EXHIBIT 10.01
STANDARD INDUSTRIAL LEASE - GROSS
AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION
1. Parties. This Lease, dated, for reference purposes
only, December 12, 1989, is made by and between James Emmi
(herein called "Lessor") and Nelco Products Inc. (herein
called "Lessee").
2. Premises. Lessor hereby leases to Lessee and Lessee
leases from Lessor for the term, at the rental, and upon all
of the conditions set forth herein, that certain real
property situated in the County of Orange, State of
California, commonly known as 1100 East Kimberly Avenue,
Anaheim, CA 92801 and described as approximately 12,800
square foot industrial building on approximately 30,000
square fee of land. Said real property including the land
and all improvements therein, is herein called the
"Premises".
3. Term.
3.1 Term. The term of this Lease shall be for 60
months commencing on June 21, 1990 and ending on June 20,
1995 unless sooner terminated pursuant to any provision
hereof.
3.2 Delay in Possession. Notwithstanding said
commencement date, if for any reason Lessor cannot deliver
possession of the Premises to Lessee on said date, Lessor
shall not be subject to any liability therefor, nor shall
such failure affect the validity of this Lease or the
obligations of Lessee hereunder or extend the term hereof,
but in such case, Lessee shall not be obligated to pay rent
until possession of the Premises is tendered to Lessee;
provided, however, that if Lessor shall not have delivered
possession of the Premises within sixty (60) days from said
commencement date, Lessee may, at Lessee's option, by notice
in writing to Lessor within ten (10) days thereafter, cancel
this Lease, in which event the parties shall be discharged
from all obligations hereunder, provided further, however,
that if such written notice of lessee is not received by
Lessor within said ten (10) day period, Lessee's right to
cancel this Lease hereunder shall terminated and be of no
further force or effect.
3.3 Early Possession. If Lessee occupies the Premises
prior to said commencement date, such occupancy shall be
subject to all provisions hereof, such occupancy shall not
advance the termination date, and Lessee shall pay rent for
such period at the initial monthly rates set forth below.
4. Rent. Lessee shall pay to Lessor as rent for the
Premises, monthly payments of $4400.00, in advance, on the 21
day of each month of the term hereof, as rent for monthly
rental rate shall increase or decrease as per C.P.I.
adjustment as defined in addendum (A-1) as well as tax and
insurance adjustments.
Rent for any period during the term hereof which is for less
than one month shall be a pro rata portion of the monthly
installment. Rent shall be payable in lawful money of the
United States to Lessor at the address stated herein or to
such other person or at such other places as Lessor may
designate in writing.
5. Security Deposit. Lessee shall deposit with Lessor upon
execution hereof $ N/A as security for Lessee's faithful
performance of Lessee's obligations hereunder. If Lessee
fails to pay rent or other charges due hereunder, or
otherwise defaults with respect to any provision of this
Lease, Lessor may use, apply or retain all or any portion of
said deposit for the payment of any rent or other charge in
default or for the payment of any other sum to which Lessor
may become obligated by reason of Lessee's default, or to
compensate Lessor for any loss or damage which Lessor may
suffer thereby. If Lessor so uses or applies all of any
portion of said deposit, Lessee shall within ten (10) days
after written demand therefor deposit cash with Lessor in an
amount sufficient to restore said deposit to the full amount
hereinabove stated and Lessee's failure to do so shall be a
material breach of this Lease. If the monthly rent shall,
from time to time, increase during the term of this Lease,
Lessee shall thereupon deposit with Lessor additional
security deposit so that the amount of security deposit held
by Lessor shall at all times bear the same proportion to
current rent as the original security deposit bears to the
original monthly rent set forth in paragraph 4 hereof.
Lessor shall not be required to keep said deposit separate
from its general accounts. If Lessee performs all of
Lessee's obligations hereunder, said deposit, or so much
thereof as has not theretofore been applied by Lessor shall
be returned, without payment of interest or other increment
for its use, to Lessee (or, at Lessor's option, to the last
assignee, if any, of Lessee's interest hereunder) at the
expiration of the term hereof, and after Lessee has vacated
the Premises. No trust relationship is created herein
between Lessor and Lessee with respect to said Security
Deposit.
6. Use.
6.1 Use. The Premises shall be used and occupied only
for manufacturing, warehousing and related services or any
other use which is reasonably comparable and for no other
purpose.
6.2 Compliance with Law.
(a) Lessor warrants to Lessee that the Premises,
in its state existing on the date that the Lease term
commences, but without regard to the use for which Lessee
will use the Premises, does not violate any covenants or
restrictions of record, or any applicable building code,
regulation or ordinance in effect on such Lease term
commencement date. In the event it is determined that this
warranty has been violated, then it shall be the obligation
of the Lessor, after written notice from Lessee, to promptly,
at Lessor's sole cost and expense, rectify any such
violation. In the event Lessee does not given to Lessor
written notice of the violation of this warranty within six
months from the date that the Lease term commences, the
correction of same shall be the obligation of the Lessee or
Lessee's sole cost. The warranty contained in this paragraph
6.2(a) shall be of no force or effect if, prior to the date
of this Lease, Lessee was the owner or occupant of the
Premises, and, in such event, Lessee shall correct any such
violation effect if, prior to the date of this Lease, Lessee
was the owner or occupant of the Premises, and, in such
event, Lessee shall correct any such violation at Lessee's
sole cost.
(b) Except as provided in paragraph 6.2(a), Lessee
shall, at Lessee's expense, comply promptly with all
applicable statutes, ordinances, rules, regulations, orders,
covenants and restrictions of record, and requirements in
effect during the term or any part of the term hereof,
regulating the use by Lessee of the Premises. Lessee shall
not use nor permit the use of the Premises in any manner that
will tend to create waste or a nuisance or, if there shall be
more than one tenant in the building containing the Premises,
shall tend to disturb such other tenants.
6.3 Condition of Premises.
(a) Lessor shall deliver the Premises to Lessee
clean and free of debris on Lease commencement date (unless
Lessee is already in possession) and Lessor further warrants
to Lessee that the plumbing, lighting, air-conditioning,
heating, and leading doors in the Premises shall be in good
operating condition on the Lease commencement date. In the
event that it is determined that this warranty has been
violated, then it shall be the obligation of Lessor, after
receipt of written notice from Lessee setting forth with
specificity the nature of the violation, to promptly, at
Lessor's sale cost, rectify such violation. Lessee's failure
to give such written notice to Lessor within thirty (30) days
after the Lease commencement date shall cause the conclusive
presumption that Lessor has complied with all of Lessor's
obligations hereunder. The warranty contained in this
paragraph 6.3(a) shall be of no force or effect if prior to
the date of this Lease, Lessee was the owner or occupant of
the Premises.
(b) Except as otherwise provided in this Lease,
Lessee hereby accepts the Premises in their condition
existing as of the Lease commencement date or the date that
Lessee takes possession of the Premises, whichever is
earlier, subject to all applicable zoning, municipal, county
and state laws, ordinances and regulations governing and
regulating the use of the Premises, and any covenants or
restrictions of record, and accepts this Lease subject
thereto and to all matters disclosed thereby and by any
exhibits attached hereto. Lessee acknowledges that neither
Lessor nor Lessor's agent has made any representation or
warranty as to the present or future suitability of the
Premises for the conduct of Lessee's business.
7. Maintenance, Repairs and Alterations.
7.1 Lessor's Obligations. Subject to the provisions of
Paragraphs 6, 7.2 and 9 and except for damage caused by any
negligent or intentional act or omission of Lessee, Lessee's
agents, employees, or invitees in which event Lessee shall
repair the damage, Lessor, at Lessor's expense, shall keep in
good order, condition and repair the foundations, exterior
walls and the exterior roof of the Premises. Lessor shall
not, however, be obligated to paint such exterior, nor shall
Lessor be required to maintain the interior surface of
exterior walls, windows, doors or plate glass. Lessor shall
have no obligation to make repairs under this Paragraph 7.1
until a reasonable time after receipt of written notice of
the need for such repairs, Lessee expressly waives the
benefits of any statute now or hereafter in effect which
would otherwise afford Lessee the right to make repairs at
Lessor's expense or to terminate this Lease because of
Lessor's failure to keep the Premises in good order,
condition and repair.
7.2 Lessee's Obligations.
(a) Subject to the provisions of Paragraph 6, 7.1
and 9, Lessee, at Lessee's expense, shall keep in good order,
condition and repair the Premises and every part thereof
(whether or not the damaged portion of the Premises or the
means of repairing the same are reasonably or readily
accessible to Lessee) including, without limiting the
generality of the foregoing, all plumbing, heating, air
conditioning, (Lessee shall procure and maintain, at Lessee's
expense, an air conditioning system maintenance contract)
ventilating, electrical and lighting facilities and equipment
within the Premises, fixtures, interior walls and interior
surface of exterior walls, ceilings, windows, doors, plate
glass, and skylights, located within the Premises, and all
landscaping, driveways, parking lots, fences and signs
located in the Premises and all sidewalks and parkways
adjacent to the Premises.
(b) If Lessee fails to perform Lessee's
obligations under this Paragraph 7.2 or under any other
paragraph of this Lease, Lessor may at Lessor's option enter
upon the Premises after 10 days' prior written notice to
Lessee (except in the case of emergency, in which case no
notice shall be required), perform such obligations on
Lessee's behalf and put the Premises in good order, condition
and repair, and the cost thereof together with interest
thereon at the maximum rate then allowable by law shall be
due and payable as additional rent to Lessor together with
Lessee's next rental installment.
(c) On the last day of the term hereof, or on any
sooner termination, Lessee shall surrender the Premises to
Lessor in the same condition as received, ordinary wear and
tear excepted, clean and free of debris. Lessee shall repair
any damage to the Premises occasioned by the installation or
removal of its trade fixtures, furnishings and equipment.
Notwithstanding anything to the contrary otherwise stated in
this Lease, Lessee shall leave the air lines, power panels,
electrical distribution systems, lighting fixtures, space
heaters, air conditioning, plumbing and fencing on the
premises in good operating condition.
7.3 Alterations and Additions.
(a) Lessee shall not, without Lessor's prior
written consent make any alterations, improvements,
additions, or Utility Installations in, on or about the
Premises, except for nonstructural alterations not exceeding
$2,500 in cumulative costs during the term of this Lease. In
any event, whether or not in excess of $2,500 in cumulative
cost, Lessee shall make no change or alteration to the
exterior of the Premises nor the exterior of the building(s)
on the Premises without Lessor's prior written consent. As
used in this Paragraph 7.3 the term "Utility Installation"
shall mean carpeting, window coverings, air lines, power
panels, electrical distribution systems, lighting fixtures,
space heaters, air conditioning, plumbing and fencing.
Lessor may require that Lessee remove any or all of said
alterations, improvements, additions or Utility Installations
at the expiration of the term, and restore the Premises to
their prior condition. Lessor may require Lessee to provide
Lessor, at Lessee's sole cost and expense, a lien and
completion bond in an amount equal to one and one-half times
the estimated cost of such improvements, to insure Lessor
against any liability for mechanic's and materialmen's liens
and to insure completion of the work. Should Lessee make any
alterations, improvements, additions or Utility Installations
without the prior approval of Lessor, Lessor may require that
Lessee remove any or all of the same.
(b) Any alterations, improvements, additions or
Utility Installations in, or about the Premises that Lessee
shall desire to make and which requires the consent of the
Lessor shall be presented to Lessor in written form, with
proposed detailed plans. If Lessor shall give its consent,
the consent shall be deemed conditioned upon Lessee acquiring
a permit to do so, from appropriate governmental agencies,
the furnishing of a copy thereof to Lessor prior to the
commencement of the work and the compliance by Lessee of all
conditions of said permit in a prompt and expeditious manner.
(c) (#1) Lessee shall pay, when due, all claims
for labor or materials furnished or alleged to have been
furnished to or for Lessee at or for use in the Premises,
which claims are or may be secured by any mechanics' or
materialmen's lien against the Premises or any interest
therein. Lessee shall give Lessor not less than ten (10)
days notice prior to the commencement of any work in the
Premises, and Lessor shall have the right to post notices of
non-responsibility in or on the Premises as provided by law.
If Lessee shall, in good faith, contest the validity of any
such lien, claim or demand, then Lessee shall, at its sole
expense defend itself and Lessor against the same and shall
pay and satisfy any such adverse judgment that may be
rendered thereon before the enforcement thereof against the
Lessor or the Premises, upon the condition that if Lessor
shall require, Lessee shall furnish to Lessor a surety bond
satisfactory to Lessor in an amount equal to such contested
lien claim or demand indemnifying Lessor against liability
for the same and holding the Premises free from the effect of
such lien or claim. In addition, Lessor may require Lessee
to pay Lessor's attorneys fees and costs in participating in
such action if Lessor shall decide it is to its best interest
to do so.
(d) (#2) Unless Lessor requires their removal, as
set forth in Paragraph 7.3(a), all alterations, improvements,
additions and Utility Installations (whether or not such
Utility Installations constitute trade fixtures of Lessee),
which may be made on the Premises, shall become the property
of Lessor and remain upon and be surrendered with the
Premises at the expiration of the term. Notwithstanding the
provisions of this Paragraph 7.3(d), Lessee's machinery and
equipment, other than that which is affixed to the Premises
so that it cannot be removed without material damage to the
Premises, shall remain the property of Lessee and may be
removed by Lessee subject to the provisions of Paragraph
7.2(c).
8. Insurance; Indemnity.
8.1 Liability Insurance - Lessee. Lessee shall, at
Lessee's expense, obtain and keep in force during the term of
this Lease a policy of Combined Single Limit Bodily Injury
and Property Damage insurance insuring Lessee and Lessor
against any liability arising out of the use, occupancy or
maintenance of the Premises and all other areas appurtenant
thereto. Such insurance shall be in an amount not less than
$500,000 per occurrence. The policy shall insure performance
by Lessee of the indemnity provisions of this Paragraph 8.
The limits of said insurance shall not, however, limit the
liability of Lessee hereunder.
8.2 Liability Insurance - Lessor. Lessor shall obtain
and keep in force during the term of this Lease a policy of
Combined Single Limit Bodily Injury and Property Damage
Insurance, insuring Lessor, but not Lessee, against any
liability arising out of the ownership, use, occupancy or
maintenance of the Premises and all areas appurtenant thereto
in an amount not less than $500,000 per occurrence.
8.3 Property Insurance. Lessor shall obtain and keep
in force during the term of this Lease a policy or policies
of insurance covering loss or damage to the Premises, but not
Lessee's fixtures, equipment or tenant improvements in an
amount not to exceed the full replacement value thereof, as
the same may exist from time to time, providing protection
against all perils included within the classification of
fire, extended coverage, vandalism, malicious mischief, flood
(in the event same is required by a lender having a lien on
the Premises) special extended perils ("all risk", as such
term is used in the insurance industry) but not plate glass
insurance. In addition, the Lessor shall obtain and keep in
force, during the term of this Lease, a policy or rental
value insurance covering a period of one year, with loss
payable to Lessor, which insurance shall also cover all real
estate taxes and insurance costs for said period.
8.4 Payment of Premium Increase.
(a) Lessee shall pay to Lessor, during the term
hereof, in addition to the rent, the amount of any increase
in premiums for the insurance required under Paragraphs 8.2
and 8.3 over and above such premiums paid during the Base
Period, as hereinafter defined, whether such premium increase
shall be the result of the nature of Lessee's occupancy, any
act or omission of Lessee, requirements of the holder of a
mortgage or deed of trust covering the Premises, increased
valuation of the Premises, or general rate increases. IN the
event that the Premises have been occupied previously, the
words "Base Period" shall mean the last twelve months of the
prior occupancy. In the event that the Premises have never
been previously occupied, the premiums during the "Base
Period" shall be deemed to be the lowest premiums reasonably
obtainable for said insurance assuming the most nominal use
of the Premises. Provided, however, in lieu of the Base
Period, the parties may insert a dollar amount at the end of
this sentence which figure shall be considered as the
insurance premium for the Base Period: $1703.00. In no
event, however, shall Lessee be responsible for any portion
of the premium cost attributable to liability insurance
coverage in excess of $1,000,000 procured under paragraph
8.2.
(b) Lessee shall pay any such premium increases to
Lessor within 30 days after receipt by Lessee of a copy of
the premium statement or other satisfactory evidence of the
amount due. If the insurance policies maintained hereunder
cover other improvements in addition to the Premises, Lessor
shall also deliver to Lessee a statement of the amount of
such increase attributable to the Premises and showing in
reasonable detail, the manner in which such amount was
computed. If the term of this Lease shall not expire
concurrently with the expiration of the period covered by
such insurance, Lessee's liability for premium increases
shall be prorated on an annual basis.
(c) If the Premises are part of a larger building,
then Lessee shall not be responsible for paying any increase
in the property insurance premium caused by the acts or
omissions of any other tenant of the building of which the
Premises are a part.
8.5. Insurance Policies. Insurance required hereunder
shall be in companies holding a "General Policyholders
Rating" of at least B plus, or such other rating as may be
required by a lender having a lien on the Premises, as set
forth in the most current issue of "Best's Insurance Guide".
Lessee shall deliver to Lessor copies of policies of
liability insurance required under Paragraph 8.1 or
certificates evidencing the existence and amounts of such
insurance. No such policy shall be cancelable or subject to
reduction of coverage or other modification except after
thirty (30) days prior written notice to Lessor. Lessee
shall, at least thirty (30) days prior to the expiration of
such policies, furnish Lessor with renewals or "binders"
thereof, or Lessor may order such insurance and charge the
cost thereof to Lessee, which amount shall be payable by
Lessee upon demand. Lessee shall not do or permit to be done
anything which shall invalidate the insurance policies
referred to in Paragraph 8.3.
9. Damage or Destruction.
9.1 Definitions.
(a) "Premises Partial Damage" shall herein mean
damage or destruction to the Premises to the extent that the
cost of repair is less than 50% of the fair market value of
the Premises immediately prior to such damage or destruction.
"Premises Building Partial Damage" shall herein mean damage
or destruction to the building of which the Premises are a
part to the extent that the cost of repair, is less than 50%
of the fair market value of such building as a whole
immediately prior to such damage or destruction.
(b) "Premises Total Destruction" shall herein mean
damage or destruction to the Premises to the extent that the
cost of repair is 50% or more of the fair market value of the
Premises immediately prior to such damage or destruction.
"Premises Building Total Destruction" shall herein mean
damage or destruction to the building of which the Premises
are a part to the extent that the cost of repair is 50% or
more of the fair market value of such building as a whole
immediately prior to such damage or destruction.
(c) "Insured Loss" shall herein mean damage or
destruction which was caused by an event required to be
covered by the insurance described in paragraph 8.
9.2 Partial Damage - Insured Loss. Subject to the
provisions of paragraph 9.4, 9.5 and 9.6, if at any time
during the term of this Lease there is damage which is an
Insured Loss and which falls into the classification of
Premises Partial Damage or Premises Building Partial Damage,
then Lessor shall, at Lessor's sole cost, repair such damage,
but not Lessee's fixtures, equipment or tenant improvements,
as soon as reasonably possible and this Lease shall continue
in full force and effect.
9.3 (#3) Partial Damage - Uninsured Loss. Subject to
the provisions of Paragraphs 9.4, 9.5 and 9.6, if at any time
during the term of this Lease there is damage which is not an
Insured Loss and which falls within the classification of
Premises Partial Damage or Premises Building Partial Damage,
unless caused by a negligent or willful act of Lessee (in
which event Lessee shall make the repairs at Lessee's
expense), Lessor may at Lessor's option either (i) repair
such damage as soon as reasonably possible at Lessor's
expense, in which event this Lease shall continue in full
force and effect, or (ii) give written notice to Lessee
within thirty (30) days after the date of the occurrence of
such damage of Lessor's intention to cancel and terminate
this Lease, as of the date of the occurrence of such damage.
In the event Lessor elects to give such notice of Lessor's
intention to cancel and terminate this Lease, Lessee shall
have the right within ten (10) days after the receipt of such
notice to give written notice to Lessor of Lessee's intention
to repair such damage at Lessee's expense, without
reimbursement from Lessor, in which event this Lease shall
continue in full force and effect, and Lessee shall proceed
to make such repairs as soon as reasonably possible. If
Lessee does not give such notice within such 10-day period
this Lease shall be cancelled and terminated as of the date
of the occurrence of such damage.
9.4 Total Destruction. If at any time during the term
of this Lease there is damage, whether or not an Insured
Loss, (including destruction required by any authorized
public authority), which falls into the classification of
Premises Total Destruction or Premises Building Total
Destruction, this Lease shall automatically terminate as of
the date of such total destruction.
9.5 Damage Near End of Term.
(a) If at any time during the last six months of
the term of this Lease there is damage, whether or not an
Insured Loss, which falls within the classification of
Premises Partial Damage, Lessor may at Lessor's option cancel
and terminate this Lease as of the date of occurrence of such
damage by giving written notice to Lessee of Lessor's
election to do so within 30 days after the date of occurrence
of such damage.
(b) Notwithstanding paragraph 9.59(a), in the
event that Lessee has an option to extend or renew this
Lease, and the time within which said option may be exercised
has not yet expired, Lessee shall exercise such option, if it
is to be exercised at all, no later than 20 days after the
occurrence of an Insured Loss falling within the
classification of Premises Partial Damage during the last six
months of the term of this Lease. If Lessee duly exercises
such option during said 20 day period, Lessor shall, at
Lessor's expense, repair such damage as soon as reasonably
possible and this Lease shall continue in full force and
effect. If Lessee fails to exercise such option during said
20 day period, then Lessor may at Lessor's option terminate
and cancel this Lease as of the expiration of said 20 day
period by giving written notice to Lessee of Lessor's
election to do so within 10 days after the expiration of said
20 day period, notwithstanding any term or provision in the
grant of option to the contrary.
9.6 Abatement of Rent; Lessee's Remedies.
(a) In the event of damage described in paragraphs
9.2 or 9.3, and Lessor or Lessee repairs or restores the
Premises pursuant to the provisions of this Paragraph 9, the
rent payable hereunder for the period during which such
damage, repair or restoration continues shall be abated in
proportion to the degree to which Lessee's use of the
Premises is impaired. Except for abatement of rent, if any,
Lessee shall have no claim against Lessor for any damage
suffered by reason of any such damage, destruction, repair or
restoration.
(b) (#4) If Lessor shall be obligated to repair or
restore the Premises under the provisions of this Paragraph 9
and shall not commence such repair or restoration within 90
days after such obligations shall accrue, Lessee may at
Lessee's option cancel and terminate this Lease by giving
Lessor written notice of Lessee's election to do so at any
time prior to the commencement of such repair or restoration.
In such event this Lease shall terminate as of the date of
such notice.
9.7 Termination - Advance Payments. Upon termination
of this Lease pursuant to this Paragraph 9, an equitable
adjustment shall be made concerning advance rent and any
advance payments made by Lessee to Lessor. Lessor shall, in
addition, return to Lessee so much of Lessee's security
deposit as has not theretofore been applied by Lessor.
9.8 Waiver. Lessor and Lessee waive the provisions of
any statutes which relate to termination of leases when
leased property is destroyed and agree that such event shall
be governed by the terms of this Lease.
10. Real Property Taxes.
10.1 Payment of Tax Increase. Lessor shall pay the real
property tax, as defined in paragraph 10.3, applicable to the
Premises; provided, however, that Lessee shall pay, in
addition to rent, the amount, if any, by which real property
taxes applicable to the Premises increase over the fiscal
real estate tax year 1990-1991. Such payment shall be made
by Lessee within thirty (30) days after receipt of Lessor's
written statement setting forth the amount of such increase
and the computation thereof. If the term of this Lease shall
not expire concurrently with the expiration of the tax fiscal
year, Lessee's liability for increased taxes for the last
partial lease year shall be prorated on an annual basis.
10.2 Additional Improvements. Notwithstanding paragraph
10.1 hereof, Lessee shall pay to Lessor upon demand therefor
the entirety of any increase in real property tax if assessed
solely by reason of additional improvements placed upon the
Premises by Lessee or at Lessee's request.
10.3 Definition of "Real Property Tax". As used herein,
the term "real property tax" shall include any form of real
estate tax or assessment, general, special, ordinary or
extraordinary, and any license fee, commercial rental tax,
improvement bond or bonds, levy or tax (other than
inheritance, personal income or estate taxes) imposed on the
Premises by any authority having the direct or indirect power
to tax, including any city, state or federal government, or
any school, agricultural, sanitary, fire, street, drainage or
other improvement district thereof, as against any legal or
equitable interest of Lessor in the Premises or in the real
property of which the Premises are a part, as against
Lessor's right to rent or other income therefrom, and as
against Lessor's business of leasing the Premises. The term
"real property tax" shall also include any tax, fee levy,
assessment or charge (i) in substitution of, partially or
totally, any tax, fee levy, assessment or charge hereinabove
included within the definition of "real property tax," or
(ii) the nature of which was hereinbefore included within the
definition of "real property tax", or (iii) which is imposed
for a service or right not charged prior to June 1, 1978, or,
if previously charged, has been increased since June 1, 1978,
or (iv) which is imposed as a result of a transfer, either
partial or total, of Lessor's interest in the Premises or
which is added to a tax or charge hereinbefore included
within the definition of real property tax by reason of such
transfer, or (v) which is imposed by reason of this
transaction, any modifications or changes hereto, or any
transfers hereof.
10.4 Joint Assessment. If the Premises are not
separately assessed, Lessee's liability shall be an equitable
proportion of the real property taxes for all of the land and
improvements included within the tax parcel assessed, such
proportion to be determined by Lessor from the respective
valuations assigned in the assessor's work sheets or such
other information as may be reasonably available. Lessor's
reasonable determination thereof, in good faith, shall be
conclusive.
10.5 Personal Property Taxes.
(a) Lessee shall pay prior to delinquency all
taxes assessed against and levied upon trade fixtures,
furnishings, equipment and all other personal property of
Lessee contained in the Premises or elsewhere. When
possible, Lessee shall cause said trade fixtures,
furnishings, equipment and all other personal property to be
assessed and billed separately from the real property of
Lessor.
(b) If any of Lessee's said personal property
shall be assessed with Lessor's real property, Lessee shall
pay Lessor the taxes attributable to Lessee within 10 days
after receipt of a written statement setting forth the taxes
applicable to Lessee's property.
11. Utilities. Lessee shall pay for all water, gas, heat,
light, power, telephone and other utilities and services
supplied to the Premises, together with any taxes thereon.
If any such services are not separately metered to Lessee,
lessee shall pay a reasonable proportion to be determined by
Lessor or all charges jointed metered with other premises.
12. Assignment and Subletting.
12.1 Lessors's Consent Required. Lessee shall not
voluntarily or by operation of law assign, transfer,
mortgage, sublet, or otherwise transfer or encumber all or
any part of Lessee's interest in this Lease or in the
Premises, without Lessor's prior written consent, which
Lessor shall not unreasonably withhold. Lessor shall respond
to Lessee's request for consent hereunder in a timely manner
and any attempted assignment, transfer, mortgage, encumbrance
or subletting without such consent shall be void, and shall
constitute a breach of this Lease.
12.2 Lessee Affiliate. Notwithstanding the provisions
of paragraph 12.1 hereof, Lessee may assign or sublet the
Premises, or any portion thereof, without Lessor's consent,
to any corporation which controls, is controlled by or is
under common control with Lessee, or to any corporation
resulting from the merger or consolidation with Lessee, or to
any person or entity which acquires all the assets of Lessee
as a going concern of the business that is being conducted on
the Premises, provided that said assignee assumes, in full,
the obligations of Lessee under this Lease. Any such
assignment shall not, in any way, affect or limit the
liability of Lessee under the terms of this Lease even if
after such assignment or subletting the terms of this Lease
are materially changed or altered without the consent of
Lessee, the consent of whom shall not be necessary.
12.3 No Release of Lessee. Regardless of Lessor's
consent, no subletting or assignment shall release Lessee of
Lessee's obligation or alter the primary liability of Lessee
to pay the rent and to perform all other obligations to be
performed by Lessee hereunder. The acceptance of rent by
Lessor from any other person shall not be deemed to be a
waiver by Lessor of any provision hereof. Consent to one
assignment or subletting shall not be deemed consent to any
subsequent assignment or subletting. In the event of default
by any assignee of Lessee or any successor of Lessee, in the
performance of any of the terms hereof, Lessor may proceed
directly against Lessee without the necessity of exhausting
remedies against said assignee. Lessor may consent to
subsequent assignments or subletting of this Lease or
amendments or modifications to this Lease with assignees of
Lessee, without notifying Lessee, or any successor of Lessee,
and without obtaining its or their consent thereto and such
action shall not relieve Lessee of liability under this
Lease.
12.4 Attorney's Fees. In the event Lessee shall assign
or sublet the Premises or request the consent of Lessor to
any assignment or subletting or if Lessee shall request the
consent of Lessor for any act Lessee proposes to do then
Lessee shall pay Lessor's reasonable attorneys fees incurred
in connection therewith, such attorneys fees not to exceed
$350.00 for each such request.
13. Defaults; Remedies.
13.1 Defaults. The occurrence of any one or more of
the following events shall constitute a material default and
breach of this Lease by Lessee:
(a) The vacating or abandonment of the Premises by
Lessee.
(b) (#5) The failure by Lessee to make any payment
of rent or any other payment required to be made by Lessee
hereunder, as and when due, where such failure shall
continue for a period of three days after written notice
thereof from Lessor to Lessee. In the event that Lessor
serves Lessee with a Notice to Pay Rent or Quit pursuant to
applicable Unlawful Detainer statues such Notice to Pay Rent
or Quit shall also constitute the notice required by this
subparagraph.
(c) The failure by Lessee to observe or perform
any of the covenants, conditions or provisions of this Lease
to be observed or performed by Lessee, other than described
in paragraph (b) above, where such failure shall continue for
a period of 30 days after written notice thereof from Lessor
to Lessee; provided, however, that if the nature of Lessee's
default is such that more than 30 days are reasonably
required for its cure, then Lessee shall not be deemed to be
in default if Lessee commenced such cure within said 30-day
period and thereafter diligently prosecutes such cure to
completion.
(d) (i) The making by Lessee of any general
arrangement or assignment for the benefit of creditors; (ii)
Lessee becomes a "debtor" as defined in 11 U.S.C. 101 or any
successor statue thereto (unless, in the case of a petition
filed against Lessee, the same is dismissed within 60 days);
(iii) the appointment of a trustee or receiver to take
possession of substantially all of Lessee's assets located at
the Premises or of Lessee's interest in this Lease, where
possession is not restored to Lessee within 30 days; or (iv)
the attachment, execution or other judicial seizure of
substantially all of Lessee's assets located at the Premises
or of Lessee's interest in this Lease, where such seizure is
not discharged within 30 days. Provided, however, in the
event that any provision of this paragraph 13.1(d) is
contrary to any applicable law, such provision shall be of no
force or effect.
(e) The discovery by Lessor that any financial
statement given to Lessor by Lessee, any assignee of Lessee,
any subtenant of Lessee, any successor in interest of Lessee
or any guarantor of Lessee's obligation hereunder, and any of
them, was materially false.
13.2 Remedies. In the event of any such material
default or breach by Lessee, Lessor may at any time
thereafter, with or without notice or demand and without
limiting Lessor in the exercise of any right or remedy which
Lessor may have by reason of such default or breach:
(a) Terminate Lessee's right to possession of the
Premises by any lawful means, in which case this Lease shall
terminate and Lessee shall immediately surrender possession
of the Premises to Lessor. In such event Lessor shall be
entitled to recover from Lessee all damages incurred by
Lessor by reason of Lessee's default including, but not
limited to, the cost of recovering possession of the
Premises; expenses of reletting, including necessary
renovation and alteration of the Premises, reasonable
attorney's fees, and any real estate commission actually
paid; the worth at the time of award by the court having
jurisdiction thereof of the amount by which the unpaid rent
for the balance of the term after the time of such award
exceeds the amount of such rental loss for the same period
that Lessee proves could be reasonably avoided; that portion
of the leasing commission paid by Lessor pursuant to
Paragraph 15 applicable to the unexpired term of this Lease.
(b) Maintain Lessee's right to possession in which
case this Lease shall continue in effect whether or not
Lessee shall have abandoned the Premises. In such event
Lessor shall be entitled to enforce all of Lessor's rights
and remedies under this Lease, including the right to recover
the rent as it becomes due hereunder.
(c) Pursue any other remedy now or hereafter
available to Lessor under the laws or judicial decisions of
the state wherein the Premises are located. Unpaid
installments of rent and other unpaid monetary obligations of
Lessee under the terms of this Lease shall bear interest from
the date due at the maximum rate then allowable by law.
13.3 Default by Lessor. Lessor shall not be in default
unless Lessor fails to perform obligations required of Lessor
within a reasonable time, but in no event later than thirty
(30) days after written notice by Lessee to Lessor and to the
holder of any first mortgage or deed of trust covering the
Premises whose name and address shall have theretofore been
furnished to Lessee in writing, specifying wherein Lessor has
failed to perform such obligation; provided, however, that if
the nature of Lessor's obligation is such that more than
thirty (30) days are required for performance then Lessor
shall not be in default if Lessor commences performance
within such 30-day period and thereafter diligently
prosecutes the same to completion.
13.4 Late Charges. (#6) Lessee hereby acknowledges
that late payment by Lessee to Lessor of rent and other sums
due hereunder will cause Lessor to incur costs not
contemplated by this Lease, the exact amount of which will be
extremely difficult to ascertain. Such costs include, but
are not limited to, processing and accounting charges, and
late charges which may be imposed on Lessor by the terms of
any mortgage or trust deed covering the Premises.
Accordingly, if any installment of rent or any other sum due
from Lessee shall not be received by Lessor or Lessor's
designee within ten (10) days after such amount shall be due,
then, without any requirement for notice to Lessee, Lessee
shall pay to Lessor a late charge equal to 6% of such overdue
amount. The parties hereby agree that such late charge
represents a fair and reasonable estimate of the costs Lessor
will incur by reason of late payment by Lessee. Acceptance
or such late charge by Lessor shall in no event constitute a
waiver of Lessee's default with respect to such overdue
amount, nor prevent Lessor from exercising any of the other
rights and remedies granted hereunder. In the event that a
late charge is payable hereunder, whether or not collected,
for three (3) consecutive installments of rent, then rent
shall automatically become due and payable quarterly in
advance, rather than monthly, notwithstanding paragraph 4 or
any other provision of this Lease to the contrary.
13.5 Impounds. In the event that a late charge is
payable hereunder, whether or not collected, for three (3)
installments of rent or any other monetary obligation of
Lessee under the terms of this Lease, Lessee shall pay to
Lessor, if Lessor shall so request, in addition to any other
payments required under this Lease, a monthly advance
installment, payable at the same time as the monthly rent, as
estimated by Lessor, for real property tax and insurance
expenses on the Premises which are payable by Lessee under
the terms of this Lease. Such fund shall be established to
insure payment when due before delinquency of any or all such
real property taxes and insurance premiums. If the amounts
paid to Lessor by Lessee under the provisions of this
paragraph are insufficient to discharge the obligations of
Lessee to pay such real property taxes and insurance premiums
as the same become due, Lessee shall pay to Lessor, upon
Lessor's demand, such additional sums necessary to pay such
obligations. All moneys paid to Lessor under this paragraph
may be intermingled with other moneys of Lessor and shall not
bear interest. In the event of a default in the obligations
of Lessee to perform under this Lease, then any balance
remaining from funds paid to Lessor under the provisions of
this paragraph may, at the option of Lessor, be applied to
the payment of any monetary default of Lessee in lieu of
being applied to the payment of real property tax and
insurance premiums.
14. Condemnation. (#7) If the Premises or any portion
thereof are taken under the power of eminent domain, or sold
under the threat of the exercise of said power (all of which
are herein called "condemnation"), this Lease shall terminate
as to the part so taken as of the date the condemning
authority takes title or possession, whichever first occurs.
If more than 10% of the floor area of the building on the
Premises, or more than 25% of the land area of the Premises
which is not occupied by any building, is taken by
condemnation, Lessee may, at Lessee's option, to be exercised
in writing only within ten 910) days after Lessor shall have
given Lessee written notice of such taking (or in the absence
of such notice, within ten (10) days after the condemning
authority shall have taken possession) terminate this Lease
as of the date the condemning authority takes such
possession. If Lessee does not terminate this Lease in
accordance with the foregoing, this Lease shall remain in
full force and effect as to the portion of the Premises
remaining, except that the rent shall be reduced in the
proportion that the floor area of the building taken bears to
the total floor area of the building situation on the
Premises. (#8) Any award for the taking of all or any part of
the Premises under the power of eminent domain or any payment
made under the threat of the exercise of such power shall be
the property of Lessor, whether such award shall be made as
compensation for diminution in value of the leasehold or for
the taking of the fee, or as severance damages; provided,
however, that Lessee shall be entitled to any award for loss
of or damage to Lessee's trade fixtures and removable
personal property. In the event that this Lease is not
terminated by reason of such condemnation, Lessor shall to
the extent of severance damages received by Lessor in
connection with such condemnation, repair any damage to the
Premises caused by such condemnation except to the extent
that Lessee has been reimbursed therefor by the condemning
authority. Lessee shall pay any amount in excess of such
severance damages required to complete such repair.
15. Broker's Fee.
(a) Upon execution of this Lease by both parties,
Lessor shall pay to N/A Licensed real estate broker(s), a fee
as set forth in a separate agreement between lessor and said
broker(s), or in the event there is no separate agreement
between Lessor and said broker(s), the sum of $____, for
brokerage services rendered by said broker(s) to Lessor in
this transaction.
(b) Lessor further agrees that if Lessee exercises
any Option as defined in paragraph 39.1 of this Lease, which
is granted to Lessee under this Lease, or any subsequently
granted option which is substantially similar to an Option
granted to Lessee under this Lease, or if Lessee acquires any
rights to the Premises or other premises described in this
Lease which are substantially similar to what Lessee would
have acquired had an Option herein granted to Lessee been
exercised, or if Lessee remains in possession of the Premises
after the expiration of the term of this Lease after having
failed to exercise an Option, or if said broker(s) are the
procuring cause of any other lease or safe entered into
between the parties pertaining to the Premises and/or any
adjacent property in which Lessor has an interest, then as to
any of said transactions, Lessor shall pay said broker(s) a
fee in accordance with the schedule of said broker(s) in
effect at the time of execution of this Lease.
(c) Lessor agrees to pay said fee not only on
behalf of Lessor but also on behalf of any person,
corporation, association, or other entity having an ownership
interest in said real property or any part thereof, when such
fee is due hereunder. Any transferee of Lessor's interest in
this Lease, whether such transfer is by agreement or by
operation of law, shall be deemed to have assumed Lessor's
obligation under this Paragraph 15. Said broker shall be a
third party beneficiary of the provisions of this Paragraph
15.
16. Estoppel Certificate.
(a) Lessee shall at any time upon not less than
ten (10) days' prior written notice from Lessor execute,
acknowledge and deliver to Lessor a statement in writing (i)
certifying that this Lease is unmodified and in full force
and effect (or, if modified, stating the nature of such
modification and certifying that this Lease, as so modified,
is in full force and effect) and the date to which the rent
and other charges are paid in advance if any, and (ii)
acknowledging that there are not, to Lessee's knowledge, any
uncured defaults on the part of Lessor hereunder, or
specifying such defaults if any are claimed. Any such
statement may be conclusively relied upon by any prospective
purchaser or encumbrancer of the Premises.
(b) At Lessor's option, Lessee's failure to
deliver such statement within such time shall be a material
breach of this Lease or shall be conclusive upon Lessee (i)
that this Lease is in full force and effect, without
modification, except as may be presented by Lessor, (ii) that
there are no uncured defaults in Lessor's performance, and
(iii) that not more than one month's rent has been paid in
advance or such failure may be considered by Lessor as a
default by Lessee under this Lease.
(c) If Lessor desires to finance, refinance, or
sell the Premises, or any part thereof, Lessee hereby agrees
to deliver to any lender or purchaser designated by Lessor
such financial statements of lessee as may be reasonably
required by such lender or purchaser. Such statements shall
include the past three years' financial statements of Lessee.
All such financial statements shall be received by Lessor and
such lender or purchaser in confidence and shall be used only
for the purposes herein set forth.
17. Lessor's Liability. (#9) The term "Lessor" as used
herein shall mean only the owner or owners at the time in
question of the fee title or a lessee's interest in a ground
lease of the Premises, and except as expressly provided in
Paragraph 15, in the event of any transfer of such title or
interest. Lessor herein named (and in cases of any
subsequent transfers then the grantor) shall be relieved from
and after the date of such transfer of all liability as
respects Lessor's obligations thereafter to be performed,
provided that any funds in the hands of Lessor or the then
grantor at the time of such transfer, in which Lessee has an
interest, shall be delivered to the grantee. The obligations
contained in this Lease to be performed by Lessor shall,
subject as aforesaid, be binding on Lessor's successors and
assigns, only during their respective periods of ownership.
18. Severability. The invalidity of any provision of this
Lease as determined by a court of competent jurisdiction,
shall in no way affect the validity of any other provision
hereof.
19. Interest on Past-due Obligations. Except as expressly
herein provided, any amount due to Lessor not paid when due
shall bear interest at the maximum rate then allowable by law
from the date due. Payment of such interest shall not excuse
or cure any default by Lessee under this Lease, provided,
however, that interest shall not be payable on late charges
incurred by Lessee nor on any amounts upon which late charges
are paid by Lessee.
20. Time of Essence. Time is of the essence.
21. Additional Rent. Any monetary obligations of Lessee to
Lessor under the terms of this Lease shall be deemed to be
rent.
22. Incorporation of Prior Agreements; Amendments. This
Lease contains all agreements of the parties with respect to
any matter mentioned herein. No prior agreement or
understanding pertaining to any such matter shall be
effective. This Lease may be modified in writing only,
signed by the parties in interest at the time of the
modification. Except as otherwise stated in this Lease,
Lessee hereby acknowledges that neither the real estate
broker listed in Paragraph 15 hereof nor any cooperating
broker on this transaction nor the Lessor or any employees or
agents of any of said persons has made any oral or written
warranties or representations to Lessee relative to the
condition or use by Lessee of said Premises and Lessee
acknowledges that Lessee assumes all responsibility regarding
the Occupational Safety Health Act, the legal use and
adaptability of the Premises and the compliance thereof with
all applicable laws and regulations in effect during the term
of this Lease except as otherwise specifically stated in this
Lease.
23. Notices. Any notice required or permitted to be given
hereunder shall be in writing and may be given by personal
delivery or by certified mail, and if given personally or by
mail, shall be deemed sufficiently given if addressed to
Lessee or to Lessor at the address noted below the signature
of the respective parties, as the case may be. Either party
may by notice to the other specify a different address for
notice purposes except that upon Lessee's taking possession
of the Premises, the Premises shall constitute Lessee's
address for notice purposes. A copy of all notices required
or permitted to be given to Lessor hereunder shall be
concurrently transmitted to such party or parties at such
addresses as Lessor may from time to time hereafter designate
by notice to Lessee.
24. Waivers. No waiver by Lessor or any provision hereof
shall be deemed a waiver of any other provision hereof or of
any subsequent breach by Lessee of the same or any other
provision. Lessor's consent to, or approval of any act,
shall not be deemed to render unnecessary the obtaining of
Lessor's consent to or approval of any subsequent act by
Lessee. The acceptance of rent hereunder by Lessor shall not
be a waiver of any preceding breach by Lessee of any
provision hereof, other than the failure of Lessee to pay the
particular rent so accepted, regardless of Lessor's knowledge
of such preceding breach at the time of acceptance of such
rent.
25. Holding Over. If Lessee, with Lessor's consent, remains
in possession of the Premises or any part thereof after the
expiration of the term hereof, such occupancy shall be a
tenancy from month to month upon all the provisions of this
Lease pertaining to the obligations of Lessee, but all
options and rights of first refusal, if any granted under the
terms of this Lease shall be deemed terminated and be of no
further effect during said month to month tenancy.
27. Cumulative Remedies. No remedy or election hereunder
shall be deemed exclusive but shall, wherever possible, be
cumulative with all other remedies at law or in equity.
28. Covenants and Conditions. Each provision of this Lease
performable by Lessee shall be deemed both a covenant and a
condition.
29. Binding Effect; Choice of Law. Subject to any
provisions hereof restricting assignment or subletting by
Lessee and subject to the provisions of Paragraph 17, this
Lease shall bind the parties, their personal representatives,
successors and assigns. This Lease shall be governed by the
laws of the State wherein the Premises are located.
30. Subordination. (#10)
(a) This Lease, at Lessor's option, shall be
subordinate to any ground lease, mortgage, deed of trust, or
any other hypothecation or security now or hereafter placed
upon the real property of which the Premises are a part and
to any and all advances made on the security thereof and to
all renewals, modifications, consolidations, replacements and
extensions thereof. Notwithstanding such subordination,
Lessee's right to quiet possession of the Premises shall not
be disturbed if Lessee is not in default and so long as
Lessee shall pay the rent and observe and perform all of the
provisions of this Lease, unless this Lease is otherwise
terminated pursuant to its terms. If any mortgages, trustee
or ground lessor shall elect to have this Lease prior to the
lien of its mortgage, deed of trust or ground lease, and
shall given written notice thereof to Lessee, this Lease
shall be deemed prior to such mortgage, deed of trust, or
ground lease, whether this Lease is dated prior or subsequent
to the date of said mortgage, deed of trust or ground lease
or the date of recording thereof.
(b) Lessee agrees to execute any documents
required to effectuate an attornment, a subordination or to
make this Lease prior to the lien or any mortgage, deed of
trust or ground lease, as the case may be. Lessee's failure
to execute such documents within 10 days after written demand
shall constitute a material default by Lessee hereunder, or,
at Lessor's option, Lessor shall execute such documents on
behalf of Lessee as Lessee's attorney-in-fact. Lessee does
hereby make, constitute and irrevocably appoint Lessor as
Lessee's attorney-in-fact and in Lessee's name, place and
stead, to execute such documents in accordance with this
paragraph 30(b).
31. Attorney's Fees. If either party or the broker named
herein brings an action to enforce the terms hereof or
declare rights hereunder, the prevailing party in any such
action, on trial or appeal, shall be entitled to his
reasonable attorney's fees to be paid by the losing party as
fixed by the court. The provisions of this paragraph shall
inure to the benefit of the broker named herein who seeks to
enforce a right hereunder.
32. Lessor's Access. (#11) Lessor and Lessor's agents shall
have the right to enter the Premises at reasonable times for
the purpose of inspecting the same, showing the same to
prospective purchasers, lenders, or lessees, and making such
alterations, repairs, improvements or additions to the
Premises or to the building of which they are a part as
Lessor may deem necessary or desirable. Lessor may at any
time place on or about the Premises and ordinary "For Sale"
signs and Lessor may at any time during the last 120 days of
the term hereof place on or about the Premises any ordinary
"For Lease" signs, all without rebate of rent or liability to
Lessee.
33. Auctions. Lessee shall not conduct, nor permit to be
conducted, either voluntarily or involuntarily, any auction
upon the Premises without first having obtained Lessor's
prior written consent. Notwithstanding anything to the
contrary in this Lease, Lessor shall not be obligated to
exercise any standard of reasonableness in determining
whether to grant such consent.
34. Signs. (#12) Lessee shall not pace any sign upon the
Premises without Lessor's prior written consent except that
Lessee shall have the right, without the prior permission of
Lessor to place ordinary and usual for rent or sublet signs
thereon.
35. Merger. The voluntary or other surrender of this Lease
by Lessee, or a mutual cancellation thereof, or a termination
by Lessor, shall not work a merger, and shall, at the option
of Lessor, terminate all or any existing subtenancies or may,
at the option of Lessor, operate as an assignment to Lessor
of any or all of such subtenancies.
36. Consents. Except for paragraph 33 hereof, wherever in
this Lease the consent of one party is required to an act of
the other party, such consent shall not be unreasonably
withheld.
37. Guarantor. In the event that there is a guarantor of
this Lease, said guarantor shall have the same obligations as
Lessee under this Lease.
38. Quiet Possession. Upon Lessee paying the rent for the
Premises and observing and performing all of the covenants
and provisions on Lessee's part to be observed and performed
hereunder, Lessee shall have quiet possession of the Premises
for the entire term hereof subject to all of the provisions
of this Lease. The individuals executing this Lease on
behalf of Lessor represent and warrant to Lessee that they
are fully authorized and legally capable of executing this
Lease on behalf of Lessor and that such execution is binding
upon all parties holding an ownership interest in the
Premises.
39. Options.
39.1 Definition. As used in this paragraph the word
"Options" has the following meaning: (1) the right or option
to extend the term of this Lease or to renew this Lease or to
extend or renew any lease that Lessee has on other property
of Lessor; (2) the option or right of first refusal to lease
the Premises or the right of first offer to lease the
Premises or the right of first refusal to lease other
property of Lessor or the right of first offer to lease other
property of Lessor; (3) the right or option to purchase the
Premises, or the right of first refusal to purchase the
Premises, or the right of first offer to purchase the
Premises or the right or option to purchase other property of
Lessor, or the right of first refusal to purchase other
property of Lessor or the right of first offer to purchase
other property of Lessor.
39.2 Options Personal. Options granted to Lessee in
this Lease are personal to Lessee and may not be exercised or
be assigned, voluntarily or involuntarily, by or to any
person or entity other than Lessee, provided, however, the
Option may be exercised by or assigned to any Lessee
Affiliate as defined in paragraph 12.2 of this Lease. The
options herein granted to Lessee are not assignable separate
and apart from this Lease.
39.3 Multiple Options. In the event that Lessee has any
multiple options to extend or renew this Lease a later option
cannot be exercised unless the prior option to extend or
renew this Lease has been so exercised.
39.4 Effect of Default on Options.
(a) Lessee shall have no right to exercise an
Option, notwithstanding any provision in the grant of Option
to the contrary, (i) during the time commencing from the date
Lessor gives to Lessee a notice of default pursuant to
paragraph 13.1(b) or 13.1(c) and continuing until the default
alleged in said notice of default is cured, or (ii) during
the period of time commencing on the day after a monetary
obligation to Lessor is due from Lessee and unpaid (without
any necessity for notice thereof to Lessee) continuing until
the obligation is paid, or (iii) at any time after an event
of default described in paragraphs 13.1(a), 13.1(d), or
13.1(e) (without any necessity of Lessor to give notice of
such default to Lessee), or (iv) in the event that Lessor has
given to Lessee three or more notices of default under
paragraph 13.1(b), where a late charge becomes payable under
paragraph 13.4 for each of such defaults, or paragraph
13.1(c), whether or not the defaults are cured, during the 12
month period prior to the time that Lessee intends to
exercise the subject option.
(b) The period of time within which an Option may
be exercised shall not be extended or enlarged by reason of
Lessee's inability to exercise an Option because of the
provisions of paragraph 39.4(a).
(c) All rights of Lessee under the provisions of
an Option shall terminate and be of no further force or
effect, notwithstanding Lessee's due and timely exercise of
the Option, if after such exercise and during the term of
this Lease, (i) Lessee fails to pay to Lessor a monetary
obligation of Lessee for a period of 30 days after such
obligation becomes due (without any necessity of Lessor to
give notice thereof to Lessee), or (ii) Lessee fails to
commence to cure a default specified in paragraph 13.1(c)
within 30 days after the date that Lessor gives notice to
Lessee of such default and/or Lessee fails thereafter to
diligently prosecute said cure to completion, or (iii) Lessee
commits a default described in paragraph 13.1(a), 13.1(d) or
13.1(e) (without any necessity of Lessor to give notice of
such default to Lessee), or (iv) Lessor gives to Lessee three
or more notices of default under paragraph 13.1(b), where a
late charge becomes payable under paragraph 13.4 for each
such default, or paragraph 13.1(c), whether or not the
defaults are cured.
40. Multiple Tenant Building. In the event that the
Premises are part of a larger building or group of buildings
ten Lessee agrees that it will abide by, keep and observe all
reasonable rules and regulations which Lessor may make from
time to time for the management, safety, care and cleanliness
of the building and grounds, the parking of vehicles and the
preservation of good order therein as well as for the
convenience of other occupants and tenants of the building.
The violations of any such rules and regulations shall be
deemed a material breach of this Lease by Lessee.
41. Security Measures. Lessee hereby acknowledges that the
rental payable to Lessor hereunder does not include the cost
of guard service or other security measures, and that Lessor
shall have no obligation whatsoever to provide same. Lessee
assumes all responsibility for the protection of Lessee, its
agents and invitees from acts of third parties.
42. Easements. Lessor reserves to itself the right, from
time to time, to grant such easements, rights and dedications
that Lessor deems necessary or desirable, and to cause the
recordation of Parcel Maps and restrictions, so long as such
easements, rights, dedications, Maps and restrictions do not
unreasonably interfere with the Use of the Premises by
Lessee. Lessee shall sign any of the aforementioned
documents upon request of Lessor and failure to do so shall
constitute a material breach of this Lease.
43. Performance Under Protest. If at any time a dispute
shall arise as to any amount or sum of money to be paid by
one party to the other under the provisions hereof, the Party
against whom the obligation to pay the money is asserted
shall have the right to make payment "under protect" and such
payment shall not be regarded as a voluntary payment, and
there shall survive the right on the part of said party to
institute suit for recovery of such sum. If it shall be
adjudged that there was no legal obligation on the part of
said party to pay such sum or any part thereof, said party
shall be entitled to recover such sum or so much thereof as
it was not legally required to pay under the provisions of
this Lease.
44. Authority. If Lessee is a corporation, trust, or
general or limited partnership, each individual executing
this Lease on behalf of such entity represents and warrants
that he or she is duly authorized to execute and deliver this
Lease on behalf of said entity. If Lessee is a corporation,
trust or partnership, Lessee shall, within thirty (30) days
after execution of this Lease, deliver to Lessor evidence of
such authority satisfactory to Lessor.
45. Conflict. Any conflict between the printed provisions
of this Lease and the typewritten or handwritten provisions
shall be controlled by the typewritten or handwritten
provisions.
46. Addendum. Attached hereto is an addendum or addenda
containing paragraphs A-1 through A-3 which constitutes a
part of this Lease.
LESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE
AND EACH TERM AND PROVISION CONTAINED HEREIN AND, BY
EXECUTION OF THIS LEASE, SHOW THEIR INFORMED AND VOLUNTARY
CONSENT THERETO. THE PARTIES HEREBY AGREE THAT, AT THE TIME
THIS LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE
COMMERCIALLY REASONABLE AND EFFECTUATE THE INTENT AND PURPOSE
OF LESSOR AND LESSEE WITH RESPECT TO THE PREMISES.
IF THIS LEASE HAS BEEN FILLED IN IT HAS BEEN
PREPARED FOR SUBMISSION TO YOUR ATTORNEY FOR HIS
APPROVAL. NO REPRESENTATION OR RECOMMENDATION IS
MADE BY THE AMERICAN INDUSTRIAL REAL ESTATE
ASSOCIATION OR BY THE REAL ESTATE BROKER OR ITS
AGENTS OR EMPLOYEES AS TO THE LEGAL SUFFICIENCY,
LEGAL EFFECT, OR TAX CONSEQUENCES OF THIS LEASE OR
THE TRANSACTION RELATING THERETO; THE PARTIES SHALL
RELY SOLELY UPON THE ADVICE OF THEIR OWN LEGAL
COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF
THIS LEASE.
The parties hereto have executed this Lease on the dates
specified immediately adjacent to their respective
signatures.
Executed at 1411 E. Orangethorpe Ave., Fullerton, CA 92631,
by Ron Hart - President, Nelco Products, Inc.
Address 1009 Dolphin Terrace, Corona del Mar, CA 92625, by
James Emmi - Owner
Modification To Lease
Building Lease between James Emmi, Lessor and
Nelco, Lessee Dated December 12, 1989
1100 E. Kimberly Avenue, Anaheim, CA
#1 - 7.3 (c) Last sentence to read:
In addition, Lessor may require Lessee to pay Lessor's
reasonable attorneys fees and costs in participating in
such action if Lessor shall decide it is to Its best
interest to do so.
#2 - 7.3 (d) Last sentence to read:
Notwithstanding the provisions of this Paragraph 7.3(d),
Lessee's machinery and equipment, including that which
is affixed to the Premises shall remain the property of
Lessee and may be removed by Lessee subject to the
provisions of Paragraph 7.2(c).
#3 - 9.3 First sentence to read:
Subject to the provisions of Paragraphs 9.4. 9.5, and
9.6, if at any time during the term of this Lease there
is damage which is not an Insured Loss and which falls
within the classification of Premises Partial Damage or
Premises Building Partial Damage, unless caused by
negligent or willful act of Lessee (in which event
Lessee shall make the repair at Lessee's expense to the
extent caused by the negligence or willful act of
Lessee......
#4 - 9.6 M First sentence to read:
If Lessor shall be obligated to repair or restore the
Premises under the provisions of this Paragraph 9 and
shall not complete such repairs within 90 days of
written notice of such occurrence of damage, then Lessee
may terminate or cancel this lease by written notice to
Lessor.
#5 - 13.1 (b) First sentence to read:
The failure by Lessee to make any payment of rent or any
other payment required to be made by Lessee hereunder,
as and when due, where such failure shall continue for a
period of three business days after written notice
thereof from Lessor to Lessee.
#6 - 13.4 Add to end of paragraph:
To the extent Lesser is entitled to any other recovery
for damages, and late coverage payment which has already
been made shall be
credited against the amount of such damages.
#7 - 14 Second sentence to read:
Any of the floor area of the building on the
Premises.....
#8 - 14 Delete the sentence:
Delete: No reduction of rent shall occur if the only
area taken is that which does not have a building
located thereon.
#9 - 17 Add to end of first sentence:
shall be delivered to grantee conditioned upon the
acceptance of the new owners of the terms and provisions
of this lease.
#10 - 30 Change second sentence to read:
Notwithstanding such subordination, Lessee's right to
quiet possession of the Premises shall not be disturbed
if Lessee is not in material default so long as Lessee
shall pay the rent and be in substantial compliance with
all provisions of this Lease.......
#11 - 32 Add to first sentence:
Lessor and Lessor's agents shall have the right to enter
the Premises at reasonable times after providing Lessee
with 24 hour prior notice for the purpose of inspecting
the same, showing .....
#12 - 34 Add the sentence:
All signs currently in place are deemed to have Lessor's
prior consent.
Ron Hart - Nelco Products, Inc.
James Emmi - Owner
ADDENDUM TO
BUILDING LEASE BETWEEN JAMES EMMI, LESSOR
AND NELCO LESSEE DATED DECEMBER 12, 1989
1100 E. KIMBERLY AVENUE, ANAHEIM, CA
A1. CONSUMER PRICE INDEX ADJUSTMENT:
The monthly rental will be increased in the same
proportion as the percentage of increase of the Los
Angeles/Long Beach/Anaheim area C.P.I. as determined by
the U.S. Department of Labor Statistics. The starting
base for the C.P.I. index will be the index for the
month of April 1990 which will be stipulated at 133.25.
The C.P.I. adjustment will be made effective on each of
the 2nd, 4th, 6th, 8th and 10th anniversary of the
effective starting date of the lease (June 21, 1990).
The bi-annual adjustment will be made every two years
thereafter through the lease option periods if
exercised. The C.P.I. index used for each period will
be the published index for the month of April preceding
the effective adjustment date. In no case will the rate
increase be more than 10% per annum.
A2. ALTERATIONS
As provided for in Item 7.3, the building's original
configuration and improvements shall be deemed to be the
condition of the building when first occupied by the
Lessee under previous leases. Any changes or
modifications having been done subsequent to the
original occupancy shall be subject to change back to
original condition before any termination of lease at
the option of Lessor. Normal wear and tear is excepted.
This building is presently occupied by Lessee and is
acceptable as is.
The Lessee is hereby given approval to install a
"Treater" similar to the one in the 1107 E. Kimberly
building under the terms and conditions as specified in
the lease.
A3. OPTIONS TO EXTEND LEASE PERIOD.
The Lessee is hereby granted the option to extend this
lease for an additional 5 years, June 21, 1995 to June
20, 2000 under the same terms and conditions as the
first 5 years, providing that the Lessee has
substantially complied with all the obligations of said
lease for the first 5 years. Rental rate will continue
to be adjusted as stipulated by C.P.I. adjustment, and
tax and insurance adjustments as provided for in lease.
The Lessee is hereby granted the option to renew this
lease for an additional 5 year period, June 21, 2000 to
June 20, 2005. The rental rate for this period will be
determined by agreement between the Lessor and Lessee
and shall be equal to 90% of the average rental rates in
effect at the time of Lessee's notice of intention to
renew. Average rental rates will be determined by
prevailing and available rental rates in the
Fullerton/Anaheim area for a minimum of 6 or more
buildings of comparable size and location.
In order to exercise the option to extend or renew this
lease, the Lessee must notify Lessor of his intention to
exercise his option before January 1, of the year of the
start of option period.
Ron Hart - Nelco Products, Inc.
James Emmi - Owner
December 29, 1994
Mr. James Emmi
1009 Dolphin Terrace
Corona del Mar, CA 92625
VIA CERTIFIED MAIL
Dear Mr. Emmi,
Writing to you in my dual capacity as Vice President of Nelco
Products, Inc., this letter serves as formal notice on behalf
of Nelco Products, Inc., of their intention to exercise the
June 12, 1995, options to extend the leases of both 1100 and
1107 E. Kimberly Avenue, Anaheim, CA, in accord with
paragraphs A3 in the Addendums dated December 12 1989, to the
Leases also dated December 12, 1989. The options thus
exercised will run until June 20, 2000.
We extend our best wishes for the New Year.
Sincerely,
NELCO, INTERNATIONAL CORPORATION
Lee H. Newton
Vice President Finance
copy: Ron Hart, Nelco Products Inc.
Phil Smoot, Nelco International Corporation
Allen Levine, Park Electrochemical Corp.