MUP 1998-103WITY OF LA QUINTA '0
Community Development Department
78-495 CALLE TAMPICO
LA QUINTA, CA 92253
619-777-7125
—2
Case Number: G
Date ccepted:
Fee: F i n�
MINOR USE PERMIT APPLICATION
Minor Use Permit (MUP) applications are governed by Section 9.210.020 of the Zoning Code (A copy is attached). Uses
requiring a MUP have a low or moderate potential for adverse impacts on surrounding properties, residents, or businesses.
Review and approval by the Community Development Director for this application is required.
APPLICATION PURPOSE
Purpose of Request:
Assessor's Parcel No.:
General Location:_
Acreage:
Existing Zoning: S
Additional Information:
r-,/?- 2 1n00
,,-,e S T --
YOv,
written material can be submitted separately)
ARCHITECTURAL PLANS - Three copies of the architectural and landscape/irrigation plans shall be submitted with this
application unless otherwise determined by Department staff. Colored renderings may be required depending upon the
application being submitted.
Applicant:
Owner(s)
Address:
Address:
Signature of Appli
t Name)
5 uy
(Print Name)
rY
H
(Phone)
Date:
Authority for this application is heby
Signature of Property Owner(s):
Date:
Any false or misleading information given ��is application shall be grounds to deny this application. Signatures and addresses
of all property owners affected by this application shall be included in this submittal. Separate letters of authorization can be
submitted.
FMMUP-P
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78-495 CALLE TAMPICO — LA QUINTA, CALIFORNIA 92253 – (760) 777-7000
TDD (760) 777-1227
January 6, 1999
Mr. Roger Hobbs
1430 E. Chapman Avenue
Orange, CA 92866
SUBJECT: MWM tift,PSRMT "-103f
Dear Mr. Hobbs:
The Community Development Department hereby approves your application request to install a
temporary, construction trailer 55-401 Southern Hills within Tract 29004 during construction of
model houses, subject to the following Conditions:
1. Once the trailer is installed, it can remain on-site for a six-month period. However, an
extension of the six-month period may be applied for, with no additional fee, in writing to
the Community Development Department before expiration. The Community Development
Director may, after reviewing the facts, extend the use of the trailer for another six-month
period.
2. Use of the trailer shall be limited to the hours of construction as listed in the La Quinta
Municipal Code (Chapter 6.08, Nuisances). A copy of this time schedule can be obtained
from the Building and Safety Department.
3. A building permit is required for the temporary trailer and temporary electric power. Please
apply to the Building and Safety Department for a permit (760-777-7012). Written
permission from the property owner is required before a building permit can be issued.
4. The trailer shall be placed a minimum of 10 -feet from the street unless otherwise approved
by the Building and Safety Director.
5. A building address shall be installed on the trailer to help identify the temporary business
location (e.g., minimum 2 -inch high letters in a contrasting color).
6. Provide one 2AIOBC fire extinguisher inside the construction trailer and sign over the exit
door which states "Door to remain open during business hours." If you have any questions,
please contact Mr. Tom Hutchison, City Fire Safety Specialist at 760-863-8886.
7. The trailer, if elevated off the ground, shall be skirted with metal or wood siding material.
The skirting material shall be painted to match the exterior color of the construction trailer.
The exterior surfaces of the trailer shall be painted (or may be stuccoed) and in overall good
condition.
P:\FRED\MlJP98-103.wpd
MAILING ADDRESS — P.O. BOX 1504 — LA OUINTA, CALIFORNIA 92253
8. No temporary signs are permitted unless separately approved by this Department.
9. No exterior lighting for the trailer is allowed unless approved by the Building and Safety
Department. All security light fixtures shall be hooded to prevent light glare from being cast
onto adjacent residential properties.
10. Mounted close to the front door on the outside of the building shall be a written notice
informing emergency personnel of your 24-hour emergency phone number in case problems
arise that need your prompt attention (i.e., minimum one -inch high letters).
11. The trailer shall be removed from the site prior to the issuance of Certificates of Occupancy
for the last new single family house in the project.
12. Provide restroom facilities to accommodate on-site construction workers.
13. Dust control measures shall be employed if construction parking is allowed adjacent to the
trailer.
14. The City may elect to add conditions to this application request to mitigate any problems that
may arise and are not addressed herein.
If you have any questions, please contact me at 760-777-7065.
Sincerely,
JERRY HERMAN
COMMUNITY DEVE OPMENT DIRECTOR
CHRISTINE DI 10 O
Planning Manager
Enc.
c: Community Development Director
.Building and Safety Director
Public Works Director
Code Compliance Department
Sheriff's Department
Greg Butler, Counter Technician, Building And Safety Department
PAFRED\MUP98-103.wpd 1. 2
LEASE AGREEMENT
This LEASE AGREEMENT ("Lease"), dated October 30, 1998 is made and entered into by
and between KSL LAND III CORPORATION, a Delaware corporation ("Landlord"), and
SOUTHERN HILLS, LLC, a California limited liability company. ("Tenant"), who agree, in
general:
A. Landlord owns the Premises (as defined below) and Tenant desires to lease the Premises
from Landlord.
B. Landlord hereby leases and Tenant accepts such lease upon the terms and conditions set
forth below.
1. PREMISES.
1.1 Lease of Premises. Landlord leases to Tenant, and Tenant leases from Landlord,
the premises ("Premises") consisting of that certain real property known as Parcel 1 of Parcel Map
28805 as per Parcel Map filed in Book 194, pages 84 and 85, inclusive of Parcel Maps, Official
Records of the County of Riverside, State of California.
2. TERM.
2.1 Effective Date. The Lease will become effective when signed by the Landlord and
Tenant.
2.2 Term of Lease. The term of the Lease ("Term") shall begin on the Commencement
Date and continue until the earlier to occur of. -(i) twelve (12) months from the Commencement
Date or (ii) Tenant has sold and closed escrow on all residential dwelling units to be constructed
and sold by Tenant on the Real Property pursuant to the terms of, and as defined in the Purchase
Agreement (as defined in Paragraph 2.3 herein).
Tenant shall have the right to extend the Term for up to two (2 )additional six (6) month
periods upon compliance with the following:
(a) Tenant shall give Landlord written notice of its election to extend the Term
at least thirty (30) days prior to the current expiration thereof,
(b) At the time of such notice to extend by Tenant, Tenant is not then in default
under the Lease, the Purchase Agreement or the Development Declaration (as defined in the
Purchase Agreement); and,
(c) Tenant has not sold and closed escrow on all residential dwelling units to be
constructed and sold by Tenant pursuant to the Purchase Agreement.
SOHillsLsePazcel I close 1 10/28/98
(d) Each six (6 ) month extension period must be exercised consecutively, and
in the event Tenant fails to timely elect to exercise its right to extend for one of the six (6) month
periods, then the right to extend for subsequent extension periods shall lapse and be of no further
force or effect.
In the event Tenant timely exercises its right to extend the Term, such extension shall be
under the same terms and conditions as the original twelve (12) month Tenn.
Notwithstanding the foregoing, Landlord reserves the right to terminate this Lease at any
time upon thirty (30) days prior written notice to Tenant.
2.3 Commencement Date. The Term of this Lease and the Rent shall commence on
the later of (a) the Close of Escrow of the transaction as described in that certain Agreement of
Purchase and Sale, Option to Purchase, and Joint Escrow Instructions dated October 26, 1998 by
and between KSL Land Corporation, a Delaware corporation, and Tenant for that certain real
property described as Parcels 2 through 4, inclusive of Parcel Map No. 28805, within PGA West,
adjacent to the Jack Nicklaus Tournament Golf Course, in the City of La Quinta, County of
Riverside, State of California (the "Purchase Agreement"); or, (b) November 1, 1998.
2.4 Delivery of Premises. The Premises will be delivered to Tenant upon the
Commencement Date.
2.5 Early Entry onto Premises. Tenant may enter onto the Premises upon receipt of
Landlord's consent, for the sole purposes of storing a construction trailer and construction materials
and equipment. Such early entry will not advance the Commencement Date, providing Tenant does
not commence business operations from any part of the Premises. If Tenant is allowed early entry,
Landlord shall not be responsible for any loss, including theft, damage or destruction to any work
or material installed or stored by Tenant at the Premises or for any injury to Tenant or Tenant
Parties, Landlord shall have the right to post the appropriate notices of non -responsibility and to
require Tenant to provide Landlord with evidence that Tenant has fulfilled is obligation to provide
insurance pursuant to paragraph 12.2 of this Lease
2.6 Notice of Commencement Date. Landlord shall send Tenant notice of the
occurrence of the Commencement Date in the form of the attached Exhibit "A", which notice
Tenant shall acknowledge by executing a copy of the notice and returning it to the Landlord.
3. RENT.
3.1 Payment of Rental. Tenant agrees to pay Landlord as rent for the Premises the
sum of Three Hundred Dollars ($300.00) per month ("Rental"), in advance, on or before the first
day of each calendar month during the entire Tenn. Concurrently with the execution of the Lease,
Tenant shall pay to Landlord the sum of Three Hundred Dollars ($300.00), representing the
Rental payable hereunder for the first full calendar month of the Term. On the Commencement
Date, Tenant shall pay to Landlord the prorated Rental attributable to the month in which the
Commencement Date occurs if the Commencement Date occurs on a date other than the first day of
a calendar month.
SoHillsLseParcel 1 close 2 10/28/98
3.2 Governmental Assessments. In addition to the Rental, Tenant shall pay, prior to
delinquency, all personal property taxes, charges, rates, duties and license fees assessed against or
levied upon Tenant's occupancy of the Premises, or upon any tenant improvements, trade fixtures,
furnishings, equipment or other personal property contained on the Premises and owned by Tenant
(collectively "Tenant's Personal Prope=' ), and Tenant shall cause such Assessments upon
Tenant's Personal Property to be billed separately from the property of Landlord. Tenant
indemnifies and holds Landlord harmless from and against the payment of all such Assessments.
Landlord shall pay all real property tax applicable to the Premises. Real property taxes shall
include any form of real estate tax or assessment, general, special, ordinary or extraordinary, and
any license fee, commercial rental tax, improvement bond or bonds, levy or tax (other than
inheritance, personal income or estate taxes) imposed on the Premises by any authority having the
direct or indirect power to tax, including any city, state or federal government, or any school,
agricultural, sanitary, fire, street, drainage or other improvement district thereof as against any legal
or equitable interest of Landlord in the Premises or in the real property of which the Premises are a
part, as against Landlord's right to rent or other income therefore, and as against Landlord's
business of leasing the Premises.
3.3 Special Charges for Special Services. Tenant agrees to pay to Landlord, upon
demand, all charges for any services, utilities, goods or materials furnished at the request of Tenant,
by Landlord which are not required to be furnished by Landlord under the Lease without separate
charge or reimbursement.
3.4 Definition of Rent. Any and all payments of Rental and any and all taxes, fees,
charges, costs, expenses, insurance obligations, late charges, and all other payments, disbursements
or reimbursements (collectively "Rent") which are attributable to, payable by or the responsibility
of Tenant under the Lease, constitute "rent" within the meaning of California Civil Code Section
1951(a). Any Rent payable to Landlord by Tenant for any fractional month shall be prorated based
on a three hundred sixty-five (365) day year. All payments owed by Tenant under the Lease shall
be paid to Landlord in lawful money of the United States of America at the location specified by
Landlord pursuant to Paragraph 31 of the Lease. All payments of Rent shall be paid by Tenant by
check on a bank that is a member of the California Banker's Clearing House Association. All
payments shall be paid without deduction, setoff or counterclaim.
3.5 Late Charge. Tenant acknowledges that the late payment of Rent will cause
Landlord to incur damages, including administrative costs, loss of use of the overdue funds and
other costs, the exact amount of which would be impractical and extremely difficult to ascertain.
Landlord and Tenant agree that if Landlord does not receive a payment of Rent on or before ten
(10) days after the date that such payment is due, Tenant shall pay to Landlord a late charge
computed at the Interest Rate on the overdue amounts, from the date payment of such amounts was
due until Landlord receives the overdue payment. Acceptance of the late charge by Landlord shall
not cure or waive Tenant's default, nor prevent Landlord from exercising, before or after such
acceptance, any of the rights and remedies for a default provided by this Lease or at law. Payment
of the late charge is not an alternative means of performance of Tenant's obligation to pay Rent at
the times specified in this Lease. Tenant will be liable for the late charge regardless of whether
SoHilUseParcel 1 close 3 10/28/98
Tenant's failure to pay the Rent when due constitutes a default under the Lease. The term "Interest
Rate" shall mean the lower of the maximum interest rate permitted by law or two percent (2%)
above the rate publicly announced from time to time by the Bank of America as it's Reference Rate.
If the use of the announced Reference Rate is discontinued by the Bank, then the reference to
Reference Rate shall mean the announced rate charged by the Bank which is from time to time
substituted for such Reference Rate.
3.6 Acceleration of Rental Payments. In the event a late charge becomes payable
pursuant to Paragraph 3.5 of the Lease for two (2) installments of Rental within a six (6) month
period, then all subsequent Rental payments shall immediately and automatically become payable
by Tenant quarterly in advance instead of monthly.
4. UTILITIES.
4.1 Utility Services. Tenant shall be solely responsible for obtaining all water, gas,
telephone, heat, electricity and any other utility (the "Utility Services") servicing the Premises,
including, but not limited to, providing any utility lines or hook-ups required to provide the Utility
Services to the Premises. Tenant shall promptly pay to the appropriate utility company when due,
all charges for such utilities, including, but not limited to, hook-up and permit fees, from and after
delivery of possession of the Premises by Landlord. If any such charges are not paid when due,
Landlord may, but shall not be required to, pay the same and any amount so paid, together with any
other sums incurred by Landlord in connection with the handling of such payment, shall
immediately thereafter become due Landlord from Tenant as additional rent. If a separate meter is
required for any utility service, then such meter shall be installed by Tenant and Tenant shall
maintain the same in good condition, order and repair, all at Tenant's expense.
4.2 Compliance with Regulations. Tenant, at its sole cost and expense, shall fully
observe and promptly comply with all present and future legal and regulatory requirements relating
to or affecting the Premises in connection with the consumption or use of energy and water. Tenant
agrees, at its sole cost and expense, to abide by all regulatory guidelines applicable to such utilities
and to undertake and complete any and all repairs and/or alterations which may be required to bring
all Utility Services relating to the Premises into strict compliance with all such legal and regulatory
requirements. Should Tenant refuse or neglect to comply with such requirements, Landlord may,
but shall not be required to, cause the required repairs and/or alterations to be made, and all such
costs incurred by Landlord shall immediately thereafter become due Landlord from Tenant as
additional rent. Tenant also agrees to indemnify and hold harmless Landlord against any claims
resulting from the failure of Tenant to comply with all such legal and regulatory requirements
unless such failure of Tenant to so comply, was caused by Landlord preventing Tenant from
complying with such legal and regulatory requirements. This indemnification shall extend to
reasonable attorneys fees and all other reasonable costs, expenses and liabilities.
4.3 Waiver of Liability. Regardless of the entity which shall supply any utility or
provide any Utility Services referred to in this Article 4, Landlord shall not be liable in damages or
otherwise for any failure or interruption of any such utility or service. No failure or interruption of
any utility or service shall entitle Tenant to terminate this Lease or stop making any rental payments
or any other payments due under this Lease.
SoHi IlsLseParcel 1 close 4 10/28/98
4.5 Landlord's Right To Cease Providing Services. Landlord reserves the right in its
sole and absolute discretion to reduce, interrupt or cease the Utilities Services of the Premises, for
any or all of the following reasons or causes:
(i) any accident, emergency, governmental regulation, or Act of God,
including, but not limited to, any cause set forth in Paragraph 26 of the Lease; or
(ii) the making of any repairs, additions, alterations or improvements to the
Premises or the Property until said repairs, additions, alterations or improvements shall have been
completed.
Notwithstanding the foregoing, Landlord shall give reasonable notice to Tenant of
interruption of services for the purposes of subparagraph (ii) hereinabove. To the extent possible
such repairs, additions, alterations or improvements shall be done during non -business hours.
No such interruption, reduction or cessation of any such Utilities Services, except for those
resulting from Landlord's gross negligence or willful misconduct, shall constitute an eviction or
disturbance of Tenant's use or possession of the Premises, or an ejection of Tenant from the
Premises, or a breach by Landlord of any of its obligations, or render Landlord liable for any
damages, including but not limited to any damages, compensation or claims arising from any
interruption or cessation of Tenant's business, or entitle Tenant to be relieved from any of its
obligations under the Lease, or result in any abatement of Rent. In the event of any such
interruption, reduction or cessation, Landlord shall use reasonable diligence to restore such service
where it is within Landlord's reasonable control to do so.
5. SECURITY DEPOSIT.
Concurrently with the execution of the Lease, Tenant shall deposit with Landlord the sum
of Three Hundred Dollars ($300.00) ("Deposit"), which shall be held by Landlord as security for
the full and faithful performance of Tenant's covenants and obligations under this Lease. The
Deposit is not an advance Rental deposit, an advance payment of any other kind, or a measure of
Landlord's damages in case of Tenant's default. If Tenant fails to comply with the full and timely
performance of any or all of Tenant's covenants and obligations set forth in this Lease, then
Landlord may, from time to time, without waiving any other remedy available to Landlord, use the
Deposit, or any portion of it, to the extent necessary to cure or remedy such failure or to
compensate Landlord for all damages sustained by Landlord resulting from Tenant's default. Tenant
shall immediately pay to Landlord on demand the amount so applied in order to restore the Deposit
to its original amount, and Tenant's failure to immediately do so shall constitute a default under the
Lease. If Tenant is not in Default with respect to the covenants and obligations set forth in this
Lease does not exist at the expiration or termination of the Lease, Landlord shall return the Deposit
to Tenant after the expiration or termination of the Lease. Landlord's obligations with respect to the
Deposit are those of a debtor and not a trustee. Landlord shall not be required to maintain the
Deposit separate and apart from Landlord's general or other funds, and Landlord may commingle
the Deposit with any of Landlord's general or other funds. Tenant shall not at any time be entitled
to interest on the Deposit.
SoHillsLseParcel I close 5 10/28/98
•
6. USE.
•
6.1 Permitted Use. The Premises shall be for the purpose of installing a construction
trailer (the "Construction Trailer")and providing a storage area for construction materials and
equipment (the "Stored Items") in connection with the construction of residential dwelling units by
Tenant on the Real Property (as defined in the Purchase Agreement) and no other purpose.
6.2 Restriction on Use. Tenant shall not conduct or permit any activities to be done.or
performed in or about the Premises except as expressly permitted under Paragraph 6.1 above.
Tenant shall not do or permit to be done in or about the Premises nor bring, keep or permit to be
brought or kept therein, anything which is prohibited by any standard form fire insurance policy or
which will in any way increase the existing rate of, or affect, any fire or other insurance upon the
Premises. Tenant, at Tenant's sole cost, shall comply with all Laws, affecting the Premises, and the
requirements of any Board of Fire Underwriters or other similar body now or hereafter instituted,
and shall also comply with any order, directive or certificate of occupancy issued pursuant to any
Laws, which affect the condition, use or occupancy of the Premises (including, but not limited to,
any requirements of structural changes), Tenant shall bear such costs which result from or are
related to Tenant's acts, occupancy or use of the Premises. The judgment of any court of competent
jurisdiction or the admission of Tenant in any action against Tenant, whether or not Landlord is a
party to such action, shall be conclusive as between Landlord and Tenant in establishing such
violation.
6.3 Compliance with Development Declaration and Homeowners Association.
Tenant hereby agrees to comply with, and its use of the Premises shall be subject to, the terms and
conditions of the Development Declaration (as defined in the Purchase Agreement). Tenant further
agrees to comply with any reasonable requests of the Master Association and Sub -Association (as
both are defined in the Purchase Agreement) (collectively the "Associations") and to cooperate with
the Associations to maintain the Premises in a clean and attractive manner.
7. IMPROVEMENTS AND ADDITIONS.
7.1 Tenant's Rights to Make Improvements. Following the date on which Tenant
first occupies the Premises, Tenant, at its sole cost and expense, shall have the right to place the
Construction Trailer and Stored Items upon the Premises. Such right, however, is subject to
Landlord's prior written consent (which Landlord can withhold in its sole and absolute discretion)
to the elevation, color and size of the Construction Trailer. The Construction Trailer and Stored
Items are collectively called the "Improvements". All such Improvements shall be made in
conformity with the requirements of Paragraph 7.2 below.
7.2 Installation of Improvements. Any Improvements installed by Tenant during the
Term shall be done in strict compliance with all of the following:
(a) No such work shall proceed without Landlord's prior approval of (i) Tenant's
contractor(s); (ii) certificates of insurance from a company or companies having an A.M. Best &
Co. rating of A -X or better and admitted to do business in the State of California, fiunished to
Landlord by Tenant's contractor, for Combined Single Limit Bodily Injury and Property Damage
SoHillsi-seParcel l close 6 10/28/98
Insurance covering comprehensive general liability and automobile liability, in an amount not less
than Three Million Dollars ($3,000,000) per occurrence and endorsed to show Landlord as an
additional insured, and for workers' compensation as required by law, endorsed to show a waiver of
subrogation by the insurer to any claims Tenant's contractor may have against Landlord (such
policies shall include a provision requiring a minimum of thirty (30) days notice to Landlord of any
change or cancellation); and (iii) detailed plans and specifications for such work;
(b) All such work shall be done in conformity with a valid building permit
and/or all other permits or license when and where required, copies of which shall be fiu-nished to
Landlord before the work is commenced, and any work not acceptable to any governmental
authority or agency having or exercising jurisdiction over such work, or not reasonably satisfactory
to Landlord, shall be promptly replaced and corrected at Tenant's expense. Landlord's approval or
consent to any such work shall not impose any liability upon Landlord. No work shall proceed
until and unless Landlord has received at least ten (10) days notice that such work is to commence;
(c) Tenant shall immediately reimburse Landlord for any expense incurred by
Landlord by reason of any faulty work done by Tenant or Tenant's contractors, or by reason of
delays caused by such work, or by reason of inadequate cleanup;
(d) Tenant or its contractors will in no event be allowed to make plumbing,
mechanical, or electrical improvements to the Premises which adversely affect the Premises.
(e) All work by Tenant shall be scheduled through Landlord and shall be
diligently and continuously pursued from the date of its commencement through its completion;
and
(f) Tenant shall obtain any bonds required by Landlord pursuant to Paragraph 9
of the Lease.
7.3 Treatment at End of Lease. All Improvements must be removed by Tenant at the
end of the Term and the Premises restored to its conditions as existed prior to the Commencement
Date, or Tenant's early entry onto the Premises, if any.
8. TENANT'S REPAIRS.
Tenant shall, at Tenant's sole cost and expense, keep the Premises, including, but not
limited to the Improvements, in good and sanitary condition and repair and free of all trash and
debris at all times during the Term. All damage, injury or breakage to any part or portion of the
Premises or property thereon caused by the willful or negligent act or omission of Tenant or
Tenant's agents, contractors, licensees, directors, officers, partners, trustees, visitors or invitees
(collectively, "Tenant Parties") shall be promptly repaired by Tenant, at Tenant's sole cost and
expense, to the reasonable satisfaction of Landlord. Landlord may make any repairs which are not
made by Tenant within a reasonable amount of time (except in the case of emergency when such
repairs can be made immediately), and charge Tenant for the cost of such repairs. Tenant shall be
solely responsible for the design and function of all of the Improvements. Tenant waives all rights
to make repairs to the Premises, the Improvements and Tenant's Personal Property (sometimes
SoHillsLseParcel I close 7 10/28/98
collectively referred to herein as the "Prope ") at the expense of Landlord, or to deduct the cost of
such repairs from any payment owed to Landlord under the Lease.
9. NO LIENS BY TENANT.
Tenant shall at all times keep the Premises and the Property, free from any liens arising out
of any work performed or allegedly performed, materials furnished or allegedly furnished or
obligations incurred by or for Tenant. At any time Tenant either desires or is required to make any
Improvements, Landlord may, in addition to the provisions of Paragraph 7 of the Lease, require
Tenant, at Tenant's sole cost and expense, to obtain and provide to Landlord a completion or
performance bond in a form and by a surety acceptable to Landlord and in amount not less than one
and one-half (1-1/2) times the estimated cost of such Improvements to insure Landlord against
liability from mechanics' and materialmen's liens and to insure completion of the work and may
also require such additional items or assurances as Landlord in its sole discretion may deem
reasonable or desirable. Tenant agrees to indemnify and hold Landlord harmless from and against
any and all claims for mechanics', materialmen's or other liens in connection with any
Improvements, repairs, or any work performed, materials furnished or obligations incurred by or for
Tenant. Landlord reserves the right to enter the Premises for the purpose of posting such notices of
non -responsibility as may be permitted by law, or desired by Landlord.
10. LANDLORD'S REPAIRS.
10.1 Landlord's Right of Entry to Make Repairs. Landlord and Landlord's Parties (as
defined in Paragraph 12.1 of the Lease) shall have the right to enter the Premises at all reasonable
times upon giving Tenant prior notice (provided no such prior notice need be given in the case of an
emergency) for the purpose of making inspections and any alterations, additions, improvements or
repairs to the Premises or the Property as Landlord may deem necessary or desirable, without
liability to Tenant.
11. ASSIGNMENT AND SUBLETTING.
11.1 Right to Assign, Sublease and Encumber. Landlord and Tenant recognize and
specifically agree that this Paragraph 11 is an economic provision, like Rent, and that the
Landlord's right to recapture, and to share in profits, was granted by Tenant to Landlord in
consideration of certain other economic concessions granted by Landlord to Tenant. Tenant may
voluntarily assign or encumber its interest in this Lease or in the Premises, or sublease all or any
part of the Premises, or allow any other person or entity to occupy or use all or any part of the
Premises, upon first obtaining Landlord's prior consent. Any assignment, encumbrance or sublease
without Landlord's prior consent shall be ..voidable, at Landlord's election, and shall constitute a
default. No consent to an assignment, encumbrance, or sublease shall constitute a further waiver of
the provisions of this Paragraph. Notwithstanding the foregoing, Tenant shall have the right
without Landlord's consent, to assign this Lease or sublet the Premises to any wholly-owned
subsidiary of Tenant provided that (i) any such assignee or sublessee shall deliver to Landlord a
counterpart original of a document satisfactory to Landlord whereby such assignee agrees to
assume and to perform all of the terms and conditions of this Lease; and, (ii) such assignee has also
assumed the obligations of Tenant under the Purchase Agreement.
SoHillsLseParcel I close 8 10/28/98
11.2 Procedure For Assignment and Sublease/Landlord's Recapture Rights. Tenant
shall advise Landlord by notice of (i) Tenant's intent to assign, encumber, or sublease this Lease,
(ii) the name of the proposed assignee or sublessee, and evidence reasonably satisfactory to
Landlord that such proposed assignee or sublessee is comparable in reputation, stature and financial
condition to Tenant, and (iii) the terms of the proposed assignment or subletting. Landlord shall,
within thirty (30) days of receipt of such notice, and any additional information requested by
Landlord concerning the proposed assignee's or sublessee's financial responsibility, elect one of the
following:
(a) Consent to such proposed assignment, encumbrance or sublease;
(b) Refuse such consent, which refusal shall be on reasonable grounds; or
(c) Elect to terminate the Lease in the event of an assignment, or in the case of a
sublease, terminate this Lease as to the portion of the Premises proposed to be sublet for the
proposed term of the sublease.
11.3 Conditions Regarding Consent to Sublease and Assignment. As a condition for
obtaining Landlord's consent to any assignment, encumbrance or sublease, Tenant must require that
the rent payable by such assignee or sublessee is at least at the then current rental rates for the
Premises and, if Landlord so requests, shall require that the assignee or sublessee remit directly to
Landlord on a monthly basis, all Rent due to Tenant by said assignee or sublessee. In the event that
Landlord shall consent to an assignment or sublease under the provisions of this Paragraph 11,
Tenant shall pay Landlord's reasonable processing costs and attorneys' fees incurred in giving such
consent. Notwithstanding any permitted assignment or subletting, Tenant shall at all times remain
directly, primarily and fully responsible and liable for all payments owed by Tenant under the
Lease and for compliance with all obligations under the terms, provisions and covenants of the
Lease. If for any proposed assignment or sublease, Tenant receives Rent or other consideration,
either initially or over the term of the assignment or sublease, in excess of the Rent required by this
Lease, or, in the case of the sublease of a portion of the Premises, in excess of such Rent fairly
allocable to such portion, after appropriate adjustments to assure that all other payments called for
hereunder are taken into account, Tenant shall pay to Landlord as additional Rent, nine -tenths
(9/10) of the excess of each such payments of Rent or other consideration received by Tenant
within five (5) days of its receipt or, in the event the sublessee or assignee makes payment directly
to the Landlord, Landlord shall refund one-tenth (1/10) of the excess to Tenant.
11.4 Affiliated Companies/Restructuring of Business Organization. Occupancy of
all or part of the Premises by parent, subsidiary, or affiliated companies of Tenant shall not be
deemed an assignment or subletting provided that such parent, subsidiary or affiliated companies
were not formed as a subterfuge to avoid the obligation of this Paragraph 11. If Tenant is a
corporation, unincorporated association, trust or general or limited partnership, then the sale,
assignment, transfer or hypothecation of any shares, partnership interest, or other ownership interest
of such entity which from time to time in the aggregate exceeds twenty-five percent (25%) of the
total outstanding share, partnership interests or ownership interests of such entity, or the
dissolution, merger, consolidation, or other reorganization of such entity, or the sale, assignment,
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transfer or hypothecation of more than forty percent (40%) of the value of the assets of such entity,
shall be deemed an assignment subject to the provisions of this Paragraph 12.
11.5 Landlord's Right to Assign. Landlord shall have the right to sell, encumber,
convey, transfer, and/or assign any of its rights and obligations under the Lease.
12. INDEMNIFICATION; INSURANCE.
12.1 Indemnification. Tenant shall at its expense protect, defend, indemnify, and hold
the Premises, Landlord and Landlord's agents, contractors, licensees, employees, directors, officers,
partners, trustees and invitees (collectively "Landlord Parties") free and harmless from and against
any and all claims, damages, liens, liabilities, losses, costs and expenses, including reasonable
attorneys' fees and court costs, arising out of or in connection with Tenant's use of the Premises or
the Property, the conduct of Tenant's business, any activity, work or things done, permitted or
allowed by Tenant in or about the Premises or the Property, Tenant's or Tenant Parties
nonobservance or nonperformance of any statute, law, ordinance, rule or regulation, or any
negligence or willful act or failure to act of Tenant or Tenant Parties.
12.2 Insurance. Tenant shall have the following insurance obligations:
At all times that Tenant or Tenant Parties are on the Premises or other property owned
and/or controlled by Landlord or any of its affiliates, and throughout the Term of this Lease, Tenant
shall carry and maintain in full force and effect, at its sole expense, the following insurance policies
with insurance companies having an A.M. Best & Co. rating of A -X or better and admitted to do
business in the State of California. Such policies shall include a provision requiring a minimum of
thirty (30) days notice to Landlord of any change or cancellation. Tenant shall provide Landlord
with certificate(s) of insurance evidencing the policies listed below prior to the commencement of
this Lease. Landlord and its respective parent, subsidiary and affiliated entities, shall be named as
additional insureds as their interests may appear for the insurance described in Subparagraphs (a)
and (b) hereof. All insurance policies and the coverage evidenced thereof to be carried and
maintained by Tenant hereunder, shall be primary coverage and any of Landlord's respective
parent, subsidiary and affiliated entities insurance coverage shall be deemed excess and
noncontributing with such primary coverage provided by Tenant.
(a) Comprehensive General Liability insurance ("CGL Insurance") in an
amount of $3,000,000 per occurrence applicable specifically to the Premises (including the
Property and the Improvements) without offset or reduction as a result of other projects of or claims
against, Tenant. Such CGL Insurance shall include the following coverages: contractual liability,
premises operations, personal injury, broad form property damage and vandalism and malicious
mischief endorsements, independent contractors;
(b) Comprehensive Automobile Liability insurance on all vehicles used in
connection with this Lease, in an amount of $1,000,000 combined single limits, for bodily injury
and property damage per occurrence; and
(c) Workers' Compensation insurance in accordance with the provisions of the
Workers' Compensation Act of California for all its employees, subcontractors or independent
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contractors engaged in performing the above described services.
(d) Tenant shall, at its own cost and with an insurance company acceptable to
Landlord, maintain any other forms of insurance as the Tenant, the Landlord, the mortgagees, or the
trust deed beneficiaries of Landlord or the ground or underlying lessors of the Premises and
underlying land may reasonably require from time to time in form, in amounts and for insurance
risks against which a prudent tenant would protect itself
12.3 Assumption of Risk. Tenant, as a material part of the consideration to Landlord,
hereby assumes all risk of damage to Tenant's Personal Property or injury to persons, in, upon or
about the Premises from any cause (except for damage or injury caused by the gross negligence of
Landlord) and Tenant hereby waives all such claims against Landlord. Landlord and Landlord
Parties shall not be liable for any damage to any of Tenant's Personal Property entrusted to
Landlord or Landlord Parties, nor for loss or damage to any of Tenant's Personal Property by theft
or otherwise. Tenant shall give prompt notice to Landlord in case of fire or accidents in the
Premises.
12.4 Allocation of Insured Risks/Subrogation. Landlord and Tenant release each other
from any claims and demands of whatever nature for damage, loss or injury to the Premises, or to
the other's property in, on or about the Premises that are cause by or result from risks or perils
insured against under any insurance policies required by the Lease to be carred by Landlord and/or
Tenant and in force at the time of any such damage, loss or injury. Landlord and Tenant shall cause
each insurance policy obtained by them or either of them to provide that the insurance company
waives all right of recovery by way of subrogation against either Landlord or Tenant in connection
with any damage covered by any policy. Neither Landlord nor Tenant shall be liable to the other
for any damage caused by fire or any of the risks insured against under any insurance policy
required by the Lease. If an insurance policy cannot be obtained with a waiver of subrogation, or is
obtainable only by the payment of an additional premium charge above that charged by insurance
companies issuing policies without waiver of subrogation, the party undertaking to obtain the
insurance shall notify the other party of this fact. The other party shall have a period of ten (10)
days after receiving the notice either to place the insurance with a company that is reasonably
satisfactory to the other party and that will carry the insurance with a waiver of subrogation, or to
agree to pay the additional premium if such a policy is obtainable at additional cost. If the
insurance cannot be obtained or the party in whose favor a waiver of subrogation is desired refuses
to pay the additional premium charged, the other party is relieved of the obligation to obtain a
waiver of subrogation with respect to the particular insurance involved.
13. DAMAGE OR DESTRUCTION.
13.1 Loss Covered By Insurance. If, at any time prior to the expiration or termination
of this Lease, the Premises are wholly or partially damaged or destroyed by a risk, the loss to
Landlord from which is fully covered by insurance maintained by Landlord or for Landlord's
benefit, which risk renders the Premises totally or partially inaccessible or unusable by Tenant in
the ordinary conduct of Tenant's business, then:
(a) If all repairs to such Premises can, in Landlord's judgment, be completed
within one (1) year following the date of notice to Landlord of such damage or destruction without
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the payment of overtime or other premiums, and if such damage or destruction is not the result of
the intentional or willful misconduct of Tenant or Tenant Parties, Landlord shall, at Landlord's
expense, repair the same and this Lease shall remain in full force and effect and a proportionate
reduction of Rental shall be allowed Tenant for such portion of the Premises as shall be rendered
inaccessible or unusable to Tenant during the period of time that such portion is unusable or
inaccessible. There shall be no proportionate reduction of Rental by reason of any portion of the
Premises being unusable or inaccessible for a period equal to five (5) business days or less; and
(b) If such damage or destruction is not the result of the intentional, willful
misconduct of Tenant or Tenant Parties, and if all such repairs cannot, in Landlord's judgment, be
completed within one (1) year following the date of notice to Landlord of such damage or
destruction without the payment of overtime or other premiums, Landlord may, at Landlord's sole
and absolute option, upon written notice to Tenant given within sixty (60) days after notice to
Landlord of the occurrence of such damage or destruction, elect to. repair such damage or
destruction at Landlord's expense, and in such event, this Lease shall continue in full force and
effect but the Rental shall be proportionately reduced as hereinabove provided in Paragraph 13.1(a).
If Landlord does not elect to make such repairs, then either party may, by written notice to the
other, terminate this Lease as of the date of the occurrence of such damage or destruction.
13.2 Loss Not Covered By Insurance. If, at any time prior to the expiration or
termination of this Lease, the Premises are totally or partially damaged or destroyed from a risk, the
loss to Landlord from which is not fully covered by insurance maintained by Landlord or for
Landlord's benefit, which damage renders the Premises inaccessible or unusable to Tenant in the
ordinary course of its business, and if such damage or destruction is not the result of the negligence
or willful misconduct or omission of Tenant or Tenant parties, Landlord may, at its option, upon
written notice to Tenant within sixty (60) days after notice to Landlord of the occurrence of such
damage or destruction, elect to repair or restore such damage or destruction, or Landlord may elect
to terminate this Lease. If Landlord elects to repair or restore such damage or destruction, this
Lease shall continue in full force and effect but the Rental shall be proportionately reduced as
provided in Paragraph 13.1(a).
13.3 Loss Caused by Tenant or Tenant Parties. If the Premises are wholly or partially
damaged or destroyed as a result of the intentional or willful misconduct of Tenant or Tenant
Parties, Tenant shall forthwith diligently undertake to repair or restore all such damage or
destruction, at Tenant's sole cost and expense, and this Lease shall continue in full force and effect
without any abatement or reduction in Rental or other payments owed by Tenant; provided,
however, that Tenant shall be relieved of its obligation pursuant to this Paragraph 13.3 to the extent
that insurance proceeds are collected by Landlord in accordance with Paragraph 12.4 above.
13.4 Destruction During Final Year. Notwithstanding anything to the contrary
contained in Paragraphs 13.1, 13.2 or 13.3, if the Premises are wholly or partially damaged or
destroyed within the final three (3) months of the Term of this Lease, Landlord may, at its option,
by giving Tenant notice within thirty (30) days after notice to Landlord of the occurrence of such
damage or destruction, elect to terminate the Lease.
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13.5 Destruction of Tenant's Personal Property. the Improvement or Property of
Tenant Parties. In the event of any damage to or destruction of the Premises, under no
circumstances shall Landlord be required to repair any injury, or damage to, or make any repairs to
or replacements of, Tenant's Personal Property or the Improvements or any other improvements
installed in the Premises by Tenant and Tenant shall repair and restore all such Personal Property
and the Improvements at Tenant's sole cost and expense. Landlord shall have no responsibility for
any contents placed or kept in or on the Premises by Tenant or Tenant Parties.
13.6 Exclusive Remedy. This Paragraph 13 shall be Tenant's sole and exclusive remedy
in the event of damage or destruction to the Premises, and Tenant, as a material inducement to
Landlord entering into this Lease, irrevocably waives and releases Tenant's rights under California
Civil Code Sections 1932(2) and 1933(4). No damages, compensation or claim shall be payable by
Landlord for any inconvenience, any interruption or cessation of Tenant's business, or any
annoyance, arising from any damage to or destruction of all or any portion of the Premises, unless
such damage or destruction results from, and only to the extent arising from Landlord's gross
negligence or willful misconduct
13.7 Release Upon Termination. Upon termination of the Lease pursuant to this
Paragraph 13, Tenant and Landlord hereby agree to release each other from any and all obligations
and liabilities with respect to the Lease except such obligations and liabilities which arise or accrue
prior to such termination.
14. EMINENT DOMAIN.
14.1 Permanent Taking - When Lease Can Be Terminated. If the whole of the
Premises, or so much of the Premises as to render the balance unusable by Tenant, shall be taken
under the power of eminent domain, the Lease shall automatically terminate as of the date of final
judgment in such condemnation, or as of the date possession is taken by the condemning authority,
whichever is earlier. A sale by Landlord under threat of condemnation shall constitute a "taking"
for the purpose of this Paragraph 14. No award for any partial or entire taking shall be apportioned
and Tenant assigns to Landlord any award which may be made in such taking or condemnation,
together with all rights of Tenant to such award, including, without limitation, any award or
compensation for the value of all or any part of the leasehold estate; provided that nothing
contained in this Paragraph 14 shall be deemed to give Landlord any interest in or to require Tenant
to assign to Landlord any award made to Tenant for (a) the taking of Tenant's Personal Property, or
(b) interruption of or damage to Tenant's business, or (c) Tenant's unamortized cost of the
Improvements to the extent paid for by Tenant.
14.2 Permanent Taking - When Lease Cannot Be Terminated. In the event of a
partial taking which does not result in a termination of the Lease, Rental shall be proportionately
reduced based on the portion of the Premises rendered unusable, and Landlord shall restore the
Premises to the extent of available condemnation proceeds.
14.3 Temporary Taking. No temporary taking of the Premises or any part of the
Premises and/or of Tenant's rights to the Premises or under this Lease shall terminate this Lease or
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give Tenant any right to any abatement of any payments owed to Landlord pursuant to this Lease;
any award made to Tenant by reason of such temporary taking shall belong entirely to Tenant.
14.4 Exclusive Remedy. This Paragraph 14 shall be Tenant's sole and exclusive remedy
in the event of a taking or condemnation. Tenant hereby waives the benefit of California Code of
Civil Procedure Section 1265.130.
14.5 Release Upon Termination. Upon termination of the Lease pursuant to this
Paragraph 14, Tenant and Landlord hereby agree to release each other from any and all obligations
and liabilities with respect to the Lease except such obligations and liabilities which arise or accrue
prior to such termination.
15. DEFAULTS.
15.1 Default by Tenant. Each of the following shall be an "Event of Default" by Tenant
and a material breach of the Lease:
(a) Tenant shall fail to make any payment owed by Tenant under the Lease, as
and when due, and where such failure is not cured within five (5) days following receipt of written
notice by Tenant from Landlord.
(b) Tenant shall fail to observe, keep or perform any of the terms, covenants,
agreements or conditions under the Lease that Tenant is obligated to observe or perform, other than
that described in subparagraph (a) above, for a period for thirty (30) days after written notice to
Tenant of said failure; provided however, that if the nature of Tenant's default is such that more
than thirty (30) days are reasonably required for its cure, then Tenant shall not be deemed to be in
default under the Lease if Tenant shall commence the cure of such default so specified within said
thirty (30) day period and diligently prosecutes the same to completion. Such thirty (30) day notice
shall be in lieu of and not in addition to any notice required under Section 1161 of the California
Code of Civil Procedure.
(c) Tenant is in default under any of the terms, covenants, agreements and
conditions under the Purchase Agreement and/or the Development Declaration (as defined in the
Purchase Agreement) and Tenant has not cured such default as provided for in the Purchase
Agreement and/or the Development Declaration.
15.2 Default by Landlord. Landlord shall not be in default in the performance of any
obligation required to be performed under this Lease unless Landlord has failed to perform such
obligation within thirty (30) days (unless a lesser time period for performance is specifically set
forth herein) after the receipt of notice from Tenant specifying in detail Landlord's failure to
perform; provided, however, that if the nature of Landlord's obligation is such that more than thirty
(30) days are required for its performance, the Landlord shall not be deemed in default if it shall
commence such performance within thirty (30) days and thereafter diligently pursues the same to
completion. Tenant shall have no rights as a result of any default by Landlord until Tenant gives
thirty (30) days' notice to any person who has a recorded interest pertaining to the Premises,
specifying the nature of the default. Such person shall then have the right to cure such default, and
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Landlord shall not be deemed in default if such person cures such default within thirty (30) days
after receipt of notice of the default, or within such longer period of time as may reasonably be
necessary to cure the default. If Landlord or such person does not cure the default, Tenant may
exercise such rights or remedies or shall be provided or permitted by law to recover any damages
proximately caused by such default. Notwithstanding anything to the contrary in the Lease,
Tenant's remedy for any breach of the Lease by Landlord shall be limited to an action for damages,
and Landlord's liability to Tenant for damages resulting from Landlord's breach of any provision or
provisions of the Lease shall not exceed the value of Landlord's equity interest in the Premises.
16. LANDLORD'S REMEDIES AND RIGHTS.
16.1 Termination of Lease. In the event of any Event of Default by Tenant, the
Landlord shall have the right, in addition to all other rights available to Landlord under this Lease
or now or later permitted by law or equity, to terminate this Lease by providing Tenant with a
notice of termination. Upon termination, Landlord may recover any damages proximately caused
by Tenant's failure to perform under the Lease, or which are likely in the ordinary course of
business to be incurred, including any amount expended or to be expended by Landlord in and
effort to mitigate damages, as well as any other damages to which Landlord is entitled to recover
under any statute now or later in effect. Landlord's damages include the worth, at the time of any
award, of the amount by which the unpaid Rent for the balance of the term after the time of the
award exceeds the amount of the rental loss that the Tenant proves could be reasonably avoided.
The worth at the time of award shall be determined by discounting such amount at one percent
(1%) more than the discount rate of the Federal Reserve Bank in San Francisco in effect at the time
of the award. Other damages to which Landlord is entitled shall earn interest at the Interest Rate.
16.2 Right of Entry. In the event of any Event of Default by Tenant, Landlord shall also
have the right, with or without terminating this Lease, to enter the Premises and remove all persons
and personal property from the Premises, such property being removed and stored in a public
warehouse or elsewhere at Tenant's sole cost and expense. No removal by Landlord of any persons
or property in the Premises shall constitute an election to terminate this Lease. Such an election to
terminate may only be made by Landlord in writing, or decreed by a court of competent
jurisdiction. Landlord's right of entry shall include the right to remodel the Premises and re -let the
Premises. All costs incurred in such entry and re -letting shall be paid by Tenant. Rents collected
by Landlord from any other tenant which occupies the Premises shall be offset against the amounts
owed to Landlord by Tenant. Tenant shall be responsible for any amounts not recovered by
Landlord from any other tenant. Any payments made by Tenant shall be credited to the amounts
owed by Tenant in the sole order and discretion of Landlord, irrespective of any designation or
request by Tenant. No entry by Landlord shall prevent Landlord from later terminating the Lease
by written notice.
16.3 Waiver of Redemption. Tenant hereby waives, for itself and all persons claiming
by and under Tenant, all rights and privileges which it might have under any present or future law
to redeem the Premises or to continue the Lease after being dispossessed or ejected from the
Premises.
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16.4 Right to Perform. If Tenant fails to perform any covenant or condition to be
performed by Tenant, Landlord may perform such covenant or condition at its option, after notice
to Tenant. All costs incurred by Landlord in so performing shall immediately be reimbursed to
Landlord by Tenant, together with interest at the Interest Rate (as defined in Paragraph 3.5 of the
Lease) computed from the due date. Any performance by Landlord of Tenant's obligations shall
not waive or cure such default. Landlord may perform Tenant's defaulted obligations at Tenant's
sole cost and expense without notice in the case of any emergency. All costs and expenses incurred
by Landlord, including reasonable attorneys' fees (whether or not legal proceedings are instituted),
in collecting Rent or enforcing the obligations of Tenant under the Lease shall be paid by Tenant to
Landlord upon demand.
16.5 Remedies Not Exclusive. The rights and remedies of Landlord set forth herein are
not exclusive, and Landlord may exercise any other right or remedy available to it under this Lease,
at law or in equity.
17. ATTORNEY'S FEES.
If either Landlord or Tenant commences or engages in, or threatens to commence or engage
in, any action or litigation or arbitration against the other party arising out of or in connection with
the Lease, the Premises or the Personal Property, including but not limited to, any action for
recovery of any payment owed by either party under the Lease, or to recover possession of the
Premises, or for damages for breach of the Lease, the prevailing party shall be entitled to have and
recover from the losing party reasonable attorneys' fees and other costs incurred in connection with
the action and in preparation for said action. If Landlord becomes involved in any litigation or
dispute, threatened or actual, by or against anyone not a party to the Lease, but arising by reason of
or related to any act or omission of Tenant or Tenant Parties, Tenant agrees to pay Landlord's
reasonable attorneys' fees and other costs incurred in connection with the litigation or dispute
regardless of whether a lawsuit is actually filed.
18. SUBORDINATION.
18.1 Obligations of Tenant. The Lease and the rights granted to Tenant by the Lease
are and shall be subject and subordinate at all times to (a) all ground or underlying leases affecting
all or any part of the Premises now or later existing and all amendments, renewals, modifications,
supplements and extensions of the leases, and (b) all deeds of trust or mortgages now or later
affecting or encumbering all or any part of the Premises and/or any ground or underlying leasehold
estate; provided however, that if Landlord elects at any time to have Tenant's interest in the Lease
be or become superior, senior or prior to any such instrument, then upon receipt by Tenant of
written notice of such election, Tenant shall immediately execute all necessary subordination
instruments or other documents confirming the subordination of such mortgage, deed of trust,
ground or underlying lease to the Lease.
18.2 Landlord's Right to Assign. Landlord's interest in the Lease may be assigned to
any mortgagee or trust deed beneficiary as additional security. Nothing in this Lease shall
empower Tenant to do any act without Landlord's prior consent which can, shall or may encumber
the title of the owner of all or any part of the Premises.
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18.3 Attornment by Tenant. In the event of the cancellation or termination of any or all
ground or underlying leases affecting all or any part of the Premises in accordance with its terms or
by the surrender thereof, whether voluntary, involuntary or by operation of law, or by summary
proceedings, or in the event of any foreclosure of any or all mortgages or deeds of trust
encumbering the Premises by trustee's sale, voluntary agreement, deed in lieu of foreclosure, or by
the commencement of any judicial action seeking foreclosure, Tenant, at the request of the then
Landlord under the Lease, shall (subject to Tenant receiving a right of nondisturbance agreement
from such Landlord) attor to and recognize (a) the ground or underlying Lessor, under the ground
or underlying Lease being terminated or cancelled, or (b) the beneficiary or purchaser at the
foreclosure sale, as Tenant's Landlord under the Lease, and Tenant agrees to execute and deliver at
any time upon request of such ground or underlying lessor, beneficiary, purchaser, or their
successors, any instrument to further evidence such attomment. Tenant hereby waives its right, if
any, to elect to terminate the Lease or to surrender possession of the Premises in the event of any
such ground or underlying lease cancellation or termination or mortgage or deed of trust
foreclosure.
18.4 Attorney -In -Fact. If Tenant fails to promptly execute and deliver any documents
or instruments required by this Paragraph 18, such failure shall, at Landlord's option, constitute a
default under the Lease, and Tenant hereby irrevocably constitutes and appoints Landlord as
Tenant's special attorney-in-fact to execute and deliver any such documents or instruments.
19. HOLDING OVER
19.1 Surrender of Possession. Tenant shall surrender possession of the Premises
immediately upon the expiration of the Term or termination of the Lease. If Tenant shall continue
to occupy or possess the Premises after such expiration or termination without the consent of the
Landlord, then unless Landlord and Tenant have otherwise agreed in writing, Tenant shall be a
tenant from month-to-month. All the terns, provisions and conditions of the Lease shall apply to
this month-to-month tenancy except those terms, provisions and conditions pertaining to the Term,
and except that the Rental shall be immediately adjusted upward upon the expiration or termination
of the Lease to equal the greater of (a) one hundred fifty percent (150%) of the then prevailing
monthly rental rate for similar commercial space, as determined by Landlord, or (b) one hundred
fifty percent (150%) of the Rental for the Premises on the date of the expiration or termination of
the Lease. This month-to-month tenancy may be terminated by Landlord or Tenant upon fifteen
(15) days' prior notice to the nonterminating party. In the event that Tenant fails to surrender the
Premises upon such termination or expiration, then Tenant shall indemnify and hold Landlord
harmless against all loss or liability resulting from or arising out of Tenant's failure to surrender the
Premises, including, but not limited to, any amounts required to be paid to any tenant or prospective
tenant who was to have occupied the Premises after said termination or expiration and any related
attorneys' fees and brokerage commissions.
19.2 Payment of Money After Termination. No payment of money by Tenant to
Landlord after the termination of the Lease by Landlord, or after the giving of any notice of
termination to Tenant by Landlord which Landlord is entitled to give Tenant under the Lease, shall
reinstate, continue or extend the Term of the Lease or shall affect any such notice given to Tenant
SoHillsLseParcel l close 17 10/28/98
• . •
prior to the payment of such money, it being agreed that after the service of such notice or the
commencement of any suit by Landlord to obtain possession of the Premises, Landlord may receive
and collect when due any and all payments owed by Tenant under the Lease, and otherwise
exercise its rights and remedies. The making of any such payments by Tenant shall not waive such
notice, or in any manner affect any pending suit or judgment obtained.
20. INSPECTIONS AND ACCESS.
Upon reasonable notice to Tenant (except in cases of emergency in which case no notice is
required), Landlord may enter the Premises at all reasonable hours by means of a master key or
otherwise for any reasonable purpose. If Tenant shall not be personally present to open and permit
an entry into the Premises at any time when such entry by Landlord is necessary or permitted under
the Lease, Landlord may enter by means of a master key without liability to Tenant except for any
failure to exercise due care for Tenant's Personal Property, and without affecting the Lease.
21. NAME OF PROJECT.
Tenant shall not use any name, insignia, or logotype currently used by Landlord, including,
but not limited to the name "PGA West", for any purpose without the prior written consent of
Landlord. Tenant shall not use any picture of the Premises in its advertising, stationery or any other
manner without the prior written consent of Landlord. Landlord expressly reserves the right, in
Landlord's sole and absolute discretion, at any time to change the name, insignia, logotype, or street
address of the Premises without in any manner being liable to Tenant.
22. SURRENDER OF LEASE.
The voluntary or other surrender of the Lease by Tenant, or a mutual cancellation of the
Lease, shall not work a merger, and shall, at the option of Landlord, terminate all or any existing
subleases or subtenancies, or may, at the option of Landlord, operate as an assignment to it of
Tenant's interest in any or all such subleases or subtenancies.
23. WAIVER
The waiver by Landlord or Tenant of any term, covenant, agreement or condition contained
in this Lease shall not be deemed to be a waiver of any subsequent breach of the same or of any
other term, covenant, agreement, condition or provision of this Lease, nor shall any custom or
practice which may develop between the parties in the administration of the Lease be construed to
waive or lessen the right of Landlord or Tenant to insist upon the performance by the other in strict
accordance with all of the terms, covenants, agreements, conditions, and provisions of the Lease.
The subsequent acceptance by Landlord of any payment owed by Tenant to Landlord under the
Lease, or the payment of Rent by Tenant, shall not be deemed to be a waiver of any preceding
breach by Tenant of any term, covenant, agreement, condition or provision of the Lease, other than
the failure of Tenant to make the specific payment so accepted by Landlord, regardless of
Landlord's or Tenant's knowledge of such preceding breach at the time of the making or acceptance
of such payment.
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24. SALES BY LANDLORD.
In the event Landlord shall sell, assign, convey or transfer all or a part of its interest in the
Premises or any part of the Premises, Tenant agrees to attom to such transferee, assignee or new
owner, and upon consummation of such sale, conveyance or transfer, Landlord shall automatically
be freed and relieved from all liability and obligations accruing or to be performed from and after
the date of such sale, transfer, or conveyance. In the event of such sale, assignment, transfer or
conveyance, Landlord shall transfer to such transferee, assignee or new owner of the Premises the
balance of the Deposit, if any, remaining after lawful deductions and in accordance with California
Civil Code Section 1950.7, after notice to Tenant, and Landlord shall thereupon be relieved of all
liability with respect to the Deposit.
25. NO LIGHT AND AIR EASEMENT.
Any diminution or shutting off of light or air by any structure which may be erected on
lands adjacent to or in the vicinity of the Premises shall not affect the Lease, abate any payment
owed by Tenant under the Lease or otherwise impose any liability on Landlord.
26. FORCE MAJEURE.
Neither party shall be chargeable with, liable for, or responsible to the other party for
anything or in any amount for any failure to perform or delay caused by: fire; earthquake;
explosion; flood; hurricane; the elements; acts of God or the public enemy; actions, restrictions,
limitations or interference of governmental authorities or agents; war; invasion; insurrection;
rebellion; riots; strikes or lockouts; inability to obtain necessary materials, goods, equipment,
services, utilities or labor; or any other cause whether similar or dissimilar to the foregoing which is
beyond the reasonable control of such party; and any such failure or delay due to said causes or any
of them shall not be deemed a breach of or default in the performance of the Lease by either party.
27. ESTOPPEL CERTIFICATES.
Tenant shall, at any time and from time to time upon request of Landlord, within ten (10)
days following notice of such request from Landlord, execute, acknowledge and deliver to
Landlord in recordable form, a certificate ("Estoppel Certificate") in such other form as Landlord or
any of its lenders, prospective purchasers, lienholders or assignees may deem appropriate. Failure
by Tenant to deliver the Estoppel Certificate within this ten (10) day period shall be deemed to
conclusively establish that this Lease is in full force and effect and has not been modified except as
may be represented by Landlord. Tenant's failure to deliver the Estoppel Certificate within this ten
(10) day period shall, at the option of Landlord, constitute a default.
28. RIGHT TO PERFORMANCE.
All covenants and agreements to be performed by Tenant under the Lease shall be
performed by Tenant at Tenant's sole cost and expense. If Tenant shall fail to perform any act on
its part to be performed under the Lease, and such failure shall continue for three (3) days, unless a
lesser or greater time period is specifically designated in this Lease for performance of a particular
SoHillsLseParcel I close 19 10/28/98
obligation of Tenant, after notice thereof to Tenant (provided that no notice shall be required in
cases of emergency), Landlord may, but shall not be obligated to do so, without waiving or
releasing Tenant from any obligations of Tenant, perform any such act on Tenant's part to be made
or performed as provided in the Lease. All costs incurred by Landlord with respect to any such
performance by Landlord (including reasonable attorneys' fees) shall be immediately paid by
Tenant to Landlord.
29. SECURITY SERVICES.
29.1 Landlord's Obligation to Furnish Security Services. Landlord may furnish
security services for the Premises as it deems appropriate in its sole and absolute discretion. In the
event Landlord does furnish or contract to furnish any such services, Tenant shall nevertheless have
sole responsibility for the protection of itself, Tenant Parties and all property of Tenant and Tenant
Parties located in, on or about the Premises, the Sales Center (defined in Paragraph 33 below) and
the provisions of Paragraph 12.3 shall nevertheless continue in full force and effect.
29.2 Tenant's Rights to Install Security System. If Tenant wishes to establish or
install any automated and/or non -automated security system in, on or about the Premises, Tenant
shall first notify Landlord of Tenant's plan for any such system, and Landlord shall have the right to
review and approve or disapprove said plan in Landlord's discretion. If Landlord approves any
such plan and Tenant establishes or installs any automated and/or non -automated security system
in, on or about the Premises and should such system adversely affect the Premises or the Property
or the desirability of the Premises or the Property for sales activity, Landlord shall subsequently
have the right to review Tenant's security system from time to time and request Tenant to make
such changes in personnel and/or equipment. Tenant shall make said requested changes
immediately thereafter.
30. NOTICES.
All notices, requests, consents, approvals, payments in connection with the Lease, or
communications that either party desires or is required or permitted to give or make to the other
party under the Lease shall only be deemed to have been given, made and delivered, when made or
given in writing and personally served, or deposited in the United States mail, certified or registered
mail, postage prepaid, and addressed to the parties as follows:
To Tenant: Southern Hills, LLC
1430 E. Chapman Avenue
Suite 100
Orange, CA 92866
Attention: Roger Hobbs
Telephone: (714) 633-7260
Facsimile: (714) 633-7132
With a copy to:
SoHil lsLseParcel 1 close 20 10/28/98
or at Landlord's option, to Tenant at the Premises at any time after the Commencement Date:
To Landlord: KSL Land III Corporation
56-140 PGA Boulevard
La Quinta, California 92253
Attn: Mr. Chevis Hosea
With a copy to: Legal Department
or to such other address or addresses as either Landlord or Tenant may from time to time designate
to the other by written notice in accordance herewith.
31. MISCELLANEOUS.
31.1 Authorization to Sign Lease. If Tenant is a corporation, each individual executing
the Lease on behalf of Tenant represents and warrants that he/she is duly authorized to execute and
deliver the Lease on behalf of Tenant in accordance with a duly adopted resolution of Tenant's
Board of Directors, and that the Lease is binding upon Tenant in accordance with its terms, and
Tenant shall, concurrently with its execution of the Lease, deliver to Landlord upon its request a
certified copy of a resolution of its Board of Directors authorizing the execution of the Lease. If
Tenant is a partnership or trust, each individual executing the Lease on behalf of Tenant represents
and warrants that he/she is duly authorized to execute and deliver the Lease on behalf of Tenant in
accordance with the terms of such entity's partnership agreement or trust agreement, respectively,
and that the Lease is binding upon Tenant in accordance with its terms, and Tenant shall,
concurrently with its execution of the Lease, deliver to Landlord upon its request such certificates
or written assurances from the partnership or trust as Landlord may request authorizing the
execution of the Lease.
31.2 Entire Agreement. The Lease contains the entire agreement between the parties
respecting the Premises and all other matters covered or mentioned in the Lease. The Lease may
not be altered, changed or amended except by an instrument in writing signed by both parties
hereto.
31.3 Severability. The illegality, invalidity or unenforceability of any term, condition,
or provision of the Lease shall in no way impair or invalidate any other term, provision or condition
of the Lease, and all such other terms, provisions and conditions shall remain in full force and
effect.
31.4 Covenants and Conditions. All provisions, whether covenants or conditions, on
the part of Tenant shall be deemed to be both covenants and conditions.
31.5 Brokers. Landlord and Tenant hereby each warrant and represent that it has not
employed or dealt with any other broker or finder in connection with the Lease or the Premises.
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31.6 Gender and Headings. The words "Landlord" and "Tenant" as used herein shall
include the plural as well as the singular and, when appropriate, shall refer to action taken by or on
behalf of the Landlord or Tenant by their respective employees, agents, or authorized
representatives. Words in masculine gender include the feminine and neuter. If there be more than
one Tenant, the obligations hereunder imposed upon Tenant shall be joint and several. The
paragraph headings of the Lease are not a part of the Lease and shall have no effect upon the
construction or interpretation of any part hereof. Subject to the provisions of Paragraphs 12 and 27,
and except as otherwise provided to the contrary in this Lease, the terms, conditions and
agreements of this Lease shall apply to and bind the heirs, successors, legal representatives and
permitted assigns of the parties hereto. The Lease shall be governed by and construed pursuant to
the laws of the State of California.
31.7 Exhibit. Exhibit "A" attached to the Lease, is hereby incorporated by this reference
and made a part of the Lease. In the event of variation or discrepancy, the duplicate original hereof
(including Exhibit "A") held by Landlord shall control.
31.8 Modification for Lender. Upon Landlord's request, Tenant agrees to modify this
Lease to meet the requirements of any or all lenders or ground lessors selected by Landlord who
request such modification as a condition precedent to providing any loan or financing or to entering
into any ground lease affecting or encumbering the Premises or any part thereof, provided that such
modification does not (a) increase Rental, or (b) alter the Term, or (c) materially adversely affect
Tenant's rights under this Lease.
31.9 Quiet Enjoyment. Landlord covenants and agrees that Tenant, upon making all of
Tenant's payments as and when due under the Lease, and upon performing, observing and keeping
the covenants, agreements and conditions of this Lease on its part to be kept, shall peaceably and
quietly hold, occupy and enjoy the Premises during the term of this Lease without hindrance or
molestation from Landlord subject to the terms and provisions of this Lease.
31.10 No Recordation. Landlord and Tenant agree that in no event and under no
circumstances shall the Lease be recorded by Tenant.
31.11 Time is of the Essence. Subject to the provisions of Paragraph 23 of the Lease,
time shall be of the essence of the Lease and of each of the provisions hereof.
31.12 Cumulative Remedies. No remedy or election provided, allowed or given by any
provision of the Lease shall be deemed exclusive unless so indicated, but shall, whenever possible,
be cumulative with all other remedies in law or equity.
31.13 Bankruptcy. Notwithstanding anything in this Lease to the contrary, if Tenant
enters into a bankruptcy proceeding in a United States Bankruptcy Court, then within three (3)
business days following receipt of notice from Landlord, the deposit described in Paragraph 5 of
this Lease shall be increased to Nine Hundred Dollars ($900.00), and Tenant shall pay to
Landlord as an additional security deposit an amount of Six Hundred Dollars ($600.00).
SoHillsLseParcel l close 22 10/28/98
31.14 Confidentiality. This Lease document and the terms of this Lease, and the
covenants, obligations, and conditions contained in this Lease shall remain strictly confidential.
Tenant agrees to keep such terms, covenants, obligations and conditions strictly confidential and
not to disclose such matters to any other landlord, tenant, prospective tenant, or broker. Provided,
however, Tenant may provide a copy of this Lease to a non-party solely in conjunction with
Tenant's reasonable and good faith effort to secure an assignee or sublessee for the Premises.
32. CONSENT.
Unless the Lease provides for a contrary standard, whenever in this Lease the consent or
approval of the Landlord or Tenant is required, such consent or approval shall not be unreasonably
withheld or delayed.
IN WITNESS WHEREOF, the parties have executed the Lease as of the date first set forth
above, acknowledged that each Party has carefully read each and every provision of the Lease, that
each party has freely entered into the Lease of its own free will and volition, and that the terms,
conditions and provisions of the Lease are commercially reasonable as of the day and year first
above written.
"TENANT"
SOUTHERN HILLS, LLC
a
irA11
", .. Ll -
Its: U
Date Executed:
Place Executed:
"LANDLORD"
liability company
KSL LAND III CORPORATION,
a Delaware corporation
B C.
Printed e:
Its:
Date Executed: /0 -
Place Executed: L.&I
f
SoHillsLseParcel l close 23 10/28/98
EXHIBIT "A"
NOTICE OF LEASE TERM DATES
Date:
To:
Re: Lease dated , 1998 between KSL Land III Corporation, a Delaware
corporation, Landlord, and SOUTHERN HILLS, LLC, a California limited liability company
Tenant, concerning that certain real property known as Parcel 1 of Parcel Map 28805 as per Parcel
Map filed in Book XXX, pages XX through XX, inclusive of Parcel Maps, Official Records of said
County
Gentlemen:
In accordance with the subject Lease, we wish to advise and/or confirm as follows:
That the Premises have been accepted herewith by the Tenant in accordance with
the subject Lease subject to latent defects, asbestos and other hazardous materials.
2. That the Tenant has possession of the subject Premises and acknowledges that under
the provisions of the subject Lease, the term of said Lease commenced as of
for a term of
ending on
That in accordance with the subject Lease, rental commenced to accrue on
months,
4. If the commencement date of the subject Lease is other than the first day of the
month, the first billing will contain a pro rata adjustment. Each billing thereafter
shall be for the full amount of the monthly installment as provided for in said Lease.
SoHillsLseParcel 1 close 24 10/28/98
5. Rent is due and payable in advance on the first day of each and every month during
the term of said Lease. Your rent checks should be made payable to
at
"LANDLORD"
KSL LAND III CORPORATION,
a Delaware corporation
By:
Printed Name:
Its:
Date Executed:
Place Executed:
AGREED AND ACCEPTED:
"TENANT"
SOUTHERN HILLS, LLC,
a California limited liability company
By:
Printed Name:
Its:
Date Executed:
Place Executed:
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