Exhibit 10.36
V-B
45001-1
#2736
STANDARD INDUSTRIAL LEASE
(California - Gross Lease)
This Lease is made April 2, 2001, between ▇. ▇. ▇▇▇▇, ▇▇. FAMILY TRUST dated
June 23, 1980 and ▇▇▇▇▇▇▇ TRUST dated August 14, 1985, ("Landlord') and ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇., an Individual and ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, an Individual,
("Tenant"), who agree as follows:
1. PREMISES
1.1 Premises. Landlord leases to Tenant and Tenant leases from Landlord
the real property and the building and improvements located in the City of
Anaheim, County of Orange, State of California, described as an industrial
building, being approximate1y 9,270 square feet in area, known as ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("the premises).
1.2 Truckwell. Landlord gives Tenant the nonexclusive right to use the
truckwell immediately to the north of the building for the purpose of loading
and unloading materials being delivered to and from the premises, with the
understanding that tenants of the properties at 2301 and 2309 E. Via ▇▇▇▇▇▇ ma
be allowed the nonexclusive right to use said truckwell and with the
understanding that:
(a) In no event is use by Tenant to interfere with the use of the
north one-half of the truckwell.
(b) Tenant shall be responsible for maintaining the truckwell free
of debris and Tenant shall, at Tenant's sole cost and expense, repair any damage
to the Building, truckwell, parking or driveways caused by acts or omissions of
Tenant, its agents, employees or invitees.
(c) Tenant will hold Landlord harmless from and indemnify Landlord
a against all claims, loss, cost and expense (including attorneys' fees) by
reason of any death, personal injury, or property damage arising out of, or
resulting from, use of the truckwell, parking and/or driveways by Tenant, its
employees, agents, or invitees, and Tenant shall include in its public liability
and properly damage insurance, hereinafter referred to, specific coverage of the
truckwell, parking and driveways.
2. TERM
2.1 Term. The term shall be for three (3) years commencing June 1,2001,
and shall expire May 31,2004, unless sooner terminated pursuant to any provision
hereof.
2.2 Delay in Possession. If for any reason Landlord cannot deliver
possession of the premises by the date specified for the commencement of the
term, Landlord shall not be liable for any damage caused for failing to deliver
possession, and this lease shall not be void or voidable. Tenant shall not be
liable for rent until Landlord delivers possession of the premises to Tenant,
but the term shall not be extended by the delay. If Landlord does not deliver
possession of the premises to Tenant within sixty (60) days from said
commencement date, Tenant can elect to terminate this lease by giving notice to
Landlord at any time before the date Landlord delivers possession of the
premises to Tenant.
2.3 Early Possession. Tenant may only occupy the premises prior to said
commencement date with a separate written early possession agreement with
Landlord.
2.4 Option to Extend.
(a) Subject to the conditions hereinafter in this paragraph set
forth, Tenant shall have the option to extend the initial three (3) year term of
this lease for a further period of three (3) years upon the same terms and
conditions as are herein contained with respect to the initial term, except that
the rent shall be adjusted for the first year of the extended term as herein set
forth in paragraph 4.4.
b) The right to exercise such option is subject to the following
conditions:
(1) Tenant shall give written notice to Landlord of the
exercise of such option at least 120 days prior to the expiration of
the initial three (3) year term of this lease;
(2) The lease is in full force and effect at the time of the
exercise of such option, as well as at the commencement of the
extension term;
(3) Tenant is in possession of the premises; and
(4) Tenant is not in default at the time of exercise of such
option or at the commencement of the extended term.
3. ACCEPTANCE OF THE PREMISES.
3.1 Landlord Good Operating Condition Warranty: Landlord warrants to
Tenant that the heating, ventilating and air conditioning equipment, (except for
any space heaters on premises), plumbing equipment, lighting fixtures and other
electrical apparatus and loading doors in the premises will 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
Landlord, after receipt of written notice from Tenant setting forth with
specificity the nature of the violation, to promptly, at Landlord's sole cost,
rectify such violation. Tenant's failure to give such written notice to Landlord
within thirty (30) days after the lease commencement date shall cause the
conclusive presumption that Landlord has complied with all of Landlord's
obligations hereunder.
3.2 Condition of Premises. Tenant's taking possession of the premises
shall constitute Tenant's acknowledgement that the premises are in good
condition and except as otherwise provided in subparagraph 3.1, Tenant is
accepting the building in its "as is" condition, including, but not limited to
all offices, heating equipment, plumbing equipment, floor coverings, lighting
fixtures and other electrical apparatus.
3.3 Tenant Improvements. Notwithstanding paragraph 3.1 above, Tenant, at
Tenant's sole cost and expense, shall be permitted to upgrade existing
electrical power to a minimum of 400 amps, 120/240 volts, 3 phase power. All
electrical improvements including distribution lines and sub-panels shall remain
attached to the premises as permanent fixtures.
4. RENT
4.1 Monthly Rent. Tenant shall a Landlord as rent, without deduction,
setoff, prior notice, or demand, the sum of $5,933.00 per month in advance on
the first day of each month of the term hereof. Tenant shall pay Landlord upon
execution $5,933.00 as rent for the first full month of the term. Rent for any
period during the term hereof which is for less than one month shall be billed
at a prorata portion of the monthly rent payment. Rent shall be payable to
Landlord at the address to which notices to Landlord are given or to such other
persons or at such other places as Landlord may designate in writing.
4.2 Adjustment of Rent During Initial Term. Commencing on June 1, 2002
and continuing through May 31,2003 the adjusted rent shall be $6,026.00 per
month.
4.3 Adjustment of Rent During Initial Term. Commencing on June 1, 2003
and continuing through May 31,2004 the adjusted rent shall be $6,026.00 per
month.
4.4 Adjustment of Rent During Extended Term. The parties shall have 30
days after Landlord receives the option notice in which to agree on the monthly
rent for the extended term. If the parties agree on the monthly rent for the
extended term during that period, they shall immediately execute an amendment to
this lease stating the monthly rent for the extended term. If the parties are
unable to agree on the monthly rent for the extended term within that period,
the option notice shall be of no effect and this lease shall expire at the end
of the first option period. Neither this lease shall have the right to have a
court or other third party set the monthly rent for the extended term.
5. SECURITY DEPOSIT
On execution of this lease, Tenant shall deposit with Landlord $6,118.00
as a security deposit for the performance by Tenant of the provisions of this
lease. If the tenant is in default or to compensate Landlord for all damage
sustained by Landlord resulting from Tenant's default. Tenant shall immediately
on 2 demand pay to Landlord a sum equal to the portion of the security deposit
expended or applied by Landlord as provided in this paragraph so as to maintain
the security deposit in the sum initially deposited with Landlord. Upon any
increase in the monthly rent during the term of this lease or any option period
upon Landlord's written notification, Tenant shall thereupon deposit with
Landlord additional security deposit so that the amount of security deposit held
by Landlord shall at all times be the same amount as the monthly rent then
payable. If Tenant is not in default at the expiration or termination of this
lease, Landlord shall return the security deposit to Tenant. Landlord's
obligations with respect to the security deposit are those of a debtor and not a
trustee. Tenant acknowledges and agrees that in the event Tenant shall file a
voluntary petition pursuant to the Bankruptcy Code or any successor thereto, or
if an involuntary petition is filed a against Tenant pursuant to the Bankruptcy
Code or any successor thereto, then Landlord ma apply the security deposit
towards those obligations of Tenant to Landlords which accrued prior to the
filing of such petition. Landlord can maintain the security deposit separate and
apart from Landlord's general funds or can commingle the security deposit with
Landlord's general and other funds. Landlord shall not be required to pay Tenant
interest on the security deposit.
6. TAXES
6.1 Personal Property Taxes. Tenant shall pay before delinquency all
taxes, assessments, license fees, and other charges ("taxes") that are levied
and assessed against Tenant's personal property installed or located in or on
the premises, and that become payable during the term of this lease. On demand
by Landlord, Tenant shall furnish Landlord with satisfactory evidence of these
payments.
6.2 Real Property Taxes. Tenant shall pay increases in real property
taxes, whether the increase resulted from increased rate and/or valuation levied
and assessed against the premises, over and above those real property taxes
levied and assessed against the premises for the base year, which is 2000-2001.
For the purposes of this Lease, "real property taxes" shall mean and
include all real property taxes, general and special assessments, foreseen as
well as unforeseen, which are levied or assessed upon or with respect to the
Property in which the remises is situated, an improvements, fixtures, equipment
and other property of Landlord located on the Property and used in connection
with the operation of all or any portion of the Property, as well as an tax,
surcharge or assessment which shall be levied or assessed in addition to or in
lieu of such real property taxes and assessments. Real property taxes shall also
include any expenses incurre1 by Landlord in contesting the amount of validity
of any real property taxes and assessments.
Each year Landlord shall notify Tenant of the real property taxes and
together I with such notice shall furnish Tenant with a cop of the tax ▇▇▇▇,
including the tax ▇▇▇▇ I for the base year. Tenant shall ay Landlord tie amount
of the increase in the real property taxes annually not later than 10 days after
receipt of the tax ▇▇▇▇.
Tenant's liability to pay real property taxes shall be prorated on the
basis of a 365-day year to account for any fractional portion of a fiscal tax
year included in the term at its commencement and expiration.
6.3 Substitute and Additional Taxes. Tenant shall not be required to pay
any state or federal income or franchise taxes of Landlord, or any state or
federal estate or inheritance taxes of Landlord. If at any time during the term,
the State of California or any political subdivision of the state, including any
count city, city and county, public corporation, district, or any other
political entity or public corporation of this state, levies or assesses against
and or a tax, fee, or excise on (1) rents, (2) the square footage of the
premises, (3) the act of entering into this lease, or (4) the occupancy of
Tenant, or levies or assesses against Landlord any other tax, fee, or excise, or
however described, including without limitation, a so-called value added tax, as
a direct substitution in whop: or in part for, or in addition to, any real
property taxes, Tenant shall before delinquency pay that tax, fee, or excise.
7. USE OF PREMISES
7.1 Use. Tenant shall use the premises for offices and CNC machine shop
and for no other use without the written consent of Landlord. Without limitation
of the foregoing and without limitation of paragraph 7.3, non of the following
actions or uses, are permitted on or about the premises:, (a) washing of
vehicles, or work on or repair of vehicles; (b) parking, staging or storing any
non-related business vehicles or personal recreation vehicles, including, but
not limited to, RV's, boats, campers and trailers.
7.2 Compliance with Laws. Tenant shall not do or permit anything to be
done in or about said premises which will in any way affect the safety of the
premises, and Tenant shall comply, at Tenant's sole cost, with all applicable
laws, ordinances, rules and regulations of city, county, state and federal
authorities, and the rules, regulations and requirements of the Board of Fire
Underwriters, and Tenant shall at no time suffer or permit rubbish, papers, dirt
or refuse to accumulate in or about the premises.
7.3 Nuisance. Tenant shall not use the premises in any manner that will
constitute waste, nuisance, or unreasonable annoyance to owners or occupants of
adjacent properties.
7.4 Hazardous Materials.
(a) Tenant shall not use or permit an other person to use any
portion of the premises for the storage, use, treatment or disposal of any
hazardous material (as hereafter defined), except that, subject to strict
compliance with the provisions of this section 7.4, Tenant may, in connection
with its operation of its business described in paragraph 7.1, bring on the
premises products and substances in normal and customary quantities required for
cleaning and maintenance of the premises, including diesel fuel and/or gasoline
for the parking and storage of vehicles or operation of forklift.
(b) Tenant represents, warrants and agrees that as to any
equipment, materials, substances or other things coming on the premises during
the term of this lease or any predecessor lease with Tenant (including without
limitation, the products and substances described in (a) above), Tenant will at
the sole cost and expense of Tenant, comply with all local, state and federal
statutes, rules, regulations and orders governing use, storage and disposal of
flammable or combustible material, hazardous substances, toxic substances and
hazardous waste as now or hereafter defined as a "hazardous waste," "hazardous
substance," "toxic substance," pollutant or contaminant under any federal, state
of local statute or regulation, rule or ordinance or amendments thereto
including, without limitation. the Comprehensive Environmental Response,
Compensation and Liability Act (42 U.S.C. section; 9601 et seq.) and/or the
Resource Conservation and Recover Act (42 U.S.C. section 6901, et seq.) and/or
Section 25117 of the California Health and Safety Code, or any successor
statute, substances which contain gasoline, diesel fuel or other petroleum
hydrocarbons and any other substance the presence of which requires
investigation or remediation under any federal, state f local statute,
regulation, ordinance, order, action, policy or common law (herein collectively
referred to as "hazardous materials"), and that Tenant will indemnify Landlord
against and hold Landlord harmless from all claims, damages, loss, cost and
expense (including attorneys' fees) relating to or arising out of such hazardous
materials coming on the premises during the term of this lease or any
predecessor lease with Tenant or otherwise caused by actions or omissions of
Tenant or its invitees. On termination of the Lease, Tenant will remove from the
premises all hazardous materials and all containers in which such hazardous
materials have been stored. The foregoing does not in any way limit any other
obligation of Tenant under this Lease.
Landlord represents and warrants that to the best of Landlord's knowledge,
there were no hazardous materials on or under the premises prior to Tenant
taking possession of the premises. Landlord will indemnify Tenant against and
hold Tenant harmless from all claims, damages, loss, cost and expense (including
attorneys' fees) relating to or arising out of hazardous materials which were on
or under the premises prior to Tenant taking possession of the premises or
brought to the premises by Landlord in connection with its improvements or
repairs to the premises as provided in this lease.
(d) The indemnifications of the parties in this section 7.4 shall
include, without mutation, costs incurred in connection with any investigation
of site conditions or any cleanup, remedial, removal or restoration work
required by an federal, state or local governmental agency or political
subdivision because of hazardous materials for which such indemnifying arty is
responsible as above specified in subparagraphs (a), (b) and (c), and Tenant's
obligation under this paragraph 7.4 shall survive expiration or earlier
termination of this lease.
8. MAINTENANCE
8.1 Landlord Maintenance. Except as provided in paragraphs 13 and 14 and
except for damage caused by Tenant, Landlord at its cost shall maintain, in good
condition, the structural parts of the building which structural parts include
only the foundations, bearing and exterior walls (excluding glass and doors),
sub flooring, and roof. Tenant waives the benefit of any resent or future law
which might give Tenant the right to repair the premises at Landlord's expense
or to terminate this lease because of the condition of the premises.
8.2 Tenant Maintenance. Except as provided in paragraph 8.1, Tenant at
its cost shall maintain, in good condition, all portions of the remises,
including, without limitation, the office entry, glass, windows, exterior
overhead doors, exterior passage doors and the interior of the premises. In
addition, Tenant shall, at Tenant's expense, repair any damage to the structural
parts of the building, including damage to the shop floor surfaces, referred to
in paragraph 8.1 caused by Tenant's acts or omissions.
8.3 Surrender. On the last day of the term hereof, or on any sooner
termination, Tenant shall surrender the premises to Landlord in the same
condition as when received, ordinary wear and tear excepted, clean and free of
debris. Tenant shall repair any damage to the premises occasioned by the
installation or removal of Tenant's trade fixtures, furnishings and equipment.
Notwithstanding anything to the contrary otherwise stated in this lease, Tenant
shall leave the airlines, power panels, electrical distribution systems,
lighting fixtures, space heaters, air conditioning and plumbing in good
operating condition.
8.4 Heating, Ventilating and Air-Conditioning. Tenant shall be solely
responsible for the maintenance and repair of the heating, ventilating and air
conditioning installed on the premises and shall execute a quarterly inspection
and maintenance contract covering all of the office heating, ventilating and air
conditioning. Said maintenance contract shall be executed with a licensed
heating, ventilating and air conditioning contractor approved b Landlord. Said
maintenance contract shall remain in effect during the entire term of the lease
and any extension or renewal thereof. Tenant shall furnish Landlord a copy of
said maintenance contract. Upon expiration of the Lease, Landlord may inspect
heating, ventilating and air conditioning and Tenant shall be responsible for,
if any, maintenance or repair required.
9. ALTERATIONS
Tenant shall not make any alterations to the premises without Landlord's
written consent. Landlord may require Tenant to remove any or all of said
alterations at the expiration of the term and restore the premises to their
prior condition. Unless Landlord requires their removal, any alterations made
(including, without limitation, power panels and lighting fixtures, whether or
not such installations constitute trade fixtures of Tenant) shall remain on and
be surrendered with the premises on expiration or termination of the term.
10. MECHANICS' LIENS
Tenant shall pay all costs for construction done by Tenant or caused to be
done by Tenant on the premises as permitted by this lease. Tenant shall keep the
premises free and clear of all mechanics' liens resulting from construction done
by or for Tenant.
Tenant shall have the right to contest the correctness or validity of any
such lien if, immediately on demand by Landlord, Tenant procures and records a
lien release bond issued by a corporation authorized to issue surety bonds in
California in an amount equal to one and one-half times the amount of the claim
of lien. The bond shall meet the requirements of Civil Code section 3143, or any
successor statute, and shall provide for the payment of any sum that the
claimant may recover on the claim (together with costs of suit, if it recovers
in the action).
11. UTILITIES
Tenant shall pay or cause to be paid all charges for water, gas, light,
heat or power, telephone, trash collection service, any alarm or security
services and other services supplied to Tenant in connection with the Premises.
12. INDEMNITY AND INSURANCE
12.1 Exemption of Landlord from Liability. Landlord shall not be liable
to Tenant for any damage to Tenant or Tenant's property from any
cause. Tenant waives all claims against Landlord for damage to person or
property arising for any reason, except for damage resulting from the acts or
omissions of Landlord.
12.2 Indemnity. Tenant shall hold Landlord harmless from all damages
arising out of any injury or damage to any person or property occurring in, on,
or about the premises, except for damage resulting from the acts or omissions of
Landlord.
12.3 General Commercial Liability and Property Damage Insurance. Tenant
shall maintain general commercial liability and property damage insurance with a
combined single liability limit of $1,000,000.00 per occurrence, insuring
against all liability of Tenant and its authorized representatives arising out
of and in connection with Tenant's use or occupancy of the premises. Said
general commercial liability and property damage insurance shall: (a) Name
Landlord and Landlord's property manager ▇▇▇▇▇ Industrial Properties, Inc. as
additional insureds.
(b) Be issued by insurance companies authorized to do business in
the State of California, with a financial rating of at least an A - 8 status as
rated in the most recent edition of Best's Insurance Reports.
(c) Be issued as a primary policy.
(d) Contain an endorsement requiring 30 days' written notice from
the insurance company to Landlord and Tenant before cancellation or change in
the coverage, scope, or amount of any policy.
(e) Shall insure performance by Tenant of the indemnity provisions
of paragraph 12.2.
Said policy, or a certificate of the policy, together with evidence of payment
of premiums, shall be deposited with the Landlord at the commencement the term,
and on renewal of the policy not less than 20 days before expiration of the term
of the policy.
12.4 Waiver of Subrogation. The parties release each other, and their
respective authorized representatives, from any claims for damage to any person
or to the premises and to the fixtures, personal property, Tenant's
improvements, and alterations of either Landlord or Tenant in or on the premises
that are caused by or result from risks insured against under any insurance
policies carried by the parties and in force at the time of any such damage.
Tenant and Landlord shall give notice their respective insurance carriers that
the foregoing mutual waiver of subrogation is contained in this lease.
12.5 Fire Insurance on Building. Landlord at its cost shall maintain on
the building and other improvements that are part of the premises (in which the
premises are located) a policy of standard fire insurance with special extended
coverage endorsement, to the extent of at least 90% of full replacement value.
The insurance policy shall be in the name of Landlord, with loss payable to
Landlord and the holders of any mortgages or deeds of trust on the premises.
Landlord shall not be required to insure any of Tenant's improvements or
alterations.
12.6 Tenant's Fire Insurance. Tenant at its cost shall maintain on all
its personal property, Tenant's improvements and alterations, in, on, or about
the premises a policy of standard fire and extended coverage insurance, with
vandalism and malicious mischief endorsements, to the extent of at least 90% of
their full replacement value. The proceeds of any such policy shall be used by
Tenant for the replacement of personal property or the restoration of Tenant's
improvements or alterations.
12.7 Tenant Payment of Increase in Fire Insurance Cost. If the fire
insurance rate on the building on the premises is raised above the existing rate
(Travelers Property & Casualty Insurance No 630378L8376TlL97) by reason of the
nature of Tenants business or the manner in which Tenant conducts its business,
then the increased cost of such fire insurance above the now existing rate per
annum per each $100.00 coverage up to the expiration of this lease or any
renewal hereof shall be payable by Tenant as additional rental hereunder, with
and in addition to the next succeeding rental installment payable hereunder
following the effective date of such rate increase.
13. DESTRUCTION
13.1 Insured Loss. If, during the Term, the premises are totally or
partially destroyed from any cause covered by Insurance described in section
12.5, rendering the premises totally or partial1 inaccessible or unusable,
Landlord shall restore the premises to substantially the same condition as they
were immediate1y before destruction, if the restoration can be made under the
existing laws and can be completed within 60 days after the date of the
destruction. Such destruction shall not terminate this lease. If the restoration
cannot be made in the time stated in this time stated in this paragraph, then
within 15 days after the parties determine that the restoration cannot be made
in the time stated in this paragraph, Tenant can terminate this lease
immediately by giving notice to Landlord. If Tenant fails to terminate this
lease and if restoration is permitted under the existing laws, Landlord, at its
election, can either terminate this I' ease or restore the remises within a
reasonable time and this lease shall continue in full force and effect. 18he
existing laws do not permit the restoration, either party can terminate this
lease immediately by giving notice to the other party.
In any event, Landlord shall not be required to restore alterations made
by Tenant, Tenant's improvements, Tenant's trade fixtures, and Tenant's personal
property, such excluded items being the sole responsibility of Tenant to
restore.
In case of destruction there shall be an abatement or reduction of rent,
between the date of destruction and the date of completion of restoration, based
on the extent to which the destruction interferes with Tenant's use of the
premises.
If the destruction occurs during the last year of the term, Landlord can
terminate this lease by giving notice to Tenant not more than 15 days after the
destruction.
Tenant waives the provisions of Civil Code sections 1932(2) and 1933(4)
with respect to any destruction of the premises.
13.2 Uninsured Loss. If the premises are totally or partially destroyed
from a cause not covered by the insurance described in section 12.5, Landlord
may either elect to restore the premises (subject to the same time limitations
and provisions as in 13.1) or terminate this lease by giving written notice to
Tenant within 20 days after the date of destruction, provided, however, that if
the uninsured destruction was caused by a negligent or willful act of Tenant,
Tenant shall make the repairs at Tenant's expense and there shall be no
abatement of rent between the date of destruction and the date of completion of
restoration.
14. CONDEMNATION
If the premises or any portion thereof are taken under the owner of
eminent domain, or sold under the threat of the exercise of raid power (all of
which are herein referred to as "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, Tenant may, at
Tenant's option, to be exercised in writing only within 10 days after Landlord
shall have given Tenant written notice of such taking (or in the absence of such
notice, within 10 days after the condemning authority shall have taken
possession) terminate this lease as of the date the condemning authority takes
such possession. If Tenant 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 the rent shall be reduced in the proportion that
the floor area of the building then 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 Landlord, 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 Tenant shall be entitled to any award
for loss of or damage to Tenant's trade fixtures and removable personal
property. In the event that this lease is not terminated by reason of such
condemnation, Landlord shall to the extent of severance damages received by
Landlord in connection with such condemnation, repair and damage to the premises
caused by such condemnation except to the extent Tenant has been reimbursed
therefor by the condemning authority.
15. ASSIGNMENT
15.1 Prohibition Against Voluntary Assignment, Subletting and
Encumbering. Tenant shall not voluntarily assign or encumber its interest in
this lease or in the premises, or sublease all or any part of the premises, or
allow any other person or entity to occupy or use all or any part of the
premises, without first obtaining Landlord's consent. Any assignment,
encumbrance, or sublease without Landlord's consent shall be voidable and, at
Landlord's elections, shall constitute a default. No consent to any assignment,
encumbrance, or sublease shall constitute a further waiver of the provisions of
this paragraph.
If Tenant is a corporation, any dissolution, merger, consolidation, or
other reorganization of Tenant, or the sale or other transfer of a controlling
percentage of the capital stock of Tenant, or the sale of at least 51% of the
value of the assets of Tenant, shall be deemed a voluntary assignment. The phase
"controlling percentage" means the ownership of, and the right to vote, stock
possessing at least 51% of the total combined voting power of all classes of
Tenant's capital stock issued, outstanding and entitled to vote for the election
of directors. This paragraph shall not apply to corporations the stock of which
is traded through an exchange or over the counter.
15.2 Involuntary Assignment. No interest of Tenant in this lease shall
assignable by operation of law. Each of the following acts shall be considered
an involuntary assignment.
(a) If Tenant is or becomes bankrupt or insolvent, makes an
assignment for the benefit of creditors, or institutes a proceeding under the
Bankruptcy Act in which the Tenant is the bankrupt; or, if Tenant is a
partnership or consists of more than one person or entity, if any partner of the
partnership or other person or entity is or becomes bankrupt or insolvent, or
makes an assignment for the benefit of creditors;
(b) If a writ of attachment or execution is levied on this lease;
(c) If, in any proceeding or action to which Tenant is a party, a
receiver is appointed with authority to take possession of the premises.
An involuntary assignment shall constitute a default by Tenant and
Landlord shall have the right to elect to terminate this lease, in which case
this lease shall not be treated as an asset of Tenant.
15.3 Landlord's Expenses. If Landlord consents to an assignment, sublease
or other transfer by Tenant of all or an portion of Tenant's interest under this
Lease, or to a waiver of lien as may be requested by Tenant, Tenant shall pay or
cause to be paid to Landlord, an administrative fee of not less than Five
Hundred and No/100 Dollars ($500.00) to reimburse Landlord for administrative
expenses and for legal, accounting and other out of pocket expenses incurred by
Landlord.
16. DEFAULT; REMEDIES
16.1 Default. The occurrence of any of the following shall constitute a
default by Tenant:
(a) Failure to pay rent or make any other payment when due.
(b) Abandonment and vacation of the premises (failure to occupy
and operate the premises for 10 consecutive days shall be deemed an abandonment
and vacation).
(c) Failure to perform any other provision of this lease if the
failure to perform is not cured within 15 days after notice has been given to
Tenant. If the default cannot reasonably be cured within 15 days, Tenant shall
not be in default of this lease if Tenant commences to cure the default within
the 15 day period and diligently and in good faith continues to cure the
default.
16.2 Remedies. Landlord shall have the following remedies if Tenant
commits a default. These remedies are not exclusive; they are cumulative in
addition to any remedies now or later allowed by law.
(a) Landlord can continue this lease in full force and effect, and
the lease will continue in effect as long as Landlord does not terminate
Tenant's right to possession, and Landlord shall have the right to collect rent
when due. During the period Tenant is in default, Landlord call enter the
premises and relet them, or any part of them, to third parties for Tenant's
account. Tenant shall be liable immediately to Landlord for all costs Landlord
incurs in reletting the premises, including, without limitation, brokers'
commissions, expenses of remodeling the premises required by the reletting, and
like costs. Reletting can be for a period shorter or longer than the remaining
term of this lease. Tenant shall pay to Landlord the rent due under this lease
on the dates the rent is due, less the rent Landlord receives from any
reletting. No act by Landlord allowed by this paragraph shall terminate this
lease unless Landlord notifies Tenant that Landlord elects to terminate this
lease. After Tenant's default and for as long as Landlord does not terminate
Tenant's right to possession of the premises, if Tenant obtains Landlord's
consent Tenant shall have the right to assign or sublet its interest in this
lease, but Tenant shall not be released from liability. Landlord's consent to a
proposed assignment or subletting shall not be unreasonably withheld.
If Landlord elects to relet the premises as provided in this paragraph,
rent that Landlord receives from reletting shall be applied to the payment of:
First, any indebtedness from Tenant to Landlord other than rent due from
Tenant;
Second, all costs, including for maintenance, incurred by Landlord in
reletting;
Third, rent due and unpaid under this lease. After deducting the payments
referred to in this paragraph, an sum remaining from the rent Landlord receives
from reletting shall be held by Landlord and applied in payment of future rent
as rent becomes due under this lease. In no event shall Tenant be entitled to
any excess rent received by Landlord. If, on the date rent is due under this
lease, the rent received from the reletting is less than the rent due on that
date, Tenant shall pay Landlord, in addition to the remaining rent due, all
costs, including for maintenance, Landlord incurred in reletting that remain
after applying the rent received from the reletting as provide in this
paragraph.
(b) Landlord can terminate Tenant's right to possession of the
premises at any time. No act by Landlord other than giving notice to Tenant
shall terminate this lease. Acts of maintenance, efforts to relet the premises,
or the appointment of a receiver on Landlord's initiative to protect Landlord's
interest under this lease shall not constitute a termination of Tenant's right
to possession. On termination, Landlord has the right to recover from Tenant all
damages incurred by Landlord by reason of Tenant's default, including (i) the
worth, at the time of the award, of the unpaid rent that had been earned at the
time of termination of the lease; (ii) the worth, at the time of the award, of
the amount by which the unpaid rent that would have been earned after the date
of termination of this lease until the time of award exceeds the amount of the
loss of rent that Tenant proves could have been reasonably avoided; (iii) the
worth, at the time of the award, of the amount by which the unpaid rent for the
balance of the term after the time of award exceeds the amount of the loss of
rent that Tenant proves could have been reasonably avoided; and (iv) any other
amount, and court costs, necessary to compensate Landlord for all detriment
proximately caused by Tenant's default. "The worth, at the time of the award,"
as usual in subparts (i) and (ii) above, is to be computed by allowing interest
at the maximum rate an individual is permitted by law to charge. "The worth, at
the time of the award," as used in subpart (iii) above, is to be computed by
discounting the amount at the discount rate of the Federal Reserve Bank of San
Francisco at the time of the award, plus 1%.
(c) If Tenant is in default of this lease Landlord shall have the
right to have a receiver appointed to collect rent and conduct Tenant's
business. Neither the filing of a petition for the appointment of a receiver nor
the appointment itself shall constitute an election by Land lord to terminate
this lease.
(d) Landlord, at any time after Tenant commits a default, can cure
the default at Tenant's cost. If Landlord at any time, by reason of Tenant's
default, pays any sum or does any act that requires the payment of any sum, the
sum paid by Landlord shall be due immediately from Tenant to Landlord at the
time the sum is paid, and if paid at a later date shall bear interest at the
maximum rate an individual is permitted by law to charge from the date the sum
is paid by Landlord until Landlord is reimbursed by Tenant. The sum, together
with interest on it, shall be additional rent.
16.3 Interest on Unpaid Rent. Rent not paid when due shall bear interest
from the date due until paid at the rate of 10% per annum; provided, however,
that interest shall not be payable on late charges incurred by Tenant nor on any
amounts upon which late charges are paid by Tenant.
16.4 Late Charge. Tenant acknowledges that late payment by Tenant to
Landlord of rent will cause Landlord to incur costs not contemplated by the
lease, the exact amount of such costs being extremely difficult and
impracticable to fix. Such costs include, without limitation, processing and
accounting charges. Therefore, if any installment of rent due from Tenant is not
received by Landlord within ten (10) days after it is due, Tenant shall pay to
Landlord an additional sum of ten percent (10%) of the overdue rent as a late
charge. The parties agree that this late charge represents a fair and reasonable
estimate of the costs that Landlord will incur by reason of late payment by
Tenant.
16.5 Returned Checks. If any check of Tenant is returned for insufficient
funds, Tenant shall pay Landlord a $50.00 processing charge, in addition to
payment of the amount due plus applicable interest and late charges; provided,
however, this provision is not intended to relieve Tenant from any default in
the making of any payment at the time and in the manner herein specified. If
more than one check of Tenant is returned for insufficient funds, Landlord may
require, upon service of 30 days' written notice, that all future rent be paid
by cashiers check, certified check or money order.
17. SIGNS
Tenant shall not place or permit to be placed any sign, marquee or awning
on the front of said premises without the written consent of Landlord. Tenant,
upon request of Landlord, shall immediately remove any unapproved sign or
decoration which Tenant has placed or permitted to be placed in, on, or about
the front of the premises which, in is objectionable or offensive, and if Tenant
fails so to do, Landlord may enter said premises and remove the same. Tenant is
required to place signage on the premises. Landlord has reserved the exclusive
right to the exterior sidewalks, rear wall and roof of said premises, and Tenant
shall not place or permit to be placed upon said sidewalks, rear wall or roof,
any sign, advertisement or notice without the written consent of Landlord.
In order to keep a continuity of appearance of the buildings, signage will
be limited to a size and type specified by the Landlord. The approved types of
signs consist of raised-cutout plastic covered foam letters on building and
laminate letter inserts on pole sighs. Within 90 days of lease commencement,
Tenant shall have presented sign sketch and layout for Landlord approval, as
well as coordinated the placement and full completion of the approved signage.
All signage requires prior written approval of the copy. Size and color by the
Landlord. Tenant is responsible for the removal of signage upon vacating the
premises.
18. LANDLORD'S ACCESS TO PREMISES
Landlord and its authorized representatives shall have the right to enter
the premises at all reasonable times for any of the following purposes:
a. To determine whether the premises are in good condition and whether
Tenant is complying with its obligations under this lease;
b. To do any necessary maintenance and to make any restoration to the
premises that Landlord has the right or obligation to perform;
c. To serve, post, or keep posted any notice required or allowed under
the provisions of this lease;
d. To post "for sale" signs at any time during the term and to post
"for rent" or "for lease" signs during the last 120 days of the term, or during
any period while Tenant is in default; and
e. To show the premises to prospective purchasers, lenders, brokers, or
Tenants, at any time during the term.
19. SUBORDINATION
This lease is and shall be subordinate to ally encumbrance now of record
or recorded after the date of this lease affecting the premises. Such
subordination is effective without any further act of Tenant. Tenant shall from
time to time on request from Landlord execute and deliver any documents or
instruments that may be required by a lender to effectuate any subordination. If
Tenant fails to execute and deliver any such documents or instruments, Tenant
irrevocably constitutes and appoints Landlord as Tenant's special
attorney-in-fact to execute and deliver any such documents or instruments.
20. ESTOPPEL CERTIFICATE
Tenant, within 10 days after notice from Landlord, shall execute and
deliver to Landlord a certificate stating that this lease is unmodified and in
full force and effect, or in full force and effect as modified, and stating the
modifications. The certificate also shall state the amount of minimum monthly
rent, the dates to which the rent has been aid in advance, and the amount of any
security deposit or repaid rent. Tenant's Failure to deliver such statement
within such time shall be conclusive upon Tenant that this lease is in full
force and effect and has not been modified except as ma be represented by
Landlord, that not more than one month's rent or other charges have been paid in
advance, and that Landlord is not in default under this lease.
21. NOTICES
All notices to be given to Tenant shall be given in writing personally or
by depositing the same in the United States mail, postage prepaid, and addressed
to Tenant at the premises, whether or not Tenant has departed from, abandoned or
vacated the premises. All notices to be given to Landlord shall be given in
writing personally or by depositing the same in the United States mail, postage
prepaid, and addressed to the Landlord at the place designated by Landlord for
the payment of rent, or at such other place or places as may be designated from
time to time by Landlord.
22. WAIVER
No waiver by Landlord of any provision hereof shall be deemed a waiver of
any other provision hereof or of any subsequent breach by Tenant of the same or
any other provision. Landlord's consent to, or approval of, any act shall not be
deemed to render unnecessary the obtaining of Landlord's consent to or approval
of any subsequent act by Tenant. The acceptance of rent hereunder by Landlord
shall not be a waiver of any preceding breach by Tenant of any provision hereof,
other that the failure of Tenant to pay the particular rent so accepted,
regardless of Landlord's knowledge of such preceding breach at the time of
acceptance of rent, and such acceptance does not relieve Tenant's liability for
any late charge due on such rent payment accepted by Landlord.
23. ATTORNEYS' FEES
If either party commences an action against the other party as to rent due
under the lease or for to enforce the other terms of the lease, the prevailing
party shall be entitled to have and recover from the losing party reasonable
attorneys' fees and costs of suit.
24. HOLDING OVER
If Tenant, with Landlord's consent, remains in possession of the premises
or any art thereof after the expiration of the term hereof, such occupancy shall
be a tenancy from month to month upon all of the provisions of this lease
pertaining to the obligations of Tenant, 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.
25. MISCELLANEOUS PROVISIONS
25.1 Time of Essence. Time is of the essence of each provision of this
lease.
25.2 Consent of Parties. Whenever consent or approval of either party is
required, that party shall not unreasonably withhold such consent or approval.
25.3 Provisions Are Covenants and Conditions. All provisions, whether
covenants or conditions, on the part of Tenant shall be deemed to be both
covenants and conditions.
25.4 Successors. This lease shall be binding on and inure to the benefit
of the parties and their successors, except as provided in paragraphs 15.1 and
15.2.
25.5 Additional Rent. Any monetary obligations of Tenant to Landlord
under the terms of this lease shall be deemed to be rent.
25.6 Rent Payable in U.S. Money. Rent payable under this lease must be
paid in lawful money of the United States.
25.7 Severability. The unenforceability, invalidity, or illegality of any
provision shall not render the other provisions unenforceable, invalid, or
illegal.
25.8 Captions. The captions of this lease shall have no effect on its
interpretation.
25.9 Joint and Several Obligations. "Party" shall mean Landlord or
Tenant; and if more than one person or entity is Landlord or Tenant, the
obligations imposed on that party shall be joint and several.
25.10 Authority. If Tenant 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 such entity. If Tenant is a corporation, trust or
partnership, at the request of Landlord, Tenant shall, within thirty (30) days
after execution of this lease, deliver to Landlord evidence of such authority
satisfactory to Landlord.
25.11 Execution of Lease. The delivery of this lease by Landlord to Tenant
shall not be deemed to be an offer or reservation of the premises for Tenant.
Delivery of the lease, full executed by Tenant, to Landlord constitutes an offer
to lease the premises, and this base shall only become effective and binding
upon Landlord's execution hereof and delivery of a signed copy to Tenant.
▇.▇. ▇▇▇▇, ▇▇. FAMILY TRUST dated June 23, 1980
By /S/ ▇.▇. ▇▇▇▇, ▇▇.,
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▇.▇. ▇▇▇▇ ▇▇., Trustee
▇▇▇▇▇▇▇ TRUST dated August 14, 1985
By /S/ ▇.▇. ▇▇▇▇, ▇▇.,
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▇.▇. ▇▇▇▇ ▇▇., Authorized Agent
LANDLORD
/S/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, an Individual
/S/ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
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▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, an Individual
TENANT