Loading...
HomeMy WebLinkAbout1990-430 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1 RESOLUTION NO. ~~)-7"gc:! 2 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO APPROVING A CERTAIN DISPOSITION AND DEVELOPMENT 3 AGREEMENT BY AND BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO AND NEW FRONTIER COMMERCIAL PROPERTIES, INC., A 4 CALIFORNIA CORPORATION, PERTAINING TO THE DEVELOPMENT OF A SHOPPING CENTER IN THE NORTHWEST REDEVELOPMENT PROJECT AREA. 5 6 WHEREAS, the City of San Bernardino, California (the 7 "City"), is a municipal corporation and a charter city duly created and existing pursuant to the Constitution and the laws of 8 the State of California; and 9 WHEREAS, the Community Development Commission of the City of San Bernardino (the "Commission") on behalf of the Redevelopment Agency of the City of San Bernardino (the "Agency" ), is a redevelopment agency, a public body, corporate and politic of the State of California, organized and existing pursuant to the Community Redevelopment Law (Part 1 of Division 24) commencing with Section 33000) of the Health and Safety Code of the State of California (the "Act"); and WHEREAS, the Redevelopment Plan for the Northwest Redevelopment proj ect (the "Redevelopment Plan") was previous I y approved and adopted by the Mayor and Common Council of the City of San Bernardino (the "Council") by Ordinance No. MC-189, dated July 6, 1982; and WHEREAS, the Redevelopment Plan provides for the redevelopment of real property pursuant to the Redevelopment Plan by owners thereof or by parties seeking to acquire real property from the Agency; and WHEREAS, Section 33391 of the Act provides that a redevelopment agency may acquire any real or personal property DAB!ses!Pro-Area.res October 11, 1990 1 1 wi thin a redevelopment proj ect area or for the purposes of 2 redevelopment agency may dispose of any real or personal 3 property within a redevelopment project area or for the purposes 4 of redevelopment; and 5 WHEREAS, the Agency and New Frontier Commercial 6 Properties, Inc., a California corporation (the "Developer") 7 desire to enter into a certain Disposition and Development 8 Agreement (the "Agreement"), a copy of which is attached hereto 9 as Exhibit "A" and incorporated herein by reference, pursuant to 10 which, among other matters, the Developer would acquire from the 11 Agency certain real property (the "Property") which is described 12 in Attachment "2" to the Agreement. The property is located 13 within the area subject to the Redevelopment Plan (the "Project 14 Area"). The acquisition of the Property would be for purposes of 15 the redevelopment thereof, as described in the Agreement, 16 including construction by the Developer of approximately Ninety 17 Five Thousand (95,000) square feet (subject to changes caused by 18 a later survey), of building space on a Four Hundred Thousand 19 square foot site including parking, and landscaping areas for the 20 development of a commercial retail shopping center (the 21 "Project"); and 22 WHEREAS, the Agency Staff has prepared and made available 23 for public inspection a certain Summary Report (the "Summary") 24 concerning the proposed Agreement, as required by Health and 25 Safety Code Section 33433, a copy of which is on file with the 26 Agency and is incorporated herein by reference; and 27 WHEREAS, the City has duly noticed and conducted a public 28 DAB!ses!Pro-Area.res October 11, 1990 2 1 hearing in accordance with the requirements of Health and Safety 2 Code Section 33433 concerning the proposed sale of the Property 3 by the Agency to the Developer pursuant to the proposed 4 Agreement; and 5 WHEREAS, the City has duly noticed and conducted a public 6 hearing in accordance with the requirements of Health and Safety 7 Code Section 33431 concerning the proposed sale of the Property 8 by the Agency to the Developer pursuant to the proposed 9 Agreement; and 10 WHEREAS, based upon evidence and testimony submitted to the 11 Council, it is reasonable and appropriate for the Council to 12 approve the proposed Agreement. 13 NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND COMMON 14 COUNCIL OF THE CITY OF SAN BERNARDINO AS FOLLOWS: 15 SECTION 1. The Council finds and determines that the 16 development of the Property as described in the proposed 17 Agreement is within the scope, terms and provisions of the 18 Redevelopment Plan. 19 SECTION 2. The City has held a public hearing on the 20 disposition of the Property in accordance with Health and Safety 21 Code Sections 33431 and 33433 and hereby accepts and approves the 22 Summary as prepared by Agency Staff. 23 SECTION 3. The Council hereby finds and determines that 24 the conveyance of the Property to the Developer pursuant to the 25 terms of the Agreement for less than fair market value and the 26 provision of redevelopment assistance as more fully described in 27 the Agreement is reasonable and necessary to effectuate the 28 DAB!ses!Pro-Area.res October 11, 1990 3 10 11 12 13 14 15 16 17 18 20 21 1 purposes of the Redevelopment Plan in that it will permit the 2 Developer to develop the Property in order to eliminate blight, 3 to create employment opportunities, to increase the value of real 4 property in the Project Area and to cause the City and the Agency 5 to receive additional tax revenues as a result of redevelopment. 6 SECTION 4. The Council hereby approves the proposed 7 Agreement and the conveyance of the Agency's interest in the 8 Property to the Developer. 9 SECTION 5 . This Resolution shall take effect upon adoption. / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / DAB/ses/Pro-Area.res 4 October 11, 1990 19 22 23 24 25 26 27 28 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO. . .BY AND BETWEEN THE REDEVELOPMENT AGENCY OF THE 2 CITY OF SAN BERNARDINO AND NEW FRONTIER COMMERCIAL PROPERTIES. . 3 I HEREBY CERTIFY that the foregoing resolution was duly 4 adopted by the Mayor and Common Council of the City of San held on the /~ 5 Bernardino at a v'tr~L(~ meeting thereof, day of t::.>hr'<f;A, ~990, by the following vote, to wit: 6 7 Council Members: ABSTAIN AYES NAYS 8 ESTRADA ,/ 9 REILLY FLORES a/ MAUDSLEY V / v~ MINOR POPE-LUDLAM j,,/'OC MILLER ~~%~<L~ Cit Clerk LL /7 day . The foregoing resolution is hereby approved ~his of cC~~h/ft:-~ ~ I I , ; . / ,/.-1- / 'w: !'l-. ~lc~b, Maypr City of San Bernardino / , 1990. Approved as to form and legal content: JAMES F. PENMAN, ~.n~y . By: / .~ DAB/ses/Pro-Area.res October 11, 1990 5 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1 ) )ss ) 2 STATE OF CALIFORNIA COUNTY OF SAN BERNARDINO CITY OF SAN BERNARDINO 3 I, , Clerk of the City of San Bernardino, California, DO HEREBY CERTIFY that the foregoing and 4 attached copy of the City of San Bernardino Resolution NO. is a full, true and correct copy of that now on file in this 5 office. 6 IN WITNESS WHEREOF, I have official seal of the City of , 1990. hereunto set my hand and affixed San Bernardino this day 7 the of 8 9 City Clerk of the City of San Bernardino DAB/ses/Pro-Area.res October 11, 1990 6 . . ~r;y ,I 1l\J SBEOOOOl/l72/es 10/10/90 830 RECORDING REQUESTED BY: Redevelopment Agency of the city of San Bernardino AND WHEN RECORDED MAIL TO: Redevelopment Agency of the city of San Bernardino 300 North "D" Street San Bernardino, California 92418 (Space above for Recorder's use) . DISPOSITION AND DEVELOPMENT AGREEMENT THIS AGREEMENT is entered into by and between the REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO ("Agency"), and NEW FRONTIER COMMERCIAL PROPERTIES, INC. , a California corporation ("Developer"). The Agency and the Developer agree as follows: This Agreement is dated 9c:tc-l'4- J> 1990, for reference purposes only. ~ -~ y RECITALS Section 1. 01 Section 1.02 section 1. 03 section 1.04 section 1. 05 section 1.06 section 2.01 section 2.02 Section 2.03 Section 2.04 section 2.05 Section 2.06 section 2.07 section 2.08 section 2.09 section 2.10 Section 2.11 Section 2.12 Section 2.13 section 2.14 section 2.15 section 2.16 Section 2.17 Section 2.18 Section 2.19 Section 2.20 Section 2.21 Section 2.22 section 2.23 section 2.24 section 2.25 Section 2.26 I . TABLE OF CONTENTS ARTICLE I SUBJECT OF AGREEMENT Purpose of Agreement.......................... 4 The Redevelopment Plan........................ 4 The Project Area.............................. 5 The Property.................................. 5 Parties to the Agreement...................... 5 Prohibition Against Change in Ownership, Management and Control of the Developer...... 7 ARTICLE II DISPOSITION OF SITE/FINANCING OF PROJECT The proj ect. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Disposition of site........................... Conditions Precedent.......................... A'ilency UDA? Ass~stance........................ Flxtures Flnanclng............................ Agency contribution........................... Developer's Financing Obligation......... ..... Agency Loan................................... Agency participation.......................... Priority of Project Funding................... Supermarket Rental Guarantee.................. Additional Project Costs...................... Escrow. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . conveyance of Title and Delivery of Possession. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Form of Deed.................................. Condition of Title. ....... .................... Conditions for Close of Escrow................ Time and Place for Delivery of Documents to Escrow. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Recordation of the Grant Deed(s) and Other Documents......................... .... Title Insurance............................... Taxes and Assessments...................... '" Possession of the Property.................... Zoning of the Property....................... Condition of the Property..................... Preliminary Work by the Developer............. SUbmission of Evidence of Financing Commitments................... .... . . . . . . . .. . -i- Paqe 1 9 9 10 11 11 12 13 13 16 17 18 19 19 25 25 26 26 28 29 29 30 30 30 Jl Jl J3 \f~ section 3.01 section 3.02 section 3.03 section 3.04 section 3.05 Section 3.06 Section 3.07 section 3.08 section 3.09 section 3.10 section 4.01 Section 4.02 section 4.03 section 4.04 section 4.05 section 5.01 section 5.02 Section 5.03 section 5.04 section 5.05 Section 5.06 section 5.07 Section 6.01 Section 6.02 section 6.03 section 6.04 Section 6.05 section 6.06 Section 6.07 Section 6.08 Section 6.09 Section 6.10 Section 6.11 Section 6.12 , I . ARTICLE III DEVELOPMENT OF THE PROPERTY Development by Developer................. ..... 35 Responsibility of the Agency.................. 51 Taxes, Assessments, Encumbrances and Liens.... 51 Security of Agency Loan....................... 52 Prohibition Against Transfer.................. 53 Security Financing; Right of Holders.......... 54 Right of the Agency to Satisfy Other Liens on the Property After conveyance of Title... 58 Certificate of Completion..................... 59 Offset Statement.............................. 62 Third Party Beneficiaries..................... 63 ARTICLE IV USE OF THE PROPERTY Uses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64 Maintenance of the Property................... 64 Obligation to Refrain from Discrimination..... 65 Form of Nondiscrimination and Nonsegregation Clauses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65 Effect and Duration of Covenants.............. 67 ARTICLE V DEFAULTS, REMEDIES AND TERMINATION Default - General............................. 68 Legal Actions................................. 69 Rights and Remedies are Cumulative............ 70 Damages....................................... 70 Specific Performance.......................... 70 Remedies and Rights of Termination............ 71 Right to Reenter, Repossess, Terminate and Revest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73 ARTICLE VI GENERAL PROVISIONS Notices, Demands and Communications Between the Parties................................. Conflict of Interest.......... ................ Warranty Against Payment of Consideration for Agreement.... . . . . . . . . . . . . . . . . . . . . . . . . . . . Nonliability of Agency Officials and Employees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Enforced Delay; Extension of Time of Performance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inspection of Books and Records............... Approvals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Real Estate Commissions....................... Indemnification.............................. . Attorneys I Fees............................... Dispute Resolution............................ Incorporation of Attachments.................. -ii- 78 79 79 80 80 81 82 82 82 83 83 84 ~ section 7.01 I . ARTICLE VII ENTIRE AGREEMENT, WAIVERS AND AMENDMENT Entire Agreement.............................. 86 ARTICLE VIII TIME FOR ACCEPTANCE OF AGREEMENT BY AGENCY AND RECORDATION section 8.01 ATTACHMENTS Execution and Recordation..................... 87 -iii- 'Y~ I . 1 RECITALS 2 3 WHEREAS, the Agency is authorized and empowered by the 4 Community Redevelopment Law of the State of California, Chapter 1 of 5 Division 24 of California Health and Safety Code, to enter into 6 agreements for the acquisition, disposition and development of real 7 property and otherwise to assist in the redevelopment of real property 8 within a redevelopment project areas in conformity with a redevelopment 9 plan adopted for such areas; to acquire real and personal property in 10 redevelopment project areas; to receive reconsideration for the 11 provision by the Agency of redevelopment assistance; to make and 12 execute contracts and other instruments necessary or convenient to the 13 exercise of its powers; and to incur indebtedness to finance or 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 refinance redevelopment projects; and WHEREAS, the Agency has acquired certain real property as more fully described in section 1. 04 hereof (the "Property") located on the west side of the City of San Bernardino generally located at the intersection of Baseline and Medical Center Drive as more fully described hereinafter in order to cause its development as a commercial retail center; and WHEREAS, the Developer has previously executed a certain Exclusive Right to Negotiate Agreement dated as of January 22, 1990 (the "ERN") pertaining to the proposed acquisition and development of the Property by the Developer and in connection therewith has deposited with the Agency the sum of Fifty Thousand Dollars ($50,000) (the "ERN Deposit") as consideration for the ERN; and - 1 - ~~ , . 1 WHEREAS, the Developer intends to acquire the Property from 2 the Agency in order to cause the development of a commercial retail 3 center which is to include a supermarket as per the attached Lease as 4 hereinafter described (the "Supermarket"), a Drug Store (the "Drug 5 store"), a Community oriented Police Center (the "COP") and certain 6 restaurant uses as well as other commercial and office uses; and 7 8 WHEREAS, the Agency desires and intends to dispose of the 9 Property as hereinafter described to the Developer in order to cause 10 its development and, in connection therewith the Developer has caused 11 the execution of a lease with The Boys Market, Inc. dated september 4, 12 1990 (the "Lease") a copy of which is attached hereto as Attachment "1" 13 and incorporated herein by this reference, which provides for the 14 development of a Supermarket in the commercial retail center; and 15 16 WHEREAS I the Agency has acquired certain additional land 17 comprised of an approximately five (5) acre parcel immediately adjacent 18 to the easterly boundary of the Property (the "Phase II Parcel") 19 located on Baseline Street which the Agency seeks to have developed in 20 accordance with its redevelopment objectives; and 21 22 23 24 25 26 27 28 WHEREAS, the Developer and the Agency have agreed to enter into an option (the "Option") pertaining to the purchase of the Phase II Parcel for the purposes of facilitating its development in accordance with the redevelopment objectives of the Agency which Option shall be reflected in a separate Option agreement to be executed by the parties hereto; and - 2 - ~J , . 1 WHEREAS, the parties hereto have previously negotiated the 2 following parameters with respect to the option which are to be 3 included as part of the option agreement unless otherwise changed or 4 modified by mutual agreement of both parties. 5 6 (1) That the Option price for the Phase II Parcel shall be 7 the price paid by the Agency upon the Agency's 8 acquisition of the Phase II Parcel; 9 (2) The Option shall remain in effect for four (4) years 10 from the date of issuance of a certificate of Completion 11 pursuant to section 3.08 hereof for the Project as 12 hereinafter defined; 13 (3) The use of the Phase II Parcel shall be in accordance 14 with the city of San Bernardino zoning requirements; 15 (4) The Agency is not obligated to provide any financial or 16 other assistance with respect to the Phase II Parcel. 17 (5) The option agreement shall be mutually acceptable in 18 form and substance to both parties in their sole 19 discretion. 20 (6) The Agency shall present an initial draft of the Option 21 agreement within forty-five (45) days of the execution 22 of this Agreement and both parties will use their best 23 efforts to execute said Option agreement within ninety 24 (90) days of the date of execution of this Agreement. - 3 - y , . 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ARTICLE I SUBJECT OF AGREEMENT section 1.01. Purposes of Aqreement. The purpose of this Agreement is to effectuate the Redevelopment Plan, as amended, for the Northwest Redevelopment proj ect Area (the "Redevelopment Plan") by providing for the acquisition and the redevelopment by the Developer of certain property (the "property") within the area subject to the Redevelopment Plan (the "project Area"), the Property being described in Attachment 2 attached hereto and incorporated herein by reference. The acquisition and the redevelopment of the Property by the Developer pursuant to this Agreement, and the fulfillment generally of the Agreement, are in the vital and best interests of the city of San Bernardino (the "city"), the Redevelopment Agency of the city of San Bernardino (the "Agency"), and the health, safety, morals, and welfare of the city's residents, and are in accord with the public purposes and provisions of applicable federal, state and local laws and requirements. section 1.02. The Redevelopment Plan. The Redevelopment Plan was approved and adopted by the Mayor and Common Council of the city of San Bernardino by Ordinance No. MC-189, dated July 6, 1982. This Agreement shall be subject to the provisions of the Redevelopment Plan, which is incorporated herein by this reference and made a part hereof as though fully set forth herein. The Agency represents and warrants that the uses and improvements to be constructed on the Property, in accordance with the Scope of Development set forth in Attachment 3 and the site Plan attached hereto as Attachment - 4 - '("l.y~ , . 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 comply with the terms and provisions of the Redevelopment Plan. The Agency further represents and warrants that all of the provisions of this Agreement are in full compliance with the Redevelopment Plan. section 1.03. The proi ect Area. The Proj ect Area is located entirely within the city, and the exact boundaries of the Project Area are specifically described in the Redevelopment Plan and are incorporated herein by reference and made a part hereof. section 1.04. The Propertv. The Property is composed of that certain real property generally located at the intersection of Baseline and Medical Center Drive comprised of approximately 440,000 square feet as legally described in Attachment 2a and shown on the map in Attachment 2b. section 1.05. Parties to the Aqreement. (a) The Agency is a public body, corporate and politic, exercising governmental functions and powers, and organized and existing under Chapter 2 of the community Redevelopment Law of the state of California, Health and Safety Code Section 33000, et seq. The principal office of the Agency is located at 300 North "D" Street, San Bernardino, California 92418. As used in this Agreement, the term "Agency" shall be deemed to include the Agency and any assignee and/or successor to the Agency or to its rights, powers and responsibilities under this Agreement. (b) The Developer is New Frontier commercial Properties, Inc., a Califo,"ia cocpocation. :h: ~cinciP" office of the oevelopeyl<. , . 1 for purposes of this Agreement is located at 701 South Parker Street, 2 suite 2000, Orange, California 9266B, and any and all notices, demands 3 or communications shall be sent to the Developer addressed to the 4 persons designated in Section 6.01 hereof. Prior to the Agency's 5 consideration of this Agreement, the Developer shall provide to the 6 Agency satisfactory evidence of the legal formation and existence of 7 the Developer and the good standing of the Developer with the State of 8 California (the "State") to transact business within the State, to hold 9 title to the Property and to undertake and complete the Project, as 10 hereinafter defined. 11 12 In connection with the development of the Property, it is 13 anticipated that the Developer will rely on the services of certain 14 entities who are affiliated or associated with the Developer. Such 15 entities include New Frontier Enterprises, Inc. ("N.F. Enterprises") 16 which shall be involved in the administration of the construction 17 phases of the development of the Property; New Frontier Property lB Management, Inc. ("N. F. Management") which shall be involved in the 19 marketing, brokerage, leasing and property management aspects of the 20 development of the Property; and John Pierce, individually ("John 21 Pierce") who shall oversee the overall management of the development of 22 the Property. 23 24 Developer agrees to cause to be provided to the Agency, prior 25 to the Agency's consideration of this Agreement, satisfactory evidence 26 of the legal formation and existence of N.F. Enterprises and 27 N.F. Management and the good standing of such entities with the State - 6 - y~ , . 1 2 3 4 5 6 7 8 9 10 II 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 to transact business within the state, and to participate in the development of the Property. section 1.06. Prohibition Aqainst Chanqe in Ownership. Manaqement and Control of the Developer. The qualifications and identities of the persons and entities comprising the Developer are of particular concern to the Agency. It is because of these qualifications and identities of the Developer that the Agency has entered into this Agreement with the Developer. No voluntary or involuntary successor in interest of the Developer or of its constituent members or shareholders shall acquire any rights or powers under this Agreement, except as expressly set forth herein. Except as otherwise provided in this section 1.06 or in Section 3.05 of this Agreement, neither the Developer nor its constituent members and shareholders shall assign, without the prior written approval of the Agency, all or any part of this Agreement prior to the issuance of a Certificate of Completion applicable to the Property. Notwithstanding any provision to the contrary herein, the Developer may, without the prior approval of the Agency, assign all or any part of this Agreement to a wholly owned subsidiary of the Developer or to any other entity in which the Developer or its wholly owned subsidiary has majority voting interest or management authority so as to permit the Developer to cause the performance of the obligations of the Developer under this Agreement provided, however, that any and all such assignees of the Developer expressly agree in writing to be bound by all of the terms and conditions required to be fulfilled and/or satisfied by Developer under this Agreement and - 7 - Ch",y , . I 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 the assignor retains full responsibility for the undertaking and completion of the Developer's obligations under this Agreement. The Developer shall promptly notify the Agency in writing of any and all changes whatsoever in the identity of the parties having voting and/or equity interests in the Developer, as well as any and all changes in the form or amount of voting and/or equity interest in the Developer by any such party, insofar as the Developer has been notified or may otherwise have knowledge of such information. Prior to issuance of a Certificate of Completion for the Property as hereinafter provided, this Agreement may be terminated by the Agency if there is any significant or material change, whether voluntary or involuntary, in membership, ownership, management or control of the Developer (other than such changes occasioned by the death or incapacity of any individual or as may otherwise be permitted under this Agreement without prior approval of the Agency) that has not been approved by the Agency at the time of such change: provided, however, that (a) the Agency shall first notify the Developer in writing of its intention to terminate this Agreement pursuant hereto, and (b) the Developer shall have twenty (20) calendar days following the date of receipt of such written notice to commence and thereafter diligently and continuously proceed with the cure of the default of the Developer hereunder, and (c) the Developer shall submit evidence of the satisfactory completion of such cure to the Agency within ninety (90) calendar days following the receipt of such written notice in a form and substance deemed satisfactory to the Agency, in its reasonable discretion or within such longer time as may be reasonable under the circumstances so long as Developer is diligently proceeding to cure the violation. - 8 - 1 , . 1 ARTICLE II 2 DISPOSITION OF SITE/FINANCING OF PROJECT J 4 section 2.01. The proi ect. The Agency deems it desirable to 5 assist the Developer in the acquisition, construction and installation 6 of an approximately Ninety-Five Thousand One Hundred Fifty (95,150) 7 square foot retail commercial shopping center (the "Project") on the 8 Property as more fully described in the Scope of Development 9 (Attachment "J") and the site Plan (Attachment "3a") in order to 10 facilitate the implementation of the Redevelopment Plan and to enhance 11 economic growth and development within the project area subject to the 12 Redevelopment Plan (the "Project Area") which Project Area currently lJ exhibits conditions of blight. 14 15 section 2.02. Disposition of site. In order to facilitate 16 the development of the Project, the Agency hereby agrees, subject to 17 the fulfillment of the conditions precedent as set forth in 18 section 2.03 hereof, to transfer title to the Property to the 19 Developer, and the Developer hereby agrees to acquire title to the 20 Property from the Agency by means of the escrow as hereinafter 21 described. The Agency's disposition of title to the Property to the 22 Developer pursuant to the escrow as hereinafter provided shall 23 constitute Agency assistance in the form of an Agency land write-down 24 which land write-down assistance is presently valued at One Million 25 Three Hundred Twenty-Five Thousand Dollars ($1,J25,000) (the "Agency 26 Land Write-Down"). 27 - 9 - y\ , . 1 section 2.0J. Conditions Precedent. Prior to any 2 disposition of title to the Property from the Agency to the Developer 3 and as a condition precedent thereto the following obligations shall 4 have been completed subject to the terms and conditions set forth in 5 section 2.17 hereof: 6 7 (i) the Agency shall have secured a fully executed Grant 8 Amendment Approval with respect to the use of those certain 9 UDAG Moneys as hereinafter defined; 10 11 (ii) the Agency shall have provided the Developer with 12 written evidence of the availability of funds for (a) the 13 Fixture Financing, (b) the UDAG Moneys, (c) the Agency 14 contribution and (d) the Agency Loan all as hereinafter 15 defined, for payment of the Agency's obligations under this 16 17 18 19 20 21 22 23 24 25 26 27 28 Agreement; (iii) the Developer shall have submitted to the Agency satisfactory evidence that the Developer Financing, as hereinafter defined, has been approved and secured and is available for payment of Developer's portion of the Project costs; (iv) the Developer shall have caused the completion of those certain development plans, construction drawings and related documents as described in section 3.01 (d) and shall have obtained all necessary building permits with respect to the Property; - 10 - "f~ , . 1 (v) the Developer shall have provided satisfactory evidence 2 to the Agency that the Project is seventy percent (70%) 3 preleased which evidence shall consist, at a minimum, of 4 signed leases from potential tenants; and 5 6 (vi) the Developer shall have provided the financial evidence 7 and documentation regarding construction leasing and Property 8 management as required by section 2.26 hereof. 9 10 Section 2.04. Aqencv UDAG Assistance. In order to further 11 assist in the development of the Project, the Agency agrees to 12 contribute certain moneys which the Agency has received and which 13 moneys represent the proceeds of a grant made by the city to the Agency 14 from funds available pursuant to the terms of that certain written 15 Urban Development Action Grant Agreement dated April 11, 1987 and 16 executed by the Secretary of Housing and Urban Development and the City 17 of San Bernardino, as made through an Urban Development Action Grant 18 Number B-87-AA-06-0620, (the "UDAG Moneys") in the amount of One 19 Million Eight Hundred Forty-Eight Thousand Dollars ($1,848,000) which 20 the Agency shall use to fund the costs of causing the construction of 21 certain improvements which comprise the Project and to fund certain 22 related expenses pursuant to the terms of this Agreement. 23 24 section 2.05. Fixtures Financinq. In addition to the 25 foregoing, the Agency agrees that it will cause to be financed the 26 acquisition of certain fixtures necessary for the development of the 27 Supermarket as more fully described in the Lease attached hereto as 28 Attachment No. 1 in order that it may participate in a portion of - 11 - the \\ ~\ 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 , . Excess Spendable Income, as hereinafter defined, from the completion and operation of the project and the Net Proceeds, as defined in section 2.09 hereof, of the sale or any refinancing of the Project as more fully described in section 2.09 hereof. Such financing of the fixtures (the "Fixtures Financing") shall be in an amount not to exceed Nine Hundred Thousand Dollars ($900,000). The parties hereto further agree that the provision of the Fixtures Financing shall not create any lien or encumbrance on the Property nor shall any lien or encumbrance be placed on the fixtures in connection with obtaining the Developer Financing, as hereinafter defined. Notwithstanding the foregoing, the Agency shall retain the ownership interest in the fixtures until such time as an amount equal to $5,573,000 representing Excess Spendable Income, as hereinafter defined, has been distributed to the Agency in accordance with section 2.09 hereof. The Agency agrees and warrants that the fixtures shall not be sUbject to any foreclosure, repossession or similar action during the term that the Agency retains an ownership interest in such fixtures. section 2.06. Aqency contribution. The Agency further agrees to contribute an amount equal to One Million Five Hundred Thousand Dollars ($1,500,000) (the "Agency Contribution") in order that it may participate in a portion of the Excess Spendable Income from the completion and operation of the Project and the Net Proceeds of the sale or refinancing of the Project as more fully described in Section 2.09 hereof. Amounts representing the Agency contribution shall be used by the Developer for the purposes of causing the acquisition, construction and installation of certain improvements comprising the proj ect and paying related costs. Pursuant to the terms of - 12 - thi~ ~ , . 1 Agreement funds representing the proceeds of the Agency contribution 2 may also be used to fund the costs of obtaining any necessary permits 3 or applications and paying any fees or assessments which may be 4 required to be paid in connection with the disposition and development 5 of the Project including but not limited to the costs associated with 6 the close of escrow as hereinafter provided. 7 8 section 2.07. Developer's Financinq Obliqations. The 9 Developer shall secure its own conventional financing (the "Developer 10 Financing") to pay a portion of the costs of the Project which 11 Developer Financing shall consist of a loan in the principal amount of 12 Five Million Seven Hundred Thousand Dollars ($5,700,000) (the 13 "Conventional Loan") which Conventional Loan is to be provided by 14 National Bank of Long Beach or some other similar financial institution 15 which is agreed to by the parties hereto. The proceeds of the 16 Conventional Loan shall, at the direction of the Developer, be applied 17 to the costs of constructing the project in the manner as provided in 1B this Agreement. The Developer solely on its own accord and at its own 19 expense will arrange the terms of such financing and execute all 20 necessary documents therefor. 21 22 Section 2.08. Aqency Loan. In addition to the Agency Land 23 write-Down, the Agency contribution, the Fixture Financing and the 24 provision of the UDAG Moneys the Agency shall loan to the Developer an 25 amount equal to Eight Hundred Thousand Dollars ($800,000) (the "Agency 26 Loan") upon transfer of the title to the Property and the execution by 27 the Developer of a Promissory Note, substantially in the form attached 28 hereto as Attachment 4 and incorporated herein by this - 13 - , . I 2 3 4 5 6 7 8 9 10 II 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 guaranteed by N.F. Enterprises, N.F. Management and John pierce which guarantees shall be effective for the period commencing on the date on which proceeds from the Agency Loan are first disbursed to Developer through and including the date upon which the Agency Loan and any accrued interest have been repaid in full. The Agency Loan shall be secured by a lien against the Property all as more fully provided in section 3.04 of this Agreement. The unpaid principal balance of the Agency Loan shall accrue simple interest from the date of funding of the Agency Loan until repayment in full at the rate of twelve percent (12%) per annum. The Developer shall pay a Preference Return as hereinafter defined, to the Agency in lieu of interest payments on the Agency Note. The unpaid principal amount of the Agency Loan and any accrued and unpaid Preference Return amounts, as hereinafter defined, shall be immediately payable, in whole or in part, upon any sale of the Project or Property or upon any refinancing of the Project to the extent Net Proceeds as defined in section 2.09 herein are available from such sale or refinancing after the Developer has satisfied all of its debt service obligations with respect to the Developer Financing. As consideration for the provision of the Agency Loan, the Agency Land Write-Down, the Agency contribution and the Fixture Financing, the Developer shall pay to the Agency annually a preference return (the "Preference Return") which Preference Return shall be paid from moneys remaining after the Developer has made payments of (i) any debt "e~i,e on tho ",voloper ~i::n:ing, Iii) norm.l ond cu"tom.~ , . 1 operating and business expenses incurred by the Developer in operating 2 the project such as taxes, insurance and administrative and legal 3 costs, (iii) all other normal recurring shopping center management, 4 operation and development costs including costs for leasing, management 5 of project, merchant's association costs, if any, accounting and 6 customary costs attributable to a real estate venture and (iv) certain 7 reasonable reserves for repairs, replacement and maintenance in 8 accordance with generally accepted accounting principals; but before 9 any Net Profit distribution to the Developer as a result of the sale or 10 refinancing of the Project, or any distribution of Excess Spendable 11 Income from the lease or operation of all or a portion of the Project. 12 Any annual amounts received by the Developer after the payment of items 13 (i), (ii), (iii) and (iv) hereinabove shall be referred to as "Net 14 Spendable Income". "Net spendable Income" shall be certified by 15 Developer and verified by an annual certificate prepared by an 16 independent public accountant to be selected from time to time by 17 Developer and approved by the Agency, the consent of which shall not be 18 unreasonably withheld or delayed. The calculation of Net Spendable 19 Income shall be performed in accordance with generally accepted 20 accounting principles. The Agency shall, upon reasonable notice, have 21 the right to audit the certification of Net Spendable Income. 22 23 The annual Preference Return shall equal twelve percent (12%) 24 of the total unpaid principal amount of the Agency Loan and shall be 25 paid to the Agency quarterly from available Net Spendable Income, if 26 any. In the event the project does not generate Net Spendable Income 27 in an amount sufficient to make any portion of or all of the payment of - 15 - shall have ~ ~ 28 the Preference Return in any given year(s), then Developer , . 1 the obligation to make the payment of any shortfall amount of the then 2 applicable Preference Return in the subsequent year or in such year as 3 Net Spendable Income is available along with such subsequent year(s) 4 Preference Return payment. Any amounts remaining in any given year 5 after the Developer has made all currently outstanding Preference 6 Return payments shall be designated as "Excess Spendable Income". 7 Moneys representing Excess Spendable Income in any given year shall be 8 subj ect to distribution in the manner as set forth in section 2.09 9 hereof. 10 11 section 2.09. Aqencv Participation. As consideration for 12 the total amount of the Agency Contribution, the Agency Land 13 Write-Down, the Fixtures Financing and the use of the UDAG Moneys 14 actually disbursed to the Developer, the Developer agrees that the 15 Agency shall share in forty percent (40%) of the available annual 16 Excess Spendable Income which shall be paid by Developer to the Agency 17 within sixty (60) days after the end of each calendar year and any 18 profits attributable to the sale or refinancing of the Project by 19 receiving an amount equal to forty percent (40%) of the Net Proceeds of 20 any such sale or refinancing, as hereinafter defined. Such Net 21 Proceeds are defined as the gross proceeds of any refinancing or sale 22 of the Property or Project less the amount of such proceeds required to 23 be applied to repay the outstanding debt amounts of any existing loan 24 encumbering title to the Property including closing costs and fees 25 associated with such sale or refinancing. The Developer's annual 26 obligation to contribute to the Agency forty percent (40%) of the 27 available Excess Spendable Income and the Net Proceeds of any sale or 28 refinancing of the project shall remain in effect until the earlier of - 16 - , . 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 (i) the effective date of the recordation of the grant deed to the Property in connection with any sale of the Project to a bona fide third party purchaser unrelated, financially or otherwise, to the Developer or (ii) such time as the Agency has received a total amount representing Excess Spendable Income attributable to the Project equal to Five Million Five Hundred Seventy Three Thousand Dollars ($5,573,000) . section 2.10. prioritv of proiect Fundinq. The parties hereby agree that certain funds must be expended prior to the transfer of title to the Property to the Developer in accordance with the provisions of the escrow as hereinafter provided. Developer agrees to contribute the ERN Deposit along with an additional Fifty Thousand Dollars ($50,000) upon execution of this Agreement which moneys in a total amount of One Hundred Thousand Dollars ($100,000) (the "Developer Advance") shall be used to fund a portion of the predevelopment costs (the "Predevelopment Costs") as more fully described on Attachment No. 5 attached hereto and incorporated herein by this reference. As an alternative to the contribution of the second Fifty Thousand Dollars ($50,000) representing a portion of the Developer Advance, the Developer may provide the Agency with documentation evidencing the expenditure of Fifty Thousand Dollars ($50,000) in Project costs. Upon the expenditure of the Developer Advance amounts the Agency shall advance additional moneys necessary to fund the balance of the Predevelopment Costs. Moneys representing the Developer Advance shall be reimbursed to the Developer at such time as the Conventional Loan has been recorded to fund a portion of the costs of the Project. - 17 - ~~ , . 1 Subsequent to the payment of the Predevelopment Costs and 2 subject to the conditions as further provided in this paragraph, the 3 parties hereto agree that the first moneys to be expended for the 4 construction of the project, with the exception of the Fixture 5 Financing funds which will be made available as requested by the 6 Developer per the terms of the Lease, shall be moneys representing all 7 or a portion of the proceeds of the Agency contribution. The next 8 funds to be applied to the costs of the project shall be funds 9 representing the Agency Loan and thereafter the Developer shall expend 10 funds representing the proceeds of the Developer Financing and the 11 Agency shall contribute funds representing the available UDAG Moneys in 12 a ratio of $3 of Developer Financing funds to every $1 of UDAG Moneys. 13 At the time of transfer of title to the Property the foregoing priority 14 of expenditures shall be altered to the extent that any expended 15 portion of the Agency contribution up to a maximum of $800,000 shall be 16 deemed to be a funding of the Agency Loan. If the funding of the 17 Agency contribution at the time of transfer of title is less than 18 $800,000, then at such time the Agency will fund the balance of the 19 Agency Loan. Once the Agency Loan proceeds are expended, then any 20 additional amounts representing ttle balance of the Agency contribution 21 shall be disbursed to the Developer. 22 23 section 2.11. Supermarket Rental Guarantee. In order to 24 assist in the successful operation of the Project the Agency agrees to 25 supplement the Base Rental payments (as defined in the Lease) to be 26 made by the Supermarket pursuant to the Lease by an annual amount of 27 Forty Four Thousand Dollars ($44,000) (the "Base Rental supplement"). - 18 - are to be made monthly ~ ~ 28 Payments representing the Base Rental Supplement , . 1 in an amount equal to one twelfth (1/12) of the annual Base Rental 2 Supplement provided, however, that the total amount of such Base Rental 3 Supplement payments made by the Agency in any given calendar year shall 4 be reimbursed to the Agency from revenues representing all or a portion 5 of the Percentage Rentals, as defined in the Lease. To the extent 6 revenues are not available from the Percentage Rentals as defined in 7 the Lease, then the Agency shall be reimbursed for money expended as B part of the Base Rental Supplement from any Excess Spendable Income 9 prior to the distribution of such Excess Spendable Income as provided 10 in section 2.09 hereof. 11 12 Section 2.12. Additional proiect Costs. To the extent the 13 Developer's costs of undertaking the construction and completion of the 14 Project exceed the costs contemplated in this Agreement, the Agency 15 agrees that it shall consider Developer's request for an increase in 16 the Agency contribution. If determined necessary by the Agency, in its 17 sole discretion, the Agency will seek to increase the Agency 1B Contribution or will assist the Developer in obtaining Developer's own 19 financial assistance. 20 21 Section 2.13. Escrow. The Agency and the Developer agree to 22 establish an escrow for the transfer of title to the Property pursuant 23 to the terms of this Agreement, which escrow shall be opened with 24 Guarantee Escrow, Tustin, California, or such other escrow agent as 25 mutually agreed upon in writing by the parties hereto (the "Escrow 26 Agent"), within the times set forth in the Schedule of Performance 27 (Attachment 6) attached hereto and incorporated herein by this - 19 - Agent sets forth requirements ~ ~ 28 reference. In the event that the Escrow . . 1 for the issuance of a title insurance policy applicable to the Property 2 other than those requirements specifically set forth in this Agreement, 3 and such requirements are unacceptable to the Agency, solely in its 4 discretion, then the parties may select another Escrow Agent by mutual 5 agreement and all times for performance of actions thereafter, as set 6 forth in the Schedule of Performance, shall automatically be extended, 7 within reason, on a day to day basis by the number of days representing 8 the period commencing on the date on which the Escrow Agent notifies 9 the parties hereto of the unavailability of such title insurance policy 10 required to be issued pursuant to the terms of this Agreement through 11 and including the date on which another escrow is opened with another 12 Escrow Agent. sections 2.13 through 2.19 of this Agreement constitute 13 the joint escrow instructions of the Agency and the Developer, and a 14 duplicate original of this Agreement shall be delivered to the Escrow 15 Agent upon the opening of the escrow. 16 17 The Agency and the Developer shall provide and execute such 18 additional escrow instructions consistent with this Agreement as shall 19 be necessary and which are reasonably approved by the parties hereto. 20 The Escrow Agent hereby is empowered to act under this Agreement, and 21 upon indicating its acceptance of this section 2.13 in writing, 22 delivered to the Agency and the Developer within five (5) calendar days 23 after the establishment of the escrow, shall carry out its duties as 24 Escrow Agent hereunder. 25 26 Upon delivery by the Agency to the Escrow Agent of the grant 27 deed for the Property pursuant to Section 2.15 of this Agreement, - 20 - the Escrow ~ ~ 28 substantially in the form attached hereto as Attachment 7, . . 1 Agent shall record such grant deed(s) in accordance with these escrow 2 instructions provided that fee simple title to the property can be 3 vested in the Developer, in accordance with the terms and provisions of 4 this Agreement. The Escrow Agent shall buy, affix and cancel any 5 transfer stamps required by law. Any insurance policies governing the 6 Property shall not be transferred to another party. 7 8 The Agency and the Developer shall deliver to the Escrow 9 Agent all documents necessary for the conveyance of title to the 10 Property in conformity with, within the times, and in the manner 11 provided in this Agreement. 12 13 The Developer shall pay all fees which are to be paid by 14 Developer pursuant to the terms of this Agreement and any supplemental 15 escrow instructions executed by Developer and the Agency, and are 16 related to the transfer of title to the Property from the Agency to the 17 Developer which payment shall be made promptly after the Escrow Agent 1B has notified the Developer in writing of the amount of such fees, 19 charges and costs as set forth in Escrow Agent's closing statement, but 20 not earlier than the date for the conveyance of title to the Property. 21 Such fees shall be deemed as part of the costs of undertaking and 22 developing the Project and may be funded accordingly with funds 23 disbursed by the Agency pursuant to the terms of this Agreement. 24 25 The Agency shall timely and properly prepare, execute, 26 acknowledge and deposit into escrow a grant deed in recordable form 27 conveying to the Developer title to the property in accordance with the - 21 - ~ . . 1 requirements of this Section 2.13 and in the form required by 2 Section 2.15 of this Agreement. J 4 5 6 7 8 9 10 11 12 13 14 15 16 17 1B 19 20 21 22 23 24 25 26 27 28 The Escrow Agent is authorized to: 1. Pay and charge the Developer for any fees, charges and costs payable under this section 2.13. Before the close of escrow, the Escrow Agent shall notify the Developer and the Agency of the estimated cost of any and all the fees, charges and costs required to be paid by Developer in connection with the close of escrow; 2. Deliver the grant deed and other documents to the parties entitled thereto when the conditions of this escrow have been fulfilled by the Agency and the Developer; 3. Record any instruments reasonably required for the issuance of the title insurance policy described in section 2.20 hereof and any instruments delivered through the escrow if necessary or proper pursuant to the terms of this Agreement and otherwise to vest title to the Property in the Developer in accordance with the terms and provisions of these escrow instructions; and 4. Record a declaration of covenants, conditions and restrictions applicable to the Property as described in Section 3.01 (m) of this Agreement. - 22 - . . 1 Any and all funds received in this escrow shall be deposited 2 by the Escrow Agent in an insured interest bearing account with any 3 state or national bank doing business in the state of California, and 4 such funds may be combined with other escrow funds of the Escrow Agent. 5 Such funds may be transferred to any other such general escrow account 6 or accounts. Such funds shall draw the highest reasonable rate of 7 interest and such interest shall accrue to the party to this Agreement 8 who shall have made the deposit thereof with the Escrow Agent. 9 10 If this escrow is not in condition to close at the time for 11 conveyance of title to the Property established in the Schedule of 12 Performance (Attachment 6), subject to any and all extensions lJ authorized by this Agreement, either party who then shall have fully 14 performed the acts to be performed before the conveyance may, in 15 writing, demand the termination of the escrow and the return of its 16 money, papers or documents from the Escrow Agent and/or the termination 17 of this Agreement under section 5.06(a) or (b), as applicable. No 18 demand for the termination of escrow or the return of such money, 19 papers or documents shall be recognized until ten (10) calendar days 20 after the Escrow Agent shall have mailed copies of such demand to the 21 other party or parties by certified mail at the address of its 22 principal place of business as set forth in section 1.05 hereof. 23 Objections, if any, shall be raised by written notice submitted to the 24 Escrow Agent and to the other party within said ten (10) calendar day 25 period, in which event the Escrow Agent is authorized to hold all 26 money, papers and documents with respect to the Property or this escrow 27 until further instructed by a mutual written agreement of the parties 28 or, upon failure of the parties to agree, then by means of dispute ~ ~ - 2J - . . 1 resolution set forth in Section 7.12 hereof or by order or decree of a 2 court of competent jurisdiction. If no demands are made, the escrow 3 shall be closed as soon as possible. 4 5 The Escrow Agent shall not be obligated to return any such 6 money, papers or documents except upon the written instructions of both 7 the Agency and the Developer, or until the party entitled thereto has B been determined by a final decision resulting from the dispute 9 resolution procedures set forth in section 7.12 hereof or by a court of 10 competent jurisdiction, except that such documents, money and papers 11 shall be returned pursuant to Sections 5.06(a) and 5.06(b) without the 12 requirement of the foregoing procedures. 13 14 Any amendment to these escrow instructions shall be in 15 writing mutually approved and signed by both the Agency and the 16 Developer. At the time of the execution of any amendment to these 17 escrow instructions the Escrow Agent shall agree to carry out its 1B duties as Escrow Agent under such amendment. 19 20 All communications from the Escrow Agent to the Agency or the 21 Developer shall be in writing and directed to the respective parties at 22 the addresses set forth in section 6.01 of this Agreement for notices, 23 demands and communications between the Agency and the Developer. 24 25 The liability of the Escrow Agent under this Agreement is 26 limited to performance of the obligations imposed upon it under 27 sections 2.lJ to 2.19, inclusive, of this Agreement. The Escrow Agent - 24 - . . 1 shall have no liability or responsibility for determining whether a 2 party to this Agreement is in default hereunder. J 4 section 2.14. Convevance of Title and Deliverv of 5 Possession. subject to the conditions set forth in section 2.16 and 6 section 2.17 hereof and any mutually agreed upon written extension of 7 time or extensions otherwise authorized by this Agreement, conveyance B to the Developer of title to the Property in accordance with the 9 provisions of this Article II of this Agreement shall be completed on 10 or prior to the date specified for the close of escrow in the Schedule 11 of Performance (Attachment 6). 12 13 The Agency and the Developer agree to perform all acts 14 necessary for conveyance of title to the Property in sufficient time 15 for title to be conveyed in accordance with the foregoing provisions. 16 Possession of the Property shall be delivered to the Developer 17 concurrently with the conveyance of title at the close of escrow. 1B 19 Escrow shall be deemed to be in a condition to close at such 20 time as the Agency can deliver and convey to the Developer title and 21 possession to the Property, subj ect to the foregoing condition and 22 satisfaction or waiver of the conditions set forth in sections 2.16 and 23 2.17, and otherwise in accordance with the provisions hereof. 24 25 Section 2.15. Form of Deed. Subject to the terms of this 26 Agreement, the Agency shall convey to the Developer title to the 27 Property, in the condition provided in Article II of this Agreement, by 28 recordation of a grant deed in the office of the San Bernardino - 25 - County ~'Z . . 1 Recorder, which grant deed shall be sUbstantially in the form attached 2 hereto as Attachment 7. 3 4 section 2.16. Condition of Title. Subject to the terms of 5 section 2.17, the Agency shall convey to the Developer fee simple 6 merchantable and insurable title to the property free and clear of all 7 recorded liens, encumbrances, easements, public rights-of-way, 8 assessments, leases, taxes, conditions, restrictions and other defects, 9 of which the Agency has knowledge, except for (1) the agreements, 10 covenants and conditions of this Agreement and the Grant Deed, (2) such 11 preexisting easements or rights-of-way as may be disclosed in the 12 Preliminary Title Report and approved by the Agency and the Developer, 13 and (J) real property taxes for the fiscal year in which escrow closes, 14 which constitute a lien not yet payable. Title to the Property shall 15 be subject to the exclusion therefrom (to the extent now or hereafter 16 validly excepted and reserved by the parties named in existing deeds, 17 leases and other documents of record) of all oil, gas, hydrocarbon 18 substances and minerals of every kind and character lying more than 19 five hundred (500) feet below the surface thereof for any and all 20 purposes incidental to the exploration for and production of oil, gas, 21 hydrocarbon substances or minerals from the Property but without, 22 however, any right to use either the surface of the Property or any 23 portion thereof within five hundred (500) feet of the surface for any 24 purpose or purposes therefor whatsoever. 25 26 section 2.17 . Conditions for Close of Escrow. Agency I s 27 obligation to convey the Property to Developer and the close of escrow - 26 - ~ 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 . . shall be expressly conditioned upon satisfaction or the written waiver by both parties, of each of the following: a. The obtaining of an executed Grant Amendment Approval with respect to the use of the UDAG Moneys; b. The submission by the Developer and the written approval by the Agency and the city of San Bernardino of those certain development plans, construction drawings and related documents as described in Section 3.01(d) and the issuance of all building permits required for the construction of the improvements to be constructed by the Developer pursuant to the terms of this Agreement and set forth in the plans and specifications more particularly described in section 3.0l(d), which are approved by the Agency and the city of San Bernardino with respect to the project; c. The submission of satisfactory evidence from the Developer that the Project is seventy percent (70%) preleased; d. Developer shall have provided to Agency satisfactory evidence of the legal formation and continued existence of Developer and the good standing of Developer, N.F. Enterprises and N.F. Management with the State to transact business within the state, to hold title to the Property and to develop the Project, as provided in section 2.01 hereof and shall have made available to the Agency for inspection and approval, certain agreements pertaining to the construction, leasing and management of the Property which agreements shall consist of a construction management agreement, a leasing agreement and a Property management agreement by and among the Developer and its associated entities listed in section 1.O~ hereof; and ~ - 27 - . . 1 e. Developer shall have submitted into escrow evidence that 2 it has obtained the Developer Financing as described in section 2.07 3 which is available to fund Developer I s portion of the costs of the 4 Project. 5 f. Agency at its sole cost and expense shall have prepared 6 the Property in the manner as required for the transfer of title, all 7 as more fully described in the scope of Development (Attachment 3). 8 9 g. The issuance of any and all notices, statements and/or 10 certificates by the governmental authorities responsible therefor II indicating that the hazardous materials removal, treatment and/or 12 remediation which may be required pursuant to section 2.17(f) hereof 13 has been completed by the Agency at its expense in accordance with the 14 requirements of all such governmental authorities, and the delivery of 15 true copies of such notices, statements and/or certificates to 16 Developer if required. 17 18 h. The submission of written evidence by the Agency to the 19 Developer that necessary funds are available for the Fixture Financing, 20 the Agency Contribution, the Agency Loan and the UDAG Moneys, and such 21 funds are available for expenditure as set forth in this Agreement. 22 section 2.18. Time and Place for Deliverv of Documents to 23 Escrow. Subject to any mutually agreed upon written extensions of time 24 or any extensions otherwise authorized by this Agreement, the parties 25 shall deposit with the Escrow Agent promptly at such time as such 26 documents have been fully prepared and executed, but in no event later 27 than ten (10) calendar days before the date established for the 28 conveyance of the Property in the Schedule of Performance ~ i - 28 - . . 1 (Attachment 6) any and all documents which are required in order for 2 escrow to close in accordance with section 2.17 hereof. The grant deed 3 conveying title to the Property from the Agency to the Developer 4 hereunder shall be prepared by the Agency in recordable form for 5 approval and execution by the Agency. All other documents required to 6 be recorded in order to permit the close of escrow shall be prepared by 7 the Developer at its cost and expense which cost and expense shall be 8 deemed costs of the Project and which may be funded accordingly. 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Section 2.19. Recordation of the Grant Deed (s) and other Documents. When the parties have deposited into escrow all documents as required by this Agreement and all conditions for the close of escrow set forth in section 2.17 hereof have been satisfied, the Escrow Agent shall promptly file for recordation among the land records in the Office of the County Recorder for San Bernardino County (i) the grant deed to the Property, and (ii) a declaration of covenants, conditions and restrictions applicable to the Property, as described in Section 3.01(1) hereof. The Escrow Agent shall thereafter promptly provide a copy of said recorded documents to both parties and shall promptly deliver to the Developer, as appropriate, a title insurance policy insuring title in conformity with section 2.20 of this Agreement. Section 2.20. Title Insurance. Concurrently with the recordation of the grant deed to the Property, the Escrow Agent shall cause the issuance and delivery to the Developer of a policy of ALTA title insurance insuring that the title to the Property is vested in the Developer in the condition required by Article II of thi~ - 29 - . . 1 Agreement. The title insurance policy shall be in the amount of Five 2 Million Seven Hundred Thousand Dollars ($5,700,000). J 4 section 2.21. Taxes and Assessments. Ad valorem taxes and 5 assessments, if any, on the Property and taxes upon this Agreement or 6 any rights hereunder levied, assessed or imposed as to any period prior 7 to conveyance of title through the escrow hereunder, shall be borne by 8 the Agency and paid in full prior to the close of escrow. All 9 ad valorem taxes and assessments levied or imposed on the Property as 10 to any period after the close of escrow for conveyance of the Property 11 shall be paid by the Developer. 12 13 section 2.22. Possession of the Propertv. The Agency 14 warrants and agrees that title to the Property shall be conveyed free 15 and clear of any possession and/or any right of possession except that 16 of the Developer, unless specifically waived by the Developer in 17 writing. Prior to the close of Escrow, the Agency may transfer partial 18 possession of the Property to the Developer to the extent it deems such 19 transfer necessary in order to facilitate the timely preparation of the 20 Property for the development of the Project. 21 22 section 2.23. Zoninq of the Property. The Agency represents 23 and warrants that the City'S General Plan and Zoning Ordinance permit 24 the contemplated development, construction and operation of the 25 Property in accordance with this Agreement, subject to the Developer 26 obtaining any and all necessary conditional use permits required 27 pursuant to the Zoning Ordinance, and further subject to the Developer 28 obtaining any and all modifications or variances including, but not - JO - . . 1 limited to, those modifications or variances necessary for height, 2 parking, signs and any and all other matters. The Developer shall 3 apply for all necessary permits applicable to the Project as provided 4 in section 3.01(1) herein. The Agency shall use its best efforts to 5 assist the Developer with respect to obtaining such permits and any 6 necessary approvals subject to and in accordance with the terms of this 7 Agreement. Notwithstanding any provision to the contrary herein, the B Project shall meet any and all parking and landscaping requirements set 9 forth in the City's Zoning Ordinance except insofar as the city, in its 10 discretion, may approve a modification or variance therefrom. 11 12 section 2.24. Condition of the Propertv. Except for work 13 required to be performed by the Agency pursuant to the Scope of 14 Development set forth in Attachment 3 or as otherwise set forth as a 15 condition to the close of escrow under section 2.17 hereof, the 16 Property shall be conveyed in an "as is" condition with no warranty or 17 liability, except as otherwise provided herein, express or implied on 1B the part of the Agency as to the condition of the soil, its geology or 19 the presence of known or unknown faults or defects. 20 section 2.25. (a) preliminarv Work bv the Developer. Prior 21 22 to the conveyance of title to the Property, representatives of the 23 Developer shall have the right of access from time to time to the 24 Property at all reasonable times for the purpose of obtaining data and 25 making surveys and tests necessary to implement this Agreement and in 26 order to advertise all or any portion of the Property for lease, 27 including the placement of signs, in conformance with any and all - 31 - Property ~ \ 28 requirements of the City therefor, in order to advertise the . . 1 for sale or lease or to advertise the intended development of the 2 Property. The Developer hereby agrees to indemnify and hold the Agency 3 and the City harmless from any and all injuries and/or damages arising 4 from any activity of the Developer, its agents, employees, consultants 5 and contractors, performed and conducted on the Property which may 6 arise as a result of Developer, its agents, employees, consultants or 7 contractors entry on to the Property pursuant to this section 2.25. 8 The Developer shall not be liable for any injuries or damages which 9 arise from any activities of the Agency, its agents, employees, 10 consultants and contractors performed in connection with the 11 preparation of the Property for the development of the Project. 12 13 (b) Developer Actinq on Aqencv's Behalf. The development 14 functions to be undertaken prior to the transfer of title to the 15 Property pertaining to grading and the development of the on-site and 16 off-site public improvements shall be managed by Developer in the 17 capacity of an agent for the Agency. The Agency hereby authorizes and 1B directs the Developer to act as said agent in the administration of the 19 development of such on-site and off-site public improvements. This 20 authority includes advertising, soliciting, and awarding contracts for 21 the anticipated improvements as well as reviewing and paying the 22 invoices on those contracts and other related costs as they occur. 23 Developer's actions in such capacity shall be in accordance with all 24 applicable laws, rules and policies that apply to the development of 25 the Project. The authority as granted herein shall be limited to the 26 undertaking of grading and the on-site and off-site public improvements 27 necessary to be completed prior to the transfer of title to the 28 Property and which would otherwise be undertaken by the Agency. - 32 - . . 1 section 2.26. Submission of Evidence of Financinq 2 Commitments. As a condition to the execution of this Agreement by the 3 Agency, the Developer shall submit to the Agency evidence reasonably 4 satisfactory to the Agency that the Developer either has obtained or 5 can obtain, as evidenced by a letter of intent or similar instrument, 6 the firm and binding commitment for the Developer Financing. In 7 addition thereto and also as a condition to the approval of this 8 Agreement by the Agency. the Developer, N.F. Enterprises, N.F. 9 Management and John pierce shall each submit evidence of their 10 financial standing which evidence, at a minimum, shall consist of one 11 (1) year's tax returns and financial statements for the year 12 immediately preceding the date of execution of this Agreement. lJ Developer further agrees to submit such financial evidence, and to 14 cause N.F. Enterprises, N.F. Management and John pierce to submit such 15 financial evidence to the Agency for each successive year from the date 16 of execution of this Agreement until repayment in full of the Agency 17 Loan. In addition thereto, Developer shall make available for 18 inspection all relevant documentation submitted by Developer to the 19 applicable bank in connection with obtaining the conventional Loan. 20 The evidence to be submitted hereunder shall be submitted directly to 21 Scott Rodde, the Agency's consultant with respect to the Project, or 22 such other consultant as the Agency may deem appropriate; provided, 23 however, that the Agency reserves the right to cause such evidence to 24 be submitted directly to the Agency and may inspect such documentation 25 at any time as it deems appropriate. 26 27 The Executive Director shall approve or disapprove in his or 28 her reasonable discretion such documents - 33 - . . 1 or sources within fifteen (15) calendar days of receipt by the Agency 2 of the documents and information required hereunder; provided, however, J that the failure of the Executive Director to disapprove any of the 4 foregoing matters in writing within said fifteen (15) calendar day 5 period shall be deemed to constitute approval thereof. Any disapproval 6 by the Executive Director or the Agency in writing of any of the 7 foregoing matters in this section 2.26 shall automatically extend the B dates for performance of actions set forth in the Schedule of 9 Performance for that certain reasonable period of time necessary for 10 the Developer to obtain the approval of the Executive Director or of 11 the Agency under this section 2.26, not to exceed one hundred 12 eighty (180) calendar days. 13 14 As a condition to the close of escrow as provided in 15 section 2.l7(d) hereof, the Developer agrees to make available to the 16 Executive Director of the Agency for his or her review and approval, 17 copies of the construction management agreement, the leasing agreement 1B and the Property management agreement pertaining to the development and 19 operation of the Project and the Property. 20 21 22 23 24 - 34 - ~ . . 1 ARTICLE III 2 DEVELOPMENT OF THE PROPERTY J 4 section J.Ol. Development bv Developer. 5 6 (a) Scope of Development. The property shall be developed 7 by the parties in substantial accordance with and substantially within 8 the limitations established in the Scope of Development. 9 10 The Developer shall provide to the Agency on a quarterly 11 basis, or more frequently as it deems appropriate, information 12 regarding each lease executed in connection with the Project which 13 information shall include the names of the lessees and other tenants in 14 the Project, the type of their proposed usage, the approximate number 15 of employees and the square footage of space to be occupied by each 16 such lessee and tenant. 17 18 The City's zoning Ordinance including, but not limited to, 19 parking and height requirements, and the City's building requirements 20 are applicable to the use and development of the Property pursuant to 21 this Agreement. The Developer acknowledges that any change in the 22 plans for development or the use of the Property as set forth in the 23 Scope of Development shall be subject to the city's zoning Ordinance 24 and building requirements. No action by the Agency or the city with 25 reference to this Agreement or related documents shall be deemed to 26 constitute a waiver of any city parking, landscaping, height or other 27 requirements which are applicable to the project or to the Developer, - 35 - the Developer or any tenant or ~ '{ 28 any successor in interest or tenant of . . 1 successor in interest pertaining to the Property, except by 2 modification or variance approved by the city consistent with this J Agreement. The Agency shall cooperate with and shall use good faith 4 and best efforts to assist the Developer in order to obtain 5 modifications or variances from City zoning regulations necessary to 6 develop the Project consistent with this Agreement and, in particular, 7 with the Scope of Development. S 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 (b) Scope of Development. The Scope of Development set forth in Attachment J is hereby approved by the Agency upon its execution of this Agreement. The Project shall be developed and completed in substantial conformance with the approved Scope of Development and any and all other plans, specifications and similar development documents required by this Agreement, except for such changes as may be mutually agreed upon in writing by and between the Developer and the Agency. The Agency agrees to approve preliminary and final construction plans and preliminary and final landscaping plans, if reasonably consistent with the approved Scope of Development as set forth in Attachment 3. The approval of the Scope of Development by the Agency hereunder shall not be binding upon the City Councilor the Planning commission of the City with respect to any approvals of the Project required by such other bodies. If any revisions of the Scope of Development as approved by the Agency shall be required by another government official, agency, department or bureau having jurisdiction over the development of the Property, the Developer and the Agency shall cooperate in efforts to obtain waivers of such revisions, or ~ - 36 - ~ . . 1 obtain approvals of any such revisions which have been made by the 2 Developer and have thereafter been approved by the Agency. The Agency J shall not unreasonably withhold or delay approval of such revisions. 4 5 Notwithstanding any provision to the contrary in this 6 Agreement, the Developer agrees to accept and comply fully with any and 7 all reasonable conditions of approval applicable to all permits and 8 other governmental actions affecting the project and consistent with 9 this Agreement. 10 11 The Developer shall have the right subject to Agency 12 approval, and subject to any and all approvals otherwise required by 13 the city, to make changes as provided in the Scope of Development in 14 building location and size of buildings, parking layout and traffic 15 flow on the Property; provided, however, that any and all such changes 16 are in accordance with the city's Zoning Ordinance or an approved 17 modification or variance therefrom, and that any and all such changes 1B are generally consistent with the Scope of Development (Attachment 3). 19 20 (c) Landscapinq Plans. The Developer shall cause all 21 necessary landscaping work to be completed as described in the Scope of 22 Development and upon transfer of title to the Property to the 23 Developer, the Developer shall assume the obligation to maintain such 24 landscaping. To the extent such landscaping is not maintained in a 25 manner consistent with City standards, then the Agency shall, at its 26 option, have the right to undertake the maintenance of such landscaping 27 and shall place alien on the property to secure funding for the - 37 - Any ~ ~ 28 reasonable and necessary costs of such landscape maintenance. . . 1 landscaping standards imposed by the city shall be consistent with, but 2 not in excess of, nor superior to (regarding timing, costs, lease J obligations) the landscaping provisions as contained in any lease 4 pertaining to the Property. Additionally, any rights exercised by the 5 Agency hereunder shall only be exercised after the Agency has given the 6 Developer at least sixty (60) days prior written notice of its intent 7 to exercise such rights and an opportunity to cure, correct, modify, 8 alter or change the conditions in a reasonably satisfactory manner. 9 10 (d) Submission of Development Plans, construction Drawinqs 11 and Related Documents. The Developer shall prepare and submit 12 development plans, construction drawings and related documents for the lJ development of the Project consistent with the Scope of Development 14 (Attachment 3) to the City and the Agency for review (including, but 15 not limited to, architectural review of the exterior of structures) and 16 written approval in accordance with the Schedule of Performance 17 (Attachment 6); provided, however, that the Agency shall not have the 18 right or responsibility to approve development plans, construction 19 drawings or related documents for purposes of the issuance of a 20 building permit or otherwise on behalf of the city, but shall only have 21 the right of review of such plans, drawings and documents for purposes 22 of (a) architecture and design of structures and the overall 23 development of the project, and (b) conformity of such plans, drawings 24 and documents with the terms and conditions of this Agreement. The 25 development plans, construction drawings and related documents shall be 26 submitted in two stages -- preliminary and final drawings (i.e., 27 working drawings), plans and specifications. Final drawings, plans and - 38 - contain "UffiCi.~ 28 specifications are hereby defined as those which . . 1 detail necessary to obtain a building permit from the city. Any such 2 items submitted to and approved in writing by the Agency shall not be 3 subject to subsequent disapproval by the Agency, and any such Agency 4 approval shall not be unreasonably withheld or delayed. 5 6 During the preparation of all drawings and plans for the 7 Project, the Agency Staff and the Developer shall hold regular progress 8 meetings to coordinate the preparation by the Developer, and the 9 submission to and review by the city and the Agency of construction 10 plans and related documents. The Agency Staff and the Developer shall II communicate and consult informally as frequently as is necessary to 12 ensure that any such plans and related documents submitted by the 13 Developer to the city and the Agency can receive prompt and speedy 14 consideration. 15 16 (e) Review bv Aqencv and citv of Plans. Drawinqs and Related 17 Documents. The Agency shall have the right of reasonable architectural 18 review and approval of building exteriors and design of the Project. 19 The Agency shall also have the right to review all plans, drawings and 20 related documents pertinent to the development of the Property in order 21 to ensure that they are consistent with this Agreement and with the 22 Scope of Development set forth in Attachment 3. 23 24 The Developer shall timely submit to the City for its review 25 and approval any and all plans, drawings and related documents 26 pertinent to the development of the Property, as required by the City. 27 The Agency shall cooperate in good faith with and shall use best - 39 - to obtain ~ i 28 efforts to assist the Developer in order for the Developer . . 1 the approval of any and all development plans, construction drawings 2 and related documents submitted by the Developer to the City consistent 3 with this Agreement within thirty (30) calendar days following the 4 city's receipt of said plans. In the event that the city disapproves 5 of any of such plans, the Developer shall within thirty (30) calendar 6 days after receipt of such disapproval revise and resubmit such plans 7 in accordance with the city 1 s requirements and in such form and 8 substance so as to reasonably address the City's reasons for 9 disapproval and to obtain the city's approval thereof. 10 11 The Agency shall in good faith use its best efforts to cause 12 the City to approve in a timely fashion any and all plans, drawings and 1J documents submitted by the Developer hereunder. 14 15 The Agency shall approve any modified or revised plans, 16 drawings and related documents to which reference is made in this 17 Agreement within the times established in the Schedule of Performance 18 (Attachment 6) as long as such plans, drawings and related documents 19 are generally consistent with the scope of Development (Attachment 3) 20 and any other plans which have been approved by the Agency. Upon any 21 disapproval of plans, drawings or related documents, the Agency shall 22 state in writing with specificity the reasons for such disapproval. 23 The Developer, upon receipt of notice of any disapproval, shall 24 promptly revise such disapproved portions of the plans, drawings or 25 related documents in a manner that addresses the reasons for 26 disapproval and reasonably meets the requirements of the Agency in 27 order to obtain the Agency's approval thereof. The Developer shall - 40 - the ~ ~ 28 resubmit such revised plans, drawings and related documents to . . 1 Agency as soon as possible after its receipt of the notice of 2 disapproval and, in any event, no later than thirty (30) calendar days J thereafter. The Agency shall approve or disapprove such revised plans, 4 drawings and related documents in the same manner and within the same 5 times as provided in this section 3.01 for approval or disapproval of 6 plans, drawings and related documents initially submitted to the 7 Agency. 8 9 (f) Chanqes in Final Construction Drawinqs, Plans and 10 Specifications. If the Developer desires to make any material change 11 in the final construction drawings, plans and specifications and 12 related documents after their approval by the Agency and/or the city, 13 the Developer shall submit the proposed change in writing to the Agency 14 and/or the City for approval. The Agency shall notify the Developer of 15 approval or disapproval thereof in writing within thirty (30) calendar 16 days after submission to the Agency. This thirty (30) calendar day 17 period may be extended by mutual consent of the Developer and the 18 Agency. Any such change shall, in any event, be deemed to be approved 19 by the Agency unless rejected, in whole or in part, by written notice 20 thereof submitted by the Agency to the Developer, setting forth in 21 detail the reasons therefor, and such rejection shall be made within 22 said thirty (30) calendar day period unless extended as permitted 23 herein. The Agency's approval shall not be unreasonable withheld or 24 delayed. 25 26 The Developer, upon receipt of a notice of disapproval by the 27 Agency and/or the City, may revise such portions of the proposed change 28 in construction drawings, plans and specifications and related - 41 - . . 1 documents as are reasonably rejected and shall thereafter resubmit such 2 revisions to the Agency and/or the city for approval which approval 3 shall not be unreasonably withheld or delayed. 4 5 The Developer shall have the right during the course of 6 construction to make changes in construction without seeking the 7 approval of the Agency; provided, however, that such changes do not 8 affect the type of use to be conducted within all or any portion of a 9 structure. Nothing contained in this section 3.01 shall be deemed to 10 constitute a waiver of or change in the City's Building Code or 11 development approval requirements. 12 13 (g) Costs of Construction and other Costs. The costs of 14 developing the Project and of constructing all improvements which are 15 the obligation of the Developer as described in the Scope of 16 Development (Attachment J) shall be borne by the Developer, except for 17 work expressly set forth in this Agreement to be performed or paid for 1B by the Agency or others. 19 20 Any reference to payment obligations of the Developer with 21 respect to causing the development of the Project hereunder shall be 22 deemed the cost of undertaking the Project and may be funded 23 accordingly. 24 25 The Developer shall, solely at its cost and expense, cause to 26 be prepared, and shall pay any and all fees pertaining to the review 27 and approval thereof by the City, all required construction, planning 28 and other documents reasonably required by governmental - 42 - . . 1 pertinent to the development of the improvements comprising the Project 2 which are the responsibility of the Developer hereunder as more fully J described in the Scope of Development including, but not limited to, 4 specifications, drawings, plans, maps, permit applications, land use 5 applications, subdivision documents, zoning applications and design 6 review documents. The Developer shall pay to the city only such 7 application, plan-checking, development and other fees established by 8 the city, appl icable to the improvements to be constructed by the 9 Developer, from time to time and which are applicable to all parties 10 who require such or similar review, permits and/or approvals from the 11 City, as applicable ("Customary Fees"); provided, however, that such 12 Customary Fees shall not have the effect of being applicable solely to 13 the Project. The Agency shall, at its own cost and expense, pay any 14 and all fees pertaining to the development of the improvements 15 comprising the Project which are the responsibility of the Agency as 16 described in the Scope of Development. 17 18 The Agency shall have the obligation and shall warrant that 19 the offsite water utilities, sewer utilities, storm drain systems, 20 street width and the traffic signal, as described in the Scope of 21 Development (Attachment 3) are sufficient to satisfy the requirements 22 of the contemplated development. The Developer shall not pay for nor 23 be required to pay for any such items as Project costs, including the 24 above mentioned items and other fees or costs to upgrade any offsite 25 utilities. The same requirements and obligations of the Agency shall 26 be applicable for necessary off-site street improvements. As a Project 27 cost, however, Developer shall pay for driveway aprons and repair of 28 curbs and gutters and sidewalks resulting - 43 - . . lon-site improvements and the installation of right hand turn lanes and 2 bus turnouts all as more fully described on the Scope of Development 3 (Attachment "3"). 4 5 (h) Schedule of Performance. The Developer shall begin and 6 complete all construction and development and undertake all obligations 7 and responsibilities of the Developer within the times specified in the 8 Schedule of Performance (Attachment 6), or within such reasonable 9 extensions of such times as may be granted by the Agency or as 10 otherwise provided for in this Agreement. The Schedule of Performance 11 shall be subject to revision from time to time as mutually agreed upon 12 in writing by and between the Developer and the Agency. Any and all 13 deadlines for performance by the parties shall be extended for any 14 period attributable to delays which are not the fault of the performing 15 party and are caused by the other party, other than periods for review 16 and approval or reasonable disapprovals of plans, drawings and related 17 documents, specifications or applications for permits as provided in 18 this Agreement. 19 20 Prior to and during the period of construction of the 21 Project, the Developer shall submit to the Agency written progress 22 reports when and as reasonably requested by the Agency in writing but 23 in no event more frequently than every two (2) weeks. The reports 24 shall be in such form and detail as may reasonably be required by the 25 Agency, and shall include a reasonable number of construction 26 photographs taken since the last such report submitted by the 27 Developer. 28 - 44 - . . 1 (i) Bodilv Iniurv and ProDertv Damaqe Insurance. Prior to 2 the commencement of construction on the Property, the Developer shall 3 furnish, or shall cause to be furnished, to the Agency duplicate 4 originals or appropriate certificates of public indemnity and liability 5 insurance in the amount of Two Million Dollars ($2,000,000) combined 6 single limit, naming the Agency and the city as additional insureds. 7 Said insurance shall cover comprehensive general liability including, 8 but not limited to, contractual liability; acts of subcontractors; 9 premises-operations; explosion, collapse and underground hazards, if 10 applicable; broad form property damage, personal injury including 11 libel, slander and false arrest. In addition, the Developer shall 12 provide to the Agency adequate proof of comprehensive automobile 13 liability insurance covering owned, non-owned and hired vehicles, 14 combined single limit in the amount of One Million Dollars ($1,000,000) 15 each occurrence; and proof of workers compensation insurance. Any and 16 all insurance policies required hereunder shall be obtained from 17 insurance companies admitted in the state of California and rated at 18 least B+: XII in Best's Insurance Guide. All said insurance polices 19 shall provide that they may not be canceled unless the Agency and the 20 city receive written notice of cancellation at least ten (10) calendar 21 days prior to the effective date of cancellation. Any and all 22 insurance obtained by the Developer hereunder shall be primary to any 23 and all insurance which the Agency and/or city may otherwise carry, 24 including self insurance, which for all purposes of this Agreement 25 shall be separate and apart from the requirements of this Agreement. 26 Any insurance policies governing the Property as obtained by the Agency 27 shall not be transferred from the Agency to the Developer. Appropriate - 45 - approved by the Agency Counsel ~ ~ 28 insurance means those insurance policies . . 1 2 J 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 consistent with the foregoing. Any and all insurance required hereunder shall be maintained and kept in force for any portion of the Property for which a Certificate of Completion has not been issued. The costs of obtaining such insurance shall be deemed costs of the Project. (j) Minoritv Emplovment Obliqations. The Developer hereby covenants to use its best efforts to afford the opportunity to qualified Minority Business Enterprises (MBE's) to submit bids and proposals on the development of the Project. Bidders for the development of the Project shall be expected to solicit and use minorities in their bidding, subcontracting and material purchases. The Developer shall make positive good faith efforts to inform qualified MBE's of available business opportunities. A bona fide MBE is a business which is owned and controlled by at least fifty-one percent (51%) by minority group members. Minority group members are Blacks, Hispanics, American Indians, orientals, females and other socially or economically disadvantaged groups. The Developer shall adhere to the goal for the participation of qualified non-women MBE' s in the development of the proj ect of fifteen percent (15%) of the total contract price and of an additional five percent (5%) of the total contract price for women contractors. The Developer shall have bidders document their compliance with this subsection (j) in one of two ways: - 46 - ~ . . 1 1. if bidder is a qualified MBE, by a written 2 statement to that effect; or 3 4 2 . if bidder will joint venture with a qualified MBE 5 or subcontracts a substantial portion of the contract to a 6 qualified MBE, by a written statement to that effect which shows 7 the percentage of MBE participation. 8 9 The Agency shall provide a list of all qualified MBE's to the 10 Developer in order for the Developer to issue notices and requests for 11 bidding and agrees to assist Developer, to the extent feasible, in 12 order that Developer can satisfy it's obligations under this subsection 13 (j). 14 15 (k) Antidiscrimination Durinq Construction. The Developer 16 for itself and its successors and assigns agrees that in the 17 construction of the improvements on the Property provided for in this lB Agreement, the Developer will not discriminate against any employee or 19 applicant for employment because of sex, marital status, race, color, 20 religion, creed, national origin, or ancestry. 21 22 (1) Local. state. and Federal Laws. The Developer shall 23 carry out its construction of the improvements on and off the Property 24 in conformity with all applicable laws, including all applicable 25 federal and state labor standards and requirements, and laws applicable 26 to the payment of prevailing wages for the construction and 27 installation of public improvements. The Agency covenants and agrees 28 likewise to meet the requirements set forth in this Subsection J.01(1) ~ -,,- ~ . . 1 with regard to any and all construction undertaken by the Agency in 2 accordance with this Agreement. 3 4 (m) Approval bv city and Other Governmental Aqencies of 5 Permits; Subdivision Map; Declaration of Covenants, Conditions and 6 Restrictions. Before commencement of construction and development of 7 any buildings, structures or other work or improvements upon the 8 Property required to be constructed or developed by the Developer 9 pursuant to this Agreement, the Developer shall, at its own cost and 10 expense, secure or shall cause to be secured, any and all permits which 11 may be required by the City or any other governmental agency having 12 jurisdiction thereof for such construction, development or work. The lJ Agency shall cooperate in good faith to the greatest possible extent 14 with the Developer in the Developer's efforts to obtain from the City 15 or any other appropriate governmental agency any and all such permits 16 and, upon completion of applicable portions of the Project, 17 certificates of occupancy. 18 19 The Agency shall prepare and the Developer shall in timely 20 fashion, as set forth in the Schedule of Performance (Attachment 6) 21 cause the execution of a declaration of covenants, conditions and 22 restrictions ("CC&R I S") applicable to the Property, providing among 23 other matters for reciprocal parking, ingress, egress and maintenance 24 of common areas on the Property. 25 26 (n) Restrictions on the Use of the Phase II Parcel. The 27 Agency and the Developer agree that (i) in the event the Developer - 48 - Phase II Parcel and acquires ~ ~ 28 exercises its option with respect to the . . 1 such Phase II Parcel, the Developer shall cause to be contained in any 2 CC&R's pertaining to such Phase II Parcel those certain restrictions on 3 the use of the Phase II Parcel as agreed to by the Developer and as set 4 forth in the Lease provided, however, that the supermarket is operated 5 in the Project, or (ii) in the event that the Developer does not 6 exercise its option to acquire the Phase II Parcel but has developed 7 the Property with the Supermarket as a tenant of the Project then the 8 Agency shall cause certain restrictions to be added to any CC&R' s 9 pertaining to the Phase II Parcel which restrictions shall include that 10 the Phase II Parcel cannot be developed with (1) any form of food 11 market uses or related convenience store uses; (2) any drugstore uses; 12 (J) any full service sit down restaurant uses with a square footage 13 exceeding 6,000 square feet, (4) any warehousing (other than the 14 temporary storage of fixtures and equipment by an occupant of the 15 property) or (5) any industrial manufacturing, wholesaling or 16 residential purposes, except for the storage and/or manufacture of such 17 goods as are required as a necessary incident to the conduct of a 18 particular retail mercantile business. No portion of the Phase II 19 Parcel shall be used for a massage parlor, "adult" bookstore or for a 20 store primarily selling or renting "X rated" films or videos, a bowling 21 alley, skating rink, studio or gym, billiard room, game arcade or 22 amusement center theater, bar or tavern (except where incidental to the 23 operation of a restaurant or delicatessen), beauty school, barber 24 college, reading room, place of instruction, any other operation 25 catering primarily to students or trainees rather than to customers, or 26 any full service gas stations with maintenance bays. 27 - 49 - ~ . . 1 (0) Aqencv Riqhts of Access. Officers, employees, agents or 2 representatives of the Agency and the city shall have the right of J reasonable access to the property after reasonable notice to the 4 Developer, without the payment of charges or fees, during normal 5 construction hours during the period of construction of the Project for 6 the purposes of this Agreement including, but not limited to, the 7 inspection of the work being performed in constructing the Project. 8 Such officers. employees, agents or representatives of the Agency 9 and/or the City shall be those persons who are so identified by the 10 Executive Director and who shall in no way interfere with the 11 development of the project. Any and all officers, employees, agents or 12 representatives of the Agency and the City who enter the Property lJ pursuant hereto shall identify themselves at the job site office upon 14 their entrance onto the Property and shall at all times be accompanied 15 by a representative of the Developer while on the Property: provided, 16 however, that the Developer shall make a representative of the 17 Developer available for this purpose at all times during normal 1B construction hours upon reasonable notice from the Agency. The Agency 19 shall indemnify and hold the Developer harmless from injury, property 20 damage or liability arising out of the exercise by the Agency and/or 21 the city of this right of access, other than injury, property damage or 22 liability relating solely to the negligence of the Developer or its 23 officers, agents or employees. 24 25 The Developer agrees to use reasonable efforts to secure the 26 building area on the Property during construction by standard 27 construction temporary fencing at least six (6) feet in height in order - 50 - and/o, att,active nUi>ance.~ 28 to prevent unlawful entry by any persons . . 1 The Agency shall inspect relevant portions of the 2 construction site prior to issuing any written statements reflecting 3 adversely on the Developer's compliance with the terms and conditions 4 of this Agreement pertaining to construction of the Project. 5 6 section J. 02. Responsibili tv of the Aqency. The Agency, 7 without any expense of the Developer therefor and without the creation 8 of assessments or claims against the Property as a result thereof, 9 shall perform the work specified for the Agency to perform, as set 10 forth in the scope of Development (Attachment 3). 11 12 13 14 15 16 17 1B 19 20 21 22 23 24 25 26 27 28 The Agency shall not interfere with the establishment of the Developer Financing or any other financing that the Developer obtains in connection with the development of the project to the extent such financing does not impact upon the rights, obligations or liabilities of the Agency. section 3.03. Taxes. Assessments. Encumbrances and Liens. The Developer shall pay prior to delinquency all real property taxes and assessments assessed and levied on or against the Property subsequent to the close of the escrow. The Developer shall not place and shall not allow to be placed on the Property any mortgage, trust deed, deed of trust, encumbrance or lien not otherwise authorized or permitted by this Agreement. The Developer shall remove, or shall have removed, any levy or attachment made on the Property, or shall assure the satisfaction thereof, within a reasonable time but in any event prior to a sale of the Property. Nothing herein contained shall be deemed to prohibit the Developer from contesting the validity - 51 - o~ . . 1 amounts of any tax assessment, encumbrance or lien, nor to limit the 2 remedies available to the Developer in respect thereto. The covenants 3 of the Developer set forth in this Section 3.03 relating to the 4 placement of any unauthorized mortgage, trust deed, deed of trust, 5 encumbrance or lien, shall remain in effect until the Agency Loan has 6 been repaid and until the Agency has received all amounts representing 7 any Preference Returns otherwise owing to the Agency. B 9 section J.04. Security of Aqencv Loan. The parties hereby 10 agree that the Property which is the subject of this Agreement shall 11 serve as security for the repayment of any amounts owing by the 12 Developer to the Agency under the terms of the Agency Loan described in 13 Section 2.0B hereof and as evidenced by the promissory Note attached 14 hereto as Attachment No.4, and as such, shall be subject to 15 foreclosure in the event of any default in the repayment of the Agency 16 Loan. Moreover, the Developer agrees to provide the guaranties of N.F. 17 Enterprises, N . F. Management and John pierce in order to guaranty 18 payment of the Promissory Note. The parties further agree that this 19 Agreement shall be recorded against the Property and shall serve as a 20 lien against the Property to evidence the obligations of the Developer 21 under the terms of the Promissory Note, subordinate only to 22 construction loan not to exceed Five Million Seven Hundred Thousand 23 Dollars ($5,700,000) or a permanent loan not to exceed six Million Five 24 Hundred Thousand Dollars ($6,500,000). Upon repayment of the Agency 25 Loan and upon the written demand of the Developer, the Agency shall 26 cause to be recorded a Release of Lien substantially in the form 27 attached hereto as Attachment No. 8 and incorporated herein by this - 52 - only to the obligations ~ ~ 28 reference which Release of Lien shall pertain . . 1 of the Developer, and the guarantors thereof, with respect to the 2 Agency Loan and the Promissory Note and which Release of Lien shall in 3 no manner affect any of the other provisions or obligations of the 4 parties hereunder. 5 6 Section J.05. Prohibition Aqainst Transfer. Prior to the 7 recordation of a certificate of Completion with respect to the entire 8 Property as set forth in section 3.08 of this Agreement, the Developer 9 shall not, without prior written approval of the Agency, or except as 10 otherwise permitted by this Agreement, (a) assign or attempt to assign 11 this Agreement or any right herein or (b) make any total or partial 12 sale, transfer, conveyance, leaseback, or assignment of the whole or 13 any part of the Property or the improvements thereon. This prohibition 14 shall not apply to either of the following: (i) the reasonable grant of 15 limited easements or permits to facilitate the development of the 16 Property; (ii) leases of improved tenant spaces and buyback leases for 17 the designated pads. lB 19 It is understood and agreed by the Developer that except with 20 respect to the COP facility neither the Developer, nor its assigns or 21 successors in interest to the Property or this Agreement, shall use or 22 otherwise sell, transfer, convey, assign, lease, leaseback or 23 hypothecate the Property or any portion thereof to any entity or party, 24 or for any use of the Property, that is partially or wholly exempt from 25 the payment of real property taxes pertinent to the Property, or any 26 portion thereof, or which would cause the exemption of the payment of 27 all or any portion of such real property taxes, during the time that - 53 - ~ 28 the Redevelopment Plan is in effect. . . 1 In the absence of specific written agreement or approval by 2 the Agency, no unauthorized sale, transfer, conveyance, lease, 3 leaseback or assignment of the Property shall be deemed to relieve the 4 Developer or any other party from any obligations under this Agreement. 5 6 section J.06. Securitv Financinq; Riqht of Holders. 7 8 (a) No Encumbrances Except Mortqaqes. Deeds of Trust. 9 Convevances and Leases-Back or Other Convevance for Financinq for 10 Development. The Developer agrees to obtain the Developer Financing as 11 described in Section 2.07 hereof and to the extent the Developer deems 12 it necessary to obtain any additional financing which is not otherwise 13 contemplated by the terms of this Agreement, the Developer shall notify 14 the Agency in writing in advance of any mortgage, deed of trust, 15 conveyance and leaseback, or other form of conveyance for such 16 financing if the Developer proposes to enter into the same before the 17 recordation of the Certificate of Completion. The Developer shall not 18 enter into any such conveyance for financing without prior written 19 approval of the Agency which shall not be unreasonably withheld, except 20 as otherwise permitted or authorized under this Agreement; provided, 21 however, that if the Agency does not respond to the notification within 22 sixty (60) days of receipt of such notification, the Agency's approval 23 of such additional financing shall be deemed as given. 24 25 The words "mortgage" and "deed of trust" as used herein shall 26 be deemed to include all other customary and appropriate modes of 27 financing real estate acquisition, construction and land development. - 54 - . . 1 The Agency agrees to make such amendments regarding the rights of any 2 lender as the approved lender shall reasonably require. 3 4 (b) Holder not Obliqated to Construct Improvements. The 5 holder of any mortgage, deed of trust or other security interest 6 authorized by this Agreement shall in no manner be obligated by the 7 provisions of this Agreement to construct or complete the improvements B or to guarantee such construction or completion; nor shall any covenant 9 or any other provision in the grant deeds for the Property be construed 10 so to obligate such holder. Nothing in this Agreement shall be deemed 11 to permit or authorize any such holder to devote the Property to any 12 uses, or to construct any improvements thereon, other than those uses 13 or improvements provided for or authorized by this Agreement. 14 15 (c) Notice of Default to Mortqaqe, Deed of Trust or other 16 Securitv Interest Holders; Riqht to Cure. Whenever the Agency shall 17 deliver any notice or demand to the Developer with respect to any 1B breach or default by the Developer in the completion of construction of 19 the improvements, or any breach or default of any other obligations 20 which might entitle the Agency to terminate this Agreement or exercise 21 its right to re-enter under section 5.07 hereof, the Agency shall at 22 the same time deliver to each holder of record of any mortgage, deed of 23 trust or other security interest authorized by this Agreement a copy of 24 such notice or demand. The Agency will cooperate with any construction 25 lender to the extent reasonably necessary to modify the provisions of 26 this section 3.06 to meet the reasonable requirements of such lender. 27 Each such holder shall (insofar as the rights of the Agency are 28 concerned) have the right, at its option, - 55 - . . 1 remedy of any such default, within ninety (90) calendar days after the 2 receipt of the notice and to diligently and continuously proceed with J such cure or remedy; and to add the cost thereof to the security 4 interest debt and the lien of its security interest. Nothing contained 5 in this Agreement shall be deemed to permit or authorize such holder to 6 undertake or continue the construction or completion of the 7 improvements (beyond the extent necessary to conserve or protect the 8 improvements or construction already made) without first having 9 expressly assumed the Developer's obI igations by written agreement 10 satisfactory to the Agency. The holder in that event must agree to 11 complete, in the manner provided in this Agreement, the improvements to 12 which the lien or title of such holder relates and must submit evidence lJ satisfactory to the Agency that it has the qualifications and financial 14 responsibility necessary to perform such obligations. Any such holder 15 completing such improvements in accordance herewith shall be entitled, 16 upon written request made to the Agency, to be issued a certificate of 17 Completion by the Agency. 18 19 (d) Failure of Holder to Complete Improvements. In any case 20 where, one hundred eighty (lBO) calendar days after default by the 21 Developer in the completion of construction of improvements under this 22 Agreement, the holder of any mortgage, deed of trust or other security 23 interest creating a lien or encumbrance upon the Property or any 24 portion thereof has not exercised the option to construct the 25 applicable portions of the Project, or has exercised the option but has 26 not proceeded diligently and continuously with construction, the Agency 27 may purchase the mortgage, deed of trust or other security interest by - 56 - including ~ ~ 28 payment to the holder of the amount of the unpaid debt, . . 1 principal, accrued and unpaid interest, late charges, costs, expenses 2 and other amounts payable to the holder by the Developer under the loan J documents between holder and the Developer. If the ownership of the 4 Property has vested in the holder, the Agency, if it so desires, shall 5 be entitled to a conveyance from the holder to the Agency upon payment 6 to the holder of an amount equal to the sum of the following: 7 8 (i) The unpaid mortgage, deed of trust or other 9 security interest debt, including principal, accrued and unpaid 10 interest, late charges, costs, expenses and other amounts payable 11 to the holder by the Developer under the loan documents between 12 the holder and the Developer, at the time title became vested in 13 the holder (less all appropriate credits, including those 14 resulting from collection and application of rentals and other 15 income received during foreclosure proceedings). 16 17 (ii) All expenses, if any, incurred by the holder with 1B respect to foreclosure. 19 20 (iii) The net expenses, if any (exclusive of general 21 overhead), incurred by the holder as a direct result of the 22 subsequent ownership or management of the Property, such as 23 insurance premiums and real estate taxes. 24 25 (iv) The cost of any improvements made by such holder. 26 27 (v) An amount equivalent to the interest that would - 57 - had all such amounts ~ ~ 28 have accrued on the aggregate on such amounts . . 1 become part of the mortgage or deed of trust debt and such debt 2 had continued in existence to the date of payment by the Agency. 3 4 (vi) After expiration of the aforesaid one hundred 5 eighty (180) calendar day period, the holder of any mortgage, deed of 6 trust or other security affected by the option created by this 7 Section 3.06, may request that the Agency act pursuant to the option 8 granted hereby. 9 10 (e) Riqht of Aqency to Cure Mortqaqe. Deed of Trust or Other 11 Security Interest Upon Default. In the event of a default or breach by 12 the Developer of a mortgage, deed of trust or other security interest 13 with respect to the Property (or any portion thereof) prior to the 14 issuance of a certificate of Completion for the Property, and the 15 holder has not exercised its option to complete the development, the 16 Agency may cure the default prior to completion of any foreclosure. In 17 such event, the Agency shall be entitled to reimbursement from the 18 Developer of all reasonable costs and expenses incurred by the Agency 19 in curing the default. The Agency shall also be entitled to a lien 20 upon the Property to the extent of such costs and disbursements. Any 21 such lien shall be subordinate and subject to mortgages, deeds of trust 22 or other security instruments executed for the sole purpose of 23 obtaining funds to purchase and develop the Property as authorized 24 herein. 25 26 Section 3.07. Riqht of the Aqency to satisfY other Liens on 27 the Property after Conveyance of Title. After the conveyance of title 28 to the Property by the Agency to the - 58 - recordation of the Certificate of Completion (referred to in Section 3.08 of this Agreement), and after the Developer has had a resonable time to challenge, cure or satisfy any unauthorized liens or encumberes on the Property, the Agency shall, after sixty (60) calendar days prior written notice to the Developer within which time Developer fails to remove the lien or encumbrance, have the right to satisfy any such liens or encumbrances to prevent any impending sale or forfeiture of the Property; provide, however, that nothing in this Agreement shall require the Developer to pay or make provisions for the payment of any tax, assessment, lien or charge so long as the Developer in good faith shall contest the validity or amount thereof, and so long as such delay in payment shall not subject the Property, or any portion thereof, to forfeiture or sale. Section 3.08. Certificate of Completion. Within thirty (30) days following written request therefor by the Developer and the completion of construction of the improvements, excluding minor building "punch-list" items which do not exceed an aggregate amount of Twenty Five Thousand Dollars ($25,000), and any normal and customary tenant improvements, to be completed by the Developer upon the Property, the Executive Director of the Agency shall furnish the Developer with a Certificate of Completion for the Property, substantially in the form set forth in Attachment 9. The Executive Director of the Agency shall not unreasonalby withhold the issuance of a Certificate of Completion to the extent that the Developer has satisfactorily completed the Project as contemplated by this Agreement. Notwithstanding any provision set forth herein to the contrary, the completion of construction and development of improvements on the 59 . . 1 Property shall be deemed to include the completion of construction and 2 development of any and all buildings on the Property and any and all 3 parking, landscaping and related improvements necessary to support or 4 permit use by, or which otherwise meet the requirements applicable to, 5 the building and its use and occupancy. Notwithstanding any provision 6 set forth herein to the contrary, the Developer shall not be entitled 7 to the issuance of a Certificate of Completion for the Property unless 8 at the time of request for such Certificate of Completion, all parking, 9 landscaping and improvements then constructed on the Property are 10 adequate to meet the requirements applicable to the improvements on the 11 Property as generally and specifically required by this Agreement and, 12 in particular, the Scope of Development (Attachment 3). 13 14 The Certificate of Completion shall be deemed to be, and 15 shall state that it is, a conclusive determination of satisfactory 16 completion of all of the improvements required to be completed under 17 this Agreement for the Property, and of full compliance with the terms 18 of this Agreement with respect to the Property (other than covenants 19 which survive the issuance of a Certificate of Completion under the 20 terms and provisions of Section 4.05 hereof). After the recordation of 21 the Certificate of Completion, any party then owning or thereafter 22 purchasing, leasing or otherwise acquiring any interest in the Property 23 shall not (because of such ownership, purchase, lease or acquisition) 24 incur any obligation or liability under this Agreement, except that 25 such party shall be bound by any covenants contained in the grant deed, 26 lease or other instrument of transfer which grant deed, lease or other 27 instrument of transfer shall include the provisions of Sections 4.01 28 through 4.05, inclusive, of this Agreement. The - 60 - . . 1 Completion for the Property shall be in such form as to permit it to be 2 recorded in the Recorder's Office of San Bernardino County. 3 4 If the Executive Director of the Agency refuses or fails to 5 furnish a Certificate of Completion for the Property after written 6 request from the Developer, the Executive Director of the Agency shall, 7 wi thin fifteen (15) calendar days of the written request or wi thin 8 three (3) calendar days after the next regular meeting of the Agency, 9 whichever date occurs later, provide to the Developer a written 10 statement setting forth the reasons with respect to the Executive 11 Director's refusal or failure to furnish a certificate of completion. 12 The statement shall also contain the Executive Director's opinion of 13 the action the Developer must take to obtain a certificate of 14 Completion. If the reason for such refusal is confined to the 15 immediate unavailability of specific items or materials for 16 construction or landscaping at a price reasonably acceptable to 'the 17 Developer or other minor building "punch list" items, the Executive 18 Director of the Agency will issue its certificate of Completion upon 19 the posting of a bond or irrevocable letter of credit, reasonably 20 approved as to form and substance by the Agency Counsel and obtained by 21 the Developer in an amount representing the fair value of the work not 22 yet completed, as reasonably determined by the Executive Director of 23 the Agency. If the Executive Director of the Agency shall have failed 24 to provide such written statement within the foregoing period, the 25 Developer shall be deemed conclusively and without further action of 26 the Agency to have satisfied the requirements of this Agreement with 27 respect to the Property as if a certificate of Completion had been - 61 - ~ 28 issued therefor. . . 1 A certificate of Completion shall not constitute evidence of 2 compliance with or satisfaction of any obligation of the Developer to 3 any holder of a mortgage, or any insurer of a mortgage securing money 4 loaned to finance the improvements described herein, or any part 5 thereof. A certificate of completion shall not be deemed to constitute 6 a notice of completion as referred to in section 3093 of the California 7 civil Code. 8 9 Notwithstanding the foregoing, the Executive Director shall 10 issue a certificate of Completion with respect to a portion of the 11 Project which portion includes all areas comprising the Property with 12 the exception of Pad 1 and Pad 2 as designated on the site Plan 13 (Attachment "3a") to the extent that the Developer has completed all of 14 its obligations set forth in this Agreement with respect to such 15 portion. 16 17 section 3.09. Offset Statement. Upon the request of the 18 Developer, or of any lender, purchaser, tenant or other party having an 19 interest in the Property, without cost to the requesting party or 20 Developer the Agency shall issue a signed offset statement 21 substantially in the form attached hereto as Attachment 10 stating that 22 this Agreement is in full force and effect and that no default 23 hereunder exists on the part of the Developer or any successor, or if 24 such default is claimed to exist, the nature of such default. Such 25 offset statement shall be delivered by the Agency within fifteen (15) 26 calendar days following receipt of written request therefor. 27 - 62 - . . 1 section 3.10. Third Party Beneficiaries. Notwithstanding 2 any provision herein to the contrary, any and all purchasers and/or 3 lessees of all or any portion of the Property authorized hereunder 4 shall be deemed to be third party beneficiaries of any and all 5 approvals by the City and/or the Agency of permits, plans, 6 specifications and other matters as set forth in Article III of this 7 Agreement. 8 - 63 - ~ . . 1 2 3 4 section 4.01. Uses. The Developer covenants and agrees for 5 itself, its successors, its assigns, and every successor in interest to 6 the Property, or any part thereof, that during construction of the 7 Project and thereafter, and prior to the expiration of the term of the 8 Redevelopment Plan, the Developer, such successors and such assigns 9 shall devote the Property (and any part thereof) to the uses permitted 10 thereon pursuant to the Redevelopment Plan, as amended, and as set 11 forth in the grant deed conveying the Property to the Developer. The 12 Developer further covenants and agrees for itself, its successors, its 13 assigns, and every successor in interest to the Property, that until 14 that certain date twenty (20) years following the close of escrow 15 hereunder, the Property shall be used solely for purposes of a 16 commercial retail center. It is understood and agreed by the Developer 17 that with the exception of the COP facility neither the Developer, nor 18 its assigns or successors in interest to the Property or this 19 Agreement, shall use or otherwise sell, transfer, convey, assign, 20 lease, leaseback or hypothecate the Property or any portion thereof to 21 any entity or party, or for any use of the Property, that is partially 22 or wholly exempt from the payment of real property taxes pertinent to 23 the Property, or any portion thereof, or which would cause the 24 exemption of the payment of all or any portion of such real property 25 taxes, during the time that the Redevelopment Plan is in effect. 26 27 Section 4.02. Maintenance of the Property. The Developer 28 covenants and agrees for itself, its successors, its assigns, ARTICLE IV USE OF THE PROPERTY - 64 - . . 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 successor in interest to the Property, or any part thereof, that prior to the expiration of the term of the Redevelopment Plan, the Developer, such successors and such assigns shall maintain in good condition the improvements on the Property, shall keep the Property free from any accumulation of debris or waste material, subject to normal construction jobsite conditions, and shall maintain in a neat, orderly, healthy and good condition the landscaping required to be planted in accordance with the Scope of Development (Attachment 3). section 4.03. Obliqation to Refrain from Discrimination. The Developer covenants and agrees for itself, its successors, its assigns and every successor in interest to the Property or any part thereof, that there shall be no discrimination against or segregation of any person, or group of persons, on account of sex, marital status, race, color, religion, creed, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property; nor shall the Developer, itself or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the Property. section 4.04. Form of Nondiscrimination and Nonseqreqation Clauses. The Developer covenants and agrees for itself, its successors, its ass igns, and every successor in interest to the Property, or any part thereof, that the Developer, such successors and such assigns shall refrain from restricting the sale, lease, sublease, rentol, transfer, msa, occmponcy~ ::n:ra or enjoyment of the 'roperty~~ . . 1 2 3 (or any part thereof) on the basis of sex, marital status, race, color, religion, creed, ancestry or national origin of any person. All deeds, leases or contracts pertaining thereto shall contain or be subject to substantially the following nondiscrimination or nonsegregation 4 5 6 clauses: 7 (a) In deeds: "The grantee herein covenants by and for itself, its successors and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of sex, marital status, race, color, religion, creed, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee itself or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the land herein conveyed. The foregoing covenants shall run with the land." 8 9 10 11 12 l3 14 15 16 17 18 19 20 21 (b) In leases: "The lessee herein covenants by and for itself, its successors and assigns, and all persons claiming under or through them, and this lease is made and accepted upon and subject to the following conditions: That there shall be no discrimination 22 23 24 25 26 27 28 against or segregation of any person or group of persons, on account of sex, marital status, race, color, religion, creed, national origin or ancestry, in the leasing, subleasing, renting, transferring, use, occupancy, tenure or enjoyment of the land herein leased, nor shall lessee itself, or any person claiming under or through it, establish or~~ - " - \\ . . 1 permit such practice or practices of discrimination or segregation with 2 reference to the selection, location, number or occupancy of tenants, 3 lessees, sublessees, tenants or vendees in the land herein leased." 4 5 (c) In contracts: "There shall be no discrimination against 6 or segregation of, any person or group of persons on account of sex, 7 marital status, race, color, religion, creed, national origin or 8 ancestry in the sale, lease, sublease, rental, transfer, use, 9 occupancy, tenure or enjoyment of the land, nor shall the transferee 10 itself or any person claiming under or through it, establish or permit 11 any such practice or practices of discrimination or segregation with 12 reference to the selection, location, number, use or occupancy of 13 tenants, lessees, subtenants, sublessees or vendees of the land." 14 15 Section 4.05. Effect and Duration of Covenants. The 16 covenants established in this Agreement shall , without regard to 17 technical classification and designation, be binding on the Developer 18 and any successor in interest to the Property, for the benefit and in 19 favor of the Agency, its successors and assigns, and the city. Such 20 covenants shall cease and terminate when a Certificate of Completion 21 has been issued, except otherwise as provided in grant deed(s) by which 22 the Property is conveyed by the Agency to the Developer hereunder or as 23 hereinafter provided; provided, however, that the covenants set forth 24 in sections 4.01 and 4.02 hereof shall remain in effect for those 25 certain periods specified therein, and the covenants set forth in 26 Sections 4.03 and 4.04 hereof shall remain in effect in perpetuity. - 67 - ~ . . 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ARTICLE V DEFAULTS, REMEDIES AND TERMINATION section 5.01. Defaults - General. subj ect to the extensions of time set forth in section 6.05 hereof, failure or delay by either party to perform any material term or provision of this Agreement shall constitute a default under this Agreement; provided, however, that if a party otherwise in default commences to cure, correct or remedy such default within thirty (30) calendar days after receipt of written notice specifying such default and shall diligently and continuously prosecute such cure, correction or remedy to completion (and where any time limits for the completion of such cure, correction or remedy are specifically set forth in this Agreement, then within said time limits), such party shall not be deemed to be in default hereunder. The injured party shall give written notice of default to the party in default, specifying the default complained of by the non-defaUlting party. Delay in giving such notice shall not constitute a waiver of any default nor shall it change the time of default. Any failure or delays by either party in asserting any of its rights and remedies as to any default shall not operate as a waiver of any default or of any such rights or remedies. Delays by either party in asserting any of its rights and remedies shall not deprive either party of its right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert or enforce any such rights or remedies. - 68 - ~ . . 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 section 5.02. Leqal Actions. (a) Institution of Leqal Actions. In addition to any other rights or remedies, either party may institute legal action to cure, correct or remedy any default, to recover damages for any default, or to obtain any other remedy consistent with the purposes of this Agreement. Such legal actions must be instituted in the Superior Court of the County of San Bernardino, State of California, in any other appropriate court in that County, or in the Federal District Court in the Central District of California. (b) Applicable Law. The laws of the State of california shall govern the interpretation and enforcement of this Agreement. (c) Acceptance of Service of Process. In the event that any legal action is commenced by the Developer against the Agency, service of process on the Agency shall be made by personal service upon the Executive Director or Chairman of the Agency, or in such other manner as may be provided by law. In the event that any legal action is commenced by the Agency against the Developer, service of process on the Developer shall be made by personal service upon John pierce (or such other Agent for service of process and at such address as may be specified in written notice to the Agency), or in such other manner as may be provided by law, and shall be valid whether made within or without the State of California. - 69 - ~ . . 1 2 3 4 5 6 7 8 9 10 II 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 section 5.03. Riqhts and Remedies are Cumulative. Except with respect to rights and remedies expressly declared to be exclusive in this Agreement, the rights and remedies of the parties are cumulative and the exercise by either party of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by the other party. Section 5.04. Damaqes. If either party defaults with regard to any provision of this Agreement, the non-defaUlting party shall serve written notice of such default upon the defaulting party. If the defaulting party does not diligently commence to cure such default within thirty (30) calendar days after service of the notice of default and promptly complete the cure of such default within a reasonable time, not to exceed ninety (90) calendar days (or such other period as may otherwise be specified in this Agreement for any specific default) , after the service of written notice of such default, the defaulting party shall be liable to the other party for damages caused by such default. Section 5.05. Specific Performance. If either party defaults under any of the provisions of this Agreement, the non-defaulting party shall serve written notice of such default upon such defaulting party. If the defaulting party does not commence to cure the default and diligently and continuously proceed with such cure within thirty (30) calendar days after service of the notice of default, and such default is not cured within a reasonable time thereofter (and where any time '~m::S_for the completion of smch cmre,~ 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 . . correction or remedy are specifically set forth in this Agreement, then within said time limits), the non-defaulting party, at its option, may insti tute an action for specific performance of the terms of this Agreement, except as otherwise provided in section 5.04 hereof. Section 5.06. Remedies and Riqhts of Termination. (a) Termination bv the Developer. The Developer may terminate this Agreement if the Agency does not submit evidence of the availability of funds for the Fixture Financing, the UDAG Moneys, the Agency Loan or the Agency Contribution as described in section 2.17(h) hereof or if the Agency does not tender conveyance of title to and possession of the Property to the Developer in the manner and condition and by the date provided in this Agreement (or any and all extensions thereof as authorized by this Agreement), and if any such failure is not cured within thirty (30) calendar days after written demand therefor submitted by the Developer to the Agency. Such written demand shall specify the Agency's default and the action required to cure same. In the event the Developer terminates this Agreement pursuant to this subsection (a) the Agency shall reimburse Developer for any amounts of the Developer Advance which have been expended or for any Predevelopment Costs incurred by Developer which have not otherwise been reimbursed by the Agency. (b) Termination bv the Aqencv. (i) Subject to written notice of default which shall specify the Developer's default and the action required to cure same and upon thirty (30' C~'::d~r days notice to the Developer Of~ 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 . . the Agency's intent to terminate this Agreement pursuant to this Section, the Agency at its option may terminate this Agreement if the Developer in breach of this Agreement, assigns or attempts to assign this Agreement, or any right therein, or attempts to make any total or partial sale, lease or leaseback, transfer or conveyance of the whole or any part of the Property or the improvements to be developed thereon in violation of the terms of this Agreement, and the Developer does not correct such violation within thirty (30) calendar days from the date of receipt of such notice. (ii) SUbject to written notice of default, which shall specify the Developer's default and the action required to cure same and upon thirty (30) calendar days notice to the Developer of the Agency's intent to terminate this Agreement pursuant to this Section, the Agency at its option may terminate this Agreement if the Developer (A) does not within the time limits set forth in this Agreement or as specifically provided in the Schedule of Performance (Attachment 6), subject to extensions authorized by this Agreement due to force majeure or otherwise, submit development plans, construction drawings and related documents acceptable to the Planning Department and Building Division of the City for plan check purposes and in order to obtain building permits for the Project, together with applicable fees therefor, all prepared to the minimum acceptable standards as required by the Planning Department and Building Division of the City for commencement of formal review of such documents and as required by this Agreement, or (B) does not carry out its other - 72 - ~teriol i- . . 1 responsibilities under this Agreement or in accordance with any 2 modification or variance, precise plan, design review and other 3 environmental or governmental approvals and such default is not 4 cured or the Developer does not commence and diligently and 5 continuously proceed with such cure within thirty (30) calendar 6 days after the date of receipt of written demand therefor from the 7 Agency. 8 9 (iii) Subject to written notice of default which shall 10 specify the Developer's default and the action required to cure 11 same and upon thirty (30) calendar days notice to the Developer of 12 the Agency's intent to terminate this Agreement pursuant to this 13 Section, the Agency at its option may terminate this Agreement if 14 upon satisfaction of all conditions precedent and concurrent 15 therefor under this Agreement, the Developer does not take title 16 to the Property under tender of conveyance by the Agency, and such 17 breach is not cured within thirty (30) calendar days after the 18 date of receipt by the Developer of written demand therefor from 19 the Agency. 20 21 Section 5.07. Riqht to Reenter. Repossess. Terminate and 22 Revest. 23 24 25 26 27 28 (a) The Agency shall, upon thirty (30) calendar days notice to the Developer and each holder of record of any mortgage, deed of trust or other security interest authorized by this Agreement, which notice shall specify this Section, have the right subj ect to the provisions of Section 3.06 hereof, at its option, and due to any cause, - 73 - ~ . . 1 to reenter and take possession of the Property, together with all 2 improvements thereon, and to terminate and revest in the Agency the 3 estate conveyed to the Developer hereunder, if after conveyance of 4 title and prior to the recordation of the Certificate of Completion, 5 the Developer (or its successors in interest) shall: 6 7 (i) Fail to commence construction of all or any portion 8 of the improvements as required by this Agreement for a period of 9 ninety (90) calendar days after written notice to proceed from the 10 Agency; provided that the Developer shall not have obtained an II extension or postponement to which the Developer may be entitled 12 pursuant to Section 6.05 hereof; or 13 14 (ii) Abandon or substantially suspend construction of 15 all or any portion of the improvements for a period of ninety (90) 16 calendar days after written notice of such abandonment or 17 suspension from the Agency; provided that the Developer shall not 18 have obtained an extension or postponement to which the Developer 19 may be entitled to pursuant to section 6.05 hereof; or 20 21 (iii) Assign or attempt to assign this Agreement, or any 22 rights herein, or transfer, or suffer any involuntary transfer, of 23 the property or any part thereof, in violation of this Agreement, 24 and such violation shall not have been cured within thirty (30) 25 calendar days after the date of receipt of written notice thereof 26 from the Agency to the Developer. 27 - 74 - ~ . . 1 The thirty (30) calendar day written notice specified in this 2 section 5.07(a) shall specify that the Agency proposes to take action 3 pursuant to this section 5.07 and shall specify which of the 4 Developer's obligations set forth in Subsections (i) through (iii) 5 herein have been breached. The Agency shall proceed with its remedy 6 set forth herein only in the event that (i) the Developer continues in 7 default of said obligation(s) for a periOd of thirty (30) calendar days 8 following such notice or, upon commencing to cure such default, fails 9 to diligently and continuously prosecute said cure to satisfactory 10 conclusion, and (ii) each holder of record of any mortgage, deed of 11 trust or other security interest authorized by the Agreement does not 12 elect to cure Developer's default within such thirty (30) days or upon 13 commencing to cure such default fails to diligently and continuously 14 prosecute said cure to satisfactory conclusion. 15 16 (b) The right of the Agency to reenter, repossess, 17 terminate, and revest shall be subject and subordinate to, shall be 18 limited by and shall not defeat, render invalid or limit: 19 20 (i) Any mortgage, deed of trust or other security 21 interest permitted by this Agreement; 22 23 (ii) Any rights or interests provided in this Agreement 24 for the protection of the holders of such mortgages, deeds of 25 trust or other security interests; 26 - 75 - 'f . . 1 (iii) Any leases: declarations of covenants, conditions and restrictions: easement agreements: or other recorded documents 2 3 applicable to the Property. 4 5 Upon the revesting in the Agency of title to the Property, or 6 any part thereof, as provided in this Section 5.07, the Agency shall, 7 pursuant to its responsibilities under State law, use its best efforts 8 to resell the Property, or any part thereof, at fair market value as 9 soon and in such manner as the Agency shall find feasible and 10 consistent with the objectives of such law and of the Redevelopment 11 Plan, to a qualified and responsible party or parties (as reasonably 12 determined by the Agency) who will assume the obligations of making or 13 completing the improvements, or such other improvements in their stead, 14 as shall be satisfactory to the Agency and in accordance with the uses 15 specified for the Property, or any part thereof, in the Redevelopment 16 Plan unless Developer shall have cured the applicable default listed in 17 subsection (i) (ii) or (iii) above prior to the execution of a purchase 18 agreement with a qualified and responsible party in which event Agency 19 shall immediately return possession of the Project to Developer and 20 Developer shall reimburse Agency for all costs and expenses incurred in 21 connection with the Agency's exercise of its right to reenter. Upon 22 such resale of the Property, or any part thereof, the proceeds thereof 23 shall be applied: 24 25 (i) First, to reimburse the Agency on its own behalf or 26 on behalf of the city for all actual costs and expenses incurred 27 by the Agency and the city, including but not limited to customary - 76 - engaged ~ ~ 28 and reasonable fees or salaries to third party personnel . . 1 in such action (but excluding the Agency's or city's general 2 overhead expense), in connection with the recapture, management 3 and resale of the Property or part thereof; all taxes, assessments 4 and water and sewer charges paid by the City and/or the Agency 5 with respect to the Property or part thereof; any payment made or 6 necessary to be made to discharge or prevent from attaching or 7 being made any subsequent encumbrances or liens due to obligations 8 incurred with respect to the making or completion of the agreed 9 improvements or any part thereof on the Property, or part thereof; 10 any amounts otherwise owing to the Agency by the Developer and its 11 successor transferee; and 12 13 (ii) Second, to the extent that any and all funds which 14 are proceeds from such resale are thereafter available, to IS reimburse the Developer, or its successor transferee, up to the 16 amount equal to the costs incurred by the Developer from its own 17 funds for the development of the Property, or applicable part 18 thereof, or for the construction and financing of the improvements 19 thereon inClUding, but not limited to, costs of carry, taxes and 20 items set forth in the Developer'S cost statement which shall be 21 submitted to and approved by the Agency. 22 23 Any balance remaining after the foregoing appl ication of 24 proceeds shall be retained by the Agency. 25 26 - 77 - \) y" . . 1 ARTICLE VI 2 GENERAL PROVISIONS 3 4 Section 6.01. Notices. Demands and Communications Between 5 the Parties. Any and all notices, demands or communications submitted 6 by any party to another party pursuant to or as required by this 7 Agreement shall be proper if in writing and dispatched by messenger for 8 immediate personal delivery, or by registered or certified united 9 states mail, postage prepaid, return receipt requested, to the 10 principal office of the Agency and the Developer, as applicable, as 11 designated in Section 1. 05 (a) and Section 1. 05 (b) hereof. Such written 12 notices, demands and communications may be sent in the same manner to 13 such other addresses as either party may from time to time designate as 14 provided in this Section 6.01. Any such notice, demand or 15 communication shall be deemed to be received by the addressee, 16 regardless of whether or when any return receipt is received by the 17 sender or the date set forth on such return receipt, on the day that it 18 is dispatched by messenger for immediate personal delivery, or two (2) 19 calendar days after it is placed in the united States mail as 20 heretofore provided. 21 22 In addition to the submission of notices, demands or 23 communications to the parties as set forth above, copies of all notices 24 to any party shall also be sent to: 25 - 78 - ~~ . . 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 l6 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 (if the Developer) John W. pierce 701 S. Parker street, suite 2000 Orange, CA 92668 (with copy to) Allan Hoekstra 701 S. Parker street, suite 2000 Orange, CA 92668 (and) Hal A. Young, Jr. Law Offices of Hal A. Young, Jr. 3146 Redhill Avenue, suite 200 Costa Mesa, CA 92626 (and) (if the Agency) Redevelopment Agency of the City of San Bernardino 300 North "D" street San Bernardino, CA 92418 Attn.: Executive Director (with copy to) Sabo & Green A Professional Corporation 6320 canoga Avenue suite 400 Woodland Hills, CA 91367 Attn.: Timothy J. Sabo Section 6.02. Conflict of Interest. No member, official or 32 employee of the Agency having any conflict of interest, direct or 33 indirect, related to this Agreement and the development of the Property 34 shall participate in any decision relating to the Agreement. The 35 parties represent and warrant that they do not have knowledge of any 36 such conflict of interest. 37 38 Section 6.03. Warrantv Aqainst Payment of Consideration for 39 Aqreement. The Developer warrants that it has not paid or given, and 40 will not payor give, any third party any money or other consideration 41 for obtaining this Agreement. Third parties, for the purposes of this 42 Section, shall not include persons to whom fees are paid for - 79 - financiol ccnO"'tonts~ 43 professional services if rendered by attorneys, . . 1 accountants, engineers, architects and the like when such fees are 2 considered necessary by the Developer. 3 4 Section 6.04. Nonliabilitv of Aqencv Officials and 5 Emplovees. No member, official or employee of the Agency shall be 6 personally liable to the Developer, or any successor in interest, in 7 the event of any default or breach by the Agency or for any amount 8 which may become due to the Developer or to its successor, or on any 9 obligations under the terms of this Agreement, except for gross 10 negligence or wilful acts of such member, officer or employee. 11 12 section 6.05. Enforced Delay; Extension of Time of 13 Performance. In addition to specific provisions of this Agreement, 14 performance by either party hereunder shall not be deemed to be in 15 default where delays or defaults are due to war; insurrection; strikes; 16 lockouts; riots; floods; earthquakes; fires; casualties; acts of God; 17 acts of the public enemy; epidemics; quarantine restrictions; freight 18 embargoes or lack of transportation; weather-caused delays; inability 19 to secure necessary labor, materials or tools; delays of any 20 contractor, subcontractor or supplier; acts of the other party other 21 than as permitted or required by the terms of this Agreement; acts or 22 failure to act of any public or governmental agency or entity other 23 than as permitted or required by the terms of this Agreement (except 24 that action or failure to act by the city or the Agency shall not 25 extend the time for the Agency to act unless such action or failure to 26 act is the result of a lawsuit or injunction including by way of 27 illustration, but not limited to, lawsuits pertaining to the adoption 28 of the Agreement, an EIR and any other - 80 - . . 1 procedures, eminent domain, and the like); or any other causes beyond 2 the control or without the fault of the party claiming an extension of 3 time to perform. Any extension of time for any such cause hereunder 4 shall be for the period of the enforced delay and shall commence to run 5 from the time of the commencement of the cause, if notice by the party 6 claiming such extension is sent to the other party within thirty (30) 7 calendar days of the commencement of the cause. Times of performance 8 under this Agreement may also be extended by mutual agreement in 9 writing by and between the Agency and the Developer. 10 II Section 6.06. Inspection of Books and Records. The Agency 12 shall have the right at all reasonable times at the Agency's cost and 13 expense to inspect the books, records and any other documents of the 14 Developer, N.F. Enterprises or N.F. Management including any leases 15 pertaining to the Property and/or the development and operation of all 16 or a portion thereof as necessary for the Agency, in its reasonable 17 discretion, to enforce its rights under this Agreement. Matters 18 discovered by the Agency shall not be disclosed to third parties unless 19 required by law or unless otherwise resulting from or related to the 20 pursuit of any remedies or the assertion of any rights of the Agency 21 hereunder. The Developer shall also have the right at all reasonable 22 times to inspect the books and records of the Agency pertaining to the 23 Property and/or the development thereof as pertinent to the purposes of 24 this Agreement. 25 - 81 - . . 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Section 6.07. Approvals. (a) Approvals required of the Agency or the Developer, or any officers, agents or employees of either the Agency or the Developer, shall not be unreasonably withheld and approval or disapproval shall be given within the time set forth in the Schedule of Performance (Attachment 6) or, if no time is given, within a reasonable time. authority technical (b) The Executive Director is authorized to sign on his own amendments to this Agreement which are of routine or nature, including minor adjustments to the Schedule of Performance. section 6.08. Real Estate Commissions. The Agency shall not be liable for any real estate commissions, brokerage fees or finder fees which may arise from or are related to the acquisition of the Property by the Agency and subsequent disposition to the Developer. Section 6.09. Indemnification. The Developer agrees to indemnify and hold the city and the Agency, and their officers, employees and agents, harmless from and against all damages, judgments, costs, expenses and fees arising from or related to any act or omission of the Developer in performing its obligations hereunder. The Agency agrees to indemnify and hold the Developer and its officers, employees and agents, harmless from and against all damages, judgments, costs, expenses and fees arising from or related to any act or omlSSlon of the Agency in performing its obligations hereunder. - 82 - \ . . 1 2 3 4 5 section 6.10. Attornevs' Fees. If either party hereto files any action or brings any action or proceeding against the other arising out of this Agreement, seeks the resolution of disputes pursuant to section 6.12 hereof, or is made a party to any action or proceeding brought by the Escrow Agent, then as between the Developer and the Agency, the prevailing party shall be entitled to recover as an element of its costs of suit or resolution of disputes pursuant to section 6.12 hereof, and not as damages, its reasonable attorney's fees as fixed by the Court or other forum for resolution of disputes as set forth in section 6.12 hereof, in such action or proceeding or in a separate action or proceeding brought to recover such attorney's fees. 6 7 8 9 10 11 12 13 14 section 6.11. Dispute Resolution. If any dispute shall arise concerning the provisions of this Agreement, such dispute shall be submitted to reference pursuant to Code of civil Procedure Sections 638 to 645.1, inclusive, or, alternately, to arbitration, on written notice of demand for arbitration ("Notice of Demand") of either party hereto given to the other. The arbitration shall be conducted pursuant to the provisions of Title 9 of Part 3 of the California Code of civil Procedure (statutory section references in this Section 6.11 shall be deemed to be references to the Code of civil Procedure), as amended, amplified and modified by the following provisions: The arbitration shall be by a single neutral arbitrator. If the parties hereto have not agreed on the selection of the arbitrator wi thin five (5) calendar days after the giving of Notice of Demand, then either party hereto may petition the court to select the arbitrator pursuant to section 1281.6. Each party hereto shall submit its nominees, if any, to the court within five (5) calendar days alter 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ",i~ - 83 - . . 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 petition is served and filed. The arbitrator shall make his award within forty-five (45) calendar days after his appointment. certain periods of time set forth in said Title 9 shall be shortened as follows: Section 1284, 1288.4, 1290.2 and 1290.6--halved; Section 1288--four (4) years to sixty (60) calendar days, and one hundred (100) days to thirty (30) calendar days; and Section 1288.2--one hundred (100) days to thirty (30) calendar days. Venue of the arbitration hearing and any court proceedings referenced below shall be in San Bernardino County, California. The parties hereto as parties to any such arbitration shall have the right to petition the court to confirm, correct or vacate the arbitrator's award pursuant to Section 1285 and to appeal the decisions of the Superior Court in any such proceeding as provided in Sections 1294 and 1294.2; provided, however, that any such appeal shall not stay or have the effect of staying the decision of the Superior Court. The costs of the arbitration and reimbursement to the other party for any and all legal fees related thereto pursuant to this Agreement, shall be borne by the losing party or in such proportions as the arbitrator shall decide. Nothing contained in this Agreement shall preclude either party hereto from seeking jUdicial relief which may not be obtainable or enforceable in, or which is in aid of, the arbitration proceedings referenced in this Section 7.12; provided that such judicial relief shall be sought in good faith and not as a subterfuge to avoid the arbitration procedures. Section 6.12. Incorporation of Attachments. The following Attachments are attached to and incorporated in this Aqreement, and sooh Attachment" 0' oppliooble, _a:: ,:corporoted by ref",",,"" ie thei~ . . 1 entirety wherever reference is made in this Agreement to any such 2 Attachment, as applicable: 3 4 Attachments 5 6 I Lease 7 8 2a Legal Description 9 10 2b Map 11 12 3 Scope of Development 13 14 3a site Plan 15 16 4 Promissory Note 17 18 5 Predevelopment Costs 19 20 6 Schedule of Performance 21 22 7 Grant Deed 23 24 8 Release of Lien 25 26 9 certificate of Completion 27 28 10 Offset Statement 29 30 - 85 - ~ . . 1 ARTICLE VII 2 ENTIRE AGREEMENT. WAIVERS AND AMENDMENT 3 4 Section 7.01. Entire Aqreement. This Agreement shall be 5 executed in five (5) duplicate originals each of which is deemed to be 6 an original. This Agreement includes one hundred four (104) pages and 7 ten (10) Attachments which constitute the entire understanding and 8 Agreement of the parties. 9 lO This Agreement integrates all of the terms and conditions 11 mentioned herein or incidental hereto, and supersedes all negotiations 12 or previous agreements between the parties with respect to all or any 13 part of the Property and the development thereof. 14 15 None of the terms, covenants, agreements or conditions set 16 forth in this Agreement shall be deemed to be merged with the grant 17 deed (s) conveying title to the Property, and this Agreement shall 18 continue in full force and effect before and after such conveyance as 19 provided in Article II until issuance of any and all Certificates of 20 Completion for the entire Property. 21 22 All waivers of the provisions of this Agreement and all 23 amendments hereto must be in writing and signed by the appropriate 24 authorities of the Agency and the Developer. 25 - 86 - f . . 1 ARTICLE VIII 2 TIME FOR ACCEPTANCE OF AGREEMENT BY AGENCY AND RECORDATION 3 4 Section 8. Ol. Execution and Recordation. Following its 5 execution by the Developer and prompt delivery thereafter to the 6 Agency, this Agreement must be approved, executed and delivered by the 7 Agency to the Developer within forty-five (45) calendar days after the 8 date of signature by the Developer. In the event that the Agency has 9 not approved, executed and delivered the Agreement to the Developer 10 within the foregoing period, then this Agreement shall be deemed to be 11 of no further force or effect unless the time for such approval, 12 execution and delivery is extended by written notice from the Developer 13 to the Agency. The date of this Agreement shall be the date when the 14 Agreement shall have been approved by the Agency. 15 16 The Developer and Agency agree to permit recordation of this 17 Agreement against the Property in the Office of the County Recorder for 18 the County of San Bernardino, California. 19 20 - 87 - ~ 1 . . IN WITNESS WHEREOF, the parties hereto have duly executed 2 this Agreement as of the dates set forth below. 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 Date: (SEAL) REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO October 15. 1990 L~~y{ \ J By: Executive APPROVE AS TO PROGRAM: By: ~ lA-r-'.r. Red~;;;nt ~nacAr APPROVED AS TO FORM: j'-__ ~ ,1 i .' .', I' '-.1 h ""'-1 "tt-iit . -/..1 !i-,r- Agency Sp . Jal Counsel NEW FRONTIER COMMERCIAL PROPERTIES, INC., a California corporation Date: 10 1\7... , q 0 By: Its. C \-\All?l-AA-\..\ (All Signatures Must Be Notarized) - 88 - . STATE OF CALIFORNIA COUNTY OF SAN BERNARDINO . ) ) ss. ) On thi s ~ 5th day of October , in the year 1990 , before me, the undersigned, a Notary Public in and for said State, personally appeared KENNETH J. HENDERSON, personally known to me to be the person who executed this instrument as the Executive Director of the REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO and aCknowledged to me that the REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNAROlNO executed it. " (OF'J'ICtAL SEAL) KIMBERLY KING NOTARY PUBLIC, CALIfORNIA SAN BERNARDINO COUNTY My Commission Expires Nov. 20. 1992 ..-.-.........~.....".,.-............_.~....~- ," .r S g9-11 . i\TTACII~tENT 111'1 . NEW FRONTIER COMMERCIAL PROPERTIES, INC. uaseslBuild 10 Suil/drtJ-4-90 NFISTMT.Vivl(3) LEASE BE1WEEN "LANDLORD" AND THE BOYS MARKETS, INC. "1ENANr DATED: <1- L\ - '\ 0 90 l \ 1'") l'ENANT ~ ~ . . TABLE OF CONTENTS ARTICLE I LEASE SUMMARy...................................................... I SITE DESCRIPTION AND COVENANTS OF TITLE............. 1 CONSTRUCTION OF IMPROVEMENT ............................. 2 TERM .. ... .... ........ ....... ........... ...................... .......... ... 4 RENT... ... ........ ....... . .. .. ....... ... .... ... .... ... ... ...... ...... ...... 6 ARTICLE II ARTICLE III ARTICLE IV ARTICLE V ARTICLE VI USE......................................................................... 8 ARTICLE VII COMMON AND PARKING AREAS.................................. 9 ARTICLE VID RES T R I CTI ON S ............................................ ...... ..... ...11 ARTICLE IX REPAIRS, ALTERATIONS AND FIXTURES ......................12 TAXES.... .... ...... ........ ....... .... ......... .......... ....... ........ ..13 INSURANC E............................................................. .15 UTI L I TI E S................................................................ .18 LIENS... ... ...... .... .... ........... ....... ........... ............... .... ..18 INSPECTION BY LANDLORD ......................~.................19 ARTICLE X ARTICLE XI ARTICLE XII ARTICLE xm ARTICLE XIV ARTICLE XV ASSIGNMENT AND SUBLETTING ..................................19 ARTICLE XVI CONDEMNATION. ......... ........ ............... .................... ..21 ARTICLE XVII DEFAULT .... ... ....... ..... ...... ........................... .......... ...22 ARTICLE XVIII MORTGAGE OR ENCUMBRANCE OF LEASEHOLD IN TE RES T .................... ...................... ........... ........... .24 ARTICLE XIX QUIET ENJOYMENT. .............. ... .... .... .... ......... ... ........ ..24 SIGNS..................................................................... .24 ARTICLE XX ARTICLE XXI MEMORANDUM OF LEASE ..........................................25 ARTICLE XXII HOLDING OVER........................................................ .25 ARTICLE XXIII PA YMENTS AND NOTICES...........................................25 ARTICLE XXIV GENERAL PROVISIONS.............................................. .26 ARTICLE XXV HAZARDOUS MATERIAL..................................... ...... ..26 ARTICLE XXVI SUBORDINATION...................................................... .27 FO R CE MAJE U RE...................................................... .28 ARTICLE XXVII ARTICLE XXVIII . MISCELLANEOUS ......................................................28 EXHIBITS "A" "B" "C" DESCRIPTION OF DEMISED PREMISES SHOPPING CENTER SITE PLAN ITEMIZATION AND ALLOCATION OF LANDLORD'S CONTRIBUTION FOR THE ACQUISITION OF FIXTURES AND EQUIPMENT MEMORANDUM OF LEASE SIGN CRITERIA PYLON SIGNS DISPOSITON AND DEVELOPMENT AGR "D" "E" "E.I" "F" Le.ues/Build to Suil/drJ'}-4-90 NFJSTMT. Viva(3) \l \"'" -, ~ Cj/ ~ 1 2 3 4 5 6 7 8 9 1 0 1 1 12 13 14 15 16 17 18 1 9 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 . ( ,. LEASE TIllS LEASE is made as of the _ day of , 19_, by and between NEW FRONTIER COMMERCIAL PROPERTIES, L'<C.. a California corporation; hereinafter referred to as "Landlord," and 11ffi BOYS MARKETS. INC.. a California corporation, hereinafter referred to as "TenanL" IN CONSIDERATION of the mutual covenants and agreements herein contained, Landlord does hereby lease to Tenant. and Tenant does hereby lease from Landlord, the Demised.f7emises, to have and to hold for the term and rental hereinafter provided and upon the conditions and agreements hereinafter set forth. ARTICLE I LEASE SUMMARY The summary information concerning this Lease contained in this Article is intended for convenience only and does not modify or limit the detailed provisions in any way. A. California. Name of the Shoppin~ Center: Westside Shopping Center, San Bernardino, B. Approximate Square Feet of Demised Premises: Thiny thousand (30,000). Orilrinal Term of Lease: Ten (10) years and seven (7) five (5)-year options. C. D. OriiPnal Basic Rental (Per Lease Year): One Hundred Fifty Thousand and 00/100 Dollars ($150,000.00) Options: 11-15: 16-20: 21-25: 26- 30: 31-35: 36-40: 41-45: $150,000,00 $150,000.00 $150,000.00 $150,000.00 $150,000.00 $150,000,00 $150,000.00 Landlord and Tenant acknowledge and agree the Basic Rental for the original term and option terms is based upon an amount equal to Five Dollars ($5.00) per square foot of floor area of the Demised Premises per annum. Upon final determination of the actual square footage of the Demised Premises, Landlord and Tenant will amend the Lease concerning Basic Rental and option rental to reflect the actual square footage of the Demised Premises. E. Percentae:e Rental: The dollar amount by which two percent (2%) of Gross Sales up to an amount of Thineen Million Five Hundred Thousand and 00/100 Dollars ($13,500,000.00) and the dollar amount by which one and one-half percent (1-112%) of Gross Sales in excess of Thineen Million Five Hundred Thousand and 00/100 Dollars ($13,500,000.00) exceeds Basic Rental. ARTICLE - II SITE DESCRIPTION AND COVENANTS OF TITLE A. Demised Premises. As used herein, the term "Demised Premises" means that building and the land upon which such building is constructed, located at the northeast comer of Base Line and Medical Center Drive in the City of San Bernardino, as more particularly described in Exhibit "A" attached hereto, together with the appunenances belonging thereto, and rights of access, ingress and egress, in, to, from and over any premises, street. way or alley adjoining, abutting or adjacent to the Demised Premises or the "Shopping Center" as defined herein. For purposes of Tenant's rights, the Demised Premises are deemed to include the use of such fixtures and equipment installed by Tenant which were purchased with Landlord's contribution (as provided for in Article ill of the Lease). .1- , , " \, 'I'l'l'lANf. Lease,lBuild to Suil/drf}-4-90 NFISTMT-Viva(3) 9:< 1 -. ( . 1 B. Shoopinl: Center. As used herein, the term "Shopping Center" means that parcel of 2 land, shown on Exhibit "B" attached hereto, of which the Demised Premises form a part. and 3 which is affected by cenain provisions of this Lease. 4 5 C. Common and Parkin!! Areas. As used herein, the term "Common and Parking 6 Areas" means all areas of the Shopping Center now or hereafter intended for the common use. of 7 Tenant, its customers, employees, agents and invitees, together with other tenants of the ShopplOg 8 Center, their customers, employees, agents and invitees, including but not limited to, all of the 9 parking areas, approaches, entrances, exits, driveways, sidewalks, corridors, and open and 1 0 enclosed courts and malls, restrooms, landscaped and planted areas, exterior stairways, bus SlOpS, 1 1 taxi stands and service areas. 12 1 3 D. Site Plan. As used herein, the term "Site Plan" means the Site Plan annexed hereto 1 4 as Exhibit "B" and incorporated herein by reference, which shows the Shopping Center and the 1 5 location and size of all buildings and improvements in the Shopping Center and the layout of all 1 6 Common and Parking Areas. The Shopping Center shall maintain a minimum automobile parking 1 7 ratio of three and one-half (3.5) spaces per one thousand (1,000) square feet of building area as 1 8 shown on the Site Plan. 1 9 2 0 E. Landlord's Covenants Ree-ardinf: Title. Landlord and Tenant acknowledge and 2 1 agree that the effectiveness of the Lease is conditioned upon Landlord acquiring title to the 22 Shopping Center. In the event Landlord fails to acquire such title on or before July I, 1992, this 23 Lease shall automatically terminate and be of no further force or effect. Upon acquiring title to the 24 Shopping Center, Landlord shall, at its expense, provide Tenant with an ALTA leasehold title 25 policy in form, substance and endorsements reasonably satisfactory to Tenant issued by a title 26 insw-ance company reasonably acceptable to Tenant and Landlord showing fee title to the Shopping 2 7 Center in Landlord and leasehold title to the Demised Premises in Tenant. Landlord shall pay a 28 maximum of Two Thousand Dollars ($2,000.00) for any endorsements Tenant requires for such 29 AL TA leasehold title policy. Any additional endorsements shall be at Tenant's sole cost and 30 expense. 31 3 2 F. Phase II. If Landlord acquires Phase II of the Shopping Center, all restrictions and 33 exceptions shall apply if Phase II is used only for the construction, operation and maintenance of a 3 4 shopping center business. 35 36 ARTICLE ill 37 38 CONSTRIJCTION OF IMPROVEMENT 39 40 A. Plans and Specifications. Landlord agrees that it shall clear the Demised Premises 4 1 of existing improvements, if any, at no expense whatsoever to Tenant, and that it shall thereafter 42 construct thereon a building for Tenant's use and occupancy, including an automatic sprinkler 43 system for Tenant's building, meeting all of the standards of the Fire Insw-ance Rating Authority 44 having jurisdiction, all in accordance with plans and specifications to be prepared at Landlord's 45 expense by James E. Cary, Architect, or another licensed architect and engineer who shall be 46 approved by Tenant and Landlord prior to commencement of plans and specifications, which 47 approval shall not be unreasonably withheld. Said plans and specifications for the complete 48 building are to be approved by Landlord and Tenant in writing. The written approval of both 4 9 parties must be given prior to either party having any obligation under this Lease. 50 5 1 The cost of such plans and specifications shall be included as part of the costs of 5 2 construction with Landlord's maximum contribution for construction of the Demised Premises, not 53 to exceed Nine Hundred Sixty Thousand Dollars ($960.000.00). Further, Landlord shall 54 contribute a maximum amount up to the sum of Nine Hundred Thousand Dollars ($900,000.00) 5 5 for Tenant's fixtures and equipment to be installed within the Demised Premises, such fixtures and 5 6 equipment shall be for the purpose of Tenant's operation as a supermarket. Title to such fixtures 57 and equipment shall vest with Landlord. Such contribution shall be placed in escrow and 58 disbursed upon Tenant's submission to escrow of invoices for payment. Tenant shall execute all 59 necessary documents for Landlord in order to vest title of such fixtures and equipment with 60 Landlord. Landlord and Tenant shall reasonably approve the plans and specifications for the 6 1 construction of the Demised Premises no later than one hundred twenty (120) days after the date 62 of this Lease. In the event Landlord and Tenant fail to reasonably approve such plans and 63 specifications within such one hundred twenty (120) day period, then both Landlord and Tenant 64 shall have an additional thirty (30) days from the expiration after such one hundred twenty (120) 65 day period to provide their reasonable approval. During such thirty (30) day period, if either party 6 6 disapproves of such plans and specifications, then the disapproving party shall provide to the other 6 7 reasonably detailed information as to the specific nature of the disapproval. In the event Landlord 68 and Tenant are unable to agree on acceptable revisions to the plans and specifications within -2- w '\ I"; LeaseslBuild to Suil/drr.l-4-90 NFISTMT-Viva(3) , , WiANT ( 93 . ~ le 1 thirty (30) days following disapproval by the disapproving pany, either Landlord or Tenant can 2 terminate this Lease upon thirty (30) days' written notice to the other Pany. In ~e event of a 3 termin::tion or expiration of the Lease in accordance with any terms of the Lease, the otle to all such 4 fixtures and equipment purchased with Landlord's contribution of Nine Hundred Thousand 5 Dollars ($900,000.00) shall vest with Landlord, and such fixtures and equipment shall remain 6 upon the Demised Premises after Tenant's vacation of the Demised Premises. Landl~r~ and 7 Tenant agree that the itemization and allocation of Landlord's contribution for the acqulS1o.o~ o,~ 8 such fixtures and equipment shall be listed upon and scheduled as proVIded for on Exhibit C 9 attached hereto and incorporated herein by this reference. 10 1 1 Further, Landlord and Tenant agree that the cost of condensors to be installed in the 1 2 Demised Premises shall be allocated equally between Landlord and Tenant Tenant's fifty percent 1 3 (50%) allocation of such cost shall be provided from the Nine Hundred Thousand Dollars 1 4 ($900,000.00) of Landlord's contribution. 15 1 6 In the event the total cost to construct the Tenant's improvements pursuant to 1 7 Landlord's and Tenant's approved plans exceeds Nine Hundred Sixty Thousand Dollars 1 8 ($960,000.00), then Landlord may at its option elect to terminate the Lease by providing Tenant 1 9 written notice of Landlord's election. Such election shall be made by Landlord within the first 20 sixty (60) days following the determination that such total cost exceeds Nine Hundred Sixty 2 1 Thousand Dollars ($960,000.00). However, Tenant may elect to vacate Landlord's election to 22 terminate the Lease by providing Landlord with written notice that Tenant shall pay to Landlord the 23 excess cost of constructing such improvements. Tenant shall provide Landlord such written 24 notice. if at all, within the first thirty (30) days following Tenant's receipt of Landlord's notice of 25 termination. Tenant shall pay to Landlord the excess in cash on a progressive payment schedule 26 reasonably prepared by Landlord. Tenant shall pay for, at its sole cost and expense, any additional 27 costs which arise solely by reason of written change orders or requests for revisions from Tenant 28 after the plans and specifications have been mutually agreed upon by Landlord and Tenant Such 29 total costs shall include the actual costs for the subcontractor and material plus fifteen percent 30 (15%) of such costs. 31 32 Tenant acknowledges that an affiliated entity of Landlord shall construct the 3 3 Demised Premises. The cost of construction of the Demised Premise shall include reasonable 34 profit and overhead for such entity. 35 3 6 B. Time for Construction bv Landlord. Landlord, as soon as reasonably possible after 37 the execution of this Lease and the approval of plans and specifications by the panies, shall 38 commence the construction of said building and Common and Parking Areas and diligently 39 prosecute to completion the construction thereof on the entire Shopping Center so that substantially 40 all thereof shall be ready for use at the time of the commencement of the term of this Lease. No 4 1 delay in completing said building, or said Common and Parking Areas which is caused by 42 governmental regulations, inability to procure labor or materials, strikes, act of God, or other 43 causes (other than financial), similar or dissimilar. beyond the control of Landlord, shall be a basis 44 for a claim of lack of diligence on the pan of the Landlord. Should construction of said Demised 45 Premises not be commenced on or before July I, 1992 (which times shall, however be extended 46 by the number of days prior thereto during which Landlord has been prevented by causes beyond 47 its control from commencing construction of the Demised Premises), Tenant or Landlord may 48 terminate this Lease and all of its obligations hereunder by notice given as hereinafter provided. 49 Landlord shall provide water, sewer, gas, electrical and other utilities necessary for Tenant's use of 50 the Demised Premises. Landlord or Landlord's contractors shall pay all utility "hook-up" fees 5 1 necessary to be paid in order to bring and initiate service of all utilities to the Premises. 52 53 C. Preoaration for Fixtures. Landlord anticipates that the Demised Premises shall be 54 sufficiently completed on or before December 20, 1991 so as to allow Tenant to install fixtures 5 5 and equipment into the Demised Premises. Landlord anticipates that the following items shall be 56 completed by said date, all in strict accordance with the aforesaid plans and specifications: all 57 electric lights and power necessary for use of equipment shall be installed; sprinkler system in the 58 Demised Premises and air conditioning system in said building shall be complete and totally 59 operational; building shall be weather-tight and secure; and receiving areas shall be paved. 60 61 D. Governmental Rel!:Ulations. Landlord agrees that compliance with the governmental 6 2 regulations controlling said building, the Shopping Center and this Lease shall include but not be 6 3 limited to full compliance with the Subdivision Map Act, if applicable. 64 65 E. Alteration of Shoooinl! Center. Landlord shall not at any time add structures to the 66 Shopping Center or alter the location and size of buildings and improvements and Common and 67 Parking Areas within Tenant's "Control Area" from the way in which such items are shown on the 68 Site Plan without the prior approval in writing of Tenant, which approval shall not be unreasonably -, -3- i / Leases/Iluild to Suit/drl9-4-90 \~ NF/STMT-Viva(3) 'JEl'IlANr 9r ~ 1 2 3 4 5 6 7 8 9 10 1 1 12 13 14 15 1 6 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 -. ( . withheld or delayed. However, Tenant acknowledges that. except for Tenant's :'ConO"OI ~a" and "Building Restriction Area", as shown on the Site Plan, Landlord may, m Landlord s sole discretion, change the shape, size. location. number and extent of any improvements shown on the Site Plan. F. Tenant's Pre-Term Entrv. Tenant shall have the right, rent ~ee,of entering the Demised Premises for the purpose of installing its store and trade fixtures, stonng Its fIrstllems of equipment and inventory, and otherwise preparing the Demised Premises for Tenant's occupancy prior to the Commencement Dare. When the performance of Landlord's work has proceeded to the point where T~nant can commence any portion of its work in the installation of Tenant's trade fIxlUre~, fUffillll!e, equipment and inventory in the Demised Premises, in accordance with good constructton practtce and adequate security of the Demised Premises, Landlord shall notify Tenant to that effect. Tenant agrees to install its trade fixtures, equipment, furniture and inventory in the Demised Premises in a prompt and expeditious manner so as not to delay Landlord in readying the Demised Premises for occupancy at the earliest possible date referred to hereinabove. Except for the obligation to pay rent, Tenant's occupancy of the Demised Premises prior to the Commencement Date hereof shall be subject to all of the tenns, covenants, and conditions of this Lease. Tenant shall indemnify and hold Landlord harmless from any claim, action, injury or damage caused by Tenant's entry into the Demised Premises prior to the Commencement Date of the Lease. G. Acceptance Subiect to Punch List. Tenant agrees to accept the Demised Premises in the condition existing on the date of the commencement of the term, subject to Tenant's list of defective items (hereinafter, the "Punch List") being completed. In the event of Landlord's failure to correct and complete the items on the Punch List within sixty (60) days after receipt by Landlord of the Punch List, or in the event that the nature of such items on the Punch List requires more than sixty (60) days to complete and Landlord fails to commence such repairs within such sixty (60) day period, Tenant may, at Tenant's sole option, complete the Punch List items and Landlord shall reimburse Tenant the reasonable cost of such items. Landlord covenants that the Demised Premises to be constructed shall, at the commencement of the term hereof and subject to Tenant's Punch List being completed, be structurally sound and in good tenantable condition and that there shall be no latent defects therein. A "latent defect", as used herein, is a defect which is a material departure from plans and specifications not apparent upon an ordinary and reasonable inspection by a professional engineer qualified to make such inspection, normal wear and tear accepted. Landlord further covenants that if any latent defects appear that such latent defects existed at the beginning at the term hereof, or resulted from faulty design, workmanship or materials, then Landlord shall cause the same, after receiving wrinen notice thereof from Tenant, to be repaired and corrected within a reasonable period and time at Landlord's expense. Tenant shall have the benefIt of all warranties accruing to the Landlord by reason of construction of the Demised Premises and any installation of equipment thereon. ARTICLE IV TERM A. Commencement Date. The Commencement Date shall occur upon the satisfaction of all of the following conditions: (1) The delivery to Tenant of a cenificate by the architect employed on the project certifying that the erection of the building and the Common and Parking Areas has been in , full and complete compliance ~th the plans and specifications; ( (')'\, (2) The dehvery to Tenant of a final Certificate of Occupancy from th~~J governmental body or bodies having jurisdiction of the Demised Premises respecting Tenant's '-j> occupancy of the Demised Premises; provided, however, that this condition (t) shall not be i ' deemed unsatisfied.if Ten~t'~ inability to obtain such final.Certificate of Occ~pancy ~sults from a X " cause or causes entn'ely WIthin the control of Tenant; proVIded further that thiS condition (2) shall ~,\ 'I l be deemed satisfied by the delivery to Tenant of a temporary Certificate of Occupancy so long as \:::Y/ Landlord diligently prosecutes to completion all items necessary to obtain a final Certificate of Occupancy and does obtain same; (3) The concurrent or previous opening for business of other tenants occupying at least twenty-one thousand (21,000) square feet of additional buildings; and -4- ~ r " \') . TENANI' LeaseslBuild to Suir/drl9-4-90 NfJSTMT.Viva(3) 95 1 2 3 4 5 6 7 8 9 10 1 1 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 '. , (. (4) The completion of the Demised Premises and the Common and P:J.rking Areas. The Demised Premises and the Common and Parking Areas shall not be considered complete until they are substantially complete in every respect. For the purposes of ~IS Lease "substantially complete in every respect" shall mean complete except,for those llems.1isted on a mutually-agreed to Punch List, as herein-above defined, none of which Punch List Items shall materially interfere with or impair Tenant's use of the Demised Premises or Tenant's a~cess to the Demised Premises in order to install its trade fixtures and equipment, or Tenant's ability to open the store for business to the public. In the event Tenant opens for business in the Demised Premises prior to the satisfaction of such conditions in Article IV(A)(I) through (4), the term of the Lease and Tenant's obligation to pay Basic Rental, Percentage Rental and all other charges shall commence. The Tenant shall accept delivery of the Demised Premises and will, as soon thereafter as possible, open its store therein for business. Tenant will be allowed to enter into the Demised Premises for the purpose of installing fixtures into said Demised Premises and to install Tenant's stoCk-in-trade but such entry shall not constitute an acceptance of delivery of the Demised Premises by Tenant The term of this Lease shall commence at 12:01 a.m. on the day upon which Tenant opens its store on the Demised Premises for business, which day shall be referred to as the "Commencement Date." B. OriiPnal Term of Lease. The original term of this Lease shall be ten (10) years, commencing on the Commencement Date and ending on the last day of the one hundred twentieth (l2Oth) consecutive full calendar month thereafter. Gross Sales Termination. In the event that Tenant's Gross Sales (as defined in Section V.C) during the fifth (5th) year of the Lease do not exceed Founeen Million Three Hundred Thousand Dollars ($14,300,000.00) for such Lease year, then Tenant may elect to terminate the Lease. Such election to terminate the Lease shall be exercised by Tenant within the first ninety (90) days following the expiration of the fifth (5th) year of the Lease by providing written notice of such pany's intent to terminate the Lease to the Landlord, then the effective date of such termination shall be within ninety (90) days of such notice. In the event that Tenant does not elect to terminate the Lease within such ninety (90) day period, then Tenant shall be deemed to have irrevocably and unconditionally waived such termination right C. Option to Renew Lease. (I) Tenant shall have the right to extend the term of this Lease upon the same terms, covenants. and conditions as herein contained, and at the same rental as hereinafter reserved, for seven (7) additional consecutive periods of five (5) years each from and after the expiration date hereof, by giving Landlord notice in writing at least ninety (90) days, but no more than one hundred eighty (180) days, prior to such expiration date, and prior to.each such extended expiration date, notifying Landlord of Tenant's intention to so extend said term, provided, however, that in the event that Tenant fails to give such notice of extension. Tenant shall not be deemed to have waived the right to that extension or any extension thereafter until Landlord gives Tenant written notice of Tenant's failure to exercise such right of extension and affords Tenant a period of ten (10) days after receipt of such notice to exercise that right of extension by giving Landlord written notice thereof; provided. however, if the Lease is not in effect on the date of giving notice to exercise an option. such notice shall be null and void. If the Lease is not in effect on the date preceding the Commencement Date of an extended term. the extended term shall not commence. and the Lease shall expire at the end of the original term. Further. provided that if Tenant is in material default under any of the terms and conditions of the Lease beyond the cure period provided in this Lease on the date of giving written notice to exercise an option, such notice shall be null and void and have no effect. If Tenant is in material default beyond the cure period provided in this Lease on the date preceding the Commencement Date of an extended term, the extended term shall not commence and the Leaseashall expire at the end of the ori ginaltertn. (2) Whenever Tenant shall be prevented in whole or in pan from the free, uninterrupted. and unimpeded enjoyment of the use of the Demised Premises and the fixtures therein by reason of default of the Landlord. or by reason of Landlord's making any repairs, alterations. extensions, or additions to the Demised Premises or the building of which the same are a pan, or by reason of condemnation, or by reason of any casualty, or by reason of eminent domain proceeding. or by any labor difficulty, or any taking or repair occasioned thereby, or by any other reason beyond the control of Tenant, then. and in each and all such cases, Tenant shall .5- LJ~ ., (" .., TI:NANT LcoseslBuild to Suil/drJ')-4.9Q NFISTMT -Vi_ a(3) ft, \\Y~ r . ( ;e 1 have the right of extension (as hereinafter defmed), which right shall be cumulative ~d additio~al 2 to any other rights given in such cases by this Lease or the law. The nght of extensIOn shall give 3 Tenant the option (to be exercised at least ninety (90) days before the conclusion of the term) to add 4 any such period or periods of loss of such enjoyment, or the aggregat~ of all such. per:ods, to the 5 term of this Lease and to extend the same to January 31 next followmg the temunauon of such 6 period or periods or aggregate thereof. If any of the matters and things en~era~ed in the fI~st 7 sentence of this Paragraph C.2 occur duriJ?g the last year of the term an~ matenally mte~eres :-VI:J1 8 Tenant's enjoyment of the Demised Prenuses, ~e~ant may temunate this Lease at ~y orne Wlthm 9 thirty (30) days after such interference by proViding Landlord WIth thirty (30) days pnor wntten 1 0 notice. 1 1 1 2 Landlord shall assign to Tenant all warranties which are assignable with 1 3 regards to the fIxtures and equipment purchased with the conoibution by Landlord, as referenced 1 4 in Article ill. 15 1 6 It is further agreed that Tenant shall have the right, at its sole option, to 1 7 extend this Lease for an additional term of such length that the remainder of the term hereof, after 1 8 giving effect to such extension, shall be one (1) year, if necessary, to permit reconstruction and 1 9 repair of the Demised Premises after its damage or destruction, in accordance with the provisions 20 of Article XI (0) hereof. Any election to extend made pursuant to the immediately preceding 2 1 sentence shall not diminish Tenant's right to exercise any theretofore unexercised rights of 22 extension contained in Article IV (C) of this Lease. 23 24 25 ARTICLE V 26 2 7 RE.liI 28 29 A. Lease Year: "Lease Year" means Tenant's fIscal year for fmancial reponing 3 0 purposes, or so much of a fiscal year as is within the term of this Lease. 31 32 B. Basic Rental. Tenant shall pay to Landlord as "Basic Rental" for the Demised 33 Premises One Hundred Fifty Thousand and 00/100 Dollars ($150,000.00) per Lease Year. 34 Should any Lease Year be less than 365 days, such as at the beginning or the end of the lease term, 3 5 the Basic Rental shall be proportionately reduced. Landlord and Tenant acknowledge and agree the 3 6 Basic Rental for the original term and option terms is based upon an amount equal to Five 37 Dollars ($5.00) per square foot of floor area of the Demised Premises per annum. Floor area shall 3 8 be defined by measuring from the outside of the exterior walls of the Demised Premises, exclusive 3 9 of any mezzanines. so long as such mezzanines are not used for retail sales area. Upon fInal 40 determination of the actual square footage of the Demised Premises, Landlord and Tenant will 4 1 amend the Lease concerning Basic Rental and option rental to reflect the actual square footage of 4 2 the Demised Premises. 43 44 45 C. Percenta~e Rental. In addition to the Basic and Additional Rental as provided in 46 Paragraphs B and D herein, Tenant shall pay to Landlord for each Lease Year a "Percentage 47 Rental" which is defIned as the amount, if any, the dollar amount by which two percent (2%) of 48 Gross Sales up to an amount of Thirteen Million Five Hundred Thousand and 001100 Dollars 49 ($13,500,000.00) and the dollar amount by which one and one-half percent (1-1/2%) of Gross 50 Sales in excess of Thirteen Million Five Hundred Thousand and 001100 Dollars ($13,500,000.00) 5 1 exceeds Basic Rental. 52 53 "Gross Sales" as used in this Lease shall mean the amount of the sales price, 54 whether or not for cash or upon credit. of all merchandise sold on or from the Demised Premises 5 5 by TenanL There shall be excluded or deducted from Gross Sales the following: 56 57 (1) the amount of any federal, state or local tax in respect of any sales whether 58 or not such tax is collected from customers, or absorbed by, or charged to, or paid by, Tenant or 59 any subtenant or concessionaire of Tenant, regardless of the time when such tax is paid; 60 6 1 (2) the sales price of merchandise returned by customers, the sales price of 6 2 merchandise paid for by wonhless checks and allowances or refunds made to customers for 63 merchandise or services claimed to be defective or unsatisfactory, not to exceed two percent (2%) 64 of Gross Sales in any Lease year. In the event Tenant collects such sums previously excluded 6 5 from Gross Sales, Tenant shall include such sums in the Lease year in which they were collected; 66 67 (3) the amount allowed on all merchandise returned or traded-in by customers 6 8 for credit or the amount of credit for discounts and allowances made in lieu of acceptance thereof; .6- ~ ') , "'-) Leases/Build to Suit/drfJ-4-90 NF/STMT.Viva(3) TENANr I "f~ i 97 1 2 3 4 5 6 7 8 9 10 1 1 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 c. . (4) all interest, service or sales carrying charges or other charges, however denominated, paid by customers for extension of credit on sales where not included in the merchandise sales price; (5) all merchandise returned to suppliers, shippers or manufacturers or transferred to another store or to a warehouse owned by Tenant or affIliated with Tenant; (6) all charges for cashing checks, the issuance of money orders, paying utility bills or like services rendered for the convenience of customers; (7) all sums and credits received in settlement or payment of claims made by Tenant (or any subtenant or concessionaire of Tenant) against others for loss of or damage to merchandise; ~ ",4_,'e~ I i/~j;E~ c;;fr!~5 t.<~T ?l'Y ~c.r""" ,r (8) all receipts from coin-operated devicef which may be placed in the Demised 1"\ - _ Premises for the convenience or amusement of customers, such as scales, postage stamp " , dispensers, gumball machines, change-makers and other similar devices, but not for the sale of ^,:. /' food or beverages or the customary merchandise of Tenant; i ~~/ (9) the net amount of any discounts allowed to any charitable inStitutio~,". organization, or allowed to any customer pursuant to any customary and reasonable policy ado~t~\ : ::-; . by Tenant, including, but not limited to, the net cost to Tenant of or resulting from the issuance to. \ \ ~ , .: customers of trading stamps or other evidence of purchase for immediate or future exchange for "~___=> merchandise or other things of value; merchandise or other things of value issued in redemption of such trading stamps or other evidence of value or as a premium or otherwise in connection with a sales promotion program. The net amount of any discounts allowed to any charitable institution or organization shall not exceed two percent (2%) of Tenant's Gross Sales in any calendar year; (10) all deposits made by customers on returnable containers; (11) all proceeds of sales of banana boxes, merchandise crates and containers, and waste suet, bones, fat, meat scraps and meat and produce offal, where such sales are made to commercial users, as distinguished from retail customers; (12) all charges made by Tenant for parcel post or other delivery charges, gift boxes or gift wrapping of merchandise purchases, and for other similar miscellaneous items or services which are not generally considered to be merchandise or services sold or delivered by Tenant for a profit; (13) the selling price of any trade fixtures or equipment located on the Demised Premises which may be sold by Tenant or any subtenant or concessionaire of Tenant; (14) payments received by Tenant at the Demised Premises on orders taken and filled from locations other than the Demised Premises; card issuer; (15) money-off coupons and vendor coupons; (16) bulk transfers as defined in the Uniform Commercial Code; (17) credit card sales shall include only the actual amount received from the credit (18) lottery tickets; and (19) sales of cigarettes and other tobacco. Landlord acknowledges that Tenant has made no representation or warranty with respect to its business or the anticipated volume of Gross Sales. Nothing contained herein shall result in the creation of any fiduciary relationship between Landlord and Tenant or result in any implication that Landlord has or shall acquire any interest in Tenant's business. It is understood that Tenant may be involved in other activities at other locations. In this respect. it is not intended that any gross sales or other provisions of this Lease shall apply to the business activities of Tenant or of any assignee or sublessee of Tenant at other locations, but shall apply only to the business conducted on the Demised Premises. whether conducted thereon by Tenant or by an assignee or sublessee of Tenant. -7- \~~ , " LeaseslBuild to Suit/drl'}-4-90 NFf.)TMT - Vi..(3J n:NAi'IT 9&' 1 2 3 4 5 6 7 8 9 10 1 1 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 '. ~ . D. Additional Rental. Tenant shall be responsible for the payment (of additional rent) for the following items: (I) a pro rata share of Common and Parking Area expenses pursuant to Article VII; (2) taxes assessed on the Demised Premises pursuant to Article X; (3) pretnlums on casualty insurance on the Demised Premises pursuant to Article XI; (4) all other sums of money or charge required to be paid pursuant to the terms of the Lease. E. Time And ~anner Of Payment (I) The Basic Rental to be paid as provided for ~ Paragraph B al>?ve shall be paid thiny (30) days after the Commencement Date and thereafter UI equal monthly U1stallments throughout the term of this Lease in advance on the first day of each calendar month. In the event that thiny (30) days after the Commencement Date is on a day other than the .first day of a calend~ month. the rental shall be prorated on the basis of the actual number of days UI such month. If ~s Lease is terminated eff~tive as of a day other than the last day of a calendar month, the BasIC Rental for the last partial calendar month of the term thereof shall be prorated on the basis of the actual number of days in such month. (2) Within ninety (90) days after the close of each Lease Year, Tenant shall furnish to Landlord a detailed statement, certified by Tenant to be true and correct, showing the total Gross Sales during such Lease Year and calculation of the Percentage Rental, if any. due for such Lease Year computed in the manner set fonh in Article V, Paragraph C, hereinabove. Tenant shall concurrently with the delivery of such statement pay to Landlord the Percentage Rental for such Lease Year. F. Books and R~ords. Tenant covenants and agrees to keep true and accurate books and records showing all r~eipts derived by it from Gross Sales on the Demised Premises, and to require its subtenants and concessionaires to keep and maintain like books and r~ords. Said books and r~ords shall at all reasonable times be subject and open to the inspection, examination and audit by Landlord, or any duly authorized representatives thereof, during the regular business hours of Tenant at the principal office of Tenant; provided, however, that Landlord shall have no right to conduct more than one such inspection and examination consuming no more than three (3) consecutive business days in any given period of one year. In the event that any such inspection and examination discloses that Tenant has paid an incorr~t amount of Percentage Rental for the period covered by said inspection and examination, the difference between the correct amount and the amount of Percentage Rental theretofore paid by Tenant shall be paid immediately by Tenant to Landlord or by Landlord to Tenant. In the event that any such insp~tion and examination discloses that Tenant has understated its Gross Sales by an amount in excess of two percent (2%) of such Gross Sales, and in the furrher event that a correct statement of Tenant's Gross Sales would have resulted in the payment of Percentage Rental or additional Percentage Rental, Tenant shall pay Landlord's reasonable expenses actually incurred in connection with said inspection and examination. If Landlord does not object in writing to any statement of Gross Sales within two (2) years after Tenant's rendition thereof, such statement shall be conclusively presumed to be corr~t. Tenant shall maintain its books and r~ords concerning its Gross Sales for a period of at least two (2) calendar years following the close of each calendar year. Landlord shall not divulge any Gross Sales figures pertaining to the Demised Premises but shall keep the same strictly confidential, except as may be necessary for the enforcement of Landlord's rights hereunder. ARTICI.F. VI l!.S.E During the first five (5) years of the term of the Lease, Tenant shall use the Demised Premises solely for a retail supermarket described in the Lease. Tenant shall not use or permit the Demised Premises to be used for any other purpose or purposes without the prior written consent of Landlord. Tenant covenants and agrees that it will not use or suffer or permit any person or persons to use the Demised Premises or any party thereof for conducting therein a second hand store, auction, distress or fire sale or bankruptcy or going-out-of-business sale or for any purpose or use in violation of the laws of the United States of America or the laws. ordinances. regulations and requirements of the State, County and City wherein the Demised Premises are situated. Subject to Landlord's repair and maintenance obligations in Article IX(A), Tenant furrher covenants and agrees that during the term hereof, the Demised Premises and every part thereof shall be kept by Tenant in a clean and wholesome condition, free of any obj~tionable noises. odors or nuisances and that all health and police regulations shall in all respects and at all times be fully complied with by Tenant Subj~t to any contrary provisions of the Lease, Landlord agrees that nothing in this Lease shall be construed as compelling or requiring Tenant to operate any particular type of business or to -8- wQ 1 , Leues/lluild to Suil/drl9-4-90 NF}STMT.Vi,"(3) 1FNANf 91 'Y 1 2 3 4 5 5 7 8 9 10 1 1 12 13 14 15 15 17 18 19 20 21 22 23 24 25 25 27 28 29 30 31 32 33 34 35 35 37 38 39 40 41 42 43 44 45 45 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 58 ~. ( . keep the store in or upon the Demised Premises open for business; and subject to any contrary provisions of the Lease, Tenant shall have the privilege of closing said store at any time, provided Tenant shall continue to pay the minimum monthly rental as set forth in this Lease and otherwise comply with the terms and conditions herein contained. After the fIfth (5th) year following the Commencement Date, Tenant may elect to change the use of the Demised Premises after written notice to Landlord. After receipt of Tenant's notice, Landlord may elect to recapture possession of the Demised Premises and terminate the Lease and release Tenant from the funher obligations and liabilities under the Lease. Further, after the fifth (5th) year following the Commencement Date, Tenant may close for business in the Demised Premises, subject to the conditions contained herein. Tenant may exercise such right by providing Landlord twelve (12) months' prior written notice of Tenant's election to close; within such twelve (12) month period. Landlord may elect to terminate the Lease and recapture possession of the Demised Premises and release Tenant from the further obligations and liability under the Lease. In the event Landlord does not exercise its right to recapture the Demised Premises, Tenant's obligation to pay to Landlord all Basic Rental and other charges shall continue to the expiration of the term of the Lease. Tenant covenants and agrees that it shall in good faith open for business in the Demised Premises the type of business as provided for in the Lease and this Article VI. After opening for business in the Demised Premises, it will continuously operate and conduct therein the business which it is permitted to operate under the provisions hereof for five (5) years from the Commencement Date, except while the Demised Premises are untenantable by reason of fire or other casualty. Tenant shall use its prudent business judgment to advertise and promote its business in the Demised Premises. Tenant shall remain open for business during normal supermarket business hours within the geographical area of the Demised Premises, but in no event less than twelve (12) hours per day. ARTICLE VII COMMON .\ND P.\RKING AREAS A. Grant of Ri Q'hts bv Landlord. Landlord hereby grants to Tenant, its concessionaires, customers, employees, agents and invitees, without charge, the right to use jointly with other tenants of the Shopping Center, their customers, employees, agents and invitees, all Common and Parking Areas intended for the use of the foregoing parties as defined hereinabove. Landlord warrants and agrees never to impose charges for parking or for other use of the Common and Parking Areas. Throughout the term of this Lease, Landlord shall (I) not permit any building, other improvement or permanent barrier to be constructed within the Tenant's "Control Area" without the prior written consent of Tenant, which shall not be unreasonably withheld or delayed; and (2) use its best efforts to require all tenants and other occupants of the Shopping Center and their employees to park their automobiles or other vehicles in that portion of the Common and Parking Areas designated by Landlord from time to time for such purpose on the Site Plan. B. Common and Parkin ~ Area Maintenance. Landlord shall, during the term of this Lease, maintain or cause to be maintained the Common and Parking Areas and adjoining public parkways in good condition and repair with adequate lighting, with all paving and surface areas in level and smooth condition, evenly covered with a surfacing material of equal or superior quality to the kind originally installed thereon. with parking areas therein properly designated and painted with directional signs and striping and in a clean condition free from debris and accumulation of trash. Landlord shall promptly repair any damage, destruction or deterioration to the Common and Parking Areas from any cause whatsoever at all times during the term. Landlord's obligations hereunder shall include, but not be limited to, the following: (1) Removal of all papers, debris, dirt and refuse as often as necessary; (2) Thorough sweeping of parking areas by mechanical sweeper as often as necessary; (3) Steam cleaning sidewalks as often as is necessary; (4) Maintenance of lights and light standards; .9- 'J \"-> / lCNANT LeueolBuild to Suit/drl9-4-90 NFt.ITM'f. Viva(3) I /00 1 2 3 4 5 6 7 8 9 1 0 1 1 12 1 3 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 (-. . (5) Lighting of all Common and Parking Areas during the hours of darkness until one (I) hour after Tenant shall close from time to time; (6) Maintenance, care and replacement of shrubbery and other landscaping upon the Shopping Center and adjoining parkways; and (7) Supervision of the Common and Parking Areas. (8) Shopping center signs; resurfacing, restriping of the Parking Area; repainting; maintenance repair and replacement, when necessary, of sidewalks, curbs a~d bumpers; operation, maintenance and repair of any common fIre protection systems; automauc landscape sprinkler systems and storm drainage systems; propeny taxes; insurance which .is adequate to protect Landlord and Tenant against liability for injury to or death of any person ill connection with the Common and Parking Areas. (9) Security of the Common and Parking Areas, if agreed to by Landlord and Tenant to be necessary. Landlord makes no warranty or representation as to the safety and security of the Shopping Center. C. Pa.yment bv Tenant of Common and Parkin~ Area Costs. (1) Tenant agrees that, following the Commencement Date and during the balance of the term of this Lease, Tenant will pay monthly, along with Basic Rental, its propottionate share of the costs of operation, maintenance, insurance, repairs and replacements and real estate taxes and assessments in respect of Common and Parking Areas of the Shopping Center. (2) Tenant's propottionate share of the Common and Parking Area costs shall be the ratio of the total floor area of the Demised Premises, excluding the loading dock, truck ramp, truck well, and mezzanine, divided by the total floor area of all buildings, excluding mezzanines so long as such mezzanines are not used for retail sales, existing or to be constructed in the Shopping Center as shown on the Site Plan (Exhibit "B "). Landlord and Tenant agree that any addition or deletion in the existing total floor areas will result in a reassessment of Tenant's propottionate share of the Common and Parking Area costs. (3) Landlord shall expend only the monies reasonably necessary for the operation, maintenance, repairs, replacement, insurance and taxes of the Common and Parking Areas of the Shopping Center and shall operate the same on a nonprofit basis to the end that those expenses will be kept to a minimum. Capital expenditures and equipment purchased by Landlord which are used solely at the Shopping Center, if applicable, shall be amottized on a straight line basis by Landlord. Landlord shall be entitled to reimbursement of reasonable out of pocket overhead and management fees not to exceed ten percent (10%) of the total Common and Parking Area costs (exclusive of taxes, insurance and security personnel and exclusive of individual items of expense greater than Three Thousand Dollars [$3,000.00] which are not regularly incurred, such as the replacing and restoring of curbing, walkways, paving, striping, and utility lines), but Tenant shall not be obligated to reimburse Landlord in respect to Landlord's expenses for offIce overhead, bookkeeping, salaries of clerical, administrative, or other personnel, or equipment or personal propeny taxes on equipment or propeny not substantially used in connection with the operation, maintenance or repairs of the Common and Parking Areas. Landlord may cause any or all of said services for the Common and Parking Areas to be provided at market rates. (4) Landlord shall, prior to entering into any agreements or contracts respecting the operation, maintenance, insurance or repairs of the Common and Parking Areas, which shall involve a yearly expense exceeding $5,000.00, submit such agreements or contracts to Tenant for Tenant's reasonable approval or disapproval. If Tenant does not approve such agreements within five (5) days, then such agreements shall be deemed approved. (5) Intentionally Omitted. (6) Landlord agrees to keep and preserve separate and complete books of account covering the costs and expenses of maintaining and operating the Common and Parking Areas, and to preserve for at least three (3) years after the close of each Lease Year all vouchers, invoices, statements, payroll records and other papers evidencing the costs of such maintenance and operation. Once per year, authorized agents of Tenant shall have the right at any reasonable time to inspect and audit the books and other documents mentioned above evidencing such costs. At the end of each Lease year during the lease term, Landlord shall deliver to Tenant a written statement evidencing Tenant's proportionate share of the expenses of such maintenance and operation during such immediately preceding year. Should it be detennined by any audit that any .10- 'f~ , LeueslBuild to Suitldrl9-4-90 NFISTMT. Viva(3) '7 -) n::NANf lot I (e . 1 bill or bills previously submined by Landlord to Tenant were inaccurate. the panies shall make an 2 adjustment to reflect the actual expenses for the period covered by such inaccurate bill; provided. 3 however. that no such adjustment shall be made for any inaccuracy discovered more than two (2) 4 years after the close of the Lease Year to which the statement relates. S 6 D. Insurance. Landlord shall maintain general public liability insurance against claims 7 for bodily injury. death, or propeny damage occurring upon, in or about the Common and Parking 8 Areas. Such insurance shall afford protection to the limit of Two Million Dollars ($2.000.000.00) 9 combined single limit. Such insurance shall name Tenant as an additional insured. Such insurance 1 0 shall be primary insurance (not excess nor contributory insurance) and no insurance which Tenant 1 1 may carry shall be required to contribute to any loss arising from the risks referred to in this 1 2 paragraph. Landlord shall cause to be issued to Tenant appropriate cenificates. of insurance 1 3 evidencing Landlord's compliance with the foregoing covenants of Landlord WIth respect to 1 4 insurance. Each of said certificates shall state that no cancellation or material change in the 1 S insurance evidenced by the particular certificate shall be made unless thiny (30) days advance 1 6 notice of such cancellation or material change shall have been given to Tenant. 17 18 1 9 ARTIC!.E VIII 20 21 RESTRrCTIONS 22 23 A. Rilihts to Sell Food. Landlord hereby grants to Tenant the exclusive right to sell in 24 the Shopping Center the following items (whether canned, fresh. frozen or smoked): groceries. 2 S meats. meat products. fish. poultry. fruits or vegetables. delicatessen products. alcoholic 26 beverages for off-premises consumption. and commercial bakery products. In addition to the 27 above. Landlord hereby grants to Tenant the nonexclusive right to sell any other items ordinarily 2 8 sold from time to time in supermarkets. Tenant shall have the specific exclusives set fonh herein 29 for such operation and each specific use. unless after Tenant has initially opened for business any 30 use is not thereafter operated for a period in excess of two hundred fony (240) days (excluding 3 1 reasonable time periods as set forth below). For example. if Tenant elects to subsequently close its 32 meat product sales. the exclusive right for meat produce sales shall terminate. The foregoing 33 restrictions do not restrict in the Shopping Center operation of a health food store which in no 34 event shall exceed one thousand five hundred (l.500) square feet in floor area. coffee. donut or 3 S sandwich shop. pizza restaurant, convenience food store/gas station (provided that the total floor 3 6 area devoted to sales area and suppon area for convenience food store items does not exceed four 37 hundred [400] square feet). or ice cream store or candy store. or prepared food operation (such as 38 hamburgers. donuts. fried chicken or fish). selling on or off-premises consumption prepared foods 39 which shall be permitted within the Shopping Center. The restrictions set fonh herein shall 4 0 terminate at the election of Landlord in the event that the Demised Premises or some pan thereof 4 1 shall not be used for such specific use for a continuous period of two hundred fony (240) days. 42 Any such two hundred fony (240) day period shall be extended by the period of any and each 43 occurrence of any strikes. labor difficulties, governmental restrictions or delays caused by or 44 resulting from fire, casualty or acts of God or non-fmancial causes beyond Tenant's reasonable 4 S control to the Common and Parking Areas. Such two hundred fony (240) day period shall not 46 apply during any period in which the Demised Premises or the Common and Parking Areas are 47 being built, rebuilt, repaired, altered, reconstructed or remodelled. 48 49 B. Operation of Food Store. Restaurants and Office Use. Subject to the provisions of S 0 Article IlIA above, Landlord covenants that it shall not permit any other tenant or occupant of the 51 Shopping Center to operate a grocery, food depanment or food store within the Shopping Center, S 2 except that the operation of a major drugstore selling only those items customarily sold at this time S 3 by such drugstores in Southern California shall not constitute a violation of this Article, even S 4 though cenain of those items are listed in Section A above, so long as such items as are 5 S customarily sold do not include (whether fresh. smoked or frozen) meat, fish, poultry, fresh fruits, 56 vegetables or delicatessen products. Landlord shall not allow any other tenant or occupant of any 57 propeny owned or subsequently acquired by Landlord located within a 2,000 foot radius of the 58 Shopping Center to operate a grocery. food depanment or food store. As used in the preceding 5 9 sentence, the terms "food store" and "food depanment" shall mean a store or department within a 6 0 store which sells any of the items described in the first sentence of Paragraph A of this 61 Article vm. Funher, Landlord covenants that, subject to the exceptions contained in this Section, 62 it shall not permit any other tenant or occupant of the Shopping Center to operate a full service sit- 63 down restaurant with tables which are waited upon ("Full Service Restaurant"). However. 64 Landlord and Tenant acknowledge and agree that concerning: 65 66 (i) Phase I of the Shopping Center, Landlord may allow the operation of one 67 (1) Full Service Restaurant. provided that such Full Service Restaurant shall (a) not be located -11- RD '\ ''''-, 1INANT LeaseslBuild to Suil/drfJ-4-90 NFmMT- Viva(3) It?;( ~~ 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 1 9 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 (e (. within a one hundred fifty (ISO) foot radius of the Demised Premises, and (b) not exceed three thousand five hundred (3,500) square feet of floor area. (ii) Phase II of the Shopping Center (if acquired by Landlord for the purpose of constructing, operating and maintaining a shopping center business, as described in Paragraph C of this Article III), Landlord may allow the operation of one (I) Full Service Restaurant, provided that such Full Service Restaurant shall (a) not be located within a one hundred fifty (150) foot radius of the Demised Premises and (b) not exceed six thousand (6,000) square feet of floor area. Nothing herein shall restrict, limit nor preclude Landlord from permitting any other tenant or occupant of the Shopping Center from operating a fast food sit-down restaurant For purposes of Phase I of the Shopping Center, Landlord covenants that it shall not pennit any other tenants or occupants in the Shopping Center to occupy a total of eight thousand (8,000) square feet of floor area for the primary purpose of business and professional office use. C. Other Uses. Landlord covenants and warrants that Phase I of the Shopping Center and any portion thereof shall be used, if at all, only for the construction, operation and maintenance thereon of retail mercantile businesses, fmancial institutions and related facilities common to retail shopping centers located in the Southern California area. The Shopping Center and any portion thereof shall not be used for warehousing (other than the temporary storage of fixtures and equipment by an occupant of the Shopping Center), industrial, manufacturing, wholesaling or residential purposes, except for the storage and/or manufacture of such goods as are required as a necessary incident to the conduct of a particular retail mercantile business. No portion of the Shopping Center shall be used for a massage parlor, "adult" bookstore or for a store primarily selling or renting "X-rated" films or videos, a bowling alley, skating rink, studio or gym, billiard room, game arcade or amusement center, theatre, bar or tavern (except where incidental to the operation of a restaurant or delicatessen), beauty school, barber college, reading room, place of instruction. any other operation catering primarily to students or trainees rather than to customers or full service gas station with maintenance bays. In no event shall any portion of the Shopping Center be used or operated for any use or purpose and/or by any tenant or other occupant which is not consistent and compatible with the intention of the parties to at all times during the term of this Lease to maintain and operate a family-oriented shopping center in a manner consistent with other shopping centers in Southern California of the same general age, size and concept. Landlord shall not allow any improvements on the Shopping Center to be used for purposes which would necessitate long-term use of the parking areas. The covenants contained herein shall be deemed to be covenants running with the land and shall be binding upon all owners, users and occupants of the Shopping Center for so long as this Lease remains in effect The restrictions, benefits and obligations under this paragraph shall be deemed to create mutual and reciprocal benefits and servitudes upon the land and the remainder of the Shopping Center, which shall run with and against said parcels and be a benefit and burden thereon, except that said restrictions, benefits and obligations shall cease and be of not further force or effect after the termination of this Lease. D. Ouality of Exterior Maintenance. Landlord covenants that the exterior of all buildings in the Shopping Center will be maintained in a first-class condition and that the exteriors of all buildings will be repainted at least every eight (8) years. Landlord covenants that every lease executed between Landlord and other tenants in which the tenant is given the responsibility for exterior maintenance will contain provisions requiring such tenant to maintain the exterior in first- class conditions and to repaint it every eight (8) years. E. Intentionally Omitted ARTICLE IX REPAIRS. ALTERATIONS ANn FIXTURES A. Landlord's Repairs. (1) Landlord shall repair and maintain in good order and condition the exterior and structure of the Demised Premises, including without limitation the outside walls, foundations, roof, gutters, downspouts, structural members, pillars, wiring, plumbing, pipes and conduits, and equipment which serve the Demised Premises; provided, however, Landlord shall not be obligated to maintain or repair the exterior or structure of the Demised Premises to the extent that Tenant has changed or altered those portions of the Demised Premises as provided for in Section B of Article IX. Leues/Build 10 Suil/drJ9-4.90 NF/STMT.Yiva(3) .12- ,~~ , ". ,-' . TENANl' 103 1 2 3 4 5 6 7 8 9 10 1 1 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 (e ,. (2) Landlord shall make any interior repairs to the Demised Premises required because of defective or faulty installation or construction until the end of the first full (365-day) Lease Year of the term hereof or during any period when Landlord has the benefit of builders' guarantees therefore, and throughout the term of the Lease where required because of 0e settling of the building, or the act, default or negligence of Landlord, its employees, agents, hcensees or contractors. (3) Landlord shall make all repairs, alterations and additions which may be required by any laws, ordinances, orders or regulations of any public authorities ha~ing jurisdiction over the Demised Premises, except that Tenant shall make all such reparrs, alteranons and additions required by special use made of the Demised Premises by Tenant or by the act, default or negligence of Tenant, its employees, agents, licensees or contractors. (4) Landlord shall make all repairs which may be required as the result offrre, other casualty or other cause beyond Tenant's control, except that Tenant shall make all such repairs, alterations and addition required to be made as a result of an act, default or negligence of Tenant, its employees, agents, licensees or contractors. B. Tenant's Repairs. (I) Tenant shall keep and maintain the interior and nonstructural portions of the Demised Premises (subject to the provisions of Paragraph A of this Anicle and excluding reasonable wear and tear, structural defects and damage by fire, or other casualty or other cause beyond Tenant's control) in good condition and repair, including the heating and air conditioning systems, and the interior plumbing and electrical systems, if such systems are not used in common with other tenants, doors, door frames, glass and any other items Landlord is not required to maintain. Funher, Tenant shall be obligated to maintain those portions of the Demised Premises to the extent which Tenant has changed or altered those portions of the Demised Premises as provided for in Section B(2) of this Anicle IX. (2) Tenant shall have the right, at its expense, from time to time, to redecorate or remodel the interior ponion of the Demised Premises and to make such interior alterations and changes as it shall deem expedient or necessary for its purposes; provided, however, that such alterations and changes shall not injure the safety of the structure of the Demised Premises nor diminish its value, and shall be done in a good and workmanlike manner. Tenant may make structural alterations to the exterior Demised Premises, provided that it has first obtained the consent of Landlord in writing, Landlord agreeing that it shall not withhold its consent unreasonably, provided that such alterations and changes shall not injure the safety of the structure of the Demised Premises nor diminish its value and shall be done in a good and workmanlike manner. Landlord hereby authorizes Tenant to install, if Tenant so elects, refrigerating and other equipment, including water-saving devices, in the Demised Premises and on the roof thereof in accordance with approved plans and specifications. Landlord shall execute and deliver upon request of Tenant such instrument or instruments embodying the approval of Landlord which may be required by any public or quasi-public authority for the purpose of obtaining any license or permit for the making of such alterations, changes and/or installations to said Demised Premises, Tenant agreeing to pay for such license or permit. - C. Removal of Fixtures. Title to all fixtures, trade fixtures, counters, shelving, refrigeration equipment and all other equipment purchased with the Nine Hundred Thousand Dollars ($900,000.00) contribution by Landlord (as provided in the Lease) shall vest with Landlord at the expiration or earlier termination of the Lease. In the event that Tenant desires to replace such equipment which was purchased with Landlord's contribution, Tenant shall notify Landlord of such replacement Landlord may elect to take possession of such equipment to be replaced within thiny (30) days after Tenant's notice. If Landlord does not elect to take possession of such equipment, Landlord waives all rights in and to such equipment. Any equipment purchased by Tenant for such replacement shall be the property of Tenant ARTICLE X TAXES A. Tenant's Tax Responsibility, Tenant agrees pay Landlord its proponionate share of all propeny taxes during the term of this Lease upon the land, buildings and personal propeny comprising the Shopping Center, including the Common Areas of the Shopping Center. Tenant's Prooonionate Share. Landlord shall use its best effons to obtain separate assessments for Tenant's Demised Premises and adjacent common area. Unless the Demised .13- 'f~ ") o ., l.easeslBuild 10 Suil/drJ'}.4-90 NFJSTMT. Viva(3) ffiolANr Ic7I I 1 2 3 4 5 6 7 8 9 1 0 1 1 12 1 3 14 15 16 17 1 8 1 9 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 ~'. ( '. Premises and adjacent common area are separately assessed, the share of property taxes to be paid by Tenant shall be deemed to be the product derived by multiplying the total of the property taxes against the Shopping Center by a fraction, the numerator of which IS the ground floor area contained in the Demised Premises and the denominator of which is the total ground floor area contained in the Shopping Center as shown on the Site Plan; provided, however, ~h~ ground floor area shall be adjusted to the actual as~built building areas after complenon of all buildings as shown on the Site Plan, exclusive of any portion of the total floor areas which may be as~essed and taxed separately from the portion of the Shopping Center in which the Demised Prermses are located. The foregoing notwithstanding, the denominator shall exclude the ground ~oor areas of Pads I through 3 until the date they are built. Provided Landlord has submitted a bIll to Tenant at least thirty (30) days prior to delinquency, Tenant shall pay Tenant's share ?f .such taxe~ to Landlord ten (10) days prior to the delinquency date for such taxes upon subrmsslOn of a bIll to Tenant. Property taxes for the first and last years of the term hereof shall be prorated between Landlord and Tenant. For the purposes of this Article X, the term "property taxes" shall include any. ta~es which are enforceable as a lien against the Shopping Center, any form of tax or .assessment In lieu thereof, or in addition thereto, license fee, license tax, levy, charge, tax or sImIlar ImpOSItIOn. imposed by any authority having the direct power to tax, including any city, county, state or federal government. or any school, agricultural, lighting, drainage or other improvement or special assessment district thereof, as against any legal or equitable interest of Landlord in the Shopping Center, including, but not limited to, the following: 1. any tax on the Shopping Center in regards to Landlord's right to rent or other income from the Shopping Center or as against Landlord's business of leasing the Shopping Center, 2. any assessment, tax, fee, levy or charge in substitution, partially or totally, of any assessment, tax, fee, levy or charge previously included within the definition of property tax, it being acknowledged by Tenant and Landlord that assessments, taxes, fees, levies and charges may be imposed by governmental agencies for such services as police protection, fire protection, street, sidewalk and road maintenance, refuse removal and for other governmental services formerly provided without charge to property owners or occupants. It is the intention of Tenant and Landlord that all such new and increased assessments, taxes, fees, levies and charges and all similar assessments, taxes, fees, levies and charges be included within the definition of property taxes for the purposes of this lease; 3. any tax, fee or charge on the operation and use of the Shopping Center and/or the Common Area imposed by the United States Environmental Protection Agency or any other federal, state or local governmental entity as a result of Tenant's presence in the Shopping Center. In the event Landlord receives a rebate of any tax described in Article VIII, then Tenant shall receive from Landlord a rebate in an amount equal to Tenant's share as described in this Article VIII; and 4. any assessment, tax, fee, levy or charge, upon this transaction or due to a transfer of an interest or an estate in the Shopping Center. Notwithstanding anything to the contrary set forth in this Lease, a sale, exchange or any other transfer by Landlord of all or a portion of the Shopping Center or Demised Premises which causes a reassessment due to a change of ownership due to Revenue and Taxation Code No. 61 shall be included as property taxes. Tenant's obligation to pay for such property taxes concerning this Section A(4) shall be as follows: (i) Tenant shall pay its proportionate share of the first such reassessment after the Commencement Date of the Lease, (ii) Tenant's obligation to pay for the second reassessment shall not occur within seven (7) years following the date of such first reassessment, and (iii) Tenant's obligation to pay for any future reassessments, subsequent to the second reassessment, shall be limited to one (1) reassessment in any seven (7) year period thereafter. B. Direct Payment by Tenant. In the event that the Demised Premises are segregated for tax purposes to permit a single separate tax bill for the Demised Premises, Tenant shall pay such taxes and assessments as may be levied and assessed thereon directly to the Tax Assessor prior to delinquency thereof and transfer to Landlord the receipted bill indicating such payment. If such separate tax bill shall be sent to Landlord, Landlord, at least thirty (30) days prior to delinquency thereof, shall deliver said tax bill to Tenant. C. Proration. Any tax or assessment relating to a fiscal period of the taxing authority, part of which period is included within the term of this Lease and a part of which is included in :I period of time before the commencement of or after the termination of the term of this Lease, shall be prorated as between Landlord and Tenant as of the commencement or termination (as the case may be) of the term of this Lease, so that Landlord shall bear that portion of such tax or assessment which bears the same proportion to the entire amount thereof as that part of such fiscal period not included within the term of this Lease bears to the total fiscal period, and Tenant shall reimburse ) \"7 TENANT -14~ ~(0P rWRD LeaseslBuild to Suil/drt'}-4-90 NFISTMT- Viva(3) 105 I 1 2 3 4 5 6 7 8 9 1 0 1 1 12 13 14 15 1 6 17 18 1 9 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 (. \. Landlord for the remainder thereof. With respect to any assessment for public improvements or benefits which by law is payable, or which at the option of the taxpayer may be p~d in installments, Landlord shall bear the installments thereof which become due and payable pnor to the commencement of or subsequent to the termination of the term of this Lease, and Tenant shall reimburse Landlord for those installments which become due and payable during the term of this Lease, except that any installment of any such assessment which becomes due and payable in the fiscal year of commencement or termination of the term of this Lease shall be prorated as between Landlord and Tenant in the same manner as taxes and other assessments. D. Franchise Taxes. Etc. Tenant shall not be required to reimburse Landlord for any franchise, estate, inheritance, succession, or capital levy tax levied against Landlord, or for any income, excess profits or revenue tax or any other tax, assessment. charge or levy upon the rent payable under this Lease. E. Protest and Appeal bv Tenant. Tenant may, at its option, and at its cost and expense, in the name of Landlord, protest. appeal or institute such other proceedings as it may consider appropriate to effect a reduction or abatement in any tax or assessment, and to this end, Landlord shall reasonably cooperate with Tenant, including without limitation, the furnishing of such documents, information and assistance, and making such appearances, as reasonably may be required by Tenant In the event that a refund is obtained for any tax for which Tenant reimbursed Landlord, Landlord shall promptly pay Tenant its pro rata share of such refund. In the event Tenant is unsuccessful in obtaining a refund, Landlord shall have no liability for Tenant's cost, expenses or fees in attempting to secure such refund. F. Senarate Tax Bill or Statement. Landlord agrees to use its best efforts to obtain separate bills for taxes and assessments on (l) the Demised Premises and (2) the Common and Parking Areas. All statements or requests for reimbursement by Tenant for ta:'(es or assessments shall be accompanied by copies of the relevant bill or statement of the pro rata share. G. Taxes on Personal Pronertv and Fixtures. Tenant shall pay, before delinquency, all taxes and assessments on the furniture, fixtures, equipment and all other personal property of Tenant at that time situated on or installed in the Demised Premises. H. Lessee's Oblil!ation To Reimburse Lessor For Real Prooertv Taxes As Provided In Suboaral!raoh (a): shall be limited to such installment as may then be due and payable notwithstanding Lessor's election to make a single payment and not avail itself of the right to pay in installments. 1. Intentionally Omitted. ARTICLE XI INSlJRANCE A. Casualty Insurance. (1) Tenant shall, after the term commences and thereafter during the entire term, at its own expense, maintain standard "fire and extended coverage" insurance with or extended by financially responsible insurance company(ies), covering (i) the Demised Premises and (ii) the rents payable hereunder in an amount not less than one hundred percent (100%) of the actual replacement costs thereof (excluding in each instance foundation and excavation costs), in the name of Tenant and Landlord as their interest may appear. Tenant will provide certificates of such insurance to Landlord evidencing Tenant's compliance with this Article and providing that such insurance shall not be cancelled or the coverage thereunder diminished except after thirty (30) days written notice to Landlord. (2) Any proceeds derived from such policy(ies) of insurance shall be payable to and held in trust by Tenant and shall be made immediately available for rebuilding or repairing of the Demised Premises. Landlord shall, after receiving the insurance proceeds, promptly commence restoring and replacing the damaged or destroyed improvements. Any excess proceeds not used in the reconstruction shall be Tenant's property to be retained by Tenant (3) It is expressly understood and agreed that Landlord's obligation to rebuild, repair or restore any damage to or destruction of any improvements upon the Demised Premises shall be as provided in this Lease. -15- 'j~ Leases/Build to Suir/drf}-4-90 NFISTMT. Viva(3) , i-, ., 'IDlANf IO~ (. . 1 B. Liabilitv Insurance. After the Commencement Date. Tenant shall maintain 2 insurar.:e written by tinancially responsible insurance company(ies) naming Landlord as an 3 additional insuwi against liability for personal injury or death and property damage occumng m 4 the building on the Demised Premises with limits of liability not less than $2,000:000.00 combm~ 5 single limit. Tenant will provide certificates of such insurance to Landlord eYldencmg Tenant s 6 compliance with this Anicle and providing that such insurance shall not be cancelled or the 7 coverage thereunder diminished except after thirty (30) days written notice to Landlord. ~uch 8 coverage limit shall be adjusted from time to time during the term hereof to commercially 9 reasonable standards, upon request by Landlord, not more than once every three (3) years. -r:enant 1 0 shall comply throughout the term of this Lease, at its sole cost and expense, WIth apphcable 1 1 statutes and ordinances concerning worker's compensation insurance covering all of the employees 1 2 employed upon the Demised Premises or in connection with the operations conducted. thereon. 1 3 From time to time upon Landlord's request, Tenant shall furnish Landlord With a cenificate of 1 4 compliance with the California workers' compensation law issued by Tenant's carrier or the 1 5 Director of the Workers' Compensation Department of the S tate of California. 16 1 7 C. Self-Insurance and Blanket Policies. Tenant may comply with its insurance 1 8 obligation under Paragraph B of this Article by means of self-insurance. Any insurance required 1 9 hereunder may be carried under a blanket policy or policies maintained by Tenant WIth respect to 20 other premises or property owned or operated by it, its subsidiaries or affiliates, and with a 21 deductible provision acceptable to Tenant. 22 23 Insurance Leasehold Improvements. Tenant shall at all times during the term hereof 24 maintain in effect policies of insurance covering (i) all leasehold improvements made by Tenant in 25 excess of Landlord's initial construction of the Demised Premises as set fonh in this Lease 26 (including any alterations, additions or improvements as may be made by Tenant pursuant to the 27 provisions of this Lease) on the Demised Premises; (ii) all trade fIXtures and other personal 28 property from time to time on or upon the Demised Premises (excluding merchandise, inventory 29 and theft); such insurance shall provide protection against any peril included within the 30 classification "Fire and Extended Coverage", against vandalism, malicious mischief. Such policies 31 shall include coverage in an amount not less than one hundred percent (100%) of the actual 3 2 replacement cost thereof from time to time during the term of this Lease. The proceeds of such 3 3 insurance shall be used for the repair or replacement of the propeny so insured. except that upon 34 termination of this Lease following a casualty as set fonh herein, the proceeds under (i) shall be 3 5 paid to Landlord; and (ii) above shall be paid to Tenant, except with regards to such equipment 3 6 purchased with Landlord's contribution as provided for in the Lease, which shall be paid to 37 Landlord. Not less than annually during the term of this Lease, Tenant shall reasonably 38 redetermine such full replacement cost and shall adjust Tenant's insurance policy limits 3 9 accordin gl y. 40 4 1 Policy Requirements. All insurance required to be carried by either parry hereunder 4 2 shall be issued by responsible insurance companies, qualified to do business in the state wherein 43 the Demised Premises are situated with a Best's rating of at least XII A and reasonably acceptable 44 to Landlord, Tenant and Landlord's lender. Each policy shall name Landlord and Tenant as an 45 additional insured, as their interest may appear, and copies of all policies shall be delivered to the 46 other parry at least ten (10) days prior to Tenant's opening for business in the Demised Premises 47 (Landlord or Tenant may deliver certificates of such insurance in lieu of copies of policies, 4 8 provided that such certificates shall provide clear and unambiguous evidence of the existence and 49 amounts of such insurance). No such policy shall be subject to cancellation or modification except 50 after twenty (20) days prior written notice to Landlord or Tenant Landlord or Tenant shall, at least 5 1 twenty (20) days prior to the expiration of any such policy, furnish the other parry with renewals 52 or "binders" thereof. The insurance that Landlord and Tenant are required to maintain under this 53 Lease may be carried within Landlord's or Tenant's blanket. provided that the coverage that 54 Landlord or Tenant is required to maintain with respect to the Demised Premises is not diminished. 55 56 D. Reconstruction. Following any casualty to the Demised Premises, Landlord shall 57 immediately commence and diligently pursue the repair of all damage caused by the casualty. If, 58 however. the Demised Premises are substantially destroyed during the last three (3) years of the 59 original term or any extended term, then Landlord may elect to terminate the Lease by giving 60 thirty (30) days written notice to Tenant. Within thirty (30) days of delivery of such notice, 61 Tenant may elect to continue the Lease notwithstanding Landlord's notice of termination by 62 exercising one of its options to extend the Lease. If Tenant so elects to extend the Lease, then 6 3 Landlord shall immediately repair the damage caused by the casualty, and the then-current term 64 shall not be shonened as the result of the Landlord's notice of termination. Title to the 65 improvements shall, upon completion thereof, vest in Landlord. Notwithstanding the foregoing, if 66 (I) the Demised Premises are not suitable for the reconstruction or repair of the building on the 67 Demised Premises, (ii) during the last three (3) years of the initial term or during the last three (3) 68 years of any optional extended term, the cost to repair or reconstruct the building exceeds twenty- -16- \ I (ir r v "' I I~ \-~~ LeaseslBuild 10 Suil/drl'1-4-90 NFJSTMT. Viva(3) ID>lANf 107 y 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 -. , . five percent (25%) of the then-replacement value thereof. (iii) the Shopping Center has been substantially destroyed and Landlord does not provide to Tenant reasonable assurance that the Shoppmg Center will be rebuilt within a reasonable time, or (iv) the damage cannot be reparred within one hundred eighty (180) days from the date of the casualty, then Tenant may elect to terminate this Lease as of the date of such damage or destruction and cause the insurance proceeds, if any, to be paid to Landlord. Upon termination by Tenant or Landlord in accordance with this Section, this Lease and the term thereof shall cease and come to an end, and any unearned rent or other charges paid in advance shall be refunded to Tenant E. Destruction Due To Risk Not Covered By Insurance. If, during the term the Demised Premises are totally or partially destroyed from a risk not covered by insurance, rendering the Demised Premises totally or partially inaccessible or unusable, and the cost of restoration exceeds thiny-five percent (35%) of the then replacement value of the Demised Premises, Landlord or Tenant can elect to terminate this Lease by giving notice to the other pany within ninety (90) days after the date of such destruction. If Landlord or Tenant elects to terminate this Lease, the other pany, within fifteen (15) days after receiving said notice to terminate, can elect to pay the difference between thirty-five percent (35%) of the then replacement value of the demised premises and the actual cost of restoration, in which case said pany shall restore the demised premises. Landlord shall give Tenant satisfactory evidence that all sums contributed by Tenant as provided in this paragraph has been expended by Landlord in paying the cost of restoration. If Landlord or Tenant does not elect to perform the restoration or contribute toward the cost of restoration as provided in this paragraph, this Lease shall tenmnate. F. Rent Abated. In the event that the whole or any part of the Demised Premises is destroyed or damaged by fire or other casualty, then the Basic Rental and Additional Rental shall be proportionately abated to reflect Tenant's deprivation of use of the Demised Premises. Tenant shall continue the operation of its business during any such period to the extent reasonably practical from the standpoint of prudent management of Tenant's business. G. Waiver of Subroeation. Landlord and Tenant hereby waive whatever rights of subrogation they or their insurer might have pursuant to any policy of insurance covering the Demised Premises. Landlord and Tenant shall use best efforts to obtain and furnish evidence to the other of the waiver by Landlord's and Tenant's insurance carriers of any right of subrogation against the other. H. Insurance on Buildin~ Contents. All insurance maintained by Tenant on the contents of the building, including, without limitation, trade fixtures, chattels, facilities and removable installations, and the proceeds of such insurance, shall be the propeny of Tenant. except for such equipment purchased with Landlord's contribution as described in the Lease and the proceeds of such insurance which Tenant is required to maintain shall be the propeny of Landlord. I. Landlord Indemnified. Except for Landlord's willful misconduct or negligence, or its agents, employees or contractors, Tenant hereby indemnifies and holds Landlord hannless from and against any and all claims arising from Tenant's construction or use of the Demised Premises for the conduct of its business from any activity, work or thing done, permitted or suffered by Tenant and its agents and employees in or about the Demised Premises and, further, indemnifies and holds Landlord hannless from and against any and all claims arising from any breach or default in the performance of any obligation on Tenant's part to be performed under the terms of this Lease, or arising from any willful act or negligence of Tenant, or any of its agents, contractors or employees, and from and against all costs, reasonable attorneys' fees, expenses and liabilities incurred in or related to any such claim or any action or proceeding brought thereon; and in case any action or proceeding be brought against Landlord by reason of any such claim, Tenant. upon notice from Landlord, shall defend the same at Tenant's expense by counsel reasonably satisfactory to Landlord. Tenant Indemnified. Except for Tenant's willful misconduct or negligence, or its agents. employees or contractors, Landlord hereby indemnifies and holds Tenant hannless from and against any and all claims arising from Landlord's construction of the Demised Premises or the use, maintenance or operation of the common areas and, further, indemnifies and holds Tenant hannless from and against any and all claims arising from any breach or default in the performance of any obligation on Landlord's part to be performed under the terms of this Lease, or arising from any willful act or negligence of Landlord, or any of its agents, contractors or employees, and from and against all costs, reasonable attorneys' fees, expenses and liability incurred in, or related to, any such claim or any action or proceeding brought thereon; and in case any action or proceeding .17- " 1-, -., 1bNANf Le....lBuild to Suil/drJ'}-4-90 NFISThfI'- Viva(3) '\ RD ! ( '*~ /of! (e . 1 be brought against Tenant by reason of any such claim, Landlord, upon notice from Tenant, shall 2 defend the same at Landlord's expense by counsel reasonably satisfactory to Tenant 3 4 Exemntion of Landlord from Liability. Except for Landlord's willful misconduct or 5 negligence, or its agents, employees, or conrractors, Tenant hereby agrees that Landlord shall not 6 be liable for injury or damage which may be sustained by the person, goods, wares, merchandise 7 or property of Tenant, its employees, invitees or customers, or by any other person in or about the 8 Demise Premises caused by or resulting from fIre, steam, electricity, gas, water or rain which may 9 leak or flow from or into any pan of the Demised Premises, or from the breakage, leakage, 1 0 obstruction or other defects of the pipes, sprinklers, wires, appliances, plumbing, air conditioning 1 1 or lighting fixtures of the same, whether the said damage or injury results from conditions arising 1 2 upon the Demised Premises or from other sources. The panies acknowledge and agree that 1 3 Landlord or Tenant shall not be liable for any damages arising from any act or neglect of any other 1 4 tenant of the Shopping Center. 15 1 6 Landlord shall obtain the maximum available warranties from its subconrractors and 1 7 suppliers concerning the construction of the Demised Premises, and Landlord shall diligently 1 8 enforce such warranties if Tenant shall notify Landlord of any claims thereunder. 19 20 J. Premium Refunds. There shall be no apportionment of premiums with respect to 2 1 insurance maintained hereunder at the expiration or termination of this Lease. Tenant may cancel 22 any such policies as of the date of termination of this Lease and obtain any premium refund or 23 dividend received by Tenant on account of any insurance maintained by Tenant hereunder. 24 25 26 ARTJrJ.R XII 27 28 lJTILITIRS 29 30 A. Tenant shall, at its own expense, pay for all water, sewer, gas, power and electric 3 1 current and all utilities, during the term hereof, together with any taxes thereon. In the event that 3 2 any utilities are furnished by Landlord or are submetered by Landlord, the rates charged Tenant 33 shall not exceed those which would be charged by the local public utility company if its services 34 were furnished directly to Tenant 35 3 6 B. Landlord shall not be in default hereunder nor be liable in damages or otherwise for 37 any failure or interruption of any utility service being furnished the Demised Premises, unless due 3 8 to the willful misconduct or negligence of Landlord, its agents, employees or conrractors. 39 40 41 ARTICJ.R XIII 42 43 URNS 44 45 A. Tenant to Keep Demised Premises Clear of Liens. Tenant agrees that it will payor 4 6 cause to be paid all costs for work done by it or caused to be done by it on the Demised Premises 47 of a character which may result in liens on the Demised Premises or the Shopping Center, and 48 Tenant will keep the Demised Premises and Shopping Center free and clear of all mechanic's liens 49 or other liens on account of work done for Tenant or persons claiming under it or for materials 50 supplied to Tenant or persons claiming under it However, Tenant shall have the right to contest 51 the validity or amount of any such lien or claimed lien, provided upon Landlord's reasonable 52 request that Tenant shall give reasonable security to Landlord to prevent any sale, foreclosure or 5 3 forfeiture of the Demised Premises by reason of such nonpayment 54 55 B. Notice of Claims. Should any claims of lien be flied or recorded against the 56 Demised Premises or any action affecting the title thereto be commenced. Tenant shall promptly 5 7 give Landlord written notice thereof. 58 59 C. Cure of Mortl!al!e Defaults. Subject to Tenant's notice to Landlord of such defaults 60 and Landlord's failure to cure such defaults, Tenant shall have the right to cure any and all defaults 6 1 in mortgages or deeds of trust to which the Shopping Center is subject and bill Landlord for the 6 2 amount of the payment which Tenant cured. 63 64 .18- ) I ..-, " Leases/Build to Suil/drJ'J-4-90 NF/STMr. Yiva(3) TENANT I I 10'1 (. Ie 1 ARTlrI F. XIV 2 3 INSPECTION BY LANDLORD 4 5 A. Rie:ht of Entrv. Landlord reserves to itself and shall at any and all reasonable times 6 during normal business hours have the right to enter the Demised Premises to inspect the same, to 7 display the Demised Premises to prospective purchasers or tenants, to post and maintain any notice 8 deemed necessary by Landlord for the protection of its interest (including, without limitation, 9 notices of nonresponsibility), to alter, improve or repair the Demised Premises or any other portion 1 0 of the Shopping Center pursuant to this Lease, (including, without limitation, the roof and exterior 1 1 walls of the Demised Premises, and the area beneath the Demised Premises), and to install, use, 1 2 maintain and replace equipment, machinery, pipes, conduits and wiring throughout the Demised 1 3 Premises, which serve other pans of the Shopping Center; and Landlord may, in order to carry out 1 4 such purposes, erect scaffolding and other necessary structures where reasonably required by the 1 5 character of the work to be performed, and keep and store upon the Demised Premises all tools, 16 materials and equipment necessary for such purposes, provided that the business of Tenant shall be 1 7 interfered with as little as is reasonably practicable. If Landlord desires to enter portions of the 1 B Demised Premises not generally open to the public, or if Landlord desires to enter the Demised 1 9 Premises during non-business hours, Landlord must be accompanied by Tenant's representative. 20 Landlord shall not put up any billboards or for lease or for sale signs, or signs for any other 2 1 purpose without Tenant's consent, in its sole discretion. If Landlord enters the Demised Premises, 2 2 Landlord shall only have discussion concerning the Demised Premises or any maner in connection 23 with this Lease with Tenant's duly appointed representative. Landlord shall have the right to use 2 4 any and all means which Landlord may deem proper to open doors to the Demised Premises in an 25 emergency in order to obtain entry, and any entry to the Demised Premises obtained by Landlord 2 6 by any of such means, or otherwise, shall not under any circumstances be construed or deemed to 27 be a forcible or unlawful entry into, or a detainer of, or an eviction of Tenant from, the Demised 28 Premises or any portion thereof, and any damages caused on account thereof shall be paid by 2 9 Tenant. It is understood and agreed that no provision of this Lease shall be construed as obligating 30 Landlord to perform any repairs, alterations or decorations except as otherwise expressly agreed 3 1 herein to be performed by Landlord. 32 33 34 ARTICLE XV 35 36 ASSIGNMF.NT AND SlJBLETTING 37 38 During the first five (5) years of the Lease, Tenant shall not voluntarily or by operation of 39 law assign, license, franchise, or transfer all or any part of Tenant's interest in this Lease or in the 4 0 Demised Premises, and shall not sublet, franchise, change ownership or license all or any part of 4 1 the Demised Premises, any anempted assignment, license, franchise, transfer, subletting or change 4 2 of ownership shall be wholly void and shall confer no rights upon any third parties. 43 44 After the fifth (5th) year of the Lease, Tenant may assign the Lease or sublet a portion of 4 5 the Demised Premises ("Transfer") subject to the conditions contained herein: 46 47 A. In the event Tenant desires a Transfer of the Lease to a transferee who shall operate 48 the Demised Premises as a supermarket in accordance with the terms of the Lease, Landlord's 49 consent shall not be required, provided that such transferee, at the time of such proposed transfer, 50 (i) owns and operates one (1) other supermarket business which is operated from a location in 5 1 excess of twenty thousand (20,000) square feet of floor area, and (ii) has a minimum of three (3) 52 years experience as the owner and operator of a supermarket business. However, in the event the 53 transferee fails such criteria as provided in the preceding sentence, then Landlord reserves the right 54 to refuse to give such consent if in Landlord's sole discretion and opinion the quality of the 55 supermarket business to be operated from the Demised Premises or portion thereof is or may be in 56 any way adversely affect the operation of the Shopping Center, or the financial worth of the 57 proposed transferee is less than adequate to capitalize a supermarket business on the Demised 5 8 Premises. 59 60 B. In the event Tenant desires to Transfer the Demised Premises to a transferee who 6 1 proposes to change the use of the Demised Premises to a use other than that of a supermarket 62 business, then Landlord may. in its sole discretion, elect to (i) consent to such transferee; or 63 (ii) recapture possession of the Demised Premises, tenninate the Lease and release Tenant from 64 any funher obligations concerning the Lease. 65 66 Tenant shall submit to Landlord, at least sixty (60) days prior to the proposed 67 "effective date" of the Transfer: (a) a notice of such proposed transfer setting forth the proposed 68 effective date, which shall be no less than sixty (60) or more than ninety (90) days after the .19- Jr? RD ," , \~---, 1!NANf LeucslBuild to Suitldrl9-4-90 NFISTMT-Yiva(3) 110 y I .-e ( (. 1 sending of such notice; (b) the name of the transferee; (c) the nature of the proposed transferee's 2 business to be carried on in the Demised Premises; (d) the terms and provisions of the proposed 3 sublease or assignment; (e) a current, audited financial statement of the proposed subtenant or 4 assignee; and (f) such other information as Landlord may reasonably request. In the event 5 Landlord elects to recapture the Demised Premises, Landlord shall provide Tenant, within 6 thirty (30) days after the notice from Tenant provided for herein, notice of Landlord's election to 7 recapture the Demised Premises. Failure to so elect shall be deemed a consent to such transfer. 8 9 If Landlord shall not elect to recapture pursuant to this Section C. and if Landlord 1 0 shall consent to the proposed assignment or sublease, then Tenant may thereafter enter into the 1 1 proposed assignment or sublease, provided that (i) such assignment or sublease is executed within 1 2 ninety (90) days after the date that Landlord shall grant its consent; and (ii) the terms and 1 3 provisions of the executed assignment or sublease are the same as those presented to Landlord in 1 4 the notice given by Tenant pursuant to Section B above. 15 1 6 C. In the event that Landlord elects to recapture the Demised Premises and thereafter 1 7 enters into a lease with an occupant other than Tenant's proposed transferee, Landlord and Tenant 1 8 shall not share in "Net Profit" (as defmed herein). 19 2 0 In the event that Landlord elects to recapture the Demised Premises. and thereafter 2 1 enters into a new lease with Tenant's proposed transferee, then Landlord and Tenant shall equally 22 share the Net Profit for the duration of the then-current term of the Lease. In the event of an 23 assignment, Landlord and Tenant shall equally share the Net Profit. 24 25 Net Profit, as used in this Section C, shall be deemed to be the following: 26 27 (i) the sum of the transferee's new Basic Rental and other charges due 2 8 Landlord pursuant of the new lease; 29 30 (ii) less the amount of Tenant's Basic Rental and other charges due Landlord 3 1 pursuant to this Lease; 32 33 (ill) less the amount of any real estate commissions paid for such new lease for 3 4 such applicable year. (The calculation of such commissions shall not include commissions paid to 3 5 an affiliated entity of Landlord); and 36 3 7 (iv) less, if applicable, the sum of Forty-four Thousand Dollars ($44,000.00) 3 8 only in the event that the City of San Bernardino no longer pays to Landlord such sum. 39 40 Such Net Profit shall be determined at the end of each Lease year, as applicable. 4 1 Further, Landlord shall pay to Tenant fifty percent (50%) of any Net Profit, if applicable, within 42 ninety (90) days after close of such Lease Year. Further, Landlord shall provide Tenant a wrinen 43 statement in reasonable detail evidencing Landlord's calculation of such Net Profit. 44 45 D. Waiver. Notwithstanding any Transfer or any indulgences, waivers or extensions 46 of time granted by Landlord to any transferee, or any failure by Landlord to take action against any 47 transferee, Tenant waives notice of any default of any assignee or sublessee and agrees that 48 Landlord may, at its option, proceed against Tenant without having taken action against or joined 49 such transferee, except that Tenant shall have the benefit of any indulgences. waivers and 5 0 extensions of time granted to any such Transfer. 51 52 E. Assumotion of Oblil!ations. Each Transferee, other than Landlord, shall assume all 53 obligations of the Tenant under this Lease and shall be and remain liable jointly and severally with 54 Tenant for the payment of the rent. and for the due performance of all the terms, covenants, 55 conditions and agreements herein contained on Tenant's part to be performed, for the term of this 5 6 Lease. No Transfer shall be binding on Landlord unless such transferee or Tenant shall deliver to 57 Landlord an executed instrument in a form which contains a covenant of assumption by the 5 8 transferee satisfactory in substance and form to Landlord, consistent with the above requirements. 5 9 The failure or refusal of the transferee to execute such instrument of assumption shall not release or 6 0 discharge the transferee from its liability. 61 62 F. Subsidiaries. Affiliates and Mergers. Tenant shall be entitled to assign and transfer 6 3 this Lease or sublet all or any portion of the premises to any corporation of affiliated fmn owned 64 and contrOlled by Tenant, or to the surviving corporation in the event of a consolidation or merger 65 to which, Tenant shall be a party, to a corporation which owns and controls Tenant. to a 66 corporation which is owned and controlled by a corporation which controls Tenant, in connection 67 with the sale of all of Tenant's stock or substantially all of the assets of Tenant in connection with 68 the sale of Tenant's business; and the provisions of this Article XV shall not apply to such "1 -20- l..use!lBuild to Suil/drl9-4-90 NFr.lTMf- Viva(3) 11/ \ " -', lWANf '1' (e . 1 assignment, subletting or transfer if the subsidiary, affiliated fIrm. surviving cO:J'Oration or 2 transieree shall in writing expressly assume all of the provisions, covenants and conditIons oi thIS 3 Lease on the part of Tenant to be kept and perfonned; and provided, further, that no ,such 4 assignment, subletting or transfer shall act as a release of Tenant from any of the provISIons. 5 covenants and conditions of this Lease on the pan of Tenant to be kept and performed. 6 7 ARTICLE XVI 8 9 CONDEMNATION 10 1 1 A. If, during the term hereof, the Demised Premises, or the Common and Parking 1 2 Areas, or any portion of either, is taken or appropriated or condemned by reason of eminent 1 3 domain, there shall be such division of the proceeds and awards in such condemnation proceedings 1 4 and such abatement of rent and other adjustments made so as to give effect to the following: 15 1 6 1. Each party shall be entitled to prosecute its claims in the condemnation 1 7 proceedings and to retain any award made to it in such proceedings, except that Tenant shall 1 8 receive and retain any amounts awarded as compensation for the taking of any fixtures and 1 9 equipment owned by Tenant or for the expense of removing or altering the same. 20 2 1 2. If the entire Demised Premises shall be taken by condemnation, this Lease 2 2 shall terminate effective upon the date of taking. 23 24 3. If more than ten percent (10%), but less than all, of the Demised Premises 25 shall be taken by condemnation, Tenant may elect to terminate this Lease as of the date of taking by 26 giving Landlord written notice of such election within thirty (30) days after such taking. Tenant 27 may also elect to terminate this Lease regardless of the amount taken if, after such taking, in 28 Tenant's reasonable judgment, the area remaining will be insufficient for the conduct of the usual 29 business operations then being conducted by Tenant upon the Demised Premises at the time of the 30 condemnation with free and unobstructed access to adjoining public streets and from all pans of the 3 1 Common and Parking Areas of the Shopping Center to the Demised Premises. However, Tenant 3 2 may not elect to terminate the Lease in the event of a road widening of a public street which does 3 3 not exceed fifty (50) feet in width and which does not obstruct access to the Demised Premises. 34 3 5 4. If pan, but not all, of the Demised Premises shall be taken by condemnation 3 6 and Tenant cannot, or does not elect to, terminate this Lease, then there shall be such adjustment of 3 7 rent as shall be just and equitable under the circumstances; and, if Landlord and Tenant are unable 38 to agree upon such adjustment within thiny (30) days after the condemnation award has been 3 9 made, the matters in dispute shall be determined by arbitration in accordance with the Real Estate 4 0 Valuation Arbirration Rules of the American Arbitration Association. 41 42 5. If the entire Common and Parking Areas of the Shopping Center shall be 4 3 taken by condemnation, this Lease shall terminate effective upon the date of taking. 44 45 6. If more than ten (10%), but less than all, of the Common and Parking 4 6 Areas in the Shopping Center shall be taken by condemnation so that the area remaining will, in 47 Tenant's reasonable judgment, be insufficient for the conduct of the usual business operations then 48 being conducted by Tenant upon the Demised Premises at the time of condemnation, Tenant may 4 9 elect to terminate this Lease as of the date of taking by giving Landlord written notice of such 50 election within thirty (30) days after such taking. Tenant may also elect to terminate this Lease in 5 1 accordance with this Section. regardless of the amount taken, if, after such condemnation, in 52 Tenant's reasonable judgment, the Shopping Center does not constitute a commercially reasonable 53 shopping center with free and unobstructed access to adjoining public streets and from all parts of 54 the Common and Parking Areas of the Shopping Center to the Demised Premises. 55 5 6 7. If part, but not all, of the Common and Parking Areas shall be taken by 57 condemnation, and Tenant cannot, or does not elect to. terminate this Lease pursuant to Section F 58 of this Article, there shall be such adjustment of rent as shall be just and equitable under the 59 circumstances; and if Landlord and Tenant are unable to agree upon such adjustment within 60 thirty (30) days after the condemnation award has been made, the matters in dispute shall be 61 determined by arbirration in accordance with the Real Estate Valuation Arbitration Rules of the 6 2 American Arbitration Association. 63 64 8. For purposes of this Article, the "date of taking" means the date of entry 65 into possession by, or the vesting of title to, the condemning authority, whichever is earlier. 66 67 9. Landlord agrees that if any authority condemns or otherwise cites the 68 Shopping Center or any pan thereof as being unsafe, or not in conformity with applicable laws or .21- .~ IJ , Leases/Build to Suil/drl9-4.90 NFISTMT-Viva(3) \." ll'1;ANT liP... "f~ -. ( . 1 regulations, the Landlord, at its own cost and expense, will promptly make such changes, 2 alterations or repairs (srructural or nonsrructural) as may be necessary to comply with such laws 3 and regulations, or with the requirements of the condemning authority; provided, how~ver, that 4 nothing herein shall impair or defeat Landlord's right to contest or to defend agaI~st such 5 condemnation so long as Tenant's operations and use of the Demised Premises are not Imparred 6 thereby. If. during the time such changes, alterations or repairs are being performed to the 7 Shopping Center or the Demised Premises, the Demised Premises are rendered in Tenant's opinion 8 unsuitable for occupancy and use by the Tenant, the rent shall abate, and if only a portion of the 9 Demised Premises is rendered unsuitable for such occupancy and use, then the rent shall abate 1 0 proportionately. In the event the Demised Premises or any pan thereof are condemned as being 1 1 unsafe or not in conformity with the applicable laws and regulations due to the defective condition 1 2 or use of supplies, materials, and/or equipment owned or used by Tenant, or due to a defecnve 1 3 condition of any pan of the Demised Premises Tenant is required to maintain as herein provided. 1 4 then, notwithstanding the foregoing, Tenant, at its own cost and expense agrees to make such 1 5 changes, alterations and repairs in the building and equipment or the use of the same as may be 1 6 necessary to comply with such laws and regulations, or with the requirements of the condemning 1 7 authority; provided. however, that nothing herein shall impair or defeat Tenant's right to contest or 1 8 defend against such condemnation; provided further, however, that Tenant shall be entitled to any 1 9 condemnation award made, whether to Tenant or Landlord, in connection therewith. Controlling 20 over any contrary provisions of this Paragraph 9, in the event that any condition contained herein 21 occurs during the last two (2) years of the Lease term, Landlord may, in its sole discretion, elect to 2 2 terminate the Lease. 23 24 25 ARTICLE XVII 26 27 DEFAULT 28 29 A. Landlord's Remedies. Should Lessee at any time be in default hereunder with 30 respect to any rental payments or other charges payable by Lessee hereunder, and should such 3 1 default continue for a period of five (5) days after written notice thereof from Lessor, or should 32 Lessee be in default in the performance of any of its other promises, covenants or agreements 33 herein contained and should such default continue for thirty (30) days, after written notice thereof 34 from Lessor to Lessee specifying the particulars of such default, or the making by Tenant of any 35 general assignment for the benefit of creditors; the filing by or against Tenant of a petition to have 36 Tenant adjudged a bankrupt or of a petition for reorganization or arrangement under any law 37 relating to bankruptcy (unless, in the case of a petition filed against Tenant, the same is dismissed 38 within ninety [90] days); the appointment of a trustee or receiver to take possession of 39 substantially all of Tenant's assets located at the Demised Premises, or of Tenant's interest in his 40 Lease, where possession is not restored to Tenant within ninety (90) days; or the attachment, 41 execution or other judicial seizure of substantially all of Tenant's assets located at the Demised 42 Premises or of Tenant's interest in this Lease, where such seizure is not discharged within ninety 43 (90) days. 44 4 5 Then in any of such events and in addition to any or all other rights or remedies of 4 6 Lessor hereunder and/or by law provided, it shall be, at the option of the Lessor: 47 48 The right of Lessor to terminate the Lease and all rights of Tenant and to re-enter the 4 9 Demised Premises and take possession thereof and remove all persons therefrom, and Lessee shall 5 0 have no further claim thereon or hereunder; or, 51 5 2 In the event that Landlord shall so elect to terminate this Lease, then Landlord may 5 3 recover from Tenant: 54 5 5 1. The wonh at the time of award of any unpaid rent which had been earned at 5 6 the time of such termination; plus 57 58 2. The wonh at the time of award of the amount by which the unpaid rent 59 which would have been earned after termination until the time of award exceeds the amount of such 60 rental loss Tenant proves could have been reasonably avoided; plus 61 62 3. The wonh at the time of award of the amount by which the unpaid rent for 63 the balance of the term after the time of award exceeds the amount of such rental loss that Tenant 64 proves could be reasonably voided; plus 65 66 4. Any other amount necessary to compensate Landlord for all the detriment 67 proximately caused by Tenant's failure to perform its obligations under this Lease or which in the 68 ordinary course of things would be likely to result therefrom; and .22- 10~ o " .., LeueslBuild lD Suit/drl9-4-90 NFISTMT.Viva(3) 'ID'lANT 113 ~ , " (e . 1 2 5. At Landlord's election, such other amounts in addition to or in lieu of the 3 foregoing as may be pemrined from time to time by applicable law. 4 5 The term "rent" as used herein shall be deemed to include Basic Rental and 6 Percentage Rental and all other sums required to be paid by Tenant pursuant to the terms of this 7 Lease. All such sums, other than the minimum annual rental, specifically including percentage 8 rent. shall be computed on the basis of the average monthly amount thereof accruing during the 9 thirty (30) month period immediately preceding the default, except that if it becomes necessary to 1 0 compute such items before such a thirty (30) month period has occurred, then on the basis of the 1 1 average monthly amount accruing during such shoner period. 12 1 3 As used in subparagraphs (A) and (B) above, the "worth at the time of award'~ is 1 4 computed by allowing interest at the prime commercial rate being charged by the Bank of Amenca 1 5 N.T. & SA. plus one percent (l %) per annum, but not to exceed the then legal maximum rate of 1 6 interest. As used in subparagraph (C) above, the "worth at the time of award" is computed by 1 7 discounting such amount at the discount rate of the Federal ReseIVe Bank of San Francisco at the 1 8 time of award plus one percent (1 %). 19 20 B. Landlord's RiVht of Entry. In the event of any such default by Tenant, Landlord 2 1 shall also have the right, with or without terminating this Lease, pursuant to California Law, to 22 reenter the Demised Premises and remove all persons and property therefrom by summary 23 proceedings or otherwise; such property may be removed and stored in a public warehouse or 24 elsewhere at the cost of and for the account of Tenant 25 26 C. RiVht to Recover Rental or Relet Without Termination. In the event of an 27 abandonment of the Demised Premises by Tenant, or in the event that Landlord shall elect to 2 8 reenter as provided in Section B above or shall take possession of the Demised Premises pursuant 29 to legal proceeding or pursuant to any notice provided by law, and if Landlord does not elect to 3 0 terminate this Lease as provided in Section A above, then Landlord may from time to time, without 3 1 terminating this Lease, either recover all rental as it becomes due or relet the Demised Premises or 32 any part thereof for the account of Tenant on such term or terms and at such rental or rentals and 33 upon such other tenns and conditions as Landlord, in its sole discretion, may deemed advisable, 34 with the right to make alterations and repairs to the Demised Premises. In the event that Landlord 35 shall elect so to relet, then rentals received by Landlord from such reletting shall be applied first to 36 the payment of any indebtedness, other than rent due hereunder, owed by Tenant to Landlord; 37 second, to the payment of any cost of such reletting; third, to the payment of the cost of any 38 alterations and repairs to the Demised Premises; fourth, to the payment of rent due and unpaid 39 hereunder; and the residue, if any, shall be held by Landlord land payable hereunder. Should that 40 portion of such rentals received from such relening during any month which is applied to the 41 payment of rent hereunder be less than the rent payable during that month by Tenant hereunder, 42 then Tenant shall such deficiency to Landlord upon demand. Such deficiency shall be calculated 43 and paid monthly. Tenant shall also pay to Landlord, as soon as ascertained, any reasonable costs 44 and expenses incurred by Landlord in such reletting or in making such alterations and repairs not 4 5 covered by the rentals received from such reletrlng. Landlord shall use its best efforts to obtain the 4 6 highest new rent available for the Demised Premises. 47 48 D. RiVht to Cure. Notwithstanding any other provisions of this article, Landlord 4 9 agrees that. if the default complained of, other than for the payment of monies, is of such a nature 50 that the same cannot be rectified or cured within the thiny (30) day period requiring such 5 1 rectification or curing as specified in the wrinen notice relating thereto, then such default shall be 52 deemed to be rectified or cured if Tenant within such period of thirty (30) days shall have 53 commenced the rectification and curing thereof and shall continue thereafter with all due diligence 54 to cause such rectification and curing and does so complete the same with the use of such diligence 5 5 as aforesaid. 56 57 E. Tenant's Remedies. Should Landlord default in the performance of any covenant 58 or agreement herein contained, and such default continue for thirty (30) days after receipt by 59 Landlord of wrinen notice thereof given by Tenant, and Landlord fails to cure such default, unless 60 such default cannot be cured within such thirty (30) days but Landlord commences to cure and 61 diligently prosecutes to completion, Tenant shall not offset more than a total of two (2) months 62 Basic Rental with respect to any self-help under the Lease. In no event shall Tenant be entitled to 6 3 terminate the Lease due to such default 64 6 5 In the event of emergencies, or where necessary to prevent injury to persons or 66 damage to propeny, either party may cure a default by the other before the expiration of the waiting 67 period, but after giving such written or oral notice to the other party as is practical under all of the 6 8 circumstances. -23- I \S TI'NANf Lease.lBuild to Suilidri9-4-9<l NF/STMT-Viva(3) 1/'( '# 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 1 6 17 1 8 1 9 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 (. . ARTICLE XVIII MORTG.\GE OR F.NCIlMRRANCE OF LEASEHOLD INTRRRST Tenant may, at any time and from time to time, without Landlord's consent, mortgage, pledge, convey a security interest in. or otherwise encumber the leasehold estate hereby created, and all of Tenant's right, title and interest under this Lease; provided, however, that Tenant shall provide Landlord with written notice of Tenant's intent to encumber the leasehold estate. ARTICLE XIX OIJIRT ENIOY\fENT Landlord warrants that to the best of its knowledge and belief with due diligence, this Lease is not subject to any agreement, easement, restriction, ordinance, zoning law or other law which would prevent or materially interfere with the operation of the Shopping Center or the Demised Premises. Landlord warrants that if Tenant shall pay all rental and other sums as provided herein to be paid by Tenant and perform all the covenants of this Lease to be performed by Tenant, then Tenant shall, during the term hereof, freely, peaceably and quietly occupy and enjoy the full possession of the Demised Premises, together with all appunenances and all other rights and privileges herein granted in common with other tenants, of the Common and Parking Areas. If during the term of the Lease, title of Landlord to the Shopping Center shall be discovered to be insufficient to grant Landlord authority to enter into this Lease, Tenant may elect to tenninate the Lease. Further, Landlord and Tenant agree that the Lease is subject to the provisions of that certain document entitled "Disposition and Development Agreement" yet to be executed. by and between the City of San Bernardino Redevelopment Agency and Landlord, as hereafter amended, supplemented and/or implemented (hereinafter referred to as the "DDA "), as attached hereto as Exhibit "F". Landlord and Tenant agree that Tenant shall have the right to review and approve the DDA, which approval shall not be unreasonably withheld or delayed. In the event that the terms of such DDA materially and substantially restrict Tenant's use of the Demised Premises for the operation as a retail supermarket building or materially and substantially increase Tenant's obligations or materially and substantially decrease Tenant's rights under the terms of the Lease, then Landlord and Tenant shall diligently attempt to remove and/or revise any such restriction. If neither Landlord nor Tenant can remove and/or revise such restriction within ninety (90) days, Landlord or Tenant can elect to terminate the Lease by providing five (5) days' prior written notice to the other. ARTlC!,!': XX SIGNS A Tenant's Si!!ns. Subject to Landlord's prior written approval and Landlord's Sign Criteria, as set fonh in Exhibit "E", which is subject to the approval of Landlord and Tenant, such approval shall not be unreasonably withheld or delayed. Tenant shall have the right to maintain or replace any signs upon the Demised Premises as Tenant may desire for the advertisement of its business and. in addition, a sign panel on each free-standing pylon sign in the Common and Parking Areas of the Shopping Center. Tenant shall not install, erect or maintain any sign in violation of any applicable law, ordinance or use permit or any governmental authority. Tenant may remove (but shall not be required to remove) the same or any thereof at the expiration or sooner termination of this Lease, or within thirty (30) days after such expiration or termination, and Tenant at its own expense shall repair any damage caused by the removal thereof by Tenant. Further, subject to governmental approval. Tenant may use professionally prepared banners on the exterior of the Demised Premises; and Tenant may use professionally prepared window signs in the interior of the Demised Premises. Tenant shall not install any exterior decoration or painting, or build any fences, or install any loud speakers, sound amplifiers or similar devices on the roof or exterior walls of the Demised Premises, or make any changes to the store front of the Demised Premises without Landlord's prior written consent. Landlord shall, subject to governmental approval, construct at its sole expense the pylon sign(s) in the Shopping Center. The pylon sign(s) and the location of the users on such sign(s), as set fonh on Exhibit "E-I n, are subject to the approval of Landlord and Tenant. Such approval shall not be unreasonably withheld or delayed. , / -24- RD 'It'.Ne.Nf l~. L., " Leases/Build lO Suit/drJ'}-4-90 NF/STMf-Viva(3) 115 ~ 1 2 3 4 5 6 7 8 9 10 1 1 12 1 3 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 (. . The pylon sign(s) shall provide for Tenant to be located on the top position with lenering of at least equal size and prominent as other tenants listed on the sign. Landlord shall be allowed up to two (2) additional listings on such pylon sign, including the name of the Shopping Center. B. Prohibited Sie:ns. Landlord agrees and covenants with Tenant that it will not allow any other occupants of the Shopping Center to erect, nor will Landlord erect, any signs or advertising maner of any nature whatsoever which are flashing, which are located on the perimeter of the Shopping Center or on the Cornmon and Parking Areas (except for directional signs), roof signs, or any signs which interfere with the visibility of Tenant's signs on the Demised Premises from the streets adjacent to the Shopping Center, or which have not been approved by Tenant m writing, which approval shall not be unreasonably withheld or delayed. ARTICLE XXI \fE!I10RANDlI\f OF LEASE It is agreed that a Memorandum of Lease in the form of Exhibit "D" attached hereto shall be executed and acknowledged by the parties, and recorded fonhwith upon the execution of this Lease. ARTICLE XXlI HOLDING OVER If Tenant continues to occupy the Demised Premises after the expiration of the term of this Lease and Landlord elects to accept rent thereafter, a monthly tenancy terminable by either pany on one month's notice shall be created, which shall be upon the terms and conditions as those herein specified. It is agreed that if at the end of the original term of this Lease, or any extension period hereof, Tenant, in its sole discretion, shall deem it necessary to remain in occupancy of the Demised Premises beyond the termination date of this Lease, Tenant may do so for a period of time up to one hundred twenty (120) days. For any such hold-over period, the rent shall be one and one-half (1.50) times the then-existing Basic Rental. Tenant shall give Landlord sixty (60) days wrinen notice should such hold-over be necessary. ARTICLE XXTIT PA YMENTS AND NOTICES A Addresses and Method of Notice. All rents and other sums payable by Tenant to Landlord hereunder shall be paid to Landlord at the address hereinafter set fonh or such other place as Landlord hereafter may designate in writing. Any notice to be given or other document to be delivered by either party to the other hereunder may be delivered in person or may be deposited in the United States mail, duly registered or certified, with postage prepaid, return receipt requested, and addressed to the party for whom intended, as follows: TO LANDLORD: 701 South Parker Street, Suite 2000 Orange, California 92668 The Boys Markets, Inc. P. O. Box 42010 Los Angeles, California, 90042 Attn: Real Estate Department If any notice or other document is sent registered or certified as aforesaid. the same shall be deemed served or delivered within seventy-two (72) hours after the mailing thereof as above provided for. TO TENANT: B. Chan!!e of Address. Either party hereto from time to time, by thiny (30) day written notice to the other pany, may designate a different address which may be substituted for the one specified above. C Landlord's Desi!!Tlation of A!!ent. Should Landlord ever consist of more than one person or entity, they shall at all times appoint a cornmon agent to receive notices, rent payments. --, '''I TINANf -25- LeaseslBuild to Suitldrl9-4-9Q NFISTMT.Yiva(3) ( , /Ib 1 2 3 4 5 6 7 8 9 10 1 1 12 13 14 15 1 6 17 18 1 9 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 (. . and to deal with Tenant as to all mallers in connection with this Lease, and a notification shall be sent to Tenant designating such agent or any change in such agent Tenant shall not be required to recognize or deal with any person representing Landlord except such agent .\RTIrI.E XXIV GENER.\1. PROVISIONS A. Cantions. The captions of articles and sections of.this Lease ar~ for convenience only and are not a pan of this Lease and do not In any way hrrut or amphfy the terms and provisions of this Lease. B. Construction as Covenants. The parties hereto agree that all the provisions hereof are to be construed as covenants and agreements as though words imponing such covenants and agreements were used in each separate section hereof. C. Cumulative Rie:hts. Each and all of the rights, powers, options and remedies of Landlord and Tenant contained herein shall be cumulative and not exclusive. In addition to the other remedies provided in this Lease, Landlord and Tenant shall be entitled to the restraint by injunction of the violation or attempted or threatened violation of any of the covenants, conditions or provisions of this Lease. Any delay of Landlord or Tenant in enforcing any right, privilege or remedy accorded to Landlord or shall not waive, affect, diminish, suspend or exhaust any of such rights, privileges or remedies. D. Successors and Assi~s. Each and all of the covenants, agreements, obligations, conditions and provisions of this Lease shall inure to the benefit of and shall bind (as the case may be) not only the parties hereto, but each and all the heirs, executors, administrators, successors and assigns of the respective parties hereto, and whenever and wherever a reference is made to the Landlord herein or the Tenant herein. such reference shall be deemed to include the respective heirs, administrators, executors, successors and assigns of the Landlord or the Tenant, as the case may be; and all of the promises, covenants, agreements, obligations, conditions and provisions contained in this Lease shall be constrUed to be, and as, covenants running with the land. E. Litil!ation Exoenses. In the event of any litigation between Landlord and Tenant to enforce any of the provisions of this Lease or any right of either pany hereto, the unsuccessful pany to such litigation agrees to pay to the successful pany all costs and expenses, including reasonable attorneys' fees, incurred therein by the successful pany, all of which shall be included in and as a pan of any judgment rendered in such litigation. F. Intel!I"ated Al!I"eement. This is the complete and integrated agreement of the parties with respect to the subject matter covered hereby, and supersedes all prior discussions and negotiations. It is agreed that neither the parties hereto nor anyone acting on their behalf has made any statement, promise, representation or agreement, or taken upon itself any engagement whatsoever, verbally or in writing, except as expressly set fOM in this agreement. This agreement may not be modified except by a writing, signed by the parties hereto. '" ,) ~.\. ~, "-.,.\..1 '\'--':;/ G. Covenants Ree:ardinl! Brokers. Tenant represents and warrants that it has had no "'-" dealings with any brokers or agents in connection with the negotiation or consummation of this /\\ I~} I Lease. L8:llll:lefti agees Ie indem."lif)' against Md held Tenftllt free aftd harmlesTfrem 1l:Il) less,' '< ,_,-' Gost or gl(jlgnS8 iR-00II~tiHm~F-bmkemg8 "Ommi.33ioIl3. Each pany agrees to "--/ indemnify against and hold the other pany free and harmless from any loss, cost or expense in connection with any claim for broker commission by anyone claiming such as a result of any actions by the party so indemnifying. ARTIrI F. xxv HAZARDOUS MATERIAL. A. Landlord and Tenant represent and warrant to the other that their agents, servants, employees, contractors, and anyone else acting on their behalf will not store, dispose, produce, use, transpon or manufacture any toxic or hazardous waste or materials as defined or regulated by local, state or federal law on the Demised Premises or any ponion of the Shopping Center, except for any tenant items normally sold in major supermarkets in Southern California. Landlord or Tenant shall give to the other prompt written notice of the existence of, and/or discover of, the presence of or contamination of the Demised Premises or the Shopping Center with hazardous or toxic waste and/or materials. In the event Landlord or Tenant or any of their agents, servants, t " \WO HIn' no r Leases/Build to Suil/drf}-4-90 NFISTMT-Yiva(3) -26- -, ., TI'NANf 117 'f~ (. . 1 employees, contractor or anyone else acting on their behalf violates the foregoing provision by 2 storing, disposing, producing, uSIng, rransporting or manufactunng .any.toxlc.or hazardous waste 3 or materials in, on or about the area within the Shopping Center whIch IS subJect to the exclusIve 4 control of such pany, or to the Common and Parking Areas, as respects Landl~Jrd, unless caused 5 by Tenant, the violating pany shall indemnify, defend and hold the non-vlOlanng p~ haJ?1less 6 from any damage, claim, injury, cost or liability arising therefrom or related. thereto.. mcluding all 7 costs of clean-up, attorneys' fees and coun costs. In the event that Tenant IS the Vlolanng pany, 8 the clean-up and disposal of such waste or materials shall be performed by Tenant at Tenant's sole 9 cost and expense and shall be performed in accordance with all applicable laws, rules, regulanons 1 0 and ordinances. The foregoing notwithstanding, Landlord, in Landlord's sol~ and absolute 1 1 discretion, may elect, by written notice to Tenant, to perform the clean-up and disposal of such 1 2 waste or materials from the Demised Premises and/or Shopping Center. In such event, Tenant 1 3 shall pay to Landlord the actual cost of same upon receipt from Landlord or Landlord's written 1 4 invoice therefor. 15 1 6 B. Subject to the provisions of Paragraph A above, Landlord represents and warrants 1 7 that, to the best of its knowledge and belief after Landlord's due diligence, that the Shopping 1 8 Center (including the Land, surface water, ground water, and any existing Improvements) does not 1 9 contain any asbestos, substantial amounts of waste or debris, or contamination, including without 20 limitation: (1) any "hazardous waste" as defined by the Resource Conservation and Recovery Act 21 of 1976, as amended from time to time, and regulations promulgated thereunder; (b) any 22 "hazardous substance" as defined by the Comprehensive Environmental Response, Compensation 23 and Liability Act of 1980, as amended from time to time, and regulations promulgated thereunder; 24 and (c) any substance the presence of which on the Land is prohibited or regulated by any federal, 2 5 state or local law , ruling, rule or regulation similar or dissimilar to those set fonh in this paragraph 26 (collectively referred to as "Hazardous Material"). Landlord hereby indemnifies Tenant, any 27 Leasehold Mortgagee, and their respective successors and assigns, and agrees to hold Tenant, any 2 8 Leasehold Mortgagee and their respective successors and assigns harmless from and against any 29 and all losses. liabilities, damages, injuries, penalties, fmes, costs, expenses and claims of any and 30 every kind whatsoever (including attorneys' fees and costs) paid, incurred or suffered by, or 3 1 asserted against, Tenant, any Leasehold Mortgagee, and their respective successors and assigns as 32 a result of any claim. demand or judicial or adminisrrative action by any person or entity (including 33 governmental or private entities) for, with respect to, or as a direct or indirect result of, the 3 4 presence on or under or the escape, seepage, leakage, spillage, discharge, emission or release from 35 the Shopping Center of any Hazardous Material (including costs, expenses or claims asserted or 3 6 arising under the Comprehensive Environmental Response, Compensation and Liability Act, as 37 amended, any so-called state or local "Superfund" or "Superlien" law, or any other federal, Slate or 3 8 local statute, law, ordinance, code, rule, regulation, order or decree regulating, relating to or 39 imposing liability or standards on conduct concerning, any Hazardous Material) such losses etc., 40 are herein called "Environmental Liabilities", regardless of whether or not caused by, or within the 41 control of, Landlord other than those caused by or within the control of Tenant. The 4 2 representations, warranties and indemnity contained in this Article XXV shall survive the execution 4 3 and recordation of this Lease. 44 45 46 ARTICLE XXVI 47 48 SUBORDINATION 49 50 Tenant agrees that this Lease shall be subordinate to any lIlOrtgage or deed of trust that may 5 1 hereafter be placed upon the Demised Premises and/or the Shopping Center and to all 5 2 modifications, renewals and extensions thereof, so long as the mortgagee or beneficiary named in 53 such lIlOrtgages or deeds of trust shall agree (a) to recognize this Lease in the event of a sale, deed 54 in lieu of foreclosure or foreclosure if the Tenant is not then in default, (b) that in the event the 55 Demised Premises are damaged or destroyed at a time when neither Landlord nor Tenant is in 56 default under the terms of this Lease and Landlord is not in default under the terms of any such 57 mortgage, any insurance proceeds that are available under the insurance policy(s) required to be 58 maintained under Article XI hereof shall be first applied to repair, replace or rebuild the Demised 59 Premises so damaged or destroyed, if either Landlord and/or Tenant, under the terms of Article XI 60 hereof is required to, or elects to repair, replace or rebuild the Premises, and (c) that any proceeds 6 1 from condemnation awarded to Tenant and/or its sublessee under Article XVI hereof shall be the 62 sole propeny of Tenant and/or its sublessee. 63 64 Tenant agrees to attorn to the successor in interest of Landlord following any transfer of 65 Landlord's interest either voluntarily or by operation of law and to recognize such successor as 6 6 Landlord under this Lease. However, if Landlord or any such ground lessor mortgagee so elects, 6 7 this Lease shall be deemed prior in lien to any ground lease, mortgage, deed of trust or other 68 encumbrance upon or including the Demised Premises. regardless of dale of recording, and Tenant Leases/Iluild to Suil/drf}-4-90 NFISTMT. Yiva(3) -27- ., , . ,'l, IDiAtIT 'f "\ /I~ . . 1 will executed a statement in writing to such effect at Landlord's request. Tenant agrees that it sh~1 2 execute, without funher consideration, any and all insrruments deslfed by Landlord or Landlord s 3 mortgagee or beneficiary subordinating this Lease in the manner requrred by Landlord. 4 5 6 ~RTln F. XXVII 7 8 FORCE 'f~ IEIIRE 9 1 0 If either pany hereto shall be delayed or prevented from the performance of any ~t r~uired 1 1 hereunder by reason of acts of God, casualties, strikes, !ockouts, labor troubl.es, mabllity to 1 2 produce material, restrictive governmental laws or regulal1ons, or other cause WlthOUt fault and 1 3 beyond the reasonable control of the party obligated (financial inability excepted), then upon 1 4 wrinen notice to the other pany, the performance of such act shall be excused for the penod of the 1 5 delay and the period for the performance of any such act shall be extended for. a ~nod eqUivalent 1 6 to the period of such delay; provided, however, Tenant or Landlord shall exercIse lIS best effons to 1 7 remedy any such cause of delay or cause preventing performance, and nothmg m thiS 1 8 Article XXVII shall excuse Tenant from the prompt payment of any Basic Rental. additional rental 1 9 or other charges required of Tenant except as may be expressly provided elsewhere in this Lease, 20 and except where the Commencement Date of this Lease is delayed. in which laner case, rent shall 2 1 not be payable hereunder until the date of such delayed Commencement Date. Notwithstanding the 22 foregoing, Landlord and Tenant agree that irrespective of force majeure, no delay or prevenl10n of 2 3 performance will be excused if this Lease expressly provides for such performance irrespective of 24 the cause of delay. 25 26 27 ARTICLE XXVIII 28 29 MISCELLANEOlJS 30 31 A. Trash and Rubbish Removal. Tenant agrees that all trash and rubbish of Tenant 32 shall be deposited within the "Trash Area" shown on the Site Plan. In the event Tenant fails to 3 3 comply with Landlord's reasonable trash and rubbish removal procedures set forth herein, Tenant 34 shall be liable to Landlord for all costs or damage (except for the negligent acts or omissions of 35 Landlord, its agents, employees and contractors) to facilitate removal and maintenance of a neat 36 and clean Shopping Center. The foregoing notwithstanding, Tenant shall provide and pay for a 37 trash compactor suitable for and necessitated by the nature of Tenant's business. The cost of such 3 8 trash compactor shall be included as part of Landlord's contribution towards the fixtures and 3 9 equipment as provided for in Article ill of the Lease. 40 41 B. Nuisance. Tenant may not display, store or sell merchandise or permit portable 42 signs, devices or any other objects to be stored or to remain outside the exterior walls and 4 3 permanent doorways of the Demised Premises, except for shopping carts adjacent to the Demised 44 Premises. Tenant shall not use, suffer or permit any person or persons to use the Demised 45 Premises in any manner that will tend to create waste or a nuisance or, if there shall be more than 4 6 one tenant in the building of which the Demised Premises are a pan, shall tend to disturb such 47 other tenant or tenants. Tenant shall not place or authorize to have placed or affixed handbills or 48 other advertising materials on automobiles or buildings within the Shopping Center. 49 Notwithstanding anything to the contrary contained in this Paragraph B, Tenant may conduct 50 business and sell merchandise within the "seasonable sales area" as shown on the Site Plan, which 51 is immediately adjacent to the Demised Premises, not more than four (4) times per year and not to 5 2 exceed two (2) weeks in duration at anyone time, provided that (i) Tenant provides Landlord prior 5 3 wrinen notice and (ii) such sales do not unreasonably interfere with pedestrian use or access to and 5 4 from the Common and Parking Areas or with traffic circulation in the Common and Parking Areas. 55 56 C. No Representation bv Landlord/renant. Neither Tenant nor Landlord' has made 57 any representation or warranty as to the success of Tenant's business in the Demised Premises. 5 8 Tenant further agrees that neither Landlord nor Landlord's agents have made any representations or 59 promises with respect to the expense of operation of the Shopping Center or of the Demised 60 Premises. 61 62 D. Landlord's Control. Except for Tenant's approval rights in the "Control Area", all 6 3 Common Areas and Parking shall be subject to the exclusive control and management of Landlord 64 or such other persons or nominees as Landlord may have delegated or assigned to exercise such 65 management or control, in whole or in part, in Landlord's place and stead. Tenant acknowledges 66 that Landlord makes no representation or warranty whatsoever concerning the safety of the 67 Common and Parking Areas or the adequacy of any security system which is or may be instituted 68 for the Cornmon and Parking Areas. Landlord shall provide Common and Parking Area lighting .28- , LeaseslBuild to Suil/drl9-4-90 NFISTMT- Viva(3) u TI:NANf I v ~ /I? . . 1 up to 11:00 P.M. as a Common Area expense. Lighting after 11:00 P,M. shall be paid pro rata by 2 the tenants in the Shopping Center that remain open for business. 3 4 E. No Waiver. One or more waivrn of a breach of any covenant, term or condition of 5 this Lease by either party shall not be construed by the other party as a wai~er of a subsequent 6 breach of the same covenant, term or condition. The consent or approval of either party or ,!f any 7 act by the other pany of a nature requiring consent or approval shall not be deemed to waive or 8 render unnecessary consent to or approval of any subsequent similar act. Whenever the consent or 9 approval of either pany is required under the Lease, such consent or approval shall not be 1 0 unreasonably withheld or delayed. 1 1 1 2 F. Invalidity of Provisions. If any provision of this Lease shall be determined to be 1 3 void by any court of competent jurisdiction, then such determination shall not affect any o~er 1 4 provisions of this Lease, and all such other provisions shall remain in full force and effect; and It IS 1 5 the intention of the parties hereto that if any provision of this Lease is capable of two constructions, 1 6 only one of which would render the provision valid, then the provision shall have the meaning 1 7 which renders it valid. 1 8 1 9 G. Landlord's Ril:ht to Make Repairs. If Tenant refuses or neglects to make repairs to 20 and/or maintain the Demised Premises, or any part thereof, as set forth in the Lease, in a manner 21 reasonably satisfactory to Landlord, Landlord shall have the right after thiny (30) days' written 22 notice, but shall not be obligated, to make such repairs or perform such maintenance on behalf of 23 and for the account of Tenant. In such event, such work shall be paid for by Tenant as additional 24 rent promptly upon demand, together with interest thereon. In the event that Tenant commences 25 such repairs within such thiny (30) day period and diligently prosecutes the same to completion, 26 Landlord shall not have the right to make such repairs on Tenant's behalf 27 28 H. Emer!!encv Retlairs. In the event of any life or propeny threatening emergency, 29 Landlord and Tenant hereby grants to the other the immediate right to enter upon the Demised 30 Premises or Common and Parking Areas without prior notice to the other party; provided that the 3 1 parry desiring to make entry shall first attempt to contact the other parry by telephone, and if such 32 other party cannot be contacted, then the party making entry shall formally contact such other party 3 3 as soon as possible after the emergency has passed. 34 35 1. Work Standards. All work with respect to alterations and utility installations must 36 be done in a good and workmanlike manner and diligently prosecuted to completion to the end that 37 the improvements on the Demised Premises shall at all times be a complete unit except during the 3 8 period of work. Any such alterations and utility installations shall be performed and done strictly 39 in accordance with the laws and ordinances relating thereto, and with the requirements of all 40 carriers of insurance on the Demised Premises and the Board of Underwriters, Fire Rating Bureau, 4 1 or similar organization. In performing the work of any such alterations or utility installations, 42 Tenant shall not be required to use union labor, unless Landlord is required to use union labor in 43 the Shopping Center, and Tenant agrees to use a bondable contractor, which contractor shall be 4 4 either (a) one of the contractors set forth in a listing of approved contractors prepared by Landlord; 45 or (b) if not set forth in such a li~ting, reasonably approved by Landlord in writing within 46 fifteen (15) days of submittal to Landlord prior to the commencement of Tenant's work; and 47 Tenant shall have the work performed in such a manner so as not to obstruct the access of any 48 other tenant in the Shopping Center. Before commencing any such work or construction in or 49 about the Demised Premises, Tenant shall notify Landlord in writing of the expected date of 5 0 commencement thereof. Landlord shall have the right at any time and from time to time to post and 5 1 maintain on the Demised Premises such notices as Landlord deems necessary to protect the 5 2 Demised Premises and Landlord from the liens of mechanics, laborers, materialmen, suppliers or 53 vendors. 54 55 J. Rules and Rel!Ulations. Landlord shall have the right to establish, and from time to 5 6 time to change, alter and amend, and to enforce against Tenant and the other users of the Common 57 and Parking Areas such reasonable rules and regulations applied on a non-discriminatory basis as 58 may be reasonably deemed necessary or advisable for the proper and efficient operation and 59 maintenance of the Common and Parking Areas, subject to Tenant's prior written reasonable 6 0 approval. 61 62 K. Emplovee Parkin!!. It is understood by the parties hereto that the employees of 63 Tenant and the other tenants of Landlord within the Shopping Center shall only be permitted to 6 4 park their automobiles in the automobile parking areas designated on the Site Plan. Landlord shall 65 have the right to change such designated parking area from time to time, subject to Tenant's 66 reasonable written consent. Tenant shall use its best efforts to require that Tenant and its 67 employees shall park their automobiles only in those portions of the parking areas designated for 6 8 that purpose. Lea.sc.lBuild lO Suil/drI'J-4-90 NFISTMT- Viva(3) -29- hwt- r ~ , I ," l TENAl'IT ~~ I~O 1 2 3 4 5 6 7 8 9 1 0 1 1 12 1 3 14 15 16 17 18 1 9 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 . . L. Sale of Premises bv Landlord. Notwithstanding anything contained herein to the contrary, Landlord may, from and after the completion of constnlcnon of the Shoppmg Center. assign. in whole or in part. Landlord's interest in this Lease. and may sell all or part of the Shopping Center. In the event of any sale or exchange of the Demised Premises by Landlord and/or an assignment bv Landlord of this Lease. Landlord shall be and is hereby enorely freed and relieved of all liability 'under any and all of its covenants and obligations contained in or derived from this lease arising out of any act. occurrence or omission relating to the Demised Premises or to this Lease occurring after the consummation of such sale or exchange and/or assignment. M. Concessionaires. In the event Landlord operates or permits a concessionaire to operate a temporary income producing business in the Common and Parking Areas (such as the sale of fireworks), the net income received by Landlord from such business shall be used to offset the expenses incurred in the operation of Common and Parking Areas. N. Community Oriented Police Facility. Landlord shall use reasonable effom (but shall not be obligated) to obtain a "community oriented police facility" in the Shopping Center as a tenant. O. Exhibits. Landlord and Tenant acknowledge and agree that the following exhibits referenced herein shall be incorporated into the provision of this Lease upon the prior reasonable approval of Landlord and Tenant. In the event that Landlord and Tenant do not reasonably approve such exhibits, Landlord or Tenant may elect to terminate the Lease by providing five (5) days prior written notice to the other. The following exhibits shall be incorporated into the Lease: (I) Exhibit "A" Description of Demised Premises (2) Exhibit "B" Shopping Center Site Plan (3) Exhibit "C" Itemization and Allocation of Landlord's Contributions for the Acquisition of FF&E (4) Exhibit "D" Memorandum of Lease (5) Exhibit "E" Sign Criteria (6) Exhibit "E-l" - Pylon Signs (7) Exhibit "F" DDA IN WITNESS WHEREOF, the parties have executed this Lease on the day and year set fOM above. ' THE BOYS MARKETS, INC., a California corporation / I ;--/< ~ , :}': -r-', ,! 1 By: \ . O...J..A(.c~... ~ O./L(..''+",I__. ~V ' ~)' '/' , Title: C.LC C~ /,...r>0<..dJi...Ave- By' Titl : C \4\ D "^ AM By: By: Title: Title: "LANDLORD" "TENANT" Le.ues/Build to Suil/drfJ4..9Q NF/STMT.Yiva(3) .30- ~ ~. 1EN>Wr u I~I . EXHIBIT" A" . DESCRIPTION OF DEMISED PREMISES Luse.slBuild to Suit/dri9-4-90 NFISTMT-Viva(3) (1'0 BE ATIACHED) /-;.-;... J /"'- \~ , -7 mwrr . . f:X.\\1'B\l' ,,~" S\\Orr\l"lG CEl"l"{'ER Sll'E rL'\l"l (to Be ",:11" "c1lf.P) ~ c .(" ~ ,; ~ ' ")< r- j"' 1"? . (' o' t" _"" l'I'" Y',,\ .,.. f' ,.. "'1'\ 0 ..l, ~ ,.. (\ c o 'to l" 0 " "' .<. -- ~ed\Cll\ center or. , ------.,---- _ ~. s,oP :. " ~~ o t~. ,'=' to () ~ ~ ,..". ~ -'1. -' Cf) -' ,..". ~ "t) - ~ \ \ ~ \ \ \ \ , -_",-t " r 0 0 - \If ~ " 0;;:. \ \1 p , c " ~ \ ~~ '" - - --r; to 0> f/I '" - ;oi '" ,Y' "" '!' to/ /\/ / / \., "'" , ' / / /' ~' ,---.--' "r I / ill' ,,' r 't' ;--rr~)<--rh;:" ~ I'~ \ ' _::lbJ,~ t ~ /,~ /7/ (.~':l' ~" \ __ _ __ _ \ ,I"(. ~ J- p. \' ' (\_ _ _... \ , ~/ -L/ - ~ _I \ ,~:.' \ \ \ \ \ \ ,'l/t -r J 7 ~ /I. ,,' \ L- _ _ ~ \0 W1 - .!""'r- ,\ , .. or.---;\~?)) ,:> .-- " I _ ~p:?Y'/=7erf/~/ \ 1\ Z /- - I->.-L' ~- ~ --rt"..:7- . (':." , \ \ \ A ?"p./_,t. k' .,.-.,;' , \' I , . . ,.." ~., _.,. _ _ _ _ . ( ,/F f \ ~ \ \ ,.' ' I ' / '. \- ;.,' ' ' ,', " . . -----~""~ ' /' t. ~",----'- -.' ~,,-.. _.- -/' .' .'- / - \.-----~ ," ------_.~ ------:' -----~ - - -::::=--~ ...".' ." , ~ll\Uild to su,l/d,I9-4,90 Nf{S'l'MT .....,..(3) { /9-3' -0 ":1" 0> <II '" ... -0 ":1" 0> lit '" '" .' "'-.\ \:1-, ~ - . EXHIBIT "C" . ITEMIZATION AND ALLOCATION OF LANDLORD'S CONTRIBUTIONS FOR THE ACQUISITION OF FF&E LeaseslBuild 10 Suil/drl9-4-90 NFISTMT-Yiva(3) (TO BE A IT ACHED) I~'I ( ) \\~... TENAJIrr y LeaseslBuild to Suil/drJ'J-4-90 NFISTMT- Viva(3) (e EXHIBIT "0" Ie MEMORANDUM OF LEASE (TO BE A IT ACHED) 1;Z~ RD , I~ -, TENANT LeaseslBuild to Suil/drl9-4-90 NF/STMT. Viva(3) ~. EXHIBIT "E" SIGN CRITERIA (TO BE A IT ACHED) I tJ,&. . eJ I . 1ENANf ~ " LeaseslBuild to Suit/drl9-4-90 NF/STMT- Viva(3) (e Ie EXHIBIT "E.I" PYLON SIGNS (1'0 BE A IT ACHED) 1-;'7 L. I, '-J TENANT ~ , '. EXHIBIT "F" i. DISPOSITION AND DEVELOPMENT AGREEMENT Leas../Build to Suil/drfl-4-90 NFISTMJ'- Viva(3) (1DBEATIACHED) lilt , :l \ " 1l'.NANT t -. ATTACHHENT "2(a)" -L ~Mcn. NO.1'. COHHEHCINl'a AT TtlE CENTVf LINE INTERSECTIONS Of" HUSCOn STRaT - AND BASE: LIt<< lSTRltETJ THENCE ALONG THE CENT!1t ...uc. Of' isASl!: LlHE STREET .OUTH .., DEC;. sa.' .". I0\5T, 118.3" "UTI THENCE NORTH at! tlI!:G. 01' ao" EAST.41.ft FDT 1'0 THE TRUE POINT Of" SElalNN IHG I THENCE CONTlNUINl: NORTH DD DG. 01' DO" EAST 'U7.DO P'EETI THENCE NOIfTH" 9P ote;. QD' DD" loIUT 117.11 'nET, THENCE NORTH DO tlEG. 01' 00.' EAST tU3.ea PEETI THENCE .oUTH 8. DEG. as' 11" EAST """.33 nET I THENCE SOUTH 'DO DIG. D2~ - 4e" loIUT 630.11 P'UTI THENCE NORTH 59 om. U' .".. - ....,. ".1... I"EET TO,THIE TRUE POINT Ol" eItl;lNNING. 'Mea. NO.. 2' COI1I1I!:NCING AT THE CENTEIt LIt<< INTnUCT10N 01" t1\J'SCOTT STREET AND BASE a..nc ISTRUTI THENCE ALONG THE CENTER LINE Of" BAlE LINE STREET SOUTH !I' DEli. Ie' .... EAtT 740..,3 PUTt THENCE NORTH DO OEII. DZ' 48" EAST 41.2$ 1'EET TO THE TRUE POINT 01" BEGINNINGI THENCE CONTINUING NORTH DO DEG. OZ' 48. EAST "30.15 PEETI THENCE SOlITH a. DR. SI' 11" ~ 391.01 PEETI THENCE'~ DD'DEli. OZ' 4S" LEST "2.~74 paTI ~l! NORTH IS. DEG. A' 4"" \.lEST 3D.DD 1<El!:1'1 THaNCE NORTH DD DES. OZ' .... EAST 130.00 PEETI THENCE NORTH e., DE;. ..' .".. Wl!lT. 50 . aa f"EET I, THENCE lIOUTH aD DEG. DZ' ... UEST l:!O.DD fEET I THENCE NORTH .., DEG. liS' 4"" WEST 312.1D, nrr TO THE TAl.E POINT Of' 1EG1NNUG. I~' \~ .- . l\2b1\ ATTACm\E}:T I - J , ~ ~__ ::--.~ _- 0.:1 ~_I-~__~"~Q.. . ) ~ %-;/ - -~ I ~ "'. . J 1, j, TiAJU_ANA STREET \ 1- \ ~, ___'22 - 1\' \ \ I' \ \ \\ J' 'i. 1\.\. i I \ " ' ':\' , --- 1""1 ''''' '0 '. " !. - -WESTERN , ~AVENU~~ I - , \ : , \ \: , \, \ " \.....;..; 01. U '~o '-'"" <'" 1-' v_ ~ ~ ~ "'- i.... ,- 0) --- CJ1. 01 " - z _0 ~~ 0" o . ". ,"'; . '" ~ )> "':II "'('} -~ ~ r n N z ~ ... ~.. 0"'- '" . ~CII. ~ ~ N.A.P. , \ \ / ' . E. 62& 7.. '\ , 0"02 A4 \ /30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 - , ATTACHMENT "3" SCOPE OF DEVELOPMENT AGENCY RESPONSIBILITIES: (a) Prior to Transfer of Title to the Propertv 1. Provide a buildable site to the Developer. This shall include demolition and clearing, certain on-site and off-site improvements. The on-site improvements shall include rough grading of the Property and all remedial actions necessary to prepare the Property in a manner appropriate for development of the Project thereon including retaining walls as necessary to complete rough grading. (b) Prior to Completion of Supermarket Improvements 1. Off-site improvements shall include modification of traffic signals, storm drain improvements and storm drain manhole. DEVELOPER RESPONSIBILITIES: 1. 2. 3. Design, construction, leasing and management of an approximately 95,000 square foot multipurpose commercial center including two satellite retail facilities, including a 30,000 square foot supermarket site, a 20,000-26,000 square foot drug store site and an approximately 1500 square foot Community Police Service Center. Provide adequate security for the Project. Maintenance of Project. Attachment "3" 13/ . ATTi\Cnnnrr "3a" . EXHIBIT "13" SHOPPING CENTER srtE PLA.N (fO aE ATTAcHED) :"c:C-~"'" ~ ~~?;~ ~_"~1l\::'''',\ r. ~f'~""'-o ~ t)" ~ t'" 0 o ~ ~ 0 " ~.. _' 3edlcal center or. :. -..---- _BU. SloP ~~ ~~. .=' tC (') (I) ':) ,-,. (I) -'" \ -\ID ,J ;1 - ~ ~ ~ ~ ~ ~ ~ '" In .. 0 '" 0 ;; tI '0 t:J L- c " ~ <" (J) ". . :, .., -' ,-,. (I) -0 - 0) ':) '" i " ~ OJ '" '" ~ 5' <l> )> .... ~ I ..', 1- _': .... "\'t\ . / t' / / \. ;f;J - I Y\):.t~Lr/~~r..L::'<:' ~ \:~ I __I ::::-::- =-\;;N V L ~. Jf~ .I:~ ~ I \ I \ +-1' Y -" _, \ I I \ L- ~"I (Tn -/-/ 7-;" ~ \'!~ ~ \ _ _ __ \,J ~ 7"-r-?..!.t-V ~~\',: ,~ \ ...- _- -1\ 'Vr(-~../- ~ ),j..\' . . _f'fi"7V/#/~:}'-- , ' ~/,....,h;(' ~_ /- -~ -r '7 -. (co..f / I \ \ r. ('''E./-~ J~E,-/-~' 1 \ \ \ i \ \:,p.:J,'''~''T'. ",,:- .:.:-..-,.-.(' \ \-'" . ' . }-; l ~ . I. I' 1''' / . l- ,."~ ~__ - -- m:..1 ' I I I _ I- __- _ ., . ' / I r - - - - - - - ~ ~. - ~ ~ ~. .-' / .' / _ __;:::;..::.= _ __ _=------.- ~~.-<.r' ._ ...,11.' ... \..e....lBuild 10 Suilidrl9.4.90 NF{STMT.Viva(3) ( 3a - I 1'39... ~ -0 :r '" II> '" ..... -0 Fr '" '" ~ ':'> \,t., ~ " h ATTACHHENT "3a" .240 ~ . LEASING / Srw..;E PLAN .. WEST SIDE SH PING CENTER c D E F IB l::A GJ I BUILDING OR PAD I SIZE I DESCRIPTION I A free standing building on the corner which is A-F/SPAD 3,500 currently schedule to be a credit national name gas station with a minimum area for minor convenience foods. A free standing "fast food" building which will be a B-F/SPAD 3,000 "build to suit" location with a low to medium priced menu serving all meals. 11,400 feet of "in line" shops facing Medical Center Drive. This could include the "service" type tenants, C .. IN LINE SHOPS 11,400 the "COP" facility, and the financial institution. Most of the health care and personal services (external) tenants will be located in this building, as it offers separate and direct store front parking. D - IN LINE DRUG 25,000 25,000 feet (plus/minus) for a credit tenant national drug store 13,750 feet (plus/minus) of "in line" shops. This area will include most of the "retail" type tenants E .. IN LINE SHOPS 13,750 that need and require a close proximity to the Viva Store and foot traffic. Their location between the two majors should allow for high visibility and impulse purchasing by customers, F .. MARKET 30,000 30,000 feet for Viva Market 8,500 free standing jewel box building. Smaller tenants requiring smaller areas, high visibility, with G - JEWEL BOX 8,500 customers buying based on impulse would work well here, Such tenant types would include Donghnut.,>. Ice Cream, Florist, Mail Box, etc., and others, II TOTAL FOOTAGE: I 95,150 II 3:1 - , 133 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 . . ATTACHMENT "4" SECURED PROMISSORY NOTE $800,000 Dated: , 1990 San Bernardino, California A. FOR VALUE RECEIVED, the undersigned, New Frontier Commercial Properties, Inc., a California Corporation (the "Maker"), promises to pay to the REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO, a public body, corporate and politic (the "Agency" or the "Payee"), in accordance with and pursuant to that certain Disposition and Development Agreement by and between the Agency and the Maker, dated October ,1990 (the "Agreement"), the principal sum of: EIGHT HUNDRED THOUSAND DOLLARS ($800,000) and to pay interest on the unpaid and outstanding balance of such principal sum as provided below. Interest shall accrue from the date of disbursement of proceeds. B. This Note has been issued, executed and delivered in connection with certain obligations of the Maker to complete a redevelopment project (as described in the Agreement) (hereinafter the "Project") on certain real property legally described in Attachment "A" (the "Property") to the Agreement. This Note is secured as provided in Section 5.03 of the Agreement by the Property wherein Maker has granted for the benefit of the Agency a security interest, together with Maker's rights, title and interest in and to rents to the Property. References are made to the Agreement for provisions relating to conditions of default under this Note and the acceleration of the indebtedness evidenced by the occurrence of certain events set forth therein and for all other relevant purposes. This Note is intended to evidence indebtedness created pursuant to Section 2.08 of the Agreement, and nothing herein shall be deemed to alter or amend the provisions of Section 2.08 to the Agreement. C. The Maker shall pay to the Payee simple interest on the principal amount of this Note calculated at the rate of twelve percent (12%) per annum. D. Maker agrees to pay the sums due the Payee hereunder as follows. On the date of any close of escrow for an "arms-length" sale or refinancing of all of the Maker's interest in all or any applicable portions of the Property by the Maker to another party, other than an entity in which the Maker has an equity or voting interest or Preference Returns. 4 - I 1"31 ~ 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 . . E. Notwithstanding any provision herein to the contrary, the Maker may prepay at any time to the Agency, without penalty, the principal amount of this Note, together with accrued interest or Preference Returns thereon. F. All payments of principal and interest shall be made in lawful money of the United states at the Redevelopment Agency of the City of San Bernardino, 300 North "D" street, 4th Floor, San Bernardino, California 92418, or such other place as the holder of this Note may from time to time designate to the Maker hereof in writing. If the prescribed date of payment of any other principal thereon is a Saturday or Sunday or legal holiday at the location of the aforementioned office of the Payee, such payment shall then be due and payable on its next succeeding business day. G. If (i) there is a default by the Maker under the terms of this Note or under the Agreement securing this Note and (ii) the holder of this Note refers it to an attorney for collection or seeks legal advice for default under this Note or under the Agreement securing this Note, or any judicial or non-judicial action is instituted by the holder hereof, and an attorney is employed by the holder hereof to appear in any such action or proceeding or to reclaim, sequester, protect, preserve or enforce the holder's security for this Note, including but not limited to, proceedings to foreclose the loan evidenced hereby, proceedings under the Federal Bankruptcy Code, or for the appointment of a receiver, the undersigned promises to pay reasonable attorneys' fees for services performed by the holder's attorneys and all costs and expenses incurred incident to such employment; provided, however, that in order to be entitled to receipt of such payment by the Maker, the holder shall have prevailed in such action or proceeding. H. Any notice, request, demand, instruction or other document to be given hereunder to any party shall be in writing and personally delivered to the person at the appropriate address set forth below (in which event such notice shall be deemed effective only upon such delivery) or delivered by overnight carrier (in which event such notice shall be deemed effective one (1) day after deposit with the overnight carrier) by registered or certified mail, return receipt requested, as follows: If to Maker, to: New Frontier Commercial Properties, Inc. c/o John W. pierce 701 S. Parker Street suite 2000 orange, California 92668 If to Payee, to: Redevelopment Agency of the city of San Bernardino 300 North "D" street, 4th Floor San Bernardino, California 92418 4 - 2 y /35 . . 1 Notice shall be deemed to have been given at the earlier of 48 hours 2 after the deposit of same in any united states Post Office mailbox, 3 postage prepaid, addressed as set forth above, or upon receipt as 4 evidenced by the return receipt. The addresses and addressees may be 5 changed by giving written notice of such change in the manner herein 6 provided for giving notice. Unless and until such written notice is 7 given, the last address and addressee as stated by written notice, or 8 provided herein if no written notice of change has been sent or 9 received, shall be deemed to continue in effect for all purposes 10 hereunder. 11 12 I. Any "Event of Default" (as defined in the Agreement) 13 under the Agreement shall be an Event of Default under this Note. 14 Should any Event of Default occur, the holder of this Note, at its 15 option may, with notice to the Maker, declare the whole sum of unpaid 16 principal and accrued interest to be immediately due and payable; 17 provided, however, that without notice, Payee will have sixty (60) 18 calendar days and with notice, Payee will have thirty (30) calendar 19 days, to commence to cure and thereafter continue to cure with due 20 diligence a default prior to any acceleration of the Note. Upon the 21 occurrence of any Event of Default, the entire balance of unpaid 22 principal and accrued interest shall thereafter and until such Event of 23 Default is cured bear interest at twelve percent (12%) compounded per 24 annum. The failure to exercise, in case of one or more Events of 25 Default, any right or remedy given in this Paragraph shall not preclude 26 the holder of this Note from exercising any right or remedy given in 27 this Paragraph in case of one or more subsequent Events of Default. 28 29 J. The Maker and the Payee believe that any amounts payable 30 hereunder will not exceed the maximum amount permissible under 31 applicable law, as a result of the "time-price" differential doctrine 32 in California. The parties agree that the agreements between the Maker 33 and the Payee are expressly limited so that in no contingency or event 34 whatsoever (whether by reason of acceleration or otherwise), shall the 35 amount paid, or agreed to be paid to the Payee, exceed the maximum 36 amount permissible under applicable usury laws. If, from any 37 circumstances whatsoever, fulfillment of any provision hereof shall 38 involve transcending the limit of validity prescribed by law which a 39 court of competent jurisdiction may deem applicable hereto, then ipso 40 facto, the obligation to be fulfilled shall be reduced to the limit of 41 such validity. If from any circumstances the Payee shall ever receive 42 as interest hereunder an amount which would exceed the highest lawful 43 rate, such amount which would be excessive interest shall be applied to 44 the reduction of the unpaid principal balance due hereunder and not to 45 the payment of interest. 46 47 K. The Maker, to the extent permitted by law, waives 48 demand, presentment for payment, notice of dishonor, protest and notice 49 of protest, waives any and all lack of diligence or delays in the 50 collection or enforcement hereof, and consents that the time of pay 51 ment may be extended or this Note may be renewed without notice, and 52 without releasing the undersigned or any subsequent surety, guarantor 53 or endorser. 54 4 - 3 /3c.. ~ . . 1 L. This Note shall be governed by and construed in 2 accordance with the laws of the state of California. 3 4 M. All covenants and agreements herein shall be deemed 5 material, and shall bind the Maker's successors and assigns, whether so 6 expressed or not, and all such covenants and agreements shall inure to 7 the benefit of the Payee hereof and its nominees, successors and 8 assigns, whether so expressed or not. 9 10 N. No extension of time for the payment of this Note made 11 by agreement with any person now or hereafter liable for the payment of 12 this Note shall operate to release, discharge, modify, change or affect 13 the original liability under this Note, either in whole or in part, of 14 the undersigned. Notwithstanding any provision herein or in any IS instrument now or hereafter securing this Note, the total liability for 16 payments in the nature of interest shall not exceed the limits imposed 17 by the applicable usury laws. 18 19 MAKER 20 21 NEW FRONTIER COMMERCIAL PROPERTIES, 22 INC. 23 A California corporation 24 25 26 By: 27 John W. pierce 28 l'r~C;rlgl'lt C'>\I\\Ii""^"'l-\ 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 4 - 4 137 ~ . . 1 STATE OF CALIFORNIA 2 ss. 3 COUNTY OF SAN BERNARDINO 4 5 On , before me, the undersigned, a Notary Public in 6 and for said state, personally appeared 7 8 9 personally known to me (or proved to me on the basis of 10 satisfactory evidence) to be the person that executed the within 11 instrument as the President, on behalf of New Frontier Commercial 12 Properties, Inc., the corporation therein named, and acknowledged to me 13 that the partnership executed it. 14 15 WITNESS my hand and official seal. 16 17 Signature 18 19 (NOTARIAL SEAL) 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 4 - 5 53 13<( ~ 'J:. .....0 O)ct:. ~<. ~ .....ai O)\U O)u.. ..... .....2. 0)<. 0)""') ..... U) \.U 0:."'" ~~ - .,... O:r. Zt) \.Uo:. 0..<. ~~ \-' Zo \.UO) ~~ 0..0:. O\.U mm >~ \.Ut) 00 th 0:. 0.. cO O)\U o)c ..... . > go O)'Z ..... r: Co ~o ..... ~\U cr- -<. c(,c n.. ti~ (!)(J) co ~o ~---~-~ ~ - \U 'Z - -1 . !\1'tP.C\\1-'\E01'I IlS\~ o o o ~ ~ ~ og go <IS~ _01 ee C (f) .- '- <) eeC Ig ~ <. o 0 o 0 o 0 ~ <IS C'J o 0 o 0 o. 0 o ,n 1.0 .- 00 00 00 "'& o o o o q- gg 00 c:6,n .- o o O. r- o o o ,n q- 888.8_8.8.8- o,nC'loq-oc.o C'l .-"'C'l0 .- I g o .- g o r-: o o 0_ ~ g o .- g. r- 00 00 00 ,n,n C'JC'J o 0' 0 000 o O. 1.0 ~ r- ~ o 0 o 0 o o. o r- .- o o 0_ o .- o 1.0 r- ~ o o ..n q- ~ 000 000 oC'Jo ,nr-:,n c.o",c.o .,...- o o o cf, q- 00 gg titi 00 ~g ~c:6 .- .,.. o o o '" C'l q- (f) 'l::l C -C ~ ~.~ (f)0l0l .s:::. (f) <I) E u.. ....- <I)~C <I) E u....E~'> lJ)> E CE...lo-b'50 0 eeoOlC~~~ <.) 30's 9:?w$ g"a c ~ _,s'-l<)_o~COlJ) ...: 0 (';\ C ,_ Ol _ Ol '- .c 0. " (f)in E'';::;'::;: ~ <I) C (f) <) 0"( t: 0 Ol C (';\ .- > Ol ee C .c < ooa: o~~ <l)C) (1)4.(/)( o 0 a--l lJ) lJ) th S ~ OlC o - c:- .c .- c.ll<: 0.. 01 % ~.~ ~ .%.o%.sCI: .S.,;;(';\Ol-~(f)"a cQj~~.S-CUl~Qj 0l-Q0l-Q:>L(';\-""'- 'iiiCcc-C'-~- Ol Ol Ol (';\ 0 Ol ~ '- Ol oa:C)...l~\-o ~C) en - ee ... ~ - o ~ <I) Q:4;:: .c.s:::. ..... 0 o ... <. s - 1 131 ~.: - t::: as c: .. Q) - CD .lii .. E: CD t:::' ... Cl en E .Q) : 0 .><: CD "S CD Cl 'X ~ ... '- c: ~ as .... :a c: c: 0 ~ t::: <ii CD "(;j ~ "(;j Cl E ::J Cl ~ en c: t:: ~ I ... I ~ - as t J:) CD '0 CD 0 CD 01 -- en CD CD t::: CD c: fIi ... (.) c: c: en >- ... - IL c: 0 ~ ~ (.) CD CD ::: III c: C\l CD +:: .s - 01 - .t::: as ... w I IL ~ 0 as <ii 0 ~ I c: .;::; !!1 ~ U 01 :::: ~ as as .... CD ...,J ... .0 c: ... ;j ... <ii ~ ... ~ CD as .c: "(jj c: (f) CD '- CD a. ... a. lI) CD t::: ::: ~ -- 0 Q) ~ - Q) .c: C\l c: 0 c: > ~ c: E ~ E Q) c: C\l 01 0 .c: 'C 0 as 0 c: as .c: 0 Q) 0 - CD CD ... CD ... "C 01 ... Q) Q) - '- 0 ><: Q) t:: ... e Q) ...J <( 0 ~ (!) <( III IL (!) 0- en I- Q) (!) I- 0 &3 () ::J(!) ~ (!) ~ <( -J Q CI) 5 - , FIO - . ATTACHHENT "5" . o o q .... 00 00 Iltq ...-....... o o o o o o ui 0 0 0 0) .... 0 0 0 0 0 0 0 0 0 0 0 a. 0) 0 <0 ID .... .... .... 0 0 0 0 0 q C\I ID C\I v 0 ~~ 0 0 C\I .... .... o o o co o o ID C\I o o o .... 0 0 0000 000 0 0 0000 000 0 CO!. OIDOO 000 ..; N C'i~uir' ci";C'i C') ~ ~~ 0 0 0 cO 000 00000000 0 00 0 0 0 0 000 00000000 0 00 0 0 0 0 000 OOOOIDOOC\l 0 00 0 0 0 0 oui"; uiuiouir'cOoui ui oci v ..; cO 0 co .... .... C\I.... .... 0) ....v C') .... .... <0 C\I 2 ..0 ~ ,r o o 1t) g '''"""': ,'~ '.tD C') C\I fir .:.~ ,..,. .~ .../'C .v .... N ~ .~' .0; Lt) ~ o OJ OJ ,-'-: .): -l < b I- & .... <0 :~ CIl ... "' .c E 0.. '" uz ~ !1Z :>,0 m~ CIl "' ~.c ;31- - c: "'- ~1l ang _l;: c: "' ~a: ... - '" 0 uz "'en lila: ,- u -gu. -z !1Z E .8 e <u. ~ '~ ~ 8. E "' ",0 Zo ",0 "' o. .50 t: '" ~~ 1 2 3 4 5 6 7 8 9 10 11 12 13 14 IS 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 . . ATTACHMENT "6" (Schedule of Performance) (Days shall be calendar days, and all dates herein are subject to change due to force majeure in accordance with section 6.05 of the Agreement) (1) Developer submits Financial statements and tax returns of Developer, N.F. Enterprises and N.F. Management and evidence of legal formation Prior to step 2 (2) Agency approval of DDA October 15, 1990 (3) Developer contributes or certifies contributed funds representing the Developer Advance. Agency obtains approval for method of fund disbursement. Agency contributes funds to pay Predevelopment Costs as incurred within 5 days of approval of DDA by Agency (4) Escrow opens within 10 days of approval of DDA by Agency (5) Agency commences construction of improvements to be constructed by Agency as described in the Scope of Development March 1, 1991 (6) Developer executes and delivers Promissory Note with guaranties and Agency makes proceeds of Agency Loan available Transfer of Title (7) Agency prepares and deposits in escrow CC & R's and grant deed March 1, 1991 (8) Developer submits to Agency and city, updated site plan, concept elevations, construction and related documents within 45 days of approval of DDA by Agency 6-1 lerl ~ . 1 (9) Developer submits evidence of 2 Developer Financing, evidence 3 of 70% preleasing and financial 4 statements 5 6 7 (10) Agency review and 8 approve or disapprove site plan, 9 concept elevations and construction 10 and related documents 11 12 (II) Developer submits revised site 13 plan, concept elevations and 14 construction and related 15 documents (if earlier disapproved 16 by City or Agency) 17 18 19 (12) Developer pulls permits 20 21 22 (13) Agency submits evidence of 23 availability of UDAG Funds 24 and funds for the Fixture 25 Financing, Agency Loan and 26 Agency Contribution 27 28 (14) Escrow closes 29 30 31 32 (15) Construction Commences 33 34 35 (16) Agency makes Agency Loan 36 funds, UDAG funds and Fixture 37 Financing funds available. 38 Developer draws down Developer 39 Financing to pay Project costs 40 41 (17) Completion of construction 42 43 44 45 46 47 48 49 50 51 52 6 - 2 !i~ . May 1, 1991 within 5 days of step 9 above within 10 days of step 10 above April 15, 1991 April 15, 1991 May 1, 1991 May 15, 1991 Commencing May 1, 1991 within 240 days of step 16 above y . . 1 ATTACHMENT "7" 2 3 GRANT DEED 4 5 6 Recording Requested by: 7 8 9 10 After Recordation, Mail to: II 12 Redevelopment Agency of the city of San Bernardino 13 14 Mail Tax Statements to: 15 16 17 18 GRANT DEED 19 20 For valuable consideration, the receipt of which is hereby 21 acknowledged, 22 23 THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO, a public 24 body, corporate and politic, of the state of California (the 25 "Grantor"), acting to carry out the Redevelopment Plan for the 26 Northwest Redevelopment Project (the "Redevelopment Plan") pursuant to 27 and in accordance with the Community Redevelopment Law of the State of 28 California, hereby grants to 29 (the "Grantee"), 30 the real property (the "Property") legally described in the document 31 attached hereto, labeled Exhibit A, and incorporated herein by this 32 reference. 33 34 1. The Property is conveyed subject to the Redevelopment 35 Plan and pursuant to the Disposition and Development Agreement entered 36 into between the Grantor and the Grantee, dated 1990 37 (herein referred to as the "Agreement"). The provisions of the 38 Agreement are incorporated herein by this reference and shall be deemed 39 to be a part hereof as if set forth at length herein. 40 41 2. The Grantee covenants by and for itself, its heirs, 42 executors, administrators and assigns, and all persons claiming under 43 or through them, that there shall be no discrimination against or 44 segregation of any person or group of persons on account of race, 45 color, creed, religion, sex, age, marital status, national origin or 46 ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure 47 or enjoyment of the Property, or through it, establish or permit any 48 such practice or practices of discrimination or segregation with 49 reference to the selection, location, number, use or occupancy of 50 tenants, lessees, subtenants, sublessees or vendees in the Property. 51 52 7 - I 53 li3 ~ . . 1 All deeds, leases or contracts made relative to the Property, 2 discrimination clauses: 3 4 (a) In deeds: "The grantee herein covenants by and for 5 himself, his heirs, executors, administrators and assigns, and all 6 persons claiming under or through them, that there shall be no 7 discrimination against or segregation of any person or group of 8 persons on account of race, color, creed, religion, sex, age, 9 marital status, national origin or ancestry in the sale, lease, 10 sublease, transfer, use, occupancy, tenure or enjoyment of the II land herein conveyed, nor shall the grantee, himself, or any 12 person claiming under or through him, establish or permit any such 13 practice or practices of discrimination or segregation with 14 reference to the selection, location, number, use or occupancy of 15 tenants, lessees, subtenants, sublessees or vendees in the land 16 herein conveyed. The foregoing covenants shall run with the 17 I and. " 18 19 (b) In leases: "The lessee herein covenants by and for 20 himself, his heirs, executors, administrators and assigns, and all 21 persons claiming under or through him, and this lease is made and 22 accepted upon and subject to the following conditions: 23 24 That there shall be no discrimination against or segregation of 25 any person or group of persons on account of race, color, creed, 26 religion, sex, age, marital status, national origin or ancestry in 27 the leasing, subleasing, transferring, use, occupancy, tenure or 28 enjoyment of the land herein leased, nor shall the lessee himself, 29 or any person claiming under or through him, establish or permit 30 any such practice or practices of discrimination or segregation 31 with reference to the selection, location, number, use or 32 occupancy, of tenants, lessees, subtenants, sublessees or vendees 33 in the land herein leased." 34 35 (c) In contracts: "There shall be no discrimination 36 against or segregation of any person or group of persons on 37 account of race, color, creed, religion, sex, age, marital status, 38 national origin or ancestry in the sale, lease, sublease, 39 transfer, use, occupancy, tenure or enjoyment of the land, nor 40 shall the transferee himself, or any person claiming under or 41 through him, establish or permit any such practice or practices of 42 discrimination or segregation with reference to the selection, 43 location, number, use or occupancy of tenants, lessees, 44 subtenants, sublessees or vendees of the land." 45 46 3. No violation or breach of the covenants, conditions, 47 restrictions, provisions or limitations contained in this Grant Deed 48 shall defeat or render invalid or in any way impair the lien or charge 49 of any mortgage, deed of trust or other financing or security 50 instrument permitted by the Agreement; provided, however, that any 51 successor of Grantee to the Property shall be bound by such remalnlng 52 covenants, conditions, restrictions, limitations and provisions, 53 whether such successor's title was acquired by foreclosure, deed in 54 lieu of foreclosure, trustee's sale or otherwise. 55 7 - 2 Iff ~~\ l . . 1 4. The terms and conditions set forth in Article IV of the 2 Agreement and the covenants otherwise contained in this Grant Deed 3 shall remain in effect until the expiration date of the Redevelopment 4 Plan, except that the covenants against discrimination set forth in 5 Article IV of the Agreement shall remain in effect in perpetuity and 6 the covenants set forth in Sections (4.) and (4.) of the 7 Agreement shall remain in effect until they are satisfied in-full. 8 9 5. The covenants contained in this Grant Deed shall be IO binding for the benefit of the Grantor and its successors and assigns, 11 and such covenants shall run in favor of the Grantor for the entire 12 period during which such covenants shall be in full force and effect, 13 without regard to whether the Grantor is or remains an owner of any 14 land or interest herein to which such covenants relate. The grantor, 15 in the event of any breach of any such covenants, shall have the right 16 to exercise all of the rights and remedies, and to maintain any actions 17 at law or suits in equity or other proper proceedings to enforce the 18 curing of such breach as provided in the Agreement or by law. The 19 covenants contained in this Grant Deed shall be for the benefit of and 20 shall be enforceable only by the Grantor and its successor. 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 7 - 3 1'75 . . 1 IN WITNESS WHEREOF, the Grantor and Grantee have caused this 2 instrument to be executed on their behalf by their respective officers 3 thereunto duly authorized, this ____ day of 19 4 5 6 Grantor: 7 8 REDEVELOPMENT AGENCY OF THE CITY OF 9 SAN BERNARDINO 10 II 12 13 By: 14 Chairperson IS 16 17 By: 18 Secretary 19 20 21 APPROVED AS TO FORM: 22 23 24 By: 25 Counsel for Grantor 26 27 28 The provisions of this Grant Deed are hereby approved and 29 accepted. 30 Grantee: 31 32 33 34 35 By: 36 37 Title: 38 39 40 41 By: 42 43 Title: 44 45 46 47 APPROVED AS TO FORM: 48 49 50 By: 51 Counsel for Grantee 52 53 7 - 4 If? J . . 1 ATTACHMENT "8" 2 3 RELEASE OF LIEN 4 5 6 RECORDING REQUESTED BY: 7 8 REDEVELOPMENT AGENCY OF THE CITY OF 9 SAN BERNARDINO 10 11 WHEN RECORDED MAIL TO: 12 SABO & GREEN 13 A PROFESSIONAL CORPORATION 14 6320 CANOGA AVENUE, SUITE 400 15 WOODLAND HILLS, CALIFORNIA 91367 16 17 18 RELEASE OF LIEN 19 20 The Redevelopment Agency of the City of San Bernardino (the 21 "Agency") hereby releases that certain lien created against that 22 certain property as described in Exhibit "A" attached hereto and 23 incorporated herein by this reference which lien was created pursuant 24 to Section 3.04 of that certain Disposition and Development Agreement 25 by and between the Agency and New Frontier Commercial Properties, Inc. 26 drafted as of and recorded with the County of San Bernardino 27 as Document No. (the "Disposition and Development 28 Agreement"). 29 30 This release of Lien applies only to Developer's obligations 31 with respect to the repayment of the Promissory Note, as more fully 32 described in Section 2.08 of the Disposition and Development Agreement. 33 34 35 36 By: 37 Executive Director 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 Attachment "8" 1~7 1 2 3 4 5 6 7 8 9 10 11 12 13 14 IS 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 . . ATTACHMENT "9" When Recorded, Mail to: CERTIFICATE OF COMPLETION We, , Chairman and Secretary of the Redevelopment Agency of the city of (the "Agency") hereby certify as follows: , San Bernardino By its Resolution No. , adopted and , 199_, the Agency has resolved as follows: approved Section I. The improvements required to be constructed in accordance with that certain Disposition and Development Agreement (the "Agreement") dated , by and between the Agency and New Frontier Commercial Properties, Inc., a California Corporation, (the "Developer") on that certain real property (the "Property") more fully described in Exhibit "A" attached hereto and incorporated herein by this reference, have been completed in accordance with the provisions of said Agreement. Section 2. This Certificate of Completion shall constitute a conclusive determination of satisfaction of the agreements and covenants contained in the Agreement with respect to the obligations of the Developer, and its successors and assigns, to construct and develop the improvements on the Property, excluding any normal and customary tenant improvements and minor building "punch-list" items, and including any and all buildings and any and all parking, landscaping and related improvements necessary to support or which meet the requirements applicable to the building and its use and occupancy on the Property, whether or not said improvements are on the Property or on other property subject to the Agreement, all as described in the Agreement, and to otherwise comply with the Developer's Obligations under the Agreement with respect to the Property and the dates for the beginning and completion of construction of improvements thereon under the Agreement; provided, however, that the Agency may enforce any covenant surviving this Certificate of Completion in accordance with the terms and conditions of the Agreement and the grant deed pursuant to which the Property was conveyed under the Agreement. Said Agreement is an official record of the Agency and a copy of said Agreement may be inspected in the office of the Secretary of the Redevelopment Agency of the City of San Bernardino located at the City Hall, 300 North "D" street, San Bernardino, California 92418, during regular business hours. 9 - I If' i' I 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 section 3. Completion pertains hereto. . . The Property to which this Certificate of is more fully described in Exhibit "A" attached DATED AND ISSUED this day of , 199 . Executive Director of the Redevelopment Agency of the City of San Bernardino 9 - 2 ('11 . . 1 2 3 4 5 6 7 8 9 10 11 12 13 14 IS 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 ATTACHMENT "10" OFFSET STATEMENT AND ESTOPPEL CERTIFICATE OF THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO TO: The Redevelopment Agency of the City of San Bernardino hereby certifies that: In accordance with Section 3.09 of the Disposition and Development Agreement (the "Agreement") by and between the Redevelopment Agency of the City of San Bernardino (the "Agency") and New Frontier Commercial Properties, Inc. (the "Developer"), the Developer has completed all acts pursuant to the Agreement necessary to entitle the Developer to the conveyance of the Property as defined in the Agreement and is not in any default of any of the terms and provisions of the Agreement. Executed on California. -' 19_, at San Bernardino County, I declare under penalty of perjury that the foregoing is true and correct. REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO By: Executive Director Attachment "10" (60 ~ ~,