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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. • • 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, P p Y p (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. 9 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. 6 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 7 any of the terms androvisions hereof shall not be deemed to be a waiver of an of the terms and p Y 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] 0 0 IN WITNESS WHEREOF, the parties have executed this License as of the date first written above. • :7 "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 • EXHIBIT A DESCRIPTION OF THE PROPERTY, THE RIDING PARK PARCEL AND THE RIPARIAN RESOURCE AREAS (See ,-attached) i0 Riding Park Access and Use License - Exhibit A • • EXHIBIT B DEPICTION OF OVERFLOW PARKING AREAS (See .Ittachea) y181 -u3 u7, v. 2 11 O N LU w M z m 0 LL a Z Q O J Qom' 81 IN LL� •1 t '1 O N LU w M z m 0 LL a Z Q O J Qom' 81 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. • • • D82/21 183021.2 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. 0 • 1� (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: m • (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; 0.- • (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. 0 L' 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, 7 • 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. 0 • 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 9 • (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 10 • 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 11 • 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 M • 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. t3 • 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 14 • • 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) W, • C] • 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, 16 • 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 - 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 17 • 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 18 • 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 19 • 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 - • 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 • • • 3 ' xhiilit A �)<;,>crilJtion ref P�'cr�l�;�t� 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. lr, 5 Y �t f f.y I ! f. l r p+ :�+•;(; + �, f! l �! �f f, 1 ¢ S ro-r .t� { r " r { 4 � µ r a ., YS 3�I 4i'!,r- t Vii':. i�! 9'r{.'''Cdr �.,`�`! \ �i� i4�.'t +' � r r4 �4,a s,L`t-L.�.Sf] ''.s£ ti •�i'? yry�,q s. �' ! t 'F ��.'�,'-��,. {S'i .. f ' _ • 2 'a'1] • �y, 1 ti lr i l �� 1j4 _F • r fi_ }ly, '. MAN !'i�. yr,R,,it' �2q *a -.L {!"K•"t_;999777 y � , }�,ijk1��. ' � t r�?� +, {� r•r r 'it; t, t � �t`�ys, � �� •F� �:!? ! ai� x h�r5''� , ��y k� ti,} {-� � r -v � �� rl, ii'l' I �r-7 r• � r - �' '. 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II � �r � ! -, r r.. • 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)