3. Terms of the Lease

The term of the lease to New Century Auto is 20 years, with options to renew for three additional 10-year terms. The lessee would pay a base rent of $100,000 in the first year, escalating to $218,550 in the twentieth year. The base rent would be adjusted upon exercise of each renewal option based on the then current fair rental value of the property, excluding lessee improvements.

The agreement provides that the lessee's activities must not interfere with the operation of the electrical transmission facilities that cross the site. New Century Auto would not be permitted to store hazardous substances on the site, and the company would be required to maintain at least a 17-foot clearance from all overhead electrical conductors. SCE also would require the lessee to maintain a 50-foot radius around all tower legs and a 10-foot radius around all steel and wood poles. The lessee would be responsible for obtaining all permits and approvals for construction, as well as any zoning changes or use permits required for the operation of a self-storage facility.

Under the lease, New Century Auto would be responsible for all personal property taxes and fees levied against the property and improvements, and would maintain comprehensive liability insurance, auto insurance and workers' compensation insurance. The company would indemnify SCE against all liability for damages or injury to persons or property not caused by SCE's negligent or willful misconduct.