EXHIBIT 10.5
STANDARD INDUSTRIAL LEASE -- MULTI-TENANT
AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION
1. PARTIES. This Lease, dated, for reference purposes only, June 20, 1997,
is made by and between Guillon Business Park Properties, L.P., a California
limited partnership (herein call "Lessor") and Alternative Materials Technology,
Inc., a Nevada corporation (herein called "Lessee").
2. PREMISES, PARKING AND COMMON AREAS.
2.1 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, real property situated in the County of Butte, State of California
commonly known as 000 Xxxxxxxx Xxxxx, Xxxxx and described as Approximately
27,000 square feet of a 90,000 square foot concrete tilt up building, as shown
in the attached Exhibit "A", with improvements in Exhibit "B", herein referred
to as the "Premises", as may be outlined on an Exhibit attached hereto,
including rights to the Common Areas as hereinafter specified but not including
any rights to the roof of the Premises or to any Building in the Industrial
Center. The Premises are a portion of a building, herein referred to as the
"Building." The Premises, the Building, the Common Areas, Lot 7, the land upon
which the same are located, along with all other buildings and improvements
thereon, are herein collectively referred to as the "Industrial Center."
2.2 VEHICLE PARKING. Lessee shall be entitled to 26 vehicle
parking spaces, unreserved and unassigned, on those portions of the Common Areas
designated by Lessor for parking. Lessee shall not use more parking spaces than
said number. Said parking spaces shall be used only for parking by vehicles no
larger than full size passenger automobiles or pick-up trucks, herein called
"Permitted Size Vehicles." Vehicles other than Permitted Size Vehicles are
herein referred to as "Oversized Vehicles."
2.2.1 Lessee shall not permit or allow any vehicles that
belong to or are controlled by Lessee or Lessee's employees, suppliers,
shippers, customers, or invitees to be loaded, unloaded, or parked in areas
other than those designated by Lessor for such activities.
2.2.2 If Lessee permits or allows any of the prohibited
activities described in paragraph 2.2 of this Lease, then Lessor shall have the
right, without notice, in addition to such other rights and remedies that it may
have, to remove or tow away the vehicle involved and charge the cost to Lessee,
which cost shall he immediately payable upon demand by Lessor.
2.3 COMMON AREAS--DEFINITION. The term "Common Areas" is defined
as all areas and facilities outside the Premises and within the exterior
boundary line of the Industrial Center that are provided and designated by the
Lot 7 Lessor from time to time for the general non-exclusive use of Lessor,
Lessee and of other lessees of the Industrial Center and their respective
employees, suppliers, shippers, customers and invitees, including parking areas,
loading and unloading areas, trash areas, roadways, sidewalks, walkways,
parkways, driveways and landscaped areas.
2.4 COMMON AREAS--LESSEE'S RIGHTS. Lessor hereby grants to Lessee,
for the benefit of Lessee and its employees, suppliers, shippers, customers and
invitees, during the term of this Lease, the non-exclusive right to use, in
common with others entitled to such use, the Common Areas as they exist from
time to time, subject to any rights, powers, and privileges reserved by Lessor
under the terms
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hereof or under the terms of any rules and regulations or restrictions governing
the use of the Industrial Center. Under no circumstances shall the right herein
granted to use the Common Areas be deemed to include the right to store any
property, temporarily or permanently, in the Common Areas. Any such storage
shall be permitted only by the prior written consent of Lessor or Lessor's
designated agent, which consent may be revoked at any time. In the event that
any unauthorized storage shall occur then Lessor shall have the right, without
notice, in addition to such other rights and remedies that it may have, to
remove the property and charge the cost to Lessee, which cost shall be
immediately payable upon demand by Lessor.
2.5 COMMON AREAS--RULES AND REGULATIONS. Lessor or such other
person(s) as Lessor may appoint shall have the exclusive control and management
of the Common Areas and shall have the right, from time to time, to establish,
modify, amend and enforce reasonable rules and regulations with respect thereto.
Lessee agrees to abide by and conform to all such rules and regulations, and to
cause its employees, suppliers, shippers, customers, and invitees to so abide
and conform. Lessor shall not be responsible to Lessee for the non-compliance
with said rules and regulations by other lessees of the Industrial Center.
2.6 COMMON AREAS--CHANGES. Lessor shall have the right, in
Lessor's sole discretion, from time to time:
(a) To make changes to the Common Areas, including,
without limitation, changes in the location, size, shape and number of
driveways, entrances, parking spaces, parking areas, loading and unloading
areas, ingress, egress, direction of traffic, landscaped areas and walkways; (b)
To close temporarily any of the Common Areas for maintenance purposes so long as
reasonable access to the Premises remains available; (c) To designate other land
outside the boundaries of the Industrial Center to be a part of the Common
Areas; (d) To add additional buildings and improvements to the Common Areas; (e)
To use the Common Areas while engaged in making additional improvements, repairs
or alterations to the Industrial Center, or any portion thereof; (f) To do and
perform such other acts and make such other changes in, to or with respect to
the Common Areas and Industrial Center as Lessor may, in the exercise of sound
business judgment, deem to be appropriate.
2.6.1 Lessor shall at all times provide the parking
facilities required by applicable law and in no event shall the number of
parking spaces that Lessee is entitled to under paragraph 2.2 be reduced.
3. TERM.
3.1 TERM. The term of this Lease shall be for Ten (10) Years
commencing on See Addendum and ending on See Addendum unless sooner terminated
pursuant to any provision hereof.
3.2 DELAY IN POSSESSION. Notwithstanding said commencement date,
if for any reason Lessor cannot deliver possession of the Premises to Lessee on
said date, Lessor shall not be subject to any liability therefor, nor shall such
failure affect the validity of this Lease or the obligations of Lessee hereunder
or extend the term hereof, but in such case, Lessee shall not be obligated to
pay rent or perform any other obligation of Lessee under the terms of this
Lease, except as may be otherwise provided in this Lease, 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
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within said ten (10) day period, Lessee's right to cancel this Lease hereunder
shall terminate and be of no further force or effect.
3.3 EARLY POSSESSION. If Lessee occupies the Premises prior to
said commencement date, such occupancy shall be subject to all provisions of
this Lease, such occupancy shall not advance the termination date, and Lessee
shall pay rent for such period at the initial monthly rates set forth below.
3.3(a) See Addendum
4. RENT.
4.1 BASE RENT. Lessee shall pay to Lessor, as Base Rent for the
Premises, without any offset or deduction, except as may be otherwise expressly
provided in this Lease, on the first day of each month of the term hereof,
monthly payments in advance of $ See Addendum. Lessee shall pay Lessor upon
execution hereof $8,224.00 as Base Rent for first month's rent. Rent for any
period during the term hereof which is for less than one month shall be a pro
rata portion of the Base Rent. 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.
4.2 OPERATING EXPENSES. Lessee shall pay to Lessor during the term
hereof, in addition to the Base Rent, Lessee's Share, as hereinafter defined, of
all Operating Expenses, as hereinafter defined, during each calendar year of the
term of this Lease, in accordance with the following provisions:
(a) "Lessee's Share" is defined, for purposes of this
Lease, as thirty (30%) percent. See Addendum
(b) "Operating Expenses" is defined, for purposes of this
Lease, as all costs incurred by Lessor, if any, for:
(i) The operation, repair and maintenance, in
neat, clean, good order and condition, of the following:
(aa) The Common Areas, including parking
areas, loading and unloading areas, trash areas, roadways, sidewalks, walkways,
parkways, driveways, landscaped areas, striping, bumpers, irrigation systems,
Common Area lighting facilities and fences and gates;
(bb) Trash disposal services; exterior
bldg painting and roof
repair/maintenance fees.
(cc) Tenant directories;
(dd) Fire detection systems including
sprinkler system maintenance,
monitoring and repair;
(ee) Security services;
(ff) Any other service to be provided by
Lessor that is elsewhere in this Lease stated to be an "Operating Expense;"
(ii) Any deductible portion of an insured loss
concerning any of the items or matters described in this paragraph 4 2;
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(iii) The cost of the premiums for the liability
and property insurance policies to be maintained by Lessor under paragraph 8
hereof;
(iv) The amount of the real property tax to be
paid by Lessor under paragraph 10.1 hereof;
(v) The cost of water, gas and electricity to
service the Common Areas.
(c) The inclusion of the improvements, facilities and
services set forth in paragraph 4.2(b)(i) of the definition of Operating
Expenses shall not be deemed to impose an obligation upon Lessor to either have
said improvements or facilities or to provide those services unless the
industrial Center already has the same. Lessor already provides the services, or
Lessor has agreed elsewhere in this Lease to provide the same or some of them.
(d) Lessee's Share of Operating Expenses shall be payable
by Lessee within ten (10) days after a reasonably detailed statement of actual
expenses is presented to Lessee by Lessor. At Lessor's option, however, an
amount may be estimated by Lessor from time to time of Lessee's Share of annual
Operating Expenses and the same shall be payable monthly or quarterly, as Lessor
shall designate, during each twelve-month period of the Lease term, on the same
day as the Base Rent is due hereunder, in the event that Lessee pays Lessor's
estimate of Lessee's Share of Operating Expenses as aforesaid, Lessor shall
deliver to Lessee within sixty (60) days after the expiration of each calendar
year a reasonably detailed statement showing Lessee's Share of the actual
Operating Expenses incurred during the preceding year. If Lessee's payments
under this paragraph 4.2(d) during said preceding year exceed Lessee's Share as
indicated on said statement, Lessee shall be entitled to credit the amount of
such overpayment against Lessee's Share of Operating Expenses next falling due.
If Lessee's payments under this paragraph during said preceding year were less
than Lessee's Share as indicated on said statement, Lessee shall pay to Lessor
the amount of the deficiency within ten (10) days after delivery by Lessor to
Lessee of said statement.
(e) Subject to attached addendum.
5. SECURITY DEPOSIT. Lessee shall deposit with Lessor upon execution
hereof $See Addendum as security for Lessee's faithful performance of Lessee's
obligations hereunder. If Lessee fails to pay rent or other charges due
hereunder, or otherwise defaults with respect to any provision of this Lease,
Lessor may use, apply or retain all or any portion of said deposit for the
payment of any rent or other charge in default or for the payment of any other
sum to which Lessor may become obligated by reason of Lessee's default, or to
compensate Lessor for any loss or damage which Lessor may suffer thereby. If
Lessor so uses or applies all 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 then required of
Lessee. If the monthly rent shall, from time to time, increase during the term
of this Lease, Lessee shall, at the time of such increase; deposit with Lessor
additional money as a security deposit so that the total amount of the security
deposit held by Lessor shall at all times bear the same proportion to the then
current Base Rent as the initial security deposit bears to the initial Base Rent
set forth in paragraph 4. Lessor shall not be required to keep said security
deposit separate from its general accounts. If Lessee performs all of Lessee's
obligations hereunder, said deposit, or so much thereof as has not theretofore
been applied by Lessor, shall be returned, without payment of interest or other
increment for its use, to Lessee (or, at Lessor's option, to the last assignee,
if any, of Lessee's interest hereunder) at the expiration of the term hereof,
and after Lessee has vacated the Premises. No trust relationship is created
herein between Lessor and Lessee with respect to said Security Deposit.
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6. USE.
6.1 USE. The Premises shall be used and occupied only for
Manufacture and storage of coatings, adhesives 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 the
state existing on the date that the Lease term commences, but without regard to
the use for which Lessee will occupy the Premises, does not violate any
covenants or restrictions of record, or any applicable building code, regulation
or ordinance in effect on such Lease term commencement date. In the event it is
determined that this warranty has been violated, then it shall be the obligation
of the Lessor, after written notice from Lessee, to promptly, at Lessor's sole
cost and expense, rectify any such violation. In the event Lessee does not give
to Lessor written notice of the violation of this warranty within six months
from the date that the Lease term commences, the correction of same shall be the
obligation of the Lessee at Lessee's sole cost. The warranty contained in this
paragraph 6.2(a) shall be of no force or effect if, prior to the date of this
Lease, Lessee was an 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, promptly comply with all applicable statutes, ordinances,
rules, regulations, orders, covenants and restrictions of record, and
requirements of any fire insurance underwriters or rating bureaus, now in effect
or which may hereafter come into effect, whether or not they reflect a change in
policy from that now existing, during the term or any part of the term hereof,
relating in any manner to the Premises and the occupation and use by Lessee of
the Premises and of the Common Areas. Lessee shall not use nor permit the use of
the Premises or the Common Areas in any manner that will tend to create waste or
a nuisance or shall tend to disturb other occupants of the Industrial Center.
6.3 CONDITION OF PREMISES.
(a) Lessor shall deliver the Premises to Lessee clean and
free of debris on the Lease commencement date (unless Lessee is already in
possession) and Lessor warrants to Lessee that the plumbing, lighting, air
conditioning, heating, and loading doors in the Premises shall be in good
operating condition on the Lease commencement date. In the event that it is
determined that this warranty has been violated, then it shall be the obligation
of Lessor, after receipt of written notice from Lessee setting forth with
specificity the nature of the violation, to promptly, at Lessor's sole cost,
rectify such violation. Lessee's failure to give such written notice to Lessor
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 an owner or occupant of
the Premises.
(b) Except as otherwise provided in this Lease, Lessee
hereby accepts the Premises in their condition existing as of the Lease
commencement date or the date that Lessee takes possession of the Premises,
whichever is earlier, subject to all applicable zoning, municipal, county and
state laws, ordinances and regulations governing and regulating the use of the
Premises, and any covenants or restrictions of record, and accepts this Lease
subject thereto and to all matters disclosed thereby and by any exhibits
attached hereto. Lessee acknowledges that neither Lessor nor Lessor's agent has
made any representation or warranty as to the present or future suitability of
the Premises for the conduct of Lessee's business.
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7. MAINTENANCE, REPAIRS, ALTERATIONS AND COMMON AREA SERVICES.
7.1 LESSOR'S OBLIGATIONS. Subject to the provisions of paragraphs
4.2 (Operating Expenses), 6 (Use), 7.2 (Lessee's Obligations) and 9 (Damage or
Destruction) and except for damage caused by any negligent or intentional act or
omission of Lessee, Lessee's employees, suppliers, shippers, customers, or
invitees, in which event Lessee shall repair the damage, Lessor, at Lessor's
expense, subject to reimbursement pursuant to paragraph 4.2, shall keep in good
condition and repair the foundations, exterior walls, structural condition of
interior bearing walls, and roof of the Premises, as well as the parking lots,
walkways, driveways, landscaping, fences, signs and utility installations of the
Common Areas and all parts thereof, as well as providing the services for which
there is an Operating Expense pursuant to paragraph 4.2. Lessor shall not,
however, be obligated to paint the exterior or interior surface of exterior
walls, nor shall Lessor be required to maintain, repair or replace windows,
doors or plate glass of the Premises. Lessor shall have no obligation to make
repairs under this paragraph 7.1 until a reasonable time after receipt of
written notice from Lessee of the need for such repairs. Lessee expressly waives
the benefits of any statute now or hereafter in effect which would otherwise
afford Lessee the right to make repairs at Lessor's expense or to terminate this
Lease because of Lessor's failure to keep the Premises in good order, condition
and repair. Lessor shall not be liable for damages or loss of any kind or nature
by reason of Lessor's failure to furnish any Common Area Services when such
failure is caused by accident, breakage, repairs, strikes, lockout, or other
labor disturbances or disputes of any character, or by any other cause beyond
the reasonable control of Lessor.
7.2 LESSEE'S OBLIGATIONS.
(a) Subject to the provisions of paragraphs 6 (Use), 7.1
(Lessor's Obligations), and 9 (Damage or Destruction), Lessee, at Lessee's
expense, shall keep in good order, condition and repair the Premises and every
part thereof (whether or not the damaged portion of the Premises or the means of
repairing the same are reasonably or readily accessible to Lessee) including,
without limiting the generality of the foregoing, all plumbing, heating,
ventilating and air conditioning systems (Lessee shall procure and maintain, at
Lessee's expense, a ventilating and air conditioning system maintenance
contract), electrical and lighting facilities and equipment within the Premises,
fixtures, interior walls, floors and interior surfaces of exterior walls,
ceilings, windows, doors, plate glass, and skylights located within the
Premises. Lessor reserves the right to procure and maintain the ventilating and
air conditioning system maintenance contract and if Lessor so elects, Lessee
shall reimburse Lessor, upon demand, for the cost thereof.
(b) If Lessee fails to perform Lessee's obligations under
this paragraph 7.2 or under any other paragraph of this Lease, Lessor may enter
upon the Premises after ten (10) days' prior written notice to Lessee (except in
the case of emergency, in which no notice shall be required), perform such
obligations on Lessee's behalf and put the Premises in good order, condition and
repair, and the cost thereof together with interest thereon at the maximum rate
then allowable by law shall be due and payable as additional rent to Lessor
together with Lessee's next Base Rent installment.
(c) On the last day of the term hereof, or on any sooner
termination, Lessee shall surrender the Premises to Lessor in the same condition
as received, ordinary wear and tear excepted, clean and free of debris. Any
damage or deterioration of the Premises shall not be deemed ordinary wear and
tear if the same could have been prevented by good maintenance practices. Lessee
shall repair any damage to the Premises occasioned by the installation or
removal of Lessee's trade fixtures, alterations, furnishings and equipment.
Notwithstanding anything to the contrary otherwise stated in this Lease, Lessee
shall leave the air lines, power panels, electrical distribution systems,
lighting
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fixtures, space heaters, air conditioning, plumbing and fencing on the Premises
in good operating condition.
7.3 ALTERATIONS AND ADDITIONS.
(a) Lessee shall not, without Lessor's prior written
consent make any alterations, improvements, additions, or Utility Installations
in, on or about the Premises, or the Industrial Center, except for nonstructural
alterations to the Premises 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 nor the Industrial Center without
Lessor's prior written consent. As used in this paragraph 7.3 the term "Utility
Installation" shall mean carpeting, window coverings, air lines, power panels,
electrical distribution systems, lighting fixtures, space heaters, air
conditioning, plumbing, and fencing. Lessor may require that Lessee remove any
or all of said alterations, improvements, additions or Utility installations at
the expiration of the term, and restore the Premises and the Industrial Center
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, at any time during the term of this Lease, require that Lessee remove any
or all of the same.
(b) Any alterations, improvements, additions or Utility
installations in or about the Premises or the Industrial Center 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 mechanic's or
materialmen's lien against the Premises, or the Industrial Center, 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 or the
Building 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 or the Industrial Center, 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 and the Industrial Center 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 Lessor's best
interest to do so.
(d) 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 be the property of
Lessor and shall remain upon and be surrendered with the Premises at the
expiration of the Lease term, unless Lessor requires their removal pursuant to
paragraph 7.3(a). Notwithstanding the provisions of this paragraph 7.3(d),
Lessee's machinery and equipment, other than
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that which is affixed to the Premises so that it cannot be removed without
material damage to the Premises, and other than Utility installations, shall
remain the property of Lessee and may be removed by Lessee subject to the
provisions of paragraph 7.2.
7.4 UTILITY ADDITIONS. Lessor reserves the right to install new or
additional utility facilities throughout the Building and the Common Areas for
the benefit of Lessor or Lessee, or any other lessee of the Industrial Center,
including, but not by way of limitation, such utilities as plumbing, electrical
systems, security systems, communication systems, and fire protection and
detection systems, so long as such installations do not unreasonably interfere
with Lessee's use of the Premises.
8. INSURANCE; INDEMNITY.
8.1 LIABILITY INSURANCE-- LESSEE. See Addendum 8.1 / 8.3 / 8.7
8.2 LIABILITY INSURANCE -- LESSOR. Lessor shall obtain and keep in
force during the term of this Lease a policy of Combined Single Limit Bodily
Injury and Property Damage Insurance, insuring Lessor, but not Lessee, against
any liability arising out of the ownership, use, occupancy or maintenance of the
Industrial Center in an amount not less than $1,000,000 and $2,000,000 aggregate
per occurrence.
8.4 PAYMENT OF PREMIUM INCREASE.
(a) After the term of this Lease has commenced, Lessee
shall not be responsible for paying Lessee's Share of any increase in the
property insurance premium for the Industrial Center specified by Lessor's
insurance carrier as being caused by the use, acts or omissions of any other
lessee of the Industrial Center, or by the nature of such other lessee's
occupancy which create an extraordinary or unusual risk.
(b) Lessee, however, shall pay the entirety of any
increase in the property insurance premium for the Industrial Center over what
it was immediately prior to the commencement of the term of this Lease if the
increase is specified by Lessor's insurance carrier as being caused by the
nature of Lessee's occupancy or any act or omission of Lessee.
8.5 INSURANCE POLICIES. Insurance required hereunder shall be in
companies holding a "General Policyholders Rating" of at least B plus, on such
other rating as may be required by a lender having a lien on the Premises, as
set forth in the most current issue of "Best's Insurance Guide." Lessee shall
not do or permit to be done anything which shall invalidate the insurance
policies carried by Lessor. Lessee shall deliver to Lessor copies of liability
insurance policies required under paragraph 8.1 or certificates evidencing the
existence and amounts of such insurance within seven (7) days after the
commencement date of this Lease. No such policy shall be cancelable or subject
to reduction of coverage or other modification except after thirty (30) days
prior written notice to Lessor. Lessee shall, at least thirty (30) days prior to
the expiration of such policies, furnish Lessor with renewals or "binders"
thereof.
8.6 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 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 give notice to the insurance carrier or carriers that the foregoing
mutual waiver of subrogation is contained in this Lease.
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8.8 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 or the Industrial Center, 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 said damage or injury results from
conditions arising upon the Premises or upon other portions of the Industrial
Center, 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 lessee, occupant or user of the industrial Center, nor from
the failure of Lessor to enforce the provisions of any other lease of the
Industrial Center.
9. DAMAGE OR DESTRUCTION.
9.1 DEFINITIONS.
(a) "Premises Partial Damage" shall mean if the Premises
are damaged or destroyed to the extent that the cost of repair is less than
fifty percent of the then replacement cost of the Premises.
(b) "Premises Total Destruction" shall mean if the
Premises are damaged or destroyed to the extent that the cost of repair is fifty
percent or more of the then replacement cost of the Premises.
(c) "Premises Building Partial Damage" shall mean if the
Building of which the Premises are a part is damaged or destroyed to the extent
that the cost to repair is less than fifty percent of the then replacement cost
of the Building.
(d) "Premises Building Total Destruction" shall mean if
the Building of which the Premises are a part is damaged or destroyed to the
extent that the cost to repair is fifty percent or more of the then replacement
cost of the Building.
(e) "Industrial Center Buildings" shall mean all of the
buildings on the Industrial Center site.
(f) "Industrial Center Buildings Total Destruction" shall
mean if the Industrial Center Buildings are damaged or destroyed to the extent
that the cost of repair is fifty percent or more of the then replacement cost of
the Industrial Center Buildings.
(g) "Insured Loss" shall mean damage or destruction which
was covered by an event required to be covered by the insurance described in
paragraph 8. The fact that an Insured Loss has a deductible amount shall not
make the loss an uninsured loss.
(h) "Replacement Cost" shall mean the amount of money
necessary to be spent in order to repair or rebuild the damaged area to the
condition that existed immediately prior to the damage occurring excluding all
improvements made by lessees.
9.2 PREMISES PARTIAL DAMAGE; PREMISES BUILDING PARTIAL DAMAGE.
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(a) Insured Loss: Subject to the provisions of paragraphs
9.4 and 9.5, 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 either Premises
Partial Damage or Premises Building Partial Damage, then Lessor shall, at
Lessor's expense, repair such damage to the Premises, but not Lessee's fixtures,
equipment or tenant improvements, as soon as reasonably possible and this Lease
shall continue in full force and effect.
(b) Uninsured Loss: Subject to the provisions of
paragraphs 9.4 and 9.5, 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), which damage prevents Lessee from using the Premises,
Lessor may at Lessor's option either (i) repair such damage as soon as
reasonably possible at Lessor's expense, in which event this Lease shall
continue in full force and effect, or (ii) give written notice to Lessee within
thirty (30) days after the date of the occurrence of such damage of Lessor's
intention to cancel and terminate this Lease as of the date of the occurrence of
such damage. In the event Lessor elects to give such notice of Lessor's
intention to cancel and terminate this Lease, Lessee shall have the right within
ten (10) days after the receipt of such notice to give written notice to Lessor
of Lessee's intention to repair such damage at Lessee's expense, without
reimbursement from Lessor, in which event this Lease shall continue in full
force and effect, and Lessee shall proceed to make such repairs as soon as
reasonably possible. If Lessee does not give such notice within such 10-day
period this Lease shall be cancelled and terminated as of the date of the
occurrence of such damage.
9.3 PREMISES TOTAL DESTRUCTION: PREMISES BUILDING TOTAL
DESTRUCTION; INDUSTRIAL CENTER BUILDINGS TOTAL DESTRUCTION.
(a) Subject to the provisions of paragraphs 9.4 and 9.5,
if at any time during the term of this Lease there is damage, whether or not it
is an Insured Loss, and which falls into the classifications of either (i)
Premises Total Destruction, or (ii) Premises Building Total Destruction, or
(iii) Industrial Center Buildings Total Destruction, then Lessor may at Lessor's
option either (i) repair such damage or destruction, but not Lessee's fixtures,
equipment or tenant improvements, as soon as reasonably possible at Lessor's
expense, and this Lease shall continue in full force and effect, or (ii) give
written notice to Lessee within thirty (30) days after the date of occurrence of
such damage of Lessor's intention to cancel and terminate this Lease, in which
case this Lease shall be cancelled and terminated as of the date of the
occurrence of such damage.
9.4 DAMAGE NEAR END OF TERM.
(a) Subject to paragraph 9.4(b), if at any time during
the last six months of the term of this Lease there is substantial 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 4(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 twenty (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 twenty (20) day period, Lesson shall, at
Lessor's expense, repair such damage, but not Lessee's fixtures, equipment or
tenant improvements, as soon as reasonably possible and this Lease shall
continue in full force and
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effect. If Lessee fails to exercise such option during said twenty (20) day
period, then Lessor may at Lessor's option terminate and cancel this Lease as of
the expiration of said twenty (20) day period by giving written notice to Lessee
of Lessor's election to do so within ten (10) days after the expiration of said
twenty (20) day period, notwithstanding any term or provision in the grant of
option to the contrary.
9.5 ABATEMENT OF RENT; LESSEE'S REMEDIES.
(a) In the event Lessor 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 ninety (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. Lessor and Lessee waive the provisions of any statute
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. Lessor shall pay the real property tax, as
defined in paragraph 10.3, applicable to the Industrial Center subject to
reimbursement by Lessee of Lessee's Share of such taxes in accordance with the
provisions of paragraph 4.2, except as otherwise provided in paragraph 10.2.
10.2 ADDITIONAL IMPROVEMENTS. Lessee shall not be responsible for
paying Lessee's Share of any increase in real property tax specified in the tax
assessor's records and work sheets as being caused by additional improvements
placed upon the Industrial Center by other lessees or by Lessor for the
exclusive enjoyment of such other lessees. Lessee shall, however, pay to Lessor
at the time that Operating Expenses are payable under paragraph 4.2(c) the
entirety of any increase in real property tax it assessed solely by reason of
additional improvements placed upon the Premises by Lessee or at Lessee's
request.
10.3 DEFINITION OF "REAL PROPERTY TAX." As used herein, the term
"real property tax" shall include any form of real estate tax or assessment,
general, special, ordinary or extraordinary, and any license fee, commercial
rental tax, improvement bond or bonds, levy or tax (other than inheritance,
personal income or estate taxes) imposed on the Industrial Center or any portion
thereof by any authority having the direct or indirect power to tax, including
any city, county, 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 Industrial Center or in
any portion thereof, as against Lessor's right to rent or other income
therefrom, and as against Lessor's business of
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leasing the Industrial Center. The term "real property tax" shall also include
any tax, fee, levy, assessment or charge (i) in substitution of, partially or
totally, any tax, fee, levy, assessment or charge hereinabove included within
the definition of "real property tax," or(ii) the nature of which was
hereinbefore included within the definition of "real property tax," or (iii)
which is imposed for a service or right not charged prior to June 1, 1978, or,
if previously charged, has been increased since June 1, 1978, or (iv) which is
imposed as a result of a transfer, either partial or total, of Lessor's interest
in the Industrial Center or which is added to a tax or charge hereinbefore
included within the definition of real property tax by reason of such transfer,
or (v) which is imposed by reason of this transaction, any modifications or
changes hereto, or any transfers hereof.
10.4 JOINT ASSESSMENT. If the Industrial Center is not separately
assessed, Lessee's Share of the real property tax liability shall be an
equitable proportion of the real property taxes for all of the land and
improvements included within the tax parcel assessed, such proportion to be
determined by Lessor from the respective valuations assigned in the assessor's
work sheets or such other information as may be reasonably available. Lessor's
reasonable determination thereof, in good faith, shall be conclusive.
10.5 PERSONAL PROPERTY TAXES.
(a) Lessee shall pay prior to delinquency all taxes
assessed against and levied upon trade fixtures, furnishings, equipment and all
other personal property of Lessee contained in the Premises or elsewhere. When
possible, Lessee shall cause said trade fixtures, furnishings, equipment and all
other personal property to be assessed and billed separately from the real
property of Lessor.
(b) If any of Lessee's said personal property shall be
assessed with Lessor's real property, Lessee shall pay to Lessor the taxes
attributable to Lessee within ten (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 the
Premises, Lessee shall pay at Lessor's option, either Lessee's Share or a
reasonable proportion to be determined by Lessor of all charges jointly metered
with other premises in the Building.
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 the 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 without the need for notice to Lessee under paragraph 13.1.
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, all of which are referred to as "Lessee Affiliate,"
provided that before such assignment shall be effective said assignee shall
assume, in full, the obligations of Lessee under this Lease. Any such assignment
shall not, in any
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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. Lessee shall give sixty (60) days written notice.
12.3 TERMS AND CONDITIONS OF ASSIGNMENT. Regardless of Lessor's
consent, no assignment shall release Lessee of Lessee's obligations hereunder or
alter the primary liability of Lessee to pay the Base Rent and Lessee's Share of
Operating Expenses, and to perform all other obligations to be performed by
Lessee hereunder. Lessor may accept rent from any person other than Lessee
pending approval or disapproval of such assignment. Neither a delay in the
approval or disapproval of such assignment nor the acceptance of rent shall
constitute a waiver or estoppel of Lessor's right to exercise its remedies for
the breach of any of the terms or conditions of this paragraph 12 or this Lease
Consent to one assignment shall not be deemed consent to any subsequent
assignment. 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 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 TERMS AND CONDITIONS APPLICABLE TO SUBLETTING. Regardless of
Lessor's consent, the following terms and conditions shall apply to any
subletting by Lessee of all or any part of the Premises and shall be included in
subleases:
(a) Lessee hereby assigns and transfers to Lessor all of
Lessee's interest in all rentals and income arising from any sublease heretofore
or hereafter made by Lessee, and Lessor may collect such rent and income and
apply same toward Lessee's obligations under this Lease; provided, however, that
until a default shall occur in the performance of Lessee's obligations under
this Lease, Lessee may receive, collect and enjoy the rents accruing under such
sublease. Lessor shall not, by reason of this or any other assignment of such
sublease to Lessor nor by reason of the collection of the rents from a
sublessee, be deemed liable to the sublessee for any failure of Lessee to
perform and comply with any of Lessee's obligations to such sublessee under such
sublease. Lessee hereby irrevocably authorizes and directs any such sublessee,
upon receipt of a written notice from Lessor stating that a default exists in
the performance of Lessee's obligations under this Lease, to pay to Lessor the
rents due and to become due under the sublease. Lessee agrees that such
sublessee shall have the right to rely upon any such statement and request from
Lessor, and that such sublessee shall pay such rents to Lessor without any
obligation or right to inquire as to whether such default exists and
notwithstanding any notice from or claim from Lessee to the contrary, Lessee
shall have no right or claim against such sublessee or Lessor for any such rents
so paid by said sublessee to Lessor.
(b) No sublease entered into by Lessee shall be effective
unless and until it has been approved in writing by Lessor. In entering into any
sublease, Lessee shall use only such form of sublease as is satisfactory to
Lessor, and once approved by Lessor, such sublease shall not be changed or
modified without Lessor's prior written consent. Any sublessee shall, by reason
of entering into a sublease under thus Lease, be deemed, for the benefit of
Lessor, to have assumed and agreed to conform and comply with each and every
obligation herein to be performed by Lessee other than such obligations as are
contrary to or inconsistent with provisions contained in a sublease to which
Lessor has expressly consented in writing.
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(c) If Lessee's obligations under this Lease have been
guaranteed by third parties, then a sublease, and Lessor's consent thereto,
shall not be effective unless said guarantors give their written consent to such
sublease and the terms thereof.
(d) The consent by Lessor to any subletting shall not
release Lessee from its obligations or alter the primary liability of Lessee to
pay the rent and perform and comply with all of the obligations of Lessee to be
performed under this Lease.
(e) The consent by Lessor to any subletting shall not
constitute a consent to any subsequent subletting by Lessee or to any assignment
or subletting by the sublessee. However, Lessor may consent to subsequent
sublettings and assignments of the sublease or any amendments or modifications
thereto without notifying Lessee or anyone else liable on the Lease or sublease
and without obtaining their consent and such action shall not relieve such
persons from liability.
(f) In the event of any default under this Lease, Lessor
may proceed directly against Lessee, any guarantors or any one else responsible
for the performance of this Lease, including the sublessee, without first
exhausting Lessor's remedies against any other person or entity responsible
therefor to Lessor, or any security held by Lessor or Lessee.
(g) In the event Lessee shall default in the performance
of its obligations under this Lease, Lessor, at its option and without any
obligation to do so, may require any sublessee to attorn to Lessor, in which
event Lessor shall undertake the obligations of Lessee under such sublease from
the time of the exercise of said option to the termination of such sublease;
provided, however, Lessor shall not be liable for any prepaid rents or security
deposit paid by such sublessee to Lessee or for any other prior defaults of
Lessee under such sublease.
(h) Each and every consent required of Lessee under a
sublease shall also require the consent of Lessor.
(i) No sublessee shall further assign or sublet all or
any part of the Premises without Lessor's prior written consent.
(j) Lessor's written consent to any subletting of the
Premises by Lessee shall not constitute an acknowledgement that no default then
exists under this Lease of the obligations to be performed by Lessee nor shall
such consent be deemed a waiver of any then existing default, except as may be
otherwise stated by Lessor at the time.
(k) With respect to any subletting to which Lessor has
consented, Lessor agrees to deliver a copy of any notice of default by Lessee to
the sublessee. Such sublessee shall have the right to cure a default of Lessee
within ten (10) days after service of said notice of default upon such
sublessee, and the sublessee shall have a right of reimbursement and offset from
and against Lessee for any such defaults cured by the sublessee.
12.5 ATTORNEY'S FEES. In the event Lessee shall assign or sublet
the Premises or request the consent of Lessor to any assignment or subletting or
if Lessee shall request the consent of Lessor for any act Lessee proposes to do
then Lessee shall pay Lessor's reasonable attorneys fees incurred in connection
therewith, such attorneys fees not to exceed $350.00 for each such request.
13. DEFAULT; REMEDIES.
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13.1 DEFAULT. The occurrence of any one or more of the following
events shall constitute a material default 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 (3) 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) Except as otherwise provided in this Lease, 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 thirty (30) days after written notice thereof from Lessor to Lessee;
provided, however, that if the nature of Lessee's noncompliance is such that
more than thirty (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
thirty (30) day period and thereafter diligently prosecutes such cure to
completion. To the extent permitted by law, such thirty (30) day notice shall
constitute the sole and exclusive notice required to be given to Lessee under
applicable Unlawful Detainer statutes.
(d) (i) The making by Lessee of any general arrangement
or general 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 sixty (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 thirty (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
thirty (30) days. 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, was materially false.
13.2 REMEDIES. In the event of any such material default 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:
(a) Terminate Lessee's right to possession of the
Premises by any lawful means, in which case this Lease and the term hereof shall
terminate and Lessee shall immediately surrender possession of the Premises to
Lessor. In such event Lessor shall be entitled to recover from Lessee all
damages incurred by Lessor by reason of Lessee's default including, but not
limited to, the cost of recovering possession of the Premises; expenses of
reletting, including necessary renovation and alteration of the Premises,
reasonable attorney's fees, and any real estate commission actually paid; the
worth at the time of award by the court having jurisdiction thereof of the
amount by which the unpaid rent for the balance of the term after the time of
such award exceeds the amount of such rental loss for the same period that
Lessee proves could be reasonably avoided; that portion of the leasing
commission paid by Lessor pursuant to paragraph 15 applicable to the unexpired
term of this Lease.
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(b) Maintain Lessee's right to possession in which case
this Lease shall continue in effect whether or not Lessee shall have vacated or
abandoned the Premises. In such event Lessor shall be entitled to enforce all of
Lessor's rights and remedies under this Lease, including the right to recover
the rent as it becomes due hereunder.
(c) Pursue any other remedy now or hereafter available to
Lessor under the laws or judicial decisions of the state wherein the Premises
are located. Unpaid installments of rent and other unpaid monetary obligations
of Lessee under the terms of this Lease shall bear interest from the date due at
the maximum rate then allowable by law.
13.3 DEFAULT BY LESSOR. Lessor shall not be in default unless
Lessor fails to perform obligations required of Lessor within a reasonable time,
but in no event later than thirty (30) days after written notice by Lessee to
Lessor and to the holder of any first mortgage or deed of trust covering the
Premises whose name and address shall have theretofore been furnished to Lessee
in writing, specifying wherein Lessor has failed to perform such obligation;
provided, however, that if the nature of Lessor's obligation is such that more
than thirty (30) days are required for performance then Lessor shall not be in
default if Lessor commences performance within such thirty (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 Base Rent, Lessee's Share of Operating Expenses or 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 Property. Accordingly, if any installment of Base Rent,
Operating Expenses, 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 any of the aforesaid monetary obligations of Lessee, then Base
Rent shall automatically become due and payable quarterly in advance, rather
than monthly, notwithstanding paragraph 4 1 or any other provision of this Lease
to the contrary.
14. CONDEMNATION. If the Premises or any portion thereof or the Industrial
Center 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 ten
percent of the floor area of the Premises, or more than twenty-five percent of
that portion of the Common Areas designated as parking for the Industrial Center
is taken by condemnation, Lessee may, at Lessee's option, to be exercised in
writing only within ten (10) days after Lessor shall have given Lessee written
notice of such taking (or in the absence of such notice, within ten (10) days
after the condemning authority shall have taken possession) terminate this Lease
as of the date the condemning authority takes such possession. If Lessee does
not terminate this Lease in accordance with the foregoing, this Lease shall
remain in full force and effect as to the portion of the premises remaining,
except that the rent shall be reduced in the proportion that the floor area of
the Premises taken bears to the total floor area of the Premises. No reduction
of rent shall occur if the only area taken is that which does not have the
Premises located thereon. Any award for the taking of all or any part of the
Premises under the power
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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 Lessor'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. SEE ADDENDUM.
16. ESTOPPEL CERTIFICATE.
(a) Each party (as "responding party") shall at any time
upon not less than ten (10) days' prior written notice from the other party
("requesting party") execute, acknowledge and deliver to the requesting party 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 the responding party's knowledge, any
uncured defaults on the part of the requesting party, 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 or of the business
of the requesting party.
(b) At the requesting party's option, the failure to
deliver such statement within such time shall be a material default of this
Lease by the party who is to respond, without any further notice to such party,
or it shall be conclusive upon such party that (i) this Lease is in full force
and effect, without modification except as may be represented by the requesting
party, (ii) there are no uncured defaults in the requesting party's performance,
and (iii) if Lessor is the requesting party, not more than one month's rent has
been paid in advance.
(c) If Lessor desires to finance, refinance, or sell the
Property, 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 (3) years' financial statements of Lessee. All such financial
statements shall be received by Lessor and such lender or purchaser in
confidence and shall be used only for the purposes herein set forth.
17. LESSOR'S LIABILITY. The term "Lessor" as used herein shall mean only
the owner or owners, at the time in question, of the fee title or a lessee's
interest in a ground lease of the Industrial Center, 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.
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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 us of the essence with respect to the obligations
to be performed under this Lease.
21. ADDITIONAL RENT. All monetary obligations of Lessee to Lessor under the
terms of this Lease, including but not limited to Lessee's Share of Operating
Expenses and insurance and tax expenses payable 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
or contemporaneous 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 employee 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 the Premises or the Property 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 consents, remains in possession
of the Premises on any part thereof after the expiration of the term hereof,
such occupancy shall be a tenancy from month to
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month upon all the provisions of this Lease pertaining to the obligations of
Lessee, but all Options, if any, granted under the terms of this Lease shall be
deemed terminated and be of no further effect during said month to month
tenancy.
27. CUMULATIVE REMEDIES. No remedy or election hereunder shall be deemed
exclusive but shall, wherever possible, be cumulative with all other remedies at
law or in equity.
28. COVENANTS AND CONDITIONS. Each provision of this Lease performable by
Lessee shall be deemed both a covenant and a condition.
29. BINDING EFFECT; CHOICE OF LAW. Subject to any provisions hereof
restricting assignment or subletting by Lessee and subject to the provisions of
paragraph 17, this Lease shall bind the parties, their personal representatives,
successors and assigns. This Lease shall be governed by the laws of the State
where the Industrial Center is located and any litigation concerning this Lease
between the parties hereto shall be initiated in the county in which the
Industrial Center is located.
30. SUBORDINATION.
(a) This Lease, and any Option granted hereby, 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
Industrial Center 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 and any
Options granted hereby prior to the lien of its mortgage, deed of trust or
ground lease, and shall give written notice thereof to Lessee, this Lease and
such Options shall be deemed prior to such mortgage, deed of trust or ground
lease, whether this Lease or such Options are 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 or any Option
granted herein 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 ten (10)
days after written demand shall constitute a material default by Lessee
hereunder without further notice to Lessee 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(s) named herein bring an
action to enforce the terms hereof or declare rights hereunder, the prevailing
party in any such action, on trial or appeal, shall be entitled to his
reasonable attorney's fees to be paid by the losing party as fixed by the court.
The provisions of this paragraph shall inure to the benefit of the broker named
herein who seeks to enforce a right hereunder.
32. LESSOR'S ACCESS. Lessor and Lessor's agents shall have the right to
enter the Premises at reasonable times for the purpose of inspecting the same,
showing the same to prospective purchasers, lenders, or lessees, and making such
alterations, repairs, improvements or additions to the Premises or to the
building of which they are part as Lessor may deem necessary or desirable.
Lessor may at any time
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place on or about the Premises or the Building any ordinary "For Sale" signs and
Lessor may at any time during the last 120 days of the term hereof place on or
about the Premises any ordinary "For Lease" signs. All activities of Lessor
pursuant to this paragraph shall be without abatement of rent, nor shall Lessor
have any liability to Lessee for the same.
33. AUCTIONS. Lessee shall not conduct, nor permit to be conducted, either
voluntarily or involuntarily, any auction upon the Premises or the Common Areas
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 or the
Industrial Center without Lessor's prior written consent. Under no circumstances
shall Lessee place a sign on any roof of the Industrial Center.
35. MERGER. The voluntary or other surrender of this Lease by Lessee, or a
mutual cancellation thereof, or a termination by Lessor, shall not work a
merger, and shall, at the option of Lessor, terminate all or any existing
subtenancies or may, at the option of Lessor, operate as an assignment to Lessor
of any or all of such subtenancies.
36. CONSENTS. Except for paragraph 33 hereof, wherever in this Lease the
consent of one party is required to an act of the other party such consent shall
not be unreasonably withheld or delayed.
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 executing this Lease on behalf of
Lessor represent and warrant to Lessee that they are fully authorized and
legally capable of executing this Lease on behalf of Lessor and that such
execution is binding upon all parties holding an ownership interest in the
Property.
39. OPTIONS.
39.1 DEFINITION. As used in this paragraph the word "Option" has
the following meaning: (1) the right or option to extend the term of this Lease
or to renew this Lease or to extend or renew any lease that Lessee has on other
property of Lessor; (2) the option or right of first refusal to lease the
Premises or the right of first offer to lease the Premises or the right of first
refusal to lease other space within the Industrial Center or other property of
Lessor or the right of first offer to lease other space within the Industrial
Center or other property of Lessor; (3) the right or option to purchase the
Premises or the Industrial Center, or the right of first refusal to purchase the
Premises or the Industrial Center, or the right of first offer to purchase the
Premises or the Industrial Center, or the right or option to purchase other
property of Lessor, or the right of first refusal to purchase other property of
Lessor or the right of first offer to purchase other property of Lessor.
39.2 OPTIONS PERSONAL. Each Option granted to Lessee in this Lease
is personal to the original Lessee and may be exercised only by the original
Lessee while occupying the Premises who does so without the intent of thereafter
assigning this Lease or subletting the Premises or any portion thereof, and may
not be exercised or be assigned, voluntarily or involuntarily, by or to any
person or entity other than Lessee, provided, however, that an Option may be
exercised by or assigned to any
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Lessee Affiliate as defined in paragraph 12.2 of this Lease. The Options, if
any, herein granted to Lessee are not assignable separate and apart from this
Lease, nor may any Option be separated from this Lease in any manner, either by
reservation or otherwise.
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 noncompliance
alleged in said notice of default is cured, or (ii) during the period of time
commencing on the date after a monetary obligation to Lessor is due from Lessee
and unpaid (without any necessity for notice thereof to Lessee) and continuing
until the obligation is paid, or (iii) at any time after an event of default
described in paragraphs 13.1(a), 13.1(d), or 13.1(e) (without any necessity of
Lessor to give notice of such default to Lessee), nor (iv) in the event that
Lessor has given to Lessee three or more notices of default under paragraph
13.1(b), or paragraph 13 1(c), whether or not the defaults are cured, during the
12 month period of time immediately prior to the time that Lessee attempts to
exercise the subject Option.
(b) The period of time within which an Option may be
exercised shall not be extended or enlarged by reason of Lessee's inability to
exercise an Option because of the provisions of paragraph 39.4(a).
(c) All rights of Lessee under the provisions of an
Option shall terminate and be of no further force or effect, notwithstanding
Lessee's due and timely exercise of the Option, if, after such exercise and
during the term of this Lease, (i) Lessee fails to pay to Lessor a monetary
obligation of Lessee for a period of thirty (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 thirty (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), or paragraph 13.1(c), whether or not
the defaults are cured.
40. SECURITY MEASURES. Lessee hereby acknowledges that Lessor shall have no
obligation whatsoever to provide guard service or other security measures for
the benefit of the Premises or the Industrial Center, Lessee assumes all
responsibility for the protection of Lessee, its agents, and invitees and the
property of Lessee and of Lessee's agents and invitees from acts of third
parties. Nothing herein contained shall prevent Lessor, at Lessor's sole option,
from providing security protection for the Industrial Center or any part
thereof, in which event the cost thereof shall be included within the definition
of Operating Expenses, as set forth in paragraph 4.2(b).
41. 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
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aforementioned documents upon request of Lessor and failure to do so shall
constitute a material default of this Lease by Lessee without the need for
further notice to Lessee.
42. 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.
43. 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.
44. CONFLICT. Any conflict between the printed provisions of this Lease and
the typewritten or handwritten provisions, if any, shall be controlled by the
typewritten or handwritten provisions.
45. OFFER. Preparation of this Lease by Lessor or Lessor's agent and
submission of same to Lessee shall not be deemed an offer to lease. This Lease
shall become binding upon Lessor and Lessee only when fully executed by Lessor
and Lessee.
46. ADDENDUM. Attached hereto is an addendum which constitutes a part of
this Lease. If there is a conflict, or variance of any term of this lease
between lease and addendum, addendum shall apply.
ITEMS:
3.1, 3.3(a), 4.1, 4.2(a), 5.1, 5.2, 6.2(a), 8.1, 8.3, 8.7, 15, 39.5,
47, 48, 49.1, 50, 50.1, 51, 52, 52.1, 52.2, 52.3, 52.4, ON ADDENDUM.
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LESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM AND
PROVISION CONTAINED HEREIN AND, BY EXECUTION OF THIS LEASE, SHOW THEIR INFORMED
AND VOLUNTARY CONSENT THERETO. THE PARTIES HEREBY AGREE THAT, AT THE TIME THIS
LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE COMMERCIALLY REASONABLE AND
EFFECTUATE THE INTENT AND PURPOSE OF LESSOR AND LESSEE WITH RESPECT TO THE
PREMISES.
THIS LEASE HAS BEEN PREPARED FOR SUBMISSION TO YOUR ATTORNEY
FOR 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.
LESSOR LESSEE
SEE ADDENDUM SEE ADDENDUM
------------------------------------- -----------------------------------
---------
By __________________________________ By ________________________________
_________
By __________________________________ By ________________________________
_________
Executed on _________________________ Executed on _______________________
_________
(Corporate Seal) (Corporate Seal)
ADDRESS FOR NOTICES AND RENT ADDRESS
_____________________________________ ___________________________________
_________
_____________________________________ ___________________________________
_________
_____________________________________ ___________________________________
_________
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ADDENDUM TO LEASE
LESSOR: GUILLON BUSINESS PARK PROPERTIES, L.P.
LESSEE: ALTERNATIVE MATERIALS TECHNOLOGY
PREMISES: LOT 7 - XXXXX BUSINESS PARK
LEASE DATE: JUNE 20, 1997
3.1 Term. (Continued) Lease shall be effective as of date of execution by
Lessor. Rent and lease term shall commence upon Certificate of Occupancy being
issued by City of Chico Building Department.
3.3(a) Early Occupancy. Lessee may enter premises prior to rent commencement
date, by agreement of Lessor, to perform Lessee improvements. Lessee shall not
interfere with Lessor's construction. Lessee to provide Lessor with Certificate
of Insurance prior to entering premises.
4.1 (Continued) Schedule for base rent is as follows:
Years 1 and 2 $8,224.00, NNN per month
Year 3 and 4 $8,635.00, NNN per month
Year 5 and 6 $9,066.00, NNN per month
Year 7 and 8 $9,520.00, NNN per month
Year 9 and 10 $9,996.00, NNN per month
4.1(a) Base Rent; Alternative I.
Year 1 $8,224.00, NNN per month Year 6 $8,566.00, NNN per month
Year 2 $7,771.00, NNN per month Year 7 $8,995.00, NNN per month
Year 3 $8,159.00, NNN per month Year 8 $8,995.00, NNN per month
Year 4 $8,159.00, NNN per month Year 9 $9,445.00, NNN per month
Year 5 $8,566.00, NNN per month Year 10 $9,445.00, NNN per month
4.2(a) (Continued) Lessee's Share shall include a reserve of $.005 per square
foot per month as a reserve to pay for major repair/replacement of roof, parking
lot, and exterior painting. This reserve shall be held until such work is needed
and shall not be refundable to Lessee, but shall be used first if there is major
repair/replacement of roof, parking lot, or exterior painting. CAM expense cost
not to increase more than five (5%) per annum on a cumulative basis.
5.1 Security Deposit. Lessee shall submit an initial security deposit in
the amount of $8,224.00 upon execution of lease, which sum shall be held by
Lessor as Security Deposit. Said sum shall be refundable to Lessee upon
termination of lease, if Lessee is not in default of lease. Lessee shall deposit
with Lessor, as additional security deposit, the sum of $26,500 upon
commencement of electrical improvements to H-2 area. Said sum shall be returned
to Lessee after the thirteenth (13th) month of lease period provided Lessee has
not defaulted on any lease obligations.
5.2 Disposition of Security Deposits. At the expiration of the twelfth (12)
month of initial lease term, Lessee may elect to apply $26,500.00 additional
deposit as payment of electrical improvements to H-2 area. Upon such election,
Lessor shall reduce rent by $453.00 per month for each and every month of lease
term (See Item 4.1(a)). As further consideration for $26,500.00 payment to
Lessor, Lessor shall grant Lessee the "Right to Cancel" lease after the
seventy-second (72nd) month of initial lease term. Lessee to give Lessor two
hundred twenty (220) days prior written notice of "Intent to Cancel", as set
forth in Item 52.
6.2(a) (Continued) Lessor warrants that any new construction by Lessor
pursuant to this Lease shall be in conformity with the building plans and
permits, and shall comply with current interpretations of the Americans with
Disabilities Act of 1990 ("ADA") regarding the type of building and/or tenant
improvements constructed by Lessor. However, if any governmental authority
should require any additional improvements, permits or approvals, under ADA or
otherwise, due to Lessee's particular use, or Lessee's employees, customers, or
invitees, other than those which are stated in this Lease, and other than
requirements generally for buildings of this type, including without limitation
additional fire protection equipment or flow capacity, use permits, or zoning
variances, such improvements or changes to the permitted uses shall be made at
Lessee's sole expense.
8.1 Liability Insurance - Lessee. Lessee shall, at Lessee's expense, obtain
and keep in force during the term of this Lease a policy of Combined Single
Limit Bodily Injury, Personal Injury, Advertising
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Injury, and Property Damage insurance insuring Lessee and lessor against any
claim arising out of, or related in any manner to, the use, occupancy, or
maintenance of the Premises and the Industrial Center. Such insurance shall be
in an amount not less than $1,000,000 per occurrence, $2,000,000 aggregate. The
policy shall insure performance by Lessee of the indemnity provisions of this
Paragraph 8. The provisions of said insurance nor the limits of said insurance
shall not, however, limit the liability of Lessee hereunder. Lessee covenants
and agrees that Lessor will be listed as an Additional Named Insured in said
policy in conformity with the agreements to defend and indemnify herein, and
that said insurance maintained by Lessee is agreed to be primary, with any
insurance maintained by Lessor to be excess.
8.3 Property Insurance. Lessor shall maintain a policy of insurance
covering loss or damage to the Industrial Center improvements. Said insurance
policy will not cover Lessee's personal property, fixtures, the interruption of
business, extra expenses, equipment or tenant improvements. Said policy shall be
in an amount not to exceed the full replacement value thereof, as the same may
exist from time to time. Said policy will provide protection against all perils
included within the classification of fire, extended coverage, vandalism,
malicious mischief, flood (but only in the event same is required by a lender
having a lien on the Premises), special extended perils ("all risk", as such
term is used in the insurance industry), plate glass insurance and such other
insurance as Lessor deems advisable. In addition, Lessor shall 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 Operating Expenses for said period. In the event that the
Premises shall suffer an insured loss as defined in Paragraph 9.1(g) hereof, the
deductible amounts under the casualty insurance policies relating to the
Premises shall be paid by Lessee.
8.7 Indemnity. Except for the negligence or willful misconduct of Lessor
and/or Lessor's employees, agents, invitees, or contractors, Lessee shall
defend, indemnify and hold harmless Lessor from and against any and all claims
arising out of or in any manner related to Lessee's use or occupancy of the
Industrial Center, or arising out of or in any manner related to the conduct of
Lessee's business or arising out of or in any manner related to 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
all costs, attorney's fees, expenses and liabilities incurred in the defense of
any such claim or any action or proceeding brought there on.
Upon notice of a claim or action or proceeding brought hereunder, the duty to
defend and protect the interest of Lessor shall apply unless Lessee can
establish at the time of notice of the claim that any such claim raised
hereunder arises out of the sole negligence or sole willful misconduct of the
Lessor. Lessor shall retain the right to reject defense counsel appointed by
Lessee or its agents, and to appoint satisfactory counsel AT LESSOR'S SOLE COST
AND EXPENSE, if Lessor believes that such counsel as appointed by Lessee or its
agents will not adequately represent Lessor's interests in the case. The duty to
indemnify shall apply unless Lessee can establish as a matter of law that the
settlement or judgment arises out of the sole negligence or sole willful
misconduct of the Lessor. EXCEPT FOR THE NEGLIGENCE OR WILLFUL MISCONDUCT OF
LESSOR AND/OR LESSOR'S EMPLOYEES, AGENTS, INVITEES, OR CONTRACTORS, Lessee, as a
material part of the consideration to Lessor, hereby acknowledges that there is
a risk of harm to Lessee's property and injury to persons in, upon or about the
Industrial Center arising from any cause or event and Lessee agrees to assume
all such risks of harm and Lessee hereby waives all claims in respect thereof
against Lessor.
15. Lease Commission. XXXXXX & XXXXXXX REALTORS and DEPA REAL ESTATE shall
receive a lease commission according to a separate agreement. Any commission due
as a result of this lease shall be paid by Lessor who shall hold Lessee harmless
for any commission monies due.
39.5 Option to Extend Term. If Lessee is not in default of any of the terms
and conditions of the existing Lease, Lessee shall have the option to renew for
one (1) additional five (5) year period. Lessee shall give written notice at
least one hundred eighty (180) days prior to expiration of the then existing
term of Lessee's intention to extend for that time. However, if Lessee is in
default on the date the option notice is given, the option notice shall be
totally ineffective; or, if Lessee is in default on the date the extended term
is to commence, the extended term shall not commence, and this Lease shall
expire at the end of the then existing term. All of the terms and conditions of
this Lease shall remain the same with the exception of rent, which shall be
negotiated in good faith between Lessor and Lessee and shall be consistent with
prevailing market lease rates at time of option.
47. Forklift Restrictions. Asphaltic cement cannot withstand hard rubber
forklift tires. In the event the asphalt is damaged by lessee's use of a
forklift with hard rubber tires, it will be Lessee's obligation to repair the
damaged asphaltic cement at Lessee's sole expense.
48. Outside Storage. Lessee shall only store materials within the building
or outside on concrete inside a screened fence as specifically allowed by the
applicable governmental authorities.
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49. Hazardous Waste. Each party shall be fully and completely responsible
and shall indemnify and hold the other party harmless from and against any and
all claims and governmental actions concerning hazardous waste on the Premises
as a result of each such party's activity, or permitted or suffered by each such
party on or about the Premises, as well as all costs, attorney's fees, expenses,
and liabilities incurred in defense of any such claim, action, or proceeding
brought thereon, including provision of counsel reasonably satisfactory to the
other party, and regardless of whether suit or any administrative action is
filed or commenced. In the event Lessee stores or uses any hazardous materials,
Lessee shall produce evidence of insurance covering accidental contamination
naming Lessor as additional insured.
49.1 Odor. Lessee warrants proposed facility operations will emit no outside
odor which would be in violation of any municipal, state, or federal
regulations. Lessee shall be solely liable for compliance to all codes and
regulations, with no offset rights against lease.
50. First Right of Negotiation. During term of lease, Lessee shall be
granted the first right to lease vacant space in subject building for $0.245 per
square foot and term mutually acceptable to both parties. Square foot rental
rate is valid for one (1) year after commencement of initial lease term.
Additional costs for improvements such as office space, or warehouse
improvements to be mutually agreeable to Lessee and Lessor. Lessor shall attempt
to first, lease vacant space to third parties furthest from Lessee's space.
50.1 Upon availability of space, Lessor to provide Lessee with written
notice stating location, size and configuration of available space. Lessor and
Lessee to negotiate in good faith to consummate lease within ten (10) days of
Lessee's receipt of written notice. If negotiations are not finalized within a
ten (10) day period, Lessor shall be free to negotiate with third party.
51. Expansion Provision. In the event Lessee requires at least fifty (50%)
percent more space (45,000 square feet) which space cannot be provided by Lessor
in subject building within a reasonable time period, then Lessor shall construct
a new facility in the Hegan Lane Business Park and cancel subject lease. Term of
new lease to be at least ten (10) years. This provision is subject to
availability of land in Hegan Lane Business Park and mutually acceptable terms
and conditions of new lease.
52. Cancellation. In the event after six (6) years of the initial lease
term, Lessee wishes to acquire a new building to relocate its manufacturing
operations then the subject lease shall be canceled under the following
conditions:
52.1. Guillon Business Park Properties, LP constructs the new facility in
Hegan Lane Business Park and sells the new building to Lessee at a competitive
price mutually acceptable to both parties (negotiated purchase price).
52.2. If land is unavailable for purchase in Hegan Lane Business Park, than
Lessor shall have the option of acquiring other property located in Chico
acceptable to both parties and constructing the new facility as per Item A
above.
52.3. In order for Lessee to exercise the Right of Cancellation, Lessee must
not be in default of any lease conditions.
52.4. Lessee to give Lessor "Notice of Intent to Cancel" a minimum of two
hundred twenty (220) days prior to intended cancellation date but not less than
seventy-two (72) months of initial lease term. Concurrently with executed Notice
of Intent, Lessee and Lessor shall enter into a purchase contract for the sale
of new facility, which contract will provide for Lessee to fund in an escrow
account an amount equal to the land value as down payment on purchase price.
LESSOR: ADDRESS:
GUILLON BUSINESS PARK PROPERTIES, L.P. 0000 Xxxxxxxx Xxxx
Xxxxx, XX 00000
(000) 000-0000
_____________________________________
XXXXXXX X. XXXXXXX
MANAGING PARTNER
_____________________________________
XXXXXXX X. XXXXXX
LIMITED PARTNER
LESSEE:
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ALTERNATIVE MATERIALS TECHNOLOGY 0000 Xxxxxxxx Xxxxxx
Xxxxx, XX 00000
(000) 000-0000
(000) 000-0000 (Fax)
_____________________________________
XXXXXXX X. XXXXXXX
PRESIDENT
Dated: 6-30-97
_____________________________________
XXX XXXXXXX
SECRETARY/TREASURER/CFO
Dated: 6-30-97
POLYMER SOLUTIONS, INC.
_____________________________________ Suite 410, Guinness Tower
XXXXXX X. XXXXX 0000 Xxxxxxxx Xxxxxx
XXXXXXXXX/XXX Xxxxxxxxx, XX X0X 0X0
(000) 000-0000
(000) 000-0000 (Fax)
Dated: 7 July 97
Exhibit "A" - Map
Exhibit "B" - Description of Improvements
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EXHIBIT "B"
IMPROVEMENTS/SPECIFICATIONS
Alternative Materials Technology
OFFICE AREA
1. Approximately 575 square feet, configuration mutually acceptable.
2. Doors; Walnut legacy hollow core, hung in Timely xxxxx tone metal
jambs, with Schlage "F" series hardware, installed according to plans.
3. Ceiling; 2 x 4 Xxxx grid (white) and random fissured acoustical tile
ceiling.
4. Floors; Any carpet shall be 20 ounce level loop, linoleum shall be
Xxxxxxxxx xxxxxxx, V.A.T. 3/32", all with 4" rubber cove base.
5. Heating/Air Conditioning; Heating and air conditioning will be provided
throughout the office area in accordance with sound engineering
practice.
6. Electrical Outlets; Installed according to plans.
7. Telephone Outlets; Installed according to plans.
8. Switches; Installed according to code.
9. Light Fixtures; 2x4 lay in fluorescent fixtures with Prismatic lens
will be installed as shown in the plans.
10. Painting; One (1) finish coat flat latex paint on textured walls.
11. Insulation; As per code, R-11 walls and R-19 ceiling.
12. Restrooms; Two (2) restrooms.
a. Men's - One (1) toilet, one (1) urinal, one (1) sink
b. Women's - One (1) toilet, one (1) sink
WAREHOUSE AREA
GENERAL
1. Fire Sprinklers; Extra Hazard Group II .40/2,500 density, wet system
with two fire risers.
2. Insulation; R-30 Foil Back Ceiling.
3. Demise Wall; 2x6 with 5/8" sheetrock, fire taped.
4. HVAC; Warehouse ventilation. Lessee responsibility.
H-2 AREA
1. Four (4) hour concrete parapet demise wall.
2. Demise wall to have two (2) 12 x 14 roll up doors with access ramps.
3. Sheetrocked ceiling/columns as per code.
4. Smoke vents as per code.
5. Special metal halide lights, one (1) per 1,500 square feet.
6. Excludes smoke curtains
H-3 AREA
1. 150 LF 6" curb.
2. Smoke vents as per code
3. Metal halide lights, one (1) per 1,500 square feet
4. Excludes smoke curtains (may be required by fire department)
5. No electrical distribution
ELECTRICAL
1. 800 amp main service.
2. Forty-five (45) KVA transformers
3. One (1) 125 amp 120/208 volt sub panel
4. One (1) 800 amp sub-feed for distribution panel
a. 4 - Fan connections in rated area
b. 1 - 25 HP mixer connection in rated area
c. 1 - 15 HP disperser connection in warehouse area
d. 1 - 25 HP agitator connection in warehouse area
e. 1 - 60 HP disperser connection in warehouse area
f. 1 - 15 HP disperser connection in warehouse area
g. 1 - 25 HP mixer in warehouse area
h. 2 - Forklift charge connections in warehouse area
i. 1 - 20 HP compressor connection in warehouse area
5. Alternative; expand Lessee's main electrical service to 1,000 amp, cost
to Lessee is $3,371.00.
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2(nd) ADDENDUM TO LEASE
LESSOR: GUILLON BUSINESS PARK PROPERTIES, L.P.
LESSEE: ALTERNATIVE MATERIALS TECHNOLOGY
PREMISES: XXX 0 - XXXXX XXXX XXXXXXXX XXXX
LEASE DATED: JUNE 20, 1997
ADDENDUM DATED: JANUARY 26, 1998 (FOR REFERENCE ONLY)
2. PREMISES & PARKING
2.1 ADDITIONAL LEASE SPACE: The original lease is hereby amended
to increase Lessee's square footage by 18,000 s.f. as
depicted on Exhibit "A-2", hereinafter referred to as Lessee's
Additional Lease Space, consisting of:
2.1.1 9,000 s.f. of S-1 area, consisting of approximately
I. 6,175 s.f. warehouse area (Refer to Section
3.1.1 below)
II. 5,650 s.f. two story office area (Refer to
Section 3.1.1 below)
2.1.2 9,000 s.f. of H-3 area
I. 770 s.f. office area (Refer to Section 3.1.2
below)
2.2 VEHICLE PARKING: Amending item 2.2 of the original lease
agreement, Lessee shall be entitled to increased parking in
relation to total square feet occupied, based on a formula of
One (1) space per 1,000 s.f.
3. TENANT IMPROVEMENTS
3.1 TENANT IMPROVEMENTS:
3.1.1 S-1 AREA: Lessor shall be responsible for
construction of tenant improvements located in the
S-1 area, pursuant to building improvement plans
dated ______________. Lessor shall be responsible
for 4 hour separation wall and appurtenant
improvements as needed to comply with provisions of
the Uniform Building Code.
I. ADDITIONAL SPECIFICATIONS: Carpet shall be
Commercial grade 28 ounce loop (nylon
fiber). Linoleum shall be Xxxxxxxxx xxxxxxx
sheet vinyl with 4" coving or, V.C.T. 1/8"
with 4" rubber cove base.
II. CABINETRY: Lessor shall provide standard
restroom vanities and kitchenette upper and
lower cabinetry. Lessee shall provide all
other shelving, cabinetry and counter tops.
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3.1.2 H-3 AREA OFFICE: Lessee shall be responsible for all
design and construction of tenant improvements
located in the H-3 area, the completion of which
shall be at their sole discretion.
3.1.3 H3 AREA CONTAINMENT & VENTILATION: Lessee shall be
responsible for installation of drain valve system
required the City of Chico resulting from Lessee's
particular use of the premises, except however Lessor
shall contribute $1,800 in cash upon completion of
said work. Lessor shall be responsible for curb and
gutter requirements necessary to comply with City
"containment" requirements resulting from Lessee's
particular use of the premises. Lessor shall also be
responsible for installation of 5 hp exhaust fan
required by City of Chico.
4. RENT & TERM COMMENCEMENT
4.1 TERM/RENT COMMENCEMENT: Lease term and rent commencement for
additional lease space shall be as follows:
4.1.1 S-1 AREA: Term for 9,000 s.f. S-1 office and
warehouse area shall begin upon issuance of separate
Notice of Completion by the City of Chico for the S-1
area, from which Lessee shall be granted 45 days free
of base rent.
4.1.2 H-3 AREA: Term and rent for 9,000 s.f. H-3 warehouse
area shall begin upon issuance of separate Notice of
Completion by the City of Chico for H-3 areas
pursuant to the original lease, excluding H-3 office
improvements which are the responsibility of Lessee.
4.2 TENANT RENT: Rent rates, credits and deposit adjustments for
additional lease space is as follows:
4.2.1 REDUCTION IN RENT AND DEPOSIT FOR LESSEE FUNDED
T.I.'S: Amending the original Addendum, Lessee's base
rent shall be reduced by $330 per month to reflect
reduction of 550 s.f. of Lessor constructed office
improvements depicted on Xxxxxxx "X" (xxxxxx xxxx) of
the original lease. Upon execution of this addendum,
Lessor shall refund to Lessee prior payments for
security deposits ($330) and 1st months rent ($330)
in the amount of $660.
4.2.2 INCREASE IN RENT FOR ADDITIONAL SPACE: For additional
lease space of 18,000 s.f., initial year base
warehouse rent shall be $3,026 per month (12,350 s.f.
times $.245/s.f. per month (NNN)), and office rent
shall be $3,390 (5,650 s.f. times $.60/s.f. per month
(NNN)), for an increase in rent for additional space
of $6,416 per month.
4.2.3 INCREASE IN RENT FOR LESSOR FUNDED ADDITIONAL T.I.'S:
In consideration for Lessor's providing R-30
insulation in the S-1 area, base rent shall be
increased by $95 per month; for additional fire
protection within the H-3 area, base rent shall be
increased by $58 per month; for contribution toward
security fence of which Lessor shall pay $4,500 to
Lessee upon completion, base rent shall be
-112-
increased by $59 per month; for additional venting
within the H3 area (5 hp fan model #7C908), base rent
shall be increased $40.
4.2.4 INCREASE IN RENT FOR 4 HOUR WALL: In consideration
for Lessor's providing 4 hour wall and roof parapet
between H-2 and S-1 areas, fire rated doors and other
modifications required by city of Chico resulting
from Lessee's particular use of the premises, base
rent shall be increased by $108 per month.
4.2.5 AMENDED RENT SCHEDULE: Incorporating the above items
and amending the original Addendum, upon rent
commencement of additional lease space the revised
rent schedule and Alternative "1" reflecting the
above items is as follows:
BASE RENT:
Years 1 and 2 $14,670
Years 3 and 4 $15,404
Years 5 and 6 $16,174
Years 7 and 8 $16,982
Years 9 and 10 $17,832
BASE RENT: ALTERNATIVE "I"
Year 1 $14,670 Year 6 $16,098
Year 2 $14,584 Year 7 $16,500
Year 3 $14,948 Year 8 $16,913
Year 4 $15,322 Year 9 $17,336
Year 5 $15,705 Year 10 $17,769
4.3 INCREASE IN DEPOSIT: Incorporating the above items and upon
execution of this addendum, Lessee shall pay a security
deposit of $6,776, and 1st months rent of $6,776, for a total
increase in deposit of $13,552.
4.4 OTHER TERMS AND CONDITIONS: All other terms and conditions of
the original lease, including but not limited to termination
dates, shall apply to the additional lease space.
4.5 OPERATING EXPENSES: Lessee's pro rata share of common area
expenses shall be increased to reflect additional lease space
provided for in this addendum. Lessee's obligation to pay CAM
charges begins upon occupancy of space. For illustration
purposes only, and subject to applicable sections of the Lease
and 1st Addendum relating to Operating Expenses, the following
table reflects Lessee's base rent and a CAM estimate of $.055
per s.f. per month.
ESTIMATE OF TOTAL RENT:
BASE CAM TOTAL
TERM RENT ESTIMATE ESTIMATE
-------------------------------------------------------------
Years 1 and 2 $14,670 $2,475 $17,145
Years 3 and 4 $15,404 $2,475 $17,879
-113-
Years 5 and 6 $16,174 $2,475 $18,649
Years 7 and 8 $16,982 $2,475 $19,457
Years 9 and 10 $17,832 $2,475 $20,307
39. OPTIONS
39.1 1st RIGHT TO LEASE ADJACENT SPACE: Lessee reserves a 1st right
of refusal on Suite #50 (9,000 s.f.) of building located at
311 Xxxxxxxx adjacent to lessee's leased premises. Terms and
conditions of the original lease agreement pertaining to
options (Section 39) and available space (Section 50.1) are
hereby incorporated.
39.2 BUILDING PURCHASE OPTION: Lessee shall retain an option to
purchase the Premises at a price of One Million Seven Hundred
and Fifty Thousand Dollars ($1,750,000) for a period of two
(2) years beginning upon issuance of the final Notice of
Completion, excluding Lessee's office improvements (H-3 area)
pursuant to section 3.1.2. Terms and conditions of the
original lease agreement pertaining to options (Section 39)
are hereby incorporated.
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LESSOR: ADDRESS:
GUILLON BUSINESS PARK PROPERTIES, L.P. 0000 Xxxxxxxx Xxxx
Xxxxx, XX 00000
(000) 000-0000
_____________________________________
XXXXXXX X. XXXXXXX
MANAGING PARTNER
Dated: ______________________________
LESSEE:
ALTERNATIVE MATERIALS TECHNOLOGY 0000 Xxxxxxxx Xxxxxx
Xxxxx, XX 00000
(000) 000-0000
(000) 000-0000 (Fax)
_____________________________________
XXXXXXX X. XXXXXXX
PRESIDENT
Dated: ______________________________
_____________________________________
XXX XXXXXXX
SECRETARY/TREASURER/CFO
Dated: ______________________________
POLYMER SOLUTIONS, INC.
_____________________________________ Suite 410, Guinness Tower
XXXXXX X. XXXXX 0000 Xxxxxxxx Xxxxxx
XXXXXXXXX/XXX Xxxxxxxxx, XX X0X 0X0
(000) 000-0000
(000) 000-0000 (Fax)
Dated: ______________________________
Attachments: Exhibit "A-2" Building Plans
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