AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION
Exhibit
10.12
AMERICAN
INDUSTRIAL REAL ESTATE ASSOCIATION
1. Parties.
This
lease, dated, for reference purposes only July 1,
1986,
is made by and between ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
(herein
celled “Lessor”) and R.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, 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 San ▇▇▇▇ Obispo State of California, commonly
known as ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
described as Industrial
and office building complex located upon the certain real property more
particularly described as follows:
Parcels
1
and 2 of Parcel Map CO 87-164 recorded in Book 45 at page 77 of Parcel Maps,
San
▇▇▇▇ Obispo County, California.
said
real
property including the land end all improvements thereon, is herein called
“the
Premises”.
3. Term.
3.1 Term.
The
term of this lease shall be for 15
Years
commencing on May 1,
1990,
and
ending on April
30, 2005
unless
sooner terminated pursuant to any provision hereof. (See Rider).
3.2 Delay
in
Commencement. Notwithstanding said commencement date, if for any reason Lessor
cannot deliver possession of the Premises in to Lessee on said date, Lessor
shall not be subject to any liability therefor, nor shall such failure affect
the validity of this Lease or the obligations of Lessee hereunder or extend
the
term hereof, but in such case Lessee shall not be obligated to pay rent until
possession of the Premises is tendered Lessee; provided, however, that if Lessor
shall not have delivered possession of the Premises within sixty (60) days
from
said commencement, 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. If Lessee occupies
the Premises prior to said commencement date, such occupancy shall be subject
to
all provisions hereof, such occupancy shall not advance the termination date,
and Lessee shall pay rent for such period at the initial monthly rates set
forth
below.
4. Rent.
Lessee
shall pay to Lessor as rent for the Premises equal monthly payments of
$60,000.00,
in
advance, on the 1st
day of
each month of the term hereof. Lessee shall pay Lessor upon the execution hereof
$120,000.00
as rent
for The
First and Last Months
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 Slates to Lessor at the address stated herein or to such
other persons or at such other places as Lessor may designate in writing. (See
Rider).
5. Security
Deposit.
Lessee
shall deposit with Lessor upon execution hereof $60,000.00
as
security for Lessee’s faithful performance of Lessee’s obligations hereunder. If
Lessee falls to pay rent or other charges dye hereunder, or otherwise defaults
with respect to any provision of this Lease, Lessor may use, apply or retain
all
or any portion of said deposit for the payment of any rent or other charge
in
default or for the payment of any other sum to which Lessor may become obligated
by reason of Lessee’s default, or to compensate Lessor for any loss or damage
which Lessor may suffer thereby. If Lessor so uses or applies all or any portion
or 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. 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 or Interest other Increment for
its use, to Lessee (or at Lessor’s option, to the last assignee. If any of
Lessee’s interest hereunder) at the expiration of the term thereof, and after
Lessee has vacated the Premises. No trust relationship is created herein between
Lessor and Lessee with respect to said Security deposit.
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6. Use.
6.1 Use.
The
Premises shall be used and occupied only for Optical
Machinery Manufacturing and Head Corporate Offices
and for
no other purpose.
6.2 Compliance
with Law.
(a) Lessor
warrants to Lessee that the Premises, in its existing state, but without regard
to the use for which Lessee will use me Premises, does not violate any
applicable building code regulation or ordinance at the time that this Lease
is
executed. In the event that 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, to rectify any such
violation. In the event that Lessee does not give to Lessor written notice
of
the violation of this warranty within 1 year from the commencement of the term
of this Lease. It shall be conclusively deemed that such violation did not
exist
and the correction of the same shall be the obligation of the
Lessee.
(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,
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 lend to
create waste or a nuisance or , if there shall be more than one tenant in the
building containing the Premises, shall lend to disturb such other
benefit.
6.3 Condition
of Premises.
Except
as provided in paragraph 6.2(a) Lessee hereby accepts the Premises in their
condition existing as of the date of the execution hereof, subject to all
applicable zoning, municipal, county and state laws, ordinances and regulations
governing and regulating the use of the Premises, 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 suitability of the Premises for the conduct
of Lessee’s business.
Maintenance,
Aspens end Alteration.
7.1 Lessee’s
Obligations.
Lessee
shall keep in good order, condition and repair the Premises and every part
thereof, structural and nonstructural (whether or not such portion of the
Premises requiring repair, or the means of repairing the same are reasonably
or
readily accessible 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, ventilating, electrical,
lighting facilities and equipment within the Premises, fixtures, walls (interior
and exterior) foundations, ceilings, roofs (interior and exterior) floors,
windows, doors. plate glass and skylights located within the Premises, and
all
landscaping, driveways, parking lots, fences and signs located on the Premises
and sidewalks and parkways adjacent to the Premises.
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, broom
clean, ordinary wear end tear excepted. Lessee shall repair any damage to the
Premises occasioned by the removal of Lessee’s trade fixtures, furnishings and
equipment pursuant to Paragraph 7.5(d), which repair shall include the patching
and filling of holes and repair of structural damage.
7.3 Lessee’s
Rights.
If
Lessee fails to perform Lessee’s obligations under this Paragraph 7, Lessor
may at its option (but shall not be required to transfer upon the Premises,
after ten (10) days’ prior written notice to Lessee, and put the same in good
order, condition and repair, and the cost thereof together with interest thereon
at the rate of 10% per annum shall become due and payable as additional rental
to Lessor together with Lessees next Initial Installment.
7.4 Lessor’s
Obligation.
Except
for the obligations of Lessor under Paragraph 6.2(a) (relating to Lessor’s
warranty), Paragraph 9 (relating to destruction of the Premises) and under
Paragraph 14 (relating to condemnation of the Premises), it is intended by
the
parties hereto that Lessor have no obligation. In any manner whatsoever, to
repair and maintain the Premises nor the building located thereon nor the
equipment therein, whether structural or non-structural all which obligations
are intended to be that of the Lessee under Paragraph 7.1 hereof. Lessee
expressly waives the benefit of any statute now or hereinafter in effect which
would otherwise afford Lessee the right to make repairs at Lessor’s expense or
to terminate this Lease because of Lessor’s failure to keep the premises in good
order, condition and repair.
7.5 Alterations
and Additions.
(a) Lessee
shall not, without Lessor’s prior written consent make any alterations,
improvements, additions, or Utility Installations in, on or about the Premises,
except for nonstructural alterations not exceeding $1,000 in cost. As used
in
this Paragraph 7.5 the term “Utility Installation” shall mean bus ducting, power
panels, wiring, florescent fixtures, space healers, conduits, airconditioning
equipment and plumbing. Lessor may require that Lessee remove any or all of
said
alterations, Improvements, additions or Utility Installations at the expiration
of the term, and restore the Premises to their prior condition. Lessor may
require Lessee to provide Lessor, at Lessee’s sole cost and expense, a lien and
completion bond in an amount equal to one and one-half times the estimated
cost
of such Improvements, to insure Lessor against any liability for mechanic’s and
materialmen’s liens and to insure completion of the work. Should Lessee make any
alterations, Improvements, additions or Utility Installations without the prior
approval of Lessor, Lessor may require that Lessee remove any or all of the
same.
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(b) Any
alterations, Improvements, additions or Utility Installations in or about the
Premises that Lessee shall desire to make and which requires the consent of
the
Lessor shall be presented to Lessor in written form, with proposed detailed
plans. If Lessor shall give its consent the consent shall be deemed conditioned
upon Lessee acquiring a permit to do so from appropriate governmental agencies,
the furnishing of a copy thereof to Lessor prior to the commencement of the work
and the compliance by Lessee of all conditions of said permit in a prompt and
expeditious manner.
(c) 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 notice, of non-responsibility in or on
the
Premises as provided by law. If Lessee shall, in good faith, contest the
validity of any such lien, claim or demand, then Lessee shall, at its sole
expense defend itself and Lessor against the same and shall pay and satisfy
any
such adverse judgment that may be rendered thereon before the enforcement
thereof against the Lessor or the Premises, upon the condition that if Lessor
shall require, Lessee shall furnish to Lessor a surety bond satisfactory to
Lessor in an amount equal to such contested lien, claim or demand indemnifying
Lessor against liability for the same and holding the Premises free from the
effect of such lien or claim. In addition, Lessor may require Lessee to pay
Lessor’s attorneys fees and costs in participating in such action if Lessor
shall decide it is to its best interest to do so.
(d) 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 properly 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 Premise, 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 elongation to obtain the Property Insurance required
hereunder. The insuring party shall be designated in Paragraph 16.26 hereof.
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. If Lessor is the insuring party Lessee shall, within ten (10) days
following demand by Lessor, reimburse Lessor for the cost of the Insurance
so
obtained.
8.2 Liability
Insurance. Lessee shall, at Lessee’s expense obtain and keep in force during the
term of this Lease a policy of Combined Single Limit, Bodily Injury and Property
Damage Insurance Insuring Lessor and Lessee against any liability arising out
of
the ownership, use, occupancy or maintenance of, the Premises and all areas
appurtenant thereto. Such Insurance shall be a combined single limit policy
in
an amount not less than $500.000. The policy shall contain cross liability
endorsements and shall insure performance by Lessee of the indemnity provisions
of this Paragraph 8. The limits of said insurance shall not, however, limit
the
liability of Lessee hereunder. In the event that the Premises constitute a
part
of a larger property said insurance shall have a Lessor’s Protective Liability
endorsement attached thereto. If Lessee shall fail to procure and maintain
said
insurance Lessor may, but shall not be required to procure and maintain the
same, but at the expense of Lessee. Not more frequently than each 5 years,
if,
in the reasonable opinion of Lessor, the amount of liability insurance required
hereunder is not adequate, Lessee shall increase said insurance coverage as
required by Lessor. Provided, however that in no event shall the amount of
the
liability insurance increase be more than fifty percent greater than the amount
thereof during the preceding live years of the term of this lease. However,
the
failure to Lessor to require any additional insurance coverage shall not be
deemed to relieve Lessee from any obligations under this Lease.
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8.3 Property
Insurance.
(a) The
insuring party shall obtain and keep in force during the term of this Lease
a
policy or policies of insurance covering loss or damage to the Premises, in
the
amount of the full replacement value thereof, as the same may exist from time
to
time, which replacement value is now but in no event less than the total amount
of promissory notes secured by liens on the Premises against all perils included
within the classification of fire, extended coverage, vandalism, malicious
mischief, special extended perils (all risk) and sprinkler leakage. 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 income insurance covering a period of six months, with loss
payable to Lessor, which insurance shall also cover all real estate taxes and
insurance costs for said period. If the insuring party shall fail to procure
and
maintain said insurance the other party may, but shall not be required to,
procure and maintain the same, but at the expense of Lessee.
(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 at 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.
(d) Not
more
frequently than each three years, if, in the opinion of Lessor, the amount
of
property insurance required hereunder is not adequate, the insuring party shall
increase said insurance coverage as required by Lessor. However, such increase
may be more frequent than each three years if required by the insurance carrier
in order to maintain insurance for the full replacement value of the
Premises.
8.4 Insurance
Policies. Insurance required hereunder shall be in companies holdings “General
Policyholders Rating” of B plus or better 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 satisfactory to Lessor.
No such policy shall be cancellable or subject to reduction of coverage or
other
modification except after ten (10) days prior written notice to Lessor. If
Lessee is the insuring party Lessee shall, within ten (10) days prior to the
expiration of such policies, furnish Lessor with renewals or “binders” thereof,
or Lessor may order such insurance and charge the cost thereof to Lessee, which
amount shall be payable by Lessee upon demand. Lessee shall not do or permit
to
be done anything which shall invalidate the insurance policies referred to
in
Paragraph 8.3. If Lessee does or permits to be done anything which shall
increase the cost of the insurance policies referred to in Paragraph 8.3, then
Lessee shall forthwith upon Lessor’s demand reimburse Lessor for any additional
premiums attributable to any act or omission or operation of Lessee causing
such
increase in the cost of insurance. If Lessor is the insuring party, and if
the
insurance policies maintained hereunder cover other improvements in addition
to
the Premises, Lessor shall deliver to Lessee a written statement setting forth
the amount of any such insurance cost increase and showing in reasonable detail
the manner in which it has been computed.
8.5 Waiver
al
Subrogation. Lessee and Lessor each hereby waive any and all rights of recovery
against the other. or against the editors. employees, agents and representatives
of the other. for loss of or damage to such waiving party or Its properly or
the
properly of others under Its control to the extent ▇▇▇ such MSS or damage Is
Insured against under any Insurance policy In force at the time of such loss
or
damages. The Insuring party 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
indemnity and hold harmless Lessor from and against any and all claims arising
from any breach or default in the performance of any obligation on Lessee’s part
to be performed under the terms of this Lease, or arising from any negligence
of
the Lessee, or any of Lessee’s agents, contractors, or employees, and from and
against all costs, attorney’s fees, expenses and liabilities incurred in the
defense of any such claim or any action or proceeding brought thereon; and
in
case any action or proceeding be brought against Lessor by reason of any such
claim, Lessee upon notice from Lessor shall defend the same at Lessee’s expense
by counsel satisfactory to Lessor. Lessee, as a material part of the
consideration to Lessor, hereby assumes all risk of damage to property or injury
to persons, in, upon or about the Premises arising from any cause and Lessee
hereby waives all claims in respect thereof against Lessor.
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.
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9. Damage
or
Destruction.
9.1 Partial
Damage—Insured. Subject to the provisions of Paragraph, 9.3 and 9.4, if the
Premises are damaged and such damage was caused by a casualty covered under
an
insurance policy required to be maintained pursuant to Paragraph 8.3. Lessor
shall at Lessor’s expense repair such damage but not Lessee’s fixtures,
equipment or tenant improvements unless the same have become a part of the
Premises pursuant to Paragraph .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
affect. Lessee shall in no event have any right to reimbursement for any such
amount so contributed.
9.2 ___[illegible]_________________________.
Subject to the provisions of Paragraph 8.3 and 9.4, if at any time during
the term hereof the Premises are damaged, except by negligent or willful act
of
Lessee (in which event Lessee shall make the repairs, at its expense) and such
damage was caused by a casualty not covered under an insurance policy required
to be maintained pursuant to Paragraph 8.3, Lessor may at Lessor’s option
either (i) repair such damage as soon as reasonably possible at Lessor’s
expense, in which event this Lease shall continue in full force and effect
or
(ii) give written notice to Lessee within thirty (30) days after the date
of the occurrence of such damage of Lessor’s intention to cancel an terminate
this Lease as of the as of the date of the occurrence of such damage. In which
event this Lease shall continue in full force and effect, and Lessee shall
proceed to make such repairs a 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.
9.3 Total
Destruction. If at any time during the term hereof the Premises are totally
destroyed from any cause whether or not covered by the insurance required to
be
maintained pursuant to Paragraph 8.3 (including any total destruction
required by any authorized public authority) this Lease shall automatically
terminate as of the date of such total destruction.
9.4 Damage
Near End of Term. If the Premises are partially destroyed or damaged during
the
last six months of the term of this Lease, 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.
9.5 Abatement
of Rent; Lessee’s Remedies.
(a) If
the
Premises are partially destroyed or damaged and Lessor or Lessee repairs or
restores them 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, provided, however, that the aggregate amount of
abatement hereunder shall not exceed the total rent payable under Paragraph
4
for a period of six months. 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 obligation shall accrue, Lessee may at Lessee’s option cancel
and terminate this Lease by giving Lessor written notice of Lessee’s election to
do so at any time prior to the commencement of such repair or restoration.
In
such event this Lease shall terminate as of the date of such
notice.
9.6 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.
9.7 Waiver.
Lessee waives the provisions of California Civil Code Sections 1932(2) and
1933
(4) which relate to termination of leases when the thing leased is destroyed
and
agrees that such event shall be governed by the terms of this
Lease.
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10. Real
Property Taxes.
10.1 Payment
of Lease. Lessee shall pay all real property taxes applicable to the Premises
during the term of this Lease. All such payments shall be made at least ten
(10)
days prior to the delinquency date of such payment. Lessee shall promptly
furnish Lessor with satisfactory evidence that such taxes have been paid. If
any
such taxes paid by Lessee shall cover any period of time prior to or alter 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 rate of
10% per annum.
10.2 Definition
of “Real Property” Tax. As used herein, the term “real property tax” shall
include any form of assessment, license fee, commercial rental tax, levy,
penalty, or tax (other than inheritance or estate taxes), imposed by any
authority having the direct or indirect power to tax, including any city,
county, state or federal government, or any school, agricultural, lighting,
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, or as against Lessor’s business of leasing the Premises or any tax
imposed in substitution, partially or totally, of any tax previously included
within the definition of real property tax, or any additional tax the nature
of
which was previously included within the definition of real property
tax.
10.3 Joint
Assessment. If the Premises are not separately assessed, Lessee’s liability
shall be an equitable proportion of the real properly 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 selling 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. Any attempted
assignment, transfer, mortgage, encumbrance or subletting without such consent
shall be void, and shall constitute a breach of this Lease.
12.2 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.
6
12.3 No
Release of Lessee. Regardless of Lessor’s consent, no subletting or assignment
shall release Lessee of Lessee’s obligation or alter the primary liability of
Lessee to pay the rent and to perform all other obligations to be performed
by
Lessee hereunder. The acceptance of rent by Lessor from any other person shall
not be deemed to be a waiver by Lessor of any provision hereof. Consent to
one
assignment or subletting shall not be deemed consent to any subsequent
assignment or subletting. In the event of default by any assignee of Lessee
or
any successor of Lessee, in the performance of any of the terms hereof, Lessor
may proceed directly against Lessee without the necessity of exhausting remedies
against said assignee. Lessor may consent to subsequent assignments or
subletting of this Lease or amendments or modifications to this Lease with
assignees of Lessee, without notifying Lessee, or any successor of Lessee,
and
without obtaining its or their consent thereto and such action shall not relieve
Lessee of liability under this Lease.
12.4 Attorney’s
Fees. In the event Lessee shall assign or sublet the Premises or request the
consent of Lessor to any assignment or subletting or if Lessee shall request
the
consent of Lessor for any act that Lessee proposes to do then Lessee shall
pay
Lessor’s reasonable attorneys fees incurred in connection therewith, such
attorneys fees not to exceed $250.00 for each such request.
13. Defaults;
Remedies.
13.1 Defaults.
The occurrence of any one or more of the following events shall constitute
a
material default and breach of this Lease by Lessee:
(a) The
vacating or abandonment of the Premises by Lessee.
(b) The
failure by Lessee to make any 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.
(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 hereof 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 assignment, or general arrangement for the
benefit of creditors; (ii) the filing by or against Lessee of a petition to
have
Lessee adjudged a bankrupt or a petition for reorganization or arrangement
under
any law relating to bankruptcy (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.
(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 obligations hereunder, and any of them, was
materially false.
13.2 Remedies.
In the event of any such material default or breach by Lessee, Lessor may at
any
time thereafter, with or without notice or demand and without limiting Lessor
in
the exercise of any right or remedy which Lessor may have by reason of such
default or breach:
(a) Terminate
Lessee’s right to possession of the Premises by any lawful means, in which case
this Lease shall terminate and Lessee shall immediately surrender possession
of
the Premises to Lessor. In such event Lessor shall be entitled to recover from
Lessee all damages incurred by Lessor by reason of Lessee’s default including,
but not limited to, the cost of recovering possession of the Premises; expenses
of reletting, including necessary renovation and alternation 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. Unpaid installments of rent or other sums shall
bear interest from the date due at the rate of 10% per annum.
(b) Maintain
Lessees 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 end 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 of judicial
decisions of the State of California.
7
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 obligations; provided, however, that
if the nature of Lessor’s obligation is such that more then 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,
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 cost, 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.
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 ever occurs. If more than 10% of the floor area of the improvements
on
the Premises, or more than 25% of the land area of the Premises which is not
occupied by any improvements, is taken by condemnation, Lessee may, at Lessee’s
option, to be exercised in writing only within ten (10) days after Lessor shall
have given Lessee written notice of such taking (or in the absence of such
notice, within ten (10) days after the condemning authority shall have taken
possession) terminate this Lease as of the date the condemning authority takes
such possession. If Lessee does not terminate this Lease in accordance with
the
foregoing, this Lease shall remain in full force and effect as to the portion
of
the Premises remaining, except that the rent shall be reduced in the proportion
that the floor area taken bears to the total floor area of the ▇▇▇▇▇▇▇ situated
on the Premises. 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.
16. General
Provisions.
16.1 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 (iii) 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) Lessee’s
failure to deliver such statement within such time shall be conclusive upon
Lessee (i) that this Lease is in full force and effect, without modification
excepts 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.
8
(c) If
Lessor
desires to finance or refinance the Premises, or any part thereof, Lessee hereby
agrees to deliver to any lender designated by Lessor such financial statements
of Lessee as may be reasonably required by such lender. Such statements shall
include the past three years’ financial statements of Lessee. All such financial
statements shall be received in confidence and shall be used only for the
purposes herein set forth.
16.2 Lessor’s
Liability. The term “Lessor” as used herein shall mean only the owner or owners
at the time in question of the fee title or a lessee’s interest in a ground
lease of the Premises, and except as expressly provided in Paragraph 15, in
the
event of any transfer of such title or interest. Lessor herein named (and in
case of any subsequent transfers the then grantor) shall be relieved from and
after the date of such transfer of all liability as respects Lessor’s
obligations thereafter lo be performed, provided that any funds in the hands
of
Lessor or the then grantor at the time of such transfer, in which Lessee has
an
interest, shall be delivered to the grantee. The obligations contained in this
Lease to be performed by Lessor shall, subject as aforesaid, be binding on
Lessor’s successors and assigns, only during their respective periods of
ownership.
16.3 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.
16,4 Interest
on Past-due Obligations. Except as expressly herein provided, any amount due
Lessor not paid when due shall bear interest at 10% per annum 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.
16.5 Time
of
Essence. Time is of the essence.
16.6 Captions.
Article and paragraph captions are not a part hereof.
16.7 Incorporation
of Prior Agreement; 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 staled in this Lease, Lessee hereby
acknowledges that neither the real estate broker listed in Paragraph 15 hereof
nor any cooperating broker on this transaction nor the Lessor or any employees
or agents of any of said persons has made any oral or written warranties or
representations to Lessee relative to the condition or use by Lessee of said
Premises and Lessee acknowledges that Lessee assumes all responsibility
regarding the Occupational Safety Health Act or the legal use of adaptability
of
the Premises and the compliance thereof to all applicable laws and regulations
enforced during the term of this Lease except as otherwise specifically stated
in this Lease.
16.8 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.
16.9 Waiver.
No waiver by Lessor of 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, 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 at such preceding breach at the time of acceptance of such
rent.
16.10 Recording.
Lessee shall not record this Lease without Lessor’s prior written consent, and
such recordation shall, at the option of Lessor, constitute a non-curable
default of Lessee hereunder. Either party shall, upon request of the other,
execute, acknowledge and deliver to the other a “short form” memorandum of this
Lease for recording purposes.
16.11 Holding
Over. If Lessee remains in possession of the Premises or any part thereof after
the expiration of the term hereof without the express written consent of Lessor,
such occupancy shall be a tenancy from month to month at a rental the amount
of
the last monthly rental plus all other charges payable hereunder, and upon
all
the terms hereof applicable to a month-to-month tenancy.
16.12 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.
16.13 Covenants
and Conditions. Each provision of this Lease performable by Lessee shall be
deemed both a covenant and a condition.
9
16.14 Binding
Effect Choice of Law. Subject to any provisions hereof restricting assignment
or
subletting by Lessee and subject to the provisions of Paragraph 16.2. this
Lease
shall bind the parties, their personal representatives, successors and assigns.
This Lease shall be governed by the laws of the State of
California.
16.15 Subordination.
(a) This
Lease, at Lessor’s option, shall be subordinate to any ground lease, mortgage,
deed of trust, or any other hypothecation for security 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 it 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
_[illegible]_ this Lease prior to the lien of its mortgage, deed of trust or
ground lease, and shall given written notice thereof to Lessee, this Lease
shall
be _[illegible]__ prior to such mortgage, deed of trust, or ground lease,
whether this Lease is dated prior or subsequent to the date of such mortgage,
deed of trust or group lease or the date of recording thereof.
________[illegible]____________________________
and _[illegible]_ to do so within ten (10) days after written demand, does
hereby make, __[illegible]__ and irrevocably appoint Lessor as Lessee’s
attorney-in-fact and in Lessee’s name, place and stead, to do so.
16.16 Attorney’s
Fees. If either party or the broker named herein brings an action to enforce
the
terms hereof or declare rights hereunder, the prevailing party in any such
action, on trial or appeal, shall be entitled to his reasonable attorney’s fees
to be paid by the losing party as fixed by the court. The provisions of this
paragraph shall inure to the benefit of the broker named herein who seeks to
enforce a right hereunder.
16.17 Lessor’s
Access. Lessor and Lessor’s agents shall have the right to enter the Premises at
reasonable times for the purpose of inspecting the same, showing the same to
or
prospective purchasers, or lenders, or lessees, and making such alterations,
repairs, improvements or additions to the Premises or to the building of which
they are a part as Lessor may deem necessary or desirable. Lessor may at any
time place on or about the Premises any ordinary “For Sale” signs and Lessor may
at any time during the last 120 days of the term hereof place on or about the
Premises any ordinary “For Sale” signs, all without rebate of rent or liability
to Lessee.
16.16 Signs
and
Auctions. Lessee shall not place any sign upon the Premises or conduct any
auction thereon without Lessor’s prior written consent except that Lessee shall
have the right, without the prior permission of Lessor to place ordinary and
usual for rent or sublet signs thereon.
l6.19 Merger.
The voluntary or other surrender of this Lease by Lessee, or a mutual
cancellation thereof, of a termination by Lessor, shall not work a merger,
and
shall, at the option of Lessor, terminate all or any existing subtenancies
or
may, at the option of Lessor, operate as an assignment to Lessor or any or
all
of such subtenancies.
16.20 Corporate
Authority. If Lessee is a corporation, each individual executing this Lease
on
behalf of said corporation represents and warrants that he is duty authorized
to
execute and deliver this Lease on behalf of said corporation, in accordance
with
a duly adopted resolution the Board of Directors of said corporation or in
accordance with the Bylaws of said corporation, and that this Lease is binding
upon said corporation in accordance with its terms. If Lessee is a corporation
Lessee shall, within thirty (30) days after execution of this Lease, deliver
to
Lessor a certified copy of a resolution of the Board of Directors of said
corporation authorizing or ratifying the execution of this Lease.
16.21 Consents.
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 or
delayed.
16.22 Guarantor.
In the event that there is a guarantor of this Lease, said guarantor shall
have
the same obligations as Lessee under Paragraphs 16.1 and 16.20 of this
Lease.
16.23 Quiet
Possession. Upon Lessee paying the fixed rent reserved hereunder 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.
16.24 Options.
In the event that the Lessee, under the terms of this Lease, has any option
to
extend the term of this Lease, or any option to purchase the Premises or any
right of first refusal to purchase the Premises or other property of Lessor,
then each of such options and rights are personal to Lessee and may not be
exercised or be assigned, voluntarily or involuntarily, by or to any one other
that Lessee except that it may be exercised by or assigned to any of the
entities described in paragraph 12.2 hereof for whom Lessee does not need the
consent of Lessor to assign this Lease. In the event that Lessee hereunder
has
any multiple options to extend this Lease a later option to extend the Lease
cannot be exercised unless the prior option has been so exercised.
10
16.25 Multiple
Tenant Building Rules and Regulations. 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 regulation, 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 at good
order
therein as well as for the convenience of other occupants and tenants of the
building. Further, Lessee will promptly pay its prorata share, as reasonably
determined by Lessor, of any maintenance or repair of such portion of the
Premises or such portion of the property of which the Premises are a part which
are common areas or used by Lassie and other occupants thereof. The violations
of any such rules and regulations, or the failure to pay such prorata share
of
costs, shall be deemed a material breach of this Lease by Lessee.
16.26 Insuring
Party. The insuring party under this lease shall be the Lessee.
16.27 Additional
Provisions. If there are no additional provisions draw a line from this point
to
the next printed word after the space left here. If there are additional
provisions place the same here.
The
Rider
attached hereto is made a part hereof.
The
parties hereto have executed this Lease at the place and on the dates specified
immediately adjacent to their respective signatures.
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 real able
broker or its agents or employees as to the legal sufficiency, legal effect,
or
tax consequences of this Lease or the transaction relating thereto.
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Executed
at San
Luis Obispo, California
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/s/
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▇. ▇▇▇▇▇▇▇▇▇▇
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on
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Address
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“LESSOR”
(Corporate seal)
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Executed
at San
Luis Obispo, California
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R.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, INC.
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▇. ▇▇▇▇▇▇▇▇▇▇, President
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By
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▇. ▇▇▇▇▇▇▇▇▇▇, Vice-President
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“LESSEE”
(Corporate seal)
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11
RIDER
PARAGRAPHS
1 AND 2 BELOW ARE INCORPORATED IN AND MADE A PART OF THE FOREGOING
LEASE.
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1.
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Every
three years of this Lease, for the ensuing three-year period, commencing
on the first day of the fourth year of the ‘term hereof, an adjustment
shall be made whenever and in the same percentage (if any) that the
United
States Department of Labor, Bureau of Labor Statistics, Consumer
Price
Index, has increased above the said Index for March, 1990. Said comparison
shall be made using the Index for the month of March preceding each
third
year beginning with the fourth year of the term hereof. If for any
reason
there is a change of any kind in the calculator or formulation of
the said
Index, or if the said Index shall no longer be published, then another
Index generally recognized as authoritative shall be substituted
by
agreement, and if the parties cannot agree, such substituted Index
shall
be selected by the Presiding Judge of the Superior Court of the State
of
California, in and for the County of San ▇▇▇▇ Obispo, or if such
Judge is
unable to determine that a satisfactory substitute index exists,
then such
Judge shall determine the then increase of the cost of living over
March,
1990; it being the intention of the parties that the base rental
be
increased in accordance with the cost of
living.
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2.
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Lessee
shall have two separate options to extend the term of this Lease
at a
rental to be determined as hereinafter provided, for two consecutive
additional periods, as follows: (a) For the five-year period commencing
May 1, 2005; and (b) for the five-year period commencing May 1, 2010,
as
extended by the exercise of the option designated (a) above; provided
Lessee has exercised option (a)
above.
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Lessee
may, provided it is not in default under any of the terms of this Lease, at
the
time of the commencement of the extension, exercise the option designated (a)
above by notifying Lessor in writing at any time six months prior to the
expiration of the initial term that it does so exercise said option, and may
exercise the option designated (b) above provided it is not in default under
any
of the terms of this Lease and has theretofore exercised the option designated
(a) above, by notifying Lessor in writing at any time six months prior to the
expiration of the term as extended by the exercise of option designated (a)
above that it does so exercise said option.
The
rent
for each of said five-year periods referred to above shall be fixed and arrived
at as follows, and when so fixed shall be payable in equal monthly installments
in advance on the first day of each and every calendar month of the respective
five-year periods. The parties shall endeavor within the thirty days next
following service of notice of exercise of option, to agree upon the rent for
the particular five-year period; and should the parties fail to agree upon
the
rent for such period within thirty days, then the rent for such period shall
be
determined by arbitration based upon the fair market rental value for said
premises then prevailing as follows: Lessee shall, within ten days next
following said thirty day period appoint a qualified experienced representative
and notify Lessor in writing of said appointment and the name and address of
said representative so appointed by it, and Lessor shall also similarly, within
the ten days next following the first mentioned ten-day period, appoint a
qualified experienced representative, and notify Lessee in writing of said
appointment and the name and address of said representative so appointed by
Lessor. If the said representatives do not agree upon the then fair market
rental value of the premises including land, building and equipment located
thereon within thirty days next following the last mentioned ten-day period,
then said representatives shall appoint a third qualified experienced
representative within ten days next following the last mentioned thirty-day
period; provided further that in the event they are unable to mutually agree
upon a third representative within the aforementioned ten-day period, then
the
Lessor and Lessee shall immediately submit to the Court in the County in which
the premises are located for a determination by said Court as to the appointment
of the third representative. Promptly following the appointment of said third
representative, this representative shall, within thirty days after such
appointment, report in writing its opinion as to the then fair market rental
value of the premises, including land, building and equipment, and if its
opinion be the same as either of the representatives appointed by Lessor or
Lessee, then the fair market rental value as determined by two of said three
representatives shall be the fair market rental value of the real property
including the land, building and equipment. If, however, said third
representative’s determination does not coincide with that of either the
Lessor’s or Lessee’s representative, then the average of the determinations of
fair market rental value by the two closest representatives shall be deemed
to
be the rental for such option period. However, the rent for the first option
period may be not less than for the original term herein, and the rent for
the
second option period may not be less than the rent for the first option
period.
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It
is
further agreed that except for determination of the monthly rental by the method
set forth above, all other terms and provisions of this Lease which are
applicable during the initial term shall be deemed applicable to the option
periods. Lessor shall pay the cost of its representative, Lessee shall pay
the
cost of its representative, and Lessor and Lessee shall mutually share all
costs
incurred in selecting the third representative.
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“LESSEE”
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“LESSOR”
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R.
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/s/
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By
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President,
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/s/
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By
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▇. ▇▇▇▇▇▇▇▇▇▇,
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Vice
President
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13