LEASE
THIS LEASE, is made AUGUST 24, 2000, between PINE CREEK PROPERTIES, a
California general partnership, "Landlord", whose address is X.X. Xxx 00000,
Xxxxx Xxxx, XX 00000, and XXXXXXXX.XXX "Tenant," whose address is 117 Xxxxxx,
Sebastopol.
This Lease is made with reference to the following facts and
objectives:
(a) Landlord is the owner of the premises described in Paragraph 1 and
Exhibit "A", which consists, generally, of APPROX. 9,800 SQ. FT. WAREHOUSE
(INCLUDES APPROX. 400 SQ. FT. OFFICE).
(b) Tenant is willing to lease the premises from Landlord pursuant to
the provisions stated in this Lease.
(c) Tenant wishes to lease the premises for the purposes of WAREHOUSE.
(d) Tenant has examined the premises and is fully informed of their
condition.
THE PARTIES HERETO AGREE AS FOLLOWS:
1. PREMISES. Landlord hereby leases to Tenant and Tenant hereby hires
and takes from Landlord, upon the terms and conditions herein set forth, the
real property located at 0000 XXXXXXXXXX XXX., XXXXXXXXXX, Xxxxxx Xxxxxx,
Xxxxxxxxxx, and more particularly described in Exhibit "A", together with the
building and other improvements located on the real property ("premises").
2. TERM.
(a) The term of this lease shall be FIVE (5 years) and shall commence
on the 1st day of SEPTEMBER, 2000, and end on the 31st day of AUGUST, 2005,
inclusive.
(b) If Landlord is unable to deliver possession of the premises Tenant,
by the date specified above for the commencement of the term of this Lease,
neither Landlord nor its agent shall be liable for any damage caused thereby,
nor shall this Lease thereby become void or voidable, and the term herein
specified shall, in such case, commence upon the date of delivery of possession
of the premises to Tenant and shall terminate FIVE (5) years thereafter. In such
event, Tenant shall not be liable for any rent until such time as Landlord shall
deliver possession of the premises to Tenant.
3. ACCEPTANCE OF PREMISES. Tenant's taking possession of the premises
on commencement of the term shall constitute Tenant's acknowledgment that the
premises are in good condition.
-1-
4. RENT. Tenant agrees to pay to Landlord, as rent for the premises the
sum of FIVE THOUSAND EIGHT HUNDRED EIGHTY Dollars ($5,880.00) per month, in
advance, on the first day of the term of this Lease and on the first day of each
calendar month thereafter during the term. Rent for any partial month shall be
prorated at the rate of 1/30th of the monthly rent per day. All installments of
rent shall be paid at the address to which notices to Landlord are given, or at
such other place as may be designated in writing, from time to time by Landlord,
in lawful money of the United States and without deduction or offset for any
cause whatsoever. In addition, Tenant agrees to pay to Landlord a late payment
of ten percent (10%) of the amount due for any payment received later than the
seventh day of each calendar month.
5. RENT ADJUSTMENTS. The monthly rent provided for in Paragraph 4
("minimum monthly rent") shall be subject to adjustment at the commencement of
the second year of the term and each year thereafter (the "adjustment date"), as
follows:
The base for computing the adjustment is the Consumer Price Index, All
Urban Consumers ("All Items") for the San Francisco-Oakland Metropolitan Area,
published by the United States Department of Labor, Bureau of Labor Statistics
("Index"), which is published for the month nearest the date of commencement of
the term ("Beginning Index"). If the index published nearest the adjustment date
("Extension Index") has increased or decreased over the Beginning Index, the
minimum monthly rent for the following year shall be set by multiplying the
minimum monthly rent set forth in Paragraph 4, by a fraction, the numerator of
which is the Extension Index and the denominator of which is the Beginning
Index. In no case shall the minimum monthly rent be less than the minimum
monthly rent set forth in Paragraph 4. On adjustment of the minimum monthly rent
as provided in this Lease, the parties shall immediately execute an amendment to
the Lease stating the new minimum monthly rent.
If the index is changed so that the base year differs from that used as
of the month immediately preceding the month in which the term commences, the
Index shall be converted in accordance with the conversion factor published by
the United States Department of Labor, Bureau of Labor Statistics. If the Index
is discontinued or revised during the term, such other government index or
computation with which it is replaced shall be used in order to obtain
substantially the same result as would be obtained if the Index had not been
discontinued or revised.
6. SECURITY DEPOSIT. On execution of this Lease, Tenant shall deposit
with Landlord the sum of FIVE THOUSAND EIGHT HUNDRED Dollars ($5,800.00) as a
security deposit for the performance by Tenant of the provisions of this Lease.
If Tenant is in default, Landlord can use the security deposit, or any portion
of it, to cure the default or to compensate Landlord for all damage sustained by
Landlord resulting from Tenant's default. Tenant shall immediately, on demand
pay to Landlord a sum equal to the portion of the security deposit expended or
applied by Landlord as provided in this paragraph so as to maintain the security
deposit in the sum initially deposited with Landlord. If Tenant is not in
default at the expiration or termination of this Lease, Landlord shall return
the security deposit to Tenant. Landlord's obligations with respect to the
security deposit are
-2-
those of a debtor and not a trustee. Landlord can maintain the security deposit
separate and apart from Landlord's general funds or can commingle the security
deposit with Landlord's general and other funds. Landlord shall not be required
to pay Tenant interest on the security deposit.
7. PERSONAL PROPERTY TAXES. Tenant shall pay before delinquency all
taxes, assessments, license fees, and other charges that are levied and assessed
against Tenant's trade fixtures or personal property installed or located in or
on the premises, and that become payable during the term. On demand by Landlord,
Tenant shall furnish Landlord with satisfactory evidence of these payments.
8. REAL PROPERTY TAXES. Landlord shall pay all real property taxes and
general and special assessments ("real property taxes") levied and assessed
against the premises, provided, however, that Lessee shall pay to Lessor any
increase in real property tax assessed by reason of Tenant's activities or
additional improvements placed upon the Premises by Lessee or at Lessee's
request.
9. USE. The premises are to be used as described in the Recitals of
this Lease, and for no other business or purpose without the prior written
consent of Landlord. Tenant shall be responsible for any required City, County,
State or Federal permits. No use shall be made or permitted to be made of the
premises, nor acts done in or on about the premises, which will in any way
conflict with any law, ordinance, rule or regulation affecting the occupancy or
use of the premises which has been or is subsequently enacted or promulgated by
any public authority, or which will increase the existing rate of insurance upon
the building, or cause a cancellation of any insurance policy covering the
building or any part thereof, nor shall Tenant sell, or permit to be kept, used
or sold in or about the premises, any article which may be prohibited by the
standard form of fire insurance policy. Tenant shall not commit, or suffer to be
committed, any waste upon the premises or, any public or private nuisance, or
other act of thing which may disturb the quiet enjoyment of any neighbor,
commercial or residential, nor any other tenant in the building, nor use any
apparatus, machinery or device in or about the premises which shall cause any
substantial noise or vibration, or which shall substantially increase the amount
of electricity or water, if any, agreed to be furnished or supplied under this
Lease. Tenant further agrees not to connect with electric wires or water or
other pipes any apparatus, machinery or device without the consent of Landlord.
If parking becomes an issue, Landlord shall assign specific parking spaces.
10. MAINTENANCE AND REPAIRS. Except as provided in Paragraphs 22 and
23, Tenant, at its cost, shall maintain the premises in good condition. Landlord
shall be responsible for roof, walls and floor repair maintenance. Landlord
shall not have any responsibility for general maintenance of the premises.
Tenant waives the provisions of Civil Code Sections 1941 and 1942, with respect
to Landlord's obligations for tenantability of the premises and Tenant's right
to make repairs and deduct the expenses of such repairs from rent.
11. ALTERATIONS. Except as provided in Paragraph 12, Tenant shall not
make any alterations to the premises without Landlord's consent. Unless
otherwise provided
-3-
by written agreement, all alterations shall be done either by or under the
direction of Landlord, but at the sole cost of Tenant, shall be the property of
Landlord, and shall remain on and be surrendered with the premises on expiration
or termination of the term; provided, however, that at Landlord's option, Tenant
shall, at Tenant's expense, when surrendering the premises, restore the same to
their original condition.
If Tenant makes any alterations to the premises, as provided in this
paragraph, the alterations shall not be commenced until two (2) days after has
received notice from Tenant stating the date the installation of the alterations
is to commence, so that Landlord can post and record an appropriate notice of
non-responsibility.
12. TRADE FIXTURES. Subject to the provisions of Paragraph 11 hereof,
Tenant may install and maintain its trade fixtures on the premises, provided
that such fixtures, by reason of the manner in which they are affixed, do not
become an integral part of the building or premises. Tenant, if not in default
hereunder, may at any time or from time to time during the term hereof, or upon
the expiration or termination of this Lease, alter or remove any such trade
fixtures so installed by Tenant. If not so removed by Tenant on or before the
expiration or termination of this Lease, Tenant, upon the request of Landlord so
to do, shall thereupon remove the same. Any damage to the premises caused by any
such installation, alteration or removal of such trade fixtures shall be
promptly repaired at the expense of the Tenant.
13. MECHANICS' LIENS. Tenant shall pay all costs for construction done
by it, or caused to be done by it, on the premises, including all required
permits, as permitted by this Lease. Tenant shall keep the premises free and
clear of all mechanics' liens resulting from construction done by or for Tenant.
Tenant shall have the right to contest the correctness or validity of
any such lien if, immediately on demand by Landlord, Tenant procures and records
a lien release bond issued by a corporation authorized to issue surety bonds in
California in an amount equal to one and one-half times the amount of the claim
of the lien. The bond shall meet the requirements of Civil Code Section 3143 and
shall provide for the payment of any sum that the claimant may recover on the
claim (together with costs of suit, if it recovers in the action).
14. AMERICANS WITH DISABILITIES ACT (ADA). If Tenant's use and/or
personnel requirements change after the granting of initial use permit which
would enact new ADA requirements, then Tenant shall at all times keep the
premises in compliance with the ADA and its supporting regulations, and all
similar federal, state or local laws, regulations and ordinances with respect to
this new use. If Landlord's consent would be required for alterations to bring
the premises into compliance, Landlord agrees not to unreasonably withhold its
consent.
15. HAZARDOUS MATERIALS ACKNOWLEDGMENT ENVIRONMENTAL REPRESENTATION AND
LIABILITY RELEASE. Tenant acknowledges that various materials utilized in the
construction of the Property may contain materials that have been or may in the
future be determined to be toxic, hazardous or
-4-
undesirable and may need to be specially treated, specially handled and/or
removed from the Property. Such substances may be above and below ground on the
Property or may be present on or in soils, water, building components or other
portions of the Property in areas that may or may not be accessible or
noticeable.
Tenant shall use and operate the premises, at all times during the term
hereof, under and in compliance with the laws of the State of California and in
compliance with all applicable environmental legal requirements.
For any contamination to Leased Property due to Tenant's use, Tenant
assumes full responsibility for the clean-up of such toxic hazardous or
undesirable material as required by current and future federal, state and local
laws and regulations. Tenant acknowledges that toxic wastes, hazardous materials
and undesirable substances problems can be extremely costly to correct and
Tenant relieves the Landlord from all liability related thereto due to Tenant's
use. Tenant therefore hereby agrees that they shall indemnify and defend and
hold the Landlord harmless from any claim, liability, damage, cost or expense,
including but not limited to court costs and attorneys' fees, arising out of or
in any way related to toxic waste, hazardous material and/or undesirable
substance affecting the Leased Property related to and caused by Tenant's use.
16. UTILITIES. Tenant shall make all arrangements for, and pay for all
utilities and services furnished to or used by it including, without limitation,
gas, electricity, water, sewer, telephone service, and trash collection, and for
all connection charges. If for any reason, any of these utilities or services
are paid for by Landlord on behalf of Tenant, then Tenant shall reimburse
Landlord upon receiving notice.
17. EXCULPATION OF LANDLORD. Landlord shall not be liable to Tenant for
any injury or damage that may result to any person or property in or about the
premises or the building which the premises are located, from any cause
whatsoever, including but not limited to injury or damage resulting from any
defects in the building, including roof leaks, or any equipment located therein,
or from fire, water, gas, oil, electricity or other cause or any failure in the
supply of same, or from the acts or neglect of any persons.
18. INDEMNIFY AND HOLD HARMLESS. Tenant agrees to indemnify and hold
Landlord harmless against all claims, and the expense of defending against such
claims, for injury or damage to persons or property occurring in or about the
premises or occurring outside the premises but resulting in whole or in part
from the act, failure to act, negligence or other fault of Tenant or its agents,
employees or invitees.
19. LIMITATION OF LANDLORD'S LIABILITY. Tenant agrees to look solely to
Landlord's interest in the building for the recovery of any judgement from
Landlord, it being agreed that Landlord shall never be personally liable for any
such judgement. The provision contained in the foregoing sentence is not
intended to, and shall not, limit any right the Tenant might otherwise have to
obtain injunctive relief against Landlord or Landlord's successors in interest
or any other action not involving the personal liability of Landlord to respond
in monetary damages from assets other than Landlord's interest in the building
or any
-5-
suit or action in connection with enforcement or collection of amounts which may
become owing or payable under or on account of insurance maintained by Landlord.
20. INSURANCE.
(a) Tenant, at its cost, shall maintain public liability and property
damage insurance with a combined single limit of liability of not less than
$1,000,000, insuring against all liability of Tenant and its authorized
representatives arising out of and in connection with Tenant's use or occupancy
of the premises. All public liability insurance, and property damage insurance
shall insure performance by Tenant of the indemnity provisions of Paragraph 18.
Both parties shall be named as additional insureds, and the policy shall contain
cross-liability endorsements.
(b) Not more frequently than three (3) years, if, in the opinion of
Landlord's lender or of the insurance broker retained by Landlord, the amount of
public liability and property damage insurance coverage at that time is not
adequate, Tenant shall increase the insurance coverage as required by either
Landlord's lender or Landlord's insurance broker.
(c) Tenant, at its cost, shall maintain on all its personal property,
Tenant's improvements, and alterations, in, on, or about the premises, a policy
of standard fire and extended coverage insurance, with vandalism and malicious
mischief endorsements, to the extent of at least ninety percent (90%) of their
full replacement value. The proceeds from any such policy shall be used by
Tenant for the replacement of personal property or the restoration of Tenant's
improvements or alterations. TENANT SHALL BE FINANCIALLY RESPONSIBLE FOR GLASS
BREAKAGE.
(d) Landlord shall maintain on the building and other improvements that
are a part of the premises, a policy of standard fire and extended coverage
insurance with vandalism and malicious mischief endorsements, to the extent of
at least ninety percent (90%) full replacement value.
(e) Tenant's obligation to pay the insurance costs, shall be prorated
for any partial year, at the commencement and expiration or termination of the
term.
(f) All insurance policies maintained by Tenant, under this paragraph,
shall contain a provision requiring thirty (30) days' written notice from the
insurance company to both parties and Landlord's lender, before cancellation or
change in the coverage, scope, or amount of any policy. Each policy, or a
certificate of the policy, together with evidence of payment of premiums, shall
be deposited with the other party at the commencement of the term, and on
renewal of the policy, not less than twenty (20) days before expiration of the
term of the policy.
21. WAIVER OF SUBROGATION. The parties release each other, and their
respective authorized representatives, from any claims for damage to any person,
or to the premises and to the fixtures, personal property, Tenant's improvements
and alterations of either Landlord or Tenant in or on the premises that are
caused by or result from the risks
-6-
insured against under any insurance policies carried by the parties and in force
at the time of any such damage.
Each party shall cause each insurance policy obtained by it to provide
that the insurance company waives all rights of recovery by way of subrogation
against either party in connection with any damage covered by any policy.
Neither party shall be liable to the other for any damage caused by fire or any
of the risks insured against under any insurance policy required by this Lease.
If any insurance policy cannot be obtained with a waiver of subrogation, or is
obtainable only by the payment of an additional premium charge above that
charged by insurance companies issuing policies without waiver of subrogation,
the party undertaking to obtain the insurance shall notify the other party of
this fact. The other party shall have a period of ten (10) days after receiving
the notice either to place the insurance with a company that is reasonably
satisfactory to the other party and that will carry the insurance with a waiver
of subrogation, or to agree to pay the additional premium if such policy is
obtainable at additional cost. If the insurance cannot be obtained or the party
in whose favor a waiver of subrogation is desired refuses to pay the additional
premium charged, the other party is relieved of the obligation to obtain a
waiver of subrogation rights with respect to the particular insurance involved.
22. DESTRUCTION. If the whole or any part of the premises shall be
destroyed by fire or other cause, or be so damaged thereby that they are
untenantable and cannot be rendered tenantable within one hundred twenty (120)
days from the date of such destruction or damage, or such damage or destruction
is not covered by any insurance required to be maintained under Paragraph 20
this Lease may be terminated by Landlord or Tenant by written notice to the
other. Within forty-five (45) days from date of such destruction or damage,
Landlord shall give written notice to Tenant as to whether or not the premises
will be rendered tenantable within one hundred twenty (120) days from the date
of such destruction or damage and whether such damage or destruction is
anticipated to be covered by the insurance required to be maintained under
Paragraph 16. In case the damage or destruction be not such as to permit
termination of the Lease as above provided, or neither Landlord nor Tenant
elects to terminate the Lease as above provided, Landlord shall within
reasonable time, render said premises tenantable, and a proportionate reduction
shall be made in the rent herein reserved corresponding to the time during which
and to the portion of the premises of which Tenant shall be deprived of
possession. The provisions of Subdivision 2 of Section 1932 of the California
Civil Code, and of Subdivision 4 of Section 1933 of that Code, shall not apply
to this Lease.
23. CONDEMNATION. Should the whole or any part of the premises be
condemned and taken by any competent authority for any public or quasi-public
use or purpose, all awards payable on account of such condemnation and taking
shall be payable to Landlord and Tenant hereby waives all interest in or claim
to said awards, or any part thereof. If the whole of the premises shall be so
condemned and taken, then this Lease shall terminate. If only a part of the
premises is condemned and taken and the remaining portion thereof is not
suitable for the purposes for which Tenant has leased said premises, this Lease
shall terminate. If only a part of the premises is condemned and taken and the
remaining portion thereof is suitable for the purposes for which Tenant has
leased said premises, this Lease shall continue,
-7-
but the rental shall be reduced in an amount proportionate to the value of the
portion taken as it related to the total value of the premises. Each party
waives the provisions of Code of Civil Procedure ss.1265.130 allowing either
party to petition the Superior Court to terminate this Lease in the event of a
partial taking of the premises.
24. ASSIGNMENT AND SUBLETTING. Except as provided in Paragraph 24(d)
hereof, Tenant shall not assign, mortgage or pledge this Lease, or any interest
therein, and shall not sublet the premises or any part thereof, or any right or
privilege appurtenant thereto, or allow any other person (the agents and
servants of Tenant excepted) to occupy or use the premises, or any portion
thereof, without the written consent of Landlord first had and obtained. A
consent to one assignment, mortgage pledge, subletting, occupation or use by any
other person shall not relieve the Tenant from any obligation under this Lease,
and shall not be deemed to be a consent to any subsequent assignment, mortgage,
pledge, subletting, occupation or use by another person. Any assignment,
mortgage, subletting, occupation or use without such consent shall be void, and
shall, at the option of Landlord, terminate this Lease.
(a) If the Tenant desires any assignment, mortgage, pledge or
subletting, occupation or use referred to in Paragraph 24, Tenant shall give
written notice to the Landlord giving the name and address of the proposed
assignee, mortgagee, pledgee, sublessee, occupier or user, and the price and
other terms of the proposed transaction. At the same time, Tenant shall, in
writing, tender by an offer to the Landlord the option to (i) reacquire the
premises for the same period and under the same terms as the proposed assignment
or sublease, or (ii) reacquire the premises for the same period but at a price
equal to the lease rent. If the Landlord accepts the offer, it shall do so by
mailing written notice of its acceptance to the Tenant within thirty (30) days
after the Tenant's offer is received by the Landlord. Tenant shall be entitled
to withdraw its notice of intent to assign, mortgage, pledge, sublet, occupy or
use, at any time until the Landlord accepts the Tenant's offer.
If only a portion of the premises would be affected by a sublease or
assignment the Landlord shall have the right to re-acquire the portion affected.
If the Landlord elects to reacquire under this provision the portion affected,
Tenant shall be required to provide without charge reasonable and appropriate
access to the portion affected and reasonable use of any common facilities.
(b) If Landlord does not choose to accept the Tenant's offer under
Subparagraph 24(a), but does consent to the proposed assignment, mortgage,
pledge, subletting, occupation or use referred to in Xxxxxxxxx 00, Xxxxxxxx
shall have the right to receive from the Tenant any profit realized by the
Tenant from charging a higher rent that the lease rent. Such profit shall be
measured by the difference between the lease rent and any rent received by the
Tenant, minus the Tenant's reasonable leasing and administrative costs related
to the assignment or subletting, and excess of building standards. For this
purpose, "rent received by the Tenant" shall include all sums paid under the
sublease of assignment, whether characterized as rent, additional rent, or any
other payment or consideration in respect of use or occupancy or in
reimbursement of the costs of leasehold improvements installed by the Tenant,
and whether paid in a lump sum or in periodic payments. In no event shall the
total
-8-
sums payable to the Landlord, including the lease rent and any additional
payments made by Tenant to Landlord as a result of the application of this
paragraph, be less than the lease rent.
(c) The provisions in Paragraphs 24(a) and (b) shall be binding on any
subtenant or assignee who desires to sub-sublet or sub-assign their interest,
and Landlord's actions with respect to one assignment, mortgage, pledge,
sublease, occupation or use shall not be deemed to limit the Landlord's options
under this Lease with respect to a subsequent assignment, mortgage, pledge,
sublease, occupation or use. Landlord's rights under Paragraphs 24(a) and (b)
shall prevail over any inconsistent language in any sublease or assignment to
which the Landlord consents and are reserved by the Landlord from the grant of
the Tenant's leasehold estate. Nothing herein shall be construed to require the
Landlord's consent to any assignment, mortgage, pledge, subletting, occupation
or use referred to in Paragraph 24 (so long as the Landlord's consent is not
unreasonably withheld). Any exercise of the Landlord's rights under Paragraphs
24(a) and (b) shall be deemed to be reasonable.
Failure of any subtenant or assignee to make any payments to Tenant
shall not affect the obligation of the Tenant to pay the lease rent or any other
obligation under the Lease owing to the Landlord. The provisions of any sublease
or assignment cannot be modified, nor may the sublease or assignment be
terminated other than in accordance with its terms, without the written consent
of the Landlord.
(d) Tenant shall have the right, without Landlord's consent, to assign
this Lease to a general or limited partnership if (1) Tenant is a general
partner and owns and retains not less than 51% of the partnership following the
assignment and (2) the partnership executes an agreement required by Landlord
assuming Tenant's obligations.
Tenant shall have the right, without Landlord's consent to assign this
Lease to a corporation if (1) Tenant owns and retains at least 51% of the
outstanding capital stock of the corporation and (2) the corporation executes an
agreement required by Landlord assuming Tenant's obligations.
25. INSOLVENCY AND RECEIVERSHIP. Either the appointment of a receiver
to take possession of all, or substantially all, of the assets of Tenant or a
general assignment by Tenant for the benefit of creditors, or any action taken
or suffered by Tenant under any insolvency or bankruptcy act, shall constitute a
breach of this Lease by Tenant.
26. DEFAULT AND RE-ENTRY. In the event of any breach of the terms and
provisions of this Lease by Tenant, or if Tenant's interest herein, or any part
thereof, be assigned or transferred without the written consent of Landlord,
either voluntarily or by operation of law, whether by judgement, execution,
death, receivership or any other means, or if Tenant vacates or abandons the
premises, which shall be conclusively presumed if Tenant leaves the premises
closed or unoccupied continuously for twenty (20) days, then in any such event,
Landlord, besides other rights or remedies it may have, shall have the immediate
right of re-entry and may remove all persons and property from the premises and
may store such property at the cost of and for the account and risk of Tenant.
-9-
Should Landlord elect to re-enter as herein provided, or should
Landlord take possession pursuant to legal proceedings or pursuant to any notice
provide for by law, it may either terminate this Lease or it may from time to
time, without terminating this Lease, re-let the premises, or any part thereof,
for such term or terms (which may be for a term extending beyond the term of
this Lease) and at such rental or rentals and upon such other terms and
conditions as Landlord, in its sole discretion, may deem advisable with the
right to make alterations and repairs to the premises.
Rents received by such Landlord from such re-letting shall be applied:
first, to the payment of any costs and expenses of such re-letting, including a
reasonable attorney's fee and any real estate commission actually paid, and any
costs and expenses of such alterations and repairs; second, to the payment of
any indebtedness, other than rent, due hereunder from Tenant to Landlord; third,
to the payment of rent due and unpaid hereunder; and the residue, if any, shall
be held by Landlord and applied in payment of future rent or other obligations
as the same may become due and payable hereunder. If rentals received from such
re-letting during any month be less than that to be paid during that month by
Tenant hereunder, Tenant shall pay any such deficiency to Landlord, and such
deficiency shall be calculated and paid monthly.
No such re-entry or taking possession of said premises by Landlord
shall be construed as an election on its part to terminate this Lease unless a
written notice of such intention be given to Tenant or unless the termination
thereof be decreed by a court of competent jurisdiction. Notwithstanding any
such re-letting without termination, Landlord may, at any time thereafter, elect
to terminate this Lease for such previous breach.
Should Landlord at any time terminate this Lease for any breach, and
thereafter seek relief pursuant to Section 1951.2 of the California Civil Code,
interest shall be allowed upon unpaid rent, for the purposes of Section
1951.2(b), at ten percent (10%) per annum or the maximum rate permitted by law,
whichever is greater. Any proof by Tenant under subparagraphs (2) or (3) of
subdivision (a) of Section 1951.2 of the California Civil Code, as to the amount
of rental loss that could be reasonably avoided, shall be made in the following
manner: Landlord and Tenant shall each select a licensed real estate broker in
the business of renting property of the same type and use as the leased premises
and in the same geographic vicinity and such two real estate brokers shall
select a third licensed real estate broker and the three licensed real estate
brokers so selected shall determine the amount of the rental loss that could be
reasonably avoided for the balance of the term of this Lease after the time of
award. The decision of the majority of said licensed real estate brokers shall
be final and binding upon the parties hereto.
27. WAIVER. The waiver by Landlord of any breach of any term, covenant,
or condition herein contained shall not be deemed to be a waiver of such term,
covenant or condition or of any subsequent breach of the same or any other term,
covenant or condition herein contained. The subsequent acceptance of rent
hereunder by Landlord shall not be deemed to be a waiver of any preceding breach
by Tenant of any term, covenant or condition of this Lease, other than the
failure of Tenant to pay the particular rental so
-10-
accepted, regardless of Landlord's knowledge of such preceding breach at the
time of acceptance of such rent.
28. REMOVAL OF PROPERTY. Whenever Landlord shall remove any property of
Tenant from the premises and store the same elsewhere for the account, and at
the expense and risk, of Tenant, as provided in Paragraph 22, hereof, and Tenant
shall fail to pay the cost of storing any such property after it has been stored
for a period of ninety (90) days or more, Landlord may sell any or all such
property at public or private sale, in such manner and at such times and places
as Landlord in its sole discretion, may deem proper, without notice to or demand
upon Tenant, for the payment of any part of such charges or the removal of any
such property, and shall apply the proceeds of such sale; first, to the cost and
expenses of such sale, including reasonable attorney's fees actually incurred;
second, to the payment of the cost of or charges for storing any such property;
third, to the payment of any other sums of money which may then or thereafter be
due to Landlord from Tenant under any of the terms hereof; and fourth, the
balance, if any, to Tenant.
29. WAIVER OF DAMAGES FOR RE-ENTRY. Tenant hereby waives all claims for
damages that may be caused by Landlord's re-entering and taking possession of
the premises or removing and storing the property of Tenant as herein provided,
and will save Landlord harmless from loss, costs or damages occasioned thereby,
and no such re-entry shall be considered or construed forcible entry.
30. SURRENDER. At the time of surrender, all improvements made by
Tenant to the premises shall be in compliance with all applicable building code
requirements.
31. ATTORNEY'S FEES. If either party becomes a party to any litigation
concerning this Lease, the premises, or the building or other improvements in
which the premises are located, by reason of any act or omission of the other
party or its authorized representatives, and not by any act or omission of the
party that becomes a party to that litigation or any act or omission of its
authorized representatives, the party that causes the other party to become
involved in the litigation shall be liable to that party for reasonable
attorney's fees and court costs incurred by it in the litigation.
If Landlord commences an action or incurs expenses against Tenant to
enforce any of the terms hereof or because of the breach by Tenant of any of the
terms hereof or for the recovery of any rent due hereunder or for the unlawful
detainer of such premises, Tenant shall pay to Landlord reasonable attorneys'
fees and expenses, and the right to such attorneys' fees and expenses shall be
deemed to have accrued from the commencement of such action and shall be
enforceable whether or not such action is prosecuted to judgment. If Tenant
breaches any terms of this Lease, Landlord may employ an attorney or attorneys
to protect Landlord's rights hereunder, and in the event of such employment
following any breach by Tenant, Tenant shall pay Landlord reasonable attorneys'
fees and expenses incurred by Landlord whether or not an action is actually
commenced against Tenant by reason of such breach.
32. LITIGATION AGAINST TENANT. Should Landlord, without fault on
Landlord's part, be made a party to any litigation instituted by or against
Tenant, or by or
-11-
against any person holding under or using the premises by license of Tenant, or
for the foreclosure of any lien for labor or material furnished to or for Tenant
or any such other person or otherwise arising out of or resulting from any act
or transaction of Tenant or of any such other person, Tenant covenants to pay to
Landlord the amount of any judgment rendered against Landlord or the premises or
any part thereof, and all costs and expenses, including an attorney's fees,
incurred by Landlord in or in connection with such litigation.
33. SUBORDINATION. Tenant agrees that this Lease shall be subject and
subordinate to any first mortgage, first trust deed or like encumbrance
heretofore or hereafter placed upon said premises or any part thereof, except
the Tenant's property or trade fixtures, and to any and all renewals,
modifications, consolidations, replacements, extensions or substitutions of any
first mortgage or like encumbrance. Such subordination shall be automatic,
without the execution of any further subordination agreement by Tenant. If,
however, a written subordination agreement is required by a mortgagee, Tenant
agrees to execute, acknowledge and deliver the same and in the event of failure
to do so, Landlord may, in addition to any other remedies for breach of covenant
hereunder, execute, acknowledge and deliver the same as the agent of Tenant, and
Tenant hereby irrevocably constitutes Landlord its attorney-in-fact for such
purpose.
34. WAIVER OF REDEMPTION BY TENANT, HOLDING OVER. Tenant hereby waives
for Tenant and all those claiming under Tenant, all right now or hereafter
existing to redeem the leased premises after termination of Tenant's right of
occupancy by order of judgment of any court or by any legal process or writ. Any
holding over after the expiration of the term of this lease, with the consent of
the Landlord, shall be construed to be a tenancy from month to month, and shall
be under the terms and conditions specified in this lease, so far as applicable,
and in such case rental shall be payable in the amount and at the time specified
in Paragraph 4 hereof. Any such holding over without Landlord's consent shall be
a breach of this lease and Tenant shall pay to Landlord, without affecting
Landlord's rights under the law or elsewhere under this lease for such a breach,
as liquidated damages in the amount equal to three (3) times the then current
minimum monthly rent under Paragraph 4 hereof for each month of holding over,
since Landlord and Tenant agree that fixing Landlord's actual damages if such
holding over occurs would be most difficult but that such an amount is a
reasonable approximation of what such actual damages would be.
35. ENTRY AND INSPECTION. Tenant will permit Landlord and its agents to
enter into and upon the premises at all reasonable times for the purpose of
inspecting the same, or for the purpose of protecting the interest therein of
Landlord or the Owner, or to post notices of non-responsibility, or to make
alterations or additions to the premises, including the erection of scaffolding,
props or other mechanical devices, or to provide any service provided by
Landlord to Tenant hereunder, without any rebate of rent to Tenant for any loss
of occupancy or quiet enjoyment of the premises, or damage, injury or
inconvenience thereby occasioned, and Tenant will permit Landlord, at any time
within one hundred eighty (180) days prior to the expiration of this Lease, to
bring upon the premises, for purposes of inspection or display, prospective
tenants thereof.
-12-
36. SALE OR TRANSFER OF PREMISES. If Landlord sells or transfers all or
any portion of the premises, Landlord, on consummation of the sale or transfer,
shall be released from any liability thereafter accruing under this Lease if
Landlord's successor has assumed in writing, for the benefit of Tenant,
Landlord's obligations under this Lease. If any security deposit or prepaid rent
has been paid by Tenant, Landlord can transfer the security deposit or prepaid
rent to Landlord's successor and on such transfer Landlord shall be discharged
from any further liability in reference to the security deposit or prepaid rent.
37. ATTORNMENT. Tenant shall attorn to any purchaser of the premises at
any foreclosure sale of private sale conducted pursuant to any security
instrument encumbering the premises, or to any grantee or transferee designated
in any deed give in lieu to foreclosure, provided that such party shall have
assumed the obligations of Landlord hereunder in writing.
38. SUCCESSORS AND ASSIGNS. Subject to the provisions hereof relating
to assignment, mortgaging, pledging and subletting, this Lease is intended to
and does bind the heirs, executors, administrators, successors and assigns of
any and all of the parties hereto.
39. TIME. Time is of the essence of this Lease.
40. NOTICES. All notices which Landlord or Tenant may be required, or
may desire, to serve on the other may be served, as an alternative to personal
service, by mailing the same, postage prepaid, and addressed as listed herein.
Any party may change its address for purposes of this Paragraph by giving the
other parties written notice of the new address in the manner set forth above.
41. CORPORATE AUTHORITY. If either party is a corporation, that party
shall deliver the other party on execution of this Lease a certified copy of a
resolution of its board of directors authorizing the officer that are authorized
to execute this Lease on behalf of the corporation.
42. CALIFORNIA LAW. This lease shall be construed and interpreted in
accordance with the laws of the State of California.
43. COMPLETE AGREEMENT. It is expressly agreed by the parties, as a
material consideration for the execution of this Lease, that there are, and
were, no verbal representation, understandings, stipulations, agreement of
promises pertaining thereto, not incorporated in writing herein, and it is
likewise agreed that this Lease should not be altered, waived, amended or
extended otherwise than as provided herein, except by writing signed by both
parties.
44. ADDENDA. Attached hereto is an addendum or addenda containing the
following Paragraphs 45 which constitute a part of this Lease. In the event that
any provisions of the addendum or addenda conflict with other provisions of the
Lease, the provisions of the addendum or addenda shall control and supersede the
other conflicting Lease provisions.
-13-
46. TENANT IMPROVEMENTS. Landlord to install black out windows and
turbine fans, make rear sliding door operational, and bring bathroom up to ADA
standards. Ensures zoning is acceptable for Zapp's occupancy needs and fire
codes.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease the
day and year first written above.
"Landlord" "Tenant:"
PINE CREEK PROPERTIES XXXXXXXX.XXX
/s/ Xxxx Xxxxx
--------------------------------- -------------------------------------
(signature) (date) (signature) (date)
--------------------------------- -------------------------------------
(signature) (date) (signature) (date)
-14-
E X H I B I T "A"
Lease Dated August 24, 2000
Between: Pine Creek Properties and Zapworld. Com
[Diagrammatic description of lease premises]
-15-
ADDENDUM TO LEASE
DATED: AUGUST 24, 2000
BETWEEN: PINE CREEK PROPERTIES AND
XXXXXXXX.XXX
Paragraph 45-- Acknowledgement of Floodplain.
Tenant specifically recognizes that the premises are located in a
floodplain area. Tenant acknowledges that Landlord shall not be liable to Tenant
for any injury to any person or property in or about the premises or the
building in which the premises are located, from any cause directly or
indirectly related to flooding or any collateral effects of flooding. Tenant
understands that Landlord does not carry flood insurance for Tenant's benefit.
Tenant further represents that it has had the advice of independent
counsel in negotiations for and preparation of this addendum or had been advised
of the right to such advise, that Tenant has read this addendum or had it read
and fully explained by counsel, and that Tenant understands this addendum.
-16-
