Exhibit 10.3
AMENDED AND RESTATED GROUND LEASE
THIS AMENDED AND RESTATED GROUND LEASE (this "LEASE") made this 1st day
of September, 1996, by and between THE IRVINE COMPANY, a Michigan corporation,
dba Irvine Land Management, herein referred to as "LANDLORD," and XXXXX
HORTICULTURE, INC., a California corporation, herein referred to collectively as
"TENANT".
R E C I T A L S
A. Landlord, as "Lessor" and Tenant, as "Lessee," are parties to that
certain Ground Lease dated October 27, 1968 by and between The Irvine Company, a
West Virginia corporation, predecessor in interest to Landlord, and Xxxxx X.
Xxxxx, Xxxxx X. Xxxxx, Xx., and Xxxxx X. Xxxxxx (collectively, "XXXXX/SHIRAR"),
as amended (the "1968 LEASE"). The 1968 Lease replaced that certain Lease dated
January 1, 1958 (the "1958 LEASE") and that certain Farming Lease dated May 26,
1967 (the "1967 LEASE") between the same parties. The 1958 Lease, the 1967 Lease
and the 1968 Lease are hereinafter collectively referred to as the "ORIGINAL
LEASE". Tenant has succeeded to the interest of Xxxxx/Shirar in the Original
Lease via mesne conveyances.
B. Landlord and Tenant desire to further amend and to restate the
Original Lease.
A G R E E M E N T
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants contained herein, the parties agrees as follows:
1. DEFINITIONS.
1.3 Acre Roadway. The term "1.3 ACRE ROADWAY" shall mean that
certain portion of the leased premises more particularly described on attached
EXHIBIT D.
DRAINAGE EASEMENT AREA. The term "DRAINAGE EASEMENT AREA"
shall mean that certain property located between Tenant's existing fence along
the westerly boundary of the leased premises and the School Property and the
block wall to the west thereof and the land located twenty-five (25) feet inside
of Tenant's existing fence, but excluding the V ditch located adjacent thereto.
HAZARDOUS MATERIAL. The term "HAZARDOUS MATERIAL" shall mean
any hazardous, harmful, odorous, toxic or danger material or substance,
including, without limitation, any hazardous material or substance, pollutant or
contaminant defined as such now or in the future in (or for the purposes of)
Hazardous Materials Laws.
HAZARDOUS MATERIAL LAWS. The term "HAZARDOUS MATERIALS LAWS"
shall mean the Comprehensive Environmental Response, Compensation and Liability
Act, 42 U.S.C. Sections 9601 ET. SEQ., any so-called "Superfund" or "Superlien"
law, the Toxic Substances Control Act, 15 U.S.C. Sections 2601 ET. SEQ., the
Resources Conversation and Recovery Act, 42 U.S.C., Sections 6901, ET. SEQ., the
Federal Water Pollution Control Act, 33 U.S.C. Sections 1251 ET. SEQ., or any
other federal, state or local statute, law, ordinance, code, rule, regulation,
permit, order or governmental decree regulating, relating to, or imposing
liability or standards of conduct concerning any substance, material or waste,
as it now or at any time hereafter may be in effect and as any of same may be
amended from time to time.
XXXXX. The term "XXXXX" shall mean, collectively, Tenant, any
successor tenant under this Lease, and any lessee or tenant under the Original
Lease.
XXXXX' REPRESENTATIVES. The term "XXXXX' REPRESENTATIVES"
shall mean any of Xxxxx' sublessees, licensees, contractors or subcontractors
and Xxxxx' and such other parties' and entities' respective employees, agents,
representatives and invitees. The term "Xxxxx' Representatives" shall include
all of Tenant's Representatives.
LEASED PREMISES. The term "LEASED PREMISES" shall mean that
real property described on EXHIBIT A attached hereto, as such property is from
time to time adjusted pursuant to the terms of this Lease or pursuant to an
addendum or amendment hereto.
PERMITTED AGRICULTURAL CHEMICALS. The term "PERMITTED
AGRICULTURAL CHEMICALS" shall mean those fertilizers, pesticides, pre- and
post-emergent weed killers and other agricultural chemicals which (a) are
registered for use in the container nursery business in California at the time
of use and (b) allowed for use at the time utilized by Tenant pursuant to all
applicable federal, state and local laws, ordinances and regulations.
PERMITTED PETROLEUM FUELS. The term "PERMITTED PETROLEUM
FUELS" shall mean those petroleum fuels which (a) are of a type and in
quantities reasonably necessary for the operation of vehicles associated with
Tenant's operations, (b) are stored in either above-ground storage tanks or
underground storage tanks which in either event are suitable for safe storage
and which comply with all applicable federal, state and local laws, ordinances
and regulations, and (c) are used in a manner that complies with all applicable
federal, state and local laws, ordinances and regulations.
PORTOLA PROPERTY. The term "PORTOLA PROPERTY" shall mean that
property more particularly described on the attached EXHIBIT D. The Portola
Property includes a portion of the "OLD HAUL ROAD PARCEL" as described in
Addendum No. 20 to Ground Lease dated April 19, 1996 (which amended the 1968
Lease).
SCHOOL LEASE. The term "SCHOOL LEASE" shall mean that certain
School Site Nursery Lease dated June 26, 1992 and executed by Landlord and
Tenant with respect to the School Property.
SCHOOL PROPERTY. The term "SCHOOL PROPERTY" shall mean that
property leased to Tenant under the School Lease and more particularly described
on attached EXHIBIT D.
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TENANT'S PROPERTY. The term "TENANT'S PROPERTY" shall mean all
improvements, fixtures, equipment and other property placed or constructed on
the leased premises by Xxxxx or Xxxxx' Representatives under the Original Lease
or this Lease.
TENANT'S REPRESENTATIVES. The term "TENANT'S REPRESENTATIVES"
shall mean any of Tenant's sublessees, licensees, contractors or subcontractors
and Tenant's and their respective employees, agents, representatives, or
invitees.
ADDITIONAL DEFINITIONS. This Lease contains additional defined
terms. Terms defined in other parts of this Lease shall have the defined
meanings wherever capitalized herein.
2. LEASED PREMISES.
2.1 AGREEMENT TO LEASE. Subject to Section 2.4 below, Landlord
hereby leases to Tenant the property described on EXHIBIT A attached hereto and
delineated on EXHIBIT B attached hereto and hereby incorporated herein, subject
to:
(a) Taxes for the year 1996-97, a lien not yet
payable; and
(b) Covenants, conditions, reservations,
restrictions, rights and rights of way and easements of record or apparent.
The leased premises shall be divided into three types of property for purposes
of Landlord's right to terminate as provided in Section 8 below, Areas A, B and
C as shown on EXHIBIT C.
2.2 ADDITIONAL PREMISES.
(a) OBLIGATION TO OFFER. Landlord agrees that it
shall offer to Tenant as additional leased premises, on the same terms and
conditions as provided in this Lease, that parcel of land consisting of
approximately 40 acres of land located at the southeast corner of Area C of the
leased premises (the "40 ACRE PARCEL"), and Landlord shall use commercially
reasonable efforts to make such 40 Acre Parcel available to Tenant not later
than July 15, 1997. Commencing June 1, 1997, Tenant shall have the right to
enter the 40 Acre Parcel for purposes of conducting such physical inspections as
Tenant deems appropriate; provided that Tenant shall (i) use all reasonable
diligence to avoid damage to any crops, equipment or improvements on the 40 Acre
Parcel and (ii) repair any and all damage caused by such entry. Tenant shall
advise Landlord not later than July 31, 1997 whether such 40 Acre Parcel is
reasonably suited for Tenant's operations, in Tenant's sole discretion. If the
40 Acre Parcel is added to the leased premises, it shall be considered part of
Area C.
(b) AS-IS CONDITION. If Tenant elects to add the 40
Acre Parcel to the leased premises, said property shall be added in its "AS-IS"
condition; provided that, except as may have been caused by Xxxxx or any of the
Xxxxx' Representatives, Tenant shall not be responsible for any Hazardous
Materials located on the 40 Acre Parcel or violations of Hazardous Material Laws
existing prior to the date the 40 Acre Parcel is added to the leased premises.
Landlord shall not have any obligation to improve the 40 Acre Parcel in any
manner. If Tenant discovers any Hazardous Materials on the 40 Acre Parcel,
Tenant shall promptly give Landlord written notice and either Landlord or Tenant
shall thereafter have the right to delete the portion of such 40 Acre Parcel
contaminated with Hazardous Materials from the leased premises.
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2.3 Compliance With Terms of Original Lease.
With regard to land previously leased under the Original Lease but not
included in the leased premises under this Lease, and with regard to acts and
occurrences which were addressed in the Original Lease but are not addressed in
this Lease, Landlord and Tenant agree that the applicable terms of the Original
Lease, which are incorporated herein by this reference, shall continue to apply;
provided, however, in the event of any specific conflict between the provisions
of the Original Lease and the provisions of this Lease, the provisions of this
Lease shall prevail.
2.4 LENDER APPROVAL.
The effectiveness of this Lease shall be conditional upon the approval,
in form and content approved by Tenant, of any "encumbrancer" (as defined in
Article XIV of the General Conditions) which holds a lien upon the Original
Lease. If such approval is not received by Tenant by September 15, 1996, Tenant
shall have the right to terminate this Lease by giving written notice to
Landlord on or before such date. If Tenant has not given Landlord notice of such
termination on or before such date, this condition shall be deemed waived by
Tenant. In the event of a termination by Tenant under this Section 2.4, the 1968
Lease shall continue to apply as written.
3. TERM.
3.1 BASIC LEASE TERM. Subject to Section 8 below, the term of
this Lease shall commence as of January 1, 1996 and shall end December 31, 2010,
unless sooner terminated as hereinafter provided.
3.2 EXTENSION. Tenant shall have the right to request an
extension of the term of this Lease from time to time, but Landlord may accept,
reject, or accept subject to specified conditions (including but not limited to
increased rent and/or an alteration of the leased premises) as Landlord may
elect, in its sole and absolute discretion.
4. TENANT'S OPERATIONS: Tenant shall use and occupy the leased premises
for the planting, raising and handling of ornamental trees, shrubs and plants
for the wholesale market, but for no other use or purpose without the prior
written consent of Landlord. Subject to the terms of this Lease (including but
not limited to Article II of the General Conditions to Ground Lease attached
hereto), Tenant may, at its expense, place and maintain on the leased premises
such removable buildings, structures and equipment as it may deem necessary or
convenient for the uses and purposes hereinabove authorized. Tenant shall at all
times during said term conform to and comply with all public laws, ordinances
and regulations applicable to the leased premises and to the operations of
Tenant thereon. Tenant shall continuously carry on and conduct said operations
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in accordance with sound business practices and so as to produce therefrom as
much revenue as shall be reasonably possible. If Tenant shall fail to
continuously conduct the same as hereinabove provided, any such failure shall
constitute a material failure of consideration hereunder and a breach of the
covenants and conditions of this Lease; provided, however, that said operations
may be suspended at any time so long as and to the extent that the same shall be
prevented by war, acts of God, or other unavoidable accidents or interferences
beyond the reasonable control of Tenant, but not otherwise.
5. RENTAL. Tenant agrees to pay to Landlord as rent for the use and
occupancy of the leased premises during the term of this Lease sums equivalent
to the following amounts:
(a) MINIMUM ANNUAL RENTAL: A sum equal to the "RENT PER ACRE"
times the number of gross acres included in the leased premises, payable
quarterly in advance on or before the tenth (10th) day of January, April, July
and October of each and every calendar year of said term. The "RENT PER ACRE"
shall be *** per gross acre per year from the date hereof through December 31,
2002, and *** per gross acre per year from January 1, 2003 through the end of
the term of this Lease.
(b) PERCENTAGE RENTAL.
(i) For the period commencing January 1, 1996, Tenant
shall pay to Landlord, a sum equal to "PERCENTAGE RENT RATE" times *** to the
extent that said percentage rental shall exceed the minimum annual rental which
Tenant shall have paid for each period. The "PERCENTAGE RENTAL RATE" shall be:
***
Said additional percentage rental, if any, shall be paid by Tenant to Landlord
annually on or before the first day of March of each year next following the
expiration of each yearly period and shall be based upon and measured by *** See
also Section 7.6 below concerning receipts derived from business conducted on
the School Property.
(ii) *** reportable for percentage rental do not
include the following:
(A) ***
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*** Information omitted and filed separately with the Commission for
confidential treatment.
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(B) ***
(C) ***
(D) ***
(E) ***
(F) ***
(G) ***
(H) ***
6. RECORDS: At all times during said term, Tenant shall keep and
maintain accurate and complete books of account of all *** derived from all
business conducted on the leased premises as hereinabove provided, all of which
books shall be kept and maintained on a cash receipts basis, and Tenant shall
furnish Landlord at the time each percentage rental payment, as payable
hereunder, a written statement showing the amounts and sources of said *** and
Landlord, through its authorized agents, shall have the right at any reasonable
time or times to examine said books of account for the purpose of verifying the
accuracy of any such statement.
7. SCHOOL PROPERTY.
7.1 1.3 ACRE ROADWAY. Upon the expiration of the School Lease,
the 1.3 Acre Roadway shall be deleted from the leased premises.
7.2 DRAINAGE EASEMENT AREA. Tenant hereby grants to Landlord
the non-exclusive right to use and to grant non-exclusive easements to third
parties to use the Drainage Easement Area for the construction, installation,
use and repair of utilities, drainage and access facilities; provided that,
however, the right to use the portion of the Drainage Easement Area located
within that portion of the leased premises inside Tenant's fence (as such fence
existed as of June 25, 1992) shall be subject to the following restrictions:
(a) Said area shall not be used for access purposes,
except for access during the period of any construction or repair activities;
(b) Any and all improvements constructed in said area
either must be underground or, if above ground, must not interfere in any
material respect with Tenant's normal operations on the leased premises or the
School Property, as determined by Tenant in its sole and absolute discretion;
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*** Information omitted and filed separately with the Commission for
confidential treatment.
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(c) Any construction, use and repair activities shall
not cause any material disruption to the use of Tenant's access to roadway or to
the other facilities or operations of Tenant, as reasonably determined by
Tenant; provided that Tenant shall use reasonable efforts, at no cost to Tenant,
to accommodate such construction and repair activities;
(d) If any of Tenant's improvements located on or
around said area (including, but not limited to, Tenant's fence, irrigation
facilities or drainage facilities) are damaged, destroyed or removed during any
construction or repair activities, Landlord shall repair or replace said
improvements to their original condition at Landlord's sole cost and expense;
(e) Landlord shall keep Tenant's irrigation and
drainage facilities operable during the period of any construction and repair
activities at Landlord's sole cost and expense. Keeping said facilities operable
shall include (but shall not be limited to) insuring that drainage continues to
flow into Tenant's recycling center; and
(f) Landlord shall, at Landlord's sole cost and
expense, protect in place Tenant's propagation mist bed and buildings located on
or around said property.
7.3 DRAINAGE AND UTILITY PROBLEMS. Landlord and Tenant hereby
covenant and agree to cooperate in good faith in solving any problems relating
to drainage from the School Property to the leased premises and/or relating to
utilities serving the School Property.
7.4 REROUTING SURFACE DRAINAGE. Upon the expiration or sooner
termination of the School Lease, Tenant hereby agrees to reroute the surface
drainage from the leased premises so that such drainage does not flow across the
School Property or the 1.3 Acre Roadway.
7.5 DRAINAGE FROM SCHOOL PROPERTY. Landlord hereby represents
that it has in the documents conveying the School Property to Irvine Unified
School District ("DISTRICT"), required District to design a drainage system such
that, on and after the date grading commences on the School Property, surface
water on the School Property flows in a westerly direction into a public street
or drainage facility. Landlord shall not be deemed to have made any warranty
that storm water runoff which exceeds the capacity of a drainage system approved
by the City of Irvine will not run into the V ditch or will not otherwise affect
Tenant.
7.6 ADJUSTMENTS TO PERCENTAGE RENTAL. For purposes of
calculating percentage rental in connection with this Lease, the *** shall
include *** as well as *** times a fraction, the numerator of which is the
number *** and the denominator of which is the number of gross acres leased
pursuant to this Lease during the relevant year plus the number ***.. Nothing in
this Lease is intended to increase the rent payable under the School Lease.
8. Deletions from the Leased Premises.
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*** Information omitted and filed separately with the Commission for
confidential treatment.
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8.1 General Right to Delete.
(a) As to that portion of the leased premises
included within Area B, Landlord may at any time and from time to time upon not
less than three (3) years' written notice (an "AREA B DELETION NOTICE"), elect
to remove all or any part of Area B from the leased premises; provided, however,
that Tenant shall have the right to object to any partial deletion that creates
a material operational problem (including but not limited to increased operating
costs) as to the remaining portion of Area B that remains in the leased
premises. Tenant shall object in writing, to include a reasonable explanation of
the problems created, within ninety (90) days of Landlord's Area B Deletion
Notice, and failure to so object shall be deemed Tenant's acceptance of such
deletion. In the event of such objection, Landlord and Tenant shall attempt in
good faith to resolve the operational problems created, and if Landlord and
Tenant cannot agree upon a resolution within sixty (60) days after Tenant's
objection, Landlord shall either (i) withdraw such Area B Deletion Notice, or
(ii) elect to withdraw all of Area B. The deletion(s) of the applicable
portion(s) (or all) of the Area B from the leased premises shall occur on the
later of the *** from the date of the Area B Deletion Notice or the termination
date specified in the Area B Deletion Notice(s), but in no event prior to ***.
(b) As to that portion of the leased premises
included within Area C, Landlord may at any time and from time to time upon not
less than two (2) years' written notice (the "AREA C DELETION NOTICE"), elect to
remove such portion(s) of Parcel C as Landlord may require for inclusion within
the Open Space Spine along Xxxxxxx Road; provided, however, that Landlord will
use commercially reasonable efforts to plan and implement the Open Space Spine
in a manner that will minimize the effect on Tenant's operations on the leased
premises so long as such efforts do not have any material impact or restriction
on Landlord's overall planning of long range development of the area or its
negotiations with the City of Irvine. Tenant may, from time to time, request
information from Landlord concerning the status of such Open Space Spine, and
Landlord shall reasonably cooperate in providing such information. Tenant
acknowledges that the Open Space Spine must average 300 feet in width between
the I-5 and the Preservation Area in the Lomas de Xxxxxxxx Xxxxx. The
deletion(s) of the applicable portion of Area C from the leased premises shall
occur on the later of *** from the date of the Area C Deletion Notice or the
termination date specified in the Area C Deletion Notice(s).
8.2 DELETION REGARDING INFRASTRUCTURE IMPROVEMENTS. Landlord
shall have the right to delete from the leased premises or to grant
non-exclusive easements to third persons over such portions of the leased
premises as may be necessary:
(a) For making improvements to the Xxxxx Canyon Wash,
which improvements may include pedestrian, bicycle and/or equestrian trails
adjacent to the wash, or for the purpose of realigning the Xxxxx Canyon Wash;
provided that the improvements or realignment shall be located southerly or
northerly of the existing channel, or both, but at any given point said
improvements or realignment shall not encroach more than fifty (50) feet south
from the presently existing southern boundary of said wash;
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*** Information omitted and filed separately with the Commission for
confidential treatment.
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(b) For making improvements to or minor realignments
of other existing drainage facilities within the leased premises; or
(c) For installing underground sewer, storm drain,
electrical, water or other utilities.
Notwithstanding the foregoing, said property shall not be deleted from the
leased premises and said easements shall not be granted, if Tenant reasonably
determines that such deletion or easement may cause material damage or
disruption to Tenant's Property or Tenant's operations on the remaining leased
premises. Tenant hereby agrees to cooperate with Landlord in effectuating any
such deletion or grant, so long as Landlord pays or reimburses Tenant for any
costs incurred by Tenant with respect thereto.
8.3 DELETION OF PROPERTY UPON PHASE-OUT OF OPERATIONS BY
TENANT. Landlord and Tenant hereby acknowledge that a significant amount of time
is necessary to wind up Tenant's operations on the leased premises. Tenant plans
to wind up its operations in phases. Tenant and Landlord hereby agree to
cooperate with each other in deleting from the leased premises property that is
no longer being used by Tenant in its operations as early as reasonably
possible.
8.4 PORTOLA PROPERTY. The Portola Property has previously been
deleted from the leased premises (see Addendum No. 18 to Ground Lease dated June
___, 1992 and Addendum No. 20 to Ground Lease dated April 19, 1996, both of
which amended the 1968 Lease). Upon the commencement of the construction of the
Portola street project on the Portola Property, Tenant agrees to grant Landlord
a temporary construction license on portions of the leased premises adjacent to
the Portola Property; provided that no construction staging shall be conducted
on such licensed property. The terms of the license and the portions of the
leased premises subject to the license shall be mutually satisfactory to
Landlord and Tenant. Tenant and Landlord agree to adjust the description of the
Portola Property as necessary based upon final construction of the Portola
Parkway road improvements.
8.5 QUITCLAIM DEED. As property is deleted from the leased
premises, Tenant shall, upon request by Landlord, provide such quitclaim deeds
or other instruments as may be reasonably requested by Landlord to evidence such
deletion.
9. WAIVER OF PRESCRIPTIVE CLAIMS. Tenant hereby covenants and agrees to
and does hereby waive any and all claims Tenant may have to any prescriptive
rights in that certain road and V ditch located along the westerly portion of
the leased premises.
10. GENERAL CONDITIONS. The General Conditions to Ground Lease attached
hereto are by this reference incorporated herein and made a part hereof.
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(Signature Page Follows)
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[SIGNATURE PAGE TO AMENDED AND RESTATED GROUND LEASE]
IN WITNESS WHEREOF, the parties hereto have executed this Amended and
Restated Ground Lease, as of the day and year first above written.
"LANDLORD" "TENANT"
THE IRVINE COMPANY,
A Michigan corporation, XXXXX HORTICULTURE, INC.,
dba Irvine Land Management a California corporation
By:/S/ CHICK X. XXXXXXXX By:/S/ E.G. XXXXXXX
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Chick X. Xxxxxxxx Title: GENERAL MANAGER
President, Irvine Land Management, a -----------------------
division of The Irvine Company
By:/S/ XXXXX XXXXXXXX
-----------------------------------------
Xxxxx Xxxxxxxx, Assistant
Secretary, The Irvine Company
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GENERAL CONDITIONS TO GROUND LEASE
The following General Conditions to Ground Lease are incorporated in
and made a part of the foregoing Amended and Restated Ground Lease as though
fully set forth at length therein, to wit:
ARTICLE I
TENANT'S OPERATIONS
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1.1 PERMITTED USE. During the term of this Lease, the leased premises
and all improvements constructed and maintained thereon shall be used by the
Tenant for the use specified and for no other use or purpose. Tenant shall not
use or permit any other person to use said leased premises, or any part thereof,
for any purposes tending to injure the reputation thereof or for any improper or
offensive use or to constitute a nuisance; and Tenant shall at all times during
said term conform to and cause all persons using or occupying any part of said
premises to comply with all public laws, ordinances and regulations from time to
time applicable thereto and to all operations thereon.
ARTICLE II
TENANT'S IMPROVEMENTS
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2.1 APPROVAL REQUIRED. No building or structure (other than structures
having no foundation), the plans, specifications and proposed location of which
have not first received the written approval of Landlord as provided in Section
2.2 below, or which does not comply with such approved plans, specifications and
locations, shall be constructed or maintained on the leased premises. No
material addition to or alteration of any building or structure erected on the
leased premises and regarding which Landlord's approval would be required above
if constructed pursuant hereto shall be commenced unless and until plans and
specifications covering the exterior of the proposed addition or alteration
shall have been first submitted to and approved by Landlord in the manner above
provided. When the construction of any building or other structure on the leased
premises, or any addition thereto or alteration thereof, is commenced, the same
shall be prosecuted with reasonable diligence to completion, and shall comply
with all public laws, ordinances and regulations applicable thereto and shall be
constructed and completed at the sole cost and expense of Tenant and without any
cost, expense or liability of Landlord whatsoever.
2.2 APPROVAL OF PLANS. Before Tenant commences the construction the any
improvements on the leased premises which require approval under Section 2.1,
Tenant shall deliver to Landlord for its approval two (2) complete sets of
construction plans and specifications for the exterior of said improvements,
prepared by a licensed architect or licensed engineer, including, but not
limited to, grading and drainage plans and soils report as provided under
Article IV hereinbelow, a plot plan showing the proposed location of said
improvements, all utilities and service connections and all places of ingress
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and egress to public streets and roads and plans for outdoor signs, lighting and
landscaping; provided, however, if such improvements do not require a building
permit from the applicable governmental agency, then Tenant may submit for
approval, rather than construction plans and specifications prepared by a
licensed architect or licensed engineer, such other plans, plots or information
as shall reasonably reflect and describe the planned improvement. If approved,
such approval shall be endorsed by Landlord upon said plans, specifications and
plot plan within thirty (30) days from the receipt thereof, one (1) set of which
shall be retained by it. If Landlord does not approve such plans and
specifications, Landlord shall within thirty (30) days from the receipt thereof
notify Tenant of its reasons for not approving said plans and specifications.
2.3 NATURE OF LANDLORD'S APPROVAL. The approval by Landlord of any
plans and specifications refers only to the conformity of such plans and
specifications to the general architectural plan for the leased premises and
neighboring land of the Landlord; such plans and specifications are not approved
for architectural or engineering design and Landlord; by approving such plans
and specifications, assumes no liability or responsibility therefor or for any
defect in any structure constructed from such plans or specifications.
ARTICLE III
SIGNS
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3.1 APPROVAL OF SIGNS REQUIRED. Tenant may, at its expense, erect on
the leased premises such signs and exterior display and storage areas and
provide such exterior lighting as shall be provided in the plans and
specifications for the improvements approved under Article II above, but Tenant
shall not thereafter erect or maintain any other or additional signs or exterior
displays or storage areas or any other exterior lighting on said land without
the prior written approval and consent of the Landlord.
ARTICLE IV
CONDITIONS OF THE LEASE PREMISES
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4.1 TENANT TO EVALUATE SOIL CONDITION. It is understood and agreed that
Tenant, prior to any construction under the Original Lease or this Lease, has
made, or prior to any construction hereunder will make, its own tests to
ascertain the amount and extent of the present fill and/or any subsurface or
soil condition upon or in connection with the leased premises and that this
Lease is made subject to and without liability because of or resulting from any
fill or any subsurface or soil condition upon or in connection with the leased
premises.
4.2 APPROVAL OF GRADING PLANS. Prior to the commencement of any grading
on the leased premises which involve the cut or fill of more than 2,000 cubic
yards of soil in any given one (1) acre area of the leased premises, Tenant
shall submit grading and drainage plans to the Landlord for its approval as
provided under ARTICLE II hereof, showing the existing topography, proposed cut
and fill and proposed finished grade together with calculations of anticipated
run-off and points of concentration. Tenant shall not in any event perform
grading on the leased premises which affects drainage in violation of Section
4.3 below.
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4.3 DRAINAGE. Tenant shall not drain or discharge water from the leased
premises on to adjoining premises except pursuant to drainage courses existing
as of the date hereof, and Tenant shall in all cases use its best efforts to
cause drainage from the leased premises to cause no detrimental effect on
adjoining properties. Tenant shall not change the drainage from the leased
premises in any material way, including any increase in volume or velocity of
flow, without the prior written approval of Landlord, which approval shall not
be unreasonably withheld or delayed so long as (a) such change complies with all
applicable discharge permits issued by the County of Orange, and (b) such change
does not violate the other provisions of this Lease, including Section 7 of the
Lease to which these General Conditions are attached.
ARTICLE V
TAXES
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5.1 TENANT TO PAY TAXES. In addition to the rentals hereinabove
provided, Tenant shall pay and discharge all taxes, general and special
assessments and other charges of every description which during the term of this
Lease may be levied upon or assessed against the leased premises and all
interests therein and all improvements and other property thereon, whether
belonging to Landlord or Tenant, or to which either of them may become liable in
relation thereto ("TAXES"), not later than thirty (30) days prior to the
delinquency date thereof; provided that, however, Tenant shall not be liable for
any increases in Taxes that result from changes in ownership in the fee interest
in the leased premises or from the creation of any new Xxxxx-Xxxx or Assessment
District which is formed on or after the date hereof. For purpose of this Lease,
the term "change in ownership" shall have the same definition as in California
Revenue and Taxation Code Sections 60-62, or any amendment or successor statutes
to those sections; provided, however, if any change of ownership is deemed to
have occurred by reason of this Lease or any amendment hereto, Tenant shall
nevertheless pay all such increased Taxes. Tenant hereby agrees to protect and
hold harmless Landlord and the leased premises and all improvements in, on or
about the same from all liability for any and all such Taxes payable by Tenant
pursuant to this Section and from any sale or other proceeding to enforce
payment thereof. During said term, Tenant shall cause all taxes, assessments and
other charges levied upon or imposed upon any personal property situated in, on
or about the leased premises to be levied or assessed separately from the leased
premises and not as a lien thereon.
5.2 PRORATIONS. All such taxes and assessments for the last year of
this Lease shall be prorated between the Landlord and Tenant on the basis of a
tax fiscal year commencing July 1 and ending June 30.
5.3 UNSEGREGATED TAXES. If the leased premises is assessed for taxation
purposes with other lands of the Landlord, until the leased premises is
separately assessed, all real estate taxes and assessments imposed upon the
entire block in which the leased premises is a part shall be prorated and the
Tenant shall pay that portion that the area of the leased premises hereunder
bears to the total area of all land within the assessment block.
-3-
ARTICLE VI
UTILITIES
---------
6.1 TENANT RESPONSIBLE FOR UTILITIES. Tenant shall determine the
availability of and shall, at its sole cost and expense, cause to be installed
in, on or about the leased premises, all facilities necessary to supply thereto
all water, sewage, gas, electricity, telephone and other like services required
in Tenant's operations hereunder, and during the term hereof, Tenant agrees to
pay all charges and expenses in connection therewith and to protect Landlord and
said land therefrom.
6.2 LANDLORD'S CONSENT REQUIRED FOR UTILITY INSTALLATIONS. Tenant shall
not enter into any contract or agreement with any city, the County of Orange, or
any governmental agency or body or public utility with reference to sewer lines
or connections, water lines or connections, street improvements, including, but
not limited to, curbs, gutters, parkways and street lighting, or utility
connections, lines or easements without the prior written consent of Landlord.
ARTICLE VII
REPAIRS AND UPKEEP
------------------
7.1 LANDLORD NOT OBLIGATED. Landlord shall not be required or obligated
to make any changes, alterations, additions, improvements or repairs in, on or
about the leased premises, or any part thereof, during the term of this Lease.
7.2 TENANT TO MAINTAIN. At all times during said term, Tenant shall, at
its cost and expense, keep and maintain the leased premises and all improvements
thereon and all facilities and appurtenant thereto in good order and repair and
safe condition, and the whole of said land, improvements thereto and landscaping
thereon in a clean, sanitary, orderly and attractive condition; and Tenant shall
make any and all additions to or alterations or repairs in and about said land
and the improvements thereon which may be required by and shall otherwise
observe and comply with all public laws, ordinances and regulations from time to
time applicable to the leased premises.
7.3 MAINTENANCE OF UNDERPASS. The parties acknowledge that the County
of Orange has assumed responsibility for the maintenance and repair of the
pumping facilities for and structural integrity of the underpass under Xxxxxxx
Road constructed by the County as part of the Foothill Circulation Phasing Plan
road improvements described in Addendum No. 17 to Ground Lease dated March 30,
1992 (amending the 1968 Lease) until such time that the Lease, as it may be
extended, amended or modified from time to time, is terminated or expires. In
the event that the County fails or refuses to assume such maintenance and repair
responsibilities, then, as between Landlord and Tenant, Tenant shall (a) perform
any repairs, maintenance and other work as may be required by any applicable
governmental agency, and (b) keep such facilities in a safe condition; provided,
however, that the foregoing shall not be deemed or construed to be a waiver by
Landlord or Tenant of any claims, demands or damages that Landlord or Tenant may
assert against the County on account of the County's failure or refusal to
assume or perform such maintenance and repair obligations.
-4-
ARTICLE VIII
LANDLORD'S NONLIABILITY
-----------------------
8.1 WAIVER AND INDEMNITY. Landlord and Landlord's divisions,
subsidiaries, partners and affiliated companies (including but not limited to
Xxxxxx Xxxxxxxx Growers), and its and their respective employees, officers,
directors and shareholders, and its and their respective successors and assigns
(collectively, the "INDEMNITEES") shall not be liable for any loss, damage or
injury of any kind or character to any person or property arising from any use
of the leased premises, or any part thereof under the Original Lease or this
Lease, or caused by any defect in any building, structure or other improvement
thereon or in any equipment or other facility therein, or caused by or arising
from any act or omission of Xxxxx or any of Xxxxx' Representatives, or by or
from any accident on said land or any fire or other casualty thereon, or
occasioned by the failure Xxxxx or any of Xxxxx' Representatives to maintain the
leased premises and all improvements thereon and facilities and appurtenances
thereto in safe condition, or arising from any other cause whatsoever
(collectively, the "DAMAGES"); and Tenant, as a material part of the
consideration of this Lease, hereby waives on its behalf all claims and demands
against Landlord and the other Indemnitees for any such loss Damages of Tenant,
and hereby agrees to indemnify, defend and hold Landlord and the other
Indemnitees entirely free and harmless from and against any loss, liability,
damage, cost or expense (including attorneys' fees) or claim arising from any
such Damages, whether incurred by Tenant, Landlord, the other Indemnitees or any
other person. With respect to design, construction methods, materials, locations
and other matters for which Landlord has given or will give its approval,
recommendation or other direction, the foregoing waiver, indemnity and agreement
to defend and hold harmless shall apply irrespective of Landlord's approval,
recommendation or other direction. Notwithstanding anything to the contrary
above, nothing contained in this Section shall operate to relieve any Indemnitee
from any Damages ultimately established by a court of competent jurisdiction to
have been caused solely by the active negligence or willful misconduct of such
Indemnitee. It shall not be considered negligence or willful misconduct by any
Indemnitee to have failed to install or provide flood control or similar type
improvements to protect the leased premises (Tenant agrees that the foregoing is
solely Tenant's responsibility). Tenant's covenants in this Section arising from
or related to acts or occurrences during the term of this Lease or the Original
Lease shall be binding on Tenant until the last to occur of such date as action
against the Indemnitees is absolutely barred by an applicable statute of
limitations or such date as all claims and actions for which indemnification may
-5-
be claimed are fully and finally resolved and, if applicable, all compromises
thereof and judgments and awards thereon are paid in full and the Indemnitees,
and each of them, are reimbursed for all amounts paid by them in the compromises
thereof and upon the judgments and awards thereon and in defense of such actions
and claims, including actual attorneys' fees. If any action or proceeding shall
be brought against an Indemnitee alleging any facts or circumstances for which
Tenant is to provide indemnification and/or defense, Tenant, upon notice from
the Indemnitee, shall defend the same at Tenant's expense by counsel approved in
writing by such Indemnitee. Payment shall not be a condition precedent to
recovery under any indemnification in this Lease, and a finding of liability or
an obligation to indemnify shall not be a condition precedent to the duty to
defend.
TENANT ACKNOWLEDGES THAT IT HAS BEEN ADVISED BY ITS LEGAL COUNSEL AND
IS FAMILIAR WITH THE PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 1542, WHICH
PROVIDES AS FOLLOWS:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE
TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE
MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR."
TENANT BEING AWARE OF SAID CODE SECTION, HEREBY EXPRESSLY WAIVES ANY
RIGHT IT MAY HAVE THEREUNDER, AS WELL AS UNDER ANY OTHER STATUTE OR COMMON LAW
PRINCIPLE OF SIMILAR EFFECT.
ARTICLE IX
INSURANCE
---------
9.1 LIABILITY INSURANCE. Tenant shall, at all times during the term of
this Lease, maintain Comprehensive or Commercial General Liability Insurance on
an "occurrence" basis, with reasonably acceptable deductibles, with a combined
single limit for bodily injury and property damage of (a) *** , or (b) such
increased amount as may be reasonably required from time to time by Landlord
based upon a general increase in liability/insurance awards arising from
situations similar or comparable to reasonably anticipated situations arising
from Tenant's operations (but such increased amount under this subpart (b) shall
not exceed the limit from time to time carried by Tenant), covering all
liabilities arising out of the use of the leased premises by persons other than
Landlord, including but not limited to contractual liability.
9.2 WAIVER OF SUBROGATION. Tenant hereby waives all rights against
Landlord and the other Indemnitees for any risk to the extent covered by
Tenant's policies of insurance or required to be covered by Tenant's policies of
insurance as set forth above.
------------------------
*** Information omitted and filed separately with the Commission for
confidential treatment.
-6-
9.3 ADDITIONAL INSURED. Landlord shall be included as additional
insureds under the coverage specified in Section 9.1 above with the following
provisions included within each applicable policy: "It is understood and agreed
that coverage afforded by this Policy shall also apply to The Irvine Company, a
Michigan corporation, and its divisions, subsidiaries, partners, shareholders
and affiliated companies, and its and their respective officers, directors,
shareholders, agents, representatives, employees and professional consultants
and its and all of their respective successors and assigns, as additional
insureds, but only with respect to (i) legal liability or claims caused by,
arising out of or resulting from the acts or omissions of the named insured or
others performing acts on behalf of the named insureds in connection with or
related to the development, operation or use of the Leased Premises or (ii)
legal liability or claims for which the named insured is liable without fault in
connection with or related to the development, operation or use of such
facility, including but not limited to any such acts, omissions, legal liability
or claims relating to, work performed by or on behalf of the named insured on
land of the additional insureds. This insurance is primary and any other
insurance by such additional insureds is non-contributing with this insurance as
respects claims or liability arising out of or resulting from the acts or
omissions of the named insured, or of others performed on behalf of the named
insured, or for which the named insured is liable without fault."
9.4 INSURANCE POLICIES. The insurance policy required under this
Article IX shall:
(a) Be issued by insurance carriers licensed and approved to
do business in California, having a general policyholders rating of not less
than an *** and financial rating of not less than *** in the most current Best's
Insurance Report (provided, however, that so long as such carrier is an
"admitted carrier" in the State of California ["admitted" by the California
Department of Insurance], then a Best's rating of *** shall comply with the
requirements of this Section);
(b) Contain a provision that the policy shall not be subject
to material alteration to the detriment of Landlord or the other additional
insureds or cancellation without at least thirty (30) days prior written notice
be given to Landlord by registered mail;
(c) Provide that such policy or policies and the coverage
evidenced thereby are primary and Landlord's insurance is noncontributing with
such primary coverage; and
(d) Contain severability of interest and cross liability
clauses.
Tenant may provide the insurance described in this Article IX in whole
or in part through a policy or policies covering other liabilities and projects
of Tenant; provided, however, that any such policy or policies shall (i)
allocate to this Lease the full amount of insurance required hereunder and (ii)
contain, permit or otherwise unconditionally authorize the waiver contained in
Section 9.2 above, and provided further that any such policy or policies shall
not otherwise impair the rights of Landlord or negate the requirements of this
Lease.
------------------------
*** Information omitted and filed separately with the Commission for
confidential treatment.
-7-
9.5 EVIDENCE OF INSURANCE. Tenant shall at all times and from time to
time provide to Landlord evidence of such insurance coverage. As evidence of
specified insurance coverage, Tenant shall deliver certified copies of relevant
policies or certificates issued by Tenant's insurance carrier acceptable to
Landlord showing such policies in force for the specified period. Landlord has
the right to review certified policies as reasonably necessary.
9.6 SELF-INSURANCE. Tenant may elect to self-insure the insurance
required to be carried by Tenant pursuant to this Lease as reasonably approved
by Landlord in writing, PROVIDED Tenant complies with both the following:
(i) Maintains a net worth in excess of ***
(ii) Provides the same amounts, coverages, protection and
payments by way of self-insurance as would be provided if Tenant were to obtain
the insurance policies required in this Section 9; and
(iii) Provides to Landlord reasonable evidence of such self
insurance plan adopted by Tenant's Board of Directors.
If Tenant elects to so self-insure, upon the occurrence of a casualty or of any
damage or destruction or claim for which insurance proceeds would have been
available pursuant to the insurance policies required to be maintained under
this ARTICLE IX but for such election to self-insure, Tenant shall provide funds
to replace the insurance proceeds which would have been available but for its
election to so self-insure. Self-insurance funds committed for the purposes
described in this Lease shall be subject to all provisions contained in this
Lease with respect to the use, application, distribution or other disposition of
insurance proceeds.
9.7 INSURANCE DOES NOT LIMIT LIABILITY. Nothing in this Article IX
shall limit or reduce Tenant's obligations or liabilities under the other
provisions of this Lease, including but not limited to Article VIII above.
9.8 PROPERTY INSURANCE PROCEEDS. Tenant shall be entitled to retain,
after payments of amounts due any authorized encumbrancer, the proceeds from any
fire or casualty insurance insuring Tenant's Property or any personal property
of Tenant except to the extent required to perform clean-up or restoration to be
performed by Tenant under this Lease relating to the damaged improvements or
property.
------------------------
*** Information omitted and filed separately with the Commission for
confidential treatment.
-8-
ARTICLE X
RESTORATION
-----------
10.1 TENANT TO RESTORE. If during the term hereof any building or
improvement on the leased premises, or any part thereof, shall be damaged or
destroyed by fire or other casualty, Tenant shall, at its cost and expense,
either (a) repair or restore the same according to the original plans thereof or
to such modified plans as shall be previously approved in writing by Landlord,
or (b) demolish and remove the remaining portions of the building or improvement
which was damaged (including all foundations and utility facilities relating
thereto) and restore the land to the condition required under ARTICLE XVI below.
Any such work of repair or restoration under subpart (a) shall be commenced
within one hundred twenty (120) days after the damage or loss occurs and shall
be completed with due diligence but not longer than one (1) year after such work
is commenced, and such work shall be otherwise done in accordance with all
requirements of ARTICLE II of these General Conditions, and all insurance
proceeds collected for such damage or destruction shall be applied to the cost
of such repairs or restoration, and if such insurance proceeds shall be
insufficient for said purpose, Tenant shall make up the deficiency out of its
own funds. Should Tenant fail or refuse to make the repairs, restoration,
demolition or removal as hereinabove provided, or if the authorized encumbrancer
of Tenant, if any, after thirty (30) days' written notice by Landlord, shall
fail or refuse to undertake and complete such work on behalf of Tenant, then in
either of said events such failure or refusal shall constitute a default under
the covenants and conditions hereof and all insurance proceeds so collected
shall be forthwith paid over to and retained by Landlord on its own account and
Landlord may, but shall not be required to, use and apply the same for and to
the repair or restoration of said land, and Landlord may, at its option,
terminate this Lease as elsewhere provided herein.
10.2 DAMAGE IN LAST FIVE YEARS. Notwithstanding anything to the
contrary contained in the preceding paragraph, if during the last five (5) years
of the term hereof any building erected on said land shall be damaged by fire or
other casualty and if (a) the loss of such building shall have a material
adverse impact upon Tenant's operations on the leased premises, and (b) the cost
of repairing or restoring the same shall exceed the insurance proceeds payable
for such damage by more than $100,000, then Tenant shall have the option, to be
exercised within thirty (30) days after such event, (1) to repair or restore
said building as hereinabove provided, or (2) subject to the prior written
consent of the authorized encumbrancer, if any, to terminate this Lease by
written notice thereof to Landlord, which option to terminate shall be
conditioned as follows: (i) Tenant shall, at its expense, within ninety (90)
days after the damage occurs, tear down and remove all parts of said building
and other improvements then remaining and the debris resulting from such fire or
other casualty and otherwise clean up and restore the leased premises to the
condition required under ARTICLE XVI below, and (ii) within ten (10) days after
the completion of said clean-up and restoration Tenant shall surrender to
Landlord possession of said land, cleaned up and restored as aforesaid, and
shall pay to Landlord any rent accruing to the date of such surrender and
Tenant's prorata share of all unpaid taxes and assessments that then shall have
become a lien upon said premises, and (iii) thereupon, but not before, said
Lease shall terminate. The insurance proceeds collected and paid for such
damage, to the extent available for said purposes, shall be applied first to pay
the then balance due an authorized encumbrancer, if any, second to the cost of
such clean-up and restoration, and the unexpended balance thereof, if any, shall
be paid to Tenant (see also Section 9.8 above).
-9-
ARTICLE XI
LIENS AND CLAIMS
----------------
11.1 MECHANICS LIENS. Tenant shall not suffer or permit to be enforced
against the leased premises, or any part thereof, any mechanics', materialmen's,
contractors' or subcontractors' liens arising from or any claim for damage
growing out of the work of any construction, repair, restoration, replacement or
improvement, or any other claim or demand howsoever the same may arise, but
Tenant shall pay or cause to be paid all of said liens, claims or demands before
any action is brought to enforce the same against said land; and Tenant agrees
to indemnify and hold Landlord and said land free and harmless from all
liability for any and all such liens, claims and demands, together with
reasonable attorneys' fees and all costs and expenses in connection therewith.
Notwithstanding anything to the contrary hereinabove contained in this ARTICLE
XI, if Tenant shall in good faith contest the validity of any such lien, claim
or demand, then Tenant shall, at its expense, defend itself and Landlord against
the same and shall pay and satisfy any adverse judgment that may be rendered
thereon before the enforcement thereof against Landlord or the leased premises,
upon the condition that if Landlord shall require, Landlord shall furnish to
Landlord a surety bond satisfactory to Landlord in an amount equal to such
contested lien, claim or demand indemnifying Landlord against liability for the
same, and holding the leased premises free from the effect of such lien or claim
or if Landlord shall request, Tenant shall procure and record the bond provided
for in Section 1193-2 of the California Code of Civil Procedure, or any
comparable statute hereafter enacted providing for a bond freeing the leased
premises from the effect of such lien or claim or action thereon.
11.2 TENANT'S OBLIGATION TO BOND. Before the commencement of any work
or construction of any building, structure or other improvement on the leased
premises, or of any substantial repairs, alterations, additions, replacement or
restoration in and about said premises as herein provided, Tenant shall give to
Landlord written notice thereof, specifying the nature and location of the
intended work and the expected date of commencement thereof. At the request of
Landlord, Tenant shall, prior to the commencement of any such work, deposit with
Landlord a certificate or other evidence satisfactory to Landlord that Tenant
has furnished a bond in favor of Landlord, with a surety approved by Landlord,
guaranteeing the completion of said work free and clear of all subcontractors',
mechanics' and materialmen's liens. Landlord reserves the right at any time and
from time to time to post and maintain on said land such notices as may be
necessary to protect Landlord against liability for all such liens and claims.
-10-
ARTICLE XII
LANDLORD PAYING CLAIMS
----------------------
12.1 LANDLORD'S RIGHT TO PAY. In the event Tenant shall fail to pay and
discharge or cause to be paid or discharged, when due and payable, any tax,
assessment or other charge upon or in connection with the leased premises, or
any lien or claim for labor or material employed or used in or any claim for
damages arising out of the construction, repair, restoration, replacement,
maintenance and use of said land and the improvements thereon, or any judgment
on any contested lien or claim, or any insurance premium or expense in
connection with said land and improvements, or any other claim, charge or demand
which Tenant has agreed to pay or cause to be paid under the covenants and
conditions of this Lease, and if Tenant, after thirty (30) days' written notice
from Landlord so to do, shall fail to pay and discharge the same, then Landlord
may, at its option, pay any such tax, assessment, insurance expense, lien,
claim, charge or demand, or settle or discharge any action therefor, or judgment
thereon, and all costs, expenses and other sums incurred or paid by Landlord in
connection with any of the foregoing, shall be paid by Landlord upon demand,
together with interest thereon at the rate of *** per annum from the date
incurred or paid, and any default in such repayment shall constitute a breach of
the covenants and conditions of this Lease.
ARTICLE XIII
ASSIGNMENTS AND SUBLETTING
--------------------------
13.1 CONSENT REQUIRED. Except for a permitted transfer as described in
Section 13.4 below, Tenant shall not encumber, assign or otherwise transfer this
Lease, or any right or interest hereunder, or in or to any of the improvements
that hereafter may be constructed or installed on the leased premises, and
Tenant shall not sublet said premises in whole or in part, without the prior
written consent and approval of Landlord. No such encumbrance, assignment or
other transfer, whether voluntary or involuntary, by operation of law, under
legal process, through receivership or bankruptcy, or otherwise, and no such
subletting, shall be valid or effective without such prior written consent and
approval. If Tenant or any permitted successor tenant is a corporation whose
stock is NOT traded on a state or national stock exchange, or is an
unincorporated association, partnership or limited liability company, and their
occurs a transfer, assignment or hypothecation, whether in one transaction or a
series of transactions, of any stock or interest in such corporation,
association, partnership or limited liability company in the aggregate of in
excess of ***, then except as provided in Section 13.4 below, such transfer
shall be deemed as assignment within the meaning and provisions of this Article.
Transfers of stock or interests among shareholders and/or partners existing as
of the date of execution of this Lease or as of the date of any transfer
------------------------
*** Information omitted and filed separately with the Commission for
confidential treatment.
-11-
approved by Landlord shall not be included for purposes of determining whether
there has been a transfer of stock or interest in a corporation, association,
partnership or limited liability company in excess of ***. Should Tenant attempt
to make or suffer to be made any such encumbrance, assignment, transfer or
subletting, except as aforesaid, or should any right or interest of Tenant under
this Lease be attached, levied upon or seized under legal process and the same
shall not be released within ten (10) days therefrom, or should a receiver be
appointed to take possession of the leased premises or the operations of Tenant
thereon, or should Tenant be adjudged bankrupt or insolvent and Tenant shall not
have been discharged therefrom within thirty (30) days, then any of the
foregoing events shall be deemed a breach of the conditions and restrictions of
this Lease forthwith by written notice, and upon such termination this Lease
shall cease and end and thenceforth by of no further force or effect, except as
hereinafter otherwise provided. Should Landlord consent to any such encumbrance,
assignment, transfer or subletting, none of the restrictions of this paragraph
shall be thereby waived, but the same shall apply to each successive
encumbrance, assignment, transfer or subletting hereunder, if any, and shall be
severally binding upon each and every encumbrancer, assignee, transferee,
subtenant and other successor in interest of Tenant. No encumbrance, assignment,
transfer (including any permitted transfer under Section 13.4), or subletting
shall release Tenant from its obligations under this Lease.
13.2 INCREASE IN MINIMUM ANNUAL RENTAL. Except as provided in Section
13.4 below, in the event of any assignment of the Lease or any subletting of a
material portion of the leased premises, the Minimum Annual Rental shall as of
the date of such assignment be increased to the greater of (a) *** of the
average total rental (Minimum Annual Rental and Percentage Rental) for the first
12 months of the 24 month period preceding the date of such assignment or
subletting, or (b) the Minimum Annual Rental as of the commencement of the term
of this Lease increased by the percentage increase in the "CPI" (as defined in
Section 13.3 below) from the date hereof to the date of such assignment or
subletting. If such increase in Minimum Annual Rental represents an increase of
more than *** of the Minimum Annual Rental existing immediately prior to such
escalation, then Tenant shall have the right to elect, by written notice to
Landlord within thirty (30) days after notice of such rent increase, to
terminate this Lease within *** of such notice of rent escalation (and in the
event of such election to terminate, Tenant shall prior to such termination,
remove all of Tenant's Property from the leased premises (but excluding the
School Property)). In the event Tenant gives a termination notice under this
Section 13.2, then Landlord may, within thirty (30) days after receipt of such
notice elect to prevent such termination by agreeing in writing to limit the
increase of Minimum Annual Rental to *** of the previously existing Minimum
Annual Rental, and failure to so elect shall be deemed Landlord's election to
accept Tenant's termination.
13.3 TRANSFER FEE. If the Landlord consents to an assignment or
transfer by Tenant of all or a portion of Tenant's interest under this Lease,
Tenant shall pay, or cause to be paid, a transfer fee of *** (increased by the
percentage increase in the Consumer Price Index, All Items, All Urban Consumers,
Los Angeles-Anaheim-Riverside (1982-84 = 100) (the "CPI") from the date hereof
to the date of such consent); provided, however, that such transfer fee shall
not be payable upon Landlord's consent to a transfer or assignment of Tenant's
interest hereunder as security for a loan.
------------------------
*** Information omitted and filed separately with the Commission for
confidential treatment.
-12-
13.4 PERMITTED TRANSFERS. The following assignments or transfers by
Tenant shall not require the prior approval of Landlord under Section 13.1 and
shall not precipitate an increase in Minimum Annual Rental under Section 13.2:
(a) An assignment of Tenant's interest under this Lease as
part of an assignment of substantially all of Tenant's assets to a single
transferee in a merger or similar corporate reorganization (including an asset
transfer constituting a part of any such corporate reorganization);
(b) If Tenant is a corporation, any transfer of stock of
Tenant pursuant to a registered public offering and subsequent transfers of such
shares;
(c) If Tenant is a corporation whose stock is traded on a
state or national exchange, any transfer of such stock; or
(d) So long as (i) Tenant is Xxxxx Horticulture, Inc., a
California corporation, or a successor by merger or similar corporate
reorganization (including, without limitation, a successor pursuant to a
transaction of a nature described in Section 13.4(a) above), and (ii) the value
of Tenant's interest under this Lease and the personal and other property
located at the leased premises do not constitute more than 50% of the value of
all of Tenant's assets at the time of such transfer (and the transfer is not
part of a transaction which when consummated will result in a violation of the
foregoing limitation), any transfer of stock of such corporation.
ARTICLE XIV
ENCUMBRANCES
------------
14.1 LANDLORD'S CONSENT REQUIRED. Notwithstanding the provisions of
ARTICLE XIII above, if requested by Tenant, Landlord agrees to execute its
written consent to an assignment of this Lease to a trustee under a deed of
trust (herein called "trust deed") for the benefit of a lender (herein called
"encumbrancer"), upon and subject to the following covenants and conditions:
(a) Said trust deed and all rights acquired thereunder shall
be subject to each and all of the covenants, conditions and restrictions set
forth in this Lease and to all rights and interests of the Landlord hereunder,
except as herein otherwise provided;
(b) In the event of any conflict between the provisions of
this Lease and the provisions of any such trust deed, the provisions of this
Lease shall control;
(c) The prior written consent of Landlord shall not be
required:
-13-
(1) To a transfer of this Lease at a foreclosure sale
under the trust deed, judicial foreclosure, or an assignment in lieu of
foreclosure; or
(2) To any subsequent transfer by the encumbrancer
(i) if the encumbrancer is B.T. Commercial Corporation, any of its successors or
assigns, or an established bank, savings and loan association or insurance
company, and (ii) is the purchaser at such foreclosure sale;
provided that in either such event that encumbrancer forthwith gives notice to
the Landlord in writing of any such transfer setting forth the name and address
of the transferee, the effective date of such transfer and the express agreement
of the transferee assuming and agreeing to perform all of the obligations under
this Lease, together with a copy of the document by which such transfer was
made; and the payment to Landlord of a transfer fee of *** (increased by the
percentage increase in the CPI from the date hereof to the date of such consent)
in lieu of the transfer fee as provided under ARTICLE XIII above.
Any transferee under the provisions of subparagraph (c)(1) above shall
be liable to perform the obligations of the Tenant under this Lease only so long
as such transferee holds title to the leasehold. Any subsequent transfer of the
leasehold hereunder shall not be made without the prior written consent of the
Landlord and shall be subject to the conditions relating thereto as set forth in
ARTICLE XIII above.
(d) Upon and immediately after the recording of the trust
deed, Tenant, at Tenant's expense, shall cause to be recorded in the office of
the Recorder of Orange County, California, a written request executed and
acknowledged by Landlord for a copy of any notice of default and of any notice
of sale under the trust deed as provided by the statutes of the State of
California relating thereto. Concurrently with the execution of said consent,
Tenant shall furnish to Landlord a complete copy of the trust deed and note
secured thereby, together with the name and address of the holder thereof. No
such encumbrance shall be valid or effective unless and until Landlord shall
execute its written consent thereto as hereinabove in this ARTICLE XIV provided.
Landlord agrees that it will not terminate this Lease because of any
default or breach hereunder on the part of Tenant if the encumbrancer under such
deed of trust, within sixty (60) days after service of written notice on the
encumbrancer by Landlord of its intention to terminate this Lease for such
default or breach, shall:
(1) Cure such default or breach if the same can be
cured by the payment or expenditure of money provided to be paid under the terms
of this Lease, or if such default or breach is not so curable, cause the trustee
under the trust deed to commence and thereafter to diligently pursue to
completion steps and proceedings for the exercise of the power of sale under and
pursuant to the trust deed in the manner provided by law; and
------------------------
*** Information omitted and filed separately with the Commission for
confidential treatment.
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(2) Keep and perform all of the covenants and
conditions of this Lease requiring the payment or expenditure of money by Tenant
until such time as said leasehold shall be sold upon foreclosure pursuant to the
trust deed or shall be released or reconveyed thereunder;
provided, however, that if the holder of the trust deed shall fail or refuse to
comply with any and all of the conditions of this paragraph, then and thereupon
Landlord shall be released from the covenant of forbearance herein contained.
Any notice to the encumbrancer provided for in this paragraph may be
given concurrently with or after Landlord's notice of default to Tenant as
hereinafter provided in ARTICLE XV.
ARTICLE XV
DEFAULT AND REMEDIES
--------------------
15.1 DEFAULTS. The occurrence of any one or more of the following
events shall constitute a default hereunder by Tenant:
(a) Failure by Tenant to make any payment of rent or other
payment or charge required to be made by Tenant hereunder, as and when due, ***;
(b) Failure by Tenant to perform any other express or implied
covenants or provisions herein contained (other than any breach under the
Article entitled "Assignments and Subletting" for which immediate notice of
termination may be given) where such failure continues for *** after written
notice thereof from Landlord to Tenant specifying the particulars of such
default; provided, further, that if the nature of Tenant's default is such that
more than *** are reasonably required for its cure, then Tenant shall not be
deemed to be in default if Tenant shall commence such cure within said ***
period and thereafter diligently prosecute such cure to completion; provided,
however, that any such notice, as well as any other notice of any default
whether for failure to pay rent or otherwise, shall be in lieu of, and not in
addition to, any notice required under California Code of Civil Procedure Sec.
1161, as amended; or
(c) Tenant's (i) application for, consent to, or suffering of
the appointment of a receiver, trustee or liquidator for all or for a
substantial portion of its assets, (ii) making a general assignment for the
benefit of creditors, (iii) admitting in writing its inability to pay its debts
or its willingness to be adjudged a bankrupt or the subject of relief or
protection under the Bankruptcy Act (Title II of the United States Code; 11
U.S.C. 101 et seq., as amended from time to time) or any similar law, whether
federal, state or otherwise for the relief or protection of debtors
(collectively, the "Bankruptcy Laws"), (iv) becoming unable to or failing to pay
its debts as they mature, (v) being adjudged a bankrupt or the subject of relief
or protection under the Bankruptcy Laws, (vi) filing a voluntary petition or
suffering an involuntary petition under the Bankruptcy Laws or any other
bankruptcy, arrangement, reorganization or insolvency law (unless in the case of
an involuntary petition, the same is dismissed within thirty (30) days of such
filing), (vii) convening a meeting of its creditors or any class thereof for
purposes of effecting a moratorium, extension or composition of its debts, or
(viii) suffering or permitting to continue unstayed and in effect for ten (10)
consecutive days any attachment, levy, execution or seizure of all or a
substantial portion of Tenant's assets or of Tenant's interest in this Ground
Lease.
------------------------
*** Information omitted and filed separately with the Commission for
confidential treatment.
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15.2 REMEDIES. Upon the occurrence of any of such events of default,
and in addition to any or all other rights or remedies granted Landlord
hereunder or by law, Landlord may exercise the following remedies at its sole
option:
(a) TERMINATION. Landlord may terminate this Lease and the
rights of Tenant hereunder by written notice to Tenant or any other lawful
means, in which event this Lease and all rights of Tenant shall terminate and
Tenant shall immediately surrender possession of the Premises to Landlord. In
such event Landlord shall be entitled to recover from Tenant:
(i) The worth at the time of award of the unpaid rent
which had been earned at the time of termination;
(ii) 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 loss that Tenant proves could have been
reasonably avoided;
(iii) 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 loss that Tenant proves could be reasonably avoided;
and
(iv) Any other amount necessary to compensate
Landlord for all the detriment proximately caused by Tenant's failure to perform
its obligations under this Ground Lease or which in the ordinary course of
things would be likely to result therefrom, including, but not limited to, the
cost of recovering possession of the Premises, expenses of reletting, including
necessary repair, renovation and alteration of the Premises, reasonable
attorney's fees, and any other reasonable costs.
The "worth at the time of award" of the amounts referred to in
subparagraphs (i) and (ii) above shall be computed by allowing interest at ***
per annum from the dates such amounts accrued to Landlord. The worth at the time
of award of the amount referred to in subparagraph (iii) above shall be computed
by discounting such amount at *** above the discount rate of the Federal Reserve
Bank of San Francisco at the time of award. For purposes of determining the
unpaid rent after termination, the rent shall be equal to the Minimum Annual
Rental which would be due and payable under Section 5 of the Lease plus the
average Percentage Rental which was payable for the first 24 months of the 36
month period preceding the termination, (and in the event of such termination
such total amount of Minimum Annual Rental plus Percentage Rental shall be
considered fixed rental for the period after the termination).
------------------------
*** Information omitted and filed separately with the Commission for
confidential treatment.
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(b) RELETTING. Without terminating or effecting a forfeiture
of this Lease or otherwise relieving Tenant of any obligation hereunder in the
absence of express written notice of Landlord's election to do so, Landlord may,
but need not, re-enter the leased premises, remove all persons therefrom and
relet the leased premises or any portion thereof at any time or from time to
time and for such terms and upon such conditions and rental as Landlord in its
sole discretion may deem proper. The rent or other proceeds received by Landlord
from such reletting shall be applied: first, to the payment of any indebtedness
other than Minimum Annual Rental due hereunder from Tenant to Landlord; second,
to the payment of any cost of such reletting; third, to the payment of the cost
of any repairs to the leased premises; fourth, to the payment of Minimum Annual
Rental due and unpaid hereunder; and the residue, if any, shall be held by
Landlord and applied in payment of future amounts as the same may become due and
payable hereunder. Should the rent for such reletting, during any month for
which the payment of rent is required hereunder, be less than the rent payable
during that month by Tenant hereunder, then Tenant shall pay such deficiency to
Landlord immediately upon demand therefore by Landlord. Such deficiency shall be
calculated and paid monthly. Tenant shall also pay to Landlord, as soon as
ascertained, any costs and expenses incurred by Landlord in such reletting,
including the costs of repairs to the leased premises, not covered by the
rentals received from such reletting. Such payments by Tenant shall be due at
the times provided in this Lease, and Landlord need not wait until the
termination of this Lease to recover them by legal action or in any other
manner. If Landlord relets the leased premises or any portion thereof, such
reletting shall not relieve Tenant of any obligation hereunder, except that
Landlord shall apply the rent or other proceeds actually collected by it for
such reletting against amounts due from Tenant hereunder to the extent such
proceeds compensate Landlord for nonperformance of any obligation of Tenant
hereunder. Landlord may execute any lease made pursuant hereto in its own name,
and the Tenant thereunder shall be under no obligation to see to the application
by Landlord of any proceeds to Tenant, nor shall Tenant have any right to
collect any such proceeds. Landlord shall not by any re-entry or other act be
deemed to have accepted any surrender by Tenant of the leased premises or
Tenant's interest therein, or be deemed to have terminated this Lease, or to
have relieved Tenant of any obligation hereunder, unless Landlord shall have
given Tenant express written notice of Landlord's election to do so as set forth
herein. Notwithstanding any reletting by Landlord because of any default by
Tenant, without termination of this Lease, Landlord may at any time after such
reletting elect to terminate this Lease for any such default.
15.3 NO OBLIGATION OR LIABILITY OF LANDLORD. If Landlord shall elect to
re-enter the leased premises, Landlord shall not be liable for any damages by
reason of such re-entry except with respect to any active negligence or willful
misconduct of Landlord.
15.4 LIABILITY FOR FAILURE TO VACATE. In the event Tenant fails to
vacate the leased premises in the manner and at the time required under this
Lease, including but not limited to a vacation upon any termination under this
Article XV or any deletion of a portion of the leased premises under Section 8
of the Lease to which these General Conditions are attached, Tenant shall
indemnify and hold Landlord harmless from all losses, damages, costs and claims
incurred by Landlord and arising from or related to such failure to vacate by
Tenant.
-17-
15.5 CUMULATIVE RIGHTS. The rights and remedies reserved to Landlord
hereunder, including those not specifically described, shall be cumulative, and
except as otherwise may be provided by California statutory law in effect at the
time, Landlord may pursue any or all of such rights and remedies, at the same
time or separately.
15.6 NO WAIVER. No delay or omission of Landlord to exercise any right
or remedy shall be construed as a waiver of any such right or remedy or of any
default by Tenant hereunder. The acceptance by Landlord of rent or any other
payments hereunder shall not be a waiver of any preceding breach or default by
Tenant of any provision hereof, other than the failure of Tenant to pay the
particular rent or any other payments accepted, regardless of Landlord's
knowledge of such preceding breach or default at the time of acceptance of such
rent or any other payments, or a waiver of Landlord's right to exercise any
remedy available to Landlord by virtue of such breach or default.
15.7 EXPENSES AND LEGAL FEES. If either party incurs any cost or
expense, including reasonable attorneys' fees, in connection with any action or
proceeding instituted by either party by reason of any default or alleged
default of the other party hereunder, the party prevailing in such action or
proceeding shall be entitled to recover such costs and expenses from the other
party. For purposes of this provision, in any unlawful detainer or other action
or proceeding instituted by Landlord based upon any default or alleged default
by Tenant hereunder, Landlord shall be deemed the prevailing party if in any
action or proceeding arising in connection with any default or alleged default
by Tenant hereunder: (a) judgment is entered in favor of Landlord; or (b) prior
to trial or judgment Tenant shall pay all or any portion of the rent and charges
claimed by Landlord, eliminate the condition, cease the act, or otherwise cure
the omission claimed by Landlord to constitute a default by Tenant hereunder.
15.8 LATE CHARGE. Tenant acknowledges that the late payment by Tenant
to Landlord of rent or any other payment or charge will cause Landlord to incur
costs which are extremely difficult and impracticable to determine. Such costs
may include without limitation administrative staff time and attention,
processing and accounting charges and late charges that may be imposed on
Landlord by the terms of any loan made to Landlord. Therefore, if any sum
payable by Tenant under this Lease is not paid within *** of the date when due,
Tenant shall pay to Landlord a sum of *** of the overdue payment as a late
charge. Landlord and Tenant agree that this late charge represents a fair and
reasonable estimate of the costs that Landlord will incur by reason of late
payment by Tenant. Acceptance of any late charge shall not constitute a waiver
of Tenant's default with respect to the overdue amount, or prevent Landlord from
exercising any of the other rights and remedies available to Landlord. Such late
charge shall be due and payable as provided herein in addition to, and not in
lieu of, any interest due under Section 25.2 below.
------------------------
*** Information omitted and filed separately with the Commission for
confidential treatment.
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ARTICLE XVI
REMOVAL
-------
16.1 SURRENDER OF LEASED PREMISES. Subject to Sections 16.2 and 16.3
below, upon expiration of the term of this Lease or any earlier termination
thereof, Tenant shall surrender to Landlord possession of the leased premises
and all improvements constructed and installed thereon; and any of said personal
property that is not removed from the leased premises as permitted or required
below within thirty (30) days after the date of any termination of this Lease
thereafter shall belong to Landlord without the payment of any consideration
therefor.
16.2 RIGHT TO REMOVE. Tenant shall have the right, but not the
obligation, to remove any and all of Tenant's Property on or about the leased
premises prior to the expiration or sooner termination of all or any portion of
this Lease, subject to the following conditions:
(a) Tenant shall provide Landlord with a list, in writing, of
those portions of Tenant's Property to be removed by Tenant and those portions
of Tenant's Property to be abandoned not later than six (6) months prior to the
termination of the Lease or deletion of property from the leased premises;
(b) Except as provided in Section 16.3(c) below, irrigation
lines shall be either all removed or all abandoned as to the portion of the
leased premises being deleted from the Lease and as to the entire remaining
leased premises upon the termination or expiration of the Lease. ***
(c) Tenant shall have the right to remove gravel from the
portion of the leased premises being deleted from the Lease or from the entire
leased premises upon the termination or expiration of the Lease; provided that,
if Tenant elects to remove any gravel, substantially all of the gravel shall be
removed at Tenant's sole cost and expense. For purposes of this Section, the
term "substantially all" shall mean a sufficient quantity of gravel so that (i)
at least eighty percent (80%) of existing gravel is removed throughout the
property area for which the Lease is being terminated; and (ii) the gravel
remaining in any given area (not averaged over the entire property being
deleted) shall not constitute more than fifty percent (50%) by volume of the
dirt/gravel mixture in the top three (3) inches of material where gravel was
placed; and
(d) If Tenant desires to remove only a portion of any other
facility on the leased premises (such as a building) and said partial removal
would render the remaining part of the facility less usable in any material
respect, Tenant shall remove all or none of such facility. The provisions of
this Section shall not apply to Tenant's trade fixtures, movable furniture,
furnishings and equipment.
------------------------
*** Information omitted and filed separately with the Commission for
confidential treatment.
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16.3 OBLIGATION TO REMOVE. Notwithstanding the provisions of Section
16.2 above, Tenant shall be obligated to remove the following portions of
Tenant's Property from the leased premises upon the termination or earlier
expiration of the Lease or from any property being deleted from the leased
premises (but specifically excluding the School Property) upon the deletion of
said property from the leased premises:
(a) The fertilizer injection system, water recycling system
and filtration control system and any underground and above-ground tanks;
provided that (i) Tenant shall repair any damage caused by such removal to an
otherwise operable part of the irrigation system and (ii) nothing herein
contained shall obligate Tenant to remove the existing water reservoir;
(b) All stored fertilizers, pesticides and other chemicals
(including those stored in sacks or other containers), all residues contained in
buildings and all storage containers;
(c) All transite or asbestos cement pipes placed on the
property by Xxxxx or Xxxxx' Representatives. Tenant shall also loosely backfill
(but shall not be required to compact) any trenches in which such transite or
asbestos cement pipes were located. Notwithstanding the foregoing, except to the
extent placed thereon by Xxxxx or Xxxxx' Representatives, Tenant shall in no
event be obligated to remove any transite or asbestos cement pipes which were
present on the "SCHOOL REPLACEMENT PROPERTY" (as defined in Addendum No. 18 to
Ground Lease dated June ___, 1992, amending the 1968 Lease) or any additional
acreage provided to Tenant under Section 2.2 of the Lease to which these General
Conditions are attached at the time such property was made available to Tenant;
(d) Except regarding (i) gravel and non transite or asbestos
cement pipes or irrigation lines (governed by Section 16.2 above) and (ii)
"replacement improvements" (as hereinafter defined), all improvements, including
buildings, structures and additions to existing improvements, which are
constructed or placed by Tenant on the leased premises after the date of this
Lease. Unless Landlord and Tenant agree in writing as to the description of
existing improvements, Landlord shall obtain an aerial photograph of the leased
premises dated in 1996 as close to the date hereof as reasonably practical, and
the improvements shown on such photograph shall be deemed to exist on the leased
premises as of the date hereof. For purposes of this subparagraph 16.3(d), the
term "replacement improvements" shall mean all those buildings and other
improvements constructed or placed upon the leased premises after the date
hereof which are of a similar nature and cumulative size, to those buildings and
other improvements which are removed by Tenant from the leased premises after
the date hereof (provided Tenant cleans and removes all foundations, debris and
other appurtenances relating to such removed buildings). In other words, if
Tenant properly removes 10,000 square feet of shade houses after the date
hereof, Tenant may construct up to 10,000 square feet of new shade houses after
the date hereof and such shade houses would constitute "replacement
improvements." Improvements subject to subparagraphs (a), (b) and (c) of this
Section 16.3 shall not under any circumstances be considered "replacement
improvements."
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(e) In the event of a termination under Section 13.2, then
Tenant shall prior to such termination remove all of Tenant's Property. 16.4
QUITCLAIM. Upon the expiration of the term thereof, or any sooner termination of
this Lease, Tenant agrees to execute, acknowledge and deliver to Landlord a
proper instrument in writing, releasing and quitclaiming to Landlord all right,
title and interest of Tenant in and to the leased premises and all improvements
thereto.
ARTICLE XVII
PAYMENTS AND NOTICES
--------------------
17.1 METHOD OF GIVING NOTICE. All rents and other sums payable by
Tenant to Landlord hereunder shall be paid to Landlord at its business office at
000 Xxxxxxx Xxxxxx Xxxxx, Xxxxxxx Xxxxx, Xxxxxxxxxx 00000, or at such other
place as Landlord may hereafter designate in writing. Any notice to be given by
either of the parties hereto to the other hereunder may be delivered in person
to an officer of Landlord, or to Tenant, or may be deposited in the United
States mail in the State of California, duly registered or certified, with
postage prepaid, and addressed to the party for whom intended as follows: To
Landlord at its said business office, and to Tenant at the leased premises, or
at such other address as either of the parties hereto may hereafter designate in
writing. Service of any such written notice shall be deemed complete at the time
of such personal delivery or within two (2) days after the mailing thereof as
hereinabove provided. If more than one Tenant is named under this Lease, service
of any notice upon any one of said Tenant as herein provided shall be deemed as
service upon all of said Tenant.
ARTICLE XVIII
EMINENT DOMAIN
--------------
18.1 DEFINITION OF TERMS. The term "total taking" as used in this
Article means the taking of the entire leased premises under the power of
eminent domain or a taking of so much of said land as to prevent or
substantially impair the conduct of Tenant's business thereon. The term "partial
taking" means the taking of a portion only of said land which does not
constitute a total taking as above defined.
18.2 TOTAL TAKING. If during the term hereof there shall be a total
taking by public authority under the power of eminent domain, then the leasehold
estate of Tenant in and to the leased premises shall cease and terminate as of
the date the actual physical possession thereof shall be so taken.
18.3 PARTIAL TAKING. If during said term there shall be a partial
taking of the leased premises, this Lease shall terminate as to the portion of
said land taken upon the date upon which actual possession of said portion of
said land is taken pursuant to said eminent domain proceedings but said Lease
shall continue in force and effect as to the remainder of said land. The basic
rental payable by Tenant for the balance of said term shall be abated in the
ratio that the square footage ground area of the leased premises taken bears to
the total ground area of said land at the time of such taking.
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18.4 ALLOCATION OF AWARD. All compensation and damages awarded for the
taking of the leased premises or any portion thereof or interest therein,
including any award for severance damages to the remaining portion of the leased
premises, if any, shall, except as otherwise herein provided, belong to and be
the sole property of Landlord, and Tenant shall not have any claim or be
entitled to any award for diminution in value of its leasehold hereunder or for
the value of any unexpired term of this Lease; provided, however, that Tenant
shall be entitled to any award that may be made for the taking of or injury to
Tenant's improvements, or on account of any cost or loss Tenant may sustain in
the removal of Tenant's fixtures, equipment and furnishings, or as a result of
any alterations, modifications or repairs which may be reasonably required by
Tenant in order to place the remaining portion of the leased premises not so
condemned in a suitable condition for the continuance of Tenant's tenancy. The
award of severance damages to Landlord shall not diminish any awards to which
Tenant may be entitled under the preceding sentence. Except as specifically
provided in this Section 18.4 and except with regard to any payment required
from Landlord to Tenant under Section 8.2, Tenant hereby waives to the fullest
extent permitted by law any right or entitlement to any compensation, damages,
claim or award for, related to or arising out of any termination or withdrawal
of a portion of the leased premises by Landlord under Sections 8.1 or 8.2 of the
Lease (subject to the time periods and other conditions contained in such
Sections 8.1 and 8.2), whether or not such termination or withdrawal was done by
Landlord in connection with any taking or threat of taking by any public
utility, agency or authority entitled to exercise any power of eminent domain or
threat of taking.
18.5 EFFECT OF TERMINATION. If this Lease is terminated, in whole or in
part, pursuant to any of the provisions of this Article, all rentals and other
charges payable by Tenant to Landlord hereunder and attributable to the leased
premises taken, shall be paid up to the date upon which actual physical
possession shall be taken by the condemnor, and except as provided in Section
25.6 below the parties shall thereupon be released from all further liability
under this Lease in relation thereto.
18.6 VOLUNTARY CONVEYANCE. A voluntary conveyance by Landlord to a
public utility, agency or authority under threat of a taking under the power of
eminent domain in lieu of formal proceedings after the adoption of a resolution
of necessity or similar action by the utility, agency or authority, and
notwithstanding that Landlord may have cooperated fully or initiated
negotiations with such public entity regarding such voluntary conveyance, shall
be deemed a taking within the meaning of this Article XVIII.
ARTICLE XIX
MINERAL AND WATER RIGHTS RESERVATIONS
-------------------------------------
19.1 RESERVATIONS TO LANDLORD. Landlord reserves and excepts from all
property leased hereunder unto itself, its successors and assigns, together with
the exclusive right to grant and transfer all or a portion of the same:
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(a) Any and all oil, oil rights, petroleum, minerals, mineral
rights, natural gas rights, and other hydrocarbon substances by whatsoever name
known, geothermal resources (as defined in California Public Resources Code,
Section 6903), and all products derived from any of the foregoing, that may be
within or under the land, together with the perpetual right of drilling, mining,
exploring, prospecting and operating therefor and storing in and removing the
same from the leased premises or any other land, including the right to
whipstock or directionally drill and mine from lands other than those conveyed
hereby, oil or gas xxxxx, tunnels and shafts into, through or across the
subsurface of the leased premises, and to bottom such whipstocked or
directionally drilled xxxxx, tunnels and shafts under and beneath or beyond the
exterior limits thereof, and to redrill, retunnel, equip, maintain, repair,
deepen and operate any such xxxxx or mines; without, however, the right to
enter, drill, mine, store, explore and operate on or through the surface or the
upper five hundred (500) feet of the subsurface of the leased premises; and
(b) Any and all water rights or interests therein, no matter
how acquired by Landlord and owned or used by Landlord in connection with or
with respect to the leased premises, together with the right and power to
explore, drill, redrill, remove and store the same from the leased premises or
to divert or otherwise utilize such water, rights or interests on any other
property owned or leased by Landlord, whether such water rights shall be
riparian, overlying, appropriative, percolating, littoral, prescriptive,
adjudicated, statutory or contractual; but without, however, any right to enter
upon the surface of the leased premises in the exercise of such rights.
ARTICLE XX
HOLDING OVER
------------
20.1 NO RIGHT TO HOLD OVER. This Lease shall terminate and become null
and void without further notice upon the expiration of the term specified, and
any holding over by Tenant after the expiration of said term shall not
constitute a renewal hereof or give Tenant any rights hereunder or in or to the
leased premises, except as otherwise herein provided, it being understood and
agreed that this Lease cannot be renewed, extended or in any manner modified
except in writing signed by both parties hereto.
ARTICLE XXI
OCCUPATIONAL SAFETY AND HEALTH ACT
----------------------------------
21.1 TENANT TO COMPLY. Tenant covenants at all times during the term of
this Lease to comply with the requirements of the Occupational Safety and Health
Act of 1970, 29 U.S.C. Section 651 ET SEQ. and any analogous legislation in
California (collectively, the "ACT"), to the extent that the Act applies to the
leased premises and any activities thereon and without limiting the generality
of the foregoing, Tenant covenants to maintain all working areas, all machinery,
structures, electrical facilities and the like upon the leased premises in a
condition that fully complies with the requirements of the Act, including such
requirements as would be applicable with respect to agents, employees or
contractors of Landlord who may from time to time be present upon the leased
premises.
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ARTICLE XXII
TRANSFER BY LANDLORD
--------------------
22.1 TRANSFER BY LANDLORD. The term "LANDLORD" as used in this Lease,
so far as covenants or obligations on the part of Landlord are concerned, shall
mean and include only the fee owner or owners at the time in question of the
leased premises, and in the event of any transfer or transfers of the title to
said land, Landlord herein named (and in the case of any subsequent transfers or
conveyances, the then grantor), except as hereinafter provided, shall be
automatically freed and relieved, from and after the date of such transfer or
conveyance, of all covenants or obligations on the part of Landlord contained in
the Lease thereafter to be performed; provided, however, that any funds in which
Tenant has an interest which are in the hands of such Landlord or the then
grantor at the time of such transfer shall be turned over to the grantee, and
any amount then due and payable to Tenant by Landlord or the then grantor at the
time of such transfer shall be turned over to the grantee, and any amount then
due and payable to Tenant by Landlord or the then grantor under any provisions
of this Lease shall be paid to Tenant, and provided further, however, that the
grantee assumes and agrees in writing to be bound by each and every covenant of
the grantor hereunder. It is intended hereby that the covenants and obligations
contained in this Lease on the part of Landlord shall, subject to the foregoing,
be binding on Landlord, its successors and assigns, only during and in respect
to their respective successive periods of ownership.
No holder of a mortgage and/or deed of trust to which this Lease is or
may be subordinate, and no landlord under a so-called sale-leaseback, shall be
responsible in connection with any deposit hereunder, unless such mortgagee or
holder of such deed of trust or landlord shall have actually received the
deposit.
22.2 ATTORNMENT. In the event of the conveyance of the leased premises
by foreclosure or deed in lieu of foreclosure, or in the event Landlord sells,
conveys, assigns or otherwise transfers its interest in this Lease and the
leased premises, Tenant hereby agrees to attorn to, and covenants and agrees to
execute an instrument in writing reasonably satisfactory to the new owner
whereby Tenant attorns to such successor in interest and recognizes such
successor as the Landlord under this Lease.
22.3 SUBORDINATION BY TENANT. Tenant agrees that this Lease shall, at
the request of Landlord, be subordinate to any mortgages or deeds of trust that
may hereafter be placed by Landlord upon the leased premises and to any and all
advances to be made thereunder, and to the interest thereon, and all renewals,
replacements and extensions thereof; provided, that the mortgagees or
beneficiaries named in said mortgages or trust deeds shall agree to recognize
the interest of Tenant and any applicable encumbrancer under Article XIV above
in the event of foreclosure, if Tenant is not then in default. Tenant also
agrees that any mortgagee or beneficiary may elect to have this Lease constitute
a prior lien to its mortgage or deed of trust, and in the event of such election
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and upon notification by such mortgagee or beneficiary to Tenant to that effect,
this Lease shall be deemed prior in lien to such mortgage or deed of trust,
whether this Lease is dated prior to or subsequent to the date of said mortgage
or deed of trust. Tenant agrees that upon the request of Landlord, or any
mortgagee or beneficiary, Tenant shall execute whatever instruments may be
required to carry out the intent of this Section in form reasonably acceptable
to Tenant and Landlord.
ARTICLE XXIII
HAZARDOUS MATERIALS; REMEDIATION
--------------------------------
23.1 REPRESENTATIONS AND WARRANTIES. Tenant represents and warrants to
Landlord that to the best of Tenant's knowledge and belief:
(a) All fertilizer, pesticides, pre- and post-emergent weed
killers, chemicals and other materials used, stored and/or placed or deposited
on the leased premises or any property leased under the Original Lease by Xxxxx
or Xxxxx' Representatives were used, placed and/or deposited in a manner and in
amounts that were in compliance with Hazardous Materials Laws when such
materials were used; and all fertilizers, pesticides, pre- and post-emergent
weed killers, chemicals and other materials used by Xxxxx or any of Xxxxx'
Representatives were permitted for use within the leased premises by Hazardous
Materials Laws during the period in which they were used by such persons; and
(b) Xxxxx or any of Xxxxx' Representatives have not caused or
precipitated, and there have not occurred, on or about the leased premises or
any property leased under the Original Lease, any spills or discharges of
fertilizers, pesticides, pre- or post-emergent weed killers, chemicals or other
materials in levels or amounts which required at the time of such spill or
discharge the filing of a report with any governmental agency pursuant to any
Hazardous Materials Laws.
23.2 OPERATIONS ON THE LEASED PREMISES. Tenant hereby covenants and
agrees as follows:
(a) Tenant will use and will cause Tenant's Representatives to
use only Permitted Agricultural Products and Permitted Petroleum Fuels;
(b) Tenant shall not install any new above-ground storage
tanks on the leased premises without the prior written consent of Landlord,
which consent shall not be unreasonably withheld or delayed, and Tenant shall
not install any new underground storage tanks on the leased premises; provided
that existing underground storage tanks may be modified or retrofitted as
necessary to comply with applicable federal, state and local laws, rules and
regulations. Any storage tank installed by Xxxxx or any of Xxxxx'
Representatives (including those installed prior to the date hereof) shall fully
comply with all applicable governmental regulations, including those governing
the construction of storage tanks, monitoring of storage tanks, record keeping,
financial responsibility, release reporting and closure. Without limiting the
generality of the foregoing, with regard to all tanks installed or used by Xxxxx
or any of Xxxxx' Representatives on or about the leased premises or any property
leased under the Original Lease, Tenant shall be responsible for, at its sole
cost and expense, compliance with any financial responsibility requirements
imposed by law, with the cost of installing all necessary monitoring equipment,
and with the subsequent periodic inspection of each tank;
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(c) Tenant shall not use any pre- or post-emergent weed
killers or other soil sterilants which, in Tenant's reasonable and good faith
judgment, would be expected to inhibit the growth of grass, plants or trees on
the leased premises after the expiration of the Lease; and
(d) Tenant shall promptly take all actions lawfully required
by any federal, state or local governmental agency with jurisdiction to
remediate the leased premises, if such remediation is necessitated by the
presence of Hazardous Materials or any other fertilizers, pesticides, pre- or
post-emergent weed killers, chemical or other materials on the leased premises
that are in violation of Hazardous Materials Laws, if such materials were placed
or deposited on the leased premises or any property leased under the Original
Lease by Xxxxx or Xxxxx' Representatives.
(e) Except for the proper storage and use of (i) Permitted
Agricultural Chemicals; (ii) Permitted Petroleum Fuels; (iii) substances
normally and customarily required for use in the operation of a nursery and
offices which are used in accordance with applicable laws (other than weed
killers, pesticides, petroleum products or fertilizers), Tenant and Tenant's
Representatives shall not handle, place, hold, store, use or dispose of any
Hazardous Materials on or under the leased premises;
ARTICLE XXIV
ESTOPPEL CERTIFICATES
---------------------
24.1 CONTENTS AND EFFECT. Either Tenant or Landlord shall, at any time
and from time to time, upon not less than thirty (30) days' prior written notice
by the other party, execute, acknowledge and deliver to the requesting party a
statement in writing certifying that (a) this Lease is unmodified and in full
force and effect (or, if there has been any modification hereof, that the same
is in full force and effect as modified and stating the modification or
modifications), (b) that the certifying party, to the actual knowledge of the
identified employee or officer of the certifying party who is responsible for
administering the Lease, is not in default, except as specified in such
statement, in regard to any of its covenants or obligations under this Lease,
(c) the dates to which all sums payable as rental hereunder have been paid in
advance, if any, and (d) such reasonable information (to the actual knowledge of
such identified person) relating to this Lease as Landlord's or Tenant's lender,
lienor, encumbrancer or purchaser may require. For purposes of this paragraph,
"to a person's actual knowledge" shall mean knowledge of facts or circumstances
known to such person at the time of certification without any duty of
inspection, examination or inquiry. Tenant and Landlord each represents and
warrants that any such statement delivered by it pursuant to this Article will
be accurate and binding upon the entity providing such statement and may be
relied upon by the person to whom it is addressed.
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ARTICLE XXV
MISCELLANEOUS
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25.1 PRORATIONS. All annual payments required to be made under the
terms of this Lease which require proration shall be prorated on the basis of
one twelfth (1/12th) of the amount for each full month and one-three hundred
sixtieth (1/360th) of the amount for each day to be prorated.
25.2 INTEREST ON LATE PAYMENTS. Any installment of rent accruing under
the provisions of this Lease or any other payment which shall not be paid when
due, shall bear simple interest at *** per annum. Interest which has accrued and
remains unpaid shall annually be added to the principal amount due and shall
itself bear interest. Acceptance of interest shall not constitute a waiver of
any default or create any right to defer payments due hereunder.
25.3 ACCORD AND SATISFACTION. No payment by Tenant or receipt by
Landlord of a lesser amount than the rent and other payments herein stipulated
shall be deemed to be other than on account of the earliest due stipulated rent,
nor shall any endorsement or statement on any check or any letter accompanying
any check or payment as rent be deemed an accord and satisfaction, and Landlord
shall accept such check or payment without prejudice to Landlord's right to
recover the balance of such rent or pursue any other remedy in this Lease
provided.
25.4 WAIVER. One or more waivers of any covenant or condition by
Landlord shall not be construed as a waiver of a subsequent breach of the same
covenant or condition, and the consent or approval by Landlord to or of any act
by Tenant requiring Landlord's consent or approval shall not be deemed to render
unnecessary Landlord's consent or approval to or any subsequent similar act by
Tenant. No breach by Tenant of a covenant or condition of this Lease shall be
deemed to have been waived by Landlord unless such waiver is in a writing signed
by Landlord. The rights and remedies of Landlord under this Lease shall be
cumulative and in addition to any and all other rights and remedies which
Landlord has or may have.
25.5 SURRENDER OR CANCELLATION. The voluntary or other surrender of
this Lease by Tenant, or a mutual cancellation thereof, shall not work a merger,
but shall terminate all or any existing subleases unless Landlord expressly
elects to treat such surrender or cancellation as an assignment to Landlord of
any or all of such subleases.
25.6 SURVIVAL OF INDEMNITIES. The obligations (and waivers) of the
indemnifying party under each and every indemnification, defense and hold
harmless provision contained in this Lease shall survive the expiration or
earlier termination of this Lease to and until the last to occur of (a) the last
date permitted by law for the bringing of any claim or action with respect to
which indemnification may be claimed by the indemnified party under such
provision or (b) the date on which any claim or action for which indemnification
may be claimed under such provision is fully and finally resolved and, if
applicable, any compromise thereof or judgment or award thereon is paid in full
by the indemnifying party and the indemnified party is reimbursed by the
indemnifying party for any amounts paid by the indemnified party in compromise
thereof or upon a judgment or award thereon and in defense of such action or
claim, including reasonable attorneys' fees.
------------------------
*** Information omitted and filed separately with the Commission for
confidential treatment.
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25.7 CORPORATE AUTHORITY. If Tenant is a corporation, each individual
executing this Lease on behalf of said corporation represents and warrants that
he is duly authorized to execute and deliver this Lease on behalf of said
corporation, and that this Lease is binding upon said corporation in accordance
with its terms. Tenant shall, at Landlord's request, deliver a certified copy of
its Board of Directors' resolution authorizing such execution.
25.8 ENTIRE AGREEMENT. This Lease and the exhibits hereto, cover in
full each and every agreement of every kind or nature whatsoever between the
parties hereto concerning the leased premises, and all preliminary negotiations
and agreements of whatsoever kind with respect to the leased premises, except
those contained herein, are superseded and of no further force or effect. No
person, firm or corporation has at any time had any authority from Landlord to
make any representations or promises on behalf of Landlord, and Tenant expressly
agrees that if any such representations or promises have been made by Landlord
or others, Tenant hereby waives all right to rely thereon. No verbal agreement
or implied covenant shall be held to vary the provisions hereof, notwithstanding
any statute, law, or custom to the contrary. All of the Exhibits attached to
this Lease are incorporated herein by this reference.
25.9 AMENDMENT TO LEASE. No amendment or other modification of this
Lease shall be effective unless in writing signed by both Landlord and Tenant.
25.10 CERTAIN RULES OF CONSTRUCTION. Time is of the essence of this
Lease. Notwithstanding the fact that certain references elsewhere in this Lease
to acts required to be performed by Tenant hereunder omit to state that such
acts shall be performed at Tenant's sole cost and expense, unless the text
clearly states the contrary, each and every act to be performed or obligation to
be fulfilled by Tenant pursuant to this Lease shall be performed or fulfilled at
Tenant's sole cost and expense. The captions, section numbers, article numbers,
and index appearing in this Lease are inserted only as a matter of convenience
and in no way define, limit, construe, or describe the scope or intent of such
sections or articles of this Lease nor in any way affect this Lease. Each and
all of the obligations, covenants, conditions and restrictions of this Lease
shall inure to the benefit of and be binding upon and enforceable against, as
the case may require, the successors and assigns of Landlord, and, subject to
the restrictions of Article XIII above entitled "Assignments and Subletting,"
any authorized assignee, transferee, sublessee and other successors in interest
of Tenant. In this Lease each of the neuter, feminine or masculine gender(s)
includes the other or others, and the singular number includes the plural,
wherever the context so requires. If more than one tenant is named above, the
obligation of each of such Tenant hereunder shall be and is joint and several.
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25.11 SPECIFIC PERFORMANCE. Nothing contained in this Lease shall be
construed as or shall have the effect of abridging the right of either party to
obtain specific performance of any and all of the covenants or obligations of
the other party under this Lease.
25.12 EXECUTION OF LEASE; NO OPTION. The submission of an unexecuted
form of this Lease to Tenant shall be for examination purposes only, and does
not and shall not constitute a reservation of, or option for, Tenant to lease,
or otherwise create any interest by Tenant in the leased premises or any other
property of Landlord. Execution of this Lease by Tenant and return to Landlord
shall not be binding upon Landlord, notwithstanding any time interval, until
Landlord has in fact executed and delivered this Lease to Tenant.
25.13 CONTROLLING LAW. This Lease shall be governed by and construed in
accordance with the laws of the State of California. In the event of any dispute
under this Lease, it is agreed that the sole and exclusive venue shall be in a
court of competent jurisdiction in Orange County, California, and the parties
hereto agree to and do hereby submit to the jurisdiction of such court. If any
provision of this Lease or the application thereof to any person or
circumstances shall, to any extent, be invalid or unenforceable, the remainder
of this Lease shall not be affected thereby and each other provision of the
Lease shall be valid and enforceable to the fullest extent permitted by the law.
25.14 WAIVER OF JURY TRIAL. Landlord and Tenant each acknowledges that
it is aware of and has had the advice of counsel of its choice with respect to
its rights to trial by jury, and each party does hereby expressly and knowingly
waive and release all such rights to trial by jury in any action, proceeding or
counterclaim brought by either party hereto against the other (and/or against
its officers, directors, employees, agents, or subsidiary or affiliated
entities) on or with regard to any matters whatsoever arising out of or in any
way connected with this Lease, Tenant's use or occupancy of the leased premises
or any other land of Landlord, and/or any claim of injury or damage.
25.15 CHANGES REQUESTED BY LENDERS. Neither Landlord nor Tenant shall
unreasonably withhold its consent to changes or amendments to this Lease
requested by Tenant's encumbrancer or by any lender making a loan to Landlord
secured by Landlord's interest in the leased premises, so long as such changes
do not alter the basic business terms of this Lease or otherwise materially
diminish the rights or materially increase the obligations of the party from
whom consent to such change or amendment is requested.
25.16 NO THIRD PARTIES BENEFICIARY. The provisions of this Lease are
intended to set forth the rights and obligations of Landlord and Tenant, and, as
permitted in this Lease, their successors and their assigns. The provisions of
this Lease are not intended to induce reliance by any other person or party.
This Lease shall not provide any rights to any third party claiming to be a
beneficiary of any provision of this Lease.
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