EXHIBIT 10.11
COMMERCIAL LEASE
This lease is made between SMC Group, herein called Lessor, and Telenetics
Corporation, herein called Lessee.
Lessee hereby offers to lease from Lessor the premises situated in the City
of Lake Forest , County of Orange , State of California , described as the two
story industrial property located at the industrial complex at the corner of
Lake Forest Drive and Vista Terrace Drive (26772 Vista Terrace drive), upon the
following TERMS and CONDITIONS:
1. Term and Rent. Lessor demises the above premises for a term of 5 years,
commencing August 1, 1994 and terminating on July 31, 1999 or sooner as
provided herein at the annual rental of :
$42,000 for the first two years; and
$54,000 for the third and forth year ; and
$78,000 for the fifth year;
payable in equal installments in advance on the first day of each month for
that month's rental, during the term of this lease. All rental payments shall
be made to Lessor, at the address specified above.
2. Use. Lessee shall use and occupy the premises for conducting general
legitimate business of Telenetics Corporation. The premises shall be used for
no other purpose. Lessor represents that the premises may lawfully be used
for such purpose.
3. Care and Maintenance of Premises. Lessee acknowledges that the premises are
in good order and repair, unless otherwise indicated herein. Lessee shall, at
his own expense and at all times, maintain the premises in good and safe
condition, including plate glass, electrical wiring, plumbing and heating
installations and any other system or equipment upon the premises, and shall
surrender the same at termination hereof, in as good condition as received,
normal wear and tear excepted. Lessee shall be responsible for all repairs
required, excepting the roof, exterior walls, structural foundations, and:
4. Alterations. Lessee shall not, without first obtaining the written consent
of Lessor, make any alterations, additions, or improvements, in, to or about
the premises.
5. Ordinances and Statutes. Lessee shall comply with all statutes, ordinances
and requirements of all municipal, state and federal authorities now in
force, or which may hereafter be in force, pertaining to the premises,
occasioned by or affecting the use thereof by Lessee.
6. Assignment and Subletting. Lessee shall not assign this lease or sublet any
portion of the premises without prior written consent of the Lessor, which
shall not be unreasonably withheld. Any such assignment or subletting without
consent shall be void and, at the option of the Lessor, may terminate this
lease.
7. Utilities. All applications and connections for necessary utility services
on the demised premises shall be made in the name of Lessee only, and Lessee
shall be solely liable for utility charges as they become due, including
those for sewer, water, gas, electricity, and telephone services.
8. Entry and Inspection. Lessee shall permit Lessor or Lessor's agents to enter
upon the premises at reasonable times and upon reasonable notice, for the
purpose of inspecting the same, and will permit Lessor at any time within
sixty (60) days prior to the expiration of this lease, to place upon the
premises any usual "To Let" or "For Lease" signs, and permit persons desiring
to lease the same to inspect the premises thereafter.
9. Possession. If Lessor is unable to deliver possession of the premises at
the commencement hereof, Lessor shall not be liable for any damage caused
thereby, nor shall this lease be void or voidable, but Lessee shall not be
liable for any rent until possession is delivered. Lessee may terminate this
lease if possession is not delivered within 5 days of the commencement of
the term hereof.
10. Indemnification of Lessor. Lessor shall not be liable for any damage or
injury to Lessee, or any other person, or to any property, occurring on the
demised premises or any part thereof, and Lessee agrees to hold Lessor
harmless from any claim for damages, no matter how caused.
11. Insurance. Lessee, at his expense, shall maintain plate glass and public
liability insurance including bodily injury and property damage insuring
Lessee and Lessor with minimum coverage as follows: Lessee shall provide
Lessor with a Certificate of Insurance showing Lessor as additional insured.
The Certificate shall provide for a ten-day written notice to Lessor in the
event of cancellation or material change of coverage. To the maximum extent
permitted by insurance policies which may be owned by Lessor or Lessee,
Lessee and Lessor, for the benefit of each other, waive any and all rights
of subrogation which might otherwise exist.
12. Eminent Domain. If the premises or any part thereof or any estate therein,
or any other part of the building materially affecting Lessee's use of the
premise, shall be taken by eminent domain, this lease shall terminate on the
date when title vests pursuant to such taking. The rent, and any additional
rent, shall be apportioned as of the termination date, and any rent paid for
any period beyond that date shall be repaid to Lessee. Lessee shall not be
entitled to any part of the award for such taking or any payment in lieu
thereof, but Lessee may file a claim for any taking of fixtures and
improvements owned by Lessee, and for moving expenses.
13. Destruction of Premises. In the event of a partial destruction of the
premises during the term hereof, from any cause, Lessor shall forthwith
repair the same, provided that such repairs can be made within sixty (60)
days under existing governmental laws and regulations, but such partial
destruction shall not terminate this lease, except that Lessee shall be
entitled to a proportionate reduction of rent while such repairs are being
made, based upon the extent to which the making of such repairs shall
interfere with the business of Lessee on the premises. If such repairs
cannot be made within said sixty (60) days, Lessor, at his option, may make
the same within a reasonable time, this lease continuing in effect with the
rent proportionately abated as aforesaid, and in the event that Lessor shall
not elect to make such repairs which cannot be made within sixty (60) days,
this lease may be terminated at the option of either party. In the event
that the building in which the demised premises may be situated is destroyed
to an extent of not less than one-third of the replacement costs thereof,
Lessor may elect to terminate this lease whether the demised premises be
injured or not. A total destruction of the building in which the premises
may be situated shall terminate this lease.
14. Lessor's Remedies on Default. If Lessee defaults in the payment of rent, or
any additional rent, or defaults in the performance of any of the other
covenants or conditions hereof, Lessor may give Lessee notice of such
default and if Lessee does not cure any such default within 10 days, after
the giving of such notice (or if such other default is of such nature that
it cannot be completely cured within such period, if Lessee does not
commence such curing within such 20 days and thereafter proceed with
reasonable diligence and in good faith to cure such default), then Lessor
may terminate this lease on not less than 25 days' notice to Lessee. On the
date specified in such notice the term of this lease shall terminate, and
Lessee shall then quit and surrender the premises to Lessor, but Lessee
shall remain liable as hereinafter provided. If this lease shall have been
so terminated by Lessor, Lessor may at any time thereafter resume possession
of the premises by any lawful means and remove Lessee or other occupants and
their effects. No failure to enforce any term shall be deemed a waiver.
15. Security Deposit. Lessee shall deposit with Lessor on the signing of this
lease the sum of $3,500 as security deposit for the performance of Lessee's
obligations under this lease, including without limitation, the surrender of
possession of the premises to Lessor as herein provided. If Lessor applies
any part of the deposit to cure any default of Lessee, Lessee shall on
demand deposit with Lessor the amount so applied so that Lessor shall have
the full deposit on hand at all times during the term of this lease.
16. Tax Increase. In the event there is any increase during any year of the
term of this lease in the City, County or State real estate taxes over and
above the amount of such taxes assessed for the tax year during which the
term of this lease commences, whether because of increased rate or
valuation, Lessee shall pay to Lesser upon presentation of paid tax bills an
amount equal to 50 % of the increase in taxes upon the land and building in
which the leased premises are situated. In the event that such taxes are
assessed for a tax year extending beyond the term of the lease, the
obligation of Lessee shall be proportionate to the portion of the lease term
included in such year.
17. Common Area Expenses. In the event the demised premises are situated in a
shopping center or in a commercial building in which there are common areas,
Lessee agrees to pay his pro-rata share of maintenance, taxes, and insurance
for the common area.
18. Attorney's Fees. In case suit should be brought for recovery of the
premises, or for any sum due hereunder, or because of any act which may
arise out of the possession of the premises, by either party, the prevailing
party shall be entitled to all costs incurred in connection with such
action, including a reasonable attorney's fee.
19. Notices. Any notice which either party may, or is required to give, shall
be given by mailing the same, postage prepaid, to Lessee at the premises, or
Lessor at the address shown below, or at such other places as may be
designated by the parties from time to time.
20. Heirs, Assigns, Successors. This lease is binding upon and inures to the
benefit of the heirs, assigns and successors in interest to the parties.
21. Option to Renew. Provided that Lessee is not in default in the performance
of this lease, Lessee shall have the option to renew the lease for an
additional term of 12 months commencing at the expiration of the initial
lease term. All of the terms and conditions of the lease shall apply during
the renewal term except that the monthly rent shall be the sum of $7,500 .
The option shall be exercised by written notice given to Lessor not less
than 30 days prior to the expiration of the initial lease term. If notice is
not given in the manner provided herein within the time specified, this
option shall expire.
22. Subordination. This lease is and shall be subordinated to all existing and
future liens and encumbrances against the property.
23. Entire Agreement. The foregoing constitutes the entire agreement between
the parties and may be modified only by a writing signed by both parties.
The following Exhibits, if any, have been made a part of this lease before
the parties' execution hereof:
Signed this 30th day of July , 1994 .
For Telenetics Corporation For SMC Group
By /s/ XXXXXXX ARMANI By /s/ XXXXX XXXXXXXX
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Lessee Lessor
