HomeMy WebLinkAboutReso 85-2006
RESOLUTION NO. 85-2006
CITY COUNCIL, CITY OF SOUTH SAN FRANCISCO, STATE OF CALIFORNIA
A RESOLUTION APPROVING A GROUND LEASE FOR
AN AREA NOT TO EXCEED TWO ACRES OF THE TILLO
PROPERTY, WITH REST INVESTMENTS, INC. TO
CONSTRUCT A COMMERCIAL PARKING FACILITY
FOR AIRPORT PATRONS
WHEREAS, the City of South San Francisco is responsible for building and
Inaintaining infrastructure that is essential to building and preserving the econolnic and social
well-being of its residents and businesses of the City; and
WHEREAS, in 2001 REST Investments successfully constructed a 1,100 car parking
structure adjacent to the Tillo site, and a surface parking lot, through a lease agreelnent with
the City and to the City's satisfaction, and
WHEREAS, based on its success, REST Investments is interested in an area not to
exceed two acres on the Tillo property and cOlnbine it with property it currently owns to
develop a second Inulti-level cOlnlnercial parking facility for airport patrons; and
WHEREAS, the construction of the cOlnlnercial parking facility is to occur in two
phases: (1) REST Investments will construct an at grade parking facility with parking
capacity for 161 cars; (2) REST Investments will construct a multi-story commercial parking
facility for 1,400 to 1,450 cars; and
WHEREAS, the City will collect parking tax, property tax, and pennit fee revenue
from the new facility, forecasted by REST Investments to be between $28,000 and $95,000
in parking tax annually during phase one and approximately $361,000 the first year the
parking structure begins operating; and
WHEREAS, the City Council is aware that it does not have the option to terminate
the lease during the first thirty (30) year term due to the effect a lease tennination provision
would have on REST Investments' ability to obtain financing; and
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of South
San Francisco does hereby:
1. Approve the "Ground Lease" by and between the City of South San Francisco
and REST Investments, as set forth in Exhibit A, attached hereto; and
2. Authorize the City Manager to sign and execute, on behalf of the City, the
Ground Lease, attached hereto as Exhibit A.
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I hereby certify that the foregoing Resolution was regularly introduced and adopted
by the City Council of the City of South San Francisco at a regular meeting held on the 25th
day of October 2006 by the following vote:
AYES:
Councihnelnbers Mark N. Addiego, Pedro Gonzalez and Karvl Matsulnoto,
Vice Mayor Richard A. Garbarino and Mayor Joseph A. Femekes
NOES:
ABSTAIN:
ABSENT:
ATTEST:
P 1
E*HIBIT A
S.S.F. WA TER nlffEA rMENT PLANT
7626 OR 31'6 PARCEL I
APN 0/5-/80-020
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LEA SE SITE
AREA = 54,645:t SQ. FT.
/.254 ACRES
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---- CURRENT REST INVESTMENTS LEASE
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\ i"') '- ~r (40.0') APN 0113-173-/60
'-;;,;,;.;.;.;....... ':::.1 :\ PARCEL 1/81/
.~) /\ ) <.... ;';;1-- LICENSE FOR INGRESS/EGRESS a UTILITIES
\-'lJ~ ~\ ,/, c:\ APPROXIMIJ. TE AREA = 3,555:t SQ. FT.
\jO btto. / ~ 7$26 OR 3/6 PARCEL 2
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OR TH A CCESS RD.
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LANDS OF
E QUIL ON
'JR 98-104529
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Curve number I
Rodius= 145.01
Delfa= 02010 I
Arc= 5.5'
LEG;END
POB POINT OF BEGINNING
POC POINT OF COMMENCEMENT
OR OFFICIAL RECORDS
LEASE AND LICENSES OF THE
"TlLL 011 PORTION OF THE
S.S.F. WA TER TREA TMENT PLANT
CITY OF SOUTH S4N FRANCISCO
CALIFORNIA
PERI CO'SSEBOOM
DIMENSIONS SHOWN PAREN THE TJCALL Y ARE DERIVED
FROM THE PUBLIC RECORD AND ARE APPROXIMA TE,
EXHIBIT A-1
P.2
I J/'\r::-Att:"\r:'*'.r'!"t I Ii Illl"""l. '-'1 '''-''1 #"..."'~~"..........
PMCEL 1
LEASE PARCEL
ALL THAT REAL PROPERTY SITUATED IN THE STATE OF CALIFORNIA,
qo~Y .. OF SAN MArE 0 t, ,CJ;.TY OF SOUTH SAN F,RANCISCO, MORE
PARTICULARLY DESCRIBED AS FOLLOWS:
COMMENCING AT THE SOUTHERLY TERMINUS OF THAT LINE
DIMENSIONED "S.08046'10"E., 699.69 FEET" WHICH IS CONTAINED
WITHIN THAT DEED RECORDED JULY 2, 1998 AT SERIES NO. 98-
104529 OF THE OFFICIAL RECORDS OF THE COUNTY OF SAN MATEO;
THENCE N. 08046 '10 "W., ALONG SAID LINE A DISTANCE OF 251.52
FEET; THENCE N.80037150''E., A DISTANCE OF 39.91 FEET TO THE
TRUE POINT OF BEGINNING OF THE PREMISES DESCRIBED HEREIN,
SAID POINT ALSO BEING THE NORTHEAST CORNER OF THE' HEREIN
DESCRIBED PARCEL "Alii THENCE N.80037'50''E., A DISTANCE OF
315.34 FEET TO THE WlE'STIRLY LINE OF THE "FINGERS" GROUlW
LEASE AS SAID LEASE IS DESCRIBED ON EXHIBIT "B" OF THAT
UNRECORDED LEASE AGREEMENT BETWEEN REST INVESTMENT AND THE
CITY OF SOUTH SAN FRANCISCO, DATED JUNE 12, 1998; THENCE
S.09004'03"E., ALONG THE WESTERLY LINE OF SAID LEASE A
JISTANCE OF 199.37 FEET; THENCE N. 89054 I 2811W., ALONG THE
~INE O~ SAID LEASE A DISTANCE OF 320.18 FEET TO A POINT ON
rHE EASTERLY LINE OF THE HEREIN DESCRIBED PARCEL "A";
rHENCE N. 08046 '10nw., ALONG THE EASTERLY LINE OF SAID
?ARCEL "A" A DISTANCE OF 146.74 FEET TO THE POINT OF
3EGINNING
3EING A PORTION OF THE PREMISES DESCRIBED AS' "PARCEL I" IN
~T DEED RECORDED IN BOOK 7626 AT PAGE 316 OF THE OFFICIAL
~ECORDS OF THE COUNTY OF SAN MATEO.
~EARINGS CONTAINED HEREIN ARE REFERENCED TO THOSE CONTAINED
TITHIN THAT DEED RECORDED JULY 2, 1998 AT SERIES NO. 98-
.04529 OF THE OFFICIAL RECORDS OF THE COUNTY OF SAN MATEO.
PORTION OF APN 015-180-020)
EXHIBIT A-2
D,,)
PARCEL npll
LICENSE FOR INGRESSr EGRESS AND UNDERGROUND UTILITIES
A NON-EXCLUSIVE LICENSE FOR INGRESS, EGRESS AND
tINI;>ERGRQPNJJ UTILITIES, OVER THAT., REAL PROPERTY SITUATED ..IN THE
STATE OF CALIFORNIA, COUNTY OF SAN MATEO, CITY OF SOUTH SAN
FRANCISCO, MORE PARTICULARLY DESCRIBED AS FOLLOWS:
BEGINNING AT ,THE SOUTHERLY TERMINUS OF THAT LINE DIMENSIONED
IfS.08046'10"E., 699.69 FEET" WHICH IS CONTAINED WITHIN THAT
DEED RECORDED JULY 2, 1998 AT'" SERIES NO. 98-104529 OF THE
OFFICIAL RECORDS OF THE COUNTY OF SAN MATEO; THENCE
N. 08046 '10 "W., ALONG SAID LINE A DISTANCE OF 251.52 FEET;
THENCE N.80037'50"E./ A DISTANCE OF 39.91 FEET TO THE
NORTtiwESTERLY CORNER OF THE HEREIN DESCRIBED PARCEL 1; THENCE
S. 08046 r 10 lYE. / ALONG THE WESTERLY LINE AND ALONG THE
SOUTHERLY PROLO~ATION OF THE WESTERLY LINE OF THE'
~FOREMENTIONED PARCEL 1 A DISTANCE OF 252.06 FEET TO THE
~ORTHERLY LINE OF THE HEREIN DESCRIBED PARCEL rlB"j THENCE
S. 81 0 2~ I 20 "W. / ALONG SAID NORTHERLY LINE A DISTANCE OF 39.91
~EET TO THE POINT OF BEGINNING.
IRRESPECTIVE OF THE DIMENSIONS CONTAINED HEREIN, IT IS THE
INTENT OF THE GRANTOR THAT THIS PARCEL BE COINCIDENT WITH THE
fEREIN DESCRIBED PA..'R.CEL n B Ii
sEING A PORTION OF THE PREMISES DESCRIBED AS IIPARCEL 111 IN
rHAT DEED RECORDED IN BOOK 7626 AT PAGE 316 OF THE OFFICIAL
~ECORDS OF' THE COUNTY OF SAN MATEO.
;UBJECT TO EXISTING EASEMENTS OF RECORD.
:HE HEREIN DESCRIBED LICENSE AREA IS TO BE KEPT"' CLEAR OF
lTRUCTURES AND PARKED VEHICLES AND MAY ONLY BE DEVELOPED IN A
rnNNER CONSISTENT WITH ITS CURRENT USE AS A FIRE LANE AND AS
;MERGENCY ACCESS TO THE SOUTH SAN FRANCISCO WATER TREATMENT
lLANT .
~ESERVING TO THE CITY THE RIGHT TO MAINTAIN ANY EXISTING
rTILITIES AND TO INSTALL NEW UTILITIES AS NECESSARY.
,EARINGS CONTAINED HEREIN ARE REFERENCED TO THOSE CONTAINED
'ITHIN THAT DEED RECORDED JULY 2, 1998 AT SERIES NO. 98-
04529 OF THE OFFICIAL RECORDS OF THE COUNTY OF SAN MATEO.
PORTION OF APN 015-180-020)
EXHIBIT A-3
P.4
PARCEL liB"
LICENSE FOR INGRESS I EGRESS AND UNDERGROUND UTILITIES
A NON-EXCLUSIVE LICENSE FOR INGRESS, EGRESS AND UNDERGROUND
UTILITIES OVER THAT REAL PROPERTY SITUATED IN THE STATE OF
CALIFORNIA, COUNTY OF SAN MATEO, CITY OF SOUTH SAN FRANCISCO'[
MORE PARTICULARLY DESCRIBED AS FOLLOWS:
BEING ALL OF THE PREMISES DESCRIBED AS npARCEL 2" IN THAT DEED
RECORDED IN BOOK 7626 AT PAGE 316 OF THE OFFICIAL RECORDS OF
THE COUNTY OF SAN MATEO.
SUBJECT TO EXISTING EASEMENTS OF RECORD.
THE HEREIN DESCRIBED LICENSE AREA IS TO BE KEPT CLEAR OF
STRUCTURES AND PARKED VEHICLES AND MAY ONLY BE DEVELOPED IN"..A
MAl\1NER CONSISTENT WITH ITS CURRENT USE AS A FIRE LANE AND AS
EMERGENCY ACCESS TO THE SOUTH S~ FRANCISCO WATER TREATMENT
PLANT.
RESBRVING TO THE CITY THE RIGHT TO MAINTAIN ANY EXISTING
UTILITIES AND TO INSTALL NEW UTILITIES AS NECESSARY.
(APN 015-173-120)
EXHIBIT A-4
P. :=;
South San Francisco, CA
94080
EXHIBIT A-5
P.6
,.;' .;:
E HIBIT.
(40 P GE)
Exhibit B
GROUND LEASE
by and between
the CITY OF SOUTH SAN FRANCISCO, a municipal corporation
as Landlord,
and
REST INVESTMENTS,
a California corporation,
as Tenant
Dated as of October 16, 2006
EXHIBIT B-1
P.8
THIS GROUND LEASE ("Lease") dated as of ("Effective Date") is
entered into by and between the City of South San Francisco, a municipal corporation (hereafter
"City" or "Landlord") and Rest Invesnnents, a California corporation ("Tenant").
RECIT ALS
A. '\VHEREAS, City is the owner of fee title to the unimproved land located at
South San Francisco, California, and more particularly described on
Exhibit A attached hereto, including all appurtenances, easements, rights-of-way, and other
interests appurtenant thereto ("Land"); and
B. \VHEREAS, Tenant is a California corporation that wishes to lease the Land for
the purposes of construction and operation of a surface parking lot and possible future
development of a multi-level parking structure; and
C. ,\VHEREAS, Landlord desires to lease to Tenant, and Tenant desires to lease from
: Landlord the Land, upon the terms and provisions set forth in this Lease, for the development by
, Te.naiJ.t, of a surface 'parking lot with the possibie'future development of a multi-level parking
structure,
AGREEMENT
NOW, THEREFORE, forand in consideration of the covenants and agreements
hereinafter set forth, and for oth~r good and valuable consideration, the receipt and sufficiency of
vvhich are hereby ac1rno;wledged, Landlord and Tenant h~reby agree as follows.
ARTICLE I
DEMISE OF PREMISES
1.1. Demise. Landlord hereby leases to Tenant, and Tenant hereby leases from
'~andlord, the Land for the Term (as defmed in Section 2.1 below) and on the terms and
conditions set forth in this Lease. All oil, gas, geothermal and mineral rights are expressly
reserved from this Lease. Landlord shall have no rights of entry or smface rights for the purpose
of extraction of oil, gas, mineral, geothermal or similar resources.
1.2., Condition of Title. Landlord leases the Land to Tenant subject to all easements,
covenants, conditions, restrictions and other title matters of record existing as of the Effective
Date, and all matters that would be apparent from an inspection of the L~d on the Effective
Date.
1.3. Condition of Land. Landlord leases the Land to Tenant in its "as-is" condition
existing on the Effective Date, and Tenant acknowledges that, except as otherwise expressly set
forth in this Lease, Landlord makes no representations or warranties to Tenant with regard to the
condition of the Land or the fitness or suitability thereof for Tenant's purposes, including but not
limited to, matters pertaining to topography, utilities, soil, subsoil, presence or absence of fill,
presence or absence of hazardous materials, ,drainage, flood zone designation~ access to public
roads~' or environmental laws, rules, or,regulations. Tenant has relied on its investigation and
judgment as to all matters relating to the Land. Tenant represents that it has, prior to the
execution of this Lease, made investigations of the Land, including without limitation such
inquiries of governmental agencies, soils testing, tests and inspections as Tenant has deemed
necessary to determine the condition of the Land and that Tenant, by execution hereof, accepts
the Land in its current "as-is" condition and state.
1.4 Defmitions.
1.4.1 Improvements. For purposes of this Lease, the term "Improvements"
shall mean all buildings, structures, fixtures, fences, walls, paving, parking improvements,
driveways, walkways, plazas, landscaping, permanently affixed utility systems and equipment,
and other improvements located on the Land, including, without limitation, the Project.
1.4.2 Project. For purposes of this Lease, the term "Project" shall mean the
Parldng Facility project and related improvements as described in Section 5.1, and any
replacement thereof pursuant to this Lease.
1.4.3 Parking Facility. For the purposes of this Lease, the term "Parking
Facility" shall be defined to include both the surface parking lot and/or any future multi-level
parking structure constructed on the Property.
1.4.4 Property. For purposes of this Lease, the term "Property" shall mean the
Land and all Improvements.
ARTICLE IT
TERM: OF LEASE
2.1 Term. The term of this Lease ("Term") shall commence on the date of
recordation of a memorandum of this Lease ("Memorandum") in the Official Records of San
Mateo County ("Commencement Date"), and unless extended under the provisions of this
Article II, shall expire on the day preceding the twelfth (12th) anniversary of the Commencement
Date (the "Expiration Date"). The expiration or sooner termination of the Term shall be
referred to as "Lease Termination."
2.2 Initial Term Extension. Conditioned upon (1) Tenant's compliance with all terms
and obligations set forth in this Lease; and (2) reasonably satisfactory proof provided to Landlord
that Tenant has obtained a fmancing commitment to construct and complete a multi-story
parking structure, Tenant shall have the option, to be exercised anytime between the 2nd and
12th Lease Years, as defmed in Section 2.4, to extend the Lease, and all terms and conditions
contained herein, for a period not to exceed a total of thirty (30) years from the Commencement
Date.
2.3 Additional Extension. Conditioned upon (1) Tenant's compliance with all temlS
and obligations set forth in this Lease; and (2) completion of construction of a multi-level
parking structure on the Land, Tenant may extend the Initial Term Extension of the Lease, as
granted in Section 2.2, for two (2) additional periods of thirty (30) years each.
EXHIBIT B-3
P_1 n
2.4 Lease Year. For purposes of this Lease, "Lease Year" shall mean each calendar
year, or partial calendar year during the Term.
2.5 Access Prior to Term. During the period between the Effective Date and the
Commencement Date, Tenant and its agents, contractors and consultants shall have the right to
enter upon the Land fronl time to time for the purpose of the investigation and review of the
Land, including without limitation, conducting soils testing, surveyin'g, environmental studies,
and performing other pre-construction activities. Tenant hereby agrees to indemnify, defend,
protect and hold Landlord harmless from and against all claims, demand, liabilities, damages,
costs and expenses (including reasonable attorneys' fees) brought against or incurred by
Landlord for bodily injury or property damage resulting from Tenant's activities on the Land
prior to the Commencement Date.
RENT
3.1 ' Base Rent. For purposes of this Lease, the "Base Rent" shall be defined as five
thousand six hundred sixty-seven dollars ($5,667.00).
3.2 Rental Adiustments. For purposes of this Lease, every five (5) years the Base
Rent amount shall be adjusted upwards or downwards in accordance 'With the change in the
Consumer Price Index ("Index") for All Urban Consumers for the San Francisco-Oaldand-San
Jose area, as published by the United States Department of Labor, Bureau of Labor Statistics, for
the five-year period immediately preceding each five-year period of this Lease ("Rental
Adjustments"). If the Index is revised or discontinued during the Lease Term, the U.S. Bureau
of Labor Statistics index or computation vvith which it is replaced shall be used to obtain
substantially the same result as if the Index had not been revised or discontinued.
3.3 Rent PaYlnents. Tenant shall pay to Landlord, rent for the Land in accordance
with the following terms:
3.3.1 Year 1 Rent. Landlord shall not charge rent for one (1) year following
Commencement Date.
3.3.2 Year 2 Through Year 6 Rent. For Lease Years 2 through 6, Tenant shall
pay to Landlord a monthly rent equal to either (a) zero dollars ($0.00), if in that month the
parking tax revenue generated by the Parking Facility pursuant to South San Francisco
Municipal Code section 6.16.047 was greater than or equal to seven thousand dollars
($7,000.00); or (b) the difference between seven thousand dollars ($7,000.00) and the actual
parking tax revenue generated by the Parking Facility in that month, if the parking tax revenue
generated by the Parking Facility in that month was less than seven thousand dollars ($7,000.00).
3.3.3 Year 7 Through Year 11 Rent. For Lease Years 7 through 11, Tenant shall
pay to Landlord a monthly rent equal to either (a) zero dollars ($0.00), if in that month the
parking tax revenue generated by the Parking Facility pursuant to South San Francisco
l\1unicipal Code section 6.16.047 was greater than or equal to eight thousand dollars ($8,000.00);
r=vw I 01"1 0 If
1':) 1 1
or (b) the Base Rent, including any applicable Rental Adjustments, if the parking tax revenue
. ge}.1~rCl.tegJJyt4eJ?,arl9n:gJ?a~ility in that month was less than eight thousand dollars ($8,000.00).
3.3.4 Year 12 Through 30 Rent. For years 12 through 30, Tenant shall pay to
Landlord a monthly rent equal to the Base Rent, including any applicable Rental Adjustments.
ARTICLE IV
TAXES~ ASSESSMENTS AND OTHER CHARGES
4.1 Impositions. Tenant covenants and agrees to pay prior to delinquency, all real
property taxes, possessory interest taxes, license and permit fees, sales, use, parking, or
occupancy taxes, assessments whether general or special, ordinary or extraordinary, unforeseen,
as well as foreseen, of any kind or nature whatsoever, pertaining to the Property or part thereof,
including, but not limited to (i) any assessment, levy, imposition or charge, in lieu of or
substitution for real estate taxes, and (ii) any assessment for public improvements or benefits
which is assessed, levied, or imposed upon or which becomes due and payable and a lien upon
(a) the Property or any part thereof or any personal property, equipment or other facility used in
the operation thereof, (b) the rent or income received by Tenant from subtenants or licensees, (c)
any use or occupancy of the Property or part thereof, or (d) this transaction or, subject to the
exclusions specified below, any document to which Tenant is a party creating or transferring an
estate or interest in the Property or part thereof. All of the foregoing are hereinafter referred to
as "Impositions."
4.1.1 Exclusions. Impositions specifically shall exclude any income, franchise,
gross receipts, estate, inheritance, transfer or gift tax imposed on Landlord that is attributable to
Landlord's transfer of Landlord's fee interest in the Land.
4.1.2 Installments. If, by law, any such Imposition is payable, or may at the
option of the taxpayer be paid, in installments (whether or not interest shall accrue on the unpaid
balance of such Imposition), Tenant may pay the same together "With any accrued interest on the
unpaid balance of such Imposition in installments as the same respectively become due and
before any fme or penalty may be added thereto for the nonpayment of any such installment and
interest. Any Impositions relating to tax years that are only partially included in the Tenn of this
Lease shall be prorated between Tenant and Landlord.
4.1.3 Evidence ofPavment. Upon request by Landlord, Tenant shall furnish, in
form satisfactory to Landlord, evidence of payment prior to delinquency of all Impositions
payable by Tenant.
4.2 Tenant Right to Contest. Tenant shall have the right before any delinquency
occurs to contest or object to the amount or validity of any such Imposition by appropriate legal
proceedings, but such right shall not be deemed or construed in any way as relieving, modifying
or extending Tenant's covenant to pay any such Imposition at the time and in the manner
required by law. Any such contest shall be conducted in accordance "With and subject to the
defend, protect and hold Landlord harmless from and against all claims, damages, losses,
liabilities, costs and expenses (including without limitation attorneys' fees) incurred by Landlord
as a result of any such contest brought by Tenant. During any contest of an Imposition, Tenant
shall (by payment of disputed sums, if necessary) prevent any advertisement of tax sale,
foreclosure of, or any divesting of Lessor's title, reversion or other interest in the Land or the
Improvements.
4.3 Tenant Duty to File. Tenant shall have the duty of making or filing any
declaration, statement or report which may be necessary or advisable in connection with the
determination, equalization, reduction or payment of any Imposition which is or which may
become payable by Tenant under the provisions of this Article IV, and Landlord shall not be
responsible for the contents of any such declaration, statement or report; provided, however
Landlord shall cooperate with Tenant in connection with the foregoing, including joinder in any
application pertaining thereto to the extent required under applicable law, all at no cost to
Landlord.
4.4 Utilities. Throughout the Term of the Lease, Tenant agrees to pay, or cause to be
paid, all charges which are inclUTed by Tenant or which are otherwise a charge or lien against the
Property or part thereof during the Term, for gas, water, electricity, light, heat or power,
telephone or other communication service use, or oilier utility use, rendered or supplied upon or
in connection with the Property. Tenant shall also obtain, or cause to be obtained, without cost
to Landlord, any and all necessary permits, licenses or other authorizations required for the
lawful and proper installation and maintenance upon the Land of wires, pipes, conduits and other
equipment for the supply of utilities to the Project. In no event shall Landlord have any liability
to Tenant, and Tenant hereby releases Landlord, from any and all claims, including but not
limited to consequential damages, lost profits and similar damages that Tenant may incur as a
result of any interruption, curtailment or diminishment of such utilities, other than for the active
negligence or willful misconduct of Landlord. Notwithstanding the foregoing, Tenant shall have
the right to challenge the amount or validity of the foregoing charges, provided that doing so
does not result in the Land being subjected to any lien or other encumbrance. Landlord shall
cooperate, within reasonable limits, to assist Tenant in securing utility services for the Project.
ARTICLE V
DEVELOPMENT OF THE LAND
5.1 Construction of Improvements. Tenant agrees to construct on the Land a surface
parking lot, with possible future construction of a multi-level parking structure, together with
related improvements ("Project"), in accordance with plans and specifications approved by the
City of South San Francisco and any other applicable governmental agency or authority.
5.2 Construction Schedule. Tenant agrees to use diligent efforts to begin construction
of the surface parking lot vvithin one hundred eighty (180) days of the Commencement Date and
complete construction of the surface parking lot within three hundred sixty-five (365) days of the
Commencement Date, subject to Unavoidable Delays incurred by Tenant. Should Tenant elect to
construct a multi-level parking structure on the Land, Tenant agrees to use diligent efforts to
EXHIBIT 8-6
begin construction of the multi-level parking structure 'Within twelve (12) years of the
Commencement Date, subject to Unavoidable Delays incurred by Tenant.
5.2.1 Unavoidable Delavs Defined. "Unavoidable Delays" means delays due
to strikes, acts of God, acts of the elements, inability to obtain labor, materials or utilities,
governmental restrictions or moratoria, enemy action, earthquakes, civil commotion, war,
unavoidable casualty or similar causes beyond the reasonable control of Tenant, but
financial inability of Tenant to perform shall not be an Unavoidable Delay or an excusing
cause.
5.3 Construction Standards.
5.3.1 General Construction Standards. All work done in connection with
construction of Improvements on the Land, including any subsequent improvement, alternation
or replacement, shall be conducted in a first class and worlananlike fashion in accordance V\~th
plans and specifications approved by Landlord and in compliance with all applicable local, state
and federal statutes, codes, ordinances, laws and regulations (collectively, "Applicable Laws").
Tenant shall take all reasonably necessary measures to minimize any damage, disruption or
inconvenience caused by such work and make adequate provision for the safety of all persons
affected thereby. Tenant shall have the sole responsibility for obtaining all necessary
governmental permits and approvals for the construction of the Improvements, at Tenant's sole
cost and expense. Landlord shall cooperate with Tenant in connection 'With obtaining any such
governmental permits and approvals. Tenant shall pay (or cause to be paid) all costs and
expenses associated with the Improvements constructed by Tenant on the Land.
5.3.2 Inspection During Construction. In addition to any authority granted by
California law authorizing building inspectors and other City and public agency representatives
to inspect the premises, Tenant agrees to allo'w Landlord's authorized representatives, agents or
employees reasonable access, upon 24 hours prior notice to inspect any construction Tenant
undertalces on the Land. '
5.3.3 Easements. From time to time at Tenant's request, Landlord shall, in its
capacity as fee title owner to the Land, join in the grant of easements to public or private utility
companies for utility service to and for the benefit of the Project. Landlord agrees to join in
granting or dedicating such public or private utility or other easements as may be reasonably
required for the development of the Land in accordance with this Lease. Landlord and Tenant
acknowledge that it will be necessary to grant and receive certain reciprocal access, drainage,
and other easements to and from the parcel owned by Landlord located adjacent to the Land.
The parties agree to cooperate in determining the description, nature and extent of such
easements and shall execute and record documents evidencing the same which are reasonably
acceptable to both Landlord and Tenant.
5.3.4 Protection of Landlord. Nothing in this Lease shall be construed as
constituting the consent of the Landlord, express or implied, to the performance of any labor or
services, or the furnishing of any materials or any specific improvements, alterations of or repairs
to the Property or any part thereof, by any contractor, subcontractor, laborer or materialman such
as to give rise to any right of any such contractor, subcontractor, laborer or materialman to file a
EXHIBIT B- 7
P.14
mechanic's lien or other claim against the fee title to the Land. Landlord shall have the right at
all reasonable times to post, and keep posted, on the Land any notices which Landlord may deem
necessary for the protection of Landlord and the Land from mechanic's liens or other claims.
Tenant shall give Landlord ten (10) days' prior 'NTitten notice of the commencement of any work
to be done on the Property to enable Landlord to post such notices. In addition, Tenant shall
malee, or cause to be made, timely payment of all monies due and legally owing to all persons
doing any work or furnishing any materials or supplies to Tenant or any of its contractors or
subcontractors in connection "With the Property.
5.3.5 Mechanic's Liens. Subject to Tenant's right to contest the same prior to
payment, Tenant shall keep the Land and the Improvements free and clear of all mechanic's liens
and other liens on account of work done by or for Tenant. Tenant agrees to and shall indemnify,
defend and hold Landlord harmless from and against liability, loss, damages, costs and expenses
(including reasonable attorney's fees) incurred by or brought against Landlord for claims of lien
of laborers or materialmen or others for work performed or materials or supplies furnished to
Tenant or persons claiming under it. In the event any lien is recorded, Tenant shall, "Within thirty
(30) days after written request from Landlord, cause such lien to be removed of record by
bonding or otherwise.
5.3.6 Notice of Completion. Upon completion of construction of any
Improvement, Tenant shall file or cause to be filed in the Official Records of San Mateo County
a Notice of Completion (the "Notice of Completion") with respect to the subject work. Upon
request of Landlord, Tenant shall malee available to Landlord following the completion of the
Improvements a full set of as-built plans for the Improyements.
5.3.7 Use of Plans. The contracts relating to design,and construction of the
Improvements executed by and between Tenant and any architect, other design professional or
any general contractor shall provide, in form and substance reasonably satisfactory to Landlord,
for the assignment thereof to Landlord as security to Landlord for Tenant's performance
herelll1der, and Landlord shall be furnished "With any such contract, together with the further
agreement of the parties thereto, that if this Lease is terminated due to Tenant's default, Landlord
may, at its election, use any plans and specifications to which Tenant is then entitled pursuant to
any such contract upon the payment of any sums due to any party thereto.
5.3.8 Performance and Surety Bonds. Prior to the commencement of
construction of any portion of the Improvements, Tenant shall purchase or cause Tenant's
contractor to purchase: (A) in fonn reasonably satisfactory to Landlord and issued by a
corporate surety reasonably acceptable to Landlord both a performance bond in an amount of not
less than 100% of the cost of construction, naming Landlord and Leasehold Mortgagees as
additional insureds and a payment bond in an amount of not less than 1000/0 of the costs for labor
and materials, naming Landlord and Leasehold Mortgagees as additional insureds; or (B) a letter
of credit in an amount not less than 100% of the cost of construction, the form and substance of
which shall be subject to Landlord's approval; or (C) such other form of assurance of completion
the form and substance of which shall be subject to Landlord approval. "Leasehold Mortgagee"
means the mortgagee or beneficiary of any Leasehold Mortgage, and in the event of a transfer of
such Leasehold Mortgage, the successor Leasehold Mortgagee, upon delivery of 'Written notice
of the transfer to Landlord, who thereupon shall be deemed to be the Leasehold Mortgagee.
I=XI-lIRIT R_g
"Leasehold Mortgage" means a mortgage secured by the leasehold estate created by this Lease
and held by a Leasehold Mortgagee.
5.4 Equal Opportunity. Tenant shall not discriminate on the basis of race, religion,
color, creed, religion, sex, sexual orientation, marital status, ancestry or national origin in the
hiring, firing, promoting or demoting of any person engaged in construction of the Project, and
Tenant shall direct its contractors and subcontractors to refrain from discrimination on such
basis.
5.5 Prevailing Wage Policy. Tenant shall carry out and shall cause its contractors to
carry out the construction of the Project in conformity with all applicable laws and regulations,
including without limitation, all applicable federal and state labor laws and standards. Tenant
shall cause its contractor and the subcontractors to pay prevailing wages in the construction of
the Project as those wages are detennined pursuant to California Labor Code Section 1720 et
seq. and the regulations adopted pursuant thereto (collectively, "Prevailing Wage Laws") or in a
Project Labor Agreement if applicable, and to comply with all other applicable provisions of the
Prevailing Wage Laws. Tenant shall cause the contractor and subcontractors to keep and retain
such records as are necessary to determine if such prevailing wages have been paid as required
pursuant to Prevailing Wage Laws. Copies of the currently applicable current per diem
prevailing wages are available from the City Public Works Department. During the construction
of the Project, Tenant shall cause the contractor to post at the construction sIte the applicable
prevailing rates of per diem wages. Tenant shall, and shall require the contractor and
subcontractors to indemnify, hold harmless and defend (with counsel reasonably acceptable to
Landlord) the Indemnitees from and against all Claims arising Qut of the failure or alleged failure
of any person or entity (including Tenant's contractor and the subcontractors) to pay prevailing
wages as determined pursuant to Prevailing Wage Laws in connection with construction of the
Proj ect or any other work 1.indertak:en in connection with the Property, the failure or alleged
failure to comply with any applicable requirement of competitive bidding, or the failure or
alleged failure to comply with any state or federal labor laws, regulations or standards in
connection with this Agreement, including but not limited to the Prevailing Wage Laws. It is
further agreed that Landlord does not, and shall not, waive any rights against Tenant which it
may have by reason of this indemnity and hold harmless agreement because of the acceptance by
Landlord, or the deposit with Landlord, of any of me insurance policies described in this
Agreement. The representations, warranties and covenants contained in this Section 5.5 shall
survive the expiration or termination of this Agreement.
ARTICLE VI
USE OF THE PROPERTY
6.1 Permitted Uses. Tenant may use the Land for the development and operation of a
surface parking lot or a multi-level parking structure, and related ancillary facilities consistent
and compatible with such a lot or structure, and for no other purposes without the prior written
consent of Landlord.
EXHIBIT 8-9
P1h
6.2 Binding on Successors~ No Subordination. The restrictions set forth in this
Article VI shall be binding upon Tenant and its successors and assigns for the full Term of this
Lease, and shall not be subordinated to any interest, lien, or mortgage.
6.3 Management and Operation of the Proiect Compliance with Laws. Tenant agrees
to use its best efforts to operate, maintain and manage the Property in first-class manner, subject
to incidental wear and tear. Tenant, at its sole cost and expense, shall comply with all Applicable
La\vs pertaining to the use, operation, occupancy and management of the Property. Tenant shall
not itself, and shall not permit any subtenant to use the Land or the Improvements for any
unlawful purpose and shall not itself, and shall not permit any subtenant to, perform, permit or
suffer any act of omission or commission upon or about the Land or the Improvements which
-vvould result in a nuisance or a violation of Applicable Law. Subject to the rights of Leasehold
iVlortgagees, Landlord shall have the right to review and approve the qualifications of any
management entity proposed by Tenant for the Project.
'"'_ 6.4 '. Tenant Right to Contest. Tenant shall have the right to contest by appropriate
'procee~gs, in the name of Tenant, and without cost or expense to Landlord, the validity or
applicatiop. of any Applicable Law. If compliance with any Applicable Law may legally be
delayed pending the prosecution of any such proceeding without the incurrence of any lien,
charge or liability against the Land or Tenant's interest therein, and without subjecting Tenant or
Landlord to any liability, civil or criminal, for failure so to comply therewith, Tenant may delay
(~ompliance therewith until the fmal determination of such proceeding. Tenant shall indemnify,
defend, protect and hold Landlord harmless from and against all claims, damages, losses,
:Liabilities, costs and expenses (including without limitation attorneys' fees) incurred by Landlord
as a result of any such contest brought by Tenant.
6.5 Hazardous Materials.
6.5.1 Obligations of Tenant. Tenant shall not cause or permit any Hazardous
Wiaterial (as defmed below) to be brought upon, kept or used in or about the Property other than
111aterials commonly used in the construction, operation and maintenance of the Property
provided such materials are used, stored and disposed of in compliance with all Applicable
Laws. If Tenant breaches the covenant set forth in the preceding sentence, then Tenant shall
indemnify, defend, protect and hold Landlord h8!mless from and against all claims, demands,
liabilities, losses, damages, fines, penalties, remediation orders, costs or expenses (including
attorney's fees) incurred by or brought against Landlord as a result of such breach by Tenant.
This indemnification of Landlord by Tenant includes, without limitation, costs incurred in
connection with any investigati<?n of site conditions or any cleanup, remedial, removal or
restoration work required by any federal, state or local governmental agency or political
subdivision because of the breach by Tenant of the terms and provisions of this Section 6.5.1.
Without limiting the foregoing, if the presence of any Hazardous Material on the Property that
was not present as of the Effective Date results in any contamination of the Property in violation
of Applicable Law, Tenant shall promptly tal<:e all actions at its sole expense as are necessary to
remediate the Property as required by law; provided that Landlord's approval of such actions
shall first be obtained, which approval may be withheld in Landlord's sole discretion.
EXHIBIT 8-10
6.5.2 Definition of Hazardous Material. As used in this Lease, the term
"Hazardous Material" means any hazardous, explosive or toxic substance, material or waste
which is or becomes regulated by any local governmental authority, the State of California or the
United States Government. The term "Hazardous Material" includes, without limitation, any
material or substance which is (a) defined as a "hazardous waste," "extremely hazardous waste'
or "restricted hazardous waste" under Sections 25115, 25117 or 15122.7, or is listed pursuant to
Section 25140, of the California Health and Safety Code, Division 20, Chapter 6. 5 (Hazardous
Waste Control Law), (b) defmed as a "hazardous substance" under Section 25316 of the
California Health and Safety Code, Division 20, Chapter 6.8 (Carpenter-Presley-Tanner
Hazardous Substance Account Act), (c) defmed as "hazardous material," "hazardous substance,"
or "hazardous waste" under Section 25501 of the California Health and Safety Code, Division
20, Chapter 6.95 (Hazardous Materials Release Response Plans and Inventory), (d) defmed as a
"hazardous substance" under Section 25281 of the California Health and Safety Code, Division
20, Chapter 6.7 (Underground Storage of Hazardous Substances), (e) petroleum, (f) asbestos, (g)
listed under Article 9 or defined as hazardous or extremely hazardous pursuant to Article 11 of
Title 22 of the California Administrative Code, Division 4, Chapter 30, (h) designated as a
"hazardous substance" pursuant to Section 311 of the Federal Water Pollution Control Act (33
D.S.C. 9 1317), (i) defmed as a "hazardous waste" pursuant to Section 1004 of the Federal
Resource Conservation and Recovery Act, 41 D.S.C. S 6901 et seq. (42 D.S.C. 9 6903), or G)
defined as a "hazardous substance" pursuant to Section 101 of the Comprehensive
Environmental Response, Compensation and Liability Act, 41 D.S.C. 9 9601 et seq. (42 D.S.C.
9 9601).
ARTICLE VII
SURRENDER AND RIGHT TO REMOVE
7.1 Ownership Dw-mg Term.
7.1.1 Improvements. During the Term of this Lease, all Improvements
constructed on the Land by Tenant as permitted or required by this Lease shall, subj ect to the
terms of this Lease, be and remain the property of Tenant.
7.1.2 Personal Pronerty. All personal property, furnishings, trade fixtures and
equipment installed by Tenant in, on or around the Property which (i) are not attached to the
Land so as to cause substantial damage upon removal, and (ii) are not necessary for the normal
operation and occupancy of the Project, shall be the personal property of Tenant (the "Personal
Property"). At any time during the Term, Tenant shall have the right to remove the Personal
Property provided Tenant shall repair any damage caused by the removal of such Personal
Property. Personal Property shall not include any portion or part of major building components
or fixtures necessary for the operation of the basic building systems (such as carpeting, elevators,
escalators, chillers, boilers, plumbing, electrical systems, lighting, sanitary fixtures and HV AC
systems) which shall be deemed a part of the Improvements.
EXHIBIT 8.-11
P1~
7.2 Ownership at Lease Termination.
7.2.1 Improvements. Upon the expiration or earlier termination of the Lease
("Lease Termination") the Improvements shall unconditionally be and become the property
solely of Landlord, and no compensation therefor shall be due or paid by Landlord to Tenant for
any part thereof, and tbis Lease shall operate as a conveyance and assignment thereof. Upon
Lease Termination, Tenant shall surrender to Landlord the Land and the Improvements in good
order, condition and repair, reasonable wear and tear excepted, free and clear of all liens, claims
and encumbrances, subleases, other than those matters existing prior to the Effective Date or
matters subsequently created or consented to by Landlord. Upon Lease Termination, at
Landlord's request Tenant agrees to execute, acknowledge and deliver to Landlord such
recordable instruments as are necessary or desirable to confrrm the termination of the Lease and
all Tenant's rights hereunder and to perfect Landlord's right, title and interest in and to the Land
and the Improvements.
7.2.2 Personal Property. Any Personal Property may be removed prior to Lease
Termination by Tenant; provided, however, the removal shall be with due diligence, and without
expense to Landlord, and any part of the Property damaged by such removal shall be promptly
repaired. Any Personal Property wbich remains on the Property for thirty (30) days after the
Lease Termination may, at the option of Landlord, be deemed to have been abandoned and either
may be retained by Landlord as its property or may be disposed of in accordance "With Applicable
Law. If requested by Landlord within a reasonable time but not less than six months prior to the
termination oftbis Lease, upon Lease Termination Tenant shall, at Tenant's sole cost and
expense, remove all Personal Property, or portions thereof designated by Landlord.
7.3 Condition of Improvements at Lease Termination. Landlord has entered this
Lease in reliance on the fact that, at Lease Termination, Landlord will receive from Tenant the
Improvements in good condition and repair, reasonable wear and tear excepted and reflecting the
age of the Improvements at such time and Landlord's willingness during the Term of this Lease
to consent to the encumbrance of Tenant's interest in the Land and Improvements for
rehabilitation or reconstruction financing. At any time during the Term, upon reasonable
advance notice and during normal business hours, Landlord may inspect the Project to confmn
that it is being properly maintained as required herein. Following its inspection, Landlord may
deliver to Tenant written notification of any portions of the Project which Landlord has
determined is not being properly maintained and Tenant shall promptly comply with the
provisions of this, Lease regarding such items; provided, the failure of Landlord to inspect or to
notify Tenant of any default hereunder shall not be a waiver of Landlord's right to enforce
Tenant's maintenance and repair obligations hereunder.
7.4 Survival. The provisions of this Article VII shall survive Lease Termination.
EXHIBIT B- 12
T\ ., r\
ARTICLE VITI
INSURANCE
8.1 Insurance. Tenant, at its sole cost and expense, during the Term hereof shall keep
and maintain the policies of insurance set forth in Exhibit B~ attached hereto and incorporated
herein and shall comply with all other requirements set forth in such Exhibit.
ARTICLE IX
INDEl\1NIFICATION BY TENANT
9.1 Indemnification bv Tenant. Tenant shall indemnify, defend, protect, save and
hold harmless Landlord and Landlord's elected and appointed officials, employees, officers and
agents (collectively "Indemnitees") from and against any and all claims, liabilities, losses,
damages, flnes, penalties, claims, demands, suits, actions, causes of action, judglnents, costs and
expenses (including without limitation reasonable attorneys' fees and court costs) (collectively
"Claims") arising during the Term from conduct or management of or from any work or thing
whatsoever done in or on the Land or Improvements, and will further indemnify and save
Indemnitees harmless from and against any and all Claims arising during the Term from any
condition of any Improvement constructed by Tenant on the Land, or arising from any breach or
default on the part of Tenant in the performance of any covenant or agreement on the part of
Tenant to be performed pursuant to the terms of this Lease, or arising from any negligence of
Tenant, or any of its agents, contractors, servants, employees, sublessees or licensees, or arising
from any accident, injury or damage whatsoever caused to any person occurring during the Term
in or on the Land or the Improvements, or from the furnishing of labor or materials by Tenant,
and from and against all costs, attorney's fees, expenses and liabilities incurred in or about any
such claim or action or proceeding brought thereon, and will further indemnify and save
Indemnitees harmless from and against any and all Claims arising from the use of the Property
by any invitee, licensee, or guest, as approved under this Lease. In the event any such action or
proceeding is brought against Landlord by reason of any such claim, Tenant, upon notice from
Landlord, covenants to defend such action or proceeding by counsel reasonably satisfactory to
Landlord. If an insurer under insurance required to be maintained by Tenant hereunder shall
undertalce to defend the Landlord under a reservation of rights with respect to ultimate coverage
and Landlord shall reasonably deem it necessary to retain independent counsel with respect to
such matter, Tenant shall pay the reasonable fees of such counsel. The obligations of Tenant
under this Article IX shall not apply to any claims or other matters resulting from the breach or
default by Landlord under this Lease, or due solely to the gross negligence or willful misconduct
of Landlord, its agents, employees or consultants.
ARTICLE X
DAMAGE,AND DESTRUCTION
10.1 Damage or Destruction. In the event of any damage to or destruction of the
Improvements during the Term, Tenant shall restore and rebuild the Improvements as nearly as
possible to their condition immediately prior to such damage or destruction, subject to any
restrictions imposed by changes in Applicable Law and the consent of Leasehold Mortgagee, and
"P.20
provided that insurance proceeds are made available for the restoration or rebuilding arid the
restoration or rebuilding is financially feasible. Tenant shall commence diligently and
continuously to carry out such rebuilding to full completion as soon as possible. Unless Lessor
agrees otherwise in writing, Tenant shall commence reconstruction of the Improvements within
sixty (60) days following the date upon which insurance proceeds are made available for such
work. Upon the occurrence of damage or destruction, all insurance proceeds paid in respect of
such damage or destruction shall be applied to the payment of the costs of the restoration and
rebuilding required to be performed by Tenant pursuant to this Lease. The insurance proceeds
shall be held in trust by a financial institution agreed upon by Landlord and Tenant ("Insurance
Trustee"), with the costs of such trust to be a frrst charge against the insurance proceeds. After
the completion of the restoration and rebuilding of the Improvements, any remaining insurance
proceeds shall be paid to Tenant and Tenant shall be entitled to retain the same.
10.2 Rebuilding by Tenant. The funds held by the Insurance Trustee shall be held in
trust and shall be applied to the cost of rebuilding. Any funds held by the Insurance Trustee
following final completion of rebuilding and payment of all costs and expenses thereof and
removal of any liens related thereto, shall be paid to Tenant, subject to the rights of any
Leasehold Mortgagee.
1003 Disbursement of Funds. The Insurance Trustee shall disburse funds only on a
periodic basis approved by Landlord and Tenant and only upon receipt of invoices and other
documentation, certified as correct by Tenant's architect, if an architect is required for the repair,
evidencing satisfactory completion of the work for which payment is requested ("Payment
Request"). Further, the Insurance Trustee shall not disburse any funds unless the payment
request is accompanied by (a) an executed conditional lien release in form complying with
California law relating to all labor and materials described in the Payment Request and (b) an
executed final lien release in form complying with California law releasing all claims'. for labor
and materials described in the immediately preceding Payment Request and such other terms as
are required by any Leasehold Mortgagee.
10.4 Notice Required. In the event of material damage to or destruction of the
Improvements, or any part thereof, Tenant shall promptly give Landlord notice of such
occurrence and take all actions reasonably required to protect against hazards caused by such
damage or destruction. For purposes of this Article X, damage or destruction shall be deemed to
be material if the estimated cost to repair equals or exceeds One Hundred Thousand Dollars
($100,000).
10.5 Removal of Debris. If this Lease shall terminate following the occurrence of
damage to or destruction of the Improvements and at a time when Tenant shall not have restored
and rebuilt the Improvements, then Tenant shall, at its cost and expense after the use of any
insurance proceeds released for such purpose, remove the debris and damaged portion of
Improvements (including without limitation all foundations) and restore the Land or the
applicable portion thereof to a neat, clean and safe condition.
10.6 Tenant's Right to Terminate. Notvvithstanding any contrary provision of this
Article X, Tenant shall have the option to terminate this Lease and be relieved of the obligation
to restore the Improvements where all or substantially all of the Improvements are substantially
EXHIBIT 8-14
P"" 1
damaged or destroyed and such damage or destruction resulted from a cause not insured against
by Tenant nor required to be insured against by Tenant under this Lease ("Uninsured Loss"),
and where all of the following occur:
10.6.1 No more than one hundred twenty (120) days following the Uninsured
Loss, Tenant shall notify Landlord of its election to terminate this Lease; to be effective, such
notice must include both a copy of Tenant's notification to the Leasehold Mortgagee, if any, of
Tenant's intention to exercise the option to terminate set forth in this Section 10.6, and Tenant's
certification under penalty of perjury that Tenant has delivered or mailed such notification to the
Leasehold Mortgagee in accordance "With this Section 10.6.1. Landlord shall be entitled to rely
upon the foregoing notice and certification as conclusive evidence that Tenant has notified the
Leasehold Mortgagee regarding Tenant's desire to terminate this Lease.
10.6.2 No more than sixty (60) days following the giving of the notice required
by Section 10.6.1 or such longer time as may be reasonable under the circumstances, Tenant
shall, at Tenant's sole cost and expense after the use of any insurance proceeds released for such
purpose, remove all debris and other rubble from the Land, remediate the presence of any
Hazardous Material on the Land or in the soil that was not present as of the Effective Date of this
Lease, secure the Land against trespassers, and at Landlord's election, remove all remaining
Improvements on the Land.
10.6.3 No more than thirty (30) days following Tenant's termination notice,
Tenant shall deliver to Landlord a quitclaim deed to the Land in recordable form, in form and
content satisfactory to Landlord and/or with such other documentation as may be reasonably
requested by Landlord or any title company on behalf of Landlord, terminating Tenant's interest
in the Land.
10.6.4 \Vithin ten (10) days following Landlord's receipt of the notice referred to
Section 10.6.1, Landlord has not received both written notice from the Leasehold Mortgagee, if
any, objecting to such termination and an agreement containing an effective assignment of
Tenant's interest in this Lease to such Leasehold Mortgagee whereby such Leasehold Mortgagee
expressly assumes and agrees to be bound by and perform all of Tenant' s obligations under this
Lease.
ARTICLE Xl
LAl\TDLORD'S RIGHT TO PERFORM TENANT'S COVENANTS
If Tenant shall at any time fail to pay any Imposition or other charge payable by Tenant
to a third party as required by this Lease within the time permitted, or to pay for or maintain any
of the insurance policies provided for in Exhibit B hereof within the time therein permitted, or to
make any other payment or perform any other act on its part to be made or performed hereunder
witbID the time permitted by this Lease, then Landlord, after thirty (30) days' written notice to
Tenant and without waiving or releasing Tenant from any obligation of Tenant hereunder, may
(but shall not be required to): (i) pay such Imposition or other charge payable by Tenant; (ii)
pay for and maintain such insurance policies provided for in Exhibit B hereof; or (iii) make such
other payment or perform such other act on Tenant's part to be made or performed under this
EXHIBIT 8-15
"P_ 2 2
Lease; and Landlord may enter upon the Property for such purpose and take all such action
thereon as may be reasonably necessary therefor.
All sums paid by Landlord and all costs and expense incurred by Landlord in connection
with the performance of any such act (together with interest thereon at the Default Rate from the
respective dates of Landlord's malcing of each such payment) shall constitute additional Rent
payable by Tenant under tbis Lease and shall be paid by Tenant to Landlord on demand. The
"Default Rate" shall mean interest calculated at an annual rate equal to the rate of interest most
recently announced by the largest banlc with its corporate headquarters in California. If there is
no such banlc or comparable rate, then the Default Rate shall be the highest legal rate of interest
that may be charged at that time.
ARTICLE XII
REPAIRS~ CHANGES~ ALTERATIONS AND NEW CONSTRUCTION
12.1 Repairs and Maintenance. Tenant covenants and agrees, throughout the Term,
without cost to Landlord, to take good care of the Land and Improvements and to keep the same
in good order and condition. Tenant shall promptly, at Tenant's own cost and expense, make all
necessary repairs, interior and exterior, structural and nonstructural, ordinary as well as
extraordinary, whether contemplated or not contemplated at the time of execution of this Lease,
and shall keep the Property in a well maintained, safe, clean and sanitary condition. The term
"repairs" shall include replacements or renewals when necessary, and all such repairs made by
Tenant shall be at least equal in quality and class to the original work. Tenant shall keep and
maintain all portions of the Property and the sidewalks adjoining the same in a clean and orderly
condition, free of accumulation of dirt, rubbish, and graffiti. Tenant shall ensure that the Project
is served by adequate lighting in accordance with applicable building codes and security services
and systems reasonably acceptable to Landlord. From time to time during the Term, upon not
less than three (3) days prior notice from Landlord, Landlord may enter the Property, or portions
thereof, to determine if Tenant is properly maintaining the Property. If, following any such
inspection by Landlord, Landlord delivers notice of any deficiency to Tenant, Tenant shall
promptly prepare and deliver to Landlord Tenant's proposed plan for remedying the indicated
deficiencies. Tenant's failure to deliver a remedial plan and to complete, within a reasonable
tune, remedial work shall be a default under this Lease. Landlord's failure to deliver, following
any Landlord's inspection, any notice of deficiency to Tenant, shall not be a waiver of any
default by Tenant under tbis Article XII. Tenant shall defend, indemnify and hold Landlord
harmless from and against any claim, loss, expense, cost, or liability incurred by Landlord arising
out of Ten ant's failure to fully and timely fulfill its obligations to maintain and repair the Land
and the Improvements as required hereunder.
12.2 Changes and Alterations. Tenant shall not during the Term make any changes or
alterations in, to or of the Improvements, without the prior written consent of Landlord, which
Landlord shall not unreasonably withhold, so long as all the following are complied with by
Tenant at Tenant's sole cost and expense:
(a) The change or alteration shall be in harmony with neighboring buildings
:tmd shall not materially impair the value or structural integrity of the Improvements.
EXHIBIT B-16
(b) The change or alteration shall be for a use which is permitted hereunder.
(c) No change, alteration or addition shall be undertalcen until Tenant shall
have obtained and paid for, so far as the same may be required from time to time, all permits and
authorizations of any federal, state or municipal government or departments or subdivisions of
any of them, having jurisdiction. Landlord shall join in the application for such permits or
authorizations whenever such action is necessary; provided, however, that Landlord shall incur
no liability or expense in connection therewith.
(d) Any change, alteration or addition shall be made in a good and workmanlike
manner and in accordance with all applicable permits and all Applicable Laws.
( e) During the period of initial construction of, or of construction of any
change, alteration or addition in, to or of, the Improvements or of any permitted demolition or
new construction or of any restoration, Tenant shall maintain or cause to be maintained frre or
other applicable insurance provided for in Exhibit B, which policy or policies by endorsement
thereto, if not then covered, shall also insure any change, alteration or addition or new
construction, including all materials and equipment incorporated in, on or about the
Improvements (including excavations, foundations and footings) under a broad form all rislcs
builders' risk form or equivalent thereof.
(f) Tenant shall comply with the provisions of Section 5.3.
(g) At Landlord's request, Tenant shall provide Landlord with a copy of any
as-built drawings for the Improvements within sixty (60) days following the completion of the
Improvements.
12.3 Exceptions to Requirement for Consent. The foregoing notwithstanding, Tenant
shall not be required to obtain Landlord's prior written consent to any changes, alterations or
improvements so long as all the following requirements are met:
(a) The change, alteration or improvement is nonstructural.
(b) The change, alteration or improvement is not visible from the exterior of any
building on the Land.
( c) The change, alteration or improvement has a cost of less than One Hundred
Thousand Dollars ($100,000).
(d) The provisions of Section 5.3 are satisfied.
Notwithstanding the foregoing, Tenant shall deliver to Landlord not later than ten (10) days prior
to commencement of any construction, change, alteration or repair, written notice of the
proposed work, a general description of the proposed work and sufficient information to permit
Landlord to post a notice of nonresponsibility on the Land.
12.4 No Right to Demolish. Notwithstanding any other provisions of this Article XII,
Tenant shall have no right to demolish any Improvement, once built, unless Tenant shall have
EXHIBIT S-17
P.24
received the prior written consent of Landlord which shall not be unreasonably withheld if the
age and condition of the Improvements makes repair or reconstruction impractical or fmancially
infeasible.
12.5 Replacement Reserve Fund. Commencing with the completion by Tenant of the
construction of the surface parking lot, and continuing during the remaining Term of the Lease,
Tenant shall establish and maintain a reserve fund ("Replacement Resenre Fund") for the cost
of capital repairs and replacements to the Parking Facility. Tenant shall have the right to use the
Replacement Reserve Fund for the cost of capital repairs, replacements, renovations, upgrades,
additions or other improvements to the Parking Facility during the Term ("Permitted Capital
Expenditures"). During any period during which the requirements of a Leasehold Mortgagee
are in effect with regard to the Parldng Facility, the amount, timing and other terms and
provisions with respect to the Replacement Reserve Fund contributions, and the administration
of the Replacement Reserve Fund (including, without limitation, the permitted investments in
which the Replacement Reserve Fund may be invested), shall be in accordance with the
requirements imposed by such Leasehold Mortgagee.
The Replacement Reserve Fund shall be held in an account established with a reputable
financial institution reasonably acceptable to Landlord. Tenant shall have the right to satisfy
(whether fully or partly) the Replacement Reserve Fund obligations under this Section 12.5 with
replacement reserves required by a Leasehold Mortgagee, as long as such replacement reserve
nmds are in all materials respects administered in accordance with the requirements of this
.s~2'tiQIl 12.5. Tenant shall receive credit against required Replacement Reserve Fund
contributions for any Permitted Capital Expenditures incurred by Tenant for the Development.
ARTICLE XIII
E:MINENT DOMAIN
13.1 Eminent Domain.
13.1.1 Defmitions. The following definitions shall apply in construing the
provisions of this Article XIII:
(a) "Award" means all compensation, damages or interest, or any
combination thereof, paid or awarded for the taldng, whether pursuant to judgment, by
agreement, or otherwise.
(b) "N otice of intended taking" means any notice or notification on which a
reas(:mably prudent person would rely and would interpret as expressing an existing intention of
taling as distinguished from a mere preliminary inquiry or proposal. It includes, but is not
litnited to, the service of a condemnation summons and complaint on a party to this Lease. The
notice is considered to have been received when a party to this Lease receives from the
condemning agency or entity a written notice of intent to take.
(c) "Partial taking" means any taking that is not a total taking, a substantial
taking; or a temporary taldng.
g:;:YI-lIRIT R_1 ~
(d) "Substantial taking" means the taking of so much of the Property that the
remaining portion thereof would not be economically and feasibly usable by Tenant for the then
existing uses and purposes of the Property, in Tenant's reasonable judgment, but shall exclude a
temporary taking.
(e) "Taking" means any taking of or damage, including severance damage, to
all or any part of the Property or any interest therein by the exercise of the power of eminent
domain, or by inverse condemnation, or a voluntary sale, transfer or conveyance under threat of
condemnation in avoidance of the exercise of the power of eminent domain or while
condemnation proceedings are pending.
(f) "Temporary taking" means the taking of any interest in the Property for
a period of less than one (1) year.
(g) "Total taking" means the taldng of all or substantially all of the Property,
but shall exclude a temporary taking.
13 .1.2 Notice. The party receiving any notice of the kind specified below shall
promptly give the other party "Written notice of the receipt, contents and date of the notice
received:
(a) notice of intended taldng;
(b) service of any legal process .relating to condemnation of all or any
portion of the Property;
(c) notice in connection with any proceedings or negotiations with respect
to such a condemnation; or
(d) notice of intent or willingness to make or negotiate a private purchase,
sale or transfer in lieu of condemnation.
Landlord and Tenant, and any Leasehold Mortgagee, each shall have the right to represent its
respective interest in each proceeding or negotiation with respect to a taking or intended taldng
and to malce full proof of their respective claims. No agreement, settlement, sale or transfer to or
with the condemning authority shall be made without the mutual agreement of Landlord and
Tenant and any Leasehold Mortgagee. Landlord and Tenant each agree to execute, aclmowledge
and deliver to the other any instruments that may be reasonably required to effectuate or
facilitate the provisions of this Lease relating to condemnation.
13.1.3 Total or Substantial Taking. In the event of a total or substantial taking of
fee title to the Land, Tenant's interest in this Lease and all obligations of Tenant subsequently
accruing hereunder shall cease as of the date of the vesting of title in the condemning authority;
provided, however, that if actual physical possession of all or part of the Property is taken by the
condemning authority prior to such date of vesting of title, Tenant's obligations to pay rent and
other sums under tbis Lease shall terminate as of such earlier date. In the event of a total or
substantial taking of an interest in the Property other than fee title, at Tenant's option
EXHIBIT 8-19
P.2fl
(exercisable by written notice to Landlord), Tenant's interest in this Lease and all obligations of
Tenant subsequently accruing hereunder shall cease as aforesaid.
13.1.4 Award. All condemnation awards and similar payments shall be paid and
belong to Landlord, except for any amounts awarded or paid specifically to Tenant for the
Improvements. Any such amount awarded to Tenant shall be proportional to the amount
expended by Tenant for the Improvements (as distinguished from the cost of the Improvements
funded by grant funds, if any, obtained by Landlord for the Project) and shall exclude the value
of Landlord's reversionary interest in the Improvements. It is expressly understood and agreed
by Tenant that except as otherwise stated in this Section 13.1.4, Landlord shall be entitled to the
entire award for any total or substantial taking.
13.1.5 Temporary Taking. In the event of a temporary taking, Tenant shall be
entitled to the whole award, and this Lease shall remain in full force and effect.
13.1.6 Partial Talcing. In the event of a partial talcing, tbis Lease shall remain in
full force and effect, covering the remainder of the Property, and Tenant shall repair and restore
any damage to the Improvements caused by such partial taking consistent with and subject to the
provisions applicable to a restoration in the event of an insured casualty under Article X, so that
after completion of the restoration the Improvements shall be, as nearly as possible, in a
condition as good as the condition immediately preceding the partial taking. The award for any
partial taking shall be deposited and disbursed in the same manner as insurance proceeds are
disbursed for restoration pursuant to Article X (unless the Leasehold Mortgagee elects to apply
such proceeds to pay the indebtedness secured by the Leasehold Mortgage), and upon
completion of the restoration, any remaining portion of the award shall be allocated as set forth
in Section 13.1.6.1.
13.1.6.1 Award on Partial TalrJng. All condelT1llation awards and similar
payments shall be paid and belong to Landlord, except for any amounts awarded or paid
specifically to Tenant for the Improvements. Any such amount awarded to Tenant shall be
proportional to the amount expended by Tenant for the Improvements (as distinguished from the
cost of the Improvements funded by grant funds, if any, obtained by Landlord for the Project)
and shall exclude the value of Landlord's reversionary interest in the Improvements. It is
expressly understood and agreed by Tenant that except as otherwise stated in this Section 13.1.6,
Landlord shall be entitled to the entire award for any total or substantial taking.
No payments shall be made to Tenant pursuant to this Section if any default by Tenant hereunder
has occurred and is continuing unless and until such default is cured.
13.1.6.2 Partial Talcing in Last Five Years. If a partial taking occurs
during the last five (5) years of Term and the reasonably estimated cost of reconstruction work
exceeds twenty-five percent (25%) of the replacement value of the Improvements, Tenant shall
have the right and option to treat the same as a substantial taking by giving written notice thereof
to Landlord no later than the earlier of: (a) the date of vesting of title in the condemning
authority of the portion of the Property taken, or (b) the date upon which the condemning
authority takes physical possession of such portion of the Property. If Tenant does give such
..~!:af~H"~8r;r .~~ft>~!(1
,
notice the partial taking shall be considered as a substantial taking and the taking shall be subj ect
to the provisions of Section 13.1.3.
13.1.7 Lease Provisions Controlling. The provisions of this Lease shall
determine the rights and obligations of the parties in connection with any condemnation, but as
between Tenant and any Leasehold Mortgagee the Leasehold Mortgage shall control.
ARTICLE XIV
MORTGAGES
14.1 Leasehold Mortgages. Tenant shall have the right, at any time and from time to
time during the Term, to encumber its leasehold interest hereunder with a Leasehold Mortgage or
Mortgages, provided that (a) no Leasehold Mortgage shall in any way impair (except as
otherwise stated herein or as provided by law) the enforcement of Landlord's right and remedies
herein and by law provided, (b) any such Leasehold Mortgage shall at all times be subject and
subordinate to, and shall not affect or become a lien upon Landlord's right, title or estate in the
Land or in this Lease, and ( c) Tenant shall give Landlord prior written notice of any such
Leasehold Mortgage, and shall accompany such notice with a true and correct copy of any such
Leasehold Mortgage. Any Leasehold Mortgage shall be subject to the terms and conditions set
forth in this Article XIV.
14.2 Rights of Leasehold Mortgagee.
14.2.1 Notices. If Landlord shall have been provided with written notice of the
address of any Leasehold Mortgagee, Landlord shall mail to such Leasehold Mortgagee a copy
of any notice under this Lease at the time of giving such notice to Tenant, and no such notice
shall be effective against such Leasehold Mortgagee, and no termination of this Lease or
termination of Tenant's right of possession of the Land or reletting of the Land by Landlord
predicated on the giving by Landlord of any notice shall be effective, unless Landlord gives to
such Leasehold Mortgagee written notice or a copy of its notice to Tenant of such default or
termination, as the case may be.
14.2.2 Right to Cure.
(i) In the event of any default by Tenant under the provisions of this Lease, the
Leasehold Mortgagee shall have the right to remedy or cause to be remedied such default within
the same cure period as afforded Tenant hereunder, which cure period shall commence as against
the Leasehold Mortgagee upon the receipt by the Leasehold Mortgagee of the notice of default.
Landlord shall accept such performance by the Leasehold Mortgagee as if the same had been
done by Tenant.
(ii) The term "incurable default" as used herein means any default which cannot
be reasonably cured by a Leasehold Mortgagee. The term "curable default" means any default
under this Lease which is not an incurable default. As to any entity acquiring the mterest of
Tenant in the Property and in this Lease as a result of the foreclosure of a Leasehold Mortgage
(or an assignment or deed in lieu thereof), Landlord shall not terminate this Lease provided such
party is diligently and in good faith proceeding to cure any such default. In the event of any
',~~~~~r ~~~~.:-.2:1
P- ?R
curable default under this Lease, and if prior to the expiration of the applicable grace period
specified in Section 14.2.2 (i) the Leasehold Mortgagee shall give Landlord written notice that it
intends to undertake the curing of such default, or to cause the same to be cured, or to exercise its
rights to acquire the leasehold interest of Tenant by foreclosure or otherwise, and shall
immediately commence and then proceed with diligence to do so, whether by performance on
behalf of Tenant of its obligations under this Lease, by foreclosure or otherwise, then Landlord
will not terminate or take any action to effect a termination of this Lease or re-enter, take
possession of or relet the Land or similarly enforce performance of this Lease so long as the
Leasehold Mortgagee is diligently and in good faith engaged in the curing of such default or
effecting such foreclosure. The foregoing sentence shall not be deemed to extend the time period
within which a default in the payment of money must be cured under other applicable Lease
provisions. The Leasehold Mortgagee shall not be required to continue such possession or
continue such foreclosure proceedings. Nothing herein shall preclude Landlord from terminating
this Lease with respect to any additional default which shall occur during any period of
forbearance and not be remedied within the cure period, if any, applicable to any such additional
default, except that Leasehold Mortgagee shall have the same rights specified in this Article XIV
with respect to any additional defaults.
(iii) lfthe default by Tenant pertains to the failure of Tenant to complete the
con.struction of the Project "Within the time period required under Section 5.2 of this Lease, and if
Vilitbin one hundred twenty (120) days following written notice to Leasehold Mortgagee of such
default Leasehold Mortgagee shall give Landlord written notice that it intends to undertal(e the
curing of such default, or to cause the same to be cured, and to exercise its rights to acquire the
leasehold interest of Tenant by foreclosure or otherwise in order to effectuate such cure, and
shall immediately commence and then proceed with diligence to do so, then Landlord will not
terminate or take any action to effect a termination of this Lease or re-enter, take possession, of or
relet the Land or similarly enforce performance of this Lease so long as the Leasehold
Mortgagee is diligently and in good faith engaged in the completion of the construction of the
. ,
Project or effecting such foreclosure; provided, however, Landlord shall not be obligated to
forebear from a termination or other enforcement of its rights lUlder the Lease in response to such
default beyond that date which is thirty (30) months following the date of Landlord's initial
default notice to the Leasehold Mortgagee under this Section 14.2.2 (iii), subject to extension
due to Unavoidable Delays incurred by Leasehold Mortgagee in the completion of the
construction of the Project, and subject to extension for any delay incurred by Leasehold
Mortgagee as a result of legal limitations on its ability to foreclose upon the Tenant's leasehold
interest.
14.2.3 Execution of New Lease. If this Lease is tenninated by Tenant's trustee in
ban.lm1ptcy, receiver, liquidator or oilier similar person on accolUlt of a default or if Tenant's
interest under this Lease shall be sold, assigned or transferred pursuant to the exercise of any
remedy of the Leasehold l\10rtgagee, or pursuant to judicial proceedings, and if (i) all monetary
defaults of Tenant have been cured, and (ii) the Leasehold Mortgagee shall have arranged to the
reasonable satisfaction of Landlord to cure any other curable default of Tenant under this Lease,
then Landlord, within thirty (30) days (or such period as may reasonably be necessary to enable
Landlord to comply with statutory requirements applicable to Landlord's lease of real property)
after receiving a vvritten request therefor, which shall be given within sixty (60) days after such
termination or transfer and upon payment to it of all expenses, including attorneys' fees, incident
thereto, 'Will execute and deliver a new lease of the Land to the Leasehold Mortgagee or its
affiliate or other nominee or to the purchaser, assignee or transferee, as the case may be, for the
remainder of the Term, containing the same covenants, agreements, terms, provisions and
limitations, as are contained herein.
(i) Upon the execution and delivery of a new lease, the new tenant, in its own
name or in the name of Landlord may take all appropriate steps as shall be necessary to remove
Tenant from the Land, but Landlord shall not be subject to any liability for the payment of fees,
including attorneys' fees, costs or expenses in connection therewith, and the new tenant shall pay
all such fees, including attorneys' fees, costs and expenses, on demand, and shall malce
reimbursement to Landlord of all such fees, including attorneys' fees, costs and expenses,
incurred by Landlord. The new tenant shall indenmify and hold Landlord harmless from any
claim, liability or damage (including attorney's fees) as a result of the action against Tenant.
(ii) Upon execution of any new lease, the new tenant named therein shall cure all
uncured breaches hereunder, except that with respect to any breach which cannot be cured by the
new tenant lUltil it obtains possession, the new tenant shall not have to malce such cure before it
has a right to obtain possession. Any nonmonetary cure required of the new tenant shall.be
commenced within ten (10) days following the date the new tenant executes the new lease or the
date the new tenant has a right to obtain possession, whichever is applicable (the "Starting
Date"), and thereafter shall be diligently prosecuted to completion. All monetary defaults shall
have been cured prior to the execution of the new lease and any monetary defaults occurring
thereafter shall be cured within ten (10) days following the Starting Date. Any failure to comply
with any of the foregoing requirements shall constitute a default under the new lease.
(iii) Upon the Starting Date, the ownership of all Improvements shall be deemed
to have been transferred directly to such transferee of Ten ant's interest in this Lease and the
provisions of Section 7.2.1 causing such Improvements to become the property of Landlord h'1
the event of a termination of this Lease shall be ineffective as applied to any such termination.
Landlord shall execute such quitclaim deed or other instrument of conveyance as may be
reasonably requested, provided such instrument shall be expressly "Without warranty of any kind
whatsoever and Landlord shall have no responsibility with regard to the state of title so
conveyed.
14.2.4 Tenant Default Under Leasehold Mortgage. If Tenant defaults under a
Leasehold Mortgage, the Leasehold Mortgagee may exercise with respect to the Property any
right, power or remedy under the Leasehold Mortgage which is not in conflict with the
provisions of this Lease.
14.2.5 No Merger. There shall be no merger of this Lease or any interest in this
Lease, nor of the leasehold estate created hereby, with the fee estate in the Land, by reason of the
fact that this Lease or such interest therein, or such leasehold estate may be directly or indirectly
held by or for the account of any person who shall hold the fee estate in the Land, or any interest
in such fee estate, nor shall there be such a merger by reason of the fact that all or any part of the
leasehold estate created hereby may be conveyed or mortgaged in a Leasehold lv10rtgage to a
Leasehold Mortgagee who shall hold the fee estate in the Land or any interest of the Landlord
under this Lease.
'ID~FH;131T B-23
n '"')"
14.2.6 Assumption ofObli~ations. For the purpose oftbis Article XIV, the
maldng of a Leasehold Mortgage shall not be deemed to constitute an assignment or transfer of
this Lease or of the leasehold estate hereby created, nor shall any Leasehold Mortgagee, as such,
be deelned an assignee or transferee of this Lease or of the leasehold estate hereby created so as
to require such Leasehold Mortgagee, as such, to assume the performance of any of the terms,
covenants or conditions on the part of Tenant to be performed hereunder. The purchaser at any
sale of this Lease and of the leasehold estate hereby created in any proceedings for the
foreclosure of any Leasehold Mortgage, or the assignee or transferee of this Lease and of the
leasehold estate hereby created under any instrument or assignment or transfer in lieu of the
foreclosure of any Leasehold Mortgage, in order to be deemed to be an assignee or transferee
and before the same shall be binding on Landlord, must assume in "Writing the performance of all
of the terms, covenants, and conditions on the part of Tenant to be performed hereunder by an
instrument, in recordable form, satisfactory to Landlord; provided however, that nothing
contained herein shall be construed to require the purchaser, assignee or transferee as described
above to be obligated to cure any default by Tenant. Although a purchaser, assignee or
transferee shall not be obligated to cure any default, if any default is not cured, Landlord may
exercise any remedy available under this Lease, including the termination of this Lease, if the
default is not cured after the expiration of any applicable cure period.
14.2.7 Llinitation of Leasehold tvfortgagee Liability for Tenant Defaults.
Notwithstanding any contrary provision hereof: (i) no Leasehold Mortgagee shall be required to
pay any liens or charges that are extinguished by the foreclosure of its Leasehold Mortgage; (ii)
any incurable default shall be, and shall be deemed to have been waived by Landlord upon
completion of foreclosure proceedings or acquisition of Tenant's interest in this Lease by any
purchaser at a foreclosure sale, or any entity who otherwise acquires Tenant's interest from the
Leasehold Mortgagee. Any entity acquiring the interest of Tenant in the Property and in this
Lease as a result of the foreclosure of a Leasehold Mortgage (or an assignment or deed in lieu
thereof) shall be liable to perform the obligations of Tenant under this Lease only during the
period such entity retains ownership of the interest of Tenant in the Property and in this Lease.
14.3 Non-Subordination of Fee. Nothing in this Lease shall be construed as an
agreement by Landlord to subordinate its fee interest in the Land or its right to rent payments
hereunder or any other right of Landlord herein. Except as expressly set forth in this Article
XIV, no Leasehold Mortgage shall impair Landlord's ability to enforce its rights and remedies
under this Lease or provided by law. Landlord shall have no obligation to encumber or
otherwise subordinate its fee interest in the Land or in this Lease to the interest of any Leasehold
Mortgagee in tbis Lease or in Tenant's leasehold estate.
14.4 Institutional Lender. Leasehold Mortgages are to be originated only by
Institutional Lenders. As used in this Lease the term "Institutional Lender" shall mean anyone
or combination of the following: (a) a commercial or savings bank, trust company, insurance
company, savings and loan association, building and loan association, pension, retirement or
welfare fund, endowment fund or foundation, investment banlcing firm, or real estate investment
trust; (b) any other institutional lender reasonably satisfactory to Landlord, or ( c) any federal,
state or local government entity or agency.
14.5 Landlord's Rights Under Leasehold Mortgages.
14.5.1 Notice of Tenant's Default. Tenant shall use best efforts to ensure that
every Leasehold Mortgage secured by a deed of trust on Tenant's leasehold estate in the Land
shall expressly provide that:
(a) the lender shall give Landlord contemporaneous notice of any default
by Tenant thereunder, if the failure to cure such default might result in acceleration of the
maturity of the debt secured by the Leasehold Mortgage; provided however, that lender's failure
to give notice shall not affect the lender's rights or ability to timely pursue all applicable
remedies. In addition, within three (3) business days follovving Tenant's receipt of any notice of
default under any fmancing document affecting the Property, Tenant shall provide Landlord with
a copy of such notice.
(b) Landlord shall have the reasonable right, but not the obligation, to
cure any default by Tenant (but -without obligation to do so); and
(c) If Landlord shall tender payment in full of all sums required to be paid
under the Leasehold Mortgage or the note secured thereby (disregarding any acceleration of
maturity thereunder, but including any costs or expenses arising as a result of such default) on or
before ninety (90) calendar days from the date of such notice of default from the lender to
Tenant, then the lender shall accept such payment and rescind the acceleration, if any. Any sums
paid by Landlord pursuant to this Section 14.5.1 shall become immediately due and payable from
Tenant to Landlord as Rent due under this Lease.
14.6 Purchase by Landlord. Landlord shall have the right and option (but not the
obligation), during the period described in the last sentence oftbis Section 14.6, by notice in
writing to the lender, to purchase any Leasehold Mortgage, the note secured thereby, and any
other instruments securing or guaranteeing such note or otherwise evidencing any obligation
secured by the Leasehold Mortgage. The purchase price therefor shall be the full amount due
and owing to the lender thereunder, including any costs, expenses, and penalties payable in
accordance with the terms thereof. The sale and assignment by the lender shall be without
recourse or warranty by the lender, except that such lender has good title to the note (or is
authorized to obtain payment or acceptance on behalf of one who has good title) and that the
transfer to Landlord vests in Landlord good title to the note or notes and in all security interests
securing the same, free and clear of all claims and interests of third parties. The right granted by
this Section 14.6 may be exercised by Landlord at any time after the lender has declared the
entire sum secured by any Leasehold Mortgage to be due and payable or has commenced
proceedings to foreclose any Leasehold Mortgage or, has requested a new Lease, whichever shall
first occur, and such right shall terminate ninety (90) days following receipt by Landlord of a
request that Landlord exercise such right given in writing from the lender after the date such
right shall first arise as above provided.
14.7 No Voluntary Surrender/Modification.
14.7.1 No Modification. So long as any Leasehold Mortgage encumbers
Tenants' leasehold interest in the Land, this Lease shall not be modified by Landlord and Tenant
'Without the consent of the holders of such Leasehold Mortgages.
EXHIBIT B- 25
p ~I'")
14.7.2 No Voluntary Surrender. So long as Tenant is not in default hereunder,
Landlord shall not accept a voluntary surrender of the Tenant's leasehold estate without the prior
written consent of all holders of any Leasehold Mortgage then in effect.
ARTICLE XV
ASSIGNMENTq TRANSFERq SUBLETTING
15.1 Restrictions on Transfer or Assignment by Tenant. Nothing in this Lease shall be
construed as an agreement by Landlord to subordinate its fee interest in the Land or its right to
rent payments hereunder or any other right of Landlord here in. Tenant shall not sell, transfer,
assign, or otherwise convey ("Transfer") all or any portion of its interest in the Property or this
Lease voluntarily, involuntarily, by operation of law, or otherwise, without Landlord's prior
written consent, which shall not be unreasonably withheld. No voluntary or involuntary
assignee, sublessee, or successor in interest of Tenant shall acquire any rights or powers under
this Lease except as expressly set forth herein.
15.2 No Involuntary Transfers. Without limiting any other restrictions on transfer
contained in this Lease, no interest of Tenant in this Lease, the Property or part thereof shall be
assignable or transferable: (i) pursuant to any voluntary or involuntary proceeding under federal
or state banlcruptcy or insolvency law; (ii) pursuant to any assignment of Tenant's assets for the
benefit of its creditors; or (iii) pursuant to any order of attachment, garnishment, receivership, or
similar action.
Any transfer described in this' Section 15.2 shall constitute a breach under this Lease by
Tenant, and Landlord shall have the right to terminate this Lease pursuant to ArtiCle XVI as a
result of any such transfer taldng place, in which case this Lease shall not be treated as an asset
of Tenant.
15.3 Assumption Agreement and Release. No permitted Transfer shall be effective
until any curable default hereunder shall have been cured and there shall have been delivered to
Landlord an assumption agreement, executed by the transferor and the proposed transferee,
whereby such transferee expressly assurn.es such obligations as arise and/or accrue at any time
after such Transfer takes place; and whereby such transferee assurn.es liability for the Lease
obligations.
15.4 Sale by Landlord. Nothing contained in this Lease shall be deemed in any way to
limit, restrict or othervvise affect the right of Landlord to sell, transfer, assign or convey all or any
portion of the right, title and estate of Landlord in the Land and in this Lease; provided, however,
that in each such instance any such sale, transfer, assignment or conveyance shall be subject to
this Lease, and Tenats's other rights arising out of this Lease shall not be affected or disturbed in
any way by any such sale, transfer, assignment or conveyance. At such time as Landlord shall
sell, transfer, assign or convey the entire right, title and estate of Landlord in the Land and in this
Lease, all obligations and liability on the part of Landlord arising under this Lease after the
effective date of such sale, transfer, assignment or conveyance shall terminate as to Landlord,
and thereupon all such liabilities and obligations shall be binding upon the transferee.
EXHIBIT 8-26
ARTICLE XVI
BREACHES., REMEDIES AND TERMINATION
16.1 Event of Default. Tenant shall be in default under this Lease upon the occurrence
of any of the following ("Events of Default"): ,
(i) Monetary Obligation. Tenant at any time is in default hereunder as
to any monetary obligation (including without limitation, Tenant's obligation to pay taxes and
assessments due on the Property or part thereof, subject to Tenant's rights to contest such
charges pursuant to Section 4.2), and such default continues for ten (10) days after Tenant
receives Notice of Breach (as defined in Section 16.2.1 );
(ii) Insurance. Tenant fails to obtain and maintain any policy of
insurance required pursuant to this Lease, and Tenant fails to immediately cure such default
following receipt of Notice of Breach;
(iii) Abandonment. Tenant abandons the Property;
(iv) Bankruptcy. Tenant files a voluntary petition in banlauptcy or
files any petition or answer seeking or acquiescing in any reorganization; arrangement,
composition, readjustment, liquidation, dissolution or similar relief for itself under any present or
future federal, state or other statute, law or regulation relating to bankruptcy, insolvency or other
relief for debtors; or seeks or consents to or acquiesces in the appointment of any trustee,
receiver or liquidator of Tenant or of all or any substantial part of its property, or of any or all of
the royalties, revenues, rents, issues or profits thereof, or malces any general assignment for the
benefit of creditors, or adrriits in writing its inability to pay its debts generally as they become
due;
(v) Reorganization. A court of competent jurisdiction enters an order,
judgment or decree approving a petition filed against Tenant seeking any reorganization,
dissolution or similar relief under any present or future federal, state or other statute, law or
regulation relating to banIa-uptcy, insolvency or other relief for debtors, and such order, judgment
or decree remains unvacated and unstayed for an aggregate of sixty (60) days from the fITst date
of entry thereof, or any trustee receiver or liquidator of Tenant or of all or any substantial part of
its property, or of any or all of the royalties, revenues, rents, issues or profits thereof is appointed
without the consent or acquiescence of Tenant and such appointment remains unvacated and
unstayed for an aggregate of sixty (60) days, such sixty (60) day period to be eArtended in all
cases during any period of a bona fide appeal diligently pursued by Tenant;
(vi) Attachment. A writ of execution or attachment or any similar
process is issued or levied against all or any part of the interest of Tenant in the Property and
such execution, attachment or similar process is not released, bonded, satisfied, or vacated or
stayed within sixty (60) days after its entry or levy, such sixty (60) day period to be extended
during any period of a bona fide appeal diligently pursued by Tenant;
(vii) Transfer. Tenant Transfers all or any portion of Tenant's interest
in this Lease, the Property or part thereof in violation of the provisions of Article "1...1"\,T and fails to
t:' V L.J I[:U-, C ""7
T\ ..... A
rescind such Transfer within thirty (30) days after written notice from Landlord or such longer
period of time as Landlord may agree;
(viii) Nonmonetary Obligations. Tenant is in default in any other of its
promises, covenants or agreements contained herein, and such default shall continue for thirty
(30) days after Tenant receives Notice of Breach specifying the particulars of such default (or
such longer time as Landlord may agree upon in 'Writing), provided that Tenant commences to
cure the default within twenty-five (25) days and thereafter prosecutes the curing of such default
with due diligence and in good faith;
(ix) Construction Obligations. Tenant is in default of this Lease if it
fails to comply with the construction schedule specified in Section 5.2.
16.2 Notice and Opportunity to Cure.
16.2.1 Notice of Breach. Unless expressly provided otherwise in this Lease, no
breach by a party shall be deemed to have occurred under this Lease unless another party first
delivers to the nonperforming party a written request to perform or remedy (the "Notice of
Breach"), stating clearly the nature of the obligation which such nonperforming party has failed
to perform, and stating the applicable period of time, if any, permitted to cure the default.
16.2.2 Failure to Give Notice of Breach. Failure to give, or delay in giving,
Notice of Breach shall not constitute a waiver of any obligation, requirement or covenant
required to be performed hereunder. Except as otherwise expressly provided in this Lease, any
failure or delay by either party in asserting any rights and remedies as to any breach shall not
operate as a waiver of any breach or of any such rights or remedies. Delay by either party in
asserting any of its rights and remedies shall not deprive such party of the right to institute and
maintain any action or proceeding '\vmch it may deem appropriate to protect, assert or enforce
any such rights or remedies.
16.3 Remedies Upon Default.
16.3.1 Landlord's Remedies. Upon the occurrence of any Event of Default and
in addition to any and all other rights or remedies of Landlord hereunder and/or provided by law,
but subject in all events to the rights and remedies of Leasehold Mortgagees lUlder Article XN
hereof, Landlord shall have the right to terminate this Lease and/or Tenant's possessory rights
hereunder, in accordance with applicable law to re-enter the Land and take possession thereof
and of the Improvements, and except as otherwise provided herein, to remove all persons and
property therefrom, and to store such property at Tenant's risk and for Tenant's account, and
Tenant shall have no further claim thereon or hereunder. In no event shall this Lease be treated
as an asset of Tenant after any fmal adjudication in banlauptcy except at Landlord's option so to
tTeat the same but no trustee, receiver, or liquidator of Tenant shall have any right to disaffrrm
this Lease.
16.3.2 Damages Upon Termination. Should Landlord elect to re-enter the Land,
or should Landlord take possession pursuant to legal proceedings or to any notice provided by
tbis Lease shall thereupon terminate, and Landlord may recover from Tenant all amounts
EXHIBIT B-28
necessary to compensate Landlord for all the detrinlent proximately caused by Tenant's failure to
perform its obligations under this Lease or which in the ordinary course are likely to result
therefrom, including all costs (including attorneys' fees) of repossession, removing persons or
property from the Land, repairs, reletting and reasonable alterations of the Project in connection
with reletting, if any.
16.3.3 Remedies Upon Abandonment. If Tenant should breach this Lease and
abandon the Property, Landlord may, at its option, enforce all of its rights and remedies under
this Lease, including the right to recover the rent as it becomes due hereunder. Additionally,
Landlord shall be entitled to recover frOlll Tenallt all costs of maintenance and preservation of
the Property, and all costs, including attorneys' and receiver's fees incurred in connection with
the appointment of and performance by a receiver to protect the Property and Landlord's interest
under this Lease.
16.3.4 Landlord Right to Continue Lease. In the event of any default under this
Lease by Tenant (and regardless of whether or not Tenant has abandoned the Property), this
Lease shall not terminate (except by an exercise of Landlord's right to terminate under Section
16.3.1) unless Landlord, at Landlord's option, elects to terminate Tenant's right to possession or,
at Landlord's further option, ,by the giving of any notice (including, without limitation, any
notice preliminary or prerequisite to the bringing of legal proceedings in unlawful detainer) to
terminate Tenant's right to possession. For so long as this Lease continues in effect, Landlord
may enforce all of Landlord's rights and remedies under this Lease, including, without
limitation, the right to recover all rent and other monetary payments as they become due
hereunder. For the purposes of this Lease, the following shall not constitute termination of
Tenant's right to possession: (a) acts of maintenance or preservation or efforts to relet the
Property; or (b) the appointment of a receiver upon initiative of Landlord to protect Landlord's
interest under this Lease.
16.3.5 Right to Injunction: Specific Performance. In the event of a default by
Tenant under this Lease, Landlord shall have the right to commence an action against Tenant for
damages, injunction and/or specific performance. Tenant's failure, for any reason, to comply
with a court-ordered injunction or order for specific performance shall constitute a breach under
this Lease.
16.4 Assignment of Subrents and Other Sums. Subject to the rights of any Leasehold
Mortgagee, Tenant inevocably assigns to Landlord the subrents and other sums due from Project
tenants, licensees or concessionaires for the purposes and upon the terms and conditions set forth
below. This assignment shall not impose upon Landlord any duty to produce rents from the
Project, or cause Landlord to be (a) a "mortgagee in possession" for any purpose, (b) responsible
for performing any of the obligations of the sublessor under any sublease, or (c) responsible for
any waste committed by lessees or any other parties, for any dangerous or defective condition of
the Project, or for any negligence in the management, upkeep, repair or control of the Project.
This is an absolute assignment (subject to the rights of any and all Leasehold Mortgagees), not
an assignment for security only; and Landlord's right to subrents is not contingent upon, and may
be exercised without possession of, the Project. Tenant hereby authorizes Lai1.dlord, at the
election of Landlord to file a UCC-l Financing Statement reflecting this assignment with the
California Secretary of State. Landlord shall provide all Leasehold Mortgagees for which
EXHIBIT B-29
p~t::
Landlord has been given an address for notice purposes with not less than twenty (20) days' prior
written notice preceding any enforcement by Landlord of its rights to subrents.
16.4.1 License. Landlord confers upon Tenant a license ("License") to collect
and retain the subrents, issues and profits of the Proj ect as they become due and payable, until
the occurrence of an Event of Default. Upon the occurrence of an Event of Default, the License
shall be automatically revoked and, subject to any rights of any Leasehold Mortgagee, Landlord
may collect and retain the subrents, issues and profits without notice and without taking
possession of the Project. This right to collect subrents, issues and profits shall not grant to
Landlord the right to possession, except as hereinafter provided, and neither said right, nor
termination of the License, shall impose upon Landlord the duty to produce subrents, issues or
profits or to maintain all or any part of the Project.
16.4.2 Application of Subrents. Subject to any rights of any Leasehold
Mortgagee, Landlord, in its sole discretion, may apply or require the application of any subrents,
issues or profits collected under this Section to the payment of any sums due hereunder in such
order as Landlord may elect.
16.4.3 Right to Receiver. Following the occurrence of an Event of Default, if
Tenant fails after receipt of a Notice of Breach to cure the default within the time period set forth
in this Lease, Landlord, at its option, may have a receiver appointed to take possession of
Tenant's interest in the Property with power in the receiver (a) to administer Tenant's interest in
the Property, (b) to collect all funds available in connection with the operation of the Property,
and (c) to perform all other acts consistent 'With Tenant's obligations under this Lease, as the
court deems proper. Landlord's rights under this Section 16.4.3 shall be subject to the rights of
all Leasehold Mortgagees.
16.4 Remedies Cumulative. No remedy in this P..Jticle XVI shall be considered
exclusive of any other remedy, but the same shall be cumulative and shall be in addition to every
other remedy given hereunder or now or hereafter existing at law or in equity or by statute, and
every power and remedy given by this Lease may be exercised from time to time and as often as
occasion may arise or as may be deemed expedient, subject to any limitations hereinabove
referred.
16.5 No Election of Remedies. The rights given in this Article XVI to receive, collect
or sue for any rent or rents, moneys or payments, or to enforce the terms, provisions and
conditions oftbis Lease, or to prevent the breach or nonobservance thereof, or the exercise of
any such right or of any other right or remedy hereunder or otherwise granted or arising, shall not
in any way affect or impair or toll the right or power of Landlord upon the conditions and subj ect
to the provisions in this Lease to terminate Tenant's right of possession because of any default in
or breach of any of the covenants, provisions or conditions of this Lease beyond the applicable
,::;ure period.
16.6 Survival of Obligations. Notbing herein shall be deemed to affect the right of
Landlord under Article IX of this Lease to indemnification for liability arising prior to the
termination of the Lease for personal injuries or property damage, nor shall anything herein be
deenled to affect the right of Landlord to equitable relief where such relief is appropriate. No
EXHIBIT B- 30
expiration or termination of the Term by operation of law, or otherwise, and no repossession of
the Land or any part thereof shall relieve Tenant of its previously accrued liabilities and
obligations hereunder, all of which shall survive such expiration, termination or repossession.
16.7 No Waiver. Except to the extent that Landlord may have agreed in writing, no
waiver by Landlord of any breach by Tenant of any of its obligations, agreements or covenants
hereunder shall be deemed to be a waiver of any subsequent breach of the same or any other
covenant, agreement or obligation, nor shall any forbearance by Landlord to seek a remedy for
any breach by Tenant be deemed a waiver by Landlord of its rights or remedies with respect to
such breach.
ARTICLE XVII
GENERAL PROVISIONS
17.1 Estoppel Certificates. At any time and from time to time, either party, on at least
twenty (20) days' prior written request by the other party, shall deliver to the party requesting
same a statement in "Writing certifying that this Lease is unmodified and in full force and effect
(or if there shall have been modifications that the same is in full force and effect as modified and
stating the modifications) and the dates to which the Rent has been paid and stating whether or
not, to the best knowledge of the certifying party, the other party is in default in the performance
of any covenant, agreement or condition contained in this Lease and, if so, specifying each such
default of which the certifying party may have knowledge. A prospective pmchaser or
mortgagee shall be entitled to rely on a statement delivered hereunder.
17.2 Quiet Eniovment. Landlord covenants and agrees that Tenant, upon paying the
Rent and all other charges herein provided for and observing and keeping all covenants,
agreements and conditions of this Lease on its part to be observed and kept, shall quietly have
and enjoy the Land during the Term of this Lease without hindrance or molestation by anyone
claiming by or through Landlord, subject, however, to the exceptions, reservations and
conditions of this Lease.
17.3 Landlord's Right to Enter the Land. Landlord and its agents may enter the Land
or the Improvements from time to time with reasonable notice, except for emergencies in which
case no notice shall be required, to inspect the same, to post notices of nomesponsibility and
similar notices, and to discharge Tenant's obligations hereunder when Tenant has failed to do so
within a reasonable time after written notice from Landlord.
17.4 Representations of Landlord and Tenant.
17.4.1 Tenant hereby represents and warrants that all of the following are true
and correct as of the Effective Date:
(a) Tenant is a corporation, duly organized, validly existing and in good
standing under the laws of the State of California;
EXHIBIT 8-31
P ~Q
(b) Tenant has taken all requisite action in connection vvith the execution
oftbis Lease and the undertaking of the obligations set forth herein. This Lease
constitutes the legally valid and binding obligation of Tenant, enforceable against
Tenant in accordance with its terms, except as it may be affected by banlauptcy,
insolvency or similar laws or by legal or equitable principles relating to or
limiting the rights of contracting parties generally; and
(c) The execution of this Lease and the acceptance of the obligations set
forth herein do not violate any court order or ruling binding upon Tenant or any
provision of any indenture, agreement or other instrument to which Tenant is a
party or may be bound. Neither the entry into nor the performance of this Lease
will violate, be in conflict with or constitute a default under any charter, bylaw,
partnership agreement, trust agreement, mortgage, deed of trust, indenture,
contract, judgment, order or other agreement, charge, right or interest applicable
to Tenant.
17.4.2 Landlord hereby represents and warrants that all of the following are true
and correct as of the Effective Date:
(a) Landlord has taken all requisite action in connection with the
execution of this Lease and the undertaking of the obligations set forth herein.
This Lease constitutes the legally valid and binding obligation of Landlord,
enforceable against Landlord in accordance with its terms, except as it may be
affected by banlcruptcy, insolvency or similar laws or by legal or equitable
principles relating to or limiting the rights of contracting parties generally.
(b) the execution of this Lease and the acceptance of the obligations set
forth herein do not violate any court order or ruling binding upon Landlord or any
provision of any indenture, agreement or other instrument to which Landlord is a
party or may be bound. N either the entry into nor the performance of this Lease
will violate, be in conflict with or constitute a default under any charter, bylaw,
partnership agreement, trust agreement, mortgage, deed of trust, indenture,
contract, judgment, order or other agreement, charge, right or interest applicable
to Landlord.
17.5 Miscellaneous.
1 7.5.1 Severability. If any term or provision of this Lease or the application
thereof to any person or circumstance shall, to any extent, be held by a court of competent
jurisdiction to be invalid or unenforceable, the remainder of this Lease, or the application of such
term or provision to persons or circumstances other than those as to which it is held invalid or
unenforceable, shall not be affected thereby, and each term and provision of this Lease shall be
valid and be enforced to the fullest extent permitted by law.
1 7.5.2 Notices. Except as otherwise specified herein, all notices to be sent
pursuant to this Lease shall be made in "Writing, and sent to the Parties at their respective
EXHIBIT 8-32
addresses specified below or to such other address as a Party may designate by written notice
delivered to the other parties in accordance with this Section. All such notices shall be sent by:
(i) personal delivery, in which case notice is effective upon delivery;
(ii) certified or registered mail, return receipt requested, in which case notice shall
be deemed delivered on receipt if delivery is confirmed by a return receipt;
(iii) nationally recognized overnight courier, vvith charges prepaid or charged to
the sender's account, in which case notice is effective on delivery if delivery is confirmed
by the delivery service;
(iv) facsimile transmission, in which case notice shall be deemed delivered upon
transmittal, provided that (a) a duplicate copy of the notice is promptly delivered by first-
class or certified mail or by overnight delivery, or (b) a transmission report is generated
reflecting the accurate transmission thereof. Any notice given by facsimile shall be
considered to have been received on the next business day if it is received after 5 :00 p.m.
recipient's time or on a nonbusiness day.
Tenant:
City of South San Francisco
400 Grand Avenue
South San Francisco, CA 94080
Attention: Economic & Community Development Director
Facsimile: (650) 829-6627
Rest Investments
P.O. Box 2505
South San Francisco, CA 94083
Landlord:
17.5.3 Captions~ Construction. The captions used for the sections and articles of
this Lease are inserted for convenience only and shall not be used to construe this Lease. The
language in all parts of this Lease shall be construed as a whole, according to its fair meaning
and not strictly for or against Landlord or Tenant.
17.5.4 Successors and Assigns. Subject to the provisions hereof, this Lease shall
be binding upon and shall inure to the benefit of the parties hereto and their respective successors
and assigns, and wherever a reference in this Lease is made to either of the parties hereto such
reference shall be deemed to include, wherever applicable, a reference to the successors and
assigns of such party, as if in every case so expressed.
17.5.5 Short Form of Lease. A memorandum of lease referring to this Lease
shall be executed by Landlord and Tenant and recorded in the Office of the San Mateo County
Recorder.
17.5.6 Governing Law. This Lease shall be construed and enforced in
accordance vvith the laws of the State of California.
17.5.7 Attornev's Fees. Should either party hereto commence an action against
the other to enforce any obligation contained herein, the prevailing party shall be entitled to
EXHIB IT B-33
PAn
recover from the other party reasonable counsel fees and costs and necessary disbursements, as
determined by the court having jurisdiction over the action.
17.5.8 Indemnity Includes Defense Costs. In any case where either party is
obligated under an express provision of this Lease, to indemnify and to save the other party
harmless from any damage or liability, the same shall be deemed to include defense of the
indemnitee by the indemnitor, such defense to be through legal counsel reasonably acceptable to
the indemnitee.
17.5.9 No Brokers~ No Third-Party Beneficiaries. Landlord represents that it has
not engaged any broker or agent to represent Landlord in this transaction. Tenant represents that
it has not engaged any broker or agent to represent Tenant in this transaction. Each party agrees
to indemnify and hold the other harmless from and against any and all liabilities or expenses,
including attorneys' fees and costs, arising out of, or in connection with claims made by any
broker or individual for commissions or fees as a result of the acts of the indemnifYing party.
There shall be no third-party beneficiaries to this Lease.
17.5.10 Disclaimer of Partnership, LenderlBorrower Relationship. The
relationship of the parties under this Lease is solely that of landlord and tenant, and it is
expressly understood and agreed that Landlord does not as a result of this Lease in any way nor
for any purpose become a partner of Tenant or a joint venturer with Tenant in the conduct of
Tenant's business or otherwise. This Lease is not intended to, and shall not be construed to,
create the relationship of principal and agent, partnership, joint venture, association, or seller' and
buyer as between Landlord and Tenant. It is further expressly understood and agreed that this
Lease is not intended to, and shall not be construed to c'reate the relationship of lender and
borrower, and Landlord does not, solely as a result of this Lease, become a lender to Tenant.
17.5.11 Entire Agreement Amendments. This Lease contains the entire
agreement between the parties relative to the leasing transaction covered hereby. All previous
correspondence, communications, discussions, agreements, understandings or proposals and
acceptances thereof between the parties or their representatives, whether oral or written, are
deemed to have been integrated into and superseded by this Lease and are of no further force and
effect except as expressly provided in this Lease. No amendment or modification hereof shall be
effective for any purpose unless in writing signed by Landlord and Tenant.
17.5.12 Time is of the Essence. Time is of the essence of this Lease and of each
provision hereof.
17.5.13 Counterparts. This Lease may be executed in one or more counterparts,
each of which shall be an original and all of which together shall constitute one and the same
instrument.
17.5.14 Action by the City, Except as may be otherwise specifically provided
herein, whenever any approval, notice, direction, consent or request by the City of South San
Francisco in its capacity as Landlord hereunder is required or permitted under this Lease, such
action shall be in writing, and such action may be given, made or taken by the City Manager or
by any person who shall have been designated by the City Manager, without further approval by
EXHIBIT B-34
the City Council. In any approval, consent, or other determination by Landlord required
hereunder, Landlord shall act reasonably and in good faith.
SIGNATURES ON FOLLOJiVING PAGE
EXHIBIT B- 35
PAl"")
IN VVITNESS "WHEREOF, Landlord and Tenant have entered into this Lease as of the
Effective Date.
LANDLORD:
CITY OF SOUTH SAN FRANCISCO
By:
Barry Nagel,
City Manager
Attest:
City Clerk
Approved as to form:
Steven T. Mattas,
City Attorney
TENANT:
REST INVESTMENTS
By:
Its:
By:
EXH I B IT 8-36
Exhibit A
LAND
(Attach legal description.)
EXHIB!T B-37
Exhibit B
INSURANCE REQUIREMENTS
Unless Landlord agrees otherwise in writing, Tenant, at its sole cost and expense, during the
Tenn hereof shall keep and maintain the following policies of insurance:
,A. Property Insurance. Insurance for the risks of direct physical loss, with minimum coverage
being the perils insured under the standard Causes of Loss - Special form (ISO Form CP 1030)
or its equivalent, covering all the Improvements, all fixtures, equipment and Personal Property,
located on or in, or constituting a part of, the Land, in an amount equal to one hundred percent
(100%) of the full replacement cost of all such property. The insurance shall (a) cover explosion
of steam and pressure boilers and similar apparatus, if any, located on the Property, and (b) cover
floods if the Land is in a Special Hazard Area, as determined by the Federal Emergency
Management Agency or as shown on a National Flood Insurance Program flood map. The
insurance required hereunder shall be in amounts sufficient to prevent Tenant from becoming a
co~insurer under the terms of the applicable policies, with not more than a Thirty-five Thousand
Dollars ($35,000) deductible (or such higher deductible approved by the Landlord, which
approval shall not be unreasonably withheld) from the loss payable for any casualty. The
policies of insurance ca.rried in accordance with this Paragraph .A.. shall contain a "replacement
cost endorsement" and an "increased cost of construction endorsement."
B, Liability Insurance. Commercial general liability insurance on an "occurrence basis"
covering all claims with respect to injury or damage to persons or property occurring on, in or
about the Land or the Improvements. At the commencement of the Term of the Lease, and at all
times during the Term, the limits of liability under this Paragraph B shall be not less than Five
Million Dollars ($5,000,000) combined single limit per occurrence, "With a deductible no greater
than Thirty-five Thousand Dollars ($35,000) or such higher deductible as may be approved by
Landlord, which approval shall not be unreasonably withheld. Upon receipt of written demand
frorn Landlord, Tenant shall increase the limits of liability insurance required hereunder to the
amount required by any then-existing Leasehold Mortgagee or commensurate "With that generally
carried by a majority of owners of other comparable projects in San Mateo County, but not
greater than that required by any then-existing Leasehold Mortgagee. The insurance shall also
include:
(i) coverage against liability for bodily injury or property damage arising out of the use,
by or on behalf of Tenant, of any owned, non-owned, leased or hired automotive
equipment in the conduct of any and all operations called for under tms Lease;
(ii) premises and operations including, without limitation, bodily injury, personal injury,
death or property damage occurring upon, in or about the Land or the Improvements on
any elevators or any escalators therein and on, in or about the adjoining sidewalks, streets
and passageways;
(Hi) broad form property damage liability;
EXHIBIT 8-38
(iv) additional insured and primm)' insured endorsements protecting Landlord and
Landlord's elected and appointed officials, officers, employees and agents; and
(v) personal injury endorsement.
C. Worker's Compensation Insurance. Worker's compensation insurance, in the amount
required under then applicable state law, covering Tenant's employees, if any, at work in or upon
the Property or engaged in services or operations in connection with the Property. Tenant shall
require that any general construction contract entered into by Tenant with regard to the initial
development of the Improvements include a contractual undertaking by the general contractor to
provide worker's compensation insurance for its employees engaged in construction of the
Improvements in an amount in 'compliance 'with applicable state law.
D. Course of Construction Insurance. Course of construction insurance in the same amount as
required in Paragraph A above for property insurance, covering all construction activities on the
Land.
E. General Insurance Provisions. All policies of insurance provided for in this Article shall be
provided under valid and enforceable policies, in such forms and amounts as hereinbefore
specified, issued by insurers licensed to do business in the State of California (or approved to do
business in California and listed on the California Department of Insurance list of Eligible
Surplus Lines Insurers or successor listing) and having a rating of A -NIll or better in Best
Insurance Guide or, if Best Insurance Guide is no longer in existence, a comparable rating from a
comparable rating service. Prior to the Commencement Date and, thereafter, not less than thirty
(30) days prior to the expiration date of each policy furnished pursuant-to this Exhibit B, Tenant
shall deliver to Landlord certificates evidencing the insurance required to be carried by Tenant
under this Exhibit B. If requested by Landlord, Tenant shall deliver within fifteen (15) days
following such request, certified, complete copies of the insurance policies required in this
Lease. Insurance policies to be provided herein shall meet the following:
(a) Each policy of insurance obtained pursuant to this Lease, other than worker's
compensation insurance, shall contain endorsements which provide (i) a waiver by the insurer of
the right of subrogation against Landlord, Tenant or any subtenant for negligence of any such
person, (ii) a statement that the insurance shall not be invalidated should any insured waive in
writing prior to the loss any or all right of recovery against any party for loss accruing to the
property described in the insurance policy, and (iii) a provision that no act or omission of Tenant
which would otherwise result in forfeiture or reduction of the insurance therein provided shall
affect or limit the obligation of the insurance company to pay the amount of any loss sustained.
(b) By endorsements, Landlord and its elected and appointed officials, officer,
employees and agents shall be named as additional insured, as appropriate, under the liability
insurance required to be maintained by Tenant hereunder.
(c) Each policy required hereunder shall include a Notice of Cancellation or
Change in Coverage Endorsement which shall provide that such policy shall not be cancelled or
materially changed without at least thirty (30) days' prior written notice by registered or certified
mail to Landlord.
EXHIBIT B-39
'DA~
(d) All insurance policies shall provide that there shall be no exclusion from
coverage for cross liability among the listed insureds.
(e) Any certificate of insurance applicable to course of construction insurance to
be maintained shall be deposited with Landlord prior to commencement of construction of any
Improvements.
(f) Each policy shall contain an endorsement that proves that the insurance
applies separately to each insured that is seeking coverage or against whom a claim is made,
except with respect to the limits of liability.
(g) Each policy shall be written as a primary policy not contributing with and not
in excess of coverage that Landlord may carry.
(h) Each policy shall expressly provide that Landlord shall not be required to give
notice of accidents or claims and that Landlord shall have no liability for prenllmns.
(i) Notwithstanding any contrary provision of this Exhibit B, all insurance
required to be carried by Tenant under this Exhibit B shall be in such amounts, "With such
additional coverages, and on such other terms as required by any Leasehold Mortgagee.
F. Blanket Policies. Any insurance provided for in this Exhibit B may be placed by a policy or
policies of blanket insurance; provided, however, that such policy or policies provide that the
amount of the total insurance allocated to the Land shall be such as to furnish protection the
equivalent of separate policies in the amounts herein required, and provided further that in all
other respects any such policy or policies shall comply with the other provisions of this Lease.
G. Waiver of Subrogation. To the extent permitted by lavl and the policies of insurance required
to be maintained hereunder, and without affecting such insurance coverage, Landlord and Tenant
each waive any right to recover against the other (a) damages for injury or death of persons, (b)
damage to property, (c) damage to the Land or the Improvements or any part thereof, or (d)
claims arising by reason of any of the foregoing, to the extent that such damages and/or claims
are covered (and only to the extent of such coverage) by insurance actually carried by either
Landlord or Tenant. This provision is intended to restrict each party (as permitted by law) to
recover against insurance carriers to the extent of such coverage, and waive fully, and for the
benefit of each, any rights and/or claims which might give rise to a right of subrogation in any
insurance carrier.
H. Compliance with Policy Requirements. Tenant shall observe and comply with the
requirements of all policies of public liability, fITe and other policies of insurance at any time in
force with respect to the Property, and Tenant shall so perform and satisfy the requirements of
the companies writing such policies that at all times companies of good standing shall be willing
to write or to continue such insurance.
L Additional Insurance. Tenant shall maintain such additional amounts or types of insurance as
shall be required by any then-existing Leasehold Mortgagee, and shall have the right to carry
8u.;\5h additional insurance as Tenant may desire from time to time or as may be required by any
Leasehold Mortgagee.
PA'7
Exhibit C
PARCEL MAP
(Attach copy of Parcel Map.)
EXHIBIT B-41
P.48
E HI I
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