EXHIBIT 10.17
MEMORANDUM OF LEASE
FOR VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, as
of November 8, 1999, the Lessor named below hereby leases to the Lessee named
below the right to use and occupy the Premises described below.
o Lessor. The name of the Lessor is: ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ as
Trustee of the ▇▇▇▇▇/▇▇▇▇▇▇▇ Family Trust dated 5/2/90.
o Lessee. The name of the Lessee is ▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, Inc., a
California corporation.
o Premises. The property (the "Premises") that is subject to
this Lease is located at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇ ▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ of Ventura, State of California. The
Premises consist of a freestanding office building of
approximately 5,100 square feet.
o Term. The Lease commenced on November 1, 1999, and will expire
no later than November 30, 2004.
o Rent. Lessee shall pay rent in the amount of $5,355.00 per
month for the Premises. The rent shall be adjusted in
accordance with the provisions of the Rent Adjustment(s) -
Standard Lease Addendum (AIREA Form RA-2-3/97E) described
below.
o Lease Agreement. Concurrent with the execution of this
Memorandum of Lease, the Lessor and the Lessee are entering
into a Standard Industrial/Commercial Single-Tenant Lease B
Net (AIREA Form STN-6-2/97E) (the "Lease Agreement") which
sets forth the terms and conditions upon which the Lessee is
entitled to occupy the Premises, and the Lease granted to
Lessee hereunder is subject to all of the terms and conditions
of that Lease Agreement, the provisions of which are
incorporated herein by reference.
o Additional Provisions. The Lease Agreement includes the
following additional provisions. Copies of these additional
provisions are attached as Exhibits to this Memorandum.
1.1 Rent Adjustment(s) - Standard Lease Addendum (AIREA Form
RA-2-3/97E). Under this Addendum, the rent payable for the Premises shall be
adjusted on the 13th month and each successive anniversary thereafter on the
base of the change in the Consumer Price Index of the Bureau of labor Statistics
the U.S. Department of Labor for CPI (Urban Wage Earners and Clerical Workers)
for Los Angeles, Anaheim, Riverside, All Items (1982-1984 = 100).
1.2 Option(s) to Extend - Standard Lease Addendum (AIREA Form
OE-2-3/97E). Under this Addendum, Lessee has two (2) options to extend the term
of the Lease for an additional period of sixty (60) months. The rent payable on
the commencement of any such extended term shall be the Market Rental Value of
the Premises as of the start of the extended term.
1.3 Right of First Refusal to Purchase - Standard Lease Addendum (AIREA
Form FR-2-3/97). Under this Addendum, Lessee has the right to purchase the
Premises in the event that Lessor proposes to sell the Premises to a third party
during the term of the Lease. On exercise of this right, Lessee shall purchase
the Premises at the price and on the terms and conditions offered by the third
party.
1.4 Rules and Regulations for Standard Office Lease - (AIREA Form 1984)
IN WITNESS WHEREOF, Lessor and Lessee have executed this Memorandum of
Lease as of November 8, 1999.
LESSOR: LESSEE:
▇▇▇▇▇/▇▇▇▇▇▇▇ Family Trust ▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, Inc.
Dated May 2, 1990
By: ________________________________ By: _____________________________
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, Trustee ▇▇▇▇▇ ▇▇▇▇▇, Chief Executive
Officer
Exhibit A: 1
RENT ADJUSTMENT(S)
STANDARD LEASE ADDENDUM
Dated: November 8, 1999
By and Between (Lessor): ▇▇▇▇▇/▇▇▇▇▇▇▇ Family Trust,
dated May 2, 1990
(Lessee): ▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, Inc. (a California
corporation)
Address of Premises: ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Paragraph 50
A. RENT ADJUSTMENTS:
The monthly rent for each month of the adjustment period(s) specified
below shall be increased using the method(s) indicated below:
(Check Method(s) to be Used and Fill in Appropriately)
(V) I. Cost of Living Adjustment(s) (COLA)
a. On (Fill in COLA Dates): On the 13th month of the lease and
each successive anniversary thereafter, including any extensions per paragraph
51 herein the Base Rent shall be adjusted by the change, if any, from the Base
Month specified below, in the Consumer Price Index of the Bureau of Labor
Statistics the U.S. Department of Labor for (select one): (V) CPI W (Urban Wage
Earners and Clerical Workers) or G CPI U (All Urban Consumers), for (Fill in
Urban Area): Los Angeles, Anaheim, Riverside. All Items (1982-1984= 100), herein
referred to as ACPI".
b. The monthly rent payable in accordance with paragraph
A.1.a., of this Addendum shall be calculated as follows: the Base Rent set forth
in paragraph 1.5 of the attached Lease, shall be multiplied by a fraction the
numerator of which shall be the CPI of the calendar month two months prior to
the month(s) specified in paragraph A.1.a. above during which the adjustment is
to take effect, and the denominator of which shall be the CPI of the calendar
month which is two months prior to (select one): (V) the first month of the term
of this Lease as set forth in paragraph 1.3 ("Base Month") or G (Fill in Other
"Base Month"): ________________________. The sum so calculated shall constitute
the new monthly rent hereunder, but in no event, shall any such new monthly rent
be less than the rent payable for the month immediately preceding the rent
adjustment. In no event shall the minimum annual adjustment be less than 2 1/2%
of the previous year's rental amount nor greater than 7% of previous year's
annual rental amount, including during any extensions of the lease per paragraph
51 of the Addendum.
c. In the event the compilation and/or publication of the CPI
shall be transferred to any other governmental department or bureau or agency or
shall be discontinued, then the index most nearly the same as the CPI shall be
used to make such calculation. In the event that the Parties cannot agree or
such alternative index, then the matter shall be submitted for decision to the
American Arbitration Association in accordance with the then rules of said
Association and the decision of the arbitrators shall be binding upon the
parties. The cost of said Arbitration shall be paid equally by the Parties.
Exhibit B: 2
(V) II. Market Rental Value Adjustment(s) (MRV)
a. On (Fill in MRV Adjustment Date(s): 61st month (first
option period) and 121st month (second option period) (See option to extend #51)
the Base Rent shall be adjusted to the "Market Rental Value" of the property as
follows:
1) Four months prior to each Market Rental Value Adjustment
date described above, the Parties shall attempt to agree upon what the new MRV
will be on the adjustment date. If agreement cannot be reached within thirty
days, then:
(a) Lessor and Lessee shall immediately appoint a
mutually acceptable appraiser or broker to establish the new MRV with the next
thirty days. Any associated costs will be split equally between the Parties, or
(b) Both Lessor and Lessee shall each immediately
make a reasonable determination of the MRV and submit such determination, in
writing, to arbitration in accordance with the following provisions:
(i) Within fifteen days thereafter, Lessor
and Lessee shall each select an G appraiser or (V) broker ("Consultant" - check
one) or there choice to act as an arbitrator. The two arbitrators so appointed
shall immediately select a third mutually acceptable Consultant to act as a
third arbitrator.
(ii) The Three arbitrators shall within
thirty days of the appointment of the third arbitrator reach a decision as to
what the actual MRV for the Premises is, and whether Lessor's or Lessee's
submitted MRV is the closest thereto. The decision of a majority of the
arbitrators shall be binding on the Parties. The submitted MRV which is
determined to be the closest to the actual MRV shall thereafter be used by the
Parties.
(iii) If either of the Parties fails to
appoint an arbitrator within the specified fifteen days, the arbitrator timely
appointed by one of them shall reach a decision on his or her own, and said
decision shall be binding on the Parties.
(iv) The entire cost of such arbitration
shall be paid by the party whose submitted MRV is not selected, ie. the one that
is NOT the closest to the actual MRV.
2) Notwithstanding the foregoing, the new MRV shall not be
less than the rent payable for the month immediately preceding the rent
adjustment.
b. Upon the establishment of each New Market Value:
1) the new MRV will become the new "Base Rent" for the purpose
of calculating any further Adjustments, and
2) the first month of each Market Rental Value term shall
become the new "Base Month" for the purpose of calculating any further
Adjustments.
B. NOTICE:
Unless specified otherwise herein, notice of any such adjustments,
other than Fixed Rental Adjustments, shall be made as specified in paragraph 23
of the Lease.
Exhibit B: 3
C. BROKER=S FEE:
The Brokers specified in paragraph 1.10 shall be paid a Brokerage Fee
for each adjustment above in accordance with paragraph 15 of the Lease.
Exhibit B: 4
OPTION(S) TO EXTEND
STANDARD LEASE ADDENDUM
Dated: November 8, 1999
By and Between (Lessor): ▇▇▇▇▇/▇▇▇▇▇▇▇ Family Trust,
dated May 2, 1990
(Lessee): ▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, Inc. (a California
corporation)
Address of Premises: ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Paragraph 51
A. OPTION(S) TO EXTEND:
Lessor hereby grants to Lessee the option to extend the term of this Lease for
two (2) additional sixty (60) month period(s) commencing when the prior term
expires upon each and all of the following terms and conditions.
(i) In order to exercise an option to extend, Lessee must give written
notice of such election to Lessor and Lessee must receive the same at lease 6
but not more than 9 months prior to the date that the option period would
commence, time being of the essence. If proper notification of the exercise of
an option is not given and/or received, such option shall automatically expire.
Options (if there are more than one) may only be exercised consecutively.
(ii) The provisions of paragraph 39, including those relating to
Lessee's Default set forth in paragraph 34 of this Lease, are conditions of this
Option.
(iii) Except for the provisions of this Lease granting an option or
options to extend the term, all of the terms and conditions of this Lease except
where specifically modified by this option shall apply.
(iv) This Option is personal to the original Lessee, and cannot be
assigned or exercised by anyone other than said original Lessee and only while
the original Lessee is in full possession of the Premises and without the
intention of thereafter assigning or subletting.
(v) The monthly rent for each month of the option period shall be
calculated as follows, using the method(s) indicated below: (Check Method(s) to
be Used and Fill in Appropriately)
(V) I. Cost of Living Adjustment(s) (COLA)
a. On (Fill in COLA Dates): (Refer to paragraph 50 of Addendum) the
Base Rent shall be adjusted by the change, if any, from the Base Month specified
below, in the Consumer Price Index of the Bureau of Labor Statistics of the U.S.
Department of Labor for (select one) G CPI W (Urban Wage Earners and Clerical
Workers) or G CPI U (All Urban Consumers), for (Fill in Urban Area):
All Items (1982-1984 = 100), herein referred to as ACPI".
b. The monthly rent payable in accordance with paragraph A.1.a. if this
Addendum shall be calculated as follows: the Base Rent set forth in paragraph
1.5 of the attached Lease, shall me multiplied by a
Exhibit B: 5
fraction the numerator of which shall be the CPI of the calendar month two
months prior to the month(s) specified in paragraph A.1.a. above during which
the adjustment is to take effect, and the denominator of which shall be the CPI
of the calendar month which is two months prior to (select one): G the first
month of the term of this Lease as set forth in paragraph 1.3 ("Base Month") or
G (Fill in Other "Base Month"): . The sum so calculated shall constitute the new
monthly rent hereunder but in no event, shall any such new monthly rent be less
than the rent payable for the month immediately preceding the rent adjustment.
c. In the event the compilation and/or publication of the CPI shall be
transferred to any other governmental department of bureau or agency of shall be
discontinued, then the index most nearly the same as the CPI shall be used to
make such calculation. In the event that the Parties cannot agree on such
alternative index, then the matter shall be submitted for decision to the
American Association in accordance with the then rules of said Association and
the decision of the arbitrators shall be binding upon the parties. The cost of
said Arbitration shall be paid equally by the Parties.
(V) II. Market Rental Value Adjustment(s) (MRV)
a. On (Fill in MRV Adjustment Date(s)) 61st month (first option
period), and 121st month (second option period) the Base Rent shall be adjusted
to the "Market Rental Value" of the property as follows:
1) Four months prior to each Market Rental Value Adjustment
Date described above, the Parties shall attempt to agree upon what the new MRV
will be on the adjustment date. If agreement cannot be reached, within thirty
days, then:
(a) Lessor and Lessee shall immediately appoint a
mutually acceptable appraiser or broker to establish the new MRV within the nest
thirty days. Any associated costs will be split equally between the Parties, or
(b) Both Lessor and Lessee shall each immediately
make a reasonable determination of the MRV and submit such determination, in
writing, to arbitration in accordance with the following provisions:
(i) Within fifteen days thereafter, Lessor and Lessee
shall each select an G appraiser or G broker ("Consultant" - check one) of the
choice to act as an arbitrator. The two arbitrators so appointed shall
immediately select a third mutually acceptable Consultant to act as a third
arbitrator.
(ii) The three arbitrators shall within thirty days
of the appointment of the third arbitrator reach a decision as to what the
actual MRV for the Premises is, and whether Lessor's or Lessee's submitted MRV
is the closest thereto. The decision of a majority of the arbitrators shall be
binding on the Parties. The submitted MRV which is determined to be the closest
to the actual MRV shall thereafter be used by the Parties.
Exhibit B: 6
(iii) If either of the Parties fails to appoint an
arbitrator within specified fifteen days, the arbitrator timely appointed by one
or them shall reach a decision on his or her own, and said decision shall be
binding on the Parties.
(iv) The entire cost of such arbitration shall be
paid by the party whose submitted MRV is not selected, ie. the one that is NOT
the closest to the actual MRV.
2) Notwithstanding the foregoing, the new MRV shall not be
less than the rent for the month immediately preceding the rent adjustment.
b. Upon the establishment of each New Market Rental Value:
1) the new MRV will become the new "Base Rent" for the purpose
of calculating any further Adjustments, and
2) the first month of each Market Rental Value term shall
become the new "Base Month" for the purpose of calculating any further
Adjustments. (See iv below).
G III. Fixed Rental Adjustment(s) (FRA)
The Base Rent shall be increased to the following amounts on the dates set forth
below:
On (Fill in FRA Adjustment Date(s)): The New Base Rent shall be:
_______________________________ $
_______________________________ $
_______________________________ $
_______________________________ $
IV. Cost of living adjustments
In no event shall annual adjustment in rent be less than 2.5% nor
greater than 7% of the previous year's rental amount.
B. NOTICE:
Unless specified otherwise herein, notice of any rental adjustments,
other than Fixed Rental Adjustments, shall be made as specified in paragraph 23
of the Lease.
C. BROKER'S FEE:
The Brokers specified in paragraph 1.10 shall be paid a Brokerage Fee
for each adjustment specified above in accordance with paragraph 15 of the
Lease.
7
RIGHT OF FIRST REFUSAL TO PURCHASE
STANDARD LEASE ADDENDUM
Dated: November 8, 1999
By and Between (Lessor): ▇▇▇▇▇/▇▇▇▇▇▇▇ Family Trust,
dated May 2, 1990
(Lessee): ▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, Inc. (a California
corporation)
Address of Premises: ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Paragraph 52
(a) Lessor shall not, at any time prior to the expiration of the term
of this Lease, or any extension thereof, sell the Premises, or any interest
therein without first giving written notice thereof to Lessee, which notice is
hereinafter referred to as "Notice of Sale".
(b) The Notice of Sale shall include the exact and complete terms of
the proposed sale and have attached thereto a copy of the bona fide offer and
counteroffer, if any, duly executed by both Lessor and the prospective
purchaser.
(c) For a period of twelve calendar days after receipt by Lessee of the
Notice of Sale, Lessee shall have the right to give written notice to Lessor or
Lessee's exercise of Lessee's right to purchase the Premises, the interest
therein proposed to be sold, or the property of which the Premises are a part,
of the same terms, price and conditions as set forth in the Notice of Sale. In
the event that Lessor does not receive written notice of Lessee's exercise of
the right herein granted within said twelve day period, there shall be a
conclusive presumption that Lessee has elected NOT to exercise Lessee's right
hereunder and Lessor may complete the sale to the prospective purchaser, on the
same terms set forth in the Notice of Sale.
(d) In the event that Lessee declines to exercise its right of first
refusal after receipt of the Notice of Sale, and, thereafter, Lessor and the
prospective purchaser modify by more then 5%, (i) the sales price, or (ii) the
amount of down payment, or if there is a material change in any seller financing
offered, or the event that the sale is not consummated within one hundred eighty
days of the date of the Notice of Sale, the Lessee's right of first refusal
shall reapply said transaction.
(e) In the event that Lessee declines to exercise its right of first
refusal after receipt of the Notice of Sale, and, thereafter, the proposed
transfer or sale is not consummated, the Lessee's right to first refusal shall
apply to any subsequent transaction. If, however, said transfer or sale is, in
fact, completed, the said right shall be extinguished and shall not apply to any
subsequent transactions.
(f) Notwithstanding the above, this right of first refusal is intended
to apply only to voluntary transfers involving third party transferees. This
right of first refusal shall not, therefore, apply: where the Premises are taken
by eminent domain or sold under threat of condemnation, to inter-family or
inter-ownership transfer, to transfers by Lessor to a trust created by Lessor,
or, if Lessor is a trust, to transfers to a trust beneficiary.
*(g) NOTE: This right of first refusal cannot be exercised: (i) during
the period commencing with the giving of any notice of Default and continuing
until said Default is cured, (ii) during the period of time any Rent is unpaid
(without regard to whether notice thereof is given Lessee), (iii) during the
time Lessee is in Breach of this Lease, or (iv) in the event that Lessee has
been given three (3) or more notices of Default, whether or not the Defaults are
cured during the twelve (12) month period immediately preceding the exercise of
the right of first refusal.
