EXHIBIT 10.12
LEASE
This lease is entered into by and between Xxxxxxxxxx & Xxxxxx,
hereinafter referred to as "Lessor", and Xxxxxx and Xxxxxxxxxx Sales, Co., a
California corporation, hereinafter referred to as "Lessee."
ARTICLE I
DEFINITIONS
As used in this Lease:
1.1 "Lease": The term "Lease" refers to this Lease Agreement consisting
of fourteen (14) Articles, subdivided into numbered sections.
1.2 "Leased Premises": The term "Leased Premises" refers to that
certain real property, including the building located thereon, together with
all appurtenances thereto, constituting the property located at 0000 Xxxxxxx
Xxxxx, Xxx Xxxxx, Xxxxxxxxxx.
1.3 "Lease Term": The term "Lease Term" refers to the period commencing,
commencing on the date of this Lease and continuing through August 31, 2001,
unless sooner terminated as hereinafter provided.
1.4 "Total Taking, Partial Taking": The term "Total Taking" refers to
the taking of the entire Leased Premises by public authority under the power
of eminent domain, or a taking of so much of the Leased Premises, or of
Lessee's interest therein, as to prevent or substantially prevent the Lessee
from operating the Leased Premises for the uses authorized in Article III.
The term, "Partial Taking," refers to the taking of a portion only of the
Leased Premises, or of Lessee's interest therein, which taking does not
constitute a Total Taking.
1.5 "Real Property Taxes": The term "Real Property Taxes" refers to all
real property taxes and general and special assessments levied and assessed
against the Leased Premises. The term shall also include any tax which may at
any time be levied or imposed upon rentals under this Lease or otherwise in
respect of the Leased Premises in lieu of, in addition to, or as an off-set to
a real estate tax.
1.6 "Party", "Parties": The term "party" refers to either Lessor or
Lessee, while the term "parties" refers to Lessor and Lessee.
ARTICLE II
DEMISE OF LEASED PREMISES:
ESSENTIAL TERMS
2.1 Demise of Leased Premises: Lessor leases to Lessee, and Lessee
hires from Lessor, the Leased Premises for the Lease Term, unless sooner
terminated as provided in this Lease or by law.
2.2 Rent: Lessee shall pay rent to Lessor in advance, on or before the
first day of each calendar month during the Lease Term, without abatement,
deduction or offset, in the sum of Eleven Thousand Dollars ($11,000).
2.3 Lessee's Option to Extend Term: Lessee is given the option to
extend the term on all provisions contained in this lease, except for the
monthly rent, for a five (5) year period ("Extended Term"), by giving written
notice of exercise of the option ("option notice") to Lessor at least six (6)
months but not more than one (1) year before the expiration of the term.
Provided that, if Lessee is in default on the date of giving the option
notice, the option notice shall be totally ineffective, or if Lessee is in
default on the date the Extended Term is to commence, the Extended Term shall
not commence and this lease shall expire at the end of the initial term. The
amount of Rent to be paid by Lessee during the period of the Extended Term
shall be determined by Section 2.4. After the exercise of the option, all
references in this Lease to the "Lease Term" shall be considered to mean the
Extended Term. Lessee shall have no right to extend the Lease Term beyond the
Extended Term.
2.4 Rent for Extended Term to be Negotiated by Parties or Determined by
Appraisal:
If Lessee exercises the option granted by Lessor in Section 2.3, the
parties shall have thirty (30) days after Lessor receives the option notice in
which to agree on the monthly rent during the Extended Term. If the parties
agree on the monthly rent for the Extended Term during that period, they shall
immediately execute an amendment to this Lease stating the monthly rent.
If the parties do not agree on the monthly rent for the Extended Term
within thirty (30) days after notice of election to renew, the rent shall be
determined by a qualified, independent real property appraiser familiar with
commercial rental values in the area. The appraiser shall be chosen by the
Lessee from a list of not fewer than five such individuals submitted by the
Lessor. If Lessee does not make the choice within five days after submission
of the list, Lessor may do so. If the Lessor does not submit such a list
within ten (10) days after a written request from the Lessee to do so, Lessee
may name as an arbitrator any individual with the qualifications noted above.
Within thirty (30) days after appointment, the appraiser shall return his
decision, which shall be final and binding upon both parties. The cost of the
appraisal shall be borne equally by both the Lessee and the Lessor.
ARTICLE III
USE
3.1 Permitted Use: During the Lease Term, Lessee shall use and occupy
the Leased Premises for office, warehousing, processing, and distribution of
produce, fruits, and berries, and for purposes incidental thereto, or for such
other use or purpose as shall first be approved in writing by Lessor, which
approval shall not be unreasonably withheld.
3.2 Limits on Use: During the Lease Term:
a. Lessee shall use the Leased Premises only as permitted in this
Article;
b. Lessee shall at all times conform to, and cause all persons
using or occupying any part of the Leased Premises to comply with, all public
laws, ordinances and regulations from time to time applicable to the Leased
Premises, or to operations thereon, including the laws relating to nuisance;
c. Lessee shall not commit waste or suffer any waste to be
committed upon the Leased Premises;
d. Lessee shall not, by action or inaction, conduct any activity
that would make it impossible to insure the Leased Premises against casualty.
3.3 Contest of Validity of Law: Lessee shall have the right to contest
by appropriate legal proceedings, without cost or expense to Lessor, the
validity of any law, ordinance or regulation which limits or restricts the
uses permitted in this Article.
ARTICLE IV
TAXES
4.1 Real Property Taxes: Lessee shall pay, before delinquency, all Real
Property Taxes and assessments levied and assessed against the Leased Premises
during the Lease Term. If permitted by applicable law, Lessee shall be
entitled to pay Real Property Taxes in installments. On demand by Lessor,
Lessee shall furnish Lessor with satisfactory evidence of these payments.
Lessee's obligation to pay assessments as provided in this Section shall
be calculated on the basis of the amount due if the Lessor allows the
assessment to go to bond and the assessment is to be paid in installments,
even if Lessor pays the assessment in full.
Lessor shall use its best efforts to cause the tax bills to be sent
directly to Lessee from the tax collector.
4.2 Assessments: Lessee shall pay, before delinquency, all assessments,
including but not limited to water assessments, levied against the Leased
Premises during the Lease Term. If permitted by applicable law, Lessee shall
be entitled to pay assessments in installments. On demand by Lessor, Lessee
shall furnish Lessor with satisfactory evidence of these payments.
Lessor shall use its best efforts to cause the assessment bills to be
sent directly to Lessee from the tax collector.
4.3 Personal Property Taxes: Lessee shall pay, before delinquency, all
taxes, assessments, license fees and other charges that are levied and
assessed against Lessee's personal property installed or located in or on the
Leased Premises, and that become payable during the Lease Term. On demand by
Lessor, Lessee shall furnish Lessor with satisfactory evidence of these
payments.
Lessor shall use its best efforts to cause the tax bills to be sent
directly to Lessee from the tax collector.
ARTICLE V
MAINTENANCE, REPAIRS, ALTERATIONS
AND UTILITIES
5.1 Maintenance and Repairs: Lessee, at its cost, shall maintain, in
good condition, all portions of the Leased Premises, and shall repair,
replace, repaint, and clean all portions of the Leased Premises as may be
necessary in order to keep the Leased Premises in good condition. Lessor
shall have no responsibility for repairing or maintaining any portion of the
Leased Premises.
5.2 Alterations: Except as provided in this Section, Lessee shall not
make any structural or material alterations or improvements to the Leased
Premises without Lessor's written consent, which consent shall not be
unreasonably withheld. With the exception of Lessee's moveable furniture,
furnishings, inventory, equipment, trade fixtures and signs, any alterations
or improvements made shall remain on and be surrendered with the Leased
Premises on expiration or termination of the Lease Term, and shall belong to
Lessor without the payment of any additional consideration. Lessee, at its
cost, shall have the right to make, without Lessor's consent, nonstructural
alterations and improvements to the Leased Premises that Lessee requires in
order to conduct its business on the Leased Premises, including, without
limitation, the installation of trade fixtures and signs advertising Lessee's
business. If Lessee makes any alterations or improvements to the Leased
Premises with the Lessor's consent as provided in this Section, the
alterations or improvements shall not be commenced until thirty (30) days
after Lessor has received notice from Lessee stating the date the installation
of the alterations or improvements is to commence so that Lessor may post and
record an appropriate notice of nonresponsibility.
5.3 Mechanics' Liens: Lessee shall pay all costs for construction done
by it or caused to be done by it on the Leased Premises as permitted by this
Lease. Lessee shall keep the Leased Premises free and clear of all mechanics'
liens resulting from construction done by or for Lessee. Lessee shall have the
right to contest the correctness or the validity of any such lien, if, within
ten (10) days after demand by Lessor, Lessee procures and records a lien
release bond issued by a corporation authorized to issue surety bonds in
California in an amount equal to one and one-half (1-1/2) times the amount of
the claim of lien. The bond shall meet the requirements of Civil Code Section
3143 and shall provide for the payment of any sum that the claimant may
recover on the claim (together with costs of suit, if it recovers in the
action). Nothing in this Lease shall be deemed or construed as in any way
constituting the consent or request of Lessor, express or implied, by
inference or otherwise, to any contractor, subcontractor, laborer or
materialman for the performance of any labor or for the furnishing of any
materials for any specific improvement, alteration or repair of, or to, the
Leased Premises, or any part thereof. Lessor shall have the right to post and
keep posted on the Leased Premises such notices of nonresponsibility as Lessor
may deem necessary for the protection of Lessor and the fee of the Leased
Premises from mechanics' liens.
5.4 Utilities and Services: Lessee shall make all arrangements for, and
shall pay for, all utilities and services furnished to the Leased Premises,
including, without limitation, gas, electricity, water, telephone service and
trash collection, and for all connection charges.
ARTICLE VI
INSURANCE AND INDEMNIFICATION
6.1 Liability and Property Damage Insurance: Lessee, at its cost, shall
maintain comprehensive general liability insurance with limits of not less
than $300,000 for injury to one person, $1,000,000 for injury to two or more
persons in one occurrence, and $300,000 for damage to property or commercial
general liability insurance (occurrence version) with coverage for bodily
injury and property damage liability, personal and advertising injury
liability, and medical payment with a general aggregate limit of not less than
$3,000,000 and a per occurrence limit of not less than $1,000,000, insuring
against all liability of Lessee and its officers, agents, employees or
independent contractors, arising out of and in connection with Lessee's use or
occupancy of the Leased Premises. All insurance shall insure performance by
Lessee of the indemnity provisions of Section 6.7. Lessor shall be named as
an additional insured, and the policy shall contain cross-liability
endorsements.
6.2 Fire Insurance on the Leased Premises: Lessee at its cost, shall
maintain on the building and other improvements that are a part of the Leased
Premises, a policy of standard fire and extended coverage insurance, with
vandalism and malicious mischief endorsements, to the extent of at least full
replacement value.
The insurance policy shall be issued in the names of the Lessor and
Lessee, as their interests appear. The insurance policy shall provide that any
payments shall be made payable to Lessor.
6.3 Determination of Full Replacement Value: The "full replacement
value" of the Leased Premises, and of Lessee's personal property, fixtures,
improvements and alterations, shall be determined by the company issuing the
insurance policy at the time the policy is initially obtained.
6.4 Waiver of Subrogation: Each party releases the other, and the
other's officers, employees, agents and independent contractors, from any
claims for damage or injury to any person or to the Leased Premises, or to the
fixtures, personal property, improvements and alterations of either Lessor or
Lessee in or on the Leased Premises, that are caused by or result from risks
insured against under any insurance policies carried by either party and in
force for the benefit of the releasing party at the time of any such damage,
but only to the extent of such insurance coverage. Each party shall cause each
insurance policy obtained by it to provide that the insurance company waives
all right of recovery by way of subrogation against either party in connection
with any damage covered by that policy. Nothing in this Section shall be
deemed a waiver of any provision of Article VII.
6.5 Other Insurance Matters: All the insurance required under this
Lease shall:
a. Be issued by insurance companies authorized to do business in
the State of California, with a financial rating of at least an A+3 status as
rated in the most recent edition of Best's Insurance Reports;
b. Contain an endorsement requiring thirty (30) days' written
notice from the insurance company to both parties before cancellation or
change in the coverage, scope, or amount of any policy.
c. Be issued as a primary policy.
Each policy, or a certificate of the policy, together with evidence
of payment of premiums, shall be deposited with the Lessor at the commencement
of the Lease Term, or as soon thereafter as is reasonably practicable, and on
renewal of the policy not less than fifteen (15) days before expiration of the
term of the policy.
6.6 Exculpation of Lessee and Indemnity: Lessee shall not be liable to
Lessor for any death, injury, deterioration or loss sustained by Lessor, its
officers, agents, employees and independent contractors or Lessor's property
from any cause other than the willful misconduct or active negligence of
Lessee. Lessor shall indemnify and hold Lessee harmless, and shall defend
Lessee against any and all liability, losses, penalties, damages, costs,
expenses (including, without limitation, reasonable attorneys' fees), causes
of action, claims or judgments arising out of or related to:
a. The failure or refusal by Lessor to comply with any of the
provisions of this Lease, including, without limitation, those provisions
relating to taxes, mechanics' liens, utilities, repairs, insurance, and use of
the Leased Premises; or,
b. Any death, injury, loss or deterioration sustained by any
person or property on or adjoining the Leased Premises, occasioned by any
willful or negligent act or omission, whether passive or active, of Lessor, or
Lessor's agents, employees, officers, independent contractors, invitees,
sublessees, assignees or licensees.
6.7 Exculpation of Lessor and Indemnity: Lessor shall not be liable to
Lessee for any death, injury, deterioration or loss sustained by Lessee, its
officers, agents, employees and independent contractors, or Lessee's property
from any cause other than the willful misconduct or active negligence of
Lessor. Lessee shall indemnify and hold Lessor harmless, and shall defend
Lessor against any and all liability, losses, penalties, damages, costs,
expenses (including, without limitation, reasonable attorneys' fees), causes
of action, claims or judgments arising out of or related to:
a. The failure or refusal by Lessee to comply with any of the
provisions of this Lease, including, without limitation, those provisions
relating to taxes, mechanics' liens, utilities, repairs, insurance, and use of
the Leased Premises; or
b. Any death, injury, loss or deterioration sustained by any
person or property on or adjoining the Leased Premises, occasioned by any
willful or negligent act or omission, whether passive or active, of Lessee or
Lessee's agents, employees, officers, independent contractors, invitees,
sublessees, assignees or licensees.
ARTICLE VII
DAMAGE OR DESTRUCTION
7.1 Destruction Due to Risk Covered by Insurance
If, during the term, the premises are totally or partially destroyed from
a risk covered by the insurance described in Section 6.2, rendering the
premises totally or partially inaccessible or unusable, Lessee shall restore
the Leased Premises to substantially the same condition as they were in
immediately before destruction, provided that the insurance proceeds are
sufficient to cover the actual cost of restoration. Such destruction shall
not terminate the Lease so long as the insurance proceeds are sufficient to
cover the actual costs of restoration, provided that if any insufficiency in
coverage is caused by any act or omission of Lessee or Lessee's agents,
employees, officers, independent contractors, invitees, sublessees, assignees,
or licensees, the Lessee shall not have the option of terminating the Lease
and, instead, shall restore the Leased Premises to substantially the same
condition as they were in immediately before the destruction. If the existing
laws do not permit the restoration, either party can terminate this lease
immediately by giving notice to the other party.
7.2 Destruction Due to Risk Not Covered by Insurance
If, during the term, the Leased Premises are totally or partially
destroyed from a risk not covered by the insurance described in Section 6.2,
rendering the Leased Premises totally or partially inaccessible or unusable,
Lessee shall either restore the Leased Premises to substantially the same
condition as they were in immediately before destruction or terminate the
lease. If, however, the destruction is caused by any act or omission of
Lessee or Lessee's agents, employees, officers, independent contractors,
invitees, sublessees, assignees, or licensees, such destruction shall not
terminate the Lease and, instead, Lessee shall restore the Leased Premises to
substantially the same condition as they were in immediately before the
destruction. If the existing laws do not permit the restoration, either party
can terminate this lease immediately by giving notice to the other party.
7.3 Procedure for Lessee's Restoration of Leased Premises
Within thirty (30) days after the date that Lessee is obligated to
restore the premises, Lessee at its cost shall prepare final plans and
specifications and working drawings complying with applicable laws that will
be necessary for restoration of the premises. The plans and specifications
and working drawings must be approved by Lessor. Lessor shall have thirty
(30) days after receipt of the plans and specifications and working drawings
to either approve or disapprove the plans and specifications and working
drawings and return them to Lessee. If Lessor disapproves the plans and
specifications and working drawings, Lessor shall notify Lessee of its
objections and Lessor's proposed solution to each objection. Lessee
acknowledges that the plans and specifications and working drawings shall be
subject to approval of the appropriate government bodies and that they will be
prepared in such a manner as to obtain that approval.
The restoration shall be accomplished as follows:
1. Lessee shall complete the restoration within ninety (90) working
days after final plans and specifications and working drawings have been
approved by the appropriate government bodies and all required permits have
been obtained (subject to a reasonable extension for delays resulting from
causes beyond Lessee's reasonable control).
2. Lessee shall retain a licensed contractor that is bondable. The
contractor shall be required to carry public liability and property damage
insurance, standard fire and extended coverage insurance, with vandalism and
malicious mischief endorsements, during the period of construction. Such
insurance shall contain waiver of subrogation clauses in favor of Lessor and
Lessee in accordance with the provisions of Section 6.4.
3. Lessee shall notify Lessor of the date of commencement of the
restoration not later than two (2) days before the commencement of the
restoration to enable Lessor to post and record notices of nonresponsibility.
The contractor retained by Lessee shall not commence construction until a
completion bond and a labor and materials bond have been delivered to Lessor
to insure completion of the construction.
4. Lessee shall accomplish the restoration in a manner that will cause
the least inconvenience, annoyance, and disruption at the premises.
5. On completion of the restoration Lessee shall immediately record a
notice of completion in the county in which the premises are located.
7.4 Abatement or Reduction of Rent
In case of destruction, there shall be no abatement or reduction of rent
unless the destruction was caused by Lessor.
7.5 Loss During Last Part of Term
If destruction to the premises occurs during the last one (1) year of the
term, either Lessor or Lessee can terminate this lease by giving notice to the
other party not more than fifteen (15) days after the destruction.
7.6 Waiver of Civil Code Sections
Lessee waives the provisions of Civil Code Section 1932(2) and Civil Code
Section 1933(4) with respect to any destruction of the premises.
ARTICLE VIII
CONDEMNATION
8.1 Effect of Total Taking: If there is a Total Taking during the Lease
Term, the Lease shall terminate on the date that the condemnor has the right
to take actual physical possession of the Leased Premises. At that time and
thereafter, Lessee shall be discharged from all of Lessee's future obligations
under this Lease.
8.2 Effect of Partial Taking: If there is a Partial Taking during the
Lease Term, then this Lease shall continue in full force and effect as to the
remainder of the Leased Premises, except that Lessee can elect to terminate
this Lease if one-third (33.33) or more of the Leased Premises is taken. If
Lessee elects to terminate this Lease, Lessee must exercise its right to
terminate pursuant to this Section by giving notice to Lessor within ten (10)
days after the nature and the extent of the taking have been finally
determined. If Lessee elects to terminate this Lease as provided in this
Section, Lessee also shall notify Lessor of the date of termination, which
date shall not be earlier than ten (10) days nor later than thirty (30) days
after Lessee has notified Lessor of its election to terminate; except that
this Lease shall terminate on the date of taking if the date of taking falls
on a date before the date of termination as designated by Lessee. If Lessee
does not terminate this Lease within the ten (10) day period, this Lease shall
continue in full force and effect, except that on the date that the condemnor
becomes entitled to take actual physical possession of the Leased Premises,
the rent shall be reduced by an amount that is in the same ratio to the rent
as the value of the area of the portion of the Leased Premises taken bears to
the total value of the Leased Premises immediately before that date. All
replacements, repairs, alterations or modifications to the Leased Premises
required by reason of a Partial Taking shall be made by Lessee to the extent
condemnation proceedings are available. If the Leased Premises are taken for
less than the remainder of the Lease Term, the rent shall cease to be abated
or reduced on the date that the condemnor surrenders or abandons the Leased
Premises.
Each party waives the provisions of Code of Civil Procedure Section
1265.130 allowing either party to petition the superior court to terminate
this lease in the event of a partial taking of the premises.
8.3 Distribution of Condemnation Award: The condemnation award shall be
divided as the respective interests of the Lessor and Lessee are determined
pursuant to California Code of Civil Procedure Section 1260.220(a); provided,
however, that if Lessee is in default under the terms of this Lease at the
time of the condemnation award, Lessee shall not receive any part of the
award; and provided further that the award shall be applied toward restoration
of the Leased Premises necessitated by a Partial Taking.
ARTICLE IX
DEFAULT AND REMEDIES
9.1 Lessee's Default Defined: The occurrence of any of the following
shall constitute a default by Lessee:
a. Failure to make payment of any sum of money, including rent, to
Lessor when due, if the failure continues for ten (10) days after notice has
been given to Lessee.
b. Failure to perform any of the provisions of Sections 6.1
through 6.2 of this Lease, if the failure continues for ten (10) days after
notice has been given to Lessee.
c. Failure to perform any other provision of this Lease if the
failure to perform is not cured within thirty (30) days after notice has been
given to Lessee. If the default cannot reasonably be cured within thirty (30)
days, Lessee shall not be in default under this Lease if Lessee commences to
cure the default within the thirty (30) day period and diligently and in good
faith continues to cure the default.
d. An assignment or subletting of the premises, either voluntary
or involuntary, in violation of Sections 10.2 and 10.3 of this lease.
e. Any condition defined as an "Event of Default" in Section
12.9.
f. The filing by Lessee of a voluntary petition in bankruptcy;
the adjudication of Lessee as a bankrupt; or the filing of any involuntary
petition of bankruptcy and failure of Lessee to secure dismissal of the
petition within forty-five (45) days after filing.
9.2 Notice of Default: Notices given pursuant to Section 9.1 shall be
in writing and shall specify the alleged default and the applicable Lease
provisions, and shall demand that Lessee perform the provisions of this Lease
or pay the rent or other monies that are in arrears, as the case may be,
within the applicable period of time, or quit the premises. No such notice
shall be deemed a forfeiture or a termination of this Lease unless Lessor
expressly so elects in the notice.
9.3 Lessor's Remedies for Default by Lessee: In the event that Lessee
is in default under Section 9.1, Lessor shall be entitled to resort to any and
all remedies provided by California law or in this Lease.
ARTICLE X
SALE, TRANSFER, OR ASSIGNMENT OF LEASED PREMISES
10.1 Effect on Lease of Sale by Lessor: If Lessor sells or transfers
all or any portion of the Leased Premises, Lessor, on consummation of the sale
or transfer, shall be released from any liability accruing under this Lease if
Lessor's successor has assumed in writing, for the benefit of Lessee, Lessor's
obligations under this Lease.
10.2 Prohibition Against Voluntary Assignment, Subletting, and
Encumbering: Lessee shall not voluntarily assign or encumber its interest in
this lease or in the premises, or sublease all or any part of the premises, or
allow any other person or entity (except Lessee's authorized representatives)
to occupy or use all or any part of the premises, without first obtaining
Lessor's consent, which consent shall not be unreasonably withheld. Any
assignment, encumbrance, or sublease without Lessor's consent shall be
voidable and, at Lessor's election, shall constitute a default. No consent to
any assignment, encumbrance, or sublease shall constitute a further waiver of
the provisions of this Section.
Lessee immediately and irrevocably assigns to Lessor, as security for
Lessee's obligations under this lease, all rent from any subletting of all or
part of the premises as permitted by this lease, and Lessor, as assignee and
as attorney-in-fact for Lessee, or a receiver for Lessee appointed on Lessor's
application, may collect such rent and apply it toward Lessee's obligations
under this lease; except that, until the occurrence of an act of default by
Lessee, Lessee shall have the right to collect such rent.
If Lessee requests Lessor to consent to a proposed assignment or
subletting, Lessee shall pay to Lessor, whether or not consent is ultimately
given, Lessor's reasonable attorneys' fees incurred in connection with each
such request.
10.3 Involuntary Assignment: Except for assignments that occur in
conjunction with a merger or acquisition of Lessee, no interest of Lessee in
this lease shall be assignable by operation of law (including, without
limitation, the transfer of this lease by testacy or intestacy). Each of the
following acts shall be considered an involuntary assignment:
1. If Lessee is or becomes bankrupt or insolvent, makes an assignment
for the benefit of creditors, or institutes a proceeding under the Bankruptcy
Act in which Lessee is the bankrupt; or, if Lessee is a partnership or
consists of more than one person or entity, if any partner of the partnership
or other person or entity is or becomes bankrupt or insolvent, or makes an
assignment for the benefit of creditors;
2. If a writ of attachment or execution is levied on this lease;
3. If, in any proceeding or action to which Lessee is a party, a
receiver is appointed with authority to take possession of the premises.
An involuntary assignment shall constitute a default by Lessee and Lessor
shall have the right to elect to terminate this lease, in which case this
lease shall not be treated as an asset of Lessee.
If a writ of attachment or execution is levied on this lease, Lessee
shall have ten (10) days in which to cause the attachment or execution to be
removed. If any involuntary proceeding in bankruptcy is brought against
Lessee, or if a receiver is appointed, Lessee shall have sixty (60) days in
which to have the involuntary proceeding dismissed or the receiver removed.
ARTICLE XI
SURRENDER AND REMOVAL
11.1 Surrender of Leased Premises: Upon the expiration of the Lease
Term, or any earlier termination of the Lease, Lessee shall surrender the
Leased Premises to Lessor in as good a condition as they were in at the time
Lessee took possession of the Leased Premises, including all improvements and
alterations to the Leased Premises except as otherwise specified in Section
11.2.
11.2 Removal of Lessee's Personal Property: Upon the expiration of the
Lease Term or any earlier termination of the Lease if Lessee is not in
default, Lessee may remove or cause to be removed all movable furniture,
furnishings, inventory,' equipment, trade fixtures and signs installed or
located on the Leased Premises. Any such property that is not removed from the
Leased Premises within sixty (60) days after the date of any expiration or
termination of this Lease, shall thereafter belong to Lessor without the
payment of any consideration. Lessee shall promptly repair any damage to the
Leased Premises caused by the removal of Lessee's property.
11.3 Lessee's Quitclaim: Upon the expiration of the Lease Term or any
earlier termination of this Lease, Lessee shall execute, acknowledge and
deliver to Lessor a proper instrument in writing, releasing and quitclaiming
to Lessor all right, title and interest of Lessee in and to the Leased
Premises, including all alterations and improvements which Lessee is not
entitled to remove.
ARTICLE XII
ENVIRONMENTAL MATTERS
12.1 Definition of "Environmental Condition": As used in this
Agreement, the term "Environmental Condition" shall mean the presence of any
"hazardous substance" as defined in Section 12.2.
12.2 Definition of "Hazardous Substances.": As used in this Agreement,
the term "Hazardous Substances" shall mean any hazardous, toxic, or
radioactive substances, materials or wastes, pollutants, or contaminants as
defined, listed, or regulated by any federal, state, or local law, regulation,
or order, or by common law decision applicable to the Leased Premises,
excluding those used for "Everyday Uses" as defined in Section 12.4.
12.3 Definition of "Remediate" and "Remedial Work": "Remediate" and
"Remedial Work" shall include all activities for the cleanup of contamination
or Environmental Conditions on the property, including excavation, removal,
replacement, or reinjection of contaminated soils and groundwater;
installation, maintenance, and replacement of other facilities for soil and
ground water decontamination; monitoring and reporting; and final site
restoration for the remediation activities.
12.4 Definition of "Everyday Uses": "Everyday Uses" shall mean the
normal use of (i) fuel oil and natural gas for heating; (ii) lubricating,
cleaning, coolant, and other compounds customarily used in building
maintenance; (iii) materials routinely used in the day-to-day operations of an
office project, such as copier toner; (iv) consumer products; (v) materials
reasonably necessary and customarily used in construction and repair of the
Leased Premises; and (vi) fertilizers, pesticides and herbicides commonly used
for routine office landscaping.
12.5 Use of Hazardous Substances: Lessee shall not cause, or allow any
guest, invitee, employee, or agent of Lessee to cause, any Hazardous
Substances (as defined in Section 12.2, above) to be used, generated, stored,
or disposed of on or about the Premises, other than Everyday Uses, without the
prior written consent of Lessor, which consent may be withheld in the
reasonable discretion of Lessor, and which consent may be revoked at any time.
12.6 Hazardous Discharges or Environmental Complaints:
(a) If Lessee receives any notice of the happening of any event
involving an emission, spill, release, or discharge into or upon (i) the air,
(ii) soils or any improvements located thereon, (iii) surface water or ground
water, or (iv) the sewer, septic system or waste treatment, storage or
disposal system servicing the Leased Premises, of any toxic or hazardous
substances or wastes (intended hereby and hereafter to include any and all
such material listed in any federal, state or local law, code and ordinance
and all rules and regulations promulgated thereunder, as hazardous or
potentially hazardous) (any of which is hereafter referred to as a "Hazardous
Discharge"), or any complaint, order, directive, claim, citation or notice by
any governmental authority or any other person or entity with respect to (v)
air emissions, (vi) spills, releases or discharges to soils or any
improvements located thereon, surface water, ground water or the sewer, septic
system or waste treatment, storage or disposal systems servicing the Leased
Premises, (vii) noise emissions, (viii) solid or liquid waste disposal, (ix)
the use, generation, storage, transportation or disposal of toxic or hazardous
substances or wastes or (x) or other environmental, health or safety matters
affecting Lessee, the Leased Premises, any improvements located thereon, or
the business therein conducted (any of which is hereafter referred to as an
"Environmental Complaint"), then Lessee shall give immediate oral and written
notice of same to Lessor, detailing all relevant facts and circumstances.
(b) Without limitation on the foregoing, Lessor shall have the
option, but shall not be obligated, to exercise any of its rights as provided
in this Agreement and may enter onto the Leased Premises and take any actions
as it deems necessary or advisable to cleanup, remove, resolve or minimize the
impact of, or otherwise deal with, any Hazardous Discharge or Environmental
Complaint upon Lessor's receipt of any notice from any person or entity
asserting the happening of a Hazardous Discharge or an Environmental Complaint
on or pertaining to the Leased Premises. All costs and expenses incurred by
Lessor in the exercise of any such rights shall be deemed to be additional
rent hereunder and shall be payable to Lessor upon demand.
12.7 Environmental Indemnification:
Lessee agrees to indemnify, defend by counsel acceptable to Lessor and
hold harmless Lessor, its subsidiaries, affiliates, successors, and assigns
and their respective directors, officers, employees, shareholders,
representatives and agents (hereinafter referred to collectively as "Lessor")
from and against and in respect of any and all claims, damages (including,
without limitation, diminution in value), losses, liabilities and expenses,
lawsuits, deficiencies, interest, penalties, attorneys' fees, and all amounts
paid in defense or settlement of the foregoing whether or not arising out of
third-party claims, which may be imposed upon or incurred by Lessor or
asserted against Lessor by any other party or parties (including Governmental
Entities), in connection with any Environmental Conditions or the remediation
of any Environmental Conditions (whether now known or hereafter discovered),
or any Environmental Noncompliance arising out of, resulting from, or
attributable to, the assets, business, or operations of Lessee at the Leased
Premises, including without limitation any claims, expenses, losses,
liabilities, etc. resulting from the alleged exposure of any person to
Environmental Conditions, if resulting from activities of Lessee or Lessee's
agents, representatives, employees or independent contractors, and the breach
of any of Lessee's representations and warranties below. Lessee's obligations
pursuant to this Article shall exist regardless of whether Lessor is alleged
or held to be strictly or jointly and severally liable.
Lessor agrees to indemnify, defend by counsel acceptable to Lessee and
hold harmless Lessee, its subsidiaries, affiliates, successors, and assigns
and their respective directors, officers, employees, shareholders,
representatives and agents (hereinafter referred to collectively as "Lessee")
from and against and in respect of any and all claims, damages (including,
without limitation, diminution in value), losses, liabilities and expenses,
lawsuits, deficiencies, interest, penalties, attorneys' fees, and all amounts
paid in defense or settlement of the foregoing whether or not arising out of
third-party claims, which may be imposed upon or incurred by Lessee or
asserted against Lessee by any other party or parties (including Governmental
Entities), in connection with any Environmental Conditions or the remediation
of any Environmental Conditions (whether now known or hereafter discovered),
or any Environmental Noncompliance arising out of, resulting from, or
attributable to, the assets, business, or operations of Lessor at the Leased
Premises, including without limitation any claims, expenses, losses,
liabilities, etc. resulting from the alleged exposure of any person to
Environmental Conditions, if resulting from activities of Lessor or Lessor's
agents, representatives, employees or independent contractors, and the breach
of any of Lessor's representations and warranties below. Lessor's obligations
pursuant to this Article shall exist regardless of whether Lessee is alleged
or held to be strictly or jointly and severally liable.
12.8 Reporting Requirements: Lessee shall promptly supply Lessor with
copies of all notices, reports, correspondence, and submissions made by Lessee
to EPA, the United States Occupational Safety an Health Administration or any
other local, state, or federal authority which requires submission of any
information concerning environmental matters or hazardous or toxic wastes or
substances.
12.9 Events of Default: The occurrence of any of the following
events shall constitute an Event of Default under this Lease, entitling Lessor
to all of the rights and remedies provided in Article IX;
(a) If Lessor receives its first notice of a Hazardous Discharge
or Environmental Complaint from a source other than Lessee, and the Lessor
does not receive notice (which may be given in oral form, provided same is
followed with all due dispatch by written notice given by Certified Mail,
Return Receipt Requested) of such Hazardous Discharge or Environmental
Complaint from Lessee within twenty-four (24) hours of the time Lessor first
receives said notice from a source other than Lessee; or
(b) If any federal, state, or local agency asserts or creates a
lien upon the Leased Premises or any portion thereof by reason of the
occurrence of a Hazardous Discharge or Environmental Complaint and such lien
is not released within ten (10) days of its creation; or
(c) If any federal, state, or local agency asserts a claim
against Lessee or Lessor for damages or cleanup costs relating to a Hazardous
Discharge or Environmental Complaint; provided, however, such claim shall not
constitute a default if, within five (5) days of the occurrence giving rise to
the claim;
(i) Lessee can prove to Lessor's satisfaction that Lessee
has commenced and is diligently pursuing either (1) a cure or correction of
the event which constitutes the basis for the claim and continues diligently
to pursue such cure or correction to completion or (2) proceedings for an
injunction, a restraining order or other appropriate emergent relief
preventing such agency or agencies from asserting such claim, which relief is
granted within ten (10) days of the occurrence giving rise to the claim and
the injunction, order, or emergent relief is not thereafter dissolved or
reversed on appeal; and
(ii) In either of the foregoing events, Lessee has posted a
bond, letter of credit, or other security satisfactory in form, substance, and
amount to Lessor and the agency or entity asserting the claim to secure the
proper and complete cure or correction of the event which constitutes the
basis for a claim.
12.10 Lessee's Remedial Action Responsibility:
(a) With respect to any known or subsequently discovered
Environmental Noncompliance or Environmental Condition caused by Lessee, and
without in any way limiting the scope of Lessee's obligations under the
Environmental Indemnification provisions of this Article, including Section
12.7 above, as between Lessee and Lessor, Lessee will be responsible for all
investigations, studies, cleanup, corrective action, or response or remedial
action required by any local, state, or federal government agency now or
hereafter authorized to regulate environmental matters (hereinafter
"Government Entities"), or by any consent decree, or court or administrative
order now or hereafter applicable to the Leased Premises, or by any federal,
state, or local law, regulation, rule, or ordinance now or hereafter in
effect.
(b) As between Lessor and Lessee, Lessee will pay all costs in
connection with any investigations, studies, cleanup, repair, and remedial
action relating to the matters acknowledged in Section 12.10, paragraph (a)
above including, without limitation, all capital improvements, installation,
operation, maintenance, testing, monitoring costs, preparation of plans,
designs, applications, studies, and reports by or for Governmental Entities or
other regulating agencies, the preparation of closure or other required plans,
the retention of legal counsel, engineers, and other expert consultants.
(c) As between Lessor and Lessee, Lessee shall have the
responsibility and right to participate in the management and control of all
investigations and any environmental cleanup, remediation, or related
activities relating to matters acknowledged in Section 12.10, paragraph (a)
above. Lessee, however, may not negotiate with, fulfill any requirements or
claims made by a Governmental Entity or third party, settle or contest such
requirement or third-party claim without the express approval of Lessor, and
Lessor shall have the right to participate fully in any and all meetings,
negotiations, or decisions relevant to the investigation or remediation of
Environmental Conditions at the Leased Premises.
(d) In the event that Environmental Conditions are discovered at
the Leased Premises subsequent to the date hereof, Lessee shall promptly
notify Lessor of the condition, and if Lessor determines in its sole
discretion that such Environmental Conditions are attributable to the
activities of Lessee's predecessors in interest, Lessor shall have the
exclusive right to manage and control all investigations and any environmental
cleanup, remediation, or related activities, and the exclusive right to
negotiate with and to fulfill any requirements or claims made by a
Governmental Entity or third party related to such Environmental Conditions,
including the right to settle or contest such requirement or third-party
claim. Lessee shall maintain the confidentiality of, and not disclose to
others, any information provided to it by Lessor, pursuant to the terms and
conditions specified by Lessor. Lessor's rights pursuant to this section do
not alter or diminish Lessee's indemnity obligations pursuant to this Article,
including Section 12.7 above.
(e) In the event that Environmental Noncompliance is discovered or
alleged to exist at the Leased Premises subsequent to the date hereof caused
by Lessee, Lessee will pay all reasonable costs incurred by Lessor in
defending and correcting the conditions which constitute Environmental
Noncompliance. Lessor shall promptly notify Lessee of any such Environmental
Noncompliance, but Lessor shall have the exclusive right to manage and control
the resolution of such issues. The provisions of this section do not diminish
Lessee's obligations under this Article, including Section 12.7 above.
12.11 Inspection Rights: Notwithstanding any other provision of this
lease to the contrary, Lessor shall have the right to enter and inspect the
Leased Premises, including but not limited to all structures thereon and the
business operations of Lessee, upon reasonable notice and in a manner so as
not to interfere unreasonably with the conduct of Lessee's business, to
investigate the possibility of any Environmental Condition or Environmental
Noncompliance at, upon, about, or under the Leased Premises. Lessor may
exercise this right at its sole discretion. During such inspection, landlord
shall have the right to take such samples and conduct such tests as it may
determine in its sole discretion to be necessary or advisable. Lessee shall
have the right to split samples of any samples so taken. The incurrence by
Lessor of any expense under the provisions of this shall not impair any claim
for indemnification Lessor may have under the provisions of this Article,
including Section 12.7 above.
12.12 Environmental Assessment: Lessee shall have the right, at its
expense, to conduct an environmental assessment of the Leased Premises at any
time during the Lease Term or Extended Term; provided that, if the
environmental assessment would require any structural or material alterations
to the Leased Premises, Lessee shall obtain the written consent of the Lessor
prior to conducting such an assessment, which consent shall not be
unreasonably withheld; and provided further that the Leased Premises are
restored to their pre-assessment condition by Lessee, at its expense, upon the
completion of the environmental assessment.
ARTICLE XIII
MISCELLANEOUS PROVISIONS
13.1 Lessee's Taking of Possession: Prior to taking possession of the
Leased Premises, Lessee shall have the right to physically inspect the Leased
Premises, including all common areas, to make sure it is in good working order
and condition. Lessee's taking possession of the Leased Premises shall
constitute Lessee's acknowledgement that Lessee is satisfied with the
condition of the Leased Premises. Lessee shall be entitled to take possession
of the Leased Premises upon the execution hereof.
13.2 Lessor's Right of Entry and Inspection: Lessor, and its authorized
agents and representatives, shall, upon reasonable notice, have the right to
enter the Leased Premises at all reasonable times for any of the following
purposes:
a. To determine whether the Leased Premises are in good condition
and whether Lessee is complying with its obligations under this Lease;
b. To do any necessary maintenance and to make any restoration,
replacement or repair of the Leased Premises that Lessor has the right or
obligation to perform;
c. To serve, post or keep posted any notices required or allowed
by this Lease;
d. To post "for sale" signs at any time during the Lease Term, to
post "for rent" or "for lease" signs during the last three months of the Lease
Term, or during any period when Lessee is in default;
e. To show the Leased Premises to prospective brokers, agents,
buyers, tenants, or persons interested in an exchange, at any time during the
Lease Term.
Lessor shall conduct its activities on the Leased Premises as
allowed in this in a manner that will not cause unreasonable inconvenience,
annoyance or disturbance to Lessee.
13.3 Time of Essence: Time is of the essence of each provision of this
Lease.
13.4 Entire Agreement: This Lease contains the entire agreement of the
parties with respect to the matters covered by this Lease, and no other
agreement, statement or promise made by any party, or to any employee, officer
or agent of any party, which is not contained in this Lease shall be binding
or valid.
13.5 Partial Invalidity: If any term, covenant, condition or provision
of this Lease is held by a court of competent jurisdiction to be invalid, void
or unenforceable, the remainder of the terms, covenants, conditions and
provisions of this Lease shall remain in full force and effect and shall not
be invalidated.
13.6 Interpretation and Headings: The language in all parts of this
Lease shall in all cases be simply construed according to its fair meaning and
not strictly for or against Lessor or Lessee. Captions of the articles and
sections of this Lease are for the purposes of convenience only, and the words
contained in said captions shall in no way be held to explain, modify, amplify
or aid in the interpretation, construction or meaning of the provisions of
this Lease.
13.7 Attorneys' Fees: In the event that either Lessor or Lessee bring
any action or proceeding for damages or for an alleged breach or default of
any provision of this Lease, or to recover rents, or to enforce, protect or
establish any right or remedy of either party, the prevailing party shall be
entitled to recover as a part of such action or proceeding reasonable
attorney's fees and court costs.
13.8 Modification: This Lease is not subject to modification except in
a writing signed by Lessor and Lessee.
13.9 Notices: All notices, demands or requests from one party to
another may be personally delivered or sent by mail, certified or registered,
postage prepaid, to the addresses stated in this Section, and shall be deemed
to have been given at the time of personal delivery, or forty-eight (48) hours
after mailing. Each party shall have the right, from time to time, to
designate a different address by notice given in conformity with this Section.
Lessee: Xxxxxx and Xxxxxxxxxx Sales, Co.
Attention: President
0000 Xxxxxxx Xxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Fax: (000) 000-0000
Copy to: Epitope, Inc.
Attention: President
0000 X.X. Xxxxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxx 00000
Fax: (000) 000-0000
Lessor: Xxxxxxxxxx & Xxxxxx
Attention: Xxxx X. Xxxxxxxxxx
0000 Xxxxxxx Xxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Fax: (000) 000-0000
Copy to: Xxxx X. Xxxxxx
X.X. Xxx 0000
Xxxxxxxxxxx, Xxxxxxxxxx 00000
Fax: (000) 000-0000
13.10 Successors, Heirs and Assigns: Each and all of the covenants,
conditions and restrictions contained in this Lease shall be deemed to run
with the land, and shall be binding on and inure to the benefit of the parties
and their successors, heirs, assignees, transferees and subtenants.
13.11 California Law to Govern: The rights and obligations of each of
the parties to this Lease, and the terms of the Lease itself, shall be
interpreted, enforced and governed by the laws of the State of California.
13.12 Real Estate Brokers: Each party represents that it has not had
dealings with any real estate broker, finder or other such person, with
respect to this Lease in any manner. Each party shall indemnify and hold
harmless the other party from all damages resulting from any claims that may
be asserted against the other party by any broker, finder or other person with
whom the indemnifying party has dealt.
13.13 Corporate Authority: Lessee shall deliver to Lessor on execution
of this Lease a certified copy of a resolution of its board of directors
authorizing the execution of this Lease and naming the officers that are
authorized to execute this Lease on behalf of Lessee.
ARTICLE XIV
FORMALITIES
14.1 Recordation: Neither party shall record this Lease without the
written consent of the other party. However, upon the request of either party,
the other party shall join in the execution of a memorandum or "short form" of
this Lease for the purpose of recordation. The memorandum shall, at the
minimum, describe the parties, the Leased Premises and the Lease Term, and
shall incorporate this Lease by reference, and shall be in a form satisfactory
to both parties.
14.2 Counterparts: This Lease, consisting of twenty-two (23) pages, may
be executed by the parties in several counterparts, each of which shall be
deemed to be an original copy.
This Lease was executed by the parties on the dates shown next to the
respective signatures of each of the parties.
LESSOR
XXXXXXXXXX & XXXXXX
Dated: December 12, 1992 By: /s/Xxxx X. Xxxxxx
Title: Partner
LESSEE
XXXXXX AND XXXXXXXXXX SALES,
CO.
Dated: December 12, 1992 By: /s/ Xxxx X. Xxxxxxxxxx
Title: President