BUILD-TO-SUIT FACILITY
ABSOLUTE NET LEASE
ARTICLE ONE: BASIC TERMS
This Article One contains the Basic Terms of this Lease between the
Landlord and Tenant named below. Other Articles, Sections and Paragraphs of the
Lease referred to in this Article One explain and define the Basic Terms and
are to be read in conjunction with the Basic Terms.
Section 1.01. DATE OF LEASE: October 3, 1989.
Section 1.02. LANDLORD: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Address of Landlord:
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Section 1.03. TENANT: PACIFIC RICE PRODUCTS, INC., A CALIFORNIA
CORPORATION
Address of Tenant:
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
Section 1.04. PROPERTY: An approximately but not greater than 60,000
square foot building located on the northernmost 5.65 PLUS OR MINUS acre
portion of Assessor's Parcel Number ▇▇-▇▇▇-▇▇ located on Santa ▇▇▇▇▇ Court
together with easements for ingress and egress to and from the building to
the nearest public highway(s), and easement for parking purposes in
accordance with Section 1.12, in Yolo County, California further described in
Exhibit "A".
Section 1.05. LEASE TERM: Ten (10) years, COMMENCING UPON SUBSTANTIAL
COMPLETION, or such other date as is specified in this Lease, and ENDING ON MAY
31, 2000.
Section 1.06. PERMITTED USES: (See Section 5.01). Any reasonable and legal
use consistent with current zoning, Tenant's current business and which is
permitted by reason of any laws, rules and regulations of local, state and
Federal governments, districts, agencies, commissions and boards, and other
standard and rule-making bodies.
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Section 1.07. LANDLORD'S BROKER: (See Article Fourteen) Landlord has not
entered into an agreement for payment of commissions currently or in arrears to
any broker.
Section 1.08. TENANT'S BROKER: (See Article Fourteen) ▇▇▇▇▇▇ has not
entered into an agreement for payment of commissions currently or in arrears to
any broker.
Section 1.09. COMMISSION PAYABLE TO BROKERS: (See Article Fourteen) In
conjunction with the above Sections 1.08 and 1.09, no agreements exist for
commissions payable to brokers.
Section 1.10. INITIAL SECURITY DEPOSIT: [See Paragraphs 3.03 and 13.03
(c)] Thirteen Thousand Five Hundred Thirty Dollars Even ($13,530.00).
Section 1.11. VEHICLE PARKING SPACES ALLOCATED TO TENANT: at lease
fifty-two (52) spaces, including visitor parking, or per applicable Code.
Section 1.12. RENT AND OTHER CHARGES PAYABLE BY TENANT: (a) BASE RENT:
Thirteen Thousand Five Hundred Thirty Dollars Even ($13,530.00) per month for
the first sixty (60) months, as provided in Section 3.01, and shall be increased
to Fifteen Thousand Nine Hundred Thirty Dollars Even ($15,930.00) for months 61
through 120 after the Commencement Date; (b) OTHER PERIODIC PAYMENTS: (i) Real
Property Taxes (See Section 4.02) ; (ii) Utilities (See Section 4.03) ; (iii)
Insurance Premiums. (See Section 4.04) ; Multiple Tenant Buildings (See Section
4.05) and other such payment that are required of a triple net tenant.
Section 1.13. DESCRIPTION AND CONSTRUCTION OF IMPROVEMENTS BY LANDLORD:
(a) DESCRIPTION OF IMPROVEMENTS. Landlord shall at Landlord's expense
construct certain improvements on or about the property (the "Work") in
accordance with certain plans and specifications to be prepared by Landlord for
approval by Tenant, a summary of which is attached hereto as Exhibit "B" ("Plans
a Specifications").
(b) COMPLETION OF THE WORK. Landlord shall use all reasonable efforts to
complete as promptly as possible the work described in Exhibit "B" prior to
the scheduled commencement date set forth in Section 1.05 of the Lease.
Notwithstanding the date set forth in Section 1.05, the commencement date shall
be the date upon which the work is substantially completed and the Property and
completed improvements are delivered to Tenant. For the purposes of this
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Lease, the work shall be conclusively deemed to be substantially completed when
all work described in the final plans is completed except for minor items of
work, e.g. pickup work which can be completed with only minor interference with
▇▇▇▇▇▇'s conduct of business on the property. If Landlord fails to deliver
possession of the Property with the improvements completed within ninety (90)
days of the date set forth in Section 1.05 hereof, Landlord shall be in default
hereunder unless such delay is directly caused by the acts of Tenant or Force
Majeure.
(c) CHANGES. Except as otherwise provided in Section 15.16, ▇▇▇▇▇▇▇▇'s
obligation to prepare the property for ▇▇▇▇▇▇'s occupancy is limited to
completion of the work set forth in Exhibit "B". If Tenant requests any change,
addition, or alternation ("Changes") in such plans and specifications or in the
construction of the work, Landlord shall promptly give Tenant an estimate of the
cost of such changes and the resulting delay in the delivery of the property to
Tenant. Within three (3) days after receipt of such estimates, Tenant shall give
Landlord written notice of whether or not Tenant elects to proceed with such
changes. If ▇▇▇▇▇▇ fails to notify Landlord in writing, Landlord at its election
may either:
1. Make such changes at Tenant's expense; or
2. Complete the work without making such changes. Tenant shall pay or
reimburse Landlord for the cost of such changes within thirty (30) days after
billing. Any delay caused by Tenant's request for any changes or from the
construction of any changes shall not in any event delay the Commencement Date
which shall occur on the date it would have occurred but for such changes. The
work shall be the property of Landlord and shall remain upon and be surrendered
with the property upon the expiration of the Lease term.
(d) OPTION TO CANCEL. Both Tenant and Landlord recognize that this Lease
has been executed prior to ▇▇▇▇▇▇'s approval of plans and specifications. Tenant
also recognizes that Landlord will be incurring substantial costs to expedite
the construction of the building. Tenant shall have the right to cancel this
contract anytime prior to approving plans and specifications. If Tenant does
cancel this contract, Tenant shall reimburse Landlord for all documented
reasonable expenses.
ARTICLE TWO: LEASE TERM
Section 2.01. LEASE OF PROPERTY FOR LEASE TERM. Landlord leases the
Property to Tenant and Tenant leases the Property from Landlord for the Lease
Term. The Lease Term is for the period stated in Section 1.05 above and shall
begin and end on the dates specified in Section 1.05 above, unless the beginning
or end of
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the Lease Term is changed under any provision of this Lease, in which case the
expiration of the Lease Term shall be adjusted accordingly. The "Commencement
Date" shall be the date specified in Section 1.05 above for the beginning of the
Lease Term, unless advanced or delayed under any provision of this Lease, in
which case the expiration of the Lease Term shall be adjusted accordingly,
however payment of the first (1st) month's Base Rent under Paragraph 1.12 and
the Initial Security Deposit under Paragraph 1.10 shall occur upon execution of
the Lease.
Section 2.02. DELAY IN COMMENCEMENT. Landlord shall not be liable to
Tenant if Landlord does not deliver possession of the Property to Tenant on the
first date specified in Section 1.05 above. ▇▇▇▇▇▇▇▇'s non-delivery of the
Property to Tenant on that date shall not affect this Lease or the obligations
of Tenant under this Lease. However, the Commencement Date shall be delayed
until possession of the Property is delivered to Tenant. The Lease Term shall be
extended for a period equal to the delay in delivery of possession of the
Property to Tenant, plus the number of days necessary to end the Lease Term on
the last day of a month. If Landlord does not deliver possession of the Property
to Tenant within ninety (90) days after the date first specified in Section 1.05
above, Tenant may elect to cancel this Lease by giving written notice within
thirty (30) days after the 90-day period ends. If Tenant give such notice, the
Lease shall be canceled and neither Landlord nor Tenant shall have any further
obligations to the other. If Tenant does not give such notice, Tenants' right to
cancel the Lease shall expire and the Lease Term shall commence upon the
delivery of possession of the Property to Tenant. If delivery of possession of
the Property to Tenant is delayed, Landlord and Tenant shall, upon such
delivery, execute an amendment to this Lease setting forth the Commencement Date
and expiration date of the Lease. Tenant's aforementioned right to cancel and
the effect of any other delays in commencement shall be subject to Section
15.05(a) regarding "Force Majeure."
Section 2.03. EARLY OCCUPANCY. If Tenant occupies the Property prior to
the Commencement Date except if such occupancy is reasonably necessary in
connection with any preparation of the Property by Tenant for Tenant's
occupancy, and provided ▇▇▇▇▇▇ does not interfere with Landlord's work in
progress or construction, and further provided that Tenant use the utmost care
for the safety of its employees and agents and others on the Property in
allowing then early occupancy of the Property (failure to adhere to the above
provisions shall terminate any right Tenant has to early occupancy), ▇▇▇▇▇▇'s
occupancy of the Property shall be subject to all of the provisions of this
Lease. Early occupancy Of the Property shall not advance the expiration date of
this Lease.
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Section 2.04. HOLDING OVER. Tenant shall vacate the Property upon the
expiration or earlier termination of the Lease. Tenant shall reimburse Landlord
for and indemnify Landlord against all damages incurred by Landlord resulting
from any delay by ▇▇▇▇▇▇ in vacating the Property. If Tenant does not vacate the
Property upon the expiration or earlier termination of the Lease and Landlord
thereafter accepts rent from Tenant, ▇▇▇▇▇▇'s occupancy of the Property shall
be a "month-to-month" tenancy, subject to all of the terms of this Lease
applicable to a month-to-month tenancy, except that the Base Rent then in effect
shall be increased by twenty-five percent (25%).
Section 2.05. OPTION TO RENEW. Lessee shall have the option to renew this
Lease for two (2) additional five (5) year periods provided ▇▇▇▇▇▇ has complied
with each of the following conditions: (1) At the time of exercise of the option
in accordance with the notification provisions set forth hereinbelow, Lessee is
not in default of any of the terms and conditions of this Lease; and (2) Lessee
has not been in default of any term or condition of this Lease within the four
(4) month period immediately preceding the required notification of exercise.
Lessee must exercise its option to renew by giving written notice ninety (90)
days prior to expiration of this Lease of its intention to extend for each of
the additional five (5) year periods. All the terms and conditions shall remain
the same with the exception of rent, which shall be ninety-five percent (95%) of
the Fair Market Rent. For purposes hereof, "Fair Market Rent" shall mean the
first year's effective rental rates then being received for like premises in
like buildings in the area for leases of approximately five years and on
otherwise substantially similar terms of this Lease. For purposes hereof,
adjustments to such effective rental rates applicable after the first year of
the term shall not be taken into account in determining Fair Market Rent.
Landlord and Tenant shall have thirty (30) days after Tenant notifies Landlord
of the exercise of its Option to Extend in which to agree to the Fair Market
Rent.
If the parties cannot agree to the Fair Market Rent within such thirty (30)
day period, each party shall appoint an Appraiser (hereinafter defined) and
shall give notice to the other party of the identity of the Appraiser within ten
(10) days after the expiration of said thirty (30) day period. For purposes
hereof, "Appraiser" means a real estate broker or MAI designated appraiser, in
either case with not less than five (5) years of full time commercial appraisal
or brokerage experience in the area in which
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the Premises are located and with no prior business dealings with the party
appointing such Appraiser.
If either party fails to appoint an Appraiser, the sole Appraiser appointed
shall make the determination of Fair Market Rent. If two Appraisers are
appointed, they shall immediately meet and attempt to agree upon the Fair Market
Rent. If they are unable to do so within fifteen (15) days after their first
meeting, they shall jointly appoint a third Appraiser to make such
determination, and the third Appraiser shall make such determination within ten
(10) days of his/her appointment. If the two Appraisers are unable to agree upon
such third Appraiser, either party may petition the Presiding Judge of the
Superior Court of Yolo County to appoint such third Appraiser.
The determination of Fair Market Rent as provided herein shall be binding
upon the parties hereto. Promptly upon such determination, the parties shall
execute an amendment specifying ninety-five percent (95%) of the Fair Market
Rent.
ARTICLE THREE: BASE RENT
Section 3.01. TIME AND MANNER OF PAYMENT. Upon execution of this Lease,
Tenant shall pay Landlord the Base Rent in the amount stated in Paragraph
1.13(a) above for the first month of the Lease Term, and the Security Deposit in
the amount stated in Paragraph 1.11. On the first (1st) day of the second month
of the Lease Term and each month thereafter, Tenant shall pay Landlord the Base
Rent, in advance, without offset, deduction or prior demand. The Base Rent shall
be payable at Landlord's address or at such other place as Landlord may
designate in writing.
Section 3.02. BASE RENT INCREASES. The Base Rent shall be increased at
the times specified in Paragraph 1.12 (a) above. Landlord shall notify Tenant of
each increase in writing. Tenant shall pay the new Base Rent from its effective
date until the next periodic increase. Landlord's notice may be given after the
effective date of the increase. In such event, Tenant shall pay Landlord the
necessary rental adjustment for the months elapsed between the effective date of
the increase and Landlord's notice of such increase within ten (10) days After
Landlord's notice.
Section 3.03. SECURITY DEPOSIT INCREASES. Each time the Base Rent is
increased, Tenant shall deposit additional funds with Landlord sufficient to
increase the Security Deposit to an amount which bears the same relationship to
the adjusted Base Rent as the initial Security Deposit bore to the initial Base
Rent. The initial Security Deposit shall be paid by Tenant to Landlord upon
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execution of the Lease.
Section 3.04. TERMINATION; ADVANCE PAYMENTS. Upon termination of this
Lease under Article Seven (Damage or Destruction), Article Eight (Condemnation)
or any other termination not resulting from ▇▇▇▇▇▇'s default, and after Tenant
has vacated the Property in the manner required by this Lease, a pro rata
adjustment shall be made concerning advance rent, any other advance payments
made by Tenant to Landlord, and accrued real property taxes.
ARTICLE FOUR: OTHER CHARGES PAYABLE BY TENANT
Section 4.01. ADDITIONAL RENT. All charges payable by Tenant other than
Base Rent are called "Additional Rent." Unless this Lease provides otherwise,
all Additional Rent shall be paid with the next monthly installment of Base
Rent. The term "Rent" shall mean Base Rent and Additional Rent.
Section 4.02. REAL PROPERTY TAXES.
(a) PAYMENT OF TAXES. Tenant shall pay all real property taxes on the
Property during the Lease Term. Subject to Paragraph 4.02(c) and Section 4.08
below, such payment shall be made at least ten (10) days prior to the
delinquency date of the taxes. Tenant shall promptly furnish Landlord with
satisfactory evidence that the real property taxes have been paid. Landlord
shall reimburse Tenant for any real property taxes paid by Tenant covering any
period of time prior to or after the Lease Term. If Tenant fails to pay the real
property taxes when due, Landlord may pay the taxes and Tenant shall reimburse
Landlord for the amount of such tax payment as Additional Rent within fifteen
(15) days after ▇▇▇▇▇▇ receives written notice of same from Landlord.
(b) DEFINITION OF "REAL PROPERTY TAX". "Real Property Tax" means: (i) any
fee, license fee, license tax, business license fee, commercial rental tax,
levy, charge, assessment, penalty or tax imposed by any taxing authority against
the Property or land upon which the Property is located; (ii) any Real Property
tax on the Landlord's right to receive, or the receipt of, rent or income from
the Property or against Landlord's business of leasing the Property; (iii) any
tax or charge for fire protection, streets, sidewalks, road maintenance, refuse
or other services provided to the Property by any governmental agency; (iv) any
Real Property tax imposed upon this transaction, or based upon a reassessment of
the property due to a change of ownership or transfer of all or part of
Landlord's interest in the Property; and (v) any charge or fee replacing any tax
previously included within the definition of real
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property tax. "Real property tax" does not, however, include Landlord's federal
or state income, franchise, inheritance or estate taxes.
(c) JOINT ASSESSMENT. If the Property is not separately assessed,
▇▇▇▇▇▇'s share of the real property tax payable by Tenant under Paragraph
4.02(a) shall be determined from the assessor's worksheets or other reasonable
available information. Landlord shall make a reasonable determination of
Tenant's proportionate share of such real property tax and Tenant shall pay such
share to Landlord within fifteen (15) days after receipt of Landlord's written
statement.
(d) PERSONAL PROPERTY TAXES.
(i) Tenant shall pay all taxes charged against trade fixtures,
equipment or any other personal property belonging to ▇▇▇▇▇▇. Tenant shall try
to have personal property taxed separated from the Property..
(ii) In the event Landlord pays taxes on the Property, if any of
Tenant's personal property is taxed with the Property, Tenant shall pay Landlord
the taxes for the personal property within fifteen (15) days after ▇▇▇▇▇▇
receives a written statement from Landlord for such personal property taxes.
(e) TENANT'S RIGHT TO CONTEST TAXES. Tenant may attempt to have the
assessed valuation of the Property reduced or may initiate proceedings to
contest the real property taxes. If required by law, Landlord shall join in the
proceedings brought by ▇▇▇▇▇▇. However, Tenant shall pay all costs of the
proceedings, including any costs incurred by Landlord. Upon the final
determination of any proceeding or contest, ▇▇▇▇▇▇ shall immediately pay the
real property taxes due, together with all costs, charges, interest and
penalties incidental to the proceedings. If Tenant does not pay the real
property taxes when due and contests such taxes, Tenant shall not be in default
under this Lease for nonpayment of such taxes if Tenant deposits funds with
Landlord or opens an interest-bearing account reasonably acceptable to Landlord
in the joint names of Landlord and ▇▇▇▇▇▇. The amount of such deposit shall be
sufficient to pay the real property taxes plus a reasonable estimate of the
interest, costs, charges and penalties which may accrue if Tenant's action is
unsuccessful, less any applicable tax impounds previously paid by Tenant to
Landlord. The deposit shall be applied to the real property taxes due, as
determined at such proceedings. The real property taxes shall be paid under
protest from each deposit if such payment under protest is necessary to prevent
to Property from being sold under a "tax sale" or similar
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enforcement proceeding.
Section 4.03. UTILITIES. Tenant shall pay, directly to the appropriate
supplier, the cost of all natural gas, heat, light, power, sewer service,
telephone, water, refuse disposal, fire monitoring (if applicable), and other
utilities and services supplied to the Property. However, if any services or
utilities are jointly metered with other property, Landlord will, upon request
by ▇▇▇▇▇▇, separately meter the Property. In the absence of ▇▇▇▇▇▇'s request,
Landlord shall make a reasonable determination of Tenant's proportionate share
of the cost of such utilities and services and Tenant shall pay such share to
Landlord within fifteen (15) days after receipt of Landlord's written statement.
Section 4.04. INSURANCE PREMIUMS.
(a) LIABILITY INSURANCE. During the Lease Term, Tenant shall maintain a
policy of comprehensive public liability insurance, at Tenant's expense,
insuring Landlord against liability arising out of the ownership, use, occupancy
or maintenance of Tenant's proportionate share of the Property. The initial
amount of such insurance shall be at least $3,000,000, and shall be subject to
periodic increase based upon inflation, increased liability awards,
recommendation of professional insurance advisers, and other relevant factors.
However, the amount of such insurance shall not limit Tenant's liability nor
relieve Tenant of any obligation hereunder. The policy shall contain
cross-liability endorsements, if applicable, and shall insure Tenant's
performance of the indemnity provisions of Paragraphs 5.05(a), (b) and (e).
Tenant shall, at Tenant's expense, maintain such other liability insurance as
Tenant deems necessary to protect Tenant.
(b) HAZARD AND RENTAL INCOME INSURANCE. During the Lease Term, Landlord
shall maintain policies of insurance at Tenant's expense, covering loss of or
damage to the Property in the full amount of its replacement value. Such
policies shall provide protection against all perils included within the
classification of fire, extended coverage, vandalism, malicious mischief,
special extended perils (all risk), sprinkler leakage, earthquake sprinkler
leakage, and Inflation Guard endorsement, and any other perils (except flood
unless required by a lender holding a security interest in the Property) which
Landlord reasonably deems necessary. Landlord may obtain insurance coverage for
Tenant at Tenant's expense, maintain such primary or additional insurance on its
fixtures, equipment and building improvements as Tenant deems necessary to
protect its interest. During the Lease Term, Landlord shall also maintain a
rental income insurance policy at Tenant's expense, with loss payable to
Landlord in an amount equal to one
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(1) year's Base Rent, estimated real property taxes and insurance premiums.
Tenant shall not do or permit to be done anything which invalidates any such
insurance policies.
(c) PAYMENT OF PREMIUMS; INSURANCE POLICIES. Subject to Section 4.05
Tenant shall pay all premiums for the insurance policies described in Paragraph
4.04(a) and (b) within fifteen (15) days after receipt by Tenant of a copy of
the premium statement or other evidence of the amount due. If the insurance
policies maintained by landlord cover improvements or real property other than
the Property, Landlord shall also deliver to Tenant a statement of the amount of
the premiums applicable to the Property showing, in reasonable detail, how such
amount was computed. If the Lease Term expires before the expiration of the
insurance policy period, Tenant's Liability for insurance premiums shall be
prorated on an annual basis. All insurance shall be maintained with companies
holding a "General Policyholder's Rating" of B+ or better, as set forth in the
most current issue of "Best's Insurance Guide." Tenant shall be liable for the
payment of any deductible amount under ▇▇▇▇▇▇▇▇'s insurance policies; said
deductible shall in no event be greater than $1,000. All policies required to be
maintained hereunder may be maintained under ▇▇▇▇▇▇'s existing umbrella
policies.
Section 4.05. MULTIPLE TENANT BUILDINGS; RULES AND REGULATIONS. If the
Property is part of a larger building or group of buildings, Tenant shall pay
monthly, in advance, its pro rata share of common area maintenance and repair
costs as reasonably determined by Landlord. Tenant shall also comply with
Landlord's rules and regulations respecting the management, care and safety of
the common areas of such buildings and grounds, including parking areas,
landscaped areas, walkways, hallways and other facilities provided for the
common use and convenience of other occupants. Notice of such rules and
regulations will be posted or given to Tenant. Tenant shall pay for any increase
in the property insurance premiums for such buildings caused by Tenant's acts,
omissions, use or occupancy of the Property.
Section 4.06. LATE CHARGES. ▇▇▇▇▇▇'s failure to pay rent promptly may
cause Landlord to incur unanticipated costs. The exact amount of such costs are
impractical or extremely difficult to ascertain. Such costs may include, but are
not limited to, processing and accounting charges and late charges which may be
imposed on Landlord by any ground lease, mortgage or trust deed encumbering the
Property. Therefore, if Landlord does not receive any rent payment on or before
the day it becomes due, Landlord shall have the option to notify Tenant verbally
or in writing of Landlord's failure to receive the rent payment, and Tenant
shall
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have ten (10) days from the receipt of such notice within which to make the rent
payment to Landlord. If Tenant does not make the rent payment within the ten-day
period following receipt of the notice, Tenant shall pay landlord a late charge
equal to five percent (5%) of the overdue amount. During the course of this
Lease if Tenant fails to pay the rent payment by the day it becomes due more
than three (3) times in any lease year, then the required notice from Landlord
to Tenant as provided hereinabove is hereby waived by Tenant and any such notice
requirement is dispensed with so that Tenant shall thereafter automatically pay
Landlord a late charge equal to five percent (5%) of the overdue amount. A rent
payment is deemed overdue if not paid on or before the due date. The parties
agree that such late charge represents a fair and reasonable estimate of the
costs Landlord will incur by reason of such late payment. Any payment made by
Tenant to Landlord under this section shall be considered additional rent.
Section 4.07. INTEREST ON PAST DUE OBLIGATIONS. Any amount owed by Tenant
to Landlord which is not paid when due shall bear interest at the rate of ten
percent (10%) per annum from the due date of such amount. The payment of
interest on such amounts shall not excuse the payment of late charges under
Section 4.06. If the interest rate specified in this Lease is higher than the
rate permitted by law, the interest rate is hereby decreased to the maximum
legal interest rate permitted by law. Any such payment under this section shall
be considered additional rent.
Section 4.08. IMPOUNDS FOR INSURANCE PREMIUMS AND REAL PROPERTY TAXES. If
requested by any ground lessor or lender to whom Landlord has granted a security
interest in the Property, or if Tenant is more than ten (10) days late in the
payment of rent more than once in any consecutive twelve (12) month period,
Tenant shall pay Landlord a sum equal to one-twelfth (1/12) of the annual real
property taxes and insurance premiums payable by Tenant under this Lease,
together with each payment of Base Rent. Such payments shall be held by Landlord
in a non-interest bearing impound account. The amount of real property taxes and
insurance premiums when unknown shall be reasonably estimated by Landlord. Funds
in the impound account shall be applied by Landlord to the payment of real
property taxes and insurance premiums when due. Any deficiency of funds in the
impound account shall be paid by Tenant to Landlord upon written request. If
Tenant defaults under this Lease, Landlord may apply any funds in the impound
account to any obligation then due under this Lease.
Section 4.09. IMPROVEMENTS REQUIRED BY CODE OR LAW. In the event the
responsible fire department, or any other governmental agency, governmental
entity, public district, public council or
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any other standard or rule making body requires additional changes in
construction or improvements to be constructed on the property due to Tenant's
proposed use of said property, such changes or improvements and any and all
related costs shall be the sole cost, expense and responsibility of Tenant.
ARTICLE FIVE: USE OF PROPERTY
Section 5.01. PERMITTED USES. Tenant nay use the Property only for the
Permitted Uses set forth in Section 1.06 above.
Section 5.02. MANNER OF USE. Tenant shall not cause or permit the
Property to be used in any way which constitutes a violation of any law,
ordinance, or government regulation or order, which annoys or interferes with
the rights of tenants or the development of which the Property is part, or which
constitutes a nuisance or waste. Except as otherwise provided in Section 15.17
hereof, Tenant shall promptly take all substantial and non-substantial actions
necessary to comply with all applicable statutes, ordinances, rules,
regulations, orders and requirements regulating the use by Tenant of the
Property, including the Occupational Safety and Health Act, and other safety
statutes, Administrative Codes or safety orders.
Section 5.03. SIGNS, AUCTIONS. Tenant shall not place any signs on the
Property without Landlord's prior written consent, which consent shall not be
unreasonably withheld or delayed. Tenant shall not conduct or permit any
auctions or sheriff's sales at the Property.
Section 5.04. HAZARDOUS MATERIALS.
(a) REPORTING REQUIREMENTS. Tenant or any occupant, sublessee or
assignee (collectively "User") shall be required to report to the City or
County Division of Environmental Health or other applicable governmental
agency, all hazardous and extremely hazardous materials handled, stored,
used, generated, manufactured by the user in the Property, or which, to
Tenant's actual knowledge, or constructive knowledge pursuant to applicable
law, are otherwise occurring on the premises as required by the California
Health and Safety Code, and all other Federal, State and local statutes and
regulations. Any such User shall be required to clean up and ▇▇▇▇▇ any
environmental pollution and/or contamination resulting from the use,
generation, storage, manufacture, handling, spillage, or other consequence of
the presence of hazardous and/or extremely hazardous materials upon the
Property by the user. Tenant shall be required to adhere to all Federal and
State statutes, laws, rules, regulations and orders regulating the presence,
use, storage and disposal of toxic or hazardous materials.
(b) ENVIRONMENTAL COMPLIANCE. Tenant shall not cause or permit any
Hazardous Material to be brought upon, kept or used in
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or about the Property by Tenant, its agents, employees, contractors or
invitees, without the prior written consent of Landlord (which consent
Landlord shall not unreasonably withhold as long as Tenant demonstrates to
Landlord's reasonable satisfaction that such Hazardous Material is necessary
or useful to Tenant's business and will be used, kept and stored in a manner
that complies with all laws relating to any such Hazardous Material so
brought upon or used or kept in or about the Property). If Tenant breaches
the obligations stated in the preceding sentence, or if the presence of
Hazardous Material on the Property caused by Tenant results in contamination
of the Property, or if contamination of the Property by Hazardous Material
otherwise occurs for which Tenant is legally liable to Landlord for damage
resulting therefrom, then Tenant shall indemnify, defend and hold Landlord
harmless from any and all claims, judgments, damages, penalties, fines,
costs, liabilities or losses (including, without limitation, diminution in
value of the Property, damages for the losses or restriction on use of
rentable or usable space or of any amenity of the Property, and sums paid in
settlement of claims, attorneys' fees, consultant fees and expert fees) which
arise during or after the lease term as a result of such contamination. The
indemnification set forth herein shall run to the benefit of any bank or
other lender to which Landlord or Landlords' successors and assigns may
grant a security interest in the Property and/or the Property. This
indemnification of Landlord by Tenant includes, without limitation, costs
incurred in connection with any investigation of site conditions or any
cleanup, remedial, removal or restoration work required by any federal, state
or local governmental agency or political subdivision because of Hazardous
Material present in the soil or ground water on or under the Property.
Without limiting the foregoing, if the presence of any Hazardous Material on
the Property caused or permitted by Tenant results in any contamination of
the Property, Tenant shall promptly take all actions at its sole expense as
are necessary to return the Property to the condition existing prior to the
introduction of any such Hazardous Material to the Property; provided that
Landlord's approval of such actions shall first be obtained, which approval
shall not be unreasonably withheld or delayed so long as such actions would
not potentially have any material adverse long-term or short-term effect on
the Property. Landlord and ▇▇▇▇▇▇ shall indemnify, defend and hold harmless
each other from and against all claims, judgments, damages, penalties, fines,
costs, liabilities or losses, including reasonable attorneys' fees, arising
in connection with the contamination of the Property proximately caused by
the either of them.
As used herein, the term "Hazardous Material" means any hazardous or toxic
substance, material or waste which is or becomes
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regulated by any local governmental authority, the State of California or the
United States Government. The term "Hazardous Material" includes, without
limitation, any material or substance which is (i) defined as a "hazardous
waste," "extremely hazardous waste" or "restricted hazardous waste" under
Sections 25115, 25117 or 25122.7, or listed pursuant to Section 25140 of the
California Health and Safety Code, Division 20, Chapter 6.5 (Hazardous Waste
Control Law); (ii) defined as a "hazardous substance" under Section 25316 of
the California Health and Safety Code, Division 20, Chapter 6.8
(▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇-▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Substance Account Act); (iii) defined as a
"hazardous material," "hazardous substance" or "hazardous waste" under Section
25501 of the California Health and Safety Code, Division 20, Chapter 6.95
(Hazardous Materials Release Response Plans and Inventory); (iv) defined as a
"hazardous substance" under Section 25281 of the California Health and Safety
Code, Division 20, Chapter 6.7 (Underground Storage of Hazardous Substances);
(v) petroleum; (vi) asbestos; (vii) listed under Article 9 or defined as
hazardous or extremely hazardous pursuant to Article 11 of Title 22 of the
California Administrative Code, Division 4, Chapter 20; (viii) designated as a
"hazardous substance" pursuant to Section 1004 of the Federal Resource
Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq. (42 U.S.C. Section
6903); (ix) defined as a "hazardous substance" pursuant to Section 101 of the
Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C.
Section 9601 et seq. (42 U.S.C. Section 9601); or (x) any substance requiring
remediation under any federal, state, municipal or other governmental
statute, ordinance, rule, regulation or policy.
Section 5.05. INDEMNITY. Tenant shall indemnify Landlord against and hold
Landlord harmless from any and all costs, claims, suits, damages, expenses or
liability of any kind arising from: (a) Tenant's use of the Property; (b) the
conduct of Tenant's business or anything else done or permitted by Tenant to be
done in, on or about the Property, including any of User's activities as
pertaining to Hazardous Materials pursuant to Section 5.03 hereinabove or any
other section contained in this Lease; (c) any breach or default in the
performance of Tenant's obligations under this Lease; (d) any misrepresentation
or breach of warranty by Tenant under this Lease; or (e) other acts or omissions
of Tenant, or Tenant's permitees, employees, agents and licensees. Tenant shall
defend Landlord against any such cost, claim, suit, damage, expense or liability
at Tenant's expense with counsel reasonably acceptable to Landlord or, at
Landlord's elections, Tenant shall reimburse Landlord for any legal fees or
costs incurred by Landlord in connection with any such claim.
Section 5.06. LANDLORD'S ACCESS. Landlord or its agents may
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enter the Property at all reasonable times to show the Property to potential
buyers, investors or tenants or other parties, or for any other purpose Landlord
deems necessary. Landlord shall give Tenant prior notice of such entry, except
in the case of an emergency. Landlord may place customary "For Sale" or "For
Lease" signs on the Property.
Section 5.07. QUIET POSSESSION. If Tenant pays the rent and complies with
all other terms of this Lease, Tenant may occupy and enjoy the Property for the
full Lease Term, subject to the provisions of this Lease.
ARTICLE SIX: CONDITION OF PROPERTY; MAINTENANCE, REPAIRS AND ALTERATIONS
Section 6.01. EXISTING CONDITIONS. Except as set forth in any exhibit or
rider requiring Landlord to perform work on the Property prior to the
Commencement Date, Tenant accepts the Property in its condition as of the
execution of the Lease, subject to all recorded matters, laws, ordinances, and
governmental regulations and orders. Tenant acknowledges that neither ▇▇▇▇▇▇▇▇
nor any agent of Landlord has made any representation as to the condition of the
Property or the suitability of the Property for Tenant's specific intended use.
Section 6.02. EXEMPTION OF LANDLORD FROM LIABILITY. Landlord shall not be
liable for any damage or injury to the person, business (or any loss of income
therefrom), goods, wares, merchandise or other property of Tenant, Tenant's
employees, invitiees, customers or any other person in or about the Property,
whether such damage or injury is caused by or results from: (a) fire, steam,
electricity, water, gas or rain; (b) the breakage, leakage, obstruction or other
defects of pipes, sprinklers, wires, appliances, plumbing, air conditioning or
lighting fixtures or any other cause; (c) conditions arising in, on or about the
Property or upon other portions of any building of which the Property is a part,
or from other sources or places; or (d) any act or omission of any other tenant
of any building of which the Property is a part unless such loss or damage shall
be the result of Landlord's negligence or intentional acts, including without
limitation, Landlord's failure to construct the improvements in a good and
workmanlike manner. The aforesaid limitation and exemption of Landlord from
liability is based on Tenant's covenant and promise to maintain policies of
insurance sufficient to cover any such damage, injury or loss pursuant to
paragraph 4.04 above.
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Section 6.03. TENANT'S OBLIGATIONS.
(a) Tenant shall keep the Property (including all structural
nonstructural, interior, exterior, and landscaped areas, portions, systems and
equipment) in good order, condition and repair during the Lease Term. Tenant
shall promptly replace any portion of the Property or system or equipment in the
Property which cannot be fully repaired, regardless of whether the benefit of
such replacement extends beyond the Lease Term. Tenant shall also maintain a
preventive maintenance contract providing for the regular inspection and
maintenance of the heating and air conditioning system, at Tenant's expense. It
is the intention of Landlord and Tenant that, at all times during the Lease
Term, Tenant shall maintain the Property in an attractive, first-class and
fully operative condition.
(b) All of Tenant's obligations to maintain and repair shall be
accomplished at Tenant's sole expense. If Tenant fails to maintain and repair
the Property, Landlord may, on ten (10) days prior notice, except that no notice
shall be required in case of emergency, enter the Property and perform such
repair and maintenance on behalf of Tenant. In such case, ▇▇▇▇▇▇ shall reimburse
Landlord for all costs so incurred immediately upon written demand.
Section 6.04. LANDLORD'S OBLIGATIONS. Subject to the provisions of
Article Seven (Damage or Destruction) and Article Eight (Condemnation), Landlord
shall have absolutely no responsibility to repair, maintain or replace any
portion of the Property at any time. Tenant waives the benefit of any present or
future law which might give Tenant the right to repair the Property at
Landlord's expense or to terminate the Lease due to the condition of the
Property.
Section 6.05. ALTERATIONS, ADDITIONS AND IMPROVEMENTS.
(a) Except as otherwise set forth in Section 6.05(c) below, Tenant shall
not make any alterations, additions, or improvements to the Property without
Landlord's prior written consent, except for non-structural alterations which do
not exceed One Hundred Thousand Dollars ($100,000) in cost cumulatively over the
Lease Term and which are not visible from the outside of any building of which
the Property is part. Consent for non-structural alterations, other alterations,
additions, or improvements to the property will not be unreasonably withheld.
Landlord may require Tenant to provide demolition and/or lien and completion
bonds in form and amount satisfactory to Landlord. Tenant shall promptly
removeany alterations, additions, or improvements constructed in violation of
this Paragraph 6.05(a) upon Landlord's written request. All alterations,
additions, and improvements will be accomplished in
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a good and workmanlike manner, in conformity with all applicable laws and
regulations, and by a contractor reasonably approved in writing by Landlord.
Upon completion of any such work, Tenant shall provide Landlord with "as built"
plans, copies of all construction contracts, and proof of payment of all labor
and materials.
(b) Tenant shall pay when due all claims for labor and material furnished
to the Property. Tenant shall give Landlord at least ten (10) days' prior
written notice of the commencement of any work on the Property. Landlord may
elect to record and post notice of non-responsibility on the Property.
(c) Upon substantial completion of the construction of the Property,
Tenant may install food processing equipment and fixtures without securing
Landlord's prior consent, as reasonably necessary or appropriate for ▇▇▇▇▇▇'s
contemplated use of the Property, however, Tenant shall not interfere with
Landlord's work in progress or construction, and Tenant shall use the utmost
care for the safety of its employees and agents and others on the Property in
their installation activities.
Section 6.06. CONDITION UPON TERMINATION. Upon the termination of the
Lease, ▇▇▇▇▇▇ shall surrender the Property to Landlord, broom clean and in
the same condition as received except for ordinary wear and tear which Tenant
was not otherwise obligated to remedy under any provision of this Lease.
However, Tenant shall not be obligated to repair any damage which Landlord is
required to repair under Article Seven (Damage or Destruction). Tenant shall
have a right to remove any or all of its machinery, equipment and trade
fixtures, provided Tenant leaves the Property in pre-removal condition
excepting reasonable wear and tear. In addition, Landlord may require Tenant
to remove any alterations, additions or improvements prior to the termination
of the Lease and to restore the Property to its prior condition excepting
reasonable wear and tear, provided that Landlord notified Tenant of its
decision to require removal at the time of installation. Tenant shall give
written notice of installation to Landlord prior to the commencement of any
work thereon. Landlord shall give written notice of removal to Tenant within
twenty (20) days of receiving Tenant's notice of installation. If Tenant
fails to give notice of installation to Landlord, then Landlord shall have
the option to require Tenant to remove alterations, additions or
improvements. All alterations, additions and improvements which Landlord has
not required Tenant to remove shall become Landlord's property and shall be
surrendered to Landlord upon the termination of the Lease, Tenant shall
repair, at Tenant's expense, any damage to the Property caused by the removal
of any such trade fixtures,
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machinery or equipment. In no event, however, shall Tenant remove any of the
following materials or equipment without Landlord's prior written consent: any
power wiring or power panels; lighting or lighting fixtures; wall coverings;
drapes; blinds or other window coverings; carpets or other floor coverings;
heaters, air conditioners or any other heating or air conditioning equipment;
fencing or security gates; or other similar building operating equipment and
decorations unless owned and installed by Tenant.
ARTICLE SEVEN: DAMAGE OR DESTRUCTION
Section 7.01. PARTIAL DAMAGE TO PROPERTY. Tenant shall notify Landlord in
writing immediately upon the occurrence of any damage to the Property. If the
Property is only partially damaged and if the proceeds received by Landlord from
the insurance policies described in Paragraph 4.04(b) are sufficient to pay for
the necessary repairs, this Lease shall remain in effect and Landlord shall
repair the damage as soon as reasonably possible. Landlord may elect to repair
any damage to Tenant's fixtures, equipment or improvements. If the insurance
proceeds received by Landlord are not sufficient to pay the entire cost of
repair, or if the damage was due to a cause not covered by the insurance
policies which Landlord maintains under Paragraph 4.04(b), Landlord may elect
either to (a) repair the damage as soon as reasonably possible in which case
this Lease shall remain in full force and effect, or (b) if Tenant has not
otherwise elected to pay the difference between the cost of repairs and the
amount of insurance proceeds or to repair the Property, terminate this Lease as
of the date the damage occurred. Landlord shall notify Tenant within thirty (30)
days after receipt of notice of the occurrence of the damage, whether Landlord
elects to repair the damage. If Landlord elects to repair the damage, Tenant
shall pay Landlord the "deductible amount" (if any) under Landlord's insurance
policies, and, if the damage was due to an act or omission of Tenant, the
difference between the actual cost of repair and any insurance proceeds received
by Landlord. If Landlord does not give notice of intention to repair the damage
within thirty (30) days, then Tenant may elect to repair the damage by notifying
Landlord in writing within thirty (30) days of the intention to do so. If Tenant
notifies Landlord of the intention to repair the damage, Tenant shall pay the
cost of such repairs, except that Tenant shall be entitled to any insurance
proceeds received by Landlord for damage repaired by Tenant at the time such
proceeds are received by Landlord. If neither Landlord not Tenant exercises the
option to repair the damage, this Lease shall terminate. If the damage to the
Property occurs during the last six (6) months of the Lease Term, as same may be
extended pursuant to Section 2.05, Landlord may elect to terminate this Lease as
of the date the damage occurred regardless of the sufficiency of any insurance
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proceeds. In such event, Landlord shall not be obligated to repair or restore
the property and Tenant shall have no right to continue this Lease. Landlord
shall notify Tenant of its election within thirty (30) days after receipt of
notice of the occurrence of the damage.
Section 7.02. TOTAL OR SUBSTANTIAL DESTRUCTION. If the Property is
totally or substantially destroyed by any cause whatsoever, or if the Property
is in a building which is substantially destroyed (even though the Property is
not totally or substantially destroyed), this Lease shall terminate as of the
date the destruction occurred regardless of whether Landlord receives any
insurance proceeds. However, if the Property can be rebuilt within one (1) year
after the date of destruction, Landlord may elect to rebuild the Property at
Landlord's own expense, in which case, this Lease shall remain in full force and
effect. Landlord shall notify Tenant of such election within thirty (30) days
after the occurrence of total or substantial destruction. If the destruction was
caused by an act or omission of Tenant, Tenant shall pay Landlord the difference
between the actual cost of rebuilding and any insurance proceeds received by
Landlord.
Section 7.03. TEMPORARY REDUCTION OF RENT. If the Property is destroyed
or damaged and Landlord or Tenant repairs or restores the Property pursuant to
the provisions of this Article Seven, any rent payable during the period of such
damage, repair and/or restoration shall be reduced according to the degree, if
any, to which ▇▇▇▇▇▇'s use of the Property is impaired, unless such destruction
or damage is caused in whole or in part by Tenant's negligence or wilful
misconduct, in which case there shall be no reduction in rent or by the amount
of any rental income insurance proceeds received by Landlord. Except for such
possible reduction in Base Rent, insurance premiums and real property taxes,
Tenant shall not be entitled to any compensation, reduction, or reimbursement
from Landlord as a result of any damage, destruction, repair, or restoration of
or to the Property.
ARTICLE EIGHT: CONDEMNATION
If all or any portion of the Property is taken under the power of eminent
domain or sold under the threat of that power (all of which are called
"Condemnation"), this Lease shall terminate as to the part taken or sold on the
date the condemning authority takes title or possession, whichever occurs first.
If more than twenty percent (20%) of the floor area of the building in which the
Property is located, or which is located on the Property, is taken, either
Landlord or Tenant may terminate this Lease as of the date the condemning
authority takes title or possession, by delivering
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written notice to the other within ten (10) days after receipt of written notice
of such taking or in the absence of such notice, within ten (10) days after the
condemning authority takes possession. If neither Landlord nor Tenant terminates
this Lease, this Lease shall remain in effect as to the portion of the Property
not taken, except that the Base Rent shall be reduced in proportion to the
reduction in the area of the Property. Any Condemnation award or payment shall
be distributed in the following order: (1) first, to any ground lessor,
mortgagee or beneficiary under a deed of trust encumbering the Property, the
amount of its interest in the Property; (b) second, to Tenant, only the amount
of any award specifically designated for the value of Tenant's leasehold
interest, relocation costs, and/or loss of or damage to Tenant's trade fixtures
or removable personal property; and (c) third, to Landlord, the remainder of
such award, whether as compensation for reduction in the value of the leasehold,
the taking of the fee, or otherwise. If this Lease is not terminated, Landlord
shall repair any damage to the Property caused by the Condemnation, except that
Landlord shall not be obligated to repair any damage for which Tenant has been
reimbursed by the condemning authority. If the severance damages received by
Landlord are not sufficient to pay for such repair, Landlord shall have the
right to either terminate the Lease or make such repair at Landlord's expense.
ARTICLE NINE: ASSIGNMENT AND SUBLETTING
Section 9.01. LANDLORD'S CONSENT REQUIRED. No portion of the Property or
of Tenant's interest in this Lease may be acquired by any other person or
entity, whether by assignment, mortgage, sublease, transfer, operation of law,
or act of Tenant, without ▇▇▇▇▇▇▇▇'s prior written consent, which consent shall
not be unreasonably withheld or delayed except as provided in Section 9.02
below. Landlord shall grant or withhold its consent as provided in Section 9.04
below. Any attempted transfer without consent shall be void and shall constitute
a non-curable breach of this Lease. If Tenant is a partnership, any cumulative
transfer of more than twenty percent (20%) of the partnership interest shall
require Landlord's consent. If Tenant is a corporation, any change in a
controlling interest of the voting stock of the corporation shall require
Landlord's consent.
Section 9.02. TENANT'S AFFILIATE. Tenant may assign this Lease or
sublease the Property to any corporation which controls, is controlled by or is
under common control with Tenant, or to any corporation resulting from the
merger of or consolidation with Tenant or to any entity engaged in a joint
venture with Tenant; or to any entity which acquires substantially all of the
stock or assets of Tenant, as a going concern, with respect to the business
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that is being conducted in the Premises ("Tenant's Affiliate"). Tenant shall
provide to Landlord reasonable written proof of identity or assignee or
sublessee. In such case, any Tenant's Affiliate shall assume in writing all of
Tenant's obligations under this Lease.
Section 9.03. NO RELEASE OF TENANT. No transfer permitted by this Article
Nine, whether with or without Landlord's consent, shall release Tenant or change
Tenant's primary liability to pay the rent and to perform all other obligations
of Tenant under this Lease. ▇▇▇▇▇▇▇▇'s acceptance of rent from any other person
is not a waiver of any provision of this Article Nine. Consent to one transfer
is not a consent to any subsequent transfer. If ▇▇▇▇▇▇'s transferee defaults
under this Lease, Landlord may proceed directly against Tenant without pursuing
remedies against the transferee.
Section 9.04. LANDLORD'S ELECTION. ▇▇▇▇▇▇'s request for consent to any
transfer described in Section 9.01 above shall be accompanied by a written
statement setting forth the details of the proposed transfer, including the
name, business and financial condition of the prospective transferee, financial
details of the proposed transfer (e.g., the term of and rent and security
deposit payable under any assignment or sublease), and any other information
Landlord reasonably deems relevant. Landlord shall have the right (a) to
withhold consent, if reasonable; or (b) to grant consent.
Section 9.05. NO MERGER. No merger shall result from ▇▇▇▇▇▇'s sublease of
the Property under this Article Nine, ▇▇▇▇▇▇'s surrender of this Lease or the
termination of this Lease in any other manner. In any such event, Landlord may
terminate any or all subtenancies or succeed to the interest of Tenant or
sublandlord thereunder.
ARTICLE TEN: DEFAULTS REMEDIES
Section 10.01. COVENANTS AND CONDITIONS. ▇▇▇▇▇▇'s performance of each of
Tenant's obligations under this Lease is a condition as well as a covenant.
▇▇▇▇▇▇'s right to continue in possession of the Property is conditioned upon
such performance. Time is of the essence in the performance of all covenants and
conditions.
Section 10.02. DEFAULTS. Tenant shall be in material default under this
Lease:
(a) If ▇▇▇▇▇▇ abandons the Property or if ▇▇▇▇▇▇'s vacation
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of the Property results in the cancellation of any insurance described in
Section 4.04;
(b) If Tenant fails to pay rent or any other charge required to be paid
by ▇▇▇▇▇▇, as and when due except that Landlord shall give written notice of
failure to receive rent and Tenant shall have five (5) days to pay from
receipt of said notice. However, whether or not ▇▇▇▇▇▇ received said notice,
rent must be received by Landlord no later than fifteen (15) days from the
due date. If Landlord gives notice of failure to receive rent more than three
(3) times in any twelve (12) month period, then, thereafter, any failure of
Tenant to pay rent on or before the date due shall be a material breach, and
no further notice must be given by Landlord;
(c) If Tenant fails to perform any of Tenant's non-monetary obligations
under this Lease for a period of thirty (30) days after receipt of written
notice from Landlord; provided that if more than thirty (30) days are required
to complete such performance, Tenant shall not be in default if Tenant commences
such performance within the thirty (30) day period and thereafter diligently
pursues its completion. The notice required by this Paragraph is intended to
satisfy any and all notice requirements imposed by law on Landlord and is not in
addition to any such requirement;
(d) (i) If Tenant makes a general assignment or general arrangement for
the benefit of creditors; (ii) if a petition for adjudication of bankruptcy or
for reorganization or rearrangement is filed by or against Tenant and is not
dismissed within thirty (30) days; (iii) if a trustee or receiver is appointed
to take possession of substantially all of Tenant's assets located at the
Property or of Tenant's interest in this Lease and possession is not restored to
Tenant within thirty (30) days; or (iv) if substantially all of Tenant's assets
located at the Property or of Tenant's interest in this Lease is subjected to
attachment, execution or other judicial seizure which is not discharged within
thirty (30) days. If a court of competent jurisdiction determines that any of
the acts described in this subparagraph (d) is not a default under this Lease,
and a trustee is appointed to take possession (or if Tenant remains a debtor in
possession) and such trustee or Tenant transfers ▇▇▇▇▇▇'s interest hereunder,
then Landlord shall receive, as Additional Rent, the difference between the rent
(or any other consideration) paid in connection with such assignment or sublease
and the rent payable by Tenant hereunder.
Section 10.03. REMEDIES. On the occurrence of any material default by
Tenant, Landlord may, at any time thereafter, with or without notice or demand
and without limiting Landlord in the exercise of any right or remedy which
Landlord may have:
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(a) Terminate ▇▇▇▇▇▇'s right to possession of the Property by any lawful
means, in which case this Lease shall terminate and Tenant shall immediately
surrender possession of the Property to Landlord. In such event, Landlord shall
be entitled to recover from Tenant all damages incurred by Landlord by reason of
Tenant's default, including (i) the worth at the time of the award of the unpaid
Base Rent, Additional Rent and other charges which had been earned at the time
of the termination; (ii) the worth at the time of the award of the amount by
which the unpaid Base Rent, Additional Rent and other charges which would have
been earned after termination until the time of the award exceeds the amount of
such rental loss that Tenant proves could have been reasonably avoided; (iii)
the worth at the time of the award of the amount by which the unpaid Base Rent,
Additional Rent and other charges which would have been paid for the balance of
the term after the time of award exceeds the amount of such rental loss that
Tenant proves could have been reasonably avoided; and (iv) any other amount
necessary to compensate Landlord for all the detriment actually and proximately
caused by Tenant's failure to perform its obligations under the Lease or which
in the ordinary course of things would be likely to result therefrom, including,
but not limited to, any costs or expenses incurred by Landlord in maintaining or
preserving the Property after such default, the cost of recovering possession of
the Property, expenses of reletting, including necessary renovation or
alteration of the Property, Landlord's reasonable attorneys' fees incurred in
connection therewith, and any real estate commission paid or payable. As used in
subparts (i) and (ii) above, the "worth at the time of the award" is computed by
allowing interest on unpaid amounts at the rate of ten percent (10%) per annum,
or such lesser amount as may then be the maximum lawful rate. As used in
subpart (iii) above, the "worth at the time of the award" is computed by
discounting such amount at the discount rate of the Federal Reserve Bank of San
Francisco at the time of the award, plus 1%. If Tenant shall have abandoned the
Property for a period in excess of sixty (60) days, Landlord shall have the
option of (i) retaking possession of the Property and recovering from Tenant the
amount specified in this paragraph 10.03(a), or (ii) proceeding under Paragraph
10.03(b);
(b) Maintain Tenant's right to possession, in which case this Lease shall
continue in effect whether or not Tenant shall have abandoned the Property. In
such event, Landlord shall be entitled to enforce all of Landlord's rights and
remedies under this Lease, including the right to recover the rent as it becomes
due hereunder;
(c) Pursue any other remedy now or hereafter available to
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Landlord under the laws or judicial decisions of the state in which the property
is located.
Section 10.04. CUMULATIVE REMEDIES. ▇▇▇▇▇▇▇▇'s exercise of any right or
remedy shall not prevent it from exercising any other right or remedy.
ARTICLE ELEVEN: PROTECTION OF LENDERS
Section 11.01. SUBORDINATION. Landlord shall have the right to subordinate
this Lease to any ground lease, deed of trust or mortgage encumbering the
Property, any advances made on the security thereof and any renewals,
modifications, consolidations, replacements or extensions thereof, whenever made
or recorded. landlord shall obtain a non-disturbance agreement, in a form
reasonably satisfactory to ▇▇▇▇▇▇'s counsel, from the holder(s) of any interest
in the Property having priority over this Lease. However, ▇▇▇▇▇▇'s right to
quiet possession of the Property during the Lease Term shall not be disturbed if
Tenant pays the rent and performs all of Tenant's obligations under this Lease
and is not otherwise in default. If any ground lessor, beneficiary or mortgagee
elects to have this Lease prior to the lien of its ground lease, deed of trust
or mortgage and gives written notice thereof to Tenant, this Lease shall be
deemed prior to such ground lease, deed of trust or mortgage whether this Lease
is dated prior or subsequent to the date of said ground lease, deed of trust or
mortgage or the date of recording thereof.
Section 11.02. ATTORNMENT. If ▇▇▇▇▇▇▇▇'s interest in the Property is
acquired by any ground lessor, beneficiary under a deed of trust, mortgagee, or
purchaser at a foreclosure sale, Tenant shall attorn to the transferee of or
successor to ▇▇▇▇▇▇▇▇'s interest in the Property and recognize such transferee
or successor as Landlord under this Lease, provided Landlord shall obtain a
nondisturbance agreement, in a form reasonably satisfactory to Tenant's counsel,
in connection with each such attornment. Tenant waives the protection of any
statute or rule of law which gives or purports to give Tenant any right to
terminate this Lease or surrender possession of the Property upon the transfer
of Landlord's interest.
Section 11.03. SIGNING OF DOCUMENTS. Tenant shall sign and deliver any
instrument or document necessary or appropriate to evidence any such attornment
or subordination or agreement to do so. Such subordination and attornment
documents may contain such provisions as are customarily required by any ground
lessor, beneficiary under a deed of trust or mortgagee.
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Section 11.04. ESTOPPEL CERTIFICATES.
(a) Upon Landlord's written request, Tenant shall execute, acknowledge and
deliver to Landlord a written statement certifying: (i) that none of the terms
or provisions of this Lease have been changed (or if they have been changed,
stating how they have been changed); (ii) that this Lease has not been cancelled
or terminated; (iii) the last date of payment of the Base Rent and other charges
and the time period covered by such payment; (iv) that Landlord is not in
default under this Lease (or, if Landlord is claimed to be in default, stating
why); and (v) such other matters as may be reasonably required by Landlord or
the holder of a mortgage, deed of trust or lien to which the Property is or
becomes subject. Tenant shall deliver such statement to Landlord within ten (10)
days after ▇▇▇▇▇▇▇▇'s request. Any such statement by Tenant may be given by
Landlord to any prospective purchaser or encumbrancer of the Property. Such
purchaser or encumbrancer may rely conclusively upon such statement as true and
correct.
(b) If Tenant does not deliver such statement to Landlord within such ten
(10) day period, Landlord, and any prospective purchaser or encumbrancer, may
conclusively presume and rely upon the following facts: (i) that the terms and
provisions of this Lease have not been changed except as otherwise represented
by Landlord; (ii) that this Lease has not been canceled or terminated except as
otherwise represented by Landlord; (iii) that not more than one month's Base
Rent or other charges have been paid in advance; and (iv) that Landlord is not
in default under the Lease. In such event, Tenant shall be estopped from denying
the truth of such facts.
Section 11.05. TENANT'S FINANCIAL CONDITION. Within fifteen (15) days,
Tenant shall deliver to any lender designated by Landlord any financial
statements required by such lender to facilitate the financing or refinancing of
the Property. Tenant represents and warrants to Landlord that each such
financial statement is a true and accurate statement as of the date of such
statement. All financial statements shall be confidential and shall be used only
for the purposes set forth herein.
ARTICLE TWELVE: LEGAL COSTS
Section 12.01. LEGAL PROCEEDINGS. Each party shall reimburse other party,
upon demand, for any costs or expenses incurred by such other party in
connection with any breach or default of each party under this Lease, whether or
not suit is commenced or judgment entered. Such costs shall include legal fees
and costs incurred for the negotiation of a settlement, enforcement of rights
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or otherwise. Furthermore, if any action for breach of or to enforce the
provisions of this Lease is commenced, the court in such action shall award to
the party in whose favor a judgment is entered, a reasonable sum for attorneys'
fees and costs. Such attorneys' fees and costs shall be paid by the losing party
in such action. Each party shall also indemnify the other party against and hold
such other party harmless from all claims, suits, damages, costs, expenses,
demands and liability incurred by such party if such party becomes or is made a
party to any claim or action (a) instituted by the other party, except for
claims or actions based on gross negligence, willful misconduct or breach of
this Lease, so long as the each party's claim or action is legally adjudicated
in favor of each party and against the other party; or by any third party
against each party, or by or against any person holding any interest under or
using the Property by license of or agreement with each party; (b) for
foreclosure of any lien for labor or material furnished to or for Tenant or such
other person; otherwise arising out of or resulting from any act, transaction,
or omission of each party or such other person; or (d) necessary to protect each
party's interest under this Lease in a bankruptcy proceeding, or other
proceeding under Title 11 of the United States Code, as amended. Each party
shall reimburse the other party for any legal fees or costs incurred by such
other party in any such claim or action, except for legal fees and costs
involving claims or actions by each party against the other party in which case
all legal fees and costs will be paid by the non-prevailing party.
Section 12.02. LANDLORD'S CONSENT. Tenant shall pay Landlord's reasonable
attorneys' fees incurred in connection with ▇▇▇▇▇▇'s request for ▇▇▇▇▇▇▇▇'s
consent under Article Nine (Assignment and Subletting), or in connection with
any other act which ▇▇▇▇▇▇ proposes to do and which requires ▇▇▇▇▇▇▇▇'s consent.
ARTICLE THIRTEEN: MISCELLANEOUS PROVISIONS
Section 13.01. NON-DISCRIMINATION. Tenant promises, and it is a condition
to the continuance of this Lease, that there will be no discrimination against,
or segregation of, any person or group of persons on the basis of race, Color,
sex, creed, national origin or ancestry in the leasing, subleasing,
transferring, occupancy, tenure or use of the Property or any portion thereof.
Section 13.02. WAIVER OF SUBROGATION. Landlord and Tenant each hereby
waive any and all rights of recovery against the other, or against the officers,
employees, agents or representatives of the other, for loss of or damage to its
property or the property of others under its control, if such loss or damage is
covered by any insurance policy in force (whether or not described in this
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Lease) at the time of such loss or damage. Upon obtaining the policies of
insurance described herein, Landlord and Tenant shall give notice to the
insurance carrier or carriers of the foregoing mutual waiver of subrogation.
Section 13.03. LANDLORD'S LIABILITY; CERTAIN DUTIES.
(a) As used in this Lease, the term "Landlord" means only the current
owner or owners of the fee title to the Property or the leasehold estate under a
ground lease of the Property at the time in question. Each Landlord is obligated
to perform the obligations of Landlord under this Lease only during the time
such Landlord owns such interest or title. Any Landlord who transfers its title
or interest is relieved of all liability with respect to the obligations of
Landlord under this Lease to be performed on or after the date of transfer.
However, each Landlord shall deliver to its transferee all funds previously paid
by Tenant if such funds have not yet been applied under the terms of this Lease.
(b) Tenant shall give written notice of any failure by Landlord to perform
any of its obligations under this Lease to Landlord and to any ground lessor,
mortgagee or beneficiary under any deed of trust encumbering the Property whose
name and address have been furnished to Tenant in writing. Landlord shall not be
in default under this Lease unless Landlord (or such ground lessor, mortgagee or
beneficiary) fails to cure such non-performance within thirty (30) days after
receipt of Tenant's written notice. However, if such non-performance reasonably
requires more than thirty (30) days to cure, Landlord shall not be in default if
such cure is commenced within such thirty (30) day period and thereafter
diligently pursued to completion. Notwithstanding the foregoing, in the event of
an emergency Tenant shall have the right, without giving prior notice to
Landlord, to take such action as Tenant deems reasonably necessary in the
circumstances. Tenant shall notify Landlord or such action taken as soon as is
reasonably practical and, in the event such action was the responsibility of
Landlord hereunder, shall be entitled to reimbursement from Landlord of any
costs incurred by ▇▇▇▇▇▇ in taking such action.
Upon the execution of this Lease, Tenant shall deposit with Landlord a
cash Security Deposit in the amount set forth in Section 1.11 above. Landlord
may apply all or part of the Security Deposit to any unpaid rent or other
charges due from Tenant or to cure any other defaults of Tenant. If Landlord
uses any part of the Security Deposit, Tenant shall restore the Security Deposit
to its full amount within ten (10) days after Landlord's written request.
Tenant's failure to do so shall be a material default under this Lease. No
interest shall be paid on the Security
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Deposit. Landlord shall not be required to keep the Security Deposit separate
from its other accounts and no trust relationship is created with respect to the
Security Deposit.
Section 13.04. SEVERABILITY. A determination by a court of competent
jurisdiction that any provision of this Lease or any part thereof is illegal or
unenforceable shall not cancel or invalidate the remainder of such provisions of
this Lease, which shall remain in full force and effect.
Section 13.05. INTERPRETATION. The captions of the Articles or Sections of
this Lease are to assist the parties in reading this Lease and are not a part of
the terms or provisions of this Lease. Whenever required by the context of this
Lease, the singular shall include the plural and the plural shall include the
singular. The masculine, feminine and neuter genders shall each include the
other. In any provision relating to the conduct, acts or omissions of Tenant,
the term "Tenant" shall include Tenant's agents, employees, contractors,
invitees, successors or others using the Property with ▇▇▇▇▇▇'s expressed or
implied permission.
Section 13.06. INCORPORATION OF PRIOR AGREEMENTS; AMENDMENTS AND
MODIFICATIONS. This Lease is the only agreement between the parties pertaining
to the lease of the Property and no other agreements are effective. All
amendments and modifications to this Lease shall be in writing and signed by all
parties. Any other attempted amendment or modification shall be void.
Section 13.07. NOTICES. All notices required or permitted under this Lease
shall be in writing and shall be personally delivered or sent by overnight
courier. Notices to Tenant shall be delivered to the address specified in
Section 1.03. above, except that upon ▇▇▇▇▇▇'s taking possession of the
Property, the Property shall be Tenant's address for notice purposes. Notices to
Landlord shall be delivered to the address specified in Section 1.02 above. All
notices shall be effective upon receipt or when proper delivery is refused in
accordance with this Section 13.07. Either party may change its notice address
upon written notice to other party.
Section 13.08. WAIVERS. All waivers must be in writing and signed by the
waiving party. Landlord's failure to enforce any provision of this Lease or its
acceptance of rent shall not be a waiver and shall not prevent Landlord from
enforcing that provision or any other provision of this Lease in the future. No
statement on a payment check from Tenant or in a letter accompanying a payment
check shall be binding on Landlord. Landlord may, with or without notice to
Tenant, negotiate such check without being bound
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to the conditions of such statement.
Section 13.09. NO RECORDATION. Tenant shall not record this Lease without
prior written consent from Landlord. However, either Landlord or Tenant may
require that a "Short Form" memorandum of this Lease executed by both parties be
recorded.
Section 13.10. BINDING EFFECT; CHOICE OF LAW. This Lease binds any party
who legally acquires any rights or interest in this Lease from Landlord or
Tenant. However, Landlord shall have no obligation to ▇▇▇▇▇▇'s successor unless
the rights or interests of ▇▇▇▇▇▇'s successor are acquired in accordance with
the terms of this Lease. The laws of the state in which the Property is located
shall govern this Lease, without respect to the principles of conflicts of laws
thereof.
Section 13.11. CORPORATE AUTHORITY; PARTNERSHIP AUTHORITY. If Tenant is a
Corporation, each person signing this Lease on behalf of Tenant represents and
warrants that he has full authority to do so and that this Lease binds the
corporation. Within thirty (30) days after this Lease is signed, Tenant shall
deliver to Landlord a certified copy of a resolution of Tenant's Board of
Directors authorizing the execution of this Lease or other evidence of such
authority reasonably acceptable to Landlord. If ▇▇▇▇▇▇ is a partnership, each
person signing this Lease for Tenant represents and warrants that he is a
general partner of the partnership, that he has full authority to sign for the
partnership and that this Lease binds the partnership and all general partners
of the partnership. Tenant shall give written notice to Landlord of any general
partner's withdrawal or addition. Within thirty (30) days after this Lease is
signed ▇▇▇▇▇▇ shall deliver to landlord a copy of ▇▇▇▇▇▇'s recorded statement of
partnership or certificate of limited partnership.
Section 13.12. JOINT AND SEVERAL LIABILITY. All parties signing this
Lease as Tenant shall be jointly and severally liable for all obligations of
Tenant.
Section 13.13. EXECUTION OF LEASE. This Lease may be executed in
counterparts, and, when all counterpart documents are executed, the counterparts
shall constitute a single binding instrument. The delivery of this Lease by
Landlord to Tenant shall not be deemed to be an offer and shall not be binding
upon either party until executed and delivered by both parties.
Section 13.14. RELATIVE POSITION OF THE PARTIES. It is agreed and
understood by ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ that each is knowledgeable and sophisticated
in matters of business and real
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estate, including the matters set out in each section of this Lease. It is also
agreed that this Lease and each section thereof shall not be interpreted against
the drafting party but shall be interpreted equally for and against each party
hereto.
ARTICLES FOURTEEN: BROKERS
Section 14.01. BROKERS. Except as set forth in Sections 1.08, 1.09 and
1.10, the parties each represent and warrant that no agent, broker, finder or
other party is entitled to a commission or fee with respect to this Lease or the
property by reason of any relationship with ▇▇▇▇▇▇. The parties each shall and
does hereby indemnify and hold the other harmless from all claims, actions,
damages, liabilities, costs and expenses of or occasioned by any such
relationship.
Section 14.02. BROKER'S COMMISSIONS. Except as set forth in Section 1.10,
Landlord shall not be responsible or liable for any broker's commission, charge,
percentage, contingency or fee with reference to the negotiation, procurement
or execution of this Lease.
ARTICLE FIFTEEN: LANDLORD'S CONSTRUCTION OF IMPROVEMENTS
Section 15.01. PREPARATION FOR OCCUPANCY. Both Landlord and ▇▇▇▇▇▇
understand and acknowledge that, upon mutual execution of this Lease, Landlord
will expend money, material and labor to prepare the Property for ▇▇▇▇▇▇'s
occupancy, and except as otherwise provided in this Lease, that Tenant is
obligated under this Lease as of the date and time of Execution.
Section 15.02. REASONABLE COMPLIANCE WITH SPECIFICATIONS. Landlord and
▇▇▇▇▇▇ further understand and acknowledge that minor changes in square footage
and construction could be necessitated prior to occupancy, and both parties
agree that this Lease will remain in full force and effect upon delivery of
possession by Landlord to Tenant, so long as there is reasonable compliance with
the Plans and Specifications set out in Exhibit "B". Any additional cost of
changes in size, design or construction necessitated by any rule, regulation,
code or ruling of any governmental agency, district, commission, board or other
authoritative body, or at the request of Tenant, will be paid by Tenant prior to
occupancy, and upon written demand of Landlord, which demand will include the
total additional cost chargeable to Tenant and the method of calculation of such
cost.
Section 15.03. SCOPE OF WORK. ▇▇▇▇▇▇▇▇ agrees to furnish all labor,
services, materials, tools, equipment, and supplies required
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for the prompt and efficient completion of the Property, including all work
necessary or incidental thereto, as more particularly described in the Plans and
Specifications.
It is acknowledged and understood that the Plans and specifications
summarized in Exhibits B through C are not fully completed and/or agreed upon as
of the Execution Date of this Lease. Regardless of the status of the Plans and
Specifications as of the Execution Date of this Lease, it is the understanding
and intention of the parties that the Property shall be of a type and quality
consistent with current industry standards for "concrete tilt-up industrial
buildings", as such term is commonly used in the real estate development
business.
Section 15.04. COMPLETION OF THE PROPERTY.
(a) SUBSTANTIAL COMPLETION. Subject to the provisions of Section 1.13
hereof, "Substantial Completion" shall mean the point in the progress of the
Property when construction is sufficiently complete so that no item of work
remaining to be Performed would prevent Tenant from using the Property for the
purposes contemplated by this Lease. Landlord shall, as construction of the
Property nears completion, provide Tenant with advance notice of the approximate
date at which Substantial Completion may occur. Then, upon notification by
▇▇▇▇▇▇▇▇ that he considers the Property according to the Plans and
Specifications as being substantially complete, Tenant and Landlord's engineer
("Engineer") shall promptly inspect the Property and the Plans and
Specifications to determine whether it is substantially complete. If the
Engineer reasonably determines and Tenant reasonably agrees that the Plans and
Specifications are substantially complete, he or she shall issue a Certificate
of Substantial Completion indicating that substantial completion has been
achieved. If Tenant reasonably disagrees or if the Engineer's inspection
discloses any item which prevents a determination of substantial completion
("Major Item"), then Landlord shall complete such item before the Engineer
issues his Certificate of Substantial Completion or call for arbitration as set
forth in subparagraph (d). Landlord shall execute and record a Notice of
Completion within fifteen (15) days after Substantial Completion of the Work.
▇▇▇▇▇▇▇▇ agrees to furnish in connection with the Engineer's issuance of
the Certificate of Substantial Completion, Conditional Lien Waiver and Release
Forms Upon Final Payment which conform to Civil Code Section 3262, for work,
labor and materials used in performance of this Lease, from Landlord and each
subcontractor and supplier that has served a preliminary 20-day notice.
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(b) PUNCH LIST. At the time of Substantial Completion, Tenant and
Landlord shall prepare, and Engineer shall approve, a written list of minor
items ("Punch List") which must be completed by Landlord in order to achieve
final completion of the Plans and Specifications by Landlord under this Lease.
In the event Tenant and Landlord are unable to agree upon the minor items to be
included on the Punch List, Engineer's reasonable determination and
classification shall be conclusive, subject however to the parties' rights to
arbitrate any dispute regarding such determination in accordance with the
provisions of subsection (d) immediately hereinbelow. Unless otherwise agreed
upon in writing by the parties, Landlord shall complete Punch List work within
thirty (30) days after receipt of the agreed upon Punch List. If Landlord fails
to complete the Punch List within thirty (30) days, Tenant shall be entitled to
complete the Punch List itself and deduct the cost thereof from any payments
remaining to be made by Tenant under this Lease. Engineer shall review the Punch
List and determine the estimated cost of completing the Punch List work.
(c) RETENTION. Tenant shall be entitled to withhold from payment of
rent, as defined in Section 4.01, an amount equal to one hundred fifty
percent (150%) of the estimated cost of completing the Punch List work
("Retention") pending completion of the Punch List work. Within seven (7)
days after notification of Engineer's certification of completion of the
Punch List work, Tenant shall pay Landlord all sums due hereunder. If Tenant
is late in paying Landlord, Tenant shall pay Landlord a late charge equal to
five percent (5%) of the amount due plus interest on such amount due at the
lesser of that maximum legal interest rate allowed by law or fifteen percent
(15%) until such amounts are paid.
(d) ARBITRATION. In the event of a dispute or disagreement regarding
Engineer's determination of those minor items to be included on the Punch List
or other matters set forth in subparagraph (a) above, said dispute shall be
submitted to binding arbitration for decision. Upon either party's written
notice to the other party of its "Intention to Arbitrate Dispute", each party
shall designate one (1) arbitrator. If any party neglects or refuses to appoint
an arbitrator within ten (10) days after receipt of such request, he shall lose
his or her right to such appointment but shall still be bound by the decision of
the arbitrators. If it is necessary to create an odd number of arbitrators, the
arbitrators shall choose another arbitrator. If such arbitrator is not chosen
within five (5) days of the arbitrators' appointments, on application by either
party, another arbitrator (or two, if necessary) shall be promptly appointed by
the then presiding Judge of the Superior Court of the State of California in and
for the County of Sacramento, acting in his or her
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individual capacity. The party making the application shall give the other
parties three (3) days notice of his or her application. The arbitrators shall
then meet in formal session to take evidence and hear arguments in accordance
with the rules of the American Arbitrators Association. Within thirty (30) days
of the formal session, the arbitrators will give written notice to all
interested parties of their "Collective Decision" by which each such party
hereby agrees to be bound. Should there be a disagreement among arbitrators, the
"Collective Decision" will be that favored by a majority of the arbitrators.
While any such arbitration is pending, Seller may at its sole discretion,
continue to perform under the terms and conditions of this Agreement. Any
arbitration proceeding conducted hereunder shall take place in Sacramento
County.
Section 15.05. TIME OF PERFORMANCE. Time is of the essence of this Lease.
▇▇▇▇▇▇▇▇ agrees to begin work immediately upon execution of this Lease, to
prosecute construction of the Property energetically and in full cooperation
with Tenant and other contractors, and to complete the Property within five (5)
months of the date of issuance of the final shell building permit, subject to
any extensions granted pursuant to this Section (the "Completion Date").
Landlord shall submit a progress schedule for its work and shall cooperate, when
requested, in preparing progress schedules for the Property.
(a) FORCE MAJEURE. If Landlord is delayed in the prosecution or
completion of its obligations hereunder by the act, neglect or default of
Tenant, acts of God, including but not limited to flood, earthquake, tornado or
the like, wind, or other adverse weather including rain delays, governmental
entities, lock-outs, unavoidable casualties, war, civil commotion, strikes,
materials interruptions, fire or other casualty, or any similar matters, both
foreseeable and unforeseeable, beyond Landlord's control, or by delay in
issuance of any building or other required permit for a period in excess of
thirty (30) days from submittal of the final drawings for plan check or similar
review, then the time herein fixed for completion of such obligations shall be
extended by the number of days that Landlord has thus been delayed. Landlord
shall provide Tenant with written notice of any delay within ten (10) days after
commencement of such delay; provided, however, that only one notice is necessary
in the case of a continuing delay. Notwithstanding the occurrence of any of the
foregoing, Landlord shall use all due diligence to complete the Property by the
Completion Date.
(b) LIQUIDATED DAMAGES. THE PARTIES ACKNOWLEDGE THAT IF LANDLORD DOES NOT
COMPLETE THE PROPERTY BY THE COMPLETION DATE (AS
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SUCH DEADLINE MAY BE EXTENDED PURSUANT TO THIS SECTION), TENANT SHALL SUFFER
SUBSTANTIAL DAMAGE, PROOF OF WHICH WOULD BE COSTLY, DIFFICULT AND
IMPRACTICAL. THEREFORE, LANDLORD SHALL PAY TO TENANT LIQUIDATED DAMAGES IN
THE AMOUNT OF FIVE HUNDRED DOLLARS EVEN ($500.00) PER DAY FOR EACH DAY
BETWEEN THE ADJUSTED DEADLINE FOR COMPLETION AND THE ACTUAL DATE OF
SUBSTANTIAL COMPLETION OF THE PROPERTY. THE PARTIES AGREE THAT SUCH AMOUNT
REPRESENTS A REASONABLE SUM CONSIDERING ALL OF THE CIRCUMSTANCES EXISTING ON
THE DATE OF THIS LEASE AND REPRESENTS A FAIR AND REASONABLE ESTIMATE OF THE
DAMAGES WHICH WILL BE INCURRED BY REASON OF LATE COMPLETION PERIOD THE
PARTIES HEREBY EXPLICITLY ACKNOWLEDGE AND AGREE THAT THIS LIQUIDATED DAMAGES
PROVISION SHALL NOT APPLY IF SUBSTANTIAL COMPLETION, AS SUCH TERM IS DEFINED
HEREINABOVE, IS REACHED BY THE ADJUSTED DEADLINE FOR COMPLETION. THE PARTIES
WITNESS THEIR LEASE TO THIS LIQUIDATED DAMAGES PROVISION BY EXECUTION OF THIS
SECTION 15.05(b).
LANDLORD: /s/ Panattoni Development Company
---------------------------------
By:
------------------------------
TENANT:
---------------------------------
By: /s/ Pacific Rice Products
------------------------------
Its:
-----------------------------
Section 15.06. CHANGES/EXTRA WORK. Tenant, without invalidating this
Lease, may order changes in the Plans and Specifications within the general
scope of this Lease consisting of additions, deletions, or other revisions
("Change Order"). The rent and the Completion Date shall be adjusted
accordingly. All such changes in the Plans and Specifications, including changes
in the rent and the Completion Date, shall be authorized only by written Change
Order, signed by ▇▇▇▇▇▇ and Landlord. Landlord, prior to the commencement of
such changed or revised work, shall submit promptly to Tenant written notice of
any claim for adjustment to the rent and Completion Date for such revised work
in a manner consistent with terms of this Lease. Any changes in the rent
resulting from any such Change Orders shall not affect the amount of any
brokerage commission(s), as set forth at Section 14.02 hereinabove.
If Landlord claims that performance of certain work entitles it to
additional compensation or to an extension of the Completion Date, Landlord
shall submit a request for Change Order, along with a cost estimate (including
Landlord's reasonable profit thereon) not to exceed fifteen percent (15%) of the
cost of such changes of performing the work. If the Tenant refuses to issue a
Change Order for such work, Landlord shall have no obligation to perform that
work, provided, however, Landlord may at its sole option perform
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the work and submit a claim for additional compensation and/or extension of the
agreed upon Completion Date within fifteen (15) days after such work is
completed. In the event Tenant and landlord do not agree on the amount of the
adjustment to the rent as a result of the changed work, then in the event it is
later determined that Landlord is entitled to compensation on account of its
claim, by negotiation, arbitration, or otherwise, Landlord shall be entitled to
payment of all actual costs, including but not limited to, labor, equipment,
subcontractors, engineering, interest, fees and materials incurred, together
with a fee of thirteen percent (13%) thereon. Nothing contained in this section
shall be construed as an authorization by Tenant for Landlord to perform work
not within the scope of work described in Section 15.03 above; specifically,
this second paragraph of this Section 15.06 is intended to provide Landlord a
method for performing and receiving payment for any work which may be required
by any government agency.
Section 15.07. CHANGED CONDITIONS. In the event Landlord, prior to the
Commencement Date, discovers any toxic substance or Hazardous Material, as such
terms are defined at Section 5.04 (b) hereinabove, Landlord shall promptly
advise Tenant of the existence of such condition and suspend its operations on
the Property. Upon such discovery, Tenant and Landlord shall, at Landlord's sole
cost perform a soil analysis or other needed site assessment (hereinafter "Site
Assessment") to determine the extent, nature and origin of the Hazardous
Materials; the Site Assessment shall be performed by a party to be mutually
agreed upon by ▇▇▇▇▇▇ and Landlord. In the event the Site Assessment reasonably
determines that the Hazardous Materials came onto the Property prior to the
execution date of this Lease, then Tenant may elect to terminate this Lease
unless Landlord agrees to pay for the costs of any and all remedial or removal
action necessary or required to clean-up any such toxic substance or Hazardous
Material. In the event of such termination, all deposits previously made by
Tenant shall be returned to Tenant and neither party shall have any further
rights or obligations hereunder as to each other.
In the event Tenant does not elect to terminate, the parties shall
equitably adjust the rent and the Completion Date to provide for any increase or
decrease costs resulting from such condition, provided, however, Tenant shall
not be obligated to bear the cost of any remedial action necessary to clean up
any Hazardous Materials which came onto the Property prior to the execution date
of this Lease which costs shall remain the sole responsibility of Landlord. In
the event the Tenant has not elected to terminate and the parties are unable to
agree as to the existence of changed or unknown conditions, or on an appropriate
price or time
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35
adjustment, Landlord may elect to proceed with the Property, and such election
shall not constitute a waiver of claims for additional compensation or time by
Landlord, nor an admission by either party of the validity of Landlord's
contention, or the amount, if any, of the price or time adjustment requested.
In the event the Site Assessment reasonably determines that the Hazardous
Materials came onto the Property after the Commencement Date of this Lease, then
Tenant shall bear the cost of any remedial action necessary to clean up any such
Hazardous Materials, and further, shall equitably adjust the base rent and the
Completion Date to provide for any increased or decreased costs to Landlord
resulting from such condition.
Section 15.08. LIENS. Landlord shall defend, indemnify and hold Tenant
harmless against any and all claims, liability, loss, damage, cost or expenses,
including reasonable attorneys' fees, awards and judgments, arising by reason of
any claims, liens, stop notices or bond claims (collectively "Liens") asserted
for labor, materials, or equipment used or furnished to be used on the Property,
or union trust fund payments. ▇▇▇▇▇▇▇▇ agrees to cause the effect Liens to be
eliminated within thirty (30) days after written demand is made by ▇▇▇▇▇▇,
provided, however, Landlord retains the right to bond around any such Liens
pending final disposition and release of said ▇▇▇▇▇.
Section 15.09. QUALITY OF THE WORK. Landlord warrants to Tenant that all
materials and equipment furnished shall be new, unless otherwise specified in
the Plans and Specifications, Change Orders or other written notification to
Tenant, and that all work under this Lease shall be of good quality, free from
faults and defects and in conformance with the Plans and Specifications and
terms of the Lease and all applicable governmental codes in effect on the date
the building permit is issued for the Plans and Specifications. All work not
conforming to these requirements, including substitutions not properly approved
and authorized, may be considered defective.
Section 15.10. PROTECTION OF WORK. Landlord shall secure and protect the
work done hereunder and assume full responsibility for the condition thereof
until Substantial Completion. If the Property is destroyed or damaged, however,
by any cause for which Tenant, its contractors, agents or anyone directly or
indirectly employed by any of them or for whose acts any of them may be liable
is responsible, Tenant shall pay Landlord for all work performed prior to the
destruction or damage and for any work done by Landlord in rebuilding or
restoring the Property. ▇▇▇▇▇▇▇▇ agrees to provide such protection as is
necessary to protect the Property
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36
and the workers of Landlord and Tenant, from Landlord's operations.
Section 15.11. INSURANCE. Landlord shall procure at Landlord's sole cost
and expense and keep in effect at all times during progress of the work either
Comprehensive General Liability insurance or Commercial General Liability
insurance, which shall insure Landlord and Tenant from the following claims
which may arise out of or result from Landlord's acts, omissions or operations
under this Lease, whether such be by Landlord or by any subcontractor or
employee: all activities occurring on the Property; workers' compensation and
disability benefit claims; claims for damages because of bodily injury,
occupational sickness or disease, or death; claims for damages because of injury
to or destruction of tangible property; and claims for damages because of bodily
injury or death or any personal property damage arising out of the ownership,
maintenance or use of any motor vehicle. Such insurance coverage shall include
Broad Form Contractual liability insurance coverage insuring all of Landlord's
indemnity obligations under this Lease. Such coverage shall have a minimum
combined single limit of liability of at least Five Million Dollars Even
($5,000,000.00) and a general aggregate limit of Five Million Dollars Even
($5,000,000.00). All such policies shall be written to apply to all bodily
injury, property damage, personal injury and other covered loss, however,
occasioned, occurring during the policy term, shall be endorsed to add Tenant as
an additional insured, to provide that such coverage shall be primary and that
any insurance maintained by Tenant shall be excess insurance only. Such coverage
shall also contain endorsements: (a) deleting any employee exclusion of personal
injury coverage; (b) including employees as additional insureds; and providing
for coverage of employer's automobile non-ownership liability. All such
insurance shall provide for severability of interests; shall provide that an act
or omission of one of the named insureds shall not reduce or avoid coverage to
the other named insureds; and shall afford coverage for all claims based on
acts, omissions, injury and damage, which claims occurred or arose (or the onset
of which occurred or arose) in whole or in part during the policy period.
Landlord shall also maintain workers' compensation insurance in accordance with
California law, and employer's liability insurance with a limit not less than
One Million Dollars Even ($1,000,000.00) per employee and one Million Dollars
Even ($1,000,000.00) per occurrence. Such coverage shall be endorsed to waive
the insurer's rights of subrogation against ▇▇▇▇▇▇. Further, Landlord shall
provide a copy of such insurance certificates which name Tenant as an additional
insured under said policies.
Landlord shall purchase and maintain property insurance upon the Property
to the full insurable value thereof. This insurance
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37
shall include the interests of Tenant, Landlord and all contractors and
subcontractors in the Property and shall insure against the perils of fire and
extended coverage and shall include "all-risk" insurance for physical loss or
damage, including, without duplication of coverage, theft, vandalism and
malicious mischief. If not covered under the all-risk insurance, Landlord shall
effect and maintain similar property insurance on portions of the material
related to the Property stored off the Property or in transit. Any loss insured
under this paragraph shall be settled and adjusted with the insurance company
and paid to the appropriate parties only upon the prior written consent of
Tenant, which consent shall not be unreasonably withheld.
Landlord shall carry and shall also require all of Landlord's
subcontractors to obtain workmen's compensation insurance as required by law,
and broad form public liability insurance in prudent and reasonable amounts, as
reasonably determined by Landlord on a case-by-case basis.
Section 15.12. INDEMNITY. Landlord shall, with respect to all work which
is covered by or incidental to this Lease defend, indemnify, and hold Tenant and
Tenant's agents and employees harmless from and against any and all claims,
liability, loss, damage, costs, or expenses, including reasonable attorneys'
fees, awards, fines, or judgments arising by reason of the death or bodily
injury to persons or injury to property, arising out of or resulting from
construction of the Property according to the Plans and Specifications, provided
that such injury is caused in whole or in part by the negligence or wilful
misconduct of Landlord, its subcontractors or employees, regardless of whether
or not it is caused in part by a party indemnified hereunder. Provided, however,
Landlord shall not be obligated under this Lease to indemnify Tenant with
respect to any claim, liability, loss, damage, cost or expense caused in whole
or in part by any wilful misconduct or negligence of Tenant or anyone employed
directly or indirectly by ▇▇▇▇▇▇, including subcontractors, or anyone for whose
acts any one of them may be liable, regardless of whether or not it was caused
in part by Landlord.
Section 15.13. CLEANUP. Landlord shall perform its work so as to maintain
the site in a clean, safe and orderly condition. Upon completion of the
Property, Landlord shall remove from the site all temporary structures, debris
and waste incident to its operation.
Section 15.14. GUARANTEE. Landlord guarantees all materials and
workmanship and agrees to replace, at is sole cost and expense, and to the
reasonable satisfaction of Tenant, any and all materials
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38
or work adjudged defective or improperly installed, and all adjacent work and
materials which may be disrupted in so doing during a period of two years from
Substantial Completion of the Property. To the extent any such replacement
interferes with ▇▇▇▇▇▇'s reasonable use of the Property as contemplated in this
Lease, the rent shall be abated accordingly. In the event Tenant and landlord
cannot agree on whether the material or work is defective or improperly
installed, Engineer's determination shall be final. This guarantee shall not
reduce, and is in addition to, Landlord's liability under the other provisions
of this Lease.
Section 15.15. COMPLIANCE WITH APPLICABLE GOVERNMENTAL STATUTES AND
REGULATIONS.
(a) Landlord, his employees, subcontractors, and all others acting under
his discretion or control, shall at all times observe and comply with, insofar
as they may be applicable, any and all laws, ordinances, statutes, rules and
regulations of the United States and the State of California, of their executive
and administrative agencies and of any and all other governmental agencies
having any jurisdiction over the work to be done hereunder, including, but not
limited to all building codes and labor, health and safety laws and regulations.
(b) It shall be the responsibility of the Landlord to insure that the
complete structure meets and passes the inspection and approval of appropriate
city, county and state building inspection agencies. ▇▇▇▇▇▇▇▇ agrees that the
completed structure shall strictly conform in every regard to all federal and
state laws and any and all other applicable ordinances, rules and regulations.
Section 15.16. PERMITS, LICENSES AND FEES. ▇▇▇▇▇▇▇▇ agrees to secure and
pay for all necessary permits and licenses necessary to comply with all laws,
ordinances, rules, regulations, orders and requirements of any city, county,
state, federal or other public body having jurisdiction as may be required for
the proper execution, performance and completion of the Property under this
Lease or which may effect or apply to the Property. Landlord shall pay all
applicable fees and charges, all utility connection fees, inspection fees and
other fees which may be required by law and imposed by any such public body for
the performance and completion of the Plans and Specifications under this Lease.
Landlord's obligation to pay for any permits, licenses and/or fees relating to
construction and completion of the Property shall be limited to a maximum of
Ninety-Thousand Dollars Even ($90,000.00).
Section 15.17. TAXES. ▇▇▇▇▇▇▇▇ agrees to accept full and exclusive
liability for the payment of all sales, use, withholding,
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39
income, excise, and similar taxes, transportation taxes, and of all
contributions and taxes for unemployment insurance and old age retirement
benefits, annuities or pensions or similar taxes or contributions now or
hereafter imposed by the United States or any state or governmental subdivision
thereof or labor organization measured by the wages, salaries or other
remuneration paid persons employed by Landlord and engaged in the performance of
the Plans and Specifications, or because of the Plans and Specifications to be
done under the Lease or because of the use of any equipment, supplies, material
or labor in the performance of this Lease; and Landlord further agrees to comply
with all rules and regulations applicable thereto. In the event Tenant is held
liable to pay any such taxes or contributions, ▇▇▇▇▇▇▇▇ agrees to supply Tenant
with all records necessary to compute the same and to fully reimburse Tenant
upon demand for the amount thereof paid by ▇▇▇▇▇▇ and ▇▇▇▇▇▇ shall have the
right to deduct any amount so paid from any sums due Landlord hereunder.
Section 15.18. LICENSE. Landlord represents and warrants that he is a duly
licensed general contractor by the State in which the project shall be
constructed, that the shall maintain said license in good standing during the
term of this Lease and that all subcontractors shall be duly licensed by said
State. Landlord further represents and warrants that he is experienced and
qualified to perform the construction of the Property in accordance with the
Plans and Specifications.
Landlord and ▇▇▇▇▇▇ have signed this Lease at the place and on the dates
specified adjacent to their signatures below and have initialed all Lease Pages
and Exhibit Pages which are attached hereto and incorporated herein by
reference.
DATED: Oct. 3, 1989 LANDLORD:
---------------
PANATTONI DEVELOPMENT COMPANY
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Its:
--------------------------
DATED: October 4, 1989 TENANT:
----------------
PACIFIC RICE PRODUCTS, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Its: President
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Its: Chief Executive Officer
40
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇
Its: Executive Vice President
41
ADDENDUM TO LEASE
DATED OCTOBER 3, 1989
BETWEEN ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ D/B/A
PANATTONI DEVELOPMENT COMPANY, AS LANDLORD
AND PACIFIC RICE PRODUCTS, INC.,
AS TENANT
Landlord hereby acknowledges that Tenant may require additional space for its
business purposes prior to the expiration of the term of this Lease.
Accordingly, notwithstanding anything to the contrary contained in this Lease,
Tenant shall have the option to lease additional space within Santa ▇▇▇▇▇ Court,
as and when the same may be constructed by Landlord throughout the term hereof,
upon the following terms and conditions:
(a) As and when such additional space becomes available throughout the
term of this Lease, Landlord shall first offer such space to Tenant at the then
prevailing fair market rent. The parties hereto agree to negotiate in good faith
with respect to the determination of fair market rent.
(b) In the event Tenant does not elect to accept such space at the then
prevailing fair market rent as set forth in section (a) above, and Landlord
shall thereafter receive a bona fide offer from a third party to lease such
additional space at a rent which Landlord is willing to accept, Landlord shall
provide Tenant with written notice of such third party offer, specifying the
rent set forth therein, and Tenant shall thereafter have ten (10) days within
which to elect to lease such additional space at the same rent as set forth in
said third party offer.
(c) In the event Tenant elects to lease the additional space in accordance
with either section (a) or section (b) above, the leasing of such additional
space shall otherwise be on the same terms and conditions as contained in this
Lease.
IN WITNESS WHEREOF, the parties have executed this Addendum this 4th day of
October, 1989.
LANDLORD:
PANATTONI DEVELOPMENT COMPANY
BY: /s/ Panattoni Development Company
-----------------------------------
TENANT:
PACIFIC RICE PRODUCTS, INC.
BY: /s/ ▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------
Title: Executive Vice President
FIRST AMENDMENT
to ABSOLUTE NET LEASE
Dated October 3, 1989
By and Between
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, LESSOR
and
PACIFIC RICE PRODUCTS, INC., LESSEE
The parties above acknowledge and hereby agree that the lease as
reference above, the lease riders, the addendum and the exhibits attached
thereto are hereby amended as follows:
1. The rent as stated on page 2 in Section 1.12 shall be amended to be
$16,105 per month for the first 60 months of the lease term and $18,505 for the
second 60 months of the lease term.
All other terms and conditions of the lease shall remain in full force
and effect.
In witness whereof the parties have executed this amendment as of the
dates signed below.
LESSOR LESSEE
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ PACIFIC RICE PRODUCTS, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
-------------------------------- ----------------------------------
Its: Partner Its: Exec VP
-------------------------------- ----------------------------------
Date: 11/14/90 Date: 11/9/90
-------------------------------- ----------------------------------
SECOND AMENDMENT
to ABSOLUTE NET LEASE
Dated
October 3, 1989
By and Between
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, LESSOR
and
PACIFIC RICE PRODUCTS, INC., LESSEE
The parties above acknowledge and hereby agree that the lease as referenced
above, the lease riders, the addendum and the exhibits attached thereto are
hereby amended as follows:
1. The commencement date of the lease shall be July 18, 1990 and the
expiration of the lease shall be May 31, 2000.
All other terms and conditions of the lease shall remain in full force and
effect.
In witness whereof the parties have executed this amendment as of the dates
signed below.
"Lessor" "Lessee"
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ PACIFIC RICE PRODUCTS, INC.
By: /s/ By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
------------------------------- --------------------------------
Its: Partner Its: Exec VP
------------------------------- --------------------------------
Date: 11/8/90 Date: 10/31/90
------------------------------- --------------------------------
PANATTONI
--------------------
DEVELOPMENT COMPANY
March 15, 1990
Mr. ▇▇▇▇ ▇▇▇▇▇▇
Pacific Rice Products
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Dear ▇▇▇▇:
This letter is to confirm your telephone conversation with ▇▇▇ ▇▇▇▇▇▇▇ of our
company regarding the financing for change orders to be constructed within our
approximately 109,000 square foot building on Santa ▇▇▇▇▇ Court in Woodland,
California.
Per Rod, you would like to amortize the value of the Change Order improvements
over the term of the underlying lease, i.e. ten years commencing upon
substantial completion, or such other date as specified in the Lease executed on
October 3, 1989, using an annual interest rate of 12%. From our construction
department, I received an intercompany memo summarizing your Change Orders. As
you can see from the attached, the total to be included within your monthly rent
and amortized per the terms above, is $179,535.50, with one additional Change
Order, a switch gear, to be paid directly to PDC and not included in your
monthly rent.
Based on the above, your monthly rental, as described in the executed lease,
section 1.12, will be increased by $2,575 per month or approximately $.043
per square foot for a total of $16,105 per month for the first sixty (60)
months and shall be increased to $18,505 for months sixty one (61) through
one hundred twenty (120).
Please indicate your approval, as well as authorize the preparation and
execution of an amendment to the existing lease, for the above terms and
conditions by signing the bottom of this correspondence and returning the
original to me as soon as possible, keeping a copy for your records.
▇▇▇▇ ▇▇▇▇▇▇
Pacific Rice Products
March 15, 1990
page 2
I have also spoken to ▇▇▇▇▇ ▇▇▇ of our Company regarding possible additional
space you may require in the south end of the building in the near future. I'll
be contacting you soon with more information. Until then, if you have any
further questions or if I can be of any further assistance, please don't
hesitate to call me at (▇▇▇) ▇▇▇-▇▇▇▇. Thank you in advance for your prompt
response to this agreement.
Sincerely,
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Marketing Coordinator
Approved and Accepted:
PACIFIC RICE PRODUCTS
/s/ ▇▇▇▇ ▇▇▇▇▇▇ 3/22/90
------------------------------------------- -------------------
NAME DATE
Executive VP
-------------------------------------------
TITLE
enclosure
CC: ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
ASSIGNMENT, ASSUMPTION AND CONSENT AGREEMENT
THIS ASSIGNMENT, ASSUMPTION AND CONSENT AGREEMENT (this "Agreement") is entered
into as of the 9th day of MAY 1994 by and between ▇▇▇▇▇ ▇▇▇▇ ("Lessor"),
PACIFIC GRAIN RICE PRODUCTS, INC., a California corporation ("Assignor"), and
VALLEY RECORD DISTRIBUTORS, a California corporation ("Assignee"), with
reference to the following facts:
▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇▇▇"), as predecessor-in-interest to Lessor,
and Assignor have heretofore entered into that certain Build-To-Suit Facility
Absolute Net Lease ("Absolute Net Lease") dated as of October 3, 1989, pursuant
to which Panattoni leased to Tenant a building consisting of approximately
60,000 square feet of rentable space located on Santa ▇▇▇▇▇ Court, Woodland,
California, together with easements for ingress and egress and parking
(collectively, the "Property"), as more particularly described therein.
B. The Absolute Net Lease was amended by that certain First Amendment to
Absolute Net Lease dated November 14, 1990, that certain Second Amendment to
Absolute Net Lease dated November 8, 1990, and that certain letter agreement
dated March 15, 1990 (as amended, the "Lease").
C. Pursuant to Section 13.03 of the Lease, Lessor presently holds a
security deposit (the "Security Deposit") in the amount of Sixteen Thousand
One Hundred Five and No/100 Dollars--($16,105.00) as security for the
performance of the obligations of the tenant under the Lease.
▇. ▇▇▇▇▇▇▇▇ now desires to assign to Assignee all of its rights, title
and interest in the Lease, and ▇▇▇▇▇▇ is willing to consent to said assignment
on the conditions set forth below.
NOW, THEREFORE, in consideration of the mutual covenants and promises of
the parties and as otherwise provided herein, the parties hereto hereby agree as
follows:
1. EFFECTIVE DATE OF ASSIGNMENT. The assignment in this Agreement shall
take effect (the "Effective Date") on the earlier to occur of (i) July 31, 1994
or (ii) the date determined by Assignor upon not less than thirty (30) days'
prior written notice to Assignee and Lessor, and Assignor shall have delivered
possession of the Property to Assignee on such date.
2. ASSIGNMENT AND ASSUMPTION. Assignor hereby assigns and transfers to
Assignee all of its rights, title and interest in the Lease (including, without
limitation, Assignor's right to recover the Security Deposit held by ▇▇▇▇▇▇ at
the end of the
1.
term of the Lease), and ▇▇▇▇▇▇▇▇ accepts the assignment and assumes and agrees
to perform, as a direct obligation to Lessor, all the obligations of the tenant
under the Lease arising from and after the Effective Date.
3. PAYMENT TO ASSIGNEE. On or prior to the Effective Date, Assignor shall
pay to Assignee the amount of Seventy-Three Thousand Four Hundred Fifty and
Dollars ($73,450.00) as consideration for Assignee's obligations hereunder.
4. INDEMNITY BY ASSIGNEE. Assignor shall indemnify, protect, defend by
counsel reasonably satisfactory to Assignee and hold Assignee harmless from and
against any and all losses, costs, liabilities, damages and expenses, including,
without limitation, reasonable attorneys' fees, occurring prior to the Effective
Date and arising out of Assignor's obligations under the Lease.
5. INDEMNITY BY ASSIGNEE. Assignee shall indemnify, protect, defend by
counsel reasonably satisfactory to Assignor and hold Assignor harmless from and
against any and all losses, costs, liabilities, damages and expenses, including,
without limitation, reasonable attorneys' fees, occurring on and after the
Effective Date and arising out of Assignee's obligations under the Lease.
6. LESSOR'S CONSENT. Lessor consents to the assignment and assumption of
the Lease pursuant to this Agreement.
7. ASSIGNOR'S LIABILITY. Lessor hereby releases Assignor from all of its
obligations and liabilities as tenant under the Lease accruing on or after the
Effective Date.
8. SECURITY DEPOSIT. The parties acknowledge that ▇▇▇▇▇▇ presently holds
the Security Deposit as security for the performance of the obligations of the
tenant under the Lease.
9. RATIFICATION. The Lease as amended is hereby ratified, confirmed and
approved in all respects.
10. ENTIRE AGREEMENT. This Agreement represents the entire understanding
between the parties concerning the subject matter hereof, and there are no
understandings or agreements between them relating to the Lease or the Property
not set forth in writing and signed by the parties hereto. No party hereto has
relied upon any representation, warranty or understanding not set forth herein,
either oral or written, as an inducement to enter into this Agreement.
11. ATTORNEYS' FEES. If any party hereto commences an action against any
other party arising out of or in connection
2.
with this Agreement, the prevailing party or parties shall be entitled to
recover from the losing party or parties reasonable attorneys' fees and costs of
suit.
12. SUCCESSORS. This Agreement shall be binding on and inure to the
benefit of the parties hereto and their successors and assigns.
13. GOVERNING LAW. This Agreement shall be construed under and shall in all
respects be governed by the laws of the State of California.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
LESSOR: ASSIGNOR:
/s/ ▇▇▇▇▇ ▇▇▇▇ PACIFIC RICE PRODUCTS, INC.,
-------------------------------- a California corporation
▇▇▇▇▇ ▇▇▇▇
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
----------------------------------
Title: Executive Vice President
----------------------------------
By: /s/ ▇▇▇▇ ▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇
----------------------------------
Title: Treasurer
----------------------------------
ASSIGNEE:
VALLEY RECORDS DISTRIBUTORS,
a California corporation
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
----------------------------------
Title: PRESIDENT
----------------------------------
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
Title: C.F.O.
----------------------------------
3.
