Exhibit 10.6
STANDARD INDUSTRIAL LEASE -- NET
AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION
1. Parties. This Lease, dated, for reference purposes only, March 30, 1992, is
made by and between Oceanside Associates (herein called "Lessor" and Packaging
Industrial Group, 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 Sand Diego State of California
commonly known as 572 and ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ and described as two (2)
industrial building of approximately 29, 996 square feet combined area.
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 three (3) years
commencing on April 1, 1992 and ending on March 31, 1995 unless sooner
terminated pursuant to any provision hereof.
3.2 Delay In Possession. Notwithstanding said commencement date, if for
any reason Lessor cannot deliver possession of the Premises Lessee on said date,
Lessee shall not be subject to any liability therefor, nor shall such failure
affect the validity of this Lease or the obligations 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 provision 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 see Addendum, in advance, on the 1st day of each month of the term hereof.
Lessee shall pay Lessor upon the execution hereof $ -0- as rent for ___________.
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 has on deposit with Lessor upon execution hereof
$12,322.72 as security for Lessee's faithful performance of Lessee's obligations
hereunder. If Lessee fails to pay rent or other charges due hereunder, or
otherwise defaults with respect to any provision of this Lease, Lessor may use,
apply or retain all or any portion of said deposit for the payment of any rent
or other charge in default or if 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 deposit to the full amount hereinabove stated and Lessee's failure
to do so shall be a material breach of this Lease. If the monthly rent shall,
from time to time, increase during the term of this Lessee shall thereupon
deposit with Lessor additional security deposit so that the amount of security
deposit held by Lessor shall at all times bear the same proportion to current
rent as the original security deposit so that the amount of security deposit
held by Lessor shall at all times bear the same proportion to current rent as
the original security deposit bears to the original monthly rent set forth in
paragraph 4 hereof, lessor shall not be required to keep said deposit separate
from its general accounts. If Lessee performs all of Lessee's obligations
hereunder, said deposit, or so much thereof as has not theretofore been applied
by Lessor, shall be returned, without payment of interest or other increment for
its use, to Lessee (or, 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 by BZ Pro
Boards, Inc., a related company for the manufacture and distribution of water
sport toys and equipment 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 his paragraph 6.2(a)
shall be of no force or affect if, prior to the date of this Lease, Lessee was
the owner or occupant of the premises, and, in such event, lessee shall correct
any such violation at Lessee's sole cost.
(b) Except as provided in paragraph 6.2(a), Lessee shall, at
Lessee's expense, comply promptly with all applicable statutes, ordinances,
rules, regulations, orders, covenants and restrictions of record and
requirements in effect during the term or any part of the term hereof,
regulating the use by Lessee of the Premises. Lessee shall not use nor permit
the use of the Premises in any manner that will tend to create waste or a
nuisance or, if there shall be more than one tenant in the building containing
the premises, shall tend to disturb such other tenants.
6.3 Condition of Premises.
(a) Lessor shall delivery 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 even 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 growth 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
within thirty (30) days after the Lease commencement date shall cause the
conclusive presumption that Lessor has complied with all of Lessor's obligations
hereunder. The warranty contained in this paragraph 6.3(a) shall be of no force
or effect if prior to the date of this Lease, Lessee was the owner or occupant
of the Premises.
(b) Except as otherwise provided in this Lease, Lessee hereby
accepts the Premises in their conditions existing as of the Last 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), 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.
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 except clean and __________ shall repair any damage to the
Premises ____________ 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 thereto 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 Alternations and Additions.
(a) Lessee shall not, without Lessor's prior written consent
make any alterations, improvements, additions, or Utility installations, on or
about the premises, except for nonstructural alterations not exceeding $2,500 in
cumulative costs during the term of this Lease. In any event, whether or not in
excess of $2,500 in cumulative Cost, lessee shall make no change or alteration
to the exterior of the Premises nor the exterior of the building(s) on the
Premises without Lessor's prior written consent. As used in this Paragraph 7.5
the term "Utility Installation" shall mean carpeting, window coverings, air
lines, power panels, electrical distribution systems, lighting fixtures, space
heaters, air conditioning, plumbing, and fencing. Lessor may require that Lessee
remove any or all of said alterations, improvements, additions or Utility
installations a the expiration of the term, and restore the Premises to their
prior condition. Lessor may require Lessee to provide Lessor, at Lessee's sole
cost and expense, a lien and completion bond in an amount equal to one and
one-half times the estimated cost of such improvements, to insure, Lessor
against any liability for mechanic's and materialmen's liens and to insure
completion of the work. Should Lessee make any alterations, improvements,
additions or Utility Installations without the prior approval of Lessor, lessor
may require that Lessee remove any or all of the same.
(b) Any alternations, improvements, additions or Utility
Installations in , or about the Premises that Lessee shall desire to make and
which requires the consent of the Lessor shall be presented to Lessor in written
form, with proposed detailed plans. If Lessor shall give its consent, the
consent shall be deemed conditioned upon Lessee acquiring a permit to do so from
appropriate governmental agencies, the furnishing of a copy thereof to Lessor
prior to the
commencement of the work and the compliance by Lessee of all conditions of said
permit in a prompt and expeditious manner.
(c) Lessee shall pay, when due, all claims for labor or
materials furnished or alleged to have been furnished to or for Lessee at or for
use in the Premises, which claims are or may be secured by any mechanics' or
materialmen's lien against the Premises or any interest therein. Lessee shall
give Lessor not less than ten (10) days' notice prior to the commencement of any
work in the Premises, and Lessor shall have the right to post notices of
non-responsibility in or on the Premises as provided by law. If lessee shall, in
good faith, contest the validity of any such lien, claim or demand, then Lessee
shall, at its sole expense defend itself and Lessor against the same and shall
pay and satisfy any such adverse judgment that may be rendered thereon before
the enforcement thereof against the Lessor or the Premises, upon the condition
that if Lessor shall require, Lessee shall furnish to Lessor a surety bond
satisfactory to Lessor in an amount equal to such contested lien claim or demand
indemnifying Lessor against attorneys fees and costs in participating in such
action if Lessor shall decide it is to its best interest to do so.
(d) 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(d),
Lessee's machinery and equipment, other than that which is affixed to the
Premises so that it cannot be removed without material damage to the Premises,
shall remain the property of Lessee and may be removed by lessee subject to the
provisions of Paragraph 7.2.
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 $500,00 per occurrence. The
policy shall insure performance by Lessee of the indemnify provisions of this
Paragraph 8. The limits of said insurance shall not however, limit the liability
of Lessee hereunder.
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 $1,100,000.00,
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 lien on the Premises), and special extended perils
("all risk" as such term is used in the Insurance Industry). Said Insurance
shall provide for 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 by 2% per quarter. If the insuring party
shall fall to procure and maintain said insurance the other party may, but shall
not be require 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 1,000 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
cancelable 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 least thirty (30) days prior to the expiration
of such policies, furnish Lessor with renewals or "binders" thereof, or Lessor
may order such insurance and charge the cost thereof to lessee, which amount
shall be payable by Lessee upon demand.
Lessee shall not do or permit to be done anything which shall invalidate the
insurance policies referred to in Paragraph 8.3. If Lessee does nor 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 tot the Premises, Lessor shall delivery 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.
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, 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.
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
part 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) "Promises 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 then 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 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.
(c) "Insured Loss" shall herein mean damage or destruction
which was caused by an event require d to be covered by the insurance described
in paragraph 8.
9.2 Partial Damage -- Insured Loss. Subject to the provisions of
paragraph s 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, d 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
Paragraph 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 even
this Lease shall continue in full force and effect, or (ii) given written notice
to Lessee within thirty (30) days after the date of the occurrence of such
damage of Lessor's intention to cancel and terminate this Lease, as of the date
of the occurrence of such damage. In the event Lessor elects to give such
notice of Lessor's intention to cancel and terminate this Lease, Lessee shall
have the right within ten (10) days after the receipt of such notice to give
written notice to Lessor of Lessee's intention to repair such damage at Lessee's
expense, without reimbursement form Lessor, in which even 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. (Add Party) 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
of this Paragraph 9, the rent payable hereunder for the period during which such
damage, repair or restoration continues shall be abated in proportion to the
degree to which Lessee's use of the premises is impaired. Except for abatement
of rent, if any, lessee shall have no claim against Lessor for any damage
suffered by reason of any such damage, destruction, repair or restoration.
(b) If lessor shall be obligated to repair or restore the
Premises under the provisions of this Paragraph 9 and shall not commence such
repair or restoration within 90 days after such obligations shall accure ,
Lessee may at Lessee's option cancel and terminate this Lease by giving Lessor
written notice of Lessee's election to do so at any time prior to the
commencement of such repair or restoration. In such event his 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 the
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 than 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 charger (i) in substitution, partially
or totally, any tax, fee, levy, assessment or charge hereinabove included within
the definition of "real property tax," or (ii) the nature of which was
hereinbefore included within the definition of "real property tax," or (iii)
which is imposed for a service or right not charged prior to June 1, 1976, or if
previously charged, has been increased since June 1, 1978, or (iv) which is
imposed as a result of a transfer, either partial or total, of Lessor's interest
in the premises or which is added to a tax or charge hereinbefore included
within the definition of real property tax by reason of such transfer, or (v)
which is imposed by reason of this transaction, any modifications or changes
hereto, or any transfers hereof.
10.3 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 hereunder in a
timely manner and any attempted assignment, transfer, mortgage, encumbrance or
subletting without such consent shall be void, and shall constitute a breach of
this Lease.
12.2 Lessee Affiliate. Notwithstanding the provisions of paragraph 12.1
hereof, lessee may assign or sublet the Premises, or any portion thereof,
without Lessor's consent, to any corporation which controls, is controlled by or
is under common control with Lessee, or to any corporation resulting from the
merger or consolidation with Lessee, or to any person or entity which acquires
all the assets of Lessee as a going concern of the business that is being
conducted on the Premises, provided that said assignee assumes, in full, the
obligations of Lessee under this Lease. Any such assignment shall not in any
way, affect or limit the liability of Lessee under the terms of this Lease even
if after such assignment or subletting the terms of this Lease are materially
changed or altered without the consent of Lessee, the consent of whom shall not
be necessary.
12.3 No Release of Lessee. Regardless of Lessor's consent, no
subletting or assignment shall release Lessee of Lessee's obligation or alter
the primary liability of Lessee to pay the rent and to perform all other
obligations to be performed by Lessee hereunder. THE acceptance of rent by
Lessor from any other person shall not be deemed to be a waiver by lessor
of any provision hereof. Consent to one assignment or subletting shall not be
deemed consent to any subsequent assignment or subletting. In the event of
default by any assignee of Lessee or any successor of Lessee, in the performance
of any of the terms hereof, Lessor may proceed directly against Lessee without
the necessity of exhausting remedies against said assignee. Lessor may consent
to subsequent assignments or subletting of this Lease or amendments or
modifications to this Lease with assignees ___________. In the event Lessee
shall assign or sublet the Premises or request the consent of Lessor to any
assignment or subletting or if Lessee shall request the consent of lessor for
any act Lessee proposes to do then Lessee shall pay Lessor's reasonable
attorneys fees incurred in connection therewith, such attorneys fees not to
exceed $350,000 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 payment of rent or any
other payment required to be made by Lessee hereunder, as and when due, where
such failure shall continue for a period of three days after written notice
thereof from Lessor to Lessee. In the event that Lessor serves Lessee with a
Notice to Pay Rent or Quit pursuant to applicable Unlawful Detainer statutes
such Notice to Pay Rent or Quit shall also constitute the notice required by
this subparagraph.
(c) The failure by Lessee to observe or perform any of the
covenants, conditions or provisions of this Lease to be observed or performed by
Lessee, other than described in paragraph (b) above, where such failure shall
continue for a period of 30 days after written notice thereof from Lessor to
Lessee; provided, however, that if the nature of Lessee's default is such that
more than 30 days are reasonably required for its cure, then Lessee shall not be
deemed to be in default if Lessee commenced such cure within said 30-day period
and thereafter diligently prosecutes such cure to completion.
(d) (i) The making by Lessee of any general arrangement or
assignment for the benefit of creditors; (ii) Lessee becomes a "debtor" as
defined in 11 U.S.C. ss.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 Lessees shall
immediately surrender possession of the Premises to Lessor. In such event Lessor
shall be entitled to recover from Lessee all damages incurred by Lessor by
reason of Lessee's default including, but not limited to, the cost of recovering
possession of the Premises; expenses of reletting, including necessary
renovation and alteration of the Premises, reasonable attorney's fees, and any
real estate commission actually paid; the worth at the time of award by the
court having jurisdiction thereof of the amount by which the unpaid rent for the
balance of the term after the time of such award exceeds the amount of such
rental loss for the same period that Lessee proves could be reasonably avoided;
that portion of the leasing commission paid by Lessor pursuant to Paragraph 15
applicable to the unexpired term of this Lease.
(b) Maintain Lessee's right to possession in which case this
Lease shall continue in effect whether or not Lessee shall have abandoned the
Premises. In such event Lessor shall be entitled to enforce all of Lessor's
rights and remedies under this Lease, including the right to recover the rent as
it becomes due hereunder.
(c) Pursue any other remedy now or hereafter available to
Lessor under the laws or judicial decisions of the state wherein the Premises
are located. Unpaid installments of rent and other unpaid monetary obligations
of Lessee under the terms of this Lease shall bear interest from the date due at
the maximum rate then allowable by law.
13.3 Default by Lessor. Lessor shall not be in default unless Lessor
fails to perform obligations required of Lessor within a reasonable time, but in
no event later than thirty (30) days after written notice by Lessee to Lessor
and to the holder of any first mortgage or deed of trust covering the Premises
whose name and address shall have theretofore been furnished to Lessee in
writing, specifying wherein Lessor has failed to perform such obligation;
provided, however, that if the nature of Lessor's obligations 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, in addition to any other payments required
under this Lease, a monthly advance installment, payable at the same time as the
monthly rent, as estimated by Lessor, for real property tax and insurance
expenses on the Premises which are payable by Lessee under the terms of this
Lease. Such fund shall be established to insure payment when due, before
delinquency, of any or all such real property taxes and insurance premiums. If
the amounts paid to Lessor by Lessee under the provisions of this paragraph are
insufficient to discharge the obligations of Lessee to pay such real property
taxes and insurance premiums as the same become due, Lessee shall pay to Lessor,
upon Lessor's demand, such additional sums necessary to pay such obligations.
All moneys paid to Lessor under this paragraph may be intermingled with other
moneys of Lessor and shall not bear interest. In the event of a default in the
obligations of Lessee to perform under this Lease, then any balance remaining
from funds paid to Lessor under the provisions of this paragraph may, at the
option of Lessor, be applied to the payment of any monetary default of Lessee in
lieu of being applied to the payment of real property tax and insurance
premiums.
14. Condemnation. 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 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 ▇▇▇▇▇-▇▇▇▇ Commercial Brokerage Company, Inc. as per letter agreement
dated September 24, 1992 Licensed real estate broker(s), a fee as set forth in a
separate agreement between lessor and said broker(s), or in the event there is
no separate agreement between Lessor and said broker(s), the sum of $_______,
for brokerage services rendered by said broker(s) to Lessor in this transaction.
(b) Lessor further agrees that if Lessee exercises any Option
as defined in paragraph 39.1 of this Lease, which is granted to Lessee under 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
transaction, Lessor shall pay said broker(s) a fee in accordance with the
schedule of said broker(s) in effect at the time of execution of this Lease.
(c) Lessor agrees to pay said fee not only on behalf of Lessor
but also on behalf of any person, corporation, association, or other entity
having an ownership interest in said real property or any part thereof, when
such fee is due hereunder. Any transferee of Lessor's interest in this Lease,
whether such transfer is by agreement or by operation of law, shall be deemed to
have assumed Lessor's obligation under this Paragraph 15. Said broker shall be a
third party beneficiary of the provisions of this Paragraph 15.
16. Estoppel Certificate.
(a) Lessee shall at any time upon not less than ten (10) days'
prior written notice from Lessor execute, acknowledge and deliver to Lessor a
statement in writing (i) certifying that this Lease is unmodified and in full
force and effect (or, if modified, stating the nature of such modification and
certifying that this Lease, as so modified, is in full force and effect) and the
date to which the rent and other charges are paid in advance, if any, and (ii)
acknowledging that there are not, to Lessee's knowledge, any uncured defaults on
the part of Lessor hereunder, or specifying such defaults if any are claimed.
Any such statement may be conclusively relied upon by any prospective purchaser
or encumbrancer of the Premises.
(b) At Lessor's option, Lessee's failure to deliver such
statement within such time shall be a material breach of this Lease or shall be
conclusive upon Lessee (I) that this Lease is in full force and effect, without
modification except as may be 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 lessor'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.
18. Severability. The invalidity of any provision of this Lease as determined by
a court of competent jurisdiction, shall in no way affect the validity of any
other provision hereof.
19. Interest on Past-Due Obligations. Except as expressly herein provided, any
amount due to Lessor not paid when due shall bear interest at the maximum rate
then allowable by law from the date due. Payment of such interest shall not
excuse or cure any default by Lessee under this Lease, provided, however, that
interest shall not be payable on late charges incurred by Lessee nor on any
amounts upon which late charges are paid by Lessee.
20. Time of Essence. Time is of the essence.
21. Additional Rent. Any monetary obligations of Lessee to Lessor under the
terms of this Lease shall be deemed to be rent.
22. Incorporation of Prior Agreements; Amendments. This Lease contains all
agreements of the parties with respect to any matter mentioned herein. No prior
agreement or understanding pertaining to any such matter shall be effective.
This Lease may be modified in writing only, signed by the parties in interest at
the time of the modification. Except as otherwise stated in this Lease, Lessee
hereby acknowledges that neither the real estate broker listed in Paragraph 15
hereof nor any cooperating broker on this transaction nor the Lessor or any
employees or agents of any of sales persons has made any oral or written
warranties or representations to Lessee relative to the condition or use by
Lessee of said Premises and Lessee acknowledges that Lessee assumes all
responsibility regarding the Occupational Safety Health Act, the legal use and
adaptability of the Premises and the compliance thereof with all applicable laws
and regulations in effect during the term of this Lease except as otherwise
specifically stated in this Lease.
23. Notices. Any notice required or permitted to be given hereunder shall be in
writing and may be given by personal delivery or by certified mail and if given
personally or by mail, shall be deemed sufficiently given if addressed to Lessee
or to Lessor at the address noted below the signature of the respective parties,
as the case may be. Either party may by notice to the other specify a different
address for notice purposes except that upon Lessee's taking possession of the
Premises, the Premises shall constitute Lessee's address for notice purposes. A
copy of all notices required or permitted to be given to Lessor hereunder shall
be concurrently transmitted to such party or parties at such addresses as Lessor
may from time to time hereafter designate by notice to Lessee.
24. Waivers. No waiver by Lessor or any provision hereof shall be deemed a
waiver of any other provision hereof or of any subsequent breach by Lessee of
the same or any other provision. Lessor's consent to, or approval of, any act
shall not be deemed to render unnecessary the obtaining of Lessor's consent to
or approval of any subsequent act by Lessee. The acceptance of rent hereunder by
Lessor shall not be a waiver of any preceding breach by Lessee of any provision
hereof, other than the failure of Lessee to pay the particular rent so accepted,
regardless of Lessor's knowledge of such preceding breach at the time of
acceptance of such rent.
25. 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.
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 a tenancy from month to month upon all the provisions of this
Lease pertaining to the obligations of Lessee, but all options and rights of
first refusal, if any, granted under the terms of this Lease shall be deemed
terminated and be of no further effect during said month to month tenancy.
27. Cumulative Remedies. No remedy or election hereunder shall be deemed
exclusive but shall, wherever possible, be cumulative with all other remedies at
law or in equity.
28. Convenants and Conditions. Each provision of this Lease preformable 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, or trial or appeal, shall be entitled to his reasonable
attorney's fees to be paid by the losing party as fixed by the court. The
provisions of this paragraph shall inure to the benefit of the broker named
herein who seeks to enforce a right hereunder.
32. Lessor's Access. Lessor and Lessors agents shall have the right to enter the
Premises at reasonable times for the purpose of inspecting the same, showing the
same to prospective purchasers, lenders, or lessees, and making such
alterations, repairs, improvements or additions to the Premises or to the
building of which they are a part as Lessor may deem necessary or desirable.
Lessor may at any time place on or about the Premises 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 an ordinary "For Lease" signs, all without rebate
of rent or liability to Lessee.
33. Auctions. Lessee shall not conduct, nor permit to be conducted, either
voluntarily or involuntarily, any auction upon the Premises without first having
obtained Lessor's prior written consent. Notwithstanding anything to the
contrary in this Lease, Lessor shall not be obligated to exercise any standard
of reasonableness in determining whether to grant such consent.
34. Signs. Lessee shall not place any sign upon the Premises without Lessor's
prior written consent except that Lessee shall have the right without 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, merger,
and shall, at the option of Lessor, terminate all or any existing subtenancles
or may, at the option of Lessor, operate as an assignment to Lessor of any or
all of such subtenancles.
36. Consents. Except for paragraph 33 hereof, wherever in this Lease the consent
of one party is required to an act of the other party such consent shall not be
unreasonably withheld.
37. Guarantor. In the event that there is a guarantor of this Lease, said
guarantor shall have the same obligations as Lessee under this Lease.
38. Quiet Possession. Upon Lessee paying the rent for the Premises and observing
and performing all of the covenants, 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 executive this Lease on behalf of Lessor represent and
warrant to Lessee that they are fully authorized and legally capable of
executing this Lease on behalf of Lessor and that such execution is binding upon
all parties holding an ownership interest in the Premises.
39. Options.
39.1 Definition. As used in this paragraph the word "Options" has the
following meaning: (1) the right or option to extend the term of this Lease or
to renew this Lease or to extend or renew any lease that Lessee has on other
property of Lessor; (2) the option or right of first refusal to lease the
Premises or the right of first offer to leas 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 [Illegible] _______________________________________
39.3 Multiple Options. In the event that Lessee has any multiple
options to extend or renew this Lease a later option cannot be exercised unless
the prior option to extend or renew this Lease has been so exercised.
39.4 Effect of Default on Options.
(a) Lessee shall have no right to exercise an Option,
notwithstanding any provision in the grant of Option to the contrary, (I) during
the time commencing from the date Lessor gives to Lessee a notice of default
pursuant to paragraph 13.1(b) or 13/1(c) and continuing until the default
alleged in said notice of default is cured, or (II) during the period of time
commencing on the day after a monetary obligation to Lessor is due from Lessee
and unpaid (without any necessity for notice thereof to Lessee) continuing until
the obligation is paid, or (III) at any time after an event of default described
in paragraph 13.1(a), 13.1(d), or 13.1(e) (with 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 time 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 note the defaults are cured.
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 part thereof, said party shall be entitled to recover such sum
or so much thereof as it was not legally required to pay under the provisions of
this Lease.
44. Authority. If Lessee is a corporation, trust, or general or limited
partnership, each individual executing this Lease on behalf of such entity
represents and warrants that he or she is duly authorized to execute and deliver
this Lease on behalf of said entity. If Lessee is a corporation, trust or
partnership, Lessee shall, within thirty (30) days after execution of this
Lease, deliver to Lessor evidence of such authority satisfactory to Lessor.
45. Conflict. Any conflict between the printed provisions of this Lease and the
typewritten or handwritten provisions shall be controlled by the typewritten or
handwritten provisions.
46. Insuring Party. The insuring party under this lease shall be the Lessee for
572 ($500,000)/Lessor for 576 ($600,000).
47. Addendum. Attached hereto is an addendum or addenda containing paragraphs A
through D which constitutes a part of this Lease.
48. See attached Exhibit "A" for description of premises and tenant
improvements.
LESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH
TERM AND PROVISION CONTAINED HEREIN AND, BY EXECUTION OF THIS LEASE,
SHOW THEIR INFORMED AND VOLUNTARY CONSENT THERETO. THE PARTIES HEREBY
AGREE THAT, AT THE TIME THIS LEASE IS EXECUTED, THE TERMS OF THIS LEASE
ARE COMMERCIALLY REASONABLE AND EFFECTUATE THE INTENT AND PURPOSES OF
LESSOR AND LESSEE WITH RESPECT TO THE PREMISES.
IF THIS LEASE HAS BEEN FILLED IN IT HAS BEEN PREPARED FOR SUBMISSION TO
YOUR ATTORNEY FOR HIS APPROVAL. NO REPRESENTATION OR RECOMMENDATION IS
MADE BY THE AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION OR BY THE REAL
ESTATE BROKER OR ITS AGENTS OR EMPLOYEES AS TO THE LEGAL SUFFICIENCY,
LEGAL EFFECT, OR TAX CONSEQUENCES OF THIS LEASE OR THE TRANSACTION
RELATING THERETO; THE PARTIES SHALL RELY SOLELY UPON THE ADVICE OF
THEIR OWN LEGAL COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS
LEASE.
The parties hereto have executed this Lease at the place on the dates
specified immediately adjacent to their respective signatures.
Executed at OCEANSIDE ASSOCIATES
----------------------------- -------------------------------
on By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------------------- ------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇
Address ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ By
------------------------------- ------------------------
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------------
"LESSOR" (Corporate Seal)
Executed at Hyannis, Massachusetts PACKAGING INDUSTRIES GROUP, INC.
------------------------ ------------------------------------
on April 1, 1992 By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------- -----------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Address ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ By /s/ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------ -----------------------------
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ "LESSEE" (Corporate Seal)
-------------------------------------
47. A. RENTAL SCHEDULE:
April 1, 1992 through March 31, 1993: The rent shall be Ten
Thousand Four Hundred Ninety-Eight and 50/100ths Dollars
($10,498.50) per month;
April 1, 1993 through March 3,1 1994: The rent shall be Eleven
Thousand Six Hundred Ninety-Eight and 44/100ths Dollars
($11,698.44) per month;
April 1, 1994 through March 31, 1995: The rent shall be Twelve
Thousand Two Hundred Ninety-Eight and 36/100ths Dollars
($12,298.36) per month.
B. OPTION TO EXTEND THE LEASE TERM:
I. Provided that the Lease is still in full force and effect
and that Lessee is not in default in the payment of rent or
of any of the terms and conditions of the Lease, Lessor
grants to Lessee the right and option to extend the term of
this Lease for an additional two (2) year period ("Extended
Term") commencing on April 1, 1995, the date of the first
day following the expiration of the original term, and
ending on March 31, 1997; provided, that Lessee shall have
exercised this option by having given Lessor written notice
of election to extend the term of this Lease at least ninety
(90) days prior to the expiration of the original term of
this Lease. Except for the rental adjustment as hereinafter
set forth, all other terms and conditions of the Lease shall
apply to the Extended Term.
II. Lessee agrees to pay to Lessor in advance on the first day
of each and every month during the Extended Term the monthly
rent determined in the following manner:
a. The parties hereto shall attempt to agree upon the then
prevailing market rent for similar property for the
Extended Term during the ninety (90) through sixty (60)
days immediately preceding the first day of the
Extended Term. If the parties agree on the adjusted
rent within the time specified, the parties will
forthwith execute a letter agreement reflecting the
monthly rent for the Extended Term.
b. If the parties are unable to agree upon the adjusted
rent for the Extended Term within the time provided
above, then within five (5) days thereafter Lessor
shall appoint an arbitrator and immediately notify
Lessee in writing of said appointment and of the name
and address of the arbitrator so appointed, and Lessee
shall also similarly at said time appoint an arbitrator
and immediately notify Lessor in writing of aid
appointment and of the name and address of the
arbitrator so appointed. If the two arbitrators do not
within thirty (30) days after their appointment agree
on the monthly rent for the premises, then the two (2)
arbitrators shall immediately appoint a third
arbitrator, and the decision of any two of said
arbitrators shall be binding on the parties thereto.
Such decision in each respective instance shall be
rendered on or before twenty-five (25) days before the
commencement of the Extended Term. The decision of the
arbitrators shall be made in writing and signed by the
arbitrators in duplicate. One of the writings shall be
delivered to Lessor and the other to Lessee. Lessor and
Lessee shall pay the respective charges and expenses of
the arbitrator appointed by each party. the charges for
services of the third arbitrator and the other expenses
of the arbitration shall be borne by the parties hereto
in equal shares.
c. If for any of such periods the parties hereto do not
mutually agree on the monthly rent for the Extended
Term and fail to appoint an arbitrator as hereinabove
provided, or if for any of such periods said
arbitrators fail to agree, and failing to agree do not
appoint a third arbitrator as herein provided, or if
for any of such periods said arbitrator or any two of
them, as hereinabove provided, do not agree on the
monthly rent before the twenty-fifth (25th) day
preceding the commencement of the Extended Term, then
the monthly rent shall be determined by the Superior
Court of the State of California for the County of San
Diego in a declaratory relief or other action or
actions brought therein for that purpose and in any
such action or actions, each party hereto shall bear
his own attorneys' fees and costs.
d. All arbitrators shall be licensed M.A.I. appraisers.
e. In no event shall the monthly rent for any Extended
Term be less than the monthly rent in effect
immediately prior to the commencement of the Extended
Term.
C. TENANT IMPROVEMENTS: Lessor, at Lessor's cost, shall make the
following improvements to the premises beginning immediately upon
execution of this Lease:
I. Add sufficient heating, ventilating and air conditioning
(HVAC) units to service the office area currently
unserviced at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ (see Exhibit
"A");
II. Fill-in the truck well area at the rear end of 572 airport
Road, Oceanside in such a manner that it will be of the
same grade and level as the existing parking/loading area
(see Exhibit "A");
III. Install a fence and a gate enclosing the parking area on
the east side of ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ (see Exhibit
"A");
-24- Initials:____
____
IV. Install a fence and a gate between the buildings at 572 and
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ (see Exhibit "A");
V. Install some warehouse strip lighting at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇;
VI. Construct an additional office of about 400 square feet to
include HVAC, drop ceiling, lights, carpet and finish paint
(See Exhibit "A");
VII. Repair existing exterior lighting system.
-25- Initials:____
____
D. RIGHT OF FIRST REFUSAL: Lessor hereby grants to Lessee the right
of first refusal to purchase the premises upon the terms and
conditions of a bona fide offer to purchase the premises
acceptable to Lessor from a third party up to and including March
31, 1993. Lessee shall have ten (10) days form receipt of notice
of such bona fide offer in which to elect to purchase the
premises. Said notice shall contain a true copy of the bona fide
offer to purchase. In the event Lessee does not timely elect to
purchase on such terms, lessor may sell the premises to said
third party upon the terms and conditions set forth in the
notice. In the event Lessor does not consummate the sale of the
premises to such third party upon the terms and conditions
contained in the notice to lessee, this right of first refusal
shall be revived in its entirety, but in no event shall this
right extend beyond March 31, 1993. Should Lessee purchase the
premises, this Lease shall terminate upon the date title vests in
Lessee, and Lessor shall remit to Lessee all unearned rent. In
addition, should Lessee purchase the premises, lessor shall pay
to ▇▇▇▇▇-▇▇▇▇ Commercial Brokerage Company, Inc. a commission in
accordance with its standard Schedule of Commissions.
OCEANSIDE ASSOCIATES
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
------------------------------ --------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇ Date
PACKAGING INDUSTRIES GROUP, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ APRIL 1, 1992
------------------------------ --------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Date
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------ --------------------
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Date
-26- Initials:____
____
ADDENDUM
DATE _____________________________
ADDENDUM TO LEASE DATED MARCH 30, 1992 BY AND BETWEEN OCEANSIDE ASSOCIATES, AS
LESSOR, AND PACKAGING INDUSTRIES GROUP, INC., AS LESSEE, FOR THE PREMISES KNOWN
AS 572 AND ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇.
--------------------------------------------------------------------------------
47. A. RENTAL SCHEDULE:
April 1, 1992 through March 31, 1993: The rent shall be Ten
Thousand Four Hundred Ninety-Eight and 50/100ths Dollars
($10,498.50) per month;
April 1, 1993 through March 31, 1994: The rent shall be Eleven
Thousand Six Hundred Ninety-Eight and 44/100ths ($11,698.44)
per month;
April 1, 1994 through March 31, 1995: The rent shall be Twelve
Thousand Two Hundred Ninety-Eight and 36/100ths Dollars
($12,298.36) per month.
B. OPTION TO EXTEND THE LEASE TERM:
I. Provided that the Lease is still in force and effect
and that Lessee is not in default in the payment of
rent or of any of the terms and conditions of the
Lease, Lessor grants to Lessee the right and option to
extend the term of this Lease for an additional two (2)
year period ("Extended Term") commencing on April 1,
1995, the date of the first day following the
expiration of the original term, and ending on March
31, 1997; provided, that Lessee shall have exercised
this option by having given Lessor written notice of
election to extend the term of this Lease at least
ninety (90) days prior to the expiration of the
original term of this Lease. Except for the rental
adjustment as hereinafter set forth, all other terms
and conditions of the Lease shall apply to the Extended
Term.
II. Lessee agrees to pay to Lessor in advance on the first
day of each and every month during the Extended Term
the monthly rent determined in the following manner:
a. The parties hereto shall attempt to agree upon the
then prevailing market rent for similar property
for the Extended Term during the ninety (90)
through sixty (60) days immediately preceding the
first day of the Extended Term. If the parties
agree on the adjusted rent within the time
specified, the parties will forthwith execute a
letter agreement reflecting the monthly rent for
the Extended Term.
-27- Initials:____
____
b. If the parties are unable to agree upon the
adjusted rent for the Extended Term within the
time provided above, then within five (5) days
thereafter Lessor shall appoint an arbitrator and
immediately notify Lessee in writing of said
appointment and of the name and address of the
arbitrator so appointed, and Lessee shall also
similarly at said time appoint an arbitrator and
immediately notify Lessor in writing of said
appointment and of the name and address of the
arbitrator so appointed. If the two arbitrators do
not within thirty (30) days after their
appointment agree on the monthly rent for the
premises, then the two (2) arbitrators shall
immediately appoint a third arbitrator, and the
decision of any two of said arbitrators shall be
binding on the parties hereto. Such decision in
each respective instance shall be rendered on or
before twenty-five
-28- Initials:____
____
SECOND ADDENDUM TO LEASE DATED MARCH 30, 1992 BY AND BETWEEN OCEANSIDE
ASSOCIATES, AS LESSOR, AND PACKAGING INDUSTRIES GROUP, INC., AS LESSEE, FOR THE
PREMISES KNOWN AS 572 AND ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
--------------------------------------------------------------------------------
1. TERM: The term of the Lease shall be extended to and including March
31, 1997.
2. RENT: The rent for this extended period shall be as follows:
April 1, 1995 thru March 31, 1996: The rent shall be
$12,298.36 per month ("Base Rent");
April 1, 1996 thru March 31, 1997: The rent shall be the base
rent plus a cost of living increase as set forth below:
a) RENT - COST OF LIVING ADJUSTMENT: The monthly rent provided
for above ("Base Rent") shall be subject to adjustment in the
following manner:
At the commencement of the second (2nd) year of the extended
term ("Adjustment Date") the Consumer Price Index for Urban
Wage Earners and Clerical Workers for the Los Angeles/Long
Beach Metropolitan Area published by the Department of Labor,
Bureau of Labor Statistics, United States Government, All
Items, 1982=100, as it exists on the Adjustment Date in
question shall be compared with the Index as the same existed
on April 1, 1995 ("Base Index"). In the event the Index as of
such Adjustment Date is higher than the Base Index, the
monthly rent until the next Adjustment Date, or until the
expiration of the lease term as the cause may be, shall be
increased by multiplying the Base Rent by a fraction the
numerator of which is the Index as the same exists on such
Adjustment Date, and the denominator of which is the Base
Index. In no event shall the monthly rent at any time during
the term be less than the monthly rent payable immediately
prior to the Adjustment Date in question, and the Lessee shall
continue to pay the rent for the prior period until the index
is made public. When the Index is made public, Lessee shall
immediately pay to Lessor the deficiency in rent due to the
time lag upon Lessor's submission to Lessee of a statement
setting forth the adjusted monthly rent reflecting the
increase in the Index. Upon adjustment of the monthly rent as
herein provided, the parties will forthwith execute a letter
agreement reflecting the new monthly rent.
-29- Initials:____
____
If, in the future, the Index shall be changed so that the base
year differs from 1982=100, the Index shall be converted in
accordance with the conversion factor published by the United
States Department of Labor, Bureau of Labor Statistics. In the
event the Index is discontinued or revised during the term
hereof, such other governmental index or computation with
which it is replaced shall be used on order to obtain
substantially the same result that would be obtained if said
present Index had not been discontinued or revised. In the
event the Index is not replaced with another governmental
index or computation, Lessor and Lessee shall accept
comparable statistics on the purchasing power of the consumer
dollar as published at the time of said discontinuance by a
responsible financial periodical or recognized authority
chosen by the parties. If the parties cannot agree upon a
financial periodical as the source of comparable statistics
after attempting for twenty (20) days to reach such agreement,
the percentage increase for the ensuing period shall be
determined by arbitration according to the rules of the
American Arbitration Association and the decision of the
arbitrators shall be binding on the parties.
3. TENANT IMPROVEMENTS: Lessor, at Lessor's cost, shall make the following
improvements to the Premises:
a) Install a new roof on both buildings; by June 30, 1995
b) Repair or service (as the case prescribes) the heating,
ventilating and air conditioning (HVAC) units in both
buildings bringing the units to good working condition;
c) Trim all of the trees on the premises.
AGREED AND ACCEPTED:
LESSOR: /s/ (illegible) DATE 3/20/95
---------------------------------------- -------
LESSEE: /s/ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, President DATE 3/10/95
---------------------------------------- -------
Earth and ocean Sports, Inc. successor in
interest to Packaging Industries Group, Inc.
-30- Initials:____
____
THIRD ADDENDUM TO LEASE DATED MARCH 30, 1992 BY AND BETWEEN OCEANSIDE
ASSOCIATES, AS LESSOR, AND PACKAGING INDUSTRIES GROUP, INC., AS LESSEE, FOR THE
PREMISES KNOWN AS 572 AND ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
--------------------------------------------------------------------------------
1. TERM:
The term of the Lease shall be extended to and including March 31,
1998.
2. RENT:
The rent for the extended period shall remain the same as the rent
currently payable.
3. OPTION TO EXTEND LEASE TERM:
(a) Provided that the Lease is still in full force and effect and that
Lessee is not in default in the payment of rent or of any of the terms
and conditions of the Lease, Lessor grants to Lessee the right and
option to extend the term of this Lease for an additional two (2) year
period ("Extended Term") commencing on April 1, 1998, the date of the
first day following the expiration of the original term, and ending on
March 31, 2000; provided, that Lessee shall have exercised this option
by having given Lessor written notice of election to extend the term of
this Lease at least one hundred eighty (180) days prior to the
expiration of the original term of this Lease. Except for the rental
adjustment as hereinafter set forth, all other terms and conditions of
the Lease shall apply to the Extended Term.
(b) Lessee agrees to pay to Lessor in advance on the first day of each
and every month during the Extended Term the monthly rent determined in
the following manner:
(i) The parties hereto shall attempt to agree upon the then
prevailing market rent for the Extended Term during the one
hundred eighty (180) through the one hundred fifty (150) days
immediately preceding the first day of the applicable Extended
Term. If the parties agree on the adjusted rent within the time
specified, the parties will forthwith execute a letter agreement
reflecting the monthly rent for the applicable Extended Term.
(ii) If the parties are unable to agree upon the adjusted rent for
an applicable Extended Term within the time provided above, then
within ten (10) days thereafter Lessor shall appoint an arbitrator
and immediately notify Lessee in writing of said appointment and
of the name and address of the arbitrator so appointed, and Lessee
shall also similarly at said time appoint an arbitrator and
immediately notify Lessor in writing of said appointment and of
the name and address of the arbitrator so appointed. If the two
arbitrators do not within twenty
-31- Initials:____
____
(20) days after their appointment agree on the monthly rent for
the Premises, then the two (2) arbitrators shall immediately
appoint a third arbitrator, and the decision of any two of said
arbitrators shall be binding on the parties hereto. Such decision
in each respective instance shall be rendered on or before ninety
(90) days before the commencement of the Extended Term. The
decision of the arbitrators shall be made in writing and signed by
the arbitrators in duplicate. One of the writings shall be
delivered to Lessor and the other to Lessee. Lessor and Lessee
shall pay the respective charges and expenses of the arbitrator
appointed by each party. The charges for services of the third
arbitrator and the other expenses of the arbitration shall be
borne by the parties hereto in equal shares.
(iii) If for any of such periods the parties hereto do not
mutually agree on the monthly rent for the applicable Extended
Term and fail to appoint an arbitrator as hereinabove provided, or
if for any of such periods said arbitrators fail to agree, and
failing to agree do not appoint a third arbitrator as herein
provided, or if for any of such periods said arbitrator or any two
of them, as hereinabove provided, do not agree on the monthly rent
before the ninetieth (90th) day preceding the commencement of the
applicable Extended Term, then the monthly rent shall be
determined by the Superior Court of the State of California for
the County of Los Angeles in declaratory relief or other action or
actions brought therein for that purpose and in any such action or
actions, each party hereto shall bear his own attorneys' fees and
cost.
(iv) All arbitrators shall be licensed M.A.I. appraisers.
(v) In no event shall the monthly rent for any Extended Term be
less than the monthly rent in effect immediately prior to the
commencement of the applicable Extended Term.
4. HEATING AND AIR CONDITIONING:
Lessor agrees to adjust the heating, ventilating and air conditioning
(HVAC) in the buildings so that they function more efficiently.
However, Lessor will not be required to add any capacity or ducting to
the existing system.
AGREED AND ACCEPTED:
LESSOR: /s/ ▇▇▇▇▇ ▇▇▇▇▇ DATE: 3/19/97
-------------------------------------------- ---------------
OCEANSIDE ASSOCIATES
LESSEE: /s/ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ DATE: 2/24/97
-------------------------------------------- ---------------
EARTH AND OCEAN SPORTS, INC., SUCCESSOR IN
INTEREST TO PACKAGING INDUSTRIES GROUP, INC.
-32- Initials:_______
_______