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HomeMy WebLinkAbout2017 CON (LEASE AGREEMENT) TSC Group - Lease of Modular Building (2)LEASE AGREEMENT This Lease Agreement ("Lease") dated April 5, 2017 by and between TSC Group, Inc., a California corporation with its principal place of business at 30732 Via Conquista, San Juan Capistrano, CA 92675 ("Lessor") and City of National City with its principal place of business at 1243 National City Blvd., National City, CA 91950 ("Lessee"). TERMS AND CONDITIONS Lessor hereby demises, leases and lets to Lessee and Lessee hereby rents, leases and hires from Lessor, the Equipment described in Exhibit A attached hereto ("Equipment") in accordance with the following terms and conditions of this Lease. 1. Term. This Lease shall become effective upon the execution by Lessee and Lessor. The term of this Lease ("Lease Term") shall commence on the date the Equipment is accepted by Lessee pursuant to Section 3 hereunder and the Lease Term shall continue until all payments are made in accordance with Exhibit B attached to this Lease. 2. Rent. Lessee agrees to pay to Lessor or its assignee the Lease Payments equal to the amounts specified in Exhibit B. Lease Payments will be due in accordance with the terms specified in Exhibit B. Any payments received later than ten (10) days from the due date will be subject to a late charge equal to five percent of the amount due. The Lease Payments will be payable without notice or demand at the office of the Lessor or such other place as Lessor or its assignee may from time to time designate in writing. The Lease Payment will be absolute and unconditional in all events and will not be subject to any offset, defense, counterclaim, or recoupment for any reason whatsoever. 3. Delivery, Acceptance and Removal. (a) Accelerated Modular Concepts, Inc will cause the Equipment to be delivered to Lessee at the location specified in Exhibit A ("Equipment Location"). Lessee will accept the Equipment as soon as it has been delivered, installed and operational or upon occupancy, whichever is the earlier. Lessee will evidence its acceptance by executing and delivering to Lessor a Delivery and Acceptance Certificate in the form provided by Lessor and attached hereto as Exhibit C. (b) Lessor will remove the Equipment from Lessee's site at the end of the Lease Term or any Lease Extension and Lessee agrees to pay Lessor for these services the amount specified in Exhibit B as "Dismantle and Return Freight". Lessee will be responsible for the restoration of the site. 4. Security Deposit. Lessee shall pay the amount specified in Exhibit B as ("Security Deposit") to be held by Lessor without liability to Lessee for interest, as security for Lessee's performance of the terms and conditions of this Lease, and in furtherance thereof, Lessee hereby grants to Lessor a security interest in the cash from time to time comprising the Security Deposit and all proceeds thereof. In the event of Lessee's default, Lessor may apply the Security Deposit in payment of its cost, expenses and attorney fees in enforcing the terms of this Lease and to indemnify Lessor against any damages sustained by Lessor, provided, however, nothing herein contained shall be construed to mean that the recovery of damages by Lessor shall be limited to the amount of the Security Deposit. In the event all or any portion of the Security Deposit is applied as aforesaid, upon demand Lessee shall deposit additional amounts with Lessor so that the Security Deposit shall always be maintained at its original amount. Provided Lessee is not in default hereunder, upon the termination of this Lease, any unexpended balance of the Security Deposit shall be returned to Lessee. 5. Disclaimer of Warranties. Lessee acknowledges and agrees that the Equipment is of a size, design and capacity selected by Lessee, that the Lessor is neither a manufacturer nor a vendor of such equipment, and that the LESSOR HAS NOT MADE, AND DOES NOT HEREBY MAKE, ANY REPRESENTATION, WARRANTY, OR COVENANT, EXPRESS OR IMPLIED, WITH RESPECT TO THE MERCHANTABILITY, CONDITION, QUALITY, DURABILITY, DESIGN, OPERATION, FITNESS FOR USE, OR SUITABILITY OF THE EQUIPMENT IN ANY RESPECT WHATSOEVER OR IN CONNECTION WITH OR FOR THE PURPOSES AND USES OF LESSEE, OR ANY OTHER REPRESENTATION, WARRANTY, OR COVENANT OF ANY KIND OR CHARACTER, EXPRESS OR IMPLIED, WITH RESPECT THERETO, AND LESSOR SHALL NOT BE OBLIGATED OR LIABLE FOR ACTUAL, INCIDENTAL, CONSEQUENTIAL, OR OTHER DAMAGES OF OR TO 1 LESSEE OR ANY OTHER PERSON OR ENTITY ARISING OUT OF OR IN CONNECTION WITH THE USE OR PERFORMANCE OF THE EQUIPMENT AND THE MAINTENANCE THEREOF. Lessor hereby assigns to Lessee during the Lease Term, so long as no Event of Default has occurred hereunder and is continuing, all manufacturer's warranties, if any, expressed or implied with respect to the Equipment, and Lessor authorizes Lessee to obtain the customary services furnished in connection with such warranties at Lessee's expense. Lessee's sole remedy for the breach of any such manufacturer's warranty shall be against the manufacturer of the Equipment, and not against Lessor, nor shall such matter have any effect whatsoever on the rights and obligations of Lessor with respect to this Lease, including the right to receive full and timely payments hereunder. Lessee expressly acknowledges that Lessor makes, and has made, no representations or warranties whatsoever as to the existence or the availability of such warranties of the manufacturer of the Equipment. 6. Title to Equipment; Security Interest. During the term of this Lease title to the Equipment and any and all additions, repairs, replacements or modifications thereof, will rest in the Lessor, subject to the rights of Lessee under this Lease. In the Event of Default as set forth in paragraph 15, Lessee will peaceably surrender possession of the Equipment to Lessor. Lessor shall have and retain a security interest under the Uniform Commercial Code in the Equipment, the proceeds thereof and any and all repairs, replacements, substitutions and modifications thereto, in order to secure Lessee's payments of all Lease Payments and the performance of all other obligations of Lessee under this Lease. If requested by Lessor, Lessee agrees to execute such additional documents including financing statements, affidavits, notices and similar instruments, in form satisfactory to Lessor which Lessor deems necessary or appropriate to protect its interest in the Equipment and in this Lease. 7. Use; Repairs. Lessee will use the Equipment in a careful manner for the use contemplated by the manufacturer of the equipment will pay all costs, claims, damages, fees and charges arising out of its possession, use or maintenance. Lessee, at its expense will keep the Equipment in good working order and repair and furnish all part, mechanisms and devices required therefor. 8. Alterations. Lessee will not make any alterations, additions or improvements to the Equipment without Lessor's prior written consent unless such alterations, additions or improvements may be readily removed without damage to the Equipment. 9. Location; Inspection. The Equipment will not be relocated from its initial location without the Lessor's prior written consent, which will not be unreasonably withheld. Lessor will be entitled to enter upon the Equipment Location during reasonable business hours to inspect the Equipment or observe its use and operation. Barring an emergency Lessor shall give the Lessee forty-eight (48) hours advance notice and shall not enter the Equipment unless in the presence of an employee of the Lessee. 10. Liens and Taxes. Lessee shall keep the Equipment free and clear of all levies, liens and encumbrances except those created under this Lease. Lessee shall pay, when due, all charges and taxes (local, state and federal) which now or hereafter be imposed upon the ownership, leasing, rental, sale, purchase, possession or use of the Equipment, excluding however, all taxes on or measured by Lessor's income. If Lessee fails to pay said charges and taxes when due, Lessor shall have the right, but shall not be obligated, to pay said charges and taxes. If Lessor pays any of the aforementioned charges or taxes, Lessee shall reimburse Lessor therefor. 11. Risk of Loss; Damage; Destruction. Lessee assumes all risk of loss of or damage to the Equipment from any cause whatsoever, and no such loss of or damage to the Equipment nor defect therein nor unfitness or obsolescence thereof shall relieve Lessee of the obligation to make Lease Payments or to perform any other obligation under this Lease. In the event of damage to any item of Equipment, Lessee will, immediately place the same in good repair with the proceeds of any insurance recovery applied to cost of such repair. If Lessor determines that the Equipment is lost, stolen, destroyed or damaged beyond repair, Lessee, at the option of Lessor, will either (a) replace the same with like equipment in good repair, or (b) on the next Lease Payment date, pay Lessor an amount equal to the applicable replacement cost. In the event that Lessee is obligated to make payment with respect to less than all of the Equipment, Lessor will provide Lessee with the pro rata amount of the Lease Payment and the replacement cost amount to be paid by Lessee with respect to the Equipment which has suffered the event of loss and the Lease shall remain in full force and effect for all remaining Equipment. 2 12. Personal Property, The Equipment is and will remain personal property and will not be deemed to be affixed or attached to real estate of any building thereon. If requested by Lessor, Lessee will, at Lessee's expense, furnish a waiver of any interest in the Equipment from any party having an interest in any such real estate or building. 13. Insurance. Lessee, will, at its own expense, maintain at all times during the Lease Term, all risks coverage including, public liability and property damage insurance with respect to the Equipment in such amounts, covering such risks and with such insurers as shall be satisfactory to Lessor. In no event will the insurance limits be less than the amount of the then applicable replacement cost with respect to such Equipment. Each insurance policy will name Lessee as an insured and Lessor or its assigns as an additional insured, and will contain a clause requiring the insurer to give Lessor at least ten (10) days prior written notice of any alteration in the terms of such policy or the cancellation thereof. Lessee agrees that it shall request its insurance carrier to provide a 30 day written notice, however, should the insurance carrier refuse Lessor agrees this will not constitute a breach of the Lease. The proceeds of any such policies will be payable to Lessee and Lessor or its assigns as their interest may appear. Upon acceptance of the Equipment and upon each insurance renewal date, Lessee will deliver to Lessor a certificate evidencing such insurance. In the event of any loss, damage, injury or accident involving the Equipment, Lessee will promptly provide Lessor with written notice thereof and make available to Lessor all information and documentation relating thereto. 14. Assignment. Without Lessor's prior written consent, Lessee will not either (i) assign, transfer, pledge, hypothecate, grant any security interest in or otherwise dispose of this Lease or the Equipment or any interest in this Lease or the Equipment or (ii) sublet the Equipment. Lessor may assign its rights, title and interest in and to this Lease, the Equipment and any documents executed with respect to this Lease and/or grant or assign a security interest in this Lease and the Equipment, in whole or in part. Any such assignees shall have all of the rights of Lessor under this Lease. Subject to the foregoing, this Lease inures to the benefit of and is binding upon the heirs, executors, administrators, successors, and assigns of the parties hereto. Lessee covenants and agrees not to assert against the assignee any claims or defenses by way of abatement, setoff, counterclaim, recoupment, or the like which Lessee may have against Lessor. Upon assignment of Lessor's interests herein Lessor will cause written notice of assignment to be sent to Lessee which will be sufficient if it discloses the name of the assignee and address to which further payments hereunder should be made. 15. Event of Default. The term "Event of Default," as used herein, means the occurrence of any one or more of the following events: (i) Lessee fails to make any Lease Payment (or any other payment) as it becomes due in accordance with the terms of the Lease, and any such failure continues for ten (10) days after the due date hereof; (ii) Lessee fails to perform or observe any other covenant, condition, or agreement to be performed or observed by it hereunder and such failure is not cured within twenty (20) days after written notice thereof by Lessor; (iii) the discovery by Lessor that any statement, representation, or warranty made by Lessee in this Lease or in writing ever delivered by Lessee pursuant hereto or in connection herewith is false, misleading, or erroneous in any material respect; (iv) proceedings under any bankruptcy, insolvency, reorganization or similar legislation shall be instituted against or by Lessee, or a receiver or similar officer shall be appointed for Lessee or any of its property, and such proceedings or appointments shall not be vacated, or fully stayed, within twenty (20) days after the institution or occurrence thereof; or (v) an attachment, levy or execution is threatened or levied upon or against the Equipment. 16. Remedies. Upon the occurrence of an Event of Default, and as long as such Event of Default is continuing, Lessor may, at its option, exercise any one or more of the following remedies: (i) by written notice to Lessee, declare all unpaid Lease Payments and other charges immediately due and payable and to recover the balance of the Lease Payments and other charges reserved hereunder, with Lessor retaining title to the Equipment; (ii) by written notice to the Lessee, request Lessee to (and Lessee agrees that it will), at Lessee's expense, promptly return the Equipment to Lessor, or Lessor, at its option, may enter upon the premises where the Equipment is located and take immediate possession of and remove the same after 72 hours prior notice to Lessee (iii) sell or lease the Equipment or sublease it for the account of the Lessee, holding Lessee liable for the balance of Lease Payments and other charges reserved hereunder for the balance of the Lease Term and residual value of the Equipment exceeds the net amount received by Lessor from such sale or lease; and (iv) exercise any other right, remedy or privilege which may be available to it under applicable laws of the state of the Equipment location or any other applicable law or proceed by appropriate court action to enforce the terms of the Lease or to recover damages for the breach of this Lease or to rescind this Lease as to any or all of the Equipment. In addition, Lessee will remain liable for all covenants and indemnities under this Lease and for all legal fees and other costs and expenses, including court costs, incurred by Lessor with respect to the enforcement of any of the remedies listed above or any other remedy available to Lessor. 17. Indemnity. Lessee, for itself, its successors, assigns and legal representatives, does hereby, now and for the future, agree to indemnify, defend, save and hold harmless the Lessor, its successors, assigns and legal representatives from and against any and all liability, damages and costs of any kind, nature or extent, including attorney's fees from all manner of action, actions, cause or causes of action, claims, proceedings, suits, debts, sums of money, claims, accounts, bonds, bills, specialties, controversies, judgments, assessments, penalties, for or on account of personal injuries, death or property damage, and all demands whatsoever, at law or in equity, arising directly or indirectly out of, or in connection with, Lessee's or any of Lessee's employees, agents, or servants, and including all third parties' use, occupation or presence in, on or about the Equipment leased hereunder. In the event Lessee shall receive notice of any claim, suit or action for personal injury, death or property damage, Lessee shall provide prompt written notification thereof to Lessor. In the event of commencement of any suit, action or proceeding, Lessee shall immediately assume the defense of Lessor at its sole cost and expense and shall wholly indemnify Lessor as provided herein. 18. Notices. All notices to be given under this Lease shall be made in writing and mailed by certified mail, return receipt requested, to the other party at its address set forth herein or at such address as the party may provide in writing from time to time. Any such notice shall be deemed to have been received five (5) days subsequent to mailing. 19. Section Headings. All section headings contained herein are for the convenience of reference only and are not intended to define or limit the scope of any provision of this Lease. 20. Governing Law. This Lease shall be construed in accordance with, and governed by the laws of, the State of California. 21. Delivery of related Documents. Lessee will execute or provide, as requested by Lessor, such other documents and information as are reasonably necessary with respect to the transaction contemplated by this Lease provided there is no cost to the Lessee, the documents comport with Law as approved by Lessee's legal counsel, and the documents do not change the substance of the original transaction. 22. Entire Agreement; Waiver. This Lease and other attachments hereto, and other documents or instruments executed by Lessee and Lessor in connection herewith, constitute the entire agreement between the parties with respect to the lease of the Equipment, and this Lease shall not be modified, amended, altered or changed except with the written consent of Lessee and Lessor. Any provision of this Lease found to be prohibited by law shall be ineffective to the extent of such prohibition without invalidating the remainder of the Lease. The waiver by Lessor of any breach by Lessee of any term, covenant or condition hereof shall not operate as a waiver of any subsequent breach thereof. 23. Use of Equipment. The Lessee will use the Equipment in a manner contemplated by this Lease and shall comply with all applicable laws and ordinances and pay all claims, damages, fees and charges arising out of its possession, use or maintenance. The Lessee, at its expense, shall be responsible for and shall pay all charges for the maintenance of the Equipment. Lessee further agrees to be the sole operator and end user of the Equipment described under this Lease. 24. Taxes and Other Governmental Charges. In the event the Equipment is found to be subject to taxation in any form, the Lessee will pay as the same respectively becomes due, all taxes and governmental charges of any kind whatsoever together with any interest and penalties that may at any time be lawfully assessed or levied against or with respect to the Equipment including but not limited to the ownership, leasing, rental, sale, purchase or possession thereof (excluding however, all taxes on or measured by the Lessor's or its assigns income) and any or other property acquired by the Lessee in substitution for, as a renewal or replacement of, or as a modification improvement, or addition to the Equipment, as well as all other charges incurred in the 4 operation, maintenance, use and upkeep of the Equipment; provided that with respect to any governmental charges that may lawfully be paid in installments over a period of years, the Lessee shall be obligated to pay only such installments as are required to be paid during the Lease Term. Upon the expiration or earlier termination of this Lease, the Lessee shall pay to the Lessor or its assigns any ad valorem, personal property or excise taxes assessed but not yet due and payable. 25. Filings. The Lessee authorizes the Lessor to make the Lessor's security interest a matter of public record by filings of any documents the Lessor deems necessary for that purpose and Lessor shall be responsible for any costs associated therewith. The Lessee agrees to sign or execute such documents to evidence its consent to such filings as long as there is no cost to Lessee and the documents are approved by Lessee's attorney. 26. Financial Statements. Lessee agrees to provide Lessor with a copy of its financial statements within ninety (90) days of Lessee's year end 27. Lease Extension Option. Provided Lessee is not then in default, Lessee shall have the option extend the term of this Lease at a rental rate set forth in Exhibit B as "Lease Extension Option". Notice of Lessee's intent to exercise the Lease Extension Option shall be given to Lessor in writing not less than three (3) months prior to the expiration of the Initial Term or any Lease Extension. 28. Purchase Option. Lessee shall have the option to purchase the Equipment at the end of the Lease Term for the amount set forth in Exhibit B "Purchase Option" providing (i) Lessee is not in default under the Lease; and (ii) Lessee gives notice to Lessor of its intention to exercise this option at lease sixty (60) days prior to the expiration of the Lease. IN WITNESS WHEREOF, the parties have executed this Lease as of the 1st day of May 2017. LESSOR: TSC GROUP, INC. 2) BY: TITLE: President ADDRESSES FOR NOTICES UNDER THIS LEASE: 30732 Via Conquista San Juan Capistrano, CA 92675 Approv_ BY . Morris—Jone Cif ' torney City of National City LESSEE: CITY OF NATIONAL CITY BY1� Leslie Deese TITLE: City Manager ADDRESSES FOR NOTICES UNDER THIS LEASE: 1243 National City Blvd National City, CA 91950 5 EXHIBIT A TO LEASE AGREEMENT EQUIPMENT SCHEDULE RE: Lease Agreement dated April 5, 2017 between TSC Group, Inc. ("Lessor") and City of National City ("Lessee"). The Equipment consists of the following units: Description: (1) 28' x 68' refurbished modular building. Serial numbers BMO9161 and BMD 9162. Manufacturer: Brandall Modular Corp. Dealer: Accelerated Modular Concepts, Inc., Location: 2005E. 4th Street, National City, CA 91950 Lessor: TSC Group, Inc. By: Title: President Lessee: City of National City Title: 6 EXHIBIT B TO LEASE AGREEMENT LEASE PAYMENT SCHEDULE RE: Lease Agreement dated April 5, 2017 between TSC Group, Inc. ("Lessor") and City of National City INITIAL LEASE TERM: 12 months LEASE PAYMENT: Monthly lease payments of $2,117.50 plus any applicable sales and/or use tax commencing upon the Acceptance Date and continuing for twelve (12) months from the Acceptance Date. LEASE EXTENSION OPTION: Lessee may, at its option, renew the Lease at the expiration of the Initial Term for additional twelve (12) month periods ("Lease Extension") at $2,117.50 per month plus any applicable California sales and/or use tax. UP FRONT FEES: Delivery, set-up, tie downs, skirting, plumbing and electrical connections and general conditions of $35,936 to be paid directly to Accelerated Modular Concepts, Inc. under separate contract. DISMANLE AND RETURN FREIGHT: $6,966 plus applicable California sales and/or use tax. SECURITY DEPOSIT: None PURCHASE OPTION: Purchase price to be negotiated by Lessor and Lessee. ACCEPTANCE DATE: The date set forth in Exhibit C, Delivery and Acceptance Certificate. LEASE PAYMENT: The first month's Lease Payment shall be due and payable upon execution of the Lease. The second full Lease Payment will be due and payable on the first day of the month following the Acceptance Date and thereafter, all Lease Payments will be due on the first day of the month in advance. If the first day of the month during the term of the Lease is not a business day the Lease Payment shall be on the next subsequent business day. Lessor: TSC Group, Inc. - By: Title: President Lessee: City of National City 1L Title: Cf I ra;< 1a `i _ 7 EXHIBIT C TO LEASE AGREEMENT DELIVERY AND ACCEPTANCE CERTIFICATE RE: Lease Agreement dated April 5, 2017 between TSC Group, Inc. ("Lessor") and City of National City ("Lessee"). Equipment Description: (1) 28' x 68' modular building. Serial number BMO9161 and BMD9162. The undersigned Lessee hereby acknowledges receipt of the Equipment described above (the "Equipment") as fully installed and in good working condition and Lessee hereby accepts the Equipment after full inspection thereof as satisfactory for all purposes of the Lease Agreement dated April 5, 2017 executed by Lessor and Lessee. Lessee agrees to make payments, as set forth on Exhibit B Lease Payment Schedule, beginning on the Acceptance Date shown below. ACCEPTED BY: TITLE: DATE ACCEPTED: ("Acceptance Date") 8 CERTIFICATE NO. ISSUE DATE (MM/DD/YYYY) GL1-7148 Al CERTIFICATE OF COVERAGE 04/02/2018 CSAC Excess Insurance Authority CIO ALLIANT INSURANCE SERVICES, INC. PO BOX 6450 NEWPORT BEACH, CA 92658-6450 PHONE (949) 756-0271 / FAX (619) 699-0901 LICENSE #0C36861 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BELOW. THIS CERTIFICATE OF COVERAGE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER. IMPORTANT: If the certificate holder is an ADDITIONAL INSURED and/or requesting a WAIVER OF SUBROGATION, the Memorandums of Coverage must be endorsed. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s). COVERAGE AFFORDED A - CSAC Excess Insurance Authority Member: CITY OF NATIONAL CITY STACEY STEVENSON 1243 NATIONAL CITY BLVD. NATIONAL CITY, CA 91950 COVERAGE AFFORDED B COVERAGE AFFORDED C COVERAGE AFFORDED D Coverages THIS IS TO CERTIFY THAT THE MEMORANDUMS OF COVERAGE LISTED BELOW HAVE BEEN ISSUED TO THE MEMBER NAMED ABOVE FOR THE PERIOD INDICATED, NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN. THE COVERAGE AFFORDED BY THE MEMORANDUMS DESCR BED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS, AND CONDITIONS OF SUCH MEMORANDUMS. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. CO LTR TYPE OF COVERAGE MEMORANDUM NUMBER COVERAGE EFFECTIVE DATE (MM/DD/YYYY) COVERAGE EXPIRATION DATE (MM/DD/YYYY) LIABILITY LIMITS A EIA-PE 17 EL-102 07/01/2017 07/01/2018 $1,000,000 Limits inclusive of the Members Self -Insured Retention of $250,000 x General Liability Descrip ion of Operations/Locations/Vehicles/Special Items: AS RESPECTS AGREEMENT BETWEEN CITY OF NATIONAL CITY AND TSC GROUP, INC. FOR LEASE OF ONE (1) 28' X 68' REFURBISHED MODULAR BUILDING, SERIAL NUMBERS BM09161 AND BMD 9162 AT 2005 E 4TH STREET, NATIONAL CITY, CA 91950. TSC GROUP, INC. OR ITS ASSIGNS ARE INCLUDED AS ADDITIONAL COVERED PARTIES, BUT ONLY INSOFAR AS THE OPERATIONS UNDER THIS CONTRACT ARE CONCERNED. Certificate Holder TSC GROUP, INC. 30732 VIA CONQUISTA SAN JUAN CAPISTRANO, CA 92675 Cancellation SHOULD ANY OF THE ABOVE DESCRIBED MEMORANDUMS OF COVERAGES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, NOTICE WIL BE DELIVERED IN ACCORDANCE WITH THE MEMORANDUMS OF COVERAGE PROVISIONS. AUTHORIZED REPRESENTATIVE CSAC EXCESS INSURANCE AUTHORITY PAGE 1 OF 2 ENDORSEMENT NO. U-1 CSAC EXCESS INSURANCE AUTHORITY GENERAL LIABILITY 1 ADDITIONAL COVERED PARTY AMENDATORY ENDORSEMENT It is agreed that the `Covered Party, Covered Persons or Entities" section of the Memorandum is amended to include the person or organization named on the Certificate of Coverage, but only with respect to liability arising out of premises owned by or rented to the Member, or operations performed by or on behalf of the Member or such person or organization so designated. Coverage provided under this endorsement is limited to the lesser of the limits stated on the Certificate of Coverage or the minimum limits required by contract. ADDITIONAL COVERED PARTY: NAME OF PERSON OR ORGANIZATION SCHEDULED PER ATTACHED CERTIFICATE OF COVERAGE AS RESPECTS: PER ATTACHED CERTIFICATE OF COVERAGE It is further agreed that nothing herein shall act to increase the Authority's limit of liability. This endorsement is part of the Memorandum and takes effect on the effective date of the Memorandum unless another effective date is shown below. All other terms and conditions remain unchanged. Effective Date: Memorandum No.: PER ATTACHED CERTIFICATE OF COVERAGE Issue Date: June 26, 2017 4d/k/ Authorized Representati CSAC Excess Insurance PAGE 2 OF 2 CERTIFICATE NUMBER PROP-2413 EVIDENCE O F PROPERTY COVERAGE ISSUE DATE (MM/DD/YYYY) 04/02/2018 THIS EVIDENCE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE ADDITIONAL INTEREST. THIS EVIDENCE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BELOW. THIS EVIDENCE OF COVERAGE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER, AND ADDITIONAL INTEREST. CSAC Excess Insurance Authority (CSAC EIA) C/O ALLIANT INSURANCE SERVICES, INC. PO BOX 6450 NEWPORT BEACH, CA 92658-6450 PHONE (949) 756-0271 / FAX (619) 699-0901 LICENSE #0C3686 COVERAGE AFFORDED BY: A - CSAC Excess Insurance Authority COVERAGE AFFORDED BY: B - MEMBER CITY OF NATIONAL CITY STACEY STEVENSON 1243 NATIONAL CITY BLVD. NATIONAL CITY, CA 91950 TOWER NUMBER VI MEMORANDUM NUMBER EIAPPR18-21 EFFECTIVE DATE (MM/DD/YYYY) 03/31/2018 EXPIRATION DATE (MM/DD/YYYY) 03/31/2019 CONT. UNTIL TERMINATED IF CHECKED ❑ THIS REPLACES PRIOR EVIDENCE: PROPERTY INFORMATION LOCATION I DESCRIPTION AS RESPECTS AGREEMENT BETWEEN CITY OF NATIONAL CITY AND TSC GROUP, INC. FOR LEASE OF ONE (1) 28' X 68' REFURBISHED MODULAR BUILDING, SERIAL NUMBERS BM09161 AND BMD 9162 AT 2005 E 4TH STREET, NATIONAL CITY, CA 91950. TSC GROUP, INC. OR ITS ASSIGNS ARE NAMED AS LOSS PAYEE AS THEIR INTEREST MAY APPEAR. THIS IS TO CERTIFY THAT THE MEMORANDUMS OF COVERAGE LISTED ABOVE HAVE BEEN ISSUED TO THE MEMBER NAMED ABOVE FOR THE PERIOD INDICATED, NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS EVIDENCE MAY BE ISSUED OR MAY PARTAIN. THE COVERAGE AFFORED BY THE MEMORANDUMS DESCRIBED HEREIN IS SUBJECT TO ALL TERMS, EXCLUSIONS, AND CONDITIONS OF SUCH MEMORANDUMS. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. COVERAGE INFORMATION COVERAGE / PERILS / FORMS AMOUNT OF INSURANCE ALL RISK OF DIRECT PHYSICAL LOSS OR DAMAGE, INCLUDING FLOOD. EARTHQUAKE IS EXCLUDED. EARTHQUAKE LIMIT IS NOT APPLICABLE. REPAIR OR REPLACEMENT COST VALUATION SUBJECT TO MEMORANDUM OF COVERAGE PROVISIONS VEHICLE/BUSES ARE SUBJECT TO ACTUAL CASH VALUE OR REPLACEMENT COST PER SCHEDULE ON FILE WITH THE AUTHORITY ALL LIMITS ARE SHARED. $25,000,000 PER OCC FOR ALL RISK AND ANN AGG FOR FLOOD $25,000,000 PER OCC/ANN AGG FOR EARTHQUAKE REMARKS (INCLUDING SPECIAL CONDITIONS) DEDUCTIBLES: ALL RISK OF DIRECT PHYSICAL LOSS OR DAMAGE (EXCLUDING FLOOD AND EARTHQUAKE): $5,000 PER OCCURRENCE AS PER SCHEDULE ON FILE WITH THE AUTHORITY FLOOD: $25,000 EXCEPT FOR CRITICAL FLOOD (LOCATIONS IN FEMA FLOOD ZONE A OR V) DEDUCTIBLE IS $100,000 VEHICLES AND MOBILE EQUIPMENT IF COVERAGE IS SCHEDULED AND PURCHASED, DEDUCTIBLE APPLIES PER SCHEDULE ON FILE WITH THE AUTHORITY. CANCELLATION_' . 'lr»,,,..,.','..tki. `-,>,, .. ,.....�� ,.�:�.., .--, SHOULD ANY OF THE ABOVE DESCRIBED MEMORANDUM(S) OF COVERAGE BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE MEMORANDUM(S) OF COVERAGE PROVISIONS. ADDITIONAL INTEREST NAME AND ADDRESS NATURE OF INTEREST TSC GROUP, INC. 30732 VIA CONQUISTA MORTGAGEE SAN JUAN CAPISTRANO, CA 92675 X LOSS PAYEE (OTHER) AUTHORIZED REPRESENTATIVE CSAC EXCESS INSURANCE AUTHORITY S.F. FORM Form 438BFU NS (Rev. May 1, 1942) X LENDER'S LOSS PAYABLE ENDORSEMENT 1. Loss or damage, if any, under this policy, shall be paid to the Payee named on the first page of this policy, its successors and assigns, hereinafter referred to as "the Lender", in whatever form or capacity its interests may appear and whether said interest be vested in said Lender in its individual or in its disclosed or undisclosed fiduciary or representative capacity, or otherwise, or vested in a nominee or trustee of said Lender. 2. The insurance under this policy, or any rider or endorsement attached thereto, as to the interest only of the Lender, its successors and assigns, shall not be invalidated nor suspended: (a) by any error, omission, or change respecting the ownership, description, possession, or location of the subject of the insurance or the interest therein, or the title thereto; (b) by the commencement of foreclosure proceedings or the giving of notice of sale of any of the property covered by this policy by virtue of any mortgage or trust deed; (c) by any breach of warranty, act, omission, neglect, or non-compliance with any of the provisions of this policy, including any and all riders now or hereafter attached thereto, by the named insured, the borrower, mortgagor, trustor, vendee, owner, tenant, warehouseman, custodian, occupant, or by the agents of either or any of them or by the happening of any event permitted by them or either of them, or their agents, or which they failed to prevent, whether occurring before or after the attachment of this endorsement, or whether before or after a loss, which under the provisions of this policy of insurance or of any rider or endorsement attached thereto would invalidate or suspend the insurance as to the named insured, excluding herefrom, however, any acts or omissions of the Lender while exercising active control and management of the property. 3. In the event of failure of the insured to pay any premium or additional premium which shall be or become due under the terms of this policy or on account of any change in occupancy or increase in hazard not permitted by this policy, this Company agrees to give written notice to the Lender of such non-payment of premium after sixty (60) days from and within one hundred and twenty (120) days after due date of such premium and it is a condition of the continuance of the rights of the Lender hereunder that the Lender when so notified in writing by this Company of failure of the insured to pay such premium shall pay or cause to be paid the premium due within ten (10) days following receipt of the Company's demand in writing therefore. If the Lender shall decline to pay said premium or additional premium, the rights of the Lender under this Lender's Loss Payable Endorsement shall not be terminated before ten (10) days after receipt of said written notice by the Lender. 4. Whenever this Company shall pay to the Lender any sum for loss or damage under this policy and shall claim that as to the insured no liability therefore exists, this Company, at its option, may pay to the Lender the whole principal sum and interest and other indebtedness due or to become due from the insured, whether secured or unsecured, (with refund of all interest not accrued), and this Company, to be extent of such payment, shall thereupon receive a full assignment and transfer, without recourse, of the debt and all rights and securities held as collateral thereto. 5. If there be any other insurance upon the within described property, this Company shall be liable under this policy as to the Lender for the proportion of such loss or damage that the sum hereby insured bears to the entire insurance of similar character on said property under policies held by, payable to and expressly consented to by the Lender. Any Contribution Clause included in any Fallen Building Clause Waiver or any Extended Coverage Endorsement attached to this contract of insurance is hereby nullified, and also any Contribution Clause in any other endorsement or rider attached to this contract of insurance is hereby nullified except Contribution Clauses for the compliance with which the insured has received reduction in the rate charged or has received extension of the coverage to include hazards other than fire and compliance with such Contribution Clause is made a part of the consideration for insuring such other hazards. The Lender upon the payment to it of the full amount of its claim, will subrogate this Company (pro rata with all other insurers contribution to said payment) to all of the Lender's rights of contribution under said other insurance. 6. This Company reserves the right to cancel this policy at any time, as provided by its items, but in such case this policy shall continue in force for the benefit of the Lender for then (10) days after written notice of such cancellation is received by the Lender and shall then cease. 7. This policy shall remain in full force and effect as to the interest of the Lender for a period of ten (10) days after its expiration unless an acceptable policy in renewal thereof with loss thereunder payable to the Lender in accordance with the terms of this Lender's Loss Payable Endorsement, shall have been issued by some insurance company and accepted by the Lender. 8. Should legal title to and beneficial ownership of any of the property covered under this policy become vested in the Lender or its agents, insurance under this policy shall continue for the term thereof for the benefit of the Lender but, in such event, any privileges granted by this Lender's Loss Payable Endorsement which are not also granted the insured under the terms and conditions of this policy and/or under other riders or endorsements attached thereto shall not apply to the insurance hereunder as respects such property. 9. All notices herein provided to be give by the Company to the Lender in connection with this policy and this Lender's Loss Payable Endorsement shall be mailed to or delivered to the Lender at its office or branch described on the first page of the policy. Approved: Board of Fire Underwriters of the Pacific, Califomia Bankers' Association Committee on Insurance