EXHIBIT 10.14
LEASE AGREEMENT BETWEEN
SUMO HOLDINGS SACRAMENTO, LLC
AND
FORD GRAPHICS GROUP, L.L.C.
LEASE AGREEMENT BETWEEN
SUMO HOLDINGS SACRAMENT, LLC
AND
FORD GRAPHICS GROUP, L.L.C.
PREAMBLE
THIS LEASE is entered into on December 1, 1997, by and between SUMO
HOLDINGS SACRAMENTO, LLC, a California limited liability company, having its
principal place of business located at 000 Xxxx Xxxxxx, Xxxxx Xxxxxxxx,
Xxxxxxxxxx 00000, (hereinafter referred to as "Landlord") and FORD GRAPHICS
GROUP, L.L.C., a California limited liability company, having its principal
place of business located at 000 Xxxx Xxxxxx, Xxxxx Xxxxxxxx, Xxxxxxxxxx, 00000
(hereinafter referred to as "Tenant").
Landlord hereby Leases to Tenant on the terms and conditions set forth in
this Lease certain real property located in the City and County of Sacramento,
California, described in Exhibit "A", attached hereto and incorporated by
reference (hereinafter referred to as "Premises").
ARTICLE 1
TERM OF LEASE
1.1 ORIGINAL TERM:
The term of this Lease shall be for a period of fifteen (15) years
commencing at 12:01 A.M. on December 1, 1997 and ending at 11:59 P.M. on
November 30, 2012, unless extended or terminated sooner as provided in this
Lease.
1.2 OPTION TO EXTEND TERM:
Tenant shall have a one-time option to extend the term of this lease for
an additional period of five (5) years commencing on expiration of the original
term specified in Section 1.01 of this Lease provided:
(a) Tenant has fully and faithfully performed all the terms,
covenants, and conditions of this Lease for the original tern specified
in Section 1.01 herein.
(b) Written notice of Tenant's election to renew the term of
this Lease is delivered by Tenant to Landlord at least six (6) months
prior to the expiration of the Lease's original term.
(c) The renewed term of this Lease shall be subject to the
same terms and conditions as are contained in this Lease, except that
the amount of rent payable under this Lease for the renewed term shall
be adjusted based on the then fair market value of the Premises,
determined in accordance with Section 2.01(b) of this Lease.
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1.3 HOLDING OVER:
If Tenant holds over and continues in possession of the Premises after
termination of the term of this Lease, including any extended term, Tenant's
continued occupancy of the Premises shall be deemed merely a tenancy from month
to month and be subject to the provisions of this Lease, excluding the right of
first refusal as defined in Section 1.04, and provided that the monthly amount
of rent due shall be determined in accordance with Section 2.01(b) of this
Lease.
1.4 RIGHT OF FIRST REFUSAL TO PURCHASE LEASED PREMISES:
(a) If Landlord, during the lease term or any extension of
the term, elects to sell all or any portion of the Premises. Tenant
shall have the right of first refusal to meet any bona fide offer of
sale from a third party on the same terms and conditions of that offer,
including but not limited to the price and date for close of escrow,
provided Tenant is not then in default under this Lease. On receipt of
an acceptable bona fide third party offer for purchase of the Premises,
Landlord shall notify Tenant in writing of the offer and its terms and
conditions. Tenant, within thirty (30) days after the date of
Landlord's notice to Tenant, shall notify Landlord in writing whether
or not Tenant agrees to purchase the Premises on the same terms and
conditions as contained in the third party offer. A failure by Tenant
to give Landlord any written notification within the prescribed time
period shall be deemed notice to Landlord that Tenant does not elect to
purchase the Premises. If Tenant elects not to purchase the Premises,
Landlord shall be free to sell the premises or portion thereof to that
third party in accordance with the terms and conditions of the third
party offer; provided, however, that any material change in such terms
and conditions shall be deemed a new offer triggering this right of
first refusal.
(b) The right of first refusal granted to Tenant shall
exclude all of the following transfers: any transfer by Landlord to
individuals holding an ownership interest in Landlord; any transfer
resulting from the Landlord's death; any transfer by Landlord to
Landlord's spouse or any of Landlord's children; and any transfer by
Landlord to any other entity in which Landlord or its owners hold a
fifty-one percent (51%) or greater ownership interest. The right of
first refusal granted to Tenant also shall not apply in the event of
foreclosure (or a deed in lieu of foreclosure) or to a sale of the
Premises by a lender who has foreclosed.
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(c) The right of first refusal granted to Tenant under this
lease is personal, and Tenant shall have no right to assign or transfer
the right of first refusal either separately from or together with a
transfer of Tenant's leasehold interest.
ARTICLE 2
RENT AND TAXES
2.1 FIXED RENT:
(a) Tenant agrees to pay to Landlord during the first
seventy-two (72) months of the original term of this Lease TWENTY
THOUSAND NINE HUNDRED DOLLARS ($20,900) per month. For the remaining
original term of the Lease, the amount of the monthly rent shall equal
the property's fair market rental value as of December 1, 2003, as
determined in good faith by Landlord. Should Tenant dispute Landlord's
determination of the property's fair market rental value, the parties
agree that the fair market rental value shall be determined by
arbitration held in accordance with the rules of the American
Arbitration Association in effect at that time. The written decision of
the arbitrators shall be binding on Tenant and Landlord. The costs of
such arbitration shall be borne equally by Tenant and Landlord. Such
arbitration hearing shall be held in Los Angeles, California. Such rent
shall be payable on the first day of each and every month occurring
during the term of this Lease at the address set forth in this Lease
for mailing notices to Landlord, or at any other place or places that
Landlord may, from time to time, designate by written notice given to
Tenant.
(b) Should Tenant elect to extend the original term of this
Lease, the annual rent to be paid by Tenant under this Lease during the
extended term described in Section 1.02 shall equal one hundred percent
(100%) of the property's fair market rental value three (3) months
prior to the expiration of the Lease, or the adjusted monthly rental
amount determined pursuant to Section 2.01(a) of this Lease, whichever
is greater. Should Tenant dispute Landlord's determination of the
property's fair market rental value, the parties agree that the fair
market rental value shall be determined by arbitration held in
accordance with the rules of the American Arbitration Association in
effect at that time. The written decision of the arbitrators shall be
binding on Tenant and Landlord. The costs of such arbitration shall be
borne equally by Tenant and Landlord. Such arbitration hearing shall be
held in Los Angeles. California..
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The annual rent for the renewed term shall be payable in equal monthly
installments and otherwise paid in the same manner as rent is required under
Section 2.01 to be paid during the original term of this Lease. Landlord shall
give Tenant written notice at least six (6) months prior to expiration of the
original term of any expected rent increase determined under this section.
2.2 LATE PAYMENT CHARGES:
Tenant shall pay a late charge equal to five percent (5%) of the amount of
each installment of fixed rent or any other sum owing from Tenant to Landlord
under the terms hereof which is not received by Landlord within ten (10) days
after its due date. The late age shall increase to ten percent (10%) of the
amount owing, if such amount is overdue thirty (30) days or more. In addition to
late charges; interest shall accrue on the unpaid balance at ten percent (10%)
per annum compounded monthly from the time such amount becomes due until such
amounts are paid in full. No interest shall accrue if the rent and other amounts
owed are received by Landlord within ten (10) days of the time they first became
due.
2.3 TAXES TO BE PAID BY TENANT:
(a) In addition to the rent specified in Section 2.01 of
this Lease, Tenant shall pay all real property taxes and general and
special assessments levied or assessed against the Premises during the
term of this Lease.
(b) Tenant's obligation to pay all real property taxes and
general and special assessment on the Premises shall also include the
obligation to pay any increases in real property taxes and general and
special assessments, whether the increase results from an increase in
the property tax rate and/or in the valuation of the Premises.
(c) If the Premises are assessed and taxed as part of a
larger parcel of real property owned by Landlord (referred to in this
Lease as the "Tax Parcel") , the amount payable under this section by
Tenant shall be the portion of the tax xxxx for the Tax Parcel for
bears the same ratio to the total tax xxxx for the Tax Parcel as the
value of the Premises bears to the value of the entire Tax Parcel,
determined from the worksheets of the county assessor for the county in
which the Premises are located or by appraisal by an independent real
estate appraiser selected by the parties.
(d) The taxes and assessments levied against the Premises
during the first and last years of the term of this Lease shall be
prorated between Landlord and Tenant for purposes of this section as of
12:01 A.M. on date of commencement and termination respectively of this
Lease.
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(e) If any tax. assessment or charge may be paid in one sum
ear in installments, Tenant may elect either method of payment and its
election shall be binding on Landlord. If Tenant makes the election to
pay any tax, assessment, or charge in installments and any installment
is payable after termination of this Lease, the unpaid installment
shall be prorated as of the date of termination and the amount payable
after the date of termination shall be paid by Landlord.
(f) Tenant shall not be required to pay any estate, gift,
inheritance, succession, transfer. franchise, income, or other taxes of
a similar nature that may be payable by Landlord or Landlord's legal
representative, successors, or assigns. Tenant also shall not be
required to pay any tax that might become due on account of Landlord's
ownership of property other than the Premise, notwithstanding that tax
may become a lien on the Premises or be collectible from it.
(g) Tenant shall have the right, at Tenant's sole cost and
expense, to protest or contest in good faith any tax or assessment, or
any increase in any tax or assessment, levied or assessed against the
Premises, or to defer payment of the tax or assessment until final
determination of the issue. On final determination, Tenant shall
immediately pay the amount of the judgment rendered and all costs,
charges, interest, and related penalties. The right grant to Tenant in
this section is conditioned upon Tenant's deposit with Landlord the
fall amount of that disputed tax or assessment plus the amount of any
penalty that will be imposed on the Premises for failure to timely pay
the tax or assessment, and one (1) year's interest at the rate charged
by the government entity imposing the tax or assessment on the amount
of the tax or assessment; provided, however, that such deposit shall be
held in an interest bearing account and refunded with such interest in
the event and to the extent the tax assessment is successfully
contested. Landlord shall, upon the request of Tenant, cooperate with
Tenant in any legal proceedings described under this subparagraph.
ARTICLE 3
REPAIRS. MAINTENANCE, AND ALTERATIONS
3.1 PRESENT CONDITION OF PREMISES:
Tenant hereby acknowledges that it has inspected the Premises and all
improvements existing thereon, including any and all buildings on and
appurtenances to the Premises, and agrees to accept the Premises as is.
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3.2 MAINTENANCE AND REPAIR BY TENANT:
At all times during the term of this Lease, including any extensions
thereof, Tenant shall, at its own cost and expense and at no cost and expense to
Landlord, maintain the Premises and all portions of the Premises in good order
and repair, and make all repairs and replacements that may become necessary to
the Premises, any buildings or improvement on the Premises, or any sidewalks,
landscaping, driveways, or parking areas that are part of or appurtenant to the
Premises. Any and all repairs and replacements required by this section, both
ordinary and extraordinary and both structural. and nonstructural, shall be made
promptly by Tenant as required and shall be of quality and workmanship
comparable to that existing at the Premises on the date hereof and shall comply
with all applicable laws, regulations, and ordinances of any governmental
authority with jurisdiction.
3.3 REPAIRS BY LANDLORD FOR TENANT'S ACCOUNT:
If, at any time during the term of this Lease, including any extensions
thereof, Tenant fails to maintain the premises or make any repairs or
replacements as required by Section 3.02 of this Lease, Landlord may, at its
discretion, enter the Premises and perform such maintenance or make such repairs
or replacements for the account of Tenant as shall be necessary to fulfill
Tenant's covenants hereunder; provided, however, that Landlord shall first
notify Tenant of such repairs or replacements and Tenant shall have ten (10)
business days to make arrangements for such repairs or replacements to
Landlord's reasonable satisfaction. Any sums expended by Landlord in making such
repairs or replacements, together with interest thereon at an annual rate of
seven and one half percent (7.5%) from the date expended by Landlord until the
date repaid by Tenant, shall be due and payable by Tenant to Landlord with the
next due payment of rent under this Lease.
3.4 ALTERATIONS AND IMPROVEMENTS:
Tenant shall have the right to make alterations and improvements to the
Premises, subject to the following terms and conditions:
(a) No alterations or improvements made by Tenant shall in
any way impair the structural stability of any building or improvement
on the Premises or diminish the value of the Premises.
(b) All alterations or improvements requiring an
expenditures greater than TEN THOUSAND DOLLARS ($10,000) shall be first
approved in writing by Landlord.
(c) Tenant shall keep all of the Premises and every part
thereof, including buildings and other improvements at any time located
thereon, free and clear of any and all mechanics', materialmen's, and
other liens arising out of, or in connection with, any work or services
performed, or materials or appliances furnished to Tenant as part of
any alterations, improvements, or repairs that Tenant
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may make, or cause to be made, on or, about the Premises, or any
obligations of any kind incurred by Tenant. Tenant further agrees to
promptly and fully discharge any and all claims on which such liens
might be based, and to hold Landlord free and harmless from any and all
such liens and claims of liens and suits or other proceedings
pertaining thereto. Should Tenant desire to contest any lien that may
attach to the Premises, Tenant shall first notify Landlord in writing
of Tenant's intention so to do within five (5) business days of the
lien having been filed. In such a case, Tenant shall not be considered
in default hereunder until ten (10) business days air the final
determination of the validity thereof, within which time Tenant shall
satisfy and discharge the Rest to the extent held valid. The
satisfaction and discharge of any such lien shall not, in any case, be
delayed until execution is had on any judgment rendered on the lien,
and that delay shall be a default of Tenant under this Lease. In the
event of any such contest, Tenant shall protect and indemnify Landlord
against all loss, cost, expense, and damage resulting from the contest.
(d) All alterations and improvements made to the Premises
shall become the property of Landlord and shall remain on and be
surrendered with the Premises at the expiration or earlier termination
of this Lease, including any extension thereof. Notwithstanding any
other provision in this Lease, Tenant shall have the right to remove
its trade fixtures from the Premises at the expiration or earlier
termination of this Lease term provided Tenant is not then in default
under this Lease and provided that Tenant shall repair any damage to
the Premises caused by that removal.
(e) All alterations and improvements shall comply with the
applicable laws, ordinances, and regulations of any governmental
authority with jurisdiction over the Premises.
3.5 SURRENDER OF PREMISES:
On expiration of the term of this Lease, including any extension thereof,
or on earlier termination of this Lease, Tenant shall surrender the Premises,
all building or improvements on the Premises, and all things appurtenant to the
Premises, to Landlord in substantially the same condition as exists on the date
of this Lease, reasonable wear and tear excepted.
3.6 LANDLORD'S RIGHT OF INSPECTION:
Landlord or its duly authorized agents may enter the Premises accompanied
by Tenant's designated employee at any and all reasonable times during the term
of this Lease upon twenty-four (24) hours notice, including any extended term,
to determine Tenant's compliance with the terms and
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conditions of this Lease or to perform any other acts authorized by this Lease
to be performed by Landlord or reasonably necessary to protect Landlord's rights
under this Lease.
ARTICLE 4
USE OF PREMISES
4.1 PERMITTED AND PROHIBITED USE OF PREMISES:
Tenant may use the Premises for any lawful purpose without the written
consent of Landlord. In addition, Tenant may use or cause to be used, at its own
risk, any hazardous or toxic substances or materials, or store or dispose of any
such substances or materials on the Premises, provided that Tenant shall
maintain the Premises in a clean and sanitary manner and shall comply with all
laws, ordinances, rules, and regulations applicable to the Premises, enacted or
promulgated by any public or governmental authority or agency having
jurisdiction over the Premises.
4.2 SIGNS AND ADVERTISING:
Tenant may erect and maintain any signs on the Premises relating to its
business, provided that such signs:
(a) are approved, in writing, by Landlord;
(b) comply with all laws, ordinances, rules, and regulations
applicable to the Premises, including those enacted or promulgated by
any public or governmental authority or agency having jurisdiction over
the Premises;
(c) are removed at Tenant's sole cost and expense without
damage to the Premises, or any improvement thereon, upon expiration or
sooner termination of this Lease;
(d) are erected by Tenant for its own advertising purposes
ARTICLE 5
INSURANCE AND ALLOCATION OF THE RISK OF LOSS
5.1 ALLOCATION OF THE RISK OF LOSS:
Tenant shall, at all times during the term of this lease, including any
extensions, bear the sole risk of loss resulting from the damage or destruction
of any part of the Premises which are the subject matter of this Lease.
5.2 FIRE INSURANCE:
(a) Tenant shall, at its own cost and expense, and at all
parties during the full term of this Lease,
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including any extended term, keep all buildings, improvements,
equipment, and other structures on the Premises insured for their "Full
Replacement Cost" against loss or destruction by fire or such other
perils; including vandalism and malicious mischief, as are commonly
covered under a standard extended coverage endorsement in Log Angeles
County, California. Any proceeds received under any policy described in
this section shall be used to fund the repair or replacement of the
damaged building or improvement pursuant to Section 6.01 of this Lease.
Landlord shall be named as an additional insured on the policies and
the policies shall contain cross-liability endorsements.
(b) "Full Replacement Cost," as used in Section 5.02(a),
means the actual cost or replacement for the building, equipment, and
other improvements ore the Premises, as determined from time to time.
If, at any time during the term of this Lease, Landlord believes that
the Full Replacement Cost has increased, Landlord shall notify Tenant
in writing. If Tenant agrees with the increased Full Replacement Cost
set forth in Landlord's notice, Tenant shall, within thirty (30) days
of receipt of the notice, increase the amount of insurance carried to
the amount stated in the notice. If, however, the parties disagree as
to the value of the property's Full Replacement Cost, the insurance
carrier that is then carrying the largest amount of fire and extended
coverage on the Premises shall make a determination as to the
property's Full Replacement Cost. The insurer's determination shall be
final and Tenant shall, if necessary, immediately increase the amount
of insurance carried on the Premises to the amount determined by that
carrier. Notwithstanding any provision to the contrary, increases in
coverage pursuant to this section may not be made more often than once
per calendar year, unless otherwise agreed by Landlord and Tenant in a
separate writing. Notwithstanding the preceding sentence, if Tenant
makes improvements or alterations to the Premises during any given year
of the term of this Lease, Landlord may request an increase in coverage
pursuant to the provisions of this section.
5.3 LIABILITY AND PROPERTY INSURANCE:
(a) Tenant shall, at its own cost and expense secure and
maintain during the entire term of this Lease and any extended term of
this Lease, public liability, property damage, and products liability
insurance, insuring
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both Tenant and its employees against all bodily injury, property
damage, personal injury, or other loss or liability that might arise in
connection with Tenant's occupation and use of the Premises under this
Lease.
(b) Landlord shall be named as an additional insured and the
policy or policies shall contain cross-liability endorsements.
(c) If the limits of liability and property damage insurance
carried by Tenant are materially less than the amount or type of
insurance typically carried by owners or tenants of properties located
in the same county in which the Premises are Located, which are similar
to and operated for similar business purposes as the Premises, Landlord
may elect to require Tenant to increase the amount of specific
coverage, change the type of policy carried, or both. If Landlord so
elects, Tenant shall be notified in writing of the specific change in
policy amount or type required and shall have 30 days after the date of
Landlord's notice to effect the change in amount or type of policy. If,
however, the parties' disagree as to the necessary amount of coverage,
the insurance carrier that is then carrying the largest amount of
liability and property insurance coverage on the Premises shall make
determination as to the necessary amount of coverage. The insurer's
determination shall be final and Tenant shall, if necessary,
immediately increase the amount of insurance carried on the Premises to
the amount determined by that carrier. Notwithstanding any provision to
the contrary, increases in coverage pursuant to this section may not be
made more often an once per calendar year, unless otherwise agreed by
Landlord and Tenant in a separate writing. Notwithstanding the
preceding sentence, if Tenant makes improvements or alterations to the
Premises during any given year of the term of this Lease, Landlord may
request an increase in coverage pursuant to the provisions of this
section.
5.4 BUSINESS INTERRUPTION INSURANCE:
Tenant shall procure and maintain, at its own cost and expense, business
interruption insurance for and during the term of this Lease, and in an amount
sufficient to ensure that the rent provided for in Section 2.01 will be paid to
Landlord for a period of up to one (1) year in the event the Premises or
buildings thereon are destroyed or damaged so as to render operation of Tenant's
business impossible or impracticable.
5.5 TENANT'S PERSONAL PROPERTY:
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Tenant Shall at all tines during the term of this Lease and at Tenant's
sole expense, keep its personal property, including trade fixtures and equipment
and all inventory of Tenant that may be in the Premises from time to time,
insured against loss or damage by fire and by any peril included within fire and
extended coverage insurance for an amount that will insure the ability of Tenant
to fully replace the trade fixtures, equipment, and merchandise.
5.6 WORKERS' COMPENSATION INSURANCE:
Tenant shall maintain in effect throughout the term of this Lease, at
Tenant's sole expense, Workers' Compensation insurance in accordance with the
laws of California.
5.7 CANCELLATION CLAUSE:
Any policy of insurance required under this Article 5 shall be written by
insurance companies authorized to do business in California. Each policy of
insurance procured by Tenant pursuant to this Article 5 shall expressly provide
that it cannot be canceled for any reason or altered in any manner unless at
least thirty (30) days prior written notice has been given by the insurance
company issuing the policy to Landlord in the manner specified in this Lease for
service of notice on Landlord by Tenant.
5.8 DEPOSIT OF INSURANCE POLICIES WITH LANDLORD:
Promptly following the issuance, reissuance, or renewal of any insurance
policy required by this Lease, Tenant shall cause a duplicate copy of the policy
or a certificate evidencing the policy signed by the insurance company issuing
the policy or its agent to be given to Landlord.
5.9 BLANKET INSURANCE POLICY:
In order to satisfy its obligations under this Article 5, Tenant may at
any time during the term of this Lease, have in full force and effect a
"blanket" policy of insurance insuring the Premises as well as other property
owned or occupied by Tenant, provided the blanket policy does not in any way
diminish the amount or coverage of the insurance required under this Article,
and further provided that the blanket policy otherwise meets all requirements of
this Article.
5.10 LANDLORD'S RIGHT TO PROCURE INSURANCE:
If at any time Tenant fails to procure or maintain the insurance required
by this Article 5, Landlord may obtain that insurance and pay the premiums on it
for the benefit of Tenant. Any amounts paid by Landlord to procure or maintain
insurance pursuant to this section shall be immediately due and repayable to
Landlord by Tenant with the next then due installment of rent under this Lease;
failure to repay at that time any amount expended by Landlord shall be
considered the same as a failure to pay rent and a default by Tenant under this
Lease.
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ARTICLE 6
DESTRUCTION OF PREMISES
6.1 TENANT'S DUTY TO REPAIR OR RESTORE:
(a) If any improvements, including buildings and other
structures, located on the Premises are damaged or destroyed during the
term of this Lease, or any renewal or extension thereof, regardless of
the nature of such damage or destruction. Tenant shall repair that
damage as soon as reasonably possible and restore the Premises and
improvements to substantially the same condition as existed before the
damage or destruction, to the extent that the proceeds of the insurance
policies covering the occurrence are sufficient to cover the actual
cost of repair and restoration.
(b) If the damage or destruction is caused either by a peril
against which fire and extended coverage insurance is required by this
Lease to be carried or by a peril against which insurance is not
required to be carried by this Lease, Tenant expressly waives any right
under Civil Code Sections 1931-1933 to terminate this Lease for damage
or destruction to the Premises.
6.2 LIMITATION OF LEASE FOR CERTAIN LOSSES:
(a) Notwithstanding any other provision of this Lease, if
more than fifty percent {50%) of the Premises are damaged or destroyed,
including any buildings or movements thereon, Tenant may elect not to
rebuild and terminate this Lease by giving Landlord written notice of
the termination. The notice must be given within sixty (60) days after
occurrence of the damage or destruction.
(b) Tenant or Landlord shall also have the right to
terminate this Lease by giving written notice of termination to the
other not later than sixty (60) days after occurrence of the damage or
destruction under either of the following circumstances:
(1) If the Premises are damaged or destroyed from
any cause whatsoever, insured or uninsured, and the laws then in
existence do not permit the repair or restoration of the Premises
provided for in this Article; or
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(2) If the Premises are destroyed from any cause
whatsoever, Insured or uninsured, during the last six (6) months of the
original term of this Lease (provided that Tenant has not elected
before the date of damage or destruction to extend the term of this
Lease in accordance with the provisions of Section 1.02) or during the
last six (6) months of the extended term, if any, of this Lease.
(c) Any termination shall become effective as of the date of
the notice of termination, In the event of a termination under
subsection 6.02(a) or 6.02(b), Tenant shall not be entitled to collect
any insurance proceeds attributable to insurance policies covering the
Premises or improvements, except those proceeds attributable to
Tenant's personal property and trade fixtures, business interruption or
liability for claims in which Tenant is a party defendant.
(d) If this Lease is terminated pursuant to either
subsection 6.02(a) or 6.02(b) above, rent, taxes. assessments, and
other sums payable by Tenant under this Lease shall be abated as of the
date of the casualty. If any taxes, assessments, or rent has been paid
in advance by Tenant, Landlord shall refund it to Tenant for the
unexpired period for which the payment has been made.
6.3 TIME FOR CONSTRUCTION OF REPAIRS:
Any and all repairs and restoration of improvements required by this
Article shall be commenced by Tenant within a reasonable time after occurrence
of the damage or destruction requiring the repairs or restoration; shall be
diligently pursued after being commenced; and shall be completed within a
reasonable time after the loss. If Landlord, in its discretion, determines that
it must make the necessary repairs and restoration, Landlord shall cause the
repairs and restoration to be completed not later than one (1) year after
occurrence of the event causing destruction subject to force majeure.
6.4 PAYMENT OF INSURANCE PROCEEDS:
For any damage to the Premises caused by a peril covered by insurance
required under this Lease to be carried and maintained by Tenant, the proceeds
shall be paid directly to the Tenant for the purpose of making the necessary
repairs to the Premises.
ARTICLE 7
CONDEMNATION
7.1 CONDEMNATION DEFINED:
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(a) The term "Total Condemnation" as used in this Article
shall mean the taking by eminent domain ("Condemnation") by a public or
quasi-public agency or entity having the power of eminent domain
("Condemner") of:
(1) More than fifty percent (50%) of the total
ground area of the Premises; or
(2) Less than fifty percent (50%) of the ground
area of the Premises at a time when the remaining buildings or
improvements on the Premises cannot reasonably be restored to a
condition suitable for Tenant's occupancy for the uses permitted by
this Lease within ninety (90) normal eight-hour working days under all
laws and regulations then applicable; or
(3) Less than fifty percent (50%) of the ground
area of the Premises in such a manner that Tenant is materially
prevented from carrying on its then current operations on the remaining
portion of the Premises at no material additional costs than were
incurred immediately prior to the taking.
(b) The term "Partial Condemnation" as used in this Article
shall mean any Condemnation of a portion of the Premises that is not a
Total Condemnation under Section 7.01(a) of this Lease.
7.2 EFFECT OF CONDEMNATION:
(a) If a Total Condemnation of the Premises should occur
during the term of this Lease, this Lease shall terminate without
further notice as of 12:01 A.M. on the date actual physical possession
of the Condemned property is taken by the Condemner. All rent payable
under this Lease shall be prorated as of 12:01 A.M. on that date and a
prompt refund or payment of rent for the unexpired period of this Lease
shall be made by Landlord to Tenant. On the making of that rent
adjustment, both Landlord and Tenant will be released and discharged
from any and all further obligations under this Lease.
In the event of a Partial Condemnation of the Premises, this Lease shall
terminate as to the portion of the Premises taken on the date actual physical
possession of that portion is taken by the Condemner but shall remain in full
force anal effect as to the remainder of the Premises; provided, however, that
promptly after the taking of actual physical possession by the Condemner of the
portion taken by Condemnation. Landlord shall restore, at Landlord's own cost
and expense, the improvements on the remainder of the Premises to a condition
making the Premises tenantable by
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Tenant, to the satisfaction of Tenant in its reasonable discretion, for the then
current uses. Any rent payable under this Lease after the date actual physical
possession is taken by the Condemner of the portion of the Premises condemned
shall be reduced by the percentage the ground area of the portion taken by
eminent domain bears to the total ground area of the Premises on the date of
this Lease. In addition, the rent payable under this Lease shall be further
abated during the time and to the extent Tenant is prevented from occupying all
of the remainder of the Premises by the work of restoration required by this
section to be performed by Landlord.
7.3 LANDLORD'S POWER TO SELL IN LIEU OF CONDEMNATION:
Landlord may, without any obligation or liability to Tenant and without
affecting the validity or continuation of this Lease other than as expressly
provided in this Article, agree to sell or convey to the Condemner, without
first requiring that an action or proceeding for Condemnation be instituted or
tried, the portion of the Premises sought by the Condemner free from this Lease
and the rights of Tenant in the Premises other than as provided in this Article
7.
7.4 CONDEMNATION AWARD
All compensation and damages awarded or paid for the Condemnation of the
Premises or any portion thereof, or for any sale in lieu of Condemnation as
authorized by Section 7.03 of this Lease, shall, except as otherwise expressly
provided in this section, belong to and be the sole property of Landlord. Tenant
hereby assigns to Landlord any claim Tenant might have except for this provision
against Landlord, the Premises, or Condemner for diminution in value of the
leasehold estate created by this Lease or the value of the unexpired term of
this Lease; provided, however, that Tenant is entitled to seek to recover froth
the Condemner, but not from Landlord:
(a) The cost of removing any trade fixtures, furniture, or
equipment from the portion of the Premises taken by Condemnation;
(b) The value of any improvements installed by Tenant on the
portion of the Prices taken by Condemnation that Tenant has a right to
remove under this Lease but that Tenant elects not to remove; and
(c) The then amortized value of all improvements made by
Tenant on the portion of the Prices taken by Condemnation that could
not be removed by Tenant on expiration of this Lease either because of
provisions of this Lease or because the improvements would have no
economic value on removal from the Premises,
ARTICLE 8
INDEMNIFICATION
8.1 TENANT'S HOLD-HARMLESS CLAUSE:
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Except as otherwise provided in Section 8.02, Tenant shall indemnify and
holds Landlord and the property of Landlord, including the Premises, free and
harmless from any and all liability, claims, loss, damages, or expenses,
including attorney's fees and costs, arising by reason of the death or injury of
any person, including Tenant or any person who is an employee or agent of
Tenant, or by reason of damage to or destruction of any property, including
property owned by Tenant or any person who is an employee or agent of Tenant,
caused or allegedly caused by: (1) any cause whatsoever while that person or
property is in or on the Premises or in any way connected with the Premises or
with any improvements or personal property on the Premises; (2) some condition
of the Premises or some building or improvement on the Premises; (3) some act or
omission on the Premises of Tenant or any person in, on, or about the Premises
with the permission and consent of Tenant; or (4) any matter connected with
Tenant's occupation and use of the Premises.
8.2 LANDLORD'S HOLD HARMLESS CLAUSE:
Notwithstanding the provisions of Section 8.01 of this Lease, Tenant shall
be under no duty to indemnify and hold Landlord harmless from any liability,
claims, or damages arising because of Landlord's failure to make any repairs
required by this Lease to be made by Landlord or because of any negligence or
willful acts of misconduct by Landlord or by any person who is an agent or
employee of Landlord acting in the course and scope of its agency or employment.
Landlord agrees to indemnify, defend, protect, and hold Tenant free and harmless
from and against any liability, claims, or damages arising from or in connection
with Landlord's failure to make any repairs required by this Lease to be made by
Landlord or because of any negligence or willful acts of misconduct by Landlord
or by any person who is an agent or employee of Landlord acting in the course
and scope of its agency or employment.
ARTICLE 9
DEFAULT AND REMEDIES
9.1 REMEDIES ON TENANT'S DEFAULT:
If Tenant breaches this Lease or breaches this Lease and abandons the
Premises before the natural expiration of the term of this Lease, Landlord, in
addition to any other remedy given by law or equity, may:
(a) Continue this Lease in effect by not terminating
Tenant's right to possession of the Premises, in which case Landlord
shall be entitled to enforce all Landlord's rights and remedies under
this Lease, including the right to recover the rent specified in this
Lease as it becomes due under this Lease.
(b) Terminate this Lease and recover from Tenant:
(1) The worth, at the time of award, of the unpaid
rent that had been earned at the time of termination of the Lease;
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(2) The worth, at the time of award, of the amount
by which the unpaid rent that would have been earned after termination
of the Lease until the time of award exceeds the amount of rental loss
that Tenant proves could have been reasonably avoided;
(3) The worth, at the time of award, of the amount
by which the unpaid rent for the balance of the term after the time of
award exceeds the amount of rental loss that Tenant proves could be
reasonably avoided; and
(4) Any other amount necessary to compensate
Landlord for all damage approximately caused by Tenant's failure to
perform the obligations under this Lease; or
(c) Terminate the Lease and, in addition to any recoveries
Tenant may seek under paragraph (b) of this Section 9.01, bring an
action to reenter and regain possession of the Premises in the manner
provided by the laws of unlawful detainer then in effect in California.
9.2 TERMINATION BY LANDLORD:
No act of Landlord, including but not limited to Landlord's entry an the
Premises or efforts to relet the Premises, or the giving by Landlord to Tenant
of a notice of default, shall be construed as an election to terminate this
Lease unless a written notice of the Landlord's election to terminate is given
to Tenant or unless termination of this Lease is decreed by a court of competent
jurisdiction.
9.3 DEFAULT BY TENANT:
All covenants and agreements contained in this Lease are declared to be
conditions to this Lease and to the term hereby leased to Tenant. The occurrence
of any of the following shall constitute a material default and breach of this
Lease by Tenant:
(a) Tenant's failure to pay rent when due when the failure
continues for ten (10) business days after written notice to pay that
rent or surrender possession of the Premises is served on Tenant by
Landlord; or
(b) Any failure to perform any other covenant, condition, or
agreement contained in this Lease when the failure is not cured within
thirty (30) days after written notice of the specific failure is given
by Landlord to Tenant; or
(c) The bankruptcy or insolvency of Tenant, the making by
Tenant of any general assignment for
17
the benefit of creditors; the filing by or against Tenant of a petition
to have Tenant adjudged a bankrupt or of a petition for reorganization
or arrangement under the Bankruptcy Act (unless, in the case of a
petition filed against Tenant, it is dismissed within sixty (60) days);
the appointment of a trustee or receiver to take possession of
substantially all of Tenant's assets located at the Premises or of
Tenant's interest in this Lease, if possession is not restored to
Tenant within thirty (30) days; or the attachment, execution, or other
judicial seizure of substantially all of Tenant's assets located at the
Promises or of Tenant's interest in this Lease, when that seizure is
not discharged within thirty (30) days.
(d) The abandonment or vacating of the Premises by Tenant
(which, for purposes of this Lease, shall mean Tenant's failure to
occupy and operate the Premises for business for a period of at least
30 consecutive days).
9.4 NUISANCE:
Notwithstanding any provision to the contrary, including the permitted
uses of the Premises by the Tenant described in Section 4.01, Tenant shall not
commit or permit any act constituting a nuisance, whether such nuisance arises
from noise, odor, smoke. sewerage, chemical wastes or otherwise. Furthermore,
Tenant shall not obstruct or cause to be obstructed any public or private
roadway or sidewalk leading onto the Premises or any area adjacent thereto. The
commission of any act of nuisance, shall constitute a default by Tenant of the
terms of this Lease.
9.5 CUMULATIVE REMEDIES:
The remedies granted to Landlord in this Article 9 shall not be exclusive
but shall be cumulative and in addition to all other remedies now or hereafter
allowed by law or authorized in this Lease.
9.6 WAIVER OF BREACH:
The waiver by Landlord of any breach by Tenant of any of the provisions of
this Lease shall not constitute a continuing waiver or a waiver of any
subsequent default or breach by Tenant either of the same or a different
provision of this Lease.
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ARTICLE 10
MISCELLANEOUS
10.1 ASSIGNMENT AND SUBLETTING:
Tenant shall not encumber, assign, or otherwise transfer this Lease, any
right or interest in this Lease, or any right or interest in the Premises or any
of the improvements that may now or hereafter be constructed or installed on the
Premises without first obtaining the written consent of Landlord, which consent
shall not be unreasonably withheld. Tenant shall not sublet the Premises or any
part thereof, nor allow any other person, other than Tenant's agents, servants,
and employees, to occupy the Premises or any part of the Premises without the
prior written consent of Landlord, which consent shall not be unreasonably
withheld. Any encumbrance, assignment, transfer, or subletting without the prior
written consent of Landlord, whether voluntary or involuntary, by operation of
law or otherwise, is void and shall, at the option of Landlord, terminate this
Lease.
10.2 UTILITIES:
Tenant shall pay all charges incurred for the furnishing of gas,
electricity, water, telephone service, garbage or refuse service, and other
public utilities to the Premises during the term of this Lease. Landlord hereby
represents and warrants that all necessary utilities are in place and not
subject to assessment.
10.3 NOTICES:
Except as otherwise expressly provided by law, any and all notices or
other communications required or permitted by this Lease or by law to be served
on or given to either party to this Lease by the other party shall be in writing
and shall be deemed duly served and given when personally delivered to the party
to whom it is directed or to any managing employee or officer of that party or,
in lieu of personal service, when deposited in the United States mail,
first-class postage prepaid, addressed to Tenant at 000 Xxxx Xxxxxx, Xxxxx
Xxxxxxxx, Xxxxxxxxxx. 00000 or to Landlord at 000 Xxxx Xxxxxx, Xxxxx Xxxxxxxx,
Xxxxxxxxxx, 00000. Either party, Landlord or Tenant, may change its address for
purposes of this section by giving written notice of that change to the other
party in the manner provided in this section.
10.4 ATTORNEYS' FEES:
If any litigation, including arbitration proceedings, is commenced between
the parties to this Lease concerning the Premises, this Lease, or the rights and
duties of either in relation to this Lease, the party prevailing in that
litigation shall be entitled, in addition to any other relief that may be
granted in the litigation, to a reasonable sum as and for its attorneys' fees in
the litigation, which shall be determined by the court in that litigation or in
a separate action brought for that purpose.
10.5 BINDING OF HEIRS AND SUCCESSORS:
This Lease shall be binding on and shall inure to the benefit of the
heirs, executors, administrators, successors, and assigns of each Landlord and
Tenant, but nothing contained in this section shall be construed as a consent by
Landlord to any assignment of this Lease or any interest in this Lease by
Tenant.
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10.6 TIME OF THE ESSENCE:
Time is expressly declared to be of the essence in this Lease.
10.7 COMPLETE AGREEMENT:
This instrument constitutes the sole and only agreement between Landlord
and Tenant respecting the Premises, the leasing of the Premises to Tenant, and
the Lease terms contained in this Lease, and correctly sets forth the
obligations of Landlord and Tenant to each other as of its date. Any agreements
or representations respecting the Premises or their leasing by Landlord to
Tenant not expressly set forth in this instrument are null and void.
10.8 SEVERABILITY:
In the event that a court of competent jurisdiction finds any of the terms
of this Lease either partially or wholly invalid or unenforceable, for any
reason whatsoever, such holding shall have no effect on the remaining terms
contained herein not so held, and this Lease shall be construed, if possible, as
if such invalid or unenforceable terms had not been included herein.
10.9 GOVERNING LAW/VENUE:
The parties intend that in the event either party brings an action under
this Lease, such action shall be governed by the laws of the State of
California. Sole and proper venue for such action shall be the City and County
of Los Angeles, State of California.
10.10 QUIET ENJOYMENT:
Upon payment by Tenant of the rent and additional rent and the performance
of all the covenants, conditions and provisions on Tenant's part to be performed
under this Lease, Tenant shall have quiet enjoyment of the Premises for the
entire term of this Lease, subject to of the provisions of this Lease.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
dates set forth below.
WITNESSES:
DATED: December 1, 1997 SUMO HOLDINGS SACRAMENTO, LLC,
A CALIFORNIA LIMITED LIABILITY COMPANY:
----------------------------------
First Witness
By: /s/ X. XXXXXXXXXXXX
-------------------
X. XXXXXXXXXXXX
Its: Manager
---------------------------------- "LANDLORD"
Second Witness
FORD GRAPHICS GROUP, LLC,
A CALIFORNIA LIMITED LIABILITY COMPANY:
----------------------------------
First Witness
By: /s/ X. XXXXXXXXXXXX
-------------------
X. XXXXXXXXXXXX
Its: Manager
---------------------------------- "TENANT"
Second Witness
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EXHIBIT A
DESCRIPTION OF LEASED PROPERTY
Real property located at 0000 X Xxxxxx. Xxxxxxxxxx, Xxxxxxxxxx 00000 and
more precisely described as follows:
Parcel No. 1:
The West one-half of Lot 3, in the Block bounded by "V" and "W" 13th and
14th Streets of the City of Sacramento, according to the official map or plan
thereof.
Parcel No. 2:
The East one-half of Lot 3, in the Block bounded by "V" and "W" 13th and
14th Streets of the City of Sacramento, according to the official map or plan
thereof.
Parcel No. 3:
The North one-half of Lot 4, in the Block bounded by "V" and "W" 13th and
14th Streets of the City of Sacramento, according to the official map or plan
thereof.
Parcel No. 4:
The South one-quarter of Lot 4, in the Block bounded by "V" and "W" 13th
and 14th Streets of the City of Sacramento, according to the official map or
plan thereof.
Parcel No.. 5:
The North one-half of the South one-half of Lot 4, in the Block bounded by
"V" and "W" 13th and 14th Streets of the City of Sacramento, according to the
official map or plan thereof.
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