REAL PROPERTY LEASE
THIS REAL PROPERTY LEASE ("lease") is entered into effective as of May
1, 1998, by and between XXXXXXXXX FARMS CORPORATION, a California corporation
("Landlord"), and MAJESTIC MODULAR BUILDINGS, LTD., a Maryland corporation
("Tenant"). Landlord and Tenant recite and agree as follows:
RECITALS
(a) Landlord is the owner of that certain improved real property (the
"Premises") commonly known as 000 0xx Xxxxxx, Xxxxxxx, Xxxxxxxxxx, and described
more fully in Exhibit "A" attached hereto and incorporated herein by this
reference.
(b) Landlord desires to lease the Premises to Tenant, and Tenant
desires to lease the Premises from Landlord, all on the terms and conditions set
forth below.
(c) Landlord has requested, and would not enter into this lease
without, an unconditional guaranty of Tenant's obligations under this lease from
Xxxxxx X. Xxxxxxxxx, Xxxxx X. Xxxxxxxxx, Cal-American Building Company, Inc.,
and The Majestic Companies, Ltd. in the form attached hereto marked Exhibit "B"
and incorporated herein by this reference.
AGREEMENT
NOW, THEREFORE, FOR GOOD AND VALUABLE CONSIDERATION, Landlord and
Tenant hereby agree as follows:
1. Premises. Landlord hereby leases the Premises to Tenant, and Tenant
hereby leases the Premises from Landlord, for the term of this lease and at the
rental and upon the conditions set forth below.
2. Term.
(a) The initial term of this lease shall commence on May 1,
1998 and shall end on April 30, 2003, unless terminated earlier as provided in
this lease or under applicable law.
(b) Tenant shall have two successive options to extend the
term of this lease (the "First Option" and the "Second Option," respectively);
provided, however, that neither option shall be effective if Tenant (i) has
defaulted under any provision of this lease and has failed to cure such default
within any cure period specified herein, or (ii) is in default under any of the
material terms and provisions of this lease when Tenant exercises the option or
when the term for which the Option is being exercised begins.
(c) To be effective, the First Option must be exercised on or
before October 31, 2002 by written notice from Tenant to Landlord. If Tenant
timely exercises the First Option, the term of this lease shall be extended for
an additional sixty (60) months (the "First Option Term") until April 30, 2008.
(d) To be effective, the Second Option must be exercised on or
before October 31, 2007 by written notice from Tenant to Landlord. If Tenant
timely exercises the Second Option, the term of this lease shall be extended for
an additional sixty (60) months (the "Second Option Term") until April 30, 2013.
(e) If this lease terminates for any reason, the unexpired
options shall terminate and be of no further force or effect.
(f) The base monthly rental payable during the first twelve
(12) months of the First Option Term shall be the fair market monthly rental of
the Premises as agreed upon by Landlord and Tenant, or as determined by
appraisal as provided in Section 2(h), but no less than the adjusted base
monthly rent for the last month of the original term without regard to any
temporary abatement.
(g) The base monthly rental payable during the first twelve
(12) months of the Second Option Term shall be the fair market monthly rental of
the Premises as agreed upon by Landlord and Tenant, or as determined by
appraisal as provided in Section 2(h), but no less than the adjusted base
monthly rent for the last month of the First Option Term without regard to any
temporary abatement.
(h) If Tenant timely exercises the First Option or the Second
Option, Landlord and Tenant shall attempt, in good faith within thirty (30) days
of the notice of exercise thereof, to agree upon the fair market monthly rental
of the Premises. If Landlord and Tenant have not agreed upon the fair market
monthly rental for the Premises, then Tenant may elect to either (x) terminate
the lease within ten (10) days of the aforesaid 30-day period or (y) have the
fair market monthly rental of the Premises determined by binding appraisal in
accordance with the following provisions:
(1) If, pursuant to the foregoing provisions, the
fair market monthly rental of the Premises is to be determined by appraisal, no
later than one hundred twenty (120) days prior to the commencement of the next
option term, Landlord and Tenant shall each notify the other of their selections
of appraisers to participate in the appraisal process.
(2) The two appraisers shall within forty-five (45)
days of the aforesaid 120-day period jointly determine the fair market monthly
base rental of the Premises. The joint determination of the fair market monthly
base rental for the Premises shall be the monthly rent payable during the first
twelve (12) months of the First Option Term or the Second Option Term (as
appropriate) under Section 3(a), below, subject to the minimum amount set forth
above.
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(3) If, within the aforesaid 45-day period, the two
appraisers cannot agree upon the fair market monthly base rental of the
Premises, they shall within ten (10) days thereafter jointly select a third
appraiser who shall, prior to the commencement of the next option term,
determine the fair rental value of the Premises. The fair rental value so
determined shall be the base monthly rent payable during the first twelve (12)
months of the First Option Term or the Second Option Term, as appropriate, under
Section 3(a), below, subject to the minimum amount set forth above. If the
appraisers cannot agree on the selection of a third appraiser, the parties shall
immediately petition the American Arbitration Association to select the third
appraiser. Within fifteen (15) days of being selected, the third appraiser shall
determine the fair rental value of the Premises,
(4) Each appraiser selected under this Section 2(h)
shall be a licensed MAI appraiser who is active in Stanislaus County or an
adjoining county.
(5) Landlord and Tenant shall each pay the fees of
the appraiser they select. If a third appraiser is required, the fees of the
third appraiser shall be paid 50% by Landlord and 50% by Tenant.
(6) In determining the fair rental value of the
Premises, the appraisers shall be instructed to consider the highest and best
use of the Premises in its then-existing structural layout and condition, on the
same terms as this lease except for base rent.
(7) In addition, commencing with the thirteenth month
of the First Option Term, if the First Option was duly exercised, and the
thirteenth month of the Second Option Term, if the Second Option was duly
exercised, the base monthly rent for the following twelve (12) month period
("Adjustment Period") shall be an amount equal to the greater of: (i) one
hundred three percent (103%) of the base monthly rent in effect immediately
prior to the commencement of such Adjustment Period (without regard to any
temporary abatement of rent then or previously in effect pursuant to the
provisions of this lease), or (ii) the product obtained by multiplying the base
monthly rent in effect immediately prior to the commencement of the Adjustment
Period (without regard to any temporary abatement of rent then or previously in
effect pursuant to the provisions of this lease) by a fraction, the numerator of
which is in the Index published nearest but prior to the commencement date of
the Adjustment Period and the denominator of which is the Index published
nearest but prior to the commencement of the twelve (12) month period
immediately preceding the Adjustment Period, provided, however, the adjustment
to the base monthly rent shall be no greater than one hundred six percent (106%)
of the prior base monthly rent that is being adjusted.
The term "Index" means the Consumer Price Index for
Urban Wage Earners and Clerical Workers, San Francisco-Oakland-San Xxxx, All
Items, 1982-1984 equals 100, published by the Bureau of Labor Statistics of the
United States Department of Labor. If the Bureau of Labor Statistics revises the
Index, the parties agree
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that the Bureau of Labor Statistics will be the sole judge of the comparability
of successive indexes, but if that agency fails to supply indexes that it deems
comparable, or if no succeeding index is published, then the parties shall
negotiate to determine an appropriate alternative published price index. If they
are unable to agree on an alternative index within thirty (30) days after the
request to do so is made by one party to the other, then either party may
request arbitration.
3. Rent and Impositions.
(a) Monthly Installments. On or before the first day of the
term of this lease, and on or before the first day of each calendar month
thereafter, Tenant shall pay to Landlord base rent for the Premises in monthly
installments as follows:
Months one (1) through six (6): $12,000/month
Months seven (7) through eighteen (18): $12,500/month
Months nineteen (19) through thirty (30): $13,500/month
Months thirty-one (31) through forty-two (42): $14,500/month
Months forty-three (43) through fifty-four (54): $15,000/month
Months fifty-five (55) through sixty (60): $15,500/month
If Tenant exercises the First Option or the Second
Option, the monthly base rental payable during the First Option Term or the
Second Option Term shall be determined as provided above in Section 2.
(b) Payments of Rental. All rent shall be payable in
installments as set forth above of lawful money of the United States on or
before the due date set forth above, without demand therefor or any deduction or
offset whatsoever, at the offices of Landlord at 0000 Xxxxxx Xxxx, Xxxxx 0,
Xxxxxxx, Xxxxxxxxxx 00000, or such other place as Landlord may direct by written
notice given to Tenant. All payments of rent or any other sums due under this
lease not received by Landlord within five (5) days after the due date shall be
subject to a late charge of 5% of the amount of the overdue payment.
(c) Definition of Impositions. The term "Impositions" shall
mean all real property taxes and assessments related to the Premises. The term
"Impositions" does not include federal, state or local income or franchise taxes
assessed against Landlord, or any estate, inheritance, succession or transfer
tax of Landlord.
(d) Payment of Impositions. Landlord shall pay or cause to be
paid to the appropriate person, entity or governmental agency, before the same
shall become delinquent, all Impositions which shall become due or payable
during the lease term. As additional rent, Tenant shall pay to Landlord the full
amount of such Impositions prior to the due date for payment without penalty or
interest provided that Landlord shall submit to Tenant notice of the amount of
payment of the Impositions. Where any Imposition is permitted to be paid in
installments, Landlord shall pay such Imposition in installments as and when
such installments become due and Tenant shall pay Landlord accordingly. All
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Impositions or installments of Impositions covering periods of time before or
after the lease term shall be prorated between Landlord and Tenant on a daily
basis. Tenant shall be responsible for paying all personal property taxes and
assessments applicable to periods of time after the commencement of the lease
term.
4. Use of Premises. The Premises shall be used for the manufacturing of
portable buildings and related uses and products, or with the prior written
consent of Landlord, which Landlord shall not unreasonably withhold, any other
industrial use provided such uses are permitted from time to time under
applicable zoning ordinances or other local or state ordinances, regulations,
agreements, or restrictions affecting the use of the Premises.
5. Improvements.
(a) As is Condition, Tenant agrees to accept the Premises in
its "as is" condition at the date of commencement of the lease term. Tenant
shall, at Tenant's sole cost and expense, design, construct, and install all
improvements to the Premises desired by Tenant or necessary for the Premises to
be occupied and used for the purposes contemplated hereby. Said improvements
shall be generally as shown in the conceptual plans delivered to Landlord prior
to signing of this lease. In addition to complying with all other requirements
pertaining to alterations and improvements as hereinafter set forth, detailed
plans and specifications for said initial alterations and improvements shall be
prepared by Tenant and submitted to Landlord for Landlord's review and approval,
which shall not be unreasonably withheld. Landlord's response to any request for
review and approval shall be given within seven (7) business days (excluding
Saturdays, Sundays, and legal holidays) following the date Landlord receives the
items to be reviewed.
(b) Liens. Tenant shall not suffer or permit to be enforced
against the Premises, or any part of or interest in it, any mechanic's,
materialman's, contractor's or subcontractor's lien arising from any work of
improvement, however it may arise.
(c)Improvements. After Tenant commences to do business from
the Premises, Tenant shall not make any alterations, improvements or additions
on or about the Premises involving anticipated costs in excess of Ten Thousand
Dollars ($10,000) without Landlord's prior written consent, which consent shall
not be unreasonably withheld or delayed. If Tenant assigns this lease, the
assignee shall be required to provide reasonable security to the Landlord for
the payment and performance of any alterations, improvements or additions
consented to by Landlord in excess of Ten Thousand Dollars ($10,000). All
alterations, improvements or additions which may be made on the Premises shall
remain the property of Tenant until expiration of the lease term or sooner
termination of this lease. Upon expiration of the lease term or sooner
termination of this lease, all alterations, improvements or additions on the
Premises shall, without compensation to Tenant, become the property of Landlord;
provided, however, that Tenant shall have the right, at its option, to remove
and retain any such alterations, improvements or additions (as well as any of
Tenant's personal property, equipment and trade fixtures), so long as
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Tenant repairs any damage to the Premises caused by such removal. Landlord may,
at its option exercised by written notice given to Tenant within thirty (30)
days of the termination of this lease, require Tenant to remove any improvements
made by Tenant to the Premises and to restore the Premises to its prior
condition, reasonable wear and tear excepted.
(d) Notice. To enable Landlord to post notices of
nonresponsibility on the Premises, Tenant shall give Landlord at least ten (10)
days prior written notice before commencing any alterations, additions or
improvements to the Premises involving anticipated costs in excess of Ten
Thousand Dollars ($10,000).
6. Maintenance and Repairs. Tenant shall maintain the Premises in good
order and condition, reasonable wear and tear excepted, and shall make all
necessary repairs thereto; provided, however, Landlord shall be responsible for
and shall undertake any repairs required to the foundation and structural or
load-bearing components of the Premises and major replacement of all or part of
the roof, except any repairs required as a result of acts or omissions of Tenant
or its agents or employees. Tenant shall be responsible for normal roof
maintenance and repairs not requiring replacement and for all aspects of all
electrical, plumbing, heating and air conditioning systems whether open or
concealed and even if considered to be "structural" in nature; and all
landscaping of the Premises. Except as provided in this Section 6 Landlord shall
not be required to furnish any services or facilities, or make any repairs,
alterations, additions, replacements or betterments in or to the Premises, and
Tenant hereby waives any and all rights, whether conferred by statute or
otherwise, to make any repairs, replacements, alterations or improvements at the
expense of Landlord. Tenant further waives all rights to make repairs at the
expense of Landlord pursuant to Section 1942 of the Civil Code of the State of
California, and all rights provided for by Section 1941 of said Civil Code, and
further agrees that any repairs to the Premises to make them tenantable shall be
undertaken by Tenant as part of the consideration for the rental of the
Premises. All repairs and replacements made by Tenant hereunder shall be of
equivalent quality, appearance and functionality as originally provided by
Landlord, unless otherwise approved by Landlord in writing.
7. Compliance With Laws, Ordinances, Etc. During the lease term, Tenant
at its sole cost and expense shall promptly comply with all present and future
laws, ordinances, orders, rules, regulations and requirements of all federal,
state and municipal governments, courts, departments, commissions, agencies, and
boards which may be applicable to Tenant's use of the Premises, including,
without limitation, all environmental laws, and regulations and the laws and
regulations governing the Americans with Disabilities Act (ADA), whether
requiring alterations, improvements, or repairs of a structural nature or not.
8.Indemnity.
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(a) Landlord shall not be liable and Tenant shall defend and
indemnify Landlord against all liability and claims of liability from the date
on which possession of the Premises is delivered to Tenant until expiration or
termination of this lease for damage or injury to person or property on or about
the Premises from any cause other then from the gross negligence or intentional
misconduct of Landlord or its agents or employees. Tenant waives all claims
against Landlord for damage or injury to person or property arising or asserted
to have arisen from damages to persons or property on or about the Premises
other than from the gross negligence or intentional misconduct of Landlord or
its agents or employees.
9. Hazardous Materials. For purposes hereof, "Hazardous Materials"
shall mean any and all flammable explosives, radioactive materials,
hydrocarbons, petroleum (and fractions and bi-products thereof), hazardous
waste, toxic substances, lead or similar materials, including but not limited to
those materials and substances defined as "hazardous substances," "hazardous
materials," hazardous waste" or "toxic substances" in the Environmental Laws.
For purposes hereof; "Environmental Laws" shall include the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, 42 U.S. Section
9601 et seq.; the Hazardous Materials Transportation Act, 39 U.S. Section 1801,
et seq.; the Solid Waste Disposal Act, as amended by the Resource Conservation
and Recovery Act, 42 U.S. Section 6901 et seq.; the Federal Clean Water Act, 33
U.S. Section 1251 et seq.; the Clean Air Act, 42 U.S Section 7401 et seq.; the
Xxxxxx-Cologne Water Quality Act, California Water Code Section 13020 et seq.;
the California Health and Safety Code, Section 25100 et seq., and California
Proposition 65 (including its statutory implementation), including all
amendments thereto, replacements thereof; and regulations adopted and
publications promulgated pursuant thereto, and all other laws, regulations,
rules or ordinances governing or regulating hazardous substances.
(a) Tenant shall have the right to store, use and dispose of
in, on, or about the Premises, such hazardous material as are customarily used
in businesses similar to Tenant's business, provided that such storage, use and
disposal shall be done in such manner as to have no adverse impact upon
Landlord's property and is done in compliance with all Environmental Laws.
Tenant agrees that it shall not use, dispose, store, generate, or release any
hazardous materials, on, from, or under the Premises in violation of any
Environmental Laws.
(b) Tenant acknowledges that neither Landlord nor any agent,
officer, broker or other representative thereof has made any warranty or
representation to Tenant regard the presence or absence of Hazardous Materials
on, under or about the Premises and that if Hazardous Materials inspection,
monitoring, testing, removal or remediation be required in respect of Premises,
and if such removal or other work shall have been caused by or resulted from
Tenant's use or alteration of the Premises, such shall be performed by Tenant at
its sole cost and expenses, and whether the work be structural or not. In
addition, Tenant shall be responsible for any and all asbestos or lead removal
work related to or necessary for its use, occupancy or enjoyment of the
Premises. Tenant shall not be
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responsible for costs, claims, damages or actions resulting from any form of
contamination or hazardous materials located in or on the Premises that existed
prior to commencement of the lease term.
(c) Tenant shall indemnify, defend, protect and hold harmless
Landlord, its brokers, directors, officers, employees, partners and agents from
and against any and all losses, claims, demands, actions, damages (whether
direct or consequential), penalties, liabilities, costs and expenses, including
all attorneys' fees and legal expenses, arising out of any violation or alleged
violation by Tenant or its employees, agents, contractors, guests or invitees of
any of the laws or regulations referred to in this paragraph, or breach of any
of the provisions of this paragraph. The foregoing indemnification shall survive
the expiration or termination of this lease.
10. Casualty.
(a) If the Premises are damaged by fire, earthquake, act of
God, the elements or other casualty, Landlord shall, subject to the provisions
of this Section 10, promptly repair the damage, if such repairs can, in
Landlord's reasonable opinion, be completed within ninety (90) calendar days and
with available insurance proceeds. If Landlord determines that repairs can be
completed within ninety (90) calendar days out of available insurance proceeds,
this lease shall remain in full force and effect, except that if such damage is
not the result of the gross negligence or willful misconduct of Tenant or
Tenant's agents, employees, contractors, licensees or invitees, the rent shall
be abated to the extent Tenant's use of the Premises is impaired, commencing
with the date of damage and continuing until completion of the repairs required
of Landlord.
(b) If such repairs to the Premises cannot be completed within
ninety (90) calendar days out of available insurance proceeds, Landlord may
elect, upon notice to Tenant given within thirty (30) calendar days after the
date of such fire or other casualty, to repair such damage, in which event this
lease shall continue in full force and affect, but rent shall be abated as
provided in Section 10(a). If Landlord does not so elect to make such repairs,
this lease shall terminate as of the date of such fire or other casualty. If
Landlord does not complete repairs within one hundred eighty (180) calendar days
after the occurrence of the damage, Tenant may elect to terminate this lease in
which case Tenant shall be relieved of all further liability under this lease.
(c) If the Premises are to be repaired under this Section 10,
Landlord shall repair the Premises out of any available insurance proceeds and
Tenant shall be entitled to use, for the repair, restoration and replacement of
any Tenant Improvements or Tenant's furniture, fixtures, and equipment, all
insurance proceeds available for Tenant Improvements and Tenant's furniture,
fixtures and equipment.
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11. Fire, Extended Coverage Insurance and Worker's Compensation
Insurance.
(a) Throughout the lease term, Landlord shall maintain, but
Tenant shall bear the cost and expense of; insuring the Premises and all of the
Tenant's improvements located on or appurtenant to the Premises against loss or
damage by fire and such other risks, including earthquake, as are now or
hereafter included in an extended coverage endorsement in common use for
commercial structures. The amount of the insurance shall not be less than the
full replacement value of the Premises. Earthquake insurance shall not be
acquired if the cost is deemed to be not commercially reasonable by Landlord.
(b) All policies of fire and extended coverage insurance
required by this Section (other than for Tenant's furniture, fixtures and
equipment) shall provide that the proceeds shall be adjusted by and paid to
Landlord.
(c) Tenant shall maintain worker's compensation insurance in
effect throughout the lease term for all employees of Tenant.
12. Public Liability Insurance. Throughout the lease term, Tenant shall
at its sole cost and expense keep or cause to be kept in force for the mutual
benefit of Landlord and Tenant comprehensive broad form general public liability
insurance in an amount not less than $2,000,000 per single occurrence,
$5,000,000 for aggregate occurrences. Landlord shall be named as an additional
insured on such policy.
13. Insurance Policy Form, Content and Insurer.
(a) All insurance required by express provisions of this lease
shall be carried only by responsible insurance companies licensed to do business
in California, and shall contain a provision to the effect that such insurance
may not be terminated without thirty (30) days prior written notice to Landlord.
(b) Upon request, Tenant shall furnish Landlord with copies of
all such policies promptly on receipt of them, or with certificates evidencing
the insurance. Tenant may effect for its own account any insurance not required
under this lease.
14. Failure to Maintain Insurance. If Tenant fails or refuses to
procure or maintain insurance as required hereby or fails or refuses to furnish
Landlord with required proof that the insurance has been procured and is in
force and paid for, Landlord shall have the right, at Landlord9s election and on
ten (10) days' prior written notice to Tenant, to procure and maintain such
insurance. The premiums paid by Landlord shall be treated as additional rent due
from Tenant, with interest at the maximum rate then permitted by law, to be paid
to Landlord within three (3) days after written demand by Landlord shall give
Tenant prompt notice of the payment of premiums, stating the amounts paid and
the names of the insurer or insurers.
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15. Condemnation.
(a) If the whole of the Premises is lawfully taken by
condemnation or in any other manner for any public or quasi-public purpose, this
lease shall terminate as of the date of such taking, and rent shall be prorated
to such date. If less than the whole of the Premises is so taken, this lease
shall be unaffected by such taking, provided that Tenant shall have the right to
terminate this lease by notice to Landlord given within ninety (90) calendar
days after the date of such taking if twenty percent (20%) or more of the
Building floor area or 40% of the total area of the entire Premises is taken,
increased by any adjacent area that is received by Landlord in a governmental
exchange and offered to Tenant to be included within the leased premises; and
the remaining area of the Premises is not reasonably sufficient for Tenant to
continue operation of its business. If either Landlord or Tenant so elects to
terminate this lease, the lease shall terminate on the thirtieth (30th) calendar
day after either such notice. Rent shall be prorated to the date of termination.
If this lease continues in force upon such partial taking, the rent shall be
equitably adjusted according to the remaining area of the Premises. The partial
taking contemplated in Section 30 of the lease, if it occurs, shall not give
Tenant a right to terminate the lease. Should Tenant be forced to temporarily
cease operating its business at the Premises as a result of a governmental
infrastructure process directly affecting the Premises, base rent shall be
abated until such time as Tenant is able to resume the operations of its
business.
(b) In the even of any taking, partial or whole, all of the
proceeds of any award, judgment or settlement payable by the condemning
authority shall be the exclusive property of Landlord and Tenant hereby assigns
to Landlord all of its right, title and interest in any award, judgment or
settlement from the condemning authority. Tenant, however, shall have the right,
to the extent that Landlord's award is not reduced or prejudiced, to claim from
the condemning authority (but not from Landlord) such compensation as may be
recoverable by Tenant in its own right for relocation expenses and damage to
Tenant's Improvements and personal property.
(c) In the event of a partial taking of the Premises which
does not result in a termination of this lease, Landlord shall, to the extent
there are proceeds from the partial taking available, restore the remaining
portion of the Premises as nearly as practicable to its condition prior to the
condemnation or taking, excluding any Tenant improvements. Tenant shall be
responsible at its sole cost and expense for the repair, restoration and
replacement of any other Tenant improvements or personal property.
16. Utilities. Tenant shall pay for all water, gas, heat, light, power,
telephone, sewer, and other utilities and services supplied to the Premises
during the term of this lease, together with any taxes, fees and/or assessments
thereon. Tenant shall pay for such utilities promptly and in no event after the
dates upon which payment is due. All such utilities shall be maintained in
Tenant's name. If Landlord is for any reason required to pay for such utilities,
Tenant shall reimburse Landlord for such utilities within three (3) days after
written demand therefor from Landlord.
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17. Tenant's Default and Remedies.
(a) The occurrence of any one or more of the following events shall
constitute a default and breach of this lease by Tenant:
(1) The vacating or abandonment of the Premises by Tenant.
(2) The failure by Tenant to observe or perform any of the covenants,
conditions or provisions of this lease to be observed or performed by Tenant,
including Tenant's obligations to pay rent and other sums hereunder as and when
due, which failure shall continue for a period of three (3) days after written
notice thereof from Landlord to Tenant.
(3) The making by Tenant of any general assignment, or general
arrangement for the benefit of creditors; the filing by or against Tenant of a
petition to have Tenant adjudged a bankrupt or a petition for reorganization or
arrangement under any law relating to bankruptcy (unless, in the case of a
petition filed against Tenant, the same is dismissed within ninety (90) days);
the appointment of a trustee or receiver to take possession of substantially all
of Tenant's assets or of Tenant's interest in this lease, where possession is
not restored to Tenant within ninety (90) days; or the attachment, execution or
other judicial seizure of substantially all of Tenant's assets located at the
Premises or of Tenant's interest in this lease, where such seizure is not
discharged within ninety (90) days.
(b) In the event of any such default or breach by Tenant, Landlord may at
any time thereafter, with or without notice or demand and without limiting
Landlord in the exercise of any other right or remedy which Landlord may have by
reason of such default or breach, terminate this lease and all rights of Tenant
hereunder by giving Tenant written notice of such termination. If this lease is
terminated, Tenant shall peaceably quit and surrender the Premises to Landlord,
and Landlord may, without further notice, enter upon, re-enter, possess and
repossess the same by summary proceedings, ejectment or other legal proceedings,
and again have, repossess and enjoy the same as if this lease had not been made,
and in any such event neither Tenant nor any person claiming through or under
Tenant by virtue of any law or an order of any court shall be entitled to
possession or to remain in possession of the Premises but shall forthwith quit
and surrender the Premises, and Landlord shall be entitled to recover:
(1) The worth at the time of award of the unpaid rent
which had been earned at the time of termination;
(2) The worth at the time of award of the amount by
which the unpaid rent which would have been earned after termination until the
time of award exceeds the amount of such rental loss that the Tenant proves
could have been reasonably avoided;
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(3) The worth at the time of award of the amount by
which the unpaid rent for the balance of the term after the time of award
exceeds the amount of such rental loss that the Tenant proves could be
reasonably avoided; and
(4) Any other amount necessary to compensate Landlord
for all the detriment 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: (i) all Landlord's
costs, charges and expenses, including the fees of counsel, agents and others
retained by Landlord, incurred in enforcing Tenant's obligations hereunder or
incurred by Landlord in any litigation, negotiation or transaction in which
Tenant causes Landlord, without Landlord's fault, to become involved or
concerned; (ii) all Landlord's costs, charges and expenses for repairs,
alterations and additions in or to the Premises and the fees and costs of
brokers and agents incurred in reletting or attempting to relet the Premises.
The "worth at the time of award" of the amounts referred to above shall
be computed by allowing interest at the maximum rate allowed by applicable law
from the date the rent became due and payable or the costs, charges and expenses
were incurred by Landlord. As used herein, unpaid rent includes rent and any
Impositions and other charges payable by Tenant hereunder. The worth at the time
of award of the amount referred to in Section (3) of paragraph 17(b) is computed
by discounting the amount at the discount rate of the Federal Reserve Bank of
San Francisco at the time of award plus one percent (1%).
(c) Should Landlord, following any default hereunder by
Tenant, elect to keep this lease in full force and effect, with Tenant retaining
the right to possession of the Premises (notwithstanding the fact that Tenant
may have abandoned the Premises), then Landlord, in addition to all other rights
and remedies Landlord may have at law or equity, shall have the right to enforce
all of Landlord's rights and remedies under this lease, including, but not
limited to, the right to recover the installments of rent and Impositions as
they become due under this lease. Notwithstanding any such election to have this
lease remain in full force and effect, Landlord may at any time thereafter elect
to terminate Tenant's right to possession of the Premises and thereby terminate
this lease for any previous breach or default which remains uncured, or for any
subsequent breach or default.
18. Assignment. Tenant shall not assign, sell or otherwise transfer
(collectively "assign" and the act thereof "assignment") its interest in this
lease or in the estate created hereby, in whole or in part, unless:
(a) The proposed assignment is first approved in writing by
Landlord, which approval shall not be unreasonably withheld;
(b) There is no existing default on the part of Tenant in the
performance or observance of any of the provisions hereof;
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(c) The assignment is in writing, is duly executed and
acknowledged by Tenant and the assignee and provides that the assignee assumes
and agrees to carry out and perform all of the provisions hereof on the part of
Tenant to be carried out and performed and Tenant remains fully liable under the
lease after the assignment; and
(d) An executed original of such assignment is delivered to
Landlord.
19. Subletting. Tenant shall have the right at any time and from time
to time during the term of this lease to sublet all or any part or parts of the
Premises and to extend or renew any sublease, provided that Tenant shall remain
primarily obligated to perform Tenant's obligations hereunder and provided that
the following provisions are complied with:
(a) Each sublease shall contain a provision requiring the
subtenant to attorn to Landlord in the event that, by reason of Tenant's
default, this lease is terminated and if the subtenant is notified by Landlord
of such termination and instructed to make subtenant's rental payments to
Landlord.
(b) Tenant shall, promptly after execution of each sublease,
notify Landlord of the name and mailing address of the subtenant and shall, on
demand, permit Landlord to examine and copy the sublease.
(c) Tenant shall have obtained Landlord's prior written
consent to each sublease, which consent shall not be unreasonably withheld or
delayed.
20. Subordination to Fee Mortgage.
(a) This lease shall be subject and subordinate to any ground
lease, mortgage, deed of trust, sale4easeback transaction, or any other
hypothecation for security now or hereafter placed upon the Premises (a "Fee
Security Instrument") and the rights of the holder of or beneficiary under the
Fee Security Instrument (the "Fee Mortgagee") and to any and all advances made
on the security thereof and to all renewals, modifications, consolidations,
replacements and extensions thereof; provided, however, that, as a condition of
such subordination, Tenant shall receive an agreement from the Fee Mortgagee,
for itself and for its successors and assigns, that notwithstanding any
foreclosure (private or judicial), deed in lieu of foreclosure, or similar
action taken in connection with the Fee Security Instrument, so long as Tenant
is not in default hereunder and shall pay the rent and perform all its other
obligations under this lease, unless this lease is otherwise terminated pursuant
to the terms hereof,
(1) Tenant's right to quiet possession of the Premises
shall not be disturbed;
(2) The Fee Mortgagee and its successors and assignees
will continue to recognize this lease and the rights of Tenant;
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(3) The Fee Mortgagee and its successors and assigns will
continue to recognize the leasehold estate created under this lease and the
rights of Tenant in connection with that leasehold; and
(4) That insurance proceeds and condemnation awards
relating to the Premises will be allocated, used and disbursed as provided in
this lease.
(b) If any Fee Mortgagee shall elect to have this lease be an
encumbrance upon the Premises prior to the lien of its Fee Security Instrument,
and shall give notice thereof to Tenant, this lease shall be deemed prior
thereto, whether this lease is dated prior or subsequent to the date thereof or
the date of recording thereof
(c) Tenant shall execute any nondisturbance agreement as may
reasonably be requested by any Fee Mortgagee to evidence the subordination
herein set forth or to make this lease prior to the lien of any Fee Security
Instrument (as the case may be).
(d) Upon any default by Landlord in the performance of its
obligations under any Fee Security Instrument, Tenant shall attorn to the Fee
Mortgagee, upon demand, and shall execute and deliver any instrument or
instruments confirming the attornment herein provided for, so long as such
agreements contain appropriate nondisturbance covenants which protect Tenant's
rights hereunder.
21. Sale of Landlord's Interest. Upon sale, transfer or assignment of
Landlord's entire interest in the Premises and assumption by the buyer,
transferee or assignee of all of Landlord's obligations under this lease,
Landlord shall be relieved of its obligations hereunder with respect to
liabilities accruing from and after the date of such sale, transfer or
assignment.
22. Holding Over. If after expiration of the lease term, if not
renewed, or an unrenewed option term, Tenant remains in possession of the
Premises with Landlord's permission (express or implied), Tenant shall become a
tenant from month to month only, upon all the provisions of this lease, but,
except as provided otherwise in Section 2(h) of this lease, the rent payable by
Tenant shall be increased to one hundred fifty percent (150%) of the rent
payable by Tenant at the expiration of the previous term. Such adjusted rent
shall be payable in advance on or before the first day of each month. If either
party desires to terminate such month to month tenancy, it shall give the other
party not less than thirty (30) calendar days advance written notice of the date
of termination.
23. Binding Effect. Subject to the provisions of this lease relating to
assignment and subletting, each and all of the covenants, agreements,
obligations, conditions and provisions of this lease shall inure to the benefit
of and shall bind not only the parties hereto, but each and all of the heirs,
executors, administrators, successors and assigns of the respective parties
hereto.
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24. Estoppel Certificates. Tenant shall, without charge, at any time
and from time to time, within ten (10) days after receipt of written request,
deliver a written instrument to Landlord or to any other person, firm or
corporation specified in said request, duly executed and acknowledged,
certifying:
(a) that this lease is unmodified and in full force and effect, or,
if there has been a modification, that the same is in full force and effect as
modified and stating any such modification;
(b) that Tenant is not in default under the terms of this lease,
or, if in default, the details thereof;
(c) whether or not there are then existing any setoffs or defenses
against the enforcement of any of the agreements, terms, covenants or conditions
of this lease and any modification thereof upon the part of Tenant to be
performed or complied with, and, if so, specifying the same; and
(d) the date to which the rent and other charges hereunder have
been paid.
Any such statement delivered pursuant to this Section may be relied
upon by any prospective buyer of the fee or mortgagor or assignee or any
mortgage upon the fee of the Premises.
25. Notices. Written notices required or permitted under this lease or
by law shall be deemed duly served when personally delivered to the appropriate
party or, in lieu of such personal service, three (3) days after deposited in
the United States mail, certified, postage prepaid, addressed to such party at
the address specified below (or to such other place as may from time to time be
specified in a notice given pursuant to this paragraph as the address for
service of notice on such party):
To Landlord: XXXXXXXXX FARMS CORP.
0000 Xxxxxx Xxxx, Xxxxx 0
Xxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxxx
To Tenant: CAL-AMERICAN BUILDING COMPANY, INC.
000 0xx Xxxxxx
Xxxxxxx, XX 00000
26. Landlord's Consent. In any circumstance hereunder in which
Landlord's consent, approval or permission is required as a precondition to any
act by Tenant, such consent, permission or approval shall not be unreasonably
delayed or withheld, and if such consent, approval or permission is withheld,
Landlord shall advise Tenant in writing of the reasons therefor.
15
27. Arbitration. Any dispute between Landlord and Tenant arising out
of the provisions of this lease (with the exception of disputes involving the
payment or nonpayment of rent, taxes, insurance, or other sums due hereunder,
the violation by Tenant of any term, covenant, or condition of this lease, an
action for unlawful detainer of the Premises, or the determination of fair
monthly rental as provided in section 2(h), above) shall be arbitrated in
Modesto, California, in accordance with the rules then in effect of the American
Arbitration Association. Any arbitration award shall be enforceable in a court
of competent jurisdiction. The arbitrator selected for any such arbitration
shall have no less than five (5) years' experience related to the commercial
real estate business.
28. Invalidity of Particular Provisions. If any term or provision of
the application thereof to any person or circumstance, shall to any extent be
invalid or unenforceable, the remainder of this lease, or the application of
such term or provision to persons or circumstances other than those as to which
it is invalid or unenforceable shall not be affected thereby, and each term and
provision of this lease shall be valid and be enforced to the fullest extent
permitted by law.
29. Cumulative Remedies. The specified remedies to which Landlord or
Tenant may resort under the terms of this lease are cumulative and are not
intended to be exclusive of any other remedies or means of redress to which
Landlord or Tenant may be lawfully entitled in case of any breach or threatened
breach by Landlord or Tenant of any provision of this lease. The failure of
Landlord or Tenant to insist in any one or more cases upon the strict
performance of any of the covenants of this lease or to exercise any option
herein contained shall not be construed as a waiver or relinquishment of any
right of Landlord or Tenant as to future performance of the same or other
covenant, condition or provision.
30. Quiet Enjoyment. Subject to the terms and provisions of this lease,
Landlord covenants and agrees that Tenant, upon paying the rent, impositions and
all other charges provided for in this lease and upon observing and keeping all
of the covenants, conditions and provisions of this lease on its part to be
observed and kept, shall lawfully and quietly hold, occupy and enjoy the
Premises during the term of this lease, without hindrance or molestation by or
from anyone claiming by, through or under Landlord. Notwithstanding this or any
other provision of this lease, Tenant acknowledges that it is aware that a
portion of the unimproved Premises may be subject to a government taking for a
right of way or roadway, which could involve a condemnation or agreed sale or
exchange with Landlord, and if such an event arises, it will not create a right
or option in Tenant to terminate the balance of the lease.
31. Time Periods. All references in this lease to periods of time
measured by days shall mean calendar days rather than "business" or "working"
days. Any period of time under this lease for the performance of any obligation
or the exercise of any right which expires on a weekend or legal holiday shall
be extended to the close of the next following "working" or "business" day.
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32. Inspection. Landlord shall have the right to enter the Premises
from time to time, at reasonable intervals, for purposes of inspecting the
Premises. Except in the case of emergencies, all such inspections shall be made
(a) after giving at least 24 hours prior written notice to Tenant, (b) during
normal business hours or at other times reasonably acceptable to Tenant and (c)
in such a manner so as to avoid-any interference with Tenant's conduct of its
business on the Premises.
33. Further Assurances. The parties hereby agree to execute such other
documents and perform such other acts as may be necessary or desirable to carry
out the purposes of this lease.
34. Tenant's Assistance. Tenant hereby expressly agrees that if any
controversy, litigation or court proceeding is prosecuted or defended by
Landlord in connection with the Premises, Tenant will render all reasonable
assistance to Landlord.
35. Fair Meaning. In all cases the language in all parts of this lease
shall be construed simply, according to its fair meaning and not strictly for or
against Landlord or Tenant. This lease shall not be strictly construed against
the party who drafted it.
36. Law Governing. This lease is entered into and is to be performed in
California and shall be governed by and construed in accordance with the laws of
the State of California applicable to contracts executed and intended to be
performed entirely within the State of California by residents of the State of
California.
37. Amendments. This lease cannot be changed orally, but only by an
agreement in writing signed by Landlord and Tenant.
38. Entire Agreement. This lease, together with any writing
modifications or amendments hereto hereafter entered into shall constitute the
entire agreement between the parties relative to the subject matter hereof; and
shall supersede any prior agreement or understanding, if any, whether written or
oral.
39. Counterparts. This lease may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
40. Attorneys' Fees. In the event of any litigation between the parties
hereto with respect to the subject matter hereof; the unsuccessful party to such
litigation agrees to pay to the successful party all costs and expenses,
including reasonable attorneys' fees, incurred therein by the successful party,
all of which shall be included in and as a part of the judgment rendered in such
litigation.
41. Offer. Preparation of this lease by Landlord and submission of
same to Tenant shall not be deemed an offer to lease to Tenant.
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42. Time is of the Essence. Time is of the essence of each and every
covenant, condition and agreement contained in this lease.
43. Representations. Tenant acknowledges that neither Landlord nor any
agent, servant or representative of Landlord, or any person purporting to act on
Landlord's behalf; has made any representation, warranty, or statement with
respect to permissible uses of the Premises, the amount of taxes which may or
will be assessed against said Premises, the cost of any insurance required to be
secured by Tenant hereunder, the cost or possibility of making any type of
leasehold improvements, or any other matter relating to this lease agreement.
With respect to such matters, Tenant is relying upon Tenant's own independent
investigation and sources of information, and Tenant expressly waives any right
Tenant might otherwise have under the law to rescind this lease or claim damages
by reason of the fact that the premises cannot be used for the intended
purposes, or that said taxes or assessments, costs of insurance, or costs of
making any leasehold improvements may be in excess of any sum deemed reasonable
by Tenant, or in excess of any amount Tenant anticipated paying hereunder.
44. Security Measures. Tenant hereby acknowledges that the rental
payable to Landlord hereunder does not include the cost of guard service or
other security measures and that Landlord shall have no obligation whatsoever to
provide the same.
45. Brokers. Tenant represents and warrants to Landlord that, except
for Xxxxxxxx & Associates, Tenant has not had any dealings with any agents,
brokers, finders, or other similar parties in connection with the negotiation of
this lease or the consummation of the transaction contemplated hereby. Tenant
hereby agrees to indemnify, defend and hold Landlord free and harmless from and
against any liability for compensation or charges which may be claimed by any
other agent, broker, finder or other similar party by reason of any dealings
with or actions of Tenant in connection with the negotiation of this lease or
the consummation of this transaction, including any costs, expenses and
attorneys' fees incurred with respect thereto.
46. Recording. Neither this lease nor a memorandum thereof shall be
recorded without the prior written consent of Landlord, which consent shall not
be unreasonably withheld, provided that prior to any such recordation, Tenant
shall deliver to Landlord a proper and fully executed quitclaim deed to the
Premises in recordable form, which Landlord shall hold during the term of the
lease and any proper extensions and may record at the termination of the lease,
whether caused by reason of expiration or for any other reason under the
provisions of this agreement.
47. Landlord's Estate. Tenant shall look only to Landlord's estate in
the Premises for the satisfaction of Tenant's remedies or for the collection of
a judgment (or other judicial process) requiring the payment of money by
Landlord in the event of any default by Landlord hereunder, and no other
property or assets of Landlord or its principals, disclosed or undisclosed,
shall be subject to levy, execution or other enforcement procedure for the
satisfaction of Tenant's remedies under or with respect to
18
this lease, the relationship of Landlord and Tenant hereunder, or Tenant's use
or occupancy of the Premises.
48. No Discrimination. Tenant hereby agrees to indemnify, defend and
hold Landlord's harmless from and against any and all claims, costs, liabilities
and expenses (including reasonable attorneys' fees) that Landlord may suffer or
incur as a result of any persons claiming in connection with the use or
operation by Tenant of the Premises, discrimination against or segregation on
account of race, color, creed, religion, sex, marital status, age, handicaps,
national origin or ancestry.
Landlord hereby agrees to indemnify, defend and hold Tenant
harmless from and against any and all claims, costs, liabilities and expenses
(including reasonable attorneys' fees) that Tenant may suffer or incur as a
result of any persons claiming discrimination against or segregation by Landlord
on account of race, color, creed, religion, sex, Marital status, age, handicaps,
national origin or ancestry.
49. Authority. Each of the persons executing this lease on behalf of
Tenant hereby covenant and warrant that Tenant is a duly authorized and existing
entity, that Tenant is qualified to do business in California, that Tenant has
full right and authority to enter into this lease and that all of the persons
signing on behalf of Tenant are authorized to do so. Upon Landlord's request,
Tenant shall provide Landlord with evidence reasonably satisfactory to Landlord
confirming the foregoing covenants and warranties.
50. Security Deposit. Tenant shall deposit with Landlord the sum of
Sixty Thousand Dollars ($60,000.00), as security for the faithful performance by
Tenant of the terms and conditions of a lease of the demised premises
("Deposit"). Landlord shall retain the Deposit as security for the faithful
performance by Tenant of the terms and conditions of this lease. The Deposit is
not rent and shall not be applied by Tenant to any rental due hereunder;
provided, however, that if Tenant has not defaulted under this lease, Landlord
shall apply $12,000.00 of the Deposit to rent to come due in each of the months
13, 25, 37, and 49 of the term of this lease and retain the $12,000.00 balance
for the remainder of the term. The balance of the Deposit will be returned to
Tenant on termination of this lease if Tenant has fully performed Tenant's
obligations hereunder to that date.
If any of the rent herein reserved shall be overdue and unpaid
or any other sum payable by Tenant to Landlord hereunder shall be overdue and
unpaid, or if Tenant breaches any covenant of this lease, then Landlord may, at
Landlord's option, appropriate and apply any portion of the Deposit to the
payment of such overdue rent or other sum or to the damages suffered by Landlord
as a result of Tenant's default hereunder. If Landlord does so apply any portion
of the Deposit for any such purpose, then Tenant shall promptly, upon demand,
redeposit with Landlord a sufficient amount of cash to restore the security to
the amount of the Deposit existing immediately prior to such application by A
Landlord. Tenant's failure so to do, within five (5) days after receipt of such
demand, will constitute a breach of this lease and a default hereunder.
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IN WITNESS WHEREOF, the parties hereto have executed this instrument
the day and year first above written.
LANDLORD:
XXXXXXXXX FARMS CORP.,
a California corporation
By: /s/ Xxxxxx X. Xxxxxxxx
---------------------------------
Xxxxxx X. Xxxxxxxx, President
TENANT:
MAJESTIC MODULAR BUILDINGS, LTD.,
a Maryland corporation
By: /s/ Xxxxxxxxx X. Xxxxx
-----------------------------
Name: Xxxxxxxxx X. Xxxxx
------------------
Title: President
------------------
By: /s/ Xxxxxxxxx X. Xxxxx
-----------------------------
Name: Xxxxxxxxx X. Xxxxx
------------------
Title: Secretary
------------------
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