HomeMy Public PortalAboutC-20-054 - Shippers Transport Express, Inc. Development Impact Fees and Operation and Maintenance Cost Agreement, 2149 E. Sepulveda BlvdAGREEMENT FOR DEVELOPMENT IMPACT FEES AND OPERATION AND
MAINTENANCE COSTS
THIS AGREEMENT (the "Agreement") is executed this 10th day of February, 2020
(the "Effective Date"), by and between the CITY OF CARSON, a charter city (the "City"), and
SHIPPERS TRANSPORT EXPRESS, INC., a California corporation ("Shippers"), whose
principal place of business is 2300 East Sepulveda Boulevard, Carson, CA 90810. City and
Shippers may be referred to, individually or collectively, as "Party" or "Parties."
RECITALS
WHEREAS, on March 21, 2017, the City Council of the City of Carson adopted Interim
Urgency Ordinance No. 17-1615U by a 5-0 vote, pursuant to. its authority under Government
Code Section 65858; and
WHEREAS, Interim Urgency Ordinance No. 17-1615U enacted a 45 -day moratorium on
the establishment, expansion, or modification of truck yards, logistics facilities, hazardous
materials and hazardous waste facilities, container storage facilities, and container parking
(collectively, "Logistics Facilities") in the City of Carson; and
WHEREAS, on May 2, 2017, the City Council adopted Interim Urgency Ordinance No.
17-16180 by a 5-0 vote, pursuant to its authority under Government Code Section 65858; and
WHEREAS, Interim Urgency Ordinance No. 17-1618U enacted a 10 -month and 15 -day
extension of the moratorium on the establishment, expansion, or modification of Logistics
Facilities; and
WHEREAS, on March 20, 2018, the City Council adopted Interim Urgency Ordinance
No. 18-1805U by a 5-0 vote, pursuant to its authority under Government Code Section 65858;
and
WHEREAS, Interim Urgency Ordinance No. 18-1805U enacted an additional 12 -month
extension of the moratorium on the establishment, expansion, or modification of Logistics
Facilities; and
WHEREAS, Interim Urgency Ordinance Nos. 17-1615U, 17-1618U, and 18-1805U
constitute the City's Logistics moratorium (the "Moratorium"); and
WHEREAS, during the effective period of the Moratorium, no application for permit
was accepted, no consideration of any application for permit was made, and no permit was
issued by the City for the establishment, expansion, or modification of Logistics Facilities; and
WHEREAS, the City Council allowed exceptions to the application of the Moratorium
if, based on substantial evidence presented, the City Council determined there were one or more
circumstances listed within Interim Urgency Ordinance No. 17-1615U that applied to such
project; and
WHEREAS, on February 28, 2019, Shippers submitted a Site Pian and Design Review
application (the "DOR") and a Conditional Use Permit application (the "CUP") to renovate,
construct, and operate an industrial site to store approximately 704 container spaces, 66 truck cab
parking spaces, and 5 standard vehicle parking spaces and 4 modular buildings on permanent
foundations that will include 2 guard shacks, 1 guard station and 1 restroom facility, ("Project")
all of which will be on a 20 -acre site located at 2149 East Sepulveda Boulevard, Assessor's
010o7.0018/G18039.10 MES
Parcel Number 7315-020-019, in the MH -D (Manufacturing, Heavy; Design Overlay District)
zone (the "Property"); and
WHEREAS, the Project was subject to the Moratorium; and
WHEREAS, on lune 27, 2018, Shippers filed a request for an exception to the
Moratorium to allow filing and processing of all applications and/or permits necessary for the
construction of the Project; and
WHEREAS, on August 21, 2018, the City Council adopted Resolution No. 18-117,
approving an exception to the Moratorium for the Project (the "Exception"), subject to certain
conditions precedent, including that Shippers will pay the undetermined one-time interim
Development Impact Fee (the "DIF"); and
WHEREAS, on April 16, 2019, the City Council adopted Ordinance Number 19-1931
implementing a City development impact fee program upon completing an interim development
impact fee program nexus study to assess the fair share contribution from projected new
developments to fund infrastructure improvement needs in the City, which thereby promotes and
protects the public, health, safety, and welfare; and
WHEREAS, Shippers has voluntarily agreed to pay a DIF fee of $807.62 per truck
parking; space for the ability to (i) amortize such one-time upfront DIF over several years and (ii)
no longer be obligated to pay any amortized DIF fee not yet due if/when Shippers' leasehold
interest in the Property is terminated; and
WHEREAS, pursuant to the Exception, Shippers was to participate in one or more
Community Facilities District (the "CFD") and become subject to all special taxes applicable to
the Property, whether administered through the Master CFD or another community facilities
district or assessment district to be formed by the City related to CFD Services to the Property;
and
WHEREAS, the City undertook a comprehensive review of the net fiscal impact that
will be placed upon the City based on the potential future development or redevelopment
throughout the City; and
WHEREAS, as was determined in that certain "City of Carson Fiscal Impact Analysis
for Citywide Future Development" dated March 2019 (the "Analysis Report"), the City needs to
ensure that developing property pays their fair share as a result of any additional fiscal burdens
placed upon the City's operational budget due to new development in order for the City to
continue to provide necessary services to their population base; and
WHEREAS, the Analysis Report recommended the establishment of a CFD to finance
future costs of enhanced park services and enhanced roadway services (as those terms are used
within the Analysis Report) on residential and non-residential zones; and
WHEREAS, annexing into an applicable CFD is only one of many options an applicant
may elect to use in order to satisfy the negative fiscal impact that their project may have on City
services; and
WHEREAS, on September 18, 2018, the City initiated the process to form a citywide
CFD to finance the ongoing costs of the following: law enforcement, street and sidewalk
maintenance, landscape maintenance, street sweeping and sidewalk cleaning, and other eligible
maintenance and service costs of properties within the City (the "Master CFD") by adopting
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Resolution No. 18-083, a resolution of intention to establish the City of Carson Community
Facilities District No. 2018-01 (Maintenance and Services). On November 7, 2018, a special
election was held to consider the formation of the Master CFD. Upon landowner approval, the
City of Carson Community Facilities District No. 2018-01 (Maintenance and Services) was
subsequently formed on November 7, 2018 with the adoption of Resolution No. 18-119 as the
Master CFD. The Master CFD contemplates that the City will annex properties from time to time
into the Master CFD to fund one or more of certain categories of maintenance and services,
including Landscape Maintenance, Street Sweeping and Sidewalk Cleaning and Maintenance,
Sheriff Service, and Street Maintenance, which are collectively referred to herein as the "CFD
Services", by unanimous written consent of property owners or as otherwise permitted by the
Mello -Roos Community Facilities Act of 1982 (the "Act"), which properties may be annexed as
a "Tax Zone" or otherwise with special taxes related to such properties to be levied on the
property pursuant to the Act; and
WHEREAS, Tesoro Logistics Operations LLC (the "Property Owner") is the owner of
the Property. Shippers has, or will have, an equitable interest as a lease -hold tenant of the
Property. A copy of the form of such lease agreement between Property Owner and Shippers is
attached as Exhibit "A" and incorporated herein (the "Lease Agreement"); and
WHEREAS, Shippers has made the City aware that the Shippers will be unable to
coordinate the requisite property owner votes from Property Owner as required by the Act. As a
result, the Property cannot be annexed into the appropriate CFD as required by the Exception;
and
WHEREAS, Shippers now wishes to offer to pay to the City for the operation and
maintenance costs to finance their fair share of the costs of the CFD Services for the term of
Shippers' lease hold interest of the Property (the "O&M Costs"). The O&M Costs shall be in
addition to the DIF; and
WHEREAS, this Agreement furthers Goal TI -1 of the General Plan, to "[m]inimize
impacts associated with truck traffic through the City, as well as the truck parking locations'
and
WHEREAS, this Agreement furthers Goal TI -2 of the General Plan, to "provide a
sustainable, safe, convenient and cost-effective circulation system to serve the present and future
transportation needs of the Carson community"; and
WHEREAS, this Agreement furthers Goal TI -7 of the General Plan, to "Provide
improved aesthetic enhancements to and maintenance of the City's transportation corridors"; and
WHEREAS, on December 10, 2019, Shippers received approval from the Planning
Commission on certain entitlements related to the Project, including but not limited to DOR No.
1770-19 and CUP. 1093-19. The Project is further subject to the Conditions of Approval
attached as Exhibit B to that Planning Commission Resolution No. 19-2681 ("PC Resolution"),
which PC Resolution and all attachments are hereby incorporated herein by this reference; and
WHEREAS, condition number one of the Conditions of Approval of the PC Resolution
requires that the "DIF Amount is payable to the City as one time up -front payment and no
building permit(s) shall be issued prior to the full payment of the DIF Amount; provided,
however, that Developer may enter into a separate agreement to pay the DIF Amount in annual
installments over a specified number of years"; and
01007.00181618039 10 MES
WHEREAS, condition number two of the Conditions of Approval of the PC Resolution
requires the "Developer [to] annex to the CFD and be subject to the CFD special taxes within 6
months from the date of this approval; provided, however, that Developer may enter into a
separate agreement to pay for its fair share of the operation and maintenance costs of CFD
Services (O&M Costs) provided to and for the benefit of the property to at least the same or
roughly proportionate percentage that the property would have shared of the total CFD special
taxes levied on participating property owners of the CFD"; and
WHEREAS, condition number three of the Conditions of Approval of the PC Resolution
requires the "[w]ithin 60 days from the date of this approval, and if applicable, Developer shall
agree to and execute a form of the "Agreement for Development Impact Fees and Operation and
Maintenance Costs"... to pay for the DIF Amount in annual installment payments and to pay for
O&M Costs"; and
WHEREAS, this Agreement is the agreement referenced in condition number three of
the Conditions of Approval of the PC Resolution; and
WHEREAS, 60 days from the date of PC Resolution requires this Agreement to be
executed on or before February 10, 2020; and
WHEREAS, the Parties now desire to enter into this Agreement for the purposes
described above; and
NOW, THEREFORE, for the purposes set forth herein, and for good and valuable
consideration, the adequacy of which is hereby acknowledged, the Parties hereby agree as
follows:
TERMS
I. Incorporation of Recitals. The Parties hereby incorporate the Recitals as though
fully set forth herein.
2. Shippers Responsibility for DIF Amount. Shippers agrees to pay and shall be
responsible for payment of a DIF of $807.62 per container space. The Project contemplates 704
container spaces located on the Property. Therefore, Shippers will be responsible for a total DIF
of $568,564 (the "DIF Amount"); however this amount is subject to adjustment as follows: (a)
if the number of truck parking spaces in the Project increases or decreases in size at any time that
Shippers remains on the Property subject to a valid Lease Agreement, the DIF Amount will be
adjusted accordingly at the same $807.62 per container space rate; (b) if the Lease Agreement for
the property is terminated, Shippers will not be responsible for paying the remaining amortized
DIF Amount as of the date Shippers vacates the Property following Lease Agreement
termination.. The DIF Amount payable for the Project shall be calculated based on the foregoing
rate regardless of any changes in the standard development impact fee rates charged by the City
from time to time. Shippers shall submit payment of the Initial DIF Payment (as defined in
Section 2.2), prior to the issuance of building permits. The City shall not be obligated to issue
any building permits for the Project until Shippers has fully paid the Initial DIF Payment.
2.1 Timing of Payment of DIF Amount. In lieu of a one-time up -front DIF
payment, the City agrees to allow Shippers to pay the DIF Amount in annual amortized
payments over Shippers' lease -hold interest in the Property, at an interest rate of 1% per annum.
The interest shall accrue on the DIF Amount on the first day of each calendar year, commencing
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on the first day of the month following the first date Shippers' occupies the Property ("Move -In
Date"). Interest computed at the DIF Amount shall be computed on the basis of a 360 day year.
If Shippers shall fail to make any payment required by this Agreement within 10 days of
the due date thereof, Shippers shall pay to the City a service charge of 5% of the amount due,
provided, however, that not more than one such service charge shall be made on any delinquent
payment regardless of the length of the delinquency. Further, Shippers shall pay to the City
interest on any delinquent payment or amount due under this Agreement from the due date
thereof until paid, at 12% per annum; provided, however, in no event shall the interest and other
charges hereunder exceed the highest rate permissible under any law which a court of competent
jurisdiction shall, in a final determination, deem applicable hereto. In the event that such a court
determines that City has received interest and other charges hereunder in excess of the highest
rate applicable hereto, such excess shall be deemed received on account of, and shall
automatically be applied to reduce, the amounts due hereunder, other than interest, in the inverse
order of maturity, and the Sections hereof shall be deemed amended to provide for the highest
permissible rate. If there are no amounts outstanding under this Agreement, City shall refund to
Shippers such excess. The Parties agree that the purpose of the charges and fees under this
section shall be to reimburse the City for a portion of the expense incident to handling the
overdue payment. This Section 2.1 shall not be deemed to excuse a late payment or be deemed a
waiver of any other rights the City may have.
2.2 Payments of DIF Amount. All payments of principal of, and interest on,
the DIF Amount payable to the City shall be made, without deduction, set off, or counterclaim,
in immediately available funds not later than 5:00 p.m., local time in Carson, California,
commencing on the first day of the month following the first date Shippers occupies the Property
(the "Move -In Date") and on each anniversary of the Move -In Date thereafter, to the City and
for the benefit of the City in a form and manner as determined by the City's Finance Director and
shall include such identifying information as the City may require.
The first payment of the amortized DIF Amount shall be due on the Move -In Date (the
"Initial DIF Payment") and is a condition precedent to the issuance of building permits for the
Project. No building permits shall be issued prior to the Initial DIF Payment. The DIF Amount
shall be payable in twenty, (20) annual payments of $31,377.48, inclusive of interest as described
in Section 2.1 of this Agreement. Funds received on any day after 5:00 p.m., local time in
Carson, California shall be deemed to have been received on the next business day. Whenever
any payment to be made hereunder shall be stated to be due on a day which is not a business day
then the payment shall be made on the next succeeding business day. For the purposes of this
Agreement, a business day shall mean Monday through Thursday (excluding holidays).
Shippers' obligation to pay any amortized DIF fee not yet due shall cease upon the
termination of its Lease Agreement for the Property, including any extensions to the current
Lease Agreement, and if applicable, the termination or expiration of a new lease agreement for
the Property.
2.3 Allocation of DIF; Interest on Deposit. Any amounts deposited by
Shippers shall be used by the City to pay for increased accumulative impacts of the Project on
the City's infrastructure, including, but not limited to, any or all of the following: General
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Governmental Facilities, Transportation Infrastructure and Facilities, Utilities and Sustainability,
Beautification, Parks and related Facilities, and Traffic Facilities.
Shippers Responsibility for O&M Costs in Lieu of Master CFD Participation
3.1 Existence of the Master CFD. The Master CFD has been established by
the City pursuant to the Act to finance the CFD Services. The Master CFD contemplates that the
developments of certain properties within the City will have an impact on CFD Services
provided by the City and, therefore, such properties, as they are being developed, must be
annexed into the Master CFD in order to pay for their pro rata share of the costs for the CFD
Services. The improvements on the Property herein would require the CFD Services to be
provided to the Property and, therefore, will impact the CFD Services. However, in lieu of
annexing into the Master CFD, the City agrees to allow Shippers to pay for the O&M Costs in
annual amounts as are necessary to pay for the Project's pro rata share of the CFD Services to be
provided to the Property.
3.2 O&M Costs. Shippers acknowledges and agrees that in connection with
and as a result of the Project, there are significant impacts on the additional CFD Services to be
provided by the City to the benefit of the Property. By entering into this Agreement, Shippers
agrees to pay the Property's fair share of O&M Costs, which such payment will help finance on-
going CFD Services that benefit the Property as a result of the Project and satisfy condition
number two of the Conditions of Approval of the PC Resolution. The O&M Costs shall reflect
the benefit of the CFD Services provided to the Property as a result of the Project to at least the
same or roughly proportionate percentage that the Property would have shared of the total CFD
special taxes levied on participating property owners of the Master CFD. The rates of the O&M
Costs are based on the current 2019/20 Fiscal Year Master CFD special taxes and may be
adjusted as provided herein annually by Periodic Adjustments (defined below).
3.3 Payment of O&M Costs. Shippers' commitment under this Agreement is
subject to the following:
a. Commencing on the Move -In Date and on each anniversary of the
Move -In Date thereafter, subject to increases pursuant to this Agreement, Shippers agrees to pay
the O&M Costs as an annual fee to the City in a total amount of S16,425, calculated as an
estimated 90 truck trips per day at a rate of $0.50 per truck trip, multiplied by 365 days a year.
All O&M Costs payable to the City shall be made, without deduction, set off, or counterclaim, in
immediately available funds not later than 5:00 p.m., local time in Carson, California, to the City
and for the benefit of the City in a form and manner as determined by the City's Finance Director
and shall include such identifying information as the City may require. Funds received on any
day after 5:00 p.m., local time in Carson, California shall be deemed to have been received on
the next business day. Whenever any payment to be made hereunder shall be stated to be due on
a day which is not a business day then the payment shall be made on the next succeeding
business day. For the purposes of this Agreement, a business day shall mean Monday through
Thursday (excluding holidays). If Shippers shall fail to make any O&M Costs payment required
by this Agreement within 10 days of the due date thereof, Shippers shall pay to the City a service
charge and penalty fee as described in Section 2.1 of this Agreement.
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b, On an annual basis, the O&M Costs shall not exceed the dollar
amount of the costs in Subsection (a), above, subject to annual periodic adjustments of providing
the CFD Services not to exceed the percentage change in the November annualized Consumer
Price Index for Los Angeles -Long Beach -Anaheim for all Urban Consumers (the "Periodic
Adjustments"). The Periodic Adjustments will occur each July 1, commencing on July 1, 2020.
In the event that the November annualized Consumer Price Index for Los Angeles -Long Beach -
Anaheim for all Urban Consumers is no longer published or maintained by the U.S. Bureau of
Labor Statistics, the Periodic Adjustments shall be made using such other published index as the
City in its sole and absolute discretion may determine as appropriate. City shall inform Shippers
of the O&M Costs, subject to adjustment by the applicable Periodic Adjustments, due and owing
to the City for the then current year at least 30 days prior to each annual due date pursuant to
Section 3.3(a) of this Agreement. Notwithstanding the preceding sentence, City's failure to
notify Shippers of the O&M Costs due and owing shall not excuse Shippers from its obligation
to pay for said O&M Costs on each annual due date pursuant to Section 3.3(a) of this
Agreement. If Shippers is not informed of the then current year's O&M Costs prior to the
anniversary of the Move -In Date, Shippers may provide payment to the City of the previous
year's invoice amount to satisfy the current year's obligation without penalty; provided that
Shippers will remain liable to pay the difference, if any, of the O&M Costs that is increases by
the Periodic Adjustment upon notice from the City.
c. Shippers' obligation to pay such O&M Costs shall cease upon the
termination of its Lease Agreement for the Property, including any extensions to the current
Lease Agreement, and if applicable, the termination or expiration of a new lease agreement for
the Property.
3.4 No Limitation on City's Ability to Require Annexation of the
Property into the Master CFD. Nothing in this Agreement shall limit the City's authority and
ability to require the annexation of the Property into the Master CFD under the Act. Annexation
into the Master CFD shall not affect the amount of the annual fee due and owing to the City
pursuant to Section 3.3(a) of this Agreement and subject to applicable Periodic Adjustments,
4. Costs of Processing Project. In connection with the development application
packet submitted to the City, Shippers shall reimburse City for reasonable costs and fees related
to processing all documents related to the Project (the "City Casts"). City Costs include, but are
not limited to: attorneys' fees and staff time required for the drafting this Agreement, as well as
any other agreements and documents that the City deems necessary for the implementation of the
Project; all costs related to the administration of the DIF Amount and the O&M Costs as it
relates to the Project, including but not limited to consultant and engineering costs, staff time,
and attorneys' fees; all costs related to the processing of the entitlements necessary for the
Project, including but not limited to staff time, environmental consultants, and attorneys' fees;
and any other fees and costs deemed necessary by the City. City Costs will be in addition to
Shippers' obligations in connection with Shippers duty to indemnify, defend, and hold harmless
City, pursuant to Section 8, below.
4.1 To that end, Shippers shall deposit with the City initial sums of $3,000.00
(Conditional Use Permit - Industrial Uses) and $10,000.00 (Site Plan and Design Review)
against which any City Costs will be drawn down (the "City Costs Deposits"). 1f the balance of
01007.00181618039.10 MES
City Costs Deposits cumulatively falls below 20% of the initial deposits under this Section 4,
Shippers shall make additional deposits in accordance with Section 4.2. The City acknowledges
receipt of the initial City Costs Deposits of $3,000.00 received from Shippers on or about
February 28, 2019 for the Conditional Use Permit - Industrial Uses and $10,000.00 on or about
February 28, 2019 for the Site Plan and Design Review. Interest accruing upon the City Costs
Deposits shall inure to and be created for the benefit of the City.
4.2 Shippers shall make additional deposits to the City for City Costs within
10 days of City's written request, City's written requests for additional deposits shall state what
costs have been incurred to date, additional costs anticipated, and how City intends to apply any
needed additional deposits, If the total City Costs Deposits exceed the actual City Costs, City
shall refund the difference within 10 business days of the City determining that such excess
exists and the amount of such excess.
4.3 This Section 4 shall survive any termination of this Agreement, including,
but not limited to, termination as contemplated by Section 7.
Default by Shippers; Remedies.
5.1 Shippers shall be responsible for complying with all the sections of this
Agreement. In the event that City must enforce any of the sections of this Agreement:
a. City shall give notice to Shippers of any default and the reasons for
such default. The notice shall include a reasonable timeframe in which Shippers may cure the
default.
b. Upon Shippers' failure to cure the default within the time provided
in the notice of default:
(i) The City may immediately issue a stop -work order on the
Project and may take such further action as the City deems appropriate, including denial,
suspension, or revocation of Shippers' permits and/or land use entitlements; and
(ii) The City may seek judicial enforcement of any section of
this Agreement, including but not limited to, recovering amounts payable to City as DIF Amount
or 0&M Costs, and obtaining specific performance.
5,2 [Reserved]
5.3 [Reserved]
5,4 Code Enforcement. This Agreement shall not be interpreted to limit any
of the City's enforcement authority or remedies at law or equity against Shippers for violating
any applicable law, including, but not limited to, the Carson Municipal Code, nor shall it be
interpreted as a waiver of any defense of Shippers.
6, Additional Taxes, Fee, and Charges. Except as provided in this Agreement,
Shippers shall pay all normal and customary fees and charges applicable to all permits necessary
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for the Project, and any taxes, fees, and charges hereafter imposed by City in connection with the
Project which are standard and uniformly -applied to similar projects in the City.
Term.
7.1 This Agreement shall remain in effect for a period commencing on the
Effective Date and shall terminate on the later of: (i) one year after the termination or expiration
of the Lease Agreement, including any extensions thereof or any subsequent lease agreement
between Shippers and the Property owner concerning the Property, including any extensions
thereof; or (ii) Shippers' complete payment of the DIF Amount pursuant to Section 2. If Shippers
transfers or assigns its interest in the Lease, City shall have the option to terminate this
Agreement upon 39 days' notice to Shippers. The rights and obligations granted, created and
made herein, including without limitation, the covenants, conditions, restrictions, charges and
limitations, shall be granted to Shippers exclusively, and shall inurc to the benefit of the City and
its successors and assigns and successors in interest.
7.2 Notwithstanding Section 7. 1, if Shippers does not enter into the Lease
Agreement within 90 days following the Effective Date, then, except as stated otherwise in this
Agreement, this Agreement shall automatically terminate and have no further legal force or
binding effect. Upon termination of this Agreement, if any building permits are to be issued, the
PC Resolution shall apply to that Project, including but not limited to the Conditions of
Approval requiring a one-time DIF payment and annexation into the CFD.
8. Indemnification.
8.1 Indemnification and Hold Harmless.
a. Non -liability of City. The Parties acknowledge and agree that there
may be challenges to the legality, validity, and adequacy of this Agreement in the future; and if
successful, such challenges could delay or prevent the performance of this Agreement and the
development of the Project.
b. Participation in Litigation: Indemnity. To the maximum extent
permitted by applicable law, Shippers agrees to indemnify, protect, defend, and hold harmless
the City and its officials, officers, employees, agents, elected boards, commissions, departments,
agencies, and instrumentalities thereof, from any and all actions, suits, claims, demands, writs of
mandamus, liabilities, losses, damages, penalties, obligations, expenses, and any other actions or
proceedings (whether legal, equitable, declaratory, administrative, or adjudicatory in nature), and
alternative dispute resolution procedures (including, but not limited to, arbitrations, mediations,
and other such procedures) asserted by third parties against the City that challenge, or seek to
void, set aside, or otherwise modify or annul, the action of, or any approval by, the City for or
concerning this Agreement, and any and all discretionary acts by the City or entitlements relating
to the Project (including but not limited to entering into a development agreement with Shippers,
if applicable) or entitlements relating to the Project (including, but not limited to, reasonable
attorneys' fees and costs) (herein the "Claims and Liabilities") whether such Claims and
Liabilities arise out of planning and zoning laws, the Subdivision Map Act, Code of Civil
Procedure Sections 1085 or 1094.5, or any other applicable federal, state, or local statute, law,
01007.0018/618039.10 MES
ordinance, rule, regulation, or any decision of a court of competent jurisdiction. In the event any
action for any Claims and Liabilities is brought against the City and/or related parties, upon
City's notification to Shippers of the pendency of a claim or suit, Shippers shall make a
minimum deposit sufficient to pay all of Shippers' indemnification obligations for the following
90 days, which includes Iegal costs and fees anticipated to be incurred as reasonably determined
by the City. Shippers shall make deposits required under this Section 8 within 30 days of the
City's written request. At no point during the pendency of such claim or suit, shall the minimum
balance of the deposit fall below Fifteen Thousand Dollars ($15,000). Upon conclusion of such
claim or suit, including any appeals, any remaining deposit shall be refunded to Shippers within
10 business days of the City determining that there exist any remaining deposits pursuant to this
Section 8 and the City has determined the amount of such remaining deposits.
If Shippers fails to timely make the deposits required pursuant to this Section 8, the City
may abandon the action without liability to Shippers and may recover from Shippers any
attorneys' fees and other costs for which the City may be liable as a result of abandonment of the
action. It is expressly agreed that the City shall have the right to utilize the City Attorney's office
or use other- legal counsel of its choosing. Shippers' obligation to pay the defense costs of the
City shall extend until final judgment, including any appeals. City agrees to fully cooperate with
Shippers in the defense of any matter in which Shippers is defending and/or holding the City
harmless. The City may make all reasonable decisions with respect to its representation in any
legal proceeding, including its inherent right to abandon or to settle any litigation brought against
it in its sole and absolute discretion.
C. Exception. The obligations of Shippers under this Section 8 shall
not apply to any claims, actions, or proceedings arising through the sole negligence or willful
misconduct of the City and its officials, officers, employees, agents, elected boards,
commissions, departments, agencies, and instrumentalities thereof.
d. Effect if Project Terminated. If, as a result of any legal challenge,
the development of the Project is fully terminated, after full accounting of all outstanding
invoices of consultants, attorneys and City staff time, all unused funds on deposit with the City
shall be refunded to Shippers within 10 business days after the City receives a written request for
such refund from Shippers. If the Project is subsequently allowed to start during the term of this
Agreement, the refunded funds shall be returned to the City and this Agreement shall be enforced
in full effect, prior to the issuance of any building permits. Moreover, Shippers' obligations
under this Agreement shall cease as of the date the Lease Agreement for the Property, or any
extensions or renewals thereof, is terminated.
8.2 Period of Indemnification. The obligations under this Section 8 shall begin
upon the Effective Date and, for those claims filed before termination, shall survive termination
of this Agreement.
9. Relationship Between the Parties. The Parties hereby mutually agree that this
Agreement shall not operate to create the relationship of partnership, joint venture, or agency
between City and Shippers. Nothing herein shall be deemed to make Shippers an agent of City.
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01007.00 18/619039.10 NIE3
10. Authority to Enter Agreement. Shippers hereby warrant that it has the legal
capacity to enter into this Agreement. Each Party warrants that the individuals who have signed
this Agreement have the legal power, right, and authority to make this Agreement and bind each
respective Party. Shippers acknowledges and agrees that entering into this Agreement is a
voluntary act and hereby acknowledges and agrees to this Agreement as an alternative method to
mitigate the additional impact on public infrastructure, services, and maintenance costs within
the City due to its Project.
11. Notices. All notices, demands, invoices, and communications shall be in writing
and delivered to the following addresses or such other addresses as the Parties may designate by
written notice:
To City: City of Carson
701 East Carson Street
Carson, CA 90745
Attn: Saied Naaseh, Community Development Director
Copy to: Aleshire & Wynder, LLP
18881 Won Karman Ave. Suite 1700
Irvine, CA 92612
Fax: 949-223-1180
Email: ssoltani@awattomcys.com
Attn: Sunny Soltani, City Attorney
To Shippers: Shippers Transport Express, Inc.
2300 East Sepulveda Blvd.
Carson, CA 90810Attn: Kevin Baddeley
Copy to: Carrix, Inc.
1131 SW Klickitat Way
Seattle, WA 98134
Attn: General Counsel
Depending upon the method of transmittal, notice shall be deemed received as follows:
by facsimile, as of the date and time sent; by messenger, as of the date delivered; by U.S. Mail
first class postage prepaid, as of 72 hours after deposit in the U.S. Mail; and by email, upon the
sender's receipt of an email from the recipient acknowledging receipt.
12. Cooperation; Further Acts. The Parties shall fully cooperate with one another,
and shall take any additional acts or sign any additional documents as may be necessary,
appropriate, or convenient to attain the purposes of this Agreement.
13. Construction; References; Captions. It being agreed the Parties or their agents
have participated in the preparation of this Agreement, the language of this Agreement shall be
construed simply, according to its fair meaning, and not strictly for or against any Party. Any
term referencing time, days, or period for performance shall be deemed calendar days and not
0 1007. 00 1816 18039 10 MLS
work days, provided, however that any deadline that falls on a weekend or holiday shall be
extended to the next City business day. All references to Shippers include all personnel,
employees, agents, and contractors of Shippers, except as otherwise specified in this Agreement.
All references to City include its elected officials, officers, employees, agents, and volunteers
except as otherwise specified in this Agreement. The captions of the various articles and
paragraphs are for convenience and ease of reference only, and do not define, limit, augment, or
describe the scope, content, or intent of this Agreement.
14. Amendment; Modification. No supplement, modification, or amendment of this
Agreement shall be binding unless executed in writing and signed by both Parties.
15. Waiver. No waiver of any default shall constitute a waiver of any other default or
breach, whether of the same or other covenant or condition. No waiver, benefit, privilege, or
service voluntarily given or performed by a Party shall give the other Party any contractual right
by custom, estoppel, or otherwise.
I& Binding Effect; Transfer. Each and all of the covenants and conditions shall be
binding on and shall inure to the benefit of the Parties, and their successors, heirs, personal
representatives, or assigns. This Agreement shall not be transferred or assigned by Shippers
without the prior written consent of the City.
17. No Third Party Beneficiaries. There are no intended third party beneficiaries of
any right or obligation assumed by the Parties.
18. Invalidity; Severability. If any portion of this Agreement is declared invalid,
illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining sections
shall continue in full force and effect.
19. Consent to Jurisdiction and Venue. This Agreement shall be construed in
accordance with and governed by the laws of the State of California. Any legal action or
proceeding brought to interpret or enforce this Agreement, or which in any way arises out of the
Parties' activities undertaken pursuant to this Agreement, shall be filed and prosecuted in the
appropriate California State Court in the County of Los Angeles, California. Each Party waives
the benefit of any provision of state or federal law providing for a change of venue to any other
court or jurisdiction including, without limitation, a change of venue based on the fact that a
governmental entity is a party to the action or proceeding, or that a federal right or question is
involved or alleged to be involved in the action or proceeding. Without limiting the generality of
the foregoing waiver, Shippers expressly waives any right to have venue transferred pursuant to
California Code of Civil Procedure Section 394.
20. Time is of the Essence. Time is of the essence to this Agreement.
21. Counterparts. This Agreement may be signed in counterparts, each of which
shall constitute an original and which collectively shall constitute one instrument.
22. Entire Agreement. This Agreement, along with its exhibits, contains the entire
agreement between City and Shippers and, supersedes any prior oral or written statements or
agreements between City and Shippers with respect to the subject matter of this Agreement.
12
01007.0018/618039, 10 MES
IN WITNESS WHEREOF, the Partes hereto have executed this Agreement as of the
day and year first above written.
ATTEST:
Donesia Gause-Aldana, City Clerk
APPROVED AS TO FORM:
Sunny K. Soltani, City Attorney
[MES]
CITY:
CIT
curl
LIN
Sharon Landers, City Manager
SHIPPERS:
inicipal
Shippers Transspgq.Expr ss, Inc., a California
WTI) ati
Name: ra�,n 1Ji�t rd'.L
Its:
By: t, _,4— #
Name:�c v i
Two corporate officer signatures required when Developer is a corporation,,r'sth one signature required from
each of the following groups: I) Chairman of the Board, President or any Tice President, and Z) Secretary,
any Assistant Secretary, Chief Financial Officer or any Assistant Treasurer. DEVELOPER'S SIGNATURES
SHALL BE DULY NOTARIZED, AND APPROPRIATE ATTESTATIONS SHALL BE INCLUDED AS
MAY BE REQUIRED BY THE BYLAWS, ARTICLES OF INCORPORATION, OR OTHER RULES OR
REGULATIONS APPLICABLE TO DEVELOPER'S BUSINESS ENTITY.
01007.0018 618039 10 ME5
CALIFO%NIA ALL-PURPOSE ACKNOWLEDGMENT
A notary public or other officer completing this certificate verifies only the identity of the individual who signed
the docurnent lowhich this certificate is attached, and not the truthfulness, accuracy or validity of that do
STATE OF CALIFORNIA
COUNTY OF LOS ANGELES �V,I ,Q �. ` ;j2 �� t
On , 2420 before wc; ��onaliy appear , proved to me on
the basis of satisfactory evidence to be the persons) whose oames(s) is/am subscribed to the within instrument and
acknowledged to me that helshelthey executed the same in hisliter/their authorized capacity(ies), and that by
histherltheir signann*s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted.
executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is
true and correct.
WiiNE m nd and official sea �' � PA�� � "
IT j6 n "CUry 1°ublic - Caraa*»i.
Signature' i 1aSAegel"County
�.' ComrniWon 1226057
" MY COMM. Ex0ire5 Dec 7- 2022
OPTIONAL
Though the data below is not rewired by lav, it may prove valuable to persons relying on the document and could
nrefttlt fraudulent reattachment of this form,
CAPACITY—Cl::AI�IED BY SIGNER
Q INDIVIDUAL
CORPORATE OFFICER
TITLE(S)
PARTNER(S) LIMITED
Q GENERAL
ATTORNEY-IN-FACT
R TRUSTEE(S)
GUARDIANICONSERVATOR
OTHER
SIGNER IS REPRESENTING:
(NAME OF PERSON(S) OR ENTITY(IES))
0100100M619039. tic MES
DESCRIPTION OF ATTACHED DOCUMENT
TITLE OR TYPE OF DOCUMENT
NUMBER of PACES
DATE OF DOCUMENT
SIGNER(S) €?TIER THAN
CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
A notary public or other officer completing this certificate verifies only the identity of the individual who signed
the document to which this :certificate is attached, and not the truthfulness, accuracy or validity of that document.
STATE OF CALIFORNIA
COUNTY OF LOS ANGELES to p � c'
�
On �, 2426 before me,� rally appeared�� Lproved to me on
the basis of .satisfactory evidence to be the persons) whose names(s) islare subscribed to the within instrument and
acknowledged to me that hefshelthey executed the same in his/her/their authorized capacity(ies), and that by
hisihcrfthcir signaturc(s) an the instrument the person(s), or the entity upon behalf -of which the person(s) acted,
executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is
true and correct.
WITNE hand and official PAMRAE. GLEA"
Notary Public - t:atiraryia ,
Signature. t as ar�getes t a, ni i
I
tommiuion 2266657
Coram. -•" Aix Com. Expires tier 7.7-322 }
OPTIONAL
the data below is not required by law, it may prove valuable to persons relying on the document and could
fraudulent reattachment of this form.
CAPACITi' IMED BY SIGNER
❑ INDIVIDUAL
CORPORATE OFFICER
TITLE(S)
❑ PARTNER(S) ❑ LIMITED
GENERAL
❑
ATTORNEY-IN-FACT
❑ TRUSTEE(S)
❑
GUARDIAN/CONSERVATOR
❑ OTHER
SIGNER IS REPRESENTING:
{NAME OF PERSON(S) OR ENTITY(IES))
01007 001&618039.10 ALES
DESCRIPTION OF ATTACHER DOCUMENT
TITLE OR TYPE OF DOCUMENT
NUMBER OF PAGES
THAN NAMED ABOVE
EXHIBIT "A"
FORM OF LEASE AGREEMENT
[attached]
01007.60181618039 10 MES
LEASE AGREEMENT
THIS LEASE AGREEMENT ("Lease"), dated May 20, 2019, for purposes of
reference only, is made and entered into by and between Tesoro Logistics Operations LLC
("Landlord") and Shippers Transport Express, Inc. ("Tenant"), with Landlord and Tenant
both being referred to herein individually as a "Party" and collectively being referred to
herein as the "Parties."
1. PREMISES. Landlord hereby [eases to Tenant and Tenant leases from
Landlord the following portions of the real property having APN 7315-020-019 and
commonly known as 23700 S. Alameda Street and/or 2149 E. Sepulveda Blvd., Carson,
California, which portions are described and depicted on Exhibit I as follows: (i) Lease
Area "A" consisting of approximately 473,741 square feet (but not including the "non -
useable easement area" as depicted on Exhibit 1), (ii) Lease Area "13-I" consisting of
approximately 283,812 square feet (but not including the "non -useable slope area"), (iii)
Lease Area "B-2" consisting of approximately 106,166 square feet (but not including the
"non -useable slope area), and (iv) Road Area "B-3" consisting of approximately 8,408
square feet. The foregoing areas, cumulatively, consisting of approximately 872,127
square tees, are hereafter individually and collectively referred to as the ("Premises"). For
the avoidance of doubt. Tenant agrees and understands that not only is the area marked
'.non -useable easement area" on Exhibit I not pan of the Premises, Tenant does not have
an casement in such area either.
2. TERM. Unless sooner terminated or extended as provided for herein, the
term of this Lease is for live (5) years, commencing upon the latter of (1) July 1, 2019, or
(2) five (5) business days after Tenant receives a conditional use permit from the City of
Carson to operate at the Premises (such latter date being the "Commencement Date") and
expiring 60 months thereafter ("Initial Term"). As used in this Lease, "Term" means the
Initial Term, as such may be extended by the exercise of the options to extend the Term as
described in Section 3 below. At Landlord's request, Tenant shall confirm the actual
Commencement Date in writing.
3. OPTIONS TO EXTEND TERM. Provided that at the titne of exercising an
option this Lease is then in full force and effect and Tenant is not then in default or breach
of this Lease, Tenant (but not any permitted sublessee or assignee) shall have two (2)
options to further extend the Term of the Lease, each for additional terms of five (5) years,
the first option term commencing immediately upon the expiration of the Initial Term and
the second option term commencing immediately upon the expiration of the then -existing
"Perm. To exercise an option, Tenant must give written notice to Landlord that Tenant is
exercising the option at least one -hundred and eighty (t 80) days prior to the expiration of
the Term then in existence. If Tenant exercises the option to extend the Term, all terms
and provisions of this Lease shall extend to and be applicable during the Term as so
extended. Tenant's failure to timely exercise its first option shall automatically revoke and
extinguish Tenant's right to exercise the second option.
4. RKiH`15 OF SOONER TERMINA'IION- MODI1:IC:A'1ION OF
PREMISES. (a) Both Landlord and Tenant, each in their sole and absolute discretion, may
sooner terminate this Lease for any reason i-Oarsoever by providing the other with notice
of the same at least one hundred and eighty (180) days prior to the expiration of the d -
eYistin; Term, in which event the Tenn shall terminate upon lite ekpiration of the then -
existing Term (notwithstanding. inter alia. any exercise b% Tenant of any option to extend
the Term beyond the dm-cxistingTerm). Furthermore, and without limiting the foregoing
sentence, should Tenant be unable to secure a conditional use permit from the City of
Carson for Tenant's use of the Premises by August 1. 2019 then Tenant shall have the right
w sooner terminate this Lease by providing w-rkten notice of such souther termination to
Landlord by or on August 14, 2019 in which event this Lease shall sootier terminate upon
Landlord's remipt of such roti= of sooner termination. Without limitation. Tenant shall
abide by Section 16 (entitled "Permits") in seeping said conditional use permit.
(b) Landlord shall always have the continuing right (to exercise as many= times
as it desires) to exclude any real property from the definition of Premises for the balance
ofthe Lease term or such shcxter period(s) upon, in each instance, thirty (30) days advance
ti%ritten notice to Tenant, which notice ("Premises Size Reduction Notice") shall reasonably
describe the teal property being excluded from the definition of the Premises and the
effective and enol dates thereof in vkhich event Tenant (at its sole cost and expense) shall
re mnv any Alterations and all equipment, trade fixtures and personal property from such
real property prior to the effective date thereof and. on such effective thereof, such real
property shall not be considered part of the Premises until the end date specified in the
Premises Size Reduction Notice (or if no end date is specilied in the Premises Size
Reduction Notice. for the balance of the Term of the Lease); provided. howeiver, that if
such Premises Site Reduction Notice would result (either by itself or cumulatively with
other Premises Site Reduction Notice(s)) in more than 218.431.75 square feet being
excluded from the original 872,127 square feet of the Premises at any given time, these
Tenant ma) object to the Premises Size Reduction Notice by providing Landlord with a
written objection to the Premises Size Reduction Notice within ten (10) calendar days after
Tenant's receipt of the sante.. in which event the Promises Size Reduction Notice shall not
take effect and the definition of Premises shall not change in response to that particular
Premises Size Redaction Notice.
(c) Upon any Premises Size Reduction Notice taking effect, and continuing for
su long as the Premises Size Reduction 'Notice is in e1%ct, (i) Rent shall be decreased
(leased upon the square footage of the real property being excluded from the definition of
Premises), and (ii) Real Estate Taxes (as defined in section 7 below). in a pro rata amount
based on the Premises Size Reduction, shall also be decreased (or credited, if already paid
in advance by Tenant). Tor example only, if two months alter the Rent Commencement
Date Landlord provides a Premises Size Reduction Notice to Teimat that Landlord is
excluding LOM square feet of rel property from the definition of Premises For twenty-
four (24) months, then upon the Premises Size Reduction Notice talcing effect and for the
next twenty-four (24) months, Rett: shall decrease byr 5250 per month (1.000 square foot x
S0.25.squarc foot) and Real Estate Tates shall be decreased (or credited, if applicable) for
such twenty-four (24) month period by a pro -rant amount (e -g- in the above example where
2
there is a 1,000 square foot reduction in the size of the Premises, Taxes shall be decreased
during the 24 -month period by 0.11% [ 1,000 -- 872,127 where the percentage is rounded
to the nearest hundredth)). In no event shall Tenant be entitled to any abatement of Rent,
nor shall Landlord be liable to Tenant for any costs, expenses and fees incurred by Tenant
in removing any Alterations, equipment, trade Fixtures or personal property, or modifying
its use of the Premises, as a result of Landlord's exercise of its right to exclude real property
from the definition of Premises. At Landlord's or Tenant's request, Landlord and Tenant
shall execute a written amendment to this Lease and an amendment to any fled
Memorandum of Lease to evidence, reflect or memorialize any exclusion of real property
from the definition of Premises if the exclusion of the real property is for the balance of
the Lease Term.
5. RENT. (a) Commencing on the Commencement Date (also, the "Rent
Commencement Date") and continuing lbr twelve (12) months thereafter, Tenant shall
pay Landlord as monthly rent ("Rent") the amount of $218,031.75 per month (being 5.25
per square feet). On the one year anniversary of the Rent Commencement Date, and each
subsequent annual anniversary of the Rent Commencement Date (including any
anniversaries arising during the Term resulting from Tenant's exercise of an option to
extend the Term of this Lease) (each an "Annual Adjustment Date'), the then -existing Rent
shall be adjusted by an amount equal to (i) the amount, expressed as a percentage, that the
Consumer Price Index -All Urban Consumers -Los Angeles Metropolitan Area, All Items
("CPI"), has increased since the prior Annual Adjustment Date as of the CPI available for
the month closet to the Annual Adjustment Date; multiplied by (ii) the Base Rent payable
by Tenant as of the day immediately prior to the Annual Adjustment Date; provided,
however, that if the CPI had decreased during such period then Base Rent shall not decrease
but shall instead remain the same on that Annual Adjustment Date, it being the Parties'
intent that Base Rent shall never decrease pursuant to this Section 5(a).
(b) Tenant shall pay Landlord Rent no later than the first day of each month ("Due
Date"), without deduction, abatement, set-off, notice or demand, except that Rent due on
a weekend or federal holiday is payable on the next business day following the Due Date.
Rent ibr any period less than a calendar month will be prorated.
(c) In addition to any other remedies available to Landlord for Tenant's failure to
comply with this Lease. (i) Tenant shall pay to Landlord an administrative fee of Fifty
Dollars (550.00) for each instance in which Tenant does not have sufficient funds to cover
payment and all Overdue sums will bear interest at the maximum rate of interest per annum
permitted under Law from the Due Date until paid.
6. SECURITY DEPOSIT. Within ten (10) days after the full execution of this
Lease, Tenant shall provide Landlord with a valid, executed financial standby letter of
credit in the amount of $218,031.75, in the form attached hereto as Exhibit 2, to be used in
lieu of a cash security deposit for the full and faithful performance of the terms of the
Lease. If the then -existing letter of credit ever expires, is non -renewed or is cancelled for
any reason, Tenant shall immediately secure another letter of credit in the same amount
and form as attached hereto as Exhibit 2. If Tenant defaults with respect to any provision
of this Lease, Landlord may present the letter of credit to the issuing bank according to the
terms of the letter of credit and apply all or any part of the proceeds therefrom for the
payment of any sum in default, or for the payment of any other amount which Landlord
may spend or become obligated to spend by reason of Tenant's default, or to compensate
Landlord for any other loss or damage which Landlord may suffer by reason of Tenant's
default. Application ofthe letter ofcredit shall not constitute a cure ofthe default by Tenant
to which the application relates. if any portion of the letter of credit is so applied, Tenant
shall, within five (5) days after written demand therefor, increase the letter of credit in an
amount sufficient to restore the letter oferedit to its original amount. If Tenant shall fully
and faithfully perforin every provision of this Lease to be performed by Tenant, Tenant,
with Landlord's written consent, may terminate the letter of credit following the expiration
or sooner termination of this Lease.
7. TAXES ANIS ASSESSMENTS. Tenant shall be responsible for all real
estate taxes. assessments and charges (including but not limited to special assessment and
bonded debt payments, but not including inheritance, personal income or estate taxes
assessed against Landlord) assessed or levied against or concerning the real property of
which the Premises is a part, and all structures and improvements thereon, ,during the Term
(collectively, the "Real Estate Taxes"). At Landlord's discretion, Tenant shall, within
thirty (30) days after receiving written notice from Landlord, either pay the !teal Estate
Tares to the applicable governmental authority or pay such amount directly to Landlord.
Tenant shall also pay all taxes, assessments and charges assessed or levied against or
concerning all equipment, trade fixtures, personal property and business operations at or
located on the Premises during the Terns (collectively, the "Tenant Taxes"). Tenant shall
file with the applicable taxing authority or)urisdiction all statements necessary to evidence
Tenant's obligation to pay Tenant Taxes. Tenant shall promptly pay such Tenant Taxes
when slue and shall take all steps necessary to prevent Tenant Taxes from becoming a lien
orcricumbrance on the Premises. In addition, Tenant shall also reimburse Landlord, within
thirty (30) days of delivery of Landlord's written notice to Tenant, for all taxes which may
be imposed as a result of this Lease and/or any Rent hereunder. If Tenant fails to pay any
Real Estate Taxes, Tenant Taxes or any other taxes, charges or fees for which Tenant is
responsible her3eundcr, Landlord may, but is not required to, pay the same and Tenant shall
reimburse Landlord for any such payment. Reimbursement shall be made immediately
upon notification by Landlord and any such non-payment by Tenant shall be considered an
act of default tinder the terms of this Lease. If any invoices for Real Estate Taxes shall
cover any period of time prior to or after expiration or termination of this Lease, Tenant's
share of such taxes as reflected on such invoices shall be prorated,
8. UTILITIES. Landlord shall not have any responsibility to provide any
water, electricity, gas, sewage. trash service orother utilities for or to the Premises_ Tenant
shall be responsible for, at its sole cost and expense, for securing, obtaining and paying for
all utilities for the Premises, including, but not limited to all utilities for water, electricity,
gas, sewage and trash service.
9. MECHANIC'S LIENS, Tenant shall keep the Premises free of mechanic's
liens and other liens of like nature (other than liens created or claimed by reason of any
4
work done by Landlord), shall cause all such liens to be promptly released, and shall
indemnify, defend and hold harmless Landlord and any other person or entity that may
hold a fee interest in the Premises against all such liens, any claims which may ripen into
such liens, and against all attorneys' fees and other costs and expenses growing out of or
incurred by reason of or on account of any such lien or claim. Landlord shall have the right
to post and record Notices of Non -Responsibility as provided by Law.
14, USE AND OPERATION OF PREMISES. Tenant shall use the Premises
solely for the operation of parking shipping containers, and for no other use without the
advance written consent of Landlord, which consent Landlord may deny or condition in its
sole discretion. Tenant shall use and occupy the Premises in accordance with all focal,
state and federal laws, statutes, rules, ordinances, codes, required Permits (including any
conditional use permit(s) required for Tenant to use the Premises), regulations and
requirements now or hereafter in effect during the Term of this Lease, and all judicial and
administrative decisions in connection with the enforcement thereof (collectively,
"Law(s)"). Tenant shall also conduct and operate its business on the Premises consistent
with the degree of care that an ordinarily prudent person would use, based upon the
circumstances, for the safety of persons and personal property on and near the Premises.
Tenant shall also maintain the Premises in a neat, clean and reputable manner. Tenant shall
not allow vehicles on those portions of the Premises described as "non -useable slope area"
on Exhibit 1. Tenant shall not commit, or suffer to be committed, any waste upon the
Premises, Tenant shall be solely responsible, at its sole cost and expense, for all security at
and concerning the Premises, and shall operate and maintain the Premises in a secure
manner so that criminal activity is adequately deterred at the Premises and all persons
thereat are adequately protected from injury, harm and loss. Notwithstanding any other
provision of this Lease, (a) Landlord makes no representation or warranty that this Lease
does not violate California's Subdivision Nlap Act, California Gov't Code Sections 66410
et seq., and (b) as between Landlord and Tenant, Tenant shall have the sole responsibility
for ensuring neither this Lease nor any use of the Premises pursuant to this Lease violates
California's Subdivision Map Act.
I I. S[GNAGE. Tenant may install and maintain on the Premises, at its own
cost and expense, up to two (2) professionally made signs depicting Tenant's trade name
and/or logo ("Tenant's Signs)"), which signs, and locations thereof, must be approved by
Landlord in writing. At its own expense, Tenant shall obtain any necessary Permits to
install Tenant's Signs and shall comply with all Laws and applicable restrictive covenants,
if any, pertaining thereto. Tenant shall not erect any other sign or advertisement at the
Premises without Landlord's prior written consent. Tenant shall be solely responsible for
maintaining Tenant's Sign(s) in first-class condition.
12. CONDITION OF PREMISES. Pursuant to, inter alfa, California Health &
Safety Code Section 25359.7, Landlord hereby advises Tenant that Hazardous Substances
(as defined below) may be located on, at or under the Premises. Landlord reserves the right
to access to any monitoring wells that may be located on the Premises and Tenant agrees
that its operations shall not interfere with such monitoring wells. EXCEPT AS STATED
IN THE IMMEDIATELY PRECEDING SENTENCE, LANDLORD MAKES NO
WARRANTIES OR REPRESENTATIONS, EXPRESSED OR IMPLIED, WITH
RESPECT TO THE PRESENT CONDITION OF THE PREMISES NOR ITS
SUITABILITY FOR TENANT'S INTENDED USE OF THE PREMISES. TENANT
ACCEPTS THE PREMISES IN ITS PRESENT CONDITION AND STATE OF REPAIR,
AND "AS IS". TENANT FURTHER WAIVES ALL WARRANTIES, EXPRESS OR
IMPLIED, WITH REGARD TO THE PHYSICAL CONDITION OF THE PREMISES
AND SPECIFICALLY, WITHOUT LIMITATION, WAIVES THE WARRANTY OF
SUITABILITY WITH REGARD TO THE PREMISES.
13. ENVIRQN . (a) As used in this Lease, the term "Hazardous
Substances" shall mean; (a) any product, substance, chemical, material, or waste defined
as or included in the definition of "hazardous substances," "hazardous wastes," "toxic
substances,' "contaminants" or "pollutants;" or words of similar import under any Law; (b)
any petroleum, including crude oil or any fraction thereof, or petroleum product, natural
gas, natural gas liquids, liquefied natural gas or natural gas product, or synthetic gas or
synthetic gas mixtures, or (c) any other chemical, material, waste or substance; (i) which
is in any way regulated by any Law, including mixtures thereof with ether materials, or (ii)
that affect or pose a threat to human health or the environment.
(b) Tenant shall not use, store, transport, or dispose of Hazardous
Substances in, on or about the Premises, provided however, Tenant may use, store and
transport (but not dispose oft Hazardous Substances in quantities and types reasonably
required in the normal course of Tenanfs business on the Premises so long as (a) the
activity does not expose the Premises or adjacent or neighboring properties to any unusual,
unreasonable or significant risk of contamination or damage, and (b) such use, storage and
transport are in full compliance with all Lanes.
(c) If Tenant knows, or has reasonable cause to believe, that it Hazardous
Substance has been released or discharged at, in, on, under or about the Premises during
the Term, Tenant shall promptly give written notice of such fact to Landlord. Tenant shall
also promptly give Landlord a true copy of any statement, report, notice, claim, action or
proceeding given to, or received from, any governmental authority or private party
concerning the presence, spill, release, or discharge of, or exposure to, any Hazardous
Substance in. on, under or about the Premises during the Lease.
(d) Tenant agrees to pay any and all costs and expenses (collectively,
"Environmental Costs") for any environmental assessment, investigation, clean-up and
remediation related to or necessitated by the presence, spill, release, disposal or discharge
of Hazardous Substances at, on or under the Premises that (1) occur during the Terror of
this Lease, (2) waslwere caused by Tenant, or its employees, agents. contractors or invitees,
and (3) w-asfwere not caused by Landlord, its employees, agents or contractors or by
neighboring property owner(s) or their respective employees, agents or contractors, and
further agrees that none of the Environmental Costs arising from or resulting from all three
(3) events/conditions shall be the responsibility of Landlord. On the other hand, and for
the avoidance of doubt, it is agreed and understood that Tenant's obligation to pay for
Environmental Costs pursuant to the first sentence of this subsection shall not arise or apply
6
to Tenant unless events/conditions (1), (2) and (3) above exist/occur. Notwithstanding any
other provision of this Lease, under no circumstances shall Tenant enter into any settlement
agreement, consent decree or other compromise with respect to any Hazardous Substances
in any way connected to or concerning the Premises without first obtaining Landlord's
written consent, which consent may be given, withheld or conditioned in Landlord's sole
and absolute discretion. Tenant's responsibility for Environmental Costs survives
termination or expiration of this Lease.
(e) Notwithstanding any other provision of the Lease, (i) in no event shall
Tenant damage, destroy, alter, use or prevent access to any wells (including monitoring
wells) on the Premises, nor shall Tenant allow or permit any of its contractors, invitees or
agents to do the same, and (ii) Landlord and its contractors and agents shall always have,
at no fee, cost or charge, full and complete access to the Premises to inspect, monitor,
sample, maintain, repair, replace and/or close any wells (including monitoring wells) on
the Premises.
14. ALTERATIONS. MAINTENANCE AND REPAIRS. (a) Tenant shall not
make any upgrades, changes, modifications, remodels or alterations to the Premises,
including adding, constructing, removing or altering any structures, improvements or
fixtures thereat (collectively, "Alterations") without the prior written consent of Landlord,
which consent Landlord may withhold or condition in its sole discretion. If Landlord so
consents, Landlord shall have the right to observe the construction, installation, removal or
alteration of such Alterations. Tenant agrees that neither Landlord's consent to nor
observation of any Alteration imposes any liability on Landlord for the Alteration or
occurrences arising therefrom. Tenant, at its sole cost and expense, shall secure all Permits
in connection with any proposed Alteration.
(b) Title to any and all improvements, structures and fixtures at or part of
the Premises as of the Rent Commencement Date (and/or subsequently installed or placed
there by "Tenant) are and shall be vested with Landlord (notwithstanding any consent
provided by Landlord pursuant to subsection (a)).
(c) Tenant, at its sole cost and expense, shall maintain the Premises and
makc all repairs necessary to the Premises during the `term of this Lease, including without
limitation till repairs needed to maintain the Premises in compliance with any Law and/or
this Lease.
(d) Landlord shall not have any obligation to make any Alterations to the
Premises.
15. RELATIONSHIP OF PARTIES. This Lease does not create a partnership,
joint venture, agency relationship or employment relationship between Landlord and
Tenant or Tenant's employees.
16. PERMITS. At Tenant's sole cost and expense (and in Tenant's name unless
directed by Landlord otherwise), Tenant shall secure, obtain and maintain all licenses,
7
registrations, and permits (collectively "Permits`) necessary for Tenant's use or
occupation of the Premises (including but not limited to any conditional use permit).
Tenant shall not submit any applications or plans for any Permit without Landlord's
advance written consent, which consent Landlord may withhold or Condition in its sole
discretion. Landlord shall not be rewired to sign any document in connection with
'T'enant's efforts to secure any Permit that requires or obligates Landlord to be or serve as
an indemnitor, guarantor or surety, which creates or imposes any condition or covenant
that landlord deems unacceptable in sale discretion or which requires Landlord to pay any,
fee or charge.
IT ACCESSIBILITY LAWS, As between Landlord and Tenant, with respect
to the Premises, Tenant shall be responsible for compliance with the Americans with
Disabilities Act ("ADA"), the California Disabled Persons Act, the California Unruh Civil
Rights Act, the California Building Code, and all similar or related Laws (collectively,
"Accessibility Laws"). The term "Law(s)" shall include all Accessibility Laws. Tenant
shall defend and indemnify Landlord from and against any and all suits, claims, causes of
actions, demands, fees, costs, expenses, judgments, fines, penalties and assessments
against or incurred by Landlord as a result of any actual or alleged violation: of any
Accessibility Law pertaining to the Premises and/or due to any act, omission or fault of
Tenant or Tenant's employees, agents, or contractors
18. SURRENDER. Prior to the expiration or any sooner termination of this
Lease, Tenant shall remove Tenant's equipment, trade fixtures and personal property, if
any, from the Premises, and quit and surrender the Premises to Landlord in good order,
condition and repair, ordinary wear and tear excepted. If Tenant fails to so remove any of
Tenants equipment, trade fixtures or personal property from the Premises, Landlord may
deem all or any part of Tenant's equipment. trade fixture and personal property to be
abandoned, and title to the same, shall at Landlord's sole discretion, be deemed to be
immediately vested in Landlord without any compensation due Tenant.
19. HOLDOVER. if Tenant does not vacate the Premises upon the expiration
or sooner termination of this Lease, Tenant will, as determined by Landlord, become a
tenant at will or tenant at sufferance. No holding over by Tenant, whether with or without
the consent of Landlord, will extend the Term of this Lease. Notwithstanding any other
provision of this Lease, ifTenant remains in possession ofthe Premises after the expiration
or sooner termination of this Lease, such holding over shall be at a Rent equal to 15f1°/D of
the Rent during the last month of the Term prior to such holding over commencing.
20. INDEMNIFICATION. (a) To the fullest extent permitted by Law, Tenant
shall indemnify and defend Landlord, its parents, affiliates and subsidiaries, and all of'their
respective managers, members, directors. officers, employees, invitees, customers, and
agents (collectively, "Indemnified Parties"j from and against any and all claims,
demands, causes of action, suits, damages, losses, judgments, liens, orders, directives,
fines, penalties, and expenses including, without limitation, attorneys' fees and related legal
costs, whether incurred for an Indemnified Party's primary defense or for enforcement of
its indemnification rights (collectively, "Claim(s)"), including, without limitation, any
8
Claim for harm, injury, or death to any person, or damage to property or to the environment
arising out of or in connection with any of the following matters:
i. Tenant's performance or nonperformance under this Lease
andor Tenant's breach of this Lease;
ii. any action or omission of Tenant, Tenant's employees,
agents, contractors or assigns or third parties at the Premises; and/or
iii, the operation of Tenant's business at the Premises.
iv. any alleged or actual violation of California's Subdivision
Map Act, California Government Code Sections 66410 e1 seq. based on this Lease
andior any use of the Premises by Tenant.
(b) Tenant's obligation to indemnify and defend the Indemnified Parties
extends to any Claim caused by the concurrent or contributory negligence or fault of an
Indemnified Party but with respect to any Indemnified Party, not to a Claim that is
shown by a final non -appealable judgment to have been caused by the Indemnified
Party's comparative negligence
(c) Tenant shall promptly advise Landlord in writing of any Claim or
Potential Claim.
(d) Landlord may participate in the defense and settlement of any Claim
kith attorneys of the Indemnified Party's selection without relieving Tenant of any
obligations under chis section.
(e) The insurance requirements of this Lease do not limit or restrict in any
way Tenant's defense or indemnity obligations under this section.
(f) Tenant's obligations under this section survive termination or
expiration of this Lease.
21, REMEDIES. If Tenant defaults in timely payment of Rent or in any other
obli;ation under this Lease and fails to remedy the same within ten (10) days after receiving
written notice thereof from Landlord; or if Tenant voluntarily or involuntarily enters
insolvency or bankruptcy; or possession of the Premises is vested in any other party, by
operation of law or otherwise; or if Tenant abandons the Premises; Landlord may, at its
option and with or without notice or legal process, terminate this Lease and reenter and
repossess the Premises, without prejudice to any of its other rights or remedies hereunder
or otherwise available at Law. Tenant shall reimburse Landlord on demand for all
reasonable costs (including attorneys' fees) incurred by Landlord in enforcement of any of
its rights or remedies against Tenant. Landlord's right to require strict performance of
Tenant's oblieations hereunder shall not be affected by any previous waiver, forbearance
or course of dealing. All rights and remedies of Landlord under this Lease are without
limitation to all of Landlord's rights and remedies under Law.
22. INSURANCE. (a) Tenant shall maintain, at its sole cost and expense, at all
times during the Term of this Lease, the following insurance coverage with providers
satisfactory to Landlord with limits not less than those limits set forth below (the
"Insurance');
i. Broad form Commercial General Liability Insurance with limits
of at least $2,000,000 each occurrence and $2,000.0W general aggregate.
ii. Business Automobile Liability Insurance covering all vehicles
used in Tenant's operations with limits of liability of bodily injury $2,000,000 each
person, $2,000,000 each accident; property damage $2,000,000; with a combined
single limit of no less than $2,000,000 for bodily injury and property damage, and;
iii. Workers! Compensation Insurance as required by Law covering
all employees of Tenant.
(b) Tenant shall erasure that all policies for all Insurance it is required to
carry hereunder. (I) provide a waiver of subrogation in favor of Landlord where
permissible by Law, (2) allow for the separation of insureds, and (3) provide For written
notice of cancellation or material change to all additional insured and loss payees. Notice
of cancellation or change will not affect any Insurance until thirty (30) days after Landlord
receives written notice. Tenant hereby contractually waives all rights of subrogation
against Landlord to the extent permitted by Law.
(c) Tenant shall ensure that the Insurance required in this Lease, and
each certificate evidencing the Insurance issued to Tenant, names Landlord as an additional
insured.
(d) Prior to the Rent Commencement Bate and any time during the
Term of this Lease as necessary in Landlord's sole and absolute discretion, Tenant shall
provide Landlord with certificate of Insurance evidencing Tenants compliance with the
Insurance requirements in this Lease. Tenants failure to provide certificates evidencing
the required Insurance coverage or to purchase Insurance coverage in compliance with this
Lease will not relieve Tenant of its obligations hereunder.
(e) The failure of Tenant to provide certificates confirming compliance
with the Insurance requirements of this Lease or to purchase insurance coverage in
compliance with this Lease shall not relieve Tenant of its obligations hereunder.
23. FIRE AND CASUALTY. (a) If, as the result of any fire or casualty not
caused by the negligent or intentional act ofTenant, the Premises is rendered unfit for use
and occupation by Tenant, Landlord may elect at its sole option and at its own expense, to
rebuild or restore the Premises in which case. In such case, the Rent will be abated until
the Premises are restored to substantially the same condition as existed immediately before
the casualty, but the Term hereof shall not be extended.
U
(b) If, as the result of any Fre or other casualty, the Premises is damaged
and Landlord elects not to restore the Premises, Landlord may terminate this Lease by
giving written notice to Tenant vvithin sixty (60) days of the casualty toss.
(c) If the Premises are made substantially unfit for use by Tenant by any
fire or casualty not caused by the negligent or intentional act of Tenant, either Landlord or
Tenant may terminate this Lease by giving the other notice within thirty (30) days after
such unfitness commences.
24. CONDEMNATION. If the Premises should be taken for any public or
quasi -public use under Law, or by purchase in lieu thereof, this Lease shall terminate when
the'Fenant's possession, use or operation of the Premises as a result thereof ceases. If only
a part of the Premises is so taken or conveyed in lieu thereof, Landlord, in its sole and
absolute discretion, may but is not required to terminate this Lease, and Rent shall be abated
in the same proportion the square footage so taken or conveyed bears to the total square
footage of the Premises prior to such taking or conveyance. All compensation awarded for
any taking (or the proceeds of env sale in lieu thereof) of the Premises (including but not
limited to any compensation or proceeds for loss of leasehold bonus value) shall be the
property of Landlord, except Tenant shall be entitled to claim compensation from the
condemning authority for any relocation and any taking of Tenant's trade fixtures,
equipment and other personal property.
25. NOTICES. Any notice required under this Lease shall be in writing and sent
to the address(es) below, shall be sent either certified mail using the United States Postal
Service or overnight delivery using a reputable carrier or overnight mail, and shall be
deemed given, provided or received when actually received by the recipient(s). Any
address(es) for notice may be changed by written notice delivered as provided herein,
If to Landlord: Tesoro Logistics Operations LLC
19100 Ridgewood Parkway
Attn, General Counsel
San Antonio, Texas 78259
and Tesoro Logistics Operations LLC
6 Centerpointe Drive
La Palma, CA 90623
Atm. Director Business Development
If to Tenant: Shippers Transport Express, Inc.
1105 E. Sepulveda Boulevard
Carson, California 90745
Attar Kevin Baddeley, President
With a copy to: Carrix. Inc.
1131 S.W. Kiickitat way
Seattle, Washington 98134
Attu: President
26. SUB{3RDP*IATION. This Lease shall be subject and subordinate to all
mortgages, deeds of trust, liens, easements, encumbrances and other matters of records
recorded prior to the date this Lease first becomes fully -executed, and to all renewaK
replacements and extensions thereof, as well as all mortgages, deeds of trust, liens,
easements, encumbrances and other matters of record recorded after the date this Lease
first becomes fully -executed; provided, however, that the subordination of this Lease to
any mortgage, deed of trust, lien, easement, encumbrance or other matter of record first
recorded after the date this Lease first becomes fully -executed is conditioned upon the
execution by Landlord, Tenant and the lenderlencumbrances of a subordination,
nondisturbance and attomment agreement in a form reasonably acceptable to the parties
and which shalt meet the fallowing requirements: (a) it shall provide that so long as Tenant
is not in default under this Lease (beyond any applicable cure or grace period provided in
the Lease), Tenant's leasehold estate and Tenant's rights under this Lease, including but
not limited to possession, occupancy and use of the Premises in accordance with this Lease,
shall remain undisturbed and shall survive any foreclosure, transfer in lieu of foreclosure
or other enforcement of the mortgage or deed of trust; (b) there shalt be no change in the
terms of this Lease, no diminution of Tenant's rights provided for in this Lease, and no
additional liability of Landlord; and (c) the documentation shalt be otherwise reasonably
satisfactory to Landlord. In the event of foreclosure or the exercise of the power of sale
under any lien of any mortgage, deed of trust or Cather security device to which this Lease
is subordinate, Tenant agrees to attom to the purchaser of the Premises at such foreclosure
or sale and recognize such purchaser as "Landlord" under this lease.
27. ASSIGNMENT. Tenant may not assign this Lease or sublease any portion
of the Premises without Landlord's prior written consent, .which consent may be withheld
or conditioned in Landlord's sole and absolute discretion. Any attempt by Tenant to assign
this Lease or sublease the Premises without Landlord's prior consent shall be null and void
under the terms of this Lease. All covenants and obligations as contained within this Kase
shall bind and extend and inure to the benefit of the successors and permitted assigns of
Landlord and Tenant. Landlord shall have the right to transfer and assign, in whole or in
part, all of its rights and obligations hereunder and in the Premises provided such transferee
or assignee assumes all of Landlord's obligations hereunder in writing. in such event, no
further liability or obligation shat I thereafter accrue against the Landlord hereunder_
28. SUCCESSORS. This Lease inures to and is binding upon and enforceable
against the Parties' respective successors and permitted assignees.
29. INTEREST. Interest shall accrue on any amount due Landlord by Tenant
under this lease from the date of the event triggering the indebtedness to Landlord at a rate
equal to the lesser of (i) eighteen percent (18%) per annum, or (ii) the maximum rate
permitted under Law.
I?
30. TIME OF ESSENCE. Time is of the essence with respect to each and every
provision of this Lease. In the event the time of performance of any matter to be performed
by Landlord or Tenant falls on a Saturday, Sunday, or a legal holiday under the Laws of
the United States or California, the time ofperformance for such matter shall be extended
until the next business day that is not a Saturday. Sunday, or legal holiday.
31. PROHIBITED PERSONS AND TRANSACTIONS. Landlord and Tenant
each hereby represent and warrant to the other that they shall at all times during the Term
of the Lease remain in compliance with the regulations of the Office of Foreign Asset
Control ("OFAC") of the Department of the 7 reasury (including those named on OFAC's
Specially Designated and Blocked Persons List) and any statute; executive order (including
the September 24, 2001 Executive Order Blocking Property and Prohibiting Transactions
with Persons Who Commit, Threaten to Commit, or Support Terrorism), and other
governmental action relating thereto.
32_ BROKERS. Each Party represents it has taken no action that would obligate
either Party to pay a broker's or finder's fee on this transaction, and each Party shall
indemnify, defend and hold harmless the other Party from and against any claim or liability
for any such fee.
33. CONFIDENTIALITY: RECORDING. Except for disclosures required by
law and except as reasonably necessary to enforce or perform under this Lease, Tenant
agrees (a) not to disclose this Lease to any third party except as specifically authorized by
Landlord in writing, and (b) to use all reasonable precautions, consistent with Tenant's
treatment of its own confidential information, to prevent the unauthorized use or disclosure
of this Lease. This Lease may not be recorded. However, Tenant may, at its sole cost and
expense, record a Memorandum of Lease regarding this Lease, provided, however, that the
language and content of the same may only disclose the Parties, the Premises and the Term
(including the options to extend the Term). Upon the expiration or sooner termination of
this Lease, Tenant shall, at any time requested by Landlord, execute a recordable quitclaim
or similar document confirming the expiration or sooner termination ofthis Lease.
34. ESTOPPEL CERTIFICATE. Tenant shalt at any and all times and without
charge or expense to Landlord, upon not less than ten (10) days prior written notice from
Landlord; execute, acknowledge and deliver a statement in writing (i) certifying that this
Lease is unmodified and in full force and effect (or, if modified, stating the nature of such
modification and certifying that this Lease, as so modified, is in full force and effect) and
the date to which the Rent and other charges are paid in advance, if any, and (ii)
acknowledging that there are not any uncured defaults of which the Tenant has knowledge,
or specifying such defaults if any are claimed. Any such statement may be conclusively
relied upon by any prospective purchaser or encumbrancer of the Premises.
35. WAIVER. A waiver of any term, duty, obligation, covenant, condition,
right or agreement herein contained shall not be construed as a waiver of a further breach
of or default under or regarding the same or of any other term, duty, obligation, covenant,
13
condition. right or agreement. and the vonsirni or approval by Landlord to or ofany act by
Tenant requiring I.andlfW*-. consent or approval shall not be deemed to waive or render
unnecessary Landlord's consent or approval to any subsequent similar act by Tenant.
3b. APPROVAL AND EXECU 1'1(331 BY LANDLORD. 'Ibis Lease shall not
be binding on Landlord until approved and signed on its behalf by a ditty authorized officer
or representative.
37. GOVERNING LAZY. Me Laos of Cal[famira shall govern this Lease and
its performance.
38. HEADINGS. The section headings in this Ixase are for reference and
convenience only and dor not alter. amend or odmwise affect the terms, conditions, and
agreements set out herein.
39. SEVERABILITY- The invalidity or unenforceability of any provisions of
this Lease stall in no i3aj affiect the validity or enforceability of any other provision. Any
invalid or unenfor cable provision shall be deemed se,-ered from this Lease and the balance
of the Lease shall be construed and enforced as if the Lease did not contain the particular
provision or provisions held to be in -valid or unenforceable.
40. ENTIRE AGREE1y1Eh7. This Lie contains the entire ugreement between
the Parties Kith respect to the subject matter hereof. No amendment or modification of
this Lease shall be vtrlid unless in writing and signal by a duly authorized representative
of"each Party.
41. CIVIL CODE SECTION 1938. Pursuant to California Civil Code Section
1938, Landlord hereby notifies Tenant that the Premises [ j has [X} has not undergone
inspection by a C:crtified Access Specialist (CASA), and if the Premise.% has undergone
such an inspection, the Premises [ j has [X) has not been determined to raged all
construction -related acces-dhilikv %landard.S pursuant to California Civil Code Section
_55.53
ISignatures on Nxt PagcI
14
This Lease is executed by the Parties on the dates set forth below.
LANDLO
By:
Name
Title:
Date:
CS OPERATIONS LLC
Don J. Sorensen
i- _ T
President
Nrasr rt76f
'TENANT: SHIPPERS TRANSPORT EXPRESS, INC.
Ey: _S
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Name- 1 hj
Title:
Date: j
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Exhibit 2 to Lease Agreement
STANDBY LETTER OF CREDIT
Letter of Credit
Date:
Number:
Amount (USD) $218,031,75
Expiration Date
Beneficiary:
Name
Tesoro Logistics Operations LLC clo
Marathon Petroleum Company LP
Street Address
539 South Main Street
City, State, Zip
Findlay, Ohio 45840
Attn:
Attn: Commercial Credit Manager
Telecopier
419421.3153
Issuer
Name
Street Address
City, State, Zip
Attention;
Teiecopier
Applicant
Name
Street Address
City, State, Zip
Shippers Transport Express, Inc
This is an ISP98 standby letter of credit. Payment will be made upon presentation of your signed and dated demand for
payment referring to this letter of credit and stating either (1) that the amount demanded represents an unpaid indebtedness
or other obligation of the Applicant to the Beneficiary or (2) that the Beneficiary has received notice that this letter of credit
will not be extended and has not received a letter of credit or other security acceptable to it as a replacement Presentation
may be made by telecopy from and to the above telecopier numbers.
We will notify you of any defects in your presentation within a reasonable time not to exceed three business days.
Upon request, payment will be made by wire transfer of immediately available funds, free of any charges.
This tetter of credit will be automatically extended without amendment for one year from the above expiration date, and
thereafter on an annual basis on each anniversary of the above expiration date, unless at least 60 days prior to such
expiration date we send you a written notice of non -extension by certified mail, postage prepaid and return receipt
requested, to the address and attention party listed above.
Issuer's Authorized Signature
Signer Name
Title
Date