UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Quarterly period ended: JUNE 30, 1996
-------------
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _____ to _____
Commission file number: 0-23804
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SIMPSON MANUFACTURING CO., INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
CALIFORNIA 94-3196943
------------------------------- ----------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4637 CHABOT DRIVE, SUITE 200, PLEASANTON, CA 94588
--------------------------------------------------
(Address of principal executive offices)
(Registrant's telephone number, including area code): (510)460-9912
--------------
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No
----- -----
The number of shares of the Registrant's Common Stock outstanding as of
June 30, 1996: 11,432,987
----------
<PAGE>
PART I -- FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
<TABLE>
<CAPTION>
SIMPSON MANUFACTURING CO., INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
JUNE 30, DECEMBER 31,
(UNAUDITED)
1996 1995 1995
------------ ------------ ------------
ASSETS
<S> <C> <C> <C>
Current assets
Cash and cash equivalents $ 12,875,191 $ 3,017,060 $ 6,955,788
Trade accounts receivable, net 30,521,398 26,235,797 20,732,880
Inventories 34,823,846 36,613,197 34,471,250
Deferred income taxes 2,493,455 2,418,455 2,750,455
Other current assets 950,650 1,175,633 1,986,446
------------ ------------ ------------
Total current assets 81,664,540 69,460,142 66,896,819
Net property, plant and equipment 25,656,317 21,171,478 26,420,004
Investments 1,355,336 680,546 1,357,457
Other noncurrent assets 1,774,287 839,401 1,967,779
------------ ------------ ------------
Total assets $110,450,480 $ 92,151,567 $ 96,642,059
============ ============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Notes Payable $ - $ - $ 20,037
Trade accounts payable 8,408,694 8,530,861 7,375,014
Accrued liabilities 3,426,457 2,921,089 3,386,527
Accrued profit sharing trust contributions 3,302,741 2,869,787 1,999,739
Accrued cash profit sharing and commissions 3,012,877 2,435,980 1,289,144
Income taxes payable 868,164 1,618,429 -
Accrued workers' compensation 809,272 842,125 842,125
------------ ------------ ------------
Total current liabilities 19,828,205 19,218,271 14,912,586
Deferred income taxes and long-term liabilities 100,783 66,783 176,783
------------ ------------ ------------
Total liabilities 19,928,988 19,285,054 15,089,369
------------ ------------ ------------
Commitments and contingencies (Note 6)
Shareholders' equity
Common stock 30,993,676 29,659,225 30,415,716
Retained earnings 59,572,621 43,322,420 51,142,268
Cumulative translation adjustment (44,805) (115,132) (5,294)
------------ ------------ ------------
Total shareholders' equity 90,521,492 72,866,513 81,552,690
------------ ------------ ------------
Total liabilities and shareholders' equity $110,450,480 $ 92,151,567 $ 96,642,059
============ ============ ============
</TABLE>
The accompanying notes are an integral part of these condensed
consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>
SIMPSON MANUFACTURING CO., INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
1996 1995 1996 1995
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net sales $ 51,759,610 $ 41,862,227 $ 95,217,057 $ 77,637,183
Cost of sales 31,508,992 25,980,437 59,864,983 50,016,203
------------ ------------ ------------ ------------
Gross profit 20,250,618 15,881,790 35,352,074 27,620,980
------------ ------------ ------------ ------------
Operating expenses:
Selling 5,462,644 4,013,825 9,972,678 7,872,554
General and administrative 6,225,481 5,186,399 11,353,926 9,020,769
11,688,125 9,200,224 21,326,604 16,893,323
------------ ------------ ------------ ------------
Income from operations 8,562,493 6,681,566 14,025,470 10,727,657
------------ ------------ ------------ ------------
Interest income (expense), net 97,356 (11,946) 150,883 53,380
------------ ------------ ------------ ------------
Income before income taxes 8,659,849 6,669,620 14,176,353 10,781,037
Provision for income taxes 3,492,000 2,777,000 5,746,000 4,479,000
------------ ------------ ------------ ------------
Net income $ 5,167,849 $ 3,892,620 $ 8,430,353 $ 6,302,037
============ ============ ============ ============
Net income per common share $ 0.44 $ 0.34 $ 0.72 $ 0.55
============ ============ ============ ============
Weighted average shares outstanding 11,747,506 11,412,303 11,691,673 11,416,541
============ ============ ============ ============
</TABLE>
The accompanying notes are an integral part of these condensed
consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>
SIMPSON MANUFACTURING CO., INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
SIX MONTHS ENDED
JUNE 30,
1996 1995
------------ ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 8,430,353 $ 6,302,037
------------ ------------
Adjustments to reconcile net income to net cash
provided by operating activities:
Gain on sale of capital equipment (15,827) (1,525)
Depreciation and amortization 2,875,084 2,581,550
Deferred income taxes 181,000 287,000
Equity in (income) losses of affiliates (33,000) 14,750
Changes in operating assets and liabilities, net of
effects of acquisitions:
Trade accounts receivable (9,807,467) (9,011,189)
Inventories (371,546) (5,456,160)
Other current assets 283,963 (194,302)
Other noncurrent assets (40,430) (49,166)
Trade accounts payable 1,033,680 2,188,461
Accrued liabilities 75,029 (38,105)
Accrued profit sharing trust contributions 1,303,002 1,149,183
Accrued workers' compensation (32,853) (55,000)
Accrued cash profit sharing and commissions 1,723,733 1,100,854
Income taxes payable 1,789,446 1,117,768
------------ ------------
Total adjustments (1,036,186) (6,365,881)
------------ ------------
Net cash provided by (used in)
operating activities 7,394,167 (63,844)
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (1,858,062) (2,808,549)
Proceeds from sale of equipment 41,560 -
Equity Investments (11,637) -
------------ ------------
Net cash used in investing activities (1,828,139) (2,808,549)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Principal payments on notes payable (20,037) -
Issuance of Company's common stock 373,412 78,860
------------ ------------
Net cash provided by financing activities 353,375 78,860
------------ ------------
Net increase (decrease) in cash and cash equivalents 5,919,403 (2,793,533)
Cash and cash equivalents at beginning of period 6,955,788 5,810,593
------------ ------------
Cash and cash equivalents at end of period $ 12,875,191 $ 3,017,060
============ ============
</TABLE>
The accompanying notes are an integral part of these condensed
consolidated financial statements.
<PAGE>
SIMPSON MANUFACTURING CO., INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Presentation
Interim Period Reporting
The accompanying unaudited interim condensed consolidated financial statements
have been prepared pursuant to the rules and regulations for reporting on Form
10-Q. Accordingly, certain information and footnotes required by generally
accepted accounting principles have been condensed or omitted. These interim
statements should be read in conjunction with the consolidated financial
statements and the notes thereto included in Simpson Manufacturing Co., Inc.'s
(the "Company's") 1995 Annual Report on Form 10-K (the "1995 Annual Report").
The unaudited quarterly condensed consolidated financial statements have been
prepared on the same basis as the audited annual consolidated financial
statements, and in the opinion of management, contain all adjustments
(consisting of only normal recurring adjustments) necessary to present fairly
the financial information set forth therein, in accordance with generally
accepted accounting principles. The year-end condensed consolidated balance
sheet data was derived from audited financial statements, but does not include
all disclosures required by generally accepted accounting principles. The
Company's quarterly results may be subject to fluctuations. As a result, the
Company believes the results of operations for the interim periods are not
necessarily indicative of the results to be expected for any future period.
Net Income Per Common Share
Net income per common share is computed based upon the weighted average number
of common shares outstanding. Common equivalent shares, using the treasury
stock method, are included in the per-share calculations for all periods since
the effect of their inclusion is dilutive.
The number of shares used in computing primary and fully diluted net income
per common share did not differ materially for the six months ended June 30,
1996 and 1995.
<PAGE>
2. Trade Accounts Receivable
Trade accounts receivable consist of the following:
<TABLE>
<CAPTION>
AT JUNE 30, DECEMBER 31,
1996 1995 1995
------------ ------------ ------------
<S> <C> <C> <C>
Trade accounts receivable $ 32,029,660 $ 27,887,698 $ 21,832,701
Allowance for doubtful accounts (1,053,448) (1,341,901) (931,321)
Allowance for sales discounts (454,814) (310,000) (168,500)
------------ ------------ ------------
$ 30,521,398 $ 26,235,797 $ 20,732,880
============ ============ ============
</TABLE>
3. Inventories The components of inventories consist of the following:
<TABLE>
<CAPTION>
AT JUNE 30, DECEMBER 31,
1996 1995 1995
------------ ------------ ------------
<S> <C> <C> <C>
Raw materials $ 12,206,175 $ 13,261,894 $ 13,424,828
In-process products 3,164,225 3,351,046 3,180,416
Finished products 19,453,446 20,000,257 17,866,006
------------ ------------ ------------
$ 34,823,846 $ 36,613,197 $ 34,471,250
============ ============ ============
</TABLE>
At June 30, 1996 and 1995, and December 31, 1995, the replacement value of
LIFO inventories exceeded LIFO cost by approximately $3,077,000, $3,179,000
and $4,178,000, respectively.
4. Net Property, Plant and Equipment
Net property, plant and equipment consists of the following:
<TABLE>
<CAPTION>
AT JUNE 30, DECEMBER 31,
1996 1995 1995
------------ ------------ ------------
<S> <C> <C> <C>
Land $ 2,065,682 $ 1,340,682 $ 2,065,682
Buildings and site improvements 10,382,076 5,268,537 10,379,901
Leasehold improvements 2,859,204 4,021,807 2,688,430
Machinery and equipment 42,271,683 35,613,597 40,393,578
------------ ------------ ------------
57,578,645 46,244,623 55,527,591
Less accumulated depreciation
and amortization (32,866,366) (27,988,937) (30,419,484)
------------ ------------ ------------
24,712,279 18,255,686 25,108,107
Capital projects in progress 944,038 2,915,792 1,311,897
------------ ------------ ------------
$ 25,656,317 $ 21,171,478 $ 26,420,004
============ ============ ============
</TABLE>
<PAGE>
5. Debt
As of June 30, 1996, the Company had no outstanding debt. The Company has
available to it credit facilities which consist of the following:
<TABLE>
<CAPTION>
Amount of
Facility
------------
<S> <C>
Revolving line of credit, interest at
bank's reference rate (at June 30,
1996, the bank's reference rate was
8.25%), expires June 1997 $ 11,267,205
Revolving line of credit, interest at
bank's prime rate (at June 30,
1996, the bank's prime rate was
8.25%), expires June 1997 4,000,000
Revolving term commitment, interest at
bank's prime rate (at June 30,
1996, the bank's prime rate was
8.25%), expires June 1997 4,000,000
Revolving lines of credit, interest rate
at the bank's base rate of interest plus
2%, expires August 1996 687,375
Standby letter of credit facilities 1,869,926
------------
Total credit facilities 21,824,506
Standby letters of credit issued and outstanding (1,869,926)
------------
Total credit available $ 19,954,580
============
</TABLE>
The Company has four outstanding standby letters of credit. Two of these
letters of credit, in the aggregate amount of $1,137,131, are used to support
the Company's self-insured workers' compensation insurance requirements while
the other two, in the aggregate amount of $732,795, are used to support
working capital needs of its European operations.
6. Commitments and Contingencies
Note 10 to the consolidated financial statements in the Company's 1995 Annual
Report provides information concerning commitments and contingencies relating
to pending or possible claims, legal actions and proceedings against the
Company and its subsidiaries. Management believes that the final resolution of
these matters, individually or in the aggregate, is not expected to have a
material adverse effect on the financial position of the Company.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
The following is a discussion and analysis of the consolidated financial
condition and results of operations for the Company for the three months ended
June 30, 1996 and 1995. The following should be read in conjunction with the
interim Condensed Consolidated Financial Statements and related Notes
appearing elsewhere herein.
Results of Operations for the Three Months Ended June 30, 1996, Compared
with the Three Months Ended June 30, 1995
Net Sales increased 23.6% from the second quarter of 1995 to the second
quarter of 1996. The increase reflected solid growth throughout the United
States, with particularly strong sales in the Northeast. This increase was
probably due, in part, to more construction and do-it-yourself activity which
were negatively affected by harsh winter weather early in the year. Simpson
Strong-Tie's sales increased 22.0% while Simpson Dura-Vent's sales increased
30.7%. Homecenter connector sales recovered from a slow start in the first
quarter of 1996 to become the fastest growing connector sales channel while
contractor distributor sales growth continued at an above average growth rate.
The sales growth rate of seismic and high wind products led Simpson Strong-Tie
sales with above average increases, while Simpson Dura-Vent sales of Direct-
Vent products, sold to OEMs and through Simpson Dura-Vent's distribution
system, continued to experience high growth, more than doubling in the second
quarter of 1996 over the same period in the prior year. Second quarter sales
were also positively influenced by sales at the businesses acquired in the
second half of 1995. The acquisitions accounted for 1.6% of the sales in the
second quarter of 1996 or approximately 8% of the aggregate increase in sales
as compared to the second quarter of 1995.
Income from operations increased 28.2% from $6,681,566 in the second quarter
of 1995 to $8,562,493 in the second quarter of 1996. This increase was
primarily due to higher gross margins and lower general and administrative
expenses as a percentage of sales, partially offset by increased selling
expenses. The increase in gross margins resulted from lower raw material costs
and better absorption of fixed overhead costs as a result of increased
production, partially offset by lower margins on the businesses acquired in
late 1995. Selling expenses increased 36.1% in total from $4,013,825 in the
second quarter of 1995 to $5,462,644 in the second quarter of 1996. This
increase was primarily due to increased advertising and promotional expenses,
including new retail displays as well as additional merchandisers hired to
better support the homecenter business. General and administrative expenses
increased 20.0% from $5,186,399 in the second quarter of 1995 to $6,225,481 in
the second quarter of 1996. This increase was primarily due to increased cash
profit sharing, as a result of higher operating profit, and higher personnel
and other overhead costs. The effective tax rate decreased from 41.6% in the
second quarter of 1995 to 40.3% in the second quarter of 1996, primarily due
to lower estimated effective state tax rates.
Results of Operations for the Six Months Ended June 30, 1996, Compared
with the Six Months Ended June 30, 1995
Net sales for the first six months of 1996 increased 22.6% over the same
period in 1995. The growth rate in sales was highest in the Western United
States. California sales increased at a rate below the average rate during the
first six months of 1996. Simpson Strong-Tie's sales increased 22.0% during
the first half of the year, while Simpson Dura-Vent's sales increased 25.1%.
Contractor distributors were the fastest growing connector sales channel. The
sales growth rate of seismic and high wind products led Simpson Strong-Tie
sales with above average increases, while Simpson Dura-Vent sales of Direct-
Vent products continued to experience high growth.
Income from operations increased 30.7% from $10,727,657 in the first half of
1995 to $14,025,470 in the first half of 1996. This increase was primarily due
to higher gross margins, partially offset by increased selling, general and
administrative expenses. The increase in gross margins resulted from lower raw
material costs and better absorption of fixed overhead costs as a result of
increased production, partially offset by lower margins on businesses acquired
in late 1995. Selling expenses increased 26.7% in total from $7,872,554 in the
first half of 1995 to $9,972,678 in the first half of 1996. This increase was
primarily due to increased advertising and promotional expenses, including new
retail displays as well as additional merchandisers hired to better support
the homecenter business. General and administrative expenses increased 25.9%
from $9,020,769 in the first half of 1995 to $11,353,926 in the first half of
1996. This increase was primarily due to increased cash profit sharing, as a
result of higher operating profit, higher personnel and other overhead costs,
and an increase in the Company's provision for possible losses on delinquent
accounts. The effective tax rate decreased from 41.5% in the first half of
1995 to 40.5% in the first half of 1996, primarily due to lower estimated
effective state tax rates.
<PAGE>
Liquidity and Sources of Capital
As of June 30, 1996, working capital was $61.8 million as compared to $50.2
million at June 30, 1995, and $52.0 million at December 31, 1995. The
principal components of the increase in working capital from December 31,
1995, include an increase in trade accounts receivable, which increased to
support the higher level of sales and seasonal buying programs. Offsetting
these increases were increases in accrued cash profit sharing and commissions,
income taxes payable, as a result of higher operating and taxable income,
respectively, and trade accounts payable. In addition, accrued contributions
to the Company's profit sharing trust increased, as compared to June 30, 1995,
principally due to the increase in the number of employees as well as an
overall increase in salaries and wages upon which they are based. This
increase in working capital combined with net income and noncash expenses,
such as depreciation and amortization, resulted in the increase in cash and
cash equivalents of $5.9 million from operating activities. As of June 30,
1996, the Company had unused credit facilities available of nearly $20.0
million.
In its investing activities, the Company used $1.9 million in cash to purchase
capital equipment, a rate substantially below that of the first six months of
1995. The Company plans to increase its purchases of capital equipment in the
second half of 1996 in order to expand its capacity.
Financing activities provided an additional $0.4 million in cash primarily as
a result of the issuance of Common Stock upon the exercise of stock options by
current and former employees. There were no borrowings outstanding on long-
term debt as of June 30, 1996.
The Company believes that cash generated by operations and borrowings
available under its existing credit agreements will be sufficient for the
Company's working capital needs and planned capital expenditures through 1996.
Depending on the Company's future growth, it may become necessary to secure
additional sources of financing.
<PAGE>
PART II -- OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
The Company is involved in various legal proceedings and other matters arising
in the normal course of business. In the opinion of management, none of such
matters when ultimately resolved will have a material adverse effect on the
Company's financial position or results of operations.
ITEM 2. CHANGES IN SECURITIES.
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
The Annual Meeting of Shareholders ("Annual Meeting") was held on May 14,
1996. The following seven nominees were reelected as director by the votes
indicated:
<TABLE>
<CAPTION>
TOTAL VOTES TOTAL VOTES
FOR EACH WITHHELD FROM
NAME DIRECTOR EACH DIRECTOR
------------------------- ------------ -------------
<S> <C> <C>
Earl F. Cheit 10,731,036 400
Thomas J Fitzmyers 10,731,026 410
Stephen B. Lamson 10,731,026 410
Alan R. McKay 10,731,036 400
Sunne Wright McPeak 10,730,275 1,161
Barclay Simpson 10,730,997 439
Barry Lawson Williams 10,731,036 400
</TABLE>
The following proposal was also adopted at the Annual Meeting by the vote
indicated:
<TABLE>
<CAPTION>
BROKER
PROPOSAL FOR AGAINST ABSTAIN NON-VOTE
---------------------------------- ----------- --------- --------- ---------
<S> <C> <C> <C> <C>
To ratify the appointment of
Coopers & Lybrand L.L.P. as
independent auditors of the
Company for 1996 10,728,690 690 2,056 -
</TABLE>
<PAGE>
ITEM 5. OTHER INFORMATION.
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
<TABLE>
<CAPTION>
a. Exhibits.
EXHIBIT
NO DESCRIPTION
------- -----------------------------------------------------------
<S> <C>
10.1 Lease Agreement, dated June 25, 1996, between Simpson
Strong-Tie Company Inc. and Stone Mountain Industrial
Park, Inc.
10.2 Amendment to Letter of Credit, dated May 31, 1996, between
Simpson Holdings, Inc. and Wells Fargo Bank, N.A.
10.3 Amendment to Letter of Credit, dated June 20, 1996, between
Simpson Manufacturing Co., Inc. and Union Bank
11 Statements re computation of earnings per share
27 Financial Data Schedule, which is submitted electronically
to the Securities and Exchange Commission for information
only and not filed.
</TABLE>
b. Reports on Form 8-K
No reports of Form 8-K were filed during the quarter for which this
report is filed.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
SIMPSON MANUFACTURING CO., INC.
-----------------------------------
(Registrant)
DATE: August 13, 1996 By: /s/ Stephen B. Lamson
--------------- -----------------------
Stephen B. Lamson
Chief Financial Officer
EXHIBIT 10.1
----------------
LEASE AGREEMENT
THIS LEASE, made this 25 day of June, 1996, by and between Stone Mountain
Industrial Park, Inc., a Georgia Corporation, hereinafter referred to as
"Lessor"; and Simpson Strong-Tie Company, Inc., a California Corporation,
hereinafter referred to as "Lessee";
WITNESSETH:
Premises
1. The Lessor, for and in consideration of the rents, covenants, agreements,
and stipulations hereinafter mentioned, reserved, and contained, to be paid,
kept and performed by the Lessee, has leased and rented, hereby does lease
and rent, to the Lessee, and said Lessee hereby agrees to lease and take
upon the terms and conditions which hereinafter appear, the following
described property (hereinafter called "Premises"):
74,587 square foot office/warehouse facility located at 8275 Forshee Drive
in Westside Industrial Park, Jacksonville, Florida situated in Section 27,
Township 1 South, Range 25 East, Duval County Florida, being a portion of
Unit 1, Westside Industrial Park Subdivision as recorded in Plat Book 46,
page 84A-E of the Public Records of Duval County, Florida, and being more
particularly described on Exhibit "A" Legal Description and Exhibit "B"
Building 34 Site Plan attached hereto by this reference and incorporated
herein.
This Lease is subject to all encumbrances, easements, covenants and
restrictions of record and to the Declaration of Covenants, Restrictions,
and Easements for Westside Industrial Park.
Term
2. To have and to hold for a term of five (5) years, said term to begin on
the 15th day of October, 1996 and to end at midnight on the 14th day of
October, 2001.
Rental
3. Lessee shall pay to Lessor monthly "Base Rent" of $*(See "Rental
Schedule" Paragraph 34 of the Addendum to Lease herewith attached and
incorporated herein) due on the first day of each month, in advance, without
offset or demand, commencing on October 15, 1996. In the event Lessee fails
to pay the rent or any other payment called for under this Lease within ten
(10) days of the time period specified, Lessee shall pay a late charge equal
to five percent (5%) of the unpaid amount, which late charge shall be paid
with the required payment.
<PAGE>
Utility Bills
4. Lessee shall place utility bills of all types in its name and shall pay
same, along with all assessments pertaining to the Premises, including, but
not limited to, water and sewer, natural gas, electricity, fire protection
and sanitary pick up bills for the Premises, or used by Lessee in connection
therewith. If Lessee does not pay same, Lessor may pay the same and such
payment shall be added to and treated as additional rental of the Premises.
If this Lease is for a multi-tenant building, water and sewer charges shall
be accounted for as provided in Paragraph 33 herein below.
Mortgagee's Rights
5. Lessee's rights shall be subject to any bona fide mortgage or deed to
secure debt which is now, or may hereafter be, placed upon the Premises by
Lessor, and Lessee agrees to execute and deliver such documentation as may
be required by any such mortgagee to effect any subordination within ten
(10) days of receipt of a request for such execution.
Maintenance and Repairs by Lessee
6. Lessee shall not allow the Premises to fall out of repair or
deteriorate, and, at Lessee's own expense, Lessee shall keep and maintain
said Premises, including paving, lawn maintenance and landscaping, in good
order and repair, except portions of the Premises to be repaired by Lessor
under terms of Paragraph 7 below. Lessee also agrees to keep all systems
pertaining to water, fire protection, drainage, sewer, electrical, heating,
ventilation, air conditioning and lighting in good order and repair, and
agrees to return same to Lessor at the expiration of this Lease or renewal
hereof in good operating condition. The Lessee covenants and agrees that
during the term of this Lease and for such further time as the Lessee, or
any person claiming under it, shall hold the Premises or any part thereof,
it shall not cause the estate of the Lessor in said Premises to become
subject to any lien, charge or encumbrance whatsoever, it being agreed that
the Lessee shall have no authority, express or implied, to create any lien,
charge or encumbrance upon the estate of the Lessor in the Premises.
Repairs by Lessor
7. Lessor agrees to keep in good repair the roof and exterior walls,
exclusive of painting, exclusive of all glass and exclusive of all exterior
doors. Lessor gives to Lessee exclusive control of Premises and shall be
under no obligation to inspect said Premises. Lessee shall promptly notify
Lessor of any damage covered under this paragraph, and Lessor shall be under
no duty to repair unless it receives notice of such damage.
Modifications and Alterations to the Premises
8. No modification or alterations to the building on the Premises or
openings cut through the roof are allowed without prior written consent of
Lessor. In the event any such modifications or alterations are performed,
same shall be completed in accordance with all applicable codes and
regulations.
Return of Premises
9. Lessee agrees to return the Premises to Lessor, at the expiration or
prior termination of this Lease, broom clean and in as good condition and
repair as when first received, natural wear and tear, damage by storm, fire,
lightning, earthquake or other casualty alone excepted. Lessee agrees to
remove its personal property from the Premises at the expiration or prior
termination of this Lease.
<PAGE>
Destruction of or Damage to Premises
10. If Premises are totally destroyed by storm, fire, lightning, earthquake
or other casualty, this Lease shall terminate as of the date of such
destruction, and rental shall be accounted for as between Lessor and Lessee
as of that date. If Premises are damaged, but not wholly destroyed by any of
such casualties, rental shall abate in such proportion as use of Premises
has been destroyed, and Lessor shall restore Premises to substantially the
same conditions as before damage as speedily as practicable, whereupon full
rental shall recommence; provided further, however, that if the damage shall
be so extensive that the same cannot be reasonably repaired and restored
within six (6) months from date of the casualty, then either Lessor or
Lessee may cancel this Lease by giving written notice to the other party
within thirty (30) days from the date of such casualty. In the event of such
cancellation, rental shall be apportioned and paid up to the date of such
casualty.
Indemnity
11. Lessee agrees to indemnify and save harmless the Lessor against all
claims for injuries to persons or damages to property by reason of the use
or occupancy of the Premises, the improvements installed by lessee on the
Premises or the failure or cessation of services to the Premises, and all
expenses incurred by Lessor because of such injuries or occupancy, including
attorneys' fees and court costs.
Governmental Orders
12. Lessee agrees, at its own expense, to promptly comply with all
requirements of any legally constituted public authority made necessary by
reason of Lessee's use or occupancy of Premises or operation of its
business. Lessor agrees to promptly comply with any such requirements if not
made necessary by reason of Lessee's occupancy or operation of the Premises.
It is mutually agreed, however, between Lessor and Lessee, that if in order
to comply with such requirements, the cost to Lessor or Lessee, as the case
may be, shall exceed a sum equal to one year's rent (as measured by the year
in which the requirements arise), then Lessor or Lessee who is obligated to
comply with such requirements is privileged to terminate this Lease by
giving written notice of termination to the other party, which termination
shall become effective sixty (60) days after receipt of such notice, and
which notice shall eliminate necessity of compliance with such requirement
by party giving notice unless party receiving such notice of termination
shall, before termination becomes effective, pay to party giving notice all
cost of compliance in excess of one year's rent, or secure payment of such
sum in manner satisfactory to party giving notice. Notwithstanding any
provisions or limitations in this paragraph to the contrary, Lessee shall be
responsible for any and all costs and expenses arising from any violations
of environmental laws or regulations caused by Lessee's activities or
occupancy of the Premises. Further, Lessee's option to terminate this Lease
due to the cost of compliance with environmental laws or regulations shall
only be available to Lessee if the law or regulation in question was enacted
after the date of this Lease.
<PAGE>
Condemnation
13. If the whole of the Premises, or such portion thereof as will make
Premises unusable for the purpose herein leased, shall be condemned by any
legally constituted authority for any public use or purpose, or sold under
threat of condemnation, then, in any of said events the term hereby granted
shall cease from the time when possession or ownership thereof is taken by
public authorities and rental shall be accounted for as between Lessor and
Lessee as of that date. Such termination, however, shall be without
prejudice to the rights of either Lessor or Lessee to recover compensation
and damage caused by condemnation from the condemnor. It is further
understood and agreed that neither the Lessee, nor Lessor, shall have any
rights in any award made to the other by any condemnation.
Assignment
14. Lessee may not assign this Lease, or any interest thereunder, or sublet
the Premises in whole or in part without the prior express written consent
which consent shall not be unreasonably withheld of Lessor and without
giving prior written notice to Lessor of intent to assign or sublease.
Subtenants or assignees shall become liable directly to Lessor for all
obligations of Lessee hereunder, without relieving Lessee's liability.
Lessee agrees not to assign or sublease Premises to any one who will create
a nuisance or trespass, nor use the Premises for any illegal purpose; nor in
violation of any valid regulations of any governmental body; nor in any
manner to vitiate the insurance. Lessee further agrees that if such
subtenant or assignee is required to pay a rental amount greater than the
rental amount required to be paid by Lessee hereunder, then Lessor shall be
entitled to receive and shall be paid such increased amount. Upon any such
sublease or assignment, Lessee shall provide Lessor with copies of any and
all documents pertaining to such sublease or assignment.
<PAGE>
Hazardous Substances
15. Lessee will not use or suffer the use (by Lessee or other person or
entity), of the premises as a landfill or as a dump for garbage or refuse,
or as a site for storage, treatment, or disposal of hazardous wastes,
hazardous substances, or toxic substances (defined as "hazardous waste" or
hazardous substance" under Section 1004 of the Federal Conservation and
Recovery Act, 42 U.S.C. sec. 6801 et seq., or Section 101 of the Comprehensive
Environmental Responses, Compensation, and Liability Act, 42 U.S.C. sec. 9601
et seq. or under any other applicable laws); Lessee shall not permit hazardous
or toxic waste, contaminants, asbestos, oil, radioactive or other material,
the removal of which is required or the maintenance or storage of which is
prohibited, regulated, or penalized by any local, state, or federal agency,
authority, or governmental unit, to be brought onto the Premises or if so
brought or found located thereon, shall cause the same to be immediately
removed, unless same complies with all applicable laws, and Lessee's
obligation to so remove shall survive the termination of this Lease; Lessee
will not use or suffer the use of the Premises in any manner other than in
full compliance with all applicable federal, state and local environmental
laws and regulations; Lessee warrants and represents that it has not
received any notice from a governmental agency for violation of any
environmental laws and regulations and, if such notice is received, Lessee
immediately shall notify Lessor orally and in writing; Lessee shall
indemnify, defend, and hold Lessor harmless from and against any and all
costs, damages, and expenses (including, without limitation, environmental
compliance or response costs, costs for all remedial action and/or damage to
third parties, attorneys' fees and court costs at both trial and appellate
levels, and damages for business interruption and any lost profits)
resulting, directly or indirectly, from any environmental contamination
caused by Lessee or Lessee's agent, employees or invitee of the Premises or
any misstatement or misrepresentation of facts concerning the matters
recited in this paragraph. In addition, at the end of the term of this Lease
or earlier termination hereof, Lessee, upon a reasonably based request by
the Lessor, shall cause, at Lessee's expense, an environmental study to be
conducted of the Premises by a person or firm approved by Lessor to ensure
that no hazardous wastes, hazardous substances or other such materials have
been stored, handled, treated or disposed of on the Premises during the term
of this Lease in violation of any applicable law.
Removal of Fixtures
16. Lessee may (if not in default hereunder) prior to the expiration of
this Lease, or any extension hereof, remove all fixtures and equipment which
Lessee has placed in Premises, provided Lessee repairs all damages to
Premises caused by such removal. Provided, however, Lessee shall not remove,
under any circumstances, the following: heating, ventilating, air
conditioning, plumbing, electrical and lighting systems and fixtures or dock
levelers. In the event this Lease is terminated for any reason, any property
remaining in or upon the Premises may be deemed to become property of the
Lessor and Lessor may dispose of same as it deems proper with no liability
to Lessor and no obligation to Lessee.
<PAGE>
Default; Remedies
17. It is mutually agreed that in the event: (A) the rent herein reserved
is not paid at the time and place when and where due and Lessee fails to pay
said rent within ten (10) days after written demand from Lessor; (B) the
Premises shall be deserted or vacated; (C) the Lessee shall fail to comply
with any term, provision, condition, or covenant of this Lease, other than
the payment of rent, and shall not cure such failure within twenty (20) days
after notice to the Lessee of such failure to comply; (D) Lessee causes any
lien to be placed against the Premises and does not cure same within twenty
(20) days after notice from Lessor to Lessee demanding cure, in any of such
events, Lessor shall have the option at once, or during continuance of such
default or condition to do any of the following, in addition to, and not in
limitation of any other remedy permitted by law or by this Lease:
(1) Terminate this Lease, in which event Lessee shall immediately surrender
the Premises to Lessor. Lessee agrees to indemnify Lessor for all loss,
damage and expense which Lessor may suffer by reason of such termination,
whether through inability to relet the Premises, through decrease in rent,
through incurring court costs, actual attorneys' fees or other costs in
enforcing this provision or otherwise;
(2) Lessor, as Lessee's agent, without terminating this Lease, may
terminate Lessee's right of possession, and, at Lessor's option, enter upon
and rent Premises at the best price obtainable by reasonable effort, without
advertisement and by private negotiations and for any term Lessor deems
proper. Lessee shall be liable to Lessor for the deficiency, if any, between
Lessee's rent hereunder and the price obtained by Lessor on reletting and
for any damage, actual attorneys' fees or expenses incurred by Lessor in
enforcing its rights under this provision.
(3) Lessor also retains the right to apply for and obtain a dispossessory
action against Lessee and to hold Lessee liable for all costs incident to
seeking such dispossessory action, including actual attorneys' fees and
court costs.
Pursuit of any of the foregoing remedies shall not preclude pursuit of any
other remedies herein provided or any other remedies provided by law. Lessor
shall have the duty to mitigate any possible damages which may be incurred
pursuant to any such default by Lessee except in the event Lessee deserts or
vacates the Premises without prior notification to Lessor. Any notice in
this provision may be given by Lessor or its attorney.
Entry for Carding, Etc.
18. Lessor may card Premises "For Lease" or "For Sale" ninety (90) days
before the termination of this Lease. Lessor may enter the Premises at
reasonable hours during the term of this Lease to exhibit same to
prospective purchasers or tenants and to make repairs required of Lessor
under the terms hereof, or to make repairs to Lessor's adjoining property,
if any.
Effects of Termination of Lease
19. No termination of this Lease prior to the normal ending thereof, by
lapse of time or otherwise, shall affect Lessor's right to collect rent for
the period prior to termination thereof.
<PAGE>
No Estate in Land
20. This contract shall create the relationship of landlord and tenant
between Lessor and Lessee; no estate shall pass out of Lessor; Lessee has
only a possessory interest, not subject to levy and sale, and not assignable
by Lessee except as provided in Paragraph 14 above.
Holding Over
21. If Lessee remains in possession of Premises after expiration of the
term hereof, with Lessor's acquiescence and without any express agreement of
parties, Lessee shall be a month-to-month tenant upon all the same terms and
conditions as contained in this Lease, except that the rental rate shall
become one and one-half times the amount in effect at the end of said term
of this Lease; and there shall be no renewal of this Lease by operation of
law. Such month-to-month tenancy shall only require thirty (30) days notice
by either party to the other to terminate such tenancy and Lessee's right of
possession.
Rights Cumulative
22. All rights, powers and privileges conferred hereunder upon parties
hereto shall be cumulative but not restrictive to those given by law.
Notices
23. Any notice given pursuant to this Lease shall be in writing and sent by
certified mail, return receipt requested, or by reputable overnight courier
to:
(a) Lessor in care of Stone Mountain Industrial Park, Inc., 5830 E. Ponce
DeLeon Avenue, Stone Mountain, Georgia 30083, or such other address as
Lessor may hereafter designate in writing to Lessee.
(b) Lessee in care of Simpson Strong-Tie Company, Inc., 1720 Couch Drive,
McKinney, Texas 75069, or such other address as Lessee may hereafter
designate in writing to Lessor.
Any notice sent in the manner set forth above shall be deemed sufficiently
given for all purposes hereunder on the day said notice is deposited in the
mail or with the courier.
Waiver of Rights
24. No failure of Lessor to exercise any power given Lessor hereunder, or to
insist upon strict compliance by Lessee with its obligations hereunder, and
no custom or practice of the parties at variance with the terms hereof shall
constitute a waiver of Lessor's right to demand exact compliance with the
terms hereof.
Time of Essence
25. Time is of the essence in this Lease.
<PAGE>
Definitions
26. "Lessor" as used in this Lease shall include Lessor, its heirs,
representatives, assigns, and successors in title to the Premises. "Lessee"
shall include Lessee, its heirs and representatives, successors, and if this
Lease shall be validly assigned or sublet, shall include also Lessee's
assignees or sub-lessees, as to Premises covered by such assignment or
sublease. "Lessor" and "Lessee" include male and female, singular and
plural, corporation, partnership or individual, as may fit the particular
parties.
Exterior Signs
27. Lessee is given permission to erect its customary sign used to
identify itself on the front entrance glass of the Premises provided any such
sign by Lessee shall be subject to and in conformity with all applicable laws,
zoning ordinances and building restrictions or covenants of record and must
be approved by Lessor, based on the scaled drawing provided by Lessee,
before installation. In the event a sign is erected by Lessee without
Lessor's consent, Lessor shall have the right to remove said sign and charge
the cost of such removal to Lessee as additional rent hereunder. Except upon
prior written consent from Lessor, in no event shall Lessee utilize any
portable or vehicular signs at the Premises. On or before termination of
this Lease Lessee shall remove any sign thus erected, and shall repair any
damage or disfigurement, and close any holes, caused by such removal.
Ad Valorem Taxes
28. Lessee shall pay to Lessor monthly in advance concurrent with other
rentals hereunder $ 2,921.00 for ad valorem taxes. Lessor will pay all ad
valorem taxes and during each year of the Lease Term herein granted, or any
renewal hereof, Lessee, as additional rent shall reimburse Lessor for all
sums paid by Lessor for the ad valorem taxes for the Premises in excess of
the total amount paid by Lessee herein. Upon being notified by Lessor,
Lessee shall remit such payment within thirty (30) days in the same manner
as rent. A per diem apportionment shall apply for any year within the Lease
Term which is less than twelve (12) full months.
Use of Premises and Insurance
29. (A) Premises shall be used for office, warehousing, manufacturing &
distribution of Lessee's products purposes. Premises shall not be used for
any illegal purposes, nor in any manner to create any nuisance or trespass,
nor in any manner to vitiate the insurance, based on the above purposes for
which the Premises are leased.
(B) Lessor will carry, at Lessor's expense, "All Risk" Insurance Coverage on
the Premises in an amount not less than $1,231,859 or the full insurable
value, whichever is greater. The term "full insurable value" shall mean the
actual replacement cost, excluding foundation and excavation costs, as
determined by Lessor. Lessee shall pay to Lessor monthly in advance
concurrent with other rentals hereunder $171.00 for insurance. Lessor will
pay all insurance and during each year of the Lease Term herein granted, or
any renewal hereof, Lessee, as additional rent shall reimburse Lessor for
all sums paid by Lessor for the insurance for the Premises in excess of the
total amount paid by Lessee herein. Upon being notified by Lessor, Lessee
shall remit such payment within thirty (30) days in the same manner as rent.
A per diem apportionment shall apply for any year within the Lease Term
which is less than twelve (12) full months.
<PAGE>
(C) Lessee will carry, at Lessee's own expense, insurance coverage on all
equipment, inventory, fixtures, furniture, appliances and other personal
property on the Premises.
(D) Lessee shall procure, maintain and keep in full force and effect at all
times during the term of this Lease and any renewal hereof, comprehensive
public liability insurance indemnifying Lessor and Lessee against all claims
and demands for injury to, or death of, persons, or damage to property which
may be claimed to have occurred upon the Premises in an amount not less than
$2,000,000.00, per occurrence of coverage for injury (including death) to
one or more persons attributable to a single occurrence and for property
damage.
To the full extent permitted by law, Lessor and Lessee each waives all right
of recovery against the other for, and agrees to release the other from
liability for, loss or damage to the extent such loss or damage is covered
by valid and collectible insurance in effect at the time of such loss or
damage; provided however, that the foregoing release by each party is
conditioned upon the other party's carrying insurance with the above
described waiver of subrogation, and if such coverage is not obtained or
maintained by either party, then the other party's foregoing release shall
be deemed to be rescinded until such waiver is either obtained or
reinstated.
All insurance provided for in this Lease shall be effected under enforceable
policies issued by insurers of recognized responsibility licensed to do
business in the state where the Premises are located. At least 15 days prior
to the expiration date of any policy procured by Lessee, the original
renewal policy for such insurance shall be delivered by the Lessee to the
Lessor. Within 15 days after the premium on any such policy shall become due
and payable, the Lessor shall be furnished with satisfactory evidence of its
payment. The original policy or policies shall be delivered to Lessor at the
commencement of this Lease.
If the Lessee provides any insurance required by this Lease in the form of a
blanket policy, the Lessee shall furnish satisfactory proof that such
blanket policy complies in all respects with the provisions of this Lease,
and that the coverage thereunder is at least equal to the coverage which
would be provided under a separate policy covering only the Premises.
If the Lessor so requires, the policies of insurance provided for shall be
payable to the holder of any mortgage, as the interest of such holder may
appear, pursuant to a standard mortgagee clause. All such policies shall, to
the extent obtainable provide that any loss shall be payable to the Lessor
or to the holder of any mortgage notwithstanding any act or negligence of
the Lessee which might otherwise result in forfeiture of such insurance. All
such policies shall, to the extent obtainable, contain an agreement by the
insurers that such policies shall not be cancelled without at least thirty
days prior written notice to the Lessor and to the holder of any mortgage to
whom loss hereunder may be payable.
Additional Charges
30. In addition to rent, Lessee shall pay monthly in advance concurrent
with rental payments, all applicable State and Local Sales Tax on all sums
due under this Lease.
<PAGE>
Radon Gas
31. Radon is a naturally occurring radioactive gas that, when it has
accumulated in a building in sufficient quantities, may present health risks
to persons who are exposed to it over time. Levels of radon that exceed
federal and state guidelines have been found in buildings in Florida.
Additional information regarding radon and radon testing may be obtained
from your county public health unit.
Grounds and Common Area Maintenance
32. Notwithstanding the provisions of Paragraph 6 herein above, Lessor
shall provide all material, equipment and labor for exterior landscape and
grounds maintenance for the Premises including mowing, mulching, weeding,
fertilizing, insecticiding, pruning, routine replacement of trees and
shrubbery, and other landscaping, drainage, and irrigation system
maintenance. Lessor will also provide landscaping and maintenance for right-
of-way areas, and the common irrigation and storm water management systems
which serve the Premises and Westside Industrial Park ("common area
maintenance").
Lessee shall pay to Lessor $808.00 monthly in advance concurrent with other
rentals hereunder and without demand for said services, including Lessee's
pro-rata share of common area maintenance. Lessor may adjust the monthly fee
for said service once annually to cover increases in Lessor's actual costs
for said services, provided however, that Lessor shall give Lessee thirty
(30) days written notice prior to any such adjustment.
Water and Sewer Bills
33. The building of which the Premises are a part is served by one water
meter. Lessor shall be billed by the utility for all water consumed in
building along with related sewer charges, and Lessor shall promptly pay
said bills. Lessor shall however, invoice Lessee monthly for Lessee's share
of such water and sewer charges based on Lessee's portion of the leased
space in building, and Lessee shall promptly pay said bills. If Lessee's
consumption of water is increased by "non-domestic" manufacturing,
processing, or other uses, exclusive of "domestic" uses such as office,
restroom, drinking fountain, or is increased by "domestic" uses arising from
occupancy by more than one person per 2000 sq. ft. of leased floor area,
Lessee's share of water billed shall take such extra uses into account.
Conversely, if water use by any other occupant of the building is increased
by such "non-domestic" use or "domestic" uses arising from occupancy
exceeding one person per 2000 sq. ft. of leased floor area, such other
occupant's billing shall take such extra use into account.
Attached hereto and incorporated herein by reference are the following:
Addendum to Lease
Exhibit A - Legal Description
Exhibit B - Site Plan
Exhibit C - Building Specifications
Exhibit D - Floor Plan
THIS LEASE contains the entire agreement of the parties hereto, and no
representations, inducements, promises or agreements, oral or otherwise,
between the parties, not embodied herein, shall be of any force or effect.
<PAGE>
If any term, covenant or condition of this Lease or the application
thereof to any person, entity or circumstance shall, to any extent, be
invalid or unenforceable, the remainder of this Lease, or the application of
such term, covenant or condition to persons, entities or circumstances other
than those which or to which used may be held invalid or unenforceable,
shall not be affected thereby, and each term, covenant or condition of this
Lease shall be valid and enforceable to the fullest extent permitted by law.
IN WITNESS WHEREOF, the parties have hereunto set their hands and
seals, the day and year first above written.
Signed, sealed and delivered Stone Mountain Industrial
Park, Inc.
in the presence of: A Georgia Corporation
/s/Linda G. Lawson By: /s/Michael G. Kern
- --------------------------------- ---------------------------------
Witness Title: Vice President
-------------------------
LESSOR (Corp. Seal)
Signed, sealed and delivered Simpson Strong-Tie
in the presence of: A California Corporation
/s/Kathleen M. Kuwitzky By: /s/Steve Lamson
- --------------------------------- ---------------------------------
Witness Title: Chief Financial Officer
-------------------------
(Notary Public - California
Alameda County) LESSEE (Corp. Seal)
<PAGE>
ADDENDUM TO LEASE AGREEMENT
DATED JUNE 25, 1996
BETWEEN STONE MOUNTAIN INDUSTRIAL PARK, INC. ("LESSOR")
AND
SIMPSON STRONG-TIE COMPANY, INC. ("LESSEE")
34. RENTAL SCHEDULE: Lessee shall pay to Lessor promptly on the first day
of each month during the term of this Lease, in advance and without demand or
offset:
a) $10,828.00 for the period from October 15, 1996 through October 31,
1996.
b) $19,745.00 per month from November 1, 1996 through October 31, 1999.
c) $20,930.00 per month from November 1, 1999 through September 30, 2001.
d) $ 9,452.00 for the period from October 1, 2001 through October 14,
2001.
All such rentals shall be paid to Lessor at the address set out under
Paragraph 23 "Notices" herein above.
35. HAZARDOUS SUBSTANCES: Notwithstanding Paragraph 15 herein above, Lessee
may use certain paints and solvents incidental to Lessee's normal
manufacturing operations in compliance with applicable laws and regulations
(hereinafter "Permitted uses" and Permitted materials"), provided that Lessee
shall remove and legally dispose of all permitted materials from the Premises,
at its own expense, at the termination of the Lease and indemnify Lessor, as
provided herein above, with respect to any permitted uses and materials.
36. EXPANSION: If Lessee requires expanded facilities, Lessor will work with
Lessee in good faith to provide Lessee expanded facilities adjoining the
Premises under this Lease or elsewhere in Westside Industrial Park upon then
mutually agreed rentals, terms and conditions. Upon Lessee's commencement of
rent payments under any lease with Lessor for expanded facilities elsewhere in
Westside Industrial Park, and Lessee's vacating the Premises under this Lease
and returning the Premises to Lessor in accordance with Paragraph 9, hereof,
this Lease shall be mutually canceled, without penalty, by written agreement
executed at that time.
37. CANCELLATION OF PRIOR LEASE: Lessee presently occupies premises owned
by Lessor at 8100-2 Westside Industrial Drive in Building No. 9, Westside
Industrial Park, Jacksonville, Florida (the "Prior Premises") under a lease
with Lessor dated October 8, 1993, (the "Prior Lease"). Effective upon the
date that Lessee occupies the Premises under this Lease and rental therefore
commences as provided for in this Lease, the Prior Lease shall be and is
hereby canceled without penalty and neither Lessee nor Lessor shall have
any further obligation to the other under the Prior Lease except that:
(a) Lessee, shall have a thirty-one (31) day period from the date of Lease
Commencement for the Premises at 8275 Forshee Drive in which it may also
occupy the Prior Premises for the purpose of "phasing out" of the space.
Lessee shall not be required to pay any rental for the Prior Premises during
this period. At the end of said thirty-one (31) day period, Lessee shall
return the Prior Premises in broom clean condition and in accordance with
the terms and conditions of the prior Lease.
<PAGE>
(b) Lessee and Lessor shall promptly "settle accounts" for any amounts
involved for pro-ration of rent, utility payments due, or other matters as
may be necessary under the Prior Lease.
The provisions of this Paragraph 40 shall serve as the written agreement
provided for in Paragraph 36(e) of the Prior Lease.
38. Earlier Entrance. Lessor agrees that portions of the Premises will be
made accessible to Lessee as soon as practicable for the purpose of enabling
Lessee to enter the Premises to install its trade fixtures and equipment, so
long as such entry will not interfere with completion of construction of the
Premises. Lessee agrees to indemnify Lessor from and against all cost, damage
and expense (including reasonable attorneys' fees and expenses) arising from
Lessee's entry onto the Premises prior to Substantial Completion.
39. Renewal Option. Provided that Lessee is not in default and has not sublet
or assigned the Premises, Lessee shall have the option to renew the terms of
this lease for one five (5) year term under the same terms and conditions as
provided herein, except that the base rental shall be equal to the market
rental rate for comparable properties available in the market at the time of
renewal, provided however the rental rate shall not be less than the rate in
effect at the end of the original Lease Term. Lessee shall provide Lessor not
less than one hundred eighty (180) days prior written notice of its commitment
to renew this Lease.
40. Sign Monument. As part of the completion of construction of the Premises,
Lessor will build a brick pump house on which Lessee may affix its logo and
name as provided under Paragraph 27 herein.
<PAGE>
Exhibit B
(Utility Plan of building location and dimensions)
<PAGE>
Exhibit C
Simpson Strong-Tie
June 11, 1996
WESTSIDE INDUSTRIAL PARK
BUILDING SPECIFICATIONS - BUILDING NO. 34
SIMPSON STRONG-TIE
GENERAL FACILITY DESCRIPTION
(a) Location: Building No. 34, 8275 Forshee Drive, Westside Industrial
Park, Jacksonville, Florida.
(b) Size & Overall
Dimensions: An approximately 74,587 sq. ft. building including
1,000 sq. ft. of ground floor offices. Overall main
premises dimensions are 362' x 200'. The minimum
ceiling clearance will be 24' and interior column
spacing will be 40' x 40'.
(c) Office: Approximately 1,000 sq. ft. office of centrally heated
and air conditioned office area at the front of the
building and one 12' x 15' office at the truck dock to
be built according to a floor plan prepared by
Pattillo. (See Office Area Design & Finishes section
for additional detail).
(d) General
Conditions: Cost of design, supervision, permits, fees, meters,
temporary utilities, and other expenses related to
construction are included. This proposal assumes that
all utilities are available on site. All work will be
being performed in a professional manner by Pattillo
Construction Corporation in accordance with the
applicable laws and regulations in effect in Duval
County and the State of Florida. The Premises will be
designed to meet "ADA" guidelines. Special
environmental or other regulatory permits related to
Lessee's particular processes, operations, or
emissions are not included.
SITE WORK
(a) Landscape,
Drainage, &
Irrigation: All surface water will drain away from the building.
Services of a landscape architect will be provided to
design landscaping for the premises, which will be
installed in accordance with City requirements and
similar to the overall standards provided at Westside
Industrial Park.
<PAGE>
(b) Automobile
Parking: Twenty three (23) parking spaces paved asphalt. Curb
and gutter will be provided.
(c) Truck Areas &
Access
Drives: The 120' deep truck court area and all drives are to
be paved with 6" of concrete rated at 3,000.
(d) Curb & Gutter: Poured with 3,000 PSI concrete 18" x 6".
(e) Signs &
Striping: Parking areas will receive single line painted
striping and handicap signs.
(f) UPS Door: One (1) 40' long "1/2 height" concrete ramp at dock
door. Ramp to provide 24" flat surface for 20'.
(g) Drive-In Door: One (1) drive-in door 14' x 16' wide either in west
wall or in new bay.
CONCRETE
(a) Foundations: All footings have been designed for 3,000 PSF soil
bearing pressure and will poured with 3,000 PSI
concrete.
(b) Slab on Grade:
(1) Five (5") inch thick 3,000 PSI concrete reinforced
with synthetic fibers. The surface will be steel
trowel finished and floors will be chemically cured
and hardened with "Lapidolith". Subgrade will be
chemically treated for termite protection.
(2) Column isolation joint will be non-keyed, diamond or
round formed with asphalt impregnated felt.
(3) Expansion joints at slab perimeter with asphalt
impregnated fiberboard, 5/8" thick.
(4) Control joints saw cut, 1/4 of slab depth, 1/8" wide,
bisect bays.
(5) Construction joints will have smooth dowels every 18"
on center.
(c) Dock Canopies: Concrete canopies shall be provided over each truck
door opening.
(d) Exterior
Stairways: Concrete stairways lead from warehouse area to truck
court.
<PAGE>
(e) Shrink Wrap: Provide a 56"+ diameter 6"+ deep depressed floor
section near truck dock doors to accept Lessee's
shrink wrap machine and turntable. (Machine and
installation by Lessee). Note: Final dimension to be
coordinated with Lessee.
(f) Excluded: Striping and granular fill.
MASONRY
(a) Exterior
Walls: Exterior walls will be four inch brick (Marietta
Blend) backed with eight inch (8") concrete block
except for the expansion wall which will be twelve
(12") concrete block.
(b) Interior
Walls: Interior warehouse/office and demising walls will be
constructed with concrete masonry unit (12" x 8" x
16"). The wall will extend to the roof deck. Walls
will be reinforced at joint 16" on center. Control
joints will be filled with one layer 5/8" thick
asphalt impregnated felt.
STRUCTURAL SYSTEM/METALS
(a) Structural
Steel: Columns and joists (column spacing 40' x 40') including
perimeter beams at the eave line and wind columns as
required. The structural steel frame will be designed
dead load of 25 lbs. per square foot and a live load
of 20 lbs. per square foot.
(b) Steel Joists: Designed for dead load of 25 lbs. per square foot and
live load of 20 lbs. per square foot and Seismic Zone
1. Bridging will be 1" x 1" x 7/67".
MOISTURE PROTECTION
(a) The roof deck is to be slotted, galvanized steel deck (0.5" deep)
covered with a flood coat of lightweight insulating aggregate concrete
with 1" polystyrene board embedded in the flood coat along with two
inches of additional insulating concrete above the polystyrene board.
The insulating concrete will be covered with a 4 ply, smooth surface,
fiberglass built-up roof membrane topped with light tan pea gravel.
The roof system is designed to provide an "R" Factor of approximately
10 as calculated in accordance with the Energy Efficiency Code.
Gutters and downspouts are shop cooled galvanized steel, 24 gauge.
DOORS AND WINDOWS
<PAGE>
(a) Overhead Dock
Height Truck
Doors: Twenty three (23) 10' x 10' truck door is a 24 gauge
steel, high lift truck door with 13 gauge angle
mounted track.
(b) Wood Doors: Flush, solid core, 36" x 84", 1-3/4" thickness, birch
veneer face, stain grade doors shall be provided for
all interior office spaces.
(c) Aluminum Entrance Doors and Fixed Glass Frames:
(1) Entrance doors shall be narrow style, extruded
aluminum, with electrostatically applied enamel
finish in color selected by Architect/Engineer.
(2) Fixed glass storefront framing system shall be
extruded aluminum sections with electrostatically
applied enamel finish in color selected by
Architect/Engineer. Members shall be installed with
concealed fasteners.
(d) Glass and Glazing:
(1) All exterior glass shall be reflective, 1/4 inch
minimum thickness, double glazed, solar bronze,
insulated. Installation shall be in accordance with
the recommendations of the manufacturers of the glass
and glazing materials.
(2) Interior sidelight glass (if any) shall be 1/4 inch
clear glazing.
(e) Finish Hardware:
(1) Locks and latch sets shall be heavy duty cylindrical
case, brushed aluminum finish as manufactured by
Ruswin or equal. Lever handle sets shall be installed
as required by code.
(2) Door closures shall be surface mounted.
(3) Push, kick, and mop plates shall be stainless or
brushed aluminum.
(4) Hinges shall be heavy duty, ball bearing at doors with
closures, oil bearing elsewhere. On exterior hardware
provide non-removable hinge pins.
(5) Office area to be keyed separate from warehouse.
<PAGE>
FINISHES
(a) General: 1,000+ sq. ft. of office area will be constructed at
the front of the Premises and one (1) 12' x 15' office
with air conditioning will be installed at the truck
dock.
(b) Furring: The 8" concrete block office/warehouse demising wall
will be furred and finished with 5/8" gypsum board.
(c) Drywall: Interior office walls and the temporary expansion wall
shall be constructed as follows:
(1) Sheetrock shall be 5/8 inch thickness, tapered edges,
fire rated, where required. Corner beads to be metal
and edge molding J type. Finished height 9' - 0" and
shall be screw applied and finished with a ready
mixed, all purpose joint compound. Fixture walls of
toilet rooms shall receive moisture resistant gypsum
board.
(2) Standard metal studs shall be 3-5/8", 26 gauge
electro-galvanized steel, cold rolled C shaped, screw
type, gauge as recommended by the manufacturer for
partition framing. Studs to be 24" on center.
(3) Restrooms to have 4" x 4" tile floor to 9' - 0"
ceiling height.
(d) Floors:
(1) Offices: Carpeting with a $12.50/sq. yd. allowance or
12" x 12" x 1//8" vinyl composition tile as required.
(2) Restrooms: 4" x 4" ceramic tile.
(3) Production: Sealed concrete floor.
(e) Ceilings: Spaces scheduled to receive acoustical tile ceiling
system shall have exposed grid system, 24 inches by 48
inches, non-directional fissured mineral board, 5/8
inch thickness, square edges, exposed steel "T"
runners, white painted finish. Ceiling shall be
insulated with 3-1/2" inch fiberglass batts.
(f) Warehouse Finishes:
(1) The personnel doors and frames will be painted - two
coats.
(2) Warehouse walls and structural steel columns and beams
will be painted white.
(g) Millwork: Break room area shall be provided with base and/or
wall cabinets per office design.
<PAGE>
SPECIALTIES
(a) Toilet
Partitions: Plastic laminate (wood particle board core) with
standard polish non-corrosive metal hardware.
(b) Toilet Room Accessories:
(1) Brushed stainless steel toilet room accessories
manufactured by Bobrick or equal shall be provided as
follows:
(2) Combination semi-recessed paper towel dispenser and
waste receptacle: one each toilet room.
(3) Framed mirrors: one each lavatory except where
unframed mirrors are provided, sloped, handicapped
type where required by Southern Building Code.
(4) Handicapped grab bars: one pair each toilet.
(5) Soap dispenser: one (1) each toilet room.
(c) Fire Extinguishers:
(1) Fire extinguishers shall be provided as required by
Southern Building Code in both the warehouse and
office.
(2) All fire extinguishers in finished office areas are to
be located in semi-recessed enameled steel cabinets
with signage.
EQUIPMENT
(a) Dock
Levelers: Install twelve (12) each 6' x 8' mechanical dock
levelers. Rated for 20,000 lbs. by Rite Hite or equal.
PLUMBING
(a) Service Lines: A 2" water line with standard 2" meter connection and
6" Schedule 40 PVC sewer line serve the building. All
systems and fixtures will be designed in accordance
with applicable Florida codes. Domestic water piping
above grade will be copper. Restrooms will be provided
as described under Office Area Design and Finishes
and will be designed for handicapped accessibility as
required by code. Surcharges or tap on fees based on
water or sewage effluent quality or quantity are
excluded.
<PAGE>
(b) Restrooms: Flush valve wall hung urinals and flush valve floor
mounted toilets will be provided.
(c) Water Coolers: Two (2) wall mounted electric stainless steel, top
barrier free electric water cooler is included in the
office area.
(d) Sinks:
(1) Bathroom lavatories to be provided per code for 15
total employees per shift.
(2) Break room - single compartment, stainless steel sink
shall be provided in break room vending area.
(e) Water
Closets: Standard floor mounted, low consumption, flush valve,
open front, elongated bowl, 17" rim height, white,
vitreous china (handicap per code).
(f) Urinals: Wall mounted, low consumption, flush valve, white,
vitreous china.
(g) Water Heater: Electric, 25 gallon (typical) hot water will be
provided to restrooms and sinks.
(h) Hose Bib: Bronze or brass, integral mounting flange.
(I) Eyewash: Provide one (1) eyewash and shower station located
near the battery charger area.
FIRE PROTECTION
(a) Sprinkler
System: A complete wet sprinkler system designed and
constructed to provide 0.30 gallons per minute to the
most remote 3,000 square feet in accordance with
N.F.P.A. Standards for a system. System shall include
yard mains, hose hydrants, interior hose stations,
sprinkler heads, and chrome pendant heads will be used
in the finished office area. Office area to have 0.10
gpm per sq. ft. over most remote 3,000 sq. ft. to
Code.
(b) Fire Hydrants: Fire hydrants - will be provided per building code.
(c) Exclusion: In-rack sprinkler, foam, etc. have not been provided
for.
HVAC/MECHANICAL
(a) Natural Gas: Natural gas supply will be provided to the building
with 2" - 5 psi entrance piping by the gas utility
company.
<PAGE>
(b) Office Area Heat and Cooling:
(1) A complete independent HVAC system shall be provided
for the front office areas.
(2) The HVAC system shall be packaged units and mounted on
the roof or split systems with the condensers ground
mounted. The units shall be York, Trane, Carrier or
equal.
(3) Air distribution will be by ceiling diffusers and
controls with be electric thermostats.
(4) An exhaust fan will be provided for each restroom.
(5) The office at truck dock will have one (1) wall
mounted air conditioning unit.
(c) Warehouse
Area Heat: Suspended gas fired unit heaters will be provided.
Design will maintain 70 degrees fahrenheit at outside
temperature of 29 degrees fahrenheit.
ELECTRICAL
(a) Main
Service: 800 amp, 277/480 volt, three phase 4 wire main service
with dry type transformers serving 120/208 volt loads.
Secondary distribution to panels for lights, office
outlets, office HVAC and other building circuitry
equipment is included. Circuitry for and connection of
Purchaser supplied equipment is not included except as
provided below.
(b) Emergency
Lighting: Facility exits will be clearly marked and the
warehouse and office will have emergency light
fixtures, all according to State and local codes.
Approximately 10% of all fixtures will be quartz
restrike.
(c) Warehouse
Lighting: All warehouse lighting to be metal halide fixtures
suspended between the bar joists and will provide an
average of 30 ft. candles of light.
(d) Forklift
Disconnect: Six (6) 480 volt, 30 amp, 3 phase disconnect for
forklifts.
(e) Shrink Wrap
Circuit: Provide one (1) 110 volt, 15 amp separate circuit at
truck dock wall.
<PAGE>
(f) Exterior
Lighting: Building mounted exterior flood lights will be
installed at the corners of the building and above
truck loading doors. Soffit lighting will highlight
the front entrance. Lighting to provide < - l f.c. and
to be high pressure sodium.
(g) Dock Lights: Twelve (12) each 40" swing arm dock lights (location
by Lessee). Lights to be electrified by 110 volt
duplex outlet at each location.
(h) Offices:
(1) Lighting will be 2' x 4' lay in four tube 277 volt
fixtures T8 lamps with electronic ballast.
(2) Telephone wire ways include empty outlet boxes and
conduit to above finished ceiling. Telephone and data
systems wiring and equipment are excluded.
(3) 110 Volt convenience outlets per standard.
(I) Excluded: Tenant supplied security and monitoring system.
Exhibit D
(Floor plan of building)
EXHIBIT 10.2
----------------
WELLS FARGO BANK APPLICATION FOR AMENDMENT TO LETTER OF CREDIT
DATE: 5/31/96
TO: WELLS FARGO BANK, N.A.
INTERNATIONAL DIVISION
PLEASE AMEND BY ___ CABLE/TELEX ___ COURIER ___ MAIL
___ OTHER:______________
YOUR IRREVOCABLE LETTER OF CREDIT NO: 140941
IN FAVOR OF: Self Insurance Plans of California
PARTY NAMED AS APPLICANT: Simpson Holdings, Inc.
1. LETTER OF CREDIT AMOUNT IS REDUCED BY $_________
2. LETTER OF CREDIT AMOUNT IS INCREASED BY $81,201.00
3. LATEST SHIPMENT DATE IS EXTENDED TO _________
4. LETTER OF CREDIT EXPIRATION DATE IS EXTENDED TO _________
OTHER AMENDMENT(S):
None
FOR BANK USE ONLY (To be Completed by Approving Bank Officer)
Applicant's signature on this Application is verified. Issuance of the
amendment has been approved in accordance with Bank's credit policies and
procedures.
APPROVING OFFICER'S OFFICE (Please Type or Print): EAST BAY RCBO
PHONE 510-464-1800 MAC 0210-080 AU 2677
APPROVING OFFICER'S NAME (Please Type or Print): Steven Bojkovic
APPROVING OFFICER'S SIGNATURE /s/Steven Bojkovic DATE 5/31/96
-------------------- ---------
APPLICANT'S AGREEMENT AND SIGNATURE
IT IS UNDERSTOOD THAT THIS AMENDMENT IS SUBJECT TO ACCEPTANCE BY THE
BENEFICIARY AND ANY CONFIRMING BANK. ALL OTHER TERMS AND CONDITIONS OF THE
LETTER OF CREDIT REMAIN UNCHANGED.
APPLICANT Simpson Holdings, Inc.
AUTHORIZED SIGNATURE /s/Steve Lamson TITLE CFO
---------------------- ----------
AUTHORIZED SIGNATURE /s/Thomas J Fitzmyers TITLE President
---------------------- ----------
EXHIBIT 10.3
----------------
June 10, 1996
Mr. Steve Lamson, CFO
Simpson Manufacturing Co., Inc.
4637 Chabot Drive, Suite 200
Pleasanton, CA 94588
Dear Steve:
In reference to the Agreement between Union Bank ("Bank") and Simpson
Manufacturing, Inc. ("Borrower") dated July 15, 1995, the Bank and Borrower
desire to amend the Agreement. This amendment shall be called the Fifth
Amendment to the Agreement. Initially capitalized terms used herein which
are not otherwise defined shall have the meaning assigned thereto in the
Agreement.
Amendment to the Agreement:
(a) Section 1.1.2 Standby L/C (A). The section is amended in its entirety
as follows:
"Bank has issued for the account of Borrower, an irrevocable, standby
letter of credit, an "L/C" in the amount of Two Hundred Seventy Five
Thousand Pounds Sterling (GBP275,000) maturing June 15, 1997."
This Loan Amendment shall become effective when the Bank shall have received
the acknowledgment copy of this Loan Amendment executed by the Borrower and
the following executed documents, all of which the Bank must receive before
July 15, 1996.
Except as specifically amended hereby, the Agreement shall remain in full
force and effect and is hereby ratified and confirmed. This Loan Amendment
shall not be a waiver of any existing default or breach of a condition to
covenant unless specified herein.
Very truly yours,
Union Bank
A Division of Union Bank of California, N.A.
/s/Carol Garrett /s/Gary Shekerjian
- ---------------------------- -----------------------------------
Carol Garrett, Vice President Gary Shekerjian, CO
Agreed and Accepted to this 20th day of June, 1996.
Simpson Manufacturing, Inc.
/s/Thomas J Fitzmyers /s/Steve Lamson
- ---------------------------- -----------------------------------
Thomas Fitzmyers, President Steve Lamson, Chief Financial Officer
<PAGE>
ARBITRATION AGREEMENT
(Commercial Transaction Not Secured By Real Property)
ADDENDUM A
(a) Claims or Controversion Subject to Arbitration. Any claim or
controversy between or among the parties to this agreement
(collectively,) the "Parties" and Individually, a "Party") which
arises out of or relates to (i) that certain APPLICATION FOR
IRREVOCABLE STANDBY LETTER OF CREDIT AND STANDBY LETTER OF CREDIT
AGREEMENT, executed by Simpson Strong-Tie Compnay Inc. in favor of
Union Bank (Bank"), any extensions, renewals, amendments,
substitutions or replacements thereof, and any related guaranty,
subordination agreement, security agreement or any other related
agreement or instrument (collectively, the "Subject Documents"), (ii)
any negotiations, correspondence or communications relating to any of
the Subject Documents, whether or not incorporated into the Subject
Documents or any indebtedness evidenced thereby, (iii) the
administration or management of the Subject Documents or any
indebtedness evidenced thereby or (iv) any alleged agreements,
promises, representations or transactions in connection therewith,
including but not limited to any claim or controversy which arises
out of or is based upon an alleged tort, shall at the written request
of any Party, be determined by binding arbitration. The arbitration
shall be conducted in accordance with Title 9 of the California Code
of Civil Procedure Sections 1280 at seq. (the "California Arbitration
Act") and under the Commercial Rules of the American Arbitration Association
(the "AAA"). In connection with such arbitration, the Parties hereby
expressly, intentionally and deliberately waive any right they may
otherwise have to trial by jury of such claim or controversy.
(b) Selection of Arbitrator. Within thirty (30) days after written
demand, or within thirty (30) days after commencement by any Party of
any lawsuit subject to this agreement, a single neutral arbitrator
will be selected pursuant to the Commercial Rules of the AAA.
However, the arbitrator selected must be a retired state or federal
court judge with at least five years of judicial experience in civil
matters. In the event that the selection pursuant to the Commercial
Rules of the AAA does not result in the appointment of a single
neutral arbitrator within thirty (30) days, any such Party may
petition the court to appoint such an arbitrator. The Parties shall
equally bear the fees and expenses of the arbitrator unless the
arbitrator otherwise provides in the award.
(c) Powers of and Limitations on the Arbitrator. The arbitrator
shall have the powers provided by the California Arbitration Act and
the Commercial Rules of the AAA except as provided in this agreement,
including without limitation the following:
(1) The arbitrator shall determine all challenges to the
legality and/or enforceability of this agreement.
(2) The arbitrator shall apply the rules of evidence to the
same extent as they would be applied in a court of law.
(3) The arbitrator shall give effect to all legal and equitable
defenses in determining any claim or controversy, including without
limitation statutes of limitation, the statute of frauds, waiver and
estoppel.
(4) A Party may not conduct discovery unless the arbitrator
grants such Party leave to do so upon a showing of good cause. All
discovery shall be completed within ninety (90) days after the
appointment of the arbitrator. The arbitrator shall limit discovery
to non-privileged material that is relevant to the issues to be
determined by the arbitrator.
(5) The AAA shall determine the time of the hearing and shall
designate its location from among the cities of San Francisco, Los
Angeles and San Diego based upon the convenience of the arbitrator,
the Parties and the witnesses. However, such hearing shall be
commenced within thirty (30) days after completion of discovery,
unless the arbitrator grants a continuance upon a showing of good
cause by any Party. At least seven (7) days before the date set for
such hearing, the Parties shall exchange copies of exhibits to be
offered as evidence, and lists of the witnesses who will testify, at
such hearing. Once commenced, the hearing shall proceed day to day
until completed, unless the arbitrator grants a continuance upon a
showing of good cause by any Party. Any Party may cause to be
prepared, at its expense, a written transcription or electronic
recordation of such hearing.
(6) Any award by the arbitrator shall be set forth in a written
decision supported by written findings of fact and conclusions of law
which the arbitrator shall deliver concurrently to the Parties.
(7) The award of the arbitrator may include equitable relief.
(8) The arbitrator may not award punitive damages unless the
arbitrator first makes written findings of fact that would satisfy
the requirements for recovery of punitive damages under California
law. An such award of punitive damages shall not exceed a sum equal
to twice the amount of actual damages as determined by the
arbitrator.
(9) The arbitrator shall have the power to award reasonable
attorneys' fees (including a reasonable allocation for the costs of
in-house counsel) and costs to the prevailing party.
(10) The provisions of California Civil Code Sections 47 et
seq. shall apply to the arbitration to the same extent as they would
apply to a judicial proceeding subject to such provisions.
(11) The laws of the State of California shall govern the
arbitration pursuant to this agreement.
(d) Provisional Remedies, Self-Help and Foreclosure. No provision of
this agreement shall limit the right of any Party (i) to exercise any
self-help remedies, (ii) to foreclose upon or sell any collateral, by
power of sale or otherwise, or (iii) to obtain or oppose provisional
or ancillary remedies from a court of competent jurisdiction before,
after or during the pendency of the arbitration. The exercise of, or
opposition to, any such remedy does not waive the right of any Party
to arbitration pursuant to this agreement. If any obligation under any
Subject Document is or becomes secured by an interest in real
property, then no claim or controversy shall be submitted to
arbitration without the consent of the Parties. If the Parties do not
consent to such submission, then the claim or controversy shall be
determined by a judicial action in which all decisions of fact and
law shall, at the request of any Party, be referred to a referee in
accordance with California Code of Civil Procedure Sections 638 et
seq. The referee shall be selected pursuant to the provisions of
paragraph (b) of this agreement and shall have the powers conferred
upon a arbitrator by paragraph (c) of this agreement. Judgment upon
the award rendered by such referee shall be entered in the court in
which such judicial action was commenced in accordance with
California Code of Civil Procedure Sections 644 and 645.
(e) Miscellaneous. Judgment upon the award of the arbitrator may be
entered in any court of competent jurisdiction. In the event that
multiple claims are asserted, some of which are found not subject to
this agreement, the Parties agree to stay the proceedings of the
claims not subject to this agreement until all other claims are
resolved in accordance with this agreement. In the event that claims
are asserted against multiple parties, some of whom are not subject
to this agreement, the Parties agree to sever the claims subject to
this agreement and resolve them in accordance with this agreement. In
the event that any provision of this agreement is found to be illegal
or unenforceable, the remainder of this agreement shall remain in
full force and effect. The laws of the State of California shall
govern the interpretation of this agreement. This agreement fully
states all of the terms and conditions of the Parties' agreement
regarding the matters mentioned in, or incidental to, this agreement.
This agreement supersedes all oral negotiations and prior writings
concerning the subject matter of this agreement.
UNION BANK
BY: /s/CAROL GARRETT
----------------------
CAROL GARRETT
VICE PRESIDENT
SIMPSON STRONG-TIE COMPANY INC.
BY: /s/THOMAS J FITZMYERS
----------------------
Thomas J Fitzmyers, President
BY: /s/STEVE LAMSON
----------------------
Steve Lamson, CFO
<TABLE>
<CAPTION>
SIMPSON MANUFACTURING CO., INC. AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER COMMON SHARE
(UNAUDITED)
EXHIBIT 11
--------------
Primary Earnings per Share
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
1996 1995 1996 1995
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Weighted average number of common
shares outstanding 11,428,130 11,295,518 11,409,066 11,295,118
Shares issuable pursuant to employee stock
option plans, less shares assumed
repurchased at the average fair value
during the period 315,867 116,098 279,563 120,752
Shares issuable pursuant to the independent
director stock option plan, less shares
assumed repurchased at the average fair
value during the period 3,509 687 3,044 671
------------ ------------ ------------ ------------
Number of shares for computation of primary
net income per share 11,747,506 11,412,303 11,691,673 11,416,541
============ ============ ============ ============
Net income $ 5,167,849 $ 3,892,620 $ 8,430,353 $ 6,302,037
============ ============ ============ ============
Primary net income per share $ 0.44 $ 0.34 $ 0.72 $ 0.55
============ ============ ============ ============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SIMPSON MANUFACTURING CO., INC. AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER COMMON SHARE
(UNAUDITED)
EXHIBIT 11 (continued)
--------------------------
Fully Diluted Earnings per Share
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
1996 1995 1996 1995
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Weighted average number of common
shares outstanding 11,428,130 11,295,518 11,409,066 11,295,118
Shares issuable pursuant to employee stock
option plans, less shares assumed
repurchased at the end of period fair value 362,332 156,097 370,836 153,630
Shares issuable pursuant to the independent
director stock option plan, less shares
assumed repurchased at the end of period
fair value 4,000 1,405 4,000 937
------------ ------------ ------------ ------------
Number of shares for computation of fully
diluted net income per share 11,794,462 11,453,020 11,783,902 11,449,685
============ ============ ============ ============
Net income $ 5,167,849 $ 3,892,620 $ 8,430,353 $ 6,302,037
============ ============ ============ ============
Fully diluted net income per share $ 0.44 $ 0.34 $ 0.72 $ 0.55
============ ============ ============ ============
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Condensed Consolidated Balance Sheet at June 30, 1996, (Unaudited) and
the Condensed Consolidated Statement of Operations for the six months
ended June 30, 1996, (Unaudited) and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 12,875,191
<SECURITIES> 0
<RECEIVABLES> 32,029,660
<ALLOWANCES> 1,508,262
<INVENTORY> 34,823,846
<CURRENT-ASSETS> 81,664,540
<PP&E> 58,522,683
<DEPRECIATION> 32,866,366
<TOTAL-ASSETS> 110,450,480
<CURRENT-LIABILITIES> 19,828,205
<BONDS> 0
0
0
<COMMON> 30,993,676
<OTHER-SE> 59,527,816
<TOTAL-LIABILITY-AND-EQUITY> 110,450,480
<SALES> 95,217,057
<TOTAL-REVENUES> 95,217,057
<CGS> 59,864,983
<TOTAL-COSTS> 59,864,983
<OTHER-EXPENSES> 21,326,604
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0<F1>
<INCOME-PRETAX> 14,176,353
<INCOME-TAX> 5,746,000
<INCOME-CONTINUING> 8,430,353
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 8,430,353
<EPS-PRIMARY> .72
<EPS-DILUTED> .72
<FN>
<F1>Interest income for the six months ended June 30, 1996, was $150,883.
</FN>
</TABLE>
