THIS DOCUMENT IS A COPY OF THE EXHIBIT 10.5 to the COMPANY'S FORM 10-K FOR
THE PERIOD ENDED DECEMBER 28, 1996 FILED ON MARCH 27, 1997 PURSUANT TO A
RULE 201 TEMPORARY HARDSHIP EXEMPTION.
<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
(Mark One)
X ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended December 28, 1996
OR
TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from _______________ to _______________
Commission File Number
0-24620
DARLING INTERNATIONAL INC.
(Exact name of registrant as specified in its charter)
Delaware 36-2495346
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
251 O'Connor Ridge Blvd.
Suite 300
Irving, Texas 75038
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (972) 717-0300
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock $0.01 par value per share
(Title of Class)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such report(s)), and (2) has been subject to
such filing requirements for the past 90 days. YES X NO ____
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of the Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K/A or any
amendment to this Form 10-K/A. [ ]
The aggregate market value of the voting stock held by nonaffiliates of the
Registrant was approximately $61,000,000 as of March 25, 1997 based upon the
average bid and asked prices of such stock as reported in the National Market
System of the National Association of Securities Dealers Automated Quotation
System (the "Nasdaq National Market") on that day.
There were 5,166,394 shares of common stock, $0.01 par value, outstanding
at March 25, 1997.
DOCUMENTS INCORPORATED BY REFERENCE
Selected designated portions of the Registrant's definitive Proxy Statement
are incorporated by reference into Part III of this Annual Report.
<PAGE>
DARLING INTERNATIONAL INC. AND SUBSIDIARIES
FORM 10-K/A FOR THE FISCAL YEAR ENDED DECEMBER 28, 1996
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant has
duly caused this Form 10-K/A for the Fiscal Year Ended December 28, 1996 on
its behalf by the undersigned, thereunto duly authorized, in the city of
Irving, State of Texas, on the 7th day of April, 1997.
DARLING INTERNATIONAL INC.
By: /s/ Dennis B. Longmire
------------------------------------
Dennis B. Longmire
Chairman of the Board and
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934,
the report has been signed by the following persons on behalf of the registrant
and in the capacities and on the dates indicated.
Signature Title Date
/s/ Dennis B. Longmire Chairman of the Board and 4/7/97
- -------------------------- Chief Executive Officer
Dennis B. Longmire (Principal Executive Officer)
/s/ John R. Witt Vice President, Chief Financial Officer 4/7/97
- -------------------------- (Principal Financial Officer)
John R. Witt
/s/ Mark C. Levy Vice President and Controller 4/7/97
- --------------------------- (Principal Accounting Officer)
Mark C. Levy
/s/ Bruce Waterfall Director 4/7/97
- ---------------------------
Bruce Waterfall
/s/ Fredric J. Klink Director 4/7/97
- ---------------------------
Fredric J. Klink
/s/Craig Scott Bartlett, Jr Director 4/7/97
- ----------------------------
Craig Scott Bartlett, Jr
/s/ Denis J. Taura Director 4/7/97
- ---------------------------
Denis J. Taura
<PAGE>
CITY AND COUNTY OF SAN FRANCISCO
WILLIE L. BROWN, JR., MAYOR
LEASE NO. L-12090
BY AND BETWEEN
THE CITY AND COUNTY OF SAN FRANCISCO
THROUGH THE SAN FRANCISCO PORT COMMISSION
AND
DARLING INTERNATIONAL, INC.
a Delaware corporation
Dennis Bouey
Executive Director
SAN FRANCISCO PORT COMMISSION
Michael Hardeman, President
Frankie G. Lee, Vice-President
James Herman, Commissioner
Denise McCarthy, Commissioner
Preston Cook, Commissioner
<PAGE>
TABLE OF CONTENTS
Section Pages
1. BASIC LEASE INFORMATION.....................................1
2. Definitions.................................................4
3. Premises....................................................5
4. Term of Lease...............................................5
4.1 Term..............................................5
4.2 Termination by Port...............................5
5. Rent .......................................................6
5.1 Base Rent.........................................6
5.2 Base Rent Adjustment..............................6
5.3 Percentage Rent...................................6
5.4 Late Charges......................................6
5.5 Additional Rent...................................7
5.6 Manner of Payment.................................7
6. Taxes and Assessments.......................................7
6.1 Payment of Taxes..................................7
6.2 Possessory Interest Tax...........................7
7. Security Deposit............................................8
8. Use of the Premises.........................................8
8.1 Permitted Use.....................................8
8.2 Prohibited Activities.............................8
8.3 Premises Must be Used.............................8
9. Compliance with Laws and Regulations........................8
10. Regulatory Approvals........................................9
11. Maintenance and Repairs.....................................9
11.1 Maintenance and Repair Obligations................9
11.2 Port's Right to Inspect...........................9
11.3 Acts of God.......................................9
12. Utilities and Services......................................9
12.1 Utilities.........................................9
12.2 Services.........................................10
13. Improvements and Alterations...............................10
13.1 Consent Required................................10
13.2 Construction Requirements........................10
13.3 Improvements Part of Realty......................10
13.4 Removal of Improvements..........................10
13.5 Notice of Removal................................10
13.6 Removal of Non-Permitted Improvements............11
14. Suitability; Acceptance....................................11
15. Liens .................................................11
16. Hazardous Materials........................................11
16.1 Requirements for Handling........................11
16.2 Tenant Responsibility............................11
16.3 Requirement to Remove............................11
17. Insurance .................................................12
17.1 Required Insurance Coverage......................12
17.2 Claims-Made Policies.............................12
17.3 Annual Aggregate Limits..........................12
17.4 Payment of Premiums..............................12
17.5 Waiver of Subrogation Rights.....................12
17.6 General Insurance Matters........................13
18. Damage and Destruction.....................................13
18.1 Damage and Destruction...........................13
18.2 Waiver...........................................14
19. Eminent Domain.............................................14
19.1 General..........................................14
19.2 Partial Takings..................................14
19.3 Taking of the Facility...........................14
19.4 Temporary Takings................................14
19.5 Award; Waiver....................................14
20. Indemnity and Exculpation..................................15
20.1 Indemnity........................................15
20.2 Exculpation......................................15
20.3 Hazardous Materials Indemnification..............15
21. Assignment and Subletting..................................16
21.1 Definition of Transfer ..........................16
21.2 Port's Consent Required..........................16
21.3 Request for Transfer.............................16
21.4 Port's Consent /Refusal to Consent..............17
21.5 Fees for Review..................................18
21.6 No Release of Tenant.............................18
21.7 Assignment of Sublease Rents.....................18
22. Leasehold Mortgages; Security Interests....................18
23. Default by Tenant..........................................19
23.1 Event of Default.................................19
23.2 Port's Remedies..................................20
23.3 Damages..........................................20
23.4 No Accord and Satisfaction.......................21
24. Litigation Expenses; Attorney's Fees.......................21
24.1 Litigation Expenses..............................21
24.2 Appeals..........................................21
24.3 City Attorney....................................21
25. Port's Entry on Premises...................................21
25.1 Entry for Inspection.............................21
25.2 General Entry....................................21
25.3 Emergency Entry..................................22
25.4 No Liability.....................................22
25.5 Non-Disturbance..................................22
26. Surrender and Quitclaim....................................22
26.1 Surrender........................................22
26.2 Quitclaim........................................23
27. Holding Over...............................................23
28. Mineral Reservation........................................23
29. City Requirements..........................................23
29.1 Non-Discrimination...............................23
29.2 MacBride Principles-Northern Ireland.............23
29.3 Tropical Hardwood Ban............................23
29.4 Tobacco Products Advertising Ban.................23
30. Notices .................................................24
31. Time is of the Essence.....................................24
32. Signs .................................................24
33. Miscellaneous Provisions...................................24
33.1 California Law...................................24
33.2 Entire Agreement.................................24
33.3 Amendments.......................................24
33.4 Severability.....................................24
33.5 No Party Drafter; Captions.......................24
33.6 Singular, Plural, Gender.........................25
33.7 Successors.......................................25
33.8 Real Estate Broker's Fees........................25
33.9 Counter parts....................................25
33.10 Authority.......................................25
33.11 Waiver..........................................25
34. No Light, Air or View Easement.............................25
35. Proximity of Waterfront Transportation Project.............25
36. Proximity of Mission Bay Project...........................25
37. Waiver of Relocation Assistance Rights.....................26
EXHIBITS
Exhibit A The Premises
(this exhibit is not submitted on electronic submission;
exhibit is a one-page plot map of
property related to Lease No. L-12090)
<PAGE>
LEASE
This Lease ("Lease"), dated for reference purposes only as of July 1,
1996, is by and between the CITY AND COUNTY OF SAN FRANCISCO, a municipal
corporation ("City"), operating by and through the SAN FRANCISCO PORT COMMISSION
("Port"), as landlord, and DARLING INTERNATIONAL INC, a Delaware corporation
("Tenant").
Port and Tenant hereby agree as follows:
1 . BASIC LEASE INFORMATION
The following terms are a summary of basic lease information (the
"Basic Lease Information"). Each item below shall be deemed to incorporate all
of the terms set forth in this Lease pertaining to such item. In the event of
any conflict between the information in this Section, and any more specific
provision of this Lease, the more specific provision shall control.
1.1 PREMISES
Parcel A: Approximately 116,438 square feet of land located at
Seawall Lot 344, together with a 475 foot long by 10 foot wide
pipeline license extending from said land to the edge of Wharf
92, in the City and County of San Francisco, State of
California, as shown on Page 1, Exhibit A dated March 1, 1995
attached hereto and made a part hereof and more particularly
described on page 1 of Exhibit B attached hereto and made a
part hereof together with any and all Improvements and
Alterations thereto hereinafter the 'Parcel A Premises'; and
Parcel B: Approximately 78,408 square feet of land located at Seawall
Lot 344, in the City and County of San Francisco, State of
California, as shown on Page 2, Exhibit A dated March 1, 1995
attached hereto and made a part hereof, and more particularly
described on page 2 of Exhibit B attached hereto and made a
part hereof together with any and all Improvements and
Alterations thereto hereinafter the 'Parcel B Premises'. The
Parcel A Premises and the Parcel B Premises are hereinafter
collectively called the 'Premises'. (Section 3)
1.2 TERM: The Term shall be for 30 years commencing on March 20,
1998("Commencement Date") and terminating March 19, 2028
("Termination Date"), unless earlier terminated in accordance with
the provisions of this (Section 4)
1.3 BASE RENT: $25,734.48 per calendar month as adjusted pursuant to
Section 5.2 from July 1, 1996 to the Commencement Date and as adjusted
thereafter pursuant to Section 5.2.
1.4 RENT COMMENCEMENT DATE: The first day of the Term as above defined
(Section 1.2)
1.5 BASE INDEX: March/l994 (Section 5.2)
--------------------------------------
Month/Year - Index
1.6 PERCENTAGE RENT: (Section 5.3)
Applicable ___________ (See Addendum)
Not Applicable __XX__
1.7 SECURITY DEPOSIT: Equal to two (2) months' Base Rent but in no event
less than
INITIAL DEPOSIT: $40,692.80 (Section 7)
1.8 PERMITTED USE: (Section 8.1)
Assembly, distribution and storage transference to maritime cargo
vessels and ground and maritime trans-shipment of bulk liquid and dry
cargo and a recycling and rendering plant servicing the red meat,
poultry and fish industries; the restaurant, retail food and grocery
trade; and other organic waste sources.
1.9 MAINTENANCE AND REPAIRS: (Section 1 1.1)
Tenant shall at all times during the Term of this Lease, and at its sole
cost and expense, maintain and repair in good and working order,
condition and repair the Premises and ail Improvements and Alterations
thereon without exception and without further obligation of Port.
1.10 UTILITIES AND SERVICES: (Section 12)
Tenant shall at all lines during the Term of this Lease and at its sole
cost and expense, arrange for and purchase from the appropriate supplier
or public utility all utilities and services to include but not be
limited to; gas, electricity, water, sewer, garbage and refuge
collection and security service.
1.11 MINERAL RESERVATION: Zone 3, beginning at a point where X equals
1,456,200 and Y equals 459,300, extending 500 feet south, thence 500
feet east, thence 500 feet north, and thence 500 feet west, ending at
said point of beginning. (Section 28)
1.12 NOTICES: (Section 30)
Address for Port: Commercial Property Manager
Port of San Francisco
Room 31 00, Ferry Building
San Francisco, CA 94111
FAX No: (415) 274-0578
Telephone No: (415) 274-0510
Address for Tenant: Darling International
251 O'Connor Ridge Boulevard, Suite 300
Irving, Texas 75038
FAX No: (214) 717-1588
Telephone No: (214) 717-0300
Name/Address of Agent for Service of Process, if Tenant is
a Corporation:
CT Corporation
81 8 W. 7th Street
Los Angeles, CA 90017
<PAGE>
1.13 ADDENDUM: The following section(s) set forth in the Addendum,
attached hereto, are incorporated herein by reference:
4.2 (Termination by Port) - Deleted 6.2 (Possessory Interest Tax) -
Amended 8.4 (Permitted Activities) - Added 16 (Hazardous Materials) et
seq - Amended 17.1 (a) (General Liability Insurance) - Amended 17.2 (d)
(Personal Property Insurance) - Deleted
17.3 (e) (Business Interruption Insurance) - Deleted 17.lg (Required
Insurance Coverage) - Amended 18 (Damage and Destruction) - Amended
20.3 (Hazardous Materials Indemnification) - Amended 21.e
(Non-applicability of Certain Transfers) - Added 38 (Rent Credit for
Wharfage and Dockage) - Added 39 (Burma/Myanmar Business Prohibition) -
Added
In the event of any conflict between the provisions of the Addendum and
provisions of this Lease, the provisions of the Addendum shall control.
2. DEFINITIONS
For purposes of this Lease, the following initially capitalized terms
shall have the meanings ascribed to them in this Section:
2.1 "Additional Rent" means all taxes, assessments, insurance premiums,
operating and maintenance charges, fees, costs, expenses, liabilities
and obligations of every description which Tenant assumes or is
obligated to pay or ' discharge pursuant to this Lease, together with
every fine, penalty, interest or other charge which may be added for
non-payment or late payment, whether payable to Port or to other
persons, parties or entities designated herein.
2.2 "Agents" means, when used with reference to either party hereto, the
officers, directors, employees, agents and contractors of such party,
and their respective heirs, legal representatives successors and
assigns.
2.3 "Alterations" means any alterations, installations or additions to any
Improvements or to the Premises.
2.4 "Anniversary Date" means the first anniversary of the Commencement Date
and each anniversary of such date
thereafter provided, however, that if the Commencement Date is other
than the first day of a month, then the first Anniversary Date shall be
the first day of the thirteenth (13th) month thereafter.
2.5 "Base Rent" means the monthly Base Rent specified in Section 1.3 hereof
and described in Section 5.1 hereof. 2.6 "Base Index" means the Cost of
Living Index for the calendar month set force in Section 1.5 hereof. 2.7
"Basic Lease Information" means the information with respect to this Lease
summarized in Section 1 hereof.
2.8 "City" means the City and County of San Francisco, a municipal
corporation.
2.9 "Commencement Date" means the date on which the Term of this Lease
commences as specified in Section 1.2 hereof.
2.10 "Commission" means the San Francisco Port Commission.
2.11 "Cost of Living Index" means the United States Department of Labor's
Bureau of Labor Statistics Consumer Price Index for All Urban Consumers
(All Items: 1982-84 = 100), San Francisco-Oakland-San Jose, California.
If the aforesaid Cost of Living Index ceases to be published, any
similar index published by any other branch or department of the U.S.
Government shall be used as the index herein, and if none is published,
another index generally recognized as authoritative shall be
substituted therefore by Port. The base period used by any new index
shall be reconciled to the 1982-84 = 100 Base Index. If the Cost of
Living Index is not published for the particular calendar month in
question, the immediately preceding last calendar month for which the
index is published shall be used.
2.12 "Current Index" means the Cost of Living Index for the calendar month
immediately preceding the Anniversary Date upon which the Base Rent is
adjusted.
2.13 "Environmental Laws" means any present or future federal, state or
local laws, ordinances, regulations or policies relating to Hazardous
Material (including, without limitation, their use, handling,
transportation, production, disposal, discharge or storage) or to
health and safety, industrial hygiene or environmental conditions in,
on, under or about the Premises, including, without limitation, soil,
air, bay water and groundwater conditions.
2.14 'Facility' means the pier, building or other structure in or on which
the Premises are located.
2.15 'Handle' or 'Handling' means to use, generate, process, produce,
package, treat, store, emit, discharge or dispose.
2.16 'Hazardous Material' means any substance, waste or material which now
or in the future is determined by any state, federal, or local
governmental authority to be capable of posing a present or potential
risk of injury to health, safety, the environment or property,
including, but not limited to, all of those materials, wastes and
substances designated as hazardous or toxic by the United States
Environmental Protection Agency, the City and County of San Francisco,
the United States Department of Labor, the United States Department of
Transportation, the California [)apartment of Environmental Protection
or any other governmental agency now or hereafter authorized to
regulate materials and substances in the environment.
2.17 "Improvements" means any and all buildings, structures, fixtures or
other improvements constructed or installed on the Premises, including
those constructed by or on behalf of Tenant pursuant to this Lease
(including, without limitation, any trailers, signs, roads, trails,
driveways, parking areas, curbs, walks, fences, walls, stairs, poles,
plantings and landscaping).
2.18 "INC" means Intra building Network Cable and is defined as the
telephone wiring which begins at the terminal block nearest the point
where the telephone company wiring enters the Facility and ends at the
terminal nearest the Premises.
2.19 "Invitees" when used with respect to Tenant means the clients,
customers, invitees, guests, members, licensees, assignees and
subtenants of Tenant.
2.20 "Late Charge" means a fee equivalent to one and one-half percent
(1-1/2%) of all Rent, or any portion thereof, which is due and unpaid
for more than thirty (30) days.
2.21 'Laws" means all laws, statutes, ordinances, resolutions, regulations,
judicial decisions, proclamations, orders or decrees of any municipal,
county, state or federal government or the departments, courts,
commissions, boards and officers thereof, or other governmental or
regulatory authority with jurisdiction over the Premises or any portion
thereof.
2.22 "Leasehold Mortgage" means one or more mortgage, deed of trust or other
security agreement encumbering the leasehold estate, or Tenant's
interest, if any, in any Improvements or Tenant's interest in its
personal property or trade fixtures, as security for a loan or loans to
benefit Tenant's use of the Premises.
2.23 "Official Records" means the official records of the City and County of
San Francisco.
2.24 "Percentage Rent" means a sum equal to a percentage of Tenant's Gross
Receipts made from or upon the Premises during each calendar month of
the Term in the percentage amounts and for the items set forth in
Section 1.6, if applicable.
2.25 'Port" means the San Francisco Port Commission.
2.26 "Premises" means the real property described in Section 1.1 hereof.
2.27 "Regulatory Approval" means any authorization, approval or a permit
required by any governmental agency having jurisdiction over the
Premises, including but not limited to the Bay Conservation and
Development Commission ("BCDC').
2.28 "Rent" means the Base Rent, as adjusted pursuant to the provisions of
Section 5.2 hereof, together with Percentage Rent, if applicable, and
any and all Additional Rent.
2.29 "Tenant" means the party identified as Tenant at the beginning of this
Lease.
3. PREMISES. Port hereby leases to Tenant, and Tenant hereby hires from
Port, the Premises described in Section 1.1 hereof on the terms and
conditions of this Lease.
4. TERM OF LEASE.
4.1 Term. The Premises are leased by Tenant from Port for the Term
specified in section 1.2 hereof.
4.2 Termination by Port. Tenant's period of occupancy of the Premises
is subject to Port's right to terminate
this Lease as provided herein when the Premises is needed in
connection with a Fort program or project. As used herein, 'Port
program or project" shall mean any development or renovation, by
public and/or private parties, of the building, pier or seawall lot
in or on which the Premises is located. In the event of any such
development or renovation, Port shall have the right to terminate
this Lease without liability or expense except as specifically set
forth in this Section 4.2 upon delivery to Tenant of six (6) months
prior written notice of such termination. Tenant agrees and shall
be required to surrender possession of the Premises by the end of
such six (6) month period. Within sixty (60) days after Tenant's
surrender, Port agrees to pay Tenant a portion of those expenses
which are documented by Tenant as having been incurred by Tenant
prior to the delivery of Port's termination notice in making
alterations, additions and improvements to the Premises which were
approved in advance and in writing by Port and which were not
previously reimbursed to Tenant through rent credits, rent
abatement or other form of compensation ("Improvement Costs"). Such
Improvement Costs shall be determined by the value attributable to
any alterations, additions and improvements in any Port building
permits for such work obtained by Tenant and which are approved in
advance in writing by a Port Property Manager to the extent
supported by reasonable evidence of such expenditures provided by
Tenant. If no building permits are required for such work, value
shall only be attributed to such alterations, additions or
improvements if the value is approved in writing by a Port Property
Manager prior to the commencement of the work and if the cost is
supported by reasonable evidence of such expenditures provided by
Tenant. The portion of the Improvement Costs paid by Port shall be
a fraction. The numerator of said fraction shall be the number of
months remaining in the initial term of the Lease after Tenant
surrenders the Premises, and the denominator shall be the number of
months in the initial term of this Lease, or for work undertaken
following the commencement of the Lease, the number of months
beginning at the second month following the Port's approval of the
improvements and ending at the termination date of the initial term
of the Lease. In addition to Port's share of the Improvement Costs,
within sixty (60) days of Tenant's surrender, Port shall also pay
Tenant a termination fee equal to one month's Base Rent for each
full year remaining on the initial term after tenant's surrender of
the Premises; provided, however, in no event shall said termination
fee exceed three (3) months Base Rent. In no event shall Port be
responsible for paying any moving or relocation expense or other
expense incurred by Tenant due to any termination hereunder. Tenant
hereby waives any and all rights, benefits or privileges of the
California Relocation Assistance California Government Code 7260 et
sec., and the Uniform Relocation Assistance and Real Property
Acquisition Policies Act, 42 U.S.C. 4601 et sea. or under any
similar law, statute or ordinance now or hereafter in effect.
Nothing in this Section 4.2 shall be deemed or construed as
altering in any way the provisions of Section 18 (Damage and
Destruction) or Section 19 (Eminent Domain).
5. RENT. Tenant shall pay to Port, in the manner herein described,
the following Rent:
5.1 Base Rent. Tenant shall pay to Port Base Rent, as set forth in section
1.3 hereof, subject to adjustment in accordance with Section 5.2.
Except as otherwise provided in Section 1.3, Tenant shall make the
first payment of Base Rent on or before the Commencement Date and
thereafter shall pay the Base Rent, in advance, on or before the first
day of each calendar month throughout the Term. If the Commencement
Date is other than the first day of the month, or the Termination Date
is other than the last day of the month, the Base Rent for those
months shall be apportioned as the number of days of occupancy bears
to those months.
5.2 Base Rent Adjustment. Commencing on the first Anniversary Date of this
Lease and on each Anniversary Date thereafter, the Base Rent shall be
adjusted for the succeeding year in direct proportion to the
percentage increase in the Current Index over the Base Index. In no
case shall the Base Rent, as adjusted, be less than the Base Rent in
effect immediately prior to the Anniversary Date. If the Current Index
has increased over the Base Index, the adjusted Base Rent shall be
determined by multiplying the Base Rent set forth in Section 1.3 by a
fraction, the numerator of which is the Current Index and the
denominator of which is the Base Index, as follows:
Current Index
Base Index X Base Rent = Adjusted Base Rent
5.3 Percentage Rent. If applicable, as set forth in Section 1.6 hereof,
Tenant agrees to pay Percentage Rent to Port on the terms and
conditions set forth in the Addendum attached hereto.
5.4 Late Charges. Tenant acknowledges that late payment by Tenant to Port
of Rent will cause Port increased costs not contemplated by this
Lease, the exact amount of which will be extremely difficult to
ascertain. Such costs include, but are not limited to, processing and
accounting charges. Accordingly, a Late Charge will be paid by Tenant
for each month that such Rent, or any portion thereof, remains due and
unpaid, plus reasonable attorneys' fees incurred by Port by reason of
Tenant's failure to pay Rent when due under this Lease. Late Charges
shall be computed from the date on which such Rent first became due.
The parties agree that such Late Charges represent a fair and
reasonable estimate of the cost which Port will incur by reason of any
late payment by Tenant.
5.5Additional Rent. Tenant shall pay or cause to be paid, and discharge
or cause to be discharged, when the same shall become due, any and
all amounts of Additional Rent, as defined in Section 2.1. If Tenant
fails to pay or discharge any amount, liability or obligation of
Additional Rent Port shall have all rights, powers and remedies
provided herein or by Law in the case of nonpayment of the Base Rent.
5.6Manner of Payment. All payments due from Tenant to Port under this
Lease shall be made to Port without any abatement, deduction,
set-off, prior notice or demand, except as otherwise expressly
provided in this Lease, in lawful money of the United States of
America at Port's address set forth in Section 1.12 or to such other
person or at such other place as Port may from time to time designate
by written notice to Tenant.
6. TAXES AND ASSESSMENTS.
6.1Payment of Taxes. During the Term of this Lease, Tenant agrees to
pay, when due, to the proper authority any and all real property and
personal taxes, general and special assessments, license fees, permit
fees and ail other governmental charges of any kind or nature
whatsoever, including without limitation all penalties and interest
thereon, levied or assessed on the Premises, on Tenant's personal
property, the leasehold or subleasehold estate or Tenant's use of the
Premises, whether in effect at the time this Lease is entered into or
which become effective thereafter, and all taxes levied or assessed
on the possession, use or occupancy, as distinguished from the
ownership, of the Premises. Tenant shall not permit any such taxes,
assessments or other charges to become a defaulted lien on the
Premises or the Improvements thereon; provided, however, that in the
event any such tax, assessment or similar charge is payable in
installments, Tenant may make, or cause to be made, payment in
installments; and provided, further, that Tenant may, through such
procedures as Tenant considers necessary or appropriate, contest the
legal validity or the amount of any tax, assessment or similar charge
so long as such assessment or charge does not become a defaulted
lien. In the event of any such dispute, Tenant shall indemnify and
hold Port, City, and their Agents harmless from and against all
losses, damages, costs, or expenses, including attorneys' fees,
resulting therefrom.
6.2Possessorv Interest Tax. (a) Tenant recognizes and understands that
this Lease may create a possessory interest subject to property
taxation and that Tenant may be subject to the payment of property
taxes levied on such interest. Tenant further recognizes and
understands that any sublease or assignment permitted under this
Lease and any exercise of any option to renew or other extension of
this Lease may constitute a change in ownership for purposes of
property taxation and therefore may result in a revaluation of any
possessory interest created hereunder. (b) Tenant agrees to pay taxes
of any kind, including, but not limited to, possessory interest
taxes, that may be lawfully assessed on the leasehold interest hereby
created and to pay all other taxes, excises, licenses, permit charges
and assessments based on Tenant's usage of the Premises that may be
imposed upon Tenant by law, all of which shall be paid when the same
become due and payable and before delinquency. Tenant agrees not to
allow or suffer a lien for any such taxes to be imposed upon the
Premises or upon any equipment or property located thereon without
promptly discharging the same, provided that Tenant, if so desiring,
may have reasonable opportunity to contest the validity of the same.
(c) San Francisco Administrative Code Sections 23.6-1 and 23.6-2
require that the City and County of San Francisco report certain
information relating to this Lease, and any renewals thereof, to the
County Assessor within sixty (60) days after any such transaction and
that Tenant report certain information relating to any assignment of
or sublease under this Lease to the County Assessor within sixty (60)
days after such assignment or sublease transaction. Tenant agrees to
provide such information as may be requested by the City or Port to
enable the City to comply with this requirement within thirty (30)
days of a request in writing by Port to do so.
7. SECURITY DEPOSIT. Tenant shall pay to Part on or before the Commencement
Date, in addition to the advance payment of the first month's Base Rent, a
security deposit, in cash, in the sum specified as the Initial Deposit in
Section 1.7, as security for the faithful performance by Tenant of all
terms, covenants and conditions of this Lease. If the Base Rent is
increased pursuant to any of the provisions of this Lease, Tenant shall
increase the amount of the security deposit to maintain the same ratio of
security deposit to Base Rent as existed at the Commencement Date. Any
increase in the security deposit shall be delivered to Port on the same
date that such increase in the Base Rent is first due. Tenant agrees that
Port may (but shall not be required to) apply the security deposit in whole
or in part to (a) pay any sum due to Port under this Lease; (b) compensate
Port for any damage to the Premises caused by Tenant; or (c) cure any
default by Tenant. If Port uses any portion of the security deposit to cure
any default by Tenant hereunder, Tenant shall immediately replenish the
security deposit to the original amount. Port's obligation with respect to
the security deposit is solely that, of debtor and not trustee. Tenant
shall not be entitled to any interest on such deposit. If Tenant is not in
default at the termination of this Lease, Port shall return the unused
balance of the security deposit to Tenant after Tenant vacates the
Premises. The amount of the security deposit shall in no way limit Tenant's
obligations under this Lease, and nothing contained in this Section 7 shall
in any way diminish or be construed as waiver of any of Port's other
remedies set forth in this Lease or provided by Law or equity.
8. USE OF THE PREMISES.
8.1Permitted Use. The Premises shall be used and occupied cry for the
Permitted Use specified in Section 1.8 hereof and for no other purpose.
8.2Prohibited Activities. Tenant agrees that the following activities, by
way of example only and without limitation, are inconsistent with this
Lease and are strictly prohibited (a) any activity, or the maintaining
of any object, which is not within the Permitted Use; (b) any activity,
or the maintaining of any object, which will in any way increase the
existing rate of, affect or cause a cancellation of, any fire or other
insurance policy covering the Premises, any part, thereof or any of its
contents; (c) any activity or object which will overload or cause
damage to the Premises; (d) any activity which constitutes waste or
nuisance to owners or occupants of adjacent properties, including, but
not limited to, the preparation, manufacture or mixture of anything
that might emit any objectionable odors, noises or lights onto adjacent
properties, or the use of loudspeakers or sound or light apparatus
which can be heard or seen outside the Premises; (e) any activity which
will in any way injure, obstruct or interfere with the rights of other
tenants or of owners or occupants of adjacent properties, including
rights of ingress and access; (f) use of the Premises for sleeping or
personal living quarters; (g) any auction, distress, fire, bankruptcy
or going-out-of-business sale on the Premises without the prior written
consent of Port.
8.3 Premises Must Be Used. Tenant shall use the Premises continuously for
the Permitted Use specified in Section 1.8 and shall not allow the
Premises to remain unoccupied or unused without the prior written
consent of Port, which consent may be withheld in Port's sole
discretion.
9. COMPLIANCE WITH LAWS AND REGULATIONS. Tenant, at Tenant's sole cost and
expense, promptly shall comply with all Laws relating to or affecting the
condition, use or occupancy of the Premises in effect another at the time
of execution of this Lease or which may hereafter be in effect at any time
during the Term, whether or not the same are now contemplated by the
parties. Tenant further understands and agrees that it is Tenant's
obligation, at Tenant's sole cost and expense, to cause the Premises and
Tenant's activities and operations conducted thereon, to be in compliance
with the Americans with Disabilities Act, 42 USCS sections 12101, et seq.
Tenant understands and agrees that Port is entering into this Lease in its
capacity as a landowner with a proprietary interest in the Premises and not
as a regulatory agency of the City with certain police powers. Port's legal
status as an agency of City shall in no way limit the obligation of Tenant
to obtain any required approvals from City departments, boards or
commissions which have jurisdiction over the Premises, including Port. By
entering into this Lease, Port is in no way modifying or limiting the
obligation of Tenant to cause the Premises to be used and occupied in
accordance with all Laws.
10. REGULATORY APPROVALS. Tenant understands that Tenant's operations on the
Premises, changes in use, or Improvements or Alterations to the Premises
may require a Regulatory Approval. Tenant shall be solely responsible for
obtaining any such Regulatory Approval, and Tenant shall not seek any
Regulatory Approval without first obtaining the approval of Port. All costs
associated with applying for and obtaining any necessary Regulatory
Approval shall be borne by Tenant. Tenant shelf be solely responsible for
complying with any and ail conditions imposed by regulatory agencies as
part of a Regulatory Approval. Any fines or penalties imposed as a result
of the failure of Tenant to comply with the terms and conditions of any
Regulatory Approval shall be paid and discharged by Tenant, and Port shall
have no liability, monetary or otherwise, for said fines and penalties. To
the fullest extent permitted by Law, Tenant agrees to indemnify and hold
City, Port and their Agents harmless from and against any loss, expense,
cost, damage, attorneys' fees, penalties, claims or liabilities which City
or Port may incur as a result of Tenant's failure to obtain or comply with
the terms and conditions of any Regulatory Approval.
11. MAINTENANCE AND REPAIRS.
11.1Maintenance and Repair Obligations. Except as otherwise provided in
Section 1.9, Tenant shall at all times during the Term of this Lease,
and at its sole cost and expense, maintain and repair in good and
working order, condition and repair the Premises and all Improvements
and Alterations thereon. Except as otherwise provided in Section 1.9,
Port shall not be obligated to make any repairs, replacement or
renewals of any kind, nature or description whatsoever to the Premises
nor to any Improvements or Alterations now or hereafter located
thereon. Notwithstanding any maintenance obligations of Port set forth
in Section 1.9, in the event that Tenant, its Agents or Invitees cause
any damage (excepting ordinary wear and tear) to the Premises, Port
may repair the same at Tenant's expense and Tenant shall immediately
reimburse Port therefor.
11.2Port's Right to Inspect. In the event that damage or deterioration to
the Premises or any portion thereof which is Tenant's obligation to
maintain results in the same not meeting the standard of maintenance
required by Port for such uses as Tenant is making of the Premises,
then Tenant shall have the independent responsibility for, and shall
promptly undertake, maintenance or repair of the Premises and complete
the same with due diligence. Without limitation Section 25 hereof,
Port may make periodic inspections of the Premises and may advise
Tenant when maintenance or repair of the Premises is required, but
such right of inspection shall not relieve Tenant of its independent
responsibility to maintain such Premises and Improvements in a
condition as good as, or better than, their condition at the
Commencement Date, excepting ordinary wear and tear. If, after
reasonable notice in writing from Port, Tenant fails to undertake such
maintenance or repairs and complete the same with due diligence, then
in addition to any other remedy available to Port, Port may make such
maintenance or repairs at Tenant's expense and Tenant shall
immediately upon invoice reimburse Port therefor.
11.3Acts of God. Nothing contained herein shall require either Tenant or
Port to repair or replace the Premises or the Improvements thereon as
a result of damage caused by acts of war, earthquake, tidal wave or
other acts of God, except that this provision shall not affect any
obligation to make repairs to the Premises pursuant to Section 18 in
the event of any damage or destruction of the Premises.
12. UTILITIES AND SERVICES.
12.1 Utilities. Tenant shall make arrangements and shall pay all charges
for all utilities to be furnished on, in or to the Premises or to be
used by Tenant, including, without limitation, gas, electrical, water,
sewer and telecommunications services. Except as otherwise provided in
Section 1.10, Tenant shall pay all charges for said utilities,
including charges for the connection and installation of the utilities
specified in Section 1.10 from the location points specified therein.
Tenant shall be obligated, at its sole cost and expense, to repair and
maintain in good operating condition all utilities located within the
Premises and all utilities installed by Tenant (whether within or
outside the Premises). If Tenant requests Port to perform such
maintenance or repair, whether emergency or routine, Port shall charge
Tenant for the cost of the work performed at the then prevailing
standard rates, and Tenant agrees to pay said charges to Port promptly
upon billing. Tenant shall pay for repair of utilities located outside
the Premises (regardless of who installed the same) which are damaged
by or adversely affected by Tenant's use of such utility and shall be
responsible for all damages, liabilities and claims arising therefrom.
The parties agree that any and all utility improvements shall become
part of the realty and are not trade fixtures. Port makes no
representation or warranty that utility services, including
telecommunications services, will not be interrupted. Port shall not be
liable in damages or otherwise for any failure or interruption of any
utility services, including telecommunications services, furnished to
the Premises. No such failure or interruption shall constitute a basis
for constructive eviction, nor entitle Tenant to terminate this Lease
or abate the Rent.
12.2 Services. Tenant shall make arrangements and shall pay all charges
for all services to be furnished on, in or to the Premises or to be
used by Tenant, including, without limitation, garbage and trash
collection, janitorial service and extermination service.
13. IMPROVEMENTS AND ALTERATIONS.
13.1 Consent Required. Tenant shall not make, nor cause or suffer to be
made, any Alterations or Improvements to the Premises until Tenant
shall have procured and paid for all Regulatory Approvals required to
be obtained for such Alterations and Improvements, including, but not
limited to, any building or similar permits required by Port or its
Chief Harbor Engineer in the exercise of its jurisdiction with respect
to the Premises.
13.2 Construction Requirements. All Alterations or Improvements to the
Premises made by or on behalf of Tenant shall be subject to the
following conditions, which Tenant covenants faithfully to perform:
(a)All Alterations and Improvements shall be constructed in a good
and workmanlike manner and in compliance with all applicable
building, zoning and other applicable Laws, and compliance with the
terms of and the conditions imposed in any Regulatory Approval.
(b)All Alterations and Improvements shall be performed with
reasonable dispatch, delays beyond the reasonable control of Tenant
excepted; and
(c)At the completion of the construction of the Alterations or
Improvements, Tenant shall furnish one (1) set of "as-built"
drawings of the same made on or to the Premises. Unless otherwise
stated as a condition of the Regulatory Approval, this requirement
may be fulfilled by the submittal after completion of the
Alterations or Improvements of a hand-corrected copy of the
approved permit drawing(s).
13.3 Improvements Part of Realtv. All Alterations or Improvements to the
Premises made by or on behalf of Tenant which may not be removed
without substantial injury to the Premises shall immediately upon
construction become part of the realty, shall be owned by Port and
shall, at the end of the Term hereof, remain on the Premises
without compensation to Tenant, unless Port first waives its right
to the Alterations or Improvements in writing.
13.4 Removal of Improvements. At Port's election made in accordance with
Section 13.5 hereof, Tenant shall be obligated at its own expense
to remove and relocate or demolish and remove (as Tenant may
choose) any or all Alterations or Improvements which Tenant has
made to the Premises, including without limitation all telephone
wiring and equipment installed by Tenant. Tenant shall repair, at
its own expense, in good workmanlike fashion any damage occasioned
thereby.
13.5 Notice of Removal. Prior to the effective termination date of this
Lease, Port shall give written notice to Tenant (herein "Notice of
Removal") specifying the Alterations or Improvements or portions
thereof which Tenant shall be required to remove and relocate or
demolish and remove from the Premises, in accordance with Section
13.4. If termination is the result of loss or destruction of the
Premises or any Improvements thereon, Port shall deliver said
Notice of Removal to Tenant within a reasonable time after the loss
or destruction. If Tenant falls to complete such demolition or
removal on or before the termination of this Lease, Port may
perform such removal or demolition at Tenant's expense, and Tenant
shall reimburse Port upon demand therefor.
13.6 Removal of Non-Permitted Improvements. If Tenant constructs any
Alterations or Improvements to the Premises without Port's prior
written consent or without complying with section 13.2 hereof,
then, in addition to any other remedy available to Port, Port may
require Tenant to remove, at Tenant's expense, any or all such
Alterations or Improvements and to repair, at Tenant's expense and
in good workmanlike fashion, any damage occasioned thereby. Tenant
shall pay to Port all special inspection fees as set forth in the
San Francisco Building Code for inspection of work performed
without required permits.
14. SUITABILITY; ACCEPTANCE. Tenant acknowledges that Port has made no
representations or warranties concerning the Premises, including without
limitation, the seismological condition thereof. By taking possession of the
Premises, Tenant shall be deemed to have inspected the Premises and accepted
the Premises in an "As-Is" condition and as being suitable for the conduct of
Tenant's business.
15. LIENS. Tenant shall keep the Premises free from any liens arising out
of any work performed, materials furnished or obligations incurred by Tenant
or its Agents. In the event that Tenant shall not, within twenty (20) days
following the imposition of any such lien, cause the same to be released of
record, Port shall have, in addition to all other remedies provided by this
Lease or by Law, the right but not the obligation to cause the same to be
released by such means as it shall deem proper, including without limitation,
payment of the claim giving rise to such lien. All slims paid by Fort for such
purpose and ail reasonable expenses incurred by Port in connection therewith
shall be payable to Port by Tenant within thirty (30) days following written
demand by Port.
16. HAZARDOUS MATERIALS.
16.1 Requirements for Handling. Neither Tenant nor its Agents or Invitees,
shall Handle in, on or about the Premises any Hazardous Material
without the prior written consent of Port, which consent shall not be
unreasonably withheld so long as Tenant demonstrates to Port's
reasonable satisfaction that such Hazardous Material is necessary to
Tenant's business, will be Handled in a manner which strictly
complies with all Environmental Laws and will not materially increase
the risk of fire or other casualty to the Premises. Notwithstanding
the foregoing, Tenant may Handle on the Premises janitorial or office
supplies or materials in such limited amounts as are customarily used
for general office purposes so long as such Handling is at all times
in full compliance with all Environmental Laws.
16.2 Tenant Responsibility. Subject to the restrictions set forth in
Section 16.1 hereof, Tenant shall Handle all Hazardous Materials
discovered on the Premises during the Term of this Lease or
introduced on the Premises by Tenant, its Agents or Invitees, in
compliance with all Environmental Laws. Tenant shall not be
responsible for the safe Handling of Hazardous Materials introduced
on the Premises during the Term of this Lease by City, Port or their
Agents. Tenant shall protect its employees and the general public in
accordance with all Environmental Laws. Port may from time to time
request, and Tenant shall be obligated to provide, information
reasonably adequate for Port to determine that any and all Hazardous
Materials are being Handled in a manner which complies with all
Environmental Laws. Port shall have the right to inspect the Premises
for Hazardous Materials at reasonable times, pursuant to Section 25.1
hereof.
16.3 Requirement to Remove. Prior to termination of this Lease, Tenant, at
its sole cost and .expense, shall remove any and all Hazardous
Materials introduced in, on, under or about the Premises by Tenant,
its Agents or Invitees. Further, Tenant, at its sole cost and
expense, shall remove any Hazardous Material discovered on the
Premises during the Term of this Lease which is required to be
removed by any governmental agency, including Port; provided however,
that Tenant shall not be obligated to remove any Hazardous Material
introduced onto the Premises during the Term of this Lease by the
City, Port or their Agents. Prior to the termination of this Lease,
Port and Tenant shall conduct a joint inspection of the Premises for
the purpose of identifying a Hazardous Materials existing on the
Premises which Tenant is required to remove.
17. INSURANCE.
17.1 Required Insurance Coverage. Tenant, at its sole cost and expense,
shall maintain, or cause to be maintained, throughout the Term of
this Lease, the following insurance:
(a) General Liability Insurance. Comprehensive or commercial general
liability insurance, with limits not less than One Million
Dollars ($1,000,000.00) each occurrence combined single limit for
bodily injury and property damage, including coverage's for
contractual liability, independent contractors, broad form
property damage, personal injury, products and completed
operations, and fire damage and legal liability with limits not
less than Two Hundred Fifty Thousand Dollars ($250,000.00).
(b) Automobile Liability Insurance. Comprehensive or business
automobile liability insurance with limits not less than One
Million Dollars ($1,000,000.00) each occurrence combined single
limit for bodily injury and property damage, including coverages
for owned and hired vehicles and for employer's non-ownership
liability, which insurance shall be required if any automobiles
are operated on the Premises.
(c) Worker's Compensation: Jones Act,: U.S. Longshore and Harbor-
worker's Act Insurance. Worker's Compensation Insurance, U.S.
Long-shore and Harborworker's Act Insurance and Jones Act
Insurance with employer's liability limit not less than One
Million Dollars ($1,000,000.00) for each accident, on employees
eligible for each. In the event Tenant is self-insured for the
insurance required pursuant to this Section 17.1 (c), it shall
furnish to Port a current Certificate ofPermission to Self-Insure
signed by the Department of Industrial Relations, Administration
of Self-Insurance, Sacramento, California.
(d) Personal Property Insurance. Tenant, at its sole cost and
expenses, shall procure and maintain on all of its personal
property and Alterations, in, on, or about the Premises, property
insurance on an all-risk form, excluding earthquake and flood, to
the extent of full replacement value. The proceeds from any such
policy shall be used by Tenant for the replacement of Tenant's
personal property.
(e) Business Interruption Insurance Tenant, at its sole cost and
expense, shall maintain business interruption insurance insuring
that the Base Rent shall be paid to Port for a period of up to
one year if Tenant is unable to operate its business at the
Premises due to a risk insured against by the personal property
insurance referred to in Section 17.1(d) above. Said insurance
also shall cover business interruptions due to riots or civil
commotion.
(f) Required by Law. Such other insurance as required by Law.
(g) See Addendum. Such other insurance as specified in the Addendum
attached to this Lease, if any.
17.2 Claims-Made Policies. If any of the insurance required in Section
17.1 is provided under a claims-made form of policy, Tenant shall
maintain such coverage continuously throughout the Term and without
lapse for a period of three years beyond the termination of this
Lease, to the effect that should occurrences during the Term give
rise to claims made after termination of this Lease, such claims
shall be covered by such claims-made policies.
17.3 Annual Aggregate Limits. If any of the insurance required in Section
17.1 is provided under a form of coverage which includes an annual
aggregate limit or provides that claims investigation or legal
defense costs be included in such annual aggregate limit, such annual
aggregate limit shall be double the occurrence limits specified
herein.
17.4 Payment of Premiums. Tenant shall pay the premiums for maintaining
all required insurance.
17.5 Waiver of Subrogation Rights. The parties release each other,
and their respective authorized representatives, from any claims for
damage to the Premises or to the fixtures, personal property,
Improvements or Alterations of either Port or Tenant in or on the
Premises which are caused by or result from risks insured against
under any property insurance policies carried by the parties and
in force at the time of any such damage, to the extent such claims
for damage are paid by such policies. Each party shall cause each
property insurance policy obtained by it to provide that the
insurance company waives all right of recovery by way of subrogation
against the other party in connection with any damage covered by
any policy.
17.6 General Insurance Matters.
(a) All liability insurance policies required to be maintained by
Tenant hereunder shall contain a cross-liability clause, shall name
as additional insureds "THE CITY AND COUNTY OF SAN FRANCISCO AND
THE SAN FRANCISCO PORT COMMISSION AND THEIR OFFICERS, DIRECTORS,
EMPLOYEES AND AGENTS," shall be primary to any other insurance
available to the additional insureds with respect to claims arising
under this Lease, and shall provide that such insurance applies
separately to each insured against whom complaint is made or suit
is brought except with respect to the limits of the company's
liability.
(b) All insurance policies required to be maintained by Tenant
hereunder shall be issued by an insurance company or companies
reasonably acceptable to Port. Tenant's compliance with this
Section shall in no way relieve or decrease Tenant's liability
under this Lease.
(c) All insurance policies required to be maintained by Tenant
hereunder shall provide for thirty (30) days prior written notice
of cancellation or intended non-renewal or reduction in coverage to
Tenant and Port. Such notice shall be given in accordance with the
notice provisions of Section 30 of this Lease.
(d) Tenant shall deliver to Port certificates of insurance in a form
satisfactory to Port evidencing the coverages required herein,
together with evidence of payment of premiums, on or before the
Commencement Date, and upon renewal of each policy not less than
thirty (30) days before expiration of the term of the policy.
Tenant shall, upon Port's request, promptly furnish Port with a
complete copy of any insurance policy required hereunder.
(e) Not more often than every year and upon not less than sixty (60)
days prior written notice, Port may require Tenant to increase the
insurance limits set forth in Section 17.1 above if Port finds in
its reasonable judgment that it is the general commercial practice
in San Francisco to carry insurance in amounts substantially
greater than those amounts carried by Tenant with respect to risks
comparable to those associated with the use of the Premises.
18. DAMAGE AND DESTRUCTION.
18.1 Damage and Destruction. If the Premises or the Facility are damaged
by fire or other casualty, then Port shall repair the same provided
that funds for such repairs are appropriated by Port, in its sole
discretion, for such purpose and provided that such repairs can be
made within two hundred ten (210) days after the date of such damage
(the "Repair Period"). In the event such corrections are satisfied,
this Lease shall remain in full force and effect except that Tenant
shall be entitled to a proportionate reduction of Base Rent during
the Repair Period based upon the extent to which such damage and the
making of such repairs materially interferes with Tenant's use or
occupancy of the Premises. Port shall use its best efforts to notify
Tenant within ninety (90) days after the date of such damage whether
or not such repairs can be made within the Repair Period, and Port's
determination thereof shall be binding on Tenant. If such repairs
cannot be made within the Repair Period, Port shall have the option
to notify Tenant of: (a) Port's intention to repair such damage and
diligently prosecute such repairs to completion within a reasonable
period after the Repair Period, subject to appropriation of funds, in
which event this Lease shall continue in full force and effect and
the Base Rent shall be reduced as provided above; or (b) Port's
election to terminate this Lease as of a date specified in such
notice, which date shall be not less than thirty (30) nor more than
sixty (60) days after notice is given by Port. In case of
termination, the Base Rent shall be reduced as provided above, and
Tenant shall pay such reduced Base Rent up to the date of
termination. If at any time during the last twelve (12) months of the
Term, the Premises or the Facility is damaged or destroyed, then
either Port or Tenant may terminate this Lease by giving written
notice to the other party of its election to do so within thirty (30)
days after the date of the occurrence of such damage; provided,
however, Tenant may terminate only if such damage or destruction
substantially impairs its use or occupancy of the Premises. The
effective date of termination shall be specified in the notice of
termination, which date shall not be more than thirty (30) days from
the date of the notice. Notwithstanding anything to the contrary in
this Lease, Port shall have no obligation to repair the Premises or
the Facility in the event the damage or destruction is attributable
to any act or omission of Tenant, its Agents or Invitees. In no event
shall Port be required to repair any damage to Tenant's personal
property or any paneling, decorations, railings, floor coverings, or
any Improvements or Alterations installed or made on the Premises by
or at the expense of Tenant. In the event the Premises or the
Facility is substantially damaged or destroyed and Port intends to
rebuild for public purposes inconsistent with this Lease, Port may
terminate this Lease upon written notice to Tenant.
18.2 Waiver. Port and Tenant intend that the provisions of this Section
govern fully in the event of any damage or destruction and
accordingly, Port and Tenant each hereby waives the provisions of
Section 1932, subdivision 2, and Section 1933, subdivision 4, of the
Civil Code of California or under any similar Law now or hereafter in
effect.
19. EMINENT DOMAIN.
19.1 General. If ail or part of the Premises shall be taken by any public
or quasi-public authority under the power of eminent domain or
conveyance in lieu thereof, this Lease shall terminate as to any
portion of the Premises so taken or conveyed on the date when title
or the right to possession vests in the condemnor ("Date of Taking").
19.2 Partial Takings. If (a) a part of the Premises shall be taken by any
public or quasi-public authority under the power of eminent domain or
conveyance in lieu thereof, and (b) Tenant is reasonably able to
continue the operation of Tenant's business in that portion of the
Premises remaining, and (c) Port elects to restore the Premises to an
architectural whole, then this Lease shall remain in effect as to
said portion of the Premises remaining, and the Base Rent payable
from the Date of Taking shall be reduced by an amount that is in the
same ratio to the Base Rent as the value of the area so taken bears
to the total value of the Premises immediately before the Date of
Taking. If, after a partial taking, Tenant is not reasonably able to
continue the operation of its business in the Premises or Port elects
not to restore the Premises to an architectural whole, this Lease may
be terminated by either Port or Tenant by giving written notice to
the other party no earlier than thirty (30) days prior to the Date of
Taking and no later than thirty (30) days after the Date of Taking.
Such notice shall specify the date of termination which shall be not
less than thirty (30) nor more than sixty (60) days after the date of
said notice.
19.3 Taking of the Facility. If any substantial portion of the Facility is
taken under the power of eminent domain or conveyance in lieu
thereof, whether any portion of the Premises is taken or not, Port
shall have the right to terminate this Lease by written notice to
Tenant within thirty (30) days of the Date of Taking.
19.4 Temporary Takings. Notwithstanding anything to the contrary contained
in this Section, if a taking occurs with respect to all or any part
of the Premises for a limited period of time, this Lease shall remain
unaffected thereby and Tenant shall continue to pay Rent and to
perform all of the terms, conditions and covenants of this Lease.
Tenant shall be entitled to receive that portion of any award
representing compensation for the use or occupancy of the Premises
during the Term up to the total Rent owing by Tenant for the period
of the taking, and Port shall be entitled to receive the balance of
any award.
19.5 Award; Waiver. Port shall be entitled to any and all payment, income,
rent, award, or any interest therein whatsoever which may be paid or
made in connection with any taking or conveyance hereunder, and
Tenant shall have no claim against Port or otherwise for the value of
any unexpired term of this Lease. Notwithstanding the foregoing, to
the extent that the same shall not diminish Port's recovery for such
taking, Tenant shall have the right to make a claim, and to receive
any award specifically made to Tenant, for moving expenses and for
loss or damage to Tenant's trade fixtures, equipment and movable
furniture. Port and Tenant intend that the provisions of this Section
govern fully in the event of condemnation and accordingly, Port and
Tenant each hereby waive any right to terminate this Lease in whole
or in part under Sections 1265.120 and 1265.130 of the California
Code of Civil Procedure or under any similar law now or hereafter in
effect.
20. INDEMNITY AND EXCULTATION.
20.1 Indemnity. Tenant shall indemnify and hold Port, City, and their
agents, officers, directors, contractors and employees (collectively,
"Agents") harmless from, and, if requested, shall defend them against
any and all claims, direct or vicarious liability, damage, injury or
loss arising directly or indirectly out of: (a) any injury to or
death of any person, including employees of Tenant, or damage to or
destruction of any property occurring in, on or about the Premises,
or any part thereof, from any cause whatsoever, or (b) any default by
Tenant in the observance or performance of any of the terms,
covenants or conditions of this Lease, or (c) the use, occupancy or
condition of the Premises or the activities therein by Tenant, its
Agents, or clients, customers, invitees, guests, members, licensees,
assignees and subtenants (collectively, "Invitees"). This indemnity
shall be enforceable regardless of the negligence of Port or City,
and regardless of whether liability without fault is imposed or
sought to be imposed on Port or City. This indemnity shall be
enforceable except to the extent that such indemnity is void or
otherwise unenforceable under applicable law in effect on, or validly
retroactive to, the date of this Lease. This indemnity includes all
such loss, damage, injury, liability or claims as described above,
loss predicated in whole or in part, upon active or passive
negligence of Port, City or their Agents. This indemnity shall
exclude claims, liability, damage or loss resulting solely and
exclusively from the willful misconduct of Port or City which is not
contributed to by any act of, or by any omission to perform some duty
imposed by law or agreement on, Tenant, its Agents or invitees.
In addition to Tenant's obligation to indemnify Port and City,
Tenant specifically acknowledges and agrees that it has an immediate
and independent obligation to defend Port and City from any claim
which actually or potentially falls within this indemnification
provision, even if the allegations are or may be groundless, false or
fraudulent. Tenant's obligation to defend shall arise at the time
such claim is tendered to Tenant by Port and/or City and shall
continue at all times thereafter.
The foregoing indemnity obligation of Tenant shall include without
limitation, indemnification from all loss and liability, including
attorney's fees, court costs and all other litigation expenses. This
indemnification by Tenant shall begin from the first notice that any
claim or demand is or may be made. The provisions of this section
shall survive the termination of this Lease with respect to any
damage, destruction, injury or death occurring prior to such
termination.
20.2 Exculpation. Tenant, as a material part of the consideration to be
rendered to Port, hereby waives any and ail claims against Port, City
and their Agents, and agrees to hold Port, City and their Agents
harmless from any claims for damages to goods, wares, goodwill,
merchandise, equipment or business opportunities and by persons in,
upon or about said Premises for any cause arising at any time,
including without limitation all claims arising from the joint or
concurrent negligence of Port or City or their Agents, but excluding
any intentionally harmful acts committed solely by Port or City.
20.3 Hazardous Materials indemnification. Tenant shall indemnify, defend
and hold Port, City and their Agents harmless from any and all
claims, judgments, damages, penalties, fines, costs, liabilities or
losses which arise during or after the Term of this Lease as a result
of the Handling of Hazardous Materials on the Premises by Tenant, its
Agents or Invitees, including without limitation, all costs of
investigating and remediating the same, damages for diminution in the
value of the Premises, damages for the loss or restriction on use of
rentable or usable space or of any amenity of the Premises, damages
arising from any adverse impact on marketing of any such space and
sums paid in settlement of claims, attorneys' fees, consultant fees
and expert fees. This indemnification of Port and City by Tenant
includes, but is not limited to, costs incurred in connection with
any investigation of site conditions or any clean-up, remediation,
removal or restoration work requested by Port or required by any
federal, state or local governmental agency or political subdivision
because of Hazardous Material present in the soil or groundwater in,
on or under the Premises or in any Improvements. Without limiting the
foregoing, if the presence of any Hazardous Material in, on, under or
about the Premises caused or permitted by Tenant results in any
contamination of the Premises, Tenant, at its sole expense, promptly
shall take all action that is necessary to return the Premises to.
the condition existing prior to the introduction of such Hazardous
Material in, on, under or about the Premises; provided that Port
approval of such actions shall first be obtained, which approval
shall not be unreasonably withheld so long as such actions could not
potentially have any material adverse effect upon the Premises.
Tenant's obligations hereunder shall survive the termination of this
Lease.
21. ASSIGNMENT AND SUBLETTING.
21.1 Definition of Transfer. The occurrence of any of the following
(whether voluntarily, involuntarily or by operation of Law) shall
constitute a "Transfer" of this Lease:
(a) any direct or indirect assignment, conveyance, alienation, sublease,
or other transfer Tenant's interest in this Lease or in the Premises,
or any part thereof or interest therein; or
(b) the use of all or part of the Premises by any person or entity other
than Tenant, except Tenant's authorized Agents or Invitees; or
(c) if Tenant is a privately-held corporation, the dissolution, merger,
consolidation or other reorganization of Tenant, or any cumulative or
aggregate sale, transfer, assignment or hypothecation of fifty
percent (50%) or more of the total capital stock of Tenant or any
sale or cumulative sales of fifty percent (50%) or more of the value
of the assets of Tenant; or
(d) if Tenant is a partnership or an unincorporated association,
(i) the withdrawal or substitution(whether voluntarily, involuntarily
or by operation of Law and whether occurring at one time or over a
period of time) of any partner(s) owning fifty percent or more
of said partnership or association, or
(ii) the cumulative or aggregate sale, transfer, assigment or
hypothecation of fifty percent (50%) or more of any interest in the
capital or profits of such partnership or association, or
(iii) the dissolution of the partnership or association.
As used herein, the term "Transfer" includes a transfer of any
interest in this Lease held by any subtenant, assignee or transferee,
but does not include any hypothecation, encumbrance or mortgage of
this Lease made in accordance with Section 22.
21.2 Port's Consent Required. Tenant shall not make or permit any Transfer
of this Lease except with the prior written consent of Port in each
instance as evidenced by Port Commissions resolution and in full
compliance with all of the terms and provisions of this Section 21.
Any Transfer of this Lease occurring without full compliance with all
of the terms and conditions hereof shall constitute an incurable
breach by Tenant and shall be voidable at the option of Port.
21.3 Request for Transfer. Tenant shall give Port at least forty-five (45)
days prior written notice or any desired Transfer (herein "Notice of
Request to Transfer") and shall provide Fort with the following
information in writing: (1) the name, address, legal composition and
ownership of the proposed transferee, (2) the current balance sheet
and profit and loss statements (herein "financial statements") for
the proposed transferee and for any other entity or person who is to
be liable for Tenant's obligations under this Lease, such financial
statements to be certified in writing to be true and correct and to
be prepared in accordance with generally accepted accounting
principles and to cover a period of three years prior to the proposed
effective date of the Transfer (or for such shorter period as the
proposed transferee or other person may have been in existence), (3)
a full description of the terms and conditions of the proposed
Transfer, including copies of any and all proposed subleases or
assignment agreements or other documents and instruments concerning
the proposed Transfer, (4) a description of the proposed use of the
Premises by the proposed transferee, including any required or
desired Alterations or Improvements to the Premises that may be
undertaken by such transferee in order to facilitate its proposed
use, (5) complete information regarding all payments to be made or
other consideration to be given in connection with the Transfer; (6)
a list of personal, business and credit references of the proposed
transferee, (7) a current financial statement of Tenant, and (8) any
other information, documentation or evidence as may be requested by
Port, all in sufficient detail to enable Port to evaluate the
proposed Transfer and the prospective transferee. Tenant's Notice of
Request to Transfer shall not be deemed to have been served or given
until such time as Tenant has provided Port with all information set
forth hereinabove. Tenant shall immediately notify Port of any
modifications to the proposed terms of the Transfer.
21.4 Port's Consent/Refusal to Consent. Upon receiving a Notice of Request
to Transfer, Port shall have the right to do any of the following:
(a) Port may consent to the proposed Transfer, subject to any
reasonable conditions upon such Transfer, which conditions may
include, without limitation: (i) that the proposed transferee
expressly assume all obligations of Tenant under this Lease
without, however, Port releasing Tenant therefrom; (ii) that in the
event this Lease is terminated prior to the expiration of any
sublease, at the election of Port, such termination shall operate
to terminate all existing subleases entered into by Tenant without
further notice from Port; and (iii) that the sublease or other
Transfer agreement contain,: (A) an indemnification clause and
waiver of claims provisions in favor of Port and City identical to
those contained in Section 20 of this Lease; (B) a clause requiring
the proposed transferee to name City, Port and their Agents as
additional insureds under all liability and other insurance
policies; and (C) a clause requiring the proposed transferee to
acknowledge Port's right to demand increased insurance coverage to
normal amounts consistent with the proposed transferee's business
activities on the Premises.
(b) Port may deny its consent to the proposed Transfer on any
reasonable ground. Reasonable grounds shall include, without
limitation, any one or more of the following: (i) that the proposed
transferee's financial condition is or may become insufficient to
support all of the financial and other obligations of this Lease;
(ii) that the use to which the Premises will be put by the proposed
transferee is inconsistent with the terms of this Lease or
Otherwise will materially and adversely affect any interest of
Port; (iii) that the nature of the proposed transferee's intended
or likely use of the Premises would involve an increased risk of
the use, release or mishandling of Hazardous Materials or otherwise
increase the risk of fire or other casualty; (iv) that the business
reputation or character of the proposed transferee or any of its
affiliates is not reasonably acceptable to Port; (v) that the
proposed transferee is not likely to conduct on the property a
business of a quality substantially equal to that conducted by
Tenant; or (vi) that Port has not received assurances acceptable to
Port in its sole discretion that all past due amounts owing from
Tenant to Port (if any) will be paid and all other defaults on the
part of Tenant (if any) will be cured prior to the effectiveness of
the proposed Transfer. If Port denies its consent to the proposed
Transfer pursuant to this subsection (b), and if Tenant shall so
request in writing, Port shall provide to Tenant a statement of the
basis on which Port denies its consent.
(c) One hundred percent (100%) of all sums paid or payable to Tenant by
the transferee in excess of the then-existing Rent payable by
Tenant attributable to the portion of the Premises being
transferred, including without limitation, any rent and all other
sums or other consideration received by Tenant as a result of the
Transfer, in whatever form (less expenses for verifiable,
reasonable and customary brokerage commissions, Tenant
Improvements, lease concessions, value of Tenant's trade fixtures
conveyed and other expenses actually paid or obligations incurred
by Tenant in connection with the Transfer and/or expenses of
operating the Premises paid or incurred by Tenant) shall be paid by
Tenant to Port immediately upon receipt thereof by Tenant as
Additional Rent hereunder. Notwithstanding the foregoing, in the
event this Lease is assigned in connection with a sale of Tenant's
business, including the sale of Tenant's trade fixtures at the
Premises and Tenant's goodwill, and the assignee will continue to
operate the same business that Tenant operated at the Premises,
then the sums payable by Tenant to Port pursuant to this Section
21.4(c) shall be limited to those amounts attributable to the value
of Tenant's leasehold interest and shall not include amounts
attributable to the value of Tenant's goodwill, as such amounts are
determined by Port in Port's reasonable discretion.
(d) Tenant acknowledges and agrees that each of the rights of Port set
forth in this Section 21 is a reasonable limitation on Tenant's
right to assign or sublet for purposes of California Civil Code
Section 1951.4.
(e) No consent to any proposed Transfer, whether conditional or
unconditional, shall be deemed to be a consent to any other or
further Transfer of this Lease, or any other Transfer of this Lease
on the same or other conditions. No interest of Tenant in this
Lease shall be assignable by operation of Law.
21.5 Fees for Review. Tenant shall reimburse Port for all costs, including
without limitation attorney's fees, which are incurred by Port in
connection with the review, investigation, processing, documentation
and/or approval of any proposed Transfer.
21.6 No Release of Tenant. The acceptance by Port of Rent or other payment
from any other person shall not be deemed to be a waiver by Port of
any provision of this Lease or to be a consent to any subsequent
Transfer or to be a release of Tenant from any obligation under this
Lease. No Transfer of this Lease shall in any way diminish, impair or
release any of the liabilities and obligations of Tenant, any
guarantor or any other person liable for all or any portion of
Tenant's obligations under this Lease. The joint and several
liability of Tenant and Tenant's successors or transferees and the
obligations of Tenant under this Lease shall not be discharged,
released or impaired by any agreement by Port modifying any provision
of this Lease or extending time for performance hereunder or by any
waiver or failure of Port to enforce any obligations hereunder.
21.7 Assignment of Sublease Rents. Tenant immediately and irrevocably
assigns to Port, as security for Tenant's obligations under this
Lease, all of Tenant's interest in any rent from any Transfer of all
or any part of the Premises; except that, until the occurrence of an
act of default by Tenant, Tenant shall have the right to receive,
collect and enjoy such rents.
22. Leasehold Mortgages, Security Interests. Tenant shall, upon the prior
writ-ten consent of Port, which consent shall not be unreasonably
withheld, have the right from time to time to enter into a Leasehold
Mortages subject to the terms and conditions of this Section 22. For
the express benefit of all secured parties under a Leasehold Mortgage
hereinafter referred to as "Lender"), the parties agree as follows
during the term of any Leasehold Mortgage:
(a)The execution of any Mortgage, or the foreclosure thereof or any
sale thereunder or conveyance by Tenant to Lender, or the
exercise of any right, power or privilege reserved therein,
shall not constitute a violation of any of the Lease terms or
conditions of any assumption by Lender, personally, of Tenant's
obligations hereunder except as provided in subsection (c)
below.
(b)Lender, at its option, may at any time before Port's exercise
of any of its rights pursuant to this Section 22, or before the
expiration date of the period specified in subsection (f) below,
whichever last occurs, perform any of the covenants and
conditions required to be performed hereunder by Tenant. Any
performance of Tenant's duties by Lender shall be effective to
prevent the termination of this Lease.
(c) Port hereby agrees that Lender may record any such Leasehold
Mortgage and may enforce it and upon foreclosure sell and
assign Tenant's interest in this Lease and the Improvements, if
any, to another from whom it may accept a purchase price,
subject, however, to first securing written approval from Port,
which approval shall not be unreasonably withheld. Furthermore,
Lender may acquire title to the leasehold estate hereunder and
Tenants interest, if any, in the Improvements in any lawful
way, and if Lender becomes the assignee, Lender may sell or
assign said leasehold and Tenant's interest, if any, in any
Improvements. If Lender acquires Tenant's leasehold estate
hereunder by foreclosure or other appropriate proceedings or by
a proper conveyance from Tenant, Lender shall take subject to
all of the provisions of this Lease, and shall assume
personally all of the obligations of Tenant hereunder.
(d) If Lender acquires Tenant's leasehold estate hereunder by
foreclosure or other appropriate proceedings or by a conveyance
from Tenant in lieu of foreclosure, Lender shall attorn to Port
and, subject to the provisions of Section 21, may sublease such
portion for any period or periods within the Term, or may
assign Tenant's leasehold estate hereunder by sale or
otherwise.
(e) No such foreclosure or other transfer of Tenant's leasehold
estate nor the acceptance of any Rent by Port from another
shall relieve, release or in any manner affect Tenant's
liability hereunder.
(f) If an event of default under Section 23 hereof occurs, Lender
shall have thirty (30) days after receipt of written notice
from Port specifying Tenant's default to remedy such default.
In the event of a non-monetary default of Tenant, if Lender
shall have commenced appropriate proceedings in the nature of
foreclosure within such thirty (30) day period and is
diligently prosecuting the same, Lender shall have a reasonable
time beyond thirty (30) days within which to cure such
non-monetary default. Port's right to exercise its rights
pursuant to Section 23 hereof shall at all times, while such
Leasehold Mortgage encumbers Tenant's estate, be subject to and
conditioned upon Port's furnishing Lender such written notice
and Lender having failed to cure such default as provided
herein. The fact that the time has expired for performance of a
covenant by Tenant shall not render performance by Lender or a
purchaser impossible. In the event of a nonmonetary default of
Tenant, if Lender or any purchaser shall promptly undertake to
perform Tenant's defaulted obligation and shall diligently
proceed with such performance, the time for such performance
shall be extended by such period as shall be reasonably
necessary to complete such performance.
(g) Lender shall give written notice in accordance with Section 30
to Port of its address and the existence and nature of its
security interest. Failure to give such notice shall constitute
a waiver of Lender's rights hereunder.
(h) Immediately after a Leasehold Mortgage on all or a portion of
the leasehold estate is recorded, Tenant, at its own expense,
shall cause to be recorded in the Official Records a request
that Port receive written notice of any default and/or notice
of sale under the Leasehold Mortgage. In addition, Tenant shall
furnish to Port complete copies of the Leasehold Mortgage and
the note or other obligation secured thereby and any
modifications, amendments or extensions thereto. (i)
Notwithstanding any other provisions of this Lease, no such
transfer of Tenant's leasehold interest hereunder shall occur,
whether by written instrument, court order or otherwise, unless
Port shall first consent in writing. Such consent shall not be
unreasonably withheld. (i) The Leasehold Mortgage shall provide
that any proceeds from fire or extended coverage insurance
shall be used for repair or rebuilding of the Premises on the
terms and conditions set forth in this Lea-se, and not to repay
part of the outstanding Leasehold Mortgage.
(k) Tenant shall reimburse Port for any costs incurred by Port in
connection with the review and approval of any proposed
Leasehold Mortgage, or any transactions related thereto.
(1) Notwithstanding any other provisions of this Lease, Tenant
shall not under any circumstances encumber Port's estate in the
Premises. Any such encumbrance shall be void and shall
constitute a material default under this Lease.
23. DEFAULT BY TENANT.
23.1 Event of Default. The occurrence of any one or more of the following
events shall constitute a default by Tenant:
(a) Failure by Tenant to pay when due any Rent;
(b) Abandonment or vacation of the Premises by Tenant;
(c) Failure to perform any other provision of this Lease if the
failure to perform is not cured within thirty (30) days after
notice has been given by Port to Tenant. If the default cannot
reasonably be cured within 30 days, Tenant shall not be in
default of this Lease if Tenant commences to cure the default
within such thirty (30) day period and diligently and in good
faith continues to cure the default;
(d) Either (i) the failure of Tenant to pay its debts as they
become due, the written admission of Tenant of its inability to
pay its debts, or a general assignment by Tenant for the
benefit of creditors; or (ii) the filing by or against Tenant
of any action seeking reorganization, arrangement, liquidation,
or other relief under any Law relating to bankruptcy,
insolvency, or reorganization (unless such action is
involuntary and is discharged within sixty (60) days) or
seeking the appointment of a trustee, receiver or liquidator of
Tenant's or any substantial part of Tenant's assets; or (iii)
the attachment, execution or other judicial seizure of
substantially all of Tenant's interest in this Lease, unless
such seizure is discharged within ten (10) days.
Notices given under this section shall demand that Tenant perform the
provisions of this Lease or pay the Rent that is in arrears, as the
case may be, within the applicable period of time, or quit the
Premises. No such notice shall be deemed a forfeiture or a
termination of this Lease unless Port so elects in the notice.
23.2 Port's Remedies. Upon default by Tenant, Port shall, without further
notice or demand of any kind to Tenant or to any other person, have
the following remedies:
(a) Tenant's Right to Possession Not Terminated.
Port has the remedy described in Section 1951.4 of
the California Civil Code, under which it may continue this Lease
in full force and effect after Tenant's breach and abandonment,
and the Lease shall continue in effect, so long as Port does not
terminate Tenant's right to possession, and Port may enforce all
of its rights and remedies under this Lease, including the right
to collect Rent when due. During the period Tenant is in default,
Port may enter the Premises and relet them, or any part of them,
to third per-Lies for Tenant's account. Tenant shall be liable
immediately to Port for all reasonable costs Fort incurs in
reletting the Premises, including, but not limited to, broker's
commissions, expenses of remodeling the Premises required by the
reletting and like costs. Reletting can be for a period shorter
or longer than the remaining Term of this Lease. Tenant shall pay
to Port the Rent due under this Lease on the dates the Rent is
due, less the Rent Port receives from any reletting. No act by
Port allowed by this subsection shall terminate this Lease unless
Port notifies Tenant that Fort elects to terminate this Lease.
After Tenant's default and for as long as Port does not terminate
Tenant's right to possession of the Premises, if Tenant obtains
Port's consent Tenant shall have the right to assign or sublet
its interest in this Lease, but Tenant shall not be released from
liability.
(b)Termination of Tenant's Right to Possession. Port may terminate
Tenant's right to possession of the Premises at any time, No act
by Port other than giving notice of termination to Tenant shall
terminate this Lease. Acts of maintenance, efforts to relet the
Premises, or the appointment of a receiver on Port's initiative to
protect Port's interest under this Lease shall not constitute a
termination of Tenant's right to possession.
(c)Appointment of Receiver. If Tenant is in default of this Lease,
Port shall have the right to have a receiver appointed to collect
Rent and conduct Tenant's business. Neither the filing of a
petition for the appointment of a receiver nor the appointment
itself shall constitute an election by Port to terminate this
Lease.
(d)Port's Right to Cure Tenant's Default. Port, at any time after
Tenant commits a default, may, at Port's sole option, cure the
default at Tenant's cost. If Port at any time, by reason of
Tenant's default, undertakes any act to cure or attempt to cure
such default that requires the payment of any sums, or otherwise
incurs any costs, damages, or liabilities, (including without
limitation, attorneys' fees), all such sums, costs, damages or
liabilities paid by Port shall be due immediately from Tenant to
Port at the time the sum is paid, and if paid by Tenant at a later
date shall bear interest at the lesser of ten percent (10 %) or
the maximum non-usurious rate Port is permitted by Law to charge
from the date such sum is paid by Port until Port is reimbursed by
Tenant.
The remedies set forth in this Section 23.2 are not exclusive; they are
cumulative and in addition to any and all other rights or remedies of Port
now or later allowed by Law. Tenant's obligations hereunder shall survive
any termination of this Lease.
23.3 Damages. If Port elects to terminate this Lease under Section 23.2,
Port has the rights and remedies provided by California Civil Code Section 1
951.2, including the right to recover from Tenant the following:
(a) The worth at the time of award of the unpaid Rent which had been
earned at the date of termination of this Lease;
(b) The worth at the time of award of the amount by which the unpaid
Rent which would have been earned after termination until the
time of award exceeds the amount of such rental loss that Tenant
proves could have been reasonably avoided;
(c) The worth at the time of award of the amount by which the unpaid
Rent for the balance of the Term after the time of award exceeds
the amount of the loss of Rent that Tenant proves could be
reasonably avoided; and
(d) Any other amounts necessary to compensate Port for the detriment
proximately caused by Tenant's default, or which, in the ordinary
course of events, would likely result, including, but not limited
to, attorneys' fees and court costs, the costs of carrying the
Premises such as repairs, maintenance, taxes and insurance
premiums, utilities, security precautions and the reasonable
costs and expenses incurred by Port in (i) retaking possession of
the Premises; (ii) cleaning and making repairs and alterations
necessary to return the Premises to good condition and preparing
the Premises for reletting; (iii) removing, transportation and
storing any of Tenant's property left at the Premises (although
Port shall have no obligation so to do); and (iv) reletting the
Premises, including, without limitation, brokerage commissions,
advertising costs and attorneys' fees. Efforts by Port to
mitigate the damages caused by Tenants breach of the Lease do not
waive Port's rights to recover damages upon termination. The
"worth at the time of award" of the amounts referred to in
Sections 22.3(a) and (b) shall be computed by allowing interest
at an annual rate equal to the lesser of ten percent or the
maximum non-usurious rate Port is permitted by Law to charge. The
"worth at the time of award" of the amount referred to in Section
22.3(c) shall be computed by discounting the amount at the
discount rate of the Federal Reserve Bank of San Francisco at the
time of award, plus one percent (1%)
23.4 No Accord and Satisfaction. No payment by Tenant or receipt by Port
of an amount less than the Rent due under this Lease shall be deemed
to be other than "on account" of the earliest Rent due; nor shall any
endorsement or statement on any check or payment, or letter
accompanying such check or payment, be deemed an accord and
satisfaction. Port may accept any such partial payment or tender
without prejudice to its right to recover the balance of any amount
due and to pursue any other remedy herein provided at Law or in
equity.
24. LITIGATION EXPENSES.- ATTORNEYS' FEES.
24.1 Litigation Expenses. If either party hereto brings an action or
proceeding (including any cross-complaint or counterclaim) against
the other party by reason of a default, or otherwise arising out of
this Lease, the prevailing party in such action or proceeding shall
be entitled to recover from the other party its costs and expenses of
suit, including but not limited to reasonable attorneys' fees, which
shall be payable whether or not such action is prosecuted to
judgment. 'Prevailing party" within the meaning of this Section 24
shall include, without limitation, a party who substantially obtains
or defeats, as the case may be, the relief sought in the action,
whether by compromise, settlement, judgment or the abandonment by the
other party of its claim or defense.
24.2 Appeals. Attorneys' fees under this Section 24 shall include
attorneys' fees and all other reasonable costs and expenses incurred
in connection with any appeal.
24.3 City Attorney. For purposes of this Lease, reasonable fees of
attorneys of the City's Office of the City Attorney shall be based on
the fees regularly charged by private attorneys with an equivalent
number of years of professional experience (calculated by reference
to earliest year of admission to the Bar of any State) who practice
in San Francisco in law firms with approximately the same number of
attorneys as employed by the Office of the City Attorney.
25. PORT'S ENTRY ON PREMISES.
25.1 Entry for Inspection. Port and its authorized Agents shall have the
right to enter the Premises without notice at any time during normal
business hours of generally recognized business days, provided that
Tenant or Tenant's Agents are present on the Premises, for the purpose
of inspecting the Premises to determine whether the Premises are in
good condition and whether Tenant is complying with its obligations
under this Lease.
25.2 General Entry. In addition to its rights pursuant to Section 25.1, Port
and its authorized Agents shall have the right to enter the Premises at
all reasonable times and upon reasonable notice for any of the
following purposes:
(a) To perform any necessary maintenance, repairs or restoration to
the Premises, or to perform any services which Port has the
right or obligation to perform;
(b) To serve, post, or keep posted any notices required or allowed
under the provisions of this Lease;
(c) To post "For Sale" signs at any time during the Term; to post
'For Lease' signs during the last six months of the Term or
during any period in which Tenant is in default;
(d) To show the remises to prospective real estate brokers, agents,
buyers, or persons interested in an exchange, at any time during
the Term; to show the Premises to prospective tenants during the
last six months of the Term, or during any period in which
Tenant is in default;
(e) If any excavation or other construction is undertaken or is
about to be undertaken on any property or street adjacent to the
Premises, to shore the foundations, footings or walls of the
premises and to erect scaffolding and protective barricades
around and about the Premises as reasonably necessary in
connection with such activities (but not so as to prevent or
unreasonably restrict entry to the Premises), and to do any
other act or thing necessary for the safety or preservation of
the Premises during such excavation or other construction.
25.3 Emergency Entry. Port may either the Premises at any time, without
notice, or, in the event of an emergency. Port shall have the right
to use any and all means which Port may deem proper in such an
emergency in order to obtain entry to the Premises. Entry to the
Premises by any of said means, or otherwise, shall not under any
circumstances be construed or deemed to be a forcible or unlawful
entry into, or a detainer of the Premises, or an eviction of Tenant
from the Premises or any portion of them.
25.4 No Liability. Port shall not be liable in any manner, and Tenant
hereby waives any claim for damages, for any inconvenience,
disturbance, loss of business, nuisance, or other damage, including
without limitation any abatement or reduction in Rent, arising out of
Port's entry onto the Premises as provided in this Section 25, except
damage resulting solely from the active negligence or willful
misconduct of Port or its authorized representatives.
25.5 Non-Disturbance. Port shall use its best efforts to conduct its
activities on the Premises as allowed in this Section 25 in a manner
which, to the extent reasonably practicable, will cause the least
possible convenience, annoyance or disturbance to Tenant.
26. SURRENDER AND QUITCLAIM.
26.1 Surrender. Upon termination of this Lease Tenant shall surrender to
Port the Premises and all Improvements thereon in good condition
(except for ordinary wear and tear occurring after the last necessary
maintenance made by Tenant and except for destruction or condemnation
as described in Sections 18 and 19 hereof), except for Improvements
and Alterations which Tenant has the right to remove or is obligated
to remove under the provisions of Section 13. Tenant shall repair any
damage to the Premises for which Tenant is liable under this Lease.
Tenant shall remove all of its personal property and perform all
restoration made necessary by the removal of any Improvements,
Alterations or Tenant's personal property within the time periods
stated in this Lease. Port may elect to retain or dispose of any
Improvements or Tenant's personal property which Tenant does not
remove from the Premises as allowed or required by this Lease by
giving at least ten (10) days' prior written notice of such election
to Tenant. Except with respect to (i) Tenant's personal property as
to which Port has waived in writing any right it may have or may have
acquired, (ii) Tenant's property which is covered by any filed
financing statement, and (iii) any Hazardous Material left in or on
the Premises, title to any Improvements, Alterations or to Tenant's
personal property which Port elects to retain or dispose of upon
expiration of the ten-day period shall vest in Port. Tenant waives
all claims against Port for any damage to Tenant resulting from
Port's retention or disposition of any Improvements, Alterations or
Tenant's personal property. Tenant shall be liable to Port for all
costs incurred by Port for storing, removing or disposing of any
Improvements, Alterations or Tenant's personal property. If Tenant
falls to surrender the Premises as required by this Section 26.1,
Tenant shall hold Port harmless from all damages resulting from
Tenant's failure to surrender the Premises, including, but not
limited to, claims made by a succeeding tenant resulting from
Tenant's failure to surrender the Premises. No act or conduct of
Port, including, but not limited to, the acceptance of the keys to
the Premises, shall constitute an acceptance of the surrender of the
Premises by Tenant before the expiration of the Term. Only a notice
from Port to Tenant shall constitute acceptance of the surrender of
the Premises and accomplish a termination of this Lease.
26.2 Quitclaim. Upon termination of this Lease, the Premises shall
automatically, and without further act or conveyance an the part of
Tenant or Port, become the property of Port, free and clear of all
liens and Leasehold Mortgages and without payment therefor by Port
and shall be surrendered to Fort upon such date. Upon or at any time
after the date of termination of this Lease, if requested by Port,
Tenant shall promptly deliver to Port, without charge, a quitclaim
deed to the Premises and any other instrument reasonably requested by
Port to evidence or otherwise effect the termination of Tenant's
leasehold estate hereunder and to effect such transfer or vesting of
title to the Premises or any Improvements or Alterations that Port
agrees are to remain part of the Premises pursuant to the provisions
of Section 13.3 above.
27. HOLDING OVER. Any holding over after the expiration of the Term with the
consent of Port shall be deemed a month-to-month tenancy and shall be upon
each and every one of the terms, conditions and covenants of this Lease,
except that, at Port's election, the Rent shall be adjusted either in
accordance with the provisions of Section 5.2 or to the then current market
rate as reasonably determined by Port. Either party may cancel said
month-to-month tenancy upon thirty (30) days' written notice to the other
party.
28. MINERAL RESERVATION. The State of California, pursuant to Section 2 of
Chapter 1333 of the Statutes of 1968, as amended, has reserved all
subsurface mineral deposits, including oil and gas deposits, on or
underlying the Premises. In accordance with the provisions of said Statutes,
Port and Tenant shall and hereby do grant to the State of California the
right to explore, drill for and extract said subsurface minerals, including
oil and gas deposits, from the Mineral Reservation area located by the
California Grid System as more particularly described in Section 1.11
hereof.
29. CITY REQUIREMENTS.
29.1 Non-Discrimination. Tenant shall not, in the operation and use of
the Premises, discriminate against any person or group of persons
solely because of race, color, creed, national origin, ancestry, age,
sex, sexual orientation, disability or acquired immune deficiency
syndrome (AIDS) or AIDS related condition (ARC). The provisions of
Chapters 12B and 12C of the San Francisco Administrative Code,
relating to nondiscrimination by parties contracting with the City and
County of San Francisco, are incorporated herein by this reference and
made a part hereof as though fully set forth herein. Tenant agrees to
comply with all provisions of such Chapters 12B and 12C that apply to
tenants of the City and County of San Francisco.
29.2 MacBride Principles-Northern Ireland. City urges companies doing
business in Northern Ireland to move towards resolving employment
inequities and encourages such companies to abide by the MacBride
Principles. City urges San Francisco companies to do business with
corporations that abide by the MacBride Principles.
29.3 Tropical Hardwood Ban. City urges Tenant not to import, purchase,
obtain, or use for any purpose, any tropical hardwood or tropical
hardwood product.
29.4 Tobacco Products Advertising Ban. Tenant acknowledges and agrees
that no advertising of cigarettes or tobacco products is allowed on
any real property owned by or under the control of the City,
including the property which is the subject of this Lease. This
prohibition includes the placement of the name of a company
producing, selling or distributing cigarettes or tobacco products
or the name of any cigarette or tobacco product in any promotion of
any event or product. This prohibition does not apply to any
advertisement sponsored by a state, local or nonprofit entity
designed to communicate the health hazards of cigarettes and
tobacco products or to encourage people not to smoke or to stop
smoking.
30. NOTICES. Except as otherwise expressly provided in this Lease or by Law,
any and all notices or communications required or permitted by this Lease
or by Law to be served on, given to or delivered to either party by the
other party shall be in writing and shall be given by one of the following
methods: (a) delivering the notice in person, (b) sending the notice by
United States Mail, first, class, postage prepaid, or (c) sending the
notice by overnight courier or mail, with postage prepaid, to the mailing
address set forth in Section 1.12 Subject to the restrictions set forth
below and only for the convenience of the parties, copies of notices also
may be given by telefacsimile to the telephone number set forth in Section
1.12. Either party may change such party's mailing address or telefacsimile
number at any time by giving written notice of such change to the other
party in the manner provided above at least ten (10) days prior to the
effective date of the change. All notices under this Lease shall be deemed
to be duly served, given, delivered, made or communicated on the date
personal delivery actually occurs or, if mailed, on the date of deposit in
the United States Mail. A person or party may not give official or binding
notice by telefacsimile. Service of process at Tenant's address set forth
in Section 1.12 or other address, notice of which is given in accordance
with the terms of this Section 30, shall be valid and binding upon such
party.
31. TIME IS OF THE ESSENCE. Time is of the essence as to each and every
provision of this Lease.
32. SIGNS. Tenant shall not have the right to place, construct or maintain any
sign, advertisement, awning, banner or other exterior decoration on the
Premises without Port's prior written consent. Any sign that Tenant is
permitted to place, construct or maintain on the Premises shall comply
with all Laws relating thereto, including but not limited to Fort's Tenant
Sign Guidelines and building permit requirements, and Tenant shall obtain
all Regulatory Approvals required by such Laws. Port makes no
representation with respect to Tenant's ability to obtain such Regulatory
Approval. Tenant, at its sole cost and expense, shall remove all signs
placed by it on the Premises at the expiration or earlier termination of
this Lease.
33. MISCELLANEOUS PROVISIONS.
33.1 California Law. This Lease shall be construed and interpreted in
accordance with Laws of the State of California and City's Charter.
33.2 Entire Agreement. This Lease contains all of the representations and
the entire agreement between the parties with respect to the subject
matter of this agreement. Any prior correspondence, memoranda,
agreements, warranties, or written or oral representations relating
to such subject matter are superseded in total by this Lease. No
prior drafts of this Lease or changes from those drafts to the
executed version of this Lease shall be introduced as evidence in any
litigation or other dispute resolution proceeding by any party or
other person, and no court or other body should consider those drafts
in interpreting this Lease.
33.3 Amendments. No amendment of this Lease or any part thereof shall be
valid unless it is in writing and signed by all of the parties
hereto.
33.4 Severability. Except as is otherwise specifically provided for in
this Lease, invalidation of any provision of this Lease, or of its
application to any person, by judgment or court order, shall not
affect any other provision of this Lease or its application to any
other person or circumstance, and the remaining portions of this
Lease shall continue in full force and effect, unless enforcement of
this Lease as invalidated would be unreasonable or grossly
inequitable under all of the circumstances or would frustrate the
purposes of this Lease.
33.5 No Party Drafter; Captions. The provisions of this Lease shall be
construed as a whole according to their common meaning and not
strictly for or against any party in order to achieve the objectives
and purposes of the parties. Any caption preceding the text of any
section, paragraph or subsection or in the table of contents is
included only for convenience of reference and shall be disregarded
in the construction and interpretation of this Lease.
33.6 Singular, Plural, Gender. Whenever required by the context, the
singular shall include the plural and vice versa, and the masculine
gender shall include the feminine or neuter genders, and vice versa.
33.7 Successors. The terms, covenants, agreements and conditions set forth
in this Lease shall bind and inure to the benefit of Port and Tenant
and, except as otherwise provided herein, their personal
representatives and successors and assigns.
33.8 Real Estate Broker's Fees. Each party shall be responsible for the
payment of all fees and commissions to any real estate broker with
whom such party has contracted. Each party shall hold the other party
harmless from any and all damage resulting from any claim which may
be asserted against the other party by any broker, finder or other
person with whom the other party has or purportedly has dealt with
respect to this Lease.
33.9 Counterparts. For convenience, the signatures of the parties to this
Lease may be executed and acknowledged on separate paces which, when
attached to this Lease, shall constitute this as one complete Lease.
This Lease may be executed in any number of counterparts each of
which shall be deemed to be an original and all of which shall
constitute one and the same Lease.
33.10Authority. If Tenant signs as a corporation or a partnership, each
of the persons executing this Lease on behalf of Tenant does hereby
covenant and warrant that Tenant is a duly authorized and existing
entity, that Tenant has and is qualified to do business in
California, that Tenant has full right and authority to enter into
this Lease, and that each and all of the persons signing on behalf of
Tenant are authorized to do so. Upon Port's request, Tenant shall
provide Port with evidence reasonably satisfactory to Port confirming
the foregoing representations and warranties.
33.11Waiver. No failure by Port to insist upon the Strict performance of
any obligation of Tenant under this Lease or to exercise any right,
power or remedy arising out of a breach thereof, irrespective of the
length of time for which such failure continues, and no acceptance of
full or partial Rent during the continuance of any such breach shall
constitute a waiver of such breach or of Port's rights to demand
strict compliance with such term, covenant or condition. Port's
consent to or approval of any act by Tenant requiring Port's consent
or approval shall not be deemed to waive or render unnecessary Port's
consent to or approval of any subsequent act by Tenant. Any waiver by
Port of any default must be in writing and shall not be a waiver of
any other default concerning the same or any other provision of this
Lease.
34. NO LIGHT, AIR OR VIEW EASEMENT. Any diminution or shutting off of light,
air or view by any structure which may be erected on lands adjacent to the
Facility shall in no way affect this Lease or impose any liability on Port.
35. PROXIMITY OF WATERFRONT TRANSPORTATION PROJECT. Tenant acknowledges that
during the Term, the Waterfront Transportation Project involving (by way of
example only and not of limitation) the realignment of the Embarcadero
Roadway, Mid-Embarcadero freeway replacement, construction of a MUNI-metro
turnaround project, MUNI-metro extension, F-line historic streetcar line,
and a waterfront promenade, is scheduled to be constructed on property in
the immediate vicinity of the Premises. Tenant is aware that the
construction of such project and the activities associated with such
construction will generate certain adverse impacts which may result in some
inconvenience to or disturbance of Tenant. Said impacts may include, but
are not limited to, increased vehicle and truck traffic, traffic delays and
re-routing, loss of street and public parking, dust, dirt, construction
noise and visual obstructions. Tenant hereby waives any and all claims
against Port, City and their Agents arising out of such inconvenience or
disturbance, including without limitation any abatement or reduction of
Rent.
36. PROXIMITY OF MISSION BAY PROJECT. Tenant acknowledges that during the Term,
the Mission Bay Project is scheduled to be constructed on property in the
immediate vicinity of the Premises. Tenant is aware that the construction
of such project and the activities associated with such construction will
generate certain adverse impacts which may result in some inconvenience to
or disturbance of Tenant. Said impacts may include, but are not limited to,
increased vehicle and truck traffic, traffic delays and re-routing, loss of
street and public parking, dust, dirt, construction noise and visual
obstructions. Tenant hereby waives any and all claims against Port, City
and their Agents arising out of such inconvenience or disturbance,
including without limitation any abatement or reduction of Rent.
37. WAIVER OF RELOCATION ASSISTANCE RIGHTS. Tenant hereby waives any and all
rights, benefits or privileges of the California Relocation Assistance
Law, California Government Code 7260 et seq., and the Uniform Relocation
Assistance and Real Property Acquisition Policies Act, 42 U.S.C. 4601 et
sec., or under any similar law, statute or ordinance now or hereafter in
effect, except as provided in Section 19 hereof (Eminent Domain).
IN WITNESS WHEREOF, PORT and TENANT execute this Lease at San Francisco,
California, as of the last date set forth below.
PORT: TENANT:
CITY AND COUNTY OF SAN FRANCISCO, DARLING INTERNATIONAL INC, a
a municipal corporation, operating Delaware Corporation
by and through the SAN FRANCISCO
PORT COMMISSION
By /s/ Kirk W. Benpett By: /s/ Barney Dreiling
------------------------ ---------------------
KIRK W. BENPETT BARNEY DREILING
Acting Director, Tenant & Maritime Services Vice President
Dated: 7/12/96 Dated: 7/15/96
APPROVED AS TO FORM:
LOUISE H. RENNE, City Attorney
By: /s/
------------------------
Deputy City Attorney
Lease Prepared By: Nicolas Dempsey, Property Manager /s/
-----------
(initials)
<PAGE>
ADDENDUM TO LEASE NO. L-12090 BETWEEN
THE CITY AND COUNTY OF SAN FRANCISCO, THROUGH THE
SAN FRANCISCO PORT COMMISSION, Landlord,
and
DARLING INTERNATIONAL, INC, Tenant
In the event of any conflict between the provisions of this Addendum
and provisions of the Lease, the provisions of this Addendum shall control.
Port and Tenant hereby agree as follows:
1 . Section 4.2 of the Lease is hereby deleted in its entirety.
2. Section 6.2 (Possessory Interest Tax) is hereby amended in its entirety to
read as follows:
"6.2 Possessory Interest Tax. (a)Tenant recognizes and understands that this
Lease may create a possessory interest subject to property taxation and
that Tenant may be subject to the payment of property taxes levied on such
interest. Tenant further recognizes and understands that any sublease or
assignment permitted under this Lease and any exercise of any option to
renew or other extension of this Lease may constitute a change in ownership
for purposes of property taxation and therefore may result in a revaluation
of any possessory interest created hereunder. (b) Tenant agrees to pay
taxes of any kind, including, but not limited to, possessory interest
taxes, that may be lawfully assessed on the leasehold interest hereby
created and to pay all other taxes, excises, licenses, permit charges and
assessments based on Tenant's usage of the Premises that may be imposed
upon Tenant by law, all of which shall be paid when the same become due and
payable and before delinquency. (c) Tenant agrees not to allow or suffer a
lien for any such taxes to be imposed upon the Premises or upon any
equipment or property located thereon without promptly discharging the
same, provided that Tenant, if so desiring, may have reasonable opportunity
to contest the validity of the same. (d) San Francisco Administrative Code
Sections 23.6-1 and 23.6-2 require that the City and County of San
Francisco report certain information relating to this Lease, and any
renewals thereof, to the County Assessor within sixty (60) days after any
such transaction, and that Tenant report certain information relating to
any assignment of or sublease under this Lease to the County Assessor
within sixty (60) days after such assignment or sublease transaction.
Tenant agrees to provide such information as may be requested by the City
or Port to enable the City to comply with this requirement."
3. Section 8.4 is hereby added to the Lease to read as follows:
"8.4 Permitted Activities. Anything to the contrary in Section 8.2,
above notwithstanding, provided that Tenant has secured all necessary permits
from all governmental agencies having jurisdiction over the use of the Premises,
and further provided that unless otherwise prohibited by any laws, rules or
regulations issued by governmental agencies other than Port, Port agrees that
the permitted uses set forth in Sections 8.1 and 1.8 hereof shall not be
construed as Prohibited Activities as set forth in Section 8.2, above".
4. Section 16 of the Lease is hereby amended in its entirety to read as follows:
"16.1 Requirements for Handling. Neither Tenant nor its Agents or Invitees,
shall Handle in, on or about the Premises any Hazardous Material without the
prior written consent of Port, which consent shall not be unreasonably withheld
so long as Tenant demonstrates to Port's reasonable satisfaction that such
Hazardous Material is necessary to Tenant's business, will be Handled in a
manner which strictly complies with all Environmental Laws and will not
materially increase the risk of fire or other casualty to the Premises.
Notwithstanding the foregoing, Tenant may Handle on the Premises janitorial or
office supplies or materials in such limited amounts as are customarily used for
general office purposes so long as such Handling is at all times in full
compliance with all Environmental Laws.
Except as to any Hazardous Materials discovered on the Premises as a result of
Tenant's construction activities related to Tenant's improvements and
alterations to the Premises, as hereinabove provided, Tenant shall not be
responsible for the Handling of Hazardous Materials introduced onto the Parcel A
Premises prior to April 10, 1964 or onto the Parcel 8 Premises prior to May 20,
1968."
"16.2 Tenant Responsibility. Subject to the restrictions set forth in
Section 16.1 hereof, Tenant shall Handle all Hazardous Materials discovered on
the Premises as a result of Tenants construction activities related to Tenant's
alterations to the Premises, or introduced on the Parcel A Premises after April
10, 1964 or on the Parcel B Premises after May 20, 1968, in compliance with all
Environmental Laws. Notwithstanding the foregoing, Tenant shall not be
responsible for the safe Handling of Hazardous Materials introduced by the City,
Port or their Agents on the Parcel A Premises after April 10, 1964 or onto the
Parcel B Premises after May 20, 1968. Tenant shall protect its employees and the
general public in accordance with all Environmental Laws. Port may from time to
time request, and Tenant shall be obligated to provide, information reasonably
adequate for Port to determine that any and all Hazardous Materials are being
Handled in a manner which complies with all Environmental Laws. Port shall have
the right to inspect the Premises for Hazardous Materials at reasonable times,
pursuant to Section 25.1 hereof."
" 16.3 Requirement to Remove. Prior to termination of this Lease,
Tenant, at its sole cost and expense, shall remove any and all Hazardous
Materials introduced in, on, under or about the Parcel A Premises after April
10, 1 964 and introduced in, on, under or about the Parcel B Premises after May
20, 1968. Further, Tenant, at its sole cost and expense, shall remove any
Hazardous Material discovered on the Premises during the Term of this Lease
which is required to be removed by any governmental agency, including Port;
which removal would not have been required except for Tenant's use of the
Premises or Tenant's construction activities related to Tenant's alteration to
the Premises. Notwithstanding the foregoing, Tenant shall not be obligated to
remove any Hazardous Materials introduced by the City, Port or their Agents,
onto the Parcel A Premises after April 10, 1 964, or onto the Parcel B Premises
prior May 20, 1 968. Except as otherwise provided in the Section 1 6 (Hazardous
Materials), Tenant shall not be obligated to remove any Hazardous Materials
introduced onto the Parcel A Premises prior to April 10, 1 964, or onto the
Parcel B Premises after May 20, 1968. Prior to the termination of this Lease,
Port and Tenant shall conduct a joint inspection of the Premises for the purpose
of identifying Hazardous Materials existing on the Premises which Tenant is
required to remove."
5. The reference in Section 17.1 (a) (General Liability Insurance) to "...limits
not less than One Million Dollars ($1,000,000.00)..." is hereby amended to read
"...limits of not less than Five Million Dollars ($5,000,000.00)..."
6. Section 17.1 (d) (Personal Property Insurance) of the Lease is hereby
deleted in its entirety.
7. Section 17.1 (e) (Business Interruption Insurance) of the Lease is hereby
deleted in its entirety.
8. Section 17.1 (g) is hereby amended in its entirety to read as follows:
"17.1 (g) Exceptions to Required Insurance Coverage. Unless the maintenance of
such coverage shall be required by law (Section 17.1f) Tenant shall not be
required to maintain Jones Act Insurance".
9. Section 18 of the Lease is hereby deleted in its entirety and in its
place shall be substituted the following:
"18. DESTRUCTION.
18.1 Tenant's Obligation to Rebuild. If the Premises are totally or
partially damaged or destroyed during the Lease Term whether due
to an insured or uninsured casualty, Tenant shall make the
repairs necessary to restore the Premises to substantially the
same condition as they were in immediately before destruction
(in the case of insured damage whether or not any insurance
proceeds are sufficient to cover the actual cost of
restoration). Such destruction shall not terminate this Lease.
If the existing laws do not permit the restoration, either party
can terminate this Lease immediately by giving notice to the
other party.
18.2 Tenant's Restoration of Premises.
(a) Insured Loss: Adjustment of Minor Loss. If, during the Lease
Term, the Premises are destroyed from a risk covered by the
insurance described in section 17, and the total amount of loss
does not exceed Fifty Thousand Dollars ($50,000), Tenant shall
make the loss adjustment with the insurance company insuring the
loss. The proceeds shall be paid directly to Tenant for the sole
purpose of making the restoration of the Premises in accordance
with paragraph 18.1.,
(b) Insured Loss: Adjustment of Major Loss. If, during the Lease
Term, the Premises are destroyed from a risk covered by the
insurance described in Article 17, and the total amount of loss
exceeds Fifty Thousand Dollars ($50,000), Tenant shall make the
loss adjustment with the insurance company insuring the loss and
on receipt of the proceeds shall immediately pay them into a
special trust account for insurance proceeds that Tenant will
establish with an institutional lender or title company
("Insurance Trustee") approved by Port.
18.3 Insurance Trustee. All sums deposited with the Insurance
Trustee shall be held for the following purposes and the Insurance
Trustee shall have the following powers and duties:
(a) Progress Payments. The sums shall be paid in installments
by the Insurance Trustee to the contractor retained by Tenant as
construction progresses, for payment of the cost of restoration.
A 10% retention fund shall be established that will be paid to
the contractor on completion of restoration, payment of all
costs, expiration of all applicable lien periods, and proof that
the Premises are free of all mechanics' liens and lienable
claims.
(b) Certification; Appointment of Architect. Payments shall be
made on presentation of (a) certificates or vouchers from the
architect or engineer retained by Tenant showing (1) all of the
work for which reimbursement is being requested has been
completed in compliance with the plans and specifications
therefore, and all applicable laws and ordinances, (2) the sum
requested is justly required to reimburse Tenant for payments by
Tenant to the contractor, subcontractors, materialmen, laborers,
engineers, architects or other persons rendering services or
materials for the work (giving a brief description of the
services and materials), (3) when added to all sums previously
paid out by the Insurance Trustee, the sum requested does not
exceed ninety percent (90%) of the value of the work done to the
date of the certificate, and (4) the amount of the proceeds
remaining in the hands of the Trustee will be sufficient on
completion of the work to pay for the work in full (which shall
include, in such reasonable detail as Port may require an
estimate of the cost of the completion); (b) lien waivers
reasonably satisfactory to Port covering that part of the work
for which payment or reimbursement is being requested; and (c) a
search prepared by a title company or licensed abstractor or by
other evidence, reasonably satisfactory to Port, that no
mechanics' or other lien has been filed with respect to any part
of the Premises. If the Insurance Trustee, in its reasonable
discretion, determines that the certificates or vouchers are
being improperly approved by the architect or engineer retained
by Tenant, the Insurance Trustee shall have the right to appoint
an architect or an engineer to supervise construction and to
make payments on certificates or vouchers approved by the
architect or engineer retained by the Insurance Trustee. The
reasonable expenses and charges of the architect or engineer
retained by the Insurance Trustee shall be paid by the Insurance
Trustee out of the trust fund.
(c) Insufficient Proceeds. If the sums held by the Insurance
Trustee are not sufficient to pay the actual cost of
restoration, Tenant shall deposit the amount of the deficiency
with the Insurance Trustee within twenty (20) days after request
by the Insurance Trustee indicating the amount of the
deficiency.
(d) Excess Proceeds. Any sums not disbursed by the Insurance
Trustee after restoration has been completed and final payment
has been made to Tenant's contractor shall be delivered within
fifteen (15) days after demand made by Tenant to Port and shall
be disbursed as follows:
Personal Property. To the extent the excess proceeds are
attributable to the personal property which Tenant has the right
to remove at the end of the Lease Term, the excess shall be
delivered to Tenant. (ii) Additional Property. To the extent the
excess proceeds are attributable to any property which will be
owned by Port at the end of the Lease Term, as provided by
Section 13.2 and 26.1, the excess proceeds shall be delivered to
Port. (e) Costs of Insurance Trustee. All actual costs and
charges of the Insurance Trustee shall be paid by Tenant. (f)
Resignation of Insurance Trustee. If the Insurance Trustee
resigns or for any reason is unwilling to act or continue to
act, Port shall substitute a new trustee in the place of the
designated Insurance Trustee. The new trustee must be an
institutional lender or title company doing business in the City
in which the Premises is located. (g) Cooperation of Parties.
Both parties shall promptly execute all documents and perform
all acts reasonably required by the Insurance Trustee to perform
its obligations under this paragraph.
18.4 Restoration of Premises.
(a)Plans. Within thirty (30) days after the date that Tenant is
obligated to restore the Premises, Tenant at its cost shall
prepare final plans and specifications and working drawings
complying with applicable laws that will be necessary for
restoration of the Premises. The plans and specifications and
working drawings must be approved by Port. Port shall have thirty
(30) days after receipt of the plans and specifications and
working drawings to either approve or disapprove the plans and
specifications and working drawings and return them to Tenant. If
Port disapproves the plans and specifications and working
drawings, Port shall notify Tenant of its objections and Port's
proposed solution to each objection. Tenant acknowledges that the
plans and specifications and working drawings shall be subject to
approval of the appropriate government bodies and that they will
be prepared in such a manner as to obtain that approval.
(b) Procedure. The restoration shall be accomplished as follows:
(i) Construction Period. Tenant shall complete the restoration
within ninety (90) working days after final plans and
specifications and working drawings have been approved by the
appropriate government bodies and all required permits have been
obtained (subject to a reasonable extension for delays resulting
from causes beyond Tenant's reasonable control). (ii) Contractor.
Tenant shall retain a licensed contractor that is bondable. The
contractor shall be required to carry public liability and
property damage insurance and standard all risk coverage
insurance, during the period of construction in accordance with
Section 17.1 Such insurance shall contain waiver of subrogation
clauses in favor of Port and Tenant in accordance with the
provisions of Section 17.5. (iii) Notice. Tenant shall notify
Port of the date of commencement of the restoration not later
than twenty (20) days before commencement of the restoration to
enable Port to post and record notices of nonresponsibility. The
contractor retained by Tenant shall not commence construction
until a completion bond and a labor and materials bond have been
delivered to Port to insure completion of the construction. (iv)
Manner. Tenant shall accomplish the restoration in a manner that
will cause the least inconvenience, annoyance and disruption to
other tenants of the Project. (v) Notice of Completion. On
completion of the restoration, Tenant shall immediately record a
notice of completion in the county in which the Premises are
located. (vi) Insured Casualty Over $50,000. If the damage is
caused by an insured casualty in excess of $50,000, the
restoration shall not be commenced until sums sufficient to cover
the cost of restoration are placed with the Insurance Trustee as
provided in Section 18.2. (b).
18.5 Partial Destruction of Pier. If the Premises is located on a Pier and
fifty percent (50%) or more of the rentable area of the Pier is
damaged or destroyed by fire or other cause, notwithstanding that the
Premises may be unaffected, Port shall have the right, to be exercised
by notice in writing delivered to Tenant within sixty (60) days from
and after said occurrence, to elect to terminate this Lease. Upon the
giving of such notice to Tenant, the term of this Lease shall expire
on the third day after such notice is given, and Tenant shall vacate
the Premises and surrender the same to Port. Nothing in this Section 1
8 shall be construed as a limitation of Tenant's liability for any
damage or destruction, if such liability otherwise exists.
1 8.6 Port Not Obligated to Make Repairs. Port shall not be required to
repair any injury or damage by fire or other cause, or to make any
restoration or replacement of any Alterations, trade fixtures,
equipment or personal property placed or installed in the Premises by
Tenant or at the direct or indirect expense of Tenant. Tenant shall be
required to restore or replace the same in the event of damage, except
for damage caused solely by the Port's negligence or intentional
misconduct.
18.7 Rent Abatement. In the case of damage or destruction as described in
this Article 18, Base Rent payable by Tenant hereunder from the date
of damage until the repairs are completed shall be equitably reduced,
based upon the extent to which such repairs interfere with the
business carried on by Tenant in the Premises, but only to the extent
Port receives proceeds from rental income insurance paid for by
Tenant. Nothing in this paragraph shall be construed to permit the
abatement in whole or in part of Percentage Rent, but the computation
of Percentage Rent shall be based upon the revised Base Rent as the
same may be abated pursuant to this paragraph.
18.8 Waiver. Tenant waives the provisions of Sections 1932(2) and 1933(4)
of California Civil Code and any other statute, code or judicial
decisions which grants a tenant a right to terminate a lease in the
event of damage or destruction of leased Premises.
18.9 Notice by Tenant. Tenant shall give immediate notice to Port in the
event of any fire, accident or other damage or destruction of Premises
or the building of which the Premises are a part or of defects therein
or in any fixtures or equipment."
10. Section 20.3 of the Lease is hereby amended in its entirety to read as
follows:
"20.3 Hazardous Materials Indemnification. Tenant shall indemnify,
defend and hold Port, City and their Agents harmless from any and all claims,
judgments, damages, penalties, fines, costs, liabilities or losses which arise
during or after the Term of this Lease as a result of the Handling of Hazardous
Materials on the Premises by Tenant, its Agents or Invitees, including without
limitation, all costs of investigating and remediating the same, damages for
diminution in the value of the Premises, damages for the loss or restriction on
use of rentable or usable space or of any amenity of the Premises, damages
arising from any adverse impact on marketing of any such space and sums paid in
settlement of claims, attorneys' fees, consultant fees and expert fees.
This indemnification of Port and City by Tenant includes, but is not
limited to, costs incurred in connection with any investigation of site
conditions or any clean-up, remediation, removal or restoration work requested
by Port or required by any federal, state or local governmental agency or
political subdivision because of Hazardous Materials present in the soil or
groundwater in, on or under the Premises or in any Improvements released as a
result of Tenant's occupancy, use or construction activities occurring on the
Premises and/or as a result of Hazardous Materials introduced in, on, under or
about the Parcel A Premises after April 10, 1964, or introduced in, or, under or
about the Parcel B Premises after May 20, 1968. Without limiting the foregoing,
if the presence of any Hazardous Material in, on , under or about the Premises
caused or permitted by Tenant results in any contamination of the Premises,
Tenant, at its sole expense, promptly shall take all action that is necessary to
return the Premises to the condition existing prior to the introduction of such
Hazardous Material in, on, under or about the Premises; provided that Port
approval of such actions shall first be obtained, which approval shall not be
unreasonably withheld so long as such actions could not potentially have any
material adverse effect upon the Premises. Tenant's obligations hereunder shall
survive the termination of this Lease".
11. Section 21.1 (e) is hereby added to the Lease to read as follows:
"21.1(e) Non-applicability of Certain Transfers. The provisions of Sections
21.1(c) hereabove notwithstanding, the aggregate sale, transfer, assignment or
hypothecation of any the capital stock of Tenant resulting from an interfamily
transfer of capital stock or any court approved intestate transfers of capital
stock or any transfers of capital stock in any court approved probate
proceedings shall not constitute a "Transfer" requiring Port's consent under the
provisions of Sections 21.2, 21.3, 21.4 and 21.5 of this Lease".
12. Section 38 is hereby added to the Lease to read as follows:
"38. Rent Credit for Wharfage and Dockage. Commencing on the First
Anniversary Date, not less than sixty (60) days after each Anniversary
Date, Tenant shall be entitled to a Rent Credit toward the next Lease
Year's Basic Rent obligation equal to the Wharfage and Dockage fees
actually received Port during the preceding Lease Year and which
Wharfage and Dockage fees were, in the sole and reasonable
determination of Port, generated directly as a result of Tenant's or
Tenant's subtenant or assignee's activities on the Premises. The
Wharfage and Dockage fees shall be those Wharfage and Dockage fees
actually levied and received by Port pursuant to Port's operative
published tariff schedule.
The value of the available Rent Credit during any Lease Year may not
exceed one half (1/2) of the total of Tenant's Base Rent obligation for
the same Lease Year.
If, at the end of any Lease Year or at the end of the Lease Term or
earlier termination of this Lease, there shall be unapplied Rent
Credits due pursuant to this Section 38, Tenant shall have no right to
such Rent Credits and any amounts represented thereby shall become the
sole property of Port."
13. Section 39 is hereby added to the Lease to read as follows:
"39.Burma (Myanmar) Business Prohibition. Tenant represents to Port that
Tenant is not the government of Burma (Myanmar), that Tenant is not a
person or business entity organized under the laws of Burma (Myanmar),
and that Tenant is not a 'prohibited person or entity,' defined in
Section 12J.2.G. of the San Francisco Administrative Code as any person
or entity designated by the Investor Responsibility Research Center as
having investments or employees in Burma, or any person or entity that
licenses any person or entity organized under the laws of Burma
(Myanmar) to produce and market its products. Port reserves the right
to terminate this Lease for default if Tenant violates the terms of
this section 27.5 (or 29.5). Chapter 12J of the San Francisco
Administrative Code is hereby incorporated by reference as though fully
set forth herein. The failure of Tenant to comply with any of its
requirements shall be deemed a material breach of this Lease. In the
event that Tenant fails to comply in good faith with any of the
provisions of Chapter 12J of the San Francisco Administrative Code,
Tenant shall be liable for liquidated damages for each violation in the
amount of One Thousand Dollars ($1,000.00)."
<PAGE>
EXHIBIT A
Exhibit A is a plot mat of the property referred to in this lease;
No text, just graphic drawing.
<PAGE>
CITY AND COUNTY OF SAN FRANCISCO
WILLIE L. BROWN, JR., MAYOR
LEASE NO. L-12239
BY AND BETWEEN
THE CITY AND COUNTY OF SAN FRANCISCO
THROUGH THE SAN FRANCISCO PORT COMMISSION
AND
DARLING INTERNATIONAL, INC.
a Delaware corporation
Dennis Bouey
Executive Director
SAN FRANCISCO PORT COMMISSION
Michael Hardeman, President
Frankie G. Lee, Vice-President
James Herman, Commissioner
Denise McCarthy, Commissioner
Preston Cook, Commissioner
<PAGE>
TABLE OF CONTENTS
Section Pages
1. BASIC LEASE INFORMATION.....................................1
2. Definitions.................................................4
3. Premises....................................................5
4. Term of Lease...............................................5
4.1 Term..............................................5
4.2 Termination by Port...............................5
5. Rent .......................................................6
5.1 Base Rent.........................................6
5.2 Base Rent Adjustment..............................6
5.3 Percentage Rent...................................6
5.4 Late Charges......................................6
5.5 Additional Rent...................................7
5.6 Manner of Payment.................................7
6. Taxes and Assessments.......................................7
6.1 Payment of Taxes..................................7
6.2 Possessory Interest Tax...........................7
7. Security Deposit............................................8
8. Use of the Premises.........................................8
8.1 Permitted Use.....................................8
8.2 Prohibited Activities.............................8
8.3 Premises Must be Used.............................8
9. Compliance with Laws and Regulations........................8
10. Regulatory Approvals........................................9
11. Maintenance and Repairs.....................................9
11.1 Maintenance and Repair Obligations................9
11.2 Port's Right to Inspect...........................9
11.3 Acts of God.......................................9
12. Utilities and Services......................................9
12.1 Utilities.........................................9
12.2 Services.........................................10
13. Improvements and Alterations...............................10
13.1 Consent Required................................10
13.2 Construction Requirements........................10
13.3 Improvements Part of Realty......................10
13.4 Removal of Improvements..........................10
13.5 Notice of Removal................................10
13.6 Removal of Non-Permitted Improvements............11
14. Suitability; Acceptance....................................11
15. Liens .................................................11
16. Hazardous Materials........................................11
16.1 Requirements for Handling........................11
16.2 Tenant Responsibility............................11
16.3 Requirement to Remove............................11
17. Insurance .................................................12
17.1 Required Insurance Coverage......................12
17.2 Claims-Made Policies.............................12
17.3 Annual Aggregate Limits..........................12
17.4 Payment of Premiums..............................12
17.5 Waiver of Subrogation Rights.....................12
17.6 General Insurance Matters........................13
18. Damage and Destruction.....................................13
18.1 Damage and Destruction...........................13
18.2 Waiver...........................................14
19. Eminent Domain.............................................14
19.1 General..........................................14
19.2 Partial Takings..................................14
19.3 Taking of the Facility...........................14
19.4 Temporary Takings................................14
19.5 Award; Waiver....................................14
20. Indemnity and Exculpation..................................15
20.1 Indemnity........................................15
20.2 Exculpation......................................15
20.3 Hazardous Materials Indemnification..............15
21. Assignment and Subletting..................................16
21.1 Definition of Transfer ..........................16
21.2 Port's Consent Required..........................16
21.3 Request for Transfer.............................16
21.4 Port's Consent /Refusal to Consent..............17
21.5 Fees for Review..................................18
21.6 No Release of Tenant.............................18
21.7 Assignment of Sublease Rents.....................18
22. Leasehold Mortgages; Security Interests....................18
23. Default by Tenant..........................................19
23.1 Event of Default.................................19
23.2 Port's Remedies..................................20
23.3 Damages..........................................20
23.4 No Accord and Satisfaction.......................21
24. Litigation Expenses; Attorney's Fees.......................21
24.1 Litigation Expenses..............................21
24.2 Appeals..........................................21
24.3 City Attorney....................................21
25. Port's Entry on Premises...................................21
25.1 Entry for Inspection.............................21
25.2 General Entry....................................21
25.3 Emergency Entry..................................22
25.4 No Liability.....................................22
25.5 Non-Disturbance..................................22
26. Surrender and Quitclaim....................................22
26.1 Surrender........................................22
26.2 Quitclaim........................................23
27. Holding Over...............................................23
28. Mineral Reservation........................................23
29. City Requirements..........................................23
29.1 Non-Discrimination...............................23
29.2 MacBride Principles-Northern Ireland.............23
29.3 Tropical Hardwood Ban............................23
29.4 Tobacco Products Advertising Ban.................23
30. Notices .................................................24
31. Time is of the Essence.....................................24
32. Signs .................................................24
33. Miscellaneous Provisions...................................24
33.1 California Law...................................24
33.2 Entire Agreement.................................24
33.3 Amendments.......................................24
33.4 Severability.....................................24
33.5 No Party Drafter; Captions.......................24
33.6 Singular, Plural, Gender.........................25
33.7 Successors.......................................25
33.8 Real Estate Broker's Fees........................25
33.9 Counter parts....................................25
33.10 Authority.......................................25
33.11 Waiver..........................................25
34. No Light, Air or View Easement.............................25
35. Proximity of Waterfront Transportation Project.............25
36. Proximity of Mission Bay Project...........................25
37. Waiver of Relocation Assistance Rights.....................26
EXHIBITS
Exhibit A The Premises
(this exhibit is not submitted on electronic submission;
exhibit is a one-page plot map of
property related to Lease No. L-12239)
<PAGE>
LEASE
This Lease ("Lease"), dated for reference purposes only as of July 1,
1996, is by and between the CITY AND COUNTY OF SAN FRANCISCO, a municipal
corporation ("City"), operating by and through the SAN FRANCISCO PORT COMMISSION
("Port"), as landlord, and DARLING INTERNATIONAL INC, a Delaware corporation
("Tenant").
Port and Tenant hereby agree as follows:
1 . BASIC LEASE INFORMATION
The following terms are a summary of basic lease information (the
"Basic Lease Information"). Each item below shall be deemed to incorporate all
of the terms set forth in this Lease pertaining to such item. In the event of
any conflict between the information in this Section, and any more specific
provision of this Lease, the more specific provision shall control.
1.1 PREMISES: Approximately 116,438 square feet of land located at
Seawall Lot 344, together with a 475 foot long by 10 foot wide
pipeline license extending from said land to the edge of Wharf 92, in
the City and County of San Francisco, State of California, as shown
on Exhibit A dated March 1, 1995 attached hereto and made a part
hereof and more particularly described on page 1 of Exhibit B
attached hereto and made a part hereof together with any and all
Improvements and Alterations thereto (section 3).
1.2 TERM: The Term shall be for one (1) year eight (8) months and twenty
(20) days and shall commence on the later of September 1, 1996 or on
the date Port shall deliver exclusive possession of the Premises to
Tenant ("Commencement Date") and shall terminate on March 20, 1998
("Termination Date"), unless earlier terminated in accordance with
the provisions of the Lease (Section 4)
1.3 BASE RENT: $17,893.68 per calendar month as adjusted pursuant to
Section 5.2 The Base rent for any fractional calendar month shall be
prorated (Section 5.1).
1.4 RENT COMMENCEMENT DATE: on the later of September 1, 1996 or on the
date Port shall deliver exclusive possession of the Premises to Tenant.
1.5 BASE INDEX: June/l996 (Section 5.2)
-----------------------------------------
Month/Year - Index
1.6 PERCENTAGE RENT: (Section 5.3)
Applicable ___________ (See Addendum)
Not Applicable __XX__
1.7 SECURITY DEPOSIT: Equal to two (2) months' Base Rent
INITIAL DEPOSIT: $35,787.36 (Section 7)
1.8 PERMITTED USE: (Section 8.1)
Assembly, distribution and storage transference to maritime cargo
vessels and ground and maritime trans-shipment of bulk liquid and dry
cargo and a recycling and rendering plant servicing the red meat,
poultry and fish industries; the restaurant, retail food and grocery
trade; and other organic waste sources.
1.9 MAINTENANCE AND REPAIRS: (Section 1 1.1)
Tenant shall at all times during the Term of this Lease, and at its sole
cost and expense, maintain and repair in good and working order,
condition and repair the Premises and ail Improvements and Alterations
thereon without exception and without further obligation of Port.
1.10 UTILITIES AND SERVICES: (Section 12)
Tenant shall at all lines during the Term of this Lease and at its sole
cost and expense, arrange for and purchase from the appropriate supplier
or public utility all utilities and services to include but not be
limited to; gas, electricity, water, sewer, garbage and refuge
collection and security service. Tenant shall maintain all domestic
water, sanitary sewer, utility and telephone lines in and serving the
Premises.
1.11 MINERAL RESERVATION: Zone 3, beginning at a point where X equals
1,456,200 and Y equals 459,300, extending 500 feet south, thence 500
feet east, thence 500 feet north, and thence 500 feet west, ending at
said point of beginning. (Section 26)
1.12 NOTICES: (Section 28)
Address for Port: Commercial Property Manager
Port of San Francisco
Room 31 00, Ferry Building
San Francisco, CA 94111
FAX No: (415) 274-0578
Telephone No: (415) 274-0510
Address for Tenant: Darling International
251 O'Connor Ridge Boulevard, Suite 300
Irving, Texas 75038
FAX No: (214) 717-1588
Telephone No: (214) 717-0300
1.13 ADDENDUM: The following section(s) set forth in the Addendum,
attached hereto, are incorporated herein by reference:
4.2 (Termination by Port) - Deleted 6.2 (Possessory Interest Tax) -
Amended 8.4 (Permitted Activities) - Added 16 (Hazardous Materials) et
seq - Amended 17.1 (a) (General Liability Insurance) - Amended 17.2 (d)
(Personal Property Insurance) - Deleted
17.3 (e) (Business Interruption Insurance) - Deleted 17.lg (Required
Insurance Coverage) - Amended 18 (Damage and Destruction) - Amended
20.3 (Hazardous Materials Indemnification) - Amended 21.e
(Non-applicability of Certain Transfers) - Added 38 (Rent Credit for
Wharfage and Dockage) - Added 39 (Burma/Myanmar Business Prohibition) -
Added
In the event of any conflict between the provisions of the Addendum and
provisions of this Lease, the provisions of the Addendum shall control.
<PAGE>
2. DEFINITIONS
For purposes of this Lease, the following initially capitalized terms
shall have the meanings ascribed to them in this Section:
2.1 "Additional Rent" means all taxes, assessments, insurance premiums,
operating and maintenance charges, fees, costs, expenses, liabilities
and obligations of every description which Tenant assumes or is
obligated to pay or ' discharge pursuant to this Lease, together with
every fine, penalty, interest or other charge which may be added for
non-payment or late payment, whether payable to Port or to other
persons, parties or entities designated herein.
2.2 "Agents" means, when used with reference to either party hereto, the
officers, directors, employees, agents and contractors of such party,
and their respective heirs, legal representatives successors and
assigns.
2.3 "Alterations" means any alterations, installations or additions to any
Improvements or to the Premises.
2.4 "Anniversary Date" means the first anniversary of the Commencement Date
and each anniversary of such date
thereafter provided, however, that if the Commencement Date is other
than the first day of a month, then the first Anniversary Date shall be
the first day of the thirteenth (13th) month thereafter.
2.5 "Base Rent" means the monthly Base Rent specified in Section 1.3 hereof
and described in Section 5.1 hereof. 2.6 "Base Index" means the Cost of
Living Index for the calendar month set force in Section 1.5 hereof. 2.7
"Basic Lease Information" means the information with respect to this Lease
summarized in Section 1 hereof.
2.8 "City" means the City and County of San Francisco, a municipal
corporation.
2.9 "Commencement Date" means the date on which the Term of this Lease
commences as specified in Section 1.2 hereof.
2.10 "Commission" means the San Francisco Port Commission.
2.11 "Cost of Living Index" means the United States Department of Labor's
Bureau of Labor Statistics Consumer Price Index for All Urban Consumers
(All Items: 1982-84 = 100), San Francisco-Oakland-San Jose, California.
If the aforesaid Cost of Living Index ceases to be published, any
similar index published by any other branch or department of the U.S.
Government shall be used as the index herein, and if none is published,
another index generally recognized as authoritative shall be
substituted therefore by Port. The base period used by any new index
shall be reconciled to the 1982-84 = 100 Base Index. If the Cost of
Living Index is not published for the particular calendar month in
question, the immediately preceding last calendar month for which the
index is published shall be used.
2.12 "Current Index" means the Cost of Living Index for the calendar month
immediately preceding the Anniversary Date upon which the Base Rent is
adjusted.
2.13 "Environmental Laws" means any present or future federal, state or
local laws, ordinances, regulations or policies relating to Hazardous
Material (including, without limitation, their use, handling,
transportation, production, disposal, discharge or storage) or to
health and safety, industrial hygiene or environmental conditions in,
on, under or about the Premises, including, without limitation, soil,
air, bay water and groundwater conditions.
2.14 'Facility' means the pier, building or other structure in or on which
the Premises are located.
2.15 'Handle' or 'Handling' means to use, generate, process, produce,
package, treat, store, emit, discharge or dispose.
2.16 'Hazardous Material' means any substance, waste or material which now
or in the future is determined by any state, federal, or local
governmental authority to be capable of posing a present or potential
risk of injury to health, safety, the environment or property,
including, but not limited to, all of those materials, wastes and
substances designated as hazardous or toxic by the United States
Environmental Protection Agency, the City and County of San Francisco,
the United States Department of Labor, the United States Department of
Transportation, the California [)apartment of Environmental Protection
or any other governmental agency now or hereafter authorized to
regulate materials and substances in the environment.
2.17 "Improvements" means any and all buildings, structures, fixtures or
other improvements constructed or installed on the Premises, including
those constructed by or on behalf of Tenant pursuant to this Lease
(including, without limitation, any trailers, signs, roads, trails,
driveways, parking areas, curbs, walks, fences, walls, stairs, poles,
plantings and landscaping).
2.18 "INC" means Intra building Network Cable and is defined as the
telephone wiring which begins at the terminal block nearest the point
where the telephone company wiring enters the Facility and ends at the
terminal nearest the Premises.
2.19 "Invitees" when used with respect to Tenant means the clients,
customers, invitees, guests, members, licensees, assignees and
subtenants of Tenant.
2.20 "Late Charge" means a fee equivalent to one and one-half percent
(1-1/2%) of all Rent, or any portion thereof, which is due and unpaid
for more than thirty (30) days.
2.21 'Laws" means all laws, statutes, ordinances, resolutions, regulations,
judicial decisions, proclamations, orders or decrees of any municipal,
county, state or federal government or the departments, courts,
commissions, boards and officers thereof, or other governmental or
regulatory authority with jurisdiction over the Premises or any portion
thereof.
2.22 "Leasehold Mortgage" means one or more mortgage, deed of trust or other
security agreement encumbering the leasehold estate, or Tenant's
interest, if any, in any Improvements or Tenant's interest in its
personal property or trade fixtures, as security for a loan or loans to
benefit Tenant's use of the Premises.
2.23 "Official Records" means the official records of the City and County of
San Francisco.
2.24 "Percentage Rent" means a sum equal to a percentage of Tenant's Gross
Receipts made from or upon the Premises during each calendar month of
the Term in the percentage amounts and for the items set forth in
Section 1.6, if applicable.
2.25 'Port" means the San Francisco Port Commission.
2.26 "Premises" means the real property described in Section 1.1 hereof.
2.27 "Regulatory Approval" means any authorization, approval or a permit
required by any governmental agency having jurisdiction over the
Premises, including but not limited to the Bay Conservation and
Development Commission ("BCDC').
2.28 "Rent" means the Base Rent, as adjusted pursuant to the provisions of
Section 5.2 hereof, together with Percentage Rent, if applicable, and
any and all Additional Rent.
2.29 "Tenant" means the party identified as Tenant at the beginning of this
Lease.
3. PREMISES. Port hereby leases to Tenant, and Tenant hereby hires from
Port, the Premises described in Section 1.1 hereof on the terms and
conditions of this Lease.
4. TERM OF LEASE.
4.1 Term. The Premises are leased by Tenant from Port for the Term
specified in section 1.2 hereof.
4.2 Termination by Port. Tenant's period of occupancy of the Premises
is subject to Port's right to terminate
this Lease as provided herein when the Premises is needed in
connection with a Fort program or project. As used herein, 'Port
program or project" shall mean any development or renovation, by
public and/or private parties, of the building, pier or seawall lot
in or on which the Premises is located. In the event of any such
development or renovation, Port shall have the right to terminate
this Lease without liability or expense except as specifically set
forth in this Section 4.2 upon delivery to Tenant of six (6) months
prior written notice of such termination. Tenant agrees and shall
be required to surrender possession of the Premises by the end of
such six (6) month period. Within sixty (60) days after Tenant's
surrender, Port agrees to pay Tenant a portion of those expenses
which are documented by Tenant as having been incurred by Tenant
prior to the delivery of Port's termination notice in making
alterations, additions and improvements to the Premises which were
approved in advance and in writing by Port and which were not
previously reimbursed to Tenant through rent credits, rent
abatement or other form of compensation ("Improvement Costs"). Such
Improvement Costs shall be determined by the value attributable to
any alterations, additions and improvements in any Port building
permits for such work obtained by Tenant and which are approved in
advance in writing by a Port Property Manager to the extent
supported by reasonable evidence of such expenditures provided by
Tenant. If no building permits are required for such work, value
shall only be attributed to such alterations, additions or
improvements if the value is approved in writing by a Port Property
Manager prior to the commencement of the work and if the cost is
supported by reasonable evidence of such expenditures provided by
Tenant. The portion of the Improvement Costs paid by Port shall be
a fraction. The numerator of said fraction shall be the number of
months remaining in the initial term of the Lease after Tenant
surrenders the Premises, and the denominator shall be the number of
months in the initial term of this Lease, or for work undertaken
following the commencement of the Lease, the number of months
beginning at the second month following the Port's approval of the
improvements and ending at the termination date of the initial term
of the Lease. In addition to Port's share of the Improvement Costs,
within sixty (60) days of Tenant's surrender, Port shall also pay
Tenant a termination fee equal to one month's Base Rent for each
full year remaining on the initial term after tenant's surrender of
the Premises; provided, however, in no event shall said termination
fee exceed three (3) months Base Rent. In no event shall Port be
responsible for paying any moving or relocation expense or other
expense incurred by Tenant due to any termination hereunder. Tenant
hereby waives any and all rights, benefits or privileges of the
California Relocation Assistance California Government Code 7260 et
sec., and the Uniform Relocation Assistance and Real Property
Acquisition Policies Act, 42 U.S.C. 4601 et sea. or under any
similar law, statute or ordinance now or hereafter in effect.
Nothing in this Section 4.2 shall be deemed or construed as
altering in any way the provisions of Section 18 (Damage and
Destruction) or Section 19 (Eminent Domain).
5. RENT. Tenant shall pay to Port, in the manner herein described,
the following Rent:
5.1 Base Rent. Tenant shall pay to Port Base Rent, as set forth in section
1.3 hereof, subject to adjustment in accordance with Section 5.2.
Except as otherwise provided in Section 1.3, Tenant shall make the
first payment of Base Rent on or before the Commencement Date and
thereafter shall pay the Base Rent, in advance, on or before the first
day of each calendar month throughout the Term. If the Commencement
Date is other than the first day of the month, or the Termination Date
is other than the last day of the month, the Base Rent for those
months shall be apportioned as the number of days of occupancy bears
to those months.
5.2 Base Rent Adjustment. Commencing on the first Anniversary Date of this
Lease and on each Anniversary Date thereafter, the Base Rent shall be
adjusted for the succeeding year in direct proportion to the
percentage increase in the Current Index over the Base Index. In no
case shall the Base Rent, as adjusted, be less than the Base Rent in
effect immediately prior to the Anniversary Date. If the Current Index
has increased over the Base Index, the adjusted Base Rent shall be
determined by multiplying the Base Rent set forth in Section 1.3 by a
fraction, the numerator of which is the Current Index and the
denominator of which is the Base Index, as follows:
Current Index
Base Index X Base Rent = Adjusted Base Rent
5.3 Percentage Rent. If applicable, as set forth in Section 1.6 hereof,
Tenant agrees to pay Percentage Rent to Port on the terms and
conditions set forth in the Addendum attached hereto.
5.4 Late Charges. Tenant acknowledges that late payment by Tenant to Port
of Rent will cause Port increased costs not contemplated by this
Lease, the exact amount of which will be extremely difficult to
ascertain. Such costs include, but are not limited to, processing and
accounting charges. Accordingly, a Late Charge will be paid by Tenant
for each month that such Rent, or any portion thereof, remains due and
unpaid, plus reasonable attorneys' fees incurred by Port by reason of
Tenant's failure to pay Rent when due under this Lease. Late Charges
shall be computed from the date on which such Rent first became due.
The parties agree that such Late Charges represent a fair and
reasonable estimate of the cost which Port will incur by reason of any
late payment by Tenant.
5.5Additional Rent. Tenant shall pay or cause to be paid, and discharge
or cause to be discharged, when the same shall become due, any and
all amounts of Additional Rent, as defined in Section 2.1. If Tenant
fails to pay or discharge any amount, liability or obligation of
Additional Rent Port shall have all rights, powers and remedies
provided herein or by Law in the case of nonpayment of the Base Rent.
5.6Manner of Payment. All payments due from Tenant to Port under this
Lease shall be made to Port without any abatement, deduction,
set-off, prior notice or demand, except as otherwise expressly
provided in this Lease, in lawful money of the United States of
America at Port's address set forth in Section 1.12 or to such other
person or at such other place as Port may from time to time designate
by written notice to Tenant.
6. TAXES AND ASSESSMENTS.
6.1Payment of Taxes. During the Term of this Lease, Tenant agrees to
pay, when due, to the proper authority any and all real property and
personal taxes, general and special assessments, license fees, permit
fees and ail other governmental charges of any kind or nature
whatsoever, including without limitation all penalties and interest
thereon, levied or assessed on the Premises, on Tenant's personal
property, the leasehold or subleasehold estate or Tenant's use of the
Premises, whether in effect at the time this Lease is entered into or
which become effective thereafter, and all taxes levied or assessed
on the possession, use or occupancy, as distinguished from the
ownership, of the Premises. Tenant shall not permit any such taxes,
assessments or other charges to become a defaulted lien on the
Premises or the Improvements thereon; provided, however, that in the
event any such tax, assessment or similar charge is payable in
installments, Tenant may make, or cause to be made, payment in
installments; and provided, further, that Tenant may, through such
procedures as Tenant considers necessary or appropriate, contest the
legal validity or the amount of any tax, assessment or similar charge
so long as such assessment or charge does not become a defaulted
lien. In the event of any such dispute, Tenant shall indemnify and
hold Port, City, and their Agents harmless from and against all
losses, damages, costs, or expenses, including attorneys' fees,
resulting therefrom.
6.2Possessorv Interest Tax. (a) Tenant recognizes and understands that
this Lease may create a possessory interest subject to property
taxation and that Tenant may be subject to the payment of property
taxes levied on such interest. Tenant further recognizes and
understands that any sublease or assignment permitted under this
Lease and any exercise of any option to renew or other extension of
this Lease may constitute a change in ownership for purposes of
property taxation and therefore may result in a revaluation of any
possessory interest created hereunder. (b) Tenant agrees to pay taxes
of any kind, including, but not limited to, possessory interest
taxes, that may be lawfully assessed on the leasehold interest hereby
created and to pay all other taxes, excises, licenses, permit charges
and assessments based on Tenant's usage of the Premises that may be
imposed upon Tenant by law, all of which shall be paid when the same
become due and payable and before delinquency. Tenant agrees not to
allow or suffer a lien for any such taxes to be imposed upon the
Premises or upon any equipment or property located thereon without
promptly discharging the same, provided that Tenant, if so desiring,
may have reasonable opportunity to contest the validity of the same.
(c) San Francisco Administrative Code Sections 23.6-1 and 23.6-2
require that the City and County of San Francisco report certain
information relating to this Lease, and any renewals thereof, to the
County Assessor within sixty (60) days after any such transaction and
that Tenant report certain information relating to any assignment of
or sublease under this Lease to the County Assessor within sixty (60)
days after such assignment or sublease transaction. Tenant agrees to
provide such information as may be requested by the City or Port to
enable the City to comply with this requirement within thirty (30)
days of a request in writing by Port to do so.
7. SECURITY DEPOSIT. Tenant shall pay to Part on or before the Commencement
Date, in addition to the advance payment of the first month's Base Rent, a
security deposit, in cash, in the sum specified as the Initial Deposit in
Section 1.7, as security for the faithful performance by Tenant of all
terms, covenants and conditions of this Lease. If the Base Rent is
increased pursuant to any of the provisions of this Lease, Tenant shall
increase the amount of the security deposit to maintain the same ratio of
security deposit to Base Rent as existed at the Commencement Date. Any
increase in the security deposit shall be delivered to Port on the same
date that such increase in the Base Rent is first due. Tenant agrees that
Port may (but shall not be required to) apply the security deposit in whole
or in part to (a) pay any sum due to Port under this Lease; (b) compensate
Port for any damage to the Premises caused by Tenant; or (c) cure any
default by Tenant. If Port uses any portion of the security deposit to cure
any default by Tenant hereunder, Tenant shall immediately replenish the
security deposit to the original amount. Port's obligation with respect to
the security deposit is solely that, of debtor and not trustee. Tenant
shall not be entitled to any interest on such deposit. If Tenant is not in
default at the termination of this Lease, Port shall return the unused
balance of the security deposit to Tenant after Tenant vacates the
Premises. The amount of the security deposit shall in no way limit Tenant's
obligations under this Lease, and nothing contained in this Section 7 shall
in any way diminish or be construed as waiver of any of Port's other
remedies set forth in this Lease or provided by Law or equity.
8. USE OF THE PREMISES.
8.1Permitted Use. The Premises shall be used and occupied cry for the
Permitted Use specified in Section 1.8 hereof and for no other purpose.
8.2Prohibited Activities. Tenant agrees that the following activities, by
way of example only and without limitation, are inconsistent with this
Lease and are strictly prohibited (a) any activity, or the maintaining
of any object, which is not within the Permitted Use; (b) any activity,
or the maintaining of any object, which will in any way increase the
existing rate of, affect or cause a cancellation of, any fire or other
insurance policy covering the Premises, any part, thereof or any of its
contents; (c) any activity or object which will overload or cause
damage to the Premises; (d) any activity which constitutes waste or
nuisance to owners or occupants of adjacent properties, including, but
not limited to, the preparation, manufacture or mixture of anything
that might emit any objectionable odors, noises or lights onto adjacent
properties, or the use of loudspeakers or sound or light apparatus
which can be heard or seen outside the Premises; (e) any activity which
will in any way injure, obstruct or interfere with the rights of other
tenants or of owners or occupants of adjacent properties, including
rights of ingress and access; (f) use of the Premises for sleeping or
personal living quarters; (g) any auction, distress, fire, bankruptcy
or going-out-of-business sale on the Premises without the prior written
consent of Port.
8.3 Premises Must Be Used. Tenant shall use the Premises continuously for
the Permitted Use specified in Section 1.8 and shall not allow the
Premises to remain unoccupied or unused without the prior written
consent of Port, which consent may be withheld in Port's sole
discretion.
9. COMPLIANCE WITH LAWS AND REGULATIONS. Tenant, at Tenant's sole cost and
expense, promptly shall comply with all Laws relating to or affecting the
condition, use or occupancy of the Premises in effect another at the time
of execution of this Lease or which may hereafter be in effect at any time
during the Term, whether or not the same are now contemplated by the
parties. Tenant further understands and agrees that it is Tenant's
obligation, at Tenant's sole cost and expense, to cause the Premises and
Tenant's activities and operations conducted thereon, to be in compliance
with the Americans with Disabilities Act, 42 USCS sections 12101, et seq.
Tenant understands and agrees that Port is entering into this Lease in its
capacity as a landowner with a proprietary interest in the Premises and not
as a regulatory agency of the City with certain police powers. Port's legal
status as an agency of City shall in no way limit the obligation of Tenant
to obtain any required approvals from City departments, boards or
commissions which have jurisdiction over the Premises, including Port. By
entering into this Lease, Port is in no way modifying or limiting the
obligation of Tenant to cause the Premises to be used and occupied in
accordance with all Laws.
10. REGULATORY APPROVALS. Tenant understands that Tenant's operations on the
Premises, changes in use, or Improvements or Alterations to the Premises
may require a Regulatory Approval. Tenant shall be solely responsible for
obtaining any such Regulatory Approval, and Tenant shall not seek any
Regulatory Approval without first obtaining the approval of Port. All costs
associated with applying for and obtaining any necessary Regulatory
Approval shall be borne by Tenant. Tenant shelf be solely responsible for
complying with any and ail conditions imposed by regulatory agencies as
part of a Regulatory Approval. Any fines or penalties imposed as a result
of the failure of Tenant to comply with the terms and conditions of any
Regulatory Approval shall be paid and discharged by Tenant, and Port shall
have no liability, monetary or otherwise, for said fines and penalties. To
the fullest extent permitted by Law, Tenant agrees to indemnify and hold
City, Port and their Agents harmless from and against any loss, expense,
cost, damage, attorneys' fees, penalties, claims or liabilities which City
or Port may incur as a result of Tenant's failure to obtain or comply with
the terms and conditions of any Regulatory Approval.
11. MAINTENANCE AND REPAIRS.
11.1Maintenance and Repair Obligations. Except as otherwise provided in
Section 1.9, Tenant shall at all times during the Term of this Lease,
and at its sole cost and expense, maintain and repair in good and
working order, condition and repair the Premises and all Improvements
and Alterations thereon. Except as otherwise provided in Section 1.9,
Port shall not be obligated to make any repairs, replacement or
renewals of any kind, nature or description whatsoever to the Premises
nor to any Improvements or Alterations now or hereafter located
thereon. Notwithstanding any maintenance obligations of Port set forth
in Section 1.9, in the event that Tenant, its Agents or Invitees cause
any damage (excepting ordinary wear and tear) to the Premises, Port
may repair the same at Tenant's expense and Tenant shall immediately
reimburse Port therefor.
11.2Port's Right to Inspect. In the event that damage or deterioration to
the Premises or any portion thereof which is Tenant's obligation to
maintain results in the same not meeting the standard of maintenance
required by Port for such uses as Tenant is making of the Premises,
then Tenant shall have the independent responsibility for, and shall
promptly undertake, maintenance or repair of the Premises and complete
the same with due diligence. Without limitation Section 25 hereof,
Port may make periodic inspections of the Premises and may advise
Tenant when maintenance or repair of the Premises is required, but
such right of inspection shall not relieve Tenant of its independent
responsibility to maintain such Premises and Improvements in a
condition as good as, or better than, their condition at the
Commencement Date, excepting ordinary wear and tear. If, after
reasonable notice in writing from Port, Tenant fails to undertake such
maintenance or repairs and complete the same with due diligence, then
in addition to any other remedy available to Port, Port may make such
maintenance or repairs at Tenant's expense and Tenant shall
immediately upon invoice reimburse Port therefor.
11.3Acts of God. Nothing contained herein shall require either Tenant or
Port to repair or replace the Premises or the Improvements thereon as
a result of damage caused by acts of war, earthquake, tidal wave or
other acts of God, except that this provision shall not affect any
obligation to make repairs to the Premises pursuant to Section 18 in
the event of any damage or destruction of the Premises.
12. UTILITIES AND SERVICES.
12.1 Utilities. Tenant shall make arrangements and shall pay all charges
for all utilities to be furnished on, in or to the Premises or to be
used by Tenant, including, without limitation, gas, electrical, water,
sewer and telecommunications services. Except as otherwise provided in
Section 1.10, Tenant shall pay all charges for said utilities,
including charges for the connection and installation of the utilities
specified in Section 1.10 from the location points specified therein.
Tenant shall be obligated, at its sole cost and expense, to repair and
maintain in good operating condition all utilities located within the
Premises and all utilities installed by Tenant (whether within or
outside the Premises). If Tenant requests Port to perform such
maintenance or repair, whether emergency or routine, Port shall charge
Tenant for the cost of the work performed at the then prevailing
standard rates, and Tenant agrees to pay said charges to Port promptly
upon billing. Tenant shall pay for repair of utilities located outside
the Premises (regardless of who installed the same) which are damaged
by or adversely affected by Tenant's use of such utility and shall be
responsible for all damages, liabilities and claims arising therefrom.
The parties agree that any and all utility improvements shall become
part of the realty and are not trade fixtures. Port makes no
representation or warranty that utility services, including
telecommunications services, will not be interrupted. Port shall not be
liable in damages or otherwise for any failure or interruption of any
utility services, including telecommunications services, furnished to
the Premises. No such failure or interruption shall constitute a basis
for constructive eviction, nor entitle Tenant to terminate this Lease
or abate the Rent.
12.2 Services. Tenant shall make arrangements and shall pay all charges
for all services to be furnished on, in or to the Premises or to be
used by Tenant, including, without limitation, garbage and trash
collection, janitorial service and extermination service.
13. IMPROVEMENTS AND ALTERATIONS.
13.1 Consent Required. Tenant shall not make, nor cause or suffer to be
made, any Alterations or Improvements to the Premises until Tenant
shall have procured and paid for all Regulatory Approvals required to
be obtained for such Alterations and Improvements, including, but not
limited to, any building or similar permits required by Port or its
Chief Harbor Engineer in the exercise of its jurisdiction with respect
to the Premises.
13.2 Construction Requirements. All Alterations or Improvements to the
Premises made by or on behalf of Tenant shall be subject to the
following conditions, which Tenant covenants faithfully to perform:
(a)All Alterations and Improvements shall be constructed in a good
and workmanlike manner and in compliance with all applicable
building, zoning and other applicable Laws, and compliance with the
terms of and the conditions imposed in any Regulatory Approval.
(b)All Alterations and Improvements shall be performed with
reasonable dispatch, delays beyond the reasonable control of Tenant
excepted; and
(c)At the completion of the construction of the Alterations or
Improvements, Tenant shall furnish one (1) set of "as-built"
drawings of the same made on or to the Premises. Unless otherwise
stated as a condition of the Regulatory Approval, this requirement
may be fulfilled by the submittal after completion of the
Alterations or Improvements of a hand-corrected copy of the
approved permit drawing(s).
13.3 Improvements Part of Realtv. All Alterations or Improvements to the
Premises made by or on behalf of Tenant which may not be removed
without substantial injury to the Premises shall immediately upon
construction become part of the realty, shall be owned by Port and
shall, at the end of the Term hereof, remain on the Premises
without compensation to Tenant, unless Port first waives its right
to the Alterations or Improvements in writing.
13.4 Removal of Improvements. At Port's election made in accordance with
Section 13.5 hereof, Tenant shall be obligated at its own expense
to remove and relocate or demolish and remove (as Tenant may
choose) any or all Alterations or Improvements which Tenant has
made to the Premises, including without limitation all telephone
wiring and equipment installed by Tenant. Tenant shall repair, at
its own expense, in good workmanlike fashion any damage occasioned
thereby.
13.5 Notice of Removal. Prior to the effective termination date of this
Lease, Port shall give written notice to Tenant (herein "Notice of
Removal") specifying the Alterations or Improvements or portions
thereof which Tenant shall be required to remove and relocate or
demolish and remove from the Premises, in accordance with Section
13.4. If termination is the result of loss or destruction of the
Premises or any Improvements thereon, Port shall deliver said
Notice of Removal to Tenant within a reasonable time after the loss
or destruction. If Tenant falls to complete such demolition or
removal on or before the termination of this Lease, Port may
perform such removal or demolition at Tenant's expense, and Tenant
shall reimburse Port upon demand therefor.
13.6 Removal of Non-Permitted Improvements. If Tenant constructs any
Alterations or Improvements to the Premises without Port's prior
written consent or without complying with section 13.2 hereof,
then, in addition to any other remedy available to Port, Port may
require Tenant to remove, at Tenant's expense, any or all such
Alterations or Improvements and to repair, at Tenant's expense and
in good workmanlike fashion, any damage occasioned thereby. Tenant
shall pay to Port all special inspection fees as set forth in the
San Francisco Building Code for inspection of work performed
without required permits.
14. SUITABILITY; ACCEPTANCE. Tenant acknowledges that Port has made no
representations or warranties concerning the Premises, including without
limitation, the seismological condition thereof. By taking possession of the
Premises, Tenant shall be deemed to have inspected the Premises and accepted
the Premises in an "As-Is" condition and as being suitable for the conduct of
Tenant's business.
15. LIENS. Tenant shall keep the Premises free from any liens arising out
of any work performed, materials furnished or obligations incurred by Tenant
or its Agents. In the event that Tenant shall not, within twenty (20) days
following the imposition of any such lien, cause the same to be released of
record, Port shall have, in addition to all other remedies provided by this
Lease or by Law, the right but not the obligation to cause the same to be
released by such means as it shall deem proper, including without limitation,
payment of the claim giving rise to such lien. All slims paid by Fort for such
purpose and ail reasonable expenses incurred by Port in connection therewith
shall be payable to Port by Tenant within thirty (30) days following written
demand by Port.
16. HAZARDOUS MATERIALS.
16.1 Requirements for Handling. Neither Tenant nor its Agents or Invitees,
shall Handle in, on or about the Premises any Hazardous Material
without the prior written consent of Port, which consent shall not be
unreasonably withheld so long as Tenant demonstrates to Port's
reasonable satisfaction that such Hazardous Material is necessary to
Tenant's business, will be Handled in a manner which strictly
complies with all Environmental Laws and will not materially increase
the risk of fire or other casualty to the Premises. Notwithstanding
the foregoing, Tenant may Handle on the Premises janitorial or office
supplies or materials in such limited amounts as are customarily used
for general office purposes so long as such Handling is at all times
in full compliance with all Environmental Laws.
16.2 Tenant Responsibility. Subject to the restrictions set forth in
Section 16.1 hereof, Tenant shall Handle all Hazardous Materials
discovered on the Premises during the Term of this Lease or
introduced on the Premises by Tenant, its Agents or Invitees, in
compliance with all Environmental Laws. Tenant shall not be
responsible for the safe Handling of Hazardous Materials introduced
on the Premises during the Term of this Lease by City, Port or their
Agents. Tenant shall protect its employees and the general public in
accordance with all Environmental Laws. Port may from time to time
request, and Tenant shall be obligated to provide, information
reasonably adequate for Port to determine that any and all Hazardous
Materials are being Handled in a manner which complies with all
Environmental Laws. Port shall have the right to inspect the Premises
for Hazardous Materials at reasonable times, pursuant to Section 25.1
hereof.
16.3 Requirement to Remove. Prior to termination of this Lease, Tenant, at
its sole cost and .expense, shall remove any and all Hazardous
Materials introduced in, on, under or about the Premises by Tenant,
its Agents or Invitees. Further, Tenant, at its sole cost and
expense, shall remove any Hazardous Material discovered on the
Premises during the Term of this Lease which is required to be
removed by any governmental agency, including Port; provided however,
that Tenant shall not be obligated to remove any Hazardous Material
introduced onto the Premises during the Term of this Lease by the
City, Port or their Agents. Prior to the termination of this Lease,
Port and Tenant shall conduct a joint inspection of the Premises for
the purpose of identifying a Hazardous Materials existing on the
Premises which Tenant is required to remove.
17. INSURANCE.
17.1 Required Insurance Coverage. Tenant, at its sole cost and expense,
shall maintain, or cause to be maintained, throughout the Term of
this Lease, the following insurance:
(a) General Liability Insurance. Comprehensive or commercial general
liability insurance, with limits not less than One Million
Dollars ($1,000,000.00) each occurrence combined single limit for
bodily injury and property damage, including coverage's for
contractual liability, independent contractors, broad form
property damage, personal injury, products and completed
operations, and fire damage and legal liability with limits not
less than Two Hundred Fifty Thousand Dollars ($250,000.00).
(b) Automobile Liability Insurance. Comprehensive or business
automobile liability insurance with limits not less than One
Million Dollars ($1,000,000.00) each occurrence combined single
limit for bodily injury and property damage, including coverages
for owned and hired vehicles and for employer's non-ownership
liability, which insurance shall be required if any automobiles
are operated on the Premises.
(c) Worker's Compensation: Jones Act,: U.S. Longshore and Harbor-
worker's Act Insurance. Worker's Compensation Insurance, U.S.
Long-shore and Harborworker's Act Insurance and Jones Act
Insurance with employer's liability limit not less than One
Million Dollars ($1,000,000.00) for each accident, on employees
eligible for each. In the event Tenant is self-insured for the
insurance required pursuant to this Section 17.1 (c), it shall
furnish to Port a current Certificate ofPermission to Self-Insure
signed by the Department of Industrial Relations, Administration
of Self-Insurance, Sacramento, California.
(d) Personal Property Insurance. Tenant, at its sole cost and
expenses, shall procure and maintain on all of its personal
property and Alterations, in, on, or about the Premises, property
insurance on an all-risk form, excluding earthquake and flood, to
the extent of full replacement value. The proceeds from any such
policy shall be used by Tenant for the replacement of Tenant's
personal property.
(e) Business Interruption Insurance Tenant, at its sole cost and
expense, shall maintain business interruption insurance insuring
that the Base Rent shall be paid to Port for a period of up to
one year if Tenant is unable to operate its business at the
Premises due to a risk insured against by the personal property
insurance referred to in Section 17.1(d) above. Said insurance
also shall cover business interruptions due to riots or civil
commotion.
(f) Required by Law. Such other insurance as required by Law.
(g) See Addendum. Such other insurance as specified in the Addendum
attached to this Lease, if any.
17.2 Claims-Made Policies. If any of the insurance required in Section
17.1 is provided under a claims-made form of policy, Tenant shall
maintain such coverage continuously throughout the Term and without
lapse for a period of three years beyond the termination of this
Lease, to the effect that should occurrences during the Term give
rise to claims made after termination of this Lease, such claims
shall be covered by such claims-made policies.
17.3 Annual Aggregate Limits. If any of the insurance required in Section
17.1 is provided under a form of coverage which includes an annual
aggregate limit or provides that claims investigation or legal
defense costs be included in such annual aggregate limit, such annual
aggregate limit shall be double the occurrence limits specified
herein.
17.4 Payment of Premiums. Tenant shall pay the premiums for maintaining
all required insurance.
17.5 Waiver of Subrogation Rights. The parties release each other,
and their respective authorized representatives, from any claims for
damage to the Premises or to the fixtures, personal property,
Improvements or Alterations of either Port or Tenant in or on the
Premises which are caused by or result from risks insured against
under any property insurance policies carried by the parties and
in force at the time of any such damage, to the extent such claims
for damage are paid by such policies. Each party shall cause each
property insurance policy obtained by it to provide that the
insurance company waives all right of recovery by way of subrogation
against the other party in connection with any damage covered by
any policy.
17.6 General Insurance Matters.
(a) All liability insurance policies required to be maintained by
Tenant hereunder shall contain a cross-liability clause, shall name
as additional insureds "THE CITY AND COUNTY OF SAN FRANCISCO AND
THE SAN FRANCISCO PORT COMMISSION AND THEIR OFFICERS, DIRECTORS,
EMPLOYEES AND AGENTS," shall be primary to any other insurance
available to the additional insureds with respect to claims arising
under this Lease, and shall provide that such insurance applies
separately to each insured against whom complaint is made or suit
is brought except with respect to the limits of the company's
liability.
(b) All insurance policies required to be maintained by Tenant
hereunder shall be issued by an insurance company or companies
reasonably acceptable to Port. Tenant's compliance with this
Section shall in no way relieve or decrease Tenant's liability
under this Lease.
(c) All insurance policies required to be maintained by Tenant
hereunder shall provide for thirty (30) days prior written notice
of cancellation or intended non-renewal or reduction in coverage to
Tenant and Port. Such notice shall be given in accordance with the
notice provisions of Section 30 of this Lease.
(d) Tenant shall deliver to Port certificates of insurance in a form
satisfactory to Port evidencing the coverages required herein,
together with evidence of payment of premiums, on or before the
Commencement Date, and upon renewal of each policy not less than
thirty (30) days before expiration of the term of the policy.
Tenant shall, upon Port's request, promptly furnish Port with a
complete copy of any insurance policy required hereunder.
(e) Not more often than every year and upon not less than sixty (60)
days prior written notice, Port may require Tenant to increase the
insurance limits set forth in Section 17.1 above if Port finds in
its reasonable judgment that it is the general commercial practice
in San Francisco to carry insurance in amounts substantially
greater than those amounts carried by Tenant with respect to risks
comparable to those associated with the use of the Premises.
18. DAMAGE AND DESTRUCTION.
18.1 Damage and Destruction. If the Premises or the Facility are damaged
by fire or other casualty, then Port shall repair the same provided
that funds for such repairs are appropriated by Port, in its sole
discretion, for such purpose and provided that such repairs can be
made within two hundred ten (210) days after the date of such damage
(the "Repair Period"). In the event such corrections are satisfied,
this Lease shall remain in full force and effect except that Tenant
shall be entitled to a proportionate reduction of Base Rent during
the Repair Period based upon the extent to which such damage and the
making of such repairs materially interferes with Tenant's use or
occupancy of the Premises. Port shall use its best efforts to notify
Tenant within ninety (90) days after the date of such damage whether
or not such repairs can be made within the Repair Period, and Port's
determination thereof shall be binding on Tenant. If such repairs
cannot be made within the Repair Period, Port shall have the option
to notify Tenant of: (a) Port's intention to repair such damage and
diligently prosecute such repairs to completion within a reasonable
period after the Repair Period, subject to appropriation of funds, in
which event this Lease shall continue in full force and effect and
the Base Rent shall be reduced as provided above; or (b) Port's
election to terminate this Lease as of a date specified in such
notice, which date shall be not less than thirty (30) nor more than
sixty (60) days after notice is given by Port. In case of
termination, the Base Rent shall be reduced as provided above, and
Tenant shall pay such reduced Base Rent up to the date of
termination. If at any time during the last twelve (12) months of the
Term, the Premises or the Facility is damaged or destroyed, then
either Port or Tenant may terminate this Lease by giving written
notice to the other party of its election to do so within thirty (30)
days after the date of the occurrence of such damage; provided,
however, Tenant may terminate only if such damage or destruction
substantially impairs its use or occupancy of the Premises. The
effective date of termination shall be specified in the notice of
termination, which date shall not be more than thirty (30) days from
the date of the notice. Notwithstanding anything to the contrary in
this Lease, Port shall have no obligation to repair the Premises or
the Facility in the event the damage or destruction is attributable
to any act or omission of Tenant, its Agents or Invitees. In no event
shall Port be required to repair any damage to Tenant's personal
property or any paneling, decorations, railings, floor coverings, or
any Improvements or Alterations installed or made on the Premises by
or at the expense of Tenant. In the event the Premises or the
Facility is substantially damaged or destroyed and Port intends to
rebuild for public purposes inconsistent with this Lease, Port may
terminate this Lease upon written notice to Tenant.
18.2 Waiver. Port and Tenant intend that the provisions of this Section
govern fully in the event of any damage or destruction and
accordingly, Port and Tenant each hereby waives the provisions of
Section 1932, subdivision 2, and Section 1933, subdivision 4, of the
Civil Code of California or under any similar Law now or hereafter in
effect.
19. EMINENT DOMAIN.
19.1 General. If ail or part of the Premises shall be taken by any public
or quasi-public authority under the power of eminent domain or
conveyance in lieu thereof, this Lease shall terminate as to any
portion of the Premises so taken or conveyed on the date when title
or the right to possession vests in the condemnor ("Date of Taking").
19.2 Partial Takings. If (a) a part of the Premises shall be taken by any
public or quasi-public authority under the power of eminent domain or
conveyance in lieu thereof, and (b) Tenant is reasonably able to
continue the operation of Tenant's business in that portion of the
Premises remaining, and (c) Port elects to restore the Premises to an
architectural whole, then this Lease shall remain in effect as to
said portion of the Premises remaining, and the Base Rent payable
from the Date of Taking shall be reduced by an amount that is in the
same ratio to the Base Rent as the value of the area so taken bears
to the total value of the Premises immediately before the Date of
Taking. If, after a partial taking, Tenant is not reasonably able to
continue the operation of its business in the Premises or Port elects
not to restore the Premises to an architectural whole, this Lease may
be terminated by either Port or Tenant by giving written notice to
the other party no earlier than thirty (30) days prior to the Date of
Taking and no later than thirty (30) days after the Date of Taking.
Such notice shall specify the date of termination which shall be not
less than thirty (30) nor more than sixty (60) days after the date of
said notice.
19.3 Taking of the Facility. If any substantial portion of the Facility is
taken under the power of eminent domain or conveyance in lieu
thereof, whether any portion of the Premises is taken or not, Port
shall have the right to terminate this Lease by written notice to
Tenant within thirty (30) days of the Date of Taking.
19.4 Temporary Takings. Notwithstanding anything to the contrary contained
in this Section, if a taking occurs with respect to all or any part
of the Premises for a limited period of time, this Lease shall remain
unaffected thereby and Tenant shall continue to pay Rent and to
perform all of the terms, conditions and covenants of this Lease.
Tenant shall be entitled to receive that portion of any award
representing compensation for the use or occupancy of the Premises
during the Term up to the total Rent owing by Tenant for the period
of the taking, and Port shall be entitled to receive the balance of
any award.
19.5 Award; Waiver. Port shall be entitled to any and all payment, income,
rent, award, or any interest therein whatsoever which may be paid or
made in connection with any taking or conveyance hereunder, and
Tenant shall have no claim against Port or otherwise for the value of
any unexpired term of this Lease. Notwithstanding the foregoing, to
the extent that the same shall not diminish Port's recovery for such
taking, Tenant shall have the right to make a claim, and to receive
any award specifically made to Tenant, for moving expenses and for
loss or damage to Tenant's trade fixtures, equipment and movable
furniture. Port and Tenant intend that the provisions of this Section
govern fully in the event of condemnation and accordingly, Port and
Tenant each hereby waive any right to terminate this Lease in whole
or in part under Sections 1265.120 and 1265.130 of the California
Code of Civil Procedure or under any similar law now or hereafter in
effect.
20. INDEMNITY AND EXCULTATION.
20.1 Indemnity. Tenant shall indemnify and hold Port, City, and their
agents, officers, directors, contractors and employees (collectively,
"Agents") harmless from, and, if requested, shall defend them against
any and all claims, direct or vicarious liability, damage, injury or
loss arising directly or indirectly out of: (a) any injury to or
death of any person, including employees of Tenant, or damage to or
destruction of any property occurring in, on or about the Premises,
or any part thereof, from any cause whatsoever, or (b) any default by
Tenant in the observance or performance of any of the terms,
covenants or conditions of this Lease, or (c) the use, occupancy or
condition of the Premises or the activities therein by Tenant, its
Agents, or clients, customers, invitees, guests, members, licensees,
assignees and subtenants (collectively, "Invitees"). This indemnity
shall be enforceable regardless of the negligence of Port or City,
and regardless of whether liability without fault is imposed or
sought to be imposed on Port or City. This indemnity shall be
enforceable except to the extent that such indemnity is void or
otherwise unenforceable under applicable law in effect on, or validly
retroactive to, the date of this Lease. This indemnity includes all
such loss, damage, injury, liability or claims as described above,
loss predicated in whole or in part, upon active or passive
negligence of Port, City or their Agents. This indemnity shall
exclude claims, liability, damage or loss resulting solely and
exclusively from the willful misconduct of Port or City which is not
contributed to by any act of, or by any omission to perform some duty
imposed by law or agreement on, Tenant, its Agents or invitees.
In addition to Tenant's obligation to indemnify Port and City,
Tenant specifically acknowledges and agrees that it has an immediate
and independent obligation to defend Port and City from any claim
which actually or potentially falls within this indemnification
provision, even if the allegations are or may be groundless, false or
fraudulent. Tenant's obligation to defend shall arise at the time
such claim is tendered to Tenant by Port and/or City and shall
continue at all times thereafter.
The foregoing indemnity obligation of Tenant shall include without
limitation, indemnification from all loss and liability, including
attorney's fees, court costs and all other litigation expenses. This
indemnification by Tenant shall begin from the first notice that any
claim or demand is or may be made. The provisions of this section
shall survive the termination of this Lease with respect to any
damage, destruction, injury or death occurring prior to such
termination.
20.2 Exculpation. Tenant, as a material part of the consideration to be
rendered to Port, hereby waives any and ail claims against Port, City
and their Agents, and agrees to hold Port, City and their Agents
harmless from any claims for damages to goods, wares, goodwill,
merchandise, equipment or business opportunities and by persons in,
upon or about said Premises for any cause arising at any time,
including without limitation all claims arising from the joint or
concurrent negligence of Port or City or their Agents, but excluding
any intentionally harmful acts committed solely by Port or City.
20.3 Hazardous Materials indemnification. Tenant shall indemnify, defend
and hold Port, City and their Agents harmless from any and all
claims, judgments, damages, penalties, fines, costs, liabilities or
losses which arise during or after the Term of this Lease as a result
of the Handling of Hazardous Materials on the Premises by Tenant, its
Agents or Invitees, including without limitation, all costs of
investigating and remediating the same, damages for diminution in the
value of the Premises, damages for the loss or restriction on use of
rentable or usable space or of any amenity of the Premises, damages
arising from any adverse impact on marketing of any such space and
sums paid in settlement of claims, attorneys' fees, consultant fees
and expert fees. This indemnification of Port and City by Tenant
includes, but is not limited to, costs incurred in connection with
any investigation of site conditions or any clean-up, remediation,
removal or restoration work requested by Port or required by any
federal, state or local governmental agency or political subdivision
because of Hazardous Material present in the soil or groundwater in,
on or under the Premises or in any Improvements. Without limiting the
foregoing, if the presence of any Hazardous Material in, on, under or
about the Premises caused or permitted by Tenant results in any
contamination of the Premises, Tenant, at its sole expense, promptly
shall take all action that is necessary to return the Premises to.
the condition existing prior to the introduction of such Hazardous
Material in, on, under or about the Premises; provided that Port
approval of such actions shall first be obtained, which approval
shall not be unreasonably withheld so long as such actions could not
potentially have any material adverse effect upon the Premises.
Tenant's obligations hereunder shall survive the termination of this
Lease.
21. ASSIGNMENT AND SUBLETTING.
21.1 Definition of Transfer. The occurrence of any of the following
(whether voluntarily, involuntarily or by operation of Law) shall
constitute a "Transfer" of this Lease:
(a) any direct or indirect assignment, conveyance, alienation, sublease,
or other transfer Tenant's interest in this Lease or in the Premises,
or any part thereof or interest therein; or
(b) the use of all or part of the Premises by any person or entity other
than Tenant, except Tenant's authorized Agents or Invitees; or
(c) if Tenant is a privately-held corporation, the dissolution, merger,
consolidation or other reorganization of Tenant, or any cumulative or
aggregate sale, transfer, assignment or hypothecation of fifty
percent (50%) or more of the total capital stock of Tenant or any
sale or cumulative sales of fifty percent (50%) or more of the value
of the assets of Tenant; or
(d) if Tenant is a partnership or an unincorporated association,
(i) the withdrawal or substitution(whether voluntarily, involuntarily
or by operation of Law and whether occurring at one time or over a
period of time) of any partner(s) owning fifty percent or more
of said partnership or association, or
(ii) the cumulative or aggregate sale, transfer, assigment or
hypothecation of fifty percent (50%) or more of any interest in the
capital or profits of such partnership or association, or
(iii) the dissolution of the partnership or association.
As used herein, the term "Transfer" includes a transfer of any
interest in this Lease held by any subtenant, assignee or transferee,
but does not include any hypothecation, encumbrance or mortgage of
this Lease made in accordance with Section 22.
21.2 Port's Consent Required. Tenant shall not make or permit any Transfer
of this Lease except with the prior written consent of Port in each
instance as evidenced by Port Commissions resolution and in full
compliance with all of the terms and provisions of this Section 21.
Any Transfer of this Lease occurring without full compliance with all
of the terms and conditions hereof shall constitute an incurable
breach by Tenant and shall be voidable at the option of Port.
21.3 Request for Transfer. Tenant shall give Port at least forty-five (45)
days prior written notice or any desired Transfer (herein "Notice of
Request to Transfer") and shall provide Fort with the following
information in writing: (1) the name, address, legal composition and
ownership of the proposed transferee, (2) the current balance sheet
and profit and loss statements (herein "financial statements") for
the proposed transferee and for any other entity or person who is to
be liable for Tenant's obligations under this Lease, such financial
statements to be certified in writing to be true and correct and to
be prepared in accordance with generally accepted accounting
principles and to cover a period of three years prior to the proposed
effective date of the Transfer (or for such shorter period as the
proposed transferee or other person may have been in existence), (3)
a full description of the terms and conditions of the proposed
Transfer, including copies of any and all proposed subleases or
assignment agreements or other documents and instruments concerning
the proposed Transfer, (4) a description of the proposed use of the
Premises by the proposed transferee, including any required or
desired Alterations or Improvements to the Premises that may be
undertaken by such transferee in order to facilitate its proposed
use, (5) complete information regarding all payments to be made or
other consideration to be given in connection with the Transfer; (6)
a list of personal, business and credit references of the proposed
transferee, (7) a current financial statement of Tenant, and (8) any
other information, documentation or evidence as may be requested by
Port, all in sufficient detail to enable Port to evaluate the
proposed Transfer and the prospective transferee. Tenant's Notice of
Request to Transfer shall not be deemed to have been served or given
until such time as Tenant has provided Port with all information set
forth hereinabove. Tenant shall immediately notify Port of any
modifications to the proposed terms of the Transfer.
21.4 Port's Consent/Refusal to Consent. Upon receiving a Notice of Request
to Transfer, Port shall have the right to do any of the following:
(a) Port may consent to the proposed Transfer, subject to any
reasonable conditions upon such Transfer, which conditions may
include, without limitation: (i) that the proposed transferee
expressly assume all obligations of Tenant under this Lease
without, however, Port releasing Tenant therefrom; (ii) that in the
event this Lease is terminated prior to the expiration of any
sublease, at the election of Port, such termination shall operate
to terminate all existing subleases entered into by Tenant without
further notice from Port; and (iii) that the sublease or other
Transfer agreement contain,: (A) an indemnification clause and
waiver of claims provisions in favor of Port and City identical to
those contained in Section 20 of this Lease; (B) a clause requiring
the proposed transferee to name City, Port and their Agents as
additional insureds under all liability and other insurance
policies; and (C) a clause requiring the proposed transferee to
acknowledge Port's right to demand increased insurance coverage to
normal amounts consistent with the proposed transferee's business
activities on the Premises.
(b) Port may deny its consent to the proposed Transfer on any
reasonable ground. Reasonable grounds shall include, without
limitation, any one or more of the following: (i) that the proposed
transferee's financial condition is or may become insufficient to
support all of the financial and other obligations of this Lease;
(ii) that the use to which the Premises will be put by the proposed
transferee is inconsistent with the terms of this Lease or
Otherwise will materially and adversely affect any interest of
Port; (iii) that the nature of the proposed transferee's intended
or likely use of the Premises would involve an increased risk of
the use, release or mishandling of Hazardous Materials or otherwise
increase the risk of fire or other casualty; (iv) that the business
reputation or character of the proposed transferee or any of its
affiliates is not reasonably acceptable to Port; (v) that the
proposed transferee is not likely to conduct on the property a
business of a quality substantially equal to that conducted by
Tenant; or (vi) that Port has not received assurances acceptable to
Port in its sole discretion that all past due amounts owing from
Tenant to Port (if any) will be paid and all other defaults on the
part of Tenant (if any) will be cured prior to the effectiveness of
the proposed Transfer. If Port denies its consent to the proposed
Transfer pursuant to this subsection (b), and if Tenant shall so
request in writing, Port shall provide to Tenant a statement of the
basis on which Port denies its consent.
(c) One hundred percent (100%) of all sums paid or payable to Tenant by
the transferee in excess of the then-existing Rent payable by
Tenant attributable to the portion of the Premises being
transferred, including without limitation, any rent and all other
sums or other consideration received by Tenant as a result of the
Transfer, in whatever form (less expenses for verifiable,
reasonable and customary brokerage commissions, Tenant
Improvements, lease concessions, value of Tenant's trade fixtures
conveyed and other expenses actually paid or obligations incurred
by Tenant in connection with the Transfer and/or expenses of
operating the Premises paid or incurred by Tenant) shall be paid by
Tenant to Port immediately upon receipt thereof by Tenant as
Additional Rent hereunder. Notwithstanding the foregoing, in the
event this Lease is assigned in connection with a sale of Tenant's
business, including the sale of Tenant's trade fixtures at the
Premises and Tenant's goodwill, and the assignee will continue to
operate the same business that Tenant operated at the Premises,
then the sums payable by Tenant to Port pursuant to this Section
21.4(c) shall be limited to those amounts attributable to the value
of Tenant's leasehold interest and shall not include amounts
attributable to the value of Tenant's goodwill, as such amounts are
determined by Port in Port's reasonable discretion.
(d) Tenant acknowledges and agrees that each of the rights of Port set
forth in this Section 21 is a reasonable limitation on Tenant's
right to assign or sublet for purposes of California Civil Code
Section 1951.4.
(e) No consent to any proposed Transfer, whether conditional or
unconditional, shall be deemed to be a consent to any other or
further Transfer of this Lease, or any other Transfer of this Lease
on the same or other conditions. No interest of Tenant in this
Lease shall be assignable by operation of Law.
21.5 Fees for Review. Tenant shall reimburse Port for all costs, including
without limitation attorney's fees, which are incurred by Port in
connection with the review, investigation, processing, documentation
and/or approval of any proposed Transfer.
21.6 No Release of Tenant. The acceptance by Port of Rent or other payment
from any other person shall not be deemed to be a waiver by Port of
any provision of this Lease or to be a consent to any subsequent
Transfer or to be a release of Tenant from any obligation under this
Lease. No Transfer of this Lease shall in any way diminish, impair or
release any of the liabilities and obligations of Tenant, any
guarantor or any other person liable for all or any portion of
Tenant's obligations under this Lease. The joint and several
liability of Tenant and Tenant's successors or transferees and the
obligations of Tenant under this Lease shall not be discharged,
released or impaired by any agreement by Port modifying any provision
of this Lease or extending time for performance hereunder or by any
waiver or failure of Port to enforce any obligations hereunder.
21.7 Assignment of Sublease Rents. Tenant immediately and irrevocably
assigns to Port, as security for Tenant's obligations under this
Lease, all of Tenant's interest in any rent from any Transfer of all
or any part of the Premises; except that, until the occurrence of an
act of default by Tenant, Tenant shall have the right to receive,
collect and enjoy such rents.
22. Leasehold Mortgages, Security Interests. Tenant shall, upon the prior
writ-ten consent of Port, which consent shall not be unreasonably
withheld, have the right from time to time to enter into a Leasehold
Mortages subject to the terms and conditions of this Section 22. For
the express benefit of all secured parties under a Leasehold Mortgage
hereinafter referred to as "Lender"), the parties agree as follows
during the term of any Leasehold Mortgage:
(a)The execution of any Mortgage, or the foreclosure thereof or any
sale thereunder or conveyance by Tenant to Lender, or the
exercise of any right, power or privilege reserved therein,
shall not constitute a violation of any of the Lease terms or
conditions of any assumption by Lender, personally, of Tenant's
obligations hereunder except as provided in subsection (c)
below.
(b)Lender, at its option, may at any time before Port's exercise
of any of its rights pursuant to this Section 22, or before the
expiration date of the period specified in subsection (f) below,
whichever last occurs, perform any of the covenants and
conditions required to be performed hereunder by Tenant. Any
performance of Tenant's duties by Lender shall be effective to
prevent the termination of this Lease.
(c) Port hereby agrees that Lender may record any such Leasehold
Mortgage and may enforce it and upon foreclosure sell and
assign Tenant's interest in this Lease and the Improvements, if
any, to another from whom it may accept a purchase price,
subject, however, to first securing written approval from Port,
which approval shall not be unreasonably withheld. Furthermore,
Lender may acquire title to the leasehold estate hereunder and
Tenants interest, if any, in the Improvements in any lawful
way, and if Lender becomes the assignee, Lender may sell or
assign said leasehold and Tenant's interest, if any, in any
Improvements. If Lender acquires Tenant's leasehold estate
hereunder by foreclosure or other appropriate proceedings or by
a proper conveyance from Tenant, Lender shall take subject to
all of the provisions of this Lease, and shall assume
personally all of the obligations of Tenant hereunder.
(d) If Lender acquires Tenant's leasehold estate hereunder by
foreclosure or other appropriate proceedings or by a conveyance
from Tenant in lieu of foreclosure, Lender shall attorn to Port
and, subject to the provisions of Section 21, may sublease such
portion for any period or periods within the Term, or may
assign Tenant's leasehold estate hereunder by sale or
otherwise.
(e) No such foreclosure or other transfer of Tenant's leasehold
estate nor the acceptance of any Rent by Port from another
shall relieve, release or in any manner affect Tenant's
liability hereunder.
(f) If an event of default under Section 23 hereof occurs, Lender
shall have thirty (30) days after receipt of written notice
from Port specifying Tenant's default to remedy such default.
In the event of a non-monetary default of Tenant, if Lender
shall have commenced appropriate proceedings in the nature of
foreclosure within such thirty (30) day period and is
diligently prosecuting the same, Lender shall have a reasonable
time beyond thirty (30) days within which to cure such
non-monetary default. Port's right to exercise its rights
pursuant to Section 23 hereof shall at all times, while such
Leasehold Mortgage encumbers Tenant's estate, be subject to and
conditioned upon Port's furnishing Lender such written notice
and Lender having failed to cure such default as provided
herein. The fact that the time has expired for performance of a
covenant by Tenant shall not render performance by Lender or a
purchaser impossible. In the event of a nonmonetary default of
Tenant, if Lender or any purchaser shall promptly undertake to
perform Tenant's defaulted obligation and shall diligently
proceed with such performance, the time for such performance
shall be extended by such period as shall be reasonably
necessary to complete such performance.
(g) Lender shall give written notice in accordance with Section 30
to Port of its address and the existence and nature of its
security interest. Failure to give such notice shall constitute
a waiver of Lender's rights hereunder.
(h) Immediately after a Leasehold Mortgage on all or a portion of
the leasehold estate is recorded, Tenant, at its own expense,
shall cause to be recorded in the Official Records a request
that Port receive written notice of any default and/or notice
of sale under the Leasehold Mortgage. In addition, Tenant shall
furnish to Port complete copies of the Leasehold Mortgage and
the note or other obligation secured thereby and any
modifications, amendments or extensions thereto. (i)
Notwithstanding any other provisions of this Lease, no such
transfer of Tenant's leasehold interest hereunder shall occur,
whether by written instrument, court order or otherwise, unless
Port shall first consent in writing. Such consent shall not be
unreasonably withheld. (i) The Leasehold Mortgage shall provide
that any proceeds from fire or extended coverage insurance
shall be used for repair or rebuilding of the Premises on the
terms and conditions set forth in this Lea-se, and not to repay
part of the outstanding Leasehold Mortgage.
(k) Tenant shall reimburse Port for any costs incurred by Port in
connection with the review and approval of any proposed
Leasehold Mortgage, or any transactions related thereto.
(1) Notwithstanding any other provisions of this Lease, Tenant
shall not under any circumstances encumber Port's estate in the
Premises. Any such encumbrance shall be void and shall
constitute a material default under this Lease.
23. DEFAULT BY TENANT.
23.1 Event of Default. The occurrence of any one or more of the following
events shall constitute a default by Tenant:
(a) Failure by Tenant to pay when due any Rent;
(b) Abandonment or vacation of the Premises by Tenant;
(c) Failure to perform any other provision of this Lease if the
failure to perform is not cured within thirty (30) days after
notice has been given by Port to Tenant. If the default cannot
reasonably be cured within 30 days, Tenant shall not be in
default of this Lease if Tenant commences to cure the default
within such thirty (30) day period and diligently and in good
faith continues to cure the default;
(d) Either (i) the failure of Tenant to pay its debts as they
become due, the written admission of Tenant of its inability to
pay its debts, or a general assignment by Tenant for the
benefit of creditors; or (ii) the filing by or against Tenant
of any action seeking reorganization, arrangement, liquidation,
or other relief under any Law relating to bankruptcy,
insolvency, or reorganization (unless such action is
involuntary and is discharged within sixty (60) days) or
seeking the appointment of a trustee, receiver or liquidator of
Tenant's or any substantial part of Tenant's assets; or (iii)
the attachment, execution or other judicial seizure of
substantially all of Tenant's interest in this Lease, unless
such seizure is discharged within ten (10) days.
Notices given under this section shall demand that Tenant perform the
provisions of this Lease or pay the Rent that is in arrears, as the
case may be, within the applicable period of time, or quit the
Premises. No such notice shall be deemed a forfeiture or a
termination of this Lease unless Port so elects in the notice.
23.2 Port's Remedies. Upon default by Tenant, Port shall, without further
notice or demand of any kind to Tenant or to any other person, have
the following remedies:
(a) Tenant's Right to Possession Not Terminated.
Port has the remedy described in Section 1951.4 of
the California Civil Code, under which it may continue this Lease
in full force and effect after Tenant's breach and abandonment,
and the Lease shall continue in effect, so long as Port does not
terminate Tenant's right to possession, and Port may enforce all
of its rights and remedies under this Lease, including the right
to collect Rent when due. During the period Tenant is in default,
Port may enter the Premises and relet them, or any part of them,
to third per-Lies for Tenant's account. Tenant shall be liable
immediately to Port for all reasonable costs Fort incurs in
reletting the Premises, including, but not limited to, broker's
commissions, expenses of remodeling the Premises required by the
reletting and like costs. Reletting can be for a period shorter
or longer than the remaining Term of this Lease. Tenant shall pay
to Port the Rent due under this Lease on the dates the Rent is
due, less the Rent Port receives from any reletting. No act by
Port allowed by this subsection shall terminate this Lease unless
Port notifies Tenant that Fort elects to terminate this Lease.
After Tenant's default and for as long as Port does not terminate
Tenant's right to possession of the Premises, if Tenant obtains
Port's consent Tenant shall have the right to assign or sublet
its interest in this Lease, but Tenant shall not be released from
liability.
(b)Termination of Tenant's Right to Possession. Port may terminate
Tenant's right to possession of the Premises at any time, No act
by Port other than giving notice of termination to Tenant shall
terminate this Lease. Acts of maintenance, efforts to relet the
Premises, or the appointment of a receiver on Port's initiative to
protect Port's interest under this Lease shall not constitute a
termination of Tenant's right to possession.
(c)Appointment of Receiver. If Tenant is in default of this Lease,
Port shall have the right to have a receiver appointed to collect
Rent and conduct Tenant's business. Neither the filing of a
petition for the appointment of a receiver nor the appointment
itself shall constitute an election by Port to terminate this
Lease.
(d)Port's Right to Cure Tenant's Default. Port, at any time after
Tenant commits a default, may, at Port's sole option, cure the
default at Tenant's cost. If Port at any time, by reason of
Tenant's default, undertakes any act to cure or attempt to cure
such default that requires the payment of any sums, or otherwise
incurs any costs, damages, or liabilities, (including without
limitation, attorneys' fees), all such sums, costs, damages or
liabilities paid by Port shall be due immediately from Tenant to
Port at the time the sum is paid, and if paid by Tenant at a later
date shall bear interest at the lesser of ten percent (10 %) or
the maximum non-usurious rate Port is permitted by Law to charge
from the date such sum is paid by Port until Port is reimbursed by
Tenant.
The remedies set forth in this Section 23.2 are not exclusive; they are
cumulative and in addition to any and all other rights or remedies of Port
now or later allowed by Law. Tenant's obligations hereunder shall survive
any termination of this Lease.
23.3 Damages. If Port elects to terminate this Lease under Section 23.2,
Port has the rights and remedies provided by California Civil Code Section 1
951.2, including the right to recover from Tenant the following:
(a) The worth at the time of award of the unpaid Rent which had been
earned at the date of termination of this Lease;
(b) The worth at the time of award of the amount by which the unpaid
Rent which would have been earned after termination until the
time of award exceeds the amount of such rental loss that Tenant
proves could have been reasonably avoided;
(c) The worth at the time of award of the amount by which the unpaid
Rent for the balance of the Term after the time of award exceeds
the amount of the loss of Rent that Tenant proves could be
reasonably avoided; and
(d) Any other amounts necessary to compensate Port for the detriment
proximately caused by Tenant's default, or which, in the ordinary
course of events, would likely result, including, but not limited
to, attorneys' fees and court costs, the costs of carrying the
Premises such as repairs, maintenance, taxes and insurance
premiums, utilities, security precautions and the reasonable
costs and expenses incurred by Port in (i) retaking possession of
the Premises; (ii) cleaning and making repairs and alterations
necessary to return the Premises to good condition and preparing
the Premises for reletting; (iii) removing, transportation and
storing any of Tenant's property left at the Premises (although
Port shall have no obligation so to do); and (iv) reletting the
Premises, including, without limitation, brokerage commissions,
advertising costs and attorneys' fees. Efforts by Port to
mitigate the damages caused by Tenants breach of the Lease do not
waive Port's rights to recover damages upon termination. The
"worth at the time of award" of the amounts referred to in
Sections 22.3(a) and (b) shall be computed by allowing interest
at an annual rate equal to the lesser of ten percent or the
maximum non-usurious rate Port is permitted by Law to charge. The
"worth at the time of award" of the amount referred to in Section
22.3(c) shall be computed by discounting the amount at the
discount rate of the Federal Reserve Bank of San Francisco at the
time of award, plus one percent (1%)
23.4 No Accord and Satisfaction. No payment by Tenant or receipt by Port
of an amount less than the Rent due under this Lease shall be deemed
to be other than "on account" of the earliest Rent due; nor shall any
endorsement or statement on any check or payment, or letter
accompanying such check or payment, be deemed an accord and
satisfaction. Port may accept any such partial payment or tender
without prejudice to its right to recover the balance of any amount
due and to pursue any other remedy herein provided at Law or in
equity.
24. LITIGATION EXPENSES.- ATTORNEYS' FEES.
24.1 Litigation Expenses. If either party hereto brings an action or
proceeding (including any cross-complaint or counterclaim) against
the other party by reason of a default, or otherwise arising out of
this Lease, the prevailing party in such action or proceeding shall
be entitled to recover from the other party its costs and expenses of
suit, including but not limited to reasonable attorneys' fees, which
shall be payable whether or not such action is prosecuted to
judgment. 'Prevailing party" within the meaning of this Section 24
shall include, without limitation, a party who substantially obtains
or defeats, as the case may be, the relief sought in the action,
whether by compromise, settlement, judgment or the abandonment by the
other party of its claim or defense.
24.2 Appeals. Attorneys' fees under this Section 24 shall include
attorneys' fees and all other reasonable costs and expenses incurred
in connection with any appeal.
24.3 City Attorney. For purposes of this Lease, reasonable fees of
attorneys of the City's Office of the City Attorney shall be based on
the fees regularly charged by private attorneys with an equivalent
number of years of professional experience (calculated by reference
to earliest year of admission to the Bar of any State) who practice
in San Francisco in law firms with approximately the same number of
attorneys as employed by the Office of the City Attorney.
25. PORT'S ENTRY ON PREMISES.
25.1 Entry for Inspection. Port and its authorized Agents shall have the
right to enter the Premises without notice at any time during normal
business hours of generally recognized business days, provided that
Tenant or Tenant's Agents are present on the Premises, for the purpose
of inspecting the Premises to determine whether the Premises are in
good condition and whether Tenant is complying with its obligations
under this Lease.
25.2 General Entry. In addition to its rights pursuant to Section 25.1, Port
and its authorized Agents shall have the right to enter the Premises at
all reasonable times and upon reasonable notice for any of the
following purposes:
(a) To perform any necessary maintenance, repairs or restoration to
the Premises, or to perform any services which Port has the
right or obligation to perform;
(b) To serve, post, or keep posted any notices required or allowed
under the provisions of this Lease;
(c) To post "For Sale" signs at any time during the Term; to post
'For Lease' signs during the last six months of the Term or
during any period in which Tenant is in default;
(d) To show the remises to prospective real estate brokers, agents,
buyers, or persons interested in an exchange, at any time during
the Term; to show the Premises to prospective tenants during the
last six months of the Term, or during any period in which
Tenant is in default;
(e) If any excavation or other construction is undertaken or is
about to be undertaken on any property or street adjacent to the
Premises, to shore the foundations, footings or walls of the
premises and to erect scaffolding and protective barricades
around and about the Premises as reasonably necessary in
connection with such activities (but not so as to prevent or
unreasonably restrict entry to the Premises), and to do any
other act or thing necessary for the safety or preservation of
the Premises during such excavation or other construction.
25.3 Emergency Entry. Port may either the Premises at any time, without
notice, or, in the event of an emergency. Port shall have the right
to use any and all means which Port may deem proper in such an
emergency in order to obtain entry to the Premises. Entry to the
Premises by any of said means, or otherwise, shall not under any
circumstances be construed or deemed to be a forcible or unlawful
entry into, or a detainer of the Premises, or an eviction of Tenant
from the Premises or any portion of them.
25.4 No Liability. Port shall not be liable in any manner, and Tenant
hereby waives any claim for damages, for any inconvenience,
disturbance, loss of business, nuisance, or other damage, including
without limitation any abatement or reduction in Rent, arising out of
Port's entry onto the Premises as provided in this Section 25, except
damage resulting solely from the active negligence or willful
misconduct of Port or its authorized representatives.
25.5 Non-Disturbance. Port shall use its best efforts to conduct its
activities on the Premises as allowed in this Section 25 in a manner
which, to the extent reasonably practicable, will cause the least
possible convenience, annoyance or disturbance to Tenant.
26. SURRENDER AND QUITCLAIM.
26.1 Surrender. Upon termination of this Lease Tenant shall surrender to
Port the Premises and all Improvements thereon in good condition
(except for ordinary wear and tear occurring after the last necessary
maintenance made by Tenant and except for destruction or condemnation
as described in Sections 18 and 19 hereof), except for Improvements
and Alterations which Tenant has the right to remove or is obligated
to remove under the provisions of Section 13. Tenant shall repair any
damage to the Premises for which Tenant is liable under this Lease.
Tenant shall remove all of its personal property and perform all
restoration made necessary by the removal of any Improvements,
Alterations or Tenant's personal property within the time periods
stated in this Lease. Port may elect to retain or dispose of any
Improvements or Tenant's personal property which Tenant does not
remove from the Premises as allowed or required by this Lease by
giving at least ten (10) days' prior written notice of such election
to Tenant. Except with respect to (i) Tenant's personal property as
to which Port has waived in writing any right it may have or may have
acquired, (ii) Tenant's property which is covered by any filed
financing statement, and (iii) any Hazardous Material left in or on
the Premises, title to any Improvements, Alterations or to Tenant's
personal property which Port elects to retain or dispose of upon
expiration of the ten-day period shall vest in Port. Tenant waives
all claims against Port for any damage to Tenant resulting from
Port's retention or disposition of any Improvements, Alterations or
Tenant's personal property. Tenant shall be liable to Port for all
costs incurred by Port for storing, removing or disposing of any
Improvements, Alterations or Tenant's personal property. If Tenant
falls to surrender the Premises as required by this Section 26.1,
Tenant shall hold Port harmless from all damages resulting from
Tenant's failure to surrender the Premises, including, but not
limited to, claims made by a succeeding tenant resulting from
Tenant's failure to surrender the Premises. No act or conduct of
Port, including, but not limited to, the acceptance of the keys to
the Premises, shall constitute an acceptance of the surrender of the
Premises by Tenant before the expiration of the Term. Only a notice
from Port to Tenant shall constitute acceptance of the surrender of
the Premises and accomplish a termination of this Lease.
26.2 Quitclaim. Upon termination of this Lease, the Premises shall
automatically, and without further act or conveyance an the part of
Tenant or Port, become the property of Port, free and clear of all
liens and Leasehold Mortgages and without payment therefor by Port
and shall be surrendered to Fort upon such date. Upon or at any time
after the date of termination of this Lease, if requested by Port,
Tenant shall promptly deliver to Port, without charge, a quitclaim
deed to the Premises and any other instrument reasonably requested by
Port to evidence or otherwise effect the termination of Tenant's
leasehold estate hereunder and to effect such transfer or vesting of
title to the Premises or any Improvements or Alterations that Port
agrees are to remain part of the Premises pursuant to the provisions
of Section 13.3 above.
27. HOLDING OVER. Any holding over after the expiration of the Term with the
consent of Port shall be deemed a month-to-month tenancy and shall be upon
each and every one of the terms, conditions and covenants of this Lease,
except that, at Port's election, the Rent shall be adjusted either in
accordance with the provisions of Section 5.2 or to the then current market
rate as reasonably determined by Port. Either party may cancel said
month-to-month tenancy upon thirty (30) days' written notice to the other
party.
28. MINERAL RESERVATION. The State of California, pursuant to Section 2 of
Chapter 1333 of the Statutes of 1968, as amended, has reserved all
subsurface mineral deposits, including oil and gas deposits, on or
underlying the Premises. In accordance with the provisions of said Statutes,
Port and Tenant shall and hereby do grant to the State of California the
right to explore, drill for and extract said subsurface minerals, including
oil and gas deposits, from the Mineral Reservation area located by the
California Grid System as more particularly described in Section 1.11
hereof.
29. CITY REQUIREMENTS.
29.1 Non-Discrimination. Tenant shall not, in the operation and use of
the Premises, discriminate against any person or group of persons
solely because of race, color, creed, national origin, ancestry, age,
sex, sexual orientation, disability or acquired immune deficiency
syndrome (AIDS) or AIDS related condition (ARC). The provisions of
Chapters 12B and 12C of the San Francisco Administrative Code,
relating to nondiscrimination by parties contracting with the City and
County of San Francisco, are incorporated herein by this reference and
made a part hereof as though fully set forth herein. Tenant agrees to
comply with all provisions of such Chapters 12B and 12C that apply to
tenants of the City and County of San Francisco.
29.2 MacBride Principles-Northern Ireland. City urges companies doing
business in Northern Ireland to move towards resolving employment
inequities and encourages such companies to abide by the MacBride
Principles. City urges San Francisco companies to do business with
corporations that abide by the MacBride Principles.
29.3 Tropical Hardwood Ban. City urges Tenant not to import, purchase,
obtain, or use for any purpose, any tropical hardwood or tropical
hardwood product.
29.4 Tobacco Products Advertising Ban. Tenant acknowledges and agrees
that no advertising of cigarettes or tobacco products is allowed on
any real property owned by or under the control of the City,
including the property which is the subject of this Lease. This
prohibition includes the placement of the name of a company
producing, selling or distributing cigarettes or tobacco products
or the name of any cigarette or tobacco product in any promotion of
any event or product. This prohibition does not apply to any
advertisement sponsored by a state, local or nonprofit entity
designed to communicate the health hazards of cigarettes and
tobacco products or to encourage people not to smoke or to stop
smoking.
30. NOTICES. Except as otherwise expressly provided in this Lease or by Law,
any and all notices or communications required or permitted by this Lease
or by Law to be served on, given to or delivered to either party by the
other party shall be in writing and shall be given by one of the following
methods: (a) delivering the notice in person, (b) sending the notice by
United States Mail, first, class, postage prepaid, or (c) sending the
notice by overnight courier or mail, with postage prepaid, to the mailing
address set forth in Section 1.12 Subject to the restrictions set forth
below and only for the convenience of the parties, copies of notices also
may be given by telefacsimile to the telephone number set forth in Section
1.12. Either party may change such party's mailing address or telefacsimile
number at any time by giving written notice of such change to the other
party in the manner provided above at least ten (10) days prior to the
effective date of the change. All notices under this Lease shall be deemed
to be duly served, given, delivered, made or communicated on the date
personal delivery actually occurs or, if mailed, on the date of deposit in
the United States Mail. A person or party may not give official or binding
notice by telefacsimile. Service of process at Tenant's address set forth
in Section 1.12 or other address, notice of which is given in accordance
with the terms of this Section 30, shall be valid and binding upon such
party.
31. TIME IS OF THE ESSENCE. Time is of the essence as to each and every
provision of this Lease.
32. SIGNS. Tenant shall not have the right to place, construct or maintain any
sign, advertisement, awning, banner or other exterior decoration on the
Premises without Port's prior written consent. Any sign that Tenant is
permitted to place, construct or maintain on the Premises shall comply
with all Laws relating thereto, including but not limited to Fort's Tenant
Sign Guidelines and building permit requirements, and Tenant shall obtain
all Regulatory Approvals required by such Laws. Port makes no
representation with respect to Tenant's ability to obtain such Regulatory
Approval. Tenant, at its sole cost and expense, shall remove all signs
placed by it on the Premises at the expiration or earlier termination of
this Lease.
33. MISCELLANEOUS PROVISIONS.
33.1 California Law. This Lease shall be construed and interpreted in
accordance with Laws of the State of California and City's Charter.
33.2 Entire Agreement. This Lease contains all of the representations and
the entire agreement between the parties with respect to the subject
matter of this agreement. Any prior correspondence, memoranda,
agreements, warranties, or written or oral representations relating
to such subject matter are superseded in total by this Lease. No
prior drafts of this Lease or changes from those drafts to the
executed version of this Lease shall be introduced as evidence in any
litigation or other dispute resolution proceeding by any party or
other person, and no court or other body should consider those drafts
in interpreting this Lease.
33.3 Amendments. No amendment of this Lease or any part thereof shall be
valid unless it is in writing and signed by all of the parties
hereto.
33.4 Severability. Except as is otherwise specifically provided for in
this Lease, invalidation of any provision of this Lease, or of its
application to any person, by judgment or court order, shall not
affect any other provision of this Lease or its application to any
other person or circumstance, and the remaining portions of this
Lease shall continue in full force and effect, unless enforcement of
this Lease as invalidated would be unreasonable or grossly
inequitable under all of the circumstances or would frustrate the
purposes of this Lease.
33.5 No Party Drafter; Captions. The provisions of this Lease shall be
construed as a whole according to their common meaning and not
strictly for or against any party in order to achieve the objectives
and purposes of the parties. Any caption preceding the text of any
section, paragraph or subsection or in the table of contents is
included only for convenience of reference and shall be disregarded
in the construction and interpretation of this Lease.
33.6 Singular, Plural, Gender. Whenever required by the context, the
singular shall include the plural and vice versa, and the masculine
gender shall include the feminine or neuter genders, and vice versa.
33.7 Successors. The terms, covenants, agreements and conditions set forth
in this Lease shall bind and inure to the benefit of Port and Tenant
and, except as otherwise provided herein, their personal
representatives and successors and assigns.
33.8 Real Estate Broker's Fees. Each party shall be responsible for the
payment of all fees and commissions to any real estate broker with
whom such party has contracted. Each party shall hold the other party
harmless from any and all damage resulting from any claim which may
be asserted against the other party by any broker, finder or other
person with whom the other party has or purportedly has dealt with
respect to this Lease.
33.9 Counterparts. For convenience, the signatures of the parties to this
Lease may be executed and acknowledged on separate paces which, when
attached to this Lease, shall constitute this as one complete Lease.
This Lease may be executed in any number of counterparts each of
which shall be deemed to be an original and all of which shall
constitute one and the same Lease.
33.10Authority. If Tenant signs as a corporation or a partnership, each
of the persons executing this Lease on behalf of Tenant does hereby
covenant and warrant that Tenant is a duly authorized and existing
entity, that Tenant has and is qualified to do business in
California, that Tenant has full right and authority to enter into
this Lease, and that each and all of the persons signing on behalf of
Tenant are authorized to do so. Upon Port's request, Tenant shall
provide Port with evidence reasonably satisfactory to Port confirming
the foregoing representations and warranties.
33.11Waiver. No failure by Port to insist upon the Strict performance of
any obligation of Tenant under this Lease or to exercise any right,
power or remedy arising out of a breach thereof, irrespective of the
length of time for which such failure continues, and no acceptance of
full or partial Rent during the continuance of any such breach shall
constitute a waiver of such breach or of Port's rights to demand
strict compliance with such term, covenant or condition. Port's
consent to or approval of any act by Tenant requiring Port's consent
or approval shall not be deemed to waive or render unnecessary Port's
consent to or approval of any subsequent act by Tenant. Any waiver by
Port of any default must be in writing and shall not be a waiver of
any other default concerning the same or any other provision of this
Lease.
34. NO LIGHT, AIR OR VIEW EASEMENT. Any diminution or shutting off of light,
air or view by any structure which may be erected on lands adjacent to the
Facility shall in no way affect this Lease or impose any liability on Port.
35. PROXIMITY OF WATERFRONT TRANSPORTATION PROJECT. Tenant acknowledges that
during the Term, the Waterfront Transportation Project involving (by way of
example only and not of limitation) the realignment of the Embarcadero
Roadway, Mid-Embarcadero freeway replacement, construction of a MUNI-metro
turnaround project, MUNI-metro extension, F-line historic streetcar line,
and a waterfront promenade, is scheduled to be constructed on property in
the immediate vicinity of the Premises. Tenant is aware that the
construction of such project and the activities associated with such
construction will generate certain adverse impacts which may result in some
inconvenience to or disturbance of Tenant. Said impacts may include, but
are not limited to, increased vehicle and truck traffic, traffic delays and
re-routing, loss of street and public parking, dust, dirt, construction
noise and visual obstructions. Tenant hereby waives any and all claims
against Port, City and their Agents arising out of such inconvenience or
disturbance, including without limitation any abatement or reduction of
Rent.
36. PROXIMITY OF MISSION BAY PROJECT. Tenant acknowledges that during the Term,
the Mission Bay Project is scheduled to be constructed on property in the
immediate vicinity of the Premises. Tenant is aware that the construction
of such project and the activities associated with such construction will
generate certain adverse impacts which may result in some inconvenience to
or disturbance of Tenant. Said impacts may include, but are not limited to,
increased vehicle and truck traffic, traffic delays and re-routing, loss of
street and public parking, dust, dirt, construction noise and visual
obstructions. Tenant hereby waives any and all claims against Port, City
and their Agents arising out of such inconvenience or disturbance,
including without limitation any abatement or reduction of Rent.
37. WAIVER OF RELOCATION ASSISTANCE RIGHTS. Tenant hereby waives any and all
rights, benefits or privileges of the California Relocation Assistance
Law, California Government Code 7260 et seq., and the Uniform Relocation
Assistance and Real Property Acquisition Policies Act, 42 U.S.C. 4601 et
sec., or under any similar law, statute or ordinance now or hereafter in
effect, except as provided in Section 19 hereof (Eminent Domain).
IN WITNESS WHEREOF, PORT and TENANT execute this Lease at San Francisco,
California, as of the last date set forth below.
PORT: TENANT:
CITY AND COUNTY OF SAN FRANCISCO, DARLING INTERNATIONAL INC, a
a municipal corporation, operating Delaware Corporation
by and through the SAN FRANCISCO
PORT COMMISSION
By /s/ Kirk W. Benpett By: /s/ Barney Dreiling
------------------------ ---------------------
KIRK W. BENPETT BARNEY DREILING
Acting Director, Tenant & Maritime Services Vice President
Dated: 7/12/96 Dated: 7/15/96
APPROVED AS TO FORM:
LOUISE H. RENNE, City Attorney
By: /s/
------------------------
Deputy City Attorney
Lease Prepared By: Nicolas Dempsey, Property Manager /s/
-----------
(initials)
<PAGE>
ADDENDUM TO LEASE NO. L-12239 BETWEEN
THE CITY AND COUNTY OF SAN FRANCISCO, THROUGH THE
SAN FRANCISCO PORT COMMISSION, Landlord,
and
DARLING INTERNATIONAL, Tenant
In the event of any conflict between the provisions of this Addendum
and provisions of the Lease, the provisions of this Addendum shall control.
Port and Tenant hereby agree as follows:
1. Section 4.2 of the Lease is hereby deleted in its entirety.
2. Section 6.2 (Possessory Interest Tax) is hereby amended in its entirety
to read as follows:
"6.2 Possessory Interest Tax. (a)Tenant recognizes and understands that this
Lease may create a possessory interest subject to property taxation and
that Tenant may be subject to the payment of property taxes levied on such
interest. Tenant further recognizes and understands that any sublease or
assignment permitted under this Lease and any exercise of any option to
renew or other extension of this Lease may constitute a change in ownership
for purposes of property taxation and therefore may result in a revaluation
of any possessory interest created hereunder. (b) Tenant agrees to pay
taxes of any kind, including, but not limited to, possessory interest
taxes, that may be lawfully assessed on the leasehold interest hereby
created and to pay all other taxes, excises, licenses, permit charges and
assessments based on Tenant's usage of the Premises that may be imposed
upon Tenant by law, all of which shall be paid when the same become due and
payable and before delinquency. (c) Tenant agrees not to allow or suffer a
lien for any such taxes to be imposed upon the Premises or upon any
equipment or property located thereon without promptly discharging the
same, provided that Tenant, if so desiring, may have reasonable opportunity
to contest the validity of the same. (d) San Francisco Administrative Code
Sections 23.6-1 and 23.6-2 require that the City and County of San
Francisco report certain information relating to this Lease, and any
renewals thereof, to the County Assessor within sixty (60) days after any
such transaction, and that Tenant report certain information relating to
any assignment of or sublease under this Lease to the County Assessor
within sixty (60) days after such assignment or sublease transaction.
Tenant agrees to provide such information as may be requested by the City
or Port to enable the City to comply with this requirement."
3. Section 8.4 is hereby added to the Lease to read as follows:
"8.4 Permitted Activities. Anything to the contrary in Section 8.2,
above notwithstanding, provided that Tenant has secured all necessary permits
from all governmental agencies having jurisdiction over the use of the Premises,
and further provided that unless otherwise prohibited by any laws, rules or
regulations issued by governmental agencies other than Port, Port agrees that
the permitted uses set forth in Sections 8.1 and 1.8 hereof shall not be
construed as Prohibited Activities as set forth in Section 8.2, above".
4. Section 16 of the Lease is hereby amended in its entirety to read as follows:
"16.1 Requirements for Handling. Neither Tenant nor its Agents or Invitees,
shall Handle in, on or about the Premises any Hazardous Material without the
prior written consent of Port, which consent shall not be unreasonably withheld
so long as Tenant demonstrates to Port's reasonable satisfaction that such
Hazardous Material is necessary to Tenant's business, will be Handled in a
manner which strictly complies with all Environmental Laws and will not
materially increase the risk of fire or other casualty to the Premises.
Notwithstanding the foregoing, Tenant may Handle on the Premises janitorial or
office supplies or materials in such limited amounts as are customarily used for
general office purposes so long as such Handling is at all times in full
compliance with all Environmental Laws.
Except as to any Hazardous Materials discovered on the Premises as a result of
Tenant's construction activities related to Tenant's improvements and
alterations to the Premises, as hereinabove provided, Tenant shall not be
responsible for the Handling of Hazardous Materials introduced onto the Parcel A
Premises prior to April 10, 1964 or onto the Parcel 8 Premises prior to May 20,
1968."
"16.2 Tenant Responsibility. Subject to the restrictions set forth in
Section 16.1 hereof, Tenant shall Handle all Hazardous Materials discovered on
the Premises as a result of Tenants construction activities related to Tenant's
alterations to the Premises, or introduced on the Premises after the
Commencement Date, in compliance with all Environmental Laws. Notwithstanding
the foregoing, Tenant shall not be responsible for the safe Handling of
Hazardous Materials introduced by the City, Port or their Agents. Tenant shall
protect its employees and the general public in accordance with all
Environmental Laws. Port may from time to time request, and Tenant shall be
obligated to provide, information reasonably adequate for Port to determine that
any and all Hazardous Materials are being Handled in a manner which complies
with all Environmental Laws. Port shall have the right to inspect the Premises
for Hazardous Materials at reasonable times, pursuant to Section 25.1 hereof."
" 16.3 Requirement to Remove. Prior to termination of this Lease,
Tenant, at its sole cost and expense, shall remove any and all Hazardous
Materials introduced in, on, under or about the Premises after the Commencement
Date. Further, Tenant, at its sole cost and expense, shall remove any Hazardous
Material discovered on the Premises during the Term of this Lease which is
required to be removed by any governmental agency, including Port; which removal
would not have been required except for Tenant's use of the Premises or Tenant's
construction activities related to Tenant's alteration to the Premises.
Notwithstanding the foregoing, Tenant shall not be obligated to remove any
Hazardous Materials introduced by the City, Port or their Agents, onto the
Premises after the Commencement Date. Except as otherwise provided in the
Section 16 (Hazardous Materials), Tenant shall not be obligated to remove any
Hazardous Materials introduced onto the Premises prior to the Commencement Date.
Prior to the termination of this Lease, Port and Tenant shall conduct a joint
inspection of the Premises for the purpose of identifying Hazardous Materials
existing on the Premises which Tenant is required to remove."
5. The reference in Section 17.1 (a) (General Liability Insurance) to
"...limits not less than One Million Dollars ($1,000,000.00)..." is hereby
amended to read "...limits of Five Million Dollars ($5,000,000.00)..."
6. Section 17.1 (d) (Personal Property Insurance) of the Lease is hereby
deleted in its entirety.
7. Section 17.1 (e) (Business Interruption Insurance) of the Lease is
hereby deleted in its entirety.
8. Section 17.1 (g) is hereby amended in its entirety to read as follows:
"17.1 (g) Exceptions to Required Insurance Coverage. Unless the maintenance of
such coverage shall be required by law (Section 17.1f) Tenant shall not be
required to maintain Jones Act Insurance".
9. Section 18 of the Lease is hereby deleted in its entirety and in its
place shall be substituted the following:
"18. DESTRUCTION.
18.1 Tenant's Obligation to Rebuild. If the Premises are totally or
partially damaged or destroyed during the Lease Term whether due
to an insured or uninsured casualty, Tenant shall make the
repairs necessary to restore the Premises to substantially the
same condition as they were in immediately before destruction
(in the case of insured damage whether or not any insurance
proceeds are sufficient to cover the actual cost of
restoration). Such destruction shall not terminate this Lease.
If the existing laws do not permit the restoration, either party
can terminate this Lease immediately by giving notice to the
other party.
18.2 Tenant's Restoration of Premises.
(a) Insured Loss: Adjustment of Minor Loss. If, during the Lease
Term, the Premises are destroyed from a risk covered by the
insurance described in section 17, and the total amount of loss
does not exceed Fifty Thousand Dollars ($50,000), Tenant shall
make the loss adjustment with the insurance company insuring the
loss. The proceeds shall be paid directly to Tenant for the sole
purpose of making the restoration of the Premises in accordance
with paragraph 18.1.,
(b) Insured Loss: Adjustment of Major Loss. If, during the Lease
Term, the Premises are destroyed from a risk covered by the
insurance described in Article 17, and the total amount of loss
exceeds Fifty Thousand Dollars ($50,000), Tenant shall make the
loss adjustment with the insurance company insuring the loss and
on receipt of the proceeds shall immediately pay them into a
special trust account for insurance proceeds that Tenant will
establish with an institutional lender or title company
("Insurance Trustee") approved by Port.
18.3 Insurance Trustee. All sums deposited with the Insurance
Trustee shall be held for the following purposes and the Insurance
Trustee shall have the following powers and duties:
(a) Progress Payments. The sums shall be paid in installments
by the Insurance Trustee to the contractor retained by Tenant as
construction progresses, for payment of the cost of restoration.
A 10% retention fund shall be established that will be paid to
the contractor on completion of restoration, payment of all
costs, expiration of all applicable lien periods, and proof that
the Premises are free of all mechanics' liens and lienable
claims.
(b) Certification; Appointment of Architect. Payments shall be
made on presentation of (a) certificates or vouchers from the
architect or engineer retained by Tenant showing (1) all of the
work for which reimbursement is being requested has been
completed in compliance with the plans and specifications
therefore, and all applicable laws and ordinances, (2) the sum
requested is justly required to reimburse Tenant for payments by
Tenant to the contractor, subcontractors, materialmen, laborers,
engineers, architects or other persons rendering services or
materials for the work (giving a brief description of the
services and materials), (3) when added to all sums previously
paid out by the Insurance Trustee, the sum requested does not
exceed ninety percent (90%) of the value of the work done to the
date of the certificate, and (4) the amount of the proceeds
remaining in the hands of the Trustee will be sufficient on
completion of the work to pay for the work in full (which shall
include, in such reasonable detail as Port may require an
estimate of the cost of the completion); (b) lien waivers
reasonably satisfactory to Port covering that part of the work
for which payment or reimbursement is being requested; and (c) a
search prepared by a title company or licensed abstractor or by
other evidence, reasonably satisfactory to Port, that no
mechanics' or other lien has been filed with respect to any part
of the Premises. If the Insurance Trustee, in its reasonable
discretion, determines that the certificates or vouchers are
being improperly approved by the architect or engineer retained
by Tenant, the Insurance Trustee shall have the right to appoint
an architect or an engineer to supervise construction and to
make payments on certificates or vouchers approved by the
architect or engineer retained by the Insurance Trustee. The
reasonable expenses and charges of the architect or engineer
retained by the Insurance Trustee shall be paid by the Insurance
Trustee out of the trust fund.
(c) Insufficient Proceeds. If the sums held by the Insurance
Trustee are not sufficient to pay the actual cost of
restoration, Tenant shall deposit the amount of the deficiency
with the Insurance Trustee within twenty (20) days after request
by the Insurance Trustee indicating the amount of the
deficiency.
(d) Excess Proceeds. Any sums not disbursed by the Insurance
Trustee after restoration has been completed and final payment
has been made to Tenant's contractor shall be delivered within
fifteen (15) days after demand made by Tenant to Port and shall
be disbursed as follows:
Personal Property. To the extent the excess proceeds are
attributable to the personal property which Tenant has the right
to remove at the end of the Lease Term, the excess shall be
delivered to Tenant. (ii) Additional Property. To the extent the
excess proceeds are attributable to any property which will be
owned by Port at the end of the Lease Term, as provided by
Section 13.2 and 26.1, the excess proceeds shall be delivered to
Port. (e) Costs of Insurance Trustee. All actual costs and
charges of the Insurance Trustee shall be paid by Tenant. (f)
Resignation of Insurance Trustee. If the Insurance Trustee
resigns or for any reason is unwilling to act or continue to
act, Port shall substitute a new trustee in the place of the
designated Insurance Trustee. The new trustee must be an
institutional lender or title company doing business in the City
in which the Premises is located. (g) Cooperation of Parties.
Both parties shall promptly execute all documents and perform
all acts reasonably required by the Insurance Trustee to perform
its obligations under this paragraph.
18.4 Restoration of Premises.
(a)Plans. Within thirty (30) days after the date that Tenant is
obligated to restore the Premises, Tenant at its cost shall
prepare final plans and specifications and working drawings
complying with applicable laws that will be necessary for
restoration of the Premises. The plans and specifications and
working drawings must be approved by Port. Port shall have thirty
(30) days after receipt of the plans and specifications and
working drawings to either approve or disapprove the plans and
specifications and working drawings and return them to Tenant. If
Port disapproves the plans and specifications and working
drawings, Port shall notify Tenant of its objections and Port's
proposed solution to each objection. Tenant acknowledges that the
plans and specifications and working drawings shall be subject to
approval of the appropriate government bodies and that they will
be prepared in such a manner as to obtain that approval.
(b) Procedure. The restoration shall be accomplished as follows:
(i) Construction Period. Tenant shall complete the restoration
within ninety (90) working days after final plans and
specifications and working drawings have been approved by the
appropriate government bodies and all required permits have been
obtained (subject to a reasonable extension for delays resulting
from causes beyond Tenant's reasonable control). (ii) Contractor.
Tenant shall retain a licensed contractor that is bondable. The
contractor shall be required to carry public liability and
property damage insurance and standard all risk coverage
insurance, during the period of construction in accordance with
Section 17.1 Such insurance shall contain waiver of subrogation
clauses in favor of Port and Tenant in accordance with the
provisions of Section 17.5. (iii) Notice. Tenant shall notify
Port of the date of commencement of the restoration not later
than twenty (20) days before commencement of the restoration to
enable Port to post and record notices of nonresponsibility. The
contractor retained by Tenant shall not commence construction
until a completion bond and a labor and materials bond have been
delivered to Port to insure completion of the construction. (iv)
Manner. Tenant shall accomplish the restoration in a manner that
will cause the least inconvenience, annoyance and disruption to
other tenants of the Project. (v) Notice of Completion. On
completion of the restoration, Tenant shall immediately record a
notice of completion in the county in which the Premises are
located. (vi) Insured Casualty Over $50,000. If the damage is
caused by an insured casualty in excess of $50,000, the
restoration shall not be commenced until sums sufficient to cover
the cost of restoration are placed with the Insurance Trustee as
provided in Section 18.2. (b).
18.5 Partial Destruction of Pier. If the Premises is located on a Pier and
fifty percent (50%) or more of the rentable area of the Pier is
damaged or destroyed by fire or other cause, notwithstanding that the
Premises may be unaffected, Port shall have the right, to be exercised
by notice in writing delivered to Tenant within sixty (60) days from
and after said occurrence, to elect to terminate this Lease. Upon the
giving of such notice to Tenant, the term of this Lease shall expire
on the third day after such notice is given, and Tenant shall vacate
the Premises and surrender the same to Port. Nothing in this Section 1
8 shall be construed as a limitation of Tenant's liability for any
damage or destruction, if such liability otherwise exists.
1 8.6 Port Not Obligated to Make Repairs. Port shall not be required to
repair any injury or damage by fire or other cause, or to make any
restoration or replacement of any Alterations, trade fixtures,
equipment or personal property placed or installed in the Premises by
Tenant or at the direct or indirect expense of Tenant. Tenant shall be
required to restore or replace the same in the event of damage, except
for damage caused solely by the Port's negligence or intentional
misconduct.
18.7 Rent Abatement. In the case of damage or destruction as described in
this Article 18, Base Rent payable by Tenant hereunder from the date
of damage until the repairs are completed shall be equitably reduced,
based upon the extent to which such repairs interfere with the
business carried on by Tenant in the Premises, but only to the extent
Port receives proceeds from rental income insurance paid for by
Tenant. Nothing in this paragraph shall be construed to permit the
abatement in whole or in part of Percentage Rent, but the computation
of Percentage Rent shall be based upon the revised Base Rent as the
same may be abated pursuant to this paragraph.
18.8 Waiver. Tenant waives the provisions of Sections 1932(2) and 1933(4)
of California Civil Code and any other statute, code or judicial
decisions which grants a tenant a right to terminate a lease in the
event of damage or destruction of leased Premises.
18.9 Notice by Tenant. Tenant shall give immediate notice to Port in the
event of any fire, accident or other damage or destruction of Premises
or the building of which the Premises are a part or of defects therein
or in any fixtures or equipment."
10. Section 20.3 of the Lease is hereby amended in its entirety to read
as follows:
"20.3 Hazardous Materials Indemnification. Tenant shall indemnify,
defend and hold Port, City and their Agents harmless from any and all claims,
judgments, damages, penalties, fines, costs, liabilities or losses which arise
during or after the Term of this Lease as a result of the Handling of Hazardous
Materials on the Premises by Tenant, its Agents or Invitees, including without
limitation, all costs of investigating and remediating the same, damages for
diminution in the value of the Premises, damages for the loss or restriction on
use of rentable or usable space or of any amenity of the Premises, damages
arising from any adverse impact on marketing of any such space and sums paid in
settlement of claims, attorneys' fees, consultant fees and expert fees.
This indemnification of Port and City by Tenant includes, but is not
limited to, costs incurred in connection with any investigation of site
conditions or any clean-up, remediation, removal or restoration work requested
by Port or required by any federal, state or local governmental agency or
political subdivision because of Hazardous Materials present in the soil or
groundwater in, on or under the Premises or in any Improvements released as a
result of Tenant's occupancy, use or construction activities occurring on the
Premises and/or as a result of Hazardous Materials introduced in, on, under or
about the Premises after the Commencement Date. Without limiting the foregoing,
if the presence of any Hazardous Material in, on , under or about the Premises
caused or permitted by Tenant results in any contamination of the Premises,
Tenant, at its sole expense, promptly shall take all action that is necessary to
return the Premises to the condition existing prior to the introduction of such
Hazardous Material in, on, under or about the Premises; provided that Port
approval of such actions shall first be obtained, which approval shall not be
unreasonably withheld so long as such actions could not potentially have any
material adverse effect upon the Premises. Tenant's obligations hereunder shall
survive the termination of this Lease".
11. Section 21.1 (e) is hereby added to the Lease to read as follows:
"21.1(e) Non-applicability of Certain Transfers. The provisions of Sections
21.1(c) hereabove notwithstanding, the aggregate sale, transfer, assignment or
hypothecation of any the capital stock of Tenant resulting from an interfamily
transfer of capital stock or any court approved intestate transfers of capital
stock or any transfers of capital stock in any court approved probate
proceedings shall not constitute a "Transfer" requiring Port's consent under the
provisions of Sections 21.2, 21.3, 21.4 and 21.5 of this Lease".
12. Section 38 is hereby added to the Lease to read as follows:
"38. Rent Credit for Wharfage and Dockage. Commencing on the First
Anniversary Date, not less than sixty (60) days after each Anniversary
Date, Tenant shall be entitled to a Rent Credit toward the next Lease
Year's Basic Rent obligation equal to the Wharfage and Dockage fees
actually received Port during the preceding Lease Year and which
Wharfage and Dockage fees were, in the sole and reasonable
determination of Port, generated directly as a result of Tenant's or
Tenant's subtenant or assignee's activities on the Premises. The
Wharfage and Dockage fees shall be those Wharfage and Dockage fees
actually levied and received by Port pursuant to Port's operative
published tariff schedule.
The value of the available Rent Credit during any Lease Year may not
exceed one half (1/2) of the total of Tenant's Base Rent obligation for
the same Lease Year.
If, at the end of any Lease Year or at the end of the Lease Term or
earlier termination of this Lease, there shall be unapplied Rent
Credits due pursuant to this Section 38, Tenant shall have no right to
such Rent Credits and any amounts represented thereby shall become the
sole property of Port."
13. Section 39 is hereby added to the Lease to read as follows:
"39.Burma (Myanmar) Business Prohibition. Tenant represents to Port that
Tenant is not the government of Burma (Myanmar), that Tenant is not a
person or business entity organized under the laws of Burma (Myanmar),
and that Tenant is not a 'prohibited person or entity,' defined in
Section 12J.2.G. of the San Francisco Administrative Code as any person
or entity designated by the Investor Responsibility Research Center as
having investments or employees in Burma, or any person or entity that
licenses any person or entity organized under the laws of Burma
(Myanmar) to produce and market its products. Port reserves the right
to terminate this Lease for default if Tenant violates the terms of
this section 27.5 (or 29.5). Chapter 12J of the San Francisco
Administrative Code is hereby incorporated by reference as though fully
set forth herein. The failure of Tenant to comply with any of its
requirements shall be deemed a material breach of this Lease. In the
event that Tenant fails to comply in good faith with any of the
provisions of Chapter 12J of the San Francisco Administrative Code,
Tenant shall be liable for liquidated damages for each violation in the
amount of One Thousand Dollars ($1,000.00)."
