09-0101_BLENHEIM FACILITY MANAGEMENT_Access and Use License•
EQUESTRIAN & SPORTS FIELD
ACCESS & USE LICENSE
THIS EQUESTRIAN & SPORTS FIELD ACCESS & USE LICENSE
('`License") is entered into effective as of January 1, 2009 ("Effective Date"), between RANCHO
MISSION VIEJO, LLC, a Delaware limited liability company (collectively with the owner of the
Property, the "Licensor"), and BLENHEIM FACILITY MANAGEMENT, LLC, a Delaware
limited liability company ("Licensee").
THE PARTIES ENTER INTO THIS LICENSE based upon the following facts,
intentions and understandings:
A. Licensor is the agent and manager for the owner of certain real property
located in the County of Orange, State of California, and commonly known as the "Rancho
Mission Viejo". The portions of the Rancho Mission Viejo that are relevant to this License are
depicted in the attached Exhibit A and are hereafter referred to as the '`Property".
B. Prior to the date hereof, The Oaks/Blenheim Exhibitions, LLC
("Oaks/Blenheim") used the Property in accordance with that certain Equestrian & Sports Field
Access &. Use License dated January 1, 2005 ("Original License") and that certain Lease dated
January 1, 1995 ("Lease").
C. Sierra Soil Products, Incorporated ("SS") currently uses a portion of the
Property for certain specific uses, which uses (i) were previously permitted by Oaks/Blenheim,
and (ii) are acknowledged as acceptable by Licensee.
D. Licensee desires to continue to use and otherwise enter upon those portions
of the Property depicted on Exhibit A that are within the bounds of the solid black line (the
"Ridinz Park Parcel") solely for the Permitted Use (as hereafter defined) and otherwise subject to
the terms and conditions, set forth herein.
E. Licensor and Licensee intend that the facility to be operated by Licensee
upon the Riding Park Parcel following the Effective Date shall be exclusively known, identified
and advertised as the "Rancho Mission Vieio Riding Park."
NOW, THERFFORE, in consideration of the mutual promises, covenants and
conditions contained herein, the parties agree as follows:
I . Pre-existing Obligations. As a condition to the effectiveness of this License,
Licensee agrees to assume all obligations of The Oaks/Blenheim Equestrian Exhibitions, LLC to
restore and clean-up the Property in accordance with the Original License and the Lease, including
the restoration of the existing berm and the area occupied by SS and preparation of a Phase I
environmental assessment report. All such cleanup and remediation work shall be subject to the
review and verification of Licensor's environmental consulting firm.
a. Phase II Reuort. Licensor has heretofore procured and delivered to
I..,icensee a Phase 11 (Clean Dirt) Report prepared by Environmental Engineering, Inc., which
Report shall be used by the parties to establish the baseline for identifying preexisting conditions
on the Property prior to the Original License and the Lease.
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License and Permitted Use-, Reservations.
a. Licensor hereby grants to Licensee a non-exclusive revocable license,
subject to and in accordance with the terms and conditions of this License, to enter upon and use
(i) the roads and other rights of way across the Property as designated by Licensor on Exhibit A in
order to access the Riding Park Parcel and (ii) the Riding Park Parcel for the Permitted Use
(defined below); provided that (a) Licensee shall not enter upon or use any other portions of the
Property for any purpose without the express written consent of Licensor; (b) Licensor reserves
the right to the full use and enjoyment of the Riding Park Parcel and all other areas of the Property
only for those uses and activities identified in subsections 2(g) and 2(h) below; and (c) Licensor
reserves the right to require licensee to use alternative roads, other rights of way and portions of
the Property as reasonably designated by Licensor from time to time to gain access to the Riding
Park Parcel.
b. The Riding Park Parcel shall be used solely for the purpose of
hosting sporting and equestrian events and church related activities so long as such uses,
individually and/or cumulatively, do not increase traffic beyond existing levels, and such uses
comply with the Use Permit (UP for the Property approved by the County of Orange
(collectively, the "Permitted Use"), and for no other purpose. All other uses of the Riding Park
Parcel shall be subject to the prior review and written consent of Licensor, and Licensee must
request such permission from Licensor, in writing, not less than thirty (30) days prior to the
commencement of any such event or use.
C. Consistent with Recital E, above, Licensee, following the Effective
Date hereof, shall identify and advertise the Riding Park Parcel exclusively as the "Rancho
Mission Viejo Riding Park" at all times when performing or otherwise conducting a Permitted Use
upon the Riding Park Parcel.
d. Licensee's proposed use of the Riding Park Parcel shall be confirmed
and authorized by Licensor not less frequently than each quarter by means of (a) a written request
from Licensee outlining specific proposed events and uses for such period and (b) a written
acceptance thereof by Licensor; provided, Licensor and other persons or entities authorized by
Licensor shall have the right to reserve, use and/or enjoy the Riding Park Parcel only for those
uses and activities identified in subsections 2(g) and 2(h) below, at such times as are identified and
scheduled by Licensor with prior notice to Licensee and otherwise without reduction or
diminution in any amounts or fees payable hereunder by Licensee.
C. Licensee may park horse trailers and other related vehicles on the
north side of San Juan Creek (identified and depicted as "Overflow Parking Area s" Oil the attached
Exhibit I3) during equestrian events; provided (i) Licensee must request such permission from
Licensor, in writing, not less than thirty (3 U) days prior to the commencement of any such event or
use; (ii) Licensor shall identify those portions of the Overflow Parking Areas where vehicle
parking is authorized; (iii) Licensee shall not (nor authorize or allow others to) cross any creek,
stream bed or other riparian area in order to travel between the Overflow Parking Areas and the
Riding Park Parcel (i.e., access between the Overflow Parking Areas and the Riding Park Parcel
shall be accomplished solely and exclusively by traversing the improved Ortega Highway); and
(iv) Licensee shall be liable for any and all damages, expenses and liabilities arising from such
activities.
f. Licensee shall have the right to permit SS (or a similar such user) to
use a portion of the Riding Park Parcel in accordance with terms acceptable to Licensee; provided
(i) Licensee shall provide to Licensor a copy of each such agreement, (ii) such agreement shall
expressly provide that the same is subject and subordinate to this License (including that such user
shall vacate the Riding Park Parcel upon the termination of this License, and the agreement shall
include a provision consistent with paragraph 15 below) and (iii) Licensee shall be liable and
responsible for any damage, remediation, cleanup and/or liability arising from or attributable to
such user and/or usage, whether occurring prior to or after the Effective Date.
g. Notwithstanding the foregoing or anything to the contrary herein,
Licensor reserves exclusive use of the Riding Park Parcel for the final two (2) weeks in August,
annually, throughout the Term of this License, for the purpose of hosting the Rancho Mission
Viejo Rodeo or similar event, together with any and all related events or functions associated
therewith as determined by Licensor in its sole discretion.
h. Licensor reserves the right at any time during the Term of this
License, and at Licensor's sole discretion (i) to install on portions of the Riding Park Parcel
utilities, storm drain facilities and other infrastructure of any kind to carry out development of
LicensoCs remaining property pursuant to the approved Ranch Plan entitlements; (ii) to improve
Ortega Iiighway and La Pata Road, which improvements may require use and/or encroachment
onto portions of the Riding Park Parcel; and (iii) to construct on portions of the Riding Park Parcel
the proposed Regional Riding and Hiking Trails as shown on the County of Orange approved
Master Plan of Regional Riding and I liking Trails or otherwise pursuant to the approved Ranch
Plan entitlements, and (iv) to enter onto the Riding Park Parcel and to perform any activities
thereon that may be required by (or are consistent with) the terms and provisions of the Southern
Subregion Habitat Conservation Plan approved by the U.S. Fish & Wildlife Service on January 10,
2007 (the "SSHCP").
3. Riparian Resource Areas.
a. Identification of Riparian Resource Areas. Portions of the Riding
Park Parcel contain riparian resources that are subject to the provisions of the SSHCP and its
Implementation Agreement. These resource areas ("Riparian Resource Areas") are specifically
identified and depicted in Exhibit A as "Do Not Disturb Areas."
b. Prohibitions and Obligations. Licensee shall not (or authorize, allow
or permit others to) enter onto, improve or otherwise use the Riparian Resource Areas or any
portion thereof for the Permitted Use or any other activity. Moreover, Licensee, at its sole cost
and expense, shall undertake, perform and complete all actions necessary to restrict and prevent
any person, domestic animal, vehicle, equipment or other apparatus from entering onto the
Riparian Resource Areas (which actions may include, but are not limited to, the construction and
maintenance of fences or other barriers and placement of signage outside of the perimeter of the
Riparian Resource Areas).
C. Datnage to Riparian Resource Areas. In the instance that the
Riparian Resource Areas sustain any damage during the Term (see Section 4, below), Licensee
shall immediately notify Licensor concerning the damage. Within five (5) days following
Licensee's delivery of said notice of damage to Licensor, the parties shall meet and confer for
Purposes of discussing the damage and addressing restoration of the damaged areas. If the damage
is caused by, or otherwise the result of, the actions -- whether of commission or omission -- of
Licensee or any other person entering onto the Riding Park Parcel pursuant to, or under color of,
this License, Licensee, at its sole cost and expense, shall be responsible for (i) preparing a
restoration plan that addresses and provides for timet and complete remediation of the dacnaC7e,
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(ii) submitting the restoration plan to Licensor for review and approval, (iii) modifying the
restoration plan in accordance with any comments or directions received from Licensor and (iv)
performing all restoration work in accordance with the restoration plan approved by Licensor. All
restoration work shall be subject to oversight by Licensor and shall be performed in accordance
with time frames and methods approved by Licensor.
d. Material Breach of License. Any failure of Licensee to strictly
adhere to the obligations set forth in this Section 3 shall be deemed a material breach of this
License and Licensor may, in its discretion, immediately terminate this License upon delivery of
notice to Licensee. Notwithstanding any such termination of this License, Licensee shall remain
obligated (i) for all costs and expenses associated with remediating any damage to the Riparian
Resource Areas caused by Licensee (or any other person entering onto the Riding Park Parcel
pursuant to, or under color of, this license) and (ii) for satisfying all other obligations of Licensee
that survive termination of this License.
4. `Perm. The term ("Term") of this License and the rights of Licensee
hereunder shall commence on the date hereof and terminate upon the earlier of:
The abandonment of this License by Licensee
b. The breach or default of Licensee under this License and Licensee's
failure to clue the same within thirty (30) days of Licensor's written notice thereof
C. Licensor's termination of this License in accordance with the
provisions of Section 3.d, above;
d. The insolvency of Licensee or in the event Licensee is adjudicated a
bankrupt or Licensee institutes any proceedings under any law relating to bankruptcy wherein
Licensee seeks to be adjudicated a bankrupt or to be discharged of its debts or to effect a plan of
reorganization, or the tiling of an involuntary petition by any of Licensee's creditors seeking the
rehabilitation, liquidation or reorganization of Licensee under any law related to bankruptcy,
insolvency or other relief of debtors and, in the case of an involuntary action, the failure to remove
or discharge the same within sixty (60) days of such filing;
e. Twelve (12) months after written notice from either Licensor and/or
Licensee to the other party that this License shall be terminated as of such date; or
f. December 31, 2011.
5. Fee. Effective upon the Effective Date and in consideration for the use of
the Riding Park Parcel in accordance with the provisions of this License, Licensee shall pay to
Licensor an Annual Base Fee set forth below, in lawful money of the United States, without
demand, deduction or offset, at the address stated herein or to such other persons or at such other
places as Licensor may designate from tirne to time in writing. Monthly installments of this
Annual Base Fee (one -twelfth) shall be due and payable on the first (1st) day of each calendar
month during the Tern.
Year Annual Base Fee
40 January I — December 31, 2009 $200,000
January 1 — December 31, 2010 $200,000
0 January 1 — December 31, 2011 $200,000
6. Approvals; Compliance. Licensee's use of the Riding Park Parcel hereunder
shall be conditioned upon Licensee, at its sole cost and expense:
a. Maintaining all necessary licenses and/or permits from all
appropriate public and/or governmental agencies with respect to such use (and Licensee shall
provide copies of the same to Licensor upon any request therefore);
b. Complying with each and every federal, state or local law, regulation,
standard, decision ofcourt, ordinance, rule, code, order, decree, directive, guideline, permit or
permit condition, together with any declaration of covenants, conditions and restrictions which
have been recorded in any official or public records with respect to the Riding Park Parcel or any
portion thereof, each as Currently existing and as amended, enacted, issued or adopted in the future
which are or become applicable to the Riding Park Parcel;
C. Not materially interfering with the use and enjoyment of the Riding
Park Parcel by Licensor or any person claiming through or under Licensor; and
d. Not permitting any other person or party to enter upon the Property
and/or the Riding Park Parcel under the authority or color of this License other than as guests or
invitees.
7. Signage. Licensee shall have the right to install signage upon the Riding
Park Parcel identifying the location of the facility and the activities/events conducted by Licensee
thereon as Permitted Uses; provided that (i) Licensee shall provide to Licensor a written
description and/or depiction of the intended signage prior to installation, (ii) all signage shall
identify the Riding Park Parcel as the "Rancho Mission Viejo Riding Park," (iii) Licensor shall
have the right to approve/disapprove any signage proposed by Licensee, (iv) all costs and
expenses associated with designing, permitting, constructing, installing and maintaining the
signage shall be borne exclusively by Licensee, (v) Licensee shall maintain all approved signage
in good condition and repair and (vi) at the conclusion of the Term of this License, Licensee shall
remove the signage from the Riding Park Parcel.
8. Entrance. Licensee shall comply with Licensor's rules and regulations for
the Property ("Rules and Regulations"), a copy of the current edition of which is attached hereto
as Exhibit C; provided, Licensor shall have the right to revise and modify the same from time to
time at the discretion of Licensor; and Licensee shall comply therewith upon receipt of a copy
thereof.
9. Assignment. Licensee shall not voluntarily, involuntarily or by operation of
law assign, sublet, transfer, mortgage or otherwise encumber all or any part of the Property and/or
the Riding Park Parcel, or any interest therein, without the prior written consent of Licensor.
10. Costs and Expenses.
a. Licensee shall pay to Licensor, from time to time upon demand by
Licensor, such fees as Licensor shall determine which are attributable to the reasonable costs and
expenses of maintaining any and all private and/or public roads or right-of-ways utilized by
Licensee on the Property.
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b. In addition, Licensee shall be responsible and liable for the payment
of the following expenses ("Operating Expenses"):
(1) All costs and expenses, of whatever type or nature, incurred
with respect to or otherwise arising from Licensee's use, operation, maintenance and repair of the
Riding Park Parcel; and
(2) All charges for heat, water, gas, electricity and any other
utilities used on the Riding Park Parcel by Licensee (and Licensor shall not be liable to Licensee
for interruption in or curtailment of any utility service).
C. If Licensor should pay (but, is in no event under any obligation) for
any of the Operating Expenses due to Licensee's failure to make timely payments thereof,
Licensee shall promptly reimburse Licensor for any such payments made by Licensor on behalf of
Licensee.
11. Damage, Liens.
a. Licensee shall repair and restore any damage, destruction or casualty
to any buildings or other improvements, fixtures and/or installations, soil, plants, crops, fences,
timber, habitat, livestock and/or any other natural resources on or about the Property arising from
Licensee's exercise of this License and/or use of the Riding Park Parcel by Licensee and/or any
other user of the Riding Park Parcel with Licensee's consent, including SS. All restoration work
shall be subject to (i) the preparation by Licensee, and approval by Licensor, of a restoration plan
for the Riding Park Parcel, and (ii) oversight by Licensor of any restoration work completed on the
Riding Park Parcel.
b. Licensee shall not permit to exist or otherwise to be enforced against
the Property any mechanics', materialmen's, contractors' or other liens ("Liens") arising out of the
acts or omissions of Licensee hereunder. Licensee hereby indemnifies and agrees to hold Licensor
and any affected portion of the Riding Park Parcel free and harmless from all liability for any and
all such Liens, together with al] costs and expenses, including, but not limited to, attorneys' fees
and court costs reasonably incurred by Licensor in connection therewith. If any such Lien shall at
any time be recorded against the Riding Park Parcel (or any other portion of the Property) as a
result of the foregoing, and Licensee shall fail, within 30 days after such recording, to either (i)
pay and discharge the underlying claim and cause a lien release to be recorded or (ii) furnish to
Licensor a surety bond or other security reasonably satisfactory to Licensor protecting Licensor
against liability for such Lien and holding the affected property free from the effect of such Lien,
then Licensor may, but shall not be obligated to, take such action or pay such amounts as may be
necessary to remove such Lien. and Licensee shall immediately pay Licensor the amount so
expended by Licensor, together with interest thereon at the rate of ten percent (10%) per annum
accruing from the date of such payment by Licensor until paid in lull by Licensee.
C. Licensee shall be responsible and liable for all acts and omissions of
all of Licensee's agents, employees, representatives and any other person or party entering upon
the Property under the authority or color of this License.
d. Upon the expiration or earlier termination of this License, I..,icensee
shall, at its sole cost and expense, perform any remediation attributable to or otherwise arising -
from Licensee's use of the Property and otherwise comply with any and all laws pertaining to such
remediation.
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12. Hazardous Substances. Licensee shall not use, store or transport any
hazardous substances on or onto the Property; and Licensee shall repair, remediate and/or restore
any condition attributable to or arising from the same. Upon the expiration or early termination of
this License, Licensee shall direct the preparation of a Phase I environmental assessment report for
the Property, including the area occupied by SS. Licensee shall be responsible for all cleanup and
remediation work, which work shall be subject to the review and verification of Licensor's
environmental consulting firm.
13. Indemnification. Licensee shall indemnify, defend and hold harmless
Licensor (and all of their officers, directors, stockholders, partners, members, agents,
representatives, managers and employees) from and against all liabilities, claims, damages, losses
and expenses of any nature whatsoever (including, but not limited to any costs or expenses for
attorneys' fees and all incidental or consequential damages) arising out of Licensee's use of the
Property or otherwise arising out of the acts or omissions of Licensee hereunder. As a material
part of the consideration for this License, Licensee waives any and all claims and demands against
Licensor for any and all such injury or damage and all other claims of any nature whatsoever.
14. Insurance. Licensee shall maintain during the Term comprehensive general
liability insurance, including automobile coverage and blanket contractual liability coverage, with
respect to the Property and ingress to and egress from the Riding Park Parcel and the activities of
or on behalf of Licensce, including personal injury and property damage for not less than Two
Million Dollars ($2,000,000) combined single limit bodily injury, death and property damage
liability per occurrence, or the current limit of liability carried, whichever is greater, and worker's
compensation insurance to protect Licensee and Licensor (together with the record owner of the
Property) from any claim made or action brought by any person or entity arising out of or related
to Licensee's use of the Property thereafter or arising out of or connected in any way with the acts
of Licensee undertaken pursuant to this License. Licensee shall provide that the policy or policies
of insurance shall be primary and shall name Licensor (together with the record owner of the
Property) as an additional insured, with the provision that any other insurance carried by Licensor
(and the record owner of the Property) shall be noncontributing and shall waive all rights of
subrogation. Licensee shall furnish Licensor with a Certificate of Insurance and Additional
Insured Endorsement as evidence of such policy or policies. Both the Certificate of Insurance and
Additional Insured Endorsement shat I name Licensor (together with the record owner of the
Property) as additional insureds and contain language that specifically states that each policy or
policies of Comprehensive or Commercial General Liability Insurance shall be primary and
noncontributing with any insurance carried by Licensor (and the record owner of the Property).
15. No Relocation Rights. Licensee shall have no right under this License to
any relocation assistance or benefit whatsoever upon termination of this License, whether by
condemnation or otherwise, and Licensee expressly waives any right to such assistance and/or
benefit under any applicable laws.
16. Miscellaneous. This License shall be binding on the successors, assigns and
legal representatives of each of the parties hereto; provided any assignment or transfer without the
consent and approval in writing of Licensor thereto shall cause this License to automatically
terminate. This License represents the entire agreement between the parties hereto and supersedes
all prior negotiations, representations or agreements, either written or oral. This License may be
modified only by written instrument executed by both parties hereto. Time is of the essence of
each provision of this License. This License is entered into for the sole protection and benefit of
Licensor and Licensee. Any failure by Licensor to insist upon a strict performance by Licensee of
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any of the terms androvisions hereof shall not be deemed to be a waiver of an of the terms and
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provisions hereof. This License shall be governed by the construed in accordance with the laws of
the State of California. If any suit or action is brought to enforce or construe any provision of this
License, the prevailing party shall be entitled to recover its costs and expenses arising out of such
litigation, including attorneys' fees and court costs, from the non -prevailing party; and each party
hereto waives any and all rights to a trial by jury with respect to any dispute or action hereunder or
otherwise to enforce or construe this License. The obligations of Licensor hereunder are not
personal obligations of the individual partners, directors, officers, shareholders, members, agents
or employees of Licensor; and Licensee shall look solely to the assets of Licensor for satisfaction
of any liability and shall not seek recourse against the assets of the individual partners, directors,
officers, shareholders, members, agents or employees of Licensor. Any and all notices given or
delivered by any party hereto shall be delivered in person or by Federal Express or similar private
commercial courier For next business day delivery or otherwise deposited in the United States mail
in the County of Orange, California, duly certified or registered, postage prepaid, and addressed as
set forth below:
To Licensor:
28811 Ortega Highway
San Juan Capistrano, California 92675
Attn. Ms. Melissa M. Freese
With a copy to:
28811 Ortega Highway
San Juan Capistrano, California 92675
40 Attn: Mr. Jeremy Laster
To Licensee:
P.O. Box 609
San Juan Capistrano, California 92693
Attn: Mr. R.J. Brandes
[SIGNATURE PAGES TO FOLLOW]
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0 IN WITNESS WHEREOF, the parties have executed this License as of the date
first written above.
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"LICENSOR"
RANCHO MISSION VIEJO, LLC,
a Delaware limited liability company
By:
Donald L. Vodra
Chief Operating Officer , f
By:
elissa M. Freese
Vice President - Operations
":LICENSEE"
a Dela
By:
Its:
By:
Its:
FACIL T,Y MANAGEMENT, LLC,
bil* company
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EXHIBIT A
DESCRIPTION OF THE PROPERTY, THE RIDING PARK PARCEL AND THE
RIPARIAN RESOURCE AREAS
(See ,-attached)
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Riding Park Access and Use License - Exhibit A
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EXHIBIT B
DEPICTION OF OVERFLOW PARKING AREAS
(See .Ittachea)
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EXHIBIT C
RANCHO MISSION VIEJO
RULES AND REGULATIONS
1. No keys to locks, gates, fences and/or other structures shall be niade or
otherwise installed without the consent of Rancho Mission Viejo, LLC f"RMV"); and a
copy of each key to any such lock, gate, fence or structure Which is not installed by RMV
shall be delivered to KNIV prior to the utilization thereof.
Z. All gates, doors and similar access and control points shall be closed
immediately upon passage through the same.
All trash and debris shall be removed from the property.
4. Vehicle speed shall not exceed 25 miles per hour.
S. All entrants upon the property shall be subject to being stopped by
RMV security personnel and shall cooperate with such security personnel, including
providing personal and company identification together with an original of an entry permit
executed by RMV.
6. Mone of the following shall be permitted on the property: drugs or
narcotics (except subject to a written medical prescription therefore and which is evidenced
thereon); bunting, fishing; and firearms.
7. Transit to and from the Riding Park Parcel or use shall be limited to
RMV delineated roads; and no off-road travel and/or use is permitted except in accordance
with the written consent or written use agreement executed by RNIV.
S. No removal of anything (e.g. citrus, artifacts, etc.) found or located
upon the property except in accordance with the written consent or written use agreement
executed by RN/IV.
9. No storage or dumping of anything upon the property except in
accordance with the written consent or written use agreement executed by RNIV.
14. :any and ail use is limited to "official" (and not "personal") purposes.
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EXHIBIT D
Copy of Lease
(Attached)
LEASE
OF
(tANCH PROPERTY
THIS LEASE OI' RANCH PROPERTY is oxecuted .►s of September 1,
1999 (".I;:1'fec.tlytJ)ate"), by and between RANCHO MISSION VI1;JO, LLC, a Delaware limited
liability company ("I'midlor•d"), as agent and manager for DMB San ,Juan Investment North,
Y .L.C., a Delaware limited liability company, as successor-in-it3terest toThe Sail Juan Company
;uld Santa Margarita Company, a California corporation, and THE OAKS, a Delaware
corporation ("'reanilt"), as successor -in -interest to Eller" B. Rosenbaum, Trustee of tho "Pauquier
Trltst .
THE PARTIES enter into this Lease based upon the following facts, intentic►ns
wid understandings.
A. DUB San Juan Investment Noith, L.L.C., a Delaware.liulited liability
company ("Owner") currently owns the Property.
B. Rancho Mission Viejo, LLC, as Landlord, is the agent and manager for
Owner.
C. The predecessors in interest to Landlord and '.Conant, including Santa
Margarita Company, a Califoirtia corporation and Ellen f3, Roscarbaurn, 'Piusfee of the I auquier
Trust, respectively, were parties to that certain lease dated September 1, 1985 (the "prior
Lease'), covering that certain unimproved real property located in Orange County, California,
more particularly described on Exhibit A attached hereto.
D. The original teen of the Prior Lease expired on August 31, 1990, and
since that date, said lease has been operating on an antOlnatic annual renewal basis.
E. Landlord and Tenant have succeeded to all right, title and interests of the
predecessors in interest under the Prior Lease.
F. Landlord and Tenant now desire to enter into a new lease agreement to
clarify and document their business relationship, and hereby waive and release any and all rights,
duties and obligations under the Prior Lease.
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, the parties hereto hereby agree as follows:
1. Defined Term . The following terms shall have the meanings thercafter
set forth:
(1) "Additianal Reit"ineans all sums Auld charges other than
Base Rent which Tcnaut is obligated to pay under this Lome.
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(2) "A[ljEists��r�tt-Tltite" yXicairs the firstanniversary of die
t: oixi�ix:tiwinunt Datc ;ruc1 t,aals ::uccc:ssive anniversary thereafter atlor, tho U1'il;irral Tct'iii.
(3)��. lei ;�es�61e liete�rest Rate" means the greater of (a) five
percent (5%) per arnnrm plus the federal discotuit rate on advances to inwriber banks in detect at
the Federal Reserve Bank of San Francisco on the twenty-fifth (25th) day of the month pecceding
the rl.ite of tlds Leese or (b) ten percent (10%).
(4) " tznlicitlsIo tr ews l incans (i) any and all present acid
folure laws, statutes, zoning restrictions, ordinances, orders, regulations, directions, rales and
rcquircirients of all governmental authorities having jurisdiction over all or rmy part of the
Property (including, but not limited to, state, municipal, county and federal governments and
their departments, bureaus, boards and officials) pertaining to the use or occupancy of, or
applicable to, the Property or privileges appurtenant to or in connection with the enjoyment of
the Property, (ii) any acid all applicable federal, state and local laws, regulations or ordinances
pertaining to air and water quality, Hazardous Materials (as hereafter defined), waste disposal,
air cinissions and ether envirotuncntal or health and safety matters, zoning, land use and utility
availability, which impose any duty upon Landlord or Tenant directly or with respect to the use
or occupation of the Property, (iii) any covenants, conditions and restrictions, easements or other
uiatters of'record now or Hereafter affecting or encumbering the Property and (iv) good business
Practices.
(5) "Base Rent" means TWO THOUSAND FIVE HMDRLD
`} Dollars (`t;2,500.00) per annum, including any increases in accordance with this Lease (but in no
event shall base Rent be decreased at any time during the Term).
(G) "Commencement D:rte"means September 1, 1999.
(7) "Defau " means any event or condition which with notice
or the passage of time or Loth would constitute an Event of Default.
(8) "Event of Defin-WIt" is defined in Section 17 of this Lease.
(9) "Hazardous Materiall" means (i) any "hazardous
materials" as defined in Section 25501(o) of the California Health and Safety Code useless
Tenant establishes, to the satisfaction of Landlord, that because of the quantity, concentration, or
physical- or chemical cliaracteristics, such substance ormatter does -not pose a significant present
or potential hazard human health and safety or the environment, (ia) any other substance or
inatter which results in liability to any person or entity from exposure to such substance or matter
tinder any statutory or common law theory and (iii) any substance or matter which is in excess of
relevant and appropriate levels set forth in any federal, state or local law or regulation pertaining
to any hazardous or toxic substance, material or waste or for which any federal, state or local
regency orders or otherwise requires removal, treatment or remediation.
(10) "OyeratingE xpenses" means all expenses attributable to
the Property or Tenant's use or occupancy of the Property, whether for operations, maintenance
or otherwise, iticluding, but not limited to, all operating costs, real and persunal property taxes
;Bill nssc,—liments, iitilitics, ]al�lii'allee, )ailitorial, tl( (:lliity, and landscaping and inaintelianct;
-;C;1 vl(%(;s,
(11) "d)�lital_ Te •r "irleans the period commencing on the
t,'otnitiellceinent .Gate and terminating, at 11:59 p.m. on December 31, 2000.
(12) I'Vermitted CNes" ineans the use of the Property as a
forced grazing pasture acid related incidental uses.
(13) "P
, ie t ' meaiis that certain ►ntimproved real property
'located in the unincorporated territory of the County of Orange, State of'California, generally
shown on l:xtiihit A attached hercto.
(14) " fRenewid 'Perm" means a one-year period colninenciilg
lipoli the expiration of the'1'erm and terminating at 11:59 p.m. on the (lay prior to the first (1st)
iuiriiversary of such date.
(15) "_Rent" means Base Rent plus Operating Expenses and any
o ier amounts payable hereunder deemed as Additional Rcr►t.
(1G)"T'enai:t's 1'io yet ttv" ireans all personal property, llxtlli'e3
(hichiding fencing and irrigation equipment) and equipment of Tenant.
(17) " e r " means the Original Term together with any
Renewal Term.
(18) "Wetland" means ` water of the United States," as that
term is defined in Section 328.3(a) of Title 33 of the Code of Federal Regulations.
2. Tease.
a. Original Term. in consideration of the payment of the Rent and other
charges, together with the performance of the covenant and conditions, set forth herein, Landlord
Hereby leases to 'i'enant and Tenant hereby leases from Landlord, the Property for the Term,
subject to the rights of either party to terminate this Lease upon a prior one-year written notice.
b_ _ RenewalTerm._ Upon the expiration of the Original Terrn,the Term of
21tiis Lease shall be automatically extended for the Renewal Term, provided that (i) neither party
provides the other party with a prior one-year written notice of its election to terminate this
Lease; (ii) there exists no Default and/or Event of Default under the Lease; and (iii) this Lease
has not been terminated in accordance with the terms Hereof.
1_Zen .
a. Base Ren . Effective upon the Coinniencemciit Date, Base Rent
shall be payable by Tenant to Landlord in advance on the execution date of this Lease in lawful
njouey of the United States, without demand, deduction or off.5rt, at the address stated hcrein or
•
Lo sr:ch other pr sons or at ;such other places as Landlord way desigatite from tiwe to time in
writing,
h. kntwal Increase, In the uvent the Original Tenn Lias been
,wended 1br the ltenowal 'Perin, Base Rent shall be inercased by ten percent (10%) ort c,ach
Adjustrncat Date.
c. Other C carnes. This Lease is a net lease. Torrant shall be solely
responsible for payment of all Operating Expenses of the Propertyand shall fully and promptly
pay all such expenses when due. If Landlord should pay for any of the Operating Expenses clue
to Tenant's failure to make timely payments thereof, Tenant shall reimburse Landlord for any
such payments made by Landlord on behalf of Tenant. Any reimbursements due to Landlord by
Tenant shall be considered as Additional Rent.
4. Permitted Uses.
a. Busines ducts . Tenant shall use the Property in accordance
with the Permitted Uses; and Tenant shall not use or permit the Property to be used for any other
purpose (including, without limitation, hunting or fishing) other than as permitted under this
:vection without the prior written consent of Landlord.
b. Complial3ce with Laws. During the Term Tenant, at Tenant's sole
cost and expense, shall comply with, and shall not use the Property or suffer or permit anything
to be done in or about the Property which will in any way conflict with, the Applicable Laws.
Tenant shall not commit or permit any public or private nuisance or any other act or thing which
might or would in any way obstruct or interfere with the rights of occupants of nearby property,
or injure or annoy them, or use or allow the Property to be used for any unlawful purpose.
Tenant shall not permit to be placed any solvents (treated or untreated) or harmful liquids in the
drainage or sewer systems; and Tenant shall not dump or store, or permit to be clumped or stored,
waste materials, refuse or other materials or allow any such materials to remain on the Property,
except in proper enclosed trash areas. Tenant shall promptly comply with all reasonable
requirements of any board of fire insurance underwriters or other similar body now or hereafter
constituted.
C. INQ Hunting: Destruction of Game Animals. Neither Tenant nor its
officers, agents, employees, licensees or any other person(s) coming upon the Property with
Terrartt's express or-iinpliedpermissiorrshall discharge- firearms-, hunt; -fish or-trespass-orr the ---
Property or surrounding property. No game animals, such as deer, shall be harmed or killed until
satisfactory control of rodents has been maintained. Thereafter, if damage is substantiated and
verified by an agent of the State Department of Fish and Game, Landlord will cooperate with
Tenant (at no expense to Landlord) in a reasonable and controlled "kill" program,
d. "As Is" Acceptance. Tenant shall accept and take possession of
the Property "As Is" and acknowledges that the taking of possession of the Property by Tenant
shall be conclusive evidence (lint the Property and every part thereof were in good and
satisfactory condition at the time such possession was so taker[. Tenant acknowledges,
represents, covenants and agrees that:
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(1) 'fenwit has inspected the Property and has found the mads,
faeces, waterways, improvernunts, ,;Ittic (tir'es, e(luiprnont and appurtenallcus to l)c in good
condition of repair wid efficiency; anti Twiant covenatzts acrd agrees to kcrp the same in a Eike
rood condition of'repair and efficiency, Curnishing the iieeet,sary labor and material therefor, :inti
ttpon the termination of its rights hereunder as to all or any portion of the Property, dither at the
c::nd of the Term or at an earlier time as herein provided, to retmm said lands, fences, waterways,
iinprovements, strictures, equipment and appurtenances to Landlord in as good condition as the
sane is or are received, ordinary use, wear and tear alone excepted.
(2) Neither Landlord nor any agent, employee or representative
of Landlord has 3nade any representations or warranties as to the :suitability or fitness of the
Property for the conduct of'Tenant's business, including, but not limited to, any representations
or warranties regarding zoning or other land use matters, or for any other pivpose, and that
neither Landlord nor any agent, employee or representative of Lttudlord has agreed to undertake
any alterations or additions to the Property.
(3) Tenant acknowledges that the Property is located in a will
laird area and that dangerous wildlife such as rattlesnakes and mountain lions may be present on
the Property. As a snaterial consideration for the execution of this Lease, Teslant does heruUy
zgr•ee that Landlord shall not be liable for any damages of any kind or for any damage or ijljttry
to any person or property (luring the Term from any cause whatsoever resulting from <<ny and all
such dangerous wildlife.
(4) No rights, easements or licenses are acquired by Tenant by
implication or otherwise except as otherwise expressly set forth in this Lease.
e. N -on -Qom liance,tty Others. Landlord shall not be responsible for
non-compliance by any other tenant of adjacent property as to any of the rules or regulations or
any other terms or provisions of such tenant's or occupant's lease.
f. Reservation of Certain Rights.
(1) Mineral Rights. Landlord excepts and reserves from this
Lease all of the oil, gas and other hydrocarbons, minerals, and ruts to minerals, in and under
the Property, with the right to prospect for and explore, mine, develop and remove the same, and
to use sufficient surface ground therefor, and the right to lay, maintain and operate pipelines for
oil and gas; and with -the --right to rernove- and relocate -any -building; machinery, pipelines of, other -
property erected or placed on the Property in connection with the exercise of any rights reserved
to Landlord.
(2) Property Ri h s. Landlord excepts and reservcs for itself,
its successors and assigns:
(a) Rights of way for roadways, cattleways or railways
as Landlord rnay decin necessary or convenient across the Property;
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(b) The right to constmet, operate, repair; wailitabi ,rrd
I-cplace txa nsnaitters, l-rceivrrs, autcrrriae, electrical or telephone teansinis-sion and dlstlibtitioll
Byres and .facilities, pipelines, flunic.:s mid conduits;
(r) The right to maintain, operate or replace: any and all
existing reservoirs, pipelines, Glitches, Conduits, flumes, antennae, transmission or distribution
lines and facilities, watcrways, roadways, cattleways, byways, streets and highways in, over or
iipon the Property. Notwithstanding the fbregoing, this Lease is subject to any casements wni/or
right of ways granted to Southern California Edison Company by Landlord and/or its
predecessors in interest ,
Except where already constructed or laid out, as of the commencement of this Lease, the
construction or establishment of any of such ways structures or improvements shall not
unreasonably interfere with any building, improvement, structure or operation of Tunuit union
the Property.
(3) Water -Rights. Landlord reserves for itself, its sucecssors
and assigns, all water and water rights, surface, percolating and underground, except domestic
and irrigation to the extent required for use oil the Property, and all works for the development
and transportation of water.
(4) Non -Interference. Landlord shall exercise the rights '
roserved hereunder in a manner which does not unreasonably interfere with the rights gnuited to
renatnt or with Tenant's exercise of such rights Tenant agrees not to interfere with not obstruct
f
the operation of any person having, under grant or license from Landlord, any right to the use of
any portion of the Property for cropping, farming, roadways, communication or utility purposes.
g. Signs. All signs or graphics of any kind to be placed upon the
exterior of any building or in the open area of the Property shall be subject to Landlord's prior
written approval and shall be subject to all Applicable laws.
5. Alterations and Additions. No structural alterations, changes or additions
shall be made to the Property by Tenant without Landlord's prior written consent and Landlord's
approval of the plans and specifications therefor, which shall not be unreasonably withheld or
delayed. All such work which may be done within the Property by Tenant shall be done at no
expense to Landlord and shall be completed in accordance with all Applicable Laws. Tenant
shall reimburse Landlord for all costs which Landlord may incur in connection with granting
approval and- consent ta'Tenant-for any suctralteratiorrs-and- additions; including any -costs or
expenses which Landlord may incur in electing to have outside architects and engineers review
said matters. Any alterations, improvements or changes to the Property made by Tenant shall be
the property of Tenant and Tenant shall have the right, if it is not there in default hereunder, to
remove fi-om the Property immediately before the expiration of the 'Terre, any such alterations,
improvements or changes and any trade fixtures and other equipment installed by Tenant so long
as the removal will not cause any structural damage to the Property; and Tenant, at its cost, shall
promptly restore any damage caused by such removal. Any such alterations, improvements or
changes and any trade fixtures and other equipment installed by Tenant and not so removed
shall, at Landlord's option, become the property of Landlord or Landlord may remove same at
0 Tenant's cost and expense.
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6. 'W"Iintetvrnc0.
:. Tmant. Tenant shall, at'fcnant's Own coyt and c;xpcnse, Iteelr the
11roperty and every prat thereof, strnCttlral and note -structural, rind the per;soual property raid
<,glriplllelrt dwreon to good, oloarl rind srinitmy order, condition and repair. Tunant way remove,
iestore andlor replace its personal property wid equipment thereon as and when Tenant deems
necessary in its good faith business judgment. IfTertallt ;.ball fail to Leap the l'ropel-ty and ttlo
landscaping in good, clean and sanitary condition and repair as required under the provisions of
this Lease within ten (10) days after written notice from Landlord, Landlord uhall have the option
(tart not the obligation) to enter upon the Property and clean, repair or otherwise maintain the
1.'roperty to the extent that 'rentmt has failed to do so; and the cost arld expense inclined by
Landlord in so doing shall be payable by "Tenant to Landlord promptly upon demand, As print of
Tenant's maintenance responsibilities:
(1) BoundarStakes. 'tenant will not move or destroy any of
ilre stakes, posts or markers marking the exterior or interior boundaries of the Property or any
subdivision thereof; and Tenant shall, at its own cost and expense, promptly replace all markers
inadvertently disturbed, removed or destroyed, and such markers so replaced shall be in the same
location, of the same dimensions and material, and have the same writings and figures described
dimeon as those inadvertently moved, disturbed or destroyed.
(2) Surface Pines. Tenant, at its sole cost and expense, agtees
to supply all surface pipes, sub -mains and laterals required for use on the Property, which surface
tripes, sub -mains and laterals shalt be and remain the property of Tenant and shall be removed by
Tenant upon the expiration or earlier termination of this Lease. Tenant shall replace, at its own
cost and expense, all permanent irrigation pipe now located, or which may hereafter be located,
oil the Property during the Term which is damaged or destroyed during such time.
(3) Srtrface MLater, Except to the extent, if any, required by
Applicable Law, 'renant.agrees that it will not mine or excavate, erect any building or structures,
clump materials, leave refiise or tailings, or do, or suffer to be done, any act, matter or thing
whereby the free passage of water, whether the same shall be flood water or usual flow of any
watercourse or stream as the same is :accustomed to flow on, over and across any other lands
belonging to Landlord, may in any manner be unreasonably prevented, obstructed, impeded or
affected. Tenant shall indemnify, defend and hold harmless Landlord from arty liability on
account of injury to persons or damage to property caused or claimed to have been caused by the
----wrong to er eience �y enant wit t e ee passage of'water over iFie Prdperty. -
Notwithstanding any other provision of this Lease, Tenant agrees that the obligations set fbrth
herein shall survive the expiration or termination of this Lease.
(4) Wetlands. Tenant shall riot create or allow to be created
,aly Wetland on the Property or any other area owned by Landlord; provided, however, if it is
c;ssential that Tenant create a Wetland in order to maintain its mining; operations, Tenant may
create such a Wetland subject to Landlord's prior written reasonable approval. Landlord shall be
given immediate written notice of any discussions, meetings, negotiations, hearings, notices,
correspondence, orders and decrees, judicial or aclininistrative., relating to arty Wetland on the
Property. Without Landlord's prior written approval, 'fenactt shall not enter into any agreement,
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irn:hrcding without limitation, Duty �sl ieemettt with (lrc: IJrriteff ;�tatc s Arn3ty t.sorlts of ul;itieecs,
tvslating to any WCtlund ort Ilio Property.
(5) )'niso • Rodents. Toiiatnt shall at all }roper tintes and at its
own cost and expense set out poison for the killing of squirrels, rats, mice, gophers and rather
rodents on the Property; antd Tenant shall properly mark cacti of the places w1wre such poison is
z,�.t olrt.
(6) Weeds and Soil. Tenatnt slrall not permit the piling of trash,
oil -site dttnrpiug or stook piling of any type on the property; and Tenant shall keep the Property,
hicluding, without limitation, fence lines, fence corners, arroyos, waterways and roadways in and
upon the Property, free from wild tobacco, wild artichoke, brash and growth of all kinds, and all
noxious weeds and grasses, except shade or ornamental trees, during the Term; and Tenant shall
plow and fill all arroyos, gullies and ditches caused by running water and exercise proper care to
prevent any and all erosion.
(7) Op air tion. Tonant shall exercise all reasonable precautions
in the conduct of its operation of the :property so as to minimize the hazard of fire and erosion
.nand particularly to conform to the orders and regulations of any public goverrunental or non-
poverrunental body in that regard.
b. U to for , Landlord shall riot be required to make any altcrations
or ropairs or otherwise to maintain the property or the personal property and equipment thereon,
including, without limitation, improvements, structures, fences, wells, watdrways, equipment and
appurtenances,
7. iJ ilitie .
a. genera. Tenant slrall be responsible for obtaining and ahall hilly
and promptly pay all costs directly to the appropriate supplier for all water, gas, }teat, light,
bower, telephone service and other public utilities of every kind furnished to the property
throughout the Term. Tenant shall maintain all such utilities in its own name.
b. WAta, Landlord makes no representation, warrantty, guaranrty or
covenant, express or implied, as to the availability of any water whatsoever at or to the Property.
Tenant shall make its own arrangements for water supply and service as'Tenant may require at
- - die -Property for -its operations at tine -Property and--to-satisfy its -maintenance obligations set forth - }
in this Lease; and any reduction in the supply, or the unavailability, of water at at to ttte
Property, for whatever reason, shall be at the sole risk and expense of Tenant. So long as water
is available (in Landlord's discretion), Landlord agrees to sell 'tenant water on the same terms
and conditions as Landlord generally makes available to other tenants of Landlord, j
C. .Sanitria 'a ilities. Tenant Shall provide field sanitary facilities for
its workers, which facilities shall be in compliance with all Applicable Laws. -
9, 'asurance and Indernriihcationn.
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a. l:'4tblic l.iahili C11811yanco Policies. r,Gssee Shall, at its own cast
wid uxpense, keep 'and maintain in full force affect daring the Wmi and any extensio)i theicof, a
policy or policies of commercial public liability insurance in.,airing Lessee's activities with
ic;spect to the Property against loss, clamage or liability for parsonal injury or death,cf miy person
or loss or damage to property occuning in, upon or about the Property in an amount of not less
Own $1,000,000.00 for each personal injury, S 1,000,000.00 for each accident and : 1,000,000.00
fbr each damage to property,
b. funeral.
(1) Tilstn•anc e Cotnlf.jnies, Insurance required to be maintained
by Tenant shall be written by companies licensed to do business in the sate in which the Property
are located and having a "General Policyholders hating" of at least "A" (or such higher rating as
may be required by a lender having a lien on the Property) as set forth in the most current issue
of"Best's Insurance Guide."
(2) Certifirates of Insurance. Tenant shall deliver to Landlord
certificates of insurance for all insurance required to he maintained by lessee in the fbrin
acceptable to Landlord no later than seven (7) days prior to the date of possession of the
Property. Tenant shail, at least ten (1O) days prior to expiration of the policy, furnish Landlord
with certificates of renewal or "hinders" thereof. Each certificate shall expressly provide thdt
such policies shall not be cancelable or otherwise be subject to modification except after
sixty (60) days prior written notice to the parties narned as additional insureds in this Lease
(except in the case of cancellation for nonpayment of premium in which case cancellation shall
not take effect rintil at least ten (10) days' written notice has been given to Landlord). If Tenant
fails to maintain any insurance required in this Lease, Tenant shall be liable for all losses and
cost resulting from said failure.
(3) Additional Insoreds. Landlord and any property
management company of Landlord for the Property shall be named as additional insureds under
all of the policies required by this section. The policies required under this Section shall provide
for severability of interest.
(4) Pri_niaty Coverage. All insurance to be maintained by
Tenant shall, oxcept for workers' compensation and employer's liability insurance, he primary,
without right of contribution from insurance of Landlord. Any umbrella liability policy or
- excess liability policy(which-shalf be in "following forrn")-shal[provide that if the underlying
aggregate is exhausted, the excess coverage will drop down as primary insurance. The Iimits of
insurance maintained by Tenant shall not limit Tenant's liability under this Lease.
(5) Waiver of Subrogation, Tenant waives any right to recover
against Landlord for claims for damages to Tenant's Property covered by insurance. This
provision is intended to waive filly, and for the benefit of Landlord, any rights and/or claims
which might give rise to a right of subrogation in favor of any insurance carrier.
C. Indemnity. Tenatrt uhall indemnify, defond by counsel satisfactory
10 to Landlord, and hold harmless Landlord from and against any and all clainis arising from
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(i) wiaui's iu e of the Fropurty, the conduct of Tenant's business; or Duty activity, work or tltirtgs
dome, lJarmitted or tOAffered by Tenant in or about the Property or elaewhero .ted (ii) arty breach
or deflault in Ulu performance of arty obligation oil T entuit's part to be performed under the; tertrw
of this Lease:, arising from any negligence Of Tenant or auy of Tonant's agents, contractors or
wnployees, including all costs, attorneys' fees, expenses and liabilities incurred in the defense of
uiy such claim or any action or proceeding brought thereon. 'Tenant, as a material part of the
considcration to Landlord, hereby assumes all risk of damage to property or injtuy to persons in,
ltpon or about the Property arising from any cause; and'Tenant hurcby walvcs all claims ill
x-cspect thereof against Landlord except to the extent such claims are caused by Landlord's gross
xte,gHgence or willful misconduct.
d. ExemPtion of Undlord ftom Liabili . Tenant hereby agrees that
Larrdlord shall not be liable for injury to Tenant's business or any loss of income therefrom or
for damage to the business or any loss of income therefrom or for damage to the property of
Tenant, Tenant's employees, invitees, customers or any other person in or about the Property,
nor shall Landlord be liable for injury to the person of Tenant, Tenant's employees, agents or
contractors, whether such damage or injury is caused by fire, steam, electricity, gas, water or
rain, or from the breakage, leakage or other defects of sprinklers, wires, appliances, pltunbing, air
conditioning or lighting fixtures, or froth any other cause whether said darttnge or injury results
li•out conditions arising upon the Property or from other sources or places, and regardless of,
whether the cause of such damage or injury or the tncans of repairing the same is inaccessible to
I'e;rtasst.
). faxes.
a. Personal Properly `!'axes, Tenant shall pay all taxes charged
against trade fixtures, furnishings, equipment or any other personal property owned by or
belonging to Tenant. Tenant shall use reasonable efforts to have all such personal property taxed
separately frons the Property. If any of Tenant's personal property is taxed with the Property and
Landlord pays such taxes, Tenant shall reimburse Landlord the amount of such taxes within
fifteen (15) -days after receipt of Landlord's written statement or invoice therefore, which
statement or invoice shall be accompanied by reasonable evidence of the amount paid.
10. Assignment: Subletting.
Tenant shall not voluntarily, involuntarily, or by operation of law assign, sublet,
transfer, mo- Aa e or otherwise enciimlier all -or -tut- alt of the -Pro e - or an interest therein
gg YP PAY _.. Y
without the prior written consent of Landlord. Any attempt to assign, sublet, transfer, mortgage
or otherwise encumber this Lease in violation of this Section shall be null and void. The merger
of Tenant with any other entity or the transfer of any controlling or managing Tenant ownership
or beneficial interest in Tenant shall constitute an assignment hereunder. If Tennant desires to
assign this Lease or sublet any or ail of the Property, Tenant shall give Landlord written notice
forty-five (43) days prior to the anticipated effective elate of the assignment or sublease.
Landlord shall then have a period of thirty (30) days following receipt of such notice and all
related doctunents and agreements associated with the assignment or sublease, including without
limitation, the financial statements of any proposed assignee or subtenant, to notify Tenant in
writing that Landlord has clected'one of the following options: (1) to permit 'renailt to assign
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Alis Lease or :aublet such space, subject however to Landlord's prior wx'itt0n approval of (lie
propmud ii; sil;iicc or sublcssce and of inty related docutiiciits Or al;rcctitcnts a55uciawd with the
,ssigianout or sublease received by Landlord hereunder or reasonably requested by Landlord; or
(:1) to disapprove Such proposed assignment or subletting. If Landlord should fail to notify
Tenant hi writing of such election, Landlord shall be deemed to have elected option (2). This
Lease may not be assigned by operation of law. If Tenant receives rent or other consideration for
:illy such transfer in excess of the Rent, hereunder or in case of the sublease of a portion of the
Property, in excess of such Rent that is fairly allocable to such portion, niter appropriate
udjustments to assure that all other payments required hereunder are appropriately taken into
:iucount, Tenant shall pay Landlord fifty percent (50%) of the difference between cacti such
payment of (crit or other consideration and the Rent required hereunder. Landlord may, without
-waiving any rights or remedies, collect rent from the assignee, subtenant or occupant acid apply
the net ainount collected to the Rent herein reserved and apportion any excess rent so collected in
accordance with the terms of the preceding sentence. Tenant shall continue to be liable as a
principal and not as a guarantor or surety to the same extent as though no assignmerit or
subletting had been made. Landlord may consent to subsequent assignments or subletting of this
1.ease or amendments or modifications to the Lease by assignees of Tenant without notifying
Tonant. or any successor of Tenant and without obtaining; their consent. No permitted transfer
„}fall be effective until there has been delivered to Landlord a counterpart of the transfer
instrument in which the transferee agrees to be and remain jointly and severally liable with
Tenant for the payment of rent pertaining to the space and for the performance of all the tot -ins
and provisions of this Lease relating thereto arising oil or after the (late of the transfer.
} 11. .'ens. Tenant shall not suffer or permit any liens, encumbrances or
J
cl'rarges against the Property or any part thereof or Landlord's interest therein, including, without
limitation, any mechanics,' inaterialmen's, contractors' or other liens arising from, or any claims
for damages growing out of, any work of repair or alteration as herein authorized or otherwise
arising; and Tenant shall pay or cause to be paid all of said liens and claims before any action is
brought to eiifbrce the same against Landlord or the Property. Tenant shall indemnify, protect,
defend and hold Landlord and the Property free and harmless from all liability for any and all
such liens and claims anti all costs and expenses in connection therewith. Tenant shall not make,
or permit to be inade, any improvements on the Property for which any such liens may be filed
without the prior written consent of Landlord; and Tenant shall give Landlord no less than
twenty (20) days prior notice in writing before commencing construction of any kind on the
Property so that Landlord may post notices of nonresponsibility.
12. Landlord Paying Claims. should Tenant fail to pay and discharge, when
clue and payable, any sum or charge which Tenant is obligated to pay under this Lease,
including, without limitation, any premium or other charge in connection with any insurance
policy or policies which Tenant is obligated to pay, or any lien or claim for labor or material
(rnployed or used in connection with alterations or additions to the Property by Tenant, alter
fell (10) days written notice from Landlord, then Landlord may, at its option and without waiving
or releasing Tenant from any of Tenant's obligations hereunder, pay arty such sum or charge or
settle or discharge any action therefor• or satisfy any judgment thereon. All costs, expenses and
other sums incurred or paid by Landlord in connection therewith, together with interest at the
maixirrium rate permitted by lav to be charged on such costs, expenses and suns from the (late
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hrcurrod or paid by Landlord, shall bo deeyned to bo AdditioYral Runt horeundr r and shall be (lue
,ii -id payable on rler►rand by Landlord.
1.3, Q<iinage �jd opstrttetion.
a. Casual If the Property should be datuaged or destroyed by fire
or other cmualty,'renant sltnil give immediate Nvritten notice to Landlord. 'Within thirty (30)
clays after receipt thereof, Lw-idlord shall notify Tonant whether such repairs can reasonably be
made: (1) within ninety (90) days; (2) in more than ninety (90) days but in less than one hundred
nighty (180) clays; or (3) in more than one hundred eighty (180) days from the date of such
Yit7tice.
{l} T c;s 'Li
)ad )a .. If the Property should be damaged
drily to such extent that rebuilding or repairs can be reasonably completed within ninety (90)
clays, this Lease shall not terminate and, provided that insurance proceeds are available to fully
relaair the darnage, Landlord shall repair the Property, except that Landlord shall not be required
to rebuild, repair or replace any alterations, partitions, fixtures, additions and other improvements
which may have been placed in, on or about the Property by or for the benefit of 'Tenant. Itent
payable hereunder shall be abated proportionately from the data "Tenant vacates the Property only
to the extent rental abatement insurance proceeds are received by Landlord and the Property is
unfit for occupancy.
(2) fare t a 0Da s. If the Property should be dwriaged
- only to such extent that rebuilding or repairs can be reasonably completed in snore than
iduety (9d) days but in less than one hundred eighty (180) days, then Landlord shall have the
option of. (1) terminating the Lease effective upon the occur-ence ofsuch damage, in which
event the Rent shall be abated from the date Tenant vacates the Property; or (2) electing to repair
the Property, provided insurance proceeds are available to fully repair the damage (except that
Landlord shall not be required to rebuild, repair or replace .,my part of the alterations, partitions,
fixtures, additions and other improvements which may have been placed in, on or about the
Property by or for the benefit of Tenant). The Rent payable hereunder shall be abated
proportionately from the date Tenant vacates the Property only to the extent rental abatement
insurance proceeds are received by Landlord and the Property are unfit for occupancy. In the
event that Landlord should fail to complete such repairs within one hturdred eighty (180) days
after the date upon which Landlord is notified by Tenant (such period to be extended for delays
which are a result of events or acts beyond Landlord's reasonable control), Tenant may, within_
ten i-0 (la s atter' the -ex riationo sue one�itir�tTred J }i _ 180 -iia __ eriod terminate this
_. _... ( Y p g ty ( �- Y p
Lease by delivering written notice to Landlord as Tenant's exclusive remedy, whereupon all
rights and obligations under this Lease shall cease and terminate thirty (30) days after Tenant's
receipt of such notice.
(3) Greater Than 180 Days. If the Property should be so
clarnaged that rebuilding or repairs cannot be completed within one hundred eighty (180) clays,
either Landlord or Tenant may terminate by giving written notice within ten (10) days atter
notice from Landlord regarding the anticipated time period of repair; and this Lease and Rent
,sliall be abated from the date'17cnant vacates the Property. In the event that neither party elects
to tenniriate this Lease, Landlord shall promptly commence and diligently prosecutc to
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completion the repairs to the Property, provided insurance proceeds are available to fizlly rc.ir
itte clamage (cxcq. )t that Landlord shall not be required to rebuild, repair or ioplaee at►y
afteratiotts, partitions, fixtures, additions and ether inprovements'Mduh may have been placed
irt, oil or about the property by or for the benefit ofTenattt). During the; time when f.andlord is
prosecuting such repairs to completion, Rent payable hereuneler sliall be abated proportionately
ii-otn the date Tenant vacates the Property only to the extent rental abatement insttrattce proceeds
'ire received by .Landlord and only during the period that the Property are unfit for occupancy.
b. "t'enant's 'Fault. If any portion of the Property is damaged resulting,
from the fault, negligence or breach of this Lease by Tenant or any of Tenant's agents,
o nployers, officers or affiliates, hent shall not be dimiutislted daring the repair of such dainage
and Tenant shall be liable to Landlord for the cost of ti►e repair caused thereby to the extent such
cast is not covered by insurance proceeds.
G. Uninsared Casualty, In the uvent that �uiy portion of'the Pruperty
is damaged and is not hilly covered by insurance proceeds received by Lsutdlord, then Tenant
shall pay all costs incuiTed by Landlord.
d. Waiver. 'With respect to any damage or destruction which
Landlord is obligated to repair or may deet to repair, Tenant waives all rights to terminate this
Lease pursuant to rights otherwise presently or hereafter accorded by law.
14. Cptidei nation. In the event the property or any part thereof shall he
condemned or taken by eminent domain or sold to a public body having the power of
condemnation under threat thereof (hereinafter referred to as "taken" whether by eminent domain
or by sale under threat thereof), this Lease shall terminate as to the part taken. Any award of
compensation and damages arising from such taking shall be paid and belong to LandlotTl and
Tenant waives any claim to any part of the award from the condemning authority; provided,
however, Tenant shall be entitled to any award for (i) loss of or damage to Tenant's trade
fixtures, equipment and removable personal property, including Tenant's fencing and irrigation
equipment, -and (ii) shoving and relocation expenses. Tonant and Landlord each hereby waive
the provisions of California 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 Property.
15. Aftrneys' bees.
a-_.......,1e.ionsBetweenLandlord and:Teti ant.--In-the event -that either -
party hereto shall commence any legal action or proceeding, including an action for declaratory
relief, against the other by reason of the alleged failure of the other to perforin or keep any term,
covenant, or condition of this Lease to be performed or kept, the party prevailing in said action
or proceeding shall be entitled to recover, in addition to the prevailing party's court costs,
reasonable attorneys' fees and expenses to be fixed by the court, and such recovery shall include:
court costs and attorneys' fees and expenses on appeal. As used herein, "the prevailing party"
lueans the party who is entitled to recover his costs of suit, whether or not the suit proceeds to
final judgment. In addition, Landlord shall be entitled to reasonable attorneys' fees and expenses `
and all other costs incurred in time preparation and service of notices of default, whether or nota
legal action is subsecittently colrunenced.
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Ia. Third Party Actions Alt'thist'l7exiatill. Int carie Landlord ,shall be
,ita(Ic a party to troy litif;ation c:ouirnnentced al ainst Tonant, then Tenant sl uill pay all c xl,ew;�s,
costs and reasonable attorneys' fees incurred by or innposed on Landlord ul c;ounnuctiorn with aitch
litigation, unless Landlord shall be made a party by reason of any independent liability of
I .andIor-d catiscd by some act or omission oil the, pint of Landlord and not resulting faonn luny act
or omission on the: hart of'Tonant or from the execution of the Lease by Landlord.
16, IL,fge Payments. In the event that Tenant shall fail to pay to Landlord
-avititin five; (5) clays o[the date when clue any payment owing to Landlord pursuant to the terms
of this Lease, 'I'e,nant aclmowledges that such delinquent payment will cause Landlord to incur
additional costs, including administration and collection costs and processing and accounting
expenses and increased debt service. If Landlord has not received any installment of rent within
five (5) clays after such amount is due, Tenant shall pay a late charge of ten percent (10%) of tile
delinquent amount, which is agreed to represent a reasonable estimate of the costs incurred by
Landlord. In addition, all such delinquent amounts shall bear interest from the date such annouut
was (lite until paid in full at the Applicable Interest Rate; provided, in no event shall the
Applicable Interest Rate exceed the maximum rate permitted by law which may be charged
tinder such circuanstances. Landlord and Tenant recognize that the damage which Landlord shall
suffer as a result of Tenant's failure to pay such arnounts is difficult to ascertain and said late
(;Marge and interest are the best and reasonable estimate of the damage which Landlord shrill,
suffer in the event of late payment. All payments hereunder shall be paid in Iawful money of the
United States.
17. Default and Landlord's ReM_cdes.
a. Events ofDefault, The occurrence of any of the following slizill, at
Landlord's option, constitute an Event of Default:
(1) Any failure by Tenant to snake any payment required to be
made by Tenant hereunder where such failure continues for five (5) days after payment is clue.
(2) A failure by Tenant to observe and perform any other
provision of this Lease to be observed or performed by Tenant where such failure continues for
thirty (30) (lays after written notice thereof by Landlord to Tenant; provided, however, that if
such default is of a type which by reasons other than within the reasonable control of Tenant is
not susceptible of cure within such thirty (30) -day period, but is susceptible of cure within a
reasona e perio o tirrtb, t en no went of Default sfrall occur liereiii�nder unless 'f non# shall fail
to connmence to cure such default within such thirty (30) -day period or shall fail to diligently
pursue the cure of such default to completion within a reasonable period of time thereafter,
which reasonable period shall in no event exceed ninety (90) days after written notice of such
condition.
(3) The making of a general assignment by Tenant for the
lacriefit of creditors, the filing of a voluntary petition by Tertisnt or the filing of an involuntary
petition by any of Tenant's creditors seeking the rehabilitation, liquidation or rcorganization of
'!'enact under any law relisting to bankruptcy, insolvency or other relief of debtors and, in the
case of an involuntary action, the failure to remove or discharge the cannc within sixty (60) clays
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Of :311011 filing;, the appointment of a receiver or other c;udodian to take posses; iou of uAtmurtiaally
atll of'T'enarrt's assets or this leascltold, Tenant's it►solvency or inability to pity Tentut's debts or
failure g;ertorally to pay Tenant's debts when due, any court entering a decree or order directing;
the winding up or liquidation ofTenant or of'substantially Lilt of'l atiant's assets, Tenant nt taking
,ray action toward the dissolution or winding up of Tenant's affairs, the cessation or suspension
of Tenwit's Ilse of the Property, or the attachment, execution or other judicial seizure of
ulrstantially all of Tenant's assets or this Leasehold; or
(4) 'T'enant's vacation or abandorinient of the Property for a
period ofthirty (30) consecutive days, and Tenant waives any right to notice that Tenant may
have under applicable law..
lr. Remedies of Landlord. In the event of an Event of Default, in
addition to any other remedies available to Landlord at law or in equity, Landlord :;hall have the
immediate option:
(1) To terminate this Lease and all rights of Tenarit hereunder
by giving written notice of such intention to terminate to 'Tenant and, on the date specified in
atter► notice, this Lease shall terminate; or
(2) To peaceably reenter upon the Property or any part thereof;
and Landlord may from. time to time, without terminating; this Lease, relet the Property or any
Part thereof for such term or terms and at such rent and upon such other terms and conditions as
`i Landlord in its sole discretion may deem advisable; and no such reentry or taking possession of
the Properly by Landlord shatl be constrtied as an election to terminate this Lease unless a
written notice of such intention is given to Tenant or unless the termination thereof is decreed by
a court of competent jurisdiction. Notwithstanding any reletting without termination by
.Landlord because of any default by Tenant, Landlord may at any time after such reletting; elect to
terminate this Lease for any such default.
(3) Landlord shall have time right to recover from Tenant: (a)
the worth, at the time of award, of the unpaid Rent that had been earned at the time of
termination, (b) the worth, at the time of award, of the amount by which the unpaid Rent that
would have been earned after the date of termination until the time of award exceeds the aunount
of loss of Rent that Tenant proves could have been reasonably avoided, (c) the worth, at the time
of award, of the amount by_which the unpaid Rent for the balance of the Term fitter the.time af____
award exceeds the amount of the loss of Rent that Tenant proves could have been reasonably
avoided, and (d) any other amount, and court costs, necessary to compensate Landlord for all
detriment proximately caused by Tenant's default. The phrase "worth, at the time of award," as
used in (a) and (b) above, shall be computed at the greater of ten percent (10%) per annum or
five percent (5% )per annum plus the federal discount rate on advances to inernber banks in
effect at the Federal Reserve Hank of San Francisco on the twenty-fifth (25th) clay of the molith
preceding the date of this Lease, and as used in (c) above, shall be computed by discounting such
:.unount at the discount rate of the Federal Reserve Dank of Sari Francisco at the time of award
plus one percent (M)
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c. l_o tiTnrACtor veTT thoagh an Evcut of Dcfault rutty have
occtirred t:nd is continuing, this Lease jhall continue in effect for so long as Landlord does not
terminate 'Tenant's right to possession. Lwidlord may enforce all of Landlord's rights and
remedies under this L case, including the right to recover Rent as it becomes dile, and Laucllord,
without terminating this Lease, may, during the period Tenant is in default, cater the Property
and inlet the stone, or any portion thereof, to third parties fbr'f enattt's account mid Tenant shall
be liable to Landlord for all costs Landlord incurs in reletting the Property, including, without
limitation, brokers' commissions, expenses of remodeling the Property and like costs. Reletting
may be for a period shorter or longer than the remaining Term. Tenant shall continue to pay the
rent on the elate the same is clue. No act icy Ltuidlord hereunder, iztcltTdiag outs of rnaintenauce,
preservation or efforts to lease the Property or the appointment of a receiver upon application of
Landlord to protect Landlord's interest under this Lease, shall terminate this Lcase tntless
Landlord notifies Tenant that Landlord elects to terminate this Lease, that the rent that Landlord
zeceives froTn reletting shall be applied to the payment of, first, any indebtedness from Tenant to
Landlord other than Rent and Item Property Taxes; second, all costs, including maintenance,
incurred by Landlord in reletting; and, third, Rent and Real Property Taxes under this Lease:
After deducting the payments referred to above from the rent received from reletting, any sum
remaining from the rental Landlord receives from reletting shall be held by Landlord and applied
in payTnent of future rent as Rent becomes due wider this Lease. In no event shall Tenant be
entitled to arty excess rent received by Landlord. If, on the date rent is due under this Lease,.the
Rent received fi•otn the reletting is less than the hent due on that date, Tenant :shall pay to
I.tutdlord such difference, in addition to the remaining rent due, all costs, including maintenance,
Landlord incurred in reletting. So long as this Lease is not terminated, Landlord shall have the
right to remedy any default of Tenant, to maintain or improve the Property, to cause a receiver to
be appointed to administer the Property and new or existing subleases and to add to the rent
payable hereunder all of Landlord's reasonable costs in so doing, with interest at the Applicable
Interest Rate from the date of such expenditure.
d. Cts t laAivr,.Bach right attd remedy of Landlord provided for
herein or now or hereafter existing at law, in equity, by statute or otherwise shall be ctunulative
and shall ridt preclude Landlord from exercising any other tights or remedies provided for in this
Lease or now or hereafter existing at law or in equity, by statute or otherwise. No payment by
Tenant of a lesser amount than the Rent nor any endorsement on any check or letter
accompanying any check or payment as rent shall be deemed an accord and satisfaction of the
full payment of Rent; and Landlord may accept such payment without prejudice to Landlord's
_ „right #a recover the balance of such Rent or.10 pursue ether r m_edies�_
18. Surrender of Prop . This Lease shall terminate and become null and
void without further notice upon the expiration of the Term; and any holding over by Tenant
after such expiration shall not constitute a renewal hereof or give Tenant any rights under this
Lease, except by and with the written approval of Landlord, If Tenant Fails to surrender the
Property upon the expiration of the Term of this Lease despite demand to do so by Landlord,
'tenant shall indernnify and hold Landlord harmless from all loss or liability, including, without
limitation, any claims made by any succeeding lessee, arising or resulting from such failure to
:un -ender,
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19. I-AiHitt Not �1, ni . 'Cltis ittdeuture is o�te ot'loast and not oue of
tmrtncrsihip or agency; LandIord shall not be liable for any dobt or obligation contracted or
lacuxicd byTenant; and Tortant is not the agent of'Laudlord for any purpose.
20. p't 0 af'ces. All rents and other stuns payablo by Teitartt to
La ndIord Hereunder shall be paid to Landlord sit its business office at the address designated
below the signature of Landlord on the siguature page(s) hereof or at such othor place as
I'Aandlord may hereafter designate in writing. Auy notice to be given or other document to be
dolivered by either party to the other hereunder tnay be delivered in person to Landlord or to
Tenant or may be deposited in the United States nail, duly registered or certified, postage
prepaid, and addressed to the respective party at the address designated below the respective
si fntatures of the parties on the signature page hereof. Either party hereto may from time to time,
by five (S) days' prior written notice to the other, served in the manner herein provided,
designate a different address. If any notice or other document is sent by snail, as aforesaid, the
L Hine shall be deemed served or delivered forty-eight (48) hours after the mailing thereof.
21. Waivers. No waiver by Landlord of any provision hereof shall be deemed
a waiver of any other provision hereof or of arty subsequent breach by Tenant of the same or any
other provision. Landlord's consent to or approval of any act shall not be deemed to render
unnecessary the obtaining of Landlord's consent to or approval of any subsequent act by Tenant.
22. Scong and Arne do Ment. This Lease is said shall be considered to be the
only agreemennt between the parties hereto related to the Property. All negotiations and oral
".� agreements acceptable to both parties are included herein. No atnendnient or other modification
of this Lease shall be effective unless in'a writing signed by Landlord and Tenant.
23. : Frans fer by Landlord. The term "Landlord" as used in this Lease, so far
as covenants or obligations on the part of Landlord are concerned, shall mean and include only
the owner or owners at the time in question of the Property. Tit the event of any transfer of the
title to such Property, Landlord herein named (and in case of any subsequent transfers or
conveyances, the then grantor), except as hereinafter provided, shall be automatically freed,
released and relieved from all personal liability with respect to performance of any covenants or
obligations on the part of Landlord contained in this Lease on and after the date of the transfer or
conveyance of the title to the Property, provided that any funds in which Tenant has an interest
which are in the hands of such Landlord or the then grantor at the time of such transfer shall be
turned aver to the grantee and any amount then due and payable to Tenant by Landlord or the
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then- grantorurz er any provision of this Lease shall be paid -to Terlarm ." It -is Intend -ed hereby that
the covenants and obligations contained in this Lease on the part of Landlord shall, subject to the
foregoing, be binding on Landlord, its successors and assigns, only during and in respect of their
respective successive periods of ownership.
24. SUITCrider or Cancellation, The voluntary or other surrender of'this Lease
by Tenant, or a mutual cancellation thereof, shall not work a merger and shall, at the option of
Landlord, terminate all or any existing subleases or may, at the option of Landlord, operate as an
assignunent to Landlord of any or all of such subleases, whether or not previously consented or
,<pproved by Landlord, or may, at the option of Landlord, operate as an assignment to Landlord
of any and all stcch subleases, whether or not previously consented or approved by Landlord, or
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xiiay, at the option ot`Latidlord, oporate sus an a sigrtrriont to Lauclltrrd of any and sill pitch
:,til�leasr;s.
15. 1lazardous Matertals.
a.
Use. Tenant skull not cattle or perinit arty Hazardous Materials to
be brought upon, stored, used, generated, released into the environment or disposed of on, tinder,
f mm or about ilio prope-Ity (which, for piuposes hereof, :;hall include, but is not limited to,
,,tibsurfnce ;soil aird grotutd water) by Tenant, its al exits, cniplvyees, contractors or invitees
'Without the prior written consent of Landlord. Landlord, in its sole and absolrtte discretion, may
consent or refuse consent to Tenant's generation, storage or use of FIazardous Materials on, under
or about the Property or may condition its consent on Tenant's demonstration to Landlord, in its
sole and absolute judgment, that such Hazardous Materials are necessary or useful to Tenant's
business and will be generated, stored, used and disposed of in a manner that complies with all
Applicable Laws regulating such Hazardous Materials and with good business practices.
Without limiting any other rights or remedies of Landlord tinder this Lease, Tenant shrill pay the
cost of any clean-up work performed on, under or about the Property as required by this Lease or
any Applicable Laws in connection with the removal, disposal, neutralization or other treatment
of such Hazardous Materials. Landlord may require Tenant, at Tenant's sole cost and expense,
to conduct monitoring activities on or about the Property satisfactory to Landlord, in its vole and
absolute judgment, concerning the release or potential release of Hazardous Materials on, Unr er,
#roar or about the Property caused or permitted by Tenant, its agents, employees, contractors or
invit=.
b. Routine 1 enorting. Tenant shall promptly notify Landlord of, and
shall promptly provide Landlord with true, correct, complete and legible copies of, all of the
following environmental items relating to the Property which may be fled or prepared by or on
behalf of, or delivered to or served upon, Tenant: reports fled pursuant to any self -reporting
requirometits, reports fled pursuant to any Applicable Laws or this Lease, all permit
applications, permits, monitoring reports, workplace exposure and community exposure
warnings or -notices and all other reports, disclosures, plans or documents (even those which may
be: characterized as confidential) relating to water discharges, air pollution, waste generation or
disposal, underground storage tanks or Hazardous Materials.
c. Incident Pe mine. In addition to Tenant's routine reporting
obligations described above, Tenant shall promptly notifyLandlord of, and shall Promptly- - - provide LAti ford -with trdii , correct, complete and Icgible _ copies of all -off SO- -1,6110- W-Fmg ---------
environmental
- environmental items relating to the Property which may be filed or prepared by or on behalf of,
or delivered to or served upon, Tenant: all orders, reports, notices, listings and correspondence
(even those which may be considered confidential) of or concerning the release, investigation of,
compliance, clean up, remedial and corrective actions, and abatement of Hazardous Materials
whether or riot required by Applicable Laws, including, but not limited to, reports and notices
required by or given pursuant to any Applicable Laws rind sill complaints, pleadings and other
legal documents riled against Tenant related to Tenant's use, handling, storage or disposal of
Hazardous Materials. ]ti the event of a release of any Hazardous Materials on the Property or to
the enviroamcnt, Tenant shall proinptly provide Landlord with copies of all reports and
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k;oi usponderrce with or from all ,r,ovetnnrcutal agencies, rirtthodfles or any othor raIating
;o such Wiea";e.
d. Itnpection: Cogilfliance. Landlord and Landlord's agents shall
;cava tile, right, but not the obligation, to inspect, investit ate,sample aurd/or monitor the i'ropurty,
hicluding ally soil, water, groundwater or other sampling and ,uiy other testing, digging, drilling
or analyses, at any tune to determine whether Tenant is complying with the tertrrs of this Lease 'ill
iogards to Hazardous Materials and, in connection therewith, Tenant shall provide Landlord with
Bull access to all relevant facilities, records and personnel. If Tenant is not in compliance with
any of the provisions hereof, Landlord wid. Landlord's agents shall have the right, but nut the
obligation, without limitation upon any of Landlord's other rights curd remedies under flus Loase,
td immediately enter upon the Property and to discharge Tenant's obligations hereunder at
'T'enant's expense and notwithstanding any other provision of this Lease. Landlord and
Lalidlord's agents shall endeavor to minimize interference witli Tenant's business but shall not be
liable for any such interlbrence. All sums reasonably disbursed, deposited or incurred by
Landlord !it curuiection therewith, including, but not limited to, all costs, expenses and achial
attortreys' fees, shall be clue and payable by Tenant to Landlord, as an item of Additional Rent,
oar demand by Landlord, together with interest thereon at the maximum rate permitted by
applicable law from the (late incurred by Landlord until paid by Tenant.
e. Legat[_A�ns. Landlord, at Tenwit's sole cost and expense, shat]
have the right, but not the obligation, to join and participate in any legal proceedings or actions
initiated in connection with any claims or causes of action arising out of the storage, generation,
} use or disposal by Tenant, its agents, employees, contractors or invitees, of Hazardous Materials
on, under; from or about the Property. If the presence of any Idaiardous Materials on, tinder or
about the Property caused or permitted by Tenant, its agents, employees, contractors or invitees,
could result or results in (i) injury to any person, (ii) injury to or contamination of the Property or
(iii) injury to or contamination of any real or personal property wherever situated, Tenant, at its
sole cost and expense, shall promptly take all actions necessary to return the Property to the
condition existing prior to the introduction of such Hazardous Materials to the Property and to
remedy or repair any such injury or contamination. Notwithstanding the foregoing, Tenant shall
not, without Landlord's prior written consent, take any remedial action in response to the
presence of any Hazardous Materials on, under or about the Property, or enter into any
settlement agreement, consent decree or other compromise with any goverrunental agency with
respect to any Hazardous Materials claims without Landlord's prior written consent; provided,
however, Landlord's prior written consent shall not be necessary in the event that the presence.of'
Hazardous Materials on, tinder or about the Property (i) poses an immediate threat to the health,
safety or welfare of any individual or (ii) is of such a nature that an immediate remedial response
is necessary and it is not possible to obtain Landlord's consent before taking such action.
f, indemnification. To the fullest extent pennitted by law, Tenant
:shrill indemnify, hold harmless, protect and defend (with attorneys acceptable to Landlord)
Landlord and Landlord's agents, and any successors to all or any portion of Landlord's interest
in the Property and their directors, officers, partners, employees, authorized agents,
representatives, affiliates and mortgagees, from and against any and all liabilities, losses,
clarnages (including, but not limited to, damages for the loss or restriction on use of rentable or
iisable space or any amenity of the Property or any surrounding property or dainages arising
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U.01a rury adverse itiipact oyt marketing of space in the Vropwy o, in =irottnding p opt,, iii:;,),
Iffininution in the value of the Property, judgments, fines, dennttuls, clainw, t'ecovertcs,
deficiencies, costs and oxpenses (including, but not limited to, reasotrable attorneys' tees,
disbursements and court cost and all other professional or consultant's exlrettses), whether
fcrreseeable or unforeseeable, arising directly or indirectly out of the presence, use, generation,
:storage, treatment, on or off-site disposal or transportation of Hazardous Mate'rials on, into, from,
rtnder or about the Property by'Fenant, its agents, employees, contractors, licensees or itivitees,
turd specifically including the cost of any required or neces&u-y repair, restoration, 0ean-up
(includhig, but not limited to, the costs of investigation and removal of Hazardous Materials) or
detoxification of the Property and the preparation of any closure or other required plans, whether
or not such action is required or necessary during the Term or after the expiration of this Lease.
Neither the written consent by Landlord to the presence of Hazardous Materials ort, tinder or
itbout the Property nor the strict compliance by Tenant with any Applicable Laws shall excuse
'L errant from Tenant's obligation of indemnification pursuant hereto. Notwithstanding any other
provision of this Lease, Tenant's obligations pursuant to the foregoing indemnity shall survive
the termination of this Lease.
g. Conc]_usion of Lease. Promptly upon the expiration or sooner
termination of this Lertse, Tenant shall represent to Landlord in writing that (i) Tenant has made
a diligent offort to determine whether any Hazardous Materials are on, under or about the
Property and (ii) no Hazardous Materials exist on, under or about the Property other than as
specifically identified to Landlord. by Tenant in writing. To ensure performance of Tenant's
_ diligence obligations hereunder, Landlord may, at any time within one (1) year of the expiration
of the Term or upon the occurrence of an Event of Default, by notice to Tenant, require that
',Tenant promptly commence and diligently prosecute to completion an environmental evaluation
of the Property. In connection therewith, Tenant shall, at Tenant's sole cost and expense, hire an
outside consultant satisfactory to Lattdlord to perform a complete environmental audit of the
Property, an executed copy of which shall be delivered to Landlord within thirty (30) days after
Landlord's request therefor. If Tenant or the environmental audit discloses the existence of
Hazardous Materials on, under or about the Property, Tenant shall, at Landlord's request,
immediately prepare and subinit to Landlord within thirty (30) days after such request a
comprehensive clean-up plan, subject to Landlord's approval, specifying within thirty (30) clays
after Landlord's request therefor the actions to be taken by Tenant to return the Property to the
condition existing prior to the introduction of such Hazardous Materials. Upon Landlord's
approval of such clean up plan, Tenant shall, at Tenant's sole cost and expense, without
__..limitation.an-any rights and -remedies -of Landlord under this-)rease,.irmnediately implement such -----
plan and proceed to clean up such Hazardous Materials in accordance with all Applicable Laws
and as required by such plan and this Lease. Nothing contained in this subsection (h) shall
relieve or release Tenant from its obligations hereunder.
26. Limitntionof Liability. The obligations of Landlord under this lease etre
not personal obligations of the individual partners, directors, officers, shareholders, agents or
urnployees of Landlord; and Tenant shall look solely to the Property fbr satisfaction of any
liabilityand shall not look to other assets of Landlord nor seek recourse against the assets of the
individual partners, directors, officers, shareholders, agents or employees of Landlord.
Whenever landlord transfers its interest, Landlord shall be automatically released from fijitht,r
performance under this Lease and from all further liabilities and expenses hereunder and the
20
L -M
ur,wsferee ofLatutlord's interest shall at;sunno all liabilities sued obligations off.,suullord
}nrreunder from the elate of such transfer.
27. Y,atot)pel, Attornment and Subordina icl,
a. f sto . Within ten (10) days sitter request by Landlord, Tunatnt
shall deliver an estoppel certificate duly cxecated (and acknowledged if required by any lelnder),
in the form attached hereto as Exhibit 8, to any proposed nnortgagee, purchaser or Lmidlord.
Tcmunt's failure to deliver said statement in such time period :,hall be conclusive upori Tenant
that (a) this Lease is in full force and effect, without modification except as nnay be represented
by Landlord; (b) there ure no uncured defaults in Landlord's performatnce and Tenant hua no
right of offset, counterclaim or deduction against Rent hereunder; and (c) no more than one
period's Rent has been paid in advance. Landlord reserves the right to substitute a different form
of estoppel certificate upon the request of any proposed mortgagee orparchsser. If any financier
should require that this Lease be amended (other than in the description of the Property, the
'term, the Permitted Uses, the Rent or as will substantially, materially and adversely affect the
nights of Tenant), Landlord shall give written notice thereof to Tenant, which notice shall be
accompanied by a Lease supplement embodying such amendments. Landlord shall, within
ten (10) days after the receipt of Landlord's notice, execute the tendered lease supplennexnt.
b. Attornment. In the event of a foreclosure proceeding, the exercise
of the power of sale under any mortgage or deed of trust or the termination of a ground lease,
Tennant shall, if requested, attom to the purchaser thereupon and recognize such purchaser as
.� Landlord under this Lease.; provided, however, 't'enant's obligation to attorrn to such purchaser
;hall be conditioned upon Tenant's receipt of a non -disturbance agreement.
c. Subordination. This Lease shall be subject and subordinate to all
ground leases and the lien of ail mortgages and deeds of trust which now or hereafter affect the
Property or Landlord's interest therein, or on or against all such ground leases, and all
amendments thereto, all without the necessity of Tenant's executing further instruments to effect
such subordination. If requested, Tenant shall execute whatever documentation may be required
to further effect the provisions of this paragraph,
28. Miscellaneous.
a. No Brokers. Tenant and Landlord each represent and warrant to
the -other thatit has-not-employed-any-brQker, finder or -other similar persorr in connection with---
tile
ith-- the transactions contemplated by this Lease; and each inderrmifies the other from and against any
liability, loss or cost (including without limitation, reasonable attorneys' fees and court costs)
should its representation and warranty prove incorrect.
b. Time of tine Essence. Tenant understands and agrees that the time
and inanner set forth in this Lease for the perfamance. of the tornns and conditions contained
lrerein are critical provisions of this Lease, that strict cumpliarnce therewith is a material
consideration for this Lease and that such provisions may be altered only by a writing executed
by Landlord and 'Tenant expressly reciting that it is all arrnenndrnenit to this Lease.
0. SUBSTANTIAL COMPLIANCE WITH SUCH PROVISIONS IS INSUFFICIENT AND
21
,�m
•
- f,E8,'ML EXPIZE,S,SI,Y WAIVES ANY RIt}HT'1't) .�1?EIC :;T'I?GTT IC 1'l;1tF()TLNLArT(;L,
OAMAGES OR 0T1IFR REMEDWS Irl THE EVENT OF SUllSTAN'.1`ML Liu i' m'r
TRIC f COMPLIANCE WITH THE TERMS AND CONDITIONS OF THIS LEAST;.
c.. 1-Tea� ditt. The headings herein are used only for the purpose of
('01 venienc:e and shall not be decuned to contain or Iiunit (fie subject matter of thereof, ttor to be
considered in the construction thereof.
d. Successm end Assigns. leach azul all c>Nhe obligations,
covenants, conditions grid restrictions of this Lease shall inure to the benefit of and be binding
upon and enforceable against, as the case may recluire, the successors and assigns of Landlord
<und, subject to the restrictions against assignments and subletting in this Lease contained, any
.authorized assigns, transferee, sublessee and other successor in interest of Tenant.
e. Severabilitv. Any provision of this Lease determined to be invalid
by a court of competent jurisdiction shall in no way affect any other provision hereof.
E Gender; Number. In this Lease the neater gender includes the
Ierninine,)rid inasci line and the singular number includes the plural and vice versa, tivherever the
context no recltuires.
a- Cognterparts. This Lease may be exectuted itu any number of
counterparts, each of which is an original, but all of which shall constitute one instrument.
i h, Govcming Law. This Lease shall be governed by and construed in
accordance with the laws of the State of California.
i. Rights Cumulative. All rights, options and remedies of Landlord
contained herein shall be constrtued and held to be cumulative and no one of them shall be
exclusive of the other; and Landlord shall have the right to pursue any one or all of such
remedies or any other remedy or relief which may be provided by law, or in equity, whether or
not stated in this Lease.
j. Waiver of ur Trial. LANDLORD AND TENANT EACH
ACKNOWLEDGES THAT IT HAS HAD THE ADVICE OF COUNSEL OF ITS CHOICE
WITH RESPECT TO RIGHTS TO TRIAL BY JURY UNDER THE CONSTITUTIONS OF
- THE -UNITED STATSS-ANI-TH-B- STATE -OF--EALIFOIM-,A -RACH PARTY-E3iPRESSLY------ _ —
AND KNOWINGLY NAIVES AND RELEASES ALL SUCH RIGHTS TO TRIAL I3Y JURY
IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER PARTY
AGAINST THE OTHER ON ANY MATTERS ARISING OUT OF OR IN ANY WAY
CONNECTED WITH THIS LEASE AND/OR ANY CLAIM FOR INJURY OR DAMAGE.
lc. No Memorandum. Tenant shall not record this Lease or a short
form mernorarulcrrn hereof without Landlord's prior written consent,
22
0 -
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IN WITNESS WIIERE-OF,'Fenatit and Lmd1oid have hereunto subscribed their
:1;1111es dic duty :aid ycur first hereinabove written.
'landlord"
RANCHO MISSION VIEJO, LLC,
a Delaware limited liability company,
as Agent and Manager for the Owner
13y:
Its:
Address: 28811 Ortega Highway
San Juan Capistrano, CA 92675
"Tenant"
THE OAKS, a Delawme corporation
B:
Joan Ii
vine Smith
President 'i,
resident
;d/rnes� I. Swillu n
Assistant Secretary
Address: P.O. Box 1453
San luau Capistrano, Ca 92675
610 Newport Center Drive
Suite 1220
Newport Beach, CA 92660
23
KOLHWJINZ�115761
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Fire Prolivay tIcing located 1n the County of Orange, State of California, de:xribed as (clltows:
':OI. ILI II}RiIIIV V6202(JZCi DD DOC)
i llat portion IAUnLlecl by a line CnmmenLrnri Lit a Rohit in the
'muthwesterty houndury of Rancho Mlsston Viefo, winch
intersects with the southerly boundary of Ortega lltghway
elght of way (routo 74) and procbeding southeasterly wrong
raid boundary line a distance of 501.3 feet; thence northeasterly
75 feet perpendicular to Bald boundary; thence northerly
230 feet, more or loss, to Its puint of Intersectlon wlth the
easterly boundary of the Southern Culifornla Edison Company
easement; thence northwesterly along said easement boundary
to Its Intersectlon with the southerly boundary of Ortega
Highway; thence southwesterly along said boundery to the
point of beginning.
As well as arq area of upproxlmateiy four thousand one hundred
twont -five (4,125) square feet consisting of the triangular
parcel bounded by the a'proxlmatoly one hundred twenty-five
( 125) foot extension of the existing two hundred thirty (130)
foot oasterly line of the demised premisas, its seventy-fivo
(75) foot southeasterly line and that portion of the Raneho
boundary falling butween the above two lines.
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Mbit 13
f'stogt el Cor ilicate
Re: Lease dated , 19µ ("Lease") by and between
(".Landlord") and ('°Tenant")
Gentlemen. -
Reference is made to the above-described Lease in which the undersigned is the
"Tenant. We understand that you are entering into a transaction with the Landlord which relates
to, among other things, this Lease; and we hereby, as a material inducement for you to entdr into
such transaction, represent that:
1. A true and correct copy of the Lease is attached hereto asExh b -i-1.
2. There are no modifications, amendments, supplements, arrangements, side
letters or understanding, oral or written, of any sort, modifying, amending, altering,
Supplementing or changing the terms of the Lease except as follows:
3, The Lease is in full force and effect, and the Lease has been duly executed
and delivered by, and is a binding obligation of, the Tenant as set forth therein.
4. The undersigned acknowledges (a) that the annual rent on the Lease has
been paid up to and including , 19_, and (b) that the annual rent during the
Cj years of the tenu of the Lease is Dollars
S. To the best of our knowledge, the improvements on the Property are free
from defects in design, materials and workmanship; and the improvements meet all
governnwntal requirements, including, but not limited to, zoning and environmental
requirements -
6. --- -..._ - - --- - - —.. -- - ----- -- ---
C. The Lease is not in default, and Landlord has performed the obligations
required to be performed by Landlord under the terms thereof through the date hereof.
Dated: _, 19_
� ]l
THE OAKS, a Delaware corporation
By:
Its:
EXHIBIT E
List of Property Information
• Ranch Plan Entitlement Description for Planning Area 1 Parcels 7 and 8 (Exhibit
E to Term Sheet)
• Equestrian and Sports Field Access and Use License (Exhibit F to Term Sheet)
(Exhibit C to PSA)
• Lease of Ranch Property (Exhibit G to Term Sheet) (Exhibit D to PSA)
• Existing Land Uses in Planning Area 1 (Exhibit 4.1-3 to Ranch Plan EIR) (Exhibit
H to Term Sheet) (Exhibit M to PSA)
• Agricultural and Other Existing and On -Going Uses (from Section II I. H of Ranch
Plan PC Text) (Exhibit I to Term Sheet) (Exhibit M to PSA)
• Temporary Uses Permitted (from Section III.J of Ranch Plan PC Text) (Exhibit J
to Term Sheet) (Exhibit M to PSA)
• Map of "Do Not Disturb Areas" (Exhibit K to Term Sheet) (Exhibit O to PSA)
• Trails and Bikeway Concept for Planning Area 1 of Ranch Plan PC (Exhibit L to
Term Sheet) (Exhibit R to PSA)
• Form of Declaration of Irrevocable Covenant (Exhibit M to Term Sheet)
• Form of Conservation Easement (Exhibit N to Term Sheet) (Exhibit J to PSA)