STANDARD INDUSTRIAL LEASE - NET
American Industrial Real Estate Association
1. Parties. This Lease, dated, for reference purposes only,
September 7, 1989, is made by and between HUTCO, a Ca. General
partnership and TEMTEX 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 Coffee, State of Tennessee, commonly known as
1324 McArthur Drive, Manchester, Tennessee 37355 and described as
SEE EXHIBIT "A" 127,051 sq. ft. on 13.8 acres. 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 Twenty Five (25)
years commencing on November 15, 1989 and ending on November 14,
2014, 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 terminate 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 $13,020.00, in advance, on the 15th day of
each month of the term hereof. lessee shall pay lessor upon the
execution hereof $13,020.00 as rent for first month of lease.
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 persons or
at such other places as Lessor may designate in writing.
5. Security Deposit. Lessee shall deposit with Lessor upon
execution hereof $13,020.00 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 or 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 or 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 deposits 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 be at 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 legal
manufacturing or industrial purposes 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 give 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 at 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 at Lessee's sole cost.
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(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 letter 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 loading 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 sole cost, rectify such violation. Lessee's failure to
give such written notice to lessor will, 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. Lessee's Obligations. Lessee shall keep in good order,
condition and repair the Premises and every part thereof,
structural and non-structural (whether or not such portion of the
Premises requiring repair, or the means of repairing the same are
reasonably or readily accessible to Lessee, and whether or not
the need for such repairs occurs as a result of Lessee's use, any
prior use, the elements or the age of such portion of the
Premises) 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, lighting
facilities and equipment within the Premises, fixtures, walls
(interior and exterior), foundations, ceilings roofs (interior
and exterior), floors, windows, doors, plate glass and skylights
located within the Premises, and all landscaping, driveways,
parking lots, fences and signs located on the Premises and
sidewalks and parkways adjacent to the Premises.
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7.2. Surrender. 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 when 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 Lessee's 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. Lessor's Rights. If Lessee fails to perform Lessee's
obligations under this Paragraph 7, or under any other paragraph
of this Lease, Lessor may at its option (but shall not be
required to) enter upon the Premises after ten (10) days prior
written notice to Lessee (except in the case of an emergency, in
which case no notice shall be required), perform such obligations
on Lessee's behalf and put the same in good order, condition and
repair, and the cost thereof together with interest thereon at
the maximum rate then allowable by law shall become due and
payable as additional rental to lessor together with Lessee's
next rental installment.
7.4. Lessor's Obligations. Except for the obligations of Lessor
under Paragraph 6.2(a) and 6.3(a) (relating to lessor's
warranty), Paragraph 9 (relating to destruction of the premises)
and under Paragraph 14 (relating to condemnation of the
Premises), it is intended by the parties hereto that Lessor have
no obligation, in any manner whatsoever, to repair and maintain
the Premises nor the building located thereon nor the equipment
therein, whether structural or non structural, all of which
obligations are intended to be that of the Lessee under Paragraph
7.1 hereof. lessee expressly waives the benefit of any statute
now or hereinafter 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.
7.5. Alterations and Additions.
(a) 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.
(b) 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 910) 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.
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(c) Unless Lessor requires their removal, as set forth in
Paragraph 7.5(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 7.5(c), 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.
8. Insurance Indemnity.
8.1. Insuring Party. As used in this Paragraph 8, the term
"insuring party" shall mean the party who has the obligation to
obtain the Property insurance required hereunder. The insuring
party shall be designated in Paragraph 46 hereof. In the event
Lessor is the insuring party, Lessor shall also maintain the
liability insurance described in paragraph 8.2 hereof, in
addition to, and not in lieu of, the insurance required to be
maintained by lessee under said paragraph 8.2, but Lessor shall
not be required to name lessee as an additional insured on such
policy. Whether the insuring party is the Lessor or the Lessee,
Lessee shall, as additional rent for the Premises, pay the cost
of all insurance required hereunder, except for that portion of
the cost attributable to lessor's liability insurance coverage in
excess of $1,000,000 per occurrence. If Lessor is the insuring
party Lessee shall, within ten (10) days following demand by
lessor, reimburse Lessor for the cost of the insurance so
obtained.
8.2. Liability Insurance. 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 Lessor and Lessee against any liability
arising out of the ownership, use, occupancy or maintenance of
the Premises and all areas appurtenant thereto. Such insurance
shall be a combined single limit policy 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.
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8.3. Property Insurance.
(a) The insuring party 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, in the amount of the full
replacement value thereof, as the same may exist from time to
time, which replacement value is now $1,000,000.00, but in no
event less than the total amount required by lenders having liens
on the Premises, 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 payment of loss thereunder to Lessor or to the holders of
mortgages or deeds of trust on the Premises. The insuring party
shall, in addition, obtain and keep in force during the term of
this Lease a policy of 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. A stipulated value or agreed amount endorsement deleting
the coinsurance provision of the policy shall be procured with
said insurance as well as an automatic increase in insurance
endorsement causing the increase in annual property insurance
coverage. If the insurance party shall fail to procure and
maintain said insurance the other party may, but shall not be
required to, procure and maintain the same, but at the expense of
Lessee. If such insurance coverage has a deductible clause the
deductible amount shall not exceed $50,000 per occurrence and
Lessee shall be liable for such deductible amount.
(b) If the Premises are part of a larger building or if the
Premises are part of a group of buildings owned by lessor which
are adjacent to the Premises, then Lessee shall pay for any
increase in the property insurance of such other building or
buildings if said increase is caused by lessee's acts, omissions,
use or occupancy of the Premises.
(c) If the Lessor is the insuring party the Lessor will not
insure Lessee's fixtures, equipment or tenant improvements unless
the tenant improvements have become a part of the Premises under
paragraph 7 hereof. But if Lessee is the insuring party the
Lessee shall insure its fixtures, equipment and tenant
improvements.
8.4. 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." The insuring party shall deliver to the
other party copies of policies of such insurance or certificates
evidencing the existence and amounts of such insurance with loss
payable clauses as required by this paragraph 8. No such policy
shall be cancellable or subject to reduction of coverage or other
modification except after thirty (30) days prior written notice
to Lessor. If Lessee is the insuring party, Lessee shall, at leas
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. If Lessee does
or permits to be done anything which shall increase the cost of
the insurance policies referred to in Paragraph 8.3, then Lessee
shall forthwith upon Lessor's demand reimburse Lessor for any
additional premiums attributable to any act or omission or
operation of Lessee causing such increase in the cost of
insurance. If Lessor is the insuring party, and if the insurance
policies maintained hereunder cover other improvements in
addition to the Premises, Lessor shall deliver to lessee a
written statement setting forth the amount of any such insurance
cost increase and showing in reasonable detail the manner in
which it has been computed.
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8.5. Waiver of Subrogation. Lessee and lessor each hereby
release and relieve the other, and waive their entire right of
recovery against the other for loss or damage arising out of or
incident to the perils insured against under paragraph 8.3, which
perils occur in, on or about the Premises, whether due to the
negligence of Lessor or Lessee or their agents, employees,
contractors and/or invitees. Lessee and Lessor shall, upon
obtaining the policies of insurance required hereunder, give
notice to the insurance carrier or carriers that the foregoing
mutual waiver of subrogation is contained in this Lease.
8.6. Indemnity. Lessee shall indemnify and hold harmless Lessor
from and against any and all claims arising from lessee's use of
the Premises, or from the conduct of Lessee's business or from
any activity, work or things done, permitted or suffered by
Lessee in or about the Premises or elsewhere and shall further
indemnify and hold harmless Lessor from and against any and all
claims arising from any breach or default in the performance of
any obligation on Lessee's part to be performed under the terms
of this Lease, or arising from any negligence of the Lessee or
any of lessee's agents, contractors, or employees, and from and
against all costs, attorney's fees, expenses and liabilities
incurred in the defense of any such claim or any action or
proceeding brought thereon, and in case any action or proceeding
be brought against Lessor by reason of any such claim. Lessee
upon notice from Lessor shall defend the same at Lessee's expense
by counsel satisfactory to lessor. Lessee, as a material part of
the consideration to Lessor, hereby assumes all risk of damage to
property or injury to persons, in, upon or about the Premises
arising from any cause and Lessee hereby waives all claims in
respect thereof against Lessor.
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8.7. Exemption of lessor from Liability. Lessee hereby agrees
that lessor shall not be liable for injury to Lessee's business
or any loss of income therefrom or for damage to the goods,
wares, merchandise or other property of lessee, Lessee's
employees, invitees, customers or any other person in or about
the Premises, nor shall lessor be liable for injury to the person
of Lessee. Lessee's employees, agents or contractors, whether
such damage or injury is caused by or results from fire, steam,
electricity, gas, water or rain, or from the breakage, leakage,
obstruction or other defects of pipes, sprinklers, wires,
appliances, plumbing, air conditioning or lighting fixtures, or
from any other cause, whether the said damage or injury results
from conditions arising upon the Premises or upon other portions
of the building of which the Premises are a party or from other
sources or places and regardless of whether the cause of such
damage or injury or the means of repairing the same is
inaccessible to lessee. Lessor shall not be liable for any
damages arising from any act or neglect of any other tenant, if
any of the building in which the Premises are located.
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 ten replacement cost of the Premises.
"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 then
replacement cost of such building as a whole.
(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 then replacement cost of the Premises.
"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 then
replacement cost of such building as a whole.
(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
paragraphs 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
expense, repair such damage, but not Lessee's fixtures, equipment
or tenant improvements unless the same have become a part of the
Premises pursuant to Paragraph 7.5 hereof as soon as reasonably
possible and this Lease shall continue in full force and effect.
Notwithstanding the above, if the Lessee is the insuring party,
and if the insurance proceeds received by Lessor are not
sufficient to effect such repair, Lessor shall give notice to
Lessee of the amount required in addition to the insurance
proceeds to effect such repair. Lessee shall contribute the
required amount to Lessor within ten days after Lessee has
received notice from Lessor of the shortage in the insurance.
When Lessee shall contribute such amount to Lessor, Lessor shall
make such repairs as soon as reasonably possible and this Lease
shall continue in full force and effect. Lessee shall in no
event have any right to reimbursement for any such amounts so
contributed.
9.3. 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
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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 9.5(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 in 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.
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(b) 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
obligation shall accure. Lessee may at Lessee's option cancel
and terminate this Lease by giving Lessor written notice of
Lessee's election do so by 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 Taxes. Lessee shall pay the real property
tax, as defined in paragraph 10.2, applicable to the Premises
during the term of this Lease. All such payments shall be made
at least ten (10) days prior to the delinquency date of such
payment. Lessee shall promptly furnish Lessor with satisfactory
evidence that such taxes have been paid if any such taxes paid by
Lessee shall cover any period of time prior to or after the
expiration of the term hereof. Lessee's share of such taxes
shall be equitably prorated to cover only the period of time
within the tax fiscal year during which this Lease shall be in
effect, and Lessor shall reimburse Lessee to the extent required.
If Lessee shall fail to pay any such taxes, Lessor shall have the
right to pay the same, in which case Lessee shall repay such
amount to Lessor with Lessee's next rent installment together
with interest at the maximum rate then allowable by law.
10.2. 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 hereinabove 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 hereinabove included within the definition of
real property tax by reason of such transfer, or (b) which is
imposed by reason of this transaction, any modifications or
changes hereto, or any transfers hereof.
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10.3. 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.
10.4. 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 of all charges
jointly metered with other premises.
12. Assignment and Subletting.
12.1. Lessor'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 thereunder 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, 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.
11
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 assignee of
Lessee, without notifying Lessor or any such ___ 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 attorney's fees incurred in connection
therewith, such attorney's 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) The failure by Lessee to make any payments 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 statutes such Notice to
Pay Rent or Quit shall also constitute the notice required by
this subparagraph.
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(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.
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(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 statute
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
than allowable by law.
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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. 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 of 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, an 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
14. Condemnation. 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 (10) 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 situated on
the Premises. No reduction of rent shall occur if the only area
taken is that which does not have a building located thereon.
Any award for the taking of all or any part of the Premises under
the power of eminent domain or any payment made under 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 NONE 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
$ NONE , 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 sale
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.
15
(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' 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 an prospective purchaser or
encumbrance 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
represented 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. 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 case 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.
16
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 provisions 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 execute 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
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
of 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. Recording. Either Lessor or Lessee shall, upon request of
the other, execute, acknowledge and deliver to the other a "short
form" memorandum of this Lease for recording purposes.
17
26. 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 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.
(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
mortgagee, 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 give 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 of 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.
18
32. Lessors' Access. Lessor and Lessor's agents shall be 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
any 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 action 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. Lessee shall not place 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 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,
conditions 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 terms 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. Each Option 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.
19
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 date 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 has become
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.
20
40. Multiple Tenant Building. In the event that the Premises
are part of a larger building or group of buildings then 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 protest" 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 par
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. Insuring Party. The Insuring Party under this lease shall
be the LESSEE .
47. Addendum. Attached hereto is an addendum or addenda
containing paragraphs 48 through 48 which constitutes a
part of this Lease.
21
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 TIEM THIS LEASE IS EXECUTED,
THE TERMS OF THIS LEASE ARE COMMERCIALLY REASONABLE AND
EFFECTUATE THE INTENT AND PURPOSE OF LESSOR AND LESSEE WITH
RESPECT OTHE PREMSIES.
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 at the place on the
dates specified immediately adjacent to their respective
signatures.
Executed at _________________ HUTCO, A Ca. General
Partnership
on 9/11/89 By ______________________________
---------------------- John D. Howard
Address 1819 W. Olive Avenue By _______________________________
--------------------- James Upfield, Partner
Burbank, CA 91506 "LESSOR" (Corporate seal)
-------------------
Executed at TEMTEX INDUSTRIES, INC.
----------------
on By _______________________________
------------------------- Ed Buford, President
Address By _______________________________
--------------------
"LESSEE" (Corporate seal)
22
<PAGE
EXHIBIT "A"
Description of Real Estate
--------------------------
Tract No. 1:
- ------------
Lying and being in the 1st Civil District of Coffee County,
Tennessee, and being more particularly described as follows:
BEGINNING at the corner of a fence located in the easterly margin
of Sparta Branch Railroad, said corner also being the northwest
corner of Spry's property and running north 15 degrees east along
the easterly margin of said Sparta Branch Railroad 394.2 feet to
an iron pipe; thence south 85 degrees 45 minutes east along the
southerly lot line of Jernigan land and an old fence line 441.5
feet to an iron pipe; thence south 14 degrees 45 minutes west 394
feet to a stone and iron stake; thence north 85 degrees 45
minutes west 442.5 feet to corner of fence, the same being the
point of beginning, according to survey by Claude Ingram dated
August 18, 1971.
Tract No. 2;
- -----------
BEGINNING at a point in the east right of way line of the L&N RR
Co., one hundred (100) feet eastwardly from and at right angles
to centerline of main track of the L&N RR Co., at Valuation
Station 531+20, which point is six hundred eighty six (686) feet
measured northwardly from Mile Post 10 from Tullahoma, Tennessee;
thence southwestwardly fifty one and six tenths (51.6) feet to a
point fifty (50) feet eastwardly from and at right angles to the
centerline of said main track at Valuation Station 531+97; thence
northwardly along a line fifty (50) feet eastwardly from and
parallel to said centerline of main track nine hundred five and
seven tenths (905.7) feet to a point opposite Valuation Station
540+18; thence northeastwardly fifty one (51) feet, more or less,
to a point in L&N RR Co.'s east right of way line one hundred
(100) feet, eastwardly from and at right angles to centerline of
main track at Valuation Station 540+28; thence southwardly along
the east right of way line of the L&N RR Co., one hundred (100)
feet eastwardly from and parallel to centerline of said main
track nine hundred two and seven tenths (902.7) feet, to the
point of beginning, containing 45,175 square feet, more or less.
Tract No. 3:
- -----------
Being located in the 1st (formerly 6th) Civil District of Coffee
County, State of Tennessee, and in the City of Manchester, and
beginning at an iron pipe in the east margin of the right of way
of the Sparta Branch Railroad at Spry's southwest corner: thence
south 85 deg. 45 min. east along Spry's south line 200 feet to a
stake at Spry corner; thence north 15 deg. 30 min. east along
Spry's east line 100 feet to an iron pipe in Dodd's south line;
thence south 85 deg. 45 min. east along Dodd's south line 242.6
feet to an iron stake; thence south 19 deg. 45 min. west 992.2
feet to an iron pipe in Terrell's north line and at the southwest
corner of the west end of a 50 foot road; thence north 89 deg.
west along a fence, Terrell's north line, 377.5 feet to a stake
at the corner of a fence in the east margin of the right of way
of the Sparta Branch Railroad; thence north 15 deg. 30 min. east
along the east margin of said railroad right of way 905.2 feet to
the place of beginning, and containing 8.75 acres, as surveyed by
Claude Ingram, Coffee County Surveyor, on the 23rd day of
September 30, 1970.
There is also conveyed the right on ingress and egress over and
upon a 50-foot wide roadway extending from Highway 55 to the
southeast corner of the above described property, said roadway
being 50 feet in width and extending in length 331 feet.
ADDENDUM TO
STANDARD INDUSTRIAL LEASE
Dated September 7, 1989
-------------------------
By and Between HUTCO, A Ca, General Partnership
------------------------------------------------
Temtex Properties Inc.
----------------------
48 RENT ESTALATIONS
(a) On October 15, 1994, October 15, 1999, October 15,
2004, October 15, 2009 the monthly rent payable under paragraph 4
of the attached Lease shall be adjusted by the increase, if any,
from the date this Lease commenced, in the Consumer Price Index
of the Bureau of Labor Statistics of the U.S. Department of Labor
for Urban Wage Earners and Clerical Workers, Tennessee (1967
=100), "All Items", herein referred to as "C.P.I."
(b) The monthly rent payable in accordance with paragraph
(a) of this Addendum shall be calculated as follows: the rent
payable for the first month of the term of this Lease, as set
forth in paragraph 4 of the attached Lease, shall be multiplied
by a fraction the numerator of which shall be the C.P.I. of the
calendar month during which the adjustment is to take effect, and
the denominator of which shall be the C.P.I. for the calendar
month in which the original Lease term commences. The sum so
calculated shall constitute the new monthly rent hereunder, but
in no event, shall such new monthly rent be less than the rent
payable for the month immediately preceding the date for rent
adjustment.
(c) Pending receipt of the required C.P.I. and
determination of the actual adjustment, Lessee shall pay an
estimated adjusted rental, as reasonably determined by Lessor by
reference to the then available C.P.I. information. Upon
notification of the actual adjustment after publication of the
required C.P.I. any overpayment shall be credited against the
next installment of rent due, and any underpayment shall be
immediately due and payable by Lessee. Lessor's failure to
request payment of an estimated or actual rent adjustment shall
not constitute a waiver of the right to any adjustment provided
for in the Lease or this addendum.
(d) In the event the compilation and/or publication of the
C.P.I. shall be transferred to any other governmental department
or bureau or agency or shall be discontinued, then the index most
nearly the same as the C.P.I. shall be used to make such
calculation. In the event that Lessor and Lessee cannot agree on
such alternative index, then the matter shall be submitted for
decision to the American Arbitration Association in accordance
with the then rules of said association and the decision of the
arbitrators shall be binding upon the parties. The cost of said
Arbitrators shall be paid equally by Lessor and Lessee.