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EXHIBIT 10.13
STATE OF CALIFORNIA DEPARTMENT OF GENERAL SERVICES
REAL ESTATE SERVICES DIVISION
JOINT VENTURE BY-STATE LEASE AGREEMENT
LEASE COVERING PREMISES LOCATED AT LEASE NO.: X-0000
XXXXXXXXXXX XXXXXX XXXXX PRISON
00000 XXXXXX XXXX XXXX
XXXXXX,XX 00000
AGENCY
DEPARTMENT OF CORRECTIONS
This Lease, dated for reference purposes only, this first day of August 1998,
by and between the State of California, acting by and through its Director of
General Services, with the approval of the Department of Corrections
hereinafter called STATE, and Labor-to-Industry Inc., hereinafter called
LESSEE. The parties agree as follows:
WITNESSETH
The STATE, by virtue of Title 15, Article 9, Section 3480 of the California
Code of Regulations, has added the Joint Venture Program, which seeks to
contract with privately owned businesses in a unique cooperative venture to
produce goods or services.
Pursuant to Section 14672.16(a) of the Government Code, Proposition 139,
effective November 7, 1990, known as the "Prison Inmate Labor Initiative of
1990", the primary purposes of the Joint Venture Program are to establish
contracts that give priority to inmate employment which will retain or reclaim
jobs in California, support emerging California industries or create jobs for a
deficient labor market and further rehabilitation, provide vocational training,
develop job skills and qualify inmates for employment upon release from the
institution.
LESSEE agrees to enter into a cooperative venture with the STATE to manufacture
and produce goods at the Chuckawalla Valley State Prison (CVSP), utilizing and
hiring the services of inmates of the STATE in accordance with the terms and
conditions Stated in the Standard Agreement #CV98042, dated September 1, 1998,
between the California Department of Corrections (CDC) and the LESSEE.
DESCRIPTION 1. STATE does hereby lease to LESSEE, and
LESSEE hereby hires from STATE
approximately 20,300 (square feet) of
warehouse space, and approximately 16,000
(square feet) of space on C Facility for a
total of 36,300 square feet, located within
the boundaries of CVSP, situated in the
County of Riverside, State of California,
hereinafter called the Premises, as
outlined in red on Exhibits "A", "X-x" and
"B-2" incorporated herein and by this
reference, made a part hereof.
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TERM 2. The term of the Lease shall be for a period
of five (5) years, commencing on
September 1, 1998 and terminating on
August 31, 2003, with such rights of
termination as may be hereinafter expressly
set forth.
This Lease may be renewed in writing by the
parties for additional successive five (5)
year terms, which shall not exceed fifty
(50) years total.
The provisions of each renewal shall be
negotiated between the parties and are
subject to the Department of General
Services approval.
RENT 3. Effective December 1, 1998, the monthly
rental rate shall be SEVEN HUNDRED TWENTY
SIX DOLLARS AND NO CENTS ($726.00), payable
monthly, in advance.
Payments shall be made as follows:
Department of General Services
Attn.: Receivable Unit, PAL (#L-1724)
P. O. Xxx 000
Xxxxxxxxxx, XX 00000-0000
UTILITIES 4. a. LESSEE agrees to pay all water, electric
and other utility charges in connection
with LESSEE's use of the Premises during
the term of this Lease. STATE assumes no
liability for the existence or
non-existence nor service connection to
said utilities. Direct billing by CVSP will
be charged each month in arrears, based
upon estimated use, beginning on the first
day of each month starting October 1, 1998.
Payment shall be made directly to CVSP, in
person or mailed to the address as shown in
Paragraph 14 herein.
b. LESSEE acknowledges the existence of an
interruptible power supply agreement with
Southern California Edison. In the event of
a power loss, the LESSEE shall have the
same rate of commercial power recovery as
CVSP.
c. Installation, monthly billing,
maintenance and removal of any telephone
systems will be the sole responsibility of
the LESSEE.
d. Trash removal shall be the sole
responsibility of the LESSEE.
RENTAL ADJUSTMENT 5. It is hereby mutually agreed that,
notwithstanding anything to the contrary
herein contained and in the event the costs
to the STATE to furnish space, maintenance
and administrative services increase in any
one year period during the term hereof, the
monthly rental rate shall, at the option of
the STATE, be adjusted to include such
increase in costs, effective upon
commencement of the next following annual
anniversary date of the Lease.
The LESSEE's monthly rate for utilities may
be adjusted to include any increase in the
cost to the STATE for furnishing utilities.
STATE will give LESSEE written notice of
any increase in the utility rate thirty
(30) days prior to such date when said
increase shall become effective.
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TERMINATION 6. The parties hereto agree that either party
may terminate this Lease at anytime during
the term hereof by giving notice to the
other party in writing thirty (30) days
prior to the date when termination shall
become effective. Notice must be given in
accordance with the instructions contained
in paragraph 14 herein.
USE 7. LESSEE agrees to use the Premises for the
purposes of manufacturing of office
furnishings only and for no other purposes.
LESSEE's activities will be conducted
hereunder only in a manner agreed upon by
the STATE and the event any operation or
person is determined objectionable by the
Warden of said institution, LESSEE agrees
to discontinue such operation or remove
such person after notice thereof.
CANCELLATION 8. Any violation of the terms of this Lease or
of the rules and regulations of CVSP shall
be grounds for immediate cancellation of
the Lease and removal of the LESSEE.
DEFINITION OF ADULT 9. Adult Offender (AO), as used in this Lease,
OFFENDER is anyone under the care, custody, and
control of CDC.
LEASE COORDINATOR 10. The Warden of CVSP, or designee, is
appointed as the "Lease Coordinator" for
the institution during the term of this
Lease.
LEASE REVIEW 11. This Lease shall be subject to an annual
review by the STATE, the Lease Coordinator
and the LESSEE, who shall assure the STATE
the original purpose of the Lease is being
carried out and determine what, if any,
adjustments should be made in the terms and
conditions of this Lease.
HOLDING OVER 12. Any holding over after expiration of the
term of this Lease with the consent of
STATE expressed or implied, shall be deemed
to be a tenancy only from month-to-month.
Said month-to-month tenancy shall be
subject otherwise to all the terms and
conditions of this Lease so far as
applicable.
RECOVERY OF LEGAL FEES 13. If action be brought by STATE for the
recovery of any rent due under the
provisions hereof or for any breach hereof,
or to restrain the breach of any agreement
contained herein, or for the recovery of
possession of said Premises, or to protect
any right given to STATE against LESSEE,
and if STATE shall prevail in such action,
LESSEE shall pay to STATE such amount of
all costs and expenses including attorney's
fees in said action as the court shall
determine to be reasonable, which shall be
fixed by the court as part of the costs of
said action.
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NOTICES 14. All notices herein provided to be given or
which may be given by either party to the
other, shall be deemed to have been fully
given when made in writing and deposited in
the United States mail, certified and
postage prepaid, and addressed as follows:
To the LESSEE: Labor-To-Industry Inc.
Chuckawalla Valley
U.S. Technologies Inc.
0000 Xxxxxxx Xxxx, Xxxxx 000
Xxxxxxxx, XX 00000
To the STATE: Department of General
Services
Real Estate Services
Division
000 X Xxxxxx, Xxxxx 0000
Xxxxxxxxxx, XX 00000
To the STATE: Department of Corrections
(Institution) Chuckawalla Valley State
Prison
Attn.: Warden
X.X. Xxx 0000
Xxxxxx, XX 00000
The address to which notices may be mailed
to either party may be changed by written
notice given by subject party to the other,
but nothing herein contained shall preclude
the giving of any such notice by personal
service.
RIGHT OF ENTRY 15. During continuance in force of this Lease,
there shall be and is hereby expressly
reserved to STATE and to any of its
agencies, contractor agents, employees,
representatives or licensees, the right at
any and all times, and any and all places,
to temporarily enter upon said Premises for
STATE purposes.
FAILURE TO PERFORM 16. In the event of the failure, neglect, or
refusal of LESSEE to do or perform work, or
any part thereof, or any act or thing in
this Lease provided to be done and
performed by LESSEE, STATE shall, as its
option, have the right to do and perform
the same, and LESSEE hereby covenants and
agrees to pay STATE the cost hereof on
demand.
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CONDITION OF PREMISES 17. LESSEE accepts the Premises as being in good
order, condition and repair, unless
otherwise specified herein, provided,
however, that LESSEE shall conduct a final
walk through of the Premises prior to
occupancy. LESSEE further agrees that on
the last day of the term, or sooner
termination of this Lease, to surrender up
to STATE, the Premises with any
appurtenances or improvements in the same
condition as when received, reasonable use
and wear thereof and damage by act of God
excepted.
LESSEE has inspected said Premises
and it is agreed that the area stated
herein and outlined on Xxxxxxxx "X", "X-0",
and "B-2" is only approximate and the STATE
does not hereby warrant or guarantee the
actual area included hereunder.
LESSEE accepts the air compressor located in
C Facility at CVSP as is, and will be
responsible for its repair, maintenance and
certification.
COMPLIANCE 18. LESSEE agrees to maintain said Premises in
compliance with the sanitation laws and
regulations of the State of California, and
in compliance with all other laws of the
STATE, and the rules and regulations of
CVSP.
LESSEE shall, at his sole cost and expense,
comply with all of the laws and
requirements of all Municipal, State, and
Federal authorities now in force including,
but not limited to, the Mojave Desert Air
Quality Management District or which may
hereinafter be in force pertaining to the
Premises and the use of the Premises as
provided in this Lease.
ABANDONMENT 19. If the LESSEE abandons, vacates, surrenders,
or is dispossessed by process of law from
the Premises, any personal property
belonging to LESSEE and left on the
Premises shall be deemed to be abandoned,
at the option of the STATE.
EASEMENTS AND 20. This Lease is subject to all existing
RIGHTS-OF-WAY easements and rights of way. STATE further
reserves the right to grant additional
public utility easements as may be
necessary and LESSEE hereby consents to the
granting of any such easement. The public
utility will be required to reimburse
LESSEE for any damages caused by the
construction work on the easement area.
MAINTENANCE 21. a. STATE shall maintain Premises in
reasonable functional condition during the
term of this Lease.
b. Janitorial services will be provided by
LESSEE during the term of this Lease.
ALTERATIONS/REPAIRS 22. LESSEE shall not construct improvements upon
the Premises or make alterations hereto,
either temporary or permanent without first
having obtained written approval of STATE.
All improvements and alterations shall be
in compliance with the Public Health and
Safety Codes and shall conform to the
California Occupational Safety and Health
Standards.
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SURRENDER OF PREMISES 23. Upon termination of this Lease for any
cause, the LESSEE shall remove any and all
equipment and improvements of the LESSEE
and restore the entire Premises to its
condition prior to the execution of this
Lease, except however, the STATE may
approve, in writing, any deviation from
this requirement.
MEDICAL 24. With the exception of AO's, no medical
support will be provided to LESSEE or
LESSEE's employees by CVSP or by the STATE,
unless for life threatening emergencies.
PROHIBITED ITEMS 25. a. Since the Premises are situated on the
grounds of CVSP, the LESSEE will comply
with all rules and regulations adopted by
said Institution. No article or material
which the STATE considers as being
contraband shall be brought on the
Premises. Said rules prohibit, but are not
limited to: beer, alcoholic beverages,
narcotics, the possession or use of
firearms, explosives or edged weapons, or
restricted controlled substances. Any
willful violation of said rules and
regulations or of the terms of this Lease
will be grounds for immediate cancellation
of this Lease and removal of the LESSEE.
b. No cellular phones or two-way radio
systems will be used on institutional
grounds by LESSEE or LESSEE's employees.
Cordless phones and pagers will be allowed
only with prior approval of the warden.
c. Smoking is not allowed in or upon the
Premises.
HOLD HARMLESS 26. This Lease is made upon the express
condition that the State of California is to
be free from all liability and claims for
damages by reason of any injury to any
person or persons, including LESSEE, or
property of any kind whatsoever and to
whomsoever belonging including LESSEE, from
any cause or causes whatsoever while in,
upon, or in any way connected with the
Premises during the term of this Lease or
any occupancy hereunder, except those
arising out of the sole negligence of the
STATE. LESSEE agrees to defend, indemnify,
and save harmless the State of California
from all liability, loss, cost or
obligation on account of or arising out of
any such injury or loss, however occurring.
LESSEE further agrees to provide necessary
Workers Compensation Insurance for all non
AO employees of LESSEE upon said Premises
at the LESSEE's own cost and expense.
DAMAGE TO PROPERTY 27. Notwithstanding any other language to
the contrary, the STATE, its agents or
employees shall not be liable or
responsible for any damage to property or
persons on the Premises pursuant to this
Lease caused by acts of the AOs of the
STATE or by employees of CVSP while in the
performance of their duties in respect to
the AOs. LESSEE understands that the
Premises are a part of a correctional
institution and such possible damage or
injury is one of the risks of occupancy.
CVSP reserves the right to go on the
Premises for search and to preserve law and
order, or to perform any other act or acts
necessary or advisable for the welfare of
such AOs.
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INSURANCE 28. LESSEE shall furnish a Certificate of
Insurance with the STATE's Lease Number
indicated on the face of said certificate,
issued to STATE with amounts of Commercial
General Liability of at least $1,000,000
per occurrence and Fire Legal Liability of
at least $100,000 naming the State of
California, its officers, agents and
employees as additional insureds. Said
certificate of insurance shall be issued by
an insurance company with a rating which is
acceptable to the Department of General
Services, Office of Risk and Insurance
Management.
It is agreed that STATE shall not be liable
for the payment of any premiums or
assessments on the insurance coverage
required by this paragraph. The Certificate
of Insurance shall provide that the insurer
will not cancel the insured's coverage
without thirty (30) days prior written
notice to STATE. LESSEE agrees that the
insurance herein provided for shall be in
effect at all times during the term of the
Lease. In the event said insurance coverage
expires at any time or times during the
term of this Lease, LESSEE agrees to
provide STATE, at least thirty (30) days
prior to said expiration date, a new
Certificate of Insurance, evidencing
insurance coverage as provided for herein
for not less than one (1) year. New
Certificates of Insurance are subject to
the approval of the Department of General
Services. In the event LESSEE fails to keep
in effect at all times, insurance coverage
as herein provided, STATE may, in addition
to any other remedies it may have,
terminate this Lease upon the occurrence of
such event.
LOSSES 29. The STATE will not be responsible for
losses, or damage to personal property,
equipment or material of the LESSEE or
LESSEE's employees or agents. All losses
shall be reported to the STATE immediately
upon discovery.
TAXES/ASSESSMENTS 30. LESSEE agrees to pay all lawful taxes,
assessments, or charges which at anytime
may be levied upon interest in this
agreement. It is understood that this Lease
may create a possessory interest subject to
property taxation and LESSEE may be subject
to the payment of property taxes levied on
such interest.
NON-DISCRIMINATION 31. LESSEE agrees that it will not discriminate
against any employee or applicant for
employment because of race, color, religion,
ancestry, national origin, sex, age or
physical handicap. LESSEE agrees to ensure
that applicants are employed and that
employees are treated during employment,
without regard to their race, color,
religion, ancestry, national origin, sex,
age or physical handicap. (See California
Government Code Sections 12920-12994 for
further details.)
DEBT LIABILITY 32. STATE will not be liable for any debts or
claims that arise from the DISCLAIMER
operation of this Lease.
PARTNERSHIP DISCLAIMER 33. LESSEE and any and all agents and employees
of LESSEE shall act in an independent
capacity and not as officers or employees
of the STATE. Nothing herein contained
shall be construed as constituting the
parties herein as partners.
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ENVIRONMENTAL 34. A. The LESSEE agrees to comply with all
COMPLIANCE applicable Federal, State and local
regulations pertaining to hazardous
materials' use, storage and disposal. The
LESSEE shall indemnify and hold harmless
the STATE and its agents and
representatives for any violation of
environmental and/or hazardous materials
law caused by LESSEE or LESSEE's
representatives. Furthermore, LESSEE shall
reimburse the STATE for any and all costs
related to investigation, clean up and/or
fines incurred by the STATE for
environmental regulation non-compliance by
the LESSEE or LESSEE's representative.
B. If the LESSEE is required to prepare a
Business Plan, as specified by Health and
Safety Code Section 25500 et seq., or a
Hazardous Waste Contingency Plan, as
specified in 22 CCR 66264.51 et seq., then
a copy of the plan shall be submitted first
to the Associate Warden, Business Services.
C. If LESSEE or LESSEE's representative
generates any regulated hazardous wastes on
the STATE's property, LESSEE agrees to
dispose of such wastes in accordance with
all applicable Federal, State and local
regulations. Copies of all hazardous waste
manifests or disposal certificates shall be
submitted to the Associate Warden, Business
Services.
D. Storage of hazardous waste shall comply
with 22 CCR 66264 et al., and all
applicable fire regulations. The LESSEE
shall not apply to become a "Permitted"
hazardous waste storage facility without
permission from the Associate Warden,
Business Services.
E. The STATE or its representatives
reserves the right to inspect all areas
which are Leased or rented by LESSEE, for
the purpose of verifying environmental
compliance.
F. The LESSEE shall provide copies of
Material Safety Data Sheets (MSDS) for all
hazardous materials used on STATE's
property to the Associate Warden, Business
Services.
G. Any violation in Federal, State or local
environmental law including but not limited
to the Mojave Desert Air Quality Management
District, deemed serious by the STATE will
be grounds for termination of Lease in
accordance with applicable sections herein.
Termination of Lease by either party or
evacuation of Leased property by LESSEE
shall not relieve LESSEE of environmental
or hazardous materials related liabilities
incurred by the STATE during LESSEE's
occupancy or incurred as a result of
LESSEE's actions.
PROTECTION OF PREMISES 35. LESSEE shall not commit or suffer to be
committed any waste or nuisance upon the
Premises and further agrees to exercise due
diligence in the protection of the Premises
against damage or destruction by fire or
other cause at all times.
There shall be no hunting on the Premises.
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MINERAL RIGHTS 36. LESSEE agrees not to interfere, in any way,
with the interests of any person or persons
that may presently, or in the future, hold
oil, gas, or other mineral rights upon or
under said Premises; nor shall LESSEE, in
any way, interfere with the rights of
ingress and egress of said interest
holders.
DESTRUCTION 37. If fire or other casualty totally
destroys the Premises, this Lease shall
terminate. If the building is not replaced
by the LESSEE's insurance company, any
monies received from LESSEE's insurance
policy for the building shall be conveyed
to the STATE. This applies to the building
only and does not include LESSEE's personal
property, equipment or material of the
LESSEE or LESSEE's employees or agents.
SUBLET 38. LESSEE shall not assign this Lease in any
event and shall not sublet the Premises or
any part thereof and will not permit the
use of the Premises by anyone other than
the LESSEE without prior written consent of
the STATE, including approval by the
Department of General Services, which may
be withheld for any reason.
MUTUAL CONSENT 39. Notwithstanding anything herein contained to
the contrary, this Lease may be terminated,
and the provisions of this Lease may be
altered, changed, or amended by mutual
consent in writing of the parties hereto.
Any amendment is subject to the approval by
the Department of General Services.
BINDING 40. The terms and provisions of this agreement
shall extend to and shall bind and inure to
the benefit of the heirs, representatives,
assigns, and successors in interest of the
parties hereto.
SECTION HEADINGS 41. All section headings contained herein are
for convenience of reference only and are
not intended to define or limit the scope
of any provision of this Lease.
ESSENCE OF TIME 42. Time is of the essence for each and all of
the provisions, covenants and conditions
of this agreement.
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IN WITNESS WHEREOF, this Lease has been executed by the parties hereto as of
the date first hereinabove written.
STATE OF CALIFORNIA LESSEE: LABOR-TO-INDUSTRY INC.
DEPARTMENT OF GENERAL SERVICES
REAL ESTATE SERVICES DIVISION BY: /s/
Approval Recommended:
--------------------------------
BY: /s/ TITLE: President
-------------------------------- -------------------------
TITLE: Real Estate Officer TELEPHONE: 000-000-0000
----------------------------- -------------------------
APPROVED:
BY: /s/ Xxxxxx X. Xxxxx
--------------------------------
TITLE: Senior Real Estate Officer
-----------------------------
DATE: 9/10/98
-----------------------------
APPROVED:
STATE OF CALIFORNIA
DEPARTMENT OF CORRECTIONS
BY: /s/ Xxxx Xxxxxxx
--------------------------------
Xxxx Xxxxxxx, Chief
TITLE: Business Management Branch
-----------------------------
STATE OF CALIFORNIA
DEPARTMENT OF CORRECTIONS
CHUCKAWALLA VALLEY STATE PRISON
BY: /s/
--------------------------------
TITLE: Warden
-----------------------------
TELEPHONE: (000) 000-0000 X0000
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[MAP]
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EXHIBIT X-0
Xxxxxxxxxxx Xxxxxx Xxxxx Xxxxxx
XXX WAREHOUSE
Approximately 20,295 sq. ft. of floor space
One 18 x 14 roll-up door
One 12 x 12 roll-up door with dock access
One access door off of dock
Approximately 476 sq. ft. of office space (including restrooms)
[MAP]
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EXHIBIT B-2
Chuckawalla Valley State Prison
[MAP]
Approximately 16,000 sq. ft. floor space PIA SEWING
One roll-up door accessing dock
