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OFFICE LEASE (Building B)

THIS OFFICE LEASE (“Lease”) is made as of ___________________________ (the

“Execution Date”), between Madera H&HS 2 LLC, a California limited liability company (“Landlord”) and County of Madera, a California political subdivision (“Tenant”).

IT IS AGREED AS FOLLOWS:

Section 1. Lease of Premises. Landlord leases to Tenant on behalf of the Public Health Department the Real Property described on Exhibit A. The Real Property will be improved with the Improvements to be constructed by Landlord, subject to the limitation set forth in the introductory paragraph of the Work Letter attached as Exhibit B. The Improvements are described in the Work Letter and in the Agreement for Outside City Limits Water and Sewer Connections (the “Site Improvement Agreement”) attached as Exhibit D. The Real Property and the Improvements are collectively referred to as the “Premises”.

Section 2. Term.

a. Commencement of Landlord Covenants. The rights of Tenant to enforce the obligations of Landlord under this Lease, including the remedies specified therein, and any rights of Purchase Option specified in this Lease (if any) shall commence on the Execution Date. Notwithstanding such commencement, the obligations of Tenant to pay Rent or to perform any of the covenants of Tenant under this Lease shall not commence until the Lease Commencement Date described below.

b. Lease Commencement Date. The Lease Commencement Date will commence on the date that is eighteen (18) months following the date of recordation of Landlord’s Financing as described in Section 30 or sooner upon substantial completion of the Premises (the “Lease Commencement Date”); provided that anything set forth in this Lease or in any other document or under applicable law or elsewhere to the contrary notwithstanding, the obligation of Tenant to commence and continue to pay Rent as set forth in Section 5 of this Lease, shall commence on the Lease Commencement Date.

Landlord agrees to provide Tenant with two (2) copies of an as-built survey of the Premises within sixty (60) days after substantial completion of the Premises (“As-Built Survey”). The As-Built Survey shall include, without limitation, as-built drawings, a metes and bounds legal description, all easements, utilities, public and private right-of-ways, warranties, and operation and maintenance manuals. In the event Landlord fails to provide Tenant with the copies of the As-Built Survey as provided above, Tenant, after notice to Landlord, may have an As-Built Survey prepared and offset the cost of such survey and the two (2) copies of the As-Built Survey against Rent due or becoming due under this Lease.

i. Lease Commencement Date Memorandum. On the Lease Commencement Date, Tenant will execute and deliver to Landlord a memorandum of the Lease Commencement Date (“Lease Commencement Date Memorandum”). The Lease Commencement Date Memorandum must acknowledge the Lease Commencement Date.

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c. Premises Completion Date. The Premises shall be deemed fully complete and available for occupancy by Tenant when all of the following have been accomplished:

i. A Certificate of Occupancy or equivalent use permit issued by and obtained from the governmental authority having jurisdiction (if Tenant is the responsible agency for the issuance of the Certificate of Occupancy of use permit, Tenant will timely issue such certificates and permits and will not unreasonably withhold or delay the issuance thereof);

ii. Landlord has tendered possession of the Premises to Tenant;

iii. All mechanical systems serving the Premises have been completed in a timely and reasonable manner and are certified as being in good working condition by the Commissioning Agent engaged by Tenant pursuant to the terms of the Work Letter;

iv. The Premises are free and clear of all liens except Landlord’s Financing (defined below).

v. The Lease Commencement Date may not be the same date as the Premises Completion Date; all Rent and other charges shall commence on the Lease Commencement Date and not the Premises Completion Date if such dates are not the same.

d. Duration of Lease Term. The Lease Term begins on the Lease Commencement Date and shall end 360 full calendar months after the Lease Commencement Date (the “Expiration Date”) subject to the “Early Termination Rights” specified below.

e. Early Entry. With Landlord’s prior consent which may be withheld in Landlord’s sole discretion, Tenant may, at Tenant’s own risk, enter the Improvements prior to the date that the Improvements are Ready for Occupancy. The entry may be made solely to install trade fixtures and equipment and shall be subject to the following terms and conditions:

i. Tenant’s early entry may not interfere with the construction of any Improvements or cause labor difficulties;

ii. Tenant’s early entry must be on all the terms and conditions of this Lease, other than the obligation to pay Base Rent;

iii. Tenant must provide evidence of liability insurance required by the terms of this Lease;

iv. Tenant must indemnify, defend, and hold harmless Landlord and Landlord’s agents, employees, and contractors against all claims, liability, and damages arising from the early entry (other than matters arising from Landlord’s willful misconduct);

v. Tenant’s early entry does not constitute the commencement of the Lease;

vi. Tenant must pay utility charges reasonably allocated by Landlord that arise due to the activities of Tenant; and

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vii. Tenant will comply with all reasonable entry, access, construction and staging rules and restrictions imposed by Landlord.

Section 3. Early Termination Rights Due To Non Appropriations. Notwithstanding anything contained in this Lease to the contrary, Tenant shall not be deemed in default in the event no funds, or insufficient funds, are appropriated in the Budget of Madera County, or otherwise unavailable in any fiscal year of Madera County for rental payments due on this Lease. Tenant will notify the Landlord of such occurrence and this Lease will create no further obligation of Tenant to such current or succeeding fiscal year and shall be null and void, except as to the portions of rental payments herein agreed upon for which funds shall have been appropriated and budgeted. In such event, this Lease shall terminate on the last day of the fiscal year for which appropriations were received without penalty or expense to Tenant of any kind whatsoever (the “Early Termination Rights”). Subsequent to the termination of this Lease, Tenant shall have no further obligations to make rental payments under this Lease. No right of action or damages shall accrue to the benefit of Landlord as to that portion of this Lease which may so terminate. In the event of such termination, Tenant agrees to peaceably surrender possession of the Premises to Landlord on the date of such termination. Landlord shall have all legal and equitable rights and remedies to take possession of the Premises.

Section 4. Covenant to Request Appropriations.

a. During the term of the Lease, the Tenant covenants and agrees (i) to include in its annual tentative budget prepared by the appropriate officials acting on behalf of the Tenant in accordance with applicable law an item for expenditure of an amount necessary (after taking into account any moneys then legally available for such purpose) to pay the rentals and additional charges for the Premises during the next succeeding fiscal year of Tenant, and (ii) to take such further action (or cause the same to be taken) as may be necessary or desirable to assure that the final budget submitted to the governing body of the Tenant for its consideration seeks an appropriation of monies sufficient to pay such rentals and other charges for each such fiscal year of Tenant.

b. To effect the covenants set forth above, the Tenant hereby directs its “budget officer”, or any other officer at the time charged with the responsibility of formulating budget proposals, to include in the tentative budget prepared annually by such budget officer or other officer and submitted to the governing body of the Tenant, in any year in which the Lease is in effect, items for all payments required for the next fiscal year of Tenant under the Lease. It is hereby expressed as the intention of the Tenant that the decision to continue the term of the Lease is to be made solely by the governing body of the Tenant at the time it considers for adoption the final budget for each of its fiscal years and corresponding lease year under the Lease, and not by any official of the Tenant, acting in his or her individual capacity as such. In this connection, the Tenant hereby covenants and agrees that such budget officer or other officer shall not amend, modify or otherwise change the appropriations made in any finally adopted budget for the payment of any rentals without the express prior approval of the governing body of the Tenant.

Section 5. Rent. Beginning on the Lease Commencement Date, Tenant will pay to Landlord, at any address that Landlord may designate in writing to Tenant, the Rent, in the

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amount of Eighty-Eight Thousand Two Hundred and No/100 Dollars ($88,200.00) (“Base Rent”) per month which is based on Two and 25/100 Dollars ($2.25) per month, per net rentable square foot of the Premises (which is initially agreed to be 39,200 net rentable square feet), triple net. The Base Rent must be paid, without the need for notice, demand, offset, or deduction, on the 1st day of each calendar month. If the Term commences or ends on a date other than the first or last day of a month, Tenant must pay on the Commencement Date or the first day of the last month a Base Rent prorated on a per diem basis with respect to the portion of the month within the Term. All sums other than Base Rent that Tenant is obligated to pay under this Lease will be deemed to be additional rent due, regardless of whether those sums are designated as “additional rent.” The term “Rent” means the Base Rent and all additional rent payable under this Lease.

Section 6. Taxes and Assessments. As additional rent, Tenant shall pay to Landlord all Real Property Taxes assessed during the term, if any. “Real Property Taxes” shall mean all real property taxes and assessments levied and assessed during the term against the Real Property and Improvements. Landlord shall pay all such Real Property Taxes timely and when due. Notwithstanding anything to the contrary stated herein, Real Property Taxes shall not include any portion of any municipal, county, state, or federal income or franchise taxes payable by Landlord, or any municipal, county, state, or federal estate, succession, inheritance, or transfer taxes or capital levy payable by Landlord. If at any time during the term of the Lease the State of California or any political subdivision of the State, including any county, city and county, public corporation, district, or any other political entity or public corporation of the state, levies or assesses against Landlord a tax, fee, or excise on rents, on the square footage of the Premises, on the act of entering into this Lease, or on the occupancy of Tenant, such tax, fee, or excise on rents shall be included in Real Property Taxes.

Tenant shall cause Tenant’s trade fixtures, equipment, furnishings, furniture, merchandise, inventory, machinery, appliances and other personal property installed or located on or about the Premises (collectively, the “personal property”) to be assessed and billed separately from the Premises. Tenant shall pay before delinquency any and all taxes, assessments and public charges levied, assessed or imposed upon or against Tenant’s personal property. If any of Tenant’s personal property shall be assessed with the real property comprising the Premises, Tenant shall pay to Landlord, as additional rent, the amounts attributable to Tenant’s personal property within thirty (30) days after receipt of a written statement from Landlord setting forth the amount of such taxes, assessments and public charges attributable to Tenant’s personal property. Tenant shall comply with the provisions of any law that requires Tenant to file a report of Tenant’s personal property located on the Premises.

Section 7. Utilities. Harris Construction Co., Inc., a California corporation (“HCCI”) is obligated under the Construction Contract with Landlord to provide connections for utilities in accordance with the Work Letter, including paying all impact or connection fees required by utility providers. Tenant will make all arrangements and pay all charges for water, sewer, telephone, gas, electricity, and other utilities supplied to or used on the Premises. This includes, without limitation, paying any deposits required by utility providers to establish a new customer utility account. Subject to Landlord’s Warranty Obligation in Section 12, Landlord will not be liable to Tenant for any interruption in or curtailment of any utility service, nor will any interruption or curtailment constitute constructive eviction or grounds for abatement of rent.

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Section 8. Use. Tenant may use the Premises for general governmental offices,

public conference space, and related amenities and for no other purpose without Landlord’s prior consent. Tenant shall comply with all laws, rules and regulations, ordinance or other requirement of any governmental or quasi-governmental authority now in force or which may hereinafter be in force and all recorded documents affecting the Premises, concerning the Premises or Tenant’s use of the Premises, including, without limitation, the Americans with Disabilities Act and any laws regarding environmental protections and handling and release of hazardous substances.

Section 9. Hazardous Materials. Neither Tenant nor Tenant’s agents shall permit the introduction, placement, use, storage, manufacture, transportation, release or disposition (collectively, “Release”) of any Hazardous Material(s) (defined below) on or about any portion of the Premises without the prior written consent of Landlord, which consent may be withheld in the sole and absolute discretion of Landlord without any requirement of reasonableness in the exercise of that discretion so long as such discretion is consistent with applicable law. Notwithstanding the immediately preceding sentence to the contrary, Tenant shall be entitled to use quantities of the types of materials which are technically classified as Hazardous Materials but commonly used in domestic or office use, or used by the County Health Department as a part of its customary medical or health functions, to the extent not in an amount, which, either individually or cumulatively, would be a “reportable quantity” under any applicable law. Tenant covenants that, at its sole cost and expense, Tenant will comply with all applicable laws with respect to the Release by Tenant, its agents, employees, contractors or invitees of such permitted Hazardous Materials. Any Release beyond the scope allowed in this paragraph shall be subject to Landlord’s prior consent, which may be withheld in Landlord’s sole and absolute discretion so long as such discretion is consistent with applicable law, and shall require an amendment to the Lease in the event Landlord does consent which shall set forth the materials, scope of use, indemnification and any other matter required by Landlord in Landlord’s sole and absolute discretion. Tenant shall indemnify, defend and hold Landlord and Landlord’s agents harmless from and against any and all claims, losses, damages, liabilities, or expenses arising in connection with the Release of Hazardous Materials in violation of Hazardous Materials laws by Tenant, Tenant’s agents or any other person using the Premises or Building with Tenant’s knowledge and consent or authorization and the presence or existence of any Hazardous Materials in, on or under the Premises as of or prior to the Commencement Date of this Lease. Tenant’s obligation to defend, hold harmless and indemnify pursuant to this Section 9 shall survive Lease Termination.

As used in this Lease, the term “Hazardous Materials” means any chemical, substance, waste or material which has been or is hereafter determined by any federal, state or local governmental authority to be capable of posing risk of injury to health or safety including, without limitation, those substances included within the definitions of “hazardous substances,” “hazardous materials,” “toxic substances,” or “solid waste” under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, the Resource Conservation and Recovery Act of 1976, and the Hazardous Materials Transportation Act, as amended, and in the regulations promulgated pursuant to said laws; those substances defined as “hazardous wastes” in section 25117 of the California Health & Safety Code, or as “hazardous substances” in section 25316 of the California Health & Safety Code, as amended, and in the regulations

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promulgated pursuant to said laws; those substances listed in the United States Department of Transportation Table (49 CFR 172.101 and amendments thereto) or designated by the Environmental Protection Agency (or any successor agency) as hazardous substances (see, e.g., 40 CFR Part 302 and amendments thereto); such other substances, materials and wastes which are or become regulated or become classified as hazardous or toxic under any laws including, without limitation, the California Health & Safety Code, Division 20, and Title 26 of the California Code of Regulations; and any material, waste or substance which is (i) petroleum, (ii) asbestos, (iii) polychlorinated biphenyls, (iv) designated as a “hazardous substance” pursuant to section 311 of the Clean Water Act of 1977, 33 U.S.C. sections 1251 et seq. (33 U.S.C. § 1321) or listed pursuant to section 307 of the Clean Water Act of 1977 (33 U.S.C. § 1317), as amended; (v) flammable explosives; (vi) radioactive materials; (vii) radon gas; or (viii) mold.

Landlord shall have the right, upon reasonable advance notice to Tenant, to inspect,

investigate, sample and/or monitor the Premises, including any soil, water, groundwater, or other sampling, to the extent reasonably necessary to determine whether Tenant is complying with the terms of this Lease with respect to Hazardous Materials. Unless a previous inspection has disclosed a violation by Tenant of the covenants contained in this Section 9, such inspections, investigations, sampling and/or monitoring shall be performed not more often than semiannually. In connection therewith, Tenant shall provide Landlord with reasonable access to all portions of the Premises; provided, that any such inspection shall not unreasonably interfere with the operation of Tenant’s business on the Premises

Section 10. Triple Net Lease. This is a “triple net lease”. Except as expressly provided

to the contrary in this Lease, Landlord will not be required to make any expenditure, incur any obligation, or incur any liability of any kind in connection with this Lease or ownership, construction, maintenance, operation, or repair of Premises

Section 11. Alterations.

a. Tenant shall not make any alterations to the Premises without Landlord’s consent which consent shall not be unreasonably withheld, and shall be granted or denied in writing within ten (10) days following Tenant’s notice of its intended commencement of alterations. Notwithstanding the above, Tenant may, without Landlord’s consent, make any non-structural alterations at an aggregate cost of less than Twenty-Five Thousand Dollars ($25,000) (which amount shall increase annually during the Term of this Lease in an amount equal to the following index: Consumer Price Index for All Urban Consumers, Series ID: CUUR0400SA0, Not Seasonally Adjusted, West Urban, All Items, Base Period 1982-84=100, as measured by the Bureau of Labor Statistics. If this index ceases to be published, the County will select another comparable index).Any structural alterations made shall remain on and be surrendered with the Premises on expiration or termination of the term; except that Landlord can elect within thirty (30) days after expiration of the term, to require Tenant to remove any alterations that Tenant has made to the Premises whose installation was not specifically approved in writing by Landlord.

b. Tenant shall not commence any alterations to the Premises until five (5) days after Landlord has been given notice by Tenant stating that proposed date of commencement of the alterations so that Landlord can post or record an appropriate notice of non-responsibility. Tenant may select contractors of its choice for any approved alterations

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subject to Landlord’s approval of such contractor’s qualifications, such approval not to be unreasonably withheld or delayed. All persons performing work on the Premises that requires a license must hold a current valid license, unless such work is conducted by employees of Tenant.

c. Tenant shall pay all costs for construction done by it or caused to be done by it on the Premises as permitted by this Lease.

Section 12. Repairs and Maintenance.

a. Landlord’s Obligations.

i. Structural Maintenance. Subject to the terms of this Section, Landlord shall maintain the structural portions of the roof, foundation, and load-bearing portions of walls of the Improvements, excluding wall coverings, painting, glass, and doors, the costs of which will be reimbursed by Tenant within sixty (60) days of billing by Landlord as additional rent under this Lease. Landlord will not be required to make any repair pursuant to this Subsection resulting from:

(1) any alteration or modification to the Improvements or to mechanical equipment within the Improvements performed by, for, or because of Tenant or to special equipment or systems installed by, for, or because of Tenant;

(2) the installation, use, or operation of Tenant’s property, fixtures, and equipment;

(3) the moving of Tenant’s property in or out of the Improvements or in and about the Premises;

(4) Tenant’s use or occupancy of the Premises in violation of Section 8 of this Lease or in the manner not contemplated by the parties at the time of the execution of this Lease;

(5) the acts or omissions of Tenant and Tenant’s employees, agents, invitees, subtenant’s, licensees, or contractors;

(6) fire and other casualty, except as provided by Section 15 of this Lease; or

(7) condemnation, except as provided in Section 16 of this Lease.

ii. Warranty Repairs. Landlord warrants that the Premises shall be free from defects in materials or workmanship for a period of one (1) year following the Lease Commencement Date (the “Warranty Period”). Landlord shall promptly correct, at Landlord’s sole cost and expense, any such defects (a “Warranty Repair”) following written notice of a defect from the Tenant. Upon completion of the Premises as provided in this Lease, Landlord will not paint, decorate or change the architectural treatment of any part of the exterior of the Premises, nor make any structural alterations, additions or changes to the Premises without

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Tenant’s prior written approval. The Warranty referenced in this paragraph is in addition to warranties and related extended warranties provided by vendors, Landlord, or others in connection with the construction of the Premises.

iii. Notice to Repair. Landlord shall have no obligation to commence repairs under this Section until a reasonable time (not to exceed ten (10) days) after receipt of written notice from Tenant of the need for repairs.

b. Tenant’s Obligations. Except for the portions of the Premises expressly required to be maintained by Landlord under Section 12.a through Section 12.a.ii above, Tenant, at Tenant’s expense, will maintain the Premises in good order including, without limitation, subfloors and floor coverings, walls and wall coverings, mechanical, electrical, and plumbing systems, doors, windows, landscaping, and any signage. Tenant will enter into preventive maintenance and service contracts with maintenance contractors for regularly scheduled maintenance that are reasonably acceptable to Landlord for servicing all hot water, heating, and air-conditioning systems and equipment in the Premises. If Tenant fails, in the reasonable judgment of Landlord, to maintain the Premises in good order, Landlord may perform the maintenance, repairs, refurnishing, or repairing at Tenant’s expense, plus a ten percent (10%) administrative charge to Landlord, after giving Tenant sixty (60) days written notice.

Section 13. Liability Insurance and Indemnification.

a. Liability Insurance. Tenant is legally self-insured for liability and automobile coverage as allowed by Government Code section 990.4 subdivision (a). Tenant maintains excess insurance coverage through California State Association of Counties (CSAC) Excess Insurance Authority up to a total of Twenty-Five Million Dollars ($25,000,000) and also holds property insurance through CSAC Excess Insurance Authority pool.

b. Indemnification by Tenant. Tenant shall defend, indemnify and hold harmless Landlord against and from any and all claims arising out of Tenant’s lease/use of the Premises or the conduct of its business caused by the negligent acts, errors or omissions or willful misconduct of the Tenant and its employees, including costs, such as reasonable attorneys’ fees, expenses and liabilities incurred in or about such claim or any action or proceedings brought thereon; and in case any action or proceeding is brought against Landlord by reason of such claim. Tenant shall further indemnify and hold harmless Landlord against and from any and all claims arising from any breach of default in the performance of any obligation on Tenant’s part to be performed under the terms of this Lease.

c. Indemnification by Landlord. Landlord shall defend, indemnify and hold harmless Tenant against and from any and all claims arising out of the negligent acts, errors or omissions or willful misconduct of the Landlord and its employees, including costs, such as reasonable attorneys’ fees, expenses and liabilities incurred in or about such claim or any action or proceedings brought thereon; and in case any action or proceeding is brought against Tenant by reason of such claim. Landlord shall further indemnify and hold harmless Tenant against and from any and all claims arising from any breach of default in the performance of any obligation on Landlord’s part to be performed under the terms of this Lease.

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d. Waiver of Subrogation. Each party shall cause each program of self-insurance and each insurance policy obtained by it to provide that the insurance company waives all right of recovery by way of subrogation against either party in connection with any loss or claim covered by any policy.

Section 14. Casualty Insurance. Tenant will, at Tenant’s expense, obtain and keep in force at all times, with insurance carriers rated at least A-VIII by A.M. Best, casualty insurance insuring the Improvements against fire, and extended coverage (including “all risk” coverage) for the full replacement cost of the Improvements, with deductibles and the form and endorsements of the coverage as reasonably determined by Tenant.

Section 15. Damage or Destruction.

a. Definitions.

i. “Premises Partial Damage” means damage or destruction to the Improvements that are part of the Premises (other than Tenant Improvements), which can reasonably be repaired in six (6) months or less from the date of the damage or destruction. Landlord shall notify Tenant in writing within thirty (30) days from the date of the damage or destruction as to whether or not the damage is Partial or Total.

ii. “Premises Total Destruction” means damage or destruction to the Premises (other than Tenant Improvements), which cannot reasonably be repaired in six (6) months or less from the date of the damage or destruction. Landlord shall notify Tenant in writing within thirty (30) days from the date of the damage or destruction as to whether or not the damage is Partial or Total.

iii. “Insured Loss” means damage or destruction to Improvements that are part of the Premises (other than Tenant Improvements), which was caused by an event required to be covered by the insurance described in Section 14, irrespective of any deductible amounts or coverage limits involved.

iv. “Replacement Cost” means the cost to repair or rebuild the Improvements that are part of the Premises at the time of the occurrence (other than Tenant Improvements), to their condition existing immediately prior thereto, including demolition, debris removal and upgrading required by the operation of current legal requirements for such rebuilding, and without deduction for depreciation.

v. “Tenant Improvements” means Tenant owned alterations, utility installations and trade fixtures.

vi. “Commence” means either the unconditional authorization of the preparation of the required plans, or the beginning of the actual work on the Premises, whichever first occurs. The work to “commence” will be followed by diligent effort to complete.

vii. “Hazardous Substance Condition” shall mean the occurrence or discovery of a condition involving the presence of, or a contamination by, a Hazardous Substance, in, on, or under the Premises which requires remediation.

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b. Partial Damage - Insured Loss. If a Premises Partial Damage that is an Insured Loss occurs, then Landlord shall, at Landlord’s expense, repair such damage (but not Tenant’s Improvements) as soon as reasonably possible and this Lease shall continue in full force and effect. Tenant shall take such actions as necessary to ensure that all applicable insurance proceeds are available to Landlord. However, Tenant shall, at Landlord’s election, make the repair of any damage or destruction the total cost to repair of which is Ten Thousand Dollars ($10,000) or less, and, in such event, Landlord shall take such actions as necessary to ensure that any applicable insurance proceeds are available to Tenant for that purpose. Notwithstanding the foregoing, if the required insurance was not in force or the insurance proceeds are not sufficient to effect the repairs described in this Section, Tenant shall promptly contribute the shortage in proceeds (including any deductible which is Tenant’s responsibility) as and when required to complete the repairs. Tenant shall not be entitled to reimbursement of any funds contributed by Tenant to repair any such damage or destruction.

c. Partial Damage - Uninsured Loss. If a Premises Partial Damage that is not an Insured Loss occurs, Landlord may either: (i) repair such damage as soon as reasonably possible at Landlord’s expense, in which event this Lease shall continue in full force and effect, or (ii) terminate this Lease by giving written notice to Tenant within thirty (30) days after receipt by Landlord of knowledge of the occurrence of such damage. Such termination shall be effective ninety (90) days following the date of such notice. If Landlord elects to terminate this Lease, Tenant shall have the right within thirty (30) days after receipt of the termination notice to give written notice to Landlord of Tenant’s commitment to pay for the repair of such damage without reimbursement from Landlord. Tenant shall provide Landlord with satisfactory assurance of such funds thereof within thirty (30) days after making such commitment. In such event this Lease shall continue in full force and effect, and Landlord shall proceed to make such repairs as soon as reasonably possible after the required funds are available. If Tenant does not make the required commitment, this Lease shall terminate as of the date specified in the termination notice.

d. Total Destruction. Notwithstanding any other provision hereof, if a Premises Total Destruction occurs, this Lease shall terminate ninety (90) days following such Destruction. Notwithstanding the foregoing, if Tenant at that time has an exercisable option to purchase the Premises, then Tenant may exercise such option, notwithstanding any other provision of such Option that provides for limited times or windows for such exercise. In such event, any available insurance proceeds may be applied by Tenant as part of the purchase price for the Premises under the terms of such Option subject to the rights of the Landlord’s lender. In addition, any payments of such insurance proceeds paid to any lien holder that holds a lien senior to the rights of the Tenant under this Lease shall also be credited to the purchase price of the Premises under the terms of such Option. If Tenant fails to exercise such Option then this Lease shall terminate on the date specified in the termination notice and Tenant’s Option shall be extinguished.

e. Abatement of Rent; Tenant’s Remedies.

i. Abatement. In the event of Premises Partial Damage or Premises Total Destruction or a Hazardous Substance Condition for which Tenant is not responsible under this Lease, the Rent payable by Tenant for the period required for the repair, remediation or

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restoration of such damage shall be abated in proportion to the degree to which Tenant’s use of the Premises is impaired. All other obligations of Tenant hereunder shall be performed by Tenant, and Landlord shall have no liability for any such damage, destruction, remediation, repair or restoration except as provided herein.

ii. Remedies. If Landlord is obligated to repair or restore the Premises, the repair or restoration work shall commence within thirty (30) days unless a building permit or insurance claim is required; in which case, repairs or restoration shall commence with ninety (90) days. If Landlord does not Commence, in a substantial and meaningful way, such repair or restoration after such obligation shall accrue within the foregoing time periods, Tenant may, at any time prior to the commencement of such repair or restoration, exercise either of the following remedies:

(1) Give written notice to Landlord and to any lenders of which Tenant has actual notice, of Tenant’s election to terminate this Lease on a date not less than sixty (60) days following the giving of such notice. If Tenant gives such notice and such repair or restoration is not commenced within thirty (30) days thereafter, this Lease shall terminate as of the date specified in said notice. If the repair or restoration is commenced within such thirty (30) days, this Lease shall continue in full force arid effect.

(2) If Tenant at that time has an exercisable option to purchase the Premises, then Tenant may exercise such option, notwithstanding any other provision of such Option that provides for limited times or windows for such exercise. In such event, any available insurance proceeds may be applied by Tenant as part of the purchase price for the Premises under the terms of such Option subject to the applicable Notice to and the rights of Landlord’s lender. In addition, any payments of such insurance proceeds paid to any lien holder that holds a lien senior to the rights of the Tenant under this Lease shall also be credited to the purchase price of the Premises under the terms of such Option. If Tenant fails to exercise such Option then this Lease shall terminate on the date specified in the termination notice and Tenant’s Option shall be extinguished.

Section 16. Condemnation. If the Premises are totally taken by condemnation (by a condemning authority other than Tenant or a Joint Powers entity that Tenant is a party to), this Lease shall terminate on the date of the taking and the Landlord shall, without prior notice or demand, refund to the Tenant a prorated share of any Rent and additional rent for the period immediately after which the Premises or Building was taken. If any portion of the Premises is taken by condemnation (by a condemning authority other than Tenant or a Joint Powers entity that Tenant is a party to), and upon notice by Landlord of such taking, Tenant may elect to terminate this Lease. If Tenant elects to terminate this Lease, Tenant must exercise its right to terminate pursuant to this Section by giving notice to Landlord within thirty (30) days after Tenant receives notice of the nature and the extent of the taking. If Tenant does not terminate this Lease within the thirty (30) day period, this Lease shall continue in full force and effect, except that: (i) the Base Rent shall be reduced by an amount that is in the same ratio to Rent as the total number of square feet in the Premises taken bears to the total number of square feet in the Premises immediately before the date of taking, and (ii) Tenant’s proportionate share of Operating Costs and of Real Property Taxes shall be proportionately reduced. Any condemnation award shall belong to and be paid to Landlord.

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Section 17. Assignment and Subletting.

a. Except as provided in Section 17.c below, Tenant shall not have the right to sublet the Premises without the prior written consent of Landlord, which consent shall not be unreasonably withheld or delayed.

b. Except as provided in Section 17.c below, Tenant shall not have the right to assign its interest in this Lease without the prior written consent of Landlord, which consent by Landlord may be withheld with or without cause.

c. Tenant shall have a right to sublet or assign its interests in this lease to the Madera County Workforce Investment Corporation, a California public benefit corporation and to other non-profit agencies or governmental agencies.

d. Tenant shall not be relieved from its obligation to pay Rent or otherwise comply with the terms and conditions of this Lease by reason of any acceptance of Rent (in whole or in part) by Landlord from any assignee, subtenant, grantee, or successor in interest of Tenant, or any other person, with or without notice, nor by reason of any indulgence, extension of time, or other act or agreement of Landlord with any such assignee, subtenant, grantee, successor in interest of Tenant, or other person. All such payments made to Landlord shall be deemed to have been received by Landlord on account of Rent or other monies due from Tenant. Consent to any such assignment and subletting, or either, shall not operate as a waiver of the requirement of the consent of Landlord to any subsequent assignment and subletting, or either, and the terms of any such consent shall be binding upon any person holding by, under or through Tenant. No assignment, subletting, or other disposition shall relieve Tenant from its liabilities or obligations hereunder.

e. The voluntary or other surrender of this Lease by Tenant, or a mutual cancellation hereof, shall not work a merger, and shall, at the option of Landlord, either terminate all or any existing subleases or subtenancies, or operate as an assignment to Landlord of any or all such subleases or subtenancies.

Section 18. Involuntary Assignment. No interest of Tenant in this Lease shall be assignable by an involuntary assignment. Each of the following acts shall be considered an involuntary assignment:

a. If Tenant is or becomes judicially declared bankrupt or insolvent, makes an assignment for the benefit of creditors, or institutes a proceeding under Bankruptcy Act in which the Tenant is bankrupt;

b. If a writ of attachment or execution is levied on this lease;

c. If, at any proceeding or action to which Tenant is a party, a receiver is appointed with authority to take possession of the Premises.

d. An involuntary assignment shall constitute a default by Tenant and Landlord shall have the right to elect to terminate this Lease, in which case this Lease shall not be treated as an asset of Tenant.

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e. Notwithstanding the above, if a writ of attachment or execution is levied on this Lease, Tenant shall have thirty (30) days in which to cause the attachment or execution to be removed.

Section 19. Default by Tenant. The occurrence of any of the following shall constitute a default by Tenant:

a. Failure to pay Rent within five (5) days from the due date.

b. Failure to perform any other provision of this Lease if the failure to perform is not cured within thirty (30) days after notice thereof has been given to Tenant. If the default cannot reasonably be cured within thirty (30) days, Tenant shall not be in default of this Lease if Tenant commences to cure the default within the thirty (30) day period and diligently and in good faith continues to cure the default.

c. Notices given under this Section shall specify the alleged default and applicable lease provisions, and shall demand that Tenant perform the provisions of this Lease or pay the Rent that is in arrears, as the case may be, within the applicable period of time, or quit the Premises. No such notice shall be deemed a forfeiture or a termination of this Lease unless Landlord so elects in the notice.

Section 20. Landlord’s Remedies. Landlord shall have the following remedies if Tenant commits a default. These remedies are not exclusive; they are cumulative in addition to any remedies now or later allowed by law.

a. Landlord can continue this Lease in full force and effect, and the Lease will continue in effect as long as Landlord does not terminate Tenant’s right to possession, and Landlord shall have the right to collect Rent when due. During the period Tenant is in default, Landlord can enter the Premises and relet them, or any part of them, to third parties for Tenant’s account. Tenant shall be liable immediately to Landlord for all costs Landlord incurs in reletting the Premises, including, without limitation, broker’s commissions, expenses of remodeling the Premises required by the reletting, and like costs. Reletting can be for a period shorter or longer than the remaining term of this lease. Tenant shall pay to Landlord the Rent due under this Lease on the dates the Rent is due, less the Rent Landlord receives from any reletting. No act by Landlord allowed by this Section shall terminate this Lease unless Landlord notifies Tenant that Landlord elects to terminate this Lease.

b. Landlord can terminate Tenant’s right to possession of the Premises at any time. No act by Landlord other than giving notice to Tenant shall terminate this Lease. Acts of maintenance, efforts to relet the Premises, or the appointment of a receiver on Landlord’s initiative to protect Landlord’s interest under this Lease shall not constitute a termination of Tenant’s right to possession. On termination, Landlord has the right to recover from Tenant:

i. The worth, at the time of the award, of the unpaid Rent that had been earned at the time of termination of this Lease;

ii. The worth, at the time of the award, of the amount by which the unpaid Rent that would have been earned after the date of termination of this Lease until the time

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of award exceeds the amount of the loss of Rent that Tenant proves could have been reasonably avoided;

iii. The worth, at the time of the award, of the amount by which the unpaid Rent for the balance of the term after the time of award exceeds the amount of the loss of Rent that Tenant proves could have been reasonably avoided; and

iv. Any other amount, and court costs, necessary to compensate Landlord for all detriment proximately caused by Tenant’s default.

v. “The worth, at the time of the award” is to be computed by discounting the amount of the discount rate of the Federal Reserve Bank of San Francisco at the time of the award, plus one percent (1%).

c. Landlord at any time after Tenant commits a default, which is not cured during the applicable grace period, can cure the default at Tenant’s cost. If Landlord at any time, by reason of Tenant’s default, pays any sum or does any act that requires the payment of any sum, the sum paid by Landlord plus an administrative fee of ten percent (10%) of such amount shall be due from Tenant upon twenty (20) days written notice from Landlord, and if paid at a later date shall bear interest at the rate of ten percent (10%) per annum from the date the sum is due to Landlord until Landlord is reimbursed by Tenant. The sum, together with interest on it, shall be additional Rent.

d. The late payment of any Rent will cause Landlord to incur additional costs, administration, collection costs, and processing and accounting expenses. If Landlord has not received any installment of Rent by the first (1st) day of the month for which the Rent is due then, without any requirement for further notice to Tenant, Tenant shall pay a late fee equal to the lesser of (i) five percent (5%) of the amount due, or (ii) the late charge percentage or amount charged by Landlord’s lender. Landlord and Tenant recognize that the damage Landlord will suffer in the event of Tenant’s failure to pay this amount is difficult to ascertain and that the late charge is the best estimate of the damage that Landlord will suffer. If a late charge becomes payable for any three (3) installments of Rent during the term of the Lease, a security deposit of two (2) months’ Base Rent plus the monthly Estimated Operating Costs and Taxes will become payable. The sums required under this subsection shall be additional rent.

Section 21. Default by Landlord. The occurrence of any of the following shall constitute a default by Landlord:

a. Failure to pay Real Property Taxes when due.

b. Failure to perform any other provision of this Lease, if the failure to perform is not cured within thirty (30) days after notice thereof has been given to Landlord and Landlord’s lender. If the default cannot reasonably be cured within thirty (30) days, Landlord shall not be in default of this Lease if Landlord commences to cure the default within the thirty (30) day period and diligently and in good faith continues to cure the default.

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c. Notices given under this Section shall specify the alleged default and applicable lease provisions, and shall demand that Landlord perform the provisions of this Lease within the applicable period of time.

Section 22. Tenant’s Remedies. In the event that neither Landlord nor Landlord’s lender cures said breach within thirty (30) days after receipt of notice of default, or if having commenced said cure they do not diligently pursue it to completion, then Tenant may elect to cure said breach at Tenant’s expense and offset from Rent the actual and reasonable cost to perform such cure; provided, however, that such offset shall not exceed an amount equal to one month’s Base Rent, reserving Tenant’s right to seek reimbursement from Landlord for any such expense in excess of such offset. Tenant shall document the cost of said cure and supply said documentation to Landlord.

Section 23. Signs. Tenant, at its cost, shall have the right to place and maintain signage on the entry to the Premises, of a type customarily used in the conduct of like businesses, advertising its business on the Premises, provided, that such sign shall be subject to the approval of Landlord, as to exact location, appearance and size, such approval not to be unreasonably withheld or delayed and shall comply with all applicable laws, codes and ordinances. Tenant shall not have the right to place, construct, or maintain any other sign, advertisement, awning, banner, or other exterior decoration without Landlord’s consent.

Section 24. Inspection. Landlord and its authorized representatives shall have the right to enter the Premises at any time during regular business hours with prior notice of seventy-two (72) hours to Tenant for any of the following purposes:

a. To determine whether the Premises are in good condition and whether Tenant is complying with its obligations under this Lease;

b. To do any necessary maintenance and to make any restoration to the Premises that Landlord has the right or obligation to perform;

c. To serve, post, or keep posted any notices required or allowed under provisions of this Lease;

d. To show the Premises to prospective brokers, agents, buyers, and tenants at any time during the term. In no event (except if and to the extent necessitated by an emergency) shall Landlord’s right of access granted by this Section extended to safes or vaults or any other areas where confidential information is stored.

Section 25. Attornment. In the event of a foreclosure proceeding, the exercise of the power of sale under any mortgage or deed of trust or the termination of a ground lease, Tenant will, if requested, attorn to the purchaser and recognize that purchaser as Landlord under this Lease. However, Tenant’s obligation to attorn to the purchaser will be conditioned on Tenant’s receipt of a nondisturbance agreement.

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Section 26. Subordination.

a. In General. Tenant agrees to subordinate this Lease to the lien of any first mortgage or blanket mortgage, as described in Section 30, placed on the Premises, provided only that so long as this Lease is in full force and effect (a) Tenant’s tenancy will not be disturbed, nor will this Lease be affected by any default under such mortgage; (b) the rights of Tenant under this Lease shall expressly survive and shall not be cut off; and (c) this Lease shall continue in full force and effect.

b. SNDA. If Landlord is not in default of this Lease beyond the applicable cure period, Tenant will, upon demand and without cost to Tenant, execute and deliver to Landlord a Subordination, Non-Disturbance and Attornment Agreement (“SNDA”) necessary to effectuate such subordination and non-disturbance, in a form as may be reasonably required by a lender described in Section 26.a.

c. Lender’s Right to Notice and Cure. Upon Landlord’s written request, any notices required or permitted to be given to Landlord under this Lease shall also be given to any mortgagee whose name and address has been provided by Landlord to Tenant in writing. Such mortgagee shall have the right, but not the obligation, to cure any default by Landlord within the same time period as may be granted Landlord under any provision in this Lease.

Section 27. Estoppel Certificates. Each party, within twenty (20) days after notice from the other party, shall execute and deliver to the other party, in reasonable form, a certificate stating that this Lease is unmodified and in full force and effect, or in full force and effect as modified, and stating the modifications. The certificate also shall state the amount of monthly Rent, the dates of which the Rent has been paid in advance, and the amount of any security deposit or prepaid Rent. The certificate shall be addressed to, or for reliance by, such lenders, buyers, subtenants or assignees, as the requesting party may reasonably designate. Failure to deliver the certificate within twenty (20) days shall be conclusive upon the party failing to deliver the certificate for the benefit of the party requesting the certificate, that this Lease is in full force and effect and has not been modified except as may be represented by the party requesting the certificate.

Section 28. Sale of Premises. If Landlord sells or transfers all or any portion of the Premises, Landlord shall provide a written notice to Tenant thirty (30) days before the consummation of the sale or transfer. Landlord shall not be released from any liability thereafter accruing under this Lease as to any security deposit or prepaid Rent has been paid by Tenant for a period of six (6) months to allow Tenant ample time to perform audits. Landlord shall comply with any reasonable request of Tenant in furtherance of such audits.

Section 29. Purchase Option.

a. Option to Purchase. In consideration of the mutual covenants of the parties under the Lease, Landlord hereby grants to Tenant the exclusive option (“Option”) to purchase the Premises on the terms and conditions set forth in this Purchase Option.

b. Term. The term of the Option (the “Option Term”) shall commence as of the date of this Agreement (the “Commencement Date”) and continue until the expiration date of

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this Lease (unless sooner terminated pursuant to the terms hereof). Notwithstanding the foregoing, the Option Term shall expire sooner if the Tenant’s rights of occupancy to the Premises under the Lease are lawfully terminated prior to the expiration of the Option Term.

c. No Change in Condition of Title. After the date of this Agreement, Landlord shall not execute or amend any document or otherwise create or consent to any matter, lien or exception which would change the condition of the title to the Premises or interfere with Landlord’s performance of this Agreement prior to conveyance of the Premises to the Tenant, unless (i) Landlord shall have been requested to do so by Tenant or Tenant shall have reviewed and reasonably approved such item in writing, or (ii) the exception is a covenant or other instrument required in connection with Landlord’s construction of improvements under this Lease, or (iii) the exception was a document which was required to be recorded by Landlord’s lender, or (iv) the exception is a reciprocal easement agreement or covenants, conditions and restrictions recorded by Landlord for the development and use of the Premises and other property which may be developed by Landlord. Notwithstanding the foregoing, Tenant consents to the recordation of any liens to secure Landlord’s Financing (described below).

d. Manner of Exercising Option. Tenant shall exercise the Option by delivering to Landlord a written notice of exercise of the Option (“Notice of Exercise”) at any time during 11th, 16th, 21st, or any time after the 26th calendar year following the Commencement Date of the Lease.

e. Purchase Price. The purchase price for the Premises (the “Purchase Price”) shall be a variable amount equal to (i) the then unpaid principal balance of Landlord’s secured loan for the Premises, plus (ii) any prepayment, defeasance or similar costs or expenses which may result from the prepayment of Landlord’s secured loan or indenture, and (iii) all legal, accounting and other charges and expenses incurred by Landlord in connection with the prepayment of Landlord’s secured loan or indenture. The Purchase Price shall be paid in cash at the Close of Escrow.

f. Escrow. Following exercise of the Option, the parties shall open an Escrow with an Escrow Holder selected by Tenant. The Close of Escrow shall occur ninety (90) days after the delivery of the Exercise Notice. The following sets forth other material terms and conditions of the purchase of the Premises.

i. Conveyance: Title Policy. At the Close of Escrow, Landlord shall deliver title to the Premises to Tenant by grant deed subject solely to the following exceptions to title:

(1) Exceptions for a lien for local real estate taxes and assessments not yet due or payable;

(2) Those exceptions that existed when the Premises were conveyed by the Tenant to the Landlord.

ii. Title Policy. At the Closing, Escrow Holder shall issue a standard CLTA owner’s policy of title insurance in the amount of the Purchase Price, naming Tenant as the insured with respect to the Premises, insuring Tenant that Tenant is vested with fee simple

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title to the Premises, subject only to the permitted exceptions to title as described in Section 29.f.i.

iii. Closing Costs and Prorations. The costs of the Title Policy, and other Escrow fees and closing costs, shall be paid by Tenant.

iv. Further Assurances. In addition to the acts and deeds recited herein and contemplated to be performed, executed or delivered by Landlord or Tenant, the parties each hereby agree to perform, execute and deliver, or cause to be performed, executed and delivered, any and all such further acts, deeds, documents and assurances as Landlord or Tenant, as the case may be, may reasonably require in order to carry out the terms of and consummate fully the transactions contemplated by this Option in accordance with commercially reasonable terms.

Section 30. Financing Condition. Landlord’s obligations under this Lease are subject to Landlord arranging and recording construction financing and arranging permanent financing for the Premises on terms and conditions acceptable to Landlord, and in an amount approved by Tenant, in Landlord’s sole discretion (“Landlord’s Financing”), within 90 days of the date of execution of this Lease. Tenant agrees to reasonably cooperate with Landlord in securing Landlord’s Financing, but at no cost to Tenant.

Section 31. Miscellaneous.

a. Recordation of Memorandum of Lease and Purchase Option. Concurrent with the Execution Date, a Memorandum of Lease and Purchase Option, in the form of Exhibit C, shall be recorded in the Official Real Property Records of Madera County.

b. Attorneys’ Fees. If either party commences an action against the other party arising out of or in connection with this Lease, the prevailing party shall be entitled to have and recover from the losing party reasonable attorneys’ fees and costs of suit. The recovery of attorneys’ fees shall be an element of the prevailing party’s costs of suit and not damages. The “prevailing party” shall be the party who is entitled to recover its costs of suit, whether or not the suit proceeds to final judgment.

c. Landlord. The term Landlord as used in this Lease, so far as the covenants or obligations on the part of Landlord are concerned, shall be limited to mean and include only the owner at the time in question of the fee title to the Premises. In the event of any transfer(s) of such interest, the Landlord herein named (and in case of any subsequent transfers or conveyances, the then grantor) shall have no further liability under this Lease to Tenant except as to matters of liability which have accrued and are unsatisfied as of the date of such transfer. Landlord’s liability under this Lease shall be limited to its ownership interest in the Premises, and no member, officer, representative, affiliate or party related to or under common control of Landlord shall have any duty, liability or obligation to Tenant or any other party under this Lease.

d. Force Majeure Delays. For purposes of this Lease and the Work Letter, the term “force majeure delays” shall mean and refer to delays caused or contributed to by any cause beyond the control of Landlord including, without limitation, delays caused or contributed

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to by labor disputes, inclement weather conditions, acts of God, acts of war or terrorism, inaccessible site conditions, action or inaction by governmental authorities, strikes or stoppages, shortages of materials, or fire or other casualty. Force majeure delays are not applicable to Tenant’s payment of Rent or other charges due under this Lease.

e. Surrender of Premises. On expiration of the term, Tenant shall surrender to Landlord the Premises in good condition (except for ordinary wear and tear and except for any destruction to the Premises contemplated in Section 15 above and except for any damage required to be repaired by Landlord). Landlord can elect to retain or dispose of in any manner any alterations or Tenant’s personal property that Tenant does not remove from the Premises on expiration or termination of the Term by giving at least ten (10) days notice to Tenant. Title to any such alterations or Tenant’s personal property that Landlord elects to retain or dispose of on expiration of the ten (10) day period shall vest in Landlord. Tenant waives all claims against Landlord for any damage to Tenant resulting from Landlord’s retention or disposition of any such alterations or Tenant’s personal property. Tenant shall be liable to Landlord for Landlord’s reasonable costs for storing, removing, and disposing of Tenant’s personal property (including any costs necessary to assure compliance with HIPAA confidentiality standards). If Tenant fails to surrender the Premises to Landlord on expiration of the Term as required by this Section, Tenant shall hold Landlord harmless from all damages resulting from Tenant’s failure to timely surrender the Premises, including, without limitation, damages to a successor tenant resulting from Tenant’s failure to timely surrender the Premises.

f. Holding Over. If Tenant, with Landlord’s consent, remains in possession of the Premises after expiration or termination of the term, or after the date in any notice given by Landlord to Tenant terminating this Lease, such possession by Tenant shall be deemed to be a month-to-month tenancy at one hundred ten percent (110%) of the then current rental rate terminable on thirty (30) days’ notice given at any time by either party.

g. Brokerage Commissions. Each party warrants and represents to the other that such party has not engaged any real estate broker or agent to represent their interests in connection with this Lease, and shall indemnify the other party from any such claim, demand loss or liability.

h. Time of Essence. Time is of the essence of each provision of this Lease.

i. Successors. This Lease shall be binding on and inure to the benefit of the parties and their successors, except as provided in Section 18.

j. California Law. This Lease shall be construed and interpreted in accordance with the laws of the State of California.

k. Integrated Agreement: Modification. This Lease contains all the agreements of the parties with respect to the leasing of Premises and cannot be amended or modified except by a fully executed written agreement.

l. Provisions or Covenants and Conditions. All provisions, whether covenants or conditions, on the part of the Tenant shall be deemed to be both covenants and conditions.

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m. Captions. The captions of this Lease shall have no effect on its interpretations.

n. Joint and Several Obligations. “Party” shall mean Landlord or Tenant; and if more than one person or entity is Landlord or Tenant, the obligations imposed on that party shall be joint and several.

o. Severability. If any provision of this Lease is held to be illegal, unenforceable, or invalid for any reason, the validity and enforceability of the remaining provisions of this Lease shall not be affected.

p. Incorporation of Exhibits. All exhibits attached and referred to in this Lease are incorporated as though fully set forth.

q. Notices. Any notice, consent, request, demand, or other communication required or permitted under this Lease shall be given in writing in one or more of the ways described below and shall be deemed effective if provided as follows: (i) by personal delivery, which shall be effective on personal delivery to the recipient; (ii) by first-class mail to the recipient at its address set forth below, which shall be effective 3 mail-delivery days after deposit in a United States Postal Service office or mailbox; (iii) by certified mail, return receipt requested, to the recipient at its address set forth below, which shall be effective on delivery, provided that delivery is confirmed by a return receipt; (iv) by overnight delivery by Federal Express/United Parcel Service with charges prepaid or charged to the sender’s account, to the recipient at its address set forth below, which shall be effective on delivery, provided that delivery is confirmed by the delivery service; (v) by email transmission to the recipient at its e-mail address set forth below, using an established provider of registered e-mail services with headquarters in the United States that furnishes unmodifiable proof, (x) that the message was sent, (y) that the message was delivered to the recipient’s e-mail server, and (z) of the time and date the message was delivered to the recipient, along with a verifiable electronic record of the content of the message. Any notice given by e-mail shall be deemed received on the next business day if it is received after 5:00 p.m. (recipient’s time) or on a nonbusiness day. The parties’ addresses for purpose of giving notice under this Agreement are as follows. Any party may change its address or email address by giving the other party notice of the change in any manner permitted by this Agreement.

If to Landlord: Madera H&HS 2 LLC Attn: Steven G. Spencer 5286 East Home Avenue Fresno, California 93727 Email: SSpencer@Spencerenterprises.com

If to Tenant: County of Madera 200 W. 4th Street Madera, CA 93667

* * * * * * * * * * *

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IN WITNESS WHEREOF the foregoing Agreement is executed on the date and year first above-written.

ATTEST:

________________________________ Clerk, Board of Supervisors

Approved as to Legal Form: COUNTY COUNSEL

By:______________________________

ACCOUNT NUMBER(S)

_________________________________

_________________________________

COUNTY OF MADERA

_______________________________ Chairman, Board of Supervisors

MADERA H&HS 2 LLC, a California limited liability company

By: (Signature)

(Print Name)

Title:

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Exhibit A

Legal Description of Real Property

ALL that certain real property, being a portion of Lots 23 and 24 according to the map entitled "Map of Lankershim Colony and Addition to the Town of Madera", filed for record February 5, 1889 in Volume 4 of Maps, at Page 31, Fresno County Records, and situate in the Southwest quarter of Section 20, Township 11 South, Range 18 East, Mount Diablo Meridian, County of Madera, State of California, being more particularly described as follows: BEGINNING at a point on the East-West centerline of said Section 20, being also a point on the North line of said Lot 24, from which the Northwest corner of said Lot 24, being also the West quarter corner of said Section 20, bears South 89°45'50" West 576.34 feet, said Point of Beginning bears also South 89°45'50" West 100.17 feet from the most Northerly common corner of said Lots 23 and 24; thence along said East-West centerline and said North line of Lot 24 and the North line of said Lot 23, North 89°45'50" East 522.50 feet to a point which is South 89°45'50" West 224.19 feet from the Northeast corner of said Lot 23; thence leaving last said East-West centerline and North line of Lot 23 and proceeding South 00°14'10" East 298.00 feet to a point which is 225.73 feet distant at right angles from the East line of said Lot 23; thence parallel with and 298.00 feet distant at right angles from said East-West centerline South 89°45'50" West 149.00 feet to a point which is 374.73 feet distant at right angle from said East line; thence South 00°14'10" East 43.50 feet to a point which is 374.95 feet distant at right angles from said East line; thence parallel with and 341.50 feet distant at right angles from said East-West centerline South 89°45'50" West 373.50 feet to a point which is 101.89 feet distant at right angles from the common line of said Lots 23 and 24; thence North 00°14'10" West 341.50 feet to the Point of Beginning. Containing 171,952 square feet (3.95 acres), more or less. SUBJECT TO all easements, road dedications and/or rights-of-way of record.

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Exhibit B

Work Letter for Tenant Improvements

This Exhibit B is the Work Letter for the Office Lease between Madera H&HS 2 LLC, a California limited liability company (“Landlord”) and County of Madera, a California political subdivision (“Tenant”). Notwithstanding anything herein or in the Lease or any other document to the contrary, all obligations to complete the Tenant Improvements and other work required of the Landlord are hereby assigned to and assumed by HCCI and Tenant agrees to and approves said assignment and assumption and shall look to HCCI and not the Landlord for the completion of such Tenant Improvements and other work and any failure of HCCI to commence or complete such Tenant Improvements and other work shall not result in a default or event of default or give rise to a right of the Tenant to cancel or terminate the Lease or abate or reduce rent or exercise any other remedies under the Lease or declare a constructive eviction or other similar right. THE INFORMATION CONTAINED IN THIS RIDER/EXHIBIT CONSTITUTES A PART OF THIS LEASE. IN THE EVENT ANY TERMS OF THE LEASE CONFLICT WITH THIS RIDER/EXHIBIT DURING THE CONSTRUCTION PERIOD, THE RIDER/EXHIBIT SHALL PREVAIL. RECITALS: Concurrently with the execution of this Work Letter, Landlord and Tenant have entered into an Office Lease (the “Lease”) covering certain Leased Premises (the “Premises”) more particularly described in the Lease. In consideration of the mutual covenants hereinafter contained, Landlord and Tenant hereby agree as follows:

1. Scope of Tenant Improvements. Reference herein to “Tenant Improvements” shall include all work to be done in the Leased Premises which is based on Landlord’s Proposal Response (“Landlord’s Response”) to Tenant’s Request for Proposal #2015-08, dated December 22, 2015, to the extent Landlord’s Response relates to improvements to be constructed for the Premises. Tenant Improvements will include the following matters: (i) vertical construction of shell improvements for approximately 39,200 square feet; (ii) interior components for the Premises; (iii) site improvements; (iv) offsite components all as referred to and known as the Schematic Design Plans submitted to the County Board of Supervisors as a component of the deliverables for the completion of the Project Schematic Design Phase; and (v) the other site improvements described in the Site Improvement Agreement attached hereto as Exhibit D (the “Improvement Plans”). The Tenant Improvements required to be constructed by Landlord specifically exclude all payment and improvement obligations of Tenant arising out of or relating to (i) the “Agreement for Outside City Limits Sewer & Water Connection for Madera County Central Garage”, by and between Tenant and the City of Madera, recorded on February 22, 2010, as instrument number 2010005280, Official Records of Madera County (the “Covenant”), and (ii) the unrecorded Memorandum of Understanding, dated January 24, 2012, between Tenant and the City of Madera (the “MOU”), except to the extent that the Landlord has assumed said obligations in the

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Site Improvement Agreement (and nothing herein is intended to limit Landlord’s ability to make offsets against allowances as described below), and any other agreement to which Tenant is a party which could affect or delay construction of the Premises (other than the Site Improvement Agreement) (the “Other Agreements”). Tenant shall be solely responsible to timely and fully fulfill all obligations under the Covenant, the MOU and the Other Agreements and agrees to indemnify, defend and hold Landlord, its agents, members, related parties and the Premises free and harmless of any claim, demand, expense, cost, liability or obligation arising out of or in connection with the Covenant, the MOU and the Other Agreements, including costs and expenses incurred by Landlord which result from or relate to any delay in the completion of the Tenant Improvements.

2. Tenant Improvement Procedures.

(a) Final Tenant Improvement Plans. Landlord has completed and submitted the Schematic Design package for the Tenant Improvements to Tenant. After the Schematic Design package has been approved by Tenant, including the Madera County Board of Supervisors, Landlord will complete design development documents, construction documents and the finish schedule for the Tenant Improvements (the “Tenant Improvement Plans”). Landlord will submit the Tenant Improvement Plans to Tenant for approval, which approval shall not be unreasonably withheld or delayed. Concurrently with the approval of the Tenant Improvement Plans the parties will approve a work schedule for the completion of the Tenant Improvements (the “Work Schedule”). In the event Tenant shall object to the Tenant Improvement Plans or Work Schedule, the parties will meet and negotiate in good faith to resolve all reasonable objections. Once approved by the parties, the Tenant Improvement Plans and Work Schedule shall be binding upon both parties subject to any change orders. In all events the Tenant Improvement Plans and Work Schedule shall be approved by the parties prior to the recordation of Landlord’s financing for the Premises, unless waived by Landlord. Tenant acknowledges and agrees that all materials, finishes and installations for the Tenant Improvements must be consistent with the approved finish schedule which will be included as part of the Tenant Improvement Plans (the “Finish Schedule”). The parties agree that the Tenant Improvement Plans described in this Paragraph will constitute the only plans and specifications for the Premises and Tenant Improvements, including, without limitation, specifications of drawings contained in or referred to in Tenant’s Request for Proposal for the Premises,

(b) Plan Check. As soon as possible after the execution of the Lease, the Tenant Improvement Plans shall be submitted to the County of Madera by Landlord’s architect for plan checking and the issuance of a building permit. Landlord, with Tenant’s cooperation, shall cause any changes necessary to obtain the building permit to be made to the Tenant Improvement Plans.

(c) Change Orders. No further changes to the Tenant Improvements Plans may be made without the prior written approval from both Landlord and Tenant, and then only after Tenant has agreed to pay Landlord for all excess costs resulting from the design and/or construction of such changes within 30 days of the parties’ approval of the change order. In addition, any costs relating to a Tenant Delay as defined in Section 2(g) below shall be paid by Tenant to Landlord within 30 days of written demand by Landlord which shall be accompanied with reasonable documentation of such delay. Provided Tenant agrees to make such payment

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within 30 days, Landlord’s approval of change orders shall not be unreasonably withheld. Landlord shall commence with the implementation of such changes as agreed to in writing while Tenant processes payment for such change, and Tenant will pay Landlord the costs of the changes within 30 days of the approval of the change order. In addition to all other remedies available to Landlord in the event Tenant’s failure to timely pay for change order, Landlord may halt work on such change if said payment is not received by Landlord within 30 days of the date approval is provided in writing.

i. Prevailing Wage. All such work shall be subject to prevailing wage rates requirements.

ii. Unforeseen Conditions. Landlord shall provide the County’s construction

manager with notice of unforeseen conditions within ten (10) business days upon discovery of such conditions.

iii. Change Order Costs. The cost of change orders shall be determined by acceptable lump sum proposal inclusive of back-up as may be reasonably required by Tenant. All costs associated with the change are to be included in the change order proposal submitted by Landlord. Costs may be in terms of time, money or both. The following form shall be followed as applicable for additions and deductions:

iv. Claims. Should Landlord claim that any instruction, request, drawing, specification, action, condition, omission, default, or other situation (i) obligates the County to pay additional compensation to the Landlord; or (ii) obligates the County to grant an extension of time for the completion of the Contract; or (iii) constitutes a waiver of any provision in the Contract, LANDLORD SHALL NOTIFY THE COUNTY, IN WRITING, OF SUCH CLAIM AS SOON AS POSSIBLE, BUT IN NO EVENT WITHIN MORE THAN TEN (10) WORKING

EXTRA/(CREDIT) (1) Material (attach itemized quantity and unit cost plus sales tax)

(2) Labor (attach itemized hours and base rates from identified prevailing wage rate schedules)

(3) Commercial General Liability and Property Damage Insurance, Workers’ Compensation Insurance, Social Security and Unemployment taxes at actual and verified cost.

(4) Subtotal

(5) Subcontractor’s overhead and profit as defined in Article viii, below, not to exceed 15% of Item (4) (if applicable)

(6) Subtotal

(7) Landlord’s Overhead and Profit, as defined in Article viii, below, not to exceed 5% of Item (6) for work performed by subcontractor, or 15% if performed by Landlord

(8) Subtotal

(9) Bond Premium, not to exceed 1% of Item (8)

(10) Total

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DAYS FROM THE DATE LANDLORD HAS ACTUAL OR CONSTRUCTIVE NOTICE OF THE CLAIM. ONCE ALL CLAIM DOCUMENTATION HAS BEEN COMPILED AND UPON SUBMISSION OF THE OFFICIAL CLAIM, LANDLORD SHALL ALSO PROVIDE COUNTY WITH SUFFICIENT WRITTEN DOCUMENTATION SUPPORTING THE FACTUAL BASIS OF THE CLAIM including documentation items iv (2) 1-10 described in this Article 2 (c) above. Landlord shall be required to certify under penalty of perjury the validity and accuracy of any claims submitted. The Landlord’s failure to notify the County within such ten (10) working day period shall be deemed a waiver and relinquishment of the claim against the County. If such notice be given within the specified time, the procedure for its consideration shall be as stated above in this Article.

v. Overhead and Profit. The term “overhead and profit” for the Landlord and

any subcontractors shall be considered to include: all incidental overhead support costs and profit. Such incidental costs include: estimating and purchasing; indirect supervision and project management; home office overhead; site overhead including facilities and utilities; warranties; and small tools.

(d) Construction of Tenant Improvements. After a building permit for the Tenant Improvements has been issued, Landlord shall cause its Contractor to begin and diligently pursue installation of the Tenant Improvements in accordance with the Tenant Improvement Plans and any approved change orders. Landlord shall supervise the completion of such work and shall use its best efforts to secure substantial completion of the work in an expeditious manner in accordance with the Work Schedule. Landlord shall also provide Tenant with reasonable access to the Tenant Improvements for the purpose of inspection and provide Tenant with such reports on the status of the completion of the Tenant Improvements as Tenant may reasonably request. Landlord shall not be liable for any direct or indirect damages as a result of delays in construction beyond Landlord’s reasonable control, including, but not limited to, acts of God, inability to secure governmental approvals or permits, governmental restrictions, strikes, availability of materials or labor, or delays by Tenant (or its architect or anyone performing services on behalf of Tenant).

(e) Payment for the Tenant Improvements. Landlord shall build Tenant Improvements on a Turnkey Basis as per Landlord’s building standards (the “Building Standards”) which shall be delivered to Tenant for approval with the Tenant Improvement Plans and Work Schedule. The costs of the Tenant Improvements shall be paid by Landlord (excluding costs for change orders, which shall be paid by Tenant in accordance with Paragraph (c) above).

(f) Commencement Date/Completion. The Commencement Date of the Lease is set forth in Section 2.b of the Lease. The Lease Commencement Date is not necessarily the Premises Completion Date described in Section 2.c of the Lease. The Premises shall be deemed “completed” as defined in Section 2.c of the Lease. Tenant’s obligation for the payment of Rent under the Lease shall commence upon the Lease Commencement Date described in Section 2.b of the Lease.

(g) Tenant Delay. Notwithstanding the above, the Commencement Date for payment of Rent shall be the date as specified in Section 2 of the Lease, if Landlord determines, in its

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reasonable discretion, that the Tenant Improvements would have been completed but for any delay which results from:

i. Tenant’s failure to approve any items or perform any other obligation in accordance with and by the date specified in the Work Schedule; and/or

ii. Tenant’s failure to approve the Tenant Improvement Plans or Work Schedule within thirty (30) days for each item noted herein (plan check shall be allotted no less than sixty (60) days not inclusive of time Architect is responding to plan check comments);; and/or

iii. Tenant’s request for materials, finishes or installations which deviate from

the Finish Schedule for the Tenant Improvements; and/or

iv. Tenant’s changes in the Tenant Improvement Plans after the execution of the Lease; and/or

v. Tenant’s request to deviate from the Building Standards for the Tenant

Improvements; and/or

vi. Tenant’s failure to timely provide Tenant’s Financial Statement to Landlord as described in the Addendum to this Lease.

(h) Schedule Update and Impacts. By the tenth day of each month, Landlord shall

provide a schedule update to the Tenant documenting the status of the work for each activity within the schedule. Any Tenant delays shall be submitted in the form of a schedule fragnet and once approved, shall be inserted into the schedule update.

3. Project Allowances. Landlord shall provide Tenant following the satisfaction of all conditions precedent to this Lease (including, without limitation, the matters described in Sections 30 and 31 of the Lease) the following allowances as specified in Request for Proposal #2015-08 for the Purchase Design/Build/Lease Back Project for Site Improvements and New Office Building(s) for the Madera County Health & Social Services Office Facility; and Landlord’s Proposal Response dated December 22, 2015:

(a) An amount equal to $332,262.50 for Project Management by Tenant. This amount shall be included in the Construction Cost Estimate.

(b) An amount equal to $66,452.50 for Tenant’s oversight and administration.

(c) An amount equal to $199,357.50 for Inspector of Record (3rd Party Inspector to be contracted by Tenant).

(d) An amount equal to $199,357.50 for Materials Testing and Special Inspection

(Independent Testing Lab to be contracted by Tenant) as services are rendered and billed.

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(e) An amount equal to $250,000.00 for Tenant’s network and telephone system.

The allowances described in paragraphs 3(a)−3(e) above shall be paid by Landlord to Tenant on recordation of Landlord’s Financing. The allowance described in 3(a) above shall be paid by Landlord to Tenant in two installments: $25,000.00 to be paid within 30 days after lease execution, with the balance of $307,562.50 due on recordation of Landlord’s Financing. The allowances described in Section 3(a)−3(e) above will be offset by a one-time credit of $600,000, which the parties have agreed is a fair and final amount due to Landlord for the cost of certain offsite improvements arising from the annexation of the Premises into the City of Madera, including but not limited to, Tozer Street (north of the intersection with “A” Street) and Sunrise Avenue improvements, PG&E improvements, undergrounding work, sewer main upsizing in Pecan Lane, Tozer and Sunrise intersection signalizations, water well improvements and other improvements. Landlord and Tenant acknowledge and agree that Landlord is not responsible for costs associated with any improvements, payments or obligations related to or associated with any of the following: (i) the amended Memorandum of Understanding dated January 24, 2012, between Tenant and the City of Madera, except to the extent Landlord has assumed any such obligation in the “Agreement for Outside City Limits Water & Sewer Connections for County Office Complex”; or (ii) the “Agreement for Outside City Limits Sewer & Water Connection for Madera County Central Garage” between Tenant and the City of Madera recorded on February 22, 2010, as instrument number 2010005280, Official Records of Madera County.

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Exhibit C

Memorandum of Lease [and Purchase Option if Applicable]

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RECORDING REQUESTED BY AND RETURN TO: Madera County Chief Administrative Officer _______________________________ _______________________________ _______________________________

MEMORANDUM OF LEASE AND PURCHASE OPTION

THIS MEMORANDUM OF LEASE AND PURCHASE OPTION (“Memorandum”) is executed as of _____________, 2018, by County of Madera, a California political subdivision (“Tenant”) and Madera H&HS 2 LLC, a California limited liability company (“Landlord”), who agree as follows. 1. Term and Premises. Landlord leases to Tenant, and Tenant leases from Landlord, on the terms and conditions set forth in that certain Office Lease dated as of _____________________________ the “Lease”), certain real property whose legal description is attached as Exhibit “A” to this Memorandum of Lease (the “Property”), for a term of thirty years, commencing on the commencement date specified in the Lease, and continuing unless terminated earlier as provided in the Lease. The provisions of the Lease are incorporated into this Memorandum of Lease by reference. 2. Purchase Option. In addition, by this Memorandum, Landlord grants to Tenant an option to purchase the Property (the “Purchase Option”). The term of the Purchase Option begins on the date of this Memorandum and ends on the termination of the term of the Lease. The price and other terms are in the unrecorded provisions of the Lease. 3. Provisions Binding on Landlord and Tenant. The provisions of the Lease to be performed by Landlord and Tenant, whether affirmative or negative in nature, are intended to and shall bind Landlord and Tenant and their respective successors and assigns at any time, and shall inure to the benefit of Landlord or Tenant and their respective successors and assigns. 4. Purpose of Memorandum of Lease. The parties desire to make the existence of the Lease a matter of public record and have, therefore, executed this Memorandum and caused it to be recorded in the Official Records of Madera County, California. However, in the event of any inconsistency between the

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terms of the Lease and the terms of this Memorandum, the terms of the Lease shall control and govern the rights and duties of Landlord and Tenant.

IN WITNESS WHEREOF, the parties have signed this Memorandum as of the date first above written. “Landlord” MADERA H&HS 2 LLC, a California limited liability company By: ________________________________

John McCann Its: Manager

“Tenant” County of Madera, a California political subdivision By:

Printed Name

Title

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A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. STATE OF CALIFORNIA ) ) ss. COUNTY OF ________ ) On ____________, 2018, before me, _______________________, a Notary Public, personally appeared ________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. _______________________________________ Notary Public

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A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. STATE OF CALIFORNIA ) ) ss. COUNTY OF ________ ) On ____________, 2018, before me, _______________________, a Notary Public, personally appeared ________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. _______________________________________ Notary Public

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EXHIBIT A LEGAL DESCRIPTION OF PREMISES

ALL that certain real property, being a portion of Lots 23 and 24 according to the map entitled "Map of Lankershim Colony and Addition to the Town of Madera", filed for record February 5, 1889 in Volume 4 of Maps, at Page 31, Fresno County Records, and situate in the Southwest quarter of Section 20, Township 11 South, Range 18 East, Mount Diablo Meridian, County of Madera, State of California, being more particularly described as follows: BEGINNING at a point on the East-West centerline of said Section 20, being also a point on the North line of said Lot 24, from which the Northwest corner of said Lot 24, being also the West quarter corner of said Section 20, bears South 89°45'50" West 576.34 feet, said Point of Beginning bears also South 89°45'50" West 100.17 feet from the most Northerly common corner of said Lots 23 and 24; thence along said East-West centerline and said North line of Lot 24 and the North line of said Lot 23, North 89°45'50" East 522.50 feet to a point which is South 89°45'50" West 224.19 feet from the Northeast corner of said Lot 23; thence leaving last said East-West centerline and North line of Lot 23 and proceeding South 00°14'10" East 298.00 feet to a point which is 225.73 feet distant at right angles from the East line of said Lot 23; thence parallel with and 298.00 feet distant at right angles from said East-West centerline South 89°45'50" West 149.00 feet to a point which is 374.73 feet distant at right angle from said East line; thence South 00°14'10" East 43.50 feet to a point which is 374.95 feet distant at right angles from said East line; thence parallel with and 341.50 feet distant at right angles from said East-West centerline South 89°45'50" West 373.50 feet to a point which is 101.89 feet distant at right angles from the common line of said Lots 23 and 24; thence North 00°14'10" West 341.50 feet to the Point of Beginning. Containing 171,952 square feet (3.95 acres), more or less. SUBJECT TO all easements, road dedications and/or rights-of-way of record.

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Exhibit D