AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION
STANDARD INDUSTRIAL/COMMERCIAL TENANT LEASE - NET
1. BASIC PROVISIONS ("BASIC PROVISIONS")
1.1 PARTIES: This Lease ("LEASE"), dated for reference purposes only,
September 19,2006, is made by and between SFERS REAL ESTATE CORP, DD, a Delaware
corporation and PRI MEDICAL TECHNOLOGIES, INC., a Nevada
corporation(collectively the "Parties," or individually a "Party").
1.2 PREMISES: That certain real property, including all improvements
therein or to be provided by Lessor under the terms of this Lease, and commonly
known by the street address of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
located in the County of Los Angeles , State of California and generally
described as (describe briefly the nature of the property) approximately 12,842
square feet of Industrial space indicated by cross hatch on Exhibit A attached
hereto and made a part hereof.The mezzanine is included in the 12,842 square
feet. ("Premises"). (See Paragraph 2 for further provisions.)
1.3 TERM: Sixty-two (62) months plus any partial month ("Original Term")
commencing sixty (60) days after Lessor's delivery of the Premises to lessee
("Commencement Date") and ending Sixty-two (62) months plus any partial month *
("Expiration Date"). (See Paragraph 3 for further provisions).
1.4 EARLY POSSESSION: N/A * after the Commencement date ("Early Possession
Date").
1.5 BASE RENT: $ 8,604.14 per month ("Base Rent") payable on the First
(1st) day of each month commencing on the commencement Date. See Paragraph 1.5
of the Addendum attached hereto. (See Paragraph 4 for further provisions.) If
this box is checked, there are provisions in this Lease for the Base Rent to be
adjusted.
1.6 BASE RENT PAID UPON EXECUTION: $ 8,604.14 as Base rent for the period
the first full month of the Lease Term.
1.7 SECURITY DEPOSIT: $ 10,200.00 ("Security Deposit"). (See Paragraph 5
for further provisions)
1.8 PERMITTED USE: General offices, warehousing and distribution of Medical
laser equipment, medical supplies, technical services or or other lawful related
use and for no other purpose.
1.9 INSURING PARTY: Lessor is the "INSURING PARTY" unless otherwise stated
herein. (See Paragraph 8 for further provisions.)
1.10 REAL ESTATE BROKERS: The following real estate brokers (collectively,
the "BROKERS") and brokerage relationships exist in this transaction and are
consented to by the Parties (check applicable boxes):
CB ▇▇▇▇▇▇▇ ▇▇▇▇▇ represents Lessor exclusively ("Lessor's Broker"); both
Lessor and Lessee, and represents Lessee exclusively ("Lessee's Broker"); both
lessee and Lessor. (See Paragraph 15 for further provisions.)
1.11 Guarantor. The obligations of the Lessee under this Lease are to be
guaranteed by EMERGENT GROUP, INC., a Nevada corporation. ("Guarantor"). (See
Paragraph 37 for further provisions.)
1.12 Addenda. Attached hereto is an Addendum or Addenda consisting of
Paragraphs 1.5, 6.1, 6.2, 7.2, 7.3, 7.3(c), 7.4(c), 8.2, 26, 44, 49, 50, 51, 52,
53, 54, 55 and Exhibits A through F all of which constitute a part of this
Lease.
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2. PREMISES.
2.1 LETTING. Lessor hereby leases to Lessee, and Lessee hereby leases from
Lessor, the Premises, for the term, at the rental, and upon all of the terms,
covenants and conditions set forth in this Lease. Unless otherwise provided
herein, any statement of square footage set forth in this Lease, or that may
have been used in calculating rental, is an approximation which Lessor and
Lessee agree is reasonable and the rental based thereon is not subject to
revision whether or not the actual square footage of the Premises is more or
less.
2.2 CONDITION. Lessor shall deliver the Premises to Lessee clean and free
of debris on the Commencement Date and warrants to Lessee that the existing
plumbing, fire sprinkler system lighting, air conditioning, heating, and loading
doors, if any, in the Premises, other than those constructed by Lessee, shall be
in good operating condition on the Commencement Date. If a non-compliance with
said warranty exists as of the Commencement Date, Lessor shall, except as
otherwise provided in this Lease, promptly after receipt of written notice from
Lessee setting forth with specificity the nature and extent of such non-
compliance, rectify same at Lessor's expense. If Lessee does not give Lessor
written notice of a non-compliance with this warranty within thirty (30) days
after the Commencement Date, correction of that non-compliance shall be the
obligation of Lessee at Lessee's sole cost and expense.
2.3 COMPLIANCE WITH COVENANTS, RESTRICTIONS AND BUILDING CODE. Lessor
warrants to Lessee that the improvements on the Premises comply with all
applicable covenants or restrictions of record and applicable building codes,
regulations and ordinances in effect the date the original Certificate of
Occupancy was issued. Said warranty does not apply to the use to which Lessee
will put the Premises or to any Alterations or Utility Installations (as defined
in Paragraph 7.3(a)) made or to be made by Lessee. If the Premises do not comply
with said warranty, Lessor shall, except as otherwise provided in this Lease,
promptly after receipt of written notice from Lessee setting forth with
specificity the nature and extent of such non-compliance, rectify the same at
Lessor's expense. If Lessee does not give Lessor written notice of a
non-compliance with this warranty within six (6) months following the
Commencement Date, correction of that non-compliance shall be the obligation of
Lessee at Lessee's sole cost and expense.
2.4 ACCEPTANCE OF PREMISES. Lessee hereby acknowledges: (a) that it has
been advised by the Brokers to satisfy itself with respect to the condition of
the Premises (including but not limited to the electrical and fire sprinkler
systems, security, environmental aspects, compliance with Applicable Law, as
defined in Paragraph 6.3) and the present and future suitability of the Premises
for Lessee's intended use, (b) that Lessee has made such investigation as it
deems necessary with reference to such matters and assumes all responsibility
therefor as the same relate to Lessee's occupancy of the Premises and/or the
term of this Lease, and (c) that neither Lessor, nor any of Lessor's agents, has
made any oral or written representations or warranties with respect to the said
matters other than as set forth in this Lease.
2.5 LESSEE PRIOR OWNER/OCCUPANT. The warranties made by Lessor in this
Paragraph 2 shall be of no force or effect if immediately prior to the date set
forth in Paragraph 1.1 Lessee was the owner or occupant of the Premises. In such
event, Lessee shall, at Lessee's sole cost and expense, correct any
non-compliance of the Premises with said warrants.
3. TERM.
3.1 TERM. The Commencement Date, Expiration Date and Original Term of this
Lease are as specified in Paragraph 1.3.
3.2 EARLY POSSESSION. If Lessee totally or partially occupies the Premises
prior to the Commencement Date, the obligation to pay Base Rent shall be abated
for the period of such early possession. All other terms of this Lease, however,
shall be in effect during such period. Any such early possession shall not
affect nor advance the Expiration Date of the Original Term.
3.3 DELAY IN POSSESSION. If for any reason Lessor cannot deliver possession
of the Premises to Lessee as agreed herein by the Early Possession Date, if one
is specified in Paragraph 1.4, or, if no Early Possession Date is specified, by
the Commencement Date, Lessor shall not be subject to any liability therefor,
nor shall such failure affect the validity of this Lease, or the obligations of
Lessee hereunder, or extend the term hereof, but in such case, Lessee shall not,
except as otherwise provided herein, be obligated to pay rent or perform any
other obligation of Lessee under the terms of this Lease until Lessor delivers
possession of the Premises to Lessee. If possession of the Premises is not
delivered to Lessee within sixty (60) days after the Commencement Date, Lessee
may at its option, by notice in writing to Lessor within ten (10) days
thereafter, cancel this Lease, in which event the Parties shall be discharged
from all obligations hereunder; provided, however, that if such written notice
by Lessee is not received by Lessor within said ten (10) day period, Lessee's
right to cancel this Lease shall terminate and be of no further force or effect.
Except as may be otherwise provided, and regardless of when the term actually
commences, if possession is not tendered to Lessee when required by this Lease
and Lessee does not terminate this Lease, as aforesaid, the period free of the
obligation to pay Base Rent, if any, that Lessee would otherwise have enjoyed
shall run from the date of delivery of possession and continue for a period
equal to what Lessee would otherwise have enjoyed under the terms hereof, but
minus any days of delay caused by the acts, changes or omissions of Lessee.
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4. RENT.
4.1 BASE RENT. Lessee shall cause payment of Base Rent and other rent or
charges, as the same may be adjusted from time to time, to be received by Lessor
in lawful money of the United States, without offset or deduction, on or before
the day on which it is due under the terms of this Lease. Base Rent and all
other rent and charges for any period during the term hereof which is for less
than one (1) full calendar month shall be prorated based upon the actual number
of days of the calendar month involved. Payment of Base Rent and other charges
shall be made to Lessor at its address stated herein or to such other persons or
at such other addresses as Lessor may from time to time designate in writing to
Lessee.
5. SECURITY DEPOSIT. Lessee shall deposit with Lessor upon execution hereof the
Security Deposit set forth in Paragraph 1.7 as security for Lessee's faithful
performance of Lessee's obligations under this Lease. If Lessee fails to pay
Base Rent or other rent or charges due hereunder, or otherwise Defaults under
this Lease (as defined in Paragraph 13.l), Lessor may use, apply or retain all
or any portion of said Security Deposit for the payment of any amount due Lessor
or to reimburse or compensate Lessor for any liability, cost, expense, loss or
damage (including attorneys' fees) which Lessor may suffer or incur by reason
thereof. If Lessor uses or applies all or any portion of said Security Deposit,
Lessee shall within ten (10) days after written request therefor deposit moneys
with Lessor sufficient to restore said Security Deposit to the full amount
required by this Lease. Lessor shall not be required to keep all or any part of
the Security Deposit separate from its general accounts. Lessor shall, at the
expiration or earlier termination of the term hereof and after Lessee has
vacated the Premises, return to Lessee (or, at Lessor's option, to the last
assignee, if any, of Lessee's interest herein), that portion of the Security
Deposit not used or applied by Lessor. Unless otherwise expressly agreed in
writing by Lessor, no part of the Security Deposit shall be considered to be
held in trust, to bear interest or other increment for its use, or to be
prepayment for any moneys to be paid by Lessee under this Lease.
6. USE. See Paragraph 6.1 of the Addendum attached hereto.
6.1 USE. Lessee shall use and occupy the Premises only for the purposes set
forth in Paragraph 1.8, or any other use which is comparable thereto, and for no
other purpose. Lessee shall not use or permit the use of the Premises in a
manner that creates waste or a nuisance, or that disturbs owners and/or
occupants of, or causes damage to, neighboring premises or properties. Lessor
hereby agrees to not unreasonably withhold or delay its consent to any written
request by Lessee, Lessees assignees or subtenants, and by prospective assignees
and subtenants of the Lessee, its assignees and subtenants, for a modification
of said permitted purpose for which premises may be used or occupied, so long as
the same will not impair structural integrity of the improvements on the
Premises, the mechanical or electrical systems therein, is not significantly
more burdensome to the Premises and the improvements thereon, and is otherwise
permissible pursuant to this Paragraph 6. If Lessor elects to withhold such
consent, Lessor shall within five (5) business days give a written notification
of the same, which notice shall include an explanation of Lessor's reasonable
objections to the change in use.
6.2 HAZARDOUS SUBSTANCES. See Paragraph 6.2 of the Addendum attached
hereto.
6.3 LESSEE'S COMPLIANCE WITH LAW. Except as otherwise provided in this
Lease, Lessee, shall, at Lessee's sole cost and expense, fully, diligently and
in a timely manner, comply with all "APPLICABLE LAW," which term is used in this
Lease to include all laws, rules regulations, ordinances, directives, covenants,
easements and restrictions of record, permits, the requirements of any
applicable fire insurance underwriter or rating bureau, and the recommendations
of Lessor's engineers and/or consultants, relating to any manner to the Premises
including but not limited to matters pertaining to (i) industrial hygiene, (ii)
environmental conditions on, in, under or about the Premises, including soil and
groundwater conditions, and (iii) the use, generation, manufacture, production,
installation, maintenance, removal, transportation, storage, spill or release of
any Hazardous Substance or storage tank), now in effect or which may hereafter
come into effect, and whether or not reflecting a change in policy from any
previously existing policy. Lessee shall, within five (5) days after receipt of
Lessor's written request, provide Lessor with copies of all documents and
information, including, but not limited to, permits, registrations, manifests,
applications, reports and certificates, evidencing Lessee's compliance with and
Applicable Law specified and shall immediately upon receipt, notify Lessor in
writing (with copies of any documents involved) of any threatened or actual
claim, notice, citation, warning, complaint or report pertaining to or involving
failure by Lessee or the Premises to comply with any Applicable Law.
6.4 INSPECTION; COMPLIANCE. Lessor and Lessor's Lender(s) (as defined in
Paragraph 8.3(a)) shall have the right to enter the Premises at any time, in the
case of an emergency, and otherwise at reasonable times, for the purpose of
inspecting the condition of the Premises and for verifying compliance by Lessee
with this Lease and all Applicable laws (as defined in Paragraph 6.3), and to
employ experts and/or consultants in connection therewith and/or to advise
Lessor with respect to Lessee's activities, including but not limited to the
installation, operation, use, monitoring, maintenance, or removal of any
Hazardous Substance or storage tank on or from the Premises. The costs and
expenses of any such inspections shall be paid by the party requesting same,
unless a Default or Breach of this Lease, violation of Applicable Law, or a
contamination, caused or materially contributed to by Lessee is found to exist
or be imminent, or unless the inspection is requested or ordered by a
governmental authority as the result of any such existing or imminent violation
or contamination. In any such case, Lessee shall upon request reimburse Lessor
or Lessor's Lender, as the case may be, for the costs and expenses of such
inspections.
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7. MAINTENANCE; REPAIRS; UTILITY INSTALLATIONS; TRADE FIXTURES AND ALTERATIONS.
7.1 LESSEE'S OBLIGATIONS.
(a) Subject to the provisions of Paragraphs 2.2 (Lessor's warranty as to
condition), 2.3 (Lessor's warranty as to compliance with covenants, etc). 7.2
(Lessor's obligations to repair), 9 (damage and destruction), and 14
(condemnation), Lessee shall, at Lessee's sole cost and expense and at all
times, keep the Premises and every part thereof in good order, condition and
repair, structural and non-structural (whether or not such portion of the
Premises requiring repairs, or the means of repairing the same are reasonably or
readily accessible to Lessee, and whether or not the need for such repairs
occurs as a result of Lessee's use, any prior use, the elements or the age of
such portion of the Premises), including, without limiting the generality of the
foregoing, all equipment or facilities serving the Premises, such as plumbing,
heating, air conditioning, ventilating, electrical, lighting facilities,
boilers, fired or unfired pressure vessels, fire sprinkler and/or standpipe and
hose or other automatic tire extinguishing system, including fire alarm and/or
smoke detection systems and equipment fire hydrants, fixtures, walls (interior
and exterior), foundations, ceilings, floors, windows, doors, plate glass,
skylights, signs located in, on, about, or adjacent to the Premises. Lessee
shall not cause or permit any hazardous Substance to be spilled or released in,
on, under or about the Premises (including through the plumbing or sanitary
sewer system) and shall promptly, at Lessee's expense, take all investigatory
and/or remedial action reasonably recommended, whether or not formally ordered
or required for the cleanup of any contamination of and for the maintenance,
security and/or monitoring of the Premises, the elements surrounding same, or
neighboring properties, that was caused or materially contributed to by Lessee,
or pertaining to or involving any Hazardous Substance and/or storage tank
brought onto the Premises by or for Lessee or under its control. Lessee, in
keeping the Premises in good order. Condition and repair, shall exercise and
perform good maintenance practices. Lessee's obligations shall include
restorations, replacements or renewals when necessary to keep the Premises and
all Improvements thereon or a part thereof in good order, condition and state of
repair in accordance with the condition of the Premises as delivered by Lessee
by Lessor.
(b) Lessee shall, at Lessee's sole cost and expense, procure and
maintain contracts, with copies to Lessor, in customary form and substance for,
and with contractors specializing and experienced in the inspection, maintenance
and service of the following equipment and improvements, if any, located on the
Premises: (i) heating, air conditioning and ventilation equipment. (ii) boiler,
fired or unfired pressure vessels,
7.2 LESSOR'S OBLIGATIONS. Except for the warranties and agreements of
Lessor contained in Paragraphs 2.2 (relating to condition of the Premises), 2.3
(relating to compliance with covenants. restrictions and building code), 9
(relating to destruction of the Premises) and 14 (relating to condemnation of
the Premises), it is intended by the Parties hereto that Lessor have no
obligation in any manner whatsoever, to repair and maintain the Premises, the
improvements located thereon, or the equipment therein, whether structural or
non structural. all of which obligations are intended to be that of the Lessee
under Paragraph 7.1 hereof. It is the intention of the Parties that the terms of
this Lease govern the respective obligations of the Parties as to maintenance
and repair of the Premises. Lessee and Lessor expressly waive the benefit of any
statute now or hereafter in effect to the extent it is inconsistent with the
terms of this Lease with respect to, or which affords Lessee the right to make
repairs at the expense of Lessor or to terminate this Lease by reason of, any
needed repairs. See Paragraph 7.2 of the Addendum attached hereto.
7.3 UTILITY INSTALLATIONS; TRADE FIXTURES; ALTERATIONS.
(a) DEFINITIONS; CONSENT REQUIRED. The term "UTILITY INSTALLATIONS" is
used in this Lease to refer to all carpeting, window coverings. air lines, power
panels, electrical distribution, security, fire protection systems,
communication systems, lighting fixtures, heating, ventilating, and air
conditioning equipment, plumbing, and fencing in, on, or about the Premises. The
term "TRADE FIXTURES" shall mean Lessee's machinery and equipment that can be
removed without doing material damage to the Premises The term "ALTERATIONS"
shall mean any modification of the improvements on the Premises from that which
are provided by Lessor under the terms of this Lease other than Utility
Installations or Trade Fixtures. whether by addition or deletion. "LESSEE OWNED
ALTERATIONS AND/OR UTILITY INSTALLATIONs" are defined as Alterations and/or
Utility Installations made by lessee that are not yet owned by Lessor as defined
in Paragraph 7.4(a) Lessee shall not make any Alteration or Utility
Installations in. on. under or about the Premises without Lessor's prior written
consent. Lessee may. however. make non-structural Utility Installations to the
interior of the Premises (excluding the roof), as long as they are not visible
from the outside, do not involve puncturing, relocating or removing the roof or
any existing walls and the cumulative cost thereof during the term of this Lease
as extended does not exceed $25,000. See paragraph 7.3 of the Addendum attached
hereto.
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(b) CONSENT. Any Alterations or Utility installations that Lessee shall
desire to make and which require the consent of the Lessor shall be presented to
Lessor in written form with proposed detailed plans. All consents given by
Lessor, whether by virtue of Paragraph 7.3(a) or by subsequent specific consent,
shall be deemed conditioned upon: (i) Lessee's acquiring all applicable permits
required by governmental authorities, (ii) the furnishing of copies of such
permits together with a copy of the plans and specifications for the Alteration
or Utility Installation to Lessor prior to commencement of the work thereon. and
(iii) the compliance by Lessee with all conditions of said permits in a prompt
and expeditious manner. Any Alterations or Utility Installations by Lessee
during the term of this Lease shall be done in a good and workmanlike manner,
with good and sufficient materials, and in compliance with all Applicable Law.
Lessee shall promptly upon completion thereof furnish lessor with as-built plans
and specifications thereto. Lessor may (but without Obligation to do so)
condition its consent to any requested Alteration or Utility Installation that
costs $10,000 or more upon Lessee's providing Lessor with a lien and completion
bond in an amount equal to One and one-half times the estimate cost of such
Alteration or Utility Installation and/or upon Lessee's posting an additional
Security Deposit with Lessor under Paragraph 36 hereof.
(c) INDEMNIFICATION. Lessee shall pay when due, all claims for labor or
materials furnished or alleged to have been furnished to or for Lessee at or for
use on the Premises, which claims are or may be secured by any mechanics or
materialmen's lien against the Premises or any interest therein. Lessee shall
give Lessor not less than ten (10) days' notice prior to the commencement of any
work in, on or about the Premises, and Lessor shall have the right to post
notices of non-responsibility in or on the Premises as provided by law. If
Lessee shall, in good faith, contest the validity of any such lien, claim or
demand then Lessee shall, at its sole expense defend and protect itself. Lessor
and the Premises against the same and shall pay and satisfy any such adverse
judgment that may be rendered thereon before the enforcement thereof against the
Lessor or the Premises. If Lessor shall require, Lessee Shall furnish to Lessor
a surety bond satisfactory to Lessor in an amount equal to One and a half times
the amount of such contested lien or claim or demand, indemnifying Lessor,
against liability for the same. as required by law for the holding of the
Premises free from the effect of such lien or claim. In addition, Lessor may
require Lessee to pay Lessor's attorney's fees and costs in participating in
such action if Lessor shall decide it is to its best interest to do so. See
Paragraph 7.3(c) of the Addendum attached hereto.
7.4 OWNERSHIP; REMOVAL; SURRENDER; AND RESTORATION.
(a) OWNERSHIP. Subject to Lessors right to require their removal or
become the owner thereof as hereinafter provided in this Paragraph 7.4. all
Alterations and Utility Additions made to the Premises by Lessee Shall be the
property of and owned by Lessee. but considered a part of the Premises. Lessor
may, at any time and at its option, elect in writing to Lessee to be the owner
of all Or any specified part of the Lessee Owned Alterations and Utility
Installations Unless otherwise instructed per subparagraph 7.4(b) hereof, all
Lessee Owned Alterations and Utility Installations shall at the expiration or
earlier termination of this Lease, become the property of Lessor and remain upon
and be surrendered by Lessee with the Premises.
(b) REMOVAL. Unless otherwise agreed in writing, Lessor may require that
any or all Lessee Owned Alterations or Utility Installations be removed by the
expiration or earlier termination of this Lease, notwithstanding their
Installation may have been consented to by Lessor. Lessor may require the
removal at any time of all Or any part of any Lessee owned Alterations or
Utility Installations made without the required consent of Lessor.
(c) SURRENDER/RESTORATION. Lessee Shall surrender the Premises by the
end of the last day of the Lease term or any earlier termination date. with all
Of the improvements, parts and surfaces thereof clean and free of debris and in
good operating order, condition and State of repair, ordinary wear and tear
excepted. "ORDINARY WEAR AND TEAR" shall not include any damage or deterioration
that would have been prevented by good maintenance practice Or by Lessee
performing all of its Obligations under this lease Except as otherwise agreed or
specified in writing by Lessor. the Premises, as Surrendered, shall include the
Utility Installations. The obligation of Lessee shall include the repair of any
damage occasioned by the installation. maintenance Or removal of Lessee's Trade
Fixtures, furnishings, equipment. and Alterations and/or Utility Installations.
as well as the removal of any storage tank installed by Or for Lessee, and the
removal, replacement, or remediation of any soil, material or ground water
contaminated by Lessee, all as may then be required by Applicable Law and/or
good practice. Lessee's Trade Fixtures shall remain the property of Lessee and
shall he removed by Lessee subject to its obligation to repair and restore the
Premises per this Lease. See Paragraph 7.4(c) of the Addendum attached hereto.
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8. INSURANCE; INDEMNITY.
8.1 PAYMENT FOR INSURANCE. Regardless of whether the Lessor or Lessee is
the insuring Party, Lessee shall pay for all insurance required under this
Paragraph 8. Premiums for policy, periods commencing prior to or extending
beyond the Lease tern shall be prorated to correspond to the lease term. Payment
shall be make by Lessee to Lessor on a monthly basis with Base Rent.
8.2 LIABILITY INSURANCE.
(a) CARRIED BY LESSEE. Lessee shall obtain and keep in force during the
term of this Lease a Commercial General Liability policy of insurance protecting
Lessee and Lessor (as an additional insured) against claims for bodily injury
personal injury and property damage based upon, involving or arising out of the
ownership, use, occupancy or maintenance of the Premises and all areas
appurtenant thereto. Such insurance shall be or, an occurrence basis providing
single limit coverage in an amount nor less than $1,000,000 per Occurrence with
an "Additional Insured-Managers or Lessors of Premises" Endorsement and contain
the "Amendment of the Pollution Exclusion" for damages caused by heat, smoke or
fumes from a hostile fire. The policy shall not contain any intra-insured
exclusions as between insured persons or organizations but shall include
coverage for liability assumed under this Lease as an "insured contract" for the
performance of Lessee's indemnity obligations under this Lease. The limits of
said insurance required by this Lease or as carried by Lessee shall not,
however, limit the liability of Lessee nor relieve Lessee of any obligation
hereunder. All insurance to be carried by Lessee shall be primary to and not
contributory with any similar insurance carried by Lessor, whose insurance shall
be considered excess insurance only.
(b) CARRIED BY LESSOR. In the event Lessor is the insuring Party, Lessor
shall also maintain liability insurance described in Paragraph 82(a), above, in
addition to, and not in lieu of, the insurance required to be maintained by
Lessee . Lessee shall not be named as an additional insured therein.
8.3 PROPERTY INSURANCE-BUILDING, IMPROVEMENTS AND RENTAL VALUE.
(a) BUILDING AND IMPROVEMENTS. The Insuring Party shall obtain and keep
in force during the term of this Lease a policy or policies in the name of
Lessor, with loss payable to Lessor and to the holder's of any mortgages, deeds
of trust or ground leases On the Premises (`Lender(s)"). insuring loss or damage
to the Premises. The amount of such insurance shall be equal to the full
replacement cost of the Premises, as the same shall exist from time to time, or
the amount required by Lenders, but in no event more than the commercially
reasonable and available insurable value thereof if, by reason of the unique
nature or age of the improvements involved, such latter amount is less than full
replacement cost. If Lessor is the Insuring Party, however, Lessee Owned
Alterations and Utility Installations shall be insured by Lessee under Paragraph
8.4 rather than by Lessor. If the coverage is available and commercially
appropriate, such policy or policies shall insure against all risks of direct
physical loss or damage (except the perils of flood and/or earthquake unless
required by a Lender). Including coverage for any additional costs resulting
from debris removal and reasonable amounts of coverage for the enforcement of an
ordinance or law regulating the reconstruction or replacement of any undamaged
sections of the Premises required to be demolished or removed by reason of the
enforcement of any building, zoning, safety or land use laws as the result of a
covered cause of loss, Said policy or policies shall also contain an agreed
valuation provision in lieu of any coinsurance clause, waiver of subrogation.
(c) ADJACENT PREMISES. If the Premises are part of a larger building, or
if the Premises are part of a group of buildings owned by Lessor which are
adjacent to the Premises, the Lessee shall pay for any increase in the premiums
for the property insurance of such building or buildings if said increase is
caused by Lessee's acts. omissions, use or occupancy of the Premises.
(d) TENANT'S IMPROVEMENTS. If the Lessor is the Insuring Party. the
Lessor shall not be required to insure Lessee Owned Alterations and Utility
Installations unless the item in question has become the property of Lessor
under the terms of this Lease, If Lessee is the Insuring Party, the policy
carried by Lessee under this Paragraph 3,3 shall insure Lessee Owned Alterations
and Utility Installations.
8.4 LESSEE'S PROPERTY INSURANCE. Subject to the requirements of Paragraph
8.5, Lessee at its cost shall either by separate policy or, at Lessor's option,
by endorsement to a policy already carried, maintain insurance coverage on all
of Lessee's personal property, Lessee Owned Alterations and Utility
Installations in, on, or about the Premises similar in coverage to that carried
by the Insuring Party under Paragraph 8,3, Such insurance shall be full
replacement cost coverage with a deductible of not to exceed $1,000 per
occurrence. The proceeds from any such insurance shall be used by Lessee for the
replacement of personal property or the restoration of Lessee Owned Alterations
and Utility installations. Lessee shall be the Insuring Party with respect to
the insurance required by this Paragraph S.4 and shall provide Lessor with
written evidence that such insurance is in force.
8.5 INSURANCE POLICIES. Insurance required hereunder shall be in companies
duly licensed to transact business in the state where the Premises are located,
and maintaining during the policy term a "General Policyholders Rating" of at
least A:VII, or such other rating as may be required by a Lender having a lien
on the Premises, as set forth in the most current issue of "Best's Insurance
Guide." Lessee shall not do or permit to be done anything which shall invalidate
the insurance policies referred to in this Paragraph a. If Lessee is the
Insuring Party, Lessee shall cause to be delivered to Lessor certified copies of
policies of such insurance or certificates evidencing the existence and amounts
of such insurance with the insureds and loss payable clauses as required by this
Lease, No such policy shall be cancellable or subject to modification except
after thirty (30) days prior written notice to Lessor, Lessee shall at least
thirty (30) days prior to the expiration of such policies, furnish Lessor with
evidence of renewals or "insurance binders" evidencing renewal thereof, or
Lessor may order such insurance and charge the cost thereof to Lessee, which
amount shall be payable by Lessee to Lessor upon demand. If the Insuring Party
Shall fail to procure and maintain the insurance required to be carried by the
insuring Party under this Paragraph 8, the Other Party may, but shall not be
required to procure and maintain the same, but at Lessee's expense.
8.6 WAVER OF SUBROGATION. Without affecting any other rights or remedies,
Lessee and Lessor ("WAIVING PARTIES") each hereby release and relieve the other,
and waive their entire right to recover damages (whether in contract or in tort)
against the other. for loss of or damage to the Waiving Party's property arising
out of or incident to the perils required to be insured against under Paragraph
8. The effect of such releases and waivers of the right to recover damages shall
not be limited by the amount of insurance carried or required, or by any
deductibles applicable thereto.
8.7 INDEMNITY. Except to the extent caused by or arising from the gross
negligence or willful misconduct of lessor or its agents, employees or
contractors, Lessee Shall indemnify, Protect, defend and hold harmless the
Premises, Lessor and its agents, Lessor's master or ground lessor, partners and
Lenders, from and against any and all claims, loss of rents and/or damages,
costs, liens, judgments, penalties, permits, attorney's and consultant's fees,
expenses and/or liabilities arising out of, involving, or in dealing with. The
occupancy of the Premises by Lessee, the conduct of Lessee's business, any act,
omission or neglect of Lessee, its agents, contractors, employees or invitees,
and out of any Default or Breach by Lessee in the performance in a timely manner
of any obligation on Lessee's part to be performed under this Lease. The
foregoing shall include, but not be limited to, the defense or pursuit of any
claim or any action or proceeding involved therein, and whether or not (in the
case of claims made against Lessor) litigated and/or reduced to judgment, and
whether well founded or not. In case any action or proceeding be brought against
Lessor by reason of any of the foregoing matters, Lessee upon notice from Lessor
shall defend the same at Lessee's expense by counsel reasonably satisfactory to
Lessor and Lessor shall cooperate with Lessee in such defense. Lessor need not
have first paid arty such claim in order to be so indemnified.
8.8 EXEMPTION OF LESSOR FROM LIABILITY. Lessor shall not be liable for
injury or damage to the person or goods, wares, merchandise or other property of
Lessee, Lessee's employees, contractors, invitees, customers, or any other
person in or about the Premises, whether such damage or injury is caused by or
results from fire, Steam, electricity, gas, water or rain, or from the breakage,
leakage, obstruction or other defects Of pipes. fire Sprinklers, wires.
Appliances, plumbing, air conditioning or lighting fixtures, or from any other
cause, whether the said injury or damage results from conditions arising upon
the Premises or upon other portions of the building of which the Premises are a
part, or from other sources or places, and regardless of whether the cause of
such damage or injury or the means of repairing the same is accessible or not.
Lessor shall not be liable for any damages arising from any act or neglect of
any other tenant of Lessor, Notwithstanding Lessor's negligence or breach of
this Lease, Lessor shall under no circumstances be liable for injury to Lessee's
business or for any loss of income or profit therefrom.
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9. DAMAGE OR DESTRUCTION.
9.1 DEFINITIONS.
(a) "PREMISES PARTIAL DAMAGE" shall mean damage or destruction to the
improvements on the Premises, other than Lessee Owned Alterations and Utility
Installations, the repair cost of which damage or destruction is less than 50%
of the then Replacement Cost of the Premises immediately prior to Such damage or
destruction, excluding from such calculation the value of the land and Lessee
Owned Alterations and Utility Installations.
(b) "PREMISES TOTAL DESTRUCTION" shall mean damage or destruction to the
Premises, other than Lessee Owned Alterations and Utility Installations the
repair cost of which damage or destruction is 50% or more of the then
Replacement Cost of the Premises immediately prior to such damage or
destruction. excluding from Such calculation the value of the land and Lessee
Owned Alterations and Utility Installations.
(c) "INSURED LOSS" shall mean damage or destruction to improvements on
the Premises, other than Lessee Owned Alterations and Utility Installations,
which was caused by an event required to be covered by the insurance described
in Paragraph 3.3(a), irrespective of any deductible amounts or coverage limits
involved,
(d) "REPLACEMENT COST" shall mean the cost to repair or rebuild the
improvements owned by Lessor at the time of the occurrence to their condition
existing immediately prior thereto, including demolition, debris removal and
upgrading required by the operation of applicable building codes, ordinances or
laws, and without deduction for depreciation.
(e) "HAZARDOUS SUBSTANCE CONDITION" shall mean the occurrence or
discovery of a condition involving the presence of, or a contamination by,
Hazardous Substance as defined in Paragraph 6.2(a), in, on, or under the
Premises.
9.2 PARTIAL DAMAGE - INSURED LOSS. If a Premises Partial Damage that is an
Insured Loss occurs, then Lessor shall, at Lessor's expense, repair Such damage
(but not Lessee's Trade Fixtures or Lessee Owned Alterations and Utility
Installations) as soon as reasonably possible and this Lease shall continue in
full force and effect; provided, however, that Lessee shall, at Lessor's
election, make the repair of any damage or destruction the total cost to repair
of witch is $10,000 or less, and, in such event Lessor shall make the insurance
proceeds available to Lessee on a reasonable basis for that purpose.
Notwithstanding the foregoing, if the required insurance was not in force or the
insurance proceeds are not sufficient to effect such repair, the insuring party
shall promptly contribute the shortage in proceeds (except as to the deductible
which is Lessee's responsibility) as and when required to complete said repairs.
In the event, however, the shortage in proceeds was due to the fact that, by
reason of the unique nature of the improvements, full replacement cost insurance
coverage was not commercially reasonable and available, Lessor shall have no
obligation to pay for the shortage in insurance proceeds or to fully restore the
unique aspects of the Premises unless Lessee provides Lessor with the funds to
cover same, or adequate assurance thereof, within ten (10) days following
receipt of written notice of such shortage and request therefor. If Lessor
receives said funds or adequate assurance thereof within said ten (10) day
period, the party responsible for making the repairs shall complete them as soon
as reasonably possible and this Lease shall remain in full force and effect. If
Lessor does not receive such funds or assurance within said period, Lessor may
nevertheless elect by written notice to Lessee within ten (10) days thereafter
to make such restoration and repair as is commercially reasonable with Lessor
paying any shortage in proceeds, in which case this Lease shall remain in full
force and effect. If in such case Lessor does not so elect, then this Lease
shall terminate sixty (60) days following the occurrence of the damage or
destruction, Unless otherwise agreed. Lessee shall in no event have any right to
reimbursement from Lessor for any funds contributed by Lessee to repair any Such
damage or destruction. Premises Partial Damage due to flood or earthquake shall
be subject to Paragraph 9.3 rather than Paragraph 9.2, notwithstanding that
there may be some insurance coverage, but the net proceeds of any such insurance
shall be made available for the repairs if made by either Party.
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9.3 PARTIAL DAMAGE - UNINSURED LOSS. If a Premises Partial Damage that
is not an Insured Loss occurs, unless caused by a negligent or willful act of
Lessee (in which event Lessee shall make the repairs at Lessee's expense and
this Lease shall continue in full force and effect, but subject to Lessor's
rights under Paragraph 13), Lessor may at Lessor's option, either: (i) repair
such damage as soon as reasonably possible at Lessor's expense, in which event
this Lease shall continue in full force and effect, or (ii) give written notice
to Lessee within thirty (30) days after receipt by Lessor of knowledge of the
occurrence of such damage of Lessor's desire to terminate this Lease as of the
date sixty (60) days following the giving of such notice. In the event Lessor
elects to give such notice of Lessor's intention to terminate this Lease, Lessee
shall have the right within ten (10) days after the receipt of such notice to
give written notice to Lessor of Lessee's commitment to pay for the repair of
such damage totally at Lessee's expense and without reimbursement from Lessor.
Lessee shall provide Lessor with the required funds or satisfactory assurance
thereof within thirty (30) days following Lessee's said commitment. In such
event this Lease shall continue in full force and effect, and Lessor shall
proceed to make such repairs as soon as reasonably possible and the required
funds are available. If Lessee does not give such notice and provide the funds
or assurance thereof within the times specified above, this Lease shall
terminate as of the date specified in Lessor's notice of termination.
9.4 TOTAL DESTRUCTION. Notwithstanding any other provision hereof, if a
Premises Total Destruction occurs (including any destruction required by any
authorized public authority), this Lease shall terminate sixty (60) days
following the date of such Premises Total Destruction, whether or not the damage
or destruction is an Insured Loss or was caused by a negligent or willful act of
Lessee. In the event, however, that the damage or destruction was caused by
Lessee, Lessor shall have the right to recover Lessor's damages from Lessee
except as released and waived in Paragraph 8.6.
9.5 DAMAGE NEAR END OF TERM. If at any time during the last six (6) months
of the term of this Lease there is damage for which the cost to repair exceeds
one (1) month's Base Rent, whether or not an Insured Loss, Lessor may, at
Lessor's option, terminate this Lease effective sixty (60) days following the
date of occurrence of such damage by giving written notice to Lessee of Lessor's
election to do so within thirty (30) days after the date of occurrence of such
damage. Provided, however, if Lessee at that time has an exercisable option to
extend this Lease or to purchase the Premises, then Lessee may preserve this
Lease by, within twenty (20) days following the occurrence of the damage, or
before the expiration of the time provided in such option for its exercise,
whichever is earlier ("EXERCISE PERIOD"),(i) exercising such option and (ii)
providing Lessor with any shortage in insurance proceeds (or adequate assurance
thereof) needed to make the repairs. If Lessee duly exercises such option during
said Exercise Period and provides Lessor with funds (or adequate assurance
thereof) to cover any shortage in insurance proceeds, Lessor shall, at Lessor's
expense repair such damage as soon as reasonably possible and this Lease shall
continue in full force and effect. If Lessee fails to exercise such option and
provide such funds or assurance during said Exercise Period, then Lessor may at
Lessor's option terminate this Lease as of the expiration Of said sixty (60) day
period following the occurrence of such damage by giving written notice to
Lessee of Lessor's election to do so within ten (10) days after the expiration
of the Exercise Period, notwithstanding any term or provision in the grant of
option to the contrary.
9.6 ABATEMENT OF RENT; LESSEE'S REMEDIES.
(a) In the event of damage described in Paragraph 9.2 (Partial Damage--
Insured), whether or not Lessor or Lessee repairs or restores the Premises, the
Base Rent, Real Property Taxes, insurance premiums, and other charges, if any,
payable by Lessee hereunder for the period during which such damage, its repair
or the restoration continues (not to exceed the period for which rental value
insurance is required under Paragraph 8.3(b)), shall be abated in proportion to
the degree to which Lessee's use of the Premises is impaired. Except for
abatement of Base Rent, Real Property Taxes, insurance premiums, and other
charges, if any, as aforesaid, all other obligations of Lessee hereunder shall
be performed by Lessee, and Lessee shall have no claim against Lessor to any
damage suffered by reason of any such repair or restoration.
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(b) If Lessor shall be obligated to repair or restore the Premises under
the provisions of this Paragraph 9 and shall not commence. in a substantial and
meaningful way, the repair or restoration of the Premises within ninety (90)
days after such obligation shall accrue, Lessee may, at any time prior to the
commencement of such repair or restoration, give written notice to Lessor and to
any Lenders of which Lessee has actual notice of Lessee's election to terminate
this Lease on a date not less than sixty (60) days following the giving of such
notice. If Lessee gives such notice to Lessor and such Lenders and such repair
or restoration is not commenced within thirty (30) days after receipt of such
notice, this Lease shall terminate as of the date specified in said notice if
Lessor or a Lender commences the repair or restoration of the Premises within
thirty (30) days after receipt of such notice, this Lease shall continue in full
force and effect. "COMMENCE" as used in this Paragraph shall mean either the
unconditional authorization of the preparation of the required plans. or the
beginning of the actual work on the premises, whichever first occurs.
9.7 HAZARDOUS SUBSTANCE CONDITIONS. If a Hazardous Substance Condition
occurs, unless Lessee is legally responsible therefor (in which case Lessee
shall make the investigation and redemption thereof required by Applicable Law
and this Lease shall continue in full force and effect, but subject to Lessor's
rights under Paragraph 13), Lessor may at Lessor's option either (i) investigate
and remediate such Hazardous Substance Condition, if required, as soon as
reasonably possible at Lessor's expense, in which event this Lease shall
continue in full force and effect, or (ii) if the estimated cost to investigate
and remediate such condition exceeds twelve (12) times the then monthly Base
Rent or $100,000, whichever is greater, give written notice to Lessee within
thirty (30) days after receipt by Lessor of knowledge of the occurrence of such
Hazardous Substance Condition of Lessor's desire to terminate this Lease as of
the date sixty (60) days following the giving of such notice. In the event
Lessor elects to give such notice of Lessor's intention to terminate this Lease,
Lessee shall have the right within ten (10) days after the receipt of such
notice to give written notice to Lessor of Lessee's commitment to pay for the
investigation and remediation of such Hazardous Substance Condition totally at
Lessee's expense and without reimbursement from Lessor except to the extent of
an amount equal to twelve (12) times the then monthly Base Rent or $100,000,
whichever is greater. Lessee shall provide Lessor with the funds required of
Lessee or satisfactory assurance thereof within thirty (30) days following
Lessee's said commitment. In such event this Lease shall continue in full force
and effect, and Lessor shall proceed to make such investigation and remediation
as soon as reasonably possible and the required funds are available. If Lessee
does not give such notice and provide the required funds or assurance thereof
within the times specified above, this Lease shall terminate as of the date
specified in Lessor's notice of termination. If a Hazardous Substance Condition
occurs for which Lessee is not legally responsible, there shall be abatement of
Lessee's obligation under this Lease to the same extent as provided in Paragraph
9.6(a) for a period of not to exceed twelve (12) months.
9.8 TERMINATION - ADVANCE PAYMENTS. Upon termination of this Lease pursuant
to this Paragraph 9, an equitable adjustment shall be made concerning advance
Base Rent and any other advance payments made by Lessee to Lessor. Lessor shall,
in addition, return to Lessee so much of Lessee's Security Deposit as has not
been, or is not then required to be, used by Lessor under the terms of this
Lease.
9.9 WAIVE STATUTES. Lessor and Lessee agree that the terms of this Lease
shall govern the effect of any damage to or destruction of the Premises with
respect to the termination of this Lease and hereby waive the provisions of any
present or future Statute to the extent inconsistent herewith.
10. REAL PROPERTY TAXES.
10.1 (a) PAYMENT OF TAXES. Lessee shall pay the Real Property Taxes, as
defined in Paragraph 10.2, applicable to the Premises during the term of this
Lease. Subject to Paragraph 10.1(b).
9
(b) ADVANCE PAYMENT. In order to insure payment when due and before
delinquency of any or all Real Property Taxes, Lessor shall estimate the current
Real Property Taxes applicable to the Premises, and to require such current
year's Real Property Taxes to be paid in advance to Lessor by Lessee, monthly in
advance with the payment of the Base Rent. The monthly payment shall be that
equal monthly amount which, over the number of months remaining before the month
in which the applicable tax installment would become delinquent (and without
interest thereon), would provide a fund large enough to fully discharge before
delinquency the estimated installment Of taxes to be paid. When the actual
amount of the applicable tax ▇▇▇▇ is known, the amount of such equal monthly
advance payment shall be adjusted as required to provide the fund needed to pay
the applicable taxes before delinquency. If the amounts paid to Lessor by Lessee
under the provisions of this Paragraph are insufficient to discharge the
obligations of Lessee to pay such Real Property Taxes as the same become due,
Lessee shall pay to Lessor, upon Lessor's demand, such additional sums as are
necessary to pay such obligations. All moneys paid to Lessor under this
Paragraph may be intermingled with other moneys of Lessor and shall not bear
interest. In the event of a Breach by Lessee in the performance of the
obligations of Lessee under this Lease, then any balance of funds paid to Lessor
under the provisions of this Paragraph may, subject to proration as provided in
Paragraph 10.1(a), at the option of Lessor, be treated as an additional Security
Deposit under Paragraph 5.
10.2 DEFINITION OF "REAL PROPERTY TAXES." As used herein, the term "REAL
PROPERTY TAXES" shall include any form of real estate tax or assessment general,
special, ordinary or extraordinary, and any license fee, commercial rental tax,
improvement bond or bonds, levy or tax (other than inheritance personal income
or estate taxes) imposed upon the Premises by any authority having the direct or
indirect power to tax, including any city, state or federal government, or any
school, agricultural, sanitary, fire, street, drainage or other improvement
district thereof, levied against any legal or equitable interest of Lessor in
the Premises or in the real property of which the Premises are a part, Lessor's
right to rent or other income therefrom, and/or Lessor's business or leasing the
Premises. The term "REAL PROPERTY TAXES" shall also include any tax, fee, levy,
assessment or charge, or any increase therein, imposed by reason of events
occurring, or changes in applicable law taking effect, during the term of this
Lease, including but not limited to a change in the ownership of the Premises or
in the improvements thereon, the execution of this Lease, or any modification,
amendment or transfer thereof, and whether or not contemplated by the Parties.
10.3 JOINT ASSESSMENT. If the Premises are not separately assessed,
Lessee's liability shall be an equitable proportion of the Real Property Taxes
for all of the land and improvements included within the tax parcel assessed,
such proportion to be determined by Lessor from the respective valuations
assigned in the assessor's work sheets or such other information as may be
reasonably available. Lessor's reasonable determination thereof, in good faith,
shall be conclusive.
10.4 PERSONAL PROPERTY TAXES. Lessee shall pay prior to delinquency all
taxes assessed against and levied upon Lessee Owned Alterations, Utility
Installations, Trade Fixtures, furnishings, equipment and all personal property
of Lessee contained in the Premises or elsewhere. When possible, Lessee shall
cause its Trade Fixtures, furnishings, equipment and all other personal property
to be assessed and billed separately from the real property of Lessor. If any of
Lessee's said personal property shall be assessed with Lessor's real property,
Lessee shall pay Lessor the taxes attributable to Lessee within ten (10) days
after receipt of a written statement setting forth the taxes applicable to
Lessee's property or, at Lessor's option, as provided In Paragraph 10.1(b).
11. UTILITIES. See paragraph 50 of the Addendum attached hereto.
12. ASSIGNMENT AND SUBLETTING.
12.1 LESSOR'S CONSENT REQUIRED.
(a) Lessee Shall not voluntarily or by operation of law assign,
transfer, mortgage or otherwise transfer or encumber (collectively,
"ASSIGNMENT") or sublet all or any part of Lessee's interest in this Lease or in
the Premises without lessor's prior written consent given under and subject to
the terms of Paragraph 36.
10
(b) A change in the control of Lessee shall constitute an assignment
requiring Lessor's consent. The transfer, on a cumulative basis, fifty one
percent (51%) or more of the voting control of Lessee shall constitute a change
in control for this purpose.
(c) The involvement of Lessee or its assets in any transaction, or
series of transactions (by way of merger, sale, acquisition, financing,
refinancing transfer, leveraged buy-out or otherwise), whether or not a formal
assignment or hypothecation of this Lease or Lessee's assets occurs, which
results or will result in a reduction of the Net Worth of Lessee, as hereinafter
defined, by an amount equal to or greater than twenty-five percent (25%) of such
Net Worth of Lessee as it was represented to Lessor at the time of the execution
by Lessor of this Lease or at the time of the most recent assignment to which
Lessor has consented, or as it exists immediately prior to said transaction or
transactions constituting such reduction, at whichever time said Net Worth of
Lessee was or is greater, shall be considered an assignment of this Lease by
Lessee to which Lessor may reasonably withhold its consent. "NET WORTH OF
LESSEE" for purposes of this Lease shall be the net worth of Lessee (excluding
any guarantors) established under generally accepted accounting principles
consistently applied.
(d) An assignment or subletting of Lessee's interest in this Lease
without Lessor's specific prior written consent shall, at Lessor's option, be a
Default curable after notice per Paragraph 13.1(c), or a noncurable Breach
without the necessity of any notice and grace period. If Lessor elects to treat
such unconsented to assignment or subletting as a noncurable Breach, Lessor
shall have the right to either: (i) terminate this Lease, or (ii) upon thirty
(30) days written notice ("Lessor's Notice"), increase the monthly Base Rent to
fair market rental value or one hundred ten percent (110%) of the Base Rent then
in effect whichever is greater. Pending determination of the new fair market
rental value, if disputed by Lessee, Lessee shall pay the amount set forth in
Lessor's Notice with any overpayment credited against the next installment(s) of
Base Rent coming due, and any underpayment for the period retroactively to the
effective date of the adjustment being due and payable immediately upon the
determination thereof. Further, in the event of such Breach and market value
adjustment (i) the purchase price of any option to purchase the Premises held by
Lessee shall be subject to similar adjustment to the then fair market value
(without the Lease being considered an encumbrance or any deduction for
depreciation or obsolescence and considering the Premises at its highest and
best use and in good condition), or one hundred ten percent (110%) of the price
previously in effect, whichever is greater. (ii) any index-oriented rental or
price adjustment formulas contained in this Lease shall be adjusted to require
that the base index be determined with reference to the index applicable to the
time of such adjustment, and (iii) any fixed rental adjustments scheduled during
the remainder of the Lease term shall be increased in the same ratio as the new
market rental bears to the Base Rent in effect immediately prior to the market
value adjustment.
(e) Lessee's remedy for any breach of this Paragraph 12.1 by Lessor
shall be limited to compensatory damages and injunctive relief.
12.2 TERMS AND CONDITIONS APPLICABLE TO ASSIGNMENT AND SUBLETTING.
(a) Regardless of Lessor's consent, any assignment or subletting shall
not: (i) be effective without the express written assumption by such assignee or
sublessee of the obligations of Lessee under this Lease, (ii) release Lessee of
any obligations hereunder, or (iii) alter the primary liability of Lessee for
the payment of Base Rent and other sums due Lessor hereunder or for the
performance of any other obligations to be performed by Lessee under this Lease.
(b) Lessor may accept any rent or performance of Lessee's obligations
from any person other than Lessee pending approval or disapproval of an
assignment. Neither a delay in the approval or disapproval of such assignment
nor the acceptance of any rent or performance shall constitute a waiver of
estoppel of Lessor's right to exercise its remedies for the Default or Breach by
Lessee of any of the terms, covenants or conditions of this Lease.
11
(c) The consent of Lessor to any assignment or subletting shall not
constitute a consent to any subsequent assignment or subletting by Lessee or to
any subsequent or successive assignment or subletting by the sublessee. However,
Lessor may consent to subsequent sublettings and assignments of the sublease or
any amendments or modifications thereto without notifying Lessee or anyone else
liable on the Lease or sublease and without obtaining their consent, and such
action shall not relieve such persons from liability under this Lease or
sublease.
(d) In the event of any Default or Breach of Lessee's obligations under
this Lease. Lessor may proceed directly against Lessee, any Guarantors or any
one else responsible for the performance of the Lessee's obligations under this
Lease, including the sublessee, without first exhausting Lessor's remedies
against any other person or entity responsible therefor to Lessor, or any
security held by lessor or Lessee.
(e) Each request for consent to an assignment or subletting shall be in
writing, accompanied by information relevant to Lessor's determination as to the
financial and operational responsibility and appropriateness of the proposed
assignee or sublessee, including but not limited to the intended use and/or
required modification of the Premises, if any, together with a non-refundable
deposit of $1,000 or ten percent (10%) of the current monthly Base Rent
whichever is greater, as reasonable consideration for Lessor's considering and
processing the request for consent. Lessee agrees to provide Lessor with such
other or additional information and/or documentation as may be reasonably
requested by Lessor.
(f) Any assignee of, or sublessee under, this Lease shall, by reason of
accepting such assignment or entering into such sublease, be deemed, for the
benefit of Lessor, to have assumed and agreed to conform and comply with each
and every term, covenant, condition and obligation herein to be observed or
performed by Lessee during the term of said assignment or sublease, other than
such obligations as are contrary to or inconsistent with provisions of an
assignment or sublease to which Lessor has specifically consented in writing.
(g) The occurrence of a transaction described in Paragraph 12.1(c) shall
give Lessor the right (but not the obligation) to require that the Security
Deposit be increased to an amount equal to six (6) times the then monthly Base
Rent, and Lessor may make the actual receipt by Lessor of the amount required to
establish such Security Deposit a condition to Lessor's consent to such
transaction.
12.3 ADDITIONAL TERMS AND CONDITIONS APPLICABLE TO SUBLETTING. The
following terms and conditions shall apply to any subletting by Lessee of all or
any part of the Premises and shall be deemed included in all subleases under
this Lease whether or not expressly incorporated therein:
(a) Lessee hereby assigns and transfers to Lessor all of Lessee's
interest in all rentals and income arising from any sublease of all or a portion
of that Premises heretofore or hereafter made by Lessee, and Lessor may collect
such rent and income and apply same toward Lessee's obligations under this Lease
provided, however, that until a Breach (as defined in Paragraph 13.1) shall
occur in the performance of Lessee's obligations under this Lease. Lessee may
except as otherwise provided in this Lease, receive, collect and enjoy the rents
accruing under such sublease. Lessor shall not, by reason of this or any other
assignment of such Sublease to Lessor nor by reason of the collection of the
rents from a sublessee, be deemed liable to the sublessee for any failure of
Lessee to perform and comply with any of Lessee's obligations to such sublessee
under such sublease. Lessee hereby irrevocably authorizes and directs any such
sublessee, upon receipt of a written notice from Lessor stating that a Breach
exists in the performance of Lessee's obligations under this Lease, to pay to
Lessor the rents and other charges due and to become due under the sublease.
Sublessee shall rely upon any such statement and request from Lessor and shall
pay such rents and other charges to Lessor without any obligation or right to
inquire as to whether such Breach exists and notwithstanding any notice from or
claim from Lessee to the contrary. Lessee shall have no right or claim against
said sublessee, or, until the Breach has been cured, against Lessor for any such
rents and other charges so paid by said sublessee to Lessor.
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(b) In the event of a Breach by Lessee in the performance of its
obligations under this Lease, Lessor, at its option and without any obligation
to do so may require any sublessee to attorn to Lessor, in which event Lessor
shall undertake the obligations of the sublessor under such sublease from the
time of the exercise of said option to the expiration of Such sublease;
provided, however, Lessor shall not be liable for any prepaid rents or security
deposit paid by such sublessee to such sublessor or for any other prior Defaults
or Breaches of such sublessor under such sublease.
(c) Any matter or thing requiring the consent of the sublessor under a
sublease shall also require the consent of Lessor herein.
(d) No sublessee shall further assign or sublet all or any part of the
Premises without Lessor's prior written consent
(e) Lessor shall deliver a copy of any notice of Default or Breach by
Lessee to the sublessee, who shall have the right to cure the Default of Lessee
within the grace period, if any, specified in such notice. The sublessee shall
have a right of reimbursement and offset from and against Lessee for any such
Defaults cured by the sublessee.
13. DEFAULT; BREACH; REMEDIES.
13.1 DEFAULT; BREACH. Lessor and Lessee agree that if an attorney is
consulted by Lessor in connection with a Lessee Default or Breach (as
hereinafter defined), $350.00 is a reasonable minimum sum per such occurrence
for legal services and costs in the preparation and service of a notice of
Default, and that Lessor may include the cost of such services and costs in said
notice as rent due and payable to cure said Default. A "Default" is defined as a
failure by the Lessee to observe, comply with or perform any of the terms,
covenants, conditions or rules applicable to Lessee under this Lease. A "Breach"
is defined as the occurrence of any one or more of the following Defaults, and,
where a grace period for cure after notice is specified herein, the failure by
Lessee to cure such Default prior to the expiration of the applicable grace
period, shall entitle Lessor to pursue the remedies set forth in Paragraphs 13.2
and/or 13.3:
(a) The vacating of the Premises without the intention to reoccupy same,
or the abandonment of the Premises. (b) Except as expressly otherwise provided
in this Lease, the failure by Lessee to make any payment of Base Rent or any
other monetary payment required to be made by lessee hereunder, whether to
Lessor or to a third party, as and when due, the failure by Lessee to provide
Lessor with reasonable evidence of insurance or surety bond required under this
Lease, or the failure of Lessee to fulfill any obligation under this Lease which
endangers or threatens life or property, where such failure continues for a
period of three (3) days following written notice thereof by or on behalf of
Lessor to Lessee.
(c) Except as expressly otherwise provided in this Lease, the failure by
Lessee to provide Lessor with reasonable written evidence (in duly executed
original form, if applicable) of (i) compliance with Applicable Law per
Paragraph 6.3, (ii) the inspection, maintenance and service contracts required
under Paragraph 7.1(b), (iii) the recission of an unauthorized assignment or
subletting per Paragraph 12.1(b), (iv) a Tenancy Statement per Paragraphs 16 or
37, (v) the subordination or non-subordination of this Lease per Paragraph 30,
(vi) the guaranty of the performance of Lessee's obligations under this Lease
required under Paragraphs 1.11 and 37, (vii) the execution of any document
requested under Paragraph 42 (easements), or (viii) any other documentation of
information which Lessor may reasonably require of Lessee under the terms of
this Lease, where any such failure continues for a period of ten (10) days
following written notice by or on behalf of Lessor to Lessee.
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(d) A Default by Lessee as to the terms, covenants, conditions or
provisions of this Lease, or of the rules adopted under Paragraph 40 hereof,
that are to be observed, complied with or performed by Lessee, other than those
described in subparagraphs (a), (b) or (c) above, where such Default continues
for period of thirty (30) days after written notice thereof by or on behalf of
Lessor to Lessee: provided, however, that if the nature of Lessee's Default is
such that more than thirty (30) days are reasonably required for its cure, then
it shall not be deemed to be a Breach of this Lease by Lessee If Lessee
commences such cure within said thirty (30) day period and thereafter diligently
prosecutes such cure to completion.
(e) The occurrence of any of the following events: (i) The making by
Lessee of any general arrangement or assignment for the benefit of creditors:
(ii) Lessee's becoming a "debtor" as defined in 11 U.S.C. (S)101 or any
successor statute thereto (unless, in the case of a petition filed against
Lessee, the same dismissed within sixty (60) days); (iii) the appointment of a
trustee or receiver to take possession of substantially all of Lessee's assets
located at the Premise or of Lessee's interest in this Lease, where possession
is not restored to Lessee within thirty (30) days: or (iv) the attachment,
execution or other judicial seizure of substantially all of Lessee's assets
located at the Premises or of Lessee's interest in this Lease, where such
seizure is not discharged within thirty (30) days provided, however, in the
event that any provision of this subparagraph (e) is contrary to any applicable
law, such provision shall be of no force or effect, and not affect the validity
of the remaining provisions.
(f) The discovery by Lessor that any financial Statement given to Lessor
by Lessee or any Guarantor of Lessee's obligations hereunder was materially
false.
(g) If the performance of Lessee's obligations under this Lease is
guaranteed: (i) the death of a guarantor, (ii) the termination of a guarantor's
liability with respect to this Lease other than in accordance with the terms of
such guaranty, (iii) a guarantor's becoming insolvent or the subject of a
bankruptcy filing (iv) a guarantor's refusal to honor the guaranty, or (v) a
guarantor's breach of its guaranty obligation on an anticipatory breach basis,
and Lessee's failure within sixty (60) days following written notice by or on
behalf of Lessor to Lessee of any such event, to provide Lessor with written
alternative assurance of security, which, when coupled with the then existing
resources of Lessee equal or exceeds the combined financial resources of Lessee
and the guarantor that existed at the time of execution of this Lease.
13.2 REMEDIES. If Lessee fails to perform any affirmative duty or
obligation of Lessee under this Lease, within ten (10) days after written notice
to Lessee, (or in case of an emergency, without notice), Lessor may at its
option (but without obligation to do so), perform such duty or obligation on
Lessee's behalf including but not limited to the obtaining of reasonably
required bonds, insurance policies, or governmental licenses, permits or
approvals. The Costs and expenses of any Such performance by Lessor shall be due
and payable by Lessee to Lessor upon invoice therefor. If any check given to
Lessor by Lessee shall not be honored by the bank upon which it is drawn,
Lessor, at its option, may require all future payments to be made under this
Lease by Lessee to be made only by cashier's check. In the event of a Breach of
this Lease by Lessee, as defined in Paragraph 13.1, with or without further
notice or demand, and without limiting Lessor in the exercise of any right or
remedy which Lessor may have by reason of such Breach, Lessor may:
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(a) Terminate Lessee's right to possession of the Premises by any lawful
means, in which case this Lease and the term hereof shall terminate and Lessee
shall immediately surrender possession of the Premises to Lessor. In Such event
Lessor shall be entitled to recover from Lessee: (i) the worth at the time of
the award of the unpaid rent which had been earned at the time of termination,
(ii) the worth at the time of award of the amount by which the unpaid rent which
would have been earned after termination until the time of award exceeds the
amount of such rental loss that the Lessee proves could have beer reasonably
avoided: (iii) the worth at the time of award of the amount by which the unpaid
rent for the balance of the term after the time of award exceeds the amount of
such rental loss that the Lessee proves could be reasonably avoided; and (iv)
any other amount necessary to compensate Lessor for all the detriment
proximately caused by the Lessee's failure to perform its obligations under this
Lease or which in the ordinary course of things would be likely to result
therefrom, including but not limited to the cost of recovering possession of the
Premises, expenses of reletting, including necessary renovation and alteration
of the Premises, reasonable attorneys' fees, and that portion of the leasing
commission paid by Lessor applicable to the unexpired term of this Lease. The
worth at the time of award of the amount referred to in provision (iii) of the
prior sentence shall be computed by discounting Such amount at the discount rate
of the Federal Reserve Bank of San Francisco at the time of award plus one
percent (1%). Efforts by Lessor to mitigate damages caused by Lessee's Default
or Breach of this Lease shall nor waive Lessor's right to recover damages under
this Paragraph. If termination of this Lease is obtained through the provisional
remedy of unlawful detainer, Lessor shall have the right to recover in such
proceeding the unpaid rent and damages as are recoverable therein, or Lessor may
reserve therein the right to recover all or any part thereof in a separate suit
for such rent and/or damages. If a notice and grace period required under
subparagraphs 13.1 (b), (c) or (d) was not previously given, a notice to pay
rent or quit, or to perform or quit, as the case may be, given to Lessee under
any statute authorizing the forfeiture of leases for unlawful detainer shall
also constitute the applicable notice for grace period purposes required by
subparagraphs 13.1(b), (c) or (d). In such case, the applicable grace period
under subparagraphs 13.1(b), (c) or (d) and under the unlawful detainer statute
shall run concurrently after the one such statutory notice, and the failure of
Lessee to cure the Default within the greater of the two such grace periods
shall constitute both an unlawful detainer and a Breach of this Lease entitling
Lessor to the remedies provided for in this Lease and/or by said statute.
(b) Continue the Lease and Lessee's right to possession in effect (in
California under California Civil Code Section 1951.4) after Lessee's Breach and
abandonment and recover the rent as it becomes due, provided Lessee has the
right to sublet or assign, subject only to reasonable limitations. See
Paragraphs 12 and 36 for the limitations on assignment and subletting which
limitations Lessee and Lessor agree are reasonable. Acts of maintenance or
preservation, efforts to relet the Premises, or the appointment of a receiver to
protect the Lessor's interest under the Lease, shall not constitute a
termination of the Lessee's right to possession.
(c) Pursue any other remedy now or hereafter available to Lessor under
the laws or judicial decisions of the state wherein the Premises are located.
(d) The expiration or termination of this Lease and/or the termination
of Lessee's right to possession shall not relieve Lessee from liability under an
indemnity provisions of this Lease as to matters occurring or accruing during
the term hereof or by reason of Lessee's Occupancy of the Premises.
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13.3 INDUCEMENT RECAPTURE IN EVENT OF BREACH. Any agreement by Lessor for
free or abated rent or other charges applicable to the Premises or to the giving
or paying by Lessor to or for Lessee of any cash or other bonus, inducement or
consideration for Lessee's entering into this Lease, all of which concessions
are hereinafter referred to as "INDUCEMENT PROVISIONS," shall be deemed
conditioned upon Lessee's full and faithful performance of all of the terms,
covenants and conditions of this Lease to be performed or observed by Lessee
during the term hereof as the same may be extended. Upon the occurrence of a
Breach of this Lease by Lessee, as defined in Paragraph 13.1, any such
inducement Provision shall automatically be deemed deleted from this Lease and
of no further force or effect, and any rent, other charge, bonus, inducement or
consideration theretofore abated, given or paid by Lessor under such an
inducement provision shall be immediately due and payable by Lessee to Lessor,
and recoverable by Lessor as additional rent due under this Lease
notwithstanding any subsequent cure of said Breach by Lessee. The acceptance by
Lessor of rent or the cure of the Breach which initiated the operation of this
Paragraph shall not be deemed a waiver by Lessor of the provisions of this
Paragraph unless specifically so stated in writing by Lessor at the time of such
acceptance.
13.4 LATE CHARGES. Lessee hereby acknowledges that late payment by Lessee
to Lessor of rent and other sums due hereunder will cause Lessor to include
costs not contemplated by this Lease, the exact amount of which will be
extremely difficult to ascertain. Such costs include, but are not limited to,
processing and accounting charges, and late charges which may be imposed upon
Lessor by the terms of any ground lease, mortgage or trust deed covering the
Premises. Accordingly, if any installment of rent or any other sum due from
Lessee shall not be received by Lessor or Lessor's designee within five (5) days
after such amount shall be due, then, without any requirement for notice to
Lessee, Lessee shall pay to Lessor a late charge equal to six percent (6%) of
such overdue amount. The parties hereby agree that such late charge represents a
fair and reasonable estimate of the costs Lessor will incur by reason of that
payment by Lessee. Acceptance of such late charge by Lessor shall in no event
constitute a waiver of Lessee's Default or Breach with respect to such overdue
amount, nor prevent Lessor from exercising any of the other rights and remedies
granted hereunder. In the event that a late charge is payable hereunder whether
or not collected, for three (3) consecutive installments of Base Rent, then
notwithstanding Paragraph 4.1 or any other provision of this Lease to the
contrary, Base Rent shall, at Lessor's option, become due and payable quarterly
in advance.
13.5 BREACH BY LESSOR. Lessor shall not be deemed in breach of this Lease
unless lessor fails within a reasonable time to perform an obligation required
to be performed by Lessor. For purpose of this Paragraph 13.5 a reasonable time
shall in no event be less than thirty (30) days after receipt by Lessor, and by
the holders of any ground lease, mortgage or deed of trust covering the Premises
whose name and address shall have been furnished Lessee in writing for such
purpose, of written notice specifying wherein such obligation of Lessor has not
been performed; provided, however, that if the nature of Lessor's obligation is
such that more than thirty (30) days after such notice are reasonably required
for its performance, then Lessor shall not be in breach of this Lease if
performance is commenced within such thirty (30) day period and thereafter
diligently pursued to completion.
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14. CONDEMNATION. If the Premises or any portion thereof are taken under the
power of eminent domain or sold under the threat of the exercise of said power
(all of which are herein called "CONDEMNATION"), this Lease shall terminate as
to the part so taken as of the date the condemning authority takes title or
possession, whichever first occurs. If more than ten percent (10%) of the floor
area of the Premises, or more than twenty-five percent (25%) of the land area
not occupied by any building, is taken by condemnation, Lessee may, at Lessee's
option, to be exercised in writing within ten (10) days after Lessor shall have
given Lessee written notice of such taking (or in the absence of such notice,
within ten (10) days after the condemning authority shall have taken
possession.) terminate this Lease as of the date the condemning authority takes
such possession. If Lessee does not terminate this Lease in accordance with the
foregoing, this Lease shall remain in full force and effect as to the portion of
the Premises remaining, except that the Base Rent shall be reduced in the same
proportion as the rentable floor area of the Premises taken bears to the total
rentable floor area of the building located on the Premises. No reduction of
Base Rent shall occur if the only portion of the Premises taken is land on which
there is no building. Any award for the taking of all or any part of the
Premises under the power of eminent domain or any payment made under threat of
the exercise of such power shall be the property of Lessor, whether such award
shall be made as compensation for diminution in value of the leasehold or for
the taking of the fee, or as severance damages; provided, however, that Lessee
shall be entitled to any compensation separately awarded to Lessee for Lessee's
relocation expenses and/or loss of Lessee's Trade Fixtures. In the event that
this Lease is not terminated by reason of such condemnation, Lessor shall to the
extent of its net severance damages received, over and above the legal and other
expenses incurred by Lessor in the condemnation matter, repair any damage to the
Premises caused by such condemnation, except to the extent that Lessee has been
reimbursed therefor by the condemning authority. Lessee shall be responsible for
the payment of any amount in excess of such net severance damages required to
complete such repair.
15. BROKER'S FEE.
15.1 The Brokers named in Paragraph 1.10 are the procuring causes of this
Lease.
15.2 Upon execution of this Lease by both Parties, lessor shall pay to said
Brokers jointly, or in such separate shares as they may mutually designate in
writing, a fee as set forth in a separate written agreement between Lessor and
said Brokers (or in the event there is no separate written agreement between
lessor and said Brokers, the sum for brokerage services rendered by said Brokers
to lessor in this transaction.
15.5 Lessee and Lessor each represent and warrant to the other that it has
had no dealings with any person, firm, broker or finder (other than the Brokers,
if any named in paragraph 1.10) in connection with the negotiation of this Lease
and/or the consummation of the transaction contemplated hereby, and that no
broker or other person, firm or entity other than said named Brokers is entitled
to any commission or finder's fee in connection with said transaction. Lessee
and lessor do each hereby agree to indemnify, protect, defend and hold the other
harmless from and against liability for compensation or charges which may be
claimed by any such unnamed broker, finder or other similar party by reason of
any dealings or actions of the indemnifying Party, including any costs,
expenses, attorneys' fees reasonably incurred with respect thereto.
15.6 Lessor and Lessee herby consent to and approve all agency
relationships, including dual agencies, indicated in Paragraph 1.10.
16. TENANCY STATEMENT.
16.1 Each Party (as "RESPONDING PARTY") shall within ten (10) days after
written notice from the other Party (the "REQUESTING PARTY") execute,
acknowledge and deliver to the Requesting Party a statement in writing in form
similar to the then most current "Tenancy Statement" form published by the
American Industrial Real Estate Association, plus such additional information,
confirmation and/or statements as may be reasonably requested by the Requesting
Party.
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16.2 If Lessor desires to finance, refinance, or sell the Premises, any
part thereof, or the building of which the Premises are a part, Lessee and all
Guarantors of Lessee's performance hereunder shall deliver to any potential
lender or purchaser designated by Lessor such financial statements of Lessee and
such Guarantors as may be reasonably required by such lender or purchaser,
including but not limited to Lessee's financial statements for the past three
(3) years. All such financial statements shall be received by Lessor and such
lender or purchaser in confidence and shall be used only for the purposes herein
set forth.
17. LESSOR'S LIABILITY. The term "LESSOR" as used herein shall mean the owner or
owners at the time in question of the fee title to the Premises, or, if this is
a sublease, of the Lessee's interest in the prior lease in the event of a
transfer of Lessor's title or interest in the Premises or in this Lease. Lessor
shall deliver to the transferee or assignee (in cash or by credit) any unused
Security Deposit held by Lessor at the time of such transfer or assignment,
except as provided in Paragraph 15, upon such transfer or assignment and
delivery of the Security Deposit, as aforesaid, the prior Lessor shall be
relieved of all liability with respect to the obligations and/or covenants under
this Lease thereafter to be performed by the Lessor. Subject to the foregoing,
the obligations and/or covenants in this Lease to be performed by the Lessor
shall be binding only upon the Lessor as hereinabove defined.
18. SEVERABILITY. The invalidity of any provision of this lease, as determined
by a court of competent jurisdiction, shall in no way affect the validity of any
other provision hereof.
19. INTEREST ON PAST-DUE OBLIGATIONS. Any monetary payment due Lessor hereunder
other than late charges, not received by Lessor within thirty (30) days
following the date on which it was due, shall bear interest from the
thirty-first (31st) day after it was due at the rate of 12% per annum, but not
exceeding the maximum rate allowed by law, in addition to the late charge
provided for in Paragraph 13.4.
20. TIME OF ESSENCE. Time is of the essence with respect to the performance of
all obligations to be performed or observed by the Parties under this Lease.
21. RENT DEFINED. All monetary obligations of Lessee to Lessor under the terms
of this Lease are deemed to be rent.
22. NO PRIOR OR OTHER AGREEMENTS; BROKER DISCLAIMER. This Lease contains all
agreements between the Parties with respect to any matter mentioned herein, and
no other prior or contemporaneous agreement or understanding shall be effective.
Lessor and Lessee each represents and warrants to the Brokers that it has made,
and is relying solely upon its own investigation as to the nature, quality,
character and financial responsibility of the other Party to this Lease and as
to the nature, quality and character of the Premises. Brokers have no
responsibility with respect thereto or with respect to any default or breach
hereof by either Party. See Paragraph 26 of addendum attached hereto.
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23. NOTICES.
23.1 All notices required or permitted by this ease shall be in writing and
may be delivered in person (by hand or by messenger or courier service) or may
be sent by regular, certified or registered mail or U.S. Postal Service Express
Mail, with postage prepaid, or by facsimile transmission, and shall be deemed
sufficiently given if served in a manner specified in this Paragraph 23. The
addresses noted adjacent to a Party's signature on this Lease shall be that
Party's address for delivery or mailing of notice purposes. Either Party may by
written notice to the other specify a different address for notice purposes,
except that upon Lessee's taking possession of the Premises, the Premises shall
constitute Lessee's address for the purpose of mailing or delivering notices to
Lessee. A copy of all notices required or permitted to be given to Lessor
hereunder shall be concurrently transmitted to such party or parties at such
addresses as Lessor may from time to time hereafter designate by written notice
to Lessee.
23.2 Any notice sent by registered or certified mail, return receipt
requested, shall be deemed given on the date of delivery shown on the receipt
card, or if no delivery date is shown, the postmark thereon. If sent by regular
mail the notice shall be deemed given forty-eight (48) hours after the same is
addressed as required herein and mailed with postage prepaid. Notices delivered
by United States Express Mail or overnight courier that guarantees next day
delivery shall be deemed given twenty-four (24) hours after delivery of the same
to the United States Postal Service or courier. If any notice is transmitted by
facsimile transmission or similar means, the same shall be deemed served or
delivered upon telephone confirmation of receipt of the transmission thereof,
provided a copy is also delivered via delivery or mail. If notice is received on
a Sunday or legal holiday, it shall be deemed received on the next business day.
24. WAIVERS. No waiver by Lessor of the Default or Breach of any term,
covenant or condition hereof by Lessee, shall be deemed a waiver of any other
term covenant or condition hereof, or of any subsequent Default or Breach by
Lessee of the same or of any other term, covenant or condition hereof. Lessor's
consent to, or approval of, any act shall not be deemed to render unnecessary
the obtaining of Lessor's consent to, or approval of, any subsequent or similar
act by Lessee or be construed as the basis of an estoppel to enforce the
provision or provisions of this Lease requiring such consent. Regardless of
Lessor's knowledge of a Default or Breach at the time of accepting rent, the
acceptance of rent by Lessor shall not be a waiver of any preceding Default or
Breach by Lessee of any provision hereof, other than the failure of Lessee to
pay the particular rent so accepted. Any payment given Lessor by Lessee may be
accepted by Lessor on account of moneys or damages due lessor, notwithstanding
any qualifying statements or conditions made by Lessee in connection therewith
which such statements and/or conditions shall be of no force or effect
whatsoever unless specifically agreed to in writing by Lessor at or before the
time of deposit of such payment.
25. RECORDING. Either Lessor or Lessee shall, upon request of the other,
execute, acknowledge and deliver to the other a short form memorandum of this
Lease for recording purposes. The Party requesting recordation shall be
responsible for payment of any fees or taxes applicable thereto.
26. NO RIGHT TO HOLDOVER. Lessee has no right to retain possession of the
Premises or any part thereof beyond the expiration or earlier termination of
this Lease. See paragraph 26 of addendum attached hereto.
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27. CUMULATIVE REMEDIES. No remedy or election hereunder shall be deemed
exclusive but shall wherever possible, be cumulative with all other remedies at
law or in equity.
28. COVENANTS AND CONDITIONS. All provisions on this Lease to be observed or
performed by Lessee are both covenants and conditions.
29. BINDING EFFECT; CHOICE OF LAW. This Lease shall be binding upon the parties,
their personal representatives, successors and assigns and be governed by the
laws of the State in which the Premises are located. Any litigation between the
Parties hereto concerning this Lease shall be initiated in the county in which
the Premises are located.
30. SUBORDINATION; ATTORNMENT; NON-DISTURBANCE.
30.1 SUBORDINATION. This Lease and any Option granted hereby shall be
subject and subordinate to any ground lease, mortgage, deed of trust, or other
hypothecation or security device (collectively, "SECURITY DEVICE"), now or
hereafter placed by Lessor upon the real property of which the Premises are a
part, to any and all advances made on the security thereof, and to all renewals,
modifications, consolidations, replacements and extensions thereof. Lessee
agrees that the Lenders holding any such Security Device shall have no duty,
liability or obligation to perform any of the obligations of Lessor under this
Lease, but that in the event of Lessor's default with respect to any such
obligation, Lessee will give any Lender whose name and address have been
furnished Lessee in writing for such purpose notice of Lessor's default and
allow such Lender thirty (30) days following receipt of such notice for the cure
of said default before invoking any remedies Lessee may have by reason thereof.
If any Lender shall elect to have this Lease and/or any Option granted hereby
superior to the lien of its Security Device and shall give written notice
thereof to Lessee, this Lease and such Options shall be deemed prior to such
Security Device, notwithstanding the relative dates of the documentation or
recordation thereof.
30.2 ATTORNMENT. Subject to the non-disturbance provisions of Paragraph
30.3, Lessee agrees to attorn to a Lender or any other party who acquires
ownership of the Premises by reason of a foreclosure of a Security Device, and
that in the event of such foreclosure, such new owner shall not: (i) be liable
for any act or omission of any prior lessor or with respect to events occurring
prior to acquisition of ownership, (ii) be subject to any offsets or defenses
which Lessee might have against any prior lessor, or (iii) be bound by
prepayment of more than one (1) month's rent.
30.3 NON-DISTURBANCE. With respect to Security Devices entered into by
Lessor after the execution of this Lease, Lessee's subordination of this Lease
shall be subject to receiving assurance (a "NON-DISTURBANCE AGREEMENT") from the
Lender that Lessee's possession and this Lease, including any options to extend
the term hereof, will not be disturbed so long as Lessee is not in Breach hereof
and attorns to the record owner of the Premises.
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30.4 SELF-EXECUTING. The agreements contained in this Paragraph 30 shall be
effective without the execution of any further documents; provided, however,
that, upon written request from Lessor or a Lender in connection with a sale,
financing or refinancing of the Premises, Lessee and Lessor shall execute such
further writings as may be reasonably required to separately document any such
subordination or non-subordination, attornment and/or non-disturbance agreement
as is provided for herein.
31. ATTORNEY'S FEES. If any Party or Broker brings an action or proceeding to
enforce the terms hereof or declare rights hereunder, the Prevailing Party (as
hereafter defined) or Broker in any such proceeding, action, or appeal thereon,
shall be entitled to reasonable attorney's fees. Such fees may be awarded in the
same suit or recovered in a separate suit, whether or not such action or
proceeding is pursued to decision or judgment. The term, "PREVAILING PARTY"
shall include, without limitation, a Party or Broker who substantially obtains
or defeats the relief sought, as the case may be, whether by compromise,
settlement, judgment, or the abandonment by the other Party or Broker of its
claim or defense. The attorney's fees award shall not be computed in accordance
with any court fee schedule, but shall be such as to fully reimburse all
attorney's fees reasonably incurred. Lessor shall be entitled to attorney's
fees, costs and expenses incurred in the preparation and service of notices of
Default and consultations in connection therewith, whether or not a legal action
is subsequently commenced in connection with such Default or resulting Breach.
32. LESSOR'S ACCESS; SHOWING PREMISES; REPAIRS. Lessor and Lessor's agents shall
have the right to enter the Premises at any time, in the case of an emergency,
and otherwise at reasonable times for the purpose of showing the same to
prospective purchasers, lenders, or lessees, and making such alterations,
repairs, improvements or additions to the Premises or to the building of which
they are a part, as Lessor may reasonably deem necessary. Lessor may at any time
place on or about the Premises or building any ordinary "For Sale" signs and
Lessor may at any time during the last one hundred twenty (120) days of the term
hereof place on or about the Premises any ordinary "For Lease" signs. All such
activities of Lessor shall be without abatement of rent or liability to Lessee.
33. AUCTIONS. Lessee shall not conduct, nor permit to be conducted, either
voluntarily or involuntarily, any auction upon the Premises without first having
obtained Lessor's prior written consent. Notwithstanding anything to the
contrary in this Lease, Lessor shall not be obligated to exercise any standard
of reasonableness in determining whether to grant such consent.
34. SIGNS. Lessee shall not place any sign upon the Premises, except that Lessee
may, with Lessor's prior written consent, install (but not on the roof) such
signs as are reasonably required to advertise Lessee's own business. The
installation of any sign on the Premises by or for Lessee shall be subject to
the provisions of Paragraph 7 (Maintenance, Repairs, Utility Installations,
Trade Fixtures and Alterations). Unless Otherwise expressly agreed herein.
Lessor reserves all rights to the use of the roof and the right to install. and
all revenues from the installation of, such advertising signs on the Premises.
including the roof, as do not unreasonably interfere with the conduct of
Lessee's business.
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35. TERMINATION; MERGER. Unless specifically stated otherwise in writing by
Lessor, the voluntary or other surrender of this Lease by Lessee, the mutual
termination or cancellation hereof, or a termination hereof by Lessor for Breach
by Lessee, shall automatically terminate any sublease or lesser estate in the
terms; provided, however Lessor shall, in the event of any such surrender,
termination or cancellation, have the option to continue any one or all of any
existing subtenancies. Lessor's failure within ten (10) days following any such
event to make a written election to the contrary by written notice to the holder
of any such lesser interest, shall constitute Lessor's election to have such
event constitute the termination of such interest.
36. CONSENTS.
(a) Except for Paragraph 33 hereof (Auctions) or as otherwise provided
herein, wherever in this Lease the consent of a Party is required to an act by
or for the other Party, such consent shall not be unreasonably withheld or
delayed. Lessor's actual reasonable costs and expenses (including but not
limited to architects', attorneys'. engineers' or other consultants' fees)
incurred in the consideration of, or response to, a request by Lessee for any
Lessor consent pertaining to this Lease or the Premises, including but not
limited to consents to an assignment, a subletting or the presence or use of a
Hazardous Substance, practice or storage tank, shall be paid by Lessee to Lessor
upon receipt of an invoice and supporting documentation therefor. Subject to
Paragraph 12.2(e) (applicable to assignment or subletting), Lessor may, as a
condition to considering any such request by Lessee, require that Lessee deposit
with Lessor an amount of money (in addition to the Security Deposit held under
Paragraph 5) reasonably calculated by Lessor to represent the cost Lessor will
incur in considering and responding to Lessee's request. Except as otherwise
provided, any unused portion of said deposit shall be refunded to Lessee without
interest. Lessor's consent to any act, assignment of this Lease or subletting of
the Premises by Lessee shall not constitute an acknowledgement that no Default
or Breach by Lessee of this Lease exists, nor shall such consent be deemed a
waiver of any then existing Default or Breach, except as may be otherwise
specifically stated in writing by Lessor at the time of such consent.
(b) All conditions to Lessor's consent authorized by this Lease are
acknowledged by Lessee as being reasonable. The failure to specify herein any
particular condition to Lessor's consent shall not preclude the imposition by
Lessor at the time of consent of such further or other conditions as are then
reasonable with reference to the particular matter for which consent is being
given.
37. GUARANTOR.
37.1 If there are to be any Guarantors of this Lease per Paragraph 1.11,
the form of the guaranty to be executed by each such Guarantor shall be in the
form and each said Guarantor shall have the same obligations as Lessee under
this Lease, including but not limited to the obligation to provide the Tenancy
Statement and information called for by Paragraph 16.
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37.2 It shall constitute a Default of the Lessee under this Lease if any
such Guarantor fails or refuses, upon reasonable request by Lessor to give: (a)
evidence of the due execution of the guaranty called for by this Lease,
including the authority of the Guarantor (and of the party signing on
Guarantor's behalf) to obligate such Guarantor on said guaranty, and including
in the case of a corporate Guarantor, a certified copy of a resolution of its
board of directors authorizing the making of such guaranty, together with a
certificate of incumbency showing the signature of the persons authorized to
sign on its behalf, (b) current financial statements of Guarantor as may from
time to time be requested by Lessor, (c) a Tenancy Statement, or (d) written
confirmation that the guaranty is still in effect.Attached hereto as Exhibit E.
38. QUIET POSSESSION. Upon payment by Lessee of the rent for the Premises and
the observance and performance of all of the covenants, conditions and
provisions on Lessee's part to be observed and performed under this Lease,
Lessee shall have quiet possession of the Premises for the entire term hereof
subject to all of the provisions of this Lease
40. MULTIPLE BUILDINGS. If the Premises are part of a group of buildings
controlled by Lessor, Lessee agrees that it will abide by, keep and observe all
reasonable rules and regulations which Lessor may make from time to time for the
management, safety, care, and cleanliness of the grounds, the parking and
unloading of vehicles and the preservation of good order, as well as for the
convenience of other occupants or tenants of such other buildings and their
invitees, and that Lessee will pay its fair share of common expenses incurred in
connection therewith.
41. SECURITY MEASURES. Lessee hereby acknowledges that the rental payable to
Lessor hereunder does not include the cost of guard service or other security
measures, and that Lessor shall have no obligation whatsoever to provide same.
Lessee assumes all responsibility for the protection of the Premises, Lessee,
its agents and invitees and their property from the ads of third parties.
42. RESERVATIONS. Lessor reserves to itself the right, from time to time, to
grant, without the consent or joinder of Lessee, such easements, rights and
dedications that Lessor deems necessary, and to cause the recordation of parcel
maps and restrictions, so long as such easements, rights, dedications, maps and
restrictions do not unreasonably interfere with the use of the Premises by
Lessee. Lessee agrees to sign any documents reasonably requested by Lessor to
effectuate any such easement rights, dedication, map or restrictions.
43. PERFORMANCE UNDER PROTEST. If at any time a dispute shall arise as to any
amount or sum of money to be paid by one Party to the other under the provisions
hereof, the Party against whom the obligation to pay the money is asserted shall
have the right to make payment "under protest" and such payment shall not be
regarded as a voluntary payment and there shall survive the right on the part of
said Party to institute suit for recovery of such sum. If it shall be adjudged
that there was no legal obligation on the part of said Party to pay such sum or
any part thereof, said Party shall be entitled to recover such sum or so much
thereof as it was not legally required to pay under the provisions of this
Lease.
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44. AUTHORITY. If either Party hereto is a corporation, trust, or general or
limited partnership, each individual executing this Lease on behalf of such
entity represents and warrants that he or she is duly authorized to execute and
deliver this Lease on its behalf. If Lessee is a corporation, trust or
partnership, Lessee shall, within thirty (30) days after request by Lessor,
deliver to Lessor evidence satisfactory to Lessor of such authority.
45. CONFLICT. Any conflict between the printed provisions of this Lease and the
typewritten or handwritten provisions shall be controlled by the typewritten or
handwritten provisions.
46. OFFER. Preparation of this Lease by Lessor or Lessor's agent and submission
of same to Lessee shall not be deemed an offer to lease to Lessee. This Lease is
not intended to be binding until executed by all Parties hereto.
47. AMENDMENTS. This Lease may be modified only in writing, signed by the
Parties in interest at the time of the modification. The parties shall amend
this Lease from time to time to reflect any adjustments that are made to the
Base Rent or other rent payable under this Lease. As long as they do not
materially change Lessee's obligations hereunder, Lessee agrees to make such
reasonable non-monetary modifications to this Lease as may be reasonably
required by an institutional, insurance company, or pension plan Lender in
connection with the obtaining of normal financing or refinancing of the property
of which the Premises are a part.
48. MULTIPLE PARTIES. Except as otherwise expressly provided herein, if more
than one person or entity is named herein as either Lessor or Lessee, the
obligations of such Multiple Parties shall be the joint and several
responsibility of all persons or entities named herein as such Lessor or Lessee.
LESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM AND
PROVISION CONTAINED HEREIN, AND BY THE EXECUTION OF THIS LEASE SHOW THEIR
INFORMED AND VOLUNTARY CONSENT THERETO. THE PARTIES HEREBY AGREE THAT, AT THE
TIME THIS LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE COMMERCIALLY REASONABLE
AND EFFECTUATE THE INTENT AND PURPOSE OF LESSOR AND LESSEE WITH RESPECT TO THE
PREMISES.
IF THIS LEASE HAS BEEN FILLED IN, IT HAS BEEN PREPARED FOR SUBMISSION TO
YOUR ATTORNEY FOR HIS APPROVAL. FURTHER, EXPERTS SHOULD BE CONSULTED TO
EVALUATE THE CONDITION OF THE PROPERTY AS TO THE POSSIBLE PRESENCE OF
ASBESTOS, STORAGE TANKS OR HAZARDOUS SUBSTANCES. NO REPRESENTATION OR
RECOMMENDATION IS MADE BY THE AMERICAN INDUSTRIAL REAL ESTATE
ASSOCIATION OR BY THE REAL ESTATE BROKER(S) OR THEIR AGENTS OR EMPLOYEES
AS TO THE LEGAL SUFFICIENCY, LEGAL EFFECT, OR TAX CONSEQUENCES OF THIS
LEASE OR THE TRANSACTION TO WHICH IT RELATES; THE PARTIES SHALL RELY
SOLELY UPON THE ADVICE OF THEIR OWN COUNSEL AS TO THE LEGAL AND TAX
CONSEQUENCES OF THIS LEASE. IF THE SUBJECT PROPERTY IS LOCATED IN A
STATE OTHER THAN CALIFORNIA, AN ATTORNEY FROM THE STATE WHERE THE
PROPERTY IS LOCATED SHOULD BE CONSULTED.
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The parties hereto have executed this Lease at the place on the dates specified
above to their respective signatures.
LESSOR: LESSEE:
SFERS REAL ESTATE CORP. DD, PRI MEDICAL TECHNOLOGIES, INC.,
a Delaware corporation a Nevada corporation
BY: RREEF MANAGEMENT COMPANY,
a Delaware corporation
BY: /s/ ▇▇▇ ▇▇▇▇▇▇
---------------------------------
▇▇▇ ▇▇▇▇▇▇
President
By:/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------- DATED:10/12/2006
▇▇▇▇▇ ▇▇▇▇▇▇
Vice President
DATED:10/12/2006 BY:/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Chief Financial Officer
DATED:10/12/2006
NOTICE ADDRESS: NOTICE ADDRESS:
RREEF MANAGEMENT COMPANY PRI MEDICAL TECHNOLOGIES, INC.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇. ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, #▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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ADDENDUM NO. 1
----------------
THIS ADDENDUM NO. 1 ("Addendum") is attached to and hereby made a part of that
certain AIR Lease, dated, for reference purposes only, September 19, 2006,
between SFERS REAL ESTATE CORP. DD, a Delaware corporation, as Lessor and PRI
MEDICAL TECHNOLOGIES, INC., a Nevada corporation, as Lessee for the Premises
known as ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ consisting of
approximately 12,842 square feet. All of the following terms and conditions are
hereby incorporated in the Lease and made a part thereof. In the event of any
conflict between any of the terms and conditions contained in the standard
printed form Lease as compared to the terms and conditions contained in the
Addendum, the terms and conditions contained in this Addendum shall be
controlling. The term "Lease" as used herein shall mean the printed form Lease
as modified by any Exhibits and Addenda. Unless defined otherwise, all
capitalized terms used herein shall have the same meanings as defined in the
printed form Lease.
1.5 MONTHLY INSTALLMENTS OF BASE RENT.
Lessee agrees to pay the annual Base Rent by paying the monthly installments of
Base Rent pursuant to Paragraph 4 on or before the first day of each month of
the Term. In the event the Lease Commencement Date is other than the first day
of any calendar month, Base Rent will be prorated according to Paragraph 4 of
this Lease. The monthly amount due is as follows:
For the period from Commencement Date through January 31, 2007 of the Lease
Term, Eight Thousand Six Hundred Four and 14/100 ($8,604.14) Dollars per month.
(January's 2007 Base Rent to be prepaid upon execution.)
For the period from February 1, 2007 through March 31, 2007 of the Lease Term,
Zero and 00/100 ($0.00) Dollars per month.
For the period from April 1, 2007 through December 31, 2007 of the Lease Term,
Eight Thousand Six Hundred Four and 14/100 ($8,604.14) Dollars per month.
For the period from January 1, 2008 through December 31, 2008 of the Lease Term,
Eight Thousand Nine Hundred Forty-Eight and 31/100 ($8,948.31) Dollars per
month.
For the period from January 1, 2009 through December 31, 2009 of the Lease Term,
Nine Thousand Three Hundred Six and 24/100 ($9,306.24) Dollars per month.
For the period from January 1, 2010 through December 31, 2010 of the Lease Term,
Nine Thousand Six Hundred Seventy-Eight and 49/100 ($9,678.49) Dollars per
month.
For the period from January 1, 2011 through February 28, 2012 of the Lease Term,
Ten Thousand Sixty-Five and 63/100 ($10,065.63) Dollars per month.
6.1 USE.
The Premises are to be used solely for the purposes stated in Paragraph 1.8 and
Paragraph 6 of this Lease. Lessee shall not do or permit anything to be done in
or about the Premises which will in any way obstruct or interfere with the
rights of other Lessees or occupants of the Building and Industrial Center or
injure, annoy, or disturb them or allow the Premises to be used for any
improper, immoral, unlawful, or objectionable purpose. Lessee shall not do,
permit or suffer in, on or about the Premises the sale of any alcoholic liquor
without the written consent of Lessor first obtained, or the commission of any
waste.
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Lessor shall comply with all governmental laws, ordinances and regulations
applicable to the use of the Premises and its occupancy and shall promptly
comply with all governmental orders and directions for the correction,
prevention and abatement of any violations in or upon, or in connection with,
the Premises, all at Lessee's sole expense. Lessee shall not do or permit
anything to be done on or about the Premises or bring or keep anything into the
Premises which will in any way increase the rate of, invalidate or prevent the
procuring of any insurance protecting against loss or damage to the Building or
the Industrial Center or any of its contents by fire or other casualty or
against liability for damage to property or injury to persons in or about the
Building or the Industrial Center or any part thereof. Lessee shall not, and
shall not direct, suffer or permit any of its agents, contractors, employees,
licensees or invitees to at any time handle, use, manufacture, store or dispose
of in or about the Premises or the Building and the Industrial Center any
(collectively "Hazardous Material") flammables, explosives, radioactive
materials, hazardous waste or materials, toxic wastes or materials, or other
similar substances, petroleum products or derivatives or any substance subject
to regulation by or under any federal, state and local laws and ordinances
relating to the protection of the environment or the keeping, use or disposition
of environmentally hazardous materials, substances or wastes, presently in
effect or hereafter adopted, all amendments to any of them, and all rules and
regulation issued pursuant to any of such laws or ordinances (collectively
"Environmental Laws"), nor shall Lessee suffer or permit any Hazardous Materials
to be used in any manner not fully in compliance with all Environmental Laws, in
the Premises or the Building and the Industrial Center appurtenant land or allow
the environment to become contaminated with Hazardous Materials. Notwithstanding
the foregoing, and subject to Lessor's prior consent, Lessee may handle, store,
use or dispose of products containing small quantities of Hazardous Materials
(such as aerosol cans containing insecticides, toner for copiers, paints, paint
remover and the like) to the extent customary and necessary for the use of the
Premises for general office purposes; provided that Lessee shall always handle,
store, use, and dispose of any such Hazardous Materials in a safe and lawful
manner and never allow such Hazardous Materials to contaminate the Premises,
Building or Industrial Center and appurtenant and or the environment. Lessee
shall protect, defend, indemnify and hold each of the Lessor Entities (as
defined in Paragraph 30) harmless from and against any and all of loss, claims,
liability or costs (including court costs and attorney's fees) incurred by
reason of any actual or asserted failure of Lessee to fully comply with all
applicable Environmental Laws or the presence, handling, use or disposition in
or from the Premises of any Hazardous Materials (even though permissible under
all applicable Environmental Laws or the Provisions of this Lease), or by reason
of any actual or asserted failure of Lessee to keep, observe, or perform any
provision of this section.
6.2 HAZARDOUS SUBSTANCES.
(a) Lessee agrees that Lessee, its agents and contractors, licensees, or
invitees shall not handle, use, manufacture, store or dispose of any flammables,
explosives, radioactive materials, hazardous wastes or materials, toxic wastes
or materials, or other similar substances, petroleum products or derivatives
(collectively "Hazardous Materials") on, under, or about the Premises, without
Lessor's prior written consent (which consent shall not be unreasonably withheld
as long as Lessee demonstrates and documents to Lessor's reasonable satisfaction
(i) that such Hazardous Materials (A) are necessary or useful to Lessee's
business; and (B) will be used, kept, stored and disposed of in compliance with
all laws relating to any Hazardous Materials so brought or used or kept in or
about the Premises; and (ii) that Lessee will give all required notices
concerning the presence in or on the Premises or the release of such Hazardous
Materials from the Premises) provided that Lessee may handle, store, use or
dispose of products containing small quantities of Hazardous Materials, which
products are of a type customarily found in offices and households (such as
2
aerosol cans containing insecticides, toner for copies, paints, paint remover,
and the like), provided further that Lessee shall handle, store, use and dispose
of any such Hazardous Materials in a safe and lawful manner and shall not allow
such Hazardous Materials to contaminate the Premises or the environment.
(b) Lessee further agrees that Lessee will not permit any substance
suspected of causing cancer or reproductive toxicity to come into contact with
groundwater under the Premises. Any such substance coming into contact with
groundwater shall be considered a Hazardous Material for purposes of this
Addendum.
(c) (i) Notwithstanding the provisions of Paragraph (a), Lessee may handle,
store, and use Hazardous Materials, limited to the types, amounts, and use
identified in the Hazardous Materials Exhibit attached hereto. If no Hazardous
Materials Exhibit is attached to this Lease, then this Paragraph (c) shall be of
no force and effect. Lessee hereby certifies to Lessor that the information
provided by Lessee pursuant to this Paragraph is true, correct, and complete.
Lessee covenants to comply with the use restrictions shown on the attached
Hazardous Materials Exhibit. Lessee shall secure and abide by all permits
necessary for Lessee's operations on the Premises. Lessee shall give or post all
notices required by all applicable laws pertaining to Hazardous Materials. If
Lessee shall at any time fail to comply with this Paragraph, Lessee shall
immediately notify Lessor in writing of such noncompliance.
(ii) Lessee shall provide Lessor with copies of any Material Safety Data
Sheets (as required by the Occupational Safety and Health Act) relating to any
Hazardous Materials to be used, kept, or stored at or on the Premises, at least
30 days prior to the first use, placement, or storage of such Hazardous Material
on the Premises. Lessor shall have 10 days following delivery of such Material
Safety Data Sheets to approve or forbid, in its sole discretion subject to the
limitation contained in Paragraph (a) above, such use, placement, or storage of
a Hazardous Material on the Premises.
(iii) Lessee shall not store hazardous wastes on the Premises for more
than 90 days; "hazardous waste" has the meaning given it by the Resource
Conservation and Recovery Act of 1976, as amended. Lessee shall not install any
underground or above ground storage tanks on the Premises. Lessee shall not
dispose of any Hazardous Material or solid waste on the Premises. In performing
any alterations of the Premises permitted by the Lease, Lessee shall not install
any Hazardous Material in the Premises without the specific consent of Lessor
attached as an exhibit to this Addendum.
(iv) Any increase in the premiums for necessary insurance on the
Property which arises from Lessee's use and/or storage of Hazardous Materials
shall be solely at Lessee's expense. Lessee shall procure and maintain at its
sole expense such additional insurance as may be necessary to comply with any
requirement of any Federal, State or local governmental agency with
jurisdiction.
(d) If Lessor, in its sole discretion, believes that the Premises or the
environment have become contaminated with Hazardous Materials that must be
removed under the laws of the state where the Premises are located, Lessor, in
addition to its other rights under this Lease, may enter upon the Premises and
obtain samples from the Premises, including without limitation the soil and
groundwater under the Premises, for the purposes of analyzing the same to
determine whether and to what extent the Premises or the environment have become
so contaminated. Lessee shall reimburse Lessor for the costs of any inspection,
sampling and analysis that discloses contamination for which Lessee is liable
under the terms of this Addendum. Lessee may not perform any sampling, testing,
or drilling to locate any Hazardous Materials on the Premises without Lessor's
prior written consent.
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(e) Without limiting the above, Lessee shall reimburse, defend, indemnify
and hold Lessor harmless from and against any and all claims, losses,
liabilities, damages, costs and expenses, including without limitation, loss of
rental income, loss due to business interruption, and attorneys fees and costs,
arising out of or in any way connected with the use, manufacture, storage, or
disposal of Hazardous Materials by Lessee, its agents or contractors on, under
or about the Premises including, without limitation, the costs of any required
or necessary investigation, repair, cleanup or detoxification and the
preparation of any closure or other required plans in connection herewith,
whether voluntary or compelled by governmental authority.
The indemnity obligations of Lessee under this clause shall survive any
termination of the Lease. At Lessor's option, Lessee shall perform any required
or necessary investigation, repair, cleanup, or detoxification of the Premises.
In such case, Lessor shall have the right, in its sole discretion, to approve
all plans, consultants, and cleanup standards. Lessee shall provide Lessor on a
timely basis with (i) copies of all documents, reports, and communications with
governmental authorities; and (ii) notice and an opportunity to attend all
meetings with regulatory authorities. Lessee shall comply with all notice
requirements and Lessor and Lessee agree to cooperate with governmental
authorities seeking access to the Premises for purposes of sampling or
inspection.
No disturbance of Lessee's use of the Premises resulting from activities
conducted pursuant to this Paragraph shall constitute an actual or constructive
eviction of Lessee from the Premises. In the event that such cleanup extends
beyond the termination of the Lease, Lessee's obligation to pay rent (including
additional rent, if any) shall continue until any cleanup required under this
Lease is completed and any certificate of clearance or similar document from the
applicable governmental agency has been delivered to Lessor. Rent during such
holdover period shall be at market rent; if 6.2 HAZARDOUS SUBSTANCES.
(Continued)
the parties are unable to agree upon the amount of such market rent, then Lessor
shall have the option of (a) increasing the rent for the period of such holdover
based upon the increase in the cost-of-living from the third month preceding the
commencement date to the third month preceding the start of the holdover period,
using such indices and assumptions and calculations as Lessor in its sole
reasonable judgment shall determine are necessary; or (b) having Lessor and
Lessee each appoint a qualified MAI appraiser doing business in the area; in
turn, these two independent MAI appraisers shall appoint a third MAI appraiser
and the majority shall decide upon the fair market rental for Premises as of the
expiration of the then current term.
Lessor and Lessee shall equally share in the expense of this appraisal
except that in the event the rent is found to be within ten percent of the
original rate quoted by Lessor, then Lessee shall bear the full cost of all the
appraisal process. In no event shall the rent be subject to determination or
modification by any person, entity, court, or authority other than as set forth
expressly herein, and in no event shall the rent for any holdover period be less
than the rent due in the preceding period.
(f) Notwithstanding anything set forth in this Lease, Lessee shall only be
responsible for contamination of Hazardous Materials or any cleanup resulting
directly therefrom, resulting from matters occurring or Hazardous Materials
deposited (other than by contractors, agents or representatives controlled by
Lessor) during the Lease term, and any other period of time during which Lessee
is in actual or constructive occupancy of the Premises. Lessee shall take
reasonable precautions to prevent the contamination of the Premises with
Hazardous Materials by third parties.
(g) It shall not be unreasonable for Lessor to withhold its consent to any
proposed Assignment or Sublease if (i) the proposed Assignee's or Sublessee's
anticipated use of the premises involves the generation, storage, use, treatment
or disposal of Hazardous Materials; (ii) the proposed Assignee or Sublessee has
been required by any prior lessor, lender, or governmental authority to take
4
remedial action in connection with Hazardous Materials contaminating a property
if the contamination resulted from such Assignee's or Sublessee's actions or use
of the property in question; or (iii) the proposed Assignee or Sublessee is
subject to an enforcement order issued by any governmental authority in
connection with the use, disposal, or storage of a hazardous material.
(h) Any of Lessee's insurance insuring against claims of the type dealt
with in this Addendum shall be considered primary coverage for claims against
the Property arising out of or under this Paragraph.
(i) In the event of (i) any transfer of Lessee's interest under this Lease;
or (ii) the termination of this Lease, by lapse of time or otherwise, Lessee
shall be solely responsible for compliance with any and all then effective
federal, state or local laws concerning (i) the physical condition of the
Premises, Building, or Property; or (ii) the presence of hazardous or toxic
materials in or on the Premises, Building, or Property (for example, the New
Jersey Environmental Cleanup Responsibility Act, the Illinois Responsible
Property Transfer Act, or similar applicable state laws), including but not
limited to any reporting or filing requirements imposed by such laws. Lessee's
duty to pay rent, additional rent, and percentage rent shall continue until the
obligations imposed by such laws are satisfied in full and any certificate of
clearance or similar document has been delivered to Lessor.
(j) No consent shall be binding, enforceable or effective against Lessor
unless in writing and signed by Lessor and attached as an amendment to this
Lease. If such consents are not in writing and signed by Lessor and attached to
this Lease, then such consents will be deemed withheld.
(k) Duty to inform Lessor.
If Lessee knows, or has reasonable cause to believe, that a Hazardous
Substance, or a condition involving or resulting from same, has come to be
located in, on, under or about the Premises, other than as previously consented
to by Lessor, Lessee shall immediately give written notice of such fact to
Lessor.
Lessee shall also immediately give Lessor a copy of any statement, report,
notice, registration, application, permit, business plan, license, claim, action
or proceeding given to, or received from, any governmental authority or private
party, or persons entering or occupying the Premises, concerning the presence,
spill, release, discharge of, or exposure to, any Hazardous Substance or
contamination in, on, or about the Premises, including but not limited to all
such documents as may be involved in any Reportable Uses involving the Premises.
7.2 LESSOR'S OBLIGATIONS; COMMON AREA, ROOF/BUILDING MAINTENANCE.
The Premises are a part of the industrial center commonly known as Shadow
Mountain Industrial Park ("Industrial Center") more particularly described on
Exhibit A attached hereto. Lessor shall be responsible for all landscape
maintenance and repair or replacement in the Industrial Center including, but
not limited to, all landscape plantings, and landscape sprinkler systems, common
area janitorial and sweeping services, and replacement and repairs, as
necessary, to the fire life safety equipment including monitoring and telephone,
to all sidewalk surfaces, parking areas (repairs, slurry coat and stripe),
roadways and miscellaneous exterior building maintenance and repair, including
light maintenance, roof repairs and clearing of roof debris, and exterior
painting. The cost of such maintenance, services, and repairs shall be
designated as ("Operating Expense Payments") and shall include all sums expended
by Lessor for the maintenance, repair and operations of the Industrial Center
(including the associated Common Areas), including, but not limited to the
following:
(a) wages and salaries (including management fees) of all employees,
agents, consultants and other individuals or entities engaged in the
operation, repair, replacement, maintenance, and security of the
Industrial Center, including taxes, insurance and benefits relating
thereto;
(b) all supplies and materials used in the operation, maintenance, repair,
replacement and security of the Industrial Center;
5
7.2 LESSOR'S OBLIGATIONS; COMMON AREA, ROOF/BUILDING MAINTENANCE. (Continued)
(c) annual cost of all Capital Improvements (as defined below) made to the
Industrial Center which although capital in nature can reasonably be
expected to reduce the normal operating costs of the Industrial
Center, as well as all Capital Improvements made in order to comply
with any law now or hereafter promulgated by any governmental
authority, as amortized over the useful economic life of such
improvements as determined by Landlord in its reasonable discretion
(without regard to the period over which such improvements may be
depreciated or amortized for federal income tax purposes);
(d) cost of all utilities paid by Lessor;
(e) cost of any insurance or insurance related expense applicable to the
Industrial Center and Lessor's personal property used in connection
therewith, including, but not limited to, the insurance costs of the
Common Area;
(f) cost of repairs, replacements and general maintenance of the
Industrial Center (including all truck court areas, paving and parking
areas, Common Area lighting facilities, fences, gates, water lines,
fire life safety equipment, sewer lines, rail spur areas and any other
item Lessor is obligated to repair or maintain), other than costs
necessary to assure the structural soundness of the roof, foundation
and exterior walls of the Industrial Center which are payable solely
by Lessor under this Paragraph 7.2;
(g) cost of service or maintenance contracts with independent contractors
for the operation, maintenance, repair, replacement or security of the
Industrial Center (including, without limitation, fire life safety
alarm service, exterior painting, trash collection, ice, debris and
waste removal and landscape maintenance);
(h) the cost to maintain and repair the exterior roof structure and
membrane;
(i) the cost of all accounting fees, management fees, legal fees and
consulting fees attributable to the operation, ownership, management,
maintenance or repair of the Industrial Center;
(j) payments made by Lessor under any easement, license, operating
agreement, declaration, restrictive covenant or other agreement
relating to the sharing of costs among property owners;
(k) reserves created by Lessor, in Lessor's sole discretion, for future
Operating Expenses or the future replacement of Capital Improvements;
(l) the cost of all business licenses, permits or similar fees relating to
the operation, ownership, repair or maintenance of the Industrial
Center, and
(m) the cost of any other item the cost of which is stated in this Lease
to be an Operating Expense.
6
For purposes of this Lease, a "Capital Improvement" shall be an improvement to
the Industrial Center that Lessor is obligated to make pursuant to this Lease,
the cost of which is not fully deductible in the year incurred in accordance
with generally accepted accounting principles; provided, however, that at
Lessor's option, the cost of painting all or part of the Industrial Center and
resurfacing and restriping roadways and parking areas shall be treated as an
expense and not as a Capital Improvement. Real Property Taxes (as defined below)
shall be reimbursed to Lessor as provided below and shall not be treated as an
Operating Expense. References to facilities, services, utilities or other items
in this Paragraph shall not impose an obligation on Lessor to have said
facilities or to provide said services unless such facilities and services
already exist at the Industrial Center.
Payment
Tenant's Percentage Share of Operating Expenses shall be payable by Lessee on
the same day as the Base Rent is due hereunder. In the event that Lessee pays
Lessor's estimate of Lessee's Percentage Share of Operating Expenses, Lessor
shall use its best efforts to deliver to Lessee within one hundred eighty (180)
days after the expiration of each calendar year a reasonably detailed statement
(the "Statement") showing Lessee's Percentage Share of the actual operating
Expenses incurred during such year. Lessor's failure to deliver the Statement to
Lessee within said period shall not constitute Lessor's waiver of its right to
collect said amounts or otherwise prejudice Lessor's rights hereunder. If
Lessee's payments under this paragraph during said calendar year exceed Lessee"
Percentage Share as indicated on the Statement, Lessee shall be entitled to
credit the amount of such overpayment against Lessee's Percentage Share of
Operating Expenses next falling due. If Lessee's payments under this paragraph
during said calendar year were less than Lessee's Percentage Share as indicated
on the Statement, Lessee shall pay to Lessor the amount of the deficiency within
thirty (30) days after delivery by Lessor to Lessee of the Statement. Lessor and
Lessee shall forthwith adjust between them by cash payment any balance
determined to exist with respect to that portion of the last calendar year for
which Lessee is responsible for Operating Expenses, notwithstanding that the
Lease term may have terminated before the end of such calendar year; and this
provision shall survive the expiration or earlier termination of the Lease.
Lessee's Percentage Share
"Lessee's Percentage Share" as used in this Lease shall mean the percentage of
the cost of Operating Expenses, Insurance and Real Property Taxes (as defined
below) for which Lessee is obligated to reimburse Lessor pursuant to this Lease.
Notwithstanding anything to the contrary contained in Paragraph 7.2, Lessor
shall have the right to determine Lessee's Percentage Share of the cost of
Operating Expenses, Insurance and Real Property Taxes using any one or more of
the following three methods, and Lessee hereby agrees that any one of the
following three methods of allocation is reasonable: (a) by multiplying the cost
of all Operating Expenses, Insurance or Real Property Taxes by a fraction, the
numerator of which is the number of square feet of leasable space in the
Premises and the denominator of which is the number of square feet of leasable
space in all buildings in the Industrial Center; or (b) (i) with respect to an
Operating Expenses, Insurance or
7
7.2 LESSOR'S OBLIGATIONS; COMMON AREA, ROOF/BUILDING MAINTENANCE. (Continued)
Real Property Taxes attributable solely to the Building, requiring Lessee to pay
that portion of the cost of the Operating Expenses, Insurance or Real Property
Taxes that is obtained by multiplying such cost by a fraction, the numerator of
which is the number of square feet of leasable space in the Premises and the
denominator of which is the number of square feet of leasable space in the
entire Building and (ii) with respect to an Operating Expenses, Insurance or
Real Property Taxes attributable to the Common Areas of the Industrial Center,
but not any particular building in the Industrial Center, requiring Lessee to
pay that portion of the cost of the Operating Expenses, Insurance or Real
Property Taxes that is obtained by multiplying such cost by a fraction, the
numerator of which is the number of square feet of leasable space in the
Premises and the denominator of which is the number of square feet of leasable
space in all buildings in the Industrial Center or (c) by allocating an
Operating Expenses, Insurance or Real Property Taxes in any other reasonable
manner, as determined by Lessor.
The term "rentable area" shall mean the rentable area of the Premises, the
Building or the Industrial Center as calculated by the Lessor on the basis of
the plans and specifications including a proportionate share of any Common
Areas. Lessee hereby accepts and agrees to be bound by the figures for the
rentable space footage of the Premises, the Building and the Industrial Center
and Lessee's Percentage Share (as defined in this Paragraph 7.2), however,
Lessor may adjust these figures if there is addition or subtraction to the
Building or Industrial Center, remeasurement or other circumstances reasonably
justifying adjustment. The term "Building" refers to the structure in which the
Premises are located and the Common Areas appurtenant thereto.
7.3 UTILITY INSTALLATIONS; TRADE FIXTURES; ALTERATIONS.
To prevent the violation of any roof warranty (if any), all roofing work must be
approved by Lessor in writing prior to commencement.
7.3(c) LIENS.
Notwithstanding the provisions set forth above, Lessee shall keep the Premises,
the Building and appurtenant land and Lessee's leasehold interest in the
Premises free from any lien arising out of any services, work or materials
performed, furnished, or contracted for by Lessee, or obligations incurred by
Lessee. In the event that Lessee fails, within ten (10) days following the
imposition of any such lien, to either cause the same to be released of record
or provide Lessor with insurance against the same issued by a major title
insurance company or such other protection against the same as Lessor shall
accept (such failure to constitute an Event of Default), Lessor shall have the
right to cause the same to be released by such means as it shall deem proper,
including payment of the claim giving rise to such lien. All such sums paid by
Lessor and all expenses incurred by it in connection therewith shall be payable
to it by Lessee within five (5) days of Lessor's demand.
8
7.4(c) SURRENDER OF PREMISES (continued from Lease)
1. Notwithstanding the provisions set forth above, Lessee shall arrange to meet
Lessor for two (2) joint inspections of the Premises, the first to occur at
least thirty (30) days (but no more than sixty (60) days) before the last day of
the Term, and the second to occur not later than forty-eight (48) hours prior to
the Lease expiration. In the event of Lessee's failure to arrange such joint
inspections and/or participate in either such inspection, Lessor's inspection at
or after Lessee's vacating the Premises shall be conclusively deemed correct for
purposes of determining Lessee's responsibility for repairs and restoration but
prior to the Lessee expiration.
2. Notwithstanding the provisions set forth above, all alterations, additions,
and improvements in, on or to the Premises made or installed by or for Lessee,
including carpeting (collectively, "Alterations"), shall be and remain the
property of Lessee during the Term. Upon the expiration or sooner termination of
the Term, all Alterations shall become a part of the realty and shall belong to
Landlord without compensation, and title shall pass to Landlord under this Lease
as by a ▇▇▇▇ of sale. At the end of the Term or any renewal of the Term or other
sooner termination of this Lease, Lessee will peaceably deliver up to Lessor
possession of the Premises, together with all Alterations by whomsoever made, in
the same condition received or first installed, broom clean and free of all
debris, excepting only ordinary wear and tear and damage by fire or other
casualty. Notwithstanding the foregoing, if Landlord elects by notice given to
Lessee at least ten (10) days prior to expiration of the Term, Lessor shall, at
Lessor's sole cost, remove any Alterations, including carpeting, so designated
by Lessor's notice, and repair any damage caused by such removal. Lessee must at
Lessee's sole cost, remove upon termination of this Lease, any and all of
Lessee's furniture, furnishings, movable partitions of less than full height
from floor to ceiling and other trade fixtures and personal property, as well as
all date/telecommunications cabling and wiring installed by or on behalf of
Lessee, whether inside walls, under any raised floor or above any ceiling
(collectively, "Personalty"). Personalty not so removed shall be deemed
abandoned by the Lessee and title to the same shall thereupon pass to Lessor
under this Lease as by a ▇▇▇▇ of sale, but Lessee shall remain responsible for
the cost of removal and disposal of such Personalty, as well as any damage
caused by such removal.
3. Notwithstanding the provisions set forth above, all obligations of Lessee
under this Lease not fully performed as of the expiration or earlier termination
of the Term shall survive the expiration or earlier termination of the Term.
Upon the Expiration or earlier termination of the Term, Lessee shall pay to
Lessor the amount, as reasonably estimated by Lessor, necessary to repair and
restore the Premises as provided in this Lease and/or to discharge Lessee's
obligation for unpaid amounts due or to become due to Lessor. All such amounts
shall be used and held by Lessor for payment of such obligations of Lessee, with
Lessee being liable for any additional costs upon demand by Lessor, or with any
excess to be returned to Lessee after all such obligations have been determined
and satisfied. Any otherwise unused Security Deposit shall be credited against
the amount payable by Lessee under this Lease.
8.2 LIABILITY INSURANCE.
Lessee shall keep in force throughout the Term: (a) a Commercial General
Liability insurance policy or policies to protect the Lessor Entities against
any liability to the public or to any invitee of Lessee or a Lessor Entity
incidental to the use of or resulting from any accident occurring in or upon the
Premises with a limit of not less than $1,000,000.00 per occurrence and
9
8.2 LIABILITY INSURANCE. (Continued)
not less than $2,000,000.00 in the annual aggregate, or such larger amount as
Lessor may prudently require from time to time, covering bodily injury and
property damage liability and $1,000,000 products/completed operations
aggregate; (b) Business Auto Liability covering owned, non-owned and hired
vehicles with a limit of not less than $1,000,000 per accident; (c) insurance
protecting against liability under Worker's Compensation Laws with limits at
least as required by statute with Employers Liability with limits of $500,000
each accident, $500,000 disease policy limit, $500,000 disease--each employee;
(d) All Risk or Special Form coverage protecting Lessee against loss of or
damage to Lessee's alterations, additions, improvements, carpeting, floor
coverings, panelings, decorations, fixtures, inventory and other business
personal property situated in or about the Premises to the full replacement
value of the property so insured; and, (e) Business Interruption Insurance with
limit of liability representing loss of at least approximately three (3) months
of income.
The aforesaid policies shall (a) be provided at Lessee's expense; (b) name the
Lessor Entities as additional insureds (General Liability) and loss payee
(Property--Special Form); (c) be issued by an insurance company with a minimum
Best's rating of "A:VII" during the Term; and (d) provide that said insurance
shall not be canceled unless thirty (30) days prior written notice (ten days for
non-payment of premium) shall have been given to Lessor; a certificate of
Liability insurance on Accord Form 25 and a certificate of Property insurance on
Accord Form 27 shall be delivered to Lessor by Lessee upon the Commencement Date
and at least thirty (30) days prior to each renewal of said insurance.
10
Whenever Lessee shall undertake any alterations, additions or improvements in,
to or about the Premises ("Work") the aforesaid insurance protection must extend
to and include injuries to persons and damage to property arising in connection
with such Work, without limitation including liability under any applicable
structural work act, and such other insurance as Lessor shall reasonably
require; and the policies of or certificates evidencing such insurance must be
delivered to Lessor prior to the commencement of any such Work.
26. NO RIGHT TO HOLDOVER.
Lessee has no right to retain possession of the Premises or any part thereof
beyond the expiration or earlier termination of this Lease. In the event that
Lessee holds over in violation of this Paragraph 26 then the Base Rent payable
from and after the time of the expiration or earlier termination of this Lease
shall be increased to One Hundred Twenty Five percent (125%) of the Base Rent
applicable during the month immediately proceeding such expiration or earlier
termination for the first month of holdover and thereafter One Hundred and Fifty
Percent (150%) of the Base Rent applicable during the 62nd month of the initial
Lease Term or earlier termination. Nothing contained herein shall be construed
as a consent by Lessor to any holding over by Lessee.
44. AUTHORITY.
Lessee hereby represents and warrants that neither Lessee, nor any persons or
entities holding any legal or beneficial interest whatsoever in Lessee, are (i)
the target of any sanctions program that is established by Executive Order of
the President or published by the Office of Foreign Assets Control, U.S.
Department of the Treasury ("OFAC"); (ii) designated by the President or OFAC
pursuant to the Trading with the Enemy Act, 50 U.S.C. App. ss. 5, the
International Emergency Economic Powers Act, 50 ▇.▇.▇.▇▇.▇▇. 1701-06, THE
Patriot Act, Public Law 107-56, Executive Order 13224 ( September 23, 2001) or
any Executive Order of the President issued pursuant to such statutes; or (iii)
named on the following list that is published by OFAC: "List of Specially
Designated Nationals and Blocked Persons." If the foregoing representation is
untrue at any time during the Term, an Event of Default will be deemed to have
occurred, without the necessity of notice to Lessee."
49. OUTSIDE STORAGE.
No material is to be stored outside the building of the Industrial Center at any
time unless it is a fenced area with screens. The prohibition against outside
storage includes, but is not limited to, equipment, materials, inoperative
vehicles, campers, trailers, boats, barrels, pallets and trash (other than in
containers provided by commercial trash collectors which are picked up on a
regularly scheduled basis subject to 7.2(d) above).
50. UTILITIES.
Lessee shall be solely responsible for and shall promptly pay all charges for
heat, air conditioning, water (including water for the landscape on the parcel),
gas, electricity or any other utility used, consumed or provided in, furnished
to or attributable to the Premises or the Parcel at the rates charged by the
supplying utility companies with any taxes/assessments thereon. Should Lessor
elect to supply any or all of such utilities, Lessee agrees to purchase and pay
for the same as additional rent as apportioned by Lessor. The rate to be charged
by Lessor to Lessee shall not exceed the rate charged to Lessor by any supplying
utility. Lessee shall reimburse Lessor within thirty (30) days of billing for
fixture charges and/or water tariffs, if applicable, which are charged to Lessor
by local utility companies. This charge will increase or decrease with current
charges being levied against Lessor or the Premises by the local utility
company, and will be due as additional rent. In no event shall Lessor be liable
for any interruption or failure in the supply of any such utility services to
Lessee.
51. LESSEE'S TRASH.
Lessee at Lessee's expense shall be responsible for Lessee's trash removal.
Lessee shall keep Lessee's trash bin(s) either inside Lessee's Premises or
outside the Premises in the Industrial Center in an area acceptable to Lessor.
52. VEHICLE PARKING.
Lessee shall be entitled to use Twenty-Four (24) Unreserved Parking spaces on
those portions of the Common Areas designated from time to time by Lessor for
parking. Lessee shall not use more parking spaces than said number. Said parking
spaces shall be used for parking by vehicles no larger than full-size passenger
automobiles or pick-up trucks, herein
11
52. VEHICLE PARKING. (Continued)
called "Permitted Size Vehicles". Vehicles other than permitted Size Vehicles
shall be parked and loaded or unloaded as directed by Lessor in the Rules and
Regulations as set forth in Exhibit C of this Lease.
(a) Lessee shall not permit or allow any vehicles that belong to or are
controlled by Lessee or Lessee's employees, suppliers, shippers, customers,
contractors or invitees to be loaded, unloaded, or parked in areas other than
those designated by Lessor for such activities.
(b) If Lessee permits or allows any of the prohibited activities described
in this Paragraph 52, then Lessor shall have the right, without notice, in
addition to such other rights and remedies that it may have, to remove or tow
away the vehicle involved and charge the cost to Lessee, which cost shall be
immediately payable upon demand by Lessor. Notwithstanding the foregoing, Lessor
hereby agrees to give Lessee Written Notice (facsimile expectable) of said
prohibited activity the first time such said prohibited activity occurs (notice
one time only) during the term of the Lease.
(c) Lessor shall at the Commencement Date of this Lease, provide the
parking facilities required by Applicable Law.
53. MAJOR REPLACEMENT - USEFUL LIFE
Notwithstanding anything contained in Paragraph 7.1 of the Lease to the
contrary, if at any time during the term hereof or any extension thereof any
component of the air conditioning equipment located in the Premises or on the
roof, which is the obligation of Lessee to maintain, requires replacement in the
reasonable opinion of a contractor reasonably acceptable to Lessee and Lessor,
the cost of which component shall be $1,000.00 or more ("Major Component"),
Lessee and Lessor shall share the cost of such replacement as hereinafter set
forth, if the benefit or useful life of the Major Component extends beyond the
term of this Lease (as such term may be extended by exercise of any options by
Lessee), the useful life of the Major Component shall be prorated over the
remaining portion of the term of this Lease (as extended), and Lessee shall be
liable only for the portion of the cost which is applicable to the term of this
Lease (as extended). For the purpose of this provision, the useful life of any
such Major Component such as an HVAC unit shall be deemed to be 10 years.
54. FINANCIAL STATEMENTS.
Lessee acknowledges that it has provided Lessor with its (and, if applicable,
its guarantor's) financial statement(s) as a material inducement to Lessor's
agreement to lease the Premise to Lessee, and that Lessor has relied on the
accuracy of said financial statement(s) in entering into Lease. Lessee
represents and warrants that the information contained in said financial
statement(s) is true, complete and correct in all material aspects, and agrees
that the foregoing representation and warranty shall be a precondition to the
Lease. At any time during the term of this Lease, within five (5) business days
of Lessor's request, Lessee shall furnish to Lessor financial statement(s) of a
similar nature for Lessee's most recent fiscal year available and shall
represent and warrant the accuracy of such information.
55. LIMITATION OF LESSOR'S LIABILITY.
Redress for any claims against Lessor under this Lease shall only be made
against Lessor to the extent of Lessor's interest in the Industrial Center of
which the leased Premises are a part. The obligations of Lessor under this lease
shall not be personally binding on, nor shall any resort be had to the private
properties of, any of its trustees or board of directors and officers, as the
case may be, managers, the general partners thereof or any beneficiaries,
stockholders, employees or agents of Lessor, or its investment manager.
12
LESSOR: LESSEE:
SFERS REAL ESTATE CORP. DD, PRI MEDICAL TECHNOLOGIES, INC.,
a Delaware corporation a Nevada corporation
BY: RREEF MANAGEMENT COMPANY,
a Delaware corporation
BY: /s/ ▇▇▇ ▇▇▇▇▇▇
---------------------------------
▇▇▇ ▇▇▇▇▇▇
President
By:/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------- DATED:10/12/2006
▇▇▇▇▇ ▇▇▇▇▇▇
Vice President
DATED:10/12/2006 BY:/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Chief Financial Officer
DATED:10/12/2006
NOTICE ADDRESS: NOTICE ADDRESS:
RREEF MANAGEMENT COMPANY PRI MEDICAL TECHNOLOGIES, INC.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇. ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, #▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
ATTN: District Manager
13
EXHIBIT A
Exhibit A attached to and made a part of Lease bearing the Lease Reference Date
of September 19, 2006, between SFERS REAL ESTATE CORP. DD., a Delaware
corporation, as Lessor and PRI MEDICAL TECHNOLOGIES, INC., a Nevada corporation,
as Lessee for Premises known as ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇,
consisting of approximately 12,842 square feet.
PREMISES
Exhibit A is intended only to show the general layout of the Premises as of the
beginning of the Term of this Lease. It does not in any way supersede any of
Lessor's rights with respect to arrangements and/or locations of public parts of
the Industrial Center and changes in such arrangements and/or locations. It is
not to be scaled; any measurements or distances shown should be taken as
approximate.
This site plan is intended only to show the general layout of the property or a
part thereof. Lessor reserves the right to alter, vary, add to or omit in whole
or in part any structures and/or common areas and/or land area shown on this
site plan. All measurements and distances are approximate. This plan is not to
scale.
1
Initials
EXHIBIT B
Exhibit B attached to and made a part of Lease bearing the Lease Reference Date
of September 19, 2006, between SFERS REAL ESTATE CORP. DD, a Delaware
corporation, as Lessor and PRI MEDICAL TECHNOLOGIES, INC., a Nevada corporation,
as Lessee for Premises known as ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇,
consisting of approximately 12,842 square feet.
WORK LETTER
This Work Letter is attached to and hereby made a part of that certain AIR Lease
dated September 19, 2006 by and between the above-named parties. In the event of
any conflict between the Lease and any of the terms and conditions contained in
the Work Letter, the Work Letter shall be controlling. The purpose of this Work
Letter is to set forth the work which Lessee is obligated to perform in
connection with the completion of the Lessee Improvements to the Premises.
INITIAL ALTERATIONS
Lessor's Work
--------------
Lessee shall accept the Premises in its "as is" condition as of the Commencement
Date. It is expressly understood and agreed that Lessor shall have no
responsibility or obligation to perform any work with respect to the shell,
floor, entrance, mezzanine, walls, ceiling, lighting fixtures, HVAC system,
toilet room, utilities systems, or otherwise with respect to the Premises except
as set forth in Paragraph 2.2 of this Lease except as set forth below.
Lessee Improvement Allowance
----------------------------
Lessor shall obtain three (3) bids to carpet and repaint the existing office
areas. The amount of the lowest bid shall be provided to Lessee in the form of a
Lessee Improvement Allowance ("Allowance"). Lessee shall be responsible, at
Lessee's sole cost and expense, to complete said work during the construction of
its additional offices.
Lessor shall also provide Lessee with an additional allowance ("Amortized
Improvement Allowance") up to Fifty Thousand and no/100 Dollars ($50,000.00) for
Lessee's construction of improvements in the Premises. The Amortized Improvement
Allowance shall be amortized over the Initial Term of the Lease at an interest
rate of Ten percent (10%) per annum and paid as additional rent each month,
along with, and in addition to Base Rent, throughout the Initial Lease Term.
Lessee shall be responsible for any cost of improvements beyond the total of the
Allowance and the Amortized Improvement Allowance.
The total amount of the Amortized Improvement Allowance shall be established
upon completion of the improvements and shall be specified and mutually agreed
upon in a Commencement Date Memorandum, attached hereto as Exhibit F.
The Allowance and the Amortized Improvement Allowance shall be used only for the
cost of construction and installation of the improvements, including all labor,
materials, permits, fees, architectural and engineering fees and costs. In no
event shall the Allowance or the Amortized Improvement Allowance be used for
telephone/data cabling, furniture, fixtures, equipment, personal property,
moving expenses, or as a credit against rent.
Payment for Lessee Improvements
--------------------------------
Lessee shall deliver to Lessor, invoices, and unconditional lien releases or
other documentation ("Construction Invoices"), all reasonably satisfactory to
Lessor, pertaining to the cost of the Improvements. Lessee shall, as hereinafter
provided, receive the Allowance, and or the Amortized Improvement Allowance to
reimburse Lessee, to the extent of costs for Improvements paid by Lessee.
The Allowance, and or the Amortized Improvement Allowance shall be payable by
Lessor to Lessee within thirty (30) days after (1) completion of the
Improvements, (2) Lessee has delivered to Lessor reasonable documentation
evidencing payment ("Lessee Payment") made by Lessee to its contractors in
connection with such Improvement work, together with unconditional lien releases
reasonably satisfactory to Lessor, and (3) Lessee has opened for business, but
in no event any later than six months after the Commencement Date of this Lease
subject to 1 & 2 above. Notwithstanding any contrary provisions herein, payment
by Lessor for such Improvement work shall not be due until Lessor has determined
that (a) there are no applicable or claimed mechanic's liens, stop notices or
the like, and (b) the Allowance, and or the Amortized Improvement Allowance are
applied solely to Improvements depicted in the approved plans; provided that
Lessor's determination of the foregoing shall be completed with thirty (30) days
following completion of the Improvements.
2
All other improvements to the Premises shall be at Lessee's sole cost and
expense.
Lessee's Work
--------------
In the event Lessee does other improvements, Lessee agrees to furnish Lessor
with two complete sets of Lessee's improvement plans and specifications for
Lessor's written approval, which approval may be withheld or denied, in Lessor's
sole and absolute discretion, prior to the submission of said plans to any and
all governmental authorities and prior to the commencement of any improvement
work. The plans shall be submitted to Lessor complete with all information
required for Lessee's submission to the Department of Building and Safety for
the City of Los Angeles for plan check and issuance of all required permits. The
plans shall include mechanical and electrical drawings showing the location of
partitions, ceiling plans including light fixtures, doors, wall finishes and
floor coverings, and Lessee's special requirements, if any. The plans shall also
include elevations of all storefront appearances, color board(s) indicating
design finish selections and a floorplan indicating the placement of Lessee's
fixtures. Any such special requirements shall conform to all applicable building
codes, regulations and ordinances.
3
EXHIBIT B - WORK LETTER (continued)
Lessee's Work (Continued)
The Plans shall be approved or disapproved by Lessor within five (5) business
days after Lessor's receipt thereof; provided that failure of Lessor to respond
within such five (5) business day period shall not be deemed approval. If Lessor
disapproves the Plans, or any portion thereof, Lessor shall promptly notify
Lessee of the revisions which Lessor requires in order to obtain Lessor's
approval. Lessee shall, within five (5) business days from Lessor's disapproval,
submit to Lessor plans and specifications incorporating the revisions required
by Lessor.
Said revisions shall be subject to Lessor's approval, which approval shall not
be unreasonably withheld or delayed. The preceding process shall continue until
the Plans have been approved.
Within five (5) business days after Lessor has approved the Plans as aforesaid,
Lessee shall submit same to all governmental authorities having or exercising
jurisdiction over the work described in the Plans for the purpose of obtaining
all necessary approvals thereof including, without limitation, building permits.
Any changes which are required to be made to the Plans by any such governmental
authorities shall be subject to Lessor's approval. Lessor's approval or
disapproval shall occur within five (5) business days. Lessee shall bear all
costs and fees in connection with such submittals to governmental authorities.
Lessee shall not commence construction in the Premises prior to obtaining all
permits and approvals required by any and all governmental authorities. Lessee
shall cause the leasehold improvements to be made with due diligence in
accordance with the approved Plans and in a good and workmanlike manner at
Lessee's sole cost and expense.
Lessee's cost shall include, without limitation, the contractor's and
architect's fees (space plans, working drawings, and special design work),
engineering (electrical and mechanical), electrical work, zoning of HVAC system,
telephone installation, floor and wall coverings, any plumbing, any costs
associated with obtaining building permits or license, complying with Title 24
requirements, if any, for providing handicap access in or to the Premises,
procuring insurance covering loss, damage, or injury arising from or relating to
the construction work, complying with requirements for installation of life
safety systems, if any, including, but not limited to, systems for smoke
evacuation or fire sprinkler installation including any related planning,
architectural engineering or construction costs. Lessee shall choose its own
contractor and subcontractors subject to Lessor's prior written approval, which
approval shall not be unreasonably withheld.
Lessee shall enter into a contract for construction of the Lessee improvements
with the general contractor selected to perform the Lessee improvement
construction. Upon execution of the contract between Lessee and Lessee's
Contractor, Lessee shall provide Lessor with a copy of said contract. Lessee
shall notify its contractor that Lessor shall bear no responsibility with
respect to the performance by such contractor (including, without limitation,
time delays) under such separate contract. Lessee and its contractors and
subcontractors may, upon written notice to Lessor after mutual execution of this
Lease and upon securing the approvals required by this Agreement, enter the
Premises to perform such work.
Lessee shall cause the leasehold improvements to be performed in accordance with
the requirements of the contracts and subcontracts therefor. The form and
content of such contracts and subcontracts (including, without limitation,
provisions requiring liability, property damage, and worker's compensation
insurance and indemnities for the protection of Lessor and provisions indicating
that Lessor shall not be treated as guarantor of Lessee's obligations and that
the contractor or subcontractor shall not be treated as a third party
beneficiary, provisions wherein Lessee's contractors agree to abide by Lessor's
rules and regulations with regard to construction in the Industrial Center, and
provisions for delivery, prior to the commencement of any work, to Lessor's
Property Manager a certificate of insurance indemnifying Lessor against any and
all claims arising from said improvement work) shall be subject to Lessor's
approval. As a condition to each payment made to Lessee's contractor and
subcontractors, Lessee shall require lien releases. Lessee shall withhold a
retainage of not less than ten percent (10%) of all amounts due Lessee's
contractors or subcontractors until all Lessee improvement work is complete and
Lessee has received a final and unconditional lien release from contractor and
each subcontractor.
Notwithstanding the foregoing, Lessee shall not be required to supply
mechanical, electrical drawings, ceiling plans or any working drawings if no
changes are made to the existing lessee improvements.
4
GENERAL REQUIREMENTS
(1) Lessee shall notify Lessor of its intent to start Lessee Improvement
Work at least five (5) business days prior to the commencement of construction
in the Premises.
(2) No penetrations shall be made in exterior walls or the roof structure
without prior written consent of Lessor.
(3) Lessee shall deliver to Lessor "as builts" of the Premises within two
(2) weeks after construction is completed which shall become Exhibit B-2 to be
attached to this Lease.
(4) To prevent the violation of any roof warranty (if any), all roofing
work must be approved by Lessor in writing prior to the commencement of
construction work.
EXHIBIT B-1
Exhibit B-1 attached to and made a part of Lease bearing the Lease Reference
Date of September 19, 2006, between SFERS REAL ESTATE CORP. DD, a Delaware
corporation, as Lessor and PRI MEDICAL TECHNOLOGIES, INC., a Nevada corporation,
as Lessee for Premises known as ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇,
consisting of approximately 12,842 square feet.
Structural columns not shown.
This plan is intended only to show the general layout of the building or a part
thereof. This plan is not to scale.
Initials
EXHIBIT C
Exhibit C attached to and made a part of Lease bearing the Lease Reference Date
of September 19, 2006, between SFERS REAL ESTATE CORP. DD, a Delaware
corporation, as Lessor, and PRI MEDICAL TECHNOLOGIES, INC., a Nevada
corporation, as Lessee for Premises known as ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇ consisting of approximately 12,842 square feet.
5
RULES AND REGULATIONS
Lessee hereby agrees to the following:
1. No sign, placard, picture, advertisement, name or notice shall be
installed or displayed on any part of the outside or inside of the building or
Premises without the prior written consent of the Lessor. Lessor shall have the
right to remove, at Lessee's expense and without notice, any sign installed or
displayed in violation of this rule. All approved signs or lettering on doors
and walls shall be printed, painted, affixed or inscribed at the expense of
Lessee. In addition, Lessor reserves the right after the initial term to change
from time to time the format of the signs or lettering and to require previously
approved signs or lettering to be appropriately altered.
2. Lessee shall not install any curtains, blinds, shades or screens
attached to or hung in or used in connection with any window or door of the
Premises without Lessor's prior written approval. No awning shall be permitted
on any part of the Premises unless approved in writing by Lessor. Lessee shall
not place anything or allow anything to be placed against or near any glass
partitions or doors or windows which may appear unsightly, in the opinion of
Lessor, from outside the Premises.
3. Lessee shall not obstruct any sidewalks, passages, exits, and entrances
that are for the general public, and Lessor shall in all cases retain the right
to control and prevent access thereto of all persons whose presence in the
judgement of Lessor would be prejudicial to the safety, character, reputation
and interests of the Industrial Center and its lessees provided that nothing
herein contained shall be construed to prevent such access to persons with whom
any Lessee normally deals in the ordinary course of its business, unless such
persons are engaged in illegal activities. Lessee and no employee or invitee of
Lessee shall go upon the roof of the building.
4. All cleaning and maintenance services for the exterior and common areas
of the Industrial Center shall be provided exclusively through Lessor. Lessee
shall not cause any unnecessary labor by carelessness or indifference to the
good order and cleanliness of the building. Lessor shall not in any way be
responsible to any Lessee for any loss of property on the Premises, however
occurring, or for any damage to any Lessee's property by the maintenance
personnel or any other employee or any other person.
5. Lessor will furnish Lessee free of charge with two keys to the front
exterior doors in the Premises. Lessor may make a reasonable charge for any
additional keys. Lessee, upon the termination of its tenancy, shall deliver to
Lessor all of the keys to all doors in the Premises including but not limited to
the front exterior door and all interior locking doors and locking cabinetry.
6. If Lessee requires telegraphic, telephonic, burglar alarm or similar
services, it shall first obtain, and comply with, Lessor's instructions in their
installation.
7. Lessee shall not place a load upon any floor which exceeds the load per
square foot which such floor was designed to carry and which is allowed by law.
Lessor shall have the right to prescribe the weight, size and position of all
equipment, materials, furniture or other property brought into the Premises.
Heavy objects shall, stand on such platforms as determined by Lessor to be
necessary to properly distribute the weight. Business machines and mechanical
equipment belonging to Lessee which cause noise or vibration that may be
transmitted to the structure of the building or to any space therein to such a
degree as to be objectionable to Lessor or to any lessees shall be placed and
maintained by Lessee, at Lessee's expense, on vibration eliminators or other
devices sufficient to eliminate noise or vibration. Lessor will not be
responsible for loss of, or damage to, any such equipment or other property from
any cause, and all damage done to the building by maintaining or moving such
equipment or other property shall be repaired at the expense of Lessee.
8. Lessee shall not use any method of heating or air conditioning other
than that supplied by Lessor.
9. Lessee shall close and lock the doors of its Premises and entirely shut
off all water faucets or other water apparatus and electricity, gas or air
outlets before Lessee and its employees leave the Premises. Lessee shall be
responsible for any damage or injuries sustained by other lessees or occupants
of the building or by Lessor for noncompliance with this rule.
6
EXHIBIT C - RULES AND REGULATIONS (continued)
10. The toilet rooms, toilets, urinals, wash bowls and other apparatus
shall not be used for any purpose other than that for which they were
constructed, no foreign substance of any kind whatsoever shall be thrown
therein, and the expense of any breakage, stoppage or damage resulting from the
violation of this rule shall be borne by the Lessee who, or whose employees or
invitees, shall have caused it.
11. No aerial shall be erected on the roof or exterior walls of the
Premises, or on the grounds, without in each instance, the written consent of
the Lessor. Any aerial so installed without such written consent shall be
subject to removal by Lessor without notice to Lessee and the cost for said
removal by Lessor will be billed to Lessee and paid by Lessee to Lessor in
accordance with Paragraph 4.
12. No loud speakers, televisions, phonographs, radios, or other devices
shall be used in a manner so as to be heard or seen outside of the Premises
without the prior written consent of the Lessor.
13. Except as approved by Lessor, Lessee shall not ▇▇▇▇, drive nails, screw
or drill into the partitions, woodwork or plaster or in any way deface the
Premises. Lessee shall not cut or bore holes for wires. Lessee shall not affix
any floor covering to the floor of the Premises in any manner except as approved
by Lessor. Lessee shall repair any damage resulting from noncompliance with this
rule.
14. Lessee shall not install, maintain or operate upon the Premises any
vending machines unless said vending machines are for Lessee's employees'
exclusive use.
15. No cooking shall be done or permitted by any Lessees on the Premises,
except that use by the Lessee of Underwriters' Laboratory approved equipment for
brewing coffee, tea, hot chocolate and similar beverages shall be permitted
including a UL approved microwave oven, provided that such equipment and use is
in accordance with all applicable federal, state and city laws, codes,
ordinances, rules and regulations.
16. Lessee shall not wash, change the oil, or repair vehicles or equipment
in the common areas of the Industrial Center or the Premises.
17. Lessee shall be entitled to park in common with other lessees of
Lessor. Lessee agrees not to overburden the parking facilities and agrees to
cooperate with Lessor and other Lessees in the use of parking facilities. Lessor
reserves the right in the absolute discretion to determine whether parking
facilities are becoming crowded and, in such event, to allocate parking spaces
among Lessee or to designate areas within which Lessee must park.
18. Lessee shall not use the name of the building in connection with or in
promoting or advertising the business of Lessee except as Lessee's address.
19. Lessor may waive any one or more of these Rules and Regulations for the
benefit of any particular lessee or lessees, but no such waiver by Lessor shall
be construed as a waiver of such Rules and Regulations in favor of any other
lessee or lessees, nor prevent Lessor from thereafter enforcing any such Rules
and Regulations against any or all of the lessees of the building.
20. Pets - No birds, fish, reptiles or animals shall be brought into or
kept in or about the Premises/Building or Industrial Center.
21. Lessor reserves the right from time to time to amend or supplement the
foregoing Rules and Regulations, and to adopt and promulgate additional
reasonable rules and regulations applicable to the Premises and/or the
Industrial Center. Notice of such rules and regulations and amendments and
supplements thereto, if any, shall be given to the Lessee.
7
EXHIBIT D
HAZARDOUS MATERIALS QUESTIONNAIRE
This Exhibit D is attached to and made a part of Lease bearing the Lease
Reference Date of September 19, 2006 between SFERS REAL ESTATE CORP. DD, a
Delaware corporation, as Lessor and PRI MEDICAL TECHNOLOGIES, INC., a Nevada
corporation, as Lessee, for the Premises commonly known as ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, consisting of approximately 12,842 square feet.
This questionnaire is designed to solicit information regarding your proposed
use of hazardous or toxic materials. Please complete the questionnaire and
return it to RREEF Management Company for evaluation. If your use of materials
or generation of wastes is considered to be significant, further information may
be requested regarding your plans for hazardous and toxic materials management.
Your cooperation in this matter is appreciated. If you have any questions do not
hesitate to call for assistance.
I. PROPOSED LESSEE OR LESSEE
PRI MEDICAL TECHNOLOGIES, INC., a Nevada corporation
--------------------------------------------------------------------------------
Name (Corporation, Individual, Corporate or Individual d.b.a., or Public Agency)
Standard Industrial Classification Code (SIC)
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
--------------------------------------------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇, Zip Code
Contact Person & Title: ▇▇▇▇ ▇▇▇▇▇, CFO
-------------------------------------------------------
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ Fax: (▇▇▇) ▇▇▇-▇▇▇▇ E-mail: ▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇.▇▇▇
--------------------------------------------------------------------------------
II. LOCATION AND ADDRESS OF PROPOSED LEASE
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
--------------------------------------------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇, ▇▇▇ Code
8
III. DESCRIPTION OF PROPOSED FACILITY USE
Describe proposed use and operation of Premises including principal products or
services to be conducted at facility: General offices, warehousing and
distribution of medical laser equipment, technical services, and other Lawful
related uses and for no other purposes.
Does the operation of your business involve the use, generation, treatment,
storage, transfer or disposal of hazardous waste materials? Yes No X . If yes,
or if your SIC code number is between 2000 to 4000, please complete Section IV.
IV. PERMIT DISCLOSURE
Does the operation of your business require permits, license or plan approval
from any of the following agencies?
U.S. Environmental Protection Agency - Air Quality Management District City or
County Sanitation District Bureau of Alcohol, Firearms and Tobacco State
Department of Health Services City or County Fire Department U.S. Nuclear
Regulatory Commission Regional Water Quality Control Board
Indicate permit or license numbers, issuing agency and expiration date or
renewal date, if applicable.
N/A
If your answer is yes to any of the above questions, please complete Sections V
and VI.
9
V. HAZARDOUS MATERIALS DISCLOSURE
Will any hazardous or toxic materials or substances be stored onsite? Yes No X .
If yes, please describe the materials or substances to be stored, quantities and
proposed method of storage (i.e. drums, aboveground or underground storage
tanks, cylinders, other), and whether the material is a Solid (S), Liquid (L) or
Gas (G):
Material Storage Method Quantity on a Monthly Basis
-------------------------- --------------------------- ------------------------
-------------------------- --------------------------- ------------------------
-------------------------- --------------------------- ------------------------
-------------------------- --------------------------- ------------------------
-------------------------- --------------------------- ------------------------
-------------------------- --------------------------- ------------------------
Attach additional sheets if necessary.
Is any facility modification required or planned to mitigate the release of
toxic or hazardous substance or wastes into the environment? Yes ________ No
_______ . If yes, please describe the proposed facility modifications:
--------------------------------------------------------------------------------
VI. HAZARDOUS WASTE DISCLOSURE
a) Will any hazardous waste, including recyclable waste, be generated by the
operation of your business? Yes _____ or No X . If yes, please list the
hazardous waste which will be generated at the facility, its hazard class and
volume/frequency of generation on a monthly basis:
Waste Name Hazard Class Volume/Month
--------------------------- ------------------------ ------------------------
--------------------------- ------------------------ ------------------------
--------------------------- ------------------------ ------------------------
--------------------------- ------------------------ ------------------------
--------------------------- ------------------------ ------------------------
--------------------------- ------------------------ ------------------------
Attach additional sheets if necessary.
b) If yes, please also indicate if any such wastes are to be stored within the
Premises and the proposed method of storage (i.e. drums, aboveground or
underground storage tanks, cylinders, other):
10
Waste Name Storage Method
--------------------------- ------------------------ ------------------------
--------------------------- ------------------------ ------------------------
--------------------------- ------------------------ ------------------------
--------------------------- ------------------------ ------------------------
--------------------------- ------------------------ ------------------------
--------------------------- ------------------------ ------------------------
c) If yes, please also describe the method(s) of disposal for each waste.
Indicate where disposal will take place and method of transportation to be used:
N/A d) Is any treatment or processing of hazardous wastes to be conducted
onsite? Yes _______ No X . If yes, please describe proposed treatment/processing
methods:
N/A
e) Which agencies are responsible for monitoring and evaluating compliance with
respect to the storage and disposal of hazardous materials or wastes at or from
the Premises?
(Please list all agencies)
f) Have there been any agency enforcement actions regarding the company
facilities, or any existing company facilities, or any past, pending or
outstanding administrative orders or consent decrees? Yes ______ No X If yes,
have there been any continuing compliance obligations imposed on your company as
a result of decrees or orders? Yes______ No . If yes, please describe: N/A
g) Has the company been the recipient of requests for information, notices and
demand letters, cleanup and abatement orders or cease and desist orders or other
administrative inquiries? Yes _____ No X . If yes, please describe:
N/A
h) Are there any pending citizen lawsuits, or have any notices of violations
been provided to the company or any existing facilities pursuant to the citizens
suit provisions of any statute? Yes ______ No X . If yes, please describe:
N/A
i) Have there been any previous lawsuits against the company regarding
environmental concerns? Yes ____ No X . If yes, please describe how these
lawsuits were resolved:
N/A
j) Has an environmental audit ever been conducted at any of your company's
existing facilities? Yes _____ No X . If yes, please describe:
N/A
k) Does your company carry environmental impairment insurance? Yes ______ No
__X__ . If yes, what is the name of the carrier and what are the effective
periods and monetary limits of such coverage? N/A
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
This Hazardous Materials Questionnaire is certified as being true and accurate
and has been completed by the party whose signature appears below on behalf of
Lessee as of the date set forth below.
Date: Signature:
------------------------------- -------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
11
COMMENCEMENT DATE MEMORANDUM
THIS COMMENCEMENT DATE MEMORANDUM, made as of January 23, 2007, by and between
SFERS REAL ESTATE CORP.DD, a Delaware corporation ("Lessor") and PRI Medical
Technologies, Inc., a Nevada corporation ("Lessee").
Recitals:
--------
A. Landlord and Tenant are parties to that certain Lease, dated for
reference September 19, 2006 (the "Lease") for certain premises (the
"Premises") consisting of approximately 12,842 square feet at the
building commonly known ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇.
B. Tenant is in possession of the Premises and the Term of the Lease has
commenced.
C. Landlord and Tenant desire to enter into this Memorandum confirming
the Commencement Date, the Expiration Date and other matters under the
Lease.
NOW, THEREFORE, Landlord and Tenant agree as follows:
1. The actual Commencement Date is December 22, 2006.
2. The actual Expiration Date is February 28, 2012.
3. The schedule of the Annual Base Rent and the Monthly Installment of Base Rent
set forth in the Addendum is deleted in its entirety, and the following is
substituted therefore:
-------------------------- ------------------ -------------------- ----------------- ----------------------
Period Rentable Square Annual Base Rent Annual Base Rent Monthly Installment
------------- ------------
From through Footage Per Square Foot of Base Rent
------------- ------------ ------------------ -------------------- ----------------- ----------------------
12/22/06 1/31/07 12,842 12,842 103,249.68 8,604.14
------------- ------------ ------------------ -------------------- ----------------- ----------------------
2/01/07 3/31/07 12,842 12,842 .00
------------- ------------ ------------------ -------------------- ----------------- ----------------------
4/01/07 12/31/07 12,842 12,842 103,249.68 8,604.14
------------- ------------ ------------------ -------------------- ----------------- ----------------------
1/01/08 12/31/08 12,842 12,842 107,379.72 8,948.31
------------- ------------ ------------------ -------------------- ----------------- ----------------------
1/01/09 12/31/09 12,842 12,842 111,674.88 9,306.24
------------- ------------ ------------------ -------------------- ----------------- ----------------------
1/01/10 12/31/10 12,842 12,842 116,141.88 9,678.49
------------- ------------ ------------------ -------------------- ----------------- ----------------------
------------- ------------ ------------------ -------------------- ----------------- ----------------------
1/01/11 02/28/12 12,842 12,842 120,787.56 10,065.63
------------- ------------ ------------------ -------------------- ----------------- ----------------------
4. Additional Rent: Pursuant to Exhibit B of this Lease, in addition to the
monthly Base Rent set forth in the Lease, Lessee shall pay the following as
additional rent ($50,000.00: the Amortized Improvement Allowance) amortized over
sixty (60) months at a rate calculated at 10% per annum. The additional rent due
and payable shall be payable in monthly installments of $1,062.35 on the same
day each month that the Base Rent is due and payable commencing on January 1,
2007 and terminating on December 31, 2011. Lessor shall pay to Lessee the
$50,000.00 within five (5) business days of receipt of this executed Memorandum.
5. Capitalized terms not defined herein shall have the same meaning as set forth
in the Lease.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date and year first above written.
LESSOR: LESSEE:
SFERS REAL ESTATE CORP. DD, PRI MEDICAL TECHNOLOGIES, INC.,
a Delaware corporation a Nevada corporation
BY: RREEF MANAGEMENT COMPANY,
a Delaware corporation
BY: /s/ ▇▇▇ ▇▇▇▇▇▇
-----------------------------
▇▇▇ ▇▇▇▇▇▇
President
BY: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇ DATED: 1/25/2007
Vice President -----------------------------
DATED: 1/29/2007
------------------------------
BY: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Chief Financial Officer
DATED: 1/22/2007
----------------------------