1
EXHIBIT 10.2
FIRST AMENDMENT TO LEASE AGREEMENT
Made as of this day of November, 1997
by and between
SOAP (CA) QRS 12-37, INC. ("Landlord") and XXXXXXX INTERNATIONAL ("Tenant")
W I T N E S S E T H:
WHEREAS, the Landlord and Tenant entered into a certain Lease
Agreement dated as of October 17, 1997 (the "Lease"); and
WHEREAS, Landlord and Tenant desire to amend the Lease and
hereinafter set forth.
NOW, THEREFORE, for good and valuable consideration, the receipt of
sufficiency of which is hereby acknowledge, Landlord and Tenant covenant and
agree as follows:
1. The definition of "Completion Date" is hereby deleted
in its entirety and the following is inserted in lieu thereof:
"Completion Date" shall mean the date on which all of
the following events have occurred with respect to the Improvements:
(a) construction of the Improvements and installation of the
Equipment have been substantially completed (within the meaning of
the term "Substantial Completion") to the reasonable satisfaction of
Landlord, Tenant and Developer, and (b) an inspection card signed by
all necessary governmental officials of the City of Carlsbad
(including the Fire Xxxxxxxx and the Building Inspector) has been
issued which (A) is unconditional and irrevocable and (B) permits
immediate occupancy of the Improvements.
2. The definition of "Indirect Costs" is hereby deleted
in its entirety and the following is inserted in lieu thereof:
"Indirect Costs" shall mean costs and expenses, other
than Direct Costs, incurred or to be incurred by Landlord through
the Completion Date in connection with or incidental to the
acquisition of the Land and the construction of the Improvements or
installation of the Equipment, including without limitation, costs
of title examination and insurance required under Paragraph
16(a)(ii) and (vi) of the Lease until the Completion Date , costs of
surveys, environmental assessments, the development fee of
Developer, water and sewer rents, Basic Rent, Additional Rent and
Impositions (as such terms are defined in the Lease) in each case
through the end of the calendar month in which the Completion Date
occurs or if the Completion Date occurs prior to the eighth (8th)
day before the end of a calendar month, the eighth (8th) day after
the Completion Date, fees of the architect, reasonable fees of
counsel to Landlord and Lender, engineers' fees, appraisal fees and
the Acquisition Fee.
3 The following definitions shall be added to Paragraph 2
Definitions:
2
"Project Cost Savings" shall mean the positive
difference, if any, between $6,782,476 and final Project Costs.
"Substantial Completion" shall mean that the Project is
sufficiently complete in accordance with the Plans and any Change
Orders (as defined in the Construction Agency Agreement) such that
it can be occupied for its intended use and that the only remaining
work is minor in nature and of a type which does not and will not
interfere with in any material respect or otherwise diminish the use
of in any material respect the Project by Tenant or Tenant's ability
to occupy the Project. Substantial Completion shall not be achieved
unless and until the general contractor for the Improvements
certifies to Landlord and Tenant in writing that all remaining work
will be completed within thirty (30) calendar days after the date of
Substantial Completion.
4. The following subparagraph is hereby added at the end
of Paragraph 4:
"(c) Tenant shall take possession of the Leased
Premises no later than thirty (30) days after Substantial
Completion".
5. After the words "$50,000 per occurrence" in the last
line of Subparagraph 16(a)(i) the following is hereby added, except that:
"except that with respect to earthquake insurance, such
insurance may contain a deductible equal to 5% of replacement cost
of the Improvements (which, with Landlord's prior consent to be
based on Landlord's review of the creditworthiness of Tenant, may be
increased to 10%)."
6. Subparagraph 16(a)(iv) is hereby deleted in its
entirety and the following is inserted in lieu thereof:
"(iv) Comprehensive Boiler and Machinery Insurance on
any of the Equipment or any other equipment on or in the Leased
Premises (which may be carried under the "umbrella" policy
referenced in clause (ii) above), in an amount not less than
$5,000,000 per accident for damage to property. Such policies shall
include sublimits of at least $100,000 per accident for Off-Premises
Service Interruption, Expediting Expenses, Ammonia Contamination and
Hazardous Materials Clean-Up Expense and may contain a deductible
not to exceed $50,000."
7. Subparagraph (a) of Paragraph 34, Construction of
Improvements is hereby amended by deleting the amount of $6,462,040 and
inserting in lieu thereof the amount of $6,782,476, and Subparagraph (h) of
Paragraph 34 is hereby amended by deleting the date October 1, 1998 and
inserting in lieu thereof the date December 1, 1998.
8. The following is hereby inserted as Paragraph 34(i) to
the Lease:
"(i) Tenant may elect to use up to one-half (1/2) of
Project Cost Savings for additional tenant improvements, provided,
that Tenant makes such election within thirty (30) days following
notice from Landlord of the amount of Project Cost Savings available
to Tenant for additional tenant improvements and spends such sums
within sixty (60) days following such election. Landlord shall,
within ten (10) days after Tenant's written request therefore
(accompanied by evidence of the amount and nature of such
expenditure), reimburse Tenant for any amounts paid for such
additional tenant improvements."
-2-
3
9. The following is hereby added as Paragraph 34(j) to
the Lease:
"(j) Tenant covenants and agrees to comply with the
provisions of the Construction Agency Agreement applicable to it."
10. Section A. of Paragraph 1 Basic Rent of Exhibit "D",
BASIC RENT PAYMENTS is hereby amended by deleting the phrase "November 1, 1997"
and inserting in lieu thereof the phrase "December 1, 1997" and by adding the
phrase "as provided in the Budget" after the phrase "Project Costs" in the fifth
line and in the fifteenth line of Section A.
11. Section B. of Paragraph 1 Basic Rent of Exhibit "D",
BASIC RENT PAYMENTS is hereby deleted in its entirety and the following is
inserted in lieu thereof:
"B. Commencing on the first day of the first calendar
month immediately following the Completion Date and continuing on
the first day of each month thereafter until the expiration of the
Term (each such date, also a "Basic Rent Payment Date"), Basic Rent
shall be payable in an amount equal to the sum of (i) the lesser of
(x) $60,477 (reduced by one-twelfth of the product of .0089166
multiplied by one-half (1/2) of Project Cost Savings not disbursed
to Tenant under Paragraph 34(i)) or (y) .0089166 multiplied by the
Project Costs (including the sum of the one-half (1/2) of Project
Cost Savings paid to Developer and the amount of Project Cost
Savings (if any) disbursed to Tenant under Paragraph 34(i) but
excluding the Acquisition Fee and amounts advanced from the Change
Order Contingency) plus (ii) one-twelfth of 10.70% of amounts
advanced from the Change Order Contingency. Notwithstanding the
above, if the Completion Date shall occur prior to the eighth day
before the end of a calendar month then Basic Rent shall commence on
the eighth day following the Completion Date and the first monthly
installment of Basic Rent shall include the pro rata portion of
Basic Rent payable from such eighth day through the end of the month
in which the Completion Date occurred."
12. The Budget attached as Exhibit "F" to the Lease is
hereby deleted in its entirety and the Budget attached hereto as Exhibit "F" is
incorporated herein as if fully set forth.
13. Except as specifically amended hereby, the terms and
conditions of the Lease shall remain in full force and effect.
14. This Amendment may be executed in any number of
counterparts and by the different parties hereto on separate counterparts each
of which, when so executed, shall be deemed an original, but all such
counterparts shall constitute but one and the same instrument.
-3-
4
15. This Amendment shall be binding on the parties hereof
and their respective successors and assigns.
IN WITNESS WHEREOF, Landlord and Tenant have caused this Lease to be
duly executed under seal as of the day and year first above written.
LANDLORD:
SOAP (CA) QRS 12-37, INC.,
a California corporation
By:________________________________
Title:_____________________________
TENANT:
XXXXXXX INTERNATIONAL
a California corporation
By:________________________________
Title:_____________________________
-4-
