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EXHIBIT 10.28
NET LEASE AGREEMENT (OFFICE)
ROCKLIN, CALIFORNIA
BETWEEN
STANFORD RANCH I, LLC,
A DELAWARE LIMITED LIABILITY COMPANY
AND
FINANCIAL PACIFIC INSURANCE COMPANY,
A CALIFORNIA CORPORATION
JUNE 11, 1996
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TABLE OF CONTENTS
PAGE(S)
1. BUILDING IMPROVEMENTS ........................................ 4
2. PREMISES ..................................................... 9
3. ACCEPTANCE OF PREMISES ....................................... 9
4. TERM .........................................................10
5. RENT .........................................................10
6. SECURITY DEPOSIT .............................................11
7. TAXES ........................................................11
8. USE; LIMITATION ON USE .......................................13
9. MAINTENANCE ..................................................15
10. ALTERATIONS ..................................................15
11. MECHANIC'S LIEN ..............................................16
12. UTILITIES AND SERVICES .......................................16
13. INDEMNITY, EXCULPATION AND INSURANCE .........................17
14. DESTRUCTION ..................................................19
15. CONDEMNATION .................................................23
16. ASSIGNMENT ...................................................24
17. DEFAULT ......................................................26
18. SUBORDINATION; ESTOPPEL ......................................29
19. SURRENDER OF PREMISES; HOLDING OVER ..........................30
20. ENVIRONMENTAL PROVISIONS .....................................31
21. OPTION TO PURCHASE ...........................................32
22. TERMINATION RIGHTS ...........................................33
23. FIRST RIGHT OF REFUSAL .......................................34
24. SIGNS ........................................................35
25. LANDLORD'S ENTRY ON PREMISES .................................35
26. NOTICE .......................................................36
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27. RECORDATION; QUITCLAIM DEED...................................36
28. SALE OR TRANSFER OF PREMISES..................................36
29. ATTORNEYS' FEES...............................................36
30. MISCELLANEOUS PROVISIONS......................................37
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NET LEASE AGREEMENT (OFFICE)
ROCKLIN, CALIFORNIA
BASIC LEASE Information
Defined Terms: Information:
LEASE DATE: June 11, 1996
LANDLORD: Stanford Ranch I, LLC, a Delaware limited
liability company
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
TENANT: Financial Pacific Insurance Company
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (until
Commencement Date)
-----------------------------------------
-----------------------------------------
-----------------------------------------
(after Commencement Date)
PREMISES: The Premises referred to in this Lease
consist of the parcel ("LOT") known as Lot
12 in ▇▇▇▇▇▇▇▇ Center within Stanford Ranch
Rocklin, California, and the approximately
25,000 square foot building ("BUILDING") to
be constructed thereon in accordance with
the provisions of this Lease, as shown in
Exhibit A. The Building and the Land are
collectively referred to as the "PREMISES."
INITIAL TERM: The term of this Lease shall be ten (10)
years, beginning on the Commencement Date
(as hereinafter defined), subject to
extensions pursuant to Section 4b. of this
Lease.
BASE RENT: Twenty Thousand and No/100ths Dollars
($20,000.00) per month, based upon Building
Square Footage (as hereinafter defined) of
twenty-five thousand (25,000), at $.80 per
square foot per month, for years 1 through
5, inclusive, of the Initial Term. Base Rent
may be adjusted in accordance with Section
1h.
Twenty One Thousand Two Hundred Fifty and
No/100ths Dollars ($21,250.00) per month,
based upon Building Square Footage of
twenty-five thousand (25,000), at $.85 per
square foot per month, for years 6 through
10, inclusive, of the Initial Term. Base
Rent may be adjusted in accordance with
Section 1h.
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TENANT'S USE: General office use and no other use without
Landlord's prior written consent.
SECURITY DEPOSIT: Thirty Thousand and No/100ths Dollars
($30,000.00) or, in the alternative,
an irrevocable letter of credit in such
amount, upon terms and conditions reasonably
acceptable to Landlord and Tenant, issued in
the name of Landlord.
BROKER FOR TENANT: Cornish & ▇▇▇▇▇ Commercial
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇
BROKER FOR LANDLORD: N/A
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LIST OF EXHIBITS
A. Description of Premises
B. Site Plan
C. Agreement of Purchase and Sale
D. Legal Description of Parcel 11
E. Legal Description of Parcel 13
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NET LEASE AGREEMENT
(OFFICE)
This Lease is made and entered into by the Landlord and Tenant referred to
in the Basic Lease Information. The Basic Lease Information attached to this
Lease as page 1 is hereby incorporated into this Lease by this reference.
This Lease is intended to be a "NET NET NET" Lease and Tenant shall pay
all expenses associated with maintaining and operating the Premises during the
term of this Lease, including, without limitation, real estate taxes, utilities,
maintenance costs, repair costs, and any insurance premiums. Under no
circumstances or conditions, whether now existing or hereafter arising, or
whether within or beyond the present contemplation of the parties, shall the
Landlord or its successor or assigns be expected or required to make any payment
of any kind whatsoever, or be under any other obligation or liability hereunder,
except as herein otherwise specifically set forth.
1. BUILDING IMPROVEMENTS:
a. SITE PLAN AND PRELIMINARY PLANS: Prior to the Lease Date,
Landlord and Tenant have agreed upon a conceptual site plan and elevations
("SITE PLAN") for the Building, a copy of which is attached hereto as Exhibit B.
Following the Lease Date, Landlord shall cause its engineer ("ENGINEER") to
prepare and deliver to Tenant a set of draft preliminary plans and
specifications ("PRELIMINARY PLANS"), based upon the Site Plan, setting forth
the description of (i) the shell of the Building, and (ii) the space plan of the
Premises and the improvements to be constructed therein, which shall include a
description of the materials to be used therein, and the electrical, mechanical
and HVAC systems, except as provided below, to be installed within the Building.
The improvements described in subsection (ii) are referred to as the "TENANT
IMPROVEMENTS."
Landlord and Tenant agree that the Preliminary Plans shall include
descriptions of the following, which improvements shall be supplied by Landlord
at its sole cost and expense and shall not be within the definition of Tenant
Improvements:
(i) Fire safety sprinklers;
(ii) Landscaping;
(iii) Parking lot and striping;
(iv) Electrical with power panel to Building;
(v) Planter boxes with automatic irrigation;
(vi) Exterior lighting with photo sensors and timers;
(vii) Driveways;
(viii) Gutters;
(ix) Sidewalks;
(x) Storm drains;
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(xi) Base plumbing for water, sewer, drainage to the
Building;
(xii) Exterior windows;
(xiii) Three (3) exit double doors; and
(xiv) Fire alarms.
Tenant shall approve or disapprove of the Preliminary Plans within
twenty (20) days following Tenant's receipt of such documents by providing
Landlord with written notice ("OBJECTION NOTICE") of such determination within
such time period. The failure of Tenant to provide such notice, and the
subsequent failure of Tenant to respond within five (5) days following receipt
of a second written notice from Landlord, shall be deemed Tenant's approval of
the Preliminary Plans. In the event that Tenant disapproves of the Preliminary
Plans as provided herein, Landlord and Tenant shall use their good faith efforts
and due diligence to resolve the matters set forth in the Objection Notice to
the reasonable satisfaction of Landlord and Tenant; provided, however, if
Landlord and Tenant have not resolved such matters within twenty (20) days
following Landlord's receipt of the Objection Notice, such disputed matter shall
be submitted to an engineer or architect, reasonably acceptable to Landlord and
Tenant, who shall render a determination of such matter within five (5) days
following such appointment, which determination shall be binding upon Landlord
and Tenant. Upon Landlord and Tenant reaching agreement upon the Preliminary
Plans, such document shall be referred to as the "APPROVED PRELIMINARY PLANS."
b. ABOVE STANDARD BUILDING IMPROVEMENTS: Landlord acknowledges
that Tenant desires certain improvements within and adjacent to the Building to
be constructed by Landlord, which otherwise would be done by contractors
retained by Tenant, but due to Landlord's construction of the Building in
accordance with the Preliminary Plans, it is reasonable that Landlord construct
such items on Tenant's behalf. Such items, collectively referred to as
"ABOVE-STANDARD IMPROVEMENTS", are as follows and shall be described in greater
detail in the Preliminary Plans:
(i) Two (2) additional exit double doors
(approximately Four Thousand One Dollars ($4,100.00));
(ii) Installation, below concrete work, of conduit (one
inch in diameter) for use of video surveillance equipment, at a cost of
approximately Five Dollars ($5.00) per lineal foot; and
(iii) Concrete patio, broom finish, along the western
side of the Building (size approximately fifteen feet by one hundred forty feet
(15' x 140') at a cost of approximately Five Thousand Two Hundred Fifty Dollars
($5,250.00).
Landlord's cost associated with the procurement of materials, construction and
installation of the Above-Standard Building Improvements shall be paid for out
of the Allowance (as hereafter defined), and such cost shall be detailed in the
Tenant Improvement Bid (as hereafter defined).
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c. ALLOWANCE: Landlord agrees to pay a maximum amount of Twenty
Two and No/100ths Dollars ($22.00) per square foot of the Building ("ALLOWANCE")
for the obtaining of materials, designing work, construction and installation of
the Tenant Improvements. Landlord shall cause Boomer Construction, Sierra
Olympus Construction, ▇▇▇▇ Construction, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, Inc., ▇▇▇▇
Construction, and Kimmel Construction to issue construction bids for the
construction of the Building and Above-Standard Improvements, and in addition to
such bids, shall cause the aforementioned contractors, as well as ASI
Construction and ▇▇▇▇▇ Construction, to issue construction bids for the Tenant
Improvements. Landlord shall retain the contractor with the lowest competent bid
for such construction projects, and shall provide Tenant with written notice of
such selection, as well as a summary of such bids, concurrent with the delivery
of the Preliminary Plans. Tenant shall have the right to cause Landlord to
modify the Preliminary Plans, as they relate to the Tenant Improvements, up to
three (3) times by delivery of an Objection Notice as provided in Section la to
Landlord, in which case, to the extent required, Landlord shall obtain a revised
construction bid from the contractor selected for such construction. The bid
amount agreed upon pursuant to this Section shall be referred to as the "FINAL
TENANT IMPROVEMENT COST." To the extent that the Final Tenant Improvement Cost
is in excess of the Allowance ("ABOVE-ALLOWANCE AMOUNT"), prior to the
commencement of construction of the Tenant Improvement, Tenant shall pay
one-half (1/2) of such excess to Landlord, and the remaining one-half (1/2) of
such excess shall be payable on the Commencement Date. To the extent that
Landlord's actual cost relating to the construction of the Tenant Improvements
is less than the Allowance, Landlord shall credit the amount of such savings
against the first payment of Base Rent due following the Commencement Date.
d. FINAL PLANS: Within sixty (60) days following agreement upon
the Approved Preliminary Plans and the Final Tenant Improvement Cost, Landlord
shall prepare and deliver to Tenant final plans and specifications ("FINAL
PLANS") substantially in conformity with the Approved Preliminary Plans. Within
fifteen (15) days after delivery of the Final Plans, Tenant shall give written
notice of any changes necessary to bring the Final Plans into substantial
conformity with the Approved Preliminary Plans, and Tenant shall not object to
any logical refinement of the Approved Preliminary Plans or any newly arising
applicable governmental laws or regulations. Failure of Tenant to deliver to
Landlord written notice of such changes within the ten (10) day period, and the
subsequent failure of Tenant to respond within five (5) days following receipt
of a written notice from Landlord, shall be deemed approval of the Final Plans.
Upon approval of the Final Plans, both parties shall endorse their approval on
the Final Plans as may be necessary for filing such documents with the
appropriate governmental entity for approval, which shall be the responsibility
of Landlord. Upon obtaining the appropriate approvals of the Final Plan from the
applicable governmental
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entity, such document shall be referred to as the "APPROVED FINAL PLANS."
e. COMMENCEMENT OF CONSTRUCTION: Promptly upon obtaining the
Approved Final Plans, and following Landlord obtaining all requisite permits and
authorizations, Landlord shall commence construction of the building shell and
improvements described therein, which are collectively referred to as the
"BUILDING IMPROVEMENTS," and diligently prosecute such construction to
completion. Landlord, using Landlord's good faith efforts and due diligence,
shall cause the Premises to be Ready for Occupancy (as hereinafter defined),
excepting Punch List Items (as hereinafter defined), on or before August 1, 1997
("COMPLETION DEADLINE"). The Completion Deadline shall be adjusted, on a day to
day basis, as a result of any delays that result from Tenant failing to meet its
obligations at the times required by this Lease.
f. COMPLETION AND DELIVERY: The Premises shall be ready for
occupancy ("READY FOR OCCUPANCY") when (i) construction of the Building
Improvements is substantially completed in accordance with the Approved Final
Plans, (ii) Landlord has obtained for the Premises any permits (temporary or
final) that are legally required for Tenant's occupancy for general office
purposes, but not the operation of Tenant's business, (iii) any and all parking
areas to be constructed by Landlord, as set forth in the Approved Final Plans,
relating to the Premises have been completed, (iv) any and all landscaping,
sidewalks and other outdoor common area improvements in the Approved Final Plans
have been completed, and (v) any all utility hook-ups necessary for the use of
the Building are in place and are fully operational. Landlord shall deliver to
Tenant a written statement certifying (a) that the Premises are Ready for
Occupancy; and (b) the date of such completion. Landlord shall use its good
faith efforts to give Tenant thirty (30) days prior written notice
("PRE-OCCUPANCY NOTICE") of the date when the Premises will be Ready for
Occupancy.
g. EARLY ENTRY: Tenant may, following its receipt of the
Pre-Occupancy Notice, at Tenant's sole risk, enter the Premises and install
trade fixtures, equipment and other tenant improvements in the Premises;
provided, however, that (i) Tenant's early entry shall not unreasonably
interfere with construction of the Building improvements; and (ii) all
provisions of this Lease, excepting the payment of Base Rent, shall apply during
such entrance. Upon Landlord's completion of the Tenant Improvements and
Above-Standard Building Improvements, Tenant shall thereafter be responsible for
all utility charges used at the Premises in conjunction with such
pre-Commencement Date activities by Tenant.
h. COMPLETION DEADLINE: In the event that Landlord has not caused
the Premises to be Ready for Occupancy on or before the Completion Deadline,
this Lease shall remain effective and the following shall apply:
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(1) Upon the Commencement Date, Tenant shall be entitled to
an offset against Base Rent in the amount equal to Tenant's holdover rental
expense incurred by Tenant at its leased premises, located at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, as a result of Landlord's failure
to have the Premises Ready for Occupancy on the Completion Deadline, provided
that in no event shall such amount exceed One Hundred Thousand and No/100ths
Dollars ($100,000.00). Tenant shall provide Landlord with an invoice of such
expense prior to the Commencement Date, provided that delay in doing so shall
not release Landlord of its obligations under this Section.
(2) In the event that the Premises is not Ready for
Occupancy by December 31, 1997, for a period of ten (10) days thereafter, Tenant
shall have the right to terminate this Lease by providing Landlord with written
notice of such election, in which case this Lease shall terminate, and the
parties shall have no further obligations hereunder, except for those
obligations of Landlord and Tenant hereunder which expressly survive the
expiration or early termination of this Lease. The failure of Tenant to deliver
such notice within such time period shall be deemed a waiver of such right to
terminate. For the purpose of this Lease, the Completion Deadline shall be
automatically extended for any delays beyond the reasonable control of Landlord,
such as acts of God, fire, earthquake, acts of a public enemy, riot,
insurrection, unavailability of materials, governmental restrictions on the sale
of materials or supplies or on the transportation of such materials or supplies,
strike directly affecting construction or transportation of materials or
supplies, shortages of materials or labor resulting from government controls, or
weather conditions (collectively, "FORCE MAJEURE EVENT"). Landlord shall provide
Tenant with written notice of the occurrence of any Force Majeure Event, which
notice specifies the action or inaction which Landlord contends constitutes such
Force Majeure Event. If Tenant has not objected to such Force Majeure Event, in
writing, within five (5) business days following Tenant's receipt of such
written notice from Landlord, the Force Majeure Event, as set forth in such
notice, shall be deemed to have occurred. If Tenant objects to such Force
Majeure Event, and such objection is not resolved within ten (10) days following
Landlord's receipt of such objection, the disputed matter shall be submitted to
binding arbitration in accordance with the commercial rules of the American
Arbitration Association ("ARBITRATION"). The cost of the Arbitration shall be
paid by the non-prevailing party in accordance with Section 29.
i. MEASUREMENT OF PREMISES AND BUILDING: The total square footage
("SQUARE FOOTAGE") of the Building as shown on the Approved Final Plans, as
amended by notations reflecting the actual construction of the Building, shall
be binding and conclusive on Landlord and Tenant. If the Square Footage of the
Building is different that set forth in the Basic Lease Information, as
determined by the preceding sentence, Landlord and Tenant shall execute a
written amendment to modify the Basic
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Lease information, as well as other modifications due to such change.
j. REPRESENTATIVES: Landlord hereby appoints ▇▇▇▇▇ ▇▇▇▇▇▇ as
Landlord's representative to act for Landlord in all matters covered by Section
1. Tenant hereby appoints ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ as Tenant's representative to act for
Tenant in all matters covered by this Agreement. All inquiries, requests,
instructions, authorizations and other communications with respect to the
matters covered by this Section 1 shall be related to Landlord's representative
or Tenant's representative, as the case may be. Tenant will not make any
inquiries of or request to, and will not give any instructions or authorizations
to any other employee or agent of Landlord, including Landlord's architects,
engineers, and contractors or any of their agents or employees, with regard to
matters covered by this Agreement. Either Landlord or Tenant may change its
representative at any time by written notice to the other.
k. CONDITION OF CONSTRUCTION: As of the Commencement Date,
Landlord represents and warrants that the Building and the Tenant Improvements,
to the extent that such were constructed by or caused to be constructed by
Landlord, are in compliance with all applicable laws, statutes and ordinances,
which includes ADA (as hereinafter defined), and shall be in good working order
and repair.
2. PREMISES: This Lease shall be effective as of the date of execution
hereof by Landlord and Tenant. Landlord hereby leases to Tenant and Tenant
hereby leases from Landlord upon the terms and conditions contained herein the
Premises.
3. ACCEPTANCE OF PREMISES: Excepting Punch List Items, if any, Tenant's
taking possession of the Premises shall constitute Tenant's acknowledgment that
the Premises are in good condition and constructed in accordance with the
provisions of this Lease and that Tenant agrees to accept the same in its
condition existing as of the date of such entry, excepting latent defects, which
shall remain the responsibility of Landlord. Within thirty (30) days after the
Tenant takes possession of the Premises, Tenant shall deliver to Landlord a list
of items ("PUNCH LIST ITEMS") that Tenant reasonably deems that Landlord
complete or correct in order for the Premises to be reasonably acceptable.
Following Landlord's receipt of the Punch List Items, Landlord shall complete
and/or correct such items set forth on the Punch List Items using its good faith
efforts and due diligence within thirty (30) days following Landlord's receipt
of such document. If Tenant does not deliver the Punch List Items to Landlord
within such time period, Tenant shall be deemed to have accepted the condition
of the Premises. Landlord shall use its reasonable efforts to not unreasonably
interfere with Tenant's use of the Premises as a result of such repair work.
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4. TERM:
a. Initial Term: This Lease shall be effective as of the date of
execution hereof by Landlord and Tenant. The Initial Term of this Lease shall
commence (i) on the date the Premises is Ready for Occupancy, or (ii) the first
day of business operation in the Premises by Tenant, whichever is first to occur
("COMMENCEMENT DATE"), and shall expire on the last day of the one hundred
twenty (120th) full month following the Commencement Date ("EXPIRATION DATE"),
unless earlier terminated in accordance with the provisions of this Agreement.
The time period between the Commencement Date and the Expiration Date shall be
referred to as the "INITIAL TERM."
b. OPTION TO EXTEND TERM: Tenant is given the option to extend
the Initial Term on all the provisions contained in this Lease, except for Base
Rent, for two (2) consecutive five (5) year periods ("EXTENDED TERMS") following
the expiration of the Initial Term or Extended Term, as applicable, by giving
written notice of exercise of the option ("OPTION NOTICE") to Landlord at least
one hundred twenty (120) days prior to the expiration of the Initial Term or an
Extended Term, as applicable. Provided that, if Tenant is in default on the date
of giving the Option Notice, the Option Notice shall be totally ineffective, or
if Tenant is in default on the date any Extended Term is to commence, such
Extended Term shall not commence and this Lease shall expire at the end of the
term then in effect, unless, in either of the foregoing cases, Tenant cures the
applicable defaults within the notice and cure periods provided herein. Tenant
shall have no other right to extend the term beyond the two (2) Extended Terms.
Base Rent for the (i) first (1st) Extended Term shall be the amount of ninety
cents ($.90) per Square Foot of the Building, and (ii) second (2nd) Extended
Term shall be the amount of ninety-five cents ($.95) per Square Foot of the
Building.
5. RENT:
a. BASE RENT: Tenant shall pay to Landlord the Base Rent without
deduction, setoff, prior notice, or demand, in advance on or before the first
(1st) day of each month, commencing on the Commencement Date, and continuing
during the Initial Term and any Extended Terms, if applicable. Base Rent for the
first month, or portion of it, shall be paid upon execution of this Lease, which
amount shall be prorated at the rate of one thirtieth (1/30) of the Base Rent
per day for any partial month. All rent shall be paid to Landlord at the address
to which notices to Landlord are given. Landlord acknowledges that prior to the
Lease Date, Tenant has paid Landlord the amount of Fifty Thousand and No/100ths
Dollars ($50,000.00), which amount shall be applied by Landlord as Base Rent the
first (1st) month following the Commencement Date. The balance of such Fifty
Thousand and No/100ths Dollars ($50,000.00) payment, shall be held by Landlord
as the "SECURITY DEPOSIT," or if Tenant utilizes the letter of credit for the
Security Deposit described in the
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Basic Lease Information, such balance shall be credited to next payment of Base
Rent due and payable.
b. LATE CHARGE: If Tenant fails to make any payment of Base Rent
when due, or other charges, within thirty (30) days after receipt of an invoice
(which describes in reasonable detail the basis for such requested payment) from
Landlord, and such default is not cured within ten (10) days following such due
date, Landlord and Tenant agree that it would be impracticable or extremely
difficult to fix the actual damage to Landlord resulting from nonpayment and the
collection efforts of Landlord necessitated thereby. Therefore, Landlord and
Tenant estimate that such damage shall be five percent (5.00%) of the amount in
default, and Tenant shall pay as additional rent, that sum, in addition to all
other sums owing. Acceptance of any late charge shall not constitute a waiver of
Tenant's default with respect to the overdue amount, or prevent Landlord from
exercising any of the other rights and remedies available to Landlord.
6. SECURITY DEPOSIT: Upon execution of this Lease, Tenant shall deposit
with Landlord the Security Deposit as security for the full and faithful
performance by Tenant of the provisions of this Lease. If Tenant is in default,
Landlord may use the Security Deposit, or any portion of it, to cure the default
or to compensate Landlord for all damages which Landlord may suffer by reason of
Tenant's default. Tenant shall immediately on demand pay to Landlord a sum equal
to the portion of the Security Deposit expended or applied by Landlord as
provided in this Section so as to maintain the Security Deposit in the sum
specified. Tenant's failure to forthwith remit to Landlord an amount in cash
sufficient to restore the Security Deposit to the original sum deposited with
thirty (30) days after receipt of such demand from Landlord shall constitute an
event of default under the terms of this Lease. At the expiration or termination
of this Lease, Landlord shall return the Security Deposit to Tenant, less such
amounts as are reasonably necessary to remedy Tenant's default, to repair
damages to the Premises caused by Tenant, or to clean the Premises upon such
termination, as soon as practicable thereafter. Landlord's obligations with
respect to the Security Deposit are those of a debtor and not a trustee.
Landlord may maintain the Security Deposit with Landlord's general and other
funds. Landlord shall not be required to pay Tenant interest on the Security
Deposit. Tenant shall not mortgage, assign, transfer or encumber the Security
Deposit without the prior written consent of Landlord. If Landlord sells its
interest in the Premises, Landlord may deliver the Security Deposit to the
purchaser of Landlord's interest and thereupon be relieved of any further
liability or obligation with respect to the Security Deposit.
7. TAXES:
a. PERSONAL PROPERTY TAXES: Tenant shall pay before delinquency
all taxes, assessments, license fees, and charges (collectively, "TAXES") that
are levied and assessed against Tenant's business or Tenant's personal property
installed or
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located in or on the Premises, and that become payable during the Initial Term
or Extended Terms, if applicable. Upon written demand by Landlord, Tenant shall
furnish Landlord with satisfactory evidence of these payments.
b. REAL PROPERTY TAXES: Tenant shall pay, directly to the
appropriate taxing authority, before delinquency all real property taxes,
general and special assessments, bonds and other assessments (collectively,
"REAL PROPERTY TAXES") levied and assessed against the Premises.
(1) Landlord shall notify Tenant of the Real Property Taxes
following receipt of the tax ▇▇▇▇ shall furnish Tenant with a copy of the tax
▇▇▇▇. Tenant shall pay the Real Property Taxes semiannually not later than ten
(10) days (i) after receipt of the tax ▇▇▇▇, or (ii) prior to the delinquency
date, whichever is later.
(2) Tenant's liability to pay Real Property Taxes shall be
prorated on the basis of a 365-day year to account for any fractional portion of
a fiscal tax year included in the Initial Term.
(3) Tenant, at its cost shall have the right, at any time,
to seek a reduction in the assessed valuation of the Premises or to contest any
Real Property Taxes that are to be paid by Tenant.
(a) Landlord shall not be required to join in any
proceeding or contest brought by Tenant unless the provisions of any law require
that the proceeding or contest be brought by or in the name of Landlord or any
owner of the Premises. In that case, Landlord shall join in the proceeding or
contest or permit it to be brought in Landlord's name as long as Landlord is not
required to bear any cost. Tenant, on final determination of the proceeding or
contest, shall immediately pay or discharge any decision or judgment rendered,
together with all costs, charges, interest, and penalties incidental to the
decision or judgment.
(b) If Tenant does not pay the Real Property Taxes
when due and Tenant seeks a reduction or contests them as provided in this
Paragraph, before the commencement of the proceeding or contest, Tenant shall
furnish to Landlord a surety bond issued by an insurance company suitable to
Landlord and qualified to do business in California. The amount of the bond
shall equal one hundred twenty-five percent (125%) of the total amount of Real
Property Taxes in dispute. The bond shall hold Landlord and the Premises
harmless from any damage arising out of the proceeding or contest and shall
insure the payment of any judgment that may be rendered.
(c) Notwithstanding the definition of Real Property
Taxes, in the event that Landlord conveys its interest in the Premises to a
third party, constituting a "change of ownership" pursuant to the California
Real Estate Tax, resulting
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in a reassessment of the Premises by the taxing authorities, for the purpose of
calculating the incremental increases in the Real Property Taxes as a result of
such change of ownership, the value of the Premises shall not be in excess of:
(i) Two Million, Eight Hundred Thousand and No/100ths Dollars ($2,800,000.00) if
such change of ownership occurs during the first five (5) years following the
Commencement Date; or (ii) Three Million and No/100ths Dollars ($3,000,000.00)
if such change of ownership occurs during the second five (5) years following
the Commencement Date. Landlord shall be responsible for any excess Real
Property Taxes resulting from such change of ownership above the threshold
amounts established in this Section.
(4) Tenant shall not be required to pay any municipal,
county, state, or federal income or franchise taxes of Landlord, or any
municipal, county, state, or federal estate, succession, inheritance, or
transfer taxes of Landlord. If at any time during the Initial Term or Extended
Terms, if applicable, the State of California or any political subdivision of
the state, including any county, city, city and county, public corporation,
district, or any other political entity or public corporation of this state,
levies or assesses against Landlord a tax, fee, or excise on (1) rents, (2) the
square footage of the Premises, (3) the act of entering into this Lease, or (4)
the occupancy of Tenant, or levies or assesses against Landlord any other tax,
fee, or excise, as a direct substitution in whole or in part for, but not in
addition to, any Real Property Taxes, Tenant shall pay, before delinquency such
amount, which for the purpose of this Lease shall be within the definition of
Real Property Tax.
8. USE; LIMITATION ON USE:
a. USE: Tenant shall use the Premises for the Tenant's Use and
for no other use or purpose, without the prior written consent of Landlord.
Tenant shall comply with all the requirements of all easements, cross easements,
joint maintenance obligations and similar matters applicable to the Premises
which are in effect or may become effective with any governmental agency or
private party. Landlord represents and warrants that no such matters, to the
extent imposed by Landlord, shall have an adverse effect in any material respect
on the use of the Premises and associated parking, ingress and egress, for
general office purposes. Tenant shall be responsible for obtaining all
appropriate operating licenses necessary for the Tenant's Use.
b. LIMITATIONS ON USE: Tenant's Use of the Premises shall be in
accordance with the following:
(1) Tenant shall not do, bring, or keep anything in or about
the Premises that will cause a cancellation of any insurance covering the
Premises, or any part thereof or any of its contents. If the rate of any
insurance carried by Landlord is increased as a result of Tenant's use, Tenant
shall pay the Landlord within ten (10) days before the date Landlord is
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obligated to pay a premium on the insurance, or within ten (10) days after
Landlord delivers to Tenant a certified statement from Landlord's insurance
carrier stating that the rate increase was caused solely by an activity on the
Premises as permitted in this Lease, whichever date is later, the sum equal to
the difference between the original premium and the increased premium.
(2) Following the Commencement Date, and subject to
Landlord's representation set forth in Section 1(j) and 3, Tenant shall, at
Tenant's sole expense, comply with all present and future laws, rules,
requirements, ordinances, orders, directions and regulations of any state,
municipal, or other governmental or lawful authority affecting the Premises or
appurtenances thereto, which includes, but is not limited to, the Americans with
Disabilities Act of 1990 (42 U.S.C. 12101 et seq.) ("ADA") (collectively,
"APPLICABLE LAWS"); and, subject to Landlord's representation in Section 1(j)
and 3, Tenant shall, at Tenant's sole expense, make such alterations and
additions to the Premises as may be required to comply with all Applicable Laws;
and Tenant shall not use the Premises or permit anything to be done in or about
the Premises which will in any way conflict with any Applicable Laws. The
judgment of any court of competent jurisdiction or the admission by Tenant in
any action, whether Landlord be a party thereto or not, that Tenant has violated
any Applicable Law shall be conclusive of the fact of Tenant's default under
this Paragraph. If Landlord is subjected to any loss or liability as a result of
Tenant's failure to comply with any Applicable Laws, the same shall be subject
to Tenant's indemnification obligations hereunder.
(3) Tenant shall not use the Premises in any manner that
will constitute waste, nuisance, or unreasonable annoyance (including, without
limitation, the use of loudspeakers or sound or light apparatus that can be
heard or seen outside the Premises) to owners or occupants of adjacent
properties. Tenant shall not use the Premises for the preparation, manufacture,
or mixing of anything that might emit any odor or objectionable noises or lights
onto adjacent properties.
(4) Tenant shall not do anything on the Premises that will
cause damage to the Premises. The Premises shall not be overloaded. No
machinery, apparatus, or other appliance shall be used or operated in or on the
Premises that will in any manner injure, vibrate, or shake the Premises,
excepting customary office equipment used in conjunction with general use (e.g.
copy machines, phone systems, computers, "KACHUNGADA," office apparatus and
similar machines).
(5) Tenant shall not store, use or permit to be used in or
about the Premises any Hazardous Materials (as hereinafter defined), other than
office supplies and typical cleaning materials containing Hazardous Materials
which are customarily for general office use. Tenant shall comply, at its
expense, with all federal, state and local statues or regulations concerning
Hazardous Materials.
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9. MAINTENANCE: Tenant, at its sole cost, shall keep in first class
order, condition and repair, maintain the Premises and every part thereof,
interior and exterior, roof, and all adjacent sidewalks, landscaping, driveways,
parking lots and signs located within or adjacent to the Premises and shall make
all replacements necessary to keep the Premises in such condition. All repairs
and replacements shall be of a quality equal to or exceeding that of the
original. Tenant shall do all acts necessary to comply with all Applicable Laws.
Landlord shall not have any responsibility to maintain the Premises, provided
that Landlord shall remain responsible for the repair of (i) the structure and
foundation of the Building, to the extent such damage was not caused by Tenant,
its employees, agents, contractors, or invitees, and (ii) any latent defects to
the Building, to the extent constructed by Landlord, its agents, employees or
contractors. Tenant waives the provisions of Civil Code Sections 1941 and 1942,
and any amendment or successor statutes thereto, with respect to Landlord's
obligations for tenantability of the Premises and Tenant's right to make repairs
and deduct the expenses of such repairs from rent. Should Tenant fail to make
these repairs and replacements or otherwise to maintain the Premises for a
period of thirty (30) days after written demand by Landlord, or should Tenant
commence or fail to complete, any repainting, repairs or replacements within a
reasonable time after written demand by Landlord, Landlord may make the same
without liability to Tenant for any loss or damage that may occur to Tenant's
business, except any resulting from the gross negligent or intentional acts or
omissions of Landlord, and Tenant shall pay to Landlord the costs incurred by
Landlord in making such repairs or replacements together with interest thereon
at the maximum rate permitted by law from the date of commencement of the work
until repaid. Tenant shall contract with a service company licensed and
experienced in servicing HVAC equipment and approved by Landlord for regular
maintenance and replacement, if required by Landlord, of the HVAC equipment
serving the Premises. The cost of the contract and any required replacements or
repairs shall be paid by Tenant.
10. ALTERATIONS:
a. LANDLORD CONSENT REQUIRED: Tenant shall not make any
alterations to the Premises without Landlord's prior written consent.
Notwithstanding the foregoing, Tenant shall be entitled to make nonstructural
internal modifications to the Building, which do not effect the base electrical
or mechanical systems of the Building, without the prior written consent of
Landlord, which are not in excess of Twenty Five Thousand and No/100ths Dollars
($25,000.00) during any year within the Initial Term, or Extended Term, as
applicable. Any alterations made shall comply with Applicable Law and shall
remain on and be surrendered with the Premises on expiration or termination of
the Initial Term or Extended Term, if applicable, except that Landlord can elect
at the time Tenant seeks Landlord's approval of the alterations, to require
Tenant to remove any alterations that Tenant has made to the Premises. If
Landlord so elects, Tenant, at its cost, shall restore the Premises to the
condition designated by Landlord in
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its election before the last day of the Initial Term or Extended Term, if
applicable, or within thirty (30) days after notice of election is given,
whichever is later.
b. NOTICE: If Tenant makes any alterations to the Premises as
provided in this Section, the alterations shall not be commenced until ten (10)
days after Landlord has received written notice from Tenant stating the date the
installation of the alterations is to commence so that Landlord can post and
record an appropriate notice of nonresponsibility.
c. TRADE FIXTURES: Tenant may install fixtures, machinery or
other equipment. Except for items belonging to Landlord, Tenant may remove any
of such trade fixtures or equipment upon the termination of this Lease; provided
that Tenant is not in default under the terms and conditions of this Lease.
11. MECHANIC'S LIEN:
a. TENANT PAYS CONSTRUCTION COSTS: Tenant shall pay all costs for
construction done by it or caused to be done by it on the Premises which
construction is beyond the scope of construction to be performed by Landlord
pursuant to Section 1. Tenant shall keep the Premises free and clear of all
mechanics' liens resulting from construction done by or for Tenant.
▇. ▇▇▇▇ RELEASE BOND: Tenant shall have the right to contest the
correctness or the validity of any such lien, if immediately on demand by
Landlord, Tenant procures and records a lien release bond issued by a
corporation authorized to issue surety bonds in California in an amount equal to
one and one-half (1-1/2) times the amount of the lien. The bond shall meet the
requirements of Civil Code Section 3143, and any amendment or successor statute
thereto, and shall provide for the payment of any sum that the claimant may
recover on the claim (together with costs of suit if recovered in the action.)
12. UTILITIES AND SERVICES:
Tenant shall make all arrangements for and pay for all utilities and
services furnished to or used by it, including, without limitation, gas,
electricity, water, telephone service, and trash collection, and for all
connection charges. Landlord shall not be liable for any failure or interruption
of any utility service being furnished to the Premises, and no such failure or
interruption shall entitle Tenant to terminate this Lease. Notwithstanding the
preceding sentence, in the event that the cause of such failure or interruption
in gas, electricity, water or telephone service to the Premises was a result of
an act taken by Landlord, its agents, employees, contractors or subcontractors,
and Landlord, using its good faith efforts and due diligence, does not
reestablish such utility service within two (2) business days following
Landlord's receipt of written notice from Tenant, Tenant shall be entitled to an
abatement of
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Base Rent from the date of such failure or interruption until such utility
service is restored.
13. INDEMNITY, EXCULPATION AND INSURANCE:
a. WAIVER OF LIABILITY: Landlord shall not be liable to Tenant
and Tenant hereby waives all claims against Landlord, its partners, officers,
trustees, affiliates, directors, shareholders, employees, contractors, agents
and representatives (collectively, "AFFILIATES") for any injury or damage to any
person or property occurring or incurred in connection with or in any way
relating to the Premises from any cause. Without limiting the foregoing, neither
Landlord nor any of its Affiliates shall be liable for and there shall be no
abatement of rent for (i) any damage to Tenant's property stored with or
entrusted to Affiliates of Landlord, (ii) loss of or damage to any property by
theft or any other wrongful or illegal act, or (iii) any injury or damage to
persons or property resulting from fire, explosion, falling plaster, steam, gas,
electricity, water or rain which may leak from any part of the Premises or from
the pipes, appliances, appurtenances or plumbing works therein or from the roof,
street or sub-surface or from any other place or resulting from dampness or any
other cause whatsoever or from the acts or omissions of visitors to the Premises
or from any other cause whatsoever, or (iv) any diminution or shutting off of
light, air or view by any structure which may be erected on lands adjacent to
the Premises. Tenant agrees that in no case shall Landlord ever be responsible
or liable on any theory for any injury to Tenant's business, loss of profits,
loss of income or any other form of consequential damage. Tenant shall give
prompt notice to Landlord in the event of (a) the occurrence of a fire or
accident in the Premises, or (b) the discovery of any defect therein or in the
fixtures or equipment thereof. Notwithstanding any other provision of this Lease
to the contrary, Tenant waives any claims based on damage or injury resulting
from Landlord's failure to police or provide security for the Premises.
b. INDEMNIFICATION: Tenant shall indemnify, defend (with legal
counsel selected by Landlord and consented to by Tenant), protect and hold
Landlord and the Premises harmless from and against any and all claims, suits,
judgments, losses, costs, obligations, damages, expenses, interest and
liabilities, including, without limitation, reasonable attorneys' fees,
resulting from Tenant's use of the Premises, or for any injury or damage to any
person or property whatsoever arising out of or in connection with this Lease,
the Premises or Tenant's and/or its patrons' activities in the Premises,
including, without limitation, when such injury or damage has been caused in
whole or in part by the act, negligence, fault or omission of Tenant, its
agents, servants, contractors, employees, representatives, licenses, patrons or
invitees. Without limiting the foregoing, Tenant shall reimburse Landlord for
all expenses, damages and fines incurred or suffered by Landlord by reason of
any breach, violation or non-performance by Tenant, its agents, servants, or
employees, of any covenant of this Lease, or by reason of damage to persons or
property caused by moving property of or for Tenant
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in or out of the Premises, or by the installation or removal of furniture or
other property, or by reason of carelessness, negligence or improper conduct of
Tenant or its agents, employees, or servants in the use or occupancy of the
Premises. Nothing contained in this Section 13 shall obligate Tenant to
indemnify Landlord against Landlord's own gross negligence or willful acts. The
provisions of this Section 13 shall survive the expiration or earlier
termination of this Lease.
c. PUBLIC LIABILITY AND PROPERTY DAMAGE INSURANCE: Tenant at its
cost shall maintain public liability and property damage insurance with a One
Million and No/100ths Dollar ($1,000,000.00) public liability and property
damage insurance policy, plus a Five Million and No/100ths Dollars
($5,000,000.00) public liability and property damage umbrella policy, insuring
against all liability of Tenant and its authorized representatives arising out
of and in connection with Tenant's use or occupancy of the Premises. All public
liability insurance and property damage insurance shall insure performance by
Tenant of the indemnity provisions of Section 12. Both parties shall be named as
additional insureds, and the policy shall contain cross-liability endorsements,
(if commercially available).
d. TENANT'S FIRE INSURANCE: Tenant at its cost shall maintain on
all Tenant Improvements and alterations, in, on, or about the Premises, a policy
of standard fire and extended coverage insurance, with vandalism and malicious
mischief endorsements, to the extent of full replacement value, with a
replacement cost endorsement. The proceeds from any such policy shall be used by
Tenant for the replacement of personal property or the restoration of any Tenant
Improvements or any alterations that may have been made to the Premises by
Tenant.
e. FIRE INSURANCE ON BUILDING AND OTHER IMPROVEMENTS: Tenant
shall maintain on the building and other improvements that are a part of the
Premises a policy of standard fire and extended coverage insurance, with
vandalism and malicious mischief endorsements, to the extent of full replacement
value, with a replacement cost endorsement. The insurance policy shall be issued
in the names of Landlord and Tenant as their interests appear. The insurance
policy shall provide that any proceeds shall be made payable to Landlord.
Tenant's obligation to pay the insurance costs shall be prorated for any partial
year following the Commencement Date or as of the Termination Date. The proceeds
from any such policy shall be used by Tenant for the reconstruction of any
improvements which are damaged by the insurable destruction.
f. WAIVER OF SUBROGATION: The parties release each other, and
their respective authorized representatives, from any claims for damage to any
person or to the Premises and to the fixtures, personal property, Tenant's
improvements, and alterations of either Landlord or Tenant in or on the Premises
that are caused by or result from risks insured against under any insurance
policies carried or required to be carried pursuant to
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this Lease by the parties and in force at the time of any such damage. Each
party shall cause each insurance policy obtained by it to provide that the
insurance company waives all right of recovery by way of subrogation against
either party in connection with any damage covered by any policy. Neither party
shall be liable to the other for any damage caused by fire or any of the risks
insured against and actually paid upon under any insurance policy required by
this Lease.
g. OTHER INSURANCE MATTERS: ALL the insurance required under this
Lease shall:
(1) Be issued by insurance companies authorized to do
business in the State of California, with a financial rating of at least an A +
3A status as rated in the most recent edition of Best's Insurance Reports, or
Financial Pacific Insurance Company, a California corporation, if acceptable to
Landlord's lender or any purchaser of the Premises.
(2) Be issued as a primary policy.
(3) Contain an endorsement requiring thirty (30) days'
written notice from the insurance company to both parties and Landlord's lender
before cancellation or change in the coverage, scope, or amount of any policy.
(4) Each policy, or a certificate of the policy, together
with evidence of payment of premiums, shall be deposited with the other party at
the Commencement Date, and on renewal of the policy not less than twenty (20)
days before expiration of the term of the policy.
14. DESTRUCTION:
a. DESTRUCTION DUE TO RISK COVERED BY INSURANCE: If, during the
Initial Term or Extended Term, if applicable, the Premises are totally or
partially destroyed from a risk covered by the insurance described in Section
13, rendering the Premises totally or partially inaccessible or unusable,
Tenant, at its cost, shall restore the Premises to substantially the same
condition as they were in immediately before the destruction, whether or not the
insurance proceeds are sufficient to cover the actual cost of restoration. Such
destruction shall not terminate this Lease. If the existing laws do not permit
the restoration, following Tenant's exhaustion of all applicable appeal rights,
either party can terminate this Lease immediately by giving written notice to
the other party, in which case this Lease shall be deemed terminated as of the
date of delivery of such notice.
b. DESTRUCTION DUE TO RISK NOT COVERED BY INSURANCE: If, during
the Initial Term or Extended Term, if applicable, the Premises are totally or
partially destroyed from a risk not covered by the insurance described in
Section 13, rendering the Premises totally or partially inaccessible or
unusable, subject to subsections (1), (2) and (3) below, Tenant shall restore
the Premises to substantially the same condition as they were in
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immediately before the destruction. Such destruction shall not terminate this
Lease. If the existing laws do not permit restoration, following Tenant's
exhaustion of all applicable appeal rights, either party can terminate this
Lease immediately by giving notice to the other party, in which case this Lease
shall be deemed terminated as of the date of delivery of such notice.
(1) If the cost of restoration exceeds twenty percent
(20.00%) of the then replacement value of the Premises destroyed and is not an
insured loss, Tenant can elect to terminate this Lease by giving notice to
Landlord within fifteen (15) days after determining the restoration cost and
replacement value, which determination shall be made within thirty (30) days
after the date of the damage and acceptable to Landlord.
(2) If Tenant elects to terminate this Lease as provided
above, Landlord, within fifteen (15) days after receiving Tenant's notice to
terminate, can elect to pay to Tenant, at the time Landlord notifies Tenant of
its election, the difference between twenty percent (20.00%) of the then
replacement value of the Premises destroyed and the actual cost of restoration,
in which case Tenant shall restore the Premises. Tenant shall give Landlord
satisfactory evidence that all sums contributed by Landlord as provided in this
Paragraph have been expended by Tenant in paying the cost of restoration.
(3) If Tenant elects to terminate this Lease, and Landlord
does not elect to contribute toward the cost of restoration as provided in this
Paragraph, this Lease shall terminate as of the date of Tenant's delivery of its
notice to terminate.
c. DESTRUCTION DURING LAST TWELVE MONTHS: Regardless of any
contrary provision in this Lease, if the Building is damaged or destroyed by any
cause to the extent of more than thirty percent (30.00%) of its insurable value
during the last twelve (12) months of the Initial Term, or Extended Terms, as
applicable, Tenant may, at Tenant's sole option, terminate the Lease by written
notice delivered to Landlord within forty-five (45) days of such damage or
destruction, which termination shall become effective on the date of delivery of
such notice. In the event of a termination of the Lease pursuant to this
Section, Tenant shall pay to Landlord all insurance proceeds received by Tenant
as a result of such damage or destruction.
d. TENANT'S RESTORATION OF PREMISES:
(1) If, during the Initial Term or Extended Term, if
applicable, the Premises are destroyed from a risk covered by the insurance
described in Section 13, and the total amount of loss does not exceed Fifty
Thousand and No/100ths Dollars ($50,000.00), Tenant shall make the loss
adjustment with the insurance company insuring the loss. The proceeds shall be
paid directly to Tenant for the sole purpose of making the restoration of the
Premises.
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(2) If, during the Initial Term or Extended Term, if
applicable, the Premises are destroyed from a risk covered by the insurance
described in Section 13, and the total amount of loss exceeds Fifty Thousand and
No/100ths Dollars ($50,000.00), Tenant shall make the loss adjustment with the
insurance company insuring the loss and on receipt of the proceeds shall
immediately pay them to an insurance trustee selected by Landlord ("INSURANCE
TRUSTEE"). If the Premises are destroyed from a risk not covered by the
insurance described in Section 12, and Tenant has the obligation to restore the
Premises, both parties shall deposit with the Insurance Trustee their respective
contributions toward the cost of restoration. All sums deposited with the
Insurance Trustee shall be held for the following purposes and the Insurance
Trustee shall have the following powers and duties:
(a) The sums shall be paid in installments by the
Insurance Trustee to the contractor retained by Tenant, who is acceptable to
Landlord, which approval shall not be unreasonably withheld, as construction
progresses for payment of the cost of restoration. A ten percent (10.00%)
retention fund shall be established that will be paid to the contractor on
completion of restoration, payment of all costs, expiration of all applicable
lien periods, and proof that the Premises are free of all mechanics, liens and
lienable claims.
(b) Payments shall be made on presentation of
certificates or vouchers from the architect or engineer retained by Tenant
showing the amount due. If the Insurance Trustee, in its reasonable discretion,
determines that the certificates or vouchers are being improperly approved by
the architect or engineer retained by Tenant, the Insurance Trustee shall have
the right to appoint an architect or an engineer to supervise construction and
to make payments on certificates or vouchers approved by the architect or
engineer retained by the Insurance Trustee. The reasonable expenses and charges
of the architect or engineer retained by the Insurance Trustee shall be paid by
the Insurance Trustee out of the trust fund.
(c) If the sums held by the Insurance Trustee are not
sufficient to pay the actual cost of restoration, Tenant shall deposit the
amount of the deficiency with the Insurance Trustee within twenty (20) days
after request by the Insurance Trustee indicating the amount of the deficiency.
(d) Any sums not disbursed by the Insurance Trustee
after restoration has been completed and final payment has been made to Tenant's
contractor shall be delivered within fifteen (15) days (after demand made by
either party on the Insurance Trustee) as follows:
(i) First, to Landlord to the extent of
Landlord's contribution to the fund;
(ii) Next, to Tenant to the extent of Tenant's
contribution to the fund; and
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(iii) The balance, if any, to Tenant.
(e) All actual costs and charges of the Insurance
Trustee shall be paid by Tenant.
(f) If the Insurance Trustee resigns or for any reason
is unwilling to act or continue to act, Landlord shall substitute a new trustee
in the place of the designated Insurance Trustee. The new trustee must be an
institutional lender or title company doing business in the area of the
Premises.
(g) Both parties shall promptly execute all documents
and perform all acts reasonably required by the Insurance Trustee to perform its
obligation under this Paragraph.
e. PROCEDURE FOR RESTORING PREMISES: Within thirty (30) days
after the date that Tenant is obligated to commence to restore the Premises,
Tenant at its cost shall prepare final plans and specifications and working
drawings complying with applicable laws that will be necessary for restoration
of the Premises. The plans and specifications and working drawings must be
approved by Landlord. Landlord shall have thirty (30) days after receipt of the
plans and specifications and working drawings to either approve or disapprove
the plans and specifications and working drawings and return them to Tenant. If
Landlord disapproves the plans and specifications and working drawings, Landlord
shall notify Tenant of its objections and Landlord's proposed solution to each
objection. Tenant acknowledges that the plans and specifications and working
drawings shall be subject to approval of the appropriate government bodies and
Franchisor and that they will be prepared in such a manner as to obtain that
approval.
The restoration of the Premises shall be accomplished as follows:
(1) Tenant shall complete the restoration within one hundred
twenty (120) working days after final plans and specifications and working
drawings have been approved by the appropriate government bodies and all
required permits have been obtained (subject to a reasonable extension for
delays resulting from causes beyond Tenant's reasonable control).
(2) Tenant shall retain a licensed contractor, which
contractor shall be subject to the written approval of Landlord, such approval
not to be unreasonably withheld.
(3) Tenant shall notify Landlord of the date of commencement
of the restoration not later than five (5) days before commencement of the
restoration to enable Landlord to post and record notices of nonresponsibility.
(4) Tenant shall accomplish the restoration in a manner that
will cause the least inconvenience, annoyance, and disruption.
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(5) On completion of the restoration, Tenant shall
immediately record a notice of completion in the county in which the Premises
are located.
f. ABATEMENT OF RENT: In case of destruction, there shall be no
abatement or reduction of rent.
g. WAIVER OF CIVIL CODE SECTIONS: Tenant waives the provisions of
Civil Code Sections 1932(2) and 1933(4), and any amendment or successor statute
thereto, with respect to any destruction of the Premises.
15. CONDEMNATION:
a. DEFINITIONS:
(1) "CONDEMNATION" means (a) the exercise of any
governmental power, whether by legal proceedings or otherwise, by a condemnor
and (b) a voluntary sale or transfer by Landlord to any condemnor, either under
threat of condemnation or while legal proceedings for condemnation are pending.
(2) "DATE OF TAKING" means the date the condemnor has the
right to possession of the property being condemned.
(3) "AWARD" means all compensation, sums, or anything of
value awarded, paid, or received on a total or partial condemnation.
(4) "CONDEMNOR" means any public or quasi-public authority,
or private corporation or individual, having the power of condemnation.
b. PARTIES' RIGHTS AND OBLIGATIONS TO BE GOVERNED BY LEASE: If,
during the Initial Term or Extended Term, if applicable, there is any taking of
all or any part of the Premises or any interest in this Lease by condemnation,
the rights and obligations of the parties shall be determined pursuant to this
Section.
c. TOTAL TAKING: If the Premises are totally taken by
condemnation, this Lease shall terminate on the date of taking.
d. PARTIAL TAKING: If any portion of the Premises is taken by
condemnation, this Lease shall remain in effect; except that Tenant can elect to
terminate this Lease if thirty percent (30.00%) or more of the total square
footage in the Building, or fifteen percent (15.00%) of parking for the Premises
(rendering the Tenant's Use in violation with applicable laws, statutes or
ordinances) is taken, or if as a result of such condemnation, Tenant is
prevented from continuing Tenant's Use on the Premises due to applicable
ordinances of governmental entities or agencies having jurisdiction over the
Premises. If Tenant elects to terminate this Lease, Tenant must exercise its
right to terminate pursuant to this Paragraph by giving written notice to
Landlord
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within thirty (30) days after the nature and the extent of the taking have been
finally determined. If Tenant elects to terminate this Lease as provided in this
Paragraph, Tenant also shall notify Landlord of the date of termination, which
date shall not be earlier than thirty (30) days nor later than ninety (90) days
after Tenant has notified Landlord of its election to terminate; except that
this Lease shall terminate on the date of taking if the date of taking falls on
a date before the date of termination as designated by Tenant. If Tenant does
not terminate this Lease within the thirty (30) day period, this Lease shall
continue in full force and effect, except that Base Rent shall be abated as
provided in this Section 15.
(1) EFFECT ON RENT: If any portion of the Building or
parking is taken by condemnation and this Lease remains in full force and
effect, on the date of taking the Base Rent shall be reduced by an amount that
is in the same ratio to Base Rent as the total number of square feet in the
Building taken, or no longer usable due to loss of parking, bears to the total
number of square feet in the Building immediately before the date of taking.
(2) WAIVER: Each party waives the provisions of Code of
Civil Procedure Section 1265.130 allowing either party to petition the superior
court to terminate this Lease in the event of a partial taking of the Premises.
(3) RESTORATION OF PREMISES: If there is a partial taking of
the Premises or parking and this Lease remains in full force and effect, Tenant,
at its cost, shall accomplish all necessary restoration.
(4) ABATEMENT OF RENT: Rent, shall be abated or reduced
during the period from the date of taking until the completion of restoration,
but all other obligations of Tenant under this Lease shall remain in full force
and effect. The abatement or reduction of rent shall be based on the extent to
which the restoration unreasonably interferes with Tenant's use of the Building.
e. AWARD-DISTRIBUTION: The award shall belong to and be paid to
Landlord, except that Tenant shall receive directly from the condemning
authority an amount attributable to alterations made to the Premises by Tenant
in accordance with this Lease, which alterations Tenant has the right to remove
from the Premises pursuant to the provisions of this Lease but elects not to
remove; or, if Tenant elects to remove any such Tenant's improvements or costs
not to exceed the market value of such alterations. Any award by the condemnor
specifically for the loss of Tenant's business shall belong to Tenant.
16. ASSIGNMENT:
a. PROHIBITION AGAINST VOLUNTARY ASSIGNMENT, SUBLETTING, AND
ENCUMBERING: Tenant shall not assign or hypothecate this Lease or any interest
herein (by operation of
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law or otherwise) or sublet the Premises or any part hereof, or permit the use
of the Premises by any party other than Tenant without the prior written consent
of Landlord. Notwithstanding the foregoing, Tenant may assign this Lease to any
corporation which controls, is controlled by or is under common control with
Tenant, or to any corporation resulting from merger or consolidation with
Tenant, or to any person or entity which acquires all of the assets as a going
concern of the business of Tenant that is being conducted on the Premises,
without the prior consent of Landlord, provided that such assignment or sublease
shall in no way release Tenant from any liability under this Lease.
(1) PROCEDURE: In the event that Tenant should desire to
sublet the Premises or any part thereof, or assign this Lease, Tenant shall
provide Landlord with written notice of such desire at least twenty (20) days in
advance of the effective date of such subletting or assignment. Such notice
shall include (i) the name of the proposed subtenant or assignee; (ii) the
nature of business to be conducted by the proposed subtenant or assignee in the
Premises; (iii) the terms and conditions of the proposed assignment or sublease;
and (iv) the current financial statements of the proposed subtenant or assignee.
Landlord shall not unreasonably withhold its consent to a proposed subletting or
assignment, provided that (1) the proposed subtenant or assignee is engaged in a
business which, and the Premises shall be used in a manner which, is consistent
with the permissible use set forth in this Lease; (2) the proposed subtenant or
assignee is a reputable party of reasonable financial worth in light of the
responsibilities involved and Tenant shall have provided Landlord with
reasonable proof thereof; and (3) Tenant is not in default hereunder at the time
it makes its request for such consent. No assignment of Tenant's interest in
this Lease shall relieve Tenant from its obligations pursuant to the provisions
of this Lease.
(2) EXCESS RENT: Fifty percent (50.00%) of all rent received
by Tenant from its subtenants in excess of the rent payable by Tenant to
Landlord under this Lease shall be paid to Landlord, and fifty percent (50.00%)
of any sums to be paid by an assignee to Tenant on consideration of the
assignment of this Lease shall be paid to Landlord.
(3) PAYMENT OF ATTORNEYS' FEES: If Tenant requests Landlord
to consent to a proposed assignment or subletting, Tenant shall pay to Landlord,
whether or not consent is ultimately given, Landlord's reasonable attorneys'
fees incurred in connection with each such request, not to exceed One Thousand
and No/100ths Dollars ($1,000.00).
b. INVOLUNTARY ASSIGNMENT: No interest of Tenant in this Lease
shall be assignable by operation of law (including, without limitation, the
transfer of this Lease by testacy or intestacy). Each of the following acts
shall be considered an involuntary assignment:
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(1) BANKRUPTCY: It Tenant is or becomes bankrupt or
insolvent, makes an assignment for the benefit of creditors, or institutes a
proceeding under the Bankruptcy Act in which Tenant is the bankrupt party; or,
if Tenant is a partnership or consists of more than one person or entity, if any
partner of the partnership or other person or entity is or becomes bankrupt or
insolvent, or makes an assignment for the benefit of creditors;
(2) ATTACHMENT: If a writ of attachment or execution is
levied on this Lease; or
(3) RECEIVER: If, in any proceeding or action to which
Tenant is a party, a receiver is appointed with authority to take possession of
the Premises.
An involuntary assignment shall constitute a default by Tenant and
Landlord shall have the right to elect to terminate this Lease, in which case
this Lease shall not be treated as an asset of Tenant. If a writ of attachment
or execution is levied on this Lease, Tenant shall have twenty (20) days in
which to cause the attachment or execution to be removed. If any involuntary
proceeding in bankruptcy is brought against Tenant, or if a receiver is
appointed, Tenant shall have sixty (60) days in which to have the involuntary
proceeding dismissed or the receiver removed.
17. DEFAULT:
a. TENANT'S DEFAULT: The occurrence of any one or more of the
following events shall constitute a default and breach of this Lease by Tenant:
(1) The abandonment or vacation of the Premises by Tenant
(failure to occupy and operate the Premises for sixty (60) consecutive days
shall be deemed an abandonment).
(2) The failure by Tenant to make any payment of Base Rent
or any other payment required to be made by Tenant hereunder as and when due,
where such failure shall continue for a period of five (5) days after the due
date.
(3) Tenant's failure to observe or perform any of the
covenants, conditions, or provisions of this Lease to be observed or performed
by Tenant, other than as described in subparagraph (b) above, where such failure
shall continue for a period of thirty (30) days after written notice thereof by
Landlord to Tenant; provided, however, that if the nature of Tenant's default is
such that more than twenty (20) days are reasonably required for its cure, then
Tenant shall not be deemed to be in default if Tenant commences such cure within
said thirty (30)-day period and thereafter diligently prosecutes such cure to
completion.
(4) The making by Tenant of any general assignment or
general arrangement for the benefit of creditors, or the appointment of a
trustee or a receiver to take possession
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of substantially all of Tenant's assets located at the Premises or of Tenant's
interest in this Lease, where possession is not restored to Tenant within thirty
(30) days, or the attachment, execution, or other judicial seizure of
substantially all of Tenant's assets located at the Premises or of Tenant's
interest in this Lease, where such seizure is not discharged in thirty (30)
days.
(5) The filing of any voluntary petition in bankruptcy by
Tenant, or the filing of any involuntary petition by Tenant's creditors, which
involuntary petition remains undischarged for a period of thirty (30) days. In
the event that under applicable law the trustee in bankruptcy or Tenant has the
right to affirm this Lease and perform the obligations of Tenant hereunder, such
trustee or Tenant shall, in such time period as may be permitted by the
bankruptcy court having jurisdiction, cure all defaults of Tenant hereunder
outstanding as of the date of the affirmance of this Lease, and provide to
Landlord such adequate assurances as may be necessary to ensure Landlord of the
continued performance of Tenant's obligation under this Lease.
(6) Without the prior written consent of Landlord, which
shall not be unreasonably withheld, selling, leasing, assigning, encumbering,
hypothecating, transferring, or otherwise disposing of all or substantially all
of the Tenant's assets.
b. REMEDIES FOR TENANT'S DEFAULT: In the event of Tenant's default,
Landlord may:
(1) Terminate Tenant's right to possession of the Premises
by any lawful means, in which case this Lease shall terminate and Tenant shall
immediately surrender possession of the Premises to Landlord. In such event,
Landlord shall be entitled to recover from Tenant:
(a) the worth at the time of the award of any unpaid
rent which had been earned at the time of such termination; plus
(b) the worth at the time of the 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 which Tenant proves
could have been reasonably avoided; plus
(c) the worth at the time of the 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 which Tenant proves could be reasonably
avoided; plus
(d) any other amount necessary to compensate Landlord
for all the detriment proximately caused by Tenant's failure to perform its
obligations under this Lease or which in the ordinary course of things would be
likely to result therefrom (including, without limitation, the cost of
recovering possession
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of the Premises, expenses of reletting including necessary renovation and
alteration of the Premises, reasonable attorneys' fees, and real estate
commissions actually paid and that portion of the leasing commission paid by
Landlord and applicable to the unexpired portion of this Lease); plus
(e) such other amounts in addition to or in lieu of
the foregoing as may be permitted from time to time by applicable California
law.
As used in Subsections (a) and (b) above, the "WORTH AT THE TIME OF
THE AWARD" shall be computed by allowing interest at the lesser of ten percent
(10.00%) per annum, or the maximum rate permitted by law per annum. As used in
Subsection (c) above, the "WORTH AT THE TIME OF AWARD" shall be computed by
discounting such amount at the discount rate of the Federal Reserve Bank of San
Francisco at the time of award plus one percent (1.00%).
(2) Continue this Lease in full force and effect, and the
Lease will continue in effect, as long as Landlord does not terminate Tenant's
right to possession, and Landlord shall have the right to collect Rent when due.
During the period Tenant is in default, Landlord may enter the Premises and
relet them, or any part of them, to third parties for Tenant's account. Tenant
shall be liable immediately to Landlord for all costs Landlord reasonably incurs
in reletting the Premises, including, without limitation, brokers, commissions,
expenses of remodeling the Premises required by the reletting, and like costs.
Reletting can be for a period shorter or longer than the remaining term of this
Lease. Tenant shall pay to Landlord the Rent due under this Lease on the dates
the Rent is due, less the rent Landlord receives from any reletting. In no event
shall Tenant be entitled to any excess rent received by Landlord. No act by
Landlord allowed by this paragraph shall terminate this Lease unless Landlord
notifies Tenant in writing that Landlord elects to terminate this Lease. After
Tenant's default and for as long as Landlord does not terminate Tenant's right
to possession of the Premises, if Tenant obtains Landlord's consent, Tenant
shall have the right to assign or sublet its interest in this Lease, but Tenant
shall not be released from liability.
(3) Cause a receiver to be appointed to collect Rent.
Neither the filing of a petition for the appointment of a receiver nor the
appointment itself shall constitute an election by Landlord to terminate the
Lease.
(4) Cure the default at Tenant's cost. If Landlord at any
time, by reason of Tenant's default, reasonably pays any sum or does any act
that requires the payment of any sum, the sum paid by Landlord shall be due
immediately from Tenant to Landlord at the time the sum is paid, and if paid at
a later date shall bear interest at the lesser of ten percent (10.00%) per
annum, or the maximum rate an individual is permitted by law to charge from the
date the sum is paid by Landlord until Landlord is reimbursed by Tenant. The
sum, together with interest on it, shall be additional Rent.
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The foregoing remedies are not exclusive; they are cumulative, in
addition to any remedies now or later allowed by law, to any equitable remedies
Landlord may have, and to any remedies Landlord may have under bankruptcy laws
or laws affecting creditors' rights generally. The waiver by Landlord of any
breach of any term, covenant or condition of this Lease shall not be deemed a
waiver of such term, covenant or condition or of any subsequent breach of the
same or any other term, covenant or condition. Acceptance of Rent by Landlord
subsequent to any breach hereof shall not be deemed a waiver of any proceeding
breach other than a failure to pay the particular Rent so accepted, regardless
of Landlord's knowledge of any breach at the time of such acceptance of Rent.
Landlord shall not be deemed to have waived any term, covenant or condition
unless Landlord gives Tenant written notice of such waiver.
18. SUBORDINATION; ESTOPPEL:
a. SUBORDINATION: This Lease is and shall be subordinate to any
encumbrance now of record or recorded after the date of this Lease affecting the
Building, other improvements, and land of which the Premises are a part. Such
subordination is effective without any further act of Tenant. If any mortgagee,
trustee, or ground lessor shall elect to have this Lease and any options granted
hereby prior to the lien of its mortgage, deed of trust, or ground lease, and
shall give written notice thereof to Tenant, this Lease and such options shall
be deemed prior to such mortgage, deed of trust, or ground lease, whether this
Lease or such options are deeded prior or subsequent to the date of said
mortgage, deed of trust, or ground lease, or the date of recording thereof.
b. ATTORNMENT: In the event any proceedings are brought for
foreclosure, or in the event of a sale or exchange of the real property on which
the Building is located, or in the event of the exercise of the power of sale
under any mortgage or deed of trust made by Landlord covering the Premises,
Tenant shall attorn to the purchaser upon any such foreclosure and sale and
recognize such purchaser as the Landlord under this Lease. Tenant agrees to
execute any documents required to effectuate an attornment or to make this Lease
or any options granted herein prior to the lien of any mortgage, deed of trust,
or ground lease, as the case may be. If Tenant fails to execute and deliver any
such documents or instruments as required hereunder, Tenant irrevocably
constitutes and appoints Landlord as Tenant's special attorney-in-fact to
execute and deliver any such documents or instruments.
c. Notwithstanding Section 18a, Landlord agrees that Tenant's
obligations to subordinate under this Section 18 to any existing or future
ground lease, mortgage, or deed of trust shall be conditioned upon Tenant's
receipt of a non-disturbance agreement from the holder of such encumbrance
(which party is referred to for the purposes of this Section as the "SUPERIOR
LIENOR"). Such non-disturbance agreement shall provide, at a minimum, that (i)
Tenant's possession, and all other rights
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hereunder, of the Premises shall not be interfered with following a foreclosure,
provided Tenant is not in default beyond any applicable cure periods, and (ii)
upon the payment of the amounts required to be paid pursuant to Section 21 of
this Lease, concurrent with the sale of the Premises to Tenant in accordance
with Section 21, such Superior Lienor shall release the Premises from such
encumbrances. Landlord's obligation with respect to such a non-disturbance
agreement shall be limited to obtaining the non-disturbance agreement in such
form as the Superior Lienor generally provides in connection with its standard
commercial loans, however, Tenant shall have the right to negotiate, and
Landlord shall use its good faith efforts and due diligence in assisting Tenant
in the negotiation of, revisions to that non-disturbance directly with the
Superior Lienor. Tenant agrees to use its good faith efforts to reach agreement
with the Superior Lienor upon acceptable terms and conditions of a
nondisturbance agreement. Landlord shall obtain such nondisturbance agreement
from any Superior Lienor holding an existing encumbrance as of the Lease Date
within forty-five (45) days following the Lease Date.
d. ESTOPPEL: Either party shall, within ten (10) days after
written notice from the other party, execute and deliver to requesting party, in
recordable form, a certificate stating that this Lease is unmodified and in full
force and effect, or in full force and effect as modified, and stating the
modifications. The certificate also shall state the amount of Base Rent, the
date to which the rent has been paid in advance, the amount of any security
deposit or prepaid rent and any other information reasonably requested by the
requesting party. Failure to deliver the certificate within the ten (10) days
shall be conclusive that this Lease is in full force and effect and has not been
modified except as may be represented by the party requesting the certificate.
19. SURRENDER OF PREMISES; HOLDING OVER:
a. SURRENDER OF PREMISES: On expiration or ten (10) days after
termination of the Initial Term or Extended Term, if applicable, Tenant shall
surrender to Landlord the Premises and all Tenant's improvements and alterations
in good condition (except for ordinary wear and tear occurring after the last
necessary maintenance made by Tenant and destruction to the Premises as provided
in this Lease), except for alterations that Tenant has the right to remove or is
obligated to remove as provided in this Lease. Tenant shall remove all its
personal property within the above stated time. Tenant shall perform all
restoration made necessary by removal of any alterations or Tenant's personal
property within the time periods stated in this Section.
(1) Landlord can elect to retain or dispose of in any manner
any alterations or Tenant's personal property that Tenant does not remove from
the Premises on expiration or termination of the Initial Term or Extended Term,
if applicable, as allowed or required by this Lease by giving at least ten (10)
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days' notice to Tenant. Title to any such alterations or Tenant's personal
property that Landlord elects to retain or dispose of on expiration of the ten
(10) day period shall vest in Landlord. Tenant waives all claims against
Landlord for any damage to Tenant resulting from Landlord's retention or
disposition of any such alterations or Tenant's personal property. Tenant shall
be liable to Landlord for Landlord's costs for storing, removing and disposing
of any alterations or Tenant's personal property.
(2) If Tenant fails to surrender the Premises to Landlord on
expiration or ten (10) days after termination of the term as required by this
Article, Tenant shall indemnify, defend and hold Landlord harmless from all
claims, damages and liabilities resulting from Tenant's failure to surrender the
Premises, including, without limitation, claims made by a succeeding tenant
resulting from Tenant's failure to surrender the Premises.
b. HOLDING OVER: If Tenant remains in possession of the Premises
after expiration or termination of the Initial Term or Extended Term, if
applicable, or after the date in any notice given by Landlord to Tenant
terminating this Lease, such possession by Tenant shall be deemed to be a
month-to-month tenancy terminable on thirty (30) days notice given at any time
by either party. During any such month-to-month tenancy, Tenant shall pay an
amount equal to one hundred twenty-five percent (125.00%) of the rent required
by this Lease. Except as provided in this Section, all provisions of this Lease,
except those pertaining to term and option to extend, shall apply to the
month-to-month tenancy.
20. ENVIRONMENTAL PROVISIONS:
a. TENANT INDEMNITY: Tenant shall indemnify, defend and hold
harmless Landlord, its employees, agents, contractors, licensees, invitees,
customers, successors and assigns from and against any and all losses, costs,
claims, damages, liabilities and causes of action (including attorneys' fees)
directly or indirectly arising out of or in any way connected with the presence,
use, generation, manufacture, storage, disposal, transportation or release of
Hazardous Materials on, under or about the Premises, including the soils and
groundwaters thereof, caused or authorized by Tenant, including, without
limitation, the cost of any required or necessary repair, clean-up, remediation
or detoxification of Hazardous Materials and the preparation of any closure,
remedial action or other required plans; provided, however, that Tenant shall be
under no obligation under this Section 20(a) with respect to any Hazardous
Materials that (i) were or under the Premises, including the soils and
groundwater thereof, prior to the Commencement Date, (ii) came upon or migrated
to the Premises, including the soils and groundwater thereof, from the land
adjacent to the Premises and not owned or controlled by Tenant, or (iii) results
from the acts or negligence of Landlord, its agents, employees, contractors or
subcontractors. For the purposes of this Lease,
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"HAZARDOUS MATERIALS" shall mean any petroleum based product, flammable
explosives, asbestos, urea formaldehyde, contamination or polluting materials,
substances or wastes or any other substances presently or hereafter defined as
"hazardous substances", "hazardous materials", "hazardous waste", "toxic
substances" or "toxic waste" under any federal, state or local statute,
ordinance, rule or regulation relating to industrial hygiene or to the
environmental conditions on, under or about the Premises, including the soil or
groundwater conditions thereof. Tenant's obligations under the foregoing
indemnity shall survive the termination of this Lease.
b. LANDLORD INDEMNITY: To the best of Landlord's actual current
knowledge, except as disclosed by that certain environmental report-Phase I
("ENVIRONMENTAL REPORT") delivered by Landlord to Tenant prior to the Lease
Date, as of the Lease Date, the Lot does not contain any Hazardous Materials.
Landlord shall, subject to the provisions of this Lease, indemnify, defend and
hold harmless Tenant, its employees, agents, contractors, licensees, invitees,
customers, successors and assigns, from and against any and all losses, costs,
claims, damages, liabilities and causes of action (including attorneys' fees)
arising out of or in any way connected with the presence, use, generation,
manufacture, storage, disposal, transportation, or release of Hazardous
Materials on, under or about the Premises prior to the Commencement Date caused
by Landlord, its agents, employees, contractors or subcontractors, including,
without limitation, the cost of any required or necessary repair, clean-up,
remediation or detoxification of Hazardous Materials and the preparation of any
closure, remedial action or other required plan, to the extent required by
applicable law. Landlord's obligations under the foregoing indemnity shall
survive the termination of this Lease.
21. OPTION TO PURCHASE: In addition to all other rights that Tenant has
under this Lease to use and occupy the Premises during the Term, Landlord grants
Tenant an option ("OPTION") to purchase the Premises on the following terms and
conditions:
a. OPTION TERM: This Option may only be exercised by Tenant
(which specifically excludes any assignee of Tenant in accordance with the
provisions of this Lease) during the Initial Term ("OPTION TERM"). If Tenant
does not exercise the Option during the Option Term, Landlord shall be released
from all obligations under this Option, and all of Tenant's rights under this
Option, legal or equitable, shall cease.
b. TRANSFERABILITY OF OPTION: This Option may be assigned only
with the prior written consent of Landlord, which may be withheld in Landlord's
sole discretion. The Option granted under this Lease is personal to Tenant and
may not be separated from or transferred independently from the Lease.
c. EXERCISE OF OPTION: The Option may be exercised by delivery of
a written notice ("EXERCISE NOTICE") to Landlord prior to the expiration of the
Option Term. It is a condition to
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the effectiveness of Tenant's exercise of the Option that Tenant not then be in
monetary default under the Lease beyond any applicable cure period. If Tenant is
in default under this Lease beyond any applicable cure period at the time Tenant
gives the Exercise Notice, the Exercise Notice shall be void. Simultaneously
with Tenant's delivery of the Exercise Notice, Tenant shall execute and deliver
to Landlord, the Agreement of Purchase and Sale ("PURCHASE AGREEMENT") which
shall be in the form of Exhibit C. The "PURCHASE PRICE" (as defined in the
Purchase Agreement) for the Premises for (i) the first five (5) years of the
Initial Term is the amount of Two Million Five Hundred Thousand and No/100ths
Dollars ($2,500,000.00), and (ii) the final five (5) years of the Initial Term
is the amount of Two Million Seven Hundred Fifty Thousand and No/100ths Dollars
($2,750,000.00); provided that in the event that Landlord conveys fee title in
the Premises to any unrelated third party during the Initial Term, the Purchase
Price for the Premises for (1) the first five (5) years of the Initial Term
shall be increased to Two Million Eight Hundred Thousand and No/100ths Dollars
($2,800,000.00), and (2) the second five (5) years of the Initial Term shall be
increased to Three Million and No/100ths Dollars ($3,000,000.00). The date of
the "CLOSE OF ESCROW" (as defined in the Purchase Agreement) shall be
determinative of the Purchase Price. Within ten (10) days following Landlord's
receipt of the Purchase Agreement, provided that the Option is effective
pursuant to this Section, Landlord shall execute the Purchase Agreement and
return an original thereof to Tenant, and such document shall control the
purchase and sale transaction regarding the Premises. The Purchase Agreement
shall not be effective for any purpose unless Tenant timely and effectively
exercises the Option. To the extent of any inconsistencies between the
provisions of the Purchase Agreement and the Option, the provisions of the
Option shall prevail.
d. NOTICES: The Exercise Notice shall be delivered to Landlord in
accordance with the notice requirements set forth in this Lease.
e. EFFECT OF EXERCISE: In the event that Tenant elects to
exercise the Option and thereafter does not acquire fee title to the Premises
for any reason, this Lease shall remain effective and in full force.
22. TERMINATION RIGHTS: Provided that Tenant is not in default under the
terms and conditions of this Lease beyond any applicable cure period, Tenant
shall have the right to terminate this Lease on the last day of the months set
forth below following the Commencement Date by delivering written notice of such
election to Landlord at least ninety (90) days prior to the last day of the
corresponding month. In the event that Tenant makes such election, as a
condition precedent to the effectiveness of the termination of this Lease,
Tenant shall pay Landlord the corresponding "TERMINATION FEE" set forth below,
which amount is in addition to any other amount which may be owing at such time
by Tenant. Provided that Tenant has complied with the provisions of this
Section, this Lease shall terminate,
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on the last day of the year that such election was made, and the parties shall
have no further obligations hereunder except (i) for those obligations of
Landlord and Tenant hereunder which expressly survive the expiration or early
termination of the Lease; and (ii) that Landlord shall return to Tenant the
unused portion of Security Deposit in accordance with the provisions of this
Lease.
Month following
Commencement Date Termination Fee
----------------- ---------------
Month 60 24 months of the current Base Rent
Month 72 20 months of the current Base Rent
Month 84 16 months of the current Base Rent
Month 96 12 months of the current Base Rent
Month 108 8 months of the current Base Rent
23. FIRST RIGHT OF REFUSAL:
a. Landlord is the owner of two (2) separate parcels, adjacent to
the Premises, referred to as "PARCEL 11" and "PARCEL 13," which described in
Exhibit D and Exhibit E, respectively, attached hereto. At any time during the
Initial Term or Extended Term, if applicable, provided that Tenant is not in
default under the provisions of this Lease beyond any applicable notice and cure
periods, Landlord and Tenant hereby agree that Tenant shall have the first right
of refusal to purchase ("FIRST RIGHT OF REFUSAL") Parcel 11 and/or Parcel 13
from Landlord the terms and conditions set forth in this Section.
b. Landlord shall give Tenant written notice ("OFFER NOTICE") of
any bona fide offer to purchase Parcel 11 and/or Parcel 13 that Landlord intends
to accept, which notice shall advise Tenant of the terms and conditions of such
offer to purchase. On or before 5:00 p.m. on the date which is five (5) days
following Tenant's receipt of the Offer Notice, Tenant shall notify Landlord in
writing whether it elects to purchase Parcel 11 and/or Parcel 13, as applicable,
upon the exact terms and conditions set forth in the Offer Notice. If Tenant
fails to respond in writing to such Offer Notice within the specified time
period, or elects not to exercise its First of Right of Refusal, Buyer's First
Right of Refusal shall terminate and Buyer shall have no further rights under
this Section; provided, however, that if the transaction described in the Offer
Notice does not close, and Seller thereafter elects to accept an additional
offer to purchase Parcel 11 and/or Parcel 13, as applicable, the provisions of
this Section shall apply. Landlord makes no representation or warranty regarding
its efforts, if any, to sell Parcel 11 and/or Parcel 13.
c. For the purpose of this Section, Tenant's "FIRST RIGHT OF
REFUSAL" shall also be applicable to any offer in which Landlord is willing to
accept with regard to a build-to-suit lease transaction on Parcel 11 and/or
Parcel 13, as applicable; provided, however, in such situation, if Tenant elects
to exercise its First Right of Refusal by delivery of an Offer
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Notice as provided in Subsection (b) above, such election shall be to be
purchase Parcel 11 and/or Parcel 13, as applicable, at a cost of Three and
50/100ths Dollars ($3.50) per square foot, increased at a rate of three and
one-half percent (3.50%) per annum, commencing as of the Lease Date, payable in
cash, and closing forty-five (45) days following Landlord's receipt of Tenant's
election to exercise the First Right of Refusal. If Tenant makes such election
(i) Landlord shall not be obligated to construct the intended facility, and (ii)
Landlord and Tenant shall enter into purchase and sale documentation
incorporating the provisions of this Section within ten (10) days following
Tenant's election of the First Right of Refusal which purchase and sale
documentation shall be consistent with the Purchase Agreement, to the extent
applicable.
24. SIGNS:
Tenant shall have the right to place its business sign on the Premises,
provided such sign is in compliance with the applicable ordinances of all
appropriate governmental agencies, the design guidelines of ▇▇▇▇▇▇▇▇ Center,
Tenant obtains the prior written approval of Landlord regarding the sign, which
approval shall not be unreasonably withheld, and that such signage complies with
the CC&Rs (as hereinafter defined). Tenant shall be responsible for the cost of
maintenance and repair of such signage during the term of this Lease and the
removal of such signage upon the expiration or earlier termination of such term.
25. LANDLORD'S ENTRY ON PREMISES: Landlord and its authorized
representatives shall have the right to enter the Premises at all reasonable
times during business hours with reasonable advance notice for any of the
following purposes:
a. To determine whether the Premises are in good condition and
whether Tenant is complying with its obligations under this Lease;
b. To do any necessary maintenance or repair and to make any
restoration to the Premises that Landlord has the right or the obligation to
perform pursuant to the provisions of this Lease;
c. To serve, post, or keep posted any notices required or allowed
under the provisions of this Lease;
d. To post "for sale" signs at any time during the term, to post
"for rent" or "for lease" signs during the last three (3) months of the terms;
e. To show the Premises to prospective brokers, agents, buyers,
tenants, or persons interested in an exchange or purchase, at any time during
the Initial Term or Extended Term, if applicable.
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Landlord shall conduct its activities on the Premises as allowed in
this Article in a manner that will cause the least possible inconvenience,
annoyance, or disturbance to Tenant.
26. NOTICE:
Any notice, demand, request, consent, approval, or communication
that either party desires or is required to give to the other party or any other
person shall be in writing and either served personally or sent by certified
mail, return receipt requested. Any notice, demand, request, consent, approval,
or communication that either party desires or is required to give to the other
party shall be addressed to the other party at the address set forth in this
Lease. Either party may change its address by notifying the other party in
writing of the change of address. Notice shall be deemed communicated within
seventy-two (72) hours from the time of mailing if mailed as provided in this
Article.
27. RECORDATION; QUITCLAIM DEED:
This Lease or a memorandum hereof shall not be recorded. Tenant
shall execute and deliver to Landlord on the expiration or termination of this
Lease, immediately on Landlord's request, a quitclaim deed to the Premises, in
recordable form, designating Landlord as transferee.
28. SALE OR TRANSFER OF PREMISES:
If Landlord sells or transfers all or any portion of the Premises,
Landlord, on consummation of the sale or transfer, shall be released from any
liability thereafter accruing under this Lease.
29. ATTORNEYS' FEES:
If Tenant or Landlord shall be in breach or default under this
Lease, such party (the "DEFAULTING PARTY") shall reimburse the other party (the
"NON-DEFAULTING PARTY") upon demand for any costs or expenses that the
Non-Defaulting Party incurs in connection with any breach or default of the
Defaulting Party under this Lease, whether or not suit is commenced or judgment
entered. Such costs shall include legal fees and costs incurred for the
negotiation of a settlement, enforcement of rights or otherwise. Furthermore, if
any action for breach of or to enforce the provisions of this Lease is
commenced, the court in such action shall award to the party in whose favor a
judgment is entered, a reasonable sum as attorneys, fees and costs. The losing
party in such action shall pay such attorneys' fees and costs. Tenant shall also
indemnify Landlord against and hold Landlord harmless from all costs, expenses,
demands and liability Landlord may incur if Landlord becomes or is made a party
to any claim or action (a) instituted by Tenant against any third party, or by
any third party against Tenant, or by or against any person holding any interest
under or using the Property by license of or agreement with Tenant; (b) for
foreclosure of any lien for labor
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or material furnished to or for Tenant or such other person; (c) otherwise
arising out of or resulting from any act or transaction of Tenant or such other
person; or (d) necessary to protect Landlord's interest under this Lease in a
bankruptcy proceeding, or other proceeding under Title 11 of the United States
Code, as amended. Tenant shall defend Landlord against any such claim or action
at Tenant's expense with counsel reasonably acceptable to Landlord.
30. MISCELLANEOUS PROVISIONS:
a. CC&RS: Tenant agrees to comply with the provisions of any and
all covenants, conditions and restrictions (collectively, "CC&RS"), which
encumber the Premises as of the Lease Date, and any amendments, additions or
modifications thereto in which Tenant has been provided written notice of by
Landlord. The CC&Rs and any amendments, additions or modifications thereto shall
not adversely affect the Tenant's use of the Premises for general office
purposes.
b. TIME OF ESSENCE: Time is of the essence of each provision of
this Lease.
c. CORPORATE AUTHORITY: If Tenant is a corporation, Tenant shall
deliver to the other party on execution of this Lease a certified copy of a
resolution of Tenant's board of directors authorizing the execution of this
Lease and naming the officers that are authorized to execute this Lease on
behalf of the corporation.
d. SUCCESSORS: This Lease shall be binding on and inure to the
benefit of the parties and their successors.
e. REAL ESTATE BROKERS: Each party represents that it has not had
dealing with any real estate broker, finder, or other person, with respect to
this Lease in any manner, except as set forth in the Basic Lease Information.
Each party shall hold harmless the other party from all damages resulting from
any claims that may be asserted against the other party by any other broker,
finder, or other person, with whom the other party has or purportedly has dealt.
f. EXHIBITS: All exhibits referred to are attached to this Lease
and incorporated herein by reference.
g. CALIFORNIA LAW: This Lease shall be construed and interpreted
in accordance with the laws of the State of California.
h. WAIVER: The waiver by Landlord of any breach of any term,
covenant or condition herein contained shall not be deemed to be a waiver of any
subsequent breach of the same or any other term, covenant or condition herein
contained, nor shall any custom or practice which may grow up between the
parties in the administration of the terms hereof be deemed a waiver of, or in
any way affect, the right of Landlord to insist upon the
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performance by Tenant in strict accordance with said terms. The subsequent
acceptance of rent hereunder by Landlord shall not be deemed to be a waiver of
any preceding breach by Tenant of any term, covenant or condition of this Lease,
other than the failure of Tenant to pay the particular rent so accepted,
regardless of Landlord's knowledge of such preceding breach at the time of
acceptance of such rent.
i. EXECUTION: Submission of this instrument for examination or
signature by Tenant does not constitute a reservation of or an option for lease,
and it is not effective as a lease or otherwise until execution and delivery by
both Landlord and Tenant.
j. WAIVER OF CALIFORNIA CODE SECTIONS: Notwithstanding any other
provision of this Lease and in addition to any waivers which may be contained in
this Lease, Tenant waives the provisions of Civil Code Section 1932(2) and
1933(4) with respect to the destruction of the Premises; Civil Code Sections
1932(l), 1941 and 1942 with respect to Landlord's repair duties and Tenant's
right of repair; and Code of Civil Procedure Section 1265.130 allowing either
party to petition the Superior Court to terminate this Lease in the event of a
partial taking of the Premises for public or quasi-public use by statute, by
right of imminent domain, or by purchase in lieu of imminent domain; and any
right of redemption or reinstatement of Tenant under any present of future case
law or statutory provision (including Code of Civil Procedure Section 473,
1174(c) and 1179 and Civil Code Section 3275) in the event Tenant is
dispossessed from the premises for any reason. This waiver applies to future
statutes enacted in addition or in substitution to the statue specified herein,
and this waiver shall apply even though Tenant may be the subject of a voluntary
or involuntary petition in bankruptcy.
k. PROVISIONS ARE COVENANTS AND CONDITIONS: All provisions,
whether covenants or conditions, on the part of Tenant and Landlord, shall be
deemed to be both covenants and conditions.
l. SINGULAR AND PLURAL: When required by the context of this
Lease, the singular shall include the plural.
m. JOINT AND SEVERAL OBLIGATIONS: "PARTY" shall mean Landlord and
Tenant; and if more than one person or entity is Landlord or Tenant, the
obligations imposed on that party shall be joint and several.
n. SEVERABILITY: The unenforceability, invalidity, or illegality
of any provision shall not render the other provisions unenforceable, invalid,
or illegal.
o. CAPTIONS: The captions of this Lease shall have no effect on
its interpretation.
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p. NEGATION OF PARTNERSHIP: Landlord shall not become or be
deemed a partner or a joint venturer with Tenant by reason of the provisions of
this Lease.
q. MORTGAGEE PROTECTION CLAUSE: Tenant agrees to give any
mortgagees and/or trust deed holders, by registered mail, a copy of any notice
of default served upon the Landlord, provided that prior to such notice Tenant
has been notified in writing (by way of notice of assignment of lease, or
otherwise) of the addresses of such mortgagees and/or trust deed holders. Tenant
further agrees that if Landlord shall have failed to cure such default within
the time provided for in this Lease, then the mortgagees and/or trust deed
holders shall have an additional thirty (30) days within which to cure such
default, or if such default cannot be cured within that time, then such
additional time as may be necessary, provided such mortgagees and/or trust deed
holders commence such cure within thirty (30) days and diligently pursue the
remedies necessary to cure such default (including, but not limited to,
commencement of foreclosure proceedings, if necessary to effect such cure), in
which event this Lease shall not be terminated while such remedies are being so
diligently pursued.
r. TENANT FINANCING: Tenant shall not mortgage or encumber the
leasehold estate created by this Lease without Landlord's prior consultation,
review and consent. Landlord may give or withhold such consent in Landlord's
reasonable discretion. Tenant acknowledges that fixtures and equipment
incorporated in or affixed to the Premises, to the extent paid for by the
Allowance, constitute real property improvements to be surrendered upon
termination of the Lease.
s. LIMITATION ON LIABILITY: In consideration of the benefits
accruing hereunder, Tenant and all successors and assigns covenant and agree
that, in the event of any actual or alleged failure, breach or default hereunder
by Landlord: (1) Tenant's sole and exclusive recourse shall be against
Landlord's interest in the Premises. Tenant shall not have any right to satisfy
any judgment which it may have against Landlord from any other assets of
Landlord; (2) No partner, stockholder, director, officer, employee or
beneficiary or trustee (collectively, "Partner") of Landlord shall be sued or
named as a party in any suit or action (except as may be necessary to secure
jurisdiction over Landlord); (3) No service of process shall be made against any
Partner of Landlord (except as may be necessary to secure jurisdiction over
Landlord); (4) No Partner of Landlord shall be required to answer or otherwise
plead to any service of process; (5) No judgment will be taken against any
Partner of Landlord; (6) Any judgment taken against any Partner of Landlord may
be vacated and set aside at any time nunc pro tunc; (7) No writ of execution
will ever be levied against the assets of any Partner of Landlord; and (8) These
covenants and agreements are enforceable both by Landlord and also by any
Partner of Landlord.
t. MODIFICATION FOR LENDER: If, in connection with obtaining
construction, interim or permanent financing for the
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Building, the lender shall request reasonable modifications in this Lease as a
condition to such financing, Tenant will not unreasonably withhold, delay or
defer its consent thereto, provided that such modifications do not increase the
obligations of Tenant hereunder or materially adversely affect the leasehold
interest hereby created or Tenant's rights hereunder.
u. ACCORD AND SATISFACTION; APPLICATION OF DELINQUENT PAYMENTS:
No payment by Tenant or receipt by Landlord of a lesser amount than the rent
payment herein stipulated shall be deemed to be other than on account of the
rent, nor shall any endorsement or statement on any check or any letter
accompanying any check or payment as rent be deemed an accord and satisfaction,
and Landlord may accept such check or payment without prejudice to Landlord's
right to recover the balance of such rent or pursue any other remedy provided in
this Lease. No endorsement on any check nor any letter accompanying any check or
payment of rent or partial payment thereof, shall prevent Landlord from treating
such payment as on account of the earliest delinquent sum owed Landlord, and
Tenant waives the benefit of any contrary court decision or statute (including,
without limitation, Civil Code Section 1479).
v. NO CONSTRUCTION AGAINST DRAFTER: The provisions of this Lease
shall be construed in accordance with the fair meaning of the language used and
shall not be strictly construed against either party. If the parties delete any
provision appearing in the original draft of this Lease, this Lease will be
interpreted as if the deleted language were never a part of this Lease.
w. INDEPENDENT COVENANTS: Each covenant, agreement, obligation or
other provision of this Lease to be performed by Tenant is a separate and
independent covenant of Tenant, and not dependent on the performance of
Landlord's obligations hereunder.
x. ENTIRE AGREEMENT: The terms of this Lease are intended by the
parties as a final expression of their agreement with respect to such terms as
are included in this Lease and may not be contradicted by evidence of any prior
or contemporaneous agreement. The parties further intend that this Lease
constitutes the complete and exclusive statement of its terms and that no
extrinsic evidence whatsoever may be introduced in any judicial proceedings, if
any, involving this Lease.
y. FINANCIAL STATEMENTS: In order to induce Landlord to enter
into this Lease, Tenant agrees that it shall promptly furnish Landlord, from
time to time, upon Landlord's written request, with financial statements
reflecting Tenant's financial condition. Tenant represents and warrants that all
financial statements, records and information furnished by Tenant to Landlord is
true and correct. If Tenant requests in writing, Landlord shall enter into a
confidentiality agreement concerning the materials described in this Section in
a form reasonably acceptable to Landlord and Tenant.
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z. CONSENTS: Except as expressly provided in this Lease, any
consent or approval requested under this Lease by either Tenant or Landlord
shall be granted or withheld in such party's reasonable discretion.
aa. PRELIMINARY REPORT: Prior to the Lease Date, Landlord has
provided Tenant with a preliminary report concerning the Lot which sets forth
all matters encumbering such real property discovered by the issuer of such
report, which report establishes that Landlord holds fee title to the Lot.
LANDLORD: TENANT:
STANFORD RANCH I, LLC, FINANCIAL PACIFIC INSURANCE
a Delaware limited liability COMPANY, a California
company corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ [SIG]
------------------------------- -------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Its: President Its: [not legible]
Date: June 18, 1996 Date: June 18, 1996
----------------------------- -----------------------------
Address: Address:
Stanford Ranch I, LLC 8585 [not legible] Road
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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EXHIBIT A
THAT CERTAIN REAL PROPERTY SITUATED IN THE ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇▇ OF PLACER, DESCRIBED AS FOLLOWS:
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EXHIBIT B
SITE PLAN
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EXHIBIT C
AGREEMENT OF PURCHASE AND SALE
This Agreement of Purchase and Sale ("AGREEMENT"), dated for reference
purposes only , 19 , is entered into by and between STANFORD RANCH I,
LLC, a Delaware limited liability company ("SELLER"), and FINANCIAL PACIFIC
INSURANCE COMPANY, a California corporation ("BUYER").
RECITALS
A. Seller is the owner of certain real property ("REAL PROPERTY"),
located in Rocklin ("CITY"), Placer County ("COUNTY"), California ("STATE"),
also known as Assessor's Parcel Number ____________.
B. The Real Property has constructed thereon a certain building,
containing approximately twenty-five thousand (25,000) gross square feet
("IMPROVEMENTS"). The Real Property and Improvements are collectively referred
to as the "PROPERTY."
C. Buyer, as tenant, and Seller, as Landlord, prior to the Effective
Date, have entered into a certain Net Lease Agreement ("LEASE") dated _______,
pursuant to which Buyer and Seller have entered into this Agreement.
D. Buyer desires to purchase from Seller and Seller desires to sell to
Buyer the Property pursuant to the provisions of this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
contained herein, the parties agree as follows:
AGREEMENT
1. Purchase and Sale. Seller agrees to sell and convey to Buyer, and
Buyer agrees to purchase from Seller, the Property on the terms and subject to
the conditions set forth in this Agreement. For the purposes of this Agreement,
the date which the last party executes this Agreement and delivers it to the
other party shall hereinafter be referred to as the "EFFECTIVE DATE."
2. Purchase Price. The purchase price ("PURCHASE PRICE") for the
Property shall be Dollars ($ ) (to be determined pursuant to
Section 21 of the Lease).
3. Payment of Purchase Price. On or before the Close of Escrow, Buyer
shall deposit with Escrow Holder the remaining portion of the Purchase Price, in
immediately available funds, which shall be paid to Seller at Close of Escrow.
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4. Escrow.
(a) Opening of Escrow. Within two (2) days following the Effective
Date, Buyer shall open an escrow ("ESCROW") with Escrow Holder. Buyer and Seller
agree to execute and deliver to Escrow Holder, in a timely manner, all escrow
instructions necessary to consummate the transaction contemplated by this
Agreement. Any such instructions shall not conflict with, amend or supersede any
portion of this Agreement. If there is any inconsistency between such
instructions and this Agreement, this Agreement shall control.
(b) Close of Escrow. For purposes of this Agreement, "CLOSE OF
ESCROW" shall be defined as the date that the Grant Deed (as hereinafter
defined) is recorded in the Official Records of the County. The Close of Escrow
shall occur within thirty (30) days following the Effective Date ("OUTSIDE
DATE"), unless extended by the mutual written consent of the parties.
5. Conditions of Title. It shall be a condition to the Close of Escrow
and a covenant of Seller that title to the Property be conveyed to Buyer by
Seller by a Grant Deed, which shall be in the form customarily used by Escrow
Holder in the County ("GRANT DEED"), subject only to (a) a lien to secure
payment of real estate taxes, not yet due and payable; (b) the lien of
supplemental taxes, not yet due and payable; (c) exceptions which are approved
and/or accepted by Buyer in writing in accordance with this Agreement; (d) the
CC&Rs (as defined in the Lease); and (e) all applicable laws, ordinances, rules
and governmental regulations (including, but not limited to those relative to
building, zoning and land use) affecting the development, use, occupancy or
enjoyment of the Property (collectively, "APPROVED CONDITIONS OF TITLE").
6. Conditions to Close of Escrow.
(a) Conditions to Buyer's Obligations. The Close of Escrow and
Buyer's obligations to consummate the transactions contemplated by this
Agreement are subject to the satisfaction of the following conditions (or
Buyer's written waiver thereof) which are for Buyer's sole benefit, on or prior
to the dates designated below for the satisfaction of such conditions, or the
Close of Escrow in absence of a specified date:
(i) Title. Buyer shall have the right to approve any and all
matters of and exceptions to title of the Property, including the legal
description, as disclosed by the following documents and instruments
(collectively, "TITLE DOCUMENTS"): (A) a Preliminary Report ("PRELIMINARY
REPORT") issued by Escrow Holder with respect to the Property and all matters
referenced therein; and (B) legible copies of all documents, whether recorded or
unrecorded, referred to in such Preliminary Report. Buyer shall cause Escrow
Holder to deliver the Title Documents to Buyer and Seller within five (5)
calendar days following the Effective Date. Buyer shall have ten (10) calendar
days following its receipt of the Title Documents to give Seller and
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Escrow Holder written notice ("BUYER'S TITLE NOTICE") of Buyer's approval or
disapproval, which shall be made in Buyer's sole and absolute discretion, of the
legal description and every item or exception disclosed by the Title Documents.
The failure of Buyer to give Buyer's Title Notice to Seller within the specified
time period shall be deemed Buyer's disapproval of title to the Property, in
which case the Agreement shall be canceled pursuant to the provisions of this
Section. In the event that Buyer's Title Notice disapproves of any matter of
title shown in the Title Documents, Seller shall, within five (5) calendar days
after Buyer's Title Notice is received by Seller, give Buyer written notice
("SELLER'S TITLE NOTICE") of those disapproved title matters, if any, which
Seller is unable or unwilling to have eliminated from title to the Property by
Close of Escrow. In the event that Seller is unable to remove all of the title
matters objected to by Buyer in Buyer's Title Notice, Buyer shall have three (3)
calendar days from receipt of Seller's Title Notice to notify Seller in writing
that either (1) Buyer is willing to purchase the Property subject to such
disapproved exceptions, or (2) Buyer elects to cancel this transaction. Failure
of Buyer to take either one of the actions described in Subsection (1) or (2)
above shall be deemed to be Buyer's election to take the action described in
Subsection (2) above. In the event this Agreement is canceled or deemed canceled
pursuant to this Section, except as otherwise provided herein, the parties shall
have no further obligations under this Agreement, and all monies delivered to
Escrow Holder by Buyer shall immediately be returned to Buyer.
(ii) Title Insurance. As of the Close of Escrow, Title
Company (as hereinafter defined) shall have issued or shall have committed to
issue the Title Policy (as hereinafter defined) to Buyer.
(iii) Seller's Obligations. As of the Close of Escrow, Seller
shall have performed all of the obligations required to be performed by Seller
under this Agreement.
(b) Conditions to Seller's Obligations. The Close of Escrow and
Seller's obligations to consummate the transaction contemplated by this
Agreement are subject to the satisfaction of the following conditions (or
Seller's waiver thereof) which are for Seller's sole benefit, on or prior to the
dates designated below for the satisfaction of such conditions, or the Close of
Escrow in absence of a specified date:
(i) Buyer's Obligations. As of the Close of Escrow, Buyer
shall have timely performed all of the obligations required by the terms of this
Agreement to be performed by Buyer.
(ii) Buyer's Representations. As of the Close of Escrow, all
representations and warranties made by Buyer to Seller in this Agreement shall
be true and correct as of the Close of Escrow.
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(iii) Outside Date. The Close of Escrow shall occur on or
before the Outside Date.
(c) Failure of Condition to Close of Escrow. Except as provided in
Section 6(a) or 6(b), in the event any of the conditions set forth in Section
6(a) or 6(b) are not timely satisfied or waived by the appropriate benefitted
party, for a reason other than the default of Buyer or Seller, this Agreement
shall terminate, and all other monies delivered to Escrow Holder by Buyer shall
be immediately be returned to Buyer, and, except as otherwise provided herein,
the parties shall have no further obligations hereunder.
7. Deposits By Seller. Unless otherwise provided in this Section, at
least one (1) business day prior to the Close of Escrow, Seller shall deposit
with Escrow Holder the following documents:
(a) Grant Deed. The Grant Deed, duly executed and acknowledged in
recordable form by Seller, conveying fee title to the Property.
(b) FIRPTA Certificate. A certification, acceptable to Escrow
Holder and duly executed by Seller under penalty of perjury setting forth
Seller's address and federal tax identification number in accordance with and/or
for the purpose of the provisions of Sections 7701 and 1445, as may be amended,
of the Internal Revenue Code of 1986, as amended, and any regulations
promulgated thereunder.
(c) California Franchise Tax Withholding. Evidence satisfactory to
Buyer and Escrow Holder that Seller is exempt from the provisions of the
withholding requirements of the California Revenue and Taxation Code, as
amended, and that neither Buyer nor Escrow Holder is required to withhold any
amounts from the Purchase Price pursuant to such provisions.
8. Deposits By Buyer. At least one (1) business day prior to the Close
of Escrow, Buyer shall deposit or cause to be deposited with Escrow Holder the
required funds which are to be applied towards the payment of the Purchase
Price.
9. Issuance of Title Insurance. At the Close of Escrow, Escrow Holder's
title insurer ("TITLE COMPANY"), shall issue to Buyer its standard form
California Land Title Association ("CLTA") Owner's Policy of Title Insurance
showing fee title to the Property vested in Buyer subject only to the Approved
Conditions of Title ("TITLE POLICY"). The Title Policy shall be issued with
liability in an amount equal to the Purchase Price. Seller shall pay for the
expense of the Title Policy. If Buyer elects to have Title Company issue its
American Land Title Association ("ALTA") Owner's Policy of Title Insurance,
Buyer shall pay for the expense of such ALTA premium increment, any endorsement
thereto and any survey costs.
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10. Costs and Expenses. Except as otherwise specified in this Agreement,
Seller and Buyer shall equally divide (a) all escrow fees and costs; (b) any
document recording charges; and (c) documentary transfer tax charged by the
County and any other transfer tax charged by the City. All other costs and
expense of escrow and title shall be shared pursuant to the custom in the
County. Buyer and Seller shall each pay all legal and professional fees and fees
of other consultants incurred by Buyer and Seller, respectively.
11. Prorations.
(a) Revenues. Rentals, revenues, and other income, if any, from
the Property, which includes the Lease, affecting the Property shall be prorated
as of 11:59 p.m. on the day following the Close of Escrow.
(b) Taxes/Assessments. All non-delinquent real estate taxes on the
Property shall be prorated as of 11:59 p.m. on the day following the Close of
Escrow based on the actual current tax ▇▇▇▇, but if such tax ▇▇▇▇ has not yet
been received by Seller by the Close of Escrow, then the current year's taxes
shall be deemed to be one hundred two percent (102%) of the amount of the
previous year's tax ▇▇▇▇ for the Property. All delinquent taxes and all
assessments, if any, on the Property shall be paid at the Close of Escrow from
funds accruing to Seller.
(c) Other Expenses. All other expenses for the Property shall be
prorated as of 11:59 p.m. on the day following to the Close of Escrow between
the parties based upon the latest available information.
(d) Corrections. If any errors or omissions are made regarding
adjustments and prorations as set forth herein, the parties shall make the
appropriate corrections promptly upon discovery thereof. If any estimates are
made at the Close of Escrow regarding adjustments or prorations, the party shall
make the appropriate correction promptly when accurate information becomes
available. Any corrected adjustment or proration shall be paid in cash to the
party entitled thereto.
12. Condition and Inspection of Property. Seller makes no representation
or warranty regarding the condition of the Property, its past use, or its
suitability for Buyer's intended use, and the Property is sold AS-IS, WHERE-IS,
WITH ALL FAULTS, AND THERE IS NO WARRANTY, EXPRESS OR IMPLIED, REGARDING THE
CONDITION OF THE PROPERTY. Buyer is relying solely upon its own independent
inspection, investigation, and analysis of the Property as it deems necessary or
appropriate in so acquiring the Property from Seller, including, without
limitation, any and all matters concerning the condition, use and/or sale of the
Property.
13. Liquidated Damage. BUYER RECOGNIZES THAT THE PROPERTY WILL BE
REMOVED BY THE SELLER FROM THE MARKET DURING THE EXISTENCE OF THIS AGREEMENT,
AND THAT IF THIS AGREEMENT IS NOT
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CONSUMMATED BECAUSE OF BUYER'S DEFAULT, IT WOULD BE EXTREMELY DIFFICULT AND
IMPRACTICAL TO ASCERTAIN THE EXTENT OF THE DETRIMENT TO SELLER. THE PARTIES HAVE
DETERMINED AND AGREED THAT THE ACTUAL AMOUNT OF DAMAGES THAT WOULD BE SUFFERED
BY SELLER AS A RESULT OF ANY SUCH DEFAULT IS DIFFICULT OR IMPRACTICABLE TO
DETERMINE AS OF THE DATE OF THIS AGREEMENT AND THAT THE MOUNT OF FIFTY THOUSAND
AND NO/100THS DOLLARS ($50,000.00) IS A REASONABLE ESTIMATE OF THE AMOUNT OF
SUCH DAMAGES. FOR THESE REASONS, THE PARTIES AGREE THAT IF THIS PURCHASE AND
SALE IS NOT CONSUMMATED BECAUSE OF BUYER'S DEFAULT, SELLER SHALL BE ENTITLED TO
THE AMOUNT OF FIFTY THOUSAND AND NO/100THS DOLLARS ($50,000.00), AS LIQUIDATED
DAMAGES. THE PAYMENT OF SUCH AMOUNT AS LIQUIDATED DAMAGES IS NOT INTENDED AS A
FORFEITURE OR PENALTY WITHIN THE MEANING OF CALIFORNIA CIVIL CODE SECTIONS 3275
OR 3369, BUT IS INTENDED TO CONSTITUTE LIQUIDATED DAMAGES TO SELLER PURSUANT TO
CALIFORNIA CIVIL CODE SECTIONS 1671, 1676 AND 1677. SELLER HEREBY WAIVES THE
PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 3389. SELLER AGREES THAT THESE
LIQUIDATED DAMAGES SHALL BE IN LIEU OF ANY OTHER MONETARY RELIEF OR OTHER
REMEDY, INCLUDING, WITHOUT LIMITATION, SPECIFIC PERFORMANCE, TO WHICH SELLER
MIGHT OTHERWISE BE ENTITLED UNDER THIS AGREEMENT, AT LAW OR IN EQUITY, AND SHALL
BE SELLER'S SOLE AND EXCLUSIVE RIGHT AND REMEDY. NOTHING CONTAINED HEREIN SHALL
IN ANY MANNER LIMIT THE AMOUNT OF DAMAGES OBTAINABLE BY SELLER PURSUANT TO AN
ACTION UNDER ANY HOLD HARMLESS, DEFENSE OR INDEMNIFICATION PROVISION HEREOF.
Seller _______ Buyer _______
14. Waiver of Right to Record Lis Pendens. AS PARTIAL CONSIDERATION FOR
SELLER ENTERING INTO THE AGREEMENT, BUYER EXPRESSLY WAIVES ANY RIGHT UNDER
CALIFORNIA CODE OF CIVIL PROCEDURE, PART II, TITLE 4.5 (SECTIONS 409-409.8) OR
AT COMMON LAW OR OTHERWISE TO RECORD OR FILE A LIS PENDENS OR A NOTICE OF LAW OR
OTHERWISE TO RECORD OR FILE A LIS PENDENS OR A NOTICE OF PENDENCY OF ACTION OR
SIMILAR NOTICE AGAINST ALL OR ANY PORTION OF THE PROPERTY IN CONNECTION WITH ANY
ALLEGED DEFAULT BY SELLER HEREUNDER. SUBJECT TO THE FOREGOING, BUYER FURTHER
AGREES THAT AN ACTION FOR DAMAGES WOULD BE AN ADEQUATE REMEDY FOR BUYER IF
SELLER WERE TO FAIL TO CONVEY TITLE TO THE PROPERTY TO BUYER IN DEFAULT OF
SELLER'S OBLIGATIONS UNDER THIS AGREEMENT. ACCORDINGLY, BUYER HEREBY WAIVES ANY
AND ALL RIGHTS WHICH BUYER OTHERWISE WOULD HAVE HAD TO SPECIFICALLY ENFORCE
SELLER'S OBLIGATION TO CONVEY TITLE TO THE PROPERTY PURSUANT TO THIS AGREEMENT.
BUYER AND SELLER HEREBY EVIDENCE THEIR SPECIFIC AGREEMENT TO THE TERMS OF THIS
WAIVER BY PLACING THEIR INITIALS IN THE PLACE PROVIDED HEREINAFTER.
Seller _______ Buyer _______
15. Condemnation and Destruction.
(a) Eminent Domain or Taking. If, prior to the Close of Escrow,
any material portion of the Real Property or Improvements is taken by eminent
domain or otherwise, Seller shall immediately notify Buyer of such fact. If such
taking is "material," Buyer shall have the option, in its reasonable
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discretion, to terminate this Agreement upon written notice to Seller given not
later than ten (10) days after receipt of Seller's notice. If this Agreement is
terminated pursuant to this Section, the provisions of Section 6(c) shall
govern. If Buyer does not exercise this option to terminate this Agreement, or
if there has not been a material taking by eminent domain or otherwise to give
rise to such option, neither party shall have the right to terminate this
Agreement, but the Seller shall assign and turn over, and the Buyer shall be
entitled to receive and keep, all awards for the taking by eminent domain which
accrue to Seller and the parties shall proceed to the Close of Escrow pursuant
to the terms hereof, without modification of the terms of this Agreement and
without any reduction in the Purchase Price. For the purpose hereof, "material"
shall be deemed to be any diminution in the value of the Property as a result of
a taking by eminent domain or otherwise which exceeds Fifty Thousand and
No/100ths Dollars ($50,000.00), as determined by Seller using its good faith
judgment.
(b) Fire or Casualty. Prior to the Close of Escrow, the entire
risk of loss or damage by earthquake, flood, landslide, fire or other casualty
shall be borne and assumed by Seller, except as otherwise provided in this
Section. If, prior to the Close of Escrow, any part of the Improvements are
damaged or destroyed by earthquake, flood, landslide, fire or other casualty,
Seller shall immediately notify Buyer of such fact. If such damage or
destruction is "material", Buyer shall have the option to terminate this
Agreement upon written notice to the Seller given not later than ten (10) days
after receipt of Seller's notice. For purposes hereof, "material" shall be
deemed to be any uninsured damage or destruction to the Property or any insured
damage or destruction where the cost of repair or replacement is estimated to be
Fifty Thousand Dollars ($50,000.00) or more or shall take more than ninety (90)
days to repair, in Seller's good faith judgment; provided, however, in the case
of uninsured damage or destruction, Seller may, at Seller's option, elect to
repair such damage and destruction and keep this Agreement in full force and
effect so long as such repair can be and is completed by Seller prior to the
Close of Escrow. If this Agreement is so terminated, the provisions of Section
6(c) shall govern. If Buyer does not exercise this option to terminate this
Agreement, or if the casualty is not material, neither party shall have the
right to terminate this Agreement but Seller shall assign and turn over, and
Buyer shall be entitled to receive and keep, all insurance proceeds payable to
it with respect to such destruction, and the parties shall proceed to the Close
of Escrow pursuant to the terms hereof without modification of the terms of this
Agreement and without any reduction in the Purchase Price.
16. Notices. All notices or other communications required or permitted
hereunder shall be in writing, and shall be personally delivered or sent by
registered or certified mail, postage prepaid, return receipt requested, or sent
by electronic facsimile and shall be deemed received upon the earlier of (i) if
personally delivered, the date of delivery to the address of the
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person to receive such notice, (ii) if mailed, on the date of posting by the
United States Post Office, or (iii) if given by electronic facsimile, when
received by the other party.
TO BUYER: Financial Pacific Insurance Company
___________________________
___________________________
Telephone: ________________
Facsimile: ________________
Attention: ______________________________
TO SELLER: Stanford Ranch I
Post Office Box 1200
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇, President
WITH COPY TO: Trainer - ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇, Esquire
TO ESCROW HOLDER: Placer Title Company
___________________________
___________________________
Telephone: ________________
Facsimile: ________________
Attention: ______________________________
Notice of change of address shall be given by written notice in the manner
described in this Section.
17. Brokers. There are no real estate brokers involved in the
transaction described herein. If any additional claims for brokers' or finders'
fees for the consummation of this Agreement arise, then Buyer hereby agrees to
indemnify, hold harmless and defend Seller from and against such claims if they
shall be based upon any statement, representation or agreement by Buyer, and
Seller hereby agrees to indemnify, hold harmless and defend Buyer if such claims
shall be based upon any statement, representation or agreement made by Seller.
18. Exchange. The parties to this Agreement acknowledge that either
party may desire to structure the sale and/or the purchase of the Property as an
exchange for like-kind property pursuant to Section 1031 of the Internal Revenue
Code of 1986, as amended, in order to defer recognition of income from the
disposition of the Property and other properties. The parties agree to
reasonably cooperate with each other to accomplish such exchanges and each party
hereby agrees that any and all costs associated with said exchange shall be
borne solely by the exchanging party and shall in no way be attributable to the
non-
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exchanging party. In no event shall the non-exchanging party be required to take
title to the exchanged property(ies) to effectuate the tax deferred exchange
contemplated by this Section.
19. Miscellaneous.
(a) Partial Invalidity. If any term or provision of this Agreement
or the application thereof to any person or circumstance shall, to any extent,
be invalid or unenforceable, the remainder of this Agreement, or the application
of such term or provision to persons or circumstances other than those as to
which it is held invalid or unenforceable, shall not be affected thereby, and
each such term and provision of this Agreement shall be valid, and shall be
enforced to the fullest extent permitted by law.
(b) Waivers. No waiver of any breach of any covenant or provision
herein contained shall be deemed a waiver of any preceding or succeeding breach
thereof, or of any other covenant or provision herein contained. No extension of
time for performance of any obligation or act shall be deemed an extension of
time for performance of any other obligation or act except those of the waiving
party, which shall be extended by a period of time equal to the period of the
delay.
(c) Survival of Representations. The indemnification, defense and
hold harmless obligations, and the representations and warranties made by each
party herein shall survive (1) the Close of Escrow and shall not merge into the
Grant Deed and the recordation thereof, and (2) the termination and/or
cancellation of this Agreement.
(d) Successors and Assigns. This Agreement shall be binding upon
and shall inure to the benefit of the permitted successors and assigns of the
parties hereto.
(e) Professional Fees. If either party commences an action against
the other to interpret or enforce any of the terms of this Agreement or because
of the breach by the other party of any of the terms hereof, the losing party
shall pay to the prevailing party reasonable attorneys' fees, costs and expenses
and court costs and other costs of action incurred in connection with the
prosecution or defense of such action, whether or not the action is prosecuted
to a final judgment. For the purpose of this Agreement, the terms "attorneys'
fees" or "attorneys' fees and costs" shall mean the fees and expenses of counsel
to the parties hereto, which may include printing, photostating, duplicating and
other expenses, air freight charges, and fees billed for law clerks, paralegals,
librarians and others not admitted to the bar but performing services under the
supervision of an attorney. The terms "attorneys' fees" or "attorneys' fees and
costs" shall also include, without-limitation, all such fees and expenses
incurred with respect to appeals, arbitrations and bankruptcy proceedings, and
whether or not any action or proceeding is brought with respect to the matter
for which said
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fees and expenses were incurred. The term "attorney" shall have the same meaning
as the term "counsel."
(f) Entire Agreement. This Agreement (including all Exhibits
attached hereto) is the final expression of, and contains the entire agreement
between, the parties with respect to the subject matter hereof and supersedes
all prior understandings with respect thereto. This Agreement may not be
modified, changed, supplemented, superseded, canceled or terminated, nor may any
obligations hereunder be waived, except by written instrument signed by the
party to be charged or by its agent duly authorized in writing or as otherwise
expressly permitted herein. The parties do not intend to confer any benefit
hereunder on any person, firm or corporation other than the parties hereto and
lawful assignees.
(g) Assignment. Buyer may not assign its right, title or interest
in this Agreement to any other party without the prior written consent of
Seller, which determination may be withheld in Seller's sole and absolute
discretion. Any attempted assignment without the prior written consent of Seller
shall be void and be deemed a default of Buyer hereunder. Any permitted
assignment shall not relieve the assigning party from any liability under this
Agreement.
(h) Time of Essence. Seller and Buyer hereby acknowledge and agree
that time is strictly of the essence with respect to each and every term,
condition, obligation and provision hereof and that failure to timely perform
any of the terms, conditions, obligations or provisions hereof by either party
shall constitute a material breach of and a non-curable (but waivable) default
under this Agreement by the party so failing to perform.
(i) Relationship of Parties. Nothing contained in this Agreement
shall be deemed or construed by the parties to create the relationship of
principal and agent, a partnership, joint venture or any other association
between Buyer and Seller.
(j) Construction. Headings at the beginning of each paragraph and
subparagraph are solely for the convenience of the parties and are not a part of
the Agreement. Whenever required by the context of this Agreement, the singular
shall include the plural and the masculine shall include the feminine and vice
versa. This Agreement shall not be construed as if it had been prepared by one
of the parties, but rather as if both parties had prepared the same. Unless
otherwise indicated, all references to paragraphs, sections, subparagraphs and
subsections are to this Agreement. All exhibits referred to in this Agreement
are attached and incorporated by this reference.
(k) Governing Law. The parties hereto acknowledge that this
Agreement has been negotiated and entered into in the State of California. The
parties hereto expressly agree that this Agreement shall be governed by,
interpreted under, and
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construed and enforced in accordance with the laws of the State of California.
(1) Possession of Property. Buyer shall be entitled to the
possession of the Property immediately following the Close of Escrow.
(m) Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original, but all of which,
together, shall constitute one and the same instrument.
(n) Days of Week. If any date for performance herein falls on a
Saturday, Sunday or holiday, as defined in Section 6700 of the California
Government Code, the time for such performance shall be extended to 5:00 p.m. on
the next business day.
(o) Representation by Counsel. Notwithstanding any rule or maxim of
construction to the contrary, any ambiguity or uncertainty shall not be
construed against either Seller or Buyer based upon authorship of any of the
provisions hereof. Seller and Buyer each hereby warrant, represent and certify
to the other as follows: (a) that the contents of this Agreement have been
completely and carefully read by the representing party and counsel for the
representing party; (b) that the representing party has been separately
represented by counsel and the representing party is satisfied with such
representation; (c) that the representing party's counsel has advised the
representing party of, and the representing party fully understands, the legal
consequences of this Agreement; and (d) that no other person (whether a party to
this Agreement or not) has made any threats, promises or representations of any
kind whatsoever to induce the execution hereof, other than the performance of
the terms and provisions hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the dates set forth below.
BUYER: SELLER:
FINANCIAL PACIFIC INSURANCE STANFORD RANCH I, LLC
COMPANY, a California a Delaware limited liability
corporation company
By: [SIG] By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------ ------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Its: President & CEO Its: President
----------------------------- -----------------------------
Date: June 18, 1996 Date: June 18, 1996
---------------------------- ----------------------------
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EXHIBIT D
LEGAL DESCRIPTION OF PARCEL 11
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EXHIBIT E
LEGAL DESCRIPTION OF PARCEL 12
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