**Exhibit 10.44**

** **

December 20, 2002

 

 

 

**COMMERCIAL LEASE AND DEPOSIT RECEIPT**

 

RECEIVED FROM Monterey PastaCompany, a Delaware Corporation, hereinafter referred to as LESSEE, the sum of$2,975.00 (Two Thousand Nine Hundred Seventy Five and xx/100 DOLLARS), evidencedby a company check, as a deposit which upon acceptance of this lease shallbelong to Lessor and shall be applied as follows:

 
|                                       |   | **TOTAL** |     | **RECEIVED** |   | **BALANCE  DUE PRIOR TO OCCUPANCY** |   |
|--------------------------------------------|--------|-----------|----------|--------------|--------|-------------------------------------|--------|
| Rent for the period from 3-1-03 to 3-31-03 |   | $         | 1,487.50 |         | $      | 1,487.50                            |   | $ | -0- |   |
| Security deposit                           |   | $         | 1,487.50 |         | $      | 1,487.50                            |   | $ | -0- |   |
| Other                                 |   | $         | -0-      |         | $      | -0-                                 |   | $ | -0- |   |
| TOTAL                                      |   | $         | 2,975.00 |         | $      | 2,975.00                            |   | $ | -0- |   |

 

In the eventthat this lease is not accepted by the Lessor within 5 days, the total depositreceived shall be refunded.

 

Lessee herebyoffers to lease from Lessor the premises situated in the City of Salinas Countyof Monterey State of California described as 1514 Moffett Street Suite E. Zip93905

 

upon the following TERMS andCONDITIONS:

 

1.                                       **TERM: **Theterm hereof shall commence on:  March 1,2003  and expire on: February 28, 2006

 

2.                                       **RENT: **Thetotal rent shall be $1,487.50  payableas follows:  On the first day of eachmonth, Lessee shall pay a late fee of $100.00 for any payment that is notreceived by the fifth of each month. All rents shall be paid to Owner or his authorized agent, at thefollowing address 1518 Moffett Street Suite E. Salinas, CA 93905, or at suchother places as may be designated by Owner from time to time.

 

3.                                       **USE: **Thepremises are to be used for the operation of General office space and for noother purpose.  and for no otherpurpose, without prior written consent of Lessor.

 

4.                                       **USES PROHIBITED: **Lessee shall not use any portion of the premises for purposesother than those specified hereinabove, and no use shall be made or permittedto be made upon the premises, nor acts done, which will increase the existingrate of insurance upon the property, or cause cancellation of insurancepolicies covering said property. Lessee shall not conduct or permit any sale byauction on the premises.

 

5.                                       **ASSIGNMENT AND SUBLETTING: **Lessee shall not assign this lease or sublet anyportion of the premises without prior written consent of the Lessor, whichshall not be unreasonably withheld.  Anysuch assignment or subletting without consent shall be void and, at the optionof the Lessor, may terminate this lease.

 

6.                                       **ORDINANCES AND STATUTES: **Lessee shall comply with all statutes, ordinances andrequirements of all municipal, state and federal authorities now in force, orwhich may hereafter be in force, pertaining to the premises, occasioned by oraffecting the use thereof by Lessee. The commencement or pendency of any state or federal court abatementproceeding affecting the use of the premises shall, at the option of theLessor, be deemed a breach hereof.

 

7.                                       **MAINTENANCE, REPAIRS, ALTERATIONS:**  Lessee acknowledges that the premises are ingood order and repair, unless otherwise indicated herein.  Lessee shall, at his own expense and at alltimes, maintain the premises in good and safe condition, including plate glass,electrical wiring, plumbing and heating installations and any other system orequipment upon the premises and shall surrender the same, at terminationhereof, in as good condition as received, normal wear and tear excepted.  Lessee shall be responsible for all repairsrequired, excepting the roof, exterior walls, structural foundations, and 

See ADDENDUM#1 which shall be maintained by Lessor.

 

No improvement or alteration of the premises shall be made without theprior written consent of the Lessor. Prior to the commencement of any substantial repair, improvement, oralteration, Lessee shall give Lessor at least two (2) days written notice inorder that Lessor may post appropriate notices to avoid any liability forliens.

 

Lessee shall not commit any waste upon the premises, or any nuisance oract which may disturb the quiet enjoyment of any tenant in the building.

 

**ENTRY AND INSPECTION:**  Lessee shall permit Lessor or Lessor’sagents to enter upon the premises at reasonable times and upon reasonablenotice, for the purpose of inspecting the same, and will permit Lessor at anytime within sixty (60) days prior to the expiration of this lease, to placeupon the premises any usual “To Let” or “For Leases and permit persons desiringto lease the same to inspect the premises thereafter.

 

8.                                       **INDEMNIFICATION: **See ADDENDUM #1

 

9.                                       **POSSESSION: **IfLessor is unable to deliver possession of the premises at the commencementhereof, Lessor shall not be liable for any damage caused thereby, nor shallthis lease be void or voidable, but Lessee shall not be liable for any rentuntil possession is delivered. Lessee may terminate this lease if possession isnot delivered within 30 days of the commencement of the term hereof.

 

10.                                 **INSURANCE: **Lessee,at his expense, shall maintain plate glass and public liability insuranceincluding bodily injury and property damage insuring Lessee and Lessor withminimum coverage as follows 1,000,000.00 combined single limits

 

Lessee shall provide Lessor with a Certificate of Insurance showingLessor as additional insured.  TheCertificate shall provide for a ten-day written notice to Lessor in the eventof cancellation or material change of coverage.

 

To the maximum extent permitted by insurance policies which may beowned by Lessor or Lessee, Lessee and Lessor, for the benefit of each other,waive any and all rights of subrogation which might otherwise exist.

 

11.                                 **UTILITIES: **Lesseeagrees that he shall be responsible for the payment of all utilities, includinggas, electricity, and services delivered to the premises.

 

12.                                 **SIGNS: **Lessorreserves the exclusive right to the roof, side and rear walls of thePremises.  Lessee shall not constructany projecting sign or awning without the prior written consent of Lessor whichconsent shall not be unreasonably withheld.

 

13.                                 **ABANDONMENT OF PREMISES: **Lessee shall not vacate or abandon the premises at anytime during the term hereof, and if Lessee shall abandon or vacate thepremises, or be dispossessed by process of law, or otherwise, any personalproperty belonging to Lessee left upon the premises shall be deemed to beabandoned, at the option of Lessor.

 

14.                                 **CONDEMNATION: **Ifany part of the premises shall be taken or condemned for public use, and a partthereof remains which is susceptible of occupation hereunder, this leaseshall-as to the part taken, terminate as of the date the condemner acquirespossession, and thereafter Lessee shall be required to pay such proportion ofthe rent for the remaining term as the value of the premises remaining bears tothe total value of the premises at the date of condemnation; provided however,that Lessor may at his option, terminate this lease as of the date thecondemner acquires possession. In the event that the demised premises arecondemned in whole, or that such portion is condemned that the remainder is notsusceptible for use hereunder, this lease shall terminate upon the date uponwhich the condemner acquires possession. All sums which may be payable on account of any condemnation shallbelong to the Lessor, and Lessee shall not be entitled to any part thereof,provided however, that Lessee shall be entitled to retain any amount awarded tohim for his trade fixtures or moving expenses.

 

15.                                 **TRADE FIXTURES: **Any and all improvements made to the premises during the termhereof shall belong to the Lessor, except trade fixtures of the Lessee.  Lessee may, upon termination hereof, removeall his trade fixtures, but shall repair or pay for all repairs necessary fordamages to the premises occasioned by removal.

 

16.                                 **DESTRUCTION OF PREMISES: **In the event of a partial destruction of the premisesduring the term hereof, from any cause, Lessor shall forthwith repair the same,provided that such repairs can be made within sixty (60) days under existinggovernmental laws and regulations, but such partial destruction shall notterminate this lease, except that Lessee shall be entitled to a proportionatereduction of rent while such repairs are being made, based upon the extent towhich the making of such repairs shall interfere with the business of Lessee onthe premises. If such repairs cannot be made within said sixty (60) days,Lessor, at his option, may make the same within a reasonable time, this leasecontinuing in effect with the rent proportionately abated as aforesaid, and inthe event that Lessor shall not elect to make such repairs which cannot be madewithin sixty (60) days, this lease may be terminated at the option of eitherparty.

 

In the event that the building in which the demised premises may besituated is destroyed to an extent of not less than one-third of thereplacement costs thereof, Lessor may elect to terminate this lease whether thedemised premises be injured or not. A total destruction of the building inwhich the premises may be situated shall terminate this lease.

 

In the event of any dispute between Lessor and Lessee with respect tothe provisions hereof, the matter shall be settled by arbitration in such amanner as the parties may agree upon, or if they cannot agree, in accordancewith the rules of the American Arbitration Association.

 

17.                                 **HAZARDOUS MATERIALS: **Lessee shall not use, store, or dispose of any hazardoussubstances upon the premises, except use and storage of such substances if theyare customarily used in lessee’s business, and such use and storage complieswith all environmental laws. Hazardous substances means any hazardous waste,substance or toxic materials regulated under any environmental laws orregulations applicable to the property.

 

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18.                                 **INSOLVENCY:**  In the event a receiver is appointed to take over the business ofLessee, or in the event Lessee makes a general assignment for the benefit ofcreditors, or Lessee takes or suffers any action under any insolvency orbankruptcy act, the same shall constitute breach of this lease by Lessee.

 

19.                                 **REMEDIES OF OWNER ON DEFAULT:**  In the event of any breach of this lease byLessee, Lessor may, at his option, terminate the lease and recover fromLessee:  (a) the worth at the time ofaward of the unpaid rent which was earned at the time of termination; (b) theworth at the time of award of the amount by which the unpaid rent which wouldhave been earned after termination until the time of the award exceeds theamount of such rental loss that the Lessee proves could have been reasonablyavoided; (c) the worth at the time of award of the amount by which the unpaidrent for the balance of the term aver the time of award exceeds the amount ofsuch rental loss that Lessee proves could be reasonably avoided; and (d) anyother amount necessary to compensate Lessor for all detriment proximatelycaused by Lessee’s failure to perform his obligations under the lease or whichin the ordinary course of things would be likely to result therefrom.

 

Lessor may, in the alternative, continue this lease in effect, as longas Lessor does not terminate Lessee’s right to possession, and Lessor mayenforce all his rights and remedies under the lease, including the right torecover the rent as it becomes due under the lease.  If said breach of lease continues, Lessor may, at any timethereafter, elect to terminate the lease.

 

Nothing contained herein shall be deemed to limit any other rights orremedies which Lessor may have.

 

20.                                 **SECURITY:** The security deposit set forthabove, if any, shall secure the performance of the Lessee’s obligationshereunder.  Lessor may, but shall not beobligated to apply all or portions of said deposit on account of Lessee’s obligationshereunder.  Any balance remaining upontermination shall be resumed to Lessee. Lessee shall not have the right to apply the Security Deposit in paymentof the last month’s rent.

 

21.                                 **DEPOSIT REFUNDS:**  The balance of all deposits shall be refunded within two weeksfrom date possession is delivered to Owner or his authorized Agent, togetherwith a statement showing any charges made against such deposits by Owner.

 

22.                                 **ATTORNEY’S FEES:**  In case suit should be brought for recovery of the premises, orfor any sum due hereunder, or because of any act which may arise out of thepossession of the premises, by either party, the prevailing party shall beentitled to all costs incurred in connection with such action, including areasonable attorney’s fee.

 

23.                                 **WAIVER:** No failure of Lessor to enforce any term hereof shall be deemed to be awaiver.

 

24.                                 **NOTICES:** Any notice which either party may or is required to give, shall be givenby mailing the same, postage prepaid, to Lessee at the premises, or Lessor at theaddress shown below, or at such other places as may be designated by theparties from time to time.

 

25.                                 **HOLDING OVER:**  Any holding over after the expiration of this lease, with theconsent of Lessor, shall be construed as a month-to-month tenancy at a rentalof:  The rent for the last month of theinitial term of the lease, plus ten (10%).

 

26.                                 **TIME:** Time is of the essence of this lease.

 

27.                                 **HEIRS, ASSIGNS, SUCCESSORS:**  This lease is binding upon and inures to thebenefit of the heirs, assigns and successors in interest to the parties.

 

28.                                 **TAX INCREASE:**  In the event there is any increase during any year of the term ofthis lease in the City, County or State real estate taxes over and above theamount of such taxes assessed for the tax year during which the term of thislease commences, whether because of increased rate or valuation, Lessee shallpay to Lessor upon presentation of paid tax bills an amount equal to 5.24% ofthe increase in taxes upon the land and building in which the leased premises aresituated.  In the event that such taxesare assessed for a tax year extending beyond the term of the lease, theobligation of Lessee shall be proportionate to the portion of the lease termincluded in such year.

 

29.                                 **COST OF LIVING INCREASE:**  The rent provided for in paragraph 2 shallbe adjusted effective upon the first day of the month immediately following theexpiration of 12 months from date of commencement of the term and upon theexpiration of each 12 months thereafter in accordance with changes in the SanFrancisco-Oakland-San Jose Index for All Urban Consumers (1982-84=100)hereinafter called the “CPI”  Themonthly rent shall be increased to an amount equal to the monthly rent setforth in paragraph 2 multiplied by a fraction the numerator of which is the CPIfor the second calendar month immediately preceding the adjustment date and thedenominator of which is the CPI for the second calendar month preceding thecommencement of the lease term Provided, however, in no event shall the monthlyrent be less than the amount set forth in paragraph 2.

 

30.                                 **LESSOR’S LIABILITY:**  The term “Lessor”, as used in thisparagraph, shall mean only the owner of the real property or a Lessee’sinterest in a ground lease of the premises. In the event of any transfer of such title or interest, the Lessor namedherein (or the grantor in case of any subsequent transfers) shall be relievedof all liability related to Lessor’s obligations to be performed after suchtransfer.  Provided, however, that anyfunds in the hands of Lessor or Grantor at the time of such transfer shall bedelivered to Grantee.  Lessor’saforesaid obligations shall be binding upon Lessor’s successors and assignsonly during their respective periods of ownership.

 

31.                                 **ESTOPPEL CERTIFICATE:**

                                                (a)  Lesseeshall at anytime upon not less than ten (10) days’ prior written notice fromLessor execute, acknowledge and delivered to Lessor a statement in writing [1]certifying that this Lease is unmodified and in full force and effect (or, ifmodified, stating the nature of such modification and certifying that thisLease, as so modified, is in full force and effect), the amount of any securitydeposit, and the date to which the rent and other charges are paid in advance,if any, and [2] acknowledging that there are not, to Lessee’s knowledge, anyuncured defaults on the part of Lessor hereunder, or specifying such defaultsif any are claimed.  Any such statementmay be conclusively relied upon by any prospective purchaser or encumbrancer tothe Premises.

 

                                                (b)  AtLessor’ option, Lessee’s failure to deliver such statement within such timeshall be a material breach of this Lease or shall be conclusive upon Lessee [1]that this Lease is in full force and effect, without modification except as maybe represented by Lessor, [2] that there are no uncured defaults in lessor’sperformance, and [3] that not more than one month’s rent has been paid inadvance or such failure may be considered by Lessor as a default by Lesseeunder this Lease.

 

                                                (c)  IfLessor desires to finance, refinance, or sell the Premises, or any partthereof, Lessee hereby agrees to deliver to any lender or purchaser designatedby Lessor such financial statements of Lessee as may be reasonably required bysuch lender or purchaser.  Suchstatements shall include the past three years’ financial statements ofLessee.  All such financial statementsshall be received by Lessor and such lender or purchaser in confidence andshall be used only for the purposes herein set forth.

 

32.                                 **COMMON AREA EXPENSES:**  In the event the demised premises aresituated in a shopping center or in a commercial building in which there arecommon areas, Lessee agrees to pay his pro-rata share of maintenance, taxes,and insurance increases for the common area.

 

33.                                 **ADDENDUM:** An addendum, signed by the parties [X] is attached, [ ] is not attachedhereto.

 

**ENTIREAGREEMENT:**  Theforegoing constitutes the entire agreement between the parties and may bemodified only by a writing signed by both parties.  The following Exhibits, if any, have been made a part of thislease before the parties’ execution hereof:

 

See ADDENDUM #1 and Exhibit “A”

 

***LESSEE UNDERSTANDS THAT THIS IS A PROPOSAL TOLEASE AND DOES NOT BIND LESSOR UNTIL APPROVED AND ACKNOWLEDGED BY LESSOR*.**

 

The undersigned Lessee hereby acknowledges receipt of a copy hereof.

 

 

 
|                    | AGREED  LESSEE:                           |                 | AGREED  LESSOR: |                 |
|-------------------------|-------------------------------------------|----------------------|-----------------|----------------------|
| Monterey  Pasta Company |                                      | Conrad  Family Trust |            |
| a Delaware  Corporation |                                      |                 |            |                 |
|                    |                                      |                 |            |                 |   |
| By:                     | /s/ Steve  Brinkman                       |                 |            | By:                  | /s/ Jim  Conrad |   |
|                    | Steve  Brinkman, Chief Financial Officer. |                 |            | Jim Conrad,  Trustee |   |
| Date:                   | 01-02-03                                  |                 | Date:           | 1-3-03               |   |
| Address:                | 1528 Moffett  Street                      |                 | Address:        | 1518 Moffett  Street |   |
|                    | Salinas, CA  93905                        |                 |            | Salinas, CA  93905   |   |
|                    |                                      |                 |            |                 |   |
| Phone:                  | 753-6262                                  |                 | Phone:          | 422-1722             |   |
| Fax:                    | 755-0684                                  |                 | Fax:            | 422-1762             |   |
|                         |                                           |                      |                 |                      |  |  |

 

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ADDENDUM # 1

 

THIS ADDENDUM IS ATTACHED TOAND MADE A PART THE OF THAT CERTAIN LEASE AGREEMENT DATED DECEMBER 20, 2002WHEREIN MONTEREY PASTA COMPANY IS REFERRED TO AS LESSEE AND THE CONRAD FAMILYTRUST IS REFERRED TO AS LESSOR FOR THAT REAL PROPERTY COMMONLY KNOWN AS 1514MOFFETT STREET SUITE E. SALINAS, CALIFORNIA 93905.

 

7.                         MAINTENANCE,REPAIRS, ALTERATIONS:

 

Lessor atLessor’s sole cost and expense shall complete the following improvements in thedemised premises:

 

a. Paint theentire premises with building standard paint, color by tenant.

b. Install newcarpet with building standard carpet, color to be selected by tenant.

c. Constructtwo new offices as shown on Exhibit “A” to include wallpaper on the wallsdesignated (W) with building standard wallpaper, color to be selected bytenant, and a glass window 4’x 4’ in the walls designated by (G) the remainingwalls to be painted with standard paint and color as selected in paragraph a.

d. Heating andAir Conditions in the new offices.

 

8.                         INDEMNIFICATION:

Lessee shallindemnify and hold Lessor harmless against any and all claims arising from thenegligence of Lessee, its officers, agents, invitees or employees, or arisingfrom the failure of Tenant to comply with any covenant or agreement required tobe performed herein by Lessee, and shall at Lessee’s own expense defend Lessoragainst suits or actions arising from such injury or damage and all appealstherefrom, and shall satisfy from discharge any judgement or decree that may beawarded against Lessor in any such proceeding. Lessee shall not be required to indemnify, defend or hold Lessorharmless from or against claims, liability, loss, cost or expenses arising outof (i) the breach by Lessor or Lessor’s agents, employees, licensees, invitees,or independent contractors (collectively “Lessor’s Agents”), of any covenant,representation or warranty under this Lease, or (ii) any negligence or willfulmisconduct of Lessor or Lessor’s Agents. Lessor shall indemnify and hold Lessee harmless against any and allclaims from the negligence of Lessor  orLessor’s Agents or arising from Lessor’s failure to comply with any covenant oragreement required to be performed by Lessor herein and Lessor shall at Lessor’sexpense, defend Lessee against any actions arising from such injury or damageand all appeals therefrom and shall satisfy and discharge any judgement ordecree that may be awarded against Lessee in any such proceeding.

 

34.                   PARKING:

 

Lessee shallbe allowed along with the other tenants in the complex the non-exclusive use offour (4) parking spaces on a first come first serve basis.

 
| Agreed  Lessee:          | Agreed  Lessor:                           |
|--------------------------|-------------------------------------------|
|                     |                                      |   |   |
| Monterey  Pasta Company  | Conrad  Family Trust                      |
| a Delaware  Corporation. |                                      |   |
|                     |                                      |   |   |
| By:                      |  /s/ Steve Brinkman                  |   | By: |  /s/ Jim Conrad |   |
|                     | Steve  Brinkman,  Chief Financial Officer |   | Jim Conrad,  Trustee |
|                     |                                      |   |   |
| Date:                    |  1-02-03                             | Date: |  1-3-03 |
|                          |                                           |  |  |  |  |

 

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Exhibit "A"

 

 

[GRAPHIC]

 

 

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