EXHIBIT 10.40
LEASE AGREEMENT
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THIS LEASE AGREEMENT ("Lease") is made as of the 13th day of October, 1997
("Effective Date") by and between ELECTRONIC ARTS INC., a Delaware corporation
("Landlord"), and Xxxx Xxxxxxxxxxx ("Tenant").
ARTICLE 1: PREMISES
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1.1 Premises. The "Premises" consist of that single family residence
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located at 00 Xxxxxx Xxxxx in Woodside, California and the associated real
property shown more particularly on Exhibit A attached hereto.
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ARTICLE 2: TERM
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2.1 Term. The term ("Term") of this Lease shall commence on the Effective
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Date and shall terminate on October 31, 2002 ("The Expiration Date"), unless
sooner terminated as provided for elsewhere herein.
ARTICLE 3: RENT
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3.1 Rent. Tenant shall pay to Landlord rent ("Rent") in the amount of
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Seven Thousand Five Hundred and No/100 Dollars ($7,500.00) per month in advance,
without notice, demand, offset or deduction, on the first day of each calendar
month, commencing November 1, 1997.
3.2 Late Charge and Interest. The late payment by Tenant of the Rent will
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cause Landlord to incur additional costs, including, without limitation,
administration and collection costs and processing and accounting expenses and
additional increased debt service. If Landlord has not received any
installment of the Rent on the date such amount is due, Tenant shall immediately
pay Landlord a late charge of five percent (5%) of the delinquent amount, which
is agreed to represent a reasonable estimate of the costs incurred by Landlord.
In addition, all such delinquent amounts shall bear interest from the date such
amount was due until paid in full at a rate per annum equal to ten percent (10%)
("Interest Rate") per annum; provided, in no event shall the interest due
hereunder exceed the maximum interest rate permitted by law which may be charged
under such circumstances.
ARTICLE 4: REAL PROPERTY TAXES
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4.1 Real Property Taxes. Landlord shall pay as and when due any and all
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real property taxes, levies and charges assessed against the Premises and coming
due during the Term of this Lease. Tenant agrees to promptly provide Landlord
with copies of any real property tax bills for the Premises received by Tenant
during the Term hereof.
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ARTICLE 5: SECURITY DEPOSIT
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5.1 Security Deposit. Upon the request of Landlord at any time during the
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Term, Tenant shall deposit with Landlord the sum of Seven Thousand Five Hundred
and No/100 Dollars ($7,500.00) as a security deposit ("Security Deposit") to
secure performance of Tenant's obligations hereunder. If Tenant fails to pay
Rent or fails to perform an obligation under this Lease, Landlord may apply the
Security Deposit to the payment of Rent or any other sum which Landlord may
become obligated to pay by reason of Tenant's failure to perform any obligation
under this Lease, or to compensate Landlord for any reasonable loss or damage or
costs for repair and clean up which Landlord may suffer by reason of such
failure. If Landlord so applies the Security Deposit, Tenant shall, within five
(5) days after written demand, deposit with Landlord an amount sufficient to
restore the Security Deposit to its full, original amount. Landlord shall not
be required to keep the Security Deposit separate from its general accounts or
to pay interest thereon to Tenant. Upon expiration of the Term or, if later
vacation of the Premises by Tenant, Landlord shall pay to Tenant the amount of
the Security Deposit then remaining.
ARTICLE 6: MAINTENANCE AND REPAIR
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6.1 Tenant's Representations. Tenant represents to Landlord that he has
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had the opportunity to and has inspected the Premises. Excepting only those
conditions reported to Landlord prior to execution hereof, Tenant accepts the
Premises "as is".
6.2 Landlord's Obligations. Landlord shall have no obligation to perform
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or pay for ordinary maintenance of or repairs to the Premises. Repair of damage
to the Premises from causes for which Landlord is required to maintain insurance
pursuant to Section 9.3 below shall be made by Landlord and the deductible
amounts, if any, for such repairs shall be paid by Landlord.
6.3 Tenant's Obligations. Tenant, at Tenant's expense, shall maintain the
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Premises and every part thereof in good order, condition and repair. In
connection therewith, Tenant shall, throughout the Term of this Lease, maintain
at Tenant's expense, maintenance contracts reasonably satisfactory to Landlord
for the pool, lawn and landscaping on the Premises. If Tenant fails to perform
Tenant's obligations under this Xxxxxxxxx 0.0, Xxxxxxxx may enter upon the
Premises after thirty (30) days' prior written notice to Tenant (except in the
case of emergency, in which case no notice shall be required) and perform such
obligations on Tenant's behalf; the cost thereof, together with interest thereon
at the Interest Rate, shall be due and payable to Landlord with the Rent
installment next due.
ARTICLE 7: SECURITY MEASURES
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7.1 Security Measures. Landlord shall have no obligation whatsoever to
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provide security measures for the benefit of the Premises. Tenant assumes all
responsibility for the protection of Tenant and his invitees and the property of
Tenant and his invitees against acts of third parties.
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ARTICLE 8: ALTERATIONS
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8.1 Alterations. The term "Alterations" means alterations, improvements,
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additions, removals of such alterations, improvements or additions, including
but not limited to temporary structures, but excluding personal property of
Tenant. "Alterations" shall exclude cosmetic changes to the interior of the
Premises without regard to cost.
8.2 Alterations by Tenant. Tenant shall not make any Alterations to the
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Premises that are structural in nature, that change the cosmetic image of the
exterior of the Premises or that cost more than Five Thousand Dollars
($5,000.00) each without Landlord's prior written consent. Such Alternations
approved by Landlord are hereinafter referred to as "Approved Alterations".
Alterations made by Tenant that have not been approved as provided herein are
hereinafter referred to as "Unapproved Alterations." All Alterations shall
become the property of Landlord when installed. Landlord may, at the expiration
or termination of the Term and unless Tenant has exercised the Option described
in Section 15 below, require Tenant, at Tenant's expense, to remove immediately
any and all Unapproved Alterations made by Tenant without Landlord's prior
approval and to restore the premises to their condition prior to the making of
such Unapproved Alterations. Unapproved Alterations shall, upon termination of
this Lease, be subject to Paragraph 13. In the event that Tenant does not
exercise the Option described in Article 15 below or in the event that such
Option terminates, Landlord shall reimburse Tenant for the lesser of the amounts
actually approved by Landlord for such Approved Alterations or the actual costs
to Tenant of such Approved Alterations.
ARTICLE 9: LIABILITY AND INSURANCE
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9.1 Liability. Tenant shall indemnify, defend and hold Landlord harmless
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from and against all losses, claims, suits, judgments, liabilities, damages,
costs and expenses, including without limitation reasonable attorneys' and
experts' fees and expenses and court costs (collectively, "Liabilities"), which
arise directly and indirectly out of Tenant's use of the Premises, any breach of
or any default in the performance of Tenant's obligations under this Lease or
the breach of any representation or warranty made by Tenant in connection with
this Lease, any discharge, leakage, spillage, emission or pollution of any type
(including gasoline) upon or from the Premises or on any other property arising
out of or in any way connected with Tenant's use or occupancy of the Premises,
or any act or omission of Tenant or any of Tenant's invitees; provided, however,
that Tenant shall not be liable for Liabilities caused by the sole, active
negligence or willful misconduct of Landlord. Upon notice from Landlord, Tenant
shall defend Landlord against Liabilities at Tenant's expense by counsel
reasonably satisfactory to Landlord and Landlord shall cooperate with Tenant in
such defense.
TENANT HEREBY ASSUMES ALL RISK, WAIVES ANY CLAIMS AGAINST AND RELEASES
LANDLORD FROM LIABILITY, AND AGREES THAT LANDLORD SHALL NOT BE LIABLE TO TENANT
FOR CONSEQUENTIAL DAMAGES OR FOR DAMAGE TO THE PROPERTY OF TENANT, TENANT'S
INVITEES OR OF THIRD PARTIES OR FOR INJURY TO OR THE DEATH OF TENANT, ANY OF
TENANT'S INVITEES OR ANY OTHER PERSON IN OR ABOUT THE PREMISES UNLESS CAUSED BY
THE SOLE, ACTIVE NEGLIGENCE OR WILLFUL MISCONDUCT OF LANDLORD.
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9.2 Insurance to be Maintained by Tenant. Tenant shall, at Tenant's
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expense, obtain and keep in force the following:
(i) A policy of comprehensive general liability insurance, having a
combined single limit of not less than One Million Dollars ($1,000,000) per
occurrence, from an insurance company acceptable to Landlord; and
(ii) A policy or policies, including the basic form, broad form and special
form of coverage, including vandalism and malicious mischief, theft, sprinkler
leakage and water damage coverage in an amount equal to the full replacement
value, new without deduction for depreciation, of all Landlord's fixtures,
furniture and equipment in the Premises, and all Alterations to the Premises
installed on the Premises.
The policies shall name landlord as an additional insured. Tenant shall deliver
to Landlord for Landlord's approval certificates of such insurance no later than
seven (7) days prior to the Commencement Date (or date of possession of the
Premises if earlier). The limits of such insurance shall not limit the
liability of Tenant hereunder.
9.3 Insurance to be Maintained by Landlord. Landlord shall, at Landlord's
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expense, obtain and keep in force a policy or policies, including the basic
form, broad form and special form of coverage including vandalism and malicious
mischief, theft, sprinkler leakage and water damage coverage in an amount equal
to the full replacement value, new without deduction for depreciation, of the
residence located on the Premises.
ARTICLE 10: ASSIGNMENT AND SUBLEASING
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10.1 Personal Nature of Lease. This Lease is personal to Tenant. As
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such, Tenant has no right to assign or permit any other person or entity to use
this Lease in whole or in part. Notwithstanding the foregoing, in the event of
the death of Tenant during the Term hereof, Tenant's spouse may occupy the
Premises subject to the terms of this Lease Agreement for the period referred to
in Section 11.3 and may exercise the Option to purchase the Premises on the
basis of the terms of and applicable to Section 15.
ARTICLE 11: DEFAULT AND REMEDIES
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11.1 Default. The occurrence of any one or more of the following events
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shall constitute a material default of this Lease by Tenant.
(a) The failure by Tenant to make any payment of Rent or any other
payment required to be made by Tenant hereunder within (5) days of receipt of
written notice from Landlord therefor; or
(b) Except as otherwise provided in this Lease, the failure by Tenant
to observe or perform any of Tenant's obligations under this Lease, other than
described in paragraph (a) above, where such failure shall continue for a period
of ten (10) days after delivery of written notice of demand therefor from
Landlord to Tenant; provided, however, that
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if the nature of Tenant's noncompliance is such that more than ten (10) days are
reasonably required for its cure, then Tenant shall not be deemed to be in
default hereof if Tenant, in good faith, has commenced such cure within said ten
(10) day period and thereafter diligently prosecutes such cure to completion.
11.2 Remedies. In the event of a default by Tenant, Landlord may, at any
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time thereafter, exercise any right or remedy Landlord may have at law or
equity.
11.3 Termination of Employment. Notwithstanding anything to the contrary
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herein, in the event of any termination of Landlord's employment of Tenant, this
Lease shall terminate, and Tenant shall surrender the Premises to Landlord in
the condition required hereunder within:
(a) four (4) months of the effective date of the termination of Tenant's
employment, if such employment is terminated for any reason by Tenant, and
(b) six (6) months of the effective date of the termination of Tenant's
employment if such employment is terminated for any reason by Landlord.
In the event that the period described in this Section 11.3 shall extend beyond
the Termination Date, then the Term shall be deemed extended for such period,
and of the rights and obligations of the parties set forth herein, including
Tenant's obligations to pay Rent, shall continue for such period.
ARTICLE 12: LANDLORD'S ENTRY
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12.1 Landlord's Access. Upon twenty-four (24) hours notice to the Tenant,
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Landlord shall have the right to enter the Premises at reasonable times for the
purpose of inspecting the same, showing the same to prospective purchasers,
lenders or others (during the last sixty (60) days of the Lease, if Tenant has
not exercised the Option only), or exercising any of Landlord's rights
hereunder. In the event of an emergency, Landlord shall have the right to
perform all such actions as Landlord shall deem necessary on the Premises at any
time. All activities of the Landlord undertaken pursuant to this paragraph
shall not grant to Tenant, and Tenant hereby waives, any right of abatement of
the Rent or other claim for liability against Landlord.
ARTICLE 13: SURRENDER
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13.1 Return of Premises. Landlord, may, by delivery of written notice to
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Tenant no later than ten (10) days prior to the date of expiration or earlier
termination of this Lease, require Tenant to remove, at Tenant's expense and on
or before the expiration or earlier termination of this Lease, any or all
Unapproved Alterations made to the Premises by Tenant.
ARTICLE 14: TRANSFER OF PREMISES
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14.1 Transfer of Premises. In the event of a transfer of Landlord's title
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or interest in the Premises, then, provided the transferee agrees to be bound by
the terms of this Lease
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Agreement, including the Option to purchase, from and after the date of such
transfer, Landlord herein named (or, in case of any subsequent transfers, the
then grantor) shall be relieved of all liability as respects Landlord's
obligations thereafter to be performed, provided that any funds held by Landlord
(or the then grantor) in which Tenant has an interest shall be delivered to the
grantee. Subject to the foregoing, the obligations to be performed herein by
Landlord shall be binding on Landlord and Landlord's successors and assigns only
during their respective periods of ownership of the Premises.
ARTICLE 15: OPTION TO PURCHASE
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15.1 Option. Provided that (i) Tenant is not then in default hereunder,
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and (ii) Tenant is residing in and has not vacated the Premises, Tenant shall
have an exclusive option (the "Option") to purchase the Premises during the time
period commencing on April 1, 2000 and ending on the Expiration Date by
providing Landlord with written notice thereof at least thirty (30) days (and no
more than sixty (60) days) in advance. Upon Tenant's giving such written notice
to Landlord, this Option shall become a contract for the purchase and sale of
the Premises, and Landlord shall thereupon sell the Property including all
Alterations to Tenant at a purchase price equal to the price for which Landlord
purchased the Premises, plus the cost of any capital improvements made to the
Premises at any time by Landlord (together "Costs"). Landlord shall pay the
costs of title insurance, real property taxes accrued to the date of closing,
and repairs required as a condition to closing by law or by a third party, and
Tenant shall pay any and all other expenses associated with such purchase and
sale of the Premises, including but not limited to escrow fees, transfer taxes
and recording fees. Upon completion of the purchase and sale, all obligations
of the Tenant for Rent, except for arrears for any period preceding the
completion date, shall terminate.
ARTICLE 16: DAMAGE OR DESTRUCTION OF PREMISES
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16.1. Termination Upon Damage or Destruction. In the event that the
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Premises or any substantial part thereof shall during the Term be damaged or
destroyed by fire, earthquake or flood or otherwise damaged so as to render the
same unfit for the purposes of habitation then, upon written notice from Tenant
to Landlord, this Lease Agreement shall immediately terminate without further
liability of Tenant to pay future Rent owing.
ARTICLE 17: MISCELLANEOUS
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17.1 Attorney's Fees. If either party shall bring an action or proceeding
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against the other party to enforce the terms of this Lease or to declare their
respective right hereunder, the losing party shall pay the reasonable attorneys'
and experts' fees and expenses and court costs of the party prevailing in the
such action, proceeding, or trial or appeal thereof.
17.2 Notices. All notices shall be in writing and shall be deemed to have
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been given when delivered personally or deposited in the United States mail,
registered or certified, postage prepaid, and addressed as follows:
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To Landlord: To Tenant:
Electronic Arts Inc. 00 Xxxxxx Xxxxx
0000 Xxxxxxx Xxxxxx Xxxxxxxxx Xxxxxxxx, Xxxxxxxxxx 00000
Xxx Xxxxx, Xxxxxxxxxx 00000
Attention: Vice President, Finance
Either party may change the address for notices or Landlord may change the
address for payments by giving the other party notice to that effect.
17.3 No Waiver. No waiver by Landlord or Tenant of any provision hereof
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shall be deemed a waiver of any other provision hereof or of any subsequent
breach by Tenant or Landlord, as the case may be, of the same or any other
provision, nor shall any custom or practice which may grow up between Landlord
and Tenant in the administration of this Lease be construed to waive or to
lessen the right of Landlord or Tenant to insist upon the performance by
Landlord or Tenant in strict accordance with this Lease. Landlord's consent to,
or approval of, any act shall not be deemed to render unnecessary the obtaining
of Landlord's consent to, or approval of, any subsequent act by Tenant. The
acceptance of the Rent hereunder by Landlord shall not be deemed a waiver of any
preceding breach by Tenant of any provision hereof, other than the failure of
Tenant to pay the particular payment of the Rent so accepted, regardless of
Landlord's knowledge of such preceding breach at the time of acceptance of such
Rent.
17.4 Severability. The invalidity of the Lease as determined by a court
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of competent jurisdiction, shall in no way affect the validity of any other
provision hereof.
17.5 Time of Essence. Time is of the essence with respect to the
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obligations to be performed under this Lease.
17.6 Incorporation of Prior Agreements; Amendments; No Representations and
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Warranties. This Lease contains all the agreements of the parties with respect
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to any matter mentioned herein. No prior or contemporaneous agreement or
understanding pertaining to any such matter shall be effective. This Lease may
be modified only by written instrument signed by the parties. Except as
otherwise stated in this Lease, Tenant hereby acknowledges that no real estate
broker nor Landlord nor any agent or employee of either has made any oral or
written warranties or representations to Tenant about the condition of the
Premises or the present or future suitability of the Premises for the conduct of
Tenant's business and Tenant's intended use.
17.7 Binding Effect. Subject to Article 10, this Lease shall be binding
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on and insure to the benefit of the successors and assigns of the parties
hereto.
17.8 Choice of Law: Venue. The Lease shall be governed by the laws of
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California. Any litigation concerning this Lease between the parties hereto
shall be initiated in the county where the Premises are located.
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17.9 Captions. The captions on this Lease are for convenience only and in
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no way define, limit or otherwise describe the scope or intent of this Lease, or
any provision hereof, or in any way affect the interpretation of this Lease.
17.10 Recording. Tenant shall not record this Lease or a memorandum of
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"Short Form" thereof.
17.11 Authority: Joint and Several Liability. Each individual executing
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this Lease on behalf of Tenant represents and warrants that he or she is duly
authorized to execute and deliver this Lease on behalf of Tenant and that such
execution is binding upon Tenant. Tenant shall deliver to Landlord evidence of
such authority satisfactory to Landlord prior to Tenant's occupancy of the
Premises. The individuals executing this Lease on behalf of Landlord represent
and warrant to Tenant that they are duly authorized to execute this Lease on
behalf of Landlord and that such execution is binding upon all parties holding
an ownership interest in the Premises.
Where a party consists of more than one person, firm or corporations, each
such person, firm or corporation shall be jointly and severally liable for
performance of such party's obligations hereunder.
IN WITNESS WHEREOF, the parties have executed this Lease in duplicate as of
the Effective Date.
Landlord Tenant
ELECTRONIC ARTS INC., /s/ XXXX XXXXXXXXXXX
a Delaware corporation ---------------------------
XXXX XXXXXXXXXXX
By: /s/ Xxxx X. Xxxxxxx
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Name: Xxxx X. Xxxxxxx
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Title: Sr VP
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EXHIBIT A
THE PREMISES
THE LAND REFERRED TO HEREIN IS SITUATED IN THE STATE OF CALIFORNIA, COUNTY OF
SAN MATEO, TOWN OF WOODSIDE, described as follows:
PARCEL I:
XXX 00, XXXXX 0, XX XXXXXXXXXX XX THAT CERTAIN MAP ENTITLED, "TRACT NO. 106 LOS
ROBLES, TOWN OF WOODSIDE, SAN MATEO COUNTY, CALIFORNIA," WHICH MAP WAS FILED IN
THE OFFICE OF THE RECORDER OF THE COUNTY OF SAN MATEO, STATE OF CALIFORNIA ON
JULY 13, 1960, IN BOOK 53 OF MAPS AT PAGES 40, 41 AND 42.
PARCEL II:
NON-EXCLUSIVE EASEMENT FOR INGRESS AND EGRESS OVER SO MUCH OF THE HEREIN
DESCRIBED PROPERTY, AS LIES WITHIN XXXXXX DRIVE, AS SAID DRIVE IS SHOWN UPON THE
MAP HEREIN MENTIONED.
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[MAP OF THE SUBJECT PROPERTY APPEARS HERE]
The information on these plat is provided for your convenience as a guide to
the general location of the subject property. The accuracy of this plat is not
guaranteed, nor is it a part of any policy, report or guarantee to which it may
be attached.
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