Document:

EXHIBIT 10.8

 

LEASE
AGREEMENT

 

THIS LEASE AGREEMENT,
made and entered into by and between Woodmich, L.L.C., a Michigan limited
liability company, (“Landlord”) and Copart, Inc., a California corporation,
(“Tenant”) dated as of this 14th day of September, 2001.

 

WITNESSETH

 

ARTICLE 1:

PREMISES, APPROVALS, CONDITIONS AND
EXISTING TENANT

 

1.01.        Premises. 
In consideration of the obligation of Tenant to pay rent and of the
other terms, provisions and covenants hereof, Landlord leases to Tenant, and
Tenant leases from Landlord, all that portion of certain real property and the
improvements constructed thereon, together with all rights, easements
(including that certain non-exclusive right to use that certain parcel of land
described on Exhibit “C”) and appurtenances pertaining thereto (the “Premises”)
situated with the County of Wayne, State of Michigan, described in Exhibit “A”,
and commonly known as 21000 Hayden Drive, Woodhaven, Michigan.  Landlord shall retain a non-exclusive, up to
70’ wide, roadway easement over the perimeter of the Premises for ingress and
egress to the rail spur. Such easement location shall be mutually agreed upon
between Landlord and Tenant. Landlord agrees to pay for all costs, including
but not limited to moving or adding any fencing, required to activate and
maintain this easement, and all costs and expenses associated with rail spur.
Landlord shall also assume responsibility for the maintenance of all perimeter
landscaping and trees located adjacent to any easement. Landlord and Tenant will
agree on a fair and equitable basis to either reduce the Rent, or Landlord will
transfer to Tenant, at Landlord’s sole cost, a like amount of property with
similar improvements adjacent to the Premises to replace the property that was
taken for the easement.

 

1.02         Approvals.  Tenant shall seek, at its sole cost and expense, using reasonable
efforts, to obtain all Approvals on or before November 30, 2001.  “Approvals” shall mean the valid and irrevocable
grant, on terms and conditions satisfactory to Tenant in its sole discretion,
of all necessary permits, licenses, variances, and approvals that are necessary
to permit Tenant to operate its Business (as hereinafter defined), all of which
shall be without qualification, except such qualification as shall be
acceptable to Tenant and shall be no longer subject to appeal (collectively,
the “Approvals”).  “Business of Tenant”
shall mean the storage, sale, auction, and transport of used and salvage
vehicles.  Landlord shall cooperate in
good faith with Tenant to obtain such Approvals.  Landlord hereby authorizes Tenant to seek and apply for all
Approvals in Landlord’s name and on Landlord’s behalf.  Tenant shall deliver copies of all
applications for Approvals to Landlord and other correspondence regarding Approvals
upon request.

 

1.03         Premises’
Condition.  Landlord
represents and warrants that as of the date of commencement of the term of this
lease, which shall be a date agreed upon by the parties, but in no event later
than November 30, 2001 (the “Commencement Date”), the Premises shall be in good
repair and condition. Landlord warrants that as of the Commencement Date, the
Premises are in compliance with all applicable governmental laws, ordinances
and regulations, including municipal codes, building codes, and ADA
requirements. In addition, Tenant at its own expense no later than fifteen (15)
days after receiving all Approvals, shall conduct such investigations as it
deems necessary to determine that the Premises are in good operating and
working condition.  In the event Tenant
objects to any property condition, it shall notify in writing the Existing
Tenant (defined below) and Landlord as to its objections.  Landlord shall cause Existing Tenant to
remedy any objectionable conditions to the reasonable satisfaction of the
Tenant. Landlord shall also cause Existing Tenant to remove its property from
the Premises, janitorial clean the office and shop buildings, power wash the
floor, perform any necessary repairs to the buildings, including patching any
roof leaks, repairing any problems with electrical and plumbing systems,
repairing any damaged walls, and repairing or patching the parking lots upon
its vacation of the Premises.  Attached
to this Lease Agreement as Exhibit “B” is a copy of the E&L
Transport Company, LLC (“Existing Tenant”) and Landlord lease amendment on the
Premises which reflects E & L Transport Company’s obligation to vacate,
clean, and repair the Premises. Landlord guarantees the performance of E &
L Transport’s obligations regarding the cleaning and repair of the Premises as
set forth in Exhibit “B” and this Section 1.03. Landlord guarantees that the
HVAC systems located on the Premises shall be in good working condition for the
first 90 days of the first heating and air-

 

 

1

 

 

conditioning seasons. Landlord guarantees that all roofs located upon
the Premises shall be in good repair and free of leaks for the first 12 months
of the Lease. Landlord shall be responsible for all costs and expenses incurred
to satisfy requirements of the City of Woodhaven regarding looping the water
main, installation of back flow devices, and repair or replacement of fire
hydrants, as referenced in the August 7, 2001 letter to the Woodhaven Planning
Commission, a copy of which is attached hereto as Exhibit “E”. Attached hereto
as Exhibit “F” is a letter from Al’s Asphalt Paving Co., Inc. describing the
condition of asphalt covering the Premises as of August 29, 2001. Attached
hereto as Exhibit “G” are fifty (50) photographs initialed by the parties that
the parties agree accurately depict the condition of the asphalt as of the
Commencement Date. Following the execution of this lease but prior to the
Commencement Date, the parties may attach additional Exhibits consisting of
photographs or videos of the Premises’ parking areas that the parties deem
useful in depicting the condition of the parking areas as of the Commencement
Date.

 

1.04         Environmental
Matters.  Existing Tenant
shall deliver to Tenant the existing environmental reports concerning the
Premises and Existing Tenant updated Phase I environmental site assessment. In
the event Existing Tenant conducts any further environmental studies, copies of
such studies will be promptly provided to Tenant. Landlord represents that the
Premises comply in all material respects with Environmental Requirements (as
defined in Section 16.04) and that no action, proceeding, or claim is pending
or threatened involving the Premises concerning any Hazardous Material (as
defined in Section 16.04). Notwithstanding the foregoing, in no event shall
Tenant’s acceptance of the Premises or duty to comply with all laws be deemed
an acceptance of Hazardous Material in, on, or about the Premises or the soil,
surface water, or groundwater thereof, or acceptance of any responsibility or
liability for such Hazardous Materials, except where such Hazardous Material is
caused to exist by Tenant or its employees or agents after the Commencement
Date.

 

1.05         Lease
Termination.  In the event
Tenant does not obtain the Approvals or is not satisfied, in its sole
discretion, as to the Premises’ condition or environmental matters by November
30, 2001, then thereafter, Tenant may elect to terminate this Lease by written
notice to Landlord, after which this Lease shall be null and void and of no
further force or effect. If Tenant does not terminate the lease as set forth
above by November 30, 2001, Landlord may give written notice to Tenant of its
failure to terminate, and Tenant’s time to terminate the lease shall continue
until (ten) 10 days after receipt of Landlord’s notice. Following the
expiration of Tenant’s additional ten (10) days to terminate the lease without
a ratification or termination of the lease by Tenant, Landlord may elect to
terminate this Lease by written notice to Tenant, after which this Lease shall
be null and void and of no further force or effect.

 

1.06         Existing
Tenant.  Landlord and Tenant
acknowledge that Existing Tenant currently holds a leasehold interest and first
right of refusal in the Premises pursuant to a lease agreement dated June 1,
2000 (the “Leasehold”).  The lease
agreement for the existing Leasehold is due to expire on May 31, 2005, with two
(2) successive five (5) year options for Existing Tenant to extend the
Leasehold.  Pursuant to an amendment to
the June 1, 2000 leasehold, Existing Tenant has agreed to vacate the Premises
prior to October 1, 2001, remove all of its personal properties from the
Premises, and terminate its lease and first right of refusal with respect to
the premises described in Exhibit “A”. 
Existing Tenant will continue to lease an approximate 10-acre parcel of
Woodhaven property described in Exhibit “D”. 
In the event Landlord does not deliver exclusive possession of the
Premises to Tenant by November 30, 2001, Tenant may seek specific performance
against Landlord, or may terminate this lease after which this lease shall be
null and void and of no further force or effect. In the event this lease
terminates due to Landlord’s failure to deliver exclusive possession to Tenant,
Landlord shall, in addition to Tenant’s Security Deposit, promptly reimburse
Tenant for all reasonable costs and expenses incurred by Tenant in pursuing
Approvals and investigating the Premises’ condition and environmental matters.  “Exclusive possession” shall mean vacant,
broom-clean with no rights or claims of possession by any party except Tenant.

 

1.07         Underground
Storage Tanks. Landlord shall, at its sole cost, deactivate all
underground storage tanks (“UST’s”) located on the Premises, and remove from
the Premises all above-ground equipment and accessories associated with the
UST’s such that the UST’s will not interfere with Tenant’s use of the Premises.
Tenant shall have no obligations, financial or otherwise, associated with the
care, maintenance, or condition of the UST’s and their related equipment and
accessories. In the event Tenant is required to incur any expenses related to
the UST’s, Landlord shall promptly reimburse Tenant for said expenses upon
demand from Tenant.

 

 

 

2

 

ARTICLE 2:

TERM OF LEASE, COMMENCEMENT,
EXTENSION OPTION AND SURRENDER

 

2.01         Commencement
and Term of Lease.  The term
of Lease (the “Term”) shall commence on the Commencement Date and shall
terminate at 11:59 PM on December 31, 2013. 
However, the first Lease Year shall be less than twelve (12) months and
shall commence with the Commencement Date and shall end on May 31st
occurring after Commencement Date.  Each
Lease Year subsequent to the first Lease Year after the Commencement Date shall
commence on June 1st and end of May 31st, The thirteenth
Lease Year shall commence on May 31st and end on December 31,
2013.  The parties hereto shall execute
a written statement (i) setting forth the Commencement Date promptly after the
same shall have been ascertained, and (ii) the Option Terms (as defined in
Section 2.02 hereof) notice dates in accordance with Section 2.02 hereof.

 

2.02         Extension Options.  Provided Tenant is not in material default
under this Lease, Tenant shall have three (3) successive five (5) year options
to extend the Term of this Lease (“Option Terms”), upon the same terms and
conditions then in effect, except as expressly otherwise provided herein,
except that Rent shall be increased in accordance with Article 3, and except
for each option term being deleted from this Lease upon exercise by Tenant,
exercisable by the delivery of written notice to Landlord by Tenant not less
than six (6) months prior to the expiration of the then current Term, as extended.
If Tenant shall not have given written notice to Landlord at least six (6)
months prior to the expiration of the then current Term, Landlord, at any time
thereafter, may give written notice to Tenant of its failure to elect to extend
the lease, and Tenant’s time to give such notice shall continue until 30 days
after receipt of Landlord’s notice. 
Failure to exercise an option renewal term will result in revocation of
any subsequent option term.  In no event
shall the total Lease Term exceed twenty-seven (27) years.

 

2.03         Surrender and Conveyance by Tenant to Landlord.  Tenant, its successors and assigns and
grantees of the Premises and tenants in and under leases (whether characterized
as “leases” or “subleases”) made by Tenant (either as lessor or sublessor) for
space in, or of parts, or portions, of the Premises for terms commencing on or
subsequent to the date of this Lease, expressly covenants and agrees with
Landlord that upon the expiration or termination of this Lease all improvements
to the Premises, (excluding personal and trade fixtures, or other fixtures and
inventory), shall become the property of Landlord.

 

ARTICLE 3:

BASE RENT AND RENT ADJUSTMENT

 

3.01         Rent. 
Tenant covenants and agrees to pay Landlord at the address contained
herein, or such other place as the Landlord shall designate in writing, Rent on
the Premises as follows (the “Rent”):

 

	
   

  	
  Lease Year

  	
   

  	
  Monthly Rent

  	
   

  	
  Annual Rent For Period

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Initial Lease Term

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Lease Commencement to 05/31/2002

  	
   

  	
  $49,000.00

  	
   

  	
   

  	
   

  
	
   

  	
  06/01/2002 to 05/31/2003

  	
   

  	
  $51,000.00

  	
   

  	
  $612,000.00

  	
   

  
	
   

  	
  06/01/2003 to 05/31/2004

  	
   

  	
  $53,000.00

  	
   

  	
  $636,000.00

  	
   

  
	
   

  	
  06/01/2004 to 05/31/2005

  	
   

  	
  $55,000.00

  	
   

  	
  $660,000.00

  	
   

  
	
   

  	
  06/01/2005 to 05/31/2006

  	
   

  	
  $70,000.00

  	
   

  	
  $840,000.00

  	
   

  
	
   

  	
  06/01/2006 to 05/31/2007

  	
   

  	
  $71,400.00

  	
   

  	
  $856,800.00

  	
   

  
	
   

  	
  06/01/2007 to 05/31/2008

  	
   

  	
  $72,828.00

  	
   

  	
  $873,936.00

  	
   

  
	
   

  	
  06/01/2008 to 05/31/2009

  	
   

  	
  $74,284.56

  	
   

  	
  $891,414.72

  	
   

  
	
   

  	
  06/01/2009 to 05/31/2010

  	
   

  	
  $75,770.25

  	
   

  	
  $909,243.01

  	
   

  
	
   

  	
  06/01/2010 to 05/31/2011

  	
   

  	
  $77,285.66

  	
   

  	
  $927,427.87

  	
   

  
	
   

  	
  06/01/2011 to 05/31/2012

  	
   

  	
  $78,831.37

  	
   

  	
  $945,976.43

  	
   

  
	
   

  	
  06/01/2012 to 05/31/2013

  	
   

  	
  $80,408.00

  	
   

  	
  $964,895.96

  	
   

  
	
   

  	
  06/01/2013 to 12/31/2013

  	
   

  	
  $80,408.00

  	
   

  	
   

  	
   

  

 

 

 

3

 

 

First
5 Year Option

In the first year of the option period the Monthly
Rent will be 102% of the previous year’s Monthly Rent.  Each year thereafter the Monthly Rent will
increase by 2% annually.  The rental
period for each year in the 5 year option shall be twelve months long, starting
on January 1st and ending on December 31st.

 

Second
5 Year Option

In the first year of the option period the Monthly
Rent will be 102% of the previous year’s Monthly Rent.  Each year thereafter the Monthly Rent will
increase by 2% annually.  The rental
period for each year in the 5 year option shall be twelve months long, starting
on January 1st and ending on December 31st.

 

Third
5 Year Option

In the first year of the option period the Monthly
Rent will be 102% of the previous year’s Monthly Rent.  Each year thereafter the Monthly Rent will
increase by 2% annually.  The rental period
for each year in the 5 year option shall be twelve months long, starting on
January 1st and ending on December 31st.

 

ARTICLE 4:

PERMITTED USE

 

4.01         Permitted
Use.  The Premises shall be
continuously used by Tenant for its business as described in Section 1.02,
above.  Tenant shall at its own cost and
expense obtain any and all licenses and permits necessary for any such use.

 

4.02      Compliance
with Governmental Laws and Landlord’s Regulations.  Tenant shall comply with all governmental laws,
ordinances and regulations applicable to the Premises, and shall promptly
comply with all governmental orders and directives for the correction,
prevention and abatement of any violations or nuisances in or upon, or
connected with, the Premises, all at Tenant’s sole expense.  If, as a result of any change in the
governmental laws, ordinances and regulations, the Premises must be altered to
accommodate lawfully the use and occupancy thereof, the entire cost of such
alterations shall be borne by Tenant.

 

ARTICLE 5:

TAXES AND UTILITIES

 

5.01                           Real Estate Taxes.

 

(a)           Tenant shall pay all real estate
taxes, assessments, levies and charges that are levied or assessed by any
lawful authority on the Premises (“Real Estate Taxes”) on or prior to the date
such Real Estate Taxes are due.  Tenant
may take the maximum benefit of any law allowing Real Estate Taxes or
assessments to be paid in installments, and in such event only the amount
actually due during the applicable tax year shall be included in Real Estate
Taxes for purposes of this Article. Tenant’s obligation to pay real estate
taxes hereunder shall be limited to its pro-rata share of the property tax bill
number 82 59 075 99 0003 003. Pro rata share shall be based upon Landlord’s
retention of vacant acreage to total acreage without regard to improvements.
Tenant shall be obligated to pay property taxes based upon improvements to
acreage which is occupied by Tenant.

 

(b)           If the Lease fiscal year differs from
the tax fiscal year, the amount payable by Tenant during the Lease fiscal year
in which a lease commencement or termination occurs shall be prorated on the
basis which the number of days from the commencement of said Lease fiscal year
to said termination date bears to 365.

 

(c)           If at any time during the term hereof
a tax or excise on rents (herein called “Rent Tax”) is levied or assessed by
the federal government, State or any political subdivision thereof, on account
of the Rent and any other sums due under this Lease hereunder or the Interest
of Landlord under this Lease, and if such Rent Tax is in lieu of or as a
substitute for, in whole or in part, Real Estate Taxes or other ad valorem
taxes, Tenant covenants to reimburse Landlord on account thereof.

 

(d)           In the event Real Estate Taxes due on
the Premises are increased as a direct result of the sale or transfer of the
Premises by Landlord to an unrelated third party, Tenant shall not be obligated
to pay the increase in Real Estate Taxes caused by such sale or transfer.

 

 

4

 

5.02      Personal
Property Taxes.  Tenant shall
pay all taxes assessed on Tenant’s personal property on, in or at the Premises.

 

5.03      Utilities.  Tenant shall pay to the
applicable utility companies or governmental agencies for all such utilities
consumed on the Premises during the term.

 

ARTICLE 6:

REPAIRS AND MAINTENANCE

 

6.01         Repairs and Maintenance.  Tenant shall at its own cost and expense
keep and maintain all parts of the Premises in good condition, promptly making
all necessary repairs and replacements, whether ordinary or extraordinary, with
materials and workmanship of the same character, kind and quality as the
original, structural or nonstructural, including but limited to any exterior
painting, exterior lighting, exterior signs and sewage, plumbing and the
maintenance of all paved areas including driveways and alleys, cleaning,
repaving, restripping and resealing, heating and air conditioning systems,
electrical systems and fixtures, sprinkler systems, water heaters, truck doors,
and roofs and exterior structures. 
Tenant as part of its obligation hereunder shall keep the whole of the
Premises in a clean and sanitary condition. 
Tenant will as far as possible keep all such parts of the Premises from
deteriorating, ordinary wear and tear excepted, and from falling temporarily
out of repair, and upon termination of this Lease in any way, Tenant will yield
up the Premises to Landlord in good condition and repair, loss by fire or other
casualty covered by insurance to be secured pursuant to Article 10 excepted.  Tenant’s right to use the easement described
in Exhibit “C” (commonly known as Hayden Drive) is conditioned upon Tenant
maintaining and keeping clear of snow the easement area. Landlord shall require
that any person or entity that leases, purchases, or otherwise utilizes
property adjoining Hayden Drive shall enter into a joint maintenance agreement
with Tenant in the event said person or entity’s use of Hayden Drive is not
insignificant. The joint maintenance agreement shall require the person or entity
to contribute towards the costs of maintaining and snowplowing Hayden Drive in
an amount that is fair and equitable in light of that person or entity’s
proportionate use of Hayden Drive.

 

ARTICLE 7:

ALTERATIONS

 

7.01      Alterations.  Tenant shall have the right, at
Tenant’s expense, to construct any and all existing and future improvements in
compliance with the permitted uses in Section 4.01  hereof and all laws,
regulations, statutes, ordinances and other governmental requirements.  During any period of construction, Tenant
shall keep Landlord’s interest in the Premises free from all liens of
mechanics, materialmen and other suppliers caused by Tenant; provided, however,
Tenant may contest same as long as such liens are removed by bond or Landlord’s
interest in the Premises is otherwise protected in a manner reasonably
satisfactory to Landlord.  Tenant agrees
that it will keep Landlord apprised of any alterations and will provide to
Landlord (to the extent available) any plans and specifications related to such
alterations.

 

ARTICLE 8:

INSPECTIONS

 

8.01      Inspections.  Landlord and Landlord’s agents
and representatives, after at least 24 hours written notice (except for
emergencies) shall have the right to enter and inspect the Premises at any
reasonable time for the following purposes: (a) to ascertain the condition of
the Premises; (b) to determine whether Tenant is diligently fulfilling Tenant’s
responsibilities under this Lease; (c) to show the Premises to prospective
purchasers or mortgagees; and (d) to do any other act or thing Landlord deems
reasonable to preserve the Premises. 
During the period that is six (6) months prior to the end of the Term
and at any time Tenant is in default hereunder, and such default has remained
uncured for at least thirty (30) days, Landlord and Landlord’s agents and
representatives shall have the right to enter the Premises at any reasonable
time during business hours for the purpose of showing the Premises and shall
have the right to erect on the Premises suitable signs indicating that the
Premises are available for lease. 
Tenant shall give written notice to Landlord at least thirty (30) days
prior to vacating the Premises and shall arrange to meet with Landlord for a
joint inspection of the Premises prior to vacating.  In the event of Tenant’s failure to give such notice or arrange
such joint inspection, Landlord’s inspection at or after Tenant’s vacating the
Premises shall be

 

 

5

 

conclusively deemed correct for purpose of determining Tenant’s
responsibility for repairs and restoration. 
In connection with this Article 8, Landlord covenants and agrees that it
will use its best efforts not to unreasonably interfere with Tenant’s use and
occupancy of the Premises.

 

ARTICLE 9:

ASSIGNMENT AND SUBLETTING

 

9.01      Assignment
and Subletting. (a) Subject to the provisions of Section 9.02 and
14.03, Tenant shall have no right to assign or pledge this Lease or to sublet
the whole or any part of the Premises, or permit the use or occupancy of the
Premises by anyone other than Tenant, without the prior written consent of
Landlord which consent may not be unreasonably withheld or delayed by
Landlord.  In the event Tenant desires
to sublet the Premises, or any portion thereof, or assign this Lease, Tenant
shall give written notice thereof to Landlord within a reasonable time prior to
the proposed commencement date of such subletting or assignment, which notice
shall set forth the name of the proposed subtenant or assignee, the relevant
terms of any sublease and copies of financial reports and other relevant
financial information of the proposed subtenant or assignee.  Notwithstanding any permitted assignment or
subletting, Tenant shall at all times remain directly, primarily and fully
responsible and liable for the payment of the rent herein specified and for
compliance with all of its other obligations under the terms, provisions and
covenants of this Lease.  Upon the
occurrence of an “event of default” (as hereinafter defined), if the Premises or
any part thereof are then assigned or sublet, Landlord, in addition to any
other remedies herein provided, or provided by law, may, at its option collect
directly from such assignee or subtenant all rents due and becoming due to
Tenant under such assignment or sublease and apply such rent against any sums
due to Landlord from Tenant hereunder, and no such collection shall be
construed to constitute a novation or a release of Tenant from the further
performance of Tenant’s obligations hereunder. Notwithstanding the above,
Tenant may sublet any part of the Premises to any of Tenant’s vehicle suppliers
without the prior consent of Landlord.

 

9.02         Corporate
Transactions.  Notwithstanding
the provisions of Section 9.01, Tenant may, without Landlord’s consent, assign
this Lease (including Right of First Refusal) to any corporation succeeding to
substantially all the business and assets of Tenant by merger, consolidation,
purchase of assets, stock, or otherwise or to any corporation or entity which
is a parent, subsidiary or division of Tenant (“Affiliate”), provided the
Tenant is not in default hereunder and such successor executes and delivers to
Landlord an instrument in writing assuming all the obligations and liabilities
imposed upon the Tenant hereunder.  Notwithstanding
any permitted assignment or subletting, Tenant shall at all times remain
directly, primarily and fully responsible and liable for the payment of the
rent herein specified and for compliance with all of its other obligations
under the terms, provisions and covenants of this Lease.

 

9.03         Transfer of
Assets.  Tenant hereby
covenants and agrees that in the event that Tenant transfers a majority of its
assets to an Affiliate, this Lease shall also be transferred to and assumed by
the Affiliate receiving the majority of Tenant’s assets.

 

ARTICLE 10:

INSURANCE; FIRE AND CASUALTY DAMAGE

 

10.01       Tenant’s
Insurance. (a) Tenant shall procure and maintain throughout the Term
a policy or policies of insurance, in form and substance reasonably
satisfactory to Landlord, at Tenant’s sole cost and expense, insuring both
Landlord, and Landlord’s mortgagee, if any, and Tenant against all claims,
demands or actions arising out of or in connection with: (i) Tenant’s
operations in and maintenance and use of the Premises; and (ii) Tenant’s
liability assumed under this Lease; the limits of such policy or policies to be
in the amount of not less than $3,000,000 per occurrence in respect of injury
to persons (including death), and in the amount of not less than $250,000 per
occurrence in respect of property damage or destruction, including loss of use
thereof.  All such policies shall be
procured by Tenant from responsible insurance companies reasonably satisfactory
to Landlord.  Insurance certificates
evidencing such coverage, together with receipts evidencing payment of premiums
therefor, shall be delivered to Landlord prior to the Commencement Date.

 

(b)              Tenant shall maintain fire and
extended coverage insurance insuring the Improvements and Premises against
damage or loss from fire or other casualty with companies and in reasonable
amounts acceptable to Landlord, at Tenant’s sole expense, naming Landlord and
any mortgagee as an additional insured.

 

 

 

6

 

Tenant will furnish Landlord
evidence of coverage and payment of premiums at all times.  As often as any of Tenant’s policies
provided for herein shall expire or terminate, renewal or additional policies
upon the same terms shall be procured and maintained by Tenant. If Tenant does
not comply with its covenants in this Section, Landlord may obtain the
insurance described herein, and in such event, Tenant agrees to pay, as
additional rent, the premium for such insurance upon Landlord’s demand.

 

10.02       Waiver of
Subrogation.  Each of
Landlord and Tenant hereby releases the other from any and all liability or
responsibility to the other or anyone claiming through or under them by way of
subrogation or otherwise for any loss or damage to property caused by fire,
extended coverage perils, vandalism or malicious mischief, sprinkler leakage,
or any other perils insured in policies of insurance covering such property,
even if such loss or damage shall have been caused by the fault or negligence
of the other party, or anyone for whom such party may be responsible; provided,
however, that this release shall be applicable and in force and effect only to
the extent that such release shall be lawful at the time and in any event only
with respect to loss or damage occurring during such times as the releasor’s
policies shall contain a clause or endorsement to the effect that any such
release shall not adversely affect or impair said policies or prejudice the
right of the releasor to recover thereunder and then only to the extent of the
insurance proceeds payable under such policies.  Each of Landlord and Tenant agrees that it will request its
insurance carriers to include in its policies such a clause or endorsement.

 

10.03       Damage or
Destruction.  In the event
the Premises is hereafter damaged or destroyed or rendered partially
untenantable for their accustomed use, by fire or other casualty Tenant shall
(to the extent insurance proceeds are available), within sixty (60) days after
such casualty, commence repair of said Premises and within one hundred twenty
(120) days after commencement of such repair, restore the Premises to
substantially the same condition in which it was immediately prior to the
occurrence of the casualty.  From the
date of such casualty until the Premises is so repaired and restored Rent and
all other charges and items payable hereunder shall abate in such proportion as
the part of the Premises thus destroyed or rendered untenantable, bears to the
total Premises.

 

10.04       Liability.  Landlord shall not be liable to
Tenant or Tenant’s employees, agents, patrons or visitors, or to any other
person whomsoever, for any injury to person or damage to property on or about
the Premises, resulting from and/or caused in part or whole by the negligence
or misconduct of Tenant, its agents, servants or employees, invitees, permitees
or of any other person entering upon the Premises, or caused by the Premises
becoming out of repair, or caused by leakage of gas, oil (except that emanating
from UST’s), water or steam or by electricity emanating from the Premises, or
due to any cause whatsoever, and Tenant hereby covenants and agrees that it
will at all times indemnify and hold safe and harmless the Premises, the
Landlord, and Landlord’s agents and employees from any loss, liability, claims,
suits, costs and expense, including attorney’s fees and damages, arising out of
such damage or injury except injury to persons or damage to property the sole
cause of which is the negligence of Landlord or its employees or agents.
Landlord hereby covenants and agrees that it will at all times indemnify and
hold safe and harmless the Tenant, and Tenant’s agents and employees from any
loss, liability, claims, suits, costs and expense, including attorney’s fees
and damages, arising out of: a) the sole negligence or misconduct of Landlord
or its employees or agents, or b) the UST’s referenced in Section 1.07.

 

ARTICLE 11:

EMINENT DOMAIN

 

11.01       Eminent
Domain. (a) If the whole or any substantial part of the Premises
should be taken for any public or quasi-public use under governmental law,
ordinances or regulation, or by right of eminent domain, or by private purchase
in lieu thereof, or if the zoning of the Premises are changed so as to not
allow Tenant’s Permitted Use, and the taking or rezoning would prevent or materially
interfere with the use of the Premises for the purpose for which they are then
being used, this Lease shall terminate effective when the legal taking or
rezoning shall occur as if the date of such taking were the date originally
fixed in the Lease for the expiration of the Term.

 

 

 

7

 

(b)  If part of
the Premises shall be taken for any public or quasi-public use under
governmental law, ordinance, or regulation, or by right of eminent domain, or
by private purchase in lieu thereof, or if the zoning of the Premises are
changed so as to not allow Tenant’s Permitted Use, and this Lease is not
terminated as provided above, this Lease shall not terminate but the rent,
operating costs, taxes, maintenance, and any items deemed additional rent
payable hereunder during the unexpired portion of this Lease shall be reduced
to such extent as may be fair and reasonable under all of the circumstances.

 

(c)  All compensation awarded for any taking or
zoning change of the Premises, and the resultant termination of this Lease
shall belong to Landlord; provided, however, that Tenant shall be entitled to
any award made, whether to Landlord or to Tenant, for loss of business, the
unamortized cost of Tenant’s betterments and Improvements, Tenant’s moving
expenses, and the value of Tenant’s trade fixtures and further provided that
Tenant may apply for and receive an award for the loss of Tenant’s leasehold
estate and for any other amounts allowed by law so long as such award amounts
in no way diminish any award to Landlord or to any mortgage of Landlord with
respect to Landlord’s remainder.

 

ARTICLE 12:

QUIET ENJOYMENT AND HOLDING OVER

 

12.01       Quiet
Enjoyment.  Landlord represents and warrants that it
is the true and lawful owner of the Premises and has full right and authority
to enter into this Lease and that Tenant, upon paying the rental herein set
forth and performing its other covenants and agreements herein set forth, shall
peaceably and quietly have, hold and enjoy the Premises for the Term without
hindrance or molestation from Landlord, its agents, lenders, lienholders, or
mortgage holders, subject to the terms and provisions of this Lease.  Landlord further warrants that to the best
of its knowledge, the Premises is in full compliance with all applicable laws,
rules and regulations.

 

12.02       Holding
Over.  Tenant will, at the
termination of this Lease by lapse of time or otherwise, yield up immediate
possession of the Premises to Landlord. 
If Tenant retains possession of the Premises or any part thereof after
such termination, then Landlord may at its option, serve written notice upon
Tenant that such holding over constitutes the creation of a month to month
tenancy, upon the terms and conditions set forth in this Lease, provided,
however, that the monthly rental shall, in addition to all other sums which are
to be paid by Tenant hereunder, whether or not as additional rent, be equal to
115% of the total rental being paid monthly to Landlord under this Lease
immediately prior to such termination. 
Tenant shall also pay to Landlord all damages sustained by Landlord
resulting from retention of possession by Tenant, including the loss of any
proposed subsequent tenant for any portion of the Premises, so long as Landlord
provides prior written notice to Tenant of the possibility or likelihood of
such damages.  The provisions of this
Section shall not constitute a waiver by Landlord of any right of re-entry as
herein set forth; nor shall receipt of any rent or any other act in apparent affirmance
of the tenancy operate as a waiver of the right to terminate this Lease for a
breach of any of the terms, covenants, or obligations herein on Tenant’s part
to be performed.

 

 

 

8

 

ARTICLE 13:

EVENTS OF  DEFAULT; REMEDIES

 

13.01       Events of
Default.  The following
events shall be deemed to be events of default by Tenant under this Lease.

 

(a)  Tenant shall fail to pay when or before due
any sum of money becoming due to be paid to Landlord hereunder, whether such
sum be any installment of the rent herein reserved, any other amount treated as
additional rent hereunder, or any other payment or reimbursement to Landlord
required herein, whether or not as additional rent hereunder, and such failure
shall continue for a period of five (5) days from the date written notice of
failure to make such timely payment is provided by Landlord to Tenant, or

 

(b)  Tenant shall fail to comply with any
material term or provision of this Lease other than by failing to pay when or
before due any sum of money becoming due to be paid to Landlord hereunder, and
shall not cure such failure within thirty (30) days (forthwith, if the default
involves a hazardous condition) after written notice thereof to Tenant, except
that Tenant’s time to cure shall be extended for a reasonable period of time if
the alleged default is not reasonably capable of cure within said thirty (30)
day period and Tenant proceeds to reasonably and diligently cure such alleged
default; or

 

(c)  Tenant shall fail to vacate immediately the
Premises upon termination of this Lease, by lapse of time or otherwise or upon
termination of Tenant’s right to possession only; or

 

(d)  The leasehold interest of Tenant shall be
levied upon execution or be attached by process of law or Tenant shall fail to
contest diligently the validity of any lien or claimed lien and give sufficient
security to Landlord to insure payment thereof or shall fail to satisfy any
judgement rendered thereon and have the same released, and such default shall
continue for ten (10) days after written notice thereof to Tenant; or

 

(e)  Tenant shall become insolvent, admit in
writing its inability to pay its debts generally as they become due, file a
petition in bankruptcy or a petition to take advantage of any insolvency
statue, make an assignment for the benefit of creditors, make a transfer in
fraud of creditors, apply for the consent to the appointment of a receiver or
itself or of the whole or any substantial part of its property, or file a
petition or answer seeking reorganization or arrangement under the federal
bankruptcy laws, as now in effect or hereafter amended, or any other applicable
law or statute of the United States or any state thereof; or

 

(f)  A court of competent jurisdiction shall enter
an order, judgement or decree adjudicating Tenant as bankrupt, or appointing a
receiver of Tenant, or of the whole or any substantial part of its property,
without the consent of Tenant, or approving a petition filed against Tenant
seeking reorganization or arrangement of Tenant under the bankruptcy laws of
the United States, as now in effect or hereafter amended, or any state thereof,
and such order, judgement or decree shall not be vacated or set aside or stayed
within thirty (30) days from the date of entry thereof.

 

13.02       Remedies.
(a) In the event Tenant fails to pay any installment of rent,
including any amount treated as additional rent hereunder, or other sums
hereunder as and when such installment or other charge is due, Tenant shall pay
to Landlord on demand a late charge in an amount equal to two percent (2%) of
such installment or other charge overdue in any month and two percent (2%) each
month thereafter until paid in full to help defray the additional cost to
Landlord for processing such late payments, and such late charge shall be
additional rent hereunder and the failure to pay such late charge within ten
(10) days after demand thereof shall be an additional event of default
hereunder.  The provisions for such late
charge shall be in addition to all of Landlord’s other rights and remedies
hereunder or at law and shall not be construed as liquidated damages or as
limiting Landlord’s remedies in any manner.

 

(b)  Upon the occurrence of any of such events of
default described in Section 13.01 hereof or elsewhere in this Lease, Landlord
shall have the option to pursue any one or more of the following remedies
without any notice or demand whatsoever.

 

 

 

9

 

(i)  Landlord may, at its election, terminate
this Lease or terminate Tenant’s right to possession only, without terminating
Lease;

 

(ii)  Upon any termination of this Lease or upon
any termination of Tenant’s right to possession without termination of the
Lease, Tenant shall surrender possession and vacate the Premises immediately,
and deliver possession thereof to Landlord, and Tenant hereby grants to
Landlord full and free license to enter into and upon the Premises in such
event with or without process of law and to repossess Landlord of the Premises
as of Landlord’s former estate and to expel or remove Tenant and any others who
may be occupying or within the Premises and to remove any and all property
therefrom, without being deemed in any manner guilty of trespass, eviction or
forcible entry or detainer, Tenant hereby waiving and right to claim damage for
such re-entry and expulsion, and without relinquishing Landlord’s right to rent
or any other right given to Landlord hereunder or by operation of law,

 

(iii)  Upon any termination of this Lease Landlord
shall be entitled to recover as damages, all rent, including any amounts
treated as additional rent hereunder, and other sums due and payable by Tenant
on the date of termination, plus the sum of an amount equal to the then present
value of the rent, including any amounts treated as additional rent hereunder,
and other sums provided herein to be paid by Tenant for the residue of the
Term, less any sums received by Landlord for reletting the Premises.

 

(iv)  Upon any termination of Tenant’s right to
possession only without termination of the Lease, Landlord may, at Landlord’s
option, enter into the Premises, remove Tenant’s signs and other evidence of
tenancy, and take and hold possession thereof as provided in subsection (ii)
above, without such entry and possession terminating the Lease or releasing
Tenant, in whole or in part, from any obligation, including Tenant’s obligation
to pay the rent including any amounts treated as additional rent, hereunder for
the full Term.  In any such case Tenant
shall pay forthwith to Landlord if Landlord so elects, a sum equal to the
present value of the entire amount of the rent, including any amounts treated
as additional rent hereunder, for the residue of the stated Term plus any other
sums provided herein to be paid by Tenant for the remainder of the Term.  Landlord shall use its best efforts to relet
the Premises or any part thereof for such rent and upon such terms as Landlord,
in its sole discretion, shall determine. 
The consideration collected by Landlord upon any such reletting, less
the Landlord’s expenses of reletting and the collection of the rent accruing
therefrom (including attorney’s fees and brokers commissions), shall offset
rent to be paid by the Tenant.

 

(v)  Landlord may, at Landlord’s option, enter
into and upon the Premises, with or without process of law, if Landlord
determines in its sole discretion that Tenant is not acting within a
commercially reasonable time to maintain, repair or replace anything for which
Tenant is responsible hereunder and correct the same, without being deemed in
any manner guilty of trespass, eviction or forcible entry and detainer and
without incurring any liability for any damage resulting therefrom and Tenant
agrees to reimburse Landlord, on demand, as additional rent, for any expenses
which Landlord may incur in thus affecting compliance with Tenant’s obligations
under this Lease;

 

(c)  Pursuit of any of the foregoing remedies
shall not preclude pursuit of any of the other remedies herein provided or any
other remedies provided by law (all such remedies being cumulative), nor shall
pursuit of any remedy herein provided constitute a forfeiture or waiver of any
rent due to Landlord hereunder or of any damage occurring to Landlord by reason
of the violation of any of the terms, provisions or covenants herein
contained.  No act or thing done by
Landlord or its agents during the Term shall be deemed a termination of this
Lease or an acceptance of the surrender of the Premises, and no agreement to
terminate this Lease or accept a surrender of said Premises shall be valid
unless in writing signed by Landlord. 
No waiver by Landlord or any violation or breach of any of the terms,
provisions and covenants herein contained shall be deemed or construed to
constitute a waiver of any other violation or breach of any of the terms,
provisions or covenants herein contained. 
Landlord’s acceptance of rental payments or other payments hereunder
after the occurrence of an event of default shall not be construed as a waiver
of such default, unless Landlord so notifies Tenant in writing, Forbearance by
Landlord to enforce one or more of the remedies herein provided upon an event
of default shall not be deemed or construed to constitute a waiver of such
default or of Landlord’s right to enforce any such remedies with respect to
such default or any subsequent default. 
If, on account of any breach or default by Tenant in Tenant’s
obligations under the terms and conditions of this Lease, it shall become necessary
or appropriate for Landlord to employ or consult with an attorney

 

 

 

10

 

concerning, or to enforce or defend, any of Landlord’s rights or
remedies hereunder, Tenant agrees to pay any attorney’s fees so incurred.

 

(d)  Landlord shall use reasonable efforts to
mitigate its damages due to any default by Tenant.

 

ARTICLE
14:

SUBORDINATION, ESTOPPEL, AND LIENS

 

14.01       Subordination.
(a) As of the Effective Date of this Lease, the Premises are not
encumbered by a mortgage.  However,
Landlord reserves the right to grant a mortgage or mortgages on Landlord’s
interest therein and this Lease.  Tenant
shall, upon the written request of Landlord, subordinate this Lease to the lien
of any mortgage upon the Premises, provided that the holder of any such mortgage
(“Mortgagee”) shall enter into a written agreement which shall, among other
things, provide that:

 

(i)  In the event of foreclosure or other action
taken under the mortgage by Mortgagee, this Lease and the rights of Tenant
hereunder shall not be disturbed or diminished, but shall continue in full
force and effect so long as Tenant complies with the terms hereof;

 

(ii)  In no event shall any term or provision of
this Lease be altered; and

 

(iii)  In all events, the right to purchase
referenced in Article 17 shall survive any foreclosure of Landlord’s fee
interest in the Property.

 

Such agreement
shall be substantially in the form reasonably satisfactory to Tenant.  As used herein, mortgage shall include
mortgages, deeds of trust, deeds to secure debt or other similar instruments,
and any modifications or extensions of same.

 

(b)  Subject to the provisions of Article 17,
should Landlord sell, convey or transfer its interest in the Premises or should
any Mortgagee of Landlord succeed to Landlord’s interest through foreclosure or
deed in lieu thereof, then Tenant shall attorn to such succeeding party as its
Landlord under this Lease promptly upon any such succession, provided that such
succeeding party assumes all of Landlord’s duties and obligations under this
Lease and agrees not to disturb Tenant’s leasehold interest hereunder in
accordance with this Article 14 as long as Tenant is not in material default
beyond any cure period hereunder.

 

14.02          Estoppel.  Within
twenty (20) days after the request by either party, the other party agrees to
deliver to the requesting party and to any potential mortgagee, assignee or
purchaser of the requesting party’s interest in the Property an estoppel
certificate, certifying that this Lease is unmodified and in full force and
effect (or, if there have been modifications, whether same is in full force and
effect as modified, and stating the modifications), that, to the certifying
party or, to the reasonable knowledge and belief, there are no defenses or
offsets thereto (or stating those claimed by the certifying party), that there
are no defaults by the certifying party or, to the reasonable knowledge and
belief of the certifying party, on the part of the requesting party (or, if
such defaults exist, stating their nature); provided, however, that no such
estoppel certificate shall be deemed to amend or modify this Lease.

 

14.03          Liens.  Tenant
shall have no authority to create or place a leasehold mortgage upon the
Premises.  Tenant shall not in any
manner bind the interest of Landlord in the Premises or to charge the rentals
payable hereunder for any claim in favor of any person dealing with Tenant,
including those who may furnish materials or perform labor for any construction
or repairs, and each such claim shall effect and each such lien shall attach
to, if at all, only the leasehold interest granted to Tenant by this
instrument.  Tenant covenants and agrees
that it will pay or cause to be paid all sums legally due and payable by it on
account of any labor performed or materials furnished in connection with any
work performed on the Premises on which any lien is or can be validly and
legally asserted against its leasehold interest in the Premises or the
improvements thereon and that it will save and hold Landlord harmless from any
and all loss, cost or expense based on or arising out of asserted claims or
liens against the Leasehold estate or against the right, title and interest of
Landlord in the Premises or under the terms of this Lease.  Tenant will not permit any mechanic’s lien
or liens or any other liens which may be imposed by law affecting Landlord’s or
it mortgagee’s interest in the Premises to be placed upon the Premises, and in
case of the filing of any such lien Tenant

 

 

 

11

 

will promptly pay or bond over same. 
If any such lien shall remain in force and effect for twenty (20) days
after written notice thereof, Landlord shall have the right and privilege at
Landlord’s option of paying and discharging the same or any portion thereof
without inquiry as to the validity thereof, and any amounts so paid, including
expenses and interest, shall be so much additional indebtedness hereunder due
from Tenant to Landlord and shall be repaid to Landlord immediately on
rendition of a bill thereof. 
Notwithstanding the foregoing, Tenant shall have the right to contest
any such lien in good faith and with all due diligence so long as any such
contest, or action taken in connection therewith, protects the interest of
Landlord and Landlord’s mortgagee in the Premises and Landlord any such
mortgagee are, by the expiration of said twenty (20) day period, furnished such
protection and indemnification against any loss, cost or expense related to any
such lien and the contest thereof as are reasonably satisfactory to Landlord
and any such mortgagee.  Landlord hereby
waives any contractual, statutory or other Landlord’s lien on Tenant’s
furniture, wares, supplies, equipment, inventory and Tenant’s other property.

 

ARTICLE 15:

NOTICES

 

15.01       Notices.  Each provision of this instrument
or of any applicable governmental laws, ordinances, regulations and other
requirements with reference to the sending, mailing or delivery of any notice
of the making of any payment shall be deemed to be complied with when and if
the following steps are taken:

 

(a)  All rent and other payments required to be
made by Tenant to Landlord shall be payable to Landlord or to such other entity
at the address hereinbelow set forth, or at such other address as Landlord may
specify from time to time by written notice delivered in accordance herewith.

 

(b)  Any notice or consent required to be given
by or on behalf of any party hereto to any other party shall be in writing and
mailed by registered or certified mail, return receipt requested or delivered
personally, including by air courier or expedited mail service, addressed as
follows:

 

 

	
   

  	
  If to Landlord:

  	
  Woodmich, L.L.C.

  	
   

  
	
   

  	
   

  	
  c/o Donald C. Hayden

  	
   

  
	
   

  	
   

  	
  3420 N.E. Sugarhill Avenue

  	
   

  
	
   

  	
   

  	
  Jensen Beach, FL 34957

  	
   

  
	
   

  	
   

  	
  Facsimile: (561) 334-7415

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  and to:

  	
  Howard T. Rice

  	
   

  
	
   

  	
   

  	
  230 Glenwood Drive

  	
   

  
	
   

  	
   

  	
  Delray Beach, FL 33445

  	
   

  
	
   

  	
   

  	
  Facsimile: (561) 638-1136

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  If to Tenant:

  	
  Copart, Inc., a California corporation

  	
   

  
	
   

  	
   

  	
  5500 East Second Street

  	
   

  
	
   

  	
   

  	
  2nd Floor

  	
   

  
	
   

  	
   

  	
  Benicia, CA 
  94510

  	
   

  
	
   

  	
   

  	
  Attention: Paul A. Styer, General Counsel

  	
   

  
	
   

  	
   

  	
  Facsimile: (707) 748-5099

  	
   

  

 

or at such other address as may be specified from time to time in
writing.  All such notices hereunder
shall be deemed to have been given on the date of delivery or the date marked
on the return receipt unless delivery is refused or cannot be made because of
any incorrect address provided by the addressee, in which case the date of
postmark shall be deemed the date notice has been given.

 

 

 

12

 

ARTICLE 16:

ENVIRONMENTAL

 

16.01       Environmental
Indemnification by Landlord.  Landlord
shall indemnify and save harmless Tenant and its officers, employees and agents
harmless from any fine, suit, claim, action, liability, damage, loss, cost or
expense, including, without limitation, attorney’s fees and court costs, of any
kind (collectively “Losses”) arising out of or in any way connected with (i)
any spills, releases or discharges of, or contamination by, Hazardous Material
at, onto, beneath, from or affecting the Premises, whenever caused or
occurring, except to the extent caused by the operation or use of the Premises
by Tenant or its employees or agents after the Commencement Date; and (ii)
failure by the Landlord, or by any person or entity prior to the Commencement
Date, to comply with applicable Environmental Requirements. Attached hereto as
Exhibit “H” is an Indemnification Agreement whereby the Donald C. Hayden
Revocable Living Trust dated 10/8/71, as amended, shall guarantee the
obligations of Landlord set forth in this Article 16 and in Section 1.07,
above.

 

16.02       Environmental
Indemnification by Tenant. Tenant shall indemnify and save harmless
Landlord and its officers, employees and agents from any Losses arising out of
or in any way connected with (i) any spills, releases or discharges of
Hazardous Materials at, onto or from the Premises to the extent caused by the
operation or use of the Premises by Tenant or its employees or its agents after
the Commencement Date; and (ii) Tenant’s failure to comply with applicable
Environmental Requirements with respect to its use or operation of the Premises
after the Commencement Date.

 

16.03       Notification
by Landlord.  Landlord shall
promptly notify Tenant upon becoming aware of (i) any claims or demands, or any
enforcement, cleanup or other regulatory or judicial action, threatened, made,
or initiated against Landlord or any other person relating to the Premises
pursuant to Environmental Requirements, including without limitation those
relating to the presence or release of any Hazardous Material on the Premises
or the migration thereof from or to any other property; (ii) any matters where
Landlord or any other tenant of the Landlord or any third party at the Premises
is required by law to give notice to any governmental or regulatory authority
respecting any release of Hazardous Material at or relating to the Premises,
including without limitation any so called “reportable quantity” spill,
discharge or release; (iii) the imposition of any lien on the Premises; and
(iv) any noncompliance by Landlord or any other tenant of the Landlord or any
third party at the Premises with any Environmental Requirements or breach by
Landlord of the requirements set forth in this Article 16.

 

16.04       Notification
by Tenant.  Tenant shall
promptly notify Landlord upon becoming aware of (i) any claims or demands, or
any enforcement, cleanup or other regulatory or judicial action, threatened,
made, or initiated against Tenant relating to the Premises pursuant to
Environmental Requirements, including without limitation relating to the
presence or release of any Hazardous Material on the Premises or the migration
thereof from or to any other property; (ii) any matters where Tenant is
required by law to give notice to any governmental or regulatory authority
respecting any release of Hazardous Material at or relating to the Premises,
including without limitation any so called “reportable quantity” spill,
discharge or release; and (iii) any noncompliance by Tenant or its invitees
with any Environmental Requirements or breach by Tenant of the requirements set
forth in this Article 16.

 

As used herein, the term “Environmental
Requirements” shall mean all applicable federal, state, and local statutes,
regulations, ordinances and other provisions having the force or effect of law,
all judicial and administrative orders and determinations, all contractual
obligations and all common law in each case concerning public health and
safety, worker health and safety, and pollution or protection of the environment,
as the foregoing are enacted or in effect prior to, on, or after the
Commencement Date.  As used herein, the
term “Hazardous Material” shall mean petroleum, any hazardous or toxic
substance, material or waste that is or becomes regulated by any governmental
authority because of its toxic, hazardous, deleterious, or dangerous properties
and includes, without limitation, any material or substance which is: (i)
defined as a “hazardous substance” under the environmental, health, or safety
laws of the state in which the Premises are located, (ii) petroleum; (iii)
asbestos, (iv) designated as a “hazardous substance” pursuant the Federal Water
Pollution Control Act, 33 U.S.C. Section 401 et seq.; (v) defined as a
“hazardous waste” pursuant to the Federal Resource Conservation and Recovery
Act, 42 U.S.C. Section 6901 et seq.; (vi) defined as a “hazardous
substance” pursuant to the Comprehensive Environmental Response, Compensation
and Liability Act, 42 U.S.C. Section 9601 et seq., (vii) defined as a
“regulated substance” pursuant to Subchapter IX, Solid Waste Disposal Act
(Regulation of Underground Storage Tanks), 42 U.S.C. Section 6991 et seq.;
or (viii) defined as a “toxic substance” pursuant to the Toxic Substance
Control Act, 15 U.S.C. Section 2601 et seq.

 

The provisions of this
Article 16 shall survive the expiration or earlier termination of this Lease.

 

 

 

13

 

ARTICLE 17:

RIGHT OF FIRST REFUSAL

 

17.01       Right of
First Refusal.  Provided
Tenant is not in material default under this Lease, if at any time during the
term of this Lease, Landlord shall offer the Premises for sale or lease to any
third party (for purposes hereof, a sale shall not include a donation or
contribution of the Premises to a charitable organization), it is agreed by
Landlord and Tenant that no such sale shall be completed until Landlord shall
have first offered in writing to sell Premises to Tenant upon the same terms
and conditions of the proposed sale to such third party.  Tenant shall have twenty (20) days within
which to decide whether to exercise its right of first refusal hereunder.  If such right is not exercised by Tenant in
writing, delivered to Landlord pursuant to the notice provisions of this Lease,
then Landlord shall be free to sell the Premises to such third party at the
same price as disclosed to Tenant.  If
such sale to a third party is not consummated within six (6) months after the
date of notice to Tenant, then this right of first refusal shall again become
effective, Landlord shall not be entitled to sell the property to such third
party unless it shall have first offered Tenant in writing the right to
purchase the same, and Tenant shall again have twenty (20) days within which to
decide whether to exercise its right of first refusal.  Any sale or transfer of the Premises to a
third party shall be subject to this Lease.

 

17.02       Other Terms
and Provisions Applicable to the Tenant Purchase.  Landlord and Tenant shall reasonably cooperate with
each other in the event Tenant purchases the Premises and in addition to such
other agreements and understandings the parties may reach, the following shall
apply:

 

(a)  At closing Landlord shall convey to Tenant
insurable title to the Premises subject only to all matters of record on the
date of the exercise of the option to purchase, laws, ordinances and zoning
regulations.

 

(b)  As evidence that title is insurable,
Landlord shall, at its own expense, provide Tenant a commitment, issued by a
title insurer licensed to do business in the state in which the Premises is
located, for an ALTA standard form owners policy of title insurance in the
amount of the purchase price.

 

(c)  Closing shall take place within five (5)
days after all closing documents have been prepared, but no later than forty
(40) days after the purchase price has been established.  The closing shall take place at such time
and place as the Landlord and Tenant shall mutually agree.

 

(d)  The party customarily responsible for paying
recording fees, real estate transfer taxes and all its other closing costs
applicable to the purchase shall pay such fees.

 

(e) Each of Landlord and
Tenant shall execute and deliver such other documents as may be reasonably
necessary to fully consummate the transfer of all of Landlord’s right, title
and interest in and to the Premises to Tenant.

 

(f)  If Tenant desires, it may, at its own
expense, obtain a survey of the Premises.

 

ARTICLE 18:

MISCELLANEOUS

 

18.01       Gender. 
Gender words of any gender used in this Lease shall be held and
construed to include any other gender, and words in the singular number shall
be held to include the plural, unless the context otherwise requires.

 

18.02       Successors
and Assigns; Authority.  The
terms, provisions and covenants and conditions contained in this Lease shall
apply to, inure to the benefit of, and be binding upon, the parties hereto and
upon their respective heirs, legal representatives, successors and permitted
assigns, except as otherwise herein expressly provided.  Subject to the provisions of Article 17,
Landlord shall have the right to assign any of its rights and obligations under
this Lease

 

 

 

14

 

 

and Landlord’s grantee or Landlord’s successor, as the case may be,
shall upon such assignment, become Landlord hereunder, thereby freeing and
relieving the grantor or assignor, as the case may be, of all covenants and
obligations of Landlord hereunder.  Each
party agrees to furnish to the other, promptly upon demand, a corporate
resolution, proof of due authorization by partners, or other appropriate
documentation evidencing the due authorization of such party to enter into this
Lease.

 

18.03       Captions.  The caption inserted in this
Lease are for convenience only and in no way define, limit or otherwise
describe the scope or indent of this Lease, or any provision hereof, or in any
way affect the interpretation of this Lease.

 

18.04       Amendment.  This Lease may not be altered,
changed or amended except by an instrument in writing signed by both parties
hereto.

 

18.05       Survival;
Surrender.  All obligations
of Tenant not fully performed as of the expiration or earlier termination of
the term of this Lease shall survive the expiration or earlier termination of
the Term, including without limitation, all payment obligations with respect to
taxes and operating costs and all obligations concerning the condition of the
Premises.  Upon the expiration or
earlier termination of the Term, and prior to Tenant vacating the Premises,
Landlord and Tenant shall jointly inspect the Premises and Tenant shall pay to
Landlord any amount agreed between Landlord and Tenant as reasonably necessary
to put the Premises, including without limitation paving, lighting, heating and
air conditioning systems and equipment therein, in good condition and
repair.  Any work required to be done by
Tenant prior to its vacation of the Premises which has not been completed upon
such vacation, shall be completed by Landlord and billed to Tenant.  Tenant shall also, prior to vacating the
Premises, pay to Landlord the amount, as reasonably estimated by Landlord, of
Tenant’s obligation hereunder for taxes and costs.  All such amounts shall be used and held by Landlord for payment
of such obligations of Tenant hereunder, with Tenant being liable for any
additional cost therefor upon demand by Landlord, or with any excess to be
returned to Tenant after all such obligations have been determined and
satisfied, as the case may be.

 

18.06       Invalidity.
 If any clause, provision or
portion of this Lease or the application thereof to any person or circumstance
shall be invalid or unenforceable under applicable law, such event shall not
effect, impair or render invalid or unenforceable the remainder of this Lease
nor any other clause, phrase, provision or portion hereof, nor shall it affect
the application of any clause, phrase, provision or portion hereof to other
persons or circumstances, and it is also the intention of the parties to this
Lease that in lieu of each such clause, phrase, provision or portion of this
Lease that is invalid or unenforceable, there be added as a part of this Lease
a clause, phrase, provision or portion as similar in terms to such invalid or
unenforceable clause, phrase, provision or portion as may be possible and be
valid and enforceable.

 

18.07       Effective
Date.  All references in this
Lease to ‘the date hereof’ or similar references shall be deemed to refer to
the last date in point of time, on which all parties hereto have executed this
Lease.

 

18.08       Recording.  This Lease shall not be
recorded.  A Memorandum of Lease may be
recorded by Tenant, as part of the full execution of this Lease.

 

18.09       Time is of the Essence.  The time of the performance of all of the covenants,
conditions, and agreements of this Lease is of the essence.

 

18.10       Brokerage
Commissions.  Landlord and
Tenant each warrants and represents to the other that with the exception of
Colliers International neither Landlord nor Tenant has engaged or is being
represented by any broker, agent, or other party in connection with the negotiation
or execution of this Lease on behalf of either of them. Landlord and E & L
Transport Company will be responsible for paying Colliers International a
commission as provided by separate agreements. Tenant will have no obligation
to pay any brokerage, finder’s fee, or real estate commission in connection
with this Lease Agreement.

 

18.11       Governing
Law.  This Lease shall be
construed under the laws of the state in which the Premises is located.

 

 

 

15

 

18.12       Relationship
of Parties.  Nothing herein
shall be construed so as to constitute a joint venture or partnership between
Landlord and Tenant.

 

18.13       Attorneys’
Fees.  In the event that at
any time during the Term of this Lease either Landlord or Tenant shall
institute any action or proceeding against the other relating to the provisions
of this Lease, or any default hereunder, the unsuccessful party in such action
or proceeding agrees to reimburse the successful party for the reasonable
expenses of attorneys’ fees and paralegal fees and disbursements incurred
therein by the successful party.  Such
reimbursement shall include all legal expenses incurred prior to trial and at
all levels of appeal and post-judgment proceedings.

 

18.14       Counterparts.  This
Agreement may be executed in counterparts, each of which shall be deemed an
original and both of which, when taken together, shall constitute one and the
same Agreement.

 

ARTICLE 19:

EXHIBITS

 

19.01                     Exhibits.  Attached to this Lease are the following
Exhibits:

 

                Exhibit A – Survey of Premises

                Exhibit
B – E & L Transport Company Lease Amendment

                Exhibit
C – Premises Ingress and Egress Legal Description

                Exhibit
D – E & L Transport Company 10.2 acres Leased Property Legal Description

                Exhibit
E – August 7, 2001 Letter to the Woodhaven Planning Commission

                Exhibit
F – Letter from Al’s Asphalt Paving Company, Inc.

                Exhibit
G – 50 Photographs of Asphalt as of Commencement Date

                Exhibit
H – Indemnification Agreement from the Donald C. Hayden Revocable Living Trust

 

 

 

[AGREEMENT
CONTINUES ON FOLLOWING PAGE]

 

 

ARTICLE 20:

SECURITY DEPOSIT

 

20.01       Security
Deposit.  Tenant shall
deliver to Landlord the sum of Sixty Thousand and 00/100 ($60,000.00) Dollars
which shall constitute a Security Deposit. 
If Tenant defaults in any of the provisions of this Lease, Landlord may
use, apply, or retain all or any part of the Security Deposit for the payment
of any Base Rent and/or other charges which are the obligation of Tenant under
this Lease in default or for any other sum which Landlord may expend by reason
of Tenant’s default, including any damages or deficiency in the releasing of
the Premises.  If Tenant fully complies
with all the provisions of this Lease, the Security Deposit, or balance thereof,
will be returned to Tenant without interest after (i) the termination of this
Lease, (ii) the removal of Tenant, and (iii) the surrender of possession of the
Premises to Landlord.  Unless Landlord
is shown evidence satisfactory to it that the right to receive the Security
Deposit has been assigned, Landlord may return the Security Deposit to the
original Tenant regardless of one or more assignments of the Lease itself.

 

 

 

16

 

 

	
   

  	
  LANDLORD:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  WOODMICH, L.L.C., a Michigan limited liability
  company

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Donald C. Hayden

  	
   

  
	
   

  	
  Name:

  	
  Donald C. Hayden

  	
   

  
	
   

  	
  Its:

  	
  Chairman

  	
   

  
	
   

  	
  Date:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  TENANT:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  COPART, INC., a California corporation

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Willis J. Johnson

  	
   

  
	
   

  	
  Name:

  	
  Willis J. Johnson

  	
   

  
	
   

  	
  Its:

  	
  Chief Executive Officer

  	
   

  
	
   

  	
  Date:

  	
   

  	
   

  
							

 

 

 

 

17

 

EXHIBIT “A”

 

SURVEY
OF PREMISES

 

 

 

 

9/14/01 REVISION

AMENDMENT TO LEASE AGREEMENT

 

THIS AMENDMENT TO LEASE AGREEMENT, made and
entered into by and between Donald C. Hayden, as Trustee of the Donald C.
Hayden Revocable Living Trust dated 10/8/71, as amended (“Landlord”), and E.
and L. Transport Company L.L.C., a Michigan limited liability company
(“Tenant”) dated as of this 14th day of Sept, 2001.

 

RECITAL

 

Landlord and Tenant acknowledge that Tenant
currently holds a leasehold interest and first right of refusal in the property
described in Exhibit A (the “Original Premises”) pursuant to a Lease Agreement
dated June 1, 2000 (the “Lease”).  The
Lease is due to expire on May 31, 2005, with two successive five year options
to extend the Lease.  Tenant has agreed
to vacate the Copart Premises (as defined herein) before October 1, 2001, and
remove all of its personal property from the Copart Premises.  Tenant will continue to lease and have
exclusive possession of an approximate 10 acre parcel on the Woodhaven property
described in Exhibit B (the “E. and L. Premises”), “Exclusive Possession” shall
mean vacant with no rights or claims of possession by any party except
Tenant.  Tenant shall also have a non
exclusive easement to utilize the area described in Exhibit C as a means of
ingress and egress (the “Non-Exclusive Ingress and Egress Easement”).

 

Simultaneously with the execution of this Lease Amendment Landlord is
entering into a Lease Agreement with Copart Inc. (the “Copart Lease”),
providing for the Exclusive Possession and leasing of a portion of the premises
formerly leased by Tenant.  The parcel
of property leased to Copart is described in Exhibit D (the “Copart
Premises”).  Copart also has a non
exclusive easement to utilize the area described in Exhibit C as a means of
ingress and egress.  The Copart Lease
requires Copart to maintain and clear the easement roadway of snow.  It is anticipated that Tenant’s use of the
non-exclusive ingress and egress easement will be insignificant compared to
Copart’s use.  In the event the Tenant's
usage becomes significant in relationship to Copart’s usage, then Tenant agrees
to contribute to the maintenance and snow clearing on a reasonable and fair
basis with Copart.

 

NOW THEREFORE, the Landlord and Tenant agrees
as follows:

 

1.             The recitals and prefatory phrases set
forth above are hereby incorporated into this Lease Amendment in their entirety
by this reference as is fully set forth herein.

 

2.             Section 1.01 of the Lease is amended by
deleting the existing property descriptions set forth therein and replacing
said descriptions with the legal descriptions set forth in Exhibit B and
Exhibit C.  All references to the
“Premises” in the Lease shall hereinafter be deemed to be references to the “E.
and L. Premises” and the “Non-Exclusive Ingress and Egress Easement”.  Tenant and Landlord acknowledge and agree
that as of the date Copart takes possession of the Copart Premises pursuant to
the Copart Lease (the “Lease

 

1

 

Commencement Date”), Tenant shall have no
responsibility, obligation or liabilities relating to the Copart Premises.

 

In addition the following paragraph shall be
added to Section 1.01.  Tenant will
vacate the Copart Premises before October 1, 2001.  Tenant will remove all of its personal property from the Copart
Premises, clean the office and shop buildings, and power wash the shop floor,
all to the extent required under the Lease. 
Tenant will perform any necessary repairs to the buildings, including
patching any roof leaks, fixing any problems with the electrical and plumbing
systems, and fixing any damaged walls, all to the extent required under the
Lease.  Tenant will also repair or patch
the parking lots where needed, to the extent required under the Lease.  Tenant represents and warrants that the HVAC
system is in good condition and repair, and covenants that it shall maintain
the HVAC system in good condition and repair during the 90-day period after the
Lease Commencement Date.  Except for
these specific obligations of Tenant, Landlord acknowledges that Tenant has
complied with Section 18.05 of the Lease as to the Copart Premises.

 

3.                                       Section 3.01 is
amended as of the Lease Commencement Date by reducing the Base Rent to the
following amounts:

 

	
  Commencement date of Copart
  Lease to May 31, 2002

  	
   

  	
  $

  	
  18,000 per month

  	
   

  
	
  June 1, 2002 May 31, 2003

  	
   

  	
  16,000 per month

  	
   

  
	
  June 1, 2003 May 31, 2004

  	
   

  	
  14,000 per month

  	
   

  
	
  June 1, 2004 May 31, 2005

  	
   

  	
  12,000 per month

  	
   

  

 

4.             Section
3.02 is amended by adding paragraph d.

 

The rent adjustment to reflect the Consumer
Price Index is to be based upon the original monthly rental of $ 67,000 per
month even though the Base Rent has been reduced.

 

5.             Section 5.01 Real Estate Taxes is amended
by adding the following sentence:

 

(d)                                 Tenant’s
obligation to pay Real Estate Taxes hereunder shall be limited to its pro-rata
share of the tax statement for the parcel in which the E. and L. Premises are
located, currently the property which has a property identification number of
59 075 99 0001 000 (the “Total Tax Parcel”). 
Tenant’s pro-rata share will be calculated as follows: (a) if the
property included in the Total Tax Parcel other than the E. and L. Premises
remains unimproved, then Tenant’s pro-rata share shall be 9.03% (10.01
acres/110.9 acres), or (b) if any portion of the property included in the Total
Tax Parcel is improved, Tenant’s pro-rata share shall be 9.03% of only the land
value of the Total Tax Parcel.  In the
event that the E. and L. Premises is given a separate property identification
number, Tenant’s obligation to pay Real Estate Taxes hereunder shall be limited
to the amount on the tax statement for the E. and L. Premises.

 

6.             Section 10.1(b) is deleted in its
entirety.

 

7.                                       Article
17 is deleted in its entirety.  A new
Memorandum of Amendment to Lease shall be recorded by Tenant and Landlord to
reflect the revised property description under Lease and the cancellation of
the right of refusal.

 

2

 

8.             Section 18.10 is amended in its entirety
to read as follows:

 

Landlord and
Tenant each warrants and represents to the other that with the exception of
Colliers International neither Landlord or Tenant has engaged or is being
represented by any broker, agent or other party in connection with the
negotiation or execution of this Lease Amendment on behalf of either of
them.  Landlord and Tenant will be
responsible for paying Colliers International a commission as provided by
separate listing or commission agreements. 
Copies of said Agreements are attached to this Lease Amendment as
Exhibit E.

 

9.                                       Tenant
reaffirms its obligations to indemnify and hold harmless Landlord under Section
16.02 of the Lease to the extent that such obligations relate to Tenant’s
occupancy of the Original Premises from June 1, 2000 until the Lease
Commencement Date (“Section 16.02 Obligations”).  Landlord hereby waives and releases Tenant from and agrees to
indemnify Tenant from and against any and all claims, demands, causes of
action, obligations, liabilities, costs or expenses associated with
environmental, health and safety matters other than the Section 16.02
Obligations.

 

10.                                 This
Lease Amendment shall be effective and operational if and only if the Copart
Lease becomes effective on the Lease Commencement Date.  In the event the Copart Lease does not
become effective by December 15, 2001, Tenant shall have the right to terminate
this Lease Amendment and market the property to other assignees or subtenants.

 

11.                                 This
Lease Amendment may be executed in one or more counterparts, each of which
shall be deemed an original but all of which together will constitute one and
the same instrument.

 

Except as
amended, the original Lease dated June 1, 2000, is reaffirmed.

 

The Parties
intending to be bound hereby execute or cause this Lease Amendment to be
executed this 14th day of Sept, 2001.

 

	
   

  	
  LANDLORD:

  
	
   

  	
   

  
	
   

  	
  DONALD C. HAYDEN, as TRUSTEE OF THE

  DONALD C. HAYDEN REVOCABLE LIVING

  TRUST, dated 10/8/71, as amended.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Donald C. Hayden

  	
   

  
	
   

  	
   

  	
  Donald C. Hayden, Trustee

  
	
   

  	
   

  
	
   

  	
  TENANT:

  
	
   

  	
   

  
	
   

  	
  E. AND L. TRANSPORT COMPANY L.L.C.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Perchie Adkins

  	
   

  
	
   

  	
  Name: Perchie Adkins

  
	
   

  	
  Its: Vice President

  

 

3

 

EXHIBIT
A TO AMENDMENT TO LEASE AGREEMENT

 

EXHIBIT
A

 

DESCRIPTION PARCEL A

 

A parcel of land in the N. 1/2 of Section 27,
T. 4 S., R. 10 E., City of Woodhaven, Wayne County, Michigan described as:  Beginning at a point on the North line of
said Section 27 N. 80 degrees 14 minutes 15 seconds E. 12.92 feet from the
North 1/4 corner of Section 27, T. 4 S., R. 10 E., and proceeding thence N. 80
degrees 14 minutes 15 seconds E. 702.08 feet along the North line of said
Section 27 and centerline of Van Horn Road (66 feet wide); thence Southerly
following the centerline of Clee Drain five courses: S.21 degrees 18 minutes 18
seconds E. 144.93 feet and S. 9 degrees 45 minutes 45 seconds E. 158.00 feet
and S. 7 degrees 58 minutes 56 seconds W. 209.99 feet and S. 1 degree 16
minutes 18 seconds W. 203.76 feet and S.9 degrees 34 minutes 17 seconds E.
245.01 feet; thence S. 80 degrees 14 minutes 15 seconds W. 649.94 feet; thence
along the center line of Brownstown drain the following six courses: N. 08
degrees 19 minutes 18 seconds W. 107.94 feet and N. 47 degrees 31 minutes 03
seconds W. 214.98 feet and N. 16 degrees 10 minutes 47 seconds W. 217.15 feet
and N.18 degrees 51 minutes 42 seconds W. 70.79 feet and N. 31 degrees 26
minutes 27 seconds W.163.00 feet and N. 31 degrees 19 minutes 53 seconds W.
209.38 feet; thence N. 74 degrees 56 minutes 59 seconds E. 72.03 feet; thence
N. 82 degrees 27 minutes 44 seconds E. 100.04 feet; thence N. 80 degrees 44
minutes 24 seconds E. 100.18 feet; thence No. 80 degrees 22 minutes 48 seconds
E. 52.38 feet; thence N.9 degrees 45 minutes 45 seconds W. 33.50 feet to the
point of beginning Parcel contains 18.24 acres, together with easement for
ingress and egress and for public utilities described as: 70 feet in width (35
feet on each side of the below described centerline) to be used for an ingress  and egress road and for public or private
utilities, the centerline of which easement is 945 feet South of and parallel
to the North line of Section 27 (centerline of Van Horn Road) and is more
particularly described as:  Beginning at
a point distant S. 00 degrees 06 minutes 56 seconds W. 974.66 feet along North
and South 1/4 line of said Section 27 and N. 80 degrees 14 minutes 15 seconds
E. 154.80 feet from the North 1/4 centerline Section 27 T. 4 S., R. 10 E.
thence N. 80 degrees 14 minutes 15 seconds E. 2601.82 feet along the centerline
of said easement to a point of ending on the West right-of-way line of Allen
Road (120 feet wide).

 

DESCRIPTION PARCEL B

 

A parcel of land in the N. 1/2 of Section 27,
T. 4 S., R. 10 E., City of Woodhaven, Wayne County, Michigan described as:  Beginning at a point on the center line of
the Clee Drain distant S. 00 degrees 06 minutes 56 seconds W. 974.66 along
North and South 1/4 line of said Section 27 and N. 80 degrees 14 minutes 15
seconds E. 804.74 feet from North 1/4 corner Section 27 T. 4 S., R. 10 E. and
proceeding thence along the center line of Clee Drain the following two
courses:  S. 09 degrees 34 minutes 17
seconds E. 54.99 feet and S. 19 degrees 01 minute 28 seconds E. 186.43 feet;
thence Southerly following the centerline of the Brownstown Drain to its
intersection with the East and West 1/4 line of said Section 27 along the
following 12 courses:  S. 6 degrees 18
minutes 33 seconds E. 116.21 feet and S. 6 degrees 24 minutes 35 seconds W. 104.
12 feet and S. 12 degrees 37 minutes 30 seconds E. 100.12 feet and S. 22
degrees 51 minutes

 

4

 

8.                                       Section
18.10 is amended in its entirety to read as follows:

 

Landlord and
Tenant each warrants and represents to the other that with the exception of
Colliers International neither Landlord or Tenant has engaged or is being
represented by any broker, agent or other party in connection with the
negotiation or execution of this Lease Amendment on behalf of either of them.  Landlord and Tenant will be responsible for
paying Colliers International a commission as provided by separate listing or
commission agreements.  Copies of said
Agreements are attached to this Lease Amendment as Exhibit E.

 

9.                                       Tenant
reaffirms its obligations to indemnify and hold harmless Landlord under Section
16.02 of the Lease to the extent that such obligations relate to Tenant’s
occupancy of the Original Premises from June 1, 2000 until the Lease
Commencement Date (“Section 16.02 Obligations”).  Landlord hereby waives and releases Tenant from and agrees to
indemnify Tenant from and against any and all claims, demands, causes of
action, obligations, liabilities, costs or expenses associated with
environmental, health and safety matters other than the Section 16.02
Obligations.

 

10.                                 This
Lease Amendment shall be effective and operational if and only if the Copart
Lease becomes effective on the Lease Commencement Date.  In the event the Copart Lease does not
become effective by December 15, 2001, Tenant shall have the right to terminate
this Lease Amendment and market the property to other assignees or subtenants.

 

11.                                 This
Lease Amendment may be executed in one or more counterparts, each of which
shall be deemed an original but all of which together will constitute one and
the same instrument.

 

Except
as amended, the original Lease dated June 1, 2000, is reaffirmed.

 

The Parties
intending to be bound hereby execute or cause this Lease Amendment to be
executed
this             day
of             ,
2001.

 

	
   

  	
  LANDLORD:

  
	
   

  	
   

  
	
   

  	
  DONALD C. HAYDEN, as TRUSTEE OF THE

  DONALD C. HAYDEN REVOCABLE LIVING

  TRUST, dated 10/8/71, as amended.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Donald C. Hayden

  	
   

  
	
   

  	
   

  	
  Donald C. Hayden, Trustee

  
	
   

  	
   

  
	
   

  	
  TENANT:

  
	
   

  	
   

  
	
   

  	
  E. and L. TRANSPORT COMPANY L.L.C.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Perchie Adkins

  	
   

  
	
   

  	
  Name: Perchie Adkins

  
	
   

  	
  Its: 
  Vice President

  

 

5

 

24 seconds W. 118.73 feet and S. 13 degrees
59 minutes 13 seconds W. 109.25 feet and S. 3 degrees 11 minutes 25 seconds W.
102.61 feet and S. 21 degrees 04 minutes 21 seconds E. 101.98 feet and S. 35
degrees 52 minutes 02 seconds E. 111.35 feet and S. 56 degrees 41 minutes 58
seconds E. 146.45 feet and S. 46 degrees 59 minutes 50 seconds E. 125.60 feet
and S. 21 degrees 04 minutes 21 seconds E. 203.96 feet and S. 9 degrees 56
minutes 57 seconds W. 165.93 feet; thence S. 82 degrees 07 minutes 45 seconds
W. 1183.00 feet along the East & West 1/4 line to the center corner of said
Section 27; thence N. 0 degrees 06 minutes 56 seconds E. 66.59 feet along the
North and South 1/4 line of said Section 27; thence S. 82 degrees 30 minutes 40
seconds W. 256.21; thence N 01 degree 16 minutes 44 seconds E. 1416.62 feet;
thence along the arc of a curve concave to the Southeast 86.13 feet (Central
Angle 42 degrees 54 minutes 40 seconds, Radius 115.00 feet, Chord N. 22 degrees
44 minutes 04 seconds E. 84.13 feet); thence N. 80 degrees 14 minutes 15
seconds E. 355.76 feet; thence N. 08 degrees 19 minutes 18 seconds W. 35.01
feet; thence N. 80 degrees 14 minutes 15 seconds E. 649.94 feet to point of
beginning.  Parcel contains 42.83 acres
together with easement for ingress and egress and public utilities described
as: 70 feet in width (35 feet on each side of the below described centerline)
to be used for an ingress and egress road and for public or private utilities,
the centerline of which easement is 945 feet South of and parallel to the North
line of said Section 27 (centerline of Van Horn Road) and is more particularly
described as: Beginning at a point distant S. 00 degrees 06 minutes 56 seconds
W. 974.66 feet along north and South 1/4 line of said Section 27 and N. 80
degrees 14 minutes 15 seconds E. 154.80 from the North 1/4 corner Section 27 T.
4 S., R. 10 E.; thence N. 80 degrees 14 minutes 15 seconds E. 2601.82 feet
along centerline of said easement to a point of ending on the West right-of-way
line of Allen Road (120 feet wide).

 

DESCRIPTION PARCEL C

 

A parcel of land in the N. 1/2 of section 27,
T. 4 S., R. 10 E., City of Woodhaven, Wayne County, Michigan described as:  Beginning at a point distant S. 00 degrees
06 minutes 56 seconds W. 33.96 feet along the N. & S. 1/4 line of said
section 27 and S. 80 degrees 22 minutes 48 seconds W. 33.63 feet and S. 80
degrees 44 minutes 24 minutes W. 100.18 feet and S. 82 degrees 27 minutes 44
seconds W. 100.04 feet and S. 74 degrees 56 minutes 59 seconds W. 72.03 feet
from the N. 1/4 corner of section 27, T. 4 
S., R. 10 E., and proceeding thence S. 31 degrees 19 minutes 53 seconds
E. 209.38 feet; thence S. 31 degrees 26 minutes 27 E. seconds 163.00 feet;
thence S. 18 degrees 51 minutes 42 seconds E. 70.79 feet; thence S. 16 degrees
10 minutes 47 seconds E. 217.15 feet; thence S. 47 degrees 31 minutes 03
seconds E. 214.98 feet; thence S. 08 degrees 19 minutes 18 seconds E. 142.95
feet; thence S. 80 degrees 14 minutes 15 seconds W. 355.76 feet; thence along
the arc of a curve concave to the southeast 86.13 feet (Central Angle 42
degrees 54 minutes 40 seconds, Radius 115.00 feet, Chord S. 22 degrees 44
minutes 04 seconds W. 84.13 feet); thence S. 01 degree 16 minutes 44 seconds W.
1416.62 feet; thence S. 82 degrees 30 minutes 40 seconds W. 443.38 feet; thence
S. 00 degrees 03 minutes 45 seconds W. 66.58 feet; thence S. 82 degrees 30
minutes 40 seconds W. 493.17 feet; thence N. 01 degree 09 minutes 00 seconds E.
1246.00 feet; thence N. 28 degrees 51 minutes 00 seconds W. 224.00 feet; thence
N. 01 degree 09 minutes 00 seconds E. 313.82 feet; thence N. 30 degrees 23
minutes 56 seconds E. 628.90 feet; thence along the arc of a curve concave to
the southeast, said line being the southerly right-of-way line of the D.T.
& ? Railroad (Now Grand Trunk Railroad) 691.64 (Central Angle 02 degrees 56
minutes 37 seconds, Radius 13462.80 feet Chord N. 62 degrees 36 minutes 44
seconds E. 691.56 feet); thence N. 84 degrees 10 minutes 45 seconds E.

 

6

 

10.70 feet; thence N. 74 degrees 56 minutes
59 seconds E. 21.43 feet to the point of beginning.  Parcel contains 54.09 acres. 
Together with easement for ingress and egress and public utilities
described as:  70 feet in width (35 feet
on each side of the below described centerline) to be used for an ingress and
egress road and for public or private utilities, the centerline of which
easement is 945 feet South of and parallel to the North line of said Section 27
(centerline of Van Horn Road) and is more particularly described as: Beginning
at a point distant S. 00 degrees 06 minutes 56 seconds N. 974.66 feet along
north and South 1/4 line of said Section 27 and N. 80 degrees 14 minutes 15
seconds E. 154.80 from the North 1/4 corner Section 27 T. 4 S., R. 10 E.;
thence N. 80 degrees 14 minutes 15 seconds E. 2601.82 feet along centerline of
said easement to a point of ending on the West right-of-way line of Allen Road
(120 feet wide).

 

DESCRIPTION OF ROAD INGRESS AND EGRESS OVER
PARCEL C

 

Part of the N. 1/2 of Section 27 T. 4 S., R.
10 E., City of Woodhaven, Wayne County, Michigan described as:  Beginning at a point on the N. & S. 1/4
line of said Section 27, distant S. 00 degrees 06 minutes 56 seconds W. 946.05
feet from the N. 1/4 corner Section 27, T. 4 S., R. 10 E. and proceed thence N.
80 degrees 44 minutes 20 seconds E. 152.83 feet; thence S. 08 degrees 19
minutes 18 seconds E. 46.71 feet; thence S. 80 degrees 14 minutes 15 seconds W.
355.76 feet; thence along the arc of a curve concave to the S.E. 86.13 feet
(Central Angle 42 degrees 54 minutes 40 seconds, Radius 115.00 feet, Chord S.
22 degrees 44 minutes 04 seconds W. 84.13 feet); thence S. 01 degrees 16
minutes 44 seconds W. 1416.62 feet; thence S. 82 degrees 30 minutes 40 seconds
W. 25.00 feet; thence N. 01 degrees 16 minutes 44 seconds E. 1539.09 feet;
thence N. 80 degrees 44 minutes 20 seconds E. 250.85 feet to point of
beginning.

 

DESCRIPTION 10.02 ACRE PARCEL

 

PART OF THE NE 1/4 SECTION 27 T. 4 S., R. 10
E., CITY OF WOODHAVEN, WAYNE COUNTY, MICHIGAN. 
BEING MORE PARTICULARLY DESCRIBED AS BEGINNING AT A POINT DISTANT S. 80°
14’ 15” W. 60.76 FEET ALONG THE NORTH LINE OF SAID SECTION 27 AND S. 00°
40’ 15” E. 992.47 FEET ALONG THE WEST LINE OF ALLEN ROAD 120 FEET WIDE AND S.
80°
14’ 15” W. 1308.24 FEET FROM THE NE CORNER OF SECTION 27 T. 4 S., R. 10 E., AND
PROCEEDING THENCE S. 02° 16’ 36” W. 926.92 FEET; THENCE S. 87°
28’ 38” W. 433.51 FEET; THENCE N. 02° 31’ 22” W. 500.17 FEET;
THENCE N. 17°
30’ 13” W. 358.98 FEET; THENCE N. 80° 14’ 15” E. 608.71 FEET TO
THE POINT OF BEGINNING.  PARCEL CONTAINS
10.02 ACRES. TOGETHER WITH EASEMENT FOR INGRESS AND EGRESS AND PUBLIC UTILITIES
DESCRIBED AS:  70 FEET IN WIDTH (35 FEET
ON EACH SIDE OF THE BELOW DESCRIBED CENTERLINE) TO BE USED FOR AN INGRESS AND
EGRESS ROAD AND FOR PUBLIC OR PRIVATE UTILITIES, THE CENTERLINE OF WHICH
EASEMENT IS 945 FEET SOUTH OF AND PARALLEL TO THE NORTH LINE OF SAID SECTION 27
(CENTERLINE OF VAN HORN ROAD) AND IS MORE PARTICULARLY DESCRIBED AS:  BEGINNING AT A POINT DISTANT S. 00°
06’ 56” W. 974.66 FEET ALONG THE NORTH AND SOUTH 1/4 LINE SAID SECTION 27; AND
N. 80°
14’ 15” E. 154.80 FEET FROM THE NORTH 1/4 CORNER SECTION 27 T. 4. S., R. 10 E.;
THENCE N. 80°
14’ 15” E. 2601.82 FEET ALONG CENTERLINE OF SAID EASEMENT TO A POINT OF ENDING
ON THE WEST RIGHT-OF-WAY LINE OF ALLEN ROAD (120 FEET WIDE).

 

7

 

EXHIBIT
B TO AMENDMENT TO LEASE AGREEMENT

 

EXHIBIT B

 

DESCRIPTION 10.02 ACRE PARCEL.

 

PART OF THE NE 1/4 SECTION 27 T. 4 S., R. 10
E., CITY OF WOODHAVEN, WAYNE COUNTY, MICHIGAN. 
BEING MORE PARTICULARLY DESCRIBED AS BEGINNING AT A POINT DISTANT S. 80°
14’ 15” W. 60.76 FEET ALONG THE NORTH LINE OF SAID SECTION 27 AND S. 00°
40’ 15” E. 992.47 FEET ALONG THE WEST LINE OF ALLEN ROAD 120 FEET WIDE AND S.
80°
14’ 15” W. 1308.24 FEET FROM THE NE CORNER OF SECTION 27 T. 4 S., R. 10 E., AND
PROCEEDING THENCE S. 02° 16’ 36” W. 926.92 FEET; THENCE S. 87°
28’ 38” W. 433.51 FEET; THENCE N. 02° 31’ 22” W. 500.17 FEET;
THENCE N. 17°
30’ 13” W. 358.98 FEET; THENCE N. 80° 14’ 15” E. 608.71 FEET TO
THE POINT OF BEGINNING.  PARCEL CONTAINS
10.02 ACRES.

 

8

 

EXHIBIT
D TO AMENDMENT TO LEASE AGREEMENT

 

EXHIBIT C

 

DESCRIPTION OF INGRESS AND EGRESS EASEMENT

 

AN EASEMENT FOR INGRESS AND EGRESS AND PUBLIC
UTILITIES DESCRIBED AS:  70 FEET IN
WIDTH (35 FEET ON EACH SIDE OF THE BELOW DESCRIBED CENTERLINE) TO BE USED FOR
AN INGRESS AND EGRESS ROAD AND FOR PUBLIC OR PRIVATE UTILITIES, THE CENTERLINE
OF WHICH EASEMENT IS 945 FEET SOUTH OF AND PARALLEL TO THE NORTH LINE OF SAID
SECTION 27 (CENTERLINE OF VAN HORN ROAD) AND IS MORE PARTICULARLY DESCRIBED
AS:  BEGINNING AT A POINT DISTANT S. 00°
06’ 56” W. 974.66 FEET ALONG THE NORTH AND SOUTH 1/4 LINE SAID SECTION 27; AND
N. 80°
14’ 15” E. 154.80 FEET FROM THE NORTH 1/4 CORNER SECTION 27 T. 4. S., R. 10 E.;
THENCE N. 80°
14’ 15” E. 2601.82 FEET ALONG CENTERLINE OF SAID EASEMENT TO A POINT OF ENDING
ON THE WEST RIGHT-OF-WAY LINE OF ALLEN ROAD (120 FEET WIDE).

 

9

 

EXHIBIT
D TO AMENDMENT TO LEASE AGREEMENT

 

EXHIBIT D

 

DESCRIPTION FOR COPART LEASE

 

A PARCEL OF LAND IN THE NORTH 1/2 OF SECTION
27, T. 4 S., R. 10. E., CITY OF WOODHAVEN, WAYNE COUNTY, MICHIGAN, DESCRIBED
AS:  BEGINNING AT A POINT DISTANT S. 00°
06’ 56” W. 33.96 FEET ALONG THE NORTH AND SOUTH 1/4 LINE OF SAID SECTION 27 AND
S. 80°
22’ 48” W. 33.63 FEET AND S. 80° 44’ 24” W. 100.18 FEET AND S. 82°
27’ 44” W. 100.04 FEET AND S. 74° 56’ 59” W. 72.03 FEET
FROM THE NORTH 1/4 CORNER OF SECTION 27, T. 4 S., R. 10. E., AND PROCEEDING
THENCE S. 31°
19’ 53” E. 209.38 FEET; THENCE S. 31° 26’ 27” E. 163.00 FEET;
THENCE S. 18°
51’ 42” E. 70.79 FEET; THENCE S. 16° 10’ 47” E. 217.15 FEET;
THENCE S. 47°
31’ 03” E. 214.98 FEET; THENCE S. 08° 19’ 18” E. 221.28 FEET;
THENCE S. 32°
33’ 37” E. 364.71 FEET; THENCE N. 57° 26’ 23” E. 260.00 FEET;
THENCE S. 32°
33’ 37” E. 230.00 FEET; THENCE S. 57° 26’ 23” W. 161.21 FEET;
THENCE S. 33°
41’ 52” E. 694.89 FEET; THENCE N. 57° 49’ 59” E. 40.14 FEET;
THENCE S. 32°
57’ 16” E. 45.86 FEET; THENCE S. 55° 55’ 42” W. 486.36 FEET;
THENCE S. 82°
28’ 35” W. 468.74 FEET; THENCE N. 61° 01’ 53” W. 455.59 FEET;
THENCE S. 01°
22’ 30” W. 320.27 FEET; THENCE S. 82° 30’ 40” W. 443.38 FEET;
THENCE S. 00°
03’ 45” W. 66.58 FEET; THENCE S. 82° 30’ 40” W. 493.17 FEET;
THENCE N. 01°
09’ 00” E. 1246.00 FEET; THENCE N. 28° 51’ 00” W. 224.00 FEET;
THENCE N. 01°
09’ 00” E. 313.82 FEET; THENCE N. 30° 23’ 56” E. 628.90 FEET;
THENCE ALONG THE ARC OF A CURVE CONCAVE TO THE SOUTHEAST, SAID LINE BEING THE
SOUTHERLY RIGHT-OF-WAY LINE OF THE D.T. & I. RAILROAD (NOW GRAND TRUNK
RAILROAD 691.64 FEET (CENTRAL ANGLE 02° 56’ 37”, RADIUS 13462.80
FEET CHORD N. 62°
36’ 44” E. 691.50 FEET); THENCE N. 84° 10’ 45” E. 10.70 FEET;
THENCE N. 74°
56’ 59” E. 21.43 FEET TO THE POINT OF BEGINNING.  PARCEL CONTAINS 81.74 ACRES. 
TOGETHER WITH AN EASEMENT FOR INGRESS AND EGRESS AND PUBLIC UTILITIES
DESCRIBED AS:  70 FEET IN WIDTH (35 FEET
ON EACH SIDE OF THE BELOW DESCRIBED CENTERLINE) TO BE USED FOR AN INGRESS AND
EGRESS ROAD AND FOR PUBLIC OR PRIVATE UTILITIES, THE CENTERLINE OF WHICH
EASEMENT IS 945 FEET SOUTH OF AND PARALLEL TO THE NORTH LINE OF SAID SECTION 27
(CENTERLINE OF VAN HORN ROAD) AND IS MORE PARTICULARLY DESCRIBED AS:  BEGINNING AT A POINT DISTANT S. 00°
06’ 56” W. 974.66 FEET ALONG NORTH AND SOUTH 1/4 LINE OF SAID SECTION 27 AND N.
80°
14’ 15” E. 154.80 FROM THE NORTH 1/4 CORNER SECTION 27 T. 4 S., R. 10 E.;
THENCE N. 80°
14’ 15” E. 2601.82 FEET ALONG CENTERLINE OF SAID EASEMENT TO A POINT OF ENDING
ON THE WEST RIGHT-OF-WAY LINE OF ALLEN ROAD (120 FEET WIDE).

 

10

 

EXHIBIT
“C”

 

PREMISES
INGRESS AND EGRESS LEGAL DESCRIPTION

 

(“EASEMENT”)

 

 

 

Part of the N. 1/2 of Section 27 T. 4 S., R.
IO E., City of Woodhaven, Wayne County, Michigan described as : Beginning at a
point on the N. & S. 1/4 line of said Section 27, distant S. 00 degrees 06
minutes 56 seconds W. 946.05 feet from the N. 1/4 comer Section 27, T. 4 S., R.
10 E. and proceed thence N. 80 degrees 44 minutes 20 seconds E. 152.83 feet;
thence S. 08 degrees 19 minutes 18 seconds E. 46.71 feet; thence S. 80 degrees
14 minutes 15 seconds W. 355.76 feet, thence along the arc of a curve concave
to the S.E. 86.13 feet (Central Angle 42 degrees 54 minutes 40 seconds, Radius
I 1 5.00 feet, Chord S. 22 degrees 44 minutes 04 seconds W. 84.13 feet); thence
S. 0 1 degrees 16 minutes 44 seconds W. 1416.62 feet; thence S. 82 degrees 30
minutes 40 seconds W. 25.00 feet ‘ thence N. 01 degrees 16 minutes 44 seconds
E. 1539.09 feet, thence N. 80 degrees 44 minutes 20 seconds E. 250.85 feet to
point of beginning.

 

 

 

 

 

 

EXHIBIT
“D”

 

E
& L TRANSPORT COMPANY 10.2 ACRES LEASED PROPERTY LEGAL DESCRIPTION

 

 

PLAN
OF SURVEY — EXHIBIT D

 

CLIENT: 
DONALD HAYDEN, TRUSTEE

 

	
  DESCRIPTION: 

  	
   

  	
  10.02 ACRE PARCEL

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  PART OF THE NE 1/4 SECTION 27 T. 4 S., R 10
  E. CITY OF WOODHAVEN, WAYNE COUNTY, MICHIGAN, BEING MORE PARTICULARLY
  DESCRIBED AS BEGINNING AT A POINT DISTANT S 80°
  14’ 15” W 60.76 FEET ALONG THE N LINE OF SAID SECTION 27 AND S 0°
  40’ 15” E 992.47 FEET ALONG THE W LINE OF ALLEN ROAD 120, FEET WIDE AND S 80°
  14’ 15” W 1308.24 FEET FROM THE NE CORNER OF SECTION 27 T. 4 S., R 10 E., AND
  PROCEEDING THENCE S 2° 16’ 36” W 926.92 FEET; THENCE S 87°
  28’ 38” W 433.51 FEET; THEN N 2° 31’ 22” W 500.17 FEET;
  THENCE N 17°
  30’ 13” W 358.98 FEET; THENCE N 80° 14’ 15” E 608.71 FEET
  TO THE POINT OF BEGINNING.  PARCEL
  CONTAINS 10.02 ACRES AND IS SUBJECT TO RIGHTS AND RESTRICTIONS IF ANY EXISTS.

  

 

 

[MAP]

 

[LOGO]

 

URBAN ENGINEERING CO.

6745 ALLEN ROAD

ALLEN PARK, MICHIGAN
48101

[313] 383 - 5155

 

2

 

 

	
  RICHARD M. THUSKOWSKI, Mayor

  KAREN M. MAZO, Mayor Pro-term

  BRIAN M. D’EMIDIO, Councilman

  DARREL PENIX, Councilman

  KEN JOHNSON, Councilman

  JOSEPH P. CACCIAGLIA II, Councilman

  SHARON BONO-DEATON, Councilwoman

  	
   

  	
  [LOGO]

  	
   

  	
  CITY OF WOODHAVEN

  210?9 West Road

  Woodhaven, Michigan 48183

  Phone: (734) 675-4900

  Fax: (734) 675-4927

  

 

August
7, 2001

 

To:                              Planning
Commission

 

From:                  Michael W. Kruse

Director of Engineering and Public Service

 

Re:                             Proposed
Coparts Auto Auction Site

Site Plan Application # SP 01-10

Special Use Application # SU 01-06

 

I
have reviewed the above referenced applications and have the following comments:

 

There are no new utilities planned according
to the plan submitted by the applicant, however, there are some issues with the
existing utilities the applicant should be made aware of:

 

The existing
watermain through the site is an unlooped watermain which exceeds the city’s
current requirement for unlooped watermains by a considerable distance.  The proponent should verify that adequate
water is available for their operations and fire protection needs.  If not, the proponent may have to install
additional watermain to complete the loop.

 

The Water
& Sewer Department will require proper back flow devices, in accordance
with current State laws and City ordinances.

 

There are some
on-site fine hydrants which need some work on them. The Water & Sewer
Department can be contacted for further information.

 

Also, the applicant should be made aware that
a large portion of the site is a flood plain. 
The flood plain should be shown on the site plan.  An MDEQ permit is required for occupation of
or work within a flood plain.

 

If there are any questions please do not
hesitate to contact me.

 

 

 

Al’s asphalt paving co inc

 

25500
Brest / Taylor, MI 48180-4065 • (734) 946-1880 • Fax (734) 946-4502

 

 

August
29, 2001

 

Copart

5500
East Second St, 2nd FL.

Benicia,
CA. 94510

 

Attn:
Paul Styer

Attn:
Larry Stripling

 

RE:
Pavement condition at E & L site, Woodhaven, MT

 

Gentlemen,

 

In response to your request I participated in
a walk through at the above referenced site on August 29, 2001 in order to
determine the present condition of the asphalt pavement.  Upon visual inspection I observed a large
amount of structural cracks anywhere from 1/4” to 3/4” in width which can
easily be repaired with hot rubber joint sealing.  There are various areas throughout the property which are
alligatored and delaminated due to normal wear and tear and can be repaired
either through surface patching or removal and replacement.  Most of the pavement is 15 to 20 years old
and will need to be restored in the next several years.  Asphalt thickness is generally 3” average,
there is a heavy duty area that was paved around 1989 or 1990 which was cement
stabilized and paved with 6” asphalt and is in excellent condition showing only
the structural cracking previously mentioned. 
The property has a high water table, which is the main cause of the
existing pavement damage, but there are large underground storm lines and drain
tile present to help minimize the potential damage from water
infiltration.  Water damage appears to
be more prevalent at the southwest end of the property.  Generally speaking the pavement is in mostly
good condition with a few isolated areas. 
The design thickness in the standard duty areas was intended only for
parking cars and will most likely deteriorate at a faster than normal rate if
it is being used by heavy equipment on a daily basis.  I trust this report answers any questions you may have.  If I can be of any further assistance please
do not hesitate to contact me at your convenience.

 

Respectfully,

 

Dave Coppola – Al’s Asphalt Paving

 

 

 

INDEMNIFICATION
AGREEMENT

 

THIS
AGREEMENT, made this 14th day of September, 2001, by and between the Donald C.
Hayden Revocable Living Trust dated October 8, 1971, as amended (the “Trust”)
and Copart, Inc. (the “Tenant”)

 

RECITAL

 

The Donald C.
Hayden Trust for many years has owned a parcel of property in Woodhaven,
Michigan, a portion of which parcel contained the premises described in Exhibit
A.

 

The Trust has
transferred the Exhibit A premises to Woodmich, L.L.C., a Michigan Limited
Liability Company.  Woodmich and the
Tenant are entering into a Lease Agreement with respect to the Exhibit A
premises.  The capitalized terms in this
Indemnification Agreement are defined in and referred to in the Lease Agreement
to be entered into between Tenant and Woodmich.  As an inducement for Tenant to lease the Exhibit A premises from
Woodmich, the Trust has agreed to the following environment indemnification:

 

Environmental Indemnification by Trust.  Trust shall indemnify and save harmless
Tenant and its officers, employees and agents harmless from any fine, suit,
claim, action, liability, damage, loss, cost or expense, including, without
limitation, attorney’s fees and court costs, of any kind (collectively
“Losses”) arising out of or in any way connected with (i) any spills, releases
or discharges of, or contamination by, Hazardous Material at, onto, beneath,
from or affecting the Premises, whenever caused or occurring, except to the
extent caused by the operation or use of the Premises by Tenant or its employees
or agents after the date of commencement of the term of this Lease
(‘Commencement Date’); (ii) failure by the Trust, or by any person or entity
prior to the Commencement Date, to comply with applicable Environmental
Requirements; (iii) the underground storage tanks located on the Exhibit A
Premises.

 

	
   

  	
  DONALD C. HAYDEN, as TRUSTEE OF THE

  DONALD C. HAYDEN REVOCABLE LIVING

  TRUST, dated 10/8/71, as amended.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Donald C. Hayden

  	
   

  	 

	
   

  	
   

  	
  Donald C. Hayden, Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
  TENANT:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  COPART, INC.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Willis J. Johnson

  	
   

  
	
   

  	
  Name: Willis J. Johnson

  	
   

  
	
   

  	
  Its: Chief Executive Officer

  	
   

  
								

 

1

 

ATTACHMENT
TO INDEMNIFICATION AGREEMENT

 

EXHIBIT
A

 

DESCRIPTION FOR COPART LEASE

 

A PARCEL OF LAND IN THE NORTH 1/2 OF SECTION
27, T. 4 S., R. 10. E., CITY OF WOODHAVEN, WAYNE COUNTY, MICHIGAN, DESCRIBED
AS:  BEGINNING AT A POINT DISTANT S. 00°
06’ 56” W. 33.96 FEET ALONG THE NORTH AND SOUTH 1/4 LINE OF SAID SECTION 27 AND
S. 80° 22’ 48” W. 33.63 FEET AND S. 80° 44’ 24” W. 100.18 FEET AND S. 82° 27’
44” W. 100.04 FEET AND S. 74° 56’ 59” W. 72.03 FEET FROM THE NORTH 1/4 CORNER
OF SECTION 27, T. 4 S., R. 10. E., AND PROCEEDING THENCE S. 31° 19’ 53” E.
209.38 FEET; THENCE S. 31° 26’ 27” E. 163.00 FEET; THENCE S. 18° 51’ 42” E.
70.79 FEET; THENCE S. 16° 10’ 47” E. 217.15 FEET; THENCE S. 47° 31’ 03” E.
214.98 FEET; THENCE S. 08o 19’ 18’’ E. 221.28 FEET; THENCE S. 32o 33’ 37” E.
364.71 FEET; THENCE N. 57o 26’ 23” E. 260.00 FEET; THENCE S. 32o 33’ 37” E.
230.00 FEET; THENCE S. 57o 26’ 23” W. 161.21 FEET; THENCE S. 33o 41’ 52” E.
694.89 FEET; THENCE N. 57o 49’ 59” E. 40.14 FEET; THENCE S. 32o 57’ 16” E.
45.86 FEET; THENCE S. 55o 55’ 42” W. 486.36 FEET; THENCE S. 82o 28’ 35” W.
468.74 FEET; THENCE N. 61o 01’ 53” W. 455.59 FEET; THENCE S. 01o 22’ 30” W.
320.27 FEET; THENCE S. 82o 30’ 40” W. 443.38 FEET; THENCE S. 00o 03’ 45” W.
66.58 FEET; THENCE S. 82o 30’ 40” W. 493.17 FEET; THENCE N. 01o 09’ 00” E.
1246.00 FEET; THENCE N. 28o 51’ 00” W. 224.00 FEET; THENCE N. 01o 09’ 00” E.
313.82 FEET; THENCE N. 30o 23’ 56” E. 628.90 FEET; THENCE ALONG THE ARC OF A
CURVE CONCAVE TO THE SOUTHEAST, SAID LINE BEING THE SOUTHERLY RIGHT-OF-WAY LINE
OF THE D.T. & I. RAILROAD (NOW GRAND TRUNK RAILROAD 691.64 FEET (CENTRAL
ANGLE 02o 56’ 37”, RADIUS 13462.80 FEET CHORD N. 62o 36’ 44” E. 691.50 FEET);
THENCE N. 84o 10’ 45” E. 10.70 FEET; THENCE N. 74o 56’ 59” E. 21.43 FEET TO THE
POINT OF BEGINNING.  PARCEL CONTAINS
81.74 ACRES.  TOGETHER WITH AN EASEMENT
FOR INGRESS AND EGRESS AND PUBLIC UTILITIES DESCRIBED AS:  70 FEET IN WIDTH (35 FEET ON EACH SIDE OF
THE BELOW DESCRIBED CENTERLINE) TO BE USED FOR AN INGRESS AND EGRESS ROAD AND
FOR PUBLIC OR PRIVATE UTILITIES, THE CENTERLINE OF WHICH EASEMENT IS 945 FEET
SOUTH OF AND PARALLEL TO THE NORTH LINE OF SAID SECTION 27 (CENTERLINE OF VAN
HORN ROAD) AND IS MORE PARTICULARLY DESCRIBED AS; BEGINNING AT A POINT DISTANT
S. 00o 06’ 56” W. 974.66 FEET ALONG NORTH AND SOUTH 1/4 LINE OF SAID SECTION 27
AND N. 80o 14’ 15” E. 154.80 FROM THE NORTH 1/4 CORNER SECTION 27 T. 4 S., R.
10 E.; THENCE N. 80o 14’ 15” E. 2601.82 FEET ALONG CENTERLINE OF SAID EASEMENT
TO A POINT OF ENDING ON THE WEST RIGHT-OF-WAY LINE OF ALLEN ROAD (120 FEET
WIDE).

 

2

 

DESCRIPTION
OF INGRESS AND EGRESS EASEMENT

 

AN EASEMENT
FOR INGRESS AND EGRESS AND PUBLIC UTILITIES DESCRIBED AS:  70 FEET IN WIDTH (35 FEET ON EACH SIDE OF
THE BELOW DESCRIBED CENTERLINE) TO BE USED FOR AN INGRESS AND EGRESS ROAD AND
FOR PUBLIC OR PRIVATE UTILITIES, THE CENTERLINE OF WHICH EASEMENT IS 945 FEET
SOUTH OF AND PARALLEL TO THE NORTH LINE OF SAID SECTION 27 (CENTERLINE OF VAN
HORN ROAD) AND IS MORE PARTICULARLY DESCRIBED AS:  BEGINNING AT A POINT DISTANT S. 00o 06’ 56” W.
974.66 FEET ALONG THE NORTH AND SOUTH 1/4 LINE SAID SECTION 27; AND N. ?0o 14’
15” E. 154.80 FEET FROM THE NORTH 1/4 CORNER SECTION 27 T. 4. S., R. 10 E.;
THENCE N. 80o 14’ 15” E. 2601.82 FEET ALONG CENTERLINE OF SAID EASEMENT TO A
POINT OF ENDING ON THE WEST RIGHT-OF-WAY LINE OF ALLEN ROAD (120 FEET WIDE).

 

3

 

MEMORANDUM OF LEASE

 

 

                THIS MEMORANDUM OF LEASE is made
and entered into effective as of ________________, 2001, by and between
Woodmich, L.L.C., a Michigan limited liability company, (“Landlord”), and
Copart, Inc., a California corporation, (“Tenant”).

 

                TERM
AND PROPERTY.  For the term and upon
the provisions set forth in that certain written Property Lease of even date
herewith from Landlord to Tenant (“Property Lease”), all of which provisions
are specifically made a put hereof as fully and completely as if set out in
full herein, Landlord leases to Tenant and Tenant leases from Landlord that
certain real property consisting of land and any and all Improvements
(“Property”) located at 21000 Hayden Drive, Woodhaven, Michigan, more
particularly described on Exhibit “A” attached hereto and made a part hereof,
together with all rights of ingress and egress and all other rights appurtenant
to said Property, including, without limitation, the right to use the building
constructed or to be constructed on the Property for the purposes contemplated
in the Property Lease, all of which rights are more particularly described in
the Property Lease.

 

                OPTIONS
TO EXTEND TERM.  Reference is
particularly made to Article 2 of the Property Lease wherein Tenant is given
the option to extend the term of the Property Lease on the terms and conditions
set forth therein.

 

                USE.  Reference is particularly made to Article 7
of the Property Lease wherein Tenant is granted the right to use the Property
for the storage, sale, auction, and transport of used and salvage vehicles.

 

                PURPOSES
OF MEMORANDUM OF LEASE.  This
Memorandum of Lease is prepared for the purpose of recording and notice and in
no way modifies the express and particular provisions of the Property Lease.

 

                RIGHT
OF FIRST REFUSAL.  Tenant has the
right of first refusal to purchase as set forth in the Lease.

 

                IN WITNESS WHEREOF this Memorandum of Lease has been
executed as of the day and year first above written.

 

	
  TENANT:

  	
   

  	
  LANDLORD:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Copart, Inc.
  a California corporation

  	
   

  	
  Woodmich,
  L.L.C.,

  	
   

  
	
   

  	
   

  	
   

  	
  a Michigan
  limited liability company

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Willis J. Johnson

  	
   

  	
  By:

  	
  /s/
  Donald C. Hayden

  	
   

  
	
  Name:

  	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
  Its:

  	
  CEO

  	
   

  	
  Its:

  	
  Member

  	
   

  
								

 

 

 

 

 

 

 

	
  STATE OF

  	
   

  	
  )

  	
   

  
	
   

  	
   

  	
  )

  	
  ss.

  
	
  COUNTY OF

  	
   

  	
  )

  	
   

  

 

 

I,
the undersigned, a Notary Public, in and for the County and State aforesaid, DO
HEREBY CERTIFY, that                                                 personally
known to me to be the _______________________ of Copart, Inc., a California
corporation, and personally known to me to be the same person(s) whose name is
subscribed to the foregoing instrument, appeared before me this day in person
and severally acknowledged that as such                                                                                 he signed and delivered the said instrument
as                                          of said corporation, and caused the corporate seal of said
corporation to be affixed thereto, pursuant to authority, given by the Board of
Directors of said corporation as his free and voluntary act, and as the free
and voluntary act and deed of said corporation for the uses and purposes
therein set forth.

 

Given
under my hand and official seal this                      day
of September, 2001.

 

 

	
   

  	
   

  
	
   

  	
  Notary
  Public

  

 

My Commission
Expires:

 

 

	
  STATE OF

  	
   

  	
  )

  	
   

  
	
   

  	
   

  	
  )

  	
  ss.

  
	
  COUNTY OF

  	
   

  	
  )

  	
   

  

 

            I, the undersigned, a Notary Public, in and for the
County and State aforesaid, DO HEREBY CERTIFY, that                                                     personally
known to me to be a member of Woodmich, L.L.C., a Michigan limited liability
company and personally known to me to be the same persons whose name is
subscribed to the foregoing instrument, appeared before me this day in person
and severally acknowledged that as such member he signed and delivered the said
instrument as member of said limited liability company, pursuant to authority,
given by the Board of Directors of said limited liability company as his free
and voluntary act, and as the free and voluntary act and deed of said limited
liability company for the uses and purposes therein set forth.

 

Given
under my hand and official seal this                       day of September 2001.

 

 

 

	
   

  	
   

  
	
   

  	
  Notary
  Public

  

 

My Commission
Expires:Exhibit 10.9

 

TABLE OF CONTENTS

 

	
  1. TERM

  	
   

  
	
  2. POSSESSION

  	
   

  
	
  3. BASE RENT

  	
   

  
	
  4. ADDITIONAL RENT

  	
   

  
	
  A.  Definitions.

  	
   

  
	
  B.  Tax Adjustment.

  	
   

  
	
  C.  Operating Expense Adjustment.

  	
   

  
	
  D.  Adjustment for services Not
  Rendered  by Landlord.

  	
   

  
	
  E.  Audit of Operating Expenses.

  	
   

  
	
  5. USE OF PREMISES

  	
   

  
	
  A.  Permitted Use.

  	
   

  
	
  B.  Compliance with Laws.

  	
   

  
	
  C.  Americans With Disabilities Act.

  	
   

  
	
  6. CONDITION OF PREMISES

  	
   

  
	
  7. SERVICES

  	
   

  
	
  A.  List of Services.

  	
   

  
	
  B.  Interruption of Services.

  	
   

  
	
  C.  Charges for Services.

  	
   

  
	
  D.  Telecommunications.

  	
   

  
	
  8. REPAIRS

  	
   

  
	
  9. ADDITIONS AND ALTERATIONS

  	
   

  
	
  10. COVENANT AGAINST LIENS

  	
   

  
	
  11. INSURANCE AND WAIVER OF
  CLAIMS-INDEMNIFICATION

  	
   

  
	
  12. FIRE OR CASUALTY

  	
   

  
	
  13. NONWAIVER

  	
   

  
	
  14. CONDEMNATION

  	
   

  
	
  15. ASSIGNMENT AND SUBLETTING

  	
   

  
	
  16. SURRENDER OF POSSESSION

  	
   

  
	
  17. HOLDING OVER

  	
   

  
	
  18. TENANT’S CERTIFICATE

  	
   

  
	
  19. SUBORDINATION

  	
   

  
	
  20. CERTAIN RIGHTS RESERVED BY LANDLORD

  	
   

  
	
  21. RULES AND REGULATIONS

  	
   

  
	
  22. LANDLORD’S REMEDIES

  	
   

  
	
  23. EXPENSE OF ENFORCEMENT

  	
   

  
	
  24. COVENANT OF QUIET ENJOYMENT

  	
   

  
	
  25. SECURITY DEPOSIT

  	
   

  
	
  26. REAL ESTATE BROKER

  	
   

  
	
  27. MORTGAGEE PROTECTION CLAUSE

  	
   

  
	
  28. SEVERABILITY

  	
   

  
	
  29. HAZARDOUS MATERIALS

  	
   

  
	
  30. MISCELLANEOUS

  	
   

  
	
  A.  Rights Cumulative.

  	
   

  
	
  B.  Overdue Amounts-Rent Independent.

  	
   

  
	
  C.  Terms.

  	
   

  
	
  D.  Binding Effect.

  	
   

  
	
  E.  Lease Contains All Terms.

  	
   

  
	
  F.  Delivery for Examination.

  	
   

  
	
  G.  No Air Rights.

  	
   

  
	
  H.  Intentionally Deleted.

  	
   

  
	
  I.  Tenants Claims.

  	
   

  

 

i

 

	
  J.  Intentionally Deleted.

  	
   

  
	
  K.  Transfer of Landlord’s Interest.

  	
   

  
	
  L.  Landlord’s Title.

  	
   

  
	
  M.  Recording.

  	
   

  
	
  N.  Captions.

  	
   

  
	
  O.  Covenants and Conditions.

  	
   

  
	
  P.  Only Landlord/Tenant Relationship.

  	
   

  
	
  Q.  Application of Payments.

  	
   

  
	
  R.  Definition of “Landlord”.

  	
   

  
	
  31. NOTICES

  	
   

  
	
  32. TIME OF THE ESSENCE

  	
   

  
	
  33. EXPANSION OPTION

  	
   

  
	
  34. RIGHT OF NOTICE

  	
   

  
	
  35. OPTION TO RENEW

  	
   

  
	
  36. OPTIONS TO PURCHASE

  	
   

  
	
  A.  First Option.

  	
   

  
	
  B.  Second Option.

  	
   

  
	
  C.  Third Option.

  	
   

  
	
  D.  Limitation.

  	
   

  
	
  37. PARKING

  	
   

  
	
  38. USE OF THE ROOF AND BUILDING
  STRUCTURE

  	
   

  
	
  39. GENERATOR PAD

  	
   

  
	
  40. SIGNAGE

  	
   

  
	
  41. RIGHT OF OFFER REGARDING ADJACENT
  LAND

  	
   

  
	
  42. LIMITATION ON LANDLORD’S LIABILITY

  	
   

  
	
   EXHIBITS:

  	
  A.  Premises

  	
   

  
	
   

  	
  B.  Work
  Letter

  	
   

  
	
   

  	
  C.  Sample of
  Tenant’s Certificate

  	
   

  
	
   

  	
  D.  Rules
  & Regulations

  	
   

  
	
   

  	
  E.  List of
  Equipment

  	
   

  
	
   

  	
  F. 
  Memorandum of Lease and Option to Purchase and Right of Offer

  	
   

  
	
   

  	
  G.  Purchase
  Agreement

  	
   

  
	
   

  	
  H.  Rules
  & Regulations for Use of Communication Equipment

  	
   

  
	
   

  	
  I.  Rules
  & Regulations for Use of Pad Area

  	
   

  
	
   

  	
  J.  Pro Forma
  Policy [Leasehold]

  	
   

  
	
   

  	
  K.  Pro Forma
  Policy [Purchase Option]

  	
   

  
	
   

  	
  L.  Pro Forma Policy [Right of Offer Option]

  	
   

  

 

 

ii

 

OFFICE LEASE

GREEN VALLEY BUILDING 12

FAIRFIELD, CALIFORNIA

 

 

This AGREEMENT OF LEASE (hereinafter referred to as the “Lease”) is
made this ___ day of November 2001, by and between GREEN VALLEY BUILDING 12
LLC, a Delaware limited liability company (hereinafter referred to as
“Landlord”), and  COPART, INC., a
California corporation (hereinafter referred to as “Tenant”) whose present
address is 5500 East Second Street, 2nd Floor, Benicia, California 94510:

 

W I T N E S S E T H :

 

Landlord does
hereby demise and lease to Tenant, and Tenant hereby agrees to lease from
Landlord, the premises (hereinafter referred to as the “Premises”) containing
approximately 69,267 square feet of Rentable Area (as hereinafter defined) on
the 2nd and 3rd floors (which is all of the Rentable Area of such floors) of
the building to be situated on no less than 6.65 acres of real property (the
“Land”) located generally as shown on the preliminary site plan attached as
Exhibit “A” hereto and built in accordance with this Lease, with joint access
to and from Business Center Drive (to be extended by Landlord), in the Green
Valley Corporate Park in Fairfield, California (said building and the Land,
together with the improvements as designated by Landlord for use in conjunction
with said building, are hereinafter collectively referred to as the
“Building”).

1.     TERM

A.            The term of this Lease (hereinafter
referred to as the “Term”) shall be for ten (10) years commencing on October 1, 2002, subject to the
provisions contained in paragraph 2(b) (hereinafter referred to as the
“Commencement Date”), and ending on the last day of the month which is one
hundred twenty (120) full calendar months after the Commencement Date occurs
(hereinafter referred to as the “Termination Date”), unless sooner terminated
as provided herein.  Landlord and Tenant
shall execute a memorandum containing the exact Commencement Date and
Termination Date promptly after the Commencement Date.  The period consisting of twelve (12) full
calendar months following the Commencement Date and ending on the last day of
the twelfth month (plus, if the Commencement Date is a date other than the
first day of a calendar month, the initial partial calendar month) and each
period of twelve (12) full calendar months thereinafter, is herein called a
“Lease Year”.

B.            Landlord and Tenant acknowledge that
the Land is not yet a separate legal parcel under the provisions of the
Subdivision Map Act of the state of California or owned by Landlord.  Landlord herewith agrees to and shall use
commercially reasonable efforts to cause the Land to become a separate legal
parcel in compliance with the provisions of the Subdivision Map Act, containing
no less than 6.65 acres of land together with such access as is shown on
Exhibit A or otherwise as Tenant may reasonably approve, and to acquire the
Land; provided, however, that Landlord’s inability to comply with such
Subdivision Map Act parcel requirements or to acquire the Land by the date
which is ninety (90) days after the date of this Lease through use of
commercially reasonable efforts shall not be a default by Landlord or Tenant
under this Lease, but only a failed condition precedent, in which event Tenant
may, in Tenant’s sole and absolute discretion, terminate this Lease by written
notice to Landlord at any time prior to compliance with such requirements and
such acquisition by Landlord, upon which termination neither Landlord nor
Tenant shall have any further rights under this Lease.

C.            Tenant herewith agrees to and shall
use commercially reasonable efforts to obtain from First American Title
Insurance Company, at the expense of Tenant, an American Land  Title Association (ALTA) 1992 Extended
Policy of Title Insurance in the form and containing the provisions set forth
in the attached Pro Forma Policy marked Exhibit “J” hereto insuring Tenant’s
Leasehold rights under this Lease, an American Land Title Association (ALTA)
1992 Extended Policy of Title Insurance in the form and containing the provisions
set forth in the attached Pro Forma Policy marked Exhibit “K” hereto insuring
Tenant’s purchase option rights under this Lease, and an American Land Title
Association (ALTA) 1992 Extended Policy of Title Insurance in the form and
containing the provisions set forth in the attached Pro Forma Policy marked
Exhibit “L” hereto insuring Tenant’s Offer 
rights under this Lease (collectively referred to herein as “Tenant’s
Title Policies”); provided, however, that

 

 

Tenant’s
inability to obtain Tenant’s Title Policies by the date which is ten (10) days
after the conditions set forth in Section 1B are satisfied through use of
commercially reasonable efforts shall not be a default by Landlord or Tenant
under this Lease, but only a failed condition precedent, in which event Tenant
may, in Tenant’s sole and absolute discretion, terminate this Lease by written
notice to Landlord within five (5) days of such date, upon which termination
neither Landlord nor Tenant shall have any further rights under this Lease.

2.     POSSESSION

(a)   Landlord shall construct the Building to
“Base Building” condition in accordance with Outline Plans and Specifications
attached hereto as Exhibit “B.” 
Landlord shall cause final plans and specifications for the Building to
be prepared in accordance with the Outline Plans and Specifications and to
submit four (4) completed copies thereof to Tenant.  In the event the plans and specifications so submitted to Tenant
contain, in Tenant’s judgment exercised reasonably, deviations from the Outline
Plans and Specifications (“Deviations”), Tenant shall have the right, within
ten (10) business days after receipt thereof from Landlord (the “Approval
Period”), to give written notice of its disapproval of the Deviations
identified in such notice, in which event Landlord and Tenant shall promptly
and in good faith work to resolve any such disapproved matter to the mutual
satisfaction of each other.  Upon such
resolution and any revision of the plans and specifications required thereby,
or upon expiration of the Approval Period if no such notice of disapproval is
given within the Approval Period, Landlord and Tenant shall affix the signature
or initials of an authorized officer or employee of each of the respective
parties hereto on the final plans and specifications.  Such final plans and specifications shall be in lieu of and shall
replace Exhibit “B”.  The signature of
an authorized officer or employee shall be deemed conclusive evidence of the
approval indicated by such signature.

(b)   Possession of the Premises shall be tendered
to Tenant by Landlord on the date that Landlord has substantially completed its
express obligations hereunder and under the Work Letter attached hereto as
Exhibit “C” and made a part hereof to improve the Premises and the Building.  In the event such obligations are not
substantially completed by October 1,
2002, this Lease shall nevertheless continue in full force and effect,
but the Commencement Date shall be deferred until such obligations are
substantially completed resulting in a deferral of any Rent (as hereinafter
defined) due hereunder, and Landlord shall have no other liability whatsoever
on account hereof; provided, however, there shall be no deferral of the
Commencement Date if such obligations are not substantially completed because
of any Tenant Delay, as such term is defined in the Work Letter.  In addition, in the event Landlord has not
substantially completed its express obligations hereunder and under the Work
Letter to improve the Premises and the Building by the date which is calculated
by starting with December 31, 2002 and adding thereto all Tenant Delays and
delays of up to six (6) months for Force Majeure (as hereinafter defined),
Tenant shall have the right to terminate this Lease by delivery of written
notice to that effect to Landlord within five (5) days of such date and prior
to substantial completion.  Landlord’s
obligations shall not be deemed incomplete if the requirements for the issuance
of a certificate of occupancy with respect to the Premises are satisfied
(except for furniture installation and data center equipment and any other work
which is to be performed by Tenant) and only insubstantial details of
construction, decoration or mechanical adjustments remain to be done.  The reasonable determination of Landlord’s
architect for the Building shall be final and conclusive on Tenant as to
whether Landlord’s obligations are substantially completed. As used herein, the
term “Force Majeure” shall mean any of the following: (i) war, enemy action,
civil commotion, riots, or national emergency; (ii) Presidential order; (iii)
national defense preemption of necessary materials; (iv) strike or lockout; (v)
fire or other casualty (specifically including vandalism, theft, loss of or
damage to materials in transit or stored off-site); (vi) governmental or
municipal moratoria or restrictions; (vii) labor, material or energy shortages;
(viii) acts of God; (ix) extraordinary weather conditions not reasonably
anticipatable; (x) utility company failure to provide service; (xi) any other
reason, delay, cause, act or omission beyond Landlord’s reasonable control
other than Landlord’s lack of funds or inability to obtain financing for
reasons other than a default of Tenant. 
Landlord agrees to give Tenant notice of the cause and commencement time
of a Force Majeure delay promptly upon learning of the existence of a Force
Majeure condition and, when known, the duration of such Force Majeure delay.

(c)   If
Landlord’s obligations to improve the Premises and Building are substantially completed
prior to the Commencement Date and Landlord and Tenant agree, without in any
way being bound to so agree, Tenant may take possession of the Premises or any
part thereof prior to the Commencement Date. 
In such event, all of the covenants and conditions of this Lease shall
be binding upon the parties hereto with respect to such whole or

 

2

 

part of the Premises as if the Commencement Date had
been fixed as the date when Tenant took possession of such whole or part of the
Premises and Tenant shall pay Rent for the period of such occupancy prior to
the Commencement Date at the rate of both the annual Base Rent set forth in
Article 3 hereof and the Additional Rent set forth in Article 4 hereof prorated
for such period of occupancy and, if less than the whole Premises are occupied,
for the proportionate area of the total Premises so occupied.  Notwithstanding the foregoing, Rent shall
not be required for Tenant’s entry into the Premises pursuant to Section 8 of
the Work Letter.

3.     BASE
RENT

Tenant shall pay
to Landlord or Landlord’s agent in the office of the Building or to such other
person or place as Landlord may from time to time designate in writing, in coin
or currency which, at the time of payment, is legal tender for private or
public debts in the United States of America, base rent at the annual rates per
square foot of Rentable Area in the Premises (hereinafter referred to as “Base
Rent”) as follows:

	
  Lease Year

  	
   

  	
  Monthly
  Rate

  Per Square
  Foot

  	
   

  	
  Annual
  Rate

  Per Square
  Foot

  	
   

  
	
  First and Second Lease Years

  	
   

  	
  $1.27

  	
   

  	
  $15.24

  	
   

  
	
  Third and Fourth Lease Years

  	
   

  	
  $1.33

  	
   

  	
  $16.00

  	
   

  
	
  Fifth and Sixth Lease Years

  	
   

  	
  $1.40

  	
   

  	
  $16.80

  	
   

  
	
  Seventh and Eighth Lease Years

  	
   

  	
  $1.47

  	
   

  	
  $17.64

  	
   

  
	
  Ninth and Tenth Lease Years

  	
   

  	
  $1.54

  	
   

  	
  $18.52

  	
   

  

 

Such Base Rent shall be
due and payable in equal monthly installments of one-twelfth (1/12) of the
annual Base Rent for the applicable one-year period in advance on or before the
first day of each and every month during the Term, without any set-off or
deduction whatsoever, except that Tenant shall pay the first full monthly
installment at the time of  Tenant’s
execution of this Lease.  If the Term
commences other than on the first day of a month (resulting in a partial
calendar month which is included in the First Lease Year), Tenant shall pay
Base Rent for such partial month based on one-twelfth (1/12) of the annual Base
Rent set forth above for the First Lease Year and the number of days in such
partial calendar month.  The prorated
Base Rent (and Additional Rent) for the partial calendar month in which the
Term commences, if applicable, shall be paid on the Commencement Date.

4.     ADDITIONAL
RENT

In addition to
paying the Base Rent specified in Article 3 hereof, Tenant shall pay as
“Additional Rent” the amounts determined as hereinafter set forth.  The Base Rent and the Additional Rent are
sometimes herein collectively referred to as the “Rent”.  All amounts due under this Article as
Additional Rent shall be payable for the same periods and in the same manner,
time and place as the Base Rent. 
Without limitation on other obligations of Tenant which shall survive
the expiration of the Term, the obligations of Tenant to pay the Additional
Rent accrued during the Term pursuant to this Article 4 shall survive the
expiration of the Term.  For any partial
Calendar Year, Tenant shall be obligated to pay only a pro rata share of the
Additional Rent, based on the number of the days of the Term falling within
such Calendar Year.

A.                                   Definitions.  As used in this Article 4, the terms:

(i)            “Calendar Year” shall mean each
calendar year in which any part of the Term falls, through and including the
year in which the Term expires.

(ii)           “Tenant’s Proportionate Share” shall
mean the percentage calculated by dividing the rentable square feet of the
Premises by the rentable square feet of the Building.  For purposes of this Lease, “Rentable Area” shall be determined
by the Landlord in accordance with the BOMA “Standard Method for Measuring
Floor Area in Office Buildings,” approved June 7, 1996 by the American National
Standards Institute, Inc.

(iii)          “Taxes” shall mean all real estate
taxes and assessments, special or otherwise, levied or assessed upon or with
respect to the Building or portion thereof and ad valorem taxes for any
personal property used in connection therewith.  Should the State of California, or any political subdivision
thereof, or any other

 

3

 

governmental authority having jurisdiction over the
Building, (a) impose a tax, assessment, charge or fee, or increase a then
existing tax, assessment, charge or fee which Landlord shall be required to
pay, either by way of substitution for such real estate taxes and ad valorem
personal property taxes, or in addition to such real estate taxes and ad
valorem personal property taxes, or (b) impose an income or franchise tax or a
tax on rents in substitution for or as a supplement to a tax levied against the
Building and/or the personal property used in connection with the Building, all
such taxes, assessments, fees or charges (hereinafter defined as “in lieu
taxes”) shall be deemed to constitute Taxes hereunder.  “Taxes” shall also include all fees and
costs incurred by Landlord in seeking to obtain a reduction of or a limit on
the increase in any Taxes regardless of whether any reduction or limitation is
obtained.  Except as hereinabove
provided with regard to “in lieu taxes”, Taxes shall not include any
inheritance, estate, succession, transfer, gift, franchise, net income or
capital stock tax.  Tenant shall be
liable for all taxes levied against personal property and trade fixtures placed
by Tenant in the Premises.

(iv)          “Operating Expenses” shall mean all
expenses, costs and disbursements (other than Taxes) of every kind and nature
(determined for the applicable Calendar Year on an accrual basis) paid or
incurred by Landlord or Landlord’s beneficiaries in connection with the
ownership, management, operation, maintenance and repair of, and services
provided to, the Building, except the following:

(a)           Costs
of alterations of any tenant’s premises;

(b)           Principal
or interest payments on loans secured by mortgages or trust deeds on the
Building;

(c)           Costs
of capital improvements, except that Operating Expenses shall include (i) the
annual amortization (amortized over the useful life, but no less than five (5)
years) of costs, including the financing costs, if any, of any equipment,
device or capital improvement purchased or incurred by Landlord and projected
by Landlord to reduce a component cost included within Operating Expenses,  provided that the annual amortized cost of
such capital improvement to be included in the Operating Expenses shall not
exceed the greater of the projected savings therefrom as reasonably estimated
by a qualified independent third party based upon factual information, or the
actual annual reduction in Operating Expenses resulting therefrom, and (ii) the
cost of any capital improvements which are necessary to keep the Building in
compliance with all governmental rules and regulations enacted or adopted after
the Commencement Date;

(d)           Real
estate brokers’ leasing commissions;

(e)           Any
costs or expenses incurred by Landlord or on Landlord’s behalf resulting from
or in connection with the marketing or promotion of space in the Building or
the Building itself;

(f)            Property
management fees in excess of three percent (3%) of the “net” rents of the
Building;

(g)           Costs
incurred in connection with the initial construction and development of the
Building;

(h)           Costs
of correcting defects in the initial construction of the Building, except that
conditions resulting from ordinary wear and tear shall not be deemed defects
for this category;

(i)            Legal
fees or other professional or consulting fees in connection with the negotiation
of tenant leases;

(j)            The
cost of repairs or replacements incurred by reason of fire or other casualty or
condemnation to the extent that Landlord is compensated therefor through
proceeds of insurance or condemnation awards;

(k)           Wages
and benefits paid to officers or executives of Landlord above the grade of
building manager;

 

4

 

(l)            The
portion of wages and benefits otherwise includable in Operating Expenses to the
extent allocated to any other properties of Landlord;

(m)          Costs
of enforcing lease and occupancy agreements or evictions of tenants or
occupants;

(n)           Costs
of any service provided to tenants or other occupants of the Building for which
Landlord is reimbursed other than reimbursements for Operating Expenses;

(o)           Depreciation
of the Building or its equipment;

(p)           The
expenses of any special service provided to a tenant of the Building that is
not offered or available to the Tenant; and

(q)           Penalties,
interest and late fees resulting from late payments by Landlord which are the
fault of Landlord.

B.                                     Tax
Adjustment.

Tenant shall pay
to Landlord as Additional Rent, in addition to the Base Rent required by
Article 3 hereof, an amount (“Tax Adjustment Amount”) equal to Tenant’s
Proportionate Share of the combined total of Taxes incurred with respect to
each Calendar Year.  The Tax Adjustment
Amount with respect to each Calendar Year shall be paid in monthly installments
in an amount from time to time estimated by Landlord and communicated by written
notice to Tenant.  Landlord shall cause
to be kept books and records showing Taxes in accordance with an appropriate
system of accounts and accounting practices consistently maintained.  On or before April 1 following the close of
each Calendar Year, Landlord shall cause the amount of the Tax Adjustment
Amount for such Calendar Year to be computed and Landlord shall deliver to
Tenant a statement of such amount and the amount of all estimated installments
paid by Tenant for such Calendar Year. 
Tenant shall pay to Landlord any deficiency as shown by such statement
within thirty (30) days after receipt of such statement.  If the total of the estimated monthly
installments paid by Tenant for any Calendar Year exceeds the actual amount due
from Tenant for such Calendar Year, at Landlord’s option, such excess shall be
either credited against payments next due hereunder or refunded by Landlord,
provided Tenant is not then in default hereunder.  The amount of any refund of Taxes received by Landlord shall be
credited against Taxes for the year in which such refund is received.  All references to Taxes “for” a particular
year shall be deemed to refer to Taxes levied or assessed during such year
without regard to when such Taxes are paid or payable.  Delay in computation of the Tax Adjustment
Amount shall not be deemed a default hereunder or a waiver of Landlord’s right
to collect the Tax Adjustment Amount.

In determining the
amount of Taxes for the purposes of this paragraph, if less than 100 percent of
the Rentable Area of the Building shall have been occupied by tenants during
the year, Taxes shall be deemed for the purposes of this paragraph to be
increased to the amount of taxes that would normally be expected to be incurred
had occupancy been 100 percent.

C.                                     Operating
Expense Adjustment.

Tenant shall pay
to Landlord as Additional Rent, in addition to the Base Rent required by
Article 3 hereof, an amount (“Expense Adjustment Amount”) equal to Tenant’s
Proportionate Share of the combined total of Operating Expenses (determined on
an accrual basis) paid or incurred during each Calendar Year.  The Expense Adjustment Amount with respect
to each Calendar Year shall be paid in monthly installments in an amount from
time to time estimated by Landlord and communicated by written notice to
Tenant.  Landlord shall cause to be kept
books and records showing Operating Expenses in accordance with an appropriate
system of accounts and accounting practices consistently maintained.  On or before April 1 following the close of
each Calendar Year, Landlord shall cause the amount of the Expense Adjustment
Amount for such Calendar Year to be computed based upon the actual Operating
Expenses paid or incurred for such Calendar Year and Landlord shall deliver to
Tenant a statement of such amount and the amount of all estimated installments
paid by Tenant for such Calendar Year. 
Tenant shall pay to Landlord any deficiency as shown by such statement
within thirty (30) days after receipt of such statement.  This statement as to the amount of Operating
Expenses for such Calendar Year for the Building shall

 

5

 

constitute
a determination which is final and conclusive on Tenant.  If the total of the estimated monthly
installments paid by Tenant during any Calendar Year exceeds the actual amount
due from Tenant for such Calendar Year, at Landlord’s option, such excess shall
be either credited against payments next due hereunder or refunded by Landlord,
provided Tenant is not then in default hereunder.   Delay in computation of the Expense Adjustment Amount shall not
be deemed a default hereunder or a waiver of Landlord’s right to collect the
Expense Adjustment Amount.

In determining the
amount of Operating Expenses for the purposes of this paragraph, if less than
one hundred percent (100%) of the Rentable Area of the Building is occupied
during any calendar year, then the variable portion of Operating Expenses for
such period shall be deemed to be equal to the total of the variable portion of
Operating Expenses which would have been incurred by Landlord if one hundred
percent (100%) of the Rentable Area of the Building had been occupied for the
entirety of such calendar year with all tenants paying full rent, as contrasted
with free rent, half rent, or the like (“Gross-Up Provision”).  Notwithstanding the foregoing, Landlord
shall not recover as Operating Expenses more than one hundred percent of the
Operating Expenses actually paid or incurred by Landlord.

D.                                    Adjustment
for services Not Rendered  by Landlord.

Tenant
acknowledges that Landlord’s projection of the amount of Operating Expenses
stated in paragraph 4C hereof is based upon the assumption that Landlord will
be providing identical services to all tenants in the Building.  If this assumption is not in fact correct,
that is, if Landlord is not furnishing any particular work or service (the cost
of which, if performed by Landlord, would be included in Operating Expenses) to
a tenant who has undertaken to perform such work or service in lieu of the performance
thereof by Landlord, Operating Expenses shall be deemed for the purposes of
paragraph 4C to be increased by an amount equal to the additional Operating
Expenses which would reasonably have been incurred during such period by
Landlord if it had, at its own expense, furnished such work or service to such
tenant.

E.                                      Audit
of Operating Expenses.

Tenant or its
representative shall have the right, at Tenant’s sole expense, to examine
Landlord’s books and records showing Operating Expenses upon reasonable prior
notice and during normal business hours at any time within sixty (60) days
following the furnishing by the Landlord to the Tenant of Landlord’s statement
provided for in paragraph 4C.  Unless
Tenant  shall take written exception to
any item within ninety (90) days after the furnishing of the Landlord’s
statement containing such item, such Landlord’s statement shall be considered
as final and accepted by Tenant; provided, however, that Tenant reserves its
rights to review and object to expense items not included in Landlord’s
statement which are subsequently charged to Tenant for periods of the same
duration as hereinabove provided following Tenant’s learning of such additional
expense items.  If Tenant takes exception
to any item in Landlord’s statement within the applicable time period and if
Landlord and Tenant are unable to agree on the correctness of said item, then
either party may refer the decision of said issue to a reputable firm of
independent certified public accountants selected by Tenant from a list of not
less than three (3) firms designated by Landlord (which list shall be provided
promptly following Tenant’s request therefor) and the decision of said
accountants shall be conclusively binding on the parties.  Pending resolution of any dispute, however,
Tenant shall make payments in accordance with the information contained in
Landlord’s statement.  Tenant shall pay
all fees and expenses of such audit unless the audit discloses that Operating
Expenses were overstated by Landlord by five percent (5%) or more, in which
case Landlord shall pay all reasonable fees and expenses of such audit.

5.                                      USE OF PREMISES

A.            Permitted
Use.  Tenant shall use and occupy the
Premises for general office uses consistent with class A office buildings.

B.            Compliance
with Laws.  Tenant shall not use or
permit the use of any part of the Premises for any purpose prohibited by
law.  Subject to Landlord’s obligations
under this Lease and the Work Letter to construct the Building and initial
tenant improvements, Tenant shall, at its sole expense, comply with and conform
to all of the requirements of all governmental authorities having jurisdiction
over the Building which relate in any way to the condition, use and occupancy
of the Premises throughout the entire Term of this Lease.

 

6

 

C.            Americans
With Disabilities Act.  Landlord and
Tenant hereby agree that notwithstanding anything contained in this Lease to
the contrary, Tenant shall be responsible for the cost of ADA compliance only
if a modification is required because of: (a) Tenant’s particular use of the
Premises; (b) Tenant’s improvements located in the Premises; or (c) any
alterations located in the Premises at the request of Tenant.  Landlord shall be responsible for the cost
of all other ADA compliance at Landlord’s sole cost and expense.

6.     CONDITION
OF PREMISES

The Tenant’s
taking possession of any portion of the Premises shall be conclusive evidence
that such portion of the Premises was in good order and satisfactory condition
when the Tenant took possession, except as to latent defects and as to items of
damage caused by Tenant or its agents, independent contractors or
suppliers.  For purposes of this Article
6, Tenant’s entry into the Premises prior to the Commencement Date for the sole
purpose of constructing tenant improvements shall not be deemed to be “taking
possession of any portion of the Premises” by Tenant where such entry is
otherwise permitted under this Lease. 
No promise of the Landlord to alter, remodel or improve the Premises or
the Building and no representation by Landlord or its agents respecting the
condition of the Premises or the Building have been made to Tenant or relied
upon by Tenant other than as may be contained in the Work Letter, this Lease or
in any written amendment hereto signed by Landlord and Tenant.

7.     SERVICES

A.                                   List
of Services.

Landlord shall
provide the following services on all days during the Term, except Sundays and
holidays, unless otherwise stated, the cost of which may be included in
Operating Expenses except as expressly provided to the contrary herein:

(i)            Heating and air conditioning when
necessary for normal comfort in the Premises, from Monday through Friday during
the period from 8 a.m. to 6 p.m. and 8 a.m. to 1 p.m. on Saturdays.  Tenant will pay for all heating and air
conditioning requested and furnished prior to or following such hours at rates
to be established from time to time by Landlord.  Landlord’s obligations with respect to heating and air
conditioning shall be subject to all governmental rules, regulations and
guidelines applicable thereto.  When
machines or equipment are used in the Premises that generate heat or in any way
affect the temperature otherwise maintained by the air conditioning system, or
when the occupancy of the Premises or electrical load exceeds the standards set
from time to time by Building management, Landlord reserves the right to
install or to require Tenant to install supplementary air conditioning and/or
ventilation units in the Premises. 
Tenant shall bear all costs and expenses related to the installation,
maintenance and operation of such units.

(ii)           Adequate electrical wiring and
facilities for standard building lighting fixtures provided by Landlord and for
Tenant’s incidental uses.  Tenant shall
bear the cost of replacement of bulbs and ballasts for lighting fixtures.  In respect of such incidental uses, adequate
electrical wiring and facilities will be furnished in the Premises by Landlord,
provided that (a) the connected electrical load of the incidental use equipment
does not exceed an average of three (3) watts per square foot of the premises;
(b) the electricity so furnished for incidental uses will be a nominal 120
volts and no electrical circuit for the supply of such incidental use will have
a current capacity exceeding 15 amperes; and (c) such electricity will be used
only for equipment and accessories normal to office usage.  If Tenant’s requirements for electricity for
incidental uses are in excess of those set forth in the preceding sentence, the
Landlord reserves the right to require Tenant to install the conduit wiring and
other equipment necessary to supply electricity for such excess incidental use
requirements at the Tenant’s expense by arrangement with the approved local
utility, if applicable.

(iii)          Water from the regular Building
outlets for drinking, lavatory and toilet purposes.

(iv)          Janitor services Monday through Friday
in and about the Premises, comparable to the standard janitor service
customarily furnished by other similar office buildings or office complexes in
the Concord/Walnut Creek area.

 

7

 

(v)           Window washing of all inside windows
in the Premises at intervals to be determined by Landlord, but not less than
three (3) times per calendar year.

(vi)          Window washing of all outside windows
in the Premises, weather permitting, at intervals to be determined by Landlord,
but not less than four (4) times per calendar year.

(vii)         Adequate operatorless passenger
elevator service at all times.

(viii)        Freight elevator service subject to
scheduling by Landlord.

B.                                     Interruption
of Services.

Neither Landlord
nor Landlord’s beneficiary (if applicable), nor any company, firm or individual
operating, maintaining, managing or supervising the plant or facilities
furnishing any of the services described in the paragraph immediately
preceding, nor any of their respective directors, officers, shareholders,
agents or employees shall be liable to Tenant, or any of Tenant’s employees,
agents, customers, or invitees or anyone claiming through or under Tenant, for
any damages, injuries, losses, expenses, claims or causes of action, because of
any interruption or discontinuance at any time for any reason in the furnishing
of any of the services described in the paragraph immediately preceding; nor
shall any interruption or discontinuance be deemed an eviction or disturbance
of Tenant’s use or possession of the Premises or any part thereof; nor shall
any such interruption or discontinuance relieve Tenant from full performance of
Tenant’s obligations under this Lease. 
Notwithstanding the foregoing, if any interruption or discontinuance of
such services renders the Premises untenantable for more than five (5)
consecutive business days and such interruption or discontinuance is not caused
by fire or casualty or the act or omission of Tenant, its employees or agents
or any other event beyond the control of Landlord, and Tenant is not using the
untenantable portion, Rent shall abate on a per diem basis proportionately to
the portion of the Premises rendered untenantable and unused by Tenant from the
sixth such day until said portion of the Premises is again rendered tenantable
or is used by Tenant.

C.                                     Charges
for Services.

Charges for any
services for which Tenant is required to pay from time to time hereunder,
including but not limited to light bulb or ballast changes, shall be due and
payable at the same time as the installment of Rent with which they are billed,
or if billed separately, shall be due and payable within ten (10) days after
such billing.  If Tenant shall fail to
make payment for any such services, Landlord may, with notice to Tenant,
discontinue any or all of such services and such discontinuance shall not be
deemed to constitute an eviction or disturbance of the Tenant’s use and
possession of Premises or relieve Tenant from paying Rent or performing any of
its other obligations under this Lease.

D.                                    Telecommunications.

Tenant shall be
responsible for arranging for its own telecommunications services at the
Premises.  All telegraph, telephone, and
electric connections which Tenant may desire and the location of all wires and
the work in connection therewith shall be first approved by Landlord in writing
before the same are installed, which approval shall not be unreasonably
delayed. Tenant shall be responsible for obtaining all governmental approvals
and shall pay all costs incurred in connection with the installation of
telephone cables and related wiring from the point of presence on the first
floor, through conduit sleeves provided by Landlord to the telephone closets on
each floor, then to and in the Premises, including, without limitation, any
hook-up, access and maintenance fees related to the installation of such wires
and cables in the Premises and the commencement of services therein, and the
maintenance thereafter of such wire and cables, and all installation, hook-up
or maintenance costs incurred by Landlord in connection with telephone cables
and related wiring in the Premises which are allocable to Tenant.  If Tenant fails to maintain all such
telephone cables and related wiring, or if such cables or wiring affects or
interferes with the operation or maintenance of any other telephone cables or
related wiring in the Building, Tenant shall immediately following notice take
such action as is required to eliminate such interference and, in the event
Tenant fails to do so, Landlord or any vendor hired by Landlord may perform
such repairs, restorations or alterations as Landlord deems necessary in order
to eliminate any such interference (and Landlord may recover from Tenant all of

 

8

 

Landlord’s
costs in connection therewith) and, if necessary, may enter into and upon the
Premises forthwith to perform such repairs, restorations or alterations.  Upon expiration of the Term, Tenant shall
remove, at its cost and expense, all telephone cables and related wiring
installed by or for Tenant which Landlord requests Tenant to remove.  Tenant agrees that neither Landlord nor any
of its agents or employees shall be liable, by abatement of Rent or otherwise,
to Tenant, or any of Tenant’s employees, agents, customers or invitees or
anyone claiming through, by or under Tenant, for any damages, injuries, losses,
expenses, claims or causes of action because of any interruption, diminution,
delay or discontinuance at any time for any reason in the furnishing of any
telecommunications service to the Premises (including, without limitation, any
act or omission of any tenant or occupant of the Building or any other person
with respect to the Building wiring) and no such interruption, diminution,
delay or discontinuance shall constitute an eviction or disturbance of Tenant’s
use and possession of the Premises or any part thereof.

8.     REPAIRS

A.            Subject
to paragraph 8B below, Tenant will, at Tenant’s own expense, keep the Premises
in good order, repair and condition, at all times during the Term, and Tenant
shall promptly and adequately repair all damage to the Premises and replace or
repair all damaged or broken fixtures and appurtenances and such replacement or
repair shall be under the supervision and subject to the approval of the
Landlord and within a reasonable period of time specified by the Landlord.  If the Tenant does not do so, Landlord may,
but need not, make such repairs and replacements, and Tenant shall pay Landlord
forthwith, upon being billed for same by Landlord, the cost thereof, including
10% of the cost thereof plus all overhead, general conditions, fees and other
costs or expenses arising from Landlord’s involvement with such repairs and
replacements.  Landlord may, but shall
not be required to, enter the Premises at all reasonable times to make such
repairs, alterations, improvements and additions to the Premises or to the
Building or to any equipment located in the Building as Landlord desires or
deems necessary or as Landlord may be required to do by governmental authority
or court order or decree.

B.            Landlord
shall, at Landlord’s sole cost and expense (which costs and expenses may be
included in Operating Expenses subject to the exclusions set forth in paragraph
4A(iv) hereof), maintain the exterior (including, without limitation, the roof
and windows), all common areas and all structural elements of the Building and
the basic building systems (including the HVAC, electrical, plumbing,
elevators, fire and life support systems) in good order, repair and
condition.  As a material inducement to
Landlord entering into this Lease, Tenant waives and releases its right to make
repairs at Landlord’s expense under Section 1942 of the California Civil Code
or under any other law, statute or ordinance now or hereafter in effect, and
Tenant waives and releases the right to terminate this Lease under Section
1932(1) of the California Civil Code or any similar or successor statute.

9.     ADDITIONS
AND ALTERATIONS

Tenant shall not,
without the prior written consent of Landlord, make any alterations,
improvements or additions to the Premises. 
Landlord’s refusal to give said consent shall be conclusive.  If Landlord consents to said alterations,
improvements or additions, it may impose such conditions with respect thereto
as Landlord deems appropriate, including, without limitation, requiring Tenant
to furnish Landlord with security for the payment of all costs to be incurred
in connection with such work, insurance against liabilities which may arise out
of such work, and plans and specifications plus permits necessary for such
work.  The work necessary to make any
alterations, improvements or additions to the Premises shall be done at
Tenant’s expense by employees of or contractors hired by Landlord, except to
the extent Landlord gives its prior written consent to Tenant’s hiring
contractors, which consent shall not be unreasonably withheld.  Tenant shall promptly pay to Landlord’s or
to Tenant’s contractors, as the case may be, when due, the cost of all such
work and of all decorating required by reason thereof.  Tenant shall also pay to Landlord actual
costs of such work including such costs sufficient to reimburse Landlord for
overhead, general conditions, fees (including legal and other professional
fees) and all other costs and expenses arising from Landlord’s involvement with
such work, and, if Landlord acts as General Contractor or Subcontractor for all
or any portion of the work, in addition to the foregoing, Landlord shall be
entitled to ten percent (10%) of the cost of such work performed by
Landlord.  Upon completion of such work,
Tenant shall deliver to Landlord, if payment is made directly to contractors,
evidence of payment, contractors’ affidavits and full and final waivers of all
liens for labor, services or materials. 
Tenant shall defend and hold Landlord harmless from all costs, damages,
liens and expenses related to such work other than work performed by Landlord,
if any.  All work done by Tenant or its
contractors pursuant to Article 8 or 9 shall be done in a first-class
workmanlike manner using only good grades of materials and

 

9

 

shall
comply with all insurance requirements and all applicable laws and ordinances
and rules and regulations of governmental departments or agencies.

All alterations,
improvements and additions to the Premises, whether temporary or permanent in
character, made or paid for by Landlord or Tenant, shall, without compensation
to Tenant, become Landlord’s property at the termination of this Lease by lapse
of time or otherwise and shall be relinquished to Landlord in good condition,
ordinary wear excepted, unless Landlord requests their removal (in which case
Tenant shall remove the same as provided in Article 16.)

10.  COVENANT
AGAINST LIENS

Tenant has no
authority or power to cause or permit any lien or encumbrance of any kind
whatsoever, whether created by act of Tenant, operation of law or otherwise, to
attach to or be placed upon Landlord’s title or interest in the Building or
Premises, and any and all liens and encumbrances created by Tenant shall attach
to Tenant’s interest only.  Tenant
covenants and agrees not to suffer or permit any lien or mechanics or material
men or others to be placed against the Building or Premises with respect to
work or services claimed to have been performed for or materials claimed to
have been furnished to Tenant or the Premises, and , in case of any such lien
attaching, Tenant covenants and agrees to cause it to be released and removed
of record (which may be accomplished by the purchase of a lien release bond) at
Tenant’s sole expense within thirty (30) days of Tenant becoming aware of the
existence of such lien.

In the event that
such lien is not released and removed within such thirty (30) day period,
Landlord, at its sole option, may take all action necessary to release and
remove such lien (without any duty to investigate the validity thereof) and
Tenant shall promptly, upon notice, reimburse Landlord for all sums, costs and
expenses (including reasonable attorneys’ fees) incurred by Landlord in
connection with such lien.

11.  INSURANCE
AND WAIVER OF CLAIMS-INDEMNIFICATION

Landlord shall
keep the Building insured for the benefit of Landlord in an amount equivalent
to the full replacement value thereof (excluding foundation, grading and
excavation costs) against:

(a)           loss
or damage by fire and “all risk” perils, including theft;

(b)           such
other risk or risks of a similar or dissimilar nature as are now, or may in the
future be, customarily covered with respect to buildings and improvements
similar in construction, general location, use, occupancy and design to the
Building including, but without limiting the generality of the foregoing,
windstorms, hail, explosion, vandalism, malicious mischief, civil commotion,
and such other coverage as Landlord may deem appropriate or necessary
including, but not limited to, boiler and machinery, difference in condition
and rent loss insurance provided that such additional coverage is obtainable
and provided further that such additional coverage is such as is customarily
carried with respect to buildings and improvements similar in construction,
general location, use, occupancy and design to the Building.

Insurance premiums
paid for such coverage shall be a portion of the “Operating Expenses” described
in Article 4 hereof.  These insurance
provisions shall in no way limit or modify any of the obligations of Tenant
under any provision of this Lease. 
Landlord agrees that such policy or policies of insurance shall contain
a waiver of subrogation clause as to Tenant, Tenant’s agents and employees,
and, except as provided in paragraph 16 hereof and in paragraphs (w) and (x) of
the Rules and Regulations from time to time in effect, Landlord waives,
releases and discharges Tenant, Tenant’s agents and employees, from all claims
or demands whatsoever which Landlord may have or acquire arising out of damage
to or destruction of the Building or Landlord’s business therein occasioned by
fire or other cause, to the extent such loss or damage is covered by valid and
collectible insurance policies or would have been recoverable under any
insurance policy required to be carried hereunder.  Notwithstanding the foregoing, (i) nothing herein shall release
Tenant from damage to the building caused by Tenant, its agents or employees or
contractors in connection with moving Tenant’s property into or out of the
Building and (ii) Tenant shall be obligated to pay the Rent called for
hereunder in the event of damage to or destruction of the Building occasioned
by the negligence or fault of Tenant, its agents or employees.

 

10

 

Tenant shall keep
all of its machinery, equipment, furniture, fixtures, personal property
(including also property under the care, custody, or control of Tenant) and
business interests which may be located in, upon, or about the Premises insured
for the benefit of Tenant in an amount equivalent to the full replacement value
or insurable value thereof against:

(a)           loss
or damage by fire and “all risk” perils, including theft;

(b)           such
other risk or risks of a similar or dissimilar nature as are now, or may in the
future be, customarily covered with respect to a tenant’s machinery, equipment,
furniture, fixtures, personal property, including but not limited to Tenant’s
improvements to the Premises, and business located in a building, similar in
construction, general location, use, occupancy and design to the Building,
including, but without limiting the generality of the foregoing, windstorms,
hail, explosions, vandalism, theft, malicious mischief, civil commotion, and
such other coverage as Tenant may deem appropriate or necessary.

Tenant agrees that
such policy or policies of insurance shall contain a waiver of subrogation
clause to Landlord, the Building manager and their respective directors,
officers, shareholders, agents, employees and Tenant waives, releases and
discharges Landlord, the Building manager and their respective directors,
officers, shareholders, agents and employees from all claims or demands
whatsoever which Tenant may have or acquire arising out of damage to or
destruction of the machinery, equipment, furniture, fixtures, personal property
and business of Tenant occasioned by fire or other cause, to the extent such
loss or damage is covered by valid and collectible insurance policies or would
have been recoverable under any insurance policy required to be carried
hereunder or is within the deductible amount of any such insurance policy.

Landlord shall, as
a portion of the Operating Expenses defined in Article 4, maintain, for its
benefit and the benefit of the Building manager, general public liability
insurance against claims for personal injury, death or property  damage occurring upon, in or about the
Building, such as insurance to afford protection to Landlord and the Building
manager.

Tenant shall, at Tenant’s
sole cost and expense, for the benefit of Landlord, the Building manager and
Tenant, maintain comprehensive commercial general liability with broad
liability endorsement insurance against claims for personal injury, death or
property damage occurring upon, in or about the Premises.  Such insurance shall afford protection to
Landlord, its managing agent and Tenant to the limit of not less than  Three Million and 00/100 Dollars
($3,000,000.00) per occurrence, Three Million and 00/100 Dollars ($3,000,000.00)
aggregate, combined single limit bodily injury and property damage.  Such policies of insurance shall be written
in companies reasonably satisfactory to Landlord, naming Landlord, Landlord’s
directors, officers, shareholders, agents and employees as additional insureds
thereunder, and such policies, or a memorandum or certificate of such
insurance, shall, prior to Tenant taking possession of the Premises, be
delivered to Landlord endorsed “Premium Paid” by the company or agency issuing
the same or accompanied by other evidence satisfactory to Landlord that the
premium thereon has been paid.  At such
time as insurance limits required of tenants in office buildings in the area in
which the Building is located are generally increased to greater amounts, Landlord
shall have the right to require such greater limits as may then be customarily
required of similarly situated tenants in the Concord/Walnut Creek area.  Tenant agrees to include in such policy the
contractual liability coverage insuring Tenant’s indemnification obligations
provided for herein.  Any such coverage
shall be deemed primary to any liability coverage secured by Landlord.

Subject to
Landlord’s express waivers under this Article 11, Tenant agrees to indemnify
and save Landlord and Landlord’s directors, officers, shareholders, agents and
employees harmless against and from any and all claims by or on behalf of any
person or persons, firm or firms, corporation or corporations, arising from any
breach or default on the part of Tenant in the performance of any covenant or
agreement on the part of Tenant to be performed, pursuant to the terms of this
Lease, or arising from the use of the Premises or any act or negligence on the
part of Tenant or its agents, contractors, servants, employees or licensees, or
arising from any accident, injury or damage to the extent caused by Tenant, its
agents, and employees to any person, firm or corporation occurring during the
Term of this Lease or any renewal thereof, in or about the Premises and
Building, and from and against all costs, reasonable counsel fees, expenses and
liabilities incurred in or about any such claim or action or proceeding brought
thereon; and in case any action or proceeding 
be brought against Landlord, and Landlord’s directors, officers,
shareholders, agents and employees by reason of any such claim, Tenant, upon
notice from Landlord, covenants to resist or defend such action or proceeding
by counsel reasonably satisfactory to Landlord.

 

11

 

Tenant agrees, to
the extent not expressly prohibited by law, that Landlord and Landlord’s
directors, officers, shareholders, agents, employees and servants shall not be
liable, and Tenant waives all claims for damage to property and business
sustained during the Term of this Lease by Tenant occurring in or about the
Building, resulting directly or indirectly from any existing or future
condition, defect, matter or thing in the Premises, the Building, or any part
thereof, or from equipment or appurtenances becoming out of repair or from
accident, or from any occurrence or act or omission of Landlord and Landlord’s
directors, officers, shareholders, agents, employees or servants, or any tenant
or occupant of the Building or any other person.  This paragraph shall apply especially, but not exclusively, to
damage caused as aforesaid or by the flooding of basements or other subsurface
areas, or by refrigerators, sprinkling devices, air conditioning apparatus,
water, snow, frost, steam, excessive heat or cold, falling plaster, broken
glass, sewage, gas, odors or noise, or the bursting or leaking of pipes or
plumbing fixtures, and shall apply equally, whether any such damage results
from the act or omission of other tenants or occupants in the Building or any
other persons, and whether such damage be caused by or result from any of the
aforesaid, or shall be caused by or result from other circumstances of a
similar or dissimilar nature. 
Notwithstanding the foregoing, Tenant shall not be required to indemnify
Landlord for, and does not waive, claims to the extent caused by the negligence
or willful misconduct of Landlord, its agents or employees.

Tenant shall
conduct its operations in, on and about the Premises in compliance with all
applicable laws and ordinances, all orders and decrees of court and all
requirements of other governmental authorities, and shall not, directly or
indirectly, make any use of the Premises which may thereby  be prohibited or be dangerous to person or
property or which may jeopardize any insurance coverage, or may increase the
cost of insurance or require additional insurance coverage.  If by reason of the failure of Tenant to
comply with the provisions of this Article 11, any insurance coverage is jeopardized
or insurance premiums are increased, Landlord shall have the option either to
terminate this Lease or to require Tenant to make immediate payment of the
increased insurance premium.

12.  FIRE
OR CASUALTY

Article 8 hereof
not withstanding, if the Premises or the Building (including machinery or
equipment used in its operation) shall be damaged by fire or other casualty and
if such damage does not render all or a substantial portion of the Premises or
the building untenantable, then Landlord shall repair and restore the same with
reasonable promptness, subject to reasonable delays for insurance adjustments
and delays caused by matters beyond Landlord’s reasonable control but Landlord
shall not be obligated to expend therefor an amount in excess of the proceeds
of insurance recovered with request thereto. 
If any such damage renders all or a substantial portion of the Premises
or the Building untenantable, Landlord shall, within sixty (60) days of such
damage or destruction, deliver to Tenant an estimate of the duration of the
period in which the Premises will be untenantable, as reasonably determined by
Landlord.  If such estimated period
shall be for more than two hundred seventy (270) days from the date of such
damage, then Landlord, or Tenant if such damage does not result from Tenant’s
fault or neglect, shall have the right to terminate this Lease (with
appropriate prorations of Rent being made for Tenant’s possession subsequent to
the date of such damage of those tenantable portions of the Premises) upon
giving written notice to the other within fifteen (15) days after the delivery
to Tenant of Landlord’s repair estimate. 
Unless this Lease is terminated as provided in the preceding sentence
and so long as such damage does not result from Tenant’s fault or neglect,
Landlord shall proceed with reasonable promptness to repair and restore the
Premises, subject to reasonable delays for insurance adjustments and delays
caused by matters beyond Landlord’s reasonable control.  Landlord shall have no liability to Tenant,
and Tenant shall not be entitled to terminate this Lease by virtue of any
delays in completion of such repairs and restoration.  Rent, however, shall abate on those portions of the Premises as
are, from time to time, untenantable as a result of such damage (except fires
or casualties resulting from Tenant’s fault or neglect).

Notwithstanding
anything to the contrary herein set forth, Landlord shall have no duty pursuant
to this Article 12 to repair or restore any portion of the alterations,
additions or improvements in the Premises or the decoration thereto except to
the extent that such alterations, additions, improvements and decoration were
provided by Landlord, at Landlord’s cost, at the beginning of the Term.  If Tenant wants any other additional repairs
or restoration and if Landlord consents thereto (which consent shall not be
required for replacing improvements which Tenant placed on the Premises with
Landlord’s prior consent), the same shall be done at Tenant’s expense subject
to all of the provisions of Articles 8 and 9 hereof.

The provisions of
this Lease, including this Article 12, constitute an express agreement between
Landlord and Tenant with respect to any and all damage to, or destruction of,
all or any part of the Premises, the Building or

 

12

 

any
other portion of the Project by fire or other casualty and no statute or
regulation which is inconsistent with this Article 12, now or hereafter in
effect, including without limitation. Section 1932(2) and 1933(4) of the California
Civil Code, shall have any application to this Lease with respect to any damage
or destruction to all or any part of the Premises or the Building.

13.  NONWAIVER

No waiver of any
provision of this Lease shall be implied by any failure of Landlord to enforce
any remedy on account of the violation of such provision, even if such
violation be continued or repeated subsequently, and no express waiver shall
affect any provision other than the one specified in such waiver and that one
only for the time and in the manner specifically stated.  No receipt of moneys by Landlord from Tenant
after the termination of this Lease shall in any way alter the length of the
Term or of Tenant’s right of possession hereunder or after the giving of any
notice shall reinstate, continue or extend the Term or affect any notice given
Tenant prior to the receipt of such moneys, it being agreed that after the
service of notice or the commencement of a suit or after final judgment for
possession of the Premises, Landlord may receive and collect any Rent due, and
the payment of said Rent shall not waive or affect said notice, suit or
judgment.

14.  CONDEMNATION

If the whole of or
any substantial part of the Premises or common areas of the Building (which
includes parking areas) is taken by any public authority under the power of
eminent domain, or taken in any manner for any public or quasi-public use, so
as to render (in Landlord’s reasonable judgment) the remaining portion of the
Premises unsuitable for the purposes intended hereunder, then the Term of this
Lease shall cease as of the day possession shall be taken by such public
authority and Landlord shall make a pro rata refund of any prepaid Rent.  All damages awarded for such taking under
the power of eminent domain or any like proceedings shall belong to and be the
property of Landlord, and Tenant hereby assigns to Landlord its interest, if
any, in said award.  In the event that
fifty percent (50%) or more of the Building area or appurtenances or fifty
percent (50%) or more of the value of the Building is taken by public authority
under the power of eminent domain, then, at Landlord’s option, by written
notice to Tenant mailed within sixty (60) days from the date possession shall
be taken by such public authority, Landlord may terminate this Lease effective
upon a date within ninety (90) days from the date of such notice to
Tenant.  Further, if the whole or any
part of the Premises is taken by public authority under the power of eminent
domain, or taken in any manner for any public or quasi-public use, so as to
render the remaining portion of the Premises unsuitable, in Tenant’s reasonable
opinion, for the purposes intended hereunder, upon delivery of possession to
the condemning authority pursuant to the proceedings, Tenant may, at its
option, terminate this Lease as to the remainder of the Premises by written
notice to Landlord.  Such notice is to
be given to Landlord within thirty (30) days after Tenant receives notice of
the taking.  Tenant shall not have the
right to terminate this Lease pursuant to the proceeding sentence unless (i)
the business of Tenant conducted in the portion of the Premises taken cannot,
in Tenant’s reasonable judgment, be carried on with substantially the same
utility and efficiency in the remainder of the Premises (or any substitute
space, parking or other rights securable by Landlord pursuant to clause (ii)
hereof); and (ii) Tenant cannot secure substantially similar (in Tenant’s
reasonable judgment) alternate space, parking or other rights upon the same terms
and conditions as set forth in this Lease (including rental) from Landlord in
the Building.  Any notice of termination
shall specify the date, no more than sixty (60) days after the giving of such
notice as the date, for such termination.

Anything in this
Article 14 to the contrary notwithstanding, Tenant shall have the right to
prove in any condemnation proceedings and to receive any separate award which
may be made for damages to or condemnation of Tenant’s moveable trade fixtures
and equipment and for moving expenses; provided however, Tenant shall in no
event have any right to receive any award for its interest in this Lease or for
loss of leasehold.  Anything in this
Article 14 to the contrary notwithstanding, in the event of a partial
condemnation of the Building or Premises and this Lease is not terminated,
Landlord shall, at its sole cost and expense, restore the Building and Premises
to a complete architectural unit and the Base Rent provided for herein during
the period from and after the date of delivery of possession pursuant to such
proceeding to the termination of this Lease shall be reduced to a sum equal to
the product of the Base Rent provided for herein multiplied by a fraction, the
numerator of which is the fair market rent of the Premises after such taking
and after the same has been restored to a complete architectural unit, and the
denominator of which is the fair market rent of the Premises prior to such
taking.

 

13

15.  ASSIGNMENT
AND SUBLETTING

Tenant shall not,
without the prior written consent of Landlord, which consent shall not be
unreasonably withheld in the case of an assignment or subletting (but which
otherwise may be withheld arbitrarily): 
(a) assign, convey or mortgage this Lease or any interest hereunder; (b)
suffer to occur or permit to exist any assignment of this Lease or any lien
upon Tenant’s interest herein, involuntarily or by operation of law; (c) sublet
the Premises or any portion thereof; or (d) permit the use of the Premises by
any parties other than Tenant and Tenant’s employees.  Any such action on the part of Tenant shall be void and of no
effect.  Notwithstanding the foregoing,
Tenant may, upon prior notice to Landlord, (i) sublet up to 5,000 square feet
of the Premises to the State of California, Department of Motor Vehicles for
providing automobile title transfer services to Tenant only, and (ii) sublet
all or a portion of the Premises or assign this Lease to an Affiliate of
Tenant.  For purposes hereof, an
“Affiliate” shall mean (x) an entity which controls, is controlled by or is
under common control with Tenant, or any successor by merger or consolidation
with Tenant provided that the net worth and total assets of the successor
corporation is not less than the net worth and the total assets, respectively,
of Tenant immediately prior to such merger or consolidation or (y) any entity
which purchases all or substantially all of the assets of Tenant, provided that
the net worth of such purchasing entity is not less than the net worth of
Tenant immediately prior to such purchase. 
A subletting or assignment permitted under the preceding two (2)
sentences shall be referred to herein as a “Permitted Transfer”.  Landlord’s consent to any assignment,
subletting or transfer, or the occurrence of any assignment, subletting or
transfer which does not require Landlord’s consent, shall not release the
original Tenant from any covenant or obligation under this Lease.  Further, the consent of Landlord to any
assignment, subletting or transfer shall not constitute a waiver of the right
of Landlord to withhold its consent to any further assignment, subletting or
transfer. Landlord may condition its consent upon execution by the subtenant or
assignee of an instrument confirming such restrictions on further subleasing or
assignment and joining in the waivers and indemnities made by Tenant hereunder.

If Tenant desires
the consent of Landlord to an assignment or subletting, Tenant shall submit to
Landlord at least thirty (30) days prior to the proposed effective date of the
assignment or sublease a written notice which includes:

(a)           all
documentation then available related to the proposed sublease or assignment
(copies of final executed documentation to be supplied on or before the
effective date in form identical in all substantive respects to that which is
consented to by Landlord); and

(b)           sufficient information to permit
Landlord to determine the identity, character and financial condition of the
proposed subtenant or assignee and the intended use of the Premises or portion
thereof by such proposed subtenant or assignee;

Landlord may
withhold its consent to such assignment or subletting for reasons which
include, but are not limited to, the following:

(a)           in
the reasonable judgment of Landlord the subtenant or assignee is of a character
or engaged in a business which is not in keeping with the standards maintained
by Landlord in the Building;

(b)           in the reasonable judgment of
Landlord the subtenant or assignee does not have a financial condition
sufficient to satisfy its obligations with respect to its occupancy of the
Premises or portion thereof;

(c)           in the reasonable judgment of
Landlord the purpose for which the subtenant or assignee intends to use the
subleased space is in violation of the terms of this Lease or the lease of any
other tenant in the Building which prohibits such use; or

(d)           the proposed subtenant or assignee is
an agency or instrumentality of any federal, state or local government or
governmental authority.

 

14

 

Landlord shall
have the right, but not the duty, to terminate this Lease as to that portion of
the Premises which Tenant seeks to assign, sublet or convey, whether by
requesting the consent of Landlord thereto or otherwise, if after such
assignment, subletting or conveyance Tenant will occupy less than ten percent
(10%) of the Rentable Area of the initial Premises.  Landlord may exercise such right to terminate by giving written
notice to Tenant at any time prior to the written consent of Landlord to such
assignment or sublease.  In the event
Landlord exercises such right to terminate, Landlord shall be entitled to
recover possession of such portion of the Premises on the later of (a) the proposed
date for possession of the Premises or portion thereof by such assignee or
subtenant or (b) ninety (90) days after the date of Landlord’s notice of
termination.  Notwithstanding the
foregoing, if Landlord exercises its election to terminate the Lease under this
paragraph with respect to such portion of the Premises, Tenant shall have the
right, upon written notice given to Landlord within five (5) days after
receiving Landlord’s notice of termination, to withdraw its request for such
subletting or assignment, in which event Landlord’s election to terminate shall
be revoked and this Lease shall remain in full force and effect.

In the event
Landlord fails to exercise its right of termination as aforesaid in the
preceding paragraph and Landlord consents to any assignment or sublease of any
portion of the Premises, as a condition of Landlord’s consent, if Landlord so
elects to consent, Tenant shall pay to Landlord fifty percent (50%) of all
profit derived by Tenant from such assignment or sublease.  Tenant shall furnish Landlord with a sworn
statement, certified by an independent certified public accountant, setting
forth in detail the computation of profit (which computation shall include the
amortization of Tenant’s costs over the term of the subletting or assignment at
the interest rate specified in subsection 4A(iv)(c)(i) of this Lease and shall
otherwise be based upon generally accepted accounting principles), and
Landlord, or its representatives, shall have access to the books, records, and
papers of Tenant in relation thereto, and to make copies thereof.  Any rent in excess of that paid by Tenant
hereunder realized by reason of such assignment shall be deemed an item of such
profit.  If a part of the consideration
for such assignment shall be payable other than in cash, the payment to
Landlord shall be payable in accordance with the foregoing percentage of the
cash and other non-cash considerations in such form as is satisfactory to
Landlord.  Such percentage of Tenant’s
profit shall be paid to Landlord promptly by Tenant upon Tenant’s receipt from
time to time of periodic payments from such assignee or subtenant or at such
other time as Tenant shall realize its profits from such assignment or
sublease.

16.  SURRENDER
OF POSSESSION

Upon the
expiration of the term or upon the termination of Tenant’s right of possession,
whether by lapse of time or at the option of Landlord as herein provided,
Tenant shall forthwith surrender the Premises to Landlord in good order, repair
and condition, ordinary wear excepted, and shall, if Landlord so requires,
restore the Premises to the condition existing at the beginning of the Term,
ordinary wear and tear excepted.  Any
interest of Tenant in the alterations, improvements, and additions to the
Premises (including without limitation all carpeting or floor covering) made or
paid for by Landlord or Tenant shall, without compensation to Tenant become
Landlord’s property at the termination of this Lease by lapse of time or
otherwise and such alterations, improvements and additions shall be
relinquished to Landlord in good condition, ordinary wear excepted.  At the termination of the Term or of
Tenant’s right of possession, Tenant agrees to remove all alterations,
improvements and additions required to be removed pursuant to Section 9 hereof
and the following items of Tenant’s property: 
office furniture, trade fixtures, office equipment and all other items
of Tenant’s property on the Premises. 
Tenant shall pay to Landlord, upon demand, the cost of repairing any
damage to the Premises and to the Building caused by any such removal.  If Tenant shall fail or refuse to remove any
such property from the Premises, Tenant shall be conclusively presumed to have
abandoned the same, and title thereto shall thereupon pass to Landlord without
any cost either by set-off, credit, allowance or otherwise, and Landlord, at
its option, may accept the title to such property or at Tenant’s expense may
(i) remove the same or any part in any manner that Landlord shall choose,
repairing any damage to the Premises caused by such removal, and (ii) store,
destroy or otherwise dispose of the same without incurring liability to Tenant
or any other person.

17.  HOLDING
OVER

Tenant shall pay
to Landlord as Rent a sum equal to 200% of the Rent herein provided during each
month or portion thereof for which Tenant shall retain possession of the
Premises or any part thereof after the termination of the Term or of Tenant’s
right of possession, whether by lapse of time or otherwise, and also shall pay
all damages sustained by Landlord, whether direct or consequential, on account
thereof.  The provisions of this Article
17 shall

 

15

 

not be
deemed to limit or constitute a waiver of any other rights or remedies of
Landlord at law or as provided herein.

18.  TENANT’S
CERTIFICATE

The Tenant agrees
that, from time to time not later than twenty (20) days after Tenant’s receipt
of written request by Landlord, the Tenant or Tenant’s duly authorized
representative having knowledge of those matters set forth in Exhibit “D”
attached hereto and made a part hereof shall deliver to Landlord a completed
Tenant’s Statement substantially in the form attached hereto as Exhibit “D,” it
being intended that such Tenant’s Statement may be relied upon by any mortgagee
of Landlord or by any other person, firm or entity to whom Landlord may further
direct Tenant to address such Tenant’s Statement.  Tenant shall execute and deliver such completed Tenant’s Statement,
and in the event Tenant fails so to do within such twenty (20) day period,
Tenant shall be in default under this Lease.

19.  SUBORDINATION

This Lease
(excluding Tenant’s rights under Article 36 to purchase the Building and
Article 41 relating to the Offer Parcel) is subject and subordinate to all
present and future ground or underlying leases of the Building and to the lien
of any mortgages or trust deeds, now and hereafter in force against the
Building or any of them or any part thereof, and to all renewals, extensions,
modifications, consolidations and replacements thereof, and to all advances
made or hereafter to be made upon the security of such mortgages or trust
deeds, unless the holders of such mortgages or trust deeds or the lessors under
such ground lease or underlying leases require, in writing, that this Lease
shall be superior thereto; provided, however, that this Lease will not be
subordinate to future mortgages, trust deeds or ground or underlying leases
unless the holder thereof agrees in a non-disturbance agreement that Tenant’s
use and occupancy of the Premises (as the same may be expanded) shall not be
disturbed so long as Tenant is not in default under this Lease.  Landlord represents that, as of the date of
this Lease, there is no existing mortgage, trust deed or ground or underlying
lease of the Building.  At Landlord’s
request, Tenant shall execute a written Subordination, Non-Disturbance and
Attornment Agreement (“SNDA”), in such form and content as may be reasonably
acceptable to Landlord and Tenant provided by the holder of the subject
mortgage, deed of trust or ground or underlying lease, to evidence and confirm
the subordination of this Lease (but not Tenant’s rights under Article 36 of
this Lease relating to the purchase of the Building and Article 41 relating to
the Offer Parcel) or the superiority of this Lease to any such mortgage, deed
of trust, or ground or underlying lease on the terms set forth in this Article
19.  If any mortgage shall be foreclosed
or property encumbered thereby is transferred in lieu of foreclosure, or if any
ground or underlying lease is terminated, then 
(i) the liability of the mortgagee or trustee hereunder or purchaser at
such foreclosure sale or the liability of a subsequent owner designated as Landlord
under this Lease shall exist only so long as such trustee, mortgagee, purchaser
or owner is the owner of the Land and/or Building; and (ii) upon the request of
the mortgagee, trustee or ground lessor, Tenant will attorn, as Tenant under
this Lease, to the purchaser at any foreclosure sale under any mortgage or the
ground lessor.

20.  CERTAIN RIGHTS RESERVED BY LANDLORD

Landlord shall
have the following rights, each of which Landlord may exercise without notice
to Tenant and without liability to Tenant for damage or injury to property,
person or business on account of the exercise thereof, and the exercise of any
such rights shall not be deemed to constitute an eviction or disturbance of
Tenant’s use or possession of the Premises and shall not give rise to any claim
for set-off or abatement of rent and any other claim:

(a)           To
change the Building’s name or, if required by any governmental or
quasi-governmental authority having jurisdiction over the Building, to change
the street address;

(b)           To
install, affix and maintain any and all signs on the exterior and on the
interior of the Building;

(c)           To
decorate or to make repairs, alterations, additions, or improvements, whether
structural or otherwise, in and about the Building, or any part thereof, and
for such purposes, to enter upon the Premises, and during the continuance of
any of said work, to temporarily close doors, entryways, public space and

 

16

 

corridors
in the Building and to interrupt or temporarily suspend services or use of
facilities, all without affecting any of Tenant’s obligations hereunder, so
long as the Premises are reasonably accessible and usable, Landlord shall give
prior notice (which may be telephonic) before exercising these rights (except
in the event of an emergency) and shall conduct such activities in a manner
designed to minimize interference with Tenant’s business operations, but shall
not be required to conduct such activities on an overtime basis;

(d)           To
furnish door keys for doors in the Premises at the commencement of the
Lease.  To retain at all times, and to
use in appropriate instances, keys to all doors within and into the
Premises.  Tenant agrees to purchase
only from Landlord additional duplicate keys as required, to change no locks,
and not to affix locks on doors without the prior written consent of
Landlord.  Notwithstanding the
provisions for Landlord’s access to Premises, Tenant relieves and releases the
Landlord of all responsibility arising out of theft, robbery and pilferage.  Upon the expiration of the Term or of
Tenant’s right to possession, Tenant shall return all keys to Landlord and
shall disclose to Landlord the combination of any safes, cabinets or vaults
left in the Premises;

(e)           To
designate that window treatment shall be Building standard venetian blinds or
curtains and to designate and approve, prior to installation, all types of
additional window shades, blinds, or draperies;

(f)            To
approve the weight, size and location of safes, vaults and other heavy
equipment and articles in and about the Premises and the Building (so as not to
exceed the legal live load per square foot designated by the structural
engineers for the Building), and to require all such items and furniture and
similar items to be moved into or out of the Building and Premises only at such
times and in such manner as Landlord shall direct in writing. Tenant shall not
install or operate machinery or any mechanical devices of a nature not directly
related to Tenant’s ordinary use of the Premises without the prior written
consent of Landlord.  Movements of
Tenant’s property into or out of the Building and within the Building are
entirely at the risk and responsibility of Tenant and Landlord reserves the
right to require permits before allowing any property to be moved into or out
of the Building;

(g)           To
close the Building after regular working hours and on Saturdays, Sundays and
legal holidays subject, however, to Tenant’s right to admittance to the
Premises under such regulations as Landlord may prescribe from time to time,
which may include but shall not be limited to, a requirement that persons
entering or leaving the Building identify themselves to a watchman by
registration or otherwise and establish their right to enter or leave the
Building. Such regulations may include, but shall not be limited to, the
requiring of identification from Tenant’s employees, agents, clients,
customers, invitees, visitors and guests.

(h)           To
establish controls for the purpose of regulating all property and packages
(both personal and otherwise) to be moved into or out of the Building and
Premises;

(i)            To
regulate delivery and service of supplies in order to insure the cleanliness
and security of the Premises and to avoid congestion of the loading docks,
receiving areas and freight elevators;

(j)            To
show the Premises to prospective tenants at reasonable hours during the last
twelve months of the Term, and, if vacated or abandoned, to show the Premises
at any time and to prepare the Premises for re-occupancy;

(k)           To
erect, use and maintain pipes, ducts, wiring and conduits, and appurtenances
thereto, in and through the Premises at reasonable locations; and

(l)            To
enter the Premises at any reasonable time to inspect the Premises.

21.  RULES
AND REGULATIONS

Tenant agrees to
observe the rules and regulations for the Building attached hereto as Exhibit
“E” and made a part hereof.  Landlord
shall have the right from time to time to prescribe additional rules and
regulations which, in its reasonable judgment, may be desirable for the use,
entry, operation and management of the Premises and Building, each of which
rules and regulations and any amendments thereto shall become a part of this
Lease.  Tenant

 

17

 

shall
comply with all such rules and regulations provided, however, that such rules
and regulations shall not contradict or abrogate any right or privilege herein
expressly granted to Tenant.

22.  LANDLORD’S
REMEDIES

If default shall
be made in the payment of the Rent or any installment thereof in the payment of
any other sum required to be paid by Tenant under this Lease or under the terms
of any other agreement between Landlord and Tenant and such default shall
continue for ten (10) days after written notice to Tenant (provided, however,
that Landlord shall not be required to give Tenant notice or an opportunity to
cure with respect to a monetary default after the first time in any one year
period), or if default shall be made in the observance or performance of any of
the other covenants or conditions in this Lease which Tenant is required to
observe and perform and such default shall continue for thirty (30) days after
written notice to Tenant (unless such non-monetary default by its nature is
curable but cannot be cured within such thirty (30) day period, in which event,
if Tenant commences and diligently prosecutes such cure within thirty (30) day
period, Tenant shall have such additional period as is reasonably necessary to
cure such default to completion, in no event, to exceed sixty (60) days after
such notice to Tenant), or if a default involves a hazardous condition and is
not cured by Tenant immediately upon written notice to Tenant, or if the
interest of Tenant in this Lease shall be levied on under execution or other
legal process, or if any voluntary petition in Bankruptcy or for corporate
reorganization or any similar relief shall be filed by Tenant, or if any
involuntary petition in Bankruptcy shall be filed against Tenant under any
federal or state Bankruptcy or insolvency act and shall not have been dismissed
within thirty (30) days from the filing thereof, or if a receiver shall be
appointed for Tenant or any of the property of Tenant by an court and such
receiver shall not have been dismissed within thirty (30) days from the date of
his appointment, or if Tenant shall make an assignment for the benefit of
creditors, or if Tenant shall admit in writing Tenant’s inability to meet
Tenant’s debts as they mature, or if Tenant shall abandon or vacate the
Premises during the Term, then Landlord may treat the occurrence of any one or
more of the foregoing events as a breach of this Lease, and thereupon, at its
option, may, with or without further notice or demand of any kind to Tenant or
any other person, have any one or more of the following described remedies in
addition to all other rights and remedies provided at law or in equity or
elsewhere herein:

(a)           Landlord
may terminate this Lease and the Term created hereby, in which event Landlord
may forthwith repossess the Premises and be entitled to recover forthwith, as
damages, in addition to any other sums or damages for which Tenant may be
liable to Landlord, a sum of money equal to the excess of the value of the Rent
provided to be paid by Tenant for the balance of the Term over the fair market
rental value of the Premises, after deduction of all anticipated expenses of
reletting, for said period.  Should the
fair market rental value of the Premises, after deduction of all anticipated
expenses of reletting, for the balance of the term, exceed the value of the Rent
provided to be paid by Tenant for the balance of the Term, Landlord shall have
no obligation to pay to Tenant the excess or any part thereof or to credit such
excess or any part thereof against any other sums or damages for which Tenant
may be liable to Landlord.

(b)           Landlord
may terminate Tenant’s right of possession and may repossess the Premises by
forcible entry and detainer suit, by taking peaceful possession or otherwise,
without terminating this Lease, in which event Landlord may, but shall be under
no obligation to, relet the same for the account of Tenant, for such rent and
upon such terms as shall be satisfactory to Landlord.  For the purpose of such reletting, Landlord is authorized to
decorate, repair, remodel or alter the Premises.  If Landlord shall fail to relet the Premises, Tenant shall pay to
Landlord as damages a sum equal to the amount of the Rent reserved in  this Lease for the balance of the Term.  If the Premises are relet and a sufficient
sum shall not be realized from such reletting after paying all of the costs and
expenses of all decoration, repairs, remodeling, alterations and additions and
the expenses of such reletting and of the collection of the rent accruing
therefrom to satisfy the Rent provided for in this Lease, Tenant shall satisfy
and pay the same upon demand therefor from time to time.  Tenant agrees that Landlord may file suit to
recover any sums falling due under the terms of this Article 22 from time to
time and that no suit or recovery of any portion due Landlord hereunder shall
be any defense to any subsequent action brought for any amount not theretofore
reduced to judgment in favor of Landlord.

(c)           Landlord shall have the remedy
described in California Civil Code Section 1951.4 (lessor may continue 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).

 

18

 

23.  EXPENSE
OF ENFORCEMENT

The Tenant shall
pay, upon demand, all Landlord’s costs, charges and expenses, including the
fees and out-of-pocket expenses of counsel, agents and others retained by
Landlord which are incurred in enforcing the Tenant’s obligations hereunder or
which are incurred by the Landlord in any litigation, negotiation or
transaction in which the Tenant causes the Landlord, without the Landlord’s
fault, to become involved or concerned.

24.  COVENANT
OF QUIET ENJOYMENT

The Landlord
covenants that the Tenant, on paying the Rent, charges for services and other
payments herein reserved and on keeping, observing and performing all the other
terms, covenants, conditions, provisions and agreements herein contained on the
part of the Tenant to be kept, observed, and performed, shall during the Term,
peaceably and quietly have, hold and enjoy the Premises free from interference
by Landlord subject, however, to the terms, covenants, conditions, provisions,
and agreements of this Lease.

25.  SECURITY
DEPOSIT

[INTENTIONALLY
OMITTED]

26.  REAL
ESTATE BROKER

Landlord and
Tenant each represent that to each other that they have dealt with no broker or
finder in connection with this lease, except Tenant’s dealings with and
representation by Cushman & Wakefield of California, Inc., and insofar as
they know, no broker or person other than Cushman & Wakefield of
California, Inc. is entitled to any commission or finder’s fee in connection
with the transaction described in this Lease. Landlord agrees to and shall pay,
and defend, indemnify and hold Tenant and the Building free and harmless from
and against any and all obligations to pay a brokerage commission to Cushman
& Wakefield of California, Inc. as a result of this Lease, and Landlord and
Tenant agree to and shall each defend, indemnify, and hold the other party and
its beneficiaries, employees, mortgagees, agents, their officers and partners,
and the Building free and harmless from and against any and all loss,
liability, damage, cost, claim or expense, specifically including but not
limited to attorneys’ fees, incurred by reason of any claim arising out of the
acts of the indemnifying party, or others on behalf of the indemnifying party,
for a commission, finder’s fee, or similar compensation made by any broker,
finder or party other than Cushman & Wakefield of California, Inc. claiming
to have dealt or contracted with the indemnifying party relating to this
Lease.  The representations and
warranties contained in this Section shall survive the termination of this Lease.

27.  MORTGAGEE
PROTECTION CLAUSE

Tenant agrees to
give written notice of any default by Landlord to the holder of any mortgage,
deed of trust or ground or underlying lease. Tenant agrees that, before it
exercises any rights or remedies under the Lease, the lienholder or lessor
shall have the right, but not the obligation, to cure the default within the
same time, if any, given to Landlord to cure the default, plus an additional
thirty (30) days, except that only an additional ten (10) days shall be
permitted in the case of a default in the payment of money from Landlord to
Tenant. Tenant agrees that this cure period for defaults not involving the
payment of money from Landlord to Tenant shall be extended by the time
necessary for the lienholder to begin foreclosure proceedings and to obtain possession
of the Building as long as the lienholder:

(a)           Notifies Tenant,
within thirty (30) days after receipt of Tenant’s notice, of the lienholder’s
intention to effect this remedy; and

(b)           Institutes immediate
steps to effect this remedy or institutes immediate legal proceedings to
appoint a receiver for the Building or to foreclose on or recover possession of
the Building within the thirty-day (30-day) period and thereafter prosecutes
the remedy or legal proceedings to completion with due diligence and continuity.

 

19

 

28.  SEVERABILITY

If any term or
provision of this Lease shall to any extent be held invalid or unenforceable,
the remaining terms and provisions of this Lease shall not be affected thereby,
and each of such remaining terms and provisions of this Lease shall be valid
and be enforced to the fullest extent permitted by law.

29.  HAZARDOUS
MATERIALS

A.            Tenant
shall not cause or permit any Hazardous Material (as defined in paragraph C
below) to be brought, kept or used in or about the Building by Tenant, its
agents, employees, contractors or invitees. 
Tenant hereby indemnifies Landlord from any breach by Tenant of the
obligations stated in the preceding sentence, and agrees to defend and hold
Landlord harmless from and against any and all loss, damage, cost and/or
expense (including, without limitation, diminution in value of the Building,
damages for the loss or restriction on use of rentable or usable space or of
any amenity of the Building, damages arising from any adverse impact on
marketing of space in the Building, and sums paid in settlement of claims,
attorney’s fees, consultant fees, and expert fees) which arise during or after
the term of this Lease as a result of such breach.  This indemnification of Landlord by Tenant includes, without
limitation, cost incurred in connection with any investigation of site
conditions or any cleanup, remedial, removal or restoration work required by
any federal, state, or local governmental agency or political subdivision
because of Hazardous Material present in the soil or ground water on or under
the Building which results from such a breach. 
Without limiting the foregoing, if the presence of any Hazardous
Material in the Building caused or permitted by Tenant results in any
contamination of the Building, Tenant shall promptly  take all actions at its sole expense as are necessary to return
the Building to the condition existing prior to the introduction of such Hazardous
Material to the Building; provided that Landlord’s approval of such actions,
and the contractors to be used by Tenant in connection therewith, shall first
be obtained.

B.            It
shall not be unreasonable for Landlord to withhold its consent to any proposed
transfer, assignment, or subletting of the Premises if (i) the proposed
transferee’s anticipated use of the Premises involves the generation, storage,
use, treatment, or disposal of Hazardous Material; (ii) the proposed transferee
has been required by any prior landlord, lender, or governmental authority to
take remedial action in connection with Hazardous Material contamination of a
property if the contamination resulted from such transferee’s actions or use of
the property in question; or (iii) the proposed transferee is subject to any
enforcement order issued by any governmental authority in connection with the
use, disposal, or storage of a Hazardous Material.

C.            As
used herein, the term “Hazardous Material” means any hazardous or toxic
substance, material, or waste which is or becomes regulated by any local
governmental authority or the United States Government.  The term “Hazardous Material” includes,
without limitation, any material or substance which is (i) defined as a
“hazardous waste,” “extremely hazardous waste,” or “restricted hazardous waste”
or similar term under the law of the jurisdiction where the property is located
or (ii) designated as a “hazardous substance” pursuant to Section 311 of the
Federal Water Pollution  Control Act (33
U.S.C. § 1317), (iii) defined as a “hazardous waste” pursuant to Section 1004
of the Federal Resource Conservation and 
Recovery Act, 42 U.S.C. § 6901 et seq. (42 U.S.C. § 6903), (iv) defined
as a “hazardous substance” pursuant to Section 101 of the Comprehensive
Environmental Response, Compensation and Liability Act, 42 U.S.C. § 99601 et
seq. (42 U.S.C. § 9601).

D.            As
used herein, the term “Laws” means any applicable federal, state, or local
laws, ordinances, or regulations relating to any Hazardous Material affecting
the Building, including, without limitation, the laws, ordinances, and
regulations referred to in paragraph C above.

E.             Landlord
and its employees, representatives and agents shall have access to the Building
during reasonable hours and upon reasonable notice to Tenant in order to
conduct periodic environmental inspections and tests of Hazardous Waste
contamination of the Building.

F.             Landlord
represents that, to Landlord’s knowledge, the parcel of land upon which
Building and Premises are to be located do not, as of the date hereof, contain
any Hazardous Materials in violation of applicable Laws.

 

20

 

30.                               MISCELLANEOUS

A.                                   Rights
Cumulative.

All rights and remedies of Landlord under this Lease
shall be cumulative and none shall exclude any other rights and remedies
allowed by law.

B.                                     Overdue
Amounts-Rent Independent.

Any installment of
Base Rent, Additional Rent, or other charges to be paid by Tenant accruing
under the provisions of this Lease, which shall not be paid when due, shall
bear interest at the rate of four percent (4%) over the Prime Rate of interest
from time to time from the date when the same is due until the same shall be
paid, but if such rate exceeds the maximum interest rate permitted by law, such
rate shall be reduced to the highest rate allowed by law under the
circumstances.  Tenant covenants that
the obligation to pay the Base Rent, Additional Rent or any other charges
hereunder are independent of any other covenant, condition, provision or
agreement herein contained.

C.                                     Terms.

The necessary
grammatical changes required to make the provisions hereof apply either to
corporations or partnerships or individuals, men or women, as the case may
require, shall in all cases be assumed as though in each case fully expressed.

D.                                    Binding
Effect.

Each of the
provisions of this Lease shall extend to and shall, as the case may require,
bind or inure to the benefit not only of the Landlord and of Tenant, but also
of their respective successors or assigns, provided this clause shall not permit
any assignment by Tenant contrary  to
the provisions of Article 15 hereof.

E.                                      Lease
Contains All Terms.

All of the
representations and obligations of Landlord are contained herein and in the
Work Letter attached hereto as Exhibit “C,” and no modification, waiver or
amendment of this Lease or of any of its conditions or provisions shall be
binding upon the Landlord unless in writing signed by Landlord or by duly
authorized agent of Landlord empowered by a written authority signed by
Landlord.

F.                                      Delivery
for Examination.

Submission of the
form of the Lease for examination shall not bind Landlord  in any manner, and no Lease or obligations
of the Landlord shall arise until this instrument is (i) signed by both
Landlord and Tenant and (ii) delivered to each.

G.                                     No
Air Rights.

No rights to any
view or to light or air over any property, whether belonging to Landlord or any
other person, are granted to Tenant by this Lease.

H.                                    Intentionally
Deleted.

I.                                         Tenants
Claims.

Any claim which
Tenant may have against Landlord for default in performance of any of the
obligations herein contained to be kept and performed by Landlord shall be
deemed waived unless (i) such claim is asserted by written notice thereof to
Landlord within twelve (12) months of commencement of the alleged default or of
accrual of the cause of action and (ii) unless suit be brought thereon within
twenty-four (24) months subsequent to the accrual of such cause of action.

 

21

 

J.                                        Intentionally
Deleted.

K.                                    Transfer
of Landlord’s Interest.

Tenant
acknowledges that Landlord has the right to transfer its interest in the
Building and in this Lease and the Work Letter, and Tenant agrees that in the
event of any such transfer occurring after the Commencement Date, Landlord
shall automatically be released from all liability under this Lease and the
Work Letter and Tenant agrees to look solely to such transferee for the
performance of Landlord’s obligations hereunder and thereunder.  Tenant further acknowledges that Landlord
may assign its interest in this Lease and the Work Letter to a mortgagee(s),
trust deed holder(s) or lessor(s) of ground or underlying lease(s) as
additional security and agrees that such an assignment shall not release
Landlord from its obligations hereunder or thereunder and that Tenant shall
continue to look to Landlord for the performance of its obligations hereunder
and thereunder.

L.                                      Landlord’s
Title.

Landlord’s title
is and always shall be paramount to the title of Tenant.  Nothing herein contained shall empower
Tenant to do any act which can, shall or may encumber the title of the
Landlord.

M.                                 Recording.

This Lease shall
not be recorded.  Landlord and Tenant
shall execute and deliver a “Memorandum of Lease and Options to Purchase and
Right of Offer” in the form attached hereto as Exhibit “F” at such time as the
conditions or contingencies set forth in Sections 1B and 1C of this Lease have
been satisfied, have been waived by Tenant or have expired, and Tenant
thereafter may elect, in Tenant’s sole discretion and at Tenant’s sole expense,
to record such Memorandum in the Office of the Solano County, California
Recorder of Deeds.

N.                                    Captions.

The captions of
paragraphs, subparagraphs and Articles are for convenience only and shall not
be deemed to limit, construe, affect or alter the meaning of such paragraphs,
subparagraphs or Articles.

O.                                    Covenants
and Conditions.

All of the
covenants of Tenant hereunder shall be deemed and construed to be “conditions”,
if Landlord so elects, as well as “covenants” as though the words specifically
expressing or imposing covenants and conditions were used in each separate
instance.

P.                                      Only
Landlord/Tenant Relationship.

Nothing contained
in this Lease shall be deemed or construed by the parties hereto or by any third
party to create the relationship of principal and agent, partnership, joint
venturer or any association between Landlord and Tenant, it being expressly
understood and agreed that neither the method of computation of Rent nor any
act of the parties hereto shall be deemed to create any relationship between
Landlord and Tenant other than the relationship of landlord and tenant.

Q.                                    Application
of Payments.

During any period
in which Tenant is in default under this Lease, Landlord shall have the right
to apply payments received from Tenant pursuant to this Lease (regardless of
Tenant’s designation of such payments) to satisfy any obligations of Tenant
hereunder, in such order and amounts, as Landlord, in its sole discretion, may
elect.

 

22

 

R.                                     Definition
of “Landlord”.

All indemnities,
covenants and agreements of Tenant contained herein which inure to the benefit
of Landlord shall be construed to also inure to the benefit of Landlord’s
directors, officers, shareholders, agents and employees.

31.                               NOTICES

All notices to be
given under this Lease shall be in writing and shall be deemed to have been
given when delivered personally, one (1) business day after being deposited
with a nationally recognized overnight courier, or two (2) business days after
being deposited in the United States mail, certified or registered with return
receipt requested, postage prepaid, addressed as follows:

(a)  If to Landlord:

c/o Quadrangle Development
Company

2121 Waukegan Road, Suite 100

Bannockburn, Illinois 60015

Attn:  Christopher Noon

with a copy to:

H.J. Shein, Inc.

6875 Enterprise Road

Glen Ellen, California 95442

Attn:  Harvey Shein

 

or to such other person or such other address
as is designated in a notice by Landlord to Tenant.

 

(b)  If to Tenant:

Copart, Inc.

5500 East Second Street, 2nd Floor

Benicia, California 94510

Attn:  Legal Department

 

with a copy to:

Robert Binns, Esq.

3620 American River Drive,
Suite 175

Sacramento, California 95864

 

or to such other person or such other address
as is designated in a notice by Tenant to Landlord.

 

32.  TIME
OF THE ESSENCE

Time is of the
essence for each and every provision contained in the Lease.

33.  EXPANSION
OPTION

Subject to the
provisions hereinafter set forth, Landlord hereby grants to Tenant the option
to lease additional space in the Building (the “Expansion Space”).

(a)           Provided that Tenant is not in
default under this Lease, Tenant may, by delivery of written notice to Landlord
on or before the date which is eighteen (18) full calendar months after the
Commencement Date elect to lease the Expansion Space, which notice shall
specify the number of square feet of additional Rentable Area desired to be
leased by Tenant.  Tenant’s failure to
elect to lease the Expansion Space on or before such date shall be deemed a
waiver of Tenant’s rights under this Article 33.

 

23

 

(b)           The Expansion Space shall consist of
up to the number of square feet of Rentable Area in the Building not constituting
the Premises or leased to another tenant under subsection 33(d) hereof
(including expansion options of each such other tenant), and shall be located
on a floor or floors, and have a configuration mutually acceptable to Landlord
and Tenant and designated by Landlord in a configuration which is typical for
normal office use and leaves a remainder that is also sufficient in size and
typical for normal office use.

(c)           If Tenant elects to lease the
Expansion Space, the Expansion Space shall be added to and become a part of the
Premises for all purposes under this Lease, except as follows:

(i)            The term of the demise of the
Expansion Space shall commence on the date which is two (2) months following
Landlord’s receipt of Tenant’s election notice (the “Expansion Date”) and shall
expire simultaneously with the expiration or earlier termination of the Term of
the Lease.

(ii)           Tenant’s Proportionate Share shall be
increased by the percentage calculated by dividing the rentable square feet of
the Expansion Space by the rentable square feet of the Building.

(iii)          The annual Base Rent rate per square
foot of Rentable Area of the Expansion Space shall be equal to the Base Rent
rate in effect from time to time with respect to the initial Premises.

(iv)          The Expansion Space will be accepted
by Tenant in their then-existing “as-is” condition, except that Landlord shall
provide Tenant with a construction allowance toward tenant improvements of up
to $25.00 per square foot of the Expansion Space, which amount assumes a
ten-year amortization period and an interest rate of eleven percent (11%) per
annum, and, accordingly, shall be reduced with the passage of each month prior
to the Expansion Date to reflect an amortization period which is less than ten
years by the number of such months. 
Such tenant improvements shall be constructed and such allowance (as
reduced as aforesaid) shall be paid generally in conformance with the
provisions set forth in the Work Letter attached to this Lease.

(d)   If, prior
to the date which is eighteen (18) full calendar months after the Commencement
Date, Landlord notifies Tenant in writing that it has received a good faith
third party arms length request for proposal to lease space in the Building (an
“RFP”) and Landlord intends to offer to rent space to the requesting party at a
base rental rate of no less than $1.27 per month per square foot, triple net,
including a tenant improvement allowance of no more than $25.00 per square
foot, Landlord shall notify Tenant in writing of the terms of the proposed lease
offer, including the rent, term of the proposed tenancy, and the tenant
improvement allowance, and Tenant may elect to lease the offered space on the
terms proposed by Landlord, but for a maximum initial term not to exceed five
(5) years. If Tenant fails to exercise its expansion option hereunder with
respect to the space which is the subject of such RFP response within ten (10)
days after Landlord’s written notice to Tenant, Landlord may lease such space
in accordance with the RFP at any time during the following six (6) month
period and upon the execution of such lease the provisions of this Article 33
shall cease and terminate with respect to such leased space only (which
lease(s) shall be referred to as “Other Leases”),  free of any right of Tenant under this Article 33.  If Tenant does exercise its option to lease
Expansion Space set forth in an RFP, Landlord may not at any time submit to
Tenant another RFP from the same prospective tenant.

34.  RIGHT
OF NOTICE

From and after the
date which is eighteen (18) full calendar months after the Commencement Date,
Landlord agrees to respond promptly to requests made by Tenant from time to
time inquiring as to the leasing activity regarding any vacant space in the
Building and as to times of lease expirations regarding any leased space in the
Building.  In addition, Landlord shall,
as a matter of courtesy only, advise Tenant promptly of Landlord’s general
intention to market such space for lease to prospective tenants, but nothing
contained herein shall impose any liability on Landlord for a failure to so
advise Tenant, it being understood that no legally binding obligation or duty
shall be created by this provision.

 

24

 

35.  OPTION
TO RENEW

(a)   If Tenant
is not then in default hereunder beyond applicable notice and cure periods,
then Tenant shall have the option to renew the Term of this Lease for three (3)
successive five (5) year periods (each, a “Renewal Term”) commencing on the day
next following the Term or prior Renewal Term, as applicable, and ending on the
fifth (5th) anniversary thereof, by giving written notice of said renewal to
Landlord not later than the date which is nine (9) calendar months prior to the
Term or prior Renewal Term, as applicable, time being of the essence.

(b)   If the Term
of this Lease is renewed, it shall be so renewed on the same terms and
conditions then set forth in this Lease except that (i) the annual Base
Rent during the Renewal Term shall be equal to the greater of (A) the “Prevailing
Market Rental”, as determined in accordance with paragraph 35(d) below and
(B) one hundred five percent (105%) of the annual Base Rent payable at the
end of the initial Term (and subject to continuing escalations of five percent
(5%) over the rate then in effect every second year thereafter);
(ii) Landlord shall not be obligated to provide any additional tenant
improvements or construction allowances with respect to the Renewal Term; and
(iii) there shall be no further rights to extend the Term beyond the three
(3) successive five (5) year periods specified herein.

(c)   It shall be
a condition to Tenant’s exercise of the option to extend that both at the time
of delivery of Tenant’s exercise notice and at the commencement of the Renewal
Term that the Lease has not been assigned, except for a Permitted
Transfer.  Any termination of this Lease
or termination of Tenant’s right of possession to the Premises shall terminate
all of Tenant’s rights to the option to renew. 
The option to renew may be exercised only by, and may not be exercised
by or for the benefit of any party other than, the named Tenant, or an
Affiliate of Tenant in connection with a Permitted Transfer.

(d)   For
purposes of this Lease, the “Prevailing Market Rental” shall be the Base Rent
that the Premises would be expected to be leased for, for a five-year term
commencing on the first day of the Renewal Term, in their then-existing
condition, in an arms-length transaction between a willing landlord and tenant
in the office market existing at the time such rate is established.  Such determination shall include
consideration of (i) the size, location, area, view and nature and
condition of the improvements in the Premises and (ii) other comparable
leasing transactions in the geographical area in which the Premises is located,
including renewals and new leases (with appropriate adjustments for different
size premises and different length terms), and the rents, and tenant
concessions in such transactions.

If Landlord and
Tenant fail to agree as to the Prevailing Market Rental by the date which is
eight (8) calendar months prior to the end of the Term or Renewal Term, as
applicable, the Prevailing Market Rental shall be determined by binding
arbitration, in accordance with the following provisions.

Within ten (10)
days after the date described in the immediately preceding sentence, each party
shall give written notice to the other party, specifying the name, address and
professional qualifications of the person designated to act as arbitrator on
its behalf.  The two (2) arbitrators
shall, within ten (10) days after selection of the second arbitrator, select a
third arbitrator.

All arbitrators
appointed shall be real estate professionals with not less than ten (10) years
of experience in the improved office building real estate rental market in the
geographical area in which the Premises is located, and be devoting
substantially all of their time to professional real estate work at the time of
appointment, and be in all respects impartial and disinterested.

The decision of
the arbitrators so chosen shall be given within a period of thirty (30) days
after the appointment of such third arbitrator, in the following manner:  (i) not later than twenty (20) days after
the appointment of the third arbitrator, the first arbitrator and the second
arbitrator (each acting independently and not in consultation) shall notify
Landlord, Tenant and the third arbitrator in writing of his or her
determination of the Prevailing Market Rental in a formal report, setting forth
the supporting evidence and data which such arbitrator took into account in
making such determination, and (ii) not later than ten (10) days after
notification by the first and second arbitrators of their respective
determinations, the third arbitrator shall notify Landlord and Tenant in
writing of his or her determination of which Prevailing Market Rental
determination, either that supplied by the first arbitrator or that supplied by
the second arbitrator, more closely approximates the third arbitrator’s professional

 

25

 

opinion of the accurate Prevailing Market Rental, which determination
shall control, and such first or second arbitrator’s Prevailing Market Rental,
as selected by the third arbitrator, shall constitute the Prevailing Market
Rental for the purpose of determining the Base Rent for the Renewal Term.  Each party shall pay the fees and expenses
of the arbitrator appointed by or on behalf of such party and the reasonable
fees and expenses of the third arbitrator shall be borne equally by both
parties.  If either party fails to
appoint its arbitrator within the time above specified, or if the two (2)
arbitrators so selected cannot agree on the selection of the third arbitrator
within the time above specified, then either party, on behalf of both parties,
may request such appointment of such second or third arbitrator, as the case
may be, by application to any Judge of the Superior Court of the State of
California, County of Solano, upon ten (10) days’ prior written notice to the
other party of such intent.

36.  OPTIONS
TO PURCHASE

A.                                   First
Option.

(i)  Grant of First Option:  Landlord grants Tenant the exclusive right
and option to purchase (the “First Option”) the Building (the “Option Parcel”),
during the period commencing on the Effective Date of this Lease and ending on
the date which is sixty (60) days prior to the Lease Commencement Date (the
“First Option Exercise Period”), at the price set forth in the purchase
agreement attached hereto as Exhibit “G” and made a part hereof by this
reference (the “Purchase Agreement”).

(ii)  Exercise of First
Option:  Provided that Tenant is not
in default under this Lease beyond applicable notice and cure periods and the
Lease is in full force and effect, Tenant may exercise the First Option at any
time during the First Option Exercise Period by executing and tendering to
Landlord the Purchase Agreement.  Upon
receipt from Tenant of an executed copy of the Purchase Agreement, Landlord
shall immediately execute and deliver to Tenant, and to Escrow Holder, a copy
of the Purchase Agreement properly executed by Landlord.

(iii)  Consideration:  The consideration for the grant of this
First Option is the execution of the Lease by Tenant.

(iv)  Automatic Termination:  If Tenant fails to exercise the First Option
in accordance with its terms, and within the First Option Exercise Period, then
the First Option only,  and the rights
of Tenant under only the First Option shall automatically and immediately
terminate without notice.

(v)  Assignability of First
Option:  Tenant  may not assign its rights and obligations
under this First Option to any party other than to an “Affiliate” of Tenant in
connection with a “Permitted Transfer” of this Lease to such Affiliate, as said
terms are defined in Article 15 of this Lease.

(vi)  Notices:  Any notice to be given or other document to
be delivered by either party to the other relating to the First Option shall be
in writing and sent pursuant to the provisions of Section 31 of the Lease.

B.                                     Second
Option.

(i)  Grant of Second Option:  Landlord grants Tenant the exclusive right
and option to purchase  (the “Second
Option”) the Option Parcel during the period commencing on the Effective Date
of this Lease and ending on the last day of the tenth month of the Lease Term
(the “Second Option Exercise Period”), at the price set forth in the purchase
agreement attached hereto as Exhibit “G” and made a part hereof by this
reference (the “Purchase Agreement”).

(ii)  Exercise of Second
Option:  Provided that Tenant is not
in default under this Lease beyond applicable notice and cure periods and the
Lease is in full force and effect, Tenant may exercise the Second Option at any
time during the Second Option Exercise Period by executing and tendering to
Landlord the Purchase Agreement.  Upon
receipt from Tenant of an executed copy of the Purchase Agreement, Landlord
shall immediately execute and deliver to Tenant, and to Escrow Holder, a copy
of the Purchase Agreement properly executed by Landlord.

26

 

(iii)  Consideration:  The consideration for the grant of this
Second Option is the execution of the Lease by Tenant.

(iv)  Automatic Termination:  If Tenant fails to exercise the Second
Option in accordance with its terms, and within the Second Option Exercise
Period, then the Second Option only, and the rights of Tenant under only the
Second Option shall automatically and immediately terminate without notice.

(v)  Assignability of Second
Option:  Tenant may not assign its
rights and obligations under this Second Option to any party other than to an
“Affiliate” of Tenant in connection with a “Permitted Transfer” of this Lease
to such Affiliate, as said terms are defined in Article 15 of this Lease.

(vi)  Notices:    Any notice to be given or other document
to be delivered by either party to the other relating to the Second Option
shall be in writing and sent pursuant to the provisions of Section 31 of the
Lease.

C.                                     Third
Option.

(i)  Grant of Third  Option: 
Landlord grants Tenant the exclusive right and option to purchase (the
“Third Option”) the Option Parcel during the period commencing on the Effective
Date of this Lease and ending on the last day of the twelfth (12th) month of
the Lease Term (the “Third Option Exercise Period”), at the price set forth in
the purchase agreement attached hereto as Exhibit “G” and made a part hereof by
this reference (the “Purchase Agreement”).

(ii)  Exercise of Third
Option:  Provided that Tenant is not
in default under this Lease beyond applicable notice and cure periods and the
Lease is in full force and effect, Tenant may exercise the Third Option at any
time during the Third Option Exercise Period by executing and tendering to
Landlord the Purchase Agreement.  Upon
receipt from Tenant of an executed copy of the Purchase Agreement, Landlord
shall immediately execute and deliver to Tenant, and to Escrow Holder, a copy
of the Purchase Agreement properly executed by Landlord.

(iii)  Consideration:  The consideration for the grant of this
Third Option is the execution of the Lease by Tenant.

(iv)  Automatic Termination:  If Tenant fails to exercise the Third Option
in accordance with its terms, and within the Third Option Exercise Period, then
the Third Option only, and the rights of Tenant under only the Third Option
shall automatically and immediately terminate without notice.

(v)  Assignability of Third
Option: Tenant may not assign its rights and obligations under this Third
Option to any party other than to an “Affiliate” of Tenant in connection with a
“Permitted Transfer” of this Lease to such Affiliate, as said terms are defined
in Article 15 of this Lease.

(vi) Notices:  Any notice
to be given or other document to be delivered by either party to the other
relating to the Third Option shall be in writing and sent pursuant to the
provisions of Section 31 of the Lease.

D.            Limitation.  Notwithstanding anything contained in this
Lease to the contrary, upon Tenant’s exercise of the First Option, Second
Option or Third Option, the other two options that were not exercised shall
terminate and be null and void forever.

37.  PARKING

Tenant shall have
the right during the Term to the use of, on a non-exclusive basis with other
tenants or occupants of the Building, four (4) parking spaces for every 1,000
square feet of Rentable Area in the Premises, sized for normal passenger
vehicles for no separate parking charge or fee other than the pass through of
Taxes and Operating Expenses; provided, however, that Landlord shall have no
liability for any reduction in parking caused by reason of a condemnation (or
deed given in lieu thereof) or any other governmental action or requirement,
but such waiver of liability shall not affect Tenant’s rights under Article 14
of this Lease.

 

27

 

38.  USE OF THE ROOF AND BUILDING STRUCTURE

Tenant shall have
the non-exclusive right during the Term to use a portion of the roof of the
Building and building structure for installation and use of (i) a microwave
dish antenna subject to the prior technical and aesthetic approval of Landlord
(which may be conditioned upon, among other things, being located within, and
not being taller than, the screening walls around the mechanical equipment on
the roof and not impairing access therein) and (ii) such other communications
and associated equipment as Landlord may hereafter approve in writing in its
sole discretion (collectively, the “Communication Equipment”).  Tenant shall have no obligation to pay Rent
for such right, but Tenant shall, at its sole cost and expense, maintain any
Communication Equipment in good condition and repair, and comply with the terms
and conditions set forth on Exhibit “H” for use of the roof and building
structure.

39.  GENERATOR
PAD

Tenant shall have
the right during the Term to use an outdoor area of approximately ten (10) feet
by fifteen (15) feet (the “Pad Area”) in a location to be designated by
Landlord for Tenant’s installation and use of a generator pad, a generator and
an above-ground fuel tank (collectively, the “Generator Equipment”) subject to
the prior technical and aesthetic approval of Landlord (which may be
conditioned upon, among other things, being located within, and not being
taller than, the screening walls which Landlord requires Tenant to install
around the Generator Equipment). Tenant shall have no obligation to pay Rent
for such right, but Tenant shall, at its sole cost and expense, maintain any
Generator Equipment in good condition and repair, and comply with the terms and
conditions set forth on Exhibit “I” for use of the Pad Area.

40.  SIGNAGE

(a)           During the Term, Tenant shall have
the right to signage on the monument sign for the Building, identifying the
name of Tenant and other tenants of the Building.  The lettering for such signage shall be installed and paid for by
Landlord.

(b)   For so long
during the Term as Tenant is leasing not less than sixty-six percent (66%) of
the Rentable Area of the Building, if Tenant shall obtain, at Tenant’s sole
cost and expense, all applicable approvals from the City of Fairfield, Tenant
shall have the right to two (2) signs on the elevation of the Building facing
the freeway, and two (2) additional signs on the elevation of the Building
facing Business Center Drive; provided, however, that: (i) the design,
size, content and location of such signage shall comply with the provisions of
all covenants, conditions and restrictions affecting the Project and all
applicable laws, codes and regulations and shall be subject to the approval of
Landlord; (ii) such signage shall be installed by Landlord, and shall be
paid for by Tenant within ten (10) days following demand by Landlord;
(iii) Tenant shall be responsible for all costs of maintaining, repairing
and insuring such signage; and (iv) Tenant shall, within ten (10) days
following demand by Landlord, reimburse Landlord for all costs incurred by
Landlord in the removal of such signage and the making of related repairs to
the Premises upon the termination of this Lease or Tenant’s rights under this
Article 40(b).

41.  RIGHT OF OFFER REGARDING ADJACENT LAND

(a)   Green
Valley Land LLC is the owner (the “Parcel Owner”) of that certain parcel of
land which is adjacent to the Building containing approximately 6.5 acres and
shown on the Site Plan attached hereto as Exhibit “A” (the “Offer Parcel”).

(b)   During the
first twenty-four (24) full months after the Commencement Date (the “Offer
Period”), the Parcel Owner shall not sell the Offer Parcel without first having
given Tenant written notice (the “Offer”) of the Parcel Owner’s intention to do
so.  Such Offer shall contain the
purchase price and other terms upon which the Parcel Owner intends to so offer
the Offer Parcel to other prospective purchasers and shall constitute the
Parcel Owner’s offer to Tenant to sell the Offer Parcel for the purchase price
and upon the other terms contained in such Offer.

(c)   Tenant may
accept such Offer by written notice delivered to the Parcel Owner no later than
fourteen (14) days after Tenant’s receipt of 
the Parcel Owner’s Offer.  If
Tenant fails to so accept the Offer, the Parcel Owner

 

28

 

may sell the Offer Parcel to another prospective
purchaser on terms which are not substantially more favorable to such other
purchaser than the terms of the Offer. 
For purposes of this Lease, another offer shall be substantially more
favorable than the Offer only if the purchase price is more than ten percent
(10%) lower than the purchase price in the Offer.  If, in the Offer Period, the Parcel Owner elects to sell the
Offer Parcel to a purchaser on terms which are substantially more favorable to
such other purchaser than the terms of the Offer, the Parcel Owner must first
re-offer the Offer Parcel to Tenant on such terms.  In the event the Parcel Owner re-offers the Offer Parcel to
Tenant on such more favorable terms, Tenant shall accept, if at all, within
seven (7) days of any such re-offering.

(d)   This
Article 41 shall in no event constitute a covenant or a guarantee by Landlord
or the Parcel Owner that the Offer Parcel will become available for purchase by
Tenant at any time.

(e)   The term
“sell”, as used in this Article 41, shall mean only the actual transferring or
conveying of fee simple title to the Offer Parcel to a third party purchaser.  The term “sell” as used in this Article 41
shall not include (i) conveying the Offer Parcel to an Affiliate of Landlord
(for purposes of this Article 41, the term “Affiliate” shall mean an entity
which controls, is controlled by or is under common control with Landlord, or
any successor by merger or consolidation with Landlord), (ii) granting a
mortgage, deed of trust or similar interest in the Offer Parcel or (iii) a
mortgage or deed of trust holder’s exercising rights under its mortgage or deed
of trust, or transferring in lieu thereof.

(f)    Parcel
Owner is an affiliate of Landlord and Parcel Owner acknowledges that adequate,
good and valuable consideration exists for Parcel Owner’s obligations under
this Article 41.

(g)   This
Article 41 shall automatically expire upon expiration of the Offer Period and
shall be of no force or effect with respect to any sale occurring after the
Offer Period.

 

29

 

42.  LIMITATION ON LANDLORD’S LIABILITY

It is expressly understood and agreed by Tenant that
none of Landlord’s covenants, undertakings or agreements are made or intended
as personal covenants, and any liability for damage or breach or nonperformance
by Landlord shall be collectible only out of Landlord’s interest in the
Building and no personal liability is assumed by, nor at any time may be
asserted against, Landlord or Landlord’s partners, members, managers,
directors, officers, shareholders, agents or any of its or their heirs, legal
representatives, successors or assigns, all such liability, if any, being
expressly waived and released by Tenant.

	
   

  	
  LANDLORD:

  
	
   

  	
   

  
	
   

  	
  GREEN
  VALLEY BUILDING 12 LLC, a Delaware limited liability company

  
	
   

  	
   

  
	
   

  	
  By:
  

  	
  /s/
  Harvey J. Shein

  
	
   

  	
  Name
  (print): 

  	
  Harvey J.
  Shein

  
	
   

  	
  Title:
  

  	
  Authorized
  Member

  
	
   

  	
   

  
	
   

  	
  TENANT:

  
	
   

  	
   

  
	
   

  	
  COPART,
  INC., a California corporation

  
	
   

  	
   

  
	
   

  	
  By:
  

  	
  /s/
  Paul A. Styer

  
	
   

  	
  Name
  (print): 

  	
  Paul A.
  Styer

  
	
   

  	
  Title:
  

  	
  Secretary

  
				

 

JOINDER

 

The undersigned hereby joins in the execution and
delivery of this Lease for the sole purpose of agreeing to be bound by the
provisions of Article 41 hereof.

	
   

  	
  PARCEL OWNER:

  
	
   

  	
   

  
	
   

  	
  GREEN
  VALLEY LAND LLC,

  
	
   

  	
  a Delaware limited
  liability company

  
	
   

  	
   

  	
   

  
	
   

  	
  By:
  : 

  	
  /s/
  Harvey J. Shein

  
	
   

  	
  Name
  (print): 

  	
  Harvey J.
  Shein

  
	
   

  	
  Title:

  	
  Authorized
  Member

  
				

 

	
  EXHIBITS:

  	
   

  	
  A.

  	
  Preliminary
  Site Plan

  
	
   

  	
   

  	
  B.

  	
  Outline
  Plans and Specifications

  
	
   

  	
   

  	
  C.

  	
  Work
  Letter

  
	
   

  	
   

  	
  D.

  	
  Sample
  of Tenant’s Certificate

  
	
   

  	
   

  	
  E.

  	
  Rules
  & Regulations

  
	
   

  	
   

  	
  F.

  	
  Memorandum
  of Lease and Option to Purchase and Right of Offer

  
	
   

  	
   

  	
  G.

  	
  Purchase
  Agreement

  
	
   

  	
   

  	
  H.

  	
  Rules
  and Regulations for Use of Communications Equipment

  
	
   

  	
   

  	
  I.

  	
  Rules
  and Regulations for Use of Pad Area

  
	
   

  	
   

  	
  J.

  	
  Pro
  Forma Policy [Leasehold]

  
	
   

  	
   

  	
  K.

  	
  Pro
  Forma Policy [Purchase Option]

  
	
   

  	
   

  	
  L.

  	
  Pro
  Forma Policy [Right of Offer Option]

  

 

30

 

EXHIBIT
A

PRELIMINARY
SITE PLAN

GREEN
VALLEY CORPORATE PARK

PARCELS
1 THROUGH 4

OF
LOT 9

 

[MAP]

 

 

EXHIBIT B TO LEASE FOR

GREEN VALLEY BUILDING 12

FAIRFIELD, CALIFORNIA

 

SHELL BUILDING SPECIFICATIONS

 

The Building specifications are in addition
to drawings, including the Development Review drawings dated 10/18/01 attached
hereto and made a part hereof, and those documents that are incorporated herein
by reference as listed below:

 

	
  PERMITS
  & FEES:

  	
  All permits and fees,
  whether normal or extraordinary, related to the Building Shell and Core
  Improvements, and any improvements required to obtain City of Fairfield
  Planning approval have been included in the “shell” cost.  Permits & Fees incurred for Tenant’s
  specific improvements shall be included as part of the Tenant Improvement
  Allowance.

  
	
  STANDARD

  SITE IMPROVEMENTS:

  	
  

  DESIGN

  Three-story building utilizing concrete tilt-up construction with an EFIS
  cornice on the 3rd story in accordance with site planning and
  design criteria of the current Uniform Building Code and City of Fairfield
  Planning Guidelines (both of which are incorporated by reference hereto and
  made a part hereof).  EFIS will be
  used on the third story either as the third floor element or on the cornice
  piece, and will be used for the mechanical roof screens.

  
	
   

  	
   

  
	
   

  	
  All recommendations and
  requirements contained in the Geotechnical Investigation prepared by Lowney
  Associates dated August 24, 2001 (incorporated by reference hereto and made a
  part hereof) shall be followed.

  
	
   

  	
   

  
	
   

  	
  Landlord shall retain Lowney
  Geotechnical to provide geotechnical observation, to review final drawings,
  and to test and report on soil conditions throughout construction.  A complete record of site observations by
  Lowney Associates shall be assembled at the completion of site work and
  provided to Copart at no additional cost.

  
	
   

  	
   

  
	
   

  	
  In the event additional
  subgrade stabilization measures are required due to winter wet weather
  conditions, Landlord may, at its option, either pay said extra costs or delay
  the project for a reasonable period as is necessary to avoid the subgrade
  stabilization measures otherwise required by wet winter conditions.  Such a delay will be considered a force
  majeure delay for the purposes of the Lease.

  

 

1

 

	
   

  	
  ACREAGE AND APPROXIMATE
  BUILDING SIZE

  
	
   

  	
   

  
	
   

  	
   

  	
  Gross

  	
   

  	
  Usable

  	
   

  	
  Rentable

  
	
   

  	
  First Floor:

  	
  34,328

  	
   

  	
  27,144

  	
   

  	
  29,883

  
	
   

  	
  Second Floor:

  	
  34,328

  	
   

  	
  31,207

  	
   

  	
  34,132

  
	
   

  	
  Third Floor:

  	
  34,550

  	
   

  	
  32,160

  	
   

  	
  35,135

  
	
   

  	
  Total SF:

  	
  103,206

  	
   

  	
  90,511

  	
   

  	
  99,150

  
	
   

  	
  Total Acreage:

  	
  6.65
  acres subject to survey

  
	
   

  	
   

  	
   

  
	
   

  	
  INGRESS & EGRESS

  
	
   

  	
  Two points of ingress and
  egress shall be provided to the Building off of Business Center Drive.  A median cut shall be provided from
  Business Center Drive allowing left turns into the Building from west-bound
  traffic.  The Building may also
  include a shared drive entrance with the planned adjacent building to take
  advantage of the median cut.  The
  shared drive entrance drive will be built to its full width.

  
	
   

  	
   

  
	
   

  	
  PARKING AREA CONSTRUCTION

  
	
   

  	
  Asphalt with concrete
  curbs, concrete curb and gutter wherever storm water will collect and flow
  adjacent to curb.  Curbs will be full
  (6” above AC and to subgrade below AC), except for areas that require a bio
  swale as required by the City of Fairfield for storm water retention
  purposes.

  
	
   

  	
   

  
	
   

  	
  Striping and handicap
  signage is included.  Parking lot to
  be built per soils engineer recommendations as described in Geotechnical
  Investigation by Lowney Associates dated 8/24/01. Parking lots and drive
  isles will be 2.5” AC over 8” aggregate base rock (R-Value 5, Design Traffic
  Index of 4.0). Truck drive isle from nearest drive apron to loading area will
  be 3.5” AC over 13” aggregate base rock (R-Value 5, Design Traffic Index of
  6).  Sanitary Sewer, Water and Storm
  Drainage lines will be sized per Uniform Plumbing Code recommendations.  Testing of the soil to insure compliance
  with the soil report will be provided by Lowney Associates at Landlord’s
  expense.

  
	
   

  	
   

  
	
   

  	
  ELECTRICAL SERVICE

  
	
   

  	
  Minimum 3,000 AMP, 277/480
  Volt, three phase, four wire service.

  
	
   

  	
   

  
	
   

  	
  PARKING LOT LIGHTING

  
	
   

  	
  Designed to maintain the
  City of Fairfield security ordinance (incorporated by reference hereto and
  made a part hereof) requirement of 1-foot candle.

  
	
   

  	
   

  
	
   

  	
  PEDESTRIAN LIGHTING

  
	
   

  	
  Low lighting fixtures at
  minimum lighting levels per City of Fairfield security ordinance.

  

 

2

 

	
   

  	
  LANDSCAPING/ EXTERIOR
  PATIO

  
	
   

  	
  Landscaping and Lawn
  Sprinkler: Complete landscaping and lawn sprinkler shall be designed and
  installed per City of Fairfield requirements and in accordance with all
  recommendations and requirements contained in the Lowney Associates
  Geotechnical Investigation dated August 24, 2001. Work shall include design,
  and corresponding fine grading, seed, sod, flowers, planting, shrubbery, sprinkler
  work, and trees in accordance with Schematic Landscape Plan L-1.

  
	
   

  	
   

  
	
   

  	
  All areas shown on
  landscape plan as scored colored concrete shall be masonry pavers.

  
	
   

  	
   

  
	
   

  	
  LOADING DOCK

  
	
   

  	
  A loading dock shall be
  supplied to the building per the site plan attached as an exhibit to the
  lease agreement.

  
	
   

  	
   

  
	
  STANDARD

  BUILDING SKIN:

  	
  VISION AREAS

  Double pane 1” sealed insulated vision glass and single pane spandrel glass
  will be tinted blue with 14% coated reflective glass with aluminum mullion
  system with wallboard adapters at perimeter walls. Blue window frames will be
  painted with a high performance finish such as Kynar 500 or equal.

  
	
   

  	
   

  
	
   

  	
  WALL PANELS

  
	
   

  	
  Site Cast Concrete
  Tilt-up, integral reveals, painted finish w/3rd floor to have EIFS
  elements or accents. Wall thickness and reinforcing to meet UBC and Seismic
  Zone 4 requirements (incorporated by reference hereto and made a part
  hereof). Glass on all floors will be set back more than 6 inches from the
  face of the concrete panel to provide a shadow effect.

  
	
   

  	
   

  
	
   

  	
  ENTRANCE WINDOW-WALLS

  
	
   

  	
  Double pane “Low E” clear
  glass at entry wall and in the narrow stile entrance doors, (with concealed
  overhead closers).

  
	
   

  	
   

  
	
   

  	
  ROOFING SYSTEM

  
	
   

  	
  A Johns Manville 4-ply
  built up or equivalent roof system with materials manufacturer to support a
  fifteen (15) year roof warranty. 
  Rigid insulation under the roof with a R-19 insulation value or
  Fairfield building code minimum (incorporated by reference hereto and made a
  part hereof), whichever is better. 
  Batt insulation under the steel deck will not be used.

  
	
   

  	
   

  
	
  STANDARD

  STRUCTURAL SYSTEM:

  	
  

  ON GRADE FLOOR SYSTEM

  Minimum 5” slab on grade.  To UBC
  requirements and per soils engineer recommendations as described in
  Geotechnical Investigation by Lowney Associates Dated 8/24/01.

  

 

3

 

	
   

  	
  ELEVATED FLOOR SYSTEM

  
	
   

  	
  Steel beams and columns
  with web joists and metal deck, with concrete fill, 20 gage 2” steel deck and
  2 1/2” concrete topping, 80-psf live load and 20-psi dead partition load.
  Total 100 psf live load.  Column
  spacing will be 42’ 6”.  Joists will
  be spaced at 7’ 6”.

  
	
   

  	
   

  
	
   

  	
  Attached hereto and made a
  part hereof is a “Modified Reiher-Meister Scale”, which developer warrants is
  an accurate depiction of the vibration characteristics of the elevated floor
  system of the building at 7180 Koll Center Parkway, Pleasanton, California
  (“Representative Building”). Vibration for the building that is the subject
  of this Exhibit B will be in the in the upper end of the “slightly
  perceptible” range as measured by the “Modified Reiher-Meister Scale” and
  will have vibration characteristics that are equal to or better than that of
  the Representative Building as measured by the “Modified Reiher-Meister
  Scale”.

  
	
   

  	
   

  
	
   

  	
  Developer represents that
  the Representative Building has maximum column spacing of 40’ 2” and joists
  with maximum spacing 6’ 4”.  Developer
  represents that the spacing of the columns and joists of the building will be
  greater than that of the Representative Building, and that the quality,
  methods, and materials of the construction of the elevated floor system for
  the building will be similar to that of the Representative Building.  Attached hereto and made a part hereof is
  the opinion of Nishkian Menninger dated October 24, 2001 regarding the
  vibration characteristics of the building’s elevated floor system.

  
	
   

  	
   

  
	
   

  	
  ROOF SYSTEM

  
	
   

  	
  Insulated concrete fill
  (Mearlcrete or equal) over metal decking over open web joists.  System to meet all UBC requirements.

  
	
   

  	
   

  
	
  STANDARD

  MISCELLANEOUS:

  	
  

  EXTERIOR DOORS/INTERIOR SHELL DOORS

  Hollow metal, 3’-0” x 8’-0” per leaf typical with 16 gauge welded frame and
  16 gauge doors.

  
	
   

  	
   

  
	
   

  	
  INSULATION

  
	
   

  	
  R-11, as required,
  exterior wall insulation to be compliant with title 24 requirements, and
  drywall (screw but not taped) on the perimeter walls is included.

  
	
   

  	
   

  
	
   

  	
  FLOOR-TO-FLOOR HEIGHTS

  
	
   

  	
  Floor-to-floor dimensions:
  1st -15’-0”, 2nd & 3rd - 14’-6”

  
	
   

  	
   

  
	
   

  	
  CEILING HEIGHTS

  
	
   

  	
  First floor ceiling
  height: 10”-0”; Second & Third floor ceiling height: Minimum of 9’-0”.

  

 

4

 

	
   

  	
  CARPETING

  
	
   

  	
  Shall not have vinyl or
  waterproof backing or any other feature that would prevent it from
  “breathing”.

  
	
   

  	
   

  
	
  LOBBY:

  	
  Includes 2-story main
  lobby facing Business Center Drive and a single-story lobby facing I-80.  Both lobbies (and including the elevator
  lobby and extending to the electric closet and the washrooms on each side of
  the elevator lobby) will have 12” x 12” tile floor, w/ 6” accent base.  Both lobbies will have zolatone or vinyl
  wall covering.  The two-story lobby
  will have sheet rock ceiling soffits, and accent lighting.  28 feet of upgraded guardrail between 2nd
  floor elevator lobby and 2-story lobby. 
  No floor, wall or ceiling finishes included at the 2nd and
  3rd floor elevator lobbies.

  
	
   

  	
   

  
	
  CENTER
  STAIR:

  	
  Center Stair to be fully
  enclosed w/ standard pan filled concrete stairs w/ painted rails.  Flooring on stair to be carpeted with
  painted drywall walls and a T-bar ceiling at the 3rd floor.

  
	
   

  	
   

  
	
  STANDARD

  EXIT STAIRWAYS:

  	
  

  Pan-filled concrete stairs with painted rails. Side stairs to have painted
  walls with vinyl base only and STD T-bar ceiling.  Exit corridors from side stairs and from 1st floor
  elevator lobby to the back and side entrances to be 28 oz carpet, painted
  sheetrock walls and standard T-bar ceiling.

  
	
   

  	
   

  
	
  STANDARD

  TOILET ROOMS:

  	
  

  FLOORS

  Please assume an allowance for material & labor of $10.00 per square foot
  for the cost of ceramic mosaic tile to be installed in the bathroom
  floors.  Tile to be selected from
  Dal-Tile 12 x 12 Dura Floor or equal.

  
	
   

  	
   

  
	
   

  	
  WALLS

  
	
   

  	
  Please assume an allowance
  for material & labor of $10.00 per square foot for the cost of ceramic
  mosaic tile to be installed on the bathroom-wet walls to be height of the top
  of the toilet partitions over cement board, 5/8” water-resistant gypsum
  drywall on 3-5/8” studs to structure above. 
  3-1/2” acoustic batt insulation. 
  Accent wall painted with Benjamin Moore or equivalent.  Tile to be selected from Dal-Tile
  4 1/2 x 4 1/2 Glazed Wall Tile Price Group 1 or equal.

  
	
   

  	
   

  
	
   

  	
  ENTRY DOORS TO TENANT AND
  TOILET ROOMS

  
	
   

  	
  3’-0” x 8’-10” solid core,
  plain sliced white oak (clear finish), western integrated clear anodized
  aluminum frame, Schlage L series, dull chrome finish, concealed auto flush
  bolts for pairs.

  

 

5

 

	
   

  	
  CEILING

  
	
   

  	
  Painted smooth finish
  drywall, paint to match Benjamin Moore or equivalent.

  
	
   

  	
   

  
	
   

  	
  TOILET COMPARTMENTS

  
	
   

  	
  Floor mounted partitions
  to be global Steel Products Corp. or equivalent.

  
	
   

  	
   

  
	
   

  	
  PLUMBING FIXTURES

  
	
   

  	
  All plumbing fixtures
  shall consist of Eljer, Kohler, American Standard or equivalent quality.

  
	
   

  	
   

  
	
   

  	
  MIRRORS

  
	
   

  	
  Vision quality mirrors
  above lavatories, full width and full height to ceiling, one interior per
  toilet room.

  
	
   

  	
   

  
	
   

  	
  COUNTERTOPS

  
	
   

  	
  Countertop material shall
  be Corian.

  
	
   

  	
   

  
	
  STANDARD

  ELEVATORS AND CABS:

  	
  

  PASSENGER ELEVATOR

  
	
   

  	
  Two (2) Hydraulic, 100
  fpm, 2,500lb. Capacity elevators. Cab height: 7’-0” with polished
  stainless steel ceiling with manufacturer’s standard downlighting. Cab
  returns, rails, base and doors: brushed stainless steel. Cab floor: carpet or
  stone to match lobby. Cab walls: plastic laminate panels.

  
	
   

  	
   

  
	
   

  	
  MECHANICAL SCREEN

  
	
   

  	
  Acrylic plaster (EIFS)
  finish system or equivalent over metal decking and steel frame. Paint to
  match concrete panels. Angle bracing for supports.

  
	
   

  	
   

  
	
  HVAC
  EQUIPMENT:

  	
  HVAC

  
	
   

  	
  General System
  Description: The HVAC system shall be designed in accordance with the
  applicable ASHRAE and SMCNA design standards (both incorporated by reference
  hereto and made a part hereof).  The
  office areas shall be heated, air conditioned and ventilated through VAV
  rooftop units. A boiler system will be provided for future tenant hot water
  reheat.  These units will be sized and
  designed to meet California Title 24 requirements (incorporated by reference
  hereto and made a part hereof). 
  Exhaust shall be provided for all washrooms for a minimum system fan
  capacity of 2 cfm per square foot and at electrical floor distribution
  rooms.  Exhaust system shall include
  provisions for a future connection at each floor.  All roof-mounted mechanical equipment will be installed as base
  building items and shall be placed on the roof of the building and
  appropriately screened.  For the core,
  included items are: VAV boxes, piping, ductwork, energy management controls
  wiring, diffusers, and registers for a complete installation.  The vertical cooling ducts and horizontal
  spine of approximately 360 lineal feet of ductwork and hot water piping per
  floor shall be provided for future tenant improvement distribution.

  

 

6

 

	
   

  	
  The HVAC system will
  include rooftop package units that have electric cooling and gas heat with
  tonnage of cooling purchased for the occupancy of the entire building as part
  of the base building construction. 
  There will be three (3) rooftop units and the holes in the roof with
  steel bracing at these holes and curbs for the units are part of the shell
  cost.

  
	
   

  	
   

  
	
   

  	
  Energy Management System:
  a central energy management direct digital control system shall be installed,
  Trane Tracer system or equal. If alternate is used, it will be a branded
  system, not a clone. The control panel for the boiler is included in the
  shell price. A computerized energy management system shall be provided for
  monitoring energy consumption and corresponding energy costs, control
  interlock between exhaust fans and VAV rooftop equipment, and control of all
  mechanical equipment.

  
	
   

  	
   

  
	
  PLUMBING:

  	
  PLUMBING

  All sewer, domestic water and gas lines shall be installed per Uniform
  Building Code and Uniform Plumbing Code (both incorporated by reference hereto
  and made a part hereof). Janitor sinks shall be installed in the janitor’s
  closets on each floor. Primary system for roof drainage will be internal
  plumbing.  Back-up drainage shall be
  internally plumbed, or in the alternative, shall be overflow scuppers.

  
	
   

  	
   

  
	
  FIRE
  PROTECTION:

  	
  FIRE PROTECTION

  
	
   

  	
  Looped Fire Sprinkler
  System to be installed per code. A complete single source, multi-zone, wet
  pipe fire protection system shall comply with NFPA 13 (incorporated by
  reference hereto and made a part hereof). Sprinkler heads shall be
  semi-recessed.  The system shall be
  hydraulically calculated to provide minimum coverage for office light hazard
  occupancy of .1 over the most remote 1,500 square feet. Heads, turned up,
  will be installed in accordance with this standard. Backflow preventer,
  control valves, flow switch, electric bell, inspector’s check, fire
  department connection and associated fitting shall be furnished for a
  complete installation. The fire protection system will be able to accommodate
  a pre-action system for the Copart computer room. Any pre-action system
  shall be at Copart’s expense.

  
	
   

  	
   

  
	
   

  	
  Fire Alarm: Furnish and
  install a code-required fire alarm system for core and shell.  System would be complete and include
  monitoring of duct smoke detectors, fire sprinkler system and connected to a
  24 hour central monitoring station. 
  System would have an addressable fire control panel and be expandable.

  
	
   

  	
   

  
	
  ELECTRICAL
  SYSTEM:

  	
  ELECTRICAL SYSTEM

  
	
   

  	
  Provide a 277/480-volt,
  three phase, 4 wire, 3,000 Amp electrical service which can serve a 22
  watt/sf building load. Utility company transformers to be on grade with bus
  duct

  

 

7

 

	
   

  	
  connection of not to
  exceed 10 feet.  Utility company
  primary conduit from transformer to property line will be sized per utility
  company requirements.  The main
  electrical room will supply an underground pull section, house meter and main
  circuit breaker, one (1) 277/480, a “K-13” transformer, and one (1) 120/208-volt
  house panel for serving core elements including elevators, exterior lighting
  and HVAC equipment, all of which will be wired and ready for use.  Main electrical room to be sized to
  accommodate space for future tenant meters. 
  One (1) 4” conduit will be provided for telephone service, and two (2)
  4” conduit will extend to the public utility easement(s) for connection to
  data fiber optic service.  One (1) 4”
  conduit will extend from the emergency generator into the electric room.  The electrical room is designed to provide
  room for meters between the main service and the in-house panel. A meter for
  Copart is provided in the base building construction. A buss-duct connection
  will feed the electrical room.

  
	
   

  	
   

  
	
   

  	
  Floor Electrical
  Distribution:  One 800-amp tenant
  meter section will be included in the Main Electrical room. Feeders will be
  run to each of the electrical rooms on the 3rd and 2nd
  floor to accommodate a tenant provided a 400-amp 280/477-volt panel on each
  floor.  That panel will be sufficient
  to accommodate future tenant improvement lighting loads, tenant transformer
  and a 400-amp 120/208 panel per floor. 
  All electrical rooms will be properly ventilated.

  
	
   

  	
   

  
	
   

  	
  The building will
  establish as a standard, to be used by tenant contractor for tenant build
  out, that all tenant electrical panels shall be of one common manufacturer
  and a minimum of 42 circuits.  All
  120/208-volt power panels shall be connected through “K-13” rated
  transformers.

  
	
   

  	
   

  
	
  FLOOR
  COMMUNICATION

  DISTRIBUTION:

  	
  

  Each building floor shall be provided with a communication closet that is
  properly ventilated and contains six (6) 4-inch sleeves to accommodate fiber
  optics, communication cabling, phone wiring, computer cabling, and all other
  low voltage requirement. Provide stacked communication closets. T1 Optics to
  be provided to building by Pacific Bell.

  
	
   

  	
   

  
	
  BUILDING
  SIGNAGE:

  	
  Tenant directory signage
  shall be provided in the lobby area of the building.  Tenant shall have the right to install
  additional signage on the building at Tenant’s sole expense in conformance
  with City of Fairfield Signage Guidelines (incorporated by reference hereto
  and made a part hereof). A lighted monument sign will be supplied at the
  drive entryway which will accommodate up to four tenants.

  

 

8

 

ATTACHMENT TO

EXHIBIT B TO LEASE FOR

GREEN VALLEY BUILDING 12

FAIRFIELD, CALIFORNIA

 

 

NISHKIAN
MENNINGER

CONSULTING AND STRUCTURAL ENGINEERS SINCE
1919

 

October 24, 2001

 

 

Mr. Peter Copriviza

DEVCON CONSTRUCTION, INC.

690 Gibraltar Drive

Milpitas, CA 95035

 

Re:          Green
Valley Corporate Park

                Fairfield,
California

                NM
Job No. 7032

 

Dear Mr. Copriviza

 

Over the past several days we have been in
contact with you regarding the vibration characteristics of the proposed floor
system for the above referenced project. 
We have been requested to quantify the vibration characteristics of the
floor system of our proposed building to a building, which has been built at
7180 Koll Center Parkway in Pleasanton California.

 

This building has been chosen because the
floor construction is almost identical to the subject building.  That being steel joists manufactured by
Vulcraft  with the floor system being
steel metal deck with concrete fill. 
The primary differences between the two buildings are the joist span and
the spacing between the joists.  The
existing building has a joist span of 40 feet 2 inches and the steel joists are
spaced at 6 feet 4 inches.  The new
building will have a joist span of 42 feet 6 inches and a spacing of 7 feet 6
inches.  To determine the vibration
characteristics of the two buildings we analyzed these two floor systems using
the Design Practice to Prevent Floor Vibration as published by the American
Institute of Steel Construction.  These
results were then plotted on a graph, which is known as the Modified
Reiher-Meister Scale.  The graphs of
these two structures are very similar in nature and both of the solutions fall
within the area known as the upper half of the slightly perceptible range.  In reviewing the calculations used to graph
our results the amplitude of the two floor systems are within 7% of one another
with the proposed structure having slightly less amplitude.

 

It can be concluded from the results that
since there is less amplitude in our proposed floor system that the vibration
will be less noticeable than the floor system at Koll Center Parkway.  It is also our opinion that the vibration
characteristics of the floor system of the proposed building will be similar or
better than the existing building located at Koll Center Parkway.

 

Very truly yours,

 

	
  NISHKIAN MENNINGER

  
	
   

  
	
  /s/ Levon H. Nishkian

  	
   

  
	
  Levon H. Nishkian

  
	
  President

  

 

[ILLEGIBLE]

 

1095 Folsom Street, San Francisco, CA 94103

Tel:(415) 541-9477  Fax:(415) 543-5071

 

 

	
  NISHKIAN
  MENNINGER

  	
   

  	
   

  	
  DATE:

  	
  10/01

  
	
  SAN
  FRANCISCO

  	
   

  	
   

  	
  ENG:

  	
  L.LIAO

  

 

FLOOR
VIBRATION CALCULATIONS

 

Project:   Koll Center

 

	
  beam or joist span:

  	
   

  	
  40.00

  	
   ft

  	
  spacing:

  	
   

  	
  6.33

  	
   ft

  	
   

  	
  LL o

  	
  0.917

  	
   

  	
   

  
	
  girder span:

  	
   

  	
  27.33

  	
   ft

  	
  spacing:

  	
   

  	
  36.25

  	
   ft

  	
   

  	
  LL o  

  	
  0.327

  	
   

  	
   

  
	
  Deck depth:

  	
   

  	
  2.00 

  	
   inches

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Topping depth:

  	
   

  	
  2.50

  	
   inches

  	
   

  	
   

  	
   

  
	
  Joist or beam design live load:

  	
   

  	
  0.917

  	
   

  	
   x

  	
   

  	
  80.00

  	
   

  	
  psf =

  	
  73.40

  	
   psf

  	
   

  
	
  girder design live load:

  	
   

  	
  0.600

  	
   

  	
   x

  	
   

  	
  80.00

  	
   

  	
  psf =

  	
  48.00 

  	
   psf

  	
   

  
	
  joist design live load =

  	
   

  	
  464.5 

  	
   plf

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  girder design live load =

  	
   

  	
  1740.0 

  	
   plf

  	
   

  
	
  1 min of joist = 26.767*WII*L^3/10^6 =

  	
   

  	
  795.9 in^4

  	
   

  	
   

  
	
  1 min of girder = 26.767*WII*L^3/10^6 =

  	
   

  	
  950.8 in^4

  	
   

  	
   

  
	
   

  	
   

  	
  Deck

  	
   

  	
  % x

  	
  partition x spacing

  	
   

  	
  =

  	
   

  	
   

  
	
  joist design dead load =

  	
   

  	
  45.0

  	
   

  	
  +

  	
   

  	
  30

  	
   

  	
  20.00

  	
   

  	
  6.33

  	
   

  	
  =

  	
   

  	
  322.8 plf

  
	
  girder design dead load =

  	
   

  	
  45.0

  	
   

  	
  +

  	
   

  	
  30

  	
   

  	
  20.00

  	
   

  	
  36.25

  	
   

  	
  =

  	
   

  	
  1848.8 plf

  
	
  joist dead+live =

  	
   

  	
  787.4 

  	
   plf

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  girder dead+live =

  	
   

  	
  3588.8

  	
   plf

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  joist dead+0.1*live =

  	
   

  	
  369.3

  	
   plf

  	
  xL beam =

  	
   

  	
  14772

  	
  lb

  	
   

  
	
  girder dead+0.1*live =

  	
   

  	
  2022.8 

  	
   plf 

  	
  xL girder =

  	
   

  	
  55282

  	
  lb

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  max. deflection at joist= 5*W*L^4/384EI =

  	
  1.97 inches

  	
   

  	
   

  
	
  max. deflection at girder= 5*P*L^3/162EI =

  	
  0.90 inches

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Delta of joist = Lbm^3*1728/(96*E*?joist) =

  	
  4.99E-05 in/lb

  	
   

  	
   

  
	
  Delta of girder = Lbm^3*1728/(96*E*?girder)

  	
  1.33E-05 in/lb

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Calculating
  effective number Neff:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Effective depth of slab system de = topping + deck/2 =

  	
   

  	
  3.5 inches

  	
   

  	
   

  	
   

  	
   

  
	
  Neff = 2.97-0.0578xS/de + 2.56x10^(-8)*(Lj^/?j)^4 =

  	
   

  	
  3.423

  	
   

  	
   

  	
   

  
	
  since Neff >=?, the following condition shall be checked:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  oe/S =

  	
   

  	
  0.045077

  	
   

  	
  >

  	
   

  	
  >0.018,ok

  	
   

  	
  <0.208,ok

  
	
  Lb^4/1 =

  	
   

  	
  6.67E+07

  	
   

  	
  >

  	
   

  	
  >4.5*10^6,ok

  	
   

  	
  <2.67*10^8,ok

  
	
  Lb*12/s =

  	
   

  	
  6.319115

  	
   

  	
    >

  	
   

  	
  >2,ok

  	
   

  	
  <30,ok

  
	
  The mid-flexibility =

  	
  2.12E-05

  
	
   

  	
   

  
	
  Calculating
  maximum amplitude (Aot) of the beam:

  
	
  foundametal natural
  frequency fn = pi/2xsqr

  
	
  fn =

  	
  3.6683

  	
    hz

  	
   

  
	
  from table 3 DLF =

  	
  0.5010

  
	
  Aot =    
  (DLFxL^3/(80xExit)/Neff)=

  	
  0.00877

  	
   

  	
   

  
	
   

  
	
  Calculating
  maximum amplitude (Aot) of the girder:

  
	
  foundametal natural
  frequency fn = pi/2xsqr

  
	
  fn =

  	
   

  	
   

  	
  3.6696

  	
    hz

  	
   

  
	
  from table 3 DLF =

  	
  0.5010

  
	
  Aot =     (DLFxL^3/(80xExit)/Nett)=

  	
  0.00801

  	
   

  	
   

  
																																																												

 

 

	
  NISHKIAN
  MENNINGER

  	
   

  	
   

  	
  DATE:

  	
  10/01

  
	
  SAN
  FRANCISCO

  	
   

  	
   

  	
  ENG:

  	
  L.LIAO

  

 

FLOOR
VIBRATION CALCULATIONS

 

Project:  
Koll Center

 

	
  Calculating
  maximum amplitude (Aot) of the beam & girder:

  	
   

  	
   

  	
   

  	
   

  
	
  foundametal natural frequency fn = pi/2xsqr

  	
   

  	
   

  	
   

  	
   

  
	
  deflection of beam (dl+0.1LL)=

  	
   

  	
  0.92 inches

  	
   

  	
   

  	
   

  
	
  deflection of girder (dl+0.1LL)=

  	
   

  	
  0.51 inches

  	
   

  	
   

  	
   

  
	
  combined deflection = (de?da beam + delta girder)/1.3

  	
   

  	
  1.10

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  fn =

  	
   

  	
  2.9?43 

  	
    hz

  
	
  from table 3 DLF =

  	
  0.4960

  	
   

  	
   

  	
   

  
	
  Aot = (DLFxL^3/(80xExit)/Neff)=

  	
   

  	
   

  	
  0.00725

  	
   

  
								

 

 

[CHART]

 

 

 

Fig. A.1 Modified Reiher-Meister Scale.

 

 

	
  NISHKIAN
  MENNINGER

  	
   

  	
   

  	
  DATE:

  	
  10/01

  
	
  SAN
  FRANCISCO

  	
   

  	
   

  	
  ENG:

  	
  L.LIAO

  

 

FLOOR
VIBRATION CALCULATIONS

 

Project: 
Green valley

 

	
  beam or joist span:

  	
  42.50
  

  	
   ft

  	
  spacing:

  	
   

  	
  7.50
  ft

  	
   

  	
  LL
  ?

  	
  0.865

  	
   

  	
   

  
	
  girder span:

  	
  30.00
  

  	
   ft

  	
  spacing:

  	
   

  	
  36.25
  ft

  	
   

  	
  LL
  ?

  	
  0.250

  	
   

  	
   

  
	
  Deck depth:

  	
  2.00

  	
   inches

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Topping depth:

  	
  2.?0

  	
   inches

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Joist or beam design live load:

  	
   

  	
  0.865

  	
   

  	
  x

  	
   

  	
  80.00

  	
  psf =

  	
   

  	
  69.20
  psf

  	
   

  	
   

  	
   

  
	
  girder design live load:

  	
   

  	
  0.600

  	
   

  	
  x

  	
   

  	
  80.00

  	
  psf =

  	
   

  	
  4?.00
  psf

  	
   

  	
   

  	
   

  
	
  joist design live load =

  	
   

  	
  519.0
  

  	
    plf

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  girder design live load =

  	
   

  	
  1740.0

  	
    plf

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1 min of joist = 26.767*WII*L^3/10^? =

  	
   

  	
  1066.4 in^4

  	
   

  
	
  1 min of girder = 26.767*WII*L^3/10^6 =

  	
   

  	
  1257.5 in^4

  	
   

  
	
   

  	
   

  	
  Deck

  	
   

  	
   

  	
   

  	
  % x

  	
  partition
  x spacing

  	
   

  	
  =

  	
   

  	
   

  	
   

  
	
  joist design dead load =

  	
   

  	
  45.0

  	
   

  	
  +

  	
   

  	
  30

  	
   

  	
  20.00

  	
   

  	
  7.50

  	
   

  	
  =

  	
   

  	
  382.5
  plf

  	
   

  
	
  girder design dead load =

  	
   

  	
  45.0

  	
   

  	
  +

  	
   

  	
  30

  	
   

  	
  20.00

  	
   

  	
  36.25

  	
   

  	
  =

  	
   

  	
  1848.8
  plf

  	
   

  
	
  joist dead+live =

  	
   

  	
  901.5

  	
   plf

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  girder dead+live =

  	
   

  	
  3588.8

  	
   plf

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  joist dead+0.1*live =

  	
   

  	
  434.4

  	
   plf

  	
   

  	
   

  	
  xL beam =

  	
   

  	
  18462

  	
  lb

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  girder dead+0.1*live =

  	
   

  	
  2022.8

  	
   plf

  	
   

  	
   

  	
  xL girder =

  	
   

  	
  60683
  

  	
  lb

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  max. deflection at joist=5*w*L^4/384EI =

  	
   

  	
  2.14

  	
   inches

  
	
  max. deflection at girder=5*P*L^3/162EI =

  	
   

  	
  1.06

  	
   inches

  
	
   

  	
   

  	
   

  	
   

  
	
  Delta of joist = Lbm^3*1728/(96*E*?joist)=

  	
   

  	
  4.47E-05

  	
   in/lb

  
	
  Delta of girder = Lbm^3*1728/(96*E*?girder)

  	
   

  	
  1.33E-05

  	
   in/lb

  
	
   

  	
   

  	
   

  	
   

  
	
  Calculating
  effective number Neff:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Effective depth of slab system de = topping + deck/2 =

  	
   

  	
  3.5
  inches

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Neff = 2.97-0.0578xS/de + 2.56x10^(-8)*(Lj^/?j)^4 =

  	
   

  	
  3.108

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  since Neff >=1, the following condition shall be checked:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  de/S =

  	
   

  	
  0.038889

  	
   

  	
  >

  	
   

  	
  >0.018, ok

  	
   

  	
  <0.208, ok

  	
   

  
	
  Lb^4/1 =

  	
   

  	
  6.34E+07

  	
   

  	
  >

  	
   

  	
  >4.5*10^6, ok

  	
   

  	
  <2.57*10^8, ok

  	
   

  
	
  Lb*12/s =

  	
   

  	
  5.666667

  	
   

  	
  >

  	
   

  	
  >2, ok

  	
   

  	
  <30, ok

  	
   

  
	
  The mid-flexibility =

  	
   

  	
   

  	
  2.1E-05

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Calculating
  maximum amplitude (Aot) of the beam:

  
	
  foundametal natural
  frequency fn = pi/2xsqr

  
	
  fn =

  	
   

  	
  3.4680 

  	
   hz

  
	
  from table 3 DLF =

  	
   

  	
  0.5010

  	
   

  
	
  Aot =
         (DLFxL^3/(80xExit)/Neff)=

  	
  0.00864

  	
   

  
	
   

  
	
  Calculating
  maximum amplitude (Aot) of the girder:

  
	
  foundametal natural
  frequency fn = pi/2xsqr

  
	
  fn =

  	
  3.5025

  	
   hz

  
	
  from table 3 DLF =

  	
  0.5010

  	
   

  	
   

  
	
  Aot =
         (DLFxL^3/(80xExit)/Neff)=

  	
  0.00801

  	
   

  
																			

 

 

	
  NISHKIAN
  MENNINGER

  	
   

  	
   

  	
  DATE:

  	
  10/01

  
	
  SAN
  FRANCISCO

  	
   

  	
   

  	
  ENG:

  	
  L.LIAO

  

 

FLOOR
VIBRATION CALCULATIONS

 

Project: 
Green valley

 

	
  Calculating
  maximum amplitude (Aot) of the beam & girder:

  	
   

  	
   

  	
   

  
	
  foundametal natural frequency fn = pi/2xsqr

  	
   

  	
   

  	
   

  
	
  deflection of beam (dl+0.1LL)=

  	
   

  	
  1.03 inches

  	
   

  	
   

  	
   

  
	
  deflection of girder (dl+0.1LL)=

  	
   

  	
  0.60 inches

  	
   

  	
   

  	
   

  
	
  combined deflection = (delda beam + delta girder)/1.3

  	
   

  	
  1.25

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  fn =

  	
   

  	
  2.7924

  	
   hz 

  
	
  from table 3 DLF =

  	
   

  	
  0.4950

  	
   

  	
   

  	
   

  
	
  Aot =    
  (DLFxL^3/(80xExit)/Neff)=

  	
   

  	
  0.00724

  	
   

  
								

 

 

[CHART]

 

 

Fig. A.1 Modified Reiher-Meister Scale.

 

 

EXHIBIT
C TO LEASE FOR

GREEN
VALLEY BUILDING 12

FAIRFIELD,
CALIFORNIA

 

WORK LETTER

This
is the Work Letter referred to in the foregoing Lease (the “Lease”) wherein
COPART, INC., a California corporation (“Tenant”), has agreed to lease certain
space from GREEN VALLEY BUILDING 12 LLC, a Delaware limited liability company
(“Landlord”), in Green Valley Corporation Park.  All capitalized terms used herein shall have the respective
meanings assigned to them in the Lease or in this Agreement.

Landlord and
Tenant agree as follows:

1.             Landlord, at Landlord’s sole cost
and expense, shall provide the work necessary to construct the Building to
“Base Building” condition pursuant to Section 2 of the Lease.

2.             The material, hardware and
equipment to be incorporated into the Premises pursuant to the TI Plans (as
that term is hereinafter defined) are herein collectively referred to as the
“TI Work.”  Subject to the provisions of
this Agreement, Landlord shall proceed diligently to cause the TI Work to be
completed in accordance with the terms and conditions of the Lease and this
Work Letter.

3.             Tenant agrees to deliver to
Landlord on or before April 1, 2002 singleline space plans for the Premises and
architectural construction drawings (including (1) furniture plans showing
details of space occupancy, (2) sprinkler locations, (3) reflected ceiling
plans, (4) partition and door location plans, (5) data and telephone plans
noting any special requirements, (6) fire safety systems, (7) detail
plans, (8) finish plans and schedules, and (9) HVAC, electrical and plumbing
plans) and specifications for the TI Work to be performed in the Premises which
are acceptable to Tenant and sufficient in all respects for issuance of a building
permit.  Such plans shall be subject to
Landlord’s written approval, and if Landlord does not approve the same,
Landlord shall advise Tenant generally of the changes required in such plans,
drawings and specifications so that they will meet Landlord’s written
approval.  Tenant shall deliver to
Landlord within ten (10) days after Tenant’s receipt of such advice, revised
architectural drawings and specifications noting the changes (the “TI Plans”).   Tenant has assured itself that the TI Plans
can be delivered to Landlord as hereinabove required.  Landlord agrees to pay, or reimburse Tenant for, the cost of the
TI Plans up to an amount not to exceed ten cents ($0.10) per square foot of
Rentable Area in the Premises from Landlord’s own funds (and not the
Allowance).

4.             Landlord shall hire the Base
Building contractor (the “Contractor”) to be the general contractor for the TI
Work.  The Contractor shall
competitively bid all subcontracts over $25,000 for each item or category of items.

5.             The Commencement Date of the Lease
shall not be affected or deferred on account of any delay in substantially
completing the TI Work or its express obligations under the Lease which results
from any of the following (each, a “Tenant Delay”):

(a)           Tenant’s failure to approve the final
plans and specifications pursuant to Section 2(a) of the Lease; or

(b)           Tenant’s failure to furnish the TI
Plans for the TI Work in accordance with Paragraph 3 hereof; or

(c)           Tenant’s failure to approve the cost
of the TI Work within five (5) business days after receipt of notice thereof by
Landlord; or

(d)           Tenant’s requests for materials,
finishes or installations which have unreasonably long lead times and which may
cause delays in the performance of any work by Landlord (Landlord agrees to notify
Tenant of such long lead items upon Tenant’s request for such items); or

 

 

(e)           Tenant’s changes relating to or
affecting the “Base Building” construction or changes in the TI Work or the TI
Plans (notwithstanding Landlord’s approval of such changes); or

(f)            The performance of any work by
Tenant or any person, firm, or corporation employed by Tenant; or

(g)           Any default by Tenant or its agents.

6.             Landlord
shall provide a construction allowance (“Allowance”) of $25.00 per square foot
of the Rentable Area of the Premises for costs of the TI Work. Tenant shall pay
all costs of the TI Work in excess of the Allowance, which excess shall be paid
as the first funds to be expended for the TI Work.  Amounts due to Landlord, its architects, engineers or contractors
(including, without limitation, the Contractor) may be deducted from the
Allowance by Landlord.  Landlord may
also deduct from the Allowance costs of Tenant signage to be installed by
Landlord.  Tenant shall have no right to
any portion of the Allowance which has not been disbursed by Landlord within
six (6) months following the Commencement Date.

7.             Any work or alterations to the
Premises desired by Tenant not constituting the Work shall be subject to the
provisions of the Lease except that no Allowance or other contribution shall be
provided.

8.             Landlord will permit Tenant and
Tenant’s agents, suppliers, contractors and workmen to enter the Premises on or
about fifteen (15) days prior to substantial completion of the Work to enable
Tenant to do such things as may be required by Tenant to make the Premises
ready for Tenant’s occupancy (including installation of telephones, furniture
and fixtures), provided that Tenant and its agents, contractors, workmen, and
suppliers and their activities in the Premises and Building will not interfere
with or delay the completion of the Work to be done by Landlord and will not
interfere with other activities of Landlord or occupants of the Building.  Landlord shall have the right, on notice to
Tenant, to cause Tenant or any such agent, contractor, workman or supplier to
leave the Premises and the Building if Landlord determines that any such
interference or delay has been or may be caused.  Without limiting the foregoing, Tenant acknowledges that Landlord
may, at its discretion, bar the entry of any such agent, contractor, workman or
supplier if such entry would cause labor problems or labor disharmony at the
Building.  Tenant agrees that any such
entry into the Premises shall be at Tenant’s own risk and Landlord shall not be
liable in any way for any injury, loss or damage which may occur to any of
Tenant’s property or Tenant’s installations made in the Premises, and Tenant
agrees to indemnify and save harmless Landlord, its affiliates, beneficiaries,
partners and their respective agents from all liabilities, costs, damages, fees
and expenses (including reasonable attorney’s fees) arising out of or connected
with the activities of Tenant or its agents, contractors, suppliers or workmen
in or about the Premises.  In addition,
prior to the initial entry to the Premises by Tenant and by each contractor or
subcontractor for Tenant, Tenant shall furnish Landlord with policies of
insurance covering Landlord as an insured party with such coverages and such
amounts as Landlord may then reasonably require in order to insure Landlord
against liability for injury or death or damage to property of Landlord or its
tenants by reason of such entry and any activity or work carried on in or about
the Premises.

 

2

 

9.             It is expressly understood and
agreed by Tenant that none of Landlord’s covenants, undertakings or agreements
are made or intended as personal covenants, and any liability for damage or
breach or nonperformance by Landlord shall be collectible only out of
Landlord’s interest in the Building and no personal liability is assumed by,
nor at any time may be asserted against, Landlord or Landlord’s partners,
members, managers, directors, officers, shareholders, agents or any of its or
their heirs, legal representatives, successors or assigns, all such liability,
if any, being expressly waived and released by Tenant.

	
   

  	
  GREEN VALLEY BUILDING 12
  LLC, a Delaware limited liability company

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Harvey J. Shein

  
	
   

  	
  Name (print): 

  	
  Harvey J. Shein

  
	
   

  	
  Title:

  	
  Authorized Member

  
	
   

  	
   

  
	
   

  	
  TENANT:

  
	
   

  	
   

  
	
   

  	
  COPART, INC., a California
  corporation

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Paul A. Styer

  
	
   

  	
  Name (print): 

  	
  Paul A. Styer

  
	
   

  	
  Title: 

  	
  Secretary

  
				

 

 

3

 

 

EXHIBIT
D TO LEASE FOR

GREEN
VALLEY BUILDING 12

FAIRFIELD,
CALIFORNIA

 

TENANT’S
STATEMENT

	
   

  	
   

  	
   

  
	
  LEASE DATED:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  LANDLORD:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  TENANT:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  DEMISED PREMISES:

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

Gentlemen:

 

The undersigned
(“Tenant”), Tenant in and under the above-described Lease (“the Lease”), hereby
confirms, as of the date hereof, the following:

1.             Tenant is in full and complete
possession of the Premises demised to Tenant under the Lease (“Demised
Premises”), such as possession having been delivered by the Landlord under the
Lease and having been accepted by Tenant.

2.             The improvements and space in the
Demised Premises required to be furnished by the terms of the Lease have been
completed in all respects to the satisfaction of Tenant.

3.             All duties of an inducement nature
required of the Landlord in the Lease have been fulfilled.

4.             The Lease is in full force and
effect; there is no existing default on the part of the Landlord or Tenant or,
to the best knowledge of Tenant, on the part of Landlord, in the terms thereof;
and the Lease constitutes the entire rental agreement between Landlord and
Tenant for the Demised Premises and has not been amended, modified,
supplemented or superseded except as follows:

5.             The Tenant is not entitled to any
credit, offset or deduction in rent which is not specified in the Lease; the
Tenant does not now have or hold any claim against Landlord which might be set
off or credited against future accruing rent; and Tenant will not prepay rent
under the Lease except for current months and will not offset or withhold rent
on account of any claims against Landlord.

6.             Tenant agrees to give current or
any subsequent mortgage and or trust deed holder of the property of which the
Demised Premises is a part (“Mortgagees”), by registered mail, a copy of any
notice of default served upon Landlord by Tenant, provided that prior to such
notice Tenant has received notice of the address of such Mortgages.

7.             Tenant has received no notice of a
prior sale, transfer, assignment, hypothecation or pledge of the Lease or the
rents secured therein, except the assignment referred to in Section 6 and
pursuant to the Assignment of Rents and/or Leases (the “Assignment”), from
Landlord to (Lender) (herein called the “Assignees”).

8.             There are no actions, whether
voluntary or involuntary, pending against the Tenant under the Bankruptcy Code
of the United States or any state thereof.

9.             The term of the Lease commenced on
________________, the Rents provided in the Lease commenced to accrue on the
______ day of _________________, 200___, and the monthly rental currently due
under the Lease is $_______________.

 

 

10.           Tenant [has/has not] duly exercised
its right under Article 33 of the Lease to lease the Expansion Space.

11.           Tenant [has/has not] duly exercised
its right under Article 35 of the Lease to renew the Term of the Lease for one
or more Renewal Terms.

12.           Tenant [has/has not] duly exercised
its right under Article 36 of the Lease to purchase the Option Parcel.

13.           Tenant [has/has not] duly exercised
its right under Article 41 of the Lease to purchase the Offer Parcel.

14.           Tenant acknowledges that (Lender) has
or is making a Mortgage Loan upon the property of which the Demised Premises is
a part, and will rely hereon in connection therewith.

	
  Dated:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name (print):

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
						

 

2

 

EXHIBIT
E TO LEASE FOR

GREEN
VALLEY BUILDING 12

FAIRFIELD,
CALIFORNIA

 

RULES
AND REGULATIONS

 

RULES AND
REGULATIONS.  Tenant agrees to observe
the rights reserved for Landlord in the Lease and agrees, for itself, its
employees, agent, clients, customers, invitees and guests, to comply with the
following rules and regulations and with such reasonable modifications thereof
and additions thereto as Landlord may make for the Building.

 (a) Any sign, lettering, picture, notice, or
advertisement installed within Tenant’s Premises which is visible to the public
from within the Building shall be installed at Tenant’s cost and in such
manner, character and style as Landlord may approve in writing.  No sign, lettering, picture, notice or
advertisement shall be placed on any outside window or in any position so as to
be visible from outside the Building or from the atrium areas, if any, of the
Building.

 (b) [Intentionally Omitted].

 (c) Tenant, its customers, invitees,
licensees, and guests shall not obstruct sidewalks, entrances, passages,
courts, corridors, vestibules, halls, elevators and stairways in and about the
Building.  Tenant shall not place
objects against glass partitions or doors or windows or adjacent to any open
common space which would be unsightly from the Building’s corridors or atriums
or from the exterior of the Building, and will promptly remove the same upon
notice from Landlord.

 (d) Tenant shall not make noises, cause
disturbances, create vibrations, odors or noxious fumes or use or operate any
electrical or electronic devices or other devices that emit sound waves which
are dangerous to other tenants and occupants of the Building or that would
interfere with the operation of any device or equipment or radio or television
broadcasting or reception from or within the Building elsewhere, and shall not
place or install any projections, antenna, aerials or similar devices inside or
outside of the Premises.

 (e) Tenant shall not make any room-to-room canvass
to solicit business from other tenants in the Building, and shall exhibit, sell
or offer to sell, use, rent, or exchange any occupancy of the Premises or
service in or from the Premises unless ordinarily embraced within the Tenant’s
use of the Premises as specified in its Lease.

 (f) Tenant shall not waste electricity or
water and agrees to cooperate fully with Landlord to assure the most effective
operation of the Building, and shall refrain from attempting to adjust any
controls.  Tenant shall keep public
corridor doors closed.

 (g) Door keys for doors in the Premises will
be furnished at the commencement of the Lease by Landlord.  Tenant shall not affix additional locks on
doors and shall purchase duplicate keys only from Landlord.  When the Lease is terminated, Tenant shall
keep public corridor doors closed.

 (h) Tenant assumes full responsibility for
protecting its space from theft, robbery and pilferage, which includes keeping
doors locked and other means of entry to the Premises closed and secured.

 (i) Peddlers, solicitors and beggars shall be
reported to the office of the Building or as Landlord otherwise requests.

 (j) Tenant shall not install and operate
machinery or any mechanical devices of a nature not directly related to
Tenant’s ordinary use of the Premises without the written permission of the
Landlord.

 

 

 (k) No person or contractor not employed by
landlord shall be used to perform window washing, cleaning, decorating, repair
or her work in the Premises.

 (l) Tenant shall not, and Tenant shall not
permit or suffer anyone to:

(1) Cook in the Premises

(2) Place vending or dispensing machines of any kind in or about the
Premises;

(3) At any time sell, purchase or give away, or permit the sale,
purchase or gift of, food in any form.

However,
with prior written consent of Landlord, such activities may be permitted in
lounges or other facilities designated for this purpose.  Landlord hereby consents in principle to
Tenant’s placing vending machines in lounges or other facilities in the Premises
for the sale of unheated food and/or beverages to employees of Tenant and
consents to Tenant’s placing and use of microwave ovens in such lounges and
other facilities in the Premises.

 (m) Tenant shall not:

 (1) Use the Premises for
lodging or for any immoral or illegal purposes;

 (2) Use the Premises to engage
in the manufacture or sales of, or permit the use of, any spirituous,
fermented, intoxicating or alcoholic beverages on the Premises;

 (3) Use the Premises to engage
in the manufacture or sale of, or permit the use of, any illegal drugs on the
Premises.

 (n) In no event shall any person bring into
the Building inflammables such as gasoline, kerosene, naphtha, and benzene, or
explosives or firearms or any other article of intrinsically dangerous nature.  If by reason of the failure of Tenant to
comply with the provisions of this paragraph, any insurance not covering the
items aforesaid, Landlord shall have the option to either terminate the Lease
or to require Tenant to make immediate payment for the whole of the increased
insurance premium.

 (o) Tenant shall comply with all applicable
federal, state and municipal laws, ordinances and regulations and building
rules, and shall not directly or indirectly make any use of the Premises which
may be prohibited thereby or which shall be dangerous to person or property or
shall increase the cost of insurance or require additional insurance coverage.

 (p) If Tenant desires signal, communication,
alarm or other utility or service connection installed or changed the same
shall be made at the expense of Tenant, with approval and under direction of
Landlord.

 (q) Tenant shall comply with any and all
other rules and regulations from time to time posted in and about the common
areas of the Building or the parking area.

 (r) No awning or other projection shall be
attached to the outside walls of the Building. 
No curtains, blinds, shades or screens visible from the exterior of the
Building or visible from the exterior of the Premises, shall be attached to or
hung in, or used in connection with any window or door of the Premises without
the prior written consent of Landlord. 
Such curtains, blinds, shades screens or other fixtures must be of a
quality, type, design and color, and attached in the manner approved Landlord.

 (s) The water and wash closets, drinking
fountains and other plumbing fixtures shall not be used for any purpose other
than for which they were constructed and no sweepings, rubbish, rags, coffee
grounds or other substances shall be thrown therein.  All damages resulting from any misuse of the fixtures shall be
borne by the Tenant who, or whose servants, employees, agents, visitors or
licensees, shall have caused the same. 
No person shall waste water by interfering or tampering with the faucets
or otherwise.

 

2

 

 (t) No electric circuits for any purpose
shall be brought into the leased premises without Landlord’s written permission
specifying the manner in which same may be done.

 (u) No bicycle or other vehicle, and no dog
or other animal shall be allowed in offices, halls, corridors, or elsewhere in
the Building.

 (v) Tenant shall not throw anything out of
the door or windows, or down any passageways or elevator shafts.

 (w) All loading, unloading, receiving or
delivery of goods, supplies or disposal of garbage or refuse shall be made only
through entryways and freight elevators provided for such purposes and
indicated by Landlord.  Tenant shall be
responsible for any damage to the Building or the property of its employees or
others and injuries sustained by any person whomsoever resulting from the use
or moving of such articles in or out of the Premises, and shall make all
repairs and improvements required by Landlord or governmental authorities in
connection with the use or moving of such articles.

 (x) All safes, equipment or other heavy
articles which exceed the design loadings shall be carried in or out of the
Premises only at such time and in such manner as shall be prescribed in writing
by Landlord, and Landlord shall in all cases have the right to specify the
property position of any such safe, equipment or other heavy article, which
shall only be used by Tenant in a manner which will not interfere with or cause
damage to the Premises or the Building in which they are located, or to other
tenants or occupants of the Building. 
Tenant shall be responsible for any damage to the Building or the
property of its employees or others and injuries sustained by any person
whomsoever resulting from the use or moving of such articles in or out of the
Premises, and shall make all repairs and improvements required by Landlord or
governmental authorities in connection with the use or moving of such articles.

 (y) Tenant, its servants, employees,
customers, invitees and guests shall, when using the common parking facilities
in and around the Building, observe and obey all signs regarding fire lanes and
no parking zones, and when parking always park between the designated
lines.  Landlord reserves the right to
tow away, at the expense of the owner, any vehicle which is improperly parked
in a no parking zone.  All vehicles
shall be parked at the sole risk of the owner, and Landlord assumes no
responsibility for any damage to or loss of vehicles.  No vehicles shall be parked overnight.

 (z) At all times the Building shall be under
the dominion and control of the Building’s Managing Agent and such Managing
Agent shall control how (a) persons may enter the Building only in accordance
with Landlord’s regulations, (b) persons entering or departing from the
Building may be questioned as to their business in the Building, and the right
is reserved to require the use of an identification card or other access device
and the registering of such persons as to the hour of entry and departure,
nature of visit, and other information deemed necessary for the protection of
the Building, and (c) all entries into and departures from the Building will
take place notwithstanding, Landlord shall not be liable for any lack of
security in respect to the Building whatsoever.  Landlord will normally not enforce clauses (a), (b), and (c)
above from 7:00 a.m. to 6:00 p.m., Monday through Friday, and from 8:00 a.m. to
1:00 p.m. on Saturdays, but it reserves the right to do so or not to do so at
any time at its sole discretion.  In
case of invasion, mob, riot, public excitement, or other commotion, Landlord
reserves the right to prevent access to the Building during the continuance of
the same by closing the doors or otherwise, for the safety of the tenants or
the protection of the Building and the property therein.  Landlord shall in no case be liable for
damages for any error or other action taken with regard to the admission to or
exclusion from the Building of any person.

 (aa) Landlord reserves the right at any time
and from time-to-time to rescind, alter or waive, in whole or in part, any of
these Rules and Regulations when it is deemed necessary, desirable, or proper,
in Landlord’s judgment, for its best interest or for the best interest of the tenants
of the Building.

 (bb) In the event that there is a conflict
between these Rules and Regulations and the Lease, the provisions of the Lease
shall take precedence and control, but these Rules shall be interpreted so as
to be consistent with the terms of the Lease to the extent such interpretation
is reasonable.

 

3

 

EXHIBIT
F TO LEASE FOR

GREEN
VALLEY BUILDING 12

FAIRFIELD,
CALIFORNIA

 

RECORDING
REQUESTED BY

AND WHEN
RECORDED MAIL TO:

 

 

 

 

 

 

	
   

  
	
  Space Above This Line For Recorder’s Use Only

  

 

MEMORANDUM OF LEASE AND OPTIONS TO PURCHASE AND RIGHT OF
OFFER

 

THIS MEMORANDUM OF
LEASE AND OPTIONS TO PURCHASE (“Memorandum of Lease”) is made and entered into by and
between Green Valley Building 12 LLC, a Delaware limited liability company (“Landlord”), and
Copart, Inc., a California corporation (“Tenant”).

Lease:  Landlord leases to Tenant, and Tenant leases from Landlord, that
certain approximately 69,267 square feet of Rentable Area on the 2nd and 3rd
floors (“Premises”)
of that certain commercial office building to be located in Green Valley
Corporate Park in the City of Fairfield, County of Solano, State of California
(“Building”)
on the land more particularly described in the attached Exhibit “A”.  Said land and Building are collectively
referred to herein as the “Property”.  The Lease of the Premises is on all of
the terms and conditions set forth in that certain written lease agreement
dated November ___, 2001 (“Lease”)
between Landlord and
Tenant,
which is incorporated in this Memorandum of Lease by reference.  Landlord also grants to Tenant options to
extend the term of the Lease,
options to purchase the Property,
and a Right of Offer Regarding Adjacent Land with respect to the sale of that
certain real property more particularly described in the attached Exhibit “B”
(the “Offer Parcel”),
on the terms, and subject to the provisions of the Lease.

Term:  The initial term of this Lease (“Term”) shall be for a
period of ten (10) years plus the partial month, if any, immediately following
the Commencement Date of
the Lease.

Renewal
Options:  Tenant shall have
three options to renew the Term
for five (5) years each, for a total renewal period of up to fifteen (15)
years.

Expansion
Options:  Tenant shall have the
option to expand the Premises
on the terms, and subject to the provisions, of Article 33 of the Lease.

First
Option to Purchase:  Tenant has the option
(“First Option”)
to purchase the Property
on the terms, and subject to the provisions, of Article 36 of the Lease, which may be
exercised only during the period commencing on the Effective Date of the
Lease and
ending on the date which is sixty (60) days prior to the Lease Commencement Date,
on the terms, and subject to the provisions of the Purchase Agreement attached
to the Lease as
Exhibit G.

Second
Option to Purchase:  Tenant has the option
(“Second Option”)to
purchase the Property on
the terms, and subject to the provisions of Article 36 of the Lease, which may be
exercised only during the period starting on the Effective Date of the Lease and ending on
the last day of the tenth month of the Lease Term, on the terms, and subject to the
provisions of the Purchase
Agreement attached to the Lease as Exhibit G.

Third
Option to Purchase:  Tenant has the option
(“Third Option”)
to purchase the Property
on the terms, and subject to the provisions of Article 36 of the
Lease,
which may be exercised only during the period commencing on the Effective Date of
this Lease and
ending on the last day of the twelfth (12th) month of the Lease Term, on the
terms, and subject to the provisions of the Purchase Agreement attached to the Lease as Exhibit G.

 

 

Right
of Offer:  Tenant has a right of
offer with respect to the sale of the Offer Parcel on the terms, and subject to the
provisions of Article 41 of the Lease, on or before the date which is twenty-four (24)
full calendar months after the Commencement Date of the Lease.

Date
of Term Commencement: 
The Term of
the Lease
shall commence on a date evidenced by a Commencement Date Memorandum (“Commencement Date Memorandum”)
which shall be executed by Landlord
and Tenant
and recorded in the records of the County Recorder of Solano County,
California.  If said Commencement Date Memorandum
is not recorded within a period of two (2) years after the final execution date
of this Memorandum of
Lease, this Memorandum
of Lease shall terminate on said date and be of no further force
or effect.

Assignment:  Tenant may assign Tenant’s rights and
obligations under the Lease
on the terms, and subject to the provisions, of Article 15 of
the Lease,
provided that no such assignment shall release Tenant of its obligations under
the Lease.

Governing
Law:  This Memorandum of Lease and
the Lease
are governed by the laws of the State of California.

Exhibits:  All Exhibits attached to this Memorandum of Lease,
and referenced herein, are incorporated herein by reference.

No
Modification:  This Memorandum of Lease
does not modify or amend the provisions of the Lease.

Release;
Partial Release:  Tenant hereby covenants
and agrees to execute such further instruments or assurances as Landlord or Parcel Owner may
reasonably request to evidence or confirm changes to this Memorandum of Lease,
including, without limitation, confirmation of the expiration or termination of
any of the rights referenced in this Memorandum of Lease.  Tenant shall indemnify, defend and hold Landlord and the Parcel Owner harmless
from and against all loss, damage, cost and expense (including reasonable
attorney’s fees and court costs) arising from Tenant’s breach of the foregoing
covenant.

IN WITNESS
WHEREOF, the parties have executed this Memorandum of Lease as of the dates
hereinbelow set forth.

	
  LANDLORD:

  	
   

  	
  TENANT:

  
	
   

  	
   

  	
   

  
	
  GREEN
  VALLEY BUILDING 12 LLC,

  	
   

  	
  COPART,
  INC., a California corporation

  
	
  a Delaware limited
  liability company

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By: 

  	
   

  	
   

  	
  By: 

  	
   

  
	
  Its: 

  	
   

  	
   

  	
  Its: 

  	
   

  
	
  Dated:

  	
   

  	
  , 2001

  	
   

  	
  Dated:

  	
   

  	
  , 2001

  
							

 

 

2

 

JOINDER

 

The undersigned is
the owner of the Offer
Parcel and joins in the execution and delivery of this
Memorandum of Lease for the sole purpose of subjecting the Offer Parcel to the
provisions of Article 41 of the Lease.

	
   

  	
  PARCEL
  OWNER:

  
	
   

  	
  GREEN
  VALLEY LAND LLC,

  
	
   

  	
  a Delaware limited
  liability company

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name (print): 

  	
   

  
	
   

  	
  Title:

  	
  Authorized Member

  	 

					

 

THIS DOCUMENT MUST BE EXECUTED IN THE PRESENCE OF A NOTARY
PUBLIC

 

3

 

 

	
  STATE OF

  	
   

  	
  )

  	
   

  
	
   

  	
   

  	
  )

  	
  SS.

  
	
  COUNTY OF 

  	
   

  	
  )

  	
   

  

 

 

On
____________________, before me ______________________________, personally
appeared ____________________________, personally known to me (or proved to me
on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they
executed the same in his/her/their authorized capacity(ies), and that by
his/her/their signature(s) on the instrument the person(s), or the entity upon
behalf of which the person(s) acted, executed the instrument.

WITNESS my hand and official seal.

 

	
  NOTARY SEAL

  	
   

  	
   

  
	
   

  	
   

  	
  Notary Public

  

 

	
  STATE OF

  	
   

  	
  )

  	
   

  
	
   

  	
   

  	
  )

  	
  SS.

  
	
  COUNTY OF 

  	
   

  	
  )

  	
   

  

 

 

On
____________________, before me ______________________________, personally
appeared ________________________________________________, personally known to
me (or proved to me on the basis of satisfactory evidence) to be the person(s)
whose name(s) is/are subscribed to the within instrument and acknowledged to me
that he/she/they executed the same in his/her/their authorized capacity(ies),
and that by his/her/their signature(s) on the instrument the person(s), or the
entity upon behalf of which the person(s) acted, executed the instrument.

WITNESS my hand and official seal.

 

	
  NOTARY SEAL

  	
   

  	
   

  
	
   

  	
   

  	
  Notary Public

  

 

	
  STATE OF

  	
   

  	
  )

  	
   

  
	
   

  	
   

  	
  )

  	
  SS.

  
	
  COUNTY OF 

  	
   

  	
  )

  	
   

  

 

 

On
____________________, before me ______________________________, personally
appeared ________________________________________________, personally known to
me (or proved to me on the basis of satisfactory evidence) to be the person(s)
whose name(s) is/are subscribed to the within instrument and acknowledged to me
that he/she/they executed the same in his/her/their authorized capacity(ies),
and that by his/her/their signature(s) on the instrument the person(s), or the
entity upon behalf of which the person(s) acted, executed the instrument.

WITNESS my hand and official seal.

 

	
  NOTARY SEAL

  	
   

  	
   

  
	
   

  	
   

  	
  Notary Public

  

 

4

 

EXHIBIT
G TO LEASE FOR

GREEN
VALLEY BUILDING 12

FAIRFIELD,
CALIFORNIA

 

PURCHASE
AGREEMENT

 

THIS PURCHASE AGREEMENT (“Agreement”) is entered into effective the ___
day of ______, 20__ (the “Effective Date”), between,
________________________________ (“Seller”), and Copart, Inc., a California
corporation (“Purchaser”).

 

Recitals

 

A.            Seller is the owner of that certain real property,
together with the improvements, leases, and appurtenances associated therewith,
legally described on Exhibit A attached hereto (the “Property”).

 B.           Purchaser is the
tenant and Seller is the landlord under that certain Office Lease dated
______________, 2001 (referred to herein, collectively with any amendments
thereto, as the “Lease”).  Capitalized
terms which are used herein and defined in the Lease shall have the meanings
given in the Lease.

C.            By exercise of those certain rights under Section 36 of
the Lease, Seller is now obligated to sell and Purchaser is now obligated to
purchase the Property on the terms and conditions in this Agreement.

FOR GOOD AND VALUABLE CONSIDERATION, the receipt and adequacy of which
are acknowledged, the parties agree as follows:

 

1.             SALE AND PURCHASE; ESCROW

 

1.1           Purchase and
Sale. Purchaser agrees to purchase the Property on the terms and conditions
set forth in this Agreement, and Seller agrees to sell the Property to
Purchaser on the terms and conditions set forth in this Agreement.

 

1.2           Purchase Price.  The purchase price for the Property
(“Purchase Price”) shall be a sum equal to:

 

1.2.1        One Hundred Sixty-Two
and 00/100 Dollars ($162.00) multiplied by the number of square feet of Gross
Measured Area (as hereinafter defined) contained in the Building if the
Property is being purchased pursuant to the First Option under the Lease less a
sum in the amount by which Twenty-Five Dollars ($25.00) per square foot of
Rentable Area in the Building exceeds the amount per square foot of Rentable
Area in the Building (up to Twenty-Five Dollars ($25.00) per square foot of
Rentable Area) which Landlord documents that Landlord has incurred and paid for
tenant improvements in the Building, plus an amount equal to the unamortized
balance of Other Lease Costs (as hereinafter defined), amortized evenly over
the initial term of the applicable Other Lease.  For purposes hereof, “Other Lease Costs” shall mean and include
tenant improvement costs actually paid by Landlord relating directly to an
Other Lease as permitted by the Lease, but only to the extent such tenant
improvement costs actually paid by Landlord exceed the sum of  Twenty-Five Dollars ($25.00) per square foot
of Rentable Area contained in the leased premises under such Other Lease, plus
the actual and reasonable out-of-pocket expenses actually paid by Landlord in
connection with each such Other Lease for brokerage commissions, space planning
and legal expenses (excluding penalties and late fees arising from late payment
thereof); or

 

1.2.2        One Hundred
Sixty-Four and 00/100 Dollars ($164.00) multiplied by the number of square feet
of Gross Measured Area contained in the Building if the Property is being
purchased pursuant to the Second Option under the Lease less a sum in the
amount by which Twenty-Five Dollars ($25.00) per square foot of

 

 

Rentable Area in the Building exceeds the amount per square foot of Rentable
Area in the Building (up to Twenty-Five Dollars ($25.00) per square foot of
Rentable Area) which Landlord documents that Landlord has incurred and paid for
tenant improvements in the Building, plus an amount equal to the unamortized
balance of Other Lease Costs (as hereinafter defined), amortized evenly over
the initial term of the applicable Other Lease.  For purposes hereof, “Other Lease Costs” shall mean and include
tenant improvement costs actually paid by Landlord relating directly to an
Other Lease as permitted by the Lease, but only to the extent such tenant
improvement costs actually paid by Landlord exceed the sum of  Twenty-Five Dollars ($25.00) per square foot
of Rentable Area contained in the leased premises under such Other Lease, plus
the actual and reasonable out-of-pocket expenses actually paid by Landlord in
connection with each such Other Lease for brokerage commissions, space planning
and legal expenses (excluding penalties and late fees arising from late payment
thereof); or

 

1.2.3        One Hundred
Fifty-Nine and 00/100 Dollars ($159.00) multiplied by the number of square feet
of Gross Measured Area contained in the Building if the Property is being
purchased pursuant to the Third Option under the Lease less a sum in the amount
by which Twenty-Five Dollars ($25.00) per square foot of Rentable Area in the
Building exceeds the amount per square foot of Rentable Area in the Building
(up to Twenty-Five Dollars ($25.00) per square foot of Rentable Area) which
Landlord documents that Landlord has incurred and paid for tenant improvements
in the Building, plus an amount equal to the unamortized balance of Other Lease
Costs (as hereinafter defined), amortized evenly over the initial term of the
applicable Other Lease.  For purposes
hereof, “Other Lease Costs” shall mean and include tenant improvement costs
actually paid by Landlord relating directly to an Other Lease as permitted by
the Lease, but only to the extent such tenant improvement costs actually paid
by Landlord exceed the sum of  Twenty-Five
Dollars ($25.00) per square foot of Rentable Area contained in the leased
premises under such Other Lease, plus the actual and reasonable out-of-pocket
expenses actually paid by Landlord in connection with each such Other Lease for
brokerage commissions, space planning and legal expenses (excluding penalties
and late fees arising from late payment thereof).

 

1.3           Payment of
Purchase Price. The Purchase Price shall be paid by Purchaser to Seller as
follows:

 

1.3.1        Contemporaneously
with the execution of this Agreement by Seller, Purchaser shall deposit into
Escrow (as such term is defined in Paragraph 1.4) in cash or by certified or
cashier’s check made payable to Escrow Holder (as such term is defined in
Paragraph 1.4) the sum equal to One Hundred Thousand Dollars ($100,000.00) (the
“Deposit”) in immediately available funds as a deposit against Purchase Price.
Such Deposit shall be held in an interest bearing account with interest
accruing for the benefit of Purchaser until Close of Escrow (as such term is
defined in Section 5.1).

 

1.3.2        The Deposit and the
balance of the Purchase Price shall be paid by Purchaser to Seller in cash or
other immediately available funds through on Close of Escrow.

 

1.4           Escrow.  To accomplish the sale and transfer of the
Property, the parties will establish an escrow (the “Escrow”) with First
American Title Insurance Company, ___________________,  Escrow Officer; telephone (916) 920-3100
(Escrow Holder).  If the Escrow Holder
is unwilling or unable to perform, Seller shall designate another Escrow
Holder.  Promptly following the
Effective Date, the parties shall deposit with Escrow Holder a copy of this
Agreement and each party will execute instructions to Escrow Holder that are
consistent with this Agreement within five (5) days after the Effective Date.
The Closing will occur at the offices of Escrow Holder, or at any other place
and time mutually agreed on by the parties.

 

1.5           Seller’s Remedies.
IN THE EVENT THE SALE OF THE PROPERTY AS CONTEMPLATED BY THIS AGREEMENT IS NOT
CONSUMMATED BECAUSE OF A  DEFAULT BY
PURCHASER, SELLER SHALL BE ENTITLED TO COMPENSATION FOR SUCH DETRIMENT;
HOWEVER, IT IS EXTREMELY DIFFICULT AND IMPRACTICAL TO ASCERTAIN THE EXTENT OF
THE DETRIMENT AND, TO AVOID

 

2

 

THIS PROBLEM, PURCHASER AND SELLER AGREE THAT IF THIS TRANSACTION IS
NOT CONSUMMATED BECAUSE OF A DEFAULT BY PURCHASER, SELLER SHALL BE ENTITLED TO
RECOVER FROM PURCHASER LIQUIDATED DAMAGES IN THE AMOUNT OF THE PURCHASER’S
DEPOSIT, PLUS ANY AND ALL ACCRUED INTEREST THEREON.  SAID AMOUNT HAS BEEN AGREED UPON, AFTER NEGOTIATION, AS THE
PARTIES’ BEST ESTIMATE OF SELLER’S DAMAGES IN THE EVENT OF A DEFAULT BY
PURCHASER UNDER THIS AGREEMENT. 
PURCHASER AND SELLER AGREE THAT THE SUM STATED HEREINABOVE AS AND FOR
LIQUIDATED DAMAGES SHALL BE IN LIEU OF ANY OTHER RELIEF TO WHICH SELLER MIGHT
OTHERWISE BE ENTITLED BY VIRTUE OF THIS AGREEMENT OR BY OPERATION OF LAW AND
SELLER WAIVES ANY AND ALL OTHER REMEDIES TO WHICH IT MAY OTHERWISE BE ENTITLED;
PROVIDED, HOWEVER, THE FOREGOING LIMITATION SHALL NOT APPLY OR LIMIT ANY OF
SELLER’S RIGHTS AND REMEDIES UNDER THE LEASE, WHICH LEASE AND TERMS SHALL
REMAIN IN FULL FORCE AND EFFECT. 
PAYMENT OF LIQUIDATED DAMAGES AS SET FORTH IN THIS PARAGRAPH 1.5 IS NOT
INTENDED AS A FORFEITURE OR PENALTY WITHIN THE MEANING OF CALIFORNIA CIVIL CODE
SECTIONS 3275 OR 3369, BUT INSTEAD, IS INTENDED TO CONSTITUTE LIQUIDATED
DAMAGES TO SELLER PURSUANT TO SECTIONS 1671, 1676 AND 1677 OF THE CALIFORNIA
CIVIL CODE.  THE PARTIES HAVE FREELY NEGOTIATED
THE FOREGOING LIQUIDATED DAMAGES PROVISION IN GOOD FAITH AND AGREE AND
ACKNOWLEDGE THAT SUCH DAMAGES ARE A REASONABLE ESTIMATE OF THE DAMAGES THAT
WOULD BE REALIZED BY SELLER.   
PURCHASER AND SELLER SPECIFICALLY ACKNOWLEDGE THE ACCURACY OF THE INFORMATION
CONTAINED IN THIS PARAGRAPH AND THEIR AGREEMENT TO THE PROVISIONS OF THIS
PARAGRAPH BY PLACING THEIR INITIALS HERE:

 

	
  SELLER:

  	
   

  	
   

  	
  PURCHASER:

  	
   

  	
   

  

 

1.6           Purchaser’s
Remedies. IN THE EVENT THE SALE OF THE PROPERTY AS CONTEMPLATED BY THIS
AGREEMENT IS NOT CONSUMMATED BECAUSE OF A 
DEFAULT BY SELLER, PURCHASER SHALL BE ENTITLED TO THE RETURN OF THE
DEPOSIT AND ALL INTEREST ACCRUED THEREON WHILE IN ESCROW AND SHALL HAVE THE
ADDITIONAL RIGHT TO PURSUE, FIRST, THE SPECIFIC PERFORMANCE OF THIS AGREEMENT,
AND SECOND, IF THROUGH NO FAULT OF PURCHASER, THE RIGHT TO SPECIFIC PERFORMANCE
OF THIS AGREEMENT IS NOT AVAILABLE TO PURCHASER, THE RIGHT TO RECOVER FROM
SELLER DAMAGES AS PERMITTED BY CALIFORNIA LAW; PROVIDED, HOWEVER, THE FOREGOING
LIMITATION SHALL NOT APPLY OR LIMIT ANY OF PURCHASER’S RIGHTS AND REMEDIES
UNDER THE LEASE (OTHER THAN ARTICLE 36 THEREOF), WHICH LEASE AND TERMS SHALL
REMAIN IN FULL FORCE AND EFFECT.  THE
PARTIES HAVE FREELY NEGOTIATED THE FOREGOING LIMITATION ON REMEDIES IN GOOD
FAITH.  PURCHASER AND SELLER
SPECIFICALLY ACKNOWLEDGE THE ACCURACY OF THE INFORMATION CONTAINED IN THIS
PARAGRAPH AND THEIR AGREEMENT TO THE PROVISIONS OF THIS PARAGRAPH BY PLACING
THEIR INITIALS HERE:

 

	
  SELLER:

  	
   

  	
   

  	
  PURCHASER:

  	
   

  	
   

  

 

2.             TITLE, SURVEY AND ASSIGNED CONTRACTS

 

2.1           Title to the
Property shall be conveyed by Seller to Purchaser by grant deed (the “Deed”),
subject to:  (i) liens to secure payment
of real estate taxes and assessments not delinquent; (ii) those exceptions
contained in the Pro Forma American Land Title Association Owner’s Extended
Policy of Title Insurance attached as Exhibit “K” to the Lease, as updated as
of the date on which the condition set forth in Section 1C of the Lease has
been satisfied, has been waived by Tenant or has expired, whichever is first to
occur (the “Updated Pro Forma Policy”); (iii) rights of Purchaser under the
Lease and rights of tenants under any “Other Leases” (as defined in Article 33
of the Lease),

 

3

 

as tenants only, provided that no tenant under any such Other Lease may
be granted or have any right to purchase the Property; (iv) applicable zoning
and use laws, ordinances, rules and regulations of any municipality, township,
county, state or other governmental agency or authority; (v) any exceptions or
matters created by, through or under Purchaser, its agents, employees or
representatives; and (vi) all exceptions or matters approved or waived by Buyer
as herein provided (collectively “Approved Exceptions”).

 

2.2           Seller shall cause
to be delivered to Purchaser not later than thirty (30) days prior to the
Closing Deadline (as hereinafter defined) a preliminary report of title issued
by the Title Company in favor of Purchaser, covering the Property (the “Title
Report”).  Purchaser shall have ten (10)
days from receipt of the Title Report to notify Seller in writing of any
objections Purchaser has to any matters shown or referred to in the Title
Report, other than the Approved Exceptions. 
Seller shall have thirty (30) days from receipt of such notice to cure
such objections, except that monetary liens which are typically removed as a
part of the Close of Escrow shall be removed, or, so long as the Title Company
is willing to insure both Purchaser and Purchaser’s lender, if any, that such
liens will not be collected out of or enforced against the Property, paid and
discharged, at and as a part of the Close of Escrow (and released subsequent
thereto).  Any such matter in the Title
Report which Purchaser does not object to prior to the expiration of said ten
(10) day period shall be deemed waived by Purchaser and shall be deemed to be a
permitted exception to the status of Seller’s title and shall be included in
any reference to the “Approved Exceptions” under this Agreement.  Seller shall use reasonable efforts in
attempting to cure the objections to title to the Property, however, Seller is
under no obligation to so cure such objections (other than exceptions created
by Seller in violation of Section 2.6 below). 
In the event Seller has not so cured the title objections prior to the
expiration of said thirty (30) day period (except for monetary liens and other
matters to be removed at Close of Escrow as aforesaid), Purchaser may, at its
option, by notice given within five (5) days after the expiration of such
thirty (30) day period, terminate this Agreement, or Purchaser may waive any
objections that Seller has not so cured and take title as it then is, without
any right of deduction or offset in the Purchase Price, and this Agreement shall
continue in full force and effect. 
Failure of Purchaser to give such notice of termination to Seller within
such time shall be deemed a waiver of any such title objections not so cured.  In the event Purchaser elects to terminate
this Agreement as a result of Seller’s failure to so cure such title
objections, the parties hereto shall have no further obligations to one
another, and the Deposit and income thereon shall be promptly returned to
Purchaser.

 

2.3           Seller shall cause
to be delivered to Purchaser not later than thirty (30) days prior to the
Closing Deadline, at Seller’s sole cost, a survey of the Property certified to
Purchaser and the Title Company which is sufficient for the title insurer to
issue “extended coverage” over the general survey exceptions in the Owner’s
Policy.

 

2.4           Seller shall assign
to Purchaser upon Close of Escrow, if assignable, all existing service and
other agreements which affect the Property, provided that such assignment will
not result in a breach or default under the applicable agreement, may be
completed without payment of any transfer fee or penalty and shall each be
terminable by Purchaser, without penalty or charge, on no more than twelve (12)
months’ prior notice (or, with respect to service and other agreements relating
to the elevator and/or HVAC systems serving the Property, on no more than
thirty-six (36) months’ prior notice) (hereinafter collectively called the
“Assigned Existing Agreements”), which assignment of existing agreements shall
be in the form attached as Exhibit “D” hereto and the Assigned Existing
Agreements shall be listed therein.  All
Assigned Existing Agreements shall be bona fide, arms-length agreements with
third parties which are not affiliates of Seller.  The management agreement for the Property shall be terminated at
the Close of Escrow and shall not be assigned to Purchaser. Seller shall also
assign to Purchaser upon Close of Escrow the Lease and any Other Leases.

 

2.5           Seller and Purchaser
shall execute and deliver an agreement (the “Assignment of Leases”), in the
form attached hereto as Exhibit “C” wherein, among other things, the Seller
shall assign to Purchaser all of the Seller’s rights and remedies, and the
Purchaser shall assume the obligations, under the Lease and any Other Lease.  Seller and Purchaser shall also execute and
deliver an agreement (the “Assignment of Contracts”) in the form attached
hereto as Exhibit “D” wherein, among other things, the Seller shall assign to
Purchaser all of the Seller’s

 

4

 

rights and remedies, and the Purchaser shall assume the obligations,
under the “Agreements”, as defined therein. 
The obligations to be assumed by Purchaser under the Assignment of
Leases and the Assignment of Contracts shall include, without limitation,
payment when due of all Other Lease Costs and all tenant allowances under the
Lease and any Other Leases which are unpaid as of the Close of Escrow.  Seller agrees to pay Other Lease Costs as
they become due and payable.

 

2.6           Seller agrees that
it shall not grant any interest in the Property after the date of the Lease,
without the prior approval of Purchaser, except for: (i) monetary liens which
are typically removed and/or paid and discharged as a part of the Close of
Escrow provided that Seller shall not encumber the Property with mortgage
financing in an amount greater than the Purchase Price or which contains a
prohibition against prepayment, (ii) the Declaration of Protective Covenants
and Conditions for Green Valley Corporate Park in the form delivered to
Purchaser prior to the execution of the Lease, (iii) Other Leases, (iv) water,
sewer, telecommunications and/or utility easements located within building
and/or parking setback areas of the Property, (v) water, sewer, telecommunications
and/or utility easements serving the Building, (vi) a joint access drive to
serve the Building and the adjoining property, (vii) a Property Maintenance
Agreement in the form delivered to Purchaser prior to execution of the Lease,
and (viii) encumbrances which Seller is compelled by governmental authorities
to record against the Property.

 

3.             PURCHASER’S CONDITIONS PRECEDENT TO CLOSING

3.1           Purchaser’s
Conditions Precedent to Closing. 
Purchaser’s obligation to purchase the Property from Seller is conditioned
on the following conditions precedent (which conditions may only be waived by
Purchaser):

 

3.1.1        The receipt by
Purchaser on or before Close of Escrow, through Escrow, of evidence that First
American Title Insurance Company (the “Title Company”) is ready, willing, and
unconditionally able to issue and deliver to Purchaser, upon payment of Title
Company’s regularly scheduled premium, an American Land Title Association
Extended Form Owner’s Policy of Title Insurance, in the form of the Updated Pro
Forma Policy, in the face amount of the Purchase Price, subject only to
Approved Exceptions (“Owner’s Policy”).

 

3.1.2        The receipt by
Purchaser from the each of the Other Tenants in the Property of an Estoppel
Certificate in the general form of the Tenant’s Statement which Purchaser is
required to deliver to Seller under the Lease, from which Purchaser can confirm
that the Other Leases provided to Purchaser by Seller pursuant to the
provisions of paragraph 2.5 of this Agreement have not been modified, and are in
full force and effect (“Estoppel Certificates”).  Seller shall be responsible for requesting and using reasonable
efforts to obtain the described Estoppel Certificates from each of the tenants
in the Property.

 

3.1.3        Compliance by Seller,
and at Close of Escrow, Seller being in compliance with each covenant in this
Agreement in all material respects, and each of the warranties of Seller in
this Agreement being true in all material respects.

 

3.2           Seller’s
Conditions Precedent to Closing. 
Seller’s obligation to sell the Property to Purchaser is conditioned on
(which condition may only be waived by Seller), compliance by Purchaser, and at
Close of Escrow, Purchaser being in compliance with each covenant in this
Agreement in all material respects.

 

3.3           Good Faith
Efforts.  Purchaser and Seller
covenant to act in good faith and use due diligence to satisfy all conditions
for which they are responsible.

 

4.             LIMITED SELLER WARRANTY

 

4.1           “As-Is” Sale.
Except as those set forth in this Agreement, and as a material inducement to
cause Seller to enter into this Agreement, Purchaser specifically represents,
acknowledges, and agrees that Seller  is
selling, and Purchaser is purchasing the Property “as-is with all faults”, and
that Purchaser is not relying on any representations or warranties of any kind
whatsoever, express or implied, from Seller, its agents, or brokers, as to any
matters concerning the Property.

 

5

 

 

4.2           Purchaser’s
Release of Seller.   Notwithstanding
any term or provision of this Agreement to the contrary, Seller shall not be
liable for the breach of any representation or warranty set forth in this
Agreement, or otherwise, to the extent that such breach relates to a factual
matter pertaining to the Property of which Purchaser has acquired actual
knowledge in the course of occupying the Property or its due diligence
hereunder if Purchaser proceeds to Close of Escrow notwithstanding such
knowledge.

 

4.3           Survival.  The representations, warranties, waivers,
releases and covenants of this Section 4 shall survive the Closing of the
Escrow and the delivery of the Grant Deed.

 

5.             CLOSING

5.1           Closing Deadline.  The Grant Deed shall be recorded and the
Property transferred from Seller to Purchaser concurrently with the payment of
the Purchase Price to Seller (“Close of Escrow”) on or before a date determined
as follows (“Closing Deadline”):

 

5.1.1        The Closing Deadline
for the First Option shall be the tenth business day after the Commencement
Date of the Lease.

 

5.1.2        The Closing Deadline
for the Second Option shall be no sooner than ten (10) days after the
Commencement Date of the Lease, and no later than sixty (60) calendar days
after the date of execution of this Agreement by Purchaser in accordance with
Section 36(b) of the Lease.

 

5.1.3        The Closing Deadline
for the Third Option shall be no sooner than one (1) year after the
Commencement Date under the Lease and, no later than sixty (60) calendar days
after the date of execution of this Agreement by Purchaser in accordance with
Section 36(c) of the Lease.

 

5.2           Close of Escrow.  When Title Company has notified Escrow
Holder that it is prepared (subject only to recordation of the Grant Deed and
any other instruments to be recorded) to issue the Owner’s Policy and when Escrow
Holder is otherwise prepared to comply with these escrow instructions, it shall
close Escrow by:

 

5.2.1        Recording the Grant
Deed and any other instruments to be recorded;

 

5.2.2        Delivering to Seller
the Purchase Price, less any amount due from Seller pursuant to this Agreement,
by wire transfer of funds;

 

5.2.3        Delivering to
Purchaser the Grant Deed, the Nonforeign Affidavit, the 597-W Withholding
Exemption Certificate, and causing the Title Company to issue and deliver to
Purchaser the Owner’s Policy;

 

5.2.4        Immediately following
the Close of Escrow, Escrow Holder shall deliver to Purchaser and Seller a
closing statement showing the application of all funds received and disbursed;

 

5.2.5        Delivering the
Owner’s Policy to Purchaser no later than twenty (20) business days after
recording the Grant Deed; and

 

5.2.6        To the extent the
transaction contemplated by this Agreement involves a real estate transaction
within the purview of Section 6045 of the Internal Revenue Code of 1986, as
amended (the “Internal Revenue Code”), Escrow Holder shall have sole
responsibility to comply with the requirements of Section 6045 of the Internal
Revenue Code (and any similar requirements imposed by state or local law).

 

5.3           Closing Deposits.

 

On or before Close of Escrow, Seller and Purchaser shall deposit with
Escrow Holder the following documents and funds and shall close Escrow as
follows:

 

6

 

 

5.3.1        Seller’s Deposits.  Seller shall deposit with Escrow Holder the
following:

 

5.3.1.1           Deed. An
original executed and acknowledged grant deed conveying the Property to
Purchaser in a form prepared by Seller and approved by Purchaser, which
approval shall not be unreasonably withheld (“Grant Deed”);

 

5.3.1.2            Nonforeign
Affidavit.  The original Nonforeign
Affidavit, executed by Seller; and

 

5.3.1.3           Withholding
Exemption Certificate.  A Form 597-W
Withholding Exemption Certificate, executed by Seller.

 

5.3.1.4           Assignment of
Leases; Assignment of Contracts. 
The Assignment of Leases, and the Assignment of Contracts, executed by
Seller.

 

5.3.1.5           Notice to
Tenants.  Notices to Tenants in the
form attached hereto as Exhibit E.

 

5.3.2        Purchaser’s
Deposits.  On or before the Close of
Escrow, Purchaser shall deposit with Escrow Holder the following:

 

5.3.2.1           Cash Payment.  Cash in the amount of the Purchase Price,
less the deposit; and

 

5.3.2.2           Closing
Costs.  Additional cash in the
amount necessary to pay Purchaser’s share of closing costs, as set forth in
Section 7.

 

5.3.2.3           Assignment of
Leases; Assignment of Contracts. 
The Assignment of Leases, and the Assignment of Contracts, executed by
Purchaser.

 

6.             SELLER REPRESENTATIONS AND WARRANTIES

 

                6.1           Seller Representations.  Seller represents to Purchaser as of the
date of this Agreement and as of the Close of Escrow that, to the Seller’s
actual knowledge:

 

6.1.1        Seller has, or
pursuant to Section 1B of the Lease, shall acquire title to the Property
legally described in the Updated Pro Forma Policy.

 

6.1.2        Seller has received
no notice of any uncured code or building or zoning violations on the Property.

 

6.1.3        There is no
litigation pending with regard to liens or claims against the Property.

 

6.1.4        There are no material
defects in the improvements to or on the Property which would adversely affect
the use of the Property for its current use.

 

6.1.5        All utilities needed
to service the Property for its present operations are currently provided.

 

6.1.6        All documents
provided to Purchaser by Seller pursuant to the Lease or this Agreement
relating to the Property and the improvements constructed thereon are true and
complete in all material respects.

 

6.1.7        Construction. All
improvements on the Property have been constructed in with new materials, in a
workmanlike manner, free and clear of any and all liens and claims of laborers,
artisans, materialmen,

 

7

 

suppliers, and subcontractors, and in conformity, in all material
respects with all applicable federal, state, county, and municipal laws, codes,
ordinances, rules, and regulations, in substantial compliance with final plans
and specifications previously provided to Purchaser according to the provisions
of Purchaser’s Lease with Seller, and approved in writing by Purchaser. All
such improvements have been constructed in compliance in all material respects
with applicable governmental code requirements.

 

6.1.8        Seller Guaranty.
Seller agrees to and shall guaranty the improvements against defective
construction or workmanship for a period of twelve (12) months following
substantial completion of the improvements on the Property.  Seller shall supply Purchaser with all
warranty and guaranty documents relative to equipment and materials
incorporated in the improvements on the Property which are guaranteed by
Seller’s  contractors, their suppliers
or manufacturers.

 

6.1.9        There are no
contracts or agreements relating to the Property which will be binding on
Purchaser after the Close of Escrow that Seller has not made available to
Purchaser or disclosed to Purchaser in writing.

 

6.1.10      Neither the Property
nor the improvements on the Property contains any toxic waste, asbestos, or
other hazardous material in violation of law.

 

6.1.11      Leases.  Except as disclosed to Purchaser, no
brokerage commission or similar fee is due or unpaid by Seller for any tenant
lease, and, except as disclosed to Purchaser, there is no written or oral
agreement that will obligate Purchaser, as Seller’s assignee, to pay any
commission under any tenant lease.  The
Other Leases are in full force, and, except as disclosed to Purchaser, subject
to no offsets for the benefit of the tenants; no rent has been prepaid nor
concessions given to tenants other than as specified in the Other Leases or as
disclosed to Purchaser in writing.

 

6.1.12      Authority.  This Agreement and all other documents
delivered prior to or at Close of Escrow have been duly authorized, executed
and delivered by Seller.

 

6.1.13      Commitments.  There are no commitments or Agreements
affecting the Property which will be binding on Purchaser after the Close of
Escrow which have not been made available to Purchaser or disclosed by Seller
to Purchaser in writing.

 

6.1.14      Toxic or Hazardous
Waste.  Seller has received no written
notice, warning, notice of violation, administrative complaint, judicial
complaint, or other formal or informal notice alleging that conditions on the
Property are or have been in violation of any Environmental Law, or informing
Seller that the Property is subject to investigation or inquiry regarding
Hazardous Substances on the Property or the potential violation of any
Environmental Law.  Furthermore, there
is no monitoring program required by the Environmental Protection Agency (EPA)
or any similar State agency concerning the Property.

 

6.2           Survival.  The representations of Seller contained in
paragraph 6.1 shall survive the Close of Escrow for a period of one (1) year.

 

6.3           Knowledge.  All references in this Section 6 or
elsewhere in this Agreement to “Seller’s knowledge” or “Seller’s actual
knowledge” shall refer solely to the actual knowledge of Harvey Shein or
Christopher Noon and shall not be construed to refer to the knowledge of any
other employee, officer, director, shareholder or agent of Seller and any
affiliate of Seller, and shall not include imputed or constructive knowledge.

 

6.4           Changes in Facts.  If any of the foregoing representations and
warranties become untrue or incorrect due to a change of facts not caused by
Seller, Seller shall so notify Purchaser upon learning of such occurrence, and
if such untruth or incorrectness is of a material nature, Purchaser shall have
the right, within 10 days after such advice and prior to Close of Escrow, to
elect to terminate this Agreement and receive a refund of the Deposit and
income thereon (but Seller shall not be in default hereunder by reason of any
such representations and warranties becoming untrue or incorrect unless Seller
shall have caused such representations and warranties to become untrue or
incorrect).

 

8

 

 

7.             CLOSING COSTS

7.1           Seller’s Costs.  Seller shall pay:

 

7.1.1        the cost of
notarizing Seller’s signature on the Grant Deed;

 

7.1.2        one-half (1/2) of the
cost of the title insurance premium for a CLTA Owner’s Policy of Title
Insurance in the amount of the purchase price;

 

7.1.3        the cost of all real
property transfer taxes and documentary transfer taxes payable upon recordation
of the Grant Deed; and

 

7.1.4        any sales, use and ad
valorem taxes connected with the Close of Escrow.

 

In addition, Seller shall pay outside of Escrow all legal and
professional fees and costs of attorneys and other consultants and agents
retained by Seller in the negotiation and drafting of this Agreement and the
Lease, as well as in the consummation of the transaction described in this
Agreement.

 

7.2           Purchaser’s Costs.  Purchaser shall pay:

 

                                7.2.1        one-half
(1/2) of the cost of the title insurance premium for a CLTA Owner’s Policy of
Title Insurance in the amount of the purchase price;

 

7.2.2        any difference
between the cost of the premium for a CLTA Owner’s Policy of Title Insurance in
the amount of the purchase price and the cost of the premium necessary to
obtain an ALTA policy of Title Insurance and a lender’s policy of Title
Insurance if requested by Purchaser, together with any Endorsements requested
by Purchaser;

 

7.2.3        the cost of recording
the Grant Deed; and

 

7.2.4        the Escrow fee of the
Escrow Holder.

 

In addition, Purchaser shall pay outside of Escrow all legal and
professional fees and costs of attorneys and other consultants and agents
retained by Purchaser in the negotiation and drafting of this Agreement and the
Lease, as well as in the consummation of the transaction described in this
Agreement.

 

8.             PRORATIONS

The following are to be prorated through Escrow on the Close of Escrow
as follows:

 

8.1           Real property taxes
and assessments;

 

8.2           All  rent and other amounts accruing under the
Lease and any Other Lease;

 

8.3           Delinquent taxes and
penalties, if any, shall be paid by Seller;

 

9.             CONDEMNATION

9.1           In the event that between the Effective Date and the Close
of Escrow any condemnation or eminent domain proceedings are initiated,
threatened or are continuing, which might result in the taking of any part of
the Property which would be material to Purchaser’s proposed use of the
Property, then Purchaser, at its sole option, may elect to terminate this
Agreement, without costs, obligation or liability on the part of Purchaser, in
which event all rights and obligations of the parties hereunder shall cease and
the Deposit plus any and all accrued interest thereon shall be promptly
refunded to Purchaser.  In the event
Purchaser elects not to so terminate this

 

9

 

Agreement,
Seller shall assign to Purchaser at Closing all of Seller’s title and interest
in and to any condemnation award pertaining to the Property made in connection
with such condemnation or eminent domain proceedings, less all costs and
expenses incurred by Seller in connection with such proceedings.  Purchaser shall notify Seller within thirty
(30) days after its receipt of notice of the initiation or threat of such
condemnation or eminent domain proceedings, whether it elects to exercise its
right to terminate. If Purchaser fails to notify Seller of its election within
said 30–day period, such failure shall constitute an election to
terminate this Agreement as aforesaid. The Closing Deadline shall be adjusted
to allow for such election.

9.2           In the event that prior to the Close of Escrow any part of
the Property was taken in condemnation or eminent domain proceedings, Purchaser
shall be entitled to receive a credit against the Purchase Price at Close of
Escrow in an amount equal to that portion of the award, if any, actually
received by Seller as compensation for the portion of the Property so taken,
less all costs and expenses incurred by Seller in connection with such
condemnation or eminent domain proceedings.

10.           1031 EXCHANGE

If a party hereto desires to participate in an exchange of, or in
connection with the Property, qualifying for non-recognition of gain under
Internal Revenue Code §1031 and the applicable provisions of the California
Revenue and Taxation Code (the “exchangor”), the other party (the “Cooperating
Party”) agrees to cooperate with the exchangor in connection with such
exchange, including by Purchaser accepting a conveyance of the Property from an
exchange facilitator, in the case of an exchange by Seller, and by permitting
Purchaser to assign this Agreement to a exchange facilitator and by Seller
transferring the Property to the exchange facilitator, in the case of an
exchange by Purchaser.  The exchangor
reserves the right to convert this transaction to an exchange at any time
before the Closing Deadline. The exchangor and the Cooperating Party agree,
however, that consummation of the transaction contemplated by this Agreement is
not predicated or conditioned upon completion of such an exchange.  If the exchangor elects to complete an
exchange, the Cooperating Party shall execute all escrow instructions,
documents, agreements, or instruments reasonably requested by the exchangor to
complete the exchange.  The Cooperating
Party shall incur no additional liabilities, expenses or costs as a result of,
or connected with the exchange, nor shall the Cooperating Party be obligated to
take title to any property other than the Property to effect such an exchange.
The exchangor agrees to and shall defend, indemnify, and hold the Cooperating
Party and the Cooperating Party’s officers, directors, employees, and
shareholders free and harmless from and against any and all liabilities,
damages, or costs (including but not limited to reasonable attorneys fees and
related costs) that may arise from the Cooperating Party’s participation in the
exchange.  The exchangor further agrees
to and shall pay the Cooperating Party’s attorneys fees incurred for reviewing
the applicable documents with regard to the Cooperating Party’s participation
in the exchange.

 

11.           NOTICE

 

Any and all notices or other communications required or permitted to be
given under or pursuant to the provisions of this Agreement, shall be in
writing and either (a)  personally
served, in which case notice shall be deemed delivered upon receipt; (b) sent
by any nationally recognized overnight courier, in which case notice shall be
deemed delivered on the next business day after depositing the same with such
delivery service; or (c) sent by United States mail, postage prepaid certified
mail, return receipt requested, in which case notice shall be deemed delivered
two (2) business days after being deposited with the United States postal
service, any in any case such notices or other communications shall be
addressed to the following addresses:

 

	
  If to Seller:

  	
   

  	
  c/o Quadrangle Development Company

  
	
   

  	
   

  	
  2121 Waukegan Road, Suite 100

  
	
   

  	
   

  	
  Bannockburn, Illinois 60015

  
	
   

  	
   

  	
  Attn: 
  Christopher Noon

  
	
   

  	
   

  	
   

  
	
  If to Purchaser:

  	
   

  	
  Copart, Inc.

  
	
   

  	
   

  	
  5500 East Second Street, 2nd Floor

  
	
   

  	
   

  	
  Benicia, California 94510

  
	
   

  	
   

  	
  Attn: 
  Legal Department

  

 

10

 

	
  With a copy to:

  	
   

  	
  Robert J. Binns, Esq.

  	
   

  
	
   

  	
   

  	
  3620 American River Drive, Suite 175

  	
   

  
	
   

  	
   

  	
  Sacramento, CA 95864

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Escrow Holder:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  

 

                Any party may
change its address for notice from time to time by giving notice to the other
party in writing in the manner described in this paragraph; provided that any
such notice of change of address shall only be effective upon actual receipt of
the other party.

 

12.           ATTORNEY FEES; LITIGATION COSTS

                If any legal
action or other proceeding, including arbitration or an action for declaratory
relief, is brought to enforce this Agreement or because of a dispute, breach,
default, or alleged misrepresentation in connection with this Agreement, the
prevailing party in such proceeding shall be entitled to recover all reasonable
attorney’s fees, costs and expenses of such action or proceeding, including,
without limitation, all attorney’s fees, all costs and all expenses incurred in
any mediation, arbitration, trial, appellate proceeding, out-of-court negotiations,
workouts and settlements, or in the enforcement of rights under any state or
federal statute, or in actions brought in bankruptcy and insolvency proceedings
such as (but not limited to) those resulting from actions seeking relief from
stays in bankruptcy proceedings. The term “expenses,” as used herein, means any
and all reasonable expenses incurred in connection with any of the out-of-court
and in-court proceedings to which reference is made in this paragraph,
including, but not limited to reasonable fees and expenses paid to mediators,
arbitrators, appraisers, consultants and expert witnesses retained or consulted
in connection with such proceedings.

 

                In such
proceedings the prevailing party shall also be entitled to all reasonable
attorney’s fees, all costs and all expenses incurred in any appeals and
post-judgment proceedings to collect and enforce a judgment. This provision is
separate and several and shall survive the Close of Escrow and the merger of
the provisions of this Agreement into any judgment or order.

 

13.           TIME OF THE ESSENCE

 

                Time is of
the essence of this Agreement and every provision contained in this Agreement.
Whenever in this Agreement the term “day” is used, it means a calendar day,
unless the term “business day” is used, in which case the term “business day”
shall mean a day on which commercial banks in the state of California are
typically open to conduct their usual banking business, other than Saturdays or
Sundays.

 

14.           CONSTRUCTION

 

                The title and
headings of the sections in this Agreement are intended solely for reference
and do not modify, explain, or construe any provision of this Agreement.  All references to sections, recitals, and
the preamble shall, unless otherwise stated, refer to the sections, recitals,
and preamble of this Agreement.  In
construing this Agreement, the singular form shall include the plural, and the
masculine, the feminine or neuter gender, as may fit the case, and vice
versa.  This Agreement shall not be
construed as if it had been prepared by one of the parties, but rather as if
both parties had prepared the Agreement, without regard to California Civil
Code §1654, or similar statutes.  The
language in all parts of this Agreement shall be construed as a whole, in
accordance with its fair meaning.

 

15.           INTEGRATION

 

                This
Agreement, and all attached exhibits constitute the entire Agreement between
the parties, and may not be contradicted by evidence of any prior or
contemporaneous representation or Agreement. There are no representations,
agreements, arrangements, or circumstances, oral, parol or written, between the
parties hereto

 

11

 

relating to the subject matter contained in this Agreement that are not
fully expressed in this Agreement, and Seller has not made and does not make
any representation or warranty concerning any matter or thing affecting or
relating to the Property not expressed in this Agreement. This Agreement
specifically supersedes any and all prior or contemporaneous written or oral Agreements
between the parties.  This Agreement may
not be modified, amended, or otherwise changed, except by a writing executed by
the party to be charged.

 

16.           LIMITED ASSIGNMENT; NO THIRD-PARTY RIGHTS

                16.1         Except as provided in Section 10 hereof
or as hereinafter provided, Purchaser may not assign or suffer an assignment of
this Agreement or its rights under this Agreement, without the prior written
consent of Seller, which consent Seller may deny in its sole and absolute
discretion.  Notwithstanding the foregoing,
this Agreement and all, but not part, of Purchaser’s rights under this
Agreement may be assigned by Purchaser, without the prior written consent of
Seller, to an entity which is qualified to do business in the State of
California and in which Purchaser maintains majority control over the
day-to-day management and affairs of the entity; provided, however, that such
assignment shall not release or relieve Purchaser of and from any liability or
obligation under this Agreement, and Purchaser shall continue to be primarily
liable to Seller under this Agreement and the closing documents.  No such assignment shall be effective,
however, unless and until Purchaser shall have furnished to Seller both an
executed copy of the assignment plus a written assumption agreement, in form
reasonably satisfactory to Seller, by the assignee to assume, perform and be
responsible, jointly and severally with the Purchaser named herein, for the
performance of all of the obligations of Purchaser under this Agreement and to pay
all additional transfer or documentary taxes imposed as a result of such
assignment, and which contains a representation by the assignee that all of the
representations and warranties made by Purchaser in this Agreement are true and
correct with respect to the assignee as of the date of the assumption agreement
(or if the assignee is a different form of entity, the applicable
representation shall be modified as appropriate).  Seller shall have the right to rely in good faith on the
genuineness and validity of the notice from Purchaser of an assignment and to
convey the Premises to the assignee without liability to Purchaser or any other
person.  Purchaser shall indemnify and
save Seller harmless from and against any such liability in connection with
such conveyance to the assignee and shall guarantee all obligations of the
assignee to Seller under the closing documents.

 

                16.2         Nothing in this Agreement, express or
implied, is intended to confer upon any person, other than the parties and
their respective successors and permitted assigns, any rights or remedies.

 

17.           SEVERABILITY

 

                If any
provision of this Agreement shall be held to be void or unenforceable to any
extent,  such provision will be treated
as severable, the remainder of this Agreement shall not be affected thereby and
shall be enforceable to the greatest extent permitted by law.

 

18.           WAIVERS

 

                No waiver or
modification of any of the terms or provisions of this Agreement shall be valid
unless contained in a writing signed by the parties.

 

19.           COUNTERPARTS

                This
Agreement may be executed in one or more counterparts, each of which so
executed shall be deemed an original, regardless of it’s date and\or delivery,
and said counterparts, taken together, shall constitute one document. The
execution and delivery of this Agreement shall have occurred, and this
Agreement shall be enforceable and effective only upon its execution and
delivery by all parties hereto.

 

20.           INCORPORATION OF EXHIBITS

 

                All attached
exhibits are  incorporated into this
Agreement by reference.

 

12

 

21.           AUTHORITY OF PARTIES

                All persons
executing this Agreement on behalf of a party warrant that they have the
authority to execute this Agreement on behalf of that party.

 

22.           BROKER’S COMMISSIONS

 

Seller and Purchaser each represent to each other that they have dealt
with no broker or finder in connection with this Agreement, except Purchaser’s
dealings with and representation by Cushman & Wakefield of California,
Inc., and insofar as they know, no broker or person other than Cushman &
Wakefield of California, Inc. is entitled to any commission or finder’s fee in
connection with the transaction described in this Agreement. Seller agrees to
and shall pay, and defend, indemnify and hold Purchaser and the Property free
and harmless from and against any and all obligations to pay a brokerage
commission to Cushman & Wakefield of California, Inc. as a result of this
Agreement and the transaction described in this Agreement, and Seller and Purchaser
agree to and shall each defend, indemnify, and hold the other party and its
beneficiaries, employees, mortgagees, agents, their officers and partners, and
the Property free and harmless from and against any and all loss, liability,
damage, cost, claim or expense, specifically including but not limited to
attorneys’ fees, incurred by reason of any claim arising out of the acts of the
indemnifying party, or others on behalf of the indemnifying party, for a
commission, finder’s fee, or similar compensation made by any broker, finder or
party other than Cushman & Wakefield of California, Inc. claiming to have
dealt or contracted with the indemnifying party relating to this Agreement.

 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Initial

  	
   

  	
   

  	
  Initial

  	
   

  

 

23.           GOVERNING LAW

 

                This
Agreement has been negotiated and entered into in the State of California, and
shall be governed by and construed and enforced in accordance with the internal
laws of the State of California, applied to contracts made in California by
California domiciliaries to be wholly performed in California, and without
reference to or application of conflicts of laws rules.

 

24.           NO JOINT VENTURE

 

                It is
expressly agreed and understood by the parties hereto that neither party is the
agents partners nor joint venture partner of the other, and that neither Seller
nor Purchaser has any obligations or duty to the other except as specifically
provided for in this Agreement.

 

25.           FLOOR AREA

 

For purposes of this
Agreement, “Rentable Area” and “Gross Measured Area” shall be determined by
Landlord in accordance with the BOMA “Standard Method for Measuring Floor Area
in Office Buildings,” approved June 7, 1996 by the American National Standard
Institute, Inc.

IN WITNESS WHEREOF, the
undersigned have executed this Agreement as of the date set forth herein below.

 

DO NOT SIGN THIS AGREEMENT UNLESS AND UNTIL
IT IS REVIEWED AND EXPLAINED TO YOU BY YOUR ATTORNEY AND YOU UNDERSTAND EACH OF
ITS PROVISIONS.

 

	
  Seller:

  	
   

  	
  Purchaser:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  COPART, INC., a California corporation

  
	
   

  	
   

  	
   

  
	
  By

  	
   

  	
   

  	
  By

  	
   

  
	
  Its

  	
   

  	
   

  	
  Its

  	
   

  

 

13

 

EXHIBIT A (TO EXHIBIT G - PURCHASE AGREEMENT)

 

LEGAL DESCRIPTION OF THE PROPERTY

 

 

[TO
BE DETERMINED FOLLOWING SUBDIVISION PURSUANT TO SECTION 1B OF THE LEASE]

 

14

 

EXHIBIT B (TO EXHIBIT G - PURCHASE AGREEMENT)

 

[OMITTED]

 

 

15

 

 

EXHIBIT C (TO EXHIBIT G - PURCHASE AGREEMENT)

 

ASSIGNMENT OF LEASES

 

This Assignment of Leases (“Assignment”) is
entered into as of ____________, 200_ between 
__________________(“Assignor”)
and ________________________ (“Assignee”), for the following reasons:

                A.            Assignor and Assignee have entered
into an Agreement of Purchase and Sale dated                                     __________, 200__, (the “Purchase Agreement”)
in which Assignee has
agreed to purchase improved real property known as the _____________________,
County of Solano, State of California (the “Property”), as more particularly described
in attached Exhibit “A”
incorporated herein.

 

                B.            Assignor has
previously entered leases of the Property (collectively, “Leases”) more
particularly described in attached Exhibit “B” incorporated herein.

 

                C.            Assignor has accepted
and retained security deposits (collectively, “Security Deposits”) from tenants under
the Leases in
the amounts set forth in attached Exhibit “C” incorporated herein.

 

                D.            Pursuant to the Purchase Agreement, Assignor has agreed
to assign to Assignee all
right, title, and interest in the Leases and the Security Deposits, and Assignee has agreed
to assume all Assignor’s
obligations under the Leases.

 

                NOW, THEREFORE, for
good and valuable consideration, the receipt and adequacy of which is herewith
acknowledged, Assignor and
Assignee agree
as follows:

 

Section 1. 
Assignment.

 

                Assignor assigns all
right, title, and interest in the Leases and the Security Deposits to Assignee.

 

Section 2. 
Notice to Tenants.

 

                Following the execution and conveyance of the grant deed as provided
for in the Purchase
Agreement, Assignor
shall give notice to the tenants under the Leases, in the form
of the Notice attached to the Purchase Agreement as Exhibit “E”, incorporated herein, that Assignee has acquired
the Property and
owns the landlord’s interest in the Leases.

 

Section 3. 
Assumptions.

 

                Assignee assumes
(collectively, the “Assumed
Obligations”) (i) all the landlord’s obligations, duties,
responsibilities, and liabilities under the Leases accruing on or after the date Assignee acquires
title to the Property
and (ii) all of the Other
Lease Costs (as such term is defined in Section 1.2 of the Purchase Agreement)
and all tenant improvement allowances under the Lease and the Other Leases which
are unpaid as of the date hereof.

 

Section 4. 
Indemnity.

 

                Assignor agrees to
indemnify Assignee for
any loss, cost or expense, including attorney fees and court costs, relating to
the Leases accruing
before the date Assignee acquires title to the Property other than the Assumed Obligations.  Assignee agrees to indemnify Assignor for any
loss, cost, or expense, including attorney fees and court costs,  relating to the Assumed Obligations.

 

Section 5. 
Successors.

 

                This Assignment shall
be binding on and inure to the benefit of the parties to it, their heirs,
executors, administrators, successors in interest, and assigns.

 

16

 

Section 6.  Severability.

                If any term or provision of this Assignment shall be held invalid or
unenforceable, the remainder of this Assignment shall not be affected.

 

Section 7. 
Waivers.

 

                No waiver or breach of any covenant or provision shall be deemed a
waiver of any other covenant or provision, and no waiver shall be valid unless
in writing and executed by the waiving party.

 

Section 8. 
Construction.

 

                Headings are solely for the parties’ convenience, are not a part of
this Assignment,
and shall not be used to interpret this Assignment. 
The singular form shall include plural and vice versa.  This Assignment shall not be construed as if it
had been prepared by one of the parties, but rather as if both parties have
prepared it.  Unless otherwise
indicated, all references to sections are to this Assignment.

 

Section 9. 
Counterparts.

 

                This Assignment may
be executed in one or more counterparts, each of which shall be deemed an
original and all of which taken together shall constitute one and the same
instrument.

 

Section 10. 
Amendment.

 

                This Assignment may
not be amended or altered except by a written instrument executed by Assignor and Assignee.

 

Section 11. 
Third-Party Rights.

 

                Nothing in this Assignment,
express or implied, is intended to confer upon any person, other than the
parties and their respective successors and assigns, any rights or remedies.

 

Section 12. 
Attorney Fees.

 

                In the event of any litigation between Assignor and Assignee arising out
of the obligations of Assignor
under this Assignment
or concerning interpretation of any of its provisions, the
losing party shall pay the prevailing party’s costs and expenses of the
litigation, including reasonable attorney fees.

 

Section 13. 
Governing Law.

 

                This Assignment shall
be governed and construed in accordance with the laws of the State of
California, without regard to, or application of its conflicts of laws.

 

                The parties have executed this Assignment as of the date first written
above.

 

	
  ASSIGNEE:

  	
   

  	
  ASSIGNOR:

  
	
   

  	
   

  	
   

  
	
  By

  	
   

  	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Dated: 

  	
   

  	
  , 200

  	
   

  	
   

  	
  Dated: 

  	
   

  	
  , 200

  	
   

  	
   

  
													

 

 

17

 

EXHIBIT D (TO EXHIBIT G - PURCHASE AGREEMENT)

 

ASSIGNMENT OF CONTRACTS

 

                This
Assignment of Contracts (“Assignment”)
is entered into as of                      , 200 , between
_________________________________ (collectively referred to herein as “Assignor”), and
_________________________________ (“Assignee”).

 

Recitals

 

                A.            Assignor and Assignee have entered
into an Agreement of Purchase and Sale and Escrow Instructions dated
______________, (“Purchase
Agreement”),
in which Assignee has agreed to purchase improved real property located at
_______________________________, County of _______________, state of ________,
(“Property”),
described in attached Exhibit
“A”  and incorporated in this Assignment.

 

                B.            Pursuant
to the Purchase
Agreement, Assignor
has agreed to assign to Assignee
all rights in any and all permits, licenses, contracts, agreements, and
intangible assets to the Property
(as defined in this Assignment),
and the Agreements
(as defined in this Assignment).

 

                For
good and valuable consideration, Assignor and Assignee agree as follows:

 

Section 1.  Assignment.

 

                Assignor assigns all of Assignor’s rights (to
the extent assignable and in effect) in:

 

                                (a)
          all warranties and guaranties
made by or received from any third party for any building, building component,
structure, fixture, machinery, equipment, or material situated on or contained
in any building or other improvement situated on or comprising a part of the Property, including
but not limited to those on Schedule 1, attached to this Assignment and
incorporated by reference (collectively, Warranties and Guaranties);

 

                                (b)
          all governmental permits or
licenses of Assignor
in connection with the Property
or any improvements or personal property located on the Property or relating
to the ownership, use or operation of the Property, together with the service
contracts, maintenance contracts and operating contracts set forth on Schedule
2, which Schedule has been prepared in accordance with Section 2.4 of the
Purchase Agreement and is attached to this Assignment and incorporated by
reference (collectively, Agreements).

 

Section 2.  Assumptions

 

                Assignee assumes
(collectively, the “Assumed
Obligations”) (i) all the landlord’s obligations, duties,
responsibilities, and liabilities under the Agreements accruing on or after the date
Assignee acquires
title to the Property
and (ii) all of the Other
Lease Costs (as such term is defined in Section 8.5 of the Purchase Agreement).

 

Section 3.  Indemnity.

 

                Assignor agrees to indemnify Assignee against all
liability, claims, damages, losses, costs, or expenses, including attorney fees
and court costs relating to the Agreements accruing before the date Assignee acquires
title to the Property other than the Assumed Obligations.  Assignee agrees to indemnify  Assignor against all liability, claims, damages,
losses, costs, or expenses, including attorney fees and court costs relating to
the Assumed Obligations.

 

Section 4.  Successors.

 

                This
Assignment
shall be binding on and inure to the benefit of the parties to it, their heirs,
executors, administrators, successors in interest, and assigns.

 

18

 

Section 5.  Severability.

                If
any term or provision of this Assignment shall be held invalid or unenforceable, the
remainder of this Assignment
shall not be affected.

 

Section 6.  Waivers.

 

                No
waiver or breach of any covenant or provision shall be deemed a waiver of any
other covenant or provision, and no waiver shall be valid unless in writing and
executed by the waiving party.

 

Section 7.  Construction.

 

                Headings
are solely for the parties’ convenience, are not a part of this Assignment, and shall
not be used to interpret this Assignment.  The
singular form shall include the plural and vice versa.  This Assignment shall not be construed as if it
had been prepared by one of the parties, but rather as if both parties have
prepared it.  Unless otherwise
indicated, all references to sections are to this Assignment.

 

Section 8.  Counterparts.

 

                This
Assignment
may be executed in one or more counterparts, each of which shall be deemed an
original and all of which taken together shall constitute one and the same
instrument.

 

Section 9.  Amendment.

 

                This
Assignment
may not be amended or altered except by a written instrument executed by Assignor and Assignee.

 

Section 10.  Further Assurances.

 

                Whenever
requested to do so by the other party, each party shall execute, acknowledge,
and deliver any further conveyances, assignments, confirmations, satisfactions,
releases, powers of attorney, instruments of further assurance, approvals,
consents, and any further instruments or documents that are necessary,
expedient, or proper to complete any conveyances, transfers, sales, and
assignments contemplated by this Assignment. 
In addition, each party shall do any other acts and execute,
acknowledge, and deliver any requested documents in order to carry out the
intent and purpose of this Assignment.

 

Section 11.  Third-Party Rights.

 

                Nothing
in this Assignment,
express or implied, is intended to confer upon any person, other than the
parties and their respective successors and assigns, any rights or remedies.

 

Section 12.  Attorney Fees

 

                In
the event of any mediation, arbitration or court action between Assignor and Assignee arising out
of the obligations of Assignor
under this Assignment
or concerning interpretation of any of its provisions, the losing party shall
pay the prevailing party’s costs and expenses of the litigation, including
reasonable attorney fees.

 

Section 13.  Governing Law.

 

                This
Assignment has
been negotiated and entered into in the State of California, and shall be
governed by, and construed and enforced in accordance with, the internal laws
of the State of California, without reference to or application of conflicts of
laws rules.

 

 

19

 

                The
parties have executed this Assignment
as of the date first written above.

 

	
  ASSIGNEE:

  	
   

  	
  ASSIGNOR:

  
	
   

  	
   

  	
   

  
	
  By

  	
   

  	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Dated: 

  	
   

  	
  , 200

  	
   

  	
   

  	
  Dated: 

  	
   

  	
  , 200

  	
   

  	
   

  
													

 

20

 

EXHIBIT E (TO EXHIBIT G - PURCHASE AGREEMENT)

 

FORM OF NOTICE TO TENANTS

 

 

 

                         ,
200__

 

 

BY CERTIFIED MAIL

 

 

 

 

Re: __________________________________,
California

 

Ladies and Gentlemen:

 

On ____________________,
200__, _____________________, we transferred, assigned and sold to
_____________________________ (the “Buyer”), our rights and obligations as
landlord under your lease relating to the above-referenced real property and
improvements, including any received and unapplied security deposit made by you
pursuant to the provisions of your lease and our right to receive rent from you
under said lease, as a part of the sale of the property situated at
____________________________________, California.  All further rental payments in discharge of your obligation to
pay rent under the above-described lease should be made to the Buyer at the
following address:

	
   

  	
  Attention: 

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

Any questions, problems,
issues or concerns you may have relating to the subject property can be
addressed to the Buyer at the above address.

	
   

  	
   

  	
   

  

 

 

	
   

  	
  By:

  	
   

  	
   

  

 

cc:

 

21

 

EXHIBIT
H TO LEASE FOR

GREEN
VALLEY BUILDING 12

FAIRFIELD,
CALIFORNIA

 

RULES
& REGULATIONS FOR USE OF COMMUNICATION EQUIPMENT

Permission is granted, free of
rental charge, for the Tenant to install the Communication Equipment specified
in Paragraph 38 at the Premises on the roof and building structure, at Tenant’s
sole cost and expense, subject to the following restrictions:

(a)           The location and means of securing the Communication
Equipment must be approved by Landlord or its designated agent, which shall not
be unreasonably withheld.  Tenant shall
be responsible for any damage to the Building roof or structure or any
surrounding property resulting from the installation or operation of the
Communication Equipment, including, but not limited to, damage resulting from
wind, ice or any other causes.  The
Communication Equipment shall not damage the Building or  damage or interfere with the structure or
the system of communication devised by any other user authorized by Landlord or
users at neighboring properties.  If
such damage or interference shall occur, Tenant shall correct same promptly.

(b)           Tenant agrees to maintain the Communication Equipment in a
proper and safe operating condition.

(c)           Tenant shall comply with all codes, rules, regulations and
conditions of any applicable governmental agency and shall pay for all legal,
engineering and other expenses incident thereto.  Prior to installation, Tenant shall provide Landlord with a copy
of all required permits, licenses, or evidence of authority to operate from
this location.

(d)           Installation of the Communication Equipment shall be
performed, at Tenant’s sole cost and expense, in a responsible and workmanlike
manner by personnel with all necessary skill and expertise through or under the
supervision of Landlord.

(e)           Tenant shall be responsible for any costs associated with
furnishing electricity for the Communication Equipment.

(f)            Tenant shall remove the Communication Equipment and
restore the roof and structure to its original condition, except for ordinary
wear and tear, at the earlier of Tenant’s cessation of use of the Communication
Equipment or the expiration or earlier termination of the term of this Lease or
any renewal term thereof, at Tenant’s sole cost and expense.  The Communication Equipment shall, at all
times, remain the property of Tenant and Tenant shall have the right to remove
it at any time, subject to the terms and conditions herein.

(g)           Tenant shall be responsible for implementing appropriate
screening as reasonably required by Landlord.

(h)           Tenant agrees to indemnify, defend and hold Landlord
harmless from any claim resulting from property damage or personal injury
arising in connection with the installation, maintenance, existence or removal
of the Communication Equipment and shall carry insurance to cover such
liability and property damages.

 

 

EXHIBIT
I TO LEASE FOR

GREEN
VALLEY BUILDING 12

FAIRFIELD,
CALIFORNIA

 

RULES
& REGULATIONS FOR USE OF PAD AREA

Permission is granted, free of
rental charge, for the Tenant to install the Generator Equipment on the Pad
Area specified in Paragraph 39 of the Lease, at Tenant’s sole cost and expense,
subject to the following restrictions:

(a)           The location and means of securing the Generator Equipment
must be approved by Landlord or its designated agent, which shall not be
unreasonably withheld.  Tenant shall be
responsible for any damage to the Building or any surrounding property
resulting from the installation or operation of the Generator Equipment.  The Generator Equipment shall not damage the
Building or damage or interfere with the electrical system of the Building or
any other user authorized by Landlord. 
If such damage or interference shall occur, Tenant shall correct same
promptly.

(b)           Tenant agrees to maintain the Generator Equipment in a
proper and safe operating condition.

(c)           Tenant shall comply with all codes, rules, regulations and
conditions of any applicable governmental agency and shall pay for all legal,
engineering and other expenses incident thereto.  Prior to installation, Tenant shall provide Landlord with a copy
of all required permits, licenses, or evidence of authority to operate from
this location.

(d)           Installation of the Generator Equipment shall be
performed, at Tenant’s sole cost and expense, in a responsible and workmanlike
manner by personnel with all necessary skill and expertise through or under the
supervision of Landlord.

(e)           Tenant shall be responsible for any costs associated with
furnishing electrical connections for the Generator Equipment.

(f)            Tenant shall remove the Generator Equipment and restore
the Pad Area to its original condition at the earlier of Tenant’s cessation of
use of the Generator Equipment or the expiration or earlier termination of the
term of this Lease or any renewal term thereof, at Tenant’s sole cost and
expense.  The Generator Equipment shall,
at all times, remain the property of Tenant and Tenant shall have the right to
remove it at any time, subject to the terms and conditions herein.

(g)           Tenant shall be responsible for implementing appropriate
screening as reasonably required by Landlord.

(h)           Tenant shall not operate the Generator Equipment during
business hours unless such operation is required during an interruption in
electrical service to the Premises.

(i)            Tenant
agrees to indemnify, defend and hold Landlord harmless from any claim resulting
from property damage or personal injury arising in connection with the use of
the Pad Area or installation, maintenance, existence or removal of the
Generator Equipment and shall carry insurance to cover such liability and
property damages.

 

 

EXHIBIT J TO LEASE FOR

GREEN VALLEY BUILDING 12

FAIRFIELD, CALIFORNIA

 

PRO FORMA POLICY

 

 

 

[GRAPHIC]

 

Form No. 1409_92

(10/17/92)

ALTA Owner’s Policy

PROFORMA POLICY JACKET

 

LEASEHOLD

 

POLICY OF TITLE INSURANCE

 

[FIRST
AMERICAN LOGO]

 

ISSUED
BY

 

First American Title Insurance Company

 

SUBJECT TO THE EXCLUSIONS FROM COVERAGE, THE
EXCEPTIONS FROM COVERAGE CONTAINED IN SCHEDULE B AND THE CONDITIONS AND
STIPULATIONS, FIRST AMERICAN TITLE INSURANCE COMPANY, a California corporation,
herein called the Company, insures, as of Date of Policy shown in Schedule A,
against loss or damage, not exceeding the Amount of Insurance stated in
Schedule A, sustained or incurred by the insured by reason of:

 

1.  Title to the estate or
interest described in Schedule A being vested other than as stated therein;

 

2.  Any defect in or lien or
encumbrance on the title;

 

3.  Unmarketability of the
title;

 

4.  Lack of a right of access to
and from the land.

 

The Company will also pay the costs,
attorneys’ fees and expenses incurred in defense of the title, as insured, but
only to the extent provided in the Conditions and Stipulations.

 

 

	
   

  	
  First American Title Insurance Company

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  BY

  	
  /s/ [ILLEGIBLE]

  	
   

  	
  PRESIDENT

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ATTEST

  	
  /s/ [ILLEGIBLE]

  	
   

  	
  SECRETARY

  	
   

  

 

 

EXCLUSIONS
FROM COVERAGE

 

The following matters are expressly excluded
from the coverage of this policy and the Company will not pay loss or damage,
costs, attorneys’ fees or expenses which arise by reason of:

 

1.     (a)   Any law, ordinance or governmental regulation (including but not
limited to building and zoning laws, ordinances, or regulations) restricting,
regulating, prohibiting or relating to (i) 
the occupancy use, or enjoyment of the land; (ii)  the character, dimensions or location of any
improvement now or hereafter erected on the land; (iii)  a separation in ownership or a change in the
dimensions or area of the land or any parcel of which the land is or was a
part; or (iv)  environmental protection,
or the effect of any violation of these laws, ordinances or governmental
regulations, except to the extent that a notice of the enforcement thereof or a
notice of a defect, lien or encumbrance resulting from a violation or alleged
violation affecting the land has been recorded in the public records at Date of
Policy.

(b)   Any
governmental police power not excluded by (a) above, except to the extent that
a notice of the exercise thereof or a notice of a defect, lien or encumbrance
resulting from a violation or alleged violation affecting the land has been
recorded in the public records at Date of Policy.

 

2.     Rights of eminent domain
unless notice of the exercise thereof has been recorded in the public records
at Date of Policy, but not excluding from coverage any taking which has
occurred prior to Date of Policy which would be binding on the rights of a
purchaser for value without knowledge.

 

3.     Defects, liens,
encumbrances, adverse claims or other matters:

(a)   created, suffered, assumed
or agreed to by the insured claimant;

(b)   not known to the Company,
not recorded in the public records at Date of Policy, but known to the insured
claimant and not disclosed in writing to the Company by the insured claimant
prior to the date the insured claimant became an insured under this policy;

(c)   resulting in no loss or
damage to the insured claimant;

(d)   attaching or created
subsequent to Date of Policy; or

(e)   resulting in loss or damage
which would not have been sustained if the insured claimant had paid value for
the estate or interest insured by this policy.

 

4.     Any claim, which arises out
of the transaction vesting in the Insured the estate or interest insured by
this policy, by reason of the operation of federal bankruptcy, state
Insolvency, or similar creditors’ rights laws, that is based on:

 

(i)    the transaction creating
the estate or interest insured by this policy being deemed a fraudulent
conveyance or fraudulent transfer; or

(ii)   the transaction creating
the estate or interest insured by this policy being deemed a preferential
transfer except where the preferential transfer results from the failure:

 

(a)   to timely record the
instrument of transfer; or

(b)   of such recordation to
impart notice to a purchaser for value or a judgment or lien creditor.

 

CONDITIONS
AND STIPULATIONS

 

1.       DEFINITION OF TERMS.

 

The following
terms when used in this policy mean:

 

(a)  “Insured”: the insured named in Schedule A,
and, subject to any rights or defenses the Company would have had against the
named insured, those who succeed to the interest of the named insured by
operation of law as distinguished from purchase including, but not limited to,
heirs, distributees, devisees, survivors, personal representatives, next of
kin, or corporate or fiduciary successors.

 

(b)  “Insured claimant”: an insured claiming loss
or damage.

 

(c)  “knowledge” or “known”: actual knowledge,
not constructive knowledge or notice which may be imputed to an insured by
reason of the public records as defined in this policy or any other records
which impart constructive notice of matters affecting the land.

 

(d)  “land”: the land described or referred to in
Schedule (A), and improvements affixed thereto which by law constitute real
property.  The term “land” does not
include any property beyond the lines of the area described or referred to in
Schedule (A), nor any right, title, interest, estate or easement in abutting
streets, roads, avenues, alleys, lanes, ways or waterways, but nothing herein
shall modify or limit the extent to which a right of access to and from the
land is insured by this policy.

 

(e)  “mortgage”: mortgage, deed of trust, trust
deed, or other security instrument.

 

(f)  “public records”: records established under
state statutes at Date of Policy for the purpose of imparting constructive
notice of matters relating to real property to purchasers for value and without
knowledge.  With respect to Section
1(a)(iv) of the Exclusions From Coverage. 
“public records” shall also include environmental protection liens filed
in the records of the clerk of the United States district court for the
district in which the land is located.

 

(g)  “unmarketability of the title”: an alleged
or apparent matter affecting the title to the land, not excluded or excepted
from coverage, which would entitle a purchaser of the estate or Interest
described in Schedule A to be released from the obligation to purchase by
virtue of a contractual condition requiring the delivery of marketable title.

 

2.       CONTINUATION OF INSURANCE AFTER
CONVEYANCE OF TITLE.

 

The coverage
of this policy shall continue in force as of Date of Policy in favor of an
insured only so long as the insured retains an estate or interest in the land,
or holds an indebtedness secured by a purchase money mortgage given by a
purchaser from the insured, or only so long as the insured shall have liability
by reason of covenants of warranty made by the insured in any transfer or
conveyance of the

 

2

 

estate or interest.  This policy shall not continue in force in favor of any purchaser
from the insured of either (i)  an
estate or interest in the land, or (ii) 
an indebtedness secured by a purchase money mortgage given to the insured.

 

3.       NOTICE OF CLAIM TO BE GIVEN BY INSURED
CLAIMANT.

 

The insured
shall notify the Company promptly in writing (i)  in case of any litigation as set forth in Section 4(a) below,
(ii)  in case knowledge shall come to an
insured hereunder of any claim of title or interest which is adverse to the
title to the estate or interest, as insured, and which might cause loss or
damage for which the Company may be liable by virtue of this policy, or
(iii)  if title to the estate or
interest, as insured, is rejected as unmarketable.  If prompt notice shall not be given to the Company, then as to
the insured all liability of the Company shall terminate with regard to the
matter or matters for which prompt notice is required; provided, however, that
failure to notify the Company shall in no case prejudice the rights of any
insured under this policy unless the Company shall be prejudiced by the failure
and then only to the extent of the prejudice.

 

4.       DEFENSE AND PROSECUTION
OF ACTIONS; DUTY OF INSURED CLAIMANT TO COOPERATE.

 

(a)  Upon written request by the insured and
subject to the options contained in Section 6 of these Conditions and
Stipulations, the Company, at its own cost and without unreasonable delay,
shall provide for the defense of an insured in litigation in which any third
party asserts a claim adverse to the title or interest as insured, but only as
to those stated causes of action alleging a defect, lien or encumbrance or
other matter insured against by this policy. 
The Company shall have the right to select counsel of its choice
(subject to the right of the insured to object for reasonable cause) to
represent the insured as to those stated causes of action and shall not be
liable for and will not pay the fees of any other counsel.  The Company will not pay any fees, costs or
expenses incurred by the insured in the defense of those causes of action which
allege matters not insured against by this policy.

 

(b)  The Company shall have the right, at its own
cost, to institute and prosecute any action or proceeding or to do any other
act which in its opinion may be necessary or desirable to establish the title
to the estate or interest, as insured, or to prevent or reduce loss or damage
to the insured.  The Company may take
any appropriate action under the terms of this policy, whether or not it shall
be liable hereunder, and shall not thereby concede liability or waive any
provision of this policy.  If the
Company shall exercise its rights under this paragraph, it shall do so
diligently.

 

(c)  Whenever the Company shall have brought an
action or interposed a defense as required or permitted by the provisions of
this policy, the Company may pursue any litigation to final determination by a
court of competent jurisdiction and expressly reserves the right, in its sole
discretion, to appeal from any adverse judgment or order.

 

(d)  In all cases where this policy permits or
requires the Company to prosecute or provide for the defense of any action or
proceeding, the insured shall secure to the Company the right to so prosecute
or provide defense in the action or proceeding, and all appeals therein, and
permit the Company to use, at its option, the name of the insured for this
purpose.  Whenever requested by the
Company, the insured, at the Company’s expense, shall give the Company all
reasonable aid (i)  in any action or
proceeding, securing evidence, obtaining witnesses, prosecuting or defending
the action or proceeding, or effecting settlement, and (ii)  in any other lawful act which in the opinion
of the Company may be necessary or desirable to establish the title to the
estate or interest as insured.  If the
Company is prejudiced by the failure of the insured to furnish the required
cooperation, the Company’s obligations to the insured under the policy shall
terminate, including any liability or obligation to defend, prosecute, or
continue any litigation, with regard to the matter or matters requiring such
cooperation.

 

5.       PROOF OF LOSS OR DAMAGE.

 

In addition to
and after the notices required under Section 3 of these Conditions and
Stipulations have been provided the Company, a proof of loss or damage signed
and sworn to by the insured claimant shall be furnished to the Company within
90 days after the insured claimant shall ascertain the facts giving rise to the
loss or damage.  The proof of loss or damage
shall describe the defect in, or lien or encumbrance on the title, or other
matter insured against

 

3

 

by this policy which constitutes the basis of
loss or damage and shall state, to the extent possible, the basis of
calculating the amount of the loss or damage. 
If the Company is prejudiced by the failure of the insured claimant to
provide the required proof of loss or damage, the Company’s obligations to the
insured under the policy shall terminate, including any liability or obligation
to defend, prosecute, or continue any litigation, with regard to the matter or
matters requiring such proof of loss or damage.

 

In addition,
the insured claimant may reasonably be required to submit to examination under
oath by any authorized representative of the Company and shall produce for
examination, inspection and copying, at such reasonable times and places as may
be designated by any authorized representative of the Company, all records,
books, ledgers, checks, correspondence and memoranda, whether bearing a date
before or after Date of Policy, which reasonably pertain to the loss or
damage.  Further, if requested by any
authorized representative of the Company, the insured claimant shall grant its
permission, in writing, for any authorized representative of the Company to
examine, inspect and copy all records, books, ledgers, checks, correspondence
and memoranda in the custody or control of a third party, which reasonably
pertain to the loss or damage.  All
information designated as confidential by the insured claimant provided to the
Company pursuant to this Section shall not be disclosed to others unless, in
the reasonable judgment of the Company, it is necessary in the administration
of the claim.  Failure of the insured
claimant to submit for examination under oath, produce other reasonably
requested information or grant permission to secure reasonably necessary
information from third parties as required in this paragraph, unless prohibited
by law or governmental regulation, shall terminate any liability of the Company
under this policy as to that claim.

 

6.       OPTIONS
TO PAY OR OTHERWISE SETTLE CLAIMS; TERMINATION OF LIABILITY.

 

In case of a
claim under this policy, the Company shall have the following additional
options:

 

(a)  To Pay or Tender Payment of the Amount of
Insurance.

 

To pay or
tender payment of the amount of insurance under this policy together with any
costs, attorneys’ fees and expenses incurred by the insured claimant, which
were authorized by the Company, up to the time of payment or tender of payment
and which the Company is obligated to pay.

 

Upon the
exercise by the Company of this option, all liability and obligations to the
insured under this policy, other than to make the payment required, shall
terminate, including any liability or obligation to defend, prosecute, or
continue any litigation, and the policy shall be surrendered to the Company for
cancellation.

 

4

 

(b)  To Pay or Otherwise Settle With Parties
Other than the Insured or With the Insured Claimant.

 

(i)  to pay or otherwise settle with other
parties for or in the name of an insured claimant any claim insured against
under this policy, together with any costs, attorneys’ fees and expenses
incurred by the insured claimant which were authorized by the Company up to the
time of payment and which the Company is obligated to pay; or

 

(ii)  to pay or otherwise settle with the insured
claimant the loss or damage provided for under this policy, together with any
costs, attorneys’ fees and expenses incurred by the insured claimant which were
authorized by the Company up to the time of payment and which the Company is
obligated to pay.

 

Upon the
exercise by the Company of either of the options provided for in paragraphs
(b)(i) or (ii), the Company’s obligations to the insured under this policy for
the claimed loss or damage, other than the payments required to be made, shall
terminate, including any liability or obligation to defend, prosecute or
continue any litigation.

 

7.       DETERMINATION, EXTENT OF LIABILITY AND
COINSURANCE.

 

This policy is
a contract of Indemnity against actual monetary loss or damage sustained or
incurred by the insured claimant who has suffered loss or damage by reason of
matters insured against by this policy and only to the extent herein described.

 

(a)  The liability of the Company under this
policy shall not exceed the least of:

 

(i)  the Amount of Insurance stated in Schedule
A; or

 

(ii)  the difference between the value of the
Insured estate or interest as insured and the value of the insured estate or
interest subject to the defect, lien or encumbrance insured against by this
policy.

 

(b)  In the event the Amount of Insurance stated
in Schedule A at the Date of Policy is less than 80 percent of the value of the
insured estate or interest of the full consideration paid for the land,
whichever is less, or if subsequent to the Date of Policy an improvement is
erected on the land which increases the value of the insured estate or interest
by at least 20 percent over the Amount of Insurance stated in Schedule A, then
this Policy is subject to the following:

 

(i)  where no subsequent improvement has been
made, as to any partial loss, the Company shall only pay the loss pro rata in
the proportion that the Amount of Insurance at Date of Policy bears to the
total value of the insured estate or interest at Date of Policy; or (ii) where
a subsequent improvement has been made, as to any partial loss, the Company
shall only pay the loss pro rata in the proportion that 120 percent of the
Amount of Insurance stated in Schedule A bears to the sum of the Amount of
Insurance stated in Schedule A and the amount expended for the improvement.

 

The provisions
of this paragraph shall not apply to costs, attorneys’ fees and expenses for
which the Company is liable under this policy, and shall only apply to that
portion of any loss which exceeds, in the aggregate, 10 percent of the Amount
of Insurance stated in Schedule A.

 

(c)  The Company will pay only those costs,
attorneys’ fees and expenses incurred in accordance with Section 4 of these
Conditions and Stipulations.

 

8.       APPORTIONMENT.

 

If the land
described in Schedule (A)(C) consists of two or more parcels which are not used
as a single site, and a loss is established affecting one or more of the
parcels but not all, the loss shall be computed and settled on a pro rata basis
as if the Amount of Insurance under this policy was divided pro rata as to the
value on Date of Policy of each separate parcel to the whole, exclusive of any
improvements made subsequent to Date of Policy, unless a liability or value has
otherwise been agreed upon as to each parcel by the Company and the insured at
the time of the issuance of this policy and shown by an express statement or by
an endorsement attached to this policy.

 

9.       LIMITATION OF LIABILITY.

 

(a)  If the Company establishes the title, or
removes the alleged defect, lien or encumbrance, or cures the lack of a right
of access to or from the land, or cures the claim of unmarketability of title,
all as insured.  In a reasonably
diligent manner by any method, including litigation and the completion of any
appeals therefrom, it shall have fully performed its obligations with respect
to that matter and shall not be liable

 

5

 

for any loss or damage caused thereby.

 

(b)  In the event of any litigation, including
litigation by the Company or with the Company’s consent, the Company shall have
no liability for loss or damage until there has been a final determination by a
court of competent jurisdiction, and disposition of all appeals therefrom,
adverse to the title as insured.

 

(c)  The Company shall not be liable for loss or
damage to any insured for liability voluntarily assumed by the insured in
settling any claim or suit without the prior written consent of the Company.

 

10.     REDUCTION
OF INSURANCE; REDUCTION OR TERMINATION OF LIABILITY.

 

All payments
under this policy, except payments made for costs, attorneys’ fees and
expenses, shall reduce the amount of the insurance pro tanto.

 

11.     LIABILITY NONCUMULATIVE.

 

It is
expressly understood that the Amount of Insurance under this policy shall be
reduced by any amount the Company may pay under any policy insuring a mortgage
to which exception is taken in Schedule B or to which the insured has agreed,
assumed, or taken subject, or which is hereafter executed by an insured and
which is a charge or lien on the estate or interest described or referred to in
Schedule A, and the amount so paid shall be deemed a payment under this policy
to the insured owner.

 

12.     PAYMENT OF LOSS.

 

(a)  No payment shall be made without producing
this policy for endorsement of the payment unless the policy has been lost or
destroyed, in which case proof of loss or destruction shall be furnished to the
satisfaction of the Company.

 

(b)  When liability and the extent of loss or
damage has been definitely fixed in accordance with these Conditions and
Stipulations, the loss or damage shall be payable within 30 days thereafter.

 

13.     SUBROGATION UPON PAYMENT OR SETTLEMENT.

 

(a)  The Company’s Right of Subrogation.

 

Whenever the
Company shall have settled and paid a claim under this policy, all right of
subrogation shall vest in the Company unaffected by any act of the insured
claimant. The Company shall be subrogated to and be entitled to all rights and
remedies which the insured claimant would have had against any person or
property in respect to the claim had this policy not been issued.  If requested by the Company,

 

6

 

the insured claimant shall transfer to the
Company all rights and remedies against any person or property necessary in
order to perfect this right of subrogation. 
The insured claimant shall permit the Company to sue, compromise or
settle in the name of the insured claimant and to use the name of the insured
claimant in any transaction or litigation involving these rights or remedies.

 

If a payment
on account of a claim does not fully cover the loss of the insured claimant,
the Company shall be subrogated to these rights and remedies in the proportion
which the Company’s payment bears to the whole amount of the loss.

 

If loss should
result from any act of the insured claimant, as stated above, that act shall
not void this policy, but the Company, in that event, shall be required to pay
only that part of any losses insured against by this policy which shall exceed
the amount, if any, lost to the Company by reason of the impairment by the
insured claimant of the Company’s right of subrogation.

 

(b)  The Company’s Rights Against non-Insured
Obligors.

 

The Company’s
right of subrogation against non-insured obligors shall exist and shall
include, without limitation, the rights of the insured to indemnities,
guaranties, other policies of insurance or bonds, notwithstanding any terms or
conditions contained in those instruments which provide for subrogation rights
by reason of this policy.

 

14.     ARBITRATION.

 

Unless
prohibited by applicable law, either the Company or the insured may demand
arbitration pursuant to the Title Insurance Arbitration Rules of the American
Arbitration Association.  Arbitrable
matters may include, but are not limited to, any controversy or claim between
the Company and the insured arising out of or relating to this policy, any
service of the Company in connection with its issuance or the breach of a
policy provision or other obligation. 
All arbitrable matters when the Amount of Insurance is $1,000,000 or
less shall be arbitrated at the option of either the Company or the insured.  All arbitrable matters when the Amount of
Insurance is in excess of $1,000,000 shall be arbitrated only when agreed to by
both the Company and the insured. 
Arbitration pursuant to this policy and under the Rules in effect on the
date the demand for arbitration is made or, at the option of the Insured, the
Rules in effect at Date of Policy shall be binding upon the parties.  The award may include attorneys’ fees only
if the laws of the state in which the land is located permit a court to award
attorneys’ fees to a prevailing party. 
Judgment upon the award rendered by the Arbitrator(s) may be entered in
any court having jurisdiction thereof.

 

The law of the
situs of the land shall apply to an arbitration under the Title Insurance
Arbitration Rules.

 

A copy of the
Rules may be obtained from the Company upon request.

 

15.     LIABILITY
LIMITED TO THIS POLICY; POLICY ENTIRE CONTRACT.

 

(a)  This policy together with all endorsements,
if any, attached hereto by the Company is the entire policy and contract between
the insured and the Company.  In
Interpreting any provision of this policy, this policy shall be construed as a
whole.

 

(b)  Any claim of loss or damage, whether or not
based on negligence, and which arises out of the status of the title to the
estate or interest covered hereby or by any action asserting such claim, shall
be restricted to this policy.

 

(c)  No amendment of or endorsement to this
policy can be made except by a writing endorsed hereon or attached hereto
signed by either the President, a Vice President, the Secretary, an Assistant
Secretary, or validating officer or authorized signatory of the Company.

 

16.     SEVERABILITY.

 

In the event
any provision of the policy is held invalid or unenforceable under applicable
law, the policy shall be deemed not to include that provision and all other
provisions shall remain in full force and effect.

 

17.     NOTICES, WHERE SENT.

 

All notices
required to be given the Company and any statement in writing required to be
furnished the Company shall include the number of this policy and shall be
addressed to the Company at 1 First American Way, Santa Ana, California 92707,
or to the office which issued this policy.

 

7

 

[GRAPHIC]

 

[FIRST
AMERICAN LOGO]

 

First American Title Insurance Company

 

POLICY

OF

TITLE

INSURANCE

 

[SEAL OF FIRST AMERICAN TITLE INSURANCE
COMPANY, CALIFORNIA]

 

 

110201cm

 

Form No. 1402.92

(10/17/92)

ALTA Owner’s Policy

 

SCHEDULE A

 

	
  Premium

  	
   

  	
  :

  	
  $(To be determined)

  	
   

  	
  Policy No.:

  	
   

  	
  S605935 PROFORMA

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  LEASEHOLD

  
	
  Amount of Insurance

  	
   

  	
  :

  	
  $(To be determined)

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date of Policy

  	
   

  	
  :

  	
  (To be determined)

  	
   

  	
   

  	
   

  	
   

  

 

	
  1.

  	
   

  	
  Name of Insured:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  COPART, INC., a
  California corporation

  
	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  The estate or interest in the land which is
  covered by this policy is:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  A leasehold estate as created by that
  certain lease dated
                          ,
  executed by Green Valley Building 12 LLC, a Delaware limited liability
  company, as lessor, and Copart, Inc., a California corporation, as lessee,
  disclosed by Memorandum of Lease and Options to Purchase and Right of Offer
  recorded
                          ,
  2001, Series No. 2001-                        ,
  Official Records.

  
	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  Title to the estate or interest in the land
  is vested in:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  GREEN VALLEY BUILDING 12 LLC, A Delaware
  limited liability company

  
	
   

  	
   

  	
   

  
	
  4.

  	
   

  	
  The land referred to in this policy is
  described as follows:

  

 

REAL PROPERTY in the City of Fairfield,
County of Solano, State of California, described as follows:

 

That portion of the following described
property attached as Exhibit A to the Memorandum of Lease referred to in
Schedule A:

 

All that portion of land described as
“Adjusted Lot 9”, and as set forth in that certain Notice of Minor Lot Line
Adjustment recorded June 4, 2001, Series No. 2001-57986, Solano County Records,
and further described as follows:

 

“Commencing at hereinabove mentioned Point
“A”, with said Point “A” being on the westerly right-of-way line of the
existing-Neitzel Road, as shown on the Parcel Map recorded in Book 31 of Parcel
Maps at Page 39 to 41, Solano County Records; thence leaving said westerly
right-of-way line North 84° 45’ 41” West 624.92 feet to the
beginning of a non-tangent curve concave to the northwest having a radius of
1286.50 feet and to which beginning a radial line bears South 84° 45’
41” East; thence southwesterly 1577.66 feet along said curve through a central
angle of 70° 15’ 46”; thence South 75° 30’ 05” West
200.23 feet to the beginning of a

 

First American Title

 

 

Policy No. S605935 PROFORMA

 

curve concave to the southeast having a
radius of 1713.50 feet; thence southwesterly 27.45 feet along said curve
through a central angle of 00° 55’ 04”; thence South 14°
29’ 55” East 319.33 feet; thence North 50° 04’ 09” East 16.90 feet;
thence South 38° 46’ 45” East 69.90 feet; thence South 41° 26’
15” East 44.12 feet; thence South 14° 29’ 55” East 271.83 feet;
thence along hereinabove mentioned westerly right-of-way line North 64°
50’ 00” East 359.24 feet to the beginning of a curve concave to the northwest
having a radius of 1155.00 feet; thence northeasterly 283.90 feet along said
curve through a central angle of 14° 05’ 00”; thence North 53° 04’
28” East 369.85 feet; thence North 50° 45’ 00” East 500.00 feet;
thence North 46° 13’ 02” East 277.97 feet; thence North 41°
37’ 18” East 89.77 feet; thence North 27° 24’ 18” East 89.85 feet;
thence North 12° 19’ 57” East 97.76 feet; thence North 04°
11’ 00” East 275.35 feet to the beginning of a non-tangent curve concave to the
southwest having a radius of 1168.86 feet and to which beginning a radial line
bears North 89° 53’ 11” East, thence northeasterly 227.16 feet along
said curve through a central angle of 11° 08’ 07” to the point of
commencement.”

 

A.P.Nos.:               027-370-150,
045-280-320, 045-280-330 and 045-280-300

 

2

 

Form No. 1402.92

(10/17/92)

ALTA Owner’s Policy

 

SCHEDULE B

 

EXCEPTIONS FROM COVERAGE

 

This policy does not insure against loss or
damage (and the Company will not pay costs, attorney’s fees or expenses) which
arise by reason of:

 

	
  1.

  	
  General and special taxes and assessments
  for the fiscal year 2001-2002.

  
	
   

  	
  First Installment

  	
  :

  	
   

  	
   

  	
  $22,264.99 open

  
	
   

  	
  Penalty

  	
  :

  	
   

  	
   

  	
  None

  
	
   

  	
  Second Installment

  	
  :

  	
   

  	
   

  	
  $22,264.99 open

  
	
   

  	
  Penalty

  	
  :

  	
   

  	
   

  	
  None

  
	
   

  	
  Tax Rate Area

  	
  :

  	
   

  	
   

  	
  3116

  
	
   

  	
  A. P. No.

  	
  :

  	
   

  	
   

  	
  027-370-150

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Affects

  	
  :

  	
   

  	
   

  	
  The land and other property.

  

 

	
  2.

  	
  General and special taxes and assessments
  for the fiscal year 2001-2002.

  
	
   

  	
  First Installment

  	
  :

  	
   

  	
   

  	
  $34,782.98 open

  
	
   

  	
  Penalty

  	
  :

  	
   

  	
   

  	
  None

  
	
   

  	
  Second Installment

  	
  :

  	
   

  	
   

  	
  $34,782.98 open

  
	
   

  	
  Penalty

  	
  :

  	
   

  	
   

  	
  None

  
	
   

  	
  Tax Rate Area

  	
  :

  	
   

  	
   

  	
  3053

  
	
   

  	
  A. P. No.

  	
  :

  	
   

  	
   

  	
  045-280-320

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Affects

  	
  :

  	
   

  	
   

  	
  The land and other property.

  

 

	
  3.

  	
  General and special taxes and assessments
  for the fiscal year 2001-2002.

  
	
   

  	
  First Installment

  	
  :

  	
   

  	
   

  	
  $28,480.09 open

  
	
   

  	
  Penalty

  	
  :

  	
   

  	
   

  	
  None

  
	
   

  	
  Second Installment

  	
  :

  	
   

  	
   

  	
  $28,480.09 open

  
	
   

  	
  Penalty

  	
  :

  	
   

  	
   

  	
  None

  
	
   

  	
  Tax Rate Area

  	
  :

  	
   

  	
   

  	
  3053

  
	
   

  	
  A. P. No.

  	
  :

  	
   

  	
   

  	
  045-280-330

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Affects

  	
  :

  	
   

  	
   

  	
  The land and other property.

  

 

	
  4.

  	
  General and special taxes and assessments
  for the fiscal year 2001-2002.

  
	
   

  	
  First Installment

  	
  :

  	
   

  	
   

  	
  $13,991.40 open

  
	
   

  	
  Penalty

  	
  :

  	
   

  	
   

  	
  None

  
	
   

  	
  Second Installment

  	
  :

  	
   

  	
   

  	
  $13,991.40 open

  
	
   

  	
  Penalty

  	
  :

  	
   

  	
   

  	
  None

  
	
   

  	
  Tax Rate Area

  	
  :

  	
   

  	
   

  	
  3053

  
	
   

  	
  A. P. No.

  	
  :

  	
   

  	
   

  	
  045-280-300

  

 

3

 

	
   

  	
  Affects

  	
  :

  	
   

  	
  The land and other property.

  

 

	
  5.

  	
  Supplemental taxes for the fiscal year
  2000-2001 assessed pursuant to Chapter 3.5 commencing with Section 75 of the
  California Revenue and Taxation Code.

  
	
   

  	
  First Installment

  	
  :

  	
   

  	
   

  	
  $7,877.50 unpaid, will become delinquent
  after December 10, 2001

  
	
   

  	
  Second Installment

  	
  :

  	
   

  	
   

  	
  $7,877.50 unpaid, will become delinquent
  after April 10, 2002

  
	
   

  	
  Tax Rate Area

  	
  :

  	
   

  	
   

  	
  3116

  
	
   

  	
  A. P. No.

  	
  :

  	
   

  	
   

  	
  045-280-520

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Said matter affects a portion of the land

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
  Supplemental taxes for the fiscal year
  2000-2001 assessed pursuant to Chapter 3.5 commencing with Section 75 of the
  California Revenue and Taxation Code.

  
	
   

  	
  First Installment

  	
  :

  	
   

  	
  $18,775.44 unpaid, will become delinquent
  after December 10, 2001

  
	
   

  	
  Second Installment

  	
  :

  	
   

  	
  $18,775.44 unpaid, will become delinquent
  after April 10, 2002

  
	
   

  	
  Tax Rate Area

  	
  :

  	
   

  	
  3053

  
	
   

  	
  A. P. No.

  	
  :

  	
   

  	
  045-280-480

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Said matter affects a portion of the land

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
  The lien of supplemental taxes, if any,
  assessed pursuant to Chapter 3.5 commencing with Section 75 of the California
  Revenue and Taxation Code.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
  Assessments for Green Valley - Mangels
  Boulevard Refund collected and payable with the city and county taxes.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Affects

  	
  :

  	
   

  	
  The land and other property.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.

  	
  Assessments for 1998 Reassessment Revenue
  Bond collected and payable with the city and county taxes.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Affects

  	
  :

  	
   

  	
  The land and other property.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.

  	
  The lien of special tax assessed pursuant
  to Chapter 2.5 commencing with Section 53311 of the California Government
  Code for Community Facilities District No. 5, as disclosed by Notice of
  Special Tax Lien recorded June 7, 1990 as Series No. 90-44742 of Official
  Records.

  
	
   

  	
   

  
	
  11.

  	
  The lien of special tax assessed pursuant
  to Chapter 2.5 commencing with Section 53311 of the California Government
  Code for Community Facilities District No. 2, as disclosed by Notice of
  Special Tax Lien recorded December 17, 1992 as Series No. 92-11586 of
  Official Records.

  
	
   

  	
   

  
	
  12.

  	
  The lien of special tax assessed pursuant
  to Chapter 2.5 commencing with Section 53311 of the California Government
  Code for Community Facilities District No. 3, as disclosed by Notice of
  Special Tax Lien recorded December 17, 1992 as Series No. 92-11586 of
  Official Records.

  
	
   

  	
   

  
	
  13.

  	
  An easement for water pipeline and
  incidental purposes, recorded June 3, 1927, Book 1, Page 384, Series No. 1958
  of Official Records.

  
	
   

  	
  In Favor of

  	
  :

  	
   

  	
  City of Vallejo

  
									

 

4

 

	
   

  	
   

  	
  Affects

  	
  :

  	
  The southeasterly portion of the land

  
	
   

  	
   

  	
   

  
	
  14.

  	
   

  	
  A waiver of any claims for damages by
  reason of the location, construction, landscaping or maintenance of a
  contiguous freeway, highway or roadway, as contained in the document recorded
  April 24, 1928 in Book 13, Page 323, Series No. 1542 of Official Records.

  
	
   

  	
   

  	
   

  
	
  15.

  	
   

  	
  An easement for pole line and incidental
  purposes, recorded April 17, 1931 in Book 71, Page 496, Series No. 1497 of
  Official Records.

  
	
   

  	
   

  	
  In Favor of

  	
  :

  	
  The Pacific Telephone and Telegraph Company, a corporation

  
	
   

  	
   

  	
  Affects

  	
  :

  	
  The southerly portion of the land

  
	
   

  	
   

  	
   

  
	
  16.

  	
   

  	
  An easement for pole line and incidental
  purposes, recorded April 29, 1931 as Series No. 1647, Book 72, Page 268 of
  Official Records.

  
	
   

  	
   

  	
  In Favor of

  	
  :

  	
  Great Western Power Company of California, a corporation

  
	
   

  	
   

  	
  Affects

  	
  :

  	
  A portion of the land

  
	
   

  	
   

  	
   

  
	
  17.

  	
   

  	
  An easement for crossarms, wires, cables
  and anchor and incidental purposes, recorded June 5, 1952 in Book 624, Page
  340 of Official Records.

  
	
   

  	
   

  	
  In Favor of

  	
  :

  	
  Pacific Gas and Electric Company

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Document(s) declaring modifications thereof
  recorded August 11, 1960 as Book 1038, Page 681 of Official Records.

  
	
   

  	
   

  	
   

  
	
  18.

  	
   

  	
  A waiver of any claims for damages by
  reason of the location, construction, landscaping or maintenance of a
  contiguous freeway, highway or roadway, as contained in the document recorded
  May 16, 1960 in Book 1028, Page 19, Series No. 9603 of Official Records.

  
	
   

  	
   

  	
   

  
	
  19.

  	
   

  	
  An easement for sanitary sewers and
  incidental purposes, recorded December 16, 1970 in Book 1658 as 260, Series
  No. 22671 of Official Records.

  
	
   

  	
   

  	
  In Favor of

  	
  :

  	
  City of Fairfield, a municipal corporation

  
	
   

  	
   

  	
  Affects

  	
  :

  	
  The easterly portion of the land

  
	
   

  	
   

  	
   

  
	
  20.

  	
   

  	
  An easement shown or dedicated on the map
  filed or recorded October 14, 1977, in Book 13 of Parcel Maps, Page 99

  
	
   

  	
   

  	
  For

  	
  :

  	
  Public utilities and incidental purposes.

  
	
   

  	
   

  	
  Affects

  	
  :

  	
  The southeasterly 10’ of the land

  
	
   

  	
   

  	
   

  
	
  21.

  	
   

  	
  The fact that the land lies within the
  boundaries of the Cordelia Area Redevelopment Project Area, as disclosed by
  the document recorded July 20, 1983 in Book 1983, Page 57325, Series No.
  30314 of Official Records.

  
	
   

  	
   

  	
   

  
	
  22.

  	
   

  	
  The terms and provisions contained in the
  document entitled “Development for the Upper Mangels Ranch Planned
  Development” recorded June 10, 1986 in Book 1986, Page 58179 as Series No.
  29083 of Official Records.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  FIRST AMENDMENT thereto recorded March 23,
  1990, Series No. 90-21855, Solano County Records.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SECOND AMENDMENT thereto recorded December
  13, 1996, Series No. 96-83890, Official Records.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  THIRD AMENDMENT thereto recorded February
  2, 1999, Series No. 99-9241, Official Records.

  

 

5

 

	
  23.

  	
   

  	
  An easement for sanitary sewer and
  incidental purposes, recorded March 26, 1992 as Series No. 92-24929 of
  Official Records.

  
	
   

  	
   

  	
  In Favor of

  	
  :

  	
  The City of Fairfield, a municipal corporation

  
	
   

  	
   

  	
  Affects

  	
  :

  	
  A southerly portion of the land

  
	
   

  	
   

  	
   

  
	
  24.

  	
   

  	
  An easement for pole line and incidental
  purposes, recorded February 7, 1997 as Series No. 97-7749 of Official
  Records.

  
	
   

  	
   

  	
  In Favor of

  	
  :

  	
  Pacific Gas and Electric Company, a California corporation

  
	
   

  	
   

  	
  Affects

  	
  :

  	
  A southerly portion of the land

  
	
   

  	
   

  	
   

  
	
  25.

  	
   

  	
  The terms and provisions contained in the
  document entitled “Memorandum of Agreement” by and between The Redevelopment
  Agency of the City of Fairfield and H.J. Shein, Inc., an Illinois corporation
  recorded February 18, 2000 as Series No. 2000-13446 of Official Records.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Memorandum of Agreement (First Amendment to
  Disposition and Development Agreement) by and between The Redevelopment
  Agency of the City of Fairfield and H.J. Shein, Inc., an Illinois
  corporation, recorded June 4, 2001, Series No. 2001-57980, Official Records.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Memorandum of Agreement (Second Amendment
  to Disposition and Development Agreement) by and between The Redevelopment
  Agency of the City of Fairfield and H.J. Shein, Inc., and Illinois
  corporation, recorded June 4, 2001, Series No. 2001-57983, Official Records.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Assignment and Assumption Agreement by and
  between The Redevelopment Agency of the City of Fairfield, H.J. Shein, Inc.,
  an Illinois corporation, Green Valley Building I, LLC, a Delaware limited liability
  company and Green Valley Land, LLC, a Delaware limited liability company,
  recorded June 4, 2001, Series No. 2001-57984, Official Records.

  
	
   

  	
   

  	
   

  
	
  26.

  	
   

  	
  The terms and provisions contained in the
  document entitled “Development Agreement” by and between City of Fairfield
  and H.J. Shein, Inc., an Illinois corporation recorded June 4, 2001 as Series
  No. 2001-57979 of Official Records.

  
	
   

  	
   

  	
   

  
	
  27.

  	
   

  	
  An easement shown or dedicated on the Map
  as referred to in the legal description

  
	
   

  	
   

  	
  For

  	
  :

  	
  Landscape, public service and Incidental purposes.

  
	
   

  	
   

  	
  Affects

  	
  :

  	
  The northwesterly portion of the land

  
	
   

  	
   

  	
   

  
	
  28.

  	
   

  	
  An easement shown or dedicated on the Map
  as referred to in the legal description

  
	
   

  	
   

  	
  For

  	
  :

  	
  Storm drain and incidental purposes.

  
	
   

  	
   

  	
  Affects

  	
  :

  	
  The southwesterly portion of the land

  
	
   

  	
   

  	
   

  
	
  29.

  	
   

  	
  An easement shown or dedicated on the Map
  as referred to in the legal description

  
	
   

  	
   

  	
  For

  	
  :

  	
  Sanitary sewer and incidental purposes.

  
	
   

  	
   

  	
  Affects

  	
  :

  	
  The southwesterly portion of the land

  
	
   

  	
   

  	
   

  
	
  30.

  	
   

  	
  The effect of the following matters shown
  on the filed map referred to in the legal description:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  NOTE: Location of fault zone and setback
  has approximately shown in this Map per Map prepared by “Harlan Tait
  Associates” on June 17, 1994, Figure No. 5, Project No. 1197.01 entitled
  “Site and Exploration Plan and Fault Map, North Fairfield Site, Fairfield,
  California”.

  
	
   

  	
   

  	
   

  
	
  31.

  	
   

  	
  The terms and provisions contained in the
  document entitled “Grant Deed” recorded June 4, 2001 as Series No. 2001-57987
  of Official Records.

  

 

6

 

	
  32.

  	
   

  	
  An option to purchase in favor of The
  Redevelopment Agency of the City of Fairfield, as contained in or disclosed
  by a document recorded June 4, 2001 as Series No. 2001-57987 of Official
  Records.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Said Document states that the option shall
  be subordinate and subject to and be limited by and shall not defeat, render
  invalid or limit, among other things, any leases or other agreements between
  Green Valley Land, LLC and other third party tenants and purchasers.

  
	
   

  	
   

  	
   

  
	
  33.

  	
   

  	
  The terms and provisions contained in the
  document entitled “Reimbursement Agreement” by and between The Redevelopment
  Agency of the City of Fairfield, and Green Valley Land, LLC, a Delaware
  limited liability company recorded June 4, 2001 as Series No. 2001-57989 of
  Official Records.

  
	
   

  	
   

  	
   

  
	
  34.

  	
   

  	
  Rights of parties in possession.

  
	
   

  	
   

  	
   

  
	
  35.

  	
   

  	
  Any facts, rights, interests or claims
  which would be disclosed by a correct ALTA/ACSM survey.

  
	
   

  	
   

  	
   

  
	
  36.

  	
   

  	
  Any facts, rights, interests, or claims
  which are not shown by the public records but which could be ascertained by
  an inspection of said land or by making inquiry of persons in possession
  thereof.

  
	
   

  	
   

  	
   

  
	
  37.

  	
   

  	
  Any claim by reason of the failure of Green
  Valley Building 12, LLC to acquire fee title to the leased land.

  
	
   

  	
   

  	
   

  
	
  38.

  	
   

  	
  Any failure to comply with the terms,
  provisions and conditions of the lease referred to in Schedule A.

  
	
   

  	
   

  	
   

  
	
  39.

  	
   

  	
  Any shortage in area or any discrepancy in
  the exact location the leased premises resulting from any insufficiency or
  ambiguity in the legal description contained in the documents creating or
  establishing the Lease referred to in Paragraph 2 of Schedule A.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  NOTICE: This is a pro-forma policy
  furnished to or on behalf of the party to be insured.  It neither reflects the present status of
  title, nor is it intended to be a commitment to insure.  The Inclusion of endorsements as part of
  the pro-forma policy in no way evidences the willingness of the Company to
  provide any affirmative coverage shown therein.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  There are requirements which must be met
  before a final policy can be issued in the same form as this pro-forma
  policy.  A commitment to insure
  setting forth these requirements should be obtained from the Company.

  

 

7

 

FA16.1 ENDORSEMENT

 

Attached
to Policy No. S605935

 

Issued
by

 

FIRST AMERICAN TITLE INSURANCE COMPANY

 

The policy is amended in the following
particulars:

 

	
  A.

  	
   

  	
  Paragraph 1 of the conditions and
  stipulations is amended by adding a subparagraph (h), as follows:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (h)

  	
   

  	
  “Leasehold Estate”:  The right of
  possession for the term or terms described in Schedule A hereof subject to
  any provisions contained in the Lease which limit the right of possession.

  
	
   

  	
   

  	
   

  
	
  B.

  	
   

  	
  Paragraphs 14, 15, 16 and 17 of the
  conditions and stipulations are renumbered as paragraphs 16, 17, 18 and 19.

  
	
   

  	
   

  	
   

  
	
  C.

  	
   

  	
  The conditions and stipulations are amended
  by adding paragraphs 14 and 15, as follows:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  14.

  	
   

  	
  Valuation of estate or interest insured

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  If, in computing loss or damage incurred by
  the insured, it becomes necessary to determine the value of the estate or
  interest insured by this policy, the value shall consist of the then present
  worth of the excess, if any, of the fair market rental value of the estate or
  interest, undiminished by any matters for which claim is made, for that part
  of the term stated in Schedule A herein then remaining plus any renewal or
  extended term for which a valid option to renew or extend is contained in the
  lease, over the value of the rent and other consideration required to be paid
  under the lease for the same period.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  15.

  	
   

  	
  Miscellaneous items of loss

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  In the event the insured is evicted from
  possession of all or a part of the land by reason of any matters insured
  against by this policy, the following, if applicable, shall be included in
  computing loss or damage incurred by the insured, but not to the extent that
  the same are included in the valuation of the estate or interest insured by
  this policy.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (a)

  	
   

  	
  The reasonable cost of removing and relocating
  any personal property which the insured has the right to remove and relocate,
  situated on the land at the time of eviction, the cost of transportation of
  that personal property for the initial twenty-five miles incurred in
  connection with the relocation, and the reasonable cost of the repairing the
  personal property damaged by reason of the removal and relocation. The costs
  referred to above shall not exceed in the aggregate the value of the personal
  property prior to its removal and relocation.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  “Personal property”, above referred to,
  shall mean chattels and property which because of its character and manner of
  affixation to the land, can be severed therefrom without causing appreciable
  damage to the property severed or to the land to which the property is
  affixed.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (b)

  	
   

  	
  Rent or damages for use and occupancy of
  the land prior to the eviction which the insured as owner of the leasehold
  estate may be obligated to pay to any person having paramount title to that
  of the lessor in the Lease.

  

 

 

 

	
   

  	
   

  	
  (c)

  	
   

  	
  The amount of rent which, by the terms of
  the Lease, the insured must continue to pay to the lessor after eviction for
  the land, or part thereof, from which the insured has been evicted.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (d)

  	
   

  	
  The fair market value, at the time of the
  eviction, of the estate or interest of the insured in any sublease of all or
  part of the land existing at the date of the eviction.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (e)

  	
   

  	
  Damages which the insured may be obligated
  to pay to any sublessee on account of the breach of any sublease of all or
  part of the land caused by the eviction.

  

 

This
endorsement is made a part of the policy and is subject to all of the terms and
provisions thereof and of any prior endorsements thereto.  Except to the extent expressly stated, it
neither modifies any of the terms and provisions of the policy and any prior
endorsements, nor does it extend the effective date of the policy and any prior
endorsements, nor does it increase the face amount thereof.

 

FIRST
AMERICAN TITLE INSURANCE COMPANY

 

PROFORMA

 

THIS IS A PRO
FORMA ENDORSEMENT FURNISHED TO OR ON BEHALF OF THE PARTY TO BE
INSURED.  IT NEITHER REFLECTS THE
PRESENT STATUS OF THE TITLE, NOR IS IT INTENDED TO BE A COMMITMENT TO
INSURE.  THIS ENDORSEMENT DOES NOT
EVIDENCE THE WILLINGNESS OF FIRST AMERICAN TITLE INSURANCE COMPANY TO PROVIDE
ANY AFFIRMATIVE COVERAGE SHOWN THEREIN.

 

THERE ARE
REQUIREMENTS WHICH MUST BE MET BEFORE A FINAL ENDORSEMENT CAN BE ISSUED IN THE
SAME FORM AS THIS PRO FORMA ENDORSEMENT. 
A COMMITMENT TO INSURE SETTING FORTH THESE REQUIREMENTS SHOULD BE
OBTAINED FROM THE COMPANY.

 

 

ALTA Leasehold
Owners Policy (1987 Form and later)

F.A. Form 16.1
(Effective 6/1/87)

 

 

ENDORSEMENT

 

Attached to Policy No.  PRO FORMA

 

Issued By

 

First American Title Insurance

 

The Policy is hereby amended by deleting
paragraph no. 14 from the Conditions and Stipulations.

 

This endorsement is made a part of the policy
and is subject to all of the terms and provisions thereof and of any prior
endorsements thereto.  Except to the
extent expressly stated, it neither modifies any of the terms and provisions of
the policy and any prior endorsements, nor does it extend the effective date of
the policy and any prior endorsements, nor does it increase the face amount
thereof.

 

First American Title
Insurance Company

 

	
  By:

  	
   

  	
   

  
	
   

  	
  Authorized Signatory

  

 

CLTA
110.1-Mod.

Deletion of
Arbitration Provisions Endorsement

 

 

ENDORSEMENT

 

Attached to Policy
No.         

 

Issued By

 

First American Title Insurance Company

 

The Company hereby insures against loss or
damage sustained or incurred by the Insured by reason of any of the following
matters:

 

1.             The
existence of any present violations on the land of any enforceable covenants,
conditions or restrictions;

 

2.             Except
as shown in Schedule B, any present encroachments onto the land of buildings,
structures or improvements located on adjoining lands; and 

 

3.             Unmarketability
of the title to the estate or interest by reason of any violations on the land,
occurring prior to acquisition of title to the estate or interest by the Insured,
of any covenants, conditions or restrictions.

 

Wherever in this endorsement any or all the
words "covenants, conditions or restrictions" appear, they shall not
be deemed to refer to or include the terms, covenants, conditions or
restrictions contained in any lease.

 

This endorsement is made a part of the policy
and is subject to all the terms and provisions thereof and of any prior
endorsements.  Except to the extent
expressly stated, it neither modifies any of the terms and provisions of the
Policy and any prior endorsements, nor does it extend the effective date of the
Policy and any prior endorsements, nor does it increase the face amount
thereof.

 

Date:                       

 

First
American Title Insurance Company

 

 

	
  By:

  	
   

  	
   

  
	
   

  	
  Authorized Signatory

  

 

F.A. Form 31.2 (Rev. 3/99)

ALTA - Extended Owners

(Unimproved Land)

 

 

ENDORSEMENT

 

Attached to Policy
No.         

 

Issued By

 

First American Title Insurance Company

 

The Company hereby insures the insured
against loss or damage which the insured shall sustain by reason of the failure
of the easement described as Parcel
            in
Schedule
             to
provide the owner of the estate or interest referred to in Schedule A with
ingress and egress to and from a public street known as (insert name of
street).

 

This endorsement is made a part of the policy
and is subject to all of the terms and provisions thereof and of any prior
endorsements thereto.  Except to the
extent expressly stated, it neither modifies any of the terms and provisions of
the policy and any prior endorsements, nor does it extend the effective date of
the policy and any prior endorsements, nor does it increase the face amount
thereof.

 

Date:                                    

 

First
American Title Insurance Company

 

 

	
  By:

  	
   

  	
   

  
	
   

  	
  Authorized Signatory

  

 

CLTA Form 103.4 (Rev. 6-14-96)

ALTA or CLTA - Owner or Lender

 

Printed from the First American Underwriting
Library, © Copyright 1999

 

 

ENDORSEMENT

 

Attached to Policy
No.      

 

Issued By

 

First American Title Insurance Company

 

The Company hereby insures the insured
against loss or damage which the insured shall sustain by reason of the failure
of the land described in Schedule
                      to
be contiguous to *

 

This endorsement is made a part of the policy
and is subject to all of the terms and provisions thereof and of any prior
endorsements thereto.  Except to the
extent expressly stated, it neither modifies any of the terms and provisions of
the policy and any prior endorsements, nor does it extend the effective date of
the policy and any prior endorsements, nor does it increase the face amount
thereof.

 

Date:                        

 

First
American Title Insurance Company

 

 

	
  By:

  	
   

  	
   

  
	
   

  	
  Authorized Signatory

  

 

*              Describe land contiguous to
subject land by legal description or by reference to a recorded instrument.

 

CLTA Form 116.4 (Rev. 6-14-96)

Alta or Clta-Owner or Lender

 

Printed from the First American Underwriting
Library, © Copyright 1999

 

 

ENDORSEMENT

 

Attached to Policy
No.           

 

Issued By

 

First American Title Insurance Company

 

The Company hereby insures the insured
against loss or damage which the insured shall sustain by reason of the failure
of the land described as
Parcel           in
Schedule               to
constitute a lawfully created parcel according to the Subdivision Map Act
(Section 66410, et seq., of the California Government Code) and local
ordinances adopted pursuant thereto.

 

This endorsement is made a part of the policy
and is subject to all of the terms and provisions thereof and of any prior
endorsements thereto.  Except to the
extent expressly stated, it neither modifies any of the terms and provisions of
the policy and any prior endorsements, nor does it extend the effective date of
the policy and any prior endorsements, nor does it increase the face amount
thereof.

 

Date:                            

 

First
American Title Insurance Company

 

 

	
  By:

  	
   

  	
   

  
	
   

  	
  Authorized Signatory

  

 

CLTA Form 116.7 (Rev. 6-14-96)

Subdivision Map Act Endorsement

 

Printed from the First American Underwriting
Library, © Copyright 1999

 

 

ENDORSEMENT

 

Attached to Policy
No.           

 

Issued By

 

First American Title Insurance Company

 

The Company hereby insures the insured
against loss or damage which the insured shall sustain by reason of the failure
of the covenants of the lessor in favor of the lessee, set out in
Section(s)                                                   ,
                                          
and
                                     
of the lease recorded
                                              
to do some act relating to the use, repair, maintenance or improvement of, or
payment of taxes and assessments of the real property, or some part thereof,
described as (description of burdened land of lessor) to be binding upon the
lessor and each successive owner, during his or her ownership, of any portion
of such real property, and upon each mortgagee, or trustee or beneficiary of a
deed of trust, whose interest is derived from the lessor or through any such
successive owner thereof, while such mortgagee or trustee or beneficiary is in
possession in such capacity.

 

Provided, however, that no assurance is
hereby given should such covenants fail to bind a successive owner who derives
title through: a) a tax deed; b) a foreclosure of a bond or assessment; c)
enforcement of a federal tax lien; d) bankruptcy, as trustee or otherwise; e) a
right or lien existing prior to the date of recording of the instrument
containing said covenants.

 

This endorsement does not insure against loss
or damage which the insured may sustain by reason of the nonperformance of any
said covenants.

 

This endorsement is made a part of the policy
and is subject to all of the terms and provisions thereof and of any prior
endorsements thereto.  Except to the
extent expressly stated, it neither modifies any of the terms and provisions of
the policy and any prior endorsements, nor does it extend the effective date of
the policy and any prior endorsements, nor does it increase the face amount
thereof.

 

Date:                   

 

First
American Title Insurance Company

 

 

	
  By:

  	
   

  	
   

  
	
   

  	
  Authorized Signatory

  

 

CLTA Form 124.2 (Rev. 6-14-96)

ALTA or CLTA - Lessee or Lender

 

 

ENDORSEMENT

 

Attached to Policy No.  PRO FORMA

 

Issued By

 

First American Title Insurance Company

 

	
  1.       The
  Company insures the Insured against loss or damage sustained by reason of any
  incorrectness in the assurance that, at Date of Policy:

  
	
   

  	
   

  	
   

  	
   

  
	
            (a)

  	
  According to applicable zoning ordinances
  and amendments thereto, the land is classified
  Zone                 .

  
	
   

  	
   

  	
   

  	
   

  
	
            (b)

  	
  The following use or uses are allowed under
  that classification subject to compliance with any conditions, restrictions,
  or requirements contained in the zoning ordinances and amendments thereto,
  including but not limited to the securing of necessary consents or
  authorizations as a prerequisite to the use or uses:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2.       The
  Company further insures against loss or damage arising from a final decree of
  a court of competent jurisdiction

  
	
   

  	
   

  	
   

  	
   

  
	
            (a)

  	
  prohibiting the use of the land, with any
  structure completed in accordance with the plans and specifications
  (hereinafter defined), as specified in paragraph 1(b); or

  
	
   

  	
   

  	
   

  	
   

  
	
            (b)

  	
  requiring the removal or alteration of the
  structure on the basis that, if the proposed structure were completed in
  substantial compliance with the plans and specifications by
                                 
  dated
                            ,
  said ordinances and amendments thereto would be violated with respect to any
  of the following matters:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (i)

  	
  Area, width or depth of the land as a
  building site for the structure;

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (ii)

  	
  Floor space area of the structure;

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (iii)

  	
  Setback of the structure from the property
  lines of the land;

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (iv)

  	
  Height of the structure; or

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (v)

  	
  Parking as to number of spaces.

  
					

 

 

There shall be no liability under this
endorsement based on the invalidity of the ordinances and amendments thereto
until after a final decree of a court of competent jurisdiction adjudicating
the invalidity, the effect of which is to prohibit the use or uses.

 

Loss or damage as to the matters insured
against by this endorsement shall not include loss or damage sustained or
incurred by reason of the refusal of any person to purchase, lease or lend
money on the estate or interest covered by this policy.

 

This endorsement is made a part of the policy
and is subject to all of the terms and provisions thereof and of any prior
endorsements thereto.  Except to the
extent expressly stated, it neither modifies any of the terms and provisions of
the policy and any prior endorsements, nor does it extend the effective date of
the policy and any prior endorsements, nor does it increase the face amount
thereof.

 

First
American Title Insurance Company

 

 

	
  By:

  	
   

  	
   

  	
  Dated:

  
	
   

  	
  Authorized Signatory

  

 

 

 

[GRAPHIC]

 

Form No. 1402.92

(10/17/92)

ALTA Owner’s Policy

PROFORMA POLICY
JACKET

 

LEASEHOLD

 

POLICY OF TITLE INSURANCE

 

[FIRST
AMERICAN LOGO]

 

ISSUED
BY

 

First American Title Insurance Company

 

SUBJECT TO THE EXCLUSIONS FROM COVERAGE, THE EXCEPTIONS
FROM COVERAGE CONTAINED IN SCHEDULE B AND THE CONDITIONS AND STIPULATIONS,
FIRST AMERICAN TITLE INSURANCE COMPANY, a California corporation, herein called
the Company, insures, as of Date of Policy shown in Schedule A, against loss or
damage, not exceeding the Amount of Insurance stated in Schedule A, sustained
or incurred by the insured by reason of:

 

1.                    Title to the
estate or interest described in Schedule A being vested other than as stated
therein;

 

2.                    Any defect in
or lien or encumbrance on the title;

 

3.                    Unmarketability
of the title;

 

4.                    Lack of a
right of access to and from the land.

 

The Company will also pay the costs,
attorneys’ fees and expenses incurred in defense of the title, as insured, but
only to the extent provided in the Conditions and Stipulations.

 

First American Title Insurance Company

 

	
   

  	
  BY

  	
  /s/ [ILLEGIBLE]

  	
   

  	
  PRESIDENT

  
	
   

  	
   

  
	
   

  	
  ATTEST

  	
  /s/ [ILLEGIBLE]

  	
   

  	
  SECRETARY

  

 

 

EXCLUSIONS
FROM COVERAGE

 

The following matters are expressly excluded
from the coverage of this policy and the Company will not pay loss or damage,
costs, attorneys’ fees or expenses which arise by reason of:

 

1.                                       (a)            Any law, ordinance or governmental
regulation (including but not limited to building and zoning laws, ordinances,
or regulations) restricting, regulating, prohibiting or relating to (i) the
occupancy, use, or enjoyment of the land; (ii) the character, dimensions or
location of any improvement now or hereafter erected on the land; (iii) a
separation in ownership or a change in the dimensions or area of the land or
any parcel of which the land is or was a part; or (iv) environmental
protection, or the effect of any violation of these laws, ordinances or
governmental regulations, except to the extent that a notice of the enforcement
thereof or a notice of a defect, lien or encumbrance resulting from a violation
or alleged violation affecting the land has been recorded in the public records
at Date of Policy.

(b)            Any
governmental police power not excluded by (a) above, except to the extent that
a notice of the exercise thereof or a notice of a defect, lien or encumbrance
resulting from a violation or alleged violation affecting the land has been
recorded in the public records at Date of Policy.

 

2.                                       Rights
of eminent domain unless notice of the exercise thereof has been recorded in
the public records at Date of Policy, but not excluding from coverage any
taking which has occurred prior to Date of Policy which would be binding on the
rights of a purchaser for value without knowledge.

 

3.             Defects, liens, encumbrances, adverse
claims or other matters:

 

(a)             created,
suffered, assumed or agreed to by the insured claimant;

(b)            not
known to the Company, not recorded in the public records at Date of Policy, but
known to the insured claimant and not disclosed in writing to the Company by
the insured claimant prior to the date the insured claimant became an insured
under this policy;

(c)             resulting
in no loss or damage to the insured claimant;

(d)            attaching
or created subsequent to Date of Policy; or

(e)             resulting
in loss or damage which would not have been sustained if the insured claimant
had paid value for the estate or interest insured by this policy.

 

4.                                       Any
claim, which arises out of the transaction vesting in the Insured the estate or
Interest insured by this policy, by reason of the operation of federal
bankruptcy, state Insolvency, or similar creditors’ rights laws, that is based
on:

 

(i)                the
transaction creating the estate or interest insured by this policy being deemed
a fraudulent conveyance or fraudulent transfer; or

(ii)             the
transaction creating the estate or interest insured by this policy being deemed
a preferential transfer except where the preferential transfer results from the
failure:

 

(a)              to
timely record the instrument of transfer; or

(b)             of
such recordation to impart notice to a purchaser for value or a judgment or
lien creditor.

 

CONDITIONS
AND STIPULATIONS

 

1.             DEFINITION OF TERMS.

 

The following
terms when used in this policy mean:

 

(a)                                  “insured”:
the insured named in Schedule A, and, subject to any rights or defenses the
Company would have had against the named insured, those who succeed to the
Interest of the named Insured by operation of law as distinguished from
purchase including, but not limited to, heirs, distributees, devisees,
survivors, personal representatives, next of kin, or corporate or fiduciary
successors.

 

(b)                 “insured
claimant”: an insured claiming loss or damage.

 

(c)                 “knowledge” or
“known”: actual knowledge, not constructive knowledge or notice which may be
imputed to an insured by reason of the public records as defined in this policy
or any other records which impart constructive notice of matters affecting the
land.

 

(d)                                 “land”:
the land described or referred to in Schedule (A), and improvements affixed
thereto which by law constitute real property. The term “land” does not include
any property beyond the lines of the area described or referred to in Schedule
(A), nor any right, title, interest, estate or easement in abutting streets,
roads, avenues, alleys, lanes, ways or waterways, but nothing herein shall
modify or limit the extent to which a right of access to and from the land is
insured by this policy.

 

(e)           “mortgage”: mortgage,
deed of trust, trust deed, or other security instrument.

 

(f)                  “public
records”: records established under state statutes at Date of Policy for the
purpose of imparting constructive notice of matters relating to real property
to purchasers for value and without knowledge. With respect to Section 1(a)(iv)
of the Exclusions From Coverage. 
“public records” shall also include environmental protection liens filed
in the records of the clerk of the United States district court for the
district in which the land is located.

 

(g)                                 “unmarketability
of the title”: an alleged or apparent matter affecting the title to the land,
not excluded or excepted from coverage, which would entitle a purchaser of the
estate or interest described in Schedule A to be released from the obligation
to purchase by virtue of a contractual condition requiring the delivery of
marketable title.

 

2.             CONTINUATION OF INSURANCE AFTER CONVEYANCE
OF TITLE.

 

The coverage
of this policy shall continue in force as of Date of Policy in favor of an
insured only so long as the insured retains an estate or interest in the land,
or holds an indebtedness secured by a purchase money mortgage given by a
purchaser from the insured, or only so long as the insured shall have liability
by reason of covenants of warranty made by the Insured in any transfer or
conveyance of the

 

2

 

estate or interest.  This policy shall not continue in force in favor of any purchaser
from the insured of either (i) an estate or interest in the land, or (ii) an
indebtedness secured by a purchase money mortgage given to the insured.

 

3.             NOTICE OF CLAIM TO BE GIVEN BY INSURED
CLAIMANT.

 

The insured
shall notify the Company promptly in writing (i) in case of any litigation as
set forth in Section 4(a) below, (ii) in case knowledge shall come to an
insured hereunder of any claim of title or interest which is adverse to the
title to the estate or interest, as Insured, and which might cause loss or
damage for which the Company may be liable by virtue of this policy, or (iii)
if title to the estate or interest, as insured, is rejected as unmarketable. If
prompt notice shall not be given to the Company, then as to the insured all
liability of the Company shall terminate with regard to the matter or matters
for which prompt notice is required; provided, however, that failure to notify
the Company shall in no case prejudice the rights of any insured under this
policy unless the Company shall be prejudiced by the failure and then only to
the extent of the prejudice.

 

4.                                       DEFENSE
AND PROSECUTION OF ACTIONS; DUTY OF INSURED CLAIMANT TO COOPERATE.

 

(a)                                  Upon
written request by the insured and subject to the options contained in Section
6 of these Conditions and Stipulations, the Company, at its own cost and
without unreasonable delay, shall provide for the defense of an insured in
litigation in which any third party asserts a claim adverse to the title or
interest as insured, but only as to those stated causes of action alleging a
defect, lien or encumbrance or other matter insured against by this policy. The
Company shall have the right to select counsel of its choice (subject to the
right of the insured to object for reasonable cause) to represent the insured
as to those stated causes of action and shall not be liable for and will not
pay the fees of any other counsel. The Company will not pay any fees, costs or
expenses Incurred by the insured in the defense of those causes of action which
allege matters not insured against by this policy.

 

(b)                                 The
Company shall have the right, at its own cost, to institute and prosecute any
action or proceeding or to do any other act which in its opinion may be
necessary or desirable to establish the title to the estate or interest, as
insured, or to prevent or reduce loss or damage to the insured.  The Company may take any appropriate action
under the terms of this policy, whether or not it shall be liable hereunder,
and shall not thereby concede liability or waive any provision of this policy.
If the Company shall exercise its rights under this paragraph, it shall do so
diligently.

 

(c)                                  Whenever
the Company shall have brought an action or interposed a defense as required or
permitted by the provisions of this policy, the Company may pursue any
litigation to final determination by a court of competent jurisdiction and
expressly reserves the right, in its sole discretion, to appeal from any
adverse judgment or order.

 

(d)                                 In
all cases where this policy permits or requires the Company to prosecute or
provide for the defense of any action or proceeding, the insured shall secure
to the Company the right to so prosecute or provide defense in the action or
proceeding, and all appeals therein, and permit the Company to use, at its
option, the name of the insured for this purpose. Whenever requested by the
Company, the insured, at the Company’s expense, shall give the Company all
reasonable aid (i) in any action or proceeding, securing evidence, obtaining
witnesses, prosecuting or defending the action or proceeding, or effecting
settlement, and (ii) in any other lawful act which in the opinion of the
Company may be necessary or desirable to establish the title to the estate or
interest as insured. If the Company is prejudiced by the failure of the insured
to furnish the required cooperation, the Company’s obligations to the insured
under the policy shall terminate, including any liability or obligation to
defend, prosecute, or continue any litigation, with regard to the matter or
matters requiring such cooperation.

 

5.             PROOF OF LOSS OR DAMAGE.

 

In addition to
and after the notices required under Section 3 of these Conditions and
Stipulations have been provided the Company, a proof of loss or damage signed
and sworn to by the insured claimant shall be furnished to the Company within
90 days after the insured claimant shall ascertain the facts giving rise to the
loss or damage. The proof of loss or damage shall describe the defect in, or
lien or encumbrance on the title, or other matter insured against 

 

3

 

by this policy which constitutes the basis of
loss or damage and shall state, to the extent possible, the basis of
calculating the amount of the loss or damage. If the Company is prejudiced by
the failure of the insured claimant to provide the required proof of loss or
damage, the Company’s obligations to the insured under the policy shall terminate,
including any liability or obligation to defend, prosecute, or continue any
litigation, with regard to the matter or matters requiring such proof of loss
or damage.

 

In addition,
the insured claimant may reasonably be required to submit to examination under
oath by any authorized representative of the Company and shall produce for
examination, inspection and copying, at such reasonable times and places as may
be designated by any authorized representative of the Company, all records,
books, ledgers, checks, correspondence and memoranda, whether bearing a date
before or after Date of Policy, which reasonably pertain to the loss or damage.
Further, if requested by any authorized representative of the Company, the
insured claimant shall grant its permission, in writing, for any authorized
representative of the Company to examine, inspect and copy all records, books,
ledgers, checks, correspondence and memoranda in the custody or control of a
third party, which reasonably pertain to the loss or damage. All information
designated as confidential by the insured claimant provided to the Company
pursuant to this Section shall not be disclosed to others unless, in the
reasonable judgment of the Company.  It
is necessary in the administration of the claim. Failure of the insured
claimant to submit for examination under oath, produce other reasonably
requested information or grant permission to secure reasonably necessary
information from third parties as required in this paragraph, unless prohibited
by law or governmental regulation, shall terminate any liability of the Company
under this policy as to that claim.

 

6.                                       OPTIONS
TO PAY OR OTHERWISE SETTLE CLAIMS; TERMINATION OF LIABILITY.

 

In case of a
claim under this policy, the Company shall have the following additional
options:

 

(a)                                  To
Pay or Tender Payment of the Amount of Insurance.

 

To pay or
tender payment of the amount of insurance under this policy together with any
costs, attorneys’ fees and expenses incurred by the insured claimant, which
were authorized by the Company, up to the time of payment or tender of payment
and which the Company is obligated to pay.

 

Upon the
exercise by the Company of this option, all liability and obligations to the
insured under this policy, other than to make the payment required, shall
terminate, including any liability or obligation to defend, prosecute, or
continue any litigation, and the policy shall be surrendered to the Company for
cancellation.

 

4

 

(b)                                 To
Pay or Otherwise Settle With Parties Other than the Insured or With the Insured
Claimant.

 

(i)                  to pay or
otherwise settle with other parties for or in the name of an insured claimant
any claim insured against under this policy, together with any costs,
attorneys’ fees and expenses incurred by the insured claimant which were
authorized by the Company up to the time of payment and which the Company is
obligated to pay; or

 

(ii)               to pay or otherwise
settle with the insured claimant the loss or damage provided for under this
policy, together with any costs, attorneys’ fees and expenses incurred by the
insured claimant which were authorized by the Company up to the time of payment
and which the Company is obligated to pay.

 

Upon the
exercise by the Company of either of the options provided for in paragraphs
(b)(i) or (ii), the Company’s obligations to the insured under this policy for
the claimed loss or damage, other than the payments required to be made, shall
terminate, including any liability or obligation to defend, prosecute or continue
any litigation.

 

7.             DETERMINATION, EXTENT OF LIABILITY AND
COINSURANCE.

 

This policy is
a contract of indemnity against actual monetary loss or damage sustained or
incurred by the insured claimant who has suffered loss or damage by reason of
matters insured against by this policy and only to the extent herein described.

 

(a)                                  The
liability of the Company under this policy shall not exceed the least of:

 

(i)                  the Amount of
Insurance stated in Schedule A; or

 

(ii)               the difference
between the value of the insured estate or interest as insured and the value of
the insured estate or interest subject to the defect, lien or encumbrance
insured against by this policy.

 

(b)                                 In
the event the Amount of Insurance stated in Schedule A at the Date of Policy is
less than 80 percent of the value of the insured estate or interest of the full
consideration paid for the land, whichever is less, or if subsequent to the
Date of Policy an improvement is erected on the land which increases the value
of the insured estate or interest by at least 20 percent over the Amount of
Insurance stated in Schedule A, then this Policy is subject to the following:

 

(i)                  where no
subsequent improvement has been made, as to any partial loss, the Company shall
only pay the loss pro rata in the proportion that the Amount of Insurance at
Date of Policy bears to the total value of the insured estate or interest at
Date of Policy; or (ii) where a subsequent improvement has been made, as to any
partial loss, the Company shall only pay the loss pro rata in the proportion
that 120 percent of the Amount of Insurance stated in Schedule A bears to the
sum of the Amount of Insurance stated in Schedule A and the amount expended for
the improvement.

 

The provisions
of this paragraph shall not apply to costs, attorneys’ fees and expenses for
which the Company is liable under this policy, and shall only apply to that
portion of any loss which exceeds, in the aggregate, 10 percent of the Amount
of Insurance stated in Schedule A.

 

(c)                                  The
Company will pay only those costs, attorneys’ fees and expenses incurred in
accordance with Section 4 of these Conditions and Stipulations.

 

8.             APPORTIONMENT.

 

If the land
described in Schedule (A)(C) consists of two or more parcels which are not used
as a single site, and a loss is established affecting one or more of the
parcels but not all, the loss shall be computed and settled on a pro rata basis
as if the Amount of Insurance under this policy was divided pro rata as to the
value on Date of Policy of each separate parcel to the whole, exclusive of any
improvements made subsequent to Date of Policy, unless a liability or value has
otherwise been agreed upon as to each parcel by the Company and the insured at
the time of the issuance of this policy and shown by an express statement or by
an endorsement attached to this policy.

 

9.             LIMITATION OF LIABILITY.

 

(a)                                  If
the Company establishes the title, or removes the alleged defect, lien or
encumbrance, or cures the lack of a right of access to or from the land, or
cures the claim of unmarketability of title, all as insured.  In a reasonably diligent manner by any
method, including litigation and the completion of any appeals therefrom, it
shall have fully performed its obligations with respect to that matter and
shall not be liable 

 

5

 

for any loss or damage caused thereby.

 

(b)                                 In
the event of any litigation, including litigation by the Company or with the
Company’s consent, the Company shall have no liability for loss or damage until
there has been a final determination by a court of competent jurisdiction, and
disposition of all appeals therefrom, adverse to the title as insured.

 

(c)                                  The
Company shall not be liable for loss or damage to any insured for liability
voluntarily assumed by the insured in settling any claim or suit without the
prior written consent of the Company.

 

10.                                 REDUCTION
OF INSURANCE; REDUCTION OR TERMINATION OF LIABILITY.

 

All payments
under this policy, except payments made for costs, attorneys’ fees and
expenses, shall reduce the amount of the insurance pro tanto.

 

11.           LIABILITY NONCUMULATIVE.

 

It is
expressly understood that the Amount of Insurance under this policy shall be
reduced by any amount the Company may pay under any policy insuring a mortgage
to which exception is taken in Schedule B or to which the insured has agreed,
assumed, or taken subject, or which is hereafter executed by an insured and
which is a charge or lien on the estate or interest described or referred to in
Schedule A, and the amount so paid shall be deemed a payment under this policy
to the insured owner.

 

12.           PAYMENT OF LOSS.

 

(a)                                  No
payment shall be made without producing this policy for endorsement of the
payment unless the policy has been lost or destroyed, in which case proof of
loss or destruction shall be furnished to the satisfaction of the Company.

 

(b)                                 When
liability and the extent of loss or damage has been definitely fixed in
accordance with these Conditions and Stipulations, the loss or damage shall be
payable within 30 days thereafter.

 

13.           SUBROGATION UPON PAYMENT OR SETTLEMENT.

 

(a)                                  The
Company’s Right of Subrogation.

Whenever the
Company shall have settled and paid a claim under this policy, all right of
subrogation shall vest in the Company unaffected by any act of the insured
claimant. The Company shall be subrogated to and be entitled to all rights and
remedies which the insured claimant would have had against any person or
property in respect to the claim had this policy not been issued.  If requested by the Company,

 

6

 

the insured claimant shall transfer to the
Company all rights and remedies against any person or property necessary in
order to perfect this right of subrogation. The insured claimant shall permit
the Company to sue, compromise or settle in the name of the insured claimant
and to use the name of the insured claimant in any transaction or litigation
involving these rights or remedies.

 

If a payment
on account of a claim does not fully cover the loss of the insured claimant,
the Company shall be subrogated to these rights and remedies in the proportion
which the Company’s payment bears to the whole amount of the loss.

 

If loss should
result from any act of the insured claimant, as stated above, that act shall
not void this policy, but the Company, in that event, shall be required to pay
only that part of any losses insured against by this policy which shall exceed
the amount, if any, lost to the Company by reason of the impairment by the
insured claimant of the Company’s right of subrogation.

 

(b)                                 The
Company’s Rights Against non-insured Obligors.

The Company’s
right of subrogation against non-insured obligors shall exist and shall
include, without limitation, the rights of the insured to indemnities,
guaranties, other policies of insurance or bonds, notwithstanding any terms or
conditions contained in those instruments which provide for subrogation rights
by reason of this policy.

 

14.           ARBITRATION.

 

Unless
prohibited by applicable law, either the Company or the insured may demand
arbitration pursuant to the Title Insurance Arbitration Rules of the American
Arbitration Association. Arbitrable matters may include, but are not limited
to, any controversy or claim between the Company and the insured arising out of
or relating to this policy, any service of the Company in connection with its
issuance or the breach of a policy provision or other obligation. All
arbitrable matters when the Amount of Insurance is $1,000,000 or less shall be
arbitrated at the option of either the Company or the insured. All arbitrable
matters when the Amount of Insurance is in excess of $1,000,000 shall be
arbitrated only when agreed to by both the Company and the insured. Arbitration
pursuant to this policy and under the Rules in effect on the date the demand
for arbitration is made or, at the option of the insured, the Rules in effect
at Date of Policy shall be binding upon the parties. The award may include
attorneys’ fees only if the laws of the state in which the land is located
permit a court to award attorneys’ fees to a prevailing party. Judgment upon
the award rendered by the Arbitrator(s) may be entered in any court having
jurisdiction thereof.

 

The law of the
situs of the land shall apply to an arbitration under the Title Insurance Arbitration
Rules.

 

A copy of the
Rules may be obtained from the Company upon request.

 

15.           LIABILITY LIMITED TO THIS POLICY; POLICY
ENTIRE CONTRACT.

 

(a)                                  This
policy together with all endorsements, if any, attached hereto by the Company
is the entire policy and contract between the insured and the Company.  In interpreting any provision of this
policy, this policy shall be construed as a whole.

 

(b)                                 Any
claim of loss or damage, whether or not based on negligence, and which arises
out of the status of the title to the estate or interest covered hereby or by
any action asserting such claim, shall be restricted to this policy.

 

(c)                                  No
amendment of or endorsement to this policy can be made except by a writing
endorsed hereon or attached hereto signed by either the President, a Vice
President, the Secretary, an Assistant Secretary, or validating officer or
authorized signatory of the Company.

 

16.           SEVERABILITY.

 

In the event
any provision of the policy is held invalid or unenforceable under applicable
law, the policy shall be deemed not to include that provision and all other
provisions shall remain in full force and effect.

 

17.           NOTICES, WHERE SENT.

 

All notices
required to be given the Company and any statement in writing required to be
furnished the Company shall include the number of this policy and shall be
addressed to the Company at 1 First American Way, Santa Ana, California 92707,
or to the office which issued this policy.

 

7

 

[GRAPHIC]

 

[FIRST
AMERICAN LOGO]

 

First American Title Insurance Company

 

POLICY

OF

TITLE

INSURANCE

 

[SEAL OF FIRST AMERICAN TITLE INSURANCE
COMPANY, CALIFORNIA]

 

8

 

110201cm

 

Form No. 1402.92

(10/17/92)

ALTA Owner’s Policy

 

SCHEDULE A

 

	
  Premium

  	
   

  	
  :

  	
  $(To be determined)

  	
   

  	
  Policy No:

  	
   

  	
  S605935 PROFORMA

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  OPTIONEE

  
	
  Amount of Insurance

  	
   

  	
  :

  	
  $(To be determined)

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date of Policy

  	
   

  	
  :

  	
  (To be determined)

  	
   

  	
   

  	
   

  	
   

  

 

1.             Name of Insured:

 

COPART,
INC., a California corporation

 

2.             The estate or interest in the land which
is covered by this policy is:

 

A leasehold
estate as created by that certain lease dated
                      ,
executed by Green Valley Building 12 LLC, a Delaware limited liability company,
as lessor, and Copart, Inc., a California corporation, as lessee, disclosed by
Memorandum of Lease and Options to Purchase and Right of Offer recorded
                    ,
2001,  Series No.
2001-                       ,
Official Records.

 

3.             Title to the estate or interest in the
land is vested in:

 

GREEN VALLEY
BUILDING 12 LLC, a Delaware limited liability company

 

4.             The land referred to in this policy is
described as follows:

 

REAL PROPERTY in the City of Fairfield,
County of Solano, State of California, described as follows:

 

That portion of the following described
property attached as Exhibit A to the Memorandum of Lease referred to in
Schedule A:

 

All that portion of land described as
“Adjusted Lot 9”, and as set forth in that certain Notice of Minor Lot Line
Adjustment recorded June 4, 2001, Series No. 2001-57986, Solano County Records,
and further described as follows:

 

“Commencing at hereinabove mentioned Point
“A”, with said Point “A” being on the westerly right-of-way line of the
existing-Neitzel Road, as shown on the Parcel Map recorded in Book 31 of Parcel
Maps at Page 39 to 41, Solano County Records; thence leaving said westerly
right-of-way line North 84°
45’ 41” West 624.92 feet to the beginning of a non-tangent curve concave to the
northwest having a radius of 1286.50 feet and to which beginning a radial line
bears South 84°
45’ 41” East; thence southwesterly 1577.66 feet along said curve through a
central angle of 70° 15’ 46”; thence South 75°
30’ 05” West 200.23 feet to the beginning of a

 

 

9

 

Policy
No. S605935 PROFORMA

 

curve concave to the southeast having a
radius of 1713.50 feet; thence southwesterly 27.45 feet along said curve
through a central angle of 00°
55’ 04”; thence South 14° 29’ 55” East 319.33 feet; thence North 50°
04' 09” East 16.90 feet; thence South 38°
46’ 45” East 69.90 feet; thence South 41°
26’ 15” East 44.12 feet; thence South 14°
29’ 55” East 271.83 feet; thence along hereinabove mentioned westerly
right-of-way line North 64° 50’ 00” East 359.24 feet to the beginning of a
curve concave to the northwest having a radius of 1155.00 feet; thence
northeasterly 283.90 feet along said curve through a central angle of 14°
05’ 00”; thence North 53° 04’ 28” East 369.85 feet; thence North 50°
45’ 00” East 500.00 feet; thence North 46°
13’ 02” East 277.97 feet; thence North 41°
37’ 18” East 89.77 feet; thence North 27°
24’ 18” East 89.85 feet; thence North 12°
19’ 57” East 97.76 feet; thence North 04°
11’ 00” East 275.35 feet to the beginning of a non-tangent curve concave to the
southwest having a radius of 1168.86 feet and to which beginning a radial line
bears North 89°
53’ 11” East; thence northeasterly 227.16 feet along said curve through a
central angle of 11° 08’ 07” to the point of commencement.”

 

A.P.Nos.:               027-370-150, 045-280-320, 045-280-330
and 045-280-300

 

10

 

Form No. 1402.92

(10/17/92)

ALTA Owner’s Policy

 

SCHEDULE B

 

EXCEPTIONS FROM COVERAGE

 

This policy does not insure against loss or
damage (and the Company will not pay costs, attorney’s fees or expenses) which
arise by reason of:

 

1.             General and special taxes and assessments
for the fiscal year 2001-2002.

	
  First Installment

  	
  :

  	
  $22,264.99 open

  
	
  Penalty

  	
  :

  	
  None

  
	
  Second Installment

  	
  :

  	
  $22,264.99 open

  
	
  Penalty

  	
  :

  	
  None

  
	
  Tax Rate Area

  	
  :

  	
  3116

  
	
  A. P. No.

  	
  :

  	
  027-370-150

  
	
   

  	
   

  	
   

  
	
  Affects

  	
  :

  	
  The land and other property.

  

 

2.             General and special taxes and assessments
for the fiscal year 2001-2002.

	
  First Installment

  	
  :

  	
  $34,782.98 open

  
	
  Penalty

  	
  :

  	
  None

  
	
  Second Installment

  	
  :

  	
  $34,782.98 open

  
	
  Penalty

  	
  :

  	
  None

  
	
  Tax Rate Area

  	
  :

  	
  3053

  
	
  A. P. No.

  	
  :

  	
  045-280-320

  
	
   

  	
   

  	
   

  
	
  Affects

  	
  :

  	
  The land and other property.

  

 

3.             General and special taxes and assessments
for the fiscal year 2001-2002.

	
  First Installment

  	
  :

  	
  $28,480.09 open

  
	
  Penalty

  	
  :

  	
  None

  
	
  Second Installment

  	
  :

  	
  $28,480.09 open

  
	
  Penalty

  	
  :

  	
  None

  
	
  Tax Rate Area

  	
  :

  	
  3053

  
	
  A. P. No.

  	
  :

  	
  045-280-330

  
	
   

  	
   

  	
   

  
	
  Affects

  	
  :

  	
  The land and other property.

  

 

4.             General and special taxes and assessments
for the fiscal year 2001-2002.

	
  First Installment

  	
  :

  	
  $13,991.40 open

  
	
  Penalty

  	
  :

  	
  None

  
	
  Second Installment

  	
  :

  	
  $13,991.40 open

  
	
  Penalty

  	
  :

  	
  None

  
	
  Tax Rate Area

  	
  :

  	
  3053

  
	
  A. P. No.

  	
  :

  	
  045-280-300

  
	
   

  	
   

  	
   

  
	
  Affects

  	
  :

  	
  The land and other property.

  

 

11

 

5.                                       Supplemental
taxes for the fiscal year 2000-2001 assessed pursuant to Chapter 3.5 commencing
with Section 75 of the California Revenue and Taxation Code.

	
  First Installment

  	
  :

  	
  $7,877.50 unpaid, will become delinquent
  after December 10, 2001

  
	
  Second Installment

  	
  :

  	
  $7,877.50 unpaid, will become delinquent
  after April 10, 2002

  
	
  Tax Rate Area

  	
  :

  	
  3116

  
	
  A. P. No.

  	
  :

  	
  045-280-520

  

 

Said matter
affects a portion of the land

 

6.                                       Supplemental
taxes for the fiscal year 2000-2001 assessed pursuant to Chapter 3.5 commencing
with Section 75 of the California Revenue and Taxation Code.

	
  First Installment

  	
  :

  	
  $18,775.44 unpaid, will become delinquent
  after December 10, 2001

  
	
  Second Installment

  	
  :

  	
  $18,775.44 unpaid, will become delinquent
  after April 10, 2002

  
	
  Tax Rate Area

  	
  :

  	
  3053

  
	
  A. P. No.

  	
  :

  	
  045-280-480

  

 

Said matter
affects a portion of the land

 

7.                                       The
lien of supplemental taxes, if any, assessed pursuant to Chapter 3.5 commencing
with Section 75 of the California Revenue and Taxation Code.

 

8.                                       Assessments
for Green Valley - Mangels Boulevard Refund collected and payable with the city
and county taxes.

 

	
  Affects

  	
  :

  	
  The land and other property.

  

 

9.                                       Assessments
for 1998 Reassessment Revenue Bond collected and payable with the city and
county taxes.

 

	
  Affects

  	
  :

  	
  The land and other property.

  

 

10.                                 The
lien of special tax assessed pursuant to Chapter 2.5 commencing with Section
53311 of the California Government Code for Community Facilities District No.
5, as disclosed by Notice of Special Tax Lien recorded June 7, 1990 as Series
No. 90-44742 of Official Records.

 

11.                                 The
lien of special tax assessed pursuant to Chapter 2.5 commencing with Section
53311 of the California Government Code for Community Facilities District No.
2, as disclosed by Notice of Special Tax Lien recorded December 17, 1992 as
Series No. 92-11586 of Official Records.

 

12.                                 The
lien of special tax assessed pursuant to Chapter 2.5 commencing with Section
53311 of the California Government Code for Community Facilities District No.
3, as disclosed by Notice of Special Tax Lien recorded December 17, 1992 as
Series No. 92-11586 of Official Records.

 

13.                                 An
easement for water pipeline and incidental purposes, recorded June 3, 1927,
Book 1, Page 384, Series No. 1958 of Official Records.

 

	
  In Favor of

  	
  :

  	
  City of Vallejo

  

 

12

 

	
  Affects

  	
  :

  	
  The southeasterly portion of the land

  

 

14.                                 A
waiver of any claims for damages by reason of the location, construction,
landscaping or maintenance of a contiguous freeway, highway or roadway, as
contained in the document recorded April 24, 1928 in Book 13, Page 323, Series
No. 1542 of Official Records.

 

15.                                 An
easement for pole line and incidental purposes, recorded April 17, 1931 in Book
71, Page 496, Series No. 1497 of Official Records.

	
  In Favor of

  	
  :

  	
  The Pacific Telephone and Telegraph
  Company, a corporation

  
	
  Affects

  	
  :

  	
  The southerly portion of the land

  

 

16.                                 An
easement for pole line and incidental purposes, recorded April 29, 1931 as
Series No. 1647, Book 72, Page 268 of Official Records.

	
  In Favor of

  	
  :

  	
  Great Western Power Company of California,
  a corporation

  
	
  Affects

  	
  :

  	
  A portion of the land

  

 

17.                                 An
easement for crossarms, wires, cables and anchor and incidental purposes,
recorded June 5, 1952 in Book 624, Page 340 of Official Records.

	
  In Favor of

  	
  :

  	
  Pacific Gas and Electric Company

  

 

Document(s)
declaring modifications thereof recorded August 11, 1960 as Book 1038, Page 681
of Official Records.

 

18.                                 A
waiver of any claims for damages by reason of the location, construction,
landscaping or maintenance of a contiguous freeway, highway or roadway, as
contained in the document recorded May 16, 1960 in Book 1028, Page 19, Series
No. 9603 of Official Records.

 

19.                                 An
easement for sanitary sewers and incidental purposes, recorded December 16,
1970 in Book 1658 as 260, Series No. 22671 of Official Records.

	
  In Favor of

  	
  :

  	
  City of Fairfield, a municipal corporation

  
	
  Affects

  	
  :

  	
  The easterly portion of the land

  

 

20.                                 An
easement shown or dedicated on the map filed or recorded October 14, 1977, in
Book 13 of Parcel Maps, Page 99

	
  For

  	
  :

  	
  Public utilities and incidental purposes.

  
	
  Affects

  	
  :

  	
  The southeasterly 10’ of the land

  

 

21.                                 The
fact that the land lies within the boundaries of the Cordelia Area
Redevelopment Project Area, as disclosed by the document recorded July 20, 1983
in Book 1983, Page 57325, Series No. 30314 of Official Records.

 

22.                                 The
terms and provisions contained in the document entitled  “Development for the Upper Mangels Ranch
Planned Development” recorded June 10, 1986 in Book 1986, Page 58179 as Series
No. 29083 of Official Records.

 

FIRST
AMENDMENT thereto recorded March 23, 1990, Series No. 90-21855, Solano County
Records.

 

SECOND
AMENDMENT thereto recorded December 13, 1996, Series No. 96-83890, Official
Records.

 

THIRD
AMENDMENT thereto recorded February 2, 1999, Series No. 99-9241, Official
Records.

 

13

 

23.                                 An
easement for sanitary sewer and incidental purposes, recorded March 26, 1992 as
Series No. 92-24929 of Official Records.

	
  In Favor of

  	
  :

  	
  The City of Fairfield, a municipal
  corporation

  
	
  Affects

  	
  :

  	
  A southerly portion of the land

  

 

24.                                 An
easement for pole line and incidental purposes, recorded February 7, 1997 as
Series No. 97-7749 of Official Records.

	
  In Favor of

  	
  :

  	
  Pacific Gas and Electric Company, a
  California corporation

  
	
  Affects

  	
  :

  	
  A southerly portion of the land

  

 

25.                                 The
terms and provisions contained in the document entitled “Memorandum of
Agreement” by and between The Redevelopment Agency of the City of Fairfield and
H.J. Shein, Inc., and Illinois corporation recorded February 18, 2000 as Series
No. 2000-13446 of Official Records.

 

Memorandum of
Agreement (First Amendment to Disposition and Development Agreement) by and
between The Redevelopment Agency of the City of Fairfield and H.J. Shein, Inc.,
an Illinois corporation, recorded June 4, 2001, Series No. 2001-57980, Official
Records.

 

Memorandum of
Agreement (Second Amendment to Disposition and Development Agreement) by and
between The Redevelopment Agency of the City of Fairfield and H.J. Shein, Inc.,
an Illinois corporation, recorded June 4, 2001, Series No. 2001-57983, Official
Records.

 

Assignment and
Assumption Agreement by and between The Redevelopment Agency of the City of
Fairfield, H.J. Shein, Inc., an Illinois corporation, Green Valley, Building I,
LLC, a Delaware limited liability company and Green Valley Land, LLC, a
Delaware limited liability company, recorded June 4, 2001, Series No.
2001-57984, Official Records.

 

26.                                 The
terms and provisions contained in the document entitled “Development Agreement”
by and between City of Fairfield and H.J. Shein, Inc., and Illinois corporation
recorded June 4, 2001 as Series No. 2001-57979 of Official Records.

 

27.                                 An
easement shown or dedicated on the Map as referred to in the legal description

	
  For

  	
  :

  	
  Landscape, public service and incidental
  purposes.

  
	
  Affects

  	
  :

  	
  The northwesterly portion of the land

  

 

28.                                 An
easement shown or dedicated on the Map as referred to in the legal description

	
  For

  	
  :

  	
  Storm drain and incidental purposes.

  
	
  Affects

  	
  :

  	
  The southwesterly portion of the land

  

 

29.                                 An
easement shown or dedicated on the Map as referred to in the legal description

	
  For

  	
  :

  	
  Sanitary sewer and incidental purposes.

  
	
  Affects

  	
  :

  	
  The southwesterly portion of the land

  

 

30.                                 The
effect of the following matters shown on the filed map referred to in the legal
description:

 

NOTE: Location
of fault zone and setback has approximately shown in this Map per Map prepared
by “Harlan Tait Associates” on June 17, 1994, Figure No. 5, Project No. 1197.01
entitled “Site and Exploration Plan and Fault Map, North Fairfield Site, Fairfield,
California”.

 

31.                                 The
terms and provisions contained in the document entitled  “Grant Deed” recorded June 4, 2001 as Series
No. 2001-57987 of Official Records.

 

14

 

32.                                 An
option to purchase in favor of The Redevelopment Agency of the City of
Fairfield, as contained in or disclosed by a document recorded June 4, 2001 as
Series No. 2001-57987 of Official Records.

 

Said Document
states that the option shall be subordinate and subject to and be limited by
and shall not defeat, render invalid or limit, among other things, any leases
or other agreements between Green Valley Land, LLC and other third party
tenants and purchasers.

 

33.                                 The
terms and provisions contained in the document entitled “Reimbursement Agreement”
by and between The Redevelopment Agency of the City of Fairfield, and Green
Valley Land, LLC, a Delaware limited liability company recorded June 4, 2001 as
Series No. 2001-57989 of Official Records.

 

34.                                 Rights
of parties in possession.

 

35.                                 Any
facts, rights, interests or claims which would be disclosed by a correct
ALTA/ACSM survey.

 

36.                                 Any
facts, rights, interests or claims which are not shown by the public records
but which could be ascertained by an inspection of said land or by making inquiry
of persons in possession thereof.

 

37.                                 Any
claim by reason of the failure of Green Valley Building 12, LLC to acquire fee
title to the leased land.

 

38.                                 Any
failure to comply with the terms, provisions and conditions of the lease
referred to in Schedule A.

 

39.                                 Any
shortage in area or any discrepancy in the exact location the leased premises
resulting from any insufficiency or ambiguity in the legal description
contained in the documents creating or establishing the Lease referred to in
Paragraph 2 of Schedule A.

 

40.                                 Terms,
provisions and conditions of the Options to Purchase, and any failure to comply
with same, as contained in the Office Lease dated
              ,
executed by Green Valley Building 12, LLC. as Optionor, and Copart, Inc., a
California corporation, as Optionee, disclosed by Memorandum of Lease and
Options to Purchase and Right of Offer recorded
                  ,
2001, Series No. 2001-                     ,
Official Records.

 

NOTICE:  This is a pro-forma policy furnished to or
on behalf of the party to be insured. 
It neither reflects the present status of title, nor is it intended to
be a commitment to insure.  The
inclusion of endorsements as part of the pro-forma policy in no way evidences
the willingness of the Company to provide any affirmative coverage shown
therein.

 

There are
requirements which must be met before a final policy can be issued in the same
form as this pro-forma policy.  A
commitment to insure setting forth these requirements should be obtained from
the Company.

 

15

 

FA19 ENDORSEMENT

 

Attached to Policy No.  S605935 PROFORMA

 

Issued by

 

FIRST AMERICAN TITLE INSURANCE COMPANY

 

With respect to the options to purchase
referred to in paragraph 40 of Schedule B (individually, the “Option” and
collectively, the “Options”), the Options are hereby incorporated into Schedule
A of the policy as an interest secured thereby, and the Company further insures
the insured against loss or damages sustained or incurred by the insured by reason
of:

 

(1)                        The
unenforceability of the Option, except to the extent that such unenforceability
or claim thereof is based on the failure of the insured to have fulfilled the
terms and conditions of the Options.

(2)                        The
priority over the Option of any conveyance made of the fee simple estate in the
land or any liens or encumbrances created thereon after the Date of Policy,
excepting any such liens or encumbrances that would affect the insured had the
insured been the owner of the fee simple title instead of the Option as of the
Date of Policy, including without limitations, real estate taxes, special
assessments, demolition liens, drainage liens and water tax liens, or any
right, title and interest in the land derived thereunder.

(3)                        The entry
of any court order or judgment which constitutes a final determination and
requires the insured, as a condition to receiving specific performance of the
Option, to pay a sum in excess of the Option price, in addition to attorneys’
fees and all costs of litigation.

 

Nothing contained in this endorsement shall
be construed as insuring the insured against loss or damage sustained or
incurred by reason of:

 

(a)                        Disaffirmance
of the Option under the provision of the Bankruptcy Act.

(b)                       The failure
of the insured to receive all or part of an award entered in a condemnation
proceeding unless failure to share in said award stems from a court order or
judgment which constitutes a final determination and adjudges the Option
invalid or incapable of specific performance.

(c)                        The failure
of the insured at the time of payment of the Option price either to have
obtained proper conveyances and release from all persons having an interest in
said land or a lien or encumbrance thereon (the determination as to the
identity of such persons and the nature of the interest, lien or encumbrance
owned or claimed, to be at the expense of the insured) or to have obtained a
court order or judgment which constitutes a final determination and determines
those persons and interests entitled to receive the Option price.

(d)                       Attorneys’
fees and costs in connection with the proceedings mentioned in subparagraph (c)
immediately above, or in connection with an action to enforce the Option,
excluding attorneys’ fees incurred to defend an attack on the validity or
enforceability of the Option.

 

Notwithstanding the provisions contained in
the conditions and stipulations of the policy of which this endorsement is a
part the coverage afforded by said policy and this endorsement shall cease and
terminate upon the exercise of the Option or on the date the Option expires by
its own terms, whichever occurs first.

 

This endorsement is made a part of the policy
and is subject to all of the terms and provisions thereof and of any prior
endorsements thereto.  Except to the extent
expressly stated, it neither modifies any of the terms and provisions of the
policy and any prior endorsements, nor does it extend the effective date of the
policy and any prior endorsements, nor does it increase the face amount
thereof.  The total liability of the
Company

 

16

 

under the policy and any endorsement thereto
shall not exceed, in the aggregate, the face amount of the policy and costs
which the Company is obligated under the Conditions and Stipulations thereof to
pay.

 

FIRST AMERICAN TITLE
INSURANCE COMPANY

 

PROFORMA

 

THIS IS A PRO FORMA ENDORSEMENT
FURNISHED TO OR ON BEHALF OF THE PARTY TO BE INSURED.  IT NEITHER REFLECTS THE PRESENT STATUS OF TITLE, NOR IS IT
INTENDED TO BE A COMMITMENT TO INSURE. 
THIS ENDORSEMENT DOES NOT EVIDENCE THE WILLINGNESS OF FIRST AMERICAN
TITLE INSURANCE COMPANY TO PROVIDE ANY AFFIRMATIVE COVERAGE SHOWN THEREIN.

 

THERE ARE REQUIREMENTS WHICH MUST BE MET
BEFORE A FINAL ENDORSEMENT CAN BE ISSUED IN THE SAME FORM AS THIS PRO FORMA
ENDORSEMENT.  A COMMITMENT TO INSURE
SETTING FORTH THESE REQUIREMENTS SHOULD BE OBTAINED FROM THE COMPANY.

 

FA SPECIAL—Optionee’s Coverage (11/01)

 

17

 

ENDORSEMENT

 

Attached to Policy No.  PRO FORMA

 

Issued By

 

First American Title Insurance

 

The Policy is hereby amended by deleting
paragraph no. 14 from the Conditions and Stipulations.

 

This endorsement is made a part of the policy
and is subject to all of the terms and provisions thereof and of any prior
endorsements thereto.  Except to the
extent expressly stated, it neither modifies any of the terms and provisions of
the policy and any prior endorsements, nor does it extend the effective date of
the policy and any prior endorsements, nor does it increase the face amount
thereof.

 

	
  First American
  Title Insurance Company

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
  Authorized Signatory

  	
   

  
	
   

  	
   

  
	
  CLTA 110.1-Mod.

  	
   

  
	
  Deletion of Arbitration Provisions
  Endorsement

  	
   

  
				

 

18

 

ENDORSEMENT

 

Attached to Policy No.
        

 

Issued By

 

First American Title Insurance Company

 

The Company hereby insures against loss or
damage sustained or incurred by the Insured by reason of any of the following
matters:

 

1.             The existence of any present violations on
the land of any enforceable covenants, conditions or restrictions;

 

2.             Except as shown in Schedule B, any present
encroachments onto the land of buildings, structures or improvements located on
adjoining lands; and

 

3.             Unmarketability of the title to the estate
or interest by reason of any violations on the land, occurring prior to
acquisition of title to the estate or interest by the Insured, of any
covenants, conditions or restrictions.

 

Wherever in this endorsement any or all the
words “covenants, conditions or restrictions” appear, they shall not be deemed
to refer to or include the terms, covenants, conditions or restrictions
contained in any lease.

 

This endorsement is made a part of the policy
and is subject to all the terms and provisions thereof and of any prior
endorsements.  Except to the extent
expressly stated, it neither modifies any of the terms and provisions of the
Policy and any prior endorsements, nor does it extend the effective date of the
Policy and any prior endorsements, nor does it increase the face amount
thereof.

 

	
  Date:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  First
  American Title Insurance Company

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
  Authorized Signatory

  	
   

  
	
   

  	
   

  
	
  F.A. Form 31.2 (Rev. 3/99)

  	
   

  
	
  ALTA - Extended Owners

  	
   

  
	
  (Unimproved Land)

  	
   

  
				

 

19

 

ENDORSEMENT

 

Attached to Policy No.
        

 

Issued By

 

First American Title Insurance Company

 

The Company hereby insures the insured
against loss or damage which the insured shall sustain by reason of the failure
of the easement described as Parcel
             
in Schedule
                 
to provide the owner of the estate or interest referred to in Schedule A with
ingress and egress to and from a public street known as (insert name of
street).

 

This endorsement is made a part of the policy
and is subject to all of the terms and provisions thereof and of any prior
endorsements thereto.  Except to the
extent expressly stated, it neither modifies any of the terms and provisions of
the policy and any prior endorsements, nor does it extend the effective date of
the policy and any prior endorsements, nor does it increase the face amount
thereof.

 

	
  Date:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  First
  American Title Insurance Company

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
  Authorized Signatory

  	
   

  
	
   

  	
   

  
	
  CLTA Form 103.4 (Rev. 6-14-96)

  	
   

  
	
  ALTA OR CLTA - Owner or Lender

  	
   

  
				

 

Printed from the First American Underwriting
Library, Ó  Copyright 1999

 

20

 

ENDORSEMENT

 

Attached to Policy No.
          

 

Issued By

 

First American Title Insurance Company

 

The Company hereby insures the insured
against loss or damage which the insured shall sustain by reason of the failure
of the land described in Schedule
                        
to be contiguous to *

 

This endorsement is made a part of the policy
and is subject to all of the terms and provisions thereof and of any prior
endorsements thereto.  Except to the
extent expressly stated, it neither modifies any of the terms and provisions of
the policy and any prior endorsements, nor does it extend the effective date of
the policy and any prior endorsements, nor does it increase the face amount
thereof.

 

	
  Date:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  First
  American Title Insurance Company

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
  Authorized Signatory

  	
   

  
				

 

*              Describe land contiguous to subject land
by legal description or by reference to a recorded instrument.

 

CLTA Form 116.4 (Rev. 6-14-96)

Alta or Clta-Owner or Lender

 

Printed from the First American Underwriting
Library, Ó  Copyright 1999

 

21

 

ENDORSEMENT

 

Attached to Policy No.
          

 

Issued By

 

First American Title Insurance Company

 

The Company hereby insures the insured
against loss or damage which the insured shall sustain by reason of the failure
of the land described as Parcel
            in Schedule
             to
constitute a lawfully created parcel according to the Subdivision Map Act
(Section 66410, et seq., of the California Government Code) and local
ordinances adopted pursuant thereto.

 

This endorsement is made a part of the policy
and is subject to all of the terms and provisions thereof and of any prior
endorsements thereto.  Except to the
extent expressly stated, it neither modifies any of the terms and provisions of
the policy and any prior endorsements, nor does it extend the effective date of
the policy and any prior endorsements, nor does it increase the face amount
thereof.

 

	
  Date:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  First
  American Title Insurance Company

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
  Authorized Signatory

  	
   

  
	
   

  	
   

  
	
  CLTA Form 116.7 (Rev. 6-14-96)

  	
   

  
	
  Subdivision Map Act Endorsement

  	
   

  
				

 

Printed from the First American Underwriting
Library, Ó  Copyright 1999

 

22

 

ENDORSEMENT

 

Attached to Policy No.
         

 

Issued By

 

First American Title Insurance Company

 

The Company hereby insures the insured
against loss or damage which the insured shall sustain by reason of the failure
of the covenants of the lessor in favor of the lessee, set out in Section(s)
                                         ,
                                         
and
                                   
of the lease recorded
                                               
to do some act relating to the use, repair, maintenance or improvement of, or
payment of taxes and assessments of the real property, or some part thereof,
described as (description of burdened land of lessor) to be binding upon the
lessor and each successive owner, during his or her ownership, of any portion
of such real property, and upon each mortgagee, or trustee or beneficiary of a
deed of trust, whose interest is derived from the lessor or through any such
successive owner thereof, while such mortgagee or trustee or beneficiary is in
possession in such capacity.

 

Provided, however, that no assurance is
hereby given should such covenants fail to bind a successive owner who derives
title through: a) a tax deed; b) a foreclosure of a bond or assessment; c)
enforcement of a federal tax lien; d) bankruptcy, as trustee or otherwise; e) a
right or lien existing prior to the date of recording of the instrument
containing said covenants.

 

This endorsement does not insure against loss
or damage which the insured may sustain by reason of the nonperformance of any
said covenants.

 

This endorsement is made a part of the policy
and is subject to all of the terms and provisions thereof and of any prior
endorsements thereto.  Except to the
extent expressly stated, it neither modifies any of the terms and provisions of
the policy and any prior endorsements, nor does it extend the effective date of
the policy and any prior endorsements, nor does it increase the face amount
thereof.

 

	
  Date:

  	
   

  
	
   

  	
   

  
	
  First
  American Title Insurance Company

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
  Authorized Signatory

  	
   

  
	
   

  	
   

  
	
  CLTA Form 124.2 (Rev. 6-14-96)

  	
   

  
	
  ALTA OR CLTA - Lessee or Lender

  	
   

  
				

 

23

 

ENDORSEMENT

 

Attached to Policy No.  PRO FORMA

 

Issued By

 

First American Title Insurance Company

 

1.             The
Company insures the Insured against loss or damage sustained by reason of any
incorrectness in the assurance that, at Date of Policy:

 

(a)                        According
to applicable zoning ordinances and amendments thereto, the land is classified
Zone             .

 

(b)                       The
following use or uses are allowed under that classification subject to
compliance with any conditions, restrictions, or requirements contained in the
zoning ordinances and amendments thereto, including but not limited to the
securing of necessary consents or authorizations as a prerequisite to the use
or uses:

 

2.             The
Company further insures against loss or damage arising from a final decree of a
court of competent jurisdiction

 

(a)                        prohibiting
the use of the land, with any structure completed in accordance with the plans
and specifications (hereinafter defined), as specified in paragraph 1(b); or

 

(b)                       requiring
the removal or alteration of the structure on the basis that, if the proposed
structure were completed in substantial compliance with the plans and
specifications by
                           
dated
                  ,
said ordinances and amendments thereto would be violated with respect to any of
the following matters:

 

(i)                            Area,
width or depth of the land as a building site for the structure;

 

(ii)                         Floor
space area of the structure;

 

(iii)                      Setback of
the structure from the property lines of the land;

 

(iv)                     Height of the
structure; or

 

(v)                        Parking as
to number of spaces.

 

24

 

There shall be no liability under this
endorsement based on the invalidity of the ordinances and amendments thereto
until after a final decree of a court of competent jurisdiction adjudicating
the invalidity, the effect of which is to prohibit the use or uses.

 

Loss or damage as to the matters insured
against by this endorsement shall not include loss or damage sustained or
incurred by reason of the refusal of any person to purchase, lease or lend money
on the estate or interest covered by this policy.

 

This endorsement is made a part of the policy
and is subject to all of the terms and provisions thereof and of any prior
endorsements thereto.  Except to the
extent expressly stated, it neither modifies any of the terms and provisions of
the policy and any prior endorsements, nor does it extend the effective date of
the policy and any prior endorsements, nor does it increase the face amount
thereof.

 

	
  First
  American Title Insurance Company

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  Dated:

  
	
  Authorized Signatory

  	
   

  
				

 

25

 

 

[GRAPHIC]

 

Form No. 1402.92

(10/17/92)

ALTA Owner’s Policy

PROFORMA POLICY JACKET

 

RT
OF FIRST

 

POLICY OF TITLE INSURANCE

 

[FIRST
AMERICAN LOGO]

 

ISSUED
BY

 

First American Title Insurance Company

 

 

SUBJECT TO THE EXCLUSIONS FROM COVERAGE, THE
EXCEPTIONS FROM COVERAGE CONTAINED IN SCHEDULE B AND THE CONDITIONS AND
STIPULATIONS, FIRST AMERICAN TITLE INSURANCE COMPANY, a California corporation,
herein called the Company, insures, as of Date of Policy shown in Schedule A,
against loss or damage, not exceeding the Amount of Insurance stated in
Schedule A, sustained or incurred by the insured by reason of:

 

1.               Title to the estate
or interest described in Schedule A being vested other than as stated therein;

 

2.               Any defect in or
lien or encumbrance on the title;

 

3.               Unmarketability of
the title;

 

4.               Lack of a right of
access to and from the land.

 

The Company will also pay the costs,
attorneys’ fees and expenses incurred in defense of the title, as insured, but
only to the extent provided in the Conditions and Stipulations.

 

 

	
   

  	
  First American Title Insurance Company

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  BY

  	
  /s/ [ILLEGIBLE]

  	
   

  	
  PRESIDENT

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ATTEST

  	
  /s/ [ILLEGIBLE]

  	
   

  	
  SECRETARY

  	
   

  

 

 

EXCLUSIONS
FROM COVERAGE

 

The following matters are expressly excluded
from the coverage of this policy and the Company will not pay loss or damage,
costs, attorneys’ fees or expenses which arise by reason of:

 

	
  1.

  	
  (a)

  	
  Any law, ordinance or governmental
  regulation (including but not limited to building and zoning laws,
  ordinances, or regulations) restricting, regulating, prohibiting or relating
  to (i) the occupancy use, or enjoyment of the land; (ii) the character,
  dimensions or location of any improvement now or hereafter erected on the
  land; (iii) a separation in ownership or a change in the dimensions or area
  of the land or any parcel of which the land is or was a part; or (iv)
  environmental protection, or the effect of any violation of these laws,
  ordinances or governmental regulations, except to the extent that a notice of
  the enforcement thereof or a notice of a defect, lien or encumbrance
  resulting from a violation or alleged violation affecting the land has been
  recorded in the public records at Date of Policy.

  
	
   

  	
  (b)

  	
  Any governmental police power not excluded
  by (a) above, except to the extent that a notice of the exercise thereof or a
  notice of a defect, lien or encumbrance resulting from a violation or alleged
  violation affecting the land has been recorded in the public records at Date
  of Policy.

  
	
   

  	
   

  	
   

  
	
  2.

  	
  Rights of eminent domain unless notice of
  the exercise thereof has been recorded in the public records at Date of
  Policy, but not excluding from coverage any taking which has occurred prior
  to Date of Policy which would be binding on the rights of a purchaser for
  value without knowledge.

  
	
   

  	
   

  
	
  3.

  	
  Defects, liens, encumbrances, adverse
  claims or other matters:

  
	
   

  	
   

  
	
   

  	
  (a)

  	
  created, suffered, assumed or agreed to by
  the Insured claimant;

  
	
   

  	
  (b)

  	
  not known to the Company, not recorded in
  the public records at Date of Policy, but known to the insured claimant and
  not disclosed in writing to the Company by the insured claimant prior to the
  date the insured claimant became an insured under this policy;

  
	
   

  	
  (c)

  	
  resulting in no loss or damage to the insured
  claimant;

  
	
   

  	
  (d)

  	
  attaching or created subsequent to Date of
  Policy; or

  
	
   

  	
  (e)

  	
  resulting in loss or damage which would not
  have been sustained if the insured claimant had paid value for the estate or
  interest insured by this policy.

  
	
   

  	
   

  
	
  4.

  	
  Any claim, which arises out of the
  transaction vesting in the Insured the estate or Interest insured by this
  policy, by reason of the operation of federal bankruptcy, state insolvency,
  or similar creditors’ rights laws, that is based on:

  
	
   

  	
   

  
	
   

  	
  (i)

  	
  the transaction creating the estate or
  interest insured by this policy being deemed a fraudulent conveyance or
  fraudulent transfer; or

  
	
   

  	
  (ii)

  	
  the transaction creating the estate or
  interest insured by this policy being deemed a preferential transfer except
  where the preferential transfer results from the failure:

  
	
   

  	
   

  	
  (a)

  	
  to timely record the instrument of
  transfer; or

  
	
   

  	
   

  	
  (b)

  	
  of such recordation to impart notice to a
  purchaser for value or a judgment or lien creditor.

  

 

CONDITIONS
AND STIPULATIONS

 

1.                                       DEFINITION
OF TERMS.

 

The following  terms when used in this policy mean:

 

(a)      “Insured”: the Insured
named in Schedule A, and, subject to any rights or defenses the Company would
have had against the named insured, those who succeed to the interest of the
named Insured by operation of law as distinguished from purchase including, but
not limited to, heirs, distributees, devisees, survivors, personal
representatives, next of kin, or corporate or fiduciary successors.

 

(b)      “insured claimant”: an
Insured claiming loss or damage.

 

(c)      “knowledge” or “known”:
actual knowledge, not constructive knowledge or notice which may be imputed to
an insured by reason of the public records as defined in this policy or any
other records which impart constructive notice of matters affecting the land.

 

(d)      “land”: the land
described or referred to in Schedule (A), and improvements affixed thereto
which by law constitute real property. The term “land” does not include any
property beyond the lines of the area described or referred to in Schedule (A),
nor any right, title, interest, estate or easement in abutting streets, roads,
avenues, alleys, lanes, ways or waterways, but nothing herein shall modify or
limit the extent to which a right of access to and from the land is insured by
this policy.

 

(e)      “mortgage”: mortgage,
deed of trust, trust deed, or other security instrument.

 

(f)       “public records”:
records established under state statutes at Date of Policy for the purpose of
imparting constructive notice of matters relating to real property to
purchasers for value and without knowledge. 
With respect to Section 1(a)(iv) of the Exclusions From Coverage.  “public records” shall also include
environmental protection liens filed in the records of the clerk of the United
States district court for the district in which the land is located.

 

(g)      “unmarketability of the
title”: an alleged or apparent matter affecting the title to the land, not
excluded or excepted from coverage, which would entitle a purchaser of the
estate or interest  described in
Schedule A to be released from the obligation to purchase by virtue of a
contractual condition requiring the delivery of marketable title.

 

2.                                       CONTINUATION
OF INSURANCE AFTER CONVEYANCE OF TITLE.

 

The coverage
of this policy shall continue in force as of Date of Policy in favor of an
insured only so long as the insured retains an estate or interest in the land,
or holds an indebtedness secured by a purchase money mortgage given by a
purchaser from the insured, or only so long as the insured shall have liability
by reason of covenants of warranty made by the insured in any transfer or
conveyance of the 

 

2

 

estate or interest.  This policy shall not continue in force in favor of any purchaser
from the insured of either (i) an estate or interest in the land, or (ii) an
indebtedness secured by a purchase money mortgage given to the insured.

 

3.                                       NOTICE OF CLAIM
TO BE GIVEN BY INSURED CLAIMANT.

 

The insured
shall notify the Company promptly in writing (i) in case of any litigation as
set forth in Section 4(a) below, (ii) in case knowledge shall come to an
insured hereunder of any claim of title or interest which is adverse to the
title to the estate or interest, as insured, and which might cause loss or
damage for which the Company may be liable by virtue of this policy, or (iii)
if title to the estate or interest, as insured, is rejected as
unmarketable.  If prompt notice shall
not be given to the Company, then as to the insured all liability of the
Company shall terminate with regard to the matter or matters for which prompt
notice is required; provided, however, that failure to notify the Company shall
in no case prejudice the rights of any insured under this policy unless the
Company shall be prejudiced by the failure and then only to the extent of the
prejudice.

 

4.                                       DEFENSE
AND PROSECUTION OF ACTIONS; DUTY OF INSURED CLAIMANT TO COOPERATE.

 

(a)      Upon written request by
the insured and subject to the options contained in Section 6 of these
Conditions and Stipulations, the Company, at its own cost and without
unreasonable delay, shall provide for the defense of an insured in litigation
in which any third party asserts a claim adverse to the title or interest as
insured, but only as to those stated causes of action alleging a defect, lien
or encumbrance or other matter insured against by this policy.  The Company shall have the right to select
counsel of its choice (subject to the right of the insured to object for
reasonable cause) to represent the insured as to those stated causes of action
and shall not be liable for and will not pay the fees of any other
counsel.  The Company will not pay any
fees, costs or expenses incurred by the insured in the defense of those causes
of action which allege matters not insured against by this policy.

 

(b)      The Company shall have
the right, at its own cost, to institute and prosecute any action or proceeding
or to do any other act which in its opinion may be necessary or desirable to
establish the title to the estate or interest, as insured, or to prevent or
reduce loss or damage to the insured. 
The Company may take any appropriate action under the terms of this
policy, whether or not it shall be liable hereunder, and shall not thereby
concede liability or waive any provision of this policy.  If the Company shall exercise its rights
under this paragraph, it shall do so diligently.

 

(c)      Whenever the Company
shall have brought an action or interposed a defense as required or permitted
by the provisions of this policy, the Company may pursue any litigation to
final determination by a court of competent jurisdiction and expressly reserves
the right, in its sole discretion, to appeal from any adverse judgment or
order.

 

(d)      In all cases where this
policy permits or requires the Company to prosecute or provide for the defense
of any action or proceeding, the Insured shall secure to the Company the right
to so prosecute or provide defense in the action or proceeding, and all appeals
therein, and permit the Company to use, at its option, the name of the insured
for this purpose.  Whenever requested by
the Company, the insured, at the Company’s expense, shall give the Company all
reasonable aid (i) in any action or proceeding, securing evidence, obtaining
witnesses, prosecuting or defending the action or proceeding, or effecting
settlement, and (ii) in any other lawful act which in the opinion of the
Company may be necessary or desirable to establish the title to the estate or
interest as insured.  If the Company is
prejudiced by the failure of the insured to furnish the required cooperation,
the Company’s obligations to the insured under the policy shall terminate,
including any liability or obligation to defend, prosecute, or continue any
litigation, with regard to the matter or matters requiring such cooperation.

 

5.                                       PROOF
OF LOSS OR DAMAGE.

 

In addition to
and after the notices required under Section 3 of these Conditions and
Stipulations have been provided the Company, a proof of loss or damage signed
and sworn to by the insured claimant shall be furnished to the Company within
90 days after the insured claimant shall ascertain the facts giving rise to the
loss or damage.  The proof of loss or
damage shall describe the defect in, or lien or encumbrance on the title, or other
matter insured against 

 

3

 

by this policy which constitutes the basis of
loss or damage and shall state, to the extent possible, the basis of
calculating the amount of the loss or damage. 
If the Company is prejudiced by the failure of the insured claimant to
provide the required proof of loss or damage, the Company’s obligations to the
insured under the policy shall terminate, including any liability or obligation
to defend, prosecute, or continue any litigation, with regard to the matter or matters
requiring such proof of loss or damage.

 

In addition,
the insured claimant may reasonably be required to submit to examination under
oath by any authorized representative of the Company and shall produce for
examination, inspection and copying, at such reasonable times and places as may
be designated by any authorized representative of the Company, all records,
books, ledgers, checks, correspondence and memoranda, whether bearing a date
before or after Date of Policy, which reasonably pertain to the loss or
damage.  Further, if requested by any
authorized representative of the Company, the insured claimant shall grant its
permission, in writing, for any authorized representative of the Company to
examine, inspect and copy all records, books, ledgers, checks, correspondence
and memoranda in the custody or control of a third party, which reasonably  pertain to the loss or damage.  All information designated as confidential by
the insured claimant provided to the Company pursuant to this Section shall not
be disclosed to others unless, in the reasonable judgment of the Company, it is
necessary in the administration of the claim. 
Failure of the insured claimant to submit for examination under oath,
produce other reasonably requested information or grant permission to secure
reasonably necessary information from third parties as required in this
paragraph, unless prohibited by law or governmental regulation, shall terminate
any liability of the Company under this policy as to that claim.

 

6.                                       OPTIONS
TO PAY OR OTHERWISE SETTLE CLAIMS; TERMINATION OF LIABILITY.

 

In case of a
claim under this policy, the Company shall have the following additional
options:

 

(a)      To Pay or Tender Payment
of the Amount of Insurance.

 

To pay or tender payment of the amount of insurance under this policy
together with any costs, attorneys’ fees and expenses incurred by the insured
claimant, which were authorized by the Company, up to the time of payment or
tender of payment and which the Company is obligated to pay.

 

Upon the
exercise by the Company of this option, all liability and obligations to the
insured under this policy, other than to make the payment required, shall
terminate, including any liability or obligation to defend, prosecute, or
continue any litigation, and the policy shall be surrendered to the Company for
cancellation.

 

4

 

(b)      To Pay or Otherwise
Settle With Parties Other than the insured or With the insured Claimant.

 

(i)    to pay or otherwise settle with other
parties for or in the name of an insured claimant any claim insured against
under this policy, together with any costs, attorneys’ fees and expenses
incurred by the insured claimant which were authorized by the Company up to the
time of payment and which the Company is obligated to pay; or

 

(ii)   to pay or otherwise settle with the insured
claimant the loss or damage provided for under this policy, together with any
costs, attorneys’ fees and expenses incurred by the insured claimant which were
authorized by the Company up to the time of payment and which the Company is
obligated to pay.

 

Upon the
exercise by the Company of either of the options provided for in paragraphs
(b)(i) or (ii), the Company’s obligations to the insured under this policy for
the claimed loss or damage, other than the payments required to be made, shall
terminate, including any liability or obligation to defend, prosecute or
continue any litigation.

 

7.                                       DETERMINATION,
EXTENT OF LIABILITY AND COINSURANCE.

 

This policy is
a contract of indemnity against actual monetary loss or damage sustained or
incurred by the insured claimant who has suffered loss or damage by reason of
matters insured against by this policy and only to the extent herein described.

 

(a)      The liability of the
Company under this policy shall not exceed the least of:

 

(i)    the Amount of Insurance stated in Schedule
A; or

 

(ii)   the difference between the value of the
insured estate or interest as insured and the value of the insured estate or
interest subject to the defect, lien or encumbrance insured against by this
policy.

 

(b)      In the event the Amount
of Insurance stated in Schedule A at the Date of Policy is less than 80 percent
of the value of the insured estate or interest of the full consideration paid
for the land, whichever is less, or if subsequent to the Date of Policy an
improvement is erected on the land which increases the value of the insured
estate or interest by at least 20 percent over the Amount of Insurance stated
in Schedule A, then this Policy is subject to the following:

 

(i)    where no subsequent improvement has been
made, as to any partial loss, the Company shall only pay the loss pro rata
in the proportion that the Amount of Insurance at Date of Policy bears to the
total value of the insured estate or interest at Date of Policy; or (ii) where
a subsequent improvement has been made, as to any partial loss, the Company
shall only pay the loss pro rata in the proportion that 120 percent of the
Amount of Insurance stated in Schedule A bears to the sum of the Amount of Insurance
stated in Schedule A and the amount expended for the improvement.

 

The provisions
of this paragraph shall not apply to costs, attorneys’ fees and expenses for
which the Company is liable under this policy, and shall only apply to that
portion of any loss which exceeds, in the aggregate, 10 percent of the Amount
of Insurance stated in Schedule A.

 

(c)      The Company will pay only
those costs, attorneys’ fees and expenses incurred in accordance with Section 4
of these Conditions and Stipulations.

 

8.                                       APPORTIONMENT.

 

If the land
described in Schedule (A)(C) consists of two or more parcels which are not used
as a single site, and a loss is established affecting one or more of the
parcels but not all, the loss shall be computed and settled on  a pro rata basis as if the Amount of
Insurance under this policy was divided pro rata as to the value on Date of
Policy of each separate parcel to the whole, exclusive of any improvements made
subsequent to Date of Policy, unless a liability or value has otherwise been
agreed upon as to each parcel by the Company and the insured at the time of the
issuance of this policy and shown by an express statement or by an endorsement
attached to this policy.

 

9.                                       LIMITATION OF
LIABILITY.

 

(a)      If the Company
establishes the title, or removes the alleged defect, lien or encumbrance, or
cures the lack of a right of access to or from the land, or cures the claim of
unmarketability of title, all as insured. 
In a reasonably diligent manner by any method, including litigation and
the completion of any appeals therefrom, it shall have fully performed its
obligations with respect to that matter and shall not be liable 

 

5

 

for any loss or damage caused thereby.

 

(b)      In the event of any litigation,
including litigation by the Company or with the Company’s consent, the Company
shall have no liability for loss or damage until there has been a final
determination by a court of competent jurisdiction, and disposition of all
appeals therefrom, adverse to the title as insured.

 

(c)      The Company shall not be
liable for loss or damage to any insured for liability voluntarily assumed by
the insured in settling any claim or suit without the prior written consent of
the Company.

 

10.                                 REDUCTION OF INSURANCE;
REDUCTION OR TERMINATION OF LIABILITY.

 

All payments
under this policy, except payments made for costs, attorneys’ fees and
expenses, shall reduce the amount of the insurance pro tanto.

 

11.                                 LIABILITY
NONCUMULATIVE.

 

It is
expressly understood that the Amount of Insurance under this policy shall be
reduced by any amount the Company may pay under any policy insuring a mortgage
to which exception is taken in Schedule B or to which the Insured has agreed,
assumed, or taken subject, or which is hereafter executed by an insured and
which is a charge or lien on the estate or interest described or referred to in
Schedule A, and the amount so paid shall be deemed a payment under this policy
to the insured owner.

 

12.                                 PAYMENT OF LOSS.

 

(a)      No payment shall be made
without producing this policy for endorsement of the payment unless the policy
has been lost or destroyed, in which case proof of loss or destruction shall be
furnished to the satisfaction of the Company.

 

(b)      When liability and the
extent of loss or damage has been definitely fixed in accordance with these
Conditions and Stipulations, the loss or damage shall be payable within 30 days
thereafter.

 

13.                                 SUBROGATION UPON
PAYMENT OR SETTLEMENT.

 

(a)      The Company’s Right of
Subrogation.

 

Whenever the
Company shall have settled and paid a claim under this policy, all right of
subrogation shall vest in the Company unaffected by any act of the insured
claimant.  The Company shall be
subrogated to and be entitled to all rights and remedies which the insured
claimant would have had against any person or property in respect to the claim
had this policy not been issued.  If
requested by the Company, 

 

6

 

the insured claimant shall transfer to the
Company all rights and remedies against any person or property necessary in
order to perfect this right of subrogation. 
The insured claimant shall permit the Company to sue, compromise or
settle in the name of the insured claimant and to use the name of the insured
claimant in any transaction or litigation involving these rights or remedies.

 

If a payment
on account of a claim does not fully cover the loss of the insured claimant,
the Company shall be subrogated to these rights and remedies in the proportion
which the Company’s payment bears to the whole amount of the loss.

 

If loss should
result from any act of the insured claimant, as stated above, that act shall
not void this policy, but the Company, in that event, shall be required to pay
only that part of any losses insured against by this policy which shall exceed
the amount, if any, lost to the Company by reason of the impairment by the
insured claimant of the Company’s right of subrogation.

 

(b)      The Company’s Rights
Against non-insured Obligors.

 

The Company’s
right of subrogation against non-insured obligors shall exist and shall
include, without limitation, the rights of the insured to indemnities,
guaranties, other policies of insurance or bonds, notwithstanding any terms or
conditions contained in those instruments which provide for subrogation rights
by reason of this policy.

 

14.                                 ARBITRATION.

 

Unless
prohibited by applicable law, either the Company or the insured may demand
arbitration pursuant to the Title Insurance Arbitration Rules of the American
Arbitration Association.  Arbitrable
matters may include, but are not limited to any controversy or claim between
the Company and the Insured arising out of or relating to this policy, any
service of the Company in connection with its issuance or the breach of a
policy provision or other obligation. 
All arbitrable matters when the Amount of Insurance is $ 1,000,000 or
less shall be arbitrated at the option of either the Company or the
insured.  All arbitrable matters when
the Amount of Insurance is in excess of $1,000,000 shall be arbitrated only
when agreed to by both the Company and the insured.  Arbitration pursuant to this policy and under the Rules in effect
on the date the demand for arbitration is made or, at the option of the insured,
the Rules in effect at Date of Policy shall be binding upon the parties.  The award may include attorneys’ fees only
if the laws of the state in which the land is located permit a court to award
attorneys’ fees to a prevailing party. 
Judgment upon the award rendered by the Arbitrator(s) may be entered in
any court having jurisdiction thereof.

 

The law of the
situs of the land shall apply to an arbitration under the Title Insurance
Arbitration Rules.

 

A copy of the
Rules may be obtained from the Company upon request.

 

15.                                 LIABILITY LIMITED TO
THIS POLICY; POLICY ENTIRE CONTRACT.

 

(a)      This policy together with
all endorsements, if any, attached hereto by the Company is the entire policy
and contract between the insured and the Company.  In interpreting any provision of this policy, this policy shall
be construed as a whole.

 

(b)      Any claim of loss or
damage, whether or not based on negligence, and which arises out of the status
of the title to the estate or interest covered hereby or by any action
asserting such claim, shall be restricted to this policy.

 

(c)      No amendment of or
endorsement to this policy can be made except by a writing endorsed hereon or
attached hereto signed by either the President, a Vice President, the
Secretary, an Assistant Secretary, or validating officer or authorized signatory
of the Company.

 

16.                                 SEVERABILITY.

 

In the event
any provision of the policy is held invalid or unenforceable under applicable
law, the policy shall be deemed not to include that provision and all other
provisions shall remain in full force and effect.

 

17.                                 NOTICES, WHERE SENT.

 

All notices
required to be given the Company and any statement in writing required to be
furnished the Company shall include the number of this policy and shall be
addressed to the Company at 1 First American Way, Santa Ana, California 92707,
or to the office which issued this policy.

 

7

 

[GRAPHIC]

 

[FIRST
AMERICAN LOGO]

 

 

FIRST AMERICAN TITLE INSURANCE COMPANY

 

 

POLICY

OF

TITLE

INSURANCE

 

[SEAL OF FIRST AMERICAN TITLE INSURANCE
COMPANY, CALIFORNIA]

 

 

Policy No. S805935 PROFORMA

 

 

110201cm

 

Form No. 1402.92

(10/17/92)

ALTA Owner’s Policy

 

SCHEDULE A

 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Premium

  	
  :

  	
  $(To be determined)

  	
  Policy No.:

  	
   

  	
  S605935 PROFORMA

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  RIGHT OF FIRST OFFER

  
	
  Amount of Insurance

  	
  :

  	
  $(To be determined)

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date of Policy

  	
  :

  	
  (To be determined)

  	
   

  	
   

  	
   

  

 

1.             Name of Insured:

 

COPART,
INC., a California corporation

 

2.             The estate or interest in the land
which is covered by this policy is:

 

A fee

 

3.             Title to the estate or interest in
the land is vested in:

 

GREEN VALLEY
LAND, LLC, A Delaware limited liability company

 

4.             The land referred to this policy is
described as follows:

 

REAL PROPERTY in the City of Fairfield,
County of Solano, State of California, described as follows:

 

That portion of the following described
property attached as Exhibit B to the Memorandum of Lease and Options to
Purchase and Right of Offer
recorded             ,
Series No.            ,
Solano County Records:

 

All that portion of land described as
“Adjusted Lot 9”, and as set forth in that certain Notice of Minor Lot Line
Adjustment recorded June 4, 2001, Series No. 2001-57986, Solano County Records,
and further described as follows:

 

“Commencing at hereinabove mentioned Point
“A”, with said Point “A” being on the westerly right-of-way line of the
existing-Neitzel Road, as shown on the Parcel Map recorded in Book 31 of Parcel
Maps at Page 39 to 41, Solano County Records; thence leaving said westerly
right-of-way line North 84° 45’ 41” West 624.92 feet to the
beginning of a non-tangent curve concave to the northwest having a radius of
1286.50 feet and to which beginning a radial line bears South 84° 45’
41” East; thence southwesterly 1577.66 feet along said 

 

First American Title

 

2

 

curve through a central angle of 70° 15’
46”; thence South 75° 30’ 05” West 200.23 feet to the beginning of a
curve concave to the southeast having a radius of 1713.50 feet; thence
southwesterly 27.45 feet along said curve through a central angle of 00°
55’ 04”; thence South 14° 29’ 55” East 319.33 feet; thence North 50°
04’ 09” East 16.90 feet; thence South 38° 46’ 45” East 69.90
feet; thence South 41° 26’ 15” East 44.12 feet; thence South 14°
29’ 55” East 271.83 feet; thence along hereinabove mentioned westerly
right-of-way line North 64° 50’ 00” East 359.24 feet to the
beginning of a curve concave to the northwest having a radius of 1155.00 feet;
thence northeasterly 283.90 feet along said curve through a central angle of 14°
05’ 00”; thence North 53° 04’ 28” East 369.85 feet; thence North 50°
45’ 00” East 500.00 feet; thence North 46° 13’ 02” East 277.97 feet;
thence North 41° 37’ 18” East 89.77 feet; thence North 27°
24’ 18” East 89.85 feet; thence North 12° 19’ 57” East 97.76 feet;
thence North 04° 11’ 00” East 275.35 feet to the beginning of a
non-tangent curve concave to the southwest having a radius of 1168.86 feet and
to which beginning a radial line bears North 89° 53’ 11” East;
thence northeasterly 227.16 feet along said curve through a central angle of 11°
08’ 07” to the point of commencement.”

 

A.P.Nos.:               027-370-150,
045-280-320, 045-280-330 and 045-280-300

 

3

 

Form No. 1402.92

(10/17/92)

ALTA Owner’s Policy

 

SCHEDULE B

 

EXCEPTIONS FROM COVERAGE

 

This policy does not insure against loss or
damage (and the Company will not pay costs, attorney's fees or expenses) which
arise by reason of:

 

	
  1.

  	
  General and special taxes and assessments
  for the fiscal year 2001-2002.

  
	
   

  	
  First Installment

  	
  :

  	
  $22,264.99 open

  
	
   

  	
  Penalty

  	
  :

  	
  None

  
	
   

  	
  Second Installment

  	
  :

  	
  $22,264.99 open

  
	
   

  	
  Penalty

  	
  :

  	
  None

  
	
   

  	
  Tax Rate Area

  	
  :

  	
  3116

  
	
   

  	
  A. P. No.

  	
  :

  	
  027-370-150

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Affects

  	
  :

  	
  The land and other property.

  
	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
  General and special taxes and assessments
  for the fiscal year 2001-2002.

  
	
   

  	
  First Installment

  	
  :

  	
  $34,782.98 open

  
	
   

  	
  Penalty

  	
  :

  	
  None

  
	
   

  	
  Second Installment

  	
  :

  	
  $34,782.98 open

  
	
   

  	
  Penalty

  	
  :

  	
  None

  
	
   

  	
  Tax Rate Area

  	
  :

  	
  3053

  
	
   

  	
  A. P. No.

  	
  :

  	
  045-280-320

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Affects

  	
  :

  	
  The land and other property.

  
	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
  General and special taxes and assessments
  for the fiscal year 2001-2002.

  
	
   

  	
  First Installment

  	
  :

  	
  $28,480.09 open

  
	
   

  	
  Penalty

  	
  :

  	
  None

  
	
   

  	
  Second Installment

  	
  :

  	
  $28,480.09 open

  
	
   

  	
  Penalty

  	
  :

  	
  None

  
	
   

  	
  Tax Rate Area

  	
  :

  	
  3053

  
	
   

  	
  A. P. No.

  	
  :

  	
  045-280-330

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Affects

  	
  :

  	
  The land and other property.

  
	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
  General and special taxes and assessments
  for the fiscal year 2001-2002.

  
	
   

  	
  First Installment

  	
  :

  	
  $13,991.40 open

  
	
   

  	
  Penalty

  	
  :

  	
  None

  
	
   

  	
  Second Installment

  	
  :

  	
  $13,991.40 open

  
	
   

  	
  Penalty

  	
  :

  	
  None

  
	
   

  	
  Tax Rate Area

  	
  :

  	
  3053

  
	
   

  	
  A. P. No.

  	
  :

  	
  045-280-300

  
	
   

  	
   

  	
   

  	
   

  

 

4

 

	
   

  	
  Affects

  	
  :

  	
  The land and other property.

  
	
  5.

  	
  Supplemental taxes for the fiscal year
  2000-2001 assessed pursuant to Chapter 3.5 commencing with Section 75 of the
  California Revenue and Taxation Code.

  
	
   

  	
  First Installment

  	
  :

  	
  $7,877.50 unpaid, will become delinquent
  after December 10, 2001

  
	
   

  	
  Second Installment

  	
  :

  	
  $7,877.50 unpaid, will become delinquent
  after April 10,2002

  
	
   

  	
  Tax Rate Area

  	
  :

  	
  3116

  
	
   

  	
  A. P. No.

  	
  :

  	
  045-280-520

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Said matter affects a portion of the land

  
	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
  Supplemental taxes for the fiscal year
  2000-2001 assessed pursuant to Chapter 3.5 commencing with Section 75 of the
  California Revenue and Taxation Code.

  
	
   

  	
  First Installment

  	
  :

  	
  $18,775.44 unpaid, will become delinquent
  after December 10, 2001

  
	
   

  	
  Second Installment

  	
  :

  	
  $18,775.44 unpaid, will become delinquent
  after April 10, 2002

  
	
   

  	
  Tax Rate Area

  	
  :

  	
  3053

  
	
   

  	
  A.P. No.

  	
  :

  	
  045-280-480

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Said matter affects a portion of the land

  
	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
  The lien of supplemental taxes, if any,
  assessed pursuant to Chapter 3.5 commencing with Section 75 of the California
  Revenue and Taxation Code.

  
	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
  Assessments for Green Valley - Mangels
  Boulevard Refund collected and payable with the city and county taxes.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Affects

  	
  :

  	
  The land and other property.

  
	
   

  	
   

  	
   

  	
   

  
	
  9.

  	
  Assessments for 1998 Reassessment Revenue
  Bond collected and payable with the city and county taxes.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Affects

  	
  :

  	
  The land and other property.

  
	
   

  	
   

  	
   

  	
   

  
	
  10.

  	
  The lien of special tax assessed pursuant
  to Chapter 2.5 commencing with Section 53311 of the California Government
  Code for Community Facilities District No. 5, as disclosed by Notice of
  Special Tax Lien recorded June 7, 1990 as Series No. 90-44742 of Official
  Records.

  
	
   

  	
   

  	
   

  	
   

  
	
  11.

  	
  The lien of special tax assessed pursuant
  to Chapter 2.5 commencing with Section 53311 of the California Government
  Code for Community Facilities District No. 2, as disclosed by Notice of
  Special Tax Lien recorded December 17, 1992 as Series No. 92-11586 of
  Official Records.

  
	
   

  	
   

  	
   

  	
   

  
	
  12.

  	
  The lien of special tax assessed pursuant
  to Chapter 2.5 commencing with Section 53311 of the California Government
  Code for Community Facilities District No. 3, as disclosed by Notice of
  Special Tax Lien recorded December 17, 1992 as Series No. 92-11586 of
  Official Records.

  
	
   

  	
   

  	
   

  	
   

  
	
  13.

  	
  An easement for water pipeline and incidental
  purposes, recorded June 3, 1927, Book 1, Page 384, Series No. 1958 of
  Official Records.

  
	
   

  	
  In Favor of

  	
  :

  	
  City of Vallejo

  
	
   

  	
  Affects

  	
  :

  	
  The
  southeasterly portion of the land

  
					

 

5

 

	
  14.

  	
  A waiver of any claims for damages by
  reason of the location, construction, landscaping or maintenance of a
  contiguous freeway, highway or roadway, as contained in the document recorded
  April 24, 1928 in Book 13, Page 323, Series No. 1542 of Official Records.

  
	
   

  	
   

  	
   

  	
   

  
	
  15.

  	
  An easement for pole line and incidental
  purposes, recorded April 17, 1931 in Book 71, Page 496, Series No. 1497 of
  Official Records.

  
	
   

  	
  In Favor of

  	
  :

  	
  The Pacific Telephone and Telegraph Company, a corporation

  
	
   

  	
  Affects

  	
  :

  	
  The southerly portion of the land

  
	
   

  	
   

  	
   

  	
   

  
	
  16.

  	
  An easement for pole line and incidental
  purposes, recorded April 29, 1931 as Series No. 1647, Book 72, Page 268 of
  Official Records.

  
	
   

  	
  In Favor of

  	
  :

  	
  Great Western Power Company of California, a corporation

  
	
   

  	
  Affects

  	
  :

  	
  A portion of the land

  
	
   

  	
   

  	
   

  	
   

  
	
  17.

  	
  An easement for crossarms, wires, cables
  and anchor and incidental purposes, recorded June 5, 1952 in Book 624, Page
  340 of Official Records.

  
	
   

  	
  In Favor of

  	
  :

  	
  Pacific Gas and Electric Company

  
	
   

  	
   

  	
   

  	
   

  
	
  18.

  	
  A waiver of any claims for damages by
  reason of the location, construction, landscaping or maintenance of a
  contiguous freeway, highway or roadway, as contained in the document recorded
  May 16, 1960 in Book 1028, Page 19, Series No. 9603 of Official Records.

  
	
   

  	
   

  	
   

  	
   

  
	
  19.

  	
  An easement for sanitary sewers and incidental
  purposes, recorded December 16, 1970 in Book 1658 as 260, Series No. 22671 of
  Official Records.

  
	
   

  	
  In Favor of

  	
  :

  	
  City of Fairfield, a municipal corporation

  
	
   

  	
  Affects

  	
  :

  	
  The easterly portion of the land

  
	
   

  	
   

  	
   

  	
   

  
	
  20.

  	
  An easement shown or dedicated on the map
  filed or recorded October 14, 1977 in Book 13 of Parcel Maps, Page 99

  
	
   

  	
  For

  	
  :

  	
  Public utilities and incidental purposes

  
	
   

  	
  Affects

  	
  :

  	
  The southeasterly 10' of the land

  
	
   

  	
   

  	
   

  	
   

  
	
  21.

  	
  The fact that the land lies within the
  boundaries of the Cordelia Area Redevelopment Project Area, as disclosed by
  the document recorded July 20, 1983 in Book 1983, Page 57325. Series No.
  30314 of Official Records.

  
	
   

  	
   

  	
   

  	
   

  
	
  22.

  	
  The terms and provisions contained in the
  document entitled “Development for the Upper Mangels Ranch Planned Development”
  recorded June 10, 1986 in Book 1986, Page 58179 as Series No. 29083 of
  Official Records.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  FIRST AMENDMENT thereto recorded March 23,
  1990, Series No. 90-21855, Solano County Records.

  
	
   

  	
   

  
	
   

  	
  SECOND AMENDMENT thereto recorded December
  13, 1996, Series No. 96-83890, Official Records.

  
	
   

  	
   

  
	
   

  	
  THIRD AMENDMENT thereto recorded February
  2, 1999, Series No. 99-9241, Official Records.

  

 

6

 

	
  23.

  	
  An easement for sanitary sewer and
  incidental purposes, recorded March 26, 1992 as Series No. 92-24929 of
  Official Records.

  
	
   

  	
  In Favor of

  	
  :

  	
  The City of Fairfield, a municipal corporation

  
	
   

  	
  Affects

  	
  :

  	
  A southerly portion of the land

  
	
   

  	
   

  	
   

  	
   

  
	
  24.

  	
  An easement for pole line and incidental
  purposes, recorded February 7, 1997 as Series No. 97-7749 of Official
  Records.

  
	
   

  	
  In Favor of

  	
  :

  	
  Pacific Gas and Electric Company, a California corporation

  
	
   

  	
  Affects

  	
  :

  	
  A southerly portion of the land

  
	
   

  	
   

  	
   

  	
   

  
	
  25.

  	
  The terms and provisions contained in the
  document entitled “Memorandum of Agreement” by and between The Redevelopment
  Agency of the City of Fairfield and H.J. Shein, Inc., an Illinois corporation
  recorded February 18, 2000 as Series No. 2000-13446, Official Records.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Memorandum of Agreement (First Amendment to
  Disposition and Development Agreement) by and between The Redevelopment
  Agency of the City of Fairfield and H.J. Shein, Inc., an Illinois
  corporation, recorded June 4, 2001, Series No. 2001-57980, Official Records.

  
	
   

  	
   

  
	
   

  	
  Memorandum of Agreement (Second Amendment
  to Disposition and Development Agreement) by and between The Redevelopment
  Agency of the City of Fairfield and H.J. Shein, Inc., an Illinois
  corporation, recorded June 4, 2001, Series No. 2001-57983, Official Records.

  
	
   

  	
   

  
	
   

  	
  Assignment and Assumption Agreement by and
  between The Redevelopment Agency of the City of Fairfield, H.J. Shein, Inc.,
  an Illinois corporation, Green Valley Building I, LLC, a Delaware limited
  liability company and Green Valley Land, LLC, a Delaware limited liability
  company, recorded June 4, 2001, Series No. 2001-57984, Official Records.

  
	
   

  	
   

  	
   

  	
   

  
	
  26.

  	
  The terms and provisions contained in the
  document entitled “Development Agreement” by and between City of Fairfield
  and H.J. Shein, Inc., an Illinois corporation recorded June 4, 2001 as Series
  No. 2001-57979 of Official Records.

  
	
   

  	
   

  	
   

  	
   

  
	
  27.

  	
  An easement shown or dedicated on the Map
  as referred to in the legal description

  
	
   

  	
  For

  	
  :

  	
  Landscape, public service and incidental purposes.

  
	
   

  	
  Affects

  	
  :

  	
  The northwesterly portion of the land

  
	
   

  	
   

  	
   

  	
   

  
	
  28.

  	
  An easement shown or dedicated on the Map
  as referred to in the legal description

  
	
   

  	
  For

  	
  :

  	
  Storm drain and incidental purposes.

  
	
   

  	
  Affects

  	
  :

  	
  The southwesterly portion of the land

  
	
   

  	
   

  	
   

  	
   

  
	
  29.

  	
  An easement shown or dedicated on the Map
  as referred to in the legal description

  
	
   

  	
  For

  	
  :

  	
  Sanitary sewer and incidental purposes.

  
	
   

  	
  Affects

  	
  :

  	
  The southwesterly portion of the land

  
	
   

  	
   

  	
   

  	
   

  
	
  30.

  	
  The effect of the following matters shown
  on the filed map referred to in the legal description:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  NOTE: Location of fault zone and setback
  has approximately shown in this Map per Map prepared by “Harlan Tait
  Associates” on June 17, 1994, Figure No. 5, Project No. 1197.01 entitled
  “Site and Exploration Plan and Fault Map, North Fairfield Site, Fairfield,
  California”.

  
	
   

  	
   

  	
   

  	
   

  
	
  31.

  	
  The terms and provisions contained in the
  document entitled “Grant Deed” recorded June 4, 2001 as Series No. 2001-57987
  of Official Records.

  
					

 

7

 

	
   

  	
   

  	
   

  	
   

  
	
  32.

  	
  An option to purchase in favor of The
  Redevelopment Agency of the City of Fairfield, as contained in or disclosed
  by a document recorded June 4, 2001 as Series No. 2001-57987 of Official
  Records.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Said Document states that the option shall
  be subordinate and subject to and be limited by and shall not defeat, render
  invalid or limit, among others things, any leases or other agreements between
  Green Valley Land, LLC and other third party tenants and purchasers.

  
	
   

  	
   

  	
   

  	
   

  
	
  33.

  	
  The terms and provisions contained in the
  document entitled “Reimbursement Agreement” by and between The Redevelopment
  Agency of the City of Fairfield, and Green Valley Land, LLC, a Delaware
  limited liability company recorded June 4, 2001 as Series No. 2001-57989 of
  Official Records.

  
	
   

  	
   

  	
   

  	
   

  
	
  34.

  	
  Rights of parties in possession.

  
	
   

  	
   

  	
   

  	
   

  
	
  35.

  	
  Any facts, rights, interests, or claims which would be disclosed by a
  correct ALTA/ACSM survey.

  
	
   

  	
   

  	
   

  	
   

  
	
  36.

  	
  Any facts, rights, interests, or claims
  which are not shown by the public records but which could be ascertained by
  an inspection of said land or by making inquiry of persons in possession
  thereof.

  
	
   

  	
   

  	
   

  	
   

  
	
  37.

  	
  Any claim by reason of the failure of Green Valley Building 12, LLC
  to acquire fee title to the leased land.

  
	
   

  	
   

  	
   

  	
   

  
	
  38.

  	
  Any failure to comply with the terms, provisions and conditions of
  the lease referred to in Schedule A.

  
	
   

  	
   

  	
   

  	
   

  
	
  39.

  	
  Any shortage in area or any discrepancy in
  the exact location the leased premises resulting from any insufficiency or
  ambiguity in the legal description contained in the documents creating or
  establishing the Lease referred to in Paragraph 2 of Schedule A.

  
	
   

  	
   

  	
   

  	
   

  
	
  40.

  	
  Terms, provisions and conditions of the
  Right of Offer Regarding Adjacent Land, and any failure to comply with same,
  as contained in the Office Lease dated
                 ,
  joined in by Green Valley Land, LLC, a Delaware limited liability company and
  Copart, Inc., a California corporation, disclosed by Memorandum of Lease and
  Options to Purchase and Right of Offer
  recorded             ,
  2001, Series No. 2001-                     ,
  Official Records.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Notice: 
  This is a pro-forma policy furnished to or on behalf of the party to
  be insured.  It neither reflects the
  present status of title, nor is it intended to be a commitment to
  insure.  The inclusion of endorsements
  as part of the pro-forma policy in no way evidences the willingness of the
  Company to provide any affirmative coverage shown therein.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  There are requirements which must be met
  before a final policy can be issued in the same form as this pro-forma
  policy.  A commitment to insure
  setting forth these requirements should be obtained from the Company.

  

 

8

 

ENDORSEMENT

 

Attached
to Policy No. S605935

 

Issued
by

 

FIRST AMERICAN TITLE INSURANCE COMPANY

 

A.                                   The
Company hereby insures against loss or damage sustained or incurred by the
insured by reason of the failure at the date of this endorsement of the Right
of First Offer Regarding Adjacent Land referred to in paragraph 40 of Schedule
B, Part I (the “Agreement”);

 

(1)                      To
be valid; and

(2)                      Of
the rights of the insured under the Agreement to be vested in the insured.

 

B.                                     This
endorsement does not insure against loss or damage sustained or incurred by the
insured by reason of;

 

(1)                       The
bankruptcy of the vestee shown in Schedule A or of any successor-in-interest to
the vestee;

(2)                      Failure
of the insured to do everything necessary to secure proper performance from the
vestee shown in Schedule A or any successor-in-interest to the vestee; or

(3)                      Costs,
attorney's fees and expenses to enforce the Agreement.

 

This endorsement is made a part of the policy
and is subject to all of the terms and provisions thereof and of any prior
endorsements thereto.  Except to the
extent expressly stated, it neither modifies any of the terms and provisions of
the policy and any prior endorsements, nor does it extend the effective date of
the policy and any prior endorsements, nor does it increase the face amount
thereof.

 

FIRST AMERICAN TITLE
INSURANCE COMPANY

 

PROFORMA

 

THIS IS A PRO FORMA ENDORSEMENT
FURNISHED TO OR ON BEHALF OF THE PARTY TO BE INSURED.  IT NEITHER REFLECTS THE PRESENT STATUS OF TITLE, NOR IS IT
INTENDED TO BE A COMMITMENT TO INSURE. 
THIS ENDORSEMENT DOES NOT EVIDENCE THE WILLINGNESS OF FIRST AMERICAN
TITLE INSURANCE COMPANY TO PROVIDE ANY AFFIRMATIVE COVERAGE SHOWN THEREIN.

 

THERE ARE REQUIREMENTS WHICH MUST BE MET
BEFORE A FINAL ENDORSEMENT CAN BE ISSUED IN THE SAME FORM AS THIS PRO FORMA
ENDORSEMENT.  A COMMITMENT TO INSURE
SETTING FORTH THESE REQUIREMENTS SHOULD BE OBTAINED FROM THE COMPANY.

 

 

FA Special – Right of First Offer Endorsement
(11/01)

 

9

 

ENDORSEMENT

 

Attached to Policy No.  PRO FORMA

 

Issued By

 

First American Title Insurance

 

The Policy is hereby amended by deleting
paragraph no. 14 from the Conditions and Stipulations.

 

This endorsement is made a part of the policy
and is subject to all of the terms and provisions thereof and of any prior
endorsements thereto.  Except to the
extent expressly stated, it neither modifies any of the terms and provisions of
the policy and any prior endorsements, nor does it extend the effective date of
the policy and any prior endorsements, nor does it increase the face amount
thereof.

 

First American Title
Insurance Company

 

 

	
  By:

  	
   

  	
   

  
	
   

  	
  Authorized Signatory

  	
   

  
				

 

CLTA 110.1-Mod.

Deletion of Arbitration Provisions
Endorsement

 

10

 

ENDORSEMENT

 

Attached to Policy No. 
         

 

Issued By

 

First American Title Insurance Company

 

The Company hereby insures against loss or
damage sustained or incurred by the Insured by reason of any of the following
matters:

 

1.             The
existence of any present violations on the land of any enforceable covenants,
conditions or restrictions;

 

2.             Except
as shown in Schedule B, any present encroachments onto the land of buildings,
structures or improvements located on adjoining lands; and 

 

3.             Unmarketability
of the title to the estate or interest by reason of any violations on the land,
occurring prior to acquisition of title to the estate or interest by the
Insured, of any covenants, conditions or restrictions.

 

Wherever in this endorsement any or all the
words “covenants, conditions or restrictions” appear, they shall not be deemed
to refer to or include the terms, covenants, conditions or restrictions
contained in any lease.

 

This endorsement is made a part of the policy
and is subject to all the terms and provisions thereof and of any prior
endorsements.  Except to the extent
expressly stated, it neither modifies any of the terms and provisions of the
Policy and any prior endorsements, nor does it extend the effective date of
Policy and any prior endorsements, nor does it increase the face amount
thereof.

 

	
  Date:

  	
   

  	
   

  
	
   

  
	
  First
  American Title Insurance Company

  
	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Authorized Signatory

  	
   

  
						

 

F.A. Form 31.2 (Rev. 3/99)

ALTA - Extended Owners

(Unimproved Land)

 

11

 

ENDORSEMENT

 

Attached to Policy No. 
         

 

Issued By

 

First American Title Insurance Company

 

The Company hereby insures the insured
against loss or damage which the insured shall sustain by reason of the failure
of the easement described as Parcel
             in
Schedule 
            
to provide the owner of the estate or interest referred to in Schedule A with
ingress and egress to and from a public street known as (insert name of
street).

 

This endorsement is made a part of the policy
and is subject to all of the terms and provisions thereof and of any prior
endorsements thereto.  Except to the
extent expressly stated, it neither modifies any of the terms and provisions of
the policy and any prior endorsements, nor does it extend the effective date of
the policy and any prior endorsements, nor does it increase the face amount
thereof.

 

	
  Date:

  	
   

  	
   

  
	
   

  
	
  First
  American Title Insurance Company

  
	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Authorized Signatory

  	
   

  
						

 

CLTA Form 103.4 (Rev. 6-14-96)

ALTA or CLTA - Owner or Lender

 

Printed from the First American Underwriting
Library, © Copyright 1999

 

12

 

ENDORSEMENT

 

Attached to Policy No. 
         

 

Issued By

 

First American Title Insurance Company

 

The Company hereby insures the insured
against loss or damage which the insured shall sustain by reason of the failure
of the land described in Schedule
                     to
be contiguous to *

 

This endorsement is made a part of the policy
and is subject to all of the terms and provisions thereof and of any prior
endorsements thereto.  Except to the
extent expressly stated, it neither modifies any of the terms and provisions of
the policy and any prior endorsements, nor does it extend the effective date of
the policy and any prior endorsements, nor does it increases the face amount
thereof.

 

	
  Date:

  	
   

  	
   

  
	
   

  
	
  First
  American Title Insurance Company

  
	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Authorized Signatory

  	
   

  
					

 

*              Describe
land contiguous to subject land by legal description or by reference to a
recorded instrument.

 

CLTA Form 116.4 (Rev. 6-14-96)

Alta or Clta-Owner or Lender

 

 

Printed from the First American Underwriting
Library, © Copyright 1999

 

13

 

ENDORSEMENT

 

Attached to Policy No. 
         

 

Issued By

 

First American Title Insurance Company

 

The Company hereby insures the insured
against loss or damage which the insured shall sustain by reason of the failure
of the land described as Parcel                 
in Schedule
               to
constitute a lawfully created parcel according to the Subdivision Map Act
(Section 66410, et seq., of the California Government Code) and local
ordinances adopted pursuant thereto.

 

This endorsement is made a part of the policy
and is subject to all of the terms and provisions thereof and of any prior
endorsements thereto.  Except to the
extent expressly stated, it neither modifies any of the terms and provisions of
the policy and any prior endorsements, nor does it extend the effective date of
the policy and any prior endorsements, nor does it increase the face amount
thereof.

 

	
  Date:

  	
   

  	
   

  
	
   

  
	
  First
  American Title Insurance Company

  
	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Authorized Signatory

  	
   

  
	
   

  	
   

  
	
   

  
						

 

CLTA Form 116.7 (Rev. 6-14-96)

Subdivision Map Act Endorsement

 

 

Printed from the First American Underwriting
Library, © Copyright 1999

 

14

 

ENDORSEMENT

 

Attached to Policy No. 
         

 

Issued By

 

First American Title Insurance Company

 

The Company hereby insures the insured
against loss or damage which the insured shall sustain by reason of the failure
of the covenants of the lessor in favor of the lessee, set out in
Section(s)                                         ,
                                      and
                                          of
the lease recorded
                      
to do some act relating to the use, repair, maintenance or improvement of, or
payment of taxes and assessments of the real property, or some part thereof,
described as (description of burdened land of lessor) to be binding upon the
lessor and each successive owner, during his or her ownership, of any portion
of such real property, and upon each mortgagee, or trustee or beneficiary of a
deed of trust, whose interest is derived from the lessor or through any such
successive owner thereof, which such mortgagee or trustee or beneficiary is in
possession in such capacity.

 

Provided, however, that no assurance is
hereby given should such covenants fail to bind a successive owner who derives
title through: a) a tax deed; b) a foreclosure of a bond or
assessment; c) enforcement of a federal tax lien; d) bankruptcy, as
trustee or otherwise; e) a right or lien existing prior to the date of
recording of the instrument containing said covenants.

 

This endorsement does not insure against loss
or damage which the insured may sustain by reason of the nonperformance of any
said covenants. 

 

The endorsement is made a part of the policy
and is subject to all of the terms and provisions thereof and of any prior
endorsements thereto.  Except to the
extent expressly stated, it neither modifies any of the terms and provisions of
the policy and any prior endorsements, nor does it extend the effective date of
the policy and any prior endorsements, nor does it increase the face amount
thereof.

 

	
  Date:

  	
   

  	
   

  
	
   

  
	
  First
  American Title Insurance Company

  
	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Authorized Signatory

  	
   

  
	
   

  	
   

  
						

 

CLTA Form 124.2 (Rev. 6-14-96)

ALTA or CLTA - Lessee or Lender

 

15

 

ENDORSEMENT

 

Attached to Policy No.  PRO FORMA

 

Issued By

 

First American Title Insurance Company

 

1.             The
Company insures the Insured against loss or damage sustained by reason of any
incorrectness in the assurance that, at Date of Policy:

 

(a)                     According
to applicable zoning ordinances and amendments thereto, the land is classified
Zone
             .

 

(b)                    The
following use or uses are allowed under that classification subject to
compliance with any conditions, restrictions, or requirements contained in the
zoning ordinances and amendments thereto, including but not limited to the
securing of necessary consents or authorizations as a prerequisite to the use
or uses:

 

2.             The
Company further insures against loss or damage arising from a final decree of a
court of competent jurisdiction

 

(a)                     prohibiting
the use of the land, with any structure completed in accordance with the plans
and specifications (hereinafter defined), as specified in paragraph 1(b); or

 

(b)                    requiring
the removal or alteration of the structure on the basis that, if the proposed
structure were completed in substantial compliance with the plans and
specifications by
                          
dated
                           
, said ordinances and amendments thereto would be violated with respect to any
of the following matters:

 

(i)                                        Area,
width or depth of the land as a building site for the structure;

 

(ii)                                     Floor
space area of the structure;

 

(iii)                                  Setback
of the structure from the property lines of the land;

 

(iv)                                 Height
of the structure; or

 

(v)                                    Parking
as to number of spaces.

 

16

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