80A - PH AGMT WITH COUNTY OF ORANGE 65 YR GROUND LEASE

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i0a:11-111 a capacity, efficiency, useful life or economy of operation of the Improvements or their major systems, after the completion of the Initial Improvements ("Permitted Capital Expenditure(s)"). 5.6.3. The Capital Improvement Fund shall not be used to fund any portion of the construction cost of the Initial Improvements. In addition, Permitted Capital Expenditures shall not include the cost of periodic, recurring or ordinary maintenance expenditures or maintenance, repairs or replacements that keep the Improvements in an ordinarily efficient operating condition, but that do not significantly add to their value or appreciably prolong their useful life. Permitted Capital Expenditures must constitute capital replacements, improvements or equipment under generally accepted accounting principles consistently applied or constitute qualifying aesthetic improvements. Permitted Capital Expenditures shall not include costs for any necessary repairs to remedy any broken or damaged Improvements, all of which costs shall be separately funded by Tenant. 5.6.4. All specific purposes and costs for which Tenant desires to utilize amounts from the Capital Improvement Fund shall be at Tenant's reasonable discretion and subject to Lessor's written approval as provided for in Section 5.6.9, below. Tenant shall furnish to the Lessor applicable invoices, evidence of payment and other back-up materials concerning the use of amounts from the Capital Improvement Fund. 5.6.5. The Capital Improvement Fund shall be held in an account established with a Lender acceptable to the Lessor, into which deposits shall be made by Tenant pursuant to Section 5.6.8, below. 5.6.6. Tenant shall have the right to partly or fully satisfy the Capital Improvement Fund obligations of this Section 5.6 with capital improvement reserves (or replacement reserves) required by Tenant's Leasehold Mortgagees or the Limited Partner, as long as such capital improvement reserves or replacement reserves are in all material respects administered and utilized in accordance, and otherwise comply, with the terms, provisions and requirements of this Section 5.6. 5.6.7. In the event of default by Tenant and the early termination of this Lease, the Lessor shall have full access to the Capital Improvement Fund, provided the Tenant's Leasehold Mortgagee does not use it within a reasonable time for the purposes stated in this Section 5.6; provided, however, that Lessor's rights under this Section 5.6.7 are hereby made subject and subordinate to the lien of each Leasehold Mortgage. 5.6.8. Commencing on the fifteenth (15th) day of the month during which the fifth (5th) anniversary of the Commencement Date occurs, and continuing on or before the fifteenth (15th) day of each month thereafter until five (5) years prior to the expiration of the Term, Tenant shall make a monthly deposit to the Capital Improvement Fund in an amount equal to one percent (1%) of total rent collected by Tenant from sub -tenants for the previous month. All interest and earnings on the Capital Improvement Fund shall be added to the Capital Improvement Fund, but shall not be treated as a credit against the Capital Improvement Fund deposits required to be made by Tenant pursuant to this Section 5.6. 5.6.9. Disbursements shall be made from the Capital Improvement Fund only for costs which satisfy the requirements of this Section 5.6. For the purpose of obtaining the Lessor's prior approval of any Capital Improvement Fund disbursements, Tenant shall submit to the Lessor on an annual calendar year basis a capital expenditure plan for the upcoming year which details the amount and purpose of anticipated Capital Improvement Fund expenditures ("Capital Improvement Page 122 .O M