EXHIBIT 10.02
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 1107 East Kimberly Avenue,
Anaheim, CA 92801 and described as approximately 13,200
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 $5600.00, 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: $2227.00. 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.
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.