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HomeMy WebLinkAboutContracts & Agreements_1991_CCv0001.pdf • 4. No water and sewer allocations for Centex Homes, Tract 13504. • Leases City Attorney Michael Grant presented proposed leases between the City and both Matich Corporation and C. L. Pharris Sand Sand and and Gravel, Inc. , which resulted from negotiations over the last Gravel five months. Councilmember Larsen moved to approve the lease by and between the City of Redlands and Matich Corporation. Motion seconded by Councilmember Wormser and carried unanimously. Councilmember Larsen moved to approve the lease by and between the City and C. L. Pharris Sand and Gravel. Inc. Motion seconded by Councilmember Wormer and carried unanimously. Ordinance Ordinance No. 1983, an ordinance of the City of Redlands No. 1983 amending Article 941 of the Redlands Ordinance Code establishing procedures for allocation of water and sewer Water and connections in the unincorporated area within the City of Sewer Redlands Sphere of Influence, was read by title only by Deputy Allocations City Clerk Sanchez, and on motion of Councilmember Johnson, seconded by Councilmember DeMirjyn, further reading of the ordinance text was unanimously waived. Ordinance No. 1983 was introduced and laid over under the rules with second real, ' g scheduled for May 19, 1987, on motion of Councilmember Wormser, seconded by Councilmember DeMirjyri, by the following vote: AYES: Councilmembers DeMirjyn, Johnson, Wormser; Mayor Beswick NOES: Councilmember Larsen ABSENT: None In response to Councilmember Larsen's request for an opportunity to hear public testimony, City Manager Holmes announced that a public hearing will be held on Ordinance No. 1983, May 19, 1987, 7:00 P.M. prior to the second reading. Budget City Manat --ai: lwdieeueeed with COUTICilLUdUcI Lid Les and Reviews times to be set for review of City budgets similar to last year's procedure. Councilmember Johnson questioned if there should be a drop in the economy because of declining sales and building f;;s, how would the City be impacted? Since so many of our services are fee-driven unlike in the past, he would like to see a proposed budget fr. ework reflecting these circumstances in dollars and cents. Councilmember Larsen concurred that he too supports Councilmember Johnson's scenario and added that in addition he would like to include water hookup projections (inside and ouside the City) included in that scenario. Councilmember DeMirjyri also supported the alternative budget approach. Following this discussion, the following dates were selected for budget meetings at the City Yards, 600 P.M. on Tuesday, June 9th, and Wednesday, June 10th. May 5, 1987 Page eight - LEASE THIS LEASE ( the "Lease" ) is made and entered into this £ day of fila-41 1987, by and between THE CITY OF REDLANDS, a municipal corporation ( "Lesser" ) and C.L. PHARR'S SAND & GRAVEL, INC. , a California corporation ( "Lessee" ) . IN CONSIDERATION OF THE MUTUAL COVENANTS AND AGREEMENTS HEREIN CONTAINED, LESSOR AND LESSEE AGREE AS FOLLOWS: ARTICLE I. PREMISES 1.01 Premises. Lessor leases to Lessee and Lessee leases from Lessor, for the term, at the rental, and upon the covenants and conditions hereinafter set forth, that certain real property (the "Premises" ) situated in the County of San Bernardino, State of California, more particularly described in Exhibit "A" attached hereto and made a part hereof . ARTICLE II . TERM 2.01 Initial Term. The initial term of this Lease will commence on July 1 , 1991 ( "Commencement Date" ) and will continue thereafter for a period of twentyfive ( 25) Years, expiring June 30, 2016 ( "Initial Term" ) . 2. 02 Options to Extend Te-rm. Provided that Lessee is not in a material uncured default or, if Lessee -is in an uncured default, Lessee has made reasonable arrangements to cure same, or if Landlord has waived in writing any default under this Lease then, at the expiration of the Initial Term, any extended term, or on the date of exercise of the options described herein, Lessee shall have the option to extend the Lease term for up to five ( 5) additional periods of five (5) years each. Lessee may exercise its option to extend the Lease term at any time during the final year of the Initial Term or the final year of any extended term, by written notice to Lessor of its intention to extend the Lease term. Except as specifically provided to the contrary, any such extension will be subject to all the terms and provisions of this Lease. 2.03 Holdover. Should Lessee hold over and continue in possession of the Premises with Lessor' s permission but not pursuant to an option to extend, after expiration of the Initial Term or any extensions thereof, then Lessee' s continued occupancy of said Premises shall be considered a month-to-month tenancy subject to all of the terms and conditions of this Lease, including rent, then in effect . Should Lessee hold over and continue in possession of the Premises without Lessor ' s consent or permission (and not pursuant to an option to extend) following the expiration of the Initial Term or any extensions thereof, then Lessee ' s continued occupancy of the Premises will be considered a tenancy from day to day, with rent, payable at a rate equal to one hundred twenty five percent ( 125% ) of the rent most recently in effect, and terminable by Lessor at will . Lessee will be liable to Lessor for any expenses or damages suffered by Lessor, including liability to any third parties for failure to give possession of the Premises in a timely manner , resulting from Lessee's failure to vacate the Premises as provided herein. ARTICLE III. RENT 3.01 General Rent Provisions . From and after the Commencement Date, Lessee shall pay to Lessor for each full calendar month during the Lease term, in lawful money of the United States, the monthly rent specified herein. Monthly rent for any partial month at the beginning or end of the Lease termshall be a proportionate part of the monthly rent for a full calendar month, based upon a thirty ( 30) day month, . Payment shall be made to Lessor ' s address designated in paragraph 15.15 below or at such other place as may be designated from time to time by Lessor. Lessee shall pay rent without notice, abatement, deductions or setoff, and absolutely net to Lessor of any expenses, charges, assess- ments, setoffs, or deductions of any kind. 3 .02 Monthly Rent Per Ton. Lessee will pay to Lessor an amount equal to twenty cents ($0. 20 ) per ton for each ton of rock, sand, gravel or other crushed stone material removed from the Premises and ten cents ($0.10) per ton for each ton of rock, sand gravel or other crushed stone material excavated or removed from a location other than the Premises but processed upon the Premises, which such amount shall not be due until such material is removed from the Premises. Reference to the "removal" of material from the Premises means the physical excavation and taking of such material beyond the boundaries of the Premises. The mere excavation and storing of material on the Premises will not be deemed removal thereof. The reference herein to "processing" of materials not removed from the Premises but brought to the Premises for processing after having been removed from another location refers to any activity by Lessee which in any way modifies the character of such materials, but does not refer to the mere stockpiling of such materials upon the Premises. 3.03 Adjustments to Monthly Rent Per Ton. The prices per ton described in Section 3.02 above will be adjusted as of the Commencement Date and every two ( 2) years thereafter throughout the Initial Term and any extension period based upon increases, if any, in the Producer Price Index pub- lished by the United States Department of Labor, Bureau of Labor Statistics, Commodity Code No. 13-21 ( "construction sand, gravel and crushed stone" - unadjusted index) -- (the "Index" ) . During the Initial Term, the Base Index will be the Index amount for the month and year in which this Lease is executed. The Comparison Index will be the Index for the same month, immediately preceding the Commencement Date and every two years thereafter throughout the Initial Term. Immediately prior to Commencement Date the Base Index will be compared with the then current Comparison Index and the amount per ton upon which the Monthly Rent Per Ton amount is based will be adjusted accordingly; provided, however, that in no event will the amounts per ton be less than twenty cents ($0 . 20 ) and ten cents ($0 .10) , respectively. This same adjustment based upon a comparison of the then current Comparison Index with the Base Index will be effected every two ( 2) years throughout the Initial Term and any exten- sions. The calculation of Monthly Rent Per Ton during any extension period will be adjusted in the same manner as set forth above, except that the Base Index to be used for purposes of comparison throughout the extended term of this Lease will be that monthly Index most recently used as a Comparison Index in calculating the bi-annual rent adjust- ment described herein- The intended operation of these adjustment provisions is illustrated in Exhibit "B" attached hereto. In the event that the Index is changed so that the Com- parison Index differs from the Base Index, the Comparison Index so affected will be converted in accordance with any conversion factor published by the United States Department of Labor, Bureau of Labor Statistics. In the event the Index is discontinued or revised during the Initial Term or any extension thereof, such other governmental index or computation with which it is replaced shall be used in order to obtain substantially the same result which would have been obtained if the present Index had not been discontinued or revised. If no substituted index is published, the parties will attempt to agree upon a substituted basis of -3- comparison which is based, to the greatest extent possible, upon adjustments in the cost of construction sand, gravel and crushed rock products. If the parties are unable to agree upon a substituted index or basis of comparison within sixty (60 ) days following cancellation of the Index, the choice of a substituted basis of comparison will be sub- mitted to arbitration under the rules of the American Arbi- tration Association, with arbitration to be conducted in the City of Redlands, San Bernardino County, California. 3.04 Verification of Monthly Rent Per Ton Calcula- tion. Lessee' s payment of Monthly Rent Per Ton (Section 3.02) or Minimum Rent (Section 3.05) will be accompanied by a statement certified by Lessee as true and correct, speci- fying the total tonnage of sand, gravel and other crushed rock products removed from the Premises or processed upon and removed from the Premises during the preceding month and setting forth the calculation upon which the Monthly Rent Per Ton or Minimum Rent payment is based. Lessee shall keep at its General Offices full and accurate books of account, records and other pertinent data showing the tonnage of materials processed at the Premises. Such books of account, receipts and similar records shall be kept for at least three ( 3) years after each monthly payment is made. The receipt by Lessor of any statement or any payment of Monthly Rent Per Ton or Minimum Rent will not bind Lessor as to the correctness of the statement or the payment. Lessor may, within three ( 3) years after the date a rent payment was due, inspect and examine Lessee's books of account, records and receipts or the pertinent data to determine the tonnage of material removed from the Premises or processed upon and removed from the Premises, upon which said rent payment is based. Such inspection may be accomplished by Lessor or a representative designated by Lessor . If such an audit indicates a deficiency in payment of Monthly Rent Per Ton or Minimum Rent, the deficiency will be immediately due and payable. In the event that statements by Lessee have understated rents by more than four percent (4%) , Lessee shall pay all of Lessor ' s reasonable out of pocket costs in conducting such review. 3.05 Minimum Rent . In the event that the calculation of Monthly Rent Per Ton under Section 3 . 02 above at any time results in a monthly rent payment of less than Two Thousand Five Hundred Dollars ($2,500 .00) , Lessee will nevertheless pay to Lessor the sum of Two Thousand Five Hundred Dollars ($2,500.00) for such month. Although paid on a monthly basis, Lessee will be entitled to an ongoing credit against Monthly Rent Per Ton payments due hereunder for any payments made for Minimum Rent in any month when the Minimum Rent hereunder exceeds the Monthly Rent Per Ton for said month. -4- Any payments due for Monthly Rent Per Ton in any month which exceed the Minimum Rent due for that month will be reduced (but never below the then current Minimum Rent amount ) by the amount of any such credit carried forward for the prior sixty (60) months . If such credit is not used within said sixty (60) month period Lessee will not be entitled to such credit. The sixty (60) month credit will continue during the Initial Term and any extensions thereof and will not necessarily coincide with the expiration of the Initial Term and extensions, but in no event will Lessee be entitled to any credits for Minimum Rent payments made prior to sixty (60) months preceding the month for which the computation of Monthly Rent Per Ton is being made. This Minimum Rent amount will be adjusted every five ( 5) years throughout the Initial Term or any extensions thereof, based upon increases, if any in the Consumer Price Index, "All Urban Consumers, " for the Los Angeles-Anaheim-Riverside area ( "CPI" ) . The Minimum Monthly Rent during the first five (5) years will be Two Thousand Five Hundred Dollars ($2,500.00) per month. During the second and succeeding five year periods of the Lease term ( including extensions) , the amount of Minimum Rent will be determined by comparing the CPI for April of 1991 with the CPI for the month of April of 1996, 2001, 2006, etc. , for each five year period during the Initial Term and any extensions. In no event will Minimum Rent be less than Two Thousand Five Hundred Dollars ($2,500 .00 ) . 3.06 Additional Rent. Throughout the Initial Term and any extensions thereof, Lessee will pay as Additional Rent all premiums for the insurance coverage required by this Lease as well as real and personal property taxes and assessments levied against the Premises and any personal, property or equipment of Lessee located thereon or utilized in connection therewith. 3.07 Timely Payment of Rent. Monthly Rent Per Ton or Minimum Rent (as the case may be) will be due on the twenty- fifth day of each month, for the immediately preceding month. Thus, based on a Commencement Date of July 1, 1991 , the first Monthly Rent Per Ton, or Minimum Rent payment due hereunder will be payable to Lessor on August 25, 1991 and monthly thereafter. If the twenty-fifth day of the month is a nonbusiness day (weekend or holiday) , rent must be received on the next business day. If any installment of rent due from Lessee is not received by Lessor within ten ( 10) days following the above referenced due date, Lessee shall pay to Lessor late charge equal to five percent ( 5%) of such delinquent amount. Acceptance of late payment charges by Lessor (without tender and acceptance of delin- quent monthly rent or other sums due hereinunder ) will not -5- constitute a waiver of any default with respect to any unpaid delinquent amount to which they pertain or prevent Lessor from exercising any of the other rights and remedies provided under this Lease on account of such default . No defaults, once cured, waived, or reasonably provided for , shall be used to attempt to prevent Lessee from exercising any rights of Lessee under this Lease. 3 .08 Rent During Extended Terri.. In the event that Lessee exercises in accordance herewith its option to extend the Lease term beyond the expiration of the Initial Term or any extensions thereof, the rent provisions contained herein shall continue in effect. ARTICLE IV, OTHER CHARGES PAYABLE BY LESSEE 4.01 Personal Property Taxes. Lessee shall pay all taxes charged against trade fixtures , furnishings, equipment or any other personal property belonging to Lessee. Lessee shall have personal property taxed separately from the Premises. 4 .02 Utilities. Lessee shall pay, directly to the appropriate supplier , the cost of all natural gas, heat , light, power , sewer service, telephone, water, refuse disposal and other utilities and services supplied to the Premises. 4 .03 Insurance. Lessee shall pay the cost of all insurance coverage required by Article VII below. ARTICLE V. USE OF PREMISES 5. 01 Permitted Uses. Lessee may utilize the Premises for the operation of a sand and gravel excavating and processing facility, producing sand and gravel and other crushed rock products and products in which the same are used. The Premises may be utilized for other business activities reasonably related to the above uses, which utilize sand, gravel and crushed rock products which are removed from or processed upon the Premises. Without Lessor ' s prior written consent , which will not be unreason- ably withheld, the Premises may not be used for any other purpose. 5 .02 Manner of Use. Lessee shall not cause or permit the Premises to be used in any way which constitutes a violation of any law, ordinance, or governmental regulation or order presently in force of hereafter enacted or _6_ promulgated, or which constitutes a nuisance or waste if such violation, nuisance or waste causes damage to Lessor . Lessee' s continued compliance with the terms , conditions and requirements of all permits issued to Lessee or required of Lessee during the term of this Lease for the conduct of its business as described in Section 5.01 above will constitute compliance with this paragraph to the extent that applicable laws, ordinances and regulations are the subject of permit issuance procedures. 5.03 Indemnity. Lessee shall indemnify Lessor against and hold Lessor harmless from any and all costs, claims or liability arising from: (a) Lessee's use of the Premises; (b) the conduct of Lessee 's business or anything else done or permitted by Lessee to be done in or about the Premises; (c) any breach or default in the performance of Lessee' s obligations under this Lease; (d) any material misrepresen- tation or branch of a material warranty be Lessee under this Lease; or (e) other acts or omissions of Lessee. Lessee shall defend Lessor against any such costs, claim or liabil- ity at Lessee ' s expense with counsel reasonably acceptable to Lessor . Lessor agrees to indemnify Lessee for any material failure by Lessor to perform its duties pursuant to this Lease. 5.04 Lessor ' s Access. Lessor or its agents may enter the Premises at reasonable times for legitimate and reason- able purposes; provided, however, that any entry which extends beyond Lessee 's on-site offices will be accompanied by a representative of Lessee. 5 .05 Uses Prohibited. Lessee shall not do or permit anything to be done in or about the Premises or bring or keep anything therein which is not within the permitted use of the Premises which will cause cancellation of any insurance policy which Lessee has purchased, covering the Premises. If any such activity is otherwise permitted under Section 5.01 above and Lessee may obtain substantially similar insurance, Lessee may conduct such activity. 5.06 Reclamation Requirements. Lessee covenants and agrees to comply with all rules, regulations and require- ments regarding reclamation imposed by any governmental or quasi-governmental agency having jurisdiction over the Premises. Lessee ' s continued compliance with the terms, conditions and requirements of any permits issued to Lessee or required of Lessee during the term of this Lease regarding reclamation will constitute compliance with this paragraph, to the extent that such reclamation requirements are the subject of permit issuance procedures. -7- 5.07 Hazardous Materials. Lessee covenants and agrees that it will not at any time during the term of this Lease, or any extension hereof , dispose of hazardous materials on the Premises or otherwise permit the Premises or any portion thereof to be contaminated by such materials . The term "hazardous materials" as used herein refers to any materials whose use, storage or disposal is subject to regulation by federal or state statutes, rules or regulations, enforced by governmental or quasi-governmental agencies . To the best of Lessor ' s current actual knowledge, Lessor has not disposed of any hazardous materials on the Premises and is unaware of such disposal by others. 5.08 Air and Water Quality. Lessee covenants and agrees that throughout the term of this Lease and any extension hereof, its use of the Premises will fully comply with water and air quality requirements imposed by any governmental or quasi-governmental agency or authority having jurisdiction over the Premises. Lessee' s continued compliance with the terms, conditions and requirements of any permits issued to Lessee or required of Lessee during the term of this Lease regarding air and water quality will constitute compliance with this paragraph, to the extent that such water and air quality requirements are the subject of permit issuance procedures. 5 .09 Intention. With respect to the provisions of Sections 5.02, 5.06, 5 . 08 and 6 .05 of this Lease, the parties acknowledge their intention that Lessor not impose upon Lessee through its lawmaking power as a municipal corporation, unreasonable requirements (whether imposed by way of permit or otherwise) which result in burdens upon Lessee which are not imposed upon other businesses, lessees or property owners within the City of Redlands or which constitute an attempt by Lessor to arbitrarily and unilaterally alter the terms of this Lease. ARTICLE VI . CONDITION OF PREMISES; MAINTENANCE, REPAIRS, ALTERATIONS AND ACCESS 6 .01 Existing Conditions. Lessee accepts the Premises in its condition as of the execution of the Lease, subject to all recorded matters, laws, ordinances, and governmental regulations and orders. Lessee acknowledges that it has conducted its business upon the Premises pursuant to a prior lease, that it is therefore familiar with the condition of the Premises and that neither Lessor nor any agent of Lessor has made any representation as to the condition of the Premises or the suitability of the Premises for Lessee ' s intended use. Lessor knows of no condition which would prohibit the contemplated use of the Premises by Lessee. -8- 6 . 02 Exemption of Lessor from Liability. Except for Lessor ' s negligence, gross negligence or wilful conduct or misconduct (with respect to its duties as Lessor and not as a provider of municipal facilities or services) , Lessor shall not be liable for any damage or injury to the person, business (or any loss of income therefrom) , any office fur- nishings , machinery, supplies, documents or files lost , or any other property of Lessee, Lessee ' s employees , invitees , customers or any other person in or about the Premises . 6. 03 Lessor ' s Obligations . Subject to the provisions of Article VIII (Condemnation) , Lessor has absolutely no responsibility to maintain any portion of the Premises at any time. Lessee waives the benefit of any present or future law which might give Lessee the right to terminate the Lease due to the condition of the Premises , except as provided in this Lease. 6. 04 Alterations, Additions and Improvements . Lessee may make such alterations, additions or improvements to or of the Premises as it may deem reasonable and appropriate to the conduct of its business thereon; provided, however , that any such alterations, additions or improvements shall (a) be constructed at Lessee ' s sole cost and expense; (b) shall be in compliance with all applicable rules and regulations of any governmental or quasi-governmental entity or authority having jurisdiction over the Premises ; and ( c) shall remain at all times the property of Lessee and may be removed at any time by Lessee. 6 . 05 Condition upon Termination. Upon expiration or sooner termination of this Lease, Lessee will remove all alterations, additions and improvements from and restore the Premises to its natural condition, subject also to the reclamation requirements of any agency or authority having jurisdiction over the Premises for such purposes. In the event that removal of such improvements and restoration of the Premises is not completed prior to or concurrent with the expiration or termination of this Lease, Lessee may continue in possession as a holdover Tenant (with Lessor ' s permission pursuant to Section 2.03 above) for period of up to one ( 1 ) year , subject to all of the terms and conditions of this Lease, including the payment of rent at the rate then in effect , as provided in Section 2 . 03 . -9- ARTICLE VII . DAMAGE OR DESTRUCTION; INSURANCE 7.01 Lessee' s Property, Unless caused by Lessor ' s negligence, gross negligence, wilful conduct or misconduct (with respect to its duties as Lessor and not as a provider of municipal facilities or services) , Lessor shall not be required to repair any injury or damage by fire or other cause, or to make any repairs or replacements of any leasehold improvements, fixtures, or any other personal Property of Lessee. 7.02 Public Liability and Workers Compensation Insur- ance. At all times during the term of this Lease and any extension thereof, Lessee will maintain public liability and property damage insurance with limits of not less than One Million Dollars ( $1,000, 000.00) for bodily injury or death to any one person, Three Million Dollars ($3,000 , 000. 00) for any one accident or occurrence and at least Five Hundred Thousand Dollars ($500,000- 00) for property damage. Lessee shall carry appropriate workers compensation insurance on all of its agents and employees who regularly work at the Premises and will assure that any contractors, subcontrac- tors or subagents who are employed at or who as a result of their employment normally visit the Premises are similarly covered by such insurance. 7.03 Insurance Polio Form, Content and Insurer . All insurance required by this Lease will be carried only with responsible insurance companies licensed to do business in California. Such policies will provide that they cannot be cancelled or materially changed except after thirty ( 30) days prior written notice by the insurer to Lessor or Lessor 's designated representative. 7 .04 Evidence of Coverage- Lessee will furnish Lessor with copies of all such polices or with certificates evidencing the insurance coverage. Such policies or certi- ficates will be provided to Lessor prior to the commencement of the term of this Lease. If Lessee fails or refuses to obtain or maintain insurance as required under this Lease or fails to provide proof to Lessor as provided herein that such insurance has been obtained and is enforced and paid for, Lessor may, at its election and upon thirty ( 30) days prior written notice to Lessee, obtain and maintain such insurance coverage. Any premiums paid by Lessor will be treated as additional rent due from Lessee, with interest at the maximum rate then permitted by law, to be paid upon demand by Lessor . -10- ARTICLE VIII . CONDEMNATION 8.01 Total Condemnation of Premises. If the Premises are totally taken by condemnation ( including voluntary transfer under threat of condemnation) this Lease shall terminate on the date of taking. Lessor agrees not to initiate any such condemnation action during the term of this Lease for the sole purpose of unilaterally terminating this Lease and unrelated to any other public purpose. 8.02 Partial Condemnation of Premises. If any portion of the Premises is taken by condemnation ( including a volun- tary transfer under threat of condemnation) , this Lease shall remain in effect, except that Lessee may elect to terminate this Lease if twenty-five percent ( 25%) or more of the Premises is taken or such taking materially interferes with the operation of Lessee' s business, such that Lessee cannot continue such operation in a profitable manner . In the event of a disagreement between Lessor and Lessee regarding whether Lessee may continue to operate in a profitable manner following a partial condemnation, the matter will be submitted to arbitration as set forth in Section 15.14 below. If Lessee elects to terminate this Lease as permitted in this paragraph, Lessee must exercise its right to terminate pursuant to this paragraph by giving notice to Lessor within ninety ( 90 ) days after the nature and the extent of the taking have been finally determined. If Lessee elects to terminate this Lease as provided in this paragraph, Lessee also shall notify Lessor of the date of termination, which date shall not be earlier than ninety (RO) days, nor later than ninety (90) days, after Lessee has notified Lessor of its election to terminate. If Lessee does not terminate this Lease within the thirty (30) day period, this Lease shall continue in full farce and effect . 8.03 Waiver . If there is a partial taking of the Premises and this Lease remains in full force and effect , Lessee waives the provisions of Code of Civil Procedure Section 1265.130 and any laws amendatory or supplementary thereof . 8.04 Awards. In the event of a total, substantial , or partial taking, the rights of the parties with respect to the term (except as provided for in Paragraph 8.02 above) , the rent, and the award, shall be according to the law in effect at the time of the taking. -Ile ARTICLE IX, ASSIGNMENT AND SUBLETTING 9. 01 Lessor 's Consent Reouired. No portion of the Premises or of Lessee's interest in this Lease may be acquired by any other person or entity, whether by assign- ment, mortgage, sublease, transfer, operation of law, or act of Lessee, without Lessor ' s prior written consent, which will not be unreasonably withheld. Lessee may give a collateral assignment of this Lease without Lessor 's consent or approval to any lender requiring such a collateral assignment as security. Any attempted transfer in violation of this Section will be void and will constitute a non- curable breach of this Lease. Lessee's request for consent to any transfer will be accompanied by a written statement describing the details of the proposed transfer, including the name, business and financial condition of the prospec- tive transferee, details of the proposed transfer ( i .e. , the term of and rent payable under any assignment or sublease) , and any other information which Lessor reasonably deems relevant. 9.02 Lessee Affiliate. Lessee may assign this Lease or sublease the Premises, without Lessor ' s consent , to any corporation which controls, is controlled by or is under common control with Lessee, or to any corporation resulting from the merger of or consolidation with Lessee ( "Affil- iate" ) . In such case, any Affiliate shall assume in writing all of Lessee 's obligations under this Lease. 9.03 No Release of Lessee. No transfer permitted by this Article IX, whether with or without Lessor' s consent, shall release Lessee or change Lessee 's primary liability to pay the rent and to perform all other obligations of Lessee under this Lease. Lessor ' s acceptance of rent from any other person is not a waiver of any provision of this Article IX. If Lessee's sublessee defaults under this Lease, Lessor may proceed directly against Lessee without pursuing remedies against the sublessee. Lessor may consent to subsequent assignments or modifications of this Lease by Lessee's transferee, without notifying Lessee or obtaining its consent. Such action shall not relieve Lessee of liability under this Lease. 9. 04 No merger. No merger shall result from Lessee ' s sublease of the Premises, Lessee ' s surrender of this Lease or the termination of this Lease in any other manner . In any such event, Lessor may terminate any or all subleases or succeed to the interest of Lessee as sublessor thereunder . ARTICLE X. DEFAULT 10.01 Covenants and Conditions. Lessee ' s performance of each of Lessee 's obligations under this Lease is a condi- tion as well as a covenant . Lessee ' s right to continue in Possession of the Premises is conditioned upon such perfor- mance. Time is of the essence in the performance of all covenants and conditions . 10.02 Defaults. Lessee shall be in material default under this Lease: (a) If Lessee abandons or vacates the Premises; (b) If Lessee fails to pay rent or any other charge required to be paid by Lessee, as and when due; (c) If Lessee fails to perform any of Lessee ' s non-monetary obligations under this Lease for a period of ninety (90) days after written notice from Lessor; provided that if more than ninety (90 ) days are required to complete such performance, Lessee shall not be in default if Lessee commences such performance within the ninety ( 90) day period and thereafter diligently pursues its completion. However, Lessor shall not be required to give such notice if Lessee ' s failure to perform constitutes a non-curable breach of this Lease. The notice required by this Paragraph is intended to satisfy any and all notice requirements imposed by law on Lessor and is not in addition to any such requirement . (d) ( i ) If Lessee makes a general assignment or general arrangement for the benefit of creditors; ( ii ) if a petition for adjudication of bankruptcy or for reorganiza- tion or rearrangement is filed by or against Lessee and is not dismissed within ninety (90) days; ( iii ) if a trustee or receiver is appointed to take possession of substantially all of Lessee's assets located at the Premises or of Lessee' s interest in this Lease and possession is not restored to Lessee within one hundred eighty ( 180 ) days; or ( iv) if substantially all of Lessee' s assets located at the Premises or of Lessee ' s interest in this Lease is subjected to attachment, execution or other judicial seizure which is not discharged within ninety (90) days . ARTICLE XI. REMEDIES 11.01 Remedies. On the occurrence of any material non- monetary default by Lessee which Lessee, after thirty ( 30) days written notice from Lessor regarding such default has not cured or commenced to cure ( if such default cannot be -13- immediately cured) , Lessor may, at any time thereafter, with or without notice or demand and without limiting Lessor in the exercise of any right or remedy which Lessor may have: (a) Terminate Lessee ' s right to possession of the Premises by any lawful means, in which case this Lease shall terminate and Lessee shall immediately surrender possession of the Premises to Lessor . In such event , Lessor shall be entitled to recover from Lessee all damages incurred by Lessor by reason of Lessee' s default, including ( i ) the worth at the time of the award of the unpaid Monthly Rent Per Ton or Minimum Rent, Additional Rent and other charges which had been earned at the time of the termination; ( ii ) the worth at the time of the award of the amount by which the unpaid Monthly Rent Per Ton or Minimum Rent , Addi- tional Rent and other charges which would have been earned after termination until the time of the award exceeds the amount of such rental loss that Lessee proves could have been reasonably avoided; ( iii) the worth at the time of the award of the amount by which the unpaid Monthly Rent Per Ton or Minimum Rent, Additional Rent and other charges which would have been paid for the balance of the term after the time of award exceeds the amount of such rental loss that Lessee proves could have been reasonably avoided; and ( iv) any other amount necessary to compensate Lessor for all the detriment proximately caused by Lessee' s failure to perform its obligations under the Lease or which in the ordinary course of things would be likely to result therefrom, including, but not limited to, any costs or expense incurred by Lessor in maintaining or preserving the Premises after such default, the cost of recovering Possession of the Premises, expenses of reletting, including necessary renovation or alteration of the Premises , Lessor ' s reasonable attorneys ' fees incurred in connection therewith, and any real estate commission paid or payable. As used in subparts ( i ) and ( ii ) above, the "worth at the time of the award" is computed by discounting such amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of the award, plus 1%. If Lessee shall have abandoned the Premises Lessor shall have the option of ( i ) retaking possession of the Premises and recovering from Lessee the amount specified in this Section 11. 01 (a) , or ( ii) proceeding under Section 11 .01 (b) ; (b) Maintain Lessee ' s right to possession, in which case this Lease shall continue in effect whether or not Lessee shall have abandoned the Premises. In such event, Lessor shall be entitled to enforce all of Lessor ' s rights and remedies under this Lease, including the right to recover the rent as it becomes due hereunder ; -14-- (c) Pursue any other remedy now or hereafter available to Lessor under the laws or judicial decisions of the state in which the Premises is located. 11.02 Cumulative Remedies . Various rights and remedies reserved to Lessor herein, including those not specifically described herein, shall be cumulative, and, except as other- wise provided by statutory law in force and effect at the time of the execution hereof, Lessor may pursue any or all of such rights and remedies, whether at the same time or otherwise. 11.03 Lessee ' s Waiver , Lessee hereby waives any right of redemption or relief from forfeiture under the law of the governing jurisdiction, or under any other present or future law, in the event Lessee is evicted or Lessor takes, posses- sion of the Premises by reason of any material default by Lessee hereunder . 11 .04 Lessor ' s Waiver . No delay or omission in the exercise of any right or remedy of Lessor on any default by Lessee shall impair such a right or remedy or be construed as a waiver . The receipt and acceptance by Landlord of delinquent rent shall not constitute a waiver of any other default; it shall constitute only a waiver of the default in timely payment for the particular rent payment involved. No act or conduct of Lessor shall constitute an acceptance of the surrender of the Premises by Lessee before the expiration of the term. Only a written notice from Lessor to Lessee shall constitute acceptance of the surrender of the Premises and accomplish the termination of the Lease. Lessor 's consent to or approval of any act by Lessee requiring Lessor ' s consent or approval shall not be deemed to waive or render unnecessary Lessor ' s consent to, or approval of, any subsequent act by Lessee. ARTICLE XII . PROTECTION OF LENDERS 12.01 Subordination. Lessor shall have the right to subordinate this Lease to any deed of trust or mortgage encumbering the Premises, and to any advances made on the security thereof and any renewals, modifications, consolida- tions, replacements or extensions thereof, whenever made or recorded . However , Lessee 's leasehold estate and all rights of Lessee hereunder including, but not limited to, Lessee ' s right to quiet possession of the Premises during the Lease term and any extensions thereof, shall not be disturbed except in the event Lessee ' s rights are terminated due to an uncured default on Lessee 's behalf in accordance with the terms of this Lease. Any such subordination of this Lease -15- shall be contingent upon the beneficiary of such encumbrance agreeing in writing to be bound by the terms of this paragraph and agreement. 12.02 Attornment. If Lessor ' s interest in the Premises is acquired by any beneficiary under a deed of trust, mortgagee or purchaser , Lessee shall attorn to the trans feree of or successor to Lessor ' s interest in the Premises and recognize such transferee or successor as Lessor under this Lease and Lessee ' s rights hereunder shall continue in full force and effect. Lessee waives the protection of any statute or rule of law which gives or purports to give Lessee any right to terminate this Lease or surrender possession of the Premises upon the transfer of Lessor ' s interest . 12.03 Signing of Documents. Lessee shall sign and deliver any instrument or documents necessary or appropriate to evidence any such attornment or subordination or agree- ment to do so and Lessor and any assignee or encumbrancer of Lessor shall execute any instruments or documents reasonably requested by Lessee setting forth Lessee 's rights under this Article XII. 12 , 84 Estoppel Certificates. (a) Upon the written request of either Lessee or Lessor ( "Requesting Party" ) , the requested party ( "Requested Party" ) shall execute, acknowledge and deliver to the Requesting Party a written statement certifying: ( i ) that none of the terms or provisions of this Lease have been changed (or if they have been changed, stating how they have been changed) ( ii) that this Lease has not been cancelled or terminated; ( iii ) that the last date of payment of the rent referred to in sections 3 . 02 and 3.05 and other charges and the time period covered by such payment is correct ; and ( iv) that Requesting Party is not in default under this Lease (or , if the Requesting Party is claimed to be in default, stating why) . Requested Party shall deliver such statement to the Requesting Party within ten ( 10 ) days after the Requesting Party ' s request . Any such statement by the Requested Party may be given to any prospective purchaser or encumbrancer of the Premises. Such purchaser or encum- brancer may rely conclusively upon such statement as true and correct . (b) If the Requested Party does not deliver such statement to the Requesting Party within such ten ( 10 ) day period, the Requesting Party, and any prospective purchaser or encumbrancer, may conclusively presume and rely upon the following facts: ( i ) that the terms and provisions of this _16_ Lease have not been changed except as otherwise represented by the Requesting Party; ( ii ) that this Lease has not been cancelled or terminated except as otherwise represented by the Requesting Ratty; ( iii ) that the last date of payment of the rent referred to in Section 3 .02 and other charges and the time period covered by such payment is correct as represented by the Requesting Party; ( iv) that not more than one month's rent referred to in Section 3 .02 or other charges have been paid in advance; and (v) that the Requesting Party is not in default under the Lease. In such event, the Requested Party shall be estopped from denying the truth of such facts. ARTICLE XIII. SALE OR TRANSFER OF PREMISES BY LESSOR 13. 01 Liability. In the event of any sale or exchange of the Premises by Lessor and assignment by Lessor of this Lease, Lessor shall be and is hereby entirely freed and relieved of any liability under any and all of its covenants and obligations contained in or derived from this Lease arising out of any act , occurrence of omission relating to the Premises of this Lease occurring after the consummation of such sale or exchange and assignment , and the grantee shall be deemed to have assumed and will carry out any and all of the covenants and obligations of Lessor under this Lease occurring after the consummation of the sale or exchange of the Premises, provided that : (a) An estoppel certificate reasonably acceptable to Lessee has been executed by Lessor ; and (b) A specific assumption agreement reasonably acceptable to Lessee has been executed by the transferee. 13.02 Transfer of Lessee' s Deposit . If any security deposit or prepaid rent has been paid by Lessee, Lessor may transfer the security deposit or prepaid rent to Lessor 's successor and on such transfer Lessor shall be discharged from any further liability in reference to the security deposit or prepaid rent . 13.03 Right of First Refusal . Should Lessor at any time during the Initial Term of this Lease or any extension thereof, elect to sell the Premises or any portion thereof, or the additional property described in Exhibit "C" attached hereto ( the Premises and the Exhibit "C" property are here- inafter collectively referred to as the "Option Property" ) , Lessor hereby grants to Lessee a right of first refusal to acquire the Option Property or any portion thereof which Lessor may have elected to sell; provided, however , that -17- with respect to the Exhibit "C" property, this right of first refusal will be subject and subordinate to any right of first refusal which Lessor may have given to the lessee of such property within thirty ( 30) days of the execution of this Lease. Such right of first refusal will be subject and subordinate to the statutory requirements governing the disposition of real property by municipalities as described in California Government Code Section 54220 et seq. as those provisions may be amended from time to time. If permitted by applicable statutes, Lessor will provide to Lessee a written copy of the best bona fide offer obtained by Lessor . Following Lessor 's compliance with applicable statutory requirements, Lessee will have an option for a period of sixty (60) days to acquire the Option Property upon the same terms and conditions as specified in the offer Previously tendered to Lessee by Lessor . ARTICLE XIV. LEGAL COSTS 14.01 Attorney Fees. In the event any action for breach of or to enforce the provisions of this Lease is commenced, the court in such action shall award to the party in whose favor a judgment is entered, a reasonable sum as attorney's fees and costs. Such attorney' s fees and costs shall be paid by the losing party in such action. 14 .02 Indemnification. Lessee shall indemnify Lessor against and hold Lessor harmless from all costs, expenses, demands and liability incurred by Lessor , if Lessor becomes or is made a party to any claim or action (whether directly or by cross-complaint) (a) instituted by any third party against Lessee, or by or against any person holding any interest under or using the Premises by license or of agreement with Lessee; (b) for foreclosure of any lien for labor or material furnished to Lessee or such other person; (c) otherwise arising out of or resulting from any act or transaction of Lessee or such other person; or (d) necessary to protect Lessor ' s interest under this Lease in a bankruptcy or other insolvency proceeding . ARTICLE XV. GENERAL PROVISIONS 15.01 Corporate Authority. If Lessee is a corporation, each person signing this Lease on behalf of Lessee repre- sents and warrants that he has full authority to do so and that this Lease binds the corporation. within thirty ( 30) days after this Lease is signed, Lessee shall deliver to Lessor a certified copy of resolution of Lessee ' s board of directors authorizing the execution of this Lease or other evidence of such authority reasonably acceptable to Lessor . -18- 15.02 Title/Quiet Enjoyment . Lessor covenants that it has and will continue to have at the commencement of the term of this Lease, title to the Premises and the right to make this Lease for the term hereof and any extensions thereof. Lessor further covenants that as long as Lessee is not in default and Lessee's interest hereunder has not been terminated under the terms hereof, Lessee shall have quiet and peaceful possession of the Premises and shall enjoy all of the rights herein granted without interference. 15.03 Time. Time is of the essence of this Lease and each and all of its provisions in which performance is a factor. 15.04 Severability. Any provision of this Lease which shall prove to be invalid, void or illegal shall in no way affect, impair or invalidate any other provision hereof, and such remaining provisions shall remain in full force and effect unless the invalidation, voidness, or illegality of such provision materially frustrates the uses of the Premises Permitted to Lessee by this Lease. 15.05 Interpretation. The captions of the Articles or Sections of this Lease are to assist the parties in reading this Lease and are not a part of the terms or provisions of this Lease. Whenever required by the context of this Lease, the singular shall include the plural and the plural shall include the singular . The masculine, feminine and neuter genders shall each include the other . In any provision relating to the conduct , acts or omissions of Lessee or Lessor, the term "Lessee" or "Lessor" shall include Lessee' s or Lessor 's agents, employees, contractors, invitees, successors or others using the Premises with Lessee' s or Lessor ' s express or implied permission. The parties acknowledge that this Lease is a negotiated document in which each party has been represented by legal counsel and that any interpretation of the provisions of this Lease will be undertaken in a fair and neutral manner regardless of which party may have prepared the final copy of this Lease. 15.06 Integration. There currently exists a lease between the parties relating to the Premises. Except for the existence of said lease, the parties acknowledge that this Lease fully replaces and supersedes all prior leases, subleases and rights of possession which may have previously existed between Lessor and Lessee or any predecessor of Lessee. Except for said lease, this Lease is the only agreement between the parties pertaining to the lease of the Premises and no other agreements are effective. All amendments to this Lease shall be in writing and signed by all parties. Any other attempted amendments shall be void. -19- 15.07 Recordation. Neither Lessor nor Lessee shall record this Lease, however , either Lessor or Lessee may require that a "Short Form" memorandum of this Lease executed by both parties be recorded. Both parties agree to execute said document and cause their signatures to be notarized in a manner acceptable for recordation with the County Recorder of the County of San Bernardino. 15.08 Brokers. Lessee and Lessor warrant to the other that neither has had any dealings with any real estate broker and each indemnifies and holds the other free and harmless from and against any and all liability for payment of any brokers ' commissions or fees in connection with this Lease. 15.09 Waivers. No waiver by Lessor or Lessee of any provision of this Lease shall be effective unless in writing or shall be deemed to be a waiver of any other provision hereof or of any subsequent breach by Lessee or Lessor of the same or any other provision. Lessor ' s or Lessee' s consent to or approval of any act by the other requiring Lessor ' s or Lessee's consent shall not be deemed to render unnecessary the obtaining of Lessor ' s or Lessee' s consent to or approval of any subsequent act by the other , whether or not similar to the act so consented or to be approved. 15.10 Liens . Lessee shall keep the Premises and the property in which the Premises are situated free from any liens arising out of any work performed, materials furnished or obligations incurred by Lessee. 15.11 Binding Effect; Choice of Law. This Lease binds any party who legally acquires any rights or interest in this Lease from Lessor or Lessee. However ; Lessor shall have no obligation to Lessee ' s successor unless the rights or interests of Lessee ' s successor are acquired in accor- dance with the terms of this Lease. The laws of the state of California shall govern this Lease. 15. 12 Inability to Perform. Except for Lessee ' s financial ability to pay, if either party cannot perform any of its obligations due to events beyond their control, the time provided for performing such obligations shall be extended by a period of time equal to the duration of such events . Events beyond the control of the parties include, but are not limited to, acts of God, or civil commotion, labor disputes, strikes, fire, flood or other casualty, shortages of labor or material, government regulation or restriction and weather conditions. 15.13 Economic Feasibility. In the event Lessee is prohibited through any governmental regulation from operating profitably on the Premises , Lessee will so notify Lessor in writing, such notice to include specific reference to the governmental regulations in question and projections or other financial statements relative to the Premises confirming such lack of profitability. Such notice will also include the proposed date upon which Lessee desires to terminate the Lease due to such lack of profitability - which date will not be less than one hundred twenty ( 120) days following the date upon which such notice is tendered to Lessor. Lessor may thereafter conduct such legal and financial review of the facts and circumstances as it deems necessary in order to confirm Lessee ' s determination of lack of profitability. In the event of a disagreement between Lessor and Lessee regarding the profitability of Lessee 's continued operation at the Premises, the matter will be submitted to arbitration as described in Section 15.14 below. In the event Lessee determines that there do not exist adequate aggregate reserves on the Premises (either as to quantity or quality) for Lessee to operate profitably on the Premises, Lessee may give notice to Lessor of its election to terminate this Lease and all obligations hereunder , which written notice must be delivered to Lessor not less than one ( 1) year prior to the proposed effective date of such termi- nation. In the event Lessor disputes the reasonableness of Lessee 's determination as to the adequacy of quantity or quality of reserves, the determination of the adequacy of such reserves for the continued profitable use by Lessee of the Premises will be submitted to arbitration in accordance with the provisions of Section 15 . 14 below. Any such arbitration regarding the adequacy of reserves will be concluded prior to the expiration of the one (1 ) year notice period. 15.14 Arbitration. Any arbitration pursuant to Sections 8. 02 or 15. 13 of this Lease will be conducted in Redlands, California, in accordance with the rules of the American Arbitration Association. Each party will select a single arbitrator and the two arbitrators so selected will select a third arbitrator . Each of the arbitrators so selected will be knowledgeable in the area which is the subject of the arbitration. The determination of any such arbitration will be final and binding upon both parties . 15.15 Notices. Any notice or demand required or Permitted to be given hereunder shall be in writing and may be served personally or by mail; if it is by mail it is to be sent by United States Mail, postage prepaid, addressed to -21- the Lessee at the Premises, and to the address hereinbelow, or to such other place as Lessee may from time to time designate in a notice to the Lessor . All notices and demands by the Lessee to the Lessor shall be sent by United States Mail , postage prepaid, addressed to the Lessor at the address set forth herein, and to such other person or place as the Lessor may from time to time designate in a notice to the Lessee. To Lessor at : 30 Cajon Street Redlands , CA 92273 To Lessee at: 2854 N. Santiago Blvd. Suite 200 Orange, CA 92667 15.16 Exhibits. Exhibits "A" and "B" attached hereto are a part of this Lease . -22- IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the day and year first above written. LESSOR: THE CITY OF REDLANDS, a municipal corporation By: Its iCtltd11.7 44-6e2fki By: Its '--- - , ( LESSEE: C.L. PHARRIS °ND & GRAVEL, INC a Californi. 0,40r ration By: ' Ail- /:/1/: . i Its ,l' i ‘,., ---1 ' ___4,-,------- - By: 41/4„...et 1„- --x, ' Its t , -23- GMG0170 EXHIBIT "A" That certain property located in the City of Redlands, San Bernardino County, California, described as follows : The Southwest 1/4 , and the South 1/2 of the Northwest 1/4 of Section 9 , T. 1 S . , R. 3 W. , San Bernardino Meridian. (Assessor ' s Parcel Nos . 167-011-9 , 11 ) EXCEPTING THEREFROM Parcel 1 and Parcel 2 of Parcel Map No. 6127 as recorded in Book 60 of Parcel Maps , Page 23 in the office of the County Recorder, County of San Bernardino, State of California . ALSO EXCEPTING therefrom that portion deeded from the City of Redlands to the State of California as per Official Records 83-153141 . (Assessor ' s Parcel Nos. 167-011-12, 13 ) ALSO EXCEPTING therefrom that portion deeded from the San Bernardino County Flood Control District to the City of Redlands as recorded in Book 8045 of Deeds , Page 907 . (Assessor ' s Parcel No . 167-011-04 ) ALSO EXCEPTING therefrom that portion described as follows: The South 205 feet of the Southwest 1/4 of Section 9 , T. 1 S . , R. 3 W. , San Bernardino Meridian, excepting therefrom that portion deeded from the San Bernardino County Flood Control District to the City of Redlands as recorded in Book 8045 of Deeds , Page 907 . (Assessor ' s Parcel No. 167-011-10 ) ALSO EXCEPTING therefrom that portion of the Northwest 1/4 of Section 9 , T . 1 S. , R. 3 W. , described as commencing at the Southwest corner of land conveyed by deed recorded in Book 1521 , Page 462 official records ; thence S 89° 19 ' 42" E, along South line of land so conveyed 1095 . 37 feet; thence S 680 52 ' 13" W, 420 . 62 feet ; thence S 52° 41 ' 07" W, 886 . 70 feet to the West line of the Northwest 1/4 of said section; thence N 00 11 ' 01" E, along said West line, 701 . 98 feet to the Point of Beginning, excepting street right-of-way. (Assessor ' s Parcel No , 167-011-08 ) ALSO EXCEPTING therefrom Parcel 4 as shown on Exhibit A attached hereto . EXHIBIT "B" ILLUSTRATION OF RENT ADJUSTMENT PROVISIONS The purpose of this exhibit is to illustrate the rent adjustment provisions described in Sections 3. 03 ( regarding Monthly Rent Per Ton) and 3.05 ( regarding Minimum Rent) of the Lease. The Index numbers utilized are hypothetical and are used for purposes of illustration only. 1. MINIMUM MONTHLY BASE RENT ADJUSTMENTS (a) Initial Term (July 1, 1991 - June 30, 2016) . (i ) Comparison Index (1/91) = 356.8 Base Index ( 1/87 ) = 322. 0 34 .8 = 10.8% increase Thus, 20 /ton X 110 . 8% = 22. 16 /ton during the first two lease years (7/1/91 - 6/30/93 ) ( ii ) Comparison Index ( 1/93 ) = 372.9 Base Index (1/87 ) = 322- 0 50. 9 = 15. 8% increase Thus , 20 /ton X 115 . 8% = 23 .18 /ton during the next two lease years (7/1/93 - 6/30/95) ( iii ) Comparison Index ( 1/15 ) = 960.0 Base Index ( 1/87 ) = 322 . 0 638.0 = 198 . 1% increase Thus , 20 /ton X 298 . 1% = 59. 62 /ton during final lease year ( 7/1/15 - 6/30/16) and first year of extended term if option is exercised (7/1/16 - 6/30/17) . ETC. B-1 (b) Extended Term (Commencing July 1 , 2016) . Comparison Index ( 1/17 ) = 1008 . 0 Base Index ( 1/15 ) = 980 . 0 48 . 0 = 5% increase Thus, 59 . 62 /ton X 105% = 63 . 60Vtoo during the next two lease years ( 7/1/17 - 6/30/19 ) ETC. (c) Indexes and Effective pates of Adjustments During Initial Term and Extended Term. Effective Date Indices ' nf Adjustments ( i ) Initial Term: Base = 1/87 Comparison = I/91 7/91 1/93 7/93 1/95 7/95 1/97 7/97 1/99 7/99 1/01 7/01 1/03 7/03 1/05 7/05 1/07 7/07 1/09 7/09 1/11 7/11 1/13 7/13 1/15 7/15 B-2 . ^ Effective Date Indices of Adjustments^ a ( i ) Initial Term: Base = 1/15 Comparison = I/17 7/17 1/19 7/19 1/21 7/21 1/23 7/23 1/25 7/25 1/27 7/27 1/29 7/29 1/31 7/31 1/33 7/33 1/35 7/35 1/37 7/37 1/39 7/39 2 . MINIMUM MONTHLY RENT ADJUSTMENTS. Pursuant to Section 3 . 05 , Minimum Rent will be Adjusted every five years throughout the term of the Lease and any extensions in accordance with increases in the Consumer Price Index as set forth in the Lease. The base CPI for all comparisons will be April , I991 , B-3 . ' ^ Comparison CPI ( 4/96) = 425 . 4 Base CPI ( 4/91 ) = 396 . 0 39 . 4 = 10 . 3% Thus, $2, 500 Minimum Rent X 110 . 2% = $2 ,755/month Minimum Rent during the next five lease years (7/1/96 - 8/30/0I ) Comparison CPI ( 4/01) = 493 . 2 Base CPI ( 4/91 ) = 386 . 0 107 .2 = 27 . 8% Thus, $2, 500 Minimum Rent X 127 . 8% = $3, 195/mootb Minimum Rent during the next five lease years ( 07/01/01 - 00/30/06 ) ETC . B-4 GMGOl70 EXHIBIT "C" LEGAL DESCRIPTI©N OF ADDITI©NAL PROPERTY--RIGHT OF FIRST REFUSAL (To be Attached) PIAT OF SURVEY b3 **CO.** tl 0t. cp�VF+..axy a+xb4Mt*@r Tri[ *Mr*tttMt Cr Ai*ii®Wiii**0 i.,00w*Y**€t*****00.44 1 011Jx.**IB. xi#"41400 \ . ., f , 4 Uy� 1 f IST .., 4 tw AREA•116,472 T 27 A ... i OS ACFE3 ® s% ! .w+^.r. ,+` �+ T� . xt�tl ak+e^tticxat,r^xC0*ti1B+Stlr ltatttx etayq n. . "'`,. ar+ # F4L, Ar € leaei�*xxwtrlcwerrlrr*rr i- 0 s.: i. 'PLC °. *. I le! I 0 +.: ` * r«0i0Ggxi,1..06110,61 6.4*+.eK 0,0011!kjP.1000 441 * •x y e0*-+�MiC4r41•KiwOx wii^r*'w90n MiMwVMIC1+Y .:. j. t K. ►*Y+IaCiilCl rM +r!f1Jrl4i Pri 040^.0,0r0 FMO : s i Pp0. 2.122 PM8 €)1 3. • . IS I .. PAACE;. I PA ItCCL: 2 at rt i A . I M*P1m+t4 t - m.. -10.4.. -, .� ` 40" rvutotT LAW OFFICES CHARLES W. UNS\WORTH A PROFESSIONAL CORPORA'NON CHARLES W. uNSWORTM Baf3 SOUTH PULLMAN STREET,. SUITE A VVILL1Am G. BISSELL SANTA ANA, CALIFORNIA 92705-5818 TELEPHONE (7!4 261-7224 TELECOPIEP 17141 26-196S \41/>>., January 4 , 1988 Mr . John E. Holmes City Manager City of Redlands 30 Cajon Street Redlands , California 92373 Re : Lessor Consent Dear Mr . Holmes: Enclosed herewith please find a Lessor ' s Consent , This Lessor ' s Consent is being required by The Bank of California , N .A. , for certain financial arrangements which are being made between The Bank of California and C . L. Pharris Sand & Gravel , Inc . You have executed similar consents before and we request your prompt attention to this matter . Thank you for your cooperation. Yours truly, CHARLES W. UNSWORTH, A PROFESSIONAL CORPORATION ,e,14441.-t :51e1„.4./ BY: CHARLES W. UNSWORTH CWU:cb Enclosure RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: The Bank of California, N.A,. 3403 Tenth Street, Suite 700 Riverside, California 92501 Attn : Gilbert R. Carrion, Vice President CONSENT TO ASSIGNMENT OF LEASE AND FIXTURE FILING C. L. PHARRIS SAND & GRAVEL, INC. , a California corpora- tion ("Assignor") , THE BANK OF CALIFORNIA, N.A. ("Assignee") , and THE CITY OF REDLANDS , a municipal corporation ("Lessor") , agree as follows: RECITALS This Agreement is made with reference to the following: A. Lessor and Assignor have entered into that certain Lease dated August 18, 1961 executed by Lessor as lessor and Tri-City Rock-Fontana, as lessee, covering certain real property more particularly described in Exhibit A attached hereto ("Alabama Street Property") , a short form of which was recorded in the Official Records of San Bernardino County, California, on March 18 , 1970 in Book 7407, Page 930 ("Lease") . B. Assignor's predecessor-in-interest has constructed a sand and gravel rock crushing and processing plant facility and ready-mix batch plant on the Alabama Street Property (herein "the Fixtures") . C. Assignor has requested Assignee to make a loan to Assignor on the terms and subject to the conditions set forth in that certain Credit Agreement dated December , 1987. ("Credit Agreement") As part of said Credit Agreement, Assignor has assigned its interest in the above-referenced Lease to Assignee as security pursuant to a Deed of Trust and Assignment of Rents of even date therewith and a Security Agreement of even date therewith (collectively referred to as the "Assignment") , has granted to Assignee a security interest in the Fixtures pursuant to a Fixture Filing of even date therewith (the "Fixture Filing") , and has agreed to obtain Lessor' s consent thereto. B7: 18b 12 . 10 . 87 1 . AGREEMENT NOW, THEREFORE, BE IT AGREED AS FOLLOWS : 1 . Assignment and Assumption. Assignor hereby confirms that it has granted to Assignee a security interest in the Fixtures which have become and are to become Fixtures on the property which is the subject of the Lease , and has granted, transferred, set over and assigned to Assignee pursuant to the Assignment, with power of sale, all its right, title and interest in the Lease, together with Assignor' s interests in any rents, issues and profits of the Lease , including any sublease thereof which may now exist or may hereafter be made affecting the Alabama Street Property, and all of Assignor' s right, title and interest in all improvements, Fixtures and personal property located on the Alabama Street Property. 2 . Lessor' s Consent and Estoppel. Lessor consents to the Fixture Filing and the Assignment and to Assignee ' s exercise of its rights thereunder, without waiver of any restrictions concerning further assignment by Assignee after any foreclosure; Provided, however, that Lessor hereby expressly consents to Assignee' s assignment of its interest in the Lease as provided in Paragraph 4 below. Lessor further represents and warrants to Assignee as follows; the Lease is in full force and effect and has not been modified or amended; rent is being paid on a current basis; there is no existing event of default or condition which, with the passage of time, could ripen into an event of default by Assignor under the Lease; and Lessor has no setoffs, claims or demands against Assignor which impair, or could impair, the enforceability of the Lease by Assignor. Assignor has no right or option to purchase the Alabama Street Property and no such right or option shall be granted with the prior written consent of Assignee. 3 . Assignor' s Covenants. To protect the security of the Assignment, Assignor covenants: 3. 1 To observe and perform all of the obligations imposed upon the Assignor in the Lease and not to do or permit to be done anything which would impair the security thereof; and not to alter, modify or change the terms of the Lease or any other document pertaining to the Lease or surrender, cancel or terminate the same without the prior written consent of Assignee. 3. 2 To assign and transfer to Assignee any and all further leases or subleases upon all or any part of the Alabama Street Property which may be entered into, whether between Assignor and the Lessor or with any other party, and to execute and deliver, B7 :18b 12.10.87 2 . at the request of Assignee, all such further assurances and assignments in the Alabama Street Property as Assignee may from time to time require. 4 . Further A.reements . It is mutually agreed that: 4. 1 So long as there shall exist no default by Assignor in the payment of any indebtedness secured hereby or in the perfor- mance of any obligations, covenants or agreements contained herein or in the Lease or in the Credit Agreement, Assignor shall have the right to remain in possession of the Alabama Street Property to retain, enjoy and use all rents, issues and profits from the Alabama Street Property and shall remain liable to Lessor for the performance of the provisions of the Lease. 4 . 2 Upon or any time after default in the payment of any indebtedness secured hereby, or upon any default in the perfor- mance of any other obligation, covenant or agreement contained herein or in the Lease or Credit Agreement, Assignee, without in any way waiving such default, may, at its option, exercise any or all remedies and rights it may have under the Assignment, the Fixture Filing, the Credit Agreement, any other instrument or document executed in connection with any of the foregoing or by operation of law, at law or in equity. 4 .3 Assignee does not assume and shall have no liability for any obligations of Assignor under the Lease or any subleases. Assignor shall and does hereby agree to indemnify Assignee for and to hold Assignee harmless from any and all liability, loss or damage which may or might be incurred under the Lease or any sublease or under or by reason of the Assignment and from any and all claims and demands whatsoever which may be asserted against Assignee by reason of any alleged obligation or undertakings on its part to be performed or discharge any of the terms, covenants or agreements contained in the Lease or any sublease . Should Assignee incur any such liability, loss or damage under the Lease or any sublease or under or by reason of the Assignment, or in the defense of any such claims or demands, the amount thereof, including costs , expenses and reasonable attorneysfees, shall be secured hereby, and Assignor shall reimburse Assignee therefor immediately upon demand, and upon the failure of Assignor so to do, Assignee may, among other things, declare all sums secured by the Assignment immediately due and payable. 4 .4 Upon the payment in full of all indebtedness secured hereby, the Assignment shall become and be void and of no effect, and shall be reconveyed by Assignee , but the affidavit, certifi- cate, letter or statement of any officer, supervisor, or attorney of Assignee, showing any part of said indebtedness to remain unpaid shall be and constitute conclusive evidence of the validity, B7:18b 12 .10. 87 3 . effectiveness and continuing force of the Assignment and any Person may and is hereby authorized to rely thereon. 4.5 Assignee may take or release other security, and release any party primarily or secondarily liable for any indebtedness secured hereby, may grant extensions, renewals or indulgence with respect to such indebtedness, and may apply any other security therefor held by it to the satisfaction of such indebtedness without prejudice to any of its rights hereunder. 4 . 6 The term "Lease" as used herein means the Lease hereby assigned and any extension or renewal thereof, and any leases or subleases subsequently executed by Assignor or Assignee covering the Alabama Street Property or any part thereof. Whenever the context so requires, the masculine gender includes the feminine or neuter and the singular number includes the plural and con- versely. 4 .7 Nothing herein contained and no act done or omitted by Assignee pursuant to the powers and rights granted it by Assignee shall be deemed to be a waiver by Assignee of its rights and remedies under the aforementioned Credit Agreement, but the Assignment is made and accepted without prejudice to any of the rights and remedies possessed by Assignee under the terms thereof. The rights of Assignee to collect and enforce any other security or hereafter available to Assignee may be exercised by Assignee either prior to, simultaneously with, or subsequent to any action taken by it hereunder. 4 .8 This Agreement inures to the benefit of Assignee, its assigns and successors-in-interest, and is binding upon and inures to the benefit of Assignor and any owner of the Alabama Street Property or any portion thereof. 5. Default of Lease; Notice to Assignor. 5, 1 Notice to Assignee. Lessor hereby agrees to send to Assignee a copy of any notice of default that Lessor sends to Assignor concurrently with sending such notice to Assignor. 5.2 Right to Cure. In the event of default of any provision of the Lease, Lessor hereby agrees that Assignee shall have an additional period after the expiration of all applicable periods for Assignor to cure such defaults of (i) ten (10) business days with respect to payment defaults, and (Ii) thirty (30) days with respect to all other defaults in which to cure all such defaults of Assignor. If any default cannot reasonably be cured within the period allowed as provided above, the commencement of the cure of the default by or on behalf of Assignee within the appli- cable period, including foreclosure of the Assignment, judicially or nonjudicially, shall be deemed the cure of the default, provided B7: 18b 12. 10 . 87 4 . the cure of such default continues diligently to be prosecuted to completion. 6 . Amendment of Lease. Lessor and Assignor shall not enter into any agreement that alters, modifies , terminates, cancels or amends the Lease without Assignee' s consent. Any amendment of the Lease in violation of this provision shall have no force or effect on Assignor. 7. Miscellaneous, 7. 1 Attorneys ' Fees. If any party commences any action against any of the parties arising out of or in connection with this Agreement, the Assignment or the Fixture Filing, the pre- vailing party or parties shall be entitled to recover from the losing party or parties reasonable attorneys ' fees and costs of suit. 7 . 2 Notice. Any notice, demand, request, consent, approval or communication that either party desires or required to be given to the other party or to any other person, shall be in writing and either served personally or sent by pre-paid first-class mail. Any notice, demand, request, consent, approval or communica- tion that either party desires or is required to give to the other party, shall be addressed to the other party at the address set forth below. Either party may change its address by notifying the other party of the change of address. Notice shall be deemed communicated within forty-eight (48) hours from the time of mailing if mailed as provided in this subsection. Assignor: C. L. Pharris Sand & Gravel, Inc. 2854 N. Santiago Blvd. , Suite 200 Orange, California 92667 Assignee : The Bank of California, N.A. 3403 Tenth Street, Suite 700 Riverside, California 92501 Attn: Gilbert R. Carrion, Vice President Lessor: City of Redlands 7. 3 Successors . This Agreement shall be binding on and inure to the benefit of the parties and their successors and assigns. 7.4 Lessor acknowledges that Assignee shall make a loan to Assignor pursuant to the Credit Agreement, in reliance upon the B7 : 18b 12. 10. 87 5 . representations , warranties and covenants of Assignor and Lessor as set forth above, and Assignor and Lessor enter into this Agreement with the intent that Lessor shall so rely. IN WITNESS WHEREOF, this Agreement is duly executed by the parties hereto as of the date set forth below. ASSIGNOR: C. L. PHARRIS SAND & GRAVEL, INC. , a California corporation By Its Dated: By Its Dated: ASSIGNEE: THE BANK OF CALIFORNIA, N.A. By Its Dated: B7 : 18b 12 . 10 . 87 6 . By Its Dated: LESSOR: CITY OF REDLANDS , a municipal corporation BY f-ii E -I i) ,v ) aif2.21.i Its Oktkii Vamart Dated: - - ? - se By Its Dated: 3 - ,-) / - .:•,2- `i--.-:, B7 : 18b 12. 10 . 87 7 . LAW OFF/CES OF ARTHUR L.LITTLEWORTH* VIRGINIA A.ETTINGER BEST, BEST .6, KRIEGER OFFICES IN GLEN E.STEPHENS* %ACTOR L.wIDLE KoLLTAM P,DARIO-UTE* DANIEL E.OuvIER A PARYNAA*NO weLkiotNa**PFCAMONM,co*FORMkoN* BARTON C.GAUT* DANIEL J.MAHGON 400 MLSSLON SOUABE PALM SPRINGS CHARLES D.FIELD* CAPE E, HERSOLD (BIB) G2 S-7264 PAUL T.SELZER* STEPHANIE K.HARLAN 37E0 UNIVERSITY AVENUE — DALLAS HOLMES* MARC ET EMPEY CHRISTOPHER CARPENTER* JOHN ET ROTTSCHAEFER POST OFFICE BOX IOBB RANOMo MIRAGE RICHARD TL ANDERSON* MARTIN A,MUELLER JOHN D.WAHLIN* J.MICHAEL SUMMEPOLIR RIVERS FOE,CALIFOANSA 92502 (BIB) S68-2,611 m5cHAEL C,HARRIS* HOWARD B.BOLDS --- LK,CURT EALLY* EUGENE TANAKA TELEPHONE(714)686-1450 SAN 01E00 THOMAS G.SLOVAK* MARGARET r, TANANA JOHN EL BROWN* BASIL T,CHAPMAN TeLecoPicA (714) 6e6-3083 NIPS)WET.BOIS RONALD J.KOHUT 4EFFE R-K J.CRANDALL .......... MICHAEL T.RIDDELL.* SCOTT C,SMITH MEREDITH A,JURY* LANCE A.ADAIR RAYMOND ROST oeisa-,s67) 501100N. C-0555515,or CouNsci. MICHAEL GRANT JACK S.CLARKE JANEN H,FRIBorP(Bata-197S) 4AMES 8.CORISON,OT COUNSEL VRANCLS J.BAUM 4 JEANNETTE A.PBTERSON EUGENE OFST 893 98 9 CBAR 0 A=.0551515, Of COUNSEL ANNE T.THOMAS* TERI L..votu4ami .0..41rrEp.Now 50R5,f455k5A 0,MARTIN NETHERY* BARBARA E,KRISTAL GEORGE 0,REYES BRAN M.LEWIS HAALHKRTOK.0,C..005nt OP C,A945 WLY.FAM W.FLOYD,JP. TIMOTHY M.CONNOR MICHAEL A.CRYSTE* GEORGE H.CHANT BB GREGORY LL MARONE RONALD A..MAN eikARCOM RICHARD CROSS REBECCA O.LitCNOX KENDALL HL mARVEY BRADLEY E NEurELD CLARK HL ALSOP ELISE N.TRAYNUM DAVID J.ERWIN* DONALD P.BREWSTER m1c.H.,0.6,J.ANDELSON* CECILIA S.WU DOUGLAS 5,PHILLIPS* DAVID A BRANDENBURG CHARLES M.ELLIS* MICHAEL E.NuTMELJR. March 23, 1988 /o ,..„-- LANTSON C..ELDRED* GvarFREy N.WILLIS4:',,,,' Pr",-,-", -rl -j•\ IRWIN L GOLDS WILLIAM O.DAB LING,JR. ANTONIA 0.WEINER WYNNE S.FORTH GREGORY N.WHAINSON BANDY LEE ALLEN HARLEY LL WELLAND THOMAS W.WE1DENBACH DAVID L.BARON TERESA.J.MFELHANNON L. ...,,,,,,,,,......1 1, ---.1 *A PROFESSIONAL CORPORATION Tt._„.T., MANA(:'1:".-"''''' :--71 Hand Delivered ,..., Mr John John Holmes , City Manager City of Redlands 30 Cajon Street Redlands, CA 92373 Re: Pharris Lease Dear John: We appear to be very close to resolving all of the loose , ends which remain following the City Council ' s May 5, 1987 approval of the new lease between the City and Pharris Sand - & Gravel . I have received three recent letters from Pharris ' s attorney and based upon that and prior correspondence, here is how matters now stand: 1 . 1991 Lease. ....... .. My records indicate that you have one copy of the new , Lease, with original signatures on behalf of Pharris . I am enclosing a second copy of that same document which has been similarly executed by Pharris . These two originals both need to be: (a ) executedon behalf of the City; (b) dated (on page 1 ) ; (c) accurate Exhibits "A" and "C" need to be attached; and (d) one fully executed Lease then needs to be returned to me so that I can forwardit to Pharris ' s attorney. STATE OF CALIFORNIA ) ss. COUNTY OF On, before me , the undersigned, a Notary Public in and for said State , personally appeared , known to me (or proved to me on the basis of satisfactory evidence) to be the of THE BANK OF CALIFORNIA, the national banking association that executed the within instrument, known to me to be the person who executed the within instrument on behalf of said association, and acknowledged to me that such association executed the within instrument pursuant to its by-laws or a resolution of its board of directors . WITNESS my hand and official seal. STATE OF CALIFORNIA ) as. COUNTYOF On , before me , the undersigned, a Notary Public in and for said State , personally appeared , known tc, me (or proved to me on the basis of satisfactory evidence) to be the , of THE BANK OF CALIFORNIA, the national banking association that executed the within instrument, known to me to be the person who executed the within instrument on behalf of said association, and acknowledged to me that such association executed the within instrument pursuant to its by-laws or a resolution of its board of directors. WITNESS my hand and official seal. B7 : 18b 12 . 10. 87 9 . STATE OF CALIFORNIA ) ) ss. COUNTY OF SAN BERNARDINO ) On March 31, 1988 , before me, the undersigned, a Notary Public in and for said State , personally appeared Carol : Beswick , known to me (or proved to me on the basis of satisfactory evidence) to be the Mayyor of CITY OF REDLANDS, a municipal corporation of the State of California, that executed the within instrument, known to me to be the person who executed the within instrument on behalf of said entity, and acknowledged to me that such entity executed the within instrument pursuant to its by-laws or a resolution of its board of directors. WITNESS my hand and official seal. OFFICIAL SEAL Mary pubiE -+C4lfoml '� B, Sanchez . Wily Cbtwrt►.6gl.dint*12.1921 STATE OF CALIFORNIA ) ) ss. COUNTY OF SAN BERNARDINO ) On March 31 , 1988 , before me , the undersigned, a Notary Public in and for said State, personally appeared John E. Holmes , known to me (or proved to me on the basis of satisfactory evidence) to be the City Manager of CITY OF REDLANDS, a municipal corporation of the State of California, that executed the within instrument, known to me to be the person who executed the within instrument on behalf ofsaid entity, and acknowledged to me that such entity executed the within instrument pursuant to its by-laws or a resolution of its board of directors . WITNESS my hand and official seal. 4:.':'„,4,.,! •'•'' '.•,. tioMry t�irnta B Sanchez OUNTY 'tity CortitIA.E3c.Jura it 1091 B7: 18b 12. 10 . 87 10 . LAW OFFICES OF BEST, BEST & KRIEGER Mr. John Holmes March 23, 1988 Page 2 Since the form of this Lease was approved by the City Council on May 5 , 1987 and since we in fact received executed copies from Pharris at approximately that same time, I think it would be appropriate for the document to be dated May 5 , 1987 . With respect to the exhibits , Pharris has reviewed and approved the form of Exhibit "A" which you and I previously discussed and which I sent to his attorney in early February. I am enclosing two copies of Exhibit "A" , to be attached to the respective original lease documents . with respect to Exhibit "C" , Section 13 . 03 (pages 17 and 18) indicates that this was intended to describe certain other property ( in addition to the premises under the Lease) to which Pharris would have a right of first refusal . My notes indicate that this additional property was apparently never described in detail during the lease negotiations--although at that time Pharris clearly had in mind some adjacent property owned by the City. Per our telephone conversation today, you will discuss this with Ron Pharris and see if it can be deleted. Pharris ' s attorney enclosed a copy of an Exhibit "C" with his most recent draft of the "Memorandum of Lease" (which I will discuss later ) . However , this Exhibit "C" simply describes most of the same property which is already subject to the Lease -- and is therefore not much help. 2 . Modification of Amended Lease . Back in October , I prepared a form of "Modification of Amended Lease" and forwarded three copies to Pharris' s attorney after it was approved by the City. That document (copy enclosed -- dated October, 1987 ) described the rent in terms of percentages of gross sales prices per ton for materials removed from the site or processed at the site . A letter which I received from Pharris ' s attorney on Monday included a revised form of "Modification of Amended Lease" which contains a different rent arrangement. The newer document adds 1 . 5 cents per ton to rates which were in effect pursuant to an earlier "Memorandum of Agreement Modifying Amended Lease" (dated June, 1981 ) . Under this later form of the proposed "Modi fication of Amended Lease, " the respective rates would be 10 cents per ton (rock, gravel and sand) and 3 . 2 cents per ton ( subbase, fill or borrow) . As with my version of the modification document, this rental increase would be effective from and after duly 1 , 1986. These rates would be subject to adjustment on duly 1 , 1.988 and July 1 , 1990 , in accordance with changes in the Producer Price Index , using the index amount for May, 1987 as a base index . STATE OF ) ) ss. COUNTY nr On , before me, the undersigned, a Notary Public in and for said State , personally appeared known to sae ((pr proved to me on the basis of satisfactory evidence) to be the of C. L. PHARRIS SAND & GRAVEL, INC. , the corporation that executed the within instrument, known to me to be the person who executed the within instrument on behalf of said corporation, and acknow- ledged to me that such corporation executed the within instrument pursuant to its by-laws or a resolution of its board of directors. WITNESS my hand and official seal. STATE OF ) ss. COUNTY OF On, , before me , the undersigned, a Notary Public in and for said State, personally appeared , known to me (or proved to me on the basis of satisfactory evidence) to be the of C. L. P RRIS SAND & GRAVEL, INC. , the corporation that executed the within instrument, known to me to be the person who executed the within instrument on behalf of said corporation, and acknow- ledged to me that such corporation executed the within instrument pursuant to its by-laws or a resolution of its board of directors. WITNESS my hand and official seal. B7: 18b 12. 10 . 87 8 L-Aleg OFFkCES OF BEST., BEST & KRIEGER Mr . John Holmes March 23, 1988 Page 3 Perhaps you could review this and discuss it with Ron Pharris if necessary. If this later revision of the Modification of Amended Lease is acceptable to the City, I would suggest that we obtain a second executed copy from Pharris, have both copies dated and executed by the City and then return one fully executed copy to Pharris through this office . 3. Memorandum of Lease. Section 15.07 of the 1991 Lease provides for the execution and recording of a short form "Memorandum of Lease. " Enclosed is a form of such a document which was forwarded to me yesterday by Pharris ' s attorney. It is substantially the same as a document which I received from Pharris ' s attorney in July of last year. However, since we did not have an accurate legal description, the document could not be executed or recorded. Notice that as received from Pharris ' s attorney, the legal description of Exhibit "C" essentially restates most of the Exhibit "A" legal description. As with the lease agreement itself, we need to resolve the status of this Exhibit "C" before the document is finally recorded. Once that matter has been resolved and the two original lease documents have been executed by the City, it will be appropriate to date the Memorandum (as of the actual date of execution by the City) , the City should then sign and notarize the document and then return it to me so that I can forward it to Pharris ' s attorney. 4 . Lender Consent Form,:' Enclosed with a letter dated January 4 , 1988 , you received from Pharris ' s attorney a document entitled "Consent to Assignment of Lease and Fixture Filing. " This document is being requested by Pharris in order to satisfy the requirements of their lender. I am concerned that in the second paragraph of section 2 (page 2 ) and section 6 (page 5 ) , the City is making representa- tions regarding the current status of the Lease, that it has not been amended, modified, etc. Indeed, the recital in paragraph "A" on page 1 refers only to the 1961 lease with Tri-City Rock, Obviously, the Lease has been amended several times since then and we are in the process of amending it once again retroactive to July of 1986. I think the City can go ahead and sign the document and return it through me to Pharris once the existing lease has been appropriately modified. However, a cover letter from me to Pharris 's attorney should call attention to this, potential inaccuracy. 1-4,0dvoFFIcEsor BEST, BEST & KRIEGER Mr . John Holmes March 23 , 1988 Page 4 John -- why don' t you give me a call after you have had a chance to sort through all of this so that we can decide how to go about finalizing each of these matters. I would strongly advise that each document executed by the City which is to be returned to Pharris be sent through this office so that I can keep track for our records exactly what has 12)11e;:en done . , Ver trlifl yours , t - l / /-- 14 ! '1 ichael r. BEST, BEST & KRIEGER CITY ATTORNEYS CITY OF REDLANDS MG: rd Enclosures the Index , the choice of a substituted basis of comparison will be submitted to arbitration under the rules of the American Arbitration Association , with arbitration to be conducted in the City of Redlands , San Bernardino County, California. 3. Remainder Unchanged . Except as specifically modified herein , the remainder of the Lease as amended continues in full force and effect and binding upon the parties . 4. Effective 'pate. The effective date of this Agreement is July 1 , 1986. The provisions of this Agreement will remain in effect through the expiration of the Lease term -- June 3G1 1991 . 5. Execution. This Agreement is executed as of the date set forth above , at Redlands , California. LESSOR. CITY OF REDLANDS , a municipal corporation Ri�'k.. STATE OF CALIFORNIA SS 1, COUNTY OF SAN BERNARDINO o�-y. 'larch 1988 dayof , in the year ;, n this �1w�it. F before me, B. Sanchez, Notary Public, in and for said State, personally appeared John E. Holmes Personally known to me (or proved to me on the basis of satisfactory evidence) to be the person who executed the within instrument as City Manager of the City of Redlands and acknowledge to me that the City of Redlands executed the within instrument. IN WITNESS WHEREOF, I hereunto set my hand and official seal. ry - for is SANCHEZ My Commission Expires 6/12/91 hoY{90ffMri, ..ft1KMr 12 19igi the Index , the choice of a substituted basis of comparison will be submitted to arbitration under the rules of the American Arbitration Association , with arbitration to be conducted in the City of Redlands , San Bernardino County, California. 3. Remainder Unchanged . Except as specifically modified herein , the remainder of the Lease as amended continues in full force and effect and binding upon the parties . 4. Effective Date . The effective date of this Agreement is July 1 , 1986. The provisions of this Agreement will remain in effect through the expiration of the Lease term -- June 30, 1991 . 5. Execution. This Agreement is executed as of the date set forth above , at Redlands , California. LESSOR: CITY OF REDLANDS , a municipal corporation ... BY: e: „,'j Ci Manager Manager .., . LESSEE: $ C. L. PHARRIS SAND & GRAVEL, INC. , a California corporation / BY: _____ 7 () -- 1 : ,.."--'1 BY: 7 if any , in the Producer Price Index published by the United States Department of Labor , Bureau of Labor Statistics , Commodity Code No . 13-21 ( "construction sand , gravel and crushed stonef, - unadjusted index) -- (the " Index" ) . The Base index will be the index amount for May, 1987 . The Comparison Index will be the Index on July 1 , 1988 and 1990 . On July 1 , 1988 and 1990 , the Comparison Index will be compared with the Base Index and the per ton rental rate will be adjusted accordingly; provided , however , that in no event will the amounts per ton be less than the amounts due pursuant to Paragraph 1 hereof. In the event that the Index is changed so that the Comparison Index differs from the Base Index , the Comparison Index so affected will be converted in accordance with any conversion factor published by the United States Department of Labor , Bureau of Labor Statistics . In the event the Index is discontinued during the term hereof , such other governmental index or computation with which it is replaced shall be used in order to obtain substantially the same result which would have been obtained if the present Index had not been discontinued or revised . If no substituted index is published, the parties will attempt to agree upon a substituted basis of comparison which is based , to the greatest extent possible , upon adjustments in the cost of construction sand , gravel and crushed rock products . If the parties are unable to agree upon a substituted index or basis of comparison within sixty ( 60 ) days following cancellation of MODIFICATION OF AMENDED LEASE THIS AGREEMENT is made this day of , 1988 , by and between THE CITY OF REDLANDS , a municipal corporation ( "Lessor" ) and C. L. PHARRIS SAND & GRAVEL, INC . , a California corporation ( "Lessee" ) with reference to the following facts : RECITALS _. — — A. The parties hereto are the present Lessor and Lessee under that certain Amended Lease dated July 19 , 1966 ( "the Lease" ) , Lessee having acquired its interest thereunder by assign- ment from the original lessee, Leroy Hansberger and Glen Whitlock (dba "Tti-City Rock - Fontana" ) . B . The parties hereto amended said Lease by a document entitled Memorandum of Agreement Modifying Amended Lease dated June 10 , 1981 , and June 11 , 1981 , setting the rental rate through June 30, 1986. C. The parties hereto wish to further amend the Lease to set forth the new rental rate . AGREEMENT The parties therefore agree as follows : 1 . Rent . The rate of rental to be paid by Lessee to Lessor for the period commencing July 1 , 1986, shall be increased one and one-half cents per ton over that rate which was in effect from July 1 , 1984, to June 30, 1986. 2. CPI Increase. Said rental shall be adjusted on July 1 , 1988 and 1990 . Said increase shall be based upon the increase , MEMORANDUM OF AGREEMENT MODIFYING AMENDED LE E This Agreement is made by and between the CITY OF RED DS herein designated as "Lessor" and LIVINGSTON-GRAHAM, herein designated as "Lessee." 1. Parties hereto are the present Lessor and Lessee, respectively, in that certain Amended Lease dated June 15, 1966, and under the terms of said Amended Lease have negotiated and agreed to the rate of rental as set forth herein. 2. The rate of rental to be paid by Lessee to Lessor for the period July 1, 1981 to June 30, 1984 , shall be 7.5 cents per ton for each and every ton of rock, gravel and sand, and 1.5 cents- for each and every ton of subbase, fill or borrow. 3. The rate of rental to be paid by Lessee to Lessor for the period July 1, 1984 to June 30, 1986, shall be 8.5 cents per ton for each and every ton of rock, gravel and sand, and 1.7 cents for each and every ton of subbase, fill or borrow. IN WITNESS WHEREOF we have hereunto subscribed our signatures on the dates hereinafter appearing. CITY OF RED ..• SDS / 0 `_ 19(c I By D. to Ci' f nager LIVINGSTON-GRAHAM -C D. e Ex tive Vice President and Ge al Manager RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: CHARLES W. UNSWORTH, A PROFESSIONAL CORPORATION 2913 S. Pullman Street, Suite A Santa Ana, CA 92705-5818 ( Space above this line for Recorder ' s use) MEMORANDUM OF LEASE This Memorandum of Lease is made this day of 1988 , between THE CITY OF REDLANDS , a municipal corporation ( "Lessor" ) and C. L. PHARRIS SAND & GRAVEL, INC . , a California corporation ( "Lessee" ) , who agree as follows : 1 . Term and Premises. Lessor leases to Lessee , and Lessee leases from Lessor the real property located in the County of San Bernardino , State of California , more particularly described in Exhibit "A" attached hereto, for a term of twenty-five ( 25 ) years commencing July 1 , 1991 . 2 . Options to Extend Term. Paragraph 2 - 02 of the Lease reads as follows, ,: "Provided that Lessee is not in a material uncured default or , if Lessee is in an uncured default, Lessee has made reasonable arrangements to cure same , or if Landlord has waived in writing any default under this Lease then , at the expiration of the Initial Term, any extended term, or on the date of exercise of the options described herein , Lessee shall have the option to extend the Lease term for up to five ( 5 ) additional periods of five ( 5 ) years each. Lessee may exercise its option to extend the Lease term at any time during the final year of the Initial Term or the final year of any extended term, by written notice to Lessor of its intention to extend the Lease term . Except as specifically Provided to the contrary, any such exten- sion will be subject to all the terms and provisions of this Lease. " 3 . Lessee ' s Right of First Refusal . Paragraph 13 . 03 of the Lease reads as follows : "Should Lessor at any time during the Initial Term of this Lease or any extension thereof , elect to sell the Premises or any portion thereof , or the additional property described in Exhibit "C" attached hereto (the Premises and the Exhibit " C" property are hereinafter collectively referred to as the "Option Property" ) , Lessor hereby grants to Lessee a right of first refusal to acquire the Option Property or any portion thereof which Lessor may have elected to sell ; provided, however , that with respect to the Exhibit "Ce property, this right of first refusal will be subject and subordinate to any right of first refusal which Lessor may have given to the lessee of such property within thirty ( 30) days of the execution of this Lease. Such right of first refusal will be subject and subordinate to the statutory requirements governing the disposi- tion of real property by municipalities as described in California Government Code Section 54220 et seq. as those provi- sions may be amended from time to time . If permitted by applicable statutes , Lessor will provide to Lessee a written copy of the best bona fide offer obtained by Lessor . Following Lessor ' s compliance with applicable statutory requirements , Lessee will have an option for a period of sixty ( 60 ) days to acquire the Option Property upon the same terms and conditions as specified in the offer previously tendered to Lessee by Lessor . " The provisions of that certain document entitled Lease between Lessor and Lessee, which Lease is dated , 198 are hereby incorporated into this Memorandum of Lease by reference. The Memorandum or Lease is prepared for the purpose of recordation ani it in no way modifies the provisions of said Lease. "LESSOR" THE CITY OF REDLANDS , a municipal corporation BY' '1 i I- I & *-*1. ? /-<'ll4 Ls i 1 t s : Lk-t, 71[a 4' ... By: Its: "LESSEE" C. L. PHARRIS SAND & GRAVEL, INC. By: Its: BY: Its: -2- STATE OF CALIFORNIA ) ss . COUNTY OF SAN 1 t D On march 31 , 1981, before me, the undersigned , a Notary Public in and for said State, personally appeared Carole Beswick _ and john E, H0lrnes personally known to me (or proved tome- on the basis of satisfac- tory evidence ) to be the persons who executed the within instru- ment as Mayor and City Marl ger. , on behalf of THE CITY OF REDLANDS, the municipal corporation therein named , and; acknowledged to me that such corporation executed the within instrument pursuant to its bylaws or a resolution of its board of directors . QFFCIALSF.AL WITNESS my hand and official seal. Ei.8MIC1.1 Z „KI ��; trbssry Aa COU 4;# (IAN.131E1101APIC11140 PITY Signature . ... �c Conn.120.JirM 1rZ 1991 STATE OF CALIFORNIA ) ) ss. COUNTY OF ) On , 198 , before me, the undersigned , a Notary Public in and for said State, personally appeared and , personally known to me (or proved to me on the basis of satisfac- tory evidence ) to be the persons who executed the within instru- ment as President and Secretary, on behalf of C . L. PH..ARRIS SAND & GRAVEL, INC . , the corporation therein named , and acknowledged to me that such corporation executed the within instrument pursuant to its bylaws or a resolution of its board of directors. WITNESS my hand and official seal. Signature -3- EXHIBIT °A" That certain property located in the City of Redlands, San Bernardino County, California, described as follows : The Southwest 1/4 , and the South 1/2 of the Northwest 1/4 of Section 9 , T. 1 S. , R. 3 W. , San Bernardino Meridian. (Assessor ' s Parcel Nos. 167-011-9,11) EXCEPTING THEREFROM Parcel 1 and Parcel 2 of Parcel. Map No. 6127 as recorded in Book 60 of Parcel Maps , Page 23 in the office of the County Recorder, County of San Bernardino, State of California . ALSO EXCEPTING therefrom that portion deeded from the City of Redlands to the State of California as per Official Records 83-153141 . (Assessor ' s Parcel Nos . 167-011-12 , 13 ) ALSO EXCEPTING therefrom that portion deeded from the San Bernardino County Flood Control District to the City of Redlands as recorded in Book 8045 of Deeds, Page 907 . (Assessor ' s Parcel No , 167-011-04 ) ALSO EXCEPTING therefrom that portion described as follows : The South 205 feet of the Southwest 1/4 of Section 9 , T. 1 S. , R. 3 W. , San Bernardino Meridian, excepting therefrom that portion deeded from the San Bernardino County Flood Control District to the City of Redlands as recorded in Book 8045 of Deeds, Page 907 . (Assessor ' s Parcel No. 167-011-10 ) ALSO EXCEPTING therefrom that portion of the Northwest 1/4 of Section 9 , T. 1 S. , R. 3 W. , described as commencing at the Southwest corner of land conveyed by deed recorded in Book 1521 , Page 462 official records; thence S 89° 19 ' 42" E, along South line of land so conveyed 1095. 37 feet; thence S 68° 52 ' 13" w", 420. 62 feet; thence S 52° 41 ' 07" W, 886 . 70 feet to the West line of the Northwest 1/4 of said section; thence N 0° 11 ' 01" B, along said West line , 701 . 98 feet to the Point of Beginning, excepting street right-of-way. (Assessor ' s Parcel No, 167-011-08 ) ALSO EXCEPTING therefrom Parcel 4 as shown on Exhibit A attached hereto. PLAT OF SURVEY qn.r reAee.te Of in:tlu.iirtti M:rWL'TY.4 t4.itM'+I ra s+.iomit; !Vette,Iii • ' MM.:Y 4417 '.+r`.YYrIM Ir x..18 OM'..wr t=•+L°.:i 711.ar.tE tl I r4 r co. s4. , i % 'tort r l 4 11400E-11.•.17to,172 7 SO Fl i i CA'S ACRE 5 t tw ECtL"4uld i a i wJ� for 4' ;.. oe PARCEL 4 . . . +rsir ur. , I) ` i - ;b , . i., rV01$ ttit#1.t`i,}WJr 44,1 • • r ...Wit,♦r.r rarer.Hr.w+F+++rr++ri.it[i rn.i a 0,..1 i le.-rOtltir MT 1044Meilit All iat9.it 4'1t tr4rror bat*tRi.YI®ir,t..r 041.0*,*,�.,.. PARCEL r 1 . •` Fri 613x7 p me 6;3,63 M PekekCEL I PIteCE6. * r w riirutoilr ft EXHIBIT "C That certain property located in the City of Redlands, San Bernardino County, California , described as follows: The Southwest 1/4 , and the South 1/2 of the Northwest 1/4 of Section 9 , T.1 S. , R. 3 W. , San Bernardino Meridian. (Assessor ' s Parcel Nos , 167-011-9 ,11 ) EXCEPTING THEREFROM Parcel 1 and Parcel 2 of Parcel Map No . 6127 as recorded in Book 60 of Parcel Maps , Page 23 in the office of the County Recorder, County of San Bernardino, State of California. ALSO EXCEPTING therefrom that portion deeded from the City of Redlands to the State of California as per Official Records 83-153141 . (Assessor ' s Parcel Nos , 167-011-12 , 13 ) ALSO EXCEPTING therefrom that portion deeded from the San Bernardino County Flood Control District to the City of Redlands as recorded in Book 8045 of Deeds , Page 907 . (Assessor ' s Parcel No . 167-011-04 ) ALSO EXCEPTING therefrom that portion described as follows : The South 205 feet of the Southwest 1/4 of Section 9 , T. 1 S. , R. 3 W. , San Bernardino Meridian, excepting therefrom that portion deeded from the San Bernardino County Flood Control District to the City of Redlands as recorded in Book 8045 of Deeds , Page 907 . (Assessor ' s Parcel No , 167-011-10 ) ALSO EXCEPTING therefrom that portion of the Northwest 1/4 of Section 9 , T. 1 S . , R. 3 W. , described as commencing at the Southwest corner of land conveyed by deed recorded in Book 1521 , Page 462 official records ; thence S 89' 19 ' 42" E, along South line of land so conveyed 1095 . 37 feet ; thence S 68' 52 ' 13" W, 420 .62 feet; thence S 52° 41 ' 07" W, 886. 70 feet to the West line of the Northwest 1/4 of said section ; thence N 0° 11 ' 01" E, along said West line, 701 . 98 feet to the Point of Beginning, excepting street right-of-way. (Assessor ' s Parcel No . 167-011-08 ) - . ... . t , ., . ,4s ,..„ ay is, - w , i t _,,,„„,,,,,,:"'o,,. ..,-,:— \----;", — HIGH A.} L.,, \ 15.2 A G 1 11 ".''''''..k.,-'''' of A,' -~ � ) % ,4.„,,,,,,.., fF�. f,f I 1 } \ `s �+ , ` v � r� n M ,i x7( }-.),:j L,,,,_4 t' v:k . .), . t t' , ' •' ! ''''' tZ). -* \ ',2,`;':-..,,, . ° " ''''\ , \ ' "[ ,, ,.y.w s. fro d4 G) 4 �, "./..,.. 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