LEASE AMENDMENT NO. 1
Exhibit
10.5.1
LEASE AMENDMENT NO. 1
This LEASE AMENDMENT
NO. 1 (this “Amendment”) is made as of August, 2004, by and between CROWN BREA ASSOCIATES, LLC, a Delaware limited liability company
(“Landlord”) and FREMONT INVESTMENT & LOAN, a California industrial bank (“Tenant”).
RECITALS
A. Landlord and Tenant have entered into that certain lease dated as of April 23,
2004 (the “Original Lease”) with respect to the lease of certain premises (the
“Premises”) located
at 0000 Xxxx Xxxxxxxx Xxxxxxx, Xxxx, Xxxxxxxxxx, and more particularly described in the
Original Lease. The Original Lease, as amended by this Amendment, is hereinafter referred to as the
“Lease”.
B. The Original Lease provided that Landlord would construct the Improvements to
be constructed within the Premises, but Tenant has requested, and Landlord has agreed, that
Tenant will construct the Improvements.
C. All defined terms used herein but not defined herein shall have the meaning
ascribed to such terms in the Original Lease.
D. Landlord and Tenant now desire to enter into this Amendment to amend the
Original Lease as hereinafter provided.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows, notwithstanding anything in the Original
Lease to the contrary:
1. Tenant Work Letter. Exhibit D of the Lease is hereby amended as follows:
1.1 Section 2.2 of the Work Letter (entitled “Disbursement of the Improvement Allowance”) is hereby amended by inserting “to reimburse Tenant”
immediately following ‘“pursuant to Landlord’s disbursement process)” in the third line of said Section
2.2.
1.2 Section 3.1 of the Work Letter (entitled “Selection of
Architect/Construction Drawings”) is hereby amended by deleting the first two (2)
sentences thereof and inserting in lieu thereof:
“Tenant has retained Environetics Group (the “Architect”) to
prepare the “Construction Drawings,” as that term is defined in this
Section 3.1. Tenant has also retained Innovative Engineering
Consultants as engineering consultants (the “Engineers”) to prepare
all plans and engineering working drawings relating to the
structural, mechanical, electrical, plumbing, HVAC and lifesafety
work of the Tenant Improvements.”
1.3 Section 4.1 of the Work Letter (entitled “Contractor”) is hereby deleted in
its entirety and inserting the following in lieu thereof:
“4.1 Contractor. Tenant has retained Turelk, Inc. as
the contractor, which shall construct the Improvements. Turelk, Inc.
is referred to herein as the “Contractor”.”
1.4 Section 4.3 of the Work Letter (entitled “Construction of Improvements by Contractor
under the Coordination of Landlord”) is hereby amended by deleting such provision in its
entirety and inserting in lieu thereof:
“4.3 Construction of Improvements by Contractor under the
Coordination of Tenant.
4.3.1 Tenant Obligations. Tenant shall pay or
cause to be paid the total cost and expense of all work or
improvements, as that phrase is defined in the mechanic’s lien law
in effect at the place of construction when the work begins. No
such payment shall be construed as rent. Tenant shall not permit to
be enforced against the Premises or any part of it any mechanic’s,
materialman’s, contractor’s or subcontractor’s lien arising out of
any work or improvements, however it may arise. Landlord
reserves a right to post and record notice of non-responsibility in
conformity with California law. However, Tenant may in good
faith and at Tenant’s own expense, contest the validity of any such
asserted lien, claim or demand, provided Tenant has furnished the
bond required by any statute enacted for providing a bond freeing
the leased premises from the effect of such a lien claim. Tenant
shall defend and indemnify Landlord against all liability and loss
of any type arising out of work performed on the Premises by
Tenant, together with actual reasonable attorneys” fees and all
reasonable costs and expenses incurred by Landlord in negotiating,
settling, defending or otherwise protecting against such claims. If
Tenant does not cause to be recorded the bond necessary to free the
Premises from the effect of such a lien claim and a final judgment
has been rendered against Tenant by a court of competent
jurisdiction for the foreclosure of such a claim, and if Tenant
fails
to stay the execution of the judgment by lawful means or pay the
judgment, Landlord shall have the right, but not the duty, to pay or
otherwise discharge, stay or prevent the execution of any such
judgment or lien or both. Tenant shall reimburse Landlord for all
sums paid by Landlord under this Paragraph together with all
Landlord’s actual, reasonable attorneys’ fees and costs plus
interest
on those sums, fees and costs at the rate of ten percent (10%) per
annum from the date of payment until the date of reimbursement.
4.3.2 Reimbursement of Landlord’s Pro Rata Share of Progress Payments. Prior to Tenant’s execution of
the construction contract and general conditions with the Contractor
(the “Contract”) and the commencement of the construction of the
Tenant Improvements, Landlord shall provide Tenant with a
detailed breakdown, by trade, of the final costs to be incurred or
which have been incurred in connection with the design and
construction of the Tenant Improvements to be performed by or at
the direction of Tenant or the Contractor (the “Final Costs”).
Tenant shall be fully responsible for the amount (the “Over-Allowance Amount”), if any, by which the Final Costs exceed the
Improvement Allowance. Tenant shall pay all progress payments
payable by Tenant to the Contractor when and as due pursuant to
the terms of the Contract. Landlord shall disburse
the Improvement Allowance on a monthly progress basis throughout
the course of Tenant’s construction of the Improvements in
accordance with the following:
(a) The parties agree that, based on the estimated Final Costs,
Landlord’s “Pro Rata Share” shall be the percentage which the
Improvement Allowance bears to the total
2
costs of constructing the Improvements for purposes of determining the
percentage of each application for payment submitted by Tenant as set forth in
(b) below which Landlord shall pay. By way of illustration, if the Final Costs
were $4,000,000.00, based on an Improvement Allowance of $2,250,250.00,
Landlord’s Pro Rata Share would be 56.3%.
(b) Not more often than monthly
throughout the course of construction of the Improvements, Tenant
shall (i) with respect to the repayment of design, architectural,
engineering and agency fees, supply written invoices from the
applicable party to Landlord, and (ii) with respect to construction
fees, deliver to Landlord an Application and Certificate for
Payment (AIA Document G702) (herein, “Application for
Payment”) executed by the Contractor and the Architect, showing
the percentage of work completed and value thereof since the prior
disbursement and stating that the portion of the Tenant
Improvements for which the disbursement is requested has been
timely completed and deliver to Landlord prior to each monthly
draw request, all partial (or, if applicable, unconditional) lien
releases from the Contractor for construction work conducted by
the Contractor along with proof of payment by Tenant of the
Contractor’s prior payment applications. The Application for
Payment shall constitute a representation by Tenant that the
Improvements and/or Tenant’s Work identified therein have been
completed in a good and workmanlike manner and in substantial
accordance with the Final Plans. Each Application for Payment
shall automatically reflect a ten percent (10%) retention (other than
on the fees and costs of the Tenant’s architects and engineers).
(c) Within thirty (30) days of receipt of
a fully complete Application for Payment (including specifically
lien waivers), Landlord shall reimburse Tenant for Landlord’s Pro
Rata Share of the amounts appropriately due to the Contractor
under each Application for Payment (less any previous certificates
for payment);
(d) The final disbursement of the
remaining balance of the Improvement Allowance shall be
disbursed to Tenant when the Landlord has received a fully complete Application
for Payment executed by the Contractor and the Architect as to all of the
Improvements as provided hereinabove and the following conditions have been
satisfied:
(i) A final certificate of
occupancy has been issued by the appropriate governmental body; and
(ii) Tenant shall have provided
the Landlord with unconditional lien releases from the Contractor, all
subcontractors and material suppliers for all major trades involved in the
Improvements or an indemnification from a title company reasonably acceptable to
Landlord has been obtained.
4.3.3 Tenant’s Retention of Contractor. Tenant shall independently
retain the Contractor to construct the Improvements in accordance with the
Approved Working Drawings and the Cost Proposal. Landlord shall assist in
coordinating the construction of the Improvements by the Contractor and Tenant
shall pay a construction coordination fee (the “Landlord Coordination Fee”)
3
to Landlord in an amount equal to the product of (i) three percent
(3%) and (ii) an amount equal to the Improvement Allowance plus the
Over-Allowance Amount (as such Over-Allowance Amount may increase
pursuant to the terms of this Tenant Work Letter).”
1.5 Section 5.3 of the Work Letter (entitled “Warranties and Guaranties”) is
hereby amended by deleting such provision in its entirety and inserting in lieu thereof:
“5.3 Warranties and Guaranties. Tenant hereby assigns
to Landlord, to the extent assignable, on a non-exclusive basis, all
warranties and guaranties by the Contractor relating to the
Improvements. Tenant’s taking possession and acceptance of the
Premises shall not constitute a waiver of: (i) any contractor or
subcontractor warranty with respect to workmanship (including
installation of equipment) or material (exclusive of equipment
provided directly by manufacturers), (ii) any non-compliance of
Improvements with building code, or (iii) any claim that the
Improvements were not completed substantially in accordance with the
Approved Working Drawings (collectively, a “Construction Defect”).
Tenant shall immediately commence to cause any and all such
Construction Defects to be remedied within thirty (30) days
following such possession and acceptance of the Premises, and shall
diligently prosecute such remediation to completion.”
1.6 Section 6.2 of the Work Letter (entitled “Landlord’s Representative”) is
hereby amended by deleting such provision in its entirety and inserting in lieu thereof:
“6.2 Landlord’s Representative. Landlord has designated
CB Xxxxxxx Xxxxx as its representative with respect to the matters
set forth in this Tenant Work Letter, who, until further notice to
Tenant, shall have full authority and responsibility to act on
behalf of the Landlord as required in this Tenant Work Letter.”
2. Conflict. In the event of any conflict between the Original Lease and this
Amendment, this Amendment shall prevail. Except to the extent herein modified, the Original
Lease shall continue in full force and effect.
3. Counterparts. This Amendment may be executed in any number of counterparts,
each of which shall be deemed an original, but all of which, taken together, shall constitute
on and the same instrument.
IN WITNESS WHEREOF, this Amendment has been duly executed by the parties hereto as of the day
and year first above written.
| “TENANT” | “LANDLORD | |||||||||||||
| FREMONT INVESTMENT & LOAN, a California industrial bank |
CROWN BREA ASSOCIATES, LLC, a Delaware limited liability company |
|||||||||||||
By:
|
/s/ Rock X. Xxxxx | By: | CRD VENTURES, LLC, | |||||||||||
| Name: | Rock X. Xxxxx | a California limited liability company | ||||||||||||
| Title: | VP, Corporate Real Estate | |||||||||||||
By:
|
/s/ Xxxx Xxxxxx | By: | /s/ Xxxxxx X. Xxxxxxx | |||||||||||
| Name: | Xxxx Xxxxxx | Name: | XXXXXX X. XXXXXXX | |||||||||||
| Title: | AVP, Corporate Facilities | Title: | MEMBER | |||||||||||
4
