HomeMy WebLinkAboutAgreement A-22-059 with Heritage Centre LLC - Final Lease Signed.pdf1
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00516.00100/1234166v2
COUNTY OF FRESNO
Fresno, California 1
LEASE AGREEMENT
THIS LEASE AGREEMENT (“LEASE”) is made and entered into this day of
__________, 2022, by and between HERITAGE CENTRE LLC, a California limited liability
company, 1475 Powell Street, Suite 101, Emeryville, California 94608 (“LESSOR”), and the
COUNTY OF FRESNO, a political subdivision of the State of California, 333 Pontiac Way,
Clovis, CA 93612 (“LESSEE”). LESSOR and LESSEE shall also be referred to herein
singularly as a “Party” and collectively as “Parties.”
1. REAL PROPERTY; LEASED PREMISES - LESSOR represents, covenants,
and warrants to LESSEE that LESSOR is the fee title owner of the Real Property, which Real
Property includes the building with an address of 3109, 3115, 3119, 3121, 3127, 3133, 3147,
3151, and 3155 N. Millbrook Avenue and 3676 and 3708 E. Shields Avenue, Fresno, CA
93726 (collectively, the “Building”), together with related paved parking and associated
landscaping, collectively commonly known as Heritage Centre (the Real Property and the
Building are collectively, the “Centre”). The Building is approximately 173,200 square feet,
composed of approximately 151,650 square feet of office space, and approximately 21,550
square feet of storage space, which 21,550 square feet shall be utilized for storage only, as
shown on the site plan attached as Exhibit A, attached and incorporated by this reference (the
“Site Plan”). Subject to the terms and conditions set forth in this LEASE, LESSOR hereby
leases to LESSEE and LESSEE hereby leases from LESSOR the Building, together with all
related paved parking and associated landscaping (collectively, the “Premises”), which
Premises includes the exclusive right to use the Centre’s parking lot, which contains 514
parking stalls. All of these parking stalls shall be restricted to, and available at all times for,
LESSEE’s exclusive use under this LEASE. The legal description of the “Real Property” is set
forth in Exhibit B, which is attached and incorporated by this reference.
2.TITLE – LESSOR agrees that so long as this LEASE is in effect, LESSOR shall
not, from and after the Effective Date, without LESSEE’s prior written consent, which consent
shall not be unreasonably withheld, enter into any recorded easements, covenants, conditions,
and restrictions affecting the Real Property that would materially diminish LESSEE’s rights
22nd
February
Agreement No. 22-059
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00516.00100/1234166v2
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under this LEASE or materially increase LESSEE’s obligations under this LEASE, or adversely
affect LESSEE’s right to purchase the Premises. LESSEE shall comply with, and LESSEE’s
rights and obligations under this LEASE, and LESSEE’s use of the Premises shall be subject
and subordinate to, all recorded easements, covenants, conditions, and restrictions now
affecting the Real Property.
3. PREMISES -
a)LESSEE hereby acknowledges and confirms that LESSOR has
tendered to LESSEE, and LESSEE has accepted, possession of the Premises in the condition
required under this LEASE on the Effective Date.
b) LESSEE acknowledges that: (i) it has been advised by LESSOR and
LESSOR’s broker to satisfy itself with respect to the condition of the Premises (including,
without limitation, the Building’s systems located therein, and the security and environmental
aspects thereof) and the present and future suitability of the Premises for LESSEE’s intended
use; (ii) LESSEE has made such inspection and investigation as it deems necessary with
reference to such matters; and (iii) neither LESSOR nor any of LESSOR’s agents has made
any oral or written representations or warranties with respect to the condition, suitability or
fitness of the Premises, other than as may be specifically set forth in this LEASE.
c)LESSOR and LESSEE agree that for all purposes under this LEASE,
the rentable area of the Premises specified in Section 1 of this LEASE shall be deemed to be
the rentable area of the Premises, and the same shall not be subject to re-measurement or re-
calculation.
d) During the Term, LESSEE will comply with all applicable Laws, at no
cost to LESSOR. LESSEE, at its sole cost and expense, shall obtain and keep in effect during
the Term, all permits, licenses, and other authorizations necessary to permit LESSEE to use
and occupy the Premises for the Permitted Use in accordance with applicable Law. Neither
LESSOR nor any agent of LESSOR has made any representation or warranty regarding the
condition of the Premises, the Building or the Centre or with respect to the suitability of any of
the foregoing for the conduct of LESSEE's business. As used herein, “Law” or “Laws” shall
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mean any one or more present and future laws, Environmental Laws, ordinances, rules,
regulations, permits, codes, authorizations, orders and requirements, to the extent applicable
to the Parties or to the Premises or any portion thereof, whether or not foreseen, unforeseen
or in the present contemplation of the Parties, including all consents or approvals (including
regulatory approvals) required to be obtained from or issued by, and all rules and regulations
of, and all building and zoning laws of, all federal, state, county and municipal governments,
the departments, bureaus, agencies or commissions thereof, authorities, boards of officers,
any national or local board of fire underwriters, or any other body or bodies exercising similar
functions, having or acquiring jurisdiction of, or which may affect or be applicable to, the
Premises or any part thereof, including any subsurface area, the use thereof, and of the
Buildings and improvements thereon.
4. QUIET ENJOYMENT - As long as there is no uncured default on the part of
LESSEE under this LEASE then continuing, LESSOR covenants and warrants to LESSEE that
LESSEE shall have the quiet use and enjoyment of the Premises during the Term without
hindrance from LESSOR or any party claiming by, through, or under LESSOR, subject to the
terms and conditions of this LEASE.
5. TERM - The term of this LEASE shall be for ten (10) years, beginning on March
1, 2022 (the “Effective Date”), and expiring on February 29, 2032 (the “Expiration Date”),
subject to earlier termination as provided in this LEASE (the “Term”). For the avoidance of
doubt, this LEASE shall be binding upon and enforceable against both LESSOR and LESSEE
during the entire Term, and LESSEE’s obligation to pay Rent and otherwise perform under this
Lease shall not be subject to any condition relating to budgets or appropriation of funds by
LESSEE.
6. HAZARDOUS SUBSTANCES
a) Generally – LESSOR shall deliver the Premises to LESSEE so that
there shall not be, as of the Effective Date, any Hazardous Material (as that term is defined
below) present, stored, or disposed of in, under, or about the Premises in violation of any
Environmental Laws (as that term is defined below). LESSOR represents, covenants, and
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warrants to LESSEE that, to LESSOR’s knowledge, as of the Effective Date, there have not
been: (i) any inquiries, investigations, proceedings, or claims by any government agencies or
other persons regarding the presence of Hazardous Material on, under, or about the Premises,
or (ii) any release reports or commitment statements, as those terms are defined in California
Civil Code Section 850, issued with respect to the Premises. Subject to the first sentence of
this Section 6, neither Party shall cause or permit any Hazardous Material to be generated,
brought onto, used, stored, or disposed of in, under, or about the Premises by such Party or its
agents, employees, contractors, subtenants, or invitees, except for such substances that are
required and lawfully used, stored, and disposed of in the ordinary course of LESSOR’s
performance of its obligations under this LEASE, or of LESSEE’s operations conducted at the
Premises, or are otherwise approved by LESSOR, which approval shall not be unreasonably
withheld or delayed. Each Party shall:
i. Use, store, and dispose of all such permitted Hazardous Material
in strict compliance with all Applicable Laws and Regulations that relate to public health and
safety and protection of the environment (“Environmental Laws”), including, without limitation,
those Environmental Laws identified below; and
ii. Otherwise comply at all times during the Term with all
Environmental Laws.
b) Notice – If, during the Term, either LESSOR or LESSEE becomes
aware of (i) any actual or threatened release of any Hazardous Material on, under, or about
the Premises, or (ii) any inquiry, investigation, proceeding, or claim by any government agency
or other person regarding the presence of Hazardous Material on, under, or about the
Premises, that Party shall give the other Party written notice of the release or investigation
within five (5) calendar days after learning of it, and shall simultaneously furnish to the other
Party copies of any claims, notices of violation, reports, or other writings received by the Party
providing notice that concern the release or investigation.
c) Definition – As used in this Section 6, the term “Hazardous Material”
shall mean any hazardous or toxic substance, material, or waste at any concentration that is or
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becomes regulated by the United States, the State of California, or any local government
authority having jurisdiction over the Building. Hazardous Material includes, without limitation:
i. Any “hazardous substance,” as that term is defined in the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA)
(42 United States Code Sections 9601-9675);
ii. “Hazardous waste,” as that term is defined in the Resource
Conservation and Recovery Act of 1976 (RCRA) (42 United States Code Sections 6901-
6992k);
iii. Any pollutant, contaminant, or hazardous, dangerous, or toxic
chemical, material, or substance, within the meaning of any other Applicable Laws and
Regulations (including applicable consent decrees and administrative orders imposing liability
or standards of conduct concerning any hazardous, dangerous, or toxic waste, substance, or
material, now or hereafter in effect);
iv. Petroleum products;
v. Radioactive material, including from any source, special nuclear,
or byproduct material as defined in 42 United States Code Sections 2011-2297b-7;
vi. Asbestos in any form or condition; and
vii. Polychlorinated biphenyls (PCBs) and substances or compounds
containing PCBs.
7. RENT
a) From and after the Effective Date, and throughout the Term, in consideration for
LESSEE’s use of the Premises, LESSEE shall pay to LESSOR, without offset, demand, or
prior notice, with the exception of an offset for abatement pursuant to Sections 16(c) and 15,
herein, on or before the first of each month, base rent according to base rent schedule set
forth in Section 7(b), herein (“Base Rent”) beginning on the Effective Date, as shown in the
payment schedule below:
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b) In addition to Base Rent, LESSEE shall pay to LESSOR, as “Additional Rent”,
the following:
i. the Operating Costs set forth below, and
ii. the TI Rent set forth in Section 10(k) of this LEASE.
c) Base Rent, Additional Rent, and all other sums that LESSEE may owe to
LESSOR or otherwise be required to pay under this LEASE shall be collectively referred to in
this LEASE as “Rent”.
d) Operating Costs. During each calendar year or partial calendar year of the
Term, LESSEE shall pay to LESSOR, concurrently with each monthly installment of Base
Rent, an amount equal to the estimated Operating Costs for such calendar year or part thereof
divided by the number of months therein.
e) Estimated Cost Statement. The Parties shall use the form of Estimated Cost
Statement, attached as Exhibit J, which first Estimated Cost Statement sets forth estimated
amounts that are calculated by LESSOR as of the Effective Date, and to which LESSEE is
deemed to have agreed to the amounts stated therein. From time to time, but not more often
than annually, the Estimated Cost Statement may be revised in response to additional
services being requested by LESSEE. LESSOR may estimate and re-estimate, as applicable,
the Operating Costs, and deliver a copy of the estimate or re-estimate to LESSEE, and shall
provide written justification and evidence for each change in Operating Costs reasonably
satisfactory to LESSEE. LESSEE will either comment on or approve the Estimated Cost
Rent Period Base Rent
Year 1 $220,000.00
Year 2 $220,000.00
Year 3 $220,000.00
Year 4 $220,000.00
Year 5 $220,000.00
Year 6 $230,000.00
Year 7 $230,000.00
Year 8 $230,000.00
Year 9 $230,000.00
Year 10 $230,000.00
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Statement within sixty (60) calendar days following its receipt thereof, and any failure by
LESSEE to provide any comment or disapproval shall be deemed approval of the Estimated
Cost Statement.
If LESSEE disapproves any portion of the Estimated Cost Statement, the Parties shall
promptly meet and confer in good faith, and discuss the reason for the disapproval. If the
Parties reach agreement with respect to the Estimated Cost Statement, LESSOR, if
necessary, shall revise the Estimated Cost Statement accordingly and re-submit it to LESSEE
for its requested approval. LESSEE shall continue to make payments for Additional Rent
under the Estimated Cost Statement previously approved by LESSEE, until LESSEE has
approved the Estimated Cost Statement in writing. Upon approving the Estimated Cost
Statement, LESSEE shall pay Additional Rent based on the approved Estimated Cost
Statement, plus all additional amounts, if any, owed by LESSEE for the period during which
the Parties were in the process of reaching agreement as to the Estimated Cost Statement,
and reached agreement on such amounts. The Parties shall attempt in good faith to resolve
any disagreement regarding the Estimated Cost Statement within sixty (60) calendar days of
the date that LESSOR delivers the Estimated Cost Statement to LESSEE, provided however,
if LESSEE continues to disagree with LESSOR, LESSEE shall pay the disputed amounts
promptly following the end of such sixty (60) day period, but such payment shall be subject to
LESSEE’s right to pursue any remedy allowed by law with respect to such disputed amount.
All amounts paid based on the Estimated Cost Statement shall be subject to
adjustment and reconciliation as provided in Section 7(h), herein, when actual Operating Costs
are available for each calendar year. The term “Operating Costs” shall mean all costs and
expenses that LESSOR incurs in connection with the ownership, operation, maintenance and
repair of the Premises or any portion thereof, including, but not be limited to, the following
costs:
i. Insurance Costs. LESSEE shall pay LESSOR’s insurance costs under
Section 24, herein.
ii. Maintenance Costs. As described in Section 11, herein;
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iii. Utility Costs. All amounts owed to third party service providers for metered
utilities, including water, sewage, garbage, gas, and electricity;
iv. Janitorial Costs. As described in Section 11, herein.
v. A reasonable facility administrative charge equal to 3% of the then-
applicable Base Rent and Operating Costs; and
vi. Tax Costs. LESSEE shall reimburse LESSOR for (1) LESSOR’s actual out
of pocket costs for property taxes and assessments for the Premises,
provided however, (i) LESSEE shall not be responsible for reimbursing
LESSOR for any interest, penalties, or charges due to LESSOR’s late
payment of, or failure to pay, such property taxes, or (ii) in the event of any
change in ownership that results in an increased assessment of property
taxes upon the Premises, LESSOR, or its successor or assign, shall be
solely responsible for any increase in taxes as a result of such change in
ownership.
f) Actual Cost Statement. Within sixty (60) days after the end of each calendar year
during the Term, LESSOR shall furnish to LESSEE a statement of actual Operating
Costs for the previous year (the “Actual Cost Statement”), accompanied by copies
of all supporting documents for each of such items of the Additional Rent. If
LESSEE’s estimated payments of Operating Costs under this Section 7 for the year
covered by the Actual Cost Statement exceed the actual cost of such items for
LESSEE’s use of the Center, as indicated in the Operating Statement, then
LESSOR shall credit or reimburse LESSEE for such excess at the same time as
the issuance of the Actual Cost Statement; likewise, if LESSEE’s estimated
payments of Operating Costs pursuant this Section 7 for such year are less than
LESSEE’s share of the actual cost of such items as demonstrated in the Actual
Cost Statement, then LESSEE shall promptly pay LESSOR such deficiency,
notwithstanding that the Term has expired, and LESSEE has vacated the
Premises.
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g) Operating Audit Rights. Within one hundred eighty (180) days (the “Audit Election
Period”) after LESSOR furnishes to LESSEE the Actual Cost Statement for any
calendar year, LESSEE may, at its expense during LESSOR’s normal business
hours, elect to audit LESSOR’s actual Operating Costs for such calendar year only,
subject to the following conditions: (1) the audit shall be prepared by an
independent certified public accounting firm; (2) in no event shall any audit be
performed by a firm retained on a “contingency fee” basis; (3) the audit shall
commence within thirty (30) days after LESSOR makes LESSOR’s books and
records available to LESSEE’s auditor, and shall conclude within sixty (60) days
after commencement; (5) the audit shall be conducted where LESSOR maintains
its books and records or at an office designated by LESSOR in the reasonable
vicinity of the Centre, and shall not unreasonably interfere with the conduct of
LESSOR’s business; and (6) LESSEE and its accounting firm shall treat any audit
in a confidential manner and shall each execute LESSOR’s commercially
reasonable confidentiality agreement for LESSOR’s benefit prior to commencing
the audit. LESSEE shall deliver a copy of such audit to LESSOR within ten (10)
business days after it is finalized. This paragraph shall not be construed to limit,
suspend or abate LESSEE’s obligation to pay Rent when due, including estimated
Operating Costs. After verification, LESSOR shall credit any overpayment
determined by the audit report against the next Rent due and owing by LESSEE or,
if no further Rent is due, refund such overpayment directly to LESSEE within thirty
(30) days of determination. Likewise, LESSEE shall pay LESSOR any
underpayment determined by the audit report within thirty (30) days of
determination. If the audit finds that LESSEE has overpaid actual Operating Costs,
the Estimated Cost Statement currently in use will be adjusted to reflect the actual
Operating Costs. The foregoing obligations shall survive the expiration or earlier
termination of the LEASE. If LESSEE does not give written notice of its election to
audit during the Audit Election Period, LESSOR’s Operating Costs for the
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applicable calendar year shall be deemed approved for all purposes, and LESSEE
shall have no further right to review or contest the same. If the audit proves that
LESSOR's calculation of Operating Costs for the calendar year under inspection
was overstated by more than five percent (5%) in the aggregate, then, after
verification, LESSOR shall pay LESSEE's actual reasonable audit and inspection
fees applicable to the review of said calendar year statement within thirty (30) days
after production of the audit results to LESSOR.
8. USE – LESSEE shall use the Premises as office space for its Department of
Behavioral Health, or for any other County of Fresno department, office, or agency (the
“Permitted Use”). LESSEE agrees to comply with all applicable laws, ordinances, and
regulations in connection with such use.
9. ALTERATIONS
a) LESSEE shall not make any alterations, additions or improvements (collectively,
the “Alterations”) to the Premises without the prior written consent of LESSOR,
which consent shall not be unreasonably withheld, except for the installation of
unattached, movable trade fixtures which may be installed without drilling, cutting or
otherwise defacing the Premises. For the avoidance of doubt, “Alterations” shall not
include the Tenant Improvements to be performed by LESSOR. LESSEE shall
furnish complete plans and specifications to LESSOR for its reasonable approval at
the time LESSEE requests LESSOR’s consent to any Alterations. Notwithstanding
anything to the contrary set forth herein, LESSEE shall not be required to obtain
LESSOR’s consent with respect to any cosmetic work performed within the
Premises by LESSEE (i.e., paint, carpet and other similar Alterations that do not
affect the Building’s systems or structure). Except with respect to such cosmetic
Alterations, subsequent to obtaining LESSOR’s consent and prior to
commencement of the Alterations, LESSEE shall deliver to LESSOR any building
permit required by applicable Law, and a copy of the executed construction
contract(s) for such Alterations.
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b) If LESSOR consents to the making of any Alteration, such Alteration shall be made
by LESSEE at LESSEE’s sole cost and expense by a contractor approved in
writing by LESSOR, which approval shall not be unreasonably withheld. Any
construction, alteration, maintenance, repair, replacement, installation, removal or
decoration undertaken by LESSEE in connection with the Premises shall be
completed in accordance with the plans and specifications approved by LESSOR,.
c) All work performed, materials furnished, or obligations incurred by or at the request
of LESSEE or any person claiming through or under LESSEE (except for any
LESSEE Improvements) shall be deemed authorized and ordered by LESSEE only,
and LESSEE shall not permit any mechanic’s liens to be filed against the Premises
or the Centre in connection therewith. Upon completion of any such work, LESSEE
shall deliver to LESSOR final lien waivers from all contractors, subcontractors and
materialmen who performed such work. LESSOR and LESSEE acknowledge and
agree that their relationship is and shall be solely that of “landlord-tenant” (thereby
excluding a relationship of “owner-contractor,” “owner-agent” or other similar
relationships). Accordingly, all materialmen, contractors, artisans, mechanics,
laborers and any other persons now or hereafter contracting with LESSEE, any
contractor or subcontractor of LESSEE or any other person claiming through or
under LESSEE for the furnishing of any labor, services, materials, supplies or
equipment with respect to any portion of the Premises, at any time from the date
hereof until the end of the Term, are hereby charged with notice that they look
exclusively to LESSEE to obtain payment for same. This provision shall not include
work done for the Tenant Improvements. Nothing herein shall be deemed a
consent by LESSOR to any liens being placed upon the Premises, Centre or
LESSOR’s interest therein due to any work performed by or for LESSEE or
deemed to give any contractor or subcontractor or materialman any right or interest
in any funds held by LESSOR to reimburse LESSEE for any portion of the cost of
such work. LESSEE shall Indemnify LESSOR from and against all claims,
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demands, causes of action, suits, judgments, damages and expenses (including
reasonable attorneys’ fees) due to the failure of LESSEE to pay for any work
performed, materials furnished, or obligations incurred by or at the request of
LESSEE (excluding any Tenant Improvements). The foregoing indemnity shall
survive expiration or earlier termination of this LEASE.
10. TENANT IMPROVEMENTS
a) LESSOR shall use commercially reasonable efforts to ensure that those
certain tenant improvements (“Tenant Improvements”) for which a Notice to Proceed is timely
issued, are completed, as and to the extent provided in, and in accordance with and subject to
the terms and conditions of, the provisions of this Section 10; provided, however, that the total
cost of all such Tenant Improvements in the aggregate shall not exceed the sum of
$10,000,000 (the “TI Budget”).
b) Notwithstanding anything to the contrary contained herein, LESSOR
shall have no obligation to perform any Tenant Improvements for which a Notice to Proceed is
not received by LESSOR prior to the fifth (5th) anniversary of the Effective Date. If such a
Notice to Proceed is not received by LESSOR prior to the fifth anniversary of the Effective
Date, this LEASE shall be amended to remove all references to the Tenant Improvements,
and LESSEE shall not be responsible to make any payment for any costs associated with the
prior-planned Tenant Improvements. All drawings, plans, and specifications for Tenant
Improvements and any modifications to said Tenant Improvements must be approved in
writing by both LESSOR and LESSEE, in accordance with, this Section 10.
c) As used herein, “TI Costs” shall mean all hard and soft costs of Tenant
Improvements incurred by LESSOR in connection with any Tenant Improvements including,
without limitation, architectural services, interest on the bank loan during construction, and
appraisal fee.
d) LESSOR shall construct Tenant Improvements based on plans
approved by the Department of Behavioral Health regarding the design of the Psychiatric
Health Facilities and other spaces within the Building, in accordance with the procedures set
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forth in this Section 10. The preliminary description of Tenant Improvements is detailed in
Exhibit C, attached and incorporated by this reference. LESSOR and LESSEE agree that final
approved (in writing by both the LESSOR and LESSEE’s Director of Behavioral Health, or their
respective designees) Working Drawings (as defined herein) for the Tenant Improvements and
all required permits for the Tenant Improvements shall be in place prior to the commencement
of construction of the applicable Tenant Improvements. Any modifications to the Working
Drawings after permits are in place shall be approved in writing by both the LESSOR and
LESSEE’s Director of Behavioral Health, or their respective authorized designees, prior to
commencement of construction of such modifications, which approval shall not be
unreasonably withheld or delayed. Should modifications to the Working Drawings requested
by LESSEE’s Director of Behavioral Health delay the completion of the Tenant Improvements,
or cause any increase in the cost of the Tenant Improvements that exceed the TI Budget, then
LESSEE shall be responsible for the cost associated with those modifications. LESSOR shall
provide all labor, material, and equipment for the completion of any Tenant Improvements in
accordance with this Section 11 and the Working Drawings, subject to LESSEE’S Rent
obligations hereunder.
e) Preliminary Plans. The form to be used for LESSEE’s request for the
construction of Tenant Improvements is described in Exhibit C. Following delivery of such
request, LESSOR shall, with LESSEE’s cooperation, cause the preparation of schematic,
design development and/or other preliminary plans, in LESSOR’s discretion, by a design
consultant(s) engaged by LESSOR (collectively, the “Consultant”) depicting the applicable
Tenant Improvements to be installed in the Premises (the “Preliminary Plans”). Each Party
shall communicate to the other Party any disapproval or objection to the Preliminary Plans, or
drafts thereof, in reasonable detail, within 10 days of the preparation of the Preliminary Plans.
LESSOR and LESSEE shall use commercially reasonable efforts to finalize and jointly
approve such Preliminary Plans.
f) Working Drawings. Following the written approval by both Parties of the
Preliminary Plans, LESSOR shall, with LESSEE’s cooperation, cause the preparation of final
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working construction drawings for the applicable Tenant Improvements (the “Working
Drawings”). Each Party shall promptly communicate to the other Party any disapproval or
objection to the Working Drawings, or drafts thereof, in reasonable detail. LESSOR and
LESSEE shall use commercially reasonable efforts to promptly finalize and jointly approve
such Working Drawings.
g) Cost of Work. LESSOR and LESSEE shall use commercially
reasonable efforts to promptly finalize and jointly approve such TI Costs and any revisions to
the Working Drawings necessary to achieve a mutually acceptable TI Costs budget.
Notwithstanding the foregoing or anything to the contrary contained in this Section 10, in no
event shall the aggregate TI Costs for all phases of Tenant Improvements hereunder exceed
the total TI Budget of $10,000,000, unless the Parties mutually agree in writing, through an
amendment to this LEASE, in their respective sole and absolute discretion, to increase the TI
Budget or otherwise to provide for the payment of the excess TI Costs.
h) Notice to Proceed. Both the final Working Drawings and the TI Costs
budget for such work shall be subject to approval by both Parties. LESSEE shall evidence its
approval of final Working Drawings and the TI Costs associated therewith by giving written
notice thereof to LESSOR (“Notice to Proceed”), and such approval shall be irrevocable and
unconditional. Upon receiving such Notice to Proceed, LESSOR shall proceed to commence
and diligently pursue the construction and completion of the approved Tenant Improvements in
a good and workmanlike manner; provided however, that LESSOR shall have no obligation to
construct any Tenant Improvements for which LESSOR does not receive a Notice to Proceed
prior to the fifth (5th) anniversary of the Effective Date.
i) Change Orders; Cost Increases. Any actual increase in TI Costs for
Tenant Improvements resulting from any of the following events or conditions shall be added
to the applicable TI Costs budget for the Tenant Improvements, and included in the calculation
of TI Rent:
1. Any changes requested by LESSEE in writing to the Tenant
Improvements described in Working Drawings covered by a Notice
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to Proceed (each, a “Change Order”), which in any event shall be
subject to LESSOR’s reasonable approval;
2. Any event of Force Majeure, including acts of God, strikes, lockouts,
breakdowns, accidents, war, acts of terrorism (whether local,
national or global in nature). LESSOR shall promptly inform LESSEE
of the occurrence of any such Force Majeure and the reasonably
anticipated and increased costs and expenses, to the extent then
known, and LESSOR shall cooperate with LESSEE to reduce or
otherwise minimize any resulting increase in TI Costs; and
3. Any delay caused by any act, omission, negligence, misconduct,
failure to act or failure to timely respond by LESSEE.
j) Substantial Completion; Walk-Through; Punchlist. When LESSOR
considers the applicable Tenant Improvements to be substantially completed, LESSOR shall
notify LESSEE (a “Substantial Completion Notice”) and promptly thereafter, LESSOR and
LESSEE shall conduct a walk-through of the Premises, and identify any necessary punchlist
items that are necessary for final completion of the Work. LESSEE’s failure to object in writing
or provide a punchlist within ten (10) days after receipt of a Substantial Completion Notice, or
LESSEE’s occupancy of the applicable portion of the Premises, shall be deemed LESSEE’s
agreement that the applicable Tenant Improvements are completed.
k) TI RENT. In consideration of the TI Costs incurred by LESSOR in
connection with this Section 10, LESSEE shall pay Additional Rent to LESSOR, which shall be
calculated by LESSOR and paid by LESSEE in accordance with the following provisions (“TI
Rent”):
a. The amount of the cost for each completed separate Tenant
Improvement “Task” as listed on the schedule in Exhibit C (whether a
Tenant Improvement has been completed shall be determined in
accordance with Section 10(j) above) shall be increased at the rate of
8% per annum from the date expended through the first day of the
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calendar month following Task completion (as so increased, collectively,
the “Task TI Cost”);
b. As of the first day of the following calendar month (each, an
“Amortization Date”), LESSOR shall calculate the monthly payment (a
“TI Rent Increment”) necessary to amortize that completed Task TI Cost
at the rate of 8% per annum in equal monthly installments over the
period commencing on the Amortization Date, and ending on February
1, 2032 (the “Final Rent Date”).
c. Each TI Rent Increment shall become Additional Rent, and shall be
added to the TI Rent payable by LESSEE for the remaining term of the
LEASE. The monthly TI Rent Increment amount for each Task TI Cost
shall be due and payable as TI Rent commencing on the first day of the
month following the Amortization Date, and continuing through, and
including, the Final Rent Date. The example in Exhibit C with
assumptions shows monthly TI Rent not exceeding $141,366.79.
d. The parties agree that if, at any point during the Term of this LEASE,
LESSEE elects to pay off the total outstanding TI Rent early, there shall
be no prepayment penalty, and each amount of prepaid TI Rent shall be
reduced by an 8% discount rate from the date otherwise payable
hereunder.
l) CONSTRUCTION REPRESENTATIVES. Each of LESSOR’s and
LESSEE’s primary representatives for coordination of construction and any related activities
(including any required approvals) shall be as follows, provided that either party may change
its representative at any time upon written notice to the other Party:
LESSOR’s Representative: Steve Schwartz
c/o Orton Development, Inc.
1475 Powell Street, Suite 101
Emeryville, CA 94608
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Telephone: (510) 812-6469
E-mail: sschwartz1@sbcglobal.net
LESSEE’s Representative: Division Manager, Administration
c/o Department of Behavioral Health
1925 Dakota Avenue
Fresno, CA 93726
Telephone: (559) 600-9054
E-mail: hherrera@fresnocountyca.gov
11. MAINTENANCE AND REPAIRS
a) LESSOR shall be responsible for all exterior and interior maintenance of the
Premises, including all LESSEE improvements, repair of air conditioning, heating units,
plumbing systems, electrical systems, interior light fixture ballasts, and lamp replacement fire
sprinkler system, roof, painting, flooring, landscape, quarterly parking lot sweeping, parking lot
lighting, pest and bird control, and parking and other common area maintenance at the
Premises, including janitorial service and supplies. Janitorial service shall be provided five (5)
days per week, and shall include the services listed in Exhibit D, attached, and incorporated by
this reference. LESSOR is also responsible for the structural condition of the Building, and
covenants and agrees that the Building shall always be maintained in a condition suitable for
the LESSEE'S intended use of the Premises, and in substantially the same condition as that
existing at the commencement of this LEASE. LESSOR’s maintenance responsibilities shall
include exterior painting, as needed, due to normal wear and tear. All costs and expenses
incurred by LESSOR in connection with its maintenance and repair obligations under this
LEASE shall be included in Operating Costs.
b) In the event any Building systems such as air conditioning and heating units,
malfunction, restroom fixtures are not draining properly, or water intrusion, leaks or other
events that immediately impact LESSEE’s occupancy of the Premises occur, LESSOR shall
respond within twenty-four (24) hours after contact by LESSEE to initiate repairs, and replace
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equipment to restore the systems to full working order. Structural issues, including but not
limited to damaged doors, walls, roof, and windows shall be a priority, and shall be addressed
within the same day such are reported.
c) If LESSOR fails to complete the repairs described in subsection 11(b), herein,
by five (5) days after notification by LESSEE, and if such failure to complete these repairs
continues to impact LESSEE’s occupancy of the Premises, the parties agree that LESSEE
shall have the right to initiate and complete the repairs, without further notice to LESSOR. This
remedy is in addition to the remedies provided in Section 14, herein.
d) In the event that the Premises needs repairs required to be made by LESSOR
hereunder, LESSEE shall give prompt written notice thereof to LESSOR, and LESSOR shall
promptly make such repairs. LESSOR shall not be liable to LESSEE for any interruption of
LESSEE’s business or for any loss of income or profit therefrom or for inconvenience caused
due to any work performed in the Premises or in the Centre pursuant to LESSO R’s rights and
obligations under this LEASE or due to any work otherwise undertaken by LESSOR. LESSOR
shall use commercially reasonable efforts to cause such work to be performed in such
manner, as will reduce interference with the conduct of LESSEE’s business in the Premises, to
the extent reasonably practicable under the circumstances.
12. COMPLIANCE WITH ALL LAWS – LESSOR represents, covenants, and
warrants to LESSEE that the Premises shall be, upon the Delivery Date, in compliance with all
Applicable Laws and Regulations. By way of example of the foregoing obligations of LESSOR,
and not as a limitation on any of LESSOR’s obligations, herein, LESSOR shall, with respect to
the Premises, be solely responsible for all applicable seismic safety requirements, as set forth
in the most current edition of the California Building Code (CBC) adopting the ICC
International Code Conference, Title 24 of the California Code of Regulations, all applicable
then-current requirements for accessibility by persons with disabilities, including, but not
limited to, the Americans With Disabilities Act (42 United States Codes, secs. 12101, et seq.,
and all related guidelines, standards, and regulations), and all Applicable Laws and
Regulations concerning the presence of mold and mold contamination in buildings, and the
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presence of asbestos and asbestos containing materials and in buildings. All costs and
expenses incurred by LESSOR in connection with its compliance obligations under this
LEASE shall be included in Operating Costs.
13. Prevailing Wages - As to the Premises, LESSOR acknowledges public funds
are used for payments made by LESSEE under this LEASE and for “public works” projects.
Accordingly, in connection with this LEASE (including construction of the Tenant
Improvements) LESSOR shall comply with, and shall ensure compliance by all contractors and
subcontractors with, all applicable laws and regulations, including the payment of prevailing
wages pursuant to Section 1770 et. seq. of the Labor Code.
a. Determination of Prevailing Wage Rates – In accordance with Labor
Code section 1770, et seq., the Director of the Department of Industrial Relations of the State
of California has determined the general prevailing wages rates and employer payments for
health and welfare pension, vacation, travel time and subsistence pay as provided for in
Section 1773.1, apprenticeship or other training programs authorized by Section 3093, and
similar purposes applicable to the work to be done.
b. Website – Information pertaining to applicable Prevailing Wage Rates
may be found on the website for the State of California – Department of Industrial Relations:
http://www.dir.ca.gov/oprl/PWD/index.htm. Information pertaining to applicable prevailing wage
rates for apprentices may be found on the website for the State of California – Department of
Industrial Relations: http://www.dir.ca.gov/oprl/pwappwage/PWAppWageStart.asp.
c. Requirement – It shall be mandatory upon LESSOR, and any
contractors or subcontractors utilized by LESSOR to pay not less than the prevailing wage
rates, including overtime and holiday rates, to all workers, laborers, or mechanics employed on
this public work project, including those workers employed as apprentices. Further, LESSOR
shall comply with Labor Code sections 1777.5 and 1777.6 concerning the employment of
apprentices. A copy of the above-mentioned prevailing wage rates shall be posted by
LESSOR at the site, where it will be available to any interested party.
d. Penalty – LESSOR shall comply with Labor Code section 1775 and
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shall forfeit as a penalty to LESSEE Two Hundred Dollars ($200.00) for each calendar day or
portions thereof, for each worker paid less than the prevailing wage rates for the work or craft
in which the worker is employed for any work done by LESSOR in violation of Labor Code
section 1770, et seq. In addition to the penalty, the difference between the prevailing wage
rates and amount paid to each worker for each calendar day or portion thereof for which each
worker was paid less than the prevailing wage rate shall be paid to each worker by LESSOR.
e. Record-Keeping – LESSOR shall keep an accurate record showing the
name, address, social security number, work classification, straight time and overtime hours
worked each day and week, and the actual per diem wages paid to each journeyman,
apprentice, worker, or other employee employed by him or her in connection with this public
work project. In accordance with Labor Code section 1776, each payroll record shall be
certified and verified by a written declaration under penalty of perjury stating that the
information within the payroll record is true and correct and that LESSOR has complied with
the requirements of Labor Code sections 1771, 1811 and 1815 for any work performed by its
employees on this public work project. These records shall be open at all reasonable hours to
inspection by LESSEE, its officers and agents, and to the representatives of the State of
California – Department of Industrial Relations, including but not limited to the Division of
Labor Standards Enforcement.
f. LESSOR shall promptly provide a copy to LESSEE of any
correspondence, notices, and/or orders, in any written form, and/or any documents initiating
legal action (collectively, “DIR Administrative or Legal Action”) by or on behalf of the Director of
the Department of Industrial Relations of the State of California, including any representative
thereof (collectively, the “DIR”) to or against LESSOR, and LESSOR’s written responses, in
any written form, thereto, that relate to any Work, or any portion thereof, provided however,
LESSOR’s provision of such copy of any DIR Administrative or Legal Action, and/or
LESSOR’s responses thereto, or failure to provide same or to timely provide same, shall not
impose any obligation upon LESSEE with respect to LESSOR’s obligations under this Section
13. LESSOR acknowledges that the DIR provides the following internet resource:
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https://www.dir.ca.gov/OPRL/DPreWageDetermination.htm
14. BREACH OF OBLIGATION TO MAINTAIN - In the event LESSOR breaches its
obligation to maintain the Premises as herein provided, LESSEE shall give written notice to
LESSOR within fifteen (15) days of its discovery of such breach. LESSOR shall then have
thirty (30) days from the date of such notice to cure its breach, provided, however, that if the
item of maintenance requires more than (30) days to complete, then LESSOR will not be in
default hereunder if within such thirty (30) day period, LESSOR commences the work on such
maintenance and diligently and in good faith prosecutes the same to completion. Subject to
the foregoing, if the period for cure expires and if, in LESSEE'S commercially reasonable
determination, LESSOR has failed to cure, then LESSEE may, as its sole and exclusive
remedy, cure LESSOR's breach.
15. SOLE RISK OF LESSEE – All personal property of LESSEE, including goods,
wares, merchandise, inventory, trade fixtures and other personal property of LESSEE, shall be
stored at the sole risk of LESSEE. Except to the extent caused by the negligence or
misconduct of LESSOR or its agents, employees or contractors, LESSOR shall not be liable
under any circumstances for any loss, injury or damage to property resulting from fire,
explosion, falling plaster, steam, gas, electricity, water or rain which may leak from any part of
the Centre or from the pipes, appliances or plumbing works therein or from the roof, street or
subsurface or from any other places resulting from dampness or from any other cause
whatsoever, it being understood that LESSEE’s sole recourse in the event of any such loss,
injury or damage will be to file a claim on the insurance policies that LESSEE maintains.
LESSEE, as a material part of the consideration to LESSOR hereunder, hereby assumes all
risk of damages to LESSEE’s property or business arising from any cause, except to the
extent caused by the negligence or misconduct of LESSOR or its agents, employees or
contractors, and LESSEE hereby waives all claims in respect thereof against LESSOR or its
agents, employees or contractors.
16. DESTRUCTION OR DAMAGE FROM CASUALTY - If the Premises are damaged
or destroyed as a result of fire, earthquake, act of God, or any other identifiable event of a
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sudden, unexpected, or unusual nature (a "Casualty"), then LESSOR shall either promptly and
diligently repair the damage as and to the extent provided in this Section 16, or terminate this
LEASE as provided hereinbelow.
a) LESSOR'S Election to Repair: If LESSOR elects to repair the Casualty
damage to the Premises, then it shall, within fifteen (15) days after the date of Casualty,
provide written notice ("Notice of Repair") to LESSEE indicating the anticipated time required
to repair. LESSOR shall bear the cost of all repairs to the Premises, including the cost to
repair any alterations or fixtures installed or attached thereto by LESSEE, but excluding any
furniture, equipment, and other personal property of LESSEE or others in the Premises. Such
repairs shall restore the Premises to substantially the same condition as that existing at the
commencement of this LEASE; such repairs shall also be made in compliance with all
applicable state and local building codes. LESSOR shall not be liable to LESSEE for
compensation for any loss of business, or any inconvenience or annoyance arising from repair
of the Premises as a result of the Casualty, except for Rent reduction as herein provided.
LESSEE shall be responsible at its sole cost and expense for the replacement of its personal
property.
b) LESSOR'S Election to Terminate Due to Casualty: LESSOR may only
elect to terminate this LEASE due to Casualty if: more than fifty percent (50%) of the Premises
have been destroyed or substantially destroyed by said Casualty, or the estimated time to
repair the Premises exceeds sixty (60) days from the date of the Casualty. LESSOR shall
provide LESSEE with written notice of its election to terminate within thirty (30) days after the
date of Casualty, specifying a termination date not less than thirty (30) days from the date of
said notice.
c) Rent Reduction Due to Casualty: In the event of Casualty, LESSEE'S
obligation to pay Rent shall be reduced beginning on the date of the Casualty. During this
period of abatement, LESSEE shall only pay Rent for the portion of the Premises that LESSEE
is able to use and occupy. If LESSOR elects to repair the Premises pursuant to the terms of
this LEASE, then such Rent reduction shall continue until the date of substantial completion of
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repairs.
d) LESSEE'S Election to Terminate Due to Casualty: Provided LESSEE
does not receive a Notice of Repair from LESSOR within thirty (30) days after a Casualty, or if
the anticipated period of repair contained in the Notice of Repair exceeds sixty (60) days, then
LESSEE may elect to terminate this LEASE by providing thirty (30) days prior written notice to
LESSOR. In such case, LESSEE shall have the right to demand that LESSOR refund any
monies which, in the judgment of LESSEE, were paid to LESSOR pursuant to the LEASE but
which were not earned by LESSOR by consequence of the Casualty. Upon receipt of such
demand, LESSOR shall promptly refund all such monies.
17. DEFAULT AND TERMINATION
a) LESSEE’S Default – LESSEE shall be in default under this LEASE if
LESSEE fails to perform any of its obligations hereunder and:
i. if the failure is a failure to pay Rent, or any other failure that can
be cured by the payment of money, and the failure continues uncured for a period of fifteen
(15) calendar days after written notice from LESSOR, provided, however, LESSOR shall have
no obligation to provide such written notice more than two (2) times in any twelve (12)
consecutive month period, or
ii. if the failure is in any of the other provisions of this LEASE, and
such failure continues uncured for a period of thirty (30) calendar days after written notice from
LESSOR, unless such cure is not capable of completion within thirty (30) calendar days, in
which case LESSEE shall be afforded such additional time as may be reasonably necessary
to complete the cure, provided LESSEE commences the cure within thirty (30) calendar days
of LESSOR’s notice and diligently pursues such cure to completion, or, in the event of a
threatened injury to life or property due to such failure, continues for such lesser period as
LESSOR may reasonably specify in such written notice.
iii. Notwithstanding anything herein to the contrary, LESSEE shall
not be in default under this LEASE solely because of LESSEE’s failure to pay any amounts
hereunder, including any portion of the Rent, that would be due and payable herein, if such
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amounts are subject to abatement as set forth in Sections 16(c) and/or 20, herein.
b) LESSOR’S Remedies – In the event of a default by LESSEE, in addition
to any other rights and remedies of LESSOR at law or equity, LESSOR shall have the
following rights and remedies. All remedies herein conferred on LESSOR shall, to the fullest
extent permitted by law, be deemed cumulative, and not one exclusive of the other or of any
other remedy conferred by law or in equity, and nothing herein shall prevent LESSOR from
pursuing any and all other remedies it may have upon LESSEE’S default.
i. Election to Continue or Terminate Lease – LESSOR shall have
the right to elect either to continue or terminate this LEASE, as follows:
1. Continuation of Lease – LESSOR shall have the remedy
described in California Civil Code Section 1951.4, specifically LESSOR may continue this
LEASE in effect after LESSEE’S breach and abandonment and recover Rent as it becomes
due, if LESSEE has the right to sublet or assign, subject only to reasonable limitations.
Accordingly, if LESSOR does not elect to terminate this LEASE due to a default by LESSEE,
LESSOR may, from time to time, without terminating this LEASE, enforce all of its rights and
remedies under this LEASE, including the right to recover all Rent as it becomes due.
2. Termination of Lease – LESSOR shall have the right to
terminate this LEASE, by giving written notice of termination to LESSEE. Absent such written
notice, no acts of LESSOR under this subsection 17(b)(i) (including entering, repairing,
preparing to re-let, or re-letting the Premises) shall be construed as an election to terminate
this LEASE. In the event LESSOR terminates this LEASE pursuant to this subsection 17(b)(i),
LESSEE shall immediately surrender the Premises to LESSOR.
3. No Acceleration of Future Rent or Other
Payments/Amounts – Notwithstanding anything to the contrary contained herein this LEASE,
or any right or remedy of which LESSOR may otherwise avail itself pursuant to applicable law,
any right of LESSOR to recover any Rent as provided in this LEASE shall be without
acceleration of any future Rent before it is due and payable hereunder. LESSOR hereby
expressly waives its right to accelerate Rent in the event of a termination of this LEASE,
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pursuant to California Civil Code section 1951.2.
18. TERMINATION NOTICES – In the case of LESSEE, the County Administrative
Officer, Director of Internal Services/Chief Information Officer, Director of Behavioral Health, or
a designee of one of them, shall have the power to provide termination notices as described
herein to terminate this LEASE.
19. HOLDING OVER. If LESSEE fails to vacate the Premises at the end of the
Term, then LESSEE shall be a tenant at sufferance and, in addition to all other damages and
remedies to which LESSOR may be entitled for such holding over: (a) LESSEE shall pay, in
addition to the other Rent, Base Rent equal to one hundred twenty-five percent (125%) of the
Base Rent payable during the last month of the Term; and (b) LESSEE shall otherwise
continue to be subject to all of LESSEE’s obligations under this LEASE. The provisions of this
Section 19 shall not be deemed to limit or constitute a waiver of any other rights or remedies of
LESSOR or LESSEE provided herein or at Law.
20. CONDEMNATION.
a) Total Condemnation. If the entire Premises are taken by exercise of the right of
eminent domain or condemnation (“Condemnation”), this LEASE shall terminate as
of the date of the Condemnation.
b) Partial Condemnation - LESSEE's Rights. If any part of the Premises becomes
subject to a Condemnation, and such Condemnation will prevent LESSEE from
conducting its other business within the remaining Premises in a manner
reasonably comparable to that conducted immediately before such Condemnation
for a period of more than one hundred eighty (180) days, provided the condemning
authority for such Condemnation is not the County of Fresno or any department or
office thereof, then LESSEE may terminate this LEASE as of the date of such
Condemnation by giving written notice to LESSOR within thirty (30) days after the
Condemnation, and Rent shall be prorated as of the date of such Condemnation. If
LESSEE does not terminate this LEASE, then Rent shall be abated as to that
portion of the Premises rendered untenantable by the Condemnation.
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c) Partial Condemnation - LESSOR's Rights. If any material portion, but less than all,
of the Premises becomes subject to a Condemnation, or if LESSOR is required to
pay any of the proceeds arising from a Condemnation to a Mortgagee, then
LESSOR may terminate this LEASE by delivering written notice thereof to LESSEE
within thirty (30) days after such Condemnation. If LESSOR does not so terminate
this LEASE (and LESSEE has not terminated this LEASE), then this LEASE will
continue, but if any portion of the Premises has been taken, or is unusable for
LESSEE’s business, Rent shall abate as provided in Section 20(f).
d) Award. If any Condemnation occurs, then LESSOR shall receive the entire award
or other compensation for the Land, the Premises, and other improvements taken;
however, LESSEE may separately pursue a claim (to the extent it will not reduce
LESSOR's award) against the condemnor for the value of LESSEE's personal
property which LESSEE is entitled to remove under this LEASE, moving costs, loss
of business, and other claims it may have.
e) Repair. If this LEASE is not terminated, LESSOR shall proceed with diligence to
restore the remaining part of the Premises to its former improved condition,
immediately preceding the date of condemnation. In no event shall LESSOR be
required to spend more than the condemnation proceeds and insurance proceeds
received by LESSOR for such repair.
f) Rent. During any period of Condemnation, LESSEE shall only pay Rent for the
portion of the Premises that LESSEE is able to use and occupy
21. PERSONAL PROPERTY TAXES. LESSEE shall be liable for all taxes levied or
assessed against any specialty improvements installed in the Premises by LESSEE and
LESSEE’s personal property, furniture, or fixtures placed by LESSEE in the Premises or in or
on the Centre. If any taxes for which LESSEE is liable are levied or assessed against
LESSOR or LESSOR’s property, and LESSOR elects to pay the same, then LESSEE shall
pay to LESSOR, within forty-five (45) days following written request therefor, the part of such
taxes for which LESSEE is primarily liable hereunder, as reasonably determined by LESSEE.
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22. CALIFORNIA CIVIL CODE SECTION 1938. LESSOR and LESSEE
acknowledge and agree that the Premises have not been inspected by a Certified Access
Specialist ("CASp") pursuant to Section 1938 of the Civil Code ("Code"). The parties further
agree, pursuant to subdivision (e) of Section 55.53 of the Code, to the following:
a) A CASp can inspect the Premises and determine whether the Premises comply
with all of the applicable construction-related accessibility standards under state
law. Although state law does not require a CASp inspection of the Premises,
LESSOR may not prohibit LESSEE from obtaining a CASp inspection of the
Premises for the occupancy or potential occupancy of LESSEE, if requested by the
LESSEE. The parties shall mutually agree on the arrangements for the time and
manner of the CASp inspection, the payment of the fee for the CASp inspection,
and the cost of making any repairs necessary to correct violations of the
construction-related accessibility standards within the Premises.
b) Pursuant to the paragraph above, the parties expressly agree that, if LESSEE
elects to obtain a CASp inspection of the Premises, LESSEE shall be solely
responsible for scheduling the inspection, and that such inspection shall not
unreasonably interfere with the operations of the Premises and/or the Building or
disturb any other tenant or occupant thereof. LESSEE shall be solely responsible
for any and all costs to perform the CASp inspection, including any ancillary costs
relating thereto. If the results of the inspection determine that modifications or
alterations are required to meet all applicable construction-related accessibility
standards, LESSEE agrees to perform such work, in its sole cost and expense.
LESSEE agrees that all work shall be performed in a first-class manner in
compliance with all laws, and using best efforts to minimize any disruption to the
Premises and/or the Building.
23. HOLD HARMLESS
LESSOR agrees to indemnify, save, hold harmless, and at LESSEE'S request, defend
LESSEE, its officers, agents, and employees from any and all costs and expenses (including
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attorney’s fees and costs), damages, liabilities, claims, and losses occurring or resulting to
LESSEE in connection with the performance, or failure to perform, by LESSOR, its officers,
agents, or employees under this LEASE, and from any and all costs and expenses (including
attorney’s fees and costs), damages, liabilities, claims, and losses occurring or resulting to any
person, firm, or corporation who may be injured or damaged by the performance, or failure to
perform by LESSOR, its officers, agents, or employees under the LEASE. This LEASE is
made upon the express condition that the LESSEE is to be free of all liability, damages, or
injury arising from structural failures of the Leased Premises, including, but not limited to,
external walls, glass, doors, roof, and floor. The parties acknowledge that as between
LESSOR and LESSEE, each is responsible for the negligence of its own employees and
invitees.
Limitation on Liability. Notwithstanding any other term or provision of this LEASE, (a)
LESSOR and its partners, shareholders or members shall not be personally liable for any
deficiency; (b) neither LESSOR nor its partners, shareholders or members will be liable under
any circumstances for injury or damage to, or interference with LESSEE’s business, including
loss or profits, loss of rents or other revenues, loss of business opportunity, loss of goodwill or
loss of use or other consequential or speculative damages, in each case, however occurring;
(c) LESSEE, and its officers, employees, agents and assigns shall not be personally liable for
any deficiency; and (d) neither LESSEE, nor its officers, employees, agents or assigns will be
liable under any circumstances for injury or damage to, or interference with LESSOR’s
business, including loss or profits, loss of rents or other revenues, loss of business
opportunity, loss of goodwill or loss of use or other consequential or speculative damages, in
each case, however occurring.
No Liability for Consequential, Incidental or Punitive Damages. Neither LESSOR nor
LESSEE shall not be liable under any circumstances for any consequential, incidental, or
punitive damages. Notwithstanding anything to the contrary contained in this LEASE, neither
Party shall have any right to sue the other party for any consequential, punitive or incidental
damages (including, without limitation, any claims for lost profits, sales and income, and/or lost
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business opportunity and reputation, and/or losses for rental expenses, disruption,
depreciation, insurance or bonding capacity, and/or losses due to management or employee
productivity or the services of such persons).
24. INSURANCE
a) LESSOR – Without limiting the LESSEE’s right to obtain indemnification from
LESSOR or any third parties, LESSOR, at its sole expense, shall maintain in
full force and effect, the following insurance policies or a program of self-
insurance, including but not limited to, an insurance pooling arrangement of
Joint Powers Agreement (JPA) throughout the term of this LEASE:
i. Commercial General Liability - Commercial General Liability Insurance with
limits of not less than Two Million Dollars ($2,000,000) per occurrence and
an annual aggregate of Four Million Dollars ($4,000,000). This policy shall
be issued on a per-occurrence basis. COUNTY may require specific
coverages including completed operations, products liability, contractual
liability, Explosion-Collapse-Underground, fire legal liability, or any other
liability insurance deemed necessary because of the nature of this contract.
ii. Property Insurance – Against all risk of loss to property, at full replacement
cost with no coinsurance penalty provision.
iii. Rental Loss Insurance – A policy of rental interruption or rental loss
insurance against loss, total, or partial, of the use and occupancy of the
Premises, in an amount sufficient to pay Rent hereunder for a twenty-four
(24) month period, as a result of the hazards covered by the insurance
policy required under Section 24(a)(ii), herein.
iv. Worker’s Compensation - A policy of Worker’s Compensation insurance as
may be required by the California Labor Code.
LESSOR shall obtain endorsements to the Commercial General Liability insurance
naming the County of Fresno, its officers, agents, and employees, individually and collectively,
as additional insureds, but only insofar as the operations under this LEASE are concerned. Such
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coverage for additional insureds shall apply as primary insurance and any other insurance, or
self-insurance, maintained by LESSEE, its officers, agents, and employees shall be excess only,
and not contributing with insurance provided under LESSOR’S policies herein. This insurance
shall not be cancelled or changed without a minimum or thirty (30) days advance written notice
given to LESSEE.
LESSOR hereby waives its right to recover from LESSEE, its officers, agents, and
employees any amounts paid by the policy of worker’s compensation insurance required by
this Agreement. LESSOR is solely responsible to obtain any endorsement to such policy that
may be necessary to accomplish such waiver of subrogation, but LESSOR’s waiver of
subrogation under this paragraph is effective whether or not LESSOR obtains such an
endorsement.
Within (30) days from the date LESSOR executes this LEASE, LESSOR shall provide
certificates of insurance and endorsement as stated above for all of the foregoing policies, as
required herein, to the County of Fresno, Attn: ISD Lease Services (L-337), 333 W. Pontiac
Way, Clovis, CA 93612, stating that such insurance coverages have been obtained and are in
full force; that the County, its officers, agents and employees will not be responsible for any
premiums on the policies; that for such worker’s compensation insurance the CONTRACTOR
has waived its right to recover from the COUNTY, its officers, agents, and employees any
amounts paid under the insurance policy and that waiver does not invalidate the insurance
policy; that such Commercial General Liability insurance names the County, its officers, agents,
and employees, individually and collectively, as additional insured, but only insofar as the
operations under this LEASE are concerned. Coverage for additional insured shall apply as
primary insurance and any other insurance, or self-insurance, shall not be cancelled or changed
without a minimum of thirty (30) days advance, written notice given to County.
In the event LESSOR fails to keep in effect at all times insurance coverage as herein
provided, LESSEE may, in addition to other remedies it may have, suspend, or terminate this
LEASE upon the occurrence of such event.
All policies shall be with admitted insurers licensed to do business in the State of
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California. Insurance shall be purchased from companies possessing a current A.M. Best
Company rating of A FSC VII or better.
b) LESSEE – LESSEE shall maintain, at LESSEE’s sole cost and expense, during
the Term of this LEASE the following policies of insurance, which coverages
may be provided in whole or in part through one or more programs of self-
insurance:
i. Commercial General liability insurance with limits of not less than Two
Million Dollars ($2,000,000.00) per occurrence and an annual aggregate of
not less than Four Million Dollars ($4,000,000.00). This policy shall be
issued on an occurrence basis.
ii. Property insurance covering the personal property of LESSEE.
iii. A policy of Worker’s Compensation insurance as may be required by the
California Labor Code.
25. ESTOPPEL CERTIFICATE – LESSEE shall, at any time upon not less than forty-
five (45) days prior request by LESSOR, execute, acknowledge, and deliver to LESSOR a
written estoppel certificate, in a form satisfactory to LESSOR and LESSEE, certifying that this
LEASE is unmodified and in full force and effect (or, if there have been modifications, that the
same is in full force and effect as modified and stating the modifications), to LESSEE’s
knowledge, whether or not any breach or default exists hereunder, and, if applicable, the
current Rent amounts and the dates to which the Rent and any other charges have been paid,
and to LESSEE’s knowledge, whether or not any offsets, defenses or abatements then exist.
Any such statement delivered pursuant to this Section 25 may be relied upon by third persons,
including a prospective purchaser or encumbrancer of the Premises.
LESSEE’s Director of Internal Services/CIO, or his/her designee, shall be authorized to
execute the estoppel certificate for LESSEE. However, LESSOR acknowledges that
LESSEE’s Director of Internal Services/CIO may desire for LESSEE’s Board of Supervisors to
act on behalf of LESSEE with respect to any approval of any estoppel certificate for LESSEE,
which shall be at a regularly-scheduled meeting of LESSEE’s Board of Supervisors within the
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foregoing forty-five (45) calendar day time limit.
LESSEE’S failure to execute and deliver an estoppel certificate within forty-five (45)
days after LESSEE’S receipt of LESSOR’S written request therefore shall be conclusive upon
LESSEE that this LEASE is in full force and effect, without modification except as may be
represented by LESSOR, that there are no uncured defaults in LESSOR’S performance, that
not more than one month’s rental has been paid in advance, and that all other statements set
forth in the estoppel certificate requested by LESSOR are conclusively made.
26. SUBORDINATION AND ATTORNMENT – This LEASE shall be subject and
subordinate to any deed of trust, mortgage or other security instrument now existing or
hereafter placed on all or any part of the Premises. If after the Effective Date, LESSOR
desires to obtain a loan from a bank or any other lender (the “Bank”), and thereby encumber
the Real Property with a deed of trust (“Deed of Trust”), the Parties agree, and LESSOR shall
cause the Bank, as beneficiary of the Deed of trust, to agree, to enter into a Subordination,
Non-Disturbance, and Attornment Agreement (“SNDA”) in form and substance reasonably
acceptable to LESSEE, LESSOR, and the Bank. The agreed-upon SNDA shall include the
following terms, generally outlined below, which outline not an exhaustive list of terms, or the
specific terms, for the agreed-upon SNDA:
a) This LESSEE shall subordinate the priority of this LEASE to the Deed of
Trust;
b) In the event of a foreclosure of the Deed of Trust, or a transfer of the
Real Property in lieu thereof, or in any other manner whereby Bank or its successors-in-
interest succeed to the interest of LESSOR under this LEASE, so long as there shall then exist
no breach or event of default by LESSEE under this LEASE which has continued to exist for
such period of time (after notice, if any, required by this LEASE) as would entitle LESSOR to
terminate this LEASE: (a) this LEASE, including the leasehold interest of LESSEE hereunder,
shall not be disturbed or otherwise adversely affected by reason of such foreclosure or transfer
of the Real Property in lieu thereof or in any other manner; (b) other than as set forth in the
SNDA, none of LESSEE’s rights and interest under this LEASE shall be affected in any way by
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reason of any default by LESSOR under the Deed of Trust, and this LEASE shall continue in
full force and effect; (c) Bank and its successors-in-interest shall recognize and accept
LESSEE as the lessee under this LEASE, subject to the terms and conditions of this LEASE
as modified by the SNDA; (d) the Bank and its successors-in-interest as lessor under this
LEASE, shall have all of the rights and obligations of LESSOR under this LEASE (provided
that neither Bank nor such successors-in-interest shall be liable for any act or omission of
LESSOR as the prior lessor under this LEASE, except that LESSEE shall be entitled to
exercise all of its rights and remedies under this LEASE with respect to continuing defaults
hereunder resulting from the acts or omissions of LESSOR arising after Bank, or its
successor-in-interest, has received LESSEE’s notice to Bank, or its successor-in-interest, with
respect to such defaults and has not, after a reasonable opportunity to cure, under the SNDA
cured the same under the SNDA; (e) Bank shall not join LESSEE as a party defendant in any
action or foreclosure proceeding unless such joinder is with respect to this LEASE, including
the Real Property, and required by law to foreclose the Deed of Trust, then only for such
purpose and not for the purpose of terminating this LEASE; and (f) the parties under the SNDA
shall agree that LESSEE’s option to purchase the Real Property as provided in this LEASE
shall be binding on the Bank, and its successors-in interest, including any transferee who
succeeds to the interest of LESSOR under this LEASE; and (g) LESSEE shall to attorn to the
Bank, and its transferee, as if the Bank and such transferee were LESSOR under this LEASE;
c) Upon LESSEE’s receipt of written demand from Bank, which shall
include notice of same has been given in writing to LESSOR, that Bank has elected to
terminate the license granted to LESSOR to collect Rents from LESSEE under this LEASE, as
provided in the Deed of Trust, and directing LESSEE to make payment thereof directly to
Bank, (a) LESSEE shall, for any Rents due and payable thirty (30) days thereafter, comply
with such written demand and direction to pay, and shall not be required to determine whether
LESSOR is in default under any obligations to Bank, or to honor any conflicting demand from
LESSOR, and (b) LESSEE shall be entitled to full credit under this LEASE for any Rents paid
to Bank in accordance with such written demand and direction to the same extent as if such
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Rents were paid directly to LESSOR;
d) Any disputes between or among the Bank, including its successors-in-
interest, and LESSOR, shall be dealt with and adjusted solely between or among the Bank,
including its successors-in-interest, and LESSOR; and
e) The SNDA shall be governed by California law.
f) Notwithstanding anything to the contrary in this Section 26, if LESSEE
exercises the Purchase Option under Section 38, herein, LESSOR shall remove any such
Deed of Trust from the title of the Real Property, fully pay off such Deed of Trust, and cause
the Bank to release and reconvey such Deed of Trust, prior to or concurrent with the Close of
Escrow in connection with the Purchase Option under Section 38, herein.
g) LESSEE’s Director of Internal Services/CIO, or his/her designee, shall
be authorized to approve and execute the SNDA for LESSEE, subject to approval as to legal
form by LESSEE’s legal counsel. The LESSOR shall, and shall cause the Bank, and the
LESSEE shall, cause their respective signatures on the SNDA to be notarized to facilitate
recordation thereof. The SNDA shall be in recordable form, and upon its execution by all of
the parties thereunder, recorded by LESSOR against the Real Property in the Office of the
Fresno County Recorder, along with the recordation of the Deed of Trust against the Real
Property.
27. SURRENDER OF POSSESSION - Upon the expiration or termination of this
LEASE, LESSEE shall surrender the Premises to LESSOR in such condition as existing at the
commencement of this LEASE, less reasonable wear and tear, less the effects of any
Casualty as herein defined, and less the effects of any breach of LESSOR'S covenant to
maintain. LESSEE shall not be responsible for any damage which LESSEE was not obligated
hereunder to repair.
28. FIXTURES - LESSOR agrees that any equipment, fixtures, or apparatus installed
in or on the Premises by LESSEE shall continue to be the property of LESSEE, and may be
removed by LESSEE at any time. LESSEE shall repair any damage caused by the removal of
fixtures. Any fixtures not removed when LESSEE surrenders possession shall become the
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property of LESSOR.
29. RIGHT OF ENTRY - LESSOR, or its representative(s), upon giving 24 hours
written notice (other than in an emergency, when such notice shall not be required), shall have
the right to enter the Premises at any time during business hours, or at such other time as
LESSEE deems appropriate, to make any alterations, repairs, or improvements to the
Premises, or for any other commercially reasonable purposes. The normal business of
LESSEE or its invitees shall not be unnecessarily inconvenienced.
30. AMENDMENT - This LEASE may be amended in writing by the mutual consent of
the Parties without in any way affecting the remainder.
31. ASSIGNMENT - LESSEE shall not assign, transfer, or sub-let this LEASE, or its
rights or duties under this LEASE, without the prior written consent of LESSOR, which consent
shall not be unreasonably withheld or denied. LESSOR shall have the right to assign this LEASE
in connection with any sale of the Premises, provided that LESSOR promptly notifies LESSEE in
writing of any proposed or impending such sale.
32. RECORDATION OF MEMORANDUM OF LEASE – The Parties shall, at the same
time they execute this LEASE, also execute a Memorandum of Lease in the form of the
document attached as Exhibit E, which is incorporated by this reference, with the legal
description shown as Exhibit B. LESSEE’s Director of Internal Services/CIO, or his/her
designee, shall be authorized to approve and execute the Memorandum of Lease for LESSEE,
subject to approval as to legal form by LESSEE’s legal counsel. LESSEE shall be authorized
to immediately record the fully-executed Memorandum of Lease against the Real Property in
the Office of the Fresno County Recorder. The Parties shall cause their respective signatures
on the Memorandum of Lease to be notarized to facilitate recordation thereof.
33. AUDITS AND INSPECTIONS – At LESSEE’s request, LESSOR shall at any time
during business hours, and as often as LESSEE may deem necessary, make available to
LESSEE for examination records and data with respect to the matters covered by this LEASE.
LESSOR shall, upon request by LESSEE, permit LESSEE to audit and inspect all of such
records and data necessary to ensure LESSOR'S compliance with the terms of this LEASE.
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If this LEASE exceeds ten thousand dollars ($10,000), LESSOR shall be subject to the
examination and audit of the California State Auditor for a period of three (3) years after final
payment under contract (Government Code Section 8546.7).
34. GOVERNING LAW - Venue for any action arising out of or relating to this
LEASE shall be in Fresno County, California. This LEASE shall be governed by the laws of
the State of California.
35. NOTICES - The persons and their addresses having authority to give and receive
notices under this LEASE include the following:
LESSEE: LESSOR:
County of Fresno (L-336) Heritage Centre LLC
Director of Internal Services/ c/o Orton Development, Inc.
Chief Information Officer 1475 Powell Street, Suite 101
333 Pontiac Way Emeryville, CA 94608
Clovis, CA 93612 Attn: J.R. Orton III and Steve Schwartz
Telephone: (559) 600-6200 Telephone: (510) 428-0800
Email:
ISDContracts@fresnocountyca.gov
Email: eorton@ortondevelopment.com and
sschwartz1@sbcglobal.net
All notices between the LESSEE and the LESSOR provided for or permitted under this LEASE
must be in writing and delivered either by personal service, by first-class United States mail, by
an overnight commercial courier service, or by email. A notice delivered by personal service is
effective upon service to the recipient. A notice delivered by first-class United States mail is
effective three LESSEE business days after deposit in the United States mail, postage
prepaid, addressed to the recipient. A notice delivered by an overnight commercial courier
service is effective one COUNTY business day after deposit with the overnight commercial
courier service, delivery fees prepaid, with delivery instructions given for next day delivery,
addressed to the recipient. A notice delivered by email is effective upon delivery to the
recipient (unless such email is delivery after business hours, in which event effectiveness shall
be on the immediately following business day). For all claims arising out of or related to this
LEASE, nothing in this section establishes, waives, or modifies any claims presentation
requirements or procedures provided by law, including but not limited to the Government
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Claims Act (Division 3.6 of Title 1 of the Government Code, beginning with section 810).
36. INDEPENDENT CONTRACTOR - In performance of the work, duties and obligations
assumed by LESSOR under this LEASE, it is mutually understood and agreed that LESSOR,
including any and all of the LESSOR'S officers, agents, and employees, will at all times be acting
and performing as an independent contractor, and shall act in an independent capacity and not as
an officer, agent, servant, employee, joint venture, partner, or associate of the LESSEE.
Furthermore, LESSEE shall have no right to control or supervise or direct the manner or method
by which LESSOR shall perform its work and function. However, LESSEE shall retain the right to
administer this LEASE so as to verify that LESSOR is performing its obligations in accordance with
the terms and conditions thereof.
LESSOR and LESSEE shall comply with all applicable provisions of law and the rules
and regulations, if any, of governmental authorities having jurisdiction over matters the subject
thereof.
Because of its status as an independent contractor, LESSOR shall have absolutely no
right to employment rights and benefits available to LESSEE’S employees. LESSOR shall be
solely liable and responsible for providing to, or on behalf of its employees, all legally-required
employee benefits. In addition, LESSOR shall be solely responsible and save LESSEE
harmless from all matters relating to payment of LESSOR’S employees, including compliance
with Social Security withholding and all other regulations governing such matters. It is
acknowledged that during the term of this LEASE, LESSOR may be providing services to
others unrelated to the LESSEE or to this LEASE.
37. DISCLOSURE OF SELF DEALING TRANSACTIONS – This provision is only
applicable if the LESSOR is operating as a corporation (a for-profit or non-profit corporation) or
if during the term of this LEASE, the LESSOR changes its status to operate as a corporation.
Members of LESSOR’S Board of Directors shall disclose any self-dealing transactions
that they are a party to while LESSOR is providing goods or performing services under this
LEASE. A self-dealing transaction shall mean a transaction to which the LESSOR is a party
and in which one or more of its directors has a material financial interest. Members of the
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Board of Directors shall disclose any self-dealing transactions that they are a party to by
completing and signing a Self-Dealing Transaction Disclosure Form Exhibit F, attached and
incorporated by this reference, and submitting it to the County of Fresno prior to commencing
with the self-dealing transaction or immediately thereafter.
38. PURCHASE OPTION
a) Exercise of Purchase Option
i. LESSOR hereby grants to LESSEE the one-time right and option to
purchase the Premises (including the Real Property and the Building and all facilities, whether
above or below ground, located on the Real Property) on the terms set forth herein, such
purchase to close on, and be effective as of, the day immediately following the Expiration Date
(the “Purchase Date”), by delivering written notice to LESSOR of such exercise (“the Purchase
Option Notice”) at any time during the last year of the Term of this LEASE, but at least one
hundred eighty (180) days prior to the Expiration Date (the “Purchase Option”). The purchase
price for the Premises (including the Real Property and the Building, and all such facilities)
under the Purchase Option shall be one million dollars ($1,000,000.00) (“Purchase Price”).
ii.Notwithstanding anything to the contrary contained in this Section 38,
LESSEE’s exercise of the Purchase Option shall be effective only if all of the conditions
precedent set forth hereinbelow are true and correct during the period commencing upon the
date LESSEE delivers the Purchase Option Notice, and continuing until the Closing Date (as
that term is defined below), unless LESSOR, in LESSOR’s sole discretion, elects to waive any
such condition precedent in writing:
1.LESSEE shall not then be in default (after expiration of any
applicable notice and cure period) under this LEASE; and
2.LESSEE shall not have assigned its interest in the LEASE or in the
Purchase Option.
iii. If LESSEE exercises the Purchase Option pursuant to the terms of this
LEASE, then the Parties shall, within ninety (90) days after delivery of the Purchase Option
Notice, enter into a Sale and Purchase Agreement in the form of Exhibit G, which is attached
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and incorporated by this reference. The Grant Deed shall be in the form of Exhibit H, which is
attached and incorporated by this reference.
b) Due Diligence
i. LESSEE’s Due Diligence. LESSEE and LESSEE’s agents, employees, and
representatives (collectively, “LESSEE’s Agents”), shall, prior to delivering the Purchase
Option Notice, perform all due diligence on the Premises (subject to the terms and conditions
set forth herein), which shall include reviewing matters of title, inspecting the physical
conditions of the Premises, obtaining an acceptable appraisal of the Premises, receiving an
acceptable Phase 1 Environmental Assessment Report, obtaining a termite report, performing
inspections, reviewing all federal tax credit documents pertaining to the Premises, reviewing
agreements relating to the Premises, and conducting such other due diligence as LESSEE
determines is necessary (“Due Diligence”) provided however, LESSEE’s performance of such
due diligence activities shall be solely for LESSEE’s benefit, and such performance or lack
thereof by LESSEE shall not relieve LESSOR of its obligations under this LEASE.
ii. Due Diligence Materials. If LESSOR has not previously delivered the same
to LESSEE, then within fifteen (15) days after LESSEE’s request, LESSOR shall provide
(electronically or otherwise) all non-proprietary or privileged due diligence materials relating to
the Premises which are in its possession and control, including, but not limited to, such
reports, inspections, appraisals, agreements, and other documentation as described in Section
38(b)(i), herein, (“LESSOR’s Due Diligence Materials”). LESSOR’s Due Diligence Materials
and any other such items shall be delivered to LESSEE without representation or warranty by
LESSOR with respect to the contents, accuracy, or completeness thereof, and shall be subject
to any rights of third parties as to their use, reliance thereon or disclosure. LESSEE hereby
waives any and all claims against LESSOR arising out of the accuracy, completeness,
conclusions or statements expressed in LESSOR’s Due Diligence Materials so furnished and
any and all claims arising out of any duty of LESSOR to acquire, seek or obtain such
LESSOR’s Due Diligence Materials. Notwithstanding anything contained in the preceding
sentences of this subsection, LESSOR shall not deliver or make available to LESSEE
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LESSOR’s internal memoranda, attorney-client privileged materials, internal appraisals and
economic evaluations of the Real Property (or any portion thereof), prepared by LESSOR or
its affiliates solely for internal use or for the information of the investors in LESSOR. LESSEE
acknowledges that any and all of the Due Diligence Materials that are not otherwise known by
or available to the public are proprietary and confidential in nature, and will be delivered to
LESSEE solely to assist LESSEE in determining the feasibility of purchasing the Real
Property, except as otherwise required by State law.
iii. Title Matters and Review. A preliminary title report (Preliminary Title Report)
has been issued to LESSEE. Permitted exceptions shall only be the following: (i) as described
and listed on Exhibit I, Fidelity National Title Company Preliminary Report, cover pages 1
through 3, and “Preliminary Report Permitted Exceptions,” pages 4 through 8 (the Parties
agree that exceptions that have been redacted from Exhibit I are not permitted exceptions),
dated October 18, 2018, at 7:30 AM, which is incorporated herein by this reference, (ii) any
new taxes or assessments, (iii) any State, City, or County mandated recorded easements,
covenants, conditions, and restrictions affecting the Real Property recorded against the Real
Property on or after October 18, 2018. Any mortgage or deed of trust or similar debt
instrument relating to the Real Property, even as allowed under this LEASE, and if agreed to
by LESSEE under Section 26, herein, shall be considered a title defect, and shall be cured by
LESSOR’s removal of such title defect from the Real Property, at its sole cost and expense,
prior to the Purchase Date.
iv. LESSOR’s Permission for Testing. Notwithstanding anything to the contrary
in this Section 38(b), LESSEE shall not perform any soil borings or other invasive and/or
destructive testing to the land, or any improvements located thereon, without LESSOR’s prior
written approval, which approval shall not be unreasonably withheld or delayed. LESSOR or
its representative may be present to observe any testing or other inspection performed on the
Property. LESSEE’s right to enter upon the Premises or allow any of the LESSEE’s Agents to
enter upon the Premises to perform the due diligence investigations contemplated in this
Section 38 shall be conditioned on LESSEE’s agreement to maintain worker’s compensation
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and commercial general liability insurance policies to cover LESSEE’s and LESSEE’s Agents’
due diligence activities on the Premises, and to keep the Premises free and clear of all
mechanics’ and materialmen’s liens or other liens arising out of any of its activities or those of
its representatives, agents or contractors. If the same is not already in effect pursuant to this
LEASE, then at least two (2) business days before commencing such due diligence
investigations on the Premises, LESSEE shall deliver to LESSOR a certificate of insurance
evidencing insurance coverage in compliance with the terms of this subsection. LESSEE shall
maintain and keep in effect, at LESSEE’s sole expense, at all times during the period of
escrow, a general commercial liability insurance policy as set forth in Section 19 herein.
c) Actions of Parties. Within thirty (30) days following LESSOR’s receipt of
the Purchase Option Notice, the parties shall open an escrow for the purchase and sale of the
Premises (Escrow) with an escrow company reasonably acceptable to both LESSOR and
LESSEE (Escrow Holder), by delivering a fully executed copy of the Purchase and Sale
Agreement and Joint Escrow Instructions to Escrow Holder. In addition, concurrently with
delivery of the Purchase Agreement to Escrow Holder, LESSEE shall deliver to Escrow
Holder, in cash, the balance of the Purchase Price.
d) Closing Date. The “Close of Escrow” and “Closing” shall occur on the
Purchase Date.
e) Title. Title to the Premises shall be insured by a standard ALTA Owner’s
Form Policy of Title Insurance issued by a title company reasonably acceptable to LESSOR
and LESSEE (Title Policy) in the amount of the Purchase Price showing fee title to the
Premises vested in LESSEE. Tittle to the Premises shall be subject to all matters of record,
matters apparent by an inspection or survey, and any other matters created or approved by, or
consented to by LESSEE. Notwithstanding the foregoing, title to the Premises shall be free
and clear of any monetary encumbrances (other than liens for property taxes and
assessments and any encumbrances created or assumed by LESSEE, and LESSOR shall
cause such liens to be eliminated at LESSOR’s sole cost and expense prior to the Close of
Escrow.
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f) Costs and Prorations. Closing and escrow costs shall be paid as
follows:
i. The cost of the Preliminary Title Reports and any other required
title work shall be paid by LESSOR.
ii. The premium for the cost of the Title Policy shall be paid by
LESSOR. LESSEE shall pay for the cost of extended coverage (if required by LESSEE) and
the cost of any title endorsements.
iii. Recording fees and transfer taxes shall be paid by LESSOR.
Document preparation fees shall be paid by LESSEE, 50% and by LESSOR, 50%.
iv. Escrow fees and any and all other title company costs necessary
to achieve a successful closing of Escrow shall be paid by LESSEE, 50% and by LESSOR,
50%.
v. Each party shall bear its own legal and accounting fees and
costs.
vi. Prorations to the Closing Date shall include: all current taxes and
assessments including ad valorem taxes, charges for solid waste removal and sewage,
utilities, assessments for maintenance, overpayments for Operating Costs, and other charges
attributable to the Real Property. The basis for proration of taxes shall be the last known actual
taxes and assessments payable unless the current year tax amounts are known, and shall be
based on the assessed value as shown on the post-closing once the final tax bill for the tax
year of Closing has been received. This Section 38(f) shall survive the expiration of the
LEASE, and the Closing. Prorations shall be calculated based on a thirty (30) day month, and
three hundred sixty-five (365) day year.
g) Representations. LESSEE acknowledges that the Purchase Option has
been granted by LESSOR to LESSEE based on the understanding that the exercise of the
Purchase Option is entirely voluntary by LESSEE, and that the conveyance of the Premises by
LESSOR to LESSEE is, and shall be, on an “AS IS” basis, with absolutely no representations
or warranties, express or implied, regarding the Premises.
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h) Deliveries to LESSEE. Upon Closing Date, LESSOR shall deliver to
LESSEE originals or copies of all current drawings, plans, licenses, permits, and other Due
Diligence Materials (to the extent not previously provided) pertaining to the Premises in
LESSOR’s possession and control.
i) Lease Not Terminated. Notwithstanding any provision or rule of Law to
the contrary, LESSOR and LESSEE hereby acknowledge, confirm, agree and covenant that
this LEASE shall not terminate upon LESSEE’s delivery of the Purchase Option Notice,
LESSEE’s exercise of the Purchase Option, or LESSOR’s and LESSEE’s entering into the
Sale and Purchase Agreement, and this LEASE shall continue in full force and effect through
and including the Expiration Date. For the avoidance of doubt, from and after LESSEE’s
delivery of the Purchase Option Notice, LESSEE’s exercise of the Purchase Option, and/or
LESSOR’s and LESSEE’s entering into the Sale and Purchase Agreement, LESSEE shall
remain obligated to pay, and liable for the payment of, all Rent due and payable hereunder
through and including the Expiration Date.
39. ELECTRONIC SIGNATURES. The parties agree that this LEASE may be
executed by electronic signature as provided in this section. An “electronic signature” means
any symbol or process intended by an individual signing this LEASE to represent their
signature, including but not limited to (1) a digital signature; (2) a faxed version of an original
handwritten signature; or (3) an electronically scanned and transmitted (for example by PDF
document) of a handwritten signature. Each electronic signature affixed or attached to this
LEASE (1) is deemed equivalent to a valid original handwritten signature of the person signing
this LEASE for all purposes, including but not limited to evidentiary proof in any administrative
or judicial proceeding, and (2) has the same force and effect as the valid original handwritten
signature of that person. The provisions of this section satisfy the requirements of Civil Code
section 1633.5, subdivision (b), in the Uniform Electronic Transaction Act (Civil Code, Division
3, Part 2, Title 2.5, beginning with section 1633.1). Each party using a digital signature
represents that it has undertaken and satisfied the requirements of Government Code section
16.5, subdivision (a), paragraphs (1) through (5), and agrees that each other party may rely
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upon that representation. This LEASE is not conditioned upon the parties conducting the
transactions under it by electronic means, and either party may sign this LEASE with an
original handwritten signature.
40. AUTHORITY - LESSOR represents and warrants that each individual executing
this LEASE on behalf of LESSOR is duly authorized to execute and deliver this LEASE on
behalf of HERITAGE CENTRE LLC, and that this LEASE is binding upon HERITAGE
CENTRE LLC in accordance with its terms. The terms of this LEASE are intended by the
Parties as a final expression of their agreement with respect to such terms as are included in
this LEASE and may not be contradicted by evidence of any prior or contemporaneous
agreement, arrangement, understanding or negotiation (whether oral or written).
41. TIME OF THE ESSENCE – Time is of the essence with respect to the
performance of all obligations to be performed or observed by the Parties, respectively, under
this LEASE.
42. FURTHER DOCUMENTS – Subject to the terms and conditions of this LEASE,
the Parties promptly shall execute and deliver any and all additional documents, and
instruments, notices and shall do any and all other acts and things, reasonably necessary in
connection with the performance of their respective obligations under this LEASE and to carry
out the provisions of this LEASE.
43. EQUAL CONSTRUCTION – The terms of this LEASE shall not be construed in
favor of or against any Party. In connection with the negotiation and drafting of this LEASE, the
Parties have been represented by counsel.
44. NO LITIGATION – LESSOR represents and warrants to LESSEE that, as of the
Effective Date, (a) LESSOR is not involved in or aware of pending or, to LESSOR’s actual
knowledge, threatened claim, demand, or litigation which could affect the Real Property and/or
this LEASE, and (ii) there are no proceedings pending or, to LESSOR’s actual knowledge,
threatened against LESSOR before any court or administrative agency relating to the Real
Property and/or this LEASE, which may adversely affect the Real Property now or in the
future, or which may adversely affect LESSOR’s ability to fulfill all obligation under this LEASE.
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45. ENTIRE LEASE - This LEASE constitutes the entire LEASE between the
LESSOR and LESSEE with respect to the subject matter hereof, and supersedes all prior
leases, negotiations, proposals, commitments, writings, advertisements, publications, and
understandings of any nature whatsoever unless expressly referenced in this LEASE. The
Parties shall, concurrently herewith, also execute a separate termination of the existing Lease
Agreement for the Premises, dated June 22, 2021, which termination shall be effective as of
11:59pm on February 28, 2022.
This LEASE shall be binding on and inure to the benefit of LESSOR'S heirs,
successors, and assigns.
///
DocuSign Envelope ID : 4DF11D4E-FD7D-4C76-A6B5-D3DA41 E686F6
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COUNTY OF FRESNO
Fresno, Callfomla
EXECUTED as of the date first herein written .
LESSOR:
HERITAGE CENTRE LLC
Fund 0001
Subclass 10000
OrgNo. 'ti## 5630
Acct. No . ##tlf. 7340
00516.00100/1234166v2
LESSEE : :~UNlfJf ESNO
Brian Pacheco , Chairman of the
Board of Supervisors of the County of
Fresno
ATTEST:
Bernice E . Seidel
Clerk of the Board of Supervisors
County of Fresno, State of California
Deputy
46
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EXHIBIT A
SITE PLAN
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EXHIBIT B
LEGAL DESCRIPTION
APNs 445-020-17, 445-020-09 and 437-290-60
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EXHIBIT C
TENANT IMPROVEMENTS AND PAYMENT SCHEDULE
Monthly Base
Rent
Monthly Tenant
Improvement
Payments**
Year 1 $220,000.00 Year 1 $141,366.79
Year 2 $220,000.00 Year 2 $141,366.79
Year 3 $220,000.00 Year 3 $141,366.79
Year 4 $220,000.00 Year 4 $141,366.79
Year 5 $220,000.00 Year 5 $141,366.79
Year 6 $230,000.00 Year 6 $141,366.79
Year 7 $230,000.00 Year 7 $141,366.79
Year 8 $230,000.00 Year 8 $141,366.79
Year 9 $230,000.00 Year 9 $141,366.79
Year 10 $230,000.00 Year 10 $141,366.79
** Example: Tenant Improvement Payments assume $10,000,000.00 in Tenant Improvement
costs, all Tenant Improvements are completed and paid for one month before Year 2, and
amortized over 8-years at 8% per annum. Tenant Improvement costs not to exceed
$10,000,000.00 without LESSEE’s written approval. This schedule shall be updated to reflect
actual costs once final costs are known.
Tenant Improvements
The Scope of Work (including all labor, materials and equipment required to complete the work
as outlined below (subject to change), shall be performed by Lessor and Lessor’s contractor.
The Scope of Work includes the following:
Demolition/Abatement
• Demo and remove interior walls, acoustical ceiling system and wires
• HVAC ductwork as needed per plans
• Remove abandoned electrical
• Dispose of plumbing fixtures, restroom fixtures and partitions per plans
• Demo and remove doors and frames per plans
Concrete
• Pour and place concrete to patch trenches for new plumbing per plans
Rough Carpentry
• Supply all lumber and hardware per plans
Casework
• Fabricate and install upper/lower cabinets and hardware per plans and Tenant
specifications
• Install Countertops per plans and Tenant specifications
Insulation
• Furnish and install all wall and ceiling insulation per plans
Door Frames/Hardware
• Furnish and install all doors and hardware per plans
Studs/Drywall
• Furnish and install all studs and drywall per plans
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Flooring/Base
• Furnish and install all carpet, VCT or LVT per plans
Painting
• Paint interior surfaces per plans and Tenant specifications
• Exterior painting not included
Acoustical Ceiling
• Furnish and install all acoustical ceiling per plans
Code Signage
• Provide and install code signage per plans
Restroom Accessories
• Furnish and install all restroom accessories per plans
Fire Extinguishers/Cabinets
• Furnish and install all fire extinguishers and cabinets per plans
Fire Sprinklers
• Modify existing fire sprinklers per plans as necessary
Plumbing
• Provide and install all plumbing per plans
• Furnish and install plumbing fixtures for all restrooms and break rooms
HVAC
• Furnish and install all ducting to accommodate new offices, rooms, and
restrooms
• Furnish and install new registers/grilles per plans
Electrical
• Provide and install all electrical per plans
• Furnish and install new light fixtures and controls per plans
Fire Alarm
• Modify existing fire alarm system per plans
Exclusions
1) Data (servers, patch panel, cable, punch-down etc.)
2) Phone systems (cables and equipment)
3) Security camera and intrusion systems
4) Noise mitigation systems
5) Furniture (Cubicles/modular furniture, chairs etc and fixtures)
6) Appliances
7) Playground equipment
8) New chillers, boilers and air handlers (Central Plant)
9) New roof
10) Elevator modernization
11) LEED Certification
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Proposed timeline is as follows:
COUNTY OF FRESNO
Fresno, California
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EXHIBIT E
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
County of Fresno
Director of Internal Services/
Chief Information Officer
333 W. Pontiac Way
Clovis, CA 93612 FOR RECORDER’S USE ONLY
EXEMPT FROM RECORDING FEES PURSUANT TO GOV'T. CODE SECTIONS 27383
AND 27388.1(a)(2)(D)(AB 110, SB 2) AND DOCUMENTARY TRANSFER TAX
PURSUANT TO REVENUE AND TAXATION CODE SECTION 11922.
MEMORANDUM OF LEASE
THIS MEMORANDUM OF LEASE (“Memorandum”) is made and entered into this
_____ day of ________________, 2022, by and between the County of Fresno, a political
subdivision of the State of California (“County”),whose address as of the date hereof is
333 W. Pontiac Way, Clovis, California 93612, and Heritage Centre, LLC (“Lessor”),
whose address is 1475 Powell Street, Suite 101, Emeryville, California 94608.
A. Lessor represents that it is the sole fee owner of that certain improved real
property located in Fresno County, State of California, and having a street address of
3109, 3127, 3133, 3147, and 3676 N. Millbrook, Fresno, CA 93726 (the “Real Property”);
B. Pursuant to that certain Lease Agreement of the same date as this
Memorandum of Lease (the “Lease Agreement”), Lessor has leased certain Premises (as
defined in the Lease Agreement) located on and constituting a portion of the Real Property
to the County, and the County has leased such Premises from the Lessor;
C. Pursuant to the terms and conditions of the Lease Agreement, this
Memorandum is to be recorded in the Official Records of the Fresno County Recorder
with respect to the Real Property for the purpose of memorializing the existence of the
Lease Agreement, the terms and conditions of which inure to the benefit of, and bind the
Lessor, the County, and their respective successors and assigns. Any third-party
interested in obtaining information about the Lease Agreement may contact the parties at
the above-referenced addresses.
//
//
//
2
IN WITNESS WHEREOF, this Memorandum has been executed as of the day and
year first above written.
LESSOR:
HERITAGE CENTRE, LLC.
By: _______________________
[Notary Attestation-Attached]
LESSEE:
COUNTY OF FRESNO:
By: ___________________________
Robert W. Bash, Director of Internal Services/
Chief Information Officer
[Notary Attestation-Attached]
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(1) Company Board Member Information:
Name: Date:
Job Title:
(2) Company/Agency Name and Address:
(3) Disclosure (Please describe the nature of the self-dealing transaction you are a party to):
(4) Explain why this self-dealing transaction is consistent with the requirements of Corporations Code 5233 (a):
(5) Authorized Signature
Signature: Date:
00516.00100/1234167v2 1
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THIS SALE AND PURCHASE AGREEMENT AND ESCROW INSTRUCTIONS
("Agreement") is made effective this _______ day of __________, 20__ ("Effective
Date"), by and between the COUNTY OF FRESNO, a political subdivision of the State
of California ("Buyer"), and HERITAGE CENTRE LLC, a California limited liability
company ("Seller"). Seller and Buyer are sometimes collectively referred to herein as
the "Parties" and singularly as a "Party."
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This Agreement is made and entered into with respect to the following facts and
circumstances:
A. Seller is the sole owner of fee title of that certain real property and
improvements located at the street address of 3109, 3115, 3119, 3121,
3127, 3133, 3147, 3151 and 3155 N. Millbrook Avenue and 3676 and
3708 E. Shields Avenue, Fresno, CA 93726, County of Fresno, State of
California, (APN 437-290-60, APN 445-020-17, and APN 445-020-09),
which includes six buildings, totaling approximately 173,200 square feet,
together with all exterior common areas, including 514 paved parking
stalls, associated landscaping, and any and all other improvements to
such real property and all other transferable personal property in which
Seller may have any interest that is affixed thereto (collectively,
“Improvements”), at the time of the Closing Date (as defined in Section
6.05 herein), all as more particularly described in Exhibit "A," attached and
incorporated by this reference (collectively, the "Real Property").
B. Buyer desires to purchase the Real Property from Seller, and Seller
desires to sell the Real Property to Buyer, pursuant to the terms and
subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of their mutual covenants herein
contained, and for other valuable consideration, the sufficiency and receipt of which are
hereby acknowledged, Seller and Buyer hereby agree as follows:
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1.01 The Real Property. Subject to all terms, covenants, conditions, and
provisions of this Agreement, and for the consideration herein set forth,
Seller agrees to sell the Real Property to Buyer, and Buyer agrees to buy
the Real Property from Seller on the Closing Date (as defined in Section
6.05, herein).
00516.00100/1234167v2 2
It is hereby acknowledged by the parties that Seller shall not convey to
Buyer claims relating to any real property tax refunds or rebates for
periods accruing prior to the Closing, any and all tax deductions available
by reason of the sale contemplated herein, and any existing insurance
claims, all of which claims shall be reserved by Seller.
1.02 Purchase Price. The “Purchase Price”shall be one million dollars
($1,000,000.00) for the Real Property in “AS-IS” condition under Section
2.05, herein.
1.03 Buyer’s Deposit.The Buyer shall deposit into Escrow with Escrow Holder
(as defined in Section 6.01, herein) a good faith refundable deposit of
$100,000.00 (“Buyer’s Deposit”). The Buyer’s Deposit shall be held in an
interest-bearing account for the benefit of the Buyer. The Buyer’s Deposit,
together with interest thereon, shall be applied to the purchase price of the
Real Property at the close of Escrow (as defined in Section 6.01, herein).
In the event Buyer terminates this Agreement for the purchase of the Real
Property prior to the expiration of Buyer’s Due Diligence Period (as
defined in Section 2.02, herein), the entire Buyer’s Deposit, plus accrued
interest, shall be refunded to Buyer. If, after the expiration of the Due
Diligence Period, the close of Escrow hereunder does not occur solely
because of Buyer’s material breach or default, the entire Buyer’s deposit,
plus accrued interest, shall be disbursed to and retained by Seller as
liquidated damages.
1.04 Payment of the Purchase Price. The Purchase Price for the Real Property
shall be paid by Buyer to Seller as follows:
Upon execution of this Agreement, Buyer shall deposit Buyer’s Deposit
into Escrow. Buyer shall deposit into Escrow with Escrow Holder at least
three (3) business days before the Closing Date (as defined in Section
6.05, herein), immediately available cash funds equal to the difference
between (a) and (b) immediately below:
(a)Buyer’s Deposit, including any interest on the Buyer’s Deposit,
plus any credit that Seller shall be required to give to Buyer
under Section 7(h) of the Lease (as defined in Section 7.03,
herein); and
(b) The Purchase Price,plus Buyer’s share of closing costs
pursuant to this Agreement, less any amount for Property Taxes
and Charges (defined in Section 6.04(e), herein) paid by Seller
that may be credited to Buyer under Section 6.04(e), herein.
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00516.00100/1234167v2 3
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2.01 Possession. Subject to Buyer paying the Purchase Price, and otherwise
complying with the terms and conditions of this Agreement, which Buyer is
required to comply with up to and on the Closing Date, Buyer shall have
the exclusive right to own and possess the Real Property on and at all
times after the Closing Date subject only to the Permitted Exceptions (as
defined in Section 3.01 herein).
2.02 Inspection of the Real Property. Buyer, and Buyer's agents, employees,
and representatives (collectively "Buyer's Agents") acknowledge that
Buyer commenced its inspection of the Real Property prior to Buyer’s
execution of this Agreement. Buyer shall have until December 31, 2031
(the “Due Diligence Period”) to perform and complete all remaining due
diligence regarding the Real Property, including: review of matters of title,
inspection of the physical condition of the Real Property, obtaining an
acceptable appraisal of the property, obtaining an acceptable Phase I and
Phase II Environmental Site Assessment, and performing any other
inspections, reviewing any agreements relating to the Real Property,
obtaining all necessary approvals from the Board of Supervisors, and
conducting other such due diligence as Buyer determines appropriate. At
any time during the Due Diligence Period, at Buyer’s sole discretion,
Buyer shall have the right to terminate this Agreement without cause, and
to cancel said Escrow with no further obligation or offset. Upon Buyer’s
termination of this Agreement and cancellation of Escrow, the Buyer’s
Deposit, plus any accrued interest thereon, shall be immediately refunded
to Buyer (less Buyer’s share, herein, of any required fees paid to Escrow
Holder).
2.03 Physical Condition of the Property. Without making any representations or
warranties as to the physical condition of the Real Property, Seller shall
not damage or cause the physical condition of the Real Property to
deteriorate or change (normal wear and tear excepted) after the Effective
Date of the Purchase Agreement without the prior written consent of
Buyer.
2.04 Plans and Specifications. If Seller has not already done so, within ten (10)
business days of the Effective Date of this Purchase Agreement, Seller
shall deliver to Buyer a copy of all plans and specifications, and records
for the Improvements (collectively, “Plans”), if any, provided however, if
Seller does not possess any such Plans, Seller shall give written
confirmation thereof to Buyer and Escrow Agent within such period. Within
ten (10) business days after receipt of the Plans, if any, from Seller, Buyer
shall review and approve or disapprove the Plans by written statement
sent to Seller.
00516.00100/1234167v2 4
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3.01 Condition of Title to the Real Property. Seller shall convey to the Buyer
fee title to the Real Property, subject only to (i) the terms and conditions of
this Agreement, and (ii) the following exceptions (the "Permitted
Exceptions"):
00516.00100/1234167v2 5
(a) The easements and rights-of-way for public roads, public utilities
and underground pipelines that are of public record.
(b) The lien for property taxes, assessments, fees, and charges that
are assessed but not yet delinquent, provided that all such taxes,
assessments, fees, and charges accrued as of the Closing Date
shall be apportioned to, and borne by, Seller.
(c) The exceptions to title reflected on a Preliminary Report that has
been prepared by Escrow Holder, and delivered to Buyer, pursuant
to subsection 3.02(a), herein, and except for certain redactions
made to such Preliminary Report as reflected therein, Buyer
accepts pursuant to the terms of such subsection 3.02(a).
(d) All matters created by or on behalf of Buyer.
3.02 Title Insurance.
(a) 1) Buyer obtained a Preliminary Report prior to Buyer’s execution of
this Agreement, and Seller has provided Buyer with a copy of that
certain Preliminary Report, as Title No. FFOM-2012107383 -BW,
dated October 4, 2021, 7:30 AM. Buyer and Seller agree that
Seller, at its sole cost and expense, shall cure certain defects in the
title to the Real Property, and therefore those defects have been
redacted from such Preliminary Report. Such Preliminary Report,
excluding all of such redacted defects, is incorporated by this
reference, as Exhibit “C,”and Buyer accepts the remaining
permitted exceptions that are shown on the Preliminary Report,
Exhibit “C.”All such defects in the title to the Real Property,
excluding the exceptions permitted herein by Buyer, shall be cured
by Seller, at its sole cost and expense, by removing such defects
from the title to the Real Property prior to the close of escrow.
(b) At the Closing Date, and as a condition to Buyer's obligation to
purchase the Real Property, Escrow Holder shall issue and deliver
to Buyer its standard coverage ALTA Owner's Policy of Title
Insurance insuring title to the real Property in Buyer in the condition
set forth in the Preliminary Report, Exhibit “C”(subject to any cure
in the title to the Real Property, as required to be made by Seller, at
its sole cost and expense, as provided herein), and with liability in
the amount of the Purchase Price (the "Title Policy"). Buyer shall
bear the cost of the ALTA policy premium over and above the cost
of a standard CLTA Owner’s policy, including the cost of an ALTA
survey necessary to issue the ALTA Extended Owner’s policy.
00516.00100/1234167v2 6
(c) Buyer shall cause Escrow Holder to issue a Final Title Report, with
only Permitted Exceptions approved by Buyer, dated as of the
Closing Date.
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4.01 Covenants, Warranties and Representations of Seller. Seller hereby
makes the following covenants, representations, and warranties, and
acknowledges that Buyer's execution of this Agreement has been made,
and Buyer's acquisition of the Real Property will be made in material
reliance by Buyer on these covenants, representations, and warranties:
(a) Authority. Seller holds sole fee title ownership in the Real Property.
As to Seller, no authorization, approval, filing, consent, qualification,
registration, or other order of the State of California or authority or
agency thereof, or other state or federal governmental authority or
agency, is required for the valid authorization, execution, delivery,
and performance of this Agreement. Further, Seller covenants,
represents, and warrants that Seller is duly authorized to execute
this Agreement on behalf of Seller,with respect to Seller’s sale of
the Real Property to Buyer, and Seller shall evidence such consent
on the Grant Deed. The person(s) executing this Agreement on
behalf of Seller is authorized to bind Seller to the terms and
conditions of this Agreement.
(b) No Violation. Neither this Agreement, nor anything provided to be
done hereunder, violates or will violate any contract, agreement, or
instrument whatsoever, including without limitation any laws,
regulations, or policies relating to any financing, grant, or award
agreement or instrument to which Seller is a party, bound, or
obligated thereto.
(c) Governmental Violations. To the best of Seller’s knowledge, Seller
has no knowledge of any written notice of any pending, threatened,
or unresolved violations of County, State, or Federal building,
zoning, fire, or health codes or ordinances, or any other
governmental law, regulation, rule or policy affecting Seller and
concerning the Real Property; provided however, that Buyer
acknowledges there was a Phase I Environmental Study completed
by Buyer on ______________.
(d) Eminent Domain. To the best of Seller’s knowledge, Seller has no
actual, current knowledge of any pending or threatened
proceedings in eminent domain or otherwise that would affect the
Real Property.
00516.00100/1234167v2 7
(e) Litigation. To the best of Seller’s knowledge, after having
conducted a reasonably diligent investigation, Seller has no
knowledge of any actions, suits, claims, legal proceedings pending
or threatened against Seller involving or affecting the sale of the
Real Property to Buyer, at law or in equity, before any court,
administrative forum, or governmental agency.
(f) Encumbrances. Seller has not entered into any agreement with
any third parties regarding the sale, lease, management, repair,
improvement, or any other matter affecting the Real Property that
would be binding on Buyer or the Real Property after the Closing
Date of this Agreement.
(g) Performance. Seller shall timely perform and comply with all of
Seller’s covenants and agreements contained herein, and shall
satisfy all conditions contained herein that Seller is required to
perform, comply with, or satisfy under this Agreement.
(h) Known Inaccurate Representations. If Buyer becomes aware that
any of the representations contained in this Section 4.01 are not
true and correct as of the Closing Date (“Known Inaccurate
Representations”), then Buyer may, at its option, (i) waive such
misrepresentations and close this transaction, or (ii) unless Seller,
at its sole cost and expense, cures such misrepresentation to
Buyer’s reasonable satisfaction prior to the scheduled Closing
Date, terminate this Agreement by written notice thereof to Seller
and to Escrow Holder, in which event the Buyer’s Deposit plus
accumulated interest shall be returned to Buyer. Buyer hereby
acknowledges and agrees that, upon the Closing of Escrow, any
claim of Buyer relating to any Known Inaccurate Representations
shall be automatically waived in full by Buyer.
(i) Person By Which Knowledge is Measured. For purposes of
Section 4.01(a)-(h), (i) where “the best of Seller’s knowledge” is
referenced, it shall mean the present knowledge of the chief
executive officer of Seller.
4.02 Covenants, Warranties and Representations of Buyer. Buyer hereby
makes the following covenants, representations and warranties, and
acknowledges that Seller’s execution of this Agreement has been made
and Seller’s sale of the Real Property will be made in material reliance by
Seller on these covenants, representations, and warranties:
(a) Authority. Buyer has the full power, authority, and legal capacity to
enter into, and perform Buyer's obligations under this Agreement,
and to purchase the Real Property as provided herein, without the
00516.00100/1234167v2 8
need for obtaining the consent or approval of any other person,
court or governmental agency, body or subdivision. The person(s)
executing this Agreement on behalf of Buyer is authorized to bind
Buyer to the terms and conditions of this Agreement.
(b) Litigation.To the best of Buyer’s knowledge, after having
conducted a reasonably diligent investigation, Buyer has no
knowledge of any actions, suits, claims, legal proceedings pending
or threatened in writing against Buyer involving the purchase of the
Real Property from Seller, at law or in equity, before any court,
administrative forum, or governmental agency.
(c) No Prospective Violations.To the best of Buyer’s knowledge,
Buyer has no knowledge that the execution and delivery of this
Agreement violates any contract, agreement or instrument to which
Buyer is a party or bound.
(d) Performance. Buyer shall timely perform and comply with all
covenants and agreements herein, and shall satisfy all conditions
that Buyer is required to perform, comply with, or satisfy under this
Agreement.
(e) For purposes of Section 4.02(a)-(d), where knowledge of Buyer is
referenced, it shall mean the present knowledge of Buyer’s
authorized representative who executes this Agreement on behalf
of Buyer.
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5.01 Conditions Precedent to Seller’s Obligation to Perform. Seller’s obligation
to perform as set forth herein is hereby expressly conditioned on
satisfaction of each and every one of the following conditions precedent:
(a) Buyer shall have timely and fully performed each of the acts to be
performed by it hereunder, including without limitation, depositing
the Purchase Price, and Buyer’s share of the Closing Costs (as
defined in Section 6.04, herein) into Escrow (as defined in Section
6.01, herein) with Escrow Holder prior to Buyer’s respective
deadlines provided in Section 1.04 and Section 6.02(b), herein.
(b) Each of Buyer's representations and warranties set forth in Section
4.02, herein, shall be true at the time of executing this Agreement,
and as of the Closing Date, as if affirmatively made at that time.
The foregoing conditions are solely for the benefit of Seller, any or all of
00516.00100/1234167v2 9
which may be waived in writing by Seller in Seller’s sole discretion.
5.02 Conditions Precedent to Buyer's Obligations to Perform. Buyer's
obligation to perform as set forth herein is expressly conditioned on the
satisfaction of each and every one of the following conditions precedent:
(a) Seller shall have timely and fully performed every act to be
performed by it hereunder, including without limitation, deposit into
Escrow with Escrow Holder the Grant Deed, as required by Section
6.02(a), herein.
(b) Each of the representations and warranties of Seller contained in
Section 4.01, herein, and in any provision herein, shall be true at
the time of executing this Agreement, and as of the Closing Date,
as if affirmatively made at that time, except as and to the extent any
untruth or discrepancy is caused by any act or omission of Buyer or
any person or entity claiming through or under Buyer.
(c) Escrow Holder shall be irrevocably committed to issue the Title
Policy as set forth in Section 3.02(b), herein, in the condition
described in Sections 3.01 and 3.02, herein, at least two (2) days
prior to the recording of the Grant Deed.
(d) Buyer did not terminate Escrow, in its sole discretion, prior to the
expiration of the Due Diligence Period, as provided in Section 2.02.
The foregoing conditions are solely for the benefit of Buyer, any or all of which
may be waived in writing by Buyer in Buyer's sole discretion.
5.03 Failure or Waiver of Conditions Precedent. Seller or Buyer may elect, at
any time or times prior to the Closing Date, to waive in writing the benefit
of any of their respective conditions set forth in Sections 5.01 and 5.02,
herein, as applicable. In any event, the Parties' consent as provided in this
Section 5.03 up to the Closing Date shall waive any remaining unfulfilled
conditions up to the Closing Date, provided however, such waiver shall not
be deemed to waive any subsequently discovered breach of any
representation, warranty, or covenant made by either Party to this
Agreement.
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6.01 Establishment of Escrow. Upon the execution of this Agreement, the
Parties shall promptly open an escrow (the "Escrow") with Fidelity National
Title Company, 7475 N. Palm Ave, Suite 107, Fresno, CA 93711, (559)
431-8050, or such other title company that is mutually agreeable to the
00516.00100/1234167v2 10
Parties if such title company is not available or is replaced (“Escrow
Holder”)to provide for Seller’s conveyance of the Real Property to Buyer,
as provided herein. Prior to the Closing Date, a duplicate of this fully-
executed Agreement (or Counterparts thereof) shall be deposited with
Escrow Holder, and shall constitute escrow instructions to Escrow Holder
concerning this transaction. Escrow Holder shall notify Buyer and Seller, in
writing, of the date of “Opening of Escrow.”
6.02 Deposits into Escrow. The Parties shall make the following deposits into
Escrow with Escrow Holder:
(a) Seller’s Deposits. Seller shall deposit into Escrow with Escrow
Holder two (2) business days prior to the Closing Date: (i) an
executed and acknowledged original Grant Deed in the form
attached as Exhibit “B”; (ii) as necessary, Seller’s share of the
Closing Costs (as that term is defined in section 6.04, herein); (iii)
all plans, specifications, and engineering calculations for the Real
Property in Seller’s possession and control, as well as a list of all
maintenance contractors, including their contact information, used
for the Real Property, and (iv) the keys, alarm codes and/or other
instruments to enable access and possession of the Real Property
by Buyer.
(b) On or before the Closing Date, any mortgage or deed of trust or
similar debt instrument relating to the Real Property shall be cured
by Seller’s removal, at its sole cost and expense, of such title defect
from the title of the Real Property, prior to the Close of Escrow, and
the written instrument, in recordable form, evidencing the
termination and/or reconveyance of the deed of trust or similar debt
instrument shall be so deposited into Escrow.
(c) Buyer's Deposits. Buyer shall deposit the following into Escrow
with Escrow Holder, prior to their respective deadlines provided
herein:
i. A Preliminary Change in Ownership Report; and
ii.Buyer’s share of the Closing Costs (as that term is defined in
Section 6.04, herein), at the same time that Buyer is required to
deposit the funds for the Purchase Price into Escrow with
Escrow Holder, pursuant to Section 1.03, herein.
(d)Title Report (Buyer’s Deposit). Buyer shall cause the Escrow
Holder to deposit the Final Title Report, dated as of the Closing
Date, into Escrow, according to the requirements of this
Agreement.
00516.00100/1234167v2 11
6.03 Title Insurance. At the Closing Date, Escrow Holder shall issue, effective
as of that date, the Title Policy as set forth in Section 3.02 herein.
6.04 Costs and Expenses. The Parties agree that all of the Closing costs
(collectively, the "Closing Costs") shall be borne by Seller and Buyer as
follows:
(a) Seller shall bear the base cost of the CLTA Preliminary Title
Report.
(b) Buyer shall pay the premium costs for an ALTA policy and any
endorsements that Buyer elects, in its discretion. Buyer shall pay
the costs of any survey obtained by Buyer.
(c) Any recording fees, transfer taxes, and document preparation fees
shall be paid 50% by Seller and 50% by Buyer, except those
recording fees, transfer taxes, and document preparation fees for
which Buyer is exempt.
(d) Escrow fees, and any other costs necessary to achieve a
successful closing of Escrow, including the cost of the Final Title
Report, shall be paid 50% by Seller and 50% by Buyer.
(e) All property taxes, assessments, fees, and charges (collectively,
“Property Taxes and Charges”) accrued as of the Closing Date
shall be paid current by the Seller and shall be prorated as of the
Closing Date. Each Party shall bear its own legal, Broker, and
accounting fees and costs.
6.05 Closing Date. Unless otherwise mutually extended or shortened by the
Parties in writing, the closing of Escrow shall be on March 1, 2032 (the
“Closing Date”). The Closing Date shall not occur prior to the date of
expiration or termination of the Lease.
6.06 Procedure for Closing of Escrow. Escrow Holder shall close the Escrow
by doing all of the following on the Closing Date:
(a) Fully pay from funds deposited by Buyer and Seller, the Closing
Costs to Escrow Holder;
(b) After payment of the Closing Costs to Escrow Holder, pay the
balance of funds deposited by Buyer to Seller.
(c) Record the Grant Deed in the Official records of Fresno County,
return the recorded Grant Deed to Buyer, and provide conformed
copies of such recorded document thereof to Seller;
00516.00100/1234167v2 12
(d) Deliver a copy of Buyer's and Seller’s closing statements for the
Escrow to the respective Parties, subject to Section, 6.04 herein;
and
(f) Deliver to Buyer the original and two (2) copies of the Title Policy in
the form set forth in subsection 3.02 (b) herein, at the Closing of
Escrow.
6.07 Inability to Close Escrow. In the event that Escrow Holder is unable to
close the Escrow pursuant to Section 2.02, herein, this Escrow shall
terminate. In the event of such termination, Escrow Holder shall return to
each Party any money or documents deposited by the Parties and
terminate the Escrow; provided however, that any cancellation charges
imposed by Escrow Holder shall be paid 50% by Seller and 50% by Buyer.
$57,&/(9,,
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7.01 Survival and Indemnity. Notwithstanding the Closing of Escrow, delivery
of instruments, conveyances of the Real Property, and payment of
consideration therefor, the Parties agree that the respective
representations, warranties, covenants, indemnities, and agreements
made by each such Party pursuant to this Agreement shall survive the
Closing Date, and each Party agrees to indemnify, defend, and hold the
other harmless from and against any and all claims, demands, losses,
obligations, damages, liabilities, causes of action, costs, and expenses
(including, without limitation, attorney's, paralegals' and other
professionals' fees and costs) arising out of or in connection with a breach
by the indemnifying Party of any such representation, warranty, covenant,
or agreement; provided, however, that the foregoing obligations shall
survive the Closing of escrow for a period of one year following the
Closing Date.
7.02 Brokers. The Parties acknowledge that no brokers are due any fees
and/or commissions under this Agreement. Buyer and Seller each
represent and warrant to the other that they have not had any dealings
with any person, firm, broker, or finder in connection with the negotiation
of this Agreement and/or consummation of the purchase and sale
contemplated herein, and no broker or other person, firm or entity is/are
entitled to any commission or finder’s fee in connection with this
transaction as the result of any dealings or acts of such Party. Buyer and
Seller do hereby agree to indemnify, defend, protect and hold the other
harmless from and against any costs, expenses or liability for
compensation, commission or charges that may be claimed by any broker,
finder or other similar party by reason of any dealings or act of the
indemnifying Party.
00516.00100/1234167v2 13
7.03 Prorations: Any amounts paid to Seller in advance by Buyer for real
property taxes and assessments, and property operation expenses and
insurance premiums, pursuant to Section 7(d) of the Lease, as well as any
credits provided in the Lease, shall be prorated as of the Close of Escrow,
and refunded to Buyer into Escrow.
7.04 Notices. All notices under this Agreement shall be in writing, and be either
personally served, sent by (i) United States Postal Service, with postage
prepaid, or (ii)sent by a nationally recognized overnight courier service,
and addressed to the respective Parties as follows:
To Buyer: COUNTY OF FRESNO
Internal Services Department
333 Pontiac Way
Clovis, CA 93612
Attn: Director of
Internal Services/Chief Information Officer
Telephone: (559) 600-6200
Email:
To Seller: HERITAGE CENTRE LLC
c/o Orton Development, Inc.
1475 Powell Street, Suite 101
Emeryville, CA 94608
Attn: J.R. Orton III and Steve Schwartz
Telephone: (510) 428-0800
Email: eorton@ortondevelopment.com and
sschwartz1@sbcglobal.net
or to such person or at such other place as either Party may from
time to time designate by written notice to the other Party.
Notice given in the foregoing manner shall be deemed sufficiently
given for all purposes hereunder on the date such notice was (i)
personally delivered, deposited and postmarked with the United
States Postal Service, or (ii) delivered by a nationally recognized
overnight courier service, and such Party shall otherwise comply
with this Section 7.04 concerning the giving of notice in such
manner, provided further that, in any event, notices of changes of
address, or termination of this Agreement under Section 2.02,
herein, shall not be effective until actual receipt. For all claims
arising out of or related to this Agreement, nothing in this section
establishes, waives, or modifies any claims presentation
requirements or procedures provided by law, including but not
limited to the Government Claims Act (Division 3.6 of Title 1 of the
Government Code, beginning with section 810).
00516.00100/1234167v2 14
Notices given hereunder shall not be amendments or
modifications to this Agreement.
7.05 Entire Agreement. This Agreement, including all exhibits hereto,
and all related documents referred to in this Agreement or in the
related documents, and the rights and obligations of the Parties
hereto, constitutes the entire agreement between Buyer and Seller
with respect to the subject matter hereof, and supersedes all other
Agreement negotiations, proposals, commitments, oral statements,
writings, advertisements, publications, and understandings of any
nature, unless expressly included in this Agreement.
7.06 Amendment. No provisions of this Agreement may be amended or
modified in any manner except by an agreement in writing by duly
authorized representatives of both Parties.
7.07 Successors. The terms, covenants, and conditions of this
Agreement shall be binding upon, and shall inure to the benefit of,
the heirs, executors, administrators, and assignees of the
respective Parties.
7.08 Assignment.
(a) Neither Party may assign this Agreement, or transfer any of
its rights or obligations under this Agreement, or delegate
any of its obligations under this Agreement, without the prior
written consent of the other Party.
(b) Any such assignment, transfer, or attempted assignment,
transfer or attempted transfer, delegation or attempted
delegation (in any such event whether voluntary or by
operation of law), and any conveyance or attempted
conveyance of, grant of rights in or attempted grant of rights
in, transfer of or attempted transfer (in any such event (s)
whether voluntary or by operation of law) of the Real
Property, or any portion thereof, or title thereto, or estate,
ownership, or interest or right therein (by way of example,
but not limited to, a security interest, lien, encumbrance or
deed of trust) by Seller (or anyone claiming by or through
Seller), without such consent ) shall be null and void.
7.09 Governing Law. This Agreement, including all exhibits hereto, and
the rights and obligations of the Parties hereto, shall be governed
in all respects, including validity, interpretation, and effect, by the
laws of the State of California. For purposes of venue, the
performance of this Agreement shall be deemed to be in Fresno
County, California. In the event of any litigation between the
00516.00100/1234167v2 15
Parties arising out of or related to this Agreement, venue for such
litigation shall only be Fresno County, California.
7.10 Headings. The subject headings of the paragraphs of this
Agreement are included for purposes of convenience only, and
shall not affect the construction or interpretation of any of the
provisions herein.
7.11 Counterparts. This Agreement may be executed by the Parties in
different counterparts, all of which together shall constitute one
agreement, even though all Parties may not have signed the same
document.
7.12 Time. Time is of the essence of this Agreement.
7.13 No Third-Party Beneficiaries. Notwithstanding anything stated to
the contrary herein, there shall be no intended third-party
beneficiaries of this Agreement.
7.14 Partial Invalidity. If any provision in this Agreement is held by a
court of competent jurisdiction to be invalid, void, or
unenforceable, the remaining provisions shall nevertheless
continue in full force without being impaired or invalidated in any
way, unless it would be unreasonable to do so in light of the object
of this Agreement as a whole.
7.15 Additional Documents. Subject to the terms and conditions of this
Agreement, the Parties promptly shall execute and deliver any and
all additional documents, instruments, and notices, and shall do
any and all other acts and things, reasonably necessary in
connection with the performance of their respective obligations
under this Agreement and to carry out the provisions of this
Agreement, and the consummation of the transactions referenced
herein.
7.16 Titles. The section titles and headings contained in this Lease are
inserted as a matter of convenience and for ease of reference
only, and shall be disregarded for all other purposes, including the
construction or enforcement of this Agreement or any of its
provisions.
7.17 Lease Not Terminated. Notwithstanding any provision or rule of
law to the contrary, Seller and Buyer hereby acknowledge,
confirm, agree and covenant that the Lease shall not terminate
upon the execution of this Agreement, the release of contingencies
hereunder, or the expiration of the Due Diligence Period, and the
00516.00100/1234167v2 16
Lease shall continue in full force and effect through and including
the “Expiration Date” set forth in the Lease.
(Signature Page Follows)
00516.00100/1234167v2 17
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
date first written above.
6(//(5
+(5,7$*(&(175(//&
By:
By:
%8<(5
&2817<2))5(612
J.R. Orton III, Manager [Name:__________], Chairman of the Board
of Supervisors of the County of Fresno
$77(67
[Name:___________]
Clerk of the Board of Supervisors
County of Fresno, State of California
By:
Deputy
FOR ACCOUNTING USE ONLY:
ORG No.: 1044
Account No.: 8300
Fund: 0035
Subclass: 10000
00516.00100/1234167v2 18
([KLELW³$´
3109, 3115, 3119, 3121, 3127, 3133, 3147, 3151, and 3155 N. Millbrook Avenue,
Fresno, CA 93726, County of Fresno, State of California, and 3676 and 3708 E. Shields
Avenue, Fresno, CA 93726, County of Fresno, State of California
(APN 437-290-60, APN 445-002-07, and APN 445-002-09)
00516.00100/1234167v2 19
([KLELW³+´
*UDQW'HHG
Recording Requested By:
When Recorded Mail To:
The County of Fresno
Internal Services Department
333 Pontiac Way
Clovis, CA 93612
Exempt from Recording Fees; Government
Code §§ 27383, 27388.1(a)(2)(D) (AB 110,
SB 2)
*UDQW'HHG
(Fee Simple)
HERITAGE CENTRE LLC, a California limited liability company (“Grantor”), hereby
grants,tothe COUNTY OF FRESNO, a political subdivision of the State of California
(“Grantee”), the real property in the City of Fresno, in the County of Fresno, State of
California, described as follows:
Legal description, attached as Exhibit B-1, and incorporated by this reference.
GRANTEE:GRANTOR:
COUNTY OF FRESNO, a political
subdivision of the State of California
HERITAGE CENTRE LLC.
By:By:
[Name:___________], Director Internal J.R. Orton III, Manager
Services Department/Chief Information
Officer
Date:
00516.00100/1234167v2 20
(;+,%,7³%´
Legal Description
THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF CLOVIS,
COUNTY OF FRESNO, STATE OF CALIFORNIA AND IS DESCRIBED AS FOLLOWS:
3$5&(/ $31
THAT PORTION OF THE NORTH HALF OF THE NORTHWEST QUARTER OF
SECTION 26, TOWNSHIP 13 SOUTH, RANGE 20 EAST, MOUNT DIABLO BASE AND
MERIDIAN, THE COUNTY OF FRESNO, CITY OF FRESNO, STATE OF
CALIFORNIA, ACCORDING TO THE OFFICIAL PLAT THEREOF, DESCRIBED AS
FOLLOWS: °
BEGINNING AT A POINT ON THE NORTH LINE OF SAID NORTH HALF OF THE
NORTHWEST QUARTER OF SECTION 26, DISTANCE SOUTH 89° 51’ WEST 629.45
FEET FROM THE NORTH QUARTER CORNER OF SAID SECTION 26; THENCE
SOUTH 50° 10’ WEST A DISTANCE OF THE 78.29 FEET; THENCE SOUTH 0° 09’
EAST A DISTANCE OF 13.15 FEET; THENCE SOUTH 50° 10’ WEST A DISTANCE
OF 68.73 FEET; THENCE SOUTH 18° 19’ WEST A DISTANCE OF 187.51 FEET TO
THE POINT OF CURVATURE OF A CURVE WHOSE INTERIOR ANGLE IN 180° 23’
AND RADIUS IS 15 FEET; THENCE CURVING TO THE LEFT ALONG SAID CURVE
AN ARC DISTANCE OF 28.37 FEET TO THE POINT OF TANGENCY; THENCE
NORTH 89° 56’ EAST A DISTANCE OF 256.64 FEET; THENCE NORTH 0° 04’ EAST
A DISTANCE OF 305 FEET TO THE NORTH LINE OF SAID SECTION 26; THENCE
SOUTH 89° 51’ WEST ALONG SAID NORTH LINE 99.45 FEET TO THE POINT OF
BEGINNING.
EXEMPTING THEREFROM THE NORTH 30 FEET THEREOF:
ALSO EXCEPTING THEREFROM ANY PORTION THEREOF WHICH LIES WITHIN
THE EAST 530 FEET OF THE NORTHWEST QUARTER OF SECTION 26.
3$5&(/ $31
THAT PORTION OF THE NORTHEAST QUARTER OF THE NORTHWEST QUARTER
OF SECTION 26, TOWNSHIP 13 SOUTH, RANGE 20 EAST, MOUNT DIABLO BASE
AND MERIDIAN, ACCORDING TO THE OFFICIAL PLAT THEREOF, DESCRIBED AS
FOLLOWS:
THE EAST 530 FEET OF THAT POTION OF THE NORTHEAST QUARTER OF THE
NORTHWEST QUARTER, LYING NORTH OF THE NORTH LINE OF THE HERNDON
CANAL, SAID HERNDON CANAL PROPERTY BEING DESCRIBED IN DEED DATED
OCTOBER 31, 1955, TO FRESNO IRRIGATION DISTRICT, RECORDED NOVEMBER
00516.00100/1234167v2 21
25, 1955 IN BOOK 3686 PAGE 540 OF OFFICIAL RECORDS, DOCUMENT NO.
79976 AND RE-RECORDED DECEMBER 5, 1955 IN BOOK 2690 PAGE 249 OF
OFFICIAL RECORDS, DOCUMENT NO. 81832; EXCEPTING THE NORTH 30 FEET
THEREOF FOR ROAD PURPOSES.
ALSO EXCEPTING SUCH INTEREST IN AND TO THE EAS 20 FEET FOR ROAD
PURPOSES, AS CONVEYED TO THE COUNTY OF FRESNO BY DEED RECORDED
JUNE 20, 1952 IN BOOK 3183, PAGE 74 OF OFFICIAL RECORDS, DOCUMENT NO.
34120.
TOGETHER WITH THAT PORTION OF MILLBROOK AVENUE ABANDONED TO THE
VALLEY CHILDREN’S HOSPITAL, A CORPORATION, BY AN ORDER OF THE
BOARD OF SUPERVISORS OF FRESNO COUNTY ABANDONING THAT PORTION
OF MILLBROOK AVENUE AS DESCRIBED AS FOLLOWS:
BEGINNING AT A POINT ON THE WEST LINE OF THE NORTHEAST QUARTER OF
SAID SECTION 26, 273.29 FEET NORTH OF THE SOUTHWEST CORNER OF THE
NORTH HALF OF THE NORTHEAST QUARTER OF SAID SECTION 26, SAID POINT
ALSO BEING THE SOUTHERLY CORNER OF OUTLOT "A" OF HEADLINER HOMES
NO. 2, AS SAID LOT IS SHOWN ON THE MAP OF HEADLINER HOMES NO. 2,
RECORDED SEPTEMBER 22, 1954, IN BOOK 17 PAGE 19 OF PLATS, FRESNO
COUNTY RECORDS; THENCE NORTH 0° 11' 10" EAST ALONG THE WEST LINE OF
SAID OUTLOT "A", A DISTANCE OF 93.44 FEET TO THE NORTH CORNER OF SAID
OUTLOT "A"; THENCE NORTH 25° 37' WEST ALONG THE NORTHWESTERLY
PRODUCTION OF THE NORTHEAST LINE OF SAID OUTLOT "A", A DISTANCE OF
0.23 FEET TO THE BEGINNING OF A TANGENT CURVE CONCAVE TO THE
NORTHEAST HAVING A RADIUS OF 300.0 FEET TO A POINT OF CUSP WITH A
TANGENT, SAID POINT OF CUSP BEING ON THE WEST LINE OF MILLBROOK
AVE., AS PREVIOUSLY DEEDED; THENCE SOUTH 0° 11' 10" WEST, ALONG THE
WEST LINE OF MILLBROOK AVENUE, AS PREVIOUSLY DEEDED, A DISTANCE OF
235.23 FEET; THENCE NORTH 70° 03' EAST, ALONG THE WESTERLY
PRODUCTION OF THE SOUTHERLY LINE OF SAID OUTLOT "A", A DISTANCE OF
31.97 FEET TO THE POINT OF BEGINNING; A CERTIFIED COPY OF SAID ORDER
HAVING BEEN RECORDED JANUARY 13, 1955, IN BOOK 3542 PAGE 666 OF
OFFICIAL RECORDS, DOCUMENT NO. 2621;
ALSO EXCEPTING ANY PORTION THEREOF LYING SOUTHERLY OF THE NORTH
LINE OF EAST MICHIGAN AVENUE.
3$5&(/ $31
THE EAST HALF OF LOT 30 OF NATIONAL COLONY, ACCORDING TO THE MAP
THEREOF RECORDED IN BOOK 1 PAGE 38 OF RECORD OF SURVEYS, FRESNO
COUNTY RECORDS;
EXCEPTING THEREFROM THAT PORTION THEREOF LYING NORTH AND WEST
OF THE CENTERLINE OF THE DRY CREEK CANAL.
00516.00100/1234167v2 22
ALSO EXCEPTING THE SOUTH 20 FEET AND THE EAST 20 FEET THEREOF, AS
GRANTED TO THE CITY OF FRESNO BY DEED RECORDED JUNE 21, 1957, IN
BOOK 3940 OF OFFICIAL RECORDS.
ALSO EXCEPTING THEREFROM ALL THAT PORTION AS CONVEYED TO THE
CITY OF FRESNO AND AS PARTICULARLY DESCRIBED IN GRANT DEED
RECORDED MARCH 16, 2004 AS DOCUMENT NO. 2004-0056706 OF OFFICIAL
RECORDS.
00516.00100/1234167v2 23
(;+,%,7³,´
Preliminary Report Permitted Exceptions
A true and correct copy of the Fidelity National Title Company Preliminary Report, cover
pages 1 through 4, and “Preliminary Report Permitted Exceptions,” pages 5 through 21
(the Parties agree that exceptions that have been redacted from Exhibit H are not
permitted exceptions), dated October 4, 2021, at 7:30 AM, which is incorporated herein
by this reference.
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00516.00100/1234166v2
COUNTY OF FRESNO
Fresno, California 58
EXHIBIT J
Estimated Cost Statement/Operating Expenses
Estimated Annual Cost
Property Tax $ 92,638.00
Property Insurance $ 33,534.00
Maintenance/Repair $ 315,029.00
Utilities (PG&E, City Utilities, water,
sewer and trash
$ 550,000.00
Janitorial $ 218,376.00
Landscape Maintenance
Outside Services (Pest Control,
Parking Lot Sweeping, etc.)
Office Supplies
Security
Supplies
Telephone
Legal and Accounting
Licenses and Permits
Other Taxes (Franchise Tax Board)
$
$44,616.00
$12,293.00
$1,022.00
$6,352.00
$17,381.00
$10,459.00
$12,399.00
$1,204.00
$6,800.00
Sub Total
Plus: Annual Base Rent
Total Base Rent & Operating
Expenses
$ 1,322,103.00
$2,640,000.00
$3,962,103.00
Management Fee – 3% $ 118,863.00
of the total annual Base Rent and
Operating Expenses
Annual Total
Monthly Amount
$ 1,440,966.00
$120,080.00