X.X. XXXXXX COMPANY
INVESTMENT REAL ESTATE
0000 Xxxx Xxxxxx Xxxx
Xxxxx Xxxxxxx, XX 00000
(000) 000-0000
Fax (000) 000-0000
SUBLEASE AGREEMENT
1. PARTIES.
This Sublease, dated July 1, 2001, is made between Xxxx X. and Xxxxxx X.
Xxxx ("Sublessor"), and Turbodyne Systems, Inc., a Nevada corporation
("Sublessee").
2. MASTER LEASE.
Sublessor is the lessee under a written lease dated September 1, 1989,
wherein Co-trustees of the Preissman and May Trusts ('Lessor") leased to
Sublessor the real property in the City of Carpinteria, County of Santa Xxxxxxx,
State of California, described as approximately 46,812 square feet along with
storage and garage buildings on approximately 3.17 acres of land commonly known
as 0000 Xxxxxxxxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxxx to include all rights to use
road easements to the property ("Master Premises"). Said lease has been amended
by the following amendments:
See ADDENDUM attached hereto and made a part hereof.
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said lease and amendments are herein collectively referred to as the "Master
Lease" and are attached hereto as Exhibit "A" and all terms of the "Master
Lease" and related amendments are to be considered an integral part of this
Sub-lease. In addition, the "Master Lease" shall dictate any conflicts.
3. PREMISES.
Sublessor hereby subleases to Sublessee on the terms and conditions set
forth in this Sublease the following portion of the Master Premises ("Premises")
the entire
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property including all buildings and exclusive use of all the land and all
rights to easements.
4. WARRANTY BY SUBLESSOR.
Sublessor warrants and represents to Sublessee that the Master Leases has
not been amended or modified except as expressly set forth herein, that
Sublessor is not now, and as of the commencement of the Term hereof will not be,
in default or breach of any of the provisions of the Master Lease, and that
Sublessor has no knowledge of any claim by Lessor that Sublessor is in default
or breach of any of the provisions of the Master Lease.
5. TERM.
The term of this Sublease shall commence on July 1, 2001 ("Commencement
Date"), or when Lessor consents to this Sublease (if such consent is required
under the Master Lease), whichever shall last occur, and end on January 30,
2005, ("Termination Date"), unless otherwise sooner terminated in accordance
with the provisions of this Sublease.
6. RENT.
6.1 Minimum Rent. Sublessee shall pay to Sublessor as minimum rent,
without deduction, setoff, notice, or demand, at 000 Xxxxx Xxxxxx, Xxx Xxxx
Xxxxxx, XX 00000. or such other place as Sublessor shall designate from time to
time by notice to Sublessee, the sum of Twenty Eight Thousand Eight Hundred
Forty and no/100 Dollars ($28,840.) per month, in advance on the first day of
each month of the first year of the Term. Sublessee shall pay to Sublessor upon
execution of this Sublease the sum of One Hundred Eighteen Thousand Seven
Hundred Sixty and 51/100 Dollars ($118,760.51) as rent for March 30, 2001 to
June 30, 2001 (see attached "EXHIBIT T" which includes late rent ($95,289.32),
late rent fees ($11,536.00), late tax payment fee ($1,240.19), attorney fees
($2,500) and annual insurance payment ($8,195.). In addition, the security
deposit (see Item #7) will be increased by $28,840. The security deposit and
the other abovementioned owed money will be paid out over four months as
outlined below.
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Payments will be made as follows to allow for Turbodyne to come current for
the back rent, late fees, late tax payment fee, attorney fees, annual insurance
payment and increased security deposit:
Payment Arrangement:
---------------------
July 30, 2001 $28,840 rent plus $35,000 plus $7,210 for increased
security deposit
($71,050 total)
August 20, 2001 $28,840 rent plus $35,000 plus $7,210 for increased
security deposit
($71,050 total)
September 20, 2001 $28,840 rent plus $35,000 plus $7,210 for increased
security deposit
($71,050 total)
October 20,2001 $28,840 rent plus $13,760.51 plus $7,210 for increased
security deposit
($49,810.51 total)
If the Term begins or ends on a day other than the first or last day of a month,
the rent for the partial months shall be prorated on a per diem basis.
Additional provisions:
See ADDENDUM attached hereto and made a part hereof.
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Sublessee's rent shall be based upon a current base rental figure of $.62
per sq. ft. for the entire 46,812 sq. ft. of the premises, which includes the
37,549 sq. ft. of the main building, the 6,113 sq. ft. of the storage area
attached to the main building and the 3,150 sq. ft. small
building to the rear of the property. The base rental figure shall be $28,840.
monthly based upon the current value of money in United States dollars plus any
additional cost of living increases outlined in the ADDENDUM, Item #3.
6.2 Operating Costs. Therefore, the Master Lease requires Sublessor to pay to
Lessor all or a portion of the expenses of operating the building and/or project
of which the Premises are a part ("Operating Costs"), including but not limited
to taxes, utilities, or Insurance, then Sublessee shall pay to Sublessor as
additional rent One Hundred percent (100%) of the amounts payable by Sublessor
for Operating Costs incurred during the Term. Such additional rent shall be
payable as and when Operating Costs incurred during the Term. Such additional
rent shall be payable as and when Operating Costs are payable by Sublessor to
Lessor. If the Master Lease provides for the payment by Sublessor of Operating
Costs on the basis of an estimate thereof, then as and when adjustments between
estimated and actual Operating Costs are made under the Master Lease, the
obligations of Sublessor and Sublessee hereunder shall be adjusted in a like
manner; and if any such adjustment shall occur after the expiration or earlier
termination of the Term, then the obligations of Sublessor and Sublessee under
this Subsection 6.2 shall survive such expiration or termination. Sublessor
shall, upon request by Sublessee, furnish Sublessee with copies of all
statements submitted by Lessor of actual or estimated Operation Costs during the
Term (2000-2001 Property Taxes - $24,803.86, Insurance - $8,195.).
6.3 Late Charge. If Sublessor does not receive payment within ten (10)
days of the date in which the rent is due, Sublessee shall pay a late charge
equal to ten percent (10%) of the overdue amount.
7. SECURITY DEPOSIT.
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Sublessee shall deposit with Sublessor upon execution of this Sublease (see
payment schedule in Item #6 above) the sum of Twenty Eight Thousand Eight
Hundred Forty Dollars ($28,840.*)
* (The initial security deposit of $20,000. was paid by American Appliance,
Inc. to Xxxx X. and Xxxxxx X. Xxxx and has been credited to Turbodyne
Technologies, Inc. by Xx Xxxxxx of American Appliance, Inc.)
as security for Sublessee's faithful performance of Sublessee's obligations
hereunder ("Security Deposit"). If Sublessee fails to pay rent or other charges
when due under this Sublease, or fails to perform any of its other obligations
hereunder, Sublessor may use or apply all or any portion of the Security Deposit
for the payment of any rent or other amount then due thereunder and unpaid, for
the payment of any other sum for which Sublessor may become obligated by reason
of Sublessee's default or breach, or for any loss or damage sustained by
Sublessor as a result of Sublessee's default or breach. If Sublessor so uses any
portion of the Security Deposit, Sublessee shall, within ten (10) days after
written demand by Sublessor, restore the Security Deposit to the full amount
originally deposited, and Sublessee's failure to do so shall constitute a
default under this Sublease. Sublessor shall not be required to keep the
Security Deposit separate from its general accounts, and shall have no
obligation or liability for payment of Interest on the Security Deposit. In the
event Sublessor assigns its interest in this Sublease, Sublessor shall deliver
to its assignee so much of the Security Deposit as is then held by Sublessor.
Within fourteen (14) days after the Term has expired, or Sublessee has vacated
the Premises, or any final adjustment pursuant to Subsection 6.2 hereof has been
made, whichever shall last occur, and provided Sublessee is not then in default
of any of its obligations hereunder, the Security Deposit, or so much thereof as
had not theretofore been applied by Sublessor, shall be returned to Sublessee or
to the last assignee, if any, of Sublessee's interest hereunder.
8. USE OF PREMISES.
The Premises shall be used and occupied only for The Corporate Headquarters
and related function of a research and development and manufacturing company and
for no other use or purposes.
8.01 Manner of Use. Lessee shall not cause or permit the Property to be
used in any way which constitutes a violation of any law, ordinance or
governmental regulation or order, which annoys or interferes with the rights of
other tenants or Sublessor, or which constitutes a nuisance or waste.
8.02 Hazardous Materials. Sublessee shall not cause or permit any hazardous
material to be generated, produced, brought upon, used, stored, treated or
disposed of in or about the Property by Sublessee, its agents, employees,
contractors, sub-sub-lessees, or invitees without the prior written consent of
the Sublessor.
8.03 Alterations, Additions and Improvements. Sublessee shall not make any
alterations, additions or improvements to the Property without Sublessor's prior
written consent.
8.04 Condition Upon Termination. Upon termination of the Sublease,
Sublessee shall surrender the Property to the Sublessor, broom clean and in the
same condition as received except for ordinary wear and tear.
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9. DAMAGE OR DESTRUCTION
9.01 Partial Damage to Property
(a) Sublessee shall notify Sublessor in writing immediately upon any damage
to the Property. If the Property is only partially damaged (i.e., less than 50%)
or remains tenantable (less than 50% of Sublessee's operations are materially
impaired) and if the insurance proceeds received by Sublessor (or Lessor) from
the insurance policies for the Property are sufficient to pay for the necessary
repairs, this Sublease shall remain in effect and Sublessor (or Lessor) shall
repair the damage as soon as reasonably possible.
(b) If the insurance proceeds received by Sublessor (or Lessor) are not
sufficient to pay the entire cost of repair, or if the cause of the damage is
not covered by the insurance policies which Sublessor (or Lessor) maintains,
Sublessor may elect either to (i) repair the damage as soon as reasonably
possible, in which case this Sublease shall remain in full force and effect or
(ii) terminate this Sublease as of the date the damage occurred. Sublessor shall
notify Sublessee within thirty (30) days of the receipt of notice of the
occurrence of the damage whether Sublessor elects to repair the damage or
terminate the Sublease.
(c) Substantial or Total Destruction. If the Property is substantially
or totally destroyed by any cause whatsoever (i.e., the damage to the Property
is greater than partial damage) and regardless whether Sublessor (or Lessor)
receives any insurance proceeds, this Sublease shall terminate as of the date
the destruction occurred. Notwithstanding the preceding sentence, if the
Property can be rebuilt within six (6) months after the date of destruction,
Sublessor (or Lessor) may elect to rebuild the property at Sublessor's (or
Lessor's own expense.
10. CONDEMNATION
10.01 If all or any portion of the Property is taken under the power of
eminent domain or sold under the threat of that power (all of which are called
"condemnation"), this Sublease shall terminate as to the part taken or sold on
the date the condemning authority takes title or possession, whichever occurs
first.
11. DEFAULTS; REMEDIES
11.01 Covenants and Conditions. Sublessee's performance of each of
Sublessee's obligations under this Sublease is a condition as well as a
covenant. Sublessee's right to continue in possession is conditioned upon such
performance.
11.02 Defaults. Sublessee shall be in material default under the Sublease:
(a) If Sublessee abandons the premises or if Sublessee's absence from the
Property results in the cancellation of any insurance policies for the Property.
(b) If Sublessee fails to pay rent or any other charge when due.
(c) If Sublessee fails to perform any of Sublessee's non-monetary
obligations under this Sublease for a period of thirty (30) days after written
notice from Sublessor.
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(d) If Sublessee makes a general assignment or general arrangement for the
benefit of creditors; or if a petition for adjudication of bankruptcy or for
reorganization is filed by or against the Sublessee and is not dismissed within
thirty (30) days ; or if a trustee or receiver is appointed to take possession
of substantially all of Sublessee's assets located at the Property or of
Sublessee's interest in this Sublease and possession is not restored within
thirty (30) days; or if substantially all of Sublessee's assets located at the
Property or of Sublessee's interest in this Sublease is subjected to attachment,
execution or other judicial seizure which is not discharged within thirty (30)
days. If a court of competent jurisdiction determines that any of the acts
described in this subparagraph is not a default under this Sublease, and a
trustee is appointed to take possession (or if Sublessee remains a debtor in
possession) and such trustee or Sublessee transfers Sublessee'' interest
hereunder, then Sublessor shall receive, as Additional Rent, the excess, if any
of the rent (or any consideration) paid in connection with such assignment or
sub-sublease over the rent payable by Sublessee under this Sublease.
11.03 Remedies. On the occurrence of any material default by
Sublessee, Sublessor may at any time hereafter, with or without notice or demand
and without limiting Sublessor in the exercise of any right or remedy which
Sublessor may have:
(a) Terminate Sublessee's right to possession of the Property by any
lawful means, in which case this Sublease shall terminate and Sublessee shall
immediately surrender possession of the Property to the Sublessor. In such
event Sublessor shall be entitled to recover from Sublessee all damages incurred
by Sublessor by reason of Sublessee's default, including (i) the worth at the
time of the award of the Base Rent, Additional Rent and other charges Which
Sublessor had earned at the time of the termination; (ii) the worth at the time
of the award of the amount by which the unpaid Base Rent, Additional Rent and
other charges with Sublessor would have earned after termination; until the time
of the award exceeds the amount of such rental loss that Sublessee proves
Sublessor could have reasonably avoided; (iii) the worth at the time of the
award of the amount by which the unpaid Base Rent, Additional Rent and other
charges which Sublessee would have paid for the balance of the Sublease Term
after the time of the award exceeds the amount of such rental loss that
Sublessee proves Sublessor could have reasonably avoided; and (iv) any other
amount necessary to compensate Sublessor for all the detriment proximately
caused by Sublessee's failure to perform its obligations under the Sublease or
which in the ordinary course of things would be likely to result therefrom,
including, but no limited to, any costs or expenses Sublessor incurs in
maintaining or preserving the Property after such default, the cost of
recovering possession of the Property, expenses of reletting, including
necessary renovation or alteration of the Property, Sublessor's reasonable
attorney's fees incurred in connection therewith, and any real estate commission
paid or payable. Lessor's exercise of any right or remedy shall not prevent it
from exercising any other right or remedy.
12. ASSIGNMENT AND SUBLETTING.
Sublessee shall not assign this Sublease or further sublet all or any part
of the Premises without the prior written consent of Sublessor (and the consent
of Lessor, if such is required under the terms of the Master Lease). Consent
shall not be unreasonably withheld. No assignment of the Sublease shall release
Sublessee or change Sublessee's primary responsibility to pay the rent, to
perform all other obligations of Sublessee under this Sublease or relieve
Sublessee of liability under this Sublease.
13. OTHER TERMS OF SUBLEASE.
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All applicable terms and conditions of the Master Lease are incorporated
into and made a part of this Sublease as if Sublessor were the lessor
thereunder, Sublessee the lessee thereunder, and the Premises the Master
Premises, except for the following:
See ADDENDUM attached hereto and made a part hereof.
Sublessee assumes and agrees to perform the lessee's obligations under the
Master Lease during the Term to the extent that such obligations are applicable
to the Premises, except that the obligation to pay rent to Lessor under the
Master Lease shall be considered performed by Sublessee to the extent and in the
amount rent is paid to Sublessor in accordance with Section 6 of this Sublease.
Sublessee shall not commit or suffer any act or omission that will violate any
of the provisions of the Master Lease. Sublessor shall exercise due diligence
in attempting to cause Lessor to perform its obligations under the Master Lease
for the benefit of Sublessee. If the Master Lease terminates, this Sublease
shall terminate and the parties shall be relieved of any further liability or
obligation under this Sublease, provided however, that if the Master Lease
terminates as a result of a default or breach by Sublessor or Sublessee under
this Sublease and/or the Master Lease, then the defaulting party shall be liable
to the non defaulting party for the damage suffered as a result of such
termination.
Notwithstanding the foregoing, if the Master Lease gives Sublessor any right to
terminate the Master Lease in the event of a partial or total damage,
destruction, or condemnation of the Master Premises or the building or project
of which the Master Premises are a part, the exercise of such right by Sublessor
shall not constitute a default or breach hereunder.
14. BROKER PARTICIPATION.
Sublessor and Sublessee warrant and represent that they have dealt with no
real estate broker in connection with this Sublease other than X.X. Xxxxxx
Company ("Broker") and that no broker is entitled to any commission on account
of this Sublease.
15. ATTORNEYS' FEES.
If Sublessor, Sublessee, or Broker shall commence an action against the
other arising out of or in connection with this Sublease, the prevailing party
shall be entitled to recover its costs of suit and reasonable attorney's fees.
16. INSURANCE POLICIES.
(a) Liability Insurance. During the sublease term, Sublessee shall maintain
a policy of commercial general liability insurance (sometimes known as broad
form general liability insurance) insuring Sublessee against liability for
bodily injury, property damage (including loss of property) and personal injury
arising out of the operation, use or occupancy of the Property. Sublessee shall
name Sublessor and Landlord as additionally insured under such policy. The
initial amount of such insurance shall be Five Million Dollars ($5,000,000. per
occurrence and shall be subject to periodic increase in an amount determined by
Sublessor and/or Landlord in Sublessor's and/or Landlord's reasonable discretion
based upon inflation, increased liability awards, recommendation of Sublessor's
or Landlord's professional insurance advisers and other relevant factors. The
liability insurance obtained by Sublessee under this Paragraph shall (i) be
primary and non-contributing; (ii) contain cross-liability endorsements; and
(iii) insure Sublessor and/or Landlord against Sublessee's performance under
Section 5.06 of the Master Lease (Indemnity). The amount and coverage of such
insurance shall not limit Sublessee's liability nor relieve Sublessee of
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any other obligation under this Sublease. Sublessor and/or Landlord may also
obtain comprehensive public liability insurance in an amount and with coverage
determined by Sublessor and/or Landlord insuring Sublessor and/or Landlord
against liability arising out of ownership, operation, use or occupancy of the
Property. The policy obtained by Sublessor and/or Landlord shall not be
contributory and shall not provide primary insurance.
(b) Property and Rental Income Insurance. During the Sublease term
Sublessor and/or Landlord shall maintain policies of insurance covering loss of
or damage to the Property in the full amount of its replacement value. Such
policy shall contain an Inflation Guard Endorsement and shall provide protection
against all perils mischief, special extended perils (all risk), sprinkler
leakage and any other perils which Sublessor and/or Landlord deems reasonably
necessary. Sublessor and/or Landlord shall not obtain insurance for Sublessee's
fixtures or equipment or building improvements installed by Sublessee on the
property. During the Sublease Term, Sublessor and/or Landlord shall also
maintain a rental income insurance policy with loss payable to Sublessor and/or
Landlord, in an amount equal to one year'' Base Rent, plus estimated real
property taxes and insurance premiums. Sublessee shall be liable for the
payment of any deductible amount under Sublessor and/or Landlord's or
Sublessee's insurance policies maintained pursuant to this Section in an amount
not to exceed Ten Thousand Dollars ($10,000.). Sublessee shall not do or permit
anything to be done which invalidates any such insurance policies.
(c) Payment of Premiums. Sublessee shall pay all premiums for the
insurance policies described in this Paragraph and (whether obtained by
Landlord, Sublessor or Sublessee) within fifteen (15) days after Sublessee's
receipt of a copy of the premium statement or other evidence of the amount due,
except Sublessor and/or Landlord shall pay all premiums for non-primary
comprehensive public liability insurance which Sublessor and/or Landlord elects
to obtain as provided in this Paragraph. If insurance policies maintained by
Sublessor and/or Landlord cover improvements on real property other than the
Property, Sublessor and/or Landlord shall deliver to Sublessee a statement of
the premium applicable to the Property showing in reasonable detail how
Sublessee's share of the premium was computed. If the Sublease Term expires
before the expiration of an insurance policy maintained by Sublessor and/or
Landlord, Sublessee shall be liable for the Sublessee's prorated share of the
insurance premiums. Before the Commencement Date, Sublessee shall deliver to
Sublessor and/or Landlord a copy of any policy of insurance which Sublessee is
required to maintain under this Section. At least thirty (30) days prior to the
expiration of any such policy, Sublessee shall deliver to Sublessor and/or
Landlord a renewal of such policy. As an alternative to providing a policy of
insurance, Sublessee shall have the right to provide a certificate of insurance,
executed by an authorized officer of the insurance company, showing that the
insurance which Sublessee is required to maintain under this Section is in full
force and effect and containing such other information which Sublessor and/or
Landlord reasonably requires.
(d) General Insurance Provisions.
(i) Any insurance which Sublessee is required to maintain under this
Sublease shall include a provision which requires the insurance carrier to give
Sublessor and Landlord 30 days' written notice prior to any cancellation or
modification of such coverage.
(ii) If Sublessee fails to deliver any policy, certificate or renewal
to Sublessor and Landlord required under this Sublease within the prescribed
time period or if any such policy is canceled or modified during the Sublease
Term without Sublessor's and Landlord's consent, Sublessor and/or Landlord may
obtain such insurance, in which
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case Sublessee shall reimburse Sublessor or Landlord for the cost of such
insurance within fifteen (15) days after receiving a statement that indicates
the cost of such insurance.
(iii) Sublessee shall maintain all insurance required under this
Sublease with companies holding a "General Policy Rating" of A-12 or better, as
set forth in the most current issue of "Best Key Rating Guide". Niether
Sublessor nor Landlord makes no representation as to the adequacy of such
insurance to protect Landlord's Sublessor's or Sublessee's interests.
Therefore, Sublessee shall obtain any additional property or liability insurance
which Sublessee deems necessary to protect Landlord, Sublessor and Sublessee.
(iv) Unless prohibited under any applicable insurance policies
maintained, Landlord, Sublessor and Sublessee each hereby waive any and all
rights of recovery against the other(s), or against the officers, employees,
agents or representatives of the other for loss or damage to its property or the
property of the others under its control, is such loss or damage is covered by
any insurance policy in force (whether or not described in this Sublease) at the
time of such loss or damage. Upon obtaining the required policies of insurance,
Landlord, Sublessor and Sublessee shall give notice to the insurance carriers of
this mutual waiver of subrogation.
17. NOTICES.
All notices and demands which may or are to be required or permitted to be
given by either party on the other hereunder shall be in writing. All notices
and demands by the Sublessor to Sublessee shall be sent by United States Mail,
postage prepaid, addressed to the Sublessee at the Premises, and to the address
herein below, or to such other place as Sublessee may from time to time
designate in a notice to the Sublessor. All notices and demands by the
Sublessee to Sublessor shall be sent by United States Mail, postage prepaid,
addressed to the Sublessor at the address set forth herein, and to such other
person or place as the Sublessor may from time to time designate in a notice to
the Sublessee.
To Sublessor: King Ventures, 000 Xxxxx Xx., Xxx Xxxx Xxxxxx, XX 00000.
To Sublessee: Turbodyne Systems, Inc., 0000 Xxxxxxxxxxx Xxxxxx, Xxxxxxxxxxx, XX
00000.
18. CONSENT BY LESSOR.
THIS SUBLEASE SHALL BE OF NO FORCE OR EFFECT UNLESS CONSENTED TO BY LESSOR
WITHIN 10 DAYS AFTER EXECUTION HEREOF. IF SUCH CONSENT IS REQUIRED UNDER THE
TERMS OF THE MASTER LEASE.
Date: Date: July 1, 2001
--------------------------------
Sublessor: Xxxx X. and Xxxxxx X. Xxxx Sublessee: Turbodyne Systems, Inc.
By: /s/ Xxxx X. Xxxx Xxxxx X. Xxxx By: /s/ Xxxxxx Xxxxxx
Title: ____________________ Title: Corporate President
By: _____________________ By: _____________________
Title: ____________________ Title: ____________________
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LESSOR'S CONSENT TO SUBLEASE
The undersigned ("Lessor"), lessor under the Master Lease, hereby consents to
the foregoing Sublease and addendum without waiver of any restriction in the
Master Lease concerning further assignment or subletting. Lessor certifies
that, as of the date of Lessor's execution hereof, Sublessor is not in default
or breach of any of the provisions of the Master Lease, and that the Master
Lease has not been amended or modified except as expressly set forth in the
foregoing Sublease.
Date: ____________________
Lessor: ____________________
By: ____________________
Title: ____________________
By: ____________________
Title: ____________________
Consult your advisors - This document has been prepared for approval by your
attorney. No representation or recommendation is made by X.X. Xxxxxx Company as
to the legal sufficiency or tax consequences of this document or the transaction
to which it relates. These are questions for your attorney.
In any real estate transaction, it is recommended that you consult with a
professional, such as a civil engineer, industrial hygienist or other person,
with experience in evaluating the condition of the property, including the
possible presence of asbestos, hazardous materials and underground storage
tanks.
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ADDENDUM TO THAT CERTAIN SUBLEASE DATED JULY 1, 2001 BY AND BETWEEN XXXX X. XXXX
AND XXXXXX X. XXXX, SUBLESSORS, AND TURBODYNE SYSTEMS, INC., SUBLESSEE, FOR THE
PROPERTY COMMONLY KNOWN AS 0000 XXXXXXXXXXX XXX, XXXXXXXXXXX, XXXXXXXXXX.
The "Master Lease" between Sublessors, as Lessee, and the owners of the building
in their capacity as Lessor is incorporated in its entirety by this sublease
except as follows:
1. The Sublessee shall be given occupancy of the premises on July 1, 2001.
Sublessee shall assume all of the responsibilities of the "Master Lease" and
Sublease. Monthly Sublease payments shall begin July 1, 2001.
2. The Sublease shall be for three (3) years and seven months (concurrent
with the "Master Lease").
3. The base rent payable under this Sublease shall be adjusted, upward only,
on December 1st of each year of the Master Lease by three-fourths of the annual
percentage increase of the Consumer Price Index of the U.S. Department of Labor
Bureau of Labor Statistics, CPI for all Urban Consumers over the index year
0000-00-000.
4. Sublessee and its agents shall be held harmless by Sublessor and incur no
responsibility for any and all hazardous materials that may be discovered on or
in the property and building which occurred prior to Sublessee's original
occupancy of the site on December 1, 1994.
5. Sublessee acknowledges that it is aware that the truck access to the rear
of the property is over an easement on the adjoining property. Sublessee
further acknowledges that it is aware of the requirements of the Master Lease in
the event the easement is lost for any reason. Therefore, Sublessee and
Sublessor agree to the following. In the event the easement is lost for any
reason, Sublessor shall immediately undertake to provide alternative access to
the rear of the property. Sublessee shall cooperate fully with Sublessor in
this effort and shall pay one-half of the cost, if any, to construct said
alternative access. Sublessor shall be responsible for said construction of an
alternative access and shall provide to Sublessee evidence of the construction
cost for Sublessee's review. In the event Sublessor does not immediately
undertake to provide said alternative access, then Sublessee may, upon thirty
(30) days written notice, assume construction responsibilities and charge
Sublessor for one hundred (100%) percent of the necessary improvement costs.
8. Performance of this Sublease shall be guaranteed by Turbodyne
Technologies, Inc., a Delaware corporation as well as Turbodyne Systems, Inc., a
Nevada corporation and by Xxxxxx X. Xxxxxx, personally. Financial information
including financial statements shall be provided to Sublessor for Sublessor's
review and approval prior to the execution of this lease by all parties.
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9. Should Turbodyne Systems, Inc. decide to sub-sublease any portion of this
property they agree to contract with X.X. Xxxxxx Company for brokerage leasing
services at the standard leasing agreements common in Santa Barbara, C.A.
Sublessor: Sublessee:
/s/ Xxxx X. Xxxx /s/ Xxxxxx Xxxxxx
_____________________ _____________________
Xxxx X. Xxxx Xxxxxx X. Xxxxxx, Corporate
President Turbodyne Systems, Inc.
/s/ Xxxxx X. Xxxx"
_____________________
Xxxxxx X. Xxxx
ATTACHMENTS: "MASTER LEASE" (Exhibit "A")
"EXHIBIT T"
"EXHIBIT T"
King Ventures
Turbodyne Open Balance
All Transactions
Type Date Num Memo Due Date Open Balance Amount
----------------------- ---------- ---------- ----------------- --------- ------------ ---------
Invoice 3/20/2001 971692 Rent 3/30/2001 8,769.32 28,840.00
Invoice 4/6/2001 971701 03/01 Late Fee 4/6/2001 2,884.00 2,884.00
Invoice 4/11/2001 971702 Prop Tax Late Fee 4/11/2001 1,240.19 1,240.19
Invoice 4/20/2001 971704 Rent 4/30/2001 28,640.00 28,840.00
Invoice 5/1/2001 971709 04/01 Late Fee 5/11/2001 2,884.00 2,884.00
Invoice 5/20/2001 971710 Rent 5/30/2001 28,640.00 28,840.00
Invoice 6/1/2001 971717 05/01 Late Fee 6/11/2001 2,884.00 2,884.00
Invoice 6/11/2001 971716 Attorney Fees 6/21/2001 1,500.00 1,500.00
Invoice 6/20/2001 971728 Rent 6/30/2001 28,640.00 28,840.00
Invoice 7/1/2001 971731 06/01 Late Fee 7/11/2001 2,884.00 2,884.00
Invoice 7/2/2001 971735 Prop Ins 7/12/2001 8,195.00 8,195.00
------------ ---------
Total Turbodyne, Inc. 117,160.51 137,831.19
---------- ----------
Total 7-UP BLDG 117,760.51 138,831.19
---------- ----------
TOTAL 117,760.51 138,831.19
========== ==========
Page 1
X.X. XXXXXX COMPANY
INVESTMENT REAL ESTATE
0000 Xxxx Xxxxxx Xxxx
Xxxxx Xxxxxxx, XX 00000
(000) 000-0000
Fax (000) 000-0000
July 1, 2001
PERSONAL AND CORPORATE GUARANTEE
1. Sublease - This agreement refers to the sublease dated July 1, 2001
--------
between Xxxx X. Xxxx and Xxxxxx X. Xxxx, Sublessors, and Turbodyne Systems,
Inc., a Nevada corporation, Sublessee, for the property located at 0000
Xxxxxxxxxxx Xxxxxx xx Xxxxxxxxxxx, XX. The sublease begins July 1, 2001 and
ends January 30, 2005. The monthly lease payments total $28,840. per month in
the seven months of the lease and then escalate with cost of living adjustments
in the remaining years of the lease.
2. The following entities agree to guarantee the performance of the
Sublease to insure that prompt monthly lease payments are made and that the
Sublessors are guaranteed full payment under this Sublease:
a. Turbodyne Technologies, Inc., a Delaware corporation
b. Turbodyne Systems, Inc., a Nevada corporation
c. Xxxxxx X. Xxxxxx (a personal guarantee)
3. The above mentioned Sublease is subject to and contingent upon the
Sublessors, Xxxx X. Xxxx and Xxxxxx X. Xxxx'x approval of the financial
statements of the three entities mentioned in #2 above prior to the execution of
the Sublease by all parties.
1
/s/ Xxxx X. Xxxx
_____________________ _____________________
Xxxx X. Xxxx, Sublessor Xxxxx Xxxxxx,
Corporate Secretary
Turbodyne Technologies, Inc.
Sublessee
/s/ Xxxxx X. Xxxx /s/ Xxxxxx Xxxxxx
_____________________ _____________________
Xxxxxx X. Xxxx, Sublessor Xxxxxx X. Xxxxxx
President
Turbodyne Systems, Inc.
Sublessee
/s/ Xxxxxx Xxxxxx
_____________________
Xxxxxx X. Xxxxxx, (personally)
2
