STATE OF CALIFORNIA DEPARTMENT OF REHABILITATION

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SECTION3 CONSTRUCTION; DELIVERY OFIPREMISESLEUBSTANTIAL COMPLETIONt PUNCH LIST ITEMS 3.1 Permits. Landlord will cause Landlord's Architect and the Engineers to submit the Approved Working Drawings to the appropriate governmental entities and otherwise apply for all applicable building and other permits and approvals (collectively, "Permits") (!rally) necessary or required (in Landlord's good faith discretion) for the Contractor to commence, perform and fully complete the construction of the Tenant Improvements. Neither Landlord nor any Landlord Party shall have any obligation or liability to Tenant if any Permit (including, without limitation, any building permit, certificate oroccuponcy, or equivalent) is not timely or otherwise Issued, 3.2 Landlord's Solectlar and Retention of the Contraetor. 3.2.1 Landlord shall submit the Construction Drawings for the Premises on a fixed contract amount (or GMAX) basis to a general contractor selected by Landlord (the "Contractor"), which Contractor shall be independently retained by Landlord (pursuant to such construction contract form as Landlord shall in good faith determine) to construct the Tenant Improvements in accordance with the Construction Drawings. Landlord reserves the right to designate the subcontractor or subcontractors to perform particular trades (or components of) the Tenant Improvements such as tire/life safety, HVAC, structural and electrical work. 3.2.2 Landlord reserves the absolute right, without the need for consultation with or the consent of Tenant, to terminate the Contractor for nonperformance (as determined in good faith by Landlord) and in such case Landlord may select another general contractor to complete the Tenant Improvements, Notwithstanding any provision of this Work Letter to the contrary, Tenant hereby waives all claims against Landlord, and Landlord shall have no responsibility or liability to Tenant, on mccomtt of any nonperformance or ally misconduct of any Contractor (or any subcontractor thereof) for any reason. 3.2.3 If the Tenant Improvements shall constitute "public works: pursuant to Labor Code §1720.2, the following shall apply: (a) Landlord shall require the Contractor to comply with (and to cause its subcontractors to comply with) prevailing wage requirements and be subject to restrictions and penalties in accordance with §1770 et seq, of the Labor Code which requires prevailing wages be paid to appropriate work classifications in all bid specifications and subcontracts. (b) Landlord shall require the Contractor to furnish all subcontractors/employzes a copy of the Department of Industrial Relations prevailing wage rates which Lessor will post at due job site. For further infornotion on prevailing wage: http://www.dir on eov/dlsr/statistics re ea •ch. to (c) Landlord shall require the Contractor to comply with (and to cause its subcontractors to comply with) the payroll record keeping and availability requirement ot•§l776 of the Labor Code. (d) Landlord shall require the Contractor to (and to cause its subcontractors to Lessor/contractor to) make travel and subsistence payments to workers needed for performance of work in accordance with the Labor Code. (a) Prior to commencement of work, Landlord shall require the Contractor to contact the Division of Apprenticeship Standards and comply with § 1777.5, §1777.6, and § 1777.7 of the Labor Code and Applicable Regulations. 3.3 Delive v Of Premises; Sub tantial Comnletion Punch List Items. 3.3.1 Dellveiv of Premises. Landlord shall deliver the Premises to Tenant upon Substantial Completion of the Tenant Improvements. Subject to Landlord's obligations under this Work Letter (including Landlord's obligations to perfomu (or cause to be perfonned) die Landlord's Work and to construct (or cause to be constructed) the Tenant Improvements in accordance with the Construction Drawings) and to all of Landlord's other express obligations under the Lease (including, under Section 21 of the Lease), Landiord shall have no duty or obligation to improve, or pay for any improvement for, the Premises or any portion thereof and Tenant shall accept the same in its Tenant shall accept the Premises in its•then existing condition on the Delivery Date, "AS -IS", "WITH ALL FAULTS". 3.3.2 SML31111111111111 ClInitilption. For purposes of this Lease, "Substantial Completion" shall occur upon (and the Premises shall be "Substantially Complete" upon) the substantial completion orconstructlon of the Tenant Improvements pursuant to the Approved Working Drawings, as evidenced by a "signoll" on the building permit card by an inspector of the applicable governmental authority (typically the city in . which the Building is located), with die exception of any Punch List Items (dented below) mid any tenant fixtures. work -stations, built-in furniture, or equipment to be Installed by Tenant or under the supervisiot o f Contractor. 33.3 Pouch List Items. Alter the Substantial Completion by Landlord of the Tenant Improvements, represcnmtives or Landlord, Tenm t mid the Contractor shall completely inspect the Promises and complete a list (the "Punch LisC) or all Punch List items (defined below). Authorized representatives ort.midlord. Tenant and the Contractor shall execute said Punch List to indicate their approval thereof. Landlord shall cause the Contractor to complete all Punch List Items described oil the Pmich List as soon as reasonably possible following die approval orsuch Punch List. As used herein, "Punch List Items" means all items of construction which entail one or more details of constmetiun. decoration. mechanical adjustment or installation that do not materially and adversely affect the use and occupancy of any portion of the Premises fir the normal conduct of'renanCs• business. 801 WClair Center Dr—C'lly af.Saunn, Inn Lrmsu 3 Exhibit C