EXHIBIT 10.22
ASSIGNMENT AND ASSUMPTION OF
GROUND LEASE AND
CONSENT OF
LANDLORD
THIS ASSIGNMENT AND ASSUMPTION OF
GROUND LEASE AND CONSENT OF LANDLORD (“Assignment”) is
made by and between CUYAMACA BANK, NATIONAL ASSOCIATION, a national
banking association, as Assignor, COMMUNITY NATIONAL BANK, a
national banking association, as Assignee, and MARY AND DARI GARMO,
as Landlord, to that certain Ground Lease dated August 1, 1988
between MAST/MISSION GORGE DEVELOPMENT LIMITED, a California
limited partnership, as amended by that certain SUPPLEMENT TO
GROUND LEASE DATED AUGUST 1, 1988, dated November 14, 1996 (the
ground lease, as amended, being referred to herein as the
“Lease”), as of the Effective Time, as defined below,
with reference to the following facts:
A. Pursuant to the Lease, Landlord
leased to Assignor and Assignor leased from Landlord the improved
real property at 7753 Mission Gorge Road, in the City of Santee,
County of San Diego, State of California, which Lease remains in
full force and effect.
B. Assignee, Community Bancorp,
Inc., which is Assignee’s parent company, and Assignor
entered into that certain Agreement to Merge and Plan of
Reorganization (“Merger Agreement”), dated June 28,
2004, whereby Assignor will merge with and into
Assignee.
C. As a part of the merger of
Assignor into Assignee, Assignor is to assign all of its right,
title and interest in the Lease and any amendments, extensions and
modifications thereof to Assignee, and Assignee is to assume
performance of the Lease.
D. Landlord has agreed to consent to
the assignment of the Lease from Assignor to Assignee on the
conditions set forth in this Assignment.
NOW, THEREFORE, FOR VALUABLE
CONSIDERATION the receipt of which is hereby acknowledged it is
agreed as follows:
1. Assignment : As of the
Effective Time, Assignor, hereby assigns and transfers to Assignee
all of Assignor’s right, title, and interest in and to the
Lease.
2. Assumption : Assignee
hereby accepts the assignment and, as of the Effective Time,
assumes and agrees to be bound by and perform all of the terms and
conditions of the Lease.
3. Effective Time of
Assignment : The “Effective Time” of this
Assignment shall be the “Effective Time” as defined in
Section 2.2 of the Merger Agreement. Assignor shall advise Landlord
in writing of the Effective Time when it is determined.
4. Landlord’s Consent :
Without waiving any restriction concerning further assignment
and/or sublease contained in the Lease, Landlord hereby consent to
this Assignment.
5. Notice : Any notice,
demand, request, consent, approval or communication Landlord or
Assignee desires or is required to give to the other or any other
person shall be in writing and either served personally or sent by
prepaid, first-class mail to the following address:
If to Assignee:
Community National Bank
Michael J. Perdue
President
900 Canterbury Place, Suite
300
Escondido, CA 92025
If to Landlord:
Mary and Dari Garmo
1480 Hidden Mesa Trail
El Cajon, CA 92019
Any party may change its address by
notifying the other party of the change of address. Notice shall be
deemed communicated within 48 hours from the date of mailing if
mailed as provided in this paragraph.
6. Counterparts : This
Assignment may be executed in multiple counterparts, each of which
shall be deemed an original, and all of which together shall
constitute one and the same instrument. Execution and delivery of
this Assignment by exchange of facsimile copies bearing facsimile
signatures of a Party shall constitute a valid and binding
execution and delivery of this Assignment. Such facsimile copies
shall constitute enforceable original documents.
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LANDLORD:
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ASSIGNOR:
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MARY AND DARI GARMO
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CUYAMACA BANK
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Date
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Date
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By:
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By:
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/s/ B
RUCE I VES
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Its:
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Its:
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President & CEO
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ASSIGNEE:
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COMMUNITY NATIONAL BANK
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/s/ M ICHAEL J.
P ERDUE
8/6/04
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Date
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By:
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Michael J. Perdue
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Its:
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President & CEO
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GROUND LEASE
PREAMBLE
This ground lease is made on August
1, 1988 between Mast/Mission Gorge Development Ltd., a California
Limited Partnership, hereafter “Lessor” and Cuyamaca
Bank, a State Banking Corporation, hereafter referred to as
“Lessee.”
Lessor leases to Lessee and Lessee
hires from Lessor land in the County of San Diego, City Santee,
State of California, more particularly described in Exhibit
“A” attached hereto and made a part hereof.
ARTICLE 1
TERM
1.01. Initial Term . The term
of the lease shall commence on July 1, 1988, and shall continue for
a period of 30 years.
1.02. Option to Renew .
Lessee shall have the option to renew this lease, provided they are
not in default under the terms of the lease and have paid the rent
on a timely basis, for three (3) six (6) year terms upon written
notice to Lessor ninety (90) days prior to the completion of the
then existing lease term.
ARTICLE 2
RENT
2.01. Basic Rent . Lessee
agrees to pay to Lessor in equal monthly installments on the first
day of each month beginning July 1, 1988, the sum of $39,600.00 per
year.
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2.02. Rental Adjustment . The
annual basic guaranteed rental described in Section 2.01 shall be
adjusted upward on the third anniversary of the commencement date
of this lease and on the third anniversary of that date thereafter
including option terms, herein called the “adjustment
dates,” according to the following computation:
The base for computing the
adjustment is the Consumer Price Index, All Urban Consumers, for
the County of San Diego, California, published by the United States
Department of Labor, Bureau of Labor Statistics
(“Index”), which is in effect on the date upon which
the term of this Lease commences (“Beginning Index”).
The Index published most immediately preceding the adjustment date
(“Extension Index”) is to be used in determining the
amount of the adjustment. If the Extension Index has increased over
the Beginning Index, the minimum monthly rent for the following two
years shall be set by multiplying the rent then in effect by a
fraction, the numerator of which is the Extension Index and the
denominator of which is the Beginning Index. In no case shall the
minimum monthly rent be less than $3,300.00 per month. On
adjustment of the minimum monthly rent as provided in this Lease,
the parties shall immediately execute an amendment to this Lease
stating the new minimum monthly rent.
If the Index is changed so that the
base year differs from that in effect on the date upon which their
term of this Lease commences, the Index shall be converted in
accordance with the conversion factor published by the United
States Department of
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Labor, Bureau of Labor Statistics. If the Index
is discontinued or revised during the term, such other government
index or computation with which it is replaced shall be used in
order to obtain substantially the same result as would be obtained
if the Index had not been discontinued or revised.
The new basic rent shall be for the
period beginning on the adjustment date and continuing until the
next adjustment date. In no event shall the rent be less than the
rent charged for the period prior to the adjustment
rate.
2.03. Place of Rent . All
rent that becomes due and payable under this lease shall be paid to
Lessor at the office of Lessor at 3675 Ruffin Road, Suite 110, San
Diego, California 92123, or such other place or places as Lessor
may from time to time designate by written notice given to
Lessee.
ARTICLE 3
USE OF PREMISES
3.01. Principal Use . The
said premises may, during the term of this lease, be used by Lessee
for any lawful purpose; provided, however, that it is expressly
understood and agreed that Lessee is leasing said premises as
vacant and unimproved land with the express intention of developing
said premises, either alone or in conjunction with adjoining lands
that may now or hereafter be acquired by Lessee either in fee or in
leasehold estate by constructing, maintaining and operating thereon
a commercial building.
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3.02. Only Lawful Uses
Permitted . Lessee shall not use or permit said premises or any
portion of said premises to be improved, developed, used, or
occupied in any manner or for any purpose that is in any way in
violation of any valid law, ordinance, or regulation of any
federal, state, county, or local governmental agency, body, or
entity. Furthermore, Lessee shall not maintain, commit, or permit
the maintenance or commission of any nuisance as now or hereafter
defined by any statutory or decisional law applicable to said
premises on said premises or any part of said premises.
3.03. Oil, Gas and Mineral
Rights . All oil, gas and mineral rights are expressly reserved
from this lease.
ARTICLE 4
TAXES AND
UTILITIES
4.01. Lessee to Pay Taxes .
In addition to the rents required to be paid under this lease,
Lessee shall pay, and Lessee hereby agrees to pay, any and all
taxes, assessments, and other charges of any description levied or
assessed during the term of this lease by any governmental agency
or entity on or against said premises, any portion of said
premises, any interest in said premises, or any improvements or
other property in or on said premises.
4.02. First and Last Years .
Notwithstanding the provisions of Section 4.01 of this lease, all
taxes or assessments levied or assessed on or against said premises
during the tax years in which the term of this lease is to commence
and the term of this lease is to end shall be prorated between
Lessor and Lessee as of 12:01 A.M.
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on the date the term of this lease is to
commence and on the date the term of this lease is to end
respectively on the basis of tax years that commence on July 1 and
end on June 30 of each year. Lessor shall pay the taxes for the
year in which this lease is to commence and Lessee shall promptly,
on service of written request by Lessor, reimburse Lessor for
Lessee’s share of such taxes. Lessee shall pay the taxes for
the year in which this lease is to end; and Lessor shall promptly,
on service of written request by Lessee, reimburse Lessee for his
share of such taxes.
4.03. Separate Assessment of
Leased Land . Should said premises be assessed and taxed with
or as part of other property owned by Lessor prior to commencement
of the term of this lease, Lessor agrees to arrange with the taxing
authorities to thereafter have said premises taxed and assessed as
a separate parcel distinct from any other real or personal property
owned by Lessor. Should said premises be assessed and taxed for the
year in which this lease is to commence with or as part of other
property owned by Lessor, for purposes of determining pursuant to
Section 4.02 of this lease the share of such taxes for which Lessee
is liable, that portion of such taxes that bears the same ratio to
the total of such taxes as the ground area of said premises bears
to the ground area of the total taxes property shall be the taxes
levied on and assessed against said premises.
4.04. Proof of Compliance .
Lessee shall furnish at least 10 days before the date when any tax,
assessment, or charge would become delinquent, receipts or other
appropriate evidence
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establishing their payment. Lessee may comply
with this requirement by retaining a tax service to notify Lessor
whether the taxes have been paid.
4.05. Taxes Payable in
Installments . Should any special tax or assessment be levied
on or assessed against said premises that may be either paid in
full prior to a delinquency date within the term of this lease or
paid in installments over a period either within or extending
beyond this lease, Lessee shall have the option of paying such
special tax or assessment in installments. The fact the exercise of
the option to pay the tax or assessment in installments will cause
said premises to be encumbered with bonds or will cause interest to
accrue on the tax or assessment is immaterial and shall not
interfere with the free exercise of the option by Lessee. Should
Lessee exercise the option to pay any such tax or assessment in
installments, Lessee shall be liable to pay only those installments
becoming due during the term of this lease. Lessor shall cooperate
with Lessee and on written request of Lessee execute or join with
Lessee in executing any instruments required to permit any such
special tax or assessment to be paid in installments.
4.06. Contest of Tax . Lessee
shall have the right to contest, oppose, or object to the amount or
validity of any tax, assessment, or other charge levied on or
assessed against said premises or any part of said premises;
provided, however, that the contest, opposition, or objection must
be filed before the tax, assessment, or other charge at which it is
directed becomes
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delinquent and written notice of the contest,
opposition, or objection must be given to Lessor at least 10 days
before the date the tax, assessment, or other charge becomes
delinquent. Lessor shall, on written request of Lessee, join in any
such contest, opposition, or objection if Lessee determines such
joinder is necessary or convenient for the proper prosecution of
the proceedings but Lessor shall not be liable for any costs or
expenses incurred or awarded in the proceeding. Furthermore, no
such contest, opposition, or objection shall be continued or
maintained after the date the tax, assessment, or other charge at
which it is directed becomes delinquent unless Lessee has
either:
(1) Paid such tax, assessment, or
other charge under protest prior to its becoming delinquent;
or
(2) Obtained and maintained a stay
of all proceedings for enforcement and collection of the tax,
assessment, or other charge by posting such bond or other matter
required by law for such a stay; or
(3) Delivered to Lessor a good and
sufficient undertaking in an amount specified by Lessor and issued
by a bonding corporation authorized to issue undertakings in
California conditioned on the payment by Lessee of the tax,
assessment, or charge together with any fines, interest, penalties,
costs, and expenses that may have accrued or been imposed thereon
within 30 days after final determination of Lessee’s contest,
opposition or objection to such tax, assessment, or other
charge.
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4.07. Tax Returns and
Statements . Lessee shall, as between Lessor and Lessee, have
the duty of attending to, preparing, making, and filing any
statement, return, report, or other instrument required or
permitted by law in connection with the determination,
equalization, reduction, or payment of any taxes, assessments, or
other charges that are or may be levied on or assessed against said
premises, any portion of said premises, any interest in said
premises, or any improvements or other property on said
premises.
4.08. Tax Hold-Harmless
Clause . Lessee shall indemnify and hold Lessor and the
property of Lessor, including said premises and any improvements
now or hereafter on said premises, free and harmless from any
liability, loss, or damage resulting from any taxes, assessments,
or other charges required by this Article to be paid by Lessee and
from all interests, penalties, and other sums imposed thereon and
from any sales or other proceedings to enforce collection of any
such taxes, assessments, or other charges.
4.09. Utilities . Lessee
shall pay or cause to be paid, and hold Lessor and the property of
Lessor including said premises free and harmless from, all charges
for the furnishings of gas, water, electricity, telephone service,
and other public utilities to said premises during the term of this
lease and for the removal of garbage and rubbish from said premises
during the term of this lease.
4.10. Payment by Lessor .
Should Lessee fail to pay within the time specified in this Article
any taxes, assessment, or other
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charges required by this Article to be paid by
Lessee, Lessor may, without notice to or demand on Lessee, pay,
discharge, or adjust such tax, assessment, or other charge for the
benefit of Lessee. In such event, Lessee shall promptly on written
demand of Lessor reimburse Lessor for the full amount paid by
Lessor in paying, discharging, or adjusting such tax, assessment,
or other charge together with interest thereon at the maximum rate
allowed under Article 15, Section 1 of the California Constitution,
or its subsequent amendment, from the date of payment by Lessor
until the date of repayment by Lessee. Where no time within which
any charge required by this Article to be paid by Lessee is
specified in this Article, such charge must be paid by Lessee
before it becomes delinquent.
ARTICLE 5
IMPROVEMENTS
5.01. Construction . Lessee
shall, at Lessee’s sole cost and expense construct or cause
to be constructed on said premises a commercial development, herein
called “said building project” in the manner and in
accordance to the terms and conditions specified in this
Article.
5.02. Lessor’s Approval of
Plans Required . No structure or other improvement of any kind
shall be erected or maintained on said premises unless and until
the plans, specifications, and proposed location of such structure
or improvement have been approved in writing by Lessor. No
structure or other improvement shall be erected or maintained on
said premises that does not
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comply with plans, specifications, and locations
and approved in writing by Lessor. Furthermore, no material
additional to or structural alteration of any structure or
improvement now or hereafter on said premises shall be commenced
until and unless plans and specifications for such addition or
alteration shall be approved in writing by Lessor.
5.03. Preparation and Submission
of Plans . Lessee shall, at Lessee’s own cost and
expense, engage a licensed architect or engineer to prepare plans
and specifications for said building project and shall submit to
Lessor for approval:
(1) Within 180 days after execution
of this lease two copies of:
(a) drawings and materials in the
form of plans, elevations, sections and rendered perspectives
sufficient to convey the architectural design of said building
project to Lessor; and
(b) a Statement of Probable
Construction Costs of said building prepared by the engaged
architect or engineer.
(2) Within 30 days after approval by
Lessor of the items specified in subparagraph (1) of this section
and the obtaining by Lessee of any variance permits, use permits,
or rezoning required for said building project, two copies
of:
(a) detailed working drawings,
plans, and specifications for said building project; and
(b) a revised Statement of Probable
Construction Costs of said building project prepared by the engaged
architect or engineer.
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5.04. Lessor’s Approval of
Plans . Within 30 days after receipt by Lessor of any of the
documents submitted to Lessor for approval pursuant to Section 5.03
of this lease, Lessor shall either approve such documents by
endorsing Lessor’s approval on each such document and
returning one set of the documents to Lessee, or Lessor shall give
written notice to Lessee of any objections Lessor may have to such
documents. Lessor’s failure to give written notice to Lessee
within such 30 day period of any objections Lessor may have to the
documents shall constitute approval of the documents by Lessor.
Within 30 days after service on Lessee of the written notice of
Lessor’s objections, Lessee may deliver corrective amendments
to the documents to Lessor and Lessor shall within 30 days after
receiving the corrective amendments serve written notice on Lessee
of Lessor’s approval or rejection of the documents as so
amended. Failure of Lessor to serve written notice on Lessee within
such 30 day period after receipt of the corrective amendments shall
constitute approval by Lessor of the documents so
amended.
5.05. Change in Plans . After
approval by Lessor of the documents pertaining to said building
project mentioned in sub- paragraph (2) of Section 5.03 of this
lease, any substantial changes in the plans or specifications for
said building project must be approved by Lessor. Lessor’s
failure to give written notice to Lessee of any objections by
Lessor may have to any proposed changes within 15 days after a
written statement of the proposed changes has been given to Lessor
by Lessee shall
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constitute Lessor’s approval of the
changes. Minor changes in work or materials not affecting the
general character of said building project need not be approved by
Lessor but a copy of the altered plans and specifications
reflecting such changes must be given to Lessor.
5.06. No Construction Before
Notice . No work of any kind shall be commenced on and no
building or other materials shall be delivered for said building
project, nor shall any other building or land development work be
commenced or building materials be delivered on said premises until
at least 10 days after written notice has been given by Lessee to
Lessor of the commencement of such work or the delivery of such
materials. Lessor shall, at any and all times during the term of
this lease, have the right to post and maintain on said premises
and to record as required by law any notice or notices of
nonresponsibility provided for by the mechanic’s lien laws of
the State of California. The work prohibited by this section until
10 days’ written notice thereof has been given to Lessor
includes as well as actual construction work any site preparation
work, installation of utilities, street construction or improvement
work, or any grading or filling of said premises.
5.07. Written Contracts . All
work required in the construction of said building project,
including any site preparation work, landscaping work, utility
installation work as well as actual construction work on said
building project, shall be performed only by competent contractors
duly licensed as such under
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the laws of the State of California and shall be
performed pursuant to written contracts with such contractors. Each
such contract shall provide that the final payment under the
contract due to the contractor shall be in an amount equalling at
least 10 percent of the full amount payable under the contract and
shall not be paid to contractor until, whichever last occurs,
either:
(1) The expiration of 60 days from
the date of recording by Lessee as owner of a Notice of Completion
of said building project, Lessee agreeing to record such Notice of
Completion promptly within the time specified by law for the
recording of such notice; or
(2) The settlement and discharge of
all liens of record claimed by persons who supplied either labor or
materials for the construction of said building project.
5.08. Compliance with Law .
Said building project shall be constructed, and all work performed
on said premises an all buildings or other improvements erected on
said premises shall be in accordance with all valid laws,
ordinances, regulations, and orders of all federal, state, county,
or local governmental agencies or entities having jurisdiction over
said premises; provided, however, that any structure or other
improvement erected on said premises, including said building
project, shall be deemed to have been constructed in full
compliance with all such valid laws, ordinances, regulation, and
orders when a valid final Certificate of Occupancy entitling Lessee
and tenants of Lessee to occupy and use of the structure or other
improvement has been duly
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issued by proper governmental agencies or
entities. All work performed on said premises pursuant to this
lease, or authorized by this lease, shall be done in a good
workmanlike manner and only with new materials of good quality and
high standard.
5.09. Time for Completion .
Lessee shall cause construction of said building project to be
commenced no later than 90 days after approval by Lessor of the
documents described in subparagraph (2) of Section 5.03 of this
lease and the obtaining of necessary financing, shall cause
construction of said project to thereafter be diligently pursued
without unnecessary interruption, and shall cause said building
project to be completed not later than 365 days after commencement
of its construction. Should Lessee fail to commence or complete
construction of said building project within the times specified in
this section, Lessor may, by giving 60 days’ written notice
to Lessee, terminate this lease or charge $750.00 per day for each
day of delay as additional rent under this lease; provided,
however, that Lessee shall be excused for any delays in
construction or commencement of construction caused by the act of
Lessor, the act of any agent of Lessor, the act of any governmental
authority, inability to procure materials, acts of God, the
elements, war, war defense conditions, litigation, strikes,
walkouts, or other causes beyond Lessee’s control. Lessee
shall, however, use reasonable diligence to avoid any such delay
and to resume construction as promptly as possible after the
delay.
5.10. Mechanic’s Lien .
At all times during the term of this lease, Lessee shall keep said
premises and all building and
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improvements now or hereafter located on said
premises free and clear of all liens and claims of liens for labor,
services, materials, supplies, or equipment performed on or
furnished to said premises. Should Lessee fail to pay and discharge
or cause said premises to be released from any such lien or claim
of lien within 20 days after service on Lessee of written request
from Lessor to do so, Lessor may pay, adjust, compromise, and
discharge any such lien or claim of lien on such terms and manner
as Lessor may deem appropriate. In such event, Lessee shall, on or
before the first day of the next calendar month following any such
payment by Lessor, reimburse Lessor for the full amount paid by
Lessor in paying, adjusting, compromising, and discharging such
lien or claim of lien, including any attorney’s fees or other
costs expended by Lessor, together with interest at the maximum
rate allowed under California law from the date of payment by
Lessor to the date of repayment by Lessee.
5.11. Zoning and Use Permits
. Should Lessee deem it necessary or appropriate to obtain any use
permit variance, or rezoning of said premises in order to construct
or operate said building project, Lessor agrees to execute such
documents, petitions, applications, and authorizations as may be
necessary or appropriate in obtaining the same and hereby appoints
Lessee his attorney in fact to execute in the name and on behalf of
Lessor any such documents, petitions, applications, or
authorizations; provided, however, that any such permits,
variances, or rezoning shall be obtained at the sole cost and
expense of Lessee and Lessee
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agrees to protect and save Lessor and the
property of Lessor, including said premises, free and harmless from
any such cost and expense.
5.12. Ownership of Building
Project . Any and all buildings and improvements placed or
erected on said premises as part of said building project as well
as any and all other alterations, additions, improvements, and
fixtures, except furniture and trade fixtures, made or placed in or
on said premises by Lessee or any other person shall be considered
part of the real property of said premises and upon expiration or
sooner termination of this lease shall be deemed to remain on
premises and become the property of Lessor.
ARTICLE 6
ENCUMBRANCE OF
LEASEHOLD
6.01. Lessee’s Right to
Mortgage Leasehold . Lessee shall have the right at any time
and from time to time to subject the leasehold estate to one
mortgage as security for a loan or loans or other obligations of
Lessee and the right to roll over said mortgages provided
that:
(1) The mortgage and all rights
acquired under it shall be subject to each and all the covenants,
conditions, and restrictions stated in this lease and to all rights
and interests of Lessor except as otherwise provided in this
lease.
(2) Lessee shall give Lessor prior
notice of any such mortgage, and shall accompany the notice with a
true copy of the note and mortgage.
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6.02. The note and mortgage shall
conform substantially to the usual provisions in the
mortgagee’s loan documents for comparable projects unless
specifically provided otherwise in this agreement. Mortgagee may
take an assignment in lieu of foreclosure whether or not permitted
by the note of mortgagee.
6.03. Request for Notice of Loan
Default . Immediately after the recording of any deed of trust
or mortgage executed by Lessee pursuant to Section 6.01 of this
lease and containing a power of sale as defined by California law,
Lessee shall at Lessee’s own cost and expense record in the
office of the County Recorder of San Diego County, California, a
written request executed and acknowledged by Lessor for a copy of
any notice of default and a copy of any notice of sale under such
deed of trust or mortgage to be mailed to Lessor at the address
specified in the request by Lessor.
6.04. Notice to and Service on
Lender . Lessor shall mail to Lender, should Lessee incur any
encumbrance pursuant to Section 6.01 of this lease, a duplicate
copy of any and all notices Lessor may from time to time give to or
serve on Lessee pursuant to or relating to this lease. Lessee shall
at all times keep Lessor informed in writing of the name and
mailing address of Lender and any changes in Lender’s mailing
address. Any notices or other communications permitted by this or
any other section of this lease or by law to be served on or given
to Lender by Lessor shall be deemed duly served on or given to
Lender when deposited in the United States mail, first-class
postage prepaid, addressed to
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Lender at the last mailing address for Lender
furnished in writing to Lessor by Lessee or Lender.
6.05. No Modification Without
Lender’s Consent . Should Lessee incur any encumbrance
pursuant to Section 6.01 of this lease, Lessee and Lessor hereby
expressly stipulate and agree that they will not modify this lease
in any way nor cancel this lease by mutual agreement without the
written consent of Lender having such encumbrance.
6.06. Rights of Lender .
Should Lessee incur any encumbrance pursuant to Section 6.01 of
this lease, the Lender having such encumbrance shall have the right
at any time during the term of this lease and the existence of his
encumbrance to:
(1) Do any act or thing required of
Lessee under this lease, and any such act or thing done and
performed by Lender shall be as effective to prevent a forfeiture
of Lessee’s rights under this lease as if done by Lessee
himself;
(2) Realize on the security afforded
by the leasehold estate by exercising foreclosure proceedings or
power of sale or other remedy afforded in law or in equity or by
the security document, herein called the “Trust Deed,”
and to:
(a) Transfer, convey, or assign the
title of Lessee to the leasehold estate created by this lease to
any purchaser at any foreclosure sale, whether the foreclosure sale
be conducted pursuant to court order or pursuant to a power of sale
contained in the Trust Deed; and
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(b) Acquire and succeed to the
interest of Lessee under this lease by virtue of any foreclosure
sale, whether the foreclosure sale be conducted pursuant to a court
order or pursuant to a power of sale contained in the Trust
Deed.
6.07. Rights of Lender to Cure
Defaults . Should Lessee incur an encumbrance pursuant to
Section 6.01 of this lease, before Lessor may terminate this lease
because of any default under or breach of this lease by Lessee,
Lessor must give written notice of the default or breach to Lender
and afford Lender the opportunity after service of the notice
to:
(1) Cure the breach or default
within 30 days where the default can be cured by the payment of
money to Lessor or some other person;
(2) Cure the breach or default
within 30 days where the breach or default must be cured by
something other than the payment of money and can be cured within
that time; or
(3) Cure the breach or default in
such reasonable time as may be required where something other than
money is required to cure the breach or default and cannot be
performed within 30 days provided that acts to cure the breach or
default are commenced within that time period after service of
notice of default on Lender by Lessor and are thereafter diligently
continued by Lender.
6.08. Foreclosure .
Notwithstanding any other provision of this lease, a Lender under
an encumbrance incurred by Lessee pursuant to Section 6.01 of this
lease may forestall termination of
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this lease by Lessee by commencing proceedings
to foreclose his encumbrance on the leasehold estate created by
this lease. The proceedings so commenced may be for foreclosure of
the encumbrance by order of court or for foreclosure of the
encumbrance under a power of sale contained in the instrument
creating the encumbrance. The proceedings shall not, however,
forestall termination of this lease by Lessor for the default or
breach by Lessee unless:
(1) They are commenced within 30
days after service on Lender of the notice described in Section
6.10 of this lease;
(2) They are, after having been
commenced, diligently pursued in the manner required by law to
completion; and
(3) Lender keeps and performs all of
the terms, covenants, and conditions of this lease requiring the
payment or expenditure of money by Lessee until the foreclosure
proceedings are complete or are discharged by redemption,
satisfaction, payment, or conveyance of the leasehold estate to
Lender.
6.09. Foreclosure - Assignment
Without Consent . Provided that Lender under any encumbrance
incurred by Lessee pursuant to Section 6.01 of this lease gives
written notice of transfer to Lessor setting forth the name and
address of the transferee as well as the effective date of the
transfer, the written consent of
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Lessor shall not be required for transfer of
Lessee’s interest under this lease to:
(1) A purchaser at a foreclosure
sale of the encumbrance whether the foreclosure sale be conducted
pursuant to court order or pursuant to a power of sale in the
instrument creating the encumbrance; or
(2) A purchaser from Lender after
foreclosure where Lender was the purchaser of Lessee’s
interest at the foreclosure sale of the encumbrance and Lender is
an established bank, savings and loan association, or insurance
company.
6.10. New Lease with Lender .
Notwithstanding any other provision of this lease, should this
lease terminate because of the insolvency or bankruptcy of Lessee
or because of any default under or breach of this lease by Lessee,
Lessor will execute a new lease for said premises to the Lender
under an encumbrance incurred by Lessee pursuant to Section 6.01 of
this lease as Lessee, provided:
(1) A written request for the new
lease is served on Lessor by Lender within 30 days after service on
Lender of the notice described in Section 6.10 of this
lease.
(2) The new lease is for a term
ending on the same date the term of this lease would have ended had
not this lease been terminated, provides for the payment of rent at
the same rate that would have been payable under this lease during
the remaining term of this lease had this lease not been
terminated, and contains the same terms, covenants,
conditions,
