Murals by professional muralists, artists, and youth solo pointers • 142 artists were participating either in teams as street painters or plein air artists (In 2007 we had a total of 72 artists participating) • Over 500 small family and children murals (2'x2') • Average unique visitors through Town Square Saturday and Sunday from 11 a.m. to 3 p.m, 1,500 per hour • Plein Air Festival winner receives $500 to be the Featured Artist at the following year's festival • Gatorade, Breakfast, and wet-ones/wipes DONATED BY MELODY'S AD WORKS, INC. 2005, 2006, 2007, 2008, 2009, 2010, 2011 • Prizes donated by Melody's Ad Works, Inc. in 2011 to People's Choice, Newcomer, Youth and Comeback/Committee's Choice award • Refreshments for reception and awards ceremony donated by Melody's Ad Works, Inc. in 2010 and 2011. 21705 Como Street ^ Wildomar ^ California 92595 Phone ^ (951) 252-5649 (951) 678-1456 ^ Fax (951) 678-5467 E-mail Melody©temeculacalifornia.com - Website: www.Temecuiacalifornia com Ad Works, Inc Marketing & Public Relations TIMELINE & DEADLINES: To efficiently run the proposed events deadlines and a timeline are provided. It takes a minimum of six months to promote an event, nine months to a year to professionally plan and organize entertainers and schedules. Melody's Ad Works has provided this timeline to assist city staff in adhering to proofreading, promotion and budgeting deadlines. 12-18 MONTHS Develop Year -Round Calendar of Events • 9-12 MONTHS Book Headline, Highest Demand Entertainment Confirm Dates Establish Budgets 6-9 MONTHS • Produce and Distribute annual Calendar Listing to long lead publications, travel writers, entertainment calendars. • Coordinate cross promotion with Temecula CVB, Old Town Merchants, Niche Organizations supporting the event. • Produce upcoming quarterly collateral material (rack cards) • Distribute W -9s, performance agreements, (This is delayed for Hot Summer Nights due to contractual restrictions) 3-6 MONTHS • Write & Distribute full press release on event to regional publications, calendar editors, travel editors • Distribute quarterly collateral • RFQ Facilities, order (tents, tables, chairs, portable restrooms) • Develop site plan • Confirm advertising and printing schedules • Follow up on entertainers paperwork, additional facilities needs, entertainer riders or requests • Distribute applications for contests (Street Painting, Chili Cook Off) 3 MONTHS • Write & Distribute Month Press releases • Write Public Service Announcements & Distribute • Contact entertainers and participants • Distribute applications (2nd mailing) • Press Release Contests and Applications Availability • PSA (Public Service Announcement on contests) 21705 Como Street ^ Wildomar ^ California 92595 Phone " (951) 252-5649 (951) 678-1456 ^ Fax (951) 678-5467 E-mail Melody@temeculacalifornia.com - Website: www.Temeculacahfornia.com eft A� UJorks, Inc Marketing & Public Relations 2 MONTHS • Monthly Ads in Neighbors or Monthly Publication • Distribute Public Service Announcements Again • Press Release Contests and Applications Availability • PSA (Public Service Announcement on contests) • Complete flyers, final proof of any collateral • Hotel room confirmation if required • 6 WEEKS — 4 WEEKS • Distribute flyers, posters, rack cards, collateral • Weekly Press Releases on Event • Complete radio and television copy and production depending on ad schedule • Check/recheck Performance agreements, contracts what is received • Begin weekly email blasts • Invite on social media • Begin regular mentions on social media 3 WEEKS • Buy supplies, order prizes, trophies • Begin advertising if budget allows. (Current budget only allows 1-2 weeks advertising) • Email blasts weekly • Email participants and remind dates • Email past participants/mail and remind of dates, resend applications • Confirm all facilities • Final of the site plan and layout. 2 WEEKS • Deadline for any vendor application • Deadline for participants. (While we take them in until day of event, organization runs better if we have a deadline. • Inventory/cross check supplies and needs based upon participants • Daily social media mentions • Weekly email blasts • Answer press inquiries, provide information and photos • Confirm event publicity in calendars and guides of local pubs 21705 Como Street ^ Wildomar ^ California 92595 Phone ^ (951) 252-5649 (951) 678-1456 ^ Fax (951) 678-5467 E-mail Melody@temeculacalifornia.com - Website: www.Temeculacalifornia.com Ad Works, Inc Marketing & Public Relations WEEK OF • Confirm arrival time for o Facilities o Entertainers o Public Works o Road Closures or supplies o Final Press Release and Ads • Pick up prizes, checks, awards • Review permits, requirements, confirm all facilities in place • Answer press inquiries, provide information and photos • Answer last minute questions for entertainers, performers, and participants • Set Up day before event as much as possible. GRAPHIC ARTS AND BROADCAST PRODUCTION TURN AROUND: • 1-2 Weeks o Proof/revisions 1 week o Proof corrections 24 hours Deadline for Radio, Television for placement —1 week prior to airing Deadline for Newspaper dailies - 3-5 days depending on date of ad/holidays Deadline for Newspaper monthlies — 2 weeks prior to month ad is to run Necessary time to promote an event 4-6 weeks of publicity, advertising, collateral material on display Any delays, excessive revisions of work, event budget or itinerary changes, result in a less efficient and effective promotional campaign for the event. Excessive revisions, changes and/or additional events and activities will result in additional fees beyond this contract fee at the rate of $150 per hour. Excessive revisions are defined as more than two design and/or copy changes due to subjective taste and not errors or omissions. Melody's Ad Works Inc. $ 40,000 21705 Como Street ^ Wildomar ^ California 92595 Phone ^ (951) 252-5649 (951) 678-1456 ^ Fax (951) 678-5467 E-mail Melody@temeculacaliforn:a.com - Website: www.Temeculacalifornia.corn Ad Won Inc Marketing & Public Relations Melody's Ad Works Inc. will bill monthly on the first of the month, for services described herein. Expenses incurred by Melody's Ad Works Inc., such as printing, postage, copies of applications, copy and fax costs, Christmas decorations, ice, signage, prizes and awards, games and toys for the events will be billed separately and are not part of the contract price for services. They have been delineated in the accompanying spreadsheet and are INCLUDED IN THE BUDGETS of each event. Postage falls under advertising. Other supplies fall under facilities and entertainment depending upon the supply item. Any City of Temecula requirements (insurance, permits, business license, and/or processing procedures) of Melody's Ad Works, Inc. that result in direct increased cost to Melody's Ad Works, Inc. and are additional to previous year's requirements, will be billed to the City of Temecula at cost for said items separate from this agreement. Melody's Ad Works, Inc maintains General Liability Insurance of $1,000,000 and auto liability of $1,000,000 per accident and assigns the City of Temecula as additional insured. Melody Brunsting, president is the sole employee of the company and therefore not required by law to carry workman's compensation. Melody's Ad Works, Inc. has analyzed the past 12 years of servicing this account and found the amount of reimbursable items is the minimum required to provide for the events. This amount is $6,100 and is included within the event budget. Respectfully submitted, Melody Brunsting Melody Brunsting President Melody's Ad Works, Inc. Providing quality events, marketing and promotions since 1989 Winner of the International Festivals & Events Association Gold Pinnacle Awards for Media Relations, Marketing, Social Media Campaign and Promotions. 21705 Como Street ^ Wildomar ^ California 92595 Phone ^ (951) 252-5649 (951) 678-1456 ^ Fax (951) 678-5467 E-mail Melody@'emeculacalifornia.com - Website: www.Temeculacalifornia.com Budget 2012• EVENT EXPENSES 13 Hot Summer July 6 -August 31, 2012 Nights Advertising 14750 Entertainment 26120 Facilities 2000 expenses 380 event total 43250 06 -Oct Quilt Show permits 300 Advertising 1000 rentals 750 event total 2050 November 23 -Jan 1 WINTERFEST Advertising 8400 Santa Arrives Nov 23 Facilities/rentals 1500 Weekends thru Dece 15 Entertainment 9000 ICE RINK NEW YEARS santa pictures/photo cards 1500 candy canes 300 rink flyer decor and paint EVENT TOTAL 750 21450 Facilities/rentals 2250 Entertainment 7050 grape EVENT TOTAL 9300 March 16 & 17, 2013 Bluegrass Festival Advertising 3250 Facilities/outdoor 6250 Facilities/city owned Hotels for entertainers 2200 Expenses, office, postage, etc 100 Hospitality/ice,water 100 Entertainers 16375 Security 1000 EVENT TOTAL 29275 May 18 & 19, 2013 Western Days Advertising 2250 Regisration chili c 350 Entertainment 3000 Facilities 2250 Chili Cookoff Prizes (supplies, cups, spoons, napkins, saniwipes, water for cookoff- taken from facilities budget) EVENT TOTAL 7850 Streetpainting 3630 Festival Advertising 3630 June 24-26, 2013 Entertainment 1350 Supplies, chalk, water, paper towels 1500 Facilities 1770 8250 EVENT TOTAL Item No. 20 Approvals City Attorney Director of Finance City Manager TEMECULA COMMUNITY SERVICES DISTRICT AGENDA REPORT TO: General Manager/Board of Directors FROM: Greg Butler, Director of Public Works/City Engineer DATE: June 26, 2012 SUBJECT: Second Amendment to the Window Cleaning Services Agreement with Clear Image Window Cleaning for Fiscal Year 2012-13 PREPARED BY: Jerzy Kanigowski, Facility Services Manager RECOMMENDATION: Approve the Second Amendment with Clear Image Window Cleaning for routine window cleaning maintenance services in the amount of $20,000 for Fiscal Year 2012-13. BACKGROUND: In June of 2010, the General Manager approved a $30,000 agreement with Clear Image Window Cleaning to provide routine window cleaning services for City facilities. The original agreement includes provisions that allow the term of the agreement to be extended four additional one-year terms. In May of 2011 the Board approved the first of these annual extensions and increased the scope of work by $30,000. Clear Image has continued to provide excellent window cleaning services, thus staff is recommending another one-year extension and an increase of $20,000 in scope of work, to facilitate ongoing window cleaning services. FISCAL IMPACT: Adequate funds will be availab'e in the Public Works Department, Facility Maintenance Division budget, upon approval of the Fiscal Year 2012-13 operating budget. ATTACHMENTS: Second Amendment SECOND AMENDMENT TO AGREEMENT BETWEEN TEMECULA COMMUNITY SERVICES DISTRICT AND CLEAR IMAGE WINDOW CLEANING FOR WINDOW CLEANING SERVICES THIS SECOND AMENDMENT is made and entered into as of June 26, 2012 by and between the Temecula Community Services District, a community services district (hereinafter referred to as "City"), and Mike Buechler, dlbls Clear Image Window Cleaning (hereinafter referred to as "Contractor"). In consideration of the mutual covenants and conditions set forth herein, the parties agree as follows: 1. This Amendment is made with the respect to the following facts and purposes: a. On June 16, 2010, the City and Contractor entered into that certain Agreement entitled "Agreement for Window Cleaning Services", in the amount of $30,000. b. On May 24, 2011, the City and Consultant entered into the First Amendment to that certain Agreement entitled "Agreement for Window Cleaning Services," to add scope of work, extend the term of the agreement to June 30, 2012, increase the payment in the amount of $30,000. c. The parties now desire to add scope of work, extend the term of the agreement to June 30, 2013, increase the payment in the amount of $20,000, and to amend the Agreement as set forth in this Amendment. follows: 2. Section 1 of the Agreement entitled "TERM" is hereby amended to read as This Agreement shall remain and continue in effect until tasks herein are completed, but in no event later than June 30, 2013 unless sooner terminated pursuant to the provisions of this Agreement. 3. Section 3 of the Agreement entitled "PAYMENT" at paragraph "a" is hereby amended to read as follows: The City agrees to pay Contractor monthly, in accordance with the payment rates and schedules and terms set forth in Exhibit B, Payment Rates and Schedule, attached hereto and incorporated herein by this reference as though set forth in full, based upon actual time spent on the above tasks. Any terms in Exhibit B, other than the payment rates and schedule of payment, are null and void. The Second Amendment amount shall not exceed Twenty Thousand Dollars ($20,000) for additional window cleaning services, for a total Agreement amount of Eighty Thousand Dollars ($80,000). 4. Section 21 of the Agreement entitled "WRITTEN NOTICE" is hereby amended to read as follows: "Any notices which either party may desire to give to the other party under this Agreement must be in writing and may be given either by (i) 1 personal service, (ii) delivery by a reputable document delivery service, such as but not limited to, Federal Express, that provides a receipt showing date and time of delivery, or (iii) mailing in the United States Mail, certified mail, postage prepaid, return receipt requested, addressed to the address of the party as set forth below or at any other address as that party may later designate by Notice. Notice shall be effective upon delivery to the addresses specified below or on the third business day following deposit with the document delivery service or United States Mail as provided above. Mailing Address: City of Temecula Attn: General Manager P.O. Box 9033 Temecula, CA 92589-9033 Use this Address for a Delivery Service: City of Temecula or Hand -Deliveries ONLY Attn: General Manager 41000 Main Street Temecula, CA 92590 5. Exhibit "B" to the Agreement is hereby amended by adding thereto the items set forth on Attachment "A" to this Amendment, which is attached hereto and incorporated herein as though set forth in full. 6. Except for the changes specifically set forth herein, all other terms and conditions of the Agreement shall remain in full force and effect. 2 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed the day and year first above written. TEMECULA COMMUNITY SERVICES Mike Buechler, d/b/a Clear Image Window DISTRICT Cleaning (Two Signatures of corporate officers required unless corporate documents authorize only one person to sign the agreement on behalf of the corporation.) By: By: Jeff Comerchero, TCSD President Mike Buechler, Owner ATTEST: By: By: Susan W. Jones, MMC, City Clerk/District Secretary APPROVED AS TO FORM: By. Peter M. Thorson, City Attorney CONSULTANT Clear Image Window Cleaning Contact Person: Mike Buechler P.O. Box 966 Murrieta, CA 92564 Phone Number: (951) 698-8618 PM Initials: Date: 3 ATTACHMENT A Attached hereto and incorporated herein is the additional scope of work and associated cost as provided by the Contractor. EXHIBIT "B" PAYMENT RATES AND SCHEDULE • Exterior & Interior Windows Cleaning at the Old Town Theater $150.00 per visit • Exterior Window Cleaning at the Old Town Theater $235.00 per visit • Exterior Window Cleaning at the TVM $199.00 per visit • Exterior Window Cleaning& Screens Washed at the MPSC $275.00 per visit • Exterior Window Cleaning & Canopy Glass at the City Hall $420.00 per visit • Exterior Window Cleaning at the TCC $198.00 per visit • Exterior & Interior Window Cleaning at the CRC $665.00 per visit • Exterior & Interior Window Cleaning at the Library $2,485.00 per visit • Exterior & Interior Window Cleaning at the FOC $300.00 per visit • Exterior Window Cleaning at the FOC $198.00 per visit • Exterior Window Cleaning at the MF $125.00 per visit • Exterior & Interior Window Cleaning at the Civic Center $3,827.00 per visit /// 4 Item No. 21 Approvals City Attorney Director of Finance City Manager TEMECULA COMMUNITY SERVICES DISTRICT AGENDA REPORT TO: General Manager/Board of Directors FROM: Greg Butler, Director of Public Works/City Engineer DATE: June 26, 2012 SUBJECT: Fifth Amendment with Tremco/Weatherproofing Technologies, Inc. PREPARED BY: Jerzy Kanigowski, Facility Services Manager Bruce Wedeking, Maintenance Supervisor RECOMMENDATION: Approve the Fifth Amendment with Tremco/Weatherproofing Technologies, Inc. to extend the term of the agreement to September 30, 2012, and make minor changes to the agreement. BACKGROUND: In August of 2007, the Board of Directors approved an agreement with Tremco/Weatherproofing Technologies, Inc. to maintain and repair roofs on City facilities. As allowed per the original agreement, the scope of work and term of the agreement has been extended and amended annually 4 times to provide continuing ongoing roof maintenance services through fiscal year 2011-2012, which ends June 30, 2012. The Wedding Chapel and Sam Hicks Park Restroom wood shake roofs have deteriorated to a point that replacement is required. A quote and purchase order for this repair has been approved with Tremco. Due to various events scheduled at the Chapel, this work cannot be started until the last week in June, with completion about mid-July. Because the existing contract with Tremco ends June 30, 2012, a 90 -day extension to their contract is necessary to insure the contract provisions remain in place until completion of this work. Funds for this work have been allocated from the 2011-12 maintenance budget accounts and will be included the fiscal year 2011-2012 expenditures. FISCAL IMPACT: There is no fiscal impact as a result of the term extension. ATTACHMENTS: Fifth Amendment FIFTH AMENDMENT TO AGREEMENT BETWEEN TEMECULA COMMUNITY SERVICES DISTRICT AND TREMCOIWEATHERPROOFING TECHNOLOGIES, INC. FOR ROOF PREVENTIVE MAINTENANCE SERVICES THIS FIFTH AMENDMENT is made and entered into as of June 26, 2012 by and between the Temecula Community Services District, a community services district (hereinafter referred to as "District"), and TremcolWeatherproofing Technologies, Inc., a Corporation (hereinafter referred to as "Contractor"). In consideration of the mutual covenants and conditions set forth herein, the parties agree as follows: 1. This Amendment is made with the respect to the following facts and purposes: a. On August 14, 2007 the District and Contractor entered into that certain Agreement entitled "Agreement for Roof Preventive Maintenance Services", in the amount of $50,000. b. On June 30, 2008, the District and Consultant entered into the First Amendment to that certain Agreement entitled "Agreement for Roof Preventive Maintenance Services," to add scope of work, extend the term of the agreement to June 30, 2009, increase the payment in the amount of $29,800. c. On May 12, 2009, the District and Consultant entered into the Second Amendment to that certain Agreement entitled "Agreement for Roof Preventive Maintenance Services," to add scope of work, extend the term of the agreement to June 30, 2010, increase the payment in the amount of $27,416. d. On July 13, 2010 the District and Consultant entered into the Third Amendment to that certain Agreement entitled "Agreement for Roof Preventive Maintenance Services," to add scope of work, extend the term of the agreement to June 30, 2011, increase the payment in the amount of $27,416. e. On May 10, 2011, the District and Consultant entered into the Fourth Amendment to that certain Agreement entitled "Agreement for Roof Preventive Maintenance Services," to add scope of work, extend the term of the agreement to June 30, 2012, increase the payment in the amount of $27,416. f. The parties now desire to extend the term of the agreement to September 30, 2012 and to amend the Agreement as set forth in this Amendment. follows: 2. Section 1 of the Agreement entitled "TERM" is hereby amended to read as This Agreement shall remain and continue in effect until tasks herein are completed, but in no event later than September 30, 2012 unless sooner terminated pursuant to the provisions of this Ag ree me nt. 1 3. Section 23 of the Agreement entitled "WRITTEN NOTICE" is hereby amended to read as follows: "Any notices which either party may desire to give to the other party under this Agreement must be in writing and may be given either by (i) personal service, (ii) delivery by a reputable document delivery service, such as but not limited to, Federal Express, that provides a receipt showing date and time of delivery, or (iii) mailing in the United States Mail, certified mail, postage prepaid, return receipt requested, addressed to the address of the party as set forth below or at any other address as that party may later designate by Notice. Notice shall be effective upon delivery to the addresses specified below or on the third business day following deposit with the document delivery service or United States Mail as provided above. Mailing Address: City of Temecula Attn: General Manager P.O. Box 9033 Temecula, CA 92589-9033 Use this Address for a Delivery Service: Community Services District of the or Hand -Deliveries ONLY City of Temecula Attn: General Manager 41000 Main Street Temecula, CA 92590 4. Except for the changes specifically set forth herein, all other terms and conditions of the Agreement shall remain in full force and effect. 2 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed the day and year first above written. TEMECULA COMMUNITY SERVICES Tremco/Weatherproofing Technologies, Inc. DISTRICT (Two Signatures of corporate officers required unless corporate documents authorize only one person to sign the agreement on behalf of the corporation.) By: By: Jeff Comerchero. TCSD President Deryl W. Kratzer, President ATTEST: By: By: Susan W. Jones, MMC, City Michael J. Drumm, Treasurer Clerk/District Secretary APPROVED AS TO FORM: By: Peter M. Thorson, City Attorney CONSULTANT Tremco/Weatherproofing Technologies, Inc. Contact Person: Ryan Totsma 3735 Green Rd. Beachwood, OH 44122 Phone Number: (800) 852-6013 Fax Number: (951) 736-5662 www.tremcoroofing.com 3 PM Initials: n g Date: U Item No. 22 Approvals City Attorney Director of Finance City Manager TEMECULA COMMUNITY SERVICES DISTRICT AGENDA REPORT TO: General Manager/Board of Directors FROM: Genie Wilson, Director of Finance DATE: June 26, 2012 SUBJECT. Amendment to various Community Services District Fees PREPARED BY: Rudy J. Graciano, Revenue Manager RECOMMENDATION: Adopt a resolution entitled: RESOLUTION NO. CSD 12- A RESOLUTION OF THE BOARD OF DIRECTORS OF THE TEMECULA COMMUNITY SERVICES DISTRICT OF THE CITY OF TEMECULA AMENDING CERTAIN TCSD RESOLUTIONS ESTABLISHING VARIOUS COMMUNITY SERVICES DISTRICT FEES BACKGROUND: Staff has performed ongoing review of the Community Service District programs. This review consisted of evaluating the costs of certain programs and approved fees, and evaluating whether these approved fees are set at the appropriate levels in order to recover the costs associated with providing the programs. Staff also reviewed approved fee schedules to ensure consistency. During the review it was concluded admission fees to the Children's Museum should be adjusted for ages 3 and older from $4.50 per patron to $5.00. Likewise, admissions for groups 25 or more should be adjusted from $3.50 per patron to $4.00. These rate adjustments would be effective for admissions beginning July 1, 2012. Fee schedules for various facilities include a per hour rate for City staff. This rate varies by facility, but in each instance, the hourly rate is less than the actual hourly staff cost. It is recommended that the fee schedules be amended to recover the total costs associated with providing the services by charging actual hourly staff costs, if staff is needed for a facility rental. The actual facility rental hourly rates will not be changed. Because a fully burdened hourly rate depends on salary, benefits, and indirect costs, which change over time, an hourly rate for a particular service may also change over time. For this reason, hourly rates should be calculated and applied to the time necessary to perform services. This new methodology for calculating hourly rates would be effective July 1, 2012. Currently, a cancellation fee of 25% of the deposit fee is assessed for cancellation of a facility made with 72 hours of the scheduled use date. It is recommended the cancellation period be increased to ten days prior to the scheduled use date to allow for sufficient lead team for the subsequent rebooking of the facility. The new cancellation period would be effective for bookings on or after July 1, 2012. The cancellation fee of 25% would remain unchanged. Currently, cleaning/security deposits range from $150 - $200 at the various facilities. In order to maintain consistency, it is recommended that all cleaning/security deposits be set at $200. The new deposit amount would be effective for bookings on or after July 1, 2012. FISCAL IMPACT: The above fee adjustments are expected to enhance cost recovery of programs and services by approximately $16,000. ATTACHMENTS: Resolution No. CSD 12- RESOLUTION NO. CSD 12- A RESOLUTION OF THE BOARD OF DIRECTORS OF THE TEMECULA COMMUNITY SERVICES DISTRICT OF THE CITY OF TEMECULA AMENDING CERTAIN TCSD RESOLUTIONS ESTABLISHING VARIOUS COMMUNITY SERVICE DISTRICT FEES THE BOARD OF DIRECTORS OF THE TEMECULA COMMUNITY SERVICES DISTRICT OF THE CITY OF TEMECULA DOES HEREBY RESOLVE AS FOLLOWS: Section 1. This resolution is adopted in recognition of the following facts and circumstances: A. The Temecula Community Services District desires to enhance the cost recovery of its programs. B. It is necessary to establish fees that will defray all costs associated with providing the required staffing, utility costs, maintenance and other expenses of certain Community District Services Programs. C. At times, it may be necessary to reevaluate programs and established fees, making necessary revisions, to ensure appropriate cost recovery is maintained. D. Because hourly rates are dependent on costs that change over time, hourly rates may be calculated and updated using the salary, fringe benefit and indirect costs incurred at the time the service is provided. Section 2. Resolution 04-57 approving the fee schedule for Parks, Recreation, and Community Services Programs and Activities is amended for the following fees: • Children's Museum (3 and Older) $5.00 per patron • Children's Museum (Groups 25 or More) $4.00 per patron • Cancellation Deadline 10 Day Cancellation Notification • Cleaning/Security Deposit $200 Section 3. Resolution No. TCSD 04-57 is further amended to provide for the hourly rates charges as described in this Section 3. For those services provided that are not subject to a specific fee, the fee for such services shall be the applicable hourly rate for services rendered to the customer in order to recover the costs associated with performing the services. Additionally, if the amount of time in providing a service for a specified fee exceeds the estimated time on which the applicable fee was based, then the difference in time will be charged at the applicable hourly rate. The General Manager shall approve, in writing, the applicable hourly rates for specific positions based on salary, fringe benefits, and indirect costs. Section 4. Resolution Nos. TCSD 04-57, 09-02, 11-04, and 11-05 are amended to provide that the hourly rate for the staffing fees as described in these resolutions shall be set by the Executive Director pursuant to this section. The General Manager shall approve, in writing, the applicable hourly rates for specific positions based on salary, fringe benefits, and indirect costs. Section 5. The City Clerk shall certify to the passage and adoption of the Resolution with fee schedule effective July 1, 2012. PASSED, APPROVED, AND ADOPTED by the Board of Directors of the Temecula Community Services District of the City of Temecula this 26th day of June, 2012. Jeff Comerchero, President ATTEST: Susan W. Jones, MMC City Clerk/Board Secretary [SEAL] STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ) ss CITY OF TEMECULA ) I, Susan W. Jones, MMC, City Clerk/Board Secretary of the Temecula Community Services District of the City of Temecula, do hereby certify that the foregoing Resolution No. CSD 12- was duly and regularly adopted by the Board of Directors of the Temecula Community Services District of the City of Temecula at a meeting thereof held on the 26th day of June , 2012, by the following vote: AYES: BOARD MEMBERS: NOES: BOARD MEMBERS: ABSENT: BOARD MEMBERS: ABSTAIN: BOARD MEMBERS: Susan W. Jones, MMC City Clerk/Board Secretary TEMECULA COMMUNITY SERVICES DISTRICT PUBLIC HEARING Item No. 23 Approvals City Attorney Director of Finance City Manager TEMECULA COMMUNITY SERVICES DISTRICT AGENDA REPORT TO: General Manager/Board of Directors FROM: Robert C. Johnson, General Manager DATE: June 26, 2012 SUBJECT: Adoption of the Fiscal Year 2012-13 TCSD Annual Operating Budget PREPARED BY: Genie Wilson, Director of Finance Heidi Schrader, Senior Management Analyst RECOMMENDATION: Adopt a resolution entitled: RESOLUTION NO. CSD 12- A RESOLUTION OF THE BOARD OF DIRECTORS OF THE TEMECULA COMMUNITY SERVICES DISTRICT OF THE CITY OF TEMECULA ADOPTING THE FISCAL YEAR 2012-13 ANNUAL OPERATING BUDGET AND ESTABLISHING CONTROLS ON CHANGES IN APPROPRIATIONS BACKGROUND: The proposed fiscal year 2012-13 Temecula Community Services District (TCSD) Annual Operating Budget includes the operation and maintenance of district - wide parks and recreation facilities. Rates and charges are also established for residential street lighting, slope maintenance, recycling and refuse collection, and emergency road maintenance. On May 23, 2012; the Board of Directors and City Council held a workshop to review and discuss the proposed TCSD operating budgets. At that time, the Board of Directors and City Council did not request any fiscal modifications to the TCSD budget. TEMECULA COMMUNITY SERVICES DISTRICT (TCSD) BUDGET OVERVIEW: TCSD Revenues: Overall, there is a $3,045,678, or 14.5% decrease in revenues projected for TCSD. The fiscal year 2012-13 revenue estimate for TCSD is $17,888,863 and includes: Citywide Operations: $1,872,660 in Special Tax was shifted to a cost center in the General Fund to offset the cost of parks maintenance and arterial streetlight maintenance costs which were brought to the General Fund as part of a Departmental restructuring. There is also a reduction of $2,499,147 in Recreation Funding from the General Fund (formerly called REST) as a result of restructuring Old Town maintenance, parks maintenance, and arterial streetlight maintenance under the General Fund. There is additional revenue of $439,178 associated with programming for a new Fitness Facility in Margarita Park (YMCA facility). It is anticipated that the revenues from this facility will fully offset the operating costs in future years, although a subsidy is required in fiscal year 2012-13 in order to get the program started. This results in a total fiscal year 2012-13 projected revenue of $7,885,512. Service Level B — Residential Street Lighting: This service level includes operational, administrative, maintenance and utility costs of residential street lights. Service Level B includes only those parcels within residential subdivisions that receive residential street lighting services. The proposed rate of $25.68 per property owner has not been increased from last fiscal year. $293,365 of the total Service Level B revenue consists of Service Level B Funding from the General Fund (formerly called R.E.S.T.). There is a $2,160 revenue decrease due to moving Street Lighting Fees Revenue to the General Fund to offset streetlight maintenance costs which are now budgeted in the General Fund. There is $934,749 in revenue projected for Service Level B. Service Level C — Landscape / Slope Maintenance: This service level includes operational, administrative, maintenance and utility costs for all perimeter landscaping and slope maintenance areas. Service Level C assesses only those parcels within residential subdivisions receiving TCSD perimeter landscaping and slope maintenance and are separated into 32 zones. The rate levels for Zones 6, 29, 31 and 32 are subject to a Consumer Price Index -Urban Consumers (CPI -U) annual inflator of 2.2% while all other rate levels will not increase from last fiscal year. Zone 30 will not be assessed in the future. The property owners for Zone 30 have elected to keep the landscaping responsibilities with the Homeowner's Association (HOA). Zones 31 and 32 will not be assessed during fiscal year 2012-13 due to construction delays. There is a reduction in revenue of $1,626, which is primarily due to a reduction in investment interest. There is $1,588,321 in revenue projected for Service Level C. Service Level D — Refuse and Recycling: This service level includes operational and administrative costs of the recycling and refuse collection services for all residential households. For fiscal year 2012-13 the rate will be $237.28 which is a $14.24 annual increase from last fiscal year. The increase is due to a Consumer Price Index -Urban Consumers (CPI -U for Los Angeles -Riverside -Orange County, percentage change annual average percentage change from 2010 to 2011) increase of 2.67% and a Diesel Fuel Component Index (DFCI) increase of 35.81%. Per our Franchise Agreement, the CPI, DFCI, and changes to the land -fill tipping fee will cause our Service Level D rate and charge to change. This plus an increase in the number of parcels to be levied has led to an anticipated increase of $474,077 in assessments. There is $6,489,464in revenue projected for Service Level D. Service Level R — Emergency Unpaved Road Maintenance: This service level includes operational, administrative, construction and maintenance costs for certain unpaved roads that become inaccessible after inclement weather. Zone R-1 provides service in the Nicolas/Liefer Road area. The maximum rate that can be charged for Zone R-1 for an improved parcel is $115.26, and for an unimproved parcel is $57.62. For fiscal year 2012-13 the maximum assessment will be charged in order to provide the services as needed. There is a slight decrease in revenues of $40 due to a reduction in anticipated investment interest. There is $5,532 in revenue projected for Service Level R. Service Level L — Lake Park Maintenance: This service level includes operational, administrative, and maintenance costs for the Lake Park in the Harveston Development. There is a slight increase of $1,956 due to an increase in the numbers of parcels to be assessed. There is $232,452 in revenue projected for Service Level L. Library: There is a $328,821 increase in revenue due to an increase in the funding from the General Fund. This is due to utilizing excess Library fund balance in the previous fiscal years to offset expenditures. The total fiscal year 2012-13 Library Funding from the General Fund is $604,253. The total revenue projected for the Library fund is $752,833. TCSD Expenditures: The proposed budget for all Community Services District programs reflects a $7,285,975, or 27.9% decrease in total expenditures from the current year budget. The total proposed fiscal year 2012-13 expenditure budget is $18,865,418. A summary of significant items is as follows: City -Wide Operations: Due to a functional reorganization, expenditures totaling approximately $4.6 million related to Parks Maintenance, arterial street light maintenance, and maintenance of Old Town have been moved from Community Services to the General Fund. In addition, there is a $149,906 reduction in salary and expenditures due to moving Human Services programs related to employment opportunities for young adults to the Economic Development Department under the General Fund. This is offset slightly by the addition of a new fitness program that is being developed as a result of programming for a fitness facility on Margarita Road. This facility will require a $155,737 subsidy as the program is implemented, although it is anticipated that it will be fully cost recoverable in the future. This results in total fiscal year 2012-13 projected expenditures of $8,254,130. Service Level B — Residential Street Lighting: There is a $9,690 expenditure increase due to an anticipated increase in electricity costs combined with 53 new neighborhood streetlights. There is $968,420 in expenditures projected for Service Level B. Service Level C — Landscape / Slope Maintenance: There is projected available fund balance of approximately $447,047 which is programmed to be used for rehabilitation and tree trimming within the respective zones. There is $2,035,368 in expenditures projected for Service Level C. Service Level D — Refuse and Recycling: There is an anticipated increase of $295,805 in waste hauling costs from CR&R. There is $6,483,606 in expenditures projected for Service Level D. Service Level R — Emergency Unpaved Road Maintenance: Expenditures for Service Level R are anticipated to remain the same. It is anticipated that there will be approximately $8,000 in expenditure savings for fiscal year 2011-12 due to a mild winter which is being reprogrammed for fiscal year 2012-13. There is $10,150 in expenditures projected for Service Level R. Service Level L — Lake Park Maintenance: There is a decrease of $24,086 due to reorganization of personnel. There is $238,264 in expenditures projected for Service Level L. Library: There is a $99,810 increase due to replacing the patron computers at the Library facility. This fund also includes $180,000 in contract costs which pays for a portion of staffing services at the Temecula Public Library. The remainder of the services is funded through the Library Tax Credit which is collected by the County of Riverside for the City of Temecula. There is $862,480 in expenditures projected for the Library. Summer Youth Employment: In previous years, this program was funded with a Federal Grant administered by the County of Riverside. The City did not receive a grant this year, but will be utilizing $13,000 of fund balance to hire a few participants and maintain this valuable program. There is $13,000 in expenditures projected for the Summer Youth Employment fund. TCSD Fund Balance: Available fund balance has been used over the past several fiscal years to fund ongoing operations and maintenance costs. The proposed fiscal year 2012-13 budget continues to utilize surplus fund balance in the following amounts: Citywide Operations $368,618 Service Level "B" $33,671 Service Level "C" $447,047 Service Level "R" $4,618 Service Level "L" $5,812 Library $109,647 Summer Youth Employment $13,000 FISCAL IMPACT: The services provided by the Temecula Community Services District are funded by a portion of the Special Tax that was approved by the voters as Measure C on March 1997, the Recreation funding contribution from the City's General Fund, user fees and the rates and charges assessed to property owners were approved during a Public Hearing held on June 12, 2012. ATTACHMENTS: 1. Resolution No. CSD 12- 2. Fiscal Year 2012-13 Proposed Annual Operating Budget- TCSD RESOLUTION NO. CSD 12- A RESOLUTION OF THE BOARD OF DIRECTORS OF THE TEMECULA COMMUNITY SERVICES DISTRICT OF THE CITY OF TEMECULA ADOPTING THE FISCAL YEAR 2012-13 ANNUAL OPERATING BUDGET AND ESTABLISHING CONTROLS ON CHANGES IN APPROPRIATIONS THE BOARD OF DIRECTORS OF THE TEMECULA COMMUNITY SERVICES DISTRICT OF THE CITY OF TEMECULA DOES HEREBY RESOLVE AS FOLLOWS: Section 1. That the Fiscal Year 2012-13 Temecula Community Services District (TCSD) operating budget is hereby adopted. Section 2. That the following controls are hereby placed on the use and transfers of budget appropriations: A. No expenditure of funds shall be made unless there is an unencumbered appropriation available to cover the expenditure. B. The Department Director may prepare a transfer of appropriations within departmental budget accounts, with the approval of the General Manager. C. The Board of Directors must authorize transfers (appropriations) of funds from the Undesignated Fund Balance and transfers between departmental budget accounts. D. The Board of Directors must authorize any increase in regular personnel positions above the level indicated in the final budget. The General Manager may authorize the hiring of temporary or part-time staff as necessary within the limits imposed by the controls listed above. E. The General Manager may authorize expenditures of funds in amounts up to $30,000. Any expenditure of funds in excess of $30,000 requires Board of Directors action. F. The General Manager may authorize Public Works contracts in amounts up to $30,000. Any expenditures of Public Works funds in excess of $30,000 require Board of Directors action, except that the General Manager may approve change orders on Public Works contracts approved by the Board in amounts up to the project contingency established by the Board. G. Pursuant to Section 3.28.130 of the Municipal Code, the Executive Director may authorize purchases of supplies and equipment in amounts up to $30,000. Any purchases of supplies and equipment in excess of $30,000 shall be awarded to the lowest responsible bidder pursuant to formal bid procedures and require City Council action, except that the Executive Director may approve change orders on purchases of supplies and equipment approved by the Board in amounts up to the contingency established by Board. H. Pursuant to Section 3.28.250 of the Municipal Code, purchases of supplies and equipment of an estimated value of $30,000 or less, may be made by the purchasing agent in the open market pursuant to the procedure prescribed in Sections 3.28.260 through 3.28.280 and without observing the procedure prescribed in Sections 3.28.130 through 3.28.240; provided, however, that all bidding may be dispensed with for purchases of supplies and equipment having a total estimated value of $5,000 or less. I. Appropriations and Revenue Estimates for grant funded programs for Fiscal Year 2011-12 which have not been expended or encumbered, are hereby carried over for the applicable grant program to the Fiscal Year 2012-13. Section 3. The Chief Financial Officer is authorized to make temporary short term interfund loans between appropriate funds in order to cover short term cash needs caused by cash flow timing differences. These interfund loans must have an identified repayment source. Section 4. Outstanding encumbrances shown on the District books at June 30, 2012, are hereby appropriated for such contracts or obligations for Fiscal Year 2012-13. Section 5. There are numerous occasions when small dollar valued purchases must be made for or on behalf of the District; and it is appropriate that a petty cash fund be used to provide for the purchase of these smaller dollar valued items; now, therefore, the Board of Directors of the Temecula Community Services District of the City of Temecula does hereby resolve, determine, and order as follows: A. There is hereby established a renewable petty cash fund to be maintained in the Accounting and Purchasing Department. B. The imprest balance amount of the petty cash fund shall be $3,000. C. Vouchers, receipts, or other evidence of payment shall be required before reimbursement shall be made from said petty cash fund, in such form as shall be required by Chief Financial Officer. Section 6. The Board Secretary shall certify adoption of the resolution. PASSED, APPROVED, AND ADOPTED by the Board of Directors of the Temecula Community Services District of the City of Temecula this 26th day of June, 2012. Jeff Comerchero, President ATTEST: Susan W. Jones, MMC City Clerk/Board Secretary [SEAL] STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ) ss CITY OF TEMECULA ) I, Susan W. Jones, MMC, City Clerk/Board Secretary of the Temecula Community Services District of the City of Temecula, do hereby certify that the foregoing Resolution No. CSD 12- was duly and regularly adopted by the Board of Directors of the Temecula Community Services District of the City of Temecula at a meeting thereof held on the 26th day of June, 2012, by the following vote: AYES: BOARD MEMBERS: NOES: BOARD MEMBERS: ABSENT: BOARD MEMBERS: ABSTAIN: BOARD MEMBERS: Susan W. Jones, MMC City ClerklBoard Secretary CITY OF TEMECULA Annual Operating Budget Fiscal Year 2012-13 TABLE OF CONTENTS TEMECULA COMMUNITY SERVICES DISTRICT (TCSD) TCSD BUDGET SUMMARIES: Summary of Revenues, Expenditures and Change in Fund Balances 3 Revenue Detail — Temecula Community Services District 9 Revenues by Source — Temecula Community Services District 15 Expenditure Summary by Category — Temecula Community Services District 19 TCSD OVERVIEW 21 11111111111111111111111111111 2 CITY OF TEMECULA Annual Operating Budget Fiscal Year 2012-13 SUMMARY OF REVENUES, EXPENDITURES, AND CHANGE IN FUND BALANCES TEMECULA COMMUNITY SERVICES DISTRICT 2010-11 2011-12 2012-13 Proposed % Audited Revised Proposed Increase Increase Actuals Budget Budget (Decrease) (Decrease) Total Revenues by Fund: Citywide Operations 11,114,043 11,732,178 7,885,512 (3,846,666) -32.8% Service Level B 971,871 936,949 934,749 (2,200) -0.2% Service LevelC 1,613,502 1,589,947 1,588,321 (1,626) -0.1% Service Level D 5,898,656 6,015,387 6,489,464 474,077 7.9% Service Level R 1,312 5,572 5,532 (40) -0.7% Service Level L 238,820 230,496 232,452 1,956 0.8% Library 250,758 424,012 752,833 328,821 77.5% Summer Youth Employment 195,249 - - 0.0% Debt Service 245 0.0% Total Revenues 20,284,456 20,934,541 17,888,863 (3,045,678) -14.5% Total Expenditures by Fund: Citywide Operations 10,791,523 11,856,062 8,254,130 (3,601,932) -30.4% Service Level B 948,789 958,730 968,420 9,690 1.0% Service LevelC 1,157,377 1,782,259 2,035,368 253,109 14.2% Service Level D 5,844,331 6,183,025 6,483,606 300,581 4.9% Service Level R 6,325 10,150 10,150 - 0.0% Service Level L 227,888 262,350 238,264 (24,086) -9.2% Library 634,778 762,670 862,480 99,810 13.1% Summer Youth Employment 195,289 4,000 13,000 9,000 225.0% Debt Service 492,698 4,332,147 (4,332,147) -100.0% Total Expenditures 20,298,998 26,151,393 18,865,418 (7,285,975) -27.9% Excess of Revenues Over (Under) Expenditures Operating Transfers In (Out): Citywide Operations / Debt Service Citywide Operations / Summer Youth Citywide Operations /Capital Improvement Summer Youth /Citywide Operations Debt Service /Citywide Operations Debt Service/2011 Financing Lease Total Operating Transfers: (14,542) (5,216,852) (976,555) 4,240,297 -81.3% (489,653) (401,979) (4,000) (192,000) 4,000 489,653 401,979 3,929,991 401,979 -100.0% 4,000 -100.0% 192,000 -100.0% (4,000) -100.0% (401,979) -100.0% (3,929,991) -100.0% 3,737,991 (3,737,991) Excess of Revenues Over (Under) Expenditures and Operating Transfers Out (14,542) (1,478,861) (976,555) 4,432,297 13.3% Fund Balances, Beg. of Year 3,556,607 3,542,065 2,071,204 Fund Balances, End of Year 3,542,065 2,063,204 1,094,649 *FY 2012-13 Beginning FB Increased by $8,000 due to anticipated savings in FY 2011-12 Service Level R 3 CITY OF TEMECULA Annual Operating Budget Fiscal Year 2012-13 SUMMARY OF REVENUES, EXPENDITURES, AND CHANGE IN FUND BALANCES CITYWIDE OPERATIONS 2010-11 2011-12 2012-13 Proposed ak Audited Revised Proposed Increase Increase Actuals Budget Budget (Decrease) (Decrease) Total Revenues by Department General Operations 9,084,445 9,488,441 3,623,351 (5,865,090) -61.8% Senior Center 11,154 12,541 183,747 171,206 1365.2% Community Recreation Center 53,358 52,326 364,138 311,812 595.9% Recreation 873,484 772,900 807,586 34,686 4.5% Temecula Community Center 30,537 31,785 221,493 189,708 596.8% Temecula History Museum 12,054 9,525 81,095 71,570 751.4% Aquatics 193,481 178,805 352,936 174,131 97.4% Sports 357,211 313,300 312,530 (770) -0.2% Temecula Children's Museum 133,878 130,100 270,191 140,091 107.7% Community Theater 347,849 395,445 686,375 290,930 73.6% Cultural Arts - 147,635 147,635 0.0% Harveston Center 14,259 335,010 327,975 (7,035) -2.1% Civic Center Conference Center 2,333 12,000 16,593 4,593 38.3% Human Services - 50,689 50,689 0.0% YMCA Facility - 439,178 439,178 0.0% 11,114,043 11,732,178 7,885,512 (3,846,666) -32.8% Total Expenditures by Department General Operations 6,118,113 6,342,297 1,656,717 (4,685,580) -73.9% Senior Center 257,972 308,738 374,397 65,659 21.3% Community Recreation Center 497,215 554,119 677,844 123,725 22.3% Recreation 986,527 964,263 861,088 (103,175) -10.7% Temecula Community Center 261,914 192,848 285,842 92,994 48.2% Temecula History Museum 228,971 200,180 261,069 60,889 30.4% Aquatics 574,162 641,999 632,410 (9,589) -1.5% Sports 326,141 307,729 423,746 116,017 37.7% Temecula Children's Museum 321,509 351,972 349,481 (2,491) -0.7% Community Theater 1,026,486 1,137,486 1,148,841 11,355 1.0% Cultural Arts 70,513 349,796 449,866 100,070 28.6% Old Town Maintenance 93,348 132,937 (132,937) -100.0% Harveston Center 28,652 324,098 327,880 3,782 1.2% Civic Center Conference Center 47,600 47,835 235 0.5% Human Services - 162,199 162,199 0.0% YMCA Facility - 594,915 594,915 0.0% 10,791,523 11,856,062 8,254,130 (3,601,932) -30.4% Excess of Revenues Over (Under) Expenditures 322,520 (123,884) (368,618) (244,734) 197.6% Operating Transfers Out (489,653) (597,979) 597,979 -100.0% Excess of Revenues Over (Under) Expenditures and Operating Transfers Out (167,133) (721,863) (368,618) 353,245 -48.9% Fund Balance, Beg. of Year 1,357,614 1,190,481 468,618 Fund Balance, End of Year 1,190,481 468,618 100,000 4 CITY OF TEMECULA Annual Operating Budget Fiscal Year 2012-13 SUMMARY OF REVENUES, EXPENDITURES, AND CHANGE IN FUND BALANCES SERVICE LEVEL B—Street Lighting 2010-11 2011-12 2012-13 Proposed % Audited Revised Year -to -Date Increase Increase Actuals Budget Actuals (Decrease) (Decrease) Total Revenues 971,871 936,949 934,749 (2,200) -0.2% Total Expenditures 948,789 958,730 968,420 9,690 1.0% Excess of Revenues Over (Under) Expenditures 23,082 (21,781) (33,671) (11,890) 54.6% Fund Balance, Beg. of Year 68,886 91,968 70,187 Fund Balance, End of Year 91,968 70,187 36,516 SERVICE LEVEL C—Landscape / Slope Maintenance 2010-11 2011-12 2012-13 Proposed % Audited Revised Year -to -Date Increase Increase Actuals Budget Actuals (Decrease) (Decrease) Total Revenues 1,613,502 1,589,947 1,588,321 (1,626) -0.1% Total Expenditures 1,157,377 1,782,259 2,035,368 253,109 14.2% Excess of Revenues Over (Under) Expenditures 456,125 (192,312) (447,047) (254,735) 132.5% Fund Balance, Beg. of Year 686,958 1,143,083 950,771 Fund Balance, End of Year 1,143,083 950,771 503,724 5 CITY OF TEMECULA Annual Operating Budget Fiscal Year 2012-13 SUMMARY OF REVENUES, EXPENDITURES, AND CHANGE IN FUND BALANCES SERVICE LEVEL D—Refuse and Recycling 2010-11 2011-12 2012-13 Proposed % Audited Revised Year -to -Date Increase Increase Actuals Budget Actuals (Decrease) (Decrease) Total Revenues 5,898,656 6,015,387 6,489,464 474,077 7.9% Total Expenditures 5,844,331 6,183,025 6,483,606 300,581 4.9% Excess of Revenues Over (Under) Expenditures 54,325 (167,638) 5,858 173,496 -103.5% Fund Balance, Beg. of Year 251,532 305,857 138,219 Fund Balance, End of Year 305,857 138,219 144,077 SERVICE LEVEL R—Street / Road Maintenance Total Revenues Total Expenditures Excess of Revenues Over (Under) Expenditures 2010-11 2011-12 2012-13 Proposed % Audited Revised Year -to -Date Increase Increase Actuals Budget Actuals (Decrease) (Decrease) 1,312 5,572 5,532 (40) -0.7% 6,325 10,150 10,150 - 0.0% (5,013) (4,578) (4,618) (40) 0.9% Fund Balance, Beg. of Year 10,045 5,032 8,454 Fund Balance, End of Year 5,032 454 3,836 *FY 2012-13 Beginning FB Increased by $8,000 due to anticipated savings in FY 2011-12 6 CITY OF TEMECULA Annual Operating Budget Fiscal Year 2012-13 SUMMARY OF REVENUES, EXPENDITURES, AND CHANGE IN FUND BALANCES SERVICE LEVEL L—Lake Park Maintenance 2010-11 2011-12 2012-13 Proposed % Audited Revised Year -to -Date Increase Increase Actuals Budget Actuals (Decrease) (Decrease) Total Revenues 238,820 230,496 232,452 1,956 0.8% Total Expenditures 227,888 262,350 238,264 (24,086) -9.2% Excess of Revenues Over (Under) Expenditures 10,932 (31,854) (5,812) 26,042 -81.8% Fund Balance, Beg. of Year Fund Balance, End of Year 228,308 239,240 207,386 239,240 207,386 201,574 LIBRARY 2010-11 2011-12 2012-13 Proposed ok Audited Revised Year -to -Date Increase Increase Actuals Budget Actuals (Decrease) (Decrease) Total Revenues 250,758 424,012 752,833 328,821 77.5% Total Expenditures 634,778 762,670 862,480 99,810 13.1% Excess of Revenues Over (Under) Expenditures (384,020) (338,658) (109,647) 229,011 -67.6% Fund Balance, Beg. of Year 932,325 548,305 209,647 Fund Balance, End of Year 548,305 209,647 100,000 7 CITY OF TEMECULA Annual Operating Budget Fiscal Year 2012-13 SUMMARY OF REVENUES, EXPENDITURES, AND CHANGE IN FUND BALANCES SUMMER YOUTH EMPLOYMENT PROGRAM 2010-11 2011-12 2012-13 Proposed % Aud ited Revised Year -to -Date Increase Increase Actuals Budget Actuals (Decrease) (Decrease) Total Revenues 195,249 0.0% Total Expenditures 195,289 4,000 13,000 9,000 225.0% Operating Transfer In TCSD Citywide 4,000 (4,000) -100.0% Excess of Revenues Over (Under) Expenditures and Operating Transfer In (40) - (13,000) (13,000) 0.0% Fund Balance, Beg. of Year Fund Balance, End of Year 17,962 17,922 17,922 17,922 17,922 4,922 8 CITY OF TEME CULA Annual Operating Budget Fiscal Year 2012-13 REVENUE DETAIL TEMECULA COMMUNITY SERVICES DISTRICT CITYWIDE FUND DEPT 180 Parks and Recreation 4004 -Special Tax (Measure C) 3,847,346 3,748,631 452,271 (3,296,360) -87.94% Various (40: -Miscellaneous Non Taxable (164) - 0.00% 4062 -Recovery of Prior Year Expense 133,236 0.00% 4065+4545 -Investment Interest 12,236 6,000 5,000 (1,000) -16.67% 4073 -Recreation Funding from General Fund 5,001,304 5,640,227 3,141,080 (2,499,147) -44.31% 4076 -Reimbursements - 200 (200) -100.00% 4077 -Lease Income 43,060 43,463 (43,463) -100.00% 4084 -Reimbursements (CI P) 27,809 25,000 25,000 - 0.00% 4090 -Operating Transfers In - - 0.00% 4104 -Extension of Time 746 0.00% 4107 -Parcel Maps 485 0.00% 4119 -Development Plan 572 - 0.00% 4121 -Major Modification 1,751 - 0.00% 4139 -Condo Tract Map 1,095 0.00% 4151 -Parcel Map Check 323 400 (400) -100.00% '4284 -Median/Park Plan Check 2,202 2,300 (2,300) -100.00% 4291 -Inspectiion Fees -Contract 21,000 (21,000) -100.00% 4360 -Improvement Plan Ck Off -Site 220 220 (220) -100.00% 4370 -Landscape Plan Check 10,405 - 0.00% 4390 -Street Lighting Fees 1,819 1,000 (1,000) -100.00% TOTAL Parks and Recreation 9,084,445 9,488,441 3,623,351 (5,865,090) -61.81% DEPT 181 Senior Center 4004 -Special Tax (Measure C) 102,207 102,207 0.00% 4051 -Donations 400 400 - 0.00% 4980 -Classes/Activities 852 566 566 0.00% 4982 -Contract Classes 66,500 66,500 0.00% 4983 -Transportation 1,692 1,675 1,675 - 0.00% 4986 -Excursions 2,113 2,100 4,600 2,500 119.05% 4990 -Indoor Rentals 6,497 7,800 7,799 (1) -0.01% TOTAL Senior Center 11,154 12,541 183,747 171,206 1365.17% DEPT 182 Community Recreation Center 4004 -Special Tax (Measure C) 185,046 185,046 0.00% 4966 -Open Gym Non Resident 2,450 2,450 0.00% 4980 -Classes/Activities 18,121 16,232 7,542 (8,690) -53.54% 4982 -Contract Classes 133,000 133,000 0.00% 4990 -Indoor Rentals 35,237 36,094 36,100 6 0.02% TOTAL Community Recreation Center 53,358 52,326 364,138 311,812 595.90% DEPT 183 Recreation 4004 -Special Tax (Measure C) 235,070 235,070 0.00% 4070 -Cash Over & Short (8) - 0.00% 4982 -Contracted Classes 712,675 630,000 332,500 (297,500) -47.22% 4984 -Day Camp 112,317 97,200 180,230 83,030 85.42% 4986 -Excursions 1,520 - 0.00% 4989 -Picnic Shelter Rentals 8,894 7,860 7,860 - 0.00% 4992 -Special Events 31,958 30,000 31,325 1,325 4.42% 4995 -High Hopes 1,024 840 - (840) -100.00% 4998 -Skate Park 5,104 7,000 20,601 13,601 194.30% TOTAL Recreation 873,484 772,900 807,586 34,686 4.49% 9 CITY OF TEMECU LA Annual Operating Budget Fiscal Year 2012-13 REVENUE DETAIL TEMECULA COMMUNITY SERVICES DISTRICT CITYWIDE FUND DEPT 184 Temecula Community Center 4004 -Special Tax (Measure C) 78,033 78,033 0.00% 4077 -Pantry Trailer Rental Payment 4,400 0.00% 4977 -After School Program 14,078 20,825 (20,825) -100.00% 4980 -Classes/Activities - 500 (500) -100.00% 4982 -Contracted Classes 133,000 133,000 0.00% 4990 -Indoor Rentals 12,059 10,460 10,460 - 0.00% TOTAL Temecula Community Center 30,537 31,785 221,493 189,708 596.85% DEPT 185 History Museum 4004 -Special Tax (Measure C) 71,270 71,270 0.00% 4980 -Classes/Activities - 370 370 0.00% 4984 -Day Camp 3,936 3,055 3,055 0.00% 4990 -Indoor Rentals 1,080 900 1,200 300 33.33% 4991 -Museum Admissions 7,038 5,200 5,200 0.00% TOTAL History Museum 12,054 9,525 81,095 71,570 751.39% DEPT 186 Aquatics 4004 -Special Tax (Measure C) 172,643 172,643 0.00% 4970 -Swim Lessons 109,924 100,305 100,325 20 0.02% 4971 -Lap Swim 8,595 8,500 11,550 3,050 35.88% 4972 -Public Swim 21,554 20,000 20,000 0.00% 4973 -Family Night Swim 722 1,000 1,000 0.00% 4974 -Pool Rentals 43,051 40,000 40,018 18 0.05% 4976 -Non-resident Swim 9,635 9,000 7,400 (1,600) -17.78% DEPT 187 Sports TOTAL Aquatics 193,481 178,805 352,936 174,131 97.39% 4960 -Adult Softball 89,840 75,600 80,000 4,400 5.82% 4963 -Tournaments 104,967 100,000 94,000 (6,000) -6.00% 4964 -Adult Leagues (non-resident) 6,440 6,250 6,250 0.00% 4965 -Youth Leagues (non-resident) 18,622 17,000 17,000 0.00% 4966 -Open Gym 2,767 1,550 (1,550) -100.00% 4988 -Field Rentals/Lights 126,995 100,000 103,000 3,000 3.00% 4994 -Tennis 2,400 2,400 0.00% 4997 -Sports Concessions 7,580 12,900 9,880 (3,020) -23.41% TOTAL Sports 357,211 313,300 312,530 (770) -0.25% DEPT 188 Children's Museum 4004 -Special Tax (Measure C) 95,406 95,406 0.00% 4070 -Cash Over & Short (90) - 0.00% 4938 -Workshops 3,520 3,520 0.00% 4967 -Friday Nght Events 13,890 13,890 0.00% 4992 -Special Events 19,775 19,775 0.00% 4991 -Museum Admissions 133,968 130,100 130,100 - 0.00% 4991 -Birthday Parties - 7,500 7,500 0.00% TOTAL Children's Museum 133,878 130,100 270,191 140,091 107.68% 10 CITY OF TEMECU LA 7 Annual Operating Budget Fiscal Year 2012-13 REVENUE DETAIL TEMECULA COMMUNITY SERVICES DISTRICT CITYWIDE FUND DEPT 189 Community Theater 4004 -Special Tax (Measure C) 313,625 313,625 0.00% 4025 -Interstate Dance Grant 27,000 30,000 (30,000) -100.00% 4051 -Donations 500 1,000 1,000 - 0.00% 4070 -Cash Over & Short (20) 0.00% 4901 -Theater Ushers 7,749 12,000 12,000 0.00% 4906 -Theater- Stagehand Labor Reimb 92,147 94,500 94,500 - 0.00% 4907 -Theater - Ticket Services Reimb 35,134 49,625 49,625 - 0.00% 4910 -Theater - Temecula Presents 84,539 79,920 79,920 - 0.00% 4990 -Theater Rentals 65,585 70,000 77,305 7,305 10.44% 4991 -Theater Admissions 15,358 41,000 41,000 - 0.00% 4997 -Concessions 4,629 1,200 1,200 - 0.00% 4999 -Theater-Equipment Rentals 15,228 16,200 16,200 - 0.00% TOTAL Community Theater 347,849 395,445 686,375 290,930 73.57% DEPT 190 Cultural Arts 4004 -Special Tax (Measure C) 4980 -Classes/Activities 4992 -Special Events TOTAL Cultural Arts DEPT 192 Harveston Center 122,810 24,825 122,810 0.00% - 0.00% 24,825 0.00% 147,635 147,635 0.00% 4982 -Contracted Classes 14,059 270,000 270,000 - 0.00% 4990 -Indoor Rentals 200 65,010 57,975 (7,035) -10.82% TOTAL Harveston Center 14,259 DEPT 193 Civic Center Conference Room 335,010 327,975 (7,035) -2.10% 4990 -Indoor Rentals 2,333 12,000 16,593 4,593 38.28% TOTAL Civic Center Conference Room 2,333 12,000 16,593 4,593 38.28% DEPT 194 Human Services 4004 -Special Tax (Measure C) 44,279 44,279 0.00% 4051 -Donations - 0.00% 4980 -Classes/Activities 1,550 1,550 0.00% 4986 -Excursions 2,910 2,910 0.00% 4987 -Indoor Rentals 1,200 1,200 0.00% 4995 -High Hopes 750 750 0.00% TOTAL Human Services - - 50,689 50,689 0.00% DEPT 195 YMCA Facility 4970 -Swim Lessons 55,100 55,100 0.00% 4974 -Pool Rentals 15,600 15,600 0.00% 4980 -Classes and Activities 936 936 0.00% 4981 -Membership Dues 192,782 192,782 0.00% 4982 -Contract Classes 174,760 174,760 0.00% TOTAL YMCA Facility - - 439,178 439,178 0.00% TOTAL TCSD 11,114,043 11,732,178 7,885,512 (3,846,666) -32.79% 11 CITY OF TEMECULA Annual Operating Budget Fiscal Year 2012-13 REVENUE DETAIL ALL SERVICE LEVEL FUNDS Acct# 192 SERVICE LEVEL B FUND 4005 -Assessments 4065+4545 -Investment Interest 4073 -Service Level B Funding From General Fund 4390 -Street Lighting Fees TOTAL SERVICE LEVEL B FUND FY 2010-11 FY 2011-12 Revenue Budgeted 648,844 641,384 642 40 312,989 293,365 9,396 2,160 971,871 936,949 FY 2012-13 Projected 641,384 293,365 934,749 $ CHANGE % CHANGE 0.00% (40) -100.00% 0.00% (2,160) -100.00% (2,200) -0.23% FY 2010-11 FY 2011-12 Acct# SERVICE LEVEL C FUNDS 500-530 Revenue Budgeted 4005 -Assessments 1,607,478 1,583,122 4062 -Recovery of Prior Year Expense 112 - 4065+4545 -Investment Interest 5,912 6,825 FY 2012-13 Projected $ CHANGE % CHANGE 1,583,693 571 0.04% 0.00% 4,628 (2,197) -32.19% TOTAL SERVICE LEVEL "C" FUNDS 1,613,502 Acct# 194 SERVICE LEVEL D FUND 4005 -Assessments 4025 -Grants 4065+4545 -Investment Interest 4096 -Recycling Program TOTAL SERVICE LEVEL D FUND Acct# 195 SERVICE LEVEL R FUND 4005 -Assessments 4065+4545 -Investment Interest TOTAL SERVICE LEVEL R FUND Acct# 196 SERVICE LEVEL L FUND 4005 -Assessments 4007 -Harveston Lake Boat Revenue 4065+4545 -Investment Interest TOTAL SERVICE LEVEL L FUND 238,820 1,589,947 1,588,321 (1,626) -0.10% FY 2010-11 FY 2011-12 FY 2012-13 Revenue Budgeted Projected 5,869,114 5,979,702 6,482,964 12,543 27,685 - 10,153 3,000 1,500 6,846 5,000 5,000 5,898,656 6,015,387 6,489,464 $ CHANGE % CHANGE 503,262 8.42% (27,685) -100.00% (1,500) -50.00% 0.00% 474,077 7.88% FY 2010-11 FY 2011-12 FY 2012-13 Revenue Budgeted 1,221 5,532 91 40 Projected $ CHANGE % CHANGE 5,532 - 0.00% (40) -100.00% 1,312 5,572 5,532 (40) -0.72% FY 2010-11 FY 2011-12 Revenue Budgeted 234,419 225,596 2,325 3,600 2,076 1,300 230,496 12 FY 2012-13 Projected 227,852 3,600 t000 232,452 $ CHANGE % CHANGE 2,256 1.00% 0.00% (300) -23.08% 1,956 0.85% CITY OF TEMECULA Annual Operating Budget Fiscal Year 2012-13 REVENUE DETAIL LIBRARY FUND Acct # 4051 4062 4065+4545 4070 4073 4271 4272 4273 4274 FY 2010-11 FY 2011-12 197 LI BRARY FUND Revenue Budgeted -Library Donations 1,035 - -Recovery of Prior Year Expenditures 12,560 - -Investmentlnterest 8,584 4,000 -Cash Over & Short (101) -Library Funding From General Fund 76,854 273,511 -Fines & Fees 100,565 100,000 -Lost Damaged Materials 6,888 6,000 -Printing & Copies 28,564 25,999 -Facilities Rentals 15,809 14,502 TOTAL LIBRARY FUND 250,758 424,012 FY 2012-13 Projected 3,000 604,253 97,500 5,125 26,000 16,955 752,833 $ CHANGE % CHANGE 0.00% 0.00% (1,000) -25.00% 0.00% 330,742 120.92% (2,500) -2.50% (875) -14.58% 1 0.00% 2,453 16.91% 328,821 77.55% SUMMER YOUTH EMPLOYMENT PROGRAM Acct# 4025 4090 375 SUMMER YOUTH EMPLOYMENT PROGRAM -Federal Grant -Operating Transfer In TOTAL SUMMER YOUTH EMPLOYMENT FUND 195,249 FY 2010-11 FY 2011-12 FY 2012-13 Revenue 195,249 Budgeted Projected $ CHANGE % CHANGE 0.00% 4,000 (4,000) -100.00% 13 4,000 - (4,000) -100.00% 14 CITY OF TEMECULA Annual Operating Budget Fiscal Year 2012-13 REVENUES BY SOURCE Temecula Community Services District PARKS AND RECREATION Taxes and Franchises Special Tax Licenses, Permits and Service Charges Service Charges Recreation Funding From General Fund Proposed Actual Budgeted Proposed Increase Increase FY 2010-11 FY 2011-12 FY 2012-13 (Decrease) (Decrease) $ 3,847,346 $ 3,748,631 $ 1,872,660 $ (1,875,971) -50.04% 2,017,434 5,001,304 2,237,257 5,640,227 2,840, 372 3,141,080 603,115 (2,499,147) 21.23% -44.31% Use of Money and Property Investment Interest 12,236 6,000 5,000 (1,000) -16.67% Lease Income 47,460 43,463 (43,463) -100.00% Intergovernmental Revenues Interstate Dance Grant 27,000 30,000 (30,000) -100.00% Reimbursement From Capital Improvement Program 27,809 25,000 25,000 - 0.00% Other 200 (200) -100.00% Miscellaneous Revenue 133,454 1,400 1,400 0.00% Total Revenues and Other Sources $ 11,114, 043 $ 11, 732,178 $ 7,885,512 $ (3,846,666) -32.79% SERVICE LEVEL B—Street Lighting Proposed % Actual Budgeted Proposed Increase Increase FY 2010-11 FY 2011-12 FY 2012-13 (Decrease) (Decrease) Licenses, Permits and Service Charges Assessments $ 648,844 $ 641,384 $ 641,384 $ - 0.00% Service Level B Funding From General Fund 312,989 293,365 293,365 0.00% Street Lighting Fees 9,396 2,160 (2,160) -100.00% Use of Money and Property Investment Interest 642 40 (40) -100.00% Total Revenues and Other Sources $ 971,871 $ 936,949 $ 934,749 $ (2,200) -0.23% 15 CITY OF TEME Annual Operating Budget Fiscal Year 2012-13 REVENUES BY SOURCE Temecula Community Services District SERVICE LEVEL C—Landscape / Slope Maintenance Licenses, Permits and Service Charges Assessments Use of Money and Property Investment Interest Total Revenues and Other Sources Proposed °!o Actual Budgeted Proposed Increase Increase FY 2010-11 FY 2011-12 FY 2012-13 (Decrease) (Decrease) $ 1,607,478 $ 1,583,122 $ 1,583,693 $ 571 0.04% 6,024 6,825 4,628 (2,197) -32.19% $ 1,613,502 $ 1,589,947 $ 1,588,321 $ (1,626) -0.10% SERVICE LEVEL D—Refuse and Recycling Proposed Actual Budgeted Proposed Increase Increase FY 2010-11 FY 2011-12 FY 2012-13 (Decrease) (Decrease) Licenses, Permits and Service Charges Assessments $ 5,869,114 $ 5,979,702 $ 6,482,964 $ 503,262 8.42% Recycling Program 6,846 5,000 5,000 - 0.00% Use of Money and Property Investment Interest Intergovernmental Revenues Grants Total Revenues and Other Sources 10,153 3,000 1,500 (1,500) -50.00% 12,543 27,685 (27,685) -100.00% $ 5,898,656 $ 6,015,387 $ 6,489,464 $ 474,077 7.88% SERVICE LEVEL R—Street / Road Maintenance Proposed Actual Budgeted Proposed Increase Increase FY 2010-11 FY 2011-12 FY 2012-13 (Decrease) (Decrease) Licenses, Permits and Service Charges Assessments $ 1,221 $ 5,532 $ 5,532 $ - 0.00% Use of Money and Property Investment Interest 91 40 (40) -100.00% Total Revenues and Other Sources $ 1,312 $ 5,572 $ 5,532 $ (40) -0.72% 16 CITY OF TEMECULA Annual Operating Budget Fiscal Year 2012-13 REVENUES BY SOURCE Temecula Community Services District SERVICE LEVEL L -Lake Park Maintenance Licenses, Permits and Service Charges Assessments Harveston Lake Boat Rental Use of Money and Property Investment Interest Total Revenues and Other Sources Actual Budgeted Proposed FY 2010-11 FY 2011-12 FY 2012-13 Proposed Increase (Decrease) $ 234,419 $ 225,596 $ 227,852 $ 2,256 2,325 3,600 3,600 2,076 1,300 1,000 (300) $ 238,820 $ 230,496 $ 232,452 $ 1,956 % Increase (Decrease) 1.00% 0.00% -23.08% 0.85% LIBRARY FUND Licenses, Permits and Service Charges Library Funding From General Fund Printing/Copies Facilities Rentals Fines and Forfeitures Use of Money and Property Investment Interest Miscellaneous Total Revenues and Other Sources Actual Budgeted Proposed FY 2010-11 FY 2011-12 FY 2012-13 Proposed Increase (Decrease) % Increase (Decrease) $ 76,854 $ 273,511 $ 604,253 $ 330,742 120.92% 28,564 25,999 26,000 1 0.00% 15,809 14,502 16,955 2,453 16.91% 107,453 106,000 102,625 (3,375) -3.18% 21,144 4,000 3,000 (1,000) -25.00% 934 0.00% $ 250,758 $ 424,012 $ 752,833 $ 328,821 77.55% SUMMER YOUTH EMPLOYMENT PROGRAM Intergovernmental Revenues Grants Operating Transfers In Actual FY 2010-11 195,249 Budgeted Proposed FY 2011-12 FY 2012-13 4,000 Proposed Increase (Decrease) Increase (Decrease) 0.00% (4,000) -100.00% Total Revenues and Other Sources $ 195,249 $ 4,000 $ $ (4,000) -100.00% 17 18 CITY OF TEMECULA Annual Operating Budget Fiscal Year 2012-13 Fund EXPENDITURE SUMMARY BY CATEGORY Temecula Community Services District Operations and Personnel Maintenance Total Citywide Operations Citywide Recreation $ 682,343 $ 974,374 $ 1,656,717 Senior Center 238,291 136,106 374,397 Community Recreation Center 389,391 288,453 677,844 Recreation 357,228 503,860 861,088 Temecula Community Center 117,681 168,161 285,842 Temecula History Museum 183,486 77,583 261,069 Aquatics 408,810 223,600 632,410 Sports 341,796 81,950 423,746 Temecula Children's Museum 267,743 81,738 349,481 Community Theater 714,861 433,980 1,148,841 Cultural Arts 124,241 325,625 449,866 Harveston Community Center 46,686 281,194 327,880 Conference Center 36,435 11,400 47,835 Human Services 128,229 33,970 162,199 YMCA Facility 331,783 263,132 594,915 Service Levels Service Level B 10,220 958,200 968,420 Service Level C 113,981 1,921,387 2,035,368 Service Level D 121,070 6,362,536 6,483,606 Service Level R 10,150 10,150 Service Level L 20,364 217,900 238,264 Library 45,656 816,824 862,480 Summer Youth Employment 13,000 13,000 Total $ 4,693,295 $ 14,172,123 $ 18,865,418 19 20 CITY OF TEMECULA Annual Operating Budget Fiscal Year 2012-13 TEMECULA COMMUNITY SERVICES DISTRICT MISSION Provide a variety of programs that educate, entertain and enrich the community, provide the exceptional special events that help bring the "small town feel" to our residents, and provide services and programs that is needed by those with special needs, teens and seniors. ORGANIZATIONAL CHART EXECUTIVE DIRECTOR OF COMMUNITY SERVICES Aaron Adams CITYWIDE EVENTS Old Town Events Signature Events Community Events Public Art / Cultural Art Events ATHLETICS Youth Sports Adult Sports Aquatics Tournaments / Field Rentals COMMUNITY SERVICES Recreation Programming COMMUNITY THEATER Theater / Merc Performances Contract Classes I Library Services I Park Development I Sister City Facility Rentals 21 Theater Rental / Marketing MUSEUMS Children's Museum I History Museum HUMAN SERVICES Teens Special Needs Seniors and Active Adults VIECULA CITY OF TE Annual Operating Budget Fiscal Year 2012-13 TEMECULA COMMUNITY SERVICES DISTRICT EXPENDITURES BY CATEGORY Program: Community Services Funding Source: Special Tax Benefit Assessments General Fund CITYWIDE OPERATIONS Actual Actual Budgeted Requested Expenditure Summary FY 2009-10 FY 2010-11 FY 2011-12 FY 2012-13 $ Change Change Personnel $ 4,684,660 $ 4,769,295 $ 4,536,689 $ 4,369,004 $ (167,685) -3.7% Operations & Maintenance 5,984,965 6,022,228 7,319,373 3,885,126 (3,434,247) -46.9% Operating Transfer Out 481,441 489,653 597,979 (597,979) -100.0% Capital Outlay - - 0.0% $ 11,151,066 $ 11,281,176 $ 12,454,041 $ 8,254,130 $(4,199,911) -33.7% SERVICE LEVEL B Actual Actual Budgeted Requested Expenditure Summary FY 2009-10 FY 2010-11 FY 2011-12 FY 2012-13 $ Change % Change Personnel $ 7,616 $ 7,999 $ 17,905 $ 10,220 $ (7,685) -42.9% Operations & Maintenance 932,845 940,790 940,825 958,200 17,375 1.8% Capital Outlay - 0.0% $ 940,461 $ 948,789 $ 958,730 $ 968,420 $ 9,690 1.0% SERVICE LEVEL C Actual Actual Budgeted Requested Expenditure Summary FY 2009-10 FY 2010-11 FY 2011-12 FY 2012-13 $ Change % Change Personnel $ 189,619 $ 139,438 $ 104,364 $ 113,981 $ 9,617 9.2% Operations & Maintenance 1,180,986 1,017,939 1,677,895 1,921,387 243,492 14.5% Capital Outlay - 0.0% Operating Transfer Out 264,600 0.0% $ 1,635,205 $ 1,157,377 $ 1,782,259 $ 2,035,368 $ 253,109 14.2% SERVICE LEVEL D Actual Actual Budgeted Requested Expenditure Summary FY 2009-10 FY 2010-11 FY 2011-12 FY 2012-13 $ Change % Change Personnel $ 71,483 $ 46,418 $ 72,336 $ 121,070 $ 48,734 67.4% Operations & Maintenance 5,950,118 5,797,913 6,110,689 6,362,536 251,847 4.1% Capital Outlay - 0.0% $ 6,021,601 $ 5,844,331 $ 6,183,025 $ 6,483,606 $ 300,581 4.9% 22 VIECULA CITY OF TE Annual Operating Budget Fiscal Year 2012-13 TEMECULA COMMUNITY SERVICES DISTRICT EXPENDITURES BY CATEGORY (continued) SERVICE LEVEL R Actual Actual Budgeted Requested Expenditure Summary FY 2009-10 FY 2010-11 FY 2011-12 FY 2012-13 $ Change % Change Operations & Maintenance $ 32,837 $ 6,325 $ 10,150 $ 10,150 $ 0.0% Capital Outlay $ 0.0% $ 32,837 $ 6,325 $ 10,150 $ 10,150 $ 0.0% SERVICE LEVEL L Actual Actual Budgeted Requested Expenditure Summary FY 2009-10 FY 2010-11 FY 2011-12 FY 2012-13 $ Change % Change Personnel $ 56,540 $ 49,442 $ 44,450 $ 20,364 $ (24,086) -54.2% Operations & Maintenance 194,983 178,446 217,900 217,900 0.0% Capital Outlay - 0.0% $ 251,523 $ 227,888 $ 262,350 $ 238,264 $ (24,086) -9.2% LIBRARY Actual Actual Budgeted Requested Expenditure Summary FY 2009-10 FY 2010-11 FY 2011-12 FY 2012-13 $ Change % Change Personnel $ 12,704 $ 13,746 $ 46,690 $ 45,656 $ (1,034) -2.2% Operations & Maintenance 635,895 621,032 715,980 816,824 100,844 14.1% Capital Outlay - - - - 0.0% $ 648,599 $ 634,778 $ 762,670 $ 862,480 $ 99,810 13.1% SUMMER YOUTH EMPLOYMENT Actual Actual Budgeted Requested Expenditure Summary FY 2009-10 FY 2010-11 FY 2011-12 FY 2012-13 $ Change % Change Personnel $ 318,733 $ 185,819 $ 4,000 $ 13,000 $ 9,000 225.0% Operations & Maintenance 17,029 9,470 - - - 0.0% Capital Outlay - - - - - 0.0% $ 335,762 $ 195,289 $ 4,000 $ 13,000 $ 9,000 225.0% 23 CITY OF TEMECULA Annual Operating Budget Fiscal Year 2012-13 TEMECULA COMMUNITY SERVICES DISTRICT PERSONNEL ALLOCATION Authorized Proposed CITYWIDE OPERATIONS 2011-12 Changes 2012-13 Administratiie Assistant 2.00 (1.00) 1.00 Aquatics Supervisor 1.00 0.00 1.00 Custodian 1.00 0.00 1.00 Executive Director, Community Services 1.00 0.00 1.00 Facility Services Manager 0.50 (0.50) 0.00 Human Services/Teen Manager 1.00 (1.00) 0.00 Lead Maintenance Worker 3.10 (2.10) 1.00 Maintenance Superintendent 0.95 (0.60) 0.35 Maintenance Supervisor 0.40 (0.40) 0.00 Maintenance Worker 2.40 (1.05) 1.35 Museum Services Manager 1.00 (1.00) 0.00 Office Specialist 2.30 0.70 3.00 Parks/Landscape Maintenance Supervisor 0.60 (0.60) 0.00 Patron Services Coordinator 1.00 0.00 1.00 Recreation Coordinator 0.00 1.00 1.00 Recreation Superintendent 1.00 0.00 1.00 Recreation Supervisor 3.00 3.00 6.00 Senior Landscape Inspector 0.50 (0.50) 0.00 Senior Management Analyst 1.85 0.15 2.00 Senior Recreation Coordinator 2.00 0.00 2.00 Theater Manager 1.00 0.00 1.00 Theater Technical Coordinator 1.00 0.00 1.00 Theater Technical Supervisor 1.00 0.00 1.00 Total 29.60 (3.90) 25.70 24 CITY OF TEMECULA Annual Operating Budget Fiscal Year 2012-13 TEMECULA COMMUNITY SERVICES DISTRICT PERSONNEL ALLOCATION (continued) Authorized SERVICE LEVEL B 2011-12 Office Specialist 0.15 Senior Management Analyst 0.05 Changes Proposed 2012-13 0.00 0.15 (0.05) 0.00 Total 0.20 (0.05) 0.15 SERVICE LEVEL C Landscape Inspector Maintenance Manager Maintenance Superintendent Office Specialist Parks/Landscape Maintenance Supervisor Senior Landscape Inspector Senior Management Analyst 0.00 0.00 0.05 0.15 0.25 0.35 0.10 0.25 0.05 (0.05) 0.00 0.00 0.00 (0.10) 0.25 0.05 0.00 0.15 0.25 0.35 0.00 Total 0.90 0.15 1.05 SERVICE LEVEL D Associate Planner Total SERVICE LEVEL L Maintenance Worker Park/Landscape Maintenance Supervisor Senior Landscape Inspector 0.60 0.40 1.00 0.60 0.40 1.00 0.10 0.15 0.15 0.00 (0.10) (0.10) 0.10 0.05 0.05 Total 0.40 (0.20) 0.20 LIBRARY Maintenance Superintendent Maintenance Supervisor Maintenance Worker Total Department Total 25 0.00 0.10 0.25 0.10 (0.10) 0.10 0.10 0.00 0.35 0.35 0.10 0.45 32.05 (3.50) 28.55 26 CITY OF TEMECULA Annual Operating Budget Fiscal Year 2012-13 TEMECULA COMMUNITY SERVICES DISTRICT Division/Program: CITYWIDE EVENTS SERVICES • Organize signature City events such as the Easter Egg Hunt, 4th of July Parade and Fireworks Program, Santa's Electric Light Parade and Winter Wonderland Events in Old Town with the seasonal Ice Rink. • Provide free family activities during the summer, including FAM, Family Fun Nights, Hot Summer Nights and Aglow in the Park. • Implementation of regional events, including Bluegrass Festival, Western Days, Street Painting Festival, Outdoor Ice Rink and New Year's Eve with Grape Drop. • Provide co-sponsorship of funds or in-kind services to special events including the Spring Rod Run, Susan G. Komen Race for the Cure, Taste of Temecula and Reality Rally. ACCOMPLISHMENTS for Fiscal Year 2011-12 • Implemented the Mayor's Beach Ball Block Party Event to kick off all City -offered summer activities. • Implemented two benefit concerts utilizing the Civic Center and Town Square as a new venue — Steve Miller Band and Lt. Dan Band with Gary Sinise. • Provided more opportunities for citizens to participate in popular programs such as the Holiday Lights and Festive Sights bus tours, Parent Date Nights, and the Halloween Family Carnival. • Doubled participation at Family Activities on Mondays (FAM) nights. • Increased "Gallery at the Merc" art show openings participation by adding local musicians and bands as entertainment. 27 VIECULA CITY OF TE Annual Operating Budget Fiscal Year 2012-13 TEMECULA COMMUNITY SERVICES DISTRICT Division/Program: CITYWIDE EVENTS OBJECTIVES AND PERFORMANCE MEASURE(S) for Fiscal Year 2012-13 One -Time andlor Facilitation Objective(s) • Develop a special event to recognize our local heroes on Veteran's Day. Develop a comprehensive analysis to evaluate effectiveness and quantifiable value of city special events. Draft written guidelines and procedures for Special Events. Develop a strategy for the successful management and rental of the Civic Center Conference Room. Proactively solicit and market the Civic Center venue for consideration of hosting benefit concerts and entertainment. Develop a sponsorship program for local businesses to fund City-wide events. Develop comprehensive written policies, procedures, and guidelines to address operational requirements. Estimated Completion Date Dec 2012 June 2013 Jan 2013 Dec 2012 July 2012 Sep 2013 June 2013 QLMP Core Value Five Year Long Term Goal Performance Measure FY 2012-13 Project Status (To Be Tracked Quarterly) 1st 2nd 3rd 4th Quarter Quarter Quarter Quarter Healthy and Livable City: Provide signature special events and cultural opportunities Accountable and Responsive City Government: Diversify the City's revenue base to ensure stability in any economic climate. Healthy and Livable City: Provide signature special events and cultural opportunities Accountable and Responsive City Government: Maintain overall sound fiscal policies Healthy and Livable City: Provide signature special events and cultural opportunities Accountable and Responsive City Government: Diversify the City's revenue base to ensure stability in any economic climate Accountable and Responsive City Government: Maintain overall sound fiscal policies 28 CITY OF TEMECULA Annual Operating Budget Fiscal Year 2012-13 TEMECULA COMMUNITY SERVICES DISTRICT Division/Program: ATHLETICS SERVICES • Provide a variety of recreational and competitive sporting opportunities City-wide. • Provide an all-inclusive year-round aquatics program. • Program, reserve and maintain the sports fields, pools and courts for recreation and competitive leagues and tournaments. ACCOMPLISHMENTS for Fiscal Year 2011-12 • Completed 3,200 swim lessons for children of all ages and levels. • Planned and implemented a new Water Polo instructional program. • Successfully supervised 1,600 adults and 6,000 youth in sports programs citywide. • Managed 47 youth tournaments and 25 adult tournaments over 30% of fields citywide. OBJECTIVES AND PERFORMANCE MEASURE(S) for Fiscal Year 2012-13 Progression Over Time Objective(s) Expand the F.I.T. Program attendance by 60%. Estimated Completion Date Nov 2012 QLMP Core Value Five Year Long Term G oal A Sustainab- le - City Promote a "walkable community Increase annual attendance at the Temecula Skate Park from 2,500 to 2,700 participants by increasing the number of sessions and allowing scooters. June 2013 I Healthy and Livable Promote high quality and recreation progr and cultural services 29 Performance Measure FY 2012-13 Project Status (To Be Tracked Annually) FY 2010-11 FY 2011-12 FY 2012-13 P ' 1cte d 11r LL1U1 r1 VJC1rLCY roe 75 100 125 City: parks ams 2,228 2,500 2,700 VIECULA CITY OF TE Annual Operating Budget Fiscal Year 2012-13 TEMECULA COMMUNITY SERVICES DISTRICT Division/Program: ATHLETICS OBJECTIVES AND PERFORMANCE MEASURE(S) for Fiscal Year 2012-13 (continued) One -Time andlor Facilitation Objective(s) Estimated Completion Date QLMP Core Value Five Year Long Term Goal Performance Measure FY 2012-13 Project Status (To Be Tracked Quarterly) st 2nd 3rd 4th Quarter Quarter Quarter Quarter Develop a Joint Use Agreement with TVUSD and Linfield Christian School to increase the number of tennis courts for public use from 6 to 26 by June 2013. Develop a monitoring program to ensure a safe and family friendly environment at all adult sports and tournaments. Develop a comprehensive tennis program that includes lessons, leagues, tournaments, public use of courts and private instruction. Develop comprehensive written policies, procedures, and guidelines to address operational requirements. June 2013 Healthy and Livable City: Promote high quality parks and recreation programs and cultural services Oct 2012 Healthy and Livable City: Maintain a safe and family orientated environment [Jan 2013 Healthy and Livable City: Promote high quality parks and recreation programs and cultural services June 2013 Accountable and Responsive City Government: Maintain overall sound fiscal policies 30 CITY OF TEMECULA Annual Operating Budget Fiscal Year 2012-13 TEMECULA COMMUNITY SERVICES DISTRICT Division/Program: COMMUNITY SERVICES SERVICES • Provide library collections that include books, periodicals, DVDs, CD's and resource data bases geared for adults, teens, and children. • Provide resources such as homework center and tutoring via a partnership between the Temecula Valley Unified School District and Law Library Services via a partnership with the Riverside County Law Library. • Plan, program and implement a wide variety of leisure services and contract classes for residents of all ages and abilities. • Participate in the Capital Improvement Program projects that include new or improving parks and recreational facilities. • Reserve and program numerous facilities, including the Community Recreation Center, Temecula Community Center, Temecula Skate Park, Harveston Center, Harveston Community Park Room, Patricia H. Birdsall Sports Park and citywide park shelters. ACCOMPLISHMENTS for Fiscal Year 2011-12 • Formed a partnership between the City of Temecula and the Riverside County Law Library to provide law library services at the Temecula Public Library. • Received grant money from the Roripaugh Family Foundation and the Friends of the Temecula Libraries to provide resources and training for staff regarding special needs children and their families. • Increased the number of enrichment classes by 200 and rental opportunities by 260 with the successfully opening and managing the Harveston Center. • Fostered relationships through the Sister Cities program with a delegate of Temecula students and representatives going to Japan. 31 VIECULA CITY OF TE Annual Operating Budget Fiscal Year 2012-13 TEMECULA COMMUNITY SERVICES DISTRICT Division/Program: COMMUNITY SERVICES OBJECTIVES AND PERFORMANCE MEASURE(S) for Fiscal Year 2012-13 One -Time and/or Facilitation Objective(s) Estimated Com pletion Date QLMP Core Value Five Year Long Term Goal Performance Measure FY 2012-13 Project Status (To Be Tracked Quarterly) 32 1. Quarter 2" Quarter 3ra Quarter 4' Quarter Develop a comprehensive, streamlined process for Facility Use Rentals including a rental packet and user- friendly website. Dec 2012 Accountable and Responsive City Government: Diversify the City's revenue base to ensure stability in any economic climate Provide four (4) computer classes in the homework technology center, including classes for adults and seniors to educate our community on the benefits of technology. Dec 2012 Healthy and Livable City: Foster an "educated community" through a wide variety of opportunities. Expand the partnership with Riverside County Law Library to offer three (3) law-related classes to the public. June 2013 Healthy and Livable City: Foster an "educated community" through a wide variety of opportunities. Evaluate expanded uses for the Margarita Community Park site. April 2013 Healthy and Livable City: Foster an "educated community" through a wide variety of opportunities. Develop comprehensive written policies, procedures, and guidelines to address operational requirements. June 2013 Accountable and Responsive City Government: Maintain overall sound fiscal policies 32 CITY OF TEMECULA Annual Operating Budget Fiscal Year 2012-13 TEMECULA COMMUNITY SERVICES DISTRICT Division/Program: THEATER SERVICES ■ Enrich, educate, and entertain the community by providing cultural experiences through theater, the arts, and music. ■ Partner with local schools to offer enhanced artistic and cultural experiences to youth. ■ Provide support of City -sponsored special events through quality programming, management, operations, and marketing. ACCOMPLISHMENTS for Fiscal Year 2011-12 ■ Planned, programmed and implemented an enhanced Gallery at the Merc rotating art exhibit program increasing the number of exhibits from six to ten shows. ■ Earned fourth Award of Excellence for the Temecula Presents Season Brochure in Marketing from the California Parks and Recreation Society (CPRS). ■ Expanded the Dance Moves program with a grant from the InnerState Dance Project. ■ Initiated the purchase of a new Marley Dance Floor for the Theater. ■ Provided off-site ticketing services for multiple events, including two benefit concerts at the Civic Center, and Taste of Temecula, which provided additional revenues. 33 VIECULA CITY OF TE Annual Operating Budget Fiscal Year 2012-13 TEMECULA COMMUNITY SERVICES DISTRICT Division/Program: THEATER OBJECTIVES AND PERFORMANCE MEASURE(S) for Fiscal Year 2012-13 jm One -Time andlor Facilitation Estimated QLMP Core Value Objective(s) Completion Five Year Long Term Goal Date Develop an implementation plan and research grant opportunities to utilize green technology such as LED lighting in the Theater. Develop packages that may include full service dining and visiting experience. Explore the concept of a "black box" theater to expand cultural arts and generate additional revenue. Consolidate marketing and promotion efforts for Temecula Presents and resident theater companies to produce a unified Theater Season Brochure. Create a sponsorship program (advertising opportunities) to allow local businesses the opportunity to support Temecula Presents and the Theater. Develop comprehensive written policies, procedures, and guidelines to address operational requirements. June 2013 Jan 2013 March 2013 Aug 2012 Oct 2012 June 2013 Performance Measure FY 2012-13 Project Status (To Be Tracked Quarterly) 1 st 2nd 3rd 4th Quarter Quarter Quarter Quarter Accountable and Responsive City Government: Build and Maintain Highly Functional and Sustainable City Facilities and Infrastructure Accountable and Responsive City Government: Diversify the City's revenue base to ensure stability in any economic climate Accountable and Responsive City Government: Maintain overall sound fiscal policies Economic Prosperity: Continue to promote the Temecula Valley as a destination Accountable and Responsive City Government: Diversify the City's revenue base to ensure stability in any economic climate Accountable and Responsive City Government: Maintain overall sound fiscal policies 34 CITY OF TEMECULA Annual Operating Budget Fiscal Year 2012-13 TEMECULA COMMUNITY SERVICES DISTRICT Division/Program: MUSEUMS SERVICES • Enrich, educate, and entertain the community by providing experiences in historical preservation and children's science -based learning experiences. • Supplement public education through use of traveling exhibits, historical walking tours, museum tours, and history writing contests. • Educate and entertain children with science -based activities and interactive exhibits at Pennypickle's Workshop, the Temecula Children's Museum. ACCOMPLISHMENTS for Fiscal Year 2011-12 • Completed updates to Temecula Children's Museum exhibits - "library" and "bathroom". • Partnered with the Friends of the Temecula Children's Museum to provide thematic science -based fun nights. • Acquired the Betty Burke Collection, a vast array of memorabilia from Erle Stanley Gardner's private secretary, including signed books, photos, magazines and a draft autobiography of Erle Stanley Gardner's early law career, and Erle Stanley Gardner's Court of Last Resort workbook. • Successfully planned and programmed a four-week Summer Explorer's History Camp studying various periods of history and including subject -focused field trips, games and activities. • Increased the number of gallery talks from eight (8) to ten (10) on local history and exhibit - related topics. • In partnership with the Friends of the History Museum, the City obtained grant funding to purchase computer equipment to be used for electronic photo storage. 35 VIECULA CITY OF TE Annual Operating Budget Fiscal Year 2012-13 TEMECULA COMMUNITY SERVICES DISTRICT Division/Program: MUSEUMS OBJECTIVES AND PERFORMANCE MEASURE(S) for Fiscal Year 2012-13 Progression Over Time Objective(s) Estimated Completion Date QLMP Core Value Five Year Long Term Goal Performance Measure FY 2012-13 Project Status (To Be Tracked Annually) FY 2010-11 FY 2011-12 FY 2012-13 Actual Projected Projected Increase attendance at the Pennypickle's Workshop, by planning, programming, and implementing three (3) new City sponsored programs for toddlers, scouts, and home school students. Increase the number of active volunteers at the Temecula History Museum. June 2013 June 2013 Healthy and Livable City: Provide high quality parks and recreation programs and cultural services 5 0 5 Accountable and Responsive City Government: Promote community involvement 36 5 16 25 VIECULA CITY OF TE Annual Operating Budget Fiscal Year 2012-13 TEMECULA COMMUNITY SERVICES DISTRICT Division/Program: MUSEUMS OBJECTIVES AND PERFORMANCE MEASURE(S) for Fiscal Year 2012-13 (continued) One -Time and/or Facilitation Objective(s) Facilitate the design and development of an innovative new park attraction at Sam Hicks Monument Park to complement the History Museum. r Estimated Completion Date QLMP Core Value Five Year Long Term Goal r Performance Measure FY 2012-13 Project Status (To Be Tracked Quarterly) 1st 2nd 3rd Quarter Quarter Quarter 4th Quarter June 2013 Healthy and Livable City: Provide high quality parks and recreation programs and cultural services Increase public/private partnerships for programming with the TVUSD by beginning a school-based outreach program. Oct 2012 Healthy and Livable City: Foster an "educated" community through a wide variety of opportunities Update and refurbish three (3) school panels for the traveling history exhibits. Dec 2012 Healthy and Livable City: Foster an "educated" community through a wide variety of opportunities Develop a plan to incorporate and promote the History Museum and Pennypickle's Workshop with Old Town special events. June 2013 Healthy and Livable City: Provide high quality parks and recreation programs and cultural services Actively research and apply for grants or other types of funding to provide additional educational programs. June 2013 Accountable and Responsive City Government: Diversify the City's revenue base to ensure stability in any economic climate. Develop comprehensive written policies, procedures, and guidelines to address operational requirements. June 2013 Accountable and Responsive City Government: Maintain overall sound fiscal policies 37 38 CITY OF TEMECULA Annual Operating Budget Fiscal Year 2012-13 TEMECULA COMMUNITY SERVICES DISTRICT Division/Program: HUMAN SERVICES SERVICES • Focus on the enrichment, education, employment and resources for youth, young adults, special needs and seniors. • Provide leadership development and training for youth and young adults. • Offer health and wellness education and programs for seniors. • Provide resources, education and programs for families with special needs. ACCOMPLISHMENTS for Fiscal Year 2011-12 • Drafted Autism Playbook and Resource Guide to be used as a resource for local families and the community. • Implemented the Fellows and Intern Programs which employed 17 young adults, two with special needs. • Partnered with Abbott Vascular and Temecula Valley Unified School District to conduct the first Science and Technology Fair. • Provided seniors with classes in social media and computer literacy. • Partnered with the County of Riverside to provide no cost medical services to area residents through monthly visits of a Mobile Medical Unit. • Partnered with TMI, West View, and Carerite to provide employment training opportunities for special needs adults at the Mary Phillips Senior Center. 39 CITY OF TEMECULA Annual Operating Budget Fiscal Year 2012-13 TEMECULA COMMUNITY SERVICES DISTRICT Division/Program: HUMAN SERVICES nP_1P[`TILIFc AMfl DFQ�nRMANCE MEASURES) fr r Gicv I Vcar 9fl 17_1' Progression Over Time 0 bjective(s) Explore adding two additional programming classes and recreation for active adults and families. Utilize an Inclusion Specialist to train two City Staff on providing Special Needs Accommodations in the Aquatics Program. Increase special needs youth programming by two, to include a fully implemented SKIP (Supporting Kids Including Parents) Program. Estimated I Completion Date QLMP Core Value Five Year Long Term Goal June 2013 Healthy an Promote hi and recreat and cultural Sep 2012 Healthy anc Maintain a oriented en June 2013 Healthy an Foster an " community" variety of o Performance Measure FY 2012-13 Project Status (To Be Tracked Annually) FY 2010-11 FY 2011-12 FY 2012-13 I Livable City: th quality parks ion programs services and educated pportunities Actual Projected ° Projected d 4 6 8 I Livable City: ;afe and family rironment 4 5 7 Livable City: through a wide 4 6 8 40 CITY OF TEMECULA Annual Operating Budget Fiscal Year 2012-13 TEMECULA COMMUNITY SERVICES DISTRICT Division/Program: HUMAN SERVICES OBJECTIVES AND PERFORMANCE MEASURE(S) for Fiscal Year 2012-13 (continued) One -Time and/or Facilitation Objective(s) Estimated QLMP Core Value Completion Five Year Long Term Goal Date Performance Measure FY 2012-13 Project Status (To Be Tracked Quarterly) 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Complete a comprehensive feasibility study on the proposed Teen Village to identify a location and components of the center. Design and develop a functional park for special needs youth. Design and install an innovative outdoor exercise park for seniors. Develop comprehensive written policies, procedures, and guidelines to address operational requirements. June 2013 Healthy and Livable City: Maintain a safe and family oriented environment June 2013 Healthy and Livable City: Promote high quality parks; recreation programs and cultural services June 2013 Healthy and Livable City: Promote high quality parks; recreation programs and cultural services June 2013 Accountable and Responsive City Government: Maintain overall sound fiscal policies 41 42 TCSD DEPARTMENTAL REPORT Item No. 24 Approvals City Attorney Director of Finance City Manager TEMECULA COMMUNITY SERVICES DISTRICT AGENDA REPORT TO: General Manager/Board of Directors FROM: Aaron Adams, Executive Director of Community Services DATE: June 26, 2012 SUBJECT: Community Services Department Monthly Report PREPARED BY: Gail Zigler, Administrative Assistant RECOMMENDATION: Receive and file. BACKGROUND: The following provides an overview of the Community Services Department's programs, activities and events: Summer is underway and many of the Community Services Department's summer activities and events are in full swing including F.A.M. nights, Summer Sunsets Concert Series, Moonlight Movies in the Park Series, the Aglow in the Park, Family Fun Nights, Summer Day Camp, Summer Swim and Swim Lessons, just to name a few. The Mayor's Beach Ball Block Party was held on Saturday, June 9th at the Promenade Mall. This event featured live music, crafts, games, a dunk tank, food vendors, etc. Funds raised at the event benefitted the Temecula Rotary Club's Veteran's Project. The Street Painting and Plein Air Festival was held June 22 through June 24. This year's event included a juried art festival co-produced by the Temecula Valley Arts Council. The Community Services Department is currently programming for an inaugural Scooter Skate at the Temecula Skate Park on July 1, 2012 and the 4th of July Festivities. Hot Summer Nights in Old Town will begin on Friday, July 5`h. The Community Services Department Human Services Division is ousy preparing for the annual College Fair, and programming a variety of classes and activities for Temecula's youth and the Special Needs community. The Community Services Department Cultural Arts Division hosted a Student Art show at the Gallery at the Merc on Friday, June 8th and included a reception and music by the Brewer Boys. The exhibit features the artwork of over 20 home school and charter school students. The show will run through July 15th The Temecula Community Theater is finalizing their Temecula Presents Season brochure for release in early July. The brochure will include theater, dance and musical productions of the 2012-2013 season presented by the City of Temecula Community Services Department. The Temecula History Museum will be opening an exhibit on June 30th featuring the clothing from "The Old West". The exhibit, which will run thru September, will display American Wild Western clothing worn by people on the frontier. This clothing first captured the public imagination in the 1880's and has been an influence on fashion ever since. The exhibit includes women's dresses, men's and women's hats, chaps, and spurs, pocket watches, and rifles and pistols. The Community Services Department is partnering with the County of Riverside Mobile Health Clinic, operated by Riverside County Regional Medical Center, to provide accessible health care in a non-traditional clinic setting to the residents of Riverside County. We are scheduled for this service on the third Monday of every month from 9am-4pm. The unit will be stationed at the Mary Phillips Senior Center. Under the supervision of the medical director, care is provided by a healthcare provider, a pharmacist, a licensed vocational nurse, a health services assistant and supporting staff. The unit is equipped to handle drop-in care for non -emergency, non-complex medical conditions, follow up care and basic laboratory tests for purposes of completing medical screening examinations. Program services include, but riot limited to healthcare education, general medical exams, preventive screenings, immunizations, physical exams, sports physicals as well as screening and treatment of chronic health conditions for adults, children and families. By providing healthcare services "on the go", the MHC reaches out to both urban and rural areas throughout Riverside County at no cost to the city or residents. PUBLIC HEARING Item No. 25 Approvals City Attorney Director of Finance City Manager CITY OF TEMECULA AGENDA REPORT TO: City Manager/City Council FROM: Genie Wilson, Director of Finance DATE: June 26, 2012 SUBJECT: Amendment to the Citywide User Fee Schedule PREPARED BY: Rudy J. Graciano, Revenue Manager RECOMMENDATION: Adopt a resolution entitled: RESOLUTION NO. 12- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TEMECULA ADDING CURRENT HOURLY RATE CHARGES TO THE CONSOLIDATED SCHEDULE OF FEES FOR LAND USE AND RELATED FUNCTIONS USER FEE SCHEDULE FOR THOSE SERVICES PROVIDED THAT ARE NOT SUBJECT TO A SPECIFIC FEE BACKGROUND: In July 1990, City Council adopted Resolution No. 90-81, which provided a Consolidated Schedule of Fees for Land Use and Related Functions for Planning, Public Works and the Fire Department that were consistent with the fees charged by Riverside County. Building Fees were based on the International Conference of Building Officials (ICBG) and corresponding authority's method of calculating fees. Based on a study conducted by the Cordoba Corporation, City Council adopted Resolution No. 93-46 in June 1993 adding new user fees to the already existing fees and repealing Resolution No. 90-81. In August 2002, the City contracted with Maximus, Inc. to conduct a detailed cost of services study of user fee activities throughout the City. User fee services are those services performed by a governmental agency on behalf of a private citizen or group. The assumption underlying most fee recommendations is that the costs of services benefiting individuals — and not society as a whole — should be borne by the individual receiving the benefit. At great length, staff worked closely with Maximus to determine the full cost, including all applicable direct and indirect costs, associated with providing each service. As a result of the study, a new Citywide User Fee Schedule was approved by Council on May 25, 2004. Subsequent minor modifications and revisions were made by resolution to include fees that were omitted, correct minor clerical errors and address changes in business practices. On May 2007, the City entered into an agreement with Matrix Consulting Group to conduct a minor User Fee Study update to include only certain departments that needed to add certain fee items. After thorough review of the study, staff determined that only one set of new fees, the Water Quality Management Plan (VVQMP) plan check and inspection fees should be implemented. In January 2008, Council adopted Resolution No. 08-05 to add these new fees. Staff has performed ongoing review of City services. This review consisted of evaluating services performed for customers and comparing them with established fees that have been approved for the recovery of the costs related to performing these services. During this evaluation, it was discovered there are services performed by Development Services where no cost recovery fee has been adopted by Council. There were also instances where the actual time to perform a service was significantly greater that the time estimated for the established fee. In these situations when there is no mechanism in place to charge an appropriate user fee, it is recommended that the City recover the costs associated with providing services by charging an hourly rate. Because a fully burdened rate depends on salary, benefits, and indirect costs, which change over time, an hourly rate for a particular service may also change over time. For this reason, hourly rates should be calculated, as needed, and applied to the time necessary to perform those services in those instances where no fee has been established. FISCAL IMPACT: The above fee adjustments are expected to enhance cost recovery of programs and services by approximately $22,000. ATTACHMENTS: Resolution No. 12- RESOLUTION NO. 12- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TEMECULA ADDING CURRENT HOURLY RATE CHARGES TO THE CONSOLIDATED SCHEDULE OF FEES FOR LAND USE AND RELATED FUNCTIONS USER FEE SCHEDULE FOR THOSE SERVICES PROVIDED THAT ARE NOT SUBJECT TO A SPECIFIC FEE THE CITY COUNCIL OF THE CITY OF TEMECULA DOES HEREBY RESOLVE AS FOLLOWS: Section 1. The City Council finds, determines and declares that: A. The State of California Government Code Section 66014 et.al. allows local agencies to charge fees for various activities as long as those fees do not exceed the estimated reasonable cost of providing the service for which the fee is intended. B. The City Council of the City of Temecula adopted Resolution No. 90-81, a Consolidated Schedule of Fees for Land Use and Related Functions on July 24, 1990 that were consistent with the fees charged by Riverside County. C. The City Council amended the user fees by Resolution No. 93-46 on June 8, 1993 to incorporate certain revisions to the existing fee schedule to correct obvious inequities per the Cordoba Corporation study. D. The City Council approved Resolution 04-56 on May 25, 2004 establishing and imposing new Citywide user fees effective July 1, 2004 and repealing Resolution No. 93-46. E. The City Council approved Resolutions No. 04-72 on June 22, 2004, No. 04-109 on October 26, 2004, No. 05-13 on January 25, 2005, No. 05-16 on February 8, 2005 and No. 05-101 on September 27, 2005 making minor modifications and revisions to include fees that were omitted, correct minor clerical errors and address changes in business practices. F. The City Council approved Resolution No. 08-05 on January 8, 2008 to add Water Quality Management Plan (WQMP) plan check and inspection fees. G. After ongoing review of City services, staff discovered services where no cost recovery fee has been adopted. In these situations where there is no fee established, the City can recover the costs associated with providing these services by charging an hourly rate. H. Because hourly rates are dependent on costs that change over time, hourly rates may be calculated and updated using salary, fringe benefit and indirect costs incurred at the time services are provided. Section 2. The resolutions described in Section 1 are amended to provide for the hourly rates charges as described in this Section 2. For those services that are not subject to a specific fee, the fee for such services shall be the applicable hourly rate for services rendered to the customer in order to recover the costs associated with performing the services. Additionally, if the amount of time in providing a service for a specified fee exceeds the estimated time on which the applicable fee was based, then the difference in time will be charged at the applicable hourly rate. The City Manager shall approve, in writing, the applicable hourly rates for specific positions based on salary, fringe benefits, and indirect costs. Section 3. The City Council hereby adopts cost recovery based on current hourly rates and shall be effective August 25, 2012. PASSED, APPROVED, AND ADOPTED by the City Council of the City of Temecula this 26th day of June, 2012. Chuck Washington, Mayor ATTEST: Susan W. Jones, MMC City Clerk [SEAL] STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ) ss CITY OF TEMECULA ) I, Susan W. Jones, MMC, City Clerk of the City of Temecula, do hereby certify that the foregoing Resolution No. 12- was duly and regularly adopted by the City Council of the City of Temecula at a meeting thereof held on the 26th day of June, 2012, by the following vote: AYES: COUNCIL MEMBERS: NOES: COUNCIL MEMBERS: ABSENT: COUNCIL MEMBERS: ABSTAIN: COUNCIL MEMBERS: Susan W. Jones, MMC City Clerk COUNCIL BUSINESS Item No. 26 Approvals City Attorney Director of Finance City Manager Si( -r M) CITY OF TEMECULA AGENDA REPORT TO: City Manager/City Council FROM: Susan W. Jones, City Clerk DATE: June 26, 2012 SUBJECT: Planning Commission Appointments PREPARED BY: Cheryl Domenoe, Administrative Assistant RECOMMENDATION: Appoint two applicants to serve full three-year terms on the Planning Commission through June 15, 2015, BACKGROUND: The terms of Commissioners Ron Guerriero and Pat Kight expired on June 15, 2012. The City Clerk's office has followed the Council's established procedure for filling Commission vacancies by advertising the opening in the local newspaper. Notices were also posted at various locations within the City and on the City's Web page. When the deadline was reached for accepting applications, the applications were forwarded to the subcommittee comprised of Mayor Washington and Mayor Pro Tem Naggar for review and recommendation. Both Mayor Washington and Mayor Pro Tem Naggar have recommended the re -appointment of Commissioner Ron Guerriero and Commissioner Pat Kight to serve full three-year terms through June 15, 2015. All applicants are registered voters and live within the city limits of the City of Temecula. Attached are copies of the applications that were received by the filing deadline of June 5, 2012. FISCAL IMPACT: None ATTACHMENTS: Three applications for appointment City of Temecula 41000 Main Street Temecula, CA 92590 www.cityoftemecula.org (951) 694-6444 06-05-12 A10:44 IN Commission Appointment Application RC CEIVED For proper consideration, you must currently be a resident of the SUN -5 2012 City of Temecula and a Registered Voter within the City Limits of the Ct CLB City of Temecula IQ1C8 DE Please Check One: X Planning Community Services Public Traffic Safety Number of years as a City of Temecula Resident 3 0 Are you a City Registered Voter? Yes NAME: Casey Marie Bell OCCUPATION: High School Counselor ADDRESS: DAYTIME PHONE: EVENING PHONE: EMPLOYER NAME: Linfield Christian School EMPLOYERADDRESS: 31950 Pauba Rd Temecula Ca E-MAIL caseymariebel l@y Educational Background/Degrees: BA, Communication Studies, Azusa Pacific University . PT ahoo.com List any City or County Board, Committee or Commission on which you have served and the year(s) of service: I have not yet had the opportunity to serve in this capacity. List any organizations to which you belong (professional, technical, volunteer groups, non-profit organizations, service clubs, etc.): National Association of College Admissions Counselors (NACAC), National Association of Christian College Admissions Professionals (NACCAP) State why you wish to serve on this commission, and why you believe you are qualified for the position. Please be specific.(You may attach a separate sheet of paper if necessary. Letters of recommendation and/or references are encouraged.) Please see attached. I understand that any or all information on this form may be verified. t consent to the release of this information for public inforpa ' • n purposes. Signature: L I. • -- rtealt-. 1 Date: NEEP Office, 41000 Main Street (951) 694-6444" (OR) Please return to: C� Mail to P.O. Box 9033, Temecula, CA 92589-9033 PLEA E BE AWARE OF THE ADVERTISED DEADLINE QUALITIES AND ATTRIBUTES OF AN EFFECTIVE COMMISSIONER • Informed citizen (someone knowledgeable about local affairs) • Ability to have a