{"id":41790,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/1480-drew-avenue-davis-ca-lease-jim-joseph-revocable-trust.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"1480-drew-avenue-davis-ca-lease-jim-joseph-revocable-trust","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/land\/1480-drew-avenue-davis-ca-lease-jim-joseph-revocable-trust.html","title":{"rendered":"1480 Drew Avenue (Davis, CA) Lease &#8211; Jim Joseph Revocable Trust and AgraQuest Inc."},"content":{"rendered":"<pre>CONFIDENTIAL\n\n                                     LEASE\n                                     -----\n\n          LEASE, dated July 8, 1998, between JIM JOSEPH, not individually, but\nas TRUSTEE FOR THE JIM JOSEPH REVOCABLE TRUST, having an address c\/o Interland,\n1480 Drew Avenue, Suite 100 Davis, California 95616 (\"Lessor\") and AGRAQUEST,\nINC., a Delaware corporation, having an address at 1530 Drew Avenue, Davis,\nCalifornia 95616 (\"Lessee\")\n\n          WHEREAS, Lessor is the owner of that certain parcel of real Premises\nconsisting of approximately 1.28 acres located in the City of Davis, County of\nYolo, and State of California, as more particularly described in Exhibit A\n                                                                 ---------\nannexed hereto and made a part hereof (the \"Land\"); and\n\n          WHEREAS, Lessor is constructing on the Land, in accordance with the\nexhibits and outline described in Exhibit B annexed hereto and made a part\n                                  ---------                               \nhereof (the \"Site Plan\"), a building that will contain approximately 12,960\nsquare feet of gross floor area, to be known as 1530 Drew Avenue (the\n\"Building\"); and certain tenant improvements therein in accordance with the\nplans and specifications described in Exhibit D annexed hereto, as the same may\n                                      ---------                                \nbe modified pursuant to Paragraph 3.1 below.  The Land, the Building and the\nTenant Improvements (defined below) are collectively referred to hereinafter as\nthe \"Premises\"; and\n\n          WHEREAS, Lessor is willing to lease to Lessee the Premises on the\nterms set forth.\n\n          NOW, THEREFORE, Lessor and Lessee hereby agree as follows:\n\n          1.   Demise.\n               ------ \n\n                     Lessor hereby leases to Lessee and Lessee hereby leases\nfrom Lessor (a) the Building, which shall include an area of approximately\n12,960 square feet of gross floor area, as shown on the floor plan (the \"Floor\nPlan\") annexed hereto as Exhibit C, (b) the Tenant Improvements and the\n                         --------- \nexclusive use of the entire area of the Land shown on the site plan annexed \nhereto as Exhibit B (the \"Site Plan\").\n          ---------     \n\n          2.   Term.\n               ---- \n\n               2.1   The term of this Lease shall be a period of ten (10) years,\ncommencing on the date (the \"Commencement Date\") on which the following event\nshall have occurred: (a) Lessor shall have received a final or temporary final\ncertificate of occupancy or similar governmental authorization for the Building\n(including the Tenant Improvements, as hereinafter defined).\n\n               2.2   Upon the satisfaction of the conditions described in\nParagraph 2.1 above, Lessor and Lessee shall execute a Notice of Commencement\nDate specifying the actual Commencement Date of the Lease, in a form to be\napproved by Lessor and Lessee.\n\n               2.3   On the Commencement Date of this Lease, Lessee shall pay to\nLessor a deposit in the amount of One Hundred Eighty Five Thousand Seven Hundred\nDollars, ($185,700.00). Provided Lessee is in compliance with all terms and\nprovisions of this Lease, and is not in default hereunder, Lessor shall release\nto Lessee one quarter of the deposit, or Forty Six Thousand Four Hundred and\nTwenty-five Dollars, ($46,425.00), at the end of the 36th month, the 48th month,\nthe 60th month and the 72nd month so that the total deposit in the amount of\n($185,700.00) shall be returned to Lessee by the end of the 72nd month. The\ndeposit shall be placed by Lessor into one-year interest earning certificates of\ndeposit at Wells Fargo Bank or Bank of America, and annual interest shall be\npaid to Lessee within thirty days of the expiration of each one-year certificate\nof deposit.\n\n                                       1\n\n \n          3.   Construction of Tenant Improvements.\n               ----------------------------------- \n\n               3.1   (a)  Lessor shall construct at its sole cost and expense\nthe Building, in accordance with Exhibit B annexed hereto. Lessor shall also\n                                 ---------\nconstruct in the Building at its sole cost and expense except as specifically\nprovided herein, the Tenant Improvements in accordance with the plans and\nspecifications described in Exhibit D annexed hereto, as the same may be\n                            --------- \nmodified in accordance with this Paragraph 3.1 (the \"Plans and Specifications\"),\nwhich Plans and Specifications have been approved by Lessor and Lessee. (Such\nconstruction of the Building and the Tenant Improvements is hereinafter referred\nto as the \"Work\".)\n \n                     (b)  Lessor shall file the Plans and Specifications with\nthe appropriate governmental authorities and shall take whatever action shall be\nnecessary (including paying all filing fees and other costs, and cooperating\nwith Lessee in making any required modifications of the Plans and\nSpecifications) to obtain and maintain all governmental permits and\nauthorizations which may be required in connection with the Work.\n\n                     (c)  Lessor shall, with all due diligence, perform and\ncomplete the Work in a good and workmanlike manner, with only new materials, and\nfree of all mechanics', materialmen's and other liens or claims. Lessor shall\nconstruct the Tenant Improvements according to Plans and Specifications approved\nby Lessee.\n\n                     (d)  In the performance of the Tenant Improvements, Lessor\nshall use all reasonable efforts to conform with the preliminary budget of\n$560,000.00 for the Tenant Improvements. If the final cost of the Tenant\nImprovements, including all necessary permits and design fees, exceeds the total\nallowance of $400,000.00, the additional cost shall be paid by Lessee to Lessor,\nprior to the Commencement of the term of this Lease.\n\n                     (e)  For the purposes of this Lease, the term \"Tenant\nImprovements\" shall be deemed to include only the items identified in Exhibit D\n                                                                      ---------\nannexed hereto. All other improvements necessary for or related to the Premises\nshall be deemed to be \"Building\" improvements as generally depicted in Exhibit B\n                                                                       ---------\nannexed hereto.\n\n                     (f)  Tenant Improvement construction cost shall be deemed\nto mean only the aggregate of the following costs incurred by Owner in\nconnection with the Work:\n\n                          (i)     Payments made to the general contractor,\nsubcontractors, materialmen, and suppliers;\n  \n                          (ii)    All fees, and all permits, licenses and\ninspection costs paid to governmental entities exercising jurisdiction over the\nWork;\n\n                          (iii)   Fees for engineers, architects and other\nreasonably required professional consultants;\n\n                          (iv)    Utility connection fees;\n\n                          (v)     Signage, for interior and as required by code.\n\n               3.2   Lessor will permit Lessee and Lessee's agents, suppliers,\ncontractors and workmen to enter the Building prior to the Commencement Date to\nenable Lessee, at Lessee's sole expense, to install telephones, computers, alarm\nsystems and certain other fixtures and equipment as may be required by Lessee to\nmake the Building ready for Lessee's occupancy, provided that Lessee and its\nagents, contractors, workmen and suppliers shall exercise commercially\nreasonable efforts not to materially\n\n                                       2\n\n \ninterfere with or delay the completion of construction of the Building or the\nTenant Improvements to be done by Lessor, and to avoid material interference\nwith any other activities of Lessor on the Land. If Lessor shall reasonably\ndetermine that any such material interference or delay has been or may be\ncaused, Lessor shall notify Lessee in writing thereof, whereupon Lessee shall\nexercise commercially reasonable efforts to cause a termination or modification\nof the activities which have caused, or may cause, any such material\ninterference or delay for as long as and to the extent as shall reasonably be\nnecessary. If Lessee shall fail to cause a termination or modification of such\nactivities, Lessor shall have the right, on written notice to Lessee, to cause\nLessee or such agent, contractor, workman or supplier causing such material\ninterference or delay to leave the Building for as long as and to the extent\nreasonably necessary to bring about a termination or modification of those\nactivities which have caused, or may cause, any such material interference or\ndelay. Lessee agrees that any such entry into the Building shall be at risk and\nLessor shall not be liable in any way for any injury, loss or damage which may\noccur to any of Lessee's property or Lessee's installations made in the\nBuilding, unless such injury, loss or damage shall have been proximately caused\nby the negligence, gross negligence or intentional misconduct of Lessor or any\nagent, employee, contractor, subcontractor, licensee or invitee of Lessor.\nSubject to the conduct of Lessor referenced immediately above, Lessee agrees to\nindemnify, defend and hold Lessor harmless from and against all liabilities,\ncosts, damages, fees and expenses arising out of the activities of Lessee or its\nagents, contractors, suppliers or workmen in or about the Building prior to the\nCommencement Date. In addition, prior to the initial entry to the Building by\nLessee and by each agent, contractor, supplier or workman of Lessee pursuant to\nthis Paragraph 3.2, Lessee shall furnish Lessor with certificates evidencing\npolicies of insurance covering Lessor as an insured party with the following\ncoverages and in the following amounts: (i) Combined Single Limit, Bodily Injury\nand Premises Damage Insurance in an amount not less than $1,000,000.00 per\noccurrence and $2,000.000.00 general aggregate; and (ii) Workers' Compensation\nInsurance in the amount of the statutory maximum with an employees liability\ncoverage of at least $1,000,000.00.\n\n          4.   Rent.\n               ----\n\n               4.1   (a)  Lessee shall pay to Lessor as rent during the term of\nthis Lease, the sum of $1,857,000.00 payable in advance in equal monthly\ninstallments on or before the first day of each month during the term hereof.\nThe monthly rent for the first twelve months of the Lease shall be $15,475.00\nper month. Said rent shall be subject to adjustment as provided in Subparagraph\n(b) of this Paragraph 4, and shall be in addition to all other amounts\n(including, without limitation, real property taxes and assessments, utilities,\nand maintenance of the Premises, Parking Area and Common Area) required to be\npaid Lessee pursuant to the provisions of this Lease.\n \n                     (b)  On the first anniversary date of the Commencement Date\n(or, in the event said first anniversary date occurs on a date other than the\nfirst day of a calendar month, on the first day of the thirteenth full calendar\nmonth of the term of this Lease,) and on each succeeding anniversary date\nthereof, the annual rent for the next succeeding twelve-month period of the term\nof this Lease shall be increased by the percentage increase, if any, in the\nrevised Consumer Price Index for All Urban Consumers--San Francisco, Oakland and\nSan Jose Metropolitan Area, for all items (1982-84= 100) as published by the\nUntied States Department of Labor, Bureau of Labor Statistics, using the\nConsumer Price Index for the month and year in which the Commencement Date\noccurs, as the base with which all future comparisons will be made. In no event,\nhowever, shall the annual rent be less than the amount paid in the previous\nyear. In the event the index specified above is either unavailable or is no\nlonger published, the most comprehensive official index then published by the\nUnited States Department of Labor, Bureau of Labor Statistics which mostly\nclearly approximates the Index specified above shall be substituted in place\nthereof. The rental increase referred to herein shall be calculated on a\ncumulative basis, but in no event will it exceed Four Percent (4%) nor be less\nthan Two Percent (2%) in any one lease year.\n\n                                       3\n\n \n                     (c)  If the term of this Lease commences on a date other\nthan the first day of a calendar month, rent for the period from the date of\ncommencement of the term hereof through the last day of the calendar month in\nwhich such term commences shall be prorated on the basis of a thirty-day month,\nand rent for the first full or fractional month of the term of this Lease shall\nbe payable on the date of commencement of said term. In the event the term of\nthis Lease ends on a day other than the last day of the calendar month, rent for\nthe period from the first day of the last calendar month of such term to the end\nof such term shall be prorated on the basis of a thirty-day month.\n\n                     (d)  The installments of the rent specified herein shall be\npaid, without deduction or offset, and without prior notice or demand to Lessor\nat 1480 Drew Avenue, Suite 100, Davis, California 95616, or at such other\naddress as Lessor may from time to time specify by written notice to Lessee. All\namounts of money payable by Lessee to Lessor hereunder, if not paid when due,\nshall bear interest from the due date until paid at the rate of 10% per annum.\n\n          5.   First Right of Refusal.\n               ---------------------- \n\n               5.1   Provided that Lessee is not in default under this Lease,\nLessor hereby grants to Lessee the exclusive right, at Lessee's option, to\nnegotiate a lease for a building on the remaining unimproved portion of Lot 6 of\nUniversity Research Park. Upon receipt by Lessor of a written offer by any party\nfor purchase or build-to-suit of the remainder of Lot 6, or should Lessor elect\nto build a speculative building, Lessor shall notify Lessee, in writing, by\ncertified mail, whereupon Lessee shall have sixty (60) days from the date such\nnotice is mailed in which to exercise Lessee's right to negotiate a lease for\nsaid remainder of Lot 6. Lessee shall exercise its right to negotiate a lease by\nnotifying Lessor, in writing, and by certified mail, within the initial sixty\n(60) day period. In the event Lessee fails or declines to exercise its right of\nfirst refusal to negotiate a lease for said lot, Lessor shall be free to enter\ninto lease negotiations with other interested parties. Lessee's rental rate per\nsquare foot for any additional building or facility must exceed the rental rate\nper square foot of the written offer by another party. In the event Lessor and\nLessee enter into lease negotiations and terms mutually agreeable to the parties\ncannot be reached within an additional sixty (60) days, commencing upon Lessor's\nreceipt of Lessee's intent to exercise this first right of refusal, Lessor shall\nbe free to enter into lease negotiations with other interested parties.\n\n               5.2   Lessee shall pay all holding costs associated with the\nentirety of Lot 6, including, but not limited to, real property taxes, bonds,\nlandscaping, and City of Davis service fees. In the event Lessor elects to cause\nLot 6 to be divided and a parcel map to be recorded, Lessee's holding costs\nshall be reduced according to its prorata share. Lessor shall be solely liable\nfor all costs associated with a parcel lot split.\n\n          6.   Use; Compliance with Law: Condition of the Premises.\n               --------------------------------------------------- \n\n               6.1   The Building shall be used and occupied only for office,\nlight assembly, research, and related purposes, or any other use which is\nreasonably comparable, and for no other purpose. The Parking Area shall be used\nonly for the parking of automobiles by Lessee, or Lessee's employees, invitees\nor guests, and for vehicular ingress and egress, and only as an incident to\nLessee's use and occupation of the Building. The Common Area (exclusive of any\nlandscaped areas) shall be used only for pedestrian circulation and as eating\nand break areas by Lessee, or Lessee's employees, invitees or guests, only as an\nincident to Lessee's use and occupation of the Building.\n\n               6.2   (a)  Lessor warrants to Lessee that the Premises, in its\nstate existing on the Commencement Date, shall not violate any covenants or\nrestrictions of record, or any applicable building codes, regulations or\nordinances in effect on the Commencement Date. In the event it is determined\nthat this warranty has been violated, then it shall be the obligation of the\nLessor, after written notice from Lessee, at Lessor's sole cost and expense, to\nrectify promptly any such violation. In the event Lessee does not give to Lessor\nwritten notice of the violation of this warranty within one (1) year after the\n\n                                       4\n\n \nCommencement Date, the correction of same (other than Latent Defects) shall be\nthe obligation of Lessee at Lessee's sole cost subject to Paragraph 6.2 (b)\nbelow.\n \n                     (b)  Except as provided in Paragraph 6.2 (a), Lessee shall,\nat Lessee's expense, comply promptly with all applicable statutes, ordinances,\nrules, regulations, orders, covenants, and restrictions of record, and\nrequirements in effect during the term or any part of the term hereof,\nregulating the use by Lessee of the Building (collectively, \"Legal\nRequirements\") except that Lessee shall not be required to make any capital\nimprovements of the Premises or the Building, or any alterations of the\nstructure, foundation, exterior walls or exterior roof of the Building, in order\nto so comply. Except to the extent set forth in the preceding sentence, Lessor\nshall, at its sole cost and expense, comply with all present and future\nregulations, rules, laws, ordinances, and requirements of all governmental\nauthorities (including, without limitation state, municipal, county and federal\ngovernments and their departments, bureaus, boards and officials) applicable to\nthe Building or Premises. Lessee shall not use nor permit the use of the\nBuilding in any manner that will create waste or a nuisance.\n\n                     (c)  (i)     Lessee shall have the right after prior\nwritten notice to Lessor, to contest, by appropriate legal proceedings\ndiligently conducted in good faith, as its own cost and expense, the validity or\napplication of any Legal Requirement with which Lessee is required to comply,\nprovided that: \n\n                                  (A)  Such contest shall not subject Lessor to\nany criminal penalty; and\n\n                                  (B)  Lessee shall obtain and maintain during\nthe pendency of any such contest a bond (or other security satisfactory to\nLessor) in form and amount and issued by a surety company reasonably\nsatisfactory to Lessor, indemnifying and protecting Lessor, the Land and the\nBuilding, from and against any and all damages, expenses, losses, injuries,\nfees, including, but not limited to, reasonable attorneys' fees, penalties,\nactions, causes of action, suits, costs, claims or judgments arising from such\ncontest or Lessee's compliance with any such Legal Requirements.\n\n                          (ii)    Lessor shall execute and deliver reasonably\nappropriate papers which may be necessary to permit or enable Lessee so to\ncontest the validity or application of any such Legal Requirement, provided\nLessor shall be reasonably satisfied with the contents of such papers and Lessee\nshall indemnify and save Lessor, the band and the Building, harmless from any\ncosts and expenses in connection therewith including, but not limited to,\nreasonable attorneys' fees.\n\n               6.3   (a)  Lessor shall deliver the Building to Lessee clean and\nfree of debris on the Commencement Date, and Lessor further warrants to Lessee\nthat the plumbing, lighting, air conditioning, heating and loading, doors in the\nBuilding shall be in good operating condition on the Commencement Date. In the\nevent that it is determined that this warranty has been violated, then it shall\nbe the obligation of Lessor, after receipt of written notice from Lessee setting\nforth with specificity the nature of the violation, at Lessor's sole cost, to\nrectify promptly such violation. Lessee's failure to give such written notice to\nLessor within one (1) year after the Commencement Date shall cause the\nconclusive presumption that Lessor has complied with all of Lessor's obligations\nunder this Paragraph 6.3 (other than with respect to Latent Defects).\n\n                     (b)  Except as otherwise provided in this Lease, Lessee\nhereby accepts the Building in its condition existing as of the Commencement\nDate, subject to all applicable zoning, municipal, county and state laws,\nordinances and regulations governing and regulating the use of the Building, and\nany covenants or restriction of record, and accepts this Lease subject thereto\nand to all matters disclosed thereby and by any exhibits attached hereto. Lessee\nacknowledges that neither Lessor nor Lessor's agent has made any representation\nor warranty as to the present or future suitability of the Building for the\nconduct of Lessee's business.\n\n                                       5\n\n \n          7.   Maintenances: Repairs and Alterations.\n               ------------------------------------- \n\n               7.1   (a)  Lessee shall keep in good order, condition and repair\nthe (i) Building and every part thereof, except for the foundation and the roof,\nwhich shall be Lessor's responsibility, including, without limiting the\ngenerality of the foregoing, all plumbing, heating, air conditioning (Lessee\nshall procure and maintain, at Lessee's expense, an air conditioning system\nmaintenance contract), ventilating, electrical and lighting systems, and all\nequipment, fixtures, walls (interior and exterior), ceilings, floors, windows,\ndoors, plate glass and skylights; (ii) the Parking Area; and (iii) the Common\nArea, including, without limitation, all landscaping and other improvements on\nthe Common Area. Lessee shall perform any and all roof maintenance necessary to\nkeep drains flowing. Lessor shall repair roof leaks or other necessary roof\nrepairs and shall be responsible for any repair or defect in the foundation. To\nfacilitate the performance by Lessee of those obligations of Lessee arising\nunder this Paragraph 7.1, on the Commencement Date, Lessor shall assign to\nLessee (to the extent assignable) all of Lessor's right, title and interest in\nand to all contracts, warranties and guaranties made by or received from any\nthird party with respect to the Building, the Parking Area and the Common Area\n(collectively, the \"Guaranties\").\n\n                     (b)  All of Lessee's obligations to maintain and repair\nshall be accomplished at Lessee's sole expense. If Lessee fails to maintain and\nrepair the interior of the Premises, Lessor may on ten (10) days prior notice,\nexcept that no notice shall be required in case of emergency, enter the Premises\nand perform such repair and maintenance on behalf of Lessee. In such case,\nLessee shall reimburse Lessor for all costs so incurred within thirty (30) days\nof receipt of a written demand therefor.\n\n               7.2   On the Expiration Date, or on any sooner termination of\nthis Lease in accordance with the terms hereof, Lessee shall surrender the\nBuilding, the Parking Area and the Common Area to Lessor in the same condition\nas when received, ordinary wear and tear excepted, clean and free of debris.\nLessee shall repair any damage to the Building, the Parking Area and the Common\nArea occasioned by the removal of Lessee's trade fixtures, furnishing and\nequipment. Lessee shall leave the air lines, power panels, electrical\ndistribution systems, lighting fixtures, air conditioning and plumbing in the\nBuilding in good operating condition, ordinary wear and tear excepted.\n\n               7.3   If Lessee fails to perform Lessee's obligations under this\nParagraph 7, Lessor may, at its option (but shall not be required to), enter\nupon the Building, after ten (10) days' prior written notice to Lessee (except\nin the case of an emergency, in which case no notice shall be required), to\nperform such obligations on Lessee's behalf, and the cost thereof together with\ninterest thereon at the annual rate of two percent (2%) in excess of the Wells\nFargo Prime Rate shall become due and payable as additional rental to Lessor\ntogether with Lessee's next rental installment. Notwithstanding anything to the\ncontrary contained in this Paragraph 7.3, in the event that any maintenance or\nrepairs required to be performed by Lessee pursuant to Paragraph 7.1 above\ncannot reasonably be completed within ten (10) days after Lessee's receipt of\nLessor's notice with respect therein, Lessor shall not be permitted to exercise\nits right to perform such maintenance and repairs so long as Lessee shall have\npromptly commenced to perform such maintenance or repair obligation after\ndiscovery of the necessity therefor, Lessee at all times exercises commercially\nreasonable efforts to prosecute such maintenance or repairs to completion as\npromptly as possible, and Lessee completes such maintenance or repairs within\nninety (90) days after its discovery of the need therefor.\n\n               7.4   Except for the obligations of Lessor under Paragraphs\n6.2(a), 6.3(a), 9 and 14, and except for any damage caused by Lessor or any of\nLessor's agents, employees, contractors, suppliers, workmen, invitees or\nlicensees, it is intended by the parties hereto that Lessor have no obligation,\nin any manner whatsoever, to repair and maintain the Building or the equipment\ntherein, whether structural or non-structural, the Parking Area or the Common\nArea, all of which obligations are intended to be that of the Lessee under\nParagraph 7.1 hereof. Lessee expressly waives the benefit of any statute now or\nhereinafter in effect which would otherwise afford Lessee the right to make\nrepairs at Lessor's expense or to terminate this Lease because of Lessor's\nfailure to keep the Building, the Parking Area, and\/or the Common Area in good\norder, condition and repair.\n\n                                       6\n\n \n               7.5   (a)  Lessee shall not, without Lessor's prior written\nconsent, make any alterations, improvements or additions (collectively,\n\"Alterations\") in on or about the Building other than non-structural\nAlterations. In any event, except for the installation of any sign thereon,\nLessee shall make no change or alteration to the exterior of the Building\nwithout Lessor's prior written consent. Lessor may require that Lessee remove\nany or all of said Alterations, including, without limitation, any signs\ninstalled on the Building, at the expiration of the term, and restore the\nBuilding to its prior condition, normal wear and tear excepted. Should Lessee\nmake any Alterations requiring Lessor's prior approval without such approval,\nLessor may require that Lessee remove any or all of the same at Lessee's sole\ncost and expense.\n\n                     (b)  Any Alterations in or about the Building that Lessee\nshall desire to make and which require the consent of the Lessor shall be\npresented to Lessor in written form, with proposed detailed plans. If Lessor\nshall give its consent, the consent shall be deemed conditioned upon Lessee\nacquiring, if required, a permit to make such Alterations from appropriate\ngovernmental agencies, the furnishing of a copy thereof to Lessor prior to the\ncommencement of the work and the compliance by Lessee with all conditions of\nsaid permit in a prompt and expeditious manner.\n\n                     (c)  Lessee shall pay, when due, all claims for labor or\nmaterials furnished or alleged to have been furnished to or for Lessee at or for\nuse in the Building, which claims are or may be secured by any mechanic's or\nmaterialmen's lien against the Building, or any interest therein. Lessee shall\ngive Lessor not less than ten (10 days written notice prior to the commencement\nof any work in the Building, and Lessor shall have the right to post notices of\nnon-responsibility in or on the Building as provided by law. If Lessee shall, in\ngood faith, contest the validity of any such lien, claim or demand, then Lessee\nshall, at its sole expense, defend itself and Lessor against the same and shall\npay and satisfy any adverse judgment that may be rendered thereon before the\nenforcement thereof against Lessor or the Land, upon the condition that if\nLessor shall require, Lessee shall furnish to Lessor a surety bond reasonably\nsatisfactory to Lessor in an amount equal to such contested lien, claim or\ndemand. In addition, Lessor may require Lessee to pay Lessor's reasonable\nattorneys' fees and costs in participating in such action if Lessor shall decide\nit is in its best interest to do.\n\n                     (d)  Unless Lessor requires their removal, as set forth in\nParagraph 7.5(a), all Alterations (including, without limitation, the Tenant\nImprovements) which may be made on or in the Building, shall become the property\nof Lessor and remain upon and be surrendered with the Building at the expiration\nof the term. Notwithstanding the provisions of this Paragraph 7.5(d), Lessee's\nmachinery and equipment, other than that which is affixed to the Building so\nthat it cannot be removed without material damage to the Building, shall remain\nthe property of Lessee and may be removed by Lessee subject to the provisions of\nParagraph 7.2.\n \n               8.1   Lessee shall, at Lessee's expense, obtain and keep in force\nduring the term of this Lease a policy of Combined Single Limit, Bodily Injury\nand Property Damage insurance insuring Lessor and Lessee against any liability\narising out of Lessee's use, occupancy or maintenance of the Building, the\nParking Area and the Common Area. Such insurance shall be a combined single\nlimited policy in an amount not less than $1,000,000.00 per occurrence, and not\nless than $2,000,000.00 general aggregate, naming Lessor as additional insured.\n\n               8.2   (a)  Lessee shall obtain and keep in force during the term\nof this Lease a policy or policies of insurance covering loss or damage to the\nPremises, in the amount of the full replacement value thereof, as the same may\nexist from time to time, which replacement value shall be, when the Building is\ncompleted not less than the full replacement cost on the Building including\neither the waiver of co-insurance clause or agreed amount clause with a\ndeductible of no more than $1,000.00, with twelve (12) months of rental income\ncoverage benefiting Lessor, against all perils included within the\nclassification of fire, extended coverage, vandalism, malicious mischief, flood\n(in the event same is required by a lender having a lien on the Building), and\nspecial extended perils (\"all risk\" as such term is used in the insurance\nindustry). Said insurance shall provide for payment of loss thereunder to Lessor\nor to the holders of mortgages or deeds of trust on the Building. If Lessee\nshall fail to procure and maintain said insurance, \n\n                                       7\n\n \nLessor may, but shall not be required to, procure and maintain the same, but at\nthe expense of Lessee. Lessee shall be liable for such deductible amount except\nif the loss or damage is proximately caused by the negligence, gross negligence\nor intentional misconduct of Lessor or Lessor's authorized agent.\n \n                     (b)  In addition to the foregoing, Lessee shall insure its\nfixtures, equipment and the Tenant Improvements.\n\n               8.3   Insurance required hereunder shall be in companies holding\na \"General Policyholders Rating\" of at least A Class VIII or better, or such\nother rating as may be required by a lender having a lien on the Building, as\nset forth in the most current issue of \"Best's Insurance Guide\". Notwithstanding\nanything to the contrary contained herein, Lessor acknowledges that Lessee's\ncurrent blanket insurance policy, a schedule of which is annexed hereto as\nExhibit E, shall, when Lessor is added as an additional insured and when the\n---------        \nBuilding is included in such policy, satisfy the requirements of this Paragraph\n8. No such policy shall be canceled or subject to reduction of coverage or other\nmodification except after thirty (30) days' prior written notice to Lessor.\nLessee shall, at least thirty (30) days prior to the expiration of such\npolicies, furnish Lessor with renewals or \"binders\" thereof, or Lessor may order\nsuch insurance and charge the cost thereof to Lessee, which amount shall be\npayable by Lessee upon demand.\n\n               8.4   Each party shall look first to any insurance in its favor\nbefore making any claim against the other party for recovery for loss or damage\nresulting from fire or other casualty. To the extent that such insurance is in\nforce and collectible and to the extent permitted by law, Lessor and Lessee each\nhereby releases and waives all right of recovery against the other or anyone\nclaiming through or under the other by way of subrogation or otherwise. The\nforegoing release and waiver shall be in force only if the insurance policies of\nLessor and Lessee provide that such release or waiver does not invalidate the\ninsurance. Each party agrees to use its commercially reasonable efforts to\ninclude in its applicable insurance policies such a provision. If the inclusion\nof said provision would involve an additional expense, either party, at its\nexpense, may require such provision to be inserted in the other's policy.\n\n               8.5   (a)  Lessee shall indemnify, defend, protect and hold\nharmless Lessor from and against any and all claims, demands, costs, damages or\nliabilities arising from (i) Lessee's use of the Building, the Parking Area or\nthe Common Area, (ii) any breach or default in the performance of any\nobligations on Lessee's part to be performed under the terms of this Lease, or\n(iii) any negligence of Lessee, or any of Lessee's agents, employees,\ncontractors, subcontractors, invitees or licensees in. or about the Building,\nthe Parking Area or the Common Area. Notwithstanding the foregoing, Lessee shall\nnot be required to indemnify Lessor against any such claims, demands, costs,\ndamages or liabilities to the extent that any such claims, demands, costs,\ndamages or liabilities arise from the negligence, gross negligence or\nintentional misconduct of Lessor or his agents, employees, contractors,\nsubcontractors, invitees or licensees.\n \n                     (b)  Lessor shall indemnify, defend, protect and hold\nharmless Lessee from and against all claims, demands, costs, damages or\nliabilities arising from (i) Lessor's use of the Building, the Parking Area or\nthe Common Area, (ii) any breach or default in the performance of any\nobligations on Lessor's part to be performed under the terms of this Lease, or\n(iii) any negligence of Lessor, or any of Lessor's agents, employees,\ncontractors, subcontractors, invitees or licensees in or about the Building, the\nParking Area or the Common Area. Notwithstanding the foregoing, Lessor shall not\nbe required to indemnify Lessee against claims, demands or costs, damages or\nliabilities to the extent that any such claims, demands, costs, damages or\nliabilities arise from the negligence, gross negligence or intentional\nmisconduct of Lessee or his agents, employees, contractors, subcontractors,\ninvitees or licensees.\n\n                     (c)  Each party shall give the other prompt written notice\nof any event, or assertion of which it has knowledge concerning any claim,\ndemand, cost, damage or liability or other obligation as to which he may request\nindemnification under this Lease. In the case of any third-party suit,\nproceeding, claim or assertion which is covered by the indemnifying party's\nindemnity in this Lease, the other party shall cooperate with the indemnifying\nparty in determining the validity of such claim or assertion. The indemnifying\nparty shall have the right to control the conduct of such defense with counsel\n\n                                       8\n\n \nreasonably satisfactory to the other party (it being understood that counsel\napproved by the indemnifying party's insurer shall be deemed to be reasonably\nsatisfactory counsel). The other party shall have the right, at its expense, to\nparticipate in such defense with counsel of its choice; provided, however, that\nthe indemnifying party shall bear the reasonable fees and expenses of such\ncounsel if representation by such counsel is appropriate in view of possible or\nactual conflicts of interest between the indemnifying party and the other party.\nThe other party shall not settle or compromise any such third party suit,\nproceeding, claim or assertion for which the other party will seek\nindemnification hereunder from the indemnifying party without the prior consent\nof the indemnifying party. If the other party has a right against a third party\n(including any insurer) with respect to any matter to which any indemnity under\nthis Lease applies, such indemnity shall be net of any amounts recovered from\nthird parties (including any insurer) and any amounts paid to the other party by\nthe indemnifying party shall entitle the indemnifying party, to the extent of\nsuch indemnity, to be subrogated to the rights of the other party to the extent\nthe indemnifying party can legally do so.\n\n               8.6   Lessee hereby agrees that Lessor shall not be liable for\ninjury to Lessee's business or any loss of income therefrom or for damage to the\ngoods, wares, merchandise or other property of Lessee, Lessee's employees,\ninvitees, customers, or any other person in or about the Premises, nor shall\nLessor be liable for injury to the person of Lessee, Lessee's employees, agents,\nor contractors, whether such damages or injury is caused by or results from\nfire, steam, electricity, gas, water or rain, or from the breakage, leakage,\nobstruction or other defects of pipes, sprinklers, wires, appliances, plumbing,\nair conditioning or light fixtures, or from any other cause, whether the said\ndamage or injury results from conditions arising upon the Building, or from\nother sources or places and regardless of whether the cause of such damage or\ninjury or the means of repairing the same is inaccessible to Lessee. In the\nevent of any injury or damage, Lessor shall indemnify, defend, protect hold\nharmless Lessee from and against all claims, demands, costs, damages or\nliabilities in connection therewith, and the provisions of Paragraph 8.5(b)\nabove shall be applicable as to such indemnification under this Paragraph 8.6,\nwith Lessor being the indemnifying party and Lessee being the indemnified party.\n\n          9.   Damage or Destruction.\n               --------------------- \n\n               9.1   Definitions.\n\n                     (a)  \"Premises Partial Damage\" shall mean damage or\ndestruction to the Premises to the extent that the cost of repair is less than\nfifty percent (50%) of the then replacement cost of the Premises as a whole.\n\n                     (b)  \"Premises Total Destruction\" shall mean damage or\ndestruction to the Premises to the extent that the cost of repair is fifty\npercent (50%) or more of the then replacement cost of the Premises as a whole.\n\n                     (c)  \"Insured Loss\" shall herein mean damage or destruction\nwhich was caused by an event required to be covered by the insurance described\nin Paragraph 8.\n\n               9.2   Subject to the provisions of Paragraphs 9.4, 9.5 and 9.6,\nif at any time during the term of this Lease there is damage which is an Insured\nLoss and which falls into the classification of Premises Partial Damage, then\nLessor shall, at Lessor's expense, as promptly as is reasonably practicable,\nrepair such damage, but not Lessee's fixtures or equipment unless the same have\nbecome Lessor's property pursuant to Paragraph 7.5(d), and this Lease shall\ncontinue in full force and effect. Notwithstanding the above, except if the\ndamage shall have been caused by the negligence or willful act of Lessor or his\nagents, employees, contractors, subcontractors, licensees or invitees, if the\ninsurance proceeds received by Lessor are not sufficient to complete such\nrepair, Lessor shall give notice to Lessee of the amount required in addition to\nthe insurance proceeds to complete such repair along with evidence of such\ninsufficient funds. Lessee shall contribute the required amount to Lessor within\nten (10) days after Lessee has received notice from Lessor of the shortage in\nthe insurance. When Lessee shall contribute such\n\n                                       9\n\n \namount to Lessor, Lessor shall complete such repair as soon as reasonably\npossible. Lessee shall in no event have any right to reimbursement for any such\namounts so contributed.\n\n               9.3   Subject to the provisions of Paragraphs 9.4, 9.5 and 9.6,\nif at any time during the term of this Lease there is damage which is not an\nInsured Loss and which falls within the classification of Premises Partial\nDamage, unless caused by a negligent or willful act of Lessee (in which event\nLessee shall make the repairs at Lessee's expense), Lessor may at Lessor's\noption either (i) repair such damage as soon as reasonably possible at Lessor's\nexpense, in which event this Lease shall continue in full force and effect, or\n(ii) give written notice to Lessee within thirty (30) days after the date of the\noccurrence of such damage of Lessor's intention to cancel and terminate this\nLease. In the event Lessor elects to give such notice of Lessor's intention to\ncancel and terminate this Lease, Lessee shall have the right within ten (10)\ndays after its receipt of such notice, to give written notice to Lessor of\nLessee's intention to repair such damage at Lessee's expense, without\nreimbursement from Lessor, in which event this Lease shall continue in full\nforce and effect, and Lessee shall proceed to make such repairs as soon as\nreasonably possible. If Lessee does not give such notice within such ten (10)\nday period this Lease shall be canceled and terminated at the end of such ten \n(10) day period. Notwithstanding anything to the contrary in the foregoing, in\nthe event that any Premises Partial Damage is caused by a negligent or willful\nact of Lessor or his agents, employees, contractors, subcontractors, licensees\nor invitees, then Lessor shall repair such damage in accordance with the\nrequirements of this Paragraph 9.3, and Lessor shall not have the election to\nterminate this Lease as hereinabove set forth.\n\n               9.4   If at any time during the term of this Lease there is\ndamage, whether or not an Insured Loss (including destruction required by any\nauthorized public authority), which falls into the classification of Building\nTotal Destruction, this Lease shall terminate automatically as of the date of\nsuch total destruction.\n\n               9.5   If at any time during the last two (2) months of the term\nof this Lease there is damage, whether or not an Insured Loss, which falls\nwithin the classification of Building Partial Damage and which will cost in\nexcess of $10,000.00 to repair, Lessor may, at Lessor's option, cancel and\nterminate this Lease by giving written notice to Lessee of Lessor's election to\ndo so within thirty (30) days after the date of occurrence of such damage.\n\n               9.6   (a)  In the event of damage described in Paragraph 9.2 or\n9.3, and Lessor or Lessee repairs or restores the Building pursuant to the\nprovisions of this Paragraph 9, the rent payable hereunder for the period during\nwhich such damage, repair or restoration continues shall be abated in proportion\nto the degree to which Lessee's use of the Building is impaired. Except for\nabatement of rent, if any, Lessee shall have no claim against Lessor for any\ndamage suffered by reason of any such damage, destruction, repair or\nrestoration.\n\n                     (b)  If Lessor shall be obligated to repair or restore the\nBuilding under the provisions of this Paragraph 9 and shall not commence such\nrepair or restoration within sixty (60) days after the occurrence of the damage\nor destruction to the Building, or, having so commenced, shall fail to complete\nsuch repair or restoration within six (6) months after the occurrence of such\ndamage or destruction, in addition to any other remedies Lessee may have, Lessee\nmay at Lessee's option cancel and terminate this Lease by giving Lessor written\nnotice of Lessee's election to do so at any time prior to fifteen (15) days\nafter the expiration of such sixty (60) day or six (6) month period, as the case\nmay be. In such event this Lease shall terminate as of the date of such notice.\n\n               9.7   Upon termination of this Lease pursuant to this Paragraph\n9, an equitable adjustment shall be made concerning advance rent and any advance\npayments made by Lessee to Lessor.\n\n                                       10\n\n \n               9.8   Lessor and Lessee waive the provisions of any statutes\nwhich relate to termination of leases when leased Premises is destroyed and\nagree that such event shall be governed by the terms of this Lease.\n\n          10.  Real Property Taxes.\n               ------------------- \n\n               10.1  (a)  Lessor and Lessee acknowledge that the Land and the\nremainder of Lot 6 constitute a single tax lot for real property taxation\npurposes. Lessee shall pay to Lessor annually as its share of the Real Property\nTax, as hereinafter defined, an amount equal to 100% of such Real Property Tax.\nLessor shall furnish Lessee with copies of the tax bill(s) from which the\ndetermination of the Real Property Tax shall be made, and Lessee shall pay to\nLessor, not later than ten (10) days prior to the delinquency date of such Real\nProperty Tax, the applicable amount. If Lessee shall fail timely to pay its\nshare of such Real Property Tax, Lessor shall have the right to pay the same, in\nwhich case Lessee shall repay such amount to Lessor with Lessee's next rent\ninstallment together with interest at the rate of two percent (2%) per annum in\nexcess of the Wells Fargo Prime Rate.\n\n               10.2  Lessee shall have the right to contest or review by legal\nproceedings, or in such other manner as it may deem suitable (which, if\ninstituted, Lessee shall conduct promptly at its own expense, and free of any\nexpense to Lessor, and, if necessary, in the name of Lessor), any Real Property\nTax. Lessee may defer payment to Lessor of its share of a contested item upon\ncondition that, before instituting any such proceedings, Lessee shall furnish to\nLessor security reasonably satisfactory to Lessor, sufficient to cover the\namount of the contested item or items, with interest and penalties, for the\nperiod which such be expected to take, securing payment of such contested items,\ninterest and penalties, and all costs in connection therewith. Notwithstanding\nthe furnishing of any such security other than a cash deposit (which cash\ndeposit Lessee may request Lessor to hold in an interest-bearing account),\nLessee shall promptly pay to Lessor its share of such contested item or items if\nat any time the Land, the Building or any improvements on the Land shall be in\ndanger of being sold, forfeited or otherwise lost or Lessor shall be subjected\nto criminal liability for such nonpayment. If, however, Lessee shall have made a\ncash deposit, in any such event Lessee may pay such contested item or items out\nof such deposit. Upon termination of any such contest, Lessee shall pay the\namount of its share of such contested items, as finally determined in such\nproceeding to be due, together with its share of the costs, fees, interest,\npenalties and other liabilities incurred in connection therewith. When any such\ncontested item or items shall have been paid or canceled, any balance of any\nsuch cash deposit not so applied shall, if Lessee shall have requested that such\ncash deposit no so applied shall, be held in an interest-bearing account, be\nrepaid to Lessee with all interest earned thereon. Lessor, at Lessee's expense,\nbut without separate charge to Lessee for Lessor's cooperation, will cooperate\nwith Lessee and execute and deliver any appropriate papers which may be\nreasonably necessary or proper to permit Lessee to contest any such Real\nProperty Tax. The legal proceedings herein referred to shall include appropriate\nproceedings to review tax assessments and appeals from orders therein and\nappeals from any judgments, decrees or orders, but all such proceedings shall be\nbegun as soon as reasonably possible after the imposition or assessment of any\ncontested item and shall be prosecuted to final adjudication or settlement with\nreasonable dispatch. If there shall be any refund with respect to any contested\nitem, Lessee shall be entitled to its proportionate share thereof.\n\n               10.3  As used herein, the term \"Real Property Tax\" shall mean all\ntaxes levied upon or with respect to the Land and assessments, as described\nbelow. Real Property Taxes shall include only all general real property taxes,\nand general and special assessments other than those initiated or consented to\nby Lessor after the date of this Lease, fees or assessments for transit,\nhousing, police, fire, or other governmental services or benefits to the Land,\nthe Building or other improvements on the Land that are now or hereafter levied\nor assessed against Lessor by the United States of America, the State of\nCalifornia, or any political subdivision, public corporation, district, or any\nother political or public entity, and shall also include any other tax, fee, or\nother excise that may be levied or assessed as a substitute for a Real Property\nTax, whether or not now customary or in the contemplation of the parties on the\ndate of this Lease. Real Property Tax shall not include, without limitation, any\nfranchise, transfer, inheritance, or capital stock taxes or income taxes\nmeasured by the net income of Lessor from all sources or any other taxes,\nassessments, fees, or other charges not in the nature of a real estate tax on\nland or on a building.\n\n                                       11\n\n \nLessee shall not be liable for any increase in Real Property Tax arising from\nany transfer or other conveyance by Lessor which may result in a change of\nownership or otherwise result in an increase in such assessment of the Property\nduring the term of this Lease.\n\n               10.4  (a)  Lessee shall pay prior to delinquency all taxes\nassessed against and levied upon the trade fixtures, furnishings, equipment and\nall other personal property of Lessee contained in the Building, or elsewhere.\nWhen possible, Lessee shall cause said trade fixtures, furnishings, equipment\nand all other personal property to be assessed and billed separately from the\nreal property of Lessor.\n \n                     (b)  If any of Lessee's said personal property shall be\nassessed with Lessor's real property, Lessor shall send Lessee a written\nstatement setting forth the taxes applicable to Lessee's personal property,\nalong with evidence thereof, and Lessee shall pay to Lessor such taxes not later\nthan ten (10) days prior to the delinquency date of the payment of such taxes.\n\n          11.  Utilities.\n               --------- \n\n                     Lessee shall pay for all water, gas, heat, light, power,\ntelephone and other utilities and services supplied to the Building and the\nLand. Lessor shall not be in default hereunder or be liable for any damages\ndirectly nor indirectly resulting from, nor shall the Rent be abated by reason\nof (1) the installation, use or interruption of use of any equipment in\nconnection with the furnishing of any of the foregoing services, (ii) failure to\nfurnish or delay in furnishing any such services where such failure or delay is\ncaused by accident or any condition or event beyond the reasonable control of\nLessor, or by the making of necessary repairs or improvements to the Premises,\nor the Building, or (iii) the limitation, curtailment, or rationing of, or\nrestrictions on, the use of water, electricity, gas of any other form of energy\nserving the Premises, or the Building, so long as such interruption in services,\nor failure to furnish or delay in furnishing such services is not due to\nnegligence or willful misconduct of Lessor.\n\n          12.  Assignment and Subletting.\n               ------------------------- \n\n               12.1  Lessee shall not voluntarily or by operation of law assign,\ntransfer, mortgage, sublet, or otherwise transfer or encumber all of any part of\nLessee's interest in this Lease or in the Building without Lessor's prior\nwritten consent, which consent shall not be unreasonably withheld. It shall be\nreasonable for Lessor to withhold his consent to any proposed assignment or\nsubletting if the financial strength and credit history of the proposed assignee\nor sublessee is less favorable than Lessee, or if the proposed assignee or\nsublessee is less experienced than Lessee in the operation of a business. Lessor\nshall respond to Lessee's request for consent hereunder in a timely manner, and\nany attempted assignment, transfer, mortgage, encumbrance or subletting without\nsuch consent shall be void, and shall constitute a material breach of this\nLease.\n\n               12.2  Notwithstanding the provisions of Paragraph 12.1 hereof,\nLessee may assign this Lease or sublet the Building, or any portion thereof,\nwithout Lessor's consent, to any entity which controls, is controlled by or is\nunder common control with Lessee, or to any entity resulting from a merger or\nconsolidation with Lessee, or to any person or entity which acquires all the\nassets of Lessee as a going concern of the business that is being conducted in\nthe Building, provided that said assignee assumes, in full, the obligations of\nLessee under this Lease. Any such assignment shall not, in any way, affect or\nlimit the liability of Lessee under the terms of this Lease.\n\n               12.3  Regardless of Lessor's consent, no subletting or assignment\nshall release Lessee of Lessee's obligation or alter the primary liability of\nLessee to pay the rent and to perform all other obligations to be performed by\nLessee hereunder. The acceptance of rent by Lessor from any other person shall\nnot be deemed to be a waiver by Lessor of any provision hereof. Consent to one \n( I ) assignment or subletting shall not be deemed consent to any subsequent\nassignment or subletting. In the event of a default by any assignee of Lessee or\nany successor of Lessee, in the performance of any of the\n\n                                       12\n\n \nterms hereof, Lessor may proceed directly against Lessee without the necessity\nof exhausting remedies against said assignee. Lessor may consent to the\nsubsequent assignments or subletting of this Lease or amendments or\nmodifications to this Lease with an assignee of Lessee, without notifying\nLessee, or any successor of Lessee, and without obtaining its or their consent\nthereto and such action shall not relieve Lessee of liability under this Lease.\n\n          13.  Defaults: Remedies.\n               ------------------ \n\n               13.1  The occurrence of any one (1) or more of the following\nevents shall constitute a material default and breach of this Lease by Lessee:\n\n                     (a)  The abandonment of the Building by Lessee.\n\n                     (b)  The failure by Lessee to make any payment of rent or\nany other payment required to be made by Lessee hereunder, as and when due,\nwhere such failure shall continue for a period of ten (10) days after written\nnotice thereof from Lessor to Lessee. Such written notice shall not constitute a\nNotice to Pay Rent or Quit pursuant to applicable Unlawful Detainer statutes.\n\n                     (c)  The failure by Lessee to observe or perform any of the\ncovenants, conditions or provisions of this Lease to be observed or performed by\nLessee, other than described in Paragraph 13.1(b) above, where such failure\nshall continue for a period of thirty (30) days after written notice thereof\nfrom Lessor to Lessee; provided, however, that if the nature of Lessee's default\nis such that more than thirty (30) days are reasonably required for its cure,\nthen Lessee shall not be deemed to be in default if Lessee shall commence such\ncure within said thirty (30) day period and thereafter diligently prosecute such\ncure to completion within ninety (90) days after receipt of Lessor's written\nnotice of default.\n\n                     (d)  (i)     The making by Lessee of any general\narrangement or assignment for the benefit of creditors; (ii) Lessee becomes a\n\"debtor\" as defined in 12 U.S.C. (S)101 or any successor statute thereto\n(unless, in the case of a petition filed against Lessee, the same is dismissed\nwithin sixty (60) days); (iii) the appointment of a trustee or receiver to take\npossession of substantially all of Lessee's assets located at the Building, or\nof Lessee's interest in this Lease, where possession is not restored to Lessee\nwithin sixty (60) days; or (iv) the attachment, execution or other judicial\nseizure of substantially all of Lessee's assets located at the Building, or of\nLessee's interest in this Lease, where such seizure is not discharged within\nsixty (60) days. Provided, however, in the event that any provision of this\nParagraph 13.1 (d) is contrary to any applicable law, such provision shall be of\nno force or effect.\n\n                     (e)  The discovery by Lessor that any financial statement\ngiven to Lessor by Lessee, any assignee of Lessee, any sublessee of Lessee or\nany successor in interest of Lessee, or any of them, was materially false.\n\n               13.2  Remedies.  In the event of any such material default or \n                     --------    \nbreach by Lessee, Lessor may at any time thereafter, with or without notice or\ndemand and without limiting Lessor in the exercise of any right or remedy which\nLessor may have by reason of such default or breach:\n\n                     (a)  Terminate Lessee's right to possession of the Building\nand use of the Parking Area and Common Area, by any lawful means, in which case\nthis Lease shall terminate and Lessee shall immediately surrender possession of\nthe Building and use of the Parking Area and Common Area, to Lessor. In such\nevent Lessor shall be entitled to recover from Lessee all damages incurred by\nLessor by reason of Lessee's default, including, but not limited to, the cost of\nrecovering possession of the Building, the Common Area and the Parking Area;\nexpenses of reletting, including necessary renovation and alteration of the\nBuilding, reasonable attorney's fees, and any real estate commission actually\npaid (provided that Lessor shall use commercially reasonable efforts to relet\nthe Building as and to the extent required by law for a term or terms which may\nbe less than or may exceed the period which would otherwise have constituted the\nbalance of this Lease). Any other amount reasonably necessary to\n\n                                       13\n\n \ncompensate Lessor for all the detriment proximately caused by Lessee's failure\nto perform its obligations under this Lease or which, in the ordinary course of\nthings, would be likely to result therefrom; and with respect to this Lease that\nportion of the brokerage commission, if any, paid by Lessor applicable to the\nunexpired term of this Lease.\n\n                     (b)  Maintain Lessee's right to possession in which case\nthis Lease shall continue in effect whether or not Lessee shall have abandoned\nthe Building. In such event Lessor shall be entitled to enforce all of Lessor's\nrights and remedies under this Lease, including the right to recover the rent as\nit becomes due hereunder.\n\n                     (c)  Pursue any other remedy now or hereafter available to\nLessor under the laws or judicial decisions of the State of California. Unpaid\ninstallments of rent and other unpaid monetary obligations of Lessee under the\nterms of this Lessee shall bear interest from the date due at the rate of two\npercent (2%) per annum in excess of the Wells Fargo Prime Rate.\n\n               13.3  Lessor shall not be in default unless Lessor fails to\nperform obligations required of Lessor within, if not otherwise specified\nherein, a reasonable time, but in no event later than thirty (30) days after\nwritten notice by Lessee to Lessor, specifying wherein Lessor has failed to\nperform such obligation; provided, however, that if the nature of Lessor's\nobligation is such that more than thirty (30) days are reasonably required for\nperformance, then, subject to Paragraph 9.6(b) above, Lessor shall not be in\ndefault if Lessor commences performance within such thirty (30) day period and\nthereafter diligently prosecutes the same to completion.\n\n               13.4  Lessee hereby acknowledges that late payment by Lessee to\nLessor of rent and other sums due hereunder will cause Lessor to incur costs not\ncontemplated by this Lease, the exact amount of which will be extremely\ndifficult to ascertain. Such costs include, but are not limited to, processing\nand accounting charges, and late charges which may be imposed on Lessor by the\nterms of any mortgage or trust deed covering the Building. Accordingly, if any\ninstallment of rent or any other sum due from Lessee shall not be received by\nLessor or Lessor's designee within ten (10) days after such amount shall be due,\nthen, without any requirement for notice to Lessee, Lessee shall pay to Lessor a\nlate charge equal to three percent (3%) of such overdue amount. The parties\nhereby agree that such late charge represents a fair and reasonable estimate of\nthe costs Lessor will incur by reason of late payment by Lessee. Acceptance of\nsuch late charge by Lessor shall in no event constitute a waiver of Lessee's\ndefault with respect to such overdue amount, nor prevent Lessor from exercising\nany of the other rights or remedies granted hereunder. In the event that a late\ncharge is payable hereunder, whether or not collected, for three (3) consecutive\ninstallments of rent, then rent shall automatically become due and payable\nquarterly in advance, rather than monthly, notwithstanding Paragraph 4 or any\nother provision of this Lease to the contrary.\n\n               13.5  In the event that a late charge is payable hereunder,\nwhether or not collected, for three (3) installments of rent or any other\nmonetary obligation of Lessee tinder the terms of this Lease during the term of\nthis Lease, Lessee shall pay to Lessor, if Lessor shall so request, in addition\nto any other payments required under this Lease, a monthly advance installment,\npayable at the same time as the monthly rent, as estimated by Lessor, for Real\nProperty Taxes and insurance expenses on the Building which are payable by\nLessee under the terms of this Lease. Such fund shall be established to insure\npayment when due, before delinquency, of any or all such Real Property Taxes and\ninsurance premiums. If the amounts paid to Lessor by Lessee under the provisions\nof this Paragraph 13.5 are insufficient to discharge the obligations of Lessee\nto pay such Real Property Taxes and insurance premiums, as the same become due,\nLessee shall pay to Lessor, upon Lessor's demand, such additional sums necessary\nto pay such obligations. All moneys paid to Lessor under this Paragraph 13.5 may\nbe intermingled with other moneys of Lessor and shall not bear interest. In the\nevent of a default in the obligations of Lessee to perform under this Lease,\nthen any balance remaining from funds paid to Lessor under the provisions of\nthis Paragraph 13.5 may, at the option of Lessor, be applied to the payment of\nany monetary default of Lessee in lieu of being applied to the payment of Real\nProperty Tax and insurance premiums.\n\n                                       14\n\n \n          14.  Condemnation.\n               ------------ \n\n                     If the Building or any portion thereof is taken under the\npower of eminent domain (\"Condemnation\"), this Lease shall terminate as to the\npart so taken as of the date the condemning authority takes title or possession,\nwhichever first occurs. If more than ten percent (10%) of the floor area of the\nBuilding, or more than twenty-five percent (25%) of the land area of the Common\nArea which is not occupied by any building, is taken by condemnation, Lessee\nmay, at Lessee's option, to be exercised in writing only within thirty (30) days\nafter Lessor shall have given Lessee written notice of such taking (or in the\nabsence of such notice, within thirty (30) days after the condemning authority\nshall have taken possession), terminate this Lease as of the date the condemning\nauthority takes such possession. If Lessee does not terminate this Lease in\naccordance with the foregoing, this Lease shall remain in full force and effect\nas to the portion of the Building or Common Area, as applicable, remaining,\nexcept that the rent shall be reduced in the proportion that the floor area of\nthat portion of the Building or Common Area, as applicable, taken bears to the\ntotal floor area of the Building or Common Area, as applicable. No reduction of\nrent shall occur if the only area taken is that which does not have a building\nlocated thereon. Any award for taking of all or any part of the Building or\nCommon Area, as applicable, under the power of eminent domain or any payment\nmade under the threat of the exercise of such power shall be the property of\nLessor, whether such award shall be made as compensation for diminution in value\nof the leasehold or for the taking of the fee, or as severance damages;\nprovided, however, that Lessee shall be entitled to any award for loss or damage\nto Lessee's trade fixtures, removable personal property, or any improvements to\nthe Building (excluding the Tenant Improvements) constructed by Lessee at\nLessee's sole cost and expense in accordance with the terms and conditions of\nthis Lease. In the event that this Lease is not terminated by reason of such\ncondemnation, Lessor shall to the extent of severance damages received by Lessor\nin connection with such condemnation, repair any damage to the Building caused\nby such condemnation except to the extent that Lessee has been reimbursed\ntherefor by the condemning authority.\n\n          15.  Broker.\n               ------ \n\n                     Lessor and Lessee represent to the other that no broker\nrepresents Lessee and Donald C. Lewis represents Lessor, and that there was no\nother broker, finder, consultant or similar person entitled to a commission, fee\nor other compensation in connection with the consummation of this Lease. Lessor\nand Lessee shall indemnify the other against all costs, expenses, damages and\nliabilities, including reasonable attorneys' fees and costs, arising from any\nclaims for brokerage commissions, finder's fees or other compensation resulting\nfrom or arising out of any conversations, negotiations or actions had by the\nindemnifying party or any one acting on behalf of such party with any broker,\nfinder, consultant or similar person other than Donald C. Lewis. The provisions\nof this Paragraph 15 shall survive the expiration or earlier termination of this\nLease.\n\n          16.  Estoppel Certificate.\n               -------------------- \n\n               16.1  Lessor and Lessee shall at any time, upon not less than\ntwenty (20) days prior written notice from the other party, execute, acknowledge\nand deliver to such party a statement in writing (i) certifying that this Lease\nis unmodified and in full force and effect (or, if modified, stating the nature\nof such modification and certifying that this Lease, as so modified, is in full\nforce and effect) (ii) stating the date to which Base Rent and additional rent\nand other charges are paid in advance, if any, and (iii) acknowledging that\nthere are not, to such party's knowledge, any uncured defaults on the part of\nthe other party hereunder, or specifying, such defaults if any are claimed. Any\nsuch statement may be conclusively relied upon by any prospective purchaser,\nsublessor or encumbrances of the Building, and by any prospective assignee of\nthis Lease.\n\n               16.2  At Lessor's option, Lessee's failure to deliver such\nstatement within such time shall be a material breach of this Lease or shall be\nconclusive upon Lessee (i) that this Lease is in full force and effect, without\nmodification except as may be represented by Lessor, (ii) that there are no\n\n                                       15\n\n \nuncured defaults in Lessee's performance, and (iii) that not more than one (1)\nmonth's rent has been paid in advance, or such failure may be considered by\nLessor as a default by Lessee under this Lease.\n\n               16.3  Lessor's failure to deliver such statement within such time\nshall be conclusive upon Lessor that (i) this Lease is in full force and effect,\nwithout modification except as may be represented by Lessee, and (ii) there are\nno uncured defaults hereunder on the part of Lessee.\n\n          17.  Lessor's Liability.\n               ------------------ \n\n                     The term \"Lessor\" as used herein shall mean only the owner\nor owners at the time in question of the fee title, and except with respect to\nany indemnification obligation of Lessor based on an event occurring prior to\nany transfer of such title or interest, in the event of any transfer of such\ntitle or interest, Lessor herein named (and in case of any subsequent transfers\nthen the transferor) shall be relieved from and after the date of such transfer\nof all liability as respects Lessor's obligations thereafter to be performed,\nprovided that any funds in the hands of Lessee or the then transferor after the\ntime of such transfer, in which Lessee has an interest, shall be delivered to\nthe transferee. The obligations contained in this Lease to be performed by\nLessor shall, subject as aforesaid, be binding on Lessor's successors and\nassigns, only during their respective periods of ownership.\n\n          18.  Severability.\n               ------------ \n\n                     The invalidity of any provision of this Lease, as\ndetermined by a court of competent jurisdiction, shall in no way affect the\nvalidity of any other provision hereof.\n\n          19.  Interest on Past-Due Obligations.\n               -------------------------------- \n\n                     Except as expressly herein provided, any amount due to\nLessor not paid when due (after any applicable notice and grace period) shall\nbear interest at the rate equal to the lesser of (i) two percent (2%) per annum\nover the Wells Fargo Prime Rate from the date due (after any applicable notice\nand grace period), or (ii) the maximum rate of interest then allowable by law.\nPayment of such interest shall not excuse or cure any default by Lessee under\nthis Lease.\n\n          20.  Incorporation of Prior Agreement: Amendments.\n               -------------------------------------------- \n\n                     This Lease contains all agreements of the parties with\nrespect to any matter mentioned herein. No prior agreement or understanding\npertaining to any such matter shall be effective. This Lease may be modified in\nwriting only, signed by parties in interest at the time of the modification.\nExcept as otherwise stated in this Lease, Lessee hereby acknowledges that\nneither Lessor or any employees or agents of any of said persons has made any\noral or written warranties or representations to Lessee relative to the\ncondition or use of the Building, Common Area or Parking Area by Lessee. Lessee\nacknowledges that Lessee assumes all responsibility regarding the Occupational\nSafety Health Act, the legal use and adaptability of the Building and the\ncompliance thereof with all applicable laws and regulations in effect during the\nterm of this Lease, except as otherwise specifically stated in this Lease.\n\n                                       16\n\n \n          21.  Notice.\n               ------ \n\n               21.1  All bills, statements, notices, demands, requests, consents\nor other communications given or required to be given under this Lease shall be\neffective only if given in writing and sent by (a) certified or registered U.S.\nmail, postage prepaid, return receipt requested, (b) personal delivery, or (c) a\nrecognized national overnight courier service, addressed as follows:\n\n                     (i)      If to Lessee:\n\n                              AgraQuest, Incorporated\n                              1530 Drew Avenue\n                              Davis, California 95616\n                              Attention: Pam Marrone, President\n                                         Bruce Holm, Chief Financial Officer\n\n                     (ii)     If to Lessor:\n\n                              Jim Joseph, Trustee of The Jim Joseph Revocable\n                              Trust c\/o Interland\n                              1480 Drew Avenue, Suite 100\n                              Davis, California 95616\n                              Attention: Mr. Donald C. Lewis\n\n                              With a copy to:\n\n                              Steefel, Levitt &amp; Weiss\n                              One Embarcadero Center\n                              29th Floor\n                              San Francisco, California 94111\n                              Attention: Alvin T. Levitt, Esq.\n\n               21.2  Any such bill, statement, notice, demand, request, consent\nor other communication shall be deemed to have been rendered or given on the\ndate which is three (3) business days\n\n                                       17\n\n \nafter the date mailed, one (1) business day after deposit with a courier service\n(or if the same is not a business day, then on the next business day after\ndelivery) or on the date of personal delivery (or if the same is not a business\nday, then on the next business day after delivery), or on the date sent by\nfacsimile, followed by U.S. mail, as the case may be. Either party may change\nits address for delivery by giving notice to the other party as provided in\nParagraph 21.1 above, except that upon Lessee's taking possession of the\nBuilding, the Building shall constitute Lessee's address for notice purposes.\n\n          22.  Waiver.\n               ------ \n\n               No waiver by Lessor of any provision hereof shall be deemed a\nwaiver of any other provision hereof or any subsequent breach by Lessee of the\nsame or any other provision. Lessor's consent to, or approval of, any act shall\nnot be deemed to render unnecessary the obtaining of Lessor's consent to or\napproval of any subsequent act by Lessee. The acceptance of rent hereunder by\nLessor shall not be a waiver of any preceding breach by Lessee of any provision\nhereof, other than the failure of Lessee to pay the particular rent so accepted,\nregardless of Lessee's knowledge of such preceding breach at the time of\nacceptance of such rent.\n\n          23.  Recording.\n               --------- \n\n               Either Lessor or Lessee shall, upon request of the other,\nexecute, acknowledge and deliver to the other a \"short form\" memorandum of this\nLease for recording purposes.\n\n          24.  Holding Over.\n               ------------ \n\n               If Lessee, with Lessor's consent, remains in possession of the\nBuilding or any part thereof after the expiration of the term hereof, such\noccupancy shall be a tenancy from month-to-month upon all the provisions of this\nLease pertaining to the obligations of Lessee.\n\n          25.  Cumulative Remedies.\n               ------------------- \n\n               No remedy or election hereunder shall be deemed exclusive but\nshall, wherever possible, be cumulative with all other remedies at law or in\nequity.\n\n          26.  Binding Effect: Choice of Law.\n               ----------------------------- \n\n               Subject to any provisions hereof restricting assignment or\nsubletting by Lessee and subject to the provisions of Paragraph is, this Lease\nshall bind the parties, their personal representatives, successors and assigns.\nThis Lease shall be governed by the laws of the State of California.\n\n          27.  Subordination.\n               ------------- \n\n               (a)   This Lease, at Lessor's option, shall be subordinate to any\nground lease, mortgage, deed of trust, or any other hypothecation or security\nnow or hereafter placed upon the Land and to any and all advances made on the\nsecurity thereof and to all renewals, modifications, consolidations,\nreplacements and extensions thereof. Notwithstanding such subordination,\nLessee's right to quiet possession of the Building shall not be disturbed if\nLessee is not in default and so long as Lessee shall pay the rent and observe\nand perform all of the provisions of this Lease, unless this Lease is otherwise\nterminated pursuant to its terms. If any mortgagee, trustee or ground lessor\nshall elect to have this Lease prior to the lien of its mortgage, deed of trust\nor ground lease, and shall give written notice thereof to Lessee, this Lease\nshall be deemed prior to such mortgage, deed of trust, or ground lease, whether\nthis Lease is dated prior or subsequent to the date of said mortgage, deed of\ntrust or ground lease or the date of recording thereof.\n\n                                       18\n\n \n               (b)   Lessee agrees to execute any documents required to\neffectuate an attornment, a subordination or to make this Lease prior to the\nlien of any mortgage, deed of trust or ground lease, as the case may be.\nLessee's failure to execute such documents within ten (10) days after written\ndemand shall constitute a material default by Lessee hereunder.\n\n          28.  Attorney's Fees.\n               ---------------\n\n               If either party brings an action to enforce the terms hereof or\ndeclare rights hereunder, the prevailing party in any such action, or trial or\nappeal, shall be entitled to his reasonable attorney's fees to be paid by the\nlosing party as fixed by the court.\n\n          29.  Lessor's Access.\n               ---------------\n\n               Lessor and Lessor's agents shall have the right to enter the\nBuilding at reasonable times for the purpose of inspecting the same, showing the\nsame to prospective purchasers, lenders, or lessees, and making such repairs to\nthe Building as Lessor may have the right to do under this Lease. Lessor may at\nany time place on or about the Building any ordinary \"For Sale\" signs and Lessor\nmay at any time during the last ninety (90) days of the term hereof place on or\nabout the Building any ordinary \"For Lease\" signs, all without rebate of rent or\nliability to Lessee. Lessor shall provide Lessee with not less than four (4)\nhours, prior telephonic notice prior to entering the Premises as permitted\nhereunder. No such entry by Lessor permitted hereunder shall interfere\nunreasonably with Lessee's use, occupation or quiet enjoyment of the Premises.\n\n          30.  Signs.\n               -----\n\n               Lessee shall have the right, without Lessor's consent, to place\nany sign(s) on or in the Building provided that such sign(s) comply with all\nlocal ordinances; and further provided that Lessee shall remove such signs at\nLessee's sole cost and expense upon the expiration or earlier termination of\nthis Lease and repair any damage to the Building caused by the installation or\nremoval of such signs.\n\n          31.  Merger.\n               ------ \n\n               The voluntary or other surrender of this Lease by Lessee, or a\nmutual cancellation thereof, or a termination by Lessor, shall not work a\nmerger, and shall, at the option of Lessor, terminate all or any existing\nsubtenancies or may, at the option of Lessor, operate as an assignment to Lessor\nof any or all of such subtenancies.\n\n          32.  Consents.\n               --------\n\n               Wherever in this Lease the consent of one (1) party is required\nto an act of the other party, such consent shall not be unreasonably withheld or\ndelayed.\n\n          33.  Quiet Possession.\n               ----------------\n\n               Upon Lessee paying the rent due hereunder and observing and\nperforming all of the covenants, conditions and provisions on Lessee's part to\nbe observed and performed hereunder, Lessee shall have quiet possession of the\nBuilding, the Parking Area and the Common Area, for the entire term hereof\nSubject to all of the provisions of this Lease.\n\n          34.  Common Area Rules.\n               ----------------- \n\n               Lessee agrees that Lessee will abide by, keep and observe all\nreasonable rules and regulations which Lessor may make from time to time for the\nmanagement, safety, care, and cleanliness of the Common Area and the Parking\nArea, and any common area within the Building if any portion of the\n\n                                       19\n\n \nBuilding is occupied by any Lessee other than Lessee. The violations of any such\nrules and regulations shall be deemed a material breach of this Lease by Lessee.\nLessor agrees that it shall enforce all such rules and regulations equitable\nbetween all parties subject to those rules and regulations.\n\n          35.  Security Measures.\n               -----------------\n\n               Lessee hereby acknowledges that the rental payable to Lessor\nhereunder does not include the cost of guard service or other security measures,\nand that Lessor shall have no obligation whatsoever to provide same. Lessee\nassumes all responsibility for the protection of Lessee, its agents and invitees\nfrom acts of third parties.\n\n          36.  Easements.\n               ---------\n\n               Lessor reserves to itself the right, from time to time, to grant\nsuch easements, rights and dedications that Lessor deems necessary or desirable,\nand to cause the recordation of parcel maps and restrictions, so long as such\neasements, right, dedications, maps and restrictions do not unreasonably\ninterfere with the use of the Building, the Parking Area or the Common Area by\nLessee. Lessee shall sign any of the aforementioned documents upon request of\nLessor and failure to do so shall constitute a material breach of this Lease.\n\n          37.  Performance Under Protest.\n               ------------------------- \n\n               If at any time a dispute shall arise as to any amount or sum of\nmoney to be paid by one party to the other under the provisions hereof, the\nparty against whom the obligation to pay the money is asserted shall have the\nright to make payment \"under protest\" and such payment shall not be regarded as\na voluntary payment, and there shall survive the right of the part of said party\nto institute suit for recovery of such suit. If it shall be adjudged that there\nwas no legal obligation on the part of said party to pay such sum or any part\nthereof, said party shall be entitled to recover such sum or so much thereof as\nit was not legally required to pay under the provisions of this Lease.\n\n          38.  Authority.\n               ---------\n\n               Each individual executing this Lease on behalf of Lessee\nrepresents and warrants that he or she is duly authorized to execute and deliver\nthis Lease on behalf of said entity. Lessee shall, within thirty (30) days after\nexecution of this Lease, deliver to Lessor evidence of such authority reasonably\nsatisfactory to Lessor.\n\n          39.  Hazardous Materials.\n               -------------------\n\n               39.1  \"Hazardous Materials\" shall mean (a) any oil, flammable\nsubstances, explosives, radioactive materials, hazardous wastes or substances,\ntoxic wastes or substances or any other wastes, materials or pollutants which\ncause the Building to be in violation of any Hazardous Materials Laws; (b)\nasbestos in any form which is or during the term of this Lease becomes friable,\nurea formaldehyde foam insulation, transformers or other equipment which contain\ndielectric fluid containing levels of polychlorinated biphenyls in excess of\nfederal or California standards, whichever is more stringent, or radon gas; (c)\nany chemical, material or substance defined as or included in the definition of\n\"hazardous substances\", \"hazardous wastes\", \"hazardous materials, \"extremely\nhazardous waste\", \"restricted hazardous waste, or toxic substances\" or words of\nsimilar import under any applicable local, state or federal law or under the\nregulations adopted or publications promulgated pursuant thereto, including, but\nnot limited to, the Comprehensive Environmental Response, Compensation and\nLiability Act of 1980, as amended, 42 U.S.C. {{9601, et seq.; the Hazardous\nMaterials Transportation Act, as amended, 49 U.S.C. {{1801, et seq.; the\nResource Conservation and Recovery Act, as amended, 42 U.S.C. {{6901, et seq.;\nthe Federal Water Pollution Control Act, as amended, 33 U.S.C. {{1251, et seq.;\nSections 25115, 25117, 25122.7, 25140, 25249.8, 25281, 25316, 25501, and 25316\nof the California Health and Safety Code; and Article 9\n\n                                       20\n\n \nor Article 11 of Title 22 of the California Administrative Code, Division 4,\nChapter 20; or (d) any other chemical, material or substance, exposure to which\nis prohibited, limited or regulated by any governmental authority having\njurisdiction over the Building.\n\n               39.2  \"Hazardous Materials Claims\" shall mean any and all\nenforcement, cleanup, removal, remedial or other governmental or regulatory\nactions, agreements or orders threatened, instituted or completed pursuant to\nany Hazardous Materials Laws, together with any and all claims made or\nthreatened by any third party against Lessor, Lessee or the Building arising out\nof a violation of any Hazardous Materials Law.\n\n               39.3  \"Hazardous Materials Laws\" shall mean any federal, state or\nlocal laws, ordinances, regulations or policies relating to the environment,\nhealth and safety, any Hazardous Materials (including, without limitation, the\nuse, handling, transportation, production, disposal, discharge or storage\nthereof) or to industrial hygiene or the environmental conditions on, under or\nabout the Building, including, without limitation, soil, groundwater and indoor\nand ambient air conditions.\n\n               39.4  Lessee shall immediately advise Lessor in writing of (i)\nany and all Hazardous Materials Claims, (ii) the presence of any Hazardous\nMaterials on, under or about the Building in accordance with, without\nlimitation, the requirements of California Health and Safety Code Section\n25359.7, (iii) any remedial action taken by Lessee in response to any (A)\nHazardous Materials on, under or about the Building or (B) Hazardous Materials\nClaims, (iv) Lessee's discovery of the presence of Hazardous Materials on, under\nor about any Premises adjoining the Building, and (v) Lessee's discovery of any\noccurrence or condition on any Premises adjoining the Building that could cause\nthe Building any part thereof to be as \"border-zone property\" tinder the\nprovisions of Health and Safety Code, Sections 25220 et seq. or any adopted in\n                                                     -------\naccordance therewith, or to be otherwise any restrictions on the ownership,\noccupancy, or use of the Building under any Hazardous Materials Laws. In\naddition, Lessee shall provide Lessor with copies of all communications with\nfederal, state and local governments or agencies relating to Hazardous Materials\nLaws and all communication with any person relating to Hazardous Materials\nClaims.\n\n               39.5  Lessee shall promptly take any and all necessary remedial\naction in response to the discharge, deposit, injection, dumping, spilling,\nleaking, disposal or release of any Hazardous Materials by Lessee or any of\nLessees agents, employees, contractors, subcontractors, suppliers, invitees,\nlicensees or guests, on, under or about the Land, including, without limitation,\nthe Building and any off-site contamination resulting therefrom. In the event\nLessee takes any such remedial action, Lessee shall conduct and complete such\nremedial action (i) in compliance with all applicable federal, state and local\nlaws, regulations, rules, ordinances and policies, and (ii) in accordance with\nthe orders and directives of all federal, state and local governmental\nauthorities. For the purposes of this Paragraph 39.5, Lessee shall be deemed to\nhave taken all necessary remedial action if Lessee shall have reduced any\ndischarged, deposited, injected, dumped, spilled, leaked, disposed of, or\nreleased Hazardous Material to the lowest maximum level of concentration\nrequired for such Hazardous Material by any applicable Hazardous Materials Law\nor federal, state or local governmental authorities having jurisdiction over the\nLand and any other areas that may be contaminated; provided, however, that if\nthere shall be no such maximum level of concentration, then (A) Lessee shall\nhave 180 days to obtain rulings from all governmental agencies having\njurisdiction over the Land and any other areas that may be contaminated with\nrespect to such level and thereafter shall promptly reduce such Hazardous\nMaterial to the lowest maximum level set forth in such rulings, or (B) if Lessee\nis unable timely to obtain such rulings, Lessee shall promptly reduce such\nHazardous Material to a level agreed to by Lessor and Lessee, or (C) if Lessor\nand Lessee cannot agree to a level of concentration, then Lessee shall promptly\nreduce each Hazardous Material for which a level is not otherwise established in\naccordance with this Paragraph 39 to a level thereafter agreed to by a\ngovernmental agency having jurisdiction over the Land and any other area that\nmay be contaminated. Nothing contained in this Paragraph 39.5 shall be deemed to\namend, modify or limit in any way whatsoever the indemnification obligations of\nLessee arising under Paragraph 39.6 below.\n\n               39.6  Lessee shall not create or permit to continue in existence\nany lien upon the Building imposed pursuant to any Hazardous Materials Law;\nprovided, however, that Lessee may, at its\n\n                                       21\n\n \nexpense, contest the validity of any such lien by appropriate legal proceedings\npromptly initiated and conducted in good faith and with due diligence, in which\ncase Lessee shall, at its sole cost and expense, defend itself and Lessor\nagainst the same and shall pay and satisfy or comply with any adverse judgment\nthat may be rendered thereon before the enforcement thereof against Lessor or\nthe Land, provided that Lessor is reasonably satisfied that (i) neither the Land\nnor any part thereof or interest therein will be in danger of being sold,\nforfeited, terminated, canceled or lost as a result of such contest, and (ii)\nLessee shall have posted a bond or furnished such other security as may be\nreasonably required from time to time by Lessor and is reasonably satisfactory\nto Lessor.\n\n               39.7  Lessor shall have the right to join and participate in, as\na party if it so elects, any legal proceedings or actions initiated in\nconnection with any Hazardous Materials Claims.\n\n               39.8  Lessee shall protect, indemnify and hold Lessor, its\ndirectors, officers, employees and agents, and any successors to Lessor's\ninterest in the Building, and any other person who acquires any portion of the\nBuilding, and any successors to any such other person, and all directors,\nofficers, employees and agents of all of the aforementioned indemnified parties,\nharmless from and against any and all actual or potential claims, liabilities,\ndamages, losses, fines, penalties, judgments, awards, costs and expenses\n(including, without limitation, attorneys, fees and costs and expenses of\ninvestigation) which arise out of or relate in any way to any use, handling,\nproduction, transportation, disposal or storage of any Hazardous Materials in or\non the Building whether by Lessee or any of Lessee's agents, employees,\ncontractors, subcontractors, suppliers, invitees or licensees, including,\nwithout limitation, (i) all foreseeable and all unforeseeable consequential\ndamages directly or indirectly arising out of (a) the use generation, storage,\ndischarge or disposal of Hazardous Materials by Lessee, or any of Lessee's\nagents, employees, contractors, subcontractors, suppliers, invitees or licensees\non or about the Building, or (b) any residual contamination affecting, any\nnatural resource or the environment, and (ii) the costs of any required or\nnecessary repair, cleanup, or detoxification of the Building and the preparation\nof any closure or other required plans. In addition, Lessee agrees that in the\nevent any Hazardous Material is caused to be removed from the Building by\nLessee, Lessor or any other person, the number assigned by the Environmental\nProtection Agency to such Hazardous Material shall be solely in the name of\nLessee and Lessee shall assume any and all liability for such removed Hazardous\nMaterial. Lessee understands and agrees that its liability to the aforementioned\nindemnified parties shall arise upon the earlier to occur of (a) discovery of\nany Hazardous Materials on, under or about the Building, or (b) the institution\nof any Hazardous Materials Claim, and not upon the realization of loss or\ndamage.\n\n               39.9  Except as required by law or by a governmental agency or as\notherwise provided herein, Lessee shall not, without the prior written consent\nof Lessor, divulge any information or release any written material regarding\nmatters pertaining to the discharge, deposit, injection, dumping, spilling,\nleaking, disposal or release of any Hazardous Materials on, under, about or in\nthe vicinity of the Land, to any person, entity or governmental agency or\nauthority. All reports, data, samples and memoranda concerning such matters\nshall be the property of Lessor. Lessee shall not enter into any agreements with\nany governmental agencies or authorities relating to such matters without\nLessor's prior written consent.\n\n               39.10  Lessee's obligations under this Paragraph 39 shall survive\nthe expiration or earlier termination of this Lease.\n\n          40.  Lessor's Representations. Covenants and Warranties Pertaining to\n               ----------------------------------------------------------------\nHazardous Materials.\n-------------------\n                     Lessor hereby represents, covenants and warrants as\nfollows:\n\n                     (a)  To the best of Lessor's knowledge, without any\ninvestigation or inquiry, (i) no Hazardous Materials have been spilled, disposed\nof, or stored, on, under, or at the Land, whether by accident, burying,\ndrainage, or storage in containers, tanks or holding areas, or by any other\nmeans whatsoever; and (ii) the Land has never been used as a dump or landfill.\nNotwithstanding the\n\n                                       22\n\n \nforegoing, Lessee hereby acknowledges that Lessor has disclosed to Lessee that\nthe Land was used at one time for farming purposes and, in that connection, it\nis likely that certain unknown pesticides and\/or herbicides may have been\ndischarged on the Land and that traces thereof may remain on, under, or at the\nLand.\n\n                     (b)  Lessor shall take any and all necessary remedial\naction required by any Hazardous Materials Laws in response to the presence of\nany Hazardous Materials on, under or about the Land or the Building existing on\nor before the Commencement Date, and as required by any federal, state or local\ngovernmental entity having jurisdiction over the Land or the Building, at the\ntime, in the manner and to the extent required by any such governmental entity.\n\n          41.  ARBITRATION OF DISPUTES.\n               ----------------------- \n\n               41.1  THE PARTIES HERETO SHALL NOT BE DEEMED TO HAVE AGREED TO\nDETERMINATION BY ARBITRATION OF ANY DISPUTE ARISING OUT OF THIS LEASE UNLESS\nDETERMINATION IN SUCH MANNER SHALL HAVE BEEN SPECIFICALLY PROVIDED FOR IN THIS\nLEASE.\n\n               41.2  THE PARTY DESIRING ARBITRATION SHALL GIVE NOTICE TO SUCH\nEFFECT TO THE OTHER PARTY AND SHALL IN SUCH NOTICE APPOINT A PERSON AS\nARBITRATOR ON ITS BEHALF. WITHIN TEN (10) DAYS AFTER SUCH NOTICE IS GIVEN, THE\nOTHER PARTY BY NOTICE TO THE ORIGINAL PARTY SHALL APPOINT A SECOND PERSON AS\nARBITRATOR ON ITS BEHALF. THE ARBITRATORS THUS APPOINTED SHALL APPOINT A THIRD\nPERSON, AND SUCH THREE (3) ARBITRATORS SHALL AS PROMPTLY AS POSSIBLE DETERMINE\nSUCH MATTER, PROVIDED, HOWEVER, THAT:\n\n                     (a)  IF THE SECOND ARBITRATOR SHALL NOT HAVE BEEN APPOINTED\nAS AFORESAID, THE FIRST ARBITRATOR SHALL PROCEED TO DETERMINE SUCH MATTER; AND\n\n                     (b)  IF THE TWO ARBITRATORS APPOINTED BY THE PARTIES SHALL\nBE UNABLE TO AGREE, WITHIN TEN (10) DAYS AFTER THE APPOINTMENT OF THE SECOND\nARBITRATOR, UPON THE APPOINTMENT OF A THIRD ARBITRATOR, THEY SHALL GIVE WRITTEN\nNOTICE TO THE PARTIES OF SUCH FAILURE TO AGREE, AND, IF THE PARTIES FAIL TO\nAGREE UPON THE SELECTION OF SUCH THIRD ARBITRATOR WITHIN TEN (10) DAYS AFTER THE\nARBITRATORS APPOINTED BY THE PARTIES GIVE NOTICE AS AFORESAID, THEN WITHIN FIVE\n(5) DAYS THEREAFTER EITHER OF THE PARTIES, UPON NOTICE TO THE OTHER PARTY, MAY\nREQUEST SUCH APPOINTMENT BY THE AMERICAN ARBITRATION ASSOCIATION (OR ANY\nORGANIZATION SUCCESSOR THERETO), OR IN THE ABSENCE, REFUSAL, FAILURE OR\nINABILITY TO ACT OF SUCH ORGANIZATION, MAY APPLY FOR A COURT APPOINTMENT OF SUCH\nARBITRATOR.\n\n               41.3  EACH ARBITRATOR SHALL BE A FIT PERSON WHO SHALL HAVE HAD AT\nLEAST 10 YEARS' EXPERIENCE IN THE STATE OF CALIFORNIA IN A CALLING CONNECTED\nWITH THE MATTER OF THE DISPUTE, AND, IN ADDITION, THE THIRD ARBITRATOR SHALL BE\nIMPARTIAL.\n\n               41.4  THE ARBITRATION SHALL BE CONDUCTED, TO THE EXTENT\nCONSISTENT WITH THIS PARAGRAPH 41, IN ACCORDANCE WITH THE THEN PREVAILING\nCOMMERCIAL ARBITRATION RULES OF THE AMERICAN ARBITRATION ASSOCIATION (OR ANY\nORGANIZATION SUCCESSOR THERETO). THE DECISION AND AWARD SHALL BE RENDERED BY THE\nARBITRATORS, UPON THE CONCURRENCE OF AT LEAST TWO OF THEIR NUMBERS, WITHIN\nTHIRTY (30) DAYS. AFTER THE APPOINTMENT OF THE THIRD ARBITRATOR OR IN THE CASE\nOF A DETERMINATION BY A SINGLE ARBITRATOR\n\n                                       23\n\n \nPURSUANT TO PARAGRAPH 41.2(a) ABOVE, WITHIN THIRTY (30) DAYS AFTER THE\nEXPIRATION OF THE PERIOD DURING WHICH A SECOND ARBITRATOR MAY BE APPOINTED. SUCH\nDECISION AND AWARD SHALL BE IN WRITING AND SHALL BE FINAL AND CONCLUSIVE ON THE\nPARTIES, AND COUNTERPART COPIES THEREOF SHALL BE DELIVERED TO EACH OF THE\nPARTIES. IN RENDERING SUCH DECISION AND AWARD, THE ARBITRATORS SHALL NOT ADD TO,\nSUBTRACT FROM OR OTHERWISE MODIFY THE PROVISIONS OF THIS LEASE. JUDGMENT MAY BE\nHAD ON THE DECISION AND AWARD OF THE ARBITRATOR(S) SO RENDERED IN ANY COURT OF\nCOMPETENT JURISDICTION.\n\n               41.5  EACH PARTY SHALL PAY THE FEES AND EXPENSES OF THE\nARBITRATOR APPOINTED BY OR FOR SUCH PARTY. THE FEES AND EXPENSES OF THE THIRD\nARBITRATOR AND ALL OTHER EXPENSES OF THE ARBITRATION (OTHER THAN THE FEES AND\nDISBURSEMENTS OF ATTORNEYS OR WITNESSES FOR EACH PARTY) SHALL BE BORNE BY THE\nPARTIES EQUALLY.\n\n               NOTICE: BY INITIALING IN THE SPACE BELOW YOU ARE AGREEING TO HAVE\nANY DISPUTE ARISING OUT OF THE MATTERS INCLUDED IN THE \"`ARBITRATION OF\nDISPUTES\" PROVISION DECIDED BY NEUTRAL ARBITRATION AS PROVIDED BY CALIFORNIA LAW\nAND YOU ARE GIVING UP ANY RIGHTS YOU MIGHT POSSESS TO HAVE THE DISPUTE LITIGATED\nIN A COURT OR JURY TRIAL. BY INITIALING IN THE SPACE BELOW YOU ARE GIVING UP\nYOUR JUDICIAL RIGHTS TO DISCOVERY AND APPEAL, UNLESS THOSE RIGHTS ARE\nSPECIFICALLY INCLUDED IN THE. \"ARBITRATION OF DISPUTES\" PROVISION. IF YOU REFUSE\nTO SUBMIT TO ARBITRATION AFTER AGREEING TO THIS PROVISION, YOU MAY BE COMPELLED\nTO ARBITRATE UNDER THE AUTHORITY OF THE CALIFORNIA CODE OF CIVIL PROCEDURE. YOUR\nAGREEMENT TO THIS ARBITRATION PROVISION IS VOLUNTARY. WE HAVE READ AND\nUNDERSTAND THE FOREGOING AND AGREE TO SUBMIT DISPUTES ARISING OUT OF THE MATTERS\nINCLUDED IN THE ARBITRATION OF DISPUTES\" PROVISION TO NEUTRAL ARBITRATION.\n\n                              LESSOR:  \/s\/ DCL\n\n\n                              LESSEE: \/s\/ PM\n\n          42.  Force Majeure.\n               -------------\n\n                     In the event that either party hereto shall be delayed or\nhindered in or prevented from the performance of any act required hereunder by\nreason of strikes, lock-outs, labor troubles, inability to procure materials,\nfailure of power, restrictive governmental laws or regulations, riots,\ninsurrection, war on other reason beyond the reasonable control of the party\ndelayed in performing work or doing acts required under the terms of this Lease,\nthen performance of such act shall be excused for the period of the delay and\nthe period for performance of any such act shall be extended for a period\nequivalent to the period of such delay. The provisions of this Paragraph 42\nshall not operate to excuse Lessee from the payment of Base Rent, additional\nrent or any other payments required by the terms of this Lease within the time\nperiods and otherwise in accordance with the requirements of this Lease.\n\n          43.  Successors and Assigns.\n               ----------------------\n\n                     Subject to the provisions of Paragraph 12 hereof, this\nLease and all of the provisions hereof shall bind and inure to the benefit of\nthe successors and assigns of each of Lessor and Lessee.\n\n                                       24\n\n \nLESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM AND\nPROVISION CONTAINED HEREIN AND BY EXECUTION OF THIS LEASE SHOW THEIR INFORMED\nAND VOLUNTARY CONSENT THERETO. THE PARTIES HEREBY AGREE THAT AT THE TIME THIS\nLEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE COMMERCIALLY REASONABLE AND\nEFFECTUATE THE INTENT AND PURPOSE OF LESSOR AND LESSEE WITH RESPECT TO THE\nPREMISES COVERED BY THIS LEASE.\n\n                     IN WITNESS WHEREOF, Lessor and Lessee have executed and\ndelivered this Lease on the date first above written.\n\n\n\n                      \/s\/ Jim Joseph by Donald C. Lewis\n                      -------------------------------------\n                      Jim Joseph \"LESSOR\" Trustee, \n                      The Jim Joseph Revocable Trust  [Attorney in Fact]\n\n\n                      \/s\/ Pamela Marrone\n                      -------------------------------------\n                      Pam Marrone, \"LESSEE\" President\n                      AgraQuest, Incorporated\n\n                                       25\n\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[6597],"corporate_contracts_industries":[9451],"corporate_contracts_types":[9583,9579],"class_list":["post-41790","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-agraquest-inc","corporate_contracts_industries-manufacturing__chemicals","corporate_contracts_types-land__ca","corporate_contracts_types-land"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/41790","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=41790"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=41790"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=41790"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=41790"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}